UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2022~~2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 001-38081

~~LIBERTY ENERGY INC.~~Liberty Energy Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware

81-4891595

(State or Other Jurisdiction of
Incorporation or Organization)

(I.R.S. Employer
Identification No.)

950 17th Street, Suite 2400

Denver, Colorado

80202

(Address of Principal Executive Offices)

(Zip Code)

(303) 515-2800

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to ~~Section~~section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Class A Common Stock, par value $0.01

LBRT

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☒			Accelerated filer ☐			Non-accelerated filer ☐			Smaller reporting company ☐

Emerging growth company ☐ (Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): ☐ Yes ☒ No

As of ~~October 18, 2022,~~July 17, 2023, the registrant had ~~182,158,820~~170,393,226 shares of Class A Common Stock and ~~325,902~~0 shares of Class B Common Stock outstanding.

Our Class A Common Stock is traded on the New York Stock Exchange under the symbol “LBRT.” There is no public market for our Class B Common Stock.

Table of Contents

TABLE OF CONTENTS


		Page No.
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	12
	Condensed Consolidated Statements of ~~Operations~~Income	23
	Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~	34
	Condensed Consolidated Statements of Changes in Equity	45
	Condensed Consolidated Statements of Cash Flows	56
	Notes to Condensed Consolidated Financial Statements	78

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	3332
Item 4.	Controls and Procedures	3332

PART II	OTHER INFORMATION	3433
Item 1.	Legal Proceedings	3433
Item 1A.	Risk Factors	3433
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3533
Item 3.	Defaults Upon Senior Securities	3533
Item 4.	Mine Safety Disclosures	3533
Item 5.	Other Information	3633
Item 6.	Exhibits	3734
SIGNATURES		3835

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) and certain other communications made by us contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange of 1934, as amended (the “Exchange Act”), including, among others, ~~statements about our expected growth from recent acquisitions such as the PropX Acquisition (as defined below),~~ expected performance, future operating results, oil and natural gas demand and prices and the outlook for the oil and gas industry, future global economic conditions, the impact of the Russian invasion of Ukraine, ~~the impacts of the novel strain of the coronavirus (“COVID-19”) pandemic,~~ improvements in operating procedures and technology, our business strategy and the business strategies of our customers, in addition to other estimates, and beliefs. For this purpose, any statement that is not a statement of historical fact should be considered a forward-looking statement. We may use the words “estimate,” “outlook,” “project,” “forecast,” “position,” “potential,” “likely,” “believe,” “anticipate,” “assume,” “plan,” “expect,” “intend,” “achievable,” “anticipate,” “may,” “will,” “continue,” “should,” “could” and similar expressions to help identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. We cannot assure you that our assumptions and expectations will prove to be correct. Important factors, many of which are beyond our control, could cause our actual results to differ materially from those indicated or implied by forward-looking statements, including but not limited to the risks and uncertainties described in our most recently filed Annual Report for the year ended December 31, 2022, this Quarterly Report, and other filings that we make with the U.S. Securities Exchange Commission (the “SEC”). We undertake no intention or obligation to update or revise any forward-looking statements, except as required by law, whether as a result of new information, future events or otherwise and readers should not rely on the forward-looking statements as representing the Company’s views as of any date subsequent to the date of the filing of this Quarterly Report on Form 10-Q. These forward-looking statements are based on management’s current belief, based on currently available information, as to the outcome and timing of future events.

All forward-looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.

Table of Contents

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

~~LIBERTY ENERGY INC.~~

~~Condensed Consolidated Balance Sheets~~

~~(Dollars in thousands, except share data)~~

~~(Unaudited)~~
September 30, 2022 December 31, 2021
Assets
Current assets:
Cash and cash equivalents $ 24,045 $ 19,998
Accounts receivable—trade, net of allowances for credit losses of $884 and $884, respectively 480,714 298,531
Accounts receivable—related party 10,307 —
Unbilled revenue (including amounts from related parties of $26,119 and $0, respectively) 200,144 108,923
Inventories 185,647 134,593
Prepaid and other current assets 95,204 68,332
Total current assets 996,061 630,377
Property and equipment, net 1,295,189 1,199,287
Finance lease right-of-use assets 31,812 18,201
Operating lease right-of-use assets 103,165 109,899
Other assets 98,669 82,289
Deferred tax assets 262 607
Total assets $ 2,525,158 $ 2,040,660
Liabilities and Equity
Current liabilities:
Accounts payable (including payables to related parties of $3,807 and $2,732, respectively) $ 378,480 $ 288,801
Accrued liabilities (including amounts due to related parties of $1,121 and $1,142, respectively) 286,504 235,115
Deferred revenue 976 4,552
Current portion of long-term debt, net of discount of $734 and $743, respectively 1,016 1,007
Current portion of finance lease liabilities 8,694 8,743
Current portion of operating lease liabilities 29,187 31,029
Total current liabilities 704,857 569,247
Long-term debt, net of discount of $721 and $1,270, respectively, less current portion 252,682 121,445
Deferred tax liability 563 563
Payable pursuant to tax receivable agreements 70,788 37,555
Noncurrent portion of finance lease liabilities 15,862 4,445
Noncurrent portion of operating lease liabilities 72,968 76,966
Total liabilities 1,117,720 810,221
Commitments & contingencies (Note 15)
Stockholders’ equity:
Preferred Stock, $0.01 par value, 10,000 shares authorized and none issued and outstanding — —
Common Stock:
Class A, $0.01 par value, 400,000,000 shares authorized and 182,158,820 issued and outstanding as of September 30, 2022 and 183,385,111 issued and outstanding as of December 31, 2021 1,822 1,834
Class B, $0.01 par value, 400,000,000 shares authorized and 325,902 issued and outstanding as of September 30, 2022 and 2,632,347 issued and outstanding as of December 31, 2021 3 26
Additional paid in capital 1,320,731 1,367,642
Retained earnings (accumulated deficit) 90,779 (155,954)
Accumulated other comprehensive loss (8,595) (306)
Total stockholders’ equity 1,404,740 1,213,242
Non-controlling interest 2,698 17,197
Total equity 1,407,438 1,230,439
Total liabilities and equity 2,525,158 2,040,660

~~See Notes to Condensed Consolidated Financial Statements.~~

Table of Contents

LIBERTY ENERGY INC.

Condensed Consolidated ~~Statements of Operations~~Balance Sheets

(InDollars in thousands, except ~~per~~ share data)

(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Revenue:
Revenue $ 1,122,453 $ 646,714 $ 2,834,304 $ 1,778,854
Revenue—related parties 65,794 7,013 89,332 8,193
Total revenue 1,188,247 653,727 2,923,636 1,787,047
Operating costs and expenses:
Cost of services (exclusive of depreciation, depletion, and amortization shown separately below) 874,453 593,683 2,258,190 1,614,574
General and administrative 50,473 32,281 130,953 88,043
Transaction, severance, and other costs 1,767 1,556 5,293 12,173
Depreciation, depletion, and amortization 82,848 65,852 234,815 191,122
Gain on disposal of assets (4,277) (79) (3,041) (1,076)
Total operating costs and expenses 1,005,264 693,293 2,626,210 1,904,836
Operating income (loss) 182,983 (39,566) 297,426 (117,789)
Other expense (income):
Loss (gain) on remeasurement of liability under tax receivable agreements 28,900 (4,947) 33,233 (8,252)
Gain on investments (2,525) — (2,525) —
Interest expense, net 6,773 4,007 15,959 11,528
Total other expense (income) 33,148 (940) 46,667 3,276
Net income (loss) before income taxes 149,835 (38,626) 250,759 (121,065)
Income tax expense 2,572 753 3,637 9,402
Net income (loss) 147,263 (39,379) 247,122 (130,467)
Less: Net income (loss) attributable to non-controlling interests 310 (489) 389 (6,812)
Net income (loss) attributable to Liberty Energy Inc. stockholders $ 146,953 $ (38,890) $ 246,733 $ (123,655)
Net income (loss) attributable to Liberty Energy Inc. stockholders per common share:
Basic $ 0.79 $ (0.22) $ 1.33 $ (0.72)
Diluted $ 0.78 $ (0.22) $ 1.30 $ (0.72)
Weighted average common shares outstanding:
Basic 185,508 178,311 185,414 171,402
Diluted 189,907 178,311 190,465 171,402


	June 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	31,667	$	43,676
Accounts receivable—trade, net of allowances for credit losses of $884 and $884, respectively	510,125		410,308
Accounts receivable—related party	7,162		—
Unbilled revenue (including amounts from related parties of $29,002 and $13,854, respectively)	201,907		175,704
Inventories	201,069		214,454
Prepaid and other current assets (including amounts from related parties of $6,426 and $0, respectively	121,985		112,531
Total current assets	1,073,915		956,673
Property and equipment, net	1,546,187		1,362,364
Finance lease right-of-use assets	53,461		41,771

Operating lease right-of-use assets	96,407		97,232
Other assets (including amounts from related parties of $0 and $11,799, respectively)	133,292		105,300
Deferred tax assets	21,240		12,592

Total assets	$	2,924,502	$	2,575,932
Liabilities and Equity
Current liabilities:
Accounts payable (including payables to related parties of $0 and $2,629, respectively)	$	368,723	$	326,818
Accrued liabilities (including amounts due to related parties of $0 and $730, respectively)	265,340		276,819
Income taxes payable	52,291		2,294
Deferred revenue	19,335		3,859
Current portion of long-term debt, net of discount of $0 and $730, respectively	—		1,020
Current portion of finance lease liabilities	10,926		11,393
Current portion of operating lease liabilities	27,615		27,294
Total current liabilities	744,230		649,497
Long-term debt, net of discount of $0 and $540, respectively, less current portion	288,000		217,426
Deferred tax liability	1,067		1,044
Payable pursuant to tax receivable agreements	114,842		118,874
Noncurrent portion of finance lease liabilities	33,765		22,490
Noncurrent portion of operating lease liabilities	68,657		69,295
Total liabilities	1,250,561		1,078,626
Commitments & contingencies (Note 14)

Stockholders’ equity:
Preferred Stock, $0.01 par value, 10,000 shares authorized and none issued and outstanding	—		—
Common Stock:
Class A, $0.01 par value, 400,000,000 shares authorized and 170,393,226 issued and outstanding as of June 30, 2023 and 178,753,125 issued and outstanding as of December 31, 2022	1,704		1,788
Class B, $0.01 par value, 400,000,000 shares authorized and none issued and outstanding as of June 30, 2023 and 250,222 issued and outstanding as of December 31, 2022	—		3
Additional paid in capital	1,146,130		1,266,097
Retained earnings	531,974		234,525
Accumulated other comprehensive loss	(5,867)		(7,396)
Total stockholders’ equity	1,673,941		1,495,017
Non-controlling interest	—		2,289
Total equity	1,673,941		1,497,306
Total liabilities and equity	$	2,924,502	$	2,575,932

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

LIBERTY ENERGY INC.

Condensed Consolidated Statements of ~~Comprehensive~~ Income ~~(Loss)~~

(In ~~thousands)~~thousands, except per share data)

(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Net income (loss) $ 147,263 $ (39,379) $ 247,122 $ (130,467)
Other comprehensive (loss) income
Foreign currency translation (6,343) (2,287) (8,299) 411
Comprehensive income (loss) $ 140,920 $ (41,666) $ 238,823 $ (130,056)
Comprehensive income (loss) attributable to non-controlling interest 299 (513) 379 (6,592)
Comprehensive income (loss) attributable to Liberty Energy Inc. $ 140,621 $ (41,153) $ 238,444 $ (123,464)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue:
Revenue	$	1,142,757	$	941,370	$	2,375,077	$	1,711,851
Revenue—related parties	52,231		1,249		81,988		23,538
Total revenue	1,194,988		942,619		2,457,065		1,735,389
Operating costs and expenses:
Cost of services (exclusive of depreciation, depletion, and amortization shown separately below)	833,456		713,718		1,721,872		1,383,737
General and administrative	58,034		42,162		111,070		80,480
Transaction, severance, and other costs	985		2,192		1,602		3,526
Depreciation, depletion, and amortization	99,695		77,379		194,096		151,967
(Gain) loss on disposal of assets	(3,660)		(3,436)		(3,173)		1,236
Total operating costs and expenses	988,510		832,015		2,025,467		1,620,946
Operating income	206,478		110,604		431,598		114,443
Other expense:
Loss on remeasurement of liability under tax receivable agreements	—		168		—		4,333

Interest income—related party	(350)		—		(723)		—
Interest expense, net	6,825		4,862		15,089		9,186
Total other expense	6,475		5,030		14,366		13,519
Net income before income taxes	200,003		105,574		417,232		100,924
Income tax expense	47,332		235		101,815		1,065
Net income	152,671		105,339		315,417		99,859

Less: Net income attributable to non-controlling interests	—		183		91		79
Net income attributable to Liberty Energy Inc. stockholders	$	152,671	$	105,156	$	315,326	$	99,780

Net income attributable to Liberty Energy Inc. stockholders per common share:
Basic	$	0.88	$	0.56	$	1.80	$	0.54
Diluted	$	0.87	$	0.55	$	1.76	$	0.52
Weighted average common shares outstanding:
Basic	173,131		186,719		174,840		185,367
Diluted	176,225		190,441		178,837		190,623

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

LIBERTY ENERGY INC.

Condensed Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net income	$	152,671	$	105,339	$	315,417	$	99,859
Other comprehensive income (loss)
Foreign currency translation	2,000		(3,012)		1,530		(1,956)
Comprehensive income	$	154,671	$	102,327	$	316,947	$	97,903
Comprehensive income attributable to non-controlling interest	—		177		92		80
Comprehensive income attributable to Liberty Energy Inc.	$	154,671	$	102,150	$	316,855	$	97,823

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

LIBERTY ENERGY INC.

Condensed Consolidated Statements of Changes in Equity

(In thousands, except per unit and per share data)

(Unaudited)


		Shares of Class A Common Stock	Shares of Class B Common Stock	Class A Common Stock, Par Value		Class B Common Stock, Par Value		Additional Paid in Capital		(Accumulated Deficit) Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity		Non-controlling Interest		Total Equity			Shares of Class A Common Stock	Shares of Class B Common Stock	Class A Common Stock, Par Value		Class B Common Stock, Par Value		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity		Non-controlling Interest		Total Equity
Balance—December 31, 2021		183,385	2,632	$	1,834	$	26	$	1,367,642	$	(155,954)	$	(306)	$	1,213,242	$	17,197	$	1,230,439
Balance—December 31, 2022																				Balance—December 31, 2022	178,753	250	$	1,788	$	3	$	1,266,097	$	234,525	$	(7,396)	$	1,495,017	$	2,289	$	1,497,306
Exchange of Class B Common Stock for Class A Common Stock	Exchange of Class B Common Stock for Class A Common Stock	2,306	(2,306)	23		(23)		15,817		—		—		15,817		(15,817)		—		Exchange of Class B Common Stock for Class A Common Stock	250	(250)	3		(3)		2,360		—		—		2,360		(2,360)		—
Offering Costs	Offering Costs	—	—	—		—		(79)		—		—		(79)		—		(79)		Offering Costs	—	—	—		—		(223)		—		—		(223)		—		(223)
Effect of exchange on deferred tax asset, net of liability under tax receivable agreements																				Effect of exchange on deferred tax asset, net of liability under tax receivable agreements	—	—	—		—		7,782		—		—		7,782		—		7,782
Deferred tax impact of ownership changes from issuance of Class A Common Stock																				Deferred tax impact of ownership changes from issuance of Class A Common Stock	—	—	—		—		103		—		—		103		—		103

Other distributions and advance payments to non-controlling interest unitholders		—	—	—		—		—		—		—		—		924		924
$0.10/share of Class A Common Stock dividend																				$0.10/share of Class A Common Stock dividend	—	—	—		—		—		(17,877)				(17,877)		—		(17,877)
Share repurchases	Share repurchases	(4,702)	—	(47)		—		(69,987)		—				(70,034)		(60)		(70,094)		Share repurchases	(9,889)	—	(99)		—		(134,620)		—				(134,719)		(23)		(134,742)
Excise tax on share repurchases																				Excise tax on share repurchases	—	—	—		—		(1,178)		—		—		(1,178)		—		(1,178)
Stock-based compensation expense	Stock-based compensation expense	—	—	—		—		17,031		—		—		17,031		95		17,126		Stock-based compensation expense	—	—	—		—		15,140		—		—		15,140		3		15,143
Vesting of restricted stock units	Vesting of restricted stock units	1,170	—	12		—		8		—		—		20		(20)		—		Vesting of restricted stock units	1,279	—	12		—		(11)		—		—		1		(1)		—
Tax withheld on vesting of restricted stock units	Tax withheld on vesting of restricted stock units	—	—	—		—		(9,701)		—		—		(9,701)		—		(9,701)		Tax withheld on vesting of restricted stock units	—	—	—		—		(9,320)		—		—		(9,320)		—		(9,320)
Currency translation adjustment	Currency translation adjustment	—	—	—		—		—		—		(8,289)		(8,289)		(10)		(8,299)		Currency translation adjustment	—	—	—		—		—		—		1,529		1,529		1		1,530
Net income	Net income	—	—	—		—		—		246,733		—		246,733		389		247,122		Net income	—	—	—		—		—		315,326		—		315,326		91		315,417
Balance—September 30, 2022		182,159	326	$	1,822	$	3	$	1,320,731	$	90,779	$	(8,595)	$	1,404,740	$	2,698	$	1,407,438
Balance—June 30, 2023																				Balance—June 30, 2023	170,393	—	$	1,704	$	—	$	1,146,130	$	531,974	$	(5,867)	$	1,673,941	$	—	$	1,673,941


		Shares of Class A Common Stock	Shares of Class B Common Stock	Class A Common Stock, Par Value		Class B Common Stock, Par Value		Additional Paid in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income		Total Stockholders’ Equity		Non-controlling Interest		Total Equity			Shares of Class A Common Stock	Shares of Class B Common Stock	Class A Common Stock, Par Value		Class B Common Stock, Par Value		Additional Paid in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total Stockholders’ Equity		Non-controlling Interest		Total Equity
Balance—December 31, 2020		157,952	21,550	$	1,579	$	216	$	1,125,554	$	23,288	$	—	$	1,150,637	$	159,406	$	1,310,043
Balance—December 31, 2021																				Balance—December 31, 2021	183,385	2,632	$	1,834	$	26	$	1,367,642	$	(155,954)	$	(306)	$	1,213,242	$	17,197	$	1,230,439
Exchange of Class B Common Stock for Class A Common Stock	Exchange of Class B Common Stock for Class A Common Stock	19,690	(19,690)	197		(197)		142,204		—		—		142,204		(142,204)		—		Exchange of Class B Common Stock for Class A Common Stock	2,306	(2,306)	23		(23)		15,817		—		—		15,817		(15,817)		—
Offering Costs	Offering Costs	—	—	—		—		(938)		—		—		(938)		(75)		(1,013)		Offering Costs	—	—	—		—		(564)		—		—		(564)		—		(564)
Other distributions and advance payments to non-controlling interest unitholders	Other distributions and advance payments to non-controlling interest unitholders	—	—	—		—		—		—		—		—		1,372		1,372		Other distributions and advance payments to non-controlling interest unitholders	—	—	—		—		—		—		—		—		924		924

Stock-based compensation expense	Stock-based compensation expense	—	—	—		—		14,335		—		—		14,335		756		15,091		Stock-based compensation expense	—	—	—		—		10,931		—		—		10,931		83		11,014
Vesting of restricted stock units	Vesting of restricted stock units	668	—	7		—		(3,082)		—		—		(3,075)		(510)		(3,585)		Vesting of restricted stock units	1,168	—	12		—		8		—		—		20		(20)		—
Restricted stock and RSU forfeitures		—	—	—		—		—		2		—		2		—		2
Tax withheld on vesting of restricted stock units																				Tax withheld on vesting of restricted stock units	—	—	—		—		(9,700)		—		—		(9,700)		—		(9,700)
Currency translation adjustment	Currency translation adjustment	—	—	—		—		—		—		191		191		220		411		Currency translation adjustment	—	—	—		—		—		—		(1,957)		(1,957)		1		(1,956)
Net loss		—	—	—		—		—		(123,655)		—		(123,655)		(6,812)		(130,467)
Balance—September 30, 2021		178,310	1,860	$	1,783	$	19	$	1,278,073	$	(100,365)	$	191	$	1,179,701	$	12,153	$	1,191,854
Net income																				Net income	—	—	—		—		—		99,780		—		99,780		79		99,859
Balance—June 30, 2022																				Balance—June 30, 2022	186,859	326	$	1,869	$	3	$	1,384,134	$	(56,174)	$	(2,263)	$	1,327,569	$	2,447	$	1,330,016

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

LIBERTY ENERGY INC.

Condensed Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)
Nine Months Ended September 30,
2022 2021
Cash flows from operating activities:
Net income (loss) $ 247,122 $ (130,467)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion, and amortization 234,815 191,122
Gain on disposal of assets (3,041) (1,076)
Inventory write-down 1,724 —
Non-cash lease expense 3,085 2,834
Stock-based compensation expense 17,126 15,091
Deferred income tax expense 316 6,124
Loss (gain) on remeasurement of liability under tax receivable agreements 33,233 (8,252)
Other non-cash (income) expense, net (1,007) 2,449
Changes in operating assets and liabilities:
Accounts receivable and unbilled revenue (250,471) (121,282)
Accounts receivable and unbilled revenue—related party (36,295) —
Inventories (56,472) (6,878)
Other assets (31,030) (5,001)
Deferred revenue (3,476) —
Accounts payable and accrued liabilities 143,986 135,981
Accounts payable and accrued liabilities—related party (4,696) —
Initial payment of operating lease liability (2,309) (503)
Net cash provided by operating activities 292,610 80,142
Cash flows from investing activities:
Purchases of property and equipment and construction in-progress (326,960) (123,008)
Investment in sand logistics (6,721) —
Investment in Fervo Energy Company and Natron Energy, Inc. (15,000) —
Proceeds from sale of assets 14,806 3,689
Net cash used in investing activities (333,875) (119,319)
Cash flows from financing activities:
Proceeds from borrowings on line-of-credit 543,000 100,000
Repayments of borrowings on line-of-credit (411,000) (84,000)
Repayments of borrowings on term loan (1,313) (1,313)
Payments on finance lease obligations (4,791) (6,144)
Class A Common Stock dividends and dividend equivalents upon restricted stock vesting (148) (168)
Other distributions and advance payments to non-controlling interest unitholders 924 1,372
Share repurchases (70,094) —
Tax withholding on restricted stock unit vesting (9,701) (3,585)
Payments of equity issuance costs (557) (1,013)
Payments of debt issuance costs (678) —
Net cash provided by financing activities 45,642 5,149
Net increase (decrease) in cash and cash equivalents before translation effect 4,377 (34,028)
Translation effect on cash (330) (245)
Cash and cash equivalents—beginning of period 19,998 68,978
Cash and cash equivalents—end of period $ 24,045 $ 34,705


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net income	$	315,417	$	99,859
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion, and amortization	194,096		151,967
(Gain) loss on disposal of assets	(3,173)		1,236
Inventory write-down	2,202		—
Non-cash lease expense	1,587		2,088
Stock-based compensation expense	15,143		11,014
Deferred income tax expense	—		320
Loss on remeasurement of liability under tax receivable agreements	—		4,333
Other non-cash expense	(401)		826
Changes in operating assets and liabilities:
Accounts receivable and unbilled revenue	(105,849)		(156,049)
Accounts receivable and unbilled revenue—related party	(17,073)		(1,118)
Inventories	11,406		(29,209)
Other assets	(27,291)		(1,560)
Deferred revenue	10,275		(2,898)
Accounts payable and accrued liabilities	49,178		58,539
Accounts payable and accrued liabilities—related party	—		(1,955)
Initial payment of operating lease liability	(1,129)		(1,764)
Net cash provided by operating activities	444,388		135,629
Cash flows from investing activities:
Purchases of property and equipment and construction in-progress	(292,281)		(224,737)
Investment in sand logistics	—		(5,717)
Investment in Fervo Energy Company	—		(10,000)
Acquisition of Siren Energy, net of cash received	(74,896)		—
Proceeds from sale of assets	10,881		7,630
Net cash used in investing activities	(356,296)		(232,824)
Cash flows from financing activities:
Proceeds from borrowings on line-of-credit	525,000		400,000
Repayments of borrowings on line-of-credit	(352,000)		(268,000)
Repayments of borrowings on term loan	(104,716)		(875)
Payments on finance lease obligations	(5,070)		(2,696)
Class A Common Stock dividends and dividend equivalents upon restricted stock vesting	(17,570)		(148)

Other distributions and advance payments to non-controlling interest unitholders	—		924
Share repurchases	(134,742)		—
Tax withholding on restricted stock units	(9,320)		(9,700)
Payments of equity issuance costs	(223)		(523)
Payments of debt issuance costs	(1,566)		(224)
Net cash (used in) provided by financing activities	(100,207)		118,758
Net (decrease) increase in cash and cash equivalents before translation effect	(12,115)		21,563
Translation effect on cash	106		(85)
Cash and cash equivalents—beginning of period	43,676		19,998
Cash and cash equivalents—end of period	$	31,667	$	41,476

Table of Contents

LIBERTY ENERGY INC.

Condensed Consolidated Statements of Cash Flows ~~cont.~~(cont.)

(Dollars in thousands)

(Unaudited)


		Nine Months Ended September 30,					Six Months Ended June 30,
		2022		2021			2023		2022
Supplemental disclosure of cash flow information:	Supplemental disclosure of cash flow information:					Supplemental disclosure of cash flow information:
Cash paid for income taxes		$	6,502	$	—
Net cash paid for income taxes						Net cash paid for income taxes	$	49,044	$	6,073
Cash paid for interest	Cash paid for interest	$	13,622	$	9,686	Cash paid for interest	$	11,954	$	8,352
Non-cash investing and financing activities:	Non-cash investing and financing activities:					Non-cash investing and financing activities:
Capital expenditures included in accounts payable and accrued liabilities	Capital expenditures included in accounts payable and accrued liabilities	$	83,298	$	25,484	Capital expenditures included in accounts payable and accrued liabilities	$	127,731	$	79,319
Capital expenditures reclassified from prepaid and other current assets	Capital expenditures reclassified from prepaid and other current assets	$	12,445	$	—	Capital expenditures reclassified from prepaid and other current assets	$	20,675	$	1,190

See Notes to Condensed Consolidated Financial Statements.

Table of Contents

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1—Organization and Basis of Presentation

Organization

Liberty Energy Inc., formerly known as Liberty Oilfield Services Inc. (the “Company”), was incorporated as a Delaware corporation on December 21, 2016, to become a holding corporation for Liberty Oilfield Services New HoldCo LLC (“Liberty LLC”) and its subsidiaries upon completion of a corporate reorganization (the “Corporate Reorganization”) and planned initial public offering of the Company (“IPO”). On April 19, 2022, the stockholders of the Company approved an amendment to the Company’s Amended and Restated Certificate of Incorporation for the purpose of changing the Company’s name from “Liberty Oilfield Services Inc.” to “Liberty Energy Inc.” and thereafter, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation to reflect the new name, effective April 25, 2022. Effective January 31, 2023, Liberty LLC was merged into the Company, with the Company surviving the merger (the “Merger”). In connection with the Merger, all outstanding shares of the Company’s Class B Common Stock, par value $0.01 per share (the “Class B Common Stock”) were redeemed and exchanged for an equal number of shares of the Company’s Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”). The Company ~~has no material assets other than its ownership of units~~did not make any distributions or receive any proceeds in ~~Liberty LLC (“Liberty LLC Units”).~~connection with this exchange. Please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, filed with the SEC on February ~~22, 2022~~10, 2023 (the “Annual Report”), for additional information on the Merger completed on January 31, 2023, and the Corporate Reorganization and IPO that were completed on January 17, 2018.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by GAAP for annual financial statements and should be read together with the annual financial statements and notes thereto included in the Annual Report.

The accompanying unaudited condensed consolidated financial statements and related notes present the condensed consolidated financial position of the Company as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021, and~~2022, the results of operations ~~cash flows,~~ and ~~changes in~~ equity of the Company as of and for the three and ~~nine~~six months ended ~~September~~June 30, 2023 and 2022, and ~~2021.~~cash flows for the six months ended June 30, 2023 and 2022. The interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim period. The results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 are not necessarily indicative of the results of operations expected for the entire fiscal year ended December 31, ~~2022.~~2023. Further, these estimates and other factors, including those outside the Company’s control, such as the impact of sustained lower commodity prices, could have a significant adverse impact to the Company’s financial condition, results of operations and cash flows.

All intercompany amounts have been eliminated in the presentation of the unaudited condensed consolidated financial statements of the Company. The Company’s operations are organized into a single reportable segment, which consists of hydraulic fracturing and related goods and services.

Note 2—Significant Accounting Policies

~~Reclassifications~~Transaction, Severance, and Other Costs

~~Certain amounts~~The Company incurred transaction related costs in connection with the ~~prior period financial statements have been reclassified from interest income to interest expense, net~~Siren Acquisition (as defined below). Such costs include investment banking, legal, accounting, and other professional services provided in connection with closing the accompanying unaudited condensed consolidated statements of operation to conform to the presentation of the current period financial statements. Additionally, amounts in the prior period financial statements have been reclassified from provision for credit losses to other non-cash (income) expense, net in the accompanying unaudited condensed consolidated statement of cash flows to conform to the presentation of the current period financial statements. These reclassifications had no effect on the previously reported net income or loss.transaction and are expensed as incurred.

Table of Contents

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

~~Note 3—~~Recently Adopted Accounting Standards

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires that the acquiring entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. The ~~PropX~~Company adopted this guidance effective December 15, 2022 and the adoptions did not have a material impact on the accompanying unaudited condensed consolidated financial statements.

Siren Acquisition

On ~~October 26, 2021,~~April 6, 2023, the Company ~~entered into~~completed the ~~certain Unit Purchase Agreement~~acquisition of a Permian focused integrated natural gas compression and compressed natural gas delivery business, Siren Energy (“Siren”), for cash consideration of approximately $76.4 million, subject to normal closing adjustments (the “Transaction Agreement”) with Proppant Express Investments, LLC to acquire the assets and liabilities of Proppant Express Solutions, LLC (“PropX”), which provides last-mile proppant delivery solutions, including proppant handling equipment and logistics software across North America (the “PropX“Siren Acquisition”). ~~PropX~~The Siren Acquisition was acquired in exchange for $11.9 million in cash and 3,405,526 shares of the Company’s Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”) and 2,441,010 shares of the Company’s Class B Common Stock, par value $0.01 per share (the “Class B Common Stock”, and together with the Class A Common Stock, the “Common Stock”), for total consideration of $103.0 million based on the October 26, 2021 closing price of Class A Common Stock of $15.58. In connection with the issuance of 2,441,010 shares of Class B Common Stock, Liberty LLC also issued 2,441,010 Liberty LLC Units to the Company. The Liberty LLC Units are redeemable for an equivalent number of shares of Class A Common Stock at any time, at the election of the shareholder.

~~The Company~~ accounted for ~~the PropX Acquisition using~~under the acquisition method of ~~accounting. The aggregate purchase price noted above was allocated to~~accounting for business combinations. Accordingly, the ~~major categories~~Company conducted assessments of the net assets acquired and recognized amounts for identifiable assets acquired and liabilities assumed ~~based upon~~at their estimated acquisition date fair ~~value at~~values, while transaction and integration costs associated with the ~~date~~acquisition were expensed as incurred. In connection with the Siren Acquisition the Company preliminarily recorded goodwill of $43.1 million, property and equipment of $34.7 million, net working capital of $2.9 million, and net other liabilities of $4.3 million. Goodwill is recorded in other assets in the accompanying unaudited condensed consolidated balance sheets. Due to the immateriality of the ~~acquisition. The estimated fair values of certain assets~~Siren Acquisition, the related revenue and ~~liabilities require significant judgments~~earnings, supplemental pro forma financial information, and ~~estimates. The majority of the measurements of assets acquired and liabilities assumed, are based on inputs that~~detailed purchase price allocation are not ~~observable in the market and thus represent Level 3 inputs.~~disclosed.

In accordance with ASC Topic 805, an acquirer is allowed a period, referred to as the measurement period, in which to complete its accounting for the transaction. Such measurement period ends at the earliest date that the acquirer a) receives the information necessary or b) determines that it cannot obtain further information, and such period may not exceed one year. As the ~~PropX~~Siren Acquisition closed on ~~October 26, 2021~~April 6, 2023, the Company ~~completed~~is in the process of completing the initial purchase price allocation, particularly as it relates to current assets and current ~~liabilities, during the nine months ended September 30, 2022.~~liabilities.

~~The following table summarizes the fair value of the consideration transferred~~Reclassifications

Certain amounts in the ~~PropX Acquisition and the allocation of the purchase price~~prior period financial statements have been reclassified including $2.3 million from accrued liabilities to ~~the fair value of the assets acquired and liabilities assumed as of October 26, 2021, the date of the closing of the PropX Acquisition:~~


~~($ in thousands)~~
~~Total Purchase Consideration:~~
~~Consideration~~	$	~~103,023~~

~~Cash and cash equivalents~~	$	53
~~Accounts receivable and unbilled revenue~~	~~4,089~~
~~Inventory~~	8
~~Prepaid and other current assets~~	~~1,722~~
~~Property and equipment~~ ~~(1)~~	~~94,137~~
~~Intangible assets (included in other assets in the accompanying consolidated balance sheet as of December 31, 2021)~~ ~~(2)~~	~~7,100~~
~~Total identifiable assets acquired~~	~~107,109~~
~~Accounts~~income tax payable	~~2,152~~
~~Accrued liabilities~~	~~1,934~~
~~Total liabilities assumed~~	~~4,086~~
~~Total purchase consideration~~	$	~~103,023~~

~~(1)~~ ~~Useful lives average of 10 years, see Note 5—Property and Equipment~~

~~(2)~~ ~~Definite lived intangibles with an amortization period ranging from~~ ~~seven~~ ~~to 10 years~~

Transaction costs, costs associated with issuing additional equity and integration costs were recognized separately from the acquisition of assets and assumptions of liabilities in the PropX Acquisition. Transaction costs consist of legal and professional fees. Integration costs consist of expenses incurred to integrate PropX’s operations, aligning accounting processes and procedures, and integrating its enterprise resource planning system with those of the Company. Merger and integration costs are expensed as incurred, and equity offering costs were recorded as a reduction to additional paid in capital.

~~Table of Contents~~

~~LIBERTY ENERGY INC.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

The Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2021 do not include any results from PropX operations as the PropX Acquisition closed on October 26, 2021. The Company does not present pro forma financial information for the periods prior to the PropX Acquisition as such information, after elimination of PropX’s historical transactions with the Company, is not materially different than the results presented in the accompanying unaudited condensed consolidated ~~statements~~balance sheets to conform to the presentation of ~~operations for three and nine months ended September 30, 2021.~~the current period financial statements. This reclassification had no effect on the previously reported net income or loss.

Note 4—3—Inventories

Inventories consist of the following:


		September 30,		December 31,			June 30,		December 31,
($ in thousands)	($ in thousands)	2022		2021		($ in thousands)	2023		2022
Proppants	Proppants	$	31,156	$	23,413	Proppants	$	17,866	$	31,350
Chemicals	Chemicals	20,139		17,996		Chemicals	25,123		32,392
Maintenance parts	Maintenance parts	134,352		93,184		Maintenance parts	158,080		150,712
		$	185,647	$	134,593		$	201,069	$	214,454

During the three and ~~nine~~six months ended ~~September~~June 30, 2023, the lower of cost or net realizable value analysis resulted in the Company recording a write-down to the inventory carrying value of $2.2 million. During the year ended December 31, 2022, the lower of cost or net realizable value analysis resulted in the Company recording a write-down to the inventory carrying value of $1.7 ~~million. The Company did not record any write-down to the inventory carrying value~~million recorded during the ~~year~~quarter ended ~~December 31, 2021.~~September 30, 2022.

Table of Contents

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 5—4—Property and Equipment

Property and equipment consist of the following:


		Estimated useful lives (in years)	September 30,		December 31,			Estimated useful lives (in years)	June 30,		December 31,
($ in thousands)	($ in thousands)		2022		2021		($ in thousands)		2023		2022
Land	Land	N/A	$	29,384	$	33,812	Land	N/A	$	29,427	$	29,276
Field services equipment	Field services equipment	2-7	1,817,333		1,579,420		Field services equipment	2-10	2,240,804		1,925,848
Vehicles	Vehicles	4-7	61,674		61,282		Vehicles	4-7	64,963		62,683
Lease Equipment	Lease Equipment	10	90,897		64,770		Lease Equipment	10	123,629		106,087
Buildings and facilities	Buildings and facilities	5-30	133,607		148,555		Buildings and facilities	5-30	138,377		135,281
Mineral reserves	Mineral reserves	>25	76,823		76,823		Mineral reserves	>25	76,823		76,823
Office equipment and furniture	Office equipment and furniture	2-7	8,826		8,218		Office equipment and furniture	2-7	9,965		9,504
			2,218,544		1,972,880				2,683,988		2,345,502
Less accumulated depreciation and depletion	Less accumulated depreciation and depletion		(1,073,092)		(863,194)		Less accumulated depreciation and depletion		(1,319,119)		(1,141,656)
			1,145,452		1,109,686				1,364,869		1,203,846
Construction in-progress	Construction in-progress	N/A	149,737		89,601		Construction in-progress	N/A	181,318		158,518
			$	1,295,189	$	1,199,287
Property and equipment, net							Property and equipment, net		$	1,546,187	$	1,362,364

Depreciation expense for the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022 was $~~77.5~~92.9 million and ~~$61.1~~$72.4 million, respectively. During the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, the Company recognized depreciation expense of ~~$219.9~~$181.4 million and ~~$175.9~~$142.3 million, respectively. Depletion expense for the three months ended ~~September~~June 30, 2023 and 2022 ~~and 2021was~~was $0.3 million and $0.3 million, respectively. Depletion expense for the ~~nine~~six months ended ~~September~~June 30, 2023 and 2022 ~~and 2021~~ was ~~$0.9~~$0.6 million and ~~$1.0~~$0.6 million, respectively.

As of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company concluded that no triggering events that could indicate possible impairment of property and equipment had occurred, other than related to the assets held for sale discussed below.

As of ~~September~~June 30, 2023, the Company classified $0.7 million of land and $0.8 million of buildings, net of accumulated depreciation, of one property that it intends to sell within the next year, and that meets the held for sale criteria, to assets held for sale, included in prepaid and other current assets in the accompanying unaudited condensed consolidated balance sheet. The Company estimates that the carrying value of the assets is equal to the fair value less the estimated costs to sell, net of write-downs taken in the prior period, and therefore no gain or loss was recorded during the six months ended June 30, 2023.

Additionally, as of December 31, 2022, the Company classified ~~$2.5~~$1.1 million of land and ~~$11.4~~$6.2 million of buildings, net of accumulated depreciation, of two properties that it intends to sell within the next year, and that meets the held for sale criteria, to assets held for sale, included in prepaid and other current assets in the accompanying unaudited condensed consolidated balance sheet. One of the properties classified as held for sale as of December 31, 2022 was sold during the three months ended June 30, 2023, resulting in a nominal loss included as a component of (gain) loss on disposal of assets in the accompanying unaudited condensed consolidated statements of income.

As of June 30, 2022, the Company classified $2.0 million of land and $6.0 million of buildings, net of accumulated depreciation, of one property as assets held for sale. The Company ~~estimates~~estimated that ~~the~~ carrying value of the assets ~~were~~was greater than the fair value less the estimated costs to sell, and therefore recorded a ~~$2.7~~$2.3 million loss during the ~~nine~~six months ended ~~September~~June 30, 2022, included as a component of ~~gain~~(gain) loss on disposal of assets in the accompanying unaudited condensed consolidated statements of ~~operations.~~income.

~~Table of Contents~~

~~LIBERTY ENERGY INC.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

Note 6—5—Leases

The Company has operating and finance leases primarily for vehicles, equipment, railcars, office space, and facilities. The terms and conditions for these leases vary by the type of underlying asset.

Certain leases include variable lease payments for items such as property taxes, insurance, maintenance, and other operating expenses associated with leased assets. Payments that vary based on an index or rate are included in the measurement of lease assets and liabilities at the rate as of the commencement date. All other variable lease payments are excluded from the measurement of lease assets and liabilities, and are recognized in the period in which the obligation for those payments is incurred.

~~The components of lease expense for the three and nine months ended September 30, 2022 and 2021 were as follows:~~
Three Months Ended September 30, Nine Months Ended September 30,
($ in thousands) 2022 2021 2022 2021
Finance lease cost:
Amortization of right-of-use assets $ 1,590 $ 1,213 $ 3,796 $ 4,565
Interest on lease liabilities 453 347 1,066 1,318
Operating lease cost 10,675 12,869 32,809 29,702
Variable lease cost 1,337 1,273 3,473 3,116
Short-term lease costs 2,121 1,479 5,113 3,483
Total lease cost $ 16,176 $ 17,181 $ 46,257 $ 42,184

~~Supplemental cash flow and other information related to leases for the~~ ~~three and nine~~ ~~months ended September 30, 2022~~ ~~and 2021~~ ~~were as follows:~~
Three Months Ended September 30, Nine Months Ended September 30,
($ in thousands) 2022 2021 2022 2021
Cash paid for amounts included in measurement of liabilities:
Operating leases $ 10,170 $ 12,136 $ 32,065 $ 27,420
Finance leases 2,548 2,064 5,857 7,099
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases 3,323 10,999 22,693 70,205
Finance leases 8,409 — 14,742 —

Table of Contents

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

The components of lease expense for the three and six months ended June 30, 2023 and 2022 were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands)	2023		2022		2023		2022
Finance lease cost:
Amortization of right-of-use assets	$	2,328	$	1,229	$	4,564	$	2,206
Interest on lease liabilities	695		352		1,389		613
Operating lease cost	10,064		12,635		20,638		22,134
Variable lease cost	1,271		1,045		2,517		2,136
Short-term lease cost	2,354		1,446		4,405		2,992
Total lease cost	$	16,712	$	16,707	$	33,513	$	30,081

Supplemental cash flow and other information related to leases for the three and six months ended June 30, 2023 and 2022 were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
($ in thousands)	2023		2022		2023		2022
Cash paid for amounts included in measurement of liabilities:
Operating leases	$	10,383	$	12,863	$	20,260	$	21,895
Finance leases	3,523		1,830		6,461		3,309
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	12,358		9,909		16,920		19,370
Finance leases	14,384		6,333		17,173		6,333

During the ~~nine~~six months ended ~~September~~June 30, 2022, the Company amended certain operating leases, the change in terms of which caused the leases to be reclassified as finance leases. In connection with the amendments, the Company wrote-off operating lease right-of-use assets of $0.2 million and liabilities of $0.1 million. Additionally, in connection with the amendments, the Company recognized finance lease right-of-use assets of ~~$2.7~~$1.8 million and liabilities of $2.7 million. During the nine months ended September 30, 2021, the Company amended certain finance leases, the change in terms of which caused the leases to be reclassified to operating leases. In connection with the amendments the Company wrote-off finance lease right-of-use assets of $13.7 million and liabilities of $10.6 million. Additionally, the Company recognized operating lease right-of-use assets of $11.8 million and liabilities of $8.8$1.8 million. There was no gain or loss recognized as a result of these amendments. During the six months ended June 30, 2023, the Company did not reclassify any operating or finance leases.

Lease terms and discount rates as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021~~2022 were as follows:

September 30, 2022

December 31, 2021

June 30, 2023

December 31, 2022

Weighted-average remaining lease term:

Operating leases

4.9 years

5.2 years

Operating leases

4.6 years

4.8 years

Finance leases

3.0 years

1.5 years

Finance leases

3.2 years

3.1 years

Weighted-average discount rate:

Operating leases

4.5

4.2

Operating leases

5.3

4.6

Finance leases

8.0

8.6

Finance leases

8.1

8.2

Table of Contents

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Future minimum lease commitments as of ~~September~~June 30, ~~2022~~2023 are as follows:


($ in thousands)	($ in thousands)	Finance		Operating		($ in thousands)	Finance		Operating
Remainder of 2022		$	2,204	$	9,330
2023		9,610		30,228
Remainder of 2023						Remainder of 2023	$	7,351	$	16,860
2024	2024	4,799		23,758		2024	10,783		28,574
2025	2025	4,910		21,430		2025	10,893		26,295
2026	2026	6,709		10,384		2026	16,145		15,331
2027						2027	7,648		6,310
Thereafter	Thereafter	—		19,074		Thereafter	—		15,055
Total lease payments	Total lease payments	28,232		114,204		Total lease payments	52,820		108,425
Less imputed interest	Less imputed interest	(3,676)		(12,049)		Less imputed interest	(8,129)		(12,153)
Total Liability		$	24,556	$	102,155
Total						Total	$	44,691	$	96,272

The Company’s vehicle leases typically include a residual value guarantee. For the Company’s vehicle leases classified as operating leases, the total residual value guaranteed as of ~~September~~June 30, ~~2022~~2023 is ~~$12.9~~$14.0 million; the payment is not probable and therefore has not been included in the measurement of the lease liability and right-of-use asset. For vehicle leases that are classified as finance leases, the Company includes the residual value guarantee, estimated in the lease agreement, in the financing lease liability.

Lessor Arrangements

The Company leases dry and wet sand containers and conveyor belts ~~to customers through PropX. PropX leases~~ to customers through operating leases, where the lessor for tax purposes is considered to be the owner of the equipment during the term of the lease. The lease agreements do not include options for the lessee to purchase the underlying asset at the end of the lease term for either a stated fixed price or fair market value. However, some of the leases contain a termination clause in which the customer can cancel the contract. The leases can be subject to variable lease payments if the customer requests more units than what is agreed upon in the lease. The Company does not record any lease assets or liabilities related to these variable items.

The carrying amount of equipment leased to others, included in property, plant and equipment, under operating leases as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021~~2022 were as follows:


($ in thousands)	June 30, 2023		December 31, 2022
Lease Equipment	$	123,629	$	106,087
Less: Accumulated depreciation	(18,199)		(11,408)
Lease Equipment - net	$	105,430	$	94,679

Future payments receivable for operating leases commenced as of June 30, 2023 are as follows:


($ in thousands)
Remainder of 2023	$	8,337
2024	10,036
2025	3,346
2026	619
2027	—
Thereafter	—
Total	$	22,338

Revenues from operating leases for the three and six months ended June 30, 2023 were $9.6 million and $18.2 million, respectively. Revenues from operating leases for the three and six months ended June 30, 2022 were $5.9 million and $11.8 million, respectively.

Table of Contents

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 6—Accrued Liabilities

Accrued liabilities consist of the following:


($ in thousands)	June 30, 2023		December 31, 2022
Accrued vendor invoices	$	110,039	$	119,801
Operations accruals	60,716		72,348
Accrued benefits and other	94,585		84,670
	$	265,340	$	276,819

Note 7—Debt

Debt consists of the following:


	June 30,		December 31,
($ in thousands)	2023		2022
Term Loan outstanding	$	—	$	104,716
Revolving Line of Credit	288,000		115,000
Deferred financing costs and original issue discount	—		(1,270)
Total debt, net of deferred financing costs and original issue discount	$	288,000	$	218,446
Current portion of long-term debt, net of discount	$	—	$	1,020
Long-term debt, net of discount and current portion	288,000		217,426
Total debt, net of deferred financing costs and original issue discount	$	288,000	$	218,446

On September 19, 2017, the Company entered into two credit agreements: (i) a revolving line of credit up to $250.0 million, subsequently increased to $525.0 million, see below, (the “ABL Facility”) and (ii) a $175.0 million term loan (the “Term Loan Facility”, and together with the ABL Facility the “Credit Facilities”).

Effective January 23, 2023, the Company entered into an Eighth Amendment to the ABL Facility (the “Eighth ABL Amendment”). The Eighth ABL Amendment amends certain terms, provisions and covenants of the ABL Facility, including, among other things: (i) increasing the maximum revolver amount from $425.0 million to $525.0 million (the “Upsized Revolver”); (ii) increasing the amount of the accordion feature from $75.0 million to $100.0 million; (iii) extending the maturity date from October 22, 2026 to January 23, 2028; (iv) modifying the dollar amounts of various credit facility triggers and tests proportionally to the Upsized Revolver; (v) permitting repayment under the Term Loan Facility prior to February 10, 2023; and (vi) increasing certain indebtedness, intercompany advance, and investment baskets. The Eighth ABL Amendment also includes an agreement from Wells Fargo Bank, National Association, as administrative agent, to release its second priority liens and security interests on all collateral that served as first priority collateral under the Term Loan Facility. This release was completed during the three months ended June 30, 2023.

Additionally, on January 23, 2023, the Company borrowed $106.7 million on the ABL Facility and used the proceeds to pay off the Term Loan Facility. The amount paid includes the balance of the Term Loan Facility upon pay off of $104.7 million, $0.9 million of accrued interest, and a $1.1 million prepayment premium or 1% of the principal. Additionally, there were $0.2 million in bank and legal fees incurred in connection with the pay off.

The weighted average interest rate on all borrowings outstanding as of June 30, 2023 and December 31, 2022 was 7.3% and 9.0%, respectively.

Term Loan Facility

The Term Loan Facility provided for a $175.0 million term loan, of which $0 million remained outstanding as of June 30, 2023. In connection with the Eighth ABL Amendment and payoff of the Term Loan Facility, on January 23, 2023, the Company terminated the Term Loan Facility, see above for further discussion.

ABL Facility

Under the terms of the ABL Facility, up to $525.0 million may be borrowed, subject to certain borrowing base limitations based on a percentage of eligible accounts receivable and inventory. As of June 30, 2023, the borrowing base was calculated to be $485.7 million, and the Company had $288.0 million outstanding in addition to letters of credit in the amount of $3.5 million, with $194.2 million of remaining availability. Borrowings under the ABL Facility bear interest at SOFR or a base rate,

Table of Contents

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

($ in thousands) September 30, 2022 December 31, 2021
Equipment leased to others - at original cost $ 90,897 $ 64,770
Less: Accumulated depreciation (8,288) (1,377)
Equipment leased to others - net $ 82,609 $ 63,393

~~Future payments receivable for operating leases commenced and committed but not delivered as of~~ ~~September 30, 2022~~ ~~are as follows:~~

($ in thousands)
Remainder of 2022 $ 4,126
2023 16,704
2024 9,218
2025 1,051
2026 —
Thereafter —
Total $ 31,099

~~Revenues from operating leases for the three and nine months ended~~ ~~September 30, 2022~~ ~~were $6.7 million and $18.4 million, respectively. There was no revenue from operating leases for the three and nine months ended September 30, 2021.~~

~~Note 7—Accrued Liabilities~~

~~Accrued liabilities consist of the following:~~
($ in thousands) September 30, 2022 December 31, 2021
Accrued vendor invoices $ 116,859 $ 109,903
Operations accruals 93,979 64,707
Accrued benefits and other 75,666 60,505
$ 286,504 $ 235,115

~~Note 8—Debt~~

~~Debt consists of the following:~~
September 30, December 31,
($ in thousands) 2022 2021
Term Loan outstanding $ 105,153 $ 106,465
Revolving Line of Credit 150,000 18,000
Deferred financing costs and original issue discount (1,455) (2,013)
Total debt, net of deferred financing costs and original issue discount $ 253,698 $ 122,452
Current portion of long-term debt, net of discount $ 1,016 $ 1,007
Long-term debt, net of discount and current portion 252,682 121,445
Total debt, net of deferred financing costs and original issue discount $ 253,698 $ 122,452

On September 19, 2017, the Company entered into two credit agreements, a revolving line of credit up to $250.0 million, subsequently increased to $425.0 million, see below, (the “ABL Facility”) and a $175.0 million term loan (the “Term Loan Facility”, and together with the ABL Facility the “Credit Facilities”).

On July 18, 2022, the Company entered into an amendment to the ABL Facility (the “Seventh ABL Amendment”). The Seventh ABL Amendment amended certain terms, provisions and covenants of the ABL Facility, including among other things: (i) increasing the maximum borrowing amount by $75.0 million to $425.0 million, subject to certain borrowing base limitations

~~Table of Contents~~

~~LIBERTY ENERGY INC.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

based on percentage of eligible accounts receivable and inventory, (ii) modifying certain covenant and reporting-related baskets, and (iii) replacing LIBOR with the secured overnight financing rate (“SOFR”) as the interest rate benchmark.

On August 12, 2022, the Company entered into an amendment to the Term Loan Facility (the “Sixth Term Loan Amendment”). The Sixth Term Loan Amendment amended certain terms, provisions and covenants of the Term Loan Facility, including among other things: (i) a waiver of the fixed charge coverage ratio requirements for up to $100.0 million of restricted payments made in connection with the Company’s 2022 stock repurchase program for its common stock; (ii) the addition of a minimum liquidity requirement of $150.0 million in order to make selected restricted payments, including those made under the 2022 stock repurchase program; (iii) the modification of certain covenant and reporting-related terms, including an increase in the allowance for permitted purchase money indebtedness from $50.0 million to $70.0 million; (iv) the addition of a prepayment premium of 1.0% through the first anniversary of the Sixth Term Loan Amendment effective date; and (v) the addition and modification of several provisions to replace LIBOR with SOFR as the interest rate benchmark.

~~The weighted average interest rate on all borrowings outstanding as of~~ ~~September 30, 2022~~ ~~and December 31, 2021 was 7.0% and 7.9%, respectively.~~

~~ABL Facility~~

Under the terms of the ABL Facility, up to $425.0 million may be borrowed, subject to certain borrowing base limitations based on a percentage of eligible accounts receivable and inventory. As of September 30, 2022, the borrowing base was calculated to be $425.0 million, and the Company had $150.0 million outstanding in addition to a letter of credit in the amount of $1.4 million, with $273.6 million of remaining availability. Borrowings under the ABL Facility bear interest at SOFR or a base rate, plus an applicable SOFR margin of 1.5% to 2%2.0% or base rate margin of 0.5% to 1%1.0%, as ~~defined~~described in the ABL Facility credit ~~agreement.~~agreement (the “ABL Facility credit agreement”). Additionally, borrowings as of ~~September~~June 30, ~~2022~~2023 incurred interest at a weighted average rate of ~~4.8%~~7.3%. The average monthly unused commitment is subject to an unused commitment fee of 0.25% to 0.375%. Interest and fees are payable in arrears at the end of each month, or, in the case of SOFR loans, at the end of each interest period. The ABL Facility matures on the earlier of (i) October 22, 2026 and (ii) to the extent the debt under the Term Loan Facility remains outstanding, 90 days prior to the final maturity of the Term Loan Facility, which matures on September 19, 2024.January 23, 2028. Borrowings under the ABL Facility are collateralized by accounts receivable and inventory, and further secured by the Company ~~Liberty LLC, and R/C IV Non-U.S. LOS Corp., a Delaware corporation and a subsidiary of the Company,~~ as parent ~~guarantors.~~

~~Term Loan Facility~~guarantor.

The ~~Term Loan~~ABL Facility provides for a $175.0 million term loan, of which $105.2 million remained outstanding as of September 30, 2022. Amounts outstanding bear interest at SOFR or a base rate, plus an applicable margin of 7.625% or 6.625%, respectively, and borrowings as of September 30, 2022 incurred interest at a rate of 10.18%. The Company is required to make quarterly principal payments of 1% per annum of the outstanding principal balance, commencing on December 31, 2017, with final payment due at maturity on September 19, 2024. The Term Loan Facility is collateralized by the fixed assets of LOS and its subsidiaries, and is further secured by the Company, Liberty LLC, and R/C IV Non-U.S. LOS Corp., a Delaware corporation and a subsidiary of the Company, as parent guarantors.

~~The Credit Facilities include~~includes certain non-financial covenants, including but not limited to restrictions on incurring additional debt and certain distributions. Moreover, the ability of the Company to incur additional debt and to make distributions is dependent on maintaining a maximum leverage ratio.

The ~~Term Loan~~ABL Facility requires mandatory prepayments upon certain dispositions of property or issuance of other indebtedness, as defined, and annually a percentage of excess cash flow (25% to 50%, depending on leverage ratio, of consolidated net income less capital expenditures and other permitted payments, commencing with the year ending December 31, 2018). Certain mandatory prepayments and optional prepayments are subject to a prepayment premium of 1% of the prepaid principal declining to 0% after the first anniversary of the Sixth Term Loan Amendment effective date.

~~The Credit Facilities are~~is not subject to financial covenants unless liquidity, as defined in the ~~respective~~ABL Facility credit ~~agreements,~~agreement, drops below a specific level. ~~Under the ABL Facility, the~~The Company is required to maintain a minimum fixed charge coverage ratio, as defined in the ABL Facility credit agreement, ~~governing the ABL Facility,~~ of 1.0 to 1.0 for each period if excess availability is less than 10% of the borrowing base or ~~$12.5~~$52.5 million, whichever is greater. Under the Term Loan Facility, the Company is required to maintain a minimum fixed charge coverage ratio, as defined, of 1.2 to 1.0 for each trailing twelve-month period if the Company’s liquidity, as defined, is less than $25.0 million for at least ~~five~~ ~~consecutive business days.~~

The Company was in compliance with these covenants as of ~~September~~June 30, ~~2022.~~

~~Table of Contents~~

~~LIBERTY ENERGY INC.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

2023.

Maturities of debt are as follows:
($ in thousands)
Remainder of 2022 $ 438
2023 $ 1,750
2024 $ 252,965
2025 $ —
2026 $ —
$ 255,153


($ in thousands)

Remainder of 2023	$	—
2024	—
2025	—
2026	—
2027	—
Thereafter	288,000
	$	288,000

Note 9—8—Fair Value Measurements and Financial Instruments

The fair values of the Company’s assets and liabilities represent the amounts that would be received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction on the reporting date. These fair value measurements maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability on the measurement date, the fair value measurement reflects the Company’s own judgments about the assumptions that market participants would use in pricing the asset or liability. The Company discloses the fair values of its assets and liabilities according to the quality of valuation inputs under the following hierarchy:

•Level 1 Inputs: Quoted prices (unadjusted) in an active market for identical assets or liabilities.

•Level 2 Inputs: Inputs other than quoted prices that are directly or indirectly observable.

•Level 3 Inputs: Unobservable inputs that are significant to the fair value of assets or liabilities.

The classification of an asset or liability is based on the lowest level of input significant to its fair value. Those that are initially classified as Level 3 are subsequently reported as Level 2 when the fair value derived from unobservable inputs is inconsequential to the overall fair value, or if corroborating market data becomes available. Assets and liabilities that are initially reported as Level 2 are subsequently reported as Level 3 if corroborating market data is no longer available. Transfers occur at the end of the reporting period. There were no transfers into or out of Levels 1, 2, and 3 during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021.~~2022.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, notes receivable, accounts payable, accrued liabilities, long-term debt, and finance and operating lease obligations. These financial instruments do not require disclosure by level. The carrying values of all of the Company’s financial instruments included in the accompanying unaudited condensed consolidated balance sheets approximated or equaled their fair values on ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021.~~2022.

•The carrying values of cash and cash equivalents, accounts receivable, and accounts payable (including accrued liabilities) approximated fair value on ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, due to their short-term nature.

Table of Contents

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

•The carrying value of amounts outstanding under long-term debt agreements with variable rates approximated fair value on ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, as the effective interest rates approximated market rates.

•The carrying values of amounts outstanding under finance and operating lease obligations approximated fair value on June 30, 2023 and December 31, 2022, as the effective borrowing rates approximated market rates.

Nonrecurring Measurements

Certain assets and liabilities are measured at fair value on a nonrecurring basis. These items are not measured at fair value on an ongoing basis but may be subject to fair value adjustments in certain circumstances. These assets and liabilities include those acquired through the ~~PropX~~Siren Acquisition, which are required to be measured at fair value on the acquisition date in accordance with ASC Topic 805. See Note ~~3—The PropX Acquisition.~~2—Significant Accounting Policies.

As of ~~September~~June 30, 2023, the Company recorded $0.7 million of land and $0.8 million of buildings of one property that met the held for sale criteria, to assets held for sale at a total fair value of $0.8 million, which are included in prepaid and other current assets in the accompanying unaudited condensed consolidated balance sheets. The Company estimated the fair value of the property based on a communicated selling price for one property, which is a Level 3 input. The Company estimates that the carrying value of the assets is equal to the fair value less the estimated costs to sell, net of write-downs taken in the prior period, and therefore no gain or loss was recorded during the six months ended June 30, 2023.

As of December 31, 2022, the Company recorded ~~$2.5~~$1.1 million of land and ~~$11.4~~$6.2 million of buildings of two properties that met the held for sale criteria, to assets held for sale at a total fair value of ~~$11.2~~$6.3 million, which are included in prepaid and other current assets in the accompanying unaudited condensed consolidated balance sheet. The Company estimated the fair value of the properties based on a purchase and sale agreement for one property and a communicated selling price, which are Level 3 inputs.

Recurring Measurements

The fair values of the Company’s cash equivalents measured on a recurring basis pursuant to ASC 820-10 Fair Value Measurements and Disclosures are carried at estimated fair value. Cash equivalents consist of money market accounts which the Company has classified as Level 1 given the active market for these accounts. As of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had cash equivalents, measured at fair value, of $0.3 million and $0.3 million, respectively.

~~Table of Contents~~

~~LIBERTY ENERGY INC.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

Nonfinancial assets

The Company estimates fair value to perform impairment tests as required on long-lived assets. The inputs used to determine such fair value are primarily based upon internally developed cash flow models and would generally be classified within Level 3 in the event that such assets were required to be measured and recorded at fair value within the unaudited condensed consolidated financial statements. No such measurements were required as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021~~2022 as no triggering event was identified.

Credit Risk

The Company’s financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents, and trade receivables.

The Company’s cash and cash equivalent balances on deposit with financial institutions total $~~24.0~~31.7 million and ~~$20.0~~$43.7 million as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively, which exceeded FDIC insured limits. The Company regularly monitors these institutions’ financial condition.

The majority of the Company’s customers have payment terms of 45 days or less.

As of ~~September~~June 30, ~~2022~~2023, no customers accounted for more than 10% of total consolidated accounts receivable and unbilled revenue. As of December 31, ~~2021,~~2022, customer A accounted for ~~10.5% and 11.8%, respectively,~~11% of total consolidated accounts receivable and unbilled revenue. During the three and ~~nine~~six months ended ~~September~~June 30, 2023, customer A accounted for 11% of consolidated revenues. During the three and six months ended June 30, 2022, ~~and 2021, no customers~~customer A accounted for 10% of consolidated revenues.

The Company mitigates the associated credit risk by performing credit evaluations and monitoring the payment patterns of its customers.

Table of Contents

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

As of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had $0.9 million in allowance for credit losses as follows:


($ in thousands)
~~Allowance~~Provision for credit losses aton December 31, ~~2021~~2022	$	884
Credit Losses:
Current period provision	—
Amounts written off	—
~~Allowance~~Provision for credit losses ~~at September~~on June 30, ~~2022~~2023	$	884

~~Table of Contents~~

~~LIBERTY ENERGY INC.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

Note ~~10—~~9—Equity

Restricted Stock Units

Restricted stock units (“RSUs”) granted pursuant to the ~~Long Term~~Long-Term Incentive Plan (“LTIP”), if they vest, will be settled in shares of the Company’s Class A Common Stock. RSUs were granted with initial vesting terms up to ~~five~~three years. Changes in non-vested RSUs outstanding under the LTIP during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 were as follows:


		Number of Units	Weighted Average Grant Date Fair Value per Unit			Number of Units	Weighted Average Grant Date Fair Value per Unit
Non-vested as of December 31, 2021		2,741,061	$	11.04
Non-vested as of December 31, 2022					Non-vested as of December 31, 2022	2,985,727	$	12.15
Granted	Granted	1,726,959	12.90		Granted	553,069	15.49
Vested	Vested	(1,350,246)	11.00		Vested	(1,416,456)	11.44
Forfeited	Forfeited	(103,539)	10.23		Forfeited	(49,802)	11.32
Outstanding at September 30, 2022		3,014,235	$	12.15
Outstanding at June 30, 2023					Outstanding at June 30, 2023	2,072,538	$	13.55

Performance Restricted Stock Units

Performance restricted stock units (“PSUs”) granted pursuant to the LTIP, if they vest, will be settled in shares of the Company’s Class A Common Stock. PSUs were granted with a ~~three year~~three-year cliff vesting schedule, subject to a performance target compared to an index of competitors’ results over the ~~three year~~three-year period as designated in the award. The Company records compensation expense based on the Company’s best estimate of the number of PSUs that will vest at the end of the performance period. If such performance targets are not met, or are not expected to be met, no compensation expense is recognized and any recognized compensation expense is reversed. Changes in non-vested PSUs outstanding under the LTIP during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 were as follows:


		Number of Units	Weighted Average Grant Date Fair Value per Unit			Number of Units	Weighted Average Grant Date Fair Value per Unit
Non-vested as of December 31, 2021		1,306,945	$	12.45
Non-vested as of December 31, 2022					Non-vested as of December 31, 2022	1,390,588	$	11.87
Granted	Granted	412,920	12.47		Granted	341,928	15.64
Vested	Vested	(329,277)	14.93		Vested	(392,948)	9.62
Forfeited	Forfeited	—	—		Forfeited	—	—
Outstanding at September 30, 2022		1,390,588	$	11.87
Outstanding at June 30, 2023					Outstanding at June 30, 2023	1,339,568	$	13.49

Stock-based compensation is included in cost of services and general and administrative expenses in the Company’s unaudited condensed consolidated statements of ~~operations.~~income. The Company recognized stock-based compensation expense of $~~6.1~~8.0 million and ~~$17.1~~$15.1 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, respectively. The Company recognized stock-based compensation of $4.2 million and ~~$15.1~~$11.0 million for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively. There was approximately $~~36.2~~32.5 million of unrecognized compensation expense relating to outstanding RSUs and PSUs as of ~~September~~June 30, ~~2022.~~2023. The unrecognized compensation expense will be recognized on a straight-line basis over the weighted average remaining vesting period of two years.

Table of Contents

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Dividends

~~On April 2, 2020, the~~The Company ~~suspended future quarterly~~paid cash dividends ~~until business conditions warrant reinstatement. As of September 30, 2022 dividends had not been reinstated by the Company. Subsequent to quarter end, the Company reinstated a quarterly dividend~~ of $0.05 per share of Class A Common Stock ~~refer~~on March 20, 2023 and June 20, 2023 to ~~Note 17—Subsequent Events~~stockholders of record as of March 6, 2023 and June 6, 2023, respectively. During the three and six months ended June 30, 2023 dividend payments totaled $8.6 million and $17.4 million, respectively.

Additionally, the Company paid the cash dividend upon vesting for ~~more information.~~

the RSUs and PSUs with a 2023 vesting date, which totaled $0.2 million for the six months ended June 30, 2023. As of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company had ~~$0.1~~$0.5 million and $0.2 million of ~~dividends~~dividend equivalents payable related to RSUs and PSUs to be paid upon vesting, respectively. Dividends related to forfeited RSUs will be forfeited.

Share Repurchase Program

On July 25, 2022, the Company’s ~~Board~~board of ~~Directors~~directors authorized and the Company announced a share repurchase program that allows the Company to repurchase up to $250.0 million of the Company’s Class A Common Stock beginning immediately and continuing through and including July 31, 2024. Additionally, on January 24, 2023 the Board authorized and the Company announced an increase to the share repurchase program that increased the Company’s cumulative repurchase authorization to $500.0 million. The shares may be repurchased from time to time in open market or

~~Table of Contents~~

~~LIBERTY ENERGY INC.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

privately negotiated transactions or by other means in accordance with applicable state and federal securities laws. The timing, as well as the number and value of shares repurchased under the program, will be determined by the Company at its discretion and will depend on a variety of factors, including management’s assessment of the intrinsic value of the Company’s Class A Common Stock, the market price of the Company’s Class A Common Stock, general market and economic conditions, available liquidity, compliance with the Company’s debt and other agreements, applicable legal requirements, and other considerations. The exact number of shares to be repurchased by the Company is not guaranteed, and the program may be suspended, modified, or discontinued at any time without prior notice. The Company expects to fund the repurchases by using cash on hand, borrowings under ~~its revolving credit facility~~the ABL Facility and expected free cash flow to be generated through the program’s authorized period of July 2024.

During the ~~nine~~three months ended ~~September~~June 30, ~~2022, Liberty LLC purchased and retired 4,702,166 LLC Units from the Company for $70.1 million, and~~2023, the Company repurchased and retired ~~4,702,166~~4,722,257 shares of Class A Common Stock for ~~$70.1~~$60.1 million or ~~$14.91~~$12.73 average price per share including commissions, under the share repurchase program.

During the six months ended June 30, 2023, the Company repurchased and retired 9,888,987 shares of Class A Common Stock for $134.7 million or $13.63 average price per share including commissions, under the share repurchase program.

As of ~~September~~June 30, ~~2022, $180.0~~2023, $239.9 million, including commissions paid, remained authorized for future repurchases of Class A Common Stock under the share repurchase program.

The Company accounts for the purchase price of repurchased common shares in excess of par value ($0.01 per share of Class A Common Stock) as a reduction of additional paid-in capital, and will continue to do so until additional paid-in capital is reduced to zero. Thereafter, any excess purchase price will be recorded as a reduction to retained earnings.

As enacted by the Inflation Reduction Act of 2022 (“IRA”), the Company has accrued stock repurchase excise tax of $1.2 million for the six months ended June 30, 2023.

Table of Contents

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note ~~11—~~10—Net Income ~~(Loss)~~ per Share

Basic net income ~~(loss)~~ per share measures the performance of an entity over the reporting period. Diluted net income ~~(loss)~~ per share measures the performance of an entity over the reporting period while giving effect to all potentially dilutive common shares that were outstanding during the period. The Company uses the “if-converted” method to determine the potential dilutive effect of its Class B Common Stock and the treasury stock method to determine the potential dilutive effect of outstanding ~~restricted stock~~RSUs and ~~RSUs.~~PSUs.

The following table reflects the allocation of net income ~~(loss)~~ to common stockholders and net ~~loss~~income per share computations for the periods indicated based on a weighted average number of ~~common stock~~shares of Class A Common Stock and Class B Common Stock outstanding:


		Three Months Ended				Nine Months Ended					Three Months Ended				Six Months Ended
(In thousands)	(In thousands)	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021		(In thousands)	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Basic Net Income (Loss) Per Share
Basic Net Income Per Share										Basic Net Income Per Share
Numerator:	Numerator:									Numerator:
Net income (loss) attributable to Liberty Energy Inc. stockholders		$	146,953	$	(38,890)	$	246,733	$	(123,655)
Net income attributable to Liberty Energy Inc. stockholders										Net income attributable to Liberty Energy Inc. stockholders	$	152,671	$	105,156	$	315,326	$	99,780
Denominator:	Denominator:									Denominator:
Basic weighted average common shares outstanding	Basic weighted average common shares outstanding	185,508		178,311		185,414		171,402		Basic weighted average common shares outstanding	173,131		186,719		174,840		185,367
Basic net income (loss) per share attributable to Liberty Energy Inc. stockholders		$	0.79	$	(0.22)	$	1.33	$	(0.72)
Diluted Net Income (Loss) Per Share
Basic net income per share attributable to Liberty Energy Inc. stockholders										Basic net income per share attributable to Liberty Energy Inc. stockholders	$	0.88	$	0.56	$	1.80	$	0.54
Diluted Net Income Per Share										Diluted Net Income Per Share
Numerator:	Numerator:									Numerator:
Net income (loss) attributable to Liberty Energy Inc. stockholders		$	146,953	$	(38,890)	$	246,733	$	(123,655)
Net income attributable to Liberty Energy Inc. stockholders										Net income attributable to Liberty Energy Inc. stockholders	$	152,671	$	105,156	$	315,326	$	99,780
Effect of exchange of the shares of Class B Common Stock for shares of Class A Common Stock	Effect of exchange of the shares of Class B Common Stock for shares of Class A Common Stock	258		—		389		—		Effect of exchange of the shares of Class B Common Stock for shares of Class A Common Stock	—		183		71		79
Diluted net income (loss) attributable to Liberty Energy Inc. stockholders		$	147,211	$	(38,890)	$	247,122	$	(123,655)
Diluted net income attributable to Liberty Energy Inc. stockholders										Diluted net income attributable to Liberty Energy Inc. stockholders	$	152,671	$	105,339	$	315,397	$	99,859
Denominator:	Denominator:									Denominator:
Basic weighted average shares outstanding	Basic weighted average shares outstanding	185,508		178,311		185,414		171,402		Basic weighted average shares outstanding	173,131		186,719		174,840		185,367
Effect of dilutive securities:	Effect of dilutive securities:									Effect of dilutive securities:
Restricted stock units	Restricted stock units	326		—		910		—		Restricted stock units	3,094		3,396		3,955		4,049
Class B Common Stock	Class B Common Stock	4,073		—		4,141		—		Class B Common Stock	—		326		42		1,207
Diluted weighted average shares outstanding	Diluted weighted average shares outstanding	189,907		178,311		190,465		171,402		Diluted weighted average shares outstanding	176,225		190,441		178,837		190,623
Diluted net income (loss) per share attributable to Liberty Energy Inc. stockholders		$	0.78	$	(0.22)	$	1.30	$	(0.72)
Diluted net income per share attributable to Liberty Energy Inc. stockholders										Diluted net income per share attributable to Liberty Energy Inc. stockholders	$	0.87	$	0.55	$	1.76	$	0.52

In accordance with GAAP, diluted weighted average common shares presented above do not include certain weighted average shares of Class B Common Stock, ~~and restricted stock units,~~ because to do so would have had an antidilutive effect, as follows:
Three Months Ended Nine Months Ended
(In thousands) September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Weighted average shares of Class B Common Stock — 1,860 — 8,558
Weighted average shares of restricted stock units — 3,256 — 3,470

Three Months Ended

Six Months Ended

(In thousands)

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Weighted average shares of Class B Common Stock

—

Note ~~12—~~11—Income Taxes

The Company is a corporation and is subject to taxation in the United States, Canada and various state, local and provincial jurisdictions. Historically, Liberty LLC iswas treated as a partnership, and its income iswas passed through to its owners for income tax purposes. Liberty LLC’s members, including the Company, ~~are~~were liable for federal, state and local income taxes based on their share of Liberty LLC’s pass-through taxable income.

Effective January 31, 2023, the Company adopted a plan of merger, pursuant to which Liberty LLC merged into the Company, ceasing the existence of Liberty LLC with the Company remaining as the surviving entity. Liberty LLC will file a final tax return during the 2023 calendar year. The Company is still party to the TRAs, as defined below, of which the Company’s liability under the TRAs’ is $119.5 million, presented as $4.7 million as a current liability included in accrued

Table of Contents

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

liabilities in the accompanying unaudited condensed consolidated balance sheets, and $114.8 million as a non-current liability as of June 30, 2023.

The Company may distribute cash from foreign subsidiaries to its U.S. parent as business needs arise. The Company has not provided for deferred income taxes on the undistributed earnings from certain foreign subsidiaries, as such earnings are considered to be indefinitely reinvested. If such earnings were to be distributed, any income and/or withholding tax would not be significant.

The effective global income tax rate applicable to the Company for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 was ~~1.5%~~24.4%, compared to ~~(7.8)%~~1.1%, for the period ended ~~September~~June 30, ~~2021.~~2022. The Company’s effective tax rate is ~~less~~greater than the statutory federal income tax rate of 21.0% due to the Company’s ~~full valuation allowance on its U.S. net deferred tax assets while calculating~~Canadian operations, state income ~~tax expense on Canada operations that are not subject to a valuation allowance. The Company’s effective tax rate is also less than~~taxes in the ~~statutory rate because of~~states the ~~non-controlling interest’s share of Liberty LLC’s pass-through results for federal, state and local income tax reporting, upon which no taxes are payable by the Company.~~Company operates, as well as nondeductible executive compensation. The Company recognized an income tax expense of ~~$2.6~~$47.3 million and ~~$3.6~~$101.8 million during the three and ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, respectively. The Company recognized an income tax expense of ~~$0.8~~$0.2 million and ~~$9.4~~$1.1 million during the three and ~~nine~~six months ended ~~September~~June 30, ~~2021, respectively, which included~~2022, respectively.

As of June 30, 2023 and December 31, 2022, the ~~impact of recording a valuation allowance on a portion of the Company’s net deferred tax assets.~~

Per the Coronavirus Aid, Relief and Economic Security (“CARES”) Act enacted on March 27, 2020, net operating losses (“NOL”) incurred in 2019 and 2020 may be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company has applied for and expects to receive a NOL carryback refund to recover $5.5 million of cash taxes paid by the Company in 2018. This amount has been reflected as a receivable in prepaids and other current assets line item in the accompanying unaudited condensed consolidated balance sheets. The remaining deferred tax asset for net operating losses available for carryforward are presented net of the Company’s valuation allowance.

~~The~~ Company recognized a deferred tax liability in the amount of ~~$0.6~~$1.1 million asand $1.0 million, respectively. As of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021. The~~2022, the Company ~~also~~ recognized a net deferred tax asset ~~related to foreign jurisdictions~~ in the amount of ~~$0.3~~$21.2 million and ~~$0.6~~$12.6 million, ~~as of September 30, 2022 and December 31, 2021,~~ respectively. Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial reporting and tax bases of assets and liabilities, and are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

~~The Company evaluated its deferred tax assets as of September 30, 2022 and considered both positive and negative evidence in applying the guidance of ASC 740~~ ~~Income Taxes~~ (“ASC 740”) related to the realizability of its deferred tax assets. Consistent with the prior quarter, in accordance with ASC 740, the objective negative evidence of remaining in a three year cumulative pre-tax book loss position, primarily due to COVID-19 related losses, outweighed the consideration of the Company’s subjective positive evidence of expected future profitability in evaluating the realizability of its deferred tax assets.

The CHIPS and Science Act of 2022 (“CHIPS”) and the Inflation Reduction Act (“IRA”) of 2022 were recently signed into law by President Biden on August 9, 2022 and August 16, 2022, respectively. The legislation introduces new options for monetizing certain credits, a corporate alternative minimum tax, and a stock repurchase excise tax. The Company is currently evaluating the impact of both CHIPS and IRA, but at present does not expect that any of the provisions included would result in a material impact to the Company’s deferred tax assets, liabilities, or income taxes payable.

Tax Receivable Agreements

In connection with the IPO, on January 17, 2018, the Company entered into two Tax Receivable Agreements (the “TRAs”) with R/C Energy IV Direct Partnership, L.P. and the then existing owners that continued to own units in Liberty LLC ~~Units~~(“Liberty LLC Units”) (each such person and any permitted transferee, a “TRA Holder” and together, the “TRA Holders”). The TRAs generally provide for the payment by the Company of 85% of the net cash savings, if any, in U.S. federal, state, and local income tax and franchise tax (computed using simplifying assumptions to address the impact of state and local taxes) that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the IPO as a result, as applicable to each TRA Holder, of (i) certain increases in tax basis that occur as a result of the Company’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s Liberty LLC Units in connection with the IPO or pursuant to the exercise of redemption or call rights, (ii) any net operating losses available to the Company as a result of the Corporate Reorganization, and (iii) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, any payments the Company makes under the TRAs. On January 31, 2023, the last redemption of the Liberty LLC Units occurred.

During the ~~nine~~six months ended ~~September~~June 30, 2023, exchanges of Liberty LLC Units and shares of Class B Common Stock resulted in a net increase of $0.7 million in deferred tax assets, and an increase of $0.6 million in amounts payable under the TRAs, all of which are recorded through equity. The Company did not make any TRA payments for the six months ended June 30, 2023. On January 31, 2023 the Company also recorded an increase of $7.8 million of deferred tax assets for the impact of the adopted plan of merger of Liberty LLC into the Company, all of which was recorded through equity.

During the six months ended June 30, 2022, exchanges of Liberty LLC Units and shares of Class B Common Stock initially resulted in a net increase of $6.5 million in deferred tax assets, and an increase of $5.5 million in amounts payable under the TRAs, all of which are ~~subject to the valuation allowance and remeasurement of TRA liability discussed below, and which are~~ recorded through equity. ~~There were no redemptions of Liberty LLC units for the three months ended~~

~~Table of Contents~~

~~LIBERTY ENERGY INC.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

~~September 30, 2022. In addition, the~~The Company did not make any TRA payments for the ~~nine~~six months ended ~~September~~June 30, 2022.

~~At September~~As of June 30, ~~2022 and December 31, 2021,~~2023, the Company’s liability under the TRAs was ~~$70.8~~$119.5 million of which $4.7 million is presented as a current liability included in accrued liabilities in the accompanying unaudited condensed consolidated balance sheet, and ~~$37.6~~$114.8 million ~~respectively,~~is presented as a component of long-term liabilities. As of December 31, 2022, the Company’s liability under the TRAs was $118.9 million, all of which is presented as a component of long-term ~~liabilities,~~liabilities. On June 30, 2023 and December 31, 2022 the related deferred tax ~~asset~~assets totaled ~~$97.8~~$99.9 million and ~~$91.3~~$99.9 million, respectively, of which a valuation allowance on the net deferred tax asset has been recorded. The Company also remeasured the liability under the TRAs as of September 30, 2022 and recorded a loss on remeasurement of liabilities subject to the TRAs for the nine months ended September 30, 2022 of $33.2 million recorded as part of continuing operations. The increase in the liability under the TRA is primarily driven by increased pre-tax book earnings, current additions of property and equipment and amortization of expected tax benefits that are subject to the valuation allowance, which are expected to be realized in the foreseeable future.respectively.

Note ~~13—~~12—Defined Contribution Plan

The Company sponsors a 401(k) defined contribution retirement plan covering eligible employees. The Company ~~has historically made~~makes matching contributions at a rate of $1.00 for each $1.00 of employee contribution, subject to a cap of 6% of the employee’s salary and federal limits. Contributions made by the Company were ~~$6.8~~$8.6 million and $~~5.4~~6.0 million for the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~$18.8~~$16.2 million and ~~$13.3~~$12.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

Table of Contents

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note ~~14—~~13—Related Party Transactions

~~OneStim Acquisition and Related Transaction~~Schlumberger Limited

~~On December 31,~~During 2020, the Company acquired certain assets and liabilities of Schlumberger Technology Corporation (“Schlumberger”) in exchange for the issuance of shares of the Company’s Class A Common Stock amongst other consideration. During the six months ended June 30, 2023, the Company repurchased and retired 3,000,000 shares of Class A Common Stock for $45.0 million or $15.00 average price per share from Schlumberger, ~~Canada Limited OneStim® business (“OneStim”), which provides hydraulic fracturing pressure pumping services in onshore United States~~under the share repurchase program. Effective January 31, 2023, after the repurchase and ~~Canada (the “OneStim Acquisition”). As of September 30, 2022~~retirement, Schlumberger ~~owned 23,069,461~~owns no shares of Class A Common Stock of the Company ~~or approximately 12.6% of the issued~~ and ~~outstanding shares of Common Stock. In conjunction with closing the OneStim Acquisition, the Company entered into~~no longer qualifies as a transition services agreement with Schlumberger under which Schlumberger provides certain administrative transition services until the Company fully integrates the acquired business. The Company incurred $0.0 million and $5.7 million of fees payable to Schlumberger for such transaction services during the three and nine months ended September 30, 2021. No fees were incurred during the three and nine months ended September 30, 2022.related party.

During 2021, a subsidiary of the Company and Schlumberger entered into a property swap agreement under which the Company exchanged with Schlumberger a property acquired in the OneStim Acquisition and $4.9 million in cash for a separate property that the Company will utilize with its existing operations. The Company did not recognize any gain or loss on the transaction.

~~Following the OneStim Acquisition, in~~Within the normal course of business, the Company purchases chemicals, proppant and other equipment and maintenance parts from Schlumberger and its subsidiaries. During the period from January 1, 2023 until January 31, 2023, total purchases from Schlumberger were approximately $1.7 million. During the three and ~~nine~~six months ended ~~September~~June 30, 2022, total purchases from Schlumberger were approximately ~~$7.4~~$4.5 million and ~~$15.5 million, respectively. During the three and nine months ended September 30, 2021, total purchases from Schlumberger were approximately $6.5 million and $26.4~~$8.1 million, respectively. As of ~~September 30,~~December 31, 2022 amounts due to Schlumberger were ~~$3.8~~$2.6 million and ~~$1.1 million included in accounts payable and accrued liabilities, respectively. As of December 31, 2021 amounts due to Schlumberger were $2.7 million and $1.1~~$0.7 million, included in accounts payable and accrued liabilities, respectively, in the unaudited condensed consolidated balance sheet. Although the Company continues to do business with Schlumberger, the Company no longer presents cash flows with Schlumberger as related party in the accompanying unaudited condensed consolidated statements of cash flows.

Franklin Mountain Energy, LLC

~~Effective on June 15,~~During 2021, Audrey Robertson was appointed to the board of directors of the Company. Ms. Robertson serves as the Chief Financial Officer of Franklin Mountain Energy, LLC (“Franklin Mountain”). During the three and ~~nine~~six months ended ~~September~~June 30, 2023, the Company performed hydraulic fracturing services for Franklin Mountain in the amount of $43.5 million and $66.8 million, respectively. During the three and six months ended June 30, 2022 the Company performed hydraulic fracturing services for Franklin Mountain in the amount of ~~$55.5~~$1.2 million ~~or 4.7%~~ and ~~$79.0~~$23.5 million, or 2.7% of the Company’s revenues for such periods, respectively. During the three and nine months ended September 30, 2021 the Company performed hydraulic fracturing services for Franklin Mountain in the amount of $7.0 million or 1.1% and $7.0 million or 0.4% of the Company’s revenues for such periods, respectively. Amounts included in unbilled revenue from Franklin Mountain as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021~~2022 were ~~$26.1~~$27.5 million and ~~$0.0~~$13.9 million, respectively. ~~Receivables~~There were no receivables from Franklin Mountain as of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021 were $0.0 million.~~

~~Table of Contents~~

~~LIBERTY ENERGY INC.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

2022.

Liberty Resources LLC

Liberty Resources LLC, an oil and gas exploration and production company, and its successor entity (collectively, the “Affiliate”) has certain common ownership and management with the Company. The amounts of the Company’s revenue related to hydraulic fracturing services provided to the Affiliate for the three months ended ~~September~~June 30, 2023 and 2022 ~~and 2021~~ was ~~$10.3~~$8.7 million and ~~$0.0~~$0 million, respectively, and ~~$10.3~~$15.2 million and ~~$1.2~~$0 million for the ~~nine~~six months ended June 30, 2023 and 2022, respectively. Amounts included in unbilled revenue and receivables from the Affiliate as of June 30, 2023 were $1.5 million and $7.2 million, respectively.

On December 28, 2022 (the “Agreement Date”), the Company entered into an agreement with the Affiliate to amend payment terms for outstanding invoices due as of the Agreement Date to be due on April 1, 2024. Amounts outstanding from the Affiliate as of June 30, 2023 were $6.4 million, included in prepaid and other current assets in the accompanying unaudited condensed consolidated balance sheet. Amounts outstanding from the Affiliate as of December 31, 2022 were $11.8 million, included in other assets in the accompanying unaudited condensed consolidated balance sheet. The receivable amount became current during the three months ended June 30, 2023. Any receivable amount outstanding at the end of each month is subject to 15% interest through September 30, ~~2022~~2023, and ~~2021, respectively. As of September 30, 2022 and December 31, 2021, there were $10.3 million outstanding accounts receivable with the Affiliate.~~18% thereafter.

~~PropX Acquisition~~

During 2016, Liberty Holdings entered into a future commitment to invest and become a non-controlling minority member in PropX, the provider of proppant logistics equipment. Effective October 26, 2021, the Company completed the purchase of all membership interest in PropX, refer to Note 3—PropX Acquisition for further discussion of the transaction. During the three and ~~nine~~six months ended ~~September~~June 30, ~~2021, prior to~~2023, interest income from the ~~PropX Acquisition, the Company leased proppant logistics equipment from PropX for $3.2~~Affiliate was $0.4 million and ~~$7.3~~$0.7 million, respectively.

~~R/C IV Liberty Big Box Holdings, L.P., a Riverstone Holdings LLC (“Riverstone”) fund~~ During the three and ~~a former significant stockholder of the Company, held a greater than 10% equity~~six months ended June 30, 2022, there was no interest in PropX. Christopher Wright, the Chief Executive Officer, Michael Stock, the Chief Financial Officer and Ron Gusek, the President of the Company, held a less than 5% equity interest in PropX through Big Box Proppant Investments LLC. Cary Steinbeck, a director of the Company, served on the PropX board of the directors and held a less than 5% indirect equity interest in PropX. In addition, Brett Staffieri, a Riverstone appointed director, served on the board of the directors of the Company until June 15, 2021 and on the PropX board of directors until the acquisition date. The PropX Acquisition was reviewed and approved by the disinterested members of the Board and pursuant to the Company’s related party transactions policy.

~~Secondary Offering by Selling Stockholder~~

On April 29, 2022, the Company, Liberty LLC, Schlumberger, and BofA Securities, Inc. and J.P. Morgan Securities LLC (together, the “Underwriters”), entered into an underwriting agreement, dated as of April 29, 2022, pursuant to which Schlumberger sold 14,500,000 shares of Class A Common Stock at a price of $15.50 per share to the Underwriters (the “Sale”). The Sale closed on May 3, 2022. Following the Sale, Schlumberger held 35,101,961 shares of Class A Common Stock. The Company did not receive any proceedsincome from the ~~Sale.~~Affiliate.

Note ~~15—~~14—Commitments & Contingencies

Purchase Commitments (tons and gallons are not in thousands)

The Company enters into purchase and supply agreements to secure supply and pricing of proppants, ~~chemicals,~~transload, and equipment. As of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the agreements ~~commit~~provide pricing and committed supply sources for the Company to purchase ~~1,664,421~~2,053,765 tons and ~~89,317~~2,915,172 tons, respectively, of proppant through ~~March~~December 31, 2024. Amounts ~~below~~above also include commitments to pay for transport fees on minimum amounts of proppants. Additionally, related proppant transload service commitments ~~extend into~~run through 2023.

Table of Contents

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Future proppant, transload, ~~equipment~~ and ~~mancamp~~equipment commitments are as follows:


($ in thousands)	($ in thousands)			($ in thousands)
Remainder of 2022		$	44,491
2023		47,349
Remainder of 2023				Remainder of 2023	$	134,598
2024	2024	4,200		2024	70,800
2025	2025	—		2025	—
2026	2026	—		2026	—
2027				2027	—
Thereafter	Thereafter	—		Thereafter	—
		$	96,040		$	205,398

Certain supply agreements contain a clause whereby in the event that the Company fails to purchase minimum volumes, as defined in the agreement, during a specific time period, a shortfall fee may apply. In circumstances where the Company does not make the minimum purchase required under the contract, the Company and its suppliers have a history of amending such minimum purchase contractual terms and in rare cases does the Company incur shortfall fees. If the Company were unable to make any of the minimum purchases and the Company and its suppliers cannot come to an agreement to avoid such fees, the Company could incur shortfall fees in the amounts of ~~$17.0 million, $9.8~~$29.9 million and ~~$0.7~~$8.7 million for the remainder of ~~2022~~

~~Table of Contents~~

~~LIBERTY ENERGY INC.~~

~~Notes to Condensed Consolidated Financial Statements~~

~~(Unaudited)~~

2023 and the ~~years~~year ended ~~2023 and~~ 2024, respectively. Based on forecasted levels of activity, the Company does not currently expect to incur significant shortfall fees.

Included in the commitments for the remainder of ~~2022~~2023 are ~~$8.5~~$3.8 million of payments expected to be made ~~to Schlumberger, in conjunction with a permissive use agreement provided by Schlumberger,~~ in the ~~fourth~~third quarter of ~~2022~~2023 for the use of certain light duty trucks, heavy tractors and field equipment used to various degrees in frac and wireline operations. The Company is in negotiations with the third-party owner of such equipment to lease or purchase some or all of such aforementioned vehicles and equipment, subject to agreement on terms and conditions. No gain or loss is expected upon consummation of any such agreement.

Litigation

From time to time, the Company is subject to legal and administrative proceedings, settlements, investigations, claims and actions. The Company’s assessment of the likely outcome of litigation matters is based on its judgment of a number of factors including experience with similar matters, past history, precedents, relevant financial and other evidence and facts specific to the matter. Notwithstanding the uncertainty as to the final outcome, based upon the information currently available, management does not believe any matters, individually or in aggregate, will have a material adverse effect on ~~its~~the Company’s financial position or results of operations.

Table of Contents

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note ~~16—~~15—Selected Quarterly Financial Data

The following tables summarizes consolidated changes in equity for the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021:~~2022:
Shares of Class A Common Stock Shares of Class B Common Stock Class A Common Stock, Par Value Class B Common Stock, Par Value Additional Paid in Capital (Accumulated Deficit) Retained Earnings Accumulated Other Comprehensive Loss
Total Stockholders’ equity
Noncontrolling Interest Total Equity
Balance—June 30, 2022 186,859 326 $ 1,869 $ 3 $ 1,384,134 $ (56,174) $ (2,263) $ 1,327,569 $ 2,447 $ 1,330,016
Offering Costs — — — — 485 — — 485 — 485
Share repurchases (4,702) (47) (69,987) — (70,034) (60) (70,094)
Stock-based compensation expense 6,100 — — 6,100 12 6,112
Vesting of restricted stock units 2 — — — — — — — —
Tax withheld on vesting of restricted stock units — — — — (1) — — (1) (1)
Currency translation adjustment — — — — — — (6,332) (6,332) (11) (6,343)
Net income — — — — — 146,953 — 146,953 310 147,263
Balance—September 30, 2022 182,159 326 $ 1,822 $ 3 $ 1,320,731 $ 90,779 $ (8,595) $ 1,404,740 $ 2,698 $ 1,407,438
Shares of Class A Common Stock Shares of Class B Common Stock Class A Common Stock, Par Value Class B Common Stock, Par Value Additional Paid in Capital Accumulated Deficit Accumulated Other Comprehensive Income
Total Stockholders’ equity
Noncontrolling Interest Total Equity
Balance—June 30, 2021 178,310 $ 1,860 $ 1,783 $ 19 $ 1,274,031 $ (61,475) $ 2,454 $ 1,216,812 $ 12,622 $ 1,229,434
Offering Costs — — — — (159) — — (159) — (159)
Stock-based compensation expense — — — — 4,201 — — 4,201 44 4,245
Currency translation adjustment — — — — — — (2,263) (2,263) (24) (2,287)
Net loss — — — — — (38,890) — (38,890) (489) (39,379)
Balance—September 30, 2021 178,310 1,860 1,783 19 1,278,073 (100,365) 191 1,179,701 12,153 $ 1,191,854


	Shares of Class A Common Stock	Shares of Class B Common Stock	Class A Common Stock, Par Value		Class B Common Stock, Par Value		Additional Paid in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ equity		Non-controlling Interest		Total Equity
Balance—March 31, 2023	173,945	—	$	1,739	$	—	$	1,208,183	$	388,064	$	(7,867)	$	1,590,119	$	—	$	1,590,119
Offering Costs	—	—	—		—		—		—		—		—		—		—


$0.05/share of Class A Common Stock dividend	—	—	—		—		—		(8,761)				(8,761)		—		(8,761)
Share repurchases	(4,722)	—	(47)		—		(60,047)		—				(60,094)		—		(60,094)
Excise tax on share repurchases	—	—	—		—		(639)		—				(639)		—		(639)
Stock-based compensation expense	—	—	—		—		7,965		—		—		7,965		—		7,965
Vesting of restricted stock units	1,170	—	12		—		(12)		—		—		—		—		—
Tax withheld on vesting of restricted stock units	—	—	—		—		(9,320)		—		—		(9,320)		—		(9,320)
Currency translation adjustment	—	—	—		—		—		—		2,000		2,000		—		2,000
Net income	—	—	—		—		—		152,671		—		152,671		—		152,671
Balance—June 30, 2023	170,393	—	$	1,704	$	—	$	1,146,130	$	531,974	$	(5,867)	$	1,673,941	$	—	$	1,673,941


	Shares of Class A Common Stock	Shares of Class B Common Stock		Class A Common Stock, Par Value		Class B Common Stock, Par Value		Additional Paid in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ equity		Non-controlling Interest		Total Equity
Balance—March 31, 2022	185,761	$	340	$	1,858	$	3	$	1,389,987	$	(161,330)	$	743	$	1,231,261	$	2,405	$	1,233,666
Exchange of Class B Common Stock for Class A Common Stock	14	(14)		—		—		130		—		—		130		(130)		—
Offering Costs	—	—		—		—		(502)		—		—		(502)		—		(502)


Stock-based compensation expense	—	—		—		—		4,194		—		—		4,194		7		4,201
Vesting of restricted stock units	1,084	—		11		—		1		—		—		12		(12)		—
Tax withheld on vesting of restricted stock units	—	—		—		—		(9,676)		—		—		(9,676)		—		(9,676)
Currency translation adjustment	—	—		—		—		—		—		(3,006)		(3,006)		(6)		(3,012)
Net income	—	—		—		—		—		105,156		—		105,156		183		105,339
Balance—June 30, 2022	186,859	326		1,869		3		1,384,134		(56,174)		(2,263)		1,327,569		2,447		$	1,330,016

Note ~~17—~~16—Subsequent Events

On ~~October~~July 18, ~~2022,~~2023, the Company’s board of directors approved a quarterly dividend of $0.05 per share of Class A Common Stock ~~and a distribution of $0.05 per Liberty LLC Unit,~~ to be paid on ~~December~~September 20, ~~2022~~2023 to holders of record as of ~~December~~September 6, ~~2022. The Company will use the proceeds from the Liberty LLC distribution to pay the dividend.~~2023.

No other significant subsequent events have occurred that would require recognition or disclosure in the unaudited condensed consolidated financial statements.

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs, and expected performance. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a variety of risks and uncertainties, including those described in “Cautionary Note Regarding Forward-Looking Statements,” the Annual Report under the heading “Item 1A. Risk Factors,” and in ~~“Part~~"Part II – Other Information, Item 1A.–Risk ~~Factors”~~Factors" included herein. We assume no obligation to update any of these forward-looking statements.

Overview

The Company, together with its subsidiaries, is a leading integrated ~~oilfield~~energy services and technology company focused on providing innovative hydraulic fracturing services and related technologies to onshore oil and natural gas E&P companies in North America. We offer customers hydraulic fracturing services, together with complementary services including wireline services, proppant delivery solutions, field gas processing, CNG delivery, data analytics, related goods (including our sand mine operations), and technologies that will facilitate lower emission completions, thereby helping our customers reduce their emissions profile. We have grown from one active hydraulic fracturing fleet in December 2011 to over 40 active fleets as of ~~September~~June 30, ~~2022.~~2023. We provide our services primarily in the Permian Basin, the Eagle Ford Shale, the DJ Basin, the Williston Basin, the San Juan Basin, the Powder River Basin, the Haynesville Shale, the SCOOP/STACK, the Marcellus Shale, Utica Shale, and the Western Canadian Sedimentary Basin. Additionally, we operate two sand mines in the Permian Basin.

~~On December 31, 2020,~~The Company recently launched Liberty Power Innovations(“LPI”), an integrated alternative fuel and power solutions provider for remote applications. LPI’s initial focus is on CNG supply, field gas processing and treating, and well site fueling and logistics. Dependable access to fuel is critical to maintaining highly efficient well site operations. LPI will supply this fuel to Liberty and others in the industry.

To accelerate LPI’s expansion, on April 6, 2023, the Company acquired certain assets and liabilities of Schlumberger’s OneStim business, which provides hydraulic fracturing pressure pumping services in onshore United States and Canada, including its pressure pumping, pumpdown perforating and Permian frac sand business,Siren in exchange for consideration resulting in a total of 66,326,134 shares of the Class A Common Stock being issued in connection with the OneStim Acquisition. As of October 18, 2022, Schlumberger owned 12.6% of the issued and outstanding shares of our Common Stock. The combined company delivers best-in-class completion services for the sustainable development of unconventional resource plays in the United States and Canada onshore markets.

~~On October 26, 2021, the Company acquired PropX in exchange for $11.9~~$76.4 million in cash, and 3,405,526 shares of Class A Common Stock and 2,441,010 shares of Class B Common Stock, and 2,441,010 Liberty LLC Units, for total consideration of $103.0 million, based on the Class A Common Stock closing price of $15.58 on October 26, 2021, subject to customary post-closing adjustments. ~~The Liberty LLC Units are redeemable for an equivalent number of shares of Class A Common Stock at any time, at the election of the shareholder. Founded in 2016, PropX~~Siren is a ~~leading provider~~Permian focused integrated natural gas compression and CNG delivery business. At the acquisition date, Siren had 16 MMcf per day of ~~last-mile proppant delivery solutions including proppant handling equipment~~natural gas compression capacity at two expandable Permian sites and transportation, logistics, ~~software across North America. PropX offers innovative environmentally friendly technology with optimized dry~~ and ~~wet sand containers~~pressure reduction services. Siren currently delivers fuel to customers in both the drilling and ~~wellsite proppant handling equipment that drive~~completions markets, and its logistics ~~efficiency and reduce noise and emissions.~~system is designed to deliver CNG, renewable natural gas, or hydrogen to remote locations. We believe that ~~PropX wet sand handling technology~~the added natural gas compression capability is a key enabler of the next step of cost and emissions reductions in the ~~proppant~~ industry. ~~PropX also offers customers the latest real-time logistics software, PropConnect, for sale or as hosted software as a service.~~

We believe technical innovation and strong relationships with our customer and supplier bases distinguish us from our competitors and are the foundations of our business. We expect that E&P companies will continue to focus on technological innovation as completion complexity and fracture intensity of horizontal wells increases, particularly as customers are increasingly focused on reducing emissions from their completions operations. We remain proactive in developing innovative solutions to industry challenges, including developing: (i) our databases of U.S. unconventional wells to which we apply our proprietary multi-variable statistical analysis technologies to provide differential insight into fracture design optimization; (ii) our Liberty Quiet Fleet® design which significantly reduces noise levels compared to conventional hydraulic fracturing fleets; (iii) hydraulic fracturing fluid systems tailored to the specific reservoir properties in the basins in which we operate; (iv) our dual fuel dynamic gas blending fleets that allow our engines to run diesel or a combination of diesel and natural gas, to optimize fuel use, reduce emissions and lower costs; (v) ~~the successful test~~our first digiFleet℠, comprising of ~~digiFrac™,~~digiFrac℠ and digiPrime℠ pumps, our innovative, purpose-built electric frac pump that has approximately 25% lower CO2e emission profile than the Tier IV DGB; and (vi) our ~~PropX~~ wet sand handling technology which eliminates the need to dry sand, enabling the deployment of mobile mines nearer to wellsites. In addition, our integrated supply chain includes proppant, chemicals, equipment, natural gas fueling services, logistics and integrated software which we believe promotes wellsite efficiency and leads to more pumping hours and higher productivity throughout the year to better service our customers. In order to achieve our technological objectives, we carefully manage our liquidity and debt position to promote operational flexibility and invest in the business throughout the full commodity cycle in the regions we operate.

Recent Trends and Outlook

Frac markets in North America are at steady, healthy activity levels, after moderating a bit from late 2022 levels as commodity prices retreated from the 2022 peak. Crude oil prices are now at pre-Russia-Ukraine war levels which has spurred private operators in oilier basins to reduce activity. Lower natural gas prices have led to a curtailment of activity in gas basins. In the second half of 2023, we expect demand for frac fleets to parallel recent rig count trends at approximately a one quarter lag in the second half of 2023. The rig count shows signs of stabilization emerging. We believe E&P operators are already benefiting from lower well costs from consumable inputs, and some are evaluating plans to pull-forward completions activity, however, activity in natural gas markets will likely not increase until 2024 in advance of rising LNG and Mexico exports.

Table of Contents

~~Recent Trends and Outlook~~

Current global macroeconomic concerns include rising interest rates, elevated inflation levels, and Chinese Covid lockdowns. Despite these headwinds, oil and gas markets remained tight in the third quarter. As we look ahead, risks to the delicate balance in oil and gas markets appear to come from both demand and supply.

With regards to demand, while a mild recession may modestly impact the global demand for energy, and may already be reflected in prices, a global economic downturn could result in increased demand destruction, further pressuring commodity prices.At the same time, global supply risks are also present. OPEC+ preemptive cuts to production quotas may result in a decline in production from key producers including Saudi Arabia and the United Arab Emirates. Currently, Russian oil exports have been modestly curbed since the Ukraine invasion, however, impending sanctions on Russian seaborne crude could further lowerMore broadly, global oil ~~supplies. Low levels~~markets are signaling a constructive outlook on a tightening supply-demand balance. OPEC+ supply cuts in recent months are beginning to take hold, and markets are anticipating a subsequent draw on global oil inventories. In the U.S., slowing production growth, a drawdown of ~~spare production capacity, worldwide~~ oil ~~and gas commercial~~ inventories, and ~~global~~a likely shift to refilling U.S. strategic petroleum reserves ~~further exacerbate supply concerns.Together, these factors may strengthen~~aid the outlook. Despite recessionary risks, demand for ~~secure~~oil remains resilient given several factors, including global travel trending towards pre-COVID-19 levels, robust demand from India and strength in emerging markets. Underinvestment in global production capacity likely supports a resilient multi-year cycle for oil and gas.

Relative to prior cycles, frac demand has a natural floor as the large majority of completions activity is simply offsetting normal production declines. Operators are largely adhering to flat or very modest growth production targets. The combination has resulted in higher base levels of frac fleet utilization and more insulation from commodity price volatility than in prior cycles. The current, more consolidated industry is better prepared to navigate near-term softness in completions activity by reducing fleet counts to balance the market and protect margins.

The industrialization of emerging economies is driving long term demand for reliable, affordable energy, and the North American ~~energy.~~

~~Today’s commodity prices continue to offer returns for E&P operators,~~land market is in a strong position as the largest supplier of incremental production. Our industry remains healthy, even ~~after the decline~~with a modest contraction in oil prices from 2022 levels and transient softness in natural gas ~~prices in recent months. The combination of capital discipline among many public operators and tight supply chains, particularly~~markets. We anticipate North American completions activity will moderate in the ~~frac services market, have constrained activity levels to deliver only modest U.S. oil production growth. The limited capital being deployed is expected to be primarily directed towards~~second half of the ~~buildout of next generation frac fleet capacity at levels roughly sufficient to offset aging equipment with next generation~~year versus the first half and service companies are reducing fleets in ~~demand. We believe that the current~~response, supporting a balanced frac market ~~is relatively tight with near full utilization of available capacity. Tight service supply has made service quality~~ and ~~reliability important for customers.Given that we pride ourselves on both our service quality and fleet modernization program, these two factors may further strengthen Liberty’s competitive position.~~a largely stable price environment.

During the ~~third~~second quarter of ~~2022,~~2023, the posted WTI price traded at an average of ~~$93.06~~$73.54 per barrel (“Bbl”), as compared to the ~~third quarter of 2021 average of $70.58 per Bbl, and~~ second quarter of 2022 average of $108.83 per Bbl, and first quarter of 2023 average of $75.93 per Bbl. In addition, the average domestic onshore rig count for the United States and Canada was ~~942~~815 rigs reported in the ~~third~~second quarter of ~~2022,~~2023, up ~~from the third quarter of 2021 of 634 and an increase~~ from the second quarter of 2022 of 810 but a decrease from the first quarter of 2023 of 965, according to a report from Baker Hughes.

~~Table of Contents~~

Results of Operations

Three ~~months ended September~~Months Ended June 30, ~~2022 compared~~2023, Compared to ~~three months ended September~~Three Months Ended June 30, ~~2021~~2022


		Three months ended September 30,							Three months ended June 30,
Description	Description	2022		2021		Change		Description	2023		2022		Change
		(in thousands)							(in thousands)
Revenue	Revenue	$	1,188,247	$	653,727	$	534,520	Revenue	$	1,194,988	$	942,619	$	252,369
Cost of services, excluding depreciation, depletion, and amortization shown separately	Cost of services, excluding depreciation, depletion, and amortization shown separately	874,453		593,683		280,770		Cost of services, excluding depreciation, depletion, and amortization shown separately	833,456		713,718		119,738
General and administrative	General and administrative	50,473		32,281		18,192		General and administrative	58,034		42,162		15,872
Transaction, severance and other costs		1,767		1,556		211
Transaction, severance, and other costs								Transaction, severance, and other costs	985		2,192		(1,207)
Depreciation, depletion, and amortization	Depreciation, depletion, and amortization	82,848		65,852		16,996		Depreciation, depletion, and amortization	99,695		77,379		22,316
Gain on disposal of assets	Gain on disposal of assets	(4,277)		(79)		(4,198)		Gain on disposal of assets	(3,660)		(3,436)		(224)
Operating income (loss)		182,983		(39,566)		222,549
Other expense (income), net		33,148		(940)		34,088
Net income (loss) before income taxes		149,835		(38,626)		188,461
Operating income								Operating income	206,478		110,604		95,874
Other expense, net								Other expense, net	6,475		5,030		1,445
Net income before income taxes								Net income before income taxes	200,003		105,574		94,429
Income tax expense	Income tax expense	2,572		753		1,819		Income tax expense	47,332		235		47,097
Net income (loss)		147,263		(39,379)		186,642
Less: Net income (loss) attributable to non-controlling interests		310		(489)		799
Net income (loss) attributable to Liberty Energy Inc. stockholders		$	146,953	$	(38,890)	$	185,843
Net income								Net income	152,671		105,339		47,332
Less: Net income attributable to non-controlling interests								Less: Net income attributable to non-controlling interests	—		183		(183)
Net income attributable to Liberty Energy Inc. stockholders								Net income attributable to Liberty Energy Inc. stockholders	$	152,671	$	105,156	$	47,515

Revenue

Our revenue increased $~~534.5~~252.4 million, or ~~81.8%~~26.8%, to $1.2 billion for the three months ended ~~September~~June 30, ~~2022~~2023 compared to ~~$653.7~~$942.6 million for the three months ended ~~September~~June 30, ~~2021.~~2022. The increase in revenue is attributable to higher service pricing, the addition and reactivation of several fleets subsequent to the prior year period, and an activity-driven increase in fleet ~~utilization and~~ efficiency commensurate with ~~increased~~consistent demand for hydraulic fracturing services.

Cost of Services

Cost of services (excluding depreciation, depletion, and amortization) increased $~~280.8~~119.7 million, or ~~47.3%~~16.8%, to $~~874.5~~833.5 million for the three months ended ~~September~~June 30, ~~2022~~2023 compared to ~~$593.7~~$713.7 million for the three months ended ~~September~~June 30, ~~2021.~~2022. The increase in expense was primarily related to increases in materials and parts consumption and higher labor costs related to additional fleets and higher fleet ~~utilization~~efficiency as well as ongoing inflationary increases impacting costs for materials, labor, and maintenance parts.

Table of Contents

General and Administrative

General and administrative expenses increased $~~18.2~~15.9 million, or ~~56.4%~~37.6%, to $~~50.5~~58.0 million for the three months ended ~~September~~June 30, ~~2022~~2023 compared to ~~$32.3~~$42.2 million for the three months ended ~~September~~June 30, ~~2021~~2022 primarily related to ~~increases~~an increase in performance-based variable compensation, labor cost inflation, and corporate costs related to increased levels of activity.

Transaction, Severance and Other Costs

Transaction, severance, and other costs ofdecreased $1.2 million, or 55.1%, to $~~1.8~~1.0 million ~~and~~ ~~$1.6 million~~ for the three months ended ~~September~~June 30, ~~2022 and 2021, respectively, consist of~~2023 compared to $2.2 million for the three months ended June 30, 2022. The costs incurred in the three months ended June 30, 2023 primarily related to integration cost, ~~investment banking,~~ legal, accounting, and other professional services provided in connection with the ~~OneStim~~Siren Acquisition, ~~and PropX Acquisition.~~while costs incurred during the three months ended June 30, 2022 related to ongoing integration costs from prior period acquisitions.

Depreciation, Depletion, and Amortization

Depreciation, depletion, and amortization expense increased $~~17.0~~22.3 million, or ~~25.8%~~28.8%, to $~~82.8~~99.7 million for the three months ended ~~September~~June 30, ~~2022~~2023 compared to ~~$65.9~~$77.4 million for the three months ended ~~September~~June 30, ~~2021.~~2022. The increase in ~~2022~~2023 was due to additional equipment placed in service since the prior year period, ~~and additional depreciation from property acquired in~~including the ~~PropX Acquisition.~~

~~Table~~deployment of ~~Contents~~our digiTechnologies.

Gain on Disposal of Assets

~~The Company recognized a gain~~Gain on disposal of assets ~~of $4.3~~increased $0.3 million, or 6.5% to $3.7 million for the three months ended ~~September~~June 30, 2023 compared to $3.4 million for the three months ended June 30, 2022 primarily ~~as a result of the sale~~related to sales of used field equipment and light duty trucks in a strong used vehicle and equipment ~~market compared to a gain of $0.1 million for the three months ended September 30, 2021 due to miscellaneous equipment disposals.~~market. All disposals ~~recorded during the three months ended September 30, 2022 and 2021~~ were in the normal course of business.

Operating Income ~~(Loss)~~

The Company recorded operating income of ~~$183.0~~$206.5 million for the three months ended ~~September~~June 30, ~~2022~~2023 compared to operating ~~loss~~income of ~~$39.6~~$110.6 million for the three months ended ~~September~~June 30, ~~2021, an increase in operating results of $222.5 million, or 562.5%.~~2022. The increase in operating income is primarily due to the ~~$534.5~~$252.4 million, or ~~81.8%~~26.8%, increase in total revenue only partially offset by a ~~$312.0~~$156.5 million increase in total operating expenses, the significant components of which are discussed above.

Other Expense, ~~(Income),~~ net

~~The Company recognized other~~Other expense, ~~of $33.1~~net increased by $1.4 million, or 28.7%, to $6.5 million for the three months ended ~~September~~June 30, ~~2022~~2023 compared to ~~other income of $0.9~~$5.0 million for the three months ended ~~September~~June 30, ~~2021.~~2022. Other expense, ~~(income),~~ net is primarily comprised of ~~loss (gain) on remeasurement of liability under the TRAs, gain on investments,~~interest income—related party and interest expense, net. ~~The Company remeasured the liability under the TRAs resulting in a loss of $28.9~~Interest income—related party increased $0.4 million ~~for the three months ended September 30, 2022, compared~~related to a gain of $4.9 million for the three months ended September 30, 2021. A $2.5 million gain on investments was recorded during the three months ended September 30, 2022, compared to no gain for the three months ended September 30, 2021.note receivable agreement executed in December 2022. Additionally, interest expense, net increased ~~$2.8~~$2.0 million as a result of increased borrowings and higher interest rates under the ~~credit facility along with higher interest rates.~~ABL Facility during the three months ended June 30, 2023 compared to the three months ended June 30, 2022.

Net Income ~~(loss)~~ before Income Taxes

The Company realized net income before income taxes of ~~$149.8~~$200.0 million for the three months ended ~~September~~June 30, ~~2022~~2023 compared to net ~~loss~~income before income taxes of ~~$38.6~~$105.6 million for the three months ended ~~September~~June 30, ~~2021.~~2022. The increase in ~~income~~results is primarily attributable to an increase in revenue, as discussed above, related to the fleet deployments and an increase in activity and service pricing.

Income Tax Expense

~~Income~~The Company recognized income tax expense ~~increased $1.8 million to $2.6~~of $47.3 million for the three months ended ~~September~~June 30, ~~2022,~~2023, at an effective rate of ~~1.7%~~23.7%, compared to ~~a tax expense of $0.8~~$0.2 million, at an effective rate of ~~(1.9)%~~0.2%, recognized during the three months ended ~~September~~June 30, ~~2021.~~2022. The increase in income tax expense is primarily attributable to the ~~increase in Company’s foreign operations as~~Company recording taxes on the Company’s U.S. activity during the three months ended June 30, 2023, compared to having a valuation allowance ~~was recorded~~ on ~~the Company’s~~its U.S. net deferred tax assets ~~beginning in~~for the ~~second quarter of 2021.~~three months ended June 30, 2022.

2625

Table of Contents

~~Nine months ended September~~Six Months Ended June 30, ~~2022 compared~~2023, Compared to ~~nine months ended September~~Six Months Ended June 30, ~~2021~~2022


		Nine months ended September 30,							Six months ended June 30,
Description	Description	2022		2021		Change		Description	2023		2022		Change
		(in thousands)							(in thousands)
Revenue	Revenue	$	2,923,636	$	1,787,047	$	1,136,589	Revenue	$	2,457,065	$	1,735,389	$	721,676
Cost of services, excluding depreciation, depletion, and amortization shown separately	Cost of services, excluding depreciation, depletion, and amortization shown separately	2,258,190		1,614,574		643,616		Cost of services, excluding depreciation, depletion, and amortization shown separately	1,721,872		1,383,737		338,135
General and administrative	General and administrative	130,953		88,043		42,910		General and administrative	111,070		80,480		30,590
Transaction, severance and other costs		5,293		12,173		(6,880)
Transaction, severance, and other costs								Transaction, severance, and other costs	1,602		3,526		(1,924)
Depreciation, depletion, and amortization	Depreciation, depletion, and amortization	234,815		191,122		43,693		Depreciation, depletion, and amortization	194,096		151,967		42,129
Gain on disposal of assets		(3,041)		(1,076)		(1,965)
Operating income (loss)		297,426		(117,789)		415,215
(Gain) loss on disposal of assets								(Gain) loss on disposal of assets	(3,173)		1,236		(4,409)
Operating income								Operating income	431,598		114,443		317,155
Other expense, net	Other expense, net	46,667		3,276		43,391		Other expense, net	14,366		13,519		847
Net income (loss) before income taxes		250,759		(121,065)		371,824
Net income before income taxes								Net income before income taxes	417,232		100,924		316,308
Income tax expense	Income tax expense	3,637		9,402		(5,765)		Income tax expense	101,815		1,065		100,750
Net income (loss)		247,122		(130,467)		377,589
Less: Net income (loss) attributable to non-controlling interests		389		(6,812)		7,201
Net income (loss) attributable to Liberty Energy Inc. stockholders		$	246,733	$	(123,655)	$	370,388
Net income								Net income	315,417		99,859		215,558
Less: Net income attributable to non-controlling interests								Less: Net income attributable to non-controlling interests	91		79		12
Net income attributable to Liberty Energy Inc. stockholders								Net income attributable to Liberty Energy Inc. stockholders	$	315,326	$	99,780	$	215,546

Revenue

Our revenue increased ~~$1.1 billion,~~$721.7 million, or ~~63.6%~~41.6%, to ~~$2.9~~$2.5 billion for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared to ~~$1.8~~$1.7 billion for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. The increase in revenue is attributable to higher service pricing, the addition and reactivation of several fleets subsequent to the prior year period, and an activity-driven increase in fleet ~~utilization and~~ efficiency commensurate with ~~increased~~consistent demand for hydraulic fracturing services.

Cost of Services

Cost of services (excluding depreciation, depletion, and amortization) increased ~~$643.6~~$338.1 million, or ~~39.9%~~24.4%, to ~~$2.3~~$1.7 billion for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared to ~~$1.6~~$1.4 billion for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. The ~~higher~~increase in expense was primarily related to increases in materials and parts consumption and higher labor costs related to additional fleets and higher fleet ~~utilization~~efficiency as well as ongoing inflationary increases impacting costs for materials, labor, and maintenance parts.

General and Administrative

General and administrative expenses increased ~~$42.9~~$30.6 million, or ~~48.7%~~38.0%, to ~~$131.0~~$111.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared to ~~$88.0~~$80.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 primarily related to ~~increases from reinstated bonus programs which had been temporarily suspended during the first quarter of 2020 as a result of the COVID-19 pandemic,~~an increase in performance-based variable compensation, labor cost inflation, and corporate costs related to increased levels of activity.

Transaction, Severance, and Other Costs

Transaction, severance, and other costs decreased ~~$6.9~~$1.9 million, or ~~56.5%~~54.6%, to ~~$5.3~~$1.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared to ~~$12.2~~$3.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. The costs incurred in the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2023 primarily related to integration ~~costs, investment banking,~~cost, legal, accounting, and other professional services provided in connection with the ~~OneStim~~Siren Acquisition, ~~and PropX Acquisition. Such~~while costs ~~were lower~~incurred during the ~~nine~~six months ended ~~September~~June 30, 2022 ~~as the~~related to ongoing integration ~~efforts move towards completion.~~costs from prior period acquisitions.

Depreciation, Depletion, and Amortization

Depreciation, depletion, and amortization expense increased ~~$43.7~~$42.1 million, or ~~22.9%~~27.7%, to ~~$234.8~~$194.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared to ~~$191.1~~$152.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. The increase in ~~2022~~2023 was due to additional equipment placed in service since the prior year period, ~~and additional depreciation from property acquired in~~including the ~~PropX Acquisition.~~deployment of our digiTechnologies.

2726

Table of Contents

~~Gain~~(Gain) loss on disposal of assets

~~Gain~~The Company recognized a gain on disposal of assets ~~increased $2.0 million, or 182.6%, to $3.0~~of $3.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023 compared to ~~$1.1~~a loss of $1.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021 due to miscellaneous equipment disposals~~2022. The gain recognized in the ~~normal course of business. The increase~~six months ended June 30, 2023 was a result of the ~~sale of~~Company selling used field equipment and light duty trucks in a strong used vehicle and equipment ~~market offset by~~market. The loss recognized for the ~~loss on~~six months ended June 30, 2022 was a result of the sale of one and a plan of sale for ~~two other~~another non-strategic ~~facilities acquired in the OneStim Acquisition~~facility.

Operating Income ~~(Loss)~~

The Company recorded operating income of ~~$297.4~~$431.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared to operating ~~loss~~income of ~~$117.8~~$114.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021, the~~2022. The increase in operating income is primarily due to the ~~$1.1 billion,~~$721.7 million, or ~~63.6%~~41.6%, increase in total revenue partially offset by a ~~$721.4~~$404.5 million increase in total operating expenses, the significant components of which are discussed above.

Other Expense, net

Other expense, net increased ~~$43.4~~by $0.9 million to ~~$46.7~~$14.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared to ~~$3.3~~$13.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. Other expense, net is comprised of loss on remeasurement of liability under the TRAs, ~~gain on investments,~~interest income—related party, and interest expense, net. The Company remeasured the liability under the TRAs resulting in a loss of ~~$33.2~~$4.3 million for the ~~nine~~six months ended ~~September~~June 30, 2022, ~~compared~~and there was no such remeasurement required during the six months ended June 30, 2023. Interest income—related party increased $0.7 million related to a gain of $8.3 million for the nine months ended September 30, 2021. A $2.5 million gain on investments was recorded during the nine months ended September 30, 2022, compared to no gain for the nine months ended September 30, 2021.note receivable agreement executed in December 2022. Additionally, interest expense, net increased ~~$4.4~~$5.9 million as a result of increased borrowings and higher interest rates under the ~~credit facility along with higher interest rates.~~ABL Facility during the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

Net Income ~~(Loss)~~ before Income Taxes

The Company realized net income before income taxes of ~~$250.8~~$417.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared to net ~~loss~~income before income taxes of ~~$121.1~~$100.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. The increase in results is primarily attributable to an increase in revenue, as discussed above, related to the fleet deployments and an increase in activity and service pricing.

Income Tax Expense

~~Income~~The Company recognized income tax expense ~~decreased $5.8 million to $3.6~~of $101.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022, at~~2023, an effective rate of ~~1.5%~~24.4%, compared to ~~$9.4~~$1.1 million, at an effective rate of ~~(7.8)%~~1.1%, recognized during the ~~nine~~six months ended ~~September~~June 30, ~~2021. This decrease~~2022. The increase in income tax expense is primarily attributable to the Company recording taxes on the Company’s U.S. activity during the six months ended June 30, 2023, compared to having a valuation allowance on its U.S. net deferred tax assets ~~beginning in~~for the ~~second quarter of 2021, resulting in income tax expense for that period, while in subsequent periods no tax expense or benefit is recognized on U.S. state and federal income or loss.~~six months ended June 30, 2022.

Comparison of Non-GAAP Financial Measures

We view EBITDA and Adjusted EBITDA as important indicators of performance. We define EBITDA as net income before interest, income taxes, and depreciation, depletion, and amortization. We define Adjusted EBITDA as EBITDA adjusted to eliminate the effects of items such as non-cash stock-based compensation, new fleet or new basin start-up costs, fleet lay-down costs, costs of asset acquisitions, gain or loss on the disposal of assets, bad debt reserves, transaction, severance, and other costs, the loss or gain on remeasurement of liability under our tax receivable agreements, the gain or loss on investments, and other non-recurring expenses that management does not consider in assessing ongoing performance.

Our board of directors, management, investors, and lenders use EBITDA and Adjusted EBITDA to assess our financial performance because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation, depletion, and amortization) and other items that impact the comparability of financial results from period to period. We present EBITDA and Adjusted EBITDA because we believe they provide useful information regarding the factors and trends affecting our business in addition to measures calculated under GAAP.

2827

Table of Contents

Note Regarding Non-GAAP Financial Measures

EBITDA and Adjusted EBITDA are not financial measures presented in accordance with GAAP. We believe that the presentation of these non-GAAP financial measures will provide useful information to investors in assessing our financial performance and results of operations. Net income ~~(loss)~~ is the GAAP measure most directly comparable to EBITDA and Adjusted EBITDA. Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measure. Each of these non-GAAP financial measures has important limitations as an analytical tool due to exclusion of some but not all items that affect the most directly comparable GAAP financial measures. You should not consider EBITDA or Adjusted EBITDA in isolation or as substitutes for an analysis of our results as reported under GAAP. Because EBITDA and Adjusted EBITDA may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

The following tables present a reconciliation of EBITDA and Adjusted EBITDA to our net ~~loss,~~income, which is the most directly comparable GAAP financial measure for the periods presented:

Three and ~~nine months ended September~~Six Months Ended June 30, ~~2022 compared~~2023, Compared to ~~three~~Three and ~~nine months ended September~~Six Months Ended June 30, ~~2021:~~2022: EBITDA and Adjusted EBITDA


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended June 30,						Six Months Ended June 30,
Description	Description	2022		2021		Change		2022		2021		Change		Description	2023		2022		Change		2023		2022		Change
		(in thousands)													(in thousands)
Net income (loss)		$	147,263	$	(39,379)	$	186,642	$	247,122	$	(130,467)	$	377,589
Net income														Net income	$	152,671	$	105,339	$	47,332	$	315,417	$	99,859	$	215,558
Depreciation, depletion, and amortization	Depreciation, depletion, and amortization	82,848		65,852		16,996		234,815		191,122		43,693		Depreciation, depletion, and amortization	99,695		77,379		22,316		194,096		151,967		42,129
Interest expense, net	Interest expense, net	6,773		4,007		2,766		15,959		11,528		4,431		Interest expense, net	6,475		4,862		1,613		14,366		9,186		5,180
Income tax expense	Income tax expense	2,572		753		1,819		3,637		9,402		(5,765)		Income tax expense	47,332		235		47,097		101,815		1,065		100,750
EBITDA	EBITDA	$	239,456	$	31,233	$	208,223	$	501,533	$	81,585	$	419,948	EBITDA	$	306,173	$	187,815	$	118,358	$	625,694	$	262,077	$	363,617
Stock-based compensation expense	Stock-based compensation expense	6,112		4,245		1,867		17,126		15,091		2,035		Stock-based compensation expense	7,965		4,201		3,764		15,143		11,014		4,129
Fleet start-up and lay-down costs	Fleet start-up and lay-down costs	7,420		—		7,420		13,174		—		13,174		Fleet start-up and lay-down costs	—		5,169		(5,169)		2,082		5,754		(3,672)
Transaction, severance and other costs		1,767		1,556		211		5,293		12,173		(6,880)
Gain on disposal of assets		(4,277)		(79)		(4,198)		(3,041)		(1,076)		(1,965)
Provision for credit losses		—		—		—		—		745		(745)
Loss (gain) on remeasurement of liability under tax receivable agreements		28,900		(4,947)		33,847		33,233		(8,252)		41,485
Gain on investments		$	(2,525)	$	—	$	(2,525)	$	(2,525)	$	—	$	(2,525)
Transaction, severance, and other costs														Transaction, severance, and other costs	985		2,192		(1,207)		1,602		3,526		(1,924)
(Gain) loss on disposal of assets														(Gain) loss on disposal of assets	(3,660)		(3,436)		(224)		(3,173)		1,236		(4,409)

Loss on remeasurement of liability under tax receivable agreements														Loss on remeasurement of liability under tax receivable agreements	—		168		(168)		—		4,333		(4,333)
Adjusted EBITDA	Adjusted EBITDA	$	276,853	$	32,008	$	244,845	$	564,793	$	100,266	$	464,527	Adjusted EBITDA	$	311,463	$	196,109	$	115,354	$	641,348	$	287,940	$	353,408

EBITDA was $~~239.5~~306.2 million for the three months ended ~~September~~June 30, ~~2022~~2023 compared to ~~$31.2~~$187.8 million for the three months ended ~~September~~June 30, ~~2021.~~2022. Adjusted EBITDA was $~~276.9~~311.5 million for the three months ended ~~September~~June 30, ~~2022~~2023 compared to ~~$32.0~~$196.1 million for the three months ended ~~September~~June 30, ~~2021.~~2022. The increases in EBITDA and Adjusted EBITDA primarily resulted from improved market conditions and increased activity levels as described above under the captions Revenue, Cost of Services, and General and Administrative ~~Expenses~~ for the Three Months Ended ~~September~~June 30, ~~2022 compared~~2023, Compared to the Three Months Ended ~~September~~June 30, ~~2021~~2022.

EBITDA was ~~$501.5~~$625.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared to ~~$81.6~~$262.1 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. Adjusted EBITDA was ~~$564.8~~$641.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared to ~~$100.3~~$287.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. The increases in EBITDA and Adjusted EBITDA primarily resulted from improved market conditions and increased activity levels as described above under the captions Revenue, Cost of Services, and General and Administrative ~~Expenses~~ for the ~~Nine months ended September~~Six Months Ended June 30, ~~2022 compared~~2023, Compared to the ~~Nine months ended September~~Six Months Ended June 30, ~~2021~~2022.

~~Table of Contents~~

Liquidity and Capital Resources

Overview

~~Historically, our~~Our primary sources of liquidity ~~to date have been~~consist of cash flows from operations, ~~proceeds from our IPO,~~ and borrowings under our ~~Credit Facilities.~~ABL Facility. We expect to fund operations and organic growth with ~~cash flows from operations and available borrowings under our Credit Facilities.~~these sources. We monitor the availability and cost of capital resources such as equity and debt financings that could be leverage for current or future financial obligations including those related to acquisitions, capital expenditures, working capital, and other liquidity requirements. We may incur additional indebtedness or issue equity in order to meet our capital expenditure activities and liquidity requirements, as well as to fund growth opportunities that we pursue, including via ~~acquisition, such as with the OneStim Acquisition and the PropX Acquisition.~~acquisition. Our primary uses of capital have been capital expenditures to support organic growth and funding ongoing operations, including maintenance and fleet ~~upgrades.~~upgrades, as well as the repurchases of, and dividends on, shares of our Class A Common Stock.

Table of Contents

Cash and cash equivalents ~~increased~~decreased by ~~$4.0~~$12.0 million to ~~$24.0~~$31.7 million as of ~~September~~June 30, ~~2022~~2023 compared to ~~$20.0~~$43.7 million as of December 31, ~~2021,~~2022, while working capital excluding cash and current liabilities under debt and lease arrangements increased ~~$224.1~~$33.4 million.

We have ~~$425.0~~$525.0 million committed under the ABL Facility subject to certain borrowing base limitations based on a percentage of eligible accounts receivable and inventory available to finance working capital needs. As of ~~September~~June 30, ~~2022,~~2023, the borrowing base was calculated to be ~~$425.0~~$485.7 million, and the Company had ~~$150.0~~$288.0 million outstanding, in addition to ~~a letter~~letters of credit in the amount of ~~$1.4~~$3.5 million, with ~~$273.6~~$194.2 million of remaining availability. ~~Additionally, we have $105.2 million borrowings remaining on the Term Loan Facility, which was originally $175.0 million.~~

The ABL Facility has a maturity date of the earlier of (a) October 22, 2026 and (b) to the extent the debt under the Term Loan Facility remains outstanding 90 days prior to the final maturity of the Term Loan Facility, which matures on September 19, 2024.

On ~~July 18, 2022,~~January 23, 2023, the Company entered into an ~~amendment~~Eighth Amendment to the ABL Facility (the ~~“Seventh~~“Eighth ABL Amendment”). The ~~Seventh~~Eighth ABL Amendment ~~amended~~amends certain terms, provisions and covenants of the ABL Facility, including, among other things: (i) increasing the maximum ~~borrowing~~revolver amount byfrom $425.0 million to $525.0 million (the “Upsized Revolver”); (ii) increasing the amount of the accordion feature from $75.0 million to ~~$425.0 million, subject~~$100.0 million; (iii) extending the maturity date from October 22, 2026 to ~~certain borrowing base limitations based on percentage~~January 23, 2028; (iv) modifying the dollar amounts of ~~eligible accounts receivable~~various credit facility triggers and ~~inventory, (ii) modifying certain covenant and reporting-related baskets, and (iii) replacing LIBOR with~~tests proportionally to the ~~secured overnight financing rate (“SOFR”) as the interest rate benchmark.~~

~~On August 12, 2022, the Company entered into an amendment to~~Upsized Revolver; (v) permitting repayment under the Term Loan Facility ~~(the “Sixth~~prior to February 10, 2023; and (vi) increasing certain indebtedness, intercompany advance, and investment baskets. The Eighth ABL Amendment also includes an agreement from Wells Fargo Bank, National Association, as administrative agent, to release its second priority liens and security interests on all collateral that served as first priority collateral under the Term Loan ~~Amendment”).The Sixth~~Facility. This release was completed during the three months ended June 30, 2023.

Additionally, on January 23, 2023, the Company borrowed $106.7 million on the ABL Facility and used the proceeds to pay off the Term Loan ~~Amendment amended certain terms, provisions and covenants~~Facility. The amount paid includes the balance of the Term Loan Facility ~~including among other things: (i)~~upon pay off of $104.7 million, $0.9 million of accrued interest, and a ~~waiver~~$1.1 million prepayment premium or 1% of the fixed charge coverage ratio requirements for up to $100.0 million of restricted payments made in connection with the Company’s 2022 stock repurchase program for its common stock; (ii) the addition of a minimum liquidity requirement of $150.0principal. Additionally, there were $0.2 million in ~~order to make selected restricted payments, including those made under the 2022 stock repurchase program; (iii) the modification of certain covenant~~bank and ~~reporting-related terms, including an increase~~legal fees included in the allowance for permitted purchase money indebtedness from $50.0 million to $70.0 million; (iv) the addition of a prepayment premium of 1.0% through the first anniversary of the Sixth Term Loan Amendment effective date; and (v) the addition and modification of several provisions to replace LIBOR with SOFR as the interest rate benchmark.pay off.

The ~~Credit Facilities contain~~ABL Facility contains covenants that restrict our ability to take certain actions. At ~~September~~June 30, ~~2022,~~2023, the Company was in compliance with all debt covenants.

See Note 87—Debt to the unaudited condensed consolidated financial statements ~~included~~ in ~~“Item 1. Financial Statements (unaudited)”~~Part I, Item 1 of this Quarterly Report for further details.

We have no material off balance sheet arrangements as of ~~September~~June 30, ~~2022,~~2023, except for purchase commitments under supply agreements as disclosed above under ~~“Item 1. Financial Statements—~~Note ~~15—~~14—Commitments & ~~Contingencies.”~~Contingencies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report. As such, we are not materially exposed to any other financing, liquidity, market, or credit risk that could arise if we had engaged in such financing arrangements.

Share Repurchase Program

Under our share repurchase program, the Company is authorized to repurchase up to $250.0 million of outstanding Class A Common Stock through and including July 31, 2024. Additionally, on January 24, 2023 the Board authorized and the Company announced an increase to the share repurchase program that increased the Company’s cumulative repurchase authorization to $500.0 million. Shares may be repurchased from time to time for cash in the open market transactions, through block trades, in privately negotiated transactions, through derivative transactions or by other means in accordance with applicable federal securities laws. The timing and the amount of repurchases will be determined by the Company at its discretion based on an evaluation of market conditions, capital allocation alternatives and other factors. The share repurchase program does not require us to purchase any dollar amount or number of shares of our Class A Common Stock and may be modified, suspended, extended or terminated at any time without prior notice. The Company expects to fund the repurchases by using cash on hand, borrowings under its revolving credit facility and expected free cash flow to be generated over the next two years. During the three and six months ended June 30, 2023, the Company repurchased and retired shares of Class A Common Stock for $60.1 million and $134.7 million, respectively, under the share repurchase program.

3029

Table of Contents

Cash Flows

The following table summarizes our cash flows for the periods indicated:


		Nine Months Ended September 30,							Six Months Ended June 30,
Description	Description	2022		2021		Change		Description	2023		2022		Change
		(in thousands)							(in thousands)
Net cash provided by operating activities	Net cash provided by operating activities	$	292,610	$	80,142	$	212,468	Net cash provided by operating activities	$	444,388	$	135,629	$	308,759
Net cash used in investing activities	Net cash used in investing activities	(333,875)		(119,319)		(214,556)		Net cash used in investing activities	(356,296)		(232,824)		(123,472)
Net cash provided by financing activities		45,642		5,149		40,493
Net cash (used in) provided by financing activities								Net cash (used in) provided by financing activities	(100,207)		118,758		(218,965)

Analysis of Cash Flow Changes Between the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022

Operating Activities. Net cash provided by operating activities was $~~292.6~~444.4 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, compared to ~~$80.1~~$135.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. The ~~$212.5~~$308.8 million increase in cash from operating activities is primarily attributable to a $~~1.1 billion~~721.7 million increase in revenues, offset by a ~~$679.6~~$366.8 million increase in cash operating expenses and a $~~238.5~~79.4 million decrease in cash from changes in working capital for the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, compared to a ~~$2.8~~$134.3 million ~~increase~~decrease in cash from changes in working capital for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

Investing Activities. Net cash used in investing activities was ~~$333.9~~$356.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, compared to ~~$119.3~~$232.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. Cash used in investing activities was higher during the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 as the Company continued to invest in equipment, including ~~building~~the new ~~digiFrac™ fleets and deploying additional fleets,~~digiTechnologies™ suite, to support increased customer demand in next generation equipment and technology. Additionally, the Company purchased Siren Energy for $74.9 million in cash, net of cash received, refer to Note 2—Significant Accounting Policies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for additional information related to the acquisition.

Financing Activities. Net cash ~~provided by~~used in financing activities was ~~$45.6~~$100.2 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, compared to net cash provided by financing activities of ~~$5.1~~$118.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. The ~~$40.5~~$219.0 million ~~increase~~change in cash ~~provided by~~ financing activities was primarily due to ~~net borrowings~~$134.7 million of $132.0 million on the ABL Facility during the nine months ended September 30, 2022, compared to $16.0 million net borrowings on the ABL Facility for the nine months ended September 30, 2021. Additionally, there was a $1.4 million decrease in payments on finance lease liabilities as the asset value of finance leases active for the full period has decreased since September 30, 2021. These changes were offset by a $70.1 million increase in cash payments made in connection with share repurchases for the ~~nine~~six months ended ~~September~~June 30, 2023, compared to none in the six months ended June 30, 2022 as the Company reinstated the share buyback program since the prior year period. Additionally, the Company reinstated quarterly dividends during the fourth quarter of 2022 resulting in a $17.4 million increase in dividends paid. Net borrowings of $68.3 million on the Credit Facilities, including the $104.7 million pay off of the Term Loan Facility, were lower during the six months ended June 30, 2023, compared to ~~cash payments~~net borrowings of ~~$0.0~~$132.0 million of net borrowings on the ABL Facility for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

Cash Requirements

Our material cash commitments consist primarily of obligations under long-term debt, TRAs, finance and operating leases for property and equipment, cash used to pay for repurchases of, and dividends on, shares of our Class A Common Stock, and purchase obligations as part of normal operations. We have no material off balance sheet arrangements as of ~~September~~June 30, ~~2022,~~2023, except for obligations of ~~$44.5~~$134.6 million payable within ~~2022, $47.3 million in~~ 2023, and ~~$4.2~~$70.8 million payable thereafter. See Note 1514—Commitments & Contingencies to the unaudited condensed consolidated financial statements ~~included~~ in ~~“Item 1. Financial Statements (Unaudited)”~~Part I, Item 1 of this Quarterly Report for information regarding scheduled contractual obligations. There have been no other material changes to cash requirements since the year ended December 31, ~~2021.~~2022.

Income Taxes

The Company is a corporation and is subject to U.S. federal, state, and local income tax on its share of Liberty LLC’s taxable income. The Company is also subject to Canada federal and provincial income tax on its foreign operations.

The ~~combined~~ effective global income tax rate applicable to the Company for the ~~nine~~six months ended ~~September~~June 30, ~~2022 and 2021~~2023 was ~~1.5% and (7.8)%~~24.4% compared to 1.1%, ~~respectively.~~for the period ended June 30, 2022. The Company’s effective tax rate is ~~significantly less~~greater than the statutory federal ~~statutory~~ income tax rate of 21.0% due to the Company recording a valuation allowance on its U.S. net deferred tax assets as of September 30, 2022, due to entering into a three year cumulative pre-tax book loss position, primarily as a result of COVID-19 related lossesCompany’s Canadian operations, state income taxes in ~~2021. The Company’s effective tax rate is also less than~~ the statutory rate because of foreign operations for 2021, and the non-controlling interest’s share of Liberty LLC’s pass-through results for federal, state and local income tax reporting, upon which no taxes are payable bystates the Company ~~for the nine months ended September 30, 2022 and 2021.~~operates, as well as nondeductible executive compensation. The Company recognized an income tax expense of ~~$2.6~~$47.3 million and ~~$3.6~~$101.8 million during the three and six months ended June 30, 2023, respectively, and $0.2 million and $1.1 million for the three and ~~nine~~six months ended ~~September~~June 30, 2022, respectively, and $0.8 million and $9.4 million for the three and nine months ended September 30, 2021, respectively, which included the impact of recording a valuation allowance on a portion of the Company’s net deferred tax assets.

Per the Coronavirus Aid, Relief and Economic Security (“CARES”) Act enacted on March 27, 2020, net operating losses (“NOL”) incurred in 2019, and 2020 may be carried back to each of the five preceding taxable years to generate a refund of

~~Table of Contents~~

previously paid income taxes. The Company has previously applied for and expects to receive a NOL carryback refund to recover $5.5 million of cash taxes paid by the Company in 2018. This amount has been reflected as a receivable in the prepaids and other current assets line item in the accompanying audited consolidated balance sheets.respectively.

Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial reporting and tax bases of assets and liabilities, and are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. ~~We recorded a valuation allowance in~~In the ~~second quarter of 2021, against all of our deferred tax assets as of~~year ended December 31, ~~2020 and continue to record~~2022, we released a ~~valuation allowance for the quarter ended September 30, 2022. We intend to continue to maintain a full~~ valuation allowance on our U.S. net deferred tax assets. As of June 30, 2023, the Company’s net deferred

Table of Contents

tax assets ~~until there is sufficient evidence to support the reversal~~were primarily comprised of ~~all or some portion~~federal and state U.S. Net Operating Losses (“NOLs”) and TRA tax attributes, net of ~~these allowances. However, given our current earnings~~Property and anticipated future earnings, we believe that there is a reasonable possibility that within the next few quarters, including as soon as the fourth quarter of 2022, sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion or all of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certainequipment deferred tax assets and a decrease to the income tax expense for the period the release is recorded. In addition, release of the valuation allowance would result in an increase in the tax receivable agreement liability and an increase in the tax receivable agreement loss for the period the release is recorded. For the quarter ended September 30, 2022, the unrecognized TRA liability is approximately $50 million. The valuation allowance as of December 31, 2021 was $91.3 million and no additional income tax benefit or expense has been recorded as a result of the valuation allowance through the quarter ended September 30, 2022.liabilities.

Refer to Note ~~12—~~11— Income Taxes to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for additional information related to income tax expense.

Tax Receivable Agreements

Critical Accounting Estimates

The Company’s unaudited condensed consolidated financial statements are prepared in accordance with GAAP, which require us to make estimates and assumptions (see Note 2—Significant Accounting Policies to the unaudited condensed consolidated financial statements in this ~~Form 10-Q~~Quarterly Report and Note 2—Significant Accounting Policies and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Annual Report). A critical accounting estimate is one that requires our most difficult, subjective or complex estimates and assessments and is fundamental to our results of operations. We base our estimates on historical experience and on various other assumptions we believe to be reasonable according to the current facts and circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

There have been no material changes in our evaluation of our critical accounting policies and estimates since our Annual Report.

3231

Table of Contents

Item 3. Quantitative and Qualitative Disclosure about Market Risk

Our consolidated financial statements are expressed in U.S. dollars, but, effective January 1, 2021, a portion of our operations is conducted in a currency other than U.S. dollars. The Canadian dollar is the functional currency of the Company’s foreign subsidiary as it is the primary currency within the economic environment in which the subsidiary operates. Changes in the exchange rate can affect our revenues, earnings, and the carrying value of our assets and liabilities in our consolidated balance sheet, either positively or negatively. Adjustments resulting from the translation of the subsidiary’s financial statements are reported in other comprehensive income (loss). For the three and ~~nine~~six months ended ~~September~~June 30, 2023, the Company recorded foreign currency translation gain of $2.0 million and $1.5 million, respectively, to comprehensive income. For the three and six months ended June 30, 2022, the Company recorded foreign currency translation losses ~~to comprehensive income~~ of ~~$6.3~~$3.0 million and $8.3 million, respectively. For the three and nine months ended September 30, 2021, the Company recorded a foreign currency translation loss of $2.3 million and a foreign currency translation gain of $0.4$2.0 million, respectively, to comprehensive ~~loss.~~income.

Other exposures to market risk have not changed materially since December 31, ~~2021.~~2022. For quantitative and qualitative disclosures about market risk, in addition to foreign currency translation, see Part II, Item 7(a), “Quantitative and Qualitative Disclosures About Market Risk,” in the Annual Report.

Item 4. Controls and Procedures

In accordance with Rules 13a-15 and 15d-15 of the Exchange Act, we carried out an evaluation, under the supervision and with the participation of management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of ~~September~~June 30, ~~2022~~2023 to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Our disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures.

Changes in Internal Control over Financial Reporting

During the quarter ended ~~September~~June 30, ~~2022,~~2023, we integrated accounting functions of the ~~entities~~entity acquired in the ~~PropX~~Siren Acquisition, on ~~October 26, 2021.~~April 6, 2023. In connection with the integration, we updated documentation of our internal controls over financial reporting, as necessary, to reflect modifications to business processes and accounting procedures impacted.

There were no other changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended ~~September~~June 30, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

3332

Table of Contents

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

Information relating to legal proceedings is described in Note 1514 to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report, and the information discussed therein is incorporated by reference into this Part II, Item 1.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in the Annual Report and the risk factors and other cautionary statements contained in our other SEC filings, which could materially affect our businesses, financial condition or future results.

~~The~~No other risk factors ~~below are~~were identified in addition to the risk factors set forth in the Annual Report. There have been no ~~other~~ material changes to the risk factors in the Annual Report.

~~The ongoing military action between Russia and Ukraine could adversely affect our business, financial condition and results of operations.~~

In February of 2022, Russian military forces invaded Ukraine, and sustained conflict and disruption in the region is likely. Although the length, impact and outcome of the ongoing military conflict in Ukraine is highly unpredictable, this conflict could lead to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, higher inflation, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as increase in cyberattacks and espionage. As a result of the invasion and ongoing military conflict, governments in the European Union, the United States, the United Kingdom, Switzerland and other countries have implemented and may implement additional sanctions, export controls or other measures against Russia, Belarus and other countries, regions, officials, individuals or industries in the respective territories. Such sanctions, and other measures, as well as the existing and potential further responses from Russia or other countries to such sanctions, supply chain disruptions, tensions and military actions, could adversely affect the global economy and financial markets and could adversely affect our business, financial condition and results of operations, and could also aggravate the other risk factors that we identify herein.

~~The choice of forum provisions in our charter and bylaws could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.~~

Our Amended and Restated Certificate of Incorporation (as amended, the “Charter”) provides that unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim against the Company or any director or officer or other employee of the Company arising pursuant to any provision of the General Corporation Law of the State of Delaware, the Charter or the Company’s bylaws, or (iv) any action asserting a claim against the Company or any director or officer or other employee of the Company governed by the internal affairs doctrine, in each such case subject to Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. Our Second Amended and Restated Bylaws (the “Bylaws”) further provide that unless the Company consents in writing to the selection of an alternative forum, the federal district courts of the United States of America will be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933 (the “Securities Act”). Under the Securities Act, federal and state courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and stockholders cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act. Any person or entity purchasing or otherwise acquiring any interest in shares of common stock of the Company will be deemed to have notice of and have consented to the provisions of our Charter and Bylaws related to choice of forum. The choice of forum provisions in our Charter and Bylaws may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us. Additionally, the enforceability of choice of forum provisions in other companies’ governing documents has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our Charter and Bylaws to be inapplicable or unenforceable in such action. If so, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.

~~Table of Contents~~

~~There can be no assurance that we will repurchase shares of our Class A Common Stock in any particular amounts.~~

The stock markets in general have experienced substantial price and trading fluctuations, which have resulted in volatility in the market prices of securities that often are unrelated or disproportionate to changes in operating performance. These broad market fluctuations may adversely affect the trading price of our Class A Common Stock. Price volatility over a given period may also cause the average price at which we repurchase our own Class A Common Stock to exceed the stock’s price at a given point in time. In addition, significant changes in the trading price of our Class A Common Stock and our ability to access capital on terms favorable to us could impact our ability to repurchase shares of our Class A Common Stock. The timing and amount of any repurchases will be determined by the Company’s management based on its evaluation of market conditions, capital allocation alternatives and other factors beyond our control. Our share repurchase program may be modified, suspended, extended or terminated by the Company at any time and without notice.

The ability or willingness of OPEC and other oil exporting nations to set and maintain production levels and/or the impact of sanctions on Russia related to the war in Ukraine may have a significant impact on natural gas commodity prices.

The Organization of Petroleum Exporting Countries and their allies (collectively, OPEC+), is an intergovernmental organization that seeks to manage the price and supply of oil on the global energy market. Actions taken by OPEC+ members, including those taken alongside other oil exporting nations, have a significant impact on global oil supply and pricing. For example, OPEC+ and certain other oil exporting nations have previously agreed to take measures, including production cuts, to support crude oil prices. In March 2020, members of OPEC+ considered extending and potentially increasing these oil production cuts, however these negotiations were unsuccessful. As a result, Saudi Arabia announced an immediate reduction in export prices and Russia announced that all previously agreed oil production cuts expired on April 1, 2020. These actions led to an immediate and steep decrease in oil prices. Conversely, sanctions imposed on Russia in the last few months have increased prices. In October 2022, OPEC+ again determined to reduce production of oil, by approximately 2 million barrels per day. OPEC+ will hold its next meeting on December 4, 2022, and future steps to be taken by OPEC+ with respect to the supply of oil are uncertain. There can be no assurance that OPEC+ members and other oil exporting nations will agree to future production cuts or other actions to support and stabilize oil prices, nor can there be any assurance that sanctions or other global conflicts will not further impact oil prices. Uncertainty regarding future sanctions or actions to be taken by OPEC+ members or other oil exporting countries could lead to increased volatility in the price of oil and natural gas, which could adversely affect our business, future financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Share Repurchase Program

The following sets forth information with respect to our repurchases of shares of Class A Common Stock during the three months ended ~~September~~June 30, ~~2022:~~2023:
Period Total number of shares purchased Average price paid per share (2) Total number of shares purchased as part of publicly announced plans or programs (1) Approximate dollar value of shares that may yet be purchased under the plans or programs
July 1 - July 31 — — — 250,000,000
August 1 - August 31 3,196,002 15.08 3,196,002 201,792,691
September 1 - September 31 1,506,164 14.47 1,506,164 180,000,041
Total 4,702,166 14.89 4,702,166 180,000,041


Period	Total number of shares purchased	Average price paid per share (2)		Total number of shares purchased as part of publicly announced plans or programs (1)	Approximate dollar value of shares that may yet be purchased under the plans or programs (1)
April 1, 2023 - April 30, 2023	1,148,730	$	13.06	1,148,730	$	285,212,228
May 1, 2023 - May 31, 2023	2,755,749	$	12.34	2,755,749	$	251,212,383
June 1, 2023 - June 30, 2023	817,778	$	13.45	817,778	$	240,212,453
Total	4,722,257	$	12.71	4,722,257	$	240,212,453

(1) On July 25, 2022, the ~~Company’s~~ Board ~~of Directors~~ authorized and the Company announced a share repurchase program that allows the Company to repurchase up to $250.0 million of the Company’s Class A Common Stock beginning immediately and continuing through and including July 31, 2024. Additionally, on January 24, 2023, the Board authorized and the Company announced an increase to the share repurchase program that increased the Company’s cumulative repurchase authorization to $500.0 million. All amounts give effect to such increase. The shares may be repurchased from time to time in open market or privately negotiated transactions or by other means in accordance with applicable state and federal securities laws.

(2) The average price paid per share of ~~$14.89~~$12.71 was calculated excluding commissions.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Our mining operations are subject to regulation by the federal Mine Safety and Health Administration under the Federal Mine Safety and Health Act of 1977. Information concerning mine safety violations or other regulatory matters required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K is included in Exhibit 95 to this report.

~~Table of Contents~~

Item 5. Other Information

None.

3633

Table of Contents

Item 6. Exhibits

The exhibits required to be filed by Item 6 are set forth in the Exhibit Index included below.

INDEX TO EXHIBITS

Exhibit

Number

Description

2.1

Master Transaction Agreement, dated as of August 31, 2020, by and among Schlumberger Technology Corporation Limited, Liberty Oilfield Services New HoldCo LLC, LOS Canada Operations Inc. and Liberty Oilfield Services Inc. (1)

3.1

Amended and Restated Certificate of Incorporation of Liberty Oilfield Services Inc. (2)

3.2

Certificate of Amendment to Amended and Restated Certificate of Incorporation (3)

3.3

Second Amended and Restated Bylaws of Liberty Energy Inc. ~~(3)~~

~~4.1~~

Amended and Restated Stockholders Agreement, dated as of December 31, 2020, by and among Liberty Oilfield Services Inc., R/C IV Liberty Oilfield Services Holdings, L.P., R/C Energy IV Direct Partnership, L.P. and Schlumberger(4)

~~10.1~~

Increase Joinder and Seventh Amendment to Credit Agreement, dated July 18, 2022, by and among Liberty Oilfield Services LLC, Liberty Energy Inc., Liberty Oilfield Services New Holdco LLC, R/C IV Non-U.S. LOS Corp, Freedom Proppant LLC, LOS Kermit LLC, LOS Leasing Company LLC, LOS Cibolo RE Investments, LLC, LOS Odessa RE Investments, LLC, Proppant Express Solutions, LLC, ST9 Gas and Oil LLC, Well Fargo Bank, National Association, as Administrative Agent, and the lenders signatory thereto. *

~~10.2~~

Sixth Amendment to Credit Agreement, dated August 12, 2022, by and among Liberty Oilfield Services LLC, Liberty Energy Inc., Liberty Oilfield Services New Holdco LLC, R/C IV Non-U.S. LOS Corp, LOS Cibolo RE Investments, LLC, LOS Odessa RE Investments, LLC, ST9 Gas and Oil LLC, Freedom Proppant LLC, LOS Kermit LLC, LOS Leasing Company LLC, Proppant Express Solutions, LLC, U.S. Bank National Association, as Administrative Agent, and the lenders signatory thereto. *

31.1

Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) *

31.2

Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) *

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **

Mine Safety Disclosure *

101.INS

XBRL Instance Document *

101.SCH

XBRL Taxonomy Extension Schema Document *

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document *

101.LAB

XBRL Taxonomy Extension Label Linkbase Document *

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document *

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document *

(1)

Incorporated by reference to the registrant’s Current Report on Form 8-K, filed on September 1, 2020.

(2)

Incorporated by reference to the registrant’s Current Report on Form 8-K, filed on January 18, 2018.

(3)

Incorporated by reference to the registrant’s Current Report on Form 8-K, filed on April 21, 2022.

(4)

Incorporated by reference to the registrant’s Current Report on Form 8-K, filed on January ~~4, 2021.~~26, 2023.

Filed herewith.

Furnished herewith.

3734

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


			Signature
			/s/ Christopher A. Wright
Date:	~~October 20, 2022~~July 21, 2023	By:	Christopher A. Wright
			Chief Executive Officer (Principal Executive Officer)

			/s/ Michael Stock
Date:	~~October 20, 2022~~July 21, 2023	By:	Michael Stock
			Chief Financial Officer (Principal Financial Officer)

			/s/ Ryan T. Gosney
Date:	~~October 20, 2022~~July 21, 2023	By:	Ryan T. Gosney
			Chief Accounting Officer (Principal Accounting Officer)

3835


($ in thousands)
Remainder of 2022	$	4,126
2023	16,704
2024	9,218
2025	1,051
2026	—
Thereafter	—
Total	$	31,099