What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-02-09 compared with 2023-02-10 · 322 added, 408 removed, 848 unchanged (46% of the section changed)

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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.

There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

During the year ended December 31, 2023, we integrated accounting functions of the entity acquired in the Siren Acquisition on 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 to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

See page F-1 for Management’s Report on Internal Control Over Financial Reporting and page F-4 for Report of Independent Registered Public Accounting Firm on its assessment of our internal control over financial reporting.

Other Information

On December 4, 2023 , Michael Stock , our Chief Financial Officer , adopted a trading plan intended to satisfy Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended, providing for the potential sale of up to 200,000 shares of our Class A common stock between March 4, 2024 and December 31, 2024, which shares were acquired by vesting of compensatory restricted stock units.

On December 13, 2023 , Chris Wright , our Chairman of the Board and Chief Executive Officer , adopted a trading plan intended to satisfy Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended, providing for the potential sale of up to 240,000 shares of our Class A common stock between March 18, 2024 and August 16, 2024, which shares were acquired by vesting of compensatory restricted stock units.

During the quarter ended December 31, 2023, none of our directors or Section 16 officers, other than Mr.

Wright and Mr.

Stock, informed us of the adoption , modification, or termination of any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (in each case, as defined in Item 408(a) of Regulation S-K).

Directors, Executive Officers and Corporate Governance

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Executive Compensation

The information required by this item concerning executive compensation is incorporated herein by reference to our definitive proxy statement for our 2023 annual meeting of stockholders, which will be filed with the SEC no later than 120 days after December 31, 2022, under the captions “The Board and its Committees,” “Compensation Discussion & Analysis,” “Compensation Committee Report,” “Executive Compensation Tables,” “Director Compensation,” “Pay versus Performance” and “CEO Pay Ratio.”

The information required by this item concerning executive compensation is incorporated herein by reference to our definitive proxy statement for our 2023 annual meeting of stockholders, which will be filed with the SEC no later than 120 days after December 31, 2023, under the captions “The Board and its Committees,” “Compensation Discussion & Analysis,” “Compensation Committee Report,” “Executive Compensation Tables,” “Director Compensation,” and “CEO Pay Ratio,” except for the information required by Item 402(v) of Regulation S-K, which is specifically not incorporated by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

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3.3 Second Amended and Restated Bylaws of Liberty Energy Inc., as amended effective January 24, 2023 (17)

4.1 Amended and Restated Stockholders Agreement, dated as of December 31, 2020, by and among Liberty Oilfield Services Inc., Riverstone and the Schlumberger Parties (12)

4.1 Description of the Registrant’s Securities Registered pursuant to Section 12 of the Securities Exchange Act of 1934.

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10.2 Form of Joinder Agreement to Second Amended and Restated Limited Liability Company Operating Agreement of Liberty Oilfield Services New HoldCo LLC (12)

10.3 Registration Rights Agreement, dated October 26, 2021, by and among Liberty Oilfield Services Inc.

and the other parties named therein (15)

10.3 Tax Receivable Agreement, dated January 17, 2018, by and among Liberty Oilfield Services Inc., R/C Energy IV Direct Partnership, L.P., and R/C Energy IV Direct Partnership, L.P., as agent (2)

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and R/C Energy IV Direct Partnership, L.P.

10.7 Amended and Restated Registration Rights Agreement, dated as of December 31, 2020, by and among Liberty Oilfield Services Inc., the Schlumberger Parties, and the Holders (12)

10.6 Liberty Oilfield Services Inc.

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10.16 Joinder Agreement, dated December 31, 2021, by and among LOS Leasing Company LLC and Wells Fargo Bank, National Association, as Administrative Agent (16)

10.19 Credit Agreement, dated September 19, 2017, by and among Liberty Oilfield Services LLC and LOS Acquisition CO I LLC, each as Borrower, Liberty Oilfield Services Holdings LLC, as Parent Guarantor and U.S.

Bank National Association as Agent (1)

10.20 Amendment and Joinder to Credit Agreement, dated January 17, 2018, by and among Liberty Oilfield Services Holdings LLC, Liberty Oilfield Services LLC, LOS Acquisition Co I LLC, Liberty Oilfield Services Inc., Liberty Oilfield Services New Holdco LLC, U.S.

Bank National Association, as Administrative Agent, and the lenders signatory thereto (4)

10.21 Second Amendment and Joinder to Credit Agreement, dated March 21, 2018, by and among Liberty Oilfield Services LLC, LOS Acquisition Co I LLC, Liberty Oilfield Services Inc., Liberty Oilfield Services New Holdco LLC, R/C IV Non-U.S.

LOS Corp, U.S.

Bank National Association, as Administrative Agent, and the lenders signatory thereto (4)

10.22 Third Amendment to Credit Agreement, dated August 12, 2020, by and among Liberty Oilfield Services LLC, Liberty Oilfield Services Inc., Liberty Oilfield Services New Holdco LLC, R/C IV Non-U.S.

LOS Corp, U.S.

Bank National Association, as Administrative Agent, and the lenders signatory thereto (10)

10.23 Waiver, Consent and Fourth Amendment to Credit Agreement and First Amendment to Guaranty and Security Agreement, dated December 29, 2020, by and among Liberty Oilfield Services LLC, Liberty Oilfield Services 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, U.S.

Bank National Association, as Administrative Agent, and the lenders signatory thereto (13)

10.24 Fifth Amendment to Credit Agreement, Second Amendment to Guaranty and Security Agreement and Termination of Right of First Offer Letter, dated October 22, 2021, by and among Liberty Oilfield Services LLC, Liberty Oilfield Services 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, LOS Solar Acquisition LLC, Freedom Proppant LLC, LOS Kermit LLC, U.S.

Bank National Association, as Administrative Agent, and the lenders signatory thereto (15)

10.25 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.

10.26 Seventh Amendment to Credit Agreement, dated November 4, 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.

10.27 First Amendment to Amended and Restated Registration Rights Agreement, dated as of December 1, 2022, by and between Liberty Energy Inc.

and Schlumberger Technology Corporation.

10.17 Liberty Oilfield Services 401(k) Savings Plan (11)†

5 unchanged sentences

10.22 Form of Indemnification Agreement between the Company and each of its Directors and Executive Officers (8)

19.1 Insider Trading Policy *

21.1 List of subsidiaries of Liberty Energy Inc.

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95 Mine Safety Disclosure *

97 Compensation Recovery Policy *

101.INS XBRL Instance Document *

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

(3) Incorporated by reference to the exhibits to the registrant’s Amendment No.

1 to the Current Report on Form 8-K/A, filed on January 22, 2018.

(3) Incorporated by reference to the exhibits to the registrant’s Annual Report on Form 10-K, filed on March 23, 2018.

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

(12) Incorporated by reference to the exhibits to the registrant’s Current Report on Form 8-K, filed on January 4, 2021.

(11) Incorporated by reference to the exhibits to the registrant’s Annual Report on Form 10-K, filed on February 24, 2021.

(14) Incorporated by reference to the exhibits to the registrant’s Current Report on Form 8-K, filed on June 10, 2021.

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

(12) Incorporated by reference to the exhibits to the registrant’s Quarterly Report on Form 10-Q, filed on October 28, 2021.

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

(17) Incorporated by reference to the registrant’s Current Report on Form 8-K, filed on August 17, 2022.

(14) Incorporated by reference to the registrant’s Current Report on Form 8-K, filed on July 22, 2022.

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(16) Incorporated by reference to the exhibits to the registrant’s Annual Report on Form 10-K, filed on February 22, 2022.

(21) Incorporated by reference to the registrant’s Current Report on Form 8-K, filed on January 26, 2023.

(17) Incorporated by reference to the exhibits to the registrant’s Current Report on Form 8-K, filed on January 26, 2023.

* Filed herewith.

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The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Income Taxes — Tax Receivable Agreements — Refer to Note 12 to the financial statements

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Property and equipment — Determination of Impairment Indicators — Refer to Note 2 to the financial statements

Critical Audit Matter Description

The amounts payable, as well as the timing of such payments, under the tax receivable agreements (“TRAs”) are dependent upon significant future events and assumptions, including among others:

(i) the amount of the redeeming unit holder’s tax basis in its Liberty Oilfield Services New HoldCo LLC class B units at the time of the relevant redemption, (ii) the characterization of the tax basis step-up, (iii) the depreciation and amortization periods that apply to the increase in tax basis (iv), the amount and timing of taxable income the Company generates in the future (v) the U.S.

federal income tax rate then applicable, and (vi) the portion of the Company’s payments under the TRAs that constitute imputed interest or give rise to depreciable or amortizable tax basis.

During the year ended December 31, 2022, exchanges of Liberty Oilfield Services New HoldCo LLC class B units and shares of Class B Common Stock resulted in an increase of $5.1 million in amounts payable pursuant to tax receivable agreements (“TRA payable”), and a net increase of $6.0 million in deferred tax assets, all of which were recorded as equity

transactions, with no impact to the statement of operations.

Upon the release of the valuation allowance, the Company recorded a loss on remeasurement of the TRA payable of $76.2 million recorded as part of continuing operations in the current year.

At December 31, 2022, the Company’s TRA payable was $118.9 million, all of which is presented as a component of long-term liabilities.

We identified the computation of adjustments to the TRA payable as a critical audit matter because of the multiple owners and complex calculations required to arrive at the correct tax basis upon which to calculate the corresponding TRA payable adjustment.

This involved complexity in applying relevant tax law and an increased extent of effort, including the need to involve income tax specialists, when performing audit procedures to evaluate the reasonableness of management’s calculation of tax basis, iterative impact of the computation of adjustments to the TRA payable, and TRA payable as of year-end.

As described in Note 2 to the consolidated financial statements, the Company assesses its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, referred to as triggering events.

Possible indications of impairment may include events or changes in circumstances affecting the manner in which the assets are being used, historical and estimated future profitability measures, and other adverse events or changes that could affect the value of the assets.

If a triggering event is identified, the Company evaluates its property and equipment for impairment by comparing undiscounted future cash flows expected to be generated over the life of the assets to the respective carrying amount.

If the carrying amount of the assets exceeds the undiscounted future cash flows, an analysis is performed to determine the fair value of the assets.

We identified the evaluation of property and equipment for impairment triggering events as a critical audit matter.

The Company makes assumptions to evaluate property and equipment for possible indications of impairment.

Changes in these assumptions could have a significant impact on the assets identified for further analysis.

For the year ended December 31, 2023, the Company concluded that no triggering events had occurred, and no impairment was recognized.

Given the Company’s evaluation of possible indications of impairment of property and equipment requires management to make assumptions, performing audit procedures to evaluate whether management appropriately identified events or

changes in circumstances indicating that the carrying amounts of property and equipment may not be recoverable required a high degree of auditor judgment.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the computation of adjustments to the TRA payable included the following, among others:

• We tested the effectiveness of controls over the computation of adjustments to the TRA payable, including management’s calculation of the step-up in tax basis that serves as the basis for the computation of adjustments to the TRA payable.

• With the assistance of our income tax specialists, we read the individual TRAs and compared the terms in the agreements for consistency with the mathematical model used by management to calculate the adjustments to the TRA payable.

• With the assistance of our income tax specialists, we evaluated management’s computation of adjustments to the TRA payable, and the TRA payable as of year-end that is payable over the contractual period by comparing to our independently recalculated value, taking into account the various class B unit exchanges for Class B Common Stock occurring during the year as well as the adjustments in the TRA payable for each exchange.

Our audit procedures related to the evaluation of property and equipment for possible indications of impairment included the following, among others:

• We tested the effectiveness of internal controls over financial reporting related to management’s evaluation of impairment.

This included controls related to the Company’s process to identify and evaluate triggering events, including the consideration of forecasted to actual results and market conditions in determining whether a triggering event exists.

• We considered the completeness of management’s identification of impairment indicators by:

◦ Considering industry and analysts reports and the impact of macroeconomic factors, such as adverse changes in the regulatory environment, legislation or other factors that may represent impairment indicators not previously contemplated in management’s analysis.

◦ Inspecting minutes of the board of directors and committees to understand if there were factors that would represent potential impairment indicators for property and equipment.

◦ Developing an independent expectation of impairment indicators and compared such expectation to management’s analysis.

• We evaluated management’s determination of the property and equipment’s estimated useful life as well as any factors impacting the useful life, such as plans to sell and any relevant purchase and sales agreements for assets sold.

/s/ DELOITTE & TOUCHE LLP

Denver, Colorado

February 8, 2024

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We have audited the internal control over financial reporting of Liberty Energy Inc.

and subsidiaries (the “Company”) as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

(the “Company”) as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

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Cash and cash equivalents $ 36,784 $ 43,676

Accounts receivable—trade, net of allowances for credit losses of $ 884 and $ 884 , respectively

Accounts receivable, net of allowances for credit losses of $ 939 and $ 884 , respectively

381,185 410,308

Accounts receivable—related party 17,345 —

Unbilled revenue (including amounts from related parties of $ 13,379 and $ 13,854 , respectively)

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261,066 280,678

Deferred revenue 3,859 4,552

Income taxes payable 12,060 2,294

Current portion of payable pursuant to tax receivable agreements 5,170 —

Current portion of long-term debt, net of discount of $ 0 and $ 730 , respectively

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Class A, $ 0.01 par value, 400,000,000 shares authorized and 166,610,199 issued and outstanding as of December 31, 2023 and 178,753,125 issued and outstanding as of December 31, 2022

Class B, $ 0.01 par value, 400,000,000 shares authorized and 250,222 issued and outstanding as of December 31, 2022 and 2,632,347 issued and outstanding as of December 31, 2021

Class B, $ 0.01 par value, 400,000,000 shares authorized and none issued and outstanding as of December 31, 2023 and 250,222 issued and outstanding as of December 31, 2022

Additional paid in capital 1,093,498 1,266,097

Retained earnings (accumulated deficit) 234,525 ( 155,954 )

Retained earnings 752,328 234,525

Accumulated other comprehensive loss ( 6,084 ) ( 7,396 )

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Depreciation, depletion, and amortization 421,514 323,028 262,757

(Gain) loss on disposal of assets ( 4,603 ) 779 ( 411 )

(Gain) loss on disposal of assets, net ( 6,994 ) ( 4,603 ) 779

Total operating costs and expenses 3,987,349 3,653,338 2,652,006

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Other expense (income):

Loss (gain) on remeasurement of liability under tax receivable agreements 76,191 ( 19,039 ) —

(Gain) loss on remeasurement of liability under tax receivable agreements ( 1,817 ) 76,191 ( 19,039 )

Gain on investments — ( 2,525 ) —

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Net income (loss) before income taxes 734,890 399,509 ( 177,788 )

Income tax (benefit) expense ( 793 ) 9,216 ( 30,857 )

Income tax expense (benefit) 178,482 ( 793 ) 9,216

Net income (loss) 556,408 400,302 ( 187,004 )

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Net income (loss) $ 556,408 $ 400,302 $ ( 187,004 )

Other comprehensive loss

Foreign currency translation ( 7,097 ) ( 102 ) —

Other comprehensive income (loss)

Foreign currency translation adjustments 1,313 ( 7,097 ) ( 102 )

Comprehensive income (loss) $ 557,721 $ 393,205 $ ( 187,106 )

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

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, 2022 178,753 250 $ 1,788 $ 3 $ 1,266,097 $ 234,525 $ ( 7,396 ) $ 1,495,017 $ 2,289 $ 1,497,306

1 unchanged sentence

Offering Costs — — — — ( 223 ) — — ( 223 ) — ( 223 )

Effect of exchange on deferred tax asset, net of liability under tax receivable agreements — — — — 3,757 — — 3,757 — 3,757

Deferred tax impact of ownership changes from issuance of Class A Common Stock — — — — ( 9,879 ) — — ( 9,879 ) — ( 9,879 )

Deferred tax and tax receivable agreements impact of Liberty LLC merger into the Company — — — — 6,681 — — 6,681 — 6,681

$ 0.22 /share of Class A Common Stock dividend

— — — — — ( 38,514 ) — ( 38,514 ) — ( 38,514 )

$ 0.05 /unit distribution to non-controlling unitholders

— — — — — — — — ( 13 ) ( 13 )

Other distributions and advance payments to non-controlling interest unitholders — — — — — — — — 920 920

Share repurchases ( 13,706 ) — ( 137 ) — ( 202,940 ) — — ( 203,077 ) ( 23 ) ( 203,100 )

Excise tax on share repurchases — — — — ( 1,855 ) — — ( 1,855 ) — ( 1,855 )

Stock-based compensation expense — — — — 33,023 — — 33,023 3 33,026

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Balance—December 31, 2023 166,610 — $ 1,666 $ — $ 1,093,498 $ 752,328 $ ( 6,084 ) $ 1,841,408 $ — $ 1,841,408

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 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

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Offering Costs — — — — ( 79 ) — — ( 79 ) — ( 79 )

Issuance of Class A and Class B Common Stock for the PropX Acquisition 3,406 2,441 34 24 88,979 — — 89,037 2,052 91,089

Impact of ownership changes from issuance of Class A and Class B Common Stock — — — — ( 15,325 ) — — ( 15,325 ) 15,325 —

Effect of exchange on deferred tax asset, net of liability under tax receivable agreements — — — — 3,757 — — 3,757 — 3,757

Deferred tax impact of ownership changes from issuance of Class A Common Stock — — — — ( 9,879 ) — ( 9,879 ) — ( 9,879 )

$ 0.05 /share of Class A Common Stock dividend

— — — — — ( 9,123 ) — ( 9,123 ) — ( 9,123 )

$ 0.05 /unit distributions to non-controlling unitholders

— — — — — — — — ( 13 ) ( 13 )

Other distributions and advance payments to non-controlling interest unitholders — — — — — — — — 920 920

Share repurchases ( 8,186 ) — ( 81 ) — ( 125,134 ) — — ( 125,215 ) ( 98 ) ( 125,313 )

Stock-based compensation expense — — — — 23,003 — — 23,003 105 23,108

Vesting of restricted stock units 1,172 — 12 — 8 — — 20 ( 20 ) —

Restricted stock and RSU Forfeitures — — — — — 2 — 2 — 2

Tax withheld on vesting of restricted stock units ( 9,716 ) ( 9,716 ) ( 9,716 )

Currency translation adjustment — — — — — — ( 7,090 ) ( 7,090 ) ( 7 ) ( 7,097 )

Net loss — — — — — ( 179,244 ) — ( 179,244 ) ( 7,760 ) ( 187,004 )

Net income — — — — — 399,602 — 399,602 700 400,302

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

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Depreciation, depletion, and amortization 421,514 323,028 262,757

(Gain) loss on disposal of assets ( 4,603 ) 779 ( 411 )

Inventory write-down 1,724 — 1,087

Non-cash lease expense 3,733 3,823 3,668

(Gain) loss on disposal of assets, net ( 6,994 ) ( 4,603 ) 779

Stock-based compensation expense 33,026 23,108 19,946

Deferred income tax (benefit) expense ( 12,472 ) 5,079 ( 25,546 )

Loss (gain) on remeasurement of liability under tax receivable agreements 76,191 ( 19,039 ) 543

Other non-cash expense, net 4 2,037 2,232

Provision for credit losses — 745 4,877

Deferred income tax expense (benefit) 120,312 ( 12,472 ) 5,079

(Gain) loss on remeasurement of liability under tax receivable agreements ( 1,817 ) 76,191 ( 19,039 )

Other non-cash items, net 7,111 5,461 6,605

Changes in operating assets and liabilities:

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Prepaid and other current assets—related party — — 24,708

Deferred revenue ( 593 ) 3,452 —

Accounts payable and accrued liabilities ( 45,133 ) 57,203 164,036

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Investment in sand logistics — ( 7,415 ) ( 13,106 )

Investment in Fervo Energy Company and Natron Energy, Inc.

Investment in Tamboran Resources Ltd.

and Oklo Inc.

(2023) and Fervo Energy Company and Natron Energy, Inc.

(2022) ( 20,283 ) ( 15,000 ) —

Acquisition of Siren Energy, net of cash received ( 75,656 ) — —

Proceeds from sales of assets 26,909 23,664 25,406

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( 349,315 ) ( 55,770 ) 2,056

Net increase (decrease) in cash and cash equivalents 23,938 ( 48,971 ) ( 43,712 )

Net (decrease) increase in cash and cash equivalents ( 7,060 ) 23,938 ( 48,971 )

Translation effect on cash 168 ( 260 ) ( 9 )

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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.

The Company has no material assets other than its ownership of units in Liberty LLC (“Liberty LLC Units”).

Effective January 31, 2023, Liberty LLC was merged into the Company, with the Company surviving 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”, and together with the Class A Common Stock, the “Common Stock”).

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 did not make any distributions or receive any proceeds in connection with this exchange.

Refer to Note 16 — Subsequent Events for more information.

The Company, together with its subsidiaries, is a leading integrated energy services and technology company focused on providing innovative hydraulic fracturing services and related technologies to onshore oil and natural gas exploration and production (“E&P”) companies in North America.

We offer customers hydraulic fracturing services, together with complementary services including wireline services, proppant delivery solutions, 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.

The Merger did not have a significant impact on the Company’s consolidated financial statements.

We offer customers hydraulic fracturing services, together with complementary services including wireline services, proppant delivery solutions, field gas processing, compressed natural gas 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.

Basis of Presentation

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Business Combinations

Business combinations are accounted for using the acquisition method of accounting in accordance with the Accounting Standard Codification (“ASC”) Topic 805 - Business Combinations, as amended by Accounting Standards Update (“ASU”) 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business.

2021-08, Business Combinations:

Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.

The purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values.

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Any acquisition related costs incurred by the Company are expensed as incurred.

Any excess purchase price over the fair value of the net identifiable assets acquired is recorded as goodwill if the definition of a business is

Any excess purchase price over the fair value of the net identifiable assets acquired is recorded as goodwill if the definition of a

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

business is met.

Operating results of an acquired business are included in our results of operations from the date of acquisition.

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Due to the cyclical nature of the oil and gas industry, the Company often evaluates its customers’ estimated losses on a case-by-case basis.

During the year ended December 31, 2023 the Company recorded a provision for credit losses of $ 0.8 million, related to certain customers’ expected inability to pay.

The Company did not record an additional provision for credit losses during the year ended December 31, 2022.

During the years ended December 31, 2021 and 2020, the Company recorded a provision for credit losses of $ 0.7 million and $ 4.9 million, respectively, related to two customers inability to pay and the deteriorating economic conditions for the oil and gas industry brought on by the COVID-19 pandemic.

Provisions for credit losses are included in general and administrative expenses in the accompanying consolidated statement of operations, in accordance with the new standard.

During the year ended December 31, 2021, the Company recorded a provision for credit losses of $ 0.7 million, related to two customers’ inability to pay.

Provisions for credit losses are included in general and administrative expenses in the accompanying consolidated statements of operations.

Refer to “Credit Risk” within Note 9—Fair Value Measurements and Financial Instruments for additional disclosures required under ASU 2016-13.

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Property and equipment are stated at cost.

Depreciation and amortization expense is recognized on property and equipment, excluding land, utilizing the straight-line method over the estimated useful lives, ranging from two to 30 years.

Depreciation expense is recognized on property and equipment, excluding land, utilizing the straight-line method over the estimated useful lives, ranging from two to 30 years.

The Company estimates salvage values that it does not depreciate.

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These assets are not subject to depreciation until they are completed and ready for their intended use, at which point the Company reclassifies them to field services equipment or vehicles, as appropriate.

The Company assesses its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability is assessed using undiscounted future net cash flows of assets grouped at the lowest level for which there are identifiable cash flows independent of the cash flows of other groups of assets.

The Company determined the lowest level of identifiable cash flows to be at the asset group, which is the aggregate of the Company’s hydraulic fracturing fleets that are in service.

A long-lived asset is not recoverable if its carrying amount exceeds the sum of estimated undiscounted cash flows expected to result from the use and eventual disposition.

The Company incurs maintenance costs on its major equipment.

The determination of whether an expenditure should be capitalized or expensed requires management judgment in the application of how the costs incurred benefit future periods, relative to the Company’s capitalization policy.

Costs that either establish or increase the efficiency, productivity, functionality or life of a fixed asset are capitalized and depreciated over the remaining useful life of the asset.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

alternative courses of action to recover the carrying amount of the asset group are under consideration, estimates of future undiscounted cash flows take into account possible outcomes and probabilities of their occurrence.

Impairment of long-lived assets

Long-lived assets, such as property and equipment, right-of-use lease assets and intangible assets, are evaluated for impairment whenever events or changes in circumstances indicate that their carrying value may not be recoverable.

Possible indicators of impairment may include events or changes in circumstances affecting the manner in which the assets are being used, historical and estimated future profitability measures, and other adverse events or changes that could affect the value of the assets.

If a triggering event is identified, recoverability is assessed using undiscounted future net cash flows of assets grouped at the lowest level for which there are identifiable cash flows independent of the cash flows of other groups of assets.

The Company determined the lowest level of identifiable cash flows to be at the asset group, which is the aggregate of the Company’s hydraulic fracturing fleets that are in service.

A long-lived asset is not recoverable if its carrying amount exceeds the sum of estimated undiscounted cash flows expected to result from the use and eventual disposition.

When alternative courses of action to recover the carrying amount of the asset group are under consideration, estimates of future undiscounted cash flows take into account possible outcomes and probabilities of their occurrence.

If the carrying amount of the asset is not recoverable, an impairment loss is recognized in an amount by which its carrying amount exceeds its estimated fair value, such that its carrying amount is adjusted to its estimated fair value, with an offsetting charge to impairment expense.

The Company measures the fair value of its property and equipment using the discounted cash flow method.

The Company measures the fair value of its long-lived assets using the discounted cash flow method.

The expected future cash flows used for impairment reviews and related fair value calculations are based on judgmental assessments of projected revenue growth, fleet count, utilization, gross margin rates, selling, general and administrative rates, working capital fluctuations, capital expenditures, discount rates and terminal growth rates.

As of December 31, 2022 and 2021, the Company concluded that no triggering events had occurred, and no impairment was recognized during the years ended December 31, 2022 and 2021.

During the year ended December 31, 2020, as a result of negative market indicators including the COVID-19 pandemic, the increased supply of low-priced oil, and customer cancellations, the Company concluded these triggering events could indicate possible impairment of property and equipment.

The Company performed a quantitative and qualitative impairment analysis and determined that no impairment had occurred as of June 30, 2020.

As of December 31, 2020, the Company concluded that no additional triggering events had occurred, and no impairment was recognized during the year ended December 31, 2020.

Major Maintenance Activities

The Company incurs maintenance costs on its major equipment.

Costs that either establish or increase the efficiency, productivity, functionality or life of a fixed asset are capitalized and depreciated over the remaining useful life of the asset.

In accordance with Accounting Standard Codification (“ASC”) Topic 842, the Company determines if an arrangement is a lease at inception and evaluates identified leases for operating or finance lease treatment.

Goodwill represents the excess of the acquisition purchase price over the estimated fair value of net tangible and intangible assets required.

Goodwill is not amortized, but instead tested for impairment at least annually, June 30, or more frequently if events and circumstances indicate that the asset might be impaired.

In testing goodwill for impairment, the Company performs a qualitative assessment to determine whether the existence of events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If the qualitative assessment determines that an impairment is more likely than not, then the Company performs the one-step quantitative impairment test by determining the fair value of the reporting unit.

The fair value of the reporting unit is determined using either the income approach by utilizing estimated discounted future cash flows or the market approach utilizing recent transaction activity for comparable properties.

These approaches are considered Level 3 fair value measurements.

If the carrying amount of a reporting unit exceeds the fair value, an impairment loss is recognized in the current period in an amount equal to the excess.

For purposes of assessing goodwill, the Company has one reporting unit.

No goodwill impairment was identified during the years ended December 31, 2023 and 2022.

In accordance with ASC Topic 842, the Company determines if an arrangement is a lease at inception and evaluates identified leases for operating or finance lease treatment.

Operating or finance lease right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.

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The lessee may not purchase the leased equipment and must return such equipment by the lease’s scheduled maturity date.

Deferred Financing Costs

Costs associated with obtaining debt financing are deferred and amortized to interest expense using the effective interest method.

In accordance with ASU No.

2015-03 and 2015-15, for all periods the Company has reflected deferred financing costs related to term loan debt as a direct deduction from the carrying amount, and costs associated with line-of-credit arrangements as other assets.

Deferred income taxes are computed using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements.

Deferred tax assets and liabilities are calculated using the enacted tax rates in effect for the year in which the deferred tax asset or liability is expected to reverse.

Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which the deferred tax asset or liability are expected to reverse.

The Company classifies all deferred tax assets and liabilities as non-current.

The Company records Global Intangible Low Tax Income as a current period expense.

The Company records Global Intangible Low-Tax Income inclusion as a current period expense.

The Company evaluates its deferred tax assets quarterly and considers 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.

On December 31, 2022, in accordance with ASC 740, the objective positive evidence of entering into a three-year cumulative pre-tax book income position, along with considering all available positive and negative evidence resulted in the release of the previously recorded valuation allowance against the Company’s U.S.

net deferred tax assets.

The Company recognizes the financial statement effects of a tax position when it is more-likely-than-not, based on the technical merits, that the position will be sustained upon examination.

A tax position that meets the more-likely-than-not

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

recognition threshold is measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority.

valuation allowance against the Company’s U.S.

net deferred tax assets.

On December 31, 2023, the Company continues to not record a valuation allowance against the Company’s deferred tax assets.

The Company recognizes the financial statement effects of a tax position when it is more-likely-than-not, based on the technical merits, that the position will be sustained upon examination.

A tax position that meets the more-likely-than-not recognition threshold is measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority.

Previously recognized tax positions are reversed in the first period in which it is no longer more-likely-than-not that the tax position would be sustained upon examination.

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Thereafter, any excess purchase price will be recorded as an reduction to retained earnings.

All Class A Common Stock shares repurchased are retired upon repurchase.

All Class A Common Stock shares repurchased to date have been retired upon repurchase.

Revenue Recognition

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In connection with the adoption of ASC Topic 842, the Company determined that certain of its service revenue contracts contain a lease component.

The Company elected to adopt a practical expedient available to lessors, which allows the Company to combine the lease and non-lease components and account for the combined component in accordance with the accounting treatment for the predominant component.

Therefore, the Company combines the lease and service component for certain of the

The Company elected to adopt a practical expedient available to lessors, which allows the Company

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Company’s service contracts and continues to account for the combined component under ASC Topic 606, Revenue from Contracts with Customers.

Deferred Revenue

From time to time, the Company may require partial payment in advance from new customers to secure credit or from existing customers in order to secure additional hydraulic fracturing services.

Initially, such payments are recorded in the accompanying consolidated financial statements as deferred revenue, and upon performance of the agreed services, the Company recognizes revenue consistent with its revenue recognition policy described above.

As of December 31, 2022 and 2021, the Company had $ 3.9 million and $ 4.6 million recorded as deferred revenue, respectively.

to combine the lease and non-lease components and account for the combined component in accordance with the accounting treatment for the predominant component.

Therefore, the Company combines the lease and service component for certain of the Company’s service contracts and continues to account for the combined component under ASC Topic 606, Revenue from Contracts with Customers.

Transaction, Severance and Other Costs

During 2022, the Company incurred transaction and integration related costs in connection with the PropX Acquisition (as defined below).

During 2023, the Company incurred transaction and integration related costs in connection with the Siren Acquisition (as defined below).

Such costs include investment banking, legal, accounting and other professional services provided in connection with closing the transaction and are expensed as incurred .

Additionally, during 2021, the Company incurred transaction and integration related costs in connection with the OneStim Acquisition (as defined below) and PropX Acquisition.

The Company incurred transaction costs in 2020 related to the OneStim Acquisition and severance and other costs related to the reduction in workforce in April 2020 and the commencement of furlough schedules for remaining employees in May 2020.

Payments made to employees leaving the Company, as well as benefits paid to employees while on furlough are recorded to transaction, severance and other costs in the accompanying consolidated statements of operations for the year ended December 31, 2020.

During 2022 and 2021, the Company incurred transaction and integration related costs in connection with the PropX Acquisition (as defined below).

Such costs include investment banking, legal, accounting and other professional services provided in connection with closing the transaction and are expensed as incurred .

Additionally, during 2021, the Company incurred transaction and integration related costs in connection with other prior period acquisitions.

Foreign Currency Translation

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Adjustments resulting from the translation of the subsidiary’s financial statements are reported in other comprehensive income.

Recently Adopted Accounting Standards

Business Combinations:

Accounting for Contract Assets and Contract Liabilities

In October 2021, the Federal Accounting Standards Board (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 Company adopted this guidance effective December 15, 2022, and the adoption did not have a material impact on the accompanying consolidated financial statements.

Recently Issued Accounting Standards

Income Taxes:

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes:

Improvements to Income Tax Disclosures , which requires disaggregation of certain components included in the Company’s effective tax rate and income taxes paid disclosures.

The guidance is effective for annual periods beginning after December 15, 2024.

The Company is currently assessing the impact of this ASU on the Company’s financial statements but does not expect it will have a material impact.

Reclassifications

Certain amounts in the prior period financial statements have been reclassified from interest income to interest expense, net in the accompanying 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 amortization of debt issuance costs to other non-cash (income) expense, net in the accompanying 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.

Certain amounts in the prior period financial statements have been reclassified to conform to current period financial statement presentation.

In the accompanying consolidated balance sheets $ 2.3 million was reclassified from accrued liabilities to income taxes payable and $ 3.9 million was reclassified from deferred revenue to accrued liabilities, additionally changes in deferred revenue were reclassified to changes in accounts payable and accrued liabilities in the accompanying consolidated statements of cash flows.

In the accompanying consolidated statements of operations amounts were reclassified from interest income to interest expense, net.

In the accompanying consolidated statement of cash flows amounts in the prior period financial statements have been reclassified from amortization of debt issuance costs, inventory write-down, non-cash lease expense, provision for credit-losses, and other non-cash expense, net to other non-cash items, net.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Note 3— Acquisitions

Siren Acquisition

On April 6, 2023, the Company completed the acquisition of a Permian focused integrated natural gas compression and compressed natural gas delivery business, Siren Energy & Logistics, LLC, for cash consideration of $ 75.7 million, after post closing adjustments and net of cash received, (the “Siren Acquisition”).

The Siren Acquisition was accounted for under the acquisition method of accounting for business combinations.

Accordingly, the Company conducted assessments of the net assets acquired and recognized amounts for identifiable assets acquired and liabilities assumed at their estimated acquisition date fair values, while transaction and integration costs associated with the acquisition were expensed as incurred.

In connection with the Siren Acquisition, the Company recorded goodwill of $ 42.0 million, property and equipment of $ 34.9 million, net working capital of $ 2.5 million, deferred revenue of $ 5.2 million, and other assets of $ 1.8 million.

Goodwill is recorded in other assets in the accompanying consolidated balance sheets.

Due to the immateriality of the Siren Acquisition, the related revenue and earnings, supplemental pro forma financial information, and detailed purchase price allocation are not 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 Siren Acquisition closed on April 6, 2023, the Company completed the purchase price allocation during the year ended December 31, 2023.

PropX Acquisition

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The majority of the measurements of assets acquired and liabilities assumed, are based on inputs that are not observable in the market and thus represent Level 3 inputs.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

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.

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The following table summarizes the fair value of the consideration transferred in the PropX Acquisition and the allocation of the purchase price 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:

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

($ in thousands)

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The Company’s consolidated statements of operations for the year ended December 31, 2021 includes 66 days of 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 Consolidated Statements of Operations for years ended December 31, 2021 and 2020.

OneStim Acquisition

On August 31, 2020 the Company and certain of its subsidiaries entered into the certain Master Transaction Agreement (the “Transaction Agreement”) with Schlumberger Technology Corporation and Schlumberger Canada Limited (collectively “Schlumberger”), pursuant to which 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 (such entire business of Schlumberger “OneStim,” and the portion of OneStim acquired pursuant to the Transaction Agreement the “Transferred Business”) in exchange for 57,377,232 shares of Class A Common Stock and a non-interest bearing demand promissory note (the “Canadian Buyer Note” and such acquisition, the “OneStim Acquisition”).

The Canadian Buyer Note was settled for 8,948,902 shares of Class A Common Stock, and a total of 66,326,134 shares of Class A Common Stock were issued in connection with the OneStim Acquisition.

Effective December 31, 2020, Schlumberger owned approximately 37.0 % of the Company’s issued and outstanding shares of Common Stock.

In connection with the issuance of 66,326,134 shares of Class A Common Stock, Liberty LLC also issued 66,326,134 Liberty LLC Units to the Company.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

The OneStim Acquisition was completed for total consideration of approximately $ 683.8 million based on the value of the Canadian Buyer Note and the closing price of the Class A Common Stock on December 31, 2020.

The Company accounted for the OneStim Acquisition using the acquisition method of accounting.

The aggregate purchase price noted above was allocated to the major categories of assets acquired and liabilities assumed based upon their estimated fair value at the date of the acquisition.

The estimated fair values of certain assets and liabilities, including accounts receivable, require significant judgments and estimates.

The majority of the measurements of assets acquired and liabilities assumed, are based on inputs that are not observable in the market and thus represent Level 3 inputs.

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.

As the OneStim Acquisition closed on December 31, 2020 the Company completed the purchase price allocation during the year ended December 31, 2021.

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 OneStim Acquisition.

Transaction costs consist of legal and professional fees and pre-merger notification fees.

Equity offering costs consist of expenses incurred related to the Special Meeting of Stockholders, including the costs to prepare the required filings associated with such meeting, held on November 3, 2020.

Integration costs consist of expenses incurred to integrate OneStim’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.

The following combined pro forma information assumes the OneStim Acquisition occurred on January 1, 2020.

The pro forma information presented below is for illustrative purposes only and does not reflect future events that occurred after December 31, 2020 or any operating efficiencies or inefficiencies that may result from the OneStim Acquisition.

The information is not necessarily indicative of results that would have been achieved had the Company controlled OneStim during the periods presented.

Year ended December 31,

(unaudited, in thousands) 2020

Revenue $ 2,191,894

Net loss ( 1,052,807 )

Net loss attributable to non-controlling interests ( 196,020 )

Net loss attributable to Liberty Energy Inc.

stockholders $ ( 856,787 )

Net loss attributable to Liberty Energy Inc.

stockholders per common share:

Basic $ ( 5.65 )

Diluted $ ( 5.65 )

Weighted average common shares outstanding:

Basic 151,568

Diluted 151,568

The Company’s consolidated statements of operations for the year ended December 31, 2020 does not include any results from OneStim operations as the OneStim Acquisition closed on December 31, 2020.

Transaction and integration costs incurred related to both transactions were $ 5.8 million, $ 13.6 million, and $ 8.5 million, for the years ended December 31, 2022, 2021, and 2020, respectively, and are recorded as a component of transaction, severance and other costs in the accompanying consolidated statements of operations.

Equity offering costs totaled $ 0.1 million, $ 1.3 million, and $ 1.6 million, for the years ended December 31, 2022, 2021, and 2020, respectively, and are recorded as a reduction to additional paid in capital in the accompanying consolidated balance sheets.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Note 4— Inventories

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Chemicals 16,896 32,392

Maintenance parts 150,712 93,184

Maintenance parts and other 171,845 150,712

$ 205,865 $ 214,454

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, which is included as a component in cost of services in the consolidated statements of operations.

During the year ended December 31, 2023, the lower of cost or net realizable value analysis resulted in the Company recording a write-down to the inventory carrying value of $ 5.8 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.

Both are included as a component in cost of services in the consolidated statements of operations.

The Company did not record any write-down to the inventory carrying value during the year ended December 31, 2021.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Note 5— Property and Equipment

17 unchanged sentences

Construction in-progress N/A 156,594 158,518

$ 1,362,364 $ 1,199,287

During the years ended December 31, 2022, 2021, and 2020, the Company recognized depreciation expense of $ 302.3 million, $ 243.0 million, and $ 169.9 million, respectively.

Property and equipment, net $ 1,645,368 $ 1,362,364

Depreciation expense for the years ended December 31, 2023, 2022, and 2021 was $ 387.8 million, $ 302.3 million, and $ 243.0 million, respectively.

Depletion expense for the years ended December 31, 2023, 2022, and 2021 was $ 1.1 million, $ 1.2 million, and $ 1.2 million, respectively.

As of December 31, 2023 and December 31, 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 December 31, 2022, the Company classified $ 1.1 million of land and $ 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 consolidated balance sheet.

The Company estimates that the carrying value of the assets were greater than the fair value less the estimated costs to sell, and therefore recorded a $ 1.0 million loss during the year ended December 31, 2022, included as a component of gain on disposal of assets in the accompanying consolidated statements of operations.

As of December 31, 2021, the Company determined no assets met the held for sale criteria.

As of December 31, 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 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 year ended December 31, 2023.

Additionally, as of December 31, 2022, the Company classified $ 1.1 million of land and $ 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 consolidated balance sheet.

The Company estimates that the carrying value of the assets were greater than the fair value less the estimated costs to sell, and therefore recorded a $ 1.0 million loss during the year ended December 31, 2022, included as a component of gain on disposal of assets, net in the accompanying consolidated statements of operations.

One of the properties classified as held for sale as of December 31, 2022, was sold during the year ended December 31, 2023, resulting in a nominal loss included as a component of (gain) loss on disposal of assets, net in the accompanying consolidated statements of income.

Note 6— Leases

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The terms and conditions for these leases vary by the type of underlying asset.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Certain leases include variable lease payments for items such as property taxes, insurance, maintenance, and other operating expenses associated with leased assets.

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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.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

The components of lease expense for the years ended as of December 31, 2023, and 2022 were as follows:

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Total lease cost, net $ 78,208 $ 62,480

Supplemental cash flow and other information related to leases for the year ended December 31, 2022 and 2021 were as follows:

Supplemental cash flow and other information related to leases for the years ended December 31, 2023 and 2022 were as follows:

($ in thousands) 2023 2022

5 unchanged sentences

Finance leases 160,546 25,888

During the years ended December 31, 2022 and 2021, the Company amended certain operating leases, the change in terms of which caused the leases to be reclassified to finance leases.

During the year ended December 31, 2023, the Company did not amend any operating leases.

During the year ended December 31, 2022, the Company amended certain operating leases, the change in terms of which caused the leases to be reclassified to finance leases.

In connection with the amendments, the Company recognized finance lease right-of-use assets of $ 3.5 million and liabilities of $ 3.5 million.

Additionally, the Company wrote-off operating lease right-of-use assets of $ 0.2 million and liabilities of $ 0.1 million.

During the year ended December 31, 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 $ 16.6 million and liabilities of $ 12.8 million.

Additionally, the Company recognized operating lease right-of-use assets of $ 14.3 million and liabilities of $ 10.7 million.

There was no gain or loss recognized as a result of these amendments.

7 unchanged sentences

Finance leases 8.0 % 8.2 %

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Future minimum lease commitments as of December 31, 2023 are as follows:

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For the Company’s vehicle leases classified as operating leases, the total residual value guaranteed as of December 31, 2023 is $ 14.6 million;

the payment is not probable and therefore has not been included in the measurement of the lease liability and right-of-use asset.

the payment is not probable and

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

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 Company leases dry and wet sand containers and conveyor belts 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.

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Equipment leased to others - net $ 112,962 $ 94,679

Future payments receivable for operating leases commenced and committed but not delivered as of December 31, 2022 are as follows:

Future payments receivable for operating leases as of December 31, 2023 are as follows:

($ in thousands)

2023 $ 16,704

Total $ 17,224

Revenues from operating leases for the years ended December 31, 2023 and 2022 were $ 36.6 million and $ 25.5 million, respectively.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Note 7— Accrued Liabilities

5 unchanged sentences

$ 261,066 $ 280,678

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Debt consists of the following:

6 unchanged sentences

$ 140,000 $ 218,446

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 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.

On November 4, 2022, the Company entered into an amendment to the Term Loan Facility (the “Seventh Term Loan Amendment”).

The Seventh Term Loan Amendment amended the restricted payments negative covenant of the Term Loan Facility so that the fixed charge coverage ratio requirements for dividend payments are waived, so long as the total of dividends paid and payments made in connection with the Company’s 2022 stock repurchase program does not exceed $ 100.0 million.

During the fourth quarter of 2022 the restricted payments negative covenant pertaining to the fixed charge coverage ratio requirements were satisfied and the $ 100.0 million limit no longer applied.

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”).

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and (vi) increasing certain indebtedness, intercompany advance, and investment baskets.

The Eighth ABL Amendment also includes an agreement from the 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, with such release to occur within 120 days after January 23, 2023, refer to Note 16—Subsequent Events for more information.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Also on January 23, 2023, the Company withdrew $ 106.7 million on the ABL Facility and used the proceeds to pay off the Term Loan Facility.

The balance of the Term Loan Facility upon pay off was $ 104.7 million and included $ 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 included in the pay off, refer to Note 16—Subsequent Events for more information.

The Eighth ABL Amendment included an agreement from the 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, which 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 and terminate the Term Loan Facility.

The amount paid included the balance of the Term Loan Facility at pay off of $ 104.7 million, $ 0.9 million of accrued interest, and a $ 1.1 million prepayment premium.

Additionally, there were $ 0.2 million in administrative and lender legal fees incurred in connection with the pay off.

The weighted average interest rate on all borrowings outstanding as of December 31, 2023 and December 31, 2022 was 7.6 % and 9.0 %, respectively.

Term Loan Facility

The Term Loan Facility provided for a $ 175.0 million term loan.

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.

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 December 31, 2023, the borrowing base was calculated to be $ 420.3 million, and the Company had $ 140.0 million outstanding in addition to letters of credit in the amount of $ 2.6 million, with $ 277.7 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 2.0 % or base rate margin of 0.5 % to 1.0 %, as defined in the ABL Facility credit agreement.

Borrowings under the ABL Facility bear interest at Secured Overnight Financing Rate (“SOFR”) or a base rate, plus an applicable SOFR margin of 1.5 % to 2.0 % or base rate margin of 0.5 % to 1.0 %, as described in the ABL Facility credit agreement (the “ABL Facility credit agreement”).

Additionally, borrowings as of December 31, 2023 incurred interest at a weighted average rate of 7.6 %.

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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.

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

The Term Loan Facility provides for a $ 175.0 million term loan, of which $ 104.7 million remained outstanding as of December 31, 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 December 31, 2022 incurred interest at a rate of approximately 12.0 %.

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 certain non-financial covenants, including but not limited to restrictions on incurring additional debt and certain distributions.

The ABL Facility matures on January 23, 2028.

Borrowings under the ABL Facility are collateralized by accounts receivable and inventory, and further secured by the Company, as parent guarantor.

The ABL Facility 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 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 annually to 0 % after the first anniversary of the Sixth Term Loan Amendment effective date.

The Credit Facilities are not subject to financial covenants unless liquidity, as defined in the respective credit agreements, drops below a specified level.

Under the ABL Facility, the Company is required to maintain a minimum fixed charge coverage ratio, as defined in the 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 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 ABL Facility is not subject to financial covenants unless liquidity, as defined in the ABL Facility credit agreement, drops below a specific level.

The Company is required to maintain a minimum fixed charge coverage ratio, as defined in the

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

ABL Facility credit agreement, of 1.0 to 1.0 for each period if excess availability is less than 10 % of the borrowing base or $ 52.5 million, whichever is greater.

The Company was in compliance with these covenants as of December 31, 2023.

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Years Ending December 31,

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Note 9— Fair Value Measurements and Financial Instruments

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

Nonrecurring Measurements

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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 Acquisition and OneStim Acquisition, which are required to be measured at fair value on the acquisition date in accordance with ASC Topic 805 .

These assets and liabilities include those acquired through the Siren Acquisition and PropX Acquisition, which are required to be measured at fair value on the acquisition date in accordance with ASC Topic 805 .

See Note 3—Acquisitions.

As of December 31, 2022, the Company recorded $ 1.1 million of land and $ 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 $ 6.3 million, which are included in prepaid and other current assets in the accompanying consolidated balance sheet.

The Company estimated the fair value of the properties based on a purchase and sale agreement and a communicated selling price, which are Level 3 inputs.

As of December 31, 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 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.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

The Company estimated that the carrying value of the assets were greater than the fair value less the estimated costs to sell, and therefore recorded a $ 1.0 million loss during the year ended December 31, 2022, included as a component of gain on disposal of assets, net in the accompanying consolidated statements of operations.

Other assets measured at fair value on a nonrecurring basis consist of notes receivable—related party from the Affiliate, as defined and described in Note 14—Related Party Transactions.

The note was initially recorded for the trade receivables, created in the normal course of business, due from the Affiliate as of the Agreement Date, as defined in Note 14—Related Party Transactions.

There were no identified events or changes in circumstances that had a significant adverse effect on the fair value of the notes receivable.

These notes are classified as Level 3 in the fair value hierarchy as the inputs to the determination of fair value are based upon unobservable inputs.

As of December 31, 2023 and 2022, notes receivable—related party from the Affiliate totaled $ 14.8 million and $ 11.8 million, respectively.

Recurring Measurements

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

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

The Company’s cash and cash equivalents balance on deposit with financial institutions total $ 43.7 million and $ 20.0 million as of December 31, 2022 and 2021, respectively, which exceeded FDIC insured limits.

The Company’s cash and cash equivalents balance on deposit with financial institutions total $ 36.8 million and $ 43.7 million as of December 31, 2023 and 2022, respectively, which exceeded Federal Deposit Insurance Corporation 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 December 31, 2022 and 2021, customer A accounted for 11.0 % and 11.8 %, respectively, of total consolidated accounts receivable and unbilled revenue.

During the year ended December 31, 2023, no customers accounted for 10% of total consolidated accounts receivable and unbilled revenue.

As of December 31, 2022, customer A accounted for 11.0 %, of total consolidated accounts receivable and unbilled revenue.

During the years ended December 31, 2023, 2022, and 2021, no customers accounted for 10% of consolidated revenues.

During the year ended December 31, 2020, customer B accounted for 12.1 %, customer C accounted for 10.7 %, customer D accounted for 10.3 %, and customer E accounted for 10.2 %, of total consolidated revenues.

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

As of December 31, 2023, the Company had $ 0.9 million in allowance for credit losses and recorded a provision related to certain customers’ expected inability to pay.

As of December 31, 2022, the Company had $ 0.9 million in allowance for credit losses.

As of December 31, 2021, the Company had $ 0.9 million in allowance for credit losses and recorded a provision related to two entities inability to pay.

As of December 31, 2020 the Company had $ 0.8 million in allowance for credit losses.

Subsequent to the adoption of ASU 2016-13 on January 1, 2020, the Company recognized a $ 4.9 million allowance for credit losses, to the Company’s accounts receivables in consideration of both historic collection experience and the expected impact of deteriorating economic conditions for the oil and gas industry as of such date.

The Company applied historic loss factors to its receivable portfolio segments that were not expected to be further impacted by current economic developments, and an additional economic conditions factor to portfolio segments anticipated to experience greater losses in the current economic environment.

While the Company has not experienced significant credit losses in the past and has not seen material changes to the payment patterns of its customers, the Company cannot predict with any certainty the degree to which the ongoing impacts of COVID-19, including the potential impact of periodically adjusted borrowing base limits, level of hedged production, or unforeseen well shut-ins may affect the ability of its customers to timely pay receivables when due.

The Company applies historic loss factors to its receivable portfolio segments that are not expected to be further impacted by current economic developments, and an additional economic conditions factor to portfolio segments anticipated to experience greater losses in the current economic environment.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Accordingly, in future periods, the Company may revise its estimates of expected credit losses.

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Class A Common Stock

The Company had a total of 178,753,125 and 183,385,111 shares of Class A Common Stock outstanding as of December 31, 2022 and 2021, none of which were restricted.

The Company had a total of 166,610,199 and 178,753,125 shares of Class A Common Stock outstanding as of December 31, 2023 and 2022, respectively, none of which were restricted.

Holders of Class A Common Stock are entitled to one vote per share on all matters to be voted upon by the stockholders and are entitled to ratably receive dividends when and if declared by the Company’s board of directors.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Class B Common Stock

The Company had a total of 0 and 250,222 shares of Class B Common Stock outstanding as of December 31, 2023 and 2022, respectively.

Holders of the Class B Common Stock are entitled to one vote per share on all matters to be voted upon by stockholders.

Holders of Class A Common Stock and Class B Common Stock vote together as a single class on all matters presented to the Company’s stockholders for their vote or approval, except with respect to amendment of certain provisions of the Company’s certificate of incorporation that would alter or change the powers, preferences or special rights of the Class B Common Stock so as to affect them adversely, which amendments must be by a majority of the votes entitled to be cast by the holders of the shares affected by the amendment, voting as a separate class, or as otherwise required by applicable law.

Holders of Class B Common Stock do not have any right to receive dividends, unless the dividend consists of shares of Class B Common Stock or of rights, options, warrants or other securities convertible or exercisable into or exchangeable for shares of Class B Common Stock paid proportionally with respect to each outstanding share of Class B Common Stock and a dividend consisting of shares of Class A Common Stock or of rights, options, warrants or other securities convertible or exercisable into or exchangeable for shares of Class A Common Stock on the same terms is simultaneously paid to the holders of Class A Common Stock.

Holders of Class B Common Stock do not have any right to receive a distribution upon liquidation or winding up of the Company.

Under the Second Amended and Restated Limited Liability Company Agreement of Liberty LLC (the “Liberty LLC Agreement”), each Liberty Unit Holder has, subject to certain limitations, the Redemption Right, which allows it to cause Liberty LLC to acquire all or a portion of its Liberty LLC Units, for, at Liberty LLC’s election, (i) shares of Class A Common Stock at a redemption ratio of one share of Class A Common Stock for each Liberty LLC Unit redeemed, subject to conversion rate adjustments for stock splits, stock dividends and reclassification and other similar transactions or (ii) an equivalent amount of cash.

Alternatively, upon the exercise of the Redemption Right, the Company (instead of Liberty LLC) will have the Call Right, which allows it to, for administrative convenience, acquire each tendered Liberty LLC Unit directly from the redeeming Liberty Unit Holder for, at its election, (x) one share of Class A Common Stock or (y) an equivalent amount of cash.

In addition, upon a change of control of the Company, the Company has the right to require each holder of Liberty LLC Units (other than the Company) to exercise its Redemption Right with respect to some or all of such unitholder’s Liberty LLC Units.

In connection with any redemption of Liberty LLC Units pursuant to the Redemption Right or the Call Right, the corresponding number of shares of Class B Common Stock will be canceled.

Effective January 31, 2023, in connection with the Merger, all outstanding shares of the Class B Common Stock were redeemed and exchanged, with no shares remaining outstanding as of December 31, 2023.

Long Term Incentive Plan

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The LTIP provides for the grant, from time to time, at the discretion of the Company’s board of directors or a committee thereof, of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, dividend equivalents, other stock-based awards, cash awards, substitute awards and performance awards.

Subject to adjustment in the event of certain transaction or changes of capitalization in accordance with the LTIP, 12,908,734 shares of Class A Common Stock have been reserved for issuance pursuant to awards under the LTIP.

Subject to adjustment in the event of certain transaction or changes of capitalization in accordance with the LTIP, 12,908,734 shares of Class A Common Stock were initially reserved for issuance pursuant to awards under the LTIP.

Class A Common Stock subject to an award that expires or is canceled, forfeited, exchanged, settled in cash or otherwise terminated without delivery of shares and shares withheld to pay the exercise price of, or to satisfy the withholding obligations with respect to, an award will again be available for delivery pursuant to other awards under the LTIP.

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Restricted stock units (“RSUs”) granted pursuant to the LTIP, if they vest, will be settled in shares of the Company’s Class A Common Stock.

RSUs were granted with vesting terms up to five years.

RSUs were granted with vesting terms up to three years .

Changes in non-vested RSUs outstanding under the LTIP during the year ended December 31, 2023 were as follows:

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Stock-based compensation is included in cost of services and general and administrative expenses in the Company’s consolidated statements of operations.

The Company recognized stock-based compensation expense of $ 23.1 million for the year ended December 31, 2022 and $ 19.9 million for the year ended December 31, 2021.

The Company recognized stock-based compensation expense of $ 33.0 million, $ 23.1 million, and $ 19.9 million for the years ended December 31, 2023, 2022, and 2021, respectively.

There was approximately $ 33.9 million of unrecognized compensation expense relating to outstanding RSUs and PSUs as of December 31, 2023.

The unrecognized compensation expense will be recognized on a straight-line basis over the weighted average remaining vesting period of two years .

On April 2, 2020, the Company suspended future quarterly dividends until they were reinstated on October 18, 2022 by the Company’s board of directors.

On October 18, 2022, the Company’s Board of Directors (the “Board”) reinstated quarterly dividends after they were suspended on April 2, 2020.

The Company paid cash dividends of $ 0.05 per share of Class A Common Stock on March 20, 2023, June 20, 2023, and September 20, 2023 to stockholders of record as of March 6, 2023, June 6, 2023, and September 6, 2023, respectively.

Additionally, the Company paid cash dividends of $ 0.07 per share of Class A Common Stock on December 20, 2023 to stockholders of record as of December 6, 2023.

During the year ended December 31, 2023, dividend payments totaled $ 37.5 million.

The Company paid cash dividends of $ 0.05 per share of Class A Common Stock on December 20, 2022 to stockholders of record as of December 6, 2022.

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The Company used the proceeds of the distribution to pay the dividend to all holders of shares of Class A Common Stock as of December 6, 2022, which totaled $ 9.0 million.

The Company paid cash dividends of $ 0.05 per share of Class A Common Stock on March 20, 2020 to stockholders of record as of March 6, 2020.

Liberty LLC paid a distribution of $ 5.6 million, or $ 0.05 per Liberty LLC Unit, to all Liberty LLC unit holders as of March 6, 2020, $ 4.1 million of which was paid to the Company.

The Company used the proceeds of the distribution to pay the dividend to all holders of shares of Class A Common Stock as of March 6, 2020, which totaled $ 4.1 million.

Additionally, as of December 31, 2022 and 2021, the Company had $ 0.2 million and $ 0.2 million of dividend equivalents payable related to RSUs and PSUs to be paid upon vesting, respectively.

Dividends related to forfeited RSUs or PSUs will be forfeited.

Additionally, the Company paid an accrued dividend equivalent upon vesting for the RSUs and PSUs with a 2023 vesting date, which totaled $ 0.2 million for the year ended December 31, 2023.

As of December 31, 2023 and 2022, the Company had $ 1.0 million and $ 0.2 million of dividend equivalents payable related to RSUs and PSUs to be paid upon vesting, respectively.

Dividend equivalents related to forfeited RSUs or PSUs will be forfeited.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Share Repurchase Program

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.

On July 25, 2022, the Company’s board of directors authorized and the Company announced a share repurchase program that allowed 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.

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.

Furthermore, on January 23, 2024 the Board authorized and the Company announced an increase to the share repurchase program that increased the Company’s cumulative repurchase authorization to $ 750.0 million and extended the authorization through July 31, 2026.

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.

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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 and expected free cash flow to be generated through July 2024.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

During the year ended December 31, 2022, Liberty LLC purchased and retired 8,185,890 LLC Units from the Company for $ 125.3 million, and the Company repurchased and retired 8,185,890 shares of Class A Common Stock for $ 125.3 million or $ 15.31 average price per share including commissions, under the share repurchase program.

The Company expects to fund any repurchases by using cash on hand, borrowings under its revolving credit facility and expected free cash flow to be generated through the duration of the share repurchase program.

During the year ended December 31, 2023, the Company repurchased and retired 13,705,622 shares of Class A Common Stock for $ 203.1 million or $ 14.82 average price per share including commissions, under the share repurchase program.

As of December 31, 2023, $ 171.9 million remained authorized for future repurchases of Class A Common Stock under the share repurchase program.

During the years ended December 31, 2021 and 2020, under the prior share repurchase program, no shares were repurchased and retired under the share repurchase program.

During the year ended December 31, 2022, the Company repurchased and retired 8,185,890 shares of Class A Common Stock for $ 125.3 million or $ 15.31 average price per share including commissions, under the share repurchase program.

During the year ended December 31, 2021, under the prior share repurchase program, no shares were repurchased and retired 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.

Note 11— 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 and RSUs.

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

As enacted by the Inflation Reduction Act of 2022 (“IRA”), the Company accrued stock repurchase excise tax of $ 1.9 million for the year ended December 31, 2023.

Note 11— Net Income per Share

Basic net income per share measures the performance of an entity over the reporting period.

Diluted net income 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.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

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

(In thousands, except per share data) Year Ended December 31, 2023 Year Ended December 31, 2022

Basic Net Income (Loss) Per Share

Net income (loss) attributable to Liberty Energy Inc.

Basic Net Income Per Share

Net income attributable to Liberty Energy Inc.

stockholders $ 556,317 $ 399,602

Basic weighted average common shares outstanding 171,845 184,334

Basic net income (loss) per share attributable to Liberty Energy Inc.

Basic net income per share attributable to Liberty Energy Inc.

stockholders $ 3.24 $ 2.17

Diluted Net Income (Loss) Per Share

Net income (loss) attributable to Liberty Energy Inc.

Diluted Net Income Per Share

Net income attributable to Liberty Energy Inc.

stockholders $ 556,317 $ 399,602

Effect of exchange of the shares of Class B Common Stock for shares of Class A Common Stock 73 716

Diluted net income (loss) attributable to Liberty Energy Inc.

Diluted net income attributable to Liberty Energy Inc.

stockholders $ 556,390 $ 400,318

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Diluted weighted average shares outstanding 176,360 189,349

Diluted net income (loss) per share attributable to Liberty Energy Inc.

Diluted net income per share attributable to Liberty Energy Inc.

stockholders $ 3.15 $ 2.11

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:

Year Ended Year Ended

(In thousands) December 31, 2022 December 31, 2021

Weighted average shares of Class B Common Stock — 7,052

Weighted average shares of restricted stock units — 3,589

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Note 12— Income Taxes

The Company is a corporation and is subject to taxation in the United States, Canada and various state, local and provincial jurisdictions.

Liberty LLC is treated as a partnership, and its income is passed through to its owners for income tax purposes.

Liberty LLC’s members, including the Company, are liable for federal, state and local income taxes based on their share of Liberty LLC’s pass-through taxable income.

As of December 31, 2022, tax reporting by the Company for the years ended December 31, 2019, 2020, and 2021 is subject to examination by the tax authorities.

Historically, Liberty LLC was treated as a partnership, and its income was passed through to its owners for income tax purposes.

Liberty LLC’s members, including the Company, 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 filed a final tax return during the 2023 calendar year.

As of December 31, 2023, tax reporting by the Company for the years ended December 31, 2020, 2021, 2022, and the short period ended January 31, 2023 are subject to examination by the tax authorities.

With few exceptions, as of December 31, 2023, the Company is no longer subject to U.S.

federal, state or local examinations by tax authorities for tax years ended before December 31, 2019.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

The components of the Company’s income (loss) from continuing operations before income taxes on which the provision for income taxes was computed consisted of the following:

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Total Deferred $ 120,312 $ ( 12,472 ) $ 5,079

Income tax (benefit) expense $ ( 793 ) $ 9,216 $ ( 30,857 )

Income tax (benefit) expense attributable to net income (loss) before income taxes differed from the amounts computed by applying the statutory U.S.

Income tax expense (benefit) $ 178,482 $ ( 793 ) $ 9,216

Income tax expense (benefit) attributable to net income (loss) before income taxes differed from the amounts computed by applying the statutory U.S.

federal income tax rate of 21.0% to pre-tax income as a result of the following:

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Other TRA adjustment ( 248 ) ( 2,763 ) —

Nondeductible executive compensation 6,514 — —

impact of foreign earnings — 315 —

Other, net 584 1,048 137

Total income tax (benefit) expense $ ( 793 ) $ 9,216 $ ( 30,857 )

Total income tax expense (benefit) $ 178,482 $ ( 793 ) $ 9,216

The effective tax rate for the years ended December 31, 2023, 2022, and 2021 was 24.3 %, ( 0.2 )%, and ( 5.2 )%, respectively.

The Company’s effective tax rate is greater than the statutory federal income tax rate of 21.0% due to the Company’s Canadian operations, state income taxes in the states the Company operates, as well as nondeductible executive compensation.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

The effective tax rate for the years ended December 31, 2022, 2021, and 2020 was ( 0.2 )%, ( 5.2 )%, and 16.1 %, respectively.

The Company recognized income tax benefit of $( 0.8 ) million during the year ended December 31, 2022.

The Company’s effective tax rate is less than the statutory federal income tax rate of 21.0% due to the Company releasing the valuation allowance on its U.S.

net deferred tax assets as of December 31, 2021, due to entering into a three-year cumulative pre-tax book income position, as a result of improved operations.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:

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Intangibles 22,825 576

Lease liabilities 51,504 —

Property and equipment — 4,638

Stock-based compensation 4,279 —

Inventory 3,361 —

Other 5,133 450

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Property and equipment ( 221,337 ) —

Lease assets ( 55,801 ) —

Other ( 850 ) ( 2,740 )

Total deferred tax liabilities ( 277,988 ) ( 124,601 )

Net deferred tax asset $ 11,548 $ 44

During the year ended December 31, 2022 the Company released the valuation allowance on the Company’s beginning U.S.

net deferred tax assets, resulting in the recognition of an income tax benefit of $ 91.3 million.

As of December 31, 2022, the Company had significant deferred tax assets and liabilities, deferred tax assets include U.S.

federal and state net operating losses and the step-up in basis of depreciable assets under Section 754 (“Section 754”) of the Internal Revenue Code of 1986, as amended.

In addition, the Company recorded a deferred tax liability for the difference between the book value and the tax value of the Company's investment in Liberty LLC.

The Company also has deferred tax liabilities for foreign operations driven by net deductible reversing temporary differences related to differences between book and taxable income.

As of December 31, 2022, the Company has available U.S.

federal net operating loss carryforwards to reduce future taxable income of $ 121.6 million with no expiration date.

Per the Coronavirus Aid, Relief and Economic Security (“CARES”) Act enacted March 27, 2020, net operating losses (“NOL”) incurred in 2018, 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 assets.

The remaining deferred tax asset for net operating losses available for carryforward are presented as part of deferred tax assets.

Net deferred tax (liability) asset $ ( 102,340 ) $ 11,548

During the year ended December 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.

As a result of this change, the Company no longer has a deferred tax liability for the difference between the book value and the tax value of the Company’s investment in Liberty LLC and the associated net deferred tax liability balances have been allocated to the deferred tax asset and liability line items above.

Significant deferred tax assets include the step up in basis of depreciable assets under Section 754 (“Section 754”) of the Internal Revenue Code of 1986, as amended and deferred tax liabilities related to property and equipment.

As of December 31, 2023, the Company has utilized all U.S.

federal net operating loss carryforwards and has $ 1.3 million state net operating loss carryforwards that will not expire in the foreseeable future.

The Company may distribute cash from foreign subsidiaries to its U.S.

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Uncertain Tax Positions

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

for those tax positions meeting the more likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.

The Company records uncertain tax positions on the basis of a two-step process in which (1) the Company determines whether it is more likely than not the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions meeting the more likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.

The Company determined that no liability for unrecognized tax benefits for uncertain tax positions was required at December 31, 2023.

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If the Company were to record an unrecognized tax benefit, the Company will recognize applicable interest and penalties related to income tax matters in income tax expense.

Tax Distributions

Liberty LLC is treated as a partnership for income tax purposes.

Federal, state and local taxes resulting from the pass-through taxable income of Liberty LLC are obligations of its members.

Net profits and losses are generally allocated to the members of Liberty LLC (including the Company) in accordance with the number of Liberty LLC Units held by each member for tax purposes.

The Liberty LLC Agreement provides for pro rata cash distributions, and in certain cases non-pro rata cash advances, to assist members (including the Company) in paying their income tax liabilities.

The Liberty LLC Agreement requires any tax advances to be proportionally repaid in connection with any redemption of Liberty LLC Units pursuant to the Redemption Right or the Call Right.

Net advances received by Liberty LLC from non-controlling interest holders were $ 0.9 million and $ 1.4 million, respectively, for the years ended December 31, 2022 and 2021.

Additionally, Liberty LLC distributed $ 2.8 million of which $ 2.8 million was paid to the Company and $ 0.0 million to non-controlling interest holders for the year ended December 31, 2022.

Liberty LLC distributed $ 0.0 million for the year ended December 31, 2021.

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Tax Receivable Agreements

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federal income tax rate then applicable, and the portion of the Company’s payments under the TRAs that constitute imputed interest or give rise to depreciable or amortizable tax basis.

Prior to the Corporate Reorganization, one of the Legacy Owners distributed a portion of its member interest in Liberty Holdings to R/C IV Non-U.S.

Subsequently, in conjunction with the Corporate Reorganization, R/C IV was contributed to the Company.

At the time of the contribution, R/C IV had net operating loss carryforwards totaling $ 10.9 million for federal income tax purposes and $ 10.9 million for certain state income tax purposes, which became available for the Company’s use as a result of the contribution.

As a result of the Company being in a net income position in 2018 and the expected utilization of deferred tax assets, the Company recognized a deferred tax asset of $ 2.6 million and a corresponding $ 2.3 million liability pursuant to the TRAs.

Of the contributed net operating loss carryforwards, $ 6.4 million for federal income tax purposes and $ 6.4 million of certain state income tax purposes have been utilized.

As a result, the Company has remaining $ 0.8 million of deferred tax asset and a corresponding $ 0.7 million liability pursuant to the TRAs.

At 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, and the related deferred tax assets totaled $ 99.9 million.

Upon the release of the valuation allowance, the Company recorded a loss on remeasurement of the liabilities subject to the TRA of $ 76.2 million recorded as part of continuing operations in the current year.

At December 31, 2023, the Company’s liability under the TRAs was $ 117.7 million of which $ 5.2 million is recorded as a current liability and $ 112.5 million is recorded as a component of long-term liabilities.

The Company recorded a gain on remeasurement of the liabilities subject to the TRA of $ 1.8 million recorded as part of continuing operations in the current year.

At December 31, 2022, the Company’s liability under the TRAs was $ 118.9 million, all of which was recorded as a component of long-term liabilities, and the related deferred tax assets totaled $ 99.9 million.

During the year ended December 31, 2023, exchanges of Liberty LLC Units and shares of Class B Common Stock resulted in an increase of $ 0.6 million in amounts payable under the TRAs, and a net increase of $ 0.7 million in deferred tax assets, all of which were recorded through equity.

The Company did not make any TRA payments for the year ended December 31, 2022.

The Company did not make any TRA payments during the year ended December 31, 2023.

On January 31, 2023, the Company recorded an increase of $ 6.6 million of deferred tax assets for the impact of the adopted plan of merger for Liberty LLC into the Company, all of which was recorded through equity.

During the year ended December 31, 2022, exchanges of Liberty LLC Units and shares of Class B Common Stock resulted in an increase of $ 5.1 million in amounts payable under the TRAs, and a net increase of $ 6.0 million in deferred tax assets, all of which were recorded through equity.

The Company did not make any TRA payments for the year ended December 31, 2021.

The Company did not make any TRA payments during the year ended December 31, 2022.

LIBERTY ENERGY INC.

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The Company sponsors a 401(k) defined contribution retirement plan covering eligible employees.

The Company has historically made matching contribution 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.

The Company makes matching contribution 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 $ 32.9 million, $ 25.8 million, and $ 19.0 million for the years ended December 31, 2023, 2022 and 2021, respectively.

During 2020, in connection with other cost savings measures undertaken in response to declining demand for frac services as a result of the impacts of the COVID-19 pandemic, employer matching contributions were temporarily suspended from April 1, 2020 through December 31, 2020.

Effective January 1, 2021 the Company restored its 6 % matching contribution.

Note 14— Related Party Transactions

Schlumberger Limited

As of December 31, 2022 Schlumberger owns 9,001,961 shares of Class A Common Stock of the Company, or approximately 5.0 % of the issued and outstanding shares of Common Stock.

Under the Transaction Agreement, to the extent the net working capital, as defined in the Transaction Agreement, of the Transferred Business is less than $ 54.6 million, the difference shall be payable in cash to the Company.

During the three months ended September 30, 2021, the Company agreed on a working capital settlement from Schlumberger of $ 15.8 million, most of which was netted against transaction services costs and cash settlements during the transition services period.

In conjunction with closing the OneStim Acquisition, the Company entered into a transition services agreement with Schlumberger, under which Schlumberger provides certain administrative transition services until the Company fully integrates the acquired business.

During the years ended December 31, 2022 and 2021, the Company incurred $ 0.0 million and $ 5.7 million of fees payable to Schlumberger such transaction services.

The Company does not expect to incur any additional transition services related fees in future periods.

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 year ended December 31, 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, under the share repurchase program.

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.

Effective January 31, 2023, after the repurchase and retirement, Schlumberger owns no shares of Class A Common Stock of the Company and no longer qualifies as a related party.

During the year ended December 31, 2022, the Company repurchased and retired 1,700,000 shares of Class A Common Stock for $ 27.8 million or $ 16.35 average price per share from Schlumberger, under the share repurchase program.

On April 29, 2022, the Company, Liberty LLC, Schlumberger, and BofA Securities, Inc.

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 proceeds from the Sale.

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 years ended December 31, 2022 and 2021, total purchases from Schlumberger were approximately $ 21.7 million and $ 28.2 million, respectively.

As of December 31, 2022 amounts due to Schlumberger were $ 2.6 million and $ 0.7 million included in accounts payable and accrued liabilities, respectively, in the consolidated balance sheets.

During 2021, a subsidiary of the Company and Schlumberger entered into a property swap agreement under which the Company exchanged with Schlumberger a property 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.

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The Company recognized a gain on the sale of equipment of $ 0.0 million and $ 0.9 million, respectively.

Following the OneStim Acquisition, in the normal course of business, the Company purchases chemicals, proppant and other equipment and maintenance parts from Schlumberger and its subsidiaries.

During the year ended December 31, 2022 and 2021, total purchases from Schlumberger were approximately $ 21.7 million and $ 28.2 million, respectively.

As of December 31, 2022 amounts due to Schlumberger were $ 2.6 million and $ 0.7 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 million included in accounts payable and accrued liabilities, respectively, in the consolidated balance sheet.

Franklin Mountain Energy, LLC

Effective on June 15, 2021, Audrey Robertson was appointed to the board of directors of the Company.

Robertson serves as the Chief Financial Officer of Franklin Mountain Energy, LLC (“Franklin Mountain”).

During the year ended December 31, 2022 the Company performed hydraulic fracturing services for Franklin Mountain in the amount of $ 131.8 million or 3.2 % of the Company’s revenues for such period.

During the year ended December 31, 2021 the Company performed hydraulic fracturing services for Franklin Mountain in the amount of $ 20.5 million or 0.8 % of the Company’s revenues for such period.

A member of the board of directors of the Company, Audrey Robertson, serves as Executive Vice President of Finance of Franklin Mountain Energy, LLC (“Franklin Mountain”).

During the years ended December 31, 2023, 2022 and 2021, the Company performed hydraulic fracturing services for Franklin Mountain in the amount of $ 176.1 million, $ 131.8 million, and $ 20.5 million, respectively.

Amounts included in unbilled revenue from Franklin Mountain as of December 31, 2023 and 2022, were $ 13.4 million and $ 13.9 million, respectively.

Receivables from Franklin Mountain as of December 31, 2022 and 2021, were $ 0.0 million and $ 0.0 million , respectively.

There were $ 12.1 million and $ 0.0 million in receivables from Franklin Mountain as of December 31, 2023 and 2022, respectively.

Liberty Resources LLC

1 unchanged sentence

The amounts of the Company’s revenue related to hydraulic fracturing services provided to the Affiliate for the years ended December 31, 2023, 2022 and 2021, were $ 38.8 million, $ 16.7 million and $ 2.8 million, respectively.

As of December 31, 2022 and 2021, there were $ 0.0 million and $ 0.0 million , respectively, outstanding receivables within the Company’s accounts receivable-trade and unbilled revenue line items attributable to the Affiliate.

Amounts included in unbilled revenue and accounts receivable—related party from the Affiliate as of December 31, 2023 were $ 0.0 million and $ 5.2 million, respectively.

There were no amounts included in unbilled revenue and accounts receivable—related party from the Affiliate as of December 31, 2022.

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 extend the due dates to April 1, 2024.

Additionally, on August 15, 2023, the agreement was further amended in order to extend the due dates for certain invoices to January 1, 2025.

Amounts outstanding from the Affiliate, under such agreement, as of December 31, 2023 and 2022 were $ 14.8 million and

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Amounts outstanding from the Affiliate as of the Agreement Date were $ 11.8 million.

Any receivable amount outstanding at the end of each month is subject to 12 % interest through March 31, 2023, 15 % from April 1, 2023 through September 30, 2023, and 18 % thereafter.

$ 11.8 million, respectively, included in other assets in the consolidated balance sheets.

Any receivable amount outstanding at the end of each month is subject to interest through the end of the agreement.

During the years ended December 31, 2023, 2022 and 2021, interest income from the Affiliate was $ 2.0 million, $ 0.0 million , and $ 0.0 million , respectively.

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During the period from January 1, 2021 until October 26, 2021, the Company leased proppant logistics equipment from PropX for $ 7.3 million.

During the year ended December 31, 2020 the Company leased proppant logistics equipment from PropX for $ 8.7 million.

R/C IV Liberty Big Box Holdings, L.P., a Riverstone Holdings LLC (“Riverstone”) fund and a former significant stockholder of the Company, held a greater than 10 % equity interest in PropX.

3 unchanged sentences

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.

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 proceeds from the Sale.

Note 15— Commitments & Contingencies

Purchase Commitments (tons are not in thousands)

The Company enters into purchase and supply agreements to secure supply and pricing of proppants, chemicals, and equipment.

As of December 31, 2022 and 2021, the agreements provide pricing and committed supply sources for the Company to purchase 2,915,172 and 89,317 tons, respectively, of proppant through December 31, 2024.

Amounts above also include commitments to pay for transport fees on minimum amounts of proppants.

Additionally, related proppant transload service commitments extend into 2023.

The Company enters into purchase and supply agreements to secure supply and pricing of proppants, transload, and equipment.

As of December 31, 2023 and 2022, the agreements provide pricing and committed supply sources for the Company to purchase 1,854,000 tons and 2,915,172 tons, respectively, of proppant through December 31, 2025.

Amounts below also include commitments to pay for transport fees on minimum amounts of proppants.

Additionally, related proppant transload service commitments run through 2024.

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

3 unchanged sentences

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

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

Company could incur shortfall fees in the amounts of $ 27.9 million and $ 6.9 million for the years ended 2023 and 2024, respectively.

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 $ 25.2 million and $ 5.4 million for the years ended December 31, 2024 and December 31, 2025, respectively.

Based on forecasted levels of activity, the Company does not currently expect to incur significant shortfall fees.

Included in the commitments for the year ending December 31, 2022 are approximately $ 7.8 million of payments expected to be made in the first quarter of 2023 for the use of certain light duty trucks, heavy tractors and field equipment used to various degrees in frac and wireline operations.

Included in the commitments for the year ending December 31, 2023 are $ 3.2 million of payments expected to be made in the first quarter of 2024 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.

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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 in aggregate will have a material adverse effect on its financial position or results of operations.

The Company’s assessment of the likely outcome of litigation matters is based on its judgment of a number of factors

LIBERTY ENERGY INC.

Notes to Consolidated Financial Statements

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 the aggregate will have a material adverse effect on its financial position or results of operations.

Note 16— Subsequent Events

On January 23, 2023, the Company, Liberty Oilfield Services New Holdco LLC, R/C IV Non-U.S.

LOS Corp, Liberty Oilfield Services LLC, other subsidiaries of the Company, Wells Fargo Bank, National Association, as administrative agent (the “Agent”), and other lenders 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.

Also on January 23, 2023, the Company withdrew $ 106.7 million on the ABL Facility and used the proceeds to pay off the Term Loan Facility.

The balance of the Term Loan Facility upon pay off was $ 104.7 million and included $ 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 included in the pay off.

As such, the only outstanding debt facility after January 23, 3023 is the ABL Facility.

Refer to “Our current and future indebtedness could adversely affect our financial condition” included in “Item 1A.

Risk Factors” above for further details on the outstanding balance of the ABL Facility as of the filing date.

On January 23, 2024, the Company’s board of directors approved a quarterly dividend of $ 0.07 per share of Class A Common Stock to be paid on March 20, 2024 to holders of record as of March 6, 2024.

Additionally, on January 24, 2023, the Company’s board of directors authorized an increase of the share repurchase program that allows the Company to repurchase an additional $ 250.0 million for a total up to $ 500.0 million of the Company’s Class A Common Stock.

Effective January 31, 2023, Liberty LLC was merged into the Company, with the Company surviving the merger.

In connection with the merger all outstanding shares of the Company’s Class B Common Stock were redeemed and exchanged for an equal number of shares of the Company’s Class A Common Stock.

The Company did not make any distributions or receive any proceeds in connection with this exchange.

The merger is not expected to have a significant impact on the Company’s consolidated financial statements.

Additionally, on January 23, 2024, the Company’s board of directors authorized an increase of the share repurchase program that allows the Company to repurchase an additional $ 250.0 million for a total up to $ 750.0 million of the Company’s Class A Common Stock and extended the authorization through July 31, 2026.

No other significant subsequent events have occurred that would require recognition or disclosure in the consolidated financial statements and notes thereto.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures