Liberty Energy Inc. 10-Q

Item 3. Quantitative and Qualitative Disclosure about Market Risk Our consolidated financial statements are expressed in U.S. dollars, but, effective January 1, 2021, a portion of our operations is conducted in a currency other than U.S. dollars. The Canadian dollar is the functional currency of the Company’s foreign subsidiary as it is the primary currency within the economic environment in which the subsidiary operates. Changes in the exchange rate can affect our revenues, earnings, and the carrying value of our assets and liabilities in our consolidated balance sheet, either positively or negatively. Adjustments resulting from the translation of the subsidiary’s financial statements are reported in other comprehensive (loss) income. For the three and six months ended June 30, 2024, the Company recorded a foreign currency translation loss of $1.7 million and $5.4 million, respectively, to comprehensive income. For the three and six months ended June 30, 2023, the Company recorded foreign currency translation income of $2.0 million and $1.5 million, respectively, to comprehensive income. During the six months ended June 30, 2024, the Company formed an entity in Australia, and will use the Australian dollar as the functional currency for the new entity’s operations. The Australian entity does not have any material assets or liabilities as of June 30, 2024, did not generate any revenue, and incurred only de minimis expenses during the six months ended June 30, 2024, as such there in no impact of changes in the Australian dollar to U.S. dollar exchange rate in the financial statements of Company as of and for the six months ended June 30, 2024. Other exposures to market risk have not changed materially since December 31, 2023. For quantitative and qualitative disclosures about market risk, in addition to foreign currency translation, see Part II, Item 7(a), “Quantitative and Qualitative Disclosures About Market Risk,” in the Annual Report.