What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-10-17 compared with 2024-07-18 · 242 added, 229 removed, 692 unchanged (40% of the section changed)

3 unchanged sentences

(Dollars in thousands, except share data)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Current assets:

36 unchanged sentences

Common Stock:

Class A, $ 0.01 par value, 400,000,000 shares authorized and 165,332,351 issued and outstanding as of June 30, 2024 and 166,610,199 issued and outstanding as of December 31, 2023

Class A, $ 0.01 par value, 400,000,000 shares authorized and 163,393,279 issued and outstanding as of September 30, 2024 and 166,610,199 issued and outstanding as of December 31, 2023

Class B, $ 0.01 par value, 400,000,000 shares authorized and none issued and outstanding

9 unchanged sentences

(In thousands, except per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

11 unchanged sentences

Other expense:

Unrealized gain on investments, net ( 7,201 ) — ( 7,201 ) —

Unrealized loss (gain) on investments, net 2,727 — ( 4,474 ) —

Interest income—related party — ( 531 ) ( 478 ) ( 1,254 )

18 unchanged sentences

(In thousands)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Net income $ 73,804 $ 148,608 $ 264,117 $ 464,025

Other comprehensive (loss) income

Other comprehensive income (loss)

Foreign currency translation 1,647 ( 3,148 ) ( 3,802 ) ( 1,618 )

17 unchanged sentences

Net income — — — — — 264,117 — 264,117

Balance—June 30, 2024 165,332 — $ 1,653 $ — $ 1,027,939 $ 918,836 $ ( 11,533 ) $ 1,936,895

Balance—September 30, 2024 163,393 — $ 1,634 $ — $ 996,336 $ 980,914 $ ( 9,886 ) $ 1,968,998

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

12 unchanged sentences

Net income — — — — — 463,934 — 463,934 91 464,025

Balance—June 30, 2023 170,393 — $ 1,704 $ — $ 1,146,130 $ 531,974 $ ( 5,867 ) $ 1,673,941 $ — $ 1,673,941

Balance—September 30, 2023 168,608 — $ 1,686 $ — $ 1,123,967 $ 671,924 $ ( 9,015 ) $ 1,788,562 $ — $ 1,788,562

See Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(Dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

18 unchanged sentences

Purchases of property and equipment and construction in-progress ( 447,542 ) ( 465,212 )

Investment in Tamboran Resources Corporation, Empire Energy Group Ltd., and Falcon Oil & Gas Ltd.

Investment in Tamboran Resources Corporation, Empire Energy Group Ltd., Falcon Oil & Gas Ltd.

(2024), and Oklo Inc.

(2023) ( 16,056 ) ( 10,000 )

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

22 unchanged sentences

(Dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Supplemental disclosure of cash flow information:

16 unchanged sentences

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

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, field gas processing, compressed natural gas (“CNG”) delivery, data analytics, related goods (including our sand mine operations), and technologies to facilitate lower emission completions, thereby helping our customers reduce their emissions profile.

2 unchanged sentences

Accordingly, these financial statements do not include all information or notes required by GAAP for annual financial statements and should be read together with the annual financial statements and notes thereto included in the Annual Report.

The accompanying unaudited condensed consolidated financial statements and related notes present the condensed consolidated financial position of the Company as of June 30, 2024 and December 31, 2023, the results of operations and equity of the Company as of and for the three and six months ended June 30, 2024 and 2023, and cash flows for the six months ended June 30, 2024 and 2023.

The accompanying unaudited condensed consolidated financial statements and related notes present the condensed consolidated financial position of the Company as of September 30, 2024 and December 31, 2023, the results of operations and equity of the Company as of and for the three and nine months ended September 30, 2024 and 2023, and cash flows for the nine months ended September 30, 2024 and 2023.

The interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim period.

The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results of operations expected for the entire fiscal year ended December 31, 2024.

The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results of operations expected for the entire fiscal year ended December 31, 2024.

Further, these estimates and other factors, including those outside the Company’s control, such as the impact of sustained lower commodity prices, could have a significant adverse impact to the Company’s financial condition, results of operations, and cash flows.

28 unchanged sentences

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

The Company combined amounts previously presented within “Effect of exchange on deferred tax asset, net of liability under tax receivable agreements” and “Deferred tax impact of ownership changes from issuance of Class A Common Stock” into “Deferred tax and tax receivable agreements impact of the Liberty LLC merger into the Company”.

Additionally, amounts in the prior period financial statements have been reclassified from “Tax withheld on vesting of restricted stock units” into “Vesting of restricted stock units, net” in the accompanying unaudited condensed consolidated statements of changes in equity.

Amounts in the prior period financial statements have been reclassified from “Tax withheld on vesting of restricted stock units” into “Vesting of restricted stock units, net” in the accompanying unaudited condensed consolidated statements of changes in equity.

In the accompanying unaudited condensed consolidated statement of cash flows, amounts in the prior period financial statements have been reclassified from “Inventory write-down” and “Non-cash lease expense” into “Other non-cash items, net”.

4 unchanged sentences

Inventories consist of the following:

June 30, December 31,

September 30, December 31,

($ in thousands) 2024 2023

3 unchanged sentences

$ 197,563 $ 205,865

During the three and six months ended June 30, 2024, the lower of cost or net realizable value analysis resulted in the Company recording a write-down to the inventory carrying value of $ 1.0 million.

During the three months ended September 30, 2024, the Company did not record any write-downs to inventory carrying values.

During the nine months ended September 30, 2024, the lower of cost or net realizable value analysis resulted in the Company recording a write-down to the inventory carrying value of $ 1.0 million.

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.

3 unchanged sentences

Property and equipment consist of the following:

(in years) June 30, December 31,

(in years) September 30, December 31,

($ in thousands) 2024 2023

16 unchanged sentences

Property and equipment, net $ 1,834,214 $ 1,645,368

During the three months ended June 30, 2024 and 2023, the Company recognized depreciation expense of $ 110.0 million and $ 92.9 million, respectively.

During the six months ended June 30, 2024 and 2023, the Company recognized depreciation expense of $ 220.9 million and $ 181.4 million, respectively.

Depletion expense for the three months ended June 30, 2024 and 2023 was $ 0.3 million.

Depletion expense for the six months ended June 30, 2024 and 2023 was $ 0.6 million.

As of June 30, 2024 and December 31, 2023, 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 June 30, 2024, the Company classified $ 1.2 million of land and $ 2.8 million of buildings, net of accumulated depreciation, of two properties that it intends to sell within the next year, and that meet the held for sale criteria, to assets held for sale, included in prepaid and other current assets in the accompanying unaudited condensed consolidated balance sheet.

The Company estimates that the carrying value of the assets is equal to the fair value less the estimated costs to sell, net of write-downs taken in the prior period, and therefore no gain or loss was recorded during the six months ended June 30, 2024.

During the three months ended September 30, 2024 and 2023, the Company recognized depreciation expense of $ 111.3 million and $ 99.5 million, respectively.

During the nine months ended September 30, 2024 and 2023, the Company recognized depreciation expense of $ 332.2 million and $ 280.9 million, respectively.

Depletion expense for the three months ended September 30, 2024 and 2023 was $ 0.3 million.

Depletion expense for the nine months ended September 30, 2024 and 2023 was $ 0.9 million.

As of September 30, 2024 and December 31, 2023, the Company concluded that no triggering events that could indicate possible impairment of property and equipment had occurred, other than related to the assets held for sale discussed below.

As of September 30, 2024, the Company classified $ 1.2 million of land and $ 2.8 million of buildings, net of accumulated depreciation, of two properties that it intends to sell within the next year, and that meet the held for sale criteria, to assets held for sale, included in prepaid and other current assets in the accompanying unaudited condensed consolidated balance sheet.

Additionally, 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, as assets held for sale, included in prepaid and other current assets in the accompanying unaudited condensed consolidated balance sheet.

As of June 30, 2023, the Company classified $ 0.7 million of land and $ 0.8 million of buildings, net of accumulated depreciation, of one property as assets held for sale.

The Company estimated that carrying value of the assets was equal to the fair value less the estimated costs to sell, net of write-downs taken in the prior period ended March 31, 2023, and therefore no gain or loss was recorded during the six months ended June 30, 2023.

As of September 30, 2023, the Company classified $ 0.7 million of land and $ 0.8 million of buildings, net of accumulated depreciation, of one property as assets held for sale.

The Company estimated that carrying value of the assets was 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 nine months ended September 30, 2023.

Note 5— Leases

6 unchanged sentences

Notes to Condensed Consolidated Financial Statements

The components of lease expense for the three and six months ended June 30, 2024 and 2023 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

The components of lease expense for the three and nine months ended September 30, 2024 and 2023 were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

($ in thousands) 2024 2023 2024 2023

6 unchanged sentences

Total lease cost, net $ 27,586 $ 21,619 $ 76,684 $ 55,132

Sup plemental cash flow and other information related to leases for the three and six months ended June 30, 2024 and 2023 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

Sup plemental cash flow and other information related to leases for the three and nine months ended September 30, 2024 and 2023 were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

($ in thousands) 2024 2023 2024 2023

5 unchanged sentences

Finance leases 47,475 88,125 128,980 105,298

During the three months ended June 30, 2024 , the Company amended certain operating leases, the change in terms of which caused the leases to be reclassified as finance leases.

During the nine months ended September 30, 2024 , the Company amended certain operating leases, the change in terms of which caused the leases to be reclassified as finance leases.

In connection with the amendments, the Company wrote-off a de minimis amount of operating lease right-of-use assets and liabilities.

1 unchanged sentence

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

During the three months ended June 30, 2023, the Company did not reclassify any operating or finance leases.

Lease terms and discount rates as of June 30, 2024 and December 31, 2023 were as follows:

June 30, 2024 December 31, 2023

During the nine months ended September 30, 2023, the Company did not reclassify any operating or finance leases.

Lease terms and discount rates as of September 30, 2024 and December 31, 2023 were as follows:

September 30, 2024 December 31, 2023

Weighted-average remaining lease term:

6 unchanged sentences

Notes to Condensed Consolidated Financial Statements

Future minimum lease commitments as of June 30, 2024 are as follows:

Future minimum lease commitments as of September 30, 2024 are as follows:

($ in thousands) Finance Operating

9 unchanged sentences

The Company’s vehicle leases typically include a residual value guarantee.

For the Company’s vehicle leases classified as operating leases, the total residual value guaranteed as of June 30, 2024 is $ 12.6 million;

For the Company’s vehicle leases classified as operating leases, the total residual value guaranteed as of September 30, 2024 is $ 12.0 million;

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

1 unchanged sentence

Lessor Arrangements

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 Company leases dry and wet sand containers, conveyor belts, and other equipment 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.

2 unchanged sentences

The Company does not record any lease assets or liabilities related to these variable items.

The carrying amount of equipment leased to others, included in property, plant and equipment, under operating leases as of June 30, 2024 and December 31, 2023 were as follows:

($ in thousands) June 30, 2024 December 31, 2023

The carrying amount of equipment leased to others, included in property, plant and equipment, under operating leases as of September 30, 2024 and December 31, 2023 were as follows:

($ in thousands) September 30, 2024 December 31, 2023

Equipment leased to others - at original cost $ 163,794 $ 138,781

1 unchanged sentence

Equipment leased to others - net $ 125,696 $ 112,962

Future payments receivable for operating leases as of June 30, 2024 are as follows:

Future payments receivable for operating leases as of September 30, 2024 are as follows:

($ in thousands)

1 unchanged sentence

Total $ 9,341

Revenues from operating leases for the three and six months ended June 30, 2024 were $ 8.7 million and $ 17.8 million, respectively.

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

Revenues from operating leases for the three and nine months ended September 30, 2024 were $ 11.1 million and $ 28.9 million, respectively.

Revenues from operating leases for the three and nine months ended September 30, 2023 were $ 9.6 million and $ 27.8 million, respectively.

LIBERTY ENERGY INC.

2 unchanged sentences

Accrued liabilities consist of the following:

($ in thousands) June 30, 2024 December 31, 2023

($ in thousands) September 30, 2024 December 31, 2023

Accrued vendor invoices $ 78,531 $ 99,620

3 unchanged sentences

Debt consists of the following:

June 30, December 31,

September 30, December 31,

($ in thousands) 2024 2023

4 unchanged sentences

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.

The weighted average interest rate on all borrowings outstanding as of June 30, 2024 and December 31, 2023 was 7.6 % and 7.6 %, respectively.

The weighted average interest rate on all borrowings outstanding as of September 30, 2024 and December 31, 2023 was 6.9 % and 7.6 %, respectively.

Under the terms of the ABL Facility, up to $ 525.0 million may be borrowed, subject to certain borrowing base limitations based on a percentage of eligible accounts receivable and inventory.

As of June 30, 2024, the borrowing base was calculated to be $ 395.6 million, and the Company had $ 147.0 million outstanding in addition to letters of credit in the amount of $ 7.4 million, with $ 241.2 million of remaining availability.

As of September 30, 2024, the borrowing base was calculated to be $ 459.7 million, and the Company had $ 123.0 million outstanding in addition to letters of credit in the amount of $ 7.4 million, with $ 329.3 million of remaining availability.

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 “Credit Agreement”).

Additionally, borrowings as of June 30, 2024 incurred interest at a weighted average rate of 7.6 %.

Additionally, borrowings as of September 30, 2024 incurred interest at a weighted average rate of 6.9 %.

The average monthly unused commitment is subject to an unused commitment fee of 0.25 % to 0.375 %.

6 unchanged sentences

The Company is required to maintain a minimum fixed charge coverage ratio, as defined in the 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 June 30, 2024.

The Company was in compliance with these covenants as of September 30, 2024.

LIBERTY ENERGY INC.

18 unchanged sentences

Transfers occur at the end of the reporting period.

There were no transfers into or out of Levels 1, 2, and 3 during the six months ended June 30, 2024 and 2023.

There were no transfers into or out of Levels 1, 2, and 3 during the nine months ended September 30, 2024 and 2023.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, notes receivable, investments in equity securities, accounts payable, accrued liabilities, long-term debt, and finance and operating lease obligations.

These financial instruments do not require disclosure by level.

The carrying values of all of the Company’s financial instruments included in the accompanying unaudited condensed consolidated balance sheets approximated or equaled their fair values on June 30, 2024 and December 31, 2023.

• The carrying values of cash and cash equivalents, accounts receivable, and accounts payable (including accrued liabilities) approximated fair value on June 30, 2024 and December 31, 2023, due to their short-term nature.

• The carrying value of investments in equity securities were measured at fair value on June 30, 2024 based on quoted prices in active markets.

• The carrying value of amounts outstanding under long-term debt agreements with variable rates approximated fair value on June 30, 2024 and December 31, 2023, as the effective interest rates approximated market rates.

• The carrying values of amounts outstanding under finance and operating lease obligations approximated fair value on June 30, 2024 and December 31, 2023, as the effective borrowing rates approximated market rates.

• The carrying values of cash and cash equivalents, accounts receivable, and accounts payable (including accrued liabilities) approximated fair value on September 30, 2024 and December 31, 2023, due to their short-term nature.

• The carrying value of investments in equity securities were measured at fair value on September 30, 2024 based on quoted prices in active markets.

• The carrying value of amounts outstanding under long-term debt agreements with variable rates approximated fair value on September 30, 2024 and December 31, 2023, as the effective interest rates approximated market rates.

• The carrying values of amounts outstanding under finance and operating lease obligations approximated fair value on September 30, 2024 and December 31, 2023, as the effective borrowing rates approximated market rates.

Nonrecurring Measurements

1 unchanged sentence

These items are not measured at fair value on an ongoing basis but may be subject to fair value adjustments in certain circumstances.

As of June 30, 2024, the Company recorded $ 1.2 million of land and $ 2.8 million of buildings, net of accumulated depreciation, of two properties that met the held for sale criteria, to assets held for sale at a total fair value of $ 3.4 million, which are included in prepaid and other current assets in the accompanying unaudited condensed consolidated balance sheets.

The Company estimated the fair value of the properties based on the listed selling price for the two properties, which is a Level 3 input.

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

As of September 30, 2024, the Company recorded $ 1.2 million of land and $ 2.8 million of buildings, net of accumulated depreciation, of two properties that met the held for sale criteria, to assets held for sale at a total fair value of $ 3.4 million, which are included in prepaid and other current assets in the accompanying unaudited condensed consolidated balance sheets.

The Company estimated the fair value of the properties based on the listed selling price for the two properties, which is a Level 3 input.

As of December 31, 2023, the Company recorded $ 0.7 million of land and $ 0.8 million of buildings, net of accumulated depreciation, of one property that met the held for sale criteria, to assets held for sale at a total fair value of $ 0.8 million, which are included in prepaid and other current assets in the accompanying unaudited condensed consolidated balance sheets.

3 unchanged sentences

Cash equivalents consist of money market accounts which the Company has classified as Level 1 given the active market for these accounts.

As of June 30, 2024 and December 31, 2023, the Company had cash equivalents, measured at fair value, of $ 0.3 million.

As of September 30, 2024 and December 31, 2023, the Company had cash equivalents, measured at fair value, of $ 0.3 million.

The Company holds an investment in Oklo Inc.

2 unchanged sentences

The Company measures this investment in equity securities at fair value using Level 1 inputs based on quoted prices in an active market.

As of June 30, 2024, the fair value of the investment was estimated at $ 17.4 million.

The change in Oklo’s fair value resulted in an unrealized gain of $ 7.4 million during the three and six months ended June 30, 2024, included as a component of other expense, net in the accompanying unaudited condensed consolidated statements of operations.

As of September 30, 2024, the fair value of the investment was estimated at $ 16.6 million.

The change in Oklo’s fair value resulted in an unrealized loss of $ 0.8 million and an unrealized gain of $ 6.6 million during the three and nine months ended September 30, 2024, respectively, included in unrealized loss (gain) on investments, net in the accompanying unaudited condensed consolidated statements of operations.

Additionally, during the three months ended December 31, 2023, the Company purchased depository interests representing shares of common stock in Tamboran Resources Corporation (“Tamboran”).

2 unchanged sentences

The Company measures this investment in equity securities at fair value using Level 1 inputs based on quoted prices in an active market.

As of June 30, 2024, the fair value of the investment was estimated at $ 20.1 million.

The change in Tamboran’s fair value resulted in an unrealized loss of $ 0.2 million during the three and six months ended June 30, 2024, included as a component of other expense, net in the accompanying unaudited condensed consolidated statements of operations.

As of September 30, 2024, the fair value of the investment was estimated at $ 18.2 million.

The change in Tamboran’s fair value resulted in an unrealized loss of $ 1.9 million and $ 2.1 million during the three and nine months ended September 30, 2024, respectively, included in unrealized loss (gain) on investments, net in the accompanying unaudited condensed consolidated statements of operations.

Nonfinancial assets

1 unchanged sentence

The inputs used to determine such fair value are primarily based upon internally developed cash flow models and would generally be classified within Level 3 in the event that such assets were required to be measured and recorded at fair value within the accompanying unaudited condensed consolidated financial statements.

No such measurements were required as of June 30, 2024 and December 31, 2023 as no triggering event was identified.

No such measurements were required as of September 30, 2024 and December 31, 2023 as no triggering event was identified.

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

The Company’s cash and cash equivalent balances on deposit with financial institutions total $ 30.0 million and $ 36.8 million as of June 30, 2024 and December 31, 2023, respectively, which exceeded FDIC insured limits.

The Company’s cash and cash equivalent balances on deposit with financial institutions total $ 23.0 million and $ 36.8 million as of September 30, 2024 and December 31, 2023, respectively, which exceeded FDIC insured limits.

The Company regularly monitors these institutions’ financial condition.

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

As of June 30, 2024 and December 31, 2023, no c ustomers accounted for more than 10% o f total consolidated accounts receivable and unbilled revenue.

During the three and six months ended June 30, 2024, customer A accounted for 12 % and 14 % of consolidated revenues, respectively.

During the three and six months ended June 30, 2023, customer B accounted for 11 % of consolidated revenues.

As of September 30, 2024, customer A accounted for 13 % o f total consolidated accounts receivable and unbilled revenue.

As of December 31, 2023, no c ustomers accounted for more than 10% o f total consolidated accounts receivable and unbilled revenue.

During the three months ended September 30, 2024 and 2023, no customers accounted for more than 10% of

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

consolidated revenues.

During the nine months ended September 30, 2024, customer B accounted for 12 % of consolidated revenues.

During the nine months ended September 30, 2023, customer A accounted for 11 % of consolidated revenues.

No other customers accounted for more than 10% of revenues during the respective periods.

1 unchanged sentence

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.

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

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

any certainty the degree to which unforeseen events may affect the ability of its customers to timely pay receivables when due.

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 unforeseen events may affect the ability of its customers to timely pay receivables when due.

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

As of June 30, 2024 and December 31, 2023, the Company had $ 0.9 million in allowance for credit losses as follows:

As of September 30, 2024 and December 31, 2023, the Company had $ 0.9 million in allowance for credit losses as follows:

($ in thousands)

3 unchanged sentences

Amounts written off —

Provision for credit losses on June 30, 2024 $ 939

Provision for credit losses on September 30, 2024

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

Note 9— Equity

3 unchanged sentences

RSUs were granted with vesting terms up to three years .

Changes in non-vested RSUs outstanding under the LTIP during the six months ended June 30, 2024 were as follows:

Changes in non-vested RSUs outstanding under the LTIP during the nine months ended September 30, 2024 were as follows:

Number of Units Weighted Average Grant Date Fair Value per Unit

3 unchanged sentences

Forfeited ( 63,226 ) 14.70

Outstanding as of June 30, 2024 3,023,148 $ 16.87

Outstanding as of September 30, 2024

3,010,066 $ 16.89

Performance Restricted Stock Units

3 unchanged sentences

If such performance targets are not met, or are not expected to be met, no compensation expense is recognized and any recognized compensation expense is reversed.

Changes in non-vested PSUs outstanding under the LTIP during the six months ended June 30, 2024 were as follows:

Changes in non-vested PSUs outstanding under the LTIP during the nine months ended September 30, 2024 were as follows:

Number of Units Weighted Average Grant Date Fair Value per Unit

3 unchanged sentences

Forfeited — —

Outstanding as of June 30, 2024 1,091,530 $ 14.97

Outstanding as of September 30, 2024

1,099,863 $ 15.04

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

The Company recognized stock-based compensation expense of $ 6.9 million and $ 14.2 million for the three and six months ended June 30, 2024, respectively.

The Company recognized stock-based compensation of $ 8.0 million and $ 15.1 million for the three and six months ended June 30, 2023, respectively.

There was approximately $ 55.7 million of unrecognized compensation expense relating to outstanding RSUs and PSUs as of June 30,

The Company recognized stock-based compensation expense of $ 8.1 million and $ 22.3 million for the three and nine months ended September 30, 2024, respectively.

The Company recognized stock-based compensation of $ 8.6 million and $ 23.7 million for the three and nine months ended September 30, 2023, respectively.

There was approximately $ 46.4 million of unrecognized compensation expense relating to outstanding RSUs and PSUs as of September 30, 2024.

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

The Company paid cash dividends of $ 0.07 per share of Class A Common Stock on March 20, 2024, June 20, 2024, and September 20, 2024 to stockholders of record as of March 6, 2024, June 6, 2024, and September 6, 2024, respectively.

During the three and nine months ended September 30, 2024, dividend payments totaled $ 11.5 million and $ 34.7 million, respectively.

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.

During the three and nine months ended September 30, 2023, dividend payments totaled $ 8.4 million and $ 25.8 million, respectively.

Additionally, the Company paid accrued dividend equivalents upon vesting for the RSUs and PSUs with a 2024 vesting date, which totaled $ 0.6 million for the nine months ended September 30, 2024.

The Company paid accrued dividend equivalents upon vesting for the RSUs and PSUs with a 2023 vesting date, which totaled $ 0.2 million for the nine months ended September 30, 2023.

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

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

The Company paid cash dividends of $ 0.07 per share of Class A Common Stock on March 20, 2024 and June 20, 2024 to stockholders of record as of March 6, 2024 and June 6, 2024, respectively.

During the three and six months ended June 30, 2024, dividend payments totaled $ 11.6 million and $ 23.2 million, respectively.

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

During the three and six months ended June 30, 2023, dividend payments totaled $ 8.6 million and $ 17.4 million, respectively.

Additionally, the Company paid accrued dividend equivalents upon vesting for the RSUs and PSUs with a 2024 vesting date, which totaled $ 0.6 million for the six months ended June 30, 2024.

The Company paid accrued dividend equivalents upon vesting for the RSUs and PSUs with a 2023 vesting date, which totaled $ 0.2 million for the six months ended June 30, 2023.

As of June 30, 2024 and December 31, 2023, the Company had $ 0.9 million and $ 1.0 million of dividend equivalents payable related to RSUs and PSUs to be paid upon vesting, respectively.

As of September 30, 2024 and December 31, 2023, the Company had $ 1.2 million and $ 1.0 million of dividend equivalents payable related to RSUs and PSUs to be paid upon vesting, respectively.

Dividends are not paid on forfeited RSUs or PSUs.

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Furthermore, on January 23, 2024, the Board authorized and the Company announced an increase of the 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.

The shares may be repurchased from time to time in open market transactions, through block trades, in privately negotiated transactions, through derivative transactions, or by other means in accordance with applicable state and federal securities laws.

The timing, as well as the number and value of shares repurchased under the program, will be determined by the Company at its discretion and will depend on a variety of factors, including management’s assessment of the intrinsic value of the Company’s Class A Common Stock, the market price of the Company’s Class A Common Stock, general market and economic conditions, available liquidity, compliance with the Company’s debt and other agreements, applicable legal requirements, and other considerations.

The exact number of shares to be repurchased by the Company is not guaranteed, and the program may be suspended, modified, or discontinued at any time without prior notice.

The Company expects to fund 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.

Share repurchases and retirements under the share repurchase program for the three and six months ended June 30, 2024 and 2023 were as follows:

Three Months Ended June 30, Six Months Ended June 30,

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

Share repurchases and retirements under the share repurchase program for the three and nine months ended September 30, 2024 and 2023 were as follows:

Three Months Ended September 30, Nine Months Ended September 30,

($ in thousands, except share count and per share data) 2024 2023 2024 2023

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Average price per share including commissions $ 20.29 $ 16.40 $ 20.91 $ 14.05

As of June 30, 2024, $ 362.2 million remained authorized for future repurchases of Class A Common Stock under the share repurchase program.

As of September 30, 2024, $ 322.9 million remained authorized for future repurchases of Class A Common Stock under the share repurchase program.

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

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

As enacted by the Inflation Reduction Act of 2022, the Company accrued stock repurchase excise tax of $ 0.3 million and $ 1.2 million, respectively, for the six months ended June 30, 2024 and 2023.

As of June 30, 2024 and December 31, 2023, the Company had excise tax payables of $ 2.1 million and $ 1.9 million, respectively, in accrued liabilities in the accompanying unaudited condensed consolidated balance sheets.

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

As enacted by the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”), the Company accrued stock repurchase excise tax of $ 0.7 million and $ 1.5 million, respectively, for the nine months ended September 30, 2024 and 2023.

As of September 30, 2024 and December 31, 2023, the Company had excise tax payables of $ 2.5 million and $ 1.9 million, respectively, in accrued liabilities in the accompanying unaudited condensed consolidated balance sheets.

Note 10— Net Income per Share

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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 RSUs and PSUs.

LIBERTY ENERGY INC.

Notes to Condensed 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:

Three Months Ended Six Months Ended

(In thousands, except per share data) June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Three Months Ended Nine Months Ended

(In thousands, except per share data) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Basic Net Income Per Share

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The OECD continues to release additional guidance and countries are implementing legislation, with widespread adoption of the Pillar Two Framework expected by 2025.

The Company is

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

continuing to evaluate the Pillar Two Framework and its potential impact on future periods, including any legislation enacted in the jurisdictions in which the Company operates.

The Company is continuing to evaluate the Pillar Two Framework and its potential impact on future periods, including any legislation enacted in the jurisdictions in which the Company operates.

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

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If such earnings were to be distributed, any income and/or withholding tax is not expected to be significant.

The effective global income tax rate applicable to the Company for the six months ended June 30, 2024 was 23.7 %, compared to 24.4 % for the period ended June 30, 2023.

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

The effective global income tax rate applicable to the Company for the nine months ended September 30, 2024 was 23.5 %, compared to 24.6 % for the period ended September 30, 2023.

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.

The Company recognized income tax expense of $ 32.6 million and $ 59.0 million during the three and six months ended June 30, 2024, respectively.

The Company recognized income tax expense of $ 47.3 million and $ 101.8 million during the three and six months ended June 30, 2023, respectively.

As of June 30, 2024 and December 31, 2023, the Company recognized a net deferred tax liability in the amount of $ 102.3 million.

The Company recognized income tax expense of $ 22.2 million and $ 81.2 million during the three and nine months ended September 30, 2024, respectively.

The Company recognized income tax expense of $ 49.8 million and $ 151.7 million during the three and nine months ended September 30, 2023, respectively.

During the three months ended September 30, 2024, the Company entered into a Tax Credit Transfer Agreement (“TCTA”) with a third-party seller, pursuant to which the Company agreed to purchase up to $ 40.0 million of transferable tax credits under the Inflation Reduction Act.

The benefit for the federal income tax credits purchased has been recognized as part of the Company’s overall effective annual tax rate.

As of September 30, 2024 and December 31, 2023, the Company recognized a net deferred tax liability in the amount of $ 102.3 million.

Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial reporting and tax bases of assets and liabilities, and are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

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As such, the Company recorded an increase of $ 7.8 million of deferred tax assets for the impact of the adopted plan of merger of Liberty LLC into the Company.

Additionally, exchanges of Liberty LLC Units and shares of Class B Common Stock resulted in a net increase of $ 0.7 million in deferred tax assets, and an increase of $ 0.6 million in amounts payable under the TRAs, all of which was recorded through equity during the six months ended June 30, 2023.

As of June 30, 2024, the Company ’ s liability under the TRAs was $ 112.4 million of which $ 37.4 million is payable within the next 12 months, and $ 75.0 million thereafter.

The Company made TRA payments of $ 5.2 million for the six months ended June 30, 2024.

As of September 30, 2024, the Company ’ s liability under the TRAs was $ 112.4 million of which $ 37.4 million is payable within the next 12 months, and $ 75.0 million thereafter.

The Company made TRA payments of $ 5.2 million for the nine months ended September 30, 2024.

As of December 31, 2023, the Company ’ s liability under the TRAs was $ 117.7 million, of which $ 5.2 million was presented as a current liability, and $ 112.5 million was presented as a long-term liability.

The Company did not make any TRA payments for the six months ended June 30, 2023.

The Company did not make any TRA payments for the nine months ended September 30, 2023.

Note 12— Defined Contribution Plan

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The Company makes matching contributions at a rate of $ 1.00 for each $1.00 of employee contribution, subject to a cap of 6 % of the employee’s salary and federal limits.

Contributions made by the Company wer e $ 9.3 million and $ 8.6 million for the three months ended June 30, 2024 and 2023, respectively, and $ 18.0 million and $ 16.2 million for the six months ended June 30, 2024 and 2023, respectively.

Note 13— Related Party Transactions

Schlumberger Limited

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

Contributions made by the Company wer e $ 9.9 million and $ 8.2 million for the three months ended September 30, 2024 and 2023, respectively, and $ 27.9 million and $ 24.4 million for the nine months ended September 30, 2024 and 2023, respectively.

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

consideration.

During the six months ended June 30, 2023, the Company repurchased and retired 3,000,000 shares of Class A Common Stock for $ 45.0 million or $ 15.00 average price per share from Schlumberger, under the share repurchase program.

Note 13— Related Party Transactions

Schlumberger Limited

During the nine months ended September 30, 2023, the Company repurchased and retired 3,000,000 shares of Class A Common Stock for $ 45.0 million or $ 15.00 average price per share from Schlumberger, under the share repurchase program.

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

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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 three and six months ended June 30, 2024, the Company performed hydraulic fracturing services for Franklin Mountain in the amount of $ 41.6 million and $ 53.1 million, respectively.

During the three and six months ended June 30, 2023, the Company performed hydraulic fracturing services for Franklin Mountain in the amount of $ 43.5 million and $ 66.8 million, respectively.

Amounts included in unbilled revenue from Franklin Mountain as of June 30, 2024 and December 31, 2023 were $ 20.7 million and $ 13.4 million, respectively.

Receivables from Franklin Mountain as of June 30, 2024 and December 31, 2023 were $ 0.0 million and $ 12.1 million, respectively.

During the three and nine months ended September 30, 2024, the Company performed hydraulic fracturing services for Franklin Mountain in the amount of $ 26.6 million and $ 79.7 million, respectively.

During the three and nine months ended September 30, 2023, the Company performed hydraulic fracturing services for Franklin Mountain in the amount of $ 61.2 million and $ 128.0 million, respectively.

Amounts included in unbilled revenue from Franklin Mountain as of September 30, 2024 and December 31, 2023 were $ 4.0 million and $ 13.4 million, respectively.

Receivables from Franklin Mountain as of September 30, 2024 and December 31, 2023 were $ 0.0 million and $ 12.1 million, respectively.

Liberty Resources LLC

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Effective March 14, 2024, the Affiliate was no longer a related party, following its acquisition by an unaffiliated party.

The amounts of the Company’s revenue related to hydraulic fracturing services provided to the Affiliate for the period January 1, 2024 through March 13, 2024, and the three and six months ended June 30, 2023, were $ 11.1 million, $ 8.7 million, and $ 15.2 million, respectively.

The amounts of the Company’s revenue related to hydraulic fracturing services provided to the Affiliate for the period January 1, 2024 through March 13, 2024, and the three and nine months ended September 30, 2023, were $ 11.1 million, $ 18.4 million, and $ 33.5 million, respectively.

On December 28, 2022 (the “Agreement Date”), the Company entered into an agreement with the Affiliate to amend payment terms for outstanding invoices due as of the Agreement Date to be due on April 1, 2024.

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Receivables from the Affiliate as of December 31, 2023 were $ 5.2 million, included in accounts receivable—related party.

During the period January 1, 2024 through March 13, 2024, and the three and six months ended June 30, 2023, interest income from the Affiliate was $ 0.5 million, $ 0.4 million, and $ 0.7 million, respectively.

During the period January 1, 2024 through March 13, 2024, and the three and nine months ended September 30, 2023, interest income from the Affiliate was $ 0.5 million, $ 0.5 million, and $ 1.3 million, respectively.

During the three months ended September 30, 2023, the Company invested $ 10.0 million in a fission power and nuclear fuel recycling company, Oklo.

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Additionally, Chris Wright, the Company ’ s Chief Executive Officer and Chairman of the Board, was appointed to the Oklo board of directors.

During the three months ended June 30, 2024, the Company recorded an unrealized gain of $ 7.4 million included in unrealized gain on investments, net in the accompanying unaudited condensed consolidated statements of operations.

As of June 30, 2024, the fair value of the Company ’ s investment using Level 1 inputs was $ 17.4 million.

The Company was not party to any other transactions with Oklo during the three and six months ended June 30, 2024, and 2023.

During the three and nine months ended September 30, 2024, the Company recorded an unrealized loss of $ 0.8 million and an unrealized gain of $ 6.6 million, respectively, included in unrealized loss (gain) on investments, net in the accompanying unaudited condensed consolidated statements of operations.

As of September 30, 2024, the fair value of the Company ’ s investment using Level 1 inputs was $ 16.6 million.

The Company was not party to any other transactions with Oklo during the three and nine months ended September 30, 2024, and 2023.

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

Note 14— Commitments & Contingencies

Purchase Commitments (tons and gallons are not in thousands)

Purchase Commitments (tons are not in thousands)

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

As of June 30, 2024 and December 31, 2023, the agreements provide pricing and committed supply sources for the Company to purchas e 797,254 tons and 1,854,000 tons, respectively, of proppant through December 31, 2025.

As of September 30, 2024 and December 31, 2023, the agreements provide pricing and committed supply sources for the Company to purchas e 463,500 tons and 1,854,000 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.

LIBERTY ENERGY INC.

Notes to Condensed Consolidated Financial Statements

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

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

Included in the commitments for the remainder of 2024 are $ 2.8 million of payments expected to be made in the third 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.

Included in the commitments for the remainder of 2024 are $ 2.7 million of payments expected to be made in the fourth 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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Note 15— Selected Quarterly Financial Data

The following tables summarizes consolidated changes in equity for the three months ended June 30, 2024 and 2023:

The following tables summarizes consolidated changes in equity for the three months ended September 30, 2024 and 2023:

Balance—March 31, 2024 165,202 — $ 1,652 $ — $ 1,070,383 $ 822,256 $ ( 9,807 ) $ 1,884,484

Offering Costs — — — — — — — —

Balance—June 30, 2024 165,332 — $ 1,653 $ — $ 1,027,939 $ 918,836 $ ( 11,533 ) $ 1,936,895

$ 0.07 /share of Class A Common Stock dividend

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Stock-based compensation expense — — — — 8,121 — — 8,121

Vesting of restricted stock units, net 1,450 — 14 — ( 19,781 ) — — ( 19,767 )

Currency translation adjustment — — — — — — 1,647 1,647

Net income — — — — — 73,804 — 73,804

Balance—June 30, 2024 165,332 — $ 1,653 $ — $ 1,027,939 $ 918,836 $ ( 11,533 ) $ 1,936,895

Balance—September 30, 2024 163,393 — $ 1,634 $ — $ 996,336 $ 980,914 $ ( 9,886 ) $ 1,968,998

Balance—March 31, 2023 173,945 $ — $ 1,739 $ — $ 1,208,183 $ 388,064 $ ( 7,867 ) $ 1,590,119

Balance—June 30, 2023 170,393 $ — $ 1,704 $ — $ 1,146,130 $ 531,974 $ ( 5,867 ) $ 1,673,941

Deferred tax and tax receivable agreements impact of Liberty LLC merger into the Company — — — — ( 1,204 ) — — ( 1,204 )

$ 0.05 /share of Class A Common Stock dividend

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Stock-based compensation expense — — — — 8,595 — — 8,595

Vesting of restricted stock units, net 1,170 — 12 — ( 9,332 ) — — ( 9,320 )

Currency translation adjustment — — — — — — ( 3,148 ) ( 3,148 )

Net income — — — — — 148,608 — 148,608

Balance—June 30, 2023 170,393 — 1,704 — 1,146,130 531,974 ( 5,867 ) $ 1,673,941

Balance—September 30, 2023 168,608 — 1,686 — 1,123,967 671,924 ( 9,015 ) $ 1,788,562

Note 16— Subsequent Events

On July 16, 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 September 20, 2024 to holders of record as of September 6, 2024.

On October 15, 2024, the Company’s board of directors approved a quarterly dividend of $ 0.08 per share of Class A Common Stock to be paid on December 20, 2024 to holders of record as of December 6, 2024.

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

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We assume no obligation to update any of these forward-looking statements.

We offer customers hydraulic fracturing services, together with complementary services including wireline services, proppant delivery solutions, field gas processing and treating, CNG delivery, data analytics, related goods (including our sand mine operations), and technologies to facilitate lower emission completions, thereby helping our customers reduce their emissions profile.

We have grown from one active hydraulic fracturing fleet in December 2011 to over 40 active fleets as of June 30, 2024.

We have grown from one active hydraulic fracturing fleet in December 2011 to over 40 active fleets as of September 30, 2024.

We provide our services primarily in the Permian Basin, the Williston Basin, the Eagle Ford Shale, the Haynesville Shale, the Appalachian Basin (Marcellus Shale and Utica Shale), the Western Canadian Sedimentary Basin, the DJ Basin, and the Anadarko Basin.

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(iv) our dual fuel dynamic gas blending (“DGB”) fleets that allow our engines to run diesel or a combination of diesel and natural gas, to optimize fuel use, reduce emissions and lower costs;

(v) our digiFleets℠, comprising of digiFrac℠ and digiPrime℠ pumps, our innovative, purpose-built electric and hybrid frac pumps that have approximately 25% lower CO2e emission profile than the Tier IV DGB;

(v) our digiFleets℠, comprising of digiFrac℠ and digiPrime℠ pumps and other complementary equipment (together “digiTechnologies℠”), our innovative, purpose-built electric and hybrid frac pumps that have approximately 25% lower CO 2 e emission profile than the Tier IV DGB;

(vi) our wet sand handling technology which eliminates the need to dry sand, enabling the deployment of mobile mines nearer to wellsites;

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Recent Trends and Outlook

Global oil and gas markets are expected to remain constructive on favorable multi-year market fundamentals, despite near term volatility in commodity prices.

In June 2024, a decision from OPEC+ to gradually unwind voluntary production cuts beginning in October drove oil prices lower.

Even then, prices were well above those supportive of attractive E&P returns and have since recovered on relatively balanced supply and demand dynamics owing to resilient global economic growth and rising demand for transportation fuels with the summer travel season underway.

Natural gas prices saw a resurgence from early spring lows on reduced drilling and completions activity and curtailed production.

Recent reinstatement of some curtailed production has moved prices downward but still above recent cycle lows.

The commissioning of new LNG export facilities and continued growth in power demand are expected to drive higher natural gas demand, and eventually firmer natural gas prices.

Frac industry trends have moderated marginally in recent periods, on the heels of slightly softer drilling activity in both oil and gas basins during the first half of 2024.

Industry-wide completions activity has declined to levels consistent with only flat oil and gas production, and we believe completions activity will need to increase from current levels in order for the U.S.

to increase oil and gas production.

We expect this to lead to a resurgence in demand for quality frac crews in 2025.

During the second quarter of 2024, the posted WTI price traded at an average of $81.81 per barrel (“Bbl”), as compared to the second quarter of 2023 average of $73.54 per Bbl, and the first quarter of 2024 average of $77.50 per Bbl.

Subsequent to June 30, 2024, the WTI price traded at an average of $84.41 per Bbl through July 8, 2024.

In addition, the average domestic onshore rig count for the United States and Canada was 716 rigs reported in the second quarter of 2024, down from the second quarter of 2023 of 815, and the first quarter of 2024 of 810, according to a report from Baker Hughes.

The oil markets reflect uncertainty across the global economy, OPEC+ production plans, Chinese economic growth, and Middle East geopolitical dynamics.

However, global demand for oil is expected to grow by approximately one million barrels of oil per day in 2024 and is forecasted to do the same again in 2025.

While global oil production may be in a surplus in 2025, oil prices are expected to remain relatively rangebound and supportive of North American E&P activity.

With respect to natural gas markets, producer curtailments and domestic power generation demand have led to recent increases in natural gas prices after storage congestion concerns eased.

However, higher prices may not be sustained should they incentivize reversal of curtailments.

The commissioning of LNG export facilities in the U.S.

and Canada is expected to stimulate gas activity in 2025 and support natural gas demand.

Elevated uncertainty in energy markets has further left operators reluctant to accelerate completions activity in advance of the new year.

Completions activity is expected to increase in early 2025 to support flattish E&P oil & gas production targets.

Since late 2023, U.S.

crude oil production has been relatively flat and would likely decline if current completions activity levels persist.

Frac industry dynamics are poised to improve in 2025 from today’s levels.

Soft year end frac activity levels are pressuring prices in the near term to levels that are inconsistent with the anticipated market demand and supply of horsepower in 2025.

It is important that service prices support investment, especially given aging equipment, industry underinvestment in next generation technologies, and growing fleet sizes.

During the third quarter of 2024, the posted WTI price traded at an average of $76.43 per barrel (“Bbl”), as compared to the third quarter of 2023 average of $82.25 per Bbl, and the second quarter of 2024 average of $81.81 per Bbl.

In addition, the average domestic onshore rig count for the United States and Canada was 772 rigs reported in the third quarter of 2024, down from the third quarter of 2023 of 817, but up from the second quarter of 2024 of 716, according to a report from Baker Hughes.

Results of Operations

Three Months Ended June 30, 2024, Compared to Three Months Ended June 30, 2023

Three months ended June 30,

Three Months Ended September 30, 2024, Compared to Three Months Ended September 30, 2023

Three months ended September 30,

Description 2024 2023 Change

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Net income 73,804 148,608 (74,804)

Our revenue decreased $35.1 million , or 2.9% , to $1.2 billion for the three months ended June 30, 2024 compared to $1.2 billion for the three months ended June 30, 2023.

The decrease in revenue was attributable to a decrease in materials pricing and slightly lower services prices, partially offset by higher activity levels.

The impact of increased fleet efficiency more than exceeded a decrease in fleet utilization that resulted from lower industry demand for hydraulic fracturing services.

Our revenue decreased $77.3 million, or 6.4%, to $1.1 billion for the three months ended September 30, 2024 compared to $1.2 billion for the three months ended September 30, 2023.

The decrease in revenue was attributable to a decrease in service and materials pricing, partially offset by higher activity levels primarily from increased fleet efficiency.

Cost of Services

Cost of services (excluding depreciation, depletion, and amortization) increased $2.3 million , or 0.3% , to $835.8 million for the three months ended June 30, 2024 compared to $833.5 million for the three months ended June 30, 2023.

The increase in expense was primarily related to increased activity levels largely offset by decreases in materials pricing.

Cost of services (excluding depreciation, depletion, and amortization) decreased $10.0 million, or 1.2%, to $840.3 million for the three months ended September 30, 2024 compared to $850.2 million for the three months ended September 30, 2023.

The decrease in expense was primarily related to decreases in materials costs and lower repairs and maintenance costs, partially offset by increased personnel costs related to higher activity levels discussed above.

General and Administrative

General and administrative expenses were consistent between periods, decreasing $0.3 million , or 0.6% , to $57.7 million for the three months ended June 30, 2024 compared to $58.0 million for the three months ended June 30, 2023.

General and administrative expenses increased $3.6 million , or 6.5% , to $58.6 million for the three months ended September 30, 2024 compared to $55.0 million for the three months ended September 30, 2023.

The increase was primarily attributable to increased corporate costs to support our additional service offerings, partially offset by a decrease in cash incentive and stock-based compensation expense due to lower operating results compared to the prior year period.

Transaction and Other Costs

Transaction and other costs decreased $1.0 million, or 100.0%, to $0 million for the three months ended June 30, 2024 compared to $1.0 million for the three months ended June 30, 2023.

The costs incurred during the three months ended June 30, 2023 primarily consisted of due diligence work for the Siren Acquisition.

Transaction and other costs decreased $0.2 million, or 100.0%, as the Company did not incur such costs for the three months ended September 30, 2024 compared to $0.2 million for the three months ended September 30, 2023.

The costs incurred during the three months ended September 30, 2023 primarily consisted of due diligence work for the Siren Acquisition.

See Note 2—Significant Accounting Policies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for further details.

Depreciation, Depletion, and Amortization

Depreciation, depletion, and amortization expense increased $23.6 million , or 23.7% , to $123.3 million for the three months ended June 30, 2024 compared to $99.7 million for the three months ended June 30, 2023.

The increase during the three months ended June 30, 2024 was due to additional equipment placed in service since the prior year quarter, including equipment related to the deployment of our digiTechnologies SM .

Depreciation, depletion, and amortization expense increased $17.4 million , or 16.0% , to $126.4 million for the three months ended September 30, 2024 compared to $109.0 million for the three months ended September 30, 2023.

The increase during the three months ended September 30, 2024 was due to additional equipment placed in service since the prior year period, including equipment related to the deployment of our digiTechnologies SM .

Loss (gain) on Disposal of Assets

The Company recorded a loss on disposal of assets of $1.2 million for the three months ended June 30, 2024 compared to a gain of $3.7 million for the three months ended June 30, 2023, primarily related to sales of used field equipment and light duty trucks in a strong used vehicle and equipment market.

All disposals were in the normal course of business.

The Company recorded a loss on disposal of assets of $6.0 million for the three months ended September 30, 2024 compared to a gain of $3.8 million for the three months ended September 30, 2023.

The loss for the three months ended September 30, 2024 related to the disposal of used older technology field equipment that was no longer operational.

The gain for the three months ended September 30, 2023 primarily related to sales of used field equipment and light duty trucks in a strong used vehicle and equipment market.

Other Expense, net

Other expense, net decreased by $5.6 million, or 86.7%, to $0.9 million for the three months ended June 30, 2024 compared to $6.5 million for the three months ended June 30, 2023.

Other expense, net is comprised of unrealized gain on investments, net, interest expense, net, and interest income—related party.

The Company recorded an unrealized gain on investments, net of $7.2 million related to two equity investments measured at fair value during the three months ended June 30, 2024, compared to $0 for the three months ended June 30, 2023.

Other expense, net increased by $4.5 million, or 67.0%, to $11.3 million for the three months ended September 30, 2024 compared to $6.8 million for the three months ended September 30, 2023.

Other expense, net is comprised of unrealized loss on investments, net, interest expense, net, and interest income—related party.

The Company recorded an unrealized loss on investments, net of $2.7 million related to two equity investments measured at fair value during the three months ended September 30, 2024, compared to $0 for the three months ended September 30, 2023.

Interest expense, net increased $1.3 million as a result of the addition of finance lease liabilities, refer to “Liquidity and Capital Resources” below for further discussion of the Company’s finance leases.

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Income Tax Expense

The Company recognized income tax expense of $32.6 million for the three months ended June 30, 2024, an effective rate of 23.1%, compared to $47.3 million for the three months ended June 30, 2023, an effective rate of 23.7%.

The Company recognized income tax expense of $22.2 million for the three months ended September 30, 2024, an effective rate of 23.1%, compared to $49.8 million for the three months ended September 30, 2023, an effective rate of 25.1%.

The decrease in income tax expense was primarily attributable to the decrease in net income before income taxes.

Six Months Ended June 30, 2024, Compared to Six Months Ended June 30, 2023

Six months ended June 30,

Nine Months Ended September 30, 2024, Compared to Nine Months Ended September 30, 2023

Nine months ended September 30,

Description 2024 2023 Change

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stockholders $ 264,117 $ 463,934 $ (199,817)

Our revenue decreased $224.1 million, or 9.1%, to $2.2 billion for the six months ended June 30, 2024 compared to $2.5 billion for the six months ended June 30, 2023.

The decrease in revenue was primarily attributable to a decrease in materials pricing and slightly lower services prices, partially offset by higher activity levels.

The impact of increased fleet efficiency more than exceeded a decrease in fleet utilization that resulted from lower industry demand for hydraulic fracturing services.

Our revenue decreased $301.4 million, or 8.2%, to $3.4 billion for the nine months ended September 30, 2024 compared to $3.7 billion for the nine months ended September 30, 2023.

The decrease in revenue was attributable to a decrease in service and materials pricing, partially offset by higher activity levels primarily from increased fleet efficiency.

Cost of Services

Cost of services (excluding depreciation, depletion, and amortization) decreased $103.4 million, or 6.0%, to $1.6 billion for the six months ended June 30, 2024 compared to $1.7 billion for the six months ended June 30, 2023.

The decrease in expense was primarily related to decreases in materials pricing and lower fleet utilization, partially offset by higher activity levels during the six months ended June 30, 2024.

Cost of services (excluding depreciation, depletion, and amortization) decreased $113.4 million, or 4.4%, to $2.5 billion for the nine months ended September 30, 2024 compared to $2.6 billion for the nine months ended September 30, 2023.

General and Administrative

General and administrative expenses were consistent between periods, decreasing $0.4 million, or 0.3%, to $110.7 million for the six months ended June 30, 2024 compared to $111.1 million for the six months ended June 30, 2023.

General and administrative expenses increased $3.2 million, or 1.9%, to $169.3 million for the nine months ended September 30, 2024 compared to $166.1 million for the nine months ended September 30, 2023.

Transaction and Other Costs

Transaction and other costs decreased $1.6 million, or 100.0%, to $0.0 million for the six months ended June 30, 2024 compared to $1.6 million for the six months ended June 30, 2023.

The costs incurred during the six months ended June 30, 2023 primarily consisted of due diligence work for the Siren Acquisition.

Transaction and other costs decreased $1.8 million, or 100.0%, as the Company did not incur such costs for the nine months ended September 30, 2024 compared to $1.8 million for the nine months ended September 30, 2023.

The costs incurred during the nine months ended September 30, 2023 primarily consisted of due diligence work for the Siren Acquisition.

See Note 2—Significant Accounting Policies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for further details.

Depreciation, Depletion, and Amortization

Depreciation, depletion, and amortization expense increased $52.4 million, or 27.0%, to $246.5 million for the six months ended June 30, 2024 compared to $194.1 million for the six months ended June 30, 2023.

The increase in 2024 was due to additional equipment placed in service since the prior year period, including equipment related to the deployment of our digiTechnologies SM .

Depreciation, depletion, and amortization expense increased $69.8 million, or 23.0%, to $372.9 million for the nine months ended September 30, 2024 compared to $303.1 million for the nine months ended September 30, 2023.

The increase in the nine months ended September 30, 2024 was due to additional equipment placed in service since the prior year period, including equipment related to the deployment of our digiTechnologies SM .

Loss (gain) on disposal of assets

The Company recognized a loss on disposal of assets of $0.1 million for the six months ended June 30, 2024 compared to a gain of $3.2 million for the six months ended June 30, 2023, primarily related to sales of used field equipment and light duty trucks in a strong used vehicle and equipment market.

All disposals were in the normal course of business.

The Company recognized a loss on disposal of assets of $6.1 million for the nine months ended September 30, 2024 compared to a gain of $7.0 million for the nine months ended September 30, 2023.

The loss for the nine months ended September 30, 2024 related to the disposal of used older technology field equipment that was no longer operational.

The gain for the nine months ended September 30, 2023 primarily related to sales of used field equipment and light duty trucks in a strong used vehicle and equipment market.

Other Expense, net

Other expense, net decreased by $6.4 million to $7.9 million for the six months ended June 30, 2024 compared to $14.4 million for the six months ended June 30, 2023.

Other expense, net decreased by $1.9 million to $19.2 million for the nine months ended September 30, 2024 compared to $21.1 million for the nine months ended September 30, 2023.

Other expense, net is comprised of unrealized gain on investments, net, interest expense, net, and interest income—related party.

The Company recorded an unrealized gain on investments, net of $7.2 million related to two equity investments measured at fair value during the six months ended June 30, 2024, compared to $0 for the six months ended June 30, 2023.

The Company recorded an unrealized gain on investments, net of $4.5 million related to two equity investments measured at fair value during the nine months ended September 30, 2024, compared to $0 for the nine months ended September 30, 2023.

Interest expense, net increased $1.8 million as a result of the addition of finance lease liabilities, refer to “Liquidity and Capital Resources” below for further discussion of the Company’s finance leases.

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Income Tax Expense

The Company recognized income tax expense of $59.0 million for the six months ended June 30, 2024, an effective rate of 23.7%, compared to $101.8 million for the six months ended June 30, 2023, an effective rate of 24.4%.

The Company recognized income tax expense of $81.2 million for the nine months ended September 30, 2024, an effective rate of 23.5%, compared to $151.7 million for the nine months ended September 30, 2023, an effective rate of 24.6%.

The decrease in income tax expense was primarily attributable to the decrease in net income before income taxes.

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We define EBITDA as net income before interest, income taxes, and depreciation, depletion, and amortization.

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

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

Our board of directors, management, investors, and lenders use EBITDA and Adjusted EBITDA to assess our financial performance because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation, depletion, and amortization) and other items that impact the comparability of financial results from period to period.

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

Three and Six Months Ended June 30, 2024, Compared to Three and Six Months Ended June 30, 2023:

Three and Nine Months Ended September 30, 2024, Compared to Three and Nine Months Ended September 30, 2023:

EBITDA and Adjusted EBITDA

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

Description 2024 2023 Change 2024 2023 Change

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Loss (gain) on disposal of assets 6,017 (3,808) 9,825 6,105 (6,981) 13,086

Unrealized gain on investments, net (7,201) — (7,201) (7,201) — (7,201)

Unrealized loss (gain) on investments, net 2,727 — 2,727 (4,474) — (4,474)

Transaction and other costs — 202 (202) — 1,804 (1,804)

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Adjusted EBITDA $ 247,811 $ 319,213 $ (71,402) $ 765,853 $ 960,561 $ (194,708)

EBITDA was $272.3 million for the three months ended June 30, 2024 compared to $306.2 million for the three months ended June 30, 2023.

Adjusted EBITDA was $273.3 million for the three months ended June 30, 2024 compared to $311.5 million for the three months ended June 30, 2023.

The decreases in EBITDA and Adjusted EBITDA primarily resulted from modestly lower pricing and changes in activity levels as described above under the captions Revenue , Cost of Services , and General and Administrative for the Three Months Ended June 30, 2024, Compared to the Three Months Ended June 30, 2023 .

EBITDA was $511.0 million for the six months ended June 30, 2024 compared to $625.7 million for the six months ended June 30, 2023.

Adjusted EBITDA was $518.0 million for the six months ended June 30, 2024 compared to $641.3 million for the six months ended June 30, 2023.

The decreases in EBITDA and Adjusted EBITDA primarily resulted from modestly lower pricing and changes in activity levels as described above under the captions Revenue , Cost of Services , and General and Administrative for the Six Months Ended June 30, 2024, Compared to the Six Months Ended June 30, 2023 .

EBITDA was $230.9 million for the three months ended September 30, 2024 compared to $314.2 million for the three months ended September 30, 2023.

Adjusted EBITDA was $247.8 million for the three months ended September 30, 2024 compared to $319.2 million for the three months ended September 30, 2023.

The decreases in EBITDA and Adjusted EBITDA primarily resulted from lower pricing and partially offset by changes in activity levels as described above under the captions Revenue , Cost of Services , and General and Administrative for the Three Months Ended September 30, 2024, Compared to the Three Months Ended September 30, 2023 .

EBITDA was $741.9 million for the nine months ended September 30, 2024 compared to $939.9 million for the nine months ended September 30, 2023.

Adjusted EBITDA was $765.9 million for the nine months ended September 30, 2024 compared to $960.6 million for the nine months ended September 30, 2023.

The decreases in EBITDA and Adjusted EBITDA primarily resulted from lower pricing and partially offset by changes in activity levels as described above under the captions Revenue , Cost of Services , and General and Administrative for the Nine Months Ended September 30, 2024, Compared to the Nine Months Ended September 30, 2023 .

Liquidity and Capital Resources

Our primary sources of liquidity consist of cash flows from operations and borrowings under our ABL Facility.

Our primary sources of liquidity consist of cash flows from operations and borrowings under our ABL Facility (as defined below).

We expect to fund operations and organic growth with these sources.

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Our primary uses of capital have been capital expenditures to support organic growth and funding ongoing operations, including maintenance and fleet upgrades, as well as the repurchases of, and dividends on, shares of our Class A Common Stock.

Cash and cash equivalents decreased by $6.8 million to $30.0 million as of June 30, 2024 compared to $36.8 million as of December 31, 2023, while working capital excluding cash and current liabilities under lease arrangements decreased $32.0 million.

As of June 30, 2024, the Company had one credit agreement outstanding, a revolving line of credit up to $525.0 million (the “ABL Facility”).

Cash and cash equivalents decreased by $13.8 million to $23.0 million as of September 30, 2024 compared to $36.8 million as of December 31, 2023, while working capital excluding cash and current liabilities under lease arrangements decreased $101.5 million.

As of September 30, 2024, the Company had one credit agreement outstanding, a revolving line of credit up to $525.0 million (the “ABL Facility”).

The ABL Facility is subject to certain borrowing base limitations based on a percentage of eligible accounts receivable and inventory available to finance working capital needs.

As of June 30, 2024, the borrowing base was calculated to be $395.6 million, and the Company had $147.0 million outstanding, in addition to a letter of credit in the amount of $7.4 million, with $241.2 million of remaining availability.

As of September 30, 2024, the borrowing base was calculated to be $459.7 million, and the Company had $123.0 million outstanding, in addition to letters of credit in the amount of $7.4 million, with $329.3 million of remaining availability.

The ABL Facility contains covenants that restrict our ability to take certain actions.

As of June 30, 2024, we were in compliance with all debt covenants.

As of September 30, 2024, we were in compliance with all debt covenants.

See Note 7 —Debt to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for further details.

We have no material off balance sheet arrangements as of June 30, 2024, except for purchase commitments under supply agreements as disclosed above under Note 14—Commitments & Contingencies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report.

We have no material off balance sheet arrangements as of September 30, 2024, except for purchase commitments under supply agreements as disclosed above under Note 14—Commitments & Contingencies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report.

As such, we are not materially exposed to any other financing, liquidity, market, or credit risk that could arise if we had engaged in such financing arrangements.

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Under our share repurchase program, the Company is authorized to repurchase up to $750.0 million of outstanding Class A Common Stock through and including July 31, 2026.

Shares may be repurchased from time to time for cash in the open market transactions, through block trades, in privately negotiated transactions, through derivative transactions or by other means in accordance with applicable federal securities laws.

Shares may be repurchased from time to time for cash in open market transactions, through block trades, in privately negotiated transactions, through derivative transactions, or by other means in accordance with applicable federal securities laws.

The timing and the amount of repurchases will be determined by the Company at its discretion based on an evaluation of market conditions, capital allocation alternatives and other factors.

The share repurchase program does not require us to purchase any dollar amount or number of shares of our Class A Common Stock and may be modified, suspended, extended or terminated at any time without prior notice.

The Company expects to fund 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 three and six months ended June 30, 2024, the Company repurchased and retired shares of Class A Common Stock for $29.6 million and $59.7 million, respectively, under the share repurchase program.

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

During the three and nine months ended September 30, 2024, the Company repurchased and retired shares of Class A Common Stock for $39.4 million and $99.1 million, respectively, under the share repurchase program.

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

Six Months Ended June 30,

Nine Months Ended September 30,

Description 2024 2023 Change

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(210,804) (208,340) (2,464)

Analysis of Cash Flow Changes Between the Six Months Ended June 30, 2024 and 2023

Analysis of Cash Flow Changes Between the Nine Months Ended September 30, 2024 and 2023

Operating Activities .

Net cash provided by operating activities was $407.6 million for the six month s ended June 30, 2024, compared to $444.4 million for the six months ended June 30, 2023.

The $36.8 million decrease in cash from operating activities is primarily attributable to a $224.1 million decrease in revenues, offset by a $145.5 million decrease in cash operating expenses, interest expense, net, and income tax, and a $37.6 million decrease in cash from changes in working capital for the six months ended June 30, 2024, compared to a $79.4 million decrease in cash from changes in working capital for the six months ended June 30, 2023.

Net cash provided by operating activities was $652.1 million for the nine month s ended September 30, 2024, compared to $719.8 million for the nine months ended September 30, 2023.

The $67.8 million decrease in cash from operating activities is primarily attributable to a $301.4 million decrease in revenues, offset by a $179.9 million decrease in cash operating expenses, interest expense, net, and income tax, and a $10.6 million decrease in cash from changes in working capital for the nine months ended September 30, 2024, compared to a $64.3 million decrease in cash from changes in working capital for the nine months ended September 30, 2023.

Investing Activities .

Net cash used in investing activities was $292.1 million for the six months ended June 30, 2024, compared to $356.3 million for the six months ended June 30, 2023.

Cash used in investing activities was lower during the six months ended June 30, 2024, compared to the six months ended June 30, 2023 primarily due to the Siren Acquisition and modestly higher capital spending in the prior year period, partially offset by equity investments in the current year period.

The Company purchased Siren Energy for $74.9 million in cash, net of cash received, during the six months ended June 30, 2023.

Net cash used in investing activities was $455.0 million for the nine months ended September 30, 2024, compared to $528.4 million for the nine months ended September 30, 2023.

Cash used in investing activities was lower during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023 primarily due to the Siren Acquisition, modestly higher capital spending in the prior year period, and lower proceeds from asset sales, partially offset by equity investments in the current year period.

The Company purchased Siren Energy for $75.7 million in cash, net of cash received, during the nine months ended September 30, 2023.

Refer to Note 2—Significant Accounting Policies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for additional information related to the acquisition.

Investments in equipment, including the new digiTechnologies SM suite and capitalized maintenance of existing equipment decreased $11.3 million, from $292.3 million for the six months ended June 30, 2023 to $281.0 million for the six months ended June 30, 2024.

Finally, during the three months ended June 30, 2024, the Company spent $16.1 million for equity investments in Tamboran Resources Corporation, Empire Energy Group Ltd., and Falcon Oil & Gas Ltd.

Investments in equipment, including the new digiTechnologies SM suite and capitalized maintenance of existing equipment decreased $17.7 million, from $465.2 million for the nine months ended September 30, 2023 to $447.5 million for the nine months ended September 30, 2024.

Proceeds from asset sales decreased $13.8 million, from $22.4 million to $8.6 million as the Company benefited from strong used vehicle and equipment markets in the prior period.

Finally, during the nine months ended September 30, 2024, the Company spent $16.1 million for equity investments in Tamboran Resources Corporation, Empire Energy Group Ltd., and Falcon Oil & Gas Ltd, compared to $10.0 million for an equity investment in Oklo Inc.

during the nine months ended September 30, 2023.

Financing Activities .

Net cash used in financing activities was $122.0 million for the six months ended June 30, 2024, compared to net cash used in financing activities of $100.2 million for the six months ended June 30, 2023.

The $21.8 million increase in cash used in financing activities was primarily due to a $15.4 million increase in cash paid for finance leases, $10.4 million increase in cash tax withholding on restricted stock unit vestings, and a $6.3 million increase in dividends paid, combined with a $61.3 million decrease in net proceeds from borrowings, offset by a $75.0 million decrease in share repurchases for the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

Net cash used in financing activities was $210.8 million for the nine months ended September 30, 2024, compared to net cash used in financing activities of $208.3 million for the nine months ended September 30, 2023.

The $2.5 million increase in cash used in financing activities was primarily due to a $24.0 million increase in cash paid for finance leases, a $10.4 million increase in cash tax withholding on restricted stock unit vestings, and a $9.3 million increase in dividends paid, combined with net repayment of borrowings of $17.0 million during the current year period compared to $3.3 million in net borrowings during the prior year, offset by a $64.9 million decrease in share repurchases for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Cash Requirements

Our material cash commitments consist primarily of obligations under long-term debt on the ABL Facility, TRAs, finance and operating leases for property and equipment, cash used to pay for repurchases of, and dividends on, shares of our Class A Common Stock, and purchase obligations as part of normal operations.

Certain amounts included in our contractual obligations as of June 30, 2024 are based on our estimates and assumptions about these obligations, including pricing, volumes, and duration.

We have no material off balance sheet arrangements as of June 30, 2024, except for purchase commitments under supply agreements of $60.4 million payable within 2024, and $13.0 million payable thereafter.

Certain amounts included in our contractual obligations as of September 30, 2024 are based on our estimates and assumptions about these obligations, including pricing, volumes, and duration.

We have no material off balance sheet arrangements as of September 30, 2024, except for purchase commitments under supply agreements of $36.6 million payable within 2024, and $13.0 million payable thereafter.

See Note 14 —Commitments & Contingencies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for information regarding scheduled contractual obligations.

During the three and six months ended June 30, 2024, the Company expanded its equipment lease facilities resulting in an increase in finance lease obligations of $51.4 million and $81.5 million, respectively.

During the three and nine months ended September 30, 2024, the Company expanded its equipment lease facilities resulting in the addition of $47.5 million and $129.0 million, respectively, in new finance lease obligations.

The term on these new leases range from three to five years.

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The Company is also subject to Canada and Australia federal and provincial income tax on its foreign operations.

The effective global income tax rate applicable to the Company for the six months ended June 30, 2024 was 23.7% compared to 24.4%, for the period ended June 30, 2023.

The effective global income tax rate applicable to the Company for the nine months ended September 30, 2024 was 23.5% compared to 24.6%, for the period ended September 30, 2023.

The Company recognized an income tax expense of $32.6 million and $59.0 million during the three and six months ended June 30, 2024, respectively, and $47.3 million and $101.8 million for the three and six months ended June 30, 2023, respectively.

The Company recognized an income tax expense of $22.2 million and $81.2 million during the three and nine months ended September 30, 2024, respectively, and $49.8 million and $151.7 million for the three and nine months ended September 30, 2023, respectively.

As of June 30, 2024 and December 31, 2023, the Company’s net deferred tax liabilities were $102.3 million.

As of September 30, 2024 and December 31, 2023, the Company’s net deferred tax liabilities were $102.3 million.

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

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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-Q

Item 1. Financial Statements