What changed in this filing

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Item 1. Financial Statements

2024-10-31 compared with 2024-08-01 · 84 added, 79 removed, 420 unchanged (28% of the section changed)

3 unchanged sentences

(In thousands)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

ASSETS (Unaudited) (Audited)

42 unchanged sentences

(In thousands, except per share data)

Three Months Ended Six Months Ended

June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Oil revenues $ 265,682 $ 243,588 $ 800,195 $ 705,857

14 unchanged sentences

OTHER INCOME (EXPENSE)

Interest expense, net ( 3,516 ) ( 1,149 ) ( 5,828 ) ( 662 )

Interest income (expense), net ( 3,856 ) 1,034 ( 9,683 ) 372

Other income (expense), net 7,286 ( 479 ) 4,018 7,643

17 unchanged sentences

Common Stock Additional Paid In Capital Treasury Stock Retained Earnings Total Stockholders’ Equity Noncontrolling Interest Total

For the Three Months Ended June 30, 2023

For the Three Months Ended September 30, 2023

Shares Value Shares Value Shares Value

Balance, March 31, 2023 214,355 $ 21 21,827 $ 2 $ 1,720,487 24,084 $ ( 380,783 ) $ 259,636 $ 1,599,363 $ 167,714 $ 1,767,077

Balance, June 30, 2023 214,400 $ 21 21,827 $ 2 $ 1,731,059 26,334 $ ( 425,604 ) $ 329,011 $ 1,634,489 $ 175,369 $ 1,809,858

Stock based compensation expense, net of forfeitures — — — — 3,758 — — — 3,758 439 4,197

8 unchanged sentences

Net income — — — — — — — 102,030 102,030 15,447 117,477

Balance, June 30, 2023

Balance, September 30, 2023

214,415 $ 21 21,827 $ 2 $ 1,738,668 28,833 $ ( 483,745 ) $ 409,230 $ 1,664,176 $ 182,981 $ 1,847,157

For the Three Months Ended June 30, 2024

Balance, March 31, 2024 215,177 $ 22 21,827 $ 2 $ 1,745,157 33,683 $ ( 591,175 ) $ 547,261 $ 1,701,267 $ 196,517 $ 1,897,784

For the Three Months Ended September 30, 2024

Balance, June 30, 2024 223,167 $ 23 10,958 $ 1 $ 1,815,798 34,683 $ ( 616,747 ) $ 619,000 $ 1,818,075 $ 100,281 $ 1,918,356

Stock based compensation expense, net of forfeitures — — — — 4,487 — — — 4,487 220 4,707

10 unchanged sentences

Net income — — — — — — — 99,784 99,784 6,128 105,912

Balance, June 30, 2024

Balance, September 30, 2024

228,117 $ 23 5,523 $ 1 $ 1,879,447 36,633 $ ( 665,472 ) $ 694,090 $ 1,908,089 $ 52,483 $ 1,960,572

5 unchanged sentences

Common Stock Additional Paid In Capital Treasury Stock Retained Earnings Total Stockholders’ Equity Noncontrolling Interest Total

For the Six Months Ended June 30, 2023

For the Nine Months Ended September 30, 2023

Shares Value Shares Value Shares Value

10 unchanged sentences

Net income — — — — — — — 289,856 289,856 38,893 328,749

Balance, June 30, 2023

Balance, September 30, 2023

214,415 $ 21 21,827 $ 2 $ 1,738,668 28,833 $ ( 483,745 ) $ 409,230 $ 1,664,176 $ 182,981 $ 1,847,157

For the Six Months Ended June 30, 2024

For the Nine Months Ended September 30, 2024

Balance, December 31, 2023 214,497 $ 21 21,827 $ 2 $ 1,743,930 31,333 $ ( 538,445 ) $ 486,162 $ 1,691,670 $ 190,998 $ 1,882,668

11 unchanged sentences

Net income — — — — — — — 280,429 280,429 28,193 308,622

Balance, June 30, 2024

Balance, September 30, 2024

228,117 $ 23 5,523 $ 1 $ 1,879,447 36,633 $ ( 665,472 ) $ 694,090 $ 1,908,089 $ 52,483 $ 1,960,572

3 unchanged sentences

( In thousands)

Six Months Ended

June 30, 2024 June 30, 2023

Nine Months Ended

September 30, 2024 September 30, 2023

CASH FLOWS FROM OPERATING ACTIVITIES

8 unchanged sentences

Deferred income tax expense 51,958 48,213

Loss on revaluation of contingent consideration 3,200 —

Gain on revaluation of contingent consideration ( 3,808 ) —

Stock based compensation 14,161 12,060

9 unchanged sentences

Acquisitions ( 164,995 ) ( 53,812 )

Deposits for acquisitions of oil and natural gas properties — ( 22,503 )

Additions to oil and natural gas properties ( 351,935 ) ( 332,055 )

33 unchanged sentences

Summary of Significant Accounting Policies

As of June 30, 2024, the Company’s significant accounting policies are consistent with those discussed in Note 1—Organization and Summary of Significant Accounting Policies of its consolidated financial statements contained in the Company’s 2023 Form 10-K.

As of September 30, 2024, the Company’s significant accounting policies are consistent with those discussed in Note 1—Organization and Summary of Significant Accounting Policies of its consolidated financial statements contained in the Company’s 2023 Form 10-K.

Recent Accounting Pronouncements

7 unchanged sentences

The Company’s receivables consist mainly of trade receivables from commodity sales and joint interest billings due from owners on properties the Company operates.

Receivables from contracts with customers totaled $ 130.0 million as of June 30, 2024 and $ 124.4 million as of December 31, 2023.

Receivables from contracts with customers totaled $ 115.1 million as of September 30, 2024 and $ 124.4 million as of December 31, 2023.

For further detail regarding the Company’s revenue recognition policies, please refer to Note 1—Organization and Summary of Significant Accounting Policies of the consolidated financial statements contained in the Company’s 2023 Form 10-K.

18 unchanged sentences

Fair Value of Financial Instruments

The carrying value and fair value of the financial instrument that is not carried at fair value in the Company’s consolidated balance sheets at June 30, 2024 and December 31, 2023 are as follows:

June 30, 2024 December 31, 2023

The carrying value and fair value of the financial instrument that is not carried at fair value in the Company’s consolidated balance sheets at September 30, 2024 and December 31, 2023 are as follows:

September 30, 2024 December 31, 2023

(In thousands) Carrying Value Fair Value Carrying Value Fair Value

Long-term debt $ 394,793 $ 399,312 $ 392,839 $ 394,356

The fair value of the 2026 Senior Notes at June 30, 2024 and December 31, 2023 is based on unadjusted quoted prices in an active market, which is considered a Level 1 input in the fair value hierarchy.

The fair value of the 2026 Senior Notes at September 30, 2024 and December 31, 2023 is based on unadjusted quoted prices in an active market, which is considered a Level 1 input in the fair value hierarchy.

Recurring Fair Value Measurements

3 unchanged sentences

The fair value of the contingent consideration is estimated using observable market data (NYMEX WTI forward price curve) and Monte Carlo simulation models, which are considered Level 2 inputs in the fair value hierarchy.

The fair value of the contingent consideration was $ 14.8 million and $ 14.3 million as of June 30, 2024 and December 31, 2023, respectively.

The current portion of the liability included in “Other current liabilities” on the Company’s consolidated balance sheet as of June 30, 2024 and December 31, 2023 was $ 6.0 million and $ 6.7 million, respectively.

The long-term portion of the liability included in “Other long-term liabilities” on the Company’s consolidated balance sheet as of June 30, 2024 and December 31, 2023 was $ 8.8 million and $ 7.6 million, respectively.

The fair value of the contingent consideration was $ 7.8 million and $ 14.3 million as of September 30, 2024 and December 31, 2023, respectively.

The current portion of the liability included in “Other current liabilities” on the Company’s consolidated balance sheet as of September 30, 2024 and December 31, 2023 was $ 2.4 million and $ 6.7 million, respectively.

The long-term portion of the liability included in “Other long-term liabilities” on the Company’s consolidated balance sheet as of September 30, 2024 and December 31, 2023 was $ 5.4 million and $ 7.6 million, respectively.

The first tranche was settled for $ 2.7 million in January 2024.

The Company recognized a gain of $ 1.0 million on the revaluation of the remaining tranches for the three months ended June 30, 2024, and a loss of $ 3.2 million for the six months ended June 30, 2024.

Gains and losses on revaluation are included in “Other income, net” on the Company’s consolidated statements of operations.

The Company recognized a gain of $ 7.0 million on the revaluation of the remaining tranches for the three months ended September 30, 2024, and a gain of $ 3.8 million for the nine months ended September 30, 2024.

Gains and losses on revaluation are included in “Other income (expense), net” on the Company’s consolidated statements of operations.

The Company has other financial instruments consisting primarily of receivables, payables, and other current assets and liabilities that approximate fair value due to the nature of the instruments and their relatively short maturities.

4 unchanged sentences

For further detail, see Note 11—Stock Based Compensation in the notes to the consolidated financial statements.

There were no other material nonrecurring fair value measurements as of June 30, 2024 or December 31, 2023.

There were no other material nonrecurring fair value measurements as of September 30, 2024 or December 31, 2023.

Other Current Liabilities

The following table provides detail of the Company’s other current liabilities for the periods presented:

(In thousands) June 30, 2024 December 31, 2023

(In thousands) September 30, 2024 December 31, 2023

Accrued capital expenditures $ 34,585 $ 34,131

3 unchanged sentences

The Company’s long-term debt is comprised of the following:

(In thousands) June 30, 2024 December 31, 2023

(In thousands) September 30, 2024 December 31, 2023

Revolving credit facility $ — $ —

8 unchanged sentences

The RBL Facility, maturing in February 2026, is guaranteed by certain parent companies and subsidiaries of Magnolia LLC and is collateralized by certain of Magnolia Operating’s oil and natural gas properties.

The Company expects to opportunistically refinance the RBL Facility prior to its maturity date.

Borrowings under the RBL Facility bear interest, at Magnolia Operating’s option, at a rate per annum equal to either the term SOFR rate or the alternative base rate plus the applicable margin.

Additionally, Magnolia Operating is required to pay a commitment fee quarterly in arrears in respect of unused commitments under the RBL Facility.

Additionally, Magnolia Operating is required to pay a commitment

fee quarterly in arrears in respect of unused commitments under the RBL Facility.

The applicable margin and the commitment fee rate are calculated based upon the utilization levels of the RBL Facility as a percentage of unused lender commitments then in effect.

The RBL Facility contains certain affirmative and negative covenants customary for financings of this type, including compliance with a leverage ratio of less than 3.50 to 1.00 and a current ratio of greater than 1.00 to 1.00.

As of June 30, 2024, the Company was in compliance with all covenants under the RBL Facility.

Deferred financing costs in connection with the RBL Facility are amortized on a straight-line basis over a period of four years from February 2022 to February 2026 and included in “Interest expense, net” in the Company’s consolidated statements of operations.

The Company recognized interest expense related to the RBL Facility of $ 1.0 million for each of the three months ended June 30, 2024 and 2023, and $ 2.1 million for each of the six months ended June 30, 2024 and 2023.

The unamortized portion of the deferred financing costs is included in “Deferred financing costs, net” on the Company’s consolidated balance sheets as of June 30, 2024 and December 31, 2023.

The Company did no t have any outstanding borrowings under the RBL Facility as of June 30, 2024.

As of September 30, 2024, the Company was in compliance with all covenants under the RBL Facility.

Deferred financing costs in connection with the RBL Facility are amortized on a straight-line basis over a period of four years from February 2022 to February 2026 and included in “Interest income (expense), net” in the Company’s consolidated statements of operations.

The Company recognized interest expense related to the RBL Facility of $ 1.1 million and $ 1.0 million for the three months ended September 30, 2024 and 2023, respectively, and $ 3.1 million for each of the nine months ended September 30, 2024 and 2023.

The unamortized portion of the deferred financing costs is included in “Deferred financing costs, net” on the Company’s consolidated balance sheets as of September 30, 2024 and December 31, 2023.

The Company did no t have any outstanding borrowings under the RBL Facility as of September 30, 2024.

2026 Senior Notes

4 unchanged sentences

The 2026 Senior Notes will mature on August 1, 2026 and bear interest at the rate of 6.0 % per annum.

Deferred financing costs related to the issuance of, and the amendment to the Indenture governing, the 2026 Senior Notes are amortized using the effective interest method over the term of the 2026 Senior Notes and are included in “Interest expense, net” in the Company’s consolidated statements of operations.

The unamortized portion of the deferred financing costs is included as a reduction to the carrying value of the 2026 Senior Notes, which has been recorded as “Long-term debt, net” on the Company’s consolidated balance sheets as of June 30, 2024 and December 31, 2023.

The Company recognized interest expense related to the 2026 Senior Notes of $ 6.7 million and $ 6.6 million for the three months ended June 30, 2024 and 2023, respectively, and $ 13.3 million and $ 13.2 million for the six months ended June 30, 2024 and 2023, respectively.

The Company expects to opportunistically refinance the 2026 Senior Notes prior to their maturity date.

Deferred financing costs related to the issuance of, and the amendment to the Indenture governing, the 2026 Senior Notes are amortized using the effective interest method over the term of the 2026 Senior Notes and are included in “Interest income (expense), net” in the Company’s consolidated statements of operations.

The Company recognized interest expense related to the 2026 Senior Notes of $ 6.7 million and $ 6.6 million for the three months ended September 30, 2024 and 2023, respectively, and $ 20.0 million and $ 19.8 million for the nine months ended September 30, 2024 and 2023, respectively.

At any time, the Issuers may redeem all or a part of the 2026 Senior Notes based on principal plus a set premium, as set forth in the Indenture, including any accrued and unpaid interest.

21 unchanged sentences

The Company’s income tax provision consists of the following components:

Three Months Ended Six Months Ended

(In thousands) June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023

Three Months Ended Nine Months Ended

(In thousands) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Federal $ ( 910 ) $ 18,221 $ 19,948 $ 25,277

8 unchanged sentences

The Company estimates its annual effective tax rate in recording its quarterly provision for income taxes in the various jurisdictions in which it operates.

The Company’s effective tax rate for the three months ended June 30, 2024 and 2023 was 20.3 % and 19.2 %, respectively, and 18.9 % and 17.4 % for the six months ended June 30, 2024 and 2023, respectively.

The Company’s effective tax rate for the three months ended September 30, 2024 and 2023 was 20.0 % and 21.0 %, respectively, and 19.3 % and 18.7 % for the nine months ended September 30, 2024 and 2023, respectively.

The primary differences between the annual effective tax rate and the statutory rate of 21.0% are income attributable to noncontrolling interest, state taxes, tax credits generated, and changes in valuation allowances.

As of June 30, 2024, the Company does not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months.

For the six months ended June 30, 2024, no significant amounts were incurred for interest and penalties.

As of September 30, 2024, the Company does not have any significant liabilities for uncertain tax positions during the next 12 months.

For the nine months ended September 30, 2024, no significant amounts were incurred for interest and penalties.

Currently, the Company is not aware of any issues under review that could result in significant payments, accruals, or a material deviation from its position.

During the six months ended June 30, 2024, the Magnolia LLC Unit Holders redeemed 7.9 million Magnolia LLC Units (and a corresponding number of shares of Class B Common Stock) for an equivalent number of shares of Class A Common Stock and subsequently sold these shares to the public.

During the nine months ended September 30, 2024, the Magnolia LLC Unit Holders redeemed 12.8 million Magnolia LLC Units (and a corresponding number of shares of Class B Common Stock) for an equivalent number of shares of Class A Common Stock and subsequently sold these shares to the public.

Magnolia did not receive any proceeds from the sale of shares of Class A Common Stock by the Magnolia LLC Unit Holders.

1 unchanged sentence

The Company recorded a deferred tax asset of $ 71.0 million related to this additional tax basis in Magnolia LLC Units with a corresponding increase to additional paid-in capital on the Company’s consolidated balance sheet.

As of June 30, 2024, the Company’s total deferred tax assets were $ 111.9 million.

As of September 30, 2024, the Company’s total gross deferred tax assets were $ 105.3 million.

Management assessed whether it is more-likely-than-not that it will generate sufficient taxable income to realize its deferred income tax assets, including the investment in partnership and net operating loss carryforwards.

1 unchanged sentence

The Company considered, among other things, the overall business environment, its historical earnings and losses, current industry trends, and its outlook for future years.

As of June 30, 2024, the Company recorded a valuation allowance of $ 5.6 million to offset the deferred tax asset created by the tax capital loss attributable to the sale of the Company’s interest in Highlander.

As of September 30, 2024, the Company recorded a valuation allowance of $ 5.8 million to offset the deferred tax asset created by the tax capital loss attributable to the sale of the Company’s interest in Highlander.

On August 16, 2022, the U.S.

2 unchanged sentences

These changes include, among others, a new 15% corporate alternative minimum tax on adjusted financial statement income of corporations with profits over $1 billion, a 1% excise tax on stock buybacks, and various tax incentives for energy and climate initiatives.

As of June 30, 2024, the Company is in compliance with all applicable provisions of the IRA, including the excise tax on stock buybacks.

As of September 30, 2024, the Company was in compliance with all applicable provisions of the IRA, including the excise tax on stock buybacks.

The Company is currently not subject to the corporate alternative minimum tax.

3 unchanged sentences

Class A Common Stock

At June 30, 2024, there were 223.2 million shares of Class A Common Stock issued and 188.5 million shares of Class A Common Stock outstanding.

At September 30, 2024, there were 228.1 million shares of Class A Common Stock issued and 191.5 million shares of Class A Common Stock outstanding.

The holders of Class A Common Stock and Class B Common Stock vote together as a single class on all matters and are entitled one vote for each share held.

3 unchanged sentences

Class B Common Stock

At June 30, 2024, there were 11.0 million shares of Class B Common Stock issued and outstanding.

At September 30, 2024, there were 5.5 million shares of Class B Common Stock issued and outstanding.

Holders of Class B Common Stock vote together as a single class with holders of Class A Common Stock on all matters properly submitted to a vote of the stockholders.

4 unchanged sentences

Share Repurchases

As of June 30, 2024, the Company’s board of directors had authorized a share repurchase program of up to 40.0 million shares of Class A Common Stock.

As of September 30, 2024, the Company’s board of directors had authorized a share repurchase program of up to 40.0 million shares of Class A Common Stock.

In addition, the Company may repurchase shares pursuant to a trading plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, which would permit the Company to repurchase shares at times that may otherwise be prohibited under the Company’s insider trading policy.

The share repurchase program does not require purchases to be made within a particular time frame.

The Company had repurchased 34.1 million shares under the program at a cost of $ 603.3 million and had 5.9 million shares of Class A Common Stock remaining under its share repurchase authorization as of June 30, 2024.

During the six months ended June 30, 2024, Magnolia LLC repurchased and subsequently canceled 3.0 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for $ 76.7 million of cash consideration (the “Class B Common Stock Repurchase”).

Magnolia funded the Class B Common Stock Repurchase with cash on hand.

The Company had repurchased 36.1 million shares under the program at a cost of $ 652.0 million and had 3.9 million shares of Class A Common Stock remaining under its share repurchase authorization as of September 30, 2024.

During the nine months ended September 30, 2024, Magnolia LLC repurchased and subsequently canceled 3.5 million Magnolia LLC Units with an equal number of shares of corresponding Class B Common Stock for $ 89.7 million of cash consideration (the “Class B Common Stock Repurchases”).

Magnolia funded the Class B Common Stock Repurchases with cash on hand.

During the same period, the Magnolia LLC Unit Holders redeemed 12.8 million Magnolia LLC Units (and a corresponding number of shares of Class B Common Stock) for an equivalent number of shares of Class A Common Stock and subsequently sold these shares to the public.

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Dividends in excess of retained earnings are recorded as a reduction of additional paid-in capital and distributions to the Magnolia LLC Unit Holders are recorded as a reduction of noncontrolling interest.

The following table sets forth information with respect to cash dividends and distributions declared by the Company’s board of directors during the six months ended June 30, 2024 and the year ended December 31, 2023, on its own behalf and in its capacity as the managing member of Magnolia LLC, on issued and outstanding shares of Class A Common Stock and Magnolia LLC Units:

The following table sets forth information with respect to cash dividends and distributions declared by the Company’s board of directors during the nine months ended September 30, 2024 and the year ended December 31, 2023, on its own behalf and in its capacity as the managing member of Magnolia LLC, on issued and outstanding shares of Class A Common Stock and Magnolia LLC Units:

Distribution Amount per share (1)

4 unchanged sentences

(In thousands, except per share amounts)

August 9, 2024 September 3, 2024 $ 0.130 $ 26,119 $ 24,694 $ 1,425

May 13, 2024 June 3, 2024 $ 0.130 $ 26,657 $ 23,820 $ 2,837

9 unchanged sentences

The noncontrolling interest percentage is affected by various equity transactions such as issuances and repurchases of Class A Common Stock, the exchange of Class B Common Stock (and corresponding Magnolia LLC Units) for Class A Common Stock, or the cancellation of Class B Common Stock (and corresponding Magnolia LLC Units).

As of June 30, 2024, Magnolia owned approximately 94.5 % of the interest in Magnolia LLC and the noncontrolling interest was approximately 5.5 %.

As of September 30, 2024, Magnolia owned approximately 97.2 % of the interest in Magnolia LLC and the noncontrolling interest was approximately 2.8 %.

Highlander was a joint venture whereby MGY Louisiana LLC, a wholly owned subsidiary of Magnolia Operating, held approximately 84.7 % of the units of Highlander, with the remaining 15.3 % attributable to noncontrolling interest.

On May 30, 2023, the Company sold its interest in Highlander and recognized a gain of $ 3.9 million included within “Other income, net” on the Company’s consolidated statements of operations for the three and six months ended June 30, 2023.

On May 30, 2023, the Company sold its interest in Highlander and recognized a gain of $ 3.9 million included within “Other income (expense), net” on the Company’s consolidated statements of operations for the nine months ended September 30, 2023.

Stock Based Compensation

The Company’s board of directors adopted the “Magnolia Oil & Gas Corporation Long Term Incentive Plan” (as amended, the “Plan”), effective as of July 17, 2018.

A total of 16.8 million shares of Class A Common Stock have been authorized for issuance under the Plan as of June 30, 2024.

A total of 16.8 million shares of Class A Common Stock have been authorized for issuance under the Plan as of September 30, 2024.

The Company grants stock based compensation awards in the form of restricted stock units (“RSU”), performance restricted stock units (“PRSU”), and performance stock units (“PSU”) to eligible employees and directors to enhance the Company and its affiliates’ ability to attract, retain, and motivate persons who make important contributions to the Company and its affiliates by providing these individuals with equity ownership opportunities.

Shares issued as a result of awards granted under the Plan are generally new shares of Class A Common Stock.

Stock based compensation expense is recognized net of forfeitures within “General and administrative expenses” and “Lease operating expenses” on the consolidated statements of operations and was $ 4.8 million and $ 4.1 million for the three months ended June 30, 2024 and 2023, respectively, and $ 9.5 million and $ 7.9 million for the six months ended June 30, 2024 and 2023, respectively.

Stock based compensation expense is recognized net of forfeitures within “General and administrative expenses” and “Lease operating expenses” on the consolidated statements of operations and was $ 4.7 million and $ 4.2 million for the three months ended September 30, 2024 and 2023, respectively, and $ 14.2 million and $ 12.1 million for the nine months ended September 30, 2024 and 2023, respectively.

The Company has elected to account for forfeitures of awards granted under the Plan as they occur in determining compensation expense.

The total income tax benefit recognized for stock that vested during the six months ended June 30, 2024 and 2023 was $ 5.5 million and $ 4.6 million, respectively.

The following table presents a summary of Magnolia’s unvested RSU, PRSU, and PSU activity for the six months ended June 30, 2024.

The total income tax benefit recognized for stock that vested during the nine months ended September 30, 2024 and 2023 was $ 5.6 million and $ 4.7 million, respectively.

The following table presents a summary of Magnolia’s unvested RSU, PRSU, and PSU activity for the nine months ended September 30, 2024.

Stock Units Performance Restricted

5 unchanged sentences

Forfeited ( 63,309 ) 21.62 ( 12,457 ) 19.69 ( 19,677 ) 22.41

Unvested at June 30, 2024

Unvested at September 30, 2024

1,455,847 $ 21.36 276,866 $ 19.25 579,961 $ 22.48

The weighted average grant date fair values of the RSUs, PRSUs, and PSUs granted during the six months ended June 30, 2023 were $ 22.81 , $ 22.28 , and $ 24.69 per share, respectively.

The weighted average grant date fair values of the RSUs, PRSUs, and PSUs granted during the nine months ended September 30, 2023 were $ 22.80 , $ 22.28 , and $ 24.69 per share, respectively.

Restricted Stock Units

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Compensation expense for the service-based RSU awards is based upon the grant date market value of the award and such costs are recorded on a straight-line basis over the requisite service period for each separately vesting portion of the award, as if the award was, in-substance, multiple awards.

The aggregate fair value of RSUs that vested during the six months ended June 30, 2024 and 2023 were $ 11.1 million and $ 8.3 million, respectively.

Unrecognized compensation expense related to unvested RSUs as of June 30, 2024 was $ 26.7 million, which the Company expects to recognize over a weighted average period of 2.3 years.

The aggregate fair value of RSUs that vested during the nine months ended September 30, 2024 and 2023 were $ 11.5 million and $ 8.7 million, respectively.

Unrecognized compensation expense related to unvested RSUs as of September 30, 2024 was $ 23.4 million, which the Company expects to recognize over a weighted average period of 2.1 years.

Performance Restricted Stock Units and Performance Stock Units

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Compensation expense for the PRSU awards is based upon grant date fair market value of the award, calculated using a Monte Carlo simulation, as presented below, and such costs are recorded on a straight-line basis over the requisite service period for each separately vesting portion of the award, as if the award was, in-substance, multiple awards, as applicable.

The aggregate fair value of PRSUs that vested during the six months ended June 30, 2024 and 2023 were $ 15.0 million and $ 7.0 million, respectively.

Unrecognized compensation expense related to unvested PRSUs as of June 30, 2024 was $ 1.4 million, which the Company expects to recognize over a weighted average period of 0.9 years.

The aggregate fair value of PRSUs that vested during the nine months ended September 30, 2024 and 2023 were $ 15.1 million and $ 7.1 million, respectively.

Unrecognized compensation expense related to unvested PRSUs as of September 30, 2024 was $ 0.8 million, which the Company expects to recognize over a weighted average period of 0.7 years.

The Company grants PSUs to certain employees.

1 unchanged sentence

In addition to the TSR conditions, vesting of the PSUs is subject to the awardee’s continued employment through the date of settlement of the PSUs, which will occur within 60 days following the end of the performance period.

The aggregate fair value of PSUs that vested during the six months ended June 30, 2024 and 2023 were $ 0.1 million and $ 6.7 million, respectively.

Unrecognized compensation expense related to unvested PSUs as of June 30, 2024 was $ 9.4 million, which the Company expects to recognize over a weighted average period of 2.3 years.

The aggregate fair value of PSUs that vested during the nine months ended September 30, 2024 and 2023 were $ 0.1 million and $ 6.7 million, respectively.

Unrecognized compensation expense related to unvested PSUs as of September 30, 2024 was $ 8.3 million, which the Company expects to recognize over a weighted average period of 2.1 years.

The following table summarizes the Monte Carlo simulation assumptions used to calculate the grant date fair value of the PSUs in 2024 and 2023.

Six Months Ended

PSU Grant Date Fair Value Assumptions June 30, 2024 June 30, 2023

Nine Months Ended

PSU Grant Date Fair Value Assumptions September 30, 2024 September 30, 2023

Expected term (in years)

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The components of basic and diluted net income per share attributable to Class A Common Stock are as follows:

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

Net income attributable to Class A Common Stock $ 99,784 $ 102,030 $ 280,429 $ 289,856

12 unchanged sentences

$ 0.52 $ 0.54 $ 1.50 $ 1.51

For the three months ended June 30, 2024 and 2023, the Company excluded 16.2 million and 21.8 million, respectively, of weighted average shares of Class A Common Stock issuable upon the exchange of Class B Common Stock (and corresponding Magnolia LLC Units) as the effect was anti-dilutive.

For the six months ended June 30, 2024 and 2023, the Company excluded 19.0 million and 21.8 million, respectively, of weighted average shares of Class A Common Stock issuable upon the exchange of Class B Common Stock (and corresponding Magnolia LLC Units) as the effect was anti-dilutive.

For the three months ended September 30, 2024 and 2023, the Company excluded 10.5 million and 21.8 million, respectively, of weighted average shares of Class A Common Stock issuable upon the exchange of Class B Common Stock (and corresponding Magnolia LLC Units) as the effect was anti-dilutive.

For the nine months ended September 30, 2024 and 2023, the Company excluded 16.2 million and 21.8 million, respectively, of weighted average shares of Class A Common Stock issuable upon the exchange of Class B Common Stock (and corresponding Magnolia LLC Units) as the effect was anti-dilutive.

Related Party Transactions

For the six months ended June 30, 2024 and 2023, there were no material related party transactions with an entity that held more than 10% of the Company’s common stock or qualified as a principal owner of the Company, as defined in ASC 850, “Related Party Disclosures.”

For the nine months ended September 30, 2024 and 2023, there were no material related party transactions with an entity that held more than 10% of the Company’s common stock or qualified as a principal owner of the Company, as defined in ASC 850, “Related Party Disclosures.”

Supplemental Cash Flow

Supplemental cash flow disclosures are presented below:

Six Months Ended

(In thousands) June 30, 2024 June 30, 2023

Nine Months Ended

(In thousands) September 30, 2024 September 30, 2023

Supplemental cash items:

7 unchanged sentences

Subsequent Events

On July 29, 2024, the Company’s board of directors declared a quarterly cash dividend of $ 0.13 per share of Class A Common Stock, and Magnolia LLC declared a cash distribution of $ 0.13 per Magnolia LLC Unit to each holder of Magnolia LLC Units, each payable on September 3, 2024 to shareholders or members of record, as applicable, as of August 9, 2024.

On October 28, 2024, the Company’s board of directors declared a quarterly cash dividend of $ 0.13 per share of Class A Common Stock, and Magnolia LLC declared a cash distribution of $ 0.13 per Magnolia LLC Unit to each holder of Magnolia LLC Units, each payable on December 2, 2024 to shareholders or members of record, as applicable, as of November 8, 2024.

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