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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 001-38081
Liberty Energy Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware
81-4891595
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification No.)
950 17th Street, Suite 2400
Denver, Colorado
80202
(Address of Principal Executive Offices)(Zip Code)
(303) 515-2800
(Registrant’s Telephone Number, Including Area Code)
Liberty Oilfield Services Inc.
(Former Name, if Changed Since Last Report)
Securities registered pursuant to section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.01LBRTNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer ☐Non-accelerated filer ☐
Smaller reporting company
Emerging growth company      (Do not check if a smaller reporting company)
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☒ No
As of April 20, 2022, the Registrant had 186,847,433 shares of Class A Common Stock and 333,353 shares of Class B Common Stock outstanding.



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


TABLE OF CONTENTS
Page No.


i


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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


PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
LIBERTY ENERGY INC.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)
March 31, 2022December 31, 2021
Assets
Current assets:
Cash and cash equivalents$32,925 $19,998 
Accounts receivable—trade, net of provision for credit losses of $884 and $884, respectively
360,396 298,531 
Accounts receivable—related party11,183  
Unbilled revenue143,034 108,923 
Inventories139,721 134,593 
Prepaid and other current assets74,302 68,332 
Total current assets761,561 630,377 
Property and equipment, net1,218,959 1,199,287 
Finance lease right-of-use assets17,223 18,201 
Operating lease right-of-use assets109,754 109,899 
Other assets82,767 82,289 
Deferred tax assets616 607 
Total assets$2,190,880 $2,040,660 
Liabilities and Equity
Current liabilities:
Accounts payable (including payables to related parties of $1,401 and $2,732, respectively)
$333,599 $288,801 
Accrued liabilities (including amounts due to related parties of $779 and $1,142, respectively)
247,087 235,115 
Deferred revenue1,670 4,552 
Current portion of long-term debt, net of discount of $740 and $743, respectively
1,010 1,007 
Current portion of finance lease liabilities8,582 8,743 
Current portion of operating lease liabilities31,252 31,029 
Total current liabilities623,200 569,247 
Long-term debt, net of discount of $1,086 and $1,270, respectively, less current portion
211,192 121,445 
Deferred tax liability563 563 
Payable pursuant to tax receivable agreements41,720 37,555 
Noncurrent portion of finance lease liabilities3,388 4,445 
Noncurrent portion of operating lease liabilities77,151 76,966 
Total liabilities957,214 810,221 
Commitments & contingencies (Note 15)
Stockholders’ equity:
Preferred Stock, $0.01 par value, 10,000 shares authorized and none issued and outstanding
  
Common Stock:
Class A, $0.01 par value, 400,000,000 shares authorized and 185,760,999 issued and outstanding as of March 31, 2022 and 183,385,111 issued and outstanding as of December 31, 2021
1,858 1,834 
Class B, $0.01 par value, 400,000,000 shares authorized and 340,420 issued and outstanding as of March 31, 2022 and 2,632,347 issued and outstanding as of December 31, 2021
3 26 
Additional paid in capital1,389,987 1,367,642 
Accumulated deficit(161,330)(155,954)
Accumulated other comprehensive income (loss)743 (306)
Total stockholders’ equity
1,231,261 1,213,242 
Non-controlling interest2,405 17,197 
Total equity1,233,666 1,230,439 
Total liabilities and equity$2,190,880 $2,040,660 
See Notes to Condensed Consolidated Financial Statements.
1


LIBERTY ENERGY INC.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(Unaudited)
Three Months Ended March 31,
20222021
Revenue:
Revenue$770,481 $550,852 
Revenue—related parties22,289 1,180 
Total revenue792,770 552,032 
Operating costs and expenses:
Cost of services (exclusive of depreciation, depletion, and amortization shown separately below)670,019 498,935 
General and administrative38,318 26,359 
Transaction, severance and other costs1,334 7,621 
Depreciation, depletion, and amortization74,588 62,056 
Loss (gain) on disposal of assets4,672 (720)
Total operating costs and expenses788,931 594,251 
Operating income (loss)3,839 (42,219)
Other expense:
Loss on remeasurement of liability under tax receivable agreements4,165  
Interest expense, net4,324 3,754 
Total other expense8,489 3,754 
Net loss before income taxes(4,650)(45,973)
Income tax expense (benefit)830 (7,357)
Net loss(5,480)(38,616)
Less: Net loss attributable to non-controlling interests(104)(4,411)
Net loss attributable to Liberty Energy Inc. stockholders$(5,376)$(34,205)
Net loss attributable to Liberty Energy Inc. stockholders per common share:
Basic$(0.03)$(0.21)
Diluted$(0.03)$(0.21)
Weighted average common shares outstanding:
Basic183,999 163,207 
Diluted183,999 163,207 
See Notes to Condensed Consolidated Financial Statements.

2


LIBERTY ENERGY INC.
Condensed Consolidated Statements of Comprehensive Loss
(In thousands)
(Unaudited)
Three Months Ended March 31,
20222021
Net loss$(5,480)$(38,616)
Other comprehensive loss
Foreign currency translation1,056 1,410 
Comprehensive loss$(4,424)$(37,206)
Comprehensive loss attributable to non-controlling interest(97)(4,319)
Comprehensive loss attributable to Liberty Energy Inc.$(4,327)$(32,887)
See Notes to Condensed Consolidated Financial Statements.

3


LIBERTY ENERGY INC.
Condensed Consolidated Statements of Changes in Equity
(In thousands, except per unit and per share data)
(Unaudited)
Shares of Class A Common StockShares of Class B Common StockClass A Common Stock, Par ValueClass B Common Stock, Par ValueAdditional Paid in CapitalAccumulated DeficitAccumulated Other Comprehensive (Loss) Income
Total Stockholders Equity
Non-controlling InterestTotal Equity
Balance—December 31, 2021183,385 2,632 $1,834 $26 $1,367,642 $(155,954)$(306)$1,213,242 $17,197 $1,230,439 
Exchange of Class B Common Stock for Class A Common Stock2,292 (2,292)23 (23)15,687 — — 15,687 (15,687) 
Offering Costs— — — — (62)— — (62)— (62)
Other distributions and advance payments to non-controlling interest unitholders— — — — — — — — 924 924 
Stock based compensation expense— — — — 6,737 — — 6,737 76 6,813 
Vesting of restricted stock units84 — 1 — 7 — — 8 (8) 
Tax withheld on vesting of restricted stock units— — — — (24)— (24)— (24)
Currency translation adjustment— — — — — — 1,049 1,049 7 1,056 
Net loss— — — — — (5,376)— (5,376)(104)(5,480)
Balance—March 31, 2022185,761 340 $1,858 $3 $1,389,987 $(161,330)$743 $1,231,261 $2,405 $1,233,666 

Shares of Class A Common StockShares of Class B Common StockClass A Common Stock, Par ValueClass B Common Stock, Par ValueAdditional Paid in CapitalRetained Earnings
(Accumulated Deficit)
Accumulated Other Comprehensive (Loss) Income
Total Stockholders Equity
Non-controlling InterestTotal Equity
Balance—December 31, 2020157,952 21,550 $1,579 $216 $1,125,554 $23,288 $ $1,150,637 $159,406 $1,310,043 
Exchange of Class B Common Stock for Class A Common Stock11,269 (11,269)113 (113)82,753 — — 82,753 (82,753) 
Offering Costs— — — — (773)— — (773)(75)(848)
Effect of exchange on deferred tax asset, net of liability under tax receivable agreements— — — — 4,954 — — 4,954 — 4,954 
Deferred tax impact of ownership changes from issuance of Class A Common Stock— — — — (4,519)— — (4,519)— (4,519)
Other distributions and advance payments to non-controlling interest unitholders— — — — — — — — 548 548 
Stock based compensation expense— — — — 4,515 — — 4,515 432 4,947 
Vesting of restricted stock units38 — — — (130)— — (130)(56)(186)
Restricted Stock and RSU forfeitures— — — — — 2 2 — 2 
Currency translation adjustment— — — — — — 1,318 1,318 92 1,410 
Net loss— — — — — (34,205)— (34,205)(4,411)(38,616)
Balance—March 31, 2021169,259 10,281 $1,692 $103 $1,212,354 $(10,915)$1,318 $1,204,552 $73,183 $1,277,735 
See Notes to Condensed Consolidated Financial Statements.

4


LIBERTY ENERGY INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended March 31,
20222021
Cash flows from operating activities:
Net loss$(5,480)$(38,616)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion, and amortization74,588 62,045 
Loss (gain) on disposal of assets4,672 (720)
Amortization of debt issuance costs336 569 
Non-cash lease expense1,034 981 
Stock based compensation expense6,813 4,947 
Deferred income tax benefit (9,645)
Loss on remeasurement of liability under tax receivable agreements4,165  
Changes in operating assets and liabilities:
Accounts receivable and unbilled revenue(95,206)(20,977)
Accounts receivable and unbilled revenue—related party(11,183)(100)
Inventories(5,030)(10,497)
Other assets(2,599)17,375 
Deferred revenue(2,782) 
Accounts payable and accrued liabilities47,582 22,166 
Accounts payable and accrued liabilities—related party(1,857) 
Initial payment of operating lease liability(501) 
Net cash provided by operating activities14,552 27,528 
Cash flows from investing activities:
Purchases of property and equipment and construction in-progress(90,989)(25,361)
Investment in sand logistics(795) 
Proceeds from sale of assets927 1,574 
Net cash used in investing activities(90,857)(23,787)
Cash flows from financing activities:
Repayments of borrowings on term loan(438)(438)
Proceeds from borrowing on line-of-credit185,000  
Repayments on borrowings on line-of-credit(95,000) 
Payments on finance lease obligations(1,218)(2,326)
Class A Common Stock dividends and dividend equivalents upon restricted stock vesting (202)
Other distributions and advance payments to non-controlling interest unitholders924 548 
Tax withholding on restricted stock unit vesting(24) 
Payments of debt issuance costs(224) 
Payments of equity issuance costs(62)(848)
Net cash provided by (used in) financing activities88,958 (3,266)
Net increase in cash and cash equivalents before translation effect12,653 475 
Translation effect on cash274 81 
Cash and cash equivalents—beginning of period19,998 68,978 
Cash and cash equivalents—end of period$32,925 $69,534 




5


LIBERTY ENERGY INC.
Condensed Consolidated Statements of Cash Flows cont.
(In thousands)
(Unaudited)
Three Months Ended March 31,
20222021
Supplemental disclosure of cash flow information:
Net cash paid for income taxes$4,828 $ 
Cash paid for interest$3,847 $2,642 
Non-cash investing and financing activities:
Capital expenditures included in accounts payable and accrued liabilities$71,702 $27,494 
Capital expenditures reclassified from prepaid and other current assets$1,190 $ 
See Notes to Condensed Consolidated Financial Statements.
6


LIBERTY ENERGY INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)

Note 1—Organization and Basis of Presentation
Organization
Liberty Energy Inc., formerly known as Liberty Oilfield Services Inc. (the “Company”) was incorporated as a Delaware corporation on December 21, 2016, to become a holding corporation for Liberty Oilfield Services New HoldCo LLC (“Liberty LLC”) and its subsidiaries upon completion of a corporate reorganization (the “Corporate Reorganization”) and planned initial public offering of the Company (“IPO”). On April 19, 2022, the stockholders of the Company approved an amendment to the Company’s Amended and Restated Certificate of Incorporation for the purpose of changing the Company’s name from “Liberty Oilfield Services Inc.” to “Liberty Energy Inc.” and thereafter, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation to reflect the new name, effective April 25, 2022. The Company has no material assets other than its ownership of units in Liberty LLC (“Liberty LLC Units”). Please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 22, 2022 (the “Annual Report”) for additional information on the Corporate Reorganization and IPO that were completed on January 17, 2018.
The Company, together with its subsidiaries, is a multi-basin provider of hydraulic fracturing services and goods, with a focus on deploying the latest technologies in the technically demanding oil and gas reservoirs in which it operates, principally in North Dakota, Colorado, Louisiana, Oklahoma, New Mexico, Wyoming, Texas and the provinces of Alberta and British Columbia, Canada.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements were prepared using generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by GAAP for annual financial statements and should be read together with the annual financial statements and notes thereto included in the Annual Report.
The accompanying unaudited condensed consolidated financial statements and related notes present the condensed consolidated financial position of the Company as of March 31, 2022 and December 31, 2021, and the results of operations, cash flows, and equity of the Company as of and for the three months ended March 31, 2022 and 2021. 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 months ended March 31, 2022 are not necessarily indicative of the results of operations expected for the entire fiscal year ended December 31, 2022. Further, these estimates and other factors, including those outside the Company’s control, such as the impact of sustained lower commodity prices, could have a significant adverse impact to the Company’s financial condition, results of operations and cash flows.
All intercompany amounts have been eliminated in the presentation of the unaudited condensed consolidated financial statements of the Company. The Company’s operations are organized into a single reportable segment, which consists of hydraulic fracturing and related goods and services.
Note 2—Significant Accounting Policies
Reclassifications
Certain amounts in the prior period financial statements have been reclassified from interest income to interest expense, net in the accompanying unaudited condensed consolidated statements of operation to conform to the presentation of the current period financial statements. These reclassifications had no effect on the previously reported net income or loss.
7


LIBERTY ENERGY INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 3—The PropX Acquisition
On October 26, 2021, the Company entered into the certain Master Transaction Agreement (the “Transaction Agreement”) with Proppant Express Investments, LLC to acquire the assets and liabilities of Proppant Express Solutions, LLC (“PropX”), which provides last-mile proppant delivery solutions, including proppant handling equipment and logistics software across North America (the “PropX Acquisition”). PropX was acquired in exchange for $11.9 million in cash and 3,405,526 shares of the Company’s Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”) and 2,441,010 shares of the Company’s Class B Common Stock, par value $0.01 per share (the “Class B Common Stock”, and together with the Class A Common Stock, the “Common Stock”), for total consideration of $103.0 million based on the October 26, 2021 closing price of Class A Common Stock of $15.58. In connection with the issuance of 2,441,010 shares of Class B Common Stock, Liberty LLC also issued 2,441,010 Liberty LLC Units to the Company. The Liberty LLC Units are redeemable for an equivalent number of shares of Class A Common Stock at anytime, at the election of the shareholder.
The Company accounted for the PropX Acquisition using the acquisition method of accounting. The aggregate purchase price noted above was allocated to the major categories of assets acquired and liabilities assumed based upon their estimated fair value at the date of the acquisition. The estimated fair values of certain assets and liabilities require significant judgments and estimates. The majority of the measurements of assets acquired and liabilities assumed, are based on inputs that are not observable in the market and thus represent Level 3 inputs.
In accordance with ASC Topic 805, an acquirer is allowed a period, referred to as the measurement period, in which to complete its accounting for the transaction. Such measurement period ends at the earliest date that the acquirer a) receives the information necessary or b) determines that it cannot obtain further information, and such period may not exceed one year. As the PropX Acquisition closed on October 26, 2021 the Company is in the process of completing the initial purchase price allocation, particularly as it relates to current assets and current liabilities.
The following table summarizes the fair value of the consideration transferred in the PropX Acquisition and the preliminary allocation of the purchase price to the fair value of the assets acquired and liabilities assumed as of October 26, 2021, the date of the closing of the PropX Acquisition:
($ in thousands)
Total Purchase Consideration:
Consideration$103,023 
Cash and cash equivalents$53 
Accounts receivable and unbilled revenue4,089 
Inventory8 
Prepaid and other current assets1,722 
Property and equipment (1)
94,137 
Intangible assets (included in other assets in the accompanying consolidated balance sheet as of December 31, 2021) (2)
7,100 
Total identifiable assets acquired107,109 
Accounts payable2,152 
Accrued liabilities1,934 
Total liabilities assumed4,086 
Total purchase consideration$103,023 
(1) Useful lives average of 10 years, see Note 5—Property and Equipment
(2) Definite lived intangibles with an amortization period ranging from seven to 10 years
Transaction costs, costs associated with issuing additional equity and integration costs were recognized separately from the acquisition of assets and assumptions of liabilities in the PropX Acquisition. Transaction costs consist of legal and professional fees. Integration costs consist of expenses incurred to integrate PropX’s operations, aligning accounting processes and procedures, and integrating its enterprise resource planning system with those of the Company. Merger and integration costs are expensed as incurred, and equity offering costs were recorded as a reduction to additional paid in capital.
8


LIBERTY ENERGY INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
The Company’s condensed consolidated statements of operations for the three months ended March 31, 2021 does not include any results from PropX operations as the PropX Acquisition closed on October 26, 2021. The Company does not present pro forma financial information for the periods prior to the PropX Acquisition as such information, after elimination of PropX’s historical transactions with the Company, is not materially different than the results presented in the accompanying condensed consolidated statements of operations for three months ended March 31, 2021.
Note 4—Inventories
Inventories consist of the following:
March 31,December 31,
($ in thousands)20222021
Proppants$20,352 $23,413 
Chemicals16,163 17,996 
Maintenance parts and other103,206 93,184 
$139,721 $134,593 
The Company did not record any write-down to the inventory carrying value during the three months ended March 31, 2022 or the year ended December 31, 2021.
Note 5—Property and Equipment
Property and equipment consist of the following:
Estimated
useful lives
(in years)
March 31,December 31,
($ in thousands)20222021
LandN/A$30,494 $33,812 
Field services equipment
2-7
1,649,991 1,579,420 
Vehicles
4-7
61,448 61,282 
Lease Equipment1065,395 64,770 
Buildings and facilities
5-30
141,216 148,555 
Mineral reserves
>25
76,823 76,823 
Office equipment and furniture
2-7
8,303 8,218 
2,033,670 1,972,880 
Less accumulated depreciation and depletion(931,553)(863,194)
1,102,117 1,109,686 
Construction in-progressN/A116,842 89,601 
$1,218,959 $1,199,287 
Depreciation expense for the three months ended March 31, 2022 and 2021 was $69.9 million and $56.7 million, respectively. Depletion expense for the three months ended March 31, 2022 and 2021 was $0.3 million and $0.3 million, respectively.
As of March 31, 2022 and December 31, 2021, 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 March 31, 2022, the Company classified $3.4 million of land and $8.4 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 carrying value of the assets was greater than the fair value less the estimated costs to sell, and therefore recorded a $4.4 million loss during the three months ended March 31, 2022, included as a component of loss (gain) on disposal of assets in the accompanying unaudited condensed consolidated statements of operations.
9


LIBERTY ENERGY INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 6—Leases
The Company has operating and finance leases primarily for vehicles, equipment, railcars, office space, and facilities. The terms and conditions for these leases vary by the type of underlying asset.
Certain leases include variable lease payments for items such as property taxes, insurance, maintenance, and other operating expenses associated with leased assets. Payments that vary based on an index or rate are included in the measurement of lease assets and liabilities at the rate as of the commencement date. All other variable lease payments are excluded from the measurement of lease assets and liabilities, and are recognized in the period in which the obligation for those payments is incurred.
The components of lease expense for the three months ended March 31, 2022 and 2021 were as follows:
Three Months Ended March 31,
($ in thousands)20222021
Finance lease cost:
Amortization of right-of-use assets$977 $1,795 
Interest on lease liabilities261 537 
Operating lease cost9,499 7,267 
Variable lease cost1,091 557 
Short-term lease cost1,546 309 
Total lease cost$13,374 $10,465 

Supplemental cash flow and other information related to leases for the three months ended March 31, 2022 and 2021 were as follows:
Three Months Ended March 31,
($ in thousands)20222021
Cash paid for amounts included in measurement of liabilities:
Operating leases$9,032 $6,430 
Finance leases1,479 2,863 
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases9,461 31 
During the three months ended March 31, 2021, the Company amended certain finance leases, the change in terms of which caused the leases to be reclassified to operating leases. In connection with the amendments, the Company wrote-off finance lease right-of-use assets of $0.8 million and liabilities of $0.6 million. Additionally, the Company recognized operating lease right-of-use assets of $0.7 million and liabilities of $0.5 million. There was no gain or loss recognized as a result of these amendments.
Lease terms and discount rates as of March 31, 2022 and December 31, 2021 were as follows:
March 31, 2022December 31, 2021
Weighted-average remaining lease term:
Operating leases5.1 years5.2 years
Finance leases1.2 years1.5 years
Weighted-average discount rate:
Operating leases4.2 %4.2 %
Finance leases8.5 %8.6 %

10


LIBERTY ENERGY INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Future minimum lease commitments as of March 31, 2022 are as follows:
($ in thousands)FinanceOperating
Remainder of 2022$8,067 $27,427 
20234,968 27,016 
2024 20,430 
2025 18,110 
2026 8,812 
Thereafter 19,085 
Total lease payments13,035 120,880 
Less imputed interest(1,065)(12,477)
Total$11,970 $108,403 

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 March 31, 2022 is $12.8 million; the payment is not probable and therefore has not been included in the measurement of the lease liability and right-of-use asset. For vehicle leases that are classified as finance leases, the Company includes the residual value guarantee, estimated in the lease agreement, in the financing lease liability.
Lessor Arrangements
The Company leases dry and wet sand containers and conveyor belts to customers through PropX. PropX leases to customers through operating leases, where the lessor for tax purposes is considered to be the owner of the equipment during the term of the lease. The lease agreements do not include options for the lessee to purchase the underlying asset at the end of the lease term for either a stated fixed price or fair market value. However, some of the leases contain a termination clause in which the customer can cancel the contract. The leases can be subject to variable lease payments if the customer requests more units than what is agreed upon in the lease. The Company does not record any lease assets or liabilities related to these variable items.
The carrying amount of equipment leased to others, included in property, plant and equipment, under operating leases as of March 31, 2022 and December 31, 2021 were as follows:
($ in thousands)March 31, 2022December 31, 2021
Equipment leased to others - at original cost$65,395 $64,770 
Less: Accumulated depreciation(3,280)(1,377)
Equipment leased to others - net$62,115 $63,393 
Future payments receivable for operating leases commenced and committed but not delivered as of March 31, 2022 are as follows:
($ in thousands)
Remainder of 2022$8,261 
20239,764 
20243,927 
2025773 
2026 
Thereafter 
Total$22,725 
Revenues from operating leases for the three months ended March 31, 2022 and 2021 were $5.9 million and $0.0 million, respectively.
11


LIBERTY ENERGY INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 7—Accrued Liabilities
Accrued liabilities consist of the following:
($ in thousands)March 31, 2022December 31, 2021
Accrued vendor invoices$127,117 $109,903 
Operations accruals65,803 64,707 
Accrued benefits and other54,167 60,505 
$247,087 $235,115 
Note 8—Debt
Debt consists of the following:
March 31,December 31,
($ in thousands)20222021
Term Loan outstanding$106,028 $106,465 
Revolving Line of Credit108,000 18,000 
Deferred financing costs and original issue discount(1,826)(2,013)
Total debt, net of deferred financing costs and original issue discount$212,202 $122,452 
Current portion of long-term debt, net of discount$1,010 $1,007 
Long-term debt, net of discount and current portion211,192 121,445 
Total debt, net of deferred financing costs and original issue discount$212,202 $122,452 
On September 19, 2017, the Company entered into two credit agreements for a revolving line of credit up to $250.0 million, subsequently increased to $350.0 million, see below, (the “ABL Facility”) and a $175.0 million term loan (the “Term Loan Facility”, and together with the ABL Facility the “Credit Facilities”).
On October 22, 2021, the Company entered into an amendment to the ABL Facility (the “Revolving Credit Agreement Amendment”). The Revolving Credit Agreement Amendment further amends the credit agreement and guaranty and security agreement originally entered into by the parties on September 19, 2017, which governs the Company’s ABL Facility. Along with other revisions, the Revolving Credit Agreement Amendment (i) expanded the definition of borrowing base to include certain eligible US investment grade accounts, Canadian accounts solely after a specified event, and both chemical and spare parts inventory; (ii) increased the maximum revolver amount from $250.0 million to $350.0 million (with the ability to request an increase in the size of the ABL Facility by $75.0 million); (iii) increased certain indebtedness baskets; (iv) provided additional flexibility for a potential future internal structuring; (v) added new lenders to the facility; and (vi) extended the maturity date to the earlier of (a) October 22, 2026 and (b) to the extent the debt under the Term Loan Facility remains outstanding 90 days prior to the final maturity of the Term Loan Facility. The ABL Facility was initially scheduled to mature on the earlier to occur of (i) September 19, 2022 and (ii) to the extent the debt under the Term Loan Facility remains outstanding, 90 days prior to the final maturity of the Term Loan Facility.
Additionally, on October 22, 2021, the Company entered into a Fifth Amendment to Credit Agreement, Second Amendment to Guaranty and Security Agreement and Termination of Right of First Offer Letter. The Term Loan Credit Agreement Amendment further amends the credit agreement and guaranty and security agreement and terminates the Right of First Offer Letter originally entered into by the parties on September 19, 2017, which governs the Company’s Term Loan Facility. Along with other revisions, the Term Loan Credit Agreement Amendment (i) increased certain indebtedness baskets; (ii) provided additional flexibility for a potential future internal structuring; (iii) extended the maturity date through September 19, 2024; and (iv) terminated a right of first offer in favor of the Term Loan Facility lenders. The Term Loan Facility was initially scheduled to mature on September 19, 2022.
The weighted average interest rate on all borrowings outstanding as of March 31, 2022 and December 31, 2021 was 6.5% and 7.9%, respectively.
ABL Facility
Under the terms of the ABL Facility, up to $350.0 million may be borrowed, subject to certain borrowing base limitations based on a percentage of eligible accounts receivable and inventory. As of March 31, 2022, the borrowing base was calculated to be $298.3 million, and the Company had $108.0 million outstanding in addition to a letter of credit in the amount of $1.4
12


LIBERTY ENERGY INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
million, with $189.0 million of remaining availability. Borrowings under the ABL Facility bear interest at LIBOR or a base rate, plus an applicable LIBOR margin of 1.5% to 2.0% or base rate margin of 0.5% to 1.0%, as defined in the ABL Facility credit agreement. Additionally, borrowings as of March 31, 2022 incurred interest at a rate of 4.5%. The average monthly unused commitment is subject to an unused commitment fee of 0.375% to 0.5%. Interest and fees are payable in arrears at the end of each month, or, in the case of LIBOR loans, at the end of each interest period. The ABL Facility matures on the earlier of (i) October 22, 2026 and (ii) to the extent the debt under the Term Loan Facility remains outstanding, 90 days prior to the final maturity of the Term Loan Facility, which matures on September 19, 2024. Borrowings under the ABL Facility are collateralized by accounts receivable and inventory, and further secured by the Company, Liberty LLC, and R/C IV Non-U.S. LOS Corp., a Delaware corporation and a subsidiary of the Company, as parent guarantors.
Term Loan Facility
The Term Loan Facility provides for a $175.0 million term loan, of which $106.0 million remained outstanding as of March 31, 2022. Amounts outstanding bear interest at LIBOR or a base rate, plus an applicable margin of 7.625% or 6.625%, respectively, and borrowings as of March 31, 2022 incurred interest at a rate of 8.625%. The Company is required to make quarterly principal payments of 1% per annum of the outstanding principal balance, commencing on December 31, 2017, with final payment due at maturity on September 19, 2024. The Term Loan Facility is collateralized by the fixed assets of LOS and its subsidiaries, and is further secured by the Company, Liberty LLC, and R/C IV Non-U.S. LOS Corp., a Delaware corporation and a subsidiary of the Company, as parent guarantors.
The Credit Facilities include certain non-financial covenants, including but not limited to restrictions on incurring additional debt and certain distributions. Moreover, the ability of the Company to incur additional debt and to make distributions is dependent on maintaining a maximum leverage ratio. The Term Loan Facility requires mandatory prepayments upon certain dispositions of property or issuance of other indebtedness, as defined, and annually a percentage of excess cash flow (25% to 50%, depending on leverage ratio, of consolidated net income less capital expenditures and other permitted payments, commencing with the year ending December 31, 2018). Certain mandatory prepayments and optional prepayments are subject to a prepayment premium of 3% of the prepaid principal declining annually to 1% during the first three years of the term of the Term Loan Facility.
The Credit Facilities are not subject to financial covenants unless liquidity, as defined in the respective credit agreements, drops below a specific level. Under the ABL Facility, the Company is required to maintain a minimum fixed charge coverage ratio, as defined in the credit agreement governing the ABL Facility, of 1.0 to 1.0 for each period if excess availability is less than 10% of the borrowing base or $12.5 million, whichever is greater. Under the Term Loan Facility, the Company is required to maintain a minimum fixed charge coverage ratio, as defined, of 1.2 to 1.0 for each trailing twelve-month period if the Company’s liquidity, as defined, is less than $25.0 million for at least five consecutive business days.
The Company was in compliance with these covenants as of March 31, 2022.
Maturities of debt are as follows:
($ in thousands)
Remainder of 2022$1,313 
20231,750 
2024210,965 
2025 
2026 
$214,028 

Note 9—Fair Value Measurements and Financial Instruments
The fair values of the Company’s assets and liabilities represent the amounts that would be received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction on the reporting date. These fair value measurements maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability on the measurement date, the fair value measurement reflects the Company’s own judgments about the assumptions that market participants would use in pricing the asset or liability. The Company discloses the fair values of its assets and liabilities according to the quality of valuation inputs under the following hierarchy:
Level 1 Inputs: Quoted prices (unadjusted) in an active market for identical assets or liabilities.
13


LIBERTY ENERGY INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Level 2 Inputs: Inputs other than quoted prices that are directly or indirectly observable.
Level 3 Inputs: Unobservable inputs that are significant to the fair value of assets or liabilities.
The classification of an asset or liability is based on the lowest level of input significant to its fair value. Those that are initially classified as Level 3 are subsequently reported as Level 2 when the fair value derived from unobservable inputs is inconsequential to the overall fair value, or if corroborating market data becomes available. Assets and liabilities that are initially reported as Level 2 are subsequently reported as Level 3 if corroborating market data is no longer available. Transfers occur at the end of the reporting period. There were no transfers into or out of Levels 1, 2, and 3 during the three months ended March 31, 2022 and 2021.
The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, notes receivable, accounts payable, accrued liabilities, long-term debt, and finance and operating lease obligations. These financial instruments do not require disclosure by level. The carrying values of all of the Company’s financial instruments included in the accompanying unaudited condensed consolidated balance sheets approximated or equaled their fair values on March 31, 2022 and December 31, 2021.
The carrying values of cash and cash equivalents, accounts receivable and accounts payable (including accrued liabilities) approximated fair value on March 31, 2022 and December 31, 2021, due to their short-term nature.
The carrying value of amounts outstanding under long-term debt agreements with variable rates approximated fair value on March 31, 2022 and December 31, 2021, as the effective interest rates approximated market rates.
Nonrecurring Measurements
Certain assets and liabilities are measured at fair value on a nonrecurring basis. These items are not measured at fair value on an ongoing basis but may be subject to fair value adjustments in certain circumstances. These assets and liabilities include those acquired through the PropX Acquisition, which are required to be measured at fair value on the acquisition date in accordance with ASC Topic 805. See Note 3—The PropX Acquisition.
As of March 31, 2022, the Company recorded $3.4 million of land and $8.4 million of buildings of two properties that meet the held for sale criteria, to assets held for sale at a total fair value of $7.5 million, which are included in prepaid and other current assets in the accompanying unaudited condensed consolidated balance sheet. The Company estimated the fair value of the properties based on a purchase and sale agreement for one property and a letter of intent from a potential buyer for the other, which are Level 3 inputs.
Recurring Measurements
The fair values of the Company’s cash equivalents measured on a recurring basis pursuant to ASC 820-10 Fair Value Measurements and Disclosures are carried at estimated fair value. Cash equivalents consist of money market accounts which the Company has classified as Level 1 given the active market for these accounts. As of March 31, 2022 and December 31, 2021, the Company had cash equivalents, measured at fair value, of $0.3 million and $0.3 million, respectively.
Nonfinancial assets
The Company estimates fair value to perform impairment tests as required on long-lived assets. The inputs used to determine such fair value are primarily based upon internally developed cash flow models and would generally be classified within Level 3 in the event that such assets were required to be measured and recorded at fair value within the unaudited condensed consolidated financial statements. No such measurements were required as of March 31, 2022 and December 31, 2021 as no triggering event was identified.
Credit Risk
The Company’s financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents and trade receivables.
The Company’s cash and cash equivalent balances on deposit with financial institutions total $32.9 million and $20.0 million as of March 31, 2022 and December 31, 2021, 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 March 31, 2022 and December 31, 2021, and for the three months ended March 31, 2022 and March 31, 2021, the below customers accounted for the following percentages of the Company’s consolidated accounts receivable and unbilled
14


LIBERTY ENERGY INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
revenue and consolidated revenues, respectively:
Portion of total of consolidated accounts receivable and unbilled revenue as ofPortion of consolidated revenues for the three months ended March 31,
March 31, 2022December 31, 202120222021
Customer A %12 %10 % %
Customer B % % %10 %
The Company mitigates the associated credit risk by performing credit evaluations and monitoring the payment patterns of its customers.
As of March 31, 2022 and December 31, 2021, the Company had $0.9 million in allowance for credit losses as follows:
($ in thousands)
Provision for credit losses on December 31, 2021$884 
Credit Losses:
Current period provision 
Amounts written off 
Provision for credit losses on March 31, 2022$884 

Note 10—Equity
Restricted Stock Units
Restricted stock units (“RSUs”) granted pursuant to the Long Term Incentive Plan (“LTIP”), if they vest, will be settled in shares of the Company’s Class A Common Stock. RSUs were granted with vesting terms up to five years. Changes in non-vested RSUs outstanding under the LTIP during the three months ended March 31, 2022 were as follows:
Number of UnitsWeighted Average Grant Date Fair Value per Unit
Non-vested as of December 31, 20212,741,061 $11.04 
Granted612,036 11.96 
Vested(86,103)10.75 
Forfeited(48,742)9.87 
Outstanding as of March 31, 20223,218,252 $11.24 
15


LIBERTY ENERGY INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Performance Restricted Stock Units
Performance restricted stock units (“PSUs”) granted pursuant to the LTIP, if they vest, will be settled in shares of the Company’s Class A Common Stock. PSUs were granted with a three year cliff vesting schedule, subject to a performance target compared to an index of competitors results over the three year period as designated in the award. The Company records compensation expense based on the Company’s best estimate of the number of PSUs that will vest at the end of the performance period. If such performance targets are not met, or are not expected to be met, no compensation expense is recognized and any recognized compensation expense is reversed. Changes in non-vested PSUs outstanding under the LTIP during the three months ended March 31, 2022 were as follows:
Number of UnitsWeighted Average Grant Date Fair Value per Unit
Non-vested as of December 31, 20211,306,945 $12.45 
Granted378,479 12.03 
Vested  
Forfeited  
Outstanding as of March 31, 20221,685,424 $12.35 
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 $6.8 million and $4.9 million for the three months ended March 31, 2022 and 2021, respectively. There was approximately $29.5 million of unrecognized compensation expense relating to outstanding RSUs and PSUs as of March 31, 2022. The unrecognized compensation expense will be recognized on a straight-line basis over the weighted average remaining vesting period of two years.
Dividends
On April 2, 2020, the Company suspended future quarterly dividends until business conditions warrant reinstatement. As of March 31, 2022 dividends have not been reinstated by the Company.
As of March 31, 2022 and December 31, 2021, the Company had $0.2 million and $0.2 million of dividends payable related to RSUs to be paid upon vesting, respectively. Dividends related to forfeited RSUs will be forfeited.

16


LIBERTY ENERGY INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 11—Net Loss per Share
Basic net loss per share measures the performance of an entity over the reporting period. Diluted net loss per share measures the performance of an entity over the reporting period while giving effect to all potentially dilutive common shares that were outstanding during the period. The Company uses the “if-converted” method to determine the potential dilutive effect of its Class B Common Stock and the treasury stock method to determine the potential dilutive effect of outstanding restricted stock and RSUs.
The following table reflects the allocation of net loss to common stockholders and net loss per share computations for the periods indicated based on a weighted average number of common stock outstanding:
Three Months Ended
(In thousands)March 31, 2022March 31, 2021
Basic Net Loss Per Share
Numerator:
Net loss attributable to Liberty Energy Inc. stockholders$(5,376)$(34,205)
Denominator:
Basic weighted average common shares outstanding183,999 163,207 
Basic net loss per share attributable to Liberty Energy Inc. stockholders$(0.03)$(0.21)
Diluted Net Loss Per Share
Numerator:
Net loss attributable to Liberty Energy Inc. stockholders$(5,376)$(34,205)
Effect of exchange of the shares of Class B Common Stock for shares of Class A Common Stock  
Diluted net loss attributable to Liberty Energy Inc. stockholders$(5,376)$(34,205)
Denominator:
Basic weighted average shares outstanding183,999 163,207 
Effect of dilutive securities:
Restricted stock units  
Class B Common Stock  
Diluted weighted average shares outstanding183,999 163,207 
Diluted net loss per share attributable to Liberty Energy Inc. stockholders$(0.03)$(0.21)
In accordance with GAAP, diluted weighted average common shares outstanding for the three months ended March 31, 2022 exclude 2,092 weighted average shares of Class B Common Stock, and 4,745 weighted average shares of restricted stock units. Additionally, diluted weighted average common shares outstanding for the three months ended March 31, 2021 exclude 16,333 weighted average shares of Class B Common Stock and 3,326 weighted average shares of restricted stock units.
Note 12—Income Taxes
The Company is a corporation and is subject to taxation in the United States, Canada and various state, local and provincial jurisdictions. Liberty LLC is treated as a partnership, and its income is passed through to its owners for income tax purposes. Liberty LLC’s members, including the Company, are liable for federal, state and local income taxes based on their share of Liberty LLC’s pass-through taxable income.
The Company may distribute cash from foreign subsidiaries to its U.S. parent as business needs arise. The Company has not provided for deferred income taxes on the undistributed earnings from certain foreign subsidiaries earnings, as such are considered to be indefinitely reinvested. If such earnings were to be distributed, any income and/or withholding tax would not be significant.
The effective global income tax rate applicable to the Company for the three months ended March 31, 2022 was (17.8)%, compared to 16.0% for the period ended March 31, 2021. The Company’s effective tax rate is less than the statutory federal income tax rate of 21.0% due to the Company recording a valuation allowance on its U.S. net deferred tax assets and excluding any U.S. tax benefit on U.S. losses while calculating income tax expense on Canada operations that are not subject to a
17


LIBERTY ENERGY INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
valuation allowance. The Company’s effective tax rate is also less than the statutory rate because of the non-controlling interest’s share of Liberty LLC’s pass-through results for federal, state and local income tax reporting, upon which no taxes are payable by the Company. The Company recognized an income tax expense of $0.8 million and an income tax benefit of $7.4 million during the three months ended March 31, 2022 and 2021, respectively.
Per the Coronavirus Aid, Relief and Economic Security (“CARES”) Act enacted on March 27, 2020, net operating losses (“NOL”) incurred in 2019 and 2020 may be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company has applied for and expects to receive a NOL carryback refund to recover $5.5 million of cash taxes paid by the Company in 2018. This amount has been reflected as a receivable in prepaids and other current assets line item in the accompanying unaudited condensed consolidated balance sheets. The remaining deferred tax asset for net operating losses available for carryforward are presented net of the Company’s valuation allowance.
The Company recognized a deferred tax asset and liability in the amount of $0.6 million as of March 31, 2022 and December 31, 2021. Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial reporting and tax bases of assets and liabilities, and are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
The Company evaluated its deferred tax assets as of March 31, 2022 and considered both positive and negative evidence in applying the guidance of ASC 740 Income Taxes (“ASC 740”) related to the realizability of its deferred tax assets. Consistent with the prior quarter, in accordance with ASC 740, the objective negative evidence of entering into a three year cumulative pre-tax book loss position, primarily due to COVID-19 related losses, outweighed the consideration of the Company’s subjective positive evidence of expected future profitability in evaluating the realizability of its deferred tax assets.
Tax Receivable Agreements
In connection with the IPO, on January 17, 2018, the Company entered into two Tax Receivable Agreements (the “TRAs”) with R/C Energy IV Direct Partnership, L.P. and the then existing owners that continued to own Liberty LLC Units (each such person and any permitted transferee, a “TRA Holder” and together, the “TRA Holders”). The TRAs generally provide for the payment by the Company of 85% of the net cash savings, if any, in U.S. federal, state, and local income tax and franchise tax (computed using simplifying assumptions to address the impact of state and local taxes) that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the IPO as a result, as applicable to each TRA Holder, of (i) certain increases in tax basis that occur as a result of the Company’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s Liberty LLC Units in connection with the IPO or pursuant to the exercise of redemption or call rights, (ii) any net operating losses available to the Company as a result of the Corporate Reorganization, and (iii) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, any payments the Company makes under the TRAs.
During the three months ended March 31, 2022, exchanges of Liberty LLC Units and shares of Class B Common Stock initially resulted in a net increase of $6.5 million in deferred tax assets, and an increase of $5.5 million in amounts payable under the TRAs, all of which are subject to the valuation allowance and remeasurement of TRA liability discussed below, and which are recorded through equity. The Company did not make any TRA payments for the three months ended March 31, 2022.
During the three months ended March 31, 2021, exchanges of Liberty LLC Units and shares of Class B Common Stock resulted in a net increase of $33.0 million in deferred tax assets, and an