The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the accompanying unaudited
condensed consolidated financial statements and related notes. The following
discussion contains "forward-looking statements" that reflect our future plans,
estimates, beliefs, and expected performance. Our actual results may differ
materially from those anticipated in these forward-looking statements as a
result of a variety of risks and uncertainties, including those described in
"Cautionary Note Regarding Forward-Looking Statements," the Annual Report under
the heading "Item 1A. Risk Factors," and in "Part II - Other Information, Item
1A.-Risk Factors" included herein. We assume no obligation to update any of
these forward-looking statements.

Overview



The Company, together with its subsidiaries, is a leading integrated oilfield
services and technology company focused on providing innovative hydraulic
fracturing services and related technologies to onshore oil and natural gas E&P
companies in North America. We offer customers hydraulic fracturing services,
together with complementary services including wireline services, proppant
delivery solutions, data analytics, related goods (including our sand mine
operations), and technologies that will facilitate lower emission completions,
thereby helping our customers reduce their emissions profile. We have grown from
one active hydraulic fracturing fleet in December 2011 to over 30 active fleets
as of June 30, 2022. We provide our services primarily in the Permian Basin, the
Eagle Ford Shale, the DJ Basin, the Williston Basin, the San Juan Basin, the
Powder River Basin, the Haynesville Shale, the SCOOP/STACK, the Marcellus Shale,
Utica Shale, and the Western Canadian Sedimentary Basin. Additionally, we
operate two sand mines in the Permian Basin.

On December 31, 2020, the Company acquired certain assets and liabilities of
Schlumberger's OneStim business, which provides hydraulic fracturing pressure
pumping services in onshore United States and Canada, including its pressure
pumping, pumpdown perforating and Permian frac sand business, in exchange for
consideration resulting in a total of 66,326,134 shares of the Class A Common
Stock being issued in connection with the OneStim Acquisition. As of July 22,
2022, Schlumberger owned 12.3% of the issued and outstanding shares of our
Common Stock. The combined company delivers best-in-class completion services
for the sustainable development of unconventional resource plays in the United
States and Canada onshore markets.

On October 26, 2021, the Company acquired PropX in exchange for $11.9 million in
cash and 3,405,526 shares of Class A Common Stock and 2,441,010 shares of Class
B Common Stock, and 2,441,010 Liberty LLC Units, for total consideration of
$103.0 million, based on the Class A Common Stock closing price of $15.58 on
October 26, 2021, subject to customary post-closing adjustments. The Liberty LLC
Units are redeemable for an equivalent number of shares of Class A Common Stock
at any time, at the election of the shareholder. Founded in 2016, PropX is a
leading provider of last-mile proppant delivery solutions including proppant
handling equipment and logistics software across North America. PropX offers
innovative environmentally friendly technology with optimized dry and wet sand
containers and wellsite proppant handling equipment that drive logistics
efficiency and reduce noise and emissions. We believe that PropX wet sand
handling technology is a key enabler of the next step of cost and emissions
reductions in the proppant industry. PropX also offers customers the latest
real-time logistics software, PropConnect, for sale or as hosted software as a
service.

We believe technical innovation and strong relationships with our customer and
supplier bases distinguish us from our competitors and are the foundations of
our business. We expect that E&P companies will continue to focus on
technological innovation as completion complexity and fracture intensity of
horizontal wells increases, particularly as customers are increasingly focused
on reducing emissions from their completions operations. We remain proactive in
developing innovative solutions to industry challenges, including developing:
(i) our databases of U.S. unconventional wells to which we apply our proprietary
multi-variable statistical analysis technologies to provide differential insight
into fracture design optimization; (ii) our Liberty Quiet Fleet® design which
significantly reduces noise levels compared to conventional hydraulic fracturing
fleets; (iii) hydraulic fracturing fluid systems tailored to the specific
reservoir properties in the basins in which we operate; (iv) our dual fuel
dynamic gas blending 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) the successful test of digiFrac™, our innovative,
purpose-built electric frac pump that has approximately 25% lower CO2e emission
profile than the Tier IV DGB; and (vi) our PropX wet sand handling technology
which eliminates the need to dry sand, enabling the deployment of mobile mines
nearer to wellsites. In addition, our integrated supply chain includes proppant,
chemicals, equipment, logistics and integrated software which we believe
promotes wellsite efficiency and leads to more pumping hours and higher
productivity throughout the year to better service our customers. In order to
achieve our technological objectives, we carefully manage our liquidity and debt
position to promote operational flexibility and invest in the business
throughout the full commodity cycle in the regions we operate.

                                       22

--------------------------------------------------------------------------------

Table of Contents

Recent Trends and Outlook



While the global economic recovery outlook has softened on reverberating impacts
from higher inflation, rising interest rates and the Russian invasion of
Ukraine, oil and gas markets remain constructive. Today, low global oil and gas
inventories, limited OPEC spare production capacity and a lack of refining
capacity are concurrently being met with increased energy demand. Oil and
natural gas demand growth is coming in part from the post-pandemic recovery in
travel, China's emergence from its enforced Covid lockdowns, plus seasonal
demand. These are all further exacerbated by the Russia/Ukraine conflict and the
potential for sanctions imposed on Russian oil exports, coupled with Russia's
decision to constrain natural gas pipeline exports to Europe.

North America is positioned to be a large provider of incremental oil and gas
supply. Today, E&P operators are evaluating the opportunity to deploy
incremental capital in North America to modestly grow production while remaining
focused on shareholder priorities. Supply is restricted by a tight frac market,
where equipment, supply chain and labor constraints limit frac fleet
availability and service quality. Moreover, many operators desire modern,
ESG-friendly frac fleet technologies that provide the opportunity for both
emissions reductions and fuel savings.

The frac market is near full utilization and we expect the supply of available
frac fleets to remain tight through the remainder of 2022. We were disciplined
in restraining fleet reactivations in the post-Covid era but pricing has now
recovered to where we, in support of our customers' long-term development needs,
are reactivating several of our recently acquired, available fleets.
Importantly, these long-term, dedicated customers seek additional next
generation fleets that are not readily available today, and we are providing an
avenue to serve those customers and simultaneously driving free cash flow from
these existing fleets to reinvest in our fleet modernization program.

During the second quarter of 2022, the posted WTI price traded at an average of
$108.83 per barrel ("Bbl"), as compared to the second quarter of 2021 average of
$66.19 per Bbl, and first quarter of 2022 average of $95.18 per Bbl. In
addition, the average domestic onshore rig count for the United States and
Canada was 810 rigs reported in the second quarter of 2022, up from the second
quarter of 2021 of 508 and slightly decreased from the first quarter of 2022 of
816, according to a report from Baker Hughes.

                                       23

--------------------------------------------------------------------------------

Table of Contents

Results of Operations

Three months ended June 30, 2022 compared to three months ended June 30, 2021


                                                                      Three months ended June 30,
Description                                                    2022               2021              Change
                                                                             (in thousands)
Revenue                                                    $ 942,619

$ 581,288 $ 361,331 Cost of services, excluding depreciation, depletion and amortization shown separately

                                713,718            521,956            191,762
General and administrative                                    42,162             29,403             12,759
Transaction, severance and other costs                         2,192              2,996               (804)
Depreciation, depletion and amortization                      77,379             63,214             14,165
Gain on disposal of assets                                    (3,436)              (277)            (3,159)
Operating income (loss)                                      110,604            (36,004)           146,608
Other expense, net                                             5,030                462              4,568
Net income (loss) before income taxes                        105,574            (36,466)           142,040
Income tax expense                                               235             16,006            (15,771)
Net income (loss)                                            105,339            (52,472)           157,811

Less: Net income (loss) attributable to non-controlling interests

                                                        183             (1,912)             2,095
Net income (loss) attributable to Liberty Energy Inc.
stockholders                                               $ 105,156          $ (50,560)         $ 155,716


Revenue
Our revenue increased $361.3 million, or 62.2%, to $942.6 million for the three
months ended June 30, 2022 compared to $581.3 million for the three months ended
June 30, 2021. The increase in revenue is attributable to higher service pricing
and an activity-driven increase in fleet utilization and efficiency commensurate
with increased demand for hydraulic fracturing services.

Cost of Services



Cost of services (excluding depreciation, depletion and amortization) increased
$191.8 million, or 36.7%, to $713.7 million for the three months ended June 30,
2022 compared to $522.0 million for the three months ended June 30, 2021. The
higher expense was primarily related to increases in materials and parts
consumption and higher labor costs related to higher fleet utilization as well
as ongoing inflationary increases impacting costs for materials, labor, and
maintenance parts.

General and Administrative



General and administrative expenses increased $12.8 million, or 43.4%, to $42.2
million for the three months ended June 30, 2022 compared to $29.4 million for
the three months ended June 30, 2021 primarily related to increases in
performance-based variable compensation, labor cost inflation, and corporate
costs related to increased activity.

Transaction, Severance and Other Costs



Transaction, severance and other costs decreased $0.8 million, or 26.8%, to $2.2
million for the three months ended June 30, 2022 compared to $3.0 million for
the three months ended June 30, 2021. The costs incurred in the three months
ended June 30, 2021 primarily related to integration cost, investment banking,
legal, accounting, and other professional services provided in connection with
the OneStim Acquisition. Such costs were lower during the three months ended
June 30, 2022 as the integration efforts move towards completion.

Depreciation, Depletion and Amortization



Depreciation, depletion and amortization expense increased $14.2 million, or
22.4%, to $77.4 million for the three months ended June 30, 2022 compared to
$63.2 million for the three months ended June 30, 2021. The increase in 2022 was
due to additional equipment placed in service since the prior year period and
additional depreciation from property acquired in the PropX Acquisition.
                                       24

--------------------------------------------------------------------------------

Table of Contents

Gain on Disposal of Assets



The Company recognized a gain on disposal of assets of $3.4 million for the
three months ended June 30, 2022 primarily as a result of the sale of used field
equipment and light duty trucks in a strong used vehicle and equipment market
compared to a gain of $0.3 million for the three months ended June 30, 2021 due
to miscellaneous equipment disposals. All disposals recorded during the three
months ended June 30, 2022 and 2021 were in the normal course of business.

Operating Income (Loss)



The Company recorded operating income of $110.6 million for the three months
ended June 30, 2022 compared to operating loss of $36.0 million for the three
months ended June 30, 2021, an increase in operating results of $146.6 million,
or 407.2%. The increase in operating income is primarily due to the $361.3
million, or 62.2%, increase in total revenue only partially offset by a $214.7
million increase in total operating expenses, the significant components of
which are discussed above.

Other Expense, net



Other expense, net increased $4.6 million, or 988.7%, to $5.0 million for the
three months ended June 30, 2022 compared to $0.5 million for the three months
ended June 30, 2021. Other expense, net is comprised of loss (gain) on
remeasurement of liability under the TRAs and interest expense, net. The Company
remeasured the liability under the TRAs resulting in a loss of $0.2 million for
the three months ended June 30, 2022, compared to a gain of $3.3 million for the
three months ended June 30, 2021. Additionally, interest expense, net increased
$1.1 million as a result of increased borrowings under the credit facility.

Net Income (loss) before Income Taxes



The Company realized net income before income taxes of $105.6 million for the
three months ended June 30, 2022 compared to net loss before income taxes of
$36.5 million for the three months ended June 30, 2021. The increase in income
is primarily attributable to an increase in revenue, as discussed above, related
to the increase in activity and service pricing.

Income Tax Expense



We recognized a tax expense of $0.2 million for the three months ended June 30,
2022, at an effective rate of 0.2%, compared to a tax expense of $16.0 million,
at an effective rate of (43.9)%, recognized during the three months ended June
30, 2021. The decrease in income tax expense is primarily attributable to the
Company recording a valuation allowance on its U.S. net deferred tax assets,
beginning in the second quarter of 2021, resulting in income tax expense for
that period, while in subsequent periods no tax expense or benefit is recognized
on U.S. state and federal income or loss.
                                       25

--------------------------------------------------------------------------------

Table of Contents

Six months ended June 30, 2022 compared to six months ended June 30, 2021



                                                                         Six months ended June 30,
Description                                                     2022                 2021               Change
                                                                               (in thousands)
Revenue                                                    $ 1,735,389

$ 1,133,320 $ 602,069 Cost of services, excluding depreciation, depletion and amortization shown separately

                                1,383,737            1,020,891            362,846
General and administrative                                      80,480               55,762             24,718
Transaction, severance and other costs                           3,526               10,617             (7,091)
Depreciation, depletion and amortization                       151,967              125,270             26,697
Loss (gain) on disposal of assets                                1,236                 (997)             2,233
Operating income (loss)                                        114,443              (78,223)           192,666
Other expense, net                                              13,519                4,216              9,303
Net income (loss) before income taxes                          100,924              (82,439)           183,363
Income tax expense                                               1,065                8,649             (7,584)
Net income (loss)                                               99,859              (91,088)           190,947

Less: Net income (loss) attributable to non-controlling interests

                                                           79               (6,323)             6,402
Net income (loss) attributable to Liberty Energy Inc.
stockholders                                               $    99,780          $   (84,765)         $ 184,545


Revenue

Our revenue increased $602.1 million, or 53.1%, to $1.7 billion for the six
months ended June 30, 2022 compared to $1.1 billion for the six months ended
June 30, 2021. The increase in revenue is attributable to higher service pricing
and an activity-driven increase in fleet utilization and efficiency commensurate
with increased demand for hydraulic fracturing services.

Cost of Services



Cost of services (excluding depreciation, depletion and amortization) increased
$362.8 million, or 35.5%, to $1.4 billion for the six months ended June 30, 2022
compared to $1.0 billion for the six months ended June 30, 2021. The higher
expense was primarily related to increases in materials and parts consumption
and higher labor costs related to higher fleet utilization as well as
inflationary increases impacting costs for materials, labor, and maintenance
parts.

General and Administrative

General and administrative expenses increased $24.7 million, or 44.3%, to
$80.5 million for the six months ended June 30, 2022 compared to $55.8 million
for the six months ended June 30, 2021 primarily related to increases from
reinstated bonus programs which had been temporarily suspended during the first
quarter of 2021 as a result of the COVID-19 pandemic, labor cost inflation, and
corporate costs related to increased levels of activity.

Transaction, Severance and Other Costs



Transaction, severance and other costs decreased $7.1 million, or 66.8%, to
$3.5 million for the six months ended June 30, 2022 compared to $10.6 million
for the six months ended June 30, 2021. The costs incurred in the six months
ended June 30, 2021 primarily related to integration costs, investment banking,
legal, accounting, and other professional services provided in connection with
the OneStim Acquisition. Such costs were lower during the six months ended June
30, 2022 as the integration efforts move towards completion.

Depreciation, Depletion and Amortization



Depreciation, depletion and amortization expense increased $26.7 million, or
21.3%, to $152.0 million for the six months ended June 30, 2022 compared to
$125.3 million for the six months ended June 30, 2021. The increase in 2022 was
due to additional equipment placed in service since the prior year period and
additional depreciation from property acquired in the PropX Acquisition.
                                       26

--------------------------------------------------------------------------------

Table of Contents

Loss (gain) on disposal of assets



The Company recognized a loss on disposal of assets of $1.2 million for the six
months ended June 30, 2022 primarily as a result of the sale of one and plan of
sale for another non-strategic facility acquired in the OneStim Acquisition
compared to a gain of $1.0 million for the six months ended June 30, 2021 due to
miscellaneous equipment disposals in the normal course of business.

Operating Income (Loss)



The Company recorded operating income of $114.4 million for the six months ended
June 30, 2022 compared to operating loss of $78.2 million for the six months
ended June 30, 2021, The operating income is primarily due to the $602.1
million, or 53.1%, increase in total revenue partially offset by a $409.4
million increase in total operating expenses, the significant components of
which are discussed above.

Other Expense, net



Other expense, net increased $9.3 million to $13.5 million for the six months
ended June 30, 2022 compared to $4.2 million for the six months ended June 30,
2021. Other expense, net is comprised of loss on remeasurement of liability
under the TRAs and interest expense, net. The Company remeasured the liability
under the TRAs resulting in a loss of $4.3 million for the six months ended June
30, 2022, compared to a gain of $3.3 million for the six months ended June 30,
2021. Additionally, interest expense increased $1.7 million as a result of
increased borrowings under the credit facility.

Net Income (Loss) before Income Taxes



The Company realized net income before income taxes of $100.9 million for the
six months ended June 30, 2022 compared to net loss before income taxes of $82.4
million for the six months ended June 30, 2021. The increase in results is
primarily attributable to an increase in revenue, as discussed above, related to
the increase in activity and service pricing.

Income Tax Expense



Income tax expense decreased $7.6 million to $1.1 million for the six months
ended June 30, 2022, at an effective rate of 1.1%, compared to $8.6 million, at
an effective rate of (10.5)%, recognized during the six months ended June 30,
2021. This decrease in income tax expense is primarily attributable to the
Company recording a valuation allowance on its U.S. net deferred tax assets,
beginning in the second quarter of 2021, resulting in income tax expense for
that period, while in subsequent periods no tax expense or benefit is recognized
on U.S. state and federal income or loss.

Comparison of Non-GAAP Financial Measures



We view EBITDA and Adjusted EBITDA as important indicators of performance. 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, costs of asset
acquisitions, gain or loss on the disposal of assets, bad debt reserves,
transaction, severance, and other costs, the loss or gain on remeasurement of
liability under our tax receivable agreements 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. We present EBITDA and Adjusted EBITDA because we believe they provide
useful information regarding the factors and trends affecting our business in
addition to measures calculated under GAAP.

Note Regarding Non-GAAP Financial Measures



EBITDA and Adjusted EBITDA are not financial measures presented in accordance
with GAAP. We believe that the presentation of these non-GAAP financial measures
will provide useful information to investors in assessing our financial
performance and results of operations. Net income (loss) is the GAAP measure
most directly comparable to EBITDA and Adjusted EBITDA. Our non-GAAP financial
measures should not be considered as alternatives to the most directly
comparable GAAP financial measure. Each of these non-GAAP financial measures has
important limitations as an analytical tool due to exclusion of some but not all
items that affect the most directly comparable GAAP financial measures. You
should not consider EBITDA or Adjusted EBITDA in isolation or as substitutes for
an analysis of our results as reported under GAAP. Because EBITDA and Adjusted
EBITDA may be defined differently by other companies in our industry, our
definitions of these non-GAAP financial measures may not be comparable to
similarly titled measures of other companies, thereby diminishing their utility.
                                       27

--------------------------------------------------------------------------------

Table of Contents



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

Three and six months ended June 30, 2022 compared to three and six months ended June 30, 2021: EBITDA and Adjusted EBITDA


                                                Three Months Ended June 30,                               Six Months Ended June 30,
Description                              2022               2021              Change              2022               2021              Change
                                                       (in thousands)
Net income (loss)                    $ 105,339          $ (52,472)         $ 157,811          $  99,859          $ (91,088)         $ 190,947
Depreciation, depletion and
amortization                            77,379             63,214             14,165            151,967            125,270             26,697
Interest expense                         4,862              3,767              1,095              9,186              7,521              1,665
Income tax expense                         235             16,006            (15,771)             1,065              8,649             (7,584)
EBITDA                               $ 187,815          $  30,515

$ 157,300 $ 262,077 $ 50,352 $ 211,725 Stock based compensation expense 4,201

              5,899             (1,698)            11,014             10,846                168
Fleet start-up and lay-down costs        5,169                  -              5,169              5,754                  -              5,754
Transaction, severance and other
costs                                    2,192              2,996               (804)             3,526             10,617             (7,091)
(Gain) loss on disposal of assets       (3,436)              (277)            (3,159)             1,236               (997)             2,233
Provision for credit losses                  -                745               (745)                 -                745               (745)
Loss (gain) on remeasurement of
liability under tax receivable
agreements                                 168             (3,305)             3,473              4,333             (3,305)             7,638
Adjusted EBITDA                      $ 196,109          $  36,573

$ 159,536 $ 287,940 $ 68,258 $ 219,682




EBITDA was $187.8 million for the three months ended June 30, 2022 compared to
$30.5 million for the three months ended June 30, 2021. Adjusted EBITDA was
$196.1 million for the three months ended June 30, 2022 compared to $36.6
million for the three months ended June 30, 2021. The increases in EBITDA and
Adjusted EBITDA primarily resulted from improved market conditions and activity
levels as described above under the captions Revenue, Cost of Services, and
General and Administrative Expenses for the Three Months Ended June 30, 2022
compared to the Three Months Ended June 30, 2021.

EBITDA was $262.1 million for the six months ended June 30, 2022 compared to
$50.4 million for the six months ended June 30, 2021. Adjusted EBITDA was $287.9
million for the six months ended June 30, 2022 compared to $68.3 million for the
six months ended June 30, 2021. The increases in EBITDA and Adjusted EBITDA
primarily resulted from improved market conditions and activity levels as
described above under the captions Revenue, Cost of Services, and General and
Administrative Expenses for the Six Months Ended June 30, 2022 compared to the
Six Months Ended June 30, 2021.

Liquidity and Capital Resources

Overview



Historically, our primary sources of liquidity to date have been cash flows from
operations, proceeds from our IPO, and borrowings under our Credit Facilities.
We expect to fund operations and organic growth with cash flows from operations
and available borrowings under our Credit Facilities. We monitor the
availability of capital resources such as equity and debt financings that could
be leverage for current or future financial obligations including those related
to acquisitions, capital expenditures, working capital and other liquidity
requirements. We may incur additional indebtedness or issue equity in order to
meet our capital expenditure activities and liquidity requirements, as well as
to fund growth opportunities that we pursue, including via acquisition, such as
with the OneStim Acquisition and the PropX Acquisition. Our primary uses of
capital have been capital expenditures to support organic growth and funding
ongoing operations, including maintenance and fleet upgrades.

Cash and cash equivalents increased by $21.5 million to $41.5 million as of June
30, 2022 compared to $20.0 million as of December 31, 2021, while working
capital excluding cash and current liabilities under debt and lease arrangements
increased $134.9 million.
                                       28

--------------------------------------------------------------------------------

Table of Contents



We have $350.0 million committed under the ABL Facility, increased to $425
million subsequent to June 30, 2022, see Note 17-Subsequent Events to the
consolidated financial statements included in "Item 1. Financial Statements
(unaudited)" for further details, 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, 2022, the borrowing base was
calculated to be $350.0 million, and the Company had $150.0 million outstanding,
in addition to a letter of credit in the amount of $1.4 million, with $198.6
million of remaining availability. Additionally, we have $105.6 million
borrowings remaining on the Term Loan Facility, which was originally $175.0
million.

The ABL Facility has a maturity date of 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, which matures on
September 19, 2024.

The Credit Facilities contain covenants that restrict our ability to take certain actions. At June 30, 2022, the Company was in compliance with all debt covenants.

See Note 8-Debt to the consolidated financial statements included in "Item 1. Financial Statements (unaudited)" for further details.



We have no material off balance sheet arrangements as of June 30, 2022, except
for purchase commitments under supply agreements as disclosed above under "Item
1. Financial Statements-Note 15-Commitments & Contingencies." 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.

Share Repurchase Program



Under our share repurchase program, the Company is authorized to repurchase up
to $250.0 million of outstanding Class A Common Stock through and including
July 31, 2024. 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. The timing and the amount of repurchases, if any, 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 the
repurchases by using cash on hand, borrowings under its revolving credit
facility and expected free cash flow to be generated over the next two years.

Cash Flows

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


                                                             Six Months Ended June 30,
Description                                              2022           2021         Change
                                                                   (in thousands)
Net cash provided by operating activities             $ 135,629      $ 35,566      $ 100,063
Net cash used in investing activities                  (232,824)

(65,895) (166,929) Net cash provided by (used in) financing activities 118,758 (8,175) 126,933

Analysis of Cash Flow Changes Between the Six Months Ended June 30, 2022 and 2021



Operating Activities. Net cash provided by operating activities was $135.6
million for the six months ended June 30, 2022, compared to $35.6 million for
the six months ended June 30, 2021. The $100.1 million increase in cash from
operating activities is primarily attributable to a $602.1 million increase in
revenues, offset by a $380.5 million increase in cash operating expenses and a
$134.3 million decrease in cash from changes in working capital for the six
months ended June 30, 2022, compared to a $14.4 million decrease in cash from
changes in working capital for the six months ended June 30, 2021.

Investing Activities. Net cash used in investing activities was $232.8 million
for the six months ended June 30, 2022, compared to $65.9 million for the six
months ended June 30, 2021. Cash used in investing activities was higher during
the six months ended June 30, 2022, compared to the six months ended June 30,
2021 as the Company continued to invest in equipment, including building new
digiFrac™ fleets, to support increased customer demand in next generation
equipment and technology.

Financing Activities. Net cash provided by financing activities was $118.8
million for the six months ended June 30, 2022, compared to net cash used in
financing activities of $8.2 million for the six months ended June 30, 2021. The
$126.9 million increase in cash provided by financing activities was primarily
due to net borrowings of $132.0 million on the ABL
                                       29

--------------------------------------------------------------------------------

Table of Contents

Facility during the six months ended June 30, 2022, compared to no net borrowings on the ABL Facility for the six months ended June 30, 2021. Additionally, there was a $1.4 million decrease in payments on finance lease liabilities as the number of finance leases active for the full period has decreased since June 30, 2021.

Cash Requirements



Our material cash commitments consist primarily of obligations under long-term
debt, TRAs, finance and operating leases for property and equipment, and
purchase obligations as part of normal operations. We have no material off
balance sheet arrangements as of June 30, 2022, except for obligations of $27.4
million payable within 2022, $18.2 million in 2023, and $4.2 million payable
thereafter. See Note 15-Commitments & Contingencies to the unaudited condensed
consolidated financial statements included in "Item 1. Financial Statements
(Unaudited)" for information regarding scheduled contractual obligations. There
have been no other material changes to cash requirements since the year ended
December 31, 2021.

Income Taxes

The Company is a corporation and is subject to U.S. federal, state, and local
income tax on its share of Liberty LLC's taxable income. The Company is also
subject to Canada federal and provincial income tax on its foreign operations.
The combined effective tax rate applicable to the Company for the six months
ended June 30, 2022 and 2021 was 1.1% and (10.5)%, respectively. The Company's
effective tax rate is significantly less than the federal statutory income tax
rate of 21.0% due to the Company recording a valuation allowance on its U.S. net
deferred tax assets as of June 30, 2022, due to entering into a three year
cumulative pre-tax book loss position, primarily as a result of COVID-19 related
losses in 2021. The Company's effective tax rate is also less than the statutory
rate because of foreign operations for 2021, and 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 for the six months
ended June 30, 2022 and 2021. The Company recognized income tax expense of $0.2
million and $1.1 million for the three and six months ended June 30, 2022,
respectively, and $16.0 million and $8.6 million for the three and six months
ended June 30, 2021, respectively, which included the impact of the initial
recording of a valuation allowance on a portion of the Company's deferred tax
assets.

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 previously 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 the
prepaids and other current assets line item in the accompanying audited
consolidated balance sheets.

Refer to Note 12- Income Taxes to the consolidated financial statements for additional information related to income tax expense.

Tax Receivable Agreements

Refer to Note 12- Income Taxes to the consolidated financial statements for additional information related to tax receivable agreements.

Critical Accounting Estimates



The Company's unaudited condensed consolidated financial statements are prepared
in accordance with GAAP, which require us to make estimates and assumptions (see
Note 2-Significant Accounting Policies to the unaudited consolidated financial
statements in this Form 10-Q and Note 2-Significant Accounting Policies and
Management's Discussion and Analysis of Financial Condition and Results of
Operations included in the Annual Report). A critical accounting estimate is one
that requires our most difficult, subjective or complex estimates and
assessments and is fundamental to our results of operations. We base our
estimates on historical experience and on various other assumptions we believe
to be reasonable according to the current facts and circumstances, the results
of which form the basis for making judgments about the carrying values of assets
and liabilities that are not readily apparent from other sources.

There have been no material changes in our critical accounting estimates since our Annual Report.


                                       30

--------------------------------------------------------------------------------

Table of Contents

© Edgar Online, source Glimpses