Liberty Energy Inc
For the period ended Jun 30, 2024. Filed Jul 18, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 18, 2024
LBRT$11.96+5.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-18.
0001694028-24-000031
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-18.
0001694028-24-000082
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 63 previous paragraphs and 83 current paragraphs.
37 unchanged; 21 reworded; 21 added; 5 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
Global oil and gas markets are expected to remain constructive on favorable multi-year market fundamentals, despite near term volatility in commodity prices. In June 2024, a decision from OPEC+ to gradually unwind voluntary production cuts beginning in October drove oil prices lower. Even then, prices were well above those supportive of attractive E&P returns and have since recovered on relatively balanced supply and demand dynamics owing to resilient global economic growth and rising demand for transportation fuels with the summer travel season underway.
Current report
Natural gas prices saw a resurgence from early spring lows on reduced drilling and completions activity and curtailed production. Recent reinstatement of some curtailed production has moved prices downward but still above recent cycle lows. The commissioning of new LNG export facilities and continued growth in power demand are expected to drive higher natural gas demand, and eventually firmer natural gas prices.
Current report
Frac industry trends have moderated marginally in recent periods, on the heels of slightly softer drilling activity in both oil and gas basins during the first half of 2024. Industry-wide completions activity has declined to levels consistent with only flat oil and gas production, and we believe completions activity will need to increase from current levels in order for the U.S. to increase oil and gas production. We expect this to lead to a resurgence in demand for quality frac crews in 2025.
Current report
Cost of services (excluding depreciation, depletion, and amortization) increased$2.3 million, or 0.3%, to$835.8 million for the three months ended June 30, 2024 compared to $833.5 million for the three months ended June 30, 2023. The increase in expense was primarily related to increased activity levels largely offset by decreases in materials pricing.
Current report
General and administrative expenses were consistent between periods, decreasing$0.3 million, or 0.6%, to$57.7 million for the three months ended June 30, 2024 compared to $58.0 million for the three months ended June 30, 2023.
Current report
Transaction and Other Costs
Current report
The Company recorded a loss on disposal of assets of $1.2 million for the three months ended June 30, 2024 compared to a gain of $3.7 million for the three months ended June 30, 2023, primarily related to sales of used field equipment and light duty trucks in a strong used vehicle and equipment market. All disposals were in the normal course of business.
Current report
Six Months Ended June 30, 2024, Compared to Six Months Ended June 30, 2023
Current report
Revenue
Current report
Our revenue decreased $224.1 million, or 9.1%, to $2.2 billion for the six months ended June 30, 2024 compared to $2.5 billion for the six months ended June 30, 2023. The decrease in revenue was primarily attributable to a decrease in materials pricing and slightly lower services prices, partially offset by higher activity levels. The impact of increased fleet efficiency more than exceeded a decrease in fleet utilization that resulted from lower industry demand for hydraulic fracturing services.
Current report
Cost of Services
Current report
General and Administrative
Current report
General and administrative expenses were consistent between periods, decreasing $0.4 million, or 0.3%, to $110.7 million for the six months ended June 30, 2024 compared to $111.1 million for the six months ended June 30, 2023.
Current report
Transaction and Other Costs
Current report
Transaction and other costs decreased $1.6 million, or 100.0%, to $0.0 million for the six months ended June 30, 2024 compared to $1.6 million for the six months ended June 30, 2023. The costs incurred during the six months ended June 30, 2023 primarily consisted of due diligence work for the Siren Acquisition. See Note 2—Significant Accounting Policies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for further details.
Current report
Depreciation, Depletion, and Amortization
Current report
The Company recognized a loss on disposal of assets of $0.1 million for the six months ended June 30, 2024 compared to a gain of $3.2 million for the six months ended June 30, 2023, primarily related to sales of used field equipment and light duty trucks in a strong used vehicle and equipment market. All disposals were in the normal course of business.
Current report
Other Expense, net
Current report
Other expense, net decreased by $6.4 million to $7.9 million for the six months ended June 30, 2024 compared to $14.4 million for the six months ended June 30, 2023. Other expense, net is comprised of unrealized gain on investments, net, interest expense, net, and interest income—related party. The Company recorded an unrealized gain on investments, net of $7.2 million related to two equity investments measured at fair value during the six months ended June 30, 2024, compared to $0 for the six months ended June 30, 2023. Interest expense, net increased $0.5 million as a result of the addition of finance lease liabilities, refer to “Liquidity and Capital Resources” below for further discussion of the Company’s finance leases. Additionally, interest income—related party decreased $0.2 million related to a note receivable agreement executed in December 2022, amended in August 2023, and fully collected in March 2024.
Current report
Income Tax Expense
Current report
Investing Activities. Net cash used in investing activities was $292.1 million for the six months ended June 30, 2024, compared to $356.3 million for the six months ended June 30, 2023. Cash used in investing activities was lower during the six months ended June 30, 2024, compared to the six months ended June 30, 2023 primarily due to the Siren Acquisition and modestly higher capital spending in the prior year period, partially offset by equity investments in the current year period. The Company purchased Siren Energy for $74.9 million in cash, net of cash received, during the six months ended June 30, 2023. Refer to Note 2—Significant Accounting Policies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for additional information related to the acquisition. Investments in equipment, including the new digiTechnologies SMsuite and capitalized maintenance of existing equipment decreased $11.3 million, from $292.3 million for the six months ended June 30, 2023 to $281.0 million for the six months ended June 30, 2024. Finally, during the three months ended June 30, 2024, the Company spent $16.1 million for equity investments in Tamboran Resources Corporation, Empire Energy Group Ltd., and Falcon Oil & Gas Ltd.
Removed paragraphs (5)
Previous report
Frac industry dynamics remain constructive, as relatively steady demand in recent months has focused service companies on disciplined pricing and quality of service. Global oil and gas commodity prices have diverged and moved materially in recent months. Yet these changes have not materially impacted demand for North American frac services. Oil prices rallied since early in the year, owing to an improved global economic outlook, ongoing OPEC+ voluntary production cuts, and rising geopolitical tensions. Natural gas prices have conversely declined considerably since last fall, primarily owing to strong production and mild winter weather driving high natural gas inventories. Natural gas price pressures are expected to strengthen int he future with increasing LNG exports and surging domestic power demand in years ahead. Global energy demand continues to march higher, supporting what we believe will be a strong North American oil and gas industry in the coming years.
Previous report
General and administrative expenses was consistent with the prior year quarter, decreasing 0.1%, to$53.0 million for the three months ended March 31, 2024 compared to $53.0 million for the three months ended March 31, 2023, primarily related to lower performance related compensation expense offset by higher corporate technology and other costs.
Previous report
Transaction, Severance, and Other Costs
Previous report
(Gain) Loss on Disposal of Assets, net
Previous report
Investing Activities. Net cash used in investing activities was $142.0 million for the three months ended March 31, 2024, compared to $129.7 million for the three months ended March 31, 2023. Cash used in investing activities was higher during the three months ended March 31, 2024, compared to the three months ended March 31, 2023 as the Company continued to invest in equipment, including the new digiTechnologies™ suite, to support increased customer demand in next generation equipment and technology.
Reworded paragraphs (21)
Previous wording
During the first quarter of 2024, the posted WTI price traded at an average of $77.50 per barrel (“Bbl”), as compared to the first quarter of 2023 average of $75.93 per Bbl, and the fourth quarter of 2023 average of $78.53 per Bbl. Subsequent to March 31, 2024, the WTI price traded at an average of $86.41 per Bbl through April 15, 2024. In addition, the average domestic onshore rig count for the United States and Canada was 810 rigs reported in the first quarter of 2024, down from the first quarter of 2023 of 965, but up from the fourth quarter of 2023 of 781, according to a report from Baker Hughes.
Current wording
During the second quarter of 2024, the posted WTI price traded at an average of $81.81 per barrel (“Bbl”), as compared to the second quarter of 2023 average of $73.54 per Bbl, and the first quarter of 2024 average of $77.50 per Bbl. Subsequent to June 30, 2024, the WTI price traded at an average of $84.41 per Bbl through July 8, 2024. In addition, the average domestic onshore rig count for the United States and Canada was 716 rigs reported in the second quarter of 2024, down from the second quarter of 2023 of 815, and the first quarter of 2024 of 810, according to a report from Baker Hughes.
Previous wording
Our revenue decreased$189.0 million, or 15.0%, to$1.1 billion for the three months ended March 31, 2024 compared to $1.3 billion for the three months ended March 31, 2023. The decrease in revenue was primarily attributable to an activity-driven decrease in fleet utilization commensurate with lower demand for hydraulic fracturing services, a decrease in materials pricing, and slightly lower service prices.
Current wording
Our revenue decreased$35.1 million, or 2.9%, to$1.2 billion for the three months ended June 30, 2024 compared to $1.2 billion for the three months ended June 30, 2023. The decrease in revenue was attributable to a decrease in materials pricing and slightly lower services prices, partially offset by higher activity levels. The impact of increased fleet efficiency more than exceeded a decrease in fleet utilization that resulted from lower industry demand for hydraulic fracturing services.
Previous wording
Transaction, severance, and other costs decreased$0.6 million to$0.0 million for the three months ended March 31, 2024 compared to $0.6 million for the three months ended March 31, 2023. The costs incurred in the three months ended March 31, 2023 consisted of due diligence work for the Siren Acquisition. See Note 2—Significant Accounting Policies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for further details.
Current wording
Transaction and other costs decreased $1.0 million, or 100.0%, to$0 million for the three months ended June 30, 2024 compared to$1.0 million for the three months ended June 30, 2023. The costs incurred during the three months ended June 30, 2023 primarily consisted of due diligence work for the Siren Acquisition. See Note 2—Significant Accounting Policies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for further details.
Previous wording
Depreciation, depletion, and amortization expense increased $28.8 million, or 30.5%, to $123.2 million for the three months ended March 31, 2024 compared to $94.4 million for the three months ended March 31, 2023. The increase in 2024 was due to additional equipment placed in service since the prior year quarter, including equipment related to the deployment of our digiTechnologies SM.
Current wording
Depreciation, depletion, and amortization expense increased$23.6 million, or 23.7%, to$123.3 million for the three months ended June 30, 2024 compared to $99.7 million for the three months ended June 30, 2023. The increase during the three months ended June 30, 2024 was due to additional equipment placed in service since the prior year quarter, including equipment related to the deployment of our digiTechnologies SM.
Previous wording
The Company recorded a gain on disposal of assets of $1.2 million for the three months ended March 31, 2024 compared to a loss on disposal of assets of $0.5 million for the three months ended March 31, 2023. The gain as of March 31, 2024 was primarily related to the scrapping of fully depreciated equipment. The loss as of March 31, 2023 was a result of the Company regularly selling equipment that is no longer in use as part of normal course fleet and equipment management.
Current wording
Loss (gain) on Disposal of Assets
Previous wording
Other expense, net decreased by $0.8 million, or 10.5%, to $7.1 million for the three months ended March 31, 2024 compared to $7.9 million for the three months ended March 31, 2023. Other expense, net is comprised of interest income—related party and interest expense, net. Interest income—related party increased $0.1 million related to a note receivable agreement executed in December 2022, amended in August 2023, and fully collected in March 2024. Additionally, interest expense, net decreased $0.7 million as a result of decreased average borrowings partially offset by higher interest rates under the credit facility during the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
Current wording
Other expense, net decreased by $5.6 million, or 86.7%, to $0.9 million for the three months ended June 30, 2024 compared to $6.5 million for the three months ended June 30, 2023. Other expense, net is comprised of unrealized gain on investments, net, interest expense, net, and interest income—related party. The Company recorded an unrealized gain on investments, net of $7.2 million related to two equity investments measured at fair value during the three months ended June 30, 2024, compared to $0 for the three months ended June 30, 2023. Interest expense, net increased $1.2 million as a result of the addition of finance lease liabilities, refer to “Liquidity and Capital Resources” below for further discussion of the Company’s finance leases. Additionally, interest income—related party decreased $0.4 million related to a note receivable agreement executed in December 2022, amended in August 2023, and fully collected in March 2024.
Previous wording
The Company recognized income tax expense of $26.5 million for the three months ended March 31, 2024, an effective rate of 24.4%, compared to $54.5 million for the three months ended March 31, 2023, an effective rate of 25.1%. The decrease in income tax expense is primarily attributable to the decrease in net income before income taxes, as discussed above.
Current wording
The Company recognized income tax expense of $32.6 million for the three months ended June 30, 2024, an effective rate of 23.1%, compared to $47.3 million for the three months ended June 30, 2023, an effective rate of 23.7%. The decrease in income tax expense was primarily attributable to the decrease in net income before income taxes.
Previous wording
Cost of services (excluding depreciation, depletion, and amortization) decreased$105.7 million, or 11.9%, to$782.7 million for the three months ended March 31, 2024 compared to $888.4 million for the three months ended March 31, 2023. The decrease in expense was primarily related to decreases in materials and lower fleet utilization during the period ended March 31, 2024.
Current wording
Cost of services (excluding depreciation, depletion, and amortization) decreased $103.4 million, or 6.0%, to $1.6 billion for the six months ended June 30, 2024 compared to $1.7 billion for the six months ended June 30, 2023. The decrease in expense was primarily related to decreases in materials pricing and lower fleet utilization, partially offset by higher activity levels during the six months ended June 30, 2024.
Previous wording
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 gain or loss on remeasurement of liability under our tax receivable agreements, the gain or loss on investments, and other non-recurring expenses that management does not consider in assessing ongoing performance.
Current wording
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, gain or loss on the disposal of assets, bad debt reserves, transaction and other costs, the gain or loss on remeasurement of liability under our tax receivable agreements, the gain or loss on investments, net, and other non-recurring expenses that management does not consider in assessing ongoing performance.
Previous wording
Three Months Ended March 31, 2024, Compared to Three Months Ended March 31, 2023: EBITDA and Adjusted EBITDA
Current wording
Three and Six Months Ended June 30, 2024, Compared to Three and Six Months Ended June 30, 2023: EBITDA and Adjusted EBITDA
Previous wording
EBITDA was$238.6 million for the three months ended March 31, 2024 compared to $319.5 million for the three months ended March 31, 2023. Adjusted EBITDA was$244.8 million for the three months ended March 31, 2024 compared to $329.9 million for the three months ended March 31, 2023. The decreases in EBITDA and Adjusted EBITDA primarily resulted from modestly lower pricing and decreased activity levels as described above under the captions Revenue, Cost of Services, and General and Administrative for the Three Months Ended March 31, 2024, Compared to the Three Months Ended March 31, 2023.
Current wording
EBITDA was$272.3 million for the three months ended June 30, 2024 compared to $306.2 million for the three months ended June 30, 2023. Adjusted EBITDA was$273.3 million for the three months ended June 30, 2024 compared to $311.5 million for the three months ended June 30, 2023. The decreases in EBITDA and Adjusted EBITDA primarily resulted from modestly lower pricing and changes in activity levels as described above under the captions Revenue, Cost of Services, and General and Administrative for the Three Months Ended June 30, 2024, Compared to the Three Months Ended June 30, 2023.
Previous wording
Cash and cash equivalents decreased by $13.0 million to $23.8 million as of March 31, 2024 compared to $36.8 million as of December 31, 2023, while working capital excluding cash and current liabilities under debt and lease arrangements increased $20.4 million.
Current wording
Cash and cash equivalents decreased by $6.8 million to $30.0 million as of June 30, 2024 compared to $36.8 million as of December 31, 2023, while working capital excluding cash and current liabilities under lease arrangements decreased $32.0 million.
Previous wording
As of March 31, 2024, the Company had one credit agreement outstanding, a revolving line of credit up to $525.0 million (the “ABL Facility”). The ABL Facility is subject to certain borrowing base limitations based on a percentage of eligible accounts receivable and inventory available to finance working capital needs. As of March 31, 2024, the borrowing base was calculated to be $465.1 million, and the Company had $166.0 million outstanding, in addition to a letter of credit in the amount of $7.4 million, with $291.7 million of remaining availability.
Current wording
As of June 30, 2024, the Company had one credit agreement outstanding, a revolving line of credit up to $525.0 million (the “ABL Facility”). The ABL Facility is subject to certain borrowing base limitations based on a percentage of eligible accounts receivable and inventory available to finance working capital needs. As of June 30, 2024, the borrowing base was calculated to be $395.6 million, and the Company had $147.0 million outstanding, in addition to a letter of credit in the amount of $7.4 million, with $241.2 million of remaining availability.
Previous wording
Under our share repurchase program, the Company is authorized to repurchase up to $750.0 million of outstanding Class A Common Stock through July 31, 2026. Shares may be repurchased from time to time for cash in the open market transactions, through block trades, in privately negotiated transactions, through derivative transactions or by other means in accordance with applicable federal securities laws. The timing and the amount of repurchases will be determined by the Company at its discretion based on an evaluation of market conditions, capital allocation alternatives and other factors. The share repurchase program does not require us to purchase any dollar amount or number of shares of our Class A Common Stock and may be modified, suspended, extended or terminated at any time without prior notice. The Company expects to fund any repurchases by using cash on hand, borrowings under its revolving credit facility, and expected free cash flow to be generated through the duration of the share repurchase program. During the three months ended March 31, 2024, the Company repurchased and retired shares of Class A Common Stock for $30.2 million, under the share repurchase program.
Current wording
Under our share repurchase program, the Company is authorized to repurchase up to $750.0 million of outstanding Class A Common Stock through and including July 31, 2026. Shares may be repurchased from time to time for cash in the open market transactions, through block trades, in privately negotiated transactions, through derivative transactions or by other means in accordance with applicable federal securities laws. The timing and the amount of repurchases will be determined by the Company at its discretion based on an evaluation of market conditions, capital allocation alternatives and other factors. The share repurchase program does not require us to purchase any dollar amount or number of shares of our Class A Common Stock and may be modified, suspended, extended or terminated at any time without prior notice. The Company expects to fund any repurchases by using cash on hand, borrowings under its revolving credit facility, and expected free cash flow to be generated through the duration of the share repurchase program. During the three and six months ended June 30, 2024, the Company repurchased and retired shares of Class A Common Stock for $29.6 million and $59.7 million, respectively, under the share repurchase program.
Previous wording
Analysis of Cash Flow Changes Between the Three Months Ended March 31, 2024 and March 31, 2023
Current wording
Analysis of Cash Flow Changes Between the Six Months Ended June 30, 2024 and 2023
Previous wording
Operating Activities. Net cash provided by operating activities was $159.4 million for the three months ended March 31, 2024, compared to $203.9 million for the three months ended March 31, 2023. The $44.5 million decrease in cash from operating activities is primarily attributable to a $189.0 million decrease in revenues, offset by a $133.7 million decrease in cash operating expenses, interest expense, net, and income tax, and a $52.0 million decrease in cash from changes in working capital for the three months ended March 31, 2024, compared to a $62.7 million decrease in cash from changes in working capital for the three months ended March 31, 2023.
Current wording
Operating Activities. Net cash provided by operating activities was$407.6 million for the six months ended June 30, 2024, compared to $444.4 million for the six months ended June 30, 2023. The $36.8 million decrease in cash from operating activities is primarily attributable to a$224.1 million decrease in revenues, offset by a $145.5 million decrease in cash operating expenses, interest expense, net, and income tax, and a$37.6 million decreasein cash from changes in working capital for the six months ended June 30, 2024, compared to a $79.4 million decrease in cash from changes in working capital for thesix months ended June 30, 2023.
Previous wording
Financing Activities. Net cash used in financing activities was $30.2 million for the three months ended March 31, 2024, compared to net cash used in financing activities of $97.1 million for the three months ended March 31, 2023. The $66.9 million decrease in cash used in financing activities was primarily due to a $35.7 million increase in net proceeds from borrowings and $44.5 million less cash used for share repurchases for the three months ended March 31, 2024, partially offset by a $7.1 million increase in cash paid for finance leases and a $5.2 million increase in cash used for payments pursuant to tax receivable agreements.
Current wording
Financing Activities. Net cash used in financing activities was $122.0 million for the six months ended June 30, 2024, compared to net cash used in financing activities of $100.2 million for the six months ended June 30, 2023. The $21.8 million increase in cash used in financing activities was primarily due to a $15.4 million increase in cash paid for finance leases, $10.4 million increase in cash tax withholding on restricted stock unit vestings, and a $6.3 million increase in dividends paid, combined with a $61.3 million decrease in net proceeds from borrowings, offset by a $75.0 million decrease in share repurchases for the six months ended June 30, 2024, compared to the six months ended June 30, 2023.
Previous wording
Our material cash commitments consist primarily of obligations under long-term debt on the ABL Facility, TRAs, finance and operating leases for property and equipment, cash used to pay for repurchases of, and dividends on, shares of our Class A Common Stock, and purchase obligations as part of normal operations. Certain amounts included in our contractual obligations as of March 31, 2024 are based on our estimates and assumptions about these obligations, including pricing, volumes, and duration. We have no material off balance sheet arrangements as of March 31, 2024, except for purchase commitments of $84.5 million payable within 2024 and $13.0 million payable thereafter. See Note 14—Commitments & Contingencies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for information regarding scheduled contractual obligations. During the three months ended March 31, 2024, the Company expanded its equipment lease facility with two lessors resulting in an increase in finance lease obligations of $30.1 million. The term on these new leases range from three to five years.
Current wording
Our material cash commitments consist primarily of obligations under long-term debt on the ABL Facility, TRAs, finance and operating leases for property and equipment, cash used to pay for repurchases of, and dividends on, shares of our Class A Common Stock, and purchase obligations as part of normal operations. Certain amounts included in our contractual obligations as of June 30, 2024 are based on our estimates and assumptions about these obligations, including pricing, volumes, and duration. We have no material off balance sheet arrangements as of June 30, 2024, except for purchase commitments under supply agreements of $60.4 million payable within 2024, and $13.0 million payable thereafter. See Note 14—Commitments & Contingencies to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for information regarding scheduled contractual obligations. During the three and six months ended June 30, 2024, the Company expanded its equipment lease facilities resulting in an increase in finance lease obligations of $51.4 million and $81.5 million, respectively. The term on these new leases range from three to five years.
Previous wording
There have been no material changes to cash requirements since the year ended December 31, 2023.
Current wording
There have been no other material changes to cash requirements since the year ended December 31, 2023.
Previous wording
The effective global income tax rate applicable to the Company for the three months ended March 31, 2024 was 24.4%, compared to 25.1% for the period ended March 31, 2023. The Company’s effective tax rate is greater than the statutory federal income tax rate of 21.0% due to the Company’s Canadian operations, state income taxes in the states the Company operates, as well as nondeductible executive compensation. The Company recognized an income tax expense of $26.5 million and$54.5 million during the three months ended March 31, 2024 and 2023, respectively.
Current wording
The effective global income tax rate applicable to the Company for the six months ended June 30, 2024 was 23.7% compared to 24.4%, for the period ended June 30, 2023. The Company’s effective tax rate is greater than the statutory federal income tax rate of 21.0% due to the Company’s Canadian operations, state income taxes in the states the Company operates, as well as nondeductible executive compensation. The Company recognized an income tax expense of $32.6 million and $59.0 million during the three and six months ended June 30, 2024, respectively, and $47.3 million and $101.8 million for the three and six months ended June 30, 2023, respectively.
Previous wording
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. As of March 31, 2024, the Company’s net deferred tax liabilities were $102.3 million. The Company has not recorded a valuation allowance against the deferred tax assets for the three months ended March 31, 2024
Current wording
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. As of June 30, 2024 and December 31, 2023, the Company’s net deferred tax liabilities were $102.3 million.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Depreciation, depletion, and amortization expense increased $52.4 million, or 27.0%, to $246.5 million for the six months ended June 30, 2024 compared to $194.1 million for the six months ended June 30, 2023. The increase in 2024 was due to additional equipment placed in service since the prior year period, including equipment related to the deployment of our digiTechnologies SM.
Current report — wording carried from elsewhere
Loss (gain) on disposal of assets
Current report — wording carried from elsewhere
The Company recognized income tax expense of $59.0 million for the six months ended June 30, 2024, an effective rate of 23.7%, compared to $101.8 million for the six months ended June 30, 2023, an effective rate of 24.4%. The decrease in income tax expense was primarily attributable to the decrease in net income before income taxes.
Current report — wording carried from elsewhere
EBITDA was $511.0 million for the six months ended June 30, 2024 compared to $625.7 million for the six months ended June 30, 2023. Adjusted EBITDA was $518.0 million for the six months ended June 30, 2024 compared to $641.3 million for the six months ended June 30, 2023. The decreases in EBITDA and Adjusted EBITDA primarily resulted from modestly lower pricing and changes in activity levels as described above under the captions Revenue, Cost of Services, and General and Administrative for the Six Months Ended June 30, 2024, Compared to the Six Months Ended June 30, 2023.