Liberty Energy Inc.

Previous wording

We also own and operate LPI, providing advanced distributed power and energy storage solutions, serving the commercial and industrial, data center, energy and mining industries. LPI was formed with the initial focus on supporting Liberty’s transition towards our next generation digiFleets℠ and dual fuel fleets, by providing consistent and reliable power generation solutions and natural gas fueling services, which are critical to maintaining highly efficient well site operations. In January 2025, we announced LPI’s expansion into the distributed power business. On March 3, 2025, we completed the acquisition of IMG Energy Solutions (“the IMG Acquisition”), a leading developer of distributed power systems, for cash consideration of approximately $19.6 million, subject to normal closing adjustments and net of cash received. The IMG Acquisition augmented our portfolio with advanced engineering, design, and development capabilities for the development of power systems, enhanced software control systems, power marketing and utility interconnection experience, and operations and maintenance experience. During 2025, LPI was primarily focused on the planning and development of our power service platform to pursue projects supporting the power demand created by new data center development and other commercial and industrial applications. LPI is in the process of expanding market awareness of its integrated power and fuel solutions offering, developing engineered solutions, and ordering equipment and long-lead time items for these expected projects. LPI also expanded its natural gas fueling services to support larger scale distributed power installations.

Current wording

We also own and operate LPI, providing advanced distributed power and energy storage solutions, serving the commercial and industrial, data center, energy and mining industries. LPI was formed with the initial focus on supporting Liberty’s transition towards our next generation digiFleets℠ and dual fuel fleets, by providing consistent and reliable power generation solutions and natural gas fueling services, which are critical to maintaining highly efficient well site operations. In January 2025, we announced LPI’s expansion into the distributed power business. On March 3, 2025, we completed the acquisition of IMG Energy Solutions (“the IMG Acquisition”), a leading developer of distributed power systems, for cash consideration of approximately $19.6 million, subject to normal closing adjustments and net of cash received. The IMG Acquisition augmented our portfolio with advanced engineering, design, and development capabilities for the development of power systems, enhanced software control systems, power marketing and utility interconnection experience, and operations and maintenance experience. During 2025, LPI was primarily focused on the planning and development of our power service platform to pursue projects supporting the power demand created by new data center development and other commercial and industrial applications. LPI is actively marketing its integrated power and fuel solutions offering, developing engineered solutions, and, as described in further detail below under "Liquidity and Capital Resources, ordering equipment and long-lead time items for these expected projects. LPI also expanded its natural gas fueling services to support larger scale distributed power installations.

Previous wording

LPI’s technology platform for distributed power generation includes (a) the Forte SM solution, which uses a modular, standardized construction approach for generation sites to reduce the risk of project execution, (b) the Tempo SM power quality management system to manage high-amplitude, cyclical load variations associated with artificial intelligence workloads and (c) when a grid interconnection is requested by the customer and available, the Chorus SM solution to optimize power costs through the use of a mix of co-located generation and grid power.

Current wording

LPI’s technology platform for distributed power generation includes (a) the Forte SM solution, which uses a modular, standardized construction approach for generation sites to reduce the risk of project execution, (b) the Tempo SM power quality management system to manage high-amplitude, cyclical load variations associated with artificial intelligence workloads and (c)

Previous wording

During the first quarter of 2026, the posted WTI price traded at an average of $72.74 per barrel (“Bbl”), as compared to the first quarter 2025 average of $71.78 per Bbl, and the fourth quarter of 2025 average of $59.62 per Bbl. In addition, during the first quarter of 2026, the Henry Hub price traded at an average of $4.71 per one million British thermal units (“MMBtu”), as compared to the first quarter of 2025 average of $4.14 per MMBtu, and the fourth quarter of 2025 average of $3.71 per MMBtu. Subsequent to March 31, 2026, the Henry Hub traded at an average of $2.83 per MMBtu and the WTI price traded at an average of $99.85 per Bbl through April 20, 2026. The average domestic onshore rig count for the United States and Canada was 741 rigs reported in the first quarter of 2026, down from the average in the first quarter 2025 of 788, and up from the fourth quarter of 2025 of 709, according to a report from Baker Hughes.

Current wording

During the second quarter of 2026, the posted WTI price traded at an average of $95.65 per barrel (“Bbl”), as compared to the second quarter 2025 average of $64.57 per Bbl, and the first quarter of 2026 average of $72.74 per Bbl. In addition, during the second quarter of 2026, the Henry Hub price traded at an average of $2.95 per one million British thermal units (“MMBtu”), as compared to the second quarter of 2025 average of $3.19 per MMBtu, and the first quarter of 2026 average of $4.71 per MMBtu. Subsequent to June 30, 2026, the Henry Hub traded at an average of $2.99 per MMBtu and the WTI price traded at an average of $76.07 per Bbl through July 20, 2026. The average domestic onshore rig count for the United States and Canada was 688 rigs reported in the second quarter of 2026, up from the average in the second quarter 2025 of 686, and down from the first quarter of 2025 of 741, according to a report from Baker Hughes.

Previous wording

Our revenue increased$43.7 million, or 4%, to$1.0 billion for the three months ended March 31, 2026 compared to $1.0 billion for the three months ended March 31, 2025. The increase in revenue was primarily driven by higher activity levels and improved utilization, partially offset by pricing declines in line with market conditions.

Current wording

Our revenue increased$146.1 million, or 14%, to$1.2 billion for the three months ended June 30, 2026 compared to $1.0 billion for the three months ended June 30, 2025. The increase in revenue was predominantly driven by elevated activity levels and corresponding improvement in utilization.

Previous wording

Cost of services (exclusive of depreciation, depletion, and amortization) increased$82.2 million, or 11%, to$843.8 million for the three months ended March 31, 2026 compared to $761.6 million for the three months ended March 31, 2025. The increase in expense was primarily related to increases in parts and material volumes and personnel costs commensurate with the increase in activity levels.

Current wording

Cost of services (exclusive of depreciation, depletion, and amortization) increased$168.1 million, or 21%, to$980.3 million for the three months ended June 30, 2026 compared to $812.1 million for the three months ended June 30, 2025. The increase in expense was primarily related to increases in parts and material volumes and personnel costs commensurate with the increase in activity levels.

Previous wording

Depreciation, depletion, and amortization expense decreased$13.7 million, or 11%, to$114.1 million for the three months ended March 31, 2026 compared to $127.7 million for the three months ended March 31, 2025. The decrease during the three months ended March 31, 2026 was primarily due to equipment reaching the end of its depreciable life, partially offset by an increase in finance leases.

Current wording

Depreciation, depletion, and amortization expense decreased$15.2 million, or 12%, to$114.2 million for the three months ended June 30, 2026 compared to $129.4 million for the three months ended June 30, 2025. The decrease during the three months ended June 30, 2026 was primarily due to equipment reaching the end of its depreciable life, partially offset by an increase in finance leases.

Previous wording

The Company recognized other income, net of $9.6 million for the three months ended March 31, 2026 compared to $9.7 million for the three months ended March 31, 2025. Other (income) expense, net is comprised of gain on investments, net of $17.3 million related to investments in equity securities measured at fair value for the three months ended March 31, 2026, compared to $19.3 million during the three months ended March 31, 2025. Additionally, interest expense, net decreased $1.8 million primarily as a result of the paydown of the Company’s balance on the Revolving Credit Facility in connection with the issuance of the 2031 Notes and 2032 Notes, refer to “Liquidity and Capital Resources” below for further discussion of the Company’s outstanding financing agreements.

Current wording

The Company recognized other income, net of $39.6 million for the three months ended June 30, 2026 compared to $58.1 million for the three months ended June 30, 2025. Other (income) expense, net is primarily comprised of gain on investments, net of $42.9 million related to investments in equity securities measured at fair value for the three months ended June 30, 2026, compared to $68.2 million during the three months ended June 30, 2025. Additionally, interest expense, net decreased $6.8 million primarily as a result of the paydown of the Company’s balance on the Revolving Credit Facility in connection with the issuance of the 2031 Notes and 2032 Notes. Refer to “Liquidity and Capital Resources” below for further discussion of the Company’s outstanding financing agreements.

Previous wording

The Company recognized income tax expense of $9.3 million for the three months ended March 31, 2026, an effective rate of 29.2%, compared to $7.8 million for the three months ended March 31, 2025, an effective rate of 28.0%. The increase in income tax expense was primarily attributable to the increase in net income before income taxes, as discussed above.

Current wording

The Company recognized income tax expense of $9.2 million for the three months ended June 30, 2026, an effective rate of 17.5%, compared to $24.1 million for the three months ended June 30, 2025, an effective rate of 25.0%. The decrease in income tax expense was attributable to the decrease in net income before income taxes as well as a decrease in the effective tax rate.

Previous wording

The Company recorded a gain on disposal of assets, net of $18.5 million for the three months ended March 31, 2026 compared to a $3.3 million loss for the three months ended March 31, 2025, as the Company disposed of used equipment that is no longer in use as part of normal course fleet and equipment management. Additionally, during the three months ended March 31, 2026, the Company received insurance proceeds related to losses recorded in prior periods.

Current wording

The Company recorded a gain on disposal of assets, net of $12.0 million for the six months ended June 30, 2026 compared to a $9.0 million loss for the six months ended June 30, 2025, as the Company disposed of used equipment that is no longer in use as part of normal course fleet and equipment management. Additionally, during the six months ended June 30, 2026, the Company received insurance proceeds related to losses recorded in prior periods.

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, gain or loss on the disposal of assets, net, 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.

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, net, 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 expenses that management does not consider in assessing ongoing performance.

Previous wording

Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025: EBITDA and Adjusted EBITDA

Current wording

Three and Six Months Ended June 30, 2026, Compared to Three and Six Months Ended June 30, 2025: EBITDA and Adjusted EBITDA

Previous wording

EBITDA was$153.7 million for the three months ended March 31, 2026 compared to $165.2 million for the three months ended March 31, 2025. Adjusted EBITDA was$125.9 million for the three months ended March 31, 2026 compared to $168.2 million for the three months ended March 31, 2025. The decreases in EBITDA and Adjusted EBITDA primarily resulted from the increase in costs of services out pacing the increase in revenue due to increased materials pricing and personnel costs, offset by a decrease in general and administrative expenses for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Current wording

EBITDA was$169.8 million for the three months ended June 30, 2026 compared to $234.7 million for the three months ended June 30, 2025. Adjusted EBITDA was$151.1 million for the three months ended June 30, 2026 compared to $180.8 million for the three months ended June 30, 2025. The decreases in EBITDA and Adjusted EBITDA primarily result from a decrease in Net Income, which is resulting from the increase in costs of services out pacing the increase in revenue due to increased materials pricing and personnel costs for the three months ended June 30, 2026, compared to the three months ended June 30, 2025.

Previous wording

During the quarter ended March 31, 2026, we issued the 2031 Notes and the 2032 Notes for net proceeds of $746.0 million and $511.3 million, respectively, after deducting the initial purchasers’ discount and commissions and offering expenses paid by us. We also entered into privately negotiated capped call transactions with respect to each of the 2031 Notes and the 2032 Notes with certain of the initial purchasers or their respective affiliates and certain other financial institutions at a cost of approximately $109.3 million and $77.2 million, respectively. Refer to Note 7— Debt to the accompanying unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for additional information related to the 2031 Notes and the 2032 Notes.

Current wording

During the six months ended June 30, 2026, we issued the 2031 Notes and the 2032 Notes for net proceeds of $746.0 million and $511.3 million, respectively, after deducting the initial purchasers’ discount and commissions and offering expenses paid by us. We also entered into privately negotiated capped call transactions with respect to each of the 2031 Notes and the 2032 Notes with certain of the initial purchasers or their respective affiliates and certain other financial institutions at a cost of approximately $109.3 million and $77.2 million, respectively. Refer to Note 7— Debt to the accompanying unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for additional information related to the 2031 Notes and the 2032 Notes.

Previous wording

We plan to raise funds, and may incur additional debt, through project specific financing including non-recourse debt, and co-investments or equity to support the expansion of our distributed power business. Our primary uses of capital have been capital expenditures to support growth, both organic and through acquisitions, and funding ongoing operations, including maintenance and fleet upgrades, as well as the repurchases of, and dividends on, shares of our Class A Common Stock (the “Class A Common Stock”).

Current wording

We plan to raise funds, and may incur additional debt, through project specific financing including non-recourse debt, and co-investments or equity to support the expansion of our distributed power business. Our primary uses of capital have been capital expenditures to support growth for our completions business, both organic and through acquisitions, and funding ongoing operations, including purchasing long-lead time equipment for our distributed power solutions business, and maintenance and fleet upgrades, as well as the repurchases of, and dividends on, shares of our Class A Common Stock (the “Class A Common Stock”).

Previous wording

Cash and cash equivalents increased by $671.6 million to $699.1 million as of March 31, 2026 compared to $27.6 million as of December 31, 2025, while working capital excluding cash and current liabilities under debt and lease arrangements increased $87.4 million.

Current wording

Cash and cash equivalents increased by $527.8 million to $555.4 million as of June 30, 2026 compared to $27.6 million as of December 31, 2025, while working capital excluding cash and current liabilities under debt and lease arrangements increased $85.4 million.

Previous wording

As of March 31, 2026, the Company was party to the Credit Agreement, which provides for a revolving line of credit up to $750.0 million. The Credit Agreement is subject to certain borrowing base limitations based on a percentage of eligible accounts receivable, inventory and certain power generating assets available to finance working capital needs. The Company used a portion of the net proceeds from the offering of the 2031 Notes to repay all indebtedness outstanding under the Revolving Credit Facility, excluding letters of credit. As of March 31, 2026, the borrowing base was calculated to be $508.9 million, and the Company had no amounts outstanding, excluding letters of credit in the amount of $19.4 million, with $489.5 million of remaining availability.

Current wording

As of June 30, 2026, the Company was party to the Credit Agreement, which provides for a revolving line of credit up to $750.0 million. The Credit Agreement is subject to certain borrowing base limitations based on a percentage of eligible accounts receivable, inventory and certain power generating assets available to finance working capital needs. In the first quarter of 2026 the Company used a portion of the net proceeds from the offering of the 2031 Notes to repay all indebtedness outstanding under the Revolving Credit Facility, excluding letters of credit. As of June 30, 2026, the borrowing base was calculated to be $467.7 million, and the Company had no amounts outstanding, excluding letters of credit in the amount of $19.4 million, with $448.3 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 and including July 31, 2026. Shares may be repurchased from time to time for cash in open market transactions, through block trades, in privately negotiated transactions, through derivative transactions, or by other means in accordance with applicable federal securities laws. The timing and the amount of repurchases will be determined by the Company at its discretion based on an evaluation of market conditions, capital allocation alternatives and other factors. The share repurchase program does not require us to purchase any dollar amount or number of shares of our Class A Common Stock and may be modified, suspended, extended, or terminated at any time without prior notice. The Company expects to fund any repurchases by using cash on hand, borrowings under the Revolving Credit Facility, and expected free cash flow to be generated through the duration of the share repurchase program. The Company did not repurchase or retire any shares of Class A Common Stock under the share repurchase program during the three months ended March 31, 2026. During the three months ended March 31, 2025, Company repurchased and retired shares of Class A Common Stock for $24.0 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 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 the Revolving Credit Facility, and expected free cash flow to be generated through the duration of the share repurchase program. The Company did not repurchase or retire any shares of Class A Common Stock under the share repurchase program during the three or six months ended June 30, 2026.

Previous wording

Analysis of Cash Flow Changes Between the Three Months Ended March 31, 2026 and 2025

Current wording

Analysis of Cash Flow Changes Between the Six Months Ended June 30, 2026 and 2025

Previous wording

Operating Activities. Net cash provided by operating activities was$8.4 million for the three months ended March 31, 2026, compared to $192.1 million for the three months ended March 31, 2025. The $183.7 million decrease in cash from operating activities is attributable to a$112.7 million decreasein cash from changes in working capital for the three months ended March 31, 2026, compared to a $39.8 million increase in cash from changes in working capital for thethree months ended March 31, 2025. Additionally cash from operating activities decreased due to a$74.9 million increase in cash operating expenses, interest expense, net, and income tax expense, offset by a$43.7 million increase in revenues.

Current wording

Operating Activities. Net cash provided by operating activities was $141.4 million for the six months ended June 30, 2026, compared to $362.7 million for the six months ended June 30, 2025. The $221.3 million decrease in cash from operating activities is attributable to a $119.6 million decrease in cash from changes in working capital for the six months ended June 30, 2026, compared to a $61.7 million increase in cash from changes in working capital for the six months ended June 30, 2025. Additionally cash from operating activities decreased due to a $229.8 million increase in cash operating expenses, interest expense, net, and income tax expense, offset by a $189.8 million increase in revenues.

Previous wording

Investing Activities. Net cash used in investing activities was $137.3 million for the three months ended March 31, 2026, compared to $106.2 million for the three months ended March 31, 2025. Cash used in investing activities was higher during the three months ended March 31, 2026, compared to the three months ended March 31, 2025 primarily due to a$23.1 million increase in new equipment purchases and capitalized maintenance of existing equipment and a decrease in the proceeds on sale of equity securities of $29.9 million. Additionally the increase in cash used in investing activities is due to the Tamboran shares purchased during the three months ended March 31, 2026 of $3.9 million, offset by the cash used for the acquisition of IMG Energy Solutions of $15.2 million in the three months ended March 31, 2025, as well as a increase of $10.5 million in cash proceeds from the sale of assets. Refer to Note 2—Significant Accounting Policiesto theunaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for additional information related to the IMG Acquisition.

Current wording

Investing Activities. Net cash used in investing activities was $364.6 million for the six months ended June 30, 2026, compared to $189.3 million for the six months ended June 30, 2025. Cash used in investing activities was higher during the six months ended June 30, 2026, compared to the six months ended June 30, 2025 primarily due to a $109.4 million increase in equipment purchases, capitalized maintenance, and capital deposits, a decrease in the proceeds on sale of equity securities of $80.8 million, and an increase of $9.7 million for shares purchased in Tamboran. These increases in cash used in investing activities were partially offset by a decrease from the acquisition of IMG Energy Solutions of $15.2 million in the six months ended June 30, 2025, and an increase of $9.4 million in cash proceeds from the sale of assets. 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 IMG Acquisition.

Previous wording

Financing Activities. Net cash provided by financing activities was $800.6 million for the three months ended March 31, 2026, compared to net cash used in financing activities of $81.8 million for the three months ended March 31, 2025. The $882.5 million increase in cash provided by financing activities was primarily due to an increase in net borrowing activities of $826.0 million which includes the initial cash received from the 2031 Notes and the 2032 Notes, purchase of capped calls, net borrowings under the Caterpillar Agreement, net borrowings and repayments on the Revolving Credit Facility, and payment of debt issuance costs. Additionally, there was a $24.0 million decrease in share repurchases, a $32.9 million decrease in cash paid under the TRA liability, and a $5.8 million decrease in tax withholdings for RSUs offset by a $4.7 million increase in cash paid for finance leases and a $1.4 million increase in dividends paid.

Current wording

Financing Activities. Net cash provided by financing activities was $752.0 million for the six months ended June 30, 2026, compared to net cash used in financing activities of $174.1 million for the six months ended June 30, 2025. The $926.1 million increase in cash provided by financing activities was primarily due to an increase in net borrowing activities of $887.7 million which includes the initial cash received from the 2031 Notes and the 2032 Notes, purchase of capped calls, net borrowings under the Caterpillar Agreement, net borrowings and repayments on the Revolving Credit Facility, and payment of debt issuance costs. Additionally, there was a $24.9 million decrease in share repurchases, a $32.9 million decrease in cash paid under the TRA liability, offset by a $1.8 million increase in tax withholdings for RSUs, a $14.2 million increase in cash paid for finance leases and a $3.4 million increase in dividends paid.

Previous wording

Our material uses of cash consist primarily of obligations under long-term debt including the 2032 Notes, 2031 Notes and the Revolving Credit 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 and our expansion into the distributed power business. During the quarter ended March 31, 2026, the Company issued $770.0 million aggregate principal amount and $525.0 million aggregate principal amount of the 2031 Notes and the 2032 Notes, respectively. See Note 7 —Debt to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report.

Current wording

Our material uses of cash consist primarily of obligations under long-term debt including the 2032 Notes, 2031 Notes and the Revolving Credit 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 and our expansion into the distributed power business. During the six months ended June 30, 2026, the Company issued $770.0 million aggregate principal amount and $525.0 million aggregate principal amount of the 2031 Notes and the 2032 Notes, respectively. See Note 7 —Debt to the unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report.

Previous wording

Certain amounts included in our contractual obligations as of March 31, 2026 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, 2026, except for purchase commitments for generation assets to support our distributed power business and under sand supply agreements of which $30.0 million is payable within 2026, and $0.0 million is 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 sand supply obligations.

Current wording

Certain amounts included in our contractual obligations as of June 30, 2026 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, 2026, except for purchase commitments for generation assets to support our distributed power business and under sand supply agreements of which $35.2 million is payable within 2026, and $0.0 million is payable thereafter.

Previous wording

The effective global income tax rate applicable to the Company for the three months ended March 31, 2026 was 29.2% compared to 28.0%, for the period ended March 31, 2025. The Company’s effective tax rate is greater than the statutory federal income tax rate of 21.0% due to state income taxes in the states the Company operates, nondeductible executive compensation, as well as GILTI inclusions from the Company’s foreign operations, partially offset by U.S. federal income tax credits. The Company recognized an income tax expense of $9.3 million and $7.8 million during the three months ended March 31, 2026, and 2025 respectively.

Current wording

The effective global income tax rate applicable to the Company for the six months ended June 30, 2026 was 21.9% compared to 26.0%, for the period ended June 30, 2025. The Company’s effective tax rate is greater than the statutory federal income tax rate of 21.0% due to state income taxes in the states the Company operates, nondeductible executive compensation, as well as GILTI inclusions from the Company’s foreign operations, partially offset by U.S. federal income tax credits. The Company recognized an income tax expense of $9.2 million and $18.5 million during the three and six months ended June 30, 2026, respectively. The Company recognized an income tax expense of $24.1 million and $31.9 million during the three and six months ended June 30, 2025, 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, 2026 and December 31, 2025, the Company’s net deferred tax liabilities were $162.9 million and $195.6 million, respectively.

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, 2026 and December 31, 2025, the Company’s net deferred tax liabilities were $170.2 million and $195.6 million, respectively.