10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

OR

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File No. 001-38081

Liberty Oilfield Services Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware	81-4891595
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
950 17th Street, Suite 2400 Denver, Colorado	80202
(Address of Principal Executive Offices)	(Zip Code)
(303) 515-2800 (Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☐

Emerging growth company ☐     (Do not check if a smaller reporting company)

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): ☐ Yes ☒ No

As of July 31, 2018 the registrant had 69,958,113 shares of Class A Common Stock and 48,207,372 shares of Class B Common Stock outstanding.

TABLE OF CONTENTS

		Page No.
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated and Combined Balance Sheets	1
	Condensed Consolidated and Combined Statements of Income	2
	Condensed Consolidated and Combined Statement of Changes in Stockholders’ and Members’ Equity	3
	Condensed Consolidated and Combined Statements of Cash Flows	4
	Notes to Condensed Consolidated and Combined Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosure about Market Risk	28
Item 4.	Controls and Procedures	28
PART II	OTHER INFORMATION	29
Item 1.	Legal Proceeding	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
SIGNATURES		31

i

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the “Quarterly Report”) and certain other communications made by us contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange of 1934, as amended (the “Exchange Act”), including statements about our growth, future operating results, estimates, beliefs and expected performance. For this purpose, any statement that is not a statement of historical fact should be considered a forward-looking statement. We may use the words “believe,” “anticipate,” “plan,” “expect,” “intend,” “may,” “will,” “should” and similar expressions to help identify forward-looking statements. We cannot assure you that our assumptions and expectations will prove to be correct. Important factors could cause our actual results to differ materially from those indicated or implied by forward-looking statements. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise and readers should not rely on the forward-looking statements as representing the Company’s views as of any date subsequent to the date of the filing of this Quarterly Report. These forward-looking statements are based on management’s current belief, based on currently available information, as to the outcome and timing of future events.

Forward-looking statements may include statements about:

• our business strategy;

• our operating cash flows, the availability of capital and our liquidity;

• our future revenue, income and operating performance;

• our ability to sustain and improve our utilization, revenue and margins;

• our ability to maintain acceptable pricing for our services;

• our future capital expenditures;

• our ability to finance equipment, working capital and capital expenditures;

• competition and government regulations;

• our ability to obtain permits and governmental approvals;

• pending legal or environmental matters;

• oil and natural gas prices;

• acquisitions;

• general economic conditions;

• credit markets;

• our ability to successfully develop our research and technology capabilities and implement technological developments and enhancements;

• uncertainty regarding our future operating results; and

• plans, objectives, expectations and intentions contained in this Quarterly Report that are not historical.

We caution you that these forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, decline in demand for our services, the cyclical nature and volatility of the oil and natural gas industry, a decline in, or substantial volatility of, crude oil and natural gas commodity prices, environmental risks, regulatory changes, the inability to comply with the financial and other covenants and metrics in our Credit Facilities (as defined herein), cash flow and access to capital, the timing of development expenditures and the other risks described under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2017 (the “Annual Report”).

All forward-looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.

ii

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

LIBERTY OILFIELD SERVICES INC.

Condensed Consolidated and Combined Balance Sheets

(Dollars in thousands, except share data)

	June 30, 2018		December 31, 2017
Assets	(unaudited)
Current assets:
Cash and cash equivalents	$	83,331	$	16,321
Accounts receivable—trade	221,464		195,961
Accounts receivable—related party	4,106		3,984
Unbilled revenue	118,280		58,784
Unbilled revenue—related party	—		59
Inventories	62,374		55,524
Prepaid and other current assets	29,237		21,396
Total current assets	518,792		352,029
Property and equipment, net	561,014		494,776
Other assets	11,751		5,298
Total assets	$	1,091,557	$	852,103
Liabilities and Equity
Current liabilities:
Accounts payable	$	93,288	$	66,846
Accrued liabilities:
Accrued vendor invoices	64,575		78,646
Operational accruals	13,276		32,208
Accrued salaries and benefits	22,326		24,990
Deferred revenue	3,844		9,231
Accrued interest and other	8,013		6,573
Accrued liabilities—related party	—		2,000
Current portion of long-term debt, net of discount of $1,375 and $1,739, respectively	375		11
Total current liabilities	205,697		220,505
Long-term debt, net of discount of $4,448 and $6,466, respectively, less current portion	106,830		196,346
Deferred tax liability	37,243		—
Payable pursuant to tax receivable agreement	2,291		—
Total liabilities	352,061		416,851
Commitments & contingencies (Note 12)
Redeemable common units	—		42,486
Members’ equity:
Members’ equity	—		392,766
Stockholders’ equity:
Preferred Stock, $0.01 par value, 10,000 shares authorized and none issued and outstanding	—		—
Common Stock:
Class A, $0.01 par value, 400,000,000 shares authorized and 69,958,113 issued and outstanding as of June 30, 2018 and none issued and outstanding as of December 31, 2017	700		—
Class B, $0.01 par value, 400,000,000 shares authorized and 48,207,372 issued and outstanding as of June 30, 2018 and none issued and outstanding as of December 31, 2017	482		—
Additional paid in capital	349,488		—
Retained earnings	73,270		—
Total stockholders’ equity	423,940		—
Noncontrolling interest	315,556		—
Total equity	739,496		392,766
Total liabilities and equity	$	1,091,557	$	852,103

See Notes to Condensed Consolidated and Combined Financial Statements.

1

LIBERTY OILFIELD SERVICES INC.

Condensed Consolidated and Combined Statements of Income

(In thousands, except per share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Revenue:
Revenue	$	628,084		$	334,740		$	1,119,182		$	583,958
Revenue—related parties	—			11,985			4,062			15,161
Total revenue	628,084			346,725			1,123,244			599,119
Operating costs and expenses:
Cost of services (exclusive of depreciation and amortization shown separately below)	455,469			267,626			832,296			479,259
General and administrative	27,313			20,022			48,990			37,106
Depreciation and amortization	30,606			17,521			58,622			31,667
Loss (gain) on disposal of assets	485			10			565			(33		)
Total operating costs and expenses	513,873			305,179			940,473			547,999
Operating income	114,211			41,546			182,771			51,120
Other expense:
Interest expense	(3,540		)	(1,750		)	(10,034		)	(3,202		)
Interest expense related party	—			(761		)	—			(761		)
Total interest expense	(3,540		)	(2,511		)	(10,034		)	(3,963		)
Net income before income taxes	110,671			39,035			172,737			47,157
Income tax expense	15,930			—			24,009			—
Net income	94,741			39,035			148,728			47,157
Less: Net income attributable to Predecessor, prior to Corporate Reorganization	—			39,035			8,705			47,157
Less: Net income attributable to noncontrolling interests	45,146			—			66,753			—
Net income attributable to Liberty Oilfield Services Inc. stockholders	$	49,595		$	—		$	73,270		$	—
Net income attributable to Liberty Oilfield Services Inc. stockholders per common share:
Basic	$	0.72					$	1.06
Diluted	$	0.71					$	1.05
Weighted average common shares outstanding:
Basic	69,020						68,977
Diluted	118,638						118,407

See Notes to Condensed Consolidated and Combined Financial Statements.

2

LIBERTY OILFIELD SERVICES INC.

Condensed Consolidated and Combined Statement of Changes in Equity

(Amounts in thousands)

(Unaudited)

	Members’ Equity			Shares of Class A Common Stock		Shares of Class B Common Stock	Class A Common Stock, Par Value			Class B Common Stock, Par Value		Additional Paid in Capital			Retained Earnings		Total Stockholders’ equity			Noncontrolling Interest			Total Equity
Balance—December 31, 2017	$	392,766		—		—	—			—		—			—		—			—			$	392,766
Return on redeemable common units	(149		)	—		—	—			—		—			—		—			—			(149		)
Net income prior to Corporate Reorganization	8,705			—		—	—			—		—			—		—			—			8,705
Balance prior to Corporate Reorganization	$	401,322		—		—	$	—		$	—	$	—		$	—	$	—		$	—		$	401,322
Corporate Reorganization
Exchange of Liberty LLC Units for Class A Common Stock and Class B Common Stock and extinguishment of Redeemable Common Units	(401,322		)	55,986		48,207	560			482		446,824			—		447,866			—			46,544
Net deferred tax liability due to corporate reorganization	—			—		—	—			—		(28,620		)	—		(28,620		)	—			(28,620		)
Initial Public Offering
Issuance of Class A Common Stock, net of underwriter discount and offering costs	—			14,340		—	143			—		220,117			—		220,260			—			220,260
Redemption of Legacy Ownership, net of underwriter discount	—			(1,609	)	—	(16		)	—		(25,881		)	—		(25,897		)	—			(25,897		)
Issuance of restricted stock	—			1,258		—	13			—		(13		)	—		—			—			—
Liability due to tax receivable agreement	—			—		—	—			—		(2,291		)	—		(2,291		)	—			(2,291		)
Initial allocation of noncontrolling interest of Liberty LLC effective on the date of the IPO	—			—		—	—			—		(261,844		)	—		(261,844		)	261,844			—
Distributions paid to noncontrolling interest unitholders	—			—		—	—			—		—			—		—			(13,041		)	(13,041		)
Restricted stock forfeited	—			(17	)	—	—			—		—			—		—			—			—
Stock based compensation expense	—			—		—	—			—		1,196			—		1,196			—			1,196
Net income subsequent to the Corporate Reorganization and IPO	—			—		—	—			—		—			73,270		73,270			66,753			140,023
Balance—June 30, 2018	$	—		69,958		48,207	$	700		$	482	$	349,488		$	73,270	$	423,940		$	315,556		$	739,496

See Notes to Condensed Consolidated and Combined Financial Statements.

3

LIBERTY OILFIELD SERVICES INC.

Condensed Consolidated and Combined Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

	Six Months Ended June 30,
	2018			2017
Cash flows from operating activities:
Net income	$	148,728		$	47,157
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	58,622			31,667
Loss (gain) on disposal of assets	565			(33		)
Amortization of debt issuance costs	2,868			280
Inventory write-down	3,389			259
Stock based compensation expense	1,196			—
Deferred tax expense	8,447			—
Changes in operating assets and liabilities:
Accounts receivable	(25,503		)	(84,500		)
Accounts receivable—related party	(122		)	(2,216		)
Unbilled revenue	(59,496		)	(23,543		)
Unbilled revenue—related party	59			2,487
Inventories	(10,239		)	(10,891		)
Prepaid and other current assets	(24,088		)	(11,984		)
Accounts payable and accrued liabilities	4,775			95,834
Accounts payable and accrued liabilities—related party	—			1,044
Net cash provided by operating activities	109,201			45,561
Cash flows from investing activities:
Capital expenditures	(140,861		)	(205,151		)
Proceeds from disposal of assets	3,018			264
Net cash used in investing activities	(137,843		)	(204,887		)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of underwriter discount	230,174			—
Redemption of LLC Units from Legacy Owners	(25,897		)	—
Repayments of borrowings on term loan	(61,535		)	(6,000		)
Proceeds from borrowings on line-of-credit	—			56,000
Repayments of borrowings on line-of-credit	(30,000		)	—
Proceeds from Liberty Oilfield Services Holdings LLC	2,115			—
Proceeds from related party bridge loans	—			60,000
Payments on capital lease obligations	—			(119		)
Payments of debt issuance costs	(282		)	(1,224		)
Proceeds from issuance of redeemable common units	—			39,794
Distributions paid to noncontrolling interest unitholders	(13,041		)	—
Payment of deferred equity offering costs	(5,882		)	—
Net cash provided by financing activities	95,652			148,451
Net increase (decrease) in cash and cash equivalents	67,010			(10,875		)
Cash and cash equivalents—beginning of period	16,321			11,484
Cash and cash equivalents—end of period	$	83,331		$	609
Supplemental disclosure of cash flow information:
Cash paid for income taxes	$	15,026		$	—
Cash paid for interest	$	7,555		$	3,438
Non-cash investing and financing activities:
Capital expenditures included in accounts payable and accrued liabilities	$	6,269		$	23,280
Related party bridge loans exchanged for Redeemable Class 2 Common Units	$	—		$	60,761

See Notes to Condensed Consolidated and Combined Financial Statements.

4

LIBERTY OILFIELD SERVICES INC.

Notes to Condensed Consolidated and Combined Financial Statements

(Unaudited)

Note 1—Organization and Basis of Presentation

Organization

Liberty Oilfield Services Inc. (the “Company”) was incorporated as a Delaware corporation on December 21, 2016, to become a holding corporation for Liberty Oilfield Services New HoldCo LLC (“Liberty LLC”) and its subsidiaries upon completion of a corporate reorganization (as detailed below, the “Corporate Reorganization”) and planned initial public offering of the Company (“IPO”). The Company has no material assets other than its ownership in Liberty LLC.

Prior to the Corporate Reorganization, Liberty Oilfield Services Holdings LLC (“Liberty Holdings”) wholly owned Liberty Oilfield Services LLC (“LOS”) and LOS Acquisition CO I LLC (“ACQI” and, together with LOS, the “Predecessor”), which includes the assets and liabilities of LOS Odessa RE Investments, LLC (“Odessa”) and LOS Cibolo RE Investments, LLC (“Cibolo”). Following the Corporate Reorganization, Liberty LLC wholly owns the Predecessor. Effective March 22, 2018 the assets of ACQI were contributed into LOS and ACQI was dissolved.

The Company, together with its subsidiaries, is a multi-basin provider of hydraulic fracturing services, with a focus on deploying the latest technologies in the technically demanding oil and gas reservoirs in which it operates, principally in North Dakota, Colorado, Wyoming and Texas.

Corporate Reorganization

In connection with the IPO, the Company completed a series of organizational transactions, including the following:

• Liberty Holdings contributed all of its assets to Liberty LLC in exchange for Liberty LLC Units (as defined below);

• Liberty Holdings liquidated and distributed to its then-existing owners (the “Legacy Owners”) Liberty LLC Units pursuant to the terms of the limited liability company agreement of Liberty Holdings and the Master Reorganization Agreement dated as of January 11, 2018, by and among the Company, Liberty Holdings, Liberty LLC, and the other parties named therein (the “Master Reorganization Agreement”);

• Certain of the Legacy Owners directly or indirectly contributed all or a portion of their Liberty LLC Units to the Company in exchange for 55,685,027 shares of our Class A common stock, par value $0.01 per share (the “Class A Common Stock”), and 1,258,514 restricted shares of Class A Common Stock. Subsequent to the initial exchange, 1,609,122 shares of Class A Common Stock were redeemed for an aggregate price of $25.9 million, upon the exercise of the underwriters’ overallotment option;

• the Company issued, at par, the Legacy Owners that continued to own Liberty LLC Units (the “Liberty Unit Holders”) an aggregate amount of 48,207,372 shares of our Class B common stock, par value $0.01 per share (the “Class B Common Stock”); and

• the Company contributed the net proceeds it received from the IPO to Liberty LLC in exchange for additional Liberty LLC Units such that the Company holds a total number of Liberty LLC Units equal to the number of shares of Class A Common Stock outstanding following the IPO.

Initial Public Offering

On January 17, 2018 the Company completed its IPO of 14,640,755 shares of its Class A Common Stock at a public offering price of $17.00 per share, of which 14,340,214 shares were offered by the Company and 300,541 were offered by the selling shareholder. The Company received $220.3 million net proceeds from the IPO, after deducting approximately $13.4 million in underwriting discounts and commissions and $10.1 million of other offering costs. The Company did not receive any proceeds from the sale of the shares of Class A Common Stock by the selling shareholder. The Company used $25.9 million of net proceeds to redeem ownership interests in Liberty LLC from the Legacy Owners. The Company contributed the remaining net proceeds to Liberty LLC in exchange for units in Liberty LLC (the “Liberty LLC Units”). Liberty LLC used a portion of these net proceeds (i) to repay outstanding borrowings and accrued interest under the Predecessor’s ABL Facility (as defined herein), totaling approximately $30.1 million, (ii) to repay 35% of the Predecessor’s outstanding borrowings, accrued interest and prepayment premium under the Term Loan Facility (as defined herein), totaling approximately $62.5 million and (iii) for

5

LIBERTY OILFIELD SERVICES INC.

Notes to Condensed Consolidated and Combined Financial Statements

(Unaudited)

general corporate purposes, including repayment of additional indebtedness and funding a portion of 2018 and other future capital expenditures. As of June 30, 2018, the Company owns 59.2% of Liberty LLC.

Basis of Presentation

The accompanying unaudited condensed consolidated and combined financial statements were prepared using generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read together with the annual financial statements included in the 2017 Annual Report on Form 10-K.

The accompanying unaudited condensed consolidated and combined financial statements and related notes present the consolidated financial position, results of operations, cash flows, and equity of the Company as of and for the three and six months ended June 30, 2018 and the combined financial position, results of operations, and cash flows of the Predecessor as of December 31, 2017 and for the three and six months ended June 30, 2017. The interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim period. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results of operations expected for the entire fiscal year ended December 31, 2018.

All intercompany amounts have been eliminated in the presentation of these unaudited condensed consolidated and combined financial statements. Comprehensive income is not reported due to the absence of items of other comprehensive income or loss during the periods presented. The condensed consolidated and combined financial statements include financial data at historical cost as the contribution of assets is considered to be a reorganization of entities under common control. The condensed consolidated and combined financial statements may not be indicative of the actual level of assets, liabilities and costs that would have been incurred by the Predecessor if it had operated as an independent, publicly-traded company during the periods prior to the IPO or of the costs expected to be incurred in the future. In the opinion of management, the adjustments necessary for a fair presentation of the combined financial statements in accordance with GAAP have been made. Such adjustments are of a normal recurring nature.

The unaudited condensed consolidated and combined financial statements for periods prior to January 17, 2018, reflect the historical results of Predecessor. The unaudited condensed consolidated financial statements include the amounts of the Company and all majority owned subsidiaries where the Company has the ability to exercise control.

Note 2—Significant Accounting Policies

Revenue Recognition

Effective January 1, 2018, the Company adopted a comprehensive new revenue recognition standard, Accounting Standard Codification (“ASC”) Topic 606-Revenue from Contracts with Customers. The details of the significant changes to accounting policies resulting from the adoption of the new standard are set out below. The Company adopted the standard using a modified retrospective method; accordingly, the comparative information for the three and six months ended June 30, 2017 has not been adjusted and continues to be reported under the previous revenue standard. The adoption of this standard did not have a material impact to the condensed consolidated financial position, reported revenue, results of operations or cash flows as of and for the three and six months ended June 30, 2018. 

Under the new standard, revenue recognition is based on the transfer of control, or our customer’s ability to benefit from our services and products in an amount that reflects the consideration expected to be received in exchange for those services and products. In recognizing revenue for services and products, the transaction price is determined from sales orders or contracts with customers. Revenue is recognized at the completion of each fracturing stage, and in most cases the price at the end of each stage is fixed, however, in limited circumstances contracts may contain variable consideration.

Variable consideration typically may relate to discounts, price concessions and incentives. We estimate variable consideration based on the amount of consideration we expect to receive. The Company accrues revenue on an ongoing basis to reflect updated information for variable consideration as performance obligations are met.

The Company also assesses customers’ ability and intention to pay, which is based on a variety of factors including historical payment experience and financial condition. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 45 days.

From time to time, the Company may require partial payment in advance from new customers to secure credit or from existing customers in order to secure additional hydraulic fracturing services. Initially, such payments are recorded in the

6

LIBERTY OILFIELD SERVICES INC.

Notes to Condensed Consolidated and Combined Financial Statements

(Unaudited)

accompanying condensed consolidated and combined financial statements as deferred revenue, and upon performance of the agreed services, the Company recognizes revenue consistent with its revenue recognition policy described above. As of June 30, 2018, the Company had $3.8 million recorded as deferred revenue related to the unearned portion of a prepayment from an existing customer to secure additional services from a new fleet by the end of 2017. The new fleet commenced services in December 2017, and the Company applies the prepayment in accordance with the customer agreement as services are performed. During the three and six months ended June 30, 2018, the Company recognized $2.9 million and $5.4 million of the prepayment to revenue, respectively.

Fleet Start-up Costs

The Company incurs start-up costs to commission a new fleet or district. These costs include hiring and training of personnel, and acquisition of consumable parts and tools. Start-up costs are expensed as incurred, and are reflected in general and administrative expenses in the combined statement of operations. Start-up costs for the three and six months ended June 30, 2018 were $3.3 million and $6.6 million, respectively, related to one and three new fleets deployed during each respective period. Start-up costs for the three and six months ended June 30, 2017 were $4.3 million and $8.9 million, respectively, related to four and six new fleets deployed during each respective period. The total amount of start-up costs incurred for the commissioning of each new fleet depends primarily on the number and timing of hiring additional personnel to staff such fleets, and such costs may not be entirely incurred in the same period as the fleet is deployed.

The terms and conditions of the Credit Facilities, defined herein, between the Company and its lenders provides for the add-back of costs or expenses incurred in connection with the acquisition, deployment and opening of any new hydraulic fracturing fleet or district in the computation of certain financial covenants. (See Note 5).

Recently Adopted Accounting Standards

In May 2014 the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. This ASU sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity is required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. Additional disclosures are required to describe the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The Company adopted this standard on January 1, 2018 using the modified retrospective method. The Company did not record a cumulative effect adjustment to the opening balance of retained earnings, as no adjustment was necessary. The adoption of this standard did not impact the Company’s reported revenue, net income or cash flows.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” which requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The adoption of ASU 2016-01 did not have a material impact on the condensed consolidated and combined financial statements of the Company.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which provides guidance on eight different issues, intended to reduce diversity in practice on how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The adoption of ASU 2016-15 did not have a material impact on the condensed consolidated and combined financial statements of the Company.

In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory,” which requires entities to recognize the tax consequences of intercompany asset transfers in the period in which the transfer takes place, with the exception of inventory transfers. The adoption of ASU 2016-16 did not have a material impact on the condensed consolidated and combined financial statements of the Company.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which provides guidance to increase clarity and reduce both diversity in practice and cost and complexity when applying the existing accounting guidance on changes to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 require an entity to account for the effects of a modification unless all the following conditions are met: (i) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; (ii) the vesting conditions of the modified award are the same as the vesting

7

LIBERTY OILFIELD SERVICES INC.

Notes to Condensed Consolidated and Combined Financial Statements

(Unaudited)

conditions of the original award immediately before the original award is modified; and (iii) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The guidance in ASU 2017-09 is applied prospectively. The amendments in ASU 2017-09 are effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company’s adoption of this guidance did not materially impact its condensed consolidated and combined financial statements.

Recently Issued Accounting Standards

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a purchase financed by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less may be accounted for similarly to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 is expected to impact the Company’s consolidated and combined financial statements as the Company has certain operating and real property lease arrangements for which it is the lessee. The standard is effective on January 1, 2019, with early adoption permitted. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated and combined financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which is effective for fiscal years and interim periods within fiscal years beginning after December 15, 2019, with a modified-retrospective approach to be used for implementation. ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. Specifically, this new guidance requires using a forward looking, expected loss model for trade and other receivables, held-to-maturity debt securities, loans and other instruments. This will replace the currently used model and may result in an earlier recognition of allowance for losses. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated and combined financial statements.

Note 3—Inventories

Inventories consist of the following:

	June 30,		December 31,
($ in thousands)	2018		2017
Proppants	$	32,588	$	30,523
Chemicals	10,731		10,660
Maintenance parts	19,055		14,341
	$	62,374	$	55,524

As of June 30, 2018, the lower of cost or net realizable value analysis resulted in the Company recording a write-down to inventory carrying values of $3.4 million, included as a component in cost of services in the condensed consolidated statements of income for the three and six month periods ended June 30, 2018.

8

LIBERTY OILFIELD SERVICES INC.

Notes to Condensed Consolidated and Combined Financial Statements

(Unaudited)

Note 4—Property and Equipment

Property and equipment consist of the following:

	Estimated useful lives (in years)	June 30,			December 31,
($ in thousands)		2018			2017
Land	N/A	$	5,400		$	4,495
Field services equipment	2-7	684,397			572,096
Vehicles	4-7	60,500			60,815
Buildings and facilities	5-30	26,917			24,260
Office equipment, furniture, and software	2-7	6,173			5,879
		783,387			667,545
Less accumulated depreciation and amortization		(255,548		)	(198,453		)
		527,839			469,092
Construction in-progress	N/A	33,175			25,684
		$	561,014		$	494,776

Depreciation expense for the three months ended June 30, 2018 and 2017 was $30.6 million and $17.5 million, respectively. During the six months ended June 30, 2018 and 2017, the Company recognized depreciation expense of $58.6 million and $31.7 million, respectively.

Note 5—Debt

Debt consists of the following:

	June 30,			December 31,
($ in thousands)	2018			2017
Term Loan Outstanding	$	113,028		$	174,562
Revolving Line of Credit	—			30,000
Deferred financing costs and original issue discount	(5,823		)	(8,205		)
Total debt, net of deferred financing costs and original issue discount	$	107,205		$	196,357
Current portion of long-term debt, net of discount	$	375		$	11
Long-term debt, net of discount and current portion	106,830			196,346
	$	107,205		$	196,357

On September 19, 2017, the Company entered into two new credit agreements for a revolving line of credit up to $250.0 million (the “ABL Facility”) and a $175.0 million term loan (the “Term Loan Facility”, and together with the ABL Facility the “Credit Facilities”). Following is a description of the ABL Facility and the Term Loan Facility.

ABL Facility

Under the terms of the ABL Facility, up to $250.0 million may be borrowed, subject to certain borrowing base limitations based on a percentage of eligible accounts receivable and inventory. As of June 30, 2018, the borrowing base was calculated to be $235.4 million, and the Company had no borrowings outstanding, except for a letter of credit in the amount of $0.3 million, with $235.1 million of remaining availability. Borrowings under the ABL Facility bear interest at LIBOR or a base rate, plus an applicable LIBOR margin of 1.5% to 2.0% or base rate margin of 0.5% to 1.0%, as defined in the ABL Facility credit agreement. The unused commitment is subject to an unused commitment fee of 0.375% to 0.5%. Interest and fees are payable in arrears at the end of each month, or, in the case of LIBOR loans, at the end of each interest period. The ABL Facility matures on the earlier of (i) September 19, 2022 and (ii) to the extent the debt under the Term Loan Facility remains outstanding, 90 days prior to the final maturity of the Term Loan Facility, which matures on September 19, 2022. Borrowings under the ABL

9

LIBERTY OILFIELD SERVICES INC.

Notes to Condensed Consolidated and Combined Financial Statements

(Unaudited)

Facility are collateralized by accounts receivable and inventory, and further secured by the Company, Liberty LLC and R/C IV Non-U.S. LOS Corp., a Delaware corporation and a subsidiary of the Company, as parent guarantors.

Term Loan Facility

The Term Loan Facility provides for a $175.0 million term loan, of which $113.0 million remained outstanding as of June 30, 2018. Amounts outstanding bear interest at LIBOR or a base rate, plus an applicable margin of 7.625% or 6.625%, respectively, and the weighted average rate on borrowings was 9.7% as of June 30, 2018. The Company is required to make quarterly principal payments of 1% per annum of the initial principal balance, commencing on December 31, 2017, with final payment due at maturity on September 19, 2022. The Term Loan Facility is collateralized by the fixed assets of LOS and its subsidiaries, and is further secured by the Company, Liberty LLC and R/C IV Non-U.S. LOS Corp., a Delaware corporation and a subsidiary of the Company, as parent guarantors.

The Credit Facilities include certain non-financial covenants, including but not limited to restrictions on incurring additional debt and certain distributions. Moreover, the ability of the Company to incur additional debt and to make distributions is dependent on maintaining a maximum leverage ratio. The Term Loan Facility requires mandatory prepayments upon certain dispositions of property or issuance of other indebtedness, as defined, and annually a percentage of excess cash flow (25% to 50%, depending on leverage ratio, of consolidated net income less capital expenditures and other permitted payments, commencing with the year ending December 31, 2018). Certain mandatory prepayments and optional prepayments are subject to a prepayment premium of 3% of the prepaid principal declining annually to 1% during the first three years of the term of the Term Loan Facility.

The Credit Facilities are not subject to financial covenants unless liquidity, as defined in the respective credit agreements, drops below a specified level. Under the ABL Facility, the Company is required to maintain a minimum fixed charge coverage ratio, as defined in the credit agreement governing the ABL Credit Facility, of 1.0 to 1.0 for each period if excess availability is less than 10% of the borrowing base or $12.5 million, whichever is greater. Under the Term Loan Facility, the Company is required to maintain a minimum fixed charge coverage ratio, as defined, of 1.2 to 1.0 for each trailing twelve-month period if the Company’s liquidity, as defined, is less than $25.0 million for at least five consecutive business days.

The Company was in compliance with these covenants as of June 30, 2018.

Maturities of debt are as follows:

($ in thousands)
Year Ending June 30,
2019	$	1,750
2020	2,188
2021	1,750
2022	1,312
2023	106,028
	$	113,028

Note 6—Redeemable Common Units

During February 2017, ACQI received $39.8 million in cash from Liberty Holdings in exchange for 40,000,000 redeemable common units of ACQI which accrue a return of 8% per annum (the “Redeemable Common Units”). The Redeemable Common Units were redeemable at the option of the holder on the later of (A) the earlier of an initial public offering or March 23, 2020 and (B) the second business day after all principal and interest outstanding under the ABL Facility have been paid in full and commitments thereunder are terminated. In accordance with ASC 505, “Equity”, due to their conditional redemption feature, the Redeemable Common Units were classified as temporary equity in the accompanying combined balance sheet as of December 31, 2017.

The Redeemable Common Units were deemed extinguished and satisfied in full in connection with the Corporate Reorganization (see Note 1).

Note 7—Fair Value Measurements and Financial Instruments

The fair values of the Company’s assets and liabilities represent the amounts that would be received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction at the reporting date. These fair value measurements

10

LIBERTY OILFIELD SERVICES INC.

Notes to Condensed Consolidated and Combined Financial Statements

(Unaudited)

maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company’s own judgments about the assumptions that market participants would use in pricing the asset or liability. The Company discloses the fair values of its assets and liabilities according to the quality of valuation inputs under the following hierarchy:

• Level 1 Inputs: Quoted prices (unadjusted) in an active market for identical assets or liabilities.

• Level 2 Inputs: Inputs other than quoted prices that are directly or indirectly observable.

• Level 3 Inputs: Unobservable inputs that are significant to the fair value of assets or liabilities.

The classification of an asset or liability is based on the lowest level of input significant to its fair value. Those that are initially classified as Level 3 are subsequently reported as Level 2 when the fair value derived from unobservable inputs is inconsequential to the overall fair value, or if corroborating market data becomes available. Assets and liabilities that are initially reported as Level 2 are subsequently reported as Level 3 if corroborating market data is no longer available. Transfers occur at the end of the reporting period. There were no transfers into or out of Levels 1, 2 and 3 during the six months ended June 30, 2018 and 2017.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, long-term debt, and capital lease obligations. These financial instruments do not require disclosure by level. The carrying values of all the Company’s financial instruments included in the accompanying balance sheets approximated or equaled their fair values at June 30, 2018 and December 31, 2017.

• The carrying values of cash and cash equivalents, accounts receivable and accounts payable (including accrued liabilities) approximated fair value at June 30, 2018 and December 31, 2017, due to their short-term nature.

• The carrying value of amounts outstanding under long-term debt agreements with variable rates approximated fair value at June 30, 2018 and December 31, 2017, as the effective interest rates approximated market rates.

Nonfinancial assets

The Company estimates fair value to perform impairment tests as required on long-lived assets. The inputs used to determine such fair value are primarily based upon internally developed cash flow models and would generally be classified within Level 3 in the event that such assets were required to be measured and recorded at fair value within the combined financial statements. There were no such measurements required as of June 30, 2018 and December 31, 2017.

Credit Risk

The Company’s financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents, and trade receivables.

The Company’s cash balances on deposit with financial institutions total $83.3 million and $16.3 million as of June 30, 2018 and December 31, 2017, respectively, which exceeded FDIC insured limits. The Company regularly monitors these institutions’ financial condition.

The majority of the Company’s customers have stated payment terms of 45 days or less. As of June 30, 2018 and December 31, 2017, one customer accounted for 16% and 22% of total accounts receivable and unbilled revenue, respectively. The Company mitigates the associated credit risk by performing credit evaluations and monitoring the payment patterns of its customers. During the three months ended June 30, 2018 and 2017, one customer accounted for 15% and 28% of total revenue, respectively. During the six months ended June 30, 2018 and 2017, one customer accounted for 16% and 30% of total revenue, respectively.

As of June 30, 2018 and December 31, 2017, the Company had no provision for doubtful accounts.

11

LIBERTY OILFIELD SERVICES INC.

Notes to Condensed Consolidated and Combined Financial Statements

(Unaudited)

Note 8—Equity

Preferred Stock

As of June 30, 2018 the Company had 10,000 shares of preferred stock authorized, par value $0.01, with none issued and outstanding. If issued, each class or series of preferred stock will cover the number of shares and will have the powers, preferences, rights, qualifications, limitations and restrictions determined by the board of directors, which may include, among others, dividend rights, liquidation preferences, voting rights, conversion rights, preemptive rights and redemption rights. Except as provided by law or in a preferred stock designation, the holders of preferred stock will not be entitled to vote at or receive notice of any meeting of shareholders.

Class A Common Stock

The Company had a total of 69,958,113 shares of Class A Common Stock outstanding as of June 30, 2018, which includes 937,716 shares of restricted stock. Holders of Class A Common Stock are entitled to one vote per share on all matters to be voted upon by the stockholders and are entitled to ratably receive dividends when and if declared by the Company’s board of directors.

Class B Common Stock

The Company had a total 48,207,372 shares of Class B Common Stock outstanding as of June 30, 2018. Holders of the Class B Common Stock are entitled to one vote per share on all matters to be voted upon by stockholders. Holders of Class A Common Stock and Class B Common Stock vote together as a single class on all matters presented to the Company’s stockholders for their vote or approval, except with respect to amendment of certain provisions of the Company’s certificate of incorporation that would alter or change the powers, preferences or special rights of the Class B Common Stock so as to affect them adversely, which amendments must be by a majority of the votes entitled to be cast by the holders of the shares affected by the amendment, voting as a separate class, or as otherwise required by applicable law.

Holders of Class B Common Stock do not have any right to receive dividends, unless the dividend consists of Class B Common Stock or of rights, options, warrants or other securities convertible or exercisable into or exchangeable for shares of Class B Common Stock paid proportionally with respect to each outstanding share of Class B Common Stock and a dividend consisting of shares of Class A Common Stock or of rights, options, warrants or other securities convertible or exercisable into or exchangeable for shares of Class A Common Stock on the same terms is simultaneously paid to the holders of Class A Common Stock. Holders of Class B Common Stock do not have any right to receive a distribution upon liquidation or winding up of the Company.

The Liberty LLC Unit holders generally have the right (the “Redemption Right”) to cause Liberty LLC to acquire all or a portion of their Liberty LLC Units (and a corresponding number of shares of Class B Common Stock), for, at Liberty LLC’s election, (i) shares of Class A Common Stock, at a redemption ratio of one share of Class A Common Stock for each Liberty LLC Unit (and corresponding share of Class B Common Stock) redeemed, (subject to conversion rate adjustments for stock splits, stock dividends, and reclassifications and other similar transactions) or (ii) an equivalent amount of cash. Alternatively, upon the exercise of the Redemption Right, the Company (instead of Liberty LLC) will have the right (the “Call Right”) to, for administrative convenience, acquire each tendered Liberty LLC Unit directly from the redeeming Liberty Unit holder for, at its election, (x) one share of Class A Common Stock or (y) an equivalent amount of cash. In addition, upon a change of control of the Company, the Company has the right to require each holder of Liberty LLC Units (other than the Company) to exercise its Redemption Right with respect to some or all of such unitholder’s Liberty LLC Units. In connection with any redemption of Liberty LLC Units pursuant to the Redemption Right or the Call Right, the corresponding number of shares of Class B Common Stock will be canceled.

Net Income per Share

Basic net income per share measures the performance of an entity over the reporting period. Diluted net income per share measures the performance of an entity over the reporting period while giving effect to all potentially dilutive common shares that were outstanding during the period. The Company uses the “if-converted” method to determine the potential dilutive effect of its Class B Common Stock and the treasury stock method to determine the potential dilutive effect of outstanding restricted stock and restricted stock units.

12

LIBERTY OILFIELD SERVICES INC.

Notes to Condensed Consolidated and Combined Financial Statements

(Unaudited)

The following table reflects the allocation of net income to common stockholders and net income per share computations for the periods indicated based on a weighted average number of common stock outstanding for period subsequent to the Corporate Reorganization on January 17, 2018:

(In thousands, except per share data)	Three Months Ended June 30, 2018		Six Months Ended June 30, 2018
Basic Net Income Per Share
Numerator:
Net income attributable to Liberty Oilfield Services Inc. Stockholders	$	49,595	$	73,270
Denominator:
Basic weighted average shares outstanding	69,020		68,977
Basic net income per share attributable to Liberty Oilfield Services Inc. Stockholders	$	0.72	$	1.06
Diluted Net Income Per Share
Numerator:
Net income attributable to Liberty Oilfield Services Inc. Stockholders	$	49,595	$	73,270
Effect of exchange of the shares of Class B Common stock for shares of Class A Common Stock	34,171		50,482
Diluted net income attributable to Liberty Oilfield Services Inc. Stockholders	$	83,766	$	123,752
Denominator:
Basic weighted average shares outstanding	69,020		68,977
Effect of dilutive securities:
Restricted stock	948		994
Restricted stock units	463		229
Class B Common Stock	48,207		48,207
Diluted weighted average shares outstanding	118,638		118,407
Diluted net income per share attributable to Liberty Oilfield Services Inc. Stockholders	$	0.71	$	1.05

LLC Interest Issuance

Prior to the IPO and Corporate Reorganization, as described in Note 1, Liberty Holdings issued membership interests to investors in exchange for cash consideration. Total member contributions as of December 31, 2017 were $275.7 million, net of commitment and issuance fees. On January 17, 2018, in connection with the Corporate Reorganization, these membership interests were exchanged for Liberty LLC Units. See Note 1 for additional information regarding the Corporate Reorganization.

Unit-Based Compensation

Prior to the IPO and Corporate Reorganization, Liberty Holdings issued Class B units of Liberty Holdings (“Legacy Units”) to certain eligible employees of the Company. The Legacy Units were non-voting, except with respect to such matters that units are entitled to vote as a matter of law. In such cases, each Legacy Unit entitled the holder to 1/1000th of one vote. Certain Legacy Units granted to eligible participants had an assigned benchmark value and were subject to vesting in accordance with the terms of each award letter. Upon termination of the holder’s employment for any reason, Liberty Holdings had the right, but not the obligation, to repurchase from the recipient those vested Legacy Units at fair value.

The Company recognizes compensation expense for equity-based Legacy Units issued to employees based on the grant-date fair value of the awards and each award’s requisite service period. With the assistance from a third-party valuation expert, the Predecessor determined that the Legacy Units issued to employees were deemed to have a de minimis grant-date fair value based on their assigned benchmark values. In connection with the Corporate Reorganization, the unvested Legacy Units were exchanged for 1,258,514 shares of restricted stock with the same terms and requisite vesting conditions as the Legacy Units.

13

LIBERTY OILFIELD SERVICES INC.

Notes to Condensed Consolidated and Combined Financial Statements

(Unaudited)

There was no change in the classification of the awards, and the fair value of the awards was the same immediately before and after the exchange. As such, in accordance with ASU 2017-07, modification accounting was not applicable, and the restricted stock awards continue to be recognized at the grant date fair value of the Legacy Units.

Restricted Stock Awards

Restricted stock awards are awards of Class A Common Stock that are subject to restrictions on transfer and to a risk of forfeitures if the award recipient is no longer an employee or director of the Company for any reason prior to the lapse of the restrictions.

The following table summarizes the Company’s unvested restricted stock activity for the six months ended June 30, 2018:

	Number of Shares		Grant Date Fair Value per Share (1)
Shares of Restricted Stock Issued in Exchange for Legacy Units	1,258,514		—
Vested	(303,737	)	—
Forfeited	(17,061	)	—
Outstanding at June 30, 2018	937,716		$	—

(1)    As discussed above the shares of restricted stock retain the grant date fair value of the Legacy Units.

Long Term Incentive Plan

On January 11, 2018, the Company adopted the Long Term Incentive Plan (“LTIP”) to incentivize employees, officers, directors and other service providers of the Company and its affiliates. The LTIP provides for the grant, from time to time, at the discretion of the Board or a committee thereof, of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, dividend equivalents, other stock-based awards, cash awards, substitute awards and performance awards. Subject to adjustment in the event of certain transaction or changes of capitalization in accordance with the LTIP, 12,908,734 shares of Class A Common Stock have been reserved for issuance pursuant to awards under the LTIP. Class A Common stock subject to an award that expires or is canceled, forfeited, exchanged, settled in cash or otherwise terminated without delivery of shares and shares withheld to pay the exercise price of, or to satisfy the withholding obligations with respect to, an award will again be available for delivery pursuant to other awards under the LTIP.

Restricted Stock Units

Restricted stock units (RSUs) granted pursuant to the LTIP, if they vest, will be settled in shares of the Company’s Class A Common Stock. RSUs were granted with vesting terms up to five years. Changes in non-vested RSUs outstanding under the LTIP during the six months ended June 30, 2018 were as follows:

	Number of Units	Weighted Average Grant Date Fair Value per Unit
Non-vested as of December 31, 2017	—	$	—
Granted	900,876	19.99
Vested	—	—
Forfeited	—	—
Outstanding at June 30, 2018	900,876	$	19.99

Stock-based compensation is included in cost of services and general and administrative expenses in the Company’s condensed consolidated and combined statements of income. The Company recognized stock based compensation expense of $1.2 million for the three and six months ended June 30, 2018. The Company recognized no stock based compensation expense prior to the Corporate Reorganization. There was approximately $16.8 million of unrecognized compensation expense relating to outstanding RSUs as of June 30, 2018. The unrecognized compensation expense will be recognized on a straight-line basis over the weighted average remaining vesting period of 2.8 years.

14

LIBERTY OILFIELD SERVICES INC.

Notes to Condensed Consolidated and Combined Financial Statements

(Unaudited)

Note 9—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. As a result of the IPO and Corporate Reorganization, the Company recorded deferred tax assets and liabilities for the difference between the book value of assets and liabilities for financial reporting purposes and those amounts applicable for income tax purposes. Deferred tax assets have been recorded for tax attributes contributed to the Company as part of the Corporate Reorganization. Deferred tax liabilities of $28.6 million have been recorded in connection with the Liberty LLC Units acquired through reorganization. The initial deferred tax liability is recorded as a long term liability and additional paid in capital on the condensed consolidated balance sheet as of June 30, 2018.

The effective combined U.S. federal and state income tax rate applicable to the Company for the period commencing on January 17, 2018, the date of the Corporate Reorganization, through June 30, 2018 was 13.9%. The Company’s effective tax rate is significantly less than the statutory tax rate of 21.0% primarily due to the shortened taxable period, as the Company was a pass-through entity prior to the IPO, and because no taxes are payable by the Company for the noncontrolling interest’s share of Liberty LLC’s pass through results for federal, state and local income tax reporting. The Company recognized income tax expense of $24.0 million for the period commencing on January 17, 2018, the date of the Corporate Reorganization, through June 30, 2018, and $15.9 million during the three months ended June 30, 2018.

Tax Receivable Agreements

In connection with the IPO, on January 17, 2018, the Company entered into two Tax Receivable Agreements (the “TRAs”) with the R/C Energy IV Direct Partnership, L.P. and the Legacy Owners that continued to own Liberty LLC Units (each such person and any permitted transferee, a “TRA Holder” and together, the “TRA Holders”). The TRAs generally provide for the payment by the Company of 85% of the net cash savings, if any, in U.S. federal, state, and local income tax and franchise tax (computed using simplifying assumptions to address the impact of state and local taxes) that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the IPO as a result, as applicable to each TRA Holder, of (i) certain increases in tax basis that occur as a result of the Company’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s Liberty LLC Units in connection with the IPO or pursuant to the exercise of the Redemption Right or the Company’s Call Right, (ii) any net operating losses available to the Company as a result of the Corporate Reorganization, and (iii) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, any payments the Company makes under the TRAs.

The term of each TRA commenced on January 17, 2018, and will continue until all such tax benefits that are subject to such TRA have been utilized or expired, unless the Company experiences a change of control (as defined in the TRAs, which includes certain mergers, asset sales and other forms of business combinations) or the TRAs are terminated early (at the Company’s election or as a result of its breach), and the Company makes the termination payments specified in such TRA.

The amounts payable, as well as the timing of any payments, under the TRAs are dependent upon significant future events and assumptions, including the timing of the redemptions of Liberty LLC Units, the price of our Class A Common Stock at the time of each redemption, the extent to which such redemptions are taxable transactions, the amount of the redeeming unit holder’s tax basis in its Liberty LLC Units at the time of the relevant redemption, the depreciation and amortization periods that apply to the increase in tax basis, the amount of net operating losses available to the Company as a result of the Corporate Reorganization, the amount and timing of taxable income the Company generates in the future, the U.S. federal income tax rate then applicable, and the portion of the Company’s payments under the TRAs that constitute imputed interest or give rise to depreciable or amortizable tax basis. As of June 30, 2018, there have been no payments associated with the TRA.

Prior to the Corporate Reorganization, one of the Legacy Owners contributed a portion of its member interest in Liberty Holdings to R/C IV Non-U.S. LOS Corp (“R/C IV”). Subsequently, in conjunction with the Corporate Reorganization, R/C IV was contributed to Liberty LLC. R/C IV had net operating loss carryforwards totaling $11.1 million for federal income tax purposes and $7.8 million for certain state income tax purposes. As a result of the Company being in a net income position and the expected utilization of deferred tax assets, the tax attributes contributed to the Company included a deferred tax asset of $2.6 million. As of June 30, 2018, the Company recognized a $2.3 million payable pursuant to the TRAs, or 85% of the deferred tax asset that is expected to be realized.

Note 10—Defined Contribution Plan

The Company sponsors a 401(k) defined contribution retirement plan covering eligible employees. The Company makes matching contributions, which were temporarily suspended in May 2015, but were resumed in April 2017 at a rate of $1.00 for each $1.00 of employee contribution, subject to a cap of 3% of the employee’s salary. In October 2017, the cap on these contributions was increased to 6% of the employee’s base salary. Contributions made by the Company were $6.7 million and

15

LIBERTY OILFIELD SERVICES INC.

Notes to Condensed Consolidated and Combined Financial Statements

(Unaudited)

$1.2 million for the six months ended June 30, 2018 and 2017, respectively, and $3.4 million and $1.2 million for the three months ended June 30, 2018 and 2017, respectively.

Note 11—Related Party Transactions

In connection with the Corporate Reorganization, the Company engaged in transactions with affiliates (see Note 1) including entering into two tax receivable agreements with affiliates (see Note 9). Also in conjunction with the Corporate Reorganization, Liberty Holdings contributed $2.1 million of assets to Liberty LLC, Redeemable Common Units in the amount of $42.6 million were settled (see Note 6) and $2.0 million of accrued advisory fees to Riverstone were settled.

In September 2011, Liberty Resources LLC, an oil and gas exploration and production company, and its successor entity (collectively, the “Affiliate”) and LOS, companies with common ownership and management, entered into a services agreement (the “Services Agreement”) whereby the Affiliate is to provide certain administrative support functions to LOS and a master service agreement whereby LOS provides hydraulic fracturing services to the Affiliate at market service rates. The amounts incurred under the Services Agreement by LOS during the three and six months ended June 30, 2018, were $0 and $0.2 million, respectively, and $0 during the three and six months ended June 30, 2017. There was $0 payable as of June 30, 2018 and December 31, 2017. During June 2018, the Services Agreement was terminated.

The amounts of the Company’s revenue related to hydraulic fracturing services provided to the Affiliate for the three months ended June 30, 2018 and 2017, was $0 and $12.0 million, respectively, and $3.9 million and $15.2 million for the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018 and December 31, 2017, $4.1 million and $4.0 million, respectively, of the Company’s accounts receivable, and $0 and $0.1 million, respectively, of the Company’s unbilled revenue was with the Affiliate.

The Company has an advisory agreement dated December 30, 2011 in which Riverstone is to provide certain administrative advisory services. The service fees incurred during the three months ended June 30, 2018 and 2017 were $0 and $0.3 million, respectively, and $0 and $1.0 million for the six months ended June 30, 2018 and 2017, respectively. Fees accrued as of June 30, 2018 and December 31, 2017 were $0 and $2.0 million, respectively. The amount accrued as of December 31, 2017 was settled and the agreement terminated in connection with the IPO.

During 2016, Liberty Holdings entered into a future commitment to invest and become a noncontrolling minority member in Proppant Express Investments, LLC (“PropX Investments”), the owner of Proppant Express Solutions, LLC (“PropX”), a provider of proppant logistics equipment. LOS is party to a services agreement (the “PropX Services Agreement”) whereby LOS is to provide certain administrative support functions to PropX, and LOS is to purchase and lease proppant logistics equipment from PropX. For the three months ended June 30, 2018 and 2017 the Company purchased proppant logistics equipment of $0 and $2.9 million, respectively, and leased proppant logistics equipment for $1.1 million and $0.9 million, respectively. For the six months ended June 30, 2018 and 2017 the Company made purchases of $2.1 million and $5.8 million, respectively and lease payments of $2.7 million and $1.4 million, respectively. During the three months ended March 31, 2018, in exchange for a 5% discount, the Company made a prepayment to PropX for rented equipment in the amount of $5.4 million, of which $1.6 million and $2.2 million was recognized as expense to costs of goods sold during the three and six months ended June 30, 2018 and $3.3 million remains outstanding as of June 30, 2018, which is reflected in prepaids and other current assets. Receivables from PropX as of June 30, 2018 and December 31, 2017 were $0. Payables to PropX as of June 30, 2018 and December 31, 2017 were $0.9 million and $0.7 million, respectively.

Note 12—Commitments & Contingencies

Operating Leases

The Company leases office space, facilities, equipment, railcars, and vehicles under non-cancelable operating leases. Rent expense for the three months ended June 30, 2018 and 2017, was $9.4 million and $7.6 million, respectively, and $17.3 million and $9.5 million for the six months ended June 30, 2018 and 2017, respectively.

16

LIBERTY OILFIELD SERVICES INC.

Notes to Condensed Consolidated and Combined Financial Statements

(Unaudited)

Future minimum lease payments are as follows:

($ in thousands)
Year Ending June 30,
2019	$	26,502
2020	27,245
2021	29,272
2022	7,330
2023	4,373
Thereafter	28,100
	$	122,822

Purchase Commitments (tons, per ton, gallons, per gallon and per rail car prices are not in thousands)

The Company enters into purchase and supply agreements to secure supply and pricing of proppants and chemicals. As of June 30, 2018 and December 31, 2017, the agreements commit the Company to purchase 12,237,000 and 10,108,000 tons, respectively, of proppant through December 31, 2021, during the remaining terms of the agreements at per ton prices varying from approximately $33.73 to $102.30, respectively, depending on the final delivery location and type of proppant. Amounts above include commitments to pay for transport fees on minimum amounts of proppants or railcars, including two contracts for a minimum of 100 railcars each per month at a rate of $630 to $750 per railcar, and one contract includes a $3.00 per ton fee on committed sand purchases.

Certain proppant supply agreements contain a clause whereby in the event that the Company fails to purchase minimum monthly volumes, as defined in the agreement, during any particular calendar month, a shortfall fee varying from $12.50 to $25.00 will be applied to each shortfall ton. The Company has the ability to mitigate the shortfall penalty in a certain period by purchasing proppant in excess of the requirement in another period. There were no shortfalls as of June 30, 2018.

As of June 30, 2018, the Company has commitments to purchase 23,565,000 gallons of chemicals through December 31, 2020 at prices ranging from $1.08 to $1.83 per gallon.

Future proppant, chemical and rail car commitments are as follows:

($ in thousands)
Years ended June 30,
2019	$	325,960
2020	262,377
2021	126,865
2022	12,229
2023	—
	$	727,431

Litigation

From time to time, the Company is subject to legal and administrative proceedings, settlements, investigations, claims and actions. The Company’s assessment of the likely outcome of litigation matters is based on its judgment of a number of factors including experience with similar matters, past history, precedents, relevant financial and other evidence and facts specific to the matter. Notwithstanding the uncertainty as to the final outcome, based upon the information currently available, management does not believe any matters in aggregate will have a material adverse effect on its financial position or results of operations.

On February 23, 2017, SandBox Logistics, LLC and Oren Technologies, LLC (collectively, “SandBox”) filed suit in the Houston Division of the U.S. District Court for the Southern District of Texas against PropX Investments, PropX and LOS. As described in Note 11, LOS is party to the PropX Services Agreement. SandBox alleges that LOS willfully infringes multiple U.S. patents and has breached an agreement between SandBox and LOS by “directing, controlling, and funding” inter partes review (“IPR”) requests before the U.S. Patent and Trademark Office (“USPTO”). In July 2018, SandBox requested permission from the court to allege additional breach of contract claims against LOS, including alleged breaches of a confidentiality

17

LIBERTY OILFIELD SERVICES INC.

Notes to Condensed Consolidated and Combined Financial Statements

(Unaudited)

agreement and an exclusive purchasing covenant. SandBox seeks both monetary and injunctive relief from the court, as well as attorney’s fees and costs. LOS intends to vigorously defend against the claims brought by SandBox. The Company cannot predict with any degree of certainty the outcome of the suit.

Note 13—Subsequent Events

On August 1, 2018 the Company announced its first quarterly dividend of $0.05 per share of Class A common stock, to be paid on September 20, 2018 to holders of record as of September 6, 2018. Additionally, Liberty LLC will make a distribution of $0.05 per unit on September 20, 2018 to holders of record of Liberty LLC Units as of September 6, 2018.

18

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying 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” and our Annual Report under the heading “Item 1A. Risk Factors.” We assume no obligation to update any of these forward-looking statements.

Unless the context otherwise requires, references to the terms “Company,” “we,” “us” and “our” refer to the Predecessor for periods prior to the IPO, and Liberty Oilfield Services Inc. and its consolidated subsidiaries for periods following the IPO.

Overview

We are a growing independent provider of hydraulic fracturing services to onshore oil and natural gas exploration and production (“E&P”) companies in North America. We have grown from one active hydraulic fracturing fleet in December 2011 to 22 active fleets in August 2018. The demand for our hydraulic fracturing services exceeds our current capacity, and we expect, based on discussions with customers, to deploy one additional fleet, as well as add additional horsepower to existing fleets, during the fourth quarter of 2018, and add one additional fleet during the first quarter of 2019, for a total of 24 active fleets, representing approximately 1,170,000 hydraulic horsepower, including additional supporting horsepower. We added three fleets during the six months ended June 30, 2018 to bring our total active fleets to 22 as of June 30, 2018. Average active fleets during the six months ended June 30, 2018 and 2017 was 20.4 and 13.1, respectively, and 21.3 and 14.5 during the three months ended June 30, 2018 and 2017, respectively. Average active fleets is calculated as our daily average of active fleets for the relevant period. Our additional fleets are currently being built to our specifications. We provide our services primarily in the Permian Basin, the Eagle Ford Shale, the DJ Basin, the Williston Basin and the Powder River Basin.

We believe the following characteristics both distinguish us from our competitors and are the foundations of our business: forming ongoing partnerships of trust and innovation with our customers; developing and utilizing technology to maximize well performance; and promoting a people-centered culture focused on our employees, customers and suppliers. We have developed strong relationships with our customers by investing significant time in fracture design collaboration, which substantially enhances their production economics. Our technological innovations have become even more critical as E&P companies have increased the completion complexity and fracture intensity of horizontal wells. We are proactive in developing innovative solutions to industry challenges, including developing: (i) our proprietary 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; and (iii) our hydraulic fracturing fluid system tailored to the reservoir properties in the DJ Basin which materially reduces completion costs without compromising production. We foster a people-centered culture built around honoring our commitments to customers, partnering with our suppliers and hiring, training and retaining people that we believe to be the best talent in our field, enabling us to be one of the safest and most efficient hydraulic fracturing companies in the United States.

Recent Trends and Outlook

Demand for our hydraulic fracturing services is predominantly influenced by the level of drilling and completion by E&P companies, which, in turn, depends largely on the current and anticipated profitability of developing oil and natural gas reserves. More specifically, demand for our hydraulic fracturing services is driven by the completion of hydraulic fracturing stages in unconventional wells, which, in turn, is driven by several factors including rig count, well count, service intensity and the timing and style of well completions.

Macro Conditions

In the second quarter of 2018, the price of West Texas Intermediate crude oil averaged $68.02 compared with an average of $62.91 for the first quarter of 2018 and an average of $48.14 for the second quarter of 2017. This has led to an increase in our customer activity levels, which is commonly measured by the active rig count. In the second quarter of 2018, the horizontal rig count in North America averaged 911 compared to 831 in the first quarter of 2018 and 747 for the second quarter of 2017, according to a report by Baker Hughes, a GE company.

Although there is uncertainty in the market about the potential effect of Permian Basin takeaway constraints, Liberty's operations in Permian continue to grow and thrive. The developing imbalance for frac services in the Permian has not yet impacted Liberty fleets. Markets outside the Permian remain constructive. Based on these market conditions, the diversity of

19

Liberty's operating footprint, conversations with our customers and other factors, we expect demand for frac services to remain strong during 2018, especially for our high-efficiency frac fleets.

How We Evaluate Our Operations

We use a variety of qualitative, operational and financial metrics to assess our performance. First and foremost of these is a qualitative assessment of customer satisfaction because ensuring we are a valuable partner to our customers is the key to achieving our quantitative business metrics. Among other measures, management considers each of the following:

Revenue;

Operating Income (Loss);

Net Income;

Net Income per Share;

EBITDA;

Adjusted EBITDA; and

Annualized Adjusted EBITDA per Average Active Fleet.

Revenue

We analyze our revenue by comparing actual monthly revenue to our internal projections for a given period and to prior periods to assess our performance. We also assess our revenue in relation to the number of fleets we have deployed (revenue per average active fleet) from period to period.

Operating Income (Loss)

We analyze our operating income (loss), which we define as revenues less direct operating expenses, depreciation and amortization and general and administrative expenses, to measure our financial performance. We believe operating income is a meaningful metric because it provides insight on profitability and true operating performance based on the historical cost basis of our assets. We also compare operating income to our internal projections for a given period and to prior periods.

EBITDA, Adjusted EBITDA and Annualized Adjusted EBITDA per Average Active Fleet

We view EBITDA, Adjusted EBITDA and Annualized Adjusted EBITDA per Average Active Fleet as important indicators of performance. We define EBITDA as net income (loss) before interest, income taxes, depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted to eliminate the effects of items such as new fleet or new basin start-up costs, costs of asset acquisition, gain or loss on the disposal of assets, asset impairment charges, bad debt reserves, and non-recurring expenses that management does not consider in assessing ongoing operating performance. Average Active Fleets is calculated as the daily average of the number of active fleets for the period presented. Annualized Adjusted EBITDA per Average Active Fleet is calculated as Adjusted EBITDA annualized, divided by the Average Active Fleets for the same period. See “—Comparison of Non-GAAP Financial Measures” for more information and a reconciliation of EBITDA and Adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP.

20

Results of Operations

Three months ended June 30, 2018, compared to three months ended June 30, 2017

	Three months ended June 30,
Description	2018			2017			Change
	(in thousands)
Revenue	$	628,084		$	346,725		$	281,359
Cost of services, excluding depreciation and amortization shown separately	455,469			267,626			187,843
General and administrative expenses	27,313			20,022			7,291
Depreciation and amortization	30,606			17,521			13,085
Loss (gain) on disposal of assets	485			10			475
Operating income	114,211			41,546			72,665
Interest expense	(3,540		)	(2,511		)	(1,029		)
Net income before income taxes	110,671			39,035			71,636
Income tax expense	15,930			—			15,930
Net income	94,741			39,035			55,706
Less: Net income attributable to Liberty LLC, prior to the Corporate Reorganization	—			39,035			(39,035		)
Less: Net income attributable to noncontrolling interest	45,146			—			45,146
Net income attributable to Liberty Oilfield Services Inc. stockholders	$	49,595		$	—		$	49,595

Revenue

Our revenue increased $281.4 million, or 81.1%, to $628.1 million for the three months ended June 30, 2018 compared to $346.7 million for three months ended June 30, 2017. The increase was due to the combined effect of a 46.9% increase in average active fleets deployed and a 23.3% increase in revenue per average active fleet. Our revenue per average active fleet increased to approximately $29.5 million for the three months ended June 30, 2018 as compared to approximately $23.9 million for the three months ended June 30, 2017, based on 21.3 and 14.5 average active fleets deployed during those respective periods. The increase in revenue per active fleet was due to improved pricing and throughput in conjunction with increased demand for our services.

Cost of Services

Cost of services (excluding depreciation and amortization) increased $187.8 million, or 70.2%, to $455.5 million for the three months ended June 30, 2018 compared to $267.6 million for the three months ended June 30, 2017. The higher expense is due to an increase in services provided and reflects a $129.0 million increase attributable to materials, which was driven by a 56.6% increase in material volumes in the three months ended June 30, 2018 compared to the same period in 2017. Personnel costs increased by $26.2 million, or 53.2%, to support the increased activity, including a 46.9% increase in average active fleets deployed. Additionally, the cost of components used in our repairs and maintenance operations increased by $22.7 million for the three months ended June 30, 2018 as compared to the three months ended June 30, 2017.

General and Administrative Expenses

General and administrative expenses increased by $7.3 million, or 36.4%, to $27.3 million for the three months ended June 30, 2018 compared to $20.0 million for the three months ended June 30, 2017. Payroll and benefits and related office expenses increased approximately $2.5 million and $1.7 million, respectively, in connection with the increase in head count to support our expanded scope of operations and the six fleets deployed during the twelve months ended June 30, 2018. In addition, non-cash stock based compensation expense of $1.1 million was recognized during the three months ended June 30, 2018 compared to $0 during the same period in the prior year.

Depreciation and Amortization

Depreciation and amortization expense increased $13.1 million, or 74.7%, to $30.6 million for the three months ended June 30, 2018 compared to $17.5 million for the three months ended June 30, 2017, due to six additional hydraulic fracturing fleets deployed during the twelve months ended June 30, 2018.

21

Operating Income

We realized operating income of $114.2 million for the three months ended June 30, 2018 compared to $41.5 million for the three months ended June 30, 2017, primarily due to the increased number of hydraulic fracturing fleets deployed and the higher revenue per average active fleet in response to increased demand for our services described above. Generally, our financial results have improved significantly due to the increased drilling and completion activity by E&P companies during the recovery of the oil and gas industry beginning in the third quarter of 2016.

Interest Expense

The increase in interest expense of $1.0 million, or 41.0%, during the three months ended June 30, 2018 compared to the three months ended June 30, 2017 was primarily due to $1.7 million of deferred financing costs written off in connection with the pay down of 35% of the term loan and $0.9 million prepayment penalty assessed in connection with the pay down offset by a $0.8 million decrease in related party interest expense and a $0.8 million decrease in interest expense due to the lower average borrowings outstanding during the three months ended June 30, 2018 compared to the same period in 2017.

Net Income before Tax Expense

We realized net income before tax expense of $110.7 million for the three months ended June 30, 2018 compared to $39.0 million for the three months ended June 30, 2017. The increase in net income is primarily attributable to our expanded scope of operations following the deployment of six additional hydraulic fracturing fleets during the twelve months ended June 30, 2018.

Income Tax Expense

Our operations are taxed at a combined U.S. federal and state effective tax rate of 13.9%. As a pass-through entity prior to the IPO, our Predecessor was subject only to the Texas margin tax at a statutory rate of 1.0% and was not subject to U.S. federal income tax. We recognized $15.9 million of expense for the three months ended June 30, 2018 compared to $0 recognized during the three months ended June 30, 2017. This increase was attributable to our status as a corporation subject to U.S. federal income tax as well as a net increase in operating income, the components of which are discussed above.

Six months endedJune 30, 2018, compared to six months ended June 30, 2017

	Six months ended June 30,
Description	2018			2017			Change
	(in thousands)
Revenue	$	1,123,244		$	599,119		$	524,125
Cost of services, excluding depreciation and amortization shown separately	832,296			479,259			353,037
General and administrative expenses	48,990			37,106			11,884
Depreciation and amortization	58,622			31,667			26,955
Loss (gain) on disposal of assets	565			(33		)	598
Operating income	182,771			51,120			131,651
Interest expense	(10,034		)	(3,963		)	(6,071		)
Net income before income taxes	172,737			47,157			125,580
Income tax expense	24,009			—			24,009
Net income	148,728			47,157			101,571
Less: Net income attributable to Liberty LLC, prior to the Corporate Reorganization	8,705			47,157			(38,452		)
Less: Net income attributable to noncontrolling interest	66,753			—			66,753
Net income attributable to Liberty Oilfield Services Inc. stockholders	$	73,270		$	—		$	73,270

Revenue

Our revenue increased $524.1 million, or 87.5%, to $1,123.2 million for the six months ended June 30, 2018 compared to $599.1 million for six months ended June 30, 2017. The increase was due to the combined effect of a 55.7% increase in average active fleets deployed and a 20.4% increase in revenue per average active fleet. Our revenue per average active fleet increased to approximately $55.1 million for the six months ended June 30, 2018 as compared to approximately $45.7 million for the six

22

months ended June 30, 2017, based on 20.4 and 13.1 average active fleets deployed during those respective periods. The increase in revenue per active fleet was due to improved pricing and throughput in conjunction with increased demand for our services.

Cost of Services

Cost of services (excluding depreciation and amortization) increased $353.0 million, or 73.7%, to $832.3 million for the six months ended June 30, 2018 compared to $479.3 million for the six months ended June 30, 2017. The higher expense is due to an increase in services provided and reflects a $237.8 million increase attributable to materials, which was driven by a 59.1% increase in material volumes in the six months ended June 30, 2018 compared to the same period in 2017. Personnel costs increased by $59.7 million, or 70.0%, to support the increased activity, including a 55.7% increase in average active fleets deployed. Additionally, the cost of components used in our repairs and maintenance operations increased by $36.2 million for the six months ended June 30, 2018 as compared to the six months ended June 30, 2017.

General and Administrative Expenses

General and administrative expenses increased by $11.9 million, or 32.0%, to $49.0 million for the six months ended June 30, 2018 compared to $37.1 million for the six months ended June 30, 2017. Payroll and benefits and related office expenses increased approximately $4.5 million and $3.2 million, respectively, in connection with the increase in head count to support our expanded scope of operations and the six fleets deployed during the twelve months ended June 30, 2018. In addition, non-cash stock based compensation expense of $1.1 million was recognized during the six months ended June 30, 2018 compared to $0 during the same period in the prior year.

Depreciation and Amortization

Depreciation and amortization expense increased $27.0 million, or 85.1%, to $58.6 million for the six months ended June 30, 2018 compared to $31.7 million for the six months ended June 30, 2017, due to six additional hydraulic fracturing fleets deployed during the twelve months ended June 30, 2018.

Operating Income

We realized operating income of $182.8 million for the six months ended June 30, 2018 compared to $51.1 million for the six months ended June 30, 2017, primarily due to the increased number of hydraulic fracturing fleets deployed and the higher revenue per average active fleet in response to increased demand for our services described above. Generally, our financial results have improved significantly due to the increased drilling and completion activity by E&P companies during the recovery of the oil and gas industry beginning in the third quarter of 2016.

Interest Expense

The increase in interest expense of $6.1 million, or 153.2%, during the six months ended June 30, 2018 compared to the six months ended June 30, 2017 was primarily due to $1.7 million of deferred financing costs written off in connection with the pay down of 35% of the term loan and $0.9 million prepayment penalty assessed in connection with the pay down and a $3.5 million increase in interest expense due to higher weighted average interest rate on borrowings outstanding during the six months ended June 30, 2018 compared to the same period in 2017.

Net Income before Tax Expense

We realized net income before tax expense of $172.7 million for the six months ended June 30, 2018 compared to $47.2 million for the six months ended June 30, 2017. The increase in net income is primarily attributable to our expanded scope of operations following the deployment of six additional hydraulic fracturing fleets during the twelve months ended June 30, 2018.

Income Tax Expense

Our operations are taxed at a combined U.S. federal and state effective tax rate of 13.9%. As a pass-through entity prior to the IPO, our Predecessor was subject only to the Texas margin tax at a statutory rate of 1.0% and was not subject to U.S. federal income tax. Subsequent to the IPO, we recognized $24.0 million of expense for the period commencing on January 17, 2018 through June 30, 2018 compared to none recognized during the six months ended June 30, 2017. This increase was attributable to our status as a corporation subject to U.S. federal income tax as well as a net increase in operating income, the components of which are discussed above.

23

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, depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted to eliminate the effects of items such as new fleet or new basin start-up costs, costs of asset acquisition, gain or loss on the disposal of assets, asset impairment charges, bad debt reserves, and non-recurring expenses that management does not consider in assessing ongoing operating 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 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. Additionally, the calculation of Adjusted EBITDA complies with the definition of Consolidated EBITDA and other provisions of our Credit Facilities. See “—Debt Agreements.”

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.

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

EBITDA and Adjusted EBITDA

	Three Months Ended June 30,							Six Months Ended June 30,
Description	2018		2017		Change			2018		2017			Change
	(in thousands)
Net income	$	94,741	$	39,035	$	55,706		$	148,728	$	47,157		$	101,571
Depreciation and amortization	30,606		17,521		13,085			58,622		31,667			26,955
Interest expense	3,540		2,511		1,029			10,034		3,963			6,071
Income tax expense	15,930		—		15,930			24,009		—			24,009
EBITDA	$	144,817	$	59,067	$	85,750		$	241,393	$	82,787		$	158,606
Fleet start-up costs	3,298		4,277		(979		)	6,607		8,889			(2,282		)
Asset acquisition costs	—		1,188		(1,188		)	—		2,542			(2,542		)
Loss (gain) on disposal of assets	485		10		475			565		(33		)	598
Advisory services fees	—		251		(251		)	202		1,045			(843		)
Adjusted EBITDA	$	148,600	$	64,793	$	83,807		$	248,767	$	95,230		$	153,537

EBITDA was $144.8 million for the three months ended June 30, 2018 compared to $59.1 million for the three months ended June 30, 2017. Adjusted EBITDA was $148.6 million for the three months ended June 30, 2018 compared to $64.8 million for the three months ended June 30, 2017. Annualized Adjusted EBITDA per Average Active Fleet was $28.0 million for the three months ended June 30, 2018 compared to $17.9 million for the three months ended June 30, 2017. The increases in EBITDA and Adjusted EBITDA resulted from the increased revenue and other factors described above under the captions Revenue, Cost of Services and General and Administrative Expenses above.

24

EBITDA was $241.4 million for the six months ended June 30, 2018 compared to $82.8 million for the six months ended June 30, 2017. Adjusted EBITDA was $248.8 million for the six months ended June 30, 2018 compared to $95.2 million for the six months ended June 30, 2017. Annualized Adjusted EBITDA per Average Active Fleet was $24.6 million for the six months ended June 30, 2018 compared to $14.7 million for the six months ended June 30, 2017. The increases in EBITDA and Adjusted EBITDA resulted from the increased revenue and other factors described above under the captions Revenue, Cost of Services and General and Administrative Expenses above.

Liquidity and Capital Resources

Overview

Our primary sources of liquidity prior to the IPO were cash flows from operations, capital contributions from our owners and borrowings under our Credit Facilities. 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 $67.0 million to $83.3 million as of June 30, 2018 compared to $16.3 million as of December 31, 2017, primarily attributable to net proceeds from the IPO. Going forward, we intend to finance the majority of our capital expenditures, contractual obligations and working capital needs with proceeds from the IPO and operating cash flows. We believe that our operating cash flow and available borrowings under our Credit Facilities will be sufficient to fund our operations for at least the next twelve months.

Cash Flows

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

	Six Months Ended June 30,
Description	2018			2017			Change
	(in thousands)
Net cash provided by operating activities	$	109,201		$	45,561		$	63,640
Net cash used in investing activities	(137,843		)	(204,887		)	67,044
Net cash provided by financing activities	95,652			148,451			(52,799		)
Net increase in cash and cash equivalents	$	67,010		$	(10,875	)	$	77,885

Analysis of Cash Flow Changes Between the Six Months Ended June 30, 2018 and 2017

Operating Activities. Net cash provided by operating activities was $109.2 million for the six months ended June 30, 2018, compared to $45.6 million for the six months ended June 30, 2017. The $63.6 million increase in cash from operating activities was attributable to a $524.1 million increase in revenues, offset by a $364.9 million increase in cash based operating expenses as well as an increase in funds used to satisfy working capital obligations.

Investing Activities. Net cash used in investing activities was $137.8 million for the six months ended June 30, 2018, compared to $204.9 million for the six months ended June 30, 2017. Capital expenditures, including amounts in Accounts Payable and Accrued Liabilities, were $128.4 million for the six months ended June 30, 2018 compared to $198.7 million for the six months end June 30, 2017. The $67.0 million decrease in net cash used in investing activities was primarily due to the acquisition of Titan Frac Services LLC and other Texas real estate properties during the six months ended June 30, 2017.

Financing Activities. Net cash provided by financing activities was $95.7 million for the six months ended June 30, 2018, compared to $148.5 million for the six months ended June 30, 2017. The $52.8 million decrease in cash provided by financing activities was primarily due to net repayment on debt of $91.5 million and distributions to noncontrolling interest holders of $13.0 million during the six months ended June 30, 2018 compared to net borrowings of $110.0 million and $39.8 million in proceeds from issuance of redeemable common units received during the six months ended June 30, 2017, offset by $198.4 million in net proceeds from the IPO.

ABL Facility

The Company’s ABL Facility provides for a line of credit up to $250.0 million, subject to certain borrowing base limitations based on a percentage of eligible accounts receivable and inventory. As of June 30, 2018, the borrowing base was calculated to be $235.4 million with no amounts drawn and an outstanding letter of credit for $0.3 million, leaving $235.1 million of availability. Borrowings under the ABL Facility bear interest at LIBOR or a base rate, plus an applicable LIBOR

25

margin of 1.5% to 2.0% or base rate margin of 0.5% to 1.0%, as defined in the ABL Facility credit agreement. The ABL Facility is not subject to financial covenants unless liquidity, as defined in the ABL Facility credit agreement, drops below a specified level. Under the ABL Facility, the Company is required to maintain a minimum fixed charge coverage ratio, as defined in the ABL Facility credit agreement, of 1.0 to 1.0 for each period if excess availability is less than 10% of the borrowing base or $12.5 million, whichever is greater. The Company was in compliance with these covenants as of June 30, 2018.

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. As a result of the IPO and Corporate Reorganization, the Company recorded deferred tax assets and liabilities for the difference between the book value of assets and liabilities for financial reporting purposes and those amounts applicable for income tax purposes. Deferred tax assets have been recorded for tax attributes contributed to the Company as part of the reorganization. Deferred tax liabilities of $28.6 million have been recorded in connection with the Liberty LLC Units acquired through the Corporate Reorganization.

The effective combined U.S. federal and state income tax rate applicable to the Company for the six months ended June 30, 2018 was 13.9%. The Company’s effective tax rate is significantly less than the statutory tax rate of 21.0% primarily because no taxes are payable by the Company for the noncontrolling interest’s share of Liberty LLC’s pass through results for federal, state and local income tax reporting. The Company recognized income tax expense of $24.0 million for the six months ended June 30, 2018.

Tax Receivable Agreements

In connection with the IPO, on January 17, 2018, the Company entered into the TRAs with the TRA Holders. The TRAs generally provide for the payment by the Company of 85% of the net cash savings, if any, in U.S. federal, state, and local income tax and franchise tax (computed using simplifying assumptions to address the impact of state and local taxes) that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the IPO as a result, as applicable to each TRA Holder, of (i) certain increases in tax basis that occur as a result of the Company’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s Liberty LLC Units in connection with the IPO or pursuant to the exercise of the Redemption Right or the Company’s Call Right, (ii) any net operating losses available to the Company as a result of the Corporate Reorganization, and (iii) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, any payments the Company makes under the TRAs.

With respect to obligations the Company expects to incur under the TRAs (except in cases where the Company elects to terminate the TRAs early, the TRAs are terminated early due to certain mergers, asset sales, or other changes of control or the Company has available cash but fails to make payments when due), generally the Company may elect to defer payments due under the TRAs if the Company does not have available cash to satisfy its payment obligations under the TRAs or if its contractual obligations limit its ability to make such payments. Any such deferred payments under the TRAs generally will accrue interest. In certain cases, payments under the TRAs may be accelerated and/or significantly exceed the actual benefits, if any, the Company realizes in respect of the tax attributes subject to the TRAs. The Company accounts for amounts payable under the TRAs in accordance with ASC Topic 450, Contingent Consideration.

If the Company experiences a change of control (as defined under the TRAs) or the TRAs otherwise terminate early, the Company’s obligations under the TRAs could have a substantial negative impact on its liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, or other forms of business combinations or changes of control. There can be no assurance that we will be able to finance our obligations under the Tax Receivable Agreements.

Critical Accounting Policies and Estimates

The consolidated financial statements are prepared in accordance with U.S. GAAP, which require us to make estimates and assumptions (see Note 1 to the combined financial statements included in the Annual Report).  We believe that some of our accounting policies involve a higher degree of judgment and complexity than others.  As of December 31, 2017, our critical accounting policies included revenue recognition, estimating the recoverability of accounts receivable, inventory valuation, accounting for income taxes, accounting for long-lived assets, accounting for derivative instruments, and accounting for abnormally low production levels.  These critical accounting policies are discussed more fully in the Annual Report.  

Effective January 1, 2018, the Company adopted Accounting Standard Codification Topic 606-Revenue from Contracts with Customers (see Note 1 to the condensed consolidated and combined financial statements included in this Form 10-Q). There have been no other changes in our evaluation of our critical accounting policies since December 31, 2017.

26

Off Balance Sheet Arrangements

We have no material off balance sheet arrangements as of June 30, 2018, except for the operating leases and purchase commitments under supply agreements as disclosed above under “Item 1. Financial Statements—Note 12—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.

27

Item 3. Quantitative and Qualitative Disclosure about Market Risk

Interest Rate Risk

At June 30, 2018, we had $113.0 million of debt outstanding, with a weighted average interest rate of 9.7%. Interest is calculated under the terms of our Credit Facilities based on our selection, from time to time, of one of the index rates available to us plus an applicable margin that varies based on certain factors. Assuming no change in the amount outstanding, the impact on interest expense of a 1% increase or decrease in the weighted average interest rate would be approximately $1.1 million per year. We do not currently have or intend to enter into any derivative arrangements to protect against fluctuations in interest rates applicable to our outstanding indebtedness.

Item 4. Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2018. The evaluation included certain internal control areas in which we have made and are continuing to make changes to improve and enhance controls. Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s (the “SEC”) rules and forms and that such information is accumulated and communicated to management, including the principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Based on such evaluation, our principal executive officer and principal financial officer concluded that, as of June 30, 2018, our disclosure controls and procedures were effective, at the reasonable assurance level. Any controls and procedures, no matter how well designed and operated can only provide reasonable assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of all possible controls and procedures.

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended June 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

28

PART II: OTHER INFORMATION

Item 1. Legal Proceeding

On February 23, 2017, SandBox filed suit in the Houston Division of the U.S. District Court for the Southern District of Texas against Proppant Express Investments, LLC, PropX, and LOS. LOS is party to a services agreement with PropX. SandBox alleges that LOS willfully infringes multiple U.S. patents and has breached an agreement between SandBox and LOS by “directing, controlling, and funding” IPR requests before the USPTO. In July 2018, SandBox requested permission from the court to allege additional breach of contract claims against LOS, including alleged breaches of a confidentiality agreement and an exclusive purchasing covenant.SandBox seeks both monetary and injunctive relief from the court, as well as attorney’s fees and costs. We intend to vigorously defend ourselves against the claims brought by SandBox.

We are named defendants in certain lawsuits, investigations and claims arising in the ordinary course of conducting our business, including certain environmental claims and employee-related matters, and we expect that we will be named defendants in similar lawsuits, investigations and claims in the future. While the outcome of these lawsuits, investigations and claims cannot be predicted with certainty, we do not expect these matters to have a material adverse impact on our business, results of operations, cash flows or financial condition. We have not assumed any liabilities arising out of these existing lawsuits, investigations and claims.

Item 1A. Risk Factors

In addition to the other information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in the Annual Report and the risk factors and other cautionary statements contained in our other SEC filings, which could materially affect our businesses, financial condition or future results. There have been no material changes in our risk factors from those described in our Annual Report or our other SEC filings.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.    

Item 5. Other Information

None.

29

Item 6. Exhibits

The exhibits required to be filed by Item 6 are set forth in the Exhibit Index included below.

INDEX TO EXHIBITS

Exhibit Number		Description
2.1		Master Reorganization Agreement, dated as of January 11, 2018, by and among Liberty Oilfield Services Inc., Liberty Oilfield Services Holdings LLC, Liberty Oilfield Services New HoldCo LLC, and the other parties named therein (1)
3.1		Amended and Restated Certificate of Incorporation of Liberty Oilfield Services Inc. (1)
3.2		Amended and Restated Bylaws of Liberty Oilfield Services Inc. (2)
4.1		Stockholder Agreement, dated as of January 17, 2018, by and among Liberty Oilfield Services Inc., R/C IV Liberty Oilfield Services Holdings, L.P., R/C Energy IV Direct Partnership, L.P., and other parties names therein (1)
4.2		Liberty Oilfield Services 401(k) Savings Plan (3)
10.1		Form of Restricted Stock Unit Grant Notice and Award Agreement under the Long Term Incentive Plan (4)†
31.1		Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) *
31.2		Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) *
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **
101.INS		XBRL Instance Document *
101.SCH		XBRL Taxonomy Extension Schema Document *
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document *
101.LAB		XBRL Taxonomy Extension Label Linkbase Document *
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document *
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document *
(1)	Incorporated by reference to the registrant’s Current Report on Form 8-K, filed on January 18, 2018.
(2)	Incorporated by reference to the registrant’s Amendment No. 1 to the Current Report on Form 8-K/A, filed on January 22, 2018.
(3)	Incorporated by reference to the registrant’s Registration Statement on Form S-8, filed on June 28, 2018.
(4)	Incorporated by reference to the registrant’s Quarterly Report on Form 10-Q, filed on May 10, 2018.
*	Filed herewith.
**	Furnished herewith.
†	Denotes a management contract or compensatory plan or arrangement.

30

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

			Signature
			/s/ Christopher A. Wright
Date:	August 3, 2018	By:	Christopher A. Wright
			Chief Executive Officer (Principal Executive Officer)
			/s/ Michael Stock
Date:	August 3, 2018	By:	Michael Stock
			Chief Financial Officer (Principal Financial Officer)
			/s/ Ryan T. Gosney
Date:	August 3, 2018	By:	Ryan T. Gosney
			Chief Accounting Officer (Principal Accounting Officer)

31

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Christopher A. Wright, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Liberty Oilfield Services Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2018

By:/s/ Christopher A. Wright

Christopher A. Wright

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)

OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Michael Stock, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Liberty Oilfield Services Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2018

By:/s/ Michael Stock

Michael Stock

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER UNDER

18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Liberty Oilfield Services Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (“Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 3, 2018

By:/s/ Christopher A. Wright

Christopher A. Wright

Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER UNDER

18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), the undersigned officer of Liberty Oilfield Services Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (“Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 3, 2018

By:/s/ Michael Stock

Michael Stock

Chief Financial Officer

(Principal Financial Officer)

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 31, 2018
Class of Stock [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Trading Symbol	LBRT
Entity Registrant Name	Liberty Oilfield Services Inc.
Entity Central Index Key	0001694028
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Shares of Class A Common Stock
Class of Stock [Line Items]
Entity Common Stock, Shares Outstanding		69,958,113
Shares of Class B Common Stock
Class of Stock [Line Items]
Entity Common Stock, Shares Outstanding		48,207,372

XML

Condensed Consolidated and Combined Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 83,331	$ 16,321
Accounts receivable—trade	221,464	195,961
Accounts receivable—related party	4,106	3,984
Unbilled revenue	118,280	58,784
Unbilled revenue—related party	0	59
Inventories	62,374	55,524
Prepaid and other current assets	29,237	21,396
Total current assets	518,792	352,029
Property and equipment, net	561,014	494,776
Other assets	11,751	5,298
Total assets	1,091,557	852,103
Current liabilities:
Accounts payable	93,288	66,846
Accrued liabilities:
Accrued vendor invoices	64,575	78,646
Operational accruals	13,276	32,208
Accrued salaries and benefits	22,326	24,990
Deferred revenue	3,844	9,231
Accrued interest and other	8,013	6,573
Accrued liabilities—related party	0	2,000
Current portion of long-term debt, net of discount of $1,375 and $1,739, respectively	375	11
Total current liabilities	205,697	220,505
Long-term debt, net of discount of $4,448 and $6,466, respectively, less current portion	106,830	196,346
Deferred tax liability	37,243	0
Payable pursuant to tax receivable agreement	2,291	0
Total liabilities	352,061	416,851
Commitments & contingencies (Note 12)
Redeemable common units	0	42,486
Members’ equity:
Members’ equity	0	392,766
Stockholders’ equity:
Preferred Stock, $0.01 par value, 10,000 shares authorized and none issued and outstanding	0	0
Common Stock:
Additional paid in capital	349,488	0
Retained earnings	73,270	0
Total stockholders’ equity	423,940	0
Noncontrolling interest	315,556	0
Total equity	739,496	392,766
Total liabilities and equity	1,091,557	852,103
Class A, $0.01 par value, 400,000,000 shares authorized and 69,958,113 issued and outstanding as of June 30, 2018 and none issued and outstanding as of December 31, 2017
Common Stock:
Common stock, par value $0.01	700	0
Class B, $0.01 par value, 400,000,000 shares authorized and 48,207,372 issued and outstanding as of June 30, 2018 and none issued and outstanding as of December 31, 2017
Common Stock:
Common stock, par value $0.01	$ 482	$ 0

XML

Condensed Consolidated and Combined Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2018	Jan. 17, 2018	Dec. 31, 2017
Current portion of long-term debt, discount	$ 1,375		$ 1,739
Long-term debt, discount	$ 4,448		$ 6,466
Preferred stock, par value (in dollars per share)	$ 0.01		$ 0.01
Preferred stock, shares authorized (in shares)	10,000		10,000
Preferred stock, shares issued (in shares)	0		0
Preferred stock, shares outstanding (in shares)	0		0
Shares of Class A Common Stock
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0
Common stock, shares authorized (in shares)	400,000,000		0
Common stock, shares issued (in shares)	69,958,113		0
Common stock, shares outstanding (in shares)	69,958,113	69,975,174	0
Shares of Class B Common Stock
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0
Common stock, shares authorized (in shares)	400,000,000		0
Common stock, shares issued (in shares)	48,207,372	48,207,372	0
Common stock, shares outstanding (in shares)	48,207,372	48,207,372	0

XML

Condensed Consolidated and Combined Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenue:
Revenue	$ 628,084	$ 334,740	$ 1,119,182	$ 583,958
Revenue—related parties	0	11,985	4,062	15,161
Total revenue	628,084	346,725	1,123,244	599,119
Operating costs and expenses:
Cost of services (exclusive of depreciation and amortization shown separately below)	455,469	267,626	832,296	479,259
General and administrative	27,313	20,022	48,990	37,106
Depreciation and amortization	30,606	17,521	58,622	31,667
Loss (gain) on disposal of assets	485	10	565	(33)
Total operating costs and expenses	513,873	305,179	940,473	547,999
Operating income	114,211	41,546	182,771	51,120
Other expense:
Interest expense	(3,540)	(1,750)	(10,034)	(3,202)
Interest expense related party	0	(761)	0	(761)
Total interest expense	(3,540)	(2,511)	(10,034)	(3,963)
Net income before income taxes	110,671	39,035	172,737	47,157
Income tax expense	15,930	0	24,009	0
Net income	94,741	39,035	148,728	47,157
Less: Net income attributable to Predecessor, prior to Corporate Reorganization	0	39,035	8,705	47,157
Less: Net income attributable to noncontrolling interests	45,146	0	66,753	0
Net income attributable to Liberty Oilfield Services Inc. stockholders	$ 49,595	$ 0	$ 73,270	$ 0
Net income attributable to Liberty Oilfield Services Inc. stockholders per common share:
Basic (in dollars per share)	$ 0.72		$ 1.06
Diluted (in dollars per share)	$ 0.71		$ 1.05
Weighted average common shares outstanding:
Basic (in shares)	69,020,000		68,977,000
Diluted (in shares)	118,638,000		118,407,000

XML

Condensed Consolidated and Combined Statement of Changes in Equity (Unaudited) - USD ($) $ in Thousands	Total	Members’ Equity	Additional Paid in Capital	Retained Earnings	Total Stockholders’ equity	Noncontrolling Interest	Shares of Class A Common Stock	Shares of Class A Common Stock Common Stock	Shares of Class B Common Stock	Shares of Class B Common Stock Common Stock
Beginning Balance at Dec. 31, 2017	$ 392,766	$ 392,766
Beginning balance (in shares) at Dec. 31, 2017							0		0
Beginning balance at Dec. 31, 2017	392,766
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Return on redeemable common units	(149)	(149)
Net income (loss)	8,705	8,705
Ending Balance at Jan. 17, 2018		401,322
Ending balance (in shares) at Jan. 17, 2018							69,975,174	0	48,207,372	0
Ending balance at Jan. 17, 2018	401,322		$ 0	$ 0	$ 0	$ 0		$ 0		$ 0
Beginning Balance at Dec. 31, 2017	392,766	392,766
Beginning balance (in shares) at Dec. 31, 2017							0		0
Beginning balance at Dec. 31, 2017	392,766
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	73,270
Ending Balance at Jun. 30, 2018	0	0
Ending balance (in shares) at Jun. 30, 2018							69,958,113	69,958,000	48,207,372	48,207,000
Ending balance at Jun. 30, 2018	739,496		349,488	73,270	423,940	315,556		$ 700		$ 482
Beginning Balance at Jan. 17, 2018		401,322
Beginning balance (in shares) at Jan. 17, 2018							69,975,174	0	48,207,372	0
Beginning balance at Jan. 17, 2018	401,322		0	0	0	0		$ 0		$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exchange of Liberty LLC Units for Class A Common Stock and Class B Common Stock and extinguishment of Redeemable Common Units	46,544	(401,322)	446,824	0	447,866	0		$ 560		$ 482
Exchange of Liberty LLC Units for Class A Common Stock and Class B Common Stock (shares)								55,986,000		48,207,000
Net deferred tax liability due to corporate reorganization	(28,620)		(28,620)		(28,620)
Issuance of Class A Common Stock, net of underwriter discount and offering costs	220,260		220,117		220,260			$ 143
Issuance of Class A Common Stock, net of underwriter discount and offering costs (shares)								14,340,000
Redemption of Legacy Ownership, net of underwriter discount	(25,897)		(25,881)		(25,897)			$ (16)
Redemption of Legacy Ownership, net of underwriting discount (shares)								(1,609,000)
Issuance of restricted stock	0		(13)		0			$ 13
Issuance of restricted stock (shares)								1,258,000
Liability due to tax receivable agreement	(2,291)		(2,291)		(2,291)
Initial allocation of noncontrolling interest of Liberty LLC effective on the date of the IPO	0		(261,844)		(261,844)	261,844
Distributions paid to noncontrolling interest unitholders	(13,041)					(13,041)
Restricted stock forfeited	0				0			$ 0
Stock based compensation expense	1,196		1,196		1,196
Restricted stock forfeited (shares)								(17,000)
Net income (loss)	140,023			73,270	73,270	66,753
Ending Balance at Jun. 30, 2018	0	$ 0
Ending balance (in shares) at Jun. 30, 2018							69,958,113	69,958,000	48,207,372	48,207,000
Ending balance at Jun. 30, 2018	$ 739,496		$ 349,488	$ 73,270	$ 423,940	$ 315,556		$ 700		$ 482

XML

Condensed Consolidated and Combined Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net income	$ 148,728	$ 47,157
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	58,622	31,667
Loss (gain) on disposal of assets	565	(33)
Amortization of debt issuance costs	2,868	280
Inventory write-down	3,389	259
Stock based compensation expense	1,196	0
Deferred tax expense	8,447	0
Changes in operating assets and liabilities:
Accounts receivable	(25,503)	(84,500)
Accounts receivable—related party	(122)	(2,216)
Unbilled revenue	(59,496)	(23,543)
Unbilled revenue—related party	59	2,487
Inventories	(10,239)	(10,891)
Prepaid and other current assets	(24,088)	(11,984)
Accounts payable and accrued liabilities	4,775	95,834
Accounts payable and accrued liabilities—related party	0	1,044
Net cash provided by operating activities	109,201	45,561
Cash flows from investing activities:
Capital expenditures	(140,861)	(205,151)
Proceeds from disposal of assets	3,018	264
Net cash used in investing activities	(137,843)	(204,887)
Cash flows from financing activities:
Proceeds from issuance of common stock, net of underwriter discount	230,174	0
Redemption of LLC Units from Legacy Owners	(25,897)	0
Repayments of borrowings on term loan	(61,535)	(6,000)
Proceeds from borrowings on line-of-credit	0	56,000
Repayments of borrowings on line-of-credit	(30,000)	0
Proceeds from Liberty Oilfield Services Holdings LLC	2,115	0
Proceeds from related party bridge loans	0	60,000
Payments on capital lease obligations	0	(119)
Payments of debt issuance costs	(282)	(1,224)
Proceeds from issuance of redeemable common units	0	39,794
Distributions paid to noncontrolling interest unitholders	(13,041)	0
Payment of deferred equity offering costs	(5,882)	0
Net cash provided by financing activities	95,652	148,451
Net increase (decrease) in cash and cash equivalents	67,010	(10,875)
Cash and cash equivalents—beginning of period	16,321	11,484
Cash and cash equivalents—end of period	83,331	609
Supplemental disclosure of cash flow information:
Cash paid for income taxes	15,026	0
Cash paid for interest	7,555	3,438
Non-cash investing and financing activities:
Capital expenditures included in accounts payable and accrued liabilities	6,269	23,280
Related party bridge loans exchanged for Redeemable Class 2 Common Units	$ 0	$ 60,761

XML

Organization and Basis of Presentation

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

Organization and Basis of Presentation

Organization

Liberty Oilfield Services Inc. (the “Company”) was incorporated as a Delaware corporation on December 21, 2016, to become a holding corporation for Liberty Oilfield Services New HoldCo LLC (“Liberty LLC”) and its subsidiaries upon completion of a corporate reorganization (as detailed below, the “Corporate Reorganization”) and planned initial public offering of the Company (“IPO”). The Company has no material assets other than its ownership in Liberty LLC.

Prior to the Corporate Reorganization, Liberty Oilfield Services Holdings LLC (“Liberty Holdings”) wholly owned Liberty Oilfield Services LLC (“LOS”) and LOS Acquisition CO I LLC (“ACQI” and, together with LOS, the “Predecessor”), which includes the assets and liabilities of LOS Odessa RE Investments, LLC (“Odessa”) and LOS Cibolo RE Investments, LLC (“Cibolo”). Following the Corporate Reorganization, Liberty LLC wholly owns the Predecessor. Effective March 22, 2018 the assets of ACQI were contributed into LOS and ACQI was dissolved.

The Company, together with its subsidiaries, is a multi-basin provider of hydraulic fracturing services, with a focus on deploying the latest technologies in the technically demanding oil and gas reservoirs in which it operates, principally in North Dakota, Colorado, Wyoming and Texas.

Corporate Reorganization

In connection with the IPO, the Company completed a series of organizational transactions, including the following:

• Liberty Holdings contributed all of its assets to Liberty LLC in exchange for Liberty LLC Units (as defined below);

• Liberty Holdings liquidated and distributed to its then-existing owners (the “Legacy Owners”) Liberty LLC Units pursuant to the terms of the limited liability company agreement of Liberty Holdings and the Master Reorganization Agreement dated as of January 11, 2018, by and among the Company, Liberty Holdings, Liberty LLC, and the other parties named therein (the “Master Reorganization Agreement”);

• Certain of the Legacy Owners directly or indirectly contributed all or a portion of their Liberty LLC Units to the Company in exchange for 55,685,027 shares of our Class A common stock, par value $0.01 per share (the “Class A Common Stock”), and 1,258,514 restricted shares of Class A Common Stock. Subsequent to the initial exchange, 1,609,122 shares of Class A Common Stock were redeemed for an aggregate price of $25.9 million, upon the exercise of the underwriters’ overallotment option;

• the Company issued, at par, the Legacy Owners that continued to own Liberty LLC Units (the “Liberty Unit Holders”) an aggregate amount of 48,207,372 shares of our Class B common stock, par value $0.01 per share (the “Class B Common Stock”); and

• the Company contributed the net proceeds it received from the IPO to Liberty LLC in exchange for additional Liberty LLC Units such that the Company holds a total number of Liberty LLC Units equal to the number of shares of Class A Common Stock outstanding following the IPO.

Initial Public Offering

On January 17, 2018 the Company completed its IPO of 14,640,755 shares of its Class A Common Stock at a public offering price of $17.00 per share, of which 14,340,214 shares were offered by the Company and 300,541 were offered by the selling shareholder. The Company received $220.3 million net proceeds from the IPO, after deducting approximately $13.4 million in underwriting discounts and commissions and $10.1 million of other offering costs. The Company did not receive any proceeds from the sale of the shares of Class A Common Stock by the selling shareholder. The Company used $25.9 million of net proceeds to redeem ownership interests in Liberty LLC from the Legacy Owners. The Company contributed the remaining net proceeds to Liberty LLC in exchange for units in Liberty LLC (the “Liberty LLC Units”). Liberty LLC used a portion of these net proceeds (i) to repay outstanding borrowings and accrued interest under the Predecessor’s ABL Facility (as defined herein), totaling approximately $30.1 million, (ii) to repay 35% of the Predecessor’s outstanding borrowings, accrued interest and prepayment premium under the Term Loan Facility (as defined herein), totaling approximately $62.5 million and (iii) for general corporate purposes, including repayment of additional indebtedness and funding a portion of 2018 and other future capital expenditures. As of June 30, 2018, the Company owns 59.2% of Liberty LLC.

Basis of Presentation

The accompanying unaudited condensed consolidated and combined financial statements were prepared using generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read together with the annual financial statements included in the 2017 Annual Report on Form 10-K.

The accompanying unaudited condensed consolidated and combined financial statements and related notes present the consolidated financial position, results of operations, cash flows, and equity of the Company as of and for the three and six months ended June 30, 2018 and the combined financial position, results of operations, and cash flows of the Predecessor as of December 31, 2017 and for the three and six months ended June 30, 2017. The interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim period. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results of operations expected for the entire fiscal year ended December 31, 2018.

All intercompany amounts have been eliminated in the presentation of these unaudited condensed consolidated and combined financial statements. Comprehensive income is not reported due to the absence of items of other comprehensive income or loss during the periods presented. The condensed consolidated and combined financial statements include financial data at historical cost as the contribution of assets is considered to be a reorganization of entities under common control. The condensed consolidated and combined financial statements may not be indicative of the actual level of assets, liabilities and costs that would have been incurred by the Predecessor if it had operated as an independent, publicly-traded company during the periods prior to the IPO or of the costs expected to be incurred in the future. In the opinion of management, the adjustments necessary for a fair presentation of the combined financial statements in accordance with GAAP have been made. Such adjustments are of a normal recurring nature.

The unaudited condensed consolidated and combined financial statements for periods prior to January 17, 2018, reflect the historical results of Predecessor. The unaudited condensed consolidated financial statements include the amounts of the Company and all majority owned subsidiaries where the Company has the ability to exercise control.

XML

Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Revenue Recognition

Effective January 1, 2018, the Company adopted a comprehensive new revenue recognition standard, Accounting Standard Codification (“ASC”) Topic 606-Revenue from Contracts with Customers. The details of the significant changes to accounting policies resulting from the adoption of the new standard are set out below. The Company adopted the standard using a modified retrospective method; accordingly, the comparative information for the three and six months ended June 30, 2017 has not been adjusted and continues to be reported under the previous revenue standard. The adoption of this standard did not have a material impact to the condensed consolidated financial position, reported revenue, results of operations or cash flows as of and for the three and six months ended June 30, 2018. 

Under the new standard, revenue recognition is based on the transfer of control, or our customer’s ability to benefit from our services and products in an amount that reflects the consideration expected to be received in exchange for those services and products. In recognizing revenue for services and products, the transaction price is determined from sales orders or contracts with customers. Revenue is recognized at the completion of each fracturing stage, and in most cases the price at the end of each stage is fixed, however, in limited circumstances contracts may contain variable consideration.

Variable consideration typically may relate to discounts, price concessions and incentives. We estimate variable consideration based on the amount of consideration we expect to receive. The Company accrues revenue on an ongoing basis to reflect updated information for variable consideration as performance obligations are met.

The Company also assesses customers’ ability and intention to pay, which is based on a variety of factors including historical payment experience and financial condition. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 45 days.

From time to time, the Company may require partial payment in advance from new customers to secure credit or from existing customers in order to secure additional hydraulic fracturing services. Initially, such payments are recorded in the accompanying condensed consolidated and combined financial statements as deferred revenue, and upon performance of the agreed services, the Company recognizes revenue consistent with its revenue recognition policy described above. As of June 30, 2018, the Company had $3.8 million recorded as deferred revenue related to the unearned portion of a prepayment from an existing customer to secure additional services from a new fleet by the end of 2017. The new fleet commenced services in December 2017, and the Company applies the prepayment in accordance with the customer agreement as services are performed. During the three and six months ended June 30, 2018, the Company recognized $2.9 million and $5.4 million of the prepayment to revenue, respectively.

Fleet Start-up Costs

The Company incurs start-up costs to commission a new fleet or district. These costs include hiring and training of personnel, and acquisition of consumable parts and tools. Start-up costs are expensed as incurred, and are reflected in general and administrative expenses in the combined statement of operations. Start-up costs for the three and six months ended June 30, 2018 were $3.3 million and $6.6 million, respectively, related to one and three new fleets deployed during each respective period. Start-up costs for the three and six months ended June 30, 2017 were $4.3 million and $8.9 million, respectively, related to four and six new fleets deployed during each respective period. The total amount of start-up costs incurred for the commissioning of each new fleet depends primarily on the number and timing of hiring additional personnel to staff such fleets, and such costs may not be entirely incurred in the same period as the fleet is deployed.

The terms and conditions of the Credit Facilities, defined herein, between the Company and its lenders provides for the add-back of costs or expenses incurred in connection with the acquisition, deployment and opening of any new hydraulic fracturing fleet or district in the computation of certain financial covenants. (See Note 5).

Recently Adopted Accounting Standards

In May 2014 the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. This ASU sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity is required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. Additional disclosures are required to describe the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The Company adopted this standard on January 1, 2018 using the modified retrospective method. The Company did not record a cumulative effect adjustment to the opening balance of retained earnings, as no adjustment was necessary. The adoption of this standard did not impact the Company’s reported revenue, net income or cash flows.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” which requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The adoption of ASU 2016-01 did not have a material impact on the condensed consolidated and combined financial statements of the Company.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which provides guidance on eight different issues, intended to reduce diversity in practice on how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The adoption of ASU 2016-15 did not have a material impact on the condensed consolidated and combined financial statements of the Company.

In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory,” which requires entities to recognize the tax consequences of intercompany asset transfers in the period in which the transfer takes place, with the exception of inventory transfers. The adoption of ASU 2016-16 did not have a material impact on the condensed consolidated and combined financial statements of the Company.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which provides guidance to increase clarity and reduce both diversity in practice and cost and complexity when applying the existing accounting guidance on changes to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 require an entity to account for the effects of a modification unless all the following conditions are met: (i) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; (ii) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (iii) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The guidance in ASU 2017-09 is applied prospectively. The amendments in ASU 2017-09 are effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company’s adoption of this guidance did not materially impact its condensed consolidated and combined financial statements.

Recently Issued Accounting Standards

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a purchase financed by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less may be accounted for similarly to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 is expected to impact the Company’s consolidated and combined financial statements as the Company has certain operating and real property lease arrangements for which it is the lessee. The standard is effective on January 1, 2019, with early adoption permitted. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated and combined financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which is effective for fiscal years and interim periods within fiscal years beginning after December 15, 2019, with a modified-retrospective approach to be used for implementation. ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. Specifically, this new guidance requires using a forward looking, expected loss model for trade and other receivables, held-to-maturity debt securities, loans and other instruments. This will replace the currently used model and may result in an earlier recognition of allowance for losses. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated and combined financial statements.

XML

Inventories

6 Months Ended

Jun. 30, 2018

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consist of the following:

	June 30,		December 31,
($ in thousands)	2018		2017
Proppants	$	32,588	$	30,523
Chemicals	10,731		10,660
Maintenance parts	19,055		14,341
	$	62,374	$	55,524

As of June 30, 2018, the lower of cost or net realizable value analysis resulted in the Company recording a write-down to inventory carrying values of $3.4 million, included as a component in cost of services in the condensed consolidated statements of income for the three and six month periods ended June 30, 2018.

XML

Property and Equipment

6 Months Ended

Jun. 30, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

Property and equipment consist of the following:

	Estimated useful lives (in years)	June 30,			December 31,
($ in thousands)		2018			2017
Land	N/A	$	5,400		$	4,495
Field services equipment	2-7	684,397			572,096
Vehicles	4-7	60,500			60,815
Buildings and facilities	5-30	26,917			24,260
Office equipment, furniture, and software	2-7	6,173			5,879
		783,387			667,545
Less accumulated depreciation and amortization		(255,548		)	(198,453		)
		527,839			469,092
Construction in-progress	N/A	33,175			25,684
		$	561,014		$	494,776

Depreciation expense for the three months ended June 30, 2018 and 2017 was $30.6 million and $17.5 million, respectively. During the six months ended June 30, 2018 and 2017, the Company recognized depreciation expense of $58.6 million and $31.7 million, respectively.

XML

Debt

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Debt

Debt

Debt consists of the following:

	June 30,			December 31,
($ in thousands)	2018			2017
Term Loan Outstanding	$	113,028		$	174,562
Revolving Line of Credit	—			30,000
Deferred financing costs and original issue discount	(5,823		)	(8,205		)
Total debt, net of deferred financing costs and original issue discount	$	107,205		$	196,357
Current portion of long-term debt, net of discount	$	375		$	11
Long-term debt, net of discount and current portion	106,830			196,346
	$	107,205		$	196,357

On September 19, 2017, the Company entered into two new credit agreements for a revolving line of credit up to $250.0 million (the “ABL Facility”) and a $175.0 million term loan (the “Term Loan Facility”, and together with the ABL Facility the “Credit Facilities”). Following is a description of the ABL Facility and the Term Loan Facility.

ABL Facility

Under the terms of the ABL Facility, up to $250.0 million may be borrowed, subject to certain borrowing base limitations based on a percentage of eligible accounts receivable and inventory. As of June 30, 2018, the borrowing base was calculated to be $235.4 million, and the Company had no borrowings outstanding, except for a letter of credit in the amount of $0.3 million, with $235.1 million of remaining availability. Borrowings under the ABL Facility bear interest at LIBOR or a base rate, plus an applicable LIBOR margin of 1.5% to 2.0% or base rate margin of 0.5% to 1.0%, as defined in the ABL Facility credit agreement. The unused commitment is subject to an unused commitment fee of 0.375% to 0.5%. Interest and fees are payable in arrears at the end of each month, or, in the case of LIBOR loans, at the end of each interest period. The ABL Facility matures on the earlier of (i) September 19, 2022 and (ii) to the extent the debt under the Term Loan Facility remains outstanding, 90 days prior to the final maturity of the Term Loan Facility, which matures on September 19, 2022. Borrowings under the ABL Facility are collateralized by accounts receivable and inventory, and further secured by the Company, Liberty LLC and R/C IV Non-U.S. LOS Corp., a Delaware corporation and a subsidiary of the Company, as parent guarantors.

Term Loan Facility

The Term Loan Facility provides for a $175.0 million term loan, of which $113.0 million remained outstanding as of June 30, 2018. Amounts outstanding bear interest at LIBOR or a base rate, plus an applicable margin of 7.625% or 6.625%, respectively, and the weighted average rate on borrowings was 9.7% as of June 30, 2018. The Company is required to make quarterly principal payments of 1% per annum of the initial principal balance, commencing on December 31, 2017, with final payment due at maturity on September 19, 2022. The Term Loan Facility is collateralized by the fixed assets of LOS and its subsidiaries, and is further secured by the Company, Liberty LLC and R/C IV Non-U.S. LOS Corp., a Delaware corporation and a subsidiary of the Company, as parent guarantors.

The Credit Facilities include certain non-financial covenants, including but not limited to restrictions on incurring additional debt and certain distributions. Moreover, the ability of the Company to incur additional debt and to make distributions is dependent on maintaining a maximum leverage ratio. The Term Loan Facility requires mandatory prepayments upon certain dispositions of property or issuance of other indebtedness, as defined, and annually a percentage of excess cash flow (25% to 50%, depending on leverage ratio, of consolidated net income less capital expenditures and other permitted payments, commencing with the year ending December 31, 2018). Certain mandatory prepayments and optional prepayments are subject to a prepayment premium of 3% of the prepaid principal declining annually to 1% during the first three years of the term of the Term Loan Facility.

The Credit Facilities are not subject to financial covenants unless liquidity, as defined in the respective credit agreements, drops below a specified level. Under the ABL Facility, the Company is required to maintain a minimum fixed charge coverage ratio, as defined in the credit agreement governing the ABL Credit Facility, of 1.0 to 1.0 for each period if excess availability is less than 10% of the borrowing base or $12.5 million, whichever is greater. Under the Term Loan Facility, the Company is required to maintain a minimum fixed charge coverage ratio, as defined, of 1.2 to 1.0 for each trailing twelve-month period if the Company’s liquidity, as defined, is less than $25.0 million for at least five consecutive business days.

The Company was in compliance with these covenants as of June 30, 2018.

Maturities of debt are as follows:

($ in thousands)
Year Ending June 30,
2019	$	1,750
2020	2,188
2021	1,750
2022	1,312
2023	106,028
	$	113,028

XML

Redeemable Common Units

6 Months Ended

Jun. 30, 2018

Temporary Equity Disclosure [Abstract]

Redeemable Common Units

Redeemable Common Units

During February 2017, ACQI received $39.8 million in cash from Liberty Holdings in exchange for 40,000,000 redeemable common units of ACQI which accrue a return of 8% per annum (the “Redeemable Common Units”). The Redeemable Common Units were redeemable at the option of the holder on the later of (A) the earlier of an initial public offering or March 23, 2020 and (B) the second business day after all principal and interest outstanding under the ABL Facility have been paid in full and commitments thereunder are terminated. In accordance with ASC 505, “Equity”, due to their conditional redemption feature, the Redeemable Common Units were classified as temporary equity in the accompanying combined balance sheet as of December 31, 2017.

The Redeemable Common Units were deemed extinguished and satisfied in full in connection with the Corporate Reorganization (see Note 1).

XML

Fair Value Measurements and Financial Instruments

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements and Financial Instruments

Fair Value Measurements and Financial Instruments

The fair values of the Company’s assets and liabilities represent the amounts that would be received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction at the reporting date. These fair value measurements maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company’s own judgments about the assumptions that market participants would use in pricing the asset or liability. The Company discloses the fair values of its assets and liabilities according to the quality of valuation inputs under the following hierarchy:

• Level 1 Inputs: Quoted prices (unadjusted) in an active market for identical assets or liabilities.

• Level 2 Inputs: Inputs other than quoted prices that are directly or indirectly observable.

• Level 3 Inputs: Unobservable inputs that are significant to the fair value of assets or liabilities.

The classification of an asset or liability is based on the lowest level of input significant to its fair value. Those that are initially classified as Level 3 are subsequently reported as Level 2 when the fair value derived from unobservable inputs is inconsequential to the overall fair value, or if corroborating market data becomes available. Assets and liabilities that are initially reported as Level 2 are subsequently reported as Level 3 if corroborating market data is no longer available. Transfers occur at the end of the reporting period. There were no transfers into or out of Levels 1, 2 and 3 during the six months ended June 30, 2018 and 2017.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, long-term debt, and capital lease obligations. These financial instruments do not require disclosure by level. The carrying values of all the Company’s financial instruments included in the accompanying balance sheets approximated or equaled their fair values at June 30, 2018 and December 31, 2017.

• The carrying values of cash and cash equivalents, accounts receivable and accounts payable (including accrued liabilities) approximated fair value at June 30, 2018 and December 31, 2017, due to their short-term nature.

• The carrying value of amounts outstanding under long-term debt agreements with variable rates approximated fair value at June 30, 2018 and December 31, 2017, as the effective interest rates approximated market rates.

Nonfinancial assets

The Company estimates fair value to perform impairment tests as required on long-lived assets. The inputs used to determine such fair value are primarily based upon internally developed cash flow models and would generally be classified within Level 3 in the event that such assets were required to be measured and recorded at fair value within the combined financial statements. There were no such measurements required as of June 30, 2018 and December 31, 2017.

Credit Risk

The Company’s financial instruments exposed to concentrations of credit risk consist primarily of cash and cash equivalents, and trade receivables.

The Company’s cash balances on deposit with financial institutions total $83.3 million and $16.3 million as of June 30, 2018 and December 31, 2017, respectively, which exceeded FDIC insured limits. The Company regularly monitors these institutions’ financial condition.

The majority of the Company’s customers have stated payment terms of 45 days or less. As of June 30, 2018 and December 31, 2017, one customer accounted for 16% and 22% of total accounts receivable and unbilled revenue, respectively. The Company mitigates the associated credit risk by performing credit evaluations and monitoring the payment patterns of its customers. During the three months ended June 30, 2018 and 2017, one customer accounted for 15% and 28% of total revenue, respectively. During the six months ended June 30, 2018 and 2017, one customer accounted for 16% and 30% of total revenue, respectively.

As of June 30, 2018 and December 31, 2017, the Company had no provision for doubtful accounts.

XML

Equity

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Equity

Equity

Preferred Stock

As of June 30, 2018 the Company had 10,000 shares of preferred stock authorized, par value $0.01, with none issued and outstanding. If issued, each class or series of preferred stock will cover the number of shares and will have the powers, preferences, rights, qualifications, limitations and restrictions determined by the board of directors, which may include, among others, dividend rights, liquidation preferences, voting rights, conversion rights, preemptive rights and redemption rights. Except as provided by law or in a preferred stock designation, the holders of preferred stock will not be entitled to vote at or receive notice of any meeting of shareholders.

Class A Common Stock

The Company had a total of 69,958,113 shares of Class A Common Stock outstanding as of June 30, 2018, which includes 937,716 shares of restricted stock. Holders of Class A Common Stock are entitled to one vote per share on all matters to be voted upon by the stockholders and are entitled to ratably receive dividends when and if declared by the Company’s board of directors.

Class B Common Stock

The Company had a total 48,207,372 shares of Class B Common Stock outstanding as of June 30, 2018. Holders of the Class B Common Stock are entitled to one vote per share on all matters to be voted upon by stockholders. Holders of Class A Common Stock and Class B Common Stock vote together as a single class on all matters presented to the Company’s stockholders for their vote or approval, except with respect to amendment of certain provisions of the Company’s certificate of incorporation that would alter or change the powers, preferences or special rights of the Class B Common Stock so as to affect them adversely, which amendments must be by a majority of the votes entitled to be cast by the holders of the shares affected by the amendment, voting as a separate class, or as otherwise required by applicable law.

Holders of Class B Common Stock do not have any right to receive dividends, unless the dividend consists of Class B Common Stock or of rights, options, warrants or other securities convertible or exercisable into or exchangeable for shares of Class B Common Stock paid proportionally with respect to each outstanding share of Class B Common Stock and a dividend consisting of shares of Class A Common Stock or of rights, options, warrants or other securities convertible or exercisable into or exchangeable for shares of Class A Common Stock on the same terms is simultaneously paid to the holders of Class A Common Stock. Holders of Class B Common Stock do not have any right to receive a distribution upon liquidation or winding up of the Company.

The Liberty LLC Unit holders generally have the right (the “Redemption Right”) to cause Liberty LLC to acquire all or a portion of their Liberty LLC Units (and a corresponding number of shares of Class B Common Stock), for, at Liberty LLC’s election, (i) shares of Class A Common Stock, at a redemption ratio of one share of Class A Common Stock for each Liberty LLC Unit (and corresponding share of Class B Common Stock) redeemed, (subject to conversion rate adjustments for stock splits, stock dividends, and reclassifications and other similar transactions) or (ii) an equivalent amount of cash. Alternatively, upon the exercise of the Redemption Right, the Company (instead of Liberty LLC) will have the right (the “Call Right”) to, for administrative convenience, acquire each tendered Liberty LLC Unit directly from the redeeming Liberty Unit holder for, at its election, (x) one share of Class A Common Stock or (y) an equivalent amount of cash. In addition, upon a change of control of the Company, the Company has the right to require each holder of Liberty LLC Units (other than the Company) to exercise its Redemption Right with respect to some or all of such unitholder’s Liberty LLC Units. In connection with any redemption of Liberty LLC Units pursuant to the Redemption Right or the Call Right, the corresponding number of shares of Class B Common Stock will be canceled.

Net Income per Share

Basic net income per share measures the performance of an entity over the reporting period. Diluted net income per share measures the performance of an entity over the reporting period while giving effect to all potentially dilutive common shares that were outstanding during the period. The Company uses the “if-converted” method to determine the potential dilutive effect of its Class B Common Stock and the treasury stock method to determine the potential dilutive effect of outstanding restricted stock and restricted stock units.

The following table reflects the allocation of net income to common stockholders and net income per share computations for the periods indicated based on a weighted average number of common stock outstanding for period subsequent to the Corporate Reorganization on January 17, 2018:

(In thousands, except per share data)	Three Months Ended June 30, 2018		Six Months Ended June 30, 2018
Basic Net Income Per Share
Numerator:
Net income attributable to Liberty Oilfield Services Inc. Stockholders	$	49,595	$	73,270
Denominator:
Basic weighted average shares outstanding	69,020		68,977
Basic net income per share attributable to Liberty Oilfield Services Inc. Stockholders	$	0.72	$	1.06
Diluted Net Income Per Share
Numerator:
Net income attributable to Liberty Oilfield Services Inc. Stockholders	$	49,595	$	73,270
Effect of exchange of the shares of Class B Common stock for shares of Class A Common Stock	34,171		50,482
Diluted net income attributable to Liberty Oilfield Services Inc. Stockholders	$	83,766	$	123,752
Denominator:
Basic weighted average shares outstanding	69,020		68,977
Effect of dilutive securities:
Restricted stock	948		994
Restricted stock units	463		229
Class B Common Stock	48,207		48,207
Diluted weighted average shares outstanding	118,638		118,407
Diluted net income per share attributable to Liberty Oilfield Services Inc. Stockholders	$	0.71	$	1.05

LLC Interest Issuance

Prior to the IPO and Corporate Reorganization, as described in Note 1, Liberty Holdings issued membership interests to investors in exchange for cash consideration. Total member contributions as of December 31, 2017 were $275.7 million, net of commitment and issuance fees. On January 17, 2018, in connection with the Corporate Reorganization, these membership interests were exchanged for Liberty LLC Units. See Note 1 for additional information regarding the Corporate Reorganization.

Unit-Based Compensation

Prior to the IPO and Corporate Reorganization, Liberty Holdings issued Class B units of Liberty Holdings (“Legacy Units”) to certain eligible employees of the Company. The Legacy Units were non-voting, except with respect to such matters that units are entitled to vote as a matter of law. In such cases, each Legacy Unit entitled the holder to 1/1000th of one vote. Certain Legacy Units granted to eligible participants had an assigned benchmark value and were subject to vesting in accordance with the terms of each award letter. Upon termination of the holder’s employment for any reason, Liberty Holdings had the right, but not the obligation, to repurchase from the recipient those vested Legacy Units at fair value.

The Company recognizes compensation expense for equity-based Legacy Units issued to employees based on the grant-date fair value of the awards and each award’s requisite service period. With the assistance from a third-party valuation expert, the Predecessor determined that the Legacy Units issued to employees were deemed to have a de minimis grant-date fair value based on their assigned benchmark values. In connection with the Corporate Reorganization, the unvested Legacy Units were exchanged for 1,258,514 shares of restricted stock with the same terms and requisite vesting conditions as the Legacy Units. There was no change in the classification of the awards, and the fair value of the awards was the same immediately before and after the exchange. As such, in accordance with ASU 2017-07, modification accounting was not applicable, and the restricted stock awards continue to be recognized at the grant date fair value of the Legacy Units.

Restricted Stock Awards

Restricted stock awards are awards of Class A Common Stock that are subject to restrictions on transfer and to a risk of forfeitures if the award recipient is no longer an employee or director of the Company for any reason prior to the lapse of the restrictions.

The following table summarizes the Company’s unvested restricted stock activity for the six months ended June 30, 2018:

	Number of Shares		Grant Date Fair Value per Share (1)
Shares of Restricted Stock Issued in Exchange for Legacy Units	1,258,514		—
Vested	(303,737	)	—
Forfeited	(17,061	)	—
Outstanding at June 30, 2018	937,716		$	—

(1)    As discussed above the shares of restricted stock retain the grant date fair value of the Legacy Units.

Long Term Incentive Plan

On January 11, 2018, the Company adopted the Long Term Incentive Plan (“LTIP”) to incentivize employees, officers, directors and other service providers of the Company and its affiliates. The LTIP provides for the grant, from time to time, at the discretion of the Board or a committee thereof, of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, dividend equivalents, other stock-based awards, cash awards, substitute awards and performance awards. Subject to adjustment in the event of certain transaction or changes of capitalization in accordance with the LTIP, 12,908,734 shares of Class A Common Stock have been reserved for issuance pursuant to awards under the LTIP. Class A Common stock subject to an award that expires or is canceled, forfeited, exchanged, settled in cash or otherwise terminated without delivery of shares and shares withheld to pay the exercise price of, or to satisfy the withholding obligations with respect to, an award will again be available for delivery pursuant to other awards under the LTIP.

Restricted Stock Units

Restricted stock units (RSUs) granted pursuant to the LTIP, if they vest, will be settled in shares of the Company’s Class A Common Stock. RSUs were granted with vesting terms up to five years. Changes in non-vested RSUs outstanding under the LTIP during the six months ended June 30, 2018 were as follows:

	Number of Units	Weighted Average Grant Date Fair Value per Unit
Non-vested as of December 31, 2017	—	$	—
Granted	900,876	19.99
Vested	—	—
Forfeited	—	—
Outstanding at June 30, 2018	900,876	$	19.99

Stock-based compensation is included in cost of services and general and administrative expenses in the Company’s condensed consolidated and combined statements of income. The Company recognized stock based compensation expense of $1.2 million for the three and six months ended June 30, 2018. The Company recognized no stock based compensation expense prior to the Corporate Reorganization. There was approximately $16.8 million of unrecognized compensation expense relating to outstanding RSUs as of June 30, 2018. The unrecognized compensation expense will be recognized on a straight-line basis over the weighted average remaining vesting period of 2.8 years.

XML

Income Taxes

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

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. As a result of the IPO and Corporate Reorganization, the Company recorded deferred tax assets and liabilities for the difference between the book value of assets and liabilities for financial reporting purposes and those amounts applicable for income tax purposes. Deferred tax assets have been recorded for tax attributes contributed to the Company as part of the Corporate Reorganization. Deferred tax liabilities of $28.6 million have been recorded in connection with the Liberty LLC Units acquired through reorganization. The initial deferred tax liability is recorded as a long term liability and additional paid in capital on the condensed consolidated balance sheet as of June 30, 2018.

The effective combined U.S. federal and state income tax rate applicable to the Company for the period commencing on January 17, 2018, the date of the Corporate Reorganization, through June 30, 2018 was 13.9%. The Company’s effective tax rate is significantly less than the statutory tax rate of 21.0% primarily due to the shortened taxable period, as the Company was a pass-through entity prior to the IPO, and because no taxes are payable by the Company for the noncontrolling interest’s share of Liberty LLC’s pass through results for federal, state and local income tax reporting. The Company recognized income tax expense of $24.0 million for the period commencing on January 17, 2018, the date of the Corporate Reorganization, through June 30, 2018, and $15.9 million during the three months ended June 30, 2018.

Tax Receivable Agreements

In connection with the IPO, on January 17, 2018, the Company entered into two Tax Receivable Agreements (the “TRAs”) with the R/C Energy IV Direct Partnership, L.P. and the Legacy Owners that continued to own Liberty LLC Units (each such person and any permitted transferee, a “TRA Holder” and together, the “TRA Holders”). The TRAs generally provide for the payment by the Company of 85% of the net cash savings, if any, in U.S. federal, state, and local income tax and franchise tax (computed using simplifying assumptions to address the impact of state and local taxes) that the Company actually realizes (or is deemed to realize in certain circumstances) in periods after the IPO as a result, as applicable to each TRA Holder, of (i) certain increases in tax basis that occur as a result of the Company’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s Liberty LLC Units in connection with the IPO or pursuant to the exercise of the Redemption Right or the Company’s Call Right, (ii) any net operating losses available to the Company as a result of the Corporate Reorganization, and (iii) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, any payments the Company makes under the TRAs.

The term of each TRA commenced on January 17, 2018, and will continue until all such tax benefits that are subject to such TRA have been utilized or expired, unless the Company experiences a change of control (as defined in the TRAs, which includes certain mergers, asset sales and other forms of business combinations) or the TRAs are terminated early (at the Company’s election or as a result of its breach), and the Company makes the termination payments specified in such TRA.

The amounts payable, as well as the timing of any payments, under the TRAs are dependent upon significant future events and assumptions, including the timing of the redemptions of Liberty LLC Units, the price of our Class A Common Stock at the time of each redemption, the extent to which such redemptions are taxable transactions, the amount of the redeeming unit holder’s tax basis in its Liberty LLC Units at the time of the relevant redemption, the depreciation and amortization periods that apply to the increase in tax basis, the amount of net operating losses available to the Company as a result of the Corporate Reorganization, the amount and timing of taxable income the Company generates in the future, the U.S. federal income tax rate then applicable, and the portion of the Company’s payments under the TRAs that constitute imputed interest or give rise to depreciable or amortizable tax basis. As of June 30, 2018, there have been no payments associated with the TRA.

Prior to the Corporate Reorganization, one of the Legacy Owners contributed a portion of its member interest in Liberty Holdings to R/C IV Non-U.S. LOS Corp (“R/C IV”). Subsequently, in conjunction with the Corporate Reorganization, R/C IV was contributed to Liberty LLC. R/C IV had net operating loss carryforwards totaling $11.1 million for federal income tax purposes and $7.8 million for certain state income tax purposes. As a result of the Company being in a net income position and the expected utilization of deferred tax assets, the tax attributes contributed to the Company included a deferred tax asset of $2.6 million. As of June 30, 2018, the Company recognized a $2.3 million payable pursuant to the TRAs, or 85% of the deferred tax asset that is expected to be realized.

XML

Defined Contribution Plan

6 Months Ended

Jun. 30, 2018

Retirement Benefits [Abstract]

Defined Contribution Plan

Defined Contribution Plan

The Company sponsors a 401(k) defined contribution retirement plan covering eligible employees. The Company makes matching contributions, which were temporarily suspended in May 2015, but were resumed in April 2017 at a rate of $1.00 for each $1.00 of employee contribution, subject to a cap of 3% of the employee’s salary. In October 2017, the cap on these contributions was increased to 6% of the employee’s base salary. Contributions made by the Company were $6.7 million and $1.2 million for the six months ended June 30, 2018 and 2017, respectively, and $3.4 million and $1.2 million for the three months ended June 30, 2018 and 2017, respectively.

XML

Related Party Transactions

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

In connection with the Corporate Reorganization, the Company engaged in transactions with affiliates (see Note 1) including entering into two tax receivable agreements with affiliates (see Note 9). Also in conjunction with the Corporate Reorganization, Liberty Holdings contributed $2.1 million of assets to Liberty LLC, Redeemable Common Units in the amount of $42.6 million were settled (see Note 6) and $2.0 million of accrued advisory fees to Riverstone were settled.

In September 2011, Liberty Resources LLC, an oil and gas exploration and production company, and its successor entity (collectively, the “Affiliate”) and LOS, companies with common ownership and management, entered into a services agreement (the “Services Agreement”) whereby the Affiliate is to provide certain administrative support functions to LOS and a master service agreement whereby LOS provides hydraulic fracturing services to the Affiliate at market service rates. The amounts incurred under the Services Agreement by LOS during the three and six months ended June 30, 2018, were $0 and $0.2 million, respectively, and $0 during the three and six months ended June 30, 2017. There was $0 payable as of June 30, 2018 and December 31, 2017. During June 2018, the Services Agreement was terminated.

The amounts of the Company’s revenue related to hydraulic fracturing services provided to the Affiliate for the three months ended June 30, 2018 and 2017, was $0 and $12.0 million, respectively, and $3.9 million and $15.2 million for the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018 and December 31, 2017, $4.1 million and $4.0 million, respectively, of the Company’s accounts receivable, and $0 and $0.1 million, respectively, of the Company’s unbilled revenue was with the Affiliate.

The Company has an advisory agreement dated December 30, 2011 in which Riverstone is to provide certain administrative advisory services. The service fees incurred during the three months ended June 30, 2018 and 2017 were $0 and $0.3 million, respectively, and $0 and $1.0 million for the six months ended June 30, 2018 and 2017, respectively. Fees accrued as of June 30, 2018 and December 31, 2017 were $0 and $2.0 million, respectively. The amount accrued as of December 31, 2017 was settled and the agreement terminated in connection with the IPO.

During 2016, Liberty Holdings entered into a future commitment to invest and become a noncontrolling minority member in Proppant Express Investments, LLC (“PropX Investments”), the owner of Proppant Express Solutions, LLC (“PropX”), a provider of proppant logistics equipment. LOS is party to a services agreement (the “PropX Services Agreement”) whereby LOS is to provide certain administrative support functions to PropX, and LOS is to purchase and lease proppant logistics equipment from PropX. For the three months ended June 30, 2018 and 2017 the Company purchased proppant logistics equipment of $0 and $2.9 million, respectively, and leased proppant logistics equipment for $1.1 million and $0.9 million, respectively. For the six months ended June 30, 2018 and 2017 the Company made purchases of $2.1 million and $5.8 million, respectively and lease payments of $2.7 million and $1.4 million, respectively. During the three months ended March 31, 2018, in exchange for a 5% discount, the Company made a prepayment to PropX for rented equipment in the amount of $5.4 million, of which $1.6 million and $2.2 million was recognized as expense to costs of goods sold during the three and six months ended June 30, 2018 and $3.3 million remains outstanding as of June 30, 2018, which is reflected in prepaids and other current assets. Receivables from PropX as of June 30, 2018 and December 31, 2017 were $0. Payables to PropX as of June 30, 2018 and December 31, 2017 were $0.9 million and $0.7 million, respectively.

XML

Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments & Contingencies

Operating Leases

The Company leases office space, facilities, equipment, railcars, and vehicles under non-cancelable operating leases. Rent expense for the three months ended June 30, 2018 and 2017, was $9.4 million and $7.6 million, respectively, and $17.3 million and $9.5 million for the six months ended June 30, 2018 and 2017, respectively.

Future minimum lease payments are as follows:

($ in thousands)
Year Ending June 30,
2019	$	26,502
2020	27,245
2021	29,272
2022	7,330
2023	4,373
Thereafter	28,100
	$	122,822

Purchase Commitments (tons, per ton, gallons, per gallon and per rail car prices are not in thousands)

The Company enters into purchase and supply agreements to secure supply and pricing of proppants and chemicals. As of June 30, 2018 and December 31, 2017, the agreements commit the Company to purchase 12,237,000 and 10,108,000 tons, respectively, of proppant through December 31, 2021, during the remaining terms of the agreements at per ton prices varying from approximately $33.73 to $102.30, respectively, depending on the final delivery location and type of proppant. Amounts above include commitments to pay for transport fees on minimum amounts of proppants or railcars, including two contracts for a minimum of 100 railcars each per month at a rate of $630 to $750 per railcar, and one contract includes a $3.00 per ton fee on committed sand purchases.

Certain proppant supply agreements contain a clause whereby in the event that the Company fails to purchase minimum monthly volumes, as defined in the agreement, during any particular calendar month, a shortfall fee varying from $12.50 to $25.00 will be applied to each shortfall ton. The Company has the ability to mitigate the shortfall penalty in a certain period by purchasing proppant in excess of the requirement in another period. There were no shortfalls as of June 30, 2018.

As of June 30, 2018, the Company has commitments to purchase 23,565,000 gallons of chemicals through December 31, 2020 at prices ranging from $1.08 to $1.83 per gallon.

Future proppant, chemical and rail car commitments are as follows:

($ in thousands)
Years ended June 30,
2019	$	325,960
2020	262,377
2021	126,865
2022	12,229
2023	—
	$	727,431

Litigation

From time to time, the Company is subject to legal and administrative proceedings, settlements, investigations, claims and actions. The Company’s assessment of the likely outcome of litigation matters is based on its judgment of a number of factors including experience with similar matters, past history, precedents, relevant financial and other evidence and facts specific to the matter. Notwithstanding the uncertainty as to the final outcome, based upon the information currently available, management does not believe any matters in aggregate will have a material adverse effect on its financial position or results of operations.

On February 23, 2017, SandBox Logistics, LLC and Oren Technologies, LLC (collectively, “SandBox”) filed suit in the Houston Division of the U.S. District Court for the Southern District of Texas against PropX Investments, PropX and LOS. As described in Note 11, LOS is party to the PropX Services Agreement. SandBox alleges that LOS willfully infringes multiple U.S. patents and has breached an agreement between SandBox and LOS by “directing, controlling, and funding” inter partes review (“IPR”) requests before the U.S. Patent and Trademark Office (“USPTO”). In July 2018, SandBox requested permission from the court to allege additional breach of contract claims against LOS, including alleged breaches of a confidentiality agreement and an exclusive purchasing covenant. SandBox seeks both monetary and injunctive relief from the court, as well as attorney’s fees and costs. LOS intends to vigorously defend against the claims brought by SandBox. The Company cannot predict with any degree of certainty the outcome of the suit.

XML

Subsequent Events

6 Months Ended

Jun. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On August 1, 2018 the Company announced its first quarterly dividend of $0.05 per share of Class A common stock, to be paid on September 20, 2018 to holders of record as of September 6, 2018. Additionally, Liberty LLC will make a distribution of $0.05 per unit on September 20, 2018 to holders of record of Liberty LLC Units as of September 6, 2018.

XML

Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated and combined financial statements were prepared using generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and the instructions to Form 10-Q and Regulation S-X. Accordingly, these financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read together with the annual financial statements included in the 2017 Annual Report on Form 10-K.

The accompanying unaudited condensed consolidated and combined financial statements and related notes present the consolidated financial position, results of operations, cash flows, and equity of the Company as of and for the three and six months ended June 30, 2018 and the combined financial position, results of operations, and cash flows of the Predecessor as of December 31, 2017 and for the three and six months ended June 30, 2017. The interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim period. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results of operations expected for the entire fiscal year ended December 31, 2018.

All intercompany amounts have been eliminated in the presentation of these unaudited condensed consolidated and combined financial statements. Comprehensive income is not reported due to the absence of items of other comprehensive income or loss during the periods presented. The condensed consolidated and combined financial statements include financial data at historical cost as the contribution of assets is considered to be a reorganization of entities under common control. The condensed consolidated and combined financial statements may not be indicative of the actual level of assets, liabilities and costs that would have been incurred by the Predecessor if it had operated as an independent, publicly-traded company during the periods prior to the IPO or of the costs expected to be incurred in the future. In the opinion of management, the adjustments necessary for a fair presentation of the combined financial statements in accordance with GAAP have been made. Such adjustments are of a normal recurring nature.

The unaudited condensed consolidated and combined financial statements for periods prior to January 17, 2018, reflect the historical results of Predecessor. The unaudited condensed consolidated financial statements include the amounts of the Company and all majority owned subsidiaries where the Company has the ability to exercise control.

Revenue Recognition

Revenue Recognition

Effective January 1, 2018, the Company adopted a comprehensive new revenue recognition standard, Accounting Standard Codification (“ASC”) Topic 606-Revenue from Contracts with Customers. The details of the significant changes to accounting policies resulting from the adoption of the new standard are set out below. The Company adopted the standard using a modified retrospective method; accordingly, the comparative information for the three and six months ended June 30, 2017 has not been adjusted and continues to be reported under the previous revenue standard. The adoption of this standard did not have a material impact to the condensed consolidated financial position, reported revenue, results of operations or cash flows as of and for the three and six months ended June 30, 2018. 

Under the new standard, revenue recognition is based on the transfer of control, or our customer’s ability to benefit from our services and products in an amount that reflects the consideration expected to be received in exchange for those services and products. In recognizing revenue for services and products, the transaction price is determined from sales orders or contracts with customers. Revenue is recognized at the completion of each fracturing stage, and in most cases the price at the end of each stage is fixed, however, in limited circumstances contracts may contain variable consideration.

Variable consideration typically may relate to discounts, price concessions and incentives. We estimate variable consideration based on the amount of consideration we expect to receive. The Company accrues revenue on an ongoing basis to reflect updated information for variable consideration as performance obligations are met.

The Company also assesses customers’ ability and intention to pay, which is based on a variety of factors including historical payment experience and financial condition. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 45 days.

From time to time, the Company may require partial payment in advance from new customers to secure credit or from existing customers in order to secure additional hydraulic fracturing services. Initially, such payments are recorded in the accompanying condensed consolidated and combined financial statements as deferred revenue, and upon performance of the agreed services, the Company recognizes revenue consistent with its revenue recognition policy described above.

Fleet Start-up Costs

Fleet Start-up Costs

The Company incurs start-up costs to commission a new fleet or district. These costs include hiring and training of personnel, and acquisition of consumable parts and tools. Start-up costs are expensed as incurred, and are reflected in general and administrative expenses in the combined statement of operations. Start-up costs for the three and six months ended June 30, 2018 were $3.3 million and $6.6 million, respectively, related to one and three new fleets deployed during each respective period. Start-up costs for the three and six months ended June 30, 2017 were $4.3 million and $8.9 million, respectively, related to four and six new fleets deployed during each respective period. The total amount of start-up costs incurred for the commissioning of each new fleet depends primarily on the number and timing of hiring additional personnel to staff such fleets, and such costs may not be entirely incurred in the same period as the fleet is deployed.

The terms and conditions of the Credit Facilities, defined herein, between the Company and its lenders provides for the add-back of costs or expenses incurred in connection with the acquisition, deployment and opening of any new hydraulic fracturing fleet or district in the computation of certain financial covenants.

Recently Adopted and Issued Accounting Standards

Recently Adopted Accounting Standards

In May 2014 the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606),” which outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. This ASU sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity is required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. Additional disclosures are required to describe the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The Company adopted this standard on January 1, 2018 using the modified retrospective method. The Company did not record a cumulative effect adjustment to the opening balance of retained earnings, as no adjustment was necessary. The adoption of this standard did not impact the Company’s reported revenue, net income or cash flows.

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities,” which requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The adoption of ASU 2016-01 did not have a material impact on the condensed consolidated and combined financial statements of the Company.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which provides guidance on eight different issues, intended to reduce diversity in practice on how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The adoption of ASU 2016-15 did not have a material impact on the condensed consolidated and combined financial statements of the Company.

In October 2016, the FASB issued ASU 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory,” which requires entities to recognize the tax consequences of intercompany asset transfers in the period in which the transfer takes place, with the exception of inventory transfers. The adoption of ASU 2016-16 did not have a material impact on the condensed consolidated and combined financial statements of the Company.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting” (“ASU 2017-09”), which provides guidance to increase clarity and reduce both diversity in practice and cost and complexity when applying the existing accounting guidance on changes to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 require an entity to account for the effects of a modification unless all the following conditions are met: (i) the fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; (ii) the vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (iii) the classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The guidance in ASU 2017-09 is applied prospectively. The amendments in ASU 2017-09 are effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. The Company’s adoption of this guidance did not materially impact its condensed consolidated and combined financial statements.

Recently Issued Accounting Standards

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a purchase financed by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less may be accounted for similarly to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 is expected to impact the Company’s consolidated and combined financial statements as the Company has certain operating and real property lease arrangements for which it is the lessee. The standard is effective on January 1, 2019, with early adoption permitted. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated and combined financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” which is effective for fiscal years and interim periods within fiscal years beginning after December 15, 2019, with a modified-retrospective approach to be used for implementation. ASU 2016-13 changes the impairment model for most financial assets and certain other instruments. Specifically, this new guidance requires using a forward looking, expected loss model for trade and other receivables, held-to-maturity debt securities, loans and other instruments. This will replace the currently used model and may result in an earlier recognition of allowance for losses. The Company is currently evaluating the impact the adoption of this standard will have on its condensed consolidated and combined financial statements.

XML

Inventories (Tables)

6 Months Ended

Jun. 30, 2018

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consist of the following:

	June 30,		December 31,
($ in thousands)	2018		2017
Proppants	$	32,588	$	30,523
Chemicals	10,731		10,660
Maintenance parts	19,055		14,341
	$	62,374	$	55,524

XML

Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment consist of the following:

	Estimated useful lives (in years)	June 30,			December 31,
($ in thousands)		2018			2017
Land	N/A	$	5,400		$	4,495
Field services equipment	2-7	684,397			572,096
Vehicles	4-7	60,500			60,815
Buildings and facilities	5-30	26,917			24,260
Office equipment, furniture, and software	2-7	6,173			5,879
		783,387			667,545
Less accumulated depreciation and amortization		(255,548		)	(198,453		)
		527,839			469,092
Construction in-progress	N/A	33,175			25,684
		$	561,014		$	494,776

XML

Debt (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Schedule of Debt

Debt consists of the following:

	June 30,			December 31,
($ in thousands)	2018			2017
Term Loan Outstanding	$	113,028		$	174,562
Revolving Line of Credit	—			30,000
Deferred financing costs and original issue discount	(5,823		)	(8,205		)
Total debt, net of deferred financing costs and original issue discount	$	107,205		$	196,357
Current portion of long-term debt, net of discount	$	375		$	11
Long-term debt, net of discount and current portion	106,830			196,346
	$	107,205		$	196,357

Schedule of Maturities of Long-term Debt

Maturities of debt are as follows:

($ in thousands)
Year Ending June 30,
2019	$	1,750
2020	2,188
2021	1,750
2022	1,312
2023	106,028
	$	113,028

XML

Equity (Tables)

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table reflects the allocation of net income to common stockholders and net income per share computations for the periods indicated based on a weighted average number of common stock outstanding for period subsequent to the Corporate Reorganization on January 17, 2018:

(In thousands, except per share data)	Three Months Ended June 30, 2018		Six Months Ended June 30, 2018
Basic Net Income Per Share
Numerator:
Net income attributable to Liberty Oilfield Services Inc. Stockholders	$	49,595	$	73,270
Denominator:
Basic weighted average shares outstanding	69,020		68,977
Basic net income per share attributable to Liberty Oilfield Services Inc. Stockholders	$	0.72	$	1.06
Diluted Net Income Per Share
Numerator:
Net income attributable to Liberty Oilfield Services Inc. Stockholders	$	49,595	$	73,270
Effect of exchange of the shares of Class B Common stock for shares of Class A Common Stock	34,171		50,482
Diluted net income attributable to Liberty Oilfield Services Inc. Stockholders	$	83,766	$	123,752
Denominator:
Basic weighted average shares outstanding	69,020		68,977
Effect of dilutive securities:
Restricted stock	948		994
Restricted stock units	463		229
Class B Common Stock	48,207		48,207
Diluted weighted average shares outstanding	118,638		118,407
Diluted net income per share attributable to Liberty Oilfield Services Inc. Stockholders	$	0.71	$	1.05

Nonvested Restricted Stock Shares Activity

The following table summarizes the Company’s unvested restricted stock activity for the six months ended June 30, 2018:

	Number of Shares		Grant Date Fair Value per Share (1)
Shares of Restricted Stock Issued in Exchange for Legacy Units	1,258,514		—
Vested	(303,737	)	—
Forfeited	(17,061	)	—
Outstanding at June 30, 2018	937,716		$	—

(1)    As discussed above the shares of restricted stock retain the grant date fair value of the Legacy Units.

Schedule of Nonvested Restricted Stock Units Activity

Changes in non-vested RSUs outstanding under the LTIP during the six months ended June 30, 2018 were as follows:

	Number of Units	Weighted Average Grant Date Fair Value per Unit
Non-vested as of December 31, 2017	—	$	—
Granted	900,876	19.99
Vested	—	—
Forfeited	—	—
Outstanding at June 30, 2018	900,876	$	19.99

XML

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases

Future minimum lease payments are as follows:

($ in thousands)
Year Ending June 30,
2019	$	26,502
2020	27,245
2021	29,272
2022	7,330
2023	4,373
Thereafter	28,100
	$	122,822

Other Commitments

Future proppant, chemical and rail car commitments are as follows:

($ in thousands)
Years ended June 30,
2019	$	325,960
2020	262,377
2021	126,865
2022	12,229
2023	—
	$	727,431

XML

Organization and Basis of Presentation - Sale Of Stock (Details) - USD ($) $ / shares in Units, $ in Millions	Jan. 17, 2018	Jun. 30, 2018	Dec. 31, 2017
ABL Credit Facility
Subsidiary, Sale of Stock [Line Items]
Repayments of debt	$ 30.1
Term Loan Facility
Subsidiary, Sale of Stock [Line Items]
Repayments of debt	$ 62.5
Repayments of debt, percent	35.00%
Shares of Class A Common Stock
Subsidiary, Sale of Stock [Line Items]
Number of common shares sold (in shares)	55,685,027
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0
Shares redeemed (in shares)	1,609,122
Shares of Class A Common Stock | IPO
Subsidiary, Sale of Stock [Line Items]
Number of common shares sold (in shares)	14,640,755
Price per share (in dollars per share)	$ 17.00
Consideration received	$ 220.3
Underwriting discounts and commissions and offering costs	13.4
Other offering costs	$ 10.1
Shares of Class A Common Stock | IPO - Shares From Existing Shareholders
Subsidiary, Sale of Stock [Line Items]
Number of common shares sold (in shares)	300,541
Shares of Class B Common Stock
Subsidiary, Sale of Stock [Line Items]
Number of common shares sold (in shares)	48,207,372
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0
Restricted Stock | Shares of Class A Common Stock
Subsidiary, Sale of Stock [Line Items]
Number of common shares sold (in shares)	1,258,514
Liberty LLC
Subsidiary, Sale of Stock [Line Items]
Ownership interest redemption	$ 25.9
Ownership percentage		59.20%
Liberty Inc. | Shares of Class A Common Stock | IPO
Subsidiary, Sale of Stock [Line Items]
Number of common shares sold (in shares)	14,340,214

XML

Significant Accounting Policies (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($) fleet	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($) fleet	Dec. 31, 2017 USD ($)
Deferred Revenue Arrangement [Line Items]
Customer payment terms			45 days
Deferred revenue	$ 3,844		$ 3,844		$ 9,231
Prepayment revenue recognized			2,900	$ 5,400
Start-up costs	$ 3,300	$ 4,300	$ 6,600	$ 8,900
Number of fleets established | fleet		4		6
Minimum
Deferred Revenue Arrangement [Line Items]
Customer payment terms			30 days
Maximum
Deferred Revenue Arrangement [Line Items]
Customer payment terms			45 days

XML

Inventories (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Inventory [Line Items]
Inventories	$ 62,374		$ 55,524
Inventory write-down	3,389	$ 259
Proppants
Inventory [Line Items]
Inventories	32,588		30,523
Chemicals
Inventory [Line Items]
Inventories	10,731		10,660
Maintenance parts
Inventory [Line Items]
Inventories	$ 19,055		$ 14,341

XML

Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 783,387		$ 783,387		$ 667,545
Less accumulated depreciation and amortization	(255,548)		(255,548)		(198,453)
Property and equipment, before construction in-progress, net	527,839		527,839		469,092
Construction in-progress	33,175		33,175		25,684
Property and equipment, net	561,014		561,014		494,776
Depreciation and amortization	30,606	$ 17,521	58,622	$ 31,667
Land
Property, Plant and Equipment [Line Items]
Property and equipment, gross	5,400		5,400		4,495
Field services equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	684,397		$ 684,397		572,096
Field services equipment | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives			2 years
Field services equipment | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives			7 years
Vehicles
Property, Plant and Equipment [Line Items]
Property and equipment, gross	60,500		$ 60,500		60,815
Vehicles | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives			4 years
Vehicles | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives			7 years
Buildings and facilities
Property, Plant and Equipment [Line Items]
Property and equipment, gross	26,917		$ 26,917		24,260
Buildings and facilities | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives			5 years
Buildings and facilities | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives			30 years
Office equipment, furniture, and software
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 6,173		$ 6,173		$ 5,879
Office equipment, furniture, and software | Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives			2 years
Office equipment, furniture, and software | Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives			7 years

XML

Debt - Summary of Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Long-term debt, gross	$ 113,028
Deferred financing costs and original issue discount	(5,823)	$ (8,205)
Total debt, net of deferred financing costs and original issue discount	107,205	196,357
Current portion of long-term debt, net of discount	375	11
Long-term debt, net of discount and current portion	106,830	196,346
Term Loan Outstanding
Debt Instrument [Line Items]
Long-term debt, gross	113,028	174,562
Revolving Line of Credit
Debt Instrument [Line Items]
Long-term debt, gross	$ 0	$ 30,000

XML

Debt - Credit Facilities (Details)	6 Months Ended
	Jun. 30, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 19, 2017 USD ($) agreement
Debt Instrument [Line Items]
Long-term debt, gross	$ 113,028,000
Revolving Line of Credit
Debt Instrument [Line Items]
Long-term debt, gross	0	$ 30,000,000
Term Loan | Term Loan Facility
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 175,000,000
Revolving Credit Facility
Debt Instrument [Line Items]
Number of credit agreements | agreement			2
Revolving Credit Facility | ABL Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 250,000,000
Current borrowing capacity	$ 235,400,000
Line of credit, maturity, number of days prior maturity of another facility	90 days
Revolving Credit Facility | Revolving Line of Credit | Term Loan Facility
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 175,000,000
Letter of Credit | ABL Credit Facility
Debt Instrument [Line Items]
Letters of credit outstanding, amount	$ 300,000
Remaining borrowing capacity	$ 235,100,000
Minimum | Revolving Credit Facility | ABL Credit Facility
Debt Instrument [Line Items]
Unused capacity, commitment fee percentage	0.375%
Maximum | Revolving Credit Facility | ABL Credit Facility
Debt Instrument [Line Items]
Unused capacity, commitment fee percentage	0.50%
London Interbank Offered Rate (LIBOR) | Revolving Credit Facility | Revolving Line of Credit | Term Loan Facility
Debt Instrument [Line Items]
Basis spread on variable rate	7.625%
London Interbank Offered Rate (LIBOR) | Minimum | Revolving Credit Facility | Revolving Line of Credit | ABL Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate	1.50%
London Interbank Offered Rate (LIBOR) | Maximum | Revolving Credit Facility | Revolving Line of Credit | ABL Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate	2.00%
Base Rate | Revolving Credit Facility | Revolving Line of Credit | Term Loan Facility
Debt Instrument [Line Items]
Basis spread on variable rate	6.625%
Base Rate | Minimum | Revolving Credit Facility | Revolving Line of Credit | ABL Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
Base Rate | Maximum | Revolving Credit Facility | Revolving Line of Credit | ABL Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%

XML

Debt - Term Loan Facility (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017	Sep. 19, 2017
Debt Instrument [Line Items]
Long-term debt, gross	$ 113,028,000
Revolving Line of Credit
Debt Instrument [Line Items]
Long-term debt, gross	$ 0	$ 30,000,000
Revolving Credit Facility | ABL Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 250,000,000
Revolving Credit Facility | Revolving Line of Credit | Term Loan Facility
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 175,000,000
Weighted average interest rate	9.70%
Line of credit facility, outstanding balance, quarterly principal payments, percent	1.00%
Line of credit facility, covenant compliance, prepayment minimum, percent	3.00%
Line of credit facility, covenant compliance, prepayment minimum, floor during first three years, percent	1.00%
Line of credit facility, covenant compliance, fixed charge coverage ratio	0.012
Line of credit facility, covenant compliance, liquidity threshold for five consecutive business days	$ 25,000,000
Revolving Credit Facility | Revolving Line of Credit | Term Loan Facility | Minimum
Debt Instrument [Line Items]
Line of credit facility, covenant compliance, annual percentage of excess cash flow	25.00%
Revolving Credit Facility | Revolving Line of Credit | Term Loan Facility | Maximum
Debt Instrument [Line Items]
Line of credit facility, covenant compliance, annual percentage of excess cash flow	50.00%
Revolving Credit Facility | Revolving Line of Credit | Term Loan Facility | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Basis spread on variable rate	7.625%
Revolving Credit Facility | Revolving Line of Credit | Term Loan Facility | Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate	6.625%
Revolving Credit Facility | Revolving Line of Credit | ABL Credit Facility
Debt Instrument [Line Items]
Line of credit facility, covenant compliance, fixed charge coverage ratio	0.010
Line of credit facility, covenant compliance, excess availability threshold, percent of borrowing base	10.00%
Line of credit facility, covenant compliance, excess availability threshold, amount	$ 12,500,000
Revolving Credit Facility | Revolving Line of Credit | ABL Credit Facility | London Interbank Offered Rate (LIBOR) | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	1.50%
Revolving Credit Facility | Revolving Line of Credit | ABL Credit Facility | London Interbank Offered Rate (LIBOR) | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	2.00%
Revolving Credit Facility | Revolving Line of Credit | ABL Credit Facility | Base Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
Revolving Credit Facility | Revolving Line of Credit | ABL Credit Facility | Base Rate | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	1.00%

XML

Debt - Maturities of Debt (Details) $ in Thousands	Jun. 30, 2018 USD ($)
Debt Disclosure [Abstract]
2019	$ 1,750
2020	2,188
2021	1,750
2022	1,312
2023	106,028
Long-term debt, gross	$ 113,028

XML

Redeemable Common Units (Details) - ACQI - Subsidiaries - Redeemable Common Units $ in Millions	1 Months Ended
	Feb. 28, 2017 USD ($) shares
Temporary Equity [Line Items]
Proceeds from issuance of redeemable common units | $	$ 39.8
Temporary equity, shares issued (in shares) | shares	40,000,000
Temporary equity, shares, interest rate	8.00%

XML

Fair Value Measurements and Financial Instruments (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash balances on deposit with financial institutions	$ 83,331,000	$ 609,000	$ 83,331,000	$ 609,000	$ 16,321,000	$ 11,484,000
Customer payment terms			45 days
Allowance for uncollectible accounts	$ 0		$ 0		$ 0
Customer Concentration Risk | Largest Two Customers | Accounts Receivable
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Concentration risk, percentage			16.00%		22.00%
Customer Concentration Risk | Largest Two Customers | Total Revenue
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Concentration risk, percentage	15.00%	28.00%	16.00%	30.00%

XML

Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions		12 Months Ended
	Jan. 17, 2018	Dec. 31, 2017	Jun. 30, 2018	Jan. 11, 2018
Subsidiary or Equity Method Investee [Line Items]
Preferred stock, shares authorized (in shares)		10,000	10,000
Preferred stock, par value (in dollars per share)		$ 0.01	$ 0.01
Member contributions		$ 275.7
Shares of Class A Common Stock
Subsidiary or Equity Method Investee [Line Items]
Common stock, shares outstanding (in shares)	69,975,174	0	69,958,113
Number of common shares sold (in shares)	55,685,027
Shares of Class A Common Stock | Long Term Incentive Plan
Subsidiary or Equity Method Investee [Line Items]
Shares reserved for issuance				12,908,734
Shares of Class A Common Stock | Restricted Stock
Subsidiary or Equity Method Investee [Line Items]
Common stock, shares outstanding (in shares)			937,716
Number of common shares sold (in shares)	1,258,514
Shares of Class B Common Stock
Subsidiary or Equity Method Investee [Line Items]
Common stock, shares outstanding (in shares)	48,207,372	0	48,207,372
Number of common shares sold (in shares)	48,207,372

XML

Equity - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 17, 2018	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2017
Numerator:
Net income attributable to Liberty Oilfield Services Inc. Stockholders	$ 8,705	$ 49,595	$ 0	$ 140,023	$ 73,270	$ 0
Denominator, Basic [Abstract]
Basic weighted average shares outstanding (in shares)		69,020,000			68,977,000
Basic net income per share attributable to Liberty Oilfield Services Inc. Stockholders (in dollars per share)		$ 0.72			$ 1.06
Numerator, Diluted [Abstract]
Net income attributable to Liberty Oilfield Services Inc. Stockholders	$ 8,705	$ 49,595	$ 0	$ 140,023	$ 73,270	$ 0
Effect of exchange of the shares of Class B Common stock for shares of Class A Common Stock		34,171			50,482
Net Income (Loss) Available to Common Stockholders, Diluted		$ 83,766			$ 123,752
Denominator, Diluted [Abstract]
Basic weighted average shares outstanding (in shares)		69,020,000			68,977,000
Effect of dilutive securities:
Restricted stock (in shares)		948,000			994,000
Restricted stock units (in shares)		463,000			229,000
Class B Common Stock (in shares)		48,207,000			48,207,000
Diluted weighted average shares outstanding (in shares)		118,638,000			118,407,000
Diluted net income per share attributable to Liberty Oilfield Services Inc. Stockholders (in dollars per share)		$ 0.71			$ 1.05

XML

Equity - Restricted Stock Awards and Restricted Stock Units (Details) $ / shares in Units, $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2018 USD ($) $ / shares shares	Jun. 30, 2018 USD ($) $ / shares shares
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Share-based compensation expense | $	$ 1.2	$ 1.0
Unamortized compensation expense | $	$ 16.8	$ 16.8
Vesting period of awards		5 years
Weighted average remaining vesting period		2 years 9 months 18 days
Shares of Class A Common Stock | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding at beginning of period (in shares)		1,258,514.000
Vested (in shares)		(303,737)
Forfeited (in shares)		(17,061)
Outstanding at end of period (in shares)	937,716.000	937,716.000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Outstanding at beginning of period (in dollars per share) | $ / shares		$ 0.00
Vested (in dollars per share) | $ / shares		0.00
Forfeited (in dollars per share) | $ / shares		0.00
Outstanding at end of period (in dollars per share) | $ / shares	$ 0.00	$ 0.00
Shares of Class A Common Stock | Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding at beginning of period (in shares)		0
Granted (in shares)		900,876
Vested (in shares)		0
Forfeited (in shares)		0
Outstanding at end of period (in shares)	900,876	900,876
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Granted (in dollars per share) | $ / shares		$ 19.99
Outstanding at end of period (in dollars per share) | $ / shares	$ 19.99	$ 19.99

XML

Income Taxes (Details) $ in Thousands		3 Months Ended		5 Months Ended	6 Months Ended
	Jan. 17, 2018 agreement	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Operating Loss Carryforwards [Line Items]
Deferred tax liabilities		$ 28,600		$ 28,600	$ 28,600
Effective combined income tax rate				13.90%
Income tax expense		15,930	$ 0	$ 24,000	24,009	$ 0
Number of tax receivable agreements | agreement	2
Deferred tax asset		2,600		2,600	2,600
Taxes payable		2,291		2,291	2,291		$ 0
Federal
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards		11,100		11,100	11,100
State
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards		$ 7,800		$ 7,800	$ 7,800

XML

Defined Contribution Plan (Details) - 401(k) Defined Contribution Retirement Plan - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended			12 Months Ended
	Oct. 31, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2017
Defined Contribution Plan Disclosure [Line Items]
Employer matching contribution per one dollar of employee contribution							$ 1.00
Maximum annual contribution per employee, percent	6.00%				3.00%
Contributions made by the employer		$ 3,400,000	$ 1,200,000	$ 6,700,000		$ 1,200,000

XML

Related Party Transactions (Details)		3 Months Ended			6 Months Ended
	Jan. 17, 2018 USD ($) agreement	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)
Related Party Transaction [Line Items]
Accrued liabilities—related party		$ 0			$ 0		$ 2,000,000
Revenue from related parties		0		$ 11,985,000	4,062,000	$ 15,161,000
Unbilled receivables, related parties		0			0		59,000
Prepaid expense and other current assets		29,237,000			29,237,000		21,396,000
Affiliated Entity | Equity transaction, reorganization
Related Party Transaction [Line Items]
Number of tax receivable agreements | agreement	2
Asset contribution, reorganization	$ 2,100,000
Consideration received	$ 42,600,000
Liberty Resources LLC | Affiliated Entity | Hydraulic Fracturing Services
Related Party Transaction [Line Items]
Expenses from transactions with related party		0		0	202,000	0
Due to related parties		0			0		0
Revenue from related parties		0		12,000,000	3,900,000	15,200,000
Accounts receivable, related parties		4,100,000			4,100,000		4,000,000
Unbilled receivables, related parties		0			0		100,000
Riverstone | Affiliated Entity | Service Fees
Related Party Transaction [Line Items]
Accrued liabilities—related party		0			0		2,000,000
Expenses from transactions with related party		0		300,000	0	1,000,000
Proppant Express Investments, LLC | Affiliated Entity | Administrative Support and Purchase and Lease Proppant Logistics Equipment
Related Party Transaction [Line Items]
Due to related parties		900,000			900,000		700,000
Accounts receivable, related parties		0			0		$ 0
Purchases from related party		0		2,900,000	2,100,000	5,800,000
Leases from related party		1,100,000		$ 900,000	2,700,000	$ 1,400,000
Discount, percentage			5.00%
Prepaid expense and other current assets		3,300,000	$ 5,400,000		3,300,000
Cost of goods sold		$ 1,600,000			$ 2,200,000

XML

Commitments and Contingencies - Operating Lease Future Minimum Payments (Details) $ in Thousands	Jun. 30, 2018 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2019	$ 26,502
2020	27,245
2021	29,272
2022	7,330
2023	4,373
Thereafter	28,100
Future minimum payments due	$ 122,822

XML

Commitments and Contingencies - Proppant, Chemical and Rail Car Commitments (Details) $ in Thousands	Jun. 30, 2018 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2019	$ 325,960
2020	262,377
2021	126,865
2022	12,229
2023	0
Other commitment	$ 727,431

XML

Commitments and Contingencies - Additional Information (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) railcar T $ / T $ / gal gal	Jun. 30, 2017 USD ($)	Dec. 31, 2017 T
Long-term Purchase Commitment [Line Items]
Rent expense | $	$ 9,400,000	$ 7,600,000	$ 17,300,000	$ 9,500,000
Proppant
Long-term Purchase Commitment [Line Items]
Minimum mass required (in tons) | T			12,237,000		10,108,000
Minimum number of railcars per month | railcar			100
Proppant | Minimum
Long-term Purchase Commitment [Line Items]
Minimum mass required, price (in dollars per ton) | $ / T			33.73
Shortfall fee (in dollars per ton) | $ / T			12.50
Proppant | Maximum
Long-term Purchase Commitment [Line Items]
Minimum mass required, price (in dollars per ton) | $ / T			102.30
Shortfall fee (in dollars per ton) | $ / T			25.00
Chemicals
Long-term Purchase Commitment [Line Items]
Minimum volume required | gal			23,565,000
Chemicals | Minimum
Long-term Purchase Commitment [Line Items]
Minimum volume required, price per gallon (in dollars per gallon) | $ / gal			1.08
Chemicals | Maximum
Long-term Purchase Commitment [Line Items]
Minimum volume required, price per gallon (in dollars per gallon) | $ / gal			1.83
Contract One | Proppant | Minimum
Long-term Purchase Commitment [Line Items]
Price per railcar | $			$ 630
Contract One | Proppant | Maximum
Long-term Purchase Commitment [Line Items]
Price per railcar | $			750
Contract Two | Proppant
Long-term Purchase Commitment [Line Items]
Price per railcar | $			$ 3.00

XML

Subsequent Events (Details) - Subsequent Event	Aug. 01, 2018 $ / shares
Subsequent Event [Line Items]
Common stock, dividends, per share, declared (in dollars per share)	$ 0.05
Distribution made to Limited Liability Company (LLC) member, distributions declared, per unit (in dollars per unit)	$ 0.05