Common-Size Income Statement
Texas Pacific Land Corp., common-size consolidated income statement
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The revenue structure exhibits a significant strategic shift from one-time asset liquidations toward recurring royalty streams. This transition is most evident in the decline of land sales and other operating revenue, which plummeted from 27.62% of total revenues in 2019 to just 1.08% by 2023. Concurrently, oil and gas royalties became the primary revenue driver, increasing from 31.55% in 2019 to a peak of 67.79% in 2022, before settling at 56.59% in 2023.
- Revenue Stream Dynamics
- Oil and gas royalties demonstrate high volatility and growth, dominating the revenue mix from 2021 onward. Water sales have remained relatively stable, fluctuating between 12.69% and 18.13%. Produced water royalties saw a notable increase from 7.98% in 2019 to a peak of 16.74% in 2020, maintaining a presence above 10% in subsequent years. Easements and surface-related income showed a downward trend from 15.54% in 2019 to 7.20% in 2022, with a partial recovery to 11.23% in 2023.
- Operating Expense Trends
- Total operating expenses as a percentage of revenue peaked in 2020 at 28.19% and reached a low of 15.75% in 2022, before rising to 23.04% in 2023. Salaries and related employee expenses have fluctuated between 6.20% and 10.63%. Legal and professional fees remained low throughout most of the period but experienced a sharp increase to 4.99% of revenues in 2023. Depreciation, depletion, and amortization costs decreased from a high of 4.76% in 2020 to approximately 2.34% by 2023.
- Profitability and Non-Operating Income
- Operating income margins remain exceptionally high, consistently exceeding 70% and peaking at 84.25% in 2022. A notable upward trend is observed in interest earned on cash and cash equivalents, which rose from negligible levels in 2021 to 4.53% of revenues in 2023, contributing to an increase in total other income. This suggests an improved cash yield or increased liquidity holdings.
- Net Income and Tax Impact
- Net income margins have remained robust, ranging between 58.19% and 66.88% over the five-year period. The income tax expense as a percentage of revenues has been relatively consistent, fluctuating between 14.41% and 20.63%. The stability of the net income margin indicates that the organization effectively scales its cost structure relative to its revenue growth.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?