Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

Texas Pacific Land Corp., consolidated income statement

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Oil and gas royalties	357,394)	452,434)	286,468)	137,948)	154,729)
Water sales	112,203)	84,725)	67,766)	54,862)	84,949)
Produced water royalties	84,260)	72,234)	58,081)	50,640)	39,119)
Easements and other surface-related income	70,932)	48,057)	37,616)	41,398)	76,243)
Land sales and other operating revenue	6,806)	9,972)	1,027)	17,706)	135,456)
Revenues	631,595)	667,422)	450,958)	302,554)	490,496)
Salaries and related employee expenses	(43,384)	(41,402)	(40,012)	(32,173)	(35,041)
Water service-related expenses	(33,566)	(17,463)	(13,233)	(14,233)	(20,808)
General and administrative expenses	(14,928)	(13,285)	(11,638)	(13,724)	(9,765)
Legal and professional fees	(31,522)	(8,735)	(7,281)	(10,778)	(16,403)
Ad valorem and other taxes	(7,385)	(8,854)	(144)	—)	—)
Depreciation, depletion and amortization	(14,757)	(15,376)	(16,257)	(14,395)	(8,906)
Operating expenses	(145,542)	(105,115)	(88,565)	(85,303)	(90,923)
Operating income	486,053)	562,307)	362,393)	217,251)	399,573)
Interest earned on cash and cash equivalents, net	28,630)	6,207)	78)	—)	—)
Other employee pension costs	514)	363)	113)	—)	—)
Miscellaneous other income (expense), net	2,364)	(22)	433)	2,411)	2,682)
Other income, net	31,508)	6,548)	624)	2,411)	2,682)
Income before income taxes	517,561)	568,855)	363,017)	219,662)	402,255)
Income tax expense	(111,916)	(122,493)	(93,037)	(43,613)	(83,527)
Net income	405,645)	446,362)	269,980)	176,049)	318,728)

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).

Revenue Trends: Revenues experienced considerable volatility from 2019 to 2023. Starting at 490,496 thousand US dollars in 2019, there was a significant decline to 302,554 thousand in 2020. However, revenue rebounded in the subsequent years, reaching a peak of 667,422 thousand in 2022 before slightly decreasing to 631,595 thousand in 2023. This fluctuation was mainly influenced by the oil and gas royalties, which initially declined in 2020, surged in 2021 and 2022, and then fell in 2023.
Segment Revenue Analysis: Oil and gas royalties showed a strong recovery between 2020 and 2022, achieving their highest value in 2022 (452,434 thousand), followed by a decline in 2023 (357,394 thousand). Water sales demonstrated a consistent upward trend over the period, more than doubling from 54,862 thousand in 2020 to 112,203 thousand in 2023. Produced water royalties increased steadily each year, indicating growing importance. Easements and other surface-related income decreased sharply in 2020 and 2021 but rebounded notably by 2023. Land sales and other operating revenue significantly dropped after 2019 and remained relatively low thereafter.
Operating Expenses: Operating expenses showed an increasing trend from 2019 to 2023, escalating from 90,923 thousand to 145,542 thousand. Salaries and related employee expenses gradually increased in absolute terms, reflecting a steady rise in labor costs. Water service-related expenses more than doubled from 17,463 thousand in 2022 to 33,566 thousand in 2023, indicating increased operational costs in this segment. General and administrative expenses followed a moderate growth pattern, while legal and professional fees exhibited sharp volatility, peaking significantly in 2023 at 31,522 thousand.
Profitability and Income: Operating income mirrored revenue trends, declining drastically in 2020 but recovering in subsequent years, peaking at 562,307 thousand in 2022 and then decreasing to 486,053 thousand in 2023. Income before taxes followed a similar pattern. Net income demonstrated resilience, with a strong rebound after 2020, achieving the highest value of 446,362 thousand in 2022 before a decrease to 405,645 thousand in 2023. Income tax expenses increased significantly over the period, peaking in 2022, which impacted net profitability.
Other Income and Expenses: Interest earned on cash and cash equivalents grew substantially from 78 thousand in 2021 to 28,630 thousand in 2023, contributing positively to other income. Other employee pension costs increased slightly but remained a minor expense. Miscellaneous other income was inconsistent but positive overall. The aggregate of other income, net, showed significant growth, especially in 2023, reflecting diversification of income sources beyond core operations.
Taxation: Income tax expense saw considerable increases, particularly from 2021 onward, with a notable rise in 2022 and a slight decrease in 2023. The presence of ad valorem and other taxes became material only in 2021 and thereafter, indicating changing tax obligations or assessment bases.
Summary: The financial data reveals a company facing volatility in revenues and costs, strongly influenced by commodity market cycles and operational segment performance. The overall increase in operating expenses, particularly in water service and legal fees, suggests rising operational and compliance costs. Profitability metrics show recovery and growth after 2020 but with some contraction in 2023. Other income sources became increasingly significant contributors to the bottom line. Tax expenses have risen, diminishing net income gains. The company’s financial performance demonstrates resilience with evolving revenue streams and increasing operational complexity.

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Texas Pacific Land Corp. (NYSE:TPL)

Income Statement