Texas Pacific Land Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Business Segment Reporting

Business Segment Reporting

3 Months Ended

Mar. 31, 2019

During the periods presented, we reported our financial performance based on the following segments: Land and Resource Management and Water Service and Operations. Our segments provide management with a comprehensive financial view of our key businesses. The segments enable the alignment of strategies and objectives of the Trust and provide a framework for timely and rational allocation of resources within businesses. We eliminate any inter-segment revenues and expenses upon consolidation.

The Land and Resource Management segment encompasses the business of managing approximately 900,000 acres of land and related resources in West Texas owned by the Trust. The revenue streams of this segment consist primarily of royalties from oil and gas, revenues from easements and leases, and land sales.

The Water Service and Operations segment encompasses the business of providing a full-service water offering to operators in the Permian Basin as well as managing agreements with energy companies and oilfield service businesses to allow such companies to explore for water, drill water wells, construct water-related infrastructure and purchase water sourced from land that we own. The revenue streams of this segment consist of revenue generated from direct sales of water as well as revenues from royalties on water service-related activity.

Segment financial results were as follows for the three months ended March 31, 2019 and 2018 (in thousands):



	Three Months Ended March 31,
	2019		2018
Revenues:
Land and resource management	$	160,459	$	42,753
Water service and operations	30,865		17,254
Total consolidated revenues	$	191,324	$	60,007

Net income:
Land and resource management	$	123,117	$	32,811
Water service and operations	16,881		10,980
Total consolidated net income	$	139,998	$	43,791

Capital expenditures
Land and resource management	$	534	$	1,252
Water service and operations	8,713		10,589
Total capital expenditures	$	9,247	$	11,841

Depreciation and amortization:
Land and resource management	$	177	$	70
Water service and operations	1,027		260
Total depreciation and amortization	$	1,204	$	330

The following table presents total assets and property, plant and equipment, net by segment as of March 31, 2019 and December 31, 2018 (in thousands):



	March 31, 2019		December 31, 2018
Assets:
Land and resource management	$	297,450	$	198,922
Water service and operations	107,456		86,153
Total consolidated assets	$	404,906	$	285,075

Property, plant and equipment, net
Land and resource management	$	4,052	$	3,720
Water service and operations	68,769		61,082
Total consolidated property, plant and equipment, net	$	72,821	$	64,802