Common-Size Income Statement
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Texas Pacific Land Corp. pages available for free this week:
- Statement of Comprehensive Income
- Analysis of Profitability Ratios
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
- Operating Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
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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).
- Revenue Composition
- Oil and gas royalties as a percentage of revenues increased substantially from 31.55% in 2019 to a peak of 67.79% in 2022, before declining to 56.59% in 2023. Water sales exhibited fluctuation, rising slightly from 17.32% in 2019 to 18.13% in 2020, then decreasing to 12.69% in 2022 and rising again to 17.77% in 2023. Produced water royalties grew significantly from 7.98% in 2019 to 16.74% in 2020, then declined to a lower range around 10.82%-13.34% for the following years. Easements and other surface-related income showed a decreasing trend from 15.54% in 2019 to 7.20% in 2022, followed by a recovery to 11.23% in 2023. Revenues from land sales and other operating revenue fell sharply from 27.62% in 2019 to marginal levels below 1.5% from 2021 onwards.
- Operating Expenses
- The proportion of salaries and related employee expenses to revenues varied, increasing in 2020 to -10.63%, then generally decreasing with some fluctuations to around -6.87% by 2023. Water service-related expenses were relatively stable, fluctuating modestly between -2.62% and -5.31%. General and administrative expenses saw an increase from -1.99% in 2019 to a higher expense ratio in 2020 (-4.54%), followed by reductions to around -2.36% in 2023. Legal and professional fees showed variability, generally declining until 2022 but increasing sharply to -4.99% in 2023. Ad valorem and other taxes expenses appeared from 2021 onwards, rising to around -1.33% in 2022 before a slight reduction to -1.17% in 2023. Depreciation, depletion, and amortization increased significantly in 2020 to -4.76%, then trended downward to stabilize near -2.34% by 2023. Overall operating expenses as a percentage of revenues increased notably in 2020 to -28.19% but generally decreased thereafter, reaching -23.04% in 2023.
- Operating and Net Income
- Operating income demonstrated resilience, declining from 81.46% in 2019 to a low of 71.81% in 2020 and recovering afterward, peaking at 84.25% in 2022 before a decline to 76.96% in 2023. Income before income taxes followed a similar trajectory mirroring operating income, with a peak at 85.23% in 2022 and slight decline afterward. Income tax expense as a percentage of revenues showed some fluctuation, decreasing from -17.03% in 2019 to -14.41% in 2020, then increasing to above -20% in 2021, before returning to levels just below -18% by 2023. Net income as a percentage of revenues exhibited moderate variation, decreasing from 64.98% in 2019 to 58.19% in 2020, followed by stabilization and moderate increases to 66.88% in 2022 and a small decline to 64.23% in 2023.
- Other Income and Financial Items
- Interest earned on cash and cash equivalents was not present in earlier years but increased from 0.02% in 2021 to 4.53% in 2023, indicating improved returns on cash assets or growing cash balances. Other employee pension costs remained minor but increased slightly over the years. Miscellaneous other income fluctuated at lower levels, exhibiting a slight decrease in recent years but remained positive. Other income net increased notably, especially from 2021 onward, with a marked rise to 4.99% in 2023, which contributed positively to income before taxes.
- Overall Observations
- The data reveals a shift in revenue composition with oil and gas royalties becoming increasingly dominant before a relative decline in the latest year. Expenses fluctuated significantly in 2020, notably increasing, but subsequently demonstrated a trend towards better cost control, though legal fees surged in 2023. Profitability measured by operating income and net income showed resilience, recovering well after 2020 declines and maintaining strong margins around 65%-85%. Growing interest income and other income elements enhanced overall profitability in recent years. Tax expenses varied but remained a significant portion of revenues. The company maintained a strong earnings profile throughout despite some volatility in revenues’ segment composition and expense ratios.