Texas Pacific Land Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Note 9 - Business Segment Reporting

Note 9 - Business Segment Reporting

12 Months Ended

Dec. 31, 2017

Segment Reporting Disclosure [Text Block]

9 .	Business Segment Reporting

In its operation of the

business, management, including our chief operating decision makers, reviews certain financial information, including segmented internal profit and loss statements prepared in accordance with GAAP. 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

890,000

acres of land and related resources in West Texas owned by the Trust. The revenue streams of this segment consist of royalties from oil and gas, land sales, and revenues from easements and leases.

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 revenues from royalties on sales of water as well as revenue generated from direct sales of water.

Segment financial results were as follows

(in thousands):

	Year s Ended December 31,
	2017		2016		2015
Revenues:
Land and resource management	$	101,035	$	51,786	$	74,614
Water service and operations		31,294		8,125		4,801
Total consolidated revenues	$	132,329	$	59,911	$	79,415

Net income:
Land and resource management	$	57,598	$	32,014	$	46,943
Water service and operations		18,763		5,226		3,096
Total consolidated net income	$	76,361	$	37,240	$	50,039

Capital Expenditures:
Land and resource management	$	920	$	478	$	221
Water service and operations		17,827		499		—
Total capital expenditures	$	18,747	$	977	$	221

Depreciation and amortization:
Land and resource management	$	136	$	24	$	25
Water service and operations		240		19		—
Total depreciation and amortization	$	376	$	43	$	25

	December 31, 2017		December 31, 2016

Total Assets:
Land and resource management	$	104,974	$	61,974
Water service and operations		22,486		480
Total consolidated assets	$	127,460	$	62,454

Property, plant and equipment, net:
Land and resource management	$	1,449	$	688
Water service and operations		18,067		480
Total consolidated property, plant and equipment, net	$	19,516	$	1,168