| Business Segment Reporting |
Business Segment Reporting 听
During the periods presented, we reported our financial performance based on the following reportable segments: Land and Resource Management and Water Services and Operations. We eliminate inter-segment revenues and expenses, if any, upon consolidation. There were no inter-segment revenues for the three months ended March听31, 2025 and 2024.
The Land and Resource Management segment encompasses the business of managing our approximately 873,000 surface acres of land and our approximately 207,000 NRA of oil and gas royalty interests, principally concentrated in the Permian Basin. The revenue streams of this segment consist primarily of royalties from oil and gas, revenues from easements and commercial leases, and land and material sales.
The Water Services and Operations segment encompasses the business of providing a full-service water offering to operators in the Permian Basin. The revenue streams of this segment primarily consist of revenue generated from sales of sourced and treated water as well as revenue from produced water royalties.
The following table presents segment financial results for Land and Resource Management (鈥淟RM鈥) and Water Service and Operations (鈥淲SO鈥) and the reconciliation to consolidated financial results for the three months ended March听31, 2025 and 2024 (in thousands):
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Three Months Ended March 31, |
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2025 |
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2024 |
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LRM |
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WSO |
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Consolidated |
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LRM |
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WSO |
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Consolidated |
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| Revenues: |
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| Oil and gas royalties |
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$ |
111,245听 |
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$ |
鈥斕 |
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$ |
111,245听 |
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$ |
92,120听 |
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$ |
鈥斕 |
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$ |
92,120听 |
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| Water sales |
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鈥斕 |
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38,813听 |
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38,813听 |
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鈥斕 |
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37,126听 |
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37,126听 |
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| Produced water royalties |
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鈥斕 |
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27,700听 |
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27,700听 |
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鈥斕 |
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23,006听 |
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23,006听 |
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| Easements and other surface-related income |
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15,336听 |
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2,889听 |
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18,225听 |
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18,121听 |
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2,525听 |
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20,646听 |
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| Land sales |
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鈥斕 |
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鈥斕 |
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鈥斕 |
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1,244听 |
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鈥斕 |
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1,244听 |
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| Total revenues |
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126,581听 |
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69,402听 |
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195,983听 |
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111,485听 |
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62,657听 |
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174,142听 |
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| Expenses: |
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| Salaries and related employee expenses |
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7,404听 |
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7,168听 |
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14,572听 |
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6,465听 |
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5,996听 |
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12,461听 |
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| Water service-related expenses |
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鈥斕 |
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11,126听 |
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11,126听 |
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鈥斕 |
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10,212听 |
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10,212听 |
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| General and administrative expenses |
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3,313听 |
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2,759听 |
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6,072听 |
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6,674听 |
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2,557听 |
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9,231听 |
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| Depreciation, depletion and amortization |
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7,689听 |
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4,252听 |
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11,941听 |
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693听 |
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3,147听 |
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3,840听 |
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| Ad valorem and other taxes |
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2,189听 |
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10听 |
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2,199听 |
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2,356听 |
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1听 |
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2,357听 |
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| Total operating expenses |
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20,595听 |
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25,315听 |
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45,910听 |
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16,188听 |
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21,913听 |
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38,101听 |
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| Operating income |
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105,986听 |
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44,087听 |
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150,073听 |
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95,297听 |
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40,744听 |
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136,041听 |
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| Other income, net |
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3,416听 |
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905听 |
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4,321听 |
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7,930听 |
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2,013听 |
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9,943听 |
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| Income before income taxes |
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109,402听 |
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44,992听 |
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154,394听 |
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103,227听 |
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42,757听 |
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145,984听 |
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| Income tax expense |
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23,858听 |
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9,884听 |
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33,742听 |
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22,256听 |
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9,311听 |
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31,567听 |
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| Net income |
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$ |
85,544听 |
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$ |
35,108听 |
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$ |
120,652听 |
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$ |
80,971听 |
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$ |
33,446听 |
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$ |
114,417听 |
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Interest income by segment is included in other income, net in the table above.
The following tables present capital expenditures, total assets and property, plant and equipment, net by segment for the periods presented (in thousands):
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Three Months Ended
March 31, |
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2025 |
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2024 |
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| Capital Expenditures: |
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| Land and resource management |
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$ |
3听 |
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$ |
51听 |
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| Water services and operations |
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9,905听 |
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5,611听 |
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| Total capital expenditures |
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$ |
9,908听 |
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$ |
5,662听 |
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| 听 |
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March 31,
2025 |
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December 31,
2024 |
| Assets: |
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听 |
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听 |
| Land and resource management |
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$ |
1,127,711听 |
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$ |
1,024,188听 |
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| Water services and operations |
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225,581听 |
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223,832听 |
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| Total consolidated assets |
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$ |
1,353,292听 |
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$ |
1,248,020听 |
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| Property, plant and equipment, net: |
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听 |
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听 |
| Land and resource management |
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$ |
4,608听 |
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$ |
4,805听 |
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| Water services and operations |
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123,860听 |
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117,773听 |
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| Total consolidated property, plant and equipment, net |
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$ |
128,468听 |
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$ |
122,578听 |
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