Cross Timbers Royalty Trust Files Annual Report on Form 10-K for Fiscal Year Ended December 31, 2023

TL;DR

<b>Cross Timbers Royalty Trust has filed its 2023 annual report detailing its financial and operational status.</b>

AI Summary

CROSS TIMBERS ROYALTY TRUST (CRT) filed a Annual Report (10-K) with the SEC on April 1, 2024. Cross Timbers Royalty Trust filed its annual report on Form 10-K for the fiscal year ended December 31, 2023. The trust is incorporated in Texas and its IRS Employer Identification No. is 75-6415930. The principal executive offices are located at 3838 Oak Lawn Ave, Suite 1720, Dallas, Texas. The registrant's telephone number is (855) 588-7839. Units of Beneficial Interest are traded under the symbol CRT on the New York Stock Exchange.

Why It Matters

For investors and stakeholders tracking CROSS TIMBERS ROYALTY TRUST, this filing contains several important signals. This filing provides a comprehensive overview of the trust's performance and financial position for the fiscal year 2023, crucial for investors to assess its value and future prospects. The 10-K report contains essential information regarding the trust's assets, liabilities, revenues, and risks, enabling stakeholders to make informed investment decisions.

Risk Assessment

Risk Level: low — CROSS TIMBERS ROYALTY TRUST shows low risk based on this filing. The filing is a standard annual report (10-K) with no immediate red flags, indicating a routine disclosure process.

Analyst Insight

Review the detailed financial statements and risk factors within the 10-K to understand Cross Timbers Royalty Trust's performance and outlook for 2023.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period)
• 2024-04-01 — Filing Date (Date of submission)
• 75-6415930 — IRS Number (Tax identification number)
• CRT — Trading Symbol (Stock ticker)

Key Players & Entities

• Cross Timbers Royalty Trust (company) — Registrant name
• 2023-12-31 (date) — Fiscal year end
• 2024-04-01 (date) — Filing date
• Texas (location) — State of incorporation
• 75-6415930 (identifier) — IRS Employer Identification No.
• Argent Trust Company (company) — Corporate Trustee
• 3838 Oak Lawn Ave, Suite 1720, Dallas, Texas (address) — Principal executive offices
• CRT (ticker) — Trading symbol

FAQ

Industry Context

Cross Timbers Royalty Trust operates within the oil and gas royalty sector, focusing on the ownership and management of royalty interests in producing oil and natural gas properties.

Regulatory Implications

The filing is made under the Securities Exchange Act of 1934, requiring annual reports from publicly traded companies and trusts to ensure transparency and provide information to investors.

What Investors Should Do

1. Analyze the financial statements for revenue, expenses, and net income for the fiscal year 2023.
2. Review the 'Risk Factors' section to understand potential challenges and uncertainties facing the trust.
3. Examine any disclosures related to operational performance or significant business developments during 2023.

Key Dates

• 2023-12-31: Fiscal Year End — Marks the end of the reporting period for the 10-K filing.
• 2024-04-01: Filing Date — Date the 10-K report was officially submitted to the SEC.

Year-Over-Year Comparison

This is the initial 10-K filing for the fiscal year ended December 31, 2023, following the standard annual reporting requirements.

Key Financial Figures

• $132.2 million — econd fiscal quarter) was approximately $132.2 million. The number of units of beneficial in

Filing Documents

• d752515d10k.htm (10-K) — 557KB
• d752515dex23.htm (EX-23) — 4KB
• d752515dex31.htm (EX-31) — 11KB
• d752515dex32.htm (EX-32) — 4KB
• d752515dex97.htm (EX-97) — 25KB
• d752515dex991.htm (EX-99.1) — 36KB
• 0001193125-24-083456.txt (&nbsp;) — 638KB

Business

Business 2 Item 1A.

Risk Factors

Risk Factors 4 Item 1B. Unresolved Staff Comments 9 Item 1C. Cybersecurity 9 Item 2.

Properties

Properties 10 Item 3.

Legal Proceedings

Legal Proceedings 19 Item 4. Mine Safety Disclosures 19 Part II Item 5. Market for Units of the Trust, Related Unitholder Matters and Trust Purchases of Units 19 Item 6. [Reserved] 20 Item 7. Trustees Discussion and Analysis of Financial Condition and Results of Operations 21 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 27 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 27 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 39 Item 9A.

Controls and Procedures

Controls and Procedures 39 Item 9B. Other Information 39 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 39 Part III Item 10. Directors, Executive Officers and Corporate Governance 40 Item 11.

Executive Compensation

Executive Compensation 40 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Unitholder Matters 40 Item 13. Certain Relationships and Related Transactions, and Director Independence 40 Item 14. Principal Accountant Fees and Services 41 Part IV Item 15. Exhibits and Financial Statement Schedules 42

Signatures

Signatures Table of Contents Glossary of Terms The following is a glossary of certain defined terms used in this Annual Report on Form 10-K. GLOSSARY Bbl Barrel (of oil) Bcf Billion cubic feet (of natural gas) BOE Barrel of oil equivalent gross acres or gross wells The total acres or wells, as the case may be, in which a working interest is owned Mcf Thousand cubic feet (of natural gas) MMBtu One million British Thermal Units, a common energy measurement net acres or net wells The sum of the fractional working interests owned in gross acres or wells, as the case may be net proceeds Gross proceeds received by XTO Energy from sale of production from the underlying properties, less applicable costs, as defined in the net profits interest conveyances net profits income Net proceeds multiplied by the applicable net profits percentage of 75% or 90%, which is paid to the Trust by XTO Energy. Net profits income is referred to as royalty income for income tax purposes. net profits interest An interest in an oil and gas property measured by net profits from the sale of production, rather than a specific portion of production. The following defined net profits interests were conveyed to the Trust from the underlying properties: 90% net profits interests interests that entitle the Trust to receive 90% of the net proceeds from the underlying properties that are substantially all royalty or overriding royalty interests in Texas, Oklahoma and New Mexico 75% net profits interests interests that entitle the Trust to receive 75% of the net proceeds from the underlying properties that are working interests in Texas and Oklahoma royalty interest (and overriding royalty interest) A non-operating interest in an oil and gas property that provides the owner a specified share of production without any production expense or development costs underlying properties XTO Energys interest in certain oil and gas properties from which the n

BUSINESS

BUSINESS Cross Timbers Royalty Trust (the Trust) is an express trust created under the laws of Texas pursuant to the Cross Timbers Royalty Trust Indenture entered into on February 12, 1991 between predecessors of XTO Energy Inc. (formerly known as Cross Timbers Oil Company and, hereafter, XTO Energy), as grantors, and NCNB Texas National Bank, as Trustee. The current trustee of the Trust is Argent Trust Company, a Tennessee chartered trust company (Argent). Effective December 30, 2022, Simmons Bank resigned as trustee, and Argent was appointed as the successor trustee. The defined term Trustee as used herein shall refer to Simmons Bank for periods from February 20, 2018, through December 29, 2022, and shall refer to Argent for periods on and after December 30, 2022. The principal office of the Trust is 3838 Oak Lawn Ave, Suite 1720, Dallas, Texas 75219. The telephone number of the Trust is 1-855-588-7839. The Trusts internet website is www.crt-crosstimbers.com . We make available free of charge, through our website, our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. These reports are accessible through our internet website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission. Information on our website is not incorporated into this report. On February 12, 1991, the predecessors of XTO Energy conveyed defined net profits interests to the Trust under five separate conveyances: 1. one in each of the states of Texas, Oklahoma and New Mexico, to convey a 90% defined net profits interest carved out of substantially all royalty and overriding royalty interests owned by the predecessors in those states, and 2. one in each of the states of Texas and Oklahoma, to convey a 75% defined net profits interest carv

RISK FACTORS

RISK FACTORS The following factors could cause actual results to differ materially from those contained in forward-looking statements made in this report and presented elsewhere by the Trustee from time to time. Such factors may have a material adverse effect upon the Trusts financial condition, distributable income and changes in trust corpus. The following discussion of risk factors should be read in conjunction with the financial statements and related notes included under Item 8. Financial Statements and Supplementary Data . Because of these and other factors, past financial performance should not be considered an indication of future performance. The market price for the Trust units may not reflect the value of the net profits interests held by the Trust. The public trading price for the Trust units tends to be tied to the recent and expected levels of cash distributions on the Trust units. The amounts available for distribution by the Trust vary in response to numerous factors outside the control of the Trust or XTO Energy, including prevailing prices for oil and natural gas produced from the underlying properties. The market price of the Trust units is not necessarily indicative of the value that the Trust would realize if the net profits interests were sold to a third-party buyer. In addition, such market price is not necessarily reflective of the fact that, since the assets of the Trust are depleting assets, a portion of each cash distribution paid on the Trust units should be considered by investors as a return of capital, with the remainder being considered as a return on investment. There is no guarantee that distributions made to a unitholder over the life of these depleting assets will equal or exceed the purchase price paid by the unitholder. Current and future oil and natural gas prices fluctuate due to a number of uncontrollable factors, and any decline will adversely affect the net proceeds payable to the Trust and Trust distributions.

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