Cross Timbers Royalty Trust (CRT) net profits income falls 44% in first half 2026

Rhea-AI Filing Summary

Cross Timbers Royalty Trust reported weaker results for the three and six months ended June 30, 2026. Net profits income was $1,088,155 for the quarter, down 16% from second quarter 2025, and $1,862,336 for the first six months, a 44% decrease from the prior-year period, driven mainly by lower oil and gas production, higher overhead and production expenses, and lower natural gas prices, partly offset by favorable excess costs activity.

Quarterly distributable income was $861,180, or $0.143530 per unit, versus $892,548, or $0.148758 per unit, a year earlier. For the first half of 2026, distributable income was $1,364,586, or $0.227431 per unit, compared with $2,676,486, or $0.446081 per unit, in 2025. Underlying oil volumes declined 19% and gas volumes 26% for the six‑month period, reflecting timing of receipts and natural declines.

Cumulative excess costs on the Texas and Oklahoma working interest conveyances totaled $6.8 million underlying, or $5.1 million net to the Trust, including $1.7 million of accrued interest. The Trust held $1.76 million in cash and short-term investments, an expense reserve of $1.5 million, and net profits interests with a carrying value of $2.09 million as of June 30, 2026. The Trustee recorded no impairment of the net profits interests and concluded disclosure controls and procedures were effective.

Positive

• None.

Negative

• Net profits income down 44% for the first six months of 2026 to $1,862,336, significantly reducing cash available for distributions.
• Distributable income per unit fell to $0.227431 for the first half of 2026 from $0.446081 in 2025, materially lowering unitholder cash flow.
• Cumulative excess costs of $6.8 million underlying ($5.1 million net) with $1.7 million accrued interest must be recovered before full working‑interest cash flows benefit the Trust.
• Underlying production volumes declined, with six‑month oil volumes down 19% and gas volumes down 26%, pressuring revenue despite higher oil prices.

Filing Explained

A May 1 operator transition changed who operates the properties underlying the Trust’s 75% net profits interests; no ownership or dilution change is disclosed.

This Form 10-Q is an unaudited interim report covering June 30, 2026; its material structural update is that XTO Energy and ExxonMobil no longer operate or control any properties underlying the Trust’s 75% net profits interests.

The Trust’s net profits interests entitle it to a stated share of net proceeds rather than a specific share of production, and the 75% interests remain subject to production, development, operating and overhead deductions.

The accounts use a modified cash basis: revenue is recorded when received and expenses when paid, rather than when production or expenses occur.

The filing states that income received in the quarter generally reflects oil production from February through April and gas production from January through March, so the reported period does not correspond exactly to production during the quarter.

The operator transition became effective May 1, 2026; future reports will show how amounts deducted and production results are reported for the affected properties under the new operator.

Key Figures

Total assets: $3,857,352 Cash and short-term investments: $1,760,319 Net profits interests carrying value: $2,092,236 +5 more

8 metrics

Total assets $3,857,352 Assets at June 30, 2026

Cash and short-term investments $1,760,319 Cash position at June 30, 2026

Net profits interests carrying value $2,092,236 Net profits interests in oil and gas properties at June 30, 2026

Expense reserve $1,500,000 Reserve funded for Trust obligations at June 30, 2026

Q2 2026 distributable income $861,180 Three months ended June 30, 2026

Q2 2026 distributable income per unit $0.143530 6,000,000 units outstanding

H1 2026 distributable income per unit $0.227431 Six months ended June 30, 2026

Cumulative excess costs net to Trust $5,095,110 Texas and Oklahoma working interest net profits interests at June 30, 2026

Key Terms

net profits interests, grantor trust, excess costs, passive entities, +2 more

6 terms

net profits interests financial

"Net profits interests in oil and gas properties - net (Note 1)"

A net profits interest is a non‑operating claim on the earnings from a specific asset (commonly oil, gas, or mineral production) that pays its holder a percentage of the money left over after production revenues and agreed costs are deducted. Think of it like owning a share of the profits from a single project without running it; payouts can be attractive but fluctuate with output and expenses, so investors use NPIs to gain income exposure while avoiding operating responsibilities.

grantor trust financial

"For federal income tax purposes, the Trust constitutes a fixed investment trust that is taxed as a grantor trust."

A grantor trust is a legal arrangement where the person who puts assets into the trust keeps enough control or rights that, for tax and legal purposes, those assets are treated as still belonging to that person. For investors, that matters because income, gains and losses generated by the trust typically flow through to the grantor (or directly to investors) for tax reporting and distributions, affecting after-tax returns and cash flow predictability — think of it like a mailbox that forwards all the mail back to the sender rather than holding it inside.

excess costs financial

"If monthly costs exceed revenues for any conveyance, such excess costs must be recovered, with accrued interest, from future net proceeds."

Excess costs are expenses a company incurs that are above its normal or expected operating costs—unexpected charges, one-time losses, or spending beyond budget, like a household suddenly paying for major repairs. They matter to investors because they can temporarily or permanently reduce profits and cash flow, and frequent or large excess costs may signal operational problems or higher risk, helping investors decide whether a profit hit is a short-term anomaly or a lasting issue.

passive entities financial

"Trusts that receive at least 90 percent of their federal gross income from certain passive sources ... are exempt ... as “passive entities.”"

unit-of-production basis financial

"Amortization of the net profits interests is calculated on a unit‑of‑production basis using proved reserves."

expense reserve financial

"Expense reserve allows the Trustee to pay its obligations should it be unable to pay them out of the net profits income."

Earnings Snapshot

Net profits income Q2 2026: $1,088,155

Three and six months ended June 30, 2026

Net profits income Q2 2026 $1,088,155 -16% vs Q2 2025

Net profits income H1 2026 $1,862,336 -44% vs H1 2025

Distributable income per unit Q2 2026 $0.143530 down from $0.148758 in Q2 2025

Distributable income per unit H1 2026 $0.227431 down from $0.446081 in H1 2025

FAQ

How did CRT’s net profits income change in the second quarter of 2026?

Net profits income for CRT was $1,088,155 in the quarter ended June 30, 2026, a 16% decrease from $1,293,766 in second quarter 2025, mainly due to excess costs activity, lower gas prices, and reduced gas production, partly offset by stronger oil pricing and lower expenses.

What was Cross Timbers Royalty Trust (CRT) distributable income per unit for Q2 2026?

For Q2 2026, CRT reported distributable income of $0.143530 per unit, compared with $0.148758 per unit a year earlier. Total distributable income was $861,180, after net profits income of $1,088,155, interest income, and administration expenses of $240,566.

How did CRT’s first-half 2026 results compare with 2025?

For the six months ended June 30, 2026, CRT’s net profits income was $1,862,336, a 44% decline from $3,347,160 in 2025. Distributable income fell to $1,364,586, or $0.227431 per unit, versus $2,676,486, or $0.446081 per unit, in the prior year.

What excess costs does Cross Timbers Royalty Trust (CRT) report as of June 30, 2026?

Underlying cumulative excess costs on CRT’s Texas and Oklahoma working interest conveyances totaled $6.8 million, or $5.1 million net to the Trust, including $1.7 million in accrued interest. These excess costs must be recovered from future net proceeds before full net profits income is realized.

How did production volumes and prices affect CRT in first-half 2026?

Underlying oil volumes decreased 19% and gas volumes 26% for the six months ended June 30, 2026. The average oil price fell 5% to $65.07 per Bbl, while gas prices decreased 4% to $4.53 per Mcf, pressuring revenues despite some cost reductions.

Did Cross Timbers Royalty Trust (CRT) record any impairment on its net profits interests?

CRT reported that no impairment was recorded on its net profits interests during the second quarter of 2026. The Trustee concluded no trigger event occurred that required an impairment assessment, so the carrying value remained based on expected future cash flows.

AI-generated analysis. How Rhea-AI works. Not financial advice.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now

10-Q Quarterly Reports: What Changes Quarter to Quarter →

Available on EDGAR 08/13/2026 - 01:20 PM Accepted by SEC EDGAR 08/13/2026 - 01:19 PM Learn about SEC filing dates

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

CROSS TIMBERS ROYALTY TRUST

(Exact name of registrant as specified in its charter)

Texas	1-10982	75-6415930
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

c/o The Corporate Trustee:

Argent Trust Company

3838 Oak Lawn Ave, Suite 1720

Dallas, Texas 75219-4518

(Address of principal executive offices) (Zip Code)

(Registrant’s telephone number, including area code) (855) 588-7839

(Former name, former address and former fiscal year, if change since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Units of Beneficial Interest		CRT		New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer		☐		Accelerated filer		☐
Non-accelerated filer				Smaller reporting company		
				Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

Indicate the number of units of beneficial interest outstanding, as of the latest practicable date:

Outstanding as of August 13, 2026

6,000,000

Table of Contents

CROSS TIMBERS ROYALTY TRUST

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

TABLE OF CONTENTS

Glossary of Terms		3
PART I ‑ FINANCIAL INFORMATION		4
Item 1.	Financial Statements (Unaudited)	4
	Condensed Statements of Assets, Liabilities and Trust Corpus at June 30, 2026 and December 31, 2025	5
	Condensed Statements of Distributable Income for the Three and Six Months Ended June 30, 2026 and 2025	6
	Condensed Statements of Changes in Trust Corpus for the Three and Six Months Ended June 30, 2026 and 2025	7
	Notes to Condensed Financial Statements	8
Item 2.	Trustee’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4.	Controls and Procedures	15
PART II - OTHER INFORMATION		16
Item 1A.	Risk Factors	16
Item 5.	Other Information	16
Item 6.	Exhibits	16
Signatures		17

Table of Contents

CROSS TIMBERS ROYALTY TRUST

GLOSSARY OF TERMS

The following are definitions of significant terms used in this Form 10-Q:

Bbl		Barrel (of oil)
Mcf		Thousand cubic feet (of natural gas)
MMBtu		One million British Thermal Units, a common energy measurement
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 Energy’s interest in certain oil and gas properties from which the net profits interests were conveyed. The underlying properties include royalty and overriding royalty interests in producing and nonproducing properties in Texas, Oklahoma and New Mexico, and working interests in producing properties located in Texas and Oklahoma.
working interest		An operating interest in an oil and gas property that provides the owner a specified share of production that is subject to all production expense and development costs.

3

Table of Contents

CROSS TIMBERS ROYALTY TRUST

PART I ‑ FINANCIAL INFORMATION

Item 1. Financial Statements

The condensed financial statements included herein are presented, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Unless specified otherwise, all amounts included herein are presented in U.S. dollars. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted pursuant to such rules and regulations, although the Trustee believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto included in the Trust’s latest Annual Report on Form 10‑K. In the opinion of the Trustee, all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the assets, liabilities and trust corpus of the Cross Timbers Royalty Trust at June 30, 2026, and the distributable income and changes in trust corpus for the three-month and six-month periods ended June 30, 2026 and 2025, have been included. Distributable income for such interim periods is not necessarily indicative of the distributable income for the full year.

4

Table of Contents

CROSS TIMBERS ROYALTY TRUST

Condensed Statements of Assets, Liabilities and Trust Corpus (Unaudited)

		June 30, 2026					December 31, 2025
ASSETS
Cash and short-term investments		$		1,760,319			$		2,133,676
Interest to be received				4,797					4,554
Net profits interests in oil and gas properties - net (Note 1)				2,092,236					2,158,420
		$		3,857,352			$		4,296,650
LIABILITIES AND TRUST CORPUS
Distribution payable to unitholders		$		265,116			$		688,230
Expense reserve (a)				1,500,000					1,450,000
Trust corpus (6,000,000 units of beneficial interest authorized and outstanding)				2,092,236					2,158,420
		$		3,857,352			$		4,296,650

(a)Expense reserve allows the Trustee to pay its obligations should it be unable to pay them out of the net profits income. The reserve is currently funded at $1,500,000.

The accompanying notes to condensed financial statements are an integral part of these statements.

5

Table of Contents

CROSS TIMBERS ROYALTY TRUST

Condensed Statements of Distributable Income (Unaudited)

		Three Months Ended June 30										Six Months Ended June 30
		2026					2025					2026					2025
Net profits income		$		1,088,155			$		1,293,766			$		1,862,336			$		3,347,160
Interest income				13,591					11,982					27,257					23,988
Total income				1,101,746					1,305,748					1,889,593					3,371,148
Administration expense				240,566					263,200					475,007					544,662
Expense reserve				—					150,000					50,000					150,000
Distributable income		$		861,180			$		892,548			$		1,364,586			$		2,676,486
Distributable income per unit (6,000,000 units)		$		0.143530			$		0.148758			$		0.227431			$		0.446081

The accompanying notes to condensed financial statements are an integral part of these statements.

6

Table of Contents

CROSS TIMBERS ROYALTY TRUST

Condensed Statements of Changes in Trust Corpus (Unaudited)

		Three Months Ended June 30										Six Months Ended June 30
		2026					2025					2026					2025
Trust corpus, beginning of period		$		2,125,206			$		2,346,714			$		2,158,420			$		2,433,344
Amortization of net profits interests				(32,970	)				(56,670	)				(66,184	)				(143,300	)
Distributable income				861,180					892,548					1,364,586					2,676,486
Distributions declared				(861,180	)				(892,548	)				(1,364,586	)				(2,676,486	)
Trust corpus, end of period		$		2,092,236			$		2,290,044			$		2,092,236			$		2,290,044

The accompanying notes to condensed financial statements are an integral part of these statements.

7

Table of Contents

CROSS TIMBERS ROYALTY TRUST

Notes to Condensed Financial Statements (Unaudited)

1.Basis of Accounting

The financial statements of Cross Timbers Royalty Trust (the “Trust”) are prepared on the following basis and are not intended to present financial position and results of operations in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”):

-	Net profits income recorded for a month is the amount computed and paid by XTO Energy Inc. (“XTO Energy”), the owner of the underlying properties, to Argent Trust Company, as trustee (the “Trustee”) for the Trust. XTO Energy is a wholly owned subsidiary of Exxon Mobil Corporation. Net profits income consists of net proceeds received by XTO Energy from the underlying properties in the prior month, multiplied by a net profits percentage of 90% for the 90% net profits interests, and 75% for the 75% net profits interests.
-	Costs deducted in the calculation of net proceeds for the 90% net profits interests generally include applicable taxes, transportation, marketing and legal costs. In addition to those costs, the 75% net profits interests include deductions for production expense, development costs, operating charges and other costs.
-	Net profits income is computed separately for each of the five conveyances under which the net profits interests were conveyed to the Trust. If monthly costs exceed revenues for any conveyance, such excess costs must be recovered, with accrued interest, from future net proceeds of that conveyance and cannot reduce net proceeds from the other conveyances.
-	Interest income and distribution payable to unitholders include interest earned on the previous month’s investment.
-	Trust expenses are recorded based on liabilities paid and cash reserves established by the Trustee for liabilities and contingencies.
-	Distributions to unitholders are recorded when declared by the Trustee.

The Trust’s financial statements differ from those prepared in conformity with U.S. GAAP because revenues are recognized when received rather than accrued in the month of production, expenses are recognized when paid rather than when incurred, and certain cash reserves may be established by the Trustee for contingencies which would not be recorded under U.S. GAAP. This comprehensive basis of accounting other than U.S. GAAP corresponds to the accounting permitted for royalty trusts by the U.S. Securities and Exchange Commission, as specified by Staff Accounting Bulletin Topic 12:E, Financial Statements of Royalty Trusts.

Most accounting pronouncements apply to entities whose financial statements are prepared in accordance with U.S. GAAP, directing such entities to accrue or defer revenues and expenses in a period other than when such revenues were received or expenses were paid. Because the Trust’s financial statements are prepared on the modified cash basis, as described above, most accounting pronouncements are not applicable to the Trust’s financial statements.

Impairment of Net Profits Interests

The Trustee reviews the Trust’s net profits interests (“NPI”) in oil and gas properties for impairment whenever events or circumstances indicate that the carrying value of the NPI may not be recoverable. In general, the Trustee does not view temporarily low prices as an indication of impairment. The markets for crude oil and natural gas have a history of significant price volatility and, though prices will occasionally drop significantly, industry prices over the long term will continue to be driven by market supply and demand. If events and circumstances indicate the carrying value may not be recoverable, the Trustee would use the estimated undiscounted future net cash flows from the NPI to evaluate the recoverability of the Trust assets. If the undiscounted future net cash flows from the NPI are less than the NPI carrying value, the Trust would recognize an impairment loss for the difference between the NPI carrying value and the estimated fair value of the NPI. The determination as to whether the NPI is impaired requires a significant amount of judgment by the Trustee and is based on the best information available to the Trustee at the time of the evaluation, including

8

Table of Contents

commodity pricing and other information provided by XTO Energy such as estimates of future production and development and operating expenses.

During the second quarter of 2026, no trigger event occurred that would indicate a need for an impairment assessment. Accordingly, there was no impairment of the NPI as of June 30, 2026. Any impairment recorded for book purposes would not result in a loss for tax purposes for the unitholders until the loss is recognized.

Net profits interests in oil and gas properties

The initial carrying value of the net profits interests of $61,100,449 represents XTO Energy’s historical net book value for the interests on February 12, 1991, the creation date of the Trust. Amortization of the net profits interests is calculated on a unit‑of‑production basis using proved reserves and is charged directly to trust corpus. Accumulated amortization was $59,008,213 as of June 30, 2026, and $58,942,029 as of December 31, 2025. Amortization of the NPI does not impact unitholder distributions.

2.Income Taxes

For federal income tax purposes, the Trust constitutes a fixed investment trust that is taxed as a grantor trust. A grantor trust is not subject to tax at the trust level. Accordingly, no provision for income taxes has been made in the financial statements. The unitholders are considered, for federal income tax purposes, to own the Trust’s income and principal as though no trust were in existence. The income of the Trust is deemed to have been received or accrued by each unitholder at the time such income is received or accrued by the Trust and not when distributed by the Trust. Impairments recorded for book purposes will not result in a deductible loss by the unitholders for tax purposes until the loss is recognized.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The legislation introduces several significant federal income tax changes, including the permanent extension of the income tax rates established by the Tax Cuts and Jobs Act, the continued suspension of miscellaneous itemized deductions, and the reinstatement of favorable tax treatment for certain business provisions. The OBBBA contains multiple effective dates, with some provisions having taken effect in 2025 and others phased in through 2027. Unitholders are encouraged to consult their own tax advisor regarding the potential income tax consequences of the OBBBA and its impact on their ownership of Trust units.

All revenues from the Trust are from sources within Texas, Oklahoma or New Mexico. Because the Trust distributes all of its net income to unitholders, the Trust has not been taxed at the trust level in New Mexico or Oklahoma. While the Trust has not owed tax, the Trustee is required to file an Oklahoma income tax return reflecting the income and deductions of the Trust attributable to properties located in that state, along with a schedule that includes information regarding distributions to unitholders. Oklahoma and New Mexico tax the income of nonresidents from real property located within those states, and the Trust has been advised by counsel that such states will tax nonresidents on income from the net profits interests located in those states. Oklahoma and New Mexico also impose a corporate income tax that may apply to unitholders organized as corporations (subject to certain exceptions for S corporations and limited liability companies, depending on their treatment for federal income tax purposes).

Texas imposes a franchise tax at a rate of 0.75 percent on gross revenues less certain deductions, as specifically set forth in the Texas franchise tax statutes. Entities subject to tax generally include trusts and most other types of entities that provide limited liability protection, unless otherwise exempt. Trusts that receive at least 90 percent of their federal gross income from certain passive sources, including royalties from mineral properties and other non-operated mineral interest income, and do not receive more than 10 percent of their income from operating an active trade or business, generally are exempt from the Texas franchise tax as “passive entities.” The Trust has been and expects to continue to be exempt from Texas franchise tax as a passive entity. Because the Trust should be exempt from Texas franchise tax at the trust level as a passive entity, each unitholder that is a taxable entity under the Texas franchise tax will generally be required to include its Texas portion of Trust revenues in its own Texas franchise tax computation. This revenue is sourced to Texas under provisions of the Texas Administrative Code providing that such income is sourced according to the principal place of business of the Trust, which is Texas.

Each unitholder should consult their own tax advisor regarding income tax requirements, if any, applicable to such person’s ownership of Trust units.

9

Table of Contents

Unitholders should consult the Trust’s latest Annual Report on Form 10-K for a more detailed discussion of federal and state tax matters.

3.Contingencies

Several states have enacted legislation requiring state income tax withholding from payments made to nonresident recipients of oil and gas proceeds. After consultation with its tax counsel, the Trustee believes that it is not required to withhold on payments made to the unitholders. However, regulations are subject to change by the various states, which could change this conclusion. Should amounts be withheld on payments made to the Trust or the unitholders, distributions to the unitholders would be reduced by the required amount, subject to the filing of a claim for refund or credit (to the extent available) by the Trust or unitholders for such amount.

4.Excess Costs

If monthly costs exceed revenues for any conveyance, such excess costs must be recovered, with accrued interest, from future net proceeds of that conveyance and cannot reduce net proceeds from other conveyances.

The following summarizes excess costs activity, cumulative excess costs balances and accrued interest to be recovered by conveyance as calculated by XTO Energy:

		Underlying
		TX WI				OK WI				Total
Cumulative excess costs remaining at 12/31/25		$	3,990,865			$	—			$	3,990,865
Net excess costs (recovery) for the quarter ended 3/31/26			210,012				888,779				1,098,791
Net excess costs (recovery) for the quarter ended 6/30/26			90,021				(71,300	)			18,721
Cumulative excess costs remaining at 6/30/26			4,290,898				817,479				5,108,377
Accrued interest at 6/30/26			1,660,092				25,011				1,685,103
Total remaining to be recovered at 6/30/26		$	5,950,990			$	842,490			$	6,793,480
		NPI
		TX WI				OK WI				Total
Cumulative excess costs remaining at 12/31/25		$	2,993,150			$	—			$	2,993,150
Net excess costs (recovery) for the quarter ended 3/31/26			157,509				666,585				824,094
Net excess costs (recovery) for the quarter ended 6/30/26			67,516				(53,476	)			14,040
Cumulative excess costs remaining at 6/30/26			3,218,175				613,109				3,831,284
Accrued interest at 6/30/26			1,245,068				18,758				1,263,826
Total remaining to be recovered at 6/30/26		$	4,463,243			$	631,867			$	5,095,110

For the quarter ended June 30, 2026, excess costs were $90,021 ($67,516 net to the Trust) on properties underlying the Texas working interest net profits interests.

For the quarter ended June 30, 2026, excess costs of $71,300 ($53,476 net to the Trust) were recovered on properties underlying the Oklahoma working interest net profits interests.

Underlying cumulative excess costs for the Texas and Oklahoma working interest conveyances remaining as of June 30, 2026, totaled $6.8 million ($5.1 million net to the Trust), including accrued interest of $1.7 million ($1.3 million net to the Trust).

5.Related Party Transactions

In computing net proceeds for the 75% net profits interests, XTO Energy deducts an overhead charge as reimbursement for costs associated with monitoring these interests. This monthly overhead charge as of June 30, 2026, was $53,459 ($40,094 net to the Trust) and is subject to annual adjustment based on an oil and gas industry index.

XTO Energy transferred operatorship of the Hewitt Unit, which is one of the properties underlying the Oklahoma 75% net profits interests, to Scout Energy Management LLC effective May 1, 2026. While operator of the Hewitt Unit, XTO

10

Table of Contents

Energy deducted a monthly overhead charge for reimbursement of administrative expenses. As of June 30, 2026, this monthly charge was approximately $35,392 ($26,544 net to the Trust) and was subject to annual adjustment based on an oil and gas industry index. As of May 1, 2026, XTO Energy and ExxonMobil do not operate or control any of the properties underlying the 75% net profits interests.

6.Administration Expense

Administrative expenses are incurred so that the Trustee may meet its reporting obligations to the unitholders and regulatory entities and otherwise manage the administrative functions of the Trust. These obligations include, but are not limited to, all expenses, taxes, compensation to the Trustee for managing the Trust, fees to consultants, accountants, attorneys, transfer agents, other professional and expert persons, expenses for clerical and other administrative assistance, and fees and expenses for all other services.

Item 2. Trustee’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Trustee’s discussion and analysis contained in the Trust’s 2025 Annual Report on Form 10-K, as well as the condensed financial statements and notes thereto included in this Quarterly Report on Form 10-Q. The Trust’s Annual Report on Form 10-K, Quarterly Reports on Form 10‑Q, Current Reports on Form 8-K and all amendments to those reports are available on the Trust’s website at www.crt-crosstimbers.com.

Distributable Income

Quarter

For the quarter ended June 30, 2026, net profits income was $1,088,155 compared to $1,293,766 for second quarter 2025. This 16 percent decrease in net profits income is primarily the result of net excess costs activity ($0.3 million), lower gas prices ($0.1 million), decreased gas production ($0.1 million), partially offset by higher oil prices ($0.1 million), decreased production expenses ($0.1 million), and increased oil production ($0.1 million). See “Net Profits Income” below.

After adding interest income of $13,591 and deducting administration expense of $240,566, distributable income for the quarter ended June 30, 2026, was $861,180, or $0.143530 per unit of beneficial interest. Administration expense for the quarter decreased $22,634 from the prior year quarter, primarily related to the timing of receipt and payment of Trust expenses and terms of professional services. Changes in interest income are attributable to fluctuations in net profits income, expense reserve, and interest rates. For second quarter 2025, distributable income was $892,548, or $0.148758 per unit.

Distributions to unitholders for the quarter ended June 30, 2026, were:

Record Date		Payment Date		Distribution per Unit
April 30, 2026		May 14, 2026		$		0.069720
May 29, 2026		June 12, 2026				0.029624
June 30, 2026		July 15, 2026				0.044186
				$		0.143530

Six Months

For the six months ended June 30, 2026, net profits income was $1,862,336 compared to $3,347,160 for the same 2025 period. This 44 percent decrease in net profits income is primarily the result of decreased oil and gas production ($1.4 million), increased overhead costs ($0.5 million), lower oil and gas prices ($0.3 million), and increased production expenses ($0.1 million), partially offset by net excess costs activity ($0.5 million), decreased taxes, transportation and other costs ($0.2 million), and decreased development costs ($0.1 million). See “Net Profits Income” below.

After adding interest income of $27,257, deducting administration expense of $475,007, and increasing the expense reserve $50,000, distributable income for the six months ended June 30, 2026, was $1,364,586, or $0.227431 per unit of beneficial interest. Administration expense for the six months ended June 30, 2026, decreased $69,655 from the prior year six-month

11

Table of Contents

period, primarily related to the timing of receipt and payment of Trust expenses and terms of professional services. Changes in interest income are attributable to fluctuations in net profits income, expense reserve, and interest rates. For the six months ended June 30, 2025, distributable income was $2,676,486, or $0.446081 per unit.

Net Profits Income

Net profits income is recorded when received by the Trust, which is the month following receipt by XTO Energy, and generally two months after oil production and three months after gas production. Net profits income is generally affected by three major factors:

1.oil and gas sales volumes;

2.oil and gas sales prices; and

3.costs deducted in the calculation of net profits income.

Because properties underlying the 90% net profits interests are primarily royalty and overriding royalty interests, the calculation of net profits income from these interests includes deductions for production and property taxes, legal costs, and marketing and transportation charges. In addition to these costs, the calculation of net profits income from the 75% net profits interests includes deductions for production expense, development costs and overhead since the related underlying properties are working interests.

12

Table of Contents

The following is a summary of the calculation of net profits income received by the Trust:

		Three Months Ended									Six Months Ended
		June 30 (a)						Increase			June 30 (a)					Increase
		2026			2025			(Decrease)		2026			2025			(Decrease)
Sales Volumes
Oil (Bbls) (b)
Underlying properties			36,535			35,811		2%			64,654			80,181		(19%)
Average per day			411			402		2%			357			443		(19%)
Net profits interests			8,485			8,518		(0%)			12,767			25,901		(51%)
Gas (Mcf) (b)
Underlying properties			195,389			216,440		(10%)			380,528			517,283		(26%)
Average per day			2,171			2,405		(10%)			2,091			2,842		(26%)
Net profits interests			143,405			161,878		(11%)			287,866			409,404		(30%)
Average Sales Prices
Oil (per Bbl)		$	71.54		$	66.79		7%		$	65.07		$	68.84		(5%)
Gas (per Mcf)		$	4.79		$	5.54		(14%)		$	4.53		$	4.71		(4%)
Revenues
Oil sales		$	2,613,722		$	2,391,955		9%		$	4,206,787		$	5,519,342		(24%)
Gas sales			936,390			1,199,821		(22%)			1,723,960			2,435,157		(29%)
Total Revenues			3,550,112			3,591,776		(1%)			5,930,747			7,954,499		(25%)
Costs
Taxes, transportation and other			379,083			396,510		(4%)			648,077			818,572		(21%)
Production expense (c)			1,980,689			2,088,471		(5%)			4,332,851			3,637,591		19%
Development costs			—			23,171		(100%)			(1,931)			154,413		(101%)
Excess costs (d)			(18,721)			(369,070)		(95%)			(1,117,512)			(435,725)		156%
Total Costs			2,341,051			2,139,082		9%			3,861,485			4,174,851		(8%)
Net Proceeds		$	1,209,061		$	1,452,694		(17%)		$	2,069,262		$	3,779,648		(45%)
Net Profits Income		$	1,088,155		$	1,293,766		(16%)		$	1,862,336		$	3,347,160		(44%)

(a)Because of the interval between time of production and receipt of royalty income by the Trust, (1) oil and gas sales for the quarter ended June 30 generally represent oil production for the period February through April and gas production for the period January through March and (2) oil and gas sales for the six-months ended June 30 generally represent oil production for the period November through April and gas production for the period October through March.

(b)Oil and gas sales volumes are allocated to the net profits interests by dividing Trust net cash inflows by average sales prices. As oil and gas prices change, the Trust’s allocated production volumes are impacted as the quantity of production necessary to cover expenses changes inversely with price. As such, the underlying property production volume changes may not correlate with the Trust’s allocated production volumes in any given period. Therefore, comparative discussion of oil and gas sales volumes is based on the underlying properties.

(c)Production expense includes an overhead charge which is deducted and retained by the operator. XTO Energy deducts an overhead charge as reimbursement for costs associated with monitoring these interests. See Note 5 to Condensed Financial Statements.

(d)See Note 4 to Condensed Financial Statements.

13

Table of Contents

The following are explanations of significant variances on the underlying properties from second quarter 2025 to second quarter 2026 and from the first six months of 2025 to the comparable period in 2026:

Sales Volumes

Oil

Oil sales volumes increased 2 percent for the second quarter primarily due to the timing of cash receipts, partially offset by natural production decline. Oil sales volumes decreased 19 percent for the six-month period primarily due to the timing of cash receipts and natural production decline.

Gas

Gas sales volumes decreased 10 percent for the second quarter and decreased 26 percent for the six-month period primarily because of the timing of cash receipts and natural production decline.

The estimated rate of natural production decline on the underlying oil and gas properties is approximately 6 to 8 percent a year.

Sales Prices

Oil

The average oil price for the second quarter increased 7 percent to $71.54 per Bbl and for the six-month period decreased 5 percent to $65.07 per Bbl.

Gas

Gas prices for the second quarter decreased 14 percent to $4.79 per Mcf and for the six-month period decreased 4 percent to $4.53 per Mcf.

Costs

Taxes, Transportation and Other

Taxes, transportation and other costs decreased 4 percent for the second quarter primarily because of decreased gas deductions. Taxes, transportation and other costs decreased 21 percent for the six-month period primarily because of decreased oil and gas severance taxes on lower revenues and decreased gas deductions.

Production Expense

Production expense decreased 5 percent for the second quarter primarily because of decreased repairs and maintenance, partially offset by increased power and fuel costs, and overhead. Production expense increased 19 percent for the six-month period primarily because of increased overhead, and power and fuel costs, partially offset by decreased repairs and maintenance costs.

Development Costs

Development costs related to properties underlying the 75% net profits interests decreased 100 percent for the second quarter and 101 percent for the six-month period primarily because of the absence of recompletion costs related to the Hewitt Unit.

Excess Costs

If monthly costs exceed revenues for any conveyance, such excess costs must be recovered, with accrued interest, from future net proceeds of that conveyance and cannot reduce net proceeds from any other conveyance. Underlying cumulative excess costs for the Texas and Oklahoma working interest conveyances remaining as of June 30, 2026, totaled $6.8 million ($5.1 million net to the Trust), including accrued interest of $1.7 million ($1.3 million net to the Trust). For further information on excess costs, see Note 4 to Condensed Financial Statements.

14

Table of Contents

Contingencies

For information on contingencies, see Note 3 to Condensed Financial Statements.

Forward-Looking Statements

Certain information included in this Quarterly Report and other materials filed, or to be filed, by the Trust with the Securities and Exchange Commission (as well as information included in oral statements or other written statements made or to be made by XTO Energy or the Trustee) contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, relating to the Trust, operations of the underlying properties and the oil and gas industry. Such forward-looking statements are based on XTO Energy’s and the Trustee’s current plans, expectations, assumptions, projections and estimates and are identified by words such as “may,” “expects,” “intends,” “plans,” “believes,” “estimates,” “should,” “could,” “would,” and similar words that convey the uncertainty of future events. Such forward-looking statements may concern, among other things, development activities, future development plans by area, increased density drilling, reserve-to-production ratios, future production, future net cash flows, maintenance projects, development, production, regulatory and other costs, oil and gas prices and expectations for future supply and demand, the impact of inflation and economic downturns on economic activity, government policy and actions and their impact on oil and gas prices and future supply and demand, the development and competitiveness of alternative energy sources, pricing differentials, proved reserves, production levels, expense reserve budgets, availability of financing, arbitration, litigation, liquidity, financing, political and regulatory matters, such as tax and environmental policy, climate policy, trade barriers, tariffs, sanctions, war and other geopolitical or security disturbances, and competition. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict, including those detailed in Part I, Item 1A of the Trust’s Annual Report on Form 10-K for the year ended December 31, 2025, which is incorporated by this reference as though fully set forth herein. Therefore, actual financial and operational results may differ materially from expectations, estimates or assumptions expressed in, implied in, or forecasted in such forward-looking statements. XTO Energy and the Trustee assume no duty to update these statements as of any future date.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable. Upon qualifying as a smaller reporting company, this information is no longer required.

Item 4. Controls and Procedures

As of the end of the period covered by this report, the Trustee carried out an evaluation of the effectiveness of the Trust’s disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based upon that evaluation, the Trustee concluded that the Trust’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Trust in the reports that it files or submits under the Securities Exchange Act of 1934 and are effective in ensuring that information required to be disclosed by the Trust in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Trustee to allow timely decisions regarding required disclosure. In its evaluation of disclosure controls and procedures, the Trustee has relied, to the extent considered reasonable, on information provided by XTO Energy. There has not been any change in the Trust’s internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.

15

Table of Contents

PART II - OTHER INFORMATION

Item 1A. Risk Factors

There have been no material changes in the risk factors disclosed under Part I, Item 1A of the Trust’s Annual Report on Form 10-K for the year ended December 31, 2025.

Item 5. Other Information

The Trust does not have any directors or officers, and as a result, no such persons adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S‑K, during the most recent fiscal quarter.

Item 6. Exhibits

(31)		Rule 13a-14(a)/15d-14(a) Certification
(32)		Section 1350 Certification
(99)		Items 1A and 7 to the Annual Report on Form 10-K for Cross Timbers Royalty Trust filed with the Securities and Exchange Commission on March 27, 2026 (incorporated herein by reference)

16

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CROSS TIMBERS ROYALTY TRUST
	By ARGENT TRUST COMPANY, TRUSTEE
	By	/s/ NANCY WILLIS
		Nancy Willis
		Director of Royalty Trust Services

	EXXON MOBIL CORPORATION
Date: August 13, 2026	By	/s/ DANIEL BATES
		Daniel Bates
		Unconventional Finance General Manager

(The Trust has no directors or executive officers.)

17