Cross Timbers Royalty Trust (NYSE: CRT) posts lower Q1 2026 cash distributions

Rhea-AI Filing Summary

Cross Timbers Royalty Trust reported sharply lower results for the quarter ended March 31, 2026. Net profits income fell to $774,181 from $2,053,394 a year earlier, mainly due to lower oil and gas production, weaker oil prices, higher overhead and production costs, partially offset by excess-cost recoveries.

Distributable income declined to $503,406, or $0.083901 per unit, versus $1,783,938, or $0.297323 per unit, for first quarter 2025. Underlying oil sales volumes dropped 37% and gas volumes 38%, while average oil prices fell 20%. Production expense rose 52%, and underlying cumulative excess costs on Texas and Oklahoma working interest conveyances reached about $6.7 million ($5.0 million net to the Trust), including $1.6 million of accrued interest.

Positive

• None.

Negative

• Distributable income and payouts declined sharply, with net profits income down 62% year over year and per‑unit distributable income falling from $0.297323 to $0.083901.
• Operating metrics weakened significantly, including 37% lower oil volumes, 38% lower gas volumes and a 52% increase in production expense, pressuring net cash flows.
• Excess costs and related interest have grown, with underlying working‑interest excess costs reaching about $6.7 million ($5.0 million net to the Trust), which must be recovered from future net proceeds.

Insights

Royalty trust and energy cash-flow analyst

Q1 2026 shows materially lower cash flow and rising excess costs.

Cross Timbers Royalty Trust saw net profits income drop from $2.05M to $0.77M, with distributable income per unit falling from $0.297323 to $0.083901. This reflects lower oil and gas volumes, weaker oil prices and significantly higher production expenses.

Underlying oil volumes fell 37% and gas volumes 38%, while production expense increased 52% to $2.35M. Excess costs on Texas and Oklahoma working interest conveyances have grown to about $6.7M underlying ($5.0M net to the Trust), including $1.6M of accrued interest, which must be recovered before those interests resume full contributions.

The Trust maintained a $1.5M expense reserve and recorded no impairment of its net profits interests as of March 31, 2026. Future cash distributions will continue to depend on commodity prices, production trends, operating costs and the pace of recovering these excess costs, as reflected in subsequent quarterly reports.

Key Figures

Net profits income Q1 2026: $774,181 Net profits income Q1 2025: $2,053,394 Distributable income per unit 2026: $0.083901 per unit +5 more

8 metrics

Net profits income Q1 2026 $774,181 Quarter ended March 31, 2026

Net profits income Q1 2025 $2,053,394 Quarter ended March 31, 2025

Distributable income per unit 2026 $0.083901 per unit Three months ended March 31, 2026

Distributable income per unit 2025 $0.297323 per unit Three months ended March 31, 2025

Underlying oil volumes 28,119 Bbls vs 44,370 Bbls Q1 2026 vs Q1 2025 underlying properties

Production expense Q1 2026 $2,352,162 Three months ended March 31, 2026

Production expense Q1 2025 $1,549,120 Three months ended March 31, 2025

Excess costs remaining (underlying) $6.7M (~$5.0M net) Texas and Oklahoma working interest conveyances at March 31, 2026

Key Terms

net profits interests, excess costs, grantor trust, passive entity, +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.

excess costs financial

"If monthly costs exceed revenues for any conveyance, such excess costs must be recovered"

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.

grantor trust financial

"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.

passive entity financial

"The Trust has been and expects to continue to be exempt from Texas franchise tax as a passive entity"

working interest financial

"working interests in producing properties located in Texas and Oklahoma"

The working interest is the percentage ownership one party holds in an oil or gas lease that gives them the right to a share of production and also the obligation to pay a proportional share of exploration, development and operating costs. Think of it like owning a slice of a cake but also agreeing to pay part of the bill to bake it: a larger working interest means bigger potential revenue when wells produce, but also larger exposure to costs and liabilities if things go wrong.

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"

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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 March 31, 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 May 14, 2026

6,000,000

Table of Contents

CROSS TIMBERS ROYALTY TRUST

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 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 March 31, 2026 and December 31, 2025	5
	Condensed Statements of Distributable Income for the Three Months Ended March 31, 2026 and 2025	6
	Condensed Statements of Changes in Trust Corpus for the Three Months Ended March 31, 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	14
Item 4.	Controls and Procedures	14
PART II - OTHER INFORMATION		15
Item 1A.	Risk Factors	15
Item 5.	Other Information	15
Item 6.	Exhibits	15
Signatures		16

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.

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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 March 31, 2026, and the distributable income and changes in trust corpus for the three-month periods ended March 31, 2026 and 2025, have been included. Distributable income for such interim periods is not necessarily indicative of the distributable income for the full year.

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CROSS TIMBERS ROYALTY TRUST

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

			March 31, 2026					December 31, 2025
ASSETS
Cash and short-term investments		$		1,501,426			$		2,133,676
Interest to be received				4,112					4,554
Net profits interests in oil and gas properties - net (Note 1)				2,125,206					2,158,420
		$		3,630,744			$		4,296,650
LIABILITIES AND TRUST CORPUS
Distribution payable to unitholders		$		5,538			$		688,230
Expense reserve (a)				1,500,000					1,450,000
Trust corpus (6,000,000 units of beneficial interest authorized and outstanding)				2,125,206					2,158,420
		$		3,630,744			$		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.

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CROSS TIMBERS ROYALTY TRUST

Condensed Statements of Distributable Income (Unaudited)

			Three Months Ended March 31
			2026					2025
Net profits income		$		774,181			$		2,053,394
Interest income				13,666					12,006
Total income				787,847					2,065,400
Administration expense				234,441					281,462
Expense reserve				50,000					—
Distributable income		$		503,406			$		1,783,938
Distributable income per unit (6,000,000 units)		$		0.083901			$		0.297323

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

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CROSS TIMBERS ROYALTY TRUST

Condensed Statements of Changes in Trust Corpus (Unaudited)

			Three Months Ended March 31
			2026					2025
Trust corpus, beginning of period		$		2,158,420			$		2,433,344
Amortization of net profits interests				(33,214	)				(86,630	)
Distributable income				503,406					1,783,938
Distributions declared				(503,406	)				(1,783,938	)
Trust corpus, end of period		$		2,125,206			$		2,346,714

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

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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

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

During the first 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 March 31, 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 $58,975,243 as of March 31, 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.

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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
Cumulative excess costs remaining at 3/31/26			4,200,877				888,779				5,089,656
Accrued interest at 3/31/26			1,560,750				8,639				1,569,389
Total remaining to be recovered at 3/31/26		$	5,761,627			$	897,418			$	6,659,045
		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
Cumulative excess costs remaining at 3/31/26			3,150,659				666,585				3,817,244
Accrued interest at 3/31/26			1,170,562				6,479				1,177,041
Total remaining to be recovered at 3/31/26		$	4,321,221			$	673,064			$	4,994,285

For the quarter ended March 31, 2026, excess costs were $210,012 ($157,509 net to the Trust) on properties underlying the Texas working interest net profits interests.

For the quarter ended March 31, 2026, excess costs were $888,779 ($666,585 net to the Trust) 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 March 31, 2026, totaled $6.7 million ($5.0 million net to the Trust), including accrued interest of $1.6 million ($1.2 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 March 31, 2026, was $53,620 ($40,215 net to the Trust) and is subject to annual adjustment based on an oil and gas industry index.

XTO Energy deducts a monthly overhead charge for reimbursement of administrative expenses as operator of the Hewitt Unit, which is one of the properties underlying the Oklahoma 75% net profits interests. As of March 31, 2026, this monthly charge was approximately $36,090 ($27,068 net to the Trust) and is subject to annual adjustment based on an oil and gas industry index. Other than this property, XTO Energy and ExxonMobil do not operate or control any of the properties underlying the 75% net profits interests.

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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

For the quarter ended March 31, 2026, net profits income was $774,181 compared to $2,053,394 for first quarter 2025. This 62 percent decrease in net profits income is primarily the result of decreased oil and gas production ($1.3 million), lower oil prices ($0.5 million), increased overhead ($0.4 million), and increased production costs ($0.1 million), partially offset by net excess costs activity ($0.8 million), decreased taxes, transportation and other costs ($0.1 million), and decreased development costs ($0.1 million). See “Net Profits Income” below.

After considering interest income of $13,666, administration expense of $234,441, and an increase to the expense reserve of $50,000, distributable income for the quarter ended March 31, 2026, was $503,406, or $0.083901 per unit of beneficial interest. Administration expense for the quarter decreased $47,021 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 first quarter 2025, distributable income was $1,783,938, or $0.297323 per unit.

Distributions to unitholders for the quarter ended March 31, 2026, were:

Record Date		Payment Date		Distribution per Unit
January 30, 2026		February 13, 2026		$		0.032918
February 27, 2026		March 13, 2026				0.050060
March 31, 2026		April 14, 2026				0.000923
				$		0.083901

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.

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

		Three Months Ended
		March 31 (a)						Increase
		2026			2025			(Decrease)
Sales Volumes
Oil (Bbls) (b)
Underlying properties			28,119			44,370		(37%)
Average per day			306			482		(37%)
Net profits interests			4,282			17,383		(75%)
Gas (Mcf) (b)
Underlying properties			185,139			300,843		(38%)
Average per day			2,012			3,270		(38%)
Net profits interests			144,461			247,526		(42%)
Average Sales Prices
Oil (per Bbl)		$	56.65		$	70.48		(20%)
Gas (per Mcf)		$	4.25		$	4.11		3%
Revenues
Oil sales		$	1,593,065		$	3,127,387		(49%)
Gas sales			787,570			1,235,336		(36%)
Total Revenues			2,380,635			4,362,723		(45%)
Costs
Taxes, transportation and other			268,994			422,062		(36%)
Production expense (c)			2,352,162			1,549,120		52%
Development costs			(1,931)			131,242		(101%)
Excess costs (d)			(1,098,791)			(66,655)		1548%
Total Costs			1,520,434			2,035,769		(25%)
Net Proceeds		$	860,201		$	2,326,954		(63%)
Net Profits Income		$	774,181		$	2,053,394		(62%)

(a)Because of the interval between time of production and receipt of royalty income by the Trust, oil and gas sales for the quarter ended March 31 generally represent oil production for the period November through January and gas production for the period October through December.

(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.

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The following are explanations of significant variances on the underlying properties from first quarter 2025 to first quarter 2026:

Sales Volumes

Oil

Oil sales volumes decreased 37 percent from first quarter 2025 to first quarter 2026 primarily due to timing of cash receipts and natural production decline.

Gas

Gas sales volumes decreased 38 percent from first quarter 2025 to first quarter 2026 primarily because of 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 decreased 20 percent to $56.65 per Bbl for first quarter 2026.

Gas

The average gas price increased 3 percent to $4.25 per Mcf for first quarter 2026.

Costs

Taxes, Transportation and Other

Taxes, transportation and other costs decreased 36 percent for first quarter 2026 primarily because of decreased oil and gas severance taxes on lower revenues and decreased gas deductions.

Production Expense

Production expense increased 52 percent for first quarter 2026 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 101 percent for first quarter 2026 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 March 31, 2026, totaled $6.7 million ($5.0 million net to the Trust), including accrued interest of $1.6 million ($1.2 million net to the Trust). For further information on excess costs, see Note 4 to Condensed Financial Statements.

Contingencies

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

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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 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.

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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)

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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: May 14, 2026	By	/s/ DANIEL BATES
		Daniel Bates
		Unconventional Finance General Manager

(The Trust has no directors or executive officers.)

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FAQ

How did Cross Timbers Royalty Trust (CRT) perform in Q1 2026?

Cross Timbers Royalty Trust reported weaker Q1 2026 results. Net profits income fell to $774,181 from $2,053,394 a year earlier, and distributable income dropped to $503,406, or $0.083901 per unit, mainly due to lower volumes, weaker oil prices and higher costs.

What happened to CRT’s distributions and distributable income per unit?

Distributable income per Cross Timbers Royalty Trust unit declined materially. It was $0.083901 for Q1 2026, compared with $0.297323 for Q1 2025, reflecting reduced net profits income, higher production expenses, and an additional $50,000 contribution to the expense reserve during the quarter.

How did oil and gas production and prices change for CRT in Q1 2026?

Underlying oil sales volumes decreased 37% to 28,119 Bbls, and gas volumes fell 38% to 185,139 Mcf. The average oil price declined 20% to $56.65 per Bbl, while the average gas price increased 3% to $4.25 per Mcf, pressuring revenues.

What are excess costs for Cross Timbers Royalty Trust and how large are they?

Excess costs arise when monthly costs on a conveyance exceed revenues and must be recovered from future net proceeds. As of March 31, 2026, underlying excess costs on Texas and Oklahoma working interests totaled about $6.7 million, or $5.0 million net to the Trust, including accrued interest.

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

No impairment was recorded on the Trust’s net profits interests in Q1 2026. The Trustee concluded no trigger event occurred requiring impairment testing, so the carrying value remained supported by expected future net cash flows under the Trust’s modified cash-basis accounting.

How is Cross Timbers Royalty Trust treated for federal income tax purposes?

The Trust is treated as a grantor trust for federal income tax purposes and is not taxed at the trust level. Unitholders are considered to own the Trust’s income directly and must report their share of income as received or accrued by the Trust, regardless of distribution timing.