Texas Pacific Land Corp

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APPENDIX A

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NON-GAAP PERFORMANCE MEASURES

In addition to amounts presented in accordance with GAAP, we also present certain supplemental non-GAAP performance measures. These measures are not to be considered more relevant or accurate than the measures presented in accordance with GAAP. In compliance with the requirements of the SEC, our non-GAAP financial measures are reconciled to net income, the most directly comparable GAAP financial measure. For all non-GAAP financial measures, neither the SEC nor any other regulatory body has passed judgment on these non-GAAP financial measures.

EBITDA, Adjusted EBITDA and Free Cash Flow

EBITDA is a non-GAAP financial measurement of earnings before interest expense, taxes, depreciation, depletion and amortization. Its purpose is to highlight earnings without finance, taxes, and depreciation, depletion and amortization expense, and its use is limited to specialized analysis. We calculate Adjusted EBITDA as EBITDA excluding employee share-based compensation, severance costs (if any) and certain transaction costs that are not core to our operations (if any). The purpose of presenting Adjusted EBITDA is to highlight earnings without non-cash activity such as share-based compensation and/or other non-recurring or unusual items. We calculate free cash flow as Adjusted EBITDA less current income tax expense and capital expenditures. Its purpose is to provide an additional measure of operating performance. We have presented EBITDA, Adjusted EBITDA and free cash flow because we believe that these metrics are useful supplements to net income in analyzing the Company’s operating performance. Our definitions of EBITDA, Adjusted EBITDA and free cash flow may differ from computations of similarly titled measures of other companies.

The following table presents reconciliations of non-GAAP measures to the most directly comparable measures calculated in accordance with GAAP for the year ended December 31, 2023 (in thousands, except percentages):