Texas Pacific Land Corporation Three-for-One Stock Split Frequently Asked Questions
As of March 7, 2024
On March 7, 2024, Texas Pacific Land Corporation (“TPL”) announced that its Board of Directors declared a three-for-one split of its common stock to be effected in the form of a 100% stock dividend. As a result of the stock split, each holder of record of TPL’s common stock at the close of business on March 18, 2024 (the “Record Date”) will receive two additional shares of common stock for every then-held share of common stock, to be distributed after the close of trading on March 26, 2024 (the “Payable Date”). We expect that trading of TPL common stock will begin on a stock split-adjusted basis on March 27, 2024.
How does a 3-for-1 stock split work?
In a 3-for-1 stock split effected in the form of a 100% stock dividend, on the Payable Date each holder of record of TPL’s common stock at the close of business on the Record Date receives two additional shares of TPL common stock for every share that he or she holds as of such date. In other words, after the stock split, the stockholder will hold three shares for every share held before the stock split. As a result, the total number of TPL’s issued shares of common stock will be tripled, and the price at which each share of TPL’s common stock trades is expected to be reduced by approximately one-third.
For example, if you held 100 shares before the stock split, you would hold 300 shares after the stock split becomes effective.
Will the stock split change my percentage ownership or voting power?
The stock split, once implemented, will affect all of TPL’s holders of common stock uniformly and will not affect any holder’s percentage ownership or proportionate voting power.
When will the stock split be effective?
There are several key dates.
The Record Date – March 18, 2024 – determines which stockholders are entitled to receive additional shares due to the stock split.
The Payable Date – March 26, 2024 – stockholders of record are due to receive the additional shares of common stock as a result of the stock split after the close of business on this date.
The Ex-Dividend Date – March 27, 2024 – the date determined by the New York Stock Exchange (“NYSE”) when shares of TPL common stock will begin to trade at the new split-adjusted price.
What happens if I sell or buy shares on or after the Record Date?
If you sell shares of TPL common stock on or after the Record Date (March 18, 2024) but before the Ex-Dividend Date (March 27, 2024), you will be selling them at the pre-split price. At the time of the sale, you will surrender your pre-split shares and you will no longer be entitled to receive the additional shares resulting from the stock split. The new owner of the shares that you sell will become entitled to receive the additional shares resulting from the stock split.
If you buy shares of TPL common stock on or after the Record Date but before the Ex-Dividend Date and hold those shares through the close of trading on the last trading day preceding the Ex-Dividend Date, you will purchase the shares at the pre-split price and you will receive the shares purchased. Following the stock split, you will receive the additional shares resulting from the stock split.
When will the stock begin trading at its split-adjusted price on the NYSE?
The NYSE has advised that it has set March 27, 2024, as the ex-dividend date. The ex-dividend date is the first day that TPL common stock will trade on a post-split basis at a split-adjusted price.
How will I receive the additional shares resulting from the stock split?
If you hold shares in a brokerage account, the additional shares resulting from the stock split will be deposited into your account in the days following the Payable Date (March 26, 2024). Please contact your broker if you have any questions regarding timing.
If you hold your shares directly with American Stock Transfer & Trust Company, LLC (“AST”) as TPL’s transfer agent in book-entry form, the additional shares resulting from the stock split will be deposited in a book-entry position and AST will send you a statement indicating the number of additional shares issued to you as a result of the stock split.
No stock certificates will be issued for the additional shares of TPL common stock resulting from the stock split.
Where will my statement be sent?
If you currently hold shares directly with TPL’s transfer agent, AST, statements will be sent to your address on record with AST. If you have any questions regarding your AST account, please call (718) 921-8124 or via email at help@astfinancial.com.
If your stock is currently held in a brokerage account, information will be provided by your broker.
Are there tax implications of the stock split for U.S. federal income tax purposes?
The stock split is intended to be tax-free for U.S. federal income tax purposes.
You are urged to consult your tax advisor with respect to the application of United States federal income tax laws to your particular situation as well as any tax considerations arising under other United States federal tax laws (such as the estate or gift tax laws) or under the laws of any state, local, foreign or other taxing jurisdiction or under any applicable tax treaty.
What is the cost basis of these new shares for U.S. federal income tax purposes?
Immediately after the stock split, the per-share tax basis for U.S. federal income tax purposes of all shares of common stock held by a stockholder will be the basis in the original shares allocated equally to the original shares and the additional shares resulting from the stock split.
Information will be included in the U.S. Internal Revenue Service Form 8937, Report of Organizational Actions Affecting Basis of Securities, prepared by TPL. This form will be posted on TPL’s website within 45 days from the Payable Date.
You are urged to consult your tax advisor with respect to the application of United States federal income tax laws to your particular situation as well as any tax considerations arising under other United States federal tax laws (such as the estate or gift tax laws) or under the laws of any state, local, foreign or other taxing jurisdiction or under any applicable tax treaty.
How will the stock split affect the future calculation of net earnings or loss per share?
Reported per share net earnings or loss and other per share of common stock amounts will decrease because there will be more shares of common stock outstanding following the stock split. In financial statements issued after the stock split becomes effective, per share net earnings or loss and other per share of common stock amounts for periods ending before the effective date of the stock split will be adjusted to give retroactive effect to the stock split.
Will future declared quarterly dividends apply to my new shares?
Yes, any dividends declared in the future will apply uniformly to all shares of TPL’s common stock, including any new shares issued in the stock split.
Who should I contact if I have questions about my shares?
If you hold shares in a brokerage account, please contact you broker.
If you hold your shares directly with TPL’s transfer agent, you can contact AST, TPL’s transfer agent at:
American Stock Transfer & Trust Company, LLC
Phone (U.S.): (718) 921-8124
Email: help@astfinancial.com
Information Regarding Forward Looking Statements:
This document may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on TPL’s beliefs, as well as assumptions made by, and information currently available to, TPL, and therefore involve risks and uncertainties that are difficult to predict. Generally, future or conditional verbs such as “will,” “would,” “should,” “could,” or “may” and the words “believe,” “anticipate,” “continue,” “intend,” “expect” and similar expressions identify forward-looking statements. Forward-looking statements include, but are not limited to, references to strategies, plans, objectives, expectations, intentions, assumptions, future operations and prospects and other statements that are not historical facts. You should not place undue reliance on forward-looking statements. Although TPL believes that plans, intentions and expectations reflected in or suggested by any forward-looking statements made herein are reasonable, TPL may be unable to achieve such plans, intentions or expectations and actual results, and performance or achievements may vary materially and adversely from those envisaged in this news release due to a number of factors including, but not limited to: the initiation or outcome of potential litigation; and any changes in general economic and/or industry specific conditions. These risks, as well as other risks associated with TPL are also more fully discussed in our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q. You can access TPL’s filings with the SEC through the SEC website at http://www.sec.gov and TPL strongly encourages you to do so. Except as required by applicable law, TPL undertakes no obligation to update any forward-looking statements or other statements herein for revisions or changes after this communication is made.