Viper Energy, Inc. [VNOM] Filings

10-Q 1 vnom-20240930.htm 10-Q vnom-20240930

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 September 30, 2024


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

Commission File Number 001-36505

Viper Energy, Inc.

(Exact Name of Registrant As Specified in Its Charter)

46-5001985

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification Number)

500 West Texas Ave.

Suite 100

Midland, TX

79701

(Address of principal executive offices)

(Zip code)

(432) 221-7400

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock
$0.000001 par value

VNOM

The Nasdaq Stock Market LLC

(NASDAQ Global Select Market)

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 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, a 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. (Check One):

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 ☒

As of November 1, 2024, 102,977,142 shares of Class A Common Stock and 85,431,453 shares of Class B Common Stock of the registrant were outstanding.

VIPER ENERGY, INC.

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2024

TABLE OF CONTENTS


			Page
Glossary of Oil and Natural Gas Terms			ii
Glossary of Certain Other Terms			iv
Cautionary Statement Regarding Forward-Looking Statements			v

PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)			1
Condensed Consolidated Balance Sheets			1
Condensed Consolidated Statements of Operations			2
Condensed Consolidated Statements of Changes to Stockholders’ Equity			3
Condensed Consolidated Statements of Cash Flows			5
Notes to the Condensed Consolidated Financial Statements			6
1. Organization and Basis of Presentation			6
2. Summary of Significant Accounting Policies			7
3. Revenue from Contracts with Customers			9
4. Acquisitions and Divestitures			9
5. Oil and Natural Gas Interests			11
6. Debt			12
7. Stockholders' Equity			12
8. Earnings Per Common Share			14
9. Income Taxes			15
10. Derivatives			16
11. Fair Value Measurements			17
12. Commitments and Contingencies			19
13. Subsequent Events			20

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			21

Item 3. Quantitative and Qualitative Disclosures about Market Risk			33

Item 4. Controls and Procedures			34

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			34

Item 1A. Risk Factors			34

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			35

Item 5. Other Information			35

Item 6. Exhibits			36

Signatures			38

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GLOSSARY OF OIL AND NATURAL GAS TERMS

The following is a glossary of certain oil and natural gas terms that are used in this Quarterly Report on Form 10-Q (this “report”):



Argus WTI Midland			Grade of oil that serves as a benchmark price for oil at Midland, Texas.
Basin			A large depression on the earth’s surface in which sediments accumulate.
Bbl or barrel			One stock tank barrel, or 42 U.S. gallons liquid volume, used in this report in reference to crude oil or other liquid hydrocarbons.


BO/d			One barrel of crude oil per day.
BOE			One barrel of oil equivalent, with six thousand cubic feet of natural gas being equivalent to one barrel of oil.
BOE/d			BOE per day.

Completion			The process of treating a drilled well followed by the installation of permanent equipment for the production of natural gas or oil, or in the case of a dry hole, the reporting of abandonment to the appropriate agency.

Crude oil			Liquid hydrocarbons retrieved from geological structures underground to be refined into fuel sources.




Development well			A well drilled within the proved area of a natural gas or oil reservoir to the depth of a stratigraphic horizon known to be productive.
Differential			An adjustment to the price of oil or natural gas from an established spot market price to reflect differences in the quality and/or location of oil or natural gas.






Fracturing			The process of creating and preserving a fracture or system of fractures in a reservoir rock typically by injecting a fluid under pressure through a wellbore and into the targeted formation.
Gross wells			The total wells, as the case may be, in which a working interest is owned.

Henry Hub			Natural gas gathering point that serves as a benchmark price for natural gas futures on the NYMEX.
Horizontal wells			Wells drilled directionally horizontal to allow for development of structures not reachable through traditional vertical drilling mechanisms.
MBbl			One thousand barrels of crude oil and other liquid hydrocarbons.
MBOE			One thousand barrels of crude oil equivalent, determined using a ratio of six Mcf of natural gas to one Bbl of crude oil, condensate or natural gas liquids.
MBOE/d			One thousand BOE per day.
Mcf			One thousand cubic feet of natural gas.

Mineral interests			The interests in ownership of the resource and mineral rights, giving an owner the right to profit from the extracted resources.
MMBtu			One million British Thermal Units.
MMcf			Million cubic feet of natural gas.



Net royalty acres			Net mineral acres multiplied by the average lease royalty interest and other burdens.
Oil and natural gas properties			Tracts of land consisting of properties to be developed for oil and natural gas resource extraction.
Operator			The individual or company responsible for the exploration and/or production of an oil or natural gas well or lease.







Proved reserves			The estimated quantities of oil, natural gas and natural gas liquids which geological and engineering data demonstrate with reasonable certainty to be commercially recoverable in future years from known reservoirs under existing economic and operating conditions.

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Reserves			The estimated remaining quantities of oil and natural gas and related substances anticipated to be economically producible, as of a given date, by application of development projects to known accumulations. In addition, there must exist, or there must be a reasonable expectation that there will exist, the legal right to produce or a revenue interest in the production, installed means of delivering oil and natural gas or related substances to the market and all permits and financing required to implement the project. Reserves are not assigned to adjacent reservoirs isolated by major, potentially sealing, faults until those reservoirs are penetrated and evaluated as economically producible. Reserves should not be assigned to areas that are clearly separated from a known accumulation by a non-productive reservoir (i.e., absence of reservoir, structurally low reservoir or negative test results). Such areas may contain prospective resources (i.e., potentially recoverable resources from undiscovered accumulations).


Royalty interest			An interest that gives an owner the right to receive a portion of the resources or revenues without having to carry any costs of development, which may be subject to expiration.
Spud			Commencement of actual drilling operations.
Waha Hub			Natural gas gathering point that serves as a benchmark price for natural gas at western Texas and New Mexico.






WTI			West Texas Intermediate, a light sweet blend of oil produced from fields in western Texas and is a grade of oil that serves as a benchmark for oil on the NYMEX.
WTI Cushing			Grade of oil that serves as a benchmark price for oil at Cushing, Oklahoma.

iii

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GLOSSARY OF CERTAIN OTHER TERMS

The following is a glossary of certain other terms that are used in this report:



Adjusted EBITDA			Consolidated Adjusted EBITDA, a non-GAAP measure, generally equals net income (loss) attributable to Viper Energy, Inc. plus net income (loss) attributable to non-controlling interest before interest expense, net, non-cash share-based compensation expense, depletion expense, non-cash (gain) loss on derivative instruments, other non-cash operating expenses, other non-recurring expenses and provision for (benefit from) income taxes, which measure is used by management to more effectively evaluate the operating performance and determine dividend amounts for purposes of the dividend policy.
ASU			Accounting Standards Update.
Class A Common Stock			Class A Common Stock, $0.000001 par value per share of Viper Energy, Inc.
Class B Common Stock			Class B Common Stock, $0.000001 par value per share of Viper Energy, Inc.
Common Stock			Collectively, Class A Common Stock and Class B Common Stock.
Diamondback			Diamondback Energy, Inc., a Delaware corporation.

Exchange Act			The Securities Exchange Act of 1934, as amended.
FASB			Financial Accounting Standards Board.
GAAP			Accounting principles generally accepted in the United States.
General Partner			Viper Energy Partners GP LLC, a Delaware limited liability company, and the General Partner of the Partnership.


LTIP			Viper Energy, Inc. Amended and Restated 2014 Long Term Incentive Plan, as amended and restated by Viper Energy, Inc. 2024 Amended and Restated Long Term Incentive Plan, and as may be further amended or restated from time to time.
Nasdaq			The Nasdaq Global Select Market.
Notes			The outstanding senior notes of Viper Energy, Inc. issued under indentures where Viper Energy Partners LLC is the sole guarantor, consisting of the 5.375% Senior Notes due 2027 and the 7.375% Senior Notes due 2031.

OPEC			Organization of the Petroleum Exporting Countries.
Operating Company			Viper Energy Partners LLC, a Delaware limited liability company and a consolidated subsidiary of Viper Energy, Inc.
Partnership			Viper Energy Partners LP, the predecessor of the Company, which converted into the Company in the Conversion.
SEC			United States Securities and Exchange Commission.
Securities Act			The Securities Act of 1933, as amended.
SOFR			The secured overnight financing rate.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Various statements contained in this report are “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, which involve risks, uncertainties, and assumptions. All statements, other than statements of historical fact, including statements regarding our: future performance; business strategy; future operations; estimates and projections of operating income, losses, costs and expenses, returns, cash flow, and financial position; production levels on properties in which we have mineral and royalty interests, developmental activity by other operators; reserve estimates and our ability to replace or increase reserves; anticipated benefits or other effects of strategic transactions (including the recently completed TWR Acquisition discussed in Note 13—Subsequent Events and other acquisitions or divestitures); and plans and objectives of management (including Diamondback’s plans for developing our acreage and our cash dividend policy and repurchases of our Class A Common Stock and/or senior notes) are forward-looking statements. When used in this report, the words “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “model,” “outlook,” “plan,” “positioned,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” and similar expressions (including the negative of such terms) as they relate to us are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. In particular, the factors discussed in this report and detailed under Part II. Item 1A. Risk Factors, and our Annual Report on Form 10-K for the year ended December 31, 2023, could affect our actual results and cause our actual results to differ materially from expectations, estimates or assumptions expressed, forecasted or implied in such forward-looking statements. Unless the context requires otherwise, references to “we,” “us,” “our” or the “Company” are intended to mean the business and operations of the Company and the Operating Company.

Factors that could cause the outcomes to differ materially include (but are not limited to) the following:

•changes in supply and demand levels for oil, natural gas, and natural gas liquids and the resulting impact on the price for those commodities;

•the impact of public health crises, including epidemic or pandemic diseases and any related company or government policies or actions;

•actions taken by the members of OPEC and Russia affecting the production and pricing of oil, as well as other domestic and global political, economic, or diplomatic developments;

•changes in general economic, business or industry conditions, including changes in foreign currency exchange rates, interest rates, inflation rates, instability in the financial sector;

•regional supply and demand factors, including delays, curtailment delays or interruptions of production on our mineral and royalty acreage, or governmental orders, rules or regulations that impose production limits on such acreage;

•federal and state legislative and regulatory initiatives relating to hydraulic fracturing, including the effect of existing and future laws and governmental regulations;

•physical and transition risks relating to climate change;

•restrictions on the use of water, including limits on the use of produced water by our operators and a moratorium on new produced water well permits recently imposed by the Texas Railroad Commission in an effort to control induced seismicity in the Permian Basin;

•significant declines in prices for oil, natural gas, or natural gas liquids, which could require recognition of significant impairment charges;

•changes in U.S. energy, environmental, monetary and trade policies;

•conditions in the capital, financial and credit markets, including the availability and pricing of capital for drilling and development by our operators and environmental and social responsibility projects undertaken by Diamondback and our other operators;

•changes in availability or cost of rigs, equipment, raw materials, supplies and oilfield services impacting our operators;

•changes in safety, health, environmental, tax, and other regulations or requirements impacting us or our operators (including those addressing air emissions, water management, or the impact of global climate change);

•security threats, including cybersecurity threats and disruptions to our business from breaches of Diamondback’s information technology systems, or from breaches of information technology systems of our operators or third parties with whom we transact business;

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•lack of, or disruption in, access to adequate and reliable transportation, processing, storage and other facilities impacting our operators;

•severe weather conditions and natural disasters;

•acts of war or terrorist acts and the governmental or military response thereto;

•changes in the financial strength of counterparties to the credit facility and hedging contracts of our operating subsidiary;

•changes in our credit rating; and

•other risks and factors disclosed in this report.

In light of these factors, the events anticipated by our forward-looking statements may not occur at the time anticipated or at all. Moreover, new risks emerge from time to time. We cannot predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those anticipated by any forward-looking statements we may make. Accordingly, you should not place undue reliance on any forward-looking statements made in this report. All forward-looking statements speak only as of the date of this report or, if earlier, as of the date they were made. We do not intend to, and disclaim any obligation to, update or revise any forward-looking statements unless required by applicable law.

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PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Viper Energy, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)


	September 30,		December 31,
	2024		2023
	(In thousands, except share amounts)
Assets
Current assets:
Cash and cash equivalents	$	168,649	$	25,869

Royalty income receivable (net of allowance for credit losses)	108,857		108,681
Royalty income receivable—related party	35,997		3,329
Income tax receivable	—		813
Derivative instruments	2,795		358
Prepaid expenses and other current assets	3,882		4,467
Total current assets	320,180		143,517
Property:
Oil and natural gas interests, full cost method of accounting ($1,622,601 and $1,769,341 excluded from depletion at September 30, 2024 and December 31, 2023, respectively)	4,771,268		4,628,983
Land	5,688		5,688
Accumulated depletion and impairment	(1,016,173)		(866,352)
Property, net	3,760,783		3,768,319
Funds held in escrow	43,050		—
Derivative instruments	2,727		92
Deferred income taxes (net of allowances)	74,617		56,656
Other assets	4,653		5,509
Total assets	$	4,206,010	$	3,974,093
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	26	$	19
Accounts payable—related party	—		1,330
Accrued liabilities	41,465		27,021
Derivative instruments	901		2,961
Income taxes payable	1,816		1,925
Total current liabilities	44,208		33,256
Long-term debt, net	821,505		1,083,082

Derivative instruments	—		201
Other long-term liabilities	4,789		—
Total liabilities	870,502		1,116,539
Commitments and contingencies (Note 12)

Stockholders’ equity:



Class A Common Stock, $0.000001 par value: 1,000,000,000 shares authorized; 102,947,008 shares issued and outstanding as of September 30, 2024 and 86,144,273 shares issued and outstanding as of December 31, 2023	—		—
Class B Common Stock, $0.000001 par value: 1,000,000,000 shares authorized; 85,431,453 shares issued and outstanding as of September 30, 2024 and 90,709,946 shares issued and outstanding as of December 31, 2023	—		—
Additional paid-in capital	1,429,649		1,031,078
Retained earnings (accumulated deficit)	(28,691)		(16,786)
Total Viper Energy, Inc. stockholders’ equity	1,400,958		1,014,292
Non-controlling interest	1,934,550		1,843,262
Total equity	3,335,508		2,857,554
Total liabilities and stockholders’ equity	$	4,206,010	$	3,974,093

See accompanying notes to condensed consolidated financial statements.

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Viper Energy, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(In thousands, except per share amounts)
Operating income:
Oil income	$	186,750	$	168,008	$	558,203	$	443,927
Natural gas income	823		8,893		8,763		22,974
Natural gas liquids income	20,585		18,713		61,745		47,995
Royalty income	208,158		195,614		628,711		514,896
Lease bonus income—related party	107		97,237		227		105,585
Lease bonus income	1,143		196		2,289		1,730
Other operating income	180		193		461		774
Total operating income	209,588		293,240		631,688		622,985
Costs and expenses:
Production and ad valorem taxes	15,113		12,286		44,720		37,794

Depletion	54,528		36,280		149,821		101,331

General and administrative expenses—related party	2,569		924		7,391		2,772
General and administrative expenses	2,046		956		6,712		3,880
Other operating (income) expense	(236)		—		(3)		—
Total costs and expenses	74,020		50,446		208,641		145,777
Income (loss) from operations	135,568		242,794		423,047		477,208
Other income (expense):
Interest expense, net	(16,739)		(10,970)		(54,736)		(31,636)


Gain (loss) on derivative instruments, net	7,410		(2,988)		5,264		(30,685)

Other income, net	—		256		—		258
Total other expense, net	(9,329)		(13,702)		(49,472)		(62,063)
Income (loss) before income taxes	126,239		229,092		373,575		415,145
Provision for (benefit from) income taxes	17,194		21,879		42,729		39,735
Net income (loss)	109,045		207,213		330,846		375,410
Net income (loss) attributable to non-controlling interest	60,128		128,614		181,668		232,294
Net income (loss) attributable to Viper Energy, Inc.	$	48,917	$	78,599	$	149,178	$	143,116

Net income (loss) attributable to common shares:
Basic	$	0.52	$	1.11	$	1.64	$	1.99
Diluted	$	0.52	$	1.11	$	1.64	$	1.99
Weighted average number of common shares outstanding:
Basic	93,695		70,925		90,895		71,803
Diluted	93,747		70,925		90,989		71,803

See accompanying notes to condensed consolidated financial statements.

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Viper Energy, Inc.

Condensed Consolidated Statements of Changes to Stockholders' Equity

(Unaudited)


	Common Stock(1)
		Additional Paid-in Capital	Retained Earnings (Accumulated Deficit)	Non-Controlling Interest		Total
					Class A Shares			Class B Shares

			(In thousands)
Balance at December 31, 2023			86,144	90,710		$	1,031,078	$	(16,786)	$	1,843,262	$	2,857,554

Common shares issued to related party			5,279	(5,279)		—		—		—		—
Equity-based compensation			—	—		485		—		—		485
Issuance of shares upon vesting of equity awards			1	—		—		—		—		—
Distribution equivalent rights payments			—	—		—		(56)		—		(56)
Dividends to stockholders			—	—		—		(43,791)		—		(43,791)
Dividends to Diamondback			—	—		20		(4,490)		(62,590)		(67,060)
Change in ownership of consolidated subsidiaries, net			—	—		69,753		—		(52,298)		17,455
Cash paid for tax withholding on vested equity awards			—	—		(28)		—		—		(28)

Net income (loss)			—	—		—		43,360		56,215		99,575
Balance at March 31, 2024			91,424	85,431		1,101,308		(21,763)		1,784,589		2,864,134


Equity-based compensation			—	—		830		—		—		830

Distribution equivalent rights payments			—	—		—		(116)		—		(116)
Dividends to stockholders			—	—		—		(53,941)		—		(53,941)
Dividends to Diamondback			—	—		—		(20)		(59,803)		(59,823)
Change in ownership of consolidated subsidiaries, net			—	—		6,601		—		(6,601)		—


Net income (loss)			—	—		—		56,901		65,325		122,226
Balance at June 30, 2024			91,424	85,431		1,108,739		(18,939)		1,783,510		2,873,310


Net proceeds from the issuance of common stock			11,523	—		475,904		—		—		475,904
Equity-based compensation			—	—		845		—		—		845

Distribution equivalent rights payments			—	—		—		(123)		—		(123)
Dividends to stockholders			—	—		—		(58,526)		—		(58,526)
Dividends to Diamondback			—	—		—		(20)		(64,927)		(64,947)
Change in ownership of consolidated subsidiaries, net			—	—		(155,839)		—		155,839		—


Net income (loss)			—	—		—		48,917		60,128		109,045
Balance at September 30, 2024			102,947	85,431		$	1,429,649	$	(28,691)	$	1,934,550	$	3,335,508

(1) The par values of the outstanding shares of Class A Common Stock and Class B Common Stock each round to zero during the periods presented.

See accompanying notes to condensed consolidated financial statements.

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Viper Energy, Inc.

Condensed Consolidated Statements of Changes to Stockholders' Equity - (Continued)

(Unaudited)


							General Partner			Non-Controlling Interest		Total
	Limited Partners
	Common Units	Amount		Class B Units	Amount		Amount		Amount

	(In thousands)
Balance at December 31, 2022	73,230	$	689,178	90,710	$	832	$	649		$	1,630,866	$	2,321,525

Unit-based compensation	—	370		—	—		—			—		370
Issuance of shares upon vesting of equity awards	4	—		—	—		—			—		—
Distribution equivalent rights payments	—	(72)		—	—		—			—		(72)
Distributions to public	—	(35,253)		—	—		—			—		(35,253)
Distributions to Diamondback	—	(358)		—	(25)		—			(48,983)		(49,366)
Distributions to General Partner	—	—		—	—		(20)			—		(20)
Change in ownership of consolidated subsidiaries, net	—	11,449		—	—		—			(11,449)		—

Repurchased units as part of unit buyback	(1,115)	(33,022)		—	—		—			—		(33,022)
Net income (loss)	—	33,967		—	—		—			54,299		88,266
Balance at March 31, 2023	72,119	666,259		90,710	807		629			1,624,733		2,292,428

Unit-based compensation	—	259		—	—		—			—		259

Distribution equivalent rights payments	—	(43)		—	—		—			—		(43)
Distributions to public	—	(23,513)		—	—		—			—		(23,513)
Distributions to Diamondback	—	(241)		—	(25)		—			(38,097)		(38,363)
Distributions to General Partner	—	—		—	—		(20)			—		(20)
Change in ownership of consolidated subsidiaries, net	—	16,749		—	—		—			(16,749)		—

Repurchased units as part of unit buyback	(912)	(24,509)		—	—		—			—		(24,509)
Net income (loss)	—	30,550		—	—		—			49,381		79,931
Balance at June 30, 2023	71,207	665,511		90,710	782		609			1,619,268		2,286,170

Unit-based compensation	—	362		—	—		—			—		362
Issuance of shares upon vesting of equity awards	20	—		—	—		—			—		—
Distribution equivalent rights payments	—	(48)		—	—		—			—		(48)
Distributions to public	—	(25,252)		—	—		—			—		(25,252)
Distributions to Diamondback	—	(263)		—	(25)		—			(39,912)		(40,200)
Distributions to General Partner	—	—		—	—		(20)			—		(20)
Change in ownership of consolidated subsidiaries, net	—	3,469		—	—		—			(3,469)		—

Repurchased units as part of unit buyback	(365)	(9,650)		—	—		—			—		(9,650)
Net income (loss)	—	78,599		—	—		—			128,614		207,213
Balance at September 30, 2023	70,862	$	712,728	90,710	$	757	$	589		$	1,704,501	$	2,418,575

See accompanying notes to condensed consolidated financial statements.

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Viper Energy, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended September 30,
	2024		2023
	(In thousands)
Cash flows from operating activities:
Net income (loss)	$	330,846	$	375,410
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision for (benefit from) deferred income taxes	(505)		887
Depletion	149,821		101,331

(Gain) loss on derivative instruments, net	(5,264)		30,685
Net cash receipts (payments) on derivatives	(2,038)		(10,019)






Other	4,470		2,045
Changes in operating assets and liabilities:

Royalty income receivable	2,886		(22,147)
Royalty income receivable—related party	(32,667)		(1,171)


Accounts payable and accrued liabilities	14,192		4,156

Accounts payable—related party	(1,330)		(306)
Income taxes payable	(109)		12,411

Other	1,398		(885)
Net cash provided by (used in) operating activities	461,700		492,397
Cash flows from investing activities:

Acquisitions of oil and natural gas interests—related party	—		(75,073)
Acquisitions of oil and natural gas interests	(271,052)		(98,510)



Proceeds from sale of oil and natural gas interests	87,674		(3,166)


Net cash provided by (used in) investing activities	(183,378)		(176,749)
Cash flows from financing activities:
Proceeds from borrowings under credit facility	470,000		260,000
Repayment on credit facility	(733,000)		(162,000)



Net proceeds from public offering	475,904		—






Repurchased shares/units under buyback program	—		(67,181)
Dividends/distributions to stockholders	(156,553)		(84,181)
Dividends/distributions to Diamondback	(191,830)		(127,929)
Other	(63)		(5,722)
Net cash provided by (used in) financing activities	(135,542)		(187,013)
Net increase (decrease) in cash and cash equivalents	142,780		128,635
Cash, cash equivalents and restricted cash at beginning of period	25,869		18,179
Cash, cash equivalents and restricted cash at end of period	$	168,649	$	146,814

Supplemental disclosure of cash flow information:
Interest paid	$	(43,121)	$	(24,766)
Cash (paid) received for income taxes	$	(42,615)	$	(25,700)

See accompanying notes to condensed consolidated financial statements.

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Viper Energy, Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization

Effective November 13, 2023 (the “Effective Time”), Viper Energy Partners LP (the “Partnership”) converted from a publicly traded Delaware limited partnership to a Delaware corporation pursuant to a plan of conversion (the “Conversion”) and changed names from Viper Energy Partners LP to Viper Energy, Inc. This report includes the results for the Partnership prior to the Conversion and Viper Energy, Inc. (the “Company”) following the Conversion. References to the “Company” refer to (i) Viper Energy, Inc. and its consolidated subsidiaries following the Conversion, and (ii) the Partnership and its consolidated subsidiaries prior to the Conversion. References to shares or per share amounts prior to the Conversion refer to units or per unit amounts. Unless otherwise noted, all references to shares or per share amounts following the Conversion refer to shares or per share amounts of the Company’s Common Stock. References to dividends prior to the Conversion refer to distributions. There were no tax impacts resulting from the Conversion as the Partnership was treated as a corporation for tax purposes.

The Company is a publicly traded Delaware corporation focused on owning and acquiring mineral interests and royalty interests in oil and natural gas properties primarily in the Permian Basin. As of September 30, 2024, Viper Energy, Inc. owned approximately 55% of the units representing limited liability company interests in its operating subsidiary Viper Energy Partners LLC (the “Operating Company”) and was the managing member of the Operating Company.

Prior to March 8, 2024, the Company was a “controlled company” under the rules of the Nasdaq Stock Market LLC (the “Nasdaq Rules”). On March 8, 2024, the Company’s parent, Diamondback, completed an underwritten public offering in which it sold approximately 13.2 million shares of the Company’s Class A Common Stock (the “Diamondback Offering”). Following the Diamondback Offering, Diamondback owned no shares of the Company’s Class A Common Stock and owned 85,431,453 shares of the Company’s Class B Common Stock, reducing its beneficial ownership to less than 50% of the Company’s total Common Stock outstanding. As such, the Company ceased to be a “controlled company” under the Nasdaq Rules. Prior to the Diamondback Offering, the Company’s board of directors had a majority of independent directors and a standing audit committee comprised of all independent directors but had elected to take advantage of certain exemptions from corporate governance requirements applicable to controlled companies under the Nasdaq Rules and, until March 8, 2024, did not have a compensation committee or a committee of independent directors that selects director nominees.

Effective as of March 8, 2024, the Company’s board of directors formed (i) the compensation committee for purposes of making certain executive and other compensation decisions, and (ii) the nominating and corporate governance committee for purposes of making certain nominating and corporate governance decisions, with each such committee’s rights and obligations being subject to the terms and conditions of (x) the Company’s certificate of incorporation, (y) such committee’s charter as adopted by the board, and (z) the services and secondment agreement, dated as of November 2, 2023, pursuant to which Diamondback provides personnel and general and administrative services to us, including the services of the executive officers and other employees, substantially in the same manner as those provided to the Company by the former General Partner prior to the Conversion (the “Services and Secondment Agreement”).

As of September 30, 2024, Diamondback beneficially owned approximately 45% of the Company’s total Common Stock outstanding.

Basis of Presentation

The accompanying condensed consolidated financial statements and related notes thereto were prepared in accordance with GAAP. All material intercompany balances and transactions have been eliminated upon consolidation. The Company reports its operations in one reportable segment.

These condensed consolidated financial statements have been prepared by the Company without audit, pursuant to the rules and regulations of the SEC. They reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the results for interim periods, on a basis consistent with the annual audited financial statements. All such adjustments are of a normal recurring nature. Certain information, accounting policies and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to SEC rules and regulations, although the Company believes the disclosures are adequate to make the information presented not misleading. This report

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Viper Energy, Inc.

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

should be read in conjunction with the Company’s most recent Annual Report on Form 10–K for the fiscal year ended December 31, 2023, which contains a summary of the Company’s significant accounting policies and other disclosures.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period financial statement presentation. These reclassifications had no effect on the previously reported total assets, total liabilities, stockholders’ equity, results of operations or cash flows.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

Certain amounts included in or affecting the Company’s financial statements and related disclosures must be estimated by management, requiring certain assumptions to be made with respect to values or conditions that cannot be known with certainty at the time the financial statements are prepared. These estimates and assumptions affect the amounts the Company reports for assets and liabilities and the Company’s disclosure of contingent assets and liabilities as of the date of the financial statements.

Making accurate estimates and assumptions is particularly difficult in the oil and natural gas industry given the challenges resulting from volatility in oil and natural gas prices. For instance, the war in Ukraine, the Israel-Hamas war and other conflicts in the Middle East, higher interest rates, global supply chain disruptions and recent measures to combat persistent inflation and instability in the financial sector have contributed to recent pricing and economic volatility. The financial results of companies in the oil and natural gas industry have been and may continue to be impacted materially as a result of changing market conditions. Such circumstances generally increase uncertainty in the Company’s accounting estimates, particularly those involving financial forecasts.

The Company evaluates these estimates on an ongoing basis, using historical experience, consultation with experts and other methods the Company considers reasonable in each particular circumstance. Nevertheless, actual results may differ significantly from the Company’s estimates. Any effects on the Company’s business, financial position or results of operations resulting from revisions to these estimates are recorded in the period in which the facts that give rise to the revision become known. Significant items subject to such estimates and assumptions include estimates of proved oil and natural gas reserves and related present value estimates of future net cash flows therefrom, the carrying value of oil and natural gas interests, estimates of third party operated royalty income related to expected sales volumes and prices, the recoverability of costs of unevaluated properties, the fair value determination of assets and liabilities, including those acquired by the Company, fair value estimates of commodity derivatives and estimates of income taxes, including deferred tax valuation allowances.

Related Party Transactions

Royalty Income Receivable

As of September 30, 2024 and December 31, 2023, Diamondback, either directly or through its consolidated subsidiaries, owed the Company $36.0 million and $3.3 million, respectively, for royalty income received from third parties for the Company’s production, which had not yet been remitted to the Company.

Lease Bonus Income

During the three and nine months ended September 30, 2024 and 2023, Diamondback paid the Company $0.1 million, $0.2 million, $97.2 million and $105.6 million, respectively, of lease bonus income primarily related to new leases in the Midland Basin.

Other Related Party Transactions

See Note 4—Acquisitions and Divestitures for significant related party acquisitions of oil and natural gas interests.

See Note 7—Stockholder's Equity for further details regarding equity transactions with related parties.

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Viper Energy, Inc.

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

All other significant related party transactions with Diamondback or its affiliates have been stated on the face of the condensed consolidated financial statements.

Accrued Liabilities

Accrued liabilities consist of the following as of the dates indicated:


	September 30,		December 31,
	2024		2023
	(In thousands)
Interest payable	$	21,939	$	11,036
Ad valorem taxes payable	14,273		13,299
Derivatives instruments payable	790		1,279
Other	4,463		1,407
Total accrued liabilities	$	41,465	$	27,021

Recent Accounting Pronouncements

Recently Adopted Pronouncements

There are no recently adopted pronouncements.

Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures,” which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. The amendments are effective for annual periods beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. Management is currently evaluating this ASU to determine its impact on the Company's disclosures. Adoption of the update will not impact the Company’s financial position, results of operations or liquidity.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740) – Improvements to Income Tax Disclosures,” which requires that certain information in a reporting entity’s tax rate reconciliation be disaggregated, and provides additional requirements regarding income taxes paid. The amendments are effective for annual periods beginning after December 15, 2024, with early adoption permitted, and should be applied either prospectively or retrospectively. Management is currently evaluating this ASU to determine its impact on the Company’s disclosures. Adoption of the update will not impact the Company’s financial position, results of operations or liquidity.

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) – Disaggregation of Income Statement Expenses,” which requires additional disclosure about specified categories of expenses included in relevant expense captions presented on the income statement. The amendments are effective for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either prospectively or retrospectively. Management is currently evaluating this ASU to determine its impact on the Company’s disclosures. Adoption of the update will not impact the Company’s financial position, results of operations or liquidity.

The Company considers the applicability and impact of all ASUs. ASUs not discussed above were assessed and determined to be either not applicable, previously disclosed, or not material upon adoption.

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Viper Energy, Inc.

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

3. REVENUE FROM CONTRACTS WITH CUSTOMERS

Royalty income represents the right to receive revenues from oil, natural gas and natural gas liquids sales obtained from third party purchasers by the operator of the wells in which the Company owns a royalty interest. Royalty income is recognized at the point control of the product is transferred to the purchaser at the wellhead or at the gas processing facility based on the Company’s percentage ownership share of the revenue, net of any deductions for gathering and transportation. Virtually all of the pricing provisions in the Company’s contracts are tied to a market index.

The following table disaggregates the Company’s revenue from oil, natural gas and natural gas liquids by revenue generated from production on properties operated by Diamondback and revenue generated from production on properties operated by third parties:


	Three Months Ended September 30,
	2024						2023
	Revenue Generated from Diamondback Operated Properties		Revenue Generated from Third Party Operated Properties		Total		Revenue Generated from Diamondback Operated Properties		Revenue Generated from Third Party Operated Properties		Total
	(In thousands)
Oil income	$	99,192	$	87,558	$	186,750	$	110,934	$	57,074	$	168,008
Natural gas income	1,535		(712)		823		5,243		3,650		8,893
Natural gas liquids income	12,186		8,399		20,585		11,815		6,898		18,713
Total royalty income	$	112,913	$	95,245	$	208,158	$	127,992	$	67,622	$	195,614

	Nine Months Ended September 30,
	2024						2023
	Revenue Generated from Diamondback Operated Properties		Revenue Generated from Third Party Operated Properties		Total		Revenue Generated from Diamondback Operated Properties		Revenue Generated from Third Party Operated Properties		Total
	(In thousands)
Oil income	$	293,687	$	264,516	$	558,203	$	275,466	$	168,461	$	443,927
Natural gas income	6,103		2,660		8,763		11,903		11,071		22,974
Natural gas liquids income	34,463		27,282		61,745		30,648		17,347		47,995
Total royalty income	$	334,253	$	294,458	$	628,711	$	318,017	$	196,879	$	514,896

4. ACQUISITIONS AND DIVESTITURES

2024 Activity

Acquisitions

Q Acquisition

On September 3, 2024 (the “Q Closing Date”), the Company and the Operating Company acquired all of the issued and outstanding equity interests in Tumbleweed-Q Royalties, LLC (the “Q Acquisition”), pursuant to a definitive purchase and sale agreement for consideration consisting of (i) approximately $113.6 million in cash, subject to transaction costs and customary post-closing adjustments, and (ii) contingent cash consideration of up to $5.4 million, payable in January of 2026, based on the average price of WTI sweet crude oil prompt month futures contracts for the calendar year 2025 (the “WTI 2025 Average”). The contingent cash consideration payment will be (i) $2.2 million if the WTI 2025 Average is between $60.00 and $65.00, (ii) $3.2 million if the WTI 2025 Average is between $65.00 and $75.00, or (iii) $5.4 million if the WTI 2025 Average is greater than $75.00. The Company recorded the contingent cash consideration at its fair value of $2.9 million on the Q

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Viper Energy, Inc.

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Closing Date (the “Q Contingent Liability”). The mineral and royalty interests acquired in the Q Acquisition represent approximately 406 net royalty acres located primarily in the Permian Basin. The Company funded the cash consideration, and intends to fund the contingent cash consideration, for the Q Acquisition through a combination of cash on hand and borrowings under the Operating Company’s revolving credit facility.

M Acquisition

On September 3, 2024 (the “M Closing Date”), the Company and the Operating Company acquired all of the issued and outstanding equity interests in MC TWR Royalties, LP and MC TWR Intermediate, LLC (the “M Acquisition”), pursuant to a definitive purchase and sale agreement for consideration consisting of (i) approximately $75.8 million in cash, subject to transaction costs and customary post-closing adjustments, and (ii) contingent cash consideration of up to $3.6 million, payable in January of 2026, based on the WTI 2025 Average. The contingent cash consideration payment will be (i) $1.4 million if the WTI 2025 Average is between $60.00 and $65.00, (ii) $2.2 million if the WTI 2025 Average is between $65.00 and $75.00, or (iii) $3.6 million if the WTI 2025 Average is greater than $75.00. The Company recorded the contingent cash consideration at its fair value of $1.9 million on the M Closing Date (the “M Contingent Liability”). The mineral and royalty interests acquired in the M Acquisition represent approximately 267 net royalty acres located primarily in the Permian Basin. The Company funded the cash consideration, and intends to fund the contingent cash consideration, for the M Acquisition through a combination of cash on hand and borrowings under the Operating Company’s revolving credit facility.

See Note 11—Fair Value Measurements for further discussion of the fair value of the Q Contingent Liability and the M Contingent Liability, (collectively, the “2026 WTI Contingent Liability“).

Other Acquisitions

During the nine months ended September 30, 2024, the Company acquired, in individually insignificant transactions from unrelated third-party sellers, mineral and royalty interests representing 256 net royalty acres in the Permian Basin for an aggregate purchase price of approximately $52.0 million, subject to customary post-closing adjustments.

Divestitures

In the second quarter of 2024, the Company divested all of its non-Permian assets for a purchase price of approximately $87.2 million, including transaction costs and customary post-closing adjustments. The divested properties consisted of approximately 2,713 net royalty acres with current production of approximately 450 BO/d. The Company recorded the proceeds as a reduction of its full cost pool with no gain or loss recognized on the sale.

2023 Activity

Acquisitions

GRP Acquisition

On November 1, 2023, the Company and the Operating Company acquired certain mineral and royalty interests from Royalty Asset Holdings, LP, Royalty Asset Holdings II, LP and Saxum Asset Holdings, LP, affiliates of Warwick Capital Partners and GRP Energy Capital (collectively, “GRP,”) pursuant to a definitive purchase and sale agreement for approximately 9.02 million common units and $747.6 million in cash, including transaction costs and customary post-closing adjustments (the “GRP Acquisition”). The mineral and royalty interests acquired in the GRP Acquisition represent approximately 4,600 net royalty acres in the Permian Basin, plus approximately 2,700 additional net royalty acres in other major basins. The cash consideration for the GRP Acquisition was funded through a combination of cash on hand and held in escrow, borrowings under the Operating Company’s revolving credit facility, proceeds from the issuance of the 7.375% Senior unsecured notes due 2031 and proceeds from the $200.0 million common unit issuance to Diamondback, as discussed further in Note 7—Stockholder s ’ Equity.

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Viper Energy, Inc.

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Drop Down Transaction

On March 8, 2023, the Company acquired certain mineral and royalty interests from subsidiaries of Diamondback for approximately $74.5 million in cash, including customary closing adjustments for net title benefits (the ‘‘Drop Down’’). The mineral and royalty interests acquired in the Drop Down represent approximately 660 net royalty acres in Ward County in the Southern Delaware Basin, 100% of which are operated by Diamondback, and have an average net royalty interest of approximately 7.2% and production of approximately 300 BO/d. The Company funded the Drop Down through a combination of cash on hand and borrowings under the Operating Company’s revolving credit facility. The Drop Down was accounted for as a transaction between entities under common control with the properties acquired recorded at Diamondback’s historical carrying value in the Company’s condensed consolidated balance sheet. The historical carrying value of the properties approximated the Drop Down purchase price.

Other Acquisitions

Additionally, during the year ended December 31, 2023, the Company acquired, in individually insignificant transactions from unrelated third-party sellers, mineral and royalty interests representing 286 net royalty acres in the Permian Basin for an aggregate purchase price of approximately $70.4 million, including customary closing adjustments. The Company funded these acquisitions with cash on hand and borrowings under the Operating Company’s revolving credit facility.

5. OIL AND NATURAL GAS INTERESTS

Oil and natural gas interests include the following for the periods presented:


	September 30,		December 31,
	2024		2023
	(In thousands)
Oil and natural gas interests:
Subject to depletion	$	3,148,667	$	2,859,642
Not subject to depletion	1,622,601		1,769,341
Gross oil and natural gas interests	4,771,268		4,628,983
Accumulated depletion and impairment	(1,016,173)		(866,352)
Oil and natural gas interests, net	3,755,095		3,762,631
Land	5,688		5,688
Property, net of accumulated depletion and impairment	$	3,760,783	$	3,768,319

As of September 30, 2024 and December 31, 2023, the Company had mineral and royalty interests representing approximately 32,567 and 34,217 net royalty acres, respectively.

No impairment expense was recorded on the Company’s oil and natural gas interests for the three and nine months ended September 30, 2024 and 2023 based on the results of the respective quarterly ceiling tests. In addition to commodity prices, the Company’s production rates, levels of proved reserves, transfers of unevaluated properties and other factors will determine its actual ceiling test limitations and impairment analysis in future periods. If the trailing 12-month commodity prices decline as compared to the commodity prices used in prior quarters, the Company could have material write-downs in subsequent quarters.

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Viper Energy, Inc.

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

6. DEBT

Long-term debt consisted of the following as of the dates indicated:


	September 30,		December 31,
	2024		2023
	(In thousands)
5.375% Senior unsecured notes due 2027	$	430,350	$	430,350
7.375% Senior unsecured notes due 2031	400,000		400,000
Revolving credit facility	—		263,000
Unamortized debt issuance costs	(6,098)		(6,903)
Unamortized discount	(2,747)		(3,365)
Total long-term debt	$	821,505	$	1,083,082

The Operating Company’s Revolving Credit Facility

The Operating Company’s credit facility, as amended to date, provides for a revolving credit facility in the maximum credit amount of $2.0 billion and a borrowing base of $1.3 billion. The borrowing base is scheduled to be redetermined semi-annually in May and November. As of September 30, 2024, the Operating Company had elected a commitment amount of $850.0 million, with no outstanding borrowings and $850.0 million available for future borrowings. During the three and nine months ended September 30, 2024 and 2023, the weighted average interest rates on the Operating Company’s revolving credit facility were 7.51%, 7.52%, 7.58% and 7.37%, respectively. The revolving credit facility will mature on September 22, 2028.

As of September 30, 2024, the Operating Company was in compliance with the financial maintenance covenants under its credit facility.

7. STOCKHOLDERS’ EQUITY

At September 30, 2024, the Company had a total of 102,947,008 shares of Class A Common Stock issued and outstanding and 85,431,453 shares of Class B Common Stock issued and outstanding. All of the shares of Class B Common Stock were beneficially owned by Diamondback, representing approximately 45% of the Company’s total shares outstanding. Diamondback also beneficially owned 85,431,453 Operating Company units, representing a 45% non-controlling ownership interest in the Operating Company, and the Company owned the remaining 102,947,008 Operating Company units. The Operating Company units and the Company’s Class B Common Stock beneficially owned by Diamondback are exchangeable from time to time for the Company’s Class A Common Stock (that is, one Operating Company unit and one share of the Company’s Class B Common Stock, together, are exchangeable for one share of the Company’s Class A Common Stock).

2024 Equity Offering

On September 13, 2024, the Company completed an underwritten public offering of approximately 11.50 million shares of its Class A Common Stock, which included 1.50 million shares issued pursuant to an option to purchase additional shares of Class A Common Stock granted to the underwriters, at a price to the public of $42.50 per share for total net proceeds of approximately $475.9 million, after the underwriters’ discount and transaction costs (the “2024 Equity Offering”). The net proceeds were used to fund a portion of the cash consideration for the TWR Acquisition as defined below in Note 13—Subsequent Events. Pending closing of the TWR Acquisition, the Company temporarily repaid all of the amounts outstanding under the Operating Company’s revolving credit facility with a portion of the net proceeds from the 2024 Equity Offering.

2023 Viper Issuance of Common Units to Diamondback

In October 2023, the Company issued approximately 7.22 million of its common units to Diamondback at a price of $27.72 per unit for total net proceeds of approximately $200.0 million. The net proceeds were used to fund a portion of the cash consideration for the GRP Acquisition.

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Viper Energy, Inc.

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

Common Stock Repurchase Program

The Company’s board of directors has authorized a $750.0 million common stock repurchase program, with respect to the repurchase of the Company’s Class A Common Stock, excluding excise tax, over an indefinite period of time. The Company has and intends to continue to purchase shares of Class A Common Stock under the repurchase program opportunistically with funds from cash on hand, free cash flow from operations and potential liquidity events such as the sale of assets. This repurchase program may be suspended from time to time, modified, extended or discontinued by the Company’s board of directors at any time.

There were no repurchases of Class A Common Stock during the three and nine months ended September 30, 2024. During the three and nine months ended September 30, 2023 the Company repurchased, excluding excise tax, approximately $9.6 million and $66.5 million common units under the repurchase program, respectively. As of September 30, 2024, approximately $434.2 million remains available under the repurchase program, excluding excise tax.

Cash Dividends

The board of directors of the Company has established a dividend policy, whereby the Operating Company distributes all or a portion of its available cash on a quarterly basis to its unitholders (including Diamondback, the Company and, following the TWR Acquisition completed on October 1, 2024, TWR IV). The Company in turn distributes all or a portion of the available cash it receives from the Operating Company to holders of its Class A Common Stock through base and variable dividends that take into account capital returned to stockholders via its stock repurchase program. The Company’s available cash and the available cash of the Operating Company for each quarter is determined by the board of directors following the end of such quarter.

The cash available for distribution by the Operating Company, a non-GAAP measure, generally equals the Company’s consolidated Adjusted EBITDA for the applicable quarter, less cash needed for income taxes payable, debt service, contractual obligations, fixed charges and reserves for future operating or capital needs that the board of directors of the Company deems necessary or appropriate, lease bonus income (net of applicable taxes), distribution equivalent rights payments, preferred dividends, and an adjustment for changes in ownership interests that occurred subsequent to the quarter, if any. For a detailed description of the Company’s and the Operating Company’s dividend policy, see Note 7—Stockholders’ Equity—Cash Dividends in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

The percentage of cash available for distribution by the Operating Company pursuant to its distribution policy may change quarterly to enable the Operating Company to retain cash flow to help strengthen the Company’s balance sheet while also expanding the return of capital program through the Company’s stock repurchase program. The Company is not required to pay dividends to its Class A Common stockholders on a quarterly or other basis.

The following table presents information regarding cash dividends paid during the periods presented (in thousands, except for per share amounts):


	Distributions
	(In thousands, except share amounts)
Period	Amount per Operating Company Unit		Operating Company Distributions to Diamondback		Amount per Common Share		Common Stockholders(1)(2)		Declaration Date	Stockholder Record Date	Payment Date
2024
Q4 2023	$	0.69	$	62,590	$	0.56	$	48,337	February 15, 2024	March 5, 2024	March 12, 2024
Q1 2024	$	0.70	$	59,803	$	0.59	$	54,077	April 25, 2024	May 15, 2024	May 22, 2024
Q2 2024	$	0.76	$	64,927	$	0.64	$	58,669	August 1, 2024	August 15, 2024	August 22, 2024


2023
Q4 2022	$	0.54	$	48,983	$	0.49	$	35,683	February 15, 2023	March 3, 2023	March 10, 2023
Q1 2023	$	0.42	$	38,097	$	0.33	$	23,797	April 26, 2023	May 11, 2023	May 18, 2023
Q2 2023	$	0.44	$	39,912	$	0.36	$	25,563	July 25, 2023	August 10, 2023	August 17, 2023

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Viper Energy, Inc.

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

(1)Dividends paid in the first quarter of 2024 include amounts paid to Diamondback for the 7,946,507 shares of Class A Common Stock then beneficially owned by Diamondback and distribution equivalent rights payments. As of March 31, 2024, Diamondback did not beneficially own any shares of Class A Common Stock. See Note 1—Organization and Basis of Presentation for further details.

(2)For distributions paid in 2023, includes amounts paid to Diamondback for the 731,500 common units then beneficially owned by Diamondback.

Cash dividends will be made to the common stockholders of record on the applicable record date, generally within 60 days after the end of each quarter.

Change in Ownership of Consolidated Subsidiaries

Non-controlling interest in the accompanying condensed consolidated financial statements represents Diamondback’s ownership in the net assets of the Operating Company. Diamondback’s relative ownership interest in the Operating Company can change due to its purchase or sale of the Company’s Common Stock, the Company’s public offerings of shares of Class A Common Stock, issuance of shares of Class A Common Stock or Operating Company units for acquisitions, share-based compensation, repurchases of shares of Class A Common Stock and distribution equivalent rights paid on the Company’s Class A Common Stock. These changes in ownership percentage result in adjustments to non-controlling interest and stockholders’ equity, tax effected, but do not impact earnings.

The following table summarizes the changes in stockholders’ equity due to changes in ownership interest during the period:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(In thousands)
Net income (loss) attributable to the Company	$	48,917	$	78,599	$	149,178	$	143,116
Change in ownership of consolidated subsidiaries	(155,839)		3,469		(79,485)		31,667
Change from net income (loss) attributable to the Company's stockholders and transfers with non-controlling interest	$	(106,922)	$	82,068	$	69,693	$	174,783

8. EARNINGS PER COMMON SHARE

The net income (loss) per common share on the condensed consolidated statements of operations is based on the net income (loss) attributable to the Company’s Class A Common Stock or common units for the three and nine months ended September 30, 2024 and 2023, respectively.

Basic and diluted earnings per common share are calculated using the two-class method. The two-class method is an earnings allocation proportional to the respective ownership among holders of Class A Common Stock and participating securities. Basic net income (loss) per common share is calculated by dividing net income (loss) by the weighted-average shares of Class A Common Stock or common units outstanding during the period. Diluted net income (loss) per common share gives effect, when applicable, to unvested shares of Class A Common Stock granted under the LTIP.

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Viper Energy, Inc.

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

A reconciliation of the components of basic and diluted earnings per common share is presented in the table below:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(In thousands, except per share amounts)
Net income (loss) attributable to the period	$	48,917	$	78,599	$	149,178	$	143,116
Less: distributed and undistributed earnings allocated to participating securities(1)	123		146		295		263
Net income (loss) attributable to common stockholders	$	48,794	$	78,453	$	148,883	$	142,853
Weighted average common shares outstanding:
Basic weighted average common shares outstanding	93,695		70,925		90,895		71,803
Effect of dilutive securities:
Potential common shares issuable(2)	52		—		94		—
Diluted weighted average common shares outstanding	93,747		70,925		90,989		71,803
Net income (loss) per common share, basic	$	0.52	$	1.11	$	1.64	$	1.99
Net income (loss) per common share, diluted	$	0.52	$	1.11	$	1.64	$	1.99

(1) Unvested restricted stock units and performance restricted stock units that contain non-forfeitable distribution equivalent rights are considered participating securities and are therefore included in the earnings per share calculation pursuant to the two-class method.

(2) For the three and nine months ended September 30, 2024 and 2023, there were no other significant potential common shares excluded from the computation of diluted earnings per common share.

9. INCOME TAXES

The following table provides the Company’s provision for (benefit from) income taxes and the effective income tax rate for the dates indicated:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
	(In thousands, except for tax rate)
Provision for (benefit from) income taxes	$	17,194		$	21,879		$	42,729		$	39,735
Effective tax rate	13.6		%	9.6		%	11.4		%	9.6		%

The Company’s effective income tax rates for the three and nine months ended September 30, 2024 and 2023 differed from the amounts computed by applying the United States federal statutory tax rate to pre-tax income for the periods primarily due to net income attributable to the non-controlling interest.

As of September 30, 2024 and 2023, the Company maintained a partial valuation allowance against its deferred tax assets considered not more likely than not to be realized, based on its assessment of all available evidence, both positive and negative as required by applicable accounting standards. In March 2024, Diamondback converted approximately 5.28 million shares of the Company’s Class B Common Stock along with 5.28 million Operating Company units into an equivalent number of shares of Class A Common Stock. In connection with this transaction, the Company recognized a $28.2 million increase in its deferred tax asset and a $10.8 million increase in its valuation allowance through additional paid-in capital.

The Company incurred no excise tax on repurchases of Class A Common Stock during the three and nine months ended September 30, 2024 and an immaterial amount of excise tax for the three and nine months ended September 30, 2023.

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Viper Energy, Inc.

Notes to the Condensed Consolidated Financial Statements - (Continued)

(Unaudited)

10. DERIVATIVES

All derivative financial instruments are recorded at fair value. The Company has not designated its derivative instruments as hedges for accounting purposes and, as a result, marks its derivative instruments to fair value and recognizes the cash and non-cash changes in fair value in the condensed consolidated statements of operations under the caption “Gain (loss) on derivative instruments, net.”

Commodity Contracts

The Company historically ha

Viper Energy, Inc. [VNOM] Filings
10-Q	[2024-11]
10-Q	[2024-08]
10-Q	[2024-05-02]
10-K	[2024-02-22]
10-Q	[2023-11-08]
10-Q	[2023-08-03]
10-Q	[2023-05-03]
10-K	[2023-02-23]
10-Q	[2022-11-08]
10-Q	[2022-08-03]
10-Q	[2022-05-05]
10-K	[2022-02-24]
10-Q	[2021-11-04]
10-Q	[2021-08-03]
10-Q	[2021-05-05]
10-K	[2021-02-25]
10-Q	[2020-11-05]
10-Q	[2020-08-05]
10-Q	[2020-05-08]
10-K	[2020-02-18]
10-Q	[2019-10-30]
10-Q	[2019-08-01]
10-Q	[2019-05-01]
10-K	[2019-02-15]
10-Q	[2018-10-30]
10-Q	[2018-08-09]
10-Q	[2018-05-02]
10-K	[2018-02-07]
10-Q	[2017-10-25]
10-Q	[2017-08-02]
10-Q	[2017-05-04]
10-K	[2017-02-15]
10-Q	[2016-11-08]
10-Q	[2016-08-09]
10-Q	[2016-05-05]
10-K	[2016-02-19]
10-Q	[2015-11-06]
10-Q	[2015-08-10]
10-Q	[2015-05-07]
10-K	[2015-02-20]
10-Q	[2014-11-06]
S-1	[2014-08-14]
10-Q	[2014-08-07]
S-1	[2014-05-07]