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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





Form 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2009

OR

 ̈ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-10982





Cross Timbers Royalty Trust

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Texas                                                          |  | 75-6415930                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



|                                                                                     |  |           
|------------------------------------------------------------------------------------ |  | ----------
|U.S. Trust, Bank of America Private Wealth Management P.O. Box 830650, Dallas, Texas |  | 75283-0650
|(Address of principal executive offices)                                             |  | (Zip Code)

(877) 228-5084

(Registrants telephone number, including area code)

NONE

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

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  þ    No   ̈

Indicate by check mark whether the
registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.
See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act (check one):



|                        |  |                                                  |  |                           |  |  
|----------------------- |  | ------------------------------------------------ |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                |  | Accelerated filer         |  | þ
|                        |  |                                                  | 
|Non-accelerated filer   |  |  ̈  (Do not check if a smaller reporting company) |  | Smaller reporting company |  |  ̈

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

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

Outstanding as of
April 1, 2009

6,000,000









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CROSS TIMBERS ROYALTY TRUST

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2009

TABLE OF CONTENTS



|         |  |                                                                                                      |  |     
|-------- |  | ---------------------------------------------------------------------------------------------------- |  | ----
|         |  |                                                                                                      |  | Page
|         |  | Glossary of Terms                                                                                    |  | 3   
|         |  |                                                                                                     
|PART I.  |  | FINANCIAL INFORMATION                                                                                |  |     
|         |  |                                                                                                     
|Item 1.  |  | Financial Statements                                                                                 |  | 4   
|         |  |                                                                                                     
|         |  | Report of Independent Registered Public Accounting Firm                                              |  | 5   
|         |  |                                                                                                     
|         |  | Condensed Statements of Assets, Liabilities and Trust Corpus at March 31, 2009 and December 31, 2008 |  | 6   
|         |  |                                                                                                     
|         |  | Condensed Statements of Distributable Income for the Three Months Ended March 31, 2009 and 2008      |  | 7   
|         |  |                                                                                                     
|         |  | Condensed Statements of Changes in Trust Corpus for the Three Months Ended March 31, 2009 and 2008   |  | 8   
|         |  |                                                                                                     
|         |  | Notes to Condensed Financial Statements                                                              |  | 9   
|         |  |                                                                                                     
|Item 2.  |  | Trustees Discussion and Analysis                                                                    |  | 11  
|         |  |                                                                                                     
|Item 3.  |  | Quantitative and Qualitative Disclosures about Market Risk                                           |  | 16  
|         |  |                                                                                                     
|Item 4.  |  | Controls and Procedures                                                                              |  | 17  
|         |  |                                                                                                     
|PART II. |  | OTHER INFORMATION                                                                                    |  |     
|         |  |                                                                                                     
|Item 1A. |  | Risk Factors                                                                                         |  | 18  
|         |  |                                                                                                     
|Item 6.  |  | Exhibits                                                                                             |  | 18  
|         |  |                                                                                                     
|         |  | Signatures                                                                                           |  | 19  



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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 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 nonoperating 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. 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 to present fairly the assets, liabilities and trust corpus of the Cross Timbers Royalty Trust at March 31, 2009, and the distributable income and changes in trust corpus
for the three-month periods ended March 31, 2009 and 2008, have been included. Distributable income for such interim periods is not necessarily indicative of distributable income for the full year.



4



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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Bank of America, N.A., as Trustee

for the Cross Timbers Royalty
Trust:

We have reviewed the accompanying condensed statement of assets, liabilities and trust corpus of the Cross Timbers Royalty Trust as of
March 31, 2009 and the related condensed statements of distributable income and changes in trust corpus for the three-month periods ended March 31, 2009 and 2008. These condensed financial statements are the responsibility of the trustee.

We conducted our review in accordance with standards established by the Public Company Accounting Oversight Board (United States). A review of interim
financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance
with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

The accompanying condensed financial statements are prepared on a modified cash basis as described in Note 1 which is a comprehensive basis of
accounting other than accounting principles generally accepted in the United States of America.

Based on our review, we are not aware of any material
modifications that should be made to the condensed financial statements referred to above for them to be in conformity with the basis of accounting described in Note 1.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the statement of assets, liabilities and trust corpus of the Cross Timbers Royalty Trust
as of December 31, 2008, and the related statements of distributable income and changes in trust corpus for the year then ended (not presented herein), included in the trusts 2008 Annual Report on Form 10-K, and in our report dated
February 25, 2009, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed statement of assets, liabilities and trust corpus as of December 31, 2008 is
fairly stated, in all material respects, in relation to the statement of assets, liabilities and trust corpus included in the trusts 2008 Annual Report on Form 10-K from which it has been derived.

KPMG LLP

Fort Worth, Texas

April 27, 2009



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CROSS TIMBERS ROYALTY TRUST



Condensed Statements of Assets,
Liabilities and Trust Corpus



|                                                                                 |  |               |            |                  |   |            
|-------------------------------------------------------------------------------- |  | ------------- | ---------- | ---------------- | - | -----------
|                                                                                 |  | March 31,2009 |            | December 31,2008
|                                                                                 |  | (Unaudited)   |            |                 
|ASSETS                                                                           |  |               |            |                  |   |            
|                                                                                 |  |              
|Cash and short-term investments                                                  |  | $             | 707,868    |                  | $ | 1,514,797  
|                                                                                 |  |              
|Interest to be received                                                          |  |               |           |                  |   | 467        
|                                                                                 |  |              
|Net profits interests in oil and gas propertiesnet (Note 1)                     |  |               | 17,070,957 |                  |   | 17,255,761 
|                                                                                 |  |               |            |                  |   |            
|                                                                                 |  |              
|                                                                                 |  | $             | 17,778,825 |                  | $ | 18,771,025 
|                                                                                 |  |               |            |                  |   |            
|LIABILITIES AND TRUST CORPUS                                                     |  |               |            |                  |   |            
|                                                                                 |  |              
|Distribution payable to unitholders                                              |  | $             | 707,868    |                  | $ | 1,515,264  
|                                                                                 |  |              
|Trust corpus (6,000,000 units of beneficial interest authorized and outstanding) |  |               | 17,070,957 |                  |   | 17,255,761 
|                                                                                 |  |               |            |                  |   |            
|                                                                                 |  |              
|                                                                                 |  | $             | 17,778,825 |                  |   | $18,771,025
|                                                                                 |  |               |            |                  |   |            

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 EndedMarch 31
|                                                |  | 2009                       |           | 2008
|Net profits income                              |  | $                          | 2,805,299 |      | $ | 6,885,854
|                                                |  |                           
|Interest income                                 |  |                            | 72        |      |   | 6,478    
|                                                |  |                            |           |      |   |          
|                                                |  |                           
|Total income                                    |  |                            | 2,805,371 |      |   | 6,892,332
|                                                |  |                           
|Administration expense                          |  |                            | 135,581   |      |   | 126,054  
|                                                |  |                            |           |      |   |          
|                                                |  |                           
|Distributable income                            |  | $                          | 2,669,790 |      | $ | 6,766,278
|                                                |  |                            |           |      |   |          
|                                                |  |                           
|Distributable income per unit (6,000,000 units) |  | $                          | 0.444965  |      | $ | 1.127713 
|                                                |  |                            |           |      |   |          

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 EndedMarch 31 |           
|                                      |  | 2009                       |            |   | 2008 |  
|                                      |  |                           
|Trust corpus, beginning of period     |  | $                          | 17,255,761 |   |      | $ | 18,387,752 |  
|                                      |  |                           
|Amortization of net profits interests |  |                            | (184,804   | ) |      |   | (294,528   | )
|                                      |  |                           
|Distributable income                  |  |                            | 2,669,790  |   |      |   | 6,766,278  |  
|                                      |  |                           
|Distributions declared                |  |                            | (2,669,790 | ) |      |   | (6,766,278 | )
|                                      |  |                            |            |   |      |   |            |  
|                                      |  |                           
|Trust corpus, end of period           |  | $                          | 17,070,957 |   |      | $ | 18,093,224 |  
|                                      |  |                            |            |   |      |   |            |  

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 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 (GAAP):



| | - | Net profits income recorded for a month is the amount computed and paid by XTO Energy Inc., the owner of the underlying properties, to Bank of America, N.A., as trustee for the
trust. Net profits income consists of net proceeds received by XTO Energy from the underlying properties in the prior month, multiplied by net profit percentages 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, and do not include production expense or development costs. For the 75% net profits interests, costs deducted in the calculation of net proceeds include production expense, development costs, applicable
taxes, transportation, marketing and legal costs, operating charges and other costs.



| | - | Net profits income is computed separately for each of 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, interest to be received and distribution payable to unitholders include interest to be earned on net profits income from the monthly record date (last business day
of the month) through the date of the next distribution to unitholders.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | 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 financial statements of the trust 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 for contingencies which would not be accrued 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.



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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.

In December 2008, the
Securities and Exchange Commission (SEC) released Final Rule, Modernization of Oil and Gas Reporting.The new disclosure requirements include provisions that permit the use of new technologies to determine proved reserves if those
technologies have been demonstrated empirically to lead to reliable conclusions about reserves volumes. The new requirements also will allow companies to disclose their probable and possible reserves to investors. In addition, the new disclosure
requirements require companies to: (a) report the independence and qualifications of its reserves preparer or auditor; (b) file reports when a third party is relied upon to prepare reserves estimates or conducts a reserves audit; and
(c) report oil and gas reserves using an average price based upon the prior 12-month period rather than year-end prices. The new disclosure requirements are effective for financial statements for fiscal years ending on or after
December 31, 2009. The effect of adopting the SEC rule has not been determined, but it is not expected to have a significant effect on the trusts reported financial position or distributable income.

The initial carrying value of the net profits interests of $61,100,449 represents XTO Energys historical net book value on February 12, 1991,
the creation date of the trust. Amortization of the net profits interests is calculated on a unit-of-production basis and is charged directly to trust corpus. Accumulated amortization was $44,029,492 as of March 31, 2009 and $43,844,688 of
December 31, 2008.



|2. | Contingencies
|-- | -------------

Several states have enacted
legislation to require state income tax withholding from nonresident recipients of oil and gas proceeds. After consultation with its state tax counsel, XTO Energy has advised the trustee that it believes the trust is not subject to these withholding
requirements. However, regulations are subject to change by the various states, which could change this conclusion. Should the trust be required to withhold state taxes, distributions to the unitholders would be reduced by the required amount,
subject to the unitholders right to file a state tax return to claim any refund due.



|3. | Lawsuit Settlements
|-- | -------------------

Certain of the underlying
properties are involved in various lawsuits and certain governmental proceedings arising in the ordinary course of business. XTO Energy has advised the trustee that it does not believe that the ultimate resolution of these claims will have a
material effect on trust annual distributable income, financial position or liquidity.

In January 2008, the calculation of net profits
income included a lawsuit settlement of $827,446 related to underpayment of royalties on underlying properties in the San Juan Basin. Included in this settlement was interest of $212,654 and additional gas revenue of $614,792. The total settlement,
net to the trust, was $744,702, or $0.12 per unit. Based on additional information received by XTO Energy in April 2008, the amount allocated to interest income was increased to $348,916. This reallocation did not change the total lawsuit
settlement.



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|4. | Excess Costs
|-- | ------------

Significantly lower oil prices and
elevated costs caused costs to exceed revenues by a total of $196,211 ($147,158 net to the trust) on properties underlying the Texas working interest for January through March 2009 and by $244,677 ($183,508 net to the trust) on properties underlying
the Oklahoma working interest in February and March 2009. However, these costs did not reduce net proceeds from the remaining conveyances. With continued downward pressure on realized oil prices from the U.S. and global recessions, excess costs are
expected to continue over the near term resulting in lower monthly distributions.

Item 2. Trustees Discussion and
Analysis.

The following discussion should be read in conjunction with the trustees discussion and analysis contained in the trusts 2008
annual report, 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 web site at www.crosstimberstrust.com.

Distributable Income

For the quarter ended March 31, 2009, net profits income was $2,805,299 compared to $6,885,854 for first quarter 2008. This 59% decrease in net profits income is the
result of lower oil and gas prices, lawsuit settlement proceeds included in first quarter 2008 and increased production expense, partially offset by excess costs on the Texas and Oklahoma working interest properties in first quarter 2009. See
Net Profits Income and Other Proceeds below.

After considering interest income of $72 and administration expense of $135,581,
distributable income for the quarter ended March 31, 2009 was $2,669,790, or $0.444965 per unit of beneficial interest. Administration expense for the quarter increased 8% from the prior year quarter primarily because of the timing of
expenditures. For first quarter 2008, distributable income was $6,766,278, or $1.127713 per unit. Distributions to unitholders for the quarter ended March 31, 2009 were:



|                  |  |                   |  |                      
|----------------- |  | ----------------- |  | ---------------------
|Record Date       |  | Payment Date      |  | Distribution per Unit
|January 30, 2009  |  | February 13, 2009 |  | $0.222855            
|February 27, 2009 |  | March 13, 2009    |  | 0.104132             
|March 31, 2009    |  | April 14, 2009    |  | 0.117978             
|                  |  |                   |  |                      
|                  |  |                   |  | $0.444965            
|                  |  |                   |  |                      



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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:



| |  | oil and gas sales volumes,
| | - | --------------------------



| |  | oil and gas sales prices, and
| | - | -----------------------------



| |  | costs deducted in the calculation of net profits income.
| | - | --------------------------------------------------------

Because
properties underlying the 90% net profits interests are royalty and overriding royalty interests, the calculation of net profits income from these interests only 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 and development costs 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 EndedMarch 31 (a) |           | Increase(Decrease) |     
|                                |  | 2009                           |           |                    | 2008 |  
|Sales Volumes                   |  |                                |           |                    |      |   |            |  |      |   
|Oil (Bbls) (b)                  |  |                                |           |                    |      |   |            |  |      |   
|Underlying properties           |  |                                | 56,631    |                    |      |   | 57,619     |  | (2   | %)
|Average per day                 |  |                                | 616       |                    |      |   | 626        |  | (2   | %)
|Net profits interests           |  |                                | 14,370    |                    |      |   | 32,787     |  | (56  | %)
|                                |  |                                |          
|Gas (Mcf) (b)                   |  |                                |           |                    |      |   |            |  |      |   
|Underlying properties           |  |                                | 504,727   |                    |      |   | 503,759    |  |     |   
|Average per day                 |  |                                | 5,486     |                    |      |   | 5,476      |  |     |   
|Net profits interests           |  |                                | 435,785   |                    |      |   | 448,374    |  | (3   | %)
|                                |  |                                |          
|Average Sales Prices            |  |                                |           |                    |      |   |            |  |      |   
|Oil (per Bbl)                   |  | $                              | 41.50     |                    |      | $ | 85.60      |  | (52  | %)
|Gas (per Mcf) (c)               |  | $                              | 6.12      |                    |      | $ | 10.55      |  | (42  | %)
|                                |  |                                |          
|Revenues                        |  |                                |           |                    |      |   |            |  |      |   
|Oil sales                       |  | $                              | 2,350,344 |                    |      | $ | 4,932,096  |  | (52  | %)
|Gas sales (c)                   |  |                                | 3,087,310 |                    |      |   | 5,313,683  |  | (42  | %)
|                                |  |                                |           |                    |      |   |            |  |      |   
|Total Revenues                  |  |                                | 5,437,654 |                    |      |   | 10,245,779 |  | (47  | %)
|                                |  |                                |           |                    |      |   |            |  |      |   
|                                |  |                                |          
|Costs                           |  |                                |           |                    |      |   |            |  |      |   
|Taxes, transportation and other |  |                                | 906,910   |                    |      |   | 1,156,988  |  | (22  | %)
|Production expense (d)          |  |                                | 1,527,575 |                    |      |   | 944,516    |  | 62   | % 
|Development costs               |  |                                | 314,861   |                    |      |   | 353,661    |  | (11  | %)
|Excess costs (e)                |  |                                | (440,888  | )                  |      |   |           |  |     |   
|                                |  |                                |           |                    |      |   |            |  |      |   
|Total Costs                     |  |                                | 2,308,458 |                    |      |   | 2,455,165  |  | (6   | %)
|                                |  |                                |           |                    |      |   |            |  |      |   
|                                |  |                                |          
|Other Proceeds                  |  |                                |           |                    |      |   |            |  |      |   
|Interest Income (c)             |  |                                |          |                    |      |   | 212,654    |  | (100 | %)
|                                |  |                                |          
|Net Proceeds                    |  | $                              | 3,129,196 |                    |      | $ | 8,003,268  |  | (61  | %)
|                                |  |                                |           |                    |      |   |            |  |      |   
|                                |  |                                |          
|Net Profits Income              |  | $                              | 2,805,299 |                    |      | $ | 6,885,854  |  | (59  | %)
|                                |  |                                |           |                    |      |   |            |  |      |   



|(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 based upon a formula that considers oil and gas prices and the total amount of production expense and
development costs. Changes in any of these factors may result in disproportionate fluctuations in volumes allocated to the net profits interests. Therefore, comparative discussion of oil and gas sales volumes is based on the underlying properties.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | In first quarter 2008, $827,446 was received related to a lawsuit settlement for underpayment of royalties on certain San Juan Basin properties. Included in this settlement
was estimated interest of $212,654. This settlement increased the average gas sales price by $1.22 for the quarter ended March 31, 2008. The total one-time settlement, net to trust, was $744,702, or $0.12 per unit.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) | Includes an overhead charge which is deducted and retained by XTO Energy. As of March 31, 2009, this charge was $31,810 per month (including a monthly overhead charge of
$2,809 which XTO Energy deducts as operator of the Penwell Unit) and is subject to adjustment each May based on an oil and gas industry index.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) | 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 2008 to first
quarter 2009:

Sales Volumes

Oil

Oil sales volumes decreased 2% from first quarter 2008 to first quarter 2009 primarily because of natural production decline, partially offset by the timing of cash
receipts.

Gas

Gas sales volumes remained relatively
flat from first quarter 2008 to first quarter 2009 as the timing of cash receipts and increased production from new wells and workovers were partially offset by natural production decline.

Sales Prices

Oil

The first quarter 2009 average oil price was $41.50 per Bbl, a 52% decrease from the first quarter 2008 average price of $85.60 per Bbl. Lower demand as a result of the
U.S. recession and slowing global economy, the tightened credit markets and rising crude oil supplies have caused recent oil prices to decline. Oil prices are expected to remain volatile. The first quarter 2009 oil price is primarily related to
production from November 2008 through January 2009, when the average NYMEX price was $46.91 per Bbl. The average NYMEX price for February and March 2009 was $43.77 per Bbl. At April 16, 2009, the average NYMEX futures price for the following
twelve months was $57.67 per Bbl. Recent trust oil prices have averaged approximately 22% lower than the NYMEX price.

Gas

The first quarter 2009 average gas price was $6.12 per Mcf, a 42% decrease from the first quarter 2008 average price of $10.55 per Mcf. Excluding the effects of the
lawsuit settlement in first quarter 2008, the average price was $9.33. See Other Proceeds below. Due to concerns of oversupply from shale gas development, declining demand due to the U.S. recession, falling oil prices and increased gas
storage, recent gas prices have declined. Prices will continue to be affected by weather, oil prices, the U.S. economy, the level of North American production, storage levels and import levels of liquified natural gas. Natural gas prices are
expected to remain volatile. The first quarter 2009 gas price is primarily related to production from October through December 2008, when the average NYMEX price was $6.94 per MMBtu. The average NYMEX price for January through March 2009 was $4.89
per MMBtu. At April 16, 2009, the average NYMEX futures price for the following twelve months was $4.76 per MMBtu. Recent trust gas prices have averaged approximately 14% lower than the NYMEX price.



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Costs

Taxes,
Transportation and Other

Taxes, transportation and other decreased 22% for the first quarter primarily because of lower production taxes related to
lower oil and gas revenues, partially offset by increased property taxes related to the timing of expenditures.

Production Expense

Production expense increased 62% for the first quarter primarily because of increased overhead, maintenance and carbon dioxide injection costs, as well as the timing of
expenditures.

Development

Development costs decreased
11% for the first quarter primarily because of decreased activity and costs related to Texas and Oklahoma properties underlying the 75% net profits interests.

Excess Costs

Significantly lower oil prices and elevated costs caused costs to exceed revenues by a total of $196,211 ($147,158 net to the
trust) on properties underlying the Texas working interest for January through March 2009 and by $244,677 ($183,508 net to the trust) on properties underlying the Oklahoma working interest in February and March 2009. However, these costs did not
reduce net proceeds from the remaining conveyances. With continued downward pressure on realized oil prices from the U.S. and global recessions, excess costs are expected to continue over the near term resulting in lower monthly distributions.

Contingencies

Several states have enacted legislation
to require state income tax withholding from nonresident recipients of oil and gas proceeds. After consultation with its state tax counsel, XTO Energy has advised the trustee that it believes the trust is not subject to these withholding
requirements. However, regulations are subject to change by the various states, which could change this conclusion. Should the trust be required to withhold state taxes, distributions to the unitholders would be reduced by the required amount,
subject to the unitholders right to file a state tax return to claim any refund due.

Other Proceeds

In January 2008, the calculation of net profits income included a lawsuit settlement of $827,446 related to underpayment of royalties on underlying properties in the San
Juan Basin. Included in this settlement was interest of $212,654 and additional gas revenue of $614,792. The total settlement, net to the trust, was $744,702, or $0.12 per unit. Based on additional information received by XTO Energy in April 2008,
the amount allocated to interest income was increased to $348,916. This reallocation did not change the total lawsuit settlement.



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Pending Securities and Exchange Commission Rule

In December 2008, the Securities and Exchange Commission (SEC) released Final Rule, Modernization of Oil and Gas Reporting.The new disclosure requirements include provisions that permit the use of new
technologies to determine proved reserves if those technologies have been demonstrated empirically to lead to reliable conclusions about reserves volumes. The new requirements also will allow companies to disclose their probable and possible
reserves to investors. In addition, the new disclosure requirements require companies to: (a) report the independence and qualifications of its reserves preparer or auditor; (b) file reports when a third party is relied upon to prepare
reserves estimates or conducts a reserves audit; and (c) report oil and gas reserves using an average price based upon the prior 12-month period rather than year-end prices. The new disclosure requirements are effective for financial statements
for fiscal years ending on or after December 31, 2009. The effect of adopting the SEC rule has not been determined, but it is not expected to have a significant effect on the trusts reported financial position or distributable income.

Forward-Looking Statements

This report on Form 10-Q
includes 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. All statements other than statements of
historical fact included in this Form 10-Q including, without limitation, statements regarding the net profits interests, underlying properties, development activities, development, production and other costs and expenses, oil and gas prices and
differentials to NYMEX prices, distributions to unitholders and industry and market conditions, are forward-looking statements that are subject to risks and uncertainties which are detailed in Part I, Item 1A of the trusts Annual Report
on Form 10-K for the year ended December 31, 2008, which is incorporated by this reference as though fully set forth herein. Although XTO Energy and the trustee believe that the expectations reflected in such forward-looking statements are
reasonable, neither XTO Energy nor the trustee can give any assurance that such expectations will prove to be correct.

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

There have been no material changes in
the trusts market risks from the information disclosed in Part II, Item 7A of the trusts annual report on Form 10-K for the year ended December 31, 2008 other than the addition of the market risk described below:

Currently, cash held by the trustee as a reserve for liabilities and for the payment of expenses and distributions to unitholders is invested in Bank of America, N.A.
certificates of deposit which are backed by the good faith and credit of Bank of America, N.A., but are only insured by the Federal Deposit Insurance Corporation up to $250,000. Each unitholder should independently assess the creditworthiness of
Bank of America, N.A. For more information about the credit rating of Bank of America, N.A., please refer to its periodic filings with the SEC. The trust does not lend money and has limited ability to borrow money, which the trustee believes limits
the trusts risk from the current tightening of credit markets. The trusts future royalty income, however, may be subject to risks relating to the creditworthiness of the operators of the underlying properties and other purchasers of
crude oil and natural gas produced from the underlying properties, as well as risks associated with fluctuations in the price of crude oil and natural gas. See Item 1A  Risk Factors  Cash held by the trustee is not fully insured by
the Federal Deposit Insurance Corporation, and future royalty income may be subject to risks relating to the creditworthiness of third parties. Information contained in Bank of America, N.As periodic filings with the SEC is not
incorporated by reference into this quarterly report on Form 10-Q and should not be considered part of this report or any other filing that the trust makes with the SEC.



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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 timely alerting the trustee to material information relating to the trust
required to be included in the trusts periodic filings with the Securities and Exchange Commission. In its evaluation of disclosure controls and procedures, the trustee has relied, to the extent considered reasonable, on information provided
by XTO Energy Inc. 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 1.

Not applicable.

Item 1A. Risk Factors.

Except as set forth below, 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, 2008

Cash held by the trustee is not fully insured by the Federal Deposit Insurance Corporation, and future royalty income may be subject to risks relating to the creditworthiness of third parties.

Currently, cash held by the trustee as a reserve for liabilities and for the payment of expenses and distributions to unitholders is invested in Bank of
America, N.A. certificates of deposit which are backed by the good faith and credit of Bank of America, N.A., but are only insured by the Federal Deposit Insurance Corporation up to $250,000. Each unitholder should independently assess the
creditworthiness of Bank of America, N.A. For more information about the credit rating of Bank of America, N.A., please refer to its periodic filings with the SEC. The trust does not lend money and has limited ability to borrow money, which the
trustee believes limits the trusts risk from the current tightening of credit markets. The trusts future royalty income, however, may be subject to risks relating to the creditworthiness of the operators of the underlying properties and
other purchasers of crude oil and natural gas produced from the underlying properties, as well as risks associated with fluctuations in the price of crude oil and natural gas. Information contained in Bank of America, N.As periodic
filings with the SEC is not incorporated by reference into this quarterly report on Form 10-Q and should not be considered part of this report or any other filing that the trust makes with the SEC.

Items 2 through 5.

Not applicable.

Item 6. Exhibits.

(a)
Exhibits.



|                               |  |                                                                                                                                                                                               
|------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number and Description
|                               | 
|(15)                           |  | Awareness letter of KPMG LLP                                                                                                                                                                  
|                               | 
|(31)                           |  | Rule 13a-14(a)/15d-14(a) Certification                                                                                                                                                        
|                               | 
|(32)                           |  | Section 1350 Certification                                                                                                                                                                    
|                               | 
|(99)                           |  | Items 1A, 7 and 7A to the Annual Report on Form 10-K for Cross Timbers Royalty Trust filed with the Securities and Exchange Commission on February 25, 2009 (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 BANK OF
AMERICA, N.A., TRUSTEE
|                     |  |  | 
|                     |  |  |  | By                                                            |                             | /S/ NANCY G.
WILLIS 
|                     |  |  |  |                                                               |                             | Nancy G. Willis     
|                     |  |  |  |                                                               |                             |                      |  | Vice President
|                     |  | 
|                     |  |  |  | XTO ENERGY INC.                                              
|                     |  |  | 
|Date: April 28, 2009 |  |  |  | By                                                            |                             | /S/ LOUIS G.
BALDWIN
|                     |  |  |  |                                                               |                             | Louis G. Baldwin    
|                     |  |  |  |                                                               | Executive Vice President   
|                     |  |  |  |                                                               | and Chief Financial Officer



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