Company Quick10K Filing
Kiewit Royalty Trust
10-Q 2020-06-30 Filed 2020-08-12
10-Q 2020-03-31 Filed 2020-05-12
10-K 2019-12-31 Filed 2020-03-27
10-Q 2019-09-30 Filed 2019-11-12
10-Q 2019-06-30 Filed 2019-08-12
10-Q 2019-03-31 Filed 2019-05-10
10-K 2018-12-31 Filed 2019-03-28
10-Q 2018-09-30 Filed 2018-11-09
10-Q 2018-06-30 Filed 2018-08-09
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-31 Filed 2018-03-30
10-Q 2017-09-30 Filed 2017-11-09
10-Q 2017-06-30 Filed 2017-08-10
10-Q 2017-03-31 Filed 2017-05-11
10-K 2016-12-31 Filed 2017-03-30
10-Q 2016-09-30 Filed 2016-11-14
10-Q 2016-06-30 Filed 2016-08-11
10-Q 2016-03-31 Filed 2016-05-12
10-K 2015-12-31 Filed 2016-03-24
10-Q 2015-09-30 Filed 2015-11-12
10-Q 2015-06-30 Filed 2015-08-13
10-Q 2015-03-31 Filed 2015-05-08
10-K 2014-12-31 Filed 2015-03-27
10-Q 2014-09-30 Filed 2014-11-12
10-Q 2014-06-30 Filed 2014-08-13
10-Q 2014-03-31 Filed 2014-05-13
10-K 2013-12-31 Filed 2014-03-27
10-Q 2013-09-30 Filed 2013-11-08
10-Q 2013-06-30 Filed 2013-08-09
10-Q 2013-03-31 Filed 2013-05-10
10-K 2012-12-31 Filed 2013-03-25
10-Q 2012-09-30 Filed 2012-11-13
10-Q 2012-06-30 Filed 2012-08-14
10-Q 2012-03-31 Filed 2012-05-11
10-K 2011-12-31 Filed 2012-03-26
10-Q 2011-09-30 Filed 2011-11-14
10-Q 2011-06-30 Filed 2011-08-12
10-Q 2011-03-31 Filed 2011-05-16
10-K 2010-12-31 Filed 2011-03-28
10-Q 2010-09-30 Filed 2010-11-12
10-Q 2010-06-30 Filed 2010-08-11
10-Q 2010-03-31 Filed 2010-05-12
10-K 2009-12-31 Filed 2010-03-25
8-K 2018-12-21
8-K 2018-03-12

KIRY 10Q Quarterly Report

Part I &Mdash; Financial Information
Item 1. Financial Statements.
Item 2. Trustee's Discussion and Analysis of Financial Condition and Results of Operations.
Item 4. Controls and Procedures.
Part II &Mdash; Other Information
Item 1. Legal Proceedings.
Item 6. Exhibits.
EX-31 tm2020473d1_ex31.htm
EX-32 tm2020473d1_ex32.htm

Kiewit Royalty Trust Earnings 2020-06-30

Balance SheetIncome StatementCash Flow

10-Q 1 tm2020473d1_10q.htm FORM 10-Q

 

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2020

 

OR

 

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

 

Commission File No. 000-10810

 

KIEWIT ROYALTY TRUST

(Exact name of registrant as specified in its charter)

 

Nebraska
(State or other jurisdiction of
incorporation or organization)
  47-6131402
(I.R.S. Employer Identification No.)

 

Trust Division
U.S. Bank National Association
1700 Farnam Street
Omaha, Nebraska 68102
(Address of principal executive offices and zip code)

 

(402) 536-5100
(Registrant’s telephone number, including area code)

 

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

 

Title of each class: Trading Symbol(s) Name of each exchange on which registered:
     
None None None

 

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 x 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 x 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.

 

Large accelerated filer ¨   Accelerated filer ¨   Non-accelerated filer x   Smaller reporting company x
            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 x

 

 

 

 

 

 

KIEWIT ROYALTY TRUST

FORM 10-Q

For the Three and Six Months Ended June 30, 2020

INDEX

 

    Page
Part I. FINANCIAL INFORMATION   1
     
Item 1. Financial Statements   1
     
Item 2. Trustee’s Discussion and Analysis of Financial Condition and Results of Operations   5
     
Item 4. Controls and Procedures   7
     
Part II. OTHER INFORMATION   8
     
Item 1. Legal Proceedings   8
     
Item 6. Exhibits   8

 

Forward-Looking Statements

 

This Form 10-Q, including specifically the section entitled "Trustee’s Discussion and Analysis of Financial Condition and Results of Operations," includes "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbor created thereby. All statements, other than statements of historical fact, included in this Form 10-Q are forward-looking statements. Such statements include, without limitation, certain statements regarding the Trust’s financial position, industry conditions and other matters contained in this Form 10-Q. Although the Trustee believes that the expectations reflected in such forward-looking statements are reasonable, such expectations are subject to numerous risks and uncertainties, and the Trustee can give no assurance that they will prove to be correct. There are many factors, none of which is within the Trustee’s control, that may cause such expectations not to be realized, including, among other things, factors identified in the Trust's Form 10-K for the year ended December 31, 2019.

 

 

 

 

PART I — FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

KIEWIT ROYALTY TRUST
CONDENSED STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS

 

June 30, 2020 and

December 31, 2019

(unaudited)

 

   June 30,
2020
   December 31,
2019
 
Assets          
Cash and cash equivalents  $568,986   $396,526 
Royalty and overriding royalty interests in coal leases   167,817    167,817 
Less accumulated amortization   (167,817)   (167,817)
           
Net royalty and overriding royalty interests in coal leases   -    - 
Total assets  $568,986   $396,526 
           
Liabilities          
Distributions payable to unit holders  $568,986   $396,526 
           
Trust Corpus: 12,633,432 units of beneficial interest authorized, issued and outstanding   -    - 
           
Total liabilities and trust corpus  $568,986   $396,526 

 

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

 

 1 

 

 

KIEWIT ROYALTY TRUST
CONDENSED STATEMENTS OF DISTRIBUTABLE INCOME
For the three and six months ended June 30, 2020 and 2019
(unaudited)

 

   Three Months Ended June 30, 
   2020   2019 
Royalty income  $50,936   $26,040 
Interest income   10    3,195 
Trust expenses   (58,183)   (57,173)
           
Distributable income  $(7,237)  $(27,938)
           
Distributable income per unit  $(0.0005728)  $(0.0022114)

 

   Six Months Ended June 30, 
   2020   2019 
Royalty income  $651,673   $685,012 
Interest income   496    4,497 
Trust expenses   (83,183)   (83,120)
           
Distributable income  $568,986   $606,389 
           
Distributable income per unit  $0.0450381   $0.0479987 

 

CONDENSED STATEMENTS OF CHANGES IN TRUST CORPUS
For the three and six months ended June 30, 2020 and 2019
(unaudited)

 

   Six Months Ended June 30, 
   2020   2019 
Trust corpus at January 1, 2020 and 2019  $-   $- 
Distributable income   576,223    634,327 
Distributions payable to unit holders   -    - 
Trust reserve   (576,223)   (634,327)
           
Trust corpus at March 31, 2020 and 2019   -    - 
           
Distributable income   (7,237)   (27,938)
Distributions payable to unit holders   (568,986)   (606,389)
Trust reserve   576,223    634,327 
           
Trust corpus at June 30, 2020 and 2019  $-   $- 

 

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

 

 2 

 

 

KIEWIT ROYALTY TRUST
NOTES TO CONDENSED FINANCIAL STATEMENTS
(unaudited)

 

Basis of Presentation

 

The accompanying condensed financial statements have been prepared in accordance with the instructions for Form 10-Q and do not necessarily include all of the information and footnotes required by U.S. generally accepted accounting principles (GAAP) for complete financial statements. In the opinion of U.S. Bank National Association, as sole trustee of the Trust (the "Trustee"), all adjustments necessary for a fair presentation have been included. For further information, refer to the financial statements and footnotes included in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2019.

 

Summary of Significant Accounting Policies

 

(a)          Basis of Accounting:

 

The condensed financial statements of the Trust, as prepared on the modified cash basis, reflect the Trust's assets, liabilities, trust corpus, and distributable income as follows:

 

1.            Royalty income and interest income are recognized in the month in which amounts are received by the Trust.

 

2.            Trust expenses, consisting principally of routine general and administrative costs, include payments made during the accounting period.

 

3.            Reserves for liabilities that are contingent or uncertain in amount may also be established if considered necessary.

 

4.            Net royalty and overriding royalty interests that are producing properties are amortized using the unit-of-production method. This amortization is shown as a reduction of Trust corpus.

 

5.            Distributions to Unit Holders are recognized when declared by the Trustee.

 

6.            Production withholding taxes withheld from Unit Holder distributions and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from royalty income in the condensed statement of distributable income.

 

These condensed statements differ from financial statements prepared in accordance with GAAP and were prepared on the modified cash basis of reporting, which is considered to be the most meaningful because Distributions to Unit Holders are based on net cash receipts. This comprehensive basis of accounting, other than GAAP, corresponds to the accounting permitted for royalty trusts by the U.S. Securities and Exchange Commission as specified by Staff Accounting Bulletin Topic 12E, Financial Statements of Royalty Trusts.

 

The condensed financial statements of the Trust differ from financial statements prepared in conformity with United States generally accepted accounting principles (GAAP) because of the following:

 

·Royalty income and interest income are recognized in the month received rather than in the month of production.

 

·Expenses generally are not accrued.

 

·Amortization of the net royalty and overriding royalty interests is shown as a reduction to Trust corpus and not as a charge to operating results.

 

·Reserves may be established for contingencies that would not be recorded under GAAP.

 

 3 

 

 

(b)           Cash and Cash Equivalents:

 

The Trust considers all highly liquid financial instruments with original maturities of three months or less when purchased to be cash equivalents.

 

(c)           Related Party:

 

The Trust was organized to provide an efficient, orderly and practical means of administering the income received from royalty interests and is administered by the Trustee. Pursuant to the terms of the Trust Indenture, the Trust pays the Trustee an annual fee of $100,000. The Trustee may adjust this fee annually in its sole discretion. The Trust pays a Trustee fee of $25,000 per quarter as long as the Trust has sufficient royalty income to make such payments.

 

(d)           Impact of COVID-19:

 

On March 11, 2020, the World Health Organization declared the novel strain of coronavirus (COVID-19) a global pandemic and recommended containment and mitigation measures worldwide. To date, the Trust has had limited impact from COVID-19 on its financial results and results of operations although the Trust cannot reasonably estimate the length or severity of this pandemic and whether COVID-19 will have any impact on the Trust in future periods.

 

Other than the potential impact of COVID-19, we have evaluated the Trust activity and have concluded that there are no material subsequent events requiring additional disclosure or recognition in these condensed financial statements.

 

 4 

 

 

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

 

Overview.

 

Kiewit Royalty Trust (the "Trust") is a royalty trust with royalty and overriding royalty interests in certain coal leases. The Trust was formed for the purposes of administering the income received from such coal leases and distributing such income (together with interest earned thereon, if any, less payment of or provision for obligations) to the holders of the units of beneficial interest.

 

During the three month and six month periods ended June 30, 2020, the Trust received a total of $50,936 and $651,673, respectively, of royalty and overriding royalty payments, net of production expenses. The following table reflects the royalty and overriding royalty payments, net of production expenses, received by the Trust at the following mines:

 

   Three Months Ended June 30, 
   2020   2019 
Decker Mine  $50,936   $26,040 
Spring Creek Mine   -    - 
Total Royalty Income  $50,936   $26,040 

 

   Six Months Ended June 30, 
   2019   2019 
Decker Mine  $651,673   $685,012 
Spring Creek Mine   -    - 
Total Royalty Income  $651,673   $685,012 

 

Decker Mine. Royalty and overriding royalty amounts received by the Trust from the Decker Mine increased to $50,936 during the second quarter of 2020, as compared to $26,040 received during the same period in 2019. The Decker Mine includes West Decker and East Decker Mine leases. Of the Decker Mines, the primary producer currently is an East Decker Mine. During the six month period ended June 30, 2020, the royalty amounts decreased by $33,339, or approximately 5%, as compared to the same period in 2019. For the first six months of 2020, the Decker Mines sold 1,836,786 tons of coal as compared to 1,430,700 tons of coal for the first six months of 2019. The changes during the period were the net result of changes in the relative amounts of coal mined, which was a normal result of the execution of a mining plan encompassing several coal leases, and decreasing demand in electricity and lower coal prices resulting from the COVID-19 pandemic.

 

Seasonal fluctuations occur in the relative amounts of coal mined under the leases with a majority of the royalty payments being received during the first and third calendar quarters of the year. Earlier this year, the Decker Mine indicated that it was ahead of schedule for Spring 2020 and continues to expect to ship its budgeted tons of coal of 3.8 million for 2020.

 

Spring Creek Mine. The Trust did not receive any royalty payments from the Spring Creek Mine during the first six months of 2020 or 2019. Royalties with respect to this mine are typically paid during the second half of each calendar year but the timing of the first payment varies, and it can be received at the end of the second quarter or beginning of the third quarter. However, it is unknown whether the Trust will receive additional royalties from this mine in the future due to various factors, including the financial struggles of the coal operator, the lack of mining activities in the applicable mines, and the general depletion of coal. Further, the Spring Creek Mine temporarily laid-off workers in Spring 2020 due to the lack of coal demand, resulting from the COVID-19 pandemic, and only recently rehired the workers.

 

 5 

 

 

In 2019, the Spring Creek Mine was sold to Navajo Transitional Energy Company (“NTEC”), which is wholly owned by the Navajo Nation, and is currently operating the mine as a contract operator. The mine shut down briefly in October after the Navajo Nation declined to waive sovereign immunity for the benefit of Montana's Department of Environmental Quality ("MDEQ"). While the MDEQ and NTEC have resolved certain issues, the Spring Creek Mine currently is operating although NTEC has yet to secure mining permits and needs to obtain substantial financial assistance for reclamation. The Navajo Nation announced that it will not issue reclamation bonds for the benefit of this project. The long-term status of the mine operations is unknown, and the Trust intends to continue monitoring the new ownership by NTEC and related matters. At this time, the Trust does not expect that such restructuring will materially impact the results of operations or financial condition of the Trust.

 

Interest Income. The Trust generally earns interest on the royalty payments prior to the distribution to the Unit Holders. During the six months ended June 30, 2020, the Trust earned $496 of interest compared to $4,497 of interest earned during the six months ended June 30, 2019. The decrease in interest resulted from the decreasing interest rates.

 

Trust Expenses. Trust expenses remained consistent at $83,183 for the first six months of 2020, as compared to $83,120 for the same period in 2019. Trust expenses included fees of the Trustee, accountants, attorneys, and other professionals that the Trustee employs in the administration of the Trust. Trust expenses slightly increased to $58,183 for the three month period ending June 30, 2020, as compared to $57,173 for the same period in 2019. The royalty income received by the Trust for the three month period ended June 30, 2020 was not sufficient to pay all Trust expenses incurred during such period, so the Trust utilized certain cash reserves to offset the shortfall. The expenses fluctuate from period to period largely because of the timing of when the Trust receives invoices and pays its expenses.

 

Liquidity and Capital Resources. The Trust's primary source of liquidity is the royalty payments. In accordance with the provisions of the Trust Indenture, generally all income received by the Trust, net of Trust expenses and any amounts placed in reserves, is distributed to the Unit Holders on a biannual basis as long as the Trust has sufficient income. At this time, the Trust does not expect that the COVID-19 pandemic will materially impact the liquidity or capital resources of the Trust.

 

Trust Reserves. The Trust did not establish any trust reserves in the second quarter of 2020 or 2019. During the first quarter of 2020, the Trust established a reserve in the amount of $576,223, and during the first quarter of 2019, the Trust established a reserve in the amount of $634,327. These reserves were established to hold the funds until the next scheduled biannual payment and were paid in the beginning of the third quarter of each year. The Trust currently pays biannual distributions within 10 days after June 30 and December 31 of each year to the extent funds are available.

 

Change in Trust Corpus. During the three- and six-month period ended June 30, 2020, the trust corpus remained unchanged.

 

Off-Balance Sheet Arrangements. As required by the Trust Indenture, the Trust is intended to be passive in nature and the Trustee does not have any control over or any responsibility relating to the operation of the mines under which the Trust has any royalty interests and overriding royalty interests. The Trustee has powers to collect and distribute proceeds received by the Trust and pay Trust liabilities and expenses and its actions have been limited to those activities. As a result, the Trust has not engaged in any off-balance sheet arrangements.

 

Critical Accounting Policies and Estimates. The Trust's condensed financial statements are prepared on a modified cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America, and as such there are no critical accounting policies or estimates.

 

 6 

 

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this Form 10-Q, the officer of the Trustee conducted an evaluation of the Trust's disclosure controls and procedures (as defined in Rules 13a-15(e) of the Securities Exchange Act of 1934). Based upon this evaluation, the officer of the Trustee concluded that the Trust's disclosure controls and procedures were effective in timely alerting her of any material information relating to the Trust that is required to be disclosed by the Trust in the reports it files or submits under the Securities Exchange Act of 1934.

 

Changes in Internal Control Over Financial Reporting. There were no changes in the Trust's internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934) that occurred during the Trust's most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Trust's internal control over financial reporting.

 

Limitations on Controls. The Trustee does not expect that the Trust's disclosure controls and procedures or the Trust's internal control over financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Trust have been detected.

 

 7 

 

 

PART II — OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

There are no material legal proceedings to which the Trust is a party.

 

Item 6. Exhibits.

 

4.1Kiewit Royalty Trust Indenture dated May 17, 1982, as amended June 9, 1982 and June 23, 1982 (filed as Exhibit 4.1 to the Trust’s Form 10-K filed with the Securities and Exchange Commission on March 28, 2002, and incorporated herein by reference).

 

4.2Order dated September 23, 1994, of the County Court of Douglas County, Nebraska (filed as Exhibit 4.2 to the Trust’s Form 10-K filed with the Securities and Exchange Commission on March 28, 2002, and incorporated herein by reference).

 

4.3Order dated August 16, 2016, of the County Court of Douglas County, Nebraska (filed as Exhibit 4.3 for the Trust's Form 10-Q filed with the Securities and Exchange Commission on November 14, 2016 and incorporated herein by reference).

 

31*Certification of Vice President and Trust Advisor pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.

 

32**Certification of Vice President Trust Advisor pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

101.INS***XBRL Instance Document

 

101.SCH***XBRL Taxonomy Extension Schema Document

 

101.CAL***XBRL Taxonomy Extension Calculation Linkbase Document

 

101.LAB***XBRL Taxonomy Extension Label Linkbase Document

 

101.PRE***XBRL Taxonomy Extension Presentation Linkbase Document

 

101.DEF***XBRL Taxonomy Extension Definition Linkbase Document

 

 

*              Filed herewith

 

**           Furnished herewith

 

***         Furnished herewith. Pursuant to applicable federal securities rules and regulations, the Trust has complied with the reporting obligation relating to the submission of interactive data files in such exhibits. Therefore, the Trust is not subject to liability under any anti-fraud provisions of the federal securities laws if the Trust (i) makes a good faith attempt to comply with the interactive data file submission requirements and (ii) upon becoming aware that any such data file fails to comply with such requirements, promptly amends any noncompliant data file. The Trust is also not subject to the liability and anti-fraud provisions of the federal securities laws if an error or omission in an electronic filing results solely from electronic transmission errors beyond the filer’s control and, upon becoming aware of such error or omission, the filer corrects the error or omission by filing an electronic amendment as soon as reasonably practicable. Users of this data are advised that the interactive data files are furnished and not filed, are not part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Exchange Act, as amended, and otherwise are not subject to liability under those sections.

 

 8 

 

 

SIGNATURE

 

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.

 

  KIEWIT ROYALTY TRUST
   
   
  By: U.S. Bank National Association in its
    capacity as Trustee and not in its
    individual capacity or otherwise
   
Dated: August 12, 2020  
   
    By: /s/ G. Rosanna Moore
      G. Rosanna Moore, Vice President and Trust Advisor

 

(The Trust does not have a principal financial or chief accounting officer or any other officers.)

 

 9