Kiewit Royalty Trust (KIRY) 10-K 30 Mar 21 2020 FY Annual report Financial data

Document and Entity Information

Document and Entity Information	12 Months Ended
	Dec. 31, 2020USD ($)shares
Document And Entity Information
Entity Registrant Name	KIEWIT ROYALTY TRUST
Entity Central Index Key	0000711477
Document Type	10-K
Document Period End Date	Dec. 31, 2020
Amendment Flag	false
No Trading Symbol Flag	true
Title of 12(b) Security	None
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Interactive Data Current	Yes
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float | $	$ 0
Entity Common Stock, Shares Outstanding | shares	0
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY

STATEMENTS OF ASSETS, LIABILITI

STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Assets
Cash and cash equivalents	$ 288,282	$ 396,526
Royalty and overriding royalty interests in coal leases	167,817	167,817
Less accumulated amortization	(167,817)	(167,817)
Total assets	288,282	396,526
Liabilities
Distributions payable to unit holders	288,282	396,526
Trust Corpus: 12,633,432 units of beneficial interest authorized, issued and outstanding
Total liabilities and trust corpus	$ 288,282	$ 396,526

STATEMENTS OF ASSETS, LIABILI_2

STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS (Parenthetical) - shares	Dec. 31, 2020	Dec. 31, 2019
STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS
Beneficial interest units, authorized (in shares)	12,633,432	12,633,432
Beneficial interest units, issued (in shares)	12,633,432	12,633,432
Beneficial interest units, outstanding (in shares)	12,633,432	12,633,432

STATEMENTS OF DISTRIBUTABLE INC

STATEMENTS OF DISTRIBUTABLE INCOME - USD ($)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
STATEMENTS OF DISTRIBUTABLE INCOME
Royalty income	$ 1,047,086	$ 1,183,904
Interest income	504	7,409
Trust expenses	(190,322)	(188,398)
Distributable income	$ 857,268	$ 1,002,915
Distributable income per unit (in dollars per unit)	$ 0.067857	$ 0.079386

STATEMENTS OF CHANGES IN TRUST

STATEMENTS OF CHANGES IN TRUST CORPUS - USD ($)	3 Months Ended				12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019
STATEMENTS OF CHANGES IN TRUST CORPUS
Trust corpus, beginning of year
Distributable income	$ (56,322)	$ 344,604	$ (7,237)	576,223	$ 1,002,915
Distributions payable to unit holders	(288,282)		(568,986)		(1,002,915)
Trust reserve	344,604	$ (344,604)	$ 576,223	$ (576,223)
Trust corpus, end of year

Summary of Significant Accounti

Summary of Significant Accounting Policies:	12 Months Ended
	Dec. 31, 2020
Summary of Significant Accounting Policies:
Summary of Significant Accounting Policies:	1 . Summary of Significant Accounting Policies: (a) The 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 statement of distributable income. These 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 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. (b) The Trust considers all highly liquid financial instruments with original maturities of three months or less when purchased to be cash equivalents. (c) The Trust was organized to provide an efficient, orderly and practical means of administering the income received from royalty interests and is administered by U.S. Bank National Association, as the sole trustee (the "Trustee"). Pursuant to the terms of the Trust Indenture, the Trust paid the Trustee an annual fee of $100,000 for fiscal years 2020 and 2019, payable each quarter in the amount of $25,000. The Trustee may adjust this fee annually in its sole discretion. The Trust pays a Trustee fee each quarter as long as the Trust has sufficient royalty income to make such payments. (d) In February 2021, the Trust received a payment from the Decker mine in the amount of $97,261. This royalty payment was anticipated to be paid to the Trust in the fourth quarter; however, due to the pending bankruptcy of the mine’s owner, there was a delay in the payment as such payment was required to be approved by the bankruptcy court. Other than such event, we have evaluated the Trust activity and have concluded that there are no material subsequent events requiring additional disclosure or recognition in these financial statements. (e) The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. While the Trust reported income for the periods presented, the Trust receives substantially all of its royalty payments from the Decker Mine, which filed for bankruptcy in December 2020 and has curtailed its mining operations. Further, coal production and prices are depressed generally, which has been exacerbated by the COVID-19 pandemic. These factors, among others, raise substantial doubt about the Trust’s ability to continue as a going concern. Other than the royalty payments from the mines, the Trust does not have any other established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern.

Trust Organization and Provisio

Trust Organization and Provisions:	12 Months Ended
	Dec. 31, 2020
Trust Organization and Provisions:
Trust Organization and Provisions:	2. Trust Organization and Provisions: The Trust was established on May 17, 1982. Units of beneficial interest ("Units") in the Trust were distributed on June 23, 1982 to Class B and Class C shareholders of record of Peter Kiewit Sons', Inc. (now known as Level 3 Communications, Inc.) (the "Trustor"), as of June 10, 1982. These shareholders received one Unit in the Trust for each share of the Trustor's stock held. On June 28, 1982, the Trustor conveyed to the Trust royalty and overriding royalty interests owned by the Trustor's subsidiaries in certain coal properties in the States of Montana and Wyoming. The terms of the Trust Indenture provide, among other things, that: (a) the Trust shall not engage in any business or investment activity of any kind or acquire any assets other than those initially conveyed to the Trust; (b) the Trustee may not sell all or any part of the royalty interests unless approved by a majority of Unit Holders outstanding, in which case the sale must be for cash and the proceeds promptly distributed; (c) the Trustee may establish a cash reserve for the payment of any liability which is contingent or uncertain in amount; (d) the Trustee will make cash distributions to the Unit Holders in January and July of each year as discussed in Note 4; and (e) in September 1994, the Trust Indenture was amended to authorize the Trustee to invest funds in government obligations, government-secured obligations and funds registered pursuant to the Investment Company Act of 1940. Pursuant to the terms of the Trust Indenture, the Trust shall terminate upon the first to occur of the following events: (i) at such time that the Trust's net revenues for each of the three successive years are less than $1 million per year, (ii) the Unit Holders vote in favor of termination at a meeting, or (iii) the expiration of twenty-one years after the death of the last survivor of the issue in being on May 17,1982 of any member of the Board of Directors of Peter Kiewit Sons', Inc. on May 17, 1982. As of the date of this report, none of these termination provisions has been triggered. Net revenue for the fiscal year 2020 was $857,268, resulting in one year of less than $1 million in net revenues.

Royalty and Overriding Royalty

Royalty and Overriding Royalty Interests:	12 Months Ended
	Dec. 31, 2020
Royalty and Overriding Royalty Interests:
Royalty and Overriding Royalty Interests:	3. Royalty and Overriding Royalty Interests: The cash received by the Trustee from the royalty interests will consist of a specified amount per ton or a specified fraction of the value of the total production of the property, free of the expense of development and operation. 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. The royalty interests are fully amortized. The initial carrying value of the royalty and overriding royalty interests in coal leases of $167,817 represents the Trustor's historical net book value at the date of the transfer to the Trust.

Distributions to Unit Holders_

Distributions to Unit Holders:	12 Months Ended
	Dec. 31, 2020
Distributions to Unit Holders:
Distributions to Unit Holders:	4. Distributions to Unit Holders: The Trust determines distributions after the second and fourth quarters. The distribution amount is the excess of (i) the cash received during the applicable period which is attributable to royalties plus any decrease in cash reserves, plus any other cash receipts of the Trust during the period over (ii) the liabilities of the Trust paid during the period, plus any increase in cash reserves. The distribution amount is payable to Unit Holders of record as of the last business day of each period. If paid, the cash distributions are made biannually within the first ten days of January and July. Historically, the Trust made quarterly distributions to the extent funds were available. On August 16, 2016, the Court approved modifications to the Trust Indenture, which included permitting biannual distributions within ten days after June 30 and December 31 of each year to the extent funds are available. Commencing with the third quarter of 2016, the Trust ceased making quarterly distributions and now makes biannual distributions within 10 days after the quarters ending June 30 and December 31.

Income Taxes_

Income Taxes:	12 Months Ended
	Dec. 31, 2020
Income Taxes:
Income Taxes:	5. Income Taxes: Provision for federal and state income taxes has not been made in the financial statements since the Trust has been recognized by the IRS as a "grantor trust" which is not a taxable entity.

Selected Quarterly Financial Da

Selected Quarterly Financial Data (Unaudited):	12 Months Ended
	Dec. 31, 2020
Selected Quarterly Financial Data (Unaudited):
Selected Quarterly Financial Data (Unaudited):	6. Selected Quarterly Financial Data (Unaudited): The following is a summary of the unaudited quarterly financial information: Distributable Distributable Royalty Income Income Income Per Unit For the year ended December 31, 2020 March 31, 2020 $ 600,737 $ — $ — June 30, 2020 50,936 568,986 0.045038 September 30, 2020 395,413 — — December 31, 2020 — 288,282 0.022819 $ 1,047,086 $ 857,268 $ 0.067857 Distributable Distributable Royalty Income Income Income Per Unit For the year ended December 31, 2019: March 31, 2019 $ 658,972 $ — $ — June 30, 2019 26,040 606,389 0.047999 September 30, 2019 457,911 — — December 31, 2019 40,981 396,526 0.031387 $ 1,183,904 $ 1,002,915 $ 0.079386

Summary of Significant Accoun_2

Summary of Significant Accounting Policies: (Policies)	12 Months Ended
	Dec. 31, 2020
Summary of Significant Accounting Policies:
Basis of Accounting:	(a) The 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 statement of distributable income. These 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 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.
Cash and Cash Equivalents:	(b) The Trust considers all highly liquid financial instruments with original maturities of three months or less when purchased to be cash equivalents.
Related Party:	(c) The Trust was organized to provide an efficient, orderly and practical means of administering the income received from royalty interests and is administered by U.S. Bank National Association, as the sole trustee (the "Trustee"). Pursuant to the terms of the Trust Indenture, the Trust paid the Trustee an annual fee of $100,000 for fiscal years 2020 and 2019, payable each quarter in the amount of $25,000. The Trustee may adjust this fee annually in its sole discretion. The Trust pays a Trustee fee each quarter as long as the Trust has sufficient royalty income to make such payments.
Subsequent Events:	(d) In February 2021, the Trust received a payment from the Decker mine in the amount of $97,261. This royalty payment was anticipated to be paid to the Trust in the fourth quarter; however, due to the pending bankruptcy of the mine’s owner, there was a delay in the payment as such payment was required to be approved by the bankruptcy court. Other than such event, we have evaluated the Trust activity and have concluded that there are no material subsequent events requiring additional disclosure or recognition in these financial statements.
Going Concern	(e) The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. While the Trust reported income for the periods presented, the Trust receives substantially all of its royalty payments from the Decker Mine, which filed for bankruptcy in December 2020 and has curtailed its mining operations. Further, coal production and prices are depressed generally, which has been exacerbated by the COVID-19 pandemic. These factors, among others, raise substantial doubt about the Trust’s ability to continue as a going concern. Other than the royalty payments from the mines, the Trust does not have any other established source of revenues sufficient to cover its operating costs and to allow it to continue as a going concern.

Selected Quarterly Financial _2

Selected Quarterly Financial Data (Unaudited): (Tables)	12 Months Ended
	Dec. 31, 2020
Selected Quarterly Financial Data (Unaudited):
Summary of the unaudited quarterly financial information	Distributable Distributable Royalty Income Income Income Per Unit For the year ended December 31, 2020 March 31, 2020 $ 600,737 $ — $ — June 30, 2020 50,936 568,986 0.045038 September 30, 2020 395,413 — — December 31, 2020 — 288,282 0.022819 $ 1,047,086 $ 857,268 $ 0.067857 Distributable Distributable Royalty Income Income Income Per Unit For the year ended December 31, 2019: March 31, 2019 $ 658,972 $ — $ — June 30, 2019 26,040 606,389 0.047999 September 30, 2019 457,911 — — December 31, 2019 40,981 396,526 0.031387 $ 1,183,904 $ 1,002,915 $ 0.079386

Summary of Significant Accoun_3

Summary of Significant Accounting Policies: (Details) - USD ($)	1 Months Ended	3 Months Ended							12 Months Ended
	Feb. 28, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Related Party:
Trust pays to Trustee									$ 100,000	$ 100,000
Quarterly Trustee Fee									25,000
Subsequent Events:
Royalty payment received		$ 395,413	$ 50,936	$ 600,737	$ 40,981	$ 457,911	$ 26,040	$ 658,972	$ 1,047,086	$ 1,183,904
Subsequent Event | Decker mine
Subsequent Events:
Royalty payment received	$ 97,261

Trust Organization and Provis_2

Trust Organization and Provisions: (Details)	Jun. 23, 1982shares	Dec. 31, 2020USD ($)item	Jun. 30, 2020USD ($)	Dec. 31, 2019USD ($)	Jun. 30, 2019USD ($)	Dec. 31, 2020USD ($)item	Dec. 31, 2019USD ($)
Trust Organization and Provisions:
Number of units issued for each share of the Trustor's stock held | shares	1
Successive period for which threshold net revenues is to be maintained to avoid termination of the Trust						3 years
Minimum net revenues to be maintained per year to avoid termination of the Trust						$ 1,000,000
Period after the death of the last survivor of the issue in being on May 17, 1982 for termination of trust						21 years
Number of termination provisions that has been triggered as of reporting date | item		0				0
Net revenue		$ 288,282	$ 568,986	$ 396,526	$ 606,389	$ 857,268	$ 1,002,915

Royalty and Overriding Royalt_2

Royalty and Overriding Royalty Interests: (Details) - USD ($)	Dec. 31, 2020	Dec. 31, 2019
Royalty and Overriding Royalty Interests:
Initial carrying value of royalty and overriding royalty interests in coal leases	$ 167,817	$ 167,817

Distributions to Unit Holders_

Distributions to Unit Holders: (Details)	12 Months Ended
	Dec. 31, 2020
Distributions to Unit Holders:
Number of business days from the first day of the quarter which quarterly cash distributions are made	10 days

Selected Quarterly Financial _3

Selected Quarterly Financial Data (Unaudited): (Details) - USD ($)	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Selected Quarterly Financial Data (Unaudited):
Royalty income		$ 395,413	$ 50,936	$ 600,737	$ 40,981	$ 457,911	$ 26,040	$ 658,972	$ 1,047,086	$ 1,183,904
Distributable income	$ 288,282		$ 568,986		$ 396,526		$ 606,389		$ 857,268	$ 1,002,915
Distributable Income Per Unit (in dollars per unit)	$ 0.022819		$ 0.045038		$ 0.031387		$ 0.047999		$ 0.067857	$ 0.079386