<PAGE> 1
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1997
Commission File No. 0-10810
KIEWIT ROYALTY TRUST
(Exact name of Registrant as specified in its charter)
Nebraska 47-6131402
- --------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
U.S. Bank National Assocition
d/b/a First Bank, N.A.
1700 Farnam Street
Omaha, Nebraska 68102
----------------------------------------
(Address of Principal Executive Offices)
(402) 348-6000
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(Registrant's telephone no. including area code)
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
--- ---
APPLICABLE ONLY TO CORPORATE REGISTRANTS
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
As of June 30, 1997, there were 12,633,432 Units of Beneficial
Interest of the registrant outstanding.
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
KIEWIT ROYALTY TRUST
STATEMENT OF ASSETS, LIABILITY AND TRUST CORPUS
as of June 30, 1997 and December 31, 1996
<TABLE>
<CAPTION>
ASSETS 1997 1996
- ------ ---- ----
<S> <C> <C>
Cash equivalents $ 231,194 $ 244,268
Royalty and overriding
royalty interests in coal
leases $ 167,817 $ 167,817
Less accumulated amortization (78,160) (76,921)
Net royalty and overriding
royalty interests in coal
leases $ 89,657 $ 90,896
------------- -------------
TOTAL ASSETS 320,851 $ 335,164
============= =============
LIABILITY AND TRUST CORPUS
- --------------------------
Distribution payable to unit holders $ 231,194 $ 244,268
Trust corpus: 12,633,432 units of beneficial
interest authorized and outstanding $ 89,657 $ 90,896
------------- -------------
Total Liabilities and Trust Corpus $ 320,851 $ 335,164
============= =============
</TABLE>
The accompanying notes are an integral part
of the financial statements
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KIEWIT ROYALTY TRUST
STATEMENT OF DISTRIBUTABLE INCOME
For the Three Months and Six Months Ended June 30, 1997 and 1996
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
---------------------- -----------------------
1997 1996 1997 1996
--------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Royalty Income $238,339 $296,676 $2,088,444 $2,540,357
Interest Income 5,496 8,163 21,838 31,369
Trust Expenses (12,641) (13,954) (27,529) (29,472)
-------- -------- --------- -------
Distributable
Income $231,194 $290,885 $2,082,753 $2,542,254
Distributable
income per unit
(12,633,432 units) $.0183002 $.0230250 $ .1648604 $ .2012323
</TABLE>
STATEMENT OF CHANGES IN TRUST CORPUS
For the Six Months Ended June 30, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
----------- ------------
<S> <C> <C>
Trust Corpus as of January 1 $ 90,896 $ 96,920
Amortization of royalty interests (1,239) (3,829)
Distributable Income 2,082,753 2,542,254
Distribution to Unit Holders (2,082,753) (2,542,254)
------------ -------------
Trust Corpus as of June 30 $ 89,657 $ 93,091
============ =============
</TABLE>
See Accompanying Notes to Financial Statements
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KIEWIT ROYALTY TRUST
Notes to Financial Statements
as of June 30, 1997 and December 31, 1996
BASIS OF PRESENTATION
The accompanying unaudited 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 generally accepted accounting
principles for complete financial statements. In the Trustee's opinion, 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, 1996.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited financial statements have been prepared on
the following basis:
(a) The royalty income recorded for a month is the amount computed
and paid by the lease holder to the Trustee for such month.
(b) Trust administration expenses are recorded in the month they
accrue.
This basis for reporting royalty income is thought to be the most meaningful
because distributions to the Unit Holders for a month are based on net cash
receipts for such month. However, these statements differ from financial
statements prepared in accordance with generally accepted accounting principles
because, under such principles, royalty income for a month would be based on
production for such month without regard to when calculated or received. In
addition, amortization of the net royalty and overriding royalty interests,
which is calculated on a units-of-production basis by lease, is charged
directly to trust corpus, since such amount does not affect distributable
income.
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<PAGE> 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
a. MATERIAL CHANGES IN FINANCIAL CONDITION.
Kiewit Royalty Trust is a royalty trust with royalty and overriding
royalty interests in certain coal leases. The Trust was formed for the purposes
of (1) administering the income received from such coal leases and (2)
distributing such income (together with interest earned thereon less payment of
or provision for obligations) to the holders of the Units of Beneficial
Interest.
b. MATERIAL CHANGES IN RESULTS OF OPERATIONS.
During the six months ended June 30, 1997, the Trust received a total
of $2,088,444 of royalty and overriding royalty payments; during the three
months ended June 30, it received a total of $238,339 of such payments. The
following schedule reflects the royalty and overriding royalty amounts received
by the Trust from each mine.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
Mine June 30 June 30
----
------------------------ -------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Black Butte $ (274) $ 14,487 $ (274) $ 152,026
Decker 237,064 230,673 2,074,112 2,335,322
Big Horn 1,549 1,516 14,606 3,009
Spring Creek - 50,000 - 50,000
-------- -------- ---------- ----------
$238,339 $296,676 $2,088,444 $2,540,357
======== ======== ========== ==========
</TABLE>
I. BLACK BUTTE MINE.
The Trust paid Black Butte Mine $274 during the first six months of
1997, as compared to receiving a royalty of $152,026 during the first six
months of 1996, and paid Black Butte Mine $274 during the three months ended
June 30, 1997, as compared to receiving a royalty of $14,487 during the three
months ended June 30, 1996. The $274 payment relates to a revision in the
royalties for the first quarter of 1996. The decrease in royalties received
during the first six months and second quarter of 1997 as compared to the
corresponding periods of 1996 reflects the fact that federal lease
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<PAGE> 6
number W-6266 was renewed effective April 1, 1996 and the Trust no longer
receives an overriding royalty on coal produced after March 31, 1996, as
explained below.
Lease number W-6266 provides that the terms and conditions of the
lease are subject to "reasonable readjustment" effective on April 1, 1996. At
that time, the royalty rate payable to the United States was increased to
12-1/2%, which is the currently prevailing federal royalty rate. Because of the
cap on the amount of the overriding royalty payable to the Trust with respect
to this lease, the increased federal royalty rate has effectively eliminated
further payments to the Trust with respect to this lease.
ii. DECKER MINE.
The amount of royalties and overriding royalties received by the Trust
with respect to the Decker Mine decreased to $2,074,112 in the first six months
of 1997 compared to $2,335,322 during the same period in 1996. For the second
quarter, the amounts received increased to $237,064 compared to the $230,673
received during the second quarter of 1996. These changes in royalty and
overriding royalty amounts received were due to changes in the relative amounts
of coal mined under leases bearing high and low overriding royalty rates per
ton, which are a normal result of the execution of a mining plan encompassing
several coal leases bearing different royalty rates.
iii. BIG HORN MINE.
Royalties received from the Big Horn Mine increased to $1,549 during
the second quarter of 1997 from $1,516 in 1996, and overall receipts for the
first six months of 1997 increased to $14,606 compared to $3,009 during the
corresponding period in 1996. These increases for 1997 reflect increased
production in the relative amounts of coal mined under leases bearing high and
low overriding royalty rates per ton. The relatively small amount of receipts
generally reflects minimal current production at the mine.
iv. SPRING CREEK MINE.
The Trust received no royalties from the Spring Creek Mine during the
first six months of 1997 as compared to $50,000 in royalties in the first half
of 1996. The amount for 1996 represents the minimum annual royalty, which was
received during the second quarter; in 1997, the minimum annual royalty was
received during the third quarter. In general, royalties due from the Spring
Creek Mine are typically paid by the mine operator on an annual basis during
the third quarter of a calendar year.
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PART II - OTHER INFORMATION.
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which the Trust is
a party of which any of its property is the subject.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
4.1 Kiewit Royalty Trust Indenture dated May 17, 1982, as amended June
9, 1982 and June 23, 1982 (filed as Exhibit 1 to the Trust's Form 10
filed with the Securities and Exchange Commission on December 23,
1982, and incorporated herein by reference).
4.2 Order dated September 23, 1994, of the County Court of Douglas
County, Nebraska (filed as Exhibit 2 to the Trust's Form 10-Q filed
with the Securities and Exchange Commision on November 14, 1994, and
incorporated herein by reference).
27.1 Financial Data Schedule.
(b) No reports on Form 8-K were filed during the quarter for which this report
is filed.
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<PAGE> 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
(Registrant)
By: U.S. Bank National Association
d/b/a First Bank, N.A., in its capacity as
Trustee and not in its individual capacity or
otherwise
By: /s/ Susan K. Rosburg
--------------------
Susan K. Rosburg
Trust Officer
Dated: August 12, 1997
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 231,194
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 320,851
<CURRENT-LIABILITIES> 231,194
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 89,657
<TOTAL-LIABILITY-AND-EQUITY> 320,851
<SALES> 0
<TOTAL-REVENUES> 2,110,282
<CGS> 0
<TOTAL-COSTS> 2,082,753
<OTHER-EXPENSES> 27,529
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.16
</TABLE>
