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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2004 Commission File No. 0-10810 KIEWIT ROYALTY TRUST  Nebraska
    
    47-6131402(State or other jurisdiction of
incorporation or organization)
    
    (I.R.S. Employer Identification No.)Trust DivisionU.S. Bank National Association1700 Farnam StreetOmaha, Nebraska(Address of Principal Executive
    
    68102Offices)
    
    (Zip Code)
 (402) 348-6000
(Registrants Telephone Number, 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 o Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act) Yes o No x There were 12,633,432 Units of Beneficial Interest outstanding as of May
14, 2004.




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KIEWIT ROYALTY TRUST FORM 10-Q For the Quarter Ended March 31, 2004 INDEX PagePart I. Financial InformationItem 1.
    
    Financial Statements
    
    2Item 2.
    
    Trustee's Discussion and Analysis of Financial Condition and Results of Operations
    
    4Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    6Item 4.
    
    Controls and Procedures
    
    6Part II. Other InformationItem 1.
    
    Legal Proceedings
    
    7Item 2.
    
    Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities
    
    7Item 3.
    
    Defaults Upon Senior Securities
    
    7Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    7Item 5.
    
    Other Information
    
    7Item 6.
    
    Exhibits and Reports on Form 8-K
    
    7Signature
    
    8
 1




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PART I  FINANCIAL INFORMATION Item 1. Financial Statements. KIEWIT ROYALTY TRUST
STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS
unaudited as of March 31, 2004 and audited as of December 31, 2003 March 31, 2004
    
    December 31, 2003(unaudited)ASSETSCash equivalents
    
    $
    1,508,247
    
    
    $
    148,662Trust reserves
    
    
    783,317
    
    
    
    783,317Royalty and overriding royalty
interests in coal leases
    
    
    167,817
    
    
    
    167,817Less accumulated amortization
    
    
    (142,346
    )
    
    
    (141,592
    )Net royalty and overriding royalty
interests in coal leases
    
    
    25,471
    
    
    
    26,225Total Assets
    
    $
    2,317,035
    
    
    $
    958,204LIABILITIES AND TRUST CORPUSDistributions payable to unit holders
    
    $
    1,508,247
    
    
    $
    148,662Trust reserves payable
    
    
    783,317
    
    
    
    783,317Trust corpus: 12,633,432 units of
beneficial interest authorized and
outstanding
    
    
    25,471
    
    
    
    26,225Total Liabilities and Trust Corpus
    
    $
    2,317,035
    
    
    $
    958,204
 The accompanying notes are an integral part
of the financial statements. 2




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KIEWIT ROYALTY TRUST
STATEMENTS OF DISTRIBUTABLE INCOME
(unaudited ) Three Months Ended March 312004
    
    2003Royalty income
    
    $
    1,521,771
    
    
    $
    1,381,149Interest income
    
    
    4,279
    
    
    
    4,993Trust expenses
    
    
    (17,803
    )
    
    
    (27,487
    )Distributable income
    
    $
    1,508,247
    
    
    $
    1,358,655Distributable income per unit
    
    $
    0.1193854
    
    
    $
    0.1075444
 STATEMENTS OF CHANGES IN TRUST CORPUS
(unaudited) Three Months Ended March 312004
    
    2003Trust corpus as of January 1
    
    $
    26,225
    
    
    $
    30,317Amortization of royalty interests
    
    
    (754
    )
    
    
    (622
    )Distributable income
    
    
    1,508,247
    
    
    
    1,358,655Distributions to unit holders
    
    
    (1,508,247
    )
    
    
    (1,358,655
    )Trust corpus as of March 31
    
    $
    25,471
    
    
    $
    29,695
 The accompanying notes are an integral part
of the financial statements. 3




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KIEWIT ROYALTY TRUST
NOTES TO FINANCIAL STATEMENTS
as of March 31, 2004 and December 31, 2003 Basis of Presentation The accompanying 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 accounting principles generally accepted
in the United States of America 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, 2003. Summary of Significant Accounting Policies (a) Basis of Accounting: The accompanying unaudited financial statements have been prepared on the following basis:  (1)
    
    Royalty income is recorded on a cash receipt basis.(2)
    
    Trust administration expenses are recorded in the month in which they are paid.(3)
    
    Amortization of the net royalty and overriding royalty interests, which is
calculated on a units-of-production basis, is charged directly to trust corpus
since such amount does not affect distributable income.(4)
    
    Distributions to Unit Holders are recognized when declared by the Trustee. The preparation of financial statements requires estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could differ from those estimates. While these statements differ from financial statements prepared in accordance with accounting principles generally accepted in the
United States of America, the cash basis of reporting revenues is considered to be the most meaningful because Quarterly
Distributions to Unit Holders are based on net cash receipts. (b) Cash Equivalents: The Trust considers all highly liquid financial instruments with original maturities of three
months or less when purchased to be cash equivalents. Item 2. Trustees Discussion and Analysis of Financial Condition and Results of Operations. a. Material Changes in Financial Condition. 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 (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 three months ended March 31, 2004, the Trust received a total
of $1,521,771 of royalty and overriding royalty payments. The following
schedule reflects the royalty and overriding royalty payments received by the
Trust in respect of leases at the following mines: Three Months Ended March 31Mine
    
    2004
    
    2003Decker
    
    $
    1,521,771
    
    
    $
    1,381,149Big Horn
    
    
    
    
    
    
    Spring Creek
    
    
    
    
    
    
    Totals:
    
    $
    1,521,771
    
    
    $
    1,381,149
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i. Decker Mine. Royalty and overriding royalty amounts received by the Trust from the
Decker Mine increased to $1,521,771 during the first three months of 2004 as
compared to $1,381,149 received during the same period in 2003. 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. ii. Big Horn Mine. No royalties were received from the Big Horn Mine during the first three
months of 2004 or 2003. The Big Horn Mine reached the end of its production
cycle and it is foreseen that the Trust will receive no further payments
deriving from coal production from the Big Horn Mine. iii. Spring Creek Mine. No royalties were received from the Spring Creek Mine during the first
three months of 2004 and 2003 because royalties with respect to this mine are
typically paid by the mine operators on an annual basis during the second half
of the calendar year. iv. Trust Expenses. Trust expenses decreased to $17,803 in the first three months of 2004, as
compared to $27,487 for the same period in 2003. This decrease was due
principally to a decrease in audit and legal fees paid during this period. v. Trust Reserve. On June 29, 2001, the Trustee received notification from the operator of
the Spring Creek Mine initially alleging overpayments aggregating approximately
$476,000 related to the Trusts overriding royalty interest that were remitted
during the period from 1996 to 2000. Accordingly, the $783,317 royalty payment
received from the Spring Creek Mine on July 31, 2001 is being held in reserve
in connection with this matter. In April 2003, the Trust filed a complaint in
federal district court seeking a declaratory judgment and accounting against
Spring Creek Coal Company, the operator of the Spring Creek Mine, in connection
with this matter. On October 28, 2003, the Spring Creek Coal Company filed an
answer and a counterclaim to the Trusts complaint alleging that the Trust does
not own an overriding royalty interest in certain portions of lands encompassed
by Lease M-069782 at Spring Creek Mine. The Spring Creek Coal Company seeks the
return of $790,776 in allegedly mistaken payments made by it to the Trust under
such lease. There can be no assurance as to the outcome of this litigation or
whether it will have a material adverse effect on the Trusts results of
operations or financial condition. For a more detailed discussion of the legal
action instituted by the Trust, see Legal Proceedings. c. Critical Accounting Policies and Estimates. The Trusts financial statements reflect the selection and application of
accounting policies that require the Trust to make significant estimates and
assumptions. The following are some of the more critical judgment areas in the
application of accounting polices that currently affect the Trusts financial
condition and results of operations:  
    
    Royalty income and interest income are recognized in the month in which
amounts are received by the Trust.
    
    Trust expenses, consisting principally of routine general and
administrative costs, include payments made during the accounting period.
    
    Reserves for liabilities that are contingent or uncertain in amount may
also be established if considered necessary.
    
    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.
    
    Distributions to Unit Holders are recognized when declared by the
Trustee. The financial statements of the Trust differ from financial statements prepared
in conformity with accounting principles generally accepted in the United
States of America because of the following:  
    
    Royalty income is recognized in the month received rather than in the month of production.
    
    Expenses 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 accounting principles generally accepted in the United
States of America. 5




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d. Forward-Looking Statements. This Form 10-Q includes forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, 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 Item 2. 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 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 most
recent Form 10-K affecting coal prices (including, without limitation, the
domestic and foreign supply of coal and the price of foreign imports, market
demand, the price and availability of alternative fuels and the effect of
governmental regulations) and recoverability of Tons Under Lease and Current
Economic Tons, general economic conditions, and other changes in the domestic
and international coal markets. Item 3. Quantitative and Qualitative Disclosures About Market Risk. Not Applicable. Item 4. Controls and Procedures. a. As of the end of the period covered by this Form 10-Q, the
Trustee of the Trust 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 Trustee concluded that the Trusts
disclosure controls and procedures are effective in timely alerting him 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. b. There was no significant change 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 has materially affected, or are reasonably likely to
materially affect, the Trusts internal control over financial reporting. 6




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PART II  OTHER INFORMATION. Item 1. Legal Proceedings. On June 29, 2001, the Trustee received notification from the operator of
the Spring Creek Mine initially alleging overpayments aggregating approximately
$476,000 related to the Trusts overriding royalty interest that were remitted
during the period from 1996 to 2000. Accordingly, the $783,317 royalty payment
received from the Spring Creek Mine on July 31, 2001 is being held in reserve
in connection with this matter. In April 2002, the Trust filed a complaint in Federal District Court for
the District of Montana, Billings Division, seeking a declaratory judgment and
accounting against Spring Creek Coal Company, the operator of the Spring Creek
Mine. The suit seeks adjudication of a reimbursement request to the Trust from
Spring Creek Coal Company and an accounting of all coal overriding royalties
that Spring Creek Coal Company should have paid to the Trust under certain
agreements between the parties. On October 28, 2003, the Spring Creek Coal
Company filed an answer and a counterclaim to the Trusts complaint alleging
that the Trust does not own an overriding royalty interest in certain portions
of land encompassed by Lease M-069782 at Spring Creek Mine. During the
discovery phase of the lawsuit, the Spring Creek Coal Company indicated that it
is seeking the return of $790,776 in allegedly mistaken payments made by it to
the Trust under such lease. There can be no assurance as to the outcome of the
litigation or whether it will have a material adverse effect on the Trusts
results of operations or financial condition. There are no other pending
material legal proceedings to which the Trust is a party or which any of its
property is the subject. Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities Not Applicable. Item 3. Defaults Upon Senior Securities. Not Applicable. Item 4. Submission of Matters to a Vote of Security Holders. Not Applicable. Item 5. Other Information. Not Applicable. 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 4.1 to the Trusts
Form 10-K filed with the Securities and Exchange Commission on March 28, 2003, and incorporated herein by reference).4.2
    
    Order 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, 2003, and incorporated herein by reference).31*
    
    Certification of Trust Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934.32*
    
    Certification of Trust Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
   *
    
    Filed herewith b. Reports on Form 8-K. No reports on Form 8-K were filed during the quarter for which this report
is filed. 7




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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 TRUSTBy: U.S. Bank National Association in its capacity as Trustee and not
in its individual capacity or otherwiseBy:
    
    /s/ Ted L. HallTed L. HallVice President and Trust Officer
 Dated: May 14, 2004 8