KIEWIT ROYALTY TRUST

Decker Mine. Royalty and overriding royalty amounts received by the Trust from the Decker Mine during the first three months of 2021, decreased significantly by $503,476, or 84%, to $97,261 as compared to $600,737 received during the same period in 2020. The Decker Mine includes West Decker and East Decker Mine leases. Until 2021, when the Decker Mine announced cessation of mining activities, the primary producer currently was an East Decker Mine, which in recent years was the only lease actively producing. The changes this quarter resulted from fewer tons of coal produced due to the cession of mine operations.

Spring Creek Mine. No royalties were received from the Spring Creek Mine during the first three months of 2021 and 2020 because historically, royalties with respect to this mine typically were paid by the mine operators on an annual basis during the second half of the calendar year. 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. 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. Since the transition to NTEC, the Mine shut down briefly and has continued to have operational issues which are unrelated to the COVID-19 pandemic. These operational issues, together with general economic issues impacting coal mines, are challenging and make it difficult for the Trust to predict the long-term status of the operations of this mine. The Trust intends to continue monitoring the new ownership by NTEC.

Interest Income. During the three months ended March 31, 2021 and March 31, 2020, the Trust earned a nominal amount of interest.

Trust Expenses. Trust expenses increased and were $42,446 in the first three months of 2021 as compared to $25,000 for the same period in 2020. Trust expenses generally include fees of the Trustee, accountants, attorneys, and other professionals that the Trustee employs in the administration of the Trust. The increase in expenses resulted from the timing of when invoices were received and paid as well as additional legal expenses to address the Decker Mine bankruptcy filing.

Trust Reserves. During the first quarter of 2021, the Trust's distributable income was $54,816. Historically, this amount would have been reserved to be paid within 10 days of June 30, which is the Trust's next distribution payment date. However, such amount will be held as a reserve. Because of the uncertainty of the Decker Mine, the Trust intends to temporarily suspend all distribution payments and instead reserve such amounts to cover future expenses. Due to the uncertainty with respect to timing or amount of future royalty payments, the Trust believes such suspension is in its best interests.

During the first quarter of 2020, the Trust's distributable income was $576,223 and was paid to Unit Holders in July 2020. The Trust currently pays biannual distributions within 10 days after June 30 and December 31 of each year to the extent funds are available.