UNIT-BASED COMPENSATION

9 Months Ended

Sep. 30, 2024

UNIT-BASED COMPENSATION

UNIT-BASED COMPENSATION

NOTE 13—UNIT-BASED COMPENSATION

On May 1, 2024, the Board of Directors approved and adopted the first amendment to the Amended and Restated Kimbell Royalty GP, LLC 2017 Long-Term Incentive Plan (as so amended, the “A&R LTIP”), which increased the number of common units available to be awarded under the A&R LTIP by 4,684,622 common units, which increased the total number of common units available to be awarded under the A&R LTIP, after taking into account previously awarded

common units, to 6,765,012 common units. The Partnership’s A&R LTIP authorizes grants to its employees and directors. The restricted units issued under the Partnership’s A&R LTIP generally vest in one-third installments on each of the first three anniversaries of the grant date, subject to the grantee’s continuous service through the applicable vesting date. Compensation expense for such awards will be recognized over the term of the service period on a straight-line basis over the requisite service period for the entire award. Management elects not to estimate forfeiture rates and to account for forfeitures in compensation cost when they occur.

Distributions related to the restricted units are paid concurrently with the Partnership’s distributions for common units. The fair value of the Partnership’s restricted units issued under the A&R LTIP to the Partnership’s employees and directors is determined by utilizing the market value of the Partnership’s common units on the respective grant date.

The following table presents a summary of the Partnership’s unvested restricted units.

		Weighted		Weighted
		Average		Average
		Grant-Date		Remaining
		Fair Value		Contractual
	Units	per Unit		Term
Unvested at December 31, 2023	1,951,430	$	14.763	1.525 years
Awarded	1,087,502		15.710	—
Vested	(1,046,731)		13.913	—
Unvested at September 30, 2024 (1)	1,992,201	$	15.727	1.795 years

(1) As of September 30, 2024, there was $31.3 million of unrecognized compensation expense associated with unvested restricted units based on the weighted average grant date fair value per unit of $15.727.