##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2002

Commission file number 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)  |  |                                     

Trust Division
U.S. Bank National Association
1700 Farnam StreetOmaha, Nebraska 68102(Address of principal executive offices)

(402) 348-6000
(Registrants telephone number, including area code)

|                                                            |  |                             
|----------------------------------------------------------- |  | ----------------------------
|Securities registered pursuant to Section 12(b) of the Act: |  | None                        
|                                                            |  |                             
|                                                            |  |                             
|Securities registered pursuant to Section 12(g) of the Act: |  | Units of Beneficial Interest
|                                                            |  |                             
|                                                            |  | (Title of class)            

Indicate by check mark whether the registrant (1) has filed all reports
required 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 [  ].

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrants knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [x].

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2) Yes [  ] No [x].

There currently is no market for the Units of Beneficial Interest. As a
result, the aggregate market value of the Units of Beneficial Interest is not
available.

As of March 27, 2002, there were 12,633,432 Units of Beneficial Interest
held by non-affiliates of the registrant outstanding.





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##### 



TABLE OF CONTENTS

|                                                                                              |                                                   |  |      |    | 
|--------------------------------------------------------------------------------------------- | ------------------------------------------------- |  | ---- | -- | 
|                                                                                              |                                                   |  | Page
|                                                                                              |                                                   |  |     
|PART I                                                                                        |                                                   |  |      |   
|Item 1. Business                                                                              |                                                   |  | 1    |   
|                                                                                              | (a) General Development of Business               |  |      | 1  | 
|                                                                                              | (b) Financial Information about Industry Segments |  |      | 1  | 
|                                                                                              | (c) Narrative Description of Business             |  |      | 1  | 
|                                                                                              | (d) Financial Information about Geographic Areas  |  |      | 2  | 
|                                                                                              | (e) Available Information                         |  |      | 2  | 
|Item 2. Properties                                                                            |                                                   |  | 2    |   
|                                                                                              | (a) Producing Leases                              |  |      | 3  | 
|                                                                                              | (b) Non-Producing Leases                          |  |      | 6  | 
|Item 3. Legal Proceedings                                                                     |                                                   |  | 6    |   
|Item 4. Submission of Matters to a Vote of Security Holders                                   |                                                   |  | 6    |   
|PART II                                                                                       |                                                   |  |      |   
|Item 5. Market for Registrants Common Equity and Related
Stockholder Matters                 |                                                   |  | 7    |   
|                                                                                              | (a) Market Information                            |  |      | 7  | 
|                                                                                              | (b) Holders                                       |  |      | 7  | 
|                                                                                              | (c) Dividends                                     |  |      | 7  | 
|                                                                                              | (d) Recent Sales of Securities                    |  |      | 8  | 
|Item 6. Selected Financial Data                                                               |                                                   |  | 9    |   
|Item 7. Managements Discussion and Analysis of Financial Condition
and Results of Operations |                                                   |  | 9    |   
|                                                                                              | (a) Decker Mine                                   |  |      | 9  | 
|                                                                                              | (b) Black Butte Mine                              |  |      | 10 | 
|                                                                                              | (c) Spring Creek Mine                             |  |      | 10 | 
|                                                                                              | (d) Big Horn Mine                                 |  |      | 10 | 

i



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|                                                                                                        |                                                     |  |      |    | 
|------------------------------------------------------------------------------------------------------- | --------------------------------------------------- |  | ---- | -- | 
|                                                                                                        |                                                     |  | Page
|                                                                                                        |                                                     |  |     
|                                                                                                        | (e) Trust Expenses                                  |  |      | 10 | 
|                                                                                                        | (f) Trust Reserve                                   |  |      | 10 | 
|Item 7A. Quantitative and Qualitative Disclosures about Market Risks                                    |                                                     |  | 10   |   
|Item 8. Financial Statements and Supplementary Data                                                     |                                                     |  | 10   |   
|                                                                                                        | (a) Financial Statements                            |  |      | 10 | 
|                                                                                                        | (b) Supplementary Data                              |  |      | 18 | 
|Item 9. Changes in and Disagreements with Accountants On Accounting and
Financial Disclosure            |                                                     |  | 18   |   
|PART III                                                                                                |                                                     |  |      |   
|Item 10. Directors and Executive Officers of the Registrant                                             |                                                     |  | 19   |   
|Item 11. Executive Compensation                                                                         |                                                     |  | 19   |   
|Item 12.
Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters |                                                     |  | 19   |   
|                                                                                                        | (a) Security Ownership of Certain Beneficial Owners |  |      | 19 | 
|                                                                                                        | (b) Security Ownership of Management                |  |      | 19 | 
|                                                                                                        | (c) Changes in Control                              |  |      | 19 | 
|Item 13. Certain Relationships and Related Transactions                                                 |                                                     |  | 19   |   
|                                                                                                        | (a) Transactions with Management and Others         |  |      | 19 | 
|                                                                                                        | (b) Certain Business Relationships                  |  |      | 19 | 
|                                                                                                        | (c) Indebtedness of Management                      |  |      | 19 | 
|                                                                                                        | (d) Transactions with Promoters                     |  |      | 19 | 
|Item 14. Controls and Procedures                                                                        |                                                     |  | 20   |   
|PART IV                                                                                                 |                                                     |  |      |   
|Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K                               |                                                     |  | 20   |   
|                                                                                                        | (a) Financial Statements and Schedules              |  |      | 20 | 
|                                                                                                        | (b) Reports on Form 8-K                             |  |      | 20 | 
|                                                                                                        | (c) Exhibits                                        |  |      | 20 | 
|                                                                                                        | Signatures                                          |  |      | 21 | 
|                                                                                                        | Certification                                       |  |      | 22 | 

ii



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##### 



PART I

Item 1. BUSINESS.

(a)  GENERAL DEVELOPMENT OF BUSINESS. Kiewit Royalty Trust ( the Trust)
is a trust organized under the laws of the State of Nebraska. The Trust was
created under a Trust Indenture dated May 17, 1982, which subsequently was
amended on June 9, 1982, June 23, 1982, and by a court order dated September
23, 1994. A copy of the Trust Indenture is attached to this Form 10-K as an
exhibit, and is incorporated herein by reference. A copy of the Order of the
County Court of Douglas County, Nebraska, dated September 23, 1994, amending
the Trust Indenture is attached to this Form 10-K as an exhibit, and is
incorporated herein by reference.

The Trust was created by Level 3 Communications, Inc., a Delaware
corporation, formerly Peter Kiewit Sons, Inc. (hereinafter referred to as
Level 3). The Trust was organized to provide an efficient, orderly and
practical means for the administration of income received from certain royalty
and overriding royalty interests1 in certain coal leases. The royalty and
overriding royalty interests that the Trust owns were conveyed to the Trust by
Level 3 effective June 28, 1982, pursuant to conveyance documents that gave the
Trust legal title to the property interests conveyed. Ownership interests in
the Trust are represented by 12,633,432 units of beneficial interest
(hereinafter referred to as Units). On June 23, 1982, the Units were
distributed pro rata to holders of record on June 10, 1982 of Level 3s Class B
and Class C common stock. Such shareholders were citizens of the United States
of America.

The Trust has no active plan of business operation and is a purely
ministerial trust. The Trust Indenture currently provides that all available
income, after paying or making provisions for liabilities and obligations, is
to be distributed to holders of Units (hereinafter referred to as Unit
Holders) during the months of January, April, July, and October of each year.
The trustee of the Trust is U.S. Bank National Association, Omaha, Nebraska,
which is a wholly-owned subsidiary of U.S. Bancorp, a registered bank holding
company.

(b)  FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS. The Trust receives
its income from royalty and overriding royalty interests in certain coal
leases. The Trust does not operate in any other industry segment.

(c)  NARRATIVE DESCRIPTION OF BUSINESS. The Trust owns three (3) royalty
interests and sixteen (16) overriding royalty interests relating to leases in
four (4) coal mining areas in Montana and Wyoming. The royalty and overriding
royalty interests transferred to the Trust previously had been owned by various
wholly-owned Level 3 subsidiaries, and by Montana Royalty Company, Ltd., a
partnership among three wholly-owned Level 3 subsidiaries and Resource
Development Co., Inc., a Washington state corporation.

The Trust is administered by officers and employees of the Trustee, but
there are no specific persons employed by the Trustee having the full-time duty
of administering the Trust. Under the Trust Indenture, the basic function of
the Trustee is to collect income from the Trusts properties, to pay out of the
Trusts income and assets all expenses, charges, and obligations, and to pay
remaining cash to Unit Holders on a quarterly basis. The Trustee also is
obligated to make annual financial reports to Unit Holders, to file all
fiduciary income tax returns, and to prepare, execute, and deliver certificates
of beneficial interest to the Unit Holders. The Trustee is obligated, subject
to the terms of the Trust Indenture, to use its best judgment in good faith in
all matters relating to the Trust and Trust properties.



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|1 When the owner of mineral rights executes a lease entitling the lessee to
develop, mine, and sell the minerals, the lessee takes an operating interest
and the owner may retain a royalty interest. A royalty interest is a right
to receive a specified amount per ton or a specified portion of the value of
the total production of the property, free of the expense of development and
operation. An overriding royalty interest, which is similar to a royalty
interest, is sometimes retained by the lessee of the mineral rights upon the
lessees assignment of the lease. Payment of an overriding royalty is
generally subject to payment of the royalty.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





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##### 



The Trustee is authorized and required to use the money it receives to pay
all liabilities of the Trust, including but not limited to all services of the
Trustee, and the compensation of geologists, engineers, accountants, attorneys,
or professional experts that the Trustee may, in its discretion, employ in the
administration of the Trust. With respect to any liability that is contingent
or uncertain in amount or that otherwise is not currently due, the Trustee has
the discretion to establish cash reserves for the payment thereof.

All available net income of the Trust will be distributed pro rata on a
quarterly basis to Unit Holders. During any period between distributions to
Unit Holders, the Trustee may invest any cash being held as a reserve for
liabilities or for distribution in (i) time deposits of the bank of the
Trustee; (ii) any open-ended management type investment company or investment
trust registered pursuant to the Investment Company Act of 1940 (provided that
such investment matures on or before the next succeeding distribution date and
is held until maturity); or (iii) trust-quality fixed net asset money market
funds that have total assets of $100,000,000 or more and consist solely of
direct obligations of the U.S. Government and/or next-business day repurchase
agreements fully collateralized by direct obligations of the U.S. Government.

The Trust Indenture grants to the Trustee only such rights and powers as
are necessary to achieve the purposes of the Trust. The Trust Indenture
prohibits the Trustee from entering into or engaging in any business or
commercial activity of any kind or from using any portion of the assets of the
Trust to acquire any coal lease, royalty, or mineral interest. The Trustee may
sell Trust properties only as authorized by a vote of a majority-in-interest of
Unit Holders, except that the Trustee may sell Trust properties upon the
termination of the Trust without a vote of Unit Holders. Any sale of Trust
properties must be for cash, and the Trustee is obligated to distribute the
available net proceeds of any such sale pro rata to Unit Holders.

The Trust is irrevocable, but it may be terminated by (i) three successive
fiscal years in which net revenue is less than $1,000,000 per year; (ii) a vote
in favor of termination by a majority-in-interest of Unit Holders; or (iii)
operation of the provisions of the Trust Indenture intended to permit the Trust
to comply with the rule against perpetuities. Upon the termination of the
Trust, the Trustee will continue to act in such capacity until all assets of
the Trust are distributed. The Trustee will sell all Trust properties for cash
in one or more sales and, after satisfying all expenses, claims and liabilities
and establishing adequate reserves, if necessary, for the payment of contingent
liabilities, will distribute the remaining proceeds of such sales according to
the respective interests and rights of Unit Holders.

(d)  FINANCIAL INFORMATION ABOUT GEOGRAPHIC AREAS. During 2002, the Trust
received gross royalty income of $4,686,776. The royalty income was received
from sources exclusively located in the United States.

(e)  AVAILABLE INFORMATION. The Trust does not have an Internet website.
However, the Trust electronically files annual, quarterly and current reports
with the SEC. The SEC maintains a web site at http://www.sec.govthat contains
the Trusts SEC filings. The Trust will provide any Unit Holder with a paper
copy of the Trusts SEC filings free of charge upon request.

Item 2. PROPERTIES.

The Trusts properties consist of royalty and overriding royalty interests
in nineteen (19) coal leases in four (4) mining areas located in Montana and
Wyoming. All of these royalty and overriding royalty interests were
transferred to the Trust, as described in Item 1 above, by Level 3 and are
subject to the provisions of the coal lease agreements under which they were
created.

The royalty and overriding royalty interests transferred to the Trust
provide for the payment of either a specified amount per ton of coal produced,
or a fixed percentage of the value or price with respect to the coal produced
under the leases relating to these interests. The terms of these royalty and
overriding royalty interests

2



---



##### 



vary considerably, as does the acreage covered by the underlying coal
leases, the total Tons Under Lease on such leases, and the Current Economic Tons under such leases.

The term Tons Under Lease shall mean the estimated total tons of coal within
a legal description of property as evidenced by a lease to develop, between the
Trust and a lessee (that is, a producer).

The term Current Economic Tons shall mean the estimated total tons of coal
under lease, and appropriate grant of permit within a specific legal
description of property in which a profit can be made under the current
economic conditions by a producer. The economic conditions are based upon cost
of production and the sales price of coal.

The remaining periods of the underlying coal leases as of December 31, 2002,
including optional renewal periods, are such that, given the productive
capacity of the mines that are the subjects of the leases, the total Tons Under
Lease could be extracted. However, as reflected by the Current Economic Tons
recoverable under each lease, it does not appear that the total Tons Under
Lease will in fact be extracted. Also, total Tons Under Lease can be
further reduced by the refusal of a state and/or federal authority to grant a permit to
mine portions of the coal reserves within a specific property.
Inability to extract the total Tons Under Lease or inability to sell any portion of the coal
extracted could adversely affect the royalties payable to the Trust.

The following chart sets forth the actual total amount of coal production
(including production under leases in which the Trust has no royalty or
overriding royalty interests) of the four (4) mines to which the coal leases
pertain:

|                  |  |                       |            |      |  |      |            |      |  |      |            |  |  |  |            |  |  |  |            | 
|----------------- |  | --------------------- | ---------- | ---- |  | ---- | ---------- | ---- |  | ---- | ---------- |  |  |  | ---------- |  |  |  | ---------- | 
|                  |  | Tons of Coal Produced
|                  |  | 2002                  |            | 2001 |  | 2000 |            | 1999 |  | 1998
|                  |  |                       |            |      |  |      |            |      |  |     
|Decker Mine       |  |                       | 7,184,287  |      |  |      | 7,038,734  |      |  |      | 9,932,166  |  |  |  | 10,878,069 |  |  |  | 10,475,407 | 
|Black Butte Mine  |  |                       | - 0 -      |      |  |      | - 0 -      |      |  |      | 3,367,585  |  |  |  | 2,928,393  |  |  |  | 2,667,718  | 
|Big Horn Mine     |  |                       | - 0 -      |      |  |      | - 0 -      |      |  |      | 20,980     |  |  |  | 76,401     |  |  |  | 65,911     | 
|Spring Creek Mine |  |                       | 8,509,650  |      |  |      | 9,664,969  |      |  |      | 11,302,150 |  |  |  | 10,995,516 |  |  |  | 11,312,935 | 
|                  |  |                       |            |      |  |      |            |      |  |      |            |  |  |  |            |  |  |  |            | 
|Total             |  |                       | 15,693,937 |      |  |      | 16,703,703 |      |  |      | 24,622,881 |  |  |  | 24,878,379 |  |  |  | 24,521,971 | 
|                  |  |                       |            |      |  |      |            |      |  |      |            |  |  |  |            |  |  |  |            | 

Set forth below is a summary by mine area of pertinent information as of
December 31, 2002 about each of the producing leases in which the Trust has
either royalty or overriding royalty interests.

(a)  PRODUCING LEASES.

(i)  DECKER MINE. Decker Coal Company (Decker) operates this mine,
which is located in Big Horn County, Montana, approximately 20 miles north of
Sheridan, Wyoming. Decker is a joint venture between KCP Inc.2 (a wholly-owned
subsidiary of Level 3 Communications, Inc.) and Western Minerals, Inc. (a
wholly-owned subsidiary of NERCO, Inc.). Each company owns a fifty percent
(50%) interest in the joint venture. The Decker Mine in its entirety includes
approximately 18,118 acres and has an annual productive capacity of 12,000,000
tons.



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|2 KCP Inc. was formerly known as Kiewit Coal Properties Inc. This name change
occurred on March 25, 1998.
|---------------------------------------------------------------------------------------------------------

3



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##### 



The Trust owns overriding royalty
  interests in five (5) productive leases at the Decker Mine. The terms of
  the Trusts overriding royalty interests and the Tons Under Lease and Current
  Economic Tons of each lease are set forth in the table below, of which the accompanying
  notes are an integral part:

|          |       |               |  |                   |  |       |            |             |       |            |            |  |  |  |  | 
|--------- | ----- | ------------- |  | ----------------- |  | ----- | ---------- | ----------- | ----- | ---------- | ---------- |  |  |  |  | 
|          |       |               |  |                   |  |       |            |             |       |            |            | 
|          |       |               |  |                   |  |       |            |             |       |            |            | 
|          |       |               |  |                   |  |       | Terms of   |             | Tons  | Current   
|          |       |               |  |                   |  |       | Overriding |             | Under | Economic  
|Lease     |       | Lessor        |  | Royalties         |  | Lease | Tons      
|          |       |               |  |                   |  |       |            |            
|M-073093  |       | United States |  | 5 cents per ton3  |  |       | 84,594,000 |             |       | 1,025,000  |           
|M-061685  |       | United States |  | 10 cents per ton3 |  |       | 45,802,000 |             |       | 19,922,000 |           
|M-057934  |       | United States |  | 10 cents per ton3 |  |       | 7,927,000  |             |       | 7,461,000  |           
|C-1085-93 |       | Montana       |  | 10 cents per ton4 |  |       | 2,446,000  |             |       | 2,443,000  |           
|C-1087-95 |       | Montana       |  | 5 cents per ton4  |  |       | 7,420,000  |             |       | -0-        |           
|          |       |               |  |                   |  |       |            |             |       |            |            |  |  |  | 
|          | Total |               |  |                   |  |       |            | 148,189,000 |       |            | 30,851,000 | 

(ii)BLACK BUTTE
  MINE. Black Butte Coal Company (Black Butte) operates this mine
  in Sweetwater County, Wyoming, approximately 35 miles east of Rock Springs,
  Wyoming. Black Butte is a joint venture between KCP Inc. and Bitter Creek Coal
  Company (a wholly-owned subsidiary of Union Pacific Resources Group Inc.).
It is foreseen that the Trust will receive no further payments deriving from
coal production from the Black Butte Mine.





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|3 The Trust has an undivided one-half interest in a second overriding royalty
pertaining to this lease. By the terms of the assignment by which it was
created, this second overriding royalty, when added to all other overriding
royalties pertaining to the lease, may not exceed fifty percent (50%) of the
royalty payable to the lessor under the lease.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                              
|4 The Trust has an undivided one-half interest in a second overriding royalty
pertaining to this lease. By the terms of the assignment by which it was
created, this second overriding royalty, when added to all other overriding
royalties pertaining to the lease, may not exceed fifty percent (50%) of the
royalty payable to the lessor under the lease.

4



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##### 



(iii)  BIG HORN MINE. Big Horn Coal Company (Big Horn) has operated
this mine, which is located approximately 5 miles north of Sheridan, Wyoming,
in Sheridan County. Big Horn is a wholly-owned subsidiary of KCP Inc.
The Big Horn Mine has reached
  the end of its production cycle and it is foreseen that the Trust will receive
  no further payments deriving from coal production of the Big Horn Mine.

(iv)  SPRING CREEK MINE. Spring
  Creek Coal Company (Spring Creek) operates this mine, which is located
  in Big Horn County, Montana, approximately 25 miles north of Sheridan, Wyoming.
  Spring Creek is a subsidiary of NERCO, Inc. The Spring Creek Mine in its entirety
  includes approximately 2,560 acres and has an annual productive capacity of
  12,000,000 tons.

The Trust owns an overriding royalty
  interest in one productive lease at the Spring Creek Mine. The terms of the
  overriding royalty interest and the Tons Under Lease and Current Economic Tons
  of the lease are set out below:

|         |  |               |  |                    |  |            |            |       |          |            |  |  |  |  | 
|-------- |  | ------------- |  | ------------------ |  | ---------- | ---------- | ----- | -------- | ---------- |  |  |  |  | 
|         |  |               |  |                    |  |            |            |       |          |            | 
|         |  |               |  |                    |  |            |            |       |          |            | 
|         |  |               |  |                    |  | Terms of   |            | Tons  | Current 
|         |  |               |  |                    |  | Overriding |            | Under | Economic
|Lease    |  | Lessor        |  | Royalties          |  | Lease      | Tons      
|         |  |               |  |                    |  |            |           
|M-069782 |  | United States |  | 10 cents per tons5 |  |            | 83,409,000 |       |          | 83,409,000 | 



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|5 Under the terms of the lease,
      if the production royalty payable to the United States is increased, then
      the overriding royalty will be
|----------------------------------------------------------------------------------------------------------------------------------------------------

|recomputed to equal 10.75% of such production royalty.
|------------------------------------------------------

5



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##### 



(b)  NON-PRODUCING LEASES. In addition to its interests in these
productive leases, the Trust has overriding royalty interests in three (3)
leases from which no production is currently contemplated and in four (4) leases which are considered to be
not minable because of access, alluvial valley, or other problems.

Item 3. 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, 2002, 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. The Spring Creek Coal Company seeks the return
of $351,371 in allegedly mistaken payments made by it to the Trust under such
lease. A mandatory settlement conference between the parties has been
scheduled for June 10, 2003. 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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.



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6



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##### 



PART II

Item 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

(a)  MARKET INFORMATION. There is no established public trading market
for the Units. The Units have not been registered under the Securities Act of
1933 (1933 Act), nor have they been registered under the securities laws of
any state. Accordingly, resales of the Units are subject to certain
restrictions on transferability.

Under the 1933 Act, the Units should be treated as restricted
securities. As such, resales of the Units are subject to certain restrictions
on transferability under the federal securities laws. Unit Holders should
consult with their own counsel regarding their ability to sell their Units.
However, under the Securities and Exchange Commissions Rule 144, a Unit Holder
who is not an affiliate 6 of the Trust and has held his or her Units since the
creation of the Trust should be able to sell such Units without restriction.
Any Unit Holder who has acquired his or her Units since the creation of the
Trust should likewise be able to sell such Units without restriction so long as
at least two years have elapsed since such Units were owned by any affiliate of
the Trust. In this regard, it should also be noted that sales of the Units
might be made without compliance with Rule 144 pursuant to the less definite
standards of the so-called Section 4 (1-1/2) exemption from the registration
requirements of the 1933 Act.

None of the Units is subject to outstanding options or warrants to
purchase, and no securities are convertible into Units. Under the terms of the
Trust Indenture, the Trust may not issue additional Units.

(b)  HOLDERS. The Units are the only class of security issued by the
Trust. The table below sets forth the approximate number of Unit Holders of
record on March 27, 2003:

|                             |  |                 |     | 
|---------------------------- |  | --------------- | --- | 
|                             |  | Approximate    
|                             |  | Number         
|Title of Class               |  | of Unit Holders
|                             |  |                
|Units of Beneficial
Interest |  |                 | 830 | 

(c)  DIVIDENDS. The Trust pays no dividends since it is not a
corporation. Within ten (10) business days after the end of each calendar
quarter, however, the Trustee will distribute the Quarterly Distribution Amount
(as defined below) for the three preceding months, together with any
undistributed interest earned on each such amount to the payment date. This
distribution is made pro rata to Unit Holders of record on the last business
day for each such quarter (the Quarterly Record Date).

The Quarterly Distribution Amount distributed to each Unit Holder is the
excess, if any, of (i) the cash received during such quarter that is
attributable to the royalties and overriding royalties held by the Trust, plus
any decrease in any cash reserve theretofore established by the Trustee for the
payment of liabilities of the Trust, plus any other cash receipts of the Trust
during such quarter other than interest earned on the Quarterly Distribution
Amount for any other quarter that is earned before the actual distribution for
the fiscal quarter that includes that other quarter, over (ii) the liabilities
of the Trust paid during such quarter plus the amount of any cash reserve
established or increased by the Trustee for the payment of any future or
contingent liabilities of the Trust.



---

|6 Under Rule 144(a)(i), an affiliate of the Trust would be any person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Trust.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

7



---



##### 



The table below shows the aggregate Quarterly Distribution Amounts
(including interest) for each quarter during 2002 and 2001 and shows the date
on which such amounts were distributed:

|                  |  |             |            |          |  |                      |           |  |  |   |          | 
|----------------- |  | ----------- | ---------- | -------- |  | -------------------- | --------- |  |  | - | -------- | 
|                  |  | 2002        |            |          |  |                      |           |  |  |  
|                  |  |             |            |          |  |                      |           |  |  |  
|                  |  |             |            |          |  | Distribution Amounts
|                  |  |             |            |          |  |                     
|                  |  | Date        |            |          |  |                      |           |  |  |  
|Quarter Ended     |  | Distributed |            | In Total |  | Per Unit            
|                  |  |             |            |          |  |                     
|March 31, 2002    |  |             | 04/08/2002 |          |  | $                    | 2,077,228 |  |  | $ | 0.164423 | 
|June 30, 2002     |  |             | 07/10/2002 |          |  |                      | 141,867   |  |  |   | 0.011229 | 
|Sept. 30, 2002    |  |             | 10/09/2002 |          |  |                      | 2,185,426 |  |  |   | 0.172988 | 
|Dec. 31, 2002     |  |             | 01/10/03   |          |  |                      | 189,610   |  |  |   | 0.015009 | 
|                  |  |             |            |          |  |                      |           |  |  |   |          | 
|Total Distributed |  |             |            |          |  | $                    | 4,594,131 |  |  | $ | 0.363649 | 
|                  |  |             |            |          |  |                      |           |  |  |   |          | 

|                  |  |             |          |          |  |                      |           |  |  |   |          | 
|----------------- |  | ----------- | -------- | -------- |  | -------------------- | --------- |  |  | - | -------- | 
|                  |  | 2001        |          |          |  |                      |           |  |  |  
|                  |  |             |          |          |  |                      |           |  |  |  
|                  |  |             |          |          |  | Distribution Amounts
|                  |  |             |          |          |  |                     
|                  |  | Date        |          |          |  |                      |           |  |  |  
|Quarter Ended     |  | Distributed |          | In Total |  | Per Unit            
|                  |  |             |          |          |  |                     
|March 31, 2001    |  |             | 04/09/01 |          |  | $                    | 1,683,135 |  |  | $ | 0.133229 | 
|June 30, 2001     |  |             | 07/10/01 |          |  |                      | 294,265   |  |  |   | 0.023293 | 
|Sept. 30, 2001    |  |             | 10/09/01 |          |  |                      | 1,214,377 |  |  |   | 0.096124 | 
|Dec. 31, 2001     |  |             | 01/11/02 |          |  |                      | 188,883   |  |  |   | 0.014951 | 
|                  |  |             |          |          |  |                      |           |  |  |   |          | 
|Total Distributed |  |             |          |          |  | $                    | 3,380,660 |  |  | $ | 0.267597 | 
|                  |  |             |          |          |  |                      |           |  |  |   |          | 

(d)  RECENT SALES OF SECURITIES.

None.

8



---



##### 



Item 6. SELECTED FINANCIAL DATA.

The table below sets forth selected financial data, drawn from the Trusts
audited financial statements, for each of the last five fiscal years.

|                                   |  |      |           |      |  |                          |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|---------------------------------- |  | ---- | --------- | ---- |  | ------------------------ | --------- | ---- |  | ---- | --------- | - |  | - | --------- | - |  | - | --------- | -
|                                   |  |      |           |      |  | Years Ended December 31, |           |      |  |      |           |   |  |  
|                                   |  |      |           |      |  |                          |           |      |  |      |           |   |  |  
|                                   |  | 2002 |           | 2001 |  | 2000                     |           | 1999 |  | 1998
|                                   |  |      |           |      |  |                          |           |      |  |     
|Royalty and                        |  | $    | 4,713,912 |      |  | $                        | 4,244,950 |      |  | $    | 5,219,007 |   |  | $ | 4,890,823 |   |  | $ | 5,846,421 |  
|Interest Income
Trust Expenses     |  |      | (119,781  | )    |  |                          | (80,973   | )    |  |      | (70,773   | ) |  |   | (58,546   | ) |  |   | (52,620   | )
|Trust Reserves                     |  |      |          |      |  |                          | (783,317  | )    |  |      |          |   |  |   |          |   |  |   |          |  
|                                   |  |      |           |      |  |                          |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|Distributable Income               |  | $    | 4,594,131 |      |  | $                        | 3,380,660 |      |  | $    | 5,148,234 |   |  | $ | 4,832,277 |   |  | $ | 5,793,801 |  
|                                   |  |      |           |      |  |                          |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|Distributable                      |  | $    | 0.363649  |      |  | $                        | 0.267597  |      |  | $    | 0.407509  |   |  | $ | 0.382499  |   |  | $ | 0.458609  |  
|                                   |  |      |           |      |  |                          |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|Income Per Unit
(12,633,432
units) |  |      |           |      |  |                          |           |      |  |      |           |   |  |   |           |   |  |   |           |  
|Total Assets                       |  | $    | 1,003,245 |      |  | $                        | 1,009,585 |      |  | $    | 214,019   |   |  | $ | 310,166   |   |  | $ | 232,351   |  
|                                   |  |      |           |      |  |                          |           |      |  |      |           |   |  |   |           |   |  |   |           |  

Item 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Distributable income (the total amount of net royalty and overriding
royalty payments received from the various mines, increased by the amount of
interest earned and any other amounts received by the Trust and decreased by
the amount of Trust Expenses and Trust Reserves) for 2002 was $4,594,131
compared to $3,380,660 for 2001 and compared to $5,148,234 for 2000. The
increase in distributable income in 2002 from 2001 was primarily due to an
overall increase in royalty and overriding royalty payments received from
income-producing mines as further discussed below.

The following schedule reflects the royalty and overriding royalty
payments received by the Trust in respect of leases at the following mines:

|             |  |      |           |      |  |      |           |  |  |   |           | 
|------------ |  | ---- | --------- | ---- |  | ---- | --------- |  |  | - | --------- | 
|Mine         |  | 2002 |           | 2001 |  | 2000
|             |  |      |           |      |  |     
|Decker       |  | $    | 3,885,811 |      |  | $    | 3,375,106 |  |  | $ | 3,911,495 | 
|Black Butte  |  |      | 0         |      |  |      | 0         |  |  |   | 0         | 
|Spring Creek |  |      | 850,965   |      |  |      | 833,317   |  |  |   | 1,120,604 | 
|Big Horn     |  |      | 0         |      |  |      | 1,440     |  |  |   | 125,730   | 
|             |  |      |           |      |  |      |           |  |  |   |           | 
|             |  | $    | 4,686,776 |      |  | $    | 4,209,863 |  |  | $ | 5,157,829 | 
|             |  |      |           |      |  |      |           |  |  |   |           | 

(a)  DECKER MINE. The amount of royalties and overriding royalties
received by the Trust with respect to the Decker Mine increased to $3,885,811
in 2002 from $3,375,106 in 2001. The amount of royalties and overriding
royalties received by the Trust with respect to the Decker Mine decreased to
$3,375,106 in 2001 from $3,911,495 in 2000. These changes were the net result
of changes in the relative amounts of coal mined under leases bearing high and
low overriding royalty rates per ton, which were a normal result of the
execution of a mining plan encompassing several coal leases bearing different
royalty rates.

9



---



##### 



(b)  BLACK BUTTE MINE. The amount of royalties and overriding royalties
received by the Trust from the Black Butte Mine are $0 for 2002, 2001 and 2000,
respectively, primarily because, under the current lease structure, as of March
31, 1996, lease number W-6266 had reached the cap on the amount of overriding
royalty payable to the Trust for this mine and because the production for lease
number O-27475 is zero.

(c)  SPRING CREEK MINE. The amount of royalties and overriding royalties
received by the Trust with respect to the Spring Creek increased to $850,965 in
2002 from $833,317 in 2001. This increase is due to increased coal production
under the Spring Creek Mine leases. The amount of royalties and overriding
royalties received by the Trust with respect to the Spring Creek Mine decreased
to $833,317 in 2001 from $1,120,604 in 2000. The decrease reflects decreased
production under the applicable lease.

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. For a more detailed discussion of this matter, see Legal Proceedings.

(d)  BIG HORN MINE. No royalties were received from the Big Horn Mine
during either 2002 or 2001. The Big Horn Mine has 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. However, the
Big Horn Mine will continue to receive minor rental payments until reclamation
of the mine is achieved. In the past, the amount of such rental payments was
included in the figure representing receipt of royalty and overriding royalty
payments. During 2002 and 2001, the Big Horn Mine received a rental payment of
$0 and $1,440, respectively. The amount of royalties and overriding royalties
received from the Big Horn Mine decreased to $0 in 2001 from $125,730 in 2000.
The decrease reflects decreased production under the applicable lease.

(e)  TRUST EXPENSES. Trust expenses increased to $119,781 in 2002,
compared to $80,973 in 2001 and compared to $70,773 in 2000. The increases are
primarily due to an increase in legal and accounting expenses as well as
certain administrative expenses.

(f)  TRUST RESERVE. As discussed above, the $783,317 royalty payment
received from Spring Creek Mine on July 31, 2001 is being held in a reserve
account in connection with alleged overpayments from 1996 to 2000 by Spring
Creek Mine to the Trust. For a more detailed discussion of this legal matter,
see Legal Proceedings.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS.

Not applicable.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

(a)  FINANCIAL STATEMENTS. The following documents are filed as part of
the Trusts financial statements for the period from January 1, 2002 to
December 31, 2002:

|    |  |                                                                             
|--- |  | ----------------------------------------------------------------------------
|(1) |  | Independent Auditors Report and Report of Independent Accountants          
|(2) |  | Statements of Assets, Liabilities and Trust Corpus                          
|(3) |  | Statements of Distributable Income and Statements of Changes in Trust Corpus
|(4) |  | Notes to Financial Statements                                               

10



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##### 



INDEPENDENT AUDITORS REPORT

The Trustee and Unit Holders
Kiewit Royalty Trust:

We have audited the accompanying statements of assets, liabilities and
trust corpus of Kiewit Royalty Trust as of December 31, 2002 and 2001, and the
related statements of distributable income and changes in trust corpus for the
years then ended. These financial statements are the responsibility of the
Trustee. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by the Trustee, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

As described in Note 1 to the financial statements, the financial
statements have been prepared on the basis of cash receipts and disbursements
as prescribed by the Securities and Exchange Commission, which is a
comprehensive basis of accounting other than accounting principles generally
accepted in the United States of America.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the assets, liabilities and trust corpus of Kiewit
Royalty Trust as of December 31, 2002 and 2001, and the distributable income
and changes in trust corpus for the years then ended, in conformity with the
basis of accounting described in Note 1 to the financial statements.

/s/ KPMG LLP

Omaha, Nebraska
March 24, 2003

11



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##### 



Report of Independent Accountants

To the Trustee and Unit Holders
Kiewit Royalty Trust

We have audited the accompanying statement of distributable income and changes in trust corpus of
Kiewit Royalty Trust for the year ended December 31, 2000. These financial statements are the responsibility
of the Trustee. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States
of America. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.

As described in Note 1, these financial statements were prepared on the basis of cash receipts and disbursements,
which is a comprehensive basis of accounting other than generally accepted accounting principles in the United States of America.

In our opinion, the financial statements referred to above present fairly, in all material respects,
the distributable income and changes in trust corpus of Kiewit Royalty Trust for the year ended
December 31, 2000 in conformity with the basis of accounting described in Note 1 to the financial statements.

Omaha, Nebraska
March 22, 2001

12



---



##### 



KIEWIT ROYALTY TRUST
STATEMENTS OF ASSETS, LIABILITIES AND TRUST CORPUS
December 31, 2002 and 20001

|                                                                                 |                                    |                                                             |         |           |        |   |         |           |        | 
|-------------------------------------------------------------------------------- | ---------------------------------- | ----------------------------------------------------------- | ------- | --------- | ------ | - | ------- | --------- | ------ | 
|ASSETS                                                                           |                                    | 2002                                                        |         | 2001     
|                                                                                 |                                    |                                                             |         |          
|Cash equivalents                                                                 |                                    | $                                                           | 189,611 |           |        | $ | 188,882 |          
|Trust reserves                                                                   |                                    |                                                             | 783,317 |           |        |   | 783,317 |          
|Royalty and overriding royalty
interests in coal lease                           |                                    |                                                             | 167,817 |           |        |   | 167,817 |          
|                                                                                 | Less accumulated amortization      |                                                             |         | (137,500  | )      |   |         | (130,431  | )     
|                                                                                 |                                    |                                                             |         |           |        |   |         |          
|                                                                                 |                                    | Net royalty and overriding royalty
interests in coal leases |         |           | 30,317 |   |         |           | 37,386 | 
|                                                                                 |                                    |                                                             |         |           |        |   |         |          
|                                                                                 | Total Assets                       |                                                             | $       | 1,003,245 |        |   | $       | 1,009,585 |       
|                                                                                 |                                    |                                                             |         |           |        |   |         |          
|                                                                                 |                                    | LIABILITIES AND TRUST CORPUS                                |         |           |        |   |         |           |        | 
|Distributions payable to unit holders                                            |                                    | $                                                           | 189,611 |           |        | $ | 188,882 |          
|Trust reserves payable                                                           |                                    |                                                             | 783,317 |           |        |   | 783,317 |          
|Trust corpus: 12,633,432 units of beneficial
interest authorized and outstanding |                                    |                                                             | 30,317  |           |        |   | 37,386  |          
|                                                                                 |                                    |                                                             |         |           |        |   |         |          
|                                                                                 | Total Liabilities and Trust Corpus |                                                             | $       | 1,003,245 |        |   | $       | 1,009,585 |       
|                                                                                 |                                    |                                                             |         |           |        |   |         |          

The accompanying notes are an integral part
of the financial statements.

13



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##### 



KIEWIT ROYALTY TRUST
STATEMENTS OF DISTRIBUTABLE INCOME
for the three years ended December 31, 2002

|                              |  |      |           |      |  |      |           |   |  |   |           |  
|----------------------------- |  | ---- | --------- | ---- |  | ---- | --------- | - |  | - | --------- | -
|                              |  | 2002 |           | 2001 |  | 2000
|                              |  |      |           |      |  |     
|Royalty income                |  | $    | 4,686,776 |      |  | $    | 4,209,863 |   |  | $ | 5,157,829 |  
|Interest income               |  |      | 27,136    |      |  |      | 35,087    |   |  |   | 61,178    |  
|Trust expenses                |  |      | (119,781  | )    |  |      | (80,973   | ) |  |   | (70,773   | )
|Trust reserves                |  |      |          |      |  |      | (783,317  | ) |  |   |          |  
|                              |  |      |           |      |  |      |           |   |  |   |           |  
|Distributable income          |  | $    | 4,594,131 |      |  | $    | 3,380,660 |   |  | $ | 5,148,234 |  
|                              |  |      |           |      |  |      |           |   |  |   |           |  
|Distributable income
per unit |  | $    | 0.363649  |      |  | $    | 0.267597  |   |  | $ | 0.407509  |  
|                              |  |      |           |      |  |      |           |   |  |   |           |  

STATEMENTS OF CHANGES IN TRUST CORPUS
for the three years ended December 31, 2002

|                                  |  |      |            |      |  |      |            |   |  |   |            |  
|--------------------------------- |  | ---- | ---------- | ---- |  | ---- | ---------- | - |  | - | ---------- | -
|                                  |  | 2002 |            | 2001 |  | 2000
|                                  |  |      |            |      |  |     
|Trust corpus, beginning of
year   |  | $    | 37,386     |      |  | $    | 43,453     |   |  | $ | 56,642     |  
|Amortization of royalty
interests |  |      | (7,069     | )    |  |      | (6,067     | ) |  |   | (13,189    | )
|Distributable income              |  |      | 4,594,131  |      |  |      | 3,380,660  |   |  |   | 5,148,234  |  
|Distributions to unit holders     |  |      | (4,594,131 | )    |  |      | (3,380,660 | ) |  |   | (5,148,234 | )
|                                  |  |      |            |      |  |      |            |   |  |   |            |  
|Trust corpus, end of year         |  | $    | 30,317     |      |  | $    | 37,386     |   |  | $ | 43,453     |  
|                                  |  |      |            |      |  |      |            |   |  |   |            |  

The accompanying notes are an integral part
of the financial statements.

14



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##### 



KIEWIT ROYALTY TRUST
NOTES TO FINANCIAL STATEMENTS



|1. |  | Summary of Significant Accounting Policies and Basis of Accounting:
|-- |  | -------------------------------------------------------------------
|   |  |                                                                    
|   |  | (a)  Basis of Accounting:                                          



| |  | The financial statements of Kiewit Royalty Trust (the Trust) are 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) |  | Royalty reserves will be recognized upon settlement of litigation. See note 6.                                                                                                                                   



|   |  | 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 3 months or less when purchased to be cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|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 Level 3 Communications, Inc., formerly Peter
Kiewit Sons, Inc. (Level 3) as of June 10, 1982. Such shareholders were
citizens of the United States of America. These shareholders received one
Unit in the Trust for each share of Level 3 stock held. On June 28, 1982,
Level 3 conveyed to the Trust royalty and overriding royalty interests owned
by Level 3s subsidiaries in certain coal properties in Montana and Wyoming.

15



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##### 



KIEWIT ROYALTY TRUST
NOTES TO FINANCIAL STATEMENTS, CONTINUED



|2. |  | Trust Organization and Provisions, Continued:                                                                                   
|-- |  | --------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | U.S. Bank National Association is the Trustee for the Trust. 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 Units 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, April, July and October 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.



|3. |  | Royalty and Overriding Royalty Interests:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | The cash received by the Trustee from the royalty interest 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   |  | The initial carrying value of the royalty and overriding royalty interests in
coal leases of $167,817 represents Level 3s historical net book value at the
date of the transfer to the Trust.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|4. |  | Distributions to Unit Holders:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   |  | The amounts to be distributed to unit holders (Quarterly Distribution
Amount) are determined on a quarterly basis. The Quarterly Distribution
Amount is the excess of (i) the cash received during the quarter which is
attributable to royalties, plus any decrease in cash reserves, plus any other
cash receipts of the Trust during the quarter over (ii) the liabilities of
the Trust paid during the quarter, plus any increase in cash reserves. The
Quarterly Distribution Amount is payable to unit holders of record as of the
last business day of each calendar quarter. The cash distributions are made
quarterly within the first 10 business days of January, April, July and
October.

16



---



##### 



KIEWIT ROYALTY TRUST NOTES
TO FINANCIAL STATEMENTS, CONTINUED



|5. |  | Income Taxes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   |  | Provision for federal and state income taxes has not been made in the
financial statements since, in the opinion of legal counsel, the Trust should
be treated as a grantor trust which is not a taxable entity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|6. |  | Contingencies:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   |  | 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, 2002, 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. The Spring Creek Coal
Company seeks the return of $351,371 in allegedly mistaken payments made by
it to the Trust under such lease. A mandatory settlement conference between
the parties has been scheduled for June 10, 2003. 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.
|  
|7. |  | Summary of Quarterly Financial Data (Unaudited):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   |  | The following is a summary of the unaudited quarterly financial information:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

|                                      |                    |   |           |           |               |   |           |           |  |   |               |          | 
|------------------------------------- | ------------------ | - | --------- | --------- | ------------- | - | --------- | --------- |  | - | ------------- | -------- | 
|                                      |                    |   |           |           |               |   |           |           |  |   | Distributable
|                                      |                    |   | Royalty   |           | Distributable |   | Income   
|                                      |                    |   | Income    |           | Income        |   | Per Unit 
|                                      |                    |   |           |           |               |   |          
|For the year ended December 31, 2002: |                    |   |           |           |               |   |           |           |  |   |               |         
|                                      | March 31, 2002     |   | $         | 2,098,047 |               |   | $         | 2,077,227 |  |   | $             | 0.164423 | 
|                                      | June 30, 2002      |   |           | 178,528   |               |   |           | 141,867   |  |   |               | 0.011229 | 
|                                      | September 30, 2002 |   |           | 2,195,813 |               |   |           | 2,185,426 |  |   |               | 0.172988 | 
|                                      | December 31, 2002  |   |           | 214,388   |               |   |           | 189,611   |  |   |               | 0.015009 | 
|                                      |                    |   |           |           |               |   |           |           |  |   |               |         
|                                      |                    | $ | 4,686,776 |           |               | $ | 4,594,131 |           |  | $ | 0.363649      |         
|                                      |                    |   |           |           |               |   |           |           |  |   |               |         
|For the year ended December 31, 2001: |                    |   |           |           |               |   |           |           |  |   |               |         
|                                      | March 31, 2001     |   | $         | 1,688,481 |               |   | $         | 1,683,135 |  |   | $             | 0.133229 | 
|                                      | June 30, 2001      |   |           | 304,251   |               |   |           | 294,265   |  |   |               | 0.023293 | 
|                                      | September 30, 2001 |   |           | 2,012,101 |               |   |           | 1,214,377 |  |   |               | 0.096124 | 
|                                      | December 31, 2001  |   |           | 205,030   |               |   |           | 188,883   |  |   |               | 0.014951 | 
|                                      |                    |   |           |           |               |   |           |           |  |   |               |         
|                                      |                    | $ | 4,209,863 |           |               | $ | 3,380,660 |           |  | $ | 0.267597      |         
|                                      |                    |   |           |           |               |   |           |           |  |   |               |         

17



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##### 



(b)  SUPPLEMENTARY DATA. Not applicable.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

On September 25, 2001, the Trustee of the Trust, in accordance with the
Trust Indenture, approved a change in the Trusts independent accountants to
KPMG LLP, for the fiscal year ending December 31, 2001, and the dismissal of
PricewaterhouseCoopers LLP.

The report of PricewaterhouseCoopers LLP for the fiscal year ended
December 31, 2000 contained no adverse opinion, disclaimer of opinion or
qualification or modification as to uncertainty, audit scope or accounting
principles. In connection with its audit for the fiscal year ended December
31, 2000 and the interim period from January 1, 2001 through September 25,
2001, there were no disagreements between the Trust and PricewaterhouseCoopers
LLP on any accounting principles or practices, financial statement disclosure
or auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of PricewaterhouseCoopers LLP, would have caused it to make
reference to the subject matter of the disagreement in connection with its
reports on the financial statements for such year. No reportable event as
described in paragraph (a) (1) (v) of Item 304 of Regulation S-K has occurred
within the Trusts fiscal year ended December 31, 2000 or the period from
January 1, 2001 through September 25, 2001.

The Trust did not consult with KPMG LLP during the fiscal year ended
December 31, 2000 or during the interim period from January 1, 2001 through
September 25, 2001, on any matter which was the subject of any disagreement or
any reportable event as defined in Regulation S-K Item 304 (a) (1) (iv) and
Regulation S-K Item 304 (a) (1) (v), respectively, or on the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on the Trusts financial
statements, relating to which either a written report was provided to the Trust
or oral advice was provided that KPMG LLP concluded was an important factor
considered by the Trust in reaching a decision as to the accounting, auditing,
or financial reporting issue.

The Trust requested that PricewaterhouseCoopers LLP furnish a letter
addressed to the SEC stating whether or not PricewaterhouseCoopers LLP agrees
with the above statements. A copy of such letter to the SEC, dated September
25, 2001, was filed as an Exhibit 16.1 to a Form 8-K filed with the SEC on
October 2, 2001.

18



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##### 



PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The Trust was created as a trust under the laws of Nebraska and its
Indenture does not provide for the election of directors or officers. U.S.
Bank National Association serves as Trustee of the Trust.

Item 11. EXECUTIVE COMPENSATION.

As stated in Item 10 above, the Trust has no directors and no officers.

Item 12. SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER
MATTERS.

(a)  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. The following table
sets forth the only person who, as of March 27, 2003, was known by the Trust to
be a beneficial owner of more than five percent of the Units:

|                             |  |                                                     |  |               |  |            |      |  
|---------------------------- |  | --------------------------------------------------- |  | ------------- |  | ---------- | ---- | -
|                             |  | Name and                                            |  | Amount and    |  |            |      |  
|                             |  | Address of                                          |  | Nature of     |  |            |      |  
|Title of                     |  | Beneficial                                          |  | Beneficial    |  | Percent of
|Class                        |  | Owner                                               |  | Ownership     |  | Class     
|                             |  |                                                     |  |               |  |           
|Units of
Beneficial
Interest |  | Walter Scott, Jr.
1000 Kiewit Plaza
Omaha, NE 68131 |  | 800,000 Units |  |            | 6.33 | %

(b)  SECURITY OWNERSHIP OF MANAGEMENT. There are no executive officers or
directors of the Trust. As of March 27, 2003, U.S. Bank National Association,
Trustee of the Kiewit Trust, did not beneficially own any Units in the Trust.
However, the Trustee does hold in trust 800,000 Units for the benefit of Walter
Scott, Jr., as well as Units for certain other persons in connection with its
fiduciary relationship with such persons.

(c)  CHANGES IN CONTROL. As of December 31, 2002, the Trust had no
knowledge of any arrangements, the operation of which could, at a subsequent
date, result in a change of control of the Trust.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

(a)  TRANSACTIONS WITH MANAGEMENT AND OTHERS. As stated in Item 10, the
Trust has no directors and no officers. During 2002, there were no
transactions to which the Trust was a party and in which any persons known to
the Trust to be the beneficial owners of more than five percent of the Units
had a direct or indirect material interest.

(b)  CERTAIN BUSINESS RELATIONSHIPS. There are no directors or nominees
for director of the Trust. See Item 10.

(c)  INDEBTEDNESS OF MANAGEMENT. As stated in Item 10, the Trust has no
directors and no officers.

(d)  TRANSACTIONS WITH PROMOTERS. Not applicable.

19



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ITEM 14. CONTROLS AND PROCEDURES.

Not applicable.

PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

Documents incorporated by reference or filed with this report:



| | (a) |  | FINANCIAL STATEMENTS AND SCHEDULES. No financial statement
schedules are required to be filed by Items 8 and 14(d) because they
are not required or are not applicable, or the required information is
set forth in the applicable financial statements or notes thereto.
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | REPORTS ON FORM 8-K. No reports on Form 8-K were filed during
the period for which this report is filed.                                                                                                                                                                 
|
| | (c) |  | EXHIBITS. Exhibits required to be filed by Item 601 of Regulation S-K:                                                                                                                                                                                                   

Listed below are the exhibits which are filed as part of this report (according
to the number assigned to them in Item 601 of Regulation S-K):

|            |  |                                                                                                                                                                                                                                                        
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                            
|            |  |                                                                                                                                                                                                                                                        
|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, 2002, 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,
2002, and incorporated herein by reference).             
|            |  |                                                                                                                                                                                                                                                        
|99.1        |  | Location Map of Coal Properties (incorporated herein by
reference to Exhibit 2 to the Trusts Form 10-K filed with the
Securities and Exchange Commission on March 31, 1985, and
incorporated herein by reference).                                    
|            |  |                                                                                                                                                                                                                                                        
|99.2*       |  | Certification Pursuant to 18 U.S.C. 1350, As Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                        



---

|* |  | Filed herewith.
|- |  | ---------------

20



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##### 



S I G N A T U R E S

Pursuant to the requirements of Section 13 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.

| |     |  |                                                                                                                                            
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------
| | By: |  | KIEWIT ROYALTY TRUST (Registrant)
U.S. Bank National Association
in its capacity as Trustee and
not in its individual capacity or
otherwise

|                     |  |  |  |  |  |                     
|-------------------- |  |  |  |  |  | --------------------
|Date: April 15, 2003 |  |  |  |  |  | /s/ Susan K. Rosburg
|                     |  |  |  |  |  | By: Susan K. Rosburg
|                     |  |  |  |  |  | Trust Officer       

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

|                               |  |          |  |               
|------------------------------ |  | -------- |  | --------------
|Name                           |  | Capacity |  | Date          
|                               |  |          |  |               
|U.S. Bank National Association |  | Trustee  |  | April 15, 2003

| |     |  |                               
| | --- |  | ------------------------------
| | By: |  | /s/ Susan K. Rosburg          
| |     |  | Susan K. Rosburg
Trust Officer

21



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##### 



CERTIFICATION

I, Susan K. Rosburg, certify that:

1.     I have reviewed this annual report on Form 10-K of Kiewit Royalty
Trust, for which U.S. Bank National Association acts as Trustee;

2.     Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the periods covered by this annual
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, distributable income and changes in trust
corpus of the registrant as of, and for, the periods presented in this annual
report;

4.     I am responsible for establishing and maintaining disclosure controls
and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14), or for causing such procedures to be
established and maintained, for the registrant and I have:

a) designed such disclosure controls and procedures, or caused such
controls and procedures to be designed, to ensure that material information
relating to the registrant is made known to me by others within the registrant,
particularly during the period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the Evaluation Date); and

c) presented in this annual report my conclusions about the effectiveness
of the disclosure controls and procedures based on my evaluation as of the
Evaluation Date;

5.     I have disclosed, based on my most recent evaluation, to the
registrants auditors:

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves persons who have a
significant role in the registrants internal controls; and

6.     I have indicated in this annual report whether there were
significant changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of my most recent
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

In giving the certifications in paragraphs 4, 5 and 6 above, I have relied
to the extent I consider reasonable on information provided to me by Amber Brewster, Bank of Oklahoma.

Date: April 15, 2003

|    |  |                                                                                               
|--- |  | ----------------------------------------------------------------------------------------------
|By: |  | /s/ Susan K. Rosburg
Susan K. Rosburg
Trust Officer
U.S. Bank National Association, as Trustee

22