UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION

                          Washington, D.C. 20549
                                 FORM 10-Q

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


For the quarterly period ended                   Commission file number
       September 30, 2001                               000-23943

                        PETER KIEWIT SONS', INC.
            (Exact name of registrant as specified in its charter)

         Delaware                                    91-1842817
   (State of Incorporation)                (I.R.S. Employer Identification No.)

      Kiewit Plaza, Omaha Nebraska                        68131
(Address of principal executive offices)                (Zip Code)


                             (402) 342-2052
            (Registrant's telephone number, including area code)

          Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes [X]
No [  ]

          The number of shares outstanding of each of the registrant's
classes of common stock as of November 13, 2001.

               Title of Class                  Shares Outstanding
      Common Stock, $0.01 par value                 31,594,285



________________________________________________________________________________

                         PETER KIEWIT SONS', INC.

                                   Index
                                                                            Page
________________________________________________________________________________

                           PART I - FINANCIAL INFORMATION
                           ------------------------------

Item 1.  Financial Statements.

  Consolidated Condensed Statements of Earnings for the three and nine
    months ended September 30, 2001 and 2000                                   1
  Consolidated Condensed Balance Sheets as of September 30, 2001 and
    December 30, 2000                                                          2
  Consolidated Condensed Statements of Cash Flows for the nine months ended
    September 30, 2001 and 2000                                                3
  Notes to Consolidated Condensed Financial Statements                         4

Item 2.  Management's discussion and Analysis of Financial Condition and
           Results of Operations                                              12

Item 3.  Quantitive and Qualitive Disclosure about Market Risk.               16

                                PART II - OTHER INFORMATION
                                ---------------------------

Item 1.  Legal Proceedings.                                                   16

Item 6.  Exhibits and Reports on Form 8-K.                                    16

         Signatures                                                           16

                                             i
________________________________________________________________________________

Item 1.  Financial Statements.

                             PETER KIEWIT SONS', INC.
                       Consolidated Condensed Statements of Earnings
                                     (unaudited)

                                      Three Months Ended       Nine Months Ended
                                        September 30,             September 30,
(dollars in millions,                 ------------------       -----------------
  except per share data)              2001          2000       2001        2000
                                      ----          ----       ----        ----

Revenue                              $1,004       $1,314      $2,944     $3,489
Cost of revenue                        (920)      (1,263)     (2,739)    (3,299)
                                      -----        -----       -----      -----
                                         84           51         205        190

General and administrative expenses     (46)         (39)       (138)      (127)
Gain on sale of operating assets          3            3          14         14
                                      -----        -----       -----      -----
Operating earnings                       41           15          81         77

Other income (expense):
   Investment income and equity earnings  1           (4)         10          6
   Interest expense                      (1)           -          (2)        (3)
   Gain on sale of partnership            -           45           -         45
   Other, net                             1            9           8         28
                                      -----        -----       -----      -----
                                          1           50          16         76
                                      -----        -----       -----      -----

Earnings before income taxes,
  minority interest and
  discontinued operations                42           65        97          153

Minority interest in net earnings
  of subsidiaries                         1            -         -            -

Provision for income taxes              (17)         (25)        (39)       (60)
                                      -----        -----       -----      -----

Earnings from continuing operations      26           40        58           93

Discontinued operations:
  Income from materials operations,
    net of income tax expense of
    $- and $5 and $- and $12              -            7         -           18
                                      -----        -----     -----        -----

Net earnings                         $   26       $   47    $   58       $  111
                                      =====        =====     =====        =====

Net earnings per share:

Continuing operations:
  Basic                              $  .84       $ 1.20    $ 1.93       $ 2.86
                                      =====        =====     =====        =====
  Diluted                            $  .81       $ 1.17    $ 1.86       $ 2.79
                                      =====        =====     =====        =====


Discontinued operations:
  Basic                              $    -       $  .22    $   -        $  .57
                                      =====        =====     =====        =====
  Diluted                            $    -       $  .21    $   -        $  .55
                                      =====        =====     =====        =====

Net earnings:
  Basic                              $  .84       $ 1.42    $ 1.93       $ 3.43
                                      =====        =====     =====        =====
  Diluted                            $  .81       $ 1.38    $ 1.86       $ 3.34
                                      =====        =====     =====        =====

See accompanying notes to consolidated condensed financial statements.

                                           1
________________________________________________________________________________


                                PETER KIEWIT SONS', INC.

                        Consolidated Condensed Balance Sheets

                                                    September 30,   December 30,
                                                        2001              2000
(dollars in millions)                               (unaudited)
________________________________________________________________________________
Assets

Current assets:
Cash and cash equivalents                              $  259           $  302
Marketable securities                                       4                5
Receivables, less allowance of $4 and $4                  580              463
Unbilled contract revenue                                 142               97
Contract costs in excess of related revenue                43               58
Investment in construction joint ventures                 154              138
Deferred income taxes                                      71               60
Other                                                      13               10
                                                        -----            -----
Total current assets                                    1,266            1,133

Property, plant and equipment, less accumulated
  depreciation and amortization of $439 and $424          265              188
Other assets                                              127               96
Deferred income taxes                                       -                9
                                                        -----            -----
                                                       $1,658           $1,426
                                                        =====            =====

Liabilities and redeemable common stock

Current liabilities:
Accounts payable, including retainage of $65 and $56   $  232           $  223
Current portion of long-term debt                           1                1
Accrued costs on construction contracts                   266              133
Billings in excess of related costs and earnings          187              145
Accrued insurance costs                                    73               64
Accrued payroll                                            27               34
Other                                                      23               22
                                                        -----            -----
Total current liabilities                                 809              622

Long-term debt, less current portion                       21               12
Other liabilities                                          80               82
Deferred income taxes                                       5                -
Minority interest                                          14               14
                                                        -----            -----
Total liabilities                                         929              730
                                                        -----            -----
Preferred stock, no par value, 250,000 shares
  authorized, no shares outstanding                         -                -
Redeemable common stock ($549 million
  aggregate redemption value):

Common stock, $0.01 par value; 125 million shares
  authorized 31,620,425 and 32,259,640 shares
  outstanding                                               -                -
Additional paid-in capital                                206              185
Accumulated other comprehensive income                    (10)              (7)
Retained earnings                                         533              518
                                                        -----            -----
Total redeemable common stock                             729              696
                                                        -----            -----

                                                       $1,658           $1,426
                                                        =====            =====

See accompanying notes to consolidated condensed financial statements.
                                         2
________________________________________________________________________________


                           PETER KIEWIT SONS', INC.

                 Consolidated Condensed Statements of Cash Flows
                                (unaudited)



                                                           Nine Months Ended
                                                              September 30,
                                                           -------------------
(dollars in millions)                                      2001         2000
------------------------------------------------------------------------------

Cash flows from operations:
  Net cash provided by operations                        $  121         $  161
                                                          -----          -----
Cash flows from investing activities:
  Proceeds from sales and maturities of
    marketable securities                                     4              9
  Purchases of marketable securities                          -             (2)
  Proceeds from sales of property, plant and equipment       19             19
  Investments and acquisitions                              (56)          (175)
  Proceeds from sale of partnership                           -             86
  Capital expenditures                                      (94)           (78)
  Additions to notes receivable                              (2)            (4)
  Payments received on notes receivable                       2              1
                                                          -----          -----
    Net cash used in investing activities                  (127)          (144)
                                                          -----          -----
Cash flows from financing activities:
  Long-term debt payments                                    (6)            (3)
  Issuance of common stock                                   37             32
  Repurchases of common stock                               (49)           (64)
  Dividends paid                                            (19)           (18)
  Cash distributed in connection with spin-off                -            (47)
                                                          -----          -----
    Net cash used in financing activities                   (37)          (100)
                                                          -----          -----
Net decrease in cash and cash equivalents                   (43)           (83)

Cash and cash equivalents at beginning of period            302            338
                                                          -----          -----

Cash and cash equivalents at end of period               $  259         $  255
                                                          =====          =====

Noncash investing activities:
  Issuance of debt for acquisition                       $   10         $    -
                                                          =====          =====

See accompanying notes to consolidated condensed financial statements.

                                           3
________________________________________________________________________________


                               PETER KIEWIT SONS', INC.

                   Notes to Consolidated Condensed Financial Statements

1.  Basis of Presentation:

The consolidated condensed balance sheet of Peter Kiewit Sons', Inc.
(the "Company") at December 30, 2000 has been condensed from the Company's
audited balance sheet as of that date.  All other financial statements
contained herein are unaudited and, in the opinion of management, contain all
adjustments (consisting only of normal recurring accruals) necessary for a
fair presentation of financial position and results of operations and cash
flows for the periods presented.  The Company's accounting policies and
certain other disclosures are set forth in the notes to the consolidated
financial statements contained in the Company's Annual Report on Form 10-K.

Receivables at September 30, 2001 and December 30, 2000 include
approximately $143 million and $116 million, respectively, of retainage on
uncompleted projects, the majority of which is expected to be collected
within one year.  Included in the retainage amounts are $35 million and $29
million, respectively, of securities which are being held by the owners of
various construction projects in lieu of retainage.  Also included in
accounts receivable are $1 million and $10 million, respectively, of
securities held by the owners which are now due as the contracts are
completed.  These securities are carried at fair value which is determined
based on quoted market prices for the securities on hand or for similar
investments.  Net unrealized holding gains and losses, if any, are reported
as a separate component of accumulated other comprehensive income, net of
tax.

The results of operations for the nine months ended September 30, 2001
are not necessarily indicative of the results to be expected for the full
year.

When appropriate, items within the consolidated condensed financial
statements have been reclassified in the previous periods to conform to
current year presentation.


2.  Discontinued Operations:

In accordance with Accounting Principles Board Opinion No. 30
"Reporting the Results of Operations - Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions" ("APB 30"), the consolidated condensed statement of
earnings of the Company for the three and nine months ended September 30,
2000 have been reclassified to reflect the spin-off of the Company's
materials business (the "Materials Business") that occurred on September 30,
2000.  Accordingly, the revenues, costs and expenses of the Materials
Business have been segregated in the Consolidated Condensed Statements of
Earnings.  The net operating results of the Materials Business have been
reported as "Discontinued Operations" in the accompanying consolidated
condensed financial statements.

Summarized financial information for the discontinued operations follows:

                                          4
________________________________________________________________________________


                                PETER KIEWIT SONS', INC.

              Notes to Consolidated Condensed Financial Statements - (Continued)


2.  Discontinued Operations (Continued):

                                      Three Months Ended       Nine Months Ended
                                         September 30,           September 30,
(dollars in millions)                         2000                    2000
--------------------------------------------------------------------------------

  Revenues                                  $  135                  $  360
                                             =====                   =====
  Income from discontinued operations
  (after applicable income taxes
    of $6 and $13)                          $    9                  $   20

  Loss on disposal of business*
    (after applicable income tax benefit of
    $1 million for the three and nine months
    ended September 30, 2000)                   (2)                     (2)
                                             -----                   -----
  Income from discontinued operations       $    7                  $   18
                                             =====                   =====

*The loss on disposal of the Materials Business for the three and nine months
ended September 30, 2000   reflects the costs directly associated with the
disposition.


3.  Investments and Acquisitions:

On January 3, 2000, the Company acquired 100% of the outstanding common stock
and related assets of Solano Concrete Co., Inc., a materials operation
operating in the Northern California area, for $31 million.  On August 4,
2000, the Company acquired substantially all of the assets of Fort Calhoun
Stone Company, a limestone quarry located in Washington County, Nebraska, for
$42 million.  During  the first nine months of 2000, the Company also acquired
the assets of various materials operations for $7 million.  Notes payable of $2
million were issued in connection with the purchases. This operation
was included with the spin-off of the Materials Business (Note 7).

On September 26, 2000, the Company acquired 100% of Walnut Creek Mining
Company ("Walnut Creek"), a lignite mining business located in Robertson
County, Texas, for $94 million.  The fair value of the identifiable assets
acquired and liabilities assumed was $110 million and $16 million,
respectively.  Identifiable intangibles assets related to this purchase will
be amortized over their useful life of 15 years.  No goodwill related to this
transaction was recorded.


                                            5
___________________________________________________________________________




                                PETER KIEWIT SONS', INC.

              Notes to Consolidated Condensed Financial Statements - (Continued)

3.  Investments and Acquisitions (Continued):

On July 31, 2001, a subsidiary of the Company merged with General
Construction Company ("GCC"), a marine construction business located in
Poulsbo, Washington, pursuant to which the Company acquired 100% of the
outstanding common stock of GCC for approximately $48 million, subject to
adjustment based upon the July 31, 2001 audited balance sheet of GCC.  The
merger occurred as part of the Company's plan to acquire additional
businesses.  The purchase price allocation will be finalized when additional
information becomes available.

The following unaudited, pro-forma financial information assumes the
Walnut Creek and GCC acquisitions occurred at the beginning of 2000.  These
results have been prepared for comparative purposes only and do not purport
to be indicative of what would have occurred had the acquisition been made at
the beginning of 2000, or the results which may occur in the future.

                                      Three Months Ended       Nine Months Ended
                                         September 30,           September 30,
                                       -----------------        ----------------
(dollars in millions)                 2001          2000        2001       2000

Revenue                              $1,020        $1,363      $3,013     $3,630
                                      =====         =====       =====      =====
Net earnings                         $   27        $   49      $   57     $  117
                                      =====         =====       =====      =====
Net earnings per share:
  Basic                              $  .87        $ 1.50      $ 1.90     $ 3.63
                                      =====         =====       =====      =====
  Diluted                            $  .84        $ 1.46      $ 1.83     $ 3.53
                                      =====         =====       =====      =====


On April 2, 2001, the Company invested $20 million in an investment
limited partnership.  The Company accounts for this investment using the
equity method.


4.  Earnings Per Share:

Basic earnings per share has been computed using the weighted average
number of shares outstanding during each period.  Diluted earnings per share
gives effect to convertible debentures considered to be dilutive common stock
equivalents.  The potentially dilutive convertible debentures are calculated
in accordance with the "if converted" method.  This method assumes that the
after-tax interest expense associated with the debentures is an addition to
income and the debentures are converted into equity with the resulting common
shares being aggregated with the weighted average shares outstanding.



                                             6
________________________________________________________________________________


                                PETER KIEWIT SONS', INC.

              Notes to Consolidated Condensed Financial Statements - (Continued)


4.  Earnings Per Share (Continued):

                                      Three Months Ended      Nine Months Ended
                                          September 30,         September 30,
                                      ------------------      -----------------
                                      2001          2000      2001         2000
                                      ------------------      -----------------

Earnings from continuing
  operations (in millions)           $    26     $    40     $    58    $    93

Earnings from discontinued operations      -           7           -         18
                                      ------      ------      ------     ------

Net earnings available to
  common stockholders                     26          47          58        111

Add:  Interest expense, net of tax
  effect, associated with convertible
  debentures                               *           *           *          *
                                      ------      ------      ------     ------
Net earnings for diluted shares      $    26     $    47     $    58    $   111
                                      ======     =======      ======     ======

Total number of weighted average
  shares outstanding used to
  compute  basic earnings per
  share (in thousands)                31,205      32,636      30,258     32,289

Additional dilutive shares assuming
  conversion of convertible debentures 1,364       1,016       1,366      1,023
                                      ------      ------      ------     ------
Total number of shares used to compute
  diluted earnings per share          32,569      33,652      31,624     33,312
                                      ======     =======      ======     ======

* Interest expense attributable to convertible debentures was less than $.5
  million

                                      Three Months Ended      Nine Months Ended
                                          September 30,          September 30,
                                      ------------------       ----------------
                                      2001          2000       2001        2000
-------------------------------------------------------------------------------
Continuing operations:
  Basic earnings per share          $   .84      $  1.20     $  1.93    $  2.86
                                     ======       ======      ======     ======
  Diluted earnings per share        $   .81      $  1.17     $  1.86    $  2.79
                                     ======       ======      ======     ======

Discontinued operations:
  Basic earnings per share          $     -      $   .22     $     -    $   .57
                                     ======       ======      ======     ======

  Diluted earnings per share        $     -      $   .21     $     -    $   .55
                                     ======       ======      ======     ======

Net earnings:

  Basic earnings per share          $   .84      $  1.42     $  1.93    $  3.43
                                     ======       ======      ======     ======

  Diluted earnings per share        $   .81      $  1.38     $  1.86    $  3.34
                                     ======       ======      ======     ======


                                              7
________________________________________________________________________________


                              PETER KIEWIT SONS', INC.

              Notes to Consolidated Condensed Financial Statements - (Continued)

5.  Comprehensive Income:

Comprehensive income includes net income, unrealized gains (losses) on
securities and foreign currency translation adjustments which are charged or
credited to the cumulative translation account within Redeemable Common
Stock.  Comprehensive income for the three and nine months ended
September 30, 2001 and 2000 was as follows:

                                      Three Months Ended      Nine Months Ended
                                        September 30,           September 30,
                                      ------------------       -----------------
(dollars in millions)                 2001          2000       2001        2000
                                      ------------------       -----------------

Net earnings                        $   26        $   47       $   58    $  111
Other comprehensive income, before tax:
  Foreign currency translation
    adjustments                         (3)           (2)          (4)        -
  Unrealized gains (losses) arising
    during period                        -            (1)           -        (5)
  Reclassification adjustments for
    (gains) losses included in net
    earnings                             -             9            -         9
  Income tax effect related to items
    of other comprehensive income        1            (2)           1        (1)
                                     -----         -----        -----     -----
Comprehensive income                $   24        $   51       $   55    $  114
                                     =====         =====        =====     =====

6.  Segment Data:

The Company primarily operates in the construction industry and
currently has one reportable operating segment.  The Company's other
operations consist of the lignite mining operation acquired on September 26,
2000.  The Construction segment performs services for a broad range of public
and private customers primarily in North America.  Construction services are
performed in the following construction markets:  transportation (including
highways, bridges, airports, railroads and mass transit), commercial
buildings, water supply, sewage and waste disposal, dams, mining, power,
telecommunication infrastructure, heating and cooling, and oil and gas.  As
described in Note 2, the Company has reclassified the results of operations
of its Materials Business as discontinued operations.  The Materials Business
was previously disclosed as a separate operating segment.  The following
segment data has been restated to exclude amounts related to the Materials
Business.

Intersegment sales are recorded at cost.  Operating earnings is
comprised of net sales less all identifiable operating expenses, allocated
general and administrative expenses, gain on sale of operating assets,
depreciation and amortization.  Investment income, interest expense and
income taxes have been excluded from segment operations.  The management fee
earned by the Company for mine management and related services to the coal
mining operations of Level 3 Communications, Inc. ("Level 3") is excluded
from the segment information that follows as it is included in other income
on the Statement of Earnings and not included in operating earnings.  Segment
asset information has not been presented as it is not reported to or reviewed
by the chief operating decision maker.

                                    Three Months Ended      Three Months Ended
                                    September 30, 2001      September 30, 2000
                                    ------------------      ------------------
(dollars in millions)             Construction    Other    Construction   Other
-------------------------------------------------------------------------------

Revenue - external customers         $  993      $   11      $1,314      $    -
                                      =====       =====       =====       =====

Operating earnings                   $   38      $    3      $   15      $    -
                                      =====       =====       =====       =====

                                                    8
________________________________________________________________________________


                               PETER KIEWIT SONS', INC.

           Notes to Consolidated Condensed Financial Statements - (Continued)


6.  Segment Data (Continued):

                                        Nine Months Ended     Nine Months Ended
                                       September 30, 2001    September 30, 2000
                                      -------------------   -------------------
(dollars in millions)                 Construction  Other   Construction  Other
-------------------------------------------------------------------------------

Revenue - external customers            $2,913     $   31      $3,489    $    -
                                         =====      =====       =====     =====

Operating earnings                      $   73     $    8      $   77    $    -
                                         =====      =====       =====     =====

During the quarters ended September 30, 2001 and 2000, the Company
earned 11.2% and 38.8%, respectively, of revenues from Level 3.  For the
first nine months of 2001, the Company earned 22.0% of revenues from Level 3,
as compared to 42.6% for the same period in 2000.


7.  Other Matters:

Materials Spin-Off:

On September 30, 2000, the Company distributed all of the 32,288,840 shares
of common stock of its former subsidiary, Kiewit Materials Company
("Materials"), it then held to stockholders of the Company in a Spin-off
(the "Materials Spin-off").  In the Materials Spin-off, each stockholder of
the Company received one share of Materials common stock ("Materials'
Stock") for each share of Common Stock they held on the record date for the
Materials Spin-off.  Prior to the Materials Spin-off, the Company also
completed a share exchange offer and debenture exchange offer, pursuant to
which holders of Common Stock and the Company's convertible debentures
collectively exchanged 1,081,226 shares of Common Stock and $13,095,000
principal amount of the Company's convertible debentures for:  (1) 4,055,029
shares of Materials' Stock; (2) $670,000 principal amount of Materials'
convertible debentures; and (3) $5,475,045 principal amount of the Company's
new reduced principal convertible debentures.  As a result of the Materials
Spin-off, the Company and Materials now operate as two separate independent
companies.

In connection with the Materials Spin-off, Materials and the Company
entered into various agreements including a Separation Agreement (the
"Materials Separation Agreement") and a Tax Sharing Agreement (the
"Materials Tax Sharing Agreement").

The Materials Separation Agreement provides for the allocation of
certain risks and responsibilities between Materials and the Company and for
cross-indemnifications that are intended to allocate financial
responsibility to the Company for liabilities arising out of the
construction business and to allocate to Materials liabilities arising out
of the Materials Businesses.

Under the Materials Tax Sharing Agreement, with respect to periods, or
portions thereof, ending on or before the  Materials Spin-off, Materials and
the Company generally will be responsible for paying the taxes relating to
such returns, including any subsequent adjustments resulting from the
redetermination of such tax liabilities by the applicable taxing
authorities, that are allocable to the Materials Business and construction
business, respectively.   The Materials Tax Sharing Agreement also provides
that Materials and the Company will indemnify the other from certain taxes
and expenses that would be assessed if the Materials Spin-off were
determined to be taxable, but solely to the extent that such determination
arose out of the breach by Materials or the Company, respectively, of
certain representations made to the Internal Revenue Service in connection
with the private letter ruling issued with respect to the Materials Spin-
off.

                                       9
________________________________________________________________________________


                              PETER KIEWIT SONS', INC.

           Notes to Consolidated Condensed Financial Statements - (Continued)


7.  Other Matters (Continued):

Disposition:

On September 27, 2000, the Company sold its interest in the Aker Gulf Marine
partnership for $86 million.  A gain of $45 million was recognized in the
Statement of Earnings.

Other:

On April 25, 2001, Bibb and Associates, Inc. ("Bibb"), a subsidiary of the
Company, was served with a complaint (the "Complaint") filed in the Circuit
Court of Jackson County, Missouri, in an action brought by Kansas City Power
& Light ("KCPL") with respect to a January 13, 1999 explosion at KCPL's
Hawthorn No. 5 power plant. The Complaint lists a total of 13 defendants, and
generally alleges as to Bibb, strict liability, negligence, professional
gross negligence, fraud, negligent misrepresentation and wrongful inducement
to contract. The Complaint also names the Company and alleges that the
Company is either the alter ego of Bibb or the successor to Bibb's liability.
The Complaint alleges damages in excess of $450 million, including property
damage, costs of replacement of power, and lost profits. The Company believes
that the factual allegations and legal claims asserted in the Complaint
against Bibb and the Company are without merit and intends to vigorously
defend them.

The Company is involved in various other lawsuits and claims incidental to
its business.  Management believes that any resulting liability should not
materially affect the Company's financial position, future results of
operations or future cash flows.


8.  Recent Accounting Pronouncements:

The Company adopted Statement of Financial Accounting Standards ("SFAS") No.
133, "Accounting for Derivative Instruments and Hedging Activities," which
establishes accounting and reporting standards for derivative instruments and
for hedging activities, effective January 1, 2001.  Adoption of this
statement did not materially affect the Company's financial statements as the
Company has no significant derivative instruments or hedging activities.

In July 2001, the Financial Accounting Standards Board ("FASB") issued
Statements of Financial Accounting Standards No. 141 (SFAS 141), "Business
Combinations", and No. 142 (SFAS 142), "Goodwill and Other Intangible
Assets".

SFAS 141 supersedes Accounting Principles Board Opinion No. 16 (APB 16),
"Business Combinations".  The most significant changes made by SFAS 141 are:
(1) requiring that the purchase method of accounting be used for all business
combinations initiated after September 30, 2001, (2) establishing specific
criteria for the recognition of intangible assets separately from goodwill,
and (3) requiring unallocated negative goodwill to be written off immediately
as an extraordinary gain (instead of being deferred and amortized).

SFAS 142 supersedes APB 17, "Intangible Assets".  SFAS 142 primarily
addresses the accounting for goodwill and intangible assets subsequent to
their acquisition (i.e., the post-acquisition accounting).  The provisions of
SFAS 142 will be effective for fiscal years beginning after December 15,
2001.  The most significant changes made by SFAS 142 are: (1) goodwill and
indefinite-lived intangible assets will no longer be amortized, (2) goodwill
will be tested for impairment at least annually at the reporting unit level,
(3) intangible assets deemed to have an indefinite life will be tested for
impairment at least annually, and (4) the amortization period of intangible
assets with finite lives will no longer be limited to forty years.

                                      10
______________________________________________________________________________


                             PETER KIEWIT SONS', INC.

            Notes to Consolidated Condensed Financial Statements - (Continued)

8.  Recent Accounting Pronouncements (Continued):

The Company has not yet determined the effect SFAS No. 141 and 142 will have
on its consolidated financial position or results of operations.

In June 2001, the FASB issued SFAS No. 143 (SFAS 143), "Accounting for Asset
Retirement Obligations".  SFAS 143 applies to legal obligations associated
with the retirement of long-lived assets that result from the acquisition,
construction, development of normal operation of a long-lived asset.  The
provisions of SFAS 143 will be effective for fiscal years beginning after
June 15, 2002.  Under SFAS 143:  (1) retirement obligations, measured at fair
value, will be recognized when they are incurred and displayed as
liabilities, and (2) the associated asset retirement costs will be
capitalized as part of the carrying amount of the long-lived asset and
subsequently allocated to expense over the asset's useful life.

The Company has not yet determined the effect SFAS No. 143 will have on
its consolidated financial position or results of operations.

In August 2001, the FASB issued SFAS No. 144 (SFAS 144), "Accounting
for the Impairment or Disposal of Long-Lived Assets" which supersedes both
FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-lived Assets to be Disposed Of" and the accounting and reporting
provisions of APB Opinion No. 30 (Opinion 30), "Reporting the Results of
Operations - Reporting the Effects of Disposal of a Segment of a Business,
and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions", for the disposal of a segment of a business (as previously
defined in that Opinion).  SFAS 144 retains the fundamental provisions in
SFAS 121 for recognizing and measuring impairment losses on long-lived assets
held for use and long-lived assets to be disposed of by sale, while also
resolving significant implementation issues associated with SFAS 121.  For
example, SFAS 144 provides guidance on how a long-lived asset that is used as
part of a group should be evaluated for impairment, establishes criteria for
when a long-lived asset is held for sale, and prescribes the accounting for a
long-lived asset that will be disposed of other than by sale.  SFAS 144
retains the basic provisions of Opinion 30 on how to present discontinued
operations in the income statement but broadens that presentation to include
a component of an entity (rather than a segment of a business).  Unlike SFAS
121, an impairment assessment under SFAS 144 will never result in a write-
down of goodwill.  Rather, goodwill is evaluated for impairment under SFAS
No. 142, "Goodwill and Other Intangible Assets".

The Company is required to adopt SFAS 144 no later than the year
beginning after December 15, 2001.  Management does not expect the adoption
of SFAS 144 to have a material impact on the Company's financial statements.

                                             11
_______________________________________________________________________________


Item 2.    Management's Discussion and Analysis of Financial Condition and
Results of Operations.

          This document contains forward looking statements and information
that are based on the beliefs of management as well as assumptions made by
and information currently available to the Company.  When used in this
document, the words "anticipate," "believe," "estimate," "expect" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements.  Such statements reflect the current
views of the Company with respect to future events and are subject to certain
risks or uncertainties and assumptions.  Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in this document.

          On September 30, 2000, the Company effected a spin-off of its
Materials Business to its stockholders.  As described in Note 2 of the
Consolidated Condensed Financial Statements, the Company has reclassified the
results of operations of its Materials Business as discontinued operations.
The following discussion is on a continuing operations basis.

        Results of Operations - Third Quarter 2001 vs. Third Quarter 2000

          Revenue.  Revenue for the third quarter of 2001 decreased $310
million or 23.6% from the same time period in 2000.  The most significant
factor contributing to this decrease was the reduced work performed on a
large fiber optic project as the work on the project progressed towards
completion.

          Contract backlog increased to $4.5 billion at September 30, 2001
(of which 3.9% is attributable to foreign operations located in Canada) from
$3.3 billion at December 30, 2000.  Domestic projects are spread
geographically throughout the U.S.

          Margin.  Margins, as a percentage of revenue, for the third quarter
of 2001 increased to 8.4% compared to 3.9% for the same period in 2000.  The
difference is attributed to cost overruns on certain significant projects
during the third quarter 2000.  Margins may vary between periods due to the
inherent uncertainties associated with fixed price contracts, as well as
seasonality and the stage of completion of individual projects.

          General and Administrative Expenses.  General and administrative
expenses for the third quarter of 2001 increased $7 million to $46 million
when compared to the same period in 2000.  As a percentage of revenue,
general and administrative expenses increased from 3.0% in the third quarter
of 2000 to 4.6% in the same period in 2001.  The increase was attributed
primarily to increased costs associated with bidding new work in 2001.

          Gain on Sale of Operating Assets.  Net gains on the disposition of
property, plant and equipment and other assets remained the same for the
third quarter of 2001 when compared to the same period in 2000.

          Investment Income and Equity Earnings.  A $3 million investment
carried at cost was written off during the third quarter 2001.  During the
third quarter 2000, the Company determined that the decline in market value
of an investment security was other-than-temporary.  This investment was
written down to the current market value and a loss of $9 million was
recognized in the Statement of Earnings.  Prior to the write-down, this
investment had been carried at market value and the write-down had been
recorded as an unrealized loss as a separate component of other comprehensive
income.

         Other, net.   Other income is comprised primarily of mine management
fee income from Level 3.

          During the third quarter of 2001 and 2000, the Company managed two
and three active coal mines, respectively, for Level 3.  Fees for these
services for the third quarter 2001 were $1 million as compared to $8 million
for the same period in 2000.  The decrease is primarily due to a combination
of the expiration of a significant long-term contract in 2000 and the
Company's September 26, 2000 acquisition of Walnut Creek Mining Company, a
mine previously managed for Level 3.  The Company's fee is a percentage of
adjusted operating earnings of the coal mines, as defined in the mine
management agreement with Level 3.  The mines managed by the Company for
Level 3 earn the majority of their revenues under long-term contracts.  The
remainder of the mines' sales are made on the spot market where prices are
substantially lower than those of the long-term contracts.

                                       12
_______________________________________________________________________________

          Provision for income taxes.  The effective income tax rate during
the third quarter of 2001 and 2000 was 40%.  This rate differs from the
federal statutory rate of 35% primarily due to state income taxes.


             Results of Operations - Nine Months 2001 vs. Nine Months 2000

          Revenue.  Revenue for the first nine months of 2001 decreased $545
million or 15.6% from the same time period in 2000.  The most significant
factor contributing to this decrease was the reduced work performed on a
large fiber optic project as the work on the project progressed towards
completion.

          Margin.  Margins, as a percentage of revenue, for the first nine
months of 2001 increased to 7.0% compared to 5.4% for the same period in
2000.  The difference is attributed to cost overruns on certain significant
projects during the first nine months of 2000.  Margins may vary between
periods due to the inherent uncertainties associated with fixed price
contracts, as well as seasonality and the stage of completion of individual
projects.

          General and Administrative Expenses.  General and administrative
expenses for the first nine months of 2001 increased $11 million to $138
million when compared to the same period in 2000.  As a percentage of
revenue, general and administrative expenses increased from 3.6% in the first
nine months of 2000 to 4.7% in the same period in 2001.  The increase was
attributed primarily to increased costs associated with bidding new work in
2001.

          Gain on Sale of Operating Assets.  Net gains on the disposition of
property, plant and equipment and other assets remained the same for the
first nine months of 2001 when compared to the same period in 2000.

          Investment Income and Equity Earnings.  A $3 million investment
carried at cost was written off during the first nine months of 2001.  During
the third quarter 2000, the Company determined that the decline in market
value of an investment security was other-than-temporary.  This investment
was written down to the current market value and a loss of $9 million was
recognized in the Statement of Earnings.  Prior to the write-down, this
investment had been carried at market value and the write-down had been
recorded as an unrealized loss as a separate component of other comprehensive
income.

         Other, net.   Other income is comprised primarily of mine management
fee income from Level 3.

          During the first nine months of 2001 and 2000, the Company managed
two and three active coal mines, respectively, for Level 3.  Fees for these
services for the first nine months of 2001 were $4 million as compared to $24
million for the same period in 2000.  The decrease is primarily due to a
combination of the expiration of a significant long-term contract in 2000 and
the Company's September 26, 2000 acquisition of Walnut Creek Mining Company,
a mine previously managed for Level 3.  The Company's fee is a percentage of
adjusted operating earnings of the coal mines, as defined in the mine
management agreement with Level 3.  The mines managed by the Company for
Level 3 earn the majority of their revenues under long-term contracts.  The
remainder of the mines' sales are made on the spot market where prices are
substantially lower than those of the long-term contracts.

          Provision for income taxes.  The effective income tax rate during
the first nine months of 2001 and 2000 was 40%.  This rate differs from the
federal statutory rate of 35% primarily due to state income taxes.


                                             13
_______________________________________________________________________________



             Financial Condition - September 30, 2001 vs. December 30, 2000

          Cash and cash equivalents decreased $43 million to $259 million at
September 30, 2001 from $302 million at December 30, 2000.  The decrease
reflects net cash provided by operations of $121 million, net cash used in
investing activities of $127 million and $37 million used in financing
activities.

          Net cash provided by operating activities for the first nine months
of 2001 of $121 million represented a decrease of $40 million from the same
period in 2000.  The decrease was due to a net income decrease of $63 million
for the first nine months of 2001 compared to the same period in 2000 and
decreased working capital requirements for construction contracts.  Cash
provided or used by operating activities is affected to a large degree by the
mix, timing, stage of completion and terms of individual contracts which are
reflected in changes through current assets and liabilities.

          Net cash used in investing activities for the first nine months of
2001 decreased by $17 million to $127 million as compared to the same period
in 2000.  This decrease was due to decreases in investments and acquisitions
of $119 million, a decline in additions to notes receivable of $2 million, a
decrease in purchases of marketable securities of $2 million and an increase
in payments received on notes receivable of $1 million.  These changes were
partially offset by a decrease in proceeds from sales and maturities of
marketable securities of $5 million, decrease in proceeds from sale of
partnership and an increase in capital expenditures.

          Net cash used in financing activities for the first nine months of
2001 decreased by $63 million to $37 million as compared to the same time
period in 2000.  This decrease was due to an increase in issuance of common
stock of $5 million, a decrease in repurchases of common stock of $15 million
and a decrease in cash distributed in connection with spin-off.  These
changes were partially offset by an increase in long-term debt payments of $3
million and an increase in dividends paid of $1 million.

          The Company continues to explore opportunities to acquire
additional businesses and anticipates investing between $50 and $100 million
annually to expand its operations.  Other long-term liquidity uses include
the payment of income taxes and the payment of dividends.  As of September
30, 2001, the Company had no material firm binding purchase commitments
related to its investments other than meeting the normal course of business
needs of its construction joint ventures.  The current portion of long-term
debt is $1 million.  The Company paid dividends during the first nine months
of 2001 and 2000 of $19 million and $18 million, respectively.  These amounts
were determined by the Board of Directors and were paid in January and May of
each such year.  The Company also has the commitment to repurchase stock at
any time during the year from shareholders.

          The Company does not believe that the spin-off of its Materials
Business has had and does not expect it to have an adverse impact on its
liquidity or material commitments, since earnings generated from the
Materials Business had historically been reinvested in the Materials
Business.  The Company's current financial condition, together with
anticipated cash flows from operations, should be sufficient for immediate
cash requirements and future investing activities.  The Company does not
presently have any committed bank credit facilities.  In the past, the
Company has been able to borrow on terms satisfactory to it.  The Company
believes that, to the extent necessary, it will likewise be able to borrow
funds on acceptable terms for the foreseeable future.


                                      14
_______________________________________________________________________________

         Recent Accounting Pronouncements.  The Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and
reporting standards for derivative instruments and for hedging activities,
effective January 1, 2001.  Adoption of this statement did not materially
affect the Company's financial statements as the Company has no significant
derivative instruments or hedging activities.

          In July 2001, the Financial Accounting Standards Board ("FASB")
issued Statements of Financial Accounting Standards No. 141 (SFAS 141),
"Business Combinations", and No. 142 (SFAS 142), "Goodwill and Other
Intangible Assets".

          SFAS 141 supersedes Accounting Principles Board Opinion No. 16 (APB
16), "Business Combinations".  The most significant changes made by SFAS 141
are: (1) requiring that the purchase method of accounting be used for all
business combinations initiated after September 30, 2001, (2) establishing
specific criteria for the recognition of intangible assets separately from
goodwill, and (3) requiring unallocated negative goodwill to be written off
immediately as an extraordinary gain (instead of being deferred and
amortized).

          SFAS 142 supersedes APB 17, "Intangible Assets".  SFAS 142
primarily addresses the accounting for goodwill and intangible assets
subsequent to their acquisition (i.e., the post-acquisition accounting).  The
provisions of SFAS 142 will be effective for fiscal years beginning after
December 15, 2001.  The most significant changes made by SFAS 142 are: (1)
goodwill and indefinite-lived intangible assets will no longer be amortized,
(2) goodwill will be tested for impairment at least annually at the reporting
unit level, (3) intangible assets deemed to have an indefinite life will be
tested for impairment at least annually, and (4) the amortization period of
intangible assets with finite lives will no longer be limited to forty years.

          The Company has not yet determined the effect SFAS No. 141 and 142
will have on its consolidated financial position or results of operations.

          In June 2001, the FASB issued SFAS No. 143 (SFAS 143), "Accounting
for Asset Retirement Obligations".  SFAS 143 applies to legal obligations
associated with the retirement of long-lived assets that result from the
acquisition, construction, development of normal operation of a long-lived
asset.  The provisions of SFAS 143 will be effective for fiscal years
beginning after June 15, 2002.  Under SFAS 143:  (1) retirement obligations,
measured at fair value, will be recognized when they are incurred and
displayed as liabilities, and (2) the associated asset retirement costs will
be capitalized as part of the carrying amount of the long-lived asset and
subsequently allocated to expense over the asset's useful life.

          The Company has not yet determined the effect SFAS No. 143 will
have on its consolidated financial position or results of operations.

         In August 2001, the FASB issued SFAS No. 144 (SFAS 144), "Accounting
for the Impairment or Disposal of Long-Lived Assets" which supersedes both
FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-lived Assets to be Disposed Of" and the accounting and reporting
provisions of APB Opinion No. 30 (Opinion 30), "Reporting the Results of
Operations - Reporting the Effects of Disposal of a Segment of a Business,
and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions", for the disposal of a segment of a business (as previously
defined in that Opinion).  SFAS 144 retains the fundamental provisions in
SFAS 121 for recognizing and measuring impairment losses on long-lived assets
held for use and long-lived assets to be disposed of by sale, while also
resolving significant implementation issues associated with SFAS 121.  For
example, SFAS 144 provides guidance on how a long-lived asset that is used as
part of a group should be evaluated for impairment, establishes criteria for
when a long-lived asset is held for sale, and prescribes the accounting for a
long-lived asset that will be disposed of other than by sale.  SFAS 144
retains the basic provisions of Opinion 30 on how to present discontinued
operations in the income statement but broadens that presentation to include
a component of an entity (rather than a segment of a business).  Unlike SFAS
121, an impairment asset under SFAS 144 will never result in a write-down of
goodwill.  Rather, goodwill is evaluated for impairment under SFAS No. 142,
"Goodwill and Other Intangible Assets".

          The Company is required to adopt SFAS 144 no later than the year
beginning after December 15, 2001.  Management does not expect the adoption
of SFAS 144 to have a material impact on the Company's financial statements.

                                           15
_______________________________________________________________________________



Item 3.    Quantitative and Qualitative Disclosure about Market Risk.

          The Company does not believe that its business is subject to
significant market risks arising from interest rates, foreign exchange rates
or equity prices.



                              PART II - OTHER INFORMATION

Item 1.    Legal Proceedings.

          In its Quarterly Report on Form 10-Q for the quarter ended
March 31, 2001, the Company disclosed the filing by Kansas City Power & Light
Company ("KCPL") in the Circuit Court of Jackson County, Missouri, of an
action against the Company and its subsidiary, Bibb and Associates, Inc.,
relating to a January 13, 1999 explosion at KCPL's Hawthorn No. 5 power
plant. On October 18, 2001, the Company filed a motion to dismiss the action
for lack of personal jurisdiction.

          The Company believes that the factual allegations and legal claims
asserted against Bibb and the Company by KCPL are without merit and intends
to vigorously defend them.



Item 6.    Exhibits and Reports on Form 8-K.

     (a)    Exhibits required by Item 601 of Regulation S-K.

     None.

     (b)    Reports on Form 8-K.

     Current Report on Form 8-K dated October 10, 2001 with respect to the
Company's change of principal independent auditors, which Report was filed
with the Securities and Exchange Commission on October 12, 2001.


SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.







Date:  November 13, 2001                            PETER KIEWIT SONS', INC.





                                                    /s/  Michael J. Piechoski
                                                   ----------------------------
                                                       Michael J. Piechoski
                                                        Vice President and
                                                    Principal Financial Officer


                                         16
_______________________________________________________________________________