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                Commission file number
        December 30, 2000                           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)

        Securities registered pursuant to Section 12(b) of the Act:

                                    None

        Securities registered pursuant to Section 12(g) of the Act:

                       Common Stock, par value $0.01

     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 [  ]

     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]

     The registrant's stock is not publicly traded, and therefore, there is
 no ascertainable market value of voting stock held by non-affiliates.

     29,729,414 shares of the registrant's $0.01 par value Common Stock were
 issued and outstanding on March 16, 2001.

     Portions of the registrant's definitive proxy statement for its 2001
 Annual Meeting of Stockholders are incorporated by reference into Part III
 of this Form 10-K.



                                  TABLE OF CONTENTS
                                                                         Page
Part I
Item 1.     Business                                                        1
Item 2.     Properties                                                      3
Item 3.     Legal Proceedings                                               3
Item 4.     Submissions of Matters to a Vote of Security Holders            3
Item 4A.    Executive Officers of the Registrant                            4

Part II
Item 5.     Market for Registrant's Common Equity and Related Stockholder
            Matters                                                         5
Item 6.     Selected Financial Data                                         7
Item 7.     Management's Discussion and Analysis of Financial Condition
            and Results of Operations                                       8
Item 7A.    Quantitative and Qualitative Disclosures About Market Risk     11
Item 8.     Financial Statements and Supplementary Data                    12
Item 9.     Changes in and Disagreements with Accountants on Accounting
            and Financial Disclosure                                       40

Part III
Item 10.    Directors and Executive Officers of the Registrant             40
Item 11.    Executive Compensation                                         40
Item 12.    Security Ownership of Certain Beneficial Owners and Management 40
Item 13.    Certain Relationships and Related Transactions                 40

Part IV
Item 14.    Exhibits, Financial Statement Schedules, and Reports on
            Form 8-K                                                       40


                                      PART I

Item 1.     Business.

Forward Looking Statements.

     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 Peter Kiewit Sons', Inc., together with
 its subsidiaries ("PKS" or 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, 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.

General.

     The Company is one of the largest construction contractors in North
 America. The Company was incorporated in Delaware in 1997 to continue a
 construction business founded in Omaha, Nebraska in 1884.

     As described in Note 2 of the "Notes to the Consolidated Financial
 Statements", the Company spun-off its materials operations on September 30,
 2000.

Business.

     The Company conducts its business through various operating
subsidiaries. The Company and its joint ventures and partnerships perform
construction services for a broad range of public and private customers
primarily in the United States and Canada. New contract awards during 2000
were distributed among the following construction markets (approximately, by
number): power, heat, cooling -- 18.7%; transportation (including highways,
bridges, airports, railroads, and mass transit) -- 47.8%; commercial
buildings -- 14.8%; water supply/dams -- 10.2%; mining -- 3.0%; and other
markets -- 5.5%.

     The Company primarily performs its services as a general contractor. As
a general contractor, the Company is responsible for the overall direction
and management of construction projects and for completion of each contract
in accordance with its terms, plans, and specifications. The Company plans
and schedules the projects, procures materials, hires workers as needed, and
awards subcontracts. The Company generally requires performance and payment
bonds or other assurances of operational capability and financial capacity
from its subcontractors.

     Contract Types.

     The Company performs its construction work under various types of
 contracts, including fixed unit or lump-sum price, guaranteed maximum price,
 and cost-reimbursable contracts.  Contracts are either competitively bid and
 awarded or negotiated.  The Company's public contracts generally provide for
 the payment of a fixed price for the work performed. Profit on a fixed-price
 contract is realized on the difference between the contract price and the
 actual cost of construction, and the contractor bears the risk that it may
 not be able to perform all the work for the specified amount. Construction
 contracts generally provide for progress payments as work is completed, with
 a retainage, ranging from 0% to 10%, to be paid when performance is
 substantially complete.  In some instances, the Company is able to
 substitute bank letters of credit or escrowed securities in lieu of
 retainage.  Construction contracts frequently contain penalties or
 liquidated damages for late completion and infrequently provide bonuses for
 early completion.


     Government Contracts.

     Public contracts accounted for approximately 78% of the combined prices
 of contracts awarded to the Company during 2000.  Most of these contracts
 were awarded by government and quasi-government units under fixed price
 contracts after competitive bidding.  Most public contracts are subject to
 termination at the election of the government. In the event of termination,
 however, the contractor is entitled to receive the contract price on
 completed work and payment of termination-related costs.

     Competition.

     A contractor's competitive position is based primarily on its prices for
 construction services and its reputation for quality, timeliness,
 experience, and financial strength. The construction industry is highly
 competitive and lacks firms with dominant market power. In 2000, Engineering
 News Record, a construction trade publication, ranked the Company as the
 seventh largest United States contractor in terms of 1999 revenue. It ranked
 the Company first in the transportation market in terms of 1999 revenue.

     Demand.

     The volume and profitability of the Company's construction work depends
 to a significant extent upon the general state of the economies of the
 United States and Canada, and the volume of work available to contractors.
 Fluctuating demand cycles are typical of the industry, and such cycles
 determine to a large extent the degree of competition for available
 projects. The Company's construction operations could be adversely affected
 by labor stoppages or shortages, adverse weather conditions, shortages of
 supplies, or governmental action. The volume of available government work is
 affected by budgetary and political considerations. A significant decrease
 in the amount of new government contracts, for whatever reason, would have a
 material adverse effect on the Company.

     Backlog.

     At the end of 2000, the Company had backlog (anticipated revenue from
 uncompleted contracts) of approximately $3.3 billion, a decrease from
 approximately $4.0 billion at the end of 1999. Of current backlog,
 approximately $1 billion is not expected to be completed during 2001. In
 2000, the Company was low bidder on 195 jobs with total contract prices of
 approximately $2.6 billion, an average price of approximately $13.3 million
 per job.  There were 26 new projects with contract prices over $20 million,
 accounting for approximately 78% of the successful bid volume.

     Joint Ventures.

     The Company frequently enters into joint ventures to efficiently
 allocate expertise and resources among the venturers and to spread risks
 associated with particular projects. In most joint ventures, if one venturer
 is financially unable to bear its share of expenses, the other venturers may
 be required to pay those costs. The Company prefers to act as the sponsor of
 its joint ventures. The sponsor generally provides the project manager, the
 majority of venturer-provided personnel, and accounting and other
 administrative support services. The joint venture generally reimburses the
 sponsor for such personnel and services on a negotiated basis. The sponsor
 is generally allocated a majority of the venture's profits and losses and
 usually has a controlling vote in joint venture decision making. In 2000,
 the Company derived approximately 77% of its joint venture revenue from
 sponsored joint ventures and approximately 23% from non-sponsored joint
 ventures. The Company's share of joint venture revenue accounted for
 approximately 14% of its 2000 total revenue.

     Significant Customer.

     During 2000, revenue recognized from contracts with Level 3
Communications, Inc. ("Level 3") represented 39.8% of the Company's total
revenue.

     Locations.

     The Company has 22 principal operating offices located throughout North
 America, including its headquarters located in Omaha, Nebraska. Through its
 decentralized system of management, the Company has been able to quickly
 respond to changes in the local markets. At the end of 2000, the Company had
 current projects in 43 states, Puerto Rico, Washington, D.C. and 7 Canadian
 provinces.

     Financial information about geographic areas for the fiscal years ended
 December 30, 2000, December 25, 1999 and December 26, 1998 is included in
 Note 12 of the "Notes to the Consolidated Financial Statements".

Environmental Protection.

     Compliance with federal, state, and local provisions regulating the
 discharge of materials into the environment, or otherwise relating to the
 protection of the environment, has not and is not expected to have a
 material effect upon the capital expenditures, earnings, or competitive
 position of the Company.

Employees.

     At the end of 2000, the Company employed approximately 11,146 people.
  The Company considers relations with its employees to be good.

Item 2.     Properties.

     The Company's headquarters facilities are located in Omaha, Nebraska and
 are owned by the Company. The Company also has 21 principal district offices
 located in Arizona, California, Colorado, Georgia, Kansas, Massachusetts,
 Nebraska, New Jersey, Texas, Washington, Alberta and Quebec, 14 of which are
 located in owned facilities and 7 of which operate from leased facilities.
  The Company also has 22 area offices located in Alaska, California,
 Colorado, Florida, Hawaii, Illinois, Maryland, Nebraska, Nevada, New Mexico,
 New York, Pennsylvania, Rhode Island, Utah, British Columbia and Ontario, 2
 of which are owned facilities and 20 of which are leased facilities.  The
 Company owns or leases numerous shops, equipment yards, storage facilities,
 warehouses, and construction material quarries.  Since construction projects
 are inherently temporary and location-specific, the Company owns
 approximately 700 portable offices, shops and transport trailers. The
 Company has a large equipment fleet, including approximately 3,300 trucks,
 pickups and automobiles and 1,800 heavy construction vehicles, such as
 graders, scrapers, backhoes and cranes.  Joint ventures in which the Company
 is a participant also own approximately an additional 200 portable offices,
 shops and transport trailers, 400 trucks, pickups and automobiles and 500
 heavy construction vehicles.

Item 3.     Legal Proceedings.

     The Company is party to many pending legal proceedings incidental to the
 business of such entities. It is not believed that any resulting liabilities
 for legal proceedings, beyond amounts reserved, will materially affect the
 financial condition, future results of operation, or future cash flows of
 the Company.

Item 4.     Submission of Matters to a Vote of Security Holders.

     None during the three months ended December 30, 2000.

Item 4A.     Executive Officers of the Registrant.

     The table below shows information as of March 16, 2001, about each
 executive officer of the Company, including his business experience during
 the past five years. The Company's executive officers are elected annually
 to serve until their successors are elected and qualified or until their
 death, resignation or removal.

Name                  Business Experience                               Age
----                  -------------------                               ---

Gregory D. Brokke     Mr. Brokke has been the Controller of the          38
                      Company since June 2000.  Mr. Brokke was Assistant
                      Treasurer of the Company from August 1997 to June
                      2000.  Mr. Brokke was Audit Supervisor of Kiewit
                      Construction Group Inc., a subsidiary of the
                      Company, from December 1994 to June 1997.

John B. Chapman       Mr. Chapman has been Vice President of Human       55
                      Resources and Administration of the Company since
                      August 1997. Mr. Chapman was Vice President of
                      Human Resources for Kiewit Construction Group Inc.
                      for more than five years prior to August 1997.

Roy L. Cline          Mr. Cline has been a director and an Executive      63
                      Vice President of the Company since June 1999. Mr.
                      Cline was the President of Kiewit Industrial Co., a
                      subsidiary of the Company, from March 1992 until
                      June 1999. Mr. Cline is also a member of the
                      Executive Committee of the Company.

Richard W. Colf       Mr. Colf has been a director and an Executive       57
                      Vice President of the Company since July 1998.  Mr.
                      Colf has been an Executive Vice President of Kiewit
                      Pacific Co., a subsidiary of the Company, since
                      September 1998 and was a Senior Vice President of
                      Kiewit Pacific Co. from October 1995 to September
                      1998.  Mr. Colf is currently also a director of
                      Kiewit Materials Company.  Mr. Colf is also a member
                      of the Executive Committee of the Company.

Bruce E. Grewcock      Mr. Grewcock has been President of the Company     47
                      since December 2000. Mr. Grewcock has been a
                      director of the Company since July 1998 and was
                      an Executive Vice President of the Company from
                      August 1997 until December 2000. Mr. Grewcock has
                      been the President of Kiewit Western Co., a subsidiary
                      of the Company, since July 1997. Mr. Grewcock was an
                      Executive Vice President of Kiewit Construction Group
                      Inc. from July 1996 to June 1998, and President of
                      Kiewit Mining Group Inc. from January 1992 to July
                      1996.  Mr. Grewcock is currently also a director of
                      Kinross Gold Corporation and Kiewit Materials Company.
                      Mr. Grewcock is also a member of the Executive
                      Committee of the Company.

Allan K. Kirkwood     Mr. Kirkwood has been a director and an Executive  57
                      Vice President of the Company since July 1998.
                      Mr. Kirkwood has been an Executive Vice President
                      of Kiewit Pacific Co. since September 1998 and was
                      a Senior Vice President of Kiewit Pacific Co. from
                      October 1995 to September 1998. Mr. Kirkwood is also
                      a member of the Executive Committee and is the
                      Chairman of the Audit Committee of the Company.

Ben E. Muraskin       Mr. Muraskin has been a Vice President of the      37
                      Company since January 2000. Mr. Muraskin was a
                      partner of Alston & Bird LLP from January 1999 to
                      December 1999, and an associate at that firm from May
                      1992 to January 1999.

Gerald S. Pfeffer     Mr. Pfeffer has been a Vice President of the       55
                      Company since April 1998. Mr. Pfeffer was a Vice
                      President of Kiewit Construction Group Inc. from
                      December 1997 to June 1998. Mr. Pfeffer was Vice
                      President of Kiewit SR91 Corp. from January 1993 to
                      December 1997.

Michael J. Piechoski  Mr. Piechoski has been a Vice President and the    47
                      Treasurer of the Company since June 2000.  Mr.
                      Piechoski was Director of Audit of the Company from
                      April 1999 to June 2000.  Mr. Piechoski was Chief
                      Accounting Officer of United Metro Materials Inc.,
                      a former subsidiary of the Company, from December
                      1983 to March 1999.

Jerry C. Porter       Mr. Porter has been a Vice President of the        57
                      Company since May 2000.  Mr. Porter has been the
                      design/build manager for the Company since September
                      1999.  Mr. Porter was a construction design manager
                      for Kiewit Pacific Co. from September 1996 until
                      September 1999.  Mr. Porter was an engineering
                      manager and a construction manager for Kiewit SR91
                      Corp. from October 1993 until September 1996.

Tobin A. Schropp      Mr. Schropp has been a Vice President, General     38
                      Counsel and Secretary of the Company since
                      September 1998. Mr. Schropp was Director of Taxes
                      of the Company from March 1998 to September 1998.
                      Mr. Schropp was Director of Taxes of Level 3
                      Communications, Inc. from August 1996 to March
                      1998, and Director of Research, Planning and Audit
                      of Level 3 Communications, Inc. from September 1993
                      to August 1996.

Stephen A. Sharpe     Mr. Sharpe has been a Vice President of the        49
                      Company since August 1997. Mr. Sharpe was a Vice
                      President of Kiewit Construction Group Inc. from
                      October 1996 to June 1998. Mr. Sharpe was a Vice
                      President of U.S. Generating Company for more than
                      five years prior to October 1996.

Kenneth E. Stinson     Mr. Stinson has been Chairman and Chief           58
                       Executive Officer of the Company since March 1998.
                       Mr. Stinson was President of the Company from
                       August 1997 until December 2000. Mr. Stinson has
                       been the Chairman and Chief Executive Officer of
                       Kiewit Construction Group Inc. for more than the
                       last five years. Mr. Stinson was Executive Vice
                       President of Level 3 Communications, Inc. from
                       June 1991 to August 1997. Mr. Stinson is also
                       currently a director of ConAgra, Inc., Valmont
                       Industries, Inc., Kiewit Materials Company and
                       Level 3 Communications, Inc. Mr. Stinson is also
                       the Chairman of the Executive Committee of the
                       Company.


                                        PART II

Item 5.     Market for Registrant's Common Equity and Related Stockholder
            Matters.

Market Information.

     As of December 30, 2000, the Company's $0.01 par value common stock
 ("Common Stock") was not listed on any national securities exchange or the
 NASDAQ National Market and there is no established public trading market for
 the Common Stock.

Company Repurchase Obligation.

     Pursuant to the terms of the Company's Restated Certificate of
 Incorporation ("Certificate"), the Company is generally required to
 repurchase shares of Common Stock at a formula price upon demand. Common
 Stock can be issued only to employees of the Company and can be resold only
 to the Company at a formula price based on the year-end book value of the
 Company.

Formula Price.

     The formula price of the Common Stock is based on the book value of the
 Company. A significant element of the Common Stock formula price is the
 subtraction of the book value of property, plant, and equipment used in the
 Company's construction activities (approximately $111 million  at December
 30, 2000).

Restrictions.

     Ownership of Common Stock is generally restricted to active Company
 employees and conditioned upon the execution of repurchase agreements which
 restrict employees from transferring the Common Stock. Upon retirement,
 termination of employment, or death, Common Stock must be resold to the
 Company at the applicable formula price.

Stockholders.

     On March 16, 2001, the Company had the following numbers of stockholders
 and outstanding shares:

       Class of Stock              Stockholders           Outstanding Shares
       --------------              -------------           ------------------

        Common Stock                   1,377                   29,729,414

Dividends and Prices.

     The chart below sets forth the cash dividends declared or paid on the
 Common Stock during 1999 and 2000, and the formula price after each dividend
 payment, in each case adjusted retroactively to reflect a dividend of 3
 shares of Common Stock for each outstanding share of Common Stock effected
 on January 15, 1999.

<TABLE>
<S>
<C>                <C>             <C>        <C>               <C>
                                   Dividend
Dividend Declared  Dividend Paid   Per Share  Price Adjusted    Formula Price
-----------------  -------------   ---------  --------------    -------------

October 30, 1998   January 6, 1999   $0.225   December 27, 1998    $15.90
April 30, 1999     May 1, 1999       $0.25    May 1, 1999          $15.65
October 29, 1999   January 5, 2000   $0.27    December 26, 1999    $20.63
April 28, 2000     May 1, 2000       $0.28    May 1, 2000          $20.35
October 27, 2000   January 5, 2001   $0.30    December 30, 2000    $17.70 1
</TABLE>

     The Company's current dividend policy is to pay a regular dividend on
 Common Stock based on a percentage of the prior year's ordinary earnings,
 with any special dividends to be based on extraordinary earnings.





------------------------
1 On September 30, 2000, the Company distributed the shares of common stock
 of its subsidiary, Kiewit Materials Company, to holders of Common Stock in a
 distribution intended to be tax-free for U.S. Federal income tax purposes
 (see Note 16 of the "Notes to Consolidated financial Statements").


Item 6.     Selected Financial Data.

     The following table presents selected historical financial data of the
 Company as of and for the fiscal years ended 1996 through 2000, and is
 derived from the Company's historical consolidated financial statements and
 the notes to those financial statements.
<TABLE>
<S>
                                                  Fiscal Year Ended
                                     2000     1999     1998    1997      1996
                              (dollars in millions, except per share amounts)
<C>                                <C>       <C>      <C>     <C>      <C>
Results of Operations:
 Revenue                           $4,463    $3,586   $3,053  $2,474   $2,066
                                   ======    ======   ======  ======   ======

 Income from continuing operations $  161    $  137   $  118  $  136   $   92
 Income from discontinued operations   18        28       18      19       16
                                   ------    ------   ------  ------   ------

 Net earnings                      $  179    $  165   $  136  $  155   $  108
                                   ======    ======   ======  ======   ======

Per Common Share:
 Basic:
  Income from continuing operations$ 4.97   $ 4.00    $ 3.53  $ 3.52   $ 2.15
  Income from discontinued operations .57      .81       .54     .48      .38
                                   ------   ------    ------  ------   ------

  Net earnings                     $ 5.54   $ 4.81    $ 4.07  $ 4.00   $ 2.53
                                   ======   ======    ======  ======   ======

Diluted:
 Income from continuing operations $ 4.83   $ 3.91    $ 3.48  $ 3.38   $ 2.07
 Income from discontinued operations  .55      .80       .54     .46      .37
                                   ------   ------    ------  ------   ------

 Net earnings                      $ 5.38   $ 4.71    $ 4.02  $ 3.84   $ 2.44
                                   ======   ======    ======  ======   ======

 Dividends (1)                     $  .58   $  .52    $  .43  $  .38   $  .33
 Formula price (2)                 $17.70   $20.63    $15.90  $12.80   $10.18
 Book value                        $21.56   $24.01    $19.35  $16.10   $12.76

Financial Position:
 Total assets                      $1,426   $1,599    $1,379  $1,342   $1,039
 Current portion of
  long-term debt                   $    1   $    4    $    8  $    5   $    -
 Long-term debt, net of
  current portion                  $   12   $   18    $   13  $   22   $   12

 Redeemable Common Stock (3)       $  696   $  837    $  691  $  652   $  562
</TABLE>
-----------------------------------------------------------------------------

(1)     The 2000, 1999, 1998, 1997 and 1996 dividends include $.30, $.27,
 $.225, $.20 and $.175 for dividends declared in 2000, 1999, 1998, 1997 and
 1996 respectively, but paid in January of the subsequent year.

(2)     Pursuant to the Certificate, the formula price calculation is
 computed annually at the end of the fiscal year, except that adjustments to
 reflect dividends are made when declared.

(3)     Ownership of the Common Stock is restricted to certain employees
 conditioned upon the execution of repurchase agreements which restrict the
 employees from transferring the stock. The Company is generally required to
 purchase all Common Stock at the formula price. The aggregate redemption
 value of Common Stock at December 30, 2000 was $571 million.



Item 7.     Management's Discussion and Analysis of Financial Condition and
 Results of Operations

     On September 30, 2000, the Company effected a spin-off of its materials
 business ("Materials Business") to its stockholders.  As described in Note 2
 of the Consolidated 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 2000 vs. 1999

     Revenue. Revenue for the twelve months ended December 30, 2000 increased
 $877 million or 24% from the same time period in 1999.  The most significant
 factor contributing to this increase was a large fiber optic project where
 installation was being performed only in selected locations during 1999 as
 compared to nationwide installation being performed during the same period
 in 2000.

     Contract backlog at December 30, 2000 was nearly $3.3 billion, of which
 8.3% is attributable to foreign operations located primarily in Canada.
  Domestic projects are spread geographically throughout the U.S.

     Margin.  Margins, as a percentage of revenue, for the twelve months
 ended December 30, 2000, decreased to 7.3% compared to 8.8% for the same
 period in 1999.  Cost overruns on certain significant projects contributed
 to the decrease.  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.

     Gain on Sale of Operating Assets.   Net gains on the disposition of
 property, plant and equipment and other assets decreased to $17 million in
 the twelve months ended December 30, 2000, from $20 million in the same
 period in 1999.  The decrease is due to fewer sales of excess construction
 equipment.

     General and Administrative Expenses.  General and administrative
 expenses for the twelve months ended December 30, 2000, increased $29
 million to $170 million when compared to the same period in 1999.  The
 increase was attributed primarily to increased compensation of $18 million
 and increased travel costs of $6 million.  As a percentage of revenue,
 general and administrative expenses decreased from 3.9% in the twelve months
 ended 1999 to 3.8% in the same period in 2000 as a proportionate increase in
 administrative costs was not necessary to support the Company's revenue
 growth.

     Investment Income and Equity Earnings.  During the third quarter 2000
 and 1999, 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 losses of $9 million and $18 million,
 respectively, were recognized in the Statement of Earnings.  Prior to each
 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.  Subsequent changes in the market value of the
 security will be included as a separate component of comprehensive income.

     Gain on Sale of Partnership.  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 Consolidated Statement of Earnings.

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

     During the first nine months ended September 26, 2000 and for the twelve
 months ended December 25, 1999, the Company managed three active coal mines
 for Level 3.  On September 26, 2000, the Company acquired Walnut Creek
 Mining Company, a mine previously managed for Level 3.  Primarily, as a
 result of this acquisition, fees for these services decreased to $29 million
 for the twelve months ended December 30, 2000 as compared to $33 million for
 the same period in 1999.  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.  A significant long-term
 contract expired in 2000; consequently, adjusted operating earnings at the
 mines will decrease substantially, thereby decreasing the annual management
 fee earned by the Company to approximately $6 million in 2001.

     The U.S. Minerals Management Service has issued an assessment to the
 Level 3 mines for the underpayment of royalties.  Level 3 is vigorously
 contesting the  U.S. Minerals Management Service assessment.  If Level 3 is
 ultimately required to pay the U.S. Minerals Management Service assessment
 of approximately $20.2 million ($13.0 million of which is principal and $7.2
 million of which is interest) the payment would decrease future mine
 management fees in total by as much as $3.9 million, but will not affect
 fees previously received.

     Provision for Income Taxes.  The effective income tax rates for the
 twelve months ended December 30,  2000 and December 25, 1999 were 37.5% and
 37.6%, respectively.  These rates differ from the federal statutory rate of
 35% due primarily to state income taxes.

                        Results of Operations 1999 vs. 1998

     Revenue.  Revenue for the twelve months ended December 25, 1999
 increased $533 million or 17% from the same time period in 1998.  The
 increase is due to favorable market conditions in the business sectors that
 the Company operates.

     Contract backlog at December 25, 1999 was nearly $4.0 billion of which
 5.5% is attributable to foreign operations located primarily in Canada.
  Domestic projects are spread geographically throughout the U.S.

     Margin.  Margins, as a percentage of revenue, for the twelve months
 ended December 25, 1999 were consistent with margins in the same period in
 1998, increasing from 8.6% to 8.8%.

     General and Administrative Expenses.  General and administrative
 expenses for the twelve months ended December 25, 1999 were the same as
 1998, at $141 million.

     Gain on sale of Operating Assets.   Net gains on the disposition of
 property, plant and equipment and other assets increased to $20 million in
 the twelve months ended December 25, 1999, from $18 million in the same
 period in 1998.  The increase is due to additional sales of excess
 construction equipment.

     Investment Income and Equity Earnings.  During the third quarter 1999,
 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 $18 million was recognized in the
 Statement of Earnings.  Prior to the writedown, 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.  As a
 result, this write-down had no effect on total comprehensive income or total
 redeemable common stock.  Subsequent changes in the market value of the
 security will be included as a separate component of comprehensive income.

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

     During the twelve months ended December 25, 1999 and December 26, 1998,
 the Company managed three active coal mines for Level 3.  Fees for these
 services for December 26, 1999 were $33 million as compared to $34 million
 for the same period in 1998.  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.  After a significant long-term
 contract expires in 2000, adjusted operating earnings at the mines will
 decrease substantially, thereby decreasing the annual management fee earned
 by the Company to approximately $6 million in 2001.

     The U.S. Minerals Management Service has issued an assessment to the
 Level 3 mines for the underpayment of royalties.  Level 3 is vigorously
 contesting the U.S. Minerals Management Service assessment.  If Level 3 is
 ultimately required to pay the U.S. Minerals Management Service assessment
 of approximately $20.2 million ($13.0 million of which is principal and $7.2
 million of which is interest) the payment would decrease future mine
 management fees in total by as much as $3.9 million, but will not affect
 fees previously received.

     Provision for Income Taxes.  The effective income tax rates in 1999 and
 1998 were 37.6% and 35.7%, respectively.  These rates differ from the
 federal statutory rate of 35% due primarily to state income taxes.


            Financial Condition - December 30, 2000 vs. December 25, 1999

     Cash and cash equivalents decreased $36 million to $302 million at
 December 30, 2000 from $338 million at December 25, 1999.  The decrease
 reflects net cash provided by operations of $208 million offset by net cash
 used in investing activities of $148 million and $96 million used in
 financing activities.

     Net cash provided by operating activities for the twelve months ended
 December 30, 2000 decreased by $27 million to $208 million as compared to
 the same period in 1999. Increased working capital requirements for
 construction contracts were partially offset by a net earnings increase of
 $14 million for the twelve months ended December 30, 2000 compared to the
 same period in 1999.  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 twelve months ended
 December 30, 2000 increased by $68 million to $148 million as compared to
 the same period in 1999.  This increase was due to an increase in
 acquisitions of $136 million, additional capital expenditures of $15
 million, a decrease in proceeds from the sale of property, plant and
 equipment in the ordinary course of business of $8 million, an increase in
 additions to notes receivable of $2 million and a decrease in payments
 received on notes receivable of $1 million.  These changes were partially
 offset by a decrease in purchases of marketable securities of $2 million,
 proceeds from sale of partnership of $86 million and a $6 million increase
 in proceeds from the sale of marketable securities.

     Net cash used in financing activities for the twelve months ended
 December 30, 2000 increased by $49 million to $96 million as compared to the
 same time period in 1999.  This increase was due to an increase in
 repurchases of common stock of $25 million, an increase in dividends paid of
 $2 million over 1999 amounts and cash distributed in connection with the
 Materials Spin-off of $47 million.  These changes were partially offset by a
 decrease in payments on long-term debt of $18 million and an increase in
 issuance of common stock of $7 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 December 30,
 2000, 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 twelve months ended
 December 30, 2000 and December 25, 1999 of $18 million and $16 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 Common Stock at any time during the year from
 shareholders.

     The Company does not believe that the spin-off of its Materials Business
 will have an adverse impact on its liquidity or material commitments, since
 earnings generated from the Materials Business have 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 satisfactory terms.
  The Company believes that, to the extent necessary, it will likewise be
 able to borrow funds on acceptable terms for the foreseeable future.

     New Accounting Pronouncement.  In June 1998, the Financial Accounting
 Standards Board ("FASB") issued 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.  This statement is
 effective for all fiscal years beginning after June 15, 2000. Adoption of
 this statement will not materially affect the Company's financial statements
 as the Company has no significant derivative instruments or hedging
 activities.

Item 7A.     Quantitative and Qualitative Disclosures 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.

Item 8.     Financial Statements and Supplementary Data.


                          REPORT OF INDEPENDENT ACCOUNTANTS






The Board of Directors and Stockholders
Peter Kiewit Sons', Inc.

In our opinion, the accompanying consolidated balance sheets and the related
 consolidated statements of earnings, of changes in redeemable common stock
 and comprehensive income, and of cash flows present fairly, in all material
 respects, the financial position of Peter Kiewit Sons', Inc. and its
 subsidiaries at December 30, 2000, and December 25, 1999 and the results of
 their operations and their cash flows for each of the three fiscal years in
 the period ended December 30, 2000 in conformity with accounting principles
 generally accepted in the United States of America. These financial
 statements are the responsibility of the Company's management; our
 responsibility is to express an opinion on these financial statements based
 on our audits. We conducted our audits of these statements in accordance
 with auditing standards generally accepted in the United States of America,
 which require that we plan and perform an 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,
 assessing the accounting principles used and significant estimates made by
 management, and evaluating the overall financial statement presentation.  We
 believe that our audits provide a reasonable basis for our opinion.






PricewaterhouseCoopers LLP

Omaha, Nebraska
March 5, 2001


<TABLE>
<S>
                       PETER KIEWIT SONS', INC. AND SUBSIDIARIES

                          Consolidated Statements of Earnings
                   For the three fiscal years ended December 30, 2000


<C>                                        <C>        <C>        <C>
(dollars in millions,
except per share data)                        2000       1999       1998
------------------------------------------------------------------------

Revenue                                    $ 4,463    $ 3,586    $ 3,053
Cost of revenue                             (4,138)    (3,272)    (2,791)
                                           -------    -------    -------
                                               325        314        262

General and administrative expenses           (170)      (141)      (141)
Gain on sale of operating assets                17         20         18
                                           -------    -------    -------

Operating earnings                             172        193        139

Other income (expense):
   Investment income and equity earnings        13          -         12
   Interest expense                             (4)        (7)        (8)
   Gain on sale of partnership interest         45          -          -
   Other, net                                   33         35         42
                                           -------    -------    -------
                                                87         28         46
                                           -------    -------    -------

Earnings before income taxes, minority interest
  and discontinued operations                  259        221        185

Minority interest in net earnings of
  Subsidiaries                                  (1)        (1)        (1)

Provision for income taxes                     (97)       (83)       (66)
                                           -------    -------    -------

Earnings from continuing operations            161        137        118

Discontinued operations:
  Income from materials operations, net of income tax
   expense of $12, $17 and $12                  18         28         18
                                           -------    -------    -------

Net earnings                               $   179    $   165    $   136
                                           =======    =======    =======

Earnings per share:

Continuing operations:
  Basic                                    $  4.97    $  4.00    $  3.53
                                           =======    =======    =======
  Diluted                                  $  4.83    $  3.91    $  3.48
                                           =======    =======    =======

Discontinued operations:
  Basic                                    $   .57    $   .81    $   .54
                                           =======    =======    =======
  Diluted                                  $   .55    $   .80    $   .54
                                           =======    =======    =======
Net earnings:
  Basic                                    $  5.54    $  4.81    $  4.07
                                           =======    =======    =======
  Diluted                                  $  5.38    $  4.71    $  4.02
                                           =======    =======    =======
</TABLE>
------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.


                        PETER KIEWIT SONS', INC. AND SUBSIDIARIES

                               Consolidated Balance Sheets
                        December 30, 2000 and December 25, 1999



  (dollars in millions)                         2000         1999
-------------------------------------------------------------------------

Assets

Current assets:
  Cash and cash equivalents                   $  302       $  338
  Marketable securities                            5           12
  Receivables, less allowance of $4 and $7       463          507
  Unbilled contract revenue                       97           73
  Contract costs in excess of related revenue     58           31
  Investment in construction joint ventures      138          197
  Deferred income taxes                           60           60
  Other                                           10           21
                                              ------       ------
Total current assets                           1,133        1,239

Property, plant and equipment, at cost:
  Land                                            24           40
  Buildings                                       60           51
  Equipment                                      528          660
                                              ------       ------
                                                 612          751
  Less accumulated depreciation and amortization(424)        (508)
                                              ------       ------
Net property, plant and equipment                188          243

Other assets                                      96          117
Deferred income taxes                              9            -
                                              ------       ------

                                              $1,426       $1,599
                                              ======       ======

-----------------------------------------------------------------
See accompanying notes to consolidated financial statements.



                   PETER KIEWIT SONS', INC. AND SUBSIDIARIES

                         Consolidated Balance Sheets
                  December 30, 2000 and December 25, 1999



  (dollars in millions)                         2000         1999
-------------------------------------------------------------------------

Liabilities and Redeemable Common Stock

Current liabilities:
  Accounts payable, including retainage of
   $56 and $50                                 $  223       $  270
  Current portion of long-term debt                 1            4
  Accrued costs on construction contracts         133          120
  Billings in excess of related costs and
   earnings                                       145          122
  Accrued insurance costs                          64           84
  Accrued payroll                                  34           36
  Other                                            22           26
                                               ------       ------
Total current liabilities                         622          662

Long-term debt, less current portion               12           18

Deferred income taxes                               -            2
Other liabilities                                  82           67

Minority interest                                  14           13

Preferred stock, no par value, 250,000 shares authorized,
  no shares outstanding                             -            -
Redeemable common stock ($571 million aggregate redemption value):
  Common stock, $.01 par value, 125 million shares authorized
  32,259,640 and 34,876,718 outstanding             -            -
  Additional paid-in capital                      185          175
  Accumulated other comprehensive loss             (7)         (10)
  Retained earnings                               518          672
                                               ------       ------
Total redeemable common stock                     696          837
                                               ------       ------
                                               $1,426       $1,599
                                               ======       ======

------------------------------------------------------------------
See accompanying notes to consolidated financial statements.


<TABLE>
<S>
                    PETER KIEWIT SONS', INC. AND SUBSIDIARIES

                      Consolidated Statements of Cash Flows
              For the three fiscal years ended December 30, 2000
<C>                                         <C>       <C>         <C>
  (dollars in millions)                       2000       1999       1998
-----------------------------------------------------------------------------

Cash flows from operations:
 Net earnings                               $  179     $  165     $  136
 Adjustments to reconcile net earnings to
  net cash provided by operations:
   Depreciation and amortization                72         73         71
   Gain on sale of property, plant and
    equipment and other investments, net        (8)        (2)       (20)
   Gain on sale of partnership interest        (45)         -          -
   Equity earnings, net of distributions        (7)       (13)         -
   Change in other noncurrent liabilities        7          -         (7)
   Deferred income taxes                        (8)        (2)         5
   Change in working capital items:
    Receivables                                (15)       (41)        (6)
    Unbilled contract revenue and contract
     costs in excess of related revenue        (51)        10          5
   Investment in construction joint ventures    63         (8)       (13)
   Other current assets                         (1)        10          1
   Accounts payable                              4         42         (6)
   Accrued construction costs and billings in
    excess of revenue on uncompleted contracts  36        (16)        28
   Accrued payroll                              (2)         -          3
   Change in outstanding checks in excess of funds
    on deposit                                 (20)        43        (21)
   Other liabilities                            (5)        (8)         2
   Other                                         9        (18)        (3)
                                            ------     ------     ------
Net cash provided by operations                208        235        175

Cash flows from investing activities:
 Proceeds from sales and maturities of
  marketable securities                          9          3         24
 Purchases of marketable securities             (5)        (7)        (7)
 Proceeds from sale of property, plant
  and equipment                                 24         32         25
 Acquisitions, net of cash acquired           (172)       (36)       (13)
 Proceeds from sale of partnership interest     86          -          -
 Capital expenditures                          (90)       (75)       (87)
 Additions to notes receivable                  (4)        (2)       (20)
 Payments received on notes receivable           4          5          5
                                            ------     ------     ------
Net cash used in investing activities         (148)       (80)       (73)
</TABLE>
-----------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.



<TABLE>
<S>
                       PETER KIEWIT SONS', INC. AND SUBSIDIARIES

                        Consolidated Statements of Cash Flows
                For the three fiscal years ended December 30, 2000

<C>                                        <C>         <C>        <C>
  (dollars in millions)                       2000       1999       1998
-----------------------------------------------------------------------------

Cash flows from financing activities:
  Long-term debt borrowings                $     5     $    5     $    4
  Short-term debt borrowings, net                -          -         (5)
  Payments on long-term debt                    (4)       (22)         -
  Issuances of common stock                     32         25         67
  Repurchases of common stock                  (64)       (39)       (35)
  Dividends paid                               (18)       (16)       (13)
  Exchange of Class C Stock for Level 3's
   Class D Stock, net                            -          -       (122)
  Cash distributed in connection with
   Materials spin-off                         (47)         -          -
                                            ------     ------     ------
Net cash used in financing activities          (96)       (47)      (104)

Effect of exchange rates on cash                 -          3         (3)
                                            ------     ------     ------

Net (decrease) increase in cash and
 cash equivalents                              (36)       111         (5)

Cash and cash equivalents at beginning of year 338        227        232
                                            ------     ------     ------

Cash and cash equivalents at end of year    $  302     $  338     $  227
                                            ======     ======     ======

Supplemental disclosures of cash flow information:
  Taxes paid                                $  124     $   95     $   91
  Interest paid                             $    5     $    4     $    5

Non-cash financing activities:
  Conversion of convertible debentures to
   Common Stock                             $    -     $    -     $  (10)

Exchange of convertible debentures for materials
stock (Note 16)                             $   (7)    $    -     $    -
--------------
</TABLE>

-----------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.



<TABLE>
<S>

                      PETER KIEWIT SONS', INC. AND SUBSIDIARIES

           Consolidated Statements of Changes in Redeemable Common Stock and
                            Comprehensive Income (Loss)
               For the three fiscal years ended December 30, 2000
<C>                           <C>      <C>      <C>         <C>      <C>
                                                             Accumulated                 Total
                                      Redeemable Additional     Other                  Redeemable
                                       Common      Paid-in  Comprehensive   Retained     Common
(dollars in millions)                   Stock      Capital   Income (Loss)  Earnings     Stock
------------------------------------------------------------------------------------------------

Balance at December 28, 1997    $  1    $ 117    $  (18)    $  552    $  652


Dividends (a)                      -        -         -        (13)      (13)
Issuance of stock                  -       77         -          -        77
Repurchase of stock                -       (7)        -        (28)      (35)
Exchange of Class C stock for Class
  D stock, net                     -      (27)        -        (95)     (122)
Change in par value of
  common stock                    (1)       1         -          -         -

Comprehensive income:
  Net earnings                     -        -         -        136       136
  Other comprehensive income:
  Foreign currency adjustment      -        -        (1)         -        (1)
  Change in unrealized holding
   loss, net of tax                -        -        (3)         -        (3)
                                                                      ------

  Total other comprehensive income                                        (4)
                                                                      ------

Total comprehensive income                                               132
                               ----     -----    ------     ------    ------

Balance at December 26, 1998      -       161       (22)       552       691


Dividends (a)                     -         -         -        (17)      (17)
Issuance of stock                 -        25         -          -        25
Repurchase of stock               -       (11)        -        (28)      (39)

Comprehensive income:
  Net earnings                    -         -         -        165       165
  Other comprehensive income:
  Foreign currency adjustment     -         -         1          -         1
  Change in unrealized holding
   loss, net of tax               -         -        11          -        11
                                                                      ------

  Total other comprehensive income                                        12
                                                                      ------

Total comprehensive income                                               177
                               ----     -----    ------     ------    ------

Balance at December 25, 1999      -       175       (10)       672       837
</TABLE>
-----------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.


<TABLE>
<S>
                     PETER KIEWIT SONS', INC. AND SUBSIDIARIES

         Consolidated Statements of Changes in Redeemable Common Stock and
                           Comprehensive Income (Loss)
              For the three fiscal years ended December 30, 2000
<C>                           <C>      <C>      <C>         <C>      <C>
                                                             Accumulated                 Total
                                      Redeemable Additional     Other                  Redeemable
                                       Common      Paid-in  Comprehensive   Retained     Common
(dollars in millions)                   Stock      Capital   Income (Loss)  Earnings     Stock
-------------------------------------------------------------------------------------------------
Dividends (a)                    -         -            -      (18)      (18)
Issuance of stock                -        32            -        -        32
Repurchase of stock              -       (16)           -      (48)      (64)

Exchange of Common Stock
  for Materials Stock            -        (6)           -      (16)      (22)
Materials spin-off               -         -            -     (251)     (251)

Comprehensive income:
  Net earnings                   -         -            -      179       179
  Other comprehensive income:
  Foreign currency adjustment    -         -            -        -         -
  Change in unrealized holding
   loss, net of tax              -         -            3        -         3
                                                                       -----

  Total other comprehensive
   Income                        -         -            -        -         3
                                                                       -----

Total comprehensive income       -         -            -        -       182
                             -----     -----        -----    -----     -----

Balance at December 30, 2000 $   -     $ 185        $  (7)   $ 518     $ 696
                             =====     =====        =====    =====     =====
</TABLE>
-----------------------------------------------------------------------------

(a)     Dividends per share include $.30, $.27 and $.225 for dividends
 declared in 2000, 1999 and 1998 but paid in January of the following year.

See accompanying notes to consolidated financial statements.



                     PETER KIEWIT SONS', INC. AND SUBSIDIARIES

                    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.     Basis of Presentation:

 Peter Kiewit Sons', Inc. (the "Company") was formed by its former parent,
 Level 3 Communications, Inc. (formerly Peter Kiewit Sons', Inc.) ("Level
 3"), in connection with a transaction (the "Transaction") intended to
 separate the Construction and Materials Businesses and the diversified
 business of Level 3 into two independent companies.  On March 31, 1998, as
 part of the Transaction, Level 3 transferred all of the common stock of
 Kiewit Construction Group Inc., as well as certain other assets and
 liabilities related to the construction and materials businesses, which
 together comprised the Construction and Mining Group (the "Construction &
 Mining Group"), to the Company.  As the Construction & Mining Group
 comprised all of the net assets and operations of the Company at the time of
 the Transaction, the Construction & Mining Group is the Company's
 predecessor.  Thus, the term "the Company", as used herein, refers to Peter
 Kiewit Sons', Inc., its predecessor, and its consolidated subsidiaries.

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 statements of earnings of the
 Company have been reclassified to reflect the spin-off of the Company's
 materials business (the "Materials Business") that was effected on September
 30, 2000 (Note 16).  Accordingly, the revenues, costs and expenses of the
 Materials Business have been segregated in the Consolidated 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:

(dollars in millions)                                   2000    1999    1998

Revenues                                              $  360  $  437   $  333
                                                      ======  ======   ======
Income from discontinued operations (after applicable
 income taxes of $13, $17 and $12)                    $   20  $   28   $   18
Loss on disposal of business* (after applicable income
 tax benefit of $1)                                       (2)      -        -
                                                      ------  ------   ------
Income from discontinued operations                   $   18  $   28   $   18
                                                      ======  ======   ======

                                                           December 25, 1999
                                                           -----------------

Current assets                                                 $   144
Total assets                                                   $   277
Current liabilities                                            $    51
Total liabilities                                              $    67
Net assets of discontinued operations                          $   210

 In connection with the spin-off, the company distributed $352 million of
 total assets, including $47 million of cash and total liabilities of $72
 million.

*The loss on disposal of the Materials Business for the twelve months ended
 December 30, 2000 reflects the costs directly associated with the
 disposition.



                       PETER KIEWIT SONS', INC. AND SUBSIDIARIES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


3.     Dispositions 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.  These
 operations were included with the spin-off of the Company's Materials
 Business (Note 16).

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.

On September 26, 2000, the Company acquired 100% of Walnut Creek Mining
 Company, 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.  The following unaudited, pro-forma financial information
 assumes the acquisition occurred at the beginning of 1999.  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 1999, or the results which may occur in the future.

 (dollars in millions)                                   2000         1999
-----------------------------------------------------------------------------

  Revenue                                               $4,489       $3,619
  Net earnings                                          $  183       $  171
  Net earnings per share:
   Basic                                                $ 5.67       $ 5.00
   Diluted                                              $ 5.51       $ 4.89


4.     Summary of Significant Accounting Policies:

Principles of Consolidation:

The consolidated financial statements include the accounts of the Company
and subsidiaries in which it has or had control.  Investments in
construction joint ventures and partnerships in which the Company exercises
significant influence over operating and financial policies are accounted for
by the equity method in the consolidated balance sheet.  The Company accounts
for its share of the operations of the construction joint ventures and
partnerships on a pro rata basis in the consolidated statements of earnings.
Prior to their spin-off, investments in materials limited liability
companies in which the Company exercised significant influence over
operations and financial policies were accounted for by the equity method.
The Company accounted for its share of a materials joint venture on a pro
rata basis.  All significant intercompany accounts and transactions have
been eliminated.




                     PETER KIEWIT SONS', INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


4.     Summary of Significant Accounting Policies, Continued:

Construction Contracts:

 The Company operates as a general contractor throughout North America and
 engages in various types of construction projects for both public and private
 owners.  Credit risk is minimal with public (government) owners since the
 Company ascertains that funds have been appropriated by the governmental
 project owner prior to commencing work on public projects.  Most public
 contracts are subject to termination at the election of the government.
  However, in the event of termination, the Company is entitled to receive the
 contract price on completed work and reimbursement of termination-related
 costs.  Credit risk with private owners is minimized because of statutory
 mechanics liens, which give the Company high priority in the event of lien
 foreclosures following financial difficulties of private owners.

 The construction industry is highly competitive and lacks firms with dominant
 market power.  A substantial portion of the Company's business involves
 construction contracts obtained through competitive bidding.  The volume and
 profitability of the Company's construction work depends to a significant
 extent upon the general state of the economies of North America and the
 volume of work available to contractors.  The Company's construction
 operations could be adversely affected by labor stoppages or shortages,
 adverse weather conditions, shortages of supplies or other governmental
 action.

 The Company uses the percentage of completion method of accounting on long-
 term construction contracts and joint ventures.  Under the percentage of
 completion method, an estimated percentage for each contract, as determined
 by the Company's engineering estimate based on the amount of work performed,
 is applied to total estimated revenue.  Provision is made for the entire
 amount of future estimated losses on contracts and joint ventures in
 progress; claims for additional contract compensation, however, are not
 reflected in the accounts until the period in which such claims are allowed.
  Revisions in cost and profit estimates during the course of the work are
 reflected in the accounting period in which the facts which require the
 revision become known.  It is at least reasonably possible that cost and
 profit estimates will be revised in the near-term.

 In accordance with industry practice, amounts realizable and payable under
 contracts which may extend beyond one year are included in current assets and
 liabilities.

Coal Sales Contracts:

 The Company recognizes coal sales revenue at the time the product is
 delivered and all contractual obligations have been satisfied.

Depreciation:

 Property, plant and equipment are recorded at cost.  Depreciation for the
 majority of the Company's property, plant and equipment is calculated using
 accelerated methods.

Intangible Assets:

 Intangible assets primarily consist of amounts allocated upon purchase of
 existing operations.  Those assets are amortized on a straight-line basis
 over the expected period of benefit, which does not exceed 20 years.



                      PETER KIEWIT SONS', INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


4.     Summary of Significant Accounting Policies, Continued:

Long-Lived Assets:

 The Company reviews the carrying amount of long-lived assets for impairment
 whenever events or changes in circumstances indicate that the carrying amount
 may not be recoverable.  Measurement of any impairment would include a
 comparison of the present value of the estimated future operating cash flows
 anticipated to be generated during the remaining life of the assets to the
 net carrying value of the assets.

Foreign Currencies:

 The local currencies of foreign subsidiaries are the functional currencies
 for financial reporting purposes.  Assets and liabilities are translated into
 U.S. dollars at year-end exchange rates.  Revenue and expenses are translated
 using average exchange rates prevailing during the year.  Gains or losses
 resulting from currency translation are recorded as adjustments to
 accumulated other comprehensive income (loss).




                      PETER KIEWIT SONS', INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


4.     Summary of Significant Accounting Policies, Continued:

Earnings Per Share:

 Basic earnings per share have been computed using the weighted average
 number of shares outstanding during each period.  Diluted earnings per share
 give 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.

                                                        2000    1999    1998
                                                        ----    ----    ----

Earnings from continuing operations (in millions)     $  161  $  137  $  118

Earnings from discontinued operations                     18      28      18
                                                      ------  ------  ------

Net earnings available to common stockholders            179     165     136

Add:  Interest expense, net of tax effect,
  associated with convertible debentures                   *       *       *
                                                      ------  ------  ------

Net earnings for diluted shares                       $  179  $  165  $  136
                                                      ======  ======  ======

Total number of weighted average shares
  outstanding used to compute basic
  earnings per share (in thousands)                   32,284  34,299  33,396

Additional dilutive shares assuming
  conversion of convertible debentures                 1,041     753     432
                                                      ------  ------  ------

Total number of shares used to compute
  diluted earnings per share                          33,325  35,052  33,828
                                                      ======  ======  ======

Continuing operations:
  Basic earnings per share                            $ 4.97  $ 4.00  $ 3.53
  Diluted earnings per share                          $ 4.83  $ 3.91  $ 3.48

Discontinued operations:
  Basic earnings per share                            $  .57  $  .81  $  .54
  Diluted earnings per share                          $  .55  $  .80  $  .54

Net earnings:
  Basic earnings per share                            $ 5.54  $ 4.81  $ 4.07
  Diluted earnings per share                          $ 5.38  $ 4.71  $ 4.02

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




                     PETER KIEWIT SONS', INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


4.     Summary of Significant Accounting Policies, Continued:

Income Taxes:

 Deferred income taxes are provided for the temporary differences between the
 financial reporting basis and the tax basis of the Company's assets and
 liabilities using enacted tax rates in effect for the year in which the
 differences are expected to reverse.

Use of Estimates:

 The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make 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 revenues and expenses during the
reporting period.  Actual results could differ from those estimates.

Recent Pronouncements:

 In June 1998, FASB issued SFAS No. 133, "Accounting for Derivative
 Instruments and Hedging Activities", which establishes accounting and
 reporting standards for derivative instruments and for hedging activities.
  This statement is effective for all fiscal years beginning after June 15,
 2000.  Adoption of this statement will not materially affect the Company's
 financial statements as the Company has no significant derivative
 instruments or hedging activities.

Stock Split:

 On January 11, 1999, the Company declared a four-for-one stock split in the
 form of a stock dividend of three shares of Common Stock for each share
 issued and outstanding, payable on January 15, 1999.  All share and per
 share amounts for all periods presented have been retroactively restated to
 reflect the stock split.

Fiscal Year:

 The Company has a 52-53 week fiscal year which ends on the last Saturday in
 December.  The year 2000 was a 53-week year and 1999 and 1998 were 52-week
 years.

Reclassifications:

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





                       PETER KIEWIT SONS', INC. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


5.     Disclosures about Fair Value of Financial Instruments:

 The following methods and assumptions were used to determine classification
 and fair values of financial instruments:

Cash and Cash Equivalents:

 Cash equivalents generally consist of funds invested in Wilmington Trust-
 Money Market Portfolio and highly liquid instruments purchased with original
 maturities of three months or less.  The securities are stated at cost,
 which approximates fair value.

 Outstanding checks in excess of funds on deposit in the amount of $81
 million and $100 million at December 30, 2000 and December 25, 1999 have
 been reclassified to accounts payable.

Marketable Securities and Non-current Investments:

 The Company has classified all marketable securities and marketable non-
 current investments not accounted for under the equity method as available-
 for-sale.  The amortized cost of the securities used in computing unrealized
 and realized gains and losses is determined by specific identification.
  Fair values are estimated based on quoted market prices for the securities
 on hand or for similar investments.  Net unrealized holding gains and losses
 are reported as a separate component of accumulated other comprehensive
 income, net of tax.

 The following summarizes the amortized cost, unrealized holding gains and
 losses, and estimated fair values of marketable securities and marketable
 non-current investments at December 30, 2000 and December 25, 1999:

                                        Unrealized   Unrealized
                              Amortized   Holding     Holding       Fair
(dollars in millions)            Cost      Gains       Losses      Value
-----------------------------------------------------------------------------
2000
----
Marketable securities:
  U.S. debt securities        $    5     $    -       $    -      $    5
                              ======     ======       ======      ======

Non-current investments:
  Equity securities           $    2     $    -       $    -      $    2
                              ======     ======       ======      ======
1999
----
Marketable securities:
  U.S. debt securities        $   12     $    -       $    -      $   12
                              ======     ======       ======      ======

Non-current investments:
  Equity securities           $   12     $    -       $   (4)     $    8
                              ======     ======       ======      ======
-----------------------------------------------------------------------------

For debt securities, amortized costs do not vary significantly from principal
 amounts.  Realized gains and losses on sales of marketable securities were
 each less than $1 million in fiscal 2000, 1999 and 1998.




                     PETER KIEWIT SONS', INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


5.     Disclosures about Fair Value of Financial Instruments, Continued:

The contractual maturities of the debt securities are from one to five years.

During 2000 and 1999, 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 losses of $9 million and $18
million, respectively, were recognized in the Statement of Earnings.  Prior
to each 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 accumulated other comprehensive income.  As a result, this write-down had
no effect on total comprehensive income or total redeemable common stock.
Subsequent changes in the market value of the security will be included as
a separate component of accumulated other comprehensive income (loss).

Retainage on Construction Contracts:

Receivables at December 30, 2000 and December 25, 1999 include approximately
$116 million and $90 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 $29 million and $29 million,
respectively, of securities which are being held by the owners of various
construction projects in lieu of retainage, which are not yet due.  Also
included in accounts receivable are $10 million and $15 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
(loss), net of tax.

Long-term Debt:

The fair value of debt was estimated using the incremental borrowing rates of
the Company for debt of the same remaining maturities and approximates the
carrying amount.




                     PETER KIEWIT SONS', INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

6.     Investment in Construction Joint Ventures and Partnership:

The Company has entered into a number of construction joint venture
arrangements. Under these arrangements, if one venturer is financially unable
to bear its share of the costs, the other venturers will be required to pay
those costs.  On September 27, 2000, the Company sold its 49% interest in the
Aker Gulf Marine construction partnership.  The partnership engaged in the
engineering, construction, fabrication and installation of steel and concrete
structures.

Summary joint venture and partnership financial information follows:

Financial Position (dollars in millions)                  2000        1999
-----------------------------------------------------------------------------

Total Joint Ventures and Partnership

  Current assets                                         $  755      $  866
  Other assets (principally construction equipment)         101         105
                                                         ------      ------
                                                            856         971

  Current liabilities                                      (619)       (600)
                                                         ------      ------
   Net assets                                            $  237      $  371
                                                         ======      ======
Company's Share

  Equity in net assets                                   $  133      $  192
  Receivable from joint ventures and partnership              5          52
                                                         ------      ------
                                                            138         244

  Less:  Construction partnership (Note 7)                    -         (47)
                                                         ------      ------
   Investment in construction joint ventures             $  138      $  197
                                                         ======      ======

Operations (dollars in millions)                  2000       1999       1998
-----------------------------------------------------------------------------
Total Joint Ventures and Partnership

  Revenue                                        $1,129     $1,841     $2,237
  Costs                                           1,162      1,692      2,082
                                                 ------     ------     ------
   Operating income (loss)                       $  (33)    $  149     $  155
                                                 ======     ======     ======

Company's Share

  Revenue                                        $  604     $  908     $1,116
  Costs                                             627        833      1,024
                                                 ------     ------     ------
   Operating income (loss)                       $  (23)    $   75     $   92
                                                 ======     ======     ======

Depreciation is computed by the joint ventures and partnership using
straight-line and declining balance methods over the estimated useful lives
of the assets which range from 2 to 20 years.



                        PETER KIEWIT SONS', INC. AND SUBSIDIARIES

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

7.     Other Assets:

Other assets consist of the following at December 30, 2000 and December 25,
1999:

(dollars in millions)                                   2000       1999
----------------------------------------------------------------------------
Marketable securities (Note 5)                         $   2      $   8
Equity method investment                                   6          5
Other investments at cost                                  3          -
Construction partnership (Note 6)                          -         47
Goodwill, net of accumulated amortization of $11 and $15   8         40
Other intangibles, net of accumulated amortization of $1  62          -
Land option                                                -          2
Notes receivable                                          15         15
                                                       -----      -----
                                                       $  96      $ 117
                                                       =====      =====

The marketable securities are an investment in a publicly traded company.

The notes receivable are primarily non-interest bearing employee notes.

The equity method investment is a 33% interest in a concrete products
business that is not publicly traded and does not have a readily determinable
market value.

Financial data relating to the equity method investment is summarized below:

(dollars in millions)                        2000      1999      1998
-----------------------------------------------------------------------------
Current assets                              $  19    $  11
Property, plant and equipment, net              7         6
Other noncurrent assets                        1         -
                                            -----     -----
                                               27        17

Current liabilities                           (11)       (4)
                                            -----     -----
  Net assets                                $  16     $  13
                                            =====     =====
Equity in net assets                        $   6     $   5
                                            =====     =====
Revenue                                     $   55    $   37    $   80
                                            ======    ======    ======
Gross margin                                $    8    $    7    $   21
                                            ======    ======    ======
Net earnings                                $    3    $    3    $   16
                                            ======    ======    ======
Equity in net earnings                      $    1    $    1    $    6
                                            ======    ======    ======



                     PETER KIEWIT SONS', INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

8.     Long-Term Debt:

At December 30, 2000 and December 25, 1999, long-term debt consisted of the
following:

(dollars in millions)                              2000               1999
-----------------------------------------------------------------------------

7.35% - 8.25% Convertible debentures, 2007-2009   $  11              $  14
Stockholder notes and other                           2                  8
                                                  -----              -----
                                                     13                 22
Less current portion                                  1                  4
                                                  -----              -----
                                                  $  12              $  18
                                                  =====              =====

The convertible debentures are convertible during October of the fifth year
preceding their maturity date.  Each annual series may be redeemed in its
entirety prior to the due date except during the conversion period.  At
December 30, 2000, 1,366,869 shares of stock were reserved for future
conversions.

Scheduled maturities of long-term debt are as follows (in millions):  2001 -
$1; 2002 - $1; 2003 - $0; 2004 - $0, 2005 - $0 and 2006 and thereafter - $11.



                      PETER KIEWIT SONS', INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


9.     Income Taxes:

An analysis of the income tax (provision) benefit relating to earnings before
income taxes, minority interest and discontinued operations for the three
years ended December 30, 2000 follows:

(dollars in millions)                 2000        1999        1998
-----------------------------------------------------------------------------
Current:
  U.S. federal                       $ (85)      $ (72)      $ (46)
  Foreign                              (10)         (4)         (5)
  State                                (10)         (9)        (10)
                                     -----       -----       -----
                                      (105)        (85)        (61)

Deferred:
  U.S. federal                           4           6          (7)
  Foreign                                4          (2)          2
  State                                  -          (2)          -
                                     -----       -----       -----
                                         8           2          (5)
                                     -----       -----       -----
                                     $ (97)      $ (83)      $ (66)
                                     =====       =====       =====

The United States and foreign components of earnings, for tax reporting
purposes, before income taxes, minority interest and discontinued operations
follows:

(dollars in millions)                 2000         1999        1998
-----------------------------------------------------------------------------
United States                        $ 254        $ 222       $ 183
Foreign                                  5           (1)          2
                                     -----        -----       -----
                                     $ 259        $ 221       $ 185
                                     =====        =====       =====

A reconciliation of the actual (provision) benefit for income taxes and the
tax computed by applying the U.S. federal rate (35%) to the earnings before
income taxes, minority interest and discontinued operations for the three
years ended December 30, 2000 follows:

(dollars in millions)                 2000         1999        1998
-----------------------------------------------------------------------------
Computed tax at statutory rate       $ (91)       $ (77)      $ (65)
State income taxes                      (6)          (7)         (6)
Other                                    -            1           5
                                     -----        -----       -----
                                     $ (97)       $ (83)      $ (66)
                                     =====        =====       =====

Possible taxes, beyond those provided, on remittances of undistributed
earnings of foreign subsidiaries, are not expected to be significant.



                      PETER KIEWIT SONS', INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

9.     Income Taxes, Continued:

The components of the net deferred tax assets for the years ended December
30, 2000 and December 25, 1999 were as follows:

(dollars in millions)                         2000           1999
----------------------------------------------------------------------------
Deferred tax assets:
  Construction accounting                    $  31          $  26
  Investments in construction joint ventures    30             24
  Insurance claims                              27             34
  Other                                          7             11
                                             -----          -----
Total deferred tax assets                       95             95

Deferred tax liabilities:
  Asset bases/accumulated depreciation           6             15
  Other                                         20             22
                                             -----          -----
Total deferred tax liabilities                  26             37
                                             -----          -----

Net deferred tax assets                      $  69          $  58
                                             =====          =====

10.     Employee Benefit Plans:

The Company makes contributions, based on collective bargaining agreements
related to its construction operations, to several multi-employer union
pension plans.  These contributions are included in the cost of revenue.
Under federal law, The Company may be liable for a portion of future plan
deficiencies; however, there are no known deficiencies.

Approximately 19% of the employees of the Company are covered under the
Company's profit sharing plan.  The expense related to the profit sharing
plan was $8 million in 2000, $4 million in 1999 and $3 million in 1998.

11.     Redeemable Common Stock:

Ownership of Common Stock is restricted to certain employees conditioned upon
the execution of repurchase agreements which restrict the employees from
transferring the Common Stock.  The Company is generally committed to
purchase all stock at the amount computed pursuant to its Restated
Certificate of Incorporation.  Issuances and repurchases of Common Stock,
including conversions, for the three fiscal  years ended December 30, 2000,
were as follows:

          Balance at December 28, 1997                       40,529,372
          Shares issued in 1998                               6,852,196
          Shares repurchased in 1998                        (11,688,748)
                                                            -----------
          Balance at December 26, 1998                       35,692,820
          Shares issued in 1999                               1,622,550
          Shares repurchased in 1999                         (2,438,652)
                                                            -----------
          Balance at December 25, 1999                       34,876,718
          Shares issued in 2000                               1,559,150
          Shares repurchased in 2000                         (4,176,228)
                                                            -----------
          Balance at December 30, 2000                       32,259,640
                                                            ===========



                    PETER KIEWIT SONS', INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

 12.     Segment and Geographic Data:

The Company primarily operates in the construction industry and currently
has one reportable operating segment.  The Company's other operations
consist of the coal 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 have 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 as described in Note 13 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.
<TABLE>
<S>
Segment Data                     2000              1999*              1998*

<C>                      <C>        <C>     <C>       <C>      <C>       <C>
                         ----------------------------------------------------
(dollars in millions)           Construction Other     Construction Other      Construction Other
----------------------------    ------------ -----     ------------ -----      ------------ -----
Revenue-external
customers                 $4,451   $ 12      $3,586   $  -     $3,053    $  -
                          ======   ====      ======   ====     ======    ====
Depreciation and
Amortization              $   53   $  2      $   54   $  -     $   63    $  -
                          ======   ====      ======   ====     ======    ====

Operating earnings        $  174   $ (2)     $  193   $  -     $  139    $  -
                          ======   ====      ======   ====     ======    ====
</TABLE>
-----------------------------------------------------------------------------
* As restated.



                     PETER KIEWIT SONS', INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

12.     Segment and Geographic Data (Continued):

Geographic Data (dollars in millions)           2000      1999      1998
-----------------------------------------------------------------------------

Revenue, by location of services provided:
  United States                                $4,269    $3,480    $2,956
  Canada                                          194        87        77
  Other                                             -        19        20
                                               ------    ------    ------
                                               $4,463    $3,586    $3,053
                                               ======    ======    ======

Long-lived assets:
  United States                               $  184     $  239
  Canada                                           4          4
                                              ------     ------
                                              $  188     $  243
                                              ======     ======

During 2000 and 1999, revenue recognized from Level 3 represented 39.8% and
24.5%, respectively, of the Company's total revenue.

13.     Management Fees:

During 2000, 1999 and 1998, the Company managed three active coal mines for
Level 3.  Fees for these services were $29 million, $33 million and $34
million for 2000, 1999 and 1998, respectively.  On September 26, 2000, the
Company acquired 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.  A significant long-term contract expired in 2000;
consequently, adjusted operating earnings at the mines will decrease
substantially, thereby decreasing the annual management fee earned by the
Company to approximately $6 million in 2001.

The U.S. Minerals Management Service has issued an assessment to the Level 3
mines for the underpayment of royalties.  Level 3 is vigorously contesting
the U.S. Minerals Management Service assessment.  If Level 3 is ultimately
required to pay the U.S. Minerals Management Service assessment of
approximately $20.2 million ($13.0 million of which is principal and $7.2
million of which is interest), the payment would decrease future mine
management fees in total by as much as $3.9 million, but will not affect fees
previously received.



                      PETER KIEWIT SONS', INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

14.     Other Comprehensive Income:

Other comprehensive income (loss) consisted of the following (dollars in
millions):


                                                          Tax
                                                       (Expense)
                                            Before Tax  of Benefit  After Tax
                                            ----------  ----------  ---------

For the year ended December 26, 1998
------------------------------------
Foreign currency translation adjustments     $   (2)      $   1      $   (1)

Unrealized holding loss:
  Unrealized holding losses arising during
   the period                                    (4)          1          (3)
                                             ------       -----      ------

Other comprehensive income December 26, 1998 $   (6)      $   2      $   (4)
                                             ======       =====      ======

For the year ended December 25, 1999
------------------------------------
Foreign currency translation adjustments     $     1      $   -      $    1
                                             -------      -----      ------

Unrealized holding loss:
  Unrealized holding losses arising
   during period                                  (1)         -          (1)
  Less reclassification adjustment for losses
   realized in net earnings                       18         (6)         12
                                              ------      -----      ------
                                                  17         (6)         11
                                              ------      -----      ------
Other comprehensive income December 25, 1999  $   18      $  (6)     $   12
                                              ======      =====      ======

For the year ended December 30, 2000
------------------------------------
Unrealized holding loss:
  Unrealized holding losses arising
   during the period                          $   (5)     $   2      $   (3)
  Less reclassification adjustment for losses
   realized in net earnings                        9         (3)          6
                                              ------      -----      ------
Other comprehensive income December 30, 2000  $    4      $  (1)     $    3
                                              ======      =====      ======



                      PETER KIEWIT SONS', INC. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

14.     Other Comprehensive Income, Continued:

Accumulated other comprehensive income (loss) consisted of the following
(dollars in millions):

                                Foreign       Unrealized       Accumulated
                                Currency        Holding           Other
                               Translation    Gain/(Loss)     Comprehensive
                               Adjustments   on Securities    Income (Loss)
                               -----------   -------------    -------------

Balance at December 27, 1997    $   (7)       $   (11)        $   (18)

Change during the year              (1)            (3)             (4)
                                ------        -------         -------

Balance at December 26, 1998        (8)           (14)            (22)

Change during the year               1             11              12
                                ------        -------         -------

Balance at December 25, 1999        (7)            (3)            (10)

Change during the year               -              3               3
                                ------        -------         -------

Balance at December 30, 2000    $   (7)       $     -         $    (7)
                                ======        =======         =======

15.     Related Party Transactions

During 2000, 1999 and 1998, the Company was involved in transactions with
Kiewit Materials Company as follows:

(dollars in millions)                2000           1999           1998
-----------------------------------------------------------------------------

Sole contract costs                 $  14          $  10          $   7
Administrative service fee income   $   2          $   4          $   1
Interest expense                    $   1          $   3          $   3
Interest income                     $   2          $   1          $   1
Asset acquisitions                  $   -          $   2          $   -

Receivables at December 30, 2000 and December 25, 1999 include $15 million
and $6 million, respectively, due from Kiewit Materials Company.



                        PETER KIEWIT SONS', INC. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


16.     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.



                       PETER KIEWIT SONS', INC. AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

16.     Other Matters, (Continued):

Level 3 Spin-Off:

In connection with the spin-off of the Company from Level 3 in 1998 ("Level 3
Spin-off"), various agreements were entered into including a Separation
Agreement (the "Level 3 Separation Agreement"), a Tax Sharing Agreement (the
"Level 3 Tax Sharing Agreement") and an amended Mine Management Agreement.

The Level 3 Separation Agreement provides for the allocation of certain risks
and responsibilities between Level 3 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 Level 3 financial responsibility for liabilities arising out of
the non-construction businesses.

The Level 3 Tax Sharing Agreement provides, with respect to periods, or
portions thereof, ending on or before the closing date of the spin-off that
Level 3 and the Company generally will be responsible for paying the taxes
relating to such periods, including any subsequent adjustments resulting from
the redetermination of such tax liabilities by the applicable taxing
authorities, that are allocable to the non-construction businesses and
construction businesses, respectively.  The Level 3 Tax Sharing Agreement
also provides that Level 3 and the Company will indemnify the other from
certain taxes and expenses that would be assessed if the Level 3 Spin-off was
determined to be taxable, but solely to the extent that such determination
arose out of the breach by Level 3 or the Company, respectively, of certain
representations made to the Internal Revenue Service in connection with the
ruling issued with respect to the Level 3 Spin-off or made in the Level 3 Tax
Sharing Agreement.  If the Level 3 Spin-off  was determined to be taxable for
any other reason, those taxes would be allocated 50% to Level 3 and 50% to
the Company.  Finally, under certain circumstances, Level 3 would make
certain liquidated damage payments to the Company if the Level 3 Spin-off was
determined to be taxable in order to take into account the fact that the
Level 3 Spin-off is taxable to the holders of Common Stock.

The amended Mine Management Agreement, pursuant to which the Company provides
mine management and related services to Level 3's coal mining operations,
provides the Company with a right of offer in the event that Level 3 would
determine to sell any or all of its coal mining properties.  Under the right
of offer, Level 3 would be required to offer to sell those properties to the
Company at the price that Level 3 would seek to sell the properties to a
third party.  If the Company declined to purchase the properties at that
price, Level 3 would be free to sell them to a third party for an amount
greater than or equal to that price.  If Level 3 sold the properties to a
third party, thus terminating the amended Mine Management Agreement, it would
be required to pay the Company an amount equal to the discounted present
value of the amended Mine Management Agreement, determined, if necessary, by
an appraisal process.



                      PETER KIEWIT SONS', INC. AND SUBSIDIARIES

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

16.     Other Matters, (Continued):

Other:

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

The Company leases various buildings and equipment under both operating and
capital leases.  Minimum rental payments on buildings and equipment subject
to noncancellable operating leases during the next 25 years aggregate $31
million.

It is customary in the Company's industry to use various financial
instruments in the normal course of business.  These instruments include
items such as letters of credit.  Letters of credit are conditional
commitments issued on behalf of the Company in accordance with specified
terms and conditions.  The Company has informal arrangements with a number of
banks to provide such commitments.  As of December 30, 2000, the Company had
outstanding letters of credit of approximately $166 million.


17.     Quarterly Information (Unaudited):
<TABLE>
<S>
<C>                    <C>    <C>    <C>    <C>    <C>    <C>    <C>   <C>
                                  March             June           September        December
                                  -----             -----          ---------        --------
(dollars in millions,
except per share data)        2000     1999     2000     1999     2000    1999     2000    1999
-----------------------------------------------------------------------------
Revenue                $ 986  $ 673  $1,189 $ 887  $1,314 $ 960  $ 974 $1,066
                       =====  =====  ====== =====  ====== =====  ===== ======

Gross profit           $  44  $  34  $  95  $  65  $  51  $  82  $ 135  $ 133
                       =====  =====  =====  =====  =====  =====  =====  =====

Income from continuing
  operations           $  11  $   8  $  42  $  29  $  40  $  27  $  68  $  73
Income from discontinued
  operations           $   3  $   4  $   8  $   6  $   7  $   8  $   -  $  10
                       -----  -----  -----  -----  -----  -----  -----  -----

Net earnings           $  14  $  12  $  50  $  35  $  47  $  35  $  68  $  83
                       =====  =====  =====  =====  =====  =====  =====  =====
Earnings per common share - basic:
  Income from continuing
   operations          $ .34  $ .22  $1.32  $ .88  $1.20  $ .78  $2.11  $2.09
  Income from discontinued
   operations            .11    .13    .25    .16    .22    .23      -    .28
                       -----  -----  -----  -----  -----  -----  -----  -----
  Net earnings         $ .45  $ .35  $1.57  $1.04  $1.42  $1.01  $2.11  $2.37
                       =====  =====  =====  =====  =====  =====  =====  =====

Earnings per common share - diluted:
  Income from continuing
   operations          $ .34  $ .21  $1.28  $ .86  $1.17  $ .76  $2.04  $2.03
  Income from discontinued
   operations            .10    .13    .24    .16    .21    .23      -    .28
                       -----  -----  -----  -----  -----  -----  -----  -----
  Net earnings         $ .44  $ .34  $1.52  $1.02  $1.38  $ .99  $2.04  $2.31
                       =====  =====  =====  =====  =====  =====  =====  =====

Dividends paid
per share              $ .27  $.225  $ .28  $ .25  $   -  $   -  $   -  $   -
                       =====  =====  =====  =====  =====  =====  =====  =====
</TABLE>



Item 9.     Changes in and Disagreements With Accountants on Accounting and
Financial Disclosures.

     None.

                                    PART III

Item 10.     Directors and Executive Officers of the Registrant.

Item 11.     Executive Compensation.

Item 12.     Security Ownership of Certain Beneficial Owners and Management.

Item 13.     Certain Relationships and Related Transactions.

     The information required by Part III is incorporated by reference to the
Company's definitive proxy statement for the 2001 Annual Meeting of
Stockholders to be filed with the Securities and Exchange Commission.
However, certain information is set forth in Item 4A "Executive Officers of
the Registrant" above.

                                     PART IV

ITEM 14.    Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

     (a)     The following documents are filed as part of this report:

     1.     Consolidated Financial Statements as of December 30, 2000 and
December 25, 1999 and for the three years ended December 30, 2000:

     Report of Independent Accountants dated March 16, 2001 of
     PricewaterhouseCoopers LLP
     Consolidated Statements of Earnings
     Consolidated Balance Sheets
     Consolidated Statements of Cash Flows
     Consolidated Statements of Changes in Redeemable Common Stock and
     Comprehensive Income
     Notes to Consolidated Financial Statements

     2.     Financial Statement Schedules for the three years ended December
30, 2000:

     II - Valuation and Qualifying Accounts and Reserves

     Schedules not indicated above have been omitted because of the absence
of the conditions under which they are required or because the information
called for is shown in the consolidated financial statements or the notes
thereto.

3.     Exhibits required by Item 601 of Regulation S-K.  Exhibits
incorporated by reference are indicated in parentheses:

Exhibit
Number     Description
-------    -----------

3.1        Restated Certificate of Incorporation, effective June 19, 1999
           (Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for
           the quarter ended June 30, 1999).

3.2        Amended and Restated By-laws, effective June 19, 1999 (Exhibit 3.2
           to the Company's Quarterly Report on Form 10-Q for the quarter
           ended June 30, 1999).

4.1        Form of Stock Repurchase Agreement for Employee Stockholders
           (Exhibit 1 to the Company's Registration Statement on Form 8-A
           filed March 24, 1998).

4.2        Indenture dated as of July 1, 1986, as amended pursuant to a First
           Supplemental Indenture dated as of March 31, 1998 (Exhibit 4.3 to
           the Company's Registration Statement on Form S-8 filed October 5,
           1998).

4.3        Form of Debenture (Exhibit 4.4 to the Company's Registration
           Statement on Form S-8 filed October 5, 1998).

4.4        Form of Repurchase Agreement for Convertible Debentures (Exhibit
           4.5 to the Company's Registration Statement on Form S-8 filed
           October 5, 1998).

21         List of Subsidiaries of the Company.


     (b)     Reports on Form 8-K.

Current Report on Form 8-K dated October 2, 2000 reporting the completion of
the spin-off of the Materials Business, which Report was filed with the
Securities and Exchange Commission on October 2, 2000.






                           Report of Independent Accountants



The Board of Directors and Stockholders
Peter Kiewit Sons', Inc.



Our audits of the consolidated financial statements referred to in our report
dated March 5, 2001 appearing on page 12 of this Form 10-K also included an
audit of the financial statement schedule listed in Item 14(a)(2) of this
Form 10-K.  In our opinion, this financial statement schedule presents
fairly, in all material respects, the information set forth therein when read
in conjunction with the related consolidated financial statements.





PricewaterhouseCoopers LLP


Omaha, Nebraska
March 5, 2001






<TABLE>
<S>
                                                                 Schedule II


                    Valuation and Qualifying Accounts and Reserves


<C>                                <C>    <C>      <C>     <C>    <C>
                                                         Additions    Amounts
                                               Balance   Charged to   Charged             Balance
                                              Beginning  Costs and      to                 End of
(dollars in millions)                         Of Period  Expenses    Reserves    Other*    Period
-----------------------------------------------------------------------------
Year ended December 30, 2000
----------------------------

Allowance for doubtful trade accounts $   7   $   2    $  (4)   $  (1)  $   4

Reserves:
  Insurance claims                    $  84   $   -    $ (11)   $  (9)  $  64

Year ended December 25, 1999
----------------------------

Allowance for doubtful trade accounts $   5   $   3    $  (1)   $   -   $   7

Reserves:
  Insurance claims                    $  81   $  23    $ (20)   $   -   $  84

Year ended December 26, 1998
----------------------------

Allowance for doubtful trade accounts $   9   $   -    $  (4)   $   -   $   5

Reserves:
  Insurance claims                    $  76   $   15   $ (10)   $   -   $  81
-----------------------------------------------------------------------------
</TABLE>

* On September 30, 2000, as discussed in Note 2, the Company spun-off its
Materials Business.







                                     SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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.


                                                PETER KIEWIT SONS', INC.

                                             By: /s/  Tobin A. Schropp
Date: March 16, 2001                         Tobin A. Schropp, Vice President

     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                  Title                                   Date
     ----                  -----                                   ----

/s/  Kenneth E. Stinson   Chairman of the Board and Chief
Kenneth E. Stinson        Executive Officer
                          (Principal Executive Officer)        March 16, 2001

/s/ Michael J. Piechoski  Vice President
Michael J. Piechoski      (Principal Financial Officer)        March 16, 2001

/s/ Gregory D. Brokke     Controller
Gregory D. Brokke         (Principal Accounting Officer)       March 16, 2001

/s/ Mogens C. Bay         Director                             March 16, 2001
Mogens C. Bay

/s/ Roy L. Cline          Director                             March 16, 2001
Roy L. Cline

/s/ Richard W. Colf       Director                             March 16, 2001
Richard W. Colf

/s/ James Q. Crowe        Director                             March 16, 2001
James Q. Crowe

/s/ Richard Geary         Director                             March 16, 2001
Richard Geary

/s/ Bruce E. Grewcock     Director                             March 16, 2001
Bruce E. Grewcock

/s/ William L. Grewcock   Director                             March 16, 2001
William L. Grewcock

/s/ Peter Kiewit, Jr.     Director                             March 16, 2001
Peter Kiewit, Jr.

/s/ Allan K. Kirkwood     Director                             March 16, 2001
Allan K. Kirkwood

/s/ Walter Scott, Jr.     Director                             March 16, 2001
Walter Scott, Jr.

/s/ George B. Toll, Jr.   Director                             March 16, 2001
George B. Toll, Jr.