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 31, 2001                           000-29619

                           KIEWIT MATERIALS COMPANY
              (Exact name of registrant as specified in its charter)

                Delaware                                47-0819021
        (State of Incorporation)        (I.R.S. Employer Identification No.)

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

                                  (402) 536-3661
              (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.

      36,077,833 shares of the registrant's $0.01 par value Common Stock were
issued and outstanding on March 27, 2002.

      Portions of the registrant's definitive proxy statement for its 2002
Annual Meeting of Stockholders are incorporated by reference into Part III of
this Form 10-K.

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TABLE OF CONTENTS

                                                                         Page
                                                                         ----
Part I
  Item 1.     Business                                                     1
  Item 2.     Properties                                                   4
  Item 3.     Legal Proceedings                                            5
  Item 4.     Submissions of Matters to a Vote of Security Holders         6

Part II
  Item 5.     Market for Registrant's Common Equity and Related
                Stockholder Matters                                        7
  Item 6.     Selected Financial Data                                      8
  Item 7.     Management's Discussion and Analysis of Financial
                Condition and Results of Operations                        9
  Item 7A.    Quantitative and Qualitative Disclosures About Market Risk  12
  Item 8.     Financial Statements and Supplementary Data                 13
  Item 9.     Changes in and Disagreements with Accountants on
                Accounting and Financial Disclosure                       36

Part III
  Item 10.    Directors and Executive Officers of the Registrant          36
  Item 11.    Executive Compensation                                      36
  Item 12.    Security Ownership of Certain Beneficial Owners and
                Management                                                36
  Item 13.    Certain Relationships and Related Transactions              36

Part IV
  Item 14.    Exhibits, Financial Statement Schedules, and Reports
                on Form 8-K                                               37

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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 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.


                                 PART I

Item 1.  Business.

     General. Kiewit Materials Company and its subsidiaries ("KMC" or
the "Company") operate ready mix, asphalt and aggregate operations in
Arizona, Washington, Oregon, California, Wyoming, Nebraska, Utah and New
Mexico. KMC, a formerly wholly owned subsidiary of Peter Kiewit Sons', Inc.
("PKS"), was incorporated under the laws of Delaware on February 2, 1999, to
consolidate the materials businesses of PKS under one holding company.   KMC
has two reportable business segments with three product lines, aggregates,
ready-mix concrete and hot-mix asphalt.  Information about KMC's product lines
and reportable segments for the fiscal years ended December 31, 2001, December
31, 2000, and December 25, 1999 is included in Note 14 of the "Notes to the
Consolidated Financial Statements," of this Annual Report on Form 10-K.

     KMC's objective is to continue growing its businesses utilizing a
four-part business strategy. First, KMC plans to continue to build value in
markets currently served. Second, KMC plans to expand its presence in existing
markets through cash or debt-financed acquisitions. Third, KMC intends to
enter, via cash or debt-financed acquisitions, new high-growth potential
markets. Finally, KMC seeks to acquire and develop additional strategic
aggregate reserves in selected markets.

     The Spin-off.  The Board of Directors and Management of PKS concluded
that separation of its materials business and its construction business by
means of a spin-off was in the best interests of PKS and PKS' stockholders. In
reaching this conclusion, PKS' Board of Directors and Management considered
that, as a result of the separation: (i) the senior management of KMC would
acquire a larger, direct interest in the materials business that reflects
solely the performance of KMC; (ii) KMC employees would acquire a larger,
direct interest in the materials business, which the PKS Board of Directors
believed was essential to KMC's ability to better retain, attract, and
motivate its employees; and (iii) KMC would improve its ability to make sales
to, and secure contracts from, unrelated construction businesses that may have
concerns about doing business with KMC while it was owned and controlled by a
direct competitor.

     On September 30, 2000, PKS completed the separation of its construction
business and its materials business by distributing 32,288,840 shares of KMC
common stock, representing all of the shares of KMC common stock it then held,
to PKS stockholders of record on September 15, 2000, in a spin-off intended to
be tax free for U.S. federal income tax purposes (the "Spin-off").  PKS
distributed the KMC common stock as a dividend to its stockholders on a pro
rata basis with each PKS stockholder receiving one share of KMC common stock
for each share of PKS common stock that stockholder held on the record date.

          The Share Exchange.  Prior to the Spin-off, PKS offered PKS
     stockholders who were then KMC employees the opportunity to exchange
     their shares of PKS common stock for shares of KMC common stock with an
     equal aggregate formula price.  In the share exchange, KMC employees
     collectively exchanged 1,081,226 shares of their PKS common stock,
     representing 100% of the shares of PKS common stock collectively owned by
     them and 3.24% of the total issued and outstanding PKS common stock on
     September 14, 2000. For each PKS share tendered for exchange, KMC
     employees received 2.85 shares of KMC common stock. KMC employees who
     participated in the share exchange collectively received 3,081,646 shares
     of KMC common stock, representing 8.48% of the issued and outstanding
     shares of KMC common stock on September 15, 2000.


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          The Debenture Exchange.  Prior to the Spin-off and concurrently with
     the share exchange, PKS offered holders of its outstanding convertible
     debentures the opportunity to exchange their PKS debentures for:

                  - KMC debentures convertible into shares of KMC common
                    stock; or

                  - both shares of KMC common stock and new reduced principal
                    amount PKS debentures convertible into shares of PKS
                    common stock.

          In the debenture exchange, PKS debentureholders collectively
     exchanged $13,095,000 principal amount outstanding PKS debentures for:

                  - $670,000 principal amount KMC convertible debentures; and

                  - both  973,383 shares of KMC common stock and $5,475,045
                    principal amount new PKS debentures.

          PKS and KMC now operate as two separate, independent companies.

     The Materials Business. KMC's business is conducted by operating
subsidiaries of KMC and involves the production and sale of aggregates, ready-
mix concrete and hot-mix asphalt.

          Locations. KMC operates in Arizona, Washington, Oregon, California,
Wyoming, Nebraska, Utah and New Mexico, with primary operations in Arizona,
centered in the Phoenix and Tucson metropolitan areas and in the Pacific
Northwest, centered in the Vancouver, Washington and Portland, Oregon
metropolitan areas. KMC also provides construction services in and around
Yuma, Arizona, focusing mainly on paving and related projects.

          Financial information about geographic areas for the fiscal years
ended December 31, 2001, December 31, 2000 and December 25, 1999 is included
in Note 14 of the "Notes to Consolidated Financial Statements" of this
Annual Report on Form 10-K.

            Products.

               Aggregates. KMC produces and sells primarily to third parties
and utilizes internally various types of aggregate products. The production of
these products typically involves extracting the material, crushing and sizing
the material and shipping it to the customer using either trucks or rail.
Aggregate products are used as highway construction materials, railroad
ballast, decorative landscape rock, roofing aggregate and building stone. In
2001, KMC produced in excess of 29 million tons of construction materials and
generated approximately $117 million of revenue from the sale of these
materials.  Approximately 36% of the aggregates produced in 2001 were used
internally in the production of concrete and asphalt products.

               Ready-mix Concrete. KMC produces ready-mix concrete by
combining aggregates, cement, water and additives. The additives allow KMC to
customize the product to customer specifications for overall strength, drying
speed and other properties. Product ingredients are combined at a batch plant
site and loaded into a mixer truck for delivery to the customer's location.
In 2001, KMC produced in excess of 4 million cubic yards of ready-mix concrete
and generated approximately $285 million of revenue from the sale of ready-mix
concrete.

               Hot-mix Asphalt. KMC produces and sells hot-mix asphalt
products. Hot-mix asphalt is a mixture of aggregates and asphalt oil. The
asphalt oil is heated and combined at a plant site and then loaded into dump
trucks for transit to the customer's location. Customer specifications can
require the use of certain types or sizes of aggregates and/or varying
proportions of aggregates and asphalt oil.  In 2001, KMC produced in excess of
3 million tons of hot-mix asphalt and generated approximately $93 million of
revenue from the sale of hot-mix asphalt.

               Customers. KMC markets to a wide variety of customers including
highway contractors, commercial, industrial and residential contractors,
public works contractors, wholesalers and retailers of decorative rock
products, interstate railroads and manufacturers of concrete block products.


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Produced material is used in both publicly and privately funded projects,
although KMC generally does not directly contract with any public entity.  No
single customer accounted for more than 4% of sales in 2001.

               Competition. The materials business is highly dependent on the
availability of high quality aggregates proximate to customers and production
facilities. While price is an important factor in the customer's purchase
decision, qualitative factors such as response time, reliability and product
quality influence the purchase decision as well. With much of the industry
consisting of small to medium sized independent firms, economies of scale,
good site locations and technical knowledge will often provide a competitive
advantage. While KMC believes it possesses these attributes in the markets it
serves, in certain segments of those markets it competes directly with
integrated materials companies that have greater financial resources. It is
also possible that competitors with a lower cost structure or a willingness to
accept lower margins than KMC may have an advantage on price sensitive
projects.

               Governmental and Environmental Regulation.  KMC's facilities
are subject to various evolving federal, state and local laws and regulations
relating to the environment, including those relating to discharges to air,
water and land, the handling and disposal of solid and hazardous waste and the
cleanup of properties affected by hazardous substances. Certain environmental
laws impose substantial penalties for non-compliance and others, such as the
federal Comprehensive Environmental Response, Compensation and Liability Act,
as amended, impose strict, retroactive, joint and several liability upon
persons responsible for releases of hazardous substances.

               KMC continually evaluates whether it must take additional steps
at its locations to ensure compliance with certain environmental laws. KMC
believes that its operations are in substantial compliance with applicable
laws and regulations and that any noncompliance is not likely to have a
material adverse effect on its business, financial position, results of
operations or cash flows. However, future events, such as changes in, or
modified interpretations of, existing laws and regulations or enforcement
policies, or further investigation or evaluation of the potential health
hazards of certain products or business activities, may give rise to
additional compliance and other costs that could have a material adverse
effect on its business.

               KMC, as well as other companies in the aggregates industry,
produce certain products containing varying amounts of crystalline silica.
Excessive and prolonged inhalation of very small particles of crystalline
silica has been associated with non-malignant lung disease. The carcinogenic
potential of excessive exposure to crystalline silica has been evaluated for
over a decade by a number of research groups including the International
Agency for Research on Cancer, the National Institute for Occupational Safety
and Health and the National Toxicology Program, a part of the Department of
Health and Human Services. Results of various studies have ranged from
classifying crystalline silica as a probable to a known carcinogen. Other
studies concluded higher incidences of lung cancer in some operations were due
to cigarette smoking, not silica. Governmental agencies, including the
Occupational Safety and Health Administration and the Mine Safety Health
Administration, coordinate to establish standards for controlling permissible
limits on crystalline silica. KMC believes that it currently meets government
guidelines for crystalline silica exposure and will continue to employ
advanced technologies as they become available to ensure worker safety and to
comply with all applicable regulations.

               KMC believes that its compliance with environmental laws has
not had a material adverse effect on its business, financial position, results
of operations or cash flows.

               Employees.  KMC employed approximately 2,100 people as of March
1, 2002.  Of these, about 400 are officers, operations management, sales
personnel, technical staff, administrative personnel and clerical staff.
Approximately 1,400 employees are represented by labor unions under collective
bargaining agreements and approximately 300 are non-union craft employees. The
collective bargaining agreements have multi-year terms and expiration dates
spread over a number of years. These agreements call for specified wage rates,
payments to pension plans or benefit trusts and require KMC to comply with
various workplace rules. KMC considers relations with its employees to be
good.

               Acquisitions.  Since 1992, KMC has acquired sixteen materials
companies, an aggregate reserve property in Arizona, and developed a new
quarry site in Utah as part of the implementation of its four-part strategy.
The purchase price payable in these acquisitions ranged from approximately $1
million to $47 million. Three of the sixteen acquisitions of materials
companies were in excess of $40 million, one was in excess of $30 million and
the remainder were between $1 million and $7 million. These acquisitions have
allowed KMC to expand its presence in existing markets in Arizona and the


                                    3
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Vancouver, Washington and Portland, Oregon areas and enter new markets in
Northern California and Nebraska. Revenues have increased from $40 million in
1992 to $509 million for 2001 and production tonnage has grown from 5.5
million tons in 1992, to in excess of 29 million tons in 2001. KMC intends to
continue its disciplined investment approach to achieve profitable growth
through acquisitions.

               While a general slowdown in the national economy during 2001
made it more difficult for KMC to find acquisition opportunities that met
KMC's financial and strategic criteria, from January 1, 2001 through December
31, 2001, KMC expended approximately $16 million and completed two
acquisitions of materials businesses and the acquisition of an aggregate
reserve property in Arizona in connection with its growth strategy. Although
as a part of KMC's growth strategy, KMC evaluates potential acquisitions from
time to time, KMC is not currently a party to any agreements which would be
material to its business, or which would require separate disclosure.


Item 2.  Properties.

               Operations and Properties.  KMC is organized into four
operating divisions: Arizona Operations, Pacific Northwest Operations,
Northern California Operations and Quarries Operations. KMC believes that a
decentralized management structure allows for a quicker reaction to localized
events and a more profitable operation. Each division is responsible for
maintenance and operation of significant investments in fixed plant assets and
a substantial mobile equipment fleet. Each operation also is charged with
customer relations, dispatching of delivery vehicles, quality control,
scheduling of production and the development and maintenance of certain
computer systems.

               KMC is a vertically integrated provider of aggregates, ready-
mix concrete and asphalt products.  KMC operates 60 ready-mix batch plants and
16 asphalt plants at its locations in Arizona, California, Oregon and
Washington. KMC's aggregates operations, consisting of 44 aggregate facilities
and 4 rockeries, are located in Arizona, California, New Mexico, Nebraska,
Utah, Washington and Wyoming. KMC manages a truck fleet of about 1,000
vehicles, 900 of which are owned and 100 of which are either leased on a long-
term basis or managed on a day-to-day rental basis. In 2001, KMC's combined
operations produced and sold in excess of 29 million tons of aggregates
consisting of construction materials, ballast, highway aggregates, roofing
aggregates, concrete block aggregates and landscape rock products. Arizona
Operations also manages a construction service business in the Yuma, Arizona
area.

               KMC's executive management provides its four operating
divisions with strategic planning, corporate development and acquisitions and
operations oversight. KMC also has a centralized administrative staff that
provides labor relations, various accounting functions, legal, tax planning
and compliance, equipment purchasing and equipment maintenance support.

               Reserves.  KMC estimates that its total recoverable aggregates
reserves are in excess of 810 million tons.  Approximately 31 million tons of
these reserves are located at dormant aggregate production facilities.  The
yield from the mining of these reserves is based on an estimate of volume that
can be economically extracted to meet current market and product applications.
KMC's mining plans are developed by experienced mining engineers and operating
personnel using drilling and geological studies in conjunction with mine
planning software. In certain instances, reserve extraction is limited to
phases or yearly amounts. Various properties also have reserves under lease
that have not been included in a mining permit. These reserves have been
excluded from the recoverable reserve estimate.  The estimated recoverable
aggregate reserve figures exclude one dredging permit located in the Pacific
Northwest because it is unlikely the Company will produce from this site prior
to the permit expiration date.

               KMC owns about 468 million tons of aggregates reserves and
leases another 342 million tons of aggregates reserves. KMC's leases usually
require royalty payments based on either revenue derived from the location or
an amount for each ton of materials removed and sold from a site and have
terms ranging from one year to 83 years. Royalty payments range from $0.35 to
$1.45 per ton. Most of KMC's long-term leases also provide an option for the
lease to be renewed.


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               The following table summarizes KMC's principal aggregate
production facilities and estimated reserves at March 1, 2002:
<TABLE>
<S>
<C>               <C>       <C>        <C>          <C>            <C>
                                          Annual                    Years
                                        Production                  Until
                             Type of   (in thousands    Nature      Reserve
                  Product   Facility     of tons)    of Interest   Depletion
                  -------   --------   ------------  -----------   ---------
Portland Oregon/
 Vancouver                  Production
 Washington       Sand and  and                                   Average of
 Area (9 sites)   Gravel(7) Distribution   4,170      5 Leased      21 years
                  Gray
                  Basalt(2)                           4  Owned
Yolo County,       Sand and  Production
  California       Gravel    and
                             Distribution   1,000         Owned      25 years
Milford, Utah      Quartz    Production
                   Latite    and
                             Distribution     485        Leased      21 years
Little Lake,       Scoria    Production
  California                 and
                             Distribution      90        Leased       15 years
Granite Canyon,    Granite   Production
  Wyoming                    and
                             Distribution   2,735        Leased       32 years
Des Moines,        Scoria    Production
  New Mexico (2                and
   sites)                    Distribution     125        Leased       28 years
Guernsey, Wyoming  Dolomite, Production
 (3 sites)         Limestone and                                    Average of
                   and       Distribution     350      1 Leased      over 100
                   Quartz                              2  Owned        years
Phoenix, Arizona  Sand and  Production
  Area (12 sites)  Gravel    and                                    Average of
                            Distribution    8,750      9 Leased       24 years
                                                       3 Owned
Tucson, Arizona   Sand and  Production
  Area (2 sites)  Gravel    and             1,310        Owned      Average of
                            Distribution                              30 years
Nogales, Arizona  Sand and  Production
                  Gravel    and
                            Distribution      160       Leased         8 years
Sierra Vista,     Sand and  Production
  Arizona         Gravel    and
                            Distribution      225       Leased         9 years
Flagstaff,Arizona Sand and  Production
  (2 sites)       Gravel    and                                     Average of
                            Distribution      515       Leased        27 years
Casa Grande,      Sand and  Production
  Arizona         Gravel    and
                            Distribution      760       Leased        17 years
Winkelman,Arizona Gypsum    Production         85        Owned  Over 100 years
Campe Verde,      Sand and  Production
  Arizona         Gravel    and
                            Distribution      435        Owned         5 years
Globe, Arizona    Sand and  Production
                  Gravel    and
                            Distribution      170        Owned        18 years
Yuma, Arizona     Sand and  Production
  (2 sites)       Gravel    and                                     Average of
                            Distribution      670       Leased        19 years
Bullhead City,    Sand and  Production
  Arizona (2      Gravel    and                                     Average of
    sites)                  Distribution      290       Leased        28 years
Mammoth, Arizona  Sand and  Production
                  Gravel    and
                            Distribution       40       Leased        93 years
Prescott, Arizona Sand and  Production                              Average of
  (2 sites)       Gravel    and                                      over 100
                            Distribution       60       Leased        years
Fort Calhoun,     Limestone Production
  Nebraska (2               and                                     Average of
   sites)                   Distribution    1,700     1 Owned         86 years
                                                      1 Leased
</TABLE>

               Estimated reserves are the probable total recoverable reserves
that are at each quarry site. The reserve figures include only saleable
tonnage and thus exclude waste material that is generated in the crushing and
processing phases of the operation.  "Annual Production" is the Company's
estimate of future yearly production occurring at each site based on
management's judgment given historical trends, mining plans and demand
estimates.  Overall reserve estimates are determined by using a combination of
drill holes, quarry mining plans and historical averages. Sites may have
leases that expire prior to the exhaustion of estimated reserves. The reserve
life anticipates that some leases will be renewed to allow sufficient time to
fully recover this material. The reserve estimate numbers for the property in
Yolo County, California and for a dredging permit in the Pacific Northwest
assume that the sites will be limited to the current permits and that the
permits will not be extended past their expiration dates. The figures used in
the reserve data and remaining life may require revisions due to changes in
customer requirements and unknown geological occurrences. The years until
reserve depletion is calculated as total saleable reserves at a location
divided by annual production. Reserves from dormant facilities are included in
determining Years Until Reserve Depletion as the Company expects to activate
these facilities as other currently active sites become depleted.  Actual
useful lives will be subject to, among other things, fluctuations in customer
demand, customer specifications, geological conditions and changes in mining
plans. For areas with multiple sites, the Years Until Reserve Depletion figure
equals total reserves in that area divided by Annual Production.
Consequently, the life of any specific site in a city or area with multiple
sites may be exhausted prior to or extend beyond the average life for the
sites in that city or area.

Item 3.  Legal Proceedings.  From time to time, the Company has been involved
in various legal proceedings relating to its operations and properties, all of
which the Company believes are routine in nature and incidental to the conduct
of its business. Although the ultimate legal and financial liability
associated with such proceedings cannot be estimated with certainty, the
Company believes, based on its examination of such matters, that none of these
proceedings, if determined adversely, would have a material adverse effect on
the Company's business, financial position, results of operations or cash
flows.

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

         No matters were submitted to a vote of KMC's shareholders during the
three months ended December 31, 2001.

         Executive Officers of the Registrant.

        The table below shows information as of March 1, 2002, 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.

<TABLE>
<S>

Name                  Business Experience                                 Age
----                  -------------------                                 ---
<C>                   <C>                                                 <C>
Christopher J. Murphy  Mr. Murphy has been a director and the                47
                      Chief Executive Officer of KMC since January 1,
                      2000.  Mr. Murphy has been the President of KMC
                      since February 2, 1999.  Mr. Murphy was the
                      President of Kiewit Mining Group Inc., a PKS
                      subsidiary, from July 1996 through September
                      2000 and was Vice President of Kiewit Mining
                      Group from October 1995 to July 1996.  Mr. Murphy
                      has been the President of United Metro Materials
                      Inc., a subsidiary of KMC, since July 1996, and
                      was Senior Vice President of United Metro Materials
                      from August 1994 to July 1996.  Mr. Murphy is the
                      Chairman of the Executive Committee of KMC.
Donald E. Bowman      Mr. Bowman has been Vice President and Chief           53
                      Financial Officer of KMC since April 24, 2000.
                      Mr. Bowman was President, Eastern Region,
                      Construction Materials of Lafarge Corporation
                      from January 1998 to March 1999.  Mr. Bowman was
                      President and Chief Executive Officer of Redland
                      Genstar, Inc., from January 1996 to January 1998
                      and was Executive Vice President of Redland Genstar
                      from January 1995 to January 1996.
Mark E. Belmont       Mr. Belmont has been General Counsel and Secretary    48
                      of KMC since January 1, 2000 and a Vice President of
                      KMC since February 2, 1999.  Mr. Belmont was Senior
                      Corporate Counsel of PKS for more than five years
                      prior to January 1, 2000.
John J. Shaffer       Mr. Shaffer has been a Vice President of KMC since    51
                      January 1, 2000.  Mr. Shaffer has been Vice
                      President of Pacific Rock Products, L.L.C., a
                      subsidiary of KMC, since February 1, 1996.
                      Mr. Shaffer was Vice President of Pacific Rock
                      Products, Inc. for more than five years prior
                      to February 1, 1996.
Daniel W. Speck       Mr. Speck has been a Vice President of KMC since      46
                      January 1, 2000.  Mr. Speck has been Vice President
                      of United Metro Materials since April 1997.
                      Mr. Speck was the manager of Walnut Creek Mining
                      Company from March 1993 to March 1997.
Rick W. Thomas        Mr. Thomas has been a Vice President of KMC since     45
                      October 20, 2000.  Mr. Thomas was Director of
                      Business Development of KMC from January 1999 to
                      October 2000. From 1997 to 1998, Mr. Thomas held
                      a senior operations position with Kiewit Mining
                      Group. From 1996 to 1997, Mr. Thomas was Vice
                      President - Engineering of Anker Energy Corporation.
                      Mr. Thomas was Vice President - Operations of Great
                      Western Coal Company for more than five years prior
                      to 1996.
Todd A. Freyer         Mr. Freyer has been Controller of KMC since           41
                      April 1, 2000 and Treasurer since February 2, 1999.
                      Mr. Freyer was Accounting Manager of Kiewit Mining
                      Group from April 1999 through September 2000 and was
                      Accounting Supervisor of Kiewit Mining Group for more
                      than five years prior to April 1999.
</TABLE>

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                                   PART II

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

      Market Information. As of December 31, 2001, shares of KMC's common
stock ("Common Stock") are not listed on any national securities exchange or
quoted on the NASDAQ National Market and there is no established public
trading market for the Common Stock.

      Transfer Restrictions.  Holders of Common Stock are prohibited from
transferring the Common Stock in any manner except in a sale to KMC and, with
prior approval by the KMC Board of Directors, to certain authorized
transferees of the holders. Those authorized transferees consist of
fiduciaries for the benefit of the holders and members of the immediate
families of the holders, corporations wholly owned by holders or holders and
their spouses and/or children, fiduciaries for the benefit of such
corporations and charities and fiduciaries for charities designated by any
such persons. Upon the death of a KMC stockholder, the shares of Common Stock
owned by the deceased stockholder would be permitted to be transferred to his
or her estate, provided that the shares transferred to the transferee would be
subject to the same transfer restrictions. There is no restriction on the
maximum amount of Common Stock that may be owned by any individual or entity.

      Holders of  Common Stock are permitted to pledge the  Common Stock for
loans in connection with the ownership of the  Common Stock.

      In the event that the KMC Board of Directors decides to conduct an
initial public offering of the Common Stock, officers and directors of KMC and
stockholders owning one percent or more of the Common Stock outstanding at the
time of the offering will not be permitted to sell or otherwise transfer any
shares held by them for a period of up to one hundred eighty days following
the offering. In addition to any officers and directors who may be subject to
the 180-day transfer restriction following an initial public offering, KMC
estimates that there may be up to eight additional stockholders who may own 1%
or more of Common Stock and thus be subject to this transfer restriction.

      All transfer restrictions on  the Common Stock may be terminated by the
KMC Board of Directors at any time.

      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 sold only to the Company at a formula price
based on the year-end book value of the Company.  The Company is generally
required to repurchase Common Stock for cash upon stockholder demand.

      Formula Price. The formula price of the Common Stock is determined by
dividing the sum of total redeemable common stock plus the face amount of
convertible debentures by the total number of issued and outstanding shares of
Common Stock plus the total number of shares reserved for the conversion of
outstanding convertible debentures at the end of the previous year and
deducting from the quotient the amount of declared dividends during the
current year.  At December 31, 2001, the formula price of the Common Stock was
$8.77 per share.  At December 31, 2000, the formula price of the Common Stock
was $7.86 per share.  At September 30, 2000, the formula price of the Common
Stock was $7.14 per share.

      Stockholders. On March 27, 2002 the Company had the following numbers of
stockholders and outstanding shares:

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

      Common Stock           1,491              36,077,833

      Dividends and Prices. The Company does not currently intend to pay cash
dividends on the Common Stock.


                                    7
---------------------------------------------------------------------------

Item 6.  Selected Financial Data.

      The following table presents selected historical financial data of the
Company as of and for the fiscal years ended 1997 through 2001, and is derived
from the Company's historical consolidated financial statements and the notes
to those financial statements.  The Company was a subsidiary of PKS prior to
September 30, 2000.

                                            Fiscal Year Ended
                           2001        2000      1999      1998     1997
---------------------------------------------------------------------------
                               (in thousands, except per share data)

Results of Operations:
  Revenue                $ 508,819 $ 488,509 $ 437,458 $ 333,060 $ 277,309
  Net earnings           $  35,085 $  27,052 $  25,828 $  15,378 $  16,542

Per Common Share:
  Net earnings
    Basic                $     .97 $     .74 $     .71 $     .42 $     .46
    Diluted              $     .94 $     .74 $     .71 $     .42 $     .46
  Dividends              $       - $       - $       - $       - $     .11
  Formula price (1)      $    8.77 $    7.86
  Book value             $    8.86 $    7.90 $    5.77 $    3.83 $    3.35

Financial Position:
  Total assets           $ 415,649 $ 376,243 $ 277,991 $ 207,054 $ 181,699
  Current portion of
   long-term debt        $   1,127 $   1,112 $     562 $     740 $     387
  Long-term debt,
   net of current
   portion               $   2,534 $   3,779 $   3,753 $     761 $   1,492

  Redeemable Common
   Stock (2)             $ 320,964 $ 288,011 $ 209,733 $ 139,287 $ 121,631
-------------------------------------------------------------------

(1)   Pursuant to the Certificate, the formula price calculation is computed
      annually at the end of the fiscal year as described previously in Item
      5.  All share transactions commencing during the subsequent year are
      valued at the previous fiscal year end formula price.  There was not a
      separate calculation of formula price for the Company while it was
      wholly owned by PKS.  On September 30, 2000, the formula price of the
      Common Stock was $7.14 per share.

(2)   Holders of Common Stock are prohibited from transferring the Common
       Stock in any manner except in a sale to the Company and to certain
       authorized transferees of the holders. The Company is generally
       required to purchase all Common Stock at the formula price. The
       aggregate redemption value of Common Stock at December 31, 2001 and
       December 31, 2000 was $317,622 and $286,603, respectively.

                                    8
---------------------------------------------------------------------------
Item 7.  Management's Discussion and Analysis of Financial Condition and
Results of Operations

                   Results of Operations - 2001 vs. 2000

      Revenue.  Revenue increased $20 million in 2001 to $509 million as
compared to $489 million in 2000.   Revenue from Arizona Operations increased
$16 million due to higher average selling prices for hot-mix asphalt and
ready-mix concrete products.  Revenues for the operating division also
benefited from a 5% increase in unit sales of hot-mix asphalt products.  These
increases were partially offset by a 3% decrease in ready-mix concrete sales
in 2001 when compared to 2000.  Revenue from the Pacific Northwest Operations
declined $7 million between the two periods resulting from a 9% decline in
aggregate unit volumes, an 11% decline in hot-mix asphalt product sales, and a
7% decline in ready-mix concrete sales.  Average selling prices for aggregate
also declined for 2001 when compared to 2000.  The decrease in revenue was
mitigated by slightly higher average selling prices for hot-mix asphalt and
ready-mix concrete products.  Other Operations experienced an $11 million
increase as revenue from 2000 acquisitions compensated for a 29% decline in
unit volumes from operations owned prior to 2000.

      Gross Profit.  Gross profit margins increased to 15% in 2001 as compared
to 14% in 2000.  Gross profits for Arizona Operations increased largely due to
improved hot-mix asphalt margins as a result of higher average selling prices.
Gross profit margins for the Pacific Northwest Operations declined as a result
of lower unit volumes and lower average selling prices for aggregate products.
Gross profit margins for Other Operations improved as the higher overall
margins generated from 2000 acquisitions offset slightly lower margins
achieved by operations owned prior to 2000.

      General and Administrative.  General and administrative expenses
increased $1 million in 2001 when compared to 2000.   Arizona Operations was
unchanged for the two periods as cost efficiency measures offset the
additional costs necessary to support higher asphalt unit volumes.  Pacific
Northwest Operations experienced a slight decrease due to the reduction in
activities necessary to support the lower unit volumes.  Other Operations
expenses increased to support an expanded operating area as a result of an
acquisition in the second half of 2000.  Corporate Operations increased due to
ongoing costs related to becoming an independent company in September 2000.

      Gain on Sale of Property, Plant and Equipment.  Gains from the sale of
property, plant and equipment increased $3 million in 2001 when compared to
2000, due to gains recognized on the sale of land in the Arizona and Pacific
Northwest Operations.

      Other Income and Expense.  Other income decreased $1 million in 2001
when compared to 2000.  The decrease is attributable to the recognition of
operating results from a 2001 acquisition of a non-materials related
operation, the write-off of a gain contingent upon the successful outcome of a
court appeal and an overall decrease in interest rates earned on investments.

      Income Tax Expense.  Income taxes differ from the federal statutory rate
primarily because of state income taxes and percentage depletion.  The
effective tax rates were 36.5% for 2001 and 40.8% for 2000.

                       Results of Operations - 2000 vs. 1999

      The Board of Directors of PKS decided to separate its construction and
materials businesses into two separate, independent companies in a spin-off
that was intended to be tax-free for U.S. federal income tax purposes.  To
effectuate the transaction, the Board of Directors of PKS declared a dividend
payable to the holders of record of PKS common stock as of September 15, 2000,
based upon a ratio of one share of Common Stock for every share of PKS common
stock owned on the record date.  Effective September 30, 2000, all of the
outstanding shares of Common Stock were distributed to PKS stockholders.
Following the Spin-off, the Company began operations as an independent
company.  Prior to September 30, 2000, the financial statements reflect the
results of operations, financial position and cash flows of the businesses
transferred to the Company from PKS as they operated within PKS.  As a result,
the financial statements of the Company prior to September 30, 2000 have been
carved out from the financial statements of PKS using the historical results
of operations and historical basis of the assets and liabilities of such
businesses.  The Company's statements of earnings prior to September 30, 2000,
include all of the related costs of doing business, including charges for the
use of facilities and for employee benefits, and include an allocation of
certain general corporate expenses of PKS which were not directly related to

                                    9
---------------------------------------------------------------------------

these businesses, including costs for information technology, finance, legal
and corporate executive.  Management believes these allocations were made on a
reasonable basis.  The financial information for periods prior to September
30, 2000 included herein, however, may not necessarily be indicative of the
results of operations, financial position and cash flows of the Company in the
future or what the results of operations, financial position and cash flows
would have been had the Company been a separate, independent company during
the periods presented.

      Revenue.  Revenues increased $52 million in 2000 to $489 million as
compared to $437 million for the same period in 1999.   Revenue from Arizona
Operations increased $25 million as this operating division experienced higher
unit sales of aggregates and ready-mix concrete.   This increase was offset by
a 20% decline in unit sales of hot-mix asphalt as the operating division
became more selective in supplying the market in an effort to improve gross
profit margins for hot-mix asphalt.  Revenue from operations located in the
Pacific Northwest increased $5 million in 2000 compared to 1999.  However, had
the Company owned 100% of Pacific Rock Products, L.L.C. and Pacific Rock
Products Trucking L.L.C. (formerly River City Machinery L.L.C.) (collectively
"Pacific Rock") for all of 1999, revenue from Pacific Northwest Operations
would have shown a $2 million decrease.  This decline was attributable to 23%
lower unit sales of aggregates as the demand for those products softened in
2000.  Partially offsetting the aggregate revenue decline was an increase in
hot-mix asphalt sales resulting from an additional plant.  Other Operations
revenue increased $22 million primarily from revenue produced by acquisitions
occurring in 2000.

      Gross Profit.  Gross profit margins for the Company remained consistent
at approximately 14% for the two periods.  Gross profits for Arizona
Operations improved slightly as the operating division became more selective
in supplying hot-mix asphalt products to the market.  Gross profit for Pacific
Northwest Operations declined 50% in 2000 compared to 1999.  The decrease in
sales of aggregates, higher asphalt oil costs and higher fuel expenses were
responsible for this decrease.  Gross profit margins from Other Operations
also improved primarily from the acquisitions occurring in 2000.

      General and Administrative Expenses.  General and administrative
expenses increased $2 million in 2000 when compared to the same period of
1999.  Arizona Operations expenses decreased by approximately $1 million due
to the implementation of cost efficiency measures.  Pacific Northwest
Operations remained relatively constant during this period.  Other Operations
expenses increased $1.5 million due to the acquisition of Solano Concrete Co.,
Inc.  Corporate Operations increased approximately $1.5 million due to
additional ongoing costs related to becoming an independent company.

      Other Income and Expense. Other income increased $.5 million  to $3.7
million  in 2000 from $3.2 million in the same period of 1999.  The increase
was primarily attributable to an increase in interest income due to higher
overall interest rates.

      Income Tax Expense.  Income taxes differ from the federal statutory rate
primarily because of state income taxes and percentage depletion.  The
effective tax rates were 40.8% for 2000 and 37.7% for 1999.  The increase in
the provision for taxes in 2000 was largely due to state and local income
taxes.

            Liquidity and Financial Condition - December 31, 2001

            Cash and cash equivalents increased $49 million to $117 million at
December 31, 2001 from $68 million at December 31, 2000.  The increase
reflects net cash provided by operations of $69 million and by financing
activities of $3 million offset by net cash used in investing activities of
$23 million.

            Net cash provided by operations amounted to $69 million compared
to $45 million for the same period in 2000.  The $24 million increase was
mainly due to higher net income of $8 million and a decrease in accounts
receivable of $28 million.  These sources of cash were partially offset by a
decrease in accounts payable due to timing of vendor payments and by changes
in other working capital.

            Net cash used in investing activities in 2001 decreased by $84
million to $23 million as compared to 2000.  A $62 million decrease in
investments and acquisitions, $16 million decrease in capital expenditures and
an increase in proceeds from sales of property, plant and equipment of $6
million comprised the decreases in cash used in investing activities.

                                    10
---------------------------------------------------------------------------

            Net cash provided by financing activities decreased by $55 million
to $3 million as compared to 2000.  The decrease was mainly due to the receipt
of a final capital contribution from former parent of $50 million in 2000,
repurchases of common stock of $3 million and additional payments on long-term
debt of $2 million.

            The Company believes that its current cash position together with
anticipated cash flows from operations will be sufficient for the working
capital and equipment replacement requirements of the Company for the next
twelve months.  The Company does not have any established credit facilities.
At December 31, 2001, the Company had $19 million of notes and convertible
debentures payable.  Further, the Company does not currently intend to pay any
cash dividends.

            The Company intends to pursue a business plan to grow through
acquisitions that will require capital that is in addition to ongoing
operational requirements.  While historically the Company has received
contributions from PKS to fund a portion of acquisitions, the Company believes
that cash on hand at the time of the Spin-off, cash generated by operations,
and the ability to borrow funds will allow the Company to make investments in
connection with future acquisitions.  Ultimate growth strategy capital
requirements will largely depend on the number of acquisition candidates, the
cost of the acquisitions, and the level of success the Company has in
completing these transactions.  Should the Company be unable to obtain any
necessary funds from borrowings on terms deemed appropriate, the Company would
be limited in its ability to fully execute its growth strategy.  While the
Company believes its growth strategy to be important in enhancing shareholder
value, the Company does not believe that the inability to fully pursue it
would have a material adverse impact on current operations, financial
condition or liquidity.

                         Critical Accounting Policies

            The Company has prepared its financial statements in conformity
with accounting principles generally accepted in the United States, and these
statements necessarily include some amounts that are based on informed
judgments and estimates of management.  The Company's significant accounting
policies are discussed in Note 3 of Notes to Consolidated Financial
Statements.  The Company's critical accounting policies are subject to
judgments and uncertainties which affect the application of such policies.  As
discussed below the Company's financial position or results of operations may
be materially different when reported under different conditions or when using
different assumptions in the application of such policies.  In the event
estimates or assumptions prove to be different from actual amounts,
adjustments are made in subsequent periods to reflect more current
information.  The Company's critical accounting policies include:

            Impairment of long-lived assets and intangibles.  The Company
reviews the carrying values of its long-lived assets, including goodwill and
identifiable intangibles, whenever events or changes in circumstances indicate
that such carrying values may not be recoverable.  Unforeseen events and
changes in circumstances and market conditions and material differences in the
value of intangible assets due to changes in estimates of future cash flows
could negatively affect the fair value of the Company's assets and result in
an impairment charge.

            Accrued insurance cost.  The Company maintains insurance coverage
for various aspects of its business and operations.  The Company has elected,
however, to retain a portion of losses that occur through the use of various
deductibles, limits and retentions under its insurance programs.  The Company
accrues for the estimated ultimate liability for incurred losses.
Consequently, the actual ultimate liability could differ from these estimated
liabilities.

            Purchase accounting.  The Company accounts for its acquisitions
under the purchase method of accounting and accordingly, the acquired assets
and liabilities assumed are recorded at their respective fair values.  The
recorded values of assets and liabilities are based on third-party estimates
and valuations when available.  The remaining values are based on management's
judgments and estimates, and accordingly, the Company's financial position or
results of operations may be affected by changes in estimates and judgments.

            Revenue recognition.  Revenue is recognized when the earnings
process is complete, as evidenced by an agreement between the customer and the
Company, when delivery has occurred or services have been rendered, when the
fee is fixed or determinable and when collection is probable.  The Company's


                                    11
---------------------------------------------------------------------------

revenue recognition policy is discussed in Note 3 of Notes to Consolidated
Financial Statements.  The recognition of revenue in conformity with
accounting principles generally accepted in the United States requires the
Company to make estimates and assumptions that affect the reported amounts of
revenue.  Estimates related to the recognition of revenue include the
allowance for doubtful accounts.  The amount is determined based on
management's judgments of the ability to collect outstanding receivables
considering market conditions at each operating segment throughout the year.
As additional information becomes available, or actual amounts are
determinable, the recorded estimates are revised.  Consequently, operating
results can be affected by revisions to prior accounting estimates.

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.  The Company may be subject to market risks arising from interest rate
fluctuations if the Company borrows funds to make investments in future
acquisitions.

      In addition, the Company became a limited partner in a private
investment fund limited partnership (the "Partnership")as discussed in Note
18 of Notes to Consolidated Financial Statements.  The investment objective of
the Partnership is to generate current income and capital appreciation while
minimizing the potential for loss of principal.  The Partnership may use a
variety of investment strategies with the principle one being merger
arbitrage.  In general, a merger arbitrage strategy involves purchasing the
stock of a company being acquired or merged with another company and selling
short the stock of the acquiring company.  A particular merger arbitrage
transaction will either derive a profit or a loss depending on the price
differential between the price of the securities when purchased and the price
ultimately realized when the transaction is completed.  The primary risk is
that a loss could result if the transaction is not completed.  The Partnership
invests in a diversified portfolio of these types of transactions to minimize
risk of loss.

                                    12
---------------------------------------------------------------------------

Item 8.  Financial Statements and Supplementary Data.


                         Independent Auditors' Report
                         ----------------------------

The Board of Directors and Stockholders
Kiewit Materials Company:

We have audited the accompanying consolidated balance sheet of Kiewit
Materials Company and subsidiaries as of December 31, 2001, and the related
consolidated statements of earnings, changes in redeemable stock and
comprehensive income (loss), and cash flows for the year then ended.  In
connection with our audit of the consolidated financial statements, we also
audited the financial statement schedule listed in the Index at Item 14(a) as
of December 31, 2001, and for the year then ended.  These consolidated
financial statements and financial statement schedule are the responsibility
of the Company's management.  Our responsibility is to express an opinion on
these consolidated financial statements and financial statement schedule based
on our audit.

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

In our opinion, the 2001 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Kiewit
Materials Company and subsidiaries as of December 31, 2001, and the results of
their operations and their cash flows for the year then ended, in conformity
with accounting principles generally accepted in the United States of America.
Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as
a whole, present fairly, in all material respects, the information set forth
therein.

KPMG LLP

/s/ KPMG LLP
---------------
Omaha, Nebraska
March 8, 2002


                                    13
---------------------------------------------------------------------------


                     Report of Independent Accountants
                     ---------------------------------


The Board of Directors and Stockholders
Kiewit Materials Company


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 Kiewit Materials Company and subsidiaries
at December 31, 2000, and the consolidated results of their operations and
their cash flows for each of the two fiscal years in the period ended December
31, 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 the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
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.



/s/PricewaterhouseCoopers LLP
-----------------------------
Omaha, Nebraska
March 5, 2001


                                    14
---------------------------------------------------------------------------

                  KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                         Consolidated Balance Sheets
                    December 31, 2001 and December 31, 2000


(in thousands)                                   2001              2000
---------------------------------------------------------------------------

Assets

Current assets:
  Cash and cash equivalents                $  117,218       $    68,468
  Receivables, less allowance of
     $1,083 and $1,187                         51,534            67,793
  Inventories                                  13,829            14,126
  Deferred income taxes                         3,622             3,625
  Current income taxes                            435                 -
  Other                                         5,265             4,068
                                          -----------        ----------
Total current assets                          191,903           158,080
                                          -----------        ----------

Property, plant and equipment, at cost        272,825           250,987
  Less accumulated depreciation
       and depletion                         (126,942)         (111,982)
                                          -----------        ----------
Net property, plant and equipment             145,883           139,005
                                          -----------        ----------

Goodwill, net of accumulated amortization
of $10,008 and $7,413                          57,476            58,924
                                          -----------        ----------

Intangible, net of accumulated
amortization of $2,053 and $1,363 and
other assets                                   20,387            20,234
                                          -----------        ----------

Total assets                              $   415,649         $  376,243
                                          ===========         ==========
------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.

                                    15
---------------------------------------------------------------------------

                  KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                         Consolidated Balance Sheets
                    December 31, 2001 and December 31, 2000



(in thousands, except share data)                   2001              2000
---------------------------------------------------------------------------

Liabilities and Redeemable Common Stock

Current liabilities:
  Accounts payable                             $  37,101         $  41,540
  Current portion of long-term debt                1,127             1,112
  Accrued payroll and payroll taxes                8,770             7,716
  Accrued insurance costs                          6,103             5,293
  Current income taxes                                 -             1,964
  Other                                            4,449             4,349
                                               ---------         ---------
Total current liabilities                         57,550            61,974

Long-term debt, less current portion               2,534             3,779
Convertible debentures                            15,762             8,075
Deferred income taxes                             16,495            12,528
Other liabilities                                  1,111               789
Minority interest                                  1,233             1,087
                                               ---------         ---------
Total liabilities                                 94,685            88,232
                                               ---------         ---------

Preferred stock, par $.01; 10 million
   shares authorized, no shares issued                 -                 -

Redeemable common stock ($317,622 and $286,603 aggregate redemption value):
  Common stock, $.01 par value,
   100 million shares authorized
   36,216,902 and 36,463,482  issued
   and outstanding                                   362               365
   Additional paid-in capital                    175,555           177,490
   Accumulated other comprehensive loss             (194)                -
   Retained earnings                             145,241           110,156
                                               ---------         ---------
Total redeemable common stock                    320,964           288,011
                                               ---------         ---------
Total liabilities and redeemable common stock  $ 415,649         $ 376,243
                                               =========         =========
---------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.

                                    16
---------------------------------------------------------------------------

                  KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                         Consolidated Statements of Earnings
                    For the three fiscal years ended December 31, 2001


(in thousands, except per share data)             2001       2000       1999
------------------------------------------------------------------- --------

Revenue                                      $ 508,819  $ 473,458  $ 427,046
Revenue from affiliates                              -     15,051     10,412
                                             ---------  ---------  ---------
Total revenue                                  508,819    488,509    437,458

Cost of revenue                               (408,070)  (398,855)  (358,444)
Depreciation, depletion and amortization       (23,367)   (21,819)   (16,970)
                                             ---------  ---------  ---------
Gross profit                                    77,382     67,835     62,044

General and administrative expenses            (27,968)   (26,642)   (24,669)
Gain on sale of property, plant and equipment    3,555        960        899
                                             ---------  ---------  ---------

Operating earnings                              52,969     42,153     38,274
                                             ---------  ---------  ---------

Other income (expense):
   Investment income                             4,496      4,785      4,585
   Equity earnings                                   -          -        266
   Interest expense                             (1,142)    (1,509)    (1,853)
   Other, net                                     (844)       361        157
                                             ---------  ---------  ---------
   Total other income                            2,510      3,637      3,155
                                             ---------  ---------  ---------

Earnings before income taxes and
   minority interest                            55,479     45,790     41,429

Minority interest in net earnings of
   subsidiaries, net of tax                       (153)       (58)        92
Provision for income taxes                     (20,241)   (18,680)   (15,693)
                                             ---------  ---------  ---------

Net earnings                                 $  35,085  $  27,052  $  25,828
                                             =========  =========  =========

Net earnings per share:
  Basic                                      $     .97  $     .74  $     .71
                                             =========  =========  =========
  Diluted                                    $     .94  $     .74  $     .71
                                             =========  =========  =========

---------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.
                                    17
---------------------------------------------------------------------------

                  KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

       Consolidated Statements of Changes in Redeemable Common Stock and
                         Comprehensive Income (Loss)
              For the three fiscal years ended December 31, 2001
<TABLE>
<S>
<CAPTION>
                                                   Accumulated                 Total
                            Redeemable Additional   Other                   Redeemable
(in thousand,                 Common    Paid-in   Comprehensive   Retained    Common
 except per share data)        Stock     Capital   Income (Loss)   Earnings    Stock
-------------------------------------------------------------------------------------
<C>                         <C>         <C>         <C>            <C>       <C>
Balance at December 26, 1998 $      -  $  82,466  $   (456)    $ 57,277 $139,287

Dividends                        -          -         -           (1)      (1)
Contribution from former
   parent                        -     44,161         -            -   44,161

Comprehensive income:
  Net earnings                   -          -         -       25,828   25,828
  Change in unrealized
    holding loss, net of
    tax                          -          -       (25)           -      (25)
  Minimum pension liability
    adjustment                   -          -       482            -      482
                                                                       ------
Total comprehensive income                                             26,285
                           -------   --------   -------      -------   ------

Balance at December 25,
   1999                        -   126,627          1     83,104  209,732

Contribution from former parent  -    50,374           -           -  50,374
Stock split                    363      (363)          -           -        -
Issuance of common stock         2     1,135           -           -    1,137
Redemptions of common stock      -      (283)          -           -     (283)

Comprehensive income:
  Net earnings                   -         -           -      27,052   27,052
  Change in unrealized holding
    loss, net of tax             -         -          (1)          -       (1)
  Minimum pension liability
    Adjustment                   -         -           -           -        -
                                                                       ------
Total comprehensive income                                             27,051
                           -------   --------   -------      -------   ------

Balance at December 31,
   2000                        365    177,490         -      110,156  288,011

Issuance of common stock         1      1,317         -            -    1,318
Redemptions of common stock     (4)    (3,252)        -            -   (3,256)

Comprehensive income:
  Net earnings                   -          -         -       35,085   35,085
  Minimum pension liability
   adjustment                    -          -      (194)           -     (194)
                                                                       ------
Total comprehensive income                                             34,891
                           -------   --------   -------      -------   ------
Balance at December 31,
   2001                    $   362   $175,555   $  (194)   $ 145,241 $320,964
                           =======   ========   =======    ========= ========
</TABLE>
------------------------------------------------------------
See accompanying notes to consolidated financial statements.

                                    18
---------------------------------------------------------------------------
                  KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                    Consolidated Statements of Cash Flows
              For the three fiscal years ended December 31, 2001

(in thousands)                               2001        2000        1999
----------------------------------------------------------------------------

Cash flows from operations:
  Net earnings                              $  35,085  $  27,052   $  25,828
  Adjustments to reconcile net earnings to
    net cash provided by operations:
      Depreciation, depletion
          and amortization                     23,367     21,819      16,970
      Gain on sale of property, plant and
         equipment                             (3,555)      (960)       (899)
      Equity loss, net                              -          -         129
      Minority interest                           153         58          92
      Deferred income taxes                     3,988      4,388         748
      Change in working capital items:
      Receivables                              15,979    (11,997)     (2,168)
      Inventories                                 852       (242)     (2,004)
      Other current assets                     (1,831)    (1,077)        931
      Accounts payable                         (4,488)    16,857     (14,883)
      Accrued payroll and payroll taxes           614         52         985
      Accrued insurance                           811     (1,484)      1,150
      Income taxes payable                     (2,399)    (9,852)      6,257
      Other liabilities                           494        707      (1,910)
                                            ---------   --------    --------
Net cash provided by operations                69,070     45,321      31,226
                                            ---------   --------    --------

Cash flows from investing activities:
  Proceeds from sales and maturities of
     marketable securities                          -      2,500           -
  Additions to notes receivable                     -     (2,400)          -
  Proceeds from sale of property, plant and
     equipment                                  7,762      1,947       2,676
  Capital expenditures                        (14,595)   (30,710)    (19,458)
  Investments and acquisitions, net of
     cash acquired                            (16,188)   (78,675)    (36,152)
                                            ---------   --------    --------
Net cash used in investing activities         (23,021)  (107,338)    (52,934)
                                            ---------   --------    --------

Cash flows from financing activities:
  Payments on long-term debt                   (3,103)    (1,186)    (15,759)
  Issuances of convertible debentures           7,798      8,075           -
  Redemptions of convertible debentures           (56)         -           -
  Issuances of common stock                     1,318      1,137           -
  Repurchases of common stock                  (3,256)      (283)          -
  Contributions from former parent                  -     50,374      44,161
                                            ---------   --------    --------
Net cash provided by financing activities       2,701     58,117      28,402
                                            ---------   --------    --------
Net increase (decrease) in cash and cash
   equivalents                                 48,750     (3,900)      6,694
Cash and cash equivalents at beginning of year 68,468     72,368      65,674
                                            ---------   --------    --------
Cash and cash equivalents at end of year    $ 117,218   $ 68,468    $ 72,368
                                            =========   ========    ========
Supplemental disclosures of cash flow
 information:
  Taxes paid                                $  18,103   $ 23,243    $  7,466
                                            =========   ========    ========
  Interest paid                             $     870   $  1,403    $  1,849
                                            =========   ========    ========
------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.



                                    19
---------------------------------------------------------------------------


                   KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                    (in thousands, except per share data)

1.    Organization:

      Kiewit Materials Company ("KMC") was formed on February 2, 1999 as a
      wholly owned subsidiary of Peter Kiewit Sons', Inc. ("PKS").  The
      consolidated financial statements include the accounts of KMC and its
      subsidiaries (collectively, the "Company").  KMC's subsidiaries
      represent several affiliated operating entities under common ownership,
      each of which is engaged in an aspect of the materials business, that
      were combined (the "Combination") on March 1, 1999 through a series of
      non-monetary contributions from PKS.  The Combination has been accounted
      for at historical cost in a manner similar to a pooling of interests.
      On September 30, 2000, KMC became an independent company when PKS spun
      off its materials businesses in a tax free transaction (the "Spin-
      off").  One share of the Company's Common Stock was issued for every
      share of PKS common stock outstanding to the stockholders of record on
      September 15, 2000.

2.    Basis of Presentation:

      Subsequent to the Spin-off, the consolidated financial statements
      include the accounts and operations of the Company on a stand-alone
      basis.  PKS and the Company have entered into a number of agreements to
      facilitate the transition of the Company to an independent business
      enterprise.

      Prior to the Spin-off, the consolidated financial statements reflect the
      assets, liabilities, revenues and expenses that were directly related to
      the Company as they were operated within PKS.  Where assets and
      liabilities were not specifically identifiable to any particular
      business of PKS, only those assets and liabilities transferred to the
      Company are included in the Company's consolidated balance sheets.
      Regardless of the allocation of these assets and liabilities, however,
      the Company's consolidated statements of earnings include all of the
      related costs of doing business including an allocation of certain
      general corporate expenses of PKS which were not directly related to the
      Company including costs for information technology, finance, legal and
      corporate executive.  These allocations were based on a variety of
      factors including, for example, personnel, space, time and effort, and
      sales volume.  Management believes these allocations were made on a
      reasonable basis.

      The financial information included herein for periods prior to the Spin-
      off may not necessarily be indicative of the financial position, results
      of operations or cash flows of the Company if it had been a separate,
      independent company during the periods prior to the Spin-off.

3.    Significant Accounting Policies:

      Principles of Consolidation:

      Commencing with the Spin-off, the consolidated financial statements
      include the accounts of KMC and its wholly-owned subsidiaries.  Prior to
      the Spin-off, the consolidated financial statements include the accounts
      of the Company as described in Note 2.  All significant intercompany
      transactions and balances have been eliminated.

      General:

      The Company has adopted a calendar fiscal year starting with December
      31, 2000.  In previous periods, the Company had a 52-53 week fiscal year
      which ended on the last Saturday in December.


                                    20
---------------------------------------------------------------------------

                   KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                    (in thousands, except per share data)

3.    Summary of Significant Accounting Policies, Continued:

      General, Continued:

      The Company principally operates in the Southwest and Northwest portions
      of the United States.  The Company produces and distributes construction
      materials including ready-mix concrete, hot-mix asphalt, sand, gravel,
      crushed stone and railroad ballast.

      Demand for the Company's products is subject to factors affecting the
      level of general construction activity including the level of interest
      rates, availability of funds for construction, appropriations by federal
      and state governments for construction, past overbuilding, labor
      relations in the construction industry, energy shortages, material
      shortages, weather, climate and other factors affecting the construction
      industry in general.  Labor disputes in the construction industry may
      result in work stoppages which may interrupt sales in the affected area.
      Precipitation or freezing temperatures may cause a reduction in
      construction activity and related demand for the Company's products.
      During the winter months, sales and income of the Company's Quarries and
      Pacific Northwest Operations are adversely affected by the impact of
      inclement weather.  A decrease in the level of general construction
      activity in any of the Company's market areas caused by any of the above
      factors may have a material adverse effect on the Company's sales and
      income derived therefrom.

      Use of Estimates:

      The preparation of financial statements in conformity with accounting
      principles generally accepted in the United States requires management
      to make estimates and assumptions.  These estimates and assumptions
      affect the reported amounts of assets and liabilities and the 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.

      Revenue Recognition:

      Materials revenue, net of discounts, trade allowances and product
      returns is recognized at the time the products are delivered.

      Joint Ventures:

      The Company accounts for its share of the operations of joint ventures
      on a pro rata basis in the Consolidated Statements of Earnings.

      Inventories:

      Inventories consist primarily of raw materials, repair parts, fuel and
      building materials that the Company holds for use or sale in the
      ordinary course of business.  Inventories are stated at the lower of
      average cost or market.


                                    21
---------------------------------------------------------------------------


                   KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                    (in thousands, except per share data)

3.    Summary of Significant Accounting Policies, Continued:

      Depreciation:

      Property, plant and equipment are recorded at cost.  Depreciation is
      provided on a straight line method based on the following useful lives:
                                                           Years
                                                           -----
          Buildings and improvements                          39
          Equipment and other                               5-10

      Depletion:

      Depletion of mineral properties is provided on a unit-of-extraction basis
      determined in relation to estimated recoverable reserves at each mineral
      site.

      Intangible Assets:

      Intangible assets consist principally of goodwill and other identifiable
      intangible assets associated with acquisitions.  These assets are
      amortized on a straight-line basis over the expected period of benefit,
      which ranges from 20 - 40 years.

      Goodwill:

      Goodwill represents the excess of cost over fair market value of net
      assets acquired.  Management continually reviews the carrying value of
      goodwill for recoverability based on anticipated undiscounted cash flows
      of the assets to which it relates.  The Company considers operating
      results, trends and prospects of the Company, as well as competitive
      comparisons.  The Company also takes into consideration competition
      within the materials industry and any other events or circumstances which
      might indicate potential impairment.  When goodwill is determined not to
      be recoverable, an impairment is recognized as a charge to operations.
      Such impairment is based upon a discounted cash flow approach.

      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.

      Income Taxes:

      The Company was included in the consolidated income tax returns of PKS
      prior to the Spin-off.  Since the Spin-off, the Company is responsible
      for filing its own income tax returns.  For all periods presented, the
      provision for income taxes has been computed on the separate results of
      operations of the Company as if it had filed its own income tax returns.

      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.


                                    22
---------------------------------------------------------------------------

                   KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                    (in thousands, except per share data)

3.    Summary of Significant Accounting Policies, Continued:

      Income Taxes, Continued:

      A valuation allowance would be recognized if it were anticipated that
      some or all of a deferred tax asset would not be realized.

      Accrued Insurance Costs:

      The Company maintains insurance coverage for various aspects of its
      business and operations.  The Company has elected, however, to retain a
      portion of losses that occur through the use of various deductibles,
      limits and retentions under its insurance programs.  The Company accrues
      for the estimated ultimate liability for incurred losses.  Consequently,
      the actual ultimate liability could differ from these estimated
      liabilities.

      General and Administrative Costs:

      Subsequent to the Spin-off, the consolidated financial statements
      include general and administrative costs incurred by the Company on a
      stand-alone basis.  PKS and the Company have entered into a number of
      agreements to facilitate the transition of the Company to an independent
      business enterprise (Note 18).   In 2001 and 2000, the Company incurred
      $1,591 and $2,438, respectively, of general and administrative costs in
      connection with these agreements.

      Prior to the Spin-off, the Company's Consolidated Statements of Earnings
      include general and administrative costs, including an allocation of
      certain general corporate expenses of PKS, which were not directly
      related to the Company, including costs for information technologies,
      finance, legal and corporate executives.  These allocations were based
      on a variety of factors including, for example, personnel, office space,
      time and effort, and sales volume.  Management believes these
      allocations were made on a reasonable basis.

      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 gives effect to convertible debentures considered to be dilutive
      common stock equivalents.  The potentially dilutive convertible
      debentures are calculated in accordance with the "if converted"
      method.  This method assumes that the after-tax interest expense
      associated with the debentures is an addition to income and the
      debentures are converted into equity with the resulting common shares
      being aggregated with the weighted average shares outstanding.

                                    23
---------------------------------------------------------------------------

                   KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                    (in thousands, except per share data)

3.    Summary of Significant Accounting Policies, Continued:

      Earnings Per Share, Continued:

      Earnings per share, as presented in the Consolidated Statements of
      Earnings was calculated as if the 36,344 common shares issued in
      connection with the Spin-off were outstanding for all  periods prior to
      the Spin-off.
                                              2001          2000         1999
                                              ----          ----         ----
     Net earnings available to common
       stockholders                      $  35,085     $  27,052     $ 25,828
     Interest expense, net of tax effect,
       associated with  convertible
       debentures                              492            42            -
                                        ----------     ---------     --------
     Net earnings for diluted shares    $   35,577     $  27,094     $ 25,828
                                        ==========     =========     ========
     Total number of weighted average
       shares outstanding used to
       compute basic earnings per
       share                                36,267        36,352       36,344
     Additional dilutive shares assuming
       conversion of convertible
       debentures                            1,563           437            -
                                        ----------     ---------     --------
     Total number of shares used to
       compute diluted earnings per share   37,830        36,789       36,344
                                        ==========     =========     ========
     Net earnings per share
       Basic                            $      .97     $     .74     $    .71
                                        ==========     =========     ========
       Diluted                          $      .94     $     .74     $    .71
                                        ==========     =========     ========
     Recent Pronouncements:

     In September 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 September 15, 2000.  Adoption of this statement did
     not materially affect the Company's financial statements as the Company
     has no derivative instruments or hedging activities.

     In July 2001, the FASB issued SFAS No. 141 ("SFAS 141"), "Business
     Combinations," and SFAS No. 142 ("SFAS 142"), "Goodwill and Other
     Intangible Assets."

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

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

     The Company does not anticipate the adoption of SFAS 141 and 142 to have
     a material effect on its consolidated financial position or results of
     operations.

                                    24
---------------------------------------------------------------------------

                   KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                    (in thousands, except per share data)

3.    Summary of Significant Accounting Policies, Continued:

      Recent Pronouncements, Continued:

      During June 2001, the FASB issued SFAS No. 143 (SFAS 143), Accounting
      for Asset Retirement Obligations.  This Statement addresses financial
      accounting and reporting for obligations associated with the retirement
      of tangible long-lived assets and the associated asset retirement costs.
      SFAS 143 requires an enterprise to record the fair value of an asset
      retirement obligation as a liability in the period in which it incurs a
      legal obligation associated with the retirement of a tangible long-lived
      asset.  SFAS 143 is effective for fiscal years beginning after June 15,
      2002.

      In several of the states the Company operates, a reclamation obligation
      is not required by the governing bodies, therefore, the Company does not
      anticipate the adoption of this statement to have a material effect on
      the consolidated financial position or results of operations.

      On October 3, 2001, the FASB issued SFAS No. 144 (SFAS 144), Accounting
      for the Impairment or Disposal of Long-Lived Assets, which addresses
      financial accounting and reporting for the impairment or disposal of
      long-lived assets.  While SFAS 144 supersedes SFAS No. 121, Accounting
      for the Impairment of Long-Lived Assets and for Long-Lived Assets to be
      Disposed Of, it retains many of the fundamental provisions of that
      Statement.  SFAS 144 is effective for fiscal years beginning after
      December 31, 2001.

      Management does not expect the adoption of SFAS 144 to have a material
      effect on the consolidated financial position or results of operations.

      Reclassifications:

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

4.    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 $30,880.  The
      acquisition was accounted for by the purchase method of accounting.
      Identifiable intangible assets related to this purchase of $15,448 are
      being amortized over their useful life of 27.5 years.  There was no
      recorded goodwill related to this transaction.

      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 $41,753.  The acquisition was accounted for by the
      purchase method of accounting.  The excess of aggregate purchase price
      over fair value of identifiable assets and liabilities acquired of
      $30,836 was recognized as goodwill and is being amortized over 40 years.

      On February 28, 1999, the Company purchased the remaining 60% of Pacific
      Rock Products, L.L.C., and Pacific Rock Products Trucking L.L.C.
      (formerly River City Machinery L.L.C.) (collectively "Pacific Rock"),
      a materials operation operating in the Vancouver, Washington and
      Portland, Oregon areas, for $40,000.  The acquisition was accounted for
      by the purchase method of accounting.   The excess of aggregate purchase
      price over fair value of identifiable assets and liabilities acquired of
      approximately $17,305 was recognized as goodwill and is being amortized
      over 20 years.  The operating results of Pacific Rock are included in
      the Consolidated Statements of Earnings from the date of acquisition.
      Prior to the acquisition, the Company used the equity method to account
      for Pacific Rock.

                                    25
---------------------------------------------------------------------------
                   KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                    (in thousands, except per share data)

4.    Acquisitions, Continued:

      The following unaudited pro forma financial information assumes the
      aforementioned acquisitions occurred at the beginning of the year
      preceding their acquisition.  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
      the year preceding their acquisition, or the results which may occur in
      the future:

                                                2000              1999
                                           ---------         ---------
     Revenue                               $ 493,879         $ 474,111
     Net earnings                          $  28,228         $  31,486
     Net earnings per share:
      Basic                                $     .78         $     .87
                                           =========         =========
      Diluted                              $     .77         $     .87
                                           =========         =========

     During 2001, 2000, and 1999, the Company acquired the assets of various
     materials operations and invested in land and mineral property other than
     those described above.  All of these were accounted for by the purchase
     method and, accordingly, results of operations for the acquired
     businesses have been included in the Consolidated Statements of Earnings
     from their respective dates of acquisition.  Pro forma financial
     information is not presented for these acquisitions because the impact is
     not material to the results of operations.  The aggregate purchase prices
     were $16,188, $7,803, and $4,270 during 2001, 2000 and 1999,
     respectively.

5.    Financial Instruments:

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

     Cash and Cash Equivalents:

     Cash and cash equivalents are stated at cost, which approximates fair
     value.  Cash equivalents generally consist of highly liquid instruments
     purchased with a maturity of three months or less and cash deposited with
     financial institutions.

     Marketable Securities:

     The Company has classified all marketable securities as available-for-
     sale.  The amortized cost of the securities used in computing unrealized
     and realized gains and losses are determined by specific identification.
     Fair values are estimated based on quoted market prices for the
     securities on hand or similar investments.  Net unrealized holding gains
     and losses, if any, are reported as a separate component of accumulated
     other comprehensive income, net of tax.

     At December 25, 1999, the amortized cost, estimated fair value and
     unrealized holding gains of the Company's U.S. debt securities were
     $2,532, $2,534, and $2, respectively.

     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.

                                    26
---------------------------------------------------------------------------
                   KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                    (in thousands, except per share data)

6.   Inventories:

     Inventories consist of the following:

                                                2001              2000
                                           ---------         ---------
          Raw materials                    $  11,749         $  12,147
          Other                                2,080             1,979
                                           ---------         ---------
          Total inventories                $  13,829         $  14,126
                                           =========         =========

7.   Property, Plant and Equipment:

     Property, plant and equipment consists of the following:
                                                2001              2000
                                           ---------         ---------
          Land and mineral properties      $  52,531         $  38,790
          Buildings and improvements           8,716             8,356
          Equipment and other                211,578           203,841
                                           ---------         ---------
          Total property, plant and
            equipment                      $ 272,825         $ 250,987
                                           =========         =========

8.   Intangible and Other Assets:

     Intangible and other assets consists of the following:

                                                2001              2000
                                           ---------         ---------
     Other intangible assets, net of
      accumulated amortization of
      $2,053 and $1,363                    $  15,063         $  15,454
      Land option                              2,000             2,000
     Notes receivable                          2,400             2,403
     Other                                       924               377
                                           ---------         ---------
                                           $  20,387         $  20,234
                                           =========         =========

9.   Employee Benefit Plans:

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

     In 2001, the Company no longer had employees covered under a profit
     sharing plan.

     The Company sponsors a defined benefit pension plan covering certain
     union employees.  Benefits are based on negotiated rates multiplied by
     years of service.  It is the Company's policy to make contributions to
     these plans sufficient to meet minimum funding requirements of the
     applicable laws and regulations, plus such additional amounts, if any, as
     the Company's actuarial consultants advise to be appropriate.  Plan
     assets consist principally of fixed income instruments, equity securities
     and cash equivalents.

                                    27
---------------------------------------------------------------------------

                   KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                    (in thousands, except per share data)

9.   Employee Benefit Plans, Continued:

                                                   2001                2000
                                                --------            --------
     Change in benefit obligation:
       Benefit obligation at beginning of year  $  6,324            $  4,854
       Service cost                                1,254                 995
       Interest cost                                 535                 401
       Actuarial loss                                424                 206
       Benefits paid                                (165)               (132)
                                                --------            --------
     Benefit obligation at end of year             8,372               6,324
                                                --------            --------

     Change in plan assets:
       Fair value of plan assets at beginning
         of year                                   6,647               4,766
       Actual return on plan assets                 (644)               (540)
       Employer contribution                       2,095               2,552
       Benefits paid                                (165)               (132)
                                                --------            --------
     Fair value of plan assets at end of year      7,933               6,646
                                                --------            --------

     Funded status                                  (439)                322
     Unrecognized net actuarial loss               2,078                 431
     Unrecognized prior service cost                 116                 139
                                                --------            --------
     Prepaid benefit cost                       $  1,755            $    892
                                                ========            ========

     Amounts recognized in the statement of financial position
       consist of:

       Prepaid benefit cost                     $  1,755            $    892
       Accrued benefit liability                    (439)                  -
       Intangible asset                              116                   -
       Deferred tax benefit                          129                   -
       Accumulated other comprehensive loss          194                   -
                                                --------            --------

       Net amount recognized                    $  1,755            $    892
                                                ========            ========

                                            2001          2000          1999
                                       ---------       -------     ---------
     Weighted-average assumptions as
       of year end:
       Discount rate                        8.0%           8.0%         8.0%
       Expected return on plan assets       8.0%           8.0%         8.0%
     Components of net periodic benefit cost:
       Service cost                    $   1,254       $   995     $   1,138
       Interest cost                         535           401           310
       Expected return on plan assets        584           540          (314)
       Amortization of prior service cost     22            22            22
       Recognized net actuarial (gain) loss   15            (4)           24
       Asset loss                         (1,178)         (983)            -
                                       ---------       -------     ---------
Net periodic benefit cost              $   1,232       $   971     $   1,180
                                       =========       =======     =========

                                    28
---------------------------------------------------------------------------

                  KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                    (in thousands, except per share data)


10.  Redeemable Common Stock Shares Issued and Outstanding:

     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, since
     the Spin-off were as follows:

       Balance at September 30, 2000           36,344
       Shares issued in 2000                      159
       Shares repurchased in 2000                 (40)
                                               ------
       Balance at December 31, 2000            36,463
       Shares issued in 2001                      168
       Shares repurchased in 2001                (414)
                                               ------
       Balance at December 31, 2001            36,217
                                               ======

11.  Long-Term Debt:

     Long-term debt consisted of  the following:
                                               2001        2000
                                              -----        ----
     6.5% note payable monthly to 2006      $   498     $     -
     4.42% note payable in 2003                 740           -
     8% note payable monthly to 2009              -       1,343
     7.629% note payable monthly to 2016          -         755
     6.42% note payable due in 2002             586         586
     9% note payable monthly to 2016            562         579
     6.42% note payable due in 2003             551         551
     7% note payable quarterly to 2003          211         276
     9.5% note payable monthly to 2002           40          93
     Other                                      473         708
                                            -------      ------
                                              3,661       4,891
     Less current portion                     1,127       1,112
                                            -------      ------
                                            $ 2,534     $ 3,779
                                            =======     =======

     Long-term debt repayments are due as follows:

               2002                         $ 1,127
               2003                           1,655
               2004                             142
               2005                             152
               2006                             133
               2007 and thereafter              452
                                            -------
                                            $ 3,661
                                            =======

     The 8% note payable was issued in 1999 to purchase land and is
     collateralized by a deed of trust.

     The 7% note payable is not collateralized and was issued as additional
     consideration as part of a 1997 acquisition.

     The 4.42% and 6.5% notes were issued in 2001 to purchase land and are
     collateralized by a deed of trust.

                                    29
---------------------------------------------------------------------------

                  KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                    (in thousands, except per share data)

11.  Long-Term Debt, Continued:

     The 6.42% notes payable due in 2002 is not collateralized and was issued
     to purchase equipment as part of a 2000 acquisition.

     The 6.42% notes payable due in 2003 is collateralized by a deed of trust
     and was issued to purchase equipment as part of a 2000 acquisition.

     The 9% and 7.629% notes payable are collateralized by deeds of trust and
     were assumed as part of the Company's 1999 acquisition of the remaining
     60% of Pacific Rock.

     All remaining items of debt are collateralized by equipment.

12.  Convertible Debentures:

     The face amount of convertible debentures amounted to $15,446 and $7,894
     at December 31, 2001 and December 31, 2000, respectively.  The
     convertible debenture bond premiums amounted to $316 and $181 at December
     31, 2001 and December 31, 2000, respectively.  The convertible debentures
     bear interest of 6.60% - 8.25% and are due in 2010 and 2011.

     Each series of debentures is convertible as follows:  2000A during
     October 2002; 2000B during October 2003; 2000C during October 2004; 2000D
     during November 2005; and 2001 during August 2006.  Each annual series
     may be redeemed in its entirety prior to the due date except during the
     conversion period.  At December 31, 2001 and December 31, 2000, 2,119 and
     1,158 shares of stock were reserved for future conversions.

13.  Income Taxes:

     An analysis of the provision for income taxes relating to earnings before
     income taxes and minority interest for the three fiscal years ended
     December 31, 2001 follows:

                              Federal        State        Total
                              -------        -----        -----
     2001:
       Current                  $   13,756    $   2,497   $   16,253
       Deferred                      3,069          919        3,988
                                ----------    ---------   ----------
                                $   16,825    $   3,416   $   20,241
                                ==========    =========   ==========
     2000:
       Current                  $   10,636    $   3,656   $   14,292
       Deferred                      3,238        1,150        4,388
                                ----------    ---------   ----------
                                $   13,874    $   4,806   $   18,680
                                ==========    =========   ==========
     1999:
       Current                  $   11,692    $   3,253   $   14,945
       Deferred                        559          189          748
                                ----------    ---------   ----------
                                $   12,251    $   3,442   $   15,693
                                ==========    =========   ==========

                                    30
---------------------------------------------------------------------------

                  KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                    (in thousands, except per share data)

13.  Income Taxes, Continued:

     The actual income tax expense differs from the "expected" tax expense
     computed by applying the U.S. Federal corporate tax rate of 35% to
     earnings before income taxes and minority interest as follows:

                                          2001          2000          1999
                                          ----          ----          ----
     Federal income tax expense at
       statutory rate                 $ 19,418      $ 16,027      $ 14,554
     State income tax, net of Federal
        tax benefit                      2,849         2,946         2,307
     Percentage depletion               (1,700)       (1,559)       (1,161)
     Prior year adjustment                (703)        1,209          (367)
     Other                                 377            57           360
                                      --------      --------      --------
                                      $ 20,241     $  18,680      $ 15,693
                                      ========     =========      ========

     The components of the net deferred tax liabilities for the fiscal years
     ended December 31, 2001 and December 31, 2000 were as follows:

                                            2001                  2000
                                                 Non                   Non
                                     Current    Current    Current    Current
                                     ----------------------------------------
     Deferred tax assets:
        Insurance claims             $ 2,340    $     -    $ 1,993    $     -
     Compensation / retirement benefits  496        129        940          -
     Other                               836        448        692        482
                                     ----------------------------------------
     Total deferred tax assets         3,672        577      3,625        482
                                     ----------------------------------------
     Deferred tax (liabilities):
        Asset bases / accumulated
        Depreciation                       -    (14,218)         -    (11,144)
     LLC / joint venture investments       -     (1,562)         -     (1,303)
     Other                               (50)    (1,292)         -       (563)
                                     ----------------------------------------
     Total deferred tax (liabilities)    (50)   (17,072)         -    (13,010)
                                     ----------------------------------------
     Net deferred tax assets
          (liabilities)              $ 3,622   $(16,495)   $ 3,625   $(12,528)
                                     ========================================

14.  Segment Reporting:

     The Company has four operating segments, Arizona Operations, Pacific
     Northwest Operations, Northern California Operations and Quarries
     Operations, which represent separately managed strategic business units
     that have different marketing strategies.  Arizona Operations derives its
     revenue from the sale of aggregates, ready-mix, asphalt and paving
     operations.  The Pacific Northwest Operations and Northern California
     Operations derive  their revenues  from the sale of aggregates,  ready-
     mix and asphalt.   Quarries Operations derives its revenue from the sale
     of aggregates.  Arizona and Pacific Northwest Operations meet the
     requirements of the quantitative thresholds and are being disclosed as
     reportable operating segments.  Other Operations includes the Northern
     California and Quarries Operations.  Corporate depreciation, depletion
     and amortization and operating income (loss) includes general corporate
     expenses, and goodwill and intangible amortization related to
     acquisitions, which collectively are not reported to the chief operating
     decision maker by segment.  Corporate identifiable assets include
     corporate cash and cash equivalents, home office facilities and deferred
     tax assets.

                                    31
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                  KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                    (in thousands, except per share data)

14.  Segment Reporting, Continued:

     The Company evaluates operating performance based on operating income,
     which excludes the following items:  general corporate expenses, goodwill
     and intangible amortization related to acquisitions, interest income,
     interest expense, results from a non-materials related operations and
     income taxes.

     Due to geographic locations, no intersegment sales or transfers are made
     between the segments.
<TABLE>
<S>
<CAPTION>
                                       Pacific
                            Arizona   Northwest      Other
                          Operations Operations  Operations  Corporate  Total
                          ---------- ----------  ---------- ----------  ------
<C>                         <C>         <C>         <C>          <C>         <C>
2001
Revenues                  $ 398,430  $ 52,095   $  58,294  $       -  $508,819
Depreciation, depletion
and amortization          $  10,413  $  5,443   $   4,079  $   3,432  $ 23,367
Operating income (loss)   $  42,885  $  5,257   $  13,490  $  (8,663) $ 52,969
Identifiable assets       $ 137,399  $ 64,382   $  93,374  $ 120,494  $415,649
Capital expenditures      $   7,485  $    835   $   5,956  $     319  $ 14,595

2000
Revenues                  $ 381,865  $ 59,374   $  47,270  $       -  $488,509
Depreciation, depletion
and amortization          $   6,981  $  5,204   $   7,366  $   2,268  $ 21,819
Operating income (loss)   $  34,302  $  6,546   $   8,706  $  (7,401) $ 42,153
Identifiable assets       $ 149,366  $ 64,961   $  91,948  $  69,968  $376,243
Capital expenditures      $  16,098  $  8,422   $   5,410  $     780  $ 30,710

1999
Revenues                  $ 357,278  $ 54,511   $  25,669  $       -  $437,458
Depreciation, depletion
and amortization          $   5,796  $  4,342   $   4,952  $   1,880  $ 16,970
Operating income (loss)   $  26,747  $ 12,121   $   4,934  $  (5,528) $ 38,274
Identifiable assets       $ 122,599  $ 67,468   $  13,022  $  74,902  $277,991
Capital expenditures      $  17,427  $  1,304   $     727  $       -  $ 19,458

</TABLE>
-----------------------------------------------------------------------------

     The Company's external revenues by product for the three fiscal years
     ended December 31, 2001 are as follows:
                                             2001        2000        1999
                                            ------      ------      ------
Aggregates (sand, gravel, crushed
   stone and railroad ballast)             $ 116,788   $ 112,998  $  99,376
Hot-mix asphalt                               93,160      79,422     78,443
Ready mix concrete                           284,914     282,902    250,874
Other                                         13,957      13,187      8,765
                                           ---------   ---------  ---------
Total revenue                              $ 508,819   $ 488,509  $ 437,458
                                           =========   =========  =========

All operations and long-lived assets are in the United States.

                                    32
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                  KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                    (in thousands, except per share data)

15.  Other Comprehensive Income (Loss):

     Other comprehensive income (loss) consisted of the following:
                                                     Tax
                                                  (Expenses)
                                    Before Tax    Or Benefit     After Tax
                                    ----------    ----------     ---------
     2001:
     Unrealized holding losses
       arising during the period    $        -    $        -     $       -
     Minimum pension liability
       adjustment                         (323)          129          (194)
                                    ----------    ----------     ---------
     Other comprehensive loss       $     (323)   $      129     $    (194)
                                   ===========   ===========    ==========
2000:
     Unrealized holding losses
       arising during the period    $       (2)   $        1     $      (1)
     Minimum pension liability
       adjustment                            -             -             -
                                    ----------    ----------     ---------
     Other comprehensive loss       $       (2)   $        1     $      (1)
                                   ===========   ===========    ==========
     1999:
     Unrealized holding losses
       arising during the period    $      (40)   $       15     $     (25)
     Minimum pension liability
       adjustment                          742          (260)          482
                                    ----------    ----------     ---------
     Other comprehensive income     $      702    $    ( 245)    $     457
                                   ===========   ===========    ==========

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

                                                           Current
                                           Beginning        Year        Ending
                                            Balance        Change      Balance
                                           --------        --------    -------
     2001:
     Unrealized holding gain on securities $      -        $      -    $    -
     Minimum pension liability adjustment         -            (194)     (194)
                                           --------        --------    -------
     Accumulated other comprehensive income
       (loss)                              $      -        $   (194)   $ (194)
                                           =========       =========   =======
     2000:
     Unrealized holding gain on securities $      1        $     (1)   $    -
     Minimum pension liability adjustment         -               -         -
                                           --------        --------    -------
     Accumulated other comprehensive income
       (loss)                              $      1        $     (1)   $    -
                                           =========       =========   =======
     1999:
     Unrealized holding gain on securities $     26        $    (25)   $    1
     Minimum pension liability adjustment      (482)            482         -
                                           --------        --------    -------
     Accumulated other comprehensive income
       (loss)                              $   (456)       $    457    $    1
                                           =========       =========   =======

                                    33
---------------------------------------------------------------------------

                  KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                    (in thousands, except per share data)


16.  Operating Leases:

     The Company leases mineral properties, buildings and certain equipment
     under non-cancelable operating lease agreements.  Total rent expense was
     $8,449, $10,383, and $12,292 in 2001, 2000, and 1999, respectively.
     Future minimum lease commitments are as follows:

               2002          $    9,987
               2003               8,968
               2004               6,900
               2005               5,704
               2006               5,574
               Thereafter        21,810
                             ----------
                             $   58,943
                             ==========

17.  Selected Quarterly Financial Information (unaudited)

                             First         Second         Third    Fourth
                           Quarter         Quarter       Quarter   Quarter
                           -------         -------       -------   -------
     2001
     Revenues              $ 113,069       $ 137,832     $ 137,047 $ 120,871
     Operating income      $   8,768       $  16,441     $  17,607 $  10,153
     Net income            $   5,834       $  10,481     $  10,901 $   7,869
     Basic earnings per
       share               $     .16       $     .29     $     .30 $     .22
     Diluted earnings per
       share               $     .16       $     .28     $     .29 $     .21
     2000
     Revenues              $  98,533       $ 126,786     $ 134,840 $ 128,350
     Operating income      $   4,361       $  11,381     $  13,311 $  13,100
     Net income            $   3,032       $   7,350     $   8,601 $   8,069
     Basic and diluted
       earnings per share  $    0.08       $    0.20     $    0.24 $    0.22

18.  Other Matters:

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

     Separation Agreement

     The Separation Agreement generally defines the relationship between KMC
     and PKS after the Spin-off, including the allocation of certain risks and
     responsibilities between KMC and PKS after the Spin-off, and contains
     short-term arrangements relating to the provision of certain
     administrative services and the lease of office space by PKS to KMC.

                                    34
---------------------------------------------------------------------------

                  KIEWIT MATERIALS COMPANY AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                    (in thousands, except per share data)

18.  Other Matters, Continued:

     The Separation Agreement provides that each of KMC and PKS will indemnify
     the other with respect to breaches of the Separation Agreement and with
     respect to the activities of each of their subsidiary business groups,
     except as specifically provided under the Tax Sharing Agreement described
     below.  The cross-indemnities are intended to allocate financial
     responsibility for liability arising out of the historical and future
     business of the construction business to PKS, and financial
     responsibility for liabilities arising out of the historical and future
     business of the materials business to KMC.

     Tax Sharing Agreement

     The Tax Sharing Agreement defines the rights and obligations of KMC and
     PKS with respect to deficiencies and refunds of federal, state and other
     taxes relating to their respective operations for tax years ending on or
     before (or tax years including) the Spin-off and with respect to certain
     tax attributes of KMC and PKS both before and after the Spin-off.  The
     Tax Sharing Agreement also specifies the parties' respective obligations
     in connection with any audit or investigation concerning any federal,
     state or other taxes or in the event that the Spin-off is subsequently
     determined not to qualify, in whole or in part, as a tax-free transaction
     for U.S. federal income tax purposes.  In general, under the Tax Sharing
     Agreement, KMC and PKS will be responsible for paying the taxes that are
     allocable to their respective operations.

     Letters of Credit

     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.  As of December 31, 2001, the Company has one
     outstanding letter of credit of $1,315.

     Subsequent Event

     On February 1, 2002, the Company invested $25 million in a private
     investment fund limited partnership.  A KMC director, is the managing
     member of the limited liability company, which is the general partner of
     the limited partnership.  The Company accounts for this investment using
     the equity method.

                                    35
---------------------------------------------------------------------------

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

         Change in accountants, effective October 24, 2001 (Incorporated by
         reference to Form 8-K, filed with the Securities and Exchange
         Commission on October 25, 2001).

                                   PART III

         The information required by Part III is incorporated by reference to
the Company's definitive proxy statement for the 2002 Annual Meeting of
Stockholders to be filed with the Securities and Exchange Commission on or
before April 30, 2002.  However, certain information is set forth in Item 4
"Executive Officers of the Registrant" above.

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.


                                    36
---------------------------------------------------------------------------

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 31, 2001 and
            December 31, 2000 and for the three fiscal years ended December
            31, 2001.
            Independent Auditors' Report dated March 8, 2002 of KPMG LLP
            Report of Independent Accountants dated March 5, 2001 of
            PricewaterhouseCoopers LLP
            Consolidated Balance Sheets
            Consolidated Statements of Earnings
            Consolidated Statements of Changes in Redeemable Common Stock and
            Comprehensive Income
            Consolidated Statements of Cash Flows
            Notes to Consolidated Financial Statements

         2. Financial Statement Schedules for the three fiscal years ended
            December 31, 2001:

            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 July 28, 2000
               (Incorporated by reference to Exhibit 3.1 to Amendment No. 5 to
               Kiewit Materials Company's Registration Statement on Form 10,
               filed with the Securities and Exchange Commission on September
               15, 2000).

   3.2         Amended and Restated By-laws, effective July 28, 2000
               (Incorporated by reference to Exhibit 3.2 to the Amendment No.
               5 to Kiewit Materials Company's Registration Statement on Form
               10, filed with the Securities and Exchange Commission on
               September 15, 2000).

   4.1         Indenture, dated as of September 14, 2000, by and between
               Kiewit Materials Company and UMB Bank, N.A., as trustee.
               (Incorporated by reference to Exhibit 4.1 to the Company's
               Quarterly Report on Form 10-Q, for the quarter ended June 30,
               2000).

   4.2         Form of Series 2000A Convertible Debentures due October 31,
               2010 of Kiewit Materials Company.  (Incorporated by reference
               to Exhibit 4.2 to the Company's Quarterly Report on Form 10-Q,
               for the quarter ended June 30, 2000).

   4.3         Form of Series 2000B Convertible Debentures due October 31,
               2010 of Kiewit Materials Company.  (Incorporated by reference
               to Exhibit 4.3 to the Company's Quarterly Report on Form 10-Q,
               for the quarter ended June 30, 2000).

   4.4         Form of Series 2000C Convertible Debentures due October 31,
               2010 of Kiewit Materials Company.  (Incorporated by reference
               to Exhibit 4.4 to the Company's Quarterly Report of Form 10-Q,
               for the quarter ended June 30, 2000).

   4.5         Form of Series 2000D Convertible Debentures due November 30,
               2010 of Kiewit Materials Company (Incorporated by reference to
               Exhibit 4.4 to the Company's Registration Statement on Form S-8
               filed October 13, 2000).


                                    37
---------------------------------------------------------------------------

   4.6         Form of Repurchase Agreement for Convertible Debentures
               (Incorporated by reference to Exhibit 4.15 to Amendment No. 4
               to the Company's and Kiewit's Joint Registration Statement on
               Form S-4 filed with the Securities and Exchange Commission on
               August 8, 2000).

   4.7         Form of Series 2001 Convertible Debentures due July 31, 2011 of
               Kiewit Materials Company (Incorporated by reference to Exhibit
               4.4 to the Company's Registration Statement on Form S-8 filed
               June 7, 2001).

   21          List of Subsidiaries of the Company.

 (b) A Form 8-K was filed by the Company during the three-months ended
     December 31, 2001.  The Form 8-K, dated October 25, 2001, was filed to
     discuss the Company's change in accountants.


                                    38
---------------------------------------------------------------------------


                     Report of Independent Accountants
                     ---------------------------------



The Board of Directors and Stockholders
Kiewit Materials Company


Our audits of the consolidated financial statements referred to in our report
dated March 5, 2001 appearing on page 14 of this Form 10-K also included an
audit of the financial statement schedules as of December 31, 2000 and for
each of the two fiscal years in the period ended December 31, 2000, listed in
Item 14(a)(2) of this Form 10-K.  In our opinion, this financial statement
schedules presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements.


/s/PricewaterhouseCoopers LLP
-----------------------------
Omaha, Nebraska
March 5, 2001


                                    39
---------------------------------------------------------------------------

                                                                Schedule II


               Valuation and Qualifying Accounts and Reserves



                                       Addition    Amounts
                              Balance  Charged to  Charged           Balance
                             Beginning  Costs and     to              End of
(dollars in thousands)       Of Period  Expenses   Reserves   Other   Period
----------------------------------------------------------------------------

Year ended December 31, 2001
----------------------------

Allowance for doubtful trade
  accounts                   $   1,187  $     510  $    (614) $    - $  1,083

Reserves:
  Insurance claims           $   5,293  $   1,955  $  (1,145) $    - $  6,103

Year ended December 31, 2000
----------------------------

Allowance for doubtful trade
  accounts                   $     757  $     739  $    (309) $    - $  1,187

Reserves:
  Insurance claims           $   6,777  $    (641) $    (843) $    - $  5,293

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

Allowance for doubtful trade
  accounts                   $     543  $     447  $    (233) $    - $     757

Reserves:
  Insurance claims           $   5,626  $   2,370  $  (1,219) $    - $   6,777


                                    40
---------------------------------------------------------------------------

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 on March 27, 2002.

                                             KIEWIT MATERIALS COMPANY

                                             By: /s/ Donald E. Bowman
                                                ------------------------
                                                Donald E. Bowman
                                                Chief Financial Officer

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


Name                               Title                            Date
----                               -----                            ----
/s/ Christopher J. Murphy
--------------------------    President, Chief Executive      March 27, 2002
Christopher J. Murphy         Officer and Director
                              (Principal Executive Officer)

/s/ Donald E. Bowman
--------------------------    Vice President and Chief        March 27, 2002
Donald E. Bowman              Financial Officer
                              (Principal Executive Officer)

/s/ Todd A. Freyer
--------------------------    Controller                      March 27, 2002
Todd A. Freyer                (Principal Executive Officer)

/s/ Richard W. Colf
--------------------------    Director                        March 27, 2002
Richard W. Colf

/s/ Bruce E. Grewcock
--------------------------    Director                        March 27, 2002

/s/ William L. Grewcock
--------------------------    Director                        March 27, 2002
William L. Grewcock

/s/ Richard Geary
--------------------------    Director                        March 27, 2002
Richard Geary

/s/ James Goodwin
--------------------------    Director                        March 27, 2002
James Goodwin

/s/ Walter Scott, Jr.
--------------------------    Director                        March 27, 2002
Walter Scott, Jr.

/s/ Kenneth E. Stinson
--------------------------    Chairman of the Board of        March 27, 2002
Kenneth E. Stinson            Directors


                                    41
---------------------------------------------------------------------------



Exhibit 21.  List of Subsidiaries of the Company.

Subsidiary                                    State of Organization
----------                                    ---------------------
Fort Calhoun Stone Company                             DE
Guernsey Stone Company                                 WY
Kiewit Materials Leasing L.L.C.                        DE
Marana Golf Inc.                                       DE
Northwest Materials Holding Company                    DE
Pacific Rock Products, L.L.C.                          WA
Pacific Rock Products Trucking, L.L.C.                 WA
Quality Ready Mix, Inc.                                AZ
Solano Concrete Co., Inc.                              CA
Tanner Companies (Yuma) Inc.                           DE
Twin Mountain Rock Company                             NM
United Metro Materials Inc.                            AZ
Western Equipment Co.                                  AZ


                                    42
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