x	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Former name, former address and former fiscal year, if change since last report)

~~Indicate by check~~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 whether the registrant ~~has filed all documents~~is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and ~~reports required to be filed by Section 12, 13 or 15(d)~~“smaller reporting company” in Rule 12b-2 of the ~~Securities~~ Exchange ~~Act~~Act.

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of ~~1934 subsequent to~~ the ~~distribution of securities under a plan confirmed by a court.~~Exchange Act.): Yes x¨ No x¨

At ~~April 30, 2003, 6,911,799~~August 1, 2008, 7,190,806 Class A Units were outstanding including ~~136,919~~104,267 Class A Units outstanding but reserved for distribution to the general unsecured creditors in the Kaiser Steel Corporation bankruptcy and 113,501 Class A Units deemed outstanding and reserved for issuance to holders of Kaiser ~~Steel Corporation.~~Ventures Inc. stock that have to convert such stock into Kaiser Ventures LLC Class A Units.

Pursuant to this Report on Form 10-Q/A, Kaiser Ventures LLC, as the successor to Kaiser Ventures Inc. (the “Company”), amends Part I of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2003, as filed by the Company on May 13, 2003, as amended on August 15, 2003 (the “Original 10-Q”) to reflect the changes described below.

Effective July 1, 2001, the Company changed its method of accounting for premium costs and claims under a twelve-year insurance policy purchased June 30, 2001, to amortize the premium costs over the term of the underlying prospective insurance policy and record insurance recoveries on known claims liabilities when recoveries are estimable and claims liabilities are accepted by the insurance carrier. Previously, the Company had capitalized the cost of the policy as prepaid insurance in other assets and reduced the prepaid insurance as claims were paid and insurance recoveries were collected.

See Note 2 to the Consolidated Financial Statements, “Accounting Change and Restatement of Consolidated Financial Statements,” for more detail. Conforming changes reflecting the foregoing are made in Part I – Item 1. FINANCIAL STATEMENTS (and footnotes thereto) and Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.

Except for the foregoing, no other information included in the Original 10-Q is amended in this Form 10-Q/A. All information in this Quarterly Report on Form 10-Q/A is as of March 31, 2003 or May 13, 2003, the date of the filing of the Original 10-Q as amended on August 15, 2003, as required, and does not reflect, unless otherwise explicitly noted, any subsequent information or events occurring after such dates, nor does it otherwise purport to modify or update the disclosure contained in the Original 10-Q.

The Company will furnish without charge, to each member, upon written request of any such person, a copy of the Company’s ~~2002~~2007 Annual Report on Form ~~10-K/A, as filed with the Securities and Exchange Commission,~~10-KSB, including the financial statement schedules ~~thereto.~~thereto and the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2008 and Quarterly Report on Form 10-Q for the period ended June 30, 2008. Those requesting a copy of the ~~10-K/A~~10-KSB Report and/or the 2008 Form 10-Q reports that are not currently members of the Company may also obtain a copy of each report directly from the ~~Company.~~Company upon payment of a nominal photocopying charge. Requests for a copy of any report filed with the ~~10-K/A Report~~Securities and Exchange Commission should be directed to Executive Vice President-Administration, at 3633 East Inland Empire Boulevard, Suite 480, Ontario, California 91764. ~~The Form 10-K/A Report~~All such reports can also be accessed from the Company’s website atwww.kaiserventures.com.

The reader is encouraged to read this Report on Form ~~10-Q/A Report~~10-Q in conjunction with the Company’s ~~2002~~2007 Annual Report on Form ~~10-K/A Report, since~~10-KSB and the Company’s 2008 first and second quarter Form 10-Q reports as the information contained herein is often an update of the information in ~~the 10-K/A Report.~~such reports.

Except for the historical statements and discussions contained herein, statements contained in this ~~report~~Report on Form ~~10-Q/A~~10-Q constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Any ~~10-Q~~10-K Report, 10-KSB Report, Annual Report, ~~10-K~~10-Q Report, 10-QSB Report, 8-K Report or press release of the Company and any amendments thereof may include forward-looking statements. In addition, other written or oral statements, which constitute forward-looking statements, have been made and may be made in the future by the Company. You should not put undue reliance on forward-looking statements. When used or incorporated by reference in this 10-Q Report or in other written or oral statements, the words “anticipate,” “estimate” “project” and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks, uncertainties, and assumptions. We believe that our assumptions are reasonable. Nonetheless, it is likely that at least some of these assumptions will not come true. Accordingly, should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, expected, or projected. For example, our actual results could materially differ from those projected as a result of factors such as, but not limited to: Kaiser’s inability to complete the anticipated sale of its Eagle Mountain landfill project; litigation, including, among others, claims that relate to Eagle Mountain, ~~and~~including the adverse federal land exchange litigation, pre-bankruptcy activities of Kaiser Steel Corporation, the predecessor of Kaiser, ~~including, among others,~~and asbestos claims; insurance coverage disputes; the impact of federal, state, and local laws and regulations on our permitting and development activities; competition; the challenge, reduction or loss of any claimed tax ~~benefits;~~benefit, including Kaiser’s conclusion that the Company’s tender offer will not result in the Company being treated as a “publicly traded partnership”; the impact of natural disasters on our assets; and/or general economic conditions in the United States and Southern California. The Company disclaims any intention to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

A reader of this Report on Form ~~10-Q/A~~10-Q is strongly encouraged to read the entire report, together with the Company’s ~~2002~~2007 Annual Report on Form ~~10-K/A~~10-KSB, the Company’s Report on Form 10-Q for the period ended March 31, 2008 and the Company’s Report on Form 10-Q for the period ended June 30, 2008, for background information and a complete understanding as to material developments concerning the Company. Such reports can be found on Kaiser’s website atwww.kaiserventures.com under the “Member Relations” tab.

Unless otherwise noted: (1) the term “Kaiser LLC” refers to Kaiser Ventures LLC; (2) the term “Kaiser Inc.” refers to the former Kaiser Ventures Inc.; (3) the terms “Kaiser,” “the Company,” “we,” “us,” and “our,” refer to past and ongoing business operations conducted in the form of Kaiser Inc. or currently Kaiser LLC, and their respective subsidiaries. Kaiser Inc. merged with and into Kaiser LLC effective November 30, 2001; (4) the terms “Class A Units” and “members” refer to Kaiser LLC’s Class A Units and the beneficial owners thereof, respectively; and (5) the term the “merger” refers to the merger of Kaiser Inc. with and into Kaiser LLC effective November 30, 2001, in which Kaiser LLC was the surviving company.

The Financial Statements are located at the end of Item 4,3, beginning on Page 1116 of this Report and are incorporated herein by this reference.

~~Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~BUSINESS UPDATE

An 81.78% ownership interest in Mine Reclamation, LLC, (referred to as MRC), which owns a permitted a rail-haul municipal solid waste landfill at a property called the Eagle Mountain Site located in the California desert. This landfill is currently subject to a contract for its sale to County District No. 2 of Los Angeles County (which we refer to as the District) for approximately $41 million;

A 50% ownership interest in the West Valley Materials Recovery Facility and Transfer Station, a transfer station and materials recovery facility ~~located on land acquired from Kaiser,~~ which we refer to as the West Valley MRF; ~~and~~

Approximately 5,400 additional acres owned or controlled by Kaiser at the Eagle Mountain Site that are not included in the pending sale to the District. However, the September 2005 adverse U.S. District Court decision reversing a completed land exchange between Kaiser and the United States Bureau of Land Management (“BLM”), if upheld on appeal, will change the amount and nature of a material portion of Kaiser’s land holdings at the Eagle Mountain Site;

Over approximately 150 million tons of stockpiled rock that is located on our fee owned Eagle Mountain property that is not a part of the Landfill Project; and

Land at Lake Tamarisk consisting of 72 residential lots and approximately 420 acres of other undeveloped property. Lake Tamarisk is an unincorporated community located approximately 70 miles to the east of Palm Springs, California, and is approximately 8 miles from the Eagle Mountain Site.

As of ~~March 31, 2003,~~September 30, 2008, we also had cash and cash equivalents, receivables and ~~short-term~~short and long-term investments of approximately ~~$16.4 million.~~$8,786,000.

declared or made with respect to the Units between September 19, 2008 and October 30, 2008, or such later date to which the MacKenzie Offer may be extended. As required by applicable law, the Company’s Board of Managers met and carefully considered the MacKenzie Offer. It was the conclusion and recommendation of the Board that unitholders should reject the Mackenzie Offer. The Board’s recommendation and a summary of the reasons for its recommendation were communicated in a letter to unitholders dated October 2, 2008, and in a press release of the same date.

In response to the MacKenzie Offer and in recognition that some of our unitholders may have a desire or an immediate need for liquidity, diversification, risk reduction, or other circumstance, the Company’s Board approved the commencement of an offer by the Company (the “Company Offer”) to purchase for cash up to 700,000 Class A Units at a purchase price of $.90 per Unit, without interest and without any deduction for transfer costs, upon the terms and conditions set forth in the Company’s Offer to Purchase dated October 14, 2008, and the related Letter of Transmittal. The Company Offer expires at 3:00 p.m. Pacific Time on November 14, 2008, unless extended by the Company.²

Like the MacKenzie Offer, the Company’s Board of Managers also recommended that unitholders reject the Company Offer as neither offer represents fair value for the Company’s units at this time.

The MacKenzie Offer expired on October 30, 2008. MacKenzie terminated its tender offer and decided not to purchase any Kaiser Class A Units.

Background. In 1988, the Company entered into a 100-year lease agreement (the “MRC Lease”) with MRC. MRC is seeking to develop the Company’s former iron ore mine near Eagle Mountain, California into a large, regional rail-haul, municipal solid waste landfill. The Company currently owns ~~81.78%~~83.13% of the Class B units and 100% of the Class A units of MRC. In December 1999, the Landfill Project received its last major permit necessary to construct and operate a ~~rail haul~~rail-haul landfill. The Landfill Project is permitted to receive ~~a maximum of 20,000~~10,000 tons per day of municipal solid waste for the first ten years of operation and up to a maximum of 20,000 tons per day thereafter. The landfill is permitted to receive municipal solid waste for up to 88 years.

Sale of Landfill Project. In August 2000, MRC entered into that certain Agreement ~~For~~for Purchase and Sale of Real Property and Related Personal Property In Regard To The Eagle Mountain Sanitary Landfill Project and Joint Escrow Instructions (“Landfill Project Sale Agreement”) with the District. In summary, the Landfill Project (which includes our royalty payments under the MRC Lease) is being sold for $41 million, ~~with~~plus an ~~initial~~estimated approximate $8.3 million in accrued interest from May 2001 to the date of this Report on Form 10-Q. The closing of this transaction is currently scheduled to occur inby September 30, 2008. However, the ~~second quarter~~initial closing date has been extended a number of ~~2003. However, payment of the purchase price will be delayed as described in more detail below.~~times. The sale of the Landfill Project is subject to the results of the District’s due diligence, satisfaction of numerous contingencies and the ~~negotiations~~negotiation of various ancillary agreements. The contingencies include, but are not limited to, obtaining the transfer of the Landfill Project’s permits to the District and obtaining all necessary consents to the transaction. ~~The Company agreed to vote its interest in MRC in favor~~Even with an initial closing, payment of the ~~sale of the Landfill Project to the~~purchase price will be delayed as described in more detail below. In September 2005, a U.S. District ~~on its current terms.~~Court decision was issued that was

The District continues to undertake extensive due diligence on the Landfill Project and is waiting for receipt of several items, including final land and right-of-way surveys. In addition, the parties are

THIS DISCUSSION OF THE COMPANY OFFER IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER TO BUY OR THE SOLICITATION OF AN OFFER TO SELL KAISER’S CLASS A UNITS. THE COMPANY OFFER IS ONLY BEING MADE PURSUANT TO THE OFFER TO PURCHASE, THE LETTER OF TRANSMITTAL AND RELATED MATERIALS THAT KAISER FILES WITH THE SECURITIES AND EXCHANGE COMMISSION AND HAS BEEN DISTRIBUTED TO ITS UNITHOLDERS. COPIES ARE AVAILABLE FOR FREE FROM KAISER OR ON THE SEC’S WEBSITE ATWWW.SEC.GOV. PRIOR TO MAKING ANY DECISION WITH RESPECT TO THEIR CLASS A UNITS, UNITHOLDERS SHOULD CAREFULLY READ EACH OF THESE DOCUMENTS BECAUSE THEY CONTAIN IMPORTANT INFORMATION, INCLUDING THE VARIOUS TERMS OF, AND CONDITIONS TO, THE COMPANY OFFER.

~~continuing~~adverse to ~~negotiate~~ the ~~terms of various ancillary agreements such as joint use agreements for access, utilities, and the Eagle Mountain railroad. With~~Landfill Project which may negatively impact the sale of the Landfill Project to the ~~Company will continue~~District. This decision has been appealed to ~~own more than 4,000 acres in~~ the ~~Eagle Mountain area, including~~U.S. 9^th Circuit Court of Appeals and we are awaiting the ~~Eagle Mountain town site. The~~Court’s decision. See “Landfill Project Litigation”below.

As of the date of the filing of this Report, the parties agreed to extend the closing date to no later than ~~May~~December 31, ~~2003. However, the~~2008. The contractual expiration date has been extended a number of ~~times.~~times previously. The conditions to closing are not expected to be met by the current expiration date, and the parties will ~~have~~each need to decide whether to extend the period one or more additional times or waive certain conditions. There is no assurance or requirement that either of the parties will continue to extend the closing date and, if it is extended, for how long.

Upon the occurrence of an initial closing, ~~$39 million of~~ the total purchase price will be deposited into an escrow account and will be released when litigation contingencies are fully resolved. ~~The~~Currently the only existing litigation ~~contingencies are~~contingency arises out of the federal litigation challenging the completed federal land exchange. ~~Interest began to accrue~~As discussed in more detail below in “Landfill Project Litigation,” on ~~this portion~~September 20, 2005, the U.S. District Court for the Central District of California, Eastern Division, issued an adverse decision in the federal land exchange litigation, which would, if fully affirmed on appeal, jeopardize the viability of the ~~purchase price in May 2001,~~Landfill Project and ~~will be paid out~~its sale to ~~MRC on a quarterly basis beginning with a successful outcome of~~ the federal litigation at the Federal District Court level for a period of up to four years. The remaining $2 million of the purchase price will also be placed into an escrow account upon closing and will be released upon the later of (1) the release of the $39 million as described above or (2) the permitting approvals of the District’s Puente Hills landfill for its remaining 10 years of capacity. Receipt of the purchase price, in whole or in part, if at all, could be delayed for a substantial period of time pending satisfactory resolution of these contingencies.

The foregoing summary of the Landfill Purchase Agreement is qualified in its entirety by the Landfill Purchase Agreement filed as an exhibit to Kaiser Inc.’s second quarter 2000 Report on Form 10-Q and the more extensive discussion contained in our ~~2002~~2007 Annual Report on Form ~~10-K/A.~~10-KSB.

Flood Damage to Railroad. The Company owns an approximate 52-mile private railroad that runs from Ferrum Junction near the Salton Sea to the Eagle Mountain mine. In late August and early September of 2003, limited portions of the railroad (less than ten percent of the railroad) and related protective structures sustained damage due to heavy rains and flash floods. This damage included having some rail sections buried under silt while other areas had their rail bed undermined. We have currently accrued on our balance sheet a liability of approximately $4,338,000 for the estimated cost of repair. While the Company undertakes, from time to time, the work necessary to maintain and to assist in preserving and protecting the railroad, the major repairs required to return the railroad to its condition prior to the flood damage are being deferred until a later date.

Landfill Project Litigation. ~~Currently,~~On September 20, 2005, the ~~only pending litigation involving~~U.S. District Court for the Central District of California, Eastern Division, issued its opinion in Donna Charpied,et al., Plaintiffs v.United States Department of Interior, et al., Defendants (Case No. ED CV 99-0454 RT (Mex)) and inNational Parks and Conservation Association, Plaintiff v.Bureau of Land Management, et al., Defendants (ED CV 00-0041 RT (Mex)). The decision is adverse to the Landfill Project ~~concerns~~in that it sets aside a land exchange completed between the Company and BLM in October 1999 and two BLM rights-of-way.

In the land exchange, the Company’s wholly owned subsidiary, Kaiser Eagle Mountain, Inc. (now Kaiser Eagle Mountain, LLC) transferred approximately 2,800 acres of Kaiser-owned property along its railroad right-of-way to the BLM and a cash equalization payment in exchange for approximately 3,500 acres of land within the Eagle Mountain landfill project area. The land exchanged by the Company was identified as prime desert tortoise habitat and was a prerequisite to completion of the permitting of the Eagle Mountain landfill project. Following completion of the land exchange, two lawsuits were filed ~~in Federal District Court located in Riverside County~~ challenging ~~the completed federal land exchange~~it and requesting its reversal. ~~To date, no immediate injunctive relief has been sought. All~~The plaintiffs argued that the ~~scheduled briefs for the litigation~~land exchange should have been ~~filed and we are waiting for a ruling from the court. We currently anticipate a ruling in 2003.~~

~~In addition to the federal land exchange litigation, the Company, along with the U.S. Department of Interior,~~reversed, because, among other reasons, the BLM the District and Metropolitan Water District of Southern California, received a letter in September 2002 from the Center for Biological Diversity, the Sierra Club, and Citizens for the Chuckwalla Valley (“Complaining Groups”) declaring their intent to sue for violations of the Endangered Species Act in regard to actions or inactions related to the railroad that would serve the landfill project. Among other things, it is alleged that that there has been a failurefailed to comply with ~~a biological opinion issued by~~ the National Environmental Policy Act and the Federal Land Policy and Management Act. The U.S. ~~Fish & Wildlife Service and~~District Court concluded that the ~~BLM has failed to enforce~~environmental impact statement was deficient in its explanation and/or environment analysis with regard to: (i) the ~~terms~~issue of ~~that biological opinion. In summary,~~eutrophication which deals with the ~~Complaining Groups are demanding enforcement~~introduction of nutrients, in this case primarily nitrogen, as a result of the ~~biological opinion or revocation by the BLM~~existence of the ~~right-of-ways granted~~landfill; (ii) Big Horn Sheep, which is not an endangered species; (iii) the statement of purpose and need for the ~~existing Eagle Mountain railroad~~Landfill Project; and (iv) the ~~Eagle Mountain road.~~reasonable range of alternatives to the proposed project. The ~~biological opinion contains, among other items, mitigation measures for the desert tortoise which could require substantial expenditures.~~

~~In reviewing the complaints~~court did rule in favor of the ~~Complaining Group, the BLM, out of an abundance of caution, conducted an informal consultation~~Landfill Project with ~~the U.S. Fish & Wildlife Service with respect~~regard to the biological opinion. Although regular use of the railroad has not commenced, the BLM requested that the Company develop a maintenance schedule for the railroad that would include addressing, among other things, the particular concerns of culverts and rail line ballast. During the first quarter of 2003, the Company submitted a proposed schedule which is currently being reviewed by the BLM.

environmental analysis and explanation for: (i) noise; (ii) night lighting; (iii) visual impacts; (iv) the desert tortoise; (v) groundwater; and (vi) air. The court also ruled that the environmental impact statement was deficient under the Federal Land Policy and Management Act with regard to: (i) the appraisal undertaken by the BLM in the land exchange; and (ii) a full discussion of the BLM’s conclusions on the public need for the landfill project.

The Company and the U.S. Department of Interior evaluated their alternatives with respect to the decision and each decided to appeal the decision to the U. S. 9^th Circuit Court of Appeals. There can be no assurance that the Company and the Department of Interior will be successful in their appeal. Oral argument in the case was held on December 6, 2007, before a three judge panel of the 9^th Circuit Court of Appeals. The U.S. 9^th Circuit Court of Appeals usually announces its decisions six to twelve months following oral argument. However, on occasion, the announcement of a decision may take substantially longer. If the U.S. District Court’s decision is fully affirmed on appeal, the decision would jeopardize the viability of the Landfill Project and could adversely impact the agreement to sell the Landfill Project to the District, including termination of the agreement.

In April 2007, Donna Charpied, et al, filed a motion with the same U.S. District Court seeking to enforce the court’s order in the above referenced case. On September 18, 2008, the U.S. District Court denied the Charpied motion. The plaintiffs’ allegations were that additional actions were necessary to set aside the land exchange and to prevent the use of property at Eagle Mountain that would “change the character and use of the exchanged properties …”. In the motion, the opponents objected to the military training that has taken place and may take place on Kaiser fee owned land at Eagle Mountain (even though military and law enforcement training previously took place at Eagle Mountain), the possible use of a portion of the Eagle Mountain Townsite for a prison facility (even though one operated successfully at the Eagle Mountain Townsite for over 12 years) and the possible use of rock from Eagle Mountain to help remediate acknowledged environmental problems at the Salton Sea located in Imperial and Riverside counties in Southern California.

The Court denied the Plaintiffs’ motion and determined that: (i) the BLM’s actions to date to set aside the land exchange were sufficient and that no reconveyance documents needed to be recorded; (ii) the military training activities that had taken place at Eagle Mountain did not change the character and use of the exchange lands; and (iii) the activities associated with the testing of the suitability of Eagle Mountain rock for use in a possible Salton Sea restoration plan were acceptable. The Court declined to rule on the challenge to a private prison project since there is no current private prison project.

Eagle Crest Energy Company. Eagle Crest Energy Company, referred to as ECEC, a previous opponent to the landfill project, currently has a preliminary permit with the Federal Energy Regulatory Commission, referred to as FERC, for a proposed 1,300 mega-watt hydroelectric pumped storage project and ancillary facilities to be located at the Company’s Eagle Mountain mine site. This project has been proposed in one form or another since 1991. This project is essentially the same project that ECEC previously proposed and was dismissed by the FERC in July 1999. ECEC is on its fourth preliminary permit. The proposed ECEC project would utilize two of the mining pits and other property at the Eagle Mountain Site, portions of which are currently leased to MRC and are the subject of the pending sale to the District. The Company has not agreed to sell or lease this property to ECEC. As a result of the October 1999 completed land exchange with the BLM, there is no title reservation on any portion of the property. As discussed below this may change if the land exchange is ultimately reversed. In January 2008 ECEC filed a preliminary application document with FERC in which it asserts that it will now be taking the steps necessary to seek a license from FERC. In June 2008 ECEC circulated a draft license application and we, along with others, submitted extensive comments on the draft license application document. For example, we continue to maintain that the landfill project and the proposed pump storage project are incompatible and that the proposed pumped storage project is not economically feasible. ECEC is continuing to take certain preliminary steps necessary to seek a license and we will continue to oppose such efforts.

If the completed land exchange is ultimately and permanently reversed in accordance with the September 2005 U.S. District Court decision, certain lands currently owned in fee by Kaiser will revert back to federal lands, although a substantial amount of such lands will then be controlled by Kaiser because of its federal mining claims. As a result of any final reversal to federal ownership, a portion of the land may be subject to a title encumbrance associated with the issuance of the preliminary permit to ECEC by FERC.

MRC Financing. Since Kaiser became an owner of MRC in 1995, MRC has been financed through a series of private placements to its existing equity owners. To cover the continuing costs of MRC such as the costs of the appeal, various anticipated closing matters and other similar items additional funding of up to $1.2 million payable in installments was completed in the third quarter of 2007 through a private placement to MRC’s existing members. The funding was payable in two installment with the first installment paid with a member’s subscription and the second installment was paid by March 31, 2008. Owners of approximately 94% of MRC participated in the private placement. However, since not all of the owners of MRC purchased their respective pro rata interest in the private placement, we purchased those interests. Accordingly, we invested an additional $1,057,000 in MRC through the private placement. As a result of this investment, our ownership interest in MRC increased from 82.48% to 83.13%. Even with the full $1.2 million raised from the completed private placement, additional funding will be required to complete the sale of the Landfill Project assuming MRC is successful in its appeal of the current federal land exchange litigation. There is no assurance that any such additional funding can be obtained or that it can be obtained on acceptable terms.

Risks. As is discussed in this ~~10-Q/A~~ Report on Form 10-Q and discussed in more detail in the Company’s ~~2002~~ Annual Report on Form ~~10-K/A,~~10-KSB for 2007, there are numerous risks associated with MRC and the Landfill Project, including the ~~competition represented by the Mesquite Landfill Project which was purchased by the District in December 2002. There are also~~ numerous risks and contingencies associated with the pending sale of the Landfill Project to the District. There can be no assurance that all outstanding matters currently preventing an initial closing with the District will be resolved to the satisfaction of the parties. Accordingly, there can be no assurance that the sale to the District will occur or that the current terms of the pending transaction may not be significantly modified or the contract terminated as a result of future discussions with the District or as a result of the adverse U.S. District Court decision. In addition, there can be no assurance: (a) that both parties will continue to extend the closing date; (b) as to the timing of the receipt of the purchase ~~price.~~ price if a closing does take place; and (c) that the ownership of the competing Mesquite Landfill Project by the District and its construction will not adversely impact the negotiations and the closing on the sale of the Landfill Project to the District.

The September 2005 decision of the U.S. District Court to reverse a completed land exchange with the BLM, if fully affirmed on appeal, jeopardizes the viability of Landfill Project. While the Company and the Department of Interior have appealed the decision, there can be no assurance that the appeal will be successful. In addition, no assurance can be made that we will successfully and timely resolve these matters so as to avoid a material adverse effect on the Landfill Project and on our current plan to sell the Landfill Project to the District. If we are unable to manage any of these risks or uncertainties, we may not have a viable Landfill Project and/or may not be able to sell the Landfill Project and thus the value of our Class A Units could be materially reduced.

In addition, there are ~~material litigation~~ risks ~~associated with~~that the ~~current federal land exchange litigation, as well as~~Landfill Project will be impacted by natural disasters like the ~~threatened litigation over~~floods that caused significant damage to a limited portion of the ~~Endangered Species Act.~~

rail line in 2003. Certain risks may be uninsurable or are not insurable on terms which we believe are economical.

West Valley MRF, LLC, referred to as “West Valley, ~~MRF” or “WVMRF”~~” was formed in June 1997 by Kaiser Recycling Corporation (now Kaiser Recycling, LLC (formerly Kaiser Recycling, Inc.)), a wholly-owned subsidiary of Kaiser, and West Valley Recycling & Transfer, Inc., a wholly-owned subsidiary of Burrtec Waste Industries, Inc. (“Burrtec”). This entity was formed to construct and operate the materials recovery ~~facility referred to as the West Valley MRF.~~

~~During the first quarter of 2003, West Valley MRF processed approximately 17,000 tons of municipal solid waste per week.~~

As a result of the continuing favorable performance of the West Valley MRF, during the first quarter of 2003 the primary lender to West Valley agreed to modify certain covenants in its loan agreements which allow greater flexibility in the distribution of cash to Burrtec and Kaiser as the members of West Valley.

~~We received a $750,000 cash distribution from the West Valley MRF in the first quarter of 2003.~~

The Company’s revenues from ongoing operations are primarily derived from the development of the Company’s long-term projects. The Company’s share of income related to its investment in the West Valley MRF is accounted for using the equity method.

Revenues and expenses from interim activities are generated from various sources. Significant components of interim activities include housing rental income, aggregate and rock sales and lease payments for the minimum security prison at the Eagle Mountain Townsite and other miscellaneous short-term activities. Due to the interim nature of these activities, the Company is presenting these revenues net of their related expenses.

~~Due to the developmental nature of certain Company projects and the Company’s recognition of revenues from bankruptcy-related and other non-recurring items, historical period-to-period comparisons~~

facility and is referred to as the West Valley MRF. This facility is permitted to receive up to 7,500 tons per day of municipal solid waste. Currently, the facility is processing approximately 4,000+ tons per day of municipal solid waste and recyclable materials.

Construction of the West Valley MRF was financed primarily by bonds issued by the California Pollution Control Finance Authority. The bonds have a variable interest rate that is adjusted weekly. As a result of the credit and liquidity crises in the financial markets, the interest rates for the bonds dramatically fluctuated during the third quarter. The rates have ranged from a low of 1.41% to a high of 8.55%; however, the average rate for the first nine months of 2008 has been 2.45%.

We have received $2.0 million in cash distributions from the West Valley MRF in 2008 through the third quarter of 2008 and an additional $500,000 in October 2008.

Risks. There are a number of risks associated with the West Valley MRF which are discussed in more detailed in the Company’s Annual Report on Form 10-K for 2007. Of particular concern are the risks associated with the financial and credit markets which have cause a dramatic increase in the interest rate on the outstanding bonds. These interest rates should decline once the U.S. credit crisis abates. Waste volumes are also being negatively impacted by the down-turn in the California economy. Until recently, the high price of fuel was negatively impacting operating margins and net earnings. Additionally the volatility of commodity prices and any material reduction in such prices, which are occurring, will negatively impact the revenues, margins and net income of the West Valley MRF. Competition for and loss of expiring waste contracts would also negatively impact the West Valley MRF. A material contract accounting for approximately one-third of the gross revenues of the West Valley MRF is currently scheduled to expire December 31, 2008, and its loss would materially adversely impact the West Valley MRF. West Valley MRF is currently bidding and in negotiations with regard to the municipal waste stream delivered pursuant to such contract but there is no guarantee that West Valley MRF will be successful in retaining the municipal waste stream that is represented by such contract or if West Valley MRF is ultimately successful in retaining such waste stream, that the current financial terms will remain in effect.

Until December 31, 2003, a portion of the Eagle Mountain Townsite was leased on a month-to-month basis to a company that operated a minimum security prison under contract with the State of California. Funding for many private prisons was eliminated from California’s 2003 - 2004 state budget as of December 31, 2003, including the private prison located at Eagle Mountain. During 2004 we developed and implemented a plan to mothball the Eagle Mountain Townsite. Although we are continuing our efforts to find a replacement tenant for the private prison, we have not had any success as of the date of this Report on Form 10-Q. However, portions of Kaiser’s fee owned land at Eagle Mountain have occasionally been leased to third parties in connection with the training of U.S. military personnel, the filming of commercials and other similar types of uses. We will continue to explore these types of opportunities for the use of the land and facilities at Eagle Mountain. However, opponents to the landfill project often attempt to prevent us from exploring and from implementing alternative uses for our fee owned land at Eagle Mountain. As of the date of this Report, there has not been any new military training at Eagle Mountain since opponents to the Landfill Project filed an ultimately unsuccessful motion in court to prevent the use of the Eagle Mountain property. For additional information, see “Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Business Update - Eagle Mountain Project - Landfill Project Litigation” above.

As a result of previous mining activities, it is estimated that there are over 150 million tons of rock stockpiled on our fee owned land at Eagle Mountain that is not a part of the Landfill Project. While we have sold and shipped rock of various quantities over the years, we are exploring marketing and other opportunities for the sale of material quantities of rock from this acreage.

The Company continues to consider the possible sale and other opportunities for its property at Lake Tamarisk including exploring development opportunities that may enhance the ultimate value and sale of such properties.

Due to the nature of the Company’s projects and the Company’s recognition of revenues from non-recurring items, historical period-to-period comparisons of total revenues may not be meaningful for developing an overall understanding of the Company. Therefore, the Company believes it is important to evaluate the trends in the components of its revenues as well as the recent developments regarding its long-term ongoing and interim revenue sources. See “Part I, Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - BUSINESS UPDATE” for a discussion of recent material events affecting the Company’s revenue sources.

Table of Major Variances in Net Loss for the Quarter Ended September 30, 2008 and 2007:

Analysis of Results for the Quarters Ended ~~March 31, 2003~~September 30, 2008 and ~~2002~~2007

~~An analysis of the significant components of the Company’s resource~~Revenues. Total revenues for the ~~quarters ended March 31, 2003 and 2002 follows:~~

Revenue from ~~ongoing operations increased 215% for~~ the ~~quarter to $862,000 from $274,000 in 2002, while interim activities (net of related expenses) declined to a net loss of $27,000 from net income of $5,000 in 2002.~~

~~Ongoing Operations~~~~. Income from~~Company’s equity method investment in the West Valley MRF increased by ~~$562,000~~$113,000 to ~~$809,000 due~~$765,000. This increase, which correlates to higher ~~equity income~~operating profit from the West Valley MRF, ~~during~~is due primarily to: (a) lower operating expenses; (b) lower depreciation expenses relating to fully depreciated equipment; and (c) reduced maintenance of rolling stock.

Revenue from Eagle Mountain operations increased to $46,000 for the ~~first~~third quarter of 2003 compared to the same period in 2002. This increase in equity income in the West Valley MRF is mainly due to: (a) increased transfer and greenwaste tonnage and recyclable sales ($560,000); (b) reduced repairs and maintenance expenses ($146,000); and (c) a decrease in depreciation and amortization expense ($30,000) being partially offset by an increase in direct operating relating expenses to the increased tonnages and revenues ($174,000).

~~Gain on Mill Site land sales~~~~. The Company recognized gains of $53,000 and $27,000 during the first quarters of 2003 and 2002, respectively,~~2008 from the sales of certain Mill Site property parcels that closed in 1997 and 1999. This increase in recognized gains is solely due to the early receipt of a quarterly payment on a note receivable and does not reflect an acceleration in the terms of the note.

~~Interim Activities (net)~~~~. Interim activities net of expenses for the first quarter of 2003 were a net loss of $27,000 compared to net income of $5,000~~$9,000 for the same period in ~~2002.~~2007. This ~~decline in interim activities (net) was expected and~~increase is primarily ~~due to~~ the ~~reimbursement~~result of ~~salaries~~the sale of scrap metal from surplus equipment, and expenses by Mine Reclamation LLC on a capital improvement project completed during 2002 ($41,000) being partially offset by slightly higher revenue from the Management Training Corporation (“MTC”) lease ($13,000). It is currently unknown whether funding for the private prison located at Eagle Mountain will be extended beyond June 30, 2003. If funding for the private prison is discontinued for any reason and/or

~~the MTC lease is terminated, Kaiser would significantly reduce its remaining Eagle Mountain operations~~machinery and ~~staffing. The Company has recorded a reserve for the costs of such a reduction in activity, the adequacy of which management periodically reviews.~~

~~Resource~~ Operating Costs. ~~Resource operating~~Operating costs ~~are those costs directly related~~increased to ~~the resource revenue (in this case environmental insurance costs relating to the Company’s historical operations). Total resource operating costs~~$493,000 for the ~~first quarters~~third quarter of ~~2002~~2008 from $485,000 for the same period in 2007. This increase relates primarily to: (a) legal and ~~2001 were both $80,000 due to the amortization expense~~consulting services associated with the development of the Eagle Mountain rock resources and the development of the Company’s ~~environmental insurance policy.~~land at Lake Tamarisk; and (b) an increase in personnel costs at Eagle Mountain.

Corporate General and Administrative Expenses.Corporate general and administrative expenses for the ~~first~~third quarter of ~~2003 decreased 52%~~2008 remained constant at $422,000 compared to ~~$426,000 from $886,000~~$423,000 for the same period in ~~2002. The decrease is primarily due~~2007 as minor cost increases were offset by increased cost allocations to ~~reduced staffing ($257,000) and lower professional and outside consulting expenses ($203,000).~~Mine Reclamation, LLC.

Net Interest and Investment Income. Net interest and investment income for the ~~first~~third quarter of ~~2003~~2008 was ~~$113,000~~a loss of $206,000 compared to ~~$185,000 in~~a gain of $123,000 for the same period in ~~2002.~~2007. This change is the result of a temporary reduction in the “Market Value” of investments during the quarter. The ~~change was due~~current U.S. credit crisis has caused some of the Company’s commercial paper investments to ~~a decrease~~decline in ~~interest~~value as of September 30, 2008. The Company expected to hold these investments to maturity so that this decline in market value at September 30, 2008, is considered temporary. As of January 2008 the Company has adopted FAS 159 “The Fair Value Option for Financial Assets and Financial Liabilities” which permits entities to choose to measure many financial instruments and certain other items at fair value. Investments are marked to market and unrealized earnings or loss is reflected in income ~~($72,000) relating to lower interest rates plus lower cash and~~for the period in which they are earned. For the quarter ended September 30, 2008, the adoption of FAS 159 decreased investment ~~balances.~~income by $256,000.

Pre-Tax Income (Loss) and Income Tax Provision. The Company recorded a pre-tax ~~income~~loss of ~~$442,000~~$310,000 in the ~~first~~third quarter of ~~2003~~2008 versus a pre-tax loss of ~~$502,000~~$124,000 for the same period in ~~2002. The only taxes imposed on the Company are a small gross revenue tax imposed by the State of California, and income taxes imposed on Business Staffing Inc., a subsidiary of the Company.~~2007. The Company is ~~now~~ taxed as a partnership and, thus, the Company’s results of operations (on an income tax basis) are ~~distributed~~allocated to the unit holders for inclusion in their respective income tax returns. ~~These~~There are, however, income taxes ~~amounted to $4,000 for~~imposed on the ~~first~~Company, and imposed on Business Staffing Inc., the Company’s only corporate subsidiary; and a gross revenue tax imposed by the State of California.

Net Loss.For the third quarter of ~~2003,~~2008, the Company incurred a net loss of $684,000, or $0.10 per unit, versus ~~$2,000~~a loss of $126,000, reported for the same period in ~~2002.~~2007.

Table of Major Variances in Net Loss for the Nine Months Ended September 30, 2008 and 2007:

Revenues. Total revenues for the first nine months of 2008 were $1,979,000, compared to $2,139,000 for 2007. The reasons for this decrease are discussed below.

Revenue from the Company’s equity method investment in the West Valley MRF increased by $71,000 to $1,872,000 for the first nine months of 2008 as compared to the same period in 2007. This increase, which correlates to higher operating profit from the West Valley MRF, is due primarily to: (a) lower operating and partnership expenses; (b) lower depreciation expenses relating to fully depreciated equipment; and (c) the absence of periodic adjustments to the allowance for doubtful accounts relating to disputed transportation rates with one customer, which was settled in September 2007.

Revenue from Eagle Mountain operations for the first nine months of 2008 decreased to $107,000 from $338,000 for the same period in 2007. This decrease is primarily the result of decreased utilization of our fee owned property for military training and media activities.

Operating Costs. Operating costs increased to $1,475,000 for the first nine months from $1,213,000 for the same period in 2007. This increase relates primarily to: (a) legal and consulting services

associated with the development of the Eagle Mountain rock resources and the development of the Company’s land at Lake Tamarisk; and (b) an increase in personnel costs at Eagle Mountain.

Corporate General and Administrative Expenses.Corporate general and administrative expenses for the first nine months of 2008 decreased 5% to $1,346,000 from $1,412,000 for the same period in 2007 primarily due to lower expenses related to the executive “New Business Participation Bonuses” for which there were none recorded in 2008.

Net ~~Income.~~Interest and Investment Income (Loss). Net interest and investment loss for the first nine months of 2008 was $54,000 compared to a gain of $359,000 for the same period in 2007. This change is the result of a temporary reduction in the “Market Value” of investments during the year. The current U.S. credit crisis has caused some of the Company’s commercial paper investments to decline in value as of September 30, 2008. The Company expected to hold these investments to maturity so that this decline in market value at September 30, 2008, is considered temporary. As of January 2008 the Company has adopted FAS 159 “The Fair Value Option for Financial Assets and Financial Liabilities” which permits entities to choose to measure many financial instruments and certain other items at fair value. Investments are marked to market and unrealized earnings or loss is reflected in income for the period in which they are earned. As of September 30, 2008, the adoption of FAS 159 decreased investment income by $266,000 year-to-date.

Pre-Tax Loss and Income Tax Provision. The Company recorded a pre-tax loss of $896,000 in the first nine months of 2008 versus a pre-tax loss of $127,000 for the same period in 2007. The Company is taxed as a partnership and, thus, the Company’s results of operations (on an income tax basis) are allocated to the unit holders for inclusion in their respective income tax returns. There are, however, income taxes imposed on the Company; and imposed on Business Staffing Inc., the Company’s only corporate subsidiary; and a gross revenue tax imposed by the State of California.

Net Loss.For the first ~~quarter~~nine months of ~~2003,~~2008, the Company ~~reported~~incurred a net ~~income~~loss of ~~$438,000,~~$1,382,000, or ~~$0.06~~$0.19 per unit, versus a net loss of ~~$504,000,~~$137,000, or ~~$0.07~~$0.02 per unit, reported for the same period in ~~2002.~~2007.

Cash, and Cash Equivalents and Short-Term Investments. The Company defines cash equivalents as highly liquid debt instruments with original maturities of 90 days or less. Cash and cash equivalents ~~decreased $5,185,000~~increased $18,000 to ~~$5,162,000~~$1,437,000 at ~~March 31, 2003~~September 30, 2008 from ~~$10,347,000~~$1,419,000 at December 31, ~~2002.~~2007. Included in cash and cash equivalents is ~~$1,824,000~~$960,000 and ~~$1,335,000~~$905,000 held solely for the benefit of MRC at ~~March 31, 2003~~September 30, 2008 and December 31, ~~2002,~~2007, respectively. The ~~decrease~~increase in cash and cash equivalents is primarily due to net short-term investment activity which included the ~~investment, net,~~liquidation of ~~excess cash in~~some short-term investments ~~of $6,040,000 and capital expenditures of $281,000 being partially offset by the collection of accounts receivable of $513,000 and a distribution~~($830,000), cash distributions from the West Valley MRF of ~~$750,000.~~$2.0 million, and additional minority interest investment in MRC received from third parties of $57,000. These increases were partially offset by net other cash used for operations of $2,530,000, capitalized landfill expenditures of $281,000, and capital expenditures of $59,000.

Working Capital. During the first ~~quarter~~nine months of ~~2003,~~2008, current assets ~~increased $1.4~~decreased $844,000 to $10.9 million, ~~to $12.8 million, while~~and current liabilities ~~increased $52,000~~decreased $149,000 to ~~$1.0~~$2.1 million. The ~~increase~~decrease in current assets ~~resulted primarily from~~was the ~~$7,067,000 increase~~net result of a decrease in short-term investments ~~being mostly offset by~~of $830,000; a ~~$5,185,000~~ decrease in accounts and other receivable of $32,000 which relates primarily to accounts receivable trade and an increase of $18,000 in cash and ~~cash~~ equivalents ~~and a $513,000 decline in accounts receivable. Included~~as discussed above. The decrease in current liabilities asis the net of ~~March 31, 2003, is $125,000~~a $22,000 decrease in accounts ~~payable and~~payable; a $156,000 decrease in accrued liabilities ~~relating to MRC.~~as a result of Business Staffing Inc. (a subsidiary of the Company) payments of accrued bonuses, unit grants and income taxes; and a $29,000 increase in taxes payable. As a result, working capital ~~increased~~decreased during the first ~~quarter~~nine months of ~~2003~~2008 by ~~$1.3 million~~$695,000 to ~~$11.8~~$8.8 million at ~~March 31, 2003.~~

~~Short-Term and Long-Term Investments.~~ ~~At March 31, 2003, the Company had $9.8 million of its excess cash reserves invested in high-grade marketable commercial paper, bond funds, and corporate~~September 30, 2008.

~~bonds with maturities that closely match~~Accounts Receivable and Other (Net). During the first nine months of 2008, accounts receivable and other (net) decreased by $32,000 which is primarily a reduction in Accounts Receivable Trade.

Short-Term Investments. During the first nine months of 2008, short-term investments decreased by $830,000. This is the net result of the sale of a portion of the Company’s ~~anticipated future~~investments to provide cash ~~requirements. In regard~~for operations and for additional funds required to maintain our investment in Mine Reclamation, LLC, and the ~~maturity dates~~adoption of ~~these~~FAS 159. At September 30, 2008, the Company had $7.2 million of its excess cash reserves invested in such investments. As of January 1, 2008, the Company has adopted (SFAS) No. 159,The Fair Value Option for Financial Assets and Financial Liabilities. Investments are marked to market and unrealized earnings are reflected in the value of the investment and in income for the period for which they are earned. As of September 30, 2008, the adoption of FAS 159 decreased the value of short-term investments ~~$7.1 million was classified as a current asset while $2.7 million was classified as a long-term asset.~~

Investments. ~~There~~The Company’s equity share of income from the investment in the West Valley MRF, for the first nine months of the year was offset by the receipt of cash distributions totaling $2.0 million resulting in a ~~$59,000 increase~~$129,000 decrease in the Company’s investment in the West Valley ~~MRF~~MRF. Our investment in the Landfill Project increased $281,000 during the first nine months of 2008 due to continuing landfill development activities which were capitalized. Additionally, in June 2007 the Company approved a subscription agreement with MRC to provide, at a minimum, an additional $990,000 in working capital for MRC. The first installment of 60% ($594,000) of the minimum subscription amount was paid during the second quarter of 2007, the second and final installment was paid during the first quarter of ~~2003~~2008. Since all the owners of MRC did not purchase their respective pro rata interest in the private placement, we purchased the balance of such units, resulting ~~from~~in an additional investment. Accordingly, as a result of the ~~Company’s recording of $809,000 from its equity share of income during the period being almost completely offset by receipt of a $750,000 cash distribution. Our~~last private placement our additional investment in MRC was a total of $1,057,000. As a result of the ~~Eagle Mountain Landfill~~private placement, our ownership interest in MRC increased ~~$383,000 during the first quarter of 2003 due~~from 82.48% to ~~continuing landfill development activities.~~83.13%.

Other Assets. ~~The~~For the first nine months of the year there was a decrease in other assets ~~($257,000) relates to decreases in notes receivable due to~~of $772,000 which is the ~~receipt~~result of ~~recurring payments ($114,000),~~ the amortization of the environmental insurance policy ~~($80,000), and~~of $225,000, an increase in accumulated depreciation as of ~~March 31, 2003 ($63,000).~~September 30, 2008 of $278,000 and the reversal of a deferred tax asset of $328,000, which was previously anticipated to be refundable. These decreases were partially offset by the capitalization of building and water system repairs of $59,000.

Environmental ~~Remediation Liabilities.~~Remediation. As of March 31, 2003, based upon current information, we estimate that our future environmental liability related to certain matters and risks not assumed by CCG Ontario, LLC, a subsidiary of Catellus Development Corporation, a New York Stock Exchange company, in its purchase of the Mill Site Property (August 2000), including a certain groundwater matter as well as potential matters at Eagle Mountain and at other historical locations and other possible third party claims, would be approximately $2.4 million. In the event a claim for damages is filed against the Company that relates to the remaining $2.4 million reserve, management believes that the claim may be covered by insurance depending upon the nature and timing of the claim.

The Company purchased, effective June 30, 2001, a 12-year $50 million insurance policy, which is expected to cover substantially any and all environmental claims (up to the $50 million policy limit) relating to the historical operations of the Company.

~~Long-term Liabilities~~~~. The decrease~~ As of June 30, 2008, based upon current information, we estimate that our future environmental liability related to certain matters and risks not assumed by CCG Ontario, LLC, a subsidiary of ProLogis, in ~~other long-term liabilities~~its purchase of the Mill Site Property August 2000 would be approximately $2.8 million for which a reserve has been established. In the event a claim for damages is ~~primarily due~~filed against the Company that relates to this reserve, management believes that the ~~recognition~~claim may be covered by insurance depending upon the nature and timing of ~~gains on real estate sales ($53,000).~~the claim.

Minority Interest. As of ~~March 31, 2003,~~September 30, 2008, the Company has recorded ~~$5,685,000~~$5,322,000 of minority interest relating to the approximately ~~18%~~17.0% ownership interest in MRC the Company does not own.

Contingent Liabilities. The Company has contingent liabilities more fully described above and in the notes to the financial statements.

The Company’s accounting policies are more fully described in the Notes to the Financial Statements included in the Company’s Annual Report on Form ~~10-K/A~~10-KSB for the year ended December 31, ~~2002.~~2007. As disclosed in the Notes to the ~~2002~~2007 Annual Financial Statements, the preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions about future events that affect the amounts reported in the financial

statements and accompanying notes. Future events and their effects cannot be determined with absolute certainty and therefore, the determination of estimates requires the exercise of judgment. Actual results inevitably will differ from those estimates, and such differences may be material to the financial statements.

The Company believes the following critical accounting policies are important to the portrayal of the Company’s financial condition and results.

Investments. The Company accounts for investments under the provisions of Statement of Financial Accounting Standards (SFAS) No. 115, ~~“Accounting~~Accounting for Certain Investments in Debt and Equity Securities.” The Company ~~has investments~~invests its’ excess cash reserves in ~~two bond funds that it classifies as “trading” and are marked to market with any gain or loss reflected in the statement of operations. The Company also has investments in~~high grade commercial paper (Standard & Poor’s rating of “A” or above), and ~~debt instruments,~~U.S. government bonds which it classifies as ~~“held-to-maturity”~~“available-for-sale” and which are recorded at the purchase price of the security plus or minus the ~~amortization of the~~ discount or premium paid. ~~Subsequent~~As of January 1, 2008, the Company has adopted (SFAS) No. 159,The Fair Value Option for Financial Assets and Financial Liabilities. This statement permits entities to ~~March 31, 2003,~~choose to measure many financial instruments and certain other items at fair value. Investments are marked to market and unrealized earnings are reflected in income for the period in which they are earned. Due to the current U.S. credit crisis, the fair value of the Company’s commercial paper investments ~~at each reporting period, may be classified as “available-for-sale” that will be marked~~have fluctuated significantly. However, the Company expects to ~~market with~~hold these investments to maturity, thereby mitigating any ~~unrealized gain or loss reflected as an increase or decrease to the investment and a corresponding increase or decrease to comprehensive income which is a component of members’ equity.~~unknown fluctuations in fair value.

Investment in West Valley MRF, LLC. The Company accounts for its investment in West Valley MRF, LLC, the owner of West Valley MRF, under the equity method of accounting because of the Company’s 50% non-controlling ownership interest.

Landfill Permitting and ~~Development~~Development.. Through its ~~81.78%~~83.13% interest in ~~Mine Reclamation, LLC,~~MRC, the Company has been developing, for sale to a municipal entity or operating company, its property known as the Eagle Mountain Site in the California desert for use as a rail-haul municipal solid waste landfill. Pursuant to SFAS No. 67,Accounting for Costs and Initial Rental Operations of Real Estate Projects, capitalizable landfill site development costs are recorded at cost and will be expensed when management determines that the capitalized costs provide no future benefit.

~~Long-Lived Assets.~~ ~~In accordance with SFAS No. 144,~~~~Accounting for the Impairment or Disposal of Long-lived Assets,~~ ~~long-lived assets are evaluated for potential impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.~~

Environmental Insurance and Environmental Remediation Liabilities. The Company’s $3.8 million premium for the prospective insurance policy, which was reduced by a refund from the insurance carrier, is capitalized as a long-term asset and is being amortized on a straight-line basis over the twelve (12) year term of the policy. To the extent a pre-existing liability has not been recorded, claims made for environmental matters are recorded as litigation accruals in the Company’s consolidated financial statements pursuant to FAS No. 5 when it becomes probable that a loss has been incurred and the amount of such loss can be reasonably estimated. Claims accepted by the insurance company pursuant to coverage under the policy are recorded as insurance receivables when coverage is accepted and the amount to be paid by the insurance company can be reasonably estimated.

Revenue Recognition. Revenues are recognized when the Company has completed the earnings process and an exchange transaction has taken place.

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 that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

~~In November 2002, the~~Uncertain Tax Benefits.The Company adopted Financial ~~Accounting~~ Standards Board ~~(FASB) issued~~ Interpretation No. ~~45,~~~~Guarantor’s~~48 Accounting ~~and Disclosure Requirements~~ for ~~Guarantees, Including Indirect Guarantees~~Uncertainty in Income Taxes (“FIN 48”) an interpretation of ~~Indebtedness of Others~~ ~~(FIN No. 45). This Interpretation also incorporates, without change,~~FASB Statement 109 (“SFAS 109”) effective January 1, 2007. Because the ~~guidance~~Company is a limited liability company, it has no

unrecognized tax benefits and the adoption of FIN 48 had no impact on the Company’s financial statements.

~~in FASB~~Conditional Asset Retirement Obligations. In March 2005, the Financial Accounting Standards Board issued, Interpretation No. ~~34,~~~~Disclosure~~47. “Accounting for Conditional Asset Retirement Obligations, an interpretation of ~~Indirect Guarantees of Indebtedness of Others~~~~, which is being superseded. In addition to its disclosure requirements,~~ FASB Statement No. 143” (“FIN ~~No. 45 requires~~47”) clarifying and interpreting the ~~guarantor to recognize, at the inception of a guarantee, a liability for the obligations undertaken in issuing the guarantee, including its ongoing~~legal obligation to ~~stand ready to~~ perform ~~over~~an asset retirement activity in which the ~~term~~timing and/or settlement are conditional on a future event that may or may not be within the control of the ~~guarantee in~~Company. The Company adopted FIN 47 effective as of December 31, 2005. Based upon currently available information, the ~~event~~Company estimated that the ~~specified triggering events or conditions occur. The initial measurement~~conditional asset retirement obligations related to possible future abatement for asbestos-containing products in certain of the ~~liability is~~viable structures at Eagle Mountain would approximate $1.2 million. Pursuant to the fair value of the guarantee at its inception. The initial recognition and measurement provisions of FIN No. 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002, irrespective of the guarantor’s fiscal year-end. The disclosure requirements of FIN ~~No. 45 are effective for financial statements~~47, the Company increased its environmental reserve as of interim or annual periods ending after December 15, 2002. The Company has concluded that there is no effect on its consolidated financial position or results of operations of adopting the initial recognition and measurement provisions of FIN No. 45.

On December 31, 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure.” SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based Compensation,” to provide alternative methods of transition to the fair value method of accounting for stock-based employee compensation. SFAS No. 148 also amends the disclosure provisions of SFAS No. 123 and APB Opinion No. 28, “Interim Financial Reporting,” to require disclosure in the summary of significant accounting policies of the effects of an entity’s accounting policy with respect to stock-based employee compensation on reported net earnings and earnings per share in annual and interim financial statements. While SFAS No. 148 does not amend SFAS No. 123 to require companies2005 by $1.2 million to account for ~~employee stock options using~~these conditional obligations and increased the ~~fair value method,~~carrying amount of the ~~disclosure provisions~~associated structures at Eagle Mountain by a comparable amount. This increased cost basis is being depreciated over the remaining estimated time that such assets will be owned by the Company, which is currently estimated to be approximately 4 years beginning as of January 1, 2006.

Long-Lived Assets. In accordance with SFAS No. ~~148~~144,Accounting for the Impairment or Disposal of Long-lived Assets, long-lived assets are ~~applicable to all companies with stock-based employee compensation, regardless~~evaluated for potential impairment whenever events or changes in circumstances indicate the carrying amount of ~~whether they account for that compensation using the fair value method of SFAS No. 123 or the intrinsic value method of APB Opinion No. 25. The Company adopted SFAS No. 148 on December 31, 2002.~~

The statements contained in this Business Outlook, as well as in “Part I - Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF ~~OPERATIONS-~~OPERATIONS - BUSINESS UPDATE”, are based upon current operations and expectations. In addition to the forward-looking statements and information contained elsewhere in this Report on Form ~~10-Q/A,~~10-Q, these statements are forward-looking and, therefore, actual results may differ materially. See the Company’s disclosure regarding forward-looking statements in the section entitled “Forward-Looking Statements” above.

Ongoing ~~Operations.~~Operations. As noted above, our revenues from ongoing operations have, in the past, generally been derived from the performance of our major long-term development projects and investments. ~~Certain~~We have previously sold most of ~~these~~our projects and ~~investments, such as~~investments. Our principal remaining assets and projects, other than cash and securities, are: (i) the MRC Landfill Project; (ii) our 50% equity ownership of the West Valley MRF; (iii) miscellaneous property at or near the Eagle Mountain Townsite; and (iv) the millions of tons of rock stockpiled at the Eagle Mountain Site on our fee owned property that is not a part of the Landfill Project. We have no material ongoing operations except in connection with such assets and projects. Our principal sources of ongoing income are derived from the West Valley MRF ~~are essentially complete~~ and ~~we have been recognizing significant revenues and income from them.~~our investments. We will continue to evaluate ~~all of~~ our remaining assets and investments in light of how to best provide maximum value to our members.

In regard to the West Valley MRF, the most significant ~~factor~~factors affecting our future equity income from the West Valley MRF is the profitability of the expansion of the facility’s capacity from 2,000 to 5,000 tons per day completed in 2001. The expansion enlarged the processing facility by an additional 80,000 square feet and provides for additional materials recovery sorting capacity. The ultimate success of this expansion will continue to depend upon: (i) on the ability of the West Valley MRF to ~~attract new~~retain customers and waste volumes at attractive processing rates; on(ii) recyclable commodity prices; (iv) the ability to increase prices to reflect increases in such items as transportation, labor and ondisposal costs and (iv) future competition from competing facilities. With regard to retaining customers, a major municipal waste contract, accounting for approximately one-third of the West Valley MRF’s gross revenues, is currently set to expire on December 31, 2008. West Valley MRF is bidding to retain the municipal waste stream represented by such contract but there can be no assurance that West Valley MRF will be successful in retaining such waste stream or that the current financial terms will remain in effect. Commodity prices have fluctuated dramatically and this volatility impacts the West Valley MRF’s revenue both positively and negatively. During the first quarter of 2008 the West Valley MRF adopted and implemented a new commodity rebate program for municipalities utilizing the West Valley MRF. As commodity prices

achieve certain price levels, the participating municipalities will participate, via a bonus rebate, in the increase in commodity prices above established levels. However, due to the current world-wide economic conditions and other factors, commodity prices starting in the third quarter of 2008, have begun to decline dramatically. If this decline continues it will have a material negative impact on the WVMRF’s profitability. Additionally, West Valley is continuing the process of evaluating possible waste-to-energy and composting projects that might be capable of utilizing a portion of the municipal solid waste received at the facility. During 2008 capital improvements were made to the West Valley MRF costing $812,000.

As part of our strategy, we intend to evaluate any potential offers to purchase our interest in ~~the~~ West Valley ~~MRF~~ or other alternatives in light of our primary objective of maximizing value. ~~The~~ West Valley ~~MRF~~ currently generates more than sufficient cash flow to fund its cost of operations and does not require additional investment by us. Furthermore, ~~the~~ West Valley ~~MRF~~ should continue to generate sufficient cash distributions to cover a significant portion of Kaiser LLC’s foreseeable general and administrative costs.

Pending Sale of Eagle Mountain Landfill ~~Project.~~Project. As discussed in more ~~detailed~~detail in ~~“Item~~“Part I - Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - BUSINESS UPDATE - Eagle Mountain Landfill ~~Project” in~~Project and Pending Sale.” In August 2000, MRC entered into that certain Agreement For Purchase and Sale of Real Property and Related Personal Property In Regard To The Eagle Mountain Sanitary Landfill Project and Joint Escrow Instructions (“Landfill Project Sale Agreement”) with the District. In summary, the landfill project (which includes our royalty payments under the MRC Lease) is under contract to be sold to the District for $41 ~~million.~~million plus an estimated approximate $8.3 million in accrued interest from May 2001 to the date of this Report on Form 10-Q. The exact future timing of any initial closing is currently unknown and there are a number of risks associated with the project and certain conditions that must be satisfied before the sale of the ~~District.~~District, including resolution of the outstanding federal land exchange litigation discussed below. Kaiser’s equity interest in MRC is currently 83.13%.

~~Upon closing of the~~Assuming there is a sale of the landfill project, ~~$39~~$41 million of the total purchase price will be deposited into an escrow account and will be released when any litigation contingencies are fully resolved. ~~The~~As of the date of this Report, the only litigation ~~contingencies are~~contingency is the federal litigation challenging the completed federal land exchange. In September 2005 the Company received an adverse U.S. District Court decision in the land exchange litigation that may materially impact the validity of the Landfill Project. The decision was adverse to the landfill project in that it set aside the land exchange completed between the Company and BLM as well as two BLM rights-of-way. The Company and the Department of Interior appealed the decision. Oral argument on this case was held on December 6, 2007. The U.S. 9^th Circuit of Appeals usually announces its decision six to twelve months following oral argument. However, on occasion the announcement of a decision may take substantially longer. If the decision is fully affirmed on appeal, the decision would jeopardize the viability of the landfill project. In addition, the decision could adversely impact the agreement to sell the Landfill Project to the District, including termination of the Landfill Project Sale Agreement. For a more detailed discussion of this litigation and the risks associated with this litigation, see “Part I - Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - BUSINESS UPDATE - Eagle Mountain Landfill Project and Pending Sale.” Although closing has not occurred, interest began to accrue on this portion of the purchase price in May 2001, and will be paid out to MRC on a quarterly basis beginning with a successful outcome of the federal litigation regarding the land exchange with the BLM at the Federal District Court level for a period of up to four years. Also upon closing, the remaining $2 million of the purchase price will also be placed into an escrow account and will be released upon the later of (1) the release of the $39 million as described above or (2) the permitting approvals of the District’s Puente Hills landfill for its remaining 10 years of capacity.

Mill Site Property.The only remaining Mill Site Property owned by the Company is an approximate five acre parcel referred to as the Tar Pits Parcel. CCG Ontario, LLC substantially completed the environmental remediation of this parcel pursuant to the terms of its agreement during 2002. West Valley has the ~~third quarter of 2002.~~right to purchase the Tar Pits Parcel for $1.00.

Sale of Miscellaneous ~~Properties.~~Properties, Eagle Mountain Townsite, and other Possible Opportunities.We are continuing to seek buyers for our miscellaneous properties, most of which are located at or near our Eagle Mountain ~~facility.~~facilities and we are continuing to seek tenants and other uses for the private prison facility in the Eagle Mountain Townsite. However, the September 2005 adverse U.S. District Court

decision involving a completed land exchange between Kaiser and the BLM may hinder our efforts at Eagle Mountain. Additionally, due to the passage of time and the impacts of weather, a number of buildings and old houses at the Eagle Mountain Townsite are deteriorating at a faster rate than anticipated and may not be salvageable. Accordingly, we may need to demolish or rehabilitate a number of structures over the next several years.

In addition, we are exploring possible opportunities for the sale of rock from our fee owned land at Eagle Mountain. As a result of past mining activities, an estimated 150+ million tons of rock of various sizes were stockpiled near the Eagle Mountain Townsite on our fee owned land that is not a part of the Landfill Project. Sales of rock would be from property that is not a part of the Landfill Project.

We will continue to explore the development and use of our property at Lake Tamarisk and at Eagle Mountain for other purposes. For example, at Lake Tamarisk we currently have certain lots listed for sale. With regard to the Eagle Mountain Site, military and law enforcement training exercises have taken place in the past on portions of our fee owned property. However, no military training has occurred since January 2007 because of the uncertainty associated with the federal land exchange litigation. We continue to explore and pursue these types of opportunities.

Tender Offers. As previously discussed under “Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF OPERATIONS - BUSINESS UPDATE - Tender Offers” in late September 2008, affiliates of MacKenzie Patterson & Fuller, LP launched a tender offer to the Company’s unitholders offering to purchase up to 1,400,000 of the Company’s Class A Units at $.50 less certain transfer costs. The MacKenzie tender offer terminated on October 30, 2008. MacKenzie terminated its offer without purchasing units. Under the terms of its Member’s Operating Agreement, the Company is to be reimbursed for costs associated with any proposed transfer which would include the costs associated with responding to the MacKenzie Offer. Since these costs are not likely to be reimbursed by MacKenzie, the Company will ultimately bear the burden for such costs. Similarly, the Company has incurred and will continue to incur costs associated with the Company Offer and the transfer of units purchased as well as the $.90 per unit purchase price. This will impact the amount of our cash balances.

Corporate Overhead.As Given our current assets and projects, it is unlikely that we will be able to further reduce personnel and corporate overhead in the near future. However, as we divest our remaining assets, we intend to ~~adjust our~~further reduce corporate staffing and overhead to reflect the reduced requirements of our remaining operations and projects. The costs of such reductions shall be recorded at the time the decision to make such reductions is made by the Company.

Capital Resources. Even with the expenses associated with the tender offers and the cost of purchasing any units tendered, Kaiser LLC expects that its current cash balances and short-term ~~and long-term~~ investments together with cash generated from the West Valley MRF, ~~notes~~note receivables and any future asset sales will be sufficient to satisfy ~~our~~the Company’s ongoing projected operating cash requirements ~~for~~over the next ~~3-4~~several years.

We have been developing our remaining assets and then selling them at such times and on such terms as we believe ~~optimize~~optimizes the realizable value for a particular project or asset. During 2000 and 2001, we: (i) sold the balance of our real estate at the former KSC mill site near Fontana, California, except for an approximate five acre parcel, the Tar Pits Parcel; (ii) entered into an agreement to sell the landfill project to the District for an aggregate of $41 million plus accrued interest, with MRC and the District working toward a closing on such transaction; (iii) sold our interest in Fontana Union to Cucamonga; and (iv) paid a total of $12.00 per share in cash distributions to Kaiser Inc.’s stockholders. In continuing this strategy, our current plans include:

To resolve favorably the outstanding federal land exchange litigation and to complete the sale of the landfill ~~project and to resolve favorably the related outstanding federal land exchange litigation related to that~~ project. Although the closing with the District was originally scheduled to occur during ~~2003,~~2002, this sale is subject to the satisfaction of numerous conditions and, as a result, this date has been extended numerous times, and we cannot be sure when or if this sale will ultimately close. ~~If the sale transaction is completed, we~~We do not expect to receive any ~~substantial~~ cash from the sale until and if the ~~related~~federal land exchange litigation ~~matters are resolved, which may be several years.~~matter is successfully resolved. See ~~“Item~~“Part I - Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - BUSINESS UPDATE - - Eagle Mountain Landfill Project and ~~Sale of Landfill Project”~~Pending Sale”;

To continue to hold our interest in West Valley, ~~MRF,~~ which pays significant cash distributions to us, until we believe we can ~~maximize value;~~negotiate a sale of our interest or otherwise create enhanced value for our members from the West Valley MRF; and

To maximize our revenue as we attempt to sell our remaining miscellaneous assets, such as our surplus property in ~~Southern California;~~Riverside County, California. Our activities in this regard currently include exploring both development opportunities at our Lake Tamarisk properties and the sale of rock from fee owned property at Eagle Mountain that is not a part of the Landfill Project.

~~To reduce our general~~The Company currently expects to terminate operations and ~~administrative expenses as appropriate.~~

distribute substantially all available cash to its members once the cash maximization strategy is completed. The September 2005 adverse U.S. District Court decision concerning the Landfill Project will affect the completion date for, and may ultimately alter this strategy. The Company currently does not expect completion of this strategy until 2009 at the earliest.

~~Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~Conversion. In November 2001, the stockholders of Kaiser Inc. overwhelmingly approved the conversion of Kaiser Inc. into a newly-formed limited liability company pursuant to a merger between the Kaiser Inc. and Kaiser LLC. In this conversion, Kaiser Inc.’s stockholders received $10.00 in cash plus one Class A Unit for each share of common stock in Kaiser Inc. The conversion to a limited liability company and the resulting cash payment to stockholders was an important step in the implementation of the cash maximization strategy.

Insurance. In furtherance of the cash maximization strategy, we purchased an insurance policy in 2001 that is designed to provide broad commercial general liability, pollution legal liability, and contractual indemnity coverage for our ongoing and historical operations. The aggregate cost for this policy was approximately $5.8 million, of which KSC Recovery paid $2.0 million and the Company paid $3.8 million.

Within the 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.

Based on its review of the Company’s disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective in timely alerting them to material information relating to the Company (including its subsidiaries) that is required to be included in the Company’s periodic Securities and Exchange Commission filings. There were no significant changes in internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

[THE R~~EMAINDER~~OF~~THIS~~ P~~AGEWAS~~ I~~NTENTIONALLY~~ L~~EFT~~ B~~LANK~~]

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

At ~~March 31, 2003~~September 30, 2008 and December 31, ~~2002,~~2007, Kaiser Ventures LLC had 751,956 Class B Units; ~~952~~872 Class C Units; and 48128 Class D Units outstanding.

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

The unaudited consolidated financial statements ~~as of March 31, 2003~~ of Kaiser Ventures LLC and Subsidiaries (the “Company”) as of June 30, 2008 and ~~for the three month periods ended March 31, 2003 and 2002,~~2007, as well as related notes, should be read in conjunction with the Company’s audited consolidated financial statements and related notes as of and for the year ended December 31, ~~2002.~~2007, included in the Company’s Annual Report on Form 10-KSB. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary (all of which are normal and/or recurring in nature) to present fairly the Company’s financial position at ~~March 31, 2003,~~September 30, 2008, and results of operations and cash flows for the three and nine month periods ended ~~March 31, 2003~~September 30, 2008 and ~~2002.~~2007.

The Company’s consolidated financial statements include the following significant entities: Lake Tamarisk Development, LLC; Kaiser Eagle Mountain, LLC; Kaiser Recycling LLC; Business Staffing, Inc. all of which are 100% owned; and Mine Reclamation, LLC, which is 83.13% owned.

Kaiser is the reorganized successor to Kaiser Steel Corporation, referred to as KSC, which was an integrated steel manufacturer that filed for bankruptcy protection in 1987. Since KSC’s bankruptcy, we have been developing assets remaining after the bankruptcy and have realized substantial value from certain of those assets. Currently, our principal remaining assets are: (i) an 83.13% ownership interest in Mine Reclamation, LLC, (referred to as MRC), which owns a permitted rail-haul municipal solid waste landfill at a property called the Eagle Mountain Site located in the California desert (the “Landfill Project”). This landfill is currently subject to a contract for its sale to County District No. 2 of Los Angeles County (which we refer to as the District) for approximately $41 million plus accrued interest, which sale is subject to a number of conditions, several of which remain to be fully satisfied; (ii) a 50% ownership interest in the West Valley Materials Recovery Facility and Transfer Station, a transfer station and materials recovery facility located on land acquired from Kaiser, which we refer to as the West Valley MRF; and (iii) approximately 5,400 additional acres owned or controlled by Kaiser at the Eagle Mountain Site that are not included in the pending sale to the District. However, a September 2005 adverse U.S. District Court decision involving a federal land exchange may impact the viability of the Landfill Project and its planned sale to the District.

~~Investments.~~ The Company accounts for investments under the provisions of Statement of Financial Accounting Standards No. 115 “Accounting for Certain Investments in Debt and Equity Securities.” The Company has investments in two bond funds that it classifies as “trading” and are marked to market with any gain or loss reflected in the statement of operations. FAS 115 requires any activity in this account between reporting periods to be reflected in the Consolidated Statement of Cash Flows as an operating activity rather than an investing activity. As a result, the Company’s reported net cash flows from operating activities for the first three months of 2003, reflects as a use of cash, the $5.0 million in cash that the Company invested in the two bond funds. The Company also has investments in commercial paper, and debt instruments, which it classifies as “held-to-maturity” and are recorded at the purchase price of the security plus or minus the amortization of the discount or premium paid. See Note 4 for additional information relating to the classification of investments.

~~Stock Based Compensation.~~ ~~On December 31, 2002, the FASB issued~~ SFAS No. 148, “Accounting for Stock-Based Compensation - Transition and Disclosure.” SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based Compensation,” to provide alternative methods of transition to157. On January 1, 2008, the fair value method of accounting for stock-based employee compensation. SFAS No. 148 also amends the disclosure provisions of SFAS No. 123 and APB Opinion No. 28, “Interim Financial Reporting,” to require disclosure in the summary of significant accounting policies of the effects of an entity’s accounting policy with respect to stock-based employee compensation on reported net earnings and earnings per share in annual and interim financial statements. While SFAS No. 148 does not amend SFAS No. 123 to require companies to account for employee stock options using the fair value method, the disclosure provisions of SFAS No. 148 are applicable to all companies with stock-based employee compensation, regardless of whether they account for that compensation using the fair value method of SFAS No. 123 or the intrinsic value method of APB Opinion No. 25. The Company adopted SFAS No. ~~148 effective December 31, 2002.~~157, Fair Value Measurements (SFAS 157). SFAS 157 provides a definition of fair value, establishes a framework for measuring fair value under accounting principles generally accepted in the United States (“GAAP”), and requires expanded disclosures about fair value measurements. The standard applies when GAAP requires or allows assets or liabilities to be measured at fair value and, therefore, does not expand the use of fair value in any new circumstance.

~~At March 31, 2003,~~SFAS No. 159. On January 1, 2008, the Company ~~has three stock-based employee compensation plans which are accounted~~adopted SFAS No. 159, The Fair Value Option for ~~under the recognition~~Financial Assets and ~~measurement principles of APB Opinion No. 25, “Accounting for Stock Issued~~Financial Liabilities (SFAS 159). SFAS 159 permits entities to Employees,” and related Interpretations. For the three months ended March 31, 2003 and 2002, there would have been no effect on net income (loss) and earnings (loss) per share if the Company had applied thechoose to measure at fair value ~~recognition provisions~~many financial instruments and certain other items that are not currently required to be measured at fair value. Subsequent changes in fair value for designated items are required to be reported in earnings in the current period. SFAS 159 also establishes presentation and disclosure requirements for similar types of ~~SFAS No. 123, “Accounting for Stock Based Compensation,”~~assets and liabilities measured at fair value. The Company elected to measure at fair value short-term investments classified as available-for-sale. The cumulative effect to beginning retained earnings was a decrease through a cumulative effect of a change in accounting principle of approximately $27,000 on January 1, 2008. Refer to Note 3 to the ~~above plans.~~Condensed Consolidated Financial Statements for further detail.

Reclassifications. In the first quarter of 2008, in an effort to provide our investors with a clearer identification of our revenues and expenses we have removed the heading “Resource” from our revenue and expense categories and re-titled our interim revenues and expenses as Eagle Mountain revenues and expenses. This re-titling has had

~~Note 2. ACCOUNTING CHANGE AND RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS~~no impact on revenue, gross margin, net loss, assets or liabilities in the periods presented and has no impact on previously reported results.

The restatement for the three months ended March 31, 2003, results in a net increase in resource operating costs of $80,000, due to the $80,000 insurance policy premium amortization. This restatement results in a decrease in net income of $80,000 and basic and diluted income per unit of $0.01 for the three months ended March 31, 2003. A comparison of restated and originally reported amounts in the consolidated financial statements of operations for the three months ended March 31, 2003 are as follows:

The Company purchased an insurance policy effective June 30, 2001 that is designed to provide broad prospective commercial general liability, pollution legal liability, and contractual indemnity coverage for the Company’s ongoing and historical operations. The policy has a twelve (12) year term and limits of ~~$50,000,000~~$50 million in the aggregate for defense and indemnity, with no deductible or self-insured retention. The policy is designed to provide coverage for future claims in excess of the Company’s existing and historic insurance policies; however, to the extent that these other insurance policies are not responsive to a claim, the policy will provide first dollar coverage for a claim resulting from property damage, personal injury, bodily injury, cleanup costs or violations of environmental laws. The policy also provides for a broad defense of claims that may be brought against the Company. The policy is specifically intended to provide additional coverage for potential liabilities arising from pollution

conditions or known and/or potential asbestos-related claims. The policy also provides contractual indemnity coverage for scheduled indemnity obligations of the Company arising from, e.g., prior corporate transactions and real estate sales. The Company expects this policy will cover substantially any and all environmental claims (up to the $50 million policy limit) relating to the historical operations of the Company.

The aggregate cost for this policy was approximately $5.8 million, of which, based upon discussions among the respective members of the Boards of Directors, KSC Recovery paid $2 million and the Company paid the balance of approximately $3.8 million. The portion of the policy paid by KSC Recovery was expected to cover known and/or potential asbestos claims; while the portion of the policy paid by the Company was expected to cover future potential claims arising from the Company’s historical operations.

In June 2005, the Company was notified that it was to receive a refund of a portion of the cost of the policy relating to other commissions. The refund, totaling $106,000, was recorded as a reduction in the cost of the policy and the future amortization of the policy cost has been adjusted accordingly as described below.

The Company’s original $3.8 million premium for the prospective insurance policy iswas capitalized as a long-term asset and iswas being amortized on a straight-line basis over the ~~twelve (12)~~12 year term of the policy; approximately $80,000 per quarter or $320,000 per year. After recording the refund described above and an adjustment to standardize the monthly expense, the quarterly amortization is approximately $75,000 per quarter or $300,000 per year. To the extent a pre-existing liability has not been recorded, claims made for environmental matters are recorded as litigation accruals in the Company’s consolidated financial statements pursuant to ~~FAS~~SFAS No. 5 when it becomes probable that a loss has been incurred and the amount of such loss can be reasonably estimated. Claims accepted by the insurance company pursuant to coverage under the policy are recorded as insurance receivables when coverage is accepted and the amount to be paid by the insurance company can be reasonably estimated. Generally, unless previously accrued, the liability and the receivable relating to claims covered by this policy should occur in the same accounting period, thereby having no adverse or beneficial impact on the Company’s operating results for that accounting period.

In August 2001, the California Regional Water Quality Control Board, on behalf of the City of Ontario, asserted an environmental claim against the Company relating to the historical operations conducted at the Mill Site. The Company tendered the claim to its insurance carrier and the insurance carrier accepted the claim. As a result, in 2001, the Company recorded an insurance receivable in an amount equal to its pre-existing estimated environmental liability of $1.5 million and reclassified the $1.5 million obligation as a litigation accrual, separate from the $2.4 million environmental remediation liabilities. The insurance carrier is currently processing the claim under the terms of the policy.

The Company has an Investment Policy which provides for the investment of excess cash balances primarily in bond funds, commercial paper, and debt instruments. ~~The~~At September 30, 2008 the Company had investments in ~~the bond funds are~~high grade commercial paper (Standard & Poor’s rating of “A” or above) which is classified as ~~“trading”, while the investments in commercial paper and debt instruments have been classified as “held to maturity”.~~

“available-for-sale.” The ~~following is a summary~~classification of investment securities ~~classified as “trading”~~is reviewed by the Company as of ~~March 31, 2003:~~

The ~~following is~~Company adopted SFAS 157 on January 1, 2008, which provides a ~~summary~~definition of ~~investment securities classified as “held to maturity” as of March 31, 2003:~~fair value, establishes a framework for measuring fair value, and requires expanded disclosures about fair value measurements. The

~~Subsequent~~standard applies when GAAP requires or allows assets or liabilities to ~~March 31, 2003,~~be measured at fair value and therefore, does not expand the use of fair value in ~~April 2003,~~any new circumstance.

SFAS 157 defines fair value as the ~~Company sold certain of its “held~~price that would be received to ~~maturity” investments prior~~sell an asset or paid to ~~their stated maturity~~transfer a liability in an orderly transaction between market participants at the measurement date. ~~These investments had~~SFAS 157 clarifies that fair value should be based on the assumptions market participants would use when pricing an ~~amortized cost of $1,026,000 at March 31, 2003~~asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy gives the highest priority to quoted prices available in active markets (i.e., observable inputs) and the ~~sale resulted in~~lowest priority to data lacking transparency (i.e., unobservable inputs). Additionally, SFAS 157 requires an entity to consider all aspects of nonperformance risk, including the entity’s own credit standing, when measuring fair value of a ~~loss~~liability.

SFAS 157 establishes a three-level hierarchy to be used when measuring and disclosing fair value. An instrument’s categorization within the fair value hierarchy is based on the lowest level of ~~approximately $6,000. As~~significant input to its valuation. Following is a ~~result~~description of ~~these transactions,~~ the ~~remaining “held~~three hierarchy levels:

Following is a description of the valuation methodology used to ~~maturity”~~measure short-term investments ~~will be initially classified as “available-for-sale” investments. The classification of these~~at fair value.

Available-for-sale securities ~~and the existing trading securities will be reviewed by the Company, in the future,~~are carried at each reporting period. The future unrealized gain or loss associated with investments classified as “available-for-sale” will be recorded as an increase or decrease to the investment balance with a corresponding increase or decrease to comprehensive incomefair value, which is ~~a component of members’ equity. In addition, realized gains or losses, and interest income or dividends will be recorded as a component~~based on observable market prices. The Company classified 100% of the ~~statement~~available-for-sale securities reported at fair value as Level 1. Available-for-sale securities account for 100% of ~~operations. Had~~all assets reported at fair value at September 30, 2008.

In February 2007, the ~~“held~~FASB issued SFAS No. 159 “The Fair Value option for Financial Assets and Liabilities.” This Statement permits entities to ~~maturity” investments been classified~~choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reporting earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. This Statement is expected to expand the use of fair value measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. The provisions of SFAS 159 are effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company adopted SFAS 159 as ~~“available-for-sale” investments at March 31, 2003,~~of January 1, 2008, which has no material impact on the ~~increase in the investment amounts and comprehensive income would have been approximately $50,000 and there would have been no change to the statement of operations or earnings per unit.~~

Company’s consolidated financial statements. The following is a summary of ~~amortized cost~~the fair value of investment securities classified as “available-for-sale” as of September 30, 2008 and December 31, 2007:

The Company has chosen to adopt FAS 159 for the measurement of short-term investments in an effort to more clearly identify the actual value of the investment ~~securities~~and its earnings for the reporting period. At the end of a period the actual market value is compared to the actual cost and used to determine any gain or loss on the

maturity or sale of each available-for-sale investment. The current U.S. credit crisis has caused some of the Company’s commercial paper investments to decline in value as of ~~December 31, 2002:~~

~~Note 5. INVESTMENTS IN WEST VALLEY MRF, LLC~~INITIAL ADOPTIONOF FAIR VALUE OPTION (FVO)

Effective June 19, 1997, Kaiser Recycling Corporation (“KRC”) (now Kaiser Recycling, LLC) and West Valley Recycling & Transfer, Inc. (“WVRT”), a subsidiary of Burrtec Waste Industries, Inc. (“Burrtec”), which are equal members of West Valley MRF, LLC, (a California limited liability company) entered into a Members Operating Agreement (“MOA”) which is substantially the equivalent of a joint venture agreement for a limited liability company. The construction and start up of the West Valley MRF was completed during December 1997.

Pursuant to the terms of the MOA, KRC contributed approximately 23 acres of Mill Site property on which the West Valley MRF was constructed while WVRT contributed all of Burrtec’s recycling business that was operated within Riverside County, thereby entitling West Valley MRF to receive all revenues generated from this business after the closing date.

Most of the financing for the construction of the West Valley MRF of approximately ~~$22,000,000, including reimbursement of previously incurred development costs of Burrtec and the Company,~~$22 million, was obtained through the issuance and sale of two California Pollution Control Financing Authority (the “Authority”) Variable Rate Demand Solid Waste Disposal Revenue ~~Bonds (West Valley MRF, LLC~~

~~Project) Series 1997A and Series 2000A (the “Bonds”).~~bonds. The ~~Bonds~~bonds are secured by an irrevocable letter of credit issued by Union Bank of California, N.A. (“Union Bank”). As of September 30, 2008, the total outstanding Authority debt is $7,710,000.

The ~~Bonds have stated maturity dates of June 1, 2012~~current payment schedule for ~~Series 1997A ($9.5 million) and June 1, 2030 Series 2000A ($8.5 million), although West Valley MRF, LLC~~the California Pollution Control Authority bonds is required, pursuant to its agreement with Union Bank, to annually redeem a portion of the Bonds on a stated schedule. Pursuant to a Guaranty Agreement with Union Bank, the Company and Burrtec are each liable for fifty percent (50%) of the principal and interest on the Bonds in the event of a default by the West Valley MRF, LLC. West Valley MRF, LLC also has established a $2.0 million equipment line of credit with Union Bank in order to refinance and purchase additional equipment.summarized below.

The Company also remains responsible for any pre-existing environmental conditions on the land on which the WVMRF is located, which is covered by insurance.

The Company is accounting for its investment in West Valley MRF, LLC under the equity method.

Due to the time required to close the books of the West Valley MRF, LLC and in keeping with past practice, there is a one month delay in reporting the results of West Valley MRF, LLC. The condensed summarized financial information of West Valley MRF, LLC is as follows:

The reduction in Current Assets and Members’ Equity for the West Valley MRF between November 30, 2007 and August 31, 2008, is due primarily to $3.0 million in cash distributions made to each of the West Valley MRF’s two members.

The Company ~~has~~ recognized equity income from the West Valley MRF of ~~$809,000~~$1,871,000 and ~~$247,000~~$1,801,000 for the first ~~three~~nine months of ~~2003~~2008 and ~~2002,~~2007, respectively. ~~The~~However, due to the current world-wide economic conditions and other factors, commodity prices starting in the third quarter of 2008, have begun to decline dramatically. If this decline continues it will have a material negative impact on the WVMRF’s profitability. As noted above, the Company ~~has~~ received ~~distributions of $750,000 and $250,000 during the first three months of 2003 and 2002, respectively,~~a $1 million cash distribution from its investment in the West Valley ~~MRF.~~MRF during the first quarter of 2008 and an additional $.5 million cash distribution in both the second and third quarters of 2008; however only a $1 million dollar distribution was received for the first nine months of 2007.

The Company reviews all long-lived assets on a quarterly basis to determine if the anticipated cash flows from the assets will equal or exceed their capitalized costs. Our reviews as of ~~March 31, 2003,~~September 30, 2008, concluded that no impairment of ~~any~~ long-lived ~~asset~~assets existed: (a) the Eagle Mountain Landfill Project is currently under a sale contract with County District No. 2 of Los Angeles County for $41 million

~~(81.78%~~ (83.13% of which belongs to Kaiser) which exceeds its capitalized ~~cost;~~cost, however, the Company has evaluated and will continue to evaluate the impact of an adverse U.S. District Court decision involving the Landfill Project issued on September 20, 2005; (b) our 50% ownership interest in the West Valley ~~Materials Recovery Facility and Transfer Station~~MRF continues to generate significant net income and positive cash flow; ~~(c) our long-term notes receivable are performing in accordance with the terms of the notes;~~ and ~~(d)~~(c) our other real estate and building and equipment are recorded at the lower of cost or fair market values.

A portion of the Eagle Mountain Townsite is leased to a company that operates a minimum security prison under contract with the State of California. While funding for private prisons was initially eliminated in California’s 2002 - 2003 state budget, the 2002-2003 budget for the State of California that was signed into law on September 5, 2002, restored funding for private prisons, including the private prison located at Eagle Mountain, but only through June 30, 2003. It is possible that funding for the private prison located at Eagle Mountain will not be extended beyond June 30, 2003. If funding for the private prison is discontinued, for any reason, and/or the lease with Management Training Corporation is terminated, Kaiser would significantly reduce its remaining Eagle Mountain operations and staffing. The Company has recorded a reserve for the costs of such a reduction in activity, the adequacy of which reserve management will continue to review.

Environmental Contingencies. As discussed in Note 3,2, effective June 30, 2001, the Company purchased a 12-year $50 million insurance policy which is expected to cover substantially any and all environmental claims (up to the $50 million policy limit) relating to the historical operations of the Company. To the extent a pre-existing liability has not been recorded, claims made for environmental matters are recorded as litigation ~~accrual~~accruals in the Company’s consolidated financial statements pursuant to ~~FAS~~SFAS No. 5 when it becomes probable that a loss has been incurred and the amount of such loss can be reasonably estimated. Claims accepted by the insurance company pursuant to coverage under the policy are recorded as insurance receivables when coverage is accepted and the amount to be paid by the insurance company can be reasonably estimated.

As of ~~March 31, 2003,~~September 30, 2008, the Company estimates, based upon current information and discussions with environmental consultants, that its future environmental liabilities related to certain matters not assumed by CCG Ontario, LLC in its purchase of the Mill Site Property, including a certain groundwater matter as well as potential matters at Eagle Mountain and at other historical locations, ~~would~~will be approximately ~~$2.4~~$2.8 million. In the event that a future environmental claim for damages is filed against the Company ~~that relates to the remaining $2.4 million environmental reserve, management believes that the~~such claim may be covered by insurance depending upon the nature and timing of the claim.

~~Settlement~~Landfill Project Litigation. Currently, the only pending litigation involving the Landfill Project concerns two lawsuits filed in U.S. District Court located in Riverside County challenging the completed federal land exchange. On September 20, 2005, the U.S. District Court for the Central District of ~~City of Ontario. In February 2004,~~California, Eastern Division, issued an opinion and order which concluded that that the ~~Company executed a final settlement agreement~~land exchange be reversed and the case be sent back to the BLM for further action consistent with the ~~City~~opinion. The Company and the U.S. Department of ~~Ontario~~Interior have appealed the decision to the U. S. 9^th Circuit Court of Appeals. Oral argument on the appeal was held on December 6, 2007. The 9^th Circuit Court Appeals usually announces its decision six to twelve months following oral argument. However, on occasion announcement on a decision may take substantially longer. If the adverse decision is fully affirmed on appeal, it would materially impact the viability of the Landfill Project in that it would prevent its development as currently permitted. In addition, the decision could adversely impact the agreement to sell the Landfill Project to the District, including termination of the agreement.

MRC Financing. Since Kaiser became an owner of MRC, MRC has been financed through a series of private placements to its existing equity owners. To cover the continuing costs of MRC such as the costs of the appeal, various anticipated closing matters and other similar items additional funding of up to $1.2 million payable in installments was completed in the third quarter of 2007 through a private placement to MRC’s existing members. The funding is payable in two installments with ~~regard to allegations of impacts to municipal wells owned by the City of Ontario. In~~ the first ~~quarter of 2004,~~installment paid with a member’s subscription to the ~~full settlement price~~private placement and the second installment was paid ~~by insurance and, accordingly, the existing insurance receivable and litigation accrual recorded in the Company’s consolidated financial statements were reduced~~ in the first quarter of ~~2004.~~2008. Since not all of the owners of MRC purchased their respective pro rata interest in the private placement, we purchased those interests. Accordingly, our additional investment in MRC totaled $1,057,000. As a result of the private placement, our ownership interest in MRC increased from 82.48% to 83.13%. Even with the full $1.2 million being raised by the recent private placement, additional funding may be required to complete the sale of the Landfill Project assuming MRC is successful in its appeal of the current federal land exchange litigation. There is no assurance that any such additional funding can be obtained or that it can be obtained on acceptable terms.

Contingent Distributions on Class B, C and D Units. Upon the sale of certain of the Company’s assets at a price equal to or greater than certain minimum sales prices, distributions will be made on the Class B, C and D Units in accordance with their respective terms. For additional information, see “Note 1. Basis of Presentation Class B, C and D Units” above.

A tender offer dated September 19, 2008, and amended and restated by Amendment No. 1 to Schedule TO filed September 26, 2008 (the “MacKenzie Offer”), was commenced by certain affiliates³ of MacKenzie Patterson Fuller, LP (“MacKenzie”) to purchase up to 1,400,000 Class A Units of the Company at a purchase price equal to $.50 per Unit, less: (i) each Unitholder’s pro-rata share of certain transfer costs described in the MacKenzie Offerwithout any limit; and (ii) the amount of any distributions declared or made with respect to the Units between September 19, 2008 and October 30, 2008, or such later date to which the MacKenzie Offer may be extended. As required by applicable law, the Company’s Board of Managers met and carefully considered the MacKenzie Offer. It was the conclusion and recommendation of the Board that unitholders should reject the Mackenzie

Offer. The Board’s recommendation and a summary of the reasons for its recommendation were communicated in a letter to unitholders dated October 2, 2008, and in a press release of the same date.

Like the MacKenzie Offer, the Company’s Board of Managers also recommended that unitholders reject the Company Offer as neither offer represents fair value for the Company’s units at this time.

The MacKenzie Offer expired on October 30, 2008. MacKenzie terminated its tender offer and decided not to purchase any Kaiser Class A Units.

As discussed in ~~the Company’s~~our Annual Report on Form ~~10-K/A~~10-KSB for ~~2002, the Company is~~2007 we are engaged in certain claims and litigation. ~~There were no~~As of the date of the filing of this report, there have not been any material developments in ~~any~~the legal ~~proceeding in~~proceedings involving the ~~first quarter~~Company from the date of ~~2003, except as otherwise discussed in~~ the ~~Company’s Annual~~filing of our Report on Form ~~10-K/A~~10-KSB for ~~2002.~~

~~KAISER VENTURES LLC~~In September 2008 the U.S. District Court ruled against a motion filed by the plaintiffs in the land exchange litigation and found that activities conducted on Kaiser’s fee owned land at Eagle Mountain that was not a part of the land exchange lands did not change the character and use of the lands received in the federal land exchange. Thus, for example, the U.S. District Court found that the military training conducted on Kaiser’s fee owned land did not violate the Court’s original order. As of the date of this report there still is no decision from the U.S. 9^th Circuit Court of Appeals on the land exchange litigation appeal. For additional information on the federal exchange litigation, please see: “Item 2. MANAGEMENT’S DICUSSION AND ~~SUBSIDIARIES~~ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Business Update - Eagle Mountain Landfill Project Litigation.”

“Item ~~5. OTHER INFORMATION~~2. MANAGEMENT’S DICUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - Business Update - Tender Offers” for a discussions relating to the tender offer made by MacKenzie and the tender offer made by the Company for Kaiser’s Class A Units.

In the first quarter of 2003 the Board of Managers approved a new Audit Committee Charter and a Code of Business Conduct and Ethics, which are attached as Exhibits 99.3 and 14.1, respectively to our Annual Report on Form 10-K/A for 2002. In addition, Business Staffing, Inc. negotiated a new employment agreement with Richard E. Stoddard, our Chief Executive Officer and Chairman of the Board of Managers. Among other things, the new employment agreement, with an effective date of January 1, 2003, reduces Mr. Stoddard’s time commitment to the Company and his salary. The new employment agreement was filed as Exhibit 10.4 to our Annual Report on Form 10-K/A for the year ended December 31, 2002.

Our annual meeting of members will be held on June 17, 2003, commencing at 9:00 a.m. (California time) at the Double Tree Ontario Airport Hotel, located at 222 N. Vineyard Avenue, Ontario California. Our proxy statement and annual report was mailed to members on or around May 6, 2003.

~~Exhibit 10.1 - First Amendment Agreement dated as of January 1, 2003, by and between West Valley MRF, LLC and Union Bank of California, N.A., filed with this Report.~~^**

Exhibit 31.1 - Certificate of Richard E. Stoddard, Chief Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a) filed with this Report.

Exhibit 31.2 - Certificate of James F. Verhey, Chief Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a) filed with this Report.

Exhibit ~~32.1~~32 –- Certificate of Richard E. Stoddard, Chief Executive Officer, ~~pursuant to Section 1350, filed with this Report.~~

~~Exhibit 32.2~~ ~~- Certificate of~~and James F. Verhey, Chief Financial Officer, pursuant to Section 1350, filed with this Report.

Report dated September 18, 2008, announcing a Kaiser press release concerning the U.S. District Court for the Central District of California ruling in favor of military training and other activities that were conducted at Kaiser’s Eagle Mountain site.

~~None.~~Report dated September 24, 2008, announcing a Kaiser press release concerning the commencement of a tender offer by MacKenzie Patterson Fuller, LP and certain entities it controls asking unitholders to take no immediate action in response to such tender offer.

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



	PAGE
PART I

FORWARD-LOOKING STATEMENTS		1

	Item 1.	FINANCIAL STATEMENTS	1/1116

	Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	2

	Item 3.	~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~	11

	~~Item 4.~~	CONTROLS AND PROCEDURES	1116

FINANCIAL STATEMENTS

		~~CONSOLIDATED BALANCE SHEETS~~	12

		~~CONSOLIDATED STATEMENTS OF OPERATIONS~~	14

		~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~	15

		~~CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY~~	16

	CONSOLIDATED BALANCE SHEETS	17

	CONSOLIDATED STATEMENTS OF OPERATIONS	19

	CONSOLIDATED STATEMENTS OF CASH FLOWS	20

	CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY	21

	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	1722

PART II

	Item 1.	LEGAL PROCEEDINGS	2429

	Item 2.	~~CHANGES IN~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	2529

	Item 3.	DEFAULTS UPON SENIOR SECURITIES	2529

	Item 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	2529

	Item 5.	OTHER INFORMATION	2529

	Item 6.	EXHIBITS AND REPORTS ON FORM 8-K	2529

SIGNATURES		2631


	Amount of Variances (Inc <Dec>)
Income from West Valley MRF, LLC	$	113,000
Current impact of adopting FAS 159	$	(256,000	)
Lower realized interest income	$	(73,000	)
Valuation reserve recorded relative to Business Staffing deferred tax asset	$	(328,000	)


	Amount of Variances (Inc <Dec>)
Reduced military training revenue at Eagle Mountain	$	(238,000	)
Project development expenses at Eagle Mountain	$	(223,000	)
Current impact of adopting FAS 159	$	(293,000	)
Lower realized interest income	$	(147,000	)
Valuation reserve recorded relative to Business Staffing deferred tax asset	$	(453,000	)


	March 31, 2003		December 31, 2002
	(Unaudited) (Restated – Note 2)
ASSETS

Current Assets
Cash and cash equivalents	$	5,162,000	$	10,347,000
Accounts receivable and other, net of allowance for doubtful accounts of $34,000		250,000		763,000
Short-term investments - trading		5,019,000		—
Short-term investments		2,048,000		—
Notes receivable		337,000		337,000

		12,816,000		11,447,000

Eagle Mountain Landfill Investment		28,209,000		27,826,000

Investment in West Valley MRF		4,199,000		4,140,000

Land and improvements		2,503,000		2,503,000

Long-term investments		2,725,000		3,752,000

Other Assets
Notes receivable		898,000		1,012,000
Insurance receivable		1,500,000		1,500,000
Unamortized environmental insurance premium		3,240,000		3,320,000
Buildings and equipment (net)		881,000		944,000

		6,519,000		6,776,000

Total Assets	$	56,971,000	$	56,444,000


	September 30, 2008		December 31, 2007
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	1,437,000	$	1,419,000
Accounts receivable and other, net of allowance for doubtful accounts of $37,000		137,000		169,000
Short-term investments (all reported at fair value)		7,212,000		8,042,000
Restricted cash held for
Conversion distribution		1,190,000		1,190,000
Contribution to Company SERP		921,000		921,000

		10,897,000		11,741,000

Eagle Mountain Landfill Investment		32,185,000		31,904,000

Investment in West Valley MRF		5,143,000		5,271,000

Land		2,465,000		2,465,000

Other Assets
Deferred income tax asset		—		328,000
Unamortized environmental insurance premium		1,425,000		1,650,000
Buildings and equipment (net)		833,000		1,052,000

		2,258,000		3,030,000

Total Assets	$	52,948,000	$	54,411,000


	2003			2002		% Inc. (Dec)
Ongoing Operations
Income from equity method investment in West Valley MRF, LLC	$	809,000		$	247,000	228	%
Gain on Mill Site land sales		53,000			27,000	96	%

Total ongoing operations		862,000			274,000	215	%

Interim Activities (net)		(27,000	)		5,000	N/A

Total resource revenues	$	835,000		$	279,000	199	%


	2003			2002
	(Restated – Note 2)
Resource Revenues
Ongoing Operations
Income from equity method investment in the West Valley MRF	$	809,000		$	247,000
Gain on Mill Site land sales		53,000			27,000

Total ongoing operations		862,000			274,000

Interim Activities Income (Loss), net		(27,000	)		5,000

Total resource revenues		835,000			279,000

Resource Operating Costs
Environmental insurance premium amortization		80,000			80,000

Income from Resources		755,000			199,000

Corporate General and Administrative Expenses		426,000			886,000

Income (Loss) from Operations		329,000			(687,000	)
Net interest income		(113,000	)		(185,000	)

Income (Loss) before Income Tax Provision		442,000			(502,000	)

Income tax provision		4,000			2,000

Net Income (Loss)	$	438,000		$	(504,000	)

Basic Earnings (Loss) Per Unit	$	0.06		$	(0.07	)

Diluted Earnings (Loss) Per Unit	$	0.06		$	(0.07	)

Basic Weighted Average Number of Units Outstanding		6,912,000			6,904,000

Diluted Weighted Average Number of Units Outstanding		6,932,000			6,904,000


	Three Months Ended September 30						Nine Months Ended September 30
	2008			2007			2008			2007
Revenues
Income from equity method investment in the West Valley MRF, LLC	$	765,000		$	652,000		$	1,872,000		$	1,801,000
Eagle Mountain revenues		46,000			9,000			107,000			338,000

Total revenues		811,000			661,000			1,979,000			2,139,000

Operating Costs
Environmental insurance premium amortization		75,000			75,000			225,000			225,000
Expenses related to Eagle Mountain		418,000			410,000			1,250,000			988,000

Total operating costs		493,000			485,000			1,475,000			1,213,000

Gross Income		318,000			176,000			504,000			926,000
Corporate General and Administrative Expenses

Total corporate and administrative expense		422,000			423,000			1,346,000			1,412,000

Loss from Operations		(104,000	)		(247,000	)		(842,000	)		(486,000	)
Cumulative Impact of Adopting FAS 159		—			—			27,000			—
Current Impact of Adopting FAS 159		(256,000	)		—			(293,000	)		—
Net Interest and Investment Income		50,000			123,000			212,000			359,000

Loss before Income Tax Provision		(310,000	)		(124,000	)		(896,000	)		(127,000	)
Income Tax Provision		374,000			2,000			486,000			10,000

Net Loss		(684,000	)		(126,000	)		(1,382,000	)		(137,000	)

Basic Loss Per Unit	$	(0.10	)	$	(0.02	)	$	(0.19	)	$	(0.02	)

Diluted Loss Per Unit	$	(0.10	)	$	(0.02	)	$	(0.19	)	$	(0.02	)

Basic Weighted Average Number of Units Outstanding		7,083,000			7,064,000			7,156,000			7,047,000
Diluted Weighted Average Number of Units Outstanding		7,083,000			7,064,000			7,156,000			7,047,000


	2008			2007
Cash Flows from Operating Activities
Net loss	$	(1,382,000	)	$	(137,000	)
Adjustments to reconcile net loss/income to net cash used by operating activities
Change in West Valley MRF, LLC,
Equity income recorded		(1,872,000	)		(1,801,000	)
Cash distributions received		2,000,000			1,000,000
Depreciation and amortization		503,000			388,000
Unrealized loss on investments		266,000			—
Deferred income tax valuation allocations		328,000			—
Changes in assets:
Receivables and other		32,000			42,000
Changes in liabilities:
Accounts payable and accrued liabilities		(149,000	)		15,000
Environmental remediation reserve		(61,000	)		(25,000	)

Net cash flows used in operating activities		(335,000	)		(518,000	)

Cash Flows from Investing Activities
Minority interest		57,000			86,000
Purchase of investments		(45,202,000	)		(19,193,000	)
Maturities of investments		45,739,000			20,602,000
Capital acquisitions		(59,000	)		(46,000	)
Capital dispositions		—			147,000
Capitalized landfill expenditures		(281,000	)		(413,000	)

Net cash flows provided by investing activities		254,000			1,183,000

Cash Flows from Financing Activities
Issuance of Class A Units		99,000			47,000

Net cash flows from financing activities		99,000			47,000

Net Changes in Cash and Cash Equivalents		18,000			712,000
Cash and Cash Equivalents at Beginning of Year		1,419,000			1,153,000

Cash and Cash Equivalents at End of Period	$	1,437,000		$	1,865,000


Supplemental disclosure of non-cash investing and financing activities

	2008			2007
Cash paid during the period for income taxes	$	302,000		$	91,000


	Class A Units	Members’ Equity
Balance at December 31, 2002	6,911,799	$	45,173,000

Net income (Restated-Note 2)	—		438,000

Balance at March 31, 2003 (Restated-Note 2)	6,911,799	$	45,611,000


	Class A				Accumulated Other Comprehensive			Total Members’
	Units	Amount			Loss			Equity
Balance at December 31, 2007	7,064,299	$	37,047,000		$	27,000		$	37,074,000
Cumulative effect of change in Accounting principles as of January 1, 2008
Adoption of Financial Accounting Standards Board No. 159	—		—			(27,000	)		(27,000	)
Net loss	—		(1,382,000	)		—			(1,382,000	)
Issuance of Class A Units	126,507		99,000			—			99,000

Balance at June 30, 2008	7,190,806	$	35,764,000		$	—		$	35,764,000


	2003			2003
	As previously reported			As restated

Total resource revenues	$	835,000		$	835,000
Total resource operating costs		—			80,000

Income from Resources		835,000			755,000
Corporate General and Administrative Expenses		426,000			426,000

Income from Operations		409,000			329,000
Net interest income		(113,000	)		(113,000	)

Income before Income Tax Provision		522,000			442,000
Income tax provision		4,000			4,000

Net Income	$	518,000		$	438,000

Basic Earnings Per Unit	$	0.07		$	0.06

Diluted Earnings Per Unit	$	0.07		$	0.06


HELD-TO-MATURITY SECURITIES	AMORTIZED COST		LESS CURRENT MATURITIES		MATURITIES FROM ONE TO FIVE YEARS
U.S. corporate commercial paper	$	782,000	$	—	$	782,000
U.S. corporate debt securities		3,991,000		2,048,000		1,943,000

	$	4,773,000	$	2,048,000	$	2,725,000


Level 1		Inputs are quoted prices in active markets for identical asset or liabilities as of the measurement date. Additionally, the entity must have the ability to access the active market and the quoted prices cannot be adjusted by the entity.

Level 2		Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices in active markets for similar assets or liabilities; quoted prices in inactive markets for identical or similar assets or liabilities; or inputs that are observable or can be corroborated by observable market data by correlation or other means for substantially the full term of the assets or liabilities.

Level 3		Unobservable inputs are supported by little or no market activity. The unobservable inputs represent management’s best assumptions of how market participants would price the assets and liabilities. Generally, Level 3 assets and liabilities are valued using pricing models, discounted cash flow methodologies, or similar techniques that require significant judgment or estimation.


TRADING SECURITIES	FAIR VALUE
Bond funds	$	5,019,000


	BALANCE SHEET JANUARY 1, 2008 PRIOR TO ADOPTION		NET GAIN (LOSS) UPON ADOPTION		BALANCE SHEET JANUARY 1, 2008 AFTER ADOPTION OF FVO
Commercial Paper	$	8,015,000	$	27,000	$	8,042,000
Pre-tax cumulative effect of adoption of the fair value option			$	27,000


	PAYMENT SCHEDULE
YEAR	1997 BONDS		2000 BONDS		TOTAL
2009	$	630,000	$	—	$	630,000
2010	$	630,000	$	—	$	630,000
2011	$	630,000	$	—	$	630,000
2012	$	620,000	$	—	$	620,000
2013 thru
2029			$	290,000	$	4,930,000	⁽¹⁾
						($290,000
						per year	)
2030			$	270,000	$	270,000
TOTAL	$	2,510,000	$	5,200,000	$	7,710,000


	February 28, 2003		November 30, 2002
Balance Sheet Information:					August 31, 2008		November 30, 2007

Current Assets	$	6,984,000	$	6,743,000	$	8,230,000	$	11,108,000
Property and Equipment (net)		17,986,000		18,413,000		12,106,000		12,306,000
Other Assets		432,000		449,000		112,000		154,000

Total Assets	$	25,402,000	$	25,605,000	$	20,448,000	$	23,568,000

Current Liabilities	$	4,044,000	$	4,278,000	$	4,844,000	$	5,076,000
Other Liabilities		651,000		737,000
CPCFA Bonds Payable		14,070,000		14,070,000
CPCFA Bonds Payable – Long Term Portion						7,080,000		7,710,000
Members’ Equity		6,637,000		6,520,000		8,524,000		10,782,000

Total Liabilities and Members’ Equity	$	25,402,000	$	25,605,000	$	20,448,000	$	23,568,000

	2003		2002
Income Statement Information:					2008		2007

For the 3 months ended February 28
For the Three Months Ended August 31
Net Revenues	$	3,308,000	$	2,583,000	$	3,953,000	$	4,168,000
Gross Profit	$	1,768,000	$	820,000	$	1,851,000	$	1,729,000
Net Income	$	1,617,000	$	495,000	$	1,527,000	$	1,304,000


	~~KAISER VENTURES~~	KAISER VENTURES LLC

~~Dated: December 2, 2004~~ Date: November 12, 2008		/s/ Richard E. Stoddard
		Richard E. Stoddard
		President and Chief Executive Officer
		Principal Executive Officer

Date: November 12, 2008		/s/ James F. Verhey
		James F. Verhey
		Executive Vice President - Finance & CFO
		Principal Financial and Accounting Officer

AVAILABLE-FOR-SALE SECURITIES

SEPTEMBER 30,
2008

DECEMBER 31,
2007

Commercial Paper