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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Registrant’s telephone number, including area code: (909) 483-8500

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes x No ¨

At April 30, 2003, 6,911,799 Class A Units were outstanding including 136,919 Class A Units outstanding but reserved for distribution to the general unsecured creditors of Kaiser Steel Corporation.

TABLE OF CONTENTS TO FORM 10-Q

AVAILABLE OF PREVIOUS REPORTS

The Company will furnish without charge, to each member, upon written request of any such person, a copy of the Company’s 2002 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, including the financial statement schedules thereto. Those requesting a copy of the 10-K Report that are not currently members of the Company may also obtain a copy directly from the Company. Requests for a copy of the 10-K Report should be directed to Executive Vice President-Administration, at 3633 East Inland Empire Boulevard, Suite 480, Ontario, California 91764. The Form 10-K Report can also be accessed from the Company’s website at www.kaiserventures.com.

The reader is encouraged to read this Form 10-Q Report in conjunction with the Company’s 2002 Form 10-K Report, since the information contained herein is often an update of the information in the 10-K Report.

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KAISER VENTURES LLC AND SUBSIDIARIES

PART I

FORWARD-LOOKING STATEMENTS

Except for the historical statements and discussions contained herein, statements contained in this report on Form 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 Report, Annual Report, 10-K Report, 8-K Report or press release of the Company 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. 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 pre-bankruptcy activities of Kaiser Steel Corporation, the predecessor of Kaiser, including, among others, 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; 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.

ADDITIONAL INFORMATION

A reader of this Report on Form 10-Q is strongly encouraged to read the entire report, together with the Company’s 2002 Annual Report on Form 10-K for background information and a complete understanding as to material developments concerning the Company.

WHO WE ARE

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.

Item 1.    FINANCIAL STATEMENTS

The Financial Statements are located at the end of Item 4, beginning on Page 12 of this Report and are incorporated herein by this reference.

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KAISER VENTURES LLC AND SUBSIDIARIES

BUSINESS UPDATE

General

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 certain assets remaining after the bankruptcy. Currently, our principal assets include:

As of March 31, 2003, we also had cash and cash equivalents, receivables and short-term and long-term investments of approximately $16.4 million.

Eagle Mountain Landfill Project

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% 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 landfill. The Landfill Project is permitted to receive a maximum of 20,000 tons per day of municipal solid waste for up to 88 years.

Sale of Landfill Project.    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 being sold for $41 million, with an initial closing currently scheduled to occur in the second quarter of 2003. However, payment of the purchase price will be delayed as described in more detail below. The sale of the Landfill Project is subject to the results of the District’s due diligence, satisfaction of numerous contingencies and the negotiations 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 of the sale of the Landfill Project to the District on its current terms.

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 continuing to negotiate the terms of various ancillary agreements such as joint use agreements for access,

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utilities, and the Eagle Mountain railroad. With the sale of the Landfill Project, the Company will continue to own more than 4,000 acres in the Eagle Mountain area, including the Eagle Mountain town site. The parties agreed to extend the closing date to no later than May 31, 2003. However, the contractual expiration date has been extended a number of times. The conditions to closing are not expected to be met by the current expiration date, and the parties will have to decide whether to extend the period one or more additional times or waive certain conditions. There is no assurance or requirement that the parties will continue to extend the closing date and, if it is extended, for how long.

Upon 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 litigation contingencies are the federal litigation challenging the completed federal land exchange. 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 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 Report on Form 10-K.

Landfill Project Litigation.    Currently, the only pending litigation involving the Landfill Project concerns two lawsuits filed in Federal District Court located in Riverside County challenging the completed federal land exchange and requesting its reversal. To date, no immediate injunctive relief has been sought. All the scheduled briefs for the litigation 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, 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, 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 failure to comply with a biological opinion issued by the U.S. Fish & Wildlife Service and that the BLM has failed to enforce the terms of that biological opinion. In summary, the Complaining Groups are demanding enforcement of the biological opinion or revocation by the BLM of the right-of-ways granted for the existing Eagle Mountain railroad and the Eagle Mountain road. The biological opinion contains, among other items, mitigation measures for the desert tortoise which could require substantial expenditures.

In reviewing the complaints of the Complaining Group, the BLM, out of an abundance of caution, conducted an informal consultation with the U.S. Fish & Wildlife Service with respect 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.

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Risks.    As is discussed in this 10-Q Report and in more detail in the Company’s 2002 Annual Report on Form 10-K, 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 the sale to the District will occur or that the current terms of the pending transaction may not be modified as a result of future discussions with the District or as to the timing of the receipt of the purchase price. In addition, there are material litigation risks associated with the current federal land exchange litigation, as well as the threatened litigation over the Endangered Species Act.

West Valley Materials Recovery and Transfer Station

West Valley MRF, LLC, referred to as “West Valley,” 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 Burrtec Waste Industries, Inc. 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.

OPERATING RESULTS

Primary Revenue Sources

Ongoing Operations

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.

Interim Activities (net)

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.

Summary of Revenue Sources

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 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

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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.

Results of Operations

Analysis of Results for the Quarters Ended March 31, 2003 and 2002

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

Resource Revenues.    Total resource revenues for the first quarter of 2003 were $835,000, compared to $279,000 for 2002. Revenues 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 equity method investment increased by $562,000 to $809,000 due to higher equity income from the West Valley MRF during the first quarter of 2003 compared to the same period 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, 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 for the same period in 2002. This decline in interim activities (net) was expected and is primarily due to the reimbursement of salaries 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 and staffing. The Company has recorded a reserve for the costs of such a reduction in activity, the adequacy of which management periodically reviews.

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Corporate General and Administrative Expenses.    Corporate general and administrative expenses for the first quarter of 2003 decreased 52% to $426,000 from $886,000 for the same period in 2002. The decrease is primarily due to reduced staffing ($257,000) and lower professional and outside consulting expenses ($203,000).

Net Interest Income.    Net interest income for the first quarter of 2003 was $113,000 compared to $185,000 in the same period in 2002. The change was due to a decrease in interest income ($72,000) relating to lower interest rates plus lower cash and investment balances.

Pre-Tax Income (Loss) and Income Tax Provision.    The Company recorded pre-tax income of $522,000 in the first quarter of 2003 versus a pre-tax loss of $422,000 for the same period in 2002. Therefore, 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. Since the Company is now taxed as a partnership and the Company’s results of operations (on an income tax basis) are distributed to the unit holders for inclusion in their respective income tax returns. These taxes amounted to $4,000 for the first quarter of 2003, versus $2,000 for the same period in 2002.

Net Income.    For first quarter of 2003, the Company reported net income of $518,000, or $0.07 per unit, versus a net loss of $424,000, or $0.06 per unit, reported for the same period in 2002.

FINANCIAL POSITION

Cash, 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 to $5,162,000 at March 31, 2003 from $10,347,000 at December 31, 2002. Included in cash and cash equivalents is $1,824,000 and $1,335,000 held solely for the benefit of MRC at March 31, 2003 and December 31, 2002, respectively. The decrease in cash and cash equivalents is primarily due to the investment, net, of excess cash in 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 from the West Valley MRF of $750,000.

Working Capital.    During the first quarter of 2003, current assets increased $1.4 million to $12.8 million, while current liabilities increased $52,000 to $1.0 million. The increase in current assets resulted primarily from the $7,067,000 increase in short-term investments being mostly offset by a $5,185,000 decrease in cash and cash equivalents and a $513,000 decline in accounts receivable. Included in current liabilities, as of March 31, 2003, is $125,000 in accounts payable and accrued liabilities relating to MRC. As a result, working capital increased during the first quarter of 2003 by $1.3 million to $11.8 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 bonds with maturities that closely match the Company’s anticipated future cash requirements. In regard to the maturity dates of these investments, $7.1 million was classified as a current asset while $2.7 million was classified as a long-term asset.

Investments.    There was a $59,000 increase in the Company’s investment in the West Valley MRF during the first quarter of 2003 resulting from 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 investment in the Eagle Mountain Landfill increased $383,000 during the first quarter of 2003 due to continuing landfill development activities.

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Other Assets.    The decrease in other assets ($177,000) relates to decreases in notes receivable due to the receipt of recurring payments ($114,000), and an increase in accumulated depreciation as of March 31, 2003 ($63,000).

Environmental 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 groundwater and other possible third party claims, would be approximately $3.9 million. However, we purchased, effective June 30, 2001, a 12 year $50 million insurance policy at a cost to us of approximately $3.8 million. This policy covers, among other things, virtually any and all environmental liabilities and claims, including defense costs, (up to the $50 million policy limit) relating to the historical operations and assets of the Company reflected in the above $3.9 million liability. Due to the nature of the insurance policy, generally accepted accounting principles require that the cost of the policy be capitalized as an asset, separately from the related liability, and amortized as claims on the policy are made.

Long-term Liabilities.    The decrease in other long-term liabilities is due to the recognition of gains on real estate sales ($53,000).

Minority Interest.    As of March 31, 2003, the Company has recorded $5,685,000 of minority interest relating to the approximately 18% 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.

Critical Accounting Policies

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 for the year ended December 31, 2002. As disclosed in the Notes to the 2002 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 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. 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. Subsequent to March 31, 2003, certain of the Company’s investments, at each reporting period, may be classified as “available-for-sale” that will be marked to market with 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.

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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% ownership interest.

Landfill Permitting and Development.    Through its 81.78% interest in Mine Reclamation, LLC, 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 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.

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.

Environmental Reserves.    The Company has obligations for environmental liabilities and, based on management’s estimates, the Company has recorded reserves for these obligations. In addition, the Company has purchased an insurance policy related to these environmental liabilities and due to the nature of the insurance policy, accounting principles generally accepted in the United States require that the cost of policy be capitalized as an Other Asset separately from the related liability and amortized as the related liabilities are resolved.

New Accounting Pronouncement

In November 2002, the Financial Accounting Standards Board (FASB) issued Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (FIN No. 45). This Interpretation also incorporates, without change, the guidance in FASB Interpretation No. 34, Disclosure of Indirect Guarantees of Indebtedness of Others, which is being superseded. In addition to its disclosure requirements, FIN No. 45 requires the guarantor to recognize, at the inception of a guarantee, a liability for the obligations undertaken in issuing the guarantee, including its ongoing obligation to stand ready to perform over the term of the guarantee in the event that the specified triggering events or conditions occur. The initial measurement of the liability is 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 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

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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 on December 31, 2002.

BUSINESS OUTLOOK

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 – 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, 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.    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 of these projects and investments, such as our 50% equity ownership of the West Valley MRF, are essentially complete and we have been recognizing significant revenues and income from them. We 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 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 on the ability of the West Valley MRF to attract new customers and waste volumes at attractive processing rates; on recyclable commodity prices; and on future competition from competing facilities.

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.    As discussed in more detailed in “Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS – BUSINESS UPDATE – Eagle Mountain Landfill Project” 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. 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.

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Upon closing of the sale of the landfill project, $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 litigation contingencies are the federal litigation challenging the completed federal land exchange. 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 substantially completed the environmental remediation of this parcel pursuant to the terms of its agreement during the third quarter of 2002.

Sale of Miscellaneous Properties.    We are continuing to seek buyers for our miscellaneous properties, most of which are located at or near our Eagle Mountain facility.

Corporate Overhead.    As we divest our remaining assets, we intend to adjust our 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.    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 receivables and any future asset sales will be sufficient to satisfy our projected operating cash requirements for the next 3-4 years.

Cash Maximization Strategy

We have been developing our remaining assets and then selling them at such times and on such terms as we believe optimize the realizable value for a particular project or asset. In continuing this strategy, our current plans include:

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Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

Item 4.    CONTROLS AND PROCEDURES

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 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 REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK]

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CONSOLIDATED BALANCE SHEETS

as of

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

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CONSOLIDATED BALANCE SHEETS

as of

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

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CONSOLIDATED STATEMENTS OF OPERATIONS

for the Three Months Ended March 31

(Unaudited)

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

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CONSOLIDATED STATEMENTS OF CASH FLOWS

for the Three Months Ended March 31

(Unaudited)

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

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CONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITY

for the Three Months Ended March 31, 2003

(Unaudited)

At March 31, 2003 and December 31, 2002, Kaiser Ventures LLC had 751,956 Class B Units; 952 Class C Units; and 48 Class D Units outstanding.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1.    BASIS OF PRESENTATION

The unaudited consolidated financial statements as of March 31, 2003 and for the three month periods ended March 31, 2003 and 2002, as well as related notes, should be read in conjunction with the audited consolidated financial statements and related notes as of and for the year ended December 31, 2002. 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, and results of operations and cash flows for the three month periods ended March 31, 2003 and 2002.

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 2 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 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 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.

At March 31, 2003, the Company has three stock-based employee compensation plans which are accounted for under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued 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 the fair value recognition provisions of SFAS No. 123, “Accounting for Stock Based Compensation,” to the above plans.

Note 2.    INVESTMENTS

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 investments in the bond funds are

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classified as “trading”, while the investments in commercial paper and debt instruments have been classified as “held to maturity”.

The following is a summary of investment securities classified as “trading” as of March 31, 2003:

The following is a summary of investment securities classified as “held to maturity” as of March 31, 2003:

Subsequent to March 31, 2003, in April 2003, the Company sold certain of its “held to maturity” investments prior to their stated maturity date. These investments had an amortized cost of $1,026,000 at March 31, 2003 and the sale resulted in a loss of approximately $6,000. As a result of these transactions, the remaining “held to maturity” investments will be initially classified as “available-for-sale” investments. The classification of these securities and the existing trading securities will be reviewed by the Company, in the future, 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 income which is a component of members’ equity. In addition, realized gains or losses, and interest income or dividends will be recorded as a component of the statement of operations. Had the “held to maturity” investments been classified as “available-for-sale” investments at March 31, 2003, 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.

The following is a summary of amortized cost of the investment securities as of December 31, 2002:

Note 3.    EVALUATION OF LONG-LIVED ASSETS

The Company reviews all long-lived assets on a quarterly basis to determine if the anticipated cashflows from the assets will equal or exceed their capitalized costs. Our reviews as of March 31, 2003, concluded that no impairment of any long-lived asset 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% of which belongs to Kaiser) which exceeds its capitalized cost; (b) our 50% ownership interest in the West Valley Materials Recovery Facility and Transfer Station continues to generate significant net income and positive cashflow; (c) our long-term notes receivable are performing in accordance with the

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terms of the notes; and (d) our other real estate and building and equipment are recorded at the lower of cost or fair market values.

Note 4.    EAGLE MOUNTAIN CONTRACT WITH MANAGEMENT TRAINING CORP

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.

Note 5.    COMMITMENTS AND CONTINGENCIES

Environmental Contingencies.    As of March 31, 2003, based upon current information, the Company estimates that its future environmental liability related to certain matters 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 groundwater and other possible third party claims, would be approximately $3.9 million. However, the Company purchased, effective June 30, 2001, a 12 year $50 million insurance policy at a cost of approximately $3.8 million. This policy will cover, among other things, virtually any and all environmental liabilities and claims, including defense costs, (up to the $50 million policy limit) relating to the historical operations and assets of the Company reflected in the above $3.9 million liability. Due to the nature of the insurance policy, generally accepted accounting practices require that the cost of the policy be capitalized separately from the related liability and amortized as claims in the policy are made.

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PART II

Item 1.    LEGAL PROCEEDINGS

As discussed in the Company’s Annual Report on Form 10-K for 2002, the Company is engaged in certain claims and litigation. There were no material developments in any legal proceeding in the first quarter of 2003, except as otherwise discussed in the Company’s Annual Report on Form 10-K for 2002.

Item 2.    CHANGES IN SECURITIES

Not applicable.

Item 3.    DEFAULTS UPON SENIOR SECURITIES

Not applicable.

Item 4.    SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

Not applicable.

Item 5.    OTHER INFORMATION

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 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 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.

Item 6.    EXHIBITS AND REPORTS ON FORM 8-K

A.    Exhibits

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B.    Reports on Form 8-K

None.

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SIGNATURES

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

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CERTIFICATION

I, Richard E. Stoddard, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Kaiser Ventures LLC;

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

3.    Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.    The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)    designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)    evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

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

5.    The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

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

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

6.    The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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KAISER VENTURES LLC AND SUBSIDIARIES

CERTIFICATION

I, James F. Verhey, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Kaiser Ventures LLC;

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

3.    Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4.    The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)    designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b)    evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and

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

5.    The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

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

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

6.    The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

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