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What changed in Knife River Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Knife River Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+410 added−489 removedSource: 10-K (2026-02-20) vs 10-K (2025-02-21)

Top changes in Knife River Corp's 2025 10-K

410 paragraphs added · 489 removed · 322 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

73 edited+13 added−16 removed29 unchanged
Biggest changeAdditional details about each of the reportable segments as of and for the year ended December 31, 2024, is as follows: Pacific Northwest Mountain Central Energy Services Consolidated Knife River States of Operation Alaska, California and Hawaii Oregon and Washington Idaho, Montana and Wyoming Iowa, Minnesota, North Dakota, South Dakota and Texas California, Iowa, Nebraska, Oregon, South Dakota, Texas, Washington and Wyoming Aggregate Reserves (tons) 157.2 million 494.0 million 220.9 million 289.7 million — 1.2 billion Properties: Active Aggregate Sites* 16 52 32 82 — 182 Ready-Mix Plants 21 27 17 41 — 106 Asphalt Plants 4 12 15 20 — 51 Revenue $493.1 million $692.4 million $663.1 million $818.1 million $275.7 million $2,899.0 million Percent revenue by segment 17 % 23 % 23 % 28 % 10 % 100 % Revenue Composition: Construction Materials 76 % 59 % 43 % 58 % 100 % 61 % Contracting Services 24 % 41 % 57 % 42 % — % 39 % Public-Sector Services 72 % 77 % 79 % 95 % — % 83 % Private-Sector Services 28 % 23 % 21 % 5 % — % 17 % __________________ * Does not include 4 sites that are classified as exploration stage properties. 2 Index On January 1, 2025, we completed a reorganization of our operating segments, including the management of the segments, to align with our business strategy.
Biggest changeAdditional details about each of the reportable segments as of and for the year ended December 31, 2025, is as follows: West Mountain Central Energy Services Reportable Segment Totals States of Operation Alaska, California Hawaii, Oregon and Washington Idaho, Montana and Wyoming Iowa, Minnesota, North Dakota, South Dakota and Texas California, Iowa, Nebraska, Oregon, South Dakota, Texas, Washington and Wyoming Aggregate Reserves (tons) 705.1 million 226.2 million 372.8 million — 1.3 billion Properties: Active Aggregate Sites 1 71 35 102 — 208 Ready-Mix Plants 51 14 70 — 135 Asphalt Plants 18 15 22 — 55 Revenue 2 $1,210.1 million $644.0 million $1,004.8 million $338.0 million $3,196.9 million Percent revenue by segment 37 % 20 % 32 % 11 % 100 % Revenue Composition: Construction Materials 67 % 42 % 61 % 100 % 63 % Contracting Services 33 % 58 % 39 % — % 37 % Public-Sector Services 74 % 76 % 93 % — % 81 % Private-Sector Services 26 % 24 % 7 % — % 19 % __________________ 1.
We own and operate a state-of-the-art training facility, the Knife River Training Center, which is used corporate-wide to enhance the skills of both our new, and existing employees through both classroom education and hands on experience. The training facility also offers a variety of courses around leadership development available for all employees.
We own and operate a state-of-the-art training facility, the Knife River Training Center, which is used corporate-wide to enhance the skills of both our new and existing employees through both classroom education and hands on experience. The training facility also offers a variety of leadership development courses available for all employees.
In addition, certain environmental laws, such as CERCLA and EPA, impose strict requirements for companies to pay to remediate and restore sites where hazardous substances, hydrocarbons or solid wastes have been disposed, stored or released.
In addition, certain environmental laws, such as CERCLA, impose strict requirements for companies to pay to remediate and restore sites where hazardous substances, hydrocarbons or solid wastes have been disposed, stored or released.
These laws and regulations impose numerous obligations and limitations on our operations, including: • Zoning and land use requirements to obtain a permit or other approval before conducting regulated activities; • Restriction on the types, quantities and concentration of materials that can be released into the environment (including noise and discharges to air and water); • Restrictions on the management of hazardous wastes and underground storage tank systems, as well as obligations to clean up or remediate spills of hazardous materials into the environment; • Limitation or prohibition of activities on certain lands lying within wilderness, wetlands or other protected areas; • Obligations to restore or reclaim former mining areas; • Requirements to comply with specific health and safety criteria addressing worker protection; and • The imposition of substantial liabilities for pollution which may result from our operations.
These laws and regulations impose numerous obligations and limitations on our operations, including: • Zoning and land use requirements to obtain a permit or other approval before conducting regulated activities; • Restriction on the types, quantities and concentration of materials that can be released into the environment (including noise and discharges to air and water); • Restrictions on the management of hazardous wastes and underground storage-tank systems, as well as obligations to clean up or remediate spills of hazardous materials into the environment; • Limitation or prohibition of activities on certain lands within wilderness, wetlands or other protected areas; • Obligations to restore or reclaim former mining areas; • Requirements to comply with specific health and safety criteria addressing worker protection; and • The imposition of liabilities for pollution that may result from our operations.
Environmental Regulations With environment being one of our core values, our pledge to operate in an environmentally responsible manner is reviewed and encouraged through several measures, including oversight by professional environmental staff with reporting and accountability to regional operations leaders, regular review of environmental and sustainability disclosures by the executive Sustainability Committee, thorough audits of operating activities, and in-depth property reviews during due diligence on potential acquisitions.
Environmental Regulations With the environment being one of our core values, our pledge to operate in an environmentally responsible manner is reviewed and encouraged through several measures, including oversight by professional environmental staff with reporting and accountability to regional operations leaders, regular review of environmental and sustainability disclosures by the executive Sustainability Committee, thorough audits of operating activities, and in-depth property and environmental permit compliance reviews during due diligence on potential acquisitions.
However, customers often consider several other factors in selecting a service provider, such as technical expertise and experience, safety ratings, geographic presence, financial and operational resources and industry reputation around dependability. 5 Index Products and Services Our core product lines include: aggregates, ready-mix concrete, asphalt and liquid asphalt. We also perform related contracting services.
However, customers often consider several other factors in selecting a service 4 Index provider, such as technical expertise and experience, safety ratings, geographic presence, financial and operational resources and industry reputation around dependability. Products and Services Our core product lines include: aggregates, ready-mix concrete, asphalt and liquid asphalt. We also perform related contracting services.
The United States construction materials industry serves a diverse customer base that includes federal, state and municipal governmental agencies, commercial and residential developers and private parties. The mix of customers varies by region and economic conditions. 3 Index The main factors and trends in the United States construction materials and related contracting services industry include: • Key economic factors .
The United States construction materials industry serves a diverse customer base that includes federal, state and municipal governmental agencies, commercial and residential developers and private parties. The mix of customers varies by region and economic conditions. The main factors and trends in the United States construction materials and related contracting services industry include: • Key economic factors .
For more information about the aggregate sites, see “Item 2. Properties.” (2) Ready-Mix Concrete We produce ready-mix concrete through our 106 ready-mix plants situated across 13 states. Our vertically integrated portfolio of assets allows us to provide most of the aggregates we use in the production of ready-mix concrete.
For more information about the aggregate sites, see “Item 2. Properties.” (2) Ready-Mix Concrete We produce ready-mix concrete through our 135 ready-mix plants situated across 13 states. Our vertically integrated portfolio of assets allows us to provide most of the aggregates we use in the production of ready-mix concrete.
Most of the production and sales of materials and related services in the northern United States occurs between May and October, in line with end market activity. • Cyclicality . The demand for construction materials products and contracting services is significantly influenced by the cyclical nature of the economy. • Regulations .
Most of the production and sales of materials and related services in the northern United States occurs between May and October, in line with end market activity. • Cyclicality . The demand for construction materials products and contracting services is significantly influenced by the cyclical nature of the economy. 3 Index • Regulations .
To be the employer of choice for the broadest pool of talent and skill, we are committed to equal employment opportunity and affirmative action and are dedicated to the achievement of equality and opportunity for all employees and applicants for employment. We strive to meet or exceed all EEO and affirmative action laws, directives and legislation.
To be the employer of choice for the broadest pool of talent and skill, we are committed to equal employment opportunity and affirmative action and are dedicated to the achievement of equality and opportunity for all 8 Index employees and applicants for employment. We strive to meet or exceed all EEO and affirmative action laws, directives and legislation.
Smaller, independent operators make up the majority of our competition; however, we also face competition in some markets from large, publicly traded United States aggregates producers, including Cemex S.A.B. de C.V., CRH plc, Eagle Materials, Inc., Granite Construction, Inc., Heidelberg Materials, Holcim, Martin Marietta Materials, Inc., Construction Partners, Inc., and Vulcan Materials Company.
Smaller, independent operators make up the majority of our competition; however, we also face competition in some markets from large, publicly traded United States aggregates producers, including Amrize Ltd, Cemex S.A.B. de C.V., CRH plc, Eagle Materials, Inc., Granite Construction, Inc., Heidelberg Materials, Martin Marietta Materials, Inc., Construction Partners, Inc., and Vulcan Materials Company.
ITEM 1. BUSINESS Overview Knife River Corporation (referred to as we, our, us, the Company or Knife River) is an aggregates-led construction materials and contracting services provider in the United States.
ITEM 1. BUSINESS Overview Knife River Corporation (referred to as we, our, us, the Company or Knife River) is an aggregates-based construction materials and contracting services provider in the United States.
We engage in talent and succession planning processes and review succession plans with senior leaders at least annually, focusing on high-performing and high-potential talent, diverse talent, and succession for critical roles. We provide annual compliance training for all office staff and had 100 percent participation in 2024.
We engage in talent and succession planning processes and review succession plans with senior leaders at least annually, focusing on high-performing and high-potential talent, diverse talent, and succession for critical roles. We provide annual compliance training for all office staff and had nearly 100 percent participation in 2025.
We maintain good working relationships with labor unions and do not anticipate any significant issues with any unions in 2025. 9 Index Our compensation programs are designed around competitive market-based pay, coupled with an incentive structure aligned with our financial performance and the employees’ individual performance, which aids in attracting, retaining and motivating employees to achieve the best possible results.
We maintain good working relationships with labor unions and do not anticipate any significant issues with any unions in 2026. Our compensation programs are designed around competitive market-based pay, coupled with an incentive structure aligned with our financial performance and the employees’ individual performance, which aids in attracting, retaining and motivating employees to achieve the best possible results.
In addition, full-time employees are eligible for health insurance, physical, mental and financial wellness programs, paid and unpaid leave, retirement plans, life insurance, disability and accident coverage, and more. We also offer a variety of voluntary benefits to allow employees to select the best options to meet their individual needs.
In addition, full-time employees are eligible for medical, dental and vision insurance; physical, mental and financial wellness programs; paid and unpaid leave; retirement plans; life insurance; disability and accident coverage; and more. We also offer a variety of voluntary benefits to allow employees to select the best options to meet their individual needs.
Since implementing the EDGE strategy in 2023, we have steadily increased our Adjusted EBITDA margin, maintained a strong balance sheet, completed six acquisitions and drove excellence throughout the organization. For a discussion of Adjusted EBITDA and Adjusted EBITDA margin, see “Item 7.
Since implementing the EDGE strategy in 2023, we have increased our Adjusted EBITDA margin, maintained a strong balance sheet, completed 11 acquisitions and drove excellence throughout the organization. For a discussion of Adjusted EBITDA and Adjusted EBITDA margin, see “Item 7.
Our website and the information contained on or connected to that site are not incorporated into this report. 12 Index
Our website and the information contained on or connected to that site are not incorporated into this report. 11 Index
Due to the time-sensitive nature of delivering ready-mix concrete, we focus on supplying customers near our facilities. In 2024, we sold 3.5 million cubic yards of ready-mix concrete. Incremental to the hauling capabilities across products and services, ready-mix concrete plants are complemented by our fleet of ready-mix trucks and drivers who safely deliver heavy materials on time.
Due to the time-sensitive nature of delivering ready-mix concrete, we focus on supplying customers near our facilities. In 2025, we sold 3.9 million cubic yards of ready-mix concrete. Incremental to the hauling capabilities across products and services, ready-mix concrete plants are complemented by our fleet of ready-mix trucks and drivers who safely deliver materials on time.
Our 1.2 billion tons of aggregate reserves provide the foundation for our vertically integrated business strategy, with approximately 37 percent of our aggregates in 2024 being used internally to support value-added downstream products (ready-mix concrete and asphalt) and contracting services (asphalt paving, heavy-civil construction, concrete construction, site development and grading services, and in some segments the manufacturing of prestressed concrete products).
Our 1.3 billion tons of aggregate reserves provide the foundation for our vertically integrated business strategy, with approximately 35 percent of our aggregates in 2025 being used internally to support value-added downstream products (ready-mix concrete and asphalt) and contracting services (asphalt paving, heavy-civil construction, concrete construction, site development and grading services, and in some segments the manufacturing of prestressed concrete products).
We are strategically focused on being the provider of choice in mid-size, high-growth markets and are committed to our plan for continued growth and to delivering for our stakeholders—customers, communities, employees and stockholders—by executing on our four core values: People, Safety, Quality and the Environment.
We are strategically focused on being the provider of choice in mid-size, higher-growth markets and are committed to our plan for continued growth and to delivering for our stakeholders—customers, communities, employees and stockholders—by executing on our Competitive EDGE initiatives and our four core values: People, Safety, Quality and the Environment.
Through our network of 182 active aggregate sites, 106 ready-mix plants, 51 asphalt plants and 9 liquid asphalt terminals, we supply construction materials and contracting services to customers across 14 states. Our construction materials are sold to public and private-sector customers, including federal, state and municipal governments, as well as industrial, commercial and residential developers and other private parties.
Through our network of 208 active aggregate sites, 135 ready-mix plants, 55 asphalt plants and 9 liquid asphalt terminals, we supply construction materials and contracting services to customers across 14 states. Our construction materials are sold to public and private-sector customers, including federal, state and municipal governments, as well as industrial, commercial and residential developers and other private parties.
Employees in managerial or supervisory positions have an average tenure of 15 years, which demonstrates our workforce’s pride in and dedication to the company. We believe we have good relationships with our employees, including our unionized workforce. As of December 31, 2024, we employed 4,761 people, all of whom were employed in the United States.
Employees in managerial or supervisory positions have an average tenure of 15 years, which demonstrates our workforce’s pride in and dedication to the company. We believe we have good relationships with our employees, including our unionized workforce. As of December 31, 2025, we employed 5,298 people, all of whom were employed in the United States.
The total number of hourly personnel at any given time is subject to the volume of projects in progress and fluctuates on a seasonal basis. At the peak of the 2024 construction season, we employed over 5,900 people. The table below provides additional details on the employee demographics as of December 31, 2024.
The total number of hourly personnel at any given time is subject to the volume of projects in progress and fluctuates on a seasonal basis. At the peak of the 2025 construction season, we employed nearly 6,900 people. The table below provides additional details on the employee demographics as of December 31, 2025.
Management’s Discussion and Analysis of Financial Condition and Results of Operations-Non-GAAP Financial Measures.” Industry The United States construction materials industry is highly fragmented. Industry participants typically range from small, private companies focused on a single material, product or area to large, publicly traded corporations that provide a broad suite of materials and services.
Management’s Discussion and Analysis of Financial Condition and Results of Operations-Non-GAAP Financial Measures.” Industry The United States construction materials industry is highly fragmented. Industry participants typically range from small, private companies to large publicly traded corporations that provide a broad suite of materials and services.
Demand in the contracting services industry is influenced by the cyclical nature of the construction industry and correlates with the demand for construction materials. The contracting services portion of our business is heavily weighted toward public markets, which provide more stability throughout the economic cycles.
Demand in the contracting services industry is mostly influenced by public funding and tax revenues and correlates with the demand for construction materials. The contracting services portion of our business is heavily weighted toward public markets, which provide more stability throughout the economic cycles.
Of the 51 plants, 20 are portable plants that support large asphalt paving projects on roadways, airports and commercial sites. Similar to ready-mix concrete, asphalt sets rapidly, limiting delivery to within close proximity to the production facility. In 2024, we sold 6.5 million tons of asphalt.
Of the 55 plants, 22 are portable plants that support large asphalt paving projects on roadways, airports and commercial sites. Similar to ready-mix concrete, asphalt sets rapidly, limiting delivery to within close proximity to the production facility. In 2025, we sold 6.3 million tons of asphalt.
We consider our employees to be our most valuable resource and they are critical to our success. Significant resources are utilized to attract, develop and retain extraordinary and diverse talent and fully promote each employee’s capabilities. Our focus on workforce, talent development, talent acquisition and succession planning has provided for a deep bench of talented employees.
Significant resources are utilized to attract, develop and retain extraordinary and diverse talent and fully promote each employee’s capabilities. Our focus on workforce, talent development, talent acquisition and succession planning has provided for a deep bench of talented employees.
These federal, state and local laws and regulations include, among others: the federal Clean Air Act and the federal Clean Water Act; the Resource Conservation and Recovery Act; the federal Mine Safety and Health Administration; the federal Occupational Safety and Health Administration; the federal CERCLA; the federal EPA; and, occasionally, the Endangered Species Act.
These federal, state and local laws and regulations include, among others: the federal Clean Air Act and the federal Clean Water Act; the Resource Conservation and Recovery Act; the federal CERCLA; and, occasionally, the Endangered Species Act.
We believe public-sector funding is subject to fewer fluctuations in spending, as government funding tends to be less correlated with economic cycles and more reliant on approvals of government appropriation bills toward infrastructure initiatives.
We believe public-sector funding is subject to fewer fluctuations in spending, as government funding tends to be less correlated with economic cycles and more reliant on approvals of government appropriation bills toward infrastructure initiatives. Private Sector . Our private-sector customers include both residential and nonresidential construction applications.
We strive to offer high-quality products and services while emphasizing safety, empowering our team members, being environmentally responsible and engaging with our local communities. We believe our aggregates-led, vertically integrated business model—combined with our Western United States geographic footprint and our foundational EDGE strategy—provides a clear competitive advantage in driving long-term, profitable growth.
We strive to offer high-quality products and services while emphasizing safety, empowering our team members, being environmentally responsible and engaging with our local communities. 2 Index We believe our aggregates-based, vertically integrated business model—combined with our EDGE strategy and our footprint in mid-size, higher-growth markets—provides a clear competitive advantage in driving long-term, profitable growth.
Our SEC filings are available to the public over the internet at the SEC’s website at https://www.sec.gov and on our website free of charge at https://www.kniferiver.com as soon as reasonably practicable after they are filed with or furnished to the SEC.
Available Information We file annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the internet at the SEC’s website at https://www.sec.gov and on our website free of charge at https://www.kniferiver.com as soon as reasonably practicable after they are filed with or furnished to the SEC.
We are not dependent on any single customer or group of customers for sales of our products and services, where the loss of which would have a material adverse effect on our business. No individual customer accounted for more than 10 percent of our 2024 revenue.
We are not dependent on any single customer or group of customers for sales of our products and services, where the loss of which would have a material adverse effect on our business.
Union Non-Union Total Hourly 589 3,204 3,793 Salaried — 968 968 Total 589 4,172 4,761 Our union employees are represented by 39 collective-bargaining agreements, four of which are currently in negotiations. The majority of the collective-bargaining agreements contain provisions that prohibit work stoppages or strikes and provide dispute resolution through binding arbitration in the event of an extended disagreement.
Union Non-Union Total Hourly 599 3,589 4,188 Salaried — 1,110 1,110 Total 599 4,699 5,298 Our union employees are represented by 39 collective-bargaining agreements, two of which are currently in negotiations. The majority of the collective-bargaining agreements contain provisions that prohibit work stoppages or strikes and provide dispute resolution through binding arbitration in the event of an extended disagreement.
The Energy Services segment, which has locations throughout our geographic footprint, produces and supplies liquid asphalt, primarily for use in asphalt road construction, and is a supplier to some of our other segments.
Although not common to all locations, the geographic segments also sell cement, merchandise and other building materials and related services. The Energy Services segment, which has locations throughout our geographic footprint, produces and supplies liquid asphalt, primarily for use in asphalt road construction, and is a supplier to some of our other segments.
Asphalt Asphalt is a combination of approximately 95 percent aggregates bound together by approximately 5 percent liquid asphalt. Asphalt is typically used in new road construction as well as road maintenance and repair, covering approximately 94 percent of the 3 million miles of paved roads in the United States, according to the National Asphalt Pavement Association.
Asphalt is typically used in new road construction as well as road maintenance and repair, covering approximately 94 percent of the three million miles of paved roads in the United States, according to the National Asphalt Pavement Association.
Each geographic segment offers a vertically integrated suite of products and services. Each of our geographic segments mines, processes and sells construction aggregates (crushed stone and sand and gravel); produces and sells asphalt; produces and sells ready-mix concrete as well as vertically integrating our contracting services to support our aggregate-based product lines.
Each of our geographic segments mines, processes and sells construction aggregates (crushed stone and sand and gravel); produces and sells asphalt; produces and sells ready-mix concrete as well as vertically integrating our contracting services to support our aggregate-based product lines. Contracting services include heavy-civil construction, asphalt and concrete paving, and site development and grading.
Ready-Mix Concrete Ready-mix concrete, a mixture principally comprised of aggregates, cement and water, is measured in cubic yards and specifically batched or produced for customers’ projects and then transported and poured on site.
This fragmentation is a result of high transportation costs that typically limit supply areas of producers. Ready-Mix Concrete Ready-mix concrete, a mixture principally comprised of aggregates, cement and water, is measured in cubic yards and specifically batched or produced for customers’ projects and then transported and poured on site.
We mine crushed stone and sand and gravel from our aggregate sites, as these aggregates are utilized in general construction and are a major component in our production of ready-mix concrete and asphalt paving products. Leveraging our vertically integrated platform, 34 percent of our aggregates revenue was derived from internal sales in 2024.
We mine crushed stone and sand and gravel from our aggregate sites, as these aggregates are utilized in general construction and are a major component in our production of ready-mix concrete and asphalt paving products. Leveraging our vertically integrated platform, approximately 35 percent of our aggregates volume was used internally in our other product lines in 2025.
Cement supply and storage Cement is a key ingredient in the production of ready-mix concrete. Our core supply of cement is sourced from a diverse range of suppliers. We have strategically located cement storage facilities in Alaska and Hawaii that can hold approximately 60,000 tons and 90,000 tons of cement, respectively.
Our core supply of cement is sourced from a diverse range of suppliers. We have strategically located cement storage facilities in Alaska and Hawaii that can hold approximately 60,000 tons and 90,000 tons of cement, respectively. We have six distribution centers with storage and barging capabilities across the islands of Hawaii.
We are an industry leader in safe and efficient delivery of ready-mix concrete and have pioneered what has become the industry-standard training program for ready-mix delivery professionals. We continue to update and improve the program with a focus on safety for drivers and the public.
We are an industry leader in safe and efficient delivery of ready-mix concrete and have pioneered what has become the industry-standard training program for ready-mix delivery professionals.
In the private sector, our contracting services projects were within the residential, commercial and industrial markets. 7 Index The following table sets forth revenue details applicable to our contracting services for the year ended December 31, 2024: Public Projects Private Projects Streets & Highways 66 % Buildings/Sitework 3 % Airports 5 % Residential 6 % Bridges 4 % Streets & Highways 2 % Marine 2 % Other 6 % Other 6 % Total 83 % Total 17 % End Markets Public Sector .
The following table sets forth revenue details applicable to our contracting services for the year ended December 31, 2025: Public Projects Private Projects Streets & Highways 65 % Buildings/Sitework 4 % Airports 4 % Residential 6 % Bridges 4 % Streets & Highways 3 % Marine 3 % Other 6 % Other 5 % Total 81 % Total 19 % End Markets Public Sector .
We have six additional distribution centers with storage and barging capabilities across the islands of Hawaii. (6) Contracting Services Our contracting services include responsibilities as general contractor and subcontractor, aggregate laydown, asphalt paving, concrete construction, site development and bridges, and in some segments the manufacturing of prestressed concrete products.
(6) Contracting Services Our contracting services include responsibilities as general contractor and subcontractor, aggregate laydown, asphalt paving, concrete construction, site development and bridges, and in some segments the manufacturing of prestressed concrete products.
One such site is the Portland, Oregon, Harbor Superfund Site where Knife River - 11 Index Northwest was named as a PRP by the EPA related to a commercial property site acquired in 1999. For further information related to environmental reclamation obligations, see Item 8. Note 18.
One such site is the Portland, Oregon, Harbor Superfund Site where Knife River - Northwest was named as a PRP by the EPA related to a commercial property site acquired in 1999.
For the year ended December 31, 2024, our revenue and gross profit by products and services were as follows: Revenue ($ in millions) (% of total) Gross Profit ($ in millions) Margin Aggregates $ 556.1 15.8 % Aggregates $ 114.3 20.6 % Ready-mix concrete 655.5 18.6 % Ready-mix concrete 106.0 16.2 % Asphalt 441.5 12.6 % Asphalt 68.2 15.4 % Liquid asphalt 238.9 6.8 % Liquid asphalt 51.5 21.6 % Other 265.8 7.6 % Other 53.3 20.1 % Contracting services 1,358.2 38.6 % Contracting services 176.5 13.0 % Total gross revenue $ 3,516.0 100 % Internal sales (617.0) Total revenue $ 2,899.0 Total gross profit $ 569.8 19.7 % (1) Aggregates We supply high-quality aggregates through our 1.2 billion tons of permitted aggregate reserves, which are sourced from our aggregate sites across 11 states.
For the year ended December 31, 2025, our revenue and gross profit by products and services were as follows: Revenue ($ in millions) (% of total) Gross Profit ($ in millions) Margin Aggregates $ 617.1 16.3 % Aggregates $ 114.1 18.5 % Ready-mix concrete 779.4 20.6 % Ready-mix concrete 133.6 17.1 % Asphalt 421.0 11.2 % Asphalt 65.4 15.5 % Liquid asphalt 296.0 7.8 % Liquid asphalt 49.5 16.7 % Other 279.8 7.5 % Other 60.4 21.6 % Contracting services 1,383.9 36.6 % Contracting services 154.3 11.2 % Total gross revenue $ 3,777.2 100 % Internal sales (631.2) Total revenue $ 3,146.0 Total gross profit $ 577.3 18.4 % (1) Aggregates We supply high-quality aggregates through our 1.3 billion tons of permitted aggregate reserves, which are sourced from our aggregate sites across 13 states.
Our company is also subject to comprehensive environmental permit requirements, which are usually associated with new mining operations, although requirements vary widely from state to state and even within states. In some areas, land use regulations and associated permitting requirements are minimal. However, some states and local jurisdictions have very demanding requirements for permitting new mines.
For further information related to environmental reclamation obligations, see Item 8 - Note 18. 10 Index Our company is also subject to comprehensive environmental permit requirements, which are usually associated with new mining operations, although requirements vary widely from state to state and even within states. In some areas, land use regulations and associated permitting requirements are minimal.
Our vertical integration and local knowledge enables us to maintain a strong understanding of the needs of our customers. In addition, we have a strong commitment to environmental stewardship, which assists us in obtaining new permits and new reserves. Seasonality Results are affected by seasonal fluctuations, with the second and third quarters historically being the quarters with the highest activity.
Our vertical integration and local knowledge enables us to maintain a strong understanding of the needs of our customers. In addition, we have a strong commitment to safety and environmental stewardship, which assists us in obtaining new permits and new reserves.
It also can be poured at a manufacturing facility to produce prefabricated building solutions, such as wall panels, concrete roofing systems, bridge girders, parking garages and stadium components.
It also can be poured at a manufacturing facility to produce prefabricated building solutions, such as wall panels, concrete roofing systems, bridge girders, parking garages and stadium components. According to the National Ready Mixed Concrete Association, concrete is the most widely used material in the construction sector today.
We are also currently rolling out Coaches Clinics for mid-level management and have expanded our internship program. For additional information related to human capital and other information, refer to our 2024 Sustainability Report, which is expected to be published to our website in the first quarter of 2025, and is not incorporated by reference herein.
For additional information related to human capital and other information, refer to our 2025 Sustainability Report, which is expected to be published to our website in the first quarter of 2026, and is not incorporated by reference herein.
We have nine liquid asphalt terminal sites and six used-oil collection points. (5) Other Although not common to all locations, we provide various other products and services, depending on customer needs. These include, but are not limited to, retail sales of cement in Alaska and Hawaii and petroleum recovery services in the Energy Services segment.
(5) Other Although not common to all locations, we provide various other products and services, depending on customer needs. These include, but are not limited to, retail sales of cement in Alaska and Hawaii and petroleum recovery services in the Energy Services segment. Cement supply and storage Cement is a key ingredient in the production of ready-mix concrete.
We focus primarily on supplying markets with strong local demand, and in most cases serve customers close to our strategically located aggregate sites. In 2024, we sold 31.8 million tons of aggregates, with 30.3 million being produced from all aggregate mining properties.
We focus primarily on supplying markets with strong local demand, and in most cases serve customers close to our strategically located aggregate sites. In 2025, we sold 32.5 million tons of aggregates, with a majority supplied by our aggregate mining operations.
Asphalt plants The following table sets forth details applicable to our non-portable and portable asphalt plants as of December 31, 2024: Segment Non-portable Asphalt Plants Portable Asphalt Plants Total Asphalt Plants Pacific 4 — 4 Northwest 11 1 12 Mountain 8 7 15 Central 8 12 20 Total 31 20 51 (4) Liquid asphalt We distribute liquid asphalt through our Energy Services sites and have the capacity to service neighboring states through storage facilities capable of storing approximately 413,000 tons of liquid asphalt across multiple states, a 50 percent increase over the prior year primarily due to the acquisition of Albina Asphalt in the fourth quarter of 2024.
Asphalt plants The following table sets forth details applicable to our non-portable and portable asphalt plants as of December 31, 2025: Segment Non-portable Asphalt Plants Portable Asphalt Plants Total Asphalt Plants West 15 3 18 Mountain 8 7 15 Central 10 12 22 Total 33 22 55 (4) Liquid asphalt We distribute liquid asphalt through our nine liquid asphalt terminal sites and have the capacity to service neighboring states through storage facilities capable of storing approximately 413,000 tons of liquid asphalt across multiple states.
The public side includes federal, state and municipal governmental agencies with contracting services projects related to highways, streets and other public infrastructure. Funding available for construction from governmental agencies largely depends on federal, state and municipal budgets allocated to the expansion and improvement of national infrastructure.
Funding available for construction from governmental agencies largely depends on federal, state and municipal budgets allocated to the expansion and improvement of national infrastructure. The private side includes a broad spectrum of customers across industrial, commercial and residential developers and other private parties.
The private side includes a broad spectrum of customers across industrial, commercial and residential developers and other private parties. The mix of sales by customer class varies year to year depending on the variability in type of work. 8 Index Our top 15 customers accounted for about 22 percent of our 2024 revenue, of which seven were state-level DOTs.
The mix of sales by customer class varies year to year depending on the variability in type of work. Our top 15 customers accounted for about 21 percent of our 2025 revenue, of which nine were state-level DOTs.
We are subject to complex federal, state and local environmental compliance and reclamation regulations.
We are subject to complex federal, state and local environmental compliance and reclamation regulations imposed by the federal Mine Safety and Health Administration, the federal Occupational Safety and Health Administration, the federal EPA and others.
Additionally, we have recorded asset retirement liabilities on our balance sheet related to the reclamation obligations for our mining activities. We believe we are in compliance with all applicable environmental laws and regulations and that any existing non-compliance is not likely to have a material adverse effect on our results of operations.
We believe we are in compliance with all applicable environmental laws and regulations and that any existing non-compliance is not likely to have a material adverse effect on our results of operations. However, there can be no assurance that future compliance costs or liabilities associated with such laws and regulations or activities will not be significant.
We leverage our diverse geographic footprint to partially offset volatility originating from single local economies, and have the flexibility to reallocate resources from markets experiencing a downturn to markets that may be experiencing an economic upswing. Residential construction typically includes single-family homes and multi-family units, such as apartments and condominiums.
Unlike public-sector customers, spending by private-sector customers is more dependent on local and national economic cycles. We leverage our diverse geographic footprint to partially offset volatility originating from single local economies, and have the flexibility to reallocate resources from markets experiencing a downturn to markets that may be experiencing an economic upswing.
The following table sets forth details applicable to our ready-mix concrete plants and related fleet as of December 31, 2024: Segment Plants Mixer Trucks Pacific 21 197 Northwest 27 244 Mountain 17 210 Central 41 340 Total 106 991 6 Index (3) Asphalt We produce and deliver asphalt from 51 plants across 10 states, most often utilizing our own aggregates in the production process.
We continue to update and improve the program with a focus on safety for drivers and the public. 5 Index The following table sets forth details applicable to our ready-mix concrete plants and related fleet as of December 31, 2025: Segment Plants Mixer Trucks West 51 408 Mountain 14 207 Central 70 535 Total 135 1,150 (3) Asphalt We produce and deliver asphalt from 55 plants across 10 states, most often utilizing our own aggregates in the production process.
We regularly monitor and review our operations, which includes reviewing procedures and policies for compliance with our operating permits and related laws and regulations. We have incurred, and may incur in the future, significant operating and capital expenditures to comply with environmental laws and regulations. During 2024, we incurred $3.1 million related to compliance.
We have incurred, and may incur in the future, significant operating and capital expenditures to comply with environmental laws and regulations. During 2025 and 2024, we incurred $4.4 million and $3.1 million, respectively, in capital expenditures related to environmental compliance and expect to incur $8.6 million in 2026, $6.8 million in 2027 and $9.8 million in 2028.
Following the Distribution, Knife River became an independent, publicly traded company and its common stock is listed under the symbol “KNF” on the New York Stock Exchange. Strata Corporation Acquisition On December 20, 2024, KRC Holdings, Inc.
Following the Distribution, Knife River became an independent, publicly traded company and its common stock is listed under the symbol “KNF” on the New York Stock Exchange. Strata Corporation Acquisition On March 7, 2025, we acquired Strata Corporation (Strata), a leading construction materials and contracting services provider in North Dakota and northwestern Minnesota.
Growth: Further strengthen our market position through organic and inorganic growth opportunities, with an emphasis on aggregate-based operations in mid-sized, high-growth markets. Excellence: Be best in class in all aspects of our business, providing ongoing, high-quality training at every level of the company to better serve our customers and provide advancement opportunities for our team.
Excellence: Be best in class in all aspects of our business, providing ongoing, high-quality training at every level of the company that supports our core values, helps us better serve our customers and provide advancement opportunities for our team.
Competition We operate in a largely fragmented industry, including large, public companies and many small, privately held companies.
No individual customer accounted for more than 10 percent of our 2025 revenue. 7 Index Competition We operate in a largely fragmented industry, including large, public companies and many small, privately held companies.
Strata is a vertically-integrated, aggregates-based company that will add 28 ready-mix plants, three asphalt plants, a construction division and rail and trucking assets to our existing operations in our Central segment. The Acquisition is expected to close in the first half of 2025, subject to customary closing conditions.
Strata is a vertically-integrated, aggregates-based company that added approximately 30 years of aggregate reserves, 24 ready-mix plants, three asphalt plants, a construction division and rail and trucking assets to our existing operations in our Central segment. The purchase price for Strata totaled $454.0 million and was subject to post-closing adjustments.
Vertical integration allows us to have direct internal access to critical raw materials, resulting in competitive advantages from better control of product inventory. In 2024, most of our contracting services were related to “horizontal” construction, such as streets and highways, airports and bridges for customers in the public sector.
Vertical integration allows us to have direct internal access to critical raw materials, resulting in competitive advantages as we can better control the inventory used in our contracting services projects and the phasing of project timing.
We also adhere to seven key principles regarding safety: • All injuries can be prevented; • Working safely is a condition of employment for all employees; • Management must demonstrate leadership in preventing injuries by providing a safe work environment, adequate resources, performance incentives and appropriate follow-up on any unsafe conditions or actions; • All employees are responsible for preventing injuries to themselves and others; • All operating exposures can be safeguarded or controlled; • Training employees to work safely is essential; and • Preventing personal injuries and property damage is good business. 10 Index We have a goal of zero workplace injuries and have developed a safety culture complete with programs, trainings, and best practices appropriate for our industry and operations.
We also adhere to the following key principles regarding safety: • All injuries can be preventable; • Team members are expected to live safety, on the job and at home, as a value and alignment with Knife River’s principle of developing a strong and cohesive Team; • Management must demonstrate leadership in preventing injuries by building trust within their teams, empowering individual ownership of safety, providing a safe work environment, ensuring adequate resources are available, and ensuring accountability for unsafe conditions or actions; • All employees have ownership over safety for themselves and their teammates and are responsible for preventing injuries to themselves and others; • All operating exposures can be safeguarded or controlled; • Training employees to work safely is essential; and • Preventing personal injuries and property damage is good business. 9 Index Our ultimate goal remains zero workplace injuries, supported by industry-specific best practices and continuous improvement strategies.
The reports generally include suggested actions to mitigate the projected adverse impacts. Nonetheless, we have been successful in obtaining mining and other land-use permits that provide for sufficient permitted reserves to support our operations. Individual permits applicable to our various operations are managed and tracked as they relate to the statuses of the application, modification, renewal, compliance and reporting procedures.
The report can include projected impacts of the proposed project on air and water quality, wildlife, noise levels, traffic, scenic vistas and other environmental factors. The reports generally include suggested actions to mitigate the projected adverse impacts. Nonetheless, we have been successful in obtaining mining and other land-use permits that provide for sufficient permitted reserves to support our operations.
Our safety program utilizes the three Ts: Tools, Training and Time, as a structure for us to provide our employees with the proper tools and training to safely and successfully perform their jobs. We continuously promote our commitment to the safety and health of our employees through a variety of resources, including continual training, education programs, and benefit offerings.
These beliefs are the foundation for our team members’ commitment to our safety culture and that we always do the right thing…first, last and always. Our safety program utilizes the three Ts: Tools, Training and Time, as a structure for us to provide our employees with the proper skills and expectations to safely and successfully perform their jobs.
Our ability to provide contracting services in the states where we operate depends on the weather. In states with colder winter weather, our contracting services are primarily performed from May through October, compared to most of the year in states with largely consistent warmer weather. Employees “People” is the first of our core values.
Seasonality Results are affected by seasonal fluctuations, with the second and third quarters historically being the quarters with the highest activity. In states with colder winter weather, our contracting services are primarily performed from May through October, compared to most of the year in states with largely consistent warmer weather.
Business Segments Our focus is on the vertical integration of our products and services by offering our customers a single source for construction materials and related contracting services. As of December 31, 2024, we operated in 14 states across the United States through six operating segments: Pacific, Northwest, Mountain, North Central, South and Energy Services.
Business Segments Our focus is on the vertical integration of our products and services by offering our customers a single source for construction materials and related contracting services. In January 2025, we made a change to our organizational structure to better align with our business strategy.
According to the United States Census Bureau, nonresidential construction in 2024 was $743.8 billion, which was 5.3 percent above 2023 amounts. Residential and nonresidential private construction are not major sources of revenue for all our segments, but they are important markets for the materials side of our business.
Residential and nonresidential private construction are not major sources of revenue for all our segments, but they are important markets for the materials side of our business. In addition to providing aggregates to these end markets, the majority of our downstream ready-mix volumes go into private-sector projects.
Capital expenditures related to environmental compliance are anticipated to be $5.6 million in 2025, $9.1 million in 2026 and $9.4 million in 2027. These amounts do not include expenditures related to what may be ultimately determined with regard to the issues described previously for the Portland, Oregon, Harbor Superfund Site.
These amounts do not include expenditures related to what may be ultimately determined with regard to the issues described previously for the Portland, Oregon, Harbor Superfund Site. Additionally, we have recorded asset retirement liabilities on our balance sheet related to the reclamation obligations for our mining activities.
Environmental impact reports are sometimes required before a mining permit application can be considered for approval. These reports can take several years to complete. The report can include projected impacts of the proposed project on air and water quality, wildlife, noise levels, traffic, scenic vistas and other environmental factors.
However, some states and local jurisdictions have very demanding requirements for permitting new mines. Environmental impact reports are sometimes required before a mining permit application can be considered for approval. These reports can take several years to complete.
In addition to providing aggregates to these end markets, the majority of our downstream ready-mix volumes go into private-sector projects. Customers Our customers consist of public and private-sector customers, with public-sector customers contributing about 83 percent of our revenues from contracting services in 2024.
Customers Our customers consist of public and private-sector customers, with public-sector customers contributing about 81 percent of our revenues from contracting services in 2025. The public side includes federal, state and municipal governmental agencies with contracting services projects related to highways, streets and other public infrastructure.
According to the National Ready Mixed Concrete Association, concrete is the most widely used material in the construction sector today. 4 Index Due to the relative speed at which ready-mix concrete sets, supply is generally localized and delivered within close proximity to the production site, with an estimated 7,000-plus ready-mix concrete batching plants in the United States and Canada according to the National Ready Mixed Concrete Association.
Due to the relative speed at which ready-mix concrete sets, supply is generally localized and delivered within close proximity to a production site. Asphalt Asphalt is a combination of approximately 95 percent aggregates bound together by approximately 5 percent liquid asphalt.
Removed
(“Buyer”), a Delaware corporation and an indirect subsidiary of the Company, entered into an Asset and Equity Purchase Agreement (the “Purchase Agreement”) by and among Buyer and (i) Strata Corporation, a North Dakota corporation (“Strata”), (ii) Glacier Resources, Ltd., a North Dakota corporation (“Glacier Resources” and, together with Strata, the “Acquired Companies”), (iii) the equity holders of the Acquired Companies (such equity holders together with a new corporation to be formed in connection with certain pre-closing restructuring activities, the “Equity Sellers”), (iv) Landmark Investments, L.L.C., a North Dakota limited liability company (“Asset Seller” and, together with the Equity Sellers, the “Sellers”), (v) the current equity holders of Asset Seller (the “Asset Seller Owners”), (vi) each of the ultimate beneficiaries of Equity Sellers that are trusts (together with the Sellers and the Asset Seller Owners, the “Seller Group Members”), and (vii) a representative of the Seller Group Members (“Sellers’ Representative”), whereby Buyer (or its designee) will acquire (a) 100% of the issued and outstanding equity interests of Strata, (b) 100% of the issued and outstanding equity interests of Glacier Resources and (c) certain assets of the Asset Seller (the “Acquisition”) for $454.0 million in cash, subject to customary purchase price adjustments pursuant to the terms and subject to the conditions set forth in the Purchase Agreement.
Added
The results of operations and balance sheet accounts for Strata are included in the consolidated financial statements from the date of acquisition. For more information on the acquisition, see Item 8 - Note 3.
Removed
In addition to cash on hand, Buyer intends to use a portion of the proceeds from the entry into a new $500 million Term Loan B facility to fund the Acquisition. 1 Index Strata Corporation is a leading construction materials and contracting services provider in North Dakota and northwestern Minnesota.
Added
We reorganized our business segments to reflect changes in the way our chief operating decision maker evaluates performance, makes operating decisions and allocates resources. Our former Pacific and Northwest operating segments were combined to form the new West operating segment. Our 1 Index former North Central and South operating segments were combined to form the new Central operating segment.
Removed
The foregoing description of the Purchase Agreement and the transactions contemplated thereby do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Purchase Agreement, a copy of which is attached as Exhibit 2.1 to our Current Report on Form 8-K, filed on December 26, 2024.
Added
The reorganization resulted in four operating segments: West, Mountain, Central and Energy Services, each of which is also a reportable segment. The prior year has been recast to conform to the current reportable segment presentation. Our West, Mountain and Central segments are organized by geographic location and each offers a vertically integrated suite of products and services.
Removed
These operating segments are used to determine our reportable segments: Pacific, Northwest, Mountain, Central and Energy Services, which are based on our method of internal reporting and management of the business. Four of our reportable segments are aligned by key geographic areas due to the production of construction materials and related contracting services and one is based on product line.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese rules and regulations may also require us to report a cybersecurity incident before we have been able to fully assess the impact or remediate the underlying issue. Efforts to comply with such reporting requirements could divert management’s attention from our incident response and could potentially reveal system vulnerabilities to threat actors.
Biggest changeWe cannot predict or estimate the amount of costs we will incur in order to comply with these rules or the timing of such costs. These rules and regulations may also require us to report a cybersecurity incident before we have been able to fully assess the impact or remediate the underlying issue.
We are exposed to risk of loss resulting from the nonpayment and/or nonperformance of our customers and counterparties. Our customers include public and private entities that have been, and may continue to be, negatively impacted by the economy.
We are exposed to risk of loss resulting from the nonpayment and/or nonperformance by our customers and counterparties. Our customers include public and private entities that have been, and may continue to be, negatively impacted by the economy.
We use a combination of insurance and self-insurance to provide for potential liabilities for workers’ compensation, general liability, vehicle accident, property and medical benefit claims. Historical claims experience, demographic and severity factors and other actuarial assumptions are subject to a high degree of variability and are used to estimate the liabilities associated with the risks retained by us.
We use a combination of insurance and self-insurance to provide for potential liabilities for workers’ compensation, general liability, vehicle accident, property and associated medical benefit claims. Historical claims experience, demographic and severity factors and other actuarial assumptions are subject to a high degree of variability and are used to estimate the liabilities associated with the risks retained by us.
Artificial intelligence presents risks and challenges that can impact our business by posing security risks to our confidential information, proprietary information and personal data. Issues in the development and use of artificial intelligence, combined with an uncertain regulatory environment, may result in reputational harm, liability or other adverse consequences to our business operations.
Artificial intelligence presents risks and challenges that can negatively impact our business by posing security risks to our confidential information, proprietary information and personal data. Issues in the development and use of artificial intelligence, combined with an uncertain regulatory environment, may result in reputational harm, liability or other adverse consequences to our business operations.
Nonpayment and/or nonperformance by our customers and counterparties could have a negative impact on our results of operations and cash flows. Our success depends, in part, on our ability to execute on our acquisition strategy, to successfully integrate acquired businesses and to retain key employees of acquired businesses.
Nonpayment and/or nonperformance by our customers and counterparties could have a negative impact on our results of operations and cash flows. Our success depends, in part, on the ability to execute on our acquisition strategy, to successfully integrate acquired businesses and to retain key employees of acquired businesses.
We could also incur additional withdrawal liability if our withdrawal from a plan is determined by that plan to be part of a mass withdrawal. We have substantial indebtedness and may incur substantial additional indebtedness, which could adversely affect our business, profitability and our ability to meet obligations.
We could also incur additional withdrawal liability if our withdrawal from a plan is determined by that plan to be part of a mass withdrawal. We have substantial indebtedness and may incur substantial additional indebtedness, which could adversely affect our business, profitability and its ability to meet obligations.
Prices are generally subject to change in response to fluctuations in supply and demand and other general economic and market conditions beyond our control. The global political environment is a primary driver in price changes to commodities and inputs out of our control.
Prices are generally subject to change in response to fluctuations in supply and demand and other general economic and market conditions beyond our control. The global political environment is out of our control and a primary driver in price changes to commodities.
This amount of debt could potentially have important consequences to us and our investors, including: • Requiring a substantial portion of our cash flow from operations to make interest payments on this debt. • Making it more difficult to satisfy debt service and other obligations. • Increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing. • Increasing our vulnerability to general adverse economic and industry conditions. • Reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our business. • Limiting our flexibility in planning for, or reacting to, changes in our business and the industry. • Placing us at a competitive disadvantage relative to our competitors that may not be as highly leveraged with debt. • And limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase ordinary shares.
This amount of debt could potentially have important consequences to us and our investors, including: • Requiring a substantial portion of our cash flow from operations to make interest payments on this debt. 22 Index • Making it more difficult to satisfy debt and other obligations. • Increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing. • Increasing our vulnerability to general adverse economic and industry conditions. • Reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our business. • Limiting our flexibility in planning for, or reacting to, changes in our business and the industry. • Placing us at a competitive disadvantage relative to our competitors that may not be as highly leveraged with debt. • Limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase ordinary shares.
A number of factors may increase our future effective income tax rate, including: governmental authorities increasing taxes or eliminating deductions, particularly the depletion deduction the mix of earnings from depletable versus non-depletable businesses, the jurisdictions in which earnings and/or revenues are taxed, the resolution of issues arising from tax audits with various tax authorities, changes in the valuation of our deferred tax assets and liabilities, adjustments to estimated taxes upon finalization of various tax returns, changes in available tax credits, changes in 21 Index stock-based compensation, other changes in tax laws and the interpretation of tax laws and/or administrative practices.
A number of factors may increase our future effective income tax rate, including: governmental authorities increasing taxes or eliminating deductions, particularly the depletion deduction, the mix of earnings from depletable versus non-depletable businesses, the jurisdictions in which earnings and/or revenues are taxed, the resolution of issues arising from tax audits with various tax authorities, changes in the valuation of our deferred tax assets and liabilities, adjustments to estimated taxes upon finalization of various tax returns, changes in available tax credits, changes in stock-based compensation, other changes in tax laws and the interpretation of tax laws and/or administrative practices.
The loss of key personnel, coupled with an inability to adequately train other personnel, hire new personnel or transfer knowledge and skills, could significantly impact our ability to perform under our contracts and execute on new or growing training programs.
The loss of key personnel, coupled with an inability to adequately train other personnel, hire new personnel or transfer knowledge and skills, could significantly impact our ability to perform under our contracts and execute on new or growing programs.
Other factors associated with a pandemic that could impact our businesses and future operating results, revenues and liquidity include impacts related to the health, safety, and availability of employees and contractors; extended rise in unemployment; public and private-sector budget changes and constraints; counterparty credit; costs and availability of supplies; capital construction and infrastructure operation and maintenance programs; financing plans; pension valuations; travel restrictions; and legal matters.
Other factors associated with a pandemic that could impact our businesses and future operating results, revenues and liquidity include impacts related to the health, safety, and availability of employees and contractors; extended rise in unemployment; public and private-sector budget changes and constraints; counterparty credit; costs and 15 Index availability of supplies; capital construction and infrastructure operation and maintenance programs; financing plans; pension valuations; travel restrictions; and legal matters.
Any material disruption at our facilities or those of our customers or suppliers or otherwise within our supply chain, whether as a result of downtime, work stoppages or facility damage, could prevent us from meeting customer demands or expected 17 Index timelines, require us to incur unplanned capital expenditures, or cause other material disruptions to our operations, any of which could have a material adverse effect on our operations, financial position and cash flows.
Any material disruption at our facilities or those of our customers or suppliers or otherwise within our supply chain, whether as a result of downtime, work stoppages or facility damage, could prevent us from meeting customer demands or expected timelines, require us to incur unplanned capital expenditures, or cause other material disruptions to our operations, any of which could have a material adverse effect on our operations, financial position and cash flows.
Our results are also affected by the number of competitors in a market, the production capacity that a particular market can accommodate, the pricing practices of other competitors and the entry of new competitors in a market.
Our results are also affected by the number of competitors in a market, the production capacity that a particular market can accommodate, the pricing practices of competitors and the entry of new competitors in a market.
While our insurance policies include liability coverage for certain of these matters, if we experience a significant security incident, we could be subject to liability or other damages that exceed our insurance coverage and we cannot be certain that such insurance policies will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.
While our insurance policies include liability coverage for certain of these matters, if we experience a significant security incident, we could be subject to liability or other damages that exceed our insurance coverage 14 Index and we cannot be certain that such insurance policies will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim.
Furthermore, new acquisition opportunities may be subject to competitive bidding environments, which may increase the prices we pay to successfully grow our business through acquisitions. We may not be able to secure, permit or economically mine strategically located aggregate reserves. We must obtain governmental, environmental, mining, and/or other permits at many of our facilities.
Furthermore, new acquisition opportunities are and may continue to be subject to competitive bidding environments, which may increase the prices we must pay to successfully grow our business through acquisitions. We may not be able to secure, permit or economically mine strategically located aggregate reserves. We must obtain governmental, environmental, mining, and/or other permits at many of our facilities.
Backlog may also be affected by project delays or cancellations resulting from weather conditions, external market factors and economic 22 Index factors beyond our control, among other things. Accordingly, there is no assurance that backlog will be realized. The timing of contract awards and duration of large new contracts can significantly affect backlog.
Backlog may also be affected by project delays or cancellations resulting from weather conditions, external market factors and economic factors beyond our control, among other things. Accordingly, there is no assurance that backlog will be realized. The timing of contract awards and duration of large new contracts can significantly affect backlog.
High energy prices, specifically for diesel fuel, natural gas and liquid asphalt, have impacted and could affect the margins realized, as well as demand for construction materials and related contracting services. Increased labor costs, due to labor shortages, competition from other industries, or other factors, could also negatively affect our results of operations.
High energy prices, specifically for diesel fuel, natural gas and liquid asphalt, have impacted and could affect future margins realized, as well as demand for construction materials and related contracting services. Increased labor costs, due to labor shortages, competition from other industries, or other factors, could also negatively affect our results of operations.
Potential risks associated with acquisitions, including the pending Acquisition, could include, among other things: our ability to identify attractive acquisitions; our ability to offer potential acquisition targets competitive transaction terms; our ability to raise additional equity and/or incur additional indebtedness, which could increase our leverage; regulatory approval; and reputational or other damage due to the prior conduct of an acquired company.
Potential risks associated with acquisitions could include, among other things: our ability to identify attractive acquisitions; our ability to offer potential acquisition targets competitive transaction terms; our ability to raise additional equity and/or incur additional indebtedness, which could increase our leverage; regulatory approval; and reputational or other damage due to the prior conduct of an acquired company.
Any delays or work stoppages could adversely affect the ability to perform under contracts, which could negatively impact our results of operations, cash flows and financial condition. Increasing costs associated with health care plans may adversely affect our results of operations. We are primarily self-insured for the health care benefits for eligible employees.
Any delays or work stoppages could 20 Index adversely affect the ability to perform under contracts, which could negatively impact our results of operations, cash flows and financial condition. Increasing costs associated with health care plans may adversely affect our results of operations. We are primarily self-insured for the health care benefits for eligible employees.
Our results of operations from potential acquisitions could, in the future, result in impairment charges for any of the intangible assets, including goodwill, or other long‑lived assets, particularly if economic conditions worsen unexpectedly. As a result of these changes, our financial condition, results of operations and liquidity could be materially adversely affected.
Our results of operations from potential acquisitions could, in the future, result in impairment charges for any of the intangible assets, including goodwill, or other long‑lived assets, particularly if economic conditions worsen unexpectedly. As a result of these changes, our financial condition, results of operations and liquidity could be 13 Index materially adversely affected.
At times of low unemployment, it can be difficult for us to attract and retain qualified and affordable personnel. A shortage in the supply of skilled personnel creates competitive hiring markets, increased labor expenses, decreased productivity and potentially lost business opportunities to support our operating and growth strategies.
At times of low unemployment, it can be difficult for us to attract and retain qualified and affordable personnel. A shortage in the supply of skilled personnel creates competitive hiring markets, increased labor expenses, decreased productivity and potentially lost business opportunities to support its operating and growth strategies.
Public concern over climate change has resulted in, and may continue to result in, new or increased regional, federal and global legal and regulatory requirements, including taxation, to reduce or mitigate carbon emissions and to limit or impose additional costs on hydrocarbon and water usage or other climate-related objectives.
Certain public concern over climate change has resulted in, and may continue to result in, new or increased state, regional, federal and global legal and regulatory requirements, including taxation, to reduce or mitigate carbon emissions and to limit or impose additional costs on hydrocarbon and water usage or other climate-related objectives.
Factors affecting the successful integration of an acquired business include, such as the pending Acquisition, but are not limited to, the following: • Responsibility for certain liabilities of an acquired business, whether or not known, which could include, among other things, tax liabilities, product and other tort liabilities, breach of contract claims, environmental liabilities, permitting and regulatory compliance issues and liabilities for employment practices. • Ability to retain local managers, key employees and customers who are important to the operations of the acquired business. • Implementation of financial and management information systems, business practices and policies. 14 Index • Conforming standards, controls, procedures and policies, business cultures and compensation structures among Knife River and the acquired company. • Pursuit of multiple acquisition opportunities simultaneously. • Unforeseen expenses, complications and delays, including difficulties in employing sufficient staff and maintaining operational and management oversight.
Factors affecting the successful integration of an acquired business include but are not limited to, the following: • Responsibility for certain liabilities of an acquired business, whether or not known, which could include, among other things, tax liabilities, product and other tort liabilities, breach of contract claims, environmental liabilities, permitting and regulatory compliance issues and liabilities for employment practices. • Ability to retain local managers, key employees and customers who are important to the operations of the acquired business. • Implementation of financial and management information systems, business practices and policies. • Conforming standards, controls, procedures and policies, business cultures and compensation structures among Knife River and the acquired company. • Pursuit of multiple acquisition opportunities simultaneously. • Unforeseen expenses, complications and delays, including difficulties in employing sufficient staff and maintaining operational and management oversight.
The inability to successfully integrate new businesses in a timely and orderly manner could increase costs and result in dis-synergies and negatively impact our results of operations and prevent us from realizing expected rates of return on the acquired business.
The inability to successfully integrate new businesses in a timely and orderly manner could increase costs and result in dis-synergies and negatively impact our results of operations and prevent realizing expected rates of return on the acquired business.
In the event that we have concentrated credit risk from customers in a specific geographic area or industry, negative trends or a worsening in financial conditions in that specific geographic area or industry, we could become more susceptible to disproportionately high levels of default.
In the event that we have concentrated credit risk from customers in a specific geographic area or industry, 12 Index negative trends or a worsening in financial conditions in that specific geographic area or industry, we could become more susceptible to disproportionately high levels of default.
In addition, our amended and restated certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock that have such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock respecting dividends and distributions, as our board of directors generally may determine.
In addition, our second amended and restated certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock that have such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over Knife River common stock respecting dividends and distributions, as our board of directors generally may determine.
We are subject to environmental laws and regulations affecting many aspects of our operations, including air and water quality, wastewater discharge, the generation, transportation and disposal of solid waste and hazardous substances, aggregate permitting and other environmental considerations.
We are subject to environmental laws and regulations affecting many aspects of our operations, including air and water quality, processed water discharge, the generation, transportation and disposal of solid waste and hazardous substances, aggregate permitting and other environmental considerations.
Our vendors may incorporate generative artificial intelligence tools into their offerings without disclosing this use to us, and the providers of these generative artificial intelligence tools may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection and may inhibit us or our vendors’ ability to maintain an adequate level of service and experience.
Our vendors may incorporate generative artificial intelligence tools into their offerings without disclosing this use to us, and the providers of these generative artificial intelligence tools may not meet existing or rapidly evolving regulatory or industry standards with respect to privacy and data protection and may inhibit Knife River or its vendors’ ability to maintain an adequate level of service and experience.
Plans 23 Index classified as being in one of these statuses are required to adopt Rehabilitation Plans or Funding Improvement Plans to improve their funded status through increased contributions, reduced benefits or a combination of the two.
Plans classified as being in one of these statuses are required to adopt Rehabilitation Plans or Funding Improvement Plans to improve their funded status through increased contributions, reduced benefits or a combination of the two.
These provisions include rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings and the right of our board of directors to issue preferred stock without stockholder approval.
These provisions include rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings and the right of the Company’s board of directors to issue preferred stock without stockholder approval.
These changes could impact the assumptions and negatively affect the value of assets held in our pension plans and may increase the amount and accelerate the timing of required funding contributions for those plans. Costs related to obligations under MEPPs could have a material negative effect on our results of operations and cash flows.
These adverse changes have impacted and could further impact the assumptions and negatively affect the value of assets held in our pension plans and may increase the amount and accelerate the timing of required funding contributions for those plans. Costs related to obligations under MEPPs could have a material negative effect on our results of operations and cash flows.
Our credit ratings may also change as a result of the differing methodologies or changes in the methodologies used by the rating agencies. Any future lowering of our debt’s ratings, outlook or watch likely would make it more difficult or more expensive for us to obtain additional debt financing.
Our credit ratings may also change as a result of the differing methodologies or changes in the methodologies used by the rating agencies. Any future lowering of Knife River’s or its debt’s ratings, outlook or watch likely would make it more difficult or more expensive for us to obtain additional debt financing.
If we, our vendors, or our third-party partners experience an actual or perceived breach of privacy or security incident because of the use of generative artificial intelligence, we may lose valuable intellectual property and confidential information and our reputation and the public perception of the effectiveness of our security measures could be harmed.
If Knife River, its vendors, or its third-party partners experience an actual or perceived breach of privacy or security incident because of the use of generative artificial intelligence, we may lose valuable intellectual property and confidential information and our reputation and the public perception of the effectiveness of our security measures could be harmed.
In recent years, we have experienced elevated commodity and supply chain costs including the costs of labor, raw materials, energy-related products and other inputs used in the production and distribution of our products and services.
We have experienced elevated commodity and supply chain costs including the costs of labor, raw materials, energy-related products and other inputs used in the production and distribution of our products and services.
While the Delaware Supreme Court ruled in March 2020 that federal forum selection provisions purporting to require claims under the Securities Act be brought in federal court are “facially valid” under Delaware law, there is uncertainty as to whether other courts will enforce our federal forum provision described above.
While the Delaware Supreme Court ruled in March 2020 that federal forum selection provisions purporting to require claims under the Securities Act be brought in federal court are “facially valid” under Delaware law, there is uncertainty as to whether other courts will enforce Knife River’s federal forum provision described above.
If one or more of the analysts ceases coverage of our common stock or fails to publish reports on us regularly, demand for our common stock could decrease, which could cause our common stock price or trading volume to decline. Stockholder percentage of ownership in us may be diluted in the future.
If one or more of the analysts ceases coverage of Knife River common stock or fails to publish reports on us regularly, demand for Knife River common stock could decrease, which could cause Knife River common stock price or trading volume to decline. Stockholder percentage of ownership in us may be diluted in the future.
There is also risk that we could be perceived as, or accused of, “greenwashing,” i.e., the process of conveying misleading information or making false claims that overstate potential benefits, which could lead to reputational harm.
There is also risk that we could be perceived as, or accused of, “ greenwashing,” i.e. , the process of conveying misleading information or making false claims that overstate potential environmental benefits, which could lead to reputational harm.
For many reasons, including the other risks identified in this section, the market price of our common stock may be more volatile than our market peers. These factors may result in short-term or long-term negative pressure on the value of our common stock. We cannot predict the prices at which our common stock may trade.
For many reasons, including the other risks identified in this section, the market price of Knife River’s common stock may be more volatile than its market peers. These factors may result in short-term or long-term negative pressure on the value of Knife River’s common stock. We cannot predict the prices at which Knife River’s common stock may trade.
The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. Similarly, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of the common stock.
The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of Knife River common stock. Similarly, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of the common stock.
Alternatively, if a court outside of Delaware were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings described above, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations.
Alternatively, if a court outside of Delaware were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings described above, Knife River may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect its business, financial condition or results of operations.
We could also be impacted by drought conditions, which may restrict the availability of water supplies and inhibit the ability to conduct operations. As a result, 13 Index extreme or unusually adverse weather conditions could negatively affect our results of operations, financial position and cash flows.
We could also be impacted by drought conditions, which may restrict the availability of water supplies and inhibit the ability to conduct operations. As a result, extreme or unusually adverse weather conditions have, and could negatively affect our future results of operations, financial position and cash flows.
Further, we may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to refinance our debt. 24 Index Despite our current level of indebtedness, we may be able to incur substantially more debt, which could increase the risks to our financial condition described above.
Further, we may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to refinance our debt. Despite our current level of indebtedness, we may be able to incur substantially more debt, which could increase the risks to our financial condition.
If one or more of the analysts downgrades our stock or publishes misleading or unfavorable research about our business, our stock price could decline.
If one or more of the analysts downgrades Knife River's stock or publishes misleading or unfavorable research about our business, Knife River's stock price could decline.
These and other provisions of our amended and restated certificate of incorporation, amended and restated bylaws and the DGCL could have the effect of delaying, deferring or preventing a proxy contest, tender offer, merger or other change in control, which may have a material adverse effect on our business, financial condition and results of operations.
These and other provisions of the Company’s second amended and restated certificate of incorporation, second amended and restated bylaws and the DGCL could have the effect of delaying, deferring or preventing a proxy contest, tender offer, merger or other change in control, which may have a material adverse effect on its business, financial condition and results of operations.
Additionally, approximately 12 percent of our workforce is comprised of employees that are covered by collective bargaining agreements with various unions. If we encounter difficulties with renegotiations or renewals of collective bargaining arrangements or are unsuccessful in those efforts, we could incur additional costs and experience work stoppages. Union actions at suppliers also can affect us.
Additionally, approximately 11 percent of Knife River’s workforce is comprised of employees that are covered by collective bargaining agreements with various unions. If we encounter difficulties with renegotiations or renewals of collective bargaining arrangements or are unsuccessful in those efforts, we could incur additional costs and experience work stoppages. Union actions at suppliers also can affect us.
The exclusive forum provision does not apply to actions 28 Index arising under the Exchange Act or the rules and regulations thereunder.
The exclusive forum provision does not apply to actions arising under the Exchange Act or the rules and regulations thereunder.
Provisions in our amended and restated certificate of incorporation and amended and restated bylaws and Delaware law may prevent or delay an acquisition of Knife River, which could decrease the trading price of our common stock.
Provisions in the Company’s second amended and restated certificate of incorporation and second amended and restated bylaws and Delaware law may prevent or delay an acquisition of Knife River, which could decrease the trading price of Knife River common stock.
The rating, outlook or watch assigned to us or our debt could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, current or future circumstances relating to the basis of the rating, outlook, or watch such as adverse changes to our business, so warrant.
The rating, outlook or watch assigned to Knife River or its debt could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, current or future circumstances relating to the basis of the rating, outlook, or watch such as adverse changes to our business, so warrant.
Economic and Political Risks Significant changes in prices for commodities, labor, or other production and delivery inputs could negatively affect our businesses. Our operations are exposed to fluctuations in prices for labor, energy-related products, cement, asphalt cement, fuel, raw materials and utilities, among other things.
Significant changes in prices for commodities, labor, or other production and delivery inputs could negatively affect our businesses. Our operations are exposed to fluctuations in prices for labor, energy-related products, cement, liquid asphalt, fuel, raw materials and utilities, among other things.
If government funding is not approved or funding is lowered as a result of poor economic conditions, lower than expected revenues, competing spending priorities, or other factors, it could limit infrastructure projects available, increase competition for projects, result in excess inventory, and decrease sales, all of which could adversely affect the financial condition of our business.
If government funding is not approved or funding is delayed or lowered as a result of poor economic conditions, lower than expected revenues, competing spending priorities, or other factors, it could limit infrastructure projects available, increase competition for projects, result in excess inventory, and decrease sales, all of which has occurred, and may re-occur, and could adversely affect the financial condition of our business.
Revised or new laws and regulations that increase compliance and disclosure costs and/or restrict operations could adversely affect our results of operations and cash flows. 19 Index Our operations could be adversely impacted by severe weather events, including as a result of climate change.
Revised or new laws and regulations that increase compliance and disclosure costs and/or restrict operations could adversely affect our results of operations and cash flows. Our operations could be adversely impacted by sever weather events, including as a result of climate change.
Significant changes to corporate tax rates could result in the impairment of deferred tax assets that are established based on existing law at the time of deferral.
Significant changes to corporate tax rates could result in, among other things, the impairment of deferred tax assets that are established based on existing law at the time of deferral.
Our amended and restated bylaws designates the Court of Chancery of the State of Delaware or, if the Court of Chancery of the State of Delaware does not have jurisdiction, another state court of the State of Delaware, or, if no state court located in the State of Delaware has jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by Knife River’s stockholders, which could discourage lawsuits against us and our directors and officers.
The Company’s second amended and restated bylaws designates the Court of Chancery of the State of Delaware or, if the Court of Chancery of the State of Delaware does not have jurisdiction, another state court of the State of Delaware, or, if no state court located in the State of Delaware has jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by Knife River’s stockholders, which could discourage lawsuits against the Company and its directors and officers.
Although our amended and restated bylaws include the exclusive forum provision described above, it is possible that a court could rule that this provision is inapplicable or unenforceable.
Although the Company’s second amended and restated bylaws include the exclusive forum provision described above, it is possible that a court could rule that this provision is inapplicable or unenforceable.
If a proposed acquisition, including the pending Acquisition, is not completed for any reason, including events beyond our control, the costs incurred up to that point for the transaction likely would not be recoverable. Acquisitions typically require integration of the acquired company’s project management, finance, information technology, risk management, purchasing, human resources and fleet management functions.
If a proposed acquisition is not completed for any reason, including events beyond our control which have occurred and may reoccur, the costs incurred up to that point for the transaction likely would not be recoverable. Acquisitions typically require integration of the acquired company’s project management, finance, information technology, risk management, purchasing, human resources and fleet management functions.
The degree to which a pandemic will impact us depends on future developments, including the resurgence of COVID-19 and its variants, federal and state mandates, actions taken by governmental authorities, effectiveness of vaccines being administered, and the pace and extent to which the economy recovers and remains under relatively normal operating conditions.
The degree to which a pandemic will impact us depends on future developments, including federal and state mandates, actions taken by governmental authorities, effectiveness of vaccines being administered, and the pace and extent to which the economy recovers and remains under relatively normal operating conditions.
Third-party service providers that perform critical business functions for us or have access to sensitive information within Knife River also may be vulnerable to security breaches and information technology risks that could adversely affect us.
Third-party service providers that perform critical business functions for us or have access to sensitive information within our company also may be vulnerable to security breaches and information technology risks that could adversely affect us.
In addition, our amended and restated bylaws further provide that, unless the board of directors otherwise determines, the federal district courts of the United States of America shall be the sole and exclusive forum for any action asserting a claim arising under the Securities Act.
In addition, the Company’s second amended and restated bylaws further provide that, unless the board of directors otherwise determines, the federal district courts of the United States of America shall be the sole and 24 Index exclusive forum for any action asserting a claim arising under the Securities Act.
We have, and may, litigate to protect our intellectual property from misappropriation or infringement by others, which could be expensive and cause a diversion of resources and ultimately may not be successful. Moreover, competitors or other third parties may allege that we, or consultants or other third parties retained or indemnified by us, infringe on their intellectual property rights.
We have, and may, litigate to protect our intellectual property from misappropriation or infringement by others, which could be expensive and cause a diversion of resources and ultimately may not be successful. Moreover, competitors or other third parties may allege that Knife River, or consultants or other third parties retained or indemnified by it, infringe on its intellectual property rights.
Our amended and restated bylaws provides that, unless the board of directors otherwise determines, the Court of Chancery of the State of Delaware or, if the Court of Chancery of the State of Delaware does not have jurisdiction, another state court of the State of Delaware, or, if no state court located in the State of Delaware has jurisdiction, the federal court for the District of Delaware, will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of our company, any action asserting a claim of breach of a fiduciary duty owed by any director or officer to our company or our stockholders, creditors or other constituents, any action asserting a claim against us or any director or officer arising pursuant to any provision of the DGCL or our amended and restated certificate of incorporation or amended and restated bylaws, or any action asserting a claim against us or any director or officer governed by the internal affairs doctrine.
The Company’s second amended and restated bylaws provide that, unless the board of directors otherwise determines, the Court of Chancery of the State of Delaware or, if the Court of Chancery of the State of Delaware does not have jurisdiction, another state court of the State of Delaware, or, if no state court located in the State of Delaware has jurisdiction, the federal court for the District of Delaware, will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of Knife River, any action asserting a claim of breach of a fiduciary duty owed by any director or officer to Knife River or its stockholders, creditors or other constituents, any action asserting a claim against Knife River or any director or officer arising pursuant to any provision of the DGCL or the Company’s second amended and restated certificate of incorporation or second amended and restated bylaws, or any action asserting a claim against Knife River or any director or officer governed by the internal affairs doctrine.
Accordingly, in the event that our board of directors determines that a potential business combination transaction is not in the best interests of our company and our stockholders but certain stockholders believe that such a transaction would be beneficial to our company and our stockholders, such stockholders may elect to sell their shares in our company and the trading price of our common stock could decrease.
Accordingly, in the event that the Company’s board of directors determines that a potential business combination transaction is not in the best interests of Knife River and its stockholders but certain stockholders believe that such a transaction would be beneficial to Knife River and its stockholders, such stockholders may elect to sell their shares in Knife River and the trading price of Knife River common stock could decrease.
A lowering or withdrawal of the ratings, outlook or watch assigned to us or our debt by rating agencies may increase our future borrowing costs and reduce our access to capital.
A lowering or withdrawal of the ratings, outlook or watch assigned to Knife River or its debt by rating agencies may increase our future borrowing costs and reduce our access to capital.
If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business, our stock price and trading volume could decline. The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business.
If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business, Knife River’s stock price and trading volume could decline. The trading market for Knife River common stock depends in part on the research and reports that securities or industry analysts publish about Knife River or its business.
Shareholder Risks The trading market for our common stock has existed only a short period, and the market price and trading volume of our common stock may fluctuate significantly. The trading price of our common stock has been and may continue to be volatile and the trading volume may fluctuate and cause significant price variations to occur.
Shareholder Risks The trading market for Knife River common stock has existed only a relatively short period, and the market price and trading volume of its common stock may fluctuate significantly. The trading price of Knife River common stock has been and may continue to be volatile and the trading volume may fluctuate and cause significant price variations to occur.
Our stockholders will not be deemed to have waived compliance with the federal securities laws and the rules and regulations thereunder.
Knife River’s stockholders will not be deemed to have waived compliance with the federal securities laws and the rules and regulations thereunder.
Pandemics have disrupted national, state and local economies. To the extent a pandemic adversely impacts our businesses, operations, revenues, liquidity or cash flows, it could also have a heightened effect on other risks described in this section.
Pandemics may have a negative impact on our business operations, revenues, results of operations, liquidity and cash flows. Pandemics have disrupted national, state and local economies. To the extent a pandemic adversely impacts our businesses, operations, revenues, liquidity or cash flows, it could also have a heightened effect on other risks described in this section.
Our amended and restated certificate of incorporation and amended and restated bylaws, and Delaware law, contain provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids more expensive to the acquiror and to encourage prospective acquirors to negotiate with our board of directors rather than to attempt a hostile takeover.
The Company’s second amended and restated certificate of incorporation and second amended and restated bylaws, and Delaware law, contain provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids more expensive to the acquirer and to encourage prospective acquirers to negotiate with the Company’s board of directors rather than to attempt a hostile takeover.
Our business is based in large part on government-funded infrastructure projects and building activities, and any reductions or reallocation of spending or related subsidies in these areas could have an adverse effect on us. Certain of our businesses depend on government spending for infrastructure and other similar building activities.
Our business is based in large part on government-funded infrastructure projects and building activities, and any reductions or reallocation of spending or related subsidies in these areas could adversely impact us. Certain of our businesses depend on government spending for infrastructure and other similar building activities.
Our business is seasonal and subject to weather conditions that could adversely affect our operations. A majority of our business is seasonal, with results of operations affected by weather conditions. Construction materials production and related contracting services typically follow the activity in the construction industry, with heavier contracting services workloads in the spring, summer and fall.
A majority of our business is seasonal, with results of operations affected by weather conditions. Construction materials production and related contracting services typically follow the activity in the construction industry, with heavier contracting services workloads in the spring, summer and fall.
System disruptions, if not anticipated and appropriately mitigated, could adversely affect us. 15 Index The SEC has adopted rules that require us to provide greater disclosures around cybersecurity risk management, strategy and governance, as well as to disclose the occurrence of material cybersecurity incidents.
System disruptions, if not anticipated and appropriately mitigated, could adversely affect us. SEC rules require us to provide disclosures around cybersecurity risk management, strategy and governance, as well as to disclose the occurrence of material cybersecurity incidents.
However, these provisions apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our board of directors determines is not in the best interests of our company and our stockholders.
However, these provisions apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that the Company’s board of directors determines is not in the best interests of Knife River and its stockholders.
This exclusive forum provision may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors or officers, which may discourage such lawsuits against us and our directors and officers, and such provision may also make it more expensive for our stockholders to bring such claims.
This exclusive forum provision may limit the ability of Knife River’s stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with Knife River or its directors or officers, which may discourage such lawsuits against the Company and its directors and officers, and such provision may also make it more expensive for Knife River’s stockholders to bring such claims.
Investors (including institutional investors), activists, proxy advisory firms, customers, employees and lenders, may also require us to implement sustainability and/or human capital responsibility procedures or standards before they continue to do business with us.
Investors (including certain institutional investors), proxy advisory firms, customers, employees and lenders, may also require us to implement sustainability procedures or standards before they continue to do business with us.
Delaware law also imposes some restrictions on mergers and other business combinations between any holder of 15 percent or more of our outstanding common stock and our company.
Delaware law also imposes some restrictions on mergers and other business combinations between any holder of 15 percent or more of Knife River’s outstanding common stock and Knife River.
Due to the uncertain availability of technologies to control GHG emissions and the unknown obligations that potential GHG emission legislation or regulations may create, we cannot determine the potential financial impact on our operations.
We monitor, analyze and report GHG emissions from our operations. We will continue to monitor GHG regulations and their potential impact on operations. Due to the uncertain availability of technologies to control GHG emissions and the unknown obligations that potential GHG emission legislation or regulations may create, we cannot determine the potential financial impact on our operations.
Although certain of the agreements governing our existing indebtedness contain restrictions on the incurrence of additional indebtedness and entering into certain types of other transactions, these restrictions are subject to a number of qualifications and exceptions, including compliance with various financial conditions. Additional indebtedness incurred in compliance with our existing debt instruments could be substantial.
We may be able to incur substantial additional indebtedness in the future. Although certain of the agreements governing our existing indebtedness contain restrictions on the incurrence of additional indebtedness and entering into certain types of other transactions, these restrictions are subject to a number of qualifications and exceptions, including compliance with various financial conditions.
There has been an increased focus from stakeholders and regulators related to these matters across all industries in recent years, with investors (including institutional investors), activists, proxy advisory firms, customers, employees and lenders, placing increasing importance on the impacts and social cost associated with climate change as well as these types of practices and policies of companies, including sustainability performance and risk mitigation efforts.
There is focus from certain stakeholders and regulators related to sustainability across all industries in recent years, with investors (including institutional investors), proxy advisory firms, customers, employees and lenders, placing varying importance on the impacts and social cost associated with climate change as well as sustainability practices and policies of companies, including sustainability performance and risk mitigation efforts.
There can be no assurances that governments will sustain or increase current infrastructure spending and tax incentive and other subsidy levels, and any reductions thereto or delays therein could affect our business, liquidity and financial condition, and results of operations. Economic volatility affects our operations, as well as the demand for our products and services.
There can be no assurances that governments will sustain or increase current infrastructure spending or allocate funding to projects in our markets, and any reductions thereto or delays therein could affect our business, liquidity and financial condition, and results of operations. Economic volatility affects our operations, as well as the demand for our products and services.
Our current geographic and asset footprint is the result of a deliberate acquisition growth strategy, which began in 1992 following our first aggregate company acquisition. Since then, we have acquired and integrated 90 complementary businesses, which have contributed significantly to our growth.
Our current geographic and asset footprint is the result of a deliberate acquisition growth strategy, which began in 1992 following our first aggregate company acquisition. Since then, we have acquired and integrated over 90 complementary businesses, which have contributed significantly to our growth. Management continues to evaluate and pursue strategic acquisition opportunities as part of our ongoing growth strategy.
If we are unable to satisfy the increasing climate-related expectations of certain stakeholders, we may suffer reputational harm, which may cause our stock price to decrease or difficulty in accessing the capital or insurance markets.
Although we have not experienced difficulties in these areas, if unable to satisfy the climate-related expectations of certain stakeholders, we may suffer reputational harm, which may cause our stock price to decrease or difficulty in accessing the capital or insurance markets.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe CyROC is chaired by our supervisor of cybersecurity and is comprised of members from financial and operations management, as well as technology leaders.
Biggest changeCyROC is comprised of members from financial and operations management, technology leaders, and cybersecurity professionals and is chaired by the IT director of core technologies. The CyROC receives updates on current cyber threats that could impact our electronic information, business systems, or operation technology systems. Input from CyROC on these threats assists in the development of cybersecurity strategies and policies.
Periodic external reviews, including penetration tests and security framework assessments, are conducted by auditors, external assessors, and/or consultants to assess and ensure compliance with our information security programs and practices. Internal and external auditors assess our information technology general controls on an annual basis. Oversee Third-party Risk.
Periodic external reviews, including penetration tests and security framework assessments, are conducted by auditors, external assessors, and/or consultants to assess and work to ensure compliance with our information security programs and practices. Internal and external auditors assess our information technology general controls on an annual basis. Oversee Third-party Risk .
In its risk oversight role, the board of directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate for identifying, assessing, and managing risk. The audit committee of the board of directors of our company is responsible for oversight of risks from cybersecurity threats. Management's Role Managing Risk.
In its risk oversight role, the board of directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate for identifying, assessing, and managing risk. The audit committee of the board of directors of our company is responsible for oversight of risks from cybersecurity threats.
We monitor risks associated with our vendors, which include processes such as completing due diligence on third party service providers before engaging with them for their services; assessing the third party’s cybersecurity posture by reviewing audit reports of the third party, completing cyber questionnaires, and reviewing applicable certification; including cybersecurity contractual language in contracts to limit risk; and monitoring and reassessing third party’s to ensure ongoing compliance with their cybersecurity obligations.
We monitor risks associated with our vendors, which include processes such as completing due diligence on third-party service providers before engaging with them for their services; assessing the third-party’s cybersecurity posture by reviewing audit reports of the third-party, completing cyber questionnaires, and reviewing applicable certification; including cybersecurity contractual language in certain contracts to limit risk; and monitoring and reassessing third-parties to ensure ongoing compliance with their cybersecurity obligations.
There are processes around access management, data security, encryption, asset management, secure system development, security operations, network and device security to provide safeguards from a cybersecurity incident along with continual monitoring of various threat intelligence feeds. 32 Index Cyber Risk Management Personnel.
There are processes around access management, data security, encryption, asset management, secure system development, security operations, network and device security to provide safeguards from a cybersecurity incident along with continual monitoring of various threat intelligence feeds. Cyber Risk Management Personnel .
Although risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition, such incidents could have a material adverse effect in the future as cyberattacks continue to increase in frequency and sophistication. 31 Index Employee Cybersecurity Training.
Although risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have not materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition, such incidents could have a material adverse effect in the future as cyberattacks continue to increase in frequency and sophistication. Employee Cybersecurity Training .
We also partner with a third-party cybersecurity firm that assists us and many other clients in setting direction, implementing cybersecurity technology and supporting our security operations center.
We also partner with a third-party cybersecurity firm that assists us in setting direction, implementing cybersecurity technology and supporting our security operations center.
ITEM 1C. CYBERSECURITY Risk Management and Strategy Overall Risk Management. We have implemented a cyber risk management program to help ensure that our electronic information and information systems are protected from various threats and are built on and follow the Cybersecurity Maturity Model Certification for information security requirements and the protection of sensitive information.
ITEM 1C. CYBERSECURITY Risk Management and Strategy Overall Risk Management and Strategy. Our cyber risk management program helps ensure that our electronic information and information systems are protected from various threats and are built on and follow the Cybersecurity Maturity Model Certification for information security requirements and the protection of sensitive information.
Our vice president of support services, along with the supervisor of cybersecurity, a designated security team of professionals and third-party cybersecurity experts are responsible for monitoring, assessing and managing risks as well as developing and implementing policies, procedures, and practices based on the range of threats we face.
Our chief excellence officer, along with IT leadership, the supervisor of cybersecurity, a designated security team of professionals, and third-party cybersecurity experts are responsible for monitoring, assessing and managing risks as well as developing and implementing policies, procedures, and practices based on the range of threats we face.
The information technology department, including the cybersecurity team, reports to the vice president of support services, who has 18 years of information technology leadership and operational leadership experience with Knife River and over 30 years of total information technology experience. The vice president of support services reports to the chief executive officer. Cyber Risk Oversight Committee.
The information technology department, including the cybersecurity team, reports to the chief excellence officer, who has almost 20 years of information technology leadership and operational leadership experience with Knife River and over 30 years of total information technology experience. The chief excellence officer reports to the chief executive officer. Cyber Risk Oversight Committee .
The incident response plan indicates the vice president of support services, executive leadership which includes the chief executive officer, chief financial officer, chief accounting officer, chief legal officer, corporate controller and the board of directors are to be notified of any material cybersecurity incidents through a defined escalation process.
The incident response plan indicates that the chief excellence officer, chief executive officer, chief financial officer, chief accounting officer, chief legal officer, corporate controller and the board of directors are to be notified of any material cybersecurity 26 Index incidents through a defined escalation process.
Our internal information technology department is led by two directors, one with 25 years of experience in information technology leadership roles at Knife River and the other with 15 years of experience in information technology roles at MDU Resources and Knife River combined.
Our internal information technology department is led by four directors, one with over 25 years of experience in information technology leadership roles at Knife River, one with almost 20 years of experience in information technology roles at Knife River and at a company acquired by Knife River, one with over 15 years of experience in information technology roles at MDU Resources and Knife River combined, and one with over 20 years experience in information technology.
The defined escalation process is a risk-based process that specifies who is to be contacted and when at each risk level. Monitor, Manage, and Safeguard Against Cybersecurity Incidents and Risks.
The defined escalation process is a risk-based process that specifies who is to be contacted and when at each risk level. Management’s Overview of Risk Management .
The incident response plan is updated based on results of the test or as new cyber related developments occur.
We have an incident response plan to identify, protect, detect, respond to, and recover from cybersecurity threats and incidents that is tested on an annual basis. The incident response plan is updated based on results of the test or as new cyber-related developments occur.
This cybersecurity team includes internal cybersecurity experts that have a combined 28 years of general information technology experience and 18 years of cyber specific related experience. The internal cyber team members have obtained various degrees and certificates in network administration, security administration and information system management.
This dedicated cybersecurity team includes internal cybersecurity experts that have a combined 30 plus years of general information technology experience and 20 plus years of cyber specific related experience. Our cybersecurity team collectively maintains industry‑recognized training and credentials across security, networking, and information systems.
The vice president of support services plays a large role in informing the audit committee on cybersecurity risks. The audit committee receives presentations and reports from the vice president of support services on cybersecurity related issues which include information security, technology risks and risk mitigation programs regularly at the quarterly board meetings.
The chief excellence officer provides updates to the audit committee on cybersecurity related issues, which include information security, technology risks and risk mitigation programs regularly at the quarterly board meetings. In addition to scheduled meetings, the chief excellence officer and audit committee maintain an ongoing dialogue regarding emerging or potential cybersecurity risks. Cybersecurity Incident Response .
The cyber risk management program is maintained as part of our overall governance, enterprise risk management program and compliance program. Our information systems experience ongoing and often sophisticated cyberattacks by a variety of sources with the apparent aim to breach our cyber-defenses. We also have cyber event related insurance.
The cyber risk management program is maintained as part of our overall governance, enterprise risk management program and compliance program. We continually assess risks from cybersecurity threats and adapt and enhance our controls accordingly. We regularly evaluate and modernize systems and network infrastructure to address evolving threats. In addition, we also have cyber event related insurance. Risks from Cybersecurity Threats.
Removed
We are continuously reevaluating the need to upgrade and/or replace systems and network infrastructure. These upgrades and/or replacements could adversely impact operations by imposing increased expenses, creating delays or outages, or experiencing difficulties transitioning to new systems. System disruptions, if not anticipated and appropriately mitigated, could adversely affect our company.
Added
Our information systems are subject to ongoing and increasingly sophisticated cyberattacks intended to compromise our networks and data.
Removed
We continually assess risks from cybersecurity threats and adapt and enhance our controls accordingly. Risks from Cybersecurity Threats.
Removed
In addition to scheduled meetings, the vice president of support services and audit committee maintain an ongoing dialogue regarding emerging or potential cybersecurity risks. Cybersecurity Incident Response. We have an incident response plan to identify, protect, detect, respond to, and recover from cybersecurity threats and incidents that is also tested on an annual basis.
Removed
Additionally, we established CyROC to provide executive management and the audit committee with analyses, appraisals, recommendations, and pertinent information concerning cyber defense of our electronic information, information technology and operation technology systems. The CyROC is responsible for guiding our comprehensive cybersecurity policies.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAnnual reviews of mining reserves are conducted by the qualified individual and include procedures such as ensuring financial assumptions related to life of mine expenses are based on the most accurate estimates available. 34 Index We have reviewed our properties and have determined we do not have any individual sites that are material.
Biggest changeAdditionally, management assesses the risks associated in obtaining and maintaining the various land use, mining and environmental permits necessary for the properties to operate as mines. Annual reviews of mining reserves are conducted by the qualified individual and include procedures such as ensuring financial assumptions related to life of mine expenses are based on the most accurate estimates available.
The average selling price includes freight and delivery and other revenues. 2 The aggregates mined are of suitable grade and quality to be used as construction materials and no further grade or quality disclosure is applicable. The following table sets forth details applicable to our aggregate resources as of December 31, 2024.
The average selling price includes freight and delivery and other revenues. 2 The aggregates mined are of suitable grade and quality to be used as construction materials and no further grade or quality disclosure is applicable. The following table sets forth details applicable to our aggregate resources as of December 31, 2025.
The average time necessary to produce remaining aggregate reserves from our leased sites is approximately 45 years. Some sites have leases that expire prior to the exhaustion of the estimated reserves. The estimated reserve life assumes, based on our experience, that leases will be renewed to allow sufficient time to fully recover these reserves.
The average time necessary to produce remaining aggregate reserves from our leased sites is approximately 52 years. Some sites have leases that expire prior to the exhaustion of the estimated reserves. The estimated reserve life assumes, based on our experience, that leases will be renewed to allow sufficient time to fully recover these reserves.
The results are reviewed by the qualified person and presented to the management team. Management assesses the risks associated with aggregate reserve and resource estimates. These estimates may be affected by variability in the properties of the material, limits of the accuracy of the geotechnical data and operational difficulties in extraction of the computed material.
The results are reviewed by the qualified person and presented to the management team. 28 Index Management assesses the risks associated with aggregate reserve and resource estimates. These estimates may be affected by variability in the properties of the material, limits of the accuracy of the geotechnical data and operational difficulties in extraction of the computed material.
Mineral reserves are defined as an estimate of tonnage that, in the opinion of the qualified person, can be economically mined or extracted, which includes diluting materials and allowances for losses that may occur throughout the process.
Mineral reserves are defined as an estimate of tonnage that, in the opinion of the qualified person, can be economically mined or extracted, which includes diluting 27 Index materials and allowances for losses that may occur throughout the process.
We estimate the useful life of our owned reserves are approximately 36 years based on the most recent three-year production average. Approximately 36 percent of the reserves under lease have lease expiration dates of more than 20 years and the weighted average years remaining on all leases containing estimated proven aggregate reserves is approximately 16 years.
We estimate the useful life of our owned reserves are approximately 43 years based on the most recent three-year production average. Approximately 28 percent of the reserves under lease have lease expiration dates of more than 20 years and the weighted average years remaining on all leases containing estimated proven aggregate reserves is approximately 15 years.
Our reserves are comprised of 630 million tons on properties that are owned and 532 million tons that are leased. The remaining reserve life in years was calculated by dividing remaining reserves by the three-year average production from 2022 through 2024.
Our reserves are comprised of 741 million tons on properties that are owned and 563 million tons that are leased. The remaining reserve life in years was calculated by dividing remaining reserves by the three-year average production from 2023 through 2025.
We believe the current sales price is reasonable and justifiable to estimate the aggregates’ current fair value, while the Consolidated Balance Sheets reflect the historical costs. 36 Index We conduct our mining operations across 116 owned properties, of which 113 are active sites, and another 70 leased properties, of which 69 are active sites.
We believe the current sales price is reasonable and justifiable to estimate the aggregates’ current fair value, while the Consolidated Balance Sheets reflect the historical costs. We conduct our mining operations across 135 owned properties, of which 132 are active sites, and another 78 leased properties, of which 76 are active sites.
Of our 182 active properties, 144 are in a production stage and 38 are in a development stage. As of December 31, 2024, 1.04 billion tons of estimated proven and probable reserves are located on production stage properties and 119 million tons on developmental stage properties. We classify aggregates located on exploration stage properties as resources.
Of our 208 active properties, 181 are in a production stage and 27 are in a development stage. As of December 31, 2025, 1.20 billion tons of estimated proven and probable reserves are located on production stage properties and 104 million tons on developmental stage properties. We classify aggregates located on exploration stage properties as resources.
The grade and quality of those reserves are computed from the results of detailed sampling, and the sampling and measurement data are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well established. 33 Index Probable — those reserves for which quantity, grade and quality are computed partly from specific measurements and partly from projections based on reasonable geologic evidence.
The grade and quality of those reserves are computed from the results of detailed sampling, and the sampling and measurement data are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well established.
The average selling price per ton for crushed stone and sand and gravel was $19.59 and $12.80, respectively, in 2024. Actual pricing varies by location and market. The price for each commodity was calculated by dividing 2024 revenues by tons sold. The average pricing is based on salable product, or materials that are ready for sale.
Actual pricing varies by location and market. The price for each commodity was calculated by dividing 2025 revenues by tons sold. The average pricing is based on salable product, or materials that are ready for sale.
The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation. Reported proven and probable reserves include only quantities that are owned in fee or under lease and for which all appropriate zoning and permitting have been obtained or are expected to be obtained through permit, contract or grandfathered status.
Reported proven and probable reserves include only quantities that are owned in fee or under lease and for which all appropriate zoning and permitting have been obtained or are expected to be obtained through permit, contract or legacy status.
The following tables set forth details applicable to our aggregate production and aggregate sites as of December 31, 2024, by the various regions where the sites are located.
We have reviewed our properties and have determined we do not have any individual sites that are material. The following tables set forth details applicable to our aggregate production and aggregate sites as of December 31, 2025, by the various regions where the sites are located.
Our operations include the following properties: Pacific Northwest Mountain Central Energy Services Consolidated Knife River Active Aggregate Sites 16 52 32 82 — 182 Ready-Mix Plants 21 27 17 41 — 106 Asphalt Plants 4 12 15 20 — 51 Liquid Asphalt Terminals — — — — 9 9 Cement Terminals 8 — — — — 8 Aggregate sites and reserves We mine crushed stone and sand and gravel at our active aggregate sites across our segments.
Our operations include the following properties: West Mountain Central Energy Services Consolidated Knife River Active Aggregate Sites 71 35 102 — 208 Ready-Mix Plants 51 14 70 — 135 Asphalt Plants 18 15 22 — 55 Liquid Asphalt Terminals — — — 9 9 Cement Terminals 8 — — — 8 Aggregate sites and reserves We mine crushed stone and sand and gravel at our active aggregate sites across our segments.
Our aggregate annual production in tons for all aggregate mining properties, including project specific sites and sites with short-term leases that are not included in the previous tables, was 30.3 million, 30.7 million and 32.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Our aggregate annual production in tons for our aggregate mining properties included in this section was 27.7 million, 27.8 million and 28.1 million for the years ended December 31, 2025, 2024 and 2023, respectively. 30 Index The average selling price per ton for crushed stone and sand and gravel was $21.55 and $14.39, respectively, in 2025.
Removed
Additionally, management assesses the risks associated in obtaining and maintaining the various land use, mining and environmental permits necessary for the properties to operate as mines.
Added
Probable — those reserves for which quantity, grade and quality are computed partly from specific measurements and partly from projections based on reasonable geologic evidence. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.
Removed
Total Annual Aggregate Production Production Area Crushed Stone Sand & Gravel (Tons in thousands) Pacific 1,991 2,950 Northwest 6,108 3,430 Mountain 1,173 5,420 Central 3,110 3,568 Total 12,382 15,368 Aggregate Sites Production Area Crushed Stone Sand & Gravel Owned Leased Owned Leased Pacific — 6 10 1 Northwest 12 16 16 10 Mountain 2 7 15 9 Central 9 2 52 19 Total 23 31 93 39 35 Index The following table sets forth details applicable to our aggregate reserves as of December 31, 2024.
Added
Total Annual Aggregate Production Production Area Crushed Stone Sand & Gravel (Tons in thousands) West 6,471 6,268 Mountain 804 5,774 Central 3,319 5,032 Total 10,594 17,074 29 Index Aggregate Sites* Production Area Crushed Stone Sand & Gravel Owned Leased Owned Leased West 14 23 27 11 Mountain 3 6 16 10 Central 9 5 66 23 Total 26 34 109 44 __________________ * Includes 5 sites that are classified as exploration stage properties.
Removed
Crushed Stone Sand & Gravel Production Area Aggregate Sites Proven Mineral Reserves Probable Mineral Reserves Total Mineral Reserves Proven Mineral Reserves Probable Mineral Reserves Total Mineral Reserves Total Mineral Reserves (Tons in thousands) Pacific 16 78,899 39,064 117,963 39,253 — 39,253 157,216 Northwest 52 384,064 17,083 401,147 71,369 21,512 92,881 494,028 Mountain 32 79,822 — 79,822 131,205 9,884 141,089 220,911 Central 82 110,081 86,581 196,662 86,460 6,528 92,988 289,650 Total 182 652,866 142,728 795,594 328,287 37,924 366,211 1,161,805 __________________ 1 The average selling price per ton for crushed stone and sand and gravel was $19.59 and $12.80, respectively, in 2024.
Added
The following table sets forth details applicable to our aggregate reserves as of December 31, 2025.
Removed
Crushed Stone Sand & Gravel Production Area Aggregate Sites Measured Mineral Resources Indicated Mineral Resources Measured + Indicated Mineral Resources Measured Mineral Resources Indicated Mineral Resources Measured + Indicated Mineral Resources Inferred Mineral Resources (Tons in thousands) Pacific 1 — — — 4,673 — 4,673 54,660 Northwest 2 128,613 105,112 233,725 44,715 20,976 65,691 209,162 Mountain 1 — 47,749 47,749 27,628 9,765 37,393 1,733 Central 0 — — — — — — — Total 4 128,613 152,861 281,474 77,016 30,741 107,757 265,555 __________________ * Pacific, Northwest and Mountain all have sites that include both reserves and resources, which are included in the number of aggregate sites for reserves.
Added
Crushed Stone Sand & Gravel Production Area Aggregate Sites Proven Mineral Reserves Probable Mineral Reserves Total Mineral Reserves Proven Mineral Reserves Probable Mineral Reserves Total Mineral Reserves Total Mineral Reserves (Tons in thousands) West 71 525,526 60,161 585,687 107,612 11,831 119,443 705,130 Mountain 35 79,018 — 79,018 133,821 13,318 147,139 226,157 Central 102 112,426 86,580 199,006 167,253 6,527 173,780 372,786 Total 208 716,970 146,741 863,711 408,686 31,676 440,362 1,304,073 __________________ 1 The average selling price per ton for crushed stone and sand and gravel was $21.55 and $14.39, respectively, in 2025.
Added
Crushed Stone Sand & Gravel Production Area Aggregate Sites Measured Mineral Resources Indicated Mineral Resources Measured + Indicated Mineral Resources Measured Mineral Resources Indicated Mineral Resources Measured + Indicated Mineral Resources Inferred Mineral Resources (Tons in thousands) West 4 141,129 140,003 281,132 49,469 25,596 75,065 273,319 Mountain 0 — 47,749 47,749 22,228 11,131 33,359 4,132 Central 1 53,365 — 53,365 — — — — Total 5 194,494 187,752 382,246 71,697 36,727 108,424 277,451 __________________ * West, Mountain and Central all have sites that include both reserves and resources, which are included in the number of aggregate sites for reserves and not included in the number of aggregate sites for resources.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES For information regarding mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K, see Exhibit 95 to this Form 10-K, which is incorporated herein by reference. 37 Index PART II
Biggest changeITEM 4. MINE SAFETY DISCLOSURES For information regarding mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K, see Exhibit 95 to this Form 10-K, which is incorporated herein by reference. 31 Index PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+2 added−0 removed1 unchanged
Biggest changeAny future determination as to the declaration and payment of dividends will be at the discretion of the board of directors and will depend on then-existing conditions, including financial condition, results of operations, contractual restrictions, capital requirements, business prospects and other factors the board of directors considers relevant. Purchases of Equity Securities by the Issuer None.
Biggest changeAny future determination as to the declaration and payment of dividends will be at the discretion of the board of directors and will depend on then-existing conditions, including financial condition, results of operations, contractual restrictions, capital requirements, business prospects and other factors the board of directors considers relevant.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our common stock is listed on the New York Stock Exchange under the ticker symbol "KNF.” As of February 13, 2025, our common stock was held by approximately 7,900 stockholders of record.
ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders Our common stock is listed on the New York Stock Exchange under the ticker symbol "KNF.” As of February 17, 2026, our common stock was held by approximately 7,500 stockholders of record.
Added
Performance Graph The graph below compares the cumulative total return to stockholders of our common stock with the total returns of the S&P 500 Index and the S&P 400 Materials Index. The graph assumes an investment of $100 in each index, including reinvestment of dividends, beginning on June 1, 2023, the first trading day of our common stock post Separation.
Added
The stock price performance shown in the graph is not necessarily indicative of future price performance. 32 Index Cumulative Total Return June 1, 2023 December 31, 2023 December 31, 2024 December 31, 2025 Knife River Corporation $ 100.00 $ 188.98 $ 290.23 $ 200.89 S&P 500 Index $ 100.00 $ 114.03 $ 142.56 $ 168.05 S&P 400 Materials Index $ 100.00 $ 120.11 $ 117.14 $ 122.23 Purchases of Equity Securities by the Issuer None. 33 Index

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

94 edited+59 added−75 removed72 unchanged
Biggest changePartially offsetting the increase was higher selling, general and administrative expenses, as a result of higher payroll-related costs of $2.4 million, including increased incentive accruals based on our performance. 49 Index Results of Operations – Central Years ended December 31, 2024 2023 2022 2024 vs 2023 % change 2023 vs 2022 % change (In millions) Revenue $ 818.1 $ 825.0 $ 779.8 (1) % 6 % EBITDA $ 131.6 $ 116.6 $ 86.6 13 % 35 % EBITDA margin 16.1 % 14.1 % 11.1 % 2024 2023 2022 (In millions) Revenues: Aggregates $ 157.2 $ 152.7 $ 149.4 Ready-mix concrete 224.8 227.7 217.3 Asphalt 185.3 204.0 201.2 Other* 31.7 28.8 25.0 Contracting services 432.5 447.6 426.8 Internal sales (213.4) (235.8) (239.9) $ 818.1 $ 825.0 $ 779.8 __________________ * Other includes merchandise and other products that individually are not considered to be a major line of business for the segment. 2024 Compared to 2023 Our revenue decreased $6.9 million in 2024 as a result of lower asphalt and ready-mix concrete volumes and $15.1 million less contracting services revenues, largely due to our EDGE-related initiative of quality of work over quantity of work.
Biggest changeResults of Operations – Central Years ended December 31, 2025 2024 2023 2025 vs 2024 % change 2024 vs 2023 % change (In millions) Revenue $ 1,004.8 $ 818.1 $ 825.0 23 % (1) % EBITDA $ 159.6 $ 131.6 $ 116.6 21 % 13 % EBITDA margin 15.9 % 16.1 % 14.1 % 2025 2024 2023 (In millions) Revenues: Aggregates $ 225.6 $ 157.2 $ 152.7 Ready-mix concrete 308.1 224.8 227.7 Asphalt 190.2 185.3 204.0 Other* 35.2 31.7 28.8 Contracting services 477.8 432.5 447.6 Internal sales (232.1) (213.4) (235.8) $ 1,004.8 $ 818.1 $ 825.0 __________________ * Other includes merchandise and other products that individually are not considered to be a major line of business for the segment. 2025 Compared to 2024 Revenue increased $186.7 million in 2025, largely driven by contributions from acquired companies, as well as the impact of our legacy operations price increases in the aggregate product line of $12.5 million and ready-mix product line of $6.5 million.
Gross Profit and Gross Margin Gross profit improved $30.9 million while gross margin improved 70 basis points. Contracting services margins increased 160 basis points as we saw an increase in revenues along with improved bid margins and favorable project execution during the year.
Gross Profit and Gross Margin Gross profit improved by $30.9 million while gross margin improved 70 basis points. Contracting services margins increased 160 basis points as we saw an increase in revenues along with improved bid margins and favorable project execution during the year.
Although we may engage independent third-party consultants to assist with 58 Index the valuation of aggregate reserves and intangibles, the valuations are based on significant estimates that are approved by management. The process is highly subjective and requires a large degree of management judgement. Assumptions used may vary for each specific business combination due to unique circumstances of each transaction.
Although we may engage independent third-party consultants to assist with the valuation of aggregate reserves and intangibles, the valuations are based on significant estimates that are approved by management. The process is highly subjective and requires a large degree of management judgement. Assumptions used may vary for each specific business combination due to unique circumstances of each transaction.
Other than these letters of credit further discussed in Item 8 - Note 18, we do not currently have any off-balance sheet arrangements that have, or are reasonably likely to have, a material impact on current or future financial conditions, results of operations or cash flows.
Other than these letters of credit further discussed in Item 8 - Note 18, we do 47 Index not currently have any off-balance sheet arrangements that have, or are reasonably likely to have, a material impact on current or future financial conditions, results of operations or cash flows.
Estimates and judgements may include, among other things, whether triggering events have occurred, estimates of future cash flows, the asset’s useful life, disposal activity obligations, growth and production. The determination of whether an impairment has occurred is based on an estimate of undiscounted future cash flows attributable to the assets, compared to the carrying value of the assets.
Estimates and judgments may include, among other things, whether triggering events have occurred, estimates of future cash flows, the asset’s useful life, disposal activity obligations, growth and production. The determination of whether an impairment has occurred is based on an estimate of undiscounted future cash flows attributable to the assets, compared to the carrying value of the assets.
Our management uses these non-GAAP financial measures in conjunction with GAAP results when evaluating our operating results internally and calculating employee incentive compensation. 60 Index EBITDA is calculated by adding back income taxes, interest expense (net of interest income) and depreciation, depletion and amortization expense to net income. EBITDA margin is calculated by dividing EBITDA by revenues.
Our management uses these non-GAAP financial measures in conjunction with GAAP results when evaluating our operating results internally and calculating employee incentive compensation. EBITDA is calculated by adding back income taxes, interest expense (net of interest income) and depreciation, depletion and amortization expense to net income. EBITDA margin is calculated by dividing EBITDA by revenues.
Liquid asphalt sales volumes were up 4 percent, primarily from strong demand in California and Texas, which were partially offset by decreased volumes in the Midwest due to less carryover jobs year-over-year. The acquisition of Albina during the fourth quarter of 2024 also contributed additional liquid asphalt sales volumes.
Liquid asphalt sales volumes were up 4 percent, primarily from strong demand in California and Texas, which were partially offset by decreased volumes in the Midwest due to less carry over jobs year-over-year. The acquisition of Albina during the fourth quarter of 2024 also contributed additional liquid asphalt sales volumes.
As a project commences, estimates are continually 57 Index monitored and revised as information becomes available and actual costs and conditions surrounding the job become known. If a loss is anticipated on a contract, the loss is immediately recognized. Contracts are often modified to account for changes in contract specifications and requirements.
As a project commences, estimates are continually monitored and revised as information becomes available and actual costs and conditions surrounding the job become known. If a loss is anticipated on a contract, the loss is immediately recognized. Contracts are often modified to account for changes in contract specifications and requirements.
Our non-GAAP financial measures are not standardized; therefore, it may not be possible to compare these financial measures with other companies’ EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin measures having the same or similar names. The following information reconciles consolidated net income to EBITDA and Adjusted EBITDA and provides the calculation of EBITDA margin and Adjusted EBITDA margin.
Our non-GAAP financial measures are not standardized; therefore, it may not be possible to compare these financial measures with other companies’ EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin measures having the same or similar names. 55 Index The following information reconciles consolidated net income to EBITDA and Adjusted EBITDA and provides the calculation of EBITDA margin and Adjusted EBITDA margin.
Our aggregate sites and associated asphalt and ready-mix plants are primarily in strategic locations near mid-sized, high-growth markets, providing us with a transportation advantage for our materials that supports competitive pricing and increased margins.
Our aggregate sites and associated asphalt and ready-mix plants are primarily in strategic locations near mid-sized, higher-growth markets, providing us with a transportation advantage for our materials that supports competitive pricing and increased margins.
In 2023, we began implementing EDGE initiatives and established teams to deliver training, assist with targeting higher-margin bidding opportunities across the regions and pursue growth opportunities, as well as identifying ways to increase efficiencies and reduce costs.
In 2023, we began implementing EDGE initiatives and established teams to deliver training, assist with targeting higher-margin bidding opportunities across the regions and pursue growth opportunities, as well as identifying ways to 36 Index increase efficiencies and reduce costs.
The accuracy of revenues reported on the audited consolidated financial statements depends on, among other things, management’s estimates of total costs to complete projects because we use the cost-to-cost measure of progress on contracting services contracts for revenue recognition.
The accuracy of revenues reported on the audited consolidated financial statements depends on, among other things, 51 Index management’s estimates of total costs to complete projects because we use the cost-to-cost measure of progress on contracting services contracts for revenue recognition.
Changes in estimates could have a material effect on our results of operations, financial position and cash flows. For the years ended December 31, 2024, 2023 and 2022, our total contracting services revenue was $1.4 billion, $1.3 billion and $1.2 billion, respectively. Several factors are evaluated in determining the bid price for contract work.
Changes in estimates could have a material effect on our results of operations, financial position and cash flows. For the years ended December 31, 2025, 2024 and 2023, our total contracting services revenue was $1.4 billion, $1.4 billion and $1.3 billion, respectively. Several factors are evaluated in determining the bid price for contract work.
Partially offsetting these increases were decreased ready-mix, aggregate and asphalt sales volumes of $120.5 million, primarily due to EDGE-related initiatives of quality over quantity of work, timing of projects and lower demand for private projects. Liquid asphalt revenue decreased due to lower pricing as a result of reduced supply input costs across our market areas.
Partially offsetting these increases were decreased ready-mix, aggregate and asphalt sales volumes, primarily due to EDGE-related initiatives of quality over quantity of work, timing of projects and lower demand for private projects. Liquid asphalt revenue decreased due to lower pricing as a result of reduced supply input costs across our market areas.
If impairment has occurred, the amount of the impairment recognized is determined by estimating the fair value of the assets and recording a loss if the carrying value is greater than the fair value. No impairment losses were recorded in 2024 or 2022.
If impairment has occurred, the amount of the impairment recognized is determined by estimating the fair value of the assets and recording a loss if the carrying value is greater than the fair value. No impairment losses were recorded in 2025 or 2024.
When indications of or triggers for impairment are noted, impairment testing is completed. The impairment testing requires the use of significant estimates, judgements and uncertainties by management, which may vary from actual results.
When indications of or triggers for impairment are noted, impairment testing is completed. The impairment testing requires the use of significant estimates, judgments and uncertainties by management, which may vary from actual results.
In order to borrow under the debt instruments, we must be in compliance with the applicable covenants and certain other conditions, all of which we are in compliance at December 31, 2024.
In order to borrow under the debt instruments, we must be in compliance with the applicable covenants and certain other conditions, all of which we are in compliance at December 31, 2025.
The items excluded from these non-GAAP financial measures are significant components in understanding and assessing financial performance. Therefore, these non-GAAP financial measures should not be considered substitutes for the applicable GAAP metric.
These non-GAAP financial measures are not measures of financial performance under GAAP. The items excluded from these non-GAAP financial measures are significant components in understanding and assessing financial performance. Therefore, these non-GAAP financial measures should not be considered substitutes for the applicable GAAP metric.
Further, there continues to be infrastructure development, which is expected to provide bidding opportunities in our markets throughout 2025. Period-over-period increases or decreases in backlog may not be indicative of future revenues, margins, net income or EBITDA. For a discussion of EBITDA and EBITDA margin, see “Non-GAAP Financial Measures” later in this section.
Further, there continues to be infrastructure development across our segments, which is expected to provide bidding opportunities in our markets throughout 2026. Period-over-period increases or decreases in backlog may not be indicative of future revenues, margins, net income or EBITDA. For a discussion of EBITDA and EBITDA margin, see “Non-GAAP Financial Measures” later in this section.
Working capital requirements generally increase in the first half of the year as we build up inventory and focus on preparing equipment and facilities and other start-up costs for our construction season. Working capital levels then typically decrease as the construction season winds down and we collect on receivables.
Working capital requirements generally increase in the first half of the year as we build up inventory and focus on preparing equipment and facilities for our construction season. Working capital levels then typically decrease as the construction season winds down and we collect on receivables.
For more information and reconciliations to the nearest GAAP measures, see the section entitled "Non-GAAP Financial Measures." Comparison for the Years Ended December 31, 2024, 2023 and 2022.
For more information and reconciliations to the nearest GAAP measures, see the section entitled "Non-GAAP Financial Measures." Comparison for the Years Ended December 31, 2025, 2024 and 2023.
Various assumptions are used in calculating the benefit expense (income) and liability (asset) related to the pension plans. Actuarial assumptions include assumptions about the discount rate and expected return on plan assets. For 2024, we assumed a discount rate of 5.4 percent and long-term rate of return on our qualified defined pension plan assets of 6.0 percent.
Various assumptions are used in calculating the benefit expense (income) and liability (asset) related to the pension plans. Actuarial assumptions include assumptions about the discount rate and expected return on plan assets. For 2025, we assumed a discount rate of 5.2 percent and long-term rate of return on our qualified defined pension plan assets of 6.0 percent.
Long-Lived Assets Excluding Goodwill Long-lived assets, which include aggregate reserves and related assets, represent 55 percent of our total assets as of December 31, 2024. We review the carrying values of our long-lived assets when events or changes in circumstances indicate that such carrying values may not be recoverable.
Long-Lived Assets Excluding Goodwill Long-lived assets, which include aggregate reserves and related assets, represent 56 percent of our total assets as of December 31, 2025. We review the carrying values of our long-lived assets when events or changes in circumstances indicate that such carrying values may not be recoverable.
The long-term growth rates used in the five-year forecast are developed by management based on industry 59 Index data, management’s knowledge of the industry and management’s strategic plans. The long-term growth rate used was 3 percent in 2024, 2023 and 2022.
The long-term growth rates used in the five-year forecast are developed by management based on industry data, management’s knowledge of the industry and management’s strategic plans. The long-term growth rate used was 3 percent in 2025, 2024 and 2023.
For more information and reconciliations to the nearest GAAP measures, see the section entitled “Non-GAAP Financial Measures.” 42 Index The following tables summarize our operating results for the years ended December 31, 2024, 2023 and 2022.
For more information and reconciliations to the nearest GAAP measures, see the section entitled “Non-GAAP Financial Measures.” The following tables summarize our operating results for the years ended December 31, 2025, 2024 and 2023.
Material short-term cash requirements include repayment of outstanding borrowings and interest payments on those agreements, payments on operating lease agreements, payment of obligations on purchase commitments and asset retirement obligations. At December 31, 2024, the current portion of asset retirement obligations was $7.1 million and was included in other accrued liabilities on the Consolidated Balance Sheets.
Material short-term cash requirements include repayment of outstanding borrowings and interest payments on those agreements, payments on operating lease agreements, payment of obligations on purchase commitments and asset retirement obligations. At December 31, 2025, the current portion of asset retirement obligations was $14.2 million and was included in other accrued liabilities on the Consolidated Balance Sheets.
As an aggregates-led construction materials and contracting services provider in the United States, our 1.2 billion tons of aggregate reserves provide the foundation for a vertically integrated business strategy, with 38 Index approximately 37 percent of our aggregates in 2024 being used internally to support value-added downstream products (ready-mix concrete and asphalt) and contracting services (heavy-civil construction, laydown, asphalt paving, concrete construction, site development and grading services, bridges, and in some segments the manufacturing of prestressed concrete products).
As an aggregates-based construction materials and contracting services provider in the United States, our 1.3 billion tons of aggregate reserves provide the foundation for a vertically integrated business strategy, with approximately 35 percent of our aggregates in 2025 being used internally to support value-added downstream products (ready-mix concrete and asphalt) and contracting services (heavy-civil construction, laydown, asphalt paving, concrete construction, site development and grading services, bridges, and in some segments the manufacturing of prestressed concrete products).
For additional information on our debt, see Item 8 - Note 9. Off-Balance Sheet Arrangements As of December 31, 2024, we had aggregate outstanding letters of credit issued under our revolving credit facility in the amount of $20.6 million.
For additional information on our debt, see Item 8 - Note 9. Off-Balance Sheet Arrangements As of December 31, 2025, we had aggregate outstanding letters of credit issued under our revolving credit facility in the amount of $23.4 million.
Our material long-term cash requirements include repayment of outstanding borrowings and interest payments on those agreements, payments on operating lease agreements, payment of obligations on purchase commitments and asset retirement obligations. At December 31, 2024, we had total liabilities of $59.4 million related to asset retirement obligations that are excluded from the table above.
Our material long-term cash requirements include repayment of outstanding borrowings and interest payments on those agreements, payments on operating lease agreements, payment of obligations on purchase commitments and asset retirement obligations. At December 31, 2025, we had total liabilities of $78.8 million related to asset 50 Index retirement obligations that are excluded from the table above.
At December 31, 2024, the pension plans’ accumulated benefit obligations exceeded the plans’ assets by approximately $345,000. Pretax pension expense (income) reflected in the Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022, was $289,000, $343,000 and $10,000, respectively. Our pension expense is currently projected to be approximately $350,000 in 2025.
At December 31, 2025, the pension plans’ assets exceeded the plans’ accumulated benefit obligations by approximately $53,000. Pretax pension expense (income) reflected in the Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023, was $349,000, $289,000 and $343,000, respectively. Our pension expense is currently projected to be approximately $637,000 in 2026.
In 2024, we saw price increases of low-double-digits for ready-mix concrete, high-single-digits for aggregates and low-single digits for asphalt. Our contracting services revenue also increased in most regions, particularly in the Mountain, Northwest and Pacific regions, as we benefited from additional public-agency work and timing of projects.
In 2024, we saw price increases of low-double-digits for ready-mix concrete, high-single-digits for aggregates and low-single digits for asphalt. Our contracting services revenue also increased, as we benefited from additional public-agency work and timing of projects.
Therefore, this change in asset values will be reflected in future expenses of the plans beginning in 2025. The funded status of the plans did not change significantly with the gains on the assets because the liabilities decreased as well due to the increase in the discount rate.
Therefore, this change in asset values will be reflected in future expenses of the plans beginning in 2026. The funded status of the plans did not change significantly with the increase in assets because the liabilities increased as well due to the decrease in the discount rate.
The north central region also saw less contracting services work and asphalt sales volumes in 2024 related to the timing of projects with more work completed in late 2023 due to favorable weather later in the construction season.
We also saw less contracting services work and asphalt sales volumes in our northern states in 2024 related to the timing of projects with more work completed in late 2023 due to favorable weather later in the construction season.
These improvements resulted from higher construction gross profit of $15.5 million due to favorable job execution, efficiencies gained at our Spokane prestress facility and more available public agency work.
These improvements resulted from higher contracting services gross profit of $18.3 million due to favorable job execution, efficiencies gained at our Spokane prestress facility and more available public agency work.
N.M. N.M. Total $ 2,899.0 $ 2,830.3 $ 2,534.7 $ 454.3 $ 422.0 $ 306.7 15.7 % 14.9 % 12.1 % __________________ 1 EBITDA and EBITDA margin are non-GAAP financial measures.
N.M. N.M. Total $ 3,146.0 $ 2,899.0 $ 2,830.3 $ 484.3 $ 454.3 $ 422.0 15.4 % 15.7 % 14.9 % __________________ 1 EBITDA and EBITDA margin are non-GAAP financial measures.
We believe Adjusted EBITDA and Adjusted EBITDA margin are useful performance measures because they allow for an effective evaluation of our operating performance by excluding stock-based compensation and unrealized gains and losses on benefit plan investments as they are considered non-cash and not part of our core operations.
We believe Adjusted EBITDA and Adjusted EBITDA margin are useful performance measures because they allow for an effective evaluation of our operating performance by excluding stock-based compensation, unrealized gains and losses on benefit plan investments, and the impact of selling acquired inventory after markup to fair value as part of acquisition accounting as they are considered non-cash and not part of our core operations.
We provide various products and services and operate a variety of facility types, including aggregate quarries and mines, ready-mix concrete plants, asphalt plants and distribution facilities in the following states: • Pacific: Alaska, California and Hawaii • Northwest: Oregon and Washington • Mountain: Idaho, Montana and Wyoming • Central: Iowa, Minnesota, North Dakota, South Dakota and Texas • Energy Services: California, Iowa, Nebraska, Oregon, South Dakota, Texas, Washington and Wyoming The following table presents a summary of products and services provided, as well as modes of transporting those products: Products and Services Modes of Transportation Aggregates Asphalt Ready- Mix Concrete Construction Services Precast/ Prestressed Concrete Liquid Asphalt Cement Heavy Equipment Trucking Rail Barge Pacific X X X X X X X X X X Northwest X X X X X X X X X Mountain X X X X X X Central X X X X X X X X Energy Services X X X Basis of Presentation On May 31, 2023, we became a stand-alone publicly traded company.
We provide our products and services to both public and private markets, with public markets tending to be more stable across economic cycles, which helps offset the cyclical nature of the private markets. 34 Index We provide various products and services and operate a variety of facility types, including aggregate quarries and mines, ready-mix concrete plants, asphalt plants and distribution facilities in the following states: • West: Alaska, California, Hawaii, Oregon and Washington • Mountain: Idaho, Montana and Wyoming • Central: Iowa, Minnesota, North Dakota, South Dakota and Texas • Energy Services: California, Iowa, Nebraska, Oregon, South Dakota, Texas, Washington and Wyoming The following table presents a summary of products and services provided, as well as modes of transporting those products: Products and Services Modes of Transportation Aggregates Asphalt Ready- Mix Concrete Construction Services Precast/ Prestressed Concrete Liquid Asphalt Cement Heavy Equipment Trucking Rail Barge West X X X X X X X X X X Mountain X X X X X X Central X X X X X X X X Energy Services X X X Basis of Presentation On May 31, 2023, we became a stand-alone publicly traded company.
Increased discount rates for 2024 compared to 2023 resulted in actuarial gains. Differences between actuarial assumptions and actual plan results are deferred and amortized into expense when the accumulated differences exceed 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets.
Decreased discount rates for 2025 compared to 2024 resulted in actuarial losses, offset in part by higher than expected asset sale gains. Differences between actuarial assumptions and actual plan results are deferred and amortized into expense when the accumulated differences exceed 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets.
Gross profit includes revenue less cost of revenue, as defined above, and is the difference between revenue and the cost of making a product or providing a service, before deducting selling, general and administrative expenses, income taxes, interest expense and other expenses.
Cost of revenue also includes depreciation, depletion and amortization attributable to the assets used in the production process. Gross profit includes revenue less cost of revenue, as defined above, and is the difference between revenue and the cost of making a product or providing a service, before deducting selling, general and administrative expenses, income taxes, interest expense and other expenses.
The effective tax rate can be affected by many factors, including changes in tax laws, regulations or rates, new interpretations of existing laws or regulations and changes to our overall levels of income before income tax.
Income taxes are presented at the corporate services level and not at the individual segments. The effective tax rate can be affected by many factors, including changes in tax laws, regulations or rates, new interpretations of existing laws or regulations and changes to our overall levels of income before income tax.
States have moved forward with allocating funds from federal programs, such as the IIJA, which is authorized to provide $1.2 trillion in funding from 2022 through 2026. As of November 2024, approximately 43 percent of IIJA formula funding has yet to be obligated to projects in our market areas.
States have moved forward with allocating funds from federal programs, such as the IIJA, which is authorized to provide $1.2 trillion in funding from 2022 through 2026. As of November 2025, approximately 46 percent of IIJA formula funding had yet to be distributed in our 14-state operating market.
Capital Expenditures We are committed to disciplined capital allocation, including reinvesting in our company to maintain fixed assets, improve operations and grow our business. In 2024, we spent $170.5 million, compared to $124.3 million in 2023, on the replacement of depleting aggregate reserves, construction equipment, plant improvements and buildings.
Capital Expenditures We are committed to disciplined capital allocation, including reinvesting in our company to maintain fixed assets, improve operations and grow our business. In 2025, we spent $169.5 million on the replacement of construction equipment and plant improvements.
Of the $745.6 million of backlog at December 31, 2024, we expect to complete an estimated $630.5 million during 2025. Approximately 86 percent of our backlog as of December 31, 2024, relates to publicly funded projects, including street and highway construction projects, which are driven primarily by public works projects for state departments of transportation.
Of the $1.0 billion of backlog at December 31, 2025, we expect to complete an estimated $768.8 million, or 75 percent, during 2026. Approximately 89 percent of our backlog as of December 31, 2025, relates to publicly funded projects, including street and highway construction projects, which are driven primarily by public works projects for state departments of transportation.
We provide segment level information by revenue, EBITDA and EBITDA margin as these are measures of profitability used by management and our chief operating decision maker to assess operating results. On January 1, 2025, we completed a reorganization of our operating segments, including the management of the segments, to align with our business strategy.
We provide segment level information by revenue, EBITDA and EBITDA margin as these are measures of profitability used by management and our chief operating decision maker to assess operating results. In January 2025, we made a change to our organizational structure to better align with our business strategy.
We also champion a positive workplace culture by focusing on safety, training, compensation and work-life balance. We are one of the leading providers of crushed stone and sand and gravel in the United States and, as of December 31, 2024, operated through six operating segments across 14 states: Pacific, Northwest, Mountain, North Central, South and Energy Services.
We also champion a positive workplace culture by focusing on safety, training, compensation and work-life balance. We are one of the leading providers of crushed stone and sand and gravel in the United States and operate through four reportable segments, across 14 states: West, Mountain, Central and Energy Services.
During the year ended December 31, 2023, we recognized non-cash asset impairments of $5.8 million as a result of certain aggregate sites no longer being economically feasible to mine and having no remaining value. Unforeseen events and changes in circumstances could require the recognition of impairment losses at some future date.
During the year ended December 31, 2023, we recognized non-cash asset impairments of $5.8 million as a result of certain aggregate sites no longer being economically feasible to mine and having no remaining value.
Results of Operations – Energy Services Years ended December 31, 2024 2023 2022 2024 vs 2023 % change 2023 vs 2022 % change (In millions) Revenue $ 275.7 $ 292.3 $ 238.4 (6) % 23 % EBITDA $ 60.2 $ 78.1 $ 28.3 (23) % 176 % EBITDA margin 21.8 % 26.7 % 11.9 % 2024 2023 2022 (In millions) Revenues: Liquid asphalt $ 238.9 $ 253.2 $ 207.5 Other* 50.6 49.3 45.2 Internal sales (13.8) (10.2) (14.3) $ 275.7 $ 292.3 $ 238.4 __________________ * Other includes transportation services, fabric, spreading and other products that individually are not considered to be a major line of business for the segment. 2024 Compared to 2023 Our revenue decreased $16.6 million in 2024, largely due to lower pricing as a result of reduced supply input costs across our market areas.
Results of Operations – Energy Services Years ended December 31, 2025 2024 2023 2025 vs 2024 % change 2024 vs 2023 % change (In millions) Revenue $ 338.0 $ 275.7 $ 292.3 23 % (6) % EBITDA $ 54.9 $ 60.2 $ 78.1 (9) % (23) % EBITDA margin 16.2 % 21.8 % 26.7 % 2025 2024 2023 (In millions) Revenues: Liquid asphalt $ 296.0 $ 238.9 $ 253.2 Other* 53.5 50.6 49.3 Internal sales (11.5) (13.8) (10.2) $ 338.0 $ 275.7 $ 292.3 __________________ * Other includes transportation services, fabric, spreading and other products that individually are not considered to be a major line of business for the segment. 2025 Compared to 2024 Our revenue increased $62.3 million in 2025, largely due to contributions from the acquisition of Albina Asphalt in November 2024.
Separately, we also intend to increase the total commitments under our existing revolving credit facility from $350 million to $500 million and extend the maturity date of our existing senior secured credit facilities from 2028 to 2030. 53 Index Cash Flows Years ended December 31, 2024 2023 2022 (In millions) Net cash provided by (used in) Operating activities $ 322.3 $ 335.7 $ 207.5 Investing activities (294.8) (117.9) (155.9) Financing activities (8.7) 34.4 (55.3) Increase (decrease) in cash, cash equivalents and restricted cash 18.8 252.2 (3.7) Cash, cash equivalents and restricted cash – beginning of year 262.3 10.1 13.8 Cash, cash equivalents and restricted cash – end of year $ 281.1 $ 262.3 $ 10.1 Operating activities Years ended December 31, 2024 2023 2022 (In millions) Net income $ 201.7 $ 182.9 $ 116.2 Adjustments to reconcile net income to net cash provided by operating activities 137.4 128.8 112.4 Changes in current assets and current liabilities, net of acquisitions: Receivables 14.1 (54.8) (32.5) Due from related-party — 16.1 (8.0) Inventories (44.3) 3.7 (31.0) Other current assets 10.9 (19.6) — Accounts payable 7.3 33.1 17.5 Due to related-party — (7.3) 3.6 Other current liabilities (4.0) 49.0 21.4 Pension and postretirement benefit plan contributions (2.7) (1.8) (.4) Other noncurrent changes 1.9 5.6 8.3 Net cash provided by operating activities $ 322.3 $ 335.7 $ 207.5 Cash provided by operating activities for the year ended December 31, 2024, decreased $13.4 million, largely related to higher working capital needs.
Cash Flows Years ended December 31, 2025 2024 2023 (In millions) Net cash provided by (used in) Operating activities $ 278.5 $ 322.3 $ 335.7 Investing activities (913.7) (294.8) (117.9) Financing activities 477.5 (8.7) 34.4 Increase (decrease) in cash, cash equivalents and restricted cash (157.7) 18.8 252.2 Cash, cash equivalents and restricted cash – beginning of year 281.1 262.3 10.1 Cash, cash equivalents and restricted cash – end of year $ 123.4 $ 281.1 $ 262.3 48 Index Operating activities Years ended December 31, 2025 2024 2023 (In millions) Net income $ 157.1 $ 201.7 $ 182.9 Adjustments to reconcile net income to net cash provided by operating activities 209.5 137.4 128.8 Changes in current assets and current liabilities, net of acquisitions: Receivables (44.0) 14.1 (54.8) Due from related-party — — 16.1 Inventories (13.4) (44.3) 3.7 Other current assets (9.1) 10.9 (19.6) Accounts payable (15.0) 7.3 33.1 Due to related-party — — (7.3) Other current liabilities (9.3) (4.0) 49.0 Pension and postretirement benefit plan contributions (.6) (2.7) (1.8) Other noncurrent changes 3.3 1.9 5.6 Net cash provided by operating activities $ 278.5 $ 322.3 $ 335.7 Cash provided by operating activities for the year ended December 31, 2025, decreased $43.8 million, largely related to higher working capital needs.
Contracting services revenue is recognized over time using an input method based on the cost-to-cost measure of progress on a project. Cost of revenue includes all material, labor and overhead costs incurred in the production process for our products and services. Cost of revenue also includes depreciation, depletion and amortization attributable to the assets used in the production process.
Revenue for construction materials is recognized at a point in time when delivery of the products has taken place. Contracting services revenue is recognized over time using an input method based on the cost-to-cost measure of progress on a project. Cost of revenue includes all material, labor and overhead costs incurred in the production process for our products and services.
We also incurred less one-time costs of $6.5 million primarily consisting of insurance costs related to the Separation and the transition services agreement with MDU Resources. 2023 Compared to 2022 Corporate Services contributed negative EBITDA of $53.2 million, or $24.5 million less EBITDA in 2023 than the prior year.
We also had a benefit of $3.8 million primarily due to the lack of one-time costs incurred in the prior year consisting of insurance costs related to the Separation and the transition services agreement with MDU Resources. 2024 Compared to 2023 Corporate Services contributed negative EBITDA of $60.7 million, or $7.5 million less EBITDA in 2024, compared to the prior year.
We rely on access to capital markets as sources of liquidity for capital requirements not satisfied by cash flows from operations, particularly in the first half of the year due to the seasonal nature of the industry.
The ability to fund our cash needs will depend on the ongoing ability to generate cash from operations and obtain debt financing. We rely on access to capital markets as sources of liquidity for capital requirements not satisfied by cash flows from operations, particularly in the first half of the year due to the seasonal nature of our business.
For more information and reconciliations to the nearest GAAP measures, see the section entitled “Non-GAAP Financial Measures.” 2 N.M: not meaningful Revenues Gross profit Gross margin 2024 2023 2022 2024 2023 2022 2024 2023 2022 (In millions) Aggregates $ 556.1 $ 547.9 $ 496.6 $ 114.3 $ 109.7 $ 69.5 20.6 % 20.0 % 14.0 % Ready-mix concrete 655.5 653.9 609.5 106.0 101.2 85.9 16.2 % 15.5 % 14.1 % Asphalt 441.5 452.4 427.5 68.2 61.5 41.7 15.4 % 13.6 % 9.8 % Liquid asphalt 238.9 253.2 207.5 51.5 69.7 25.4 21.6 % 27.5 % 12.2 % Other* 265.8 249.0 199.8 53.3 47.9 38.3 20.1 % 19.2 % 19.2 % Contracting services 1,358.2 1,307.3 1,187.7 176.5 148.9 100.1 13.0 % 11.4 % 8.4 % Internal sales (617.0) (633.4) (593.9) — — — — % — % — % Total $ 2,899.0 $ 2,830.3 $ 2,534.7 $ 569.8 $ 538.9 $ 360.9 19.7 % 19.0 % 14.2 % __________________ * Other includes cement, merchandise, fabric, spreading and other products and services that individually are not considered to be a major line of business. 2024 2023 2022 Sales (thousands): Aggregates (tons) 31,832 33,637 33,994 Ready-mix concrete (cubic yards) 3,484 3,837 4,015 Asphalt (tons) 6,454 6,760 7,254 Average selling price: Aggregates (per ton)* $ 17.47 $ 16.29 $ 14.61 Ready-mix concrete (per cubic yard) $ 188.11 $ 170.42 $ 151.80 Asphalt (per ton) $ 68.40 $ 66.92 $ 58.93 __________________ * The average selling price includes freight and delivery and other revenues. 43 Index 2024 Compared to 2023 Revenue Revenue increased $68.7 million as increased pricing added $122.9 million during the year as a result of our pricing initiatives across all product lines, except liquid asphalt.
For more information and reconciliations to the nearest GAAP measures, see the section entitled “Non-GAAP Financial Measures.” 2 N.M: not meaningful 38 Index Revenues Gross profit Gross margin 2025 2024 2023 2025 2024 2023 2025 2024 2023 (In millions) Aggregates $ 617.1 $ 556.1 $ 547.9 $ 114.1 $ 114.3 $ 109.7 18.5 % 20.6 % 20.0 % Ready-mix concrete 779.4 655.5 653.9 133.6 106.0 101.2 17.1 % 16.2 % 15.5 % Asphalt 421.0 441.5 452.4 65.4 68.2 61.5 15.5 % 15.4 % 13.6 % Liquid asphalt 296.0 238.9 253.2 49.5 51.5 69.7 16.7 % 21.6 % 27.5 % Other* 279.8 265.8 249.0 60.4 53.3 47.9 21.6 % 20.1 % 19.2 % Contracting services 1,383.9 1,358.2 1,307.3 154.3 176.5 148.9 11.2 % 13.0 % 11.4 % Internal sales (631.2) (617.0) (633.4) — — — — % — % — % Total $ 3,146.0 $ 2,899.0 $ 2,830.3 $ 577.3 $ 569.8 $ 538.9 18.4 % 19.7 % 19.0 % __________________ * Other includes cement, merchandise, fabric, spreading and other products and services that individually are not considered to be a major line of business. 2025 2024 2023 Sales (thousands): Aggregates (tons) 32,494 31,832 33,637 Ready-mix concrete (cubic yards) 3,913 3,484 3,837 Asphalt (tons) 6,334 6,454 6,760 Average selling price: Aggregates (per ton)* $ 18.99 $ 17.47 $ 16.29 Ready-mix concrete (per cubic yard) $ 199.17 $ 188.11 $ 170.42 Asphalt (per ton) $ 66.47 $ 68.40 $ 66.92 __________________ * The average selling price includes freight and delivery and other revenues. 2025 Compared to 2024 Revenue Revenue increased $247.0 million, largely driven by contributions of acquired companies, as well as price increases of mid-single digits on aggregates, ready-mix concrete and cement across our legacy operations.
Offsetting these increases were higher selling, general and administrative expenses of $5.4 million, largely due to additional payroll-related costs of $5.7 million, due in part to additional staffing, and increased professional services fees, offset by higher gains on the sale of non-strategic assets in Texas of $2.3 million. 2023 Compared to 2022 Our revenue increased $45.2 million in 2023, as a result of higher selling prices across all product lines providing $76.1 million of additional revenue, largely due to EDGE-related pricing initiatives.
Offsetting these increases were higher selling, general and administrative expenses of $5.4 million, largely due to additional payroll-related costs of $5.7 million, due in part to additional staffing, and increased professional services fees, offset by higher gains on the sale of non-strategic assets in Texas of $2.3 million.
Adjusted EBITDA is calculated by adding back unrealized gains and losses on benefit plan investments, stock-based compensation and one-time Separation costs to EBITDA. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenues.
Adjusted EBITDA is calculated by adding back unrealized gains and losses on benefit plan investments, stock-based compensation, impact of selling acquired inventory after markup to fair value as part of acquisition accounting, and one-time Separation costs, to EBITDA. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenues.
We have determined that the reporting units for our goodwill impairment test are our operating segments as they constitute a business for which discrete financial information is available and for which segment management regularly reviews the operating results. Goodwill impairment, if any, is measured by comparing the fair value of each reporting unit to its carrying value.
We have determined that the reporting units for our goodwill impairment test are our operating segments, along with the Prestress component of the West operating segment, as they constitute a business for which discrete financial information is available and for which segment management regularly reviews the operating results.
Liquidity and Capital Resources At December 31, 2024, we had unrestricted cash and cash equivalents of $236.8 million and working capital of $617.6 million. Working capital is calculated as current assets less current liabilities. We have a centralized cash management model and intend to use cash on hand and third-party credit facilities to fund day-to-day operations.
Working capital is calculated as current assets less current liabilities. We have a centralized cash management model and intend to use cash on hand and third-party credit facilities to fund day-to-day operations.
Years ended December 31, 2024 2023 2022 2024 vs 2023 % change 2023 vs 2022 % change (In millions) Revenue $ 2,899.0 $ 2,830.3 $ 2,534.7 2 % 12 % Cost of revenue 2,329.2 2,291.4 2,173.8 2 % 5 % Gross profit 569.8 538.9 360.9 6 % 49 % Selling, general and administrative expenses 253.6 242.5 166.6 5 % 46 % Operating income 316.2 296.4 194.3 7 % 53 % Interest expense 55.2 58.1 30.1 (5) % 93 % Other (expense) income 10.0 7.0 (5.4) (43) % 230 % Income before income taxes 271.0 245.3 158.8 10 % 54 % Income taxes 69.3 62.4 42.6 11 % 46 % Net income $ 201.7 $ 182.9 $ 116.2 10 % 57 % EBITDA* $ 454.3 $ 422.0 $ 306.7 8 % 38 % Adjusted EBITDA* $ 463.0 $ 432.4 $ 313.4 7 % 38 % __________________ * EBITDA and Adjusted EBITDA are non-GAAP financial measures.
Years ended December 31, 2025 2024 2023 2025 vs 2024 % change 2024 vs 2023 % change (In millions) Revenue $ 3,146.0 $ 2,899.0 $ 2,830.3 9 % 2 % Cost of revenue 2,568.7 2,329.2 2,291.4 10 % 2 % Gross profit 577.3 569.8 538.9 1 % 6 % Selling, general and administrative expenses 291.5 253.6 242.5 15 % 5 % Operating income 285.8 316.2 296.4 (10) % 7 % Interest expense 81.9 55.2 58.1 48 % (5) % Other income 9.3 10.0 7.0 7 % 43 % Income before income taxes 213.2 271.0 245.3 (21) % 10 % Income taxes 56.1 69.3 62.4 (19) % 11 % Net income $ 157.1 $ 201.7 $ 182.9 (22) % 10 % EBITDA* $ 484.3 $ 454.3 $ 422.0 7 % 8 % Adjusted EBITDA* $ 496.5 $ 463.0 $ 432.4 7 % 7 % __________________ * EBITDA and Adjusted EBITDA are non-GAAP financial measures.
Years ended December 31, 2024 2023 2022 (In millions) Net income $ 201.7 $ 182.9 $ 116.2 Depreciation, depletion and amortization 136.9 123.8 117.8 Interest expense, net 46.4 52.9 30.1 Income taxes 69.3 62.4 42.6 EBITDA $ 454.3 $ 422.0 $ 306.7 Unrealized (gains) losses on benefit plan investments (2.9) (2.7) 4.0 Stock-based compensation expense 7.8 3.1 2.7 One-time separation costs 3.8 10.0 — Adjusted EBITDA $ 463.0 $ 432.4 $ 313.4 Revenue $ 2,899.0 $ 2,830.3 $ 2,534.7 Net income margin 7.0 % 6.5 % 4.6 % EBITDA margin 15.7 % 14.9 % 12.1 % Adjusted EBITDA margin 16.0 % 15.3 % 12.4 %
Years ended December 31, 2025 2024 2023 (In millions) Net income $ 157.1 $ 201.7 $ 182.9 Depreciation, depletion and amortization 193.7 136.9 123.8 Interest expense, net 77.4 46.4 52.9 Income taxes 56.1 69.3 62.4 EBITDA $ 484.3 $ 454.3 $ 422.0 Unrealized gains on benefit plan investments (2.9) (2.9) (2.7) Stock-based compensation expense 11.4 7.8 3.1 Impact of selling acquired inventory after markup to fair value as part of acquisition accounting 3.7 — — One-time separation costs — 3.8 10.0 Adjusted EBITDA $ 496.5 $ 463.0 $ 432.4 Revenue $ 3,146.0 $ 2,899.0 $ 2,830.3 Net income margin 5.0 % 7.0 % 6.5 % EBITDA margin 15.4 % 15.7 % 14.9 % Adjusted EBITDA margin 15.8 % 16.0 % 15.3 %
We believe our estimates surrounding the cost-to-cost method are reasonable based on the information that is known when the estimates are made. We have contract administration, accounting and management control systems in place that allow our estimates to be updated and monitored on a regular basis.
We have contract administration, accounting and management control systems in place that allow our estimates to be updated and monitored on a regular basis.
At December 31, 2024, our material cash requirements under these obligations were as follows: Less than 1 year 1-3 years 3-5 years More than 5 years Total (In millions) Long-term debt maturities 1 $ 10.5 $ 31.1 $ 223.4 $ 425.0 $ 690.0 Estimated interest payments 2 49.3 96.2 71.7 49.4 266.6 Operating leases 15.5 21.1 10.3 11.3 58.2 Purchase commitments 52.8 30.7 4.0 7.6 95.1 $ 128.1 $ 179.1 $ 309.4 $ 493.3 $ 1,109.9 __________________ 1 Unamortized debt issuance costs are excluded from the table. 2 Represents the estimated interest payments using our long-term debt outstanding at December 31, 2024, assuming current interest rates and consistent amounts outstanding until their respective maturity dates over the periods indicated in the table above.
At December 31, 2025, our material cash requirements under these obligations were as follows: Less than 1 year 1-3 years 3-5 years More than 5 years Total (In millions) Long-term debt maturities 1 $ 11.7 $ 34.9 $ 238.3 $ 896.2 $ 1,181.1 Estimated interest payments 2 75.8 148.7 134.7 48.4 407.6 Operating leases 17.5 24.3 9.7 9.4 60.9 Purchase commitments 42.9 66.0 34.8 10.5 154.2 $ 147.9 $ 273.9 $ 417.5 $ 964.5 $ 1,803.8 __________________ 1 Unamortized debt issuance costs are excluded from the table. 2 Represents the estimated interest payments using our long-term debt outstanding at December 31, 2025, assuming current interest rates and consistent amounts outstanding until their respective maturity dates over the periods indicated in the table above.
Financing activities Years ended December 31, 2024 2023 2022 (In millions) Issuance of current related-party notes, net $ — $ — $ 208.0 Issuance (repayment) of long-term related-party notes, net — 205.3 (207.0) Issuance of long-term debt — 700.0 — Repayment of long-term debt (7.0) (3.6) (.3) Debt issuance costs — (16.7) (.8) Tax withholding on stock-based compensation (1.7) — — Net transfers to Centennial — (850.6) (55.2) Net cash provided by (used in) financing activities $ (8.7) $ 34.4 $ (55.3) The increase in cash flows used in financing activities from 2024 to 2023 was largely related to changes in our debt structure in 2023 as a result of the Separation, which included the issuance of senior notes, term loans, and a revolving credit facility and a transfer of the majority of the proceeds to Centennial.
Financing activities Years ended December 31, 2025 2024 2023 (In millions) Issuance of long-term related-party notes, net $ — $ — $ 205.3 Issuance of long-term debt 500.0 — 700.0 Repayment of long-term debt (8.8) (7.0) (3.6) Debt issuance costs (11.1) — (16.7) Tax withholding on stock-based compensation (2.6) (1.7) — Net transfers to Centennial — — (850.6) Net cash provided by (used in) financing activities $ 477.5 $ (8.7) $ 34.4 The increase in cash flows provided by financing activities from 2025 to 2024 was largely related to the funding of a new Term Loan B in March of 2025.
Partially offsetting these increases were higher operating costs for scheduled tank repair and maintenance costs and higher selling, general and administrative expenses, primarily $1.4 million of payroll-related costs. 51 Index Corporate Services and Eliminations Corporate Services includes all expenses related to the corporate functions of our company, as well as insurance activity of our captive insurer; interest expense on a majority of our long-term debt; interest income; and unrealized gains and losses on investments for our nonqualified benefit plans. 2024 Compared to 2023 Corporate Services had negative EBITDA of $60.7 million, or $7.5 million less EBITDA in 2024, compared to the prior year.
Corporate Services and Eliminations Corporate Services includes all expenses related to the corporate functions of our company, as well as insurance activity of our captive insurer; interest expense on a majority of our long-term debt; interest income; and unrealized gains and losses on investments for our nonqualified benefit plans. 2025 Compared to 2024 Corporate Services had negative EBITDA of $63.9 million, or $3.2 million less EBITDA in 2025, compared to the prior year.
Prior to the Separation, we operated as a wholly owned subsidiary of Centennial and an indirect, wholly owned subsidiary of MDU Resources and not as a stand-alone company.
Prior to the Separation, we operated as a wholly owned subsidiary of Centennial and an indirect, wholly owned subsidiary of MDU Resources and not as a stand-alone company. The financial statements for all periods are presented on a consolidated basis in conformity with GAAP.
Other general and administrative expenses include outside services; information technology; depreciation and amortization; training, travel and entertainment; office supplies; healthcare; allowance for expected credit losses; gains or losses on the sale of assets; expenses for the transition services agreement with MDU Resources; and other miscellaneous expenses. 41 Index Other income (expense) includes net periodic benefit costs for our benefit plan expenses, other than service costs; interest income; realized and unrealized gains and losses on our nonqualified benefit plan investments; earnings or losses on joint venture arrangements; and other miscellaneous income or expenses, including income related to the transition services agreement with MDU Resources.
Other income (expense) includes net periodic benefit costs for our benefit plan expenses, other than service costs; interest income; realized and unrealized gains and losses on our nonqualified benefit plan investments; earnings or losses on joint venture arrangements; and other miscellaneous income or expenses, including income related to the transition services agreement with MDU Resources in 2023. 37 Index Income tax expense consists of corporate income taxes related to our net income.
In addition, our selling, general and administrative expenses decreased $3.0 million due to the absence of a non-cash asset impairment in 2023 of $3.6 million on an aggregate site, as discussed in Item 8 - Note 2; higher gains on the sale of equipment; lower bad debt expense of $500,000; and lower professional services, offset in part by higher payroll-related costs of $3.6 million due to additional staffing. 2023 Compared to 2022 Our revenue increased $65.9 million in 2023, largely the result of EDGE-related pricing initiatives on all product lines, which together contributed $52.0 million.
In addition, our selling, general and administrative expenses decreased $5.3 million due to the absence of a non-cash asset impairment in 2023 of $5.8 million on certain aggregate sites, as discussed in Item 8 - Note 2; higher gains on the sale of equipment; lower bad debt expenses, offset in part by higher payroll-related costs due to additional staffing.
Results of Operations – Mountain Years ended December 31, 2024 2023 2022 2024 vs 2023 % change 2023 vs 2022 % change (In millions) Revenue $ 663.1 $ 634.0 $ 542.0 5 % 17 % EBITDA $ 113.5 $ 103.2 $ 72.6 10 % 42 % EBITDA margin 17.1 % 16.3 % 13.4 % 48 Index 2024 2023 2022 (In millions) Revenues: Aggregates $ 101.8 $ 100.5 $ 83.3 Ready-mix concrete 117.1 120.5 106.7 Asphalt 120.9 112.9 93.3 Contracting services 459.0 433.0 368.7 Internal sales (135.7) (132.9) (110.0) $ 663.1 $ 634.0 $ 542.0 2024 Compared to 2023 Our revenue increased $29.1 million in 2024, primarily from an increase in Idaho public agency construction work and airport work, which drove increases in both contracting services revenue and asphalt volumes.
Results of Operations – Mountain Years ended December 31, 2025 2024 2023 2025 vs 2024 % change 2024 vs 2023 % change (In millions) Revenue $ 644.0 $ 663.1 $ 634.0 (3) % 5 % EBITDA $ 99.6 $ 113.5 $ 103.2 (12) % 10 % EBITDA margin 15.5 % 17.1 % 16.3 % 2025 2024 2023 (In millions) Revenues: Aggregates $ 95.2 $ 101.8 $ 100.5 Ready-mix concrete 124.6 117.1 120.5 Asphalt 99.0 120.9 112.9 Contracting services 435.7 459.0 433.0 Internal sales (110.5) (135.7) (132.9) $ 644.0 $ 663.1 $ 634.0 2025 Compared to 2024 Our revenue decreased $19.1 million in 2025, primarily due to decreased contracting services work in Montana and Wyoming, which also contributed to lower aggregate and asphalt volumes of $12.7 million and $9.2 million, respectively.
Non-GAAP Financial Measures This Annual Report includes financial information prepared in accordance with GAAP, as well as EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin, as well as total segment measures, as applicable, that are considered non-GAAP measures of financial performance. These non-GAAP financial measures are not measures of financial performance under GAAP.
Unforeseen events and changes in circumstances could require the recognition of impairment losses at some future date. 54 Index Non-GAAP Financial Measures This Annual Report includes financial information prepared in accordance with GAAP, as well as EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin, as well as total segment measures, as applicable, that are considered non-GAAP measures of financial performance.
The increase in cash flows provided by financing activities from 2023 to 2022 was largely related to the changes in debt as a result of the Separation, which included the issuance of senior notes, term loans and a revolving credit facility, and a transfer of the majority of the proceeds to Centennial. 55 Index Material Cash Requirements For more information on our contractual obligations on long-term debt, operating leases and purchase commitments, see Item 8 - Notes 9, 10 and 18.
The increase in cash flows used in financing activities from 2024 to 2023 was largely related to changes in our debt structure in 2023 as a result of the Separation, which included the issuance of senior notes, term loans, and a revolving credit facility and a transfer of the majority of the proceeds to Centennial.
All intercompany balances and transactions between the businesses comprising Knife River have been eliminated in the accompanying audited consolidated financial statements. 39 Index Market Conditions and Outlook Our markets remain resilient, and construction activity remains generally strong. Approximately 80 percent of our contracting services revenue each year comes from public-sector projects, enhancing stability through market cycles.
Prior periods have been recast to conform to the current reportable segment presentation. 35 Index Market Conditions and Outlook Our markets remain resilient, and construction activity remains generally strong. Approximately 80 percent of our contracting services revenue each year comes from public-sector projects, enhancing stability through market cycles.
In addition, improved pricing on ready-mix concrete and aggregates provided $38.1 million more in revenue. Offsetting the increases were a decrease 47 Index in ready-mix and aggregates sales volumes due to EDGE-related pricing initiatives and lower demand in the residential and commercial markets. We saw an increase in both EBITDA of $28.7 million and EBITDA margin of 340 basis points.
Partially offsetting the increases were lower aggregate and ready-mix sales volumes due to EDGE-related pricing initiatives and lower demand in the residential and commercial markets. We saw an increase in EBITDA of $32.4 million and EBITDA margin of 200 basis points in 2024.
If the fair value of a reporting unit exceeds its carrying value, the goodwill of the reporting unit is not impaired. If the carrying value of a reporting unit exceeds its fair value, we must record an impairment loss for the amount that the carrying value of the reporting unit, including goodwill, exceeds the fair value of the reporting unit.
If the 53 Index carrying value of a reporting unit exceeds its fair value, we must record an impairment loss for the amount that the carrying value of the reporting unit, including goodwill, exceeds the fair value of the reporting unit. For the years ended December 31, 2025, 2024 and 2023, there were no impairment losses recorded.
Contracting services backlog was as follows as of December 31: 2024 2023 2022 (In millions) Pacific $ 100.9 $ 51.2 $ 72.2 Northwest 129.3 196.2 210.7 Mountain 339.9 256.7 313.5 Central 175.5 158.1 222.5 Total $ 745.6 $ 662.2 $ 818.9 Backlog as of December 31, 2024, is 13 percent higher than the prior period and expected margins are comparable.
Contracting services backlog was as follows as of December 31: 2025 2024 2023 (In millions) West $ 203.6 $ 230.2 $ 247.4 Mountain 395.7 339.9 256.7 Central 432.8 175.5 158.1 Total $ 1,032.1 $ 745.6 $ 662.2 Backlog as of December 31, 2025, was 38 percent percent higher than the prior period with lower expected margins.
When determining if the variable consideration is constrained, we consider if factors exist that could increase the likelihood or the magnitude of a potential reversal of revenue. We update our estimate of the transaction price each reporting period and the effect of variable consideration on the transaction price is recognized as an adjustment to revenue on a cumulative catch-up basis.
We update our estimate of the transaction price each reporting period and the effect of variable consideration on the transaction price is recognized as an adjustment to revenue on a cumulative catch-up basis. 52 Index We believe our estimates surrounding the cost-to-cost method are reasonable based on the information that is known when the estimates are made.
Revenues EBITDA 1 EBITDA margin 1 2024 2023 2022 2024 2023 2022 2024 2023 2022 (In millions) Pacific $ 493.1 $ 462.2 $ 418.1 $ 59.9 $ 56.2 $ 44.0 12.1 % 12.2 % 10.5 % Northwest 692.4 666.1 600.2 149.8 121.1 103.9 21.6 % 18.2 % 17.3 % Mountain 663.1 634.0 542.0 113.5 103.2 72.6 17.1 % 16.3 % 13.4 % Central 818.1 825.0 779.8 131.6 116.6 86.6 16.1 % 14.1 % 11.1 % Energy Services 275.7 292.3 238.4 60.2 78.1 28.3 21.8 % 26.7 % 11.9 % Segment totals 2,942.4 2,879.6 2,578.5 515.0 475.2 335.4 17.5 % 16.5 % 13.0 % Corporate Services and Eliminations (43.4) (49.3) (43.8) (60.7) (53.2) (28.7) N.M.
Revenues EBITDA 1 EBITDA margin 1 2025 2024 2023 2025 2024 2023 2025 2024 2023 (In millions) West $ 1,210.1 $ 1,185.3 $ 1,128.3 $ 234.1 $ 209.7 $ 177.3 19.3 % 17.7 % 15.7 % Mountain 644.0 663.1 634.0 99.6 113.5 103.2 15.5 % 17.1 % 16.3 % Central 1,004.8 818.1 825.0 159.6 131.6 116.6 15.9 % 16.1 % 14.1 % Energy Services 338.0 275.7 292.3 54.9 60.2 78.1 16.2 % 21.8 % 26.7 % Segment totals 3,196.9 2,942.2 2,879.6 548.2 515.0 475.2 17.1 % 17.5 % 16.5 % Corporate Services and Eliminations (50.9) (43.2) (49.3) (63.9) (60.7) (53.2) N.M.
In addition, in the first half of 2025 we expect to enter into a new senior secured Term Loan B facility of $500 million, increase the total commitments under our existing revolving credit facility from $350 million to $500 million and extend the maturity date of our existing senior secured credit facilities from 2028 to 2030.
On March 7, 2025, we entered into an amendment to our senior secured credit agreement to increase our revolving credit facility from $350 million to $500 million and extend the maturity to March 7, 2030, refinance our existing $275 million Term Loan A with a maturity of March 7, 2030, and provide for a new Term Loan B in an aggregate principal amount of $500.0 million with a maturity date of March 8, 2032.
In addition, the timing of insurance costs associated with the captive insurer had a positive impact on cash. 54 Index Investing activities Years ended December 31, 2024 2023 2022 (In millions) Capital expenditures $ (172.4) $ (124.3) $ (178.2) Acquisitions, net of cash acquired (131.0) — 1.7 Net proceeds from sale or disposition of property and other 12.0 8.3 22.9 Investments (3.4) (1.9) (2.3) Net cash used in investing activities $ (294.8) $ (117.9) $ (155.9) The increase in cash used in investing activities from 2024 to 2023 was primarily due to the completion of six acquisitions in 2024 and higher capital expenditures, including a liquid asphalt expansion project, aggregate reserve replacements and routine replacement of construction equipment.
Investing activities Years ended December 31, 2025 2024 2023 (In millions) Capital expenditures $ (348.1) $ (172.4) $ (124.3) Acquisitions, net of cash acquired (610.0) (131.0) — Net proceeds from sale or disposition of property and other 47.5 12.0 8.3 Investments (3.1) (3.4) (1.9) Net cash used in investing activities $ (913.7) $ (294.8) $ (117.9) The increase in cash used in investing activities from 2025 to 2024 was primarily due to additional investments to grow our company.
Our management team continually monitors our margins and has been proactive in applying strategies to increase margins to support our long-term profitability goals and to create shareholder value.
It is estimated that a total of $2.2 trillion in funding will be needed for our roadway systems to reach a state of good repair during that time period. Profitability . Our management team continually monitors our margins and has been proactive in applying strategies to increase margins to support our long-term profitability goals and to create shareholder value.
For the years ended December 31, 2024, 2023 and 2022, there were no impairment losses recorded. At October 31, 2024, the fair value of each of our reporting units substantially exceeded the carrying value.
At October 31, 2025, the fair value of each of our reporting units substantially exceeded the carrying value.
In addition, selling, general and administrative expenses increased $3.2 million, largely due the absence of asset sale gains in 2023 and higher payroll-related costs. 2023 Compared to 2022 Our revenue improved $92.0 million in 2023, 70 percent of which was derived from contracting services from strong demand for public agency, airport and commercial work throughout the region.
In addition, selling, general and administrative expenses increased $3.2 million, largely due the absence of asset sale gains in 2023 and higher payroll-related costs.
Results of Operations – Northwest Years ended December 31, 2024 2023 2022 2024 vs 2023 % change 2023 vs 2022 % change (In millions) Revenue $ 692.4 $ 666.1 $ 600.2 4 % 11 % EBITDA $ 149.8 $ 121.1 $ 103.9 24 % 17 % EBITDA margin 21.6 % 18.2 % 17.3 % 2024 2023 2022 (In millions) Revenues: Aggregates $ 184.8 $ 189.9 $ 171.6 Ready-mix concrete 167.8 163.4 158.0 Asphalt 104.6 103.3 97.3 Other* 18.1 15.8 14.8 Contracting services 324.8 300.4 262.7 Internal sales (107.7) (106.7) (104.2) $ 692.4 $ 666.1 $ 600.2 __________________ * Other includes merchandise, transportation services and other products that individually are not considered to be a major line of business for the segment. 2024 Compared to 2023 Our revenue increased $26.3 million in 2024, most of which was due to large public agency-related construction projects driving an increase in contracting services and asphalt sales volumes.
Results of Operations – West Years ended December 31, 2025 2024 2023 2025 vs 2024 % change 2024 vs 2023 % change (In millions) Revenue $ 1,210.1 $ 1,185.3 $ 1,128.3 2 % 5 % EBITDA $ 234.1 $ 209.7 $ 177.3 12 % 18 % EBITDA margin 19.3 % 17.7 % 15.7 % 2025 2024 2023 (In millions) Revenues: Aggregates $ 296.3 $ 297.1 $ 294.7 Ready-mix concrete 346.7 313.6 305.7 Asphalt 131.8 135.3 135.5 Other* 177.2 167.4 158.5 Contracting services 470.4 466.7 426.7 Internal sales (212.3) (194.8) (192.8) $ 1,210.1 $ 1,185.3 $ 1,128.3 __________________ * Other includes merchandise, transportation services and other products that individually are not considered to be a major line of business for the segment. 2025 Compared to 2024 Our revenue increased $24.8 million in 2025, as a result of more available public-agency and private contracting services work as well as increased ready-mix concrete volumes and pricing in our California market compared to prior year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+2 added−1 removed2 unchanged
Biggest changeWhile we generally use price increases, escalation clauses in construction services contracts, fuel surcharges and purchase commitments to mitigate the impacts of higher costs, these measures may not be sufficient to offset these increased costs. For the year ended December 31, 2024, our costs associated with diesel fuel, liquid asphalt and cement were $394.7 million.
Biggest changeCommodity price risk We are subject to commodity price risk with respect to price changes in diesel fuel, liquid asphalt and cement. While we generally use price increases, escalation clauses in construction services contracts, fuel surcharges and purchase commitments to mitigate the impacts of higher costs, these measures may not be sufficient to offset these increased costs.
As of December 31, 2024, the rate in effect was 6.18 percent, therefore, a hypothetical increase of 1.00 percent to the interest rate at December 31, 2024, would have increased the all-in rate to 7.18 percent, the effect of which would increase our interest expense by $2.6 million over the next 12 months based on the balances outstanding for these borrowings as of December 31, 2024.
As of December 31, 2025, the rate in effect was 5.63 percent, therefore, a hypothetical increase of 1.00 percent to the interest rate at December 31, 2025, would have increased the all-in rate to 6.63 percent, the effect of which would increase our interest expense by $7.6 million over the next 12 months based on the balances outstanding for these borrowings as of December 31, 2025.
We may take advantage of interest rate swap agreements in the future to minimize our interest rate risk. For additional information on our long-term debt, see Item 8 - Notes 8 and 9.
We may take advantage of interest rate swap agreements in the future to minimize our interest rate risk. For additional information on our long-term debt, see Item 8 - Notes 8 and 9. At December 31, 2025 and 2024, we had no outstanding interest rate hedges.
Interest rate risk As of December 31, 2024, we had $264.7 million in term loans outstanding which bear interest at a variable rate.
Interest rate risk As of December 31, 2025, we had $756.0 million in term loans outstanding which bear interest at a variable rate.
Accordingly, a hypothetical 10 percent increase or decrease would have increased or decreased, respectively, our operating results over the next 12 months by $39.5 million based on the costs associated with diesel fuel, liquid asphalt and cement for the year ended December 31, 2024. 62 Index
Accordingly, a hypothetical 10 percent increase or decrease could increase or decrease, respectively, our operating results over the next 12 months by $67.3 million based on the costs associated with diesel fuel, liquid asphalt and cement for the year ended December 31, 2025. 56 Index Equity price risk We are exposed to price fluctuations in equity markets, primarily through our defined benefit pension plan assets and other equity security investments.
Removed
At December 31, 2024 and 2023, we had no outstanding interest rate hedges. 61 Index Commodity price risk We are subject to commodity price risk with respect to price changes in diesel fuel, liquid asphalt and cement.
Added
For the year ended December 31, 2025, our costs associated with diesel fuel, liquid asphalt and cement were $672.8 million.
Added
The equity securities held by the pension plan and in such accounts are diversified to achieve broad market participation and reduce the impact of any single investment, sector or geographic region. We have established asset allocation targets for the pension plan holdings, which are described in Item 8 - Note 17. 57 Index

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