Knife River Corp 10-Q for FY2026 Q3
Knife River Corp (KNF)
10-Q
2026-11-03
For: 2026-09-30
View Original
Added on
November 04, 2026
About this 10-Q
Knife River Corp filed this 10-Q on November 3, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
Knife River reported third-quarter revenue growth of $71.9 million, but nine-month net income fell 18% to $102.6 million as contracting margins compressed. Backlog totaled $857 million at September 30, 2026, with approximately $691 million expected within 12 months. AI summary
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.28B
- up 6.0% from $1.2B a year earlier
- Net income
- $137.88M
- down 3.7% from net income of $143.15M a year earlier
- Diluted EPS
- $2.43
- down 3.6% from $2.52 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2026
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _____________ to ______________
Commission file number 1-41642
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices)
(Zip Code)
(701 ) 530-1400
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐.
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
☒ | Accelerated Filer | ☐ | |||||||||
Non-Accelerated Filer | ☐ | Smaller Reporting Company | |||||||||
Emerging Growth Company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ .
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of October 29, 2026: 56,763,420 shares.
| Index | |||||
| Page | |||||
Unless otherwise stated or the context otherwise requires, references in this report to “Knife River,” the “Company,” “we,” “our,” or “us” refer to Knife River Corporation and its consolidated subsidiaries.
2
Introduction
Knife River is an aggregates-based, vertically integrated construction materials and contracting services company with 1.3 billion tons of aggregates reserves as of December 31, 2025. About 35 percent of these aggregates support internal production of ready-mix concrete, asphalt, and various contracting services, including heavy-civil and concrete construction. Our company targets mid-size, higher-growth markets and is dedicated to growth and stakeholder value through our core values: People, Safety, Quality, and the Environment.
We supply construction materials and contracting services in the United States and operate across 15 states, mainly serving public-sector infrastructure projects like highways and bridges. Our access to high-quality aggregates supports our vertically integrated model, allowing us to share resources and maximize efficiency. Products are transported by truck, rail, or barge, depending on the market. Strategically located aggregates sites, plants, and a large fleet help us serve customers effectively. This integrated approach provides scale, efficiency, and operational excellence, benefiting customers, shareholders, and communities.
Our business is organized into four operating segments, each of which is also a reportable segment. Three of the reportable segments are aligned by key geographic areas, West, Mountain and Central. Each geographic segment offers a vertically integrated suite of products and services, including aggregates, ready-mix concrete, asphalt and contracting services. The Energy Services segment, which has locations throughout our geographic footprint, produces and supplies liquid asphalt and related services, primarily for use in asphalt road construction. For more information on our business segments, see Note 15 of the Notes to Consolidated Financial Statements.
3
Part I -- Financial Information
Item 1. Financial Statements
Knife River Corporation | ||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| (In thousands, except per share amounts) | ||||||||||||||
| Revenue: | ||||||||||||||
| Construction materials | $ | $ | $ | $ | ||||||||||
| Contracting services | ||||||||||||||
| Total revenue | ||||||||||||||
| Cost of revenue: | ||||||||||||||
| Construction materials | ||||||||||||||
| Contracting services | ||||||||||||||
| Total cost of revenue | ||||||||||||||
| Gross profit | ||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||
| Operating income | ||||||||||||||
| Interest expense | ||||||||||||||
| Other (expense) income | ( | |||||||||||||
| Income before income taxes | ||||||||||||||
| Income tax expense | ||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||
| Net income per share | ||||||||||||||
| Basic | $ | $ | $ | $ | ||||||||||
| Diluted | $ | $ | $ | $ | ||||||||||
| Weighted average common shares outstanding: | ||||||||||||||
| Basic | ||||||||||||||
| Diluted | ||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
4
| Knife River Corporation | |||||||||||||||||
| Consolidated Statements of Comprehensive Income | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||
| (In thousands) | |||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||
| Other comprehensive income: | |||||||||||||||||
| Postretirement liability adjustment: | |||||||||||||||||
Amortization of postretirement liability losses included in net periodic benefit cost, net of tax of $ | |||||||||||||||||
| Postretirement liability adjustment | |||||||||||||||||
| Other comprehensive income | |||||||||||||||||
| Comprehensive income attributable to common stockholders | $ | $ | $ | $ | |||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
5
| Knife River Corporation | |||||||||||
| Consolidated Balance Sheets | |||||||||||
| (Unaudited) | |||||||||||
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||
| (In thousands, except shares and per share amounts) | |||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash, cash equivalents and restricted cash | $ | $ | $ | ||||||||
| Receivables, net | |||||||||||
Contract assets | |||||||||||
| Inventories | |||||||||||
| Prepayments and other current assets | |||||||||||
| Total current assets | |||||||||||
| Noncurrent assets: | |||||||||||
| Net property, plant and equipment | |||||||||||
| Goodwill | |||||||||||
| Other intangible assets, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Investments and other | |||||||||||
| Total noncurrent assets | |||||||||||
| Total assets | $ | $ | $ | ||||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities: | |||||||||||
| Long-term debt - current portion | $ | $ | $ | ||||||||
| Accounts payable | |||||||||||
| Accrued compensation | |||||||||||
Contract liabilities | |||||||||||
| Accrued interest | |||||||||||
| Other taxes payable | |||||||||||
| Current operating lease liabilities | |||||||||||
| Other accrued liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Noncurrent liabilities: | |||||||||||
| Long-term debt | |||||||||||
| Deferred income taxes | |||||||||||
| Noncurrent operating lease liabilities | |||||||||||
| Other | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies | |||||||||||
| Stockholders' equity: | |||||||||||
Common stock, | |||||||||||
| Other paid-in capital | |||||||||||
| Retained earnings | |||||||||||
Treasury stock held at cost - | ( | ( | ( | ||||||||
| Accumulated other comprehensive loss | ( | ( | ( | ||||||||
| Total stockholders' equity | |||||||||||
| Total liabilities and stockholders' equity | $ | $ | $ | ||||||||
The accompanying notes are an integral part of these consolidated financial statements.
6
| Knife River Corporation | ||||||||||||||||||||||||||||||||
| Consolidated Statements of Equity | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
| Common Stock | Other Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | ||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Total | ||||||||||||||||||||||||||||
| (In thousands, except shares) | ||||||||||||||||||||||||||||||||
At December 31, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||
| Net loss | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||
Common stock issued for employee compensation, net of tax withholding | ( | — | — | — | — | ( | ||||||||||||||||||||||||||
| At March 31, 2026 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||
Common stock issued for board of director fees | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| At June 30, 2026 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||
| At September 30, 2026 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
7
| Knife River Corporation | ||||||||||||||||||||||||||||||||
| Consolidated Statements of Equity | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
| Common Stock | Other Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | ||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Total | ||||||||||||||||||||||||||||
| (In thousands, except shares) | ||||||||||||||||||||||||||||||||
At December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||
| Net loss | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||
| Common stock issued for employee compensation, net of tax withholding | ( | — | — | — | — | ( | ||||||||||||||||||||||||||
At March 31, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||
Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||
Common stock issued for board of director fees | — | — | — | — | — | — | — | |||||||||||||||||||||||||
| At June 30, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | — | ||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||
| At September 30, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
8
| Knife River Corporation | ||||||||
| Consolidated Statements of Cash Flows | ||||||||
| (Unaudited) | ||||||||
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2026 | 2025 | |||||||
| (In thousands) | ||||||||
| Operating activities: | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation, depletion and amortization | ||||||||
| Deferred income taxes | ||||||||
| Provision for credit losses | ||||||||
| Amortization of debt issuance costs | ||||||||
| Employee stock-based compensation costs | ||||||||
| Pension and postretirement benefit plan net periodic benefit cost | ||||||||
| Unrealized gains on investments | ( | ( | ||||||
| Gains on sales of assets | ( | ( | ||||||
| Gains on bargain purchases | ( | ( | ||||||
| Equity in earnings of unconsolidated affiliates | ( | ( | ||||||
| Changes in current assets and liabilities, net of acquisitions: | ||||||||
| Receivables | ( | ( | ||||||
| Inventories | ( | ( | ||||||
| Other current assets | ||||||||
| Accounts payable | ||||||||
| Other current liabilities | ||||||||
| Pension and postretirement benefit plan contributions | ( | ( | ||||||
| Other noncurrent changes | ||||||||
| Net cash provided by operating activities | ||||||||
| Investing activities: | ||||||||
| Capital expenditures | ( | ( | ||||||
| Acquisitions, net of cash acquired | ( | ( | ||||||
| Net proceeds from sale or disposition of property and other | ||||||||
| Investments | ( | ( | ||||||
| Net cash used in investing activities | ( | ( | ||||||
| Financing activities: | ||||||||
| Issuance of long-term debt | ||||||||
| Repayment of long-term debt | ( | ( | ||||||
| Debt issuance costs | ( | ( | ||||||
Tax withholding on stock-based compensation | ( | ( | ||||||
| Net cash provided by financing activities | ||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | ( | |||||||
| Cash, cash equivalents and restricted cash -- beginning of year | ||||||||
| Cash, cash equivalents and restricted cash -- end of period | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
9
Knife River Corporation
Notes to Consolidated
Financial Statements
September 30, 2026 and 2025
(Unaudited)
Note 1 - Background
At Knife River, we are a people-first construction materials and contracting services company. We provide construction materials and contracting services to build safe roads, bridges, airport runways and other critical infrastructure needs that connect people with where they want to go and with the supplies they need. We are one of the leading providers of crushed stone and sand and gravel in the United States and operate across 15 states. We conduct our operations through four reportable segments: West, Mountain, Central and Energy Services.
Note 2 - Basis of Presentation
All revenues and costs, as well as assets and liabilities, directly associated with our business activities are included in the consolidated financial statements. General corporate expenses are included in the Consolidated Statements of Operations within selling, general and administrative expenses and other income.
On March 7, 2025, we acquired Strata Corporation (Strata), a leading construction materials and contracting services provider in North Dakota and northwestern Minnesota. The purchase price for Strata totaled $454.0 million and was subject to post-closing adjustments. The results of operations and balance sheet accounts for Strata are included in the consolidated financial statements from the date of acquisition.
In December 2025, we reclassified our retention receivables of $42.8 million on a contract-by-contract basis from accounts receivable. The reclassification resulted in an increase to contract assets of $31.8 million and a decrease to contract liabilities of $11.0 million. This reclassification was due to FASB’s clarification of retention receivables under ASC 606 and was applied on a prospective basis. Prior years quarters were not revised.
Management has also evaluated the impact of events occurring after September 30, 2026, up to the date of issuance of these consolidated interim financial statements on November 3, 2026, that would require recognition or disclosure in the Consolidated Financial Statements.
Principles of consolidation
For all periods, the consolidated financial statements were prepared in accordance with GAAP and include the accounts of Knife River and our wholly owned subsidiaries. All intercompany accounts and transactions between our businesses have been eliminated in the accompanying consolidated financial statements.
Use of estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Estimates are used for items such as long-lived assets and goodwill; fair values of acquired assets and liabilities assumed under the acquisition method of accounting; aggregates reserves; property depreciable lives; tax provisions; revenue recognized using the cost-to-cost measure of progress for contracts; expected credit losses; environmental and other loss contingencies; costs on contracting services contracts; actuarially determined benefit costs; asset retirement obligations; present value of right-of-use assets and lease liabilities; and the valuation of stock-based compensation. These estimates are based on management’s best knowledge of current events, historical experience, actions that we may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. As additional information becomes available, or actual amounts are determinable, the recorded estimates are revised. Consequently, operating results can be affected by revisions to prior accounting estimates.
10
Cash, cash equivalents and restricted cash
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||
| (In thousands) | |||||||||||
Cash and cash equivalents | $ | $ | $ | ||||||||
Restricted cash | |||||||||||
Cash, cash equivalents and restricted cash | $ | $ | $ | ||||||||
Seasonality of operations
Some of our operations are seasonal and revenues from, and certain expenses for, such operations may fluctuate significantly among quarterly periods, with lower activity in the winter months and higher activity in the summer months. Accordingly, the interim results for particular segments, and for Knife River as a whole, may not be indicative of results for the full fiscal year or other future periods.
Note 3 - New Accounting Standards
The following table provides a brief description of the accounting pronouncements applicable to us and the potential impact on our consolidated financial statements and/or disclosures:
| Standard | Description | Standard Effective Date | Impact on financial statements/disclosures | ||||||||
Recently issued ASU's not yet adopted | |||||||||||
ASU 2024-03 -Disaggregation of Income Statement Expenses | In November 2024, the FASB issued guidance on modifying the disclosure requirements to improve the disclosures for a public entity's expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. The guidance is to be applied either on a prospective basis to the financial statements issued for reporting periods after the effective date or on a retrospective basis to the financial statements to all prior periods presented in the financial statements. Early adoption is permitted. | Annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. | We are currently evaluating the impact the guidance will have on our disclosures for the year ended December 31, 2027 and interim periods for fiscal year 2028. | ||||||||
ASU 2025-06 - Targeted Improvements to the Accounting for Internal-Use Software | In September 2025, the FASB issued guidance to provide targeted improvements to the accounting for internal-use software which is intended to modernize the recognition and capitalization framework to reflect current software development practices. Under this guidance, eligible software development costs will begin capitalization when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. | Annual reporting periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. | We are currently evaluating the impact this guidance will have on our financial statements and disclosures. | ||||||||
Note 4 - Receivables and Allowance for Expected Credit Losses
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||
| (In thousands) | |||||||||||
| Trade receivables | $ | $ | $ | ||||||||
| Contract receivables | |||||||||||
| Receivables, gross | |||||||||||
| Less expected credit loss | |||||||||||
| Receivables, net | $ | $ | $ | ||||||||
Our expected credit losses are determined through a review using historical credit loss experience; changes in asset specific characteristics; current conditions; and reasonable and supportable future forecasts, among other specific account data, and is
11
Details of our expected credit losses were as follows:
| West | Mountain | Central | Energy Services | Total | |||||||||||||
(In thousands) | |||||||||||||||||
As of December 31, 2025 | $ | $ | $ | $ | $ | ||||||||||||
Current expected credit loss provision | ( | ||||||||||||||||
| Less write-offs charged against the allowance | |||||||||||||||||
At March 31, 2026 | $ | $ | $ | $ | $ | ||||||||||||
| Current expected credit loss provision | |||||||||||||||||
| Less write-offs charged against the allowance | |||||||||||||||||
| At June 30, 2026 | $ | $ | $ | $ | $ | ||||||||||||
| Current expected credit loss provision | ( | ( | |||||||||||||||
| Less write-offs charged against the allowance | |||||||||||||||||
| At September 30, 2026 | $ | $ | $ | $ | $ | ||||||||||||
| West | Mountain | Central | Energy Services | Total | |||||||||||||
(In thousands) | |||||||||||||||||
| As of December 31, 2024 | $ | $ | $ | $ | $ | ||||||||||||
| Current expected credit loss provision | |||||||||||||||||
| Less write-offs charged against the allowance | |||||||||||||||||
At March 31, 2025 | $ | $ | $ | $ | $ | ||||||||||||
| Current expected credit loss provision | ( | ||||||||||||||||
| Less write-offs charged against the allowance | ( | ( | ( | ||||||||||||||
| At June 30, 2025 | $ | $ | $ | $ | $ | ||||||||||||
| Current expected credit loss provision | |||||||||||||||||
| Less write-offs charged against the allowance | |||||||||||||||||
| At September 30, 2025 | $ | $ | $ | $ | $ | ||||||||||||
Note 5 - Inventories
Inventories on the Consolidated Balance Sheets were as follows:
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||
| (In thousands) | |||||||||||
| Finished products | $ | $ | $ | ||||||||
| Raw materials | |||||||||||
| Supplies and parts | |||||||||||
| Total | $ | $ | $ | ||||||||
Inventories are valued at the lower of cost or net realizable value using the average cost method. Inventories include production costs incurred as part of our aggregates mining activities. These inventoriable production costs include all mining and processing costs associated with the production of aggregates. Stripping costs incurred during the production phase, which represent costs of removing overburden and waste materials to access mineral deposits, are a component of inventoriable production costs.
12
Note 6 - Net Income Per Share
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| (In thousands, except per share amounts) | ||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||
| Weighted average common shares outstanding - basic | ||||||||||||||
Effect of dilutive performance shares and restricted stock units | ||||||||||||||
| Weighted average common shares outstanding - diluted | ||||||||||||||
| Shares excluded from the calculation of diluted income per share | ||||||||||||||
| Net income per share - basic | $ | $ | $ | $ | ||||||||||
| Net income per share - diluted | $ | $ | $ | $ | ||||||||||
Note 7 - Accumulated Other Comprehensive Loss
Comprehensive income is comprised of net income and other comprehensive income. The only component of other comprehensive income is the amortization of postretirement liability losses for our benefit plans. As of September 30, 2026 and 2025, and December 31, 2025, accumulated other comprehensive loss was $9.9 million, $9.1 million and $10.3 million, respectively.
For the three months ended September 30, 2026 and 2025, we amortized $127,000 and $63,000 , respectively, of expense into other income, and $41,000 and $21,000 , respectively, into income taxes. For the nine months ended September 30, 2026 and 2025, we amortized $381,000 and $190,000 , respectively, of expense into other income, and $123,000 and $61,000 , respectively, into income taxes.
Note 8 - Revenue from Contracts with Customers
Revenue is recognized when a performance obligation is satisfied by transferring control over a product or service to a customer. Revenue includes revenue from the sales of construction materials and contracting services. Revenue is measured based on consideration specified in a contract with a customer and excludes any sales incentives and amounts collected on behalf of third parties. We are considered an agent for certain taxes collected from customers. As such, we present revenues net of these taxes at the time of sale to be remitted to governmental authorities, including sales and use taxes. 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.
13
Disaggregation
In the following tables, revenue is disaggregated by category for each segment and includes sales of materials to both third parties and internal customers. Due to consolidation requirements, the internal sales revenues must be eliminated against the construction materials product used in downstream materials and contracting services to arrive at the external operating revenues. We believe this level of disaggregation best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. For more information on the Company’s reportable segments, see Note 15.
| Three Months Ended September 30, 2026 | West | Mountain | Central | Energy Services | Corporate Services and Eliminations | Total | ||||||||||||||
(In thousands) | ||||||||||||||||||||
| Aggregates | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Ready-mix concrete | ||||||||||||||||||||
| Asphalt | ||||||||||||||||||||
Liquid asphalt | ||||||||||||||||||||
| Other | ||||||||||||||||||||
| Contracting services public-sector | ||||||||||||||||||||
| Contracting services private-sector | ||||||||||||||||||||
| Internal sales | ( | ( | ( | ( | ( | ( | ||||||||||||||
Revenues from contracts with customers | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Three Months Ended September 30, 2025 | West | Mountain | Central | Energy Services | Corporate Services and Eliminations | Total | ||||||||||||||
(In thousands) | ||||||||||||||||||||
| Aggregates | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Ready-mix concrete | ||||||||||||||||||||
| Asphalt | ||||||||||||||||||||
Liquid asphalt | ||||||||||||||||||||
| Other | ||||||||||||||||||||
| Contracting services public-sector | ||||||||||||||||||||
| Contracting services private-sector | ||||||||||||||||||||
| Internal sales | ( | ( | ( | ( | ( | ( | ||||||||||||||
Revenues from contracts with customers | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Nine Months Ended September 30, 2026 | West | Mountain | Central | Energy Services | Corporate Services and Eliminations | Total | ||||||||||||||
(In thousands) | ||||||||||||||||||||
| Aggregates | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Ready-mix concrete | ||||||||||||||||||||
| Asphalt | ||||||||||||||||||||
Liquid asphalt | ||||||||||||||||||||
| Other | ||||||||||||||||||||
| Contracting services public-sector | ||||||||||||||||||||
| Contracting services private-sector | ||||||||||||||||||||
| Internal sales | ( | ( | ( | ( | ( | ( | ||||||||||||||
Revenues from contracts with customers | $ | $ | $ | $ | $ | $ | ||||||||||||||
14
| Nine Months Ended September 30, 2025 | West | Mountain | Central | Energy Services | Corporate Services and Eliminations | Total | ||||||||||||||
(In thousands) | ||||||||||||||||||||
| Aggregates | $ | $ | $ | $ | $ | $ | ||||||||||||||
| Ready-mix concrete | ||||||||||||||||||||
| Asphalt | ||||||||||||||||||||
Liquid asphalt | ||||||||||||||||||||
| Other | ||||||||||||||||||||
| Contracting services public-sector | ||||||||||||||||||||
| Contracting services private-sector | ||||||||||||||||||||
| Internal sales | ( | ( | ( | ( | ( | ( | ||||||||||||||
Revenues from contracts with customers | $ | $ | $ | $ | $ | $ | ||||||||||||||
Note 9 - Uncompleted Contracts
The timing of revenue recognition may differ from the timing of invoicing to customers. The timing of invoicing to customers does not necessarily correlate with the timing of revenues being recognized under the cost-to-cost method of accounting. Contracts from contracting services are billed as work progresses in accordance with agreed upon contractual terms. Generally, billing to the customer occurs contemporaneous to revenue recognition. A variance in timing of the billings may result in a contract asset or a contract liability. A contract asset occurs when revenues are recognized under the cost-to-cost measure of progress, which exceeds amounts billed on uncompleted contracts. Such amounts will be billed as standard contract terms allow, usually based on various measures of performance or achievement. A contract liability occurs when there are billings in excess of revenues recognized under the cost-to-cost measure of progress on uncompleted contracts. Contract liabilities decrease as revenue is recognized from the satisfaction of the related performance obligation.
The changes in contract assets and liabilities were as follows:
| September 30, 2026 | December 31, 2025 | Change | |||||||||
| (In thousands) | |||||||||||
| Contract assets | $ | $ | $ | ||||||||
| Contract liabilities | ( | ( | |||||||||
Net contract assets | $ | $ | $ | ||||||||
| September 30, 2025 | December 31, 2024 | Change | |||||||||
| (In thousands) | |||||||||||
Contract assets1 | $ | $ | $ | ||||||||
Contract liabilities1 | ( | ( | ( | ||||||||
| Net contract assets (liabilities) | $ | $ | ( | $ | |||||||
1.Following the issuance of the FASB Staff Educational Paper on Topic 606: Presentation and Disclosure of Retainage for Construction Contractors, we have reclassed retention receivables on a contract-by-contract basis from accounts receivable to contract assets and liabilities. The change in presentation was on a prospective basis beginning with balances as of December 31, 2025 | |||||||||||
We recognized $2.7 million and $31.1 million in revenue for the three and nine months ended September 30, 2026, respectively, which was previously included in contract liabilities at December 31, 2025. The change in the contract assets balance between December 31, 2025 and September 30, 2026 is a result of acquisitions and an increase in contracting services activity. We recognized $2.0 million and $39.9 million in revenue for the three and nine months ended September 30, 2025, respectively, which was previously included in contract liabilities at December 31, 2024.
We recognized a net increase in revenues of $7.7 million and $8.7 million for the three and nine months ended September 30, 2026, respectively, from performance obligations satisfied in prior periods. We recognized a net increase in revenues of $11.8 million and $24.1 million for the three and nine months ended September 30, 2025, respectively, from performance obligations satisfied in prior periods.
15
Remaining performance obligations
The remaining performance obligations, also referred to as backlog, include unrecognized revenues that we reasonably expect to be realized. These unrecognized revenues can include: projects that have a written award, a letter of intent, a notice to proceed, an agreed upon work order to perform work on mutually accepted terms and conditions, and change orders or claims to the extent management believes additional contract revenues will be earned and are deemed probable of collection. The majority of our contracts for contracting services have an original duration of less than one year.
At September 30, 2026, our remaining performance obligations were $857.2 million. We expect to recognize the following revenue amounts in future periods related to these remaining performance obligations: $691.1 million within the next 12 months or less; $94.6 million within the next 13 to 24 months; and $71.5 million in 25 months or more.
Note 10 - Acquisitions and Dispositions
Acquisitions
The following acquisitions were accounted for as business combinations in accordance with ASC 805 - Business Combinations. The results of the business combinations have been included in the Company's Consolidated Financial Statements beginning on the acquisition dates. Pro forma financial amounts reflecting the effects of the business combinations are not presented, as none of these business combinations, individually or in the aggregate, were material to our financial position or results of operations.
Acquisitions are also subject to customary adjustments based on, among other things, the amount of cash, debt and working capital in the business as of the closing date. The amounts included in the Consolidated Balance Sheets for these adjustments are considered provisional until final settlement has occurred.
The fair values of assets acquired and liabilities assumed are considered provisional until final fair values are determined during the measurement period. We expect to record adjustments as we accumulate the information needed to estimate the fair value of assets acquired and liabilities assumed, including working capital balances, estimated fair value of identifiable intangible assets, property, plant and equipment, total consideration and goodwill. We will utilize market and cost approaches to estimate the fair value of the property, plant and equipment, excluding aggregates reserves. The fair value of aggregates reserves and intangible assets are determined using the income approach. All estimates, key assumptions, and forecasts were either provided by or reviewed by management. We have engaged third-party valuation firms to assist in the analysis and valuation of certain assets. While we chose to utilize third-party valuation firms, the fair value analysis and related valuations represent the conclusions of management and not the conclusions or statements of any third party.
The excess of the total purchase price over the fair value of assets acquired and liabilities assumed has been allocated to goodwill. We believe that the goodwill relates to several factors, including potential synergies related to market opportunities for multiple product offerings and economies of scale expected from combining our operations with the businesses acquired.
During the first nine months of 2026, we completed the following four acquisitions:
•Two aggregates-based operations in Montana; one operation consists of a ready-mix concrete business supported by owned aggregate reserves, while the other includes owned aggregates reserves, ready-mix operations and precast concrete manufacturing capabilities. The results of these acquisitions are included in the Mountain segment. Purchase accounting was finalized in the second quarter of 2026.
•An aggregates-based company in Utah that consists of owned aggregates reserves, asphalt production and contracting services; this acquisition expanded our footprint into a new state. The results of this company are included in the Mountain segment. The fair values of the assets acquired and liabilities assumed were provisional as of September 30, 2026.
•An aggregates-based, vertically integrated supplier of aggregates, asphalt, contracting and paving services in Oregon, expanding our services in Southwest Oregon. The results of this acquisition are included in the West segment and resulted in a bargain purchase gain of $235,000 . Purchase accounting was finalized in the second quarter of 2026.
The aggregated purchase consideration for these four acquisitions was $184.4 million, net of cash assumed, and subject to post-closing adjustments. These acquisitions were not considered material separately or in the aggregate. The acquisitions resulted in the recognition of $11.1 million of current assets; $119.4 million of assets in property, plant and equipment; $65.1 million of goodwill; $4.2 million of intangible assets, which is all customer relationships; $8.2 million of deferred income tax liability; $6.3 million of current liabilities; and $880,000 of noncurrent liabilities - other. During the second quarter of 2026, we recorded an increase to goodwill of $11.7 million, primarily as a result of revised fair value amounts for property, plant and equipment.
Revenue attributable to the acquisitions completed in 2026 included in our Consolidated Statement of Operations for the three and nine months ended September 30, 2026 was $27.9 million and $55.5 million, respectively, and net income of $1.8 million and $210,000 , respectively.
16
During 2025, we completed five acquisitions with an aggregated purchase price of $622.2 million. As of June 30, 2026, the purchase accounting was complete on all of the acquisitions and no material adjustments were needed. During the first half of 2026, we recorded a reduction to goodwill of $780,000 , related to an increase of $3.0 million in intangibles and a decrease of $2.2 million in property, plant and equipment for acquisitions completed in 2025. In the third quarter of 2026, we paid $1.3 million towards a holdback liability related to a 2025 acquisition.
For the three months ended September 30, 2026 and 2025, we incurred acquisition-related costs on completed and other potential acquisitions of $1.6 million and $1.1 million, respectively. For the nine months ended September 30, 2026 and 2025, we incurred acquisition-related costs on completed and other potential acquisitions of $5.1 million and $8.0 million, respectively. These costs are included in our Corporate Services in selling, general and administrative expenses on the Consolidated Statement of Operations.
Dispositions
On March 7, 2025, we sold four ready-mix plant operations for total proceeds of $14.5 million. The ready-mix plant operations were acquired by us as part of the Strata acquisition and subsequently sold to a third-party. The ready-mix plants were included in assets held for sale on the opening balance sheet for Strata at the time of the acquisition.
Note 11 - Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill were as follows:
| Balance at January 1, 2026 | Goodwill Acquired During the Year | Measurement Period Adjustments | Balance at September 30, 2026 | ||||||||||||||
| (In thousands) | |||||||||||||||||
| West | $ | $ | $ | $ | |||||||||||||
| Mountain | |||||||||||||||||
| Central | ( | ||||||||||||||||
| Energy Services | |||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||
| Balance at January 1, 2025 | Goodwill Acquired During the Year | Measurement Period Adjustments | Balance at September 30, 2025 | ||||||||||||||
| (In thousands) | |||||||||||||||||
| West | $ | $ | $ | $ | |||||||||||||
| Mountain | |||||||||||||||||
| Central | ( | ||||||||||||||||
| Energy Services | ( | ||||||||||||||||
| Total | $ | $ | $ | ( | $ | ||||||||||||
| Balance at January 1, 2025 | Goodwill Acquired During the Year | Measurement Period Adjustments | Balance at December 31, 2025 | ||||||||||||||
| (In thousands) | |||||||||||||||||
| West | $ | $ | $ | $ | |||||||||||||
| Mountain | |||||||||||||||||
| Central | ( | ||||||||||||||||
| Energy Services | ( | ||||||||||||||||
| Total | $ | $ | $ | ( | $ | ||||||||||||
17
Other amortizable intangible assets were as follows:
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||
| (In thousands) | |||||||||||
| Customer relationships | $ | $ | $ | ||||||||
| Less accumulated amortization | |||||||||||
| Noncompete agreements | |||||||||||
| Less accumulated amortization | |||||||||||
Tradename | |||||||||||
| Less accumulated amortization | |||||||||||
Backlog | |||||||||||
Less accumulated amortization | |||||||||||
| Other | |||||||||||
| Less accumulated amortization | |||||||||||
| Total | $ | $ | $ | ||||||||
The previous tables include goodwill and intangible assets associated with the business combinations completed in 2026 and 2025. For more information related to these business combinations, see Note 10.
Amortization expense for amortizable intangible assets for the three and nine months ended September 30, 2026, was $2.6 million and $9.0 million, respectively. Amortization expense for amortizable intangible assets for the three and nine months ended September 30, 2025, was $4.7 million and $10.8 million, respectively. Estimated amortization expense for identifiable intangible assets as of September 30, 2026, was:
| Remainder of 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | |||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Amortization expense | $ | $ | $ | $ | $ | $ | ||||||||||||||
Note 12 - Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The fair value guidance establishes a hierarchy for grouping assets and liabilities, based on the significance of inputs. The estimated fair values of the assets and liabilities measured on a recurring basis are determined using the market approach.
Financial instruments measured at fair value on a recurring basis
18
The Company's assets measured at fair value on a recurring basis were as follows:
| Fair Value Measurements at September 30, 2026, Using | ||||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance at September 30, 2026 | |||||||||||
| (In thousands) | ||||||||||||||
| Assets: | ||||||||||||||
| Money market funds | $ | $ | $ | $ | ||||||||||
Insurance contracts | ||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | ||||||||||
| Fair Value Measurements at September 30, 2025, Using | ||||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance at September 30, 2025 | |||||||||||
| (In thousands) | ||||||||||||||
| Assets: | ||||||||||||||
| Money market funds | $ | $ | $ | $ | ||||||||||
Insurance contracts | ||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | ||||||||||
| Fair Value Measurements at December 31, 2025, Using | ||||||||||||||
| Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance at December 31, 2025 | |||||||||||
| (In thousands) | ||||||||||||||
| Assets: | ||||||||||||||
| Money market funds | $ | $ | $ | $ | ||||||||||
Insurance contracts | ||||||||||||||
| Total assets measured at fair value | $ | $ | $ | $ | ||||||||||
Our Level 2 money market funds are valued at the net asset value of shares held at the end of the period, based on published market quotations on active markets, or using other known sources including pricing from outside sources. The estimated fair value of the Level 2 insurance contracts is based on contractual cash surrender values that are determined primarily by investments in managed separate accounts of the insurer. These amounts approximate fair value. The managed separate accounts are valued based on other observable inputs or corroborated market data.
Though we believe the methods used to estimate fair value are consistent with those used by other market participants, the use of other methods or assumptions could result in a different estimate of fair value.
Nonfinancial instruments measured at fair value on a nonrecurring basis
We apply the provisions of the fair value measurement standard to our nonrecurring, non-financial measurements, including long-lived asset impairments. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. We review the carrying value of our long-lived assets, excluding goodwill, whenever events or changes in circumstances indicate that such carrying amounts may not be recoverable.
The assets and liabilities of the acquisitions that occurred through September 30, 2026 and 2025 were calculated using a market or cost approach. The fair value of some of the assets was determined based on Level 3 inputs including estimated future cash flows, discount rates, growth rates and sales projections, all of which require significant management judgment. For more information on these Level 2 and 3 fair value measurements, see Note 10.
19
Our long-term debt is not measured at fair value on the Consolidated Balance Sheets and the fair value is being provided for disclosure purposes only. The fair value was categorized as Level 2 in the fair value hierarchy and was based on discounted cash flows using current market interest rates. The estimated fair value of our Level 2 long-term debt was as follows:
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||
| (In thousands) | |||||||||||
| Carrying amount | $ | $ | $ | ||||||||
| Fair value | $ | $ | $ | ||||||||
The carrying amounts of our remaining financial instruments included in current assets and current liabilities approximate their fair values.
Note 13 - Debt
Certain debt instruments of ours contain restrictive covenants and cross-default provisions. In order to borrow under the debt agreements, we must be in compliance with the applicable covenants and certain other conditions, all of which management believes we, as applicable, were in compliance with at September 30, 2026. In the event we do not comply with the applicable covenants and other conditions, alternative sources of funding may need to be pursued.
On May 15, 2026, we entered into a second amendment to our secured credit agreement, increasing our Term Loan B by an aggregate principal amount of $400.0 million and reducing the interest rate margin by 0.25 %. After the second amendment, the aggregate principal amount of the Term Loan B outstanding was $895.0 million. Our Term Loan B has a Secured Overnight Financing Rate based interest rate and a mandatory annual amortization of $9.0 million.
Long-term Debt Outstanding Long-term debt outstanding was as follows:
Weighted Average Interest Rate at September 30, 2026 | September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||||
| (In thousands) | ||||||||||||||
Term loan A agreement due on March 7, 2030 | % | $ | $ | $ | ||||||||||
Term loan B agreement due on March 8, 2032 | % | |||||||||||||
| Revolving credit agreement | % | |||||||||||||
Senior notes due on May 1, 2031 | % | |||||||||||||
Other notes due on January 1, 2061 | % | |||||||||||||
| Less unamortized debt issuance costs | ||||||||||||||
| Total long-term debt | ||||||||||||||
| Less current maturities | ||||||||||||||
| Net long-term debt | $ | $ | $ | |||||||||||
Schedule of Debt Maturities Long-term debt maturities, which excludes unamortized debt issuance costs, at September 30, 2026, were as follows:
Remainder of 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | |||||||||||||||
| (In thousands) | ||||||||||||||||||||
| Long-term debt maturities | $ | $ | $ | $ | $ | $ | ||||||||||||||
20
Note 14 - Cash Flow Information
Cash expenditures for interest and income taxes were as follows:
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2026 | 2025 | |||||||
| (In thousands) | ||||||||
Interest paid, net | $ | $ | ||||||
| Income taxes paid, net | $ | $ | ||||||
Noncash investing and financing transactions were as follows:
| Nine Months Ended | |||||||||||
| September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (In thousands) | |||||||||||
| Property, plant and equipment additions in accounts payable | $ | $ | |||||||||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ | $ | |||||||||
Accrual for holdback payment related to a business combination | $ | $ | |||||||||
Note 15 - Business Segment Data
We focus on the vertical integration of our products and services by offering customers a single source for construction materials and related contracting services. We operate in 15 states across the United States through our four operating segments: West, Mountain, Central and Energy Services, each of which is also a reportable segment. Each segment’s performance is evaluated based on segment results without allocating corporate expenses, which include corporate costs associated with accounting, legal, treasury, business development, information technology, human resources, and other corporate expenses that support the operating segments.
Each geographic segment offers a vertically integrated suite of products and services, including aggregates, ready-mix concrete, asphalt and contracting services, while the Energy Services segment produces and supplies liquid asphalt, primarily for use in asphalt road construction, and is a supplier to some of the other segments. Each geographic segment mines, processes and sells construction aggregates (crushed stone and sand and gravel); produces and sells asphalt; and produces and sells ready-mix concrete as well as vertically integrating its contracting services to support the aggregates-based product lines including heavy-civil construction, asphalt and concrete paving, and site development and grading. Although not common to all locations, the geographic segments also sell cement, merchandise and other building materials and related services.
Corporate Services represents the unallocated costs of certain corporate functions, such as accounting, legal, treasury, business development, information technology, human resources and other corporate expenses that support the operating segments. Corporate Services also includes an immaterial amount of external revenue from the Knife River Training Center. We account for intersegment sales and transfers as if the sales or transfers were to third parties. The accounting policies applicable to each segment are consistent with those used in the consolidated financial statements.
The information that follows uses the same accounting policies as described in the audited financial statements and notes included in the Company's 2025 Annual Report. Information on our segments was as follows:
21
| Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||
| West | Mountain | Central | Energy Services | Total | West | Mountain | Central | Energy Services | Total | |||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Intersegment revenues | ||||||||||||||||||||||||||||||||||||||
| Total segment revenue | ||||||||||||||||||||||||||||||||||||||
Other revenues1 | ||||||||||||||||||||||||||||||||||||||
| Less: Elimination of intersegment revenue | ||||||||||||||||||||||||||||||||||||||
| Total consolidated revenue | $ | $ | ||||||||||||||||||||||||||||||||||||
| Cost of revenue excluding depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses excluding depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||||||||
Other segment items2 | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||
| Total segment EBITDA | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Consolidated income before income taxes | $ | $ | ||||||||||||||||||||||||||||||||||||
| Plus: | ||||||||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||||||||
Interest expense, net3 | ||||||||||||||||||||||||||||||||||||||
| Less unallocated amounts: | ||||||||||||||||||||||||||||||||||||||
| Other corporate revenue | ||||||||||||||||||||||||||||||||||||||
| Other corporate expenses | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total segment EBITDA | $ | $ | ||||||||||||||||||||||||||||||||||||
1 Other revenues is comprised of revenue included within our corporate services. 2 Other segment items is comprised of other income (expense) items on the income statement. 3 Interest expense, net is interest expense net of interest income. | ||||||||||||||||||||||||||||||||||||||
22
| Nine Months Ended September 30, 2026 | Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||
| West | Mountain | Central | Energy Services | Total | West | Mountain | Central | Energy Services | Total | |||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||||||||
| Revenues from external customers | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Intersegment revenues | ||||||||||||||||||||||||||||||||||||||
| Total segment revenue | ||||||||||||||||||||||||||||||||||||||
Other revenues1 | ||||||||||||||||||||||||||||||||||||||
| Less: Elimination of intersegment revenue | ||||||||||||||||||||||||||||||||||||||
| Total consolidated revenue | $ | $ | ||||||||||||||||||||||||||||||||||||
| Cost of revenue excluding depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||||||||
| Selling, general and administrative expenses excluding depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||||||||
Other segment items2 | ( | |||||||||||||||||||||||||||||||||||||
| Total segment EBITDA | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Consolidated income before income taxes | $ | $ | ||||||||||||||||||||||||||||||||||||
| Plus: | ||||||||||||||||||||||||||||||||||||||
| Depreciation, depletion and amortization | ||||||||||||||||||||||||||||||||||||||
Interest expense, net3 | ||||||||||||||||||||||||||||||||||||||
| Less unallocated amounts: | ||||||||||||||||||||||||||||||||||||||
| Other corporate revenue | ||||||||||||||||||||||||||||||||||||||
| Other corporate expenses | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total segment EBITDA | $ | $ | ||||||||||||||||||||||||||||||||||||
| Capital expenditures | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Assets | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
| Other assets | ||||||||||||||||||||||||||||||||||||||
| Elimination of intercompany receivables and investment in subsidiaries | ||||||||||||||||||||||||||||||||||||||
| Total consolidated assets | $ | $ | ||||||||||||||||||||||||||||||||||||
1 Other revenues is comprised of revenue included within our corporate services. 2 Other segment items is comprised of other income (expense) items on the income statement. 3 Interest expense, net is interest expense net of interest income. | ||||||||||||||||||||||||||||||||||||||
23
Note 16 - Commitments and Contingencies
We are party to claims and lawsuits arising out of our business and that of our consolidated subsidiaries, which may include, but are not limited to, matters involving property damage, personal injury, and environmental, contractual and statutory obligations. We accrue a liability for those contingencies when the incurrence of a loss is probable, and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. We do not accrue liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is probable or reasonably possible and which are material, we disclose the nature of the contingency and, in some circumstances, an estimate of the possible loss. Accruals are based on the best information available, but in certain situations management is unable to estimate an amount or range of a reasonably possible loss, including, but not limited to, when: (1) the damages are unsubstantiated or indeterminate, (2) the proceedings are in the early stages, (3) numerous parties are involved, or (4) the matter involves novel or unsettled legal theories.
At September 30, 2026 and 2025, and December 31, 2025, we accrued contingent liabilities as a result of litigation, which have not been discounted, of $3.1 million, $3.3 million and $3.3 million, respectively. At September 30, 2026 and 2025, and December 31, 2025, there were no
Environmental matters
Prineville, Oregon: In July 2026, three lawsuits titled McCormick v. Knife River Corp., Case No. 26 CV 35046, Thompson v. Knife River Corp., Case No. 26 CV 35556, and Zednik v. Knife River Corp., Case No. 26 CV 35823, respectively, were filed in the Multnomah County Circuit Court against the Company. On August 7, 2026, the Company filed answers in each case and subsequently removed each case to the United States District Court for the District of Oregon. On November 2, 2026, the plaintiffs in Zednik filed an amended complaint naming additional plaintiffs. In each complaint, the plaintiffs allege claims for negligence, negligence per se, trespass, trespass to chattels, private nuisance, and public nuisance in connection with claims of elevated levels of metals in their well water allegedly caused by mining activities at our Woodward Site near Prineville, Oregon. The plaintiffs have alleged personal injury and property damages and seek compensation in the form of economic and non-economic damages, and the Zednik plaintiffs also seek punitive damages.
We are vigorously defending these actions in all respects. Given the early stage of the litigation, we are not in a position to assess the likelihood of any potential loss or adverse effect on our financial condition or to estimate the amount or range of potential loss, if any, from these actions at this time.
Portland, Oregon: Knife River Corporation - Northwest is a party to claims for the cleanup of a superfund site in Portland, Oregon. There were no material changes to the environmental matters that were previously reported in the audited financial statements and notes included in our 2025 Annual Report.
Guarantees
We have outstanding obligations to third parties where we have guaranteed our performance. These guarantees are related to contracts for contracting services and certain other guarantees. At September 30, 2026, the fixed maximum amounts guaranteed under these agreements aggregated to $11.5 million, all of which have no scheduled maturity date. Certain of the guarantees also have no fixed maximum amounts specified. There were no amounts outstanding under the previously mentioned guarantees at September 30, 2026.
We have outstanding letters of credit to third parties related to insurance policies and other agreements. At September 30, 2026, the fixed maximum amounts guaranteed under these letters of credit aggregated to $51.9 million. At September 30, 2026, the amounts of scheduled expiration of the maximum amounts guaranteed under these letters of credit aggregate to $50,000 in 2026, $51.6 million in 2027, and $175,000 in 2028. There were no amounts outstanding under the previously mentioned letters of credit at September 30, 2026.
In the normal course of business, we have surety bonds related to contracts for contracting services, reclamation obligations and insurance policies of our subsidiaries. In the event a subsidiary of Knife River does not fulfill a bonded obligation, we would be responsible to the surety bond company for completion of the bonded contract or obligation. A large portion of the surety bonds are expected to expire within the next 12 months; however, we will likely continue to enter into surety bonds for our subsidiaries in the future. At September 30, 2026, approximately $765.8 million of surety bonds were outstanding, which were not reflected on the Consolidated Balance Sheet.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The information in this quarterly report on Form 10-Q highlights the key growth strategies, projections and certain assumptions for the Company and its subsidiaries. Many of these highlighted statements and other statements not historical in nature are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). Forward-looking statements are generally identified with words like “believe,” “expect,” “target,” “project,” “may,” “could,” “would,” “approximately,” “possible,” “will,” “should,” “intend,” “plan,” “anticipate,” “commit,” "confident," “estimate,” “potential,” “ambitions,” “outlook,” or “continue,” the negative of these words, other terms of similar meaning or the use of future dates. Although the Company believes that its expectations are expressed in good faith and based on reasonable assumptions, there is no assurance the Company’s statements with respect to its EDGE and Sharper EDGE initiatives and the benefits thereof, our ability to drive long-term profitable growth, shareholder value creation, near-term market dynamics, expected long-term goals, expected backlog margin, acquisitions, financing plans, expected federal and state funding for infrastructure or other proposed strategies will be achieved.
New factors emerge from time to time, and it is not possible for management to predict all the factors, nor can it assess the effect of each factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. All forward-looking statements, whether written or oral and whether made by or on behalf of the Company, are expressly qualified by the risk factors and cautionary statements reported in the section entitled “Item 1A. Risk Factors” in Part I of the Company's 2025 Annual Report on Form 10-K (Annual Report), filed with the United States Securities and Exchange Commission (the “SEC”) on February 20, 2026, and subsequent filings with the SEC.
All forward-looking statements in this quarterly report on Form 10-Q are expressly qualified by such cautionary statements and by reference to the underlying assumptions. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made. Except as required by law, the Company does not undertake to update forward-looking statements, whether as a result of new information, future events or otherwise.
Company Overview
At Knife River, we are a people-first construction materials and contracting services company. We provide construction materials and contracting services to build safe roads, bridges, airport runways and other critical infrastructure needs that connect people with where they want to go and with the supplies they need. 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 15 states: West, Mountain, Central and Energy Services. The geographic segments primarily provide aggregates, asphalt and ready-mix concrete, as well as related contracting services such as heavy-civil construction, asphalt paving, concrete construction, site development and grading. The Energy Services segment produces and supplies liquid asphalt and related services, primarily for use in asphalt road construction.
As an aggregates-based construction materials and contracting services company, we have 1.3 billion tons of aggregate reserves supporting our vertically integrated business strategy. About 35 percent of these aggregates are used internally to support value-added downstream products like ready-mix concrete and asphalt, as well as contracting services such as heavy-civil construction, asphalt paving, concrete construction, bridges and in some segments the manufacturing of prestressed concrete products. Our strategically located aggregate sites and associated asphalt and ready-mix plants near mid-sized, higher-growth markets offer transportation advantages, enabling competitive pricing and higher margins. We serve both public and private markets, with public projects making up most of our work and providing stability through economic cycles, which helps offset the cyclical nature of the private markets.
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We provide various products and services and operate a variety of facility types, including aggregates 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, Utah 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 | ||||||||||||||||||||||||||||||||||
| Precast/ | |||||||||||||||||||||||||||||||||||
| Ready-Mix | Construction | Prestressed | Liquid | Heavy | |||||||||||||||||||||||||||||||
| Aggregates | Asphalt | Concrete | Services | Concrete | Asphalt | Cement | Equipment | Trucking | Rail | Barge | |||||||||||||||||||||||||
| West | X | X | X | X | X | X | X | X | X | X | |||||||||||||||||||||||||
| Mountain | X | X | X | X | X | X | X | ||||||||||||||||||||||||||||
| Central | X | X | X | X | X | X | X | X | |||||||||||||||||||||||||||
| Energy Services | X | X | X | ||||||||||||||||||||||||||||||||
Market Conditions and Outlook
Federal and state funding remain at or near record levels for a majority of our markets with approximately 80 percent of our historical contracting services revenue each year coming from public-sector projects, enhancing stability through market cycles. For more information on factors that may negatively impact our business, see the section entitled "Item 1A. Risk Factors" in Part I of the Company's 2025 Annual Report.
Backlog. Our contracting services backlog was as follows:
| September 30, 2026 | September 30, 2025 | December 31, 2025 | |||||||||
| (In millions) | |||||||||||
| West | $ | 167.3 | $ | 257.5 | $ | 203.6 | |||||
| Mountain | 336.0 | 386.0 | 395.7 | ||||||||
| Central | 353.9 | 351.1 | 432.8 | ||||||||
| $ | 857.2 | $ | 994.6 | $ | 1,032.1 | ||||||
Expected margins on backlog at September 30, 2026, were lower compared to the expected margins on backlog at September 30, 2025. Of the $857 million of backlog at September 30, 2026, we expect to complete approximately $691 million in the 12 months following September 30, 2026. Approximately 82 percent of our backlog at September 30, 2026, is related to publicly funded projects, including street and highway construction projects, which are driven primarily by public works projects for state departments of transportation (DOT). While there continues to be infrastructure development, as discussed in the following section on Public Funding, there were fewer bidding opportunities in certain markets for the quarter compared to the same period last year.
Period-over-period increases or decreases in backlog may not be indicative of future revenues, margins, net income or earnings before interest, taxes, depreciation, depletion and amortization (EBITDA). See the section entitled “Item 1A. Risk Factors” in Part I of the Company's 2025 Annual Report for a list of factors that can cause revenues to be realized in periods and at levels that are different from originally projected.
Public Funding. Funding for public projects is dependent on federal and state funding, such as appropriations to the Federal Highway Administration. Federal surface transportation programs authorized under the Infrastructure Investment and Jobs Act (IIJA) have been extended through December 11, 2026, providing additional time for Congress to consider a long-term reauthorization. The bipartisan BUILD America 250 Act, a proposed five-year surface transportation reauthorization bill, continues to advance through the legislative process. There is also a significant portion of previously authorized IIJA funding remaining to be spent. As of September 2026, approximately 32 percent of IIJA formula funding had yet to be spent in our 15 state operating market, providing continued support for state DOT programs into 2027. While each market is unique, the DOT budgets in most of the states where we operate remain at or near record levels.
In 2025, the American Society of Civil Engineers published its 2025 Report Card for America's Infrastructure, assigning the United States roads a "D+" grade and estimating that between 2024 and 2033, the country will require more funding than what is currently authorized. 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.
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Profitability. The management team consistently monitors profit margins and has adopted a proactive approach in supporting long-term profitability objectives and creating shareholder value. In 2023, we launched our EDGE initiatives and established specialized teams to deliver training, support higher-margin bidding opportunities across regions and pursue targeted growth opportunities. Building on the progress of these initiatives, which continue, we launched Sharper EDGE, a program of targeted improvement opportunities across three areas: Operational Excellence, Commercial Excellence and Organizational Excellence. We have begun implementing these initiatives and expect to ramp the program over the next three years.
We are experiencing downward pressure on our margins in certain markets due to competitive market dynamics and fluctuations in the prices of raw materials, including diesel fuel, gasoline, natural gas, liquid asphalt, cement and steel. We are experiencing competitive market dynamics, primarily within contracting services, which is resulting in projects being more competitively bid and in turn compressing our contracting services margins.
To counteract the effects of raw material price fluctuations, we have utilized various mitigating strategies, such as dynamic pricing; energy escalation clauses in our contracting services contracts; securing materials in advance including the prepurchasing of diesel; fuel surcharges and pursuing other cost-saving measures. Energy escalation adjustments within contracting services are often subject to a recognition delay of a few months and are not reflected immediately in our results of operations. Our teams have had success with these mitigating controls, however, our results of operations were still impacted by ongoing escalated fuel prices, largely as a result of the timing of contract billings. We will continue to monitor the effects these economic conditions have on our business.
Pursuing our strategic growth goals through targeted acquisitions is expected to drive an increase in selling, general and administrative expenses on a year-over-year basis. In the initial year of an acquisition, additional payroll-related costs associated with the acquired company, third-party consulting commitments, and newly recognized intangible assets contributing to elevated amortization expense are all anticipated. Upon complete integration of the acquired entities, operational synergies with our existing business can be realized, generating cost efficiencies.
Growth. Our management team continues to evaluate growth opportunities, both through organic growth and acquisitions they believe will generate shareholder value. Our business development team is focused on our growth with materials-led businesses in mid-size, higher growth markets, and has several targets at various stages of completion in our acquisition pipeline.
During 2026, we finalized three aggregates-based acquisitions within the Mountain region and one in the West region. Two of these transactions broaden our presence in Montana, enhancing our ability to supply aggregates and ready-mix concrete to the expanding market in western Montana. The acquisition in the West expands our footprint in the Southwest Oregon market. Additionally, the acquisition of Morgan Asphalt marked our entry into the Utah market. This acquisition included aggregate crushing and production operations with reserves projected to last over 30 years, an asphalt manufacturing facility and a range of contracting services such as asphalt paving, excavation and grading, serving both public and private sector customers.
In addition, we continue to invest in multiple organic projects, including an aggregate expansion project in South Dakota and ready-mix operations in Idaho, Minnesota and Texas. The aggregate expansion project will increase our production capabilities in the Sioux Falls market and is scheduled to be operational in 2027. Further, we completed the greenfield development of ready-mix operations located in the Twin Falls, Idaho market, which became fully operational in the second quarter of 2026.
Seasonality. Our operations can be impacted by weather especially due to a large portion of our markets being geographically located in the northern part of the country. Generally, construction activity increases in the second quarter and continues throughout the year, contributing to both materials and contracting services volumes. However, an unusually wet spring or summer, or a longer winter can lead to reduced construction activity, which would also impact our aggregates and asphalt product lines.
Workforce. As a people-first company, we continually take steps to address safety, recruitment and retention of our employees. Safety is one of Knife River's core values. The fundamental tenets of our "I Choose Safety" program are that safety is a choice and that all injuries are preventable. Our team is committed to work safely every day and we continue to advance our culture of safety through engagement and empowering our team members to take action and make meaningful changes that improve their well-being and the well-being of others.
Our training and development team, based out of the Knife River Training Center, is comprised of professional instructors, who bring a wealth of knowledge and experience to the learning environment. This dedicated team has a long-standing tradition of delivering quality training programs that are both comprehensive and practical. Their expertise helps ensure that our team members receive the highest standard of education and skill development.
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Consolidated Overview
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Revenue | $ | 1,275.6 | $ | 1,203.7 | 6 | % | $ | 2,624.3 | $ | 2,390.9 | 10 | % | |||||||||||
| Cost of revenue | 988.0 | 919.4 | 7 | % | 2,176.7 | 1,958.9 | 11 | % | |||||||||||||||
| Gross profit | 287.6 | 284.3 | 1 | % | 447.6 | 432.0 | 4 | % | |||||||||||||||
| Selling, general and administrative expenses | 73.5 | 69.1 | 6 | % | 238.6 | 211.4 | 13 | % | |||||||||||||||
| Operating income | 214.1 | 215.2 | (1) | % | 209.0 | 220.6 | (5) | % | |||||||||||||||
| Interest expense | 24.7 | 23.0 | 7 | % | 70.0 | 60.6 | 16 | % | |||||||||||||||
| Other (expense) income | (0.8) | 1.2 | (167) | % | 1.9 | 8.0 | (76) | % | |||||||||||||||
| Income before income taxes | 188.6 | 193.4 | (2) | % | 140.9 | 168.0 | (16) | % | |||||||||||||||
| Income tax expense | 50.7 | 50.2 | 1 | % | 38.3 | 42.9 | (11) | % | |||||||||||||||
| Net income | $ | 137.9 | $ | 143.2 | (4) | % | $ | 102.6 | $ | 125.1 | (18) | % | |||||||||||
| EBITDA* | $ | 268.2 | $ | 269.2 | — | % | $ | 373.1 | $ | 367.5 | 2 | % | |||||||||||
| Adjusted EBITDA* | $ | 271.7 | $ | 272.8 | — | % | $ | 379.6 | $ | 377.1 | 1 | % | |||||||||||
*EBITDA and Adjusted EBITDA are non-GAAP financial measures. For more information and reconciliations to the nearest GAAP measures, see the section entitled "Non-GAAP Financial Measures."
Revenue includes revenue from the sale of construction materials and contracting services. 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. 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 and interest expense.
Selling, general and administrative expenses include the costs for estimating, bidding and business development, as well as costs related to corporate and administrative functions. Selling expenses can vary depending on the volume of projects in process and the number of employees assigned to estimating and bidding activities. Other general and administrative expenses include outside services; healthcare; information technology; depreciation and amortization; training, travel and entertainment; office supplies; allowance for expected credit losses; gains or losses on the sale of assets; and other miscellaneous expenses.
Other income includes net periodic benefit costs for our benefit plan expenses, other than service costs; interest income; realized and unrealized gains and losses on investments for our nonqualified benefit plans; earnings or losses on joint venture arrangements; gains on bargain purchases; and other miscellaneous income or expenses.
Income tax expense (benefit) consists of corporate income taxes related to our net income (loss). 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 (loss) before income tax.
The discussion that follows focuses on the key financial measures we use to evaluate the performance of our business, which include revenue, EBITDA and EBITDA margin. EBITDA and EBITDA margin are non-GAAP financial measures used to measure profitability by our management and chief operating decision maker. For more information and reconciliations to the nearest GAAP measures, see the section entitled "Non-GAAP Financial Measures."
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The following tables summarize our operating results.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||
| Dollars | Margin | Dollars | Margin | Dollars | Margin | Dollars | Margin | ||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||
| Revenues by segment: | |||||||||||||||||||||||||||||
| West | $ | 365.8 | $ | 396.0 | $ | 867.9 | $ | 921.7 | |||||||||||||||||||||
| Mountain | 308.1 | 229.8 | 625.8 | 471.9 | |||||||||||||||||||||||||
| Central | 462.0 | 434.4 | 888.8 | 757.4 | |||||||||||||||||||||||||
| Energy Services | 168.4 | 169.2 | 291.9 | 280.5 | |||||||||||||||||||||||||
| Total segment revenues | 1,304.3 | 1,229.4 | 2,674.4 | 2,431.5 | |||||||||||||||||||||||||
| Corporate Services and Eliminations | (28.7) | (25.7) | (50.1) | (40.6) | |||||||||||||||||||||||||
| Consolidated revenues | $ | 1,275.6 | $ | 1,203.7 | $ | 2,624.3 | $ | 2,390.9 | |||||||||||||||||||||
EBITDA (a): | |||||||||||||||||||||||||||||
| West | $ | 91.4 | 25.0 | % | $ | 91.8 | 23.2 | % | $ | 162.8 | 18.8% | $ | 177.5 | 19.3% | |||||||||||||||
| Mountain | 55.8 | 18.1 | % | 50.7 | 22.1 | % | 78.6 | 12.6% | 65.4 | 13.8% | |||||||||||||||||||
| Central | 102.1 | 22.1 | % | 99.7 | 23.0 | % | 128.9 | 14.5% | 119.8 | 15.8% | |||||||||||||||||||
| Energy Services | 32.4 | 19.3 | % | 39.7 | 23.4 | % | 47.6 | 16.3% | 48.9 | 17.4% | |||||||||||||||||||
| Total segment EBITDA (a) | 281.7 | 21.6 | % | 281.9 | 22.9 | % | 417.9 | 15.6% | 411.6 | 16.9% | |||||||||||||||||||
Corporate Services and Eliminations (b) | (13.5) | N.M. | (12.7) | N.M. | (44.8) | N.M. | (44.1) | N.M. | |||||||||||||||||||||
Consolidated EBITDA (a) | $ | 268.2 | 21.0 | % | $ | 269.2 | 22.4 | % | $ | 373.1 | 14.2% | $ | 367.5 | 15.4% | |||||||||||||||
(a)EBITDA, total segment EBITDA, EBITDA margin and total segment EBITDA margin are non-GAAP financial measures. For more information and a reconciliation to the nearest GAAP measure, see the section entitled "Non-GAAP Financial Measures."
(b)N.M. - not meaningful
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| Sales (thousands): | ||||||||||||||
| Aggregates (tons) | 12,747 | 11,610 | 27,657 | 24,303 | ||||||||||
| Ready-mix concrete (cubic yards) | 1,338 | 1,331 | 3,255 | 2,916 | ||||||||||
| Asphalt (tons) | 3,368 | 3,111 | 5,681 | 4,953 | ||||||||||
| Average selling price:* | ||||||||||||||
| Aggregates (per ton) | $ | 19.59 | $ | 18.78 | $ | 19.81 | $ | 19.15 | ||||||
| Ready-mix concrete (per cubic yard) | $ | 201.90 | $ | 196.43 | $ | 200.16 | $ | 197.49 | ||||||
| Asphalt (per ton) | $ | 63.84 | $ | 64.43 | $ | 65.04 | $ | 66.10 | ||||||
*The average selling price includes freight and delivery and other revenues.
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| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||
| Dollars | Margin | Dollars | Margin | Dollars | Margin | Dollars | Margin | ||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||
| Revenues by product line: | |||||||||||||||||||||||||||||
| Aggregates | $ | 249.7 | $ | 218.1 | $ | 548.0 | $ | 465.4 | |||||||||||||||||||||
| Ready-mix concrete | 270.2 | 261.4 | 651.5 | 575.8 | |||||||||||||||||||||||||
| Asphalt | 215.1 | 200.4 | 369.5 | 327.4 | |||||||||||||||||||||||||
Liquid asphalt | 147.1 | 148.8 | 256.6 | 246.9 | |||||||||||||||||||||||||
| Other* | 97.0 | 91.4 | 227.4 | 214.4 | |||||||||||||||||||||||||
| Contracting services | 604.6 | 556.4 | 1,158.9 | 1,036.7 | |||||||||||||||||||||||||
| Internal sales | (308.1) | (272.8) | (587.6) | (475.7) | |||||||||||||||||||||||||
| Total revenues | $ | 1,275.6 | $ | 1,203.7 | $ | 2,624.3 | $ | 2,390.9 | |||||||||||||||||||||
| Gross profit by product line: | |||||||||||||||||||||||||||||
| Aggregates | $ | 73.9 | 29.6 | % | $ | 59.4 | 27.2 | % | $ | 109.1 | 19.9% | $ | 88.0 | 18.9% | |||||||||||||||
| Ready-mix concrete | 50.0 | 18.5 | % | 52.8 | 20.2 | % | 104.7 | 16.1% | 93.9 | 16.3% | |||||||||||||||||||
| Asphalt | 38.9 | 18.1 | % | 40.4 | 20.2 | % | 54.8 | 14.8% | 51.5 | 15.7% | |||||||||||||||||||
Liquid asphalt | 27.9 | 18.9 | % | 33.7 | 22.7 | % | 41.6 | 16.2% | 44.5 | 18.0% | |||||||||||||||||||
| Other* | 45.7 | 47.1 | % | 34.2 | 37.4 | % | 47.4 | 20.9% | 38.7 | 18.1% | |||||||||||||||||||
| Contracting services | 51.2 | 8.5 | % | 63.8 | 11.5 | % | 90.0 | 7.8% | 115.4 | 11.1% | |||||||||||||||||||
| Total gross profit | $ | 287.6 | 22.5% | $ | 284.3 | 23.6% | $ | 447.6 | 17.1% | $ | 432.0 | 18.1% | |||||||||||||||||
*Other includes cement, merchandise, fabric and spreading, and other products and services that individually are not considered to be a core line of business.
Three Months Ended September 30, 2026, Compared to Three Months Ended September 30, 2025
Revenue
Revenue increased $71.9 million, led by high-single digit volume increases for aggregates and asphalt, as well as an increase in contracting services. The increase in contracting services was largely the result of more asphalt paving work, which substantially contributed to the increase in aggregate and asphalt sales volumes. Acquisitions this past year contributed to the increases across most product lines. We also continue to focus on our pricing, which contributed another $23.9 million across our legacy operations in the quarter.
Gross Profit
Gross profit improved $3.3 million, largely due to the additional aggregate volumes noted above, and increased aggregate margins as a result of price increases and reduced per-unit production costs. Partially offsetting the increase was lower margins on contracting services work due to the timing and type of projects, higher diesel fuel costs and competitive market dynamics.
Selling, general and administrative expenses
As a percentage of revenues, selling, general and administrative expense was 5.8 percent in the third quarter of 2026 compared to 5.7 percent in the third quarter of 2025. For the third quarter of 2026, we experienced higher costs, largely related to the additional costs associated with companies acquired, including additional payroll and payroll-related costs, which was offset slightly by $2.1 million lower purchase accounting-related intangible asset amortization.
Interest expense
Interest expense increased $1.7 million due primarily to higher average debt balances with the additional $400 million of borrowings under the Term Loan B amended in May of 2026, offset in part by lower average interest rates.
Other (expense) income
Other income decreased $2.0 million due to decreased investment returns on our nonqualified defined benefit plans.
Income tax expense
Income tax expense increased $500,000, due to a slightly higher effective tax rate. Our effective tax rate for the third quarters of 2026 and 2025 was 26.9 percent and 26.0 percent, respectively. The increase in the effective tax rate is primarily due to a decrease in tax benefits.
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Nine Months Ended September 30, 2026, Compared to Nine Months Ended September 30, 2025
Revenue
Revenue increased $233.4 million, led by double-digit volume increases for ready-mix, aggregates and asphalt, and an increase in contracting services. The increase in contracting services work was largely the result of more asphalt paving work and an earlier start to the season, which also contributed to the increase in aggregate and asphalt sales volumes. Acquisitions this past year further contributed to the increases across most product lines. Pricing also contributed $35.3 million of increases to the period.
Gross profit
Gross profit improved $15.6 million, largely due to the additional product line volumes noted above and price increases on liquid asphalt, aggregates, ready-mix concrete and cement. Partially offsetting the increase was lower margins on contracting services work due to the timing and type of projects, competitive market dynamics and an increase in diesel fuel costs.
Selling, general and administrative expenses
As a percentage of revenues, selling, general and administrative expense was 9.1 percent for the first nine months of 2026 compared to 8.8 percent in 2025. For the first nine months of 2026, we experienced higher costs, largely related to lower gains on asset sales of $10.5 million, additional costs associated with the companies acquired, and higher payroll and payroll-related costs. These costs were offset in part by lower purchase accounting-related intangible asset amortization.
Interest expense
Interest expense increased $9.4 million due primarily to higher average debt balances with the additional $400 million of borrowings under the Term Loan B amended in May of 2026 and borrowings under our revolving credit facility, offset in part by lower average interest rates.
Other income
Other income decreased $6.1 million, largely due to the absence of a one-time gain of $3.5 million on the bargain purchase of an aggregate quarry operation in the West segment in the prior year. We also had a decrease in interest income of $1.6 million as a result of less cash on hand, and a decrease of $800,000 in investment returns on our nonqualified defined benefit plans.
Income tax expense
Income tax expense decreased $4.6 million, corresponding with lower income before income taxes, offset slightly by a higher effective tax rate. Our effective tax rate for the first nine months of 2026 and 2025 was 27.2 percent and 25.5 percent, respectively. The increase in the effective tax rate is primarily due to a decrease in tax benefits.
Business Segment Financial and Operating Data
A discussion of key financial data from our business segments follows. We provide segment-level information by revenue, EBITDA and EBITDA margin, as these are the measures of profitability used by our chief operating decision maker to assess operational results.
Results of Operations - West
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||
| (In millions) | ||||||||||||||||||||
| Revenue | $ | 365.8 | $ | 396.0 | (8) | % | $ | 867.9 | $ | 921.7 | (6)% | |||||||||
| EBITDA | $ | 91.4 | $ | 91.8 | (1) | % | $ | 162.8 | $ | 177.5 | (8)% | |||||||||
| EBITDA margin | 25.0 | % | 23.2 | % | 18.8 | % | 19.3 | % | ||||||||||||
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| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| (In millions) | ||||||||||||||
| Revenues: | ||||||||||||||
| Aggregates | $ | 99.3 | $ | 91.2 | $ | 244.0 | $ | 222.3 | ||||||
| Ready-mix concrete | 93.8 | 98.6 | 256.0 | 258.3 | ||||||||||
| Asphalt | 57.2 | 61.7 | 109.1 | 109.1 | ||||||||||
| Other* | 55.0 | 50.3 | 138.9 | 134.0 | ||||||||||
| Contracting services | 140.4 | 170.4 | 306.0 | 359.2 | ||||||||||
| Internal sales | (79.9) | (76.2) | (186.1) | (161.2) | ||||||||||
| $ | 365.8 | $ | 396.0 | $ | 867.9 | $ | 921.7 | |||||||
*Other includes cement, merchandise, transportation services and other products that individually are not considered to be a core line of business for the segment.
Three Months Ended September 30, 2026, Compared to Three Months Ended September 30, 2025
Revenue decreased $30.2 million for the quarter, primarily due to less available contracting services work in Oregon and California. In addition, decreased demand in Oregon resulted in lower ready-mix volumes, which caused a $10.6 million decline in revenue. These decreases were partially offset by increased ready-mix and aggregates pricing across the segment, which resulted in an increase in revenue of $15.4 million, as well as contributions from acquisitions.
EBITDA decreased 1 percent for the quarter, driven primarily by lower revenues, as previously mentioned, and lower margin contracting services work related to competitive market dynamics and the type of work. Increased aggregate margins due to higher pricing and production cost efficiencies, along with higher ready-mix pricing, largely offset the decrease in contracting services in the quarter.
Nine Months Ended September 30, 2026, Compared to Nine Months Ended September 30, 2025
Revenue decreased $53.8 million year-over-year, primarily due to less available public agency and private contracting services work in Oregon and California. In addition, decreased demand in Oregon resulted in lower ready-mix sales volumes, which caused a $12.3 million decline in revenue. These decreases were partially offset by increased ready-mix, aggregates, and cement pricing across the segment, which resulted in an increase in revenue of $35.3 million, as well as contributions from acquisitions.
EBITDA decreased 8 percent year-over-year, primarily as a result of lower revenues previously mentioned, as well as lower margin contracting services work related to competitive market dynamics and less available work, in addition to higher production and delivery costs on ready-mix. Results were further impacted by the absence of a $3.5 million one-time gain recognized in the first quarter of 2025 due to a bargain purchase acquisition, and lower gains on asset sales of $2.4 million in the first nine months of 2026. These decreases were slightly offset by increased pricing, as previously mentioned, and higher aggregate margins as a result of higher pricing and production cost efficiencies.
Results of Operations - Mountain
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||
| (In millions) | ||||||||||||||||||||
| Revenue | $ | 308.1 | $ | 229.8 | 34 | % | $ | 625.8 | $ | 471.9 | 33% | |||||||||
| EBITDA | $ | 55.8 | $ | 50.7 | 10 | % | $ | 78.6 | $ | 65.4 | 20% | |||||||||
| EBITDA margin | 18.1 | % | 22.1 | % | 12.6 | % | 13.8 | % | ||||||||||||
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| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| (In millions) | ||||||||||||||
| Revenues: | ||||||||||||||
| Aggregates | $ | 45.4 | $ | 34.9 | $ | 95.2 | $ | 72.2 | ||||||
| Ready-mix concrete | 46.2 | 42.1 | 111.6 | 90.9 | ||||||||||
| Asphalt | 63.4 | 42.2 | 108.7 | 71.5 | ||||||||||
| Other* | 1.2 | — | 2.4 | — | ||||||||||
| Contracting services | 221.3 | 155.5 | 435.5 | 314.2 | ||||||||||
| Internal sales | (69.4) | (44.9) | (127.6) | (76.9) | ||||||||||
| $ | 308.1 | $ | 229.8 | $ | 625.8 | $ | 471.9 | |||||||
*Other includes merchandise and other products that individually are not considered to be a core line of business for the segment.
Three Months Ended September 30, 2026, Compared to Three Months Ended September 30, 2025
Revenue increased $78.3 million for the quarter, primarily due to increased contracting services revenue from additional asphalt paving work. Companies acquired in the first quarter of 2026 contributed an additional $26.3 million of revenue. Additionally, higher sales volumes of aggregates, ready-mix and asphalt from our legacy operations contributed $23.5 million of increases, while improved pricing within our legacy ready-mix and aggregate operations further supported the overall increase.
EBITDA improved $5.1 million for the quarter, primarily due to higher revenues, as previously mentioned. The impact of higher revenue was partially offset by lower margin contracting services work due to the type of work and the impact of increased competition. Further, selling, general and administrative costs were $4.9 million higher, primarily related to additional overhead costs from the three companies acquired in the first quarter of 2026, as well as increased payroll-related costs.
Nine Months Ended September 30, 2026, Compared to Nine Months Ended September 30, 2025
Revenue increased $153.9 million, primarily due to favorable weather allowing for early season work, which positively impacted all product lines across the segment. Contracting services revenue in Idaho increased $70.5 million, which resulted in an associated increase in asphalt volumes. Higher pricing for aggregates and ready-mix contributed $11.3 million of additional revenue to our legacy operations. In addition, three companies acquired in the first quarter of 2026 also contributed to the growth.
EBITDA improved 20 percent year-over-year, largely due to higher revenues, as previously mentioned. Slightly offsetting the improvement was lower margin contracting services work due to the type of work and the impact of increased competition. Further, selling, general and administrative costs were $12.5 million higher, mostly related to additional overhead costs from the three acquired companies during the first quarter and increased payroll to cover administrative and labor costs.
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Results of Operations - Central
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||
| (In millions) | ||||||||||||||||||||
| Revenue | $ | 462.0 | $ | 434.4 | 6 | % | $ | 888.8 | $ | 757.4 | 17% | |||||||||
| EBITDA | $ | 102.1 | $ | 99.7 | 2 | % | $ | 128.9 | $ | 119.8 | 8% | |||||||||
| EBITDA margin | 22.1 | % | 23.0 | % | 14.5 | % | 15.8 | % | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| (In millions) | ||||||||||||||
| Revenues: | ||||||||||||||
| Aggregates | $ | 105.0 | $ | 92.0 | $ | 208.8 | $ | 170.9 | ||||||
| Ready-mix concrete | 130.2 | 120.7 | 283.9 | 226.6 | ||||||||||
| Asphalt | 94.5 | 96.5 | 151.7 | 146.8 | ||||||||||
| Other* | 11.9 | 12.2 | 29.6 | 27.2 | ||||||||||
| Contracting services | 242.9 | 230.5 | 417.4 | 363.3 | ||||||||||
| Internal sales | (122.5) | (117.5) | (202.6) | (177.4) | ||||||||||
| $ | 462.0 | $ | 434.4 | $ | 888.8 | $ | 757.4 | |||||||
*Other includes merchandise and other products that individually are not considered to be a core line of business for the segment.
Three Months Ended September 30, 2026, Compared to Three Months Ended September 30, 2025
Revenue increased $27.6 million for the quarter, primarily driven by an increase in contracting services as a result of more available public-agency work in North Dakota, which also contributed to the increase in aggregate and asphalt volumes in the state. In addition, an increase in third-party aggregate sales was supported by supplying data center projects in North Dakota and Texas. Further, contributions from the December 2025 acquisition of Texcrete led to ready-mix volumes that were more than twice as high in Texas compared to the prior year.
EBITDA improved $2.4 million, largely due to the increase in aggregates volumes as previously mentioned. EBITDA margin decreased primarily due to the geographic and end-market mix of ready-mix volumes.
Nine Months Ended September 30, 2026, Compared to Nine Months Ended September 30, 2025
Revenue increased $131.4 million, primarily driven by a $54.1 million increase in contracting services revenue as a result of more available public-agency work in North Dakota and Minnesota, as well as an increase in asphalt volumes associated with the contracting services work. In addition, contributions from the acquisition of Texcrete in December 2025 led to ready-mix volumes that were more than twice as high in Texas as the prior year. Aggregate volumes also contributed $35.2 million of additional revenue, largely related to supplying data center projects in North Dakota and Texas, as well as more available work.
EBITDA improved $9.1 million, largely the result of higher revenues as previously mentioned, as well as aggregate and asphalt production efficiencies across the product lines. Gross profit on contracting services work also improved slightly in the year due to more work. Partially offsetting the increase was the absence of gains on asset sales of $7.8 million from the prior year, primarily in Texas.
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Results of Operations - Energy Services
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||
| 2026 | 2025 | % Change | 2026 | 2025 | % Change | |||||||||||||||
| (In millions) | ||||||||||||||||||||
| Revenue | $ | 168.4 | $ | 169.2 | — | % | $ | 291.9 | $ | 280.5 | 4% | |||||||||
| EBITDA | $ | 32.4 | $ | 39.7 | (18) | % | $ | 47.6 | $ | 48.9 | (3)% | |||||||||
| EBITDA margin | 19.3 | % | 23.4 | % | 16.3 | % | 17.4 | % | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| (In millions) | ||||||||||||||
| Revenues: | ||||||||||||||
Liquid Asphalt | $ | 147.1 | $ | 148.8 | $ | 256.6 | $ | 246.9 | ||||||
| Other* | 25.4 | 25.5 | 45.1 | 42.7 | ||||||||||
| Internal sales | (4.1) | (5.1) | (9.8) | (9.1) | ||||||||||
| $ | 168.4 | $ | 169.2 | $ | 291.9 | $ | 280.5 | |||||||
*Other includes fabric and spreading, burner fuels, merchandise and other products that individually are not considered to be a core line of business for the segment.
Three Months Ended September 30, 2026, Compared to Three Months Ended September 30, 2025
Revenue decreased $800,000, primarily driven by lower sales volumes in certain markets, offset in part by pricing and volume increases in California as a result of improved market opportunities.
EBITDA decreased $7.3 million, largely as a result of lower volumes as mentioned previously, and lower margins resulting from higher material input costs. These impacts were partially offset by lower railcar maintenance and other costs.
Nine Months Ended September 30, 2026, Compared to Nine Months Ended September 30, 2025
Revenue increased $11.4 million, primarily driven by pricing increases in California that resulted in $12.3 million in additional revenue due to improved market conditions. This increase was offset in part by lower volumes in other markets resulting from competitive market dynamics.
EBITDA decreased $1.3 million, primarily as a result of higher material input costs, partially offset by lower railcar maintenance and other costs.
Corporate Services and Eliminations
Corporate Services includes all expenses related to the corporate functions of our company, as well as insurance activity at our captive insurer; interest expense on a majority of our long-term debt; interest income; and unrealized gains or losses on investments for nonqualified benefit plans.
Three Months Ended September 30, 2026, Compared to Three Months Ended September 30, 2025
During the third quarter of 2026, Corporate Services contributed negative EBITDA of $13.5 million, which was comparable to the prior year, as a result of flat selling, general and administrative costs year-over-year. Unrealized losses on our nonqualified defined benefit plans compared to prior year gains and higher due diligence and integration costs related to corporate development and completed acquisitions were offset by a favorable insurance adjustment of $3.5 million in the quarter.
Nine Months Ended September 30, 2026, Compared to Nine Months Ended September 30, 2025
During the first nine months of 2026, Corporate Services contributed negative EBITDA of $44.8 million, which was comparable to the prior year, as a result of flat selling, general and administrative costs year-over-year. Lower due diligence and integration costs related to corporate development and completed acquisitions and a favorable insurance adjustment of $3.5 million, were offset by increased salaries and burden.
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Liquidity and Capital Resources
At September 30, 2026, we had unrestricted cash and cash equivalents of $118.0 million, working capital of $872.0 million and borrowing capacity of $448.2 million on our revolving credit facility, net of our outstanding letters of credit. Working capital is calculated as current assets less current liabilities. As of September 30, 2026, we had sufficient liquid assets and borrowing capacity to meet our financial commitments, debt obligations and anticipated capital expenditures for at least the next 12 months.
On May 15, 2026, we entered into a second amendment to our secured credit agreement, increasing our Term Loan B by an aggregate principal amount of $400.0 million and reducing the interest rate margin by 0.25%. After the second amendment, the aggregate principal amount of the Term Loan B outstanding was $895.0 million.
Given the seasonality of our business, we typically experience significant fluctuations in working capital needs and balances throughout the year. Working capital requirements generally increase in the first half of the year as we build up inventory and focus on preparing our equipment, facilities and crews for our construction season. Working capital levels then decrease as the construction season winds down and we collect on receivables.
The ability to fund our cash needs will depend on the ongoing ability to generate cash from operations and obtain debt financing with competitive rates. 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 business. Our principal uses of cash in the future will be to fund our operations, working capital needs, capital expenditures, repayment of debt, organic growth and strategic business development transactions.
Capital expenditures
We are committed to disciplined capital allocation, including reinvesting in our company to maintain fixed assets, improve operations and grow our business.
We currently estimate total 2026 capital expenditures for maintenance and improvement to be between $170 million and $200 million. For the nine months ended September 30, 2026, we spent $127.6 million, largely on the replacement of construction equipment and plant improvements.
Additionally, for the nine months ended September 30, 2026, we spent $266.7 million on growth initiatives, which consisted of $185.7 million on acquisitions and $81.0 million on aggregate expansion and greenfield projects. For the remainder of 2026, we estimate spending of $55.4 million on organic growth projects. Capital expenditures for future acquisitions and new organic growth opportunities would be incremental to our outlined capital program. It is anticipated that capital expenditures for the remainder of 2026 will be funded by various sources, including cash flows from operations and debt.
Cash flows
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2026 | 2025 | |||||||
| (In millions) | ||||||||
| Net cash provided by (used in) | ||||||||
| Operating activities | $ | 60.9 | $ | 82.6 | ||||
| Investing activities | (386.9) | (783.0) | ||||||
| Financing activities | 379.9 | 500.4 | ||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | 53.9 | (200.0) | ||||||
| Cash, cash equivalents and restricted cash -- beginning of year | 123.4 | 281.1 | ||||||
| Cash, cash equivalents and restricted cash -- end of period | $ | 177.3 | $ | 81.1 | ||||
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Operating activities
| Nine Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2026 | 2025 | Variance | ||||||||||||
| (In millions) | ||||||||||||||
| Components of net cash provided by operating activities: | ||||||||||||||
| Net income | $ | 102.6 | $ | 125.1 | $ | (22.5) | ||||||||
| Adjustments to reconcile net income to net cash provided by operating activities | 182.6 | 141.2 | 41.4 | |||||||||||
| Changes in current assets and liabilities, net of acquisitions: | ||||||||||||||
| Receivables | (346.2) | (267.5) | (78.7) | |||||||||||
| Inventories | (22.5) | (15.3) | (7.2) | |||||||||||
| Other current assets | 16.4 | 3.8 | 12.6 | |||||||||||
| Accounts payable | 97.3 | 72.5 | 24.8 | |||||||||||
| Other current liabilities | 30.5 | 16.7 | 13.8 | |||||||||||
| Pension and postretirement benefit plan contributions | (0.4) | (0.5) | 0.1 | |||||||||||
| Other noncurrent charges | 0.6 | 6.6 | (6.0) | |||||||||||
| Net cash provided by operating activities | $ | 60.9 | $ | 82.6 | $ | (21.7) | ||||||||
Cash provided by operating activities for the nine months ended September 30, 2026, decreased $21.7 million compared to the nine months ended September 30, 2025, largely related to higher working capital needs and a decrease in net income. Cash used by working capital components totaled $224.5 million for the nine months ended September 30, 2026, compared to $189.8 million for the nine months ended September 30, 2025. This increase in cash usage was primarily the result of higher working capital needs due to the increase in revenues, as discussed in Business Segment Financial and Operating Data, higher aggregate inventory balances, due in part to higher costs of aggregates inventory, and the timing of interest payments, primarily associated with the Term Loan B that was amended May 15, 2026. Partially offsetting these increases in cash usage is the timing of taxes paid and fluctuations in the timing of payments on accounts payable.
Investing activities
| Nine Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2026 | 2025 | Variance | ||||||||||||
| (In millions) | ||||||||||||||
| Capital expenditures | $ | (208.6) | $ | (290.3) | $ | 81.7 | ||||||||
| Acquisitions, net of cash acquired | (185.7) | (528.0) | 342.3 | |||||||||||
| Net proceeds from sale or disposition of property and other | 10.4 | 38.3 | (27.9) | |||||||||||
| Investments | (3.0) | (3.0) | — | |||||||||||
| Net cash used in investing activities | $ | (386.9) | $ | (783.0) | $ | 396.1 | ||||||||
The decrease in cash used in investing activities for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, was primarily the result of decreased cash used for acquisition activity and aggregate reserve replacements. The decrease in cash usage was offset in part by the absence of proceeds from the sale of ready-mix operations in the Central segment in the first quarter of 2025, as discussed in Note 10, and non-strategic asset sales in both the West and Central segments.
37
Financing activities
| Nine Months Ended | ||||||||||||||
| September 30, | ||||||||||||||
| 2026 | 2025 | Variance | ||||||||||||
| (In millions) | ||||||||||||||
| Issuance of long-term debt | $ | 400.0 | $ | 520.0 | $ | (120.0) | ||||||||
| Repayment of long-term debt | (10.9) | (5.9) | (5.0) | |||||||||||
| Debt issuance costs | (3.8) | (11.1) | 7.3 | |||||||||||
| Tax withholding on stock-based compensation | (5.4) | (2.6) | (2.8) | |||||||||||
| Net cash provided by financing activities | $ | 379.9 | $ | 500.4 | $ | (120.5) | ||||||||
Cash flows provided by financing activities for the nine months ended September 30, 2026, decreased compared to the nine months ended September 30, 2025. In the second quarter of 2026, we entered into a second amendment to our secured credit agreement, increasing our Term Loan B by an aggregate principal amount of $400 million, while in 2025 we issued a $500 million Term Loan B. We had no borrowings against our revolving credit facility as of September 30, 2026.
Material cash requirements
There were no material changes in the contractual obligations from those reported in the 2025 Annual Report other than as set forth below. For more information on our contractual obligations on long-term debt, operating leases and purchase commitments, see Part II, Item 8 in the 2025 Annual Report.
Our material short-term and long-term cash requirements include repayment of third-party long-term debt and related interest payments, payments on operating lease agreements, payments of obligations on purchase commitments and asset retirement obligations.
At September 30, 2026, our long-term debt reflected an increase of approximately $389.2 million from the balance at December 31, 2025. This increase is primarily due to the second amendment to our secured credit facility increasing our Term Loan B facility by $400.0 million. The funds from the Term Loan B were used to repay borrowings under the revolving credit agreement, working capital needs and general corporate purposes.
At September 30, 2026, our total estimated interest payments over the life of our debt reflected an increase of approximately $82.8 million from the total estimated interest payments at December 31, 2025. This increase is primarily due to the amendment to our Term Loan B facility and borrowings under our revolving credit facility, as previously mentioned.
Off-Balance Sheet Arrangements
Surety Bonds and Letters of Credit
In the normal course of business, we have surety bonds and letters of credit related to contracts for contracting services, reclamation obligations and insurance policies of our subsidiaries. In the event a subsidiary of Knife River does not fulfill a bonded obligation, we would be responsible to the surety bond company or for a draw on our letter of credit for completion of the contract or obligation. A large portion of the surety bonds are expected to expire within the next 12 months; however, we will likely continue to enter into surety bonds for our subsidiaries in the future. At September 30, 2026, approximately $765.8 million of surety bonds and $51.9 million of letters of credit were outstanding, of which the letters of credit balance reduced availability under our revolving credit facility. These balances were not reflected on the Consolidated Balance Sheet.
Other than the surety bonds and letters of credit above, we did not have any off-balance sheet arrangements as of September 30, 2026.
Defined benefit pension plans
We have frozen noncontributory qualified defined benefit pension plans for certain employees. Various assumptions are used in calculating the benefit expense (income) and liability (asset) related to these plans. Costs of providing these benefits are dependent upon assumptions of future conditions and bear the risk of changing.
In August 2026, the Company's board of directors approved the termination of our qualified noncontributory defined benefit pension plans with a termination date of November 30, 2026. We expect the termination process to extend through 2028 and include participant elections, regulatory filings, and the purchase of annuity contracts for certain participants.
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The termination is expected to reduce future administrative costs, compliance requirements and financial statement volatility associated with maintaining the plans. Upon completion of the settlement transactions, we expect to recognize previously unrecognized actuarial losses currently included in accumulated other comprehensive loss. The amount and timing of any future settlement charges have not been finalized and will depend on participant elections, annuity pricing, interest rates and other factors.
Aside from the termination, there were no material changes to our qualified noncontributory defined benefit pension plans from those reported in the 2025 Annual Report. We do not expect to make any pension plan contributions in 2026 as the plans are fully funded. For more information, see Part II, Item 8 in the 2025 Annual Report.
Non-GAAP Financial Measures
The Business Segment Financial and Operating Data 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. 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.
EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin are most directly comparable to the corresponding GAAP measures of net income (loss) and net income (loss) margin. We believe these non-GAAP financial measures, in addition to corresponding GAAP measures, are useful to investors by providing meaningful information about operational efficiency compared to our peers by excluding the impacts of differences in tax jurisdictions and structures, debt levels and capital investment. 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 unrealized gains and losses on benefit plan investments, stock-based compensation, 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 believe EBITDA and Adjusted EBITDA assist rating agencies and investors in comparing operating performance across operating periods on a consistent basis by excluding items management does not believe are indicative of our operating performance. Additionally, EBITDA and Adjusted EBITDA are important financial metrics for debt investors who utilize debt to EBITDA and debt to Adjusted EBITDA ratios. We believe these non-GAAP financial measures, including total segment measures, as applicable, are useful performance measures because they provide clarity as to our operational results. 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 (loss). EBITDA margin is calculated by dividing EBITDA by revenues. Adjusted EBITDA is calculated by adding back unrealized gains and losses on benefit plan investments, stock-based compensation and the impact of selling acquired inventory after markup to fair value as part of acquisition accounting to EBITDA. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenues. These non-GAAP financial measures are calculated the same for both the total segment and consolidated metrics and should not be considered as alternatives to, or more meaningful than, GAAP financial measures such as net income or net income margin, and are intended to be helpful supplemental financial measures for investors’ understanding of our operating performance. 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.
39
The following information reconciles segment and consolidated net income (loss) to EBITDA and Adjusted EBITDA and provides the calculation of EBITDA margin and Adjusted EBITDA margin. Interest expense, net, is net of interest income that is included in other income on the Consolidated Statements of Operations.
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||
| (In millions) | ||||||||||||||
| Net income | $ | 137.9 | $ | 143.2 | $ | 102.6 | $ | 125.1 | ||||||
| Depreciation, depletion and amortization | 55.7 | 53.4 | 164.1 | 142.4 | ||||||||||
| Interest expense, net | 23.9 | 22.4 | 68.1 | 57.1 | ||||||||||
| Income taxes | 50.7 | 50.2 | 38.3 | 42.9 | ||||||||||
| EBITDA | $ | 268.2 | $ | 269.2 | $ | 373.1 | $ | 367.5 | ||||||
| Unrealized (gains) losses on benefit plan investments | 1.0 | (1.1) | (1.5) | (2.2) | ||||||||||
| Stock-based compensation expense | 2.4 | 2.9 | 7.8 | 8.5 | ||||||||||
Impact of selling acquired inventory after markup to fair value as part of acquisition accounting | 0.1 | 1.8 | 0.2 | 3.3 | ||||||||||
| Adjusted EBITDA | $ | 271.7 | $ | 272.8 | $ | 379.6 | $ | 377.1 | ||||||
| Revenue | $ | 1,275.6 | $ | 1,203.7 | $ | 2,624.3 | $ | 2,390.9 | ||||||
| Net income margin | 10.8 | % | 11.9 | % | 3.9 | % | 5.2 | % | ||||||
| EBITDA margin | 21.0 | % | 22.4 | % | 14.2 | % | 15.4 | % | ||||||
| Adjusted EBITDA margin | 21.3 | % | 22.7 | % | 14.5 | % | 15.8 | % | ||||||
New Accounting Standards
For information regarding new accounting standards, see Note 3, which is incorporated by reference.
Critical Accounting Estimates
Our critical accounting estimates include revenue recognized using the cost-to-cost measure of progress for contracts; fair values of acquired assets and liabilities assumed under the acquisition method of accounting; impairment testing of goodwill; and impairment testing of long-lived assets excluding goodwill. There were no material changes in our critical accounting estimates from those that were previously reported in our 2025 Annual Report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to the impact of market fluctuations associated with interest rates and commodity prices. We have policies and procedures to assist in controlling these market risks and from time to time have utilized derivatives to manage a portion of our risk.
Interest rate risk
As of September 30, 2026, we had $1.1 billion of outstanding borrowings under our Term Loan A, Term Loan B and revolving credit facility, which bear interest at a variable rate. As of September 30, 2026, the weighted-average rate in effect was 5.62 percent, therefore, a hypothetical increase of 1.00 percent to the interest rate at September 30, 2026, would increase the all-in rate to 6.62 percent, the effect of which would increase the Company's interest expense by $11.5 million over the next 12 months based on the balances outstanding for these borrowings as of September 30, 2026.
At September 30, 2026, we had no outstanding interest rate hedges.
Commodity price risk
We are subject to commodity price risk with respect to price changes in diesel fuel, liquid asphalt and cement. Our annual costs associated with diesel fuel, liquid asphalt and cement in 2026, assuming comparable volumes to 2025, would be $727.0 million. Accordingly, a hypothetical 10 percent change in the prices of these commodities could increase or decrease, respectively, our operating costs for 2026 by $72.7 million based on the average per unit cost associated with diesel fuel, liquid asphalt and cement for the nine months ended September 30, 2026. We do not use any derivative or hedging instruments to manage commodity price risk. However, we generally use price increases, escalation clauses in construction services contracts, fuel surcharges and purchase commitments to mitigate the impacts of higher costs and reduce the impact to EBITDA, although these measures may not always be sufficient to offset these increased costs.
40
Item 4. Controls and Procedures
Evaluation of disclosure controls and procedures
The term "disclosure controls and procedures" is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. The Company's disclosure controls and other procedures are designed to provide reasonable assurance that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. The Company's disclosure controls and other procedures are designed to provide reasonable assurance that information required to be disclosed is accumulated and communicated to management, including the Company's chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure. The Company's management, with the participation of the Company's chief executive officer and chief financial officer, has evaluated the effectiveness of the Company's disclosure controls and other procedures as of the end of the period covered by this report. Based upon that evaluation, the chief executive officer and the chief financial officer have concluded that, as of the end of the period covered by this report, such controls and procedures were effective at a reasonable assurance level.
Changes in internal controls
We completed the acquisition of Morgan Asphalt, Inc. on February 26, 2026. Under the guidelines established by the SEC, companies are permitted to exclude acquisitions from their assessment of internal control over financial reporting during the first year of an acquisition while integrating the acquired company. We are in the process of assessing the internal controls over financial reporting of the acquired company and integrating them with our existing internal controls over financial reporting.
Except as noted above, there were no changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended September 30, 2026, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
41
Part II -- Other Information
Item 1. Legal Proceedings
For information regarding legal proceedings required by this item, see the discussion in Note 16 to our Consolidated Financial Statements, which is incorporated herein by reference.
Item 1A. Risk Factors
Refer to the Company's risk factors that are disclosed in Part I, Item 1A. Risk Factors in its 2025 Annual Report that could be materially harmful to the Company's business, prospects, financial condition or financial results if they occur.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
For information regarding mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K, see Exhibit 95 to this Form 10-Q, which is incorporated herein by reference.
Item 5. Other Information
During the three months ended September 30, 2026, no director or officer of the Company adopted terminated
Item 6. Exhibits
See the index to exhibits immediately preceding the signature page to this report.
42
| Exhibits Index | ||||||||||||||||||||||||||
| Incorporated by Reference | ||||||||||||||||||||||||||
| Exhibit Number | Exhibit Description | Filed Herewith | Furnished Herewith | Form | Period Ended | Exhibit | Filing Date | File Number | ||||||||||||||||||
3.1 | 8-K | 3.1 | 5/28/25 | 1-41642 | ||||||||||||||||||||||
3.2 | 8-K | 3.2 | 5/28/25 | 1-41642 | ||||||||||||||||||||||
10.1+ | X | |||||||||||||||||||||||||
31.1 | X | |||||||||||||||||||||||||
31.2 | X | |||||||||||||||||||||||||
| 32 | X | |||||||||||||||||||||||||
| 95 | X | |||||||||||||||||||||||||
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||||||||||||||||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | |||||||||||||||||||||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||||||||||||||||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||||||||||||||||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||||||||||||||||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||||||||||||||||||||
| + Management contract, compensatory plan or arrangement. | ||||||||||||||||||||||||||
43
Signatures
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Knife River Corporation | |||||||||||
| DATE: | November 3, 2026 | BY: | /s/ Nathan W. Ring | ||||||||
| Nathan W. Ring | |||||||||||
| Vice President and Chief Financial Officer | |||||||||||
| BY: | /s/ Peggy S. Rebstock | ||||||||||
| Peggy S. Rebstock | |||||||||||
| Vice President, Chief Accounting Officer and Controller | |||||||||||
44
CERTIFICATION
I, Brian R. Gray, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Knife River Corporation;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: November 3, 2026
/s/ Brian R. Gray
Brian R. Gray
President and Chief Executive Officer
CERTIFICATION
I, Nathan W. Ring, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Knife River Corporation;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: November 3, 2026
/s/ Nathan W. Ring
Nathan W. Ring
Vice President and Chief Financial Officer
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
Each of the undersigned, Brian R. Gray, the President and Chief Executive Officer, and Nathan W. Ring, the Vice President and Chief Financial Officer of Knife River Corporation (the "Company"), DOES HEREBY CERTIFY that:
1. The Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2026 (the "Report"), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
2. Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
IN WITNESS WHERE OF, each of the undersigned has executed this statement this 3rd day of November, 2026.
/s/ Brian R. Gray
Brian R. Gray
President and Chief Executive Officer
/s/ Nathan W. Ring
Nathan W. Ring
Vice President and Chief Financial Officer
A signed original of this written statement required by Section 906 has been provided to Knife River Corporation and will be retained by Knife River Corporation and furnished to the Securities and Exchange Commission or its staff upon request.
KNIFE RIVER CORPORATION
MINE SAFETY INFORMATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) requires issuers to include in periodic reports filed with the SEC certain information relating to citations or orders for violations of standards under the Federal Mine Safety and Health Act of 1977 (Mine Act), as amended by the Mine Improvement and New Emergency Response Act of 2006 (Mine Safety Act). The Dodd-Frank Act requires reporting of the following types of citations or orders:
1. Citations issued under Section 104 of the Mine Safety Act for violations that could significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard.
2. Orders issued under Section 104(b) of the Mine Safety Act. Orders are issued under this section when citations issued under Section 104 have not been totally abated within the time period allowed by the citation or subsequent extensions.
3. Citations or orders issued under Section 104(d) of the Mine Safety Act. Citations or orders are issued under this section when it has been determined that the violation is caused by an unwarrantable failure of the mine operator to comply with the standards. An unwarrantable failure occurs when the mine operator is deemed to have engaged in aggravated conduct constituting more than ordinary negligence.
4. Citations issued under Section 110(b)(2) of the Mine Safety Act for flagrant violations. Violations are considered flagrant for repeat or reckless failures to make reasonable efforts to eliminate a known violation of a mandatory health and safety standard that substantially and proximately caused, or reasonably could have been expected to cause, death or serious bodily injury.
5. Imminent danger orders issued under Section 107(a) of the Mine Safety Act. An imminent danger is defined as the existence of any condition or practice in a coal or other mine which could reasonably be expected to cause death or serious physical harm before such condition or practice can be abated.
6. Notice received under Section 104(e) of the Mine Safety Act of a pattern of violations or the potential to have such a pattern of violations that could significantly and substantially contribute to the cause and effect of mine health and safety standards.
During the three months ended September 30, 2026, none of our operating subsidiaries received citations or orders under the following sections of the Mine Safety Act: 104(b), 104(d), 110(b)(2), 107(a) or 104(e). We did not have any mining-related fatalities during this period.
| MSHA Identification Number/Contractor ID | Section 104 S&S Citations (#) | Total Dollar Value of MSHA Assessments Proposed ($) | Legal Actions Pending as of Last Day of Period (#) | Legal Actions Initiated During Period (#) | Legal Actions Resolved During Period (#) | |||||||||||||||||||||||||||
| 04-01774 | — | $ | 151 | — | — | — | ||||||||||||||||||||||||||
| 10-02088 | 1 | 615 | — | — | — | |||||||||||||||||||||||||||
| 21-03107 | — | 151 | — | — | — | |||||||||||||||||||||||||||
| 21-03185 | — | 151 | — | — | — | |||||||||||||||||||||||||||
| 21-03417 | — | 151 | — | — | — | |||||||||||||||||||||||||||
| 21-03419 | — | 151 | — | — | — | |||||||||||||||||||||||||||
| 21-03572 | 1 | — | — | — | — | |||||||||||||||||||||||||||
| 21-03626 | — | 151 | — | — | — | |||||||||||||||||||||||||||
| 21-03642 | — | 151 | — | — | — | |||||||||||||||||||||||||||
| 21-03645 | 2 | 418 | — | — | — | |||||||||||||||||||||||||||
| 32-00150 | 2 | — | — | — | — | |||||||||||||||||||||||||||
| 32-00151 | 1 | 499 | — | — | — | |||||||||||||||||||||||||||
| 32-00386 | — | 151 | — | — | — | |||||||||||||||||||||||||||
| 35-02968 | — | 151 | — | — | — | |||||||||||||||||||||||||||
| 35-03527 | — | 151 | — | — | — | |||||||||||||||||||||||||||
| 35-03594 | — | 151 | — | — | — | |||||||||||||||||||||||||||
| 35-03595 | — | 302 | — | — | — | |||||||||||||||||||||||||||
| 48-01383 | 1 | — | — | — | — | |||||||||||||||||||||||||||
| 51-00036 | 3 | — | — | — | — | |||||||||||||||||||||||||||
| 11 | $ | 3,495 | — | — | — | |||||||||||||||||||||||||||
Legal actions pending before the Federal Mine Safety and Health Review Commission (the Commission) may involve, among other questions, challenges by operators to citations, orders and penalties they have received from the Federal Mine Safety and
1
Health Administration (MSHA) or complaints of discrimination by miners under section 105 of the Mine Act. The following is a brief description of the types of legal actions that may be brought before the Commission.
•Contests of Citations and Orders - A contest proceeding may be filed with the Commission by operators, miners or miners' representatives to challenge the issuance of a citation or order issued by MSHA.
•Contests of Proposed Penalties (Petitions for Assessment of Penalties) - A contest of a proposed penalty is an administrative proceeding before the Commission challenging a civil penalty that MSHA has proposed for the alleged violation contained in a citation or order.
•Complaints for Compensation - A complaint for compensation may be filed with the Commission by miners entitled to compensation when a mine is closed by certain withdrawal orders issued by MSHA. The purpose of the proceeding is to determine the amount of compensation, if any, due miners idled by the orders.
•Complaints of Discharge, Discrimination or Interference - A discrimination proceeding is a case that involves a miner's allegation that he or she has suffered a wrong by the operator because he or she engaged in some type of activity protected under the Mine Act, such as making a safety complaint.
•Applications for Temporary Relief - Applications for temporary relief from any modification or termination of any order or from any order issued under section 104 of the Mine Act.
•Appeals of Judges' Decisions or Orders to the Commission - A filing with the Commission for discretionary review of a judge's decision or order by a person who has been adversely affected or aggrieved by such decision or order.
The following table reflects the types of legal actions pending before the Commission as of September 30, 2026:
| MSHA Identification Number | Contests of Citations and Orders | Contests of Proposed Penalties | Complaints for Compensation | Complaints of Discharge, Discrimination or Interference | Applications for Temporary Relief | Appeals of Judges' Decisions or Orders to the Commission | ||||||||||||||
| 35-00512 | — | 1 | — | — | — | — | ||||||||||||||
2
Knife River Corporation
Section 16 Officers and Directors
with Indemnification Agreements
As of September 29, 2026
Section 16 Officers
Name | Title | Date of Agreement | ||||||
Brian R. Gray | President and Chief Executive Officer | May 30, 2023 | ||||||
Trevor J. Hastings | Vice President and Chief Operating Officer | May 30, 2023 | ||||||
Sarah L. LaChapelle | Vice President and Chief People Officer | April 19, 2025 | ||||||
Karl A. Liepitz | Vice President, Chief Legal Officer and Secretary | May 30, 2023 | ||||||
Glenn R. Pladsen | Vice President and Chief Excellence Officer | May 30, 2023 | ||||||
Peggy S. Rebstock | Vice President, Chief Accounting Officer and Controller | May 21, 2026 | ||||||
Nathan W. Ring | Vice President and Chief Financial Officer | May 30, 2023 | ||||||
Directors
Name | Title | Date of Agreement | ||||||
German Carmona Alvarez | Director | May 30, 2023 | ||||||
Patricia Chiodo | Director | June 27, 2024 | ||||||
Karen B. Fagg | Director and Chair of the Board | May 30, 2023 | ||||||
Thomas W. Hill | Director | May 14, 2024 | ||||||
Patricia L. Moss | Director | May 30, 2023 | ||||||
William J. Sandbrook | Director | May 30, 2023 | ||||||