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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 March 31, 2026


☐			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

Knife River Corporation

(Exact name of registrant as specified in its charter)


Delaware						92-1008893
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1150 West Century Avenue

P.O. Box 5568

Bismarck, North Dakota 58506-5568

(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
Common Stock, $0.01 par value	KNF	New York Stock Exchange

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.


Large Accelerated Filer	☒	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 April 30, 2026: 56,753,855 shares.

Index


Index
			Page
Introduction			3
Part I -- Financial Information
Item 1. Financial Statements			4
Consolidated Statements of Operations -- Three Months Ended March 31 , 202 6 and 2025			4
Consolidated Statements of Comprehensive Income -- Three Months Ended March 31 , 202 6 and 2025			5
Consolidated Balance Sheets -- March 31 , 202 6 and 202 5 , and December 31, 2025			6
Consolidated Statements of Equity -- Three Months Ended M arch 31 , 202 6 and 2025			7
Consolidated Statements of Cash Flows -- T hree Months Ended March 31, 202 6 and 2025			8
Notes to Consolidated Financial Statements			9
1. Background			9
2. Basis of P resentation			9
3. New A ccounting S tandards			10
4. Receivables and Allowance for Expected Credit Losses			10
5. Inventories			11
6. Net Loss Per Share			12

7. Accumulated Other Comprehensive Loss			12
8. Revenue from Contracts with Customers			12
9. Uncompleted Contracts			13
10. Acquisitions and Dispositions			14

11. Goodwill and Other Intangible Assets			15
12. Fair Value Measurements			16
13. Debt			18

14. Cash Flow Information			19
15. Business Segment Data			19

16. Commitments and Contingencies			21



Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3. Quantitative and Qualitative Disclosures About Market Risk			34
Item 4. Controls and Procedures			34
Part II -- Other Information
Item 1. Legal Proceedings			35
Item 1A. Risk Factors			35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			35
Item 3. Defaults Upon Senior Securities			35
Item 4. Mine Safety Disclosures			35
Item 5. Other Information			35
Item 6. Exhibits			35
Exhibits Index			36
Signatures			37

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.

Index

Introduction

Knife River is an aggregates-based, vertically integrated construction materials and contracting services company with 1.3 billion tons of aggregate 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 aggregate 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.

Index

Part I -- Financial Information

Item 1. Financial Statements


Knife River Corporation
Consolidated Statements of Operations
(Unaudited)
	Three Months Ended
	March 31,
	2026		2025
	(In thousands, except per share amounts)
Revenue:
Construction materials	$	262,314	$	213,407
Contracting services	147,817		140,064
Total revenue	410,131		353,471
Cost of revenue:
Construction materials	272,943		233,763
Contracting services	139,960		129,303
Total cost of revenue	412,903		363,066
Gross loss	(2,772)		(9,595)
Selling, general and administrative expenses	83,461		73,058
Operating loss	(86,233)		(82,653)
Interest expense	20,741		15,263
Other (expense) income	(632)		4,567
Loss before income taxes	(107,606)		(93,349)
Income tax benefit	(28,430)		(24,639)
Net loss	$	(79,176)	$	(68,710)

Net loss per share
Basic	$	(1.40)	$	(1.21)
Diluted	$	(1.40)	$	(1.21)
Weighted average common shares outstanding:
Basic	56,710		56,626
Diluted	56,710		56,626

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

Index


Knife River Corporation
Consolidated Statements of Comprehensive Income
(Unaudited)
	Three Months Ended
	March 31,
	2026		2025
	(In thousands)
Net loss	$	(79,176)	$	(68,710)
Other comprehensive income:

Postretirement liability adjustment:

Amortization of postretirement liability losses included in net periodic benefit cost, net of tax of $41 and $20 for the three months ended March 31, 2026 and 2025, respectively.	127		63
Postretirement liability adjustment	127		63
Other comprehensive income	127		63
Comprehensive loss attributable to common stockholders	$	(79,049)	$	(68,647)

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

Index


Knife River Corporation
Consolidated Balance Sheets
(Unaudited)
	March 31, 2026		March 31, 2025		December 31, 2025
	(In thousands, except shares and per share amounts)
Assets
Current assets:
Cash, cash equivalents and restricted cash	$	75,458	$	138,482	$	123,418
Receivables, net	227,281		238,066		278,030
Contract assets	77,188		28,505		77,528

Inventories	480,531		467,051		435,714
Prepayments and other current assets	81,853		74,600		46,232
Total current assets	942,311		946,704		960,922
Noncurrent assets:


Net property, plant and equipment	2,158,337		1,743,513		2,028,933
Goodwill	573,093		449,554		519,668
Other intangible assets, net	38,144		41,967		32,680
Operating lease right-of-use assets	49,645		46,516		52,589
Investments and other	56,333		52,453		55,321
Total noncurrent assets	2,875,552		2,334,003		2,689,191
Total assets	$	3,817,863	$	3,280,707	$	3,650,113
Liabilities and Stockholders' Equity
Current liabilities:
Long-term debt - current portion	$	11,708	$	11,780	$	11,708

Accounts payable	131,353		111,962		145,581
Contract liabilities	30,301		42,016		33,773
Accrued compensation	23,068		18,983		44,253
Accrued interest	16,173		15,951		7,348
Current operating lease liabilities	15,632		13,398		15,942
Other taxes payable	14,308		14,195		11,252
Other accrued liabilities	109,745		93,781		108,132
Total current liabilities	352,288		322,066		377,989
Noncurrent liabilities:
Long-term debt	1,421,620		1,160,385		1,153,830

Deferred income taxes	292,273		221,588		287,917
Noncurrent operating lease liabilities	34,013		33,118		36,647
Other	158,344		135,966		152,790
Total liabilities	2,258,538		1,873,123		2,009,173
Commitments and contingencies
Stockholders' equity:
Common stock, 300,000,000 shares authorized, $0.01 par value, 57,184,991 shares issued and 56,753,855 shares outstanding at March 31, 2026; 57,083,497 shares issued and 56,652,361 shares outstanding at March 31, 2025; 57,095,301 shares issued and 56,664,165 shares outstanding at December 31, 2025	572		571		571
Other paid-in capital	627,070		621,042		629,637
Retained earnings	945,444		798,836		1,024,620

Treasury stock held at cost - 431,136 shares	(3,626)		(3,626)		(3,626)
Accumulated other comprehensive loss	(10,135)		(9,239)		(10,262)
Total stockholders' equity	1,559,325		1,407,584		1,640,940
Total liabilities and stockholders' equity	$	3,817,863	$	3,280,707	$	3,650,113

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

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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	57,095,301	$	571	$	629,637	$	1,024,620		(431,136)	$	(3,626)	$	(10,262)	$	1,640,940
Net loss	—	—		—		(79,176)			—	—		—		(79,176)
Other comprehensive income	—	—		—		—			—	—		127		127
Stock-based compensation expense	—	—		2,859		—			—	—		—		2,859
Common stock issued for employee compensation, net of tax withholding	89,690	1		(5,426)		—			—	—		—		(5,425)
At March 31, 2026	57,184,991	$	572	$	627,070	$	945,444		(431,136)	$	(3,626)	$	(10,135)	$	1,559,325

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


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	57,043,841	$	570	$	620,897	$	867,546		(431,136)	$	(3,626)	$	(9,302)	$	1,476,085
Net loss	—	—		—		(68,710)			—	—		—		(68,710)
Other comprehensive income	—	—		—		—			—	—		63		63
Stock-based compensation expense	—	—		2,799		—			—	—		—		2,799
Common stock issued for employee compensation, net of tax withholding	39,656	1		(2,654)		—			—	—		—		(2,653)
At March 31, 2025	57,083,497	$	571	$	621,042	$	798,836		(431,136)	$	(3,626)	$	(9,239)	$	1,407,584

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

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Knife River Corporation
Consolidated Statements of Cash Flows
(Unaudited)
	Three Months Ended
	March 31,
	2026		2025
	(In thousands)
Operating activities:
Net loss	$	(79,176)	$	(68,710)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, depletion and amortization	52,150		38,762
Deferred income taxes	(4,211)		437
Provision for credit losses	901		335
Amortization of debt issuance costs	979		787
Employee stock-based compensation costs	2,859		2,799
Pension and postretirement benefit plan net periodic benefit cost	464		360
Unrealized losses on investments	760		692
Gains on sales of assets	(1,981)		(2,410)
Gain on bargain purchase	—		(3,547)
Equity in (losses) earnings of unconsolidated affiliates	(165)		15
Changes in current assets and liabilities, net of acquisitions:
Receivables	52,549		41,081

Inventories	(41,095)		(50,360)
Other current assets	(33,469)		(35,473)
Accounts payable	(5,285)		(12,772)

Other current liabilities	(8,455)		(40,255)
Pension and postretirement benefit plan contributions	(137)		(158)
Other noncurrent changes	4,762		3,140
Net cash used in operating activities	(58,550)		(125,277)
Investing activities:
Capital expenditures	(77,316)		(74,958)
Acquisitions, net of cash acquired	(174,228)		(443,439)
Net proceeds from sale or disposition of property and other	3,101		17,524
Investments	(2,612)		(2,760)
Net cash used in investing activities	(251,055)		(503,633)
Financing activities:


Issuance of long-term debt	270,000		500,000
Repayment of long-term debt	(2,930)		(19)
Debt issuance costs	—		(11,070)

Tax withholding on stock-based compensation	(5,425)		(2,653)
Net cash provided by financing activities	261,645		486,258
Decrease in cash, cash equivalents and restricted cash	(47,960)		(142,652)
Cash, cash equivalents and restricted cash -- beginning of year	123,418		281,134
Cash, cash equivalents and restricted cash -- end of period	$	75,458	$	138,482

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

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Knife River Corporation

Notes to Consolidated

Financial Statements

March 31, 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

The accompanying consolidated interim financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Interim financial statements do not include all disclosures provided in annual financial statements and, accordingly, these financial statements should be read in conjunction with the Company's 2025 Annual Report on Form 10-K (Annual Report). The information is unaudited but includes adjustments that are, in the opinion of management, necessary for a fair presentation of the accompanying consolidated interim financial statements and are of a normal recurring nature.

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 March 31, 2026, up to the date of issuance of these consolidated interim financial statements on May 5, 2026, that would require recognition or disclosure in the Consolidated Financial Statements.

Principles of consolidation

For all periods, the audited 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 audited 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 under the acquisition method of accounting; aggregate 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.

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Cash, cash equivalents and restricted cash

We consider all highly liquid investments with an original maturity of three months or less, when purchased, to be cash and cash equivalents. Restricted cash represents deposits held by our captive insurance company that is required by state insurance regulations to remain in the captive insurance company. Cash, cash equivalents and restricted cash on the Consolidated Balance Sheets is comprised of:


	March 31, 2026		March 31, 2025		December 31, 2025
	(In thousands)
Cash and cash equivalents	$	13,346	$	86,118	$	73,821
Restricted cash	62,112		52,364		49,597
Cash, cash equivalents and restricted cash	$	75,458	$	138,482	$	123,418

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:


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

Receivables consist primarily of trade and contract receivables for the sale of goods and services net of expected credit losses. A majority of our receivables are due in 30 days or less. The total balance of receivables past due 90 days or more was $23.2 million, $27.3 million and $15.3 million at March 31, 2026, March 31, 2025 and December 31, 2025, respectively. Receivables were as follows:


	March 31, 2026		March 31, 2025		December 31, 2025
	(In thousands)
Trade receivables	$	139,789	$	122,828	$	155,836
Contract receivables	92,547		119,556		127,383

Receivables, gross	232,336		242,384		283,219
Less expected credit loss	5,055		4,318		5,189
Receivables, net	$	227,281	$	238,066	$	278,030

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 performed at least quarterly. We develop and document our methodology to determine our allowance for expected credit losses. Risk characteristics used by management may include customer mix, knowledge of customers and general economic conditions of

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the various local economies, among others. Specific account balances are written off when management determines the amounts to be uncollectible. Management has reviewed the balance reserved through the allowance for expected credit losses and believes it is reasonable.

Details of our expected credit losses were as follows:


	West		Mountain		Central		Energy Services		Total
	(In thousands)
As of December 31, 2025	$	2,405	$	274	$	1,602	$	908	$	5,189
Current expected credit loss provision	67		(34)		70		37		140
Less write-offs charged against the allowance	174		52		11		37		274

At March 31, 2026	$	2,298	$	188	$	1,661	$	908	$	5,055


	West		Mountain		Central		Energy Services		Total
	(In thousands)
As of December 31, 2024	$	2,478	$	780	$	921	$	166	$	4,345
Current expected credit loss provision	—		42		30		263		335
Less write-offs charged against the allowance	73		8		18		263		362

At March 31, 2025	$	2,405	$	814	$	933	$	166	$	4,318

Note 5 - Inventories

Inventories on the Consolidated Balance Sheets were as follows:


	March 31, 2026		March 31, 2025		December 31, 2025
	(In thousands)
Finished products	$	319,045	$	299,032	$	304,281
Raw materials	114,830		126,949		91,069
Supplies and parts	46,656		41,070		40,364
Total	$	480,531	$	467,051	$	435,714

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 aggregate 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.

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Note 6 - Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the applicable period. Diluted earnings per share is computed by dividing net loss by the total of the weighted average number of shares of common stock outstanding during the applicable period, plus the effect of non-vested performance shares and restricted stock units. Our potentially dilutive securities have been excluded from the computation of diluted net loss per share as the effect would reduce the net loss per share and is considered antidilutive. Basic and diluted net loss per share are calculated as follows, based on a reconciliation of the weighted-average common shares outstanding on a basic and diluted basis:


	Three Months Ended
	March 31,
	2026		2025
	(In thousands, except per share amounts)
Net loss	$	(79,176)	$	(68,710)
Weighted average common shares outstanding - basic	56,710		56,626
Effect of dilutive performance shares and restricted stock units	—		—
Weighted average common shares outstanding - diluted	56,710		56,626
Shares excluded from the calculation of diluted loss per share	173		274
Net loss per share-basic	$	(1.40)	$	(1.21)
Net loss per share-diluted	$	(1.40)	$	(1.21)

Note 7 - Accumulated Other Comprehensive Loss

Comprehensive income (loss) is comprised of net income (loss) and other comprehensive income (loss). The only component of other comprehensive income (loss) is the amortization of postretirement liability losses for our benefit plans. As of March 31, 2026 and 2025, and December 31, 2025, accumulated other comprehensive loss was $10.1 million, $9.2 million and $10.3 million, respectively.

For the three months ended March 31, 2026 and 2025, we amortized $127,000 and $63,000, respectively, of expense into other income, and $41,000 and $20,000, 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.

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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 March 31, 2026	West		Mountain		Central		Energy Services		Corporate Services and Eliminations		Total
	(In thousands)
Aggregates	$	64,772	$	13,564	$	25,177	$	—	$	—	$	103,513
Ready-mix concrete	73,951		22,636		47,958		—		—		144,545
Asphalt	12,759		2,797		5,419		—		—		20,975
Liquid asphalt	—		—		—		18,192		—		18,192
Other	34,609		1		4,017		4,029		3,932		46,588
Contracting services public-sector	47,406		40,041		26,609		—		—		114,056
Contracting services private-sector	20,363		10,805		2,593		—		—		33,761
Internal sales	(42,876)		(8,608)		(10,579)		(5,642)		(3,794)		(71,499)
Revenues from contracts with customers	$	210,984	$	81,236	$	101,194	$	16,579	$	138	$	410,131


Three Months Ended March 31, 2025	West		Mountain		Central		Energy Services		Corporate Services and Eliminations		Total
	(In thousands)
Aggregates	$	56,257	$	8,043	$	17,092	$	—	$	—	$	81,392
Ready-mix concrete	69,780		13,087		25,591		—		—		108,458
Asphalt	8,866		498		6,770		—		—		16,134
Liquid asphalt	—		—		—		12,228		—		12,228
Other	34,406		3		2,418		2,995		3,669		43,491
Contracting services public-sector	38,772		36,179		24,276		—		—		99,227
Contracting services private-sector	28,836		11,829		172		—		—		40,837
Internal sales	(28,899)		(3,645)		(8,478)		(3,678)		(3,596)		(48,296)
Revenues from contracts with customers	$	208,018	$	65,994	$	67,841	$	11,545	$	73	$	353,471

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:


	March 31, 2026		December 31, 2025		Change
	(In thousands)
Contract assets1	$	77,188	$	77,528	$	(340)
Contract liabilities1	(30,301)		(33,773)		3,472
Net contract assets	$	46,887	$	43,755	$	3,132

1Following 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.

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	March 31, 2025		December 31, 2024		Change
	(In thousands)
Contract assets	$	28,505	$	31,283	$	(2,778)
Contract liabilities	(42,016)		(42,126)		110
Net contract liabilities	$	(13,511)	$	(10,843)	$	(2,668)

We recognized $27.6 million in revenue for the three months ended March 31, 2026, which was previously included in contract liabilities at December 31, 2025. We recognized $28.2 million in revenue for the three months ended March 31, 2025, which was previously included in contract liabilities at December 31, 2024.

We recognized a net increase in revenues of $4.2 million and $8.0 million for the three months ended March 31, 2026 and 2025, respectively, from performance obligations satisfied in prior periods.

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 March 31, 2026, our remaining performance obligations were $1.2 billion. We expect to recognize the following revenue amounts in future periods related to these remaining performance obligations: $913.9 million within the next 12 months or less; $155.3 million within the next 13 to 24 months; and $99.6 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.

As of March 31, 2026, the estimated fair value of the assets acquired and liabilities for the acquisitions completed in 2026 were considered provisional as we continue to gather information to finalize the valuation of these assets and liabilities. The fair values 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 aggregate reserves. The fair value of aggregate 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 three months of 2026, we completed the following three acquisitions:

•Two Montana aggregates-based operations within the Mountain segment; one operation consists of a ready-mix concrete business supported by owned aggregate reserves, while the other includes owned aggregate reserves, ready-mix operations and precast concrete manufacturing capabilities.

•A Utah aggregates-based company in the Mountain segment that consists of owned aggregate reserves, asphalt production and contracting services; this acquisition expanded our footprint into a new state.

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The aggregated purchase consideration for these three acquisitions was $174.2 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 $8.6 million of current assets; $120.8 million of assets in property, plant and equipment; $54.2 million of goodwill; $5.3 million of intangible assets, which included $4.1 million of backlog and $1.2 million of customer relationships; $8.5 million deferred income tax liability; $5.7 million of current liabilities; and $547,000 of noncurrent liabilities - other. The revenue and net income (loss) of these acquisitions was immaterial for the three months ended March 31, 2026.

During 2025, we completed five acquisitions with an aggregated purchase price of $622.2 million, subject to future post-closing adjustments. As of March 31, 2026, the purchase accounting was complete on three of the acquisitions and no material adjustments were needed. During the first quarter 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.

For the three months ended March 31, 2026 and 2025, we incurred acquisition-related costs on completed and other potential acquisitions of $2.0 million and $5.3 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 March 31, 2026
	(In thousands)
West	$	137,575	$	—	$	306	$	137,881
Mountain	26,816		54,205		—		81,021
Central	323,903		—		(1,086)		322,817
Energy Services	31,374		—		—		31,374
Total	$	519,668	$	54,205	$	(780)	$	573,093


	Balance at January 1, 2025		Goodwill Acquired During the Year		Measurement Period Adjustments		Balance at March 31, 2025
	(In thousands)
West	$	123,674	$	—	$	—	$	123,674
Mountain	26,816		—		—		26,816
Central	115,322		152,329		—		267,651
Energy Services	31,413		—		—		31,413
Total	$	297,225	$	152,329	$	—	$	449,554


	Balance at January 1, 2025		Goodwill Acquired During the Year		Measurement Period Adjustments		Balance at December 31, 2025
	(In thousands)
West	$	123,674	$	11,904	$	1,997	$	137,575
Mountain	26,816		—		—		26,816
Central	115,322		212,962		(4,381)		323,903
Energy Services	31,413		—		(39)		31,374
Total	$	297,225	$	224,866	$	(2,423)	$	519,668

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Other amortizable intangible assets were as follows:


	March 31, 2026		March 31, 2025		December 31, 2025
	(In thousands)
Customer relationships	$	33,030	$	30,703	$	34,699
Less accumulated amortization	14,064		11,798		15,789
	18,966		18,905		18,910
Noncompete agreements	2,655		3,107		3,107
Less accumulated amortization	2,502		2,743		2,904
	153		364		203
Tradename	7,470		7,470		7,470
Less accumulated amortization	1,058		188		871
	6,412		7,282		6,599
Backlog	7,517		9,890		10,395
Less accumulated amortization	754		32		9,052
	6,763		9,858		1,343
Other	6,220		6,688		5,968
Less accumulated amortization	370		1,130		343
	5,850		5,558		5,625
Total	$	38,144	$	41,967	$	32,680

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 months ended March 31, 2026 and 2025 was $3.1 million and $1.1 million, respectively. Estimated amortization expense for identifiable intangible assets as of March 31, 2026, was:


	Remainder of 2026		2027		2028		2029		2030		Thereafter
	(In thousands)
Amortization expense	$	9,830	$	4,823	$	4,335	$	3,731	$	2,940	$	12,485

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

We measure our investments in certain fixed-income and equity securities at fair value with changes in fair value recognized in income. We anticipate using these investments, which consist of insurance contracts, to satisfy our obligations under our unfunded, nonqualified defined benefit and defined contribution plans for our executive officers and certain key management employees, and invest in these fixed-income and equity securities for the purpose of earning investment returns and capital appreciation. These investments, which totaled $35.7 million, $30.5 million and $34.0 million at March 31, 2026 and 2025, and December 31, 2025, respectively, are classified as investments on the Consolidated Balance Sheets. The net unrealized losses on these investments were $761,000 and $692,000 for the three months ended March 31, 2026 and 2025, respectively. The change in fair value, which is considered part of the cost of the plan, is classified in other income on the Consolidated Statements of Operations.

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The Company's assets measured at fair value on a recurring basis were as follows:


	Fair Value Measurements at March 31, 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 March 31, 2026
	(In thousands)
Assets:
Money market funds	$	—	$	2,799	$	—	$	2,799
Insurance contracts	—		35,707		—		35,707




Total assets measured at fair value	$	—	$	38,506	$	—	$	38,506


	Fair Value Measurements at March 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 March 31, 2025
	(In thousands)
Assets:
Money market funds	$	—	$	4,125	$	—	$	4,125
Insurance contracts	—		30,451		—		30,451




Total assets measured at fair value	$	—	$	34,576	$	—	$	34,576


	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	$	—	$	2,775	$	—	$	2,775
Insurance contracts	—		33,982		—		33,982




Total assets measured at fair value	$	—	$	36,757	$	—	$	36,757

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 March 31, 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.

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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:


	March 31, 2026		March 31, 2025		December 31, 2025
	(In thousands)
Carrying amount	$	1,448,212	$	1,189,931	$	1,181,142
Fair value	$	1,463,925	$	1,208,611	$	1,202,247

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 March 31, 2026. In the event we do not comply with the applicable covenants and other conditions, alternative sources of funding may need to be pursued.

Long-term Debt Outstanding Long-term debt outstanding was as follows:


	Weighted Average Interest Rate at March 31, 2026		March 31, 2026		March 31, 2025		December 31, 2025
			(In thousands)
Term loan A agreement due on March 7, 2030	5.45	%	$	258,070	$	264,688	$	259,725
Term loan B agreement due on March 8, 2032	5.67	%	495,000		500,000		496,250
Revolving credit agreement	6.46	%	270,000		—		—
Senior notes due on May 1, 2031	7.75	%	425,000		425,000		425,000
Other notes due on January 1, 2061	—	%	141		243		167
Less unamortized debt issuance costs			14,883		17,766		15,604
Total long-term debt			1,433,328		1,172,165		1,165,538
Less current maturities			11,708		11,780		11,708
Net long-term debt			$	1,421,620	$	1,160,385	$	1,153,830

Schedule of Debt Maturities Long-term debt maturities, which excludes unamortized debt issuance costs, at March 31, 2026, were as follows:


	Remainder of 2026		2027		2028		2029		2030		Thereafter
	(In thousands)
Long-term debt maturities	$	8,803	$	16,631	$	18,234	$	23,197	$	485,096	$	896,250

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Note 14 - Cash Flow Information

Cash expenditures for interest and income taxes were as follows:


	Three Months Ended
	March 31,
	2026		2025
	(In thousands)
Interest paid, net	$	10,985	$	4,731
Income taxes paid, net	$	41	$	2,883

Noncash investing and financing transactions were as follows:


	Three Months Ended
	March 31,
	2026		2025
	(In thousands)
Property, plant and equipment additions in accounts payable	$	8,673	$	5,023
Right-of-use assets obtained in exchange for new operating lease liabilities	$	1,587	$	1,179
Accrual for holdback payment related to a business combination	$	5,695	$	—

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.

Three of our reportable segments are aligned by key geographic areas due to the production of construction materials and related contracting services and one is based on product line. Each segment is led by a segment manager who reports to our chief operating officer, who is also our chief operating decision maker, along with the chief executive officer. Our chief operating decision maker uses EBITDA to evaluate the performance of the segments, perform analytical comparisons to budget and uses historical and projected EBITDA to allocate resources, including capital allocations.

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 aggregate-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 audited consolidated financial statements.

The preceding information follows 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:

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	Three Months Ended March 31, 2026										Three Months Ended March 31, 2025
	West		Mountain		Central		Energy Services		Total		West		Mountain		Central		Energy Services		Total
	(In thousands)
Revenues from external customers	$	210,984	$	81,236	$	101,194	$	16,579	$	409,993	$	208,018	$	65,994	$	67,841	$	11,545	$	353,398
Intersegment revenues	793		—		13		3,870		4,676		274		—		13		2,398		2,685
Total segment revenue	211,777		81,236		101,207		20,449		414,669		208,292		65,994		67,854		13,943		356,083

Other revenues1									512										530
Less: Elimination of intersegment revenue									5,050										3,142
Total consolidated revenue									$	410,131									$	353,471

Cost of revenue excluding depreciation, depletion and amortization	166,014		77,766		104,776		21,336				165,013		72,955		73,655		17,617
Selling, general and administrative expenses excluding depreciation, depletion and amortization	23,090		11,663		23,270		3,713				21,646		9,299		18,470		4,099
Other segment items2	(461)		(29)		5		(29)				3,281		(7)		(21)		(29)
Total segment EBITDA	$	22,212	$	(8,222)	$	(26,834)	$	(4,629)	$	(17,473)	$	24,914	$	(16,267)	$	(24,292)	$	(7,802)	$	(23,447)

Consolidated loss before income taxes									(107,606)										(93,349)
Plus:
Depreciation, depletion and amortization									52,150										38,762
Interest expense, net3									20,066										13,123
Less unallocated amounts:
Other corporate revenue									139										73
Other corporate expenses									(18,056)										(18,090)
Total segment EBITDA									$	(17,473)									$	(23,447)

Capital expenditures	$	10,396	$	19,243	$	29,350	$	2,198	$	61,187	$	26,921	$	13,929	$	25,893	$	1,617	$	68,360
Assets	$	1,483,533	$	564,497	$	1,348,898	$	272,557	$	3,669,485	$	1,265,438	$	350,259	$	1,138,931	$	285,681	$	3,040,309
Other assets									5,478,819										4,778,400
Elimination of intercompany receivables and investment in subsidiaries									5,330,441										4,538,002
Total consolidated assets									$	3,817,863									$	3,280,707
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.

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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 March 31, 2026 and 2025, and December 31, 2025, we accrued contingent liabilities as a result of litigation, which have not been discounted, of $3.2 million, $3.4 million and $3.3 million, respectively. At March 31, 2026, we also recorded corresponding insurance receivables of $145,000. At March 31, 2025 and December 31, 2025, there were no corresponding insurance receivables recorded. The accruals are for contingencies, including litigation and environmental matters. Most of these claims and lawsuits are covered by insurance, thus our exposure is typically limited to our deductible amount. We will continue to monitor each matter and adjust accruals as might be warranted based on new information and further developments. Management believes that the outcomes with respect to probable and reasonably possible losses in excess of the amounts accrued, net of insurance recoveries, while uncertain, either cannot be estimated or will not have a material effect upon the Company's financial position, results of operations or cash flows. Unless otherwise required by GAAP, legal costs are expensed as they are incurred.

Environmental matters

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 March 31, 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 March 31, 2026.

We have outstanding letters of credit to third parties related to insurance policies and other agreements. At March 31, 2026, the fixed maximum amounts guaranteed under these letters of credit aggregated to $51.8 million. At March 31, 2026, the amounts of scheduled expiration of the maximum amounts guaranteed under these letters of credit aggregate to $756,000 in 2026, $50.9 million in 2027, and $175,000 in 2028. There were no amounts outstanding under the previously mentioned letters of credit at March 31, 2026.

In the normal course of business, we have surety bonds related to contracts for contracting services, reclamation obligations and insurance policies of its 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 March 31, 2026, approximately $990.4 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

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains 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 all statements other than statements of historical fact, including without limitation those statements that are identified by the words "anticipates," "estimates," "expects," "intends," "plans," "predicts" and similar expressions, and include statements concerning plans, projections, objectives, goals, strategies, future events or performance, and underlying assumptions (many of which are based, in turn, upon further assumptions) and other statements that are other than statements of historical facts. From time to time, Knife River Corporation ("Knife River," the "Company," "we," "our," or "us") may publish or otherwise make available forward-looking statements of this nature, including statements related to its Competitive EDGE strategy (EDGE) implemented to improve margins and to execute on other strategic initiatives aimed at generating long-term profitable growth, shareholder value creation, expected long-term goals, expected backlog margin, acquisitions, financing plans, expected federal and state funding for infrastructure or other proposed strategies.

Forward-looking statements involve risks and uncertainties, which could cause actual results or outcomes to differ materially from those expressed. Our expectations, beliefs and projections are expressed in good faith and are believed to have a reasonable basis, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Nonetheless, our expectations, beliefs or projections may not be achieved or accomplished and changes in such assumptions and factors could cause actual future results to differ materially.

Any forward-looking statement contained in this document speaks only as of the date on which the statement is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances that occur after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as required by law. 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 our 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 our 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) and subsequent filings with the United States Securities and Exchange Commission (SEC).

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 aggregate quarries and mines, ready-mix concrete plants, asphalt plants and distribution facilities, in the following states:

•West: Alaska, California, Hawaii, Oregon and Washington

•Mountain: Idaho, Montana, 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

Mountain

Central

Energy Services

Market Conditions and Outlook

Federal and state funding remains strong 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:


	March 31, 2026		March 31, 2025		December 31, 2025
	(In millions)
West	$	180.3	$	242.1	$	203.6
Mountain	500.4		418.3		395.7
Central	488.1		278.3		432.8

	$	1,168.8	$	938.7	$	1,032.1

Expected margins on backlog at March 31, 2026, were lower compared to the expected margins on backlog at March 31, 2025. Of the $1.2 billion of backlog at March 31, 2026, we expect to complete approximately $914 million in the 12 months following March 31, 2026. Approximately 88 percent of our backlog at March 31, 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). Further, there continues to be infrastructure development, as discussed in the following section on Public Funding, which is expected to continue to provide bidding opportunities in our markets.

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. Currently, states have continued moving forward with allocating funds from federal programs, such as the Infrastructure Investment and Jobs Act (IIJA), which is authorized to provide $1.2 trillion in funding from 2022 through 2026. As of March 2026, approximately 43 percent of IIJA formula funding had yet to be spent in our 15 state operating market. While each market is unique, the DOT budgets in most of the states where we operate remain strong. Eleven of our 15 states have record DOT budgets for the 2026 fiscal year, representing a combined 15 percent increase over 2025.

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.

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

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teams to deliver training, support higher-margin bidding opportunities across regions and pursue targeted growth opportunities. Process Improvement Teams ("PIT Crews") have focused on improving operational efficiencies, reducing production costs across our materials product lines and optimizing product quality. In addition, we are rolling out new technologies designed to increase productivity and provide enhanced, real-time visibility into daily operations.

We could be subject to downward pressure on our margins due to competitive forces and fluctuations in the prices of raw materials, including diesel fuel, gasoline, natural gas, liquid asphalt, cement and steel. To help offset these pressures, we have utilized various mitigation 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. During the first quarter of 2026, our teams were successful with these mitigating controls and we have not seen a material impact to our results of operations as a result of the conflict in Iran. We will continue to monitor the effects these economic conditions could have on our business.

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 the first quarter of 2026, we finalized three acquisitions within the Mountain region. Two of these transactions will allow us to broaden our presence in Montana, enhancing our ability to supply aggregates and ready-mix concrete to the expanding market in western Montana. Additionally, the acquisition of Morgan Asphalt marks our entry into the Utah market. This acquisition includes 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 are investing in multiple organic projects, including an aggregates expansion project in South Dakota that will increase our production capabilities in the Sioux Falls market. This project is scheduled to be operational in 2027. In Twin Falls, Idaho, we greenfielded new ready-mix operations, which allows us to build a local team in this higher-growth market. The Twin Falls plant is expected to be fully operational in the second quarter of 2026.

Seasonality. We typically experience seasonal losses in the first quarter 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. For this reason, we see more pre-production activity and site improvements in the first quarter as we prepare for the upcoming construction season, which provides a benefit to us for the remainder of the year as volumes and sales increase. Some of this pre-production work includes stripping and harvesting at our aggregate sites as well as repairing and mobilizing equipment.

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
	March 31,
	2026		2025		% Change
	(In millions)
Revenue	$	410.1	$	353.5	16	%
Cost of revenue	412.9		363.1		14	%
Gross loss	(2.8)		(9.6)		71	%
Selling, general and administrative expenses	83.5		73.1		14	%
Operating loss	(86.3)		(82.7)		(4)	%
Interest expense	20.7		15.3		35	%
Other (expense) income	(0.6)		4.6		(113)	%
Loss before income taxes	(107.6)		(93.4)		(15)	%
Income tax benefit	(28.4)		(24.7)		(15)	%
Net loss	$	(79.2)	$	(68.7)	(15)	%

EBITDA*	$	(35.4)	$	(41.5)	15	%
Adjusted EBITDA*	$	(31.8)	$	(38.0)	16	%

*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 (loss) 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 (expense) 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; gain on bargain purchase; and other miscellaneous income or expenses.

Income tax (benefit) expense 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
	March 31,
	2026				2025
	Dollars		Margin		Dollars		Margin
	(In millions)
Revenues by segment:
West	$	211.8			$	208.3
Mountain	81.2				66.0
Central	101.2				67.9
Energy Services	20.4				13.9
Total segment revenues	414.6				356.1
Corporate Services and Eliminations	(4.5)				(2.6)
Consolidated revenues	$	410.1			$	353.5

EBITDA (a):
West	$	22.2	10.5	%	$	24.9	12.0	%
Mountain	(8.2)		(10.1)	%	(16.3)		(24.6)	%
Central	(26.8)		(26.5)	%	(24.3)		(35.8)	%
Energy Services	(4.6)		(22.6)	%	(7.8)		(56.0)	%
Total segment EBITDA (a)	(17.4)		(4.2)	%	(23.5)		(6.6)	%
Corporate Services and Eliminations (b)	(18.0)		N.M.		(18.0)		N.M.
Consolidated EBITDA (a)	$	(35.4)	(8.6)	%	$	(41.5)	(11.7)	%

(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
	March 31,
	2026		2025
Sales (thousands):
Aggregates (tons)	4,878		3,867
Ready-mix concrete (cubic yards)	724		544
Asphalt (tons)	283		199

Average selling price:*
Aggregates (per ton)	$	21.22	$	21.05
Ready-mix concrete (per cubic yard)	$	199.76	$	199.26
Asphalt (per ton)	$	74.06	$	81.05

*The average selling price includes freight and delivery and other revenues.

Index


	Three Months Ended
	March 31,
	2026				2025
	Dollars		Margin		Dollars		Margin
	(In millions)
Revenues by product line:
Aggregates	$	103.5			$	81.4
Ready-mix concrete	144.5				108.5
Asphalt	21.0				16.1
Liquid asphalt	18.2				12.2
Other*	46.6				43.5
Contracting services	147.8				140.1
Internal sales	(71.5)				(48.3)
Total revenues	$	410.1			$	353.5

Gross (loss) profit by product line:
Aggregates	$	(3.7)	(3.5)	%	$	(6.0)	(7.4)	%
Ready-mix concrete	15.5		10.7	%	8.7		8.1	%
Asphalt	(4.9)		(23.6)	%	(5.7)		(35.4)	%
Liquid asphalt	(2.7)		(15.0)	%	(4.2)		(34.3)	%
Other*	(14.8)		(31.8)	%	(13.2)		(30.3)	%
Contracting services	7.8		5.3	%	10.8		7.7	%
Total gross loss	$	(2.8)	(0.7)%		$	(9.6)	(2.7)%

*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 March 31, 2026, Compared to Three Months Ended March 31, 2025

Revenue

Revenue increased $56.6 million, led mostly by ready-mix volumes contributing $35.8 million to the increase followed by an increase in aggregate volumes of $21.5 million, largely driven by recent acquisitions as well as favorable weather allowing for early season contracting services work. Partially offsetting the increased revenue was lower volumes in Hawaii due to significant flooding in the state.

Gross loss

Gross loss improved $6.8 million, largely the result of higher revenues noted above, as well as a decrease in maintenance and pre-production costs.

Selling, general and administrative expenses

As a percentage of revenues, selling, general and administrative expense was 20.4 percent in the first quarter of 2026 compared to 20.7 percent in 2025. Due to the seasonality of our operations, our first quarter selling, general and administrative costs as a percent of revenue are higher than our annualized costs. For the first quarter of 2026, we experienced higher costs, largely as a result of the additional costs associated with the companies acquired in 2025 and the first quarter of 2026, including additional payroll and payroll-related costs and $2.1 million higher purchase accounting-related intangible asset amortization.

Interest expense

Interest expense increased $5.4 million due primarily to higher average debt balances with the issuance of a Term Loan B in March of 2025 and borrowings under our revolving credit facility, offset in part by lower average interest rates.

Other income (expense)

Other income decreased $5.2 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 prior year, as well as decreased interest income as a result of less cash on hand.

Income tax benefit

Income tax benefit increased $3.7 million, corresponding with higher loss before income taxes. Our effective tax rate for 2026 and 2025 was 26.4 percent.

Index

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
	March 31,
	2026			2025			% Change
	(In millions)
Revenue	$	211.8		$	208.3		2	%


EBITDA	$	22.2		$	24.9		(11)	%
EBITDA margin	10.5		%	12.0		%


	Three Months Ended
	March 31,
	2026		2025
	(In millions)
Revenues:
Aggregates	$	64.8	$	56.3
Ready-mix concrete	73.9		69.8
Asphalt	12.7		8.8
Other*	34.7		34.4
Contracting services	67.8		67.6
Internal sales	(42.1)		(28.6)
	$	211.8	$	208.3

*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 March 31, 2026, Compared to Three Months Ended March 31, 2025

Revenue increased $3.5 million for the quarter, primarily due to higher aggregate, ready-mix and asphalt sales volumes in Oregon of $16.8 million, driven by stronger demand in the private sector, timing of projects and contributions from acquisitions completed in 2025. In addition, California's public agency market remained strong and contributed an additional $10.6 million in contracting services and aggregate sales volumes. These improvements were partially offset by lower aggregate, cement and ready-mix sales volumes in Hawaii of $9.3 million due to significant flooding conditions, as well as a decline in contracting services in Oregon due to less available agency work.

EBITDA decreased 11 percent for the quarter, primarily related to the absence of a one-time gain of $3.5 million related to an acquisition recognized as a bargain purchase in the first quarter of 2025. In addition, the significant flooding in Hawaii contributed to the EBITDA decrease. This was partially offset by higher aggregate and ready-mix gross margins in Oregon due to improved volumes mentioned above.

Results of Operations - Mountain


	Three Months Ended
	March 31,
	2026			2025			% Change
	(In millions)
Revenue	$	81.2		$	66.0		23	%


EBITDA	$	(8.2)		$	(16.3)		49	%
EBITDA margin	(10.1)		%	(24.6)		%

Index


	Three Months Ended
	March 31,
	2026		2025
	(In millions)
Revenues:
Aggregates	$	13.5	$	8.0
Ready-mix concrete	22.6		13.1
Asphalt	2.9		0.5

Contracting services	50.8		48.0
Internal sales	(8.6)		(3.6)
	$	81.2	$	66.0

Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025

Revenue increased $15.2 million in the quarter, mainly driven by favorable weather increasing volumes, along with higher pricing for ready-mix, aggregate and asphalt, which contributed $16.9 million of additional revenue to our legacy operations. The favorable weather also allowed for early season contracting services work across the segment, resulting in an additional $1.6 million of revenue. Acquisitions made during the quarter further added to the overall revenue growth.

EBITDA improved $8.1 million for the quarter, largely due to higher revenues as noted above, as well as production cost efficiencies for all product lines. Slightly offsetting was $2.4 million higher selling, general and administrative costs mostly related to additional overhead costs from the three acquired companies during the quarter and increased labor costs.

Results of Operations - Central


	Three Months Ended
	March 31,
	2026			2025			% Change
	(In millions)
Revenue	$	101.2		$	67.9		49	%


EBITDA	$	(26.8)		$	(24.3)		(10)	%
EBITDA margin	(26.5)		%	(35.8)		%


	Three Months Ended
	March 31,
	2026		2025
	(In millions)
Revenues:
Aggregates	$	25.2	$	17.1
Ready-mix concrete	48.0		25.6
Asphalt	5.4		6.8
Other*	4.0		2.4
Contracting services	29.2		24.5
Internal sales	(10.6)		(8.5)
	$	101.2	$	67.9

*Other includes merchandise and other products that individually are not considered to be a core line of business for the segment.

Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025

Revenue increased $33.3 million for the quarter, primarily driven by contributions from companies acquired in 2025. Among these, the acquisition of Texcrete in December led to ready-mix volumes that were more than twice as high in Texas as the prior year. In addition, legacy contracting services increased $3.3 million across the segment as a result of more available work and aggregate volumes increased $5.6 million, largely as a result of data center projects.

Index

EBITDA decreased $2.5 million, largely the result of two additional months of seasonal losses at Strata in 2026 and higher selling, general and administrative expenses mostly related to additional overhead costs from the companies acquired in 2025 and increased labor costs. Partially offsetting these decreases was higher ready-mix gross profit as a result of the additional volumes mentioned above and higher contracting services gross profit at our legacy operations.

Results of Operations - Energy Services


	Three Months Ended
	March 31,
	2026			2025			% Change
	(In millions)
Revenue	$	20.4		$	13.9		47	%


EBITDA	$	(4.6)		$	(7.8)		41	%
EBITDA margin	(22.6)		%	(56.0)		%


	Three Months Ended
	March 31,
	2026		2025
	(In millions)
Revenues:
Liquid Asphalt	$	18.2	$	12.2
Other*	4.0		3.0
Internal sales	(1.8)		(1.3)
	$	20.4	$	13.9

*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 March 31, 2026, Compared to Three Months Ended March 31, 2025

Revenue increased $6.5 million, primarily driven by higher sales volumes due to favorable weather across the segment.

EBITDA improved $3.2 million, largely as a result of increased sales volumes, as well as lower operating costs due to lower input costs and the absence of boiler repairs and railcar maintenance incurred in the prior year.

Corporate Services and Eliminations

Corporate Services includes all expenses related to the corporate functions of our company, as well as insurance activity 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 March 31, 2026, Compared to Three Months Ended March 31, 2025

During the first quarter of 2026, Corporate Services contributed negative EBITDA of $18.0 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 were offset by increased salaries and burden.

Liquidity and Capital Resources

At March 31, 2026, we had unrestricted cash and cash equivalents of $13.3 million, working capital of $590.0 million and borrowing capacity of $178.2 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 March 31, 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.

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.

Index

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 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 $235 million. For the three months ended March 31, 2026, we spent $42.3 million, largely on the replacement of construction equipment and plant improvements.

Additionally, for the three months ended March 31, 2026, we spent $209.2 million on growth initiatives, which comprised of $174.2 million on acquisitions and $35.0 million on aggregate expansion and greenfield projects. For the remainder of 2026, we estimate to spend $101.4 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


	Three Months Ended
	March 31,
	2026		2025
	(In millions)
Net cash provided by (used in)
Operating activities	$	(58.6)	$	(125.3)
Investing activities	(251.0)		(503.6)
Financing activities	261.7		486.3
Decrease in cash, cash equivalents and restricted cash	(47.9)		(142.6)
Cash, cash equivalents and restricted cash -- beginning of year	123.4		281.1
Cash, cash equivalents and restricted cash -- end of period	$	75.5	$	138.5

Operating activities


	Three Months Ended
	March 31,
	2026		2025		Variance
	(In millions)
Components of net cash used in operating activities:
Net loss	$	(79.2)	$	(68.7)	$	(10.5)
Adjustments to reconcile net loss to net cash used in operating activities	51.8		38.2		13.6
Changes in current assets and liabilities, net of acquisitions:
Receivables	52.5		41.1		11.4
Inventories	(41.1)		(50.4)		9.3
Other current assets	(33.5)		(35.5)		2.0
Accounts payable	(5.3)		(12.8)		7.5
Other current liabilities	(8.5)		(40.3)		31.8
Pension and postretirement benefit plan contributions	(0.1)		(0.1)		—
Other noncurrent charges	4.8		3.2		1.6
Net cash used in operating activities	$	(58.6)	$	(125.3)	$	66.7

Cash used in operating activities at March 31, 2026, decreased $66.7 million, largely related to lower working capital needs, offset by a higher net loss in the period. Cash used by working capital components totaled $35.9 million for the three months ended March 31, 2026, compared to $97.9 million for the three months ended March 31, 2025. This reduction in cash usage in 2026 was primarily the result of decreased incentive payments, higher collections on receivables balances, timing of taxes paid, decreased aggregate inventory and the fluctuation in payments on accounts payable.

Index

Investing activities


	Three Months Ended
	March 31,
	2026		2025		Variance
	(In millions)
Capital expenditures	$	(77.3)	$	(75.0)	$	(2.3)
Acquisitions, net of cash acquired	(174.2)		(443.4)		269.2
Net proceeds from sale or disposition of property and other	3.1		17.5		(14.4)
Investments	(2.6)		(2.7)		0.1
Net cash used in investing activities	$	(251.0)	$	(503.6)	$	252.6

The decrease in cash used in investing activities for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily the result of decreased cash used in acquisition activity, partially offset by the absence of prior year proceeds from the sale of ready-mix operations in the Central segment.

Financing activities


	Three Months Ended
	March 31,
	2026		2025		Variance
	(In millions)


Issuance of long-term debt	$	270.0	$	500.0	$	(230.0)
Debt issuance costs	—		(11.1)		11.1
Repayment of long-term debt	(2.9)		—		(2.9)
Tax withholding on stock-based compensation	(5.4)		(2.6)		(2.8)
Net cash provided by financing activities	$	261.7	$	486.3	$	(224.6)

Cash flows provided by financing activities for the three months ended March 31, 2026 decreased compared to the three months ended March 31, 2025. In the first quarter of 2026, we borrowed $270 million against our revolving credit facility while in 2025 we issued a $500 million Term Loan B.

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 March 31, 2026, our long-term debt reflected an increase of approximately $267.1 million from the balance at December 31, 2025. This increase is due to borrowing $270 million under our revolving credit facility to fund seasonal working capital needs and additional acquisitions.

At March 31, 2026, our total estimated interest payments over the life of our debt reflected an increase of approximately $67.7 million from the total estimated interest payments at December 31, 2025. This increase is primarily due to the borrowings under our revolving credit facility, as previously mentioned.

At March 31, 2026, our purchase commitments reflected an increase of approximately 12 percent from the balance at December 31, 2025. This increase is primarily due to the seasonality of work and preparing for our peak construction season during the first quarter. We expect purchase commitments to continue to decrease throughout the remainder of 2026 as obligations continue to be satisfied during the construction season.

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.

Index

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 plan is 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 and stock-based compensation 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 and stock-based compensation 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.

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
	March 31,
	2026			2025
	(In millions)
Net loss	$	(79.2)		$	(68.7)
Depreciation, depletion and amortization	52.2			38.8


Interest expense, net	20.0			13.1
Income taxes	(28.4)			(24.7)
EBITDA	$	(35.4)		$	(41.5)
Unrealized (gains) losses on benefit plan investments	0.7			0.7
Stock-based compensation expense	2.9			2.8



Adjusted EBITDA	$	(31.8)		$	(38.0)

Revenue	$	410.1		$	353.5
Net loss margin	(19.3)		%	(19.4)		%
EBITDA margin	(8.6)		%	(11.7)		%
Adjusted EBITDA margin	(7.8)		%	(10.7)		%

Index

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 March 31, 2026, we had $1.0 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 March 31, 2026, the weighted-average rate in effect was 5.82 percent, therefore, a hypothetical increase of 1.00 percent to the interest rate at March 31, 2026, would increase the all-in rate to 6.82 percent, the effect of which would increase the Company's interest expense by $10.2 million over the next 12 months based on the balances outstanding for these borrowings as of March 31, 2026.

At March 31, 2026, we had no outstanding interest rate hedges.

Commodity price risk

There were no material changes to commodity price risk that we faced from those reported in the 2025 Annual Report.

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 March 31, 2026, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Index

Part II -- Other Information

Item 1. Legal Proceedings

There were no material changes to the Company's legal proceedings that were previously reported in Part 1, Item 3 - Legal Proceedings in the 2025 Annual Report.

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 March 31, 2026, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

See the index to exhibits immediately preceding the signature page to this report.

Index

Exhibits Index

Incorporated by Reference

Exhibit Number

Exhibit Description

Filed
Herewith

Furnished

Herewith

Form

Period
Ended

Exhibit

Filing
Date

File Number

3.1

Second Amended and Restated Certificate of Incorporation of Knife River Corporation

8-K

3.1

5/28/25

1-41642

3.2

Second Amended and Restated Bylaws of Knife River Corporation

8-K

3.2

5/28/25

1-41642

10.1+

Form of Performance Stock Unit Award Agreement under the Long-Term Performance-Based Incentive Plan, effective March 4, 2026

10.2+

Promotion Letter with Glenn R. Pladsen dated as of January 1, 2025

31.1

Certification of Chief Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Chief Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Executive Officer and Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Mine Safety Disclosures

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.

Index

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:	May 5, 2026	BY:	/s/ Nathan W. Ring
			Nathan W. Ring
			Vice President and Chief Financial Officer


		BY:	/s/ Marney L. Kadrmas
			Marney L. Kadrmas
			Vice President and Chief Accounting Officer

Knife River Corp 10-Q