Knife River Corp

Previous wording

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).

Current wording

New factors emerge from time to time, and it is not possible for management to predict all the factors, nor can it assess the effect of each factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. All forward-looking statements, whether written or oral and whether made by or on behalf of the Company, are expressly qualified by the risk factors and cautionary statements reported in the section entitled “Item 1A. Risk Factors” in Part I of the Company's 2025 Annual Report on Form 10-K (Annual Report), filed with the United States Securities and Exchange Commission (the “SEC”) on February 20, 2026, and subsequent filings with the SEC.

Previous wording

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:

Current wording

We provide various products and services and operate a variety of facility types, including aggregates quarries and mines, ready-mix concrete plants, asphalt plants and distribution facilities, in the following states:

Previous wording

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.

Current wording

Federal and state funding remain at or near record levels for a majority of our markets with approximately 80 percent of our historical contracting services revenue each year coming from public-sector projects, enhancing stability through market cycles. For more information on factors that may negatively impact our business, see the section entitled "Item 1A. Risk Factors" in Part I of the Company's 2025 Annual Report.

Previous wording

Expected margins on backlog at June 30, 2026, were slightly lower compared to the expected margins on backlog at June 30, 2025. Of the $1.2 billion of backlog at June 30, 2026, we expect to complete approximately $984 million in the 12 months following June 30, 2026. Approximately 85 percent of our backlog at June 30, 2026, is related to publicly funded projects, including street and highway construction projects, which are driven primarily by public works projects for state departments of transportation (DOT). 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.

Current wording

Expected margins on backlog at September 30, 2026, were lower compared to the expected margins on backlog at September 30, 2025. Of the $857 million of backlog at September 30, 2026, we expect to complete approximately $691 million in the 12 months following September 30, 2026. Approximately 82 percent of our backlog at September 30, 2026, is related to publicly funded projects, including street and highway construction projects, which are driven primarily by public works projects for state departments of transportation (DOT). While there continues to be infrastructure development, as discussed in the following section on Public Funding, there were fewer bidding opportunities in certain markets for the quarter compared to the same period last year.

Previous wording

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 September 30, 2026. As of May 2026, approximately 38 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.

Current wording

Public Funding. Funding for public projects is dependent on federal and state funding, such as appropriations to the Federal Highway Administration. Federal surface transportation programs authorized under the Infrastructure Investment and Jobs Act (IIJA) have been extended through December 11, 2026, providing additional time for Congress to consider a long-term reauthorization. The bipartisan BUILD America 250 Act, a proposed five-year surface transportation reauthorization bill, continues to advance through the legislative process. There is also a significant portion of previously authorized IIJA funding remaining to be spent. As of September 2026, approximately 32 percent of IIJA formula funding had yet to be spent in our 15 state operating market, providing continued support for state DOT programs into 2027. While each market is unique, the DOT budgets in most of the states where we operate remain at or near record levels.

Previous wording

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

Current wording

Profitability. The management team consistently monitors profit margins and has adopted a proactive approach in supporting long-term profitability objectives and creating shareholder value. In 2023, we launched our EDGE initiatives and established specialized teams to deliver training, support higher-margin bidding opportunities across regions and pursue targeted growth opportunities. Building on the progress of these initiatives, which continue, we launched Sharper EDGE, a program of targeted improvement opportunities across three areas: Operational Excellence, Commercial Excellence and Organizational Excellence. We have begun implementing these initiatives and expect to ramp the program over the next three years.

Previous wording

We are subject to downward pressure on our margins due to competitive market dynamics and fluctuations in the prices of raw materials, including diesel fuel, gasoline, natural gas, liquid asphalt, cement and steel. We are experiencing competitive market dynamics, primarily within contracting services, which is resulting in projects being more competitively bid and in turn compressing our contracting services margins.

Current wording

We are experiencing downward pressure on our margins in certain markets due to competitive market dynamics and fluctuations in the prices of raw materials, including diesel fuel, gasoline, natural gas, liquid asphalt, cement and steel. We are experiencing competitive market dynamics, primarily within contracting services, which is resulting in projects being more competitively bid and in turn compressing our contracting services margins.

Previous wording

To counteract the effects of raw material price fluctuations, we have utilized various mitigating strategies, such as dynamic pricing; energy escalation clauses in our contracting services contracts; securing materials in advance including the prepurchasing of diesel; fuel surcharges and pursuing other cost-saving measures. Energy escalation adjustments within contracting services are often subject to a recognition delay of a few months and are not reflected immediately in our results of operations. During the first half of 2026, our teams were successful with these mitigating controls, however, our results of operations were still impacted, largely as a result of the timing of contract billings. We will continue to monitor the effects these economic conditions have on our business.

Current wording

To counteract the effects of raw material price fluctuations, we have utilized various mitigating strategies, such as dynamic pricing; energy escalation clauses in our contracting services contracts; securing materials in advance including the prepurchasing of diesel; fuel surcharges and pursuing other cost-saving measures. Energy escalation adjustments within contracting services are often subject to a recognition delay of a few months and are not reflected immediately in our results of operations. Our teams have had success with these mitigating controls, however, our results of operations were still impacted by ongoing escalated fuel prices, largely as a result of the timing of contract billings. We will continue to monitor the effects these economic conditions have on our business.

Previous wording

During the first half of 2026, we finalized three aggregates-based acquisitions within the Mountain region and one in the West region. Two of these transactions broadens our presence in Montana, enhancing our ability to supply aggregates and ready-mix concrete to the expanding market in western Montana. The acquisition in the West expands our footprint in the Southwest Oregon markets. Additionally, the acquisition of Morgan Asphalt marked our entry into the Utah market. This acquisition included aggregate crushing and production operations with reserves projected to last over 30 years, an asphalt manufacturing facility and a range of contracting services such as asphalt paving, excavation and grading, serving both public and private sector customers.

Current wording

During 2026, we finalized three aggregates-based acquisitions within the Mountain region and one in the West region. Two of these transactions broaden our presence in Montana, enhancing our ability to supply aggregates and ready-mix concrete to the expanding market in western Montana. The acquisition in the West expands our footprint in the Southwest Oregon market. Additionally, the acquisition of Morgan Asphalt marked our entry into the Utah market. This acquisition included aggregate crushing and production operations with reserves projected to last over 30 years, an asphalt manufacturing facility and a range of contracting services such as asphalt paving, excavation and grading, serving both public and private sector customers.

Previous wording

In addition, we continue to invest in multiple organic projects, including an aggregates expansion project in South Dakota and ready-mix operations in both Minnesota and Texas. The aggregate expansion project will increase our production capabilities in the Sioux Falls market and is scheduled to be operational in 2027. In Minnesota, we are redeploying a portable ready-mix plant to an existing aggregate site north of the Twin Cities metro area. The addition of this plant expands our ability to serve the central Minnesota market and is anticipated to be operational in the third quarter of 2026. In Texas, we purchased a ready-mix site in April 2026 located in the Conroe, Texas area that is complementary to locations included in the TexCrete acquisition. Site improvements are currently underway and a new plant is expected to be located on this site by the end of 2026. Further, we completed greenfielded ready-mix operations located in the Twin Falls market, which became fully operational in the second quarter of 2026.

Current wording

In addition, we continue to invest in multiple organic projects, including an aggregate expansion project in South Dakota and ready-mix operations in Idaho, Minnesota and Texas. The aggregate expansion project will increase our production capabilities in the Sioux Falls market and is scheduled to be operational in 2027. Further, we completed the greenfield development of ready-mix operations located in the Twin Falls, Idaho market, which became fully operational in the second quarter of 2026.

Previous wording

Seasonality. Our operations can be impacted by weather especially due to a large portion of our markets being geographically located in the northern part of the country. Generally, construction activity increases in the second quarter and continues throughout the year, contributing to both materials and contracting services volumes. However, an unusually wet spring or longer winter can lead to reduced construction activity, which would also impact our aggregate and asphalt product lines.

Current wording

Seasonality. Our operations can be impacted by weather especially due to a large portion of our markets being geographically located in the northern part of the country. Generally, construction activity increases in the second quarter and continues throughout the year, contributing to both materials and contracting services volumes. However, an unusually wet spring or summer, or a longer winter can lead to reduced construction activity, which would also impact our aggregates and asphalt product lines.

Previous wording

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

Current wording

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.

Previous wording

Revenue increased $104.8 million or 13 percent, led by double-digit volume increases for ready-mix, asphalt and aggregates, and an increase in contracting services. The increase in contracting services was largely the result of more asphalt paving work, which also drove an increase in asphalt and aggregates. Acquisitions this past year further contributed to the increases across all product lines. We also continue to focus on our pricing, which contributed another $15.3 million in the quarter.

Current wording

Revenue increased $71.9 million, led by high-single digit volume increases for aggregates and asphalt, as well as an increase in contracting services. The increase in contracting services was largely the result of more asphalt paving work, which substantially contributed to the increase in aggregate and asphalt sales volumes. Acquisitions this past year contributed to the increases across most product lines. We also continue to focus on our pricing, which contributed another $23.9 million across our legacy operations in the quarter.

Previous wording

Gross profit improved $5.5 million, largely due to the additional product line volumes noted above and price increases on liquid asphalt, aggregates and cement. Partially offsetting the increase was lower margins on contracting services work due to the timing and type of projects, as well as competitive market dynamics. Aggregates gross profit benefited from fuel surcharges and higher delivery revenues, however, these are dilutive to our aggregates gross margin because fuel surcharges are billed at cost and there is minimal margin on delivery costs.

Current wording

Gross profit improved $3.3 million, largely due to the additional aggregate volumes noted above, and increased aggregate margins as a result of price increases and reduced per-unit production costs. Partially offsetting the increase was lower margins on contracting services work due to the timing and type of projects, higher diesel fuel costs and competitive market dynamics.

Previous wording

As a percentage of revenues, selling, general and administrative expense was 8.7 percent in the second quarter of 2026 compared to 8.3 percent in 2025. For the second quarter of 2026, we experienced higher costs, largely related to the absence of gains on asset sales recognized in the second quarter of 2025 of $10.3 million. Also contributing was the additional costs associated with companies acquired, including additional payroll and payroll-related costs, which was offset slightly by $1.7 million lower purchase accounting-related intangible asset amortization.

Current wording

As a percentage of revenues, selling, general and administrative expense was 5.8 percent in the third quarter of 2026 compared to 5.7 percent in the third quarter of 2025. For the third quarter of 2026, we experienced higher costs, largely related to the additional costs associated with companies acquired, including additional payroll and payroll-related costs, which was offset slightly by $2.1 million lower purchase accounting-related intangible asset amortization.

Previous wording

Interest expense increased $2.2 million due primarily to higher average debt balances with the additional $400 million of borrowings under the Term Loan B amended in May of 2026, offset in part by lower average interest rates.

Current wording

Interest expense increased $1.7 million due primarily to higher average debt balances with the additional $400 million of borrowings under the Term Loan B amended in May of 2026, offset in part by lower average interest rates.

Previous wording

Income tax benefit increased $5.2 million, corresponding with higher loss before income taxes, offset in part by lower effective tax rate. Our effective tax rate for the first half of 2026 and 2025 was 26.1 percent and 28.7 percent, respectively. The decrease in the effective tax rate is due to non-deductible expenses for tax purposes in the first half of 2025.

Current wording

Income tax expense increased $500,000, due to a slightly higher effective tax rate. Our effective tax rate for the third quarters of 2026 and 2025 was 26.9 percent and 26.0 percent, respectively. The increase in the effective tax rate is primarily due to a decrease in tax benefits.

Previous wording

Gross profit improved $12.4 million, largely due to the additional product line volumes noted above and price increases on aggregates, cement and liquid asphalt. Partially offsetting the increase was lower margins on contracting services work due to the timing and type of projects, as well as competitive market dynamics.

Current wording

Gross profit improved $15.6 million, largely due to the additional product line volumes noted above and price increases on liquid asphalt, aggregates, ready-mix concrete and cement. Partially offsetting the increase was lower margins on contracting services work due to the timing and type of projects, competitive market dynamics and an increase in diesel fuel costs.

Previous wording

As a percentage of revenues, selling, general and administrative expense was 12.2 percent in the first half of 2026 compared to 12.0 percent in 2025. For the first half of 2026, we experienced higher costs, largely related to lower gains on asset sales of $10.2 million. Also, contributing was the additional costs associated with the companies acquired, including additional payroll and payroll-related costs and $400,000 of additional purchase accounting-related intangible asset amortization.

Current wording

As a percentage of revenues, selling, general and administrative expense was 9.1 percent for the first nine months of 2026 compared to 8.8 percent in 2025. For the first nine months of 2026, we experienced higher costs, largely related to lower gains on asset sales of $10.5 million, additional costs associated with the companies acquired, and higher payroll and payroll-related costs. These costs were offset in part by lower purchase accounting-related intangible asset amortization.

Previous wording

Interest expense increased $7.7 million due primarily to higher average debt balances with the additional $400 million of borrowings under the Term Loan B amended in May of 2026 and borrowings under our revolving credit facility, offset in part by lower average interest rates.

Current wording

Interest expense increased $9.4 million due primarily to higher average debt balances with the additional $400 million of borrowings under the Term Loan B amended in May of 2026 and borrowings under our revolving credit facility, offset in part by lower average interest rates.

Previous wording

Other income decreased $4.2 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 the prior year. In addition, we had a decrease in interest income of $1.7 million as a result of less cash on hand, which was mostly offset by increased investment returns on our nonqualified defined benefit plans.

Current wording

Other income decreased $6.1 million, largely due to the absence of a one-time gain of $3.5 million on the bargain purchase of an aggregate quarry operation in the West segment in the prior year. We also had a decrease in interest income of $1.6 million as a result of less cash on hand, and a decrease of $800,000 in investment returns on our nonqualified defined benefit plans.

Previous wording

Income tax expense decreased $1.4 million, corresponding with lower income before income taxes, offset slightly by a higher effective tax rate. Our effective tax rate for the second quarters of 2026 and 2025 was 26.7 percent and 25.5 percent, respectively. The increase in the effective tax rate is primarily due to a decrease in tax benefits.

Current wording

Income tax expense decreased $4.6 million, corresponding with lower income before income taxes, offset slightly by a higher effective tax rate. Our effective tax rate for the first nine months of 2026 and 2025 was 27.2 percent and 25.5 percent, respectively. The increase in the effective tax rate is primarily due to a decrease in tax benefits.

Previous wording

EBITDA decreased 17 percent year-over-year, primarily a result of lower revenues, as previously mentioned, as well as lower margin contracting services work related to competitive market dynamics due to less public-agency work and the type of work. Results were further impacted by the absence of a $3.5 million one-time gain recognized in the first quarter of 2025 due to an acquisition being a bargain purchase and lower gains on asset sales of $2.5 million in 2026. Increased pricing, as previously mentioned, offset some of the decreases to EBITDA.

Current wording

EBITDA decreased 8 percent year-over-year, primarily as a result of lower revenues previously mentioned, as well as lower margin contracting services work related to competitive market dynamics and less available work, in addition to higher production and delivery costs on ready-mix. Results were further impacted by the absence of a $3.5 million one-time gain recognized in the first quarter of 2025 due to a bargain purchase acquisition, and lower gains on asset sales of $2.4 million in the first nine months of 2026. These decreases were slightly offset by increased pricing, as previously mentioned, and higher aggregate margins as a result of higher pricing and production cost efficiencies.

Previous wording

EBITDA improved $100,000 for the quarter, largely due to higher revenues, as previously mentioned, and production cost efficiencies on our asphalt and ready-mix product lines. Mostly offsetting the increase was lower margin contracting services work due to the type of work and the impact of increased competition, as well as timing of project performance gains. Further, selling, general and administrative costs were $3.5 million higher, primarily related to additional overhead costs from the three companies acquired in the first quarter of 2026, as well as increased payroll-related costs.

Current wording

EBITDA improved $5.1 million for the quarter, primarily due to higher revenues, as previously mentioned. The impact of higher revenue was partially offset by lower margin contracting services work due to the type of work and the impact of increased competition. Further, selling, general and administrative costs were $4.9 million higher, primarily related to additional overhead costs from the three companies acquired in the first quarter of 2026, as well as increased payroll-related costs.

Previous wording

Revenue increased $75.6 million, mostly driven by favorable weather allowing for early season work, which positively impacted all product lines in Idaho, as well as contributions from the three companies acquired in the first quarter of 2026. In addition, higher pricing for ready-mix, and aggregates contributed $6.4 million of additional revenue to our legacy operations.

Current wording

Revenue increased $153.9 million, primarily due to favorable weather allowing for early season work, which positively impacted all product lines across the segment. Contracting services revenue in Idaho increased $70.5 million, which resulted in an associated increase in asphalt volumes. Higher pricing for aggregates and ready-mix contributed $11.3 million of additional revenue to our legacy operations. In addition, three companies acquired in the first quarter of 2026 also contributed to the growth.

Previous wording

EBITDA improved 56 percent year-over-year, largely due to higher revenues, as previously mentioned, as well as production cost efficiencies across all product lines. Slightly offsetting was $5.8 million higher selling, general and administrative costs mostly related to additional overhead costs from the three acquired companies during the first quarter and increased payroll-related costs.

Current wording

EBITDA improved 20 percent year-over-year, largely due to higher revenues, as previously mentioned. Slightly offsetting the improvement was lower margin contracting services work due to the type of work and the impact of increased competition. Further, selling, general and administrative costs were $12.5 million higher, mostly related to additional overhead costs from the three acquired companies during the first quarter and increased payroll to cover administrative and labor costs.

Previous wording

Revenue increased $70.4 million for the quarter, primarily driven by contracting services as a result of large projects in North Dakota and more available public-agency work in both North Dakota and Minnesota, which also contributed to an increase in asphalt volumes. In addition, aggregate volumes contributed $18.5 million of additional revenue in the quarter, largely related to supplying data center projects in North Dakota and Texas, as well as more available work, as previously mentioned. Further, contributions from the December 2025 acquisition of Texcrete led to ready-mix volumes that were more than twice as high in Texas as the prior year. Slightly offsetting the increases was decreased consolidated average pricing due to product mix and pricing differentials as a result of contributions from different locations as compared to the prior year.

Current wording

Revenue increased $27.6 million for the quarter, primarily driven by an increase in contracting services as a result of more available public-agency work in North Dakota, which also contributed to the increase in aggregate and asphalt volumes in the state. In addition, an increase in third-party aggregate sales was supported by supplying data center projects in North Dakota and Texas. Further, contributions from the December 2025 acquisition of Texcrete led to ready-mix volumes that were more than twice as high in Texas compared to the prior year.

Previous wording

Revenue increased $103.7 million, primarily driven by contracting services revenue as a result of more available public-agency work in North Dakota and Minnesota, which also contributed to an increase in asphalt volumes. In addition, contributions from the acquisition of Texcrete in December 2025 led to ready-mix volumes that were more than twice as high in Texas as the prior year. Aggregate volumes also contributed $24.1 million of additional revenue, largely related to supplying data center projects in North Dakota and Texas, as well as more available work, as previously mentioned. Slightly offsetting the increases was decreased consolidated average pricing due to product mix and pricing differentials as a result of contributions from different locations as compared to the prior year.

Current wording

Revenue increased $131.4 million, primarily driven by a $54.1 million increase in contracting services revenue as a result of more available public-agency work in North Dakota and Minnesota, as well as an increase in asphalt volumes associated with the contracting services work. In addition, contributions from the acquisition of Texcrete in December 2025 led to ready-mix volumes that were more than twice as high in Texas as the prior year. Aggregate volumes also contributed $35.2 million of additional revenue, largely related to supplying data center projects in North Dakota and Texas, as well as more available work.

Previous wording

EBITDA improved $9.2 million, largely the result of higher revenues, as previously mentioned, as well as production efficiencies and lower input material costs. Margins on contracting services work also improved in the quarter largely due to favorable project execution. Partially offsetting the increase was the absence of gains on asset sales of $7.9 million from the prior year, primarily in Texas.

Current wording

EBITDA improved $9.1 million, largely the result of higher revenues as previously mentioned, as well as aggregate and asphalt production efficiencies across the product lines. Gross profit on contracting services work also improved slightly in the year due to more work. Partially offsetting the increase was the absence of gains on asset sales of $7.8 million from the prior year, primarily in Texas.

Previous wording

Revenue increased $12.2 million, primarily driven by higher sales volumes in California due to improved pricing and market conditions, which contributed $14.7 million of additional revenue. This increase was slightly offset by lower volumes in other markets resulting from competitive market dynamics.

Current wording

Revenue increased $11.4 million, primarily driven by pricing increases in California that resulted in $12.3 million in additional revenue due to improved market conditions. This increase was offset in part by lower volumes in other markets resulting from competitive market dynamics.

Previous wording

During the second quarter of 2026, Corporate Services contributed negative EBITDA of $13.4 million, which was comparable to the prior year, as a result of flat selling, general and administrative costs year-over-year. Increased investment returns on our nonqualified defined benefit plans and lower due diligence and integration costs related to corporate development and completed acquisitions were offset by increased salaries and burden.

Current wording

During the third quarter of 2026, Corporate Services contributed negative EBITDA of $13.5 million, which was comparable to the prior year, as a result of flat selling, general and administrative costs year-over-year. Unrealized losses on our nonqualified defined benefit plans compared to prior year gains and higher due diligence and integration costs related to corporate development and completed acquisitions were offset by a favorable insurance adjustment of $3.5 million in the quarter.

Previous wording

During the first half of 2026, Corporate Services contributed negative EBITDA of $31.4 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.

Current wording

During the first nine months of 2026, Corporate Services contributed negative EBITDA of $44.8 million, which was comparable to the prior year, as a result of flat selling, general and administrative costs year-over-year. Lower due diligence and integration costs related to corporate development and completed acquisitions and a favorable insurance adjustment of $3.5 million, were offset by increased salaries and burden.

Previous wording

At June 30, 2026, we had unrestricted cash and cash equivalents of $40.7 million, working capital of $794.4 million and borrowing capacity of $387.2 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 June 30, 2026, we had sufficient liquid assets and borrowing capacity to meet our financial commitments, debt obligations and anticipated capital expenditures for at least the next 12 months.

Current wording

At September 30, 2026, we had unrestricted cash and cash equivalents of $118.0 million, working capital of $872.0 million and borrowing capacity of $448.2 million on our revolving credit facility, net of our outstanding letters of credit. Working capital is calculated as current assets less current liabilities. As of September 30, 2026, we had sufficient liquid assets and borrowing capacity to meet our financial commitments, debt obligations and anticipated capital expenditures for at least the next 12 months.

Previous wording

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.

Current wording

The ability to fund our cash needs will depend on the ongoing ability to generate cash from operations and obtain debt financing with competitive rates. We rely on access to capital markets as sources of liquidity for capital requirements not satisfied by cash flows from operations, particularly in the first half of the year, due to the seasonal nature of the business. Our principal uses of cash in the future will be to fund our operations, working capital needs, capital expenditures, repayment of debt, organic growth and strategic business development transactions.

Previous wording

We currently estimate total 2026 capital expenditures for maintenance and improvement to be between $170 million and $235 million. For the six months ended June 30, 2026, we spent $90.1 million, largely on the replacement of construction equipment and plant improvements.

Current wording

We currently estimate total 2026 capital expenditures for maintenance and improvement to be between $170 million and $200 million. For the nine months ended September 30, 2026, we spent $127.6 million, largely on the replacement of construction equipment and plant improvements.

Previous wording

Additionally, for the six months ended June 30, 2026, we spent $244.5 million on growth initiatives, which comprised of $184.4 million on acquisitions and $60.1 million on aggregate expansion and greenfield projects. For the remainder of 2026, we estimate to spend $76.4 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.

Current wording

Additionally, for the nine months ended September 30, 2026, we spent $266.7 million on growth initiatives, which consisted of $185.7 million on acquisitions and $81.0 million on aggregate expansion and greenfield projects. For the remainder of 2026, we estimate spending of $55.4 million on organic growth projects. Capital expenditures for future acquisitions and new organic growth opportunities would be incremental to our outlined capital program. It is anticipated that capital expenditures for the remainder of 2026 will be funded by various sources, including cash flows from operations and debt.

Previous wording

Cash used in operating activities at June 30, 2026, improved $34.2 million, largely related to lower working capital needs, offset by a higher net loss in the period. Cash used by working capital components totaled $217.6 million for the six months ended June 30, 2026, compared to $234.8 million for the six months ended June 30, 2025. This reduction in cash used in 2026 was primarily the result of decreased incentive payments in 2026 and the timing of interest payments, primarily associated with the Term Loan B that was amended May 15, 2026. Partially offsetting these decreases was an increase in our taxes receivable due to the increase in net loss and the timing of taxes paid.

Current wording

Cash provided by operating activities for the nine months ended September 30, 2026, decreased $21.7 million compared to the nine months ended September 30, 2025, largely related to higher working capital needs and a decrease in net income. Cash used by working capital components totaled $224.5 million for the nine months ended September 30, 2026, compared to $189.8 million for the nine months ended September 30, 2025. This increase in cash usage was primarily the result of higher working capital needs due to the increase in revenues, as discussed in Business Segment Financial and Operating Data, higher aggregate inventory balances, due in part to higher costs of aggregates inventory, and the timing of interest payments, primarily associated with the Term Loan B that was amended May 15, 2026. Partially offsetting these increases in cash usage is the timing of taxes paid and fluctuations in the timing of payments on accounts payable.

Previous wording

The decrease in cash used in investing activities for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, was primarily the result of decreased cash used for acquisition activity and aggregate reserve replacements, partially offset by the absence of prior year proceeds from the sale of ready-mix operations in the Central segment.

Current wording

The decrease in cash used in investing activities for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, was primarily the result of decreased cash used for acquisition activity and aggregate reserve replacements. The decrease in cash usage was offset in part by the absence of proceeds from the sale of ready-mix operations in the Central segment in the first quarter of 2025, as discussed in Note 10, and non-strategic asset sales in both the West and Central segments.

Previous wording

Cash flows provided by financing activities for the six months ended June 30, 2026 decreased compared to the six months ended June 30, 2025. In the second quarter of 2026, we entered into a second amendment to our secured credit agreement, increasing our Term Loan B by an aggregate principal amount of $400 million, while in 2025 we issued $500 million against our Term Loan B. Further, in 2026 we borrowed less against our revolving credit facility.

Current wording

Cash flows provided by financing activities for the nine months ended September 30, 2026, decreased compared to the nine months ended September 30, 2025. In the second quarter of 2026, we entered into a second amendment to our secured credit agreement, increasing our Term Loan B by an aggregate principal amount of $400 million, while in 2025 we issued a $500 million Term Loan B. We had no borrowings against our revolving credit facility as of September 30, 2026.

Previous wording

At June 30, 2026, our long-term debt reflected an increase of approximately $454.1 million from the balance at December 31, 2025. This increase is primarily due to the second amendment to our secured credit facility increasing our Term Loan B facility by $400.0 million and outstanding borrowings of $61.0 million under our revolving credit facility. The funds from the Term Loan B were used to repay borrowings under the revolving credit agreement, working capital needs and general corporate purposes.

Current wording

At September 30, 2026, our long-term debt reflected an increase of approximately $389.2 million from the balance at December 31, 2025. This increase is primarily due to the second amendment to our secured credit facility increasing our Term Loan B facility by $400.0 million. The funds from the Term Loan B were used to repay borrowings under the revolving credit agreement, working capital needs and general corporate purposes.