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Knife River Corp

For the period ended Jun 30, 2024. Filed Aug 6, 2024.

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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Jun 30, 2024 · Filed Aug 6, 2024

KNF$58.94+4.5%Stored close · as of Nov 9, 2026

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Contents

14. Business segment data

Note 14 -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 14 states across the United States through our operating segments: Pacific, Northwest, Mountain, North Central, South and Energy Services. These operating segments are used to determine the Company’s reportable segments, Pacific, Northwest, Mountain, Central and Energy Services, which are based on our method of internal reporting and management of our business. Four of the 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 the Company’s chief operating officer, who is also the Company's chief operating decision maker, along with the chief executive officer. The chief operating decision maker evaluates the performance of the segments and allocates resources to them based on earnings before interest, taxes, depreciation, depletion and amortization ("EBITDA").

In the fourth quarter of 2023, we realigned our reportable segments to better support our operational strategies. The liquid asphalt and related services portion of the Pacific segment's businesses are now reported under the Energy Services segment. In addition, the North Central and South operating regions have been aggregated into one reportable segment, Central. We also reallocated certain amounts to the operating segments that were previously reported within Corporate Services. All periods have been recast to conform with the revised presentation.

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. Contracting services include 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, information technology, human resources and other corporate expenses that support the operating segments. 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.

Index

The information below follows the same accounting policies as described in the audited financial statements and notes included in the Company's 2023 Annual Report. Information on the Company's segments was as follows:

Three Months Ended · Six Months Ended
June 30,June 30,
2024202320242023
(In thousands)
External operating revenues:
Pacific$131,827$125,079$210,214$190,722
Northwest200,225178,734319,377294,654
Mountain193,769175,754253,595236,372
Central214,603231,034275,565288,654
Energy Services66,24373,06377,36081,318
Total reportable segment external operating revenues$806,667$783,664$1,136,111$1,091,720
Intersegment operating revenues:
Pacific$22,013$22,393$35,621$33,197
Northwest33,49435,32248,40248,254
Mountain36,77834,79640,74040,710
Central55,07761,63061,17368,761
Energy Services13,44713,70616,42815,928
Total reportable segment intersegment operating revenues$160,809$167,847$202,364$206,850
EBITDA:
Pacific$17,789$17,457$17,046$17,605
Northwest50,76238,87170,91652,868
Mountain43,11930,32337,05426,570
Central36,18828,39917,46611,500
Energy Services19,36721,78116,88418,804
Total reportable segment EBITDA$167,225$136,831$159,366$127,347

A reconciliation of consolidated operating revenues to reportable segment operating revenues is as follows:

Three Months Ended · Six Months Ended
June 30,June 30,
2024202320242023
(In thousands)
Consolidated operating revenues$806,906$785,189$1,136,496$1,093,089
Plus:
Intersegment operating revenues165,081167,663211,633207,248
Less:
Corporate Services revenue4,5111,3419,6541,767
Total reportable segment operating revenues$967,476$951,511$1,338,475$1,298,570

Index

A reconciliation of consolidated net income before income taxes to reportable segment EBITDA is as follows:

Three Months Ended · Six Months Ended
June 30,June 30,
2024202320242023
(In thousands)
Total consolidated net income before income taxes$104,114$76,855$40,160$23,623
Plus:
Depreciation, depletion and amortization34,51231,13066,72460,760
Interest expense, net*12,80917,13023,95526,625
Less:
Corporate Services EBITDA(15,790)(11,716)(28,527)(16,339)
Total EBITDA for reportable segments$167,225$136,831$159,366$127,347
*Interest, net is interest expense net of interest income.
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The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.