Knife River Corp

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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 14 states across the United States. Our operating segments include: Pacific, Northwest, Mountain, North Central, South and Energy Services. The operating segments are used to determine our reportable segments and are based on our method of internal reporting and management of the business. As of December 31, 2024, our reportable segments were: Pacific, Northwest, Mountain, Central and Energy Services. Our reportable segments are aligned by key geographic areas due to the production of construction materials and related contracting services and one of which is based on product line.

Each segment is led by a segment manager that reports to our chief operating officer. The chief executive officer and the chief operating officer are considered our chief operating decision maker. 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 our 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, information technology, human resources; and other corporate expenses that support the operating segments and is excluded from our segment results. 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 information below follows the same accounting policies as described in Note 2. Information on our segments as of December 31, and for the years then ended was as follows:

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