Knife River Corp

Previous wording

We are one of the leading providers of crushed stone and sand and gravel in the United States and operate through four operating segments, which are also our reportable segments, across 14 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.

Current wording

We are one of the leading providers of crushed stone and sand and gravel in the U.S. and operate through four operating segments, which are also our reportable segments, across 14 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.

Previous wording

As an aggregates-led construction materials and contracting services provider in the United States, our 1.2 billion tons of aggregate reserves, as of December 31, 2024, provide the foundation for a vertically integrated business strategy, with approximately 37 percent of our aggregates being used internally to support value-added downstream products (ready-mix concrete and asphalt) and contracting services (heavy-civil construction, laydown, asphalt paving, concrete construction, site development and grading services, bridges and in some segments the manufacturing of prestressed concrete products). Our aggregate sites and associated asphalt and ready-mix plants are primarily in strategic locations near mid-sized, high-growth markets, providing us with a transportation advantage for our materials that supports competitive pricing and increased margins. We provide our products and services to both public and private markets, with public markets being the majority of our work and tending to be more stable across economic cycles, which helps offset the cyclical nature of the private markets.

Current wording

As an aggregates-led construction materials and contracting services company, we have 1.2 billion tons of aggregate reserves supporting our vertically integrated business strategy. About 37 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, high-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.

Previous wording

Expected margins on backlog at June 30, 2025, were slightly lower compared to the expected margins on backlog at June 30, 2024. Of the $1.3 billion of backlog at June 30, 2025, we expect to complete approximately $998.5 million in the 12 months following June 30, 2025. Approximately 91 percent of our backlog at June 30, 2025, 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. Oregon, however, has seen challenges with both public and private projects contributing to lower backlog in the West segment. On the public side, challenges with the Oregon DOT budget, as discussed in the following section on Public funding, will continue to create a headwind for 2025, while high interest rates and macroeconomic uncertainty have delayed private projects.

Current wording

Expected margins on backlog at September 30, 2025, were slightly lower compared to the expected margins on backlog at September 30, 2024. Of the $995 million of backlog at September 30, 2025, we expect to complete approximately $764 million in the 12 months following September 30, 2025. Approximately 87 percent of our backlog at September 30, 2025, 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. Oregon, however, has seen challenges with both public and private projects contributing to lower backlog in the West segment. On the public side, delays with the Oregon DOT budget, as discussed in the following section on Public funding, have created a headwind in 2025.

Previous wording

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 April 2025, approximately 58 percent percent of IIJA formula funding had yet to be spent in our 14 state operating market. Additionally, DOT budgets in most of the states where we operate remain strong, which favorably affects bidding through the remainder of the year. During the early part of second quarter 2025, Washington, Idaho and North Dakota all passed bills that support their transportation funding. We continue to monitor the implementation and impact of these legislative items. Throughout the first half of 2025, we saw projects in Oregon get delayed and funding diverted from asphalt paving to megaprojects as a result of the state's DOT budget shortfall and general uncertainty for funding. In August 2025, Oregon intends to hold a special legislative session to address transportation funding needs.

Current 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 2026. As of August 2025, approximately 52 percent of IIJA formula funding had yet to be spent in our 14 state operating market. Additionally, DOT budgets in most of the states where we operate remain strong, which is expected to favorably affect bidding through the remainder of this year and into next year. Ten of our 14 states have record DOT budgets going into the 2026 fiscal year. In the second quarter of 2025, Washington, Idaho and North Dakota all passed bills that support their transportation funding. We continue to monitor the implementation and impact of these legislative items. Year-to-date, projects in Oregon have been delayed and funding has been diverted from maintenance and repair work, which includes asphalt paving, to megaprojects as a result of the state's DOT budget shortfall and general uncertainty for funding. However, in September 2025, Oregon passed a transportation bill to raise $4.3 billion over the next 10 years; approximately 50% of the funds from the new bill will be routed to cities and counties for road maintenance programs, which we expect will begin to become available in 2026. While the state DOT budget is not yet final, it is expected that the contributions from the new bill will bring total funding for the 2025-27 biennium to approximately $6.1 billion, compared to the record $6.2 billion for the previous two-year cycle.

Previous wording

Public Funding. Funding for public projects is dependent on federal and state funding, such as appropriations to the Federal Highway Administration. Earlier this year, 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.

Current wording

Earlier this year, 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.

Previous wording

In 2024, we created the position of Chief Excellence Officer. This newly formed position became effective January 1, 2025, and focuses on expanding our PIT Crews and leading our standardization efforts. Under the leadership of the Chief Excellence Officer, a broader process improvement framework was established, creating more teams focused on standardization, commercial excellence and operational excellence. In June 2025, we appointed a Senior Vice President of Aggregate and Rail. This role will add to the EDGE strategy by working with our PIT Crews to focus on identifying and driving cost reductions at our aggregate production facilities while also helping shape our corporate strategy and evaluating and supporting new aggregate opportunities.

Current wording

In 2024, we created the position of Chief Excellence Officer. This newly formed position became effective January 1, 2025, and is focused on expanding our PIT Crews while leading our standardization efforts. Under the leadership of the Chief Excellence Officer, a broader process improvement framework was established, creating more teams focused on standardization, commercial excellence and operational excellence. In June 2025, we appointed a Senior Vice President of Aggregate and Rail. This role adds to the EDGE strategy by working with our PIT Crews to focus on identifying and driving cost reductions at our aggregate production facilities while also helping shape our corporate strategy and evaluating and supporting new aggregate opportunities.

Previous wording

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, high growth markets, and has several targets at various stages of completion in our acquisition pipeline. In the second quarter of 2025, we completed the acquisition of an aggregates and contracting services business in Central Minnesota. In the first quarter of 2025, we completed the acquisition of Strata Corporation, which is now included in our Central segment, as well as the acquisition of an aggregate quarry operation in Washington. Subsequent to June 30, 2025, we acquired an aggregates-led, construction materials and contracting services business in Central Oregon.

Current wording

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, high growth markets, and has several targets at various stages of completion in our acquisition pipeline. In the third quarter of 2025, we acquired High Desert Aggregate and Paving, an aggregates-led construction materials and contracting services business in central Oregon. This is in addition to the acquisitions completed in the first half of 2025 that included an aggregates and contracting services business in central Minnesota and Strata Corporation, which are both included in our Central segment, as well as an aggregate quarry operation in Washington, adding to the West segment.

Previous wording

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. We have also completed construction of a processing plant to manufacture polymer modified asphalt (PMA) and add liquid asphalt storage in our South Dakota operations, which will allow us to more cost effectively supply this local market. In Twin Falls, Idaho, we are greenfielding new ready-mix operations which will provide us with a fixed base to work from and allow us to build a local team in this high-growth market.

Current wording

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. Earlier this year we completed construction of a processing plant to manufacture polymer modified asphalt (PMA) and add liquid asphalt storage in our South Dakota operations, which will allow us to more cost effectively supply this local market. In Twin Falls, Idaho, we are greenfielding new ready-mix operations, which allows us to build a local team in this high-growth market, and are expected to be operating in the first 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, our construction activity in the northern states is from May into the first part of November. An unusually wet spring or early winter can lead to reduced construction activity, which will also impact our aggregate and asphalt product lines. In the second quarter of 2025, parts of our Central, Mountain and Energy Services segments were impacted by rainfall amounts that were heavier than normal causing a delay in work. These delays have pushed work into the second half of 2025. Also, Texas experienced flooding in some of our market areas in July 2025 that may negatively impact our results of operations in the second half of 2025.

Current wording

Seasonality. Our operations have been and may continue to be impacted by weather. Generally, our construction activity in the northern states is from May into the first part of November. An unusually wet spring or early winter can lead to reduced construction activity, which will also impact our aggregate and asphalt product lines. In the second and third quarters of 2025, parts of our Central and Mountain segments were impacted by increased rainfall amounts, causing a delay in work. Further, the tragic July 4 flooding in Central Texas shut down production at our Honey Creek Quarry for 10 days and affected delivery of our products for 51 days while the rail and roads were being repaired.

Previous wording

We own and operate a state-of-the-art training facility, the Knife River Training Center. This unique, 230-acre facility, used corporatewide, provides ample space to enhance the skills of both our new and existing employees through classroom education and hands-on experience. One of the most popular courses at the Knife River Training Center is the commercial driver's license training (CDL), which is helping to address an industry-wide labor shortage. In addition to CDL training for new truck drivers, the training center offers experienced truck driver training, new and experienced equipment operator training and the center offers a diverse array of courses designed to foster leadership and facilitate professional skills development in sales, instruction, and more. These courses are available to all Knife River employees, ensuring that our team members, from frontline workers to senior leadership, have access to the training and support they need to grow in their roles.

Current wording

We own and operate a state-of-the-art training facility, the Knife River Training Center. This unique, 230-acre facility, used corporatewide, provides ample space to enhance the skills of both new and existing employees through classroom education and hands-on experience. One of the most popular courses at the Knife River Training Center is the commercial driver's license training (CDL), which is helping to address an industry-wide labor shortage. In addition to CDL training for new truck drivers, the training center offers experienced truck driver training, new and experienced equipment operator training and the center offers a diverse array of courses designed to foster leadership and facilitate professional skills development in sales, instruction, and more. These courses are available to all Knife River employees, ensuring that our team members, from frontline workers to senior leadership, have access to the training and support they need to grow in their roles.

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 delivering quality training programs that are both comprehensive and practical. Their expertise ensures that every employee receives the highest standard of education and skill development.

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 every employee receives the highest standard of education and skill development.

Previous wording

Selling, general and administrative expenses include the costs for estimating, bidding and corporate development, as well as costs related to segment and corporate management 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; 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.

Current wording

projects in process and the number of employees assigned to estimating and bidding activities. Other general and administrative expenses include outside services; 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.

Previous wording

Other income includes net periodic benefit costs for our benefit plan expenses, other than service costs; interest income; realized and unrealized gains and losses on investments for our nonqualified benefit plans; earnings or losses on joint venture

Current wording

Other income includes net periodic benefit costs for our benefit plan expenses, other than service costs; interest income; realized and unrealized gains and losses on investments for our nonqualified benefit plans; earnings or losses on joint venture arrangements; gain on bargain purchase; and other miscellaneous income or expenses, including expenses related to the transition services agreement with MDU Resources Group, Inc.

Previous wording

Revenue increased $26.9 million, largely driven by the addition of Strata in March 2025 and Albina in November 2024, as well as price increases of mid-single digits on aggregate and ready-mix and low-single digits on asphalt. Partially offsetting the increased revenue was lower contracting services work in Oregon and Montana, due in part to less public-agency work and project timing, which also impacted aggregate and asphalt sales volumes. Parts of our Central and Mountain segments also faced higher-than-normal rainfall in the quarter which delayed work further impacting contracting services, aggregate and asphalt revenues.

Current wording

Revenue increased $98.4 million, largely driven by contributions from acquired companies, as well as price increases of mid-single digits on aggregates and ready-mix. Partially offsetting the increased revenue was lower contracting services work and asphalt volumes in the Mountain segment, due in part to less public-agency work compared to the prior year. Parts of our Central and Mountain segments also faced increased rainfall in the quarter.

Previous wording

Corporate Services had a decrease in selling, general and administrative costs of $1.5 million compared to second quarter 2024. This decrease is largely related to lower incurred but not reported losses for our self-insured health care plan and the absence of one-time Separation costs in 2024 of $1.5 million. Offsetting the cost decrease was an increase in due diligence and integration costs of $1.9 million related to corporate development and completed acquisitions, as well as higher labor-related costs for additional staff.

Current wording

Corporate Services had a decrease in selling, general and administrative costs of $1.2 million compared to third quarter 2024. This decrease is largely related to lower payroll-related and business development costs. Offsetting the cost decrease was a less favorable adjustment to the incurred but not reported losses in our captive insurance program.

Previous wording

Interest expense increased $8.4 million due primarily to higher average debt balances with the issuance of a new Term Loan B in March of 2025 and borrowings under our revolving credit facility in the second quarter of 2025, offset in part by lower average interest rates.

Current wording

Interest expense increased $9.1 million due primarily to higher average debt balances with the issuance of a new Term Loan B in March of 2025 and borrowings under our revolving credit facility, offset in part by lower average interest rates.

Previous wording

Revenue increased $50.7 million, largely driven by the addition of Strata in March 2025 and Albina in November 2024, as well as price increases of mid-single digits on aggregate and ready-mix and low-single digits on asphalt. California saw an increase in public-agency and commercial work, which positively impacted contracting services and ready-mix revenues. Partially offsetting the increased revenue was lower contracting services work in Oregon and Montana, due in part to less public-agency work and timing of projects, which also impacted aggregate and asphalt sales volumes. Parts of our Central and Mountain segments also faced higher-than-normal rainfall in the second quarter which delayed work further impacting contracting services, aggregate and asphalt revenues.

Current wording

Revenue increased $149.1 million, largely driven by contributions of acquired companies, as well as price increases of mid-single digits on aggregates and ready-mix. California saw an increase in public-agency and commercial work, which positively impacted contracting services and ready-mix revenues. Partially offsetting the increased revenue was less contracting services work in Oregon, primarily the result of less public-agency work, and less contracting services work in the Mountain and Central segments, due in part to less public-agency work and increased rainfall during the second and third quarters, which also impacted asphalt and aggregate volumes.

Previous wording

Gross profit decreased $35.1 million, largely due to less work performed, as previously discussed. The decrease in aggregate volumes further impacted our results as we had less production and higher per-unit fixed costs. In addition, Energy Services saw a decrease in gross profit mostly due to competitive market conditions and higher repairs and maintenance costs. These decreases were offset in part by the contributions of Strata, higher gross profit in California from favorable construction project execution and higher margins in Alaska and Hawaii.

Current wording

Gross profit decreased $23.7 million, largely due to less work performed, as previously discussed. The decrease in aggregate volumes further impacted our results as we experienced higher per-unit fixed costs. In addition, Energy Services saw a decrease in gross profit mostly due to competitive market conditions and higher repairs and maintenance costs. Also, the impact of selling acquired inventory after markup to fair value as part of acquisition accounting negatively impacted the aggregates product line by $3.0 million and liquid asphalt by $300,000. These decreases were offset in part by the contributions of acquired companies, higher gross profit in California from favorable construction project execution and higher margins in Alaska and Hawaii.

Previous wording

Corporate Services had an increase in selling, general and administrative costs of $2.2 million. This increase is primarily due to due diligence and integration costs of $7.5 million related to corporate development and completed acquisitions, as well as higher labor-related costs for additional staff. Offsetting the decrease was lower incurred but not reported losses for our self-insured health care plan and the absence of one-time Separation costs in 2024 of $3.8 million.

Current wording

Corporate Services had an increase in selling, general and administrative costs of $1.1 million. This increase was largely the result of higher business development costs of $6.5 million related to corporate development and completed acquisitions and a less favorable adjustment to the incurred but not reported losses in our captive insurance program. Offsetting the increased costs were lower payroll-related costs and the absence of one-time Separation costs in 2024 of $3.8 million.

Previous wording

Interest expense increased $9.7 million due primarily to higher average debt balances with the issuance of a new Term Loan B in March of 2025 and borrowings under our revolving credit facility in the second quarter of 2025, offset in part by lower average interest rates.

Current wording

Interest expense increased $18.8 million due primarily to higher average debt balances with the issuance of a new Term Loan B in March of 2025 and borrowings under our revolving credit facility, offset in part by lower average interest rates.

Previous wording

Other income increased $1.7 million, largely driven by a one-time gain of $3.5 million on the bargain purchase of an aggregate quarry operation in the West segment, offset in part by a decrease in interest income of $1.0 million and lower investment returns on our nonqualified defined benefit plans.

Current wording

Other income increased $500,000, largely driven by a one-time gain of $3.5 million on the bargain purchase of an aggregate quarry operation in the West segment, offset in part by a decrease in interest income of $2.2 million as a result of less cash on hand and lower investment returns on our nonqualified defined benefit plans.

Previous wording

Income tax expense decreased $8.8 million, corresponding with lower income before income taxes.

Current wording

Income tax expense decreased $16.5 million, corresponding with lower income before income taxes.

Previous wording

Revenue decreased $17.9 million in the quarter, primarily due to decreased contracting services work, which also brought aggregate and asphalt volumes down. Montana saw a decline in contracting services revenue of approximately 41 percent, largely due to lower asphalt paving work as a result of the DOT spending a larger portion of its budget on bridge structures, timing of projects and higher-than-normal rainfall amounts in certain markets. Idaho also saw lower contracting services revenue due to the timing of public-agency and airport work compared to the prior year. Partially offsetting the decrease was higher aggregate and ready-mix pricing of $4.6 million from dynamic pricing and the mix of product sold. In addition, Wyoming had more early season contracting services work that contributed an additional $2.2 million compared to the prior year.

Current wording

Revenue decreased $31.3 million in the quarter, primarily due to decreased contracting services work, which also brought asphalt and aggregate volumes down. The decrease in contracting services revenue was largely due to lower asphalt paving work as a result of competitive bid dynamics, type and location of available DOT projects, the timing of public-agency jobs and increased rainfall amounts in certain markets. Partially offsetting the decrease was higher ready-mix and aggregate pricing of $3.8 million.

Previous wording

EBITDA decreased $22.4 million year-over-year. Lower margins on aggregates was largely the result of lower aggregate sales volumes due to a later start to the construction season and fewer construction projects, as previously discussed, and higher per-unit fixed costs, as well as the mix of product sold. Contracting services experienced lower margins in Montana due to less available work. Asphalt margins also decreased due to less work, as previously discussed, and selling, general and administrative costs were $2.0 million higher, largely from increased labor-related costs.

Current wording

EBITDA decreased $31.1 million year-over-year. Contracting services experienced lower margins throughout the segment due to less available work, while lower margins on aggregates and asphalt were largely the result of lower sales volumes due to fewer construction projects, as previously discussed, and higher repairs and maintenance costs which contributed to an increase in per-unit fixed costs. Selling, general and administrative costs were $1.9 million higher, largely from increased labor-related costs.

Previous wording

Revenue increased $22.3 million, primarily due to contributions from the acquisition of Albina Asphalt in November 2024. In addition, the new polymer modified asphalt processing plant in South Dakota contributed an additional $3.6 million in revenue. These increases were partially offset by lower volumes due to unfavorable weather and lower pricing in some locations driven by current liquid asphalt market pricing.

Current wording

Revenue increased $43.3 million, primarily due to contributions from the acquisition of Albina Asphalt in November 2024. In addition, the new polymer modified asphalt processing plant in South Dakota contributed an additional $10.7 million in revenue. These increases were partially offset by lower volumes and lower pricing in some locations driven by current liquid asphalt market pricing.

Previous wording

Revenue increased $21.2 million, primarily due to contributions from the acquisition of Albina Asphalt in November 2024. In addition, the new polymer modified asphalt processing plant in South Dakota contributed an additional $3.6 million in revenue. These increases were partially offset by lower volumes due to unfavorable weather and lower pricing in some locations driven by current liquid asphalt market pricing.

Current wording

Revenue increased $65.6 million, primarily due to contributions from the acquisition of Albina Asphalt in November 2024. In addition, the new polymer modified asphalt processing plant in South Dakota contributed an additional $14.3 million in revenue. These increases were partially offset by lower volumes due to unfavorable weather and lower pricing in some locations driven by current liquid asphalt market pricing.

Previous wording

EBITDA decreased $7.6 million, as a result of lower margins due to competitive market conditions, planned and required maintenance expenses related to our railcar fleet, continued tank and equipment repair costs at our terminals and the impact of selling acquired inventory after markup to fair value as part of acquisition accounting for Albina of $343,000.

Current wording

EBITDA decreased $1.7 million, largely decreased pricing that resulted in lower margins due to competitive market conditions, as well as planned and required maintenance expenses related to our railcar fleet, continued tank and equipment repair costs at our terminals and the impact of selling acquired inventory after markup to fair value as part of acquisition accounting for Albina of $295,000. Partially offsetting the decrease was contributions from the acquisition of Albina Asphalt.

Previous wording

During the first half of 2025, Corporate Services contributed negative EBITDA of $31.5 million, compared to negative EBITDA of $28.4 million in the prior year. Corporate Services had higher selling, general and administrative costs of $2.2 million in the year, driven largely by an increase in due diligence and integration costs of $7.5 million related to corporate development and completed acquisitions, as well as higher labor related costs for additional staff and stock-based compensation expense. Offsetting the decrease was lower incurred but not reported losses for our self-insured health care plan and the absence of one-time Separation costs in 2024 of $3.8 million. Corporate Services also had lower investment returns of $800,000 on our nonqualified defined benefit plans.

Current wording

During the first nine months of 2025, Corporate Services contributed negative EBITDA of $44.1 million, compared to negative EBITDA of $42.3 million in the prior year. Corporate Services had higher selling, general and administrative costs of $1.0 million in the year, driven largely by an increase in business development costs of $6.5 million related to corporate development and completed acquisitions and a less favorable adjustment of $2.2 million to the incurred but not reported losses in our captive insurance program. Offsetting the increased costs was lower payroll-related costs and the absence of one-time Separation costs in 2024 of $3.8 million. Corporate Services also had lower investment returns of $700,000 on our nonqualified defined benefit plans.

Previous wording

At June 30, 2025, we had unrestricted cash and cash equivalents of $26.6 million, working capital of $706.1 million and borrowing capacity of $294.0 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, 2025, 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, 2025, we had unrestricted cash and cash equivalents of $30.7 million, working capital of $660.9 million and borrowing capacity of $456.6 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, 2025, 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

We currently estimate total 2025 capital expenditures for maintenance and improvement to be between $160 million and $225 million. For the six months ended June 30, 2025, we spent $111.0 million, largely on the replacement of depleting aggregate reserves, construction equipment and plant improvements.

Current wording

We currently estimate total 2025 capital expenditures for maintenance and improvement to be between $160 million and $225 million. For the nine months ended September 30, 2025, we spent $154.8 million, largely on the replacement of depleting aggregate reserves, construction equipment and plant improvements.

Previous wording

Additionally, for the six months ended June 30, 2025, we spent $619.5 million on growth initiatives, which comprised of $501.9 million on acquisitions and $117.6 million on aggregate expansion and greenfield projects. In connection with the Strata acquisition, we also received proceeds of $14.5 million on the sale of four ready-mix plant operations. For the remainder of 2025, we estimate to spend $50.1 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 2025 will be funded by various sources, including internally generated cash and debt facilities.

Current wording

Additionally, for the nine months ended September 30, 2025, we spent $663.5 million on growth initiatives, which comprised of $528.0 million on acquisitions and $135.5 million on aggregate expansion and greenfield projects. In connection with the Strata acquisition, we also received proceeds of $14.5 million on the sale of four ready-mix plant operations. For the remainder of 2025, we estimate to spend $32.2 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 2025 will be funded by various sources, including internally generated cash and debt facilities.

Previous wording

Cash used in operating activities at June 30, 2025, increased $78.1 million, largely related to higher working capital needs and higher net loss in the period. Cash used by working capital components totaled $234.8 million for the six months ended June 30, 2025, compared to $195.9 million for the six months ended June 30, 2024. This increase in cash usage was primarily the result of higher payroll-related costs due in part to the additional employees associated with acquisitions; timing of prepaid insurance and income taxes; and fluctuations in the timing of payment on accounts payable.

Current wording

Cash provided by operating activities at September 30, 2025, decreased $67.3 million, largely related to higher working capital needs and a decrease in net income. Cash used by working capital components totaled $189.8 million for the nine months ended September 30, 2025, compared to $146.5 million for the nine months ended September 30, 2024. 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, and timing of prepaid insurance, offset in part by lower liquid asphalt and cement inventory balances.

Previous wording

The increase in cash used in investing activities for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was primarily due to additional investments to grow our company. We spent $491.7 million more on acquisitions in 2025 to acquire Strata, an aggregates quarry operation in Oregon and a construction materials and contracting services business in Minnesota, as discussed in Note 10. We also spent $125.0 million more on capital expenditures, including the replenishment of depleting aggregate reserves and greenfield projects. The increase in cash usage was offset in part by 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 in the second quarter of 2025.

Current wording

The increase in cash used in investing activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was primarily due to additional investments to grow our company. We spent $513.0 million more on acquisitions in 2025, including the acquisition of Strata, as discussed in Note 10. We also spent $163.1 million more on capital expenditures, including the replenishment of depleting aggregate reserves and greenfield projects. The increase in cash usage was offset in part by 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

The increase in cash flows provided by financing activities for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was largely related to the funding of a new Term Loan B in March of 2025, as well as borrowings under our revolving credit facility in the second quarter of 2025, as discussed in Note 13. Offsetting the cash provided by long-term debt were higher debt issuance costs associated with the amendment of our senior secured credit agreement to increase our revolving credit facility capacity, extend the maturity date of the revolving credit facility and Term Loan A, and the issuance of a new Term Loan B.

Current wording

The increase in cash flows provided by financing activities for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was largely related to the funding of a new Term Loan B in March of 2025, as well as borrowings under our revolving credit facility, as discussed in Note 13. Offsetting the cash provided by long-term debt were higher debt issuance costs associated with the amendment of our senior secured credit agreement to increase our revolving credit facility capacity, extend the maturity date of the revolving credit facility and Term Loan A, and the issuance of a new Term Loan B.

Previous wording

At June 30, 2025, our long-term debt reflected an increase of approximately $680.0 million from the balance at December 31, 2024. This increase is due to issuing a new $500 million Term Loan B facility with the proceeds being used to fund a portion of Strata's purchase price in addition to borrowing $183 million under our revolving credit facility to fund seasonal working capital needs, an asset purchase and additional acquisitions.

Current wording

At September 30, 2025, our long-term debt reflected an increase of approximately $514.1 million from the balance at December 31, 2024. This increase is due to issuing a new $500 million Term Loan B facility with the proceeds being used to fund a portion of Strata's purchase price in addition to borrowing $20 million under our revolving credit facility.

Previous wording

At June 30, 2025, our total estimated interest payments over the life of our debt reflected an increase of approximately $259.1 million from the total estimated interest payments at December 31, 2024. This increase is primarily due to the change in long-term debt outstanding related to the new Term Loan B and borrowings under our revolving credit facility as previously mentioned.

Current wording

At September 30, 2025, our total estimated interest payments over the life of our debt reflected an increase of approximately $184.1 million from the total estimated interest payments at December 31, 2024. This increase is primarily due to the change in long-term debt outstanding related to the new Term Loan B and borrowings under our revolving credit facility, as previously mentioned.

Previous wording

EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin are most directly comparable to the corresponding GAAP measures of net income and net income 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 stock-based compensation and unrealized gains and losses on benefit plan investments as they

Current wording

EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin are most directly comparable to the corresponding GAAP measures of net income and net income margin. We believe these non-GAAP financial measures, in addition to corresponding

Previous wording

are considered non-cash and not part of our core operations. We also exclude the one-time, non-recurring costs associated with the Separation as those are not expected to continue. 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.

Current wording

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 stock-based compensation, unrealized gains and losses on benefit plan investments and the impact of selling acquired inventory after markup to fair value as part of acquisition accounting as they are considered non-cash and not part of our core operations. We also exclude the one-time, non-recurring costs associated with the Separation as those are not expected to continue. 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.

Previous wording

EBITDA is calculated by adding back income taxes, interest expense (net of interest income) and depreciation, depletion and amortization expense to net income (loss). EBITDA margin is calculated by dividing EBITDA by revenues. Adjusted EBITDA is calculated by adding back unrealized gains and losses on benefit plan investments, stock-based compensation and one-time Separation costs, 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.

Current wording

EBITDA is calculated by adding back income taxes, interest expense (net of interest income) and depreciation, depletion and amortization expense to net income (loss). EBITDA margin is calculated by dividing EBITDA by revenues. Adjusted EBITDA is calculated by adding back unrealized gains and losses on benefit plan investments, stock-based compensation, impact of selling acquired inventory after markup to fair value as part of acquisition accounting, and one-time Separation costs, 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.