What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-20 compared with 2025-02-21 · 193 added, 266 removed, 540 unchanged (46% of the section changed)

9 unchanged sentences

We also champion a positive workplace culture by focusing on safety, training, compensation and work-life balance.

We are one of the leading providers of crushed stone and sand and gravel in the United States and, as of December 31, 2024, operated through six operating segments across 14 states:

Pacific, Northwest, Mountain, North Central, South and Energy Services.

These operating segments are used to determine our reportable segments and are based on our method of internal reporting and management of our business, as discussed in Item 8 - Note 15.

Our reportable segments are:

Pacific, Northwest, Mountain, Central and Energy Services.

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

As an aggregates-led construction materials and contracting services provider in the United States, our 1.2 billion tons of aggregate reserves provide the foundation for a vertically integrated business strategy, with

approximately 37 percent of our aggregates in 2024 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.

As an aggregates-based construction materials and contracting services provider in the United States, our 1.3 billion tons of aggregate reserves provide the foundation for a vertically integrated business strategy, with approximately 35 percent of our aggregates in 2025 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, higher-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 tending to be more stable across economic cycles, which helps offset the cyclical nature of the private markets.

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:

Alaska, California and Hawaii

Oregon and Washington

Alaska, California, Hawaii, Oregon and Washington

Idaho, Montana and Wyoming

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Trucking Rail Barge

Pacific X X X X X X X X X X

Northwest X X X X X X X X X

West X X X X X X

Mountain X X X X X X

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Prior to the Separation, we operated as a wholly owned subsidiary of Centennial and an indirect, wholly owned subsidiary of MDU Resources and not as a stand-alone company.

The accompanying audited consolidated financial statements and footnotes for the periods prior to the Separation were prepared on a “carve-out” basis using a legal entity approach in conformity with GAAP and were derived from the audited consolidated financial statements of MDU Resources as if we operated on a stand-alone basis during these periods.

For periods subsequent to the Separation, the financial statements are presented on a consolidated basis in conformity with GAAP.

For additional information related to the basis of presentation, see Item 8 - Note 1.

Prior to the Separation, we participated in Centennial’s centralized cash management program, including its overall financing arrangements.

We also had related party note agreements in place with Centennial for the financing of our capital needs.

Interest expense in the Consolidated Statements of Operations, for the periods prior to the Separation, reflects the allocation of interest on the borrowings associated with the related-party note agreements.

Upon the completion of the Separation, we implemented our own financing agreements with lenders.

For additional information on our current debt financing, see Item 8 - Note 9.

The financial statements for all periods are presented on a consolidated basis in conformity with GAAP.

All intercompany balances and transactions between the businesses comprising Knife River have been eliminated in the accompanying audited consolidated financial statements.

For additional information related to the basis of presentation, see Item 8 - Note 1.

In January 2025, we made a change to our organizational structure to better align with our business strategy.

We reorganized our business segments to reflect changes in the way our chief operating decision maker evaluates performance, makes operating decisions and allocates resources.

Our former Pacific and Northwest operating segments were combined to form the new West operating segment.

Our former North Central and South operating segments were combined to form the new Central operating segment.

The reorganization resulted in four operating segments:

West, Mountain, Central and Energy Services, each of which is also a reportable segment.

Each segment’s performance is evaluated based on segment results without allocating corporate expenses, which include corporate costs associated with accounting, legal, treasury, business development, information technology, human resources, and other corporate expenses that support the operating segments.

Prior periods have been recast to conform to the current reportable segment presentation.

Market Conditions and Outlook

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(In millions)

Pacific $ 100.9 $ 51.2 $ 72.2

Northwest 129.3 196.2 210.7

West $ 203.6 $ 230.2 $ 247.4

Mountain 395.7 339.9 256.7

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Total $ 1,032.1 $ 745.6 $ 662.2

Backlog as of December 31, 2024, is 13 percent higher than the prior period and expected margins are comparable.

Of the $745.6 million of backlog at December 31, 2024, we expect to complete an estimated $630.5 million during 2025.

Backlog as of December 31, 2025, was 38 percent percent higher than the prior period with lower expected margins.

Of the $1.0 billion of backlog at December 31, 2025, we expect to complete an estimated $768.8 million, or 75 percent, during 2026.

Approximately 89 percent of our backlog as of December 31, 2025, relates to publicly funded projects, including street and highway construction projects, which are driven primarily by public works projects for state departments of transportation.

Further, there continues to be infrastructure development, which is expected to provide bidding opportunities in our markets throughout 2025.

Further, there continues to be infrastructure development across our segments, which is expected to provide bidding opportunities in our markets throughout 2026.

Period-over-period increases or decreases in backlog may not be indicative of future revenues, margins, net income or EBITDA.

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States have moved forward with allocating funds from federal programs, such as the IIJA, which is authorized to provide $1.2 trillion in funding from 2022 through 2026.

As of November 2024, approximately 43 percent of IIJA formula funding has yet to be obligated to projects in our market areas.

Also in 2024, six of the 14 states where we operate have passed ballot measures to increase their transportation investment.

Additionally, DOT budgets in the states where we operate remain strong, which favorably affects our bidding season in early 2025.

We continue to monitor the implementation and impact of these legislative items and the state DOT budgets.

As of November 2025, approximately 46 percent of IIJA formula funding had yet to be distributed in our 14-state operating market.

Additionally, DOT budgets in most of the states where we operate remain strong, with ten of our 14 states having record DOT budgets going into the 2026 fiscal year.

The North Dakota DOT’s estimated bid lettings for their 2026 construction program is between $745 million and $810 million, which is a significant increase over their 2025 bid lettings of $345 million.

We have already seen our contracting services backlog increase in North Dakota, year-over-year, and expect more work yet to bid.

Oregon is the one Knife River state that has not finalized its budget for the current biennium, however, their budget has been legislatively approved and is expected to be approximately $6 billion, just short of the record funding from the previous biennium.

The Oregon DOT expects its 2026 asphalt paving volumes will be comparable to 2025.

We continue to monitor legislative activity in all of our states as they address their infrastructure needs.

In early 2025, the American Society of Civil Engineers published its 2025 Report Card for America's Infrastructure, assigning the United States roads a "D+" grade and estimating that between 2024 and 2033, the country will require more funding than what is currently authorized.

It is estimated that a total of $2.2 trillion in funding will be needed for our roadway systems to reach a state of good repair during that time period.

Profitability .

Our management team continually monitors our margins and has been proactive in applying strategies to increase margins to support our long-term profitability goals and to create shareholder value.

In 2023, we began implementing EDGE initiatives and established teams to deliver training, assist with targeting higher-margin bidding opportunities across the regions and pursue growth opportunities, as well as identifying ways to increase efficiencies and reduce costs.

In 2023, its first year of operation, the Materials Process Improvement Team (Materials PIT Crew) traveled to 10 locations throughout our operational footprint, visiting 67 individual aggregate, asphalt and ready-mix concrete plants.

In 2024, the team traveled to eight additional locations and 58 individual plants, in addition to follow-up trips to sites visited in the prior year.

The Materials PIT Crew also hosted a Plant Equipment Best Practices training seminar at our training center in Oregon in December of 2024.

This training was attended by approximately 150 front line plant operators and maintenance personnel and was supported by our internal subject matter experts and a number of plant equipment manufacturers.

Also in 2024, a broader process improvement framework was established with teams focused on standardization, commercial excellence and operational excellence, due in part to the success of the Materials PIT Crew.

Acquisitions .

Our management team has also continued to evaluate growth opportunities, both through organic growth and acquisitions they believe will generate shareholder value.

In 2024, we invested $131.0 million of capital to close on six acquisitions.

The acquisitions include aggregate-specific purchases in key markets and expanding our ready-mix and liquid asphalt operations.

In November 2024, we purchased the business of Albina Asphalt, which has operations in Washington, Oregon and California and expanded the footprint of our high-margin liquid asphalt materials product line.

In December 2024, we also entered into a definitive agreement to acquire Strata Corporation, a leading construction materials and contracting services provider in North Dakota and northwestern Minnesota.

The acquisition of Strata is expected to close in the first half of 2025, subject to customary closing conditions.

In addition to cash on hand, we intend to use a portion of the proceeds from the issuance of a new $500 million Term Loan B facility to fund the purchase of Strata.

As a people-first company, we continually take steps to address safety, recruitment and retention of our employees.

Safety is one of our core values, and as part of our safety culture, we believe that all incidents and injuries are preventable.

We continue to advance our culture of safety through engagement, and empowering our team members to take action and make meaningful changes that improve the well-being of themselves and others.

Focusing on the development and retention of our employees is key to our success.

We continue to deploy resources to attract, develop and retain qualified and diverse talent.

As the United States faces shortages in the availability of individuals to fill careers in our industry, we have taken significant steps to showcase construction as a career of choice.

We own and operate a state-of-the-art training facility, the Knife River Training Center, which is used corporate-wide 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, which is helping to address an industry-wide labor shortage.

The training facility also offers a variety of courses around leadership development for all our employees.

We employ professional instructors as part of our Training and Development team, which is based out of the Knife River Training Center.

This team has a long-standing tradition of offering quality training to both frontline and leadership-level employees.

In 2024, the team provided training to nearly 1,100 students through 74 separate courses.

Training courses include:

commercial driver’s license/new truck driver, experienced truck driver, new and experienced equipment operator, sales, leadership/facilitator development and construction industry engagement.

increase efficiencies and reduce costs.

The Materials Process Improvement Team (Materials PIT Crew) has rolled out new technologies and training programs to boost productivity and control costs across the product lines and provide more real-time visibility into daily operations.

Under the current tariff environment, we did not experience a material direct impact in 2025.

We have clauses in most of our quotes that allows for us to pass-through increased costs associated with tariffs to our customers, and to date, we have been substantially successful with passing those costs on.

We continue to closely monitor the effects and changes to these announcements.

Our management team continues to evaluate growth opportunities, both through organic growth and acquisitions they believe will generate shareholder value.

Our business development team is focused on our growth with materials-led businesses in mid-size, higher-growth markets, and has several targets at various stages of completion in our acquisition pipeline.

In 2025, we successfully completed the acquisition and integration of five companies expanding our footprint within existing markets, which was an investment of $611.7 million.

As a result of these acquisitions, we added approximately 30 years of aggregate reserves, 29 ready-mix plants, 5 asphalt plants and a fleet of equipment and vehicles, as well as skilled construction, materials production and delivery professionals.

We expect the additions made to our company in 2025 will provide meaningful volume and margin growth in future periods, as well as provide synergies across the segments.

For more information on our acquisitions, see Item 8 - Note 3.

In addition, we continue to invest in multiple organic projects, including an aggregates expansion project in South Dakota that will increase our production capabilities in the Sioux Falls market.

This project is scheduled to be operational in 2027.

In the first quarter of 2025, we completed construction of a processing plant to manufacture polymer-modified asphalt (PMA) and increased our liquid asphalt storage capacity at our South Dakota terminal, which has allowed us to more cost effectively supply this market.

In Twin Falls, Idaho, we are greenfielding new ready-mix operations, which allows us to build a local team in this market, and are expected to be fully operational in the first quarter of 2026.

Consolidated Overview

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gains or losses on the sale of assets;

expenses for the transition services agreement with MDU Resources;

expenses for the transition services agreement with MDU Resources in 2023;

and other miscellaneous expenses.

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earnings or losses on joint venture arrangements;

and other miscellaneous income or expenses, including income related to the transition services agreement with MDU Resources.

and other miscellaneous income or expenses, including income related to the transition services agreement with MDU Resources in 2023.

Income tax expense consists of corporate income taxes related to our net income.

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81.9 55.2 58.1 48 % (5) %

Other (expense) income

9.3 10.0 7.0 7 % 43 %

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(In millions)

Pacific $ 493.1 $ 462.2 $ 418.1 $ 59.9 $ 56.2 $ 44.0 12.1 % 12.2 % 10.5 %

Northwest 692.4 666.1 600.2 149.8 121.1 103.9 21.6 % 18.2 % 17.3 %

$ 1,210.1 $ 1,185.3 $ 1,128.3 $ 234.1 $ 209.7 $ 177.3 19.3 % 17.7 % 15.7 %

Mountain 644.0 663.1 634.0 99.6 113.5 103.2 15.5 % 17.1 % 16.3 %

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2025 Compared to 2024

Revenue increased $68.7 million as increased pricing added $122.9 million during the year as a result of our pricing initiatives across all product lines, except liquid asphalt.

In 2024, we saw price increases of low-double-digits for ready-mix concrete, high-single-digits for aggregates and low-single digits for asphalt.

Our contracting services revenue also increased in most regions, particularly in the Mountain, Northwest and Pacific regions, as we benefited from additional public-agency work and timing of projects.

Partially offsetting these increases were decreased ready-mix, aggregate and asphalt sales volumes of $120.5 million, primarily due to EDGE-related initiatives of quality over quantity of work, timing of projects and lower demand for private projects.

Liquid asphalt revenue decreased due to lower pricing as a result of reduced supply input costs across our market areas.

Revenue increased $247.0 million, largely driven by contributions of acquired companies, as well as price increases of mid-single digits on aggregates, ready-mix concrete and cement across our legacy operations.

Partially offsetting these increases were decreased asphalt sales volumes and pricing, primarily due to decreased asphalt paving work.

Gross Profit and Gross Margin

Gross profit improved $30.9 million while gross margin improved 70 basis points.

Contracting services margins increased 160 basis points as we saw an increase in revenues along with improved bid margins and favorable project execution during the year.

Also contributing to the improvement was higher margins on asphalt, aggregates and ready-mix concrete as higher sales prices outpaced costs while volumes declined as we continue to choose quality of work over quantity of work.

Liquid asphalt continued to see a reduction in gross profit, as a result of lower revenues due to the pricing decrease.

Gross profit improved $7.5 million while gross margin decreased 130 basis points.

The improved gross profit was a result of contributions of acquired companies and higher gross profit on ready-mix concrete and cement across our legacy operations as pricing increases outpaced costs.

Contracting services margins decreased 180 basis points as we saw lower margins on work due to the type of work and liquid asphalt continued to see a reduction in gross margin as a result of reduced market pricing.

Further driving down gross margin was the impact of selling acquired inventory after markup to fair value as part of acquisition accounting of $3.4 million to the aggregates product line and $295,000 to the liquid asphalt product line.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $11.1 million.

Our reportable segments had higher costs of $4.1 million, which was primarily related to higher payroll-related costs, largely due to additional staffing, competitive wage increases, and higher professional services.

These increases were offset in part by higher asset sale gains of $3.4 million and the absence of non-cash asset impairments of $5.8 million on aggregate sites discussed in Item 8 - Note 2.

Corporate Services had increased costs of $7.0 million.

The increase in costs for non-Separation related expenses totaled $7.4 million, which was primarily higher due diligence and integration costs related to corporate development and completed acquisitions of $7.5 million and higher information technology costs of $3.4 million.

These costs were partially offset by lower payroll-related costs of $2.4 million, largely due to lower bonus accruals, and a reduction in insurance loss reserves at our captive insurer of $2.6 million.

As a result of the Separation, we experienced higher recurring costs as a publicly traded company of $6.3 million, including payroll-related costs of $9.5 million, largely due to additional staff and stock-based compensation expenses for the management team and board of directors;

information technology costs of $2.8 million;

professional services of $1.8 million;

and fees of $750,000 primarily related to fees on new debt issued in conjunction with the Separation, partially offset by a reduction in general corporate expenses from MDU Resources of $8.9 million.

We also incurred less one-time costs of $6.5 million primarily consisting of insurance costs related to the Separation and the transition services agreement with MDU Resources.

As a percentage of revenues, selling, general and administrative expenses was 9.3% in 2025, compared to 8.7% in 2024.

This increase was largely driven by increased costs from recently acquired companies, including $12.9 million of purchase accounting-related intangible asset amortization, and $4.4 million higher acquisition-

related transaction costs.

These increases were offset in part by higher asset sale gains of $12.5 million on the sale of non-strategic assets and equipment throughout the company.

Interest Expense

Interest expense decreased $2.9 million due primarily to lower average debt balances, offset by higher average interest rates.

Other Income (Expense)

Other income (expense) increased $3.0 million, primarily due to increased interest income on higher cash balances.

Interest expense increased $26.7 million due primarily to higher average debt balances with the issuance of a new $500 million Term Loan B in March of 2025 and borrowings under our revolving credit facility during the year, offset by slightly lower average interest rates.

Other income decreased $700,000, primarily due to a $4.3 million decrease in interest income on lower cash balances, offset by a one-time gain of $3.5 million on the bargain purchase of an aggregate quarry operation in the West segment.

Income Tax Expense

Income tax expense increased $6.9 million corresponding with higher income before income taxes.

Income tax expense decreased $13.2 million corresponding with lower income before income taxes.

Our effective tax rate for 2025 was 26.3 percent, compared to 25.6 percent in 2024.

The increase in our effective tax rate for the current year was largely due to increased non-deductible compensation expenses and a mix of state income taxes.

For a reconciliation of the federal tax rate to our effective tax rate, see Item 8 - Note 16.

2024 Compared to 2023

Revenue improved $295.6 million as increased pricing added $217.3 million across all regions and product lines, supported by demand, increased market pricing and EDGE-related pricing initiatives.

We also saw increased contracting services revenue in most regions, especially in the Mountain and Northwest regions that benefited from strong demand and more available work.

Higher liquid asphalt sales volumes also contributed to the increased revenue.

Partially offsetting these increases were decreased asphalt, ready-mix concrete and aggregate sales volumes of $69.2 million, primarily attributable to the absence in 2023 of certain impact projects, lower internal sales volumes resulting from the strategy to target improved bid margins, project timing and the sale of non-strategic assets in southeast Texas in December 2022.

Revenue improved $68.7 million as pricing increased during the year as a result of our pricing initiatives across all product lines, except liquid asphalt.

In 2024, we saw price increases of low-double-digits for ready-mix concrete, high-single-digits for aggregates and low-single digits for asphalt.

Our contracting services revenue also increased, as we benefited from additional public-agency work and timing of projects.

Partially offsetting these increases were decreased ready-mix, aggregate and asphalt sales volumes, primarily due to EDGE-related initiatives of quality over quantity of work, timing of projects and lower demand for private projects.

Liquid asphalt revenue decreased due to lower pricing as a result of reduced supply input costs across our market areas.

Gross Profit and Gross Margin

Gross profit improved by $30.9 million while gross margin improved 70 basis points.

Higher sales prices outpacing costs across our materials product lines contributed $126.0 million in gross profit, which was largely the result of increased market pricing and EDGE-related initiatives, including operating efficiencies and pricing optimization.

Higher contracting services margins contributed $48.9 million to gross profit, primarily related to improved bid margins, certain impact projects and job productivity gains.

Additionally, liquid asphalt margins benefited from cost improvements and higher sales volumes.

Contracting services margins increased 160 basis points as we saw an increase in revenues along with improved bid margins and favorable project execution during the year.

Liquid asphalt continued to see a reduction in gross profit, as a result of lower revenues due to the pricing decrease.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $75.9 million.

As a result of the Separation, we experienced increased recurring costs, including payroll-related costs of $12.3 million, largely due to additional staff and stock-based compensation expense for the management team and board of directors;

insurance costs of $2.8 million;

and professional services of $2.6 million, which were offset in part by a reduction in general corporate expenses from MDU Resources of $7.6 million, as discussed in Item 8 - Note 1.

Also, as part of the Separation, we incurred one-time costs of $10.0 million primarily related to professional services, insurance costs and the transition services agreement with MDU Resources.

Further contributing to the higher selling, general and administrative costs were increased payroll-related costs of $27.7 million, due in part to higher incentive accruals across the segments based on our performance;

non-cash asset impairments of $5.8 million on aggregate sites discussed in Item 8 - Note 2;

absence of a gain of $6.7 million recognized in 2022 on the sale of non-strategic assets in southeast Texas;

higher office expenses of $2.6 million;

increased expected credit losses of $1.5 million directly associated with an increase in receivable balances over 90 days and the absence of bad debt recoveries in 2022;

and higher information technology and other costs.

As a percentage of revenues, selling, general and administrative expenses was 8.7% in 2024, compared to 8.6% in 2023.

Interest Expense

Interest expense increased $28.0 million due primarily to higher average interest rates.

Interest rates were higher as a result of settling related-party notes payable as part of the Separation and entering into new debt agreements with higher interest rates, which resulted in additional interest expense in the period of $29.5 million.

Partially offsetting the increase was lower average debt balances.

For additional information, see Item 8 - Notes 9 and 19.

Other Income (Expense)

Other income (expense) increased $12.4 million, due in part to improved returns on our nonqualified benefit plan investments of $5.5 million;

increased interest income of $5.2 million on higher cash balances and on the cash held in escrow for the $425.0 million of senior notes issued prior to the completion of the Separation;

and income resulting from the transition services agreement with MDU Resources, as discussed in Item 8 - Note 19.

Interest expense decreased $2.9 million due primarily to lower average debt balances, offset by higher average interest rates.

Other income increased $3.0 million, primarily due to increased interest income on higher cash balances.

Income Tax Expense

Income tax expense increased $6.9 million corresponding with higher income before income taxes.

Our effective tax rate for 2024 was 25.6 percent, compared to 25.5 percent in 2023.

For a reconciliation of the federal tax rate to our effective tax rate, see Item 8 - Note 16.

Business Segment Financial and Operating Data

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We provide segment level information by revenue, EBITDA and EBITDA margin as these are measures of profitability used by management and our chief operating decision maker to assess operating results.

On January 1, 2025, we completed a reorganization of our operating segments, including the management of the segments, to align with our business strategy.

In the first quarter of 2025, we will begin reporting our financial information under four operating segments:

West, Mountain, Central and Energy Services.

Under the new operating structure, the previous Pacific and Northwest operating segments will become the West operating segment and the North Central and South operating segments will become the Central operating segment.

Results of Operations – Pacific

Years ended December 31, 2024 2023 2022 2024 vs 2023

(In millions)

Revenue $ 493.1 $ 462.2 $ 418.1 7 % 11 %

EBITDA $ 59.9 $ 56.2 $ 44.0 7 % 28 %

EBITDA margin 12.1 % 12.2 % 10.5 %

2024 2023 2022

(In millions)

Aggregates $ 112.3 $ 104.8 $ 92.3

Ready-mix concrete 145.8 142.3 127.5

Asphalt 30.7 32.2 35.7

Other* 149.3 142.7 114.2

Contracting services 141.9 126.3 129.5

Internal sales (86.9) (86.1) (81.1)

$ 493.1 $ 462.2 $ 418.1

__________________

* Other includes cement, precast/prestressed concrete, merchandise, and other products that individually are not considered to be a major line of business for the segment.

2024 Compared to 2023

Our revenue increased $30.9 million in 2024.

Price increases across all product lines as a result of EDGE-related initiatives and aggregate product mix contributed $36.9 million of additional revenue in 2024.

We also had a $15.5 million increase in contracting services, primarily driven by large public agency-related construction projects in northern California.

Partially offsetting the increased revenue was reduced volumes of $27.6 million across the remaining product lines, partly due to increased competition in the California market as well as reduced demand in marine construction.

We saw an increase in EBITDA of $3.7 million, while EBITDA margin decreased 10 basis points.

The increase in EBITDA was due in part to additional gross profit in northern California’s contracting services, primarily related to increased public agency-related construction projects and operational efficiencies recognized during the year.

Also contributing to the increase was lower selling, general and administrative expenses of $2.3 million due to a gain of $2.2 million on equipment sales in California and the absence of a non-cash impairment in 2023 of $2.2 million on a leased aggregate site, as discussed in Item 8 - Note 2, offset in part by higher professional services.

Gross profit on our construction materials decreased $4.6 million in 2024 as a result of lower volumes and higher production costs.

2023 Compared to 2022

Our revenue increased $44.1 million in 2023.

This increase was across most product lines and was the result of increased prices to cover rising costs and the early stages of EDGE-related pricing implementation, as well as increased sales of higher priced products, adding $32.0 million.

We saw strong cement product sales volumes to third-party customers in Alaska and strong aggregate sales volumes of $6.0 million, primarily from increased demand in Hawaii as the local economy continues to regain momentum for public and private work.

Ready-mix concrete sales volumes increased in northern California as a result of an acquisition in December 2022, which were offset in part by lower sales volumes in Alaska due to fewer projects over the prior year.

Partially offsetting the increased revenues was the absence in 2023 of an impact project in California of $11.2 million, which affected both contracting services workloads and asphalt volumes.

Northern California experienced mild weather in the fourth quarter which also contributed to a strong finish to the year.

We saw an increase in EBITDA of $12.2 million and EBITDA margin of 170 basis points in 2023.

These improvements are the direct result of increased pricing outpacing costs and strong demand, as previously discussed.

We also experienced lower fuel and asphalt oil costs.

Partially offsetting the increase was higher selling, general and administrative expenses of $11.6 million and lower contracting services gross profit of $1.9 million as a result of cost overruns on a project in California.

The increased selling, general and administrative expenses includes higher payroll-related costs of $5.9 million, due in part to higher incentive accruals based on the our performance;

a non-cash asset impairment of $2.2 million on a leased aggregate site, as discussed in Item 8 - Note 2;

higher rent expense of $700,000;

increased building repairs of $500,000;

and other miscellaneous expenses.

Results of Operations – Northwest

In January 2025, we made a change to our organizational structure to better align with our business strategy.

We reorganized our business segments to reflect changes in the way our chief operating decision maker evaluates performance, makes operating decisions and allocates resources.

Our former Pacific and Northwest operating segments were combined to form the new West operating segment.

Our former North Central and South operating segments were combined to form the new Central operating segment.

The reorganization resulted in four operating segments:

West, Mountain, Central and Energy Services, each of which is also a reportable segment.

Each segment’s performance is evaluated based on segment results without allocating corporate expenses, which include corporate costs associated with accounting, legal, treasury, information technology, human resources, and other corporate expenses that support the operating segments.

Prior periods presented have been recast to conform to the current reportable segment presentation.

Results of Operations – West

Years ended December 31, 2025 2024 2023 2025 vs 2024

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2025 Compared to 2024

Our revenue increased $26.3 million in 2024, most of which was due to large public agency-related construction projects driving an increase in contracting services and asphalt sales volumes.

In addition, improved pricing on ready-mix concrete and aggregates provided $38.1 million more in revenue.

Offsetting the increases were a decrease

in ready-mix and aggregates sales volumes due to EDGE-related pricing initiatives and lower demand in the residential and commercial markets.

Our revenue increased $24.8 million in 2025, as a result of more available public-agency and private contracting services work as well as increased ready-mix concrete volumes and pricing in our California market compared to prior year.

Hawaii experienced increased ready-mix concrete and cement pricing and volumes of $36.4 million driven by increased market demand, while Alaska saw its aggregate and ready-mix concrete volumes increase by $8.3 million due to stronger demand in the private sector.

Partially offsetting these increases was decreased volumes throughout most Oregon product lines due to less secured public-agency and private work.

We saw an increase in both EBITDA of $24.4 million and EBITDA margin of 160 basis points.

These improvements resulted from higher construction gross profit of $15.5 million due to favorable job execution, efficiencies gained at our Spokane prestress facility and more available public agency work.

We also benefited from improved ready-mix concrete margins as a result of increased pricing and favorable project execution in southern Oregon and increased asphalt margins due to lower asphalt oil and variable production costs.

In addition, our selling, general and administrative expenses decreased $3.0 million due to the absence of a non-cash asset impairment in 2023 of $3.6 million on an aggregate site, as discussed in Item 8 - Note 2;

higher gains on the sale of equipment;

lower bad debt expense of $500,000;

and lower professional services, offset in part by higher payroll-related costs of $3.6 million due to additional staffing.

These improvements were primarily driven by higher cement and ready-mix concrete gross profit of $17.5 million due to market demand in Hawaii and Alaska, as well as more available work and favorable project execution in California with a $14.4 million increase in contracting services gross profit.

In addition, the segment benefitted from a one-time

gain of $3.5 million on the bargain purchase of an aggregate quarry operation in the first quarter of 2025 and higher asset sale gains of $3.5 million.

Offsetting, was a decrease in Oregon contracting services margin due to less available agency work and less market demand, which also impacted aggregates and ready-mix concrete margins.

Higher selling, general and administrative costs, mostly attributed to increased labor-related costs, also reduced EBITDA.

2024 Compared to 2023

Our revenue increased $65.9 million in 2023, largely the result of EDGE-related pricing initiatives on all product lines, which together contributed $52.0 million.

In addition, higher demand for contracting services work related to public agencies and railroad projects, as well as prestress data center and other projects, accounted for an increase in revenues of $37.7 million.

Partially offsetting the increases were lower sales volumes across all product lines of $22.2 million, due in large part to the timing of impact projects in 2023 and decreased demand for asphalt paving and residential work.

Our revenue increased $57.0 million in 2024, largely the result of EDGE-related pricing initiatives on all product lines, which together contributed $76.5 million as well as higher demand for contracting services work primarily driven by large public agency-related construction projects.

Partially offsetting the increases were lower aggregate and ready-mix sales volumes due to EDGE-related pricing initiatives and lower demand in the residential and commercial markets.

We saw an increase in EBITDA of $32.4 million and EBITDA margin of 200 basis points in 2024.

These improvements are the result of higher sales prices outpacing costs across all product lines by $26.1 million, largely resulting from EDGE-related pricing initiatives and product mix, and lower fuel, asphalt oil and equipment costs, which were offset in part by lower volumes across all product lines.

Contracting services improved $8.0 million, largely due to the strong backlog of work established and the reduction of job losses as compared to the prior year, which were offset in part by startup costs related to the new prestress facility.

We also had higher selling, general and administrative expenses which includes $3.9 million of higher payroll-related costs largely related to higher wages and performance-based incentives;

a non-cash asset impairment of $3.6 million on an aggregate site, as discussed in Item 8 - Note 2;

and $3.0 million lower asset sale gains.

These improvements resulted from higher contracting services gross profit of $18.3 million due to favorable job execution, efficiencies gained at our Spokane prestress facility and more available public agency work.

In addition, our selling, general and administrative expenses decreased $5.3 million due to the absence of a non-cash asset impairment in 2023 of $5.8 million on certain aggregate sites, as discussed in Item 8 - Note 2;

higher gains on the sale of equipment;

lower bad debt expenses, offset in part by higher payroll-related costs due to additional staffing.

Results of Operations – Mountain

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2025 Compared to 2024

Our revenue increased $29.1 million in 2024, primarily from an increase in Idaho public agency construction work and airport work, which drove increases in both contracting services revenue and asphalt volumes.

Our revenue decreased $19.1 million in 2025, primarily due to decreased contracting services work in Montana and Wyoming, which also contributed to lower aggregate and asphalt volumes of $12.7 million and $9.2 million, respectively.

The decrease was driven by less available asphalt paving work as a result of competitive bid dynamics and the type and location of available DOT projects throughout the region.

Partially offsetting this decrease was an increase in aggregate and ready-mix pricing of $13.2 million and higher contracting services revenue of $6.7 million in our Idaho market due to larger DOT projects.

We saw a decrease in EBITDA of $13.9 million and EBITDA margin of 160 basis points in 2025.

Our contracting services division experienced lower margins throughout the segment due to less secured work, while

favorable project execution partially offset this decrease.

Lower gross profit on aggregates and asphalt were largely the result of lower volumes due to fewer construction projects and higher repairs and maintenance costs.

Partially offsetting the decline was $3.6 million of higher asset sales gains in the year and higher ready-mix concrete gross profit, largely due to increased pricing.

2024 Compared to 2023

Our revenue improved $29.1 million in 2024, primarily from an increase in Idaho public agency construction work and airport work, which drove increases in both contracting services revenue and asphalt volumes.

We also benefited from the continued implementation of our EDGE-related pricing initiative throughout all product lines, which contributed $24.6 million in additional revenue.

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In addition, selling, general and administrative expenses increased $3.2 million, largely due the absence of asset sale gains in 2023 and higher payroll-related costs.

2023 Compared to 2022

Our revenue improved $92.0 million in 2023, 70 percent of which was derived from contracting services from strong demand for public agency, airport and commercial work throughout the region.

Pricing momentum across all product lines and throughout the region contributed $40.3 million.

The increased pricing was in response to rising costs, demand and growing markets, as well as the early stages of EDGE-related pricing implementation.

Aggregate volumes increased in the majority of locations with Wyoming recognizing an increase due to a number of wind energy projects throughout the state and certain areas of Montana saw higher volumes due to four airport projects.

Wyoming also experienced wetter weather conditions in 2023 which negatively impacted both ready-mix concrete and asphalt sales volumes, partially contributing to a $7.3 million decrease to revenue.

We saw an increase in EBITDA of $30.6 million and EBITDA margin of 290 basis points in 2023.

The improvement was the result of higher contracting services revenues and margins contributing profit of $19.7 million due to strong markets for public agency, airport and commercial work, as well as cost savings and job efficiencies.

Higher sales prices outpaced costs across all product lines by $11.9 million.

In addition, we also experienced lower fuel and equipment costs and had higher gains on asset sales.

Partially offsetting the increase was higher selling, general and administrative expenses, as a result of higher payroll-related costs of $2.4 million, including increased incentive accruals based on our performance.

Results of Operations – Central

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2025 Compared to 2024

Revenue increased $186.7 million in 2025, largely driven by contributions from acquired companies, as well as the impact of our legacy operations price increases in the aggregate product line of $12.5 million and ready-mix product line of $6.5 million.

Partially offsetting the increase was 6 percent less contracting services work in our northern states due to unfavorable weather in the second and third quarters and the timing of North Dakota DOT bid lettings, which also caused decreased aggregate volumes.

We saw an increase in EBITDA of $28.0 million while EBITDA margin decreased 20 basis points in 2025.

The EBITDA improvement is largely a result of acquired companies as well as increased asset sales gains of $5.5 million.

Offsetting this increase was less contracting services work largely due to unfavorable weather in most parts of the segment and the timing of North Dakota DOT bid lettings.

In addition, the impact of selling acquired inventory after markup to fair value as part of acquisition accounting of $3.4 million negatively impacted the aggregate product line.

2024 Compared to 2023

Our revenue decreased $6.9 million in 2024, as a result of lower asphalt and ready-mix concrete volumes and $15.1 million less contracting services revenues, largely due to our EDGE-related initiative of quality of work over quantity of work.

The north central region also saw less contracting services work and asphalt sales volumes in 2024 related to the timing of projects with more work completed in late 2023 due to favorable weather later in the construction season.

We also saw less contracting services work and asphalt sales volumes in our northern states in 2024 related to the timing of projects with more work completed in late 2023 due to favorable weather later in the construction season.

Partially offsetting the decrease in volumes was the benefit of higher prices on ready-mix concrete and asphalt of $24.4 million with the continued implementation of EDGE-related pricing initiatives.

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Offsetting these increases were higher selling, general and administrative expenses of $5.4 million, largely due to additional payroll-related costs of $5.7 million, due in part to additional staffing, and increased professional services fees, offset by higher gains on the sale of non-strategic assets in Texas of $2.3 million.

2023 Compared to 2022

Our revenue increased $45.2 million in 2023, as a result of higher selling prices across all product lines providing $76.1 million of additional revenue, largely due to EDGE-related pricing initiatives.

Contracting services saw a benefit of $20.8 million from improved bid margins and favorable weather across the regions, a large concrete and asphalt paving job in the north central region and increased paving work in Texas.

Partially offsetting these increases were lower sales volumes of $33.0 million across most product lines largely as the regions continue to target improved bid margins on projects which also impacts internal sales volumes and the absence of an impact project in South Dakota.

Also, decreased ready-mix concrete and aggregates sales due to a sale of non-strategic assets in southeast Texas in December 2022 impacted revenue.

We saw an increase in EBITDA of $30.0 million and EBITDA margin of 300 basis points in 2023.

The increase in EBITDA was largely due to higher sales prices across all product lines which contributed $30.0 million and higher contracting services margins of $22.5 million related to improved bid margins, impact projects and job productivity gains.

The increase was offset in part by higher selling, general and administrative expenses and decreased sales volumes.

Selling, general and administrative expenses increased $14.6 million, largely the absence of a gain of $6.7 million recognized in 2022 on the sale of non-strategic assets in southeast Texas;

additional payroll-related costs of $6.0 million, due in part to higher incentive accruals based on our performance;

and increased insurance costs of $1.4 million.

Results of Operations – Energy Services

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2025 Compared to 2024

Our revenue increased $62.3 million in 2025, largely 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 $15.4 million in revenue.

These increases were partially offset by lower volumes in our

legacy operations due to less carry over work from 2024 as well as lower pricing driven by current liquid asphalt market pricing.

Our EBITDA decreased $5.3 million and EBITDA margin decreased 560 basis points in 2025.

The decrease in EBITDA was driven by reduced market pricing mentioned above as well as planned and required maintenance costs of $1.9 million 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 earnings from the addition of Albina Asphalt.

2024 Compared to 2023

Our revenue decreased $16.6 million in 2024, largely due to lower pricing as a result of reduced supply input costs across our market areas.

Liquid asphalt sales volumes were up 4 percent, primarily from strong demand in California and Texas, which were partially offset by decreased volumes in the Midwest due to less carryover jobs year-over-year.

The acquisition of Albina during the fourth quarter of 2024 also contributed additional liquid asphalt sales volumes.

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Higher selling, general and administrative expenses of $735,000, largely due to higher payroll-related costs with the addition of Albina employees in the fourth quarter of 2024, also reduced EBITDA.

2023 Compared to 2022

Our revenue improved $53.9 million in 2023, largely driven by higher liquid asphalt sales volumes from additional sales opportunities across most of our primary markets, higher sales to other reportable segments and sales late in the year due to favorable weather conditions.

Higher liquid asphalt sales prices also positively impacted revenue.

We saw an increase in EBITDA of $49.8 million and EBITDA margin of 1,480 basis points in 2023.

This increase was primarily related to increased market pricing and higher sales volumes.

Partially offsetting these increases were higher operating costs for scheduled tank repair and maintenance costs and higher selling, general and administrative expenses, primarily $1.4 million of payroll-related costs.

Corporate Services and Eliminations

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Corporate Services had negative EBITDA of $63.9 million, or $3.2 million less EBITDA in 2025, compared to the prior year.

Corporate Services had increased selling, general and administrative expenses of $2.8 million, which was primarily due to higher due diligence and integration costs related to corporate development and completed acquisitions of $4.4 million and increased stock-based compensation expense for the management team and board of directors due to additional participants.

In addition, salaries and burden were higher for the year due to additional staff, however, these were mostly offset by lower incentive accruals.

We also had a benefit of $3.8 million primarily due to the lack of one-time costs incurred in the prior year consisting of insurance costs related to the Separation and the transition services agreement with MDU Resources.

2024 Compared to 2023

Corporate Services contributed negative EBITDA of $60.7 million, or $7.5 million less EBITDA in 2024, compared to the prior year.

Corporate Services had increased selling, general and administrative expenses of $7.0 million.

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We also incurred less one-time costs of $6.5 million primarily consisting of insurance costs related to the Separation and the transition services agreement with MDU Resources.

2023 Compared to 2022

Corporate Services contributed negative EBITDA of $53.2 million, or $24.5 million less EBITDA in 2023 than the prior year.

The decrease was due primarily to higher selling, general and administrative expenses of $31.8 million directly related to the Separation from MDU Resources.

In 2023, we experienced increased recurring costs, including payroll-related costs of $12.3 million, largely due to additional staff and stock-based compensation expense for the management team and board of directors;

professional services of $2.6 million;

fees of $1.2 million, primarily related to fees on the new debt issued in conjunction with the Separation;

and insurance costs of $400,000.

These recurring costs were offset in part by a reduction in general corporate expenses from MDU Resources of $7.6 million, as discussed in Item 8 - Note 1.

Also, as part of the Separation, we incurred one-time costs of $10.0 million primarily related to professional services, insurance costs and the transition services agreement with MDU Resources.

Further contributing to higher selling, general and administrative costs were increased payroll-related costs due to higher incentive accruals based on our performance.

Partially offsetting these increased costs were improved returns on our nonqualified benefit plan investments of $5.5 million.

Liquidity and Capital Resources

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Given the seasonality of our business, we typically experience significant fluctuations in working capital needs and balances throughout the year.

Working capital requirements generally increase in the first half of the year as we build up inventory and focus on preparing equipment and facilities and other start-up costs for our construction season.

Working capital requirements generally increase in the first half of the year as we build up inventory and focus on preparing equipment and facilities for our construction season.

Working capital levels then typically decrease as the construction season winds down and we collect on receivables.

Our 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 industry.

The ability to fund our cash needs will depend on the ongoing ability to generate cash from operations and obtain debt financing.

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.

Debt Financing Activities

The following table summarizes our outstanding debt facilities at December 31, 2025:

Facility Limit

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500.0 496.3 — 3/8/2032

On April 25, 2023, we issued $425.0 million of 7.75 percent senior notes due May 1, 2031, pursuant to an indenture.

On May 31, 2023, we entered into a senior secured credit agreement consisting of a $275.0 million term loan and a $350.0 million revolving credit facility, each with a SOFR-based interest rate and a maturity date of May 31, 2028.

425.0 425.0 — 5/1/2031

__________________

1 Outstanding letters of credit reduce the amount available under the revolving credit agreement.

In addition, in the first half of 2025 we expect to enter into a new senior secured Term Loan B facility of $500 million, increase the total commitments under our existing revolving credit facility from $350 million to $500 million and extend the maturity date of our existing senior secured credit facilities from 2028 to 2030.

On March 7, 2025, we entered into an amendment to our senior secured credit agreement to increase our revolving credit facility from $350 million to $500 million and extend the maturity to March 7, 2030, refinance our existing $275 million Term Loan A with a maturity of March 7, 2030, and provide for a new Term Loan B in an aggregate principal amount of $500.0 million with a maturity date of March 8, 2032.

Each facility has a SOFR-based interest rate.

The Term Loan A has a mandatory annual amortization of 2.50 percent for years one and two, 5.00 percent for years three and four and 7.50 percent in the fifth year.

The Term Loan B has a mandatory annual amortization of $5.0 million.

We used the proceeds from the issuance of the new Term Loan B to fund a portion of Strata's purchase price.

Separately, we increased the total commitments under our existing revolving credit facility for future expenditures.

For more information on the debt agreements and covenant restrictions, see Item 8 - Note 9.

In order to borrow under the debt instruments, we must be in compliance with the applicable covenants and certain other conditions, all of which we are in compliance at December 31, 2025.

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As of December 31, 2025, we had aggregate outstanding letters of credit issued under our revolving credit facility in the amount of $ 23.4 million.

Other than these letters of credit further discussed in Item 8 - Note 18, we do not currently have any off-balance sheet arrangements that have, or are reasonably likely to have, a material impact on current or future financial conditions, results of operations or cash flows.

Other than these letters of credit further discussed in Item 8 - Note 18, we do

not currently have any off-balance sheet arrangements that have, or are reasonably likely to have, a material impact on current or future financial conditions, results of operations or cash flows.

Capital Expenditures

We are committed to disciplined capital allocation, including reinvesting in our company to maintain fixed assets, improve operations and grow our business.

In 2024, we spent $170.5 million, compared to $124.3 million in 2023, on the replacement of depleting aggregate reserves, construction equipment, plant improvements and buildings.

In 2024, we spent $132.9 million on six acquisitions, which include aggregate, ready-mix and liquid asphalt operations, and initial greenfield projects.

Capital expenditures for 2024 and 2023 were funded by internally generated funds and borrowings under credit facilities.

For 2025, we have estimated capital expenditures for maintenance and improvement to be between $155 million and $215 million and approximately $522 million for the pending acquisition of Strata and organic growth projects.

Capital expenditures for future acquisitions and future organic growth opportunities would be incremental to our outlined capital program;

In 2025, we spent $169.5 million on the replacement of construction equipment and plant improvements.

Additionally, we spent $788.6 million on growth initiatives in 2025, which comprised of $610.0 million on acquisitions and $178.6 million on aggregate expansions 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 in 2025.

Capital expenditures for 2025 were funded by internally generated funds and debt borrowings.

For 2026, we expect capital expenditures for maintenance and improvement to be between $170 million and $235 million and approximately $130 million for organic growth projects and aggregate reserve additions.

Our capital expenditure expectations should be considered preliminary and subject to further evaluation and authorization as the year progresses.

Capital expenditures for future acquisitions and future growth opportunities would be incremental to our outlined capital program;

these opportunities are dependent upon economic and other competitive conditions.

It is anticipated that capital expenditures for 2025 will be funded by various sources, including internally generated cash and debt.

In addition to cash on hand, we intend to use a portion of the proceeds from the issuance of a new $500 million Term Loan B facility to fund the purchase of Strata.

Separately, we also intend to increase the total commitments under our existing revolving credit facility from $350 million to $500 million and extend the maturity date of our existing senior secured credit facilities from 2028 to 2030.

It is anticipated that capital expenditures for 2026 will be funded by various sources, including, but not limited to, internally generated cash and debt.

Years ended December 31, 2025 2024 2023

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Cash used by working capital components increased $74.8 million in 2025.

This increased usage of cash was primarily the result of higher working capital needs due to the acquisitions in 2025, as discussed in Business Segment Financial and Operating Data;

timing of taxes paid;

increased software maintenance and licenses;

and fluctuations in the timing of payment on accounts payable.

Cash provided by operating activities for the year ended December 31, 2024, decreased $13.4 million, largely related to higher working capital needs.

Cash used by working capital components increased $36.1 million in 2024.

This increased usage of cash was driven largely by higher accrued compensation due in part to additional employees associated with the Separation;

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In addition, stronger collections on receivable balances during 2024 and higher net income partially offset the decrease in cash.

Cash provided by operating activities for the year ended December 31, 2023, increased $128.2 million, largely related to increased earnings in 2023 and lower working capital needs.

Cash provided by working capital components totaled $20.2 million in 2023, compared to $29.0 million in 2022.

This decreased usage of cash was driven largely by lower payments on operating expenses at the end of the period and decreased liquid asphalt inventory balances, partially offset by increased accounts receivable balances at the end of the year associated with higher revenues during 2023.

In addition, the timing of insurance costs associated with the captive insurer had a positive impact on cash.

Investing activities

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$ (913.7) $ (294.8) $ (117.9)

The increase in cash used in investing activities from 2025 to 2024 was primarily due to additional investments to grow our company.

We spent $479.0 million more on acquisitions in 2025, which includes the acquisition of Strata.

We also spent $175.6 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 as part of the Strata acquisition in the Central segment as discussed in Item 8 - Note 3 and the sale of non-strategic assets in both the West and Central segments.

The increase in cash used in investing activities from 2024 to 2023 was primarily due to the completion of six acquisitions in 2024 and higher capital expenditures, including a liquid asphalt expansion project, aggregate reserve replacements and routine replacement of construction equipment.

The increase in cash usage was offset in part by additional proceeds from asset sales, largely as a result of the sale of non-strategic assets in Texas in 2024.

The decrease in cash used in investing activities from 2023 to 2022 was primarily due to a reduction in capital expenditures for the prestress facility in Washington that was completed during the third quarter of 2023, offset in part by decreased proceeds from asset sales as a result of the sale of non-strategic assets in southeast Texas in December 2022.

Financing activities

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(In millions)

Issuance of current related-party notes, net

$ — $ — $ 208.0

Issuance (repayment) of long-term related-party notes, net

Issuance of long-term related-party notes, net

$ — $ — $ 205.3

Issuance of long-term debt

500.0 — 700.0

Repayment of long-term debt

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Net transfers to Centennial

— (850.6) (55.2)

Net cash provided by (used in) financing activities

$ 477.5 $ (8.7) $ 34.4

The increase in cash flows used in financing activities from 2024 to 2023 was largely related to changes in our debt structure in 2023 as a result of the Separation, which included the issuance of senior notes, term loans, and a revolving credit facility and a transfer of the majority of the proceeds to Centennial.

The increase in cash flows provided by financing activities from 2025 to 2024 was largely related to the funding of a new Term Loan B in March of 2025.

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.

For further information, see Item 8 - Note 9.

The increase in cash flows provided by financing activities from 2023 to 2022 was largely related to the changes in debt as a result of the Separation, which included the issuance of senior notes, term loans and a revolving credit facility, and a transfer of the majority of the proceeds to Centennial.

Material Cash Requirements

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At December 31, 2025, our material cash requirements under these obligations were as follows:

Less than 1 year 1-3 years 3-5 years More than

5 years Total

Less than 1 year

(In millions)

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Our material long-term cash requirements include repayment of outstanding borrowings and interest payments on those agreements, payments on operating lease agreements, payment of obligations on purchase commitments and asset retirement obligations.

At December 31, 2024, we had total liabilities of $59.4 million related to asset retirement obligations that are excluded from the table above.

At December 31, 2025, we had total liabilities of $78.8 million related to asset

retirement obligations that are excluded from the table above.

Due to the nature of these obligations, we cannot determine precisely when the payments will be made to settle these obligations.

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For 2025, we assumed a discount rate of 5.2 percent and long-term rate of return on our qualified defined pension plan assets of 6.0 percent.

Increased discount rates for 2024 compared to 2023 resulted in actuarial gains.

Decreased discount rates for 2025 compared to 2024 resulted in actuarial losses, offset in part by higher than expected asset sale gains.

Differences between actuarial assumptions and actual plan results are deferred and amortized into expense when the accumulated differences exceed 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets.

Therefore, this change in asset values will be reflected in future expenses of the plans beginning in 2026.

The funded status of the plans did not change significantly with the gains on the assets because the liabilities decreased as well due to the increase in the discount rate.

At December 31, 2024, the pension plans’ accumulated benefit obligations exceeded the plans’ assets by approximately $345,000.

The funded status of the plans did not change significantly with the increase in assets because the liabilities increased as well due to the decrease in the discount rate.

At December 31, 2025, the pension plans’ assets exceeded the plans’ accumulated benefit obligations by approximately $53,000.

Pretax pension expense (income) reflected in the Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023, was $349,000, $289,000 and $343,000, respectively.

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We do not expect to make any pension plan contributions in 2026, as the plan is fully funded and is based on using a full yield curve.

During 2024, we contributed $2.1 million to our pension plans which was driven by additional discretionary contributions to increase the funded status of the plans.

There were no minimum required contributions for the years ended December 31, 2025 and 2023.

During 2024, we contributed $2.1 million to our pension plans which was driven by additional discretionary contributions to increase the funded status of the plans.

For more information on our pension plans, see Item 8 - Note 17.

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The recognition of revenue requires us to make estimates and assumptions that affect the reported amounts of revenue.

The accuracy of revenues reported on the audited consolidated financial statements depends on, among other things, management’s estimates of total costs to complete projects because we use the cost-to-cost measure of progress on contracting services contracts for revenue recognition.

The accuracy of revenues reported on the audited consolidated financial statements depends on, among other things,

management’s estimates of total costs to complete projects because we use the cost-to-cost measure of progress on contracting services contracts for revenue recognition.

To determine the proper revenue recognition method for contracts, we evaluate whether two or more contracts should be combined and accounted for as one single contract and whether the combined or single contract should be accounted for as more than one performance obligation.

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These include, but are not limited to, the complexities of the job, past history performing similar types of work, seasonal weather patterns, competition and market conditions, job site conditions, workforce safety, reputation of the project owner, availability of labor, materials and fuel, project location and project completion dates.

As a project commences, estimates are continually

monitored and revised as information becomes available and actual costs and conditions surrounding the job become known.

As a project commences, estimates are continually monitored and revised as information becomes available and actual costs and conditions surrounding the job become known.

If a loss is anticipated on a contract, the loss is immediately recognized.

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A combination of the market and income approaches are used for aggregate reserves and intangibles, primarily a discounted cash flow model.

Although we may engage independent third-party consultants to assist with

the valuation of aggregate reserves and intangibles, the valuations are based on significant estimates that are approved by management.

Although we may engage independent third-party consultants to assist with the valuation of aggregate reserves and intangibles, the valuations are based on significant estimates that are approved by management.

The process is highly subjective and requires a large degree of management judgement.

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Examples of such events or circumstances may include a significant adverse change in business climate, weakness in an industry in which our reporting units operate or recent significant cash or operating losses with expectations that those losses will continue.

We have determined that the reporting units for our goodwill impairment test are our operating segments as they constitute a business for which discrete financial information is available and for which segment management regularly reviews the operating results.

We have determined that the reporting units for our goodwill impairment test are our operating segments, along with the Prestress component of the West operating segment, as they constitute a business for which discrete financial information is available and for which segment management regularly reviews the operating results.

Goodwill impairment, if any, is measured by comparing the fair value of each reporting unit to its carrying value.

If the fair value of a reporting unit exceeds its carrying value, the goodwill of the reporting unit is not impaired.

If the carrying value of a reporting unit exceeds its fair value, we must record an impairment loss for the amount that the carrying value of the reporting unit, including goodwill, exceeds the fair value of the reporting unit.

carrying value of a reporting unit exceeds its fair value, we must record an impairment loss for the amount that the carrying value of the reporting unit, including goodwill, exceeds the fair value of the reporting unit.

For the years ended December 31, 2025, 2024 and 2023, there were no impairment losses recorded.

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Future results of operations may vary due to economic and financial impacts.

The long-term growth rates used in the five-year forecast are developed by management based on industry

data, management’s knowledge of the industry and management’s strategic plans.

The long-term growth rates used in the five-year forecast are developed by management based on industry data, management’s knowledge of the industry and management’s strategic plans.

The long-term growth rate used was 3 percent in 2025, 2024 and 2023.

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When indications of or triggers for impairment are noted, impairment testing is completed.

The impairment testing requires the use of significant estimates, judgements and uncertainties by management, which may vary from actual results.

Estimates and judgements may include, among other things, whether triggering events have occurred, estimates of future cash flows, the asset’s useful life, disposal activity obligations, growth and production.

The impairment testing requires the use of significant estimates, judgments and uncertainties by management, which may vary from actual results.

Estimates and judgments may include, among other things, whether triggering events have occurred, estimates of future cash flows, the asset’s useful life, disposal activity obligations, growth and production.

The determination of whether an impairment has occurred is based on an estimate of undiscounted future cash flows attributable to the assets, compared to the carrying value of the assets.

9 unchanged sentences

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 are considered non-cash and not part of our core operations.

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.

5 unchanged sentences

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 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.

12 unchanged sentences

EBITDA $ 484.3 $ 454.3 $ 422.0

Unrealized (gains) losses on benefit plan investments (2.9) (2.7) 4.0

Unrealized gains on benefit plan investments

(2.9) (2.9) (2.7)

Stock-based compensation expense 11.4 7.8 3.1

Impact of selling acquired inventory after markup to fair value as part of acquisition accounting

One-time separation costs — 3.8 10.0

Adjusted EBITDA

$ 496.5 $ 463.0 $ 432.4

Revenue $ 3,146.0 $ 2,899.0 $ 2,830.3

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis