What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-02-20 compared with 2025-02-21 · 416 added, 333 removed, 1452 unchanged (34% of the section changed)

2 unchanged sentences

The management of Knife River Corporation is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934.

The Company’s internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America.

Our internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America.

All internal control systems, no matter how well designed, have inherent limitations.

2 unchanged sentences

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may be inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025.

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013).

Based on our evaluation under the framework in Internal Control-Integrated Framework (2013), management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2024 .

The scope of our assessment of the effectiveness of our internal control over financial reporting did not include Albina Asphalt as we acquired them on November 2, 2024.

The assets acquired from Albina were 4% of consolidated assets as of December 31, 2024 and revenues were less than 1% of consolidated revenue during the year ended December 31, 2024.

We excluded Albina from the scope of our assessment in accordance with the Securities and Exchange Commission’s guidance that allows a recently acquired business to be omitted from the scope of the assessment for one year from the date of its acquisition.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2024, has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report.

Based on our evaluation under the framework in Internal Control-Integrated Framework (2013), management concluded that our internal control over financial reporting was effective as of December 31, 2025 .

The scope of our assessment of the effectiveness of our internal control over financial reporting did not include Strata Corporation as we acquired them on March 7, 2025.

The assets acquired from Strata were 13.5 percent of consolidated assets as of December 31, 2025 and revenues were 6.2 percent of consolidated revenue during the year ended December 31, 2025.

We excluded Strata from the scope of our assessment in accordance with the Securities and Exchange Commission’s guidance that allows a recently acquired business to be omitted from the scope of the assessment for one year from the date of its acquisition.

The effectiveness of our internal control over financial reporting as of December 31, 2025, has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report.

Gray /s/ Nathan W.

4 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Knife River Corporation and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheets of Knife River Corporation and subsidiaries (the “Company”) as of December 31, 2025 and December 31, 2024, the related consolidated statements of operations, comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and December 31, 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 20, 2026, expressed an unqualified opinion on the Company’s internal control over financial reporting.

10 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue from Contracts with Customers—Contracting Services Revenue—Refer to Notes 1, 2, 4 and 5 to the financial statements

22 unchanged sentences

• For certain contracts, we evaluated management’s ability to estimate total costs and profits accurately by comparing actual costs and profits to management’s historical estimates for performance obligations that have been fulfilled.

Acquisitions—Valuation of property, plant and equipment—Refer to Notes 1, 2 and 3 to the financial statements

Critical Audit Matter Description

On March 7, 2025, the Company completed the acquisition of Strata Corporation.

Accordingly, the assets acquired and liabilities assumed were measured at their acquisition date fair values, including the fair values of acquired property, plant and equipment.

The principal considerations of our determination that the valuation of Strata property, plant and equipment acquired is a critical audit matter are (i) the significant judgments made by management, including the use of management’s specialists;

(ii) a high degree of auditor judgment and an increased extent of effort in performing procedures and evaluating assumptions;

and (iii) the audit effort involved the use of valuation specialists to determine the fair value of acquired Strata property, plant and equipment.

How the Critical Audit Matter Was Addressed in the Audit

With the assistance of our fair value specialists, our audit procedures related to management’s valuation of acquired Strata property, plant and equipment included the following, among others:

• We tested the operating effectiveness of management’s controls over the valuation of acquired Strata property, plant and equipment and the review of the work of management’s third-party specialists.

• With the assistance of our fair value specialists, we selected a sample of assets and evaluated management’s valuation of the assets by comparing management’s fair value conclusions to those determined using a market approach valuation method.

• With the assistance of our fair value specialists, we evaluated management's valuation of the assets by comparing management's fair value conclusions to those determined under generally accepted valuation practices for similar assets.

/s/ Deloitte & Touche LLP

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We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2025, of the Company and our report dated February 20, 2026, expressed an unqualified opinion on those financial statements.

As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Albina Asphalt, which was acquired on November 2, 2024, and whose financial statements constitute 4% of total assets and less than 1% of revenues of the consolidated financial statement amounts as of and for the year ended December 31, 2024.

Accordingly, our audit did not include the internal control over financial reporting at Albina Asphalt.

As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Strata Corporation, which was acquired on March 7, 2025, and whose financial statements constitute 13.5 percent of total assets and 6.2 percent of revenues of the consolidated financial statement amounts as of and for the year ended December 31, 2025.

Accordingly, our audit did not include the internal control over financial reporting at Strata Corporation.

Basis for Opinion

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81,936 55,242 58,096

Other income (expense)

9,272 10,042 7,007

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Net income $ 157,074 $ 201,678 $ 182,872

Other comprehensive income:

Other comprehensive income (loss):

Reclassification adjustment for loss on derivative instruments included in net income, net of tax of $ 0 , $ 0 and $ 28 in 2025, 2024 and 2023, respectively

Pension and postretirement liability adjustment:

Pension and postretirement liability gains arising during the period, net of tax of $ 567 , $ 252 and $ 3,586 in 2024, 2023 and 2022, respectively

Pension and postretirement liability gains (losses) arising during the period, net of tax of $( 417 ), $ 567 and $ 252 in 2025, 2024 and 2023, respectively

( 1,209 ) 1,709 751

2 unchanged sentences

( 960 ) 2,017 943

Other comprehensive income

Other comprehensive income (loss)

( 960 ) 2,017 1,033

8 unchanged sentences

278,030 267,240

Costs and estimated earnings in excess of billings on uncompleted contracts

Contract assets

77,528 31,283

23 unchanged sentences

145,581 140,834

Billings in excess of costs and estimated earnings on uncompleted contracts

Contract liabilities

33,773 42,126

48 unchanged sentences

— — — — — — — — 1,033 1,033

Net transfers to Centennial

— — ( 608 ) ( 52,005 ) — — — — — ( 52,613 )

Balance at December 31, 2022 80,000 $ 800 $ 549,106 $ 494,661 ( 538,921 ) $ ( 3,626 ) — $ — $ ( 12,352 ) $ 1,028,589

— — — 182,872 — — — — — 182,872

Other comprehensive income

— — — — — — — — 1,033 1,033

Stock-based compensation — — 2,888 ( 37 ) — — — — — 2,851

12 unchanged sentences

Stock-based compensation — — 8,057 ( 6 ) — — — — — 8,051

Common stock issues for employee compensation, net of tax withholding

31,298 — ( 1,673 ) — — — — — — ( 1,673 )

Common stock issued for board of director fees 3,001 — — — — — — — — —

Balance at December 31, 2024 57,043,841 $ 570 $ 620,897 $ 867,546 — $ — ( 431,136 ) $ ( 3,626 ) $ ( 9,302 ) $ 1,476,085

— — — 157,074 — — — — — 157,074

Other comprehensive loss

— — — — — — — — ( 960 ) ( 960 )

Stock-based compensation — — 11,394 — — — — — — 11,394

Common stock issued for employee compensation, net of tax withholding 39,656 1 ( 2,654 ) — — — — — — ( 2,653 )

21 unchanged sentences

1,239 1,628 1,182

Unrealized (gains) losses on investments

Unrealized gains on investments

( 2,939 ) ( 2,918 ) ( 2,202 )

1 unchanged sentence

( 21,777 ) ( 9,215 ) ( 27 )

Equity in (loss) earnings of unconsolidated affiliates

Gain on bargain purchase ( 3,547 ) — —

Equity in unconsolidated affiliates

( 259 ) ( 279 ) ( 286 )

3 unchanged sentences

( 13,444 ) ( 44,303 ) 3,654

( 44,303 ) 3,654 ( 31,033 )

Other current assets

23 unchanged sentences

Financing activities:

Issuance of current related-party notes

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

— 205,275 ( 207,007 )

Issuance of long-term related-party notes, net

Issuance of long-term debt

500,000 — 700,000

Repayment of long-term debt

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Note 1 – Organization and Basis of Presentation

Knife River is a people-first construction materials and contracting services company.

We provide construction materials and contracting services to build safe roads, bridges and airport runways and other critical infrastructure needs that connect people with where they want to go and with the supplies they need.

At Knife River, we are a people-first construction materials and contracting services company.

We provide construction materials and contracting services to build safe roads, bridges, airport runways and other critical infrastructure needs that connect people with where they want to go and with the supplies they need.

We are one of the leading providers of crushed stone and sand and gravel in the United States and operate across 14 states.

As of December 31, 2024, we conducted our operations through five reportable segments:

Pacific, Northwest, Mountain, Central and Energy Services.

We conduct our operations through four reportable segments:

West, Mountain, Central and Energy Services.

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.

On March 7, 2025, we acquired Strata Corporation (Strata), a leading construction materials and contracting services provider in North Dakota and northwestern Minnesota.

The purchase price for Strata totaled $ 454.0 million and was subject to post-closing adjustments.

The results of operations and balance sheet accounts for Strata are included in the consolidated financial statements from the date of acquisition.

For more information, see Note 3 .

In July 2025, House Bill 1, known as the One Big Beautiful Bill Act ("OBBBA"), was enacted.

The OBBBA includes significant provisions that, among other provisions, makes 100% bonus depreciation permanent and restores the ability to expense domestic research expenditures.

The OBBBA did not have a material impact on the Company’s annual estimated income tax rate, but did result in a reclassification between current taxes payable and deferred tax liabilities.

In December 2025, we reclassified our retention receivables of $ 42.8 million on a contract-by-contract basis from accounts receivable.

The reclassification resulted in an increase to contract assets of $ 31.8 million and a decrease to contract liabilities of $ 11.0 million due to FASB’s clarification of retention receivables under ASC 606.

Prior years were not revised.

Separation from MDU Resources

On May 31, 2023, MDU Resources completed the previously announced separation of Knife River through the distribution of approximately 90 percent of the outstanding shares of common stock, par value $ .01 per share, of Knife River to the stockholders of record of MDU Resources as of the close of business on May 22, 2023.

On May 31, 2023, MDU Resources completed the separation of Knife River through the distribution of approximately 90 percent of the outstanding shares of common stock, par value $ .01 per share, of Knife River to the stockholders of record of MDU Resources as of the close of business on May 22, 2023.

MDU Resources retained approximately 10 percent of the outstanding shares of Knife River common stock.

5 unchanged sentences

For more information on the transition services agreement, see Note 19.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

Basis of Presentation

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These general corporate expenses are included in the Consolidated Statements of Operations within selling, general and administrative expenses and other income (expense).

The amounts allocated to us were $ 10.7 million and $ 18.0 million for the years ended December 31, 2023 and 2022, respectively.

The amount allocated to us was $ 10.7 million for the year ended December 31, 2023.

These expenses were allocated to us on the basis of direct usage when identifiable, with the remainder principally allocated on the basis of percent of total capital invested or other allocation methodologies that were considered to be a reasonable reflection of the utilization of the services provided to the benefits received, including the following:

9 unchanged sentences

These costs also may not be indicative of the expenses that we will incur in the future or would have incurred if we had obtained these services from a third party.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

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

10 unchanged sentences

All intercompany accounts and transactions between our businesses have been eliminated in the accompanying audited consolidated financial statements.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

Use of estimates

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environmental and other loss contingencies;

estimated total costs on contracting services contracts;

costs on contracting services contracts;

actuarially determined benefit costs;

asset retirement obligations;

lease classification;

present value of right-of-use assets and lease liabilities;

3 unchanged sentences

Consequently, operating results can be affected by revisions to prior accounting estimates.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

Note 2 – Significant Accounting Policies

3 unchanged sentences

Impact on financial statements/disclosures

Recently adopted ASU’s

ASU 2023-07 - Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued guidance on modifying the disclosure requirements to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses.

The guidance also expands the interim disclosure requirements.

The guidance is to be applied on a retrospective basis to the financial statements and footnotes and early adoption is permitted.

Adopted for the year ended December 31, 2024.

We updated our disclosures for the year ended December 31, 2024, to incorporate the required changes.

ASU 2023-09 - Improvements to Income Tax Disclosures

In December 2023, the FASB issued guidance on modifying the disclosure requirements to increase transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information.

The guidance is to be applied on a prospective basis to the financial statements and footnotes, however, retrospective adoption is also permitted.

The guidance also permits early adoption.

Adopted for the year ended December 31, 2024.

We updated our disclosures, which were not material, for the year ended December 31, 2024.

Recently issued ASU’s not yet adopted

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We are currently evaluating the impact the guidance will have on our disclosures for the year ended December 31, 2027 and interim periods for fiscal year 2028.

ASU 2025-05 - Measurement of Credit Losses for Accounts Receivable and Contract Assets In July 2025, the FASB issued guidance to provide a practical expedient for all entities related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers.

Annual reporting periods beginning after December 15, 2025 and interim reporting periods within those annual reporting periods on a prospective basis.

Early adoption is permitted and should be applied on a prospective basis.

We are currently evaluating the impact the guidance will have on our financial statements and related disclosures.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

1 unchanged sentence

Years Ended December 31, 2025, 2024 and 2023

Standard Description Standard Effective Date

Impact on financial statements/disclosures

ASU 2025-06 - Targeted Improvements to the Accounting for Internal-Use Software In September 2025, the FASB issued guidance to provide targeted improvements to the accounting for internal-use software which is intended to modernize the recognition and capitalization framework to reflect current software development practices.

Under this guidance, eligible software development costs will begin capitalization when management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended.

Annual reporting periods beginning after December 15, 2027 and interim reporting periods within those annual reporting periods.

Early adoption is permitted as of the beginning of an annual reporting period.

We are currently evaluating the impact this guidance will have on our financial statements and disclosures.

Cash, cash equivalents and restricted cash

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The excess of the purchase price over the aggregate fair value is recorded as goodwill.

We calculated the fair value of the assets acquired in 2024 using a market or cost approach (or a combination of both).

We calculated the fair value of the assets acquired in 2025 and 2024 using a market or cost approach (or a combination of both).

Fair values for some of the assets were determined based on Level 3 inputs including estimated future cash flows, discount rates, growth rates, sales projections, retention rates and terminal values, all of which required significant management judgment and are susceptible to change.

7 unchanged sentences

We focus on the vertical integration of our contracting services with our construction materials to support the aggregate-based product lines.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

We provide contracting services to a customer when a contract has been approved by both the customer and a representative of Knife River, obligating a service to be provided in exchange for the consideration identified in the contract.

9 unchanged sentences

We estimate the amount of revenue to be recognized on variable consideration using the most likely amount method, which best predicts the most likely amount of consideration we expect to be entitled to or expect to incur.

Assumptions as to the occurrence of future events and the likelihood and amount of

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

variable consideration are made during the contract performance period.

Assumptions as to the occurrence of future events and the likelihood and amount of variable consideration are made during the contract performance period.

Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on the assessment of anticipated performance and all information (historical, current and forecasted) that is reasonably available to management.

15 unchanged sentences

There are no material obligations for returns, refunds or other similar obligations.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

Receivables and allowance for expected credit losses

8 unchanged sentences

127,383 137,105

Retention receivables

32,558 36,782

Receivables, gross

8 unchanged sentences

Management has reviewed the balance reserved through the allowance for expected credit losses and believes it is reasonable.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

Details of our expected credit losses were as follows:

Pacific Northwest Mountain Central Energy Services Total

West Mountain Central Energy Services Total

(In thousands)

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$ 2,405 $ 274 $ 1,602 $ 908 $ 5,189

__________________

* Includes the impact of businesses acquired.

Inventories at December 31 consisted of:

7 unchanged sentences

$ 435,714 $ 380,336

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

Inventories are valued at the lower of cost or net realizable value using the average cost method.

12 unchanged sentences

We use proven and probable aggregate reserves as the denominator in our units-of production calculation.

Exploration costs are expensed as incurred in cost of revenue and production costs are either expensed or capitalized to inventory.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

Exploration costs are expensed as incurred in cost of revenue and production costs are capitalized to inventory.

Capitalized interest

2 unchanged sentences

When no debt is incurred specifically for a project, interest is capitalized using the weighted average cost of our outstanding borrowings.

For the year ended December 31, 2024, the amount we capitalized into net property, plant and equipment on the Consolidated Balance Sheet was immaterial.

For the years ended December 31, 2025 and 2024, the amount we capitalized into net property, plant and equipment on the Consolidated Balance Sheet was immaterial.

Impairment of long-lived assets, excluding goodwill

8 unchanged sentences

Goodwill is required to be tested for impairment annually, which we complete in the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired.

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

For more information on our operating segments, see Note 15.

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

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

information on our operating segments, see Note 15.

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

8 unchanged sentences

We measure our investment in the insurance contracts at fair value with any unrealized gains and losses recorded on the Consolidated Statements of Operations.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

Government Assistance

4 unchanged sentences

We account for unconsolidated joint ventures using either the equity method or proportionate consolidation.

As of December 31, 2024, we held an interest of 25 percent in a joint venture formed primarily for the purpose of pooling resources on construction contracts.

As of December 31, 2025, we held interests of 25 percent and 33 percent in joint ventures formed primarily for the purpose of pooling resources on construction contracts.

Proportionate consolidation is used for joint ventures that include unincorporated legal entities and activities of the joint venture which are construction-related.

For those joint ventures accounted for under proportionate consolidation, only our pro rata share of assets, liabilities, revenues and expenses are included in the Consolidated Balance Sheets and Consolidated Statements of Operations.

For those joint ventures accounted for using proportionate consolidation, we recorded in our Consolidated Statements of Operations revenue of $ 0 , $ 4.9 million, and $ 9.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Also for the years ended December 31, 2024 and 2023, we reported operating losses of $ 3,000 and $ 1.9 million, respectively, and operating income of $ 823,000 for the year ended December 31, 2022.

We had interest in assets from these joint ventures of $ 45,000 for both December 31, 2024 and 2023 and $ 912,000 as of 2022.

For those joint ventures accounted for using proportionate consolidation, we recorded in our Consolidated Statements of Operations revenue of $ 514,000 , $ 0 and $ 4.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Also for the years ended December 31, 2025, 2024 and 2023, we reported operating losses of $ 10,000 , $ 3,000 and $ 1.9 million, respectively.

We had interest in assets from these joint ventures of $ 50,000 for 2025 and $ 45,000 for both 2024 and 2023.

For joint ventures accounted for under the equity method, our investment balances for the joint ventures are included in Investments in the Consolidated Balance Sheets and our pro rata share of net income is included in Other income in the Consolidated Statements of Operations.

Our investments in equity method joint ventures were a net asset of $ 1.9 million and $ 68,000 for December 31, 2024 and 2023, respectively.

In 2024 and 2023, we recognized income from equity method joint ventures of $ 279,000 and $ 55,000 , respectively, and a loss from equity method joint ventures of $ 426,000 in 2022.

Our investments in equity method joint ventures were a net asset of $ 2.1 million, $ 1.9 million and $ 68,000 for December 31, 2025, 2024 and 2023, respectively.

In 2025, 2024 and 2023, we recognized income from equity method joint ventures of $ 199,000 , $ 279,000 and $ 55,000 , respectively.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

The recognition of leases requires us to make estimates and assumptions that affect the lease classification and the assets and liabilities recorded.

10 unchanged sentences

If the rate is unknown or cannot be determined, we use an incremental borrowing rate, which is determined by the length of the contract, asset class and our borrowing rates, as of the commencement date of the contract.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

Our wholly-owned captive insurance company, Spring Creek Insurance Company, which is subject to applicable insurance rules and regulations, insures our exposure related to workers’ compensation, general liability and automobile liability on a primary basis.

10 unchanged sentences

Upon settlement of the liability, we either settle the obligation for the recorded amount or incur a gain or loss.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

Net income per share

The calculation for basic and diluted net income per share for any period presented prior to the Separation have been retrospectively adjusted to the number of shares outstanding on May 31, 2023, the Separation and Distribution date.

For periods prior to the Separation, it is assumed that there are no dilutive equity instruments as there were no Knife River stock-based awards outstanding at the time.

Basic net income per share is computed by dividing net income by the weighted average number of shares of common stock outstanding during the applicable period.

Diluted net income per share is computed by dividing net income by the total of the weighted average number of shares of common stock outstanding during the applicable period, plus the effect of non-vested performance share awards and restricted stock units.

Weighted average common shares outstanding is comprised of issued shares of 57,043,841 less shares held in treasury of 431,136 .

Basic and diluted net income per share are calculated as follows, based on a reconciliation of the weighted-average common shares outstanding on a basic and diluted basis:

3 unchanged sentences

Weighted average common shares outstanding - basic 56,653 56,607 56,568

Effect of dilutive performance share awards and restricted stock units

Effect of dilutive performance and restricted stock units 242 237 100

Weighted average common shares outstanding - diluted 56,895 56,844 56,668

2 unchanged sentences

Net income per share - diluted $ 2.76 $ 3.55 $ 3.23

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

Stock-based compensation

14 unchanged sentences

The existing unvested stock-based awards issued through MDU Resources’ stock-based compensation plans were modified in connection with the Separation to maintain an equivalent value immediately before and after Separation.

Incremental fair value for unvested awards will be recorded over the remaining vesting periods.

Incremental fair value for unvested awards has been recorded over the remaining vesting periods.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

Knife River and its subsidiaries file consolidated federal income tax returns and combined and separate state income tax returns.

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We recognize interest and penalties accrued related to unrecognized tax benefits in income taxes.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

Note 3 – Acquisitions

In 2024, we acquired the assets of two separate aggregate providers, one in Oregon and one in South Dakota.

The acquisitions were considered asset purchases, therefore, the purchase price was allocated to the assets acquired based on their respective fair values and no goodwill was recognized.

The aggregate purchase price for these transactions was $ 10.3 million.

In 2024, we completed four acquisitions which were accounted for as business combinations under ASC 805 - Business Combinations .

The business combinations included operations that expanded our aggregates, ready-mix and liquid asphalt operations in our current geographic locations.

The aggregate purchase price for these acquisitions totaled $ 120.7 million, subject to future post-closing adjustments.

The results of these acquisitions have been included in our audited consolidated financial statements beginning on the acquisition dates.

Pro forma financial amounts reflecting the effects of the business combinations are not presented, as none of these business combinations, individually or in the aggregate, were material to our financial position or results of operations.

The estimated fair value of the assets acquired and liabilities assumed are preliminary, as we continue to gather information to finalize the valuation of these assets and liabilities.

The fair values are considered provisional until final fair values are determined, or the measurement period has passed.

We expect to record adjustments as we accumulate the information needed to estimate the fair value of assets acquired and liabilities assumed, including working capital balances, estimated fair value of identifiable intangible assets, property, plant and equipment, total consideration and goodwill.

We engaged a third-party valuation firm to assist us in the analysis of the fair value of Albina Asphalt.

Note 3 – Acquisitions and Dispositions

The following acquisitions were accounted for as business combinations in accordance with ASC 805 - Business Combinations .

The results of the business combinations have been included in the Company's Consolidated Financial Statements beginning on the acquisition dates.

Acquisitions are also subject to customary adjustments based on, among other things, the amount of cash, debt and working capital in the business as of the closing date.

The amounts included in the Consolidated Balance Sheets for these adjustments are considered provisional until final settlement has occurred.

Strata Corporation

On March 7, 2025, we completed the acquisition of Strata Corporation, a leading construction materials and contracting services provider in North Dakota and northwestern Minnesota.

The purchase of Strata includes operations that expand our aggregates, ready-mix and asphalt operations, as well as our trucking fleet, locomotives and railcars, in our current geographic locations.

The purchase price for Strata totaled $ 454.0 million and was subject to post-closing adjustments.

The results of Strata are included in our Central segment.

The estimated fair value of the assets acquired and liabilities assumed were final as of December 31, 2025.

Post closing, we continued to gather information to finalize the valuation of these assets and liabilities.

The fair values were considered provisional until final fair values were determined during the measurement period.

We recorded adjustments to the estimated fair value of assets acquired and liabilities assumed, including working capital balances, estimated fair value of identifiable intangible assets, property, plant and equipment, total consideration and goodwill.

We utilized market and cost approaches to estimate the fair value of the property, plant and equipment, excluding aggregate reserves.

The fair value of aggregate reserves and intangible assets were determined using the income approach.

All estimates, key assumptions, and forecasts were either provided by or reviewed by management.

While we chose to utilize a third-party valuation firm, the fair value analysis and related valuations represent the conclusions of management and not the conclusions or statements of any third party.

The excess of the total purchase price over the fair value of assets acquired and liabilities assumed was allocated to goodwill.

We believe that the goodwill relates to several factors, including potential synergies related to market opportunities for multiple product offerings and economies of scale expected from combining our operations with the businesses acquired.

See Note 7 for further information on the amount of goodwill recognized in each segment and the amortization periods of the intangible assets identified.

The final fair value of the net assets acquired may result in adjustments to the assets and liabilities, including goodwill, and will be made as soon as practical, but no later than one year from the respective acquisition dates.

However, any subsequent measurement period adjustments are not expected to have a material impact on our results of operations.

We engaged third-party valuation firms to assist in the analysis and valuation of the assets of Strata.

While we chose to utilize third-party valuation firms, the fair value analysis and related valuations represent the conclusions of management and not the conclusions or statements of any third party.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

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Years Ended December 31, 2025, 2024 and 2023

The preliminary allocation of the aggregate purchase price for these individually immaterial acquisitions during 2024 is as follows:

2024 Acquisitions

The excess of the total purchase price over the fair value of assets acquired and liabilities assumed was allocated to goodwill.

The final allocation of the aggregate purchase price for Strata is as follows, which has been updated as of December 31, 2025, to include measurement period adjustments for updated fair values of certain assets, working capital adjustments and reclassification of assets held for sale to property, plant and equipment.

As of March 7, 2025

Measurement Period Adjustment

As of December 31, 2025

(In thousands)

Current assets:

Cash and cash equivalents

$ 7,906 $ 732 $ 8,638

Receivables, net

Other current assets

3,751 1,005 4,756

Contract assets

9,013 196 9,209

36,355 ( 277 ) 36,078

Assets held for sale

21,093 ( 2,726 ) 18,367

Prepayments and other current assets

4,850 477 5,327

Total current assets

Property, plant and equipment

82,968 ( 593 ) 82,375

Noncurrent assets:

Property, plant and equipment

266,370 8,201 274,571

152,329 ( 5,368 ) 146,961

Other intangible assets

Total deferred charges and other assets

13,600 ( 700 ) 12,900

Operating lease right-of-use assets

Total noncurrent assets

432,352 2,133 434,485

Total assets acquired

$ 515,320 $ 1,540 $ 516,860

Current liabilities:

Accounts payable

$ 3,312 $ 202 $ 3,514

Contract liabilities

921 ( 324 ) 597

Current operating lease liabilities

Other accrued liabilities

21,378 ( 8,145 ) 13,233

Total current liabilities

25,640 ( 8,267 ) 17,373

Noncurrent liabilities:

Noncurrent operating lease liabilities

Deferred income taxes

45,092 5,193 50,285

Other noncurrent liabilities

3,293 898 4,191

Total noncurrent liabilities

48,385 6,091 54,476

Total liabilities assumed

$ 74,025 $ ( 2,176 ) $ 71,849

Total consideration (fair value)

For the year ended December 31, 2024, we incurred acquisition costs of $ 7.7 million.

These costs are included in selling, general and administrative expenses on the Consolidated Statement of Operations.

$ 441,295 $ 3,716 $ 445,011

Intangible assets for Strata, as of the date of acquisition, included $ 8.8 million for customer backlog with an amortization period of 9 months and $ 4.1 million for permits with an amortization period of 10 years upon commencement of operations.

Revenue attributable to Strata included in our Consolidated Statements of Operations for the year ended December 31, 2025 was $ 198.7 million and net income was not meaningful.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

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Years Ended December 31, 2025, 2024 and 2023

Other Acquisitions

During 2025, we completed the following acquisitions:

• A Washington aggregate quarry operation in the West segment which included a bargain purchase gain of $ 3.5 million, net of deferred taxes of $ 1.3 million, and was recorded in other income on the Consolidated Statement of Operations.

We reviewed the fair values of the assets acquired and liabilities assumed and determined that the purchase would result in a gain being recognized at the time of the acquisition.

We believe the bargain purchase gain was primarily the result of the sellers’ desire to exit quickly due to cash flow constraints which were limiting their ability to operate the business efficiently.

In the fourth quarter of 2025, we finalized the purchase accounting and no material adjustments were made.

• An Oregon aggregates and contracting company in the West segment which included a $ 5.4 million holdback liability.

The fair value of the assets acquired and liabilities assumed are still provisional.

• A central Minnesota aggregates and contracting services business in the Central segment.

The fair value of the assets acquired and liabilities assumed are still provisional.

• A Texas aggregates and ready-mix concrete supplier in the Central segment.

The fair value of the assets acquired and liabilities assumed are still provisional.

The aggregated purchase consideration of these four acquisitions was $ 177.2 million.

These acquisitions were not considered material separately or in the aggregate.

The acquisitions resulted in the recognition of $ 22.1 million of current assets;

$ 98.7 million of assets in property, plant and equipment;

$ 3.1 million of operating lease right-of-use assets;

$ 75.6 million of goodwill;

$ 5.2 million of intangible assets, which included $ 100,000 of non-compete agreements, $ 1.1 million of backlog and $ 4.0 million of customer relationships;

$ 13.4 million of current liabilities;

$ 1.3 million deferred income tax liability and $ 9.3 million of noncurrent liabilities - other.

During 2024, we completed four acquisitions with an aggregated purchase consideration of $ 119.0 million.

These acquisitions were not considered material separately or in the aggregate.

The acquisitions resulted in the recognition of $ 28.9 million of current assets;

$ 51.5 million of assets in property, plant and equipment;

$ 22.7 million of goodwill;

$ 21.1 million of intangible assets;

$ 1.9 million of other noncurrent assets;

$ 5.6 million of current liabilities;

and $ 1.5 million of noncurrent liabilities - other.

The purchase accounting for these acquisitions was completed in 2025 and no material adjustments were recorded.

For the years ended December 31, 2025 and 2024, we incurred acquisition-related costs on completed and other potential acquisitions of $ 10.8 million and $ 7.7 million, respectively.

These costs are included in our Corporate Services in selling, general and administrative expenses on the Consolidated Statement of Operations.

On March 7, 2025, we sold four ready-mix plant operations for total proceeds of $ 14.5 million.

The ready-mix plant operations were acquired by us as part of the Strata acquisition and subsequently sold to an unrelated third-party.

The ready-mix plants were included in assets held for sale on the opening balance sheet for Strata at the time of the acquisition.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

Note 4 – Revenue from Contracts with Customers

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Due to consolidation requirements, the internal sales revenues must be eliminated against the construction materials product used in the contracting services to arrive at the external operating revenues.

Year ended December 31, 2024 Pacific Northwest Mountain Central Energy Services Corporate Services Total

(In thousands)

Year ended December 31, 2025 West Mountain Central Energy Services Corporate Services Total

$ 296,260 $ 95,220 $ 225,646 $ — $ — $ 617,126

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$ 1,208,713 $ 643,842 $ 1,004,554 $ 288,279 $ 624 $ 3,146,012

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

Year ended December 31, 2023 Pacific Northwest Mountain Central Energy Services Corporate Services Total

(In thousands)

Year ended December 31, 2024 West Mountain Central Energy Services Corporate Services Total

$ 297,173 $ 101,810 $ 157,165 $ — $ — $ 556,148

11 unchanged sentences

$ 1,182,959 $ 662,892 $ 817,872 $ 234,652 $ 630 $ 2,899,005

Year ended December 31, 2022 Pacific Northwest Mountain Central Energy Services Corporate Services Total

(In thousands)

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

Year ended December 31, 2023 West Mountain Central Energy Services Corporate Services Total

$ 294,672 $ 100,505 $ 152,691 $ — $ — $ 547,868

11 unchanged sentences

$ 1,125,843 $ 633,617 $ 824,908 $ 245,186 $ 796 $ 2,830,350

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

Note 5 – Uncompleted Contracts

9 unchanged sentences

( 1,789,168 ) ( 1,533,880 )

Net contract liability

Net contract asset (liability)

$ 43,755 $ ( 10,843 )

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Such amounts are included in the accompanying Consolidated Balance Sheets at December 31 under the following captions:

2024 2023 Change Location on Consolidated Balance Sheet

2025 2024 Change

(In thousands)

Contract assets $ 31,283 $ 27,293 $ 3,990 Costs and estimated earnings in excess of billings on uncompleted contracts

Contract liabilities ( 42,126 ) ( 51,376 ) 9,250 Billings in excess of costs and estimated earnings on uncompleted contracts

Net contract liabilities $ ( 10,843 ) $ ( 24,083 ) $ 13,240

2023 2022 Change Location on Consolidated Balance Sheet

Contract assets 1

$ 77,528 $ 31,283 $ 46,245

Contract liabilities 1

( 33,773 ) ( 42,126 ) 8,353

Net contract asset (liability)

$ 43,755 $ ( 10,843 ) $ 54,598

1 Following the issuance of the FASB Staff Educational Paper on Topic 606:

Presentation and Disclosure of Retainage for Construction Contractors, we have reclassed retention receivables on a contract-by-contract basis from accounts receivable to contract assets and liabilities.

The change in presentation was on a prospective basis beginning with balances as of December 31, 2025.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

(In thousands)

Contract assets $ 27,293 $ 31,145 $ ( 3,852 ) Costs and estimated earnings in excess of billings on uncompleted contracts

Contract liabilities ( 51,376 ) ( 39,843 ) ( 11,533 ) Billings in excess of costs and estimated earnings on uncompleted contracts

Net contract liabilities $ ( 24,083 ) $ ( 8,698 ) $ ( 15,385 )

Contract assets $ 31,283 $ 27,293 $ 3,990

Contract liabilities ( 42,126 ) ( 51,376 ) 9,250

Net contract asset (liability)

$ ( 10,843 ) $ ( 24,083 ) $ 13,240

We recognized $ 41.2 million and $ 50.6 million in revenue for the years ended December 31, 2025 and 2024, respectively, which was previously included in contract liabilities at December 31, 2024 and 2023, respectively.

3 unchanged sentences

These unrecognized revenues can include:

projects that have a written award, a letter of intent, a notice to proceed, an agreed upon work order to perform work on mutually accepted terms and

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

conditions and change orders or claims to the extent management believes additional contract revenues will be earned and are deemed probable of collection.

projects that have a written award, a letter of intent, a notice to proceed, an agreed upon work order to perform work on mutually accepted terms and conditions and change orders or claims to the extent management believes additional contract revenues will be earned and are deemed probable of collection.

The majority of our contracts for contracting services have an original duration of less than one year.

At December 31, 2024, our remaining performance obligations were $ 745.6 million.

At December 31, 2025, our remaining performance obligations were $ 1.0 billion.

We expect to recognize the following revenue amounts in future periods related to these remaining performance obligations:

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Total depreciation and depletion expense was $ 175.5 million, $ 132.2 million and $ 119.2 million for the years ended December 31, 2025, 2024 and 2023, respectively.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

Note 7 – Goodwill and Other Intangible Assets

2 unchanged sentences

During the Year Measurement Period

Adjustments Reallocation of Goodwill

Balance at December 31, 2024

Adjustments Balance at December 31, 2025

(In thousands)

Pacific $ 32,621 $ 75 $ — $ — $ 32,696

Northwest 90,978 — — — 90,978

West $ 123,674 $ 11,904 $ 1,997 $ 137,575

Mountain 26,816 — — 26,816

North Central

75,879 735 — — 76,614

38,708 — — — 38,708

Central 115,322 212,962 ( 4,381 ) 323,903

Energy Services 31,413 — ( 39 ) 31,374

$ 297,225 $ 224,866 $ ( 2,423 ) $ 519,668

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

Balance at January 1, 2024 Goodwill Acquired

1 unchanged sentence

Measurement Period

Reallocation of Goodwill Balance at December 31, 2023

Balance at December 31, 2024

(In thousands)

Pacific $ 38,339 $ — $ ( 62 ) $ ( 5,656 ) $ 32,621

Northwest 90,978 — — — 90,978

West $ 123,599 $ 75 $ — $ 123,674

Mountain 26,816 — — 26,816

North Central

75,879 — — — 75,879

38,708 — — — 38,708

Central 114,587 735 — 115,322

Energy Services 9,476 21,937 — 31,413

$ 274,478 $ 22,747 $ — $ 297,225

In the fourth quarter of 2023, in connection with the reorganization of our reporting structure, a portion of the Pacific reporting unit’s businesses were reorganized into the Energy Services reporting unit.

As a result of the reorganization, we reallocated $ 5.7 million of the goodwill balance associated with the Pacific reporting unit to the Energy Services reporting unit based on the relative fair values of the Pacific reporting unit components.

The estimated fair values were determined using the income approach.

We reassessed the goodwill in connection with the reorganization and determined there was no impairment.

Other amortizable intangible assets at December 31, were as follows:

4 unchanged sentences

Less accumulated amortization

15,789 11,060

18,910 19,643

Noncompete agreements

Less accumulated amortization

9 7,470 7,470

Less accumulated amortization

Backlog 1 - 2

Less accumulated amortization 9,052 22

Less accumulated amortization

$ 32,680 $ 29,414

The previous tables include goodwill and intangible assets associated with the business combinations completed during 2024.

For our acquisitions in 2024, the weighted average useful life for customer relationships was ten years , noncompete agreements was three years , tradename was ten years and other intangible assets was 11 years.

For more information related to these business combinations, see Note 3.

Amortization expense for amortizable intangible assets for the years ended December 31, 2024, 2023 and 2022, was $ 2.5 million, $ 2.6 million and $ 2.8 million, respectively.

Estimated amortization expense for identifiable intangible assets as of December 31, 2024, was:

The previous tables include goodwill and intangible assets associated with the business combinations completed during 2025 and 2024.

For acquisitions in 2025, the weighted average useful life for customer relationships was two years and other intangible assets was four years .

For acquisitions in 2024, the weighted average useful life for

KNIFE RIVER CORPORATION AND SUBSIDIARIES

1 unchanged sentence

Years Ended December 31, 2025, 2024 and 2023

customer relationships was ten years , noncompete agreements was three years , tradename was ten years and other intangible assets was 11 years.

For more information related to these business combinations, see Note 3.

Amortization expense for amortizable intangible assets for the years ended December 31, 2025, 2024 and 2023, was $ 14.8 million, $ 2.5 million and $ 2.6 million, respectively.

Estimated amortization expense for identifiable intangible assets as of December 31, 2025, was:

2026 2027 2028 2029 2030 Thereafter

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These investments, which totaled $ 34.0 million and $ 28.4 million as of December 31, 2025 and 2024, respectively, are classified as investments on the Consolidated Balance Sheets.

The net unrealized gains on these investments for the years ended December 31, 2024 and 2023, were $ 2.9 million and $ 1.9 million, respectively.

The net unrealized losses on these investments for the year ended December 31, 2022, were $ 2.8 million.

The net unrealized gains on these investments for the years ended December 31, 2025, 2024, and 2023 were $ 2.9 million, $ 2.9 million, and $ 1.9 million, respectively.

The change in fair value, which is considered part of the cost of the plan, is classified in other income on the Consolidated Statements of Operations.

46 unchanged sentences

We review the carrying value of our long-lived assets, excluding goodwill, whenever events or changes in circumstances indicate that such carrying amounts may not be recoverable.

The assets and liabilities of the acquisitions that occurred during 2024 were calculated using a market or cost approach.

The assets and liabilities of the acquisitions that occurred during 2025 and 2024 were calculated using a market or cost approach.

The fair value of some of the assets was determined based on Level 3 inputs including estimated future cash flows, discount rates, growth rates and sales projections, all of which require significant management judgment.

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

In the event we do not comply with the applicable covenants and other conditions, we would be in default on our agreements and alternative sources of funding may need to be pursued.

In the event we do not comply with the applicable covenants and other conditions, alternative sources of funding may need to be pursued.

Long-term Debt Outstanding Long-term debt outstanding was as follows:

Weighted Average Interest Rate at December 31, 2024

December 31, 2024 December 31, 2023

Weighted Average Interest Rate at December 31, 2025 December 31, 2025 December 31, 2024

(In thousands)

Term loan agreement due on May 31, 2028

Term loan A agreement due on March 7, 2030

5.42 % $ 259,725 $ 264,688

Term loan B agreement due on March 8, 2032

5.74 % 496,250 —

Senior notes due on May 1, 2031

6 unchanged sentences

Less current maturities

11,708 10,475

Net long-term debt

$ 1,153,830 $ 666,911

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

Term Loan and Revolving Credit Facility

On May 31, 2023, we entered into a five-year secured credit agreement, which provides for a $ 275.0 million term loan and a $ 350.0 million revolving credit facility.

As of December 31, 2024, we had no borrowings outstanding under the revolving credit facility and had a borrowing capacity of $ 329.4 million under the revolving credit facility, which is net of $ 20.6 million of outstanding letters of credit.

The secured credit agreement bears interest equal to, at our option, either (i) a base rate determined by reference to the highest of (a) the prime rate, (b) the federal funds rate plus 0.50 percent, and (c) SOFR plus 1.10 percent, plus an applicable margin of 0.75 percent to 1.50 percent, based upon our leverage ratio, for base rate loans or (ii) a SOFR rate determined by the interest period relevant to such borrowing plus an applicable margin of 1.75 percent to 2.50 percent, based upon our leverage ratio.

We will incur a quarterly commitment fee on the undrawn portion of the revolving credit facility of 0.25 percent to 0.50 percent, based on our leverage ratio.

The term loan 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 agreement contains customary covenants and provisions, including a covenant of us not to permit, at any time, the ratio of total debt to trailing twelve month Adjusted EBITDA, as defined by the agreement, to be greater than 4.75 to 1.00.

The agreement also contains an interest coverage ratio covenant stating that our trailing twelve month Adjusted EBITDA, as defined by the agreement, to interest expense is to be no less than 2.25 to 1.00.

On March 7, 2025, we entered into an amendment to the senior secured credit agreement to, among other things, increase our revolving credit facility from $ 350.0 million to $ 500.0 million and extend the maturity to March 7, 2030, refinance the existing $ 275.0 million Term Loan A to extend the maturity to March 7, 2030, and provide for a new Term Loan B in an aggregate principal amount of $ 500.0 million with a maturity of March 8, 2032.

The Term Loan B was funded on March 7, 2025.

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.

The agreement contains customary covenants and provisions, including a covenant of Knife River not to permit, at any time, the ratio of total debt to trailing-twelve-month EBITDA to be greater than 4.75 to 1.00.

The covenants also include restrictions on the sale of certain assets, loans and investments.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

Schedule of Debt Maturities Long-term debt maturities, which excludes unamortized debt issuance costs, for the five years and thereafter following December 31, 2024, were as follows:

Schedule of Debt Maturities Long-term debt maturities, which excludes unamortized debt issuance costs, at December 31, 2025, were as follows:

2026 2027 2028 2029 2030 Thereafter

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We determine if an arrangement contains a lease at inception of a contract and account for all leases in accordance with ASC 842 - Leases .

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

Lessee accounting

17 unchanged sentences

$ 18,568 $ 18,844

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

The reconciliation of future undiscounted cash flows to operating lease liabilities presented on the Consolidated Balance Sheet at December 31, 2025, was as follows (in thousands):

3 unchanged sentences

Total operating lease liabilities $ 52,589

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

Note 11 – Asset Retirement Obligations

21 unchanged sentences

The amounts presented for the periods prior to the Separation are not necessarily indicative of future awards and do not necessarily reflect the costs that we would have incurred as an independent company.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

Periods Post Separation

1 unchanged sentence

The conversion of the stock and the fair value of the awards was determined using the policies described in Note 2.

As a result of the award modification, we will incur $ 185,000 of incremental stock-based compensation expense.

Of this amount, $ 53,000 and $ 88,000 was recognized during the years ended December 31, 2024 and 2023, respectively, and approximately $ 44,000 will be recognized in 2025.

As a result of the award modification, we incurred $ 185,000 of incremental stock-based compensation expense, recognizing $ 44,000 , $ 53,000 , and $ 88,000 during the years ended December 31, 2025, 2024 and 2023, respectively.

There was no incremental compensation expense incurred related to the performance share awards.

Effective June 1, 2023, we established a stock-based compensation plan under which we are currently authorized to grant 2.5 million restricted stock units and other stock awards.

Under our stock-based compensation plan, we have both restricted stock units and performance stock units.

The performance stock units are tied to either a company specific performance metric or total stockholder return of the company as compared to its peers.

Additional information on the stock units follows.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

As of December 31, 2025, there were 2.2 million shares available to grant under this plan.

Shares are either purchased on the open market or new shares of common stock are issued to satisfy the vesting of stock-based awards.

Restricted Stock Units

During the year ended December 31, 2025, we granted 53,726 restricted stock units to certain executive officers, employees and members of our board of directors.

The restricted stock units generally vest over three years , contingent on continued employment for employees, and over one year for our board of directors.

We use the straight-line amortization method to recognize compensation expense related to restricted stock units, which only has a service condition.

The fair value of all restricted stock units is based on the market value of our stock on the date of grant.

The weighted average grant-date fair value per share for the restricted stock units granted in 2025, 2024 and 2023 was $ 94.06 , $ 73.02 and $ 39.57 , respectively.

The total fair value of restricted stock units that vested during the years ended December 31, 2025, 2024 and 2023, was $ 7.2 million, $ 2.5 million and $ 2.0 million, respectively.

Performance Stock Units

During the year ended December 31, 2025, we granted 76,658 performance stock units to certain executive officers and employees.

The performance stock units vest over three years , contingent on continued employment for employees, and are tied to either a market condition or performance metric.

We recognize compensation expense related to performance stock units with performance-based metrics on a straight-line basis over the requisite service period.

Under the performance metric for these performance stock units, participants may earn from zero to 200 percent of the apportioned target grant of shares.

The performance metric is based on adjusted EBITDA margin growth.

The weighted average grant-date fair value per share granted in 2025 and 2024 was $ 93.24 and $ 72.14 , respectively.

Under the market condition for these performance stock units, participants may earn from zero to 200 percent of the apportioned target grant of performance stock units based on our total stockholder return relative to that of the selected peer group.

Compensation expense was based on the grant-date fair value as determined by Monte Carlo simulation.

The blended volatility term structure ranges are comprised of 50 percent historical volatility and 50 percent implied volatility.

Risk-free interest rates were based on U.S.

Treasury security rates in effect as of the grant date.

Assumptions used for grants applicable to the market condition for shares granted were:

Weighted average grant date fair value

$ 130.59 $ 99.83

Weighted average volatility

43.86 % 37.83 %

Weighted average risk-free interest rate

4.01 % 4.62 %

Consolidated Stock-Based Compensation

The following table summarizes stock-based compensation expense recorded in selling, general and administrative expense on the Consolidated Statements of Operations:

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

Years ended December 31,

2 unchanged sentences

$ 5,715 $ 4,384 $ 2,921

Performance share awards

Performance stock units

5,679 2,915 —

Tax benefit associated with stock-based compensation 2,780 2,933 1,219

As of December 31, 2025, total remaining unrecognized compensation expense related to stock-based compensation was approximately $ 13.0 million (before income taxes), which will be amortized over a weighted average period of 1.6 years.

For the year ended December 31, 2024, the following summarizes the activity of the performance share awards and restricted stock units.

Performance Share Awards

For the year ended December 31, 2025, the following summarizes the activity of the performance stock units and restricted stock units.

Performance Stock Units

Restricted Stock Units

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178,346 $ 97.13 108,283 $ 82.79

Restricted Stock Units

During the year ended December 31, 2024, we granted 68,859 restricted stock units to certain executive officers, employees and members of our board of directors.

The restricted stock units generally vest over three years , contingent on continued employment for employees, and over one year for our board of directors.

We use the straight-line amortization method to recognize compensation expense related to restricted stock units, which only has a service condition.

The fair value of all restricted stock units is based on the market value of our stock on the date of grant.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

The weighted average grant-date fair value per share for the restricted stock units granted in 2024 and 2023 was $ 73.02 and $ 39.57 , respectively.

The total fair value of restricted stock units that vested during the years ended December 31, 2024 and 2023, was $ 2.5 million and $ 2.0 million, respectively.

Performance Share Awards

During the year ended December 31, 2024, we granted 101,688 performance share awards to certain executive officers and employees.

The performance share awards vest over three years , contingent on continued employment for employees, and are tied to either a market condition or performance metric.

We recognize compensation expense related to performance share awards with performance-based metrics on a straight-line basis over the requisite service period.

Under the performance metric for these performance share awards, participants may earn from zero to 200 percent of the apportioned target grant of shares.

The performance metric is based on adjusted EBITDA margin growth.

The weighted average grant-date fair value per share granted in 2024 was $ 72.14 .

Under the market condition for these performance share awards, participants may earn from zero to 200 percent of the apportioned target grant of performance share awards based on our total stockholder return relative to that of the selected peer group.

Compensation expense was based on the grant-date fair value as determined by Monte Carlo simulation.

The blended volatility term structure ranges are comprised of 50 percent historical volatility and 50 percent implied volatility.

Risk-free interest rates were based on U.S.

Treasury security rates in effect as of the grant date.

Assumptions used for grants applicable to the market condition for shares granted in 2024 were:

Weighted average grant date fair value

Blended volatility range

35.84 % - 39.82 %

Risk-free interest rate range

4.62 % - 5.30 %

Note 13 – Accumulated Other Comprehensive Loss

8 unchanged sentences

Other comprehensive income before reclassifications

— 1,709 1,709

Amounts reclassified from accumulated other comprehensive loss

Net current-period other comprehensive income

— 2,017 2,017

At December 31, 2024

— ( 9,302 ) ( 9,302 )

Other comprehensive income before reclassifications

Other comprehensive loss before reclassifications

— ( 1,209 ) ( 1,209 )

Amounts reclassified from accumulated other comprehensive loss

Net current-period other comprehensive income

Net current-period other comprehensive loss

— ( 960 ) ( 960 )

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— — 28 Income taxes

— ( 90 ) ( 328 )

Amortization of postretirement liability losses included in net periodic benefit cost

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Note 15 – Business Segment Data

We focus on the vertical integration of our products and services by offering customers a single-source for construction materials and related contracting services.

We operate in 14 states across the United States.

Our operating segments include:

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

The operating segments are used to determine our reportable segments and are based on our method of internal reporting and management of the business.

As of December 31, 2024, our reportable segments were:

Pacific, Northwest, Mountain, Central and Energy Services.

Our reportable segments are aligned by key geographic areas due to the production of construction materials and related contracting services and one of which is based on product line.

Each segment is led by a segment manager that reports to our chief operating officer.

The chief executive officer and the chief operating officer are considered our chief operating decision maker.

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.

Three of our reportable segments are aligned by key geographic areas due to the production of construction materials and related contracting services and one is based on product line.

Each segment is led by a segment manager who reports to our chief operating officer, who is also our chief operating decision maker, along with the chief executive officer.

Our chief operating decision maker uses EBITDA to evaluate the performance of the segments, perform analytical comparisons to budget and uses historical and projected EBITDA to allocate resources, including capital allocations.

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produces and sells asphalt;

and produces and sells ready-mix concrete as well as vertically integrating our contracting services to support the aggregate based product lines including heavy-civil construction, asphalt and concrete paving, and site development and grading.

and produces and sells ready-mix concrete as well as vertically integrating its contracting services to support the aggregate-based product lines including heavy-civil construction, asphalt and concrete paving, and site development and grading.

Although not common to all locations, the geographic segments also sell cement, merchandise and other building materials and related services.

Corporate Services represents the unallocated costs of certain corporate functions, such as accounting, legal, treasury, information technology, human resources;

and other corporate expenses that support the operating segments and is excluded from our segment results.

Corporate Services represents the unallocated costs of certain corporate functions, such as accounting, legal, treasury, business development, information technology, human resources and other corporate expenses that support the operating segments.

Corporate Services also includes an immaterial amount of external revenue from the Knife River Training Center.

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The accounting policies applicable to each segment are consistent with those used in the audited consolidated financial statements.

The information below follows the same accounting policies as described in Note 2.

Information on our segments as of December 31, and for the years then ended was as follows:

KNIFE RIVER CORPORATION AND SUBSIDIARIES

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Years Ended December 31, 2025, 2024 and 2023

The information below follows the same accounting policies as described in Note 2.

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

Information on our segments as of December 31, and for the years then ended was as follows:

For the year ended December 31, 2025

Pacific Northwest Mountain Central Energy Services Total

(In thousands)

West Mountain Central Energy Services Total

Revenues from external customers $ 1,208,713 $ 643,842 $ 1,004,554 $ 288,279 $ 3,145,388

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Year ended December 31, 2024

Pacific Northwest Mountain Central Energy Services Total

(In thousands)

West Mountain Central Energy Services Total

Revenues from external customers

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Year ended December 31, 2023

Pacific Northwest Mountain Central Energy Services Total

(In thousands)

West Mountain Central Energy Services Total

Revenues from external customers $ 1,125,843 $ 633,617 $ 824,908 $ 245,186 $ 2,829,554

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Capitalized inventory overheads 9,951 8,359

Net operating loss/credit carryforward 5,528 10,811

Net operating loss

Section 174 costs

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Net deferred income tax liability $ ( 287,917 ) $ ( 174,727 )

As of December 31, 2024 and 2023, we had various state income tax net operating loss carryforwards of $ 98.6 million and $ 133.6 million, respectively, and federal and state income tax credit carryforwards, excluding alternative minimum tax credit carryforwards, of $ 591,000 for 2023.

The state income tax net operating loss

As of December 31, 2025 and 2024, we had various state income tax net operating loss carryforwards of $ 62.5 million and $ 98.6 million, respectively.

The state income tax net operating loss carryforwards are due to

KNIFE RIVER CORPORATION AND SUBSIDIARIES

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Years Ended December 31, 2025, 2024 and 2023

carryforwards are due to expire between 2025 and 2044.

expire between 2026 and 2044.

Changes in tax regulations or assumptions regarding current and future taxable income could require additional valuation allowances in the future.

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Change in net deferred income tax liability from the preceding table $ 113,190 $ 185

Deferred taxes established due to acquisition

Deferred taxes associated with other comprehensive loss 332 ( 670 )

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__________________

* State taxes in Oregon, Minnesota and California constitute the majority (greater than 50%) in this category.

The following table provides cash taxes paid for the year end December 31, 2024:

* State taxes in Oregon and California for 2025;

and Oregon, Minnesota, and California for 2024 and 2023 constitute the majority (greater than 50%) of the tax effect within this category.

The following table provides cash taxes paid (net of refunds) for the year end December 31 were as follows:

Jurisdiction 2025 2024

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Federal $ 26,500 $ 40,736

Minnesota 4,396

Oregon 6,350 7,229

Other States/Cities 7,615 9,820

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With few exceptions, as of December 31, 2025, we are no longer subject to state and local income tax examinations by tax authorities for years ending prior to 2022.

Total reserves for uncertain tax positions were not material.

We recognize interest and penalties accrued relative to unrecognized tax benefits in income tax expense.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

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Years Ended December 31, 2025, 2024 and 2023

Total reserves for uncertain tax positions were not material.

We recognize interest and penalties accrued relative to unrecognized tax benefits in income tax expense.

Note 17 – Employee Benefit Plans

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30,380 30,375 — —

Funded status - under

Funded status - over (under)

$ 53 $ ( 345 ) $ ( 16,222 ) $ ( 14,055 )

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Employer contributions and benefits paid in the preceding table include only those amounts contributed directly to, or paid directly from, plan assets.

In 2024, the actuarial gains recognized in the pension and postretirement benefit obligations was primarily the result of an increase in the discount rate.

In 2023, the actuarial loss recognized in the pension benefit obligation was largely the combination of losses resulting from decreased discount rates, offset in part by higher asset gains.

The actuarial gain recognized in the other postretirement benefit obligation was largely the combinations of gains due to a decrease in expected claims, offset in part by losses resulting from decreased discount rates.

In 2025, the actuarial losses recognized in the pension and other postretirement benefit obligations was largely the combination of losses resulting from decreased discount rates, offset in part by higher asset gains.

In 2024, the actuarial gains recognized in the pension and other postretirement benefit obligations was primarily the result of an increase in the discount rate.

For more information on the discount rates, see the table below.

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Years Ended December 31, 2025, 2024 and 2023

The pension plans all have accumulated benefit obligations in excess of plan assets.

The pension plans all have plan assets in excess of accumulated benefit obligations.

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for these plans at December 31, were as follows:

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2030 2,570 1,366

2031-2035 11,690 7,621

KNIFE RIVER CORPORATION AND SUBSIDIARIES

11 unchanged sentences

The estimated fair values of our pension plans’ assets are determined using the market approach.

The carrying value of the pension plans’ Level 2 cash equivalents approximates fair value and is determined using observable inputs in active markets or the net asset value of shares held at year end, which is determined using other observable inputs, including pricing from outside sources.

The carrying value of the pension plans’ Level 1 and Level 2 cash equivalents are based on quoted prices in active markets for identical instruments and approximates fair value by using observable inputs in active markets.

The estimated fair value of the pension plans’ Level 1 and Level 2 cash equivalents is based on the net asset value of shares held at year end, based on quoted prices in active markets and is determined using other observable inputs, including pricing from outside sources.

The carrying value of the pension plan’s Level 2 money market funds are valued at the net asset value of shares held at the end of the period, based on published market quotations on active markets, or using other known sources including pricing from outside sources.

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The estimated fair value of the pension plans’ Level 1 and Level 2 collective and mutual funds are based on the net asset value of shares held at year end, based on either published market quotations on active markets or other known sources, including pricing from outside sources.

All investments measured at net asset value in the tables that follow are invested in commingled funds, separate accounts or common collective trusts which do not have publicly quoted prices.

The fair value of the commingled funds, separate accounts and common collective trusts are determined based on the net asset value of the underlying investments.

The fair value of the underlying investments held by the commingled funds, separate accounts and common collective trusts is generally based on quoted prices in active markets.

Though we believe the methods used to estimate fair value are consistent with those used by other market participants, the use of other methods or assumptions could result in a different estimate of fair value.

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28,636 1,321 — 29,957

Money market funds

Total assets measured at fair value $ 29,059 $ 1,321 $ — $ 30,380

13 unchanged sentences

28,374 1,672 — 30,046

Investments measured at net asset value*

Money market funds — 32 — 32

Total assets measured at fair value $ 28,374 $ 2,001 $ — $ 30,375

__________________

* In accordance with ASC 820 - Fair Value, Measurements certain investments that were measured at net asset value per share (or its equivalent) have not been classified in the fair value hierarchy.

The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the line items presented in the Consolidated Balance Sheets.

Nonqualified benefit plans

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Net periodic benefit cost $ 720 $ 714 $ 765

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

Weighted average assumptions used at December 31, were as follows:

3 unchanged sentences

Net periodic benefit cost rate of compensation increase N/A N/A

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

The amount of future benefit payments for the unfunded, nonqualified defined benefit plans at December 31, 2025 are expected to aggregate as follows:

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• Assets contributed to the MEPP by one employer may be used to provide benefits to employees of other participating employers.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

• If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

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Unless otherwise noted, the most recent Pension Protection Act zone status available in 2025, 2024 and 2023 is for the plan’s year-end at December 31, 2024, December 31, 2023 and December 31, 2022, respectively.

The zone status is based on information that we received from the plan and is certified by the plan’s actuary.

The zone status is based on information that we

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

received from the plan and is certified by the plan’s actuary.

Among other factors, plans in the “red zone,” or critical status, are generally less than 65 percent funded, plans in the “yellow zone,” or endangered status, are between 65 percent and 80 percent funded, and plans in the “green zone,” or healthy status, are at least 80 percent funded.

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(In thousands)

DB Pension Plan of AGC-IUOE Local 701 Pension Trust Fund

936075580-001

1,434 1,225 1,295 No

Minnesota Teamsters Construction Division Pension Fund 416187751-001

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Pension Trust Fund for Operating Engineers 946090764-001

Green Yellow No 2,746 2,476 2,484 No 3/31/2026-

Green Green No 3,004 2,746 2,476 No 3/31/2026-

Western Conference of Teamsters Pension Plan 916145047-001

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Total Contributions (as of December 31, of the Plan’s Year-End)

DB Pension Plan of AGC-IUOE Local 701 Pension Trust Fund 2023 and 2022

Minnesota Teamsters Construction Division Pension Fund 2024 and 2023

Southwest Marine Pension Trust 2022

DB Pension Plan of AGC-IUOE Local 701 Pension Trust Fund 2023

We also contribute to a number of multiemployer other postretirement plans under the terms of collective-bargaining agreements that cover our union-represented employees.

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Our total contributions to the multiemployer other postretirement plans, which also includes contributions to active multiemployer health and welfare plans, were $ 2.2 million, $ 2.0 million and $ 1.8 million for the years ended December 31, 2025, 2024 and 2023, respectively.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023 and 2022

Note 18 – Commitments and contingencies

1 unchanged sentence

We accrue a liability for those contingencies when the incurrence of a loss is probable, and the amount can be reasonably estimated.

If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued.

If a range of amounts can be reasonably estimated and no

KNIFE RIVER CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2025, 2024 and 2023

amount within the range is a better estimate than any other amount, then the minimum of the range is accrued.

We do not accrue liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote.

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(1) the damages are unsubstantiated or indeterminate, (2) the proceedings are in the early stages, (3) numerous parties are involved, or (4) the matter involves novel or unsettled legal theories.

At December 31, 2024 and 2023, we accrued liabilities which have not been discounted, of $ 6.6 million and $ 873,000 , respectively.

At December 31, 2025 and 2024, we accrued liabilities which have not been discounted, of $ 3.3 million and $ 6.6 million, respectively.

At December 31, 2025 and 2024, we also recorded corresponding insurance receivables of $ 0 and $ 459,000 , respectively, related to the accrued liabilities.

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Portland Harbor Site .

In December 2000, Knife River - Northwest was named by the EPA as a PRP in connection with the cleanup of the riverbed site adjacent to a commercial property site acquired by Knife River - Northwest from Georgia-Pacific West, Inc.

along the Willamette River.

The riverbed site is part of the Portland, Oregon, Harbor Superfund Site where the EPA wants responsible parties to share in the costs of cleanup.

The EPA entered into a consent order with certain other PRPs referred to as the Lower Willamette Group for a remedial investigation and feasibility study.

The Lower Willamette Group has indicated that it incurred over $ 115 million in investigation related costs before it concluded its work and disbanded.

Knife River - Northwest has joined with approximately 100 other PRPs, including the former Lower Willamette Group members, in a voluntary process to establish an allocation of costs for the site.

Costs to be allocated would include costs incurred by the Lower Willamette Group as well as costs incurred by other participants to implement and fund remediation of the site.

In January 2017, the EPA issued a Record of Decision adopting a selected remedy which is expected to take 13 years to complete with a then estimated present value of approximately $ 1 billion.

Corrective action will not be taken until remedial design/remedial action plans are approved by the EPA.

In 2020, the EPA encouraged certain PRPs to enter into consent agreements to perform remedial design covering the entire site and proposed dividing the site into multiple subareas for remedial design.

Certain PRPs executed consent agreements for remedial design work and certain others were issued unilateral administrative orders to perform design work.

Knife River - Northwest is not subject to either a voluntary agreement or unilateral order to perform remedial design work.

In February 2021, the EPA announced that 100 percent of the site’s area requiring active cleanup are in the remedial design process.

The remedial design work is ongoing and site-wide remediation activities are not expected to commence for a number of years.

Knife River - Northwest was also notified that the Portland Harbor Natural Resource Trustee Council intends to perform an injury assessment to natural resources resulting from the release of hazardous substances at the site.

It is not possible to estimate the costs of natural resource damages until an assessment is completed and allocations are undertaken.

In 1999, Knife River - Northwest acquired a commercial property along the portion of the Williamette River know as the Portland Harbor from Georgia-Pacific West, Inc.

(the “Linnton Property”).

In December 2000, the EPA designated portions of the Portland Harbor, including the area encompassing the Linnton Property, as a Superfund site due to sediment contamination (the “Portland Harbor Site” or “Site”).

The EPA has issued General Notice Letters to more than 150 parties, including Knife River - Northwest, indicating that the recipients could potentially be liable for investigation and remediation costs associated with the Portland Harbor Site.

Liability for those costs may be joint and serval between the potentially responsible parties (“PRPs”).

We have joined with approximately 100 other PRPs, in a voluntary, non-judicial mediation process to try and allocate those cleanup costs.

This process remains ongoing.

In January 2017, the EPA issued a Record of Decision (“ROD”) identifying its preferred remedy to address the sediment contamination, including a combination of sediment removal, capping, enhanced and monitored natural recovery, and riverbank improvements depending on the particular part of the river.

This remedy, which will not begin until the EPA has approved remedial design and remedial action plans from the PRPs, was expected to require 13 years of active remediation and cost $ 1 billion to $ 2 billion.

The EPA has, through voluntary consent agreements or unilateral administrative orders, engaged certain PRPs to perform the remedial design work throughout the Site.

We are not a party to any of the voluntary consent agreements or unilateral administrative orders.

Remedial design work is ongoing for 100 percent of the Site, but Site-wide remediation activities are not expected to begin for several years as different parts of the Site are at different stages of the remedial design process.

While it is not presently possible to estimate the total cleanup costs given the large number of PRPs and the variation in the ROD remedy across the Site, costs for the ROD remedy are likely to increase given the anticipated timeline for implementation.

In November 2024, EPA initiated the negotiation process for a consent decree that would govern remediation as well as long-term site monitoring by issuing Special Notice Letters to approximately 60 PRPs.

Knife River– Northwest did not receive a Special Notice Letter.

Separate from the EPA’s remediation and allocation process, we have also been notified that the Portland Harbor Natural Resource Trustee Council (the “Trustees”) intends to perform a natural resource injury assessment for damage resulting from the release of hazardous substances at the Site.

Until that assessment is complete, there is not adequate information to estimate the cost of any natural resource damages or the allocation to any PRP.

The Trustees may seek to negotiate their own settlements or take other legal action against parties responsible for those damages.

KNIFE RIVER CORPORATION AND SUBSIDIARIES

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Years Ended December 31, 2025, 2024 and 2023

At this time, Knife River - Northwest does not believe it is a responsible party and has notified Georgia-Pacific West, Inc., that it intends to seek indemnity for liabilities incurred in relation to the above matters pursuant to the terms of their sale agreement.

We believe it is not probable that we will incur any material environmental remediation costs or damages in relation to the above referenced matter.

We do not expect that we will incur material costs related to remediation or natural resource damages.

Additionally, we believe Georgia-Pacific West, Inc.

and its successors – are required to indemnify Knife River – Northwest under the Linnton Property sale agreement for any costs and liabilities incurred in relation to the Portland Harbor Site and have notified them accordingly.

Purchase commitments

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At December 31, 2025, the fixed maximum amounts guaranteed under these letters of credit aggregated to $ 23.4 million.

The amounts of scheduled expiration of the maximum amounts guaranteed under these letters of credit aggregate to $ 20.5 million in 2025, $ 0 in 2026 and $ 104,000 in 2027.

The amounts of scheduled expiration of the maximum amounts guaranteed under these letters of credit aggregate to $ 11.9 million in 2026, $ 11.3 million in 2027 and $ 175,000 in 2028.

There were no amounts outstanding under the previously mentioned letters of credit at December 31, 2025.

8 unchanged sentences

Some of these services were provided by MDU Resources on a temporary basis under a transition services agreement.

For the years ended December 31, 2023 and 2022, we were allocated $ 10.7 million and $ 18.0 million, respectively, for these corporate services.

These expenses have been allocated to us on the basis of direct usage when identifiable, with the remainder allocated on the basis of percent of total capital invested, the percent of total average commercial paper borrowings at Centennial or other allocation methodologies that are considered to be a reasonable reflection of the utilization of the services provided to the benefits received, including the following:

For the year ended December 31, 2023, we were allocated $ 10.7 million for these corporate services and for the years ended December 31, 2025 and 2024, there were no expenses allocated.

These expenses were allocated to us on the basis of direct usage when identifiable, with the remainder allocated on the basis of percent of total capital invested, the percent of total average commercial paper borrowings at Centennial or other allocation methodologies that are considered to be a reasonable reflection of the utilization of the services provided to the benefits received, including the following:

number of employees paid and stated as cost per check;

number of employees served;

weighted factor of travel, managed units, national

KNIFE RIVER CORPORATION AND SUBSIDIARIES

1 unchanged sentence

Years Ended December 31, 2025, 2024 and 2023

employees served;

weighted factor of travel, managed units, national account spending, equipment and fleet acquisitions;

account spending, equipment and fleet acquisitions;

purchase order dollars spent and purchase order line count;

2 unchanged sentences

and projected workload.

Management believes these cost allocations are a reasonable reflection of the utilization of services provided to, or the benefit derived by, us during the periods presented.

Management believes these cost allocations were a reasonable reflection of the utilization of services provided to, or the benefit derived by, us during the periods presented.

The allocations may not, however, be indicative of the actual expenses that would have been incurred had we operated as a stand-alone public company for these periods.

4 unchanged sentences

For the years ended December 31, 2024 and 2023, we received $ 156,000 and $ 824,000 , respectively, related to these activities, which was reflected in other income on the Consolidated Statements of Operations.

The majority of the transition services were completed over a period of 1 year after the Separation and, as of December 31, 2024, no further obligation for services exists for either party.

Note 20 – Subsequent Event

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.

The majority of the transition services were completed over a period of 1 year after the Separation and, as of December 31, 2024, no further obligation for services existed for either party.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data