Earnings release
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KNIFE RIVER CORPORATION REPORTS THIRD QUARTER 2025 FINANCIAL RESULTS Strategic acquisi ons contributed to record financial resultsWell posi oned for 2026 with record third quarter backlogNarrowed full-year 2025 guidance BISMARCK, N.D. — November 4, 2025 — Knife River Corpora on (NYSE: KNF), an aggregates-led, ver cally integrated construc on materialsand contrac ng services company, today announced financial results for the third quarter ended September 30, 2025. PERFORMANCE SUMMARY Three Months Ended September 30, (In millions, except per share) 2025 2024 % Change Revenue $ 1,203.7 $ 1,105.3 9 % Net income $ 143.2 $ 148.1 (3)% Net income margin 11.9 % 13.4 % Adjusted EBITDA $ 272.8 $ 245.2 11 % Adjusted EBITDA margin 22.7 % 22.2 % Net income per share $ 2.52 $ 2.60 (3)% Note: Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. For more informa on on all non-GAAP measures and a reconcilia on to the nearest GAAP measure, seethe sec on en tled "Non-GAAP Financial Measures." MANAGEMENT COMMENTARY “Our team faced external headwinds in the third quarter and responded with be er year-over-year results, including record revenue andAdjusted EBITDA,” Knife River President and CEO Brian Gray said. “Growth, including strategic M&A, is a core component of our Compe veEDGE strategy to deliver long-term shareholder value. We benefited during the quarter from our recent acquisi ons, which boosted ouropera ons through a rainy summer, economic uncertainty in Oregon and a slower paving season in the Mountain Segment. “We also con nued our focus on price op miza on and cost controls, leading to year-over-year improvement in adjusted EBITDA margin — aswell as higher gross margin across our aggregate, ready-mix and asphalt product lines," Gray said. "Managing through adversity in 2025 whiledelivering record results has us op mis c for 2026. We believe the fundamentals of our business are strong, that our EDGE strategy is workingand that we are well-posi oned to con nue delivering profitable growth.” Margin ImprovementSelf-help ini a ves through our EDGE strategy drove year-over year improvements in the quarter:• Adjusted EBITDA margin increased 50 basis points.• Gross margin improved in our product lines:◦ Aggregates up 50 bps, to 27.2%.◦ Ready-mix up 160 bps, to 20.2%.◦ Asphalt up 20 bps, to 20.2%. 1
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Record BacklogInvestment in public infrastructure projects is at or near all- me highs, and we have record backlog as we move into the bidding season. Ourbacklog of $995 million is 32% higher than the same period last year; 87% of backlog is public work and 77% of total backlog is expected to beconverted to revenue within 12 months.• Compe ve market dynamics and Oregon DOT funding challenges resulted in slightly lower margins to our backlog. More thanoffse ng this reduc on in margin is the expected benefit of addi onal volumes of upstream, higher-margin materials.• Central Segment backlog increased 83% year-over-year, primarily related to a significant pick-up in ac vity in Texas. The addi on of Strata Corpora on also posi vely impacted Central backlog.• Mountain Segment backlog is at a record $386 million, up 38% year-over-year. This is led by Idaho, and we have seen recent backlog addi ons in Montana and Wyoming, as well as increased bidding ac vity throughout the segment. Oregon UpdateDuring the quarter, we con nued to right-size our team in Oregon, worked hard to find opera ng efficiencies and maintained pricing disciplinein our materials business, leading to slightly improved financial results in the state compared to last year. Further, while Oregon's 2025-27 DOTbudget is not yet final, it is expected that contribu ons from the state's new 10-year, $4.3 billion transporta on bill will bring total funding forthe biennium to approximately $6.1 billion, compared to $6.2 billion for the previous two-year cycle. The passing of the new revenue streamhelped se le some of the uncertainty ODOT was facing, while providing addi onal funds to ci es and coun es for local projects, which shouldbegin benefi ng Knife River next year. These recent developments support that the Oregon market is stabilizing. Mountain ResultsWhile we had record results in the West and Central segments, Mountain results were lower than expected, primarily because we completedless asphalt paving work. This was largely related to type and ming of work. We experienced DOT permi ng and scheduling delays on severalprojects, as well as weather delays in certain markets. However, we see this quarter's results in Mountain as a temporary setback. We haverecord backlog in the segment, and we con nue to add new work. The 90-day bid schedule looks strong, with more paving opportuni es in ourservice area. WeatherAmong the headwinds for the 2025 construc on season was a wet third quarter across our Central Segment and pockets of Mountain thatdelayed work and created opera onal challenges.• The tragic July 4 flooding in Texas impacted delivery from our Honey Creek Quarry for 51 days.• September rainfall was 176% higher in our Central markets than during the same month last year.• September rainfall was 20% higher in our Mountain markets than during the same month last year. Outlook“The third quarter is historically our most profitable of the year, and I’m proud of our team for working through some difficul es to deliverrecord results,” Gray said. “As we look at the full year, we are narrowing our 2025 revenue guidance to a range of $3.1 billion to $3.15 billion,and Adjusted EBITDA guidance to a range of $475 million to $500 million. We are focused on finishing 2025 strong, and we expect the work weare doing to manage costs, op mize prices and grow our business to pay off in 2026 and beyond. We have record backlog and a skilled teamthat is eager to con nue implemen ng our strategies and delivering for our shareholders.” 2
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THIRD QUARTER 2025 RESULTS For the three months ended September 30, 2025, we reported consolidated revenue of $1.2 billion, a 9% increase from the prior-year, primarilydriven by contribu ons from acquired companies and increased product pricing. This was par ally offset by a decrease in contrac ng servicesworkloads in the Mountain and Central segments, largely due to less asphalt paving work and increased rainfall in the period. The increasedrevenue drove an 11% improvement in Adjusted EBITDA, to $272.8 million. Par ally offse ng the increase in Adjusted EBITDA was 8% higherselling, general and administra ve costs, largely from acquired companies. As previously announced, we made a change to our organiza onal structure in January 2025 to be er align with our business strategy. Ourformer Pacific and Northwest opera ng segments were combined to form the new West opera ng segment. Our former North Central andSouth opera ng segments were combined to form the new Central opera ng segment. The reorganiza on resulted in four opera ng segments:West, Mountain, Central and Energy Services, each of which is also a reportable segment. Prior periods presented have been recast to conformto the current reportable segment presenta on. See the sec on en tled "Non-GAAP Financial Measures" for more informa on on all non-GAAP measures and a reconcilia on to the nearestGAAP measure. REPORTING SEGMENT PERFORMANCE West Alaska, California, Hawaii, Oregon, Washington Three Months Ended Nine Months Ended Sept. 30, Sept. 30, 2025 2024 % Change 2025 2024 % Change (In millions) Revenue $ 396.0 $ 383.1 3%$ 921.7 $ 914.9 1% EBITDA $ 91.8 $ 85.4 8%$ 177.5 $ 173.3 2% EBITDA margin 23.2 % 22.3 % 19.3 % 19.0 % Third quarter revenue increased $12.9 million from the prior year. In Oregon, aggregate and ready-mix pricing improved compared to the prioryear, which helped offset the decrease in aggregate volumes. In California, public agency demand remains strong, contribu ng an addi onal$3.1 million of revenue, while Hawaii experienced higher volumes and pricing in both ready-mix and cement. EBITDA was $91.8 million for thequarter, an 8% increase year-over-year, supported by higher pricing across all product lines and increased asset disposal gains of $1.1 million. Mountain Idaho, Montana, Wyoming Three Months Ended Nine Months Ended Sept. 30, Sept. 30, 2025 2024 % Change 2025 2024 % Change (In millions) Revenue $ 229.8 $ 261.1 (12)%$ 471.9 $ 514.9 (8)% EBITDA $ 50.7 $ 59.4 (15)%$ 65.4 $ 96.5 (32)% EBITDA margin 22.1 % 22.8 % 13.8 % 18.7 % Third quarter revenue decreased $31.3 million from the prior year, primarily the result of less asphalt paving work due to the type and loca onof available DOT projects, the ming of public-agency jobs and increased rainfall in certain markets as compared to the prior year. This decreasein contrac ng services projects also contributed to lower aggregate and asphalt volumes. Par ally offse ng this was higher ready-mix andaggregate pricing. EBITDA decreased $8.7 million, largely related to lower contrac ng services ac vity, as well as decreased volumes, aspreviously men oned. 3
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Central Iowa, Minnesota, North Dakota, South Dakota, Texas Three Months Ended Nine Months Ended Sept. 30, Sept. 30, 2025 2024 % Change 2025 2024 % Change (In millions) Revenue $ 434.4 $ 354.9 22%$ 757.4 $ 630.5 20% EBITDA $ 99.7 $ 79.8 25%$ 119.8 $ 97.3 23% EBITDA margin 23.0 % 22.5 % 15.8 % 15.4 % Third quarter revenue increased $79.5 million from the prior year, largely from the contribu ons from acquired companies and price increasesacross our legacy opera ons. This was par ally offset by a decrease in contrac ng services revenue, as a result of wet weather and less pavingwork compared to prior year. EBITDA improved 25%, with a majority of the improvement coming from acquisi ons during the year. Slightlyoffse ng the increase was the impact of less contrac ng services work, as previously men oned. Energy Services California, Iowa, Nebraska, Oregon, South Dakota, Texas, Washington,Wyoming Three Months Ended Nine Months Ended Sept. 30, Sept. 30, 2025 2024 % Change 2025 2024 % Change (In millions) Revenue $ 169.2 $ 125.9 34%$ 280.5 $ 214.9 31% EBITDA $ 39.7 $ 33.7 18%$ 48.9 $ 50.6 (3)% EBITDA margin 23.4 % 26.8 % 17.4 % 23.5 % Third quarter revenue increased $43.3 million from the prior year and EBITDA improved $6.0 million, primarily related to the acquisi on ofAlbina Asphalt, as well as our newly constructed polymer modified liquid asphalt plant in South Dakota. These increases were offset in part bycompe ve market condi ons, as well as planned maintenance ac vi es to our railcars and facili es. CAPITAL ALLOCATION & LIQUIDITY For the nine months ended September 30, 2025, we spent $154.8 million, largely on the replacement of deple ng aggregate reserves,construc on equipment and plant improvements. Addi onally, we spent $663.5 million on growth ini a ves, including $528.0 million onacquisi ons and $135.5 million on aggregate expansion and greenfield projects. For the full year 2025, we expect capital expenditures for maintenance and improvement to be between 5% and 7% of revenue guidance. Forthe remainder of 2025, we expect to spend approximately $32 million on organic growth projects. Capital expenditures for future acquisi onsand new organic growth opportuni es would be incremental to our outlined capital program. As of September 30, 2025, Knife River had $30.7 million of unrestricted cash and cash equivalents, $1.2 billion of gross debt and $456.6 millionof available capacity under its revolving credit facility, net of outstanding le ers of credit. Net leverage, defined as the ra o of net debt totrailing-twelve-month Adjusted EBITDA, was 2.6x at September 30, 2025. We expect net leverage to be at or below our long-term target of 2.5xby year end. 4
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2025 FINANCIAL GUIDANCE Knife River expects full-year 2025 financial results, including completed acquisi ons to date, in the ranges noted in the following table. Weexpect price increases of high-single digits for aggregates and mid-single digits for ready-mix, and for asphalt pricing to be a low-single digitdecrease. We expect consolidated aggregate volumes to be flat, ready-mix volumes to increase low-double digits and asphalt volumes todecrease low-single digits. The guidance ranges are based on normal weather, economic and opera ng condi ons for the remainder of theyear. Low High (In millions) Revenue Revenue (Knife River Consolidated) $ 3,100.0 $ 3,150.0 Adjusted EBITDA Geographic Segments and Corporate Services 422.5 442.5 Energy Services 52.5 57.5 Knife River Consolidated $ 475.0 $ 500.0 THIRD QUARTER 2025 RESULTS CONFERENCE CALL Knife River will host a conference call at 11 a.m. EST on November 4, 2025, to discuss third quarter results and conduct a ques on-and-answersession. The event will be webcast at h ps://events.q4inc.com/a endee/596649687. To par cipate in the live call: • Domes c: 1-800-549-8228 • Interna onal: 1-289-819-1520Conference ID: 73233 ABOUT KNIFE RIVER CORPORATION Knife River Corpora on, a member of the S&P MidCap 400 index, mines aggregates and markets crushed stone, sand, gravel and relatedconstruc on materials, including ready-mix concrete, asphalt and other value-added products. Knife River also performs ver cally integratedcontrac ng services, specializing in publicly funded DOT projects and private projects across the industrial, commercial and residen al space.For more informa on about the company, visit www.kniferiver.com. CORPORATE CONTACTS IR Contact: Zane Karimi, Director of Investor Rela ons & Execu ve Support, 503-944-3508Media Contact: Tony Spilde, Vice President of Communica ons, 541-693-5949 5
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Knife River Corpora on Consolidated Statements of Opera ons (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (In millions, except per share amounts) Revenue: Construc on materials $ 647.3 $ 545.7 $ 1,354.2 $ 1,185.0 Contrac ng services 556.4 559.6 1,036.7 1,056.8 Total revenue 1,203.7 1,105.3 2,390.9 2,241.8 Cost of revenue: Construc on materials 426.8 345.0 1,037.6 865.3 Contrac ng services 492.6 487.3 921.3 920.8 Total cost of revenue 919.4 832.3 1,958.9 1,786.1 Gross profit 284.3 273.0 432.0 455.7 Selling, general and administra ve expenses 69.1 63.9 211.4 183.6 Opera ng income 215.2 209.1 220.6 272.1 Interest expense 23.0 13.9 60.6 41.8 Other income 1.2 2.5 8.0 7.5 Income before income taxes 193.4 197.7 168.0 237.8 Income tax expense 50.2 49.6 42.9 59.4 Net income $ 143.2 $ 148.1 $ 125.1 $ 178.4 Net income per share: Basic $ 2.53 $ 2.62 $ 2.21 $ 3.15 Diluted $ 2.52 $ 2.60 $ 2.20 $ 3.14 Weighted average common shares outstanding: Basic 56.7 56.6 56.6 56.6 Diluted 56.9 56.9 56.9 56.8 6
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Knife River Corpora on Consolidated Balance Sheets (Unaudited) September 30, 2025September 30, 2024 December 31, 2024 (In millions, except shares and per share amounts) Assets Current assets: Cash, cash equivalents and restricted cash $ 81.1 $ 267.4 $ 281.1 Receivables, net 516.8 449.2 267.3 Costs and es mated earnings in excess of billings on uncompleted contracts 67.9 69.3 31.3 Inventories 436.5 347.3 380.3 Prepayments and other current assets 33.0 26.4 27.7 Total current assets 1,135.3 1,159.6 987.7 Noncurrent assets: Net property, plant and equipment 1,961.4 1,346.2 1,441.7 Goodwill 469.4 275.3 297.2 Other intangible assets, net 33.4 9.8 29.4 Opera ng lease right-of-use assets 50.0 47.4 49.4 Investments and other 53.8 45.8 45.8 Total noncurrent assets 2,568.0 1,724.5 1,863.5 Total assets $ 3,703.3 $ 2,884.1 $ 2,851.2 Liabili es and Stockholders' Equity Current liabili es: Long-term debt - current por on $ 11.8 $ 8.8 $ 10.5 Accounts payable 211.2 180.6 140.8 Billings in excess of costs and es mated earnings on uncompleted contracts 42.8 44.8 42.1 Accrued compensa on 37.0 42.1 50.7 Accrued interest 15.7 13.8 5.5 Taxes payable 28.6 16.0 8.3 Current opera ng lease liabili es 14.7 13.5 14.8 Other accrued liabili es 112.6 106.5 97.3 Total current liabili es 474.4 426.1 370.0 Noncurrent liabili es: Long-term debt 1,176.0 669.7 666.9 Deferred income taxes 264.2 187.9 174.7 Noncurrent opera ng lease liabili es 35.2 33.9 34.5 Other 146.3 117.6 129.0 Total liabili es 2,096.1 1,435.2 1,375.1 Commitments and con ngencies Stockholders' equity: Common stock, 300,000,000 shares authorized, $0.01 par value, 57,095,301 shares issued and56,664,165 shares outstanding at September 30, 2025; 57,043,841 shares issued and56,612,705 shares outstanding at September 30, 2024; 57,043,841 shares issued and56,612,705 shares outstanding at December 31, 2024 .6 .6 .6 Other paid-in capital 626.7 618.8 620.9 Retained earnings 992.6 844.2 867.5 Treasury stock held at cost - 431,136 shares (3.6) (3.6) (3.6) Accumulated other comprehensive loss (9.1) (11.1) (9.3) Total stockholders' equity 1,607.2 1,448.9 1,476.1 Total liabili es and stockholders' equity $ 3,703.3 $ 2,884.1 $ 2,851.2 7
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Knife River Corpora on Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended September 30, 2025 2024 (In millions) Opera ng ac vi es: Net income $ 125.1 $ 178.4 Adjustments to reconcile net income to net cash provided by opera ng ac vi es 141.2 115.1 Changes in current assets and liabili es, net of acquisi ons: Receivables (267.5) (224.8) Inventories (15.3) (27.3) Other current assets 3.8 11.1 Accounts payable 72.5 77.2 Other current liabili es 16.7 17.3 Pension and postre rement benefit plan contribu ons (.5) (2.5) Other noncurrent changes 6.6 5.4 Net cash provided by opera ng ac vi es 82.6 149.9 Inves ng ac vi es: Capital expenditures (290.3) (127.2) Acquisi ons, net of cash acquired (528.0) (15.0) Net proceeds from sale or disposi on of property and other 38.3 7.6 Investments (3.0) (3.2) Net cash used in inves ng ac vi es (783.0) (137.8) Financing ac vi es: Issuance of long-term debt 520.0 — Repayment of long-term debt (5.9) (5.3) Debt issuance costs (11.1) — Tax withholding on stock-based compensa on (2.6) (1.7) Net cash provided by (used in) financing ac vi es 500.4 (7.0) Increase (decrease) in cash, cash equivalents and restricted cash (200.0) 5.1 Cash, cash equivalents and restricted cash -- beginning of year 281.1 262.3 Cash, cash equivalents and restricted cash -- end of period $ 81.1 $ 267.4 8
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Segment Financial Data and Highlights (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Dollars Margin Dollars Margin Dollars Margin Dollars Margin (Dollars in millions) Revenues by segment: West $ 396.0 $ 383.1 $ 921.7 $ 914.9 Mountain 229.8 261.1 471.9 514.9 Central 434.4 354.9 757.4 630.5 Energy Services 169.2 125.9 280.5 214.9 Total segment revenues 1,229.4 1,125.0 2,431.5 2,275.2 Corporate Services and Elimina ons (25.7) (19.7) (40.6) (33.4) Consolidated revenues $ 1,203.7 $ 1,105.3 $ 2,390.9 $ 2,241.8 EBITDA by segment: West $ 91.8 23.2%$ 85.4 22.3%$ 177.5 19.3%$ 173.3 19.0% Mountain 50.7 22.1% 59.4 22.8% 65.4 13.8% 96.5 18.7% Central 99.7 23.0% 79.8 22.5% 119.8 15.8% 97.3 15.4% Energy Services 39.7 23.4% 33.7 26.8% 48.9 17.4% 50.6 23.5% Total segment EBITDA (a) 281.9 22.9% 258.3 23.0% 411.6 16.9% 417.7 18.4% Corporate Services and Elimina ons (b) (12.7) N.M. (13.7) N.M. (44.1) N.M. (42.3) N.M. Consolidated EBITDA (a) $ 269.2 22.4%$ 244.6 22.1%$ 367.5 15.4%$ 375.4 16.7% (a)Consolidated EBITDA, total segment EBITDA, Consolidated EBITDA margin and total segment EBITDA margin are non-GAAP financial measures. For more informa on and areconcilia on to the nearest GAAP measure, see the sec on en tled "Non-GAAP Financial Measures." (b)N.M. - not meaningful The following table summarizes backlog for the company. September 30, 2025 September 30, 2024 (In millions) West $ 257.5 $ 282.9 Mountain 386.0 279.9 Central 351.1 192.3 $ 994.6 $ 755.1 Margins on backlog at September 30, 2025, are expected to be slightly lower than the margins on backlog at September 30, 2024.Approximately 87% of the company's contrac ng services backlog relates to publicly funded projects, including street and highway construc on projects. Period over period increases or decreases should not be used as an indicator of future revenues or earnings. 9
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Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Sales (thousands): Aggregates (tons) 11,610 11,169 24,303 24,833 Ready-mix concrete (cubic yards) 1,331 1,148 2,916 2,653 Asphalt (tons) 3,111 3,150 4,953 5,183 Average selling price:* Aggregates (per ton) $ 18.78$ 17.32$ 19.15$ 17.56 Ready-mix concrete (per cubic yard) $ 196.43$ 185.97$ 197.49$ 185.78 Asphalt (per ton) $ 64.43$ 68.28$ 66.10$ 67.68 * The average selling price includes freight and delivery and other revenues. Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Dollars Margin Dollars Margin Dollars Margin Dollars Margin (Dollars in millions) Revenues by product line: Aggregates $ 218.1 $ 193.4 $ 465.4 $ 436.2 Ready-mix concrete 261.4 213.5 575.8 492.8 Asphalt 200.4 215.1 327.4 350.8 Liquid asphalt 148.8 110.9 246.9 187.3 Other* 91.4 89.7 214.4 206.4 Contrac ng services 556.4 559.6 1,036.7 1,056.8 Internal sales (272.8) (276.9) (475.7) (488.5) Total revenues $ 1,203.7 $ 1,105.3 $ 2,390.9 $ 2,241.8 Gross profit by product line: Aggregates $ 59.4 27.2%$ 51.7 26.7%$ 88.0 18.9%$ 96.1 22.0% Ready-mix concrete 52.8 20.2% 39.6 18.6% 93.9 16.3% 78.1 15.8% Asphalt 40.4 20.2% 43.1 20.0% 51.5 15.7% 54.7 15.6% Liquid asphalt 33.7 22.7% 28.8 26.0% 44.5 18.0% 43.7 23.3% Other* 34.2 37.4% 37.5 41.8% 38.7 18.1% 47.1 22.8% Contrac ng services 63.8 11.5% 72.3 12.9% 115.4 11.1% 136.0 12.9% Total gross profit $ 284.3 23.6%$ 273.0 24.7%$ 432.0 18.1%$ 455.7 20.3% * Other includes cement, merchandise, fabric and spreading, and other products and services that individually are not considered to be a core line of business. 10
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NON-GAAP FINANCIAL MEASURESEBITDA, EBITDA margin, Adjusted EBITDA, Adjusted EBITDA margin, as well as total segment measures, as applicable, net debt and net leverage are considered non-GAAP measures of financial performance. These non-GAAP financial measures are not measures of financial performance under GAAP. The items excluded from these non-GAAP financial measures are significant components in understanding and assessing financialperformance. Therefore, these non-GAAP financial measures should not be considered subs tutes for the applicable GAAP metric. EBITDA, EBITDA margin, Adjusted EBITDA and Adjusted EBITDA margin are most directly comparable to the corresponding GAAP measures ofnet income and net income margin. Net debt and net leverage are most directly comparable to the corresponding GAAP measures of total debt. We believe these non-GAAP financial measures, in addi on to corresponding GAAP measures, are useful to investors by providingmeaningful informa on about opera onal efficiency compared to our peers by excluding the impacts of differences in tax jurisdic ons and structures, debt levels and capital investment. We believe Adjusted EBITDA and Adjusted EBITDA margin are useful performance measuresbecause they allow for an effec ve evalua on of our opera ng performance by excluding stock-based compensa on, unrealized gains and losses on benefit plan investments and the impact of selling acquired inventory a er markup to fair value as part of acquisi on accoun ng as they are considered non-cash and not part of our core opera ons. We also exclude the one- me, non-recurring costs associated with thesepara on of Knife River from MDU Resources as those are not expected to con nue. We believe EBITDA and Adjusted EBITDA assist ra ng agencies and investors in comparing opera ng performance across opera ng periods on a consistent basis by excluding items managementdoes not believe are indica ve of the company's opera ng performance, including using EBITDA and Adjusted EBITDA to calculate Knife River’s leverage as a mul ple of EBITDA and Adjusted EBITDA. Addi onally, EBITDA and Adjusted EBITDA are important financial metrics for debt investors who u lize debt to EBITDA and debt to Adjusted EBITDA ra os. We believe EBITDA, EBITDA margin, Adjusted EBITDA and AdjustedEBITDA margin, including those measures by segment, are useful performance measures because they provide clarity as to the opera onal results of the company. Management believes net debt and net leverage are useful performance measures because they provide a measure ofhow long it would take the company to pay back its debt if net debt and Adjusted EBITDA were constant. Net leverage also allows management to assess our borrowing capacity and op mal leverage ra o. Our management uses these non-GAAP financial measures in conjunc on with GAAP results when evalua ng our opera ng results internally and calcula ng employee incen ve compensa on, and leverage as a mul ple ofAdjusted EBITDA to determine the appropriate method of funding our opera ons. EBITDA is calculated by adding back income taxes, interest expense (net of interest income) and deprecia on, deple on and amor za on expense to net income. EBITDA margin is calculated by dividing EBITDA by revenues. Adjusted EBITDA is calculated by adding back unrealized gains and losses on benefit plan investments, stock-based compensa on, the impact of selling acquired inventory a er markup to fair value aspart of acquisi on accoun ng, and one- me separa on costs, to EBITDA. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenues. Net debt is calculated by adding unamor zed debt issuance costs to the total debt balance presented on the balance sheet, less anyunrestricted cash. Net leverage is calculated by dividing net debt by trailing-twelve-month Adjusted EBITDA. These non-GAAP financial measures are calculated the same for both the segment and consolidated metrics and should not be considered as alterna ves to, or more meaningful than, GAAP financial measures such as net income, net income margin and total debt and are intended to be helpful supplementalfinancial measures for investors’ understanding of our opera ng performance. Our non-GAAP financial measures are not standardized; therefore, it may not be possible to compare these financial measures with other companies’ EBITDA, EBITDA margin, Adjusted EBITDA,Adjusted EBITDA margin, net debt and net leverage measures having the same or similar names. The following informa on reconciles segment and consolidated net income (loss) to EBITDA and Adjusted EBITDA and provides the calcula onof EBITDA margin, Adjusted EBITDA margin, net debt and net leverage. Interest expense, net, is net of interest income that is included in other income (expense) on the Consolidated Statements of Opera ons. 11
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The following table provides the reconcilia on of net income to EBITDA and Adjusted EBITDA. Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (In millions) Net income $ 143.2 $ 148.1 $ 125.1 $ 178.4 Deprecia on, deple on and amor za on 53.4 34.8 142.4 101.5 Interest expense, net 22.4 12.1 57.1 36.1 Income taxes 50.2 49.6 42.9 59.4 EBITDA $ 269.2 $ 244.6 $ 367.5 $ 375.4 Unrealized (gains) losses on benefit plan investments (1.1) (1.2) (2.2) (2.8) Stock-based compensa on expense 2.9 1.8 8.5 5.4 Impact of selling acquired inventory a er markup to fair value as part of acquisi onaccoun ng 1.8 — 3.3 — One- me separa on costs — — — 3.8 Adjusted EBITDA $ 272.8 $ 245.2 $ 377.1 $ 381.8 Revenue $ 1,203.7 $ 1,105.3 $ 2,390.9 $ 2,241.8 Net income margin 11.9 % 13.4 % 5.2 % 8.0 % EBITDA margin 22.4 % 22.1 % 15.4 % 16.7 % Adjusted EBITDA margin 22.7 % 22.2 % 15.8 % 17.0 % The following table provides the reconcilia on of consolidated net income to total segment EBITDA. Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (In millions) Net income $ 143.2 $ 148.1 $ 125.1 $ 178.4 Deprecia on, deple on and amor za on 53.4 34.8 142.4 101.5 Interest expense, net 22.4 12.1 57.1 36.1 Income taxes 50.2 49.6 42.9 59.4 EBITDA $ 269.2 $ 244.6 $ 367.5 $ 375.4 Less corporate services EBITDA (12.7) (13.7) (44.1) (42.3) Total segment EBITDA $ 281.9 $ 258.3 $ 411.6 $ 417.7 12
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The following tables provide the reconcilia on of the net leverage calcula on of net debt to Adjusted EBITDA. Twelve Months Ended September 30, 2025Nine Months EndedSeptember 30, 2025 Twelve MonthsEnded December 31,2024 Nine Months EndedSeptember 30, 2024 (In millions) Net income $ 148.4 $ 125.1 $ 201.7 $ 178.4 Deprecia on, deple on and amor za on 177.8 142.4 136.9 101.5 Interest expense, net 67.4 57.1 46.4 36.1 Income taxes 52.8 42.9 69.3 59.4 EBITDA $ 446.4 $ 367.5 $ 454.3 $ 375.4 Unrealized (gains) losses on benefit plan investments (2.3) (2.2) (2.9) (2.8) Stock-based compensa on expense 10.9 8.5 7.8 5.4 Impact of selling acquired inventory a er markup to fair value as part ofacquisi on accoun ng 3.3 3.3 — — One- me separa on costs — — 3.8 3.8 Adjusted EBITDA $ 458.3 $ 377.1 $ 463.0 $ 381.8 13
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Twelve Months Ended September 30, 2025 (In millions) Long-term debt $ 1,176.0 Long-term debt - current por on 11.8 Total debt 1,187.8 Add: Unamor zed debt issuance costs 16.3 Total debt, gross 1,204.1 Less: Cash and cash equivalents, excluding restricted cash 30.7 Total debt, net $ 1,173.4 Trailing-twelve-months ended September 30, 2025, Adjusted EBITDA $ 458.3 Net leverage 2.6x The following table provides a reconcilia on of consolidated GAAP net income to EBITDA and Adjusted EBITDA for forecasted results. 2025 Low High (In millions) Net income $ 140.0 $ 160.5 Adjustments: Interest expense, net 77.3 77.3 Income taxes 50.5 55.0 Deprecia on, deple on and amor za on 194.2 194.2 EBITDA $ 462.0 $ 487.0 Unrealized (gains) losses on benefit plan investments (2.2) (2.2) Stock-based compensa on expense 11.4 11.4 Inventory step-up amor za on 3.8 3.8 Adjusted EBITDA $ 475.0 $ 500.0 Knife River’s long-term Adjusted EBITDA margin and projec ons for 2025 EBITDA contribu ons and 2025 Adjusted EBITDA margin are non- GAAP financial measures that exclude or otherwise have been adjusted for non-GAAP adjustment items from Knife River’s financial statements. When the company provides its forward-looking long-term goal for net leverage target and projec ons for 2025 EBITDA contribu ons and 2025Adjusted EBITDA margin, it does not provide a reconcilia on of these non-GAAP financial measures as Knife River is unable to predict with a reasonable degree of certainty the actual impact of the non-GAAP adjustment items. By their very nature, non-GAAP adjustment items aredifficult to an cipate with precision because they are generally associated with unexpected and unplanned events that impact our company and its financial results, including, but not limited to, the poten ally high variability, complexity and low visibility with respect to the items thatwould be excluded from the applicable GAAP measure in the relevant future period, such as unusual gains and losses, the impact and ming of poten al acquisi ons and dives tures, certain financing costs and other structural changes or their probable significance. Therefore, Knife River is unable to provide a reconcilia on of these measures without unreasonable efforts. 14
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FORWARD-LOOKING STATEMENTS The informa on in this news release highlights the key growth strategies, projec ons and certain assump ons for the company and itssubsidiaries, including with respect to the benefits of acquisi ons. Many of these highlighted statements and other statements not historical innature are “forward-looking statements” within the meaning of Sec on 21E of the Securi es Exchange Act of 1934, as amended. Although thecompany believes that its expecta ons are expressed in good faith and based on reasonable assump ons, there is no assurance the company’sstatements with respect to its EDGE strategy, shareholder value crea on, financial guidance, expected long-term goals, expected backlogmargin, acquisi ons, financing plans, expected federal and state funding for infrastructure or other proposed strategies will be achieved. Pleaserefer to assump ons contained in this news release, as well as the various important factors listed in Part I, Item 1A - Risk Factors in thecompany's 2024 Form 10-K and subsequent filings with the Securi es and Exchange Commission. Changes in such assump ons and factors could cause actual future results to differ materially from those expressed in the forward-lookingstatements. All forward-looking statements in this news release are expressly qualified by such cau onary statements and by reference to theunderlying assump ons. Undue reliance should not be placed on forward-looking statements, which speak only as of the date they are made.Except as required by law, the company does not undertake to update forward-looking statements, whether as a result of new informa on,future events or otherwise. 15