Knife River (KNF) investor relations material

Investment thesis and market backdrop

• Vertical integration supports strong aggregate volumes and supply chain reliability.

• Population in operating states is growing about twice as fast as non-operating states.

• Significant national need for infrastructure investment and robust public funding environment.

• Expanding private construction opportunities in data centers, semiconductors, and energy infrastructure.

• Proven growth strategy through acquisitions and organic investments.

Key operational and financial updates

• 2Q 2026 faced headwinds: fewer public bid lettings, increased competition, and more low-margin projects.

• Delays from construction phasing and adverse weather impacted major projects in Texas, Hawaii, and Alaska.

• Diesel prices rose about 40% since early July, affecting margins.

• Adjusted EBITDA impact in 2Q 2026: $8M from contracting, $10M from delays, $6M from fuel costs.

• 2H26 contracting services margins expected at approximately 9–10%.

Strategic responses and growth initiatives

• Expanding private work, targeting data centers, semiconductors, and energy infrastructure.

• Right-sizing crews and equipment, dynamic pricing, and accelerating non-delayed projects.

• Bidding as both general and subcontractor to increase opportunities.

• Targeting upstream materials sales to competitors.

• Operations positioned for growth with vertical integration and technical expertise.