Knife River (KNF) risk factors, FY2024 10-K

Other

1. 01We operate in a highly competitive industry
2. 02We may not be able to secure, permit or economically mine strategically located aggregate reserves
3. 03Our business is seasonal and subject to weather conditions that could adversely affect our operations
4. 04We are exposed to risk of loss resulting from the nonpayment and/or nonperformance of our customers and counterparties
5. 05Our success depends, in part, on our ability to execute on our acquisition strategy, to successfully integrate acquired businesses and to retain key employees of acquired businesses
6. 06In addition, potential acquisitions may be in states in which we do not currently operate, which could result in unforeseen operating difficulties and difficulties in coordinating geographically dispersed operations, personnel and facilities
7. 07Technology disruptions or cyberattacks could adversely impact operations
8. 08Our accounting systems and our ability to collect information and invoice customers for products and services could be disrupted. If our operations are disrupted, it could result in decreased revenues and remediation costs that could adversely affect our results of operations and cash flows
9. 09Artificial intelligence presents risks and challenges that can impact our business by posing security risks to our confidential information, proprietary information and personal data
10. 10We may be unable to protect our intellectual property, or may be alleged to have infringed upon the intellectual property rights of others, which could result in a loss of our competitive advantage and a diversion of resources
11. 11Pandemics, including COVID-19, may have a negative impact on our business operations, revenues, results of operations, liquidity and cash flows
12. 12Significant changes in prices for commodities, labor, or other production and delivery inputs could negatively affect our businesses
13. 13Supply chain disruptions may adversely affect our operations
14. 14Our business is based in large part on government-funded infrastructure projects and building activities, and any reductions or reallocation of spending or related subsidies in these areas could have an adverse effect on us
15. 15Economic volatility affects our operations, as well as the demand for our products and services

Legal and Regulatory Compliance Risks

1. 16We may be negatively impacted by pending and/or future litigation, claims or investigations
2. 17Unexpected factors affecting self-insurance claims and reserve estimates could adversely affect us
3. 18Our operations could be negatively impacted by import tariffs and/or other government mandates
4. 19Our operations are subject to environmental laws and regulations that may increase costs, impact or limit business plans, or expose us to environmental liabilities
5. 20Our operations could be adversely impacted by severe weather events, including as a result of climate change
6. 21The insurance industry has been and may be adversely affected by severe weather events, which may impact availability of insurance coverage, insurance premiums and insurance policy terms
7. 22Changes in tax law may negatively affect our business

Human Capital Risks

1. 23Our operations may be negatively affected if we are unable to obtain, develop and retain key personnel and skilled labor forces
2. 24Increasing costs associated with health care plans may adversely affect our results of operations

Financial and Accounting Risks

1. 25Aggregate resource and reserve calculations are estimates and subject to uncertainty
2. 26Backlog may not accurately represent future revenue and gross margin
3. 27We operate in a capital-intensive industry and are subject to capital market and interest rate risks
4. 28We have two frozen defined benefit pension plans for certain current and former employees. Assumptions regarding future costs, returns on investments, interest rates and other actuarial assumptions have a significant impact on the funding requirements and expense recorded relating to these plans
5. 29We participate in MEPPs for employees represented by certain unions. We are required to make contributions to these plans in amounts established under numerous collective bargaining agreements between our operating subsidiaries and those unions
6. 30classified as being in one of these statuses are required to adopt Rehabilitation Plans or Funding Improvement Plans to improve their funded status through increased contributions, reduced benefits or a combination of the two
7. 31We have substantial indebtedness and may incur substantial additional indebtedness, which could adversely affect our business, profitability and our ability to meet obligations
8. 32Despite our current level of indebtedness, we may be able to incur substantially more debt, which could increase the risks to our financial condition described above
9. 33A lowering or withdrawal of the ratings, outlook or watch assigned to us or our debt by rating agencies may increase our future borrowing costs and reduce our access to capital
10. 34We have minimal history of operating as an independent, public company, and our historical financial information is not necessarily representative of the results that we would have achieved as a separate, publicly traded company and may not be a reliable indicator of our future results
11. 35United States federal income tax consequences may restrict our ability to engage in certain desirable strategic or capital-raising transactions after the Separation
12. 36We may not achieve some or all of the expected benefits of the Separation, and the Separation may materially and adversely affect our financial position, results of operations and cash flows
13. 37The trading market for our common stock has existed only a short period, and the market price and trading volume of our common stock may fluctuate significantly
14. 38If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business, our stock price and trading volume could decline
15. 39Our stockholders’ percentage ownership in our company may be diluted because of equity awards that have been and will be granted to our directors, officers and employees or otherwise as a result of equity issuances for acquisitions or capital market transactions
16. 40We cannot guarantee the timing, declaration, amount or payment of dividends, if any, on our common stock
17. 41Provisions in our amended and restated certificate of incorporation and amended and restated bylaws and Delaware law may prevent or delay an acquisition of Knife River, which could decrease the trading price of our common stock
18. 42We may not be able to fully realize the benefits from the Acquisition
19. 43The announcement and pendency of the Acquisition may have an adverse effect on our results of operations
20. 44Completion of the Acquisition is subject to conditions beyond our control that may prevent, delay or otherwise adversely affect its completion in a material way, including, but not limited to, those described herein
21. 45The incurrence by us of substantial indebtedness in connection with the financing of the Acquisition may have an adverse impact on our liquidity, limit our flexibility in responding to other business opportunities, and increase our vulnerability to adverse economic and industry conditions
22. 46We have incurred, and will continue to incur, transaction fees and costs in connection with the Acquisition