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Item 3 — Quantitative and Qualitative Disclosures About Market Risk
Knife River Corporation · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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We are exposed to the impact of market fluctuations associated with interest rates and commodity prices. We have policies and procedures to assist in controlling these market risks and from time to time have utilized derivatives to manage a portion of our risk.
Interest rate risk
As of June 30, 2026, we had $1.2 billion of outstanding borrowings under our Term Loan A, Term Loan B and revolving credit facility, which bear interest at a variable rate. As of June 30, 2026, the weighted-average rate in effect was 5.52 percent, therefore, a hypothetical increase of 1.00 percent to the interest rate at June 30, 2026, would increase the all-in rate to 6.52 percent, the effect of which would increase the Company's interest expense by $12.1 million over the next 12 months based on the balances outstanding for these borrowings as of June 30, 2026.
At June 30, 2026, we had no outstanding interest rate hedges.
Commodity price risk
There were no material changes to commodity price risk that we faced from those reported in the 2025 Annual Report.