Risk Factors Summary
The following is a summary of some of the material risks and uncertainties that could materially affect our business, financial condition and results of operations. You should read this summary together with the more detailed description of each risk factor described in Part I, Item 1A. Risk Factors of this 2025 Annual Report.
Operations, Growth and Competitive Risks
• We operate in a highly competitive industry.
• Our exposure to risk of loss resulting from the nonpayment and/or nonperformance by our customers and counterparties.
• Our failure to adequately recover on contract change orders or claims.
• Our operating results may vary significantly from period to period.
• Our lack of success at generating internal growth.
• Our inability to retain our current customers and obtain new customer contracts.
• The loss of, or reduction in business from, one or more significant customers.
• Our dependence upon fixed-price contracts.
• Generate a significant portion of our revenues from data center and other similar high tech and advanced technology contracts.
• Supply chain disruptions.
• Volatility in the prices or availability of certain materials and equipment used in our business and those of our customers, including as a result of inflation, geopolitical instability and protectionist trade measures.
• We may incur liabilities or suffer negative financial or reputational impacts relating to health and safety matters.
• Our insurance has limits and exclusions that may not fully indemnify us against certain claims or losses.
• A material portion of our business depends on our ability to provide surety bonds.
• Our exposure to warranty claims.
• Our pursuit of acquisitions and other strategic transactions.
• Our participation in joint ventures.
• Technology disruptions or cyberattacks.
• Artificial intelligence challenges.
• Our business is seasonal.
• The impact of severe weather events as a result of climate change or otherwise.
• Pandemics.
Economic, Financial and Accounting Risks
• Economic volatility.
• Our business is based in part on government-funded infrastructure projects and building activities, and any associated regulatory changes or requirements in these areas.
• Our financial results and projections are based upon estimates and assumptions that may cause our actual results to materially differ from such projections, which may adversely affect our future profitability, cash flows and stock price.
• We recognize revenues for the majority of construction projects based on estimates.
• Our backlog may not accurately represent future revenues.
• Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act (as defined below).
• That we are subject to capital market and interest rate risks.
• The debt obligations we incurred in connection with the Separation.
• Goodwill and identifiable intangible asset impairments.
Legal and Regulatory Risks
• Pending and/or future litigation, claims or investigations.
• Our failure to comply with requirements imposed by applicable law or other governmental regulations.
• Changes in tax law.
• Import tariffs and/or other government mandates.
• Our operations are subject to environmental laws and regulations.
Human Capital and Labor Risks
• Our inability to obtain, develop and retain key personnel and skilled labor forces.
• Our unionized workforce.
• Increasing costs associated with health care plans.
• Costs related to obligations under multiemployer pension plans.
Common Stock Risks
• The trading market of our common stock has existed only for a limited period of time following the Separation and Distribution, and our stock price and trading volume may fluctuate significantly.
iii
• If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business.
• Your percentage of ownership in us may be diluted in the future.
• Provisions in our certificate of incorporation and bylaws and Delaware law may prevent or delay an acquisition of us.
• Exclusive forum provisions in our certificate of incorporation and bylaws could discourage lawsuits against us and our directors and officers.
• Our inability to guarantee the timing, declaration, amount or payment of dividends, if any, on our common stock.
Separation and Distribution Risks
• Our limited 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.
• The failure of the Distribution (as defined below), together with certain related transactions, to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes.
• U.S. federal income tax consequences may restrict our ability to engage in certain desirable strategic or capital raising transactions after the Separation (as defined below).
• We may not enjoy the same benefits that we did as a segment of MDU Resources (as defined below).
• Our inability to achieve some or all of the expected benefits from the Separation.
• The failure by us or MDU Resources to perform under various transaction agreements that were executed as part of the Separation or that we may fail to have necessary systems and services in place when certain of the transaction agreements expire.
• Our inability to resolve favorably any disputes that arise between us and MDU Resources with respect to our past and ongoing relationships.
• The indemnification obligations related to the Separation.
• That certain members of management and directors hold our stock and stock in MDU Resources.
Part I.
Item 1. BUSINESS
References in this 2025 Annual Report to the “Company”,“Everus”, “we”, “us” or “our” refer to Everus Construction Group, Inc., a Delaware corporation, and its subsidiaries. References in this 2025 Annual Report to “MDU Resources” refer to MDU Resources Group, Inc., a Delaware corporation, and its subsidiaries (other than, after the Distribution, Everus and its subsidiaries), unless the context otherwise requires. References to Everus’ historical business and operations refer to the business and operations of Everus Construction, Inc. (formerly known as MDU Construction Services Group, Inc.) (“Everus Construction”) prior to the Separation and refer to Everus after the Separation.
The Separation
On November 2, 2023, MDU Resources announced its intent to pursue a tax-free spinoff of Everus Construction (formerly known as MDU Construction Services Group, Inc.) from MDU Resources (the “Separation”). Prior to the Separation, Everus Construction was the construction services segment of MDU Resources and operated as a wholly owned subsidiary of CEHI, LLC (“Centennial”), which is a wholly owned subsidiary of MDU Resources. In anticipation of the Separation, MDU Resources formed a new wholly owned subsidiary, Everus Construction Group, Inc., that became the new parent company of Everus Construction.
On October 31, 2024, MDU Resources completed the Separation by transferring Everus Construction, inclusive of all its assets and liabilities, to Everus and distributing 100% of Everus’ outstanding common stock to holders of record of MDU Resources’ common stock as of the close of business on October 21, 2024 (the “Distribution”). The Separation was completed as a generally tax-free spin-off for U.S. federal income tax purposes. Following the Separation and Distribution, Everus became an independent, publicly traded company and is listed on the New York Stock Exchange under the ticker symbol “ECG.”
Our Company
We are a leading construction solutions provider headquartered in Bismarck, North Dakota, offering specialty contracting services to a diverse set of end markets across the United States. We operate throughout most of the United States through two reportable, operating segments: Electrical & Mechanical (“E&M”) and Transmission & Distribution (“T&D”). We deliver services through our 15 wholly owned operating companies (the “Operating Companies”), which go to market under 19 local brands allowing us to differentiate the services we provide and geographical markets we serve. Our historical business was established in 1997 and we have expanded our capabilities significantly since then through targeted entry into new geographies and more than 25 acquisitions. Our size and scale continue to be reflected in our national rankings. We were ranked 12th on Engineering News-Record magazine’s 2025 Top 600 Specialty Contractors list and ranked 5th on Electrical Construction & Maintenance magazine’s 2025 Top 50 Electrical Contractors list. Additionally, according to Solar Power World, our operating brand Bombard Renewable Energy was among the top U.S. solar installation providers in 2025.
During 2025 and 2024, we served approximately 4,000 and 3,900 customers across more than 44,000 and 43,000 projects, respectively. As a result, the number of employees fluctuates at any given time depending on the number and scale of projects. We had approximately 10,000 employees at peak across all functions and sites in 2025, with approximately 9,400 employees as of December 31, 2025. For 2024, we had approximately 8,700 employees at peak across all functions and sites, with a similar workforce count as of December 31, 2024.
Our specialty contracting services across E&M and T&D are provided to customers in the commercial, industrial, institutional, renewables, service & other, transportation and utility end markets. We go to market through an operating model that aligns with our 4EVER Strategy—Employees, Value, Execution and Relationships. This focused strategy enhances the competitive position of our Operating Companies in their respective markets through local brand reputation and delivery, while providing corporate support across people, processes and systems to drive differentiated outcomes for our customers. Our full-service project approach emphasizes meticulous upfront planning, design-assist, construction and installation, supported by experienced project managers, foremen and a skilled workforce. With strong union relationships, a reliable labor source, and a flexible field delivery model, we adapt to project demands while maintaining safety, quality and successful execution. Our highly experienced management teams have significant experience in the industry and have transformed our business from a group of small, regional brands into a national service provider. With deep industry expertise and decades of collaboration, we regularly refine strategies, share best practices, and focus on customer relationships, safety and operational excellence.
Business Segments
Our E&M segment primarily serves general contractor and end-use customers, with demand driven by secular tailwinds for infrastructure development and maintenance in the commercial, industrial, institutional, renewables and service & other end markets. E&M offers a wide variety of specialty contracting services, including construction and maintenance of electrical and communication wiring, fire suppression systems, renewables infrastructure and mechanical piping and services, to customers in both the public and private sectors. Our work within the commercial end market leverages our deep expertise within the data center submarket, as well as hospitality and entertainment projects, in addition to more standard commercial projects. Our work within the industrial end market is driven by the need for high tech, manufacturing and industrial installations work, as well as renovations, upgrades and expansions. Within the institutional end market, work is driven by activity in the education, government and healthcare submarkets. Our service & other work is driven by smaller projects, which can be standalone engagements or recurring maintenance work. Within the renewables end market, we execute projects ranging in size from local electric vehicle charging stations to large-scale solar generation. As a result, E&M has a broad and diversified geographic presence, with a strong footprint across the United States. For 2025, E&M had approximately 7,900 employees at peak, with approximately 7,250 employees as of December 31, 2025, offices in 28 cities and a physical presence in 13 states. For 2024, E&M had approximately 6,700 employees at peak, with a similar workforce count as of December 31, 2024, offices in 24 cities and a physical presence in 13 states.
Our T&D segment primarily serves electric and natural gas utility customers, as well as customers in the transportation end market, in the Midwest and West regions of the United States. T&D specializes in transmission and distribution construction and offers a broad set of specialty contracting services, including the construction and maintenance of overhead and underground electrical, gas, communication infrastructure and transportation-related lighting. In addition to its specialty contracting services, T&D also manufactures, sells and rents overhead and underground line-stringing equipment and tools. This equipment-serving capability complements T&D’s projects of various size and scope, while providing customers with exceptional service and fast distribution and delivery. The T&D segment also provides solutions across excavation and underground boring, substations, signals and lighting, and emergency restoration. Demand for these services is driven by
increased utility spend on aging infrastructure, system hardening, grid reliability initiatives, natural disasters and other weather-related events. T&D has a significant geographical presence in Missouri, California, Montana and Oregon, in addition to equipment rental and manufacturing distribution centers in Arizona, Texas, Georgia, Illinois, Oregon and Ohio. For 2025, T&D had approximately 2,100 employees at peak in 2025, with approximately 2,050 employees as of December 31, 2025, offices in 19 cities and a physical presence in 11 states. For 2024, T&D had approximately 2,000 employees at peak in 2024, with approximately 1,900 employees as of December 31, 2024, offices in 19 cities and a physical presence in 11 states.
For 2025, E&M segment revenues generated approximately 77% of total contract revenues with 7.5% segment operating income margin, and T&D segment revenues generated approximately 23% of total contract revenues with 10.6% segment operating income margin. For 2024, E&M segment revenues generated approximately 71% of total contract revenues with 6.7% operating income margin, and T&D segment revenues generated approximately 29% of total contract revenues with 10.2% operating income margin.
We also allocate general corporate overhead costs that we chose not to allocate directly to E&M or T&D to Corporate and Other as these costs are not considered part of management’s evaluation of reportable segment operating performance. We also allocate costs related to certain assets not directly attributable to either E&M or T&D to Corporate and Other.
Industry
The U.S. construction services industry is highly fragmented. It includes a wide spectrum of players, from small, private companies whose activities are geographically concentrated, to larger public companies with nationwide capabilities. Competition within the industry is influenced by various elements such as technical expertise, service pricing, financial and operational resources, track record for safety, industry reputation and dependability.
The U.S. construction services industry serves a diverse customer base that includes federal, state and municipal governmental agencies, utilities, commercial and residential developers and private parties. The mix of customers varies by region and economic conditions.
The main factors and trends in the U.S. construction services industry include:
• Key economic factors. Many factors affect product demand, including public spending on infrastructure projects, data center capacity and load growth, general economic conditions, including population growth and employment levels, imposed and proposed tariffs, and prevailing interest rates.
• Inflation. Rising inflation can increase the cost of construction materials, labor and insurance premiums, impacting project budgets and profitability.
• Industry fragmentation. There are thousands of construction services providers of varying scope and size. Market participants may enter new geographies or expand existing positions through organic growth or the acquisition of existing providers.
• Seasonality. Activity in certain areas is seasonal due to the effects of weather, which can impact safety and efficiency of operations and lead to demand for services.
• Cyclicality. The demand for construction services is significantly influenced by the cyclical nature of the economy.
• Regulations. Operations are subject to extensive laws and regulations relating to the maintenance of safe conditions in the workplace.
• Production inputs. Cost of labor, equipment and other inputs can vary over time based on macroeconomic factors and impact profitability of operations.
• Personnel. Ability to maintain productivity and operating performance is heavily dependent on the ability to employ, train and retain qualified personnel necessary to operate efficiently.
Everus participates in the following primary markets: E&M and T&D.
Electrical & Mechanical
E&M services are broadly categorized as electrical construction and contracting, mechanical contracting and fire protection turnkey solutions. Broad service offerings include low voltage services, renewable installations, packaged controls and manufacturing. These services are critical in supporting safe, reliable and timely construction across a variety of commercial, institutional and industrial structures. E&M services span a variety of markets, including commercial, industrial, institutional, service and renewables, among others.
The growth in the E&M construction services industry can be attributed to several different factors such as (i) the increased intricacy and sophistication of E&M systems due to the adoption of artificial intelligence, automation and controls, cloud computing and data storage, (ii) the increased government support for manufacturing, high tech, infrastructure and reshoring, (iii) population growth, (iv) an aging base of existing buildings and equipment and (v) the ongoing energy transition and expansion that has resulted from a growing emphasis on sustainability across the country. In addition, the key drivers of potential future E&M market growth include:
• Mission critical technologies. Global trends toward digitalization and increasing demand for capacity to support new artificial intelligence technologies are expected to drive near- and long-term activity across the semiconductor and data center markets.
• Manufacturing and infrastructure. The institutional and industrial industries have continued to see growth and investments in the need for new and/or upgraded infrastructure and equipment and increased support for manufacturing, high tech and reshoring. These trends are expected to continue and provide near- and long-term activity.
• Hospitality. The hospitality industry has seen recent growth due to a rise in domestic travel following the COVID-19 period, return-to-office and business travel, an increase in local vacations, and higher disposable incomes, all of which are renewing demand for the hospitality construction market.
• Health care. Technological innovation and new regulatory requirements are driving heightened investment in and upgrades to critical life and health systems.
• Renewables. Several consumer and regulatory tailwinds are driving activity in this end market, including federal investment credits and rebates for solar energy, electric vehicle adoption and new regulations, which are collectively increasing the need for sufficient infrastructure to support renewable energy sources.
Transmission & Distribution
T&D services primarily consist of installation and maintenance services for electrical transmission and distribution infrastructure, which consists of transmission lines, distribution lines, substations, towers, poles and other essential equipment that enable the transfer and delivery of power from generators to customers. T&D construction services are critical in building and maintaining the infrastructure necessary for utilities to transmit and distribute electricity from the generation source to end residential, commercial and industrial customers. The T&D services industry also provides emergency restoration services in response to wildfires and other natural disasters, as well as the installation and maintenance of gas and communication infrastructure. Moreover, T&D construction services are essential to mitigating health and safety concerns in the operation of electrical infrastructure, which helps preserve the consistent and durable demand for such services. T&D services span a variety of markets, including electric and natural gas utilities, communications, and transportation, among others.
Growth in the T&D industry is primarily driven by electric utilities that continue to invest heavily in new capital project and maintenance programs. This increased capital expenditure spend, as well as the continued outsourcing of transmission and distribution services, benefits from a number of factors such as (i) grid modernization, (ii) build out of additional renewable power sources, (iii) rate case dynamics and (iv) increased government support and spending on infrastructure. In addition, key drivers of potential future T&D market growth include:
• Utilities. Underlying utility spend is expected to grow in the near- and long-term at rates similar to historical growth rates, driven by aging infrastructure and required replacement, system upgrades and grid hardening.
• Excavation/underground. Underground excavation is becoming more attractive given advancements in the way construction work is completed. Increased regulatory scrutiny also has resulted in a shift toward placing utilities underground to protect against unfavorable environmental impacts.
• Communications. Renewal and development of communications infrastructure is increasing to support growing data consumption and new methods of transmission and technology advancement. The infrastructure modernization is bolstered by industry tailwinds from the investment of large, well-capitalized national companies and government policies.
Customers
Our business model fosters strong, close-knit relationships with local contractors and end customers. In 2025, we served approximately 4,000 customers across more than 44,000 projects, with the top 10 customers contributing approximately 43% of our total operating revenues of $3.75 billion, with a single customer accounting for approximately 17% of total operating revenues. At the segment level, revenue from two E&M customers individually accounted for approximately 21% and 10% of total E&M segment revenues, respectively. As for T&D, revenues from a single T&D customer accounted for approximately 16% of total T&D segment revenues.
In 2024, we served approximately 3,900 customers across more than 43,000 projects, with the top 10 customers contributing approximately 33% of our total operating revenues of $2.85 billion, but no single customer accounted for more than 10% individually. However, at the segment level, no single customer accounted for more than 10% of total E&M segment revenues, but revenues from a single customer accounted for approximately 17% of total T&D segment revenues.
We have long-standing relationships with many of our customers, serving as a testament to our customer-oriented culture and history of operational excellence. Our customer base is diverse and ranges from large technology companies to utility providers and local municipalities. Contracts with these various types of customers generally are awarded in the form of a competitive or negotiated bid or master service agreement (“MSA”) arrangement. A significant amount of the work we complete is competitively awarded by evaluating non-price items, such as our pre-construction and design-assist services, and our safety record. We develop strong working relationships by delivering on the key criteria that our larger customers seek, namely scale, professionalism, safety and timely project execution. Moreover, our corporate leadership allows us to strengthen local relationships, while fortifying our reputation of safety and project execution excellence, driving repeat opportunities with our best customers.
Materials and Equipment
Our operations and customers depend on the availability of certain raw materials and components for construction, including, among other things, electrical fixtures, system components, copper, aluminum, steel, and certain plastics. These raw materials and components are generally available from a variety of domestic suppliers at competitive prices.
Under some of our projects, customers will provide the necessary materials and supplies for projects and we are responsible for the installation of, but not the cost or warranty of, those materials. Under certain other projects, we are responsible for purchasing the necessary materials and supplies on behalf of our customers. We are not dependent on any one vendor for project-related materials or supplies required for the projects we manage.
However, supply chain interruptions have become increasingly common. Although supply of most raw materials continued to normalize during fiscal year 2025, we continue to experience longer lead times in sourcing certain components. Such delays may lead to project inefficiencies resulting from schedule extensions. We are also exposed to increases in the prices of certain commodities due to inflation, imposed and proposed tariffs, or other economic factors. Our strategy to reduce commodity cost exposure includes early buying of commodities for particular projects or general inventory, as well as including escalation and escape provisions in project bids, quotes and contracts wherever possible. However, such protections are not included in every contract or project, and in such cases, we may not be fully reimbursed for increases in commodity prices by our customers and may be exposed to commodity price volatility on longer-term projects where we have prepaid for commodities.
See Item 1A. Risk Factors for more discussion on risks we face relating to supply chain disruptions and commodity price risk, including imposed and proposed tariffs, that could have an adverse impact on our business, financial condition and results of operations.
Seasonality
Adverse weather conditions pose potential challenges and opportunities to our operations, particularly in our T&D segment. Seasonal variation impacts safety and efficiency in certain U.S. regions, which affects our ability to provide construction services and consequently affects our revenues and profitability. Our T&D operations can be delayed due to severe weather conditions, especially in the winter months, and can be impacted by customer restrictions limiting our ability to perform our service work when electrical demands are high, especially in the summer months, depending on location. Despite
these potential challenges, our national footprint and service mix ensures exposure to a diverse set of geographies, climates and project work, mitigating the seasonality risk while providing opportunities across the United States.
Competition
We operate in a highly competitive business environment, which includes large public companies and many small privately held companies. In addition to competition from smaller independent operators, we face competition from large, publicly traded U.S. construction services companies, including Comfort Systems USA, Inc., EMCOR Group, Inc., IES Holdings, Inc., MasTec, Inc., MYR Group Inc., Primoris Services Corporation, Quanta Services, Inc. and Sterling Infrastructure, Inc., as well as large, private U.S. construction services companies, including M.C. Dean, Inc., Rosendin Electric, Pike Corporation and Archkey Solutions. The nature of our competition varies among geographies due to the generally local and regional nature of our services.
Competition is based primarily on price, reputation for quality, safety and reliability. The size and location of the services provided, as well as the state of the economy, are factors in the number of competitors that we will encounter on any particular project. We believe that our service offering, diversification and geographic footprint in the United States, along with the quality and management of our workforce, enable us to effectively operate in this competitive environment.
Bidding Arrangements and Contract Types
We win most of our projects through competitive bids or by negotiation. When competing for business, several factors are evaluated in determining the bid price for contract work. These include, but are not limited to, the complexities of the job, past history performing similar types of work, seasonal weather patterns, competition and market conditions, job site conditions, workforce safety, reputation of the project owner, availability of labor, materials and fuel, project location and project completion dates. If awarded a project, we generally enter into a contract with the customer that defines the scope of the project, responsibility, payment structure and schedule. While there is significant variation in specific contract terms, most contracts are structured as:
• Fixed-Price Contracts. Defined scope of work for a fixed amount.
• Cost-Reimbursable Contracts. Defined scope of work for the cost of the project plus a negotiated gross margin.
• Unit-Price Contracts. Defined scope of work for each unit for a fixed amount per unit.
For 2025, fixed-price contracts accounted for approximately 52% of total contract revenues, including 53% of E&M contract revenues and 52% of T&D contract revenues. Cost-reimbursable contracts accounted for approximately 43% of total contract revenues, including 46% of E&M contract revenues and 30% of T&D contract revenues. Unit-price contracts accounted for approximately 5% of total contract revenues, including 1% of E&M contract revenues and 18% of T&D contract revenues.
As for 2024, fixed-price contracts accounted for approximately 59% of total contract revenues, including 64% of E&M contract revenues and 46% of T&D contract revenues. Cost-reimbursable contracts accounted for approximately 34% of total contract revenues, including 33% of E&M contract revenues and 35% of T&D contract revenues. Unit-price contracts accounted for approximately 7% of total revenues, including 3% of E&M contract revenues and 19% of T&D contract revenues.
We have a broad portfolio of long-term MSAs within the T&D business, and the work performed pursuant to these agreements generally is priced on a unit-price basis. Our agreements often also cover preventive maintenance and as-needed emergency outage work.
Backlog
Backlog is a common measurement in the construction services industry. Our determination of backlog 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 conditions, and change orders or claims to the extent management believes additional contract revenues will be earned and are deemed probable of collection. Contracts are subject to delays, defaults or cancellations; changes in scope of services to be provided; and adjustments to costs. For further information on backlog, refer to Item 7. Management’s Discussion and Analysis of Financial Condition contained elsewhere in this 2025 Annual Report.
Risk Management
Insurance
Prior to the Separation, we historically benefited from coverages under certain corporate level insurance policies held by MDU Resources, including MDU Resources captive insurance program. The Separation and Distribution agreement provides for the allocation between the parties of rights and obligations under existing insurance policies with respect to claims covered by MDU Resources’ insurance prior to the Distribution and sets forth procedures for the administration of insured claims and related matters.
Following the Separation, we maintain our own standalone insurance coverages that we believe are appropriate for our business, including but not limited to: workers’ compensation, auto liability, general liability, excess liability, contractors pollution liability, legal liability, professional liability, directors and officers liability, employment practices liability, cyber insurance, terrorism insurance and property insurance.
Additionally, we have our own captive insurance arrangement, whereby we manage and maintain a portion of our casualty and operational risk, which reimburses our claims up to the amount of the applicable deductibles of certain third-party insurance program policies, as well as with respect to certain other amounts. In connection with the Separation, MDU Resources transferred assets and liabilities to us that represented our portion of the MDU Resources insurance captive program.
Bonding
In the normal course of business, we are required to post surety bonds or present other means of financial assurance for certain public and private sector contracts to secure contractual performance. Our comprehensive surety bonding program includes:
• Performance Bond. Ensures completion of the contract according to its terms, including price and time.
• Bid Bond. Guarantees commitment to a bid and execution of all contract documents if awarded.
• Payment Bond. Ensures payments to all subcontractors and suppliers.
• License Bond. Protects governments and consumers from fraudulent practices.
• Wage, Welfare and/or Fringe Bond. Ensures coverage of wages, welfare and/or fringe benefits.
As of December 31, 2025 and 2024, we had approximately $2.10 billion and $2.05 billion in surety bonds outstanding, respectively. As of December 31, 2025 and 2024, approximately $1.66 billion and $1.75 billion of bonding was posted for E&M, respectively, and approximately $410.0 million and $296.3 million of bonding was posted for T&D, respectively. In addition, approximately $27.9 million and $8.2 million of bonding was posted for Corporate and other as of December 31, 2025 and 2024, respectively. Of the $27.9 million of bonding posted for Corporate and Other, $18.1 million was surety-backed standby letters of credit (“SBLOC”) that were issued during the fourth quarter of 2025.
A large portion of our existing surety bonds are expected to expire within the next 12 months; however, we will likely continue to rely on surety bonds in the future and seek to maintain the level of bonding capacity necessary to support our operations.
Regulatory and Environmental Matters
Our operations are subject to various federal, state and local laws and regulations, including, but not limited to:
• licensing, permitting, and inspection requirements applicable to construction projects, contractors, electricians, and engineers;
• worker safety regulations, including those established by the Occupational Safety and Health Administration (“OSHA”);
• environmental protection regulations, including those established by the Environmental Protection Agency and state agencies;
• building and electrical codes;
• wage and hour regulations, including those associated with collective bargaining agreements and our unionized workforce;
• transportation regulations, including licensing and permitting requirements for equipment and materials;
• anti-corruption regulations applicable in the United States;
• immigration regulations applicable in the United States;
• special bidding, procurement, and other requirements on government projects;
• regulations regarding engagement of suppliers and subcontractors that meet diversity-ownership or disadvantaged-business requirements.
We believe that we have all of the licenses and permits required to conduct our operations and that we are in substantial compliance with applicable regulatory requirements.
Our operations are subject to a wide range of federal, state and local laws and regulations that govern environmental protection, worker safety, licensing, and data security. Environmental laws regulate the handling, transportation, and disposal of hazardous and non-hazardous substances, as well as emissions into air, water, and soil. Compliance with worker safety standards, including those established by OSHA, as well as permitting, inspection, and licensing requirements for construction and mechanical services, is integral to our operations. We also adhere to regulations aimed at protecting personal and business data, requiring ongoing investments in cybersecurity and privacy safeguards.
Failure to comply with these regulations could result in substantial fines, project delays, or the revocation of operating licenses, potentially affecting ongoing operations and future opportunities. Environmental regulations, in particular, impose cleanup liabilities and may necessitate substantial investments in compliance programs to meet new standards for emissions and sustainability. Similarly, complex requirements for data protection, wage regulations and collective bargaining agreements add to the compliance landscape, requiring constant oversight and proactive adaptation.
Regulatory initiatives supporting renewable energy, infrastructure investment and clean energy technologies are expected to drive demand for our services in the long term. By maintaining robust compliance programs and continually monitoring regulatory changes, we believe we are well-positioned to address these challenges and capitalize on new opportunities as they arise. For further information regarding the effects of regulation on our business, refer to Item 1A. Risk Factors contained elsewhere in this 2025 Annual Report.
We incorporate climate-related risks and opportunities into our long-term strategic planning and enterprise risk management processes. Although the overall effects on our operations are still evolving, various dimensions of climate change, along with societal and market concerns about its future impacts, have created and are expected to continue creating both opportunities and challenges for our operations. These arise from physical risks associated with climate change, as well as advances in technology, shifts in market conditions, and increased regulatory and compliance expenses.
Climate change may contribute to rising temperatures, higher sea levels, and alterations to meteorological and hydrological patterns. It has also affected the frequency and severity of events such as wildfires, hurricanes, floods, droughts, winter storms, and other extreme weather events or natural disasters. For additional information, refer to Item 1A. Risk Factors contained elsewhere in this 2025 Annual Report.
Intellectual Property
We hold various trademarks that support the operations of our business, including our advertising and marketing activities, which are generally protected by registration in the United States.
Human Capital Resources
Employees
Our number of employees fluctuates at any given time depending on the number and scale of projects. We had approximately 10,000 employees at peak across all functions and sites in 2025, with approximately 9,400 employees as of December 31, 2025. In 2024, we had approximately 8,700 employees at peak across all functions and sites, with a similar workforce count as of December 31, 2024. The Operating Companies are responsible for sourcing local labor, while corporate oversight ensures appropriate staffing and on-site project leadership structures.
We maintain strong relationships with various local unions, including the International Brotherhood of Electric Workers, across our sites. As of December 31, 2025 and 2024, approximately 85% and 83% of our employees were represented by labor unions, respectively. Our large, unionized workforce provides flexibility to scale both up and down with projects as needed.
Employee Compensation and Benefits
Our compensation programs are generally designed to recruit, motivate, reward, and retain employees and align employee compensation with market practices and our performance by providing the proper incentives to reflect as such. Our compensation programs consist of both fixed and variable pay components, with an emphasis on pay for performance for our executive officers and other senior leadership.
In addition to the compensation programs, we also provide additional benefits to our employees, including health, welfare and benefit plans for employees who are not covered by collective bargaining agreements through the unions. We maintain a 401(k) plan in which eligible employees who are not provided retirement benefits through a collective bargaining agreement may participate and make contributions through payroll deductions. We have a matching contribution policy up to a defined maximum percentage.
Employee Development, Training and Safety
People are at the core of our business, and our culture encourages everyone to lead with integrity and take responsibility for ensuring a safe work environment. We offer a variety of training and development opportunities to encourage growth within the organization. Effective training is integral to employee development and is a top priority, with a specific focus on a safety-first culture and values of integrity and ethical leadership across all levels of the organization. We conduct classes as well as hands-on training to develop our employees’ skills and capabilities and utilize safety compliance metrics in employee evaluations. Our close relationship with unions also allows us to deliver effective training programs and continuous education.
Employee Code of Conduct and Ethics Code - Leading With Integrity Guide
All of our employees are subject to our code of conduct and ethics, which we refer to as the Leading With Integrity Guide, which addresses compliance with applicable laws and our policies concerning general business ethics, anti-corruption and bribery, conflicts of interest, competition, harassment and discrimination, data privacy and security, among other things. Training with respect to our Leading With Integrity Guide and other policies and procedures are conducted as part of our extensive ethics and compliance training program. The Leading With Integrity Guide provides employees, as well as third parties, the resources and confidential processes in place to detect, prevent and report illegal and/or unethical conduct.
Available Information
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and other Securities and Commission (the “SEC”) filings, as well as any amendments to applicable filings filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge at www.everus.com as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Copies of any materials we file with the SEC can be obtained free of charge at www.sec.gov . The foregoing website addresses are provided as inactive textual references only. The information provided on our website (or any other website referred to in this 2025 Annual Report) is not part of this 2025 Annual Report and is not incorporated by reference as part of this 2025 Annual Report.
Item 1A. RISK FACTORS
Our business and financial results are subject to a number of risks and uncertainties. The risk factors and other matters discussed herein are important factors that could cause our actual results or outcomes to differ materially from those discussed in the forward-looking statements included elsewhere in this 2025 Annual Report. If any of the risks described below actually occur, our business, prospects, financial condition or financial results could be materially impacted. The following are the most material risk factors applicable to our business and are not necessarily listed in order of importance or probability of occurrence. You should carefully consider the following risks and other information in this 2025 Annual Report in evaluating our business and common stock.
Operations, Growth and Competitive Risks
We operate in a highly competitive industry.
Our business is subject to competition. The markets we serve are highly fragmented and we compete with a number of regional, national and international companies. These companies may have greater financial and other resources than us. Certain other companies may be smaller and more specialized and may concentrate their resources in particular areas of expertise. Our results are also affected by the number of competitors in a market, the demand for services in a particular market, the pricing practices of other competitors and the entry of new competitors in a market.
In addition, construction services are marketed under highly competitive conditions and are subject to competitive forces such as price, quality, safety and reliability. Significant competition could lead to lower prices, higher wages, lower sales volumes and higher costs. Our customers make competitive determinations based upon qualifications, experience, performance, reputation, technology, customer relationships, price, quality and ability to provide the relevant services in a timely, safe and cost-efficient manner. Increased competition may result in our inability to win bids for future projects and our failure to effectively compete could negatively affect our results of operations, financial position and cash flows. Furthermore, new acquisition opportunities are subject to competitive bidding environments, which may impact prices we must pay to successfully procure new properties and acquisition opportunities to grow our business.
We are exposed to risk of loss resulting from the nonpayment and/or nonperformance by our customers and counterparties.
Our clients include public and private entities that have been, and may continue to be, negatively impacted by the changing landscape in the global economy. A recessionary construction economy can increase the likelihood that we will not be able to collect on all accounts receivable or may experience a delay in payment from some customers. If our customers or counterparties experience financial difficulties, which has occurred and may recur, we could experience difficulty in collecting receivables.
We face collection risk as a normal part of business where we perform services and subsequently bill clients for such services. In the event that we have concentrated credit risk from clients in a specific geographic area or industry, continuing negative trends or a worsening in financial conditions in that specific geographic area or industry could make us susceptible to disproportionately high levels of default. Nonpayment and/or nonperformance by our customers and counterparties could have a negative impact on our results of operations and cash flows.
We may fail to adequately recover on contract change orders or claims which could negatively affect our business.
From time to time, we may pursue claims against customers to recover costs incurred on a project in excess of the original contract amount. These additional costs may be incurred in connection with project delays including other trades, or changes in project scope or specifications. While we generally negotiate with the customer for additional compensation, we may be unable to obtain, through negotiation, arbitration, litigation or otherwise, adequate compensation for the additional work performed or expenses incurred. These claims can be the subject of lengthy and costly legal proceedings, making it often difficult to accurately predict when these claims will be fully resolved. When these types of events occur and unresolved claims are pending, we may invest significant working capital pending the resolution of the relevant claims. When appropriate, we establish provisions possible exposures and adjust these provisions from time to time, but assumptions and estimates related to these exposures might prove to be or . to recover, or to recover in a timely manner, on these could have a material effect on our liquidity and financial results.
Operating results may vary significantly from period to period.
Demand for our services has been, and will likely continue to be, cyclical in nature and vulnerable to downturns in the general economy, as well as in the construction industry. Large construction projects often involve extended timelines and are subject to delays, cancellations, or reduced activity during economic downturns, further amplifying risks to our revenues and profitability. General concerns about the fundamental soundness of the economy may cause customers to defer projects, even if they have credit available to them. Prolonged uncertainties in the capital markets, or the returns of constrained capital market conditions, could have adverse effects on our customers, which would adversely affect our financial condition and results of operations.
We may be unsuccessful at generating internal growth, which could adversely affect operations.
Our ability to generate internal growth may be affected by, among other factors, our ability to:
• attract new customers;
• successfully bid for new projects;
• increase the number of projects performed for existing customers;
• expand geographically;
• adapt the range of services we offer to address customers’ evolving construction needs;
• secure appropriate levels of construction equipment; and
• hire and retain qualified personnel.
In addition, our customers may reduce the number or size of projects available to us due to their inability to obtain capital. Customers may also reduce projects in response to economic conditions. Many of the factors affecting our ability to generate internal growth may be beyond our control, and we cannot be certain that strategic initiatives will be successful or that we will be able to generate cash flow sufficient to fund operations and to support internal growth. If efforts are unsuccessful, we may not be able to achieve internal growth, expand operations or grow our business.
Our operations may be negatively affected if we are unable to retain our current customers and obtain new customer contracts.
The number of construction contracts we enter into is dependent on the level and timing of maintenance and construction programs undertaken by our customers. Utilities and independent contractors represent our largest customer base. Accordingly, utility and subcontract work accounts for a significant portion of the work performed by us. Most of our work is obtained on the basis of competitive bids or by negotiation of either cost-reimbursable or fixed-price contracts, and we benefit from repeat customers and strive to maintain successful long-term relationships with our customers.
The loss of, or reduction in business from, one or more significant customers could have a material adverse effect on our business.
For 2025, our customer base was reasonably concentrated, with the top 10 customers accounting for approximately 43% of our total operating revenues of $3.75 billion, with a single customer accounting for approximately 17% of total operating revenues. At the segment level, revenue from two E&M customers individually accounted for approximately 21% and 10% of total E&M segment revenues, respectively. As for T&D, revenues from a single T&D customer accounted for approximately 16% of total T&D segment revenues.
For 2024, our customer base was reasonably concentrated, with the top 10 customers accounting for approximately 33% of total operating revenues of $2.85 billion, but no single customer accounting for more than 10% individually. However, at the segment level, no single customer accounted for more than 10% of total E&M segment revenues, but revenues from a single customer accounted for approximately 17% of total T&D segment revenues.
One or more of our significant customers may unilaterally reduce or discontinue business at any time or merge or be acquired by a company that decides to reduce or discontinue business with us. We cannot assure: (i) the replacement of completed, delayed, cancelled or reduced orders with new business; (ii) that our current customers will continue to utilize our services consistent with historical volumes or at all; and/or (iii) that our customers will renew their long-term manufacturing or services contracts with us on acceptable terms or at all. In addition, one or more significant customers may also encounter financial constraints, file for bankruptcy protection or cease operations, any of which could also result in reduced or
discontinued business with us. The loss of business from one or more significant customers could have a material adverse effect on our business, financial condition, results of operations and cash flows. For more information, refer to Note 12 – Business Segment Data in the consolidated financial statements contained elsewhere in this 2025 Annual Report.
We currently generate, and expect to continue to generate, a significant portion of our revenues from fixed-price contracts. Our dependence upon fixed-price contracts could adversely affect our business, financial position, results of operations, and cash flows.
We must estimate the total costs of a particular project to bid for fixed-price contracts. Cost and scheduling estimates are based on a number of assumptions, including those about future economic conditions, commodity and other materials pricing, cost and availability of labor, equipment and materials, and supply chain efficiency, among other factors. The actual cost of labor and materials, however, may vary from the costs we originally estimated, something which we have experienced and may continue to experience due to inflationary pressures, supply chain challenges, imposed tariffs and rising interest rates. These variations, along with other risks, inherent in the execution of projects subject to fixed-price contracts, may cause actual gross profit from projects to differ from those we originally estimated and could result in reduced profitability or losses on projects. Depending upon the size of a particular project, variations from the estimated contract costs can have a significant impact on our operating results for any fiscal quarter or year. All of these impacts could have an adverse effect on our business, financial position, results of operations, and cash flows.
We currently generate, and expect to continue to generate, at least in the short-term, a significant portion of our revenues from data center and other similar high tech and advanced technology contracts. The loss of, or reduction in business from, these types of contracts could have a material adverse effect on our business.
We currently generate a significant portion of our revenues from data center and other similar high tech and advanced technology contracts and our revenue mix has changed significantly in the last couple of years. Data center capacity and load growth, as well as other advanced technology growth, creates tremendous opportunities, but also presents risks and challenges for us and our customers. These types of projects generally require continuous, adequate power sources, transmission capacity and permitting obligations in some cases. With the rise in power generation required by these type of projects, it does however create some uncertainties surrounding the longevity of this type of work and if it will be sustained in the future. While we believe there is still strong demand for these types of projects in the foreseeable future, we cannot guarantee that will be the case. The loss of, or reduction in business from, these types of contracts could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Supply chain disruptions may adversely affect our operations.
At times or in certain markets, we rely on third-party vendors and manufacturers to supply or transport many of the materials necessary for our operations. Disruptions, shortages or delays in the transportation of materials, price increases from suppliers or manufacturers, or inability to source needed materials have occurred and may continue to occur, which could adversely affect our results of operations, financial condition, cash flows and harm customer relationships. Any material disruption at our facilities or those of our customers or suppliers or otherwise within our supply chain, whether as a result of downtime, pandemic-related shutdowns, work stoppages or facility damage could prevent us from meeting customer demands or expected timelines, require us to incur unplanned capital expenditures, or cause other material disruptions to our operations, any of which could have a material effect on our operations, financial position and cash flows. Further, supply chain can occur from events out of our control such as fires, floods, weather including wildfires and hurricanes, natural , environmental or other .
Volatility in the prices or availability of certain materials and equipment used in our business and those of our customers, including as a result of inflation, geopolitical instability, and protectionist trade measures, could adversely affect our business, financial position, results of operations, and cash flows.
We are exposed to market risk of increases in certain commodity prices of materials, which are used as components of supplies or materials in our operations. We are also exposed to increases in energy prices. While we believe we can increase our prices to adjust for some price increases in commodities, there can be no assurance that price increases of commodities, if they were to occur, would be recoverable.
Further, the timing of our price increases may lag behind the timing of the underlying increases in commodity or material prices. Even if we are able to raise the prices of our products, consumers might react negatively to such price increases, which could have a material adverse effect on, among other things, our brands, reputation, and sales. If our competitors substantially lower their prices, we may lose customers and mark down prices. Our profitability may be impacted by lower prices, which may negatively impact gross profit and gross margin.
Additionally, our fixed-price contracts generally do not allow us to adjust our prices and, as a result, increases in material or fuel costs could reduce our profitability with respect to projects in progress. For example, in recent years, we have experienced supply chain delays, including long lead times for certain materials and equipment, as well as an escalation in material and fuel prices, to varying degrees. These disruptions resulted in declines in gross profit and gross margin for certain of our operations. Fluctuations in the price of energy and commodity materials, whether resulting from fluctuations in market supply or demand, geopolitical conditions, including supply chain disruptions and sanctions as a result of foreign wars or conflicts and recent shipping lane disruptions, an increase in trade protection measures such as tariffs, or the disruption, modification, or cancellation of multilateral trade agreements, may adversely affect our customers and as a result cause them to the use of our services.
On the other hand, because certain of our service offerings are designed to improve energy efficiency in our clients’ operations, or to assist in the generation of new sources of renewable energy, such as wind, solar, and geothermal generation, decreases in the costs of traditional energy sources such as oil and natural gas, including as a result of recessionary pressure and reduced demand, may lower our customers’ demand for efficiency improvements and alternative energy sources.
Furthermore, our workforce and equipment are highly mobile and service large geographic areas. Movement of our workforce and equipment within our market area could be negatively impacted by rising fuel costs, third-party freight rate increases and shortages of third-party truck drivers, among other things. We seek to mitigate some or all cost increases through including labor rate changes in project bids, securing material and subcontractor pricing in the project bids and maintaining positive relationships with numerous suppliers, but we may not be successful in our efforts to do so. All of these impacts could have an adverse effect on our business, financial position, results of operations, and cash flows.
We may incur liabilities or suffer negative financial or reputational impacts relating to health and safety matters.
Our operations are inherently hazardous and subject to extensive laws and regulations relating to the maintenance of safe conditions in the workplace. Our business is subject to numerous safety risks, including electrocutions, fires, explosions, mechanical failures, weather-related incidents, transportation accidents and damage to equipment. While we have invested, and will continue to invest, substantial resources in occupational health and safety programs, the construction services industry involves a high degree of operational risk, and there can be no assurance that we will avoid significant liability exposure. We have suffered serious accidents, including fatalities, and anticipate that operations may result in additional serious accidents in the future. As a result of these potential safety and health risks, we could be subject to substantial penalties, revocation of operating licenses, or civil , including for bodily or of life, which could materially and affect our financial condition, results of operations or cash flows, as our insurance does not cover all types or amounts of liabilities. In addition, if our safety record were to substantially or substantial or for of health and safety regulations, customers could contracts and elect to procure future services from other providers. work sites also have the potential to increase employee turnover, increase the costs of projects for clients, and raise operating costs. Any of the foregoing could result in financial or reputational , which could have a material impact on our business, financial condition, results of operations and cash flows.
Our insurance has limits and exclusions that may not fully indemnify us against certain claims or losses, including claims resulting from wildfires or other natural disasters and an increase in cost, or the unavailability or cancellation of third-party insurance coverages would increase our overall risk exposure and subject us to increased liabilities that could negatively affect our business, financial condition, results of operations and cash flows.
We maintain insurance coverages from third-party insurers as part of our overall risk management strategy and most of our customer contracts require us to maintain specific insurance coverage limits. We maintain insurance policies with respect to workers’ compensation, auto liability, general liability, excess liability, contractors pollution liability, legal liability, professional liability, directors and officers liability, employment practices liability, cyber insurance, terrorism insurance, property insurance and other types of coverages. These policies are subject to deductibles, with certain policies subject to self-insured limits through our captive insurance arrangement.
Insurance losses are accrued based upon our estimates of the ultimate liability for claims reported and an estimate of claims incurred but not yet reported. Insurance liabilities are difficult to assess and estimate due to unknown factors, including the frequency and severity of injuries, the magnitude of damage to or loss of property or the environment, the determination of our liability in proportion to other parties, estimates of incidents not reported and the effectiveness of our safety programs, and as a result, our actual losses may exceed our estimates. There can be no assurance that our current or past insurance coverages will be sufficient or effective under all circumstances or against all claims and liabilities to which we may be subject.
We generally renew our insurance policies on an annual basis; therefore, deductibles and levels of insurance coverages may change in future periods. There can be no assurance that any of our existing insurance coverages will be renewed upon the expiration of the coverage period or that future coverage will be available at reasonable and competitive rates or at the required limits. The cost of our insurance has increased over time, which was experienced during our most recent renewal process, and we expect it will continue to increase in the future. In addition, insurers may fail, cancel our coverage, increase the cost of coverage, determine to exclude certain items from coverage, or otherwise be unable to provide us with adequate insurance coverage.
We may not be able to obtain certain types of insurance or incremental levels of insurance in scope or amounts sufficient to cover liabilities we may incur. For example, due to the increase in wildfire losses and related insurance claims, insurers have reduced coverage availability and increased the cost of insurance coverage for such events in recent years, and our current levels of coverage may not be sufficient to cover potential losses. If our risk exposure increases as a result of adverse changes in our insurance coverage, we could be subject to increased liabilities that could negatively affect our business, financial condition, results of operations and cash flows.
In addition, we perform work in hazardous environments and our employees are exposed to a number of hazards. In locations or environments where claims have become more frequent or severe in recent years, insurance may become difficult or impossible to obtain. Our contracts may require us to indemnify our customers, project owners and other parties for injury, damage or loss arising out of our presence at its customers’ location, or in the performance of our work, in both cases regardless of fault. Our contracts may also require warranties for materials and workmanship.
Our contracts may also require us to name the customer and others as an additional insured party under our insurance policies. We maintain limited insurance coverage against these and other risks associated with our business. This insurance may not protect us against liability for certain events, and we cannot guarantee that our insurance will be adequate in risk coverage or policy limits to cover all losses or liabilities that we may incur. Any future damages caused by our services that are not covered by insurance or are in excess of policy limits could negatively affect our business, financial condition, results of operations and cash flows.
A material portion of our business depends on our ability to provide surety bonds.
We may be unable to compete for or work on certain projects if we are not able to obtain the necessary surety bonds. Our construction contracts frequently require that we obtain from surety companies, and provide to our customers, payment and performance bonds as a condition to the award of such contracts to secure our payment and performance obligations. Under standard terms in the surety market, surety companies issue bonds on a project-by-project basis and can decline to issue bonds at any time or require the posting of collateral as a condition to issuing any bonds. Current or future market conditions, as well as changes in the sureties’ assessment of our or their own operating and financial risk, may cause the surety companies to decline to issue, or substantially reduce the amount of, bonds for our work or to increase our bonding costs. An interruption or reduction in the availability of bonding could negatively affect our results of operations.
Our business may be exposed to warranty claims.
We may provide warranties guaranteeing the work performed against defects in workmanship and material. If warranty claims occur, they may require us to re-perform the services or to repair or replace the warranted item at a cost to us and could also result in other damages if we are not able to adequately satisfy warranty obligations. In addition, we may be required under contractual arrangements with customers to warrant any defects from subcontractors or failures in materials we purchased from third parties. While we generally require suppliers to provide warranties that are consistent with those we provide to customers, if any of the suppliers default on their warranty obligations to us, we may nonetheless incur costs to repair or replace the defective materials. Costs incurred as a result of warranty claims could affect our results of operations, financial condition and cash flows.
We may pursue acquisitions and other strategic transactions that could have a negative effect on our results of operations.
As part of our growth strategy, we may pursue acquisitions or joint ventures to expand, complement, or diversify our business. However, acquisitions carry inherent risks and challenges that could negatively impact our business, financial condition, results of operations, or cash flows. Future acquisition opportunities that align with our strategic objectives may be limited, and we may face significant competition from other potential acquirers, some of whom may have greater financial resources or offer more favorable terms. This competition could limit our ability to grow through acquisitions or increase acquisition costs, potentially reducing any anticipated financial benefits.
Acquisitions may expose us to operational challenges and risks, including, among others:
• the diversion of management’s attention from the day-to-day operations of the company;
• the complexities and difficulties associated with managing our business as it grows;
• managing a significantly larger company than before completion of an acquisition;
• the assimilation of new employees and the integration of business cultures;
• training and facilitating our internal control processes within the acquired organization;
• difficulties incorporating the operations and personnel, or inability to retain key personnel, of an acquired business;
• additional financial reporting and accounting challenges associated with an acquired business;
• challenges in combining service offerings and sales and marketing activities; and
• the assumption of unknown liabilities of the acquired business for which there are inadequate reserves and the potential impairment of acquired intangible assets.
Failure to effectively manage the integration process could adversely impact our business, financial condition, results of operations, and cash flows.
Our participation in joint ventures may have a negative impact on our reputation, business operations, revenues, results of operations, liquidity and cash flows.
Our participation in joint venture contracts may have a negative impact on our reputation, business operations, revenues, results of operations, liquidity and cash flows. We enter into certain joint venture arrangements typically to bid and execute particular projects. Generally, these agreements are directly with a third-party client; however, services may be performed by the joint venture, the joint venture partners or a combination thereof. Engaging in joint venture contracts exposes us to risks and uncertainties, some of which are outside our control.
We are reliant on joint venture partners to satisfy their contractual obligations, including obligations to commit working capital and equity, and to perform the work as outlined in the agreement. Failure to do so could result in us providing additional investments or services to address such performance issues. If we are unable to satisfactorily resolve any partner performance issues, the customer could terminate the contract, exposing us to legal liability which could negatively impact our reputation, business operations, revenues, results of operations, liquidity and cash flows .
Technology disruptions or cyberattacks could adversely impact our operations.
We use technology in substantially all aspects of our business operations and require uninterrupted operation of information technology and operation technology systems, including disaster recovery and backup systems and network infrastructure. While we have policies, procedures and processes in place designed to strengthen and protect these systems, they may be vulnerable to physical and cybersecurity failures or unauthorized access due to, among other things: hacking; human error; theft; sabotage; malicious software; ransomware; third-party compromise; acts of terrorism; acts of war; or acts of nature.
Although there are manual processes in place, should a compromise or system failure occur, interdependencies to technology may disrupt our ability to fulfill critical business functions. This may include interruption of facilities for delivery of construction services or other products and services, any of which could adversely affect our reputation, business, cash flows and results of operations or subject us to legal costs. Our 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.
Through the ordinary course of business, we require access to sensitive customer, supplier, employee and our proprietary business data. While we have implemented extensive security measures, including limiting the amount of sensitive information retained, a breach of our systems could compromise sensitive data and could go unnoticed for some time. Such an event could result in negative publicity and reputational harm, remediation costs, legal claims and fines that could have an adverse effect on our financial results. Third-party service providers that perform critical business functions for us or have access to sensitive information within our systems also may be vulnerable to security breaches and information technology risks that could adversely affect us.
Cyberattacks continue to increase in frequency and sophistication, which could cause our information systems to be a target of ongoing and sophisticated cyberattacks by a variety of sources with the apparent aim to breach our cyber-defenses. Such incidents could have a material adverse effect on our business, financial condition or results of operations. We are continuously re-evaluating the need to upgrade and/or replace systems and network infrastructure. These upgrades and/or replacements could
adversely impact operations by imposing substantial capital expenditures, creating delays or outages, or experiencing difficulties transitioning to new systems. System disruptions, if not anticipated and appropriately mitigated, could adversely affect us.
The SEC has adopted rules that require us to provide greater disclosures around cybersecurity risk management, strategy, and governance, as well as disclose the occurrence of material cybersecurity incidents. These rules may also require us to report a cybersecurity incident before we have been able to fully assess its impact or remediate the underlying issue. Efforts to comply with such reporting requirements could divert management’s attention from our incident response and could potentially reveal system vulnerabilities to threat actors. Failure to report incidents in a timely manner under these or other similar rules could also result in monetary fines, sanctions, or subject us to other forms of liability. This regulatory environment is increasingly challenging and may present material obligations and risks to our business, including significantly expanded compliance , costs and enforcement risks.
Artificial intelligence presents risks and challenges that can impact our business by posing security risks to our confidential information, proprietary information and personal data. Failure to appropriately manage these risks could damage our reputation, result in the loss of valuable property and information, and adversely impact our business.
Artificial intelligence ("AI") technologies present a growing range of risks to our business. Threat actors are using AI to execute increasingly sophisticated fraud schemes as well as advanced cyber attacks.
Internally, the use of AI tools in business functions carries risks of inaccurate outputs, data exposure, and security vulnerabilities, while a rapidly evolving regulatory landscape around AI governance, data privacy, and algorithmic accountability could increase compliance costs and legal liability.
Our business is seasonal, which could adversely affect our operations, revenues and the timing of cash flows.
Business operations and activities in certain locations are seasonal, and operations are affected by weather conditions. Construction services and related specialty contracting services typically follow the activity in the construction industry, with heavier workloads in the spring, summer and fall. As a result, seasonality has negatively affected, and could continue to negatively affect, our results of operations, financial position and cash flows.
Our operations could be adversely impacted by severe weather events as a result of climate change or otherwise.
Severe weather events, such as tornadoes, wildfires, hurricanes, rain, drought, ice and snowstorms, and high and low temperature extremes, occur in regions in which we operate and maintain infrastructure. Climate change could change the frequency and severity of these weather events, which may create physical and financial risks to us. Such risks could have an adverse effect on our financial condition, results of operations and cash flows. Increases in severe weather conditions or extreme temperatures may cause infrastructure construction projects to be delayed or canceled and limit resources available for such projects resulting in decreased revenue or increased project costs. In addition, drought conditions could restrict the availability of water supplies or limit the ability to obtain water use permits, inhibiting the ability to conduct operations.
Climate change may impact a region’s economic health, which could impact our revenues. Our financial performance is tied to the health of the regional economies served. We provide construction services and related specialty contracting services for some states and communities that are economically affected by the agriculture industry. Increases in severe weather events or significant changes in temperature and precipitation patterns could adversely affect the economies of the states and communities affected.
The insurance industry may be adversely affected by severe weather events that may impact availability of insurance coverage, insurance premiums and insurance policy terms.
The price of energy also has an impact on the economic health of communities. The cost of additional regulatory requirements to combat climate change, such as regulation of carbon dioxide emissions under the federal Clean Air Act, requirements to replace fossil fuels with renewable energy or credits, or other environmental regulation or taxes could impact the availability of goods and the prices charged by suppliers, which would normally be borne by consumers through higher prices for energy and purchased goods, and could adversely impact economic conditions of areas served by us. To the extent financial markets view climate change and emissions of greenhouse gas as a financial risk, this could negatively affect our ability to access capital markets or result in less competitive terms and conditions.
Pandemics, may have a negative impact on our business operations, revenues, results of operations, liquidity and cash flows.
In the past, pandemics have disrupted national, state and local economies. To the extent a pandemic adversely impacts our business, operations, revenues, liquidity or cash flows, it could also have a heightened effect on other risks described in this section. The degree to which a pandemic will impact us depends on future developments, including but not limited to: federal and state mandates, actions taken by governmental authorities, and the pace and extent to which the economy recovers and remains under relatively normal operating conditions.
Other factors associated with a pandemic that could impact our business and future operating results, revenues and liquidity include impacts related to the health, safety and availability of employees and contractors, extended rise in unemployment, public and private-sector budget changes and constraints, counterparty credit, costs and availability of supplies, capital construction and infrastructure operation and maintenance programs, financing plans, multiemployer pension valuations, travel restrictions and legal matters. The economic and market disruptions resulting from a pandemic could also lead to greater than normal uncertainty with respect to the realization of estimated amounts, including estimates for backlog, revenue recognition, intangible assets, other investments and provisions for credit losses.
Economic, Financial and Accounting Risks
Economic volatility affects our operations, as well as the demand for our products and services.
Unfavorable economic conditions can negatively affect the level of public and private expenditures on projects and the timing of these projects which, in turn, can negatively affect demand for our products and services. The level of demand for construction services and related specialty contracting services could be adversely impacted by the economic conditions in the industries and market areas we serve, as well as in the general economy. Local, state and federal budget limitations affect the funding available for infrastructure spending, which could have an adverse impact on our financial condition, results of operations and cash flows.
We may be required to obtain additional financing in order to fund certain strategic acquisitions, if they arise, or to refinance outstanding debt. It is possible a large strategic acquisition would require us to issue new equity and debt securities in order to maintain our credit rating and could result in a ratings downgrade notwithstanding our issuance of equity securities to fund the transaction. We are also exposed to risks from tightening credit markets, through the interest payable on any variable-rate debt, including the interest cost on future borrowings under our credit facilities. While we believe we will continue to have adequate credit available to meet our needs, there can be no assurance of that.
Our business is based in part on government-funded infrastructure projects and building activities, and any associated regulatory changes or requirements in these areas could have an adverse effect on us.
Certain of our customers operate in regulated industries and depend on government spending for infrastructure and other similar building activities. As a result, demand for some of our services is influenced by local, state and federal government fiscal policies, tax incentives and other subsidies, and other general macroeconomic and political factors. Projects in which we participate may be funded directly by governments or privately funded, but are otherwise tied to or impacted by government policies and spending measures.
Government spending is often approved only on a short-term basis and some of the projects in which our services are used require longer-term funding commitments. If government funding is not approved or funding is lowered as a result of poor economic conditions, lower than expected revenues, competing spending priorities, or other factors, it could limit infrastructure projects available, increase competition for projects, result in excess inventory, and decrease sales, all of which could adversely affect the profitability of our business.
Certain regions or states may require or possess the means to finance only a limited number of large infrastructure projects and periods of high demand may be followed by years of little to no activity. There can be no assurances that governments will sustain or increase current infrastructure spending and tax incentive and other subsidy levels, and any reductions thereto or delays therein could affect our business, financial condition, results of operations and cash flows.
Our financial results and projections are based upon estimates and assumptions that may cause our actual results to materially differ from such projections, which may adversely affect our future results of operations, cash flows and stock price.
The preparation of consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities,
and disclosure of contingent assets and liabilities, at the date of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting period. The most significant estimates we use are for items such as long-lived assets and goodwill; property depreciable lives; tax provisions; revenue recognized using the cost-to-cost measure of progress for contracts; expected credit losses; loss contingencies; costs on construction contracts; unbilled revenues; actuarially determined benefit costs; lease classification; present value of right-of-use assets and lease liabilities; fair values of acquired assets and liabilities under the acquisition method of accounting; and the valuation of stock-based compensation. As additional information becomes available, or actual amounts are determinable, the recorded estimates are revised.
Critical accounting estimates are defined as estimates that require us to make assumptions about matters that are uncertain at the time the estimates were made, and changes in the estimates could have a material impact on our financial position or results of operations. Our critical accounting estimates are subject to judgments and uncertainties that affect the application of the significant accounting policies. As additional information becomes available, or actual amounts are determinable, the recorded estimates are revised. Consequently, our financial position or results of operations may be materially different when reported under varying conditions or when using different assumptions in the application of the following critical accounting estimates. For more information, refer to Note 2 – Basis of Presentation and Summary of Significant Accounting Policies in the consolidated financial statements and Critical Accounting Estimates included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations contained elsewhere in this 2025 Annual Report.
In addition, our financial projections, including any guidance, long-term targets or outlook we may provide from time to time, are dependent on certain estimates and assumptions related to, among other things, our strategy, our long-term financial targets; end-market and sub-market growth; market share projections; revenue; product pricing; volume and product mix; market and economic volatility; tax rates; interest rates; commodity prices; dis-synergies; cost savings including synergies; accruals for estimated liabilities, including litigation reserves; measurement of benefit obligations for benefit plans; and our ability to generate sufficient cash flow to reinvest in our existing business, fund internal growth, make acquisitions, invest in joint ventures and meet debt obligations. In addition, our ability to achieve our projections is subject to various assumptions and uncertainties. There is no assurance that we will achieve such results in the time frames we project or at all. Our financial projections are based on historical experience and on various other estimates and assumptions that we believe to be reasonable under the circumstances and at the time they are made, and our actual results may differ materially from our financial projections. Any material variation between our financial projections and our actual results may affect our , cash flows and stock price.
We recognize revenue for the majority of construction projects based on estimates; therefore, variations of actual results from assumptions may reduce profitability.
As discussed in further detail in Note 2 – Basis of Presentation and Summary of Significant Accounting Policies in the consolidated financial statements and Critical Accounting Estimates included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations contained elsewhere in this 2025 Annual Report, contract revenue is recognized over time using the input method, based on progress measured by costs incurred relative to total estimated costs for a performance obligation. Revenues are recorded proportionate to the costs incurred, reflecting progress toward the transfer of goods or services to the customer. Consequently, changes in estimates, or variations of actual results from previous projections, on an unusually large project, or on a number of average size projects, could be material and could have an adverse impact on our financial condition, results of operations, and cash flows.
Our backlog may not accurately represent future revenue.
Backlog is a common measurement in the construction services industry. Our determination of backlog 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 conditions and change orders or claims to the extent management believes additional contract revenues will be earned and are deemed probable of collection. Contracts are subject to delays, defaults or cancellations; changes in scope of services to be provided; and adjustments to costs. Backlog may also be affected by project delays or cancellations resulting from weather conditions, external market factors and economic factors beyond our control, among other things. Accordingly, there is no assurance that backlog will be realized. The timing of contract awards, including contracts awarded underneath master service agreements, duration of large new contracts and the mix of services can significantly affect backlog. Backlog at any given point in time may not accurately represent the revenue or net income that is realized in any period, and backlog as of the end of the quarter or year may not be indicative of the revenue and net income expected to be earned in the following year. Backlog should not be relied upon as a standalone indicator of future results.
Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could materially and adversely affect us.
As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) and are required to prepare our financial statements according to the rules and regulations required by the SEC. Our failure to prepare and disclose this information in a timely manner or to otherwise comply with applicable law could subject us to penalties under federal securities laws, expose us to lawsuits and restrict our ability to access financing. In addition, the Sarbanes-Oxley Act requires that, among other things, we establish and maintain effective internal controls and procedures for financial reporting and disclosure purposes. Internal control over financial reporting is complex and may be revised over time to adapt to changes in our business, or changes in applicable accounting rules. We cannot guarantee that our internal control over financial reporting will be effective in the future or that a material weakness will not be discovered with respect to a prior period for which we had previously believed that internal controls were . If we are not to maintain or document internal control over financial reporting, our independent registered public accounting firm will not be to certify as to the effectiveness of our internal control over financial reporting.
Matters affecting our internal controls may cause us to be unable to report our financial information on a timely basis, or may cause us to restate previously issued financial information, and thereby subject us to adverse regulatory consequences, including sanctions or investigations by the SEC, or violations of applicable stock exchange listing rules. There could also be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. Confidence in the reliability of our financial statements is also likely to suffer if we or our independent registered public accounting firm reports a material weakness in our internal control over financial reporting. This could have a material and adverse effect on us by, for example, leading to a decline in our share price and our ability to raise additional capital.
We are subject to capital market and interest rate risks.
The credit environment could impact our ability to borrow money in the future. Additional financing or refinancing may not be available and, if available, may not be at economically favorable terms. Further, an increase in our leverage could lead to deterioration in our credit ratings. A reduction in our credit ratings, regardless of the cause, also could limit our ability to obtain additional financing and/or increase the cost of obtaining financing. There is no guarantee we will be able to access the capital markets at financially economical interest rates, and with higher interest rates on borrowings, our business, financial condition, results of operations and cash flows could be negatively affected.
Our operations require capital investment to purchase and maintain the property and equipment required to provide our services. In addition, our operations include a significant level of fixed and semi-fixed costs. Consequently, we rely on financing sources and capital markets as sources of liquidity for capital requirements not satisfied by cash flows from operations. If we are not able to access capital at competitive rates, our ability to implement business plans, make capital expenditures or pursue acquisitions to produce future growth may be adversely affected. Market disruptions may increase the cost of borrowing or adversely affect our ability to access one or more financial markets. Such market disruptions could include:
• a significant economic downturn;
• the financial distress of unrelated industry leaders in the same line of business;
• deterioration in capital market conditions;
• turmoil in the financial services industry;
• volatility in commodity prices;
• pandemics;
• terrorist attacks;
• war; and
• cyberattacks.
In addition, the issuance of a substantial amount of our common stock, whether issued in connection with an acquisition or otherwise, or the perception that such an issuance could occur, could have a dilutive effect on stockholders and/or may adversely affect the market price of our common stock.
In connection with the Separation from MDU Resources, we incurred debt obligations that could adversely affect our business, our profitability and our ability to meet obligations.
In connection with the Separation, we entered into a five-year senior secured credit agreement, which provides for long-term debt in an aggregate principal amount of up to $525 million. Such indebtedness consists of a $300 million term loan and a $225 million revolving credit facility. This amount of debt could potentially have important consequences to us and our debt and equity investors, including:
• requiring a substantial portion of our cash flow from operations to make interest payments on this debt;
• making it more difficult to satisfy debt service and other obligations;
• increasing future debt costs and limit the future availability of debt financing;
• increasing our vulnerability to general adverse economic and industry conditions;
• reducing the cash flow available to fund capital expenditures and other corporate purposes to grow our business;
• limiting our flexibility in planning for, or reacting to, changes in our business and the industry;
• placing us at a competitive disadvantage relative to our competitors that may not be as highly leveraged with debt; and
• limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase common shares.
To the extent that we incur additional indebtedness, the foregoing risks could increase. In addition, our actual cash requirements in the future may be greater than expected. Our cash flow from operations may not be sufficient to repay all of the outstanding debt as it becomes due, and we may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to refinance our debt.
Our results of operations could be adversely affected as a result of goodwill and identifiable intangible asset impairments.
When we acquire a business, goodwill is recorded for the excess amount paid for the business over the net fair value of the tangible and identifiable intangible assets of the business acquired. As of both December 31, 2025 and 2024, the balance sheet included goodwill of $143.2 million. Intangible assets were fully amortized during 2025, and as such, the Company wrote off the remaining $10.5 million of finite-lived intangible assets cost and associated accumulated amortization related to customer relationships. As of December 31, 2024, the balance sheet included $0.1 million of intangible assets related to customer relationships.
Under current accounting rules, goodwill and other identifiable intangible assets that have indefinite useful lives cannot be amortized, but instead must be tested at least annually for impairment, while identifiable intangible assets that have finite useful lives are amortized over their useful lives. When testing for impairment, fair value is determined using a combination of the discounted cash flow and market capitalization valuation approaches. Significant judgments are required in completing these tests, including the estimate of fair value. There can be no assurance that our estimates and assumptions will prove to be accurate predictions of the future. For further discussion of our impairment testing, refer to Note 2 – Basis of Presentation and Summary of Significant Accounting Policies and Note 5 – Goodwill and Other Intangible Assets in the consolidated financial statements and Critical Accounting Estimates included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, contained elsewhere in this 2025 Annual Report.
Legal and Regulatory Risks
We may be negatively impacted by pending and/or future litigation, claims or investigations.
We are, and may become party to, among other things, personal injury, commercial, contract, warranty, antitrust, tax, property entitlements, shareholder actions, product liability, health and safety, and employment claims. The outcome of pending or future lawsuits, claims, investigations or proceedings is often difficult to predict and could be adverse and material in amount.
In addition to the monetary cost, litigation can divert management’s attention from our core business opportunities. Development of new information in these matters can often lead to changes in management’s estimated liabilities associated with these proceedings including the judge’s rulings or judgments, jury verdicts, settlements or changes in applicable law. The outcome of such matters is often difficult to predict and unfavorable outcomes could have a material impact on our financial condition, results of operations and cash flows.
If we fail to comply with requirements imposed by applicable law or other governmental regulations, we could become subject to lawsuits, investigations and other liabilities and restrictions on our operations that could significantly and adversely affect our business, financial condition and results of operations.
We are subject to governmental regulation at the federal, state and local levels in many areas of our business, such as employment laws, wage and hour laws, discrimination laws, immigration laws, human health and safety laws, environmental laws, false claims or whistleblower statutes, tax codes, antitrust and competition laws, customer protection statutes, procurement regulations, intellectual property laws, supply chain laws, lobbying laws, and data privacy and security laws.
From time to time, government agencies have conducted reviews and audits of certain of our practices as part of routine inquiries of providers of services under government contracts, or otherwise. Like others in our business, we also receive requests for information from government agencies in connection with these reviews and audits.
There can be no assurance that we are in full compliance with all applicable laws and regulations or interpretations of these laws and regulations at all times or that we will be able to comply with any future laws, regulations or interpretations of these laws and regulations.
Government agencies may make changes in the regulatory frameworks within which we operate that may require us to incur substantial increases in costs in order to comply with such laws and regulations. If we fail to comply with applicable laws and regulations, including those referred to above, we may be subject to investigations, criminal sanctions or civil remedies, including fines, penalties, damages, reimbursements, injunctions, seizures, disgorgements or debarments from government contracts. The cost of compliance or the consequences of non-compliance could adversely affect our business, financial condition and results of operations and cause reputational harm.
Changes in tax law may negatively affect our business.
Changes to federal, state and local tax laws have the ability to benefit or adversely affect our earnings and customer costs. Significant changes to federal and state corporate tax rates could result in the impairment of deferred tax assets that are established based on existing law at the time of deferral. A number of factors may increase our future effective income tax rate, including:
• governmental authorities increasing taxes or eliminating deductions;
• the jurisdictions in which earnings are taxed;
• the resolution of issues arising from tax audits with various tax authorities;
• changes in the valuation of our deferred tax assets and liabilities;
• adjustments to estimated taxes upon finalization of various tax returns;
• changes in available tax credits;
• changes in stock-based compensation;
• other changes in tax laws; and
• the interpretation of tax laws and/or administrative practices.
Our operations could be negatively impacted by import tariffs and/or other government mandates.
We operate in or provide services to capital intensive industries in which federal trade policies could significantly impact the availability and cost of materials. Imposed and proposed tariffs could significantly increase the prices and delivery lead times on raw materials and finished products that are critical to us and our customers, such as copper, aluminum, steel, electrical components and certain plastics. Prolonged lead times on the delivery of raw materials and further tariff increases on raw materials and finished products could adversely affect our business, financial condition and results of operations.
At this time, it remains unclear what additional actions, if any, will be taken by the U.S. or other governments with respect to international trade agreements, the imposition of additional tariffs on goods imported into the U.S., tax policy related to international commerce, increased export control, sanctions and investment restrictions, or other trade matters. Other effects of these changes, including responsive or retaliatory actions from governments and the opportunity for competitors not subject to such changes to establish a presence in markets where we participate, could also have significant impacts on our results of operations. Furthermore, we may not be able to increase prices for our products enough to offset the impact of tariffs or other trade restrictions, which could negatively impact our gross profit and gross profit margin.
While we cannot predict what further action may be taken with respect to export restrictions, tariffs or trade relations between the U.S. and other governments as stated above, any further changes in U.S. or international trade policy could have an adverse impact on our business, financial condition and results of operations.
Our operations are subject to environmental laws and regulations that may increase costs of operations, impact or limit business plans, or expose us to environmental liabilities.
We are subject to some environmental laws and regulations affecting certain aspects of our operations, including the use of petroleum storage tanks. These laws and regulations generally require us to obtain and comply with a variety of environmental licenses, permits, inspections and other approvals. Public and private entities and private individuals may interpret our legal or regulatory requirements differently and seek injunctive relief or other remedies against us. We cannot predict the outcome, financial or operational, of any such litigation or administrative proceedings.
Existing environmental laws and regulations may be revised and new laws and regulations seeking to protect the environment may be adopted or become applicable to us. These laws and regulations could require us to limit the use or output of certain facilities, restrict the use of certain fuels, prohibit or restrict new or existing services, replace certain fuels with renewable fuels, retire and replace certain facilities, install pollution controls, remediate environmental impacts, remove or reduce environmental hazards, or forego or limit the development of resources. Revised or new laws and regulations that increase compliance and disclosure costs and/or restrict operations could adversely affect our results of operations and cash flows.
Human Capital and Labor Risks
Our operations may be negatively affected if we are unable to obtain, develop and retain key personnel and skilled labor forces.
We must attract, develop and retain executive officers and other professional, technical and labor forces with the skills and experience necessary to successfully manage, operate and grow. Competition for these employees is high, due in part to changing workforce demographics, a lack of younger employees who are qualified to replace employees as they retire, and remote work opportunities, among other things. In some cases, competition for these employees is on a regional or national basis. At times of low unemployment, it can be difficult to attract and retain qualified and affordable personnel. A shortage in the supply of skilled personnel creates competitive hiring markets, increased labor expenses, decreased productivity and potentially lost business opportunities to support our operating and growth strategies.
In addition, changes to the United States immigration policies or restrictions on immigration could limit the company's ability to hire qualified and affordable personnel. We are also subject to risks associated with labor disputes or prolonged negotiation processes, which could disrupt operations and increase costs. Additionally, if we are unable to hire employees with the requisite skills, we may be forced to incur significant training expenses. As a result, our ability to maintain productivity, relationships with customers, competitive costs, and quality services is limited by our ability to employ, retain and train the necessary skilled personnel and could negatively affect our results of operations, financial position and cash flows.
Our unionized workforce may adversely affect operations.
As of December 31, 2025 and 2024, approximately 85% and 83% of our employees were covered by collective bargaining agreements, respectively. Although the majority of these agreements prohibit strikes and work stoppages, we cannot be certain that strikes or work stoppages will not occur in the future. Strikes or work stoppages would adversely impact relationships with customers and could have an adverse effect on our business. The ability to complete future acquisitions could be adversely affected because of our union status for a variety of reasons. For instance, in certain geographic areas, our union agreements may be incompatible with the union agreements of a business we want to acquire, and some businesses may not want to become affiliated with a union company.
Increasing costs associated with health care plans and changes in employment laws or regulations may adversely affect our results of operations.
We are self-insured for the health care benefits for eligible employees, subject to certain deductible thresholds. However, health care costs continue to increase. Increasing quantities of large individual health care claims and an overall increase in total health care claims could have an adverse impact on our operating results, financial position and liquidity. Complying with any new legislation and regulation at both the federal and state level related to health care, unemployment tax rates and workers' compensation rates, among others, could adversely affect our financial position, results of operations and cash flows, as well change our benefit programs and costs.
Costs related to obligations under multiemployer pension plans could have a material negative effect on our results of operations and cash flows.
We participate in multiemployer pension plans (“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 the operating subsidiaries and those unions.
We may be obligated to increase our contributions to underfunded plans that are classified as being in endangered, seriously endangered or critical status as defined by the Pension Protection Act of 2006. Plans classified 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.
We may also be required to increase our contributions to MEPPs if the other participating employers in such plans withdraw from the plans and are not able to contribute amounts sufficient to fund the unfunded liabilities associated with their participation in the plans. The amount and timing of any increase in our required contributions to MEPPs may depend upon one or more factors, including the outcome of collective bargaining, actions taken by trustees who manage the plans, actions taken by the plans’ other participating employers, the industry for which contributions are made, future determinations that additional plans reach endangered, seriously endangered or critical status, newly enacted government laws or regulations and the actual return on assets held in the plans, among others. We could experience increased operating expenses as a result of required contributions to MEPPs, which could have an adverse effect on our financial position, results of operations or cash flows.
In addition, pursuant to the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended by the Multiemployer Pension Plan Amendments Act, we could incur a partial or complete withdrawal liability upon withdrawing from a plan, exiting a market in which we do business with a union workforce or upon termination of a plan. We could also incur additional withdrawal liability if our withdrawal from a plan is determined by that plan to be part of a mass withdrawal.
Common Stock Risks
The trading market of our common stock has existed only for a limited period of time following the Separation and Distribution, and our stock price and trading volume may fluctuate significantly.
A public market for our common stock has only existed for a limited period of time following the Separation and Distribution. The trading price of our common stock has been and may continue to be volatile and the trading volume may fluctuate and cause significant price variations to occur. For many reasons, including the other risks identified in this section, the market price of our common stock may be more volatile than that of our market peers. We cannot predict the prices at which our common stock may trade.
The market price of shares of our common stock may fluctuate significantly due to a number of factors, some of which may be beyond our control, including:
• actual or anticipated fluctuations in our operating results;
• declining operating revenues derived from our core business;
• the operating and stock price performance of comparable companies;
• changes in our stockholder base due to the Separation;
• changes in the regulatory and legal environment in which we operate; and
• market conditions in the construction services contracting market, and the domestic and worldwide economy as a whole.
If 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.
The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts downgrades our stock or publishes misleading or unfavorable research about our business, our stock price would likely decline. If one or more of the analysts ceases coverage of our common stock or fails to publish reports on us regularly, demand for our common stock could decrease, which could cause our common stock price or trading volume to decline.
Your percentage of ownership in us may be diluted in the future.
In the future, your percentage ownership in us 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. Our employees have stock-based awards relating to shares of our common stock, including awards that were converted to Everus stock-based awards from MDU Resources stock-based awards following the Distribution. Any currently granted stock-based awards or awards that will be granted in future will have a dilutive effect on our earnings per share, which could adversely affect the market price of shares of our common stock. From time to time, we will issue additional stock-based awards to our employees under our employee benefits plans.
In addition, our certificate of incorporation authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock that have such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock respecting dividends and distributions, as our board of directors (“board”) generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. Similarly, the repurchase or redemption rights or liquidation preferences we could assign to holders of preferred stock could affect the residual value of the common stock.
Provisions in our certificate of incorporation and bylaws and Delaware law may prevent or delay an acquisition of us, which could decrease the trading price of our common stock.
Our certificate of incorporation and bylaws, and Delaware law, contain provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids more expensive to the acquirer and to encourage prospective acquirers to negotiate with our board rather than to attempt a hostile takeover. These provisions include rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings and the right of our board to issue preferred stock without stockholder approval. Delaware law also imposes some restrictions on mergers and other business combinations between any holder of 15% or more of our outstanding common stock and us.
We believe these provisions protect our stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with our board and by providing our board with more time to assess any acquisition proposal. These provisions are not intended to make us immune from takeovers. However, these provisions apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that our board determines is not in the best interests of us and our stockholders. Accordingly, in the event that our board determines that a potential business combination transaction is not in the best interests of us and our stockholders but certain stockholders believe that such a transaction would be beneficial to us and our stockholders, such stockholders may elect to sell their shares in us and the trading price of our common stock could decrease.
These and other provisions of our certificate of incorporation, bylaws and the Delaware General Corporation Law, (the “DGCL”) could have the effect of delaying, deferring or preventing a proxy contest, tender offer, merger or other change in control, which may have a material adverse effect on our business, financial condition and results of operations.
Furthermore, an acquisition or further issuance of our stock could trigger the application of Section 355(e) of the Code, causing the Distribution to be taxable to MDU Resources. Under the tax matters agreement, and as described in more detail below, we would be required to indemnify MDU Resources for the resulting taxes and related amount, and this indemnity obligation might discourage, delay or prevent a change of control that stockholders may consider favorable.
Our certificate of incorporation and bylaws designate the state courts of the State of Delaware, or, if no state court located in the State of Delaware has jurisdiction, the federal court for the District of Delaware, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could discourage lawsuits against us and our directors and officers.
Our certificate of incorporation and bylaws provide that, unless the board otherwise determines, the state courts of the State of Delaware, or, if no state court located in the State of Delaware has jurisdiction, the federal court for the District of Delaware, will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of us, any action asserting a claim of breach of a fiduciary duty owed by any director or officer to us or our stockholders, creditors or other constituents, any action asserting a claim against us or any director or officer arising pursuant to any provision of the DGCL, as amended, or our certificate of incorporation or bylaws, or any action asserting a claim against us or any director or officer governed by the internal affairs doctrine. However, these exclusive forum provisions do not apply to actions asserting only federal law claims under the Securities Act or the Exchange Act, regardless of whether the state courts in the State of Delaware have jurisdiction over those claims.
This exclusive forum provision may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors or officers, which may discourage such lawsuits against us and our directors and officers. Alternatively, if a court outside of Delaware were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings described above, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition and results of operations.
We cannot guarantee the timing, declaration, amount or payment of dividends, if any, on our common stock.
The timing, declaration, amount and payment of any dividends to our stockholders, if any, is within the discretion of our board, and will depend upon many factors, including our financial condition, earnings, capital requirements, including for our operating subsidiaries, covenants associated with certain of our debt service obligations, legal requirements, Delaware corporate surplus requirements, regulatory constraints, industry practice, ability to access capital markets, and other factors deemed relevant by our board. Our ability to pay dividends will depend on our ongoing ability to generate cash flows from operations. Moreover, if we determine to pay any dividends in the future, there can be no assurance that we will continue to pay such dividends or the amount of such dividends. We have not paid any cash dividends on our common stock and do not anticipate declaring or paying dividends in the foreseeable future.
Separation and Distribution Risks
We have limited history of operating as an independent, public company and our historical financial information prior to the Separation 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.
Our historical information in this 2025 Annual Report refers to our business as operated by and integrated with MDU Resources for periods prior to the Separation and as a standalone public company for periods following the Separation. Our historical financial information prior to the Separation included in this 2025 Annual Report was derived from the consolidated financial statements and accounting records of MDU Resources and Everus Construction. Accordingly, the historical financial information prior to the Separation included in this 2025 Annual Report does not necessarily reflect the financial condition, results of operations and cash flows that we would have achieved as a separate, publicly traded company during those periods presented or those that we will achieve in the future, primarily as a result of the factors described below:
• Prior to the Separation, our business was operated by MDU Resources as part of its broader corporate organization, rather than as an independent company, and MDU Resources or one of its affiliates performed certain corporate functions for us. Our historical financial results prior to the Separation reflect allocations of corporate expenses from MDU Resources for such functions and are likely to be less than the expenses we would have incurred had we operated as a separate publicly traded company.
• Prior to the Separation, we shared economies of scope and scale in costs, employees and vendor relationships. Although we entered into a transition services agreement with MDU Resources prior to the Separation, these arrangements may not retain or fully capture the benefits that we enjoyed as a result of being integrated with MDU Resources and may result in us paying higher charges than in the past for these services. This could have a material adverse effect on our business, financial position, results of operations and cash flows for periods after the Separation.
• Our working capital requirements and capital for our general corporate purposes, including acquisitions and capital expenditures, had in the past been satisfied as part of the corporate wide cash management policies of MDU Resources for periods prior to the Separation. Following the Separation, our results of operations and cash flows are likely to be more volatile, and we may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements, which may or may not be available and may be more costly.
• As part of MDU Resources prior to the Separation, our business benefited from MDU Resources’ overall size and scope to procure more advantageous arrangements. After the Separation, as a standalone company, we may be unable to obtain similar arrangements to the same extent as MDU Resources did, or on terms as favorable as those MDU Resources obtained prior to the Separation.
• The cost of capital for our business as a standalone company may be higher than MDU Resources’ cost of capital prior to the Separation. Our historical financial information prior to the Separation does not reflect the debt that we incurred in connection with the Separation.
• As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the Dodd-Frank Act and are required to prepare our financial statements according to the rules and regulations required by the SEC. Complying with these requirements could result in significant costs and require us to divert substantial resources, including management’s time, from other activities. We have implemented additional financial and management controls, reporting systems and procedures, and hired additional accounting and finance staff, and will continue to monitor, update and/or add staff as needed. We are continuing the process of migrating our systems, including information technology systems, with completion anticipated by the end of the first quarter of 2026. We have incurred and expect to continue to incur additional expenses related to these efforts. The migration of our financial reporting systems is substantially complete, significantly reducing the risk to our ability to comply with financial reporting requirements and other rules applicable to reporting companies under the Exchange Act. As we complete the remaining system migrations, we do not anticipate material disruption to our operations or compliance obligations.
Other significant changes may occur in our cost structure, management, financing and business operations as a result of now operating as a standalone company. For additional information about the past financial performance of our business and the basis of presentation of the historical consolidated financial statements, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and the historical financial statements and accompanying notes in Item 8. Financial Statements and Supplementary Data contained elsewhere in this 2025 Annual Report.
If the Distribution, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, our stockholders could be subject to significant tax liabilities and, in certain circumstances, we could be required to indemnify MDU Resources for material taxes and other related amounts pursuant to indemnification obligations under the tax matters agreement.
In connection with the Distribution, MDU Resources received a private letter ruling from the Internal Revenue Service (“IRS”) and one or more opinions of its tax advisors, regarding certain U.S. federal income tax matters relating to the Separation and Distribution. The IRS private letter ruling was based upon and relied on, among other things, various facts and assumptions, as well as certain representations, statements and undertakings of MDU Resources and Everus, including those relating to the past and future conduct of MDU Resources and Everus. If any of these representations, statements or undertakings is, or becomes, inaccurate or incomplete, or if MDU Resources or Everus breach any of the representations or covenants contained in any of the separation-related agreements and documents or in any documents relating to the IRS private letter ruling and/or the opinion(s) of tax advisors, the IRS private letter ruling and/or the opinion(s) of tax advisors may be invalid and the conclusions reached therein could be jeopardized.
Notwithstanding receipt of the IRS private letter ruling and the opinion(s) of tax advisors, the IRS could determine that the Distribution and/or certain related transactions should be treated as taxable transactions for U.S. federal income tax purposes if it determines that any of the representations, assumptions or undertakings upon which the IRS private letter ruling or the opinion(s) of tax advisors were based on are false or have been violated. In addition, neither the IRS private letter ruling, nor the opinion(s) of tax advisors addressed all of the issues that are relevant to determining whether the Distribution, together with certain related transactions, qualifies as a transaction that is generally tax-free for U.S. federal income tax purposes. Further, the opinion(s) of tax advisors represent the judgment of such tax advisors and are not binding on the IRS or any court, and the IRS or a court may disagree with the conclusions in the opinion(s) of tax advisors. Accordingly, notwithstanding receipt by MDU Resources of the IRS private letter ruling and the opinion(s) of tax advisors, there can be no assurance that the IRS will not assert that the Distribution and/or certain related transactions do not qualify for tax-free treatment for U.S. federal income tax purposes or that a court would not sustain such a challenge. In the event the IRS were to prevail in such , MDU Resources, Everus and MDU Resources stockholders could be subject to significant U.S. federal income tax liability.
If the Distribution, together with related transactions, fails to qualify as a transaction that is generally tax-free for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Internal Revenue Code (the “Code”), in general, for U.S. federal income tax purposes, MDU Resources would recognize a taxable gain as if it had sold Everus common stock in a taxable sale for its fair market value, and MDU Resources stockholders who received our shares in the Distribution would be subject to tax as if they had received a taxable distribution equal to the fair market value of such shares.
Under the tax matters agreement we entered into with MDU Resources pursuant to the Separation and Distribution (the “tax matters agreement”), we may be required to indemnify MDU Resources against any additional taxes and related amounts resulting from the Separation and Distribution (and any related costs and other damages) to the extent such amounts resulted from (a) an acquisition of all or a portion of our equity securities or assets, whether by merger or otherwise (and regardless of whether we participated in or otherwise facilitated the acquisition), (b) other actions or failures to act by us or (c) any inaccuracy or breach of our representations, covenants or undertakings contained in any of the Separation-related agreements
and documents or in any documents relating to the IRS private letter ruling and/or the opinion(s) of tax advisors. Any such indemnity obligations could be material.
U.S. federal income tax consequences may restrict our ability to engage in certain desirable strategic or capital-raising transactions after the Separation.
Under current law, a separation can be rendered taxable to the parent corporation and its stockholders as a result of certain post-separation acquisitions of shares or assets of the spun-off corporation. For example, a separation may result in taxable gain to the parent corporation under Section 355(e) of the Code if the separation were deemed to be part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, shares representing a 50% or greater interest (by vote or value) in the spun-off corporation.
To preserve the U.S. federal income tax treatment of the Separation and Distribution, and in addition to our indemnity obligation described above, the tax matters agreement will restrict us for the two-year period following the Separation and Distribution, except in specific circumstances, from:
• entering into any transaction pursuant to which all or a portion of our common stock or assets would be acquired, whether by merger or otherwise;
• issuing equity securities beyond certain thresholds;
• repurchasing shares of our capital stock other than in certain open-market transactions;
• ceasing to actively conduct certain aspects of our business; or
• taking or failing to take any other action that would jeopardize the expected U.S. federal income tax treatment of the Distribution and certain related transactions.
These restrictions may limit our ability to pursue certain strategic transactions or other transactions that we may believe to be in the best interests of our stockholders or that might increase the value of our business.
As an independent, publicly traded company, we may not enjoy the same benefits that we did as a segment of MDU Resources.
Prior to the Separation, our business operated as one of MDU Resources’ business segments, and MDU Resources performed substantially all the corporate functions for Everus Construction’s operations, including managing financial and human resources systems, internal auditing, information technology, investor relations, treasury services, financial reporting, finance and tax administration, benefits administration, legal, risk management and regulatory functions. After the Separation, MDU Resources has provided support to us with respect to certain of these functions on a transitional basis under the transition services agreement. We have needed to replicate certain facilities, systems, infrastructure and personnel to which we no longer have access after the Separation and will likely continue to incur capital and other costs associated with developing and implementing our own support functions in these areas.
As an independent, publicly traded company, we have become more susceptible to market fluctuations and other adverse events than we would have been were we still a part of MDU Resources. As part of MDU Resources, we enjoyed certain benefits from MDU Resources’ operating diversity and available capital for investments. As an independent, publicly traded company, we do not have similar operating diversity and do not have similar access to capital markets, which could have a material adverse effect on our financial position, results of operations and cash flows.
We 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.
We may be unable to achieve the full strategic and financial benefits expected to result from the Separation, or such benefits may be delayed or not occur at all. We may not achieve these and other anticipated benefits for a variety of reasons, including, among others, that: (a) management may be required to spend significant amounts of time and effort on post-Separation activities, which may divert management’s attention from operating and growing our business; (b) we may be more susceptible to market fluctuations and other adverse events than if we were still a part of MDU Resources; (c) our business will be less diversified than MDU Resources’ business prior to the Separation; and (d) other actions required to separate us from MDU Resources that could disrupt our operations. If we fail to achieve some or all of the benefits expected to result from the
Separation, or if such benefits are delayed, it could have a material adverse effect on our financial position, results of operations and cash flows.
We or MDU Resources may fail to perform under various transaction agreements that were executed as part of the Separation or we may fail to have necessary systems and services in place when certain of the transaction agreements expire.
In connection with the Separation and Distribution, we entered into a separation and distribution agreement with MDU Resources and into various other agreements, including a transition services agreement, a tax matters agreement and an employee matters agreement. The separation and distribution agreement, the tax matters agreement and the employee matters agreement determined the allocation of assets and liabilities between the companies following the Separation for those respective areas and includes any necessary indemnifications related to liabilities and obligations. The transition services agreement provides for the performance of certain services by MDU Resources for our benefit, or in some cases certain services provided by us for the benefit of MDU Resources, for a limited period of time after the Separation. We will rely on MDU Resources to satisfy its obligations under these agreements. If MDU Resources is unable to satisfy its obligations under these agreements, including its indemnification obligations, we could incur operational difficulties or losses. If we do not have agreements with other providers of these services once certain transaction agreements expire or terminate, we may not be to operate our business effectively, which may have a material effect on our financial position, results of operations and cash flows.
Our inability to resolve favorably any disputes that arise between us and MDU Resources with respect to our past and ongoing relationships may adversely affect our operating results.
Disputes may arise between us and MDU Resources in a number of areas relating to our ongoing relationships, including:
• labor, tax, employee benefits, indemnification and other matters arising from our Separation from MDU Resources;
• employee retention and recruiting;
• business combinations involving us; and
• the nature, quality and pricing of services that we have agreed with MDU Resources to provide each other.
We may not be able to resolve potential conflicts, and even if we do, the resolution may be less favorable than if we were dealing with an unaffiliated party.
The agreements we entered into with MDU Resources may be amended upon mutual agreement between the parties.
In connection with the Separation from MDU Resources, MDU Resources agreed to indemnify us for certain liabilities and we agreed to indemnify MDU Resources for certain liabilities. If we are required to pay MDU Resources under these indemnities, our financial results could be negatively impacted. The MDU Resources indemnity may not be sufficient to hold us harmless from the full amount of liabilities for which MDU Resources will be allocated responsibility, and MDU Resources may not be able to satisfy its indemnification obligations in the future.
Pursuant to the separation and distribution agreement and certain other agreements with MDU Resources, MDU Resources agreed to indemnify us for certain liabilities, and we agreed to indemnify MDU Resources for certain liabilities, in each case for uncapped amounts. Indemnities that we may be required to provide MDU Resources are not subject to any cap, may be significant and could negatively impact our business, particularly with respect to indemnities provided in the tax matters agreement. Third parties could also seek to hold us responsible for any of the liabilities that MDU Resources has agreed to retain. Any amounts we are required to pay pursuant to these indemnification obligations and other liabilities could require us to divert cash that would otherwise have been used in furtherance of our operating business. Further, the indemnity from MDU Resources may not be sufficient to protect us against the full amount of such liabilities, and MDU Resources may not be able to fully satisfy its indemnification obligations. Moreover, even if we ultimately succeed in recovering from MDU Resources any amounts for which it is held liable, we may be temporarily required to bear these losses. Each of these risks could have a material effect on our financial position, results of operations and cash flows.
Certain members of management and directors hold our stock and stock in MDU Resources and may face actual or potential conflicts of interest.
Following the Separation and Distribution, certain members of our management and board and of MDU Resources own stock in both MDU Resources common stock and our common stock. This ownership overlap could create, or appear to create, potential conflicts of interest when our management and directors and MDU Resources’ management and directors face
decisions that could have different implications for us and MDU Resources. For example, potential conflicts of interest could arise in connection with the resolution of any dispute between MDU Resources and us regarding the terms of the agreements governing the Separation and Distribution and the relationship with MDU Resources thereafter. These agreements include the separation and distribution agreement, the tax matters agreement, the employee matters agreement and the transition services agreement and any commercial agreements between the parties or their affiliates. Potential conflicts of interest may also arise out of any commercial arrangements that we or MDU Resources may enter into in the future.
