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What changed in Koppers Holdings Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Koppers Holdings Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+250 added−241 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-28)

Top changes in Koppers Holdings Inc.'s 2024 10-K

250 paragraphs added · 241 removed · 203 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

56 edited+11 added−6 removed38 unchanged
Biggest changeWe believe another competitive advantage is provided by our strategic sourcing group, which procures scrap copper and other raw materials, such as chromic acid, tebuconazole, arsenic trioxide, colorants, dispersants and various biocides and co-biocides through the global market. 5 Koppers Holdings Inc. 2023 Annual Report Carbon Materials and Chemicals Our CMC business manufactures its primary products and sells them directly to our global customer base under long-term contracts or through purchase orders negotiated by our regional sales personnel and coordinated through our regional marketing groups.
Biggest changeLikewise, we believe that our marketing, engineering, environmental, regulatory and technical support services provide added value to our customer base. We believe another competitive advantage is provided by our strategic sourcing group, which procures scrap copper and other raw materials, such as chromic acid, tebuconazole, arsenic trioxide, colorants, dispersants and various biocides and co-biocides through the global market.
Performance Management To ensure our employees have the best opportunity for success, our performance development process includes periodic meetings between employees and managers to discuss their goals and strategies to achieve them. We no longer conduct traditional annual reviews and instead opt for these more frequent two-way discussions focused on fostering ideas that will enable employee success.
Performance Management To ensure our employees have the best opportunity for success, our performance development process includes periodic meetings between employees and managers to discuss their goals and strategies to achieve them. We no longer conduct traditional annual reviews and instead opt for these more frequent two-way discussions focused on fostering ideas that we believe will enable employee success.
We have incurred, and could incur in the future, significant costs if we fail to comply with regulations and responsibilities under environmental laws and regulations, including cleanup costs, civil and criminal penalties, injunctive relief and denial or loss of, or imposition of significant restrictions on, environmental permits.
We have incurred, and could incur in the future, significant costs if we fail to comply with responsibilities imposed under environmental laws and regulations, including cleanup costs, civil and criminal penalties, injunctive relief and denial or loss of, or imposition of significant restrictions on, environmental permits.
Our RUPS business manufactures its primary products and sells them directly to our customers through long-term contracts and purchase orders negotiated by our regional sales personnel and coordinated through our marketing group at corporate headquarters. 4 Koppers Holdings Inc. 2023 Annual Report Hardwoods, such as oak and other species, are the major raw materials in wood crossties.
Our RUPS business manufactures its primary products and sells them directly to our customers through long-term contracts and purchase orders negotiated by our regional sales personnel and coordinated through our marketing group at corporate headquarters. 4 Koppers Holdings Inc. 2024 Annual Report Hardwoods, such as oak and other species, are the major raw materials in wood crossties.
The RUPS business operates 18 wood treating plants and one rail joint bar manufacturing facility located throughout the United States, Canada and Australia. Our network of plants is strategically located near timber suppliers to enable us to access raw materials and service customers effectively. In addition, all of our crosstie treating plants are on our largest railroad customers’ rail lines.
The RUPS business operates 19 wood treating plants and one rail joint bar manufacturing facility located throughout the United States, Canada and Australia. Our network of plants is strategically located near timber suppliers to enable us to access raw materials and service customers effectively. In addition, all of our crosstie treating plants are on our largest railroad customers’ rail lines.
Railroad and Utility Products and Services Our RUPS business primarily sells pressure-treated railroad ties to the railroad industry in the United States and Canada and treated utility poles to utility markets in the eastern United States and Australia.
Railroad and Utility Products and Services Our RUPS business primarily sells pressure-treated railroad ties to the railroad industry in the United States and Canada and treated utility poles to utility markets in the United States and Australia.
We continue to evaluate and employ methods to identify at-risk behaviors during the hiring process to place prospective employees in appropriately suited positions where they can be successful and workplace injuries can be avoided. This behavioral data also enables us to tailor training and onboarding based on the opportunities it highlights.
We continue to evaluate and employ methods to identify at-risk behaviors during the hiring process to place prospective employees in appropriately suited positions where they can be successful and workplace injuries can be mitigated or avoided. This behavioral data also enables us to tailor training and onboarding based on the opportunities it highlights.
Our recent filings on Forms 10-K, 10-Q and 8-K and any amendments to those documents can be accessed without charge on our website under Investor Relations – Financials & Filings – SEC Filings or from the Securities and Exchange Commission at its website, www.sec.com , as soon as reasonably practicable after such filings are made with the Securities and Exchange Commission.
Our recent filings on Forms 10-K, 10-Q and 8-K and any amendments to those documents can be accessed without charge on our website under Investor Relations – Financials & Filings – SEC Filings or from the Securities and Exchange Commission at its website, www.sec.gov , as soon as reasonably practicable after such filings are made with the Securities and Exchange Commission.
Our Leadership Council, which consists of 11 members of senior management, is responsible for directing the development and implementation of the company's strategic plan and business operations around the globe. These executive leaders establish and maintain our commitment to ethics, integrity, fiscal responsibility, growth and sustainability. Internet Access Our Internet address is www.koppers.com .
Our Leadership Council, which consists of nine members of senior management, is responsible for directing the development and implementation of the company's strategic plan and business operations around the globe. These executive leaders establish and maintain our commitment to ethics, integrity, fiscal responsibility, growth and sustainability. Internet Access Our Internet address is www.koppers.com .
In the United States, our primary coal tar raw material supply contracts have remaining terms ranging from one to three years, and most provide options for renewal. Pricing under these contracts is either formula-based or negotiated on a quarterly or semi-annual basis.
In the United States, our primary coal tar raw material supply contracts have remaining terms ranging from one to two years, and most provide options for renewal. Pricing under these contracts is either formula-based or negotiated on a quarterly or semi-annual basis.
For our U.S.-based employees, we also offer four weeks of paid time-off for mothers and fathers who have a birth, adoption or foster children as part of our parental bonding leave program. Additionally, we offer work schedule flexibility including the opportunity to work remotely when conditions allow. We work with a Zero Harm approach to every employee’s health and safety.
For our U.S.-based employees, we also offer four weeks of paid time-off for mothers and fathers who have a birth, adoption or foster children as part of our parental bonding leave program. Additionally, we offer work schedule flexibility including the opportunity to work remotely when conditions allow. Zero Harm is our approach to ensure every employee’s health and safety.
We published our first Corporate Social Responsibility report (CSR) in 2008 and our historical CSR reports are available on www.koppers.com/pages/sustainability . The contents of our corporate website are not incorporated by reference in this Annual Report on Form 10-K or in any other report or document we file with the Securities and Exchange Commission.
We published our first Corporate Social Responsibility report (CSR) in 2008 and our historical CSR reports dating to 2020 are available on www.koppers.com/pages/sustainability . The contents of our corporate website are not incorporated by reference in this Annual Report on Form 10-K or in any other report or document we file with the Securities and Exchange Commission.
We purchase approximately 37 million pounds of scrap copper, our key raw material, in addition to other compounds containing copper which we process to meet the annual demand of this major market. When we purchase scrap copper, it is shipped to our manufacturing plants in Hubbell, Michigan and Millington, Tennessee for further processing into other copper compounds.
Each year, we purchase approximately 37 million pounds of our key raw material, scrap copper, in addition to other compounds containing copper which we process to meet the demand of this major market. When we purchase scrap copper, it is shipped to our manufacturing plants in Hubbell, Michigan and Millington, Tennessee for further processing into other copper compounds.
Employees worldwide volunteer their time to mentor students, enhance local education initiatives, take care of the elderly, assist at homeless shelters and provide hands-on help to those affected by natural disasters. We believe our ability to positively impact our communities and environment starts with investing in our employees.
Employees worldwide volunteer their time to mentor students, enhance local education initiatives, care for the elderly, assist at homeless shelters and provide hands-on help to those affected by natural disasters. We believe our ability to positively impact our communities and environment starts with investing in our employees.
Our three coal tar distillation facilities and five carbon materials terminals give us the ability to offer customers multiple sourcing options and a consistent supply of high-quality products.
Our three coal tar distillation facilities and two carbon materials terminals give us the ability to offer customers multiple sourcing options and a consistent supply of high-quality products.
We also have relationships with many of the approximately 615 short-line and regional rail lines. This also forms the customer base for our rail joint bar products.
We also have relationships with many of the approximately 630 short-line and regional rail lines. This also forms the customer base for our rail joint bar products.
Our RUPS business’ largest customer base is the North American Class I railroad market, which buys approximately 80 percent of all crossties produced in the United States and Canada. Approximately 75 percent of our North American Railroad Products and Services sales are under long-term contracts, and we currently supply all North American Class I railroads.
Our RUPS business’ largest customer base is the North American Class I railroad market, which buys approximately 70 percent of all crossties produced in the United States and Canada. Approximately 73 percent of our North American Railroad Products and Services sales are under long-term contracts, and we currently supply all North American Class I railroads.
These advantages provide for security of supply and logistics advantages for our customers. Technology and Licensing In 1988, we acquired the Koppers trademark from Koppers Company, Inc. The association of the name with the chemical, building, wood preservation and coke industries is beneficial to our company, as it represents long-standing, high quality products.
These advantages provide for security of supply and logistics advantages for our customers. 6 Koppers Holdings Inc. 2024 Annual Report Technology and Licensing In 1988, we acquired the Koppers trademark from Koppers Company, Inc. The association of the name with the chemical, building, wood preservation and coke industries is beneficial to our company, as it represents long-standing, high quality products.
PC supplies all of the ten largest lumber treating companies in the United States, the largest treated wood market in the world, in addition to the three largest lumber treating companies in Canada. In North America, our PC business is vertically integrated through the manufacturing of copper compounds for our copper-based wood preservatives.
PC supplies the ten largest lumber treating companies in the United States, the largest treated wood market in the world, in addition to four of the five largest lumber treating companies in Canada. In North America, our PC business is vertically integrated through the manufacturing of copper compounds for our copper-based wood preservatives.
Key to this effort is delivering a consistent onboarding experience, as well as communications and safety training in all of our facilities across the globe. 7 Koppers Holdings Inc. 2023 Annual Report Talent Attraction and Retention Our talented employees are a critical element to make our business successful, so it is essential that we position them for success.
Key to this effort is delivering a consistent onboarding experience, as well as communications and safety training in all of our facilities across the globe. Talent Attraction and Retention Our talented employees are a critical element to make our business successful, so it is essential that we position them for success.
Risk Factors – Risks Related to Our Business – We are subject to risks inherent in foreign operations, including additional legal regulation and changes in social, political and economic conditions.
See also Item 1A. Risk Factors – Risks Related to Our Business – We are subject to risks inherent in foreign operations, including additional legal regulation and changes in social, political and economic conditions.
The program gives our employees the opportunity to buy shares at a discount through payroll deductions during defined quarterly offering periods. 8 Koppers Holdings Inc. 2023 Annual Report Health and Safety We believe a robust wellness program that encourages employee participation is key to promoting healthy lifestyles and decision-making.
The program gives our employees the opportunity to buy shares at a discount through payroll deductions during defined quarterly offering periods. Health and Safety We believe a robust wellness program that encourages employee participation is key to promoting healthy lifestyles and decision-making.
Through our PC business, we produce a variety of products, including chromated copper arsenate (CCA) and dichloro-octyl-isothiazolinone (DCOI), which is used in the pressure treatment of utility poles and pilings.
Our RUPS and PC operations are also vertically integrated. Through our PC business, we produce a variety of products, including chromated copper arsenate (CCA) and dichloro-octyl-isothiazolinone (DCOI), which is used in the pressure treatment of utility poles and pilings.
We utilize swap contracts to hedge our exposure to copper prices. We believe that being vertically integrated in copper manufacturing provides PC with an important competitive advantage and also provides our customers with the security of a supply of copper-based wood preservatives.
We utilize swap contracts to hedge our exposure to copper prices. 5 Koppers Holdings Inc. 2024 Annual Report We believe that being vertically integrated in copper manufacturing provides PC with an important competitive advantage and also provides our customers with the security of a supply of copper-based wood preservatives.
In addition, we have businesses which have product life cycle management capabilities to help solve our customers’ challenge of responsibly disposing of end-of-life crossties by repurposing used wood products, including as a fuel source. This reduces the end-of-life impact of our ties, contributing to greater product sustainability.
In addition, we have businesses which have product life cycle management capabilities to help solve our customers’ challenge of responsibly disposing of end-of-life crossties by repurposing used wood products, including as a fuel source.
The labor contract at one of our facilities covering 59 employees is scheduled to expire during 2024. Human Capital Management Our ability to positively affect our communities starts with investing in our people. We put the health, safety and well-being of our employees at the forefront of everything we do as part of our Zero Harm culture.
The labor contracts at three of our facilities covering approximately 150 employees are scheduled to expire during 2025. Human Capital Management Our ability to positively affect our communities starts with investing in our people. We put the health, safety and well-being of our employees at the forefront of everything we do as part of our Zero Harm culture (discussed herein).
A major component of this plan is our commitment to providing each employee with the training and education they need to be successful. Under the umbrella of our Koppers College, we provide leadership development training to our front-line employees to expand their growth opportunities within the organization.
A major component of this plan is our commitment to providing each employee with the training and education they need to be successful. Under the umbrella of Koppers College, we provide leadership development training to employees at all levels of the organization through various program offerings with the goal of expanding their growth opportunities within the organization.
Therefore, we are subject to certain risks that are inherent to foreign operations, including complying with applicable laws relating to foreign practices, the laws of foreign countries in which we operate, political and economic conditions in international markets, the imposition of tariffs and fluctuations in foreign exchange rates. See also Item 1A.
Operations Koppers has a significant investment in non-U.S. operations. Therefore, we are subject to certain risks that are inherent to foreign operations, including complying with applicable laws relating to foreign practices, the laws of foreign countries in which we operate, political and economic conditions in international markets, the imposition of tariffs and fluctuations in foreign exchange rates.
Social We are committed to proactively evaluating and addressing community needs in the areas where we operate. Many of our locations have made strong connections with local community members, allowing Koppers representatives to share facility information and address any questions, observations, concerns and ideas. Our community impact is demonstrated through our employees’ volunteer commitments and a corporate philanthropy program.
Many of our locations have made strong connections with local community members, allowing Koppers representatives to share facility information and address any questions, observations, concerns and ideas. Our community impact is demonstrated through our employees’ volunteer commitments and a corporate philanthropy program.
There are five board committees, including: Audit; Nominating and Corporate Governance; Management Development and Compensation; Strategy and Risk; and Sustainability. Among its duties and responsibilities, the board oversees management’s direction of the legal, ethical and socially responsible behavior of the company, such as developing effective performance measurement systems, reviewing the company's long-term strategy and overseeing risk management processes.
Among its duties and responsibilities, the board oversees management’s direction of the legal, ethical and socially responsible behavior of the company, such as developing effective performance measurement systems, reviewing the company's long-term strategy and overseeing risk management processes.
Each manager is expected to meet one-on-one at least monthly with their employees to discuss tailored strategies to encourage employee success like additional training, attendance at conferences or establishing connections to others within our company. These monthly meetings also help managers gauge employee engagement and develop approaches to increase and sustain positive engagement.
Each manager is expected to meet one-on-one at least monthly with their employees to discuss tailored strategies to encourage success in their roles and development opportunities such as additional training, attendance of conferences or networking within the company. These monthly meetings also help managers gauge employee engagement and develop approaches to increase and sustain positive engagement and performance.
When the company achieves the established performance target, employees share in this success through an automatic contribution to their 401(k) accounts. We also offer our employees the option to acquire Koppers stock through an employee stock purchase program.
The U.S. 401(k) program includes both traditional matching and an additional non-elective company contribution based on organizational performance. When the company achieves the established performance target, employees share in this success through an automatic contribution to their 401(k) accounts. We also offer our employees the option to acquire Koppers stock through an employee stock purchase program.
Zero Harm includes policies that guide our safety practices and procedures throughout all of our facilities, a focus on leading activities that prevent accidents and a leadership culture that insists the health and safety of our employees comes ahead of everything we do.
Zero Harm includes global policies that guide our health and safety practices throughout all our facilities, focusing on leading activities that identify hazards and prevent accidents, and a leadership culture that insists the health and safety of our employees is the top priority in everything we do.
Through our CMC business, we believe we are the largest global supplier of creosote to the North American railroad industry. Through our PC business, we believe that we are the global leader in developing, manufacturing and marketing wood preservation chemicals and wood treatment technologies for use in the pressure treating of lumber for residential, industrial and agricultural applications.
Through our PC business, we believe that we are the global leader in developing, manufacturing and marketing wood preservation chemicals and wood treatment technologies for use in the pressure treating of lumber for residential, industrial and agricultural applications. Our RUPS and CMC operations are, to a substantial extent, vertically integrated.
Our RUPS and CMC operations are, to a substantial extent, vertically integrated. Through our CMC business, we process coal tar into a variety of products, including creosote, which is an intermediate material necessary in the pressure treatment of wood crossties, other related railroad products and utility poles.
Through our CMC business, we process coal tar into a variety of products, including creosote, which is an intermediate material necessary in the pressure treatment of wood crossties, other related railroad products and utility poles. The majority of the creosote we produce in North America and Europe is sold internally to our RUPS business and consumed in the treating process.
Employees and Employee Relations As of December 31, 2023, we had 971 salaried employees and 1,137 non-salaried employees. Listed below is a breakdown of employees by our businesses, including administration.
Employees and Employee Relations Listed below is a breakdown of employees by our businesses, including administration as of December 31, 2024.
The contents of our Internet site are not incorporated by reference into this document.
The contents of our Internet site are not incorporated by reference into this document. 10 Koppers Holdings Inc. 2024 Annual Report
Additionally, we are a leading supplier of fire-retardant chemicals (FlamePro®) for pressure treatment of wood, primarily in commercial construction, where applicable. Because we are a global supplier of wood preservatives, we face various competitors in all the geographic regions in which we participate.
The primary applications for these products include decking, fencing, utility poles, construction lumber and timbers, and various agricultural uses. Additionally, we are a leading supplier of fire-retardant chemicals (FlamePro®) for pressure treatment of wood, primarily in commercial construction. Because we are a global supplier of wood preservatives, we face various competitors in all the geographic regions in which we participate.
Our RUPS business carries significant amounts of untreated crosstie inventory, which typically requires air-seasoning for a period of six to nine months. 6 Koppers Holdings Inc. 2023 Annual Report Seasonality Demand for residential, commercial, and agricultural treated lumber may decline during winter months due to weather conditions.
Our RUPS business carries significant amounts of untreated crosstie inventory, which typically requires air-seasoning for a period of six to nine months. Seasonality Demand for residential, commercial, and agricultural treated lumber may decline during winter months due to weather conditions. In addition, inclement or winter weather may affect access to certain raw materials or impact operations at our facilities.
Business Segments and Products We operate three principal business segments: Railroad and Utility Products and Services (RUPS), Performance Chemicals (PC) and Carbon Materials and Chemicals (CMC). We believe our three business segments command leading market positions. Through our RUPS business, we believe that we are the largest supplier of railroad crossties to the Class I railroads in North America.
Business Segments and Products We operate three principal business segments: Railroad and Utility Products and Services (RUPS), Performance Chemicals (PC) and Carbon Materials and Chemicals (CMC). We believe our three business segments command leading market positions.
This Code of Conduct applies to all employees, whether we are engaging in peer-to-peer interactions, working to comply with complex regulations, marketing our products, purchasing materials, creating new products, managing our finances or interacting with our communities. Our board of directors is broadly responsible for contributing to the strategic direction and oversight of the company.
We maintain a comprehensive Code of Conduct that details the expectations and requirements we have as an organization for our employees. This Code of Conduct applies to all employees, whether we are engaging in peer-to-peer interactions, working to comply with complex regulations, marketing our products, purchasing materials, creating new products, managing our finances or interacting with our communities and customers.
Our global inclusion and diversity initiative focuses on supporting our strategy to be an employer of choice and helps to ensure that all employees feel they are heard and valued to harness the power of an engaged workforce.
Our global inclusion initiative focuses on supporting our strategy to be an employer of choice and helps to ensure that all employees feel they are heard and valued to harness the power of an engaged workforce. Compensation and Benefits We encourage employee participation in our benefit programs for saving for retirement through robust defined contribution and employee stock purchase programs.
Our primary European tar supply contract has a remaining term of approximately one year, extending indefinitely thereafter unless terminated by a one-year advance notice, and contains formula-based tar pricing. Finally, our primary Australian supply contracts have remaining terms up to four years and contain formula-based pricing which is adjusted on an annual or semi-annual basis.
Our primary Australian supply contracts have remaining terms up to five years and contain formula-based pricing which is adjusted on an annual or semi-annual basis. Finally, our European business does not have a long-term tar supply contract in place but is negotiating commercial contracts periodically.
Most of these poles are purchased from large timber owners and individual landowners and shipped to one of our pole-peeling facilities. In North America and Australia, in addition to utility poles, we market pilings for marine applications and smaller poles to the agricultural landscape and vineyard markets.
Utility poles are produced mainly from pine species in the United States and eucalyptus species in Australia. Most of these poles are purchased from large timber owners and individual landowners and shipped to one of our pole-peeling facilities.
In response, we embarked on a global restructuring plan in 2014 and reduced our global number of coal tar distillation facilities to three as of December 31, 2023.
For years, the coal tar distillation industry has operated in an excess capacity mode, which further increased the competition for a limited amount of coal tar in North America and Europe. In response, we embarked on a global restructuring plan in 2014 and reduced our global number of coal tar distillation facilities to three as of December 31, 2024.
We believe our North American utility pole business is the second largest producer of utility poles in the United States, and we believe our Australian utility pole business is the largest producer of utility poles in Australia. Utility poles are produced mainly from pine species in the United States and eucalyptus species in Australia.
We believe our North American utility pole business is the second largest supplier of utility poles in the United States, and we believe our Australian utility pole business is the largest supplier of utility poles in Australia. Our North American utility pole business serves eight of the top ten utilities, based on customer base and revenue, in the United States.
Governance We believe our corporate governance structure is designed to assure accountability to our stakeholders and to make certain that we conduct business in a responsible, ethical way. We maintain a comprehensive Code of Conduct that details the expectations and requirements we have as an organization for our employees.
We have launched four such employee resource groups over the past seven years, which serve as a model for future groups: LINKwomen, LINKparents, LINKup and LINKability. Governance We believe our corporate governance structure is designed to assure accountability to our stakeholders and to make certain that we conduct business in a responsible, ethical way.
In addition, inclement or winter weather may affect access to certain raw materials or impact operations at our facilities. As a result, operating results may vary from quarter to quarter depending on the severity of weather conditions and other variables affecting our products.
As a result, operating results may vary from quarter to quarter depending on the severity of weather conditions and other variables affecting our products. Historically, our operating results have been significantly lower in the first and fourth calendar quarters as compared to the second and third calendar quarters.
All Koppers employees take part in safety training programs and provide direct feedback to leadership as part of the company’s annual engagement survey. 9 Koppers Holdings Inc. 2023 Annual Report ▪ Inclusion and Diversity – We are committed to supporting inclusion and diversity in process and practice.
All Koppers employees take part in safety training programs and provide direct feedback to leadership as part of the company’s annual engagement survey. ▪ Inclusion – We are committed to creating a culture that supports inclusion. Our employee resource groups, which are organized around employee affinities and are open to all employees, provide an important development forum for employees.
Business Salaried Non-Salaried Total Railroad and Utility Products and Services 348 802 1,150 Performance Chemicals 233 122 355 Carbon Materials and Chemicals 232 204 436 Administration 158 9 167 Total Employees 971 1,137 2,108 Approximately 500 of our employees are represented by a number of different labor unions and are covered under numerous labor agreements.
Business Salaried Non-Salaried Total Railroad and Utility Products and Services 364 781 1,145 Performance Chemicals 232 119 351 Carbon Materials and Chemicals 209 208 417 Administration 165 4 169 Total Employees 970 1,112 2,082 7 Koppers Holdings Inc. 2024 Annual Report Approximately 460 of our employees are represented by a number of different labor unions and are covered under numerous labor agreements.
We treat poles with a variety of preservatives, including CCA, DCOI and creosote, which we produce internally and purchase from PC and CMC. Performance Chemicals Our PC business maintains sales and manufacturing capabilities in the United States, Canada, Europe, South America, Australia and New Zealand.
In North America and Australia, in addition to utility poles, we market pilings for marine applications and smaller poles to the agricultural landscape and vineyard markets. We treat poles with a variety of preservatives, including CCA, DCOI and creosote, which we produce internally and purchase from PC and CMC.
Risk Factors – Risks Related to Our Business – Demand for our products is cyclical and we may experience prolonged depressed market conditions for our products. Non-U.S. Operations Koppers has a significant investment in non-U.S. operations.
Segment Information Please see Note 9 – Segment Information, under Item 8 of this Form 10-K for financial information relating to business segments and geographic areas. See also Item 1A. Risk Factors – Risks Related to Our Business – Demand for our products is cyclical and we may experience prolonged depressed market conditions for our products. Non-U.S.
The primary products supplied by PC are copper-based wood preservatives, including micronized copper azole (MicroPro®), micronized pigments (MicroShades®), alkaline copper quaternary, amine copper azole, DCOI and CCA. The primary applications for these products include decking, fencing, utility poles, construction lumber and timbers, and various agricultural uses.
Performance Chemicals Our PC business maintains sales and manufacturing capabilities in the United States, Canada, Europe, South America and Australasia. The primary products supplied by PC are copper-based wood preservatives, including micronized copper azole (MicroPro®), micronized pigments (MicroShades®), alkaline copper quaternary, amine copper azole, DCOI and CCA.
During the distillation process, heat and vacuum are utilized to separate coal tar into three primary components: chemical oils, distillate and carbon pitch. For years, the coal tar distillation industry has operated in an excess capacity mode, which further increased the competition for a limited amount of coal tar in North America and Europe.
During the distillation process, heat and vacuum are utilized to separate coal tar into three primary components: chemical oils, distillate and carbon pitch. In December 2024, we decided to discontinue phthalic anhydride production at our facility in Stickney, Illinois.
We also foster innovation and develop our next wave of high-potential employees through our leadership forum, an intensive nine-month program conducted in partnership with a university local to our corporate headquarters. Approximately ten to twelve employees from across the world are chosen annually for each cohort.
These programs, ranging from one week to several months, are designed to foster innovation and cultivate the next generation of leaders. The Koppers Leadership Forum identifies high-potential employees and enrolls them in an intensive nine-month program. This program is conducted in collaboration with a local university.
Selected participants travel to our corporate headquarters to take part in workshops facilitated by university professors and business leaders. We also offer our employees a tuition reimbursement program to help them pursue degrees and certifications related to relevant skills they utilize for their positions to further personal and company success.
In addition to our in-house training and development opportunities, we also offer our employees a tuition reimbursement program to help pursue degrees and certifications related to relevant skills they utilize for their positions to further personal and company success. 8 Koppers Holdings Inc. 2024 Annual Report Inclusion We support an inclusive and diverse work environment across our company through a range of programs that create equal employment opportunities and a culture of belonging.
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The majority of the creosote we produce in North America and Europe is sold internally to our RUPS business and consumed in the treating process. Our RUPS and PC operations are also vertically integrated.
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Through our RUPS business, we believe that we are the largest supplier of railroad crossties to the Class I railroads in North America and the second largest producer of utility poles in the United States. Through our CMC business, we believe we are the largest global supplier of creosote to the North American railroad industry.
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Likewise, we believe that our marketing, engineering, and technical support services provide added value to our customer base, who supply pressure-treated wood products to large retailers and independent lumber dealers.
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In April 2024, we completed our acquisition of substantially all of the assets of Brown Wood Preserving Company, Inc. and certain of its affiliates (Brown Wood) for approximately $100 million in cash, after post-closing working capital adjustments. Brown Wood is a utility pole treating business with principal operating locations in Alabama and Mississippi.
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Historically, our operating results have been significantly lower in the first and fourth calendar quarters as compared to the second and third calendar quarters. Segment Information Please see Note 9 – Segment Information, under Item 8 of this Form 10-K for financial information relating to business segments and geographic areas. See also Item 1A.
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The business we acquired, as well as the sales function, has been operationally integrated into our existing network of utility pole plants and distribution yards. We believe the acquisition increased our presence in existing markets and offers an attractive entry point to new geographic markets for our utility pole business.
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Inclusion and Diversity We support an inclusive and diverse work environment across our company through a range of strategic programs. Our internal processes and programs target inclusion and diversity as a key area of importance, and externally we place emphasis on the topic during philanthropic activities.
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Carbon Materials and Chemicals Our CMC business manufactures its primary products and sells them directly to our global customer base under long-term contracts or through purchase orders negotiated by our regional sales personnel and coordinated through our regional marketing groups.
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Compensation and Benefits We encourage employee participation in our benefit programs for saving for retirement through robust defined contribution and employee stock purchase programs. The U.S. 401(k) program includes both traditional matching and an additional non-elective company contribution based on organizational performance.
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The decision was driven by significant near-term capital spending requirements that could not be economically justified by end-market projections and the ability to substantially reduce annual emissions of certain regulated air contaminants.
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Our Culture and Engagement team ensures that a diverse slate of candidates is considered for open positions. Our employee resource groups, LINKWomen, which was launched in 2018, LINKParents, which was launched in 2021, and LINKUp (young professionals), which was launched in 2024, provide an important development forum for employees and serve as a model for future initiatives.
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We have targeted mid-2025 for shutdown and expect to ramp down production of phthalic anhydride in the first half of 2025 as we build inventory to supply existing contracts through 2025, as necessary. Once the shutdown is complete, our CMC business will no longer manufacture phthalic anhydride.
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Approximately ten to twelve employees from across the world are chosen annually for each cohort. Selected participants travel to our corporate headquarters to take part in workshops facilitated by university professors and business leaders. Our global Learning Management System (LMS) offers a comprehensive range of online educational opportunities across all disciplines.
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The platform is designed to support continuous learning and professional development at every level of the organization.
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This reduces the end-of-life impact of our ties, contributing to greater product sustainability. 9 Koppers Holdings Inc. 2024 Annual Report Social We are committed to proactively evaluating and addressing community needs in the areas where we operate.
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Our board of directors is broadly responsible for contributing to the strategic direction and oversight of the company. There are five standing board committees, including: Audit; Nominating and Corporate Governance; Management Development and Compensation; Strategy and Risk; and Sustainability.
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Additionally, we routinely post additional important information, including press releases, investor presentations, and notices of upcoming events under the "Investor Relations" section of our website and recognize our website as a channel of distribution to reach public investors and as a means of disclosing (including initially or exclusively) material non-public information for complying with disclosure obligations under Regulation FD.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf these increased costs cannot be passed through to our customers, it could result in reduced profitability for our coal tar-based products. ▪ Our price realizations and profit margins for phthalic anhydride have historically fluctuated with the price of orthoxylene and its relationship with phthalic anhydride; however, during periods of excess supplies of phthalic anhydride, profitability may be reduced despite high levels for orthoxylene prices. ▪ Our price realizations and profit margins for phthalic anhydride, naphthalene and carbon black feedstock have historically fluctuated with the market price of crude oil, market prices for chemicals derived from crude oil, such as orthoxylene, or market indices derived from crude oil. ▪ We import certain raw materials that are used in our products that are, or may become, subject to tariffs, trade restrictions or supply chain disruptions.
Biggest changeIf these increased costs cannot be passed through to our customers, it could result in reduced profitability for our coal tar-based products. ▪ Our price realizations and profit margins for phthalic anhydride, naphthalene and carbon black feedstock have historically fluctuated with the market price of crude oil, market prices for chemicals derived from crude oil, such as ortho-xylene, or market indices derived from crude oil.
Environmental Protection Agency’s regulation under the Federal Insecticide, Fungicide, and Rodenticide Act which requires the registration and authorization of antimicrobial pesticide products to be used for various applications in the United States; ▪ the Health Canada Pest Management Regulatory Agency and its Pest Control Products Act which requires the registration and authorization of antimicrobial pesticide products to be used for various applications in Canada; ▪ the European Union’s regulation under the Registration Evaluation Authorization and Restriction of Chemicals, which requires manufacturers or importers of substances manufactured or imported into the European Union in quantities of one ton per year or more to register with a central European Chemicals Agency; ▪ the European Union’s regulation under the Biocidal Products Regulation, which requires a biocidal product to be authorized by the European Chemicals Agency before it can be marketed or used in the European Union; ▪ the Great Britain Biocidal Products Regulation, which requires a biocidal product to be authorized before it can be marketed or used in Great Britain; and ▪ other matters relating to environmental protection and various health and safety matters.
Environmental Protection Agency’s regulation under the Federal Insecticide, Fungicide, and Rodenticide Act which requires the registration and authorization of antimicrobial pesticide products to be used for various applications in the United States; ▪ the Health Canada Pest Management Regulatory Agency and its Pest Control Products Act which requires the registration and authorization of antimicrobial pesticide products to be used for various applications in Canada; ▪ the European Union’s regulation under the Registration Evaluation Authorization and Restriction of Chemicals, which requires manufacturers or importers of substances manufactured or imported into the European Union in quantities of one ton per year or more to register with a central European Chemicals Agency; ▪ the European Union’s regulation under the Biocidal Products Regulation, which requires a biocidal product to be authorized by the European Chemicals Agency before it can be marketed or used in the European Union; ▪ the Great Britain Biocidal Products Regulation, which requires a biocidal product to be authorized before it can be marketed or used in Great Britain; and ▪ other matters relating to environmental protection, health and safety.
As the prevalence of cyberattacks continues to increase, our information technology systems may be subject to increased security threats and we may incur additional costs to upgrade and maintain our security measures in place to prevent and detect such threats.
As the prevalence of cyberattacks continues to increase, our information technology systems may be subject to increased security threats and we may incur additional costs to upgrade and maintain our security measures in place to detect and prevent such threats.
The security and privacy measures that our vendors and customers implement may not be sufficient to prevent and detect cyberattacks that could have a material adverse effect on our financial condition, results of operations and cash flows.
The security and privacy measures that our vendors and customers implement may not be sufficient to detect and prevent cyberattacks that could have a material adverse effect on our financial condition, results of operations and cash flows.
There can be no assurance that our deposits in excess of the FDIC or other comparable insurance limits will be backstopped by the U.S. or applicable foreign government, or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions or by acquisition in the event of a failure or liquidity crisis.
There can be no assurance that our deposits in excess of the FDIC or other comparable insurance limits will be backstopped by the U.S. or applicable foreign governments, or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions or by acquisition in the event of a failure or liquidity crisis.
In addition, geopolitical events, such as systemic political or economic instability, civil unrest, outbreak of war or expansion of hostilities or acts of terrorism, whether occurring in the United States or abroad, could disrupt our operations or the operations of one or more of our raw material suppliers or customers, or could severely damage or destroy one or more of our facilities located in the affected areas, which could in turn adversely affect our ability to obtain raw materials from our suppliers or transport products to our customers.
In addition, geopolitical events, such as systemic political or economic instability, civil unrest, outbreak of war or expansion of hostilities or acts of terrorism, whether occurring in the United States or abroad, could disrupt our operations or the operations of one or more of our raw material suppliers or customers, or could severely damage or destroy one or more of our facilities located in the affected areas, which could in turn adversely affect our ability to obtain raw materials from our suppliers, manufacture final products from the raw materials, or transport products to our customers.
This could cause a material increase to our inventory carrying costs and, in the event of falling market prices for our end products, result in significant charges to write-down inventory to market prices. 21 Koppers Holdings Inc. 2023 Annual Report Health concerns arising from the outbreak of a health epidemic or pandemic may have an adverse effect on our business, operating results and financial condition.
This could cause a material increase to our inventory carrying costs and, in the event of falling market prices for our end products, result in significant charges to write-down inventory to market prices. 21 Koppers Holdings Inc. 2024 Annual Report Health concerns arising from the outbreak of a health epidemic or pandemic may have an adverse effect on our business, operating results and financial condition.
Furthermore, we are a holding company with no operations, and unless we receive dividends, distributions, advances, transfers of funds or other payments from our subsidiaries, we will be unable to pay dividends on our common stock. 20 Koppers Holdings Inc. 2023 Annual Report Provisions of our charter documents may inhibit a takeover, which could negatively affect our stock price.
Furthermore, we are a holding company with no operations, and unless we receive dividends, distributions, advances, transfers of funds or other payments from our subsidiaries, we will be unable to pay dividends on our common stock. 20 Koppers Holdings Inc. 2024 Annual Report Provisions of our charter documents may inhibit a takeover, which could negatively affect our stock price.
If one or more analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline. 23 Koppers Holdings Inc. 2023 Annual Report Future sales, or the perception of future sales, of a substantial amount of our common stock may depress the price of the shares of our common stock .
If one or more analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline. 23 Koppers Holdings Inc. 2024 Annual Report Future sales, or the perception of future sales, of a substantial amount of our common stock may depress the price of the shares of our common stock .
There are no assurances that our security measures, our business continuity and disaster recovery plans or actions or our investments to improve the maturity of our systems, processes and risk management framework to remediate vulnerabilities will be sufficient or completed quickly enough to prevent or detect or limit the impact of critical adverse events such as cyberattacks or security breaches.
There are no assurances that our security measures, our business continuity and disaster recovery plans or actions or our investments to improve the maturity of our systems, processes and risk management framework to mitigate vulnerabilities will be sufficient or completed quickly enough to prevent or detect or limit the impact of critical adverse events such as cyberattacks or security breaches.
Also, efforts to acquire other businesses or the implementation of other elements of this business strategy may divert managerial resources away from our business operations.
Also, efforts to divest businesses, acquire other businesses or the implementation of other elements of this business strategy may divert managerial resources away from our business operations.
Global climate change may exacerbate the frequency and intensity of adverse weather conditions or natural disasters, such as wildfires, hurricanes, tornadoes, drought, water shortages, rainfall, unseasonably warm winter months, or other weather events, many of which have increased in severity in recent years, in geographic areas where our products are manufactured, distributed, sold and used and where our supply chains are located, and our sales and operating results may be affected to a greater degree than we have previously experienced.
Global climate change may exacerbate the frequency and intensity of adverse weather conditions or natural disasters, such as wildfires, hurricanes, tornadoes, droughts, water shortages, rainfall, unseasonably warm or cold winter months, or other weather events, many of which have increased in severity in recent years, in geographic areas where our products are manufactured, distributed, sold and used and where our supply chains are located, and our sales and operating results may be affected to a greater degree than we have previously experienced.
Adverse developments in an audit, examination or litigation related to previously filed tax returns, or in the relevant jurisdiction’s tax laws, regulations, administrative practices, principles and interpretations could have a material effect on our results of operations and cash flows in the period or periods for which that development occurs, as well as for subsequent periods. 22 Koppers Holdings Inc. 2023 Annual Report Our strategy to selectively pursue complementary acquisitions may present unforeseen obstacles, risks or costs.
Adverse developments in an audit, examination or litigation related to previously filed tax returns, or in the relevant jurisdiction’s tax laws, regulations, administrative practices, principles and interpretations could have a material effect on our results of operations and cash flows in the period or periods for which that development occurs, as well as for subsequent periods. 22 Koppers Holdings Inc. 2024 Annual Report Our strategy to selectively pursue complementary acquisitions or divestitures may present unforeseen obstacles, risks or costs.
We believe that we will have continuing significant expenditures associated with compliance with environmental laws and regulations and, to the extent not covered by insurance or available recoveries under third-party indemnification arrangements, for present and future remediation efforts at plant sites and third-party waste sites and other liabilities associated with environmental matters.
We believe that we will have continuing significant expenditures associated with compliance with environmental laws and regulations and, to the extent not covered by insurance or available recoveries under third-party indemnification arrangements, for present and future remediation efforts at our sites and third-party waste sites and other liabilities associated with environmental matters.
Our suppliers may be experiencing similar conditions which could impact their ability to supply us with raw materials and otherwise fulfill their obligations to us. If global economic conditions deteriorate significantly, there could be a material adverse effect to our results of operations, financial condition and cash flows.
Our suppliers may experience similar conditions which could impact their ability to supply us with raw materials and otherwise fulfill their obligations to us. If global economic conditions deteriorate significantly, there could be a material adverse effect to our results of operations, financial condition and cash flows.
We may not be able to successfully identify suitable acquisition or joint venture opportunities or complete any particular acquisition, combination, joint venture or other transaction on acceptable terms. We cannot predict the timing and success of our efforts to acquire any particular business.
We may not be able to successfully identify suitable acquisition or joint venture opportunities or complete any particular acquisition, combination, joint venture, divestiture or other transaction on acceptable terms. We cannot predict the timing and success of our efforts to acquire or divest any particular business.
The actual costs to close a manufacturing facility may exceed our original cost estimate and may have a material adverse effect on our financial condition, cash flow from operations and results from operations. 19 Koppers Holdings Inc. 2023 Annual Report We may be subject to information technology systems failures, network disruptions and breaches of data security, which could harm our relationships with our customers and third-party business partners, subject us to negative publicity and litigation and cause substantial harm to our business.
The actual costs to close a manufacturing facility may exceed our original cost estimates and may have a material adverse effect on our financial condition, cash flow from operations and results from operations. 19 Koppers Holdings Inc. 2024 Annual Report We may be subject to information technology systems failures, network disruptions and breaches of data security, which could harm our relationships with our customers and third-party business partners, subject us to negative publicity and litigation and cause substantial harm to our business.
We bear the cost of compliance with the GDPR and are subject to fines and penalties in the event of a breach of the GDPR, which could have an adverse impact on our business, financial condition or results of operations. 18 Koppers Holdings Inc. 2023 Annual Report Political and financial instability can lead to economic uncertainty and may adversely impact our business.
We bear the cost of compliance with the GDPR and are subject to fines and penalties in the event of a breach of the GDPR, which could have an adverse impact on our business, financial condition and results of operations. 18 Koppers Holdings Inc. 2024 Annual Report Political and financial instability can lead to economic uncertainty and may adversely impact our business.
We have recently experienced increased labor shortages at some of our production facilities and other locations.
We have experienced increased labor shortages at some of our production facilities and other locations.
For example, due to the Russian invasion of Ukraine, our European-based CMC business lost a substantial portion of its coal tar requirements that were previously sourced from the Russian Federation and Ukraine.
For example, due to the Russian invasion of Ukraine, our European-based CMC business lost a substantial portion of its coal tar supply that were previously sourced from the Russian Federation and Ukraine.
During 2022, the Australian Competition and Consumer Commission and the Australian Securities and Investments Commission both announced they would be increasing monitoring of, and penalties for, misleading statements in relation to net zero commitments.
The Australian Competition and Consumer Commission and the Australian Securities and Investments Commission both announced they would be increasing monitoring of, and penalties for, misleading statements in relation to net zero commitments.
The following additional provisions could make it more difficult for shareholders to effect certain corporate actions: ▪ Our shareholders will be able to remove directors only for cause by the affirmative vote of the holders of a majority of the outstanding shares of our capital stock entitled to vote in the election of directors.
The following additional provisions could make it more difficult for shareholders to effect certain corporate actions: ▪ Our shareholders are able to remove directors only for cause by the affirmative vote of the holders of a majority of the outstanding shares of our capital stock entitled to vote in the election of directors.
A high level of indebtedness could have other adverse consequences to us, including: ▪ making it more difficult for us to make payments on our debt; ▪ increasing our vulnerability to general economic and industry conditions; ▪ exposing us to the risk of increased interest rates as certain of our borrowings under our Credit Facility are at variable rates; ▪ restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; ▪ limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, and general corporate or other purposes; and 11 Koppers Holdings Inc. 2023 Annual Report ▪ limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who may be less highly leveraged.
A high level of indebtedness could have other adverse consequences to us, including: ▪ making it more difficult for us to make payments on our debt; ▪ increasing our vulnerability to general economic and industry conditions; ▪ exposing us to the risk of increased interest rates as certain of our borrowings under our Credit Facility are at variable rates; ▪ restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; ▪ limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, and general corporate or other purposes; and ▪ limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who may be less highly leveraged.
For example, the potential for regional conflict between China and Taiwan could result in disruptions of raw materials that our CMC and KPC businesses source from China and Taiwan.
In addition, the potential for regional conflict between China and Taiwan could result in disruptions of raw materials that our CMC and KPC businesses source from China and Taiwan.
We have operations in the United States, Australia, Denmark, the United Kingdom, New Zealand and Canada, among others, and sell our products in many foreign countries. For the year ended December 31, 2023, net sales from products sold by our foreign subsidiaries accounted for approximately 29 percent of our total net sales.
We have operations in the United States, Australia, Denmark, the United Kingdom, New Zealand and Canada, among others, and sell our products in many foreign countries. For the year ended December 31, 2024, net sales from products sold by our foreign subsidiaries accounted for approximately 27 percent of our total net sales.
We may be required to recognize impairment charges for our long-lived assets. At December 31, 2023, the net carrying value of long-lived assets (property, plant and equipment, operating lease right-of-use assets, goodwill and other intangible assets) totaled $1,118.8 million. In accordance with generally accepted accounting principles, we periodically assess these assets to determine if they are impaired.
We may be required to recognize impairment charges for our long-lived assets. At December 31, 2024, the net carrying value of long-lived assets (property, plant and equipment, goodwill, other intangible assets and operating lease right-of-use assets) totaled $1,186.7 million. In accordance with generally accepted accounting principles, we periodically assess these assets to determine if they are impaired.
These covenants limit our ability and the ability of our restricted subsidiaries to, among other things: ▪ incur additional debt; ▪ pay dividends or distributions on our capital stock or repurchase our capital stock; ▪ issue stock of subsidiaries; ▪ make certain distributions; ▪ make certain investments; ▪ create liens on our assets to secure debt; ▪ enter into transactions with affiliates; ▪ modify material documents (including organizational documents); ▪ make certain acquisitions; ▪ merge or consolidate with another company; and ▪ sell or otherwise transfer assets.
These covenants limit our ability and the ability of our restricted subsidiaries to, among other things: ▪ incur additional debt; ▪ pay dividends or distributions on our capital stock or repurchase our capital stock; ▪ issue stock of subsidiaries; ▪ make certain distributions; ▪ make certain investments; ▪ create liens on our assets to secure debt; ▪ enter into transactions with affiliates; ▪ modify material documents (including organizational documents); ▪ make certain acquisitions; 12 Koppers Holdings Inc. 2024 Annual Report ▪ merge or consolidate with another company; and ▪ sell or otherwise transfer assets.
As of December 31, 2023, we had total outstanding debt of $849.4 million, and approximately $330.0 million of additional unused borrowing capacity under our credit agreement (the Credit Facility) with a consortium of banks, which includes an $800.0 million revolving credit facility, a $50.0 million swingline facility and provides for the ability to incur one or more uncommitted incremental revolving or term loan facilities in an aggregate amount of at least $730.0 million, subject to applicable financial covenants.
As of December 31, 2024, we had total outstanding debt of $939.5 million, and approximately $337.0 million of additional unused borrowing capacity under our credit agreement (the Credit Facility) with a consortium of banks, which includes an $800.0 million revolving credit facility, a $50.0 million swingline facility and provides for the ability to incur one or more uncommitted incremental revolving or term loan facilities in an aggregate amount of at least $730.0 million, subject to applicable financial covenants.
Our business strategy includes the potential acquisition of businesses and entering into joint ventures and other business combinations that we expect would complement and expand our existing products and the markets where we sell our products.
Our business strategy includes the potential acquisition of businesses and entering into joint ventures and other business combinations that we expect would complement and expand our existing products and the markets where we sell our products, as well as divestiture opportunities.
Our products are sold primarily into markets that historically have been cyclical, such as wood preservation, aluminum and specialty chemicals. 12 Koppers Holdings Inc. 2023 Annual Report ▪ The principal use of our wood preservation chemicals is in the manufacture of treated lumber, which is used mainly for residential applications, such as wood decking, and also industrial applications, such as the treating of railroad crossties and utility poles.
Our products are sold primarily into markets that historically have been cyclical, such as wood preservation, aluminum and specialty chemicals. ▪ The principal use of our wood preservation chemicals is in the manufacture of treated lumber, which is used mainly for residential applications, such as wood decking, and also industrial applications, such as the treating of railroad crossties and utility poles.
We also are involved in various litigation and proceedings relating to environmental matters and toxic tort claims. 14 Koppers Holdings Inc. 2023 Annual Report Future climate change regulation could result in increased operating costs and reduced demand for our products. Increasing societal concerns about climate change have resulted in international efforts to limit greenhouse gas (GHG) emissions.
We also are involved in various litigation and proceedings relating to environmental matters and toxic tort claims. Future climate change regulation could result in increased operating costs and reduced demand for our products. Increasing societal concerns about climate change have resulted in international efforts to limit greenhouse gas (GHG) emissions.
In the future, we may not be able to obtain coverage at current levels, and our premiums may increase significantly on coverage that we maintain. 15 Koppers Holdings Inc. 2023 Annual Report Adverse weather conditions or natural disasters, including conditions associated with or exacerbated by climate change, may reduce our operating results.
In the future, we may not be able to obtain coverage at current levels, and our premiums may increase significantly on coverage that we maintain. Adverse weather conditions or natural disasters, including conditions associated with or exacerbated by climate change, may reduce our operating results.
Impairment charges would also reduce our shareholders’ equity and could affect compliance with the covenants in our debt agreements. 17 Koppers Holdings Inc. 2023 Annual Report We are subject to risks inherent in foreign operations, including additional legal regulation and changes in social, political and economic conditions.
Impairment charges would also reduce our shareholders’ equity and could affect compliance with the covenants in our debt agreements. We are subject to risks inherent in foreign operations, including additional legal regulation and changes in social, political and economic conditions.
Furthermore, we could be required to record a contingent liability on our balance sheet with respect to such matters, which could result in us having a significant negative net worth. Intellectual property rights are important to our business.
Furthermore, we could be required to record a contingent liability on our balance sheet with respect to such matters, which could result in us having a significant negative net worth. 17 Koppers Holdings Inc. 2024 Annual Report Intellectual property rights are important to our business.
Like other companies involved in environmentally sensitive businesses, our operations and properties are subject to extensive federal, state, local and foreign environmental laws and regulations, including those concerning the following, among other things: ▪ the treatment, storage and disposal of wastes; ▪ the investigation and remediation of contaminated soil and groundwater; ▪ the discharge of effluents into waterways; ▪ the emission of substances into the air; ▪ the marketing, sale, use and registration of our chemical products, such as creosote, CCA, DCOI and MicroPro®; ▪ the U.S.
Our operations and properties are subject to extensive federal, state, local and foreign environmental laws and regulations, including those concerning the following, among other things: ▪ the treatment, storage and disposal of wastes; ▪ the investigation and remediation of contaminated soil and groundwater; ▪ the discharge of effluents into waterways; ▪ the emission of substances into the air; ▪ the marketing, sale, use and registration of our chemical products, such as creosote, CCA, DCOI, MicroPro® and naphthalene; 14 Koppers Holdings Inc. 2024 Annual Report ▪ the U.S.
In addition, Beazer East could choose to challenge its indemnification obligations or our satisfaction of the conditions to indemnification imposed on us thereunder.
Beazer East and Beazer Limited may cease to meet their indemnification obligations. In addition, Beazer East could choose to challenge its indemnification obligations or our satisfaction of the conditions to indemnification imposed on us thereunder.
Any litigation, investigation or regulatory enforcement action that may arise in these or other contexts could result in substantial costs and may divert management’s attention and resources away from the day-to-day operation of our business.
Any litigation, investigation or regulatory enforcement action that may arise in these or other contexts could result in substantial costs and liabilities, may divert management’s attention and resources away from the day-to-day operation of our business, and could have a material adverse effect on our business, cash flow and financial condition.
Furthermore, we could be required to record a contingent liability on our balance sheet with respect to environmental matters covered by the Indemnity, which could result in our having significant negative net worth.
Furthermore, we could be required to record a contingent liability on our balance sheet with respect to environmental matters covered by the Indemnity.
This could cause a significant increase in our operating expenses and we may be unable to pass some or all of these costs on to our customers. ▪ In certain circumstances coal tar may also be used as an alternative to fuel.
This could cause a significant increase in our operating expenses and we may be unable to pass some or all of these costs on to our customers.
We process personal data of our employees who are United Kingdom or European Union residents and will continue dedicating financial resources and management time to GDPR compliance.
The GDPR imposes a range of compliance obligations for companies that process personal data of United Kingdom and European Union residents and includes financial penalties for non-compliance. We process personal data of our employees who are United Kingdom or European Union residents and will continue dedicating financial resources and management time to GDPR compliance.
Total environmental reserves at December 31, 2023 were $10.6 million, which include provisions primarily for environmental remediation. In addition, we incur significant annual operating expenses related to environmental matters and significant capital expenditures related to environmental control facilities.
Total environmental reserves at December 31, 2024 were $10.3 million, which include provisions primarily for environmental remediation. In addition, we incur significant annual operating expenses related to environmental matters and significant capital expenditures related to environmental controls. Capital expenditures related to environmental controls in 2025 are expected to total approximately $10.6 million and are expected to be funded by operations.
In particular, our international operations are subject to U.S. and foreign anti-corruption laws and regulations, such as the Foreign Corrupt Practices Act, and economic sanction programs administered by the U.S. Treasury Department’s Office of Foreign Assets Control. Violations of these laws and regulations may result in civil or criminal penalties, including fines.
These regulations place restrictions on our operations, trade practices and partners and investment decisions. In particular, our international operations are subject to U.S. and foreign anti-corruption laws and regulations, such as the Foreign Corrupt Practices Act, and economic sanction programs administered by the U.S. Treasury Department’s Office of Foreign Assets Control.
The Green Deal, which was approved by the EU Parliament in 2020, has set a goal of a 55 percent reduction in emissions by 2030 and carbon neutrality by 2050. This will include revising and possibly expanding the EU ETS and setting targets for sectors outside the EU ETS.
The Green Deal, which was approved by the EU Parliament in 2020, has set a goal of a 55 percent reduction in emissions by 2030 and carbon neutrality by 2050.
In addition, adverse weather conditions have had a negative impact on our customers in our pavement sealer and wood preservation businesses, resulting in a negative impact on our sales of these products. Moreover, demand for many of our products declines during periods of inclement weather. Finally, natural disasters, including wildfires, hurricanes and earthquakes, could affect our revenue and operating results.
In addition, adverse weather conditions have had a negative impact on our customers in our wood preservation businesses, resulting in a negative impact on our sales of these products. Moreover, demand for many of our products declines during periods of inclement weather.
In Australia, the National Greenhouse and Energy Reporting Scheme requires large volume emitters (such as Koppers) to report carbon emissions and energy use to the government annually and, if they exceed certain thresholds, the ‘Safeguard Mechanism’ requires facilities to set an emissions baseline and purchase certificates if they exceed that baseline.
This will include revising and possibly expanding the EU ETS and setting targets for sectors outside the EU ETS. 15 Koppers Holdings Inc. 2024 Annual Report In Australia, the National Greenhouse and Energy Reporting Scheme requires large volume emitters (such as Koppers) to report emissions and energy use to the government annually and, if they exceed certain thresholds, the ‘Safeguard Mechanism’ requires facilities to set an emissions baseline and purchase certificates if they exceed that baseline.
We may not be able to obtain scrap copper at prices that match underlying pricing commitments to our customers. 10 Koppers Holdings Inc. 2023 Annual Report ▪ The primary raw material used by our CMC business is coal tar, a by-product of coke production.
Our purchase price for scrap copper is based upon spot prices in the copper market, which may be subject to sudden price changes. We may not be able to obtain scrap copper at prices that match underlying pricing commitments to our customers. ▪ The primary raw material used by our CMC business is coal tar, a by-product of coke production.
Although the global aluminum industry has experienced growth on a long-term basis, the aluminum industry has experienced a shift in primary aluminum production from the mature geographies, where we have historically enjoyed high market shares, to emerging economies, where we have less of a presence. ▪ The principal use of our phthalic anhydride product is in the manufacture of plasticizers and flexible vinyl, which are used mainly in the housing and automobile industries.
Although the global aluminum industry has experienced growth on a long-term basis, the aluminum industry has experienced a shift in primary aluminum production from the mature geographies, where we have historically enjoyed high market shares, to emerging economies, where we have less of a presence.
It is impossible to predict the timing, magnitude or location of such natural disasters or their impacts on the local economy and on our operations.
Finally, natural disasters, including but not limited to wildfires, hurricanes and earthquakes, could affect our revenue and operating results. It is impossible to predict the timing, magnitude or location of such natural disasters or their impacts on the local economy and on our operations.
As a producer of wood preservatives, we may incur additional costs under our warranties or otherwise for claims related to treated-wood products. We provide limited warranties on certain treated-wood products. These limited warranties cover treated-wood products that are produced by certain of our customers who use wood preservatives supplied by us.
We provide limited warranties on certain treated-wood products. These limited warranties cover treated-wood products that are produced by certain of our customers who use wood preservatives supplied by us.
Our products are used for a variety of applications by our customers. Changes in our customers’ products or processes may enable our customers to reduce consumption of the products we produce or make our products unnecessary. Customers may also find alternative materials or processes that no longer require our products.
Changes in our customers’ products or processes may enable our customers to reduce consumption of the products we produce or make our products unnecessary. Customers may also find alternative materials or processes that no longer require our products. As a producer of wood preservatives, we may incur additional costs under our warranties or otherwise for claims related to treated-wood products.
Geopolitical events further impacting these countries, or other countries from which we source raw materials or where our facilities or customers are located, could adversely affect the impacted business segments. If the costs of raw materials increase significantly and we are unable to offset the increased costs with higher selling prices, our profitability will decline.
Geopolitical events further impacting these countries, or other countries from which we source raw materials or where our facilities or customers are located, could adversely affect the impacted business segments.
The government is undertaking public consultation on the draft, with a current proposed start date for the legislation and reporting requirements of July 1, 2024. At the state level in Australia, the New South Wales Environment Protection Authority released its Climate Change Policy and Action Plan, which proposes to introduce greenhouse gas emission targets and limits on environment protection licenses.
At the state level in Australia, the New South Wales Environment Protection Authority released its Climate Change Policy and Action Plan, which proposes to introduce greenhouse gas emission targets and limits on environment protection licenses.
In July 2004, we entered into an agreement with Beazer East to amend the December 29, 1988 asset purchase agreement to provide, among other things, for the continued tender of pre-closing environmental liabilities to Beazer East under the Indemnity through July 2019.
The government and other third parties may have the right under applicable environmental laws to seek relief directly from us for any and all such costs and liabilities. 16 Koppers Holdings Inc. 2024 Annual Report In July 2004, we entered into an agreement with Beazer East to amend the December 29, 1988 asset purchase agreement to provide, among other things, for the continued tender of pre-closing environmental liabilities to Beazer East under the Indemnity through July 2019.
For normal plan operations, management expects that any future obligations under our post-retirement benefit plans that are not currently funded will be funded from our future cash flow from operations.
During the years ended December 31, 2024 and 2023, we contributed $9.4 million and $2.7 million, respectively, to our post-retirement benefit plans. For normal plan operations, management expects that any future obligations under our post-retirement benefit plans that are not currently funded will be funded from our future cash flow from operations.
In addition, contractual terms with customers may limit our ability to implement price increases necessary to recover increased operating and raw material costs in our businesses. Our profitability could be adversely affected if we are unable to implement adequate price increases. The development of new technologies or changes in our customers’ products could reduce the demand for our products.
Our profitability could be adversely affected if we are unable to implement adequate price increases. The development of new technologies or changes in our customers’ products could reduce the demand for our products. Our products are used for a variety of applications by our customers.
Our pension asset funding to total pension obligation ratio was 83 percent as of December 31, 2023. The underfunding was caused, in large part, by fluctuations in the financial markets that impacted the value of the assets in our defined benefit pension plans and by fluctuations in interest rates which increased the discounted pension liabilities.
The underfunding was caused, in large part, by fluctuations in the financial markets that impacted the value of the assets in our defined benefit pension plans and by fluctuations in interest rates which increased the discounted pension liabilities. In addition, our obligations for other post-retirement benefits are unfunded and total $5.7 million at December 31, 2024.
Further, the United States government, other governments or international organizations could impose sanctions that could restrict us from doing business directly or indirectly in or with certain countries or parties, which could include raw material suppliers or customers.
These factors could also cause consumer confidence and spending to decrease or result in increased volatility in the United States and global financial markets and economy. 11 Koppers Holdings Inc. 2024 Annual Report Further, the United States government, other governments or international organizations could impose sanctions that could restrict us from doing business directly or indirectly in or with certain countries or parties, which could include raw material suppliers or customers.
Although no one customer accounted for more than six percent of our net sales for the year ended December 31, 2023, our top ten customers accounted for approximately 33 percent of our net sales in the aggregate. The loss of a significant customer could have a material adverse effect on our business, cash flow and financial condition.
Although no one customer accounted for more than six percent of our net sales for the year ended December 31, 2024, our top ten customers accounted for approximately 38 percent of our net sales in the aggregate.
We may be required to make significant cash payments to our pension and other post-retirement plans, which will reduce the cash available for our business. As of December 31, 2023, our benefit obligation under our defined benefit pension plans exceeded the fair value of plan assets by $26.2 million.
We may be required to make significant cash payments to our pension and other post-retirement plans, which will reduce the cash available for our business.
Finally, the Indemnity does not afford us indemnification against environmental costs and liabilities attributable to acts or omissions occurring after the closing of the acquisition of assets from Beazer East under the asset purchase agreement, nor is the Indemnity applicable to liabilities arising in connection with other acquisitions by us after that closing. 16 Koppers Holdings Inc. 2023 Annual Report Litigation and other proceedings against us could be costly and time-consuming to defend, and due to the nature of our business and products, we may be liable for damages arising out of our acts or omissions, which may have a material adverse effect on us.
Finally, the Indemnity does not afford us indemnification against environmental costs and liabilities attributable to acts or omissions occurring after the closing of the acquisition of assets from Beazer East under the asset purchase agreement, nor is the Indemnity applicable to liabilities arising in connection with other acquisitions by us after that closing.
Our ability to implement price increases is largely influenced by competitive and economic conditions and could vary significantly depending on the segment served. Such increases may not be accepted by our customers, may not be sufficient to compensate for increased operating and raw material costs or may decrease demand for our products and our volume of sales.
Such increases may not be accepted by our customers, may not be sufficient to compensate for increased operating and raw material costs or may decrease demand for our products and our volume of sales. In addition, contractual terms with customers may limit our ability to implement price increases necessary to recover increased operating and raw material costs in our businesses.
Other hazards include the following: ▪ piping and storage tank leaks and ruptures; ▪ mechanical failure; ▪ exposure to hazardous substances; and ▪ chemical spills and other discharges or releases of toxic or hazardous wastes, substances or gases. 13 Koppers Holdings Inc. 2023 Annual Report These hazards, among others, may cause personal injury and loss of life, damage to property and contamination of the environment, which could lead to government fines or work stoppage injunctions, cleanup costs and lawsuits by injured persons.
These hazards, among others, may cause personal injury and loss of life, damage to property and contamination of the environment, which could lead to government fines or work stoppage injunctions, cleanup costs and lawsuits by injured persons.
Any such occurrence could have a material adverse effect on our operating results, financial condition, cash flows and liquidity. We face risks related to our substantial indebtedness.
If the costs of raw materials increase significantly (including as a result of tariffs) and we are unable to offset the increased costs with higher selling prices, our profitability will decline. Any such occurrence could have a material adverse effect on our operating results, financial condition, cash flows and liquidity. We face risks related to our substantial indebtedness.
Capital expenditures related to environmental control facilities in 2024 are expected to total approximately $9.5 million and are expected to be funded by operations. Contamination has been identified and is being investigated and remediated at many of our sites by us or other parties.
Contamination has been identified and is being investigated and remediated at many of our sites by us or other parties.
We are indemnified for certain product liability exposures under the Indemnity with Beazer East related to products sold prior to the closing of the acquisition of assets from Beazer East. Beazer East and Beazer Limited may cease to meet their indemnification obligations.
Additional information on litigation matters is available in Note 17 of the Notes to Consolidated Financial Statements, Commitments and Contingent Liabilities. As discussed in the previous section, we are indemnified for certain product liability exposures under the Indemnity with Beazer East related to products sold prior to the closing of the acquisition of assets from Beazer East.
We may not be able to implement price increases sufficient to compensate for increased operating costs and raw material costs in our businesses. We have experienced and may experience further increased operating costs and raw material costs in our businesses.
The loss of a significant customer could have a material adverse effect on our business, cash flow and financial condition. 13 Koppers Holdings Inc. 2024 Annual Report We may not be able to implement price increases sufficient to compensate for increased operating costs and raw material costs in our businesses.
Any disruption could reduce the productivity and profitability of a particular manufacturing facility or of our Company as a whole.
Any disruption could reduce the productivity and profitability of a particular manufacturing facility or of our Company as a whole. Other hazards include the following: ▪ piping and storage tank leaks and ruptures; ▪ mechanical failure; ▪ exposure to hazardous substances; and ▪ chemical spills and other discharges or releases of toxic or hazardous wastes, substances or gases.
For example, some of our operations are subject to the United Kingdom’s and European Union’s General Data Protection Regulation (GDPR). The GDPR imposes a range of compliance obligations for companies that process personal data of United Kingdom and European Union residents and includes financial penalties for non-compliance.
Violations of these laws and regulations may result in civil or criminal penalties, including fines. For example, some of our operations are subject to the United Kingdom’s and European Union’s General Data Protection Regulation (GDPR).
Doing business on a global basis requires us to comply with the laws and regulations of the U.S. government and various international jurisdictions. These regulations place restrictions on our operations, trade practices and partners and investment decisions.
We are also subject to the risks normally associated with foreign operations, including those relating to delayed payments from customers in some countries or difficulties in the collection of receivables in developing countries. Doing business on a global basis requires us to comply with the laws and regulations of the U.S. government and various international jurisdictions.
In the past, increases in energy prices have resulted in higher coal tar costs which we have attempted to pass through to our customers.
Additionally, if pitch markets decline significantly domestically, the domestic creosote markets will become out of balance with pricing and volumes. ▪ In certain circumstances coal tar may also be used as an alternative to fuel. In the past, increases in energy prices have resulted in higher coal tar costs which we have attempted to pass through to our customers.
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Our purchase price for scrap copper is based upon spot prices in the copper market, which may be subject to sudden price changes.
Added
These fluctuations may reduce profitability in the future. ▪ We import certain raw materials that are used in our products that are, or may become, subject to tariffs, trade restrictions or supply chain disruptions. For example, we sell and purchase goods and raw materials from Canada both with third parties and our subsidiaries.
Removed
These factors could also cause consumer confidence and spending to decrease or result in increased volatility in the United States and global financial markets and economy.
Added
Additionally, the current US presidential administration has imposed new tariffs on imports to the United States, and although considerable uncertainty remains, has indicated that it may impose additional tariffs or significantly increase existing tariffs, including on goods imported from Canada, Mexico and China, all of which could negatively impact our business.
Removed
Therefore, a decline in remodeling and construction or global automobile production could reduce the demand for phthalic anhydride.
Added
We have experienced and may experience further increased operating costs and raw material costs in our businesses (including as a result of tariffs). Our ability to implement price increases is largely influenced by competitive and economic conditions and could vary significantly depending on the segment served.
Removed
The government and other third parties may have the right under applicable environmental laws to seek relief directly from us for any and all such costs and liabilities.
Added
It is anticipated that Koppers Australia will be required to disclose its climate related impacts, risks and opportunities from the financial year commencing on July 1, 2026.
Removed
In addition, our obligations for other post-retirement benefits are unfunded and total $6.2 million at December 31, 2023. During the years ended December 31, 2023 and December 31, 2022, we contributed $2.7 million and $1.6 million, respectively, to our post-retirement benefit plans.
Added
Litigation and other proceedings against us could be costly and time-consuming to defend, and due to the nature of our business and products, we may be liable for damages arising out of our acts or omissions, which may have a material adverse effect on us.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe cybersecurity program is part of the larger Enterprise Risk Management (ERM) program which is reviewed by management and the board of directors on a periodic basis.
Biggest changeThe cybersecurity program is part of the larger Enterprise Risk Management (ERM) program which is reviewed by management and the board of directors on a periodic basis. Compliance with the cybersecurity program is ensured via policies, procedures, training, and systems. Information security policies at Koppers lay out the guardrails that ensure compliance with the program.
Examples of guardrails set within the information security policies at Koppers include application of the principle of least privilege when granting access (the principle that a user or entity should only have access to the specific data, resources and applications needed to complete a required task), logging and monitoring activity of privileged accounts, authorized physical and logical access to information technology (IT) systems, and requiring maintenance of confidentiality of non-public information.
Examples of guardrails set within the information security policies at Koppers include, where appropriate, application of the principle of least privilege when granting access (the principle that a user or entity should only have access to the specific data, resources and applications needed to complete a required task), logging and monitoring activity of privileged accounts, authorized physical and logical access to information technology (IT) systems, and requiring maintenance of confidentiality of non-public information.
Standard operating procedures (SOPs) ensure accuracy and completeness of various IT tasks being performed throughout the organization. SOPs include incorporating data processing agreements in contracts, commissioning and decommissioning of IT systems, granting role-based user access, patch management, and change management. Training is conducted regularly for all employees who interact with Koppers IT systems.
Standard operating procedures (SOPs) help to ensure accuracy and completeness of various IT tasks being performed throughout the organization. SOPs include incorporating data processing agreements in contracts, commissioning and decommissioning of IT systems, granting role-based user access, patch management, and change management. Training is conducted regularly for all employees who interact with Koppers IT systems.
As of the date of this report, we have not experienced a material information security incident. 25 Koppers Holdings Inc. 2023 Annual Report
As of the date of this report, we have not experienced a material information security incident. 25 Koppers Holdings Inc. 2024 Annual Report
We utilize various IT cloud service providers. Annual security reviews of all service providers that provide critical service to the business are conducted. A cybersecurity risk assessment is conducted prior to contracting with a new IT cloud service provider providing high-impact services.
We conduct annual security reviews of all service providers that provide critical service to the business. A cybersecurity risk assessment is conducted prior to contracting with a new IT cloud service provider providing high-impact services.
ITEM 1C. CYB ERSECURITY We are committed to ensuring the confidentiality, integrity and availability of data that is owned and managed by us. We are also committed to protecting confidential information that is shared with us by our business partners.
ITEM 1C. CYB ERSECURITY We are committed to implementing all reasonable measures to ensure the confidentiality, integrity and availability of data that is owned and managed by us. We also endeavor to protect confidential information that is shared with us by our business partners.
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Compliance with the cybersecurity program is ensured via policies, procedures, training, and systems. 24 Koppers Holdings Inc. 2023 Annual Report Information security policies at Koppers lay out the guardrails that ensure compliance with the program.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePrimary Product Line Location Description of Property Interest Railroad and Utility Products and Services Rail joint bars Huntington, West Virginia Leased Railroad crosstie materials recovery Domino, Texas Leased Railroad crosstie materials recovery L’Anse, Michigan Leased Railroad crossties Ashcroft, British Columbia, Canada Owned Railroad crossties Camden, Arkansas Owned/Leased Railroad crossties Florence, South Carolina Owned Railroad crossties Galesburg, Illinois Leased Railroad crossties Guthrie, Kentucky Owned Railroad crossties Muncy, Pennsylvania Owned Railroad crossties North Little Rock, Arkansas Owned Railroad crossties Roanoke, Virginia Owned Railroad crossties Williamsville, Missouri Owned Railroad crossties and utility poles Somerville, Texas Owned Railroad structures Madison, Wisconsin Owned Utility poles Bunbury, Western Australia, Australia Owned/Leased Utility poles Eutawville, South Carolina Owned Utility poles Grafton, New South Wales, Australia Owned Utility poles Leesville, Louisiana Owned Utility poles Leland, North Carolina Owned Utility poles Longford, Tasmania, Australia Owned Utility poles Newsoms, Virginia Owned Utility poles North, South Carolina Owned Utility poles Takura, Queensland, Australia Leased Utility poles Vance, Alabama Leased Utility poles Vidalia, Georgia Owned Performance Chemicals Intermediate copper products Hubbell, Michigan Leased Wood preservation chemicals Auckland, New Zealand Owned Wood preservation chemicals Darlington, United Kingdom Owned Wood preservation chemicals Geelong, Victoria, Australia Owned Wood preservation chemicals Millington, Tennessee Owned Wood preservation chemicals Mt.
Biggest changePrimary Product Line Location Description of Property Interest Railroad and Utility Products and Services Rail joint bars Huntington, West Virginia Leased Railroad crosstie materials recovery Domino, Texas Leased Railroad crossties Ashcroft, British Columbia, Canada Owned Railroad crossties Camden, Arkansas Owned/Leased Railroad crossties Florence, South Carolina Owned Railroad crossties Galesburg, Illinois Leased Railroad crossties Guthrie, Kentucky Owned Railroad crossties Muncy, Pennsylvania Owned Railroad crossties North Little Rock, Arkansas Owned Railroad crossties Roanoke, Virginia Owned Railroad crossties Williamsville, Missouri Owned Railroad crossties and utility poles Somerville, Texas Owned Railroad structures Madison, Wisconsin Owned Utility poles Bunbury, Western Australia, Australia Owned/Leased Utility poles Eutawville, South Carolina Owned Utility poles Grafton, New South Wales, Australia Owned Utility poles Kennedy, Alabama Owned Utility poles Leesville, Louisiana Owned Utility poles Leland, North Carolina Owned Utility poles Longford, Tasmania, Australia Owned Utility poles Mathiston, Mississippi Owned Utility poles Newsoms, Virginia Owned Utility poles North, South Carolina Owned Utility poles Takura, Queensland, Australia Leased Utility poles Vance, Alabama Leased Utility poles Vidalia, Georgia Owned Performance Chemicals Intermediate copper products Hubbell, Michigan Leased Wood preservation chemicals Auckland, New Zealand Owned Wood preservation chemicals Darlington, United Kingdom Owned Wood preservation chemicals Geelong, Victoria, Australia Owned Wood preservation chemicals Millington, Tennessee Owned Wood preservation chemicals Mt.
ITEM 2. P ROPERTIES The following chart sets forth information regarding our production facilities. Generally, our production and port facilities are suitable and adequate for the purposes for which they are intended and overall have sufficient capacity to conduct business in the upcoming year.
ITEM 2. P ROPERTIES The following chart sets forth information regarding our production facilities as of February 27, 2025. Generally, our production and port facilities are suitable and adequate for the purposes for which they are intended and overall have sufficient capacity to conduct business in the upcoming year.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changePearce 57 Chief Accounting Officer, Koppers Holdings Inc. and Koppers Inc. Daniel J. Skrovanek 62 Vice President, Growth and Innovation, Koppers Inc. Jimmi Sue Smith 51 Chief Financial Officer, Koppers Holdings Inc. and Koppers Inc., and Director of Koppers Inc. James A. Sullivan 60 President and Chief Operating Officer, Koppers Holdings Inc. and Koppers Inc.
Biggest changeJimmi Sue Smith 52 Chief Financial Officer, Koppers Holdings Inc. and Koppers Inc., and Director of Koppers Inc. James A. Sullivan 61 President and Chief Operating Officer, Koppers Holdings Inc. and Koppers Inc. Kevin Washington 56 Vice President, External Relations, Koppers Inc. Ms. Apostolou has served as Chief Legal and Sustainability Officer and Secretary since January 2025. Ms.
ITEM 4. M INE SAFETY DISCLOSURES Not applicable. 26 Koppers Holdings Inc. 2023 Annual Report INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth the names, ages and positions of our and Koppers Inc.’s executive officers as of February 28, 2024.
ITEM 4. M INE SAFETY DISCLOSURES Not applicable. 26 Koppers Holdings Inc. 2024 Annual Report INFORMATION ABOUT OUR EXECUTIVE OFFICERS The following table sets forth the names, ages and positions of our and Koppers Inc.’s executive officers as of February 27, 2025.
Our executive officers hold their positions until the annual meeting of the board of directors or until their respective successors are elected and qualified. Name Age Position Stephanie L. Apostolou 43 General Counsel and Secretary, Koppers Holdings Inc. and Koppers Inc., and Director of Koppers Inc. Leroy M.
Our executive officers hold their positions until the annual meeting of the board of directors or until their respective successors are elected and qualified. Name Age Position Stephanie L. Apostolou 44 Chief Legal and Sustainability Officer and Secretary, Koppers Holdings Inc. and Koppers Inc., and Director of Koppers Inc. Leroy M.
Washington served as Head of Government Affairs of Illinois Tool Works Inc., a publicly traded manufacturer of industrial products and equipment. 27 Koppers Holdings Inc. 2023 Annual Report P ART II
Washington served as Head of Government Affairs of Illinois Tool Works Inc., a publicly traded manufacturer of industrial products and equipment. P ART II
Kevin Washington 55 Vice President, External Affairs, Koppers Inc. Ms. Apostolou has served as General Counsel and Secretary of Koppers Holdings Inc. and Koppers Inc. since March 2020. From January 2019 to February 2020, Ms. Apostolou served as Deputy General Counsel and Assistant Secretary of Koppers Holdings Inc. and Koppers Inc. Mr.
Apostolou served as General Counsel and Secretary of Koppers Holdings Inc. and Koppers Inc. from March 2020 to December 2024. Ms. Apostolou has served as a Director of Koppers Inc. since March 2020. From January 2019 to February 2020, Ms. Apostolou served as Deputy General Counsel and Assistant Secretary of Koppers Holdings Inc. and Koppers Inc. Mr.
Prior to joining Koppers, from July 2014 to April 2022, Mr. Lucas served as Vice President, Human Resources of AMETEK, Inc., a publicly traded manufacturer of electronic instruments and electromechanical devices. Mr. Pearce has served as Chief Accounting Officer, Koppers Holdings Inc. and Koppers Inc. since May 2019. From April 2008 to April 2019, Mr.
Lucas served as Vice President, Culture and Engagement, Koppers Inc. from April 2022 to December 2024. Prior to joining Koppers, from July 2014 to April 2022, Mr. Lucas served as Vice President, Human Resources of AMETEK, Inc., a publicly traded manufacturer of electronic instruments and electromechanical devices. Mr.
Mr. Sullivan has served as President and Chief Operating Officer of Koppers Holdings Inc. and Koppers Inc. since January 2024. Mr. Sullivan served as Executive Vice President and Chief Operating Officer of Koppers Holdings Inc. and Koppers Inc. from January 2020 to December 2023. From May 2018 to December 2019, Mr.
Sullivan served as Executive Vice President and Chief Operating Officer of Koppers Holdings Inc. and Koppers Inc. from January 2020 to December 2023. Mr. Washington has served as Vice President, External Relations, Koppers Inc. since June 2022. Prior to joining Koppers, from October 2012 to June 2022, Mr.
Pearce served as Director, Corporate Control and Taxes, Koppers Inc. Mr. Skrovanek has served as Vice President, Growth and Innovation, Koppers Inc. since March 2022. From January 2020 to March 2022, Mr. Skrovanek served as Vice President, Purchasing and Strategic Marketing, Koppers Inc. From April 2018 to December 2019, Mr. Skrovanek served as Vice President, Railroad Maintenance of Way. Ms.
Pearce has served as Chief Accounting Officer, Koppers Holdings Inc. and Koppers Inc. since May 2019. Mr. Skrovanek has served as Vice President, Growth and Innovation, Koppers Inc. since March 2022. From January 2020 to March 2022, Mr. Skrovanek served as Vice President, Purchasing and Strategic Marketing, Koppers Inc. Ms.
Smith served as Vice President, Finance and Treasurer of Koppers Holdings Inc. and Koppers Inc. Ms. Smith has served as a Director of Koppers Inc. since January 2022. Prior to joining Koppers, from November 2018 to August 2019, Ms. Smith served as Senior Vice President and Chief Financial Officer of EQT Corporation (EQT), a publicly traded natural gas production company.
Smith served as Vice President, Finance and Treasurer of Koppers Holdings Inc. and Koppers Inc. Ms. Smith has served as a Director of Koppers Inc. since January 2022. Mr. Sullivan has served as President and Chief Operating Officer of Koppers Holdings Inc. and Koppers Inc. since January 2024. Mr.
Ball has served as a Director of Koppers Holdings Inc. since February 2015 and as a Director of Koppers Inc. since May 2013. Mr. Dowd has served as Global Vice President, Zero Harm, Koppers Inc. since January 2020. From January 2016 to December 2019, Mr. Dowd served as Global Vice President, Safety, Health, Environmental, and Process Excellence, Koppers Inc. Ms.
Ball has served as a Director of Koppers Holdings Inc. since February 2015 and as a Director of Koppers Inc. since May 2013. Mr. Lovalekar has served as Vice President, Information Technology, Koppers Inc. since March 2016. Mr. Lucas has served as Senior Vice President, Culture and Engagement, Koppers Inc. since January 2025. Mr.
Ball 55 Chief Executive Officer, and Director of Koppers Holdings Inc. and Koppers Inc. Joseph P. Dowd 63 Global Vice President, Zero Harm, Koppers Inc. Leslie S. Hyde 63 Senior Vice President and Chief Sustainability Officer, Koppers Inc. Stephen G. Lucas 58 Vice President, Culture and Engagement, Koppers Inc. Bradley A.
Ball 56 Chief Executive Officer and Director of Koppers Holdings Inc. and Koppers Inc. Tushar Lovalekar 53 Vice President, Information Technology, Koppers Inc. Stephen G. Lucas 59 Senior Vice President, Culture and Engagement, Koppers Inc. Bradley A. Pearce 58 Chief Accounting Officer, Koppers Holdings Inc. and Koppers Inc. Daniel J. Skrovanek, Ph.D. 63 Vice President, Growth and Innovation, Koppers Inc.
Removed
Hyde has served as Senior Vice President and Chief Sustainability Officer, Koppers Inc. since January 2020. From November 2017 to December 2019, Ms. Hyde served as Vice President, Corporate Strategy and Risk Management, Koppers Inc. Mr. Lucas has served as Vice President, Culture and Engagement, Koppers Inc. since April 2022.
Removed
Sullivan served as Senior Vice President, Railroad Products and Services and Global Carbon Materials and Chemicals, Koppers Inc. Mr. Washington has served as Vice President, External Affairs, Koppers Inc. since June 2022. Prior to joining Koppers, from October 2012 to June 2022, Mr.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+2 added−0 removed6 unchanged
Biggest changeIssuer Purchases of Equity Securities The following table sets forth information regarding Koppers Holdings’ repurchases of shares of its common stock during the three months ended December 31, 2023: Period Total Number of Common Shares Purchased (1) Average Price Paid per Common Share Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Common Shares that May Yet be Purchased Under the Plans or Programs (Dollars in Millions) October 1 – October 31 0 $ 0.00 0 $ 64.4 November 1 – November 30 180,389 $ 42.02 180,389 $ 56.8 December 1 – December 31 236,100 $ 48.57 236,100 $ 54.1 Total 416,489 416,489 (1) On August 6, 2021, we announced that the board of directors approved a $100 million share repurchase program.
Biggest changePeriod Total Number of Common Shares Purchased (1) Average Price Paid per Common Share (2) Total Number of Common Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Common Shares that May Yet be Purchased Under the Plans or Programs (Dollars in Millions) October 1 – October 31 0 $ 0.00 0 $ 11.9 November 1 – November 30 26,906 $ 38.81 26,906 $ 10.9 December 1 – December 31 0 $ 0.00 0 $ 10.9 Total 26,906 26,906 (1) On August 6, 2021, we announced that the board of directors approved a $100 million share repurchase program.
ITEM 5. M ARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our shares of common stock are listed and traded on the NYSE under the symbol KOP. The number of registered holders of Koppers common stock at January 31, 2024 was 58.
ITEM 5. M ARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our shares of common stock are listed and traded on the NYSE under the symbol KOP.
Dividend Policy Our dividend policy provides for quarterly dividends, payable at the discretion of our board of directors. Dividends will be considered if cash generated by our business is in excess of our expected cash needs.
The number of registered holders of Koppers common stock at January 31, 2025 was 55. 27 Koppers Holdings Inc. 2024 Annual Report Dividend Policy Our dividend policy provides for quarterly dividends, payable at the discretion of our board of directors. Dividends will be considered if cash generated by our business is in excess of our expected cash needs.
On February 14, 2024, the board of directors declared a quarterly dividend of $0.07 cents per common share, payable on March 25, 2024 to shareholders of record as of March 8, 2024. Prior to February 2022, we had not declared a dividend since November 2014.
On February 12, 2025, the board of directors declared a quarterly dividend of $0.08 per common share, payable on March 24, 2025 to shareholders of record as of March 7, 2025.
Added
Issuer Purchases of Equity Securities The following table sets forth information regarding Koppers Holdings’ repurchases of shares of its common stock during the three months ended December 31, 2024.
Added
The repurchase program had no expiration date. On February 27, 2025, we announced that the board of directors approved a $100 million share repurchase program. The repurchase program has no expiration date and replaces our previous share repurchase program of $100 million. (2) Excludes any fees or commissions associated with the share repurchases.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

47 edited+28 added−23 removed30 unchanged
Biggest changeOur keys to success for 2024 are the following: • For our RUPS segment, we need to (i) recoup cost increases, including the value of our creosote preservative in the market, (ii) ensure our facilities run uninterrupted to serve customer demand and (iii) maximize opportunities for increased volumes, including expanding our customer base into the Texas utility pole market. • For our PC segment, we need to (i) increase market share for certain newer product lines and (ii) improve gross margin by reducing costs. • For our CMC segment, we need to (i) optimize production from our yield enhancement project at our facility in Nyborg, Denmark, (ii) push acceptance of petroleum-blended products, which mitigates reductions in coal tar volumes and (iii) execute on domestic plant optimization projects. 29 Koppers Holdings Inc. 2023 Annual Report Significant market indicators for our businesses include: • The Railway Tie Association’s estimate of total crosstie installations in 2024, which is approximately 18.5 million ties, with 14.7 million for Class I railroads.
Biggest changeOur keys to success in 2025 include: • For our RUPS segment, our focus is to (i) recoup cost increases, including the value of our creosote preservative in the market, (ii) maximize opportunities for increased volumes, including expanding our customer base into the Texas, western and midwestern utility pole markets and (iii) lower operating and selling, general and administrative expenses. • For our PC segment, our focus is to (i) acquire new customers in our residential preservatives markets to offset certain customer market share losses, (ii) expand market share in our industrial preservatives markets and (iii) align and improve our cost structure. • For our CMC segment, our focus is to (i) execute on domestic plant restructuring projects, (ii) optimize and develop markets for enhanced carbon products and (iii) implement global tar and pitch strategies. 29 Koppers Holdings Inc. 2024 Annual Report Significant market indicators for our businesses include: • The Railway Tie Association’s estimate of total crosstie purchases in 2025 is approximately 19.5 million ties, with approximately 13.3 million for Class I railroads.
Adjusted EBITDA is the primary measure of profitability we use to evaluate our businesses. In addition, adjusted EBITDA is the primary measure used to determine the level of achievement of management's short-term incentive goals and related payout, as well as one of the measures used to determine performance and related payouts for certain performance share units granted to management.
Adjusted EBITDA is the measure of profitability we use to evaluate our businesses. In addition, adjusted EBITDA is the primary measure used to determine the level of achievement of management's short-term incentive goals and related payout, as well as one of the measures used to determine performance and related payouts for certain performance share units granted to management.
The Credit Facility permits Koppers Inc. to make dividend payments to Koppers Holdings if certain conditions are met, including, among other permitted dividend payments, the ability to fund the payment of regularly scheduled dividends on and repurchases of Koppers Holdings common stock, in an aggregate amount per fiscal year not to exceed the greater of $50.0 million, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and 6.0 percent of market capitalization.
The Credit Facility permits Koppers Inc. to make dividend payments to Koppers Holdings if certain conditions are met, including, among other permitted dividend payments, the ability to fund the payment of regularly scheduled dividends on Koppers Holdings common stock and repurchases of Koppers Holdings common stock, in an aggregate amount per fiscal year not to exceed the greater of $50.0 million, with unused amounts in any fiscal year being carried over to the succeeding fiscal year, and 6.0 percent of market capitalization.
We measure asset retirement obligations using certain assumptions including estimates regarding the recovery of residues in storage tanks, which can vary from actual residues recovered on retirement.
Asset Retirement Obligations . We measure asset retirement obligations using certain assumptions including estimates regarding the recovery of residues in storage tanks, which can vary from actual residues recovered on retirement.
The amount of our outstanding debt and our overall cash flows will fluctuate throughout any operating period based upon, among other things, the timing of receipts from customers and payments to vendors. As of December 31, 2023, approximately 85 percent of accounts payable was current and 15 percent was 1-30 days past due.
The amount of our outstanding debt and our overall cash flows will fluctuate throughout any operating period based upon, among other things, the timing of receipts from customers and payments to vendors. As of December 31, 2024 and 2023, approximately 85 percent of accounts payable was current and 15 percent was 1-30 days past due.
Bank Debt Covenants at December 31, 2023 The bank debt covenants that affect availability of the Credit Facility and which may restrict the ability of Koppers Inc. to pay dividends include the following financial ratios: ▪ The total net leverage ratio is calculated as of the last day of each fiscal quarter in accordance with the Credit Facility definitions of consolidated total net debt divided by consolidated EBITDA and is not permitted to exceed 5.0.
Bank Debt Covenants at December 31, 2024 The bank debt covenants that affect availability of the Credit Facility and which may restrict the ability of Koppers Inc. to pay dividends include the following financial ratios: ▪ The total net leverage ratio is calculated as of the last day of each fiscal quarter in accordance with the Credit Facility definitions of consolidated total net debt divided by consolidated EBITDA and is not permitted to exceed 5.0.
Discount rates may be impacted by adverse changes in macroeconomic environment, volatility in the equity and debt markets or other factors. Our key assumptions are materially consistent with prior year. During the fourth quarter of 2023, we performed an impairment test for goodwill for each of our reporting units using the quantitative approach.
Discount rates may be impacted by adverse changes in macroeconomic environment, volatility in the equity and debt markets or other factors. Our key assumptions are materially consistent with prior year. During the fourth quarter of 2024, we performed an impairment test for goodwill for each of our reporting units using the quantitative approach.
Decreasing the discount rates by 0.25 percent for our pension plans and 0.25 percent for our other post-retirement benefit plans would increase pension obligations and other post-retirement benefit plan obligations by $3.9 million. Increasing the discount rates by the same amount would not have a material effect on defined benefit pension expense and other post-retirement benefit plan expense.
Decreasing the discount rates by 0.25 percent for our pension plans and 0.25 percent for our other post-retirement benefit plans would increase pension obligations and other post-retirement benefit plan obligations by $3.1 million. Increasing the discount rates by the same amount would not have a material effect on defined benefit pension expense and other post-retirement benefit plan expense.
Adjusted items typically include certain expenses associated with impairment, restructuring and plant closure costs, significant gains and losses on asset disposals or business combinations, LIFO, mark-to-market commodity hedging and other unusual items. The LIFO expense adjustment removes the entire impact of LIFO and effectively reflects the results as if we were on a FIFO inventory basis.
Adjusted items typically include certain expenses associated with impairment, restructuring and plant closure costs, significant gains and losses on asset disposals or business combinations, LIFO, mark-to-market commodity hedging, cloud-computing amortization expenses and other unusual items. The LIFO expense adjustment removes the entire impact of LIFO and effectively reflects the results as if we were on a FIFO inventory basis.
We determined the fair value of each of the reporting units exceeded its respective carrying amount; therefore, we determined that goodwill was not impaired at any of our reporting units as of December 31, 2023.
We determined the fair value of each of the reporting units exceeded its respective carrying amount; therefore, we determined that goodwill was not impaired at any of our reporting units as of December 31, 2024.
The cash interest coverage ratio as of December 31, 2023 was 3.9. We are currently in compliance with all covenants governing the Credit Facility. Our continued ability to meet these financial covenants can be affected by events beyond our control.
The cash interest coverage ratio as of December 31, 2024 was 3.95. We are currently in compliance with all covenants governing the Credit Facility. Our continued ability to meet these financial covenants can be affected by events beyond our control.
As discussed under Environmental Matters in Item 1 – Business, we are subject to federal, state, local, and foreign laws and regulations, and potential liabilities relating to the protection of the environment and human health and safety. We expect to incur substantial costs for ongoing compliance with such laws and regulations.
As discussed under Environmental Matters in Item 1 – Business and Note 17 to the Consolidated Financial Statements, we are subject to federal, state, local, and foreign laws and regulations, and potential liabilities relating to the protection of the environment and human health and safety. We expect to incur substantial costs for ongoing compliance with such laws and regulations.
Our businesses and results of operations are affected by various competitive and other factors including (i) the impact of global economic conditions on demand for our products, including the impact of imported products from competitors in certain regions where we operate; (ii) raw material pricing and availability, in particular the cost and availability of hardwood lumber for railroad crossties, softwood lumber for utility poles, scrap copper prices, and the cost and amount of coal tar available in global markets, which is negatively affected by reductions in blast furnace steel production; (iii) volatility in oil prices, which impacts the cost of coal tar and certain other raw materials, as well as selling prices and margins for certain of our products including carbon black feedstock, phthalic anhydride, and naphthalene; (iv) competitive conditions in global carbon pitch markets; and (v) changes in foreign exchange rates.
Our businesses and results of operations are affected by various competitive and other factors including (i) the impact of global economic conditions on demand for our products, including the impact of imported products from competitors in certain regions where we operate; (ii) raw material pricing and availability, in particular the cost and availability of hardwood lumber for railroad crossties, softwood lumber for utility poles, scrap copper prices, and the cost and amount of coal tar available in global markets, which is negatively affected by reductions in blast furnace steel production; (iii) volatility in oil prices, which impacts the cost of coal tar and certain other raw materials, as well as selling prices and margins for certain of our products including carbon black feedstock, phthalic anhydride, and naphthalene; (iv) competitive conditions in our performance chemicals business and global carbon pitch markets; (v) changes in foreign exchange rates; and (vi) the other factors set forth in the section titled "Forward-Looking Statements." Any or all of these or other factors could impact our actual results for 2025.
Inherent uncertainties exist in such estimates primarily due to unknown conditions and other circumstances, changing governmental regulations and legal standards regarding liability, and evolving technologies. See Note 17 – Commitments and Contingent Liabilities for information about environmental liabilities. 35 Koppers Holdings Inc. 2023 Annual Report
Inherent uncertainties exist in such estimates primarily due to unknown conditions and other circumstances, changing governmental regulations and legal standards regarding liability, and evolving technologies. See Note 17 – Commitments and Contingent Liabilities for information about environmental liabilities.
The estimated fair value, as calculated at October 31, 2023, for the three reporting units ranged from approximately eight percent to 110 percent greater than their carrying value (six percent to 84 percent at the previous impairment assessment date).
The estimated fair value, as calculated at October 31, 2024, for the three reporting units ranged from approximately 22 percent to 103 percent greater than their carrying value (eight percent to 110 percent at the previous impairment assessment date).
Those key assumptions include discount rates (13.5 percent – 17.5 percent), market multiples (4.5 – 7.5 times adjusted EBITDA) and terminal growth rates (5.4 – 6.5 times adjusted EBITDA) as well as future forecasts of revenue growth and adjusted EBITDA, which are based on our strategic plan.
Those key assumptions include discount rates (12.0 percent – 18.0 percent), market multiples (5.1 – 7.0 times adjusted EBITDA) and terminal growth rates (5.0 – 6.5 times adjusted EBITDA) as well as future forecasts of revenue growth and adjusted EBITDA, which are based on our strategic plan.
The total net leverage ratio as of December 31, 2023 was 2.9. Effective during the first quarter of 2024, the total net leverage ratio is not permitted to exceed 4.75. ▪ The cash interest coverage ratio, calculated as of the last day of each fiscal quarter, is not permitted to be less than 2.0.
The total net leverage ratio as of December 31, 2024 was 3.20. Effective during the second quarter of 2025, the total net leverage ratio will not be permitted to exceed 4.75. ▪ The cash interest coverage ratio, calculated as of the last day of each fiscal quarter, is not permitted to be less than 2.0.
Our asset rate of return assumption is 5.62 percent for 2023 defined benefit pension expense. Decreasing the asset rate of return assumption by 0.25 percent would increase our defined benefit pension expense by $0.3 million.
Our asset rate of return assumption is 4.92 percent for 2024 defined benefit pension expense. Decreasing the asset rate of return assumption by 0.25 percent would increase our defined benefit pension expense by $0.3 million.
Because of the high degree of uncertainty regarding the timing of future cash outflows associated with these liabilities, we are unable to estimate the years in which settlement will occur with the respective taxing authorities. Additional information regarding taxes is disclosed in Note 10 – Income Taxes.
Because of the high degree of uncertainty regarding the timing of future cash outflows associated with these liabilities, we are unable to estimate the years in which settlement will occur with the respective taxing authorities.
Our Railroad Products and Services reporting unit is at the low-end of that range and could experience impairment in the future if we do not achieve our profitability projections, there is a change in key assumptions underlying the valuation or if we experience a substantial decrease in our stock price.
Our reporting units could experience impairment in the future if we do not achieve our profitability projections, there is a change in key assumptions underlying the valuation or if we experience a substantial decrease in our stock price.
The sources of financing cash flows were net borrowings of $23.1 million and $9.9 million from issuances of common stock, primarily due to the exercise of stock options. This was offset by repurchases of common stock, payments of debt issuance costs and dividends paid.
In the prior year, the sources of financing cash flows were net borrowings of $23.1 million and issuances of common stock due to the exercise of stock options and the primary uses of financing cash flows were repurchases of common stock, payments of debt issuance costs and dividends paid.
Segment Results Segment adjusted EBITDA and adjusted EBITDA margin for the years ended December 31, 2023 and 2022 are summarized in the following table: Year Ended December 31, (Dollars in millions) 2023 2022 Change % Change Adjusted EBITDA: Railroad and Utility Products and Services $ 84.0 $ 53.6 $ 30.4 57 % Performance Chemicals 123.1 75.5 47.6 63 % Carbon Materials and Chemicals 49.3 99.0 (49.7 ) -50 % Total Adjusted EBITDA $ 256.4 $ 228.1 $ 28.3 12 % Adjusted EBITDA margin as a percentage of GAAP sales: Railroad and Utility Products and Services 9.4 % 6.8 % 2.6 % 38 % Performance Chemicals 18.3 % 13.0 % 5.3 % 41 % Carbon Materials and Chemicals 8.4 % 16.2 % -7.8 % -48 % RUPS adjusted EBITDA increased due primarily to net sales price increases and $19.9 million from improved plant utilization, which combined to more than offset higher raw material, operating and selling, general and administrative expenses of $69.4 million.
See Note 10 – Income Taxes. 31 Koppers Holdings Inc. 2024 Annual Report Segment Results Segment adjusted EBITDA and adjusted EBITDA margin is summarized in the following table: Year Ended December 31, 2024 2023 Change % Change (Dollars in millions) Adjusted EBITDA: Railroad and Utility Products and Services $ 82.3 $ 84.0 $ (1.7 ) -2.0 % Performance Chemicals 142.7 123.1 19.6 15.9 % Carbon Materials and Chemicals 36.6 49.3 (12.7 ) -25.8 % Total Adjusted EBITDA $ 261.6 $ 256.4 $ 5.2 2.0 % Adjusted EBITDA margin as a percentage of GAAP sales: Railroad and Utility Products and Services 8.7 % 9.4 % -0.7 % -7.4 % Performance Chemicals 21.9 % 18.3 % 3.6 % 19.7 % Carbon Materials and Chemicals 7.4 % 8.4 % -1.0 % -11.9 % RUPS adjusted EBITDA decreased due primarily to $50.3 million of higher raw material, operating and allocated selling, general and administrative expenses, which combined to more than offset net sales increases and $11.8 million from improved plant utilization.
Outlier bonds whose yields exceeded two standard deviations from the yield curve derived from similar quality bonds were excluded. Of the assumptions used to measure the year-end obligations and estimated annual net periodic benefit cost, the discount rate has the most significant effect on the periodic benefit cost reported for the plans.
Of the assumptions used to measure the year-end obligations and estimated annual net periodic benefit cost, the discount rate has the most significant effect on the periodic benefit cost reported for the plans.
Foreign currency transaction gains and losses result from transactions denominated in a currency that is different from the currency used by the entity to prepare its financial statements.
Foreign currency transaction gains and losses result from transactions denominated in a currency that is different from the currency used by the entity to prepare its financial statements. Foreign currency transaction gains (losses) were $(0.9) million, $1.0 million, and $(0.8) million for the years ended December 31, 2024, 2023 and 2022, respectively.
We anticipate that our liquidity will continue to be adequate to fund our cash requirements for at least the next twelve months. We manage our working capital to increase our flexibility to pay down debt.
Capital expenditures in 2025, excluding acquisitions, if any, are expected to total approximately $65 million and are expected to be funded by cash from operations. We anticipate that our liquidity will continue to be adequate to fund our cash requirements for at least the next twelve months. We manage our working capital to increase our flexibility to pay down debt.
Accounting for pension and other post-retirement benefit obligations involves numerous assumptions, the most significant of which relate to the following: ▪ the discount rate for measuring the present value of future plan obligations; and ▪ the expected long-term return on plan assets.
Accounting for pension and other post-retirement benefit obligations involves numerous assumptions, the most significant of which relate to the discount rate for measuring the present value of future plan obligations and the expected long-term return on plan assets. 35 Koppers Holdings Inc. 2024 Annual Report We develop our demographics and utilize the work of third-party actuaries to assist in the measurement of these obligations.
GAAP, to adjusted EBITDA on a consolidated basis: Year Ended December 31, (Dollars in millions) 2023 2022 Net income $ 89.8 $ 63.2 Interest expense 71.0 44.8 Depreciation and amortization 57.0 56.1 Income taxes 34.8 31.6 Discontinued operations 0.0 0.6 Sub-total 252.6 196.3 Adjustments to arrive at adjusted EBITDA: LIFO expense (1) 6.0 25.6 Impairment, restructuring and plant closure costs 0.1 1.1 (Gain) on sale of assets (1.8 ) (2.5 ) Mark-to-market commodity hedging (gains) losses (0.5 ) 6.5 Inventory adjustment 0.0 1.1 Total adjustments 3.8 31.8 Adjusted EBITDA $ 256.4 $ 228.1 (1) The LIFO expense adjustment removes the entire impact of LIFO and effectively reflects the results as if we were on a FIFO inventory basis.
GAAP, to adjusted EBITDA on a consolidated basis: Year Ended December 31, 2024 2023 (Dollars in millions) Net income $ 48.6 $ 89.8 Interest expense 76.2 71.0 Depreciation and amortization 67.5 57.0 Income tax provision 20.7 34.8 Sub-total 213.0 252.6 Adjustments to arrive at adjusted EBITDA: LIFO expense (1) 6.1 6.0 Impairment, restructuring and plant closure costs 17.3 0.1 Loss (gain) on sale of assets 10.7 (1.8 ) Mark-to-market commodity hedging losses (gains) 7.9 (0.5 ) Acquisition inventory step-up amortization 2.3 0.0 Pension settlement 4.0 0.0 Amortization of cloud-based software implementation costs 0.3 0.0 Total adjustments 48.6 3.8 Adjusted EBITDA $ 261.6 $ 256.4 (1) The LIFO expense adjustment removes the entire impact of LIFO and effectively reflects the results as if we were on a FIFO inventory basis. 32 Koppers Holdings Inc. 2024 Annual Report Cash Flow Net cash provided by operating activities for the year ended December 31, 2024 was $119.4 million compared to $146.1 million in the prior year.
Cash Flow Net cash provided by operating activities for the year ended December 31, 2023 was $146.1 million compared to $102.3 million in the prior year.
Net cash provided by financing activities for the year ended December 31, 2024 was $35.7 million compared to $2.6 million in the prior year.
The following table reconciles net income, the most directly comparable financial measure determined and reported in accordance with U.S.
Management's Discussion and Analysis of Financial Conditions and Results of Operations which was previously filed with the SEC. Adjusted EBITDA Reconciliation. The following table reconciles net income, the most directly comparable financial measure determined and reported in accordance with U.S.
We develop our demographics and utilize the work of third-party actuaries to assist in the measurement of these obligations. We have selected different discount rates for our pension plans and our other post-retirement benefit plans due to the different projected benefit payment patterns.
We have selected different discount rates for our pension plans and our other post-retirement benefit plans due to the different projected benefit payment patterns. In determining the assumed discount rates at December 31, 2024, we used our third-party actuary’s discount rate model.
To the extent future taxable income projections are not achieved, we could be required to record a valuation allowance against certain deferred tax assets, which would result in additional income tax expense. 34 Koppers Holdings Inc. 2023 Annual Report Asset Retirement Obligations .
The realization of a majority of our deferred tax assets is not subject to any expiration and is dependent upon the reversal of the underlying temporary differences. To the extent future taxable income projections are not achieved, we could be required to record a valuation allowance against certain deferred tax assets, which would result in additional income tax expense.
We annually evaluate the remaining useful life of the intangible asset being amortized to determine whether events or circumstances warrant a revision to the remaining period of amortization. See Note 13 – Goodwill and Intangible Assets for our goodwill and intangible assets accounting policy. We utilize the work of third-party specialists to assist in the fair value estimates.
We annually evaluate the remaining useful life of the intangible asset being amortized to determine whether events or circumstances warrant a revision to the remaining period of amortization.
Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2022, which is incorporated herein by reference, for discussion and analysis of consolidated results of operations and cash flows for the year ended December 31, 2021. 31 Koppers Holdings Inc. 2023 Annual Report Adjusted EBITDA Reconciliation.
The discussion and analysis of our consolidated results of operations and cash flows for the years ended December 31, 2023 compared to December 31, 2022 was included in our Annual Report on Form 10-K for the year ended December 31, 2023 under Item 7.
Results of Operations – Comparison of Years Ended December 31, 2023 and December 31, 2022 Consolidated Results Net sales for the years ended December 31, 2023 and 2022 are summarized by segment in the following table: Year Ended December 31, 2023 2022 Change % Change (Dollars in millions) Railroad and Utility Products and Services $ 897.9 $ 788.3 $ 109.6 14 % Performance Chemicals 671.6 579.9 91.7 16 % Carbon Materials and Chemicals 584.7 612.3 (27.6 ) -5 % $ 2,154.2 $ 1,980.5 $ 173.7 9 % RUPS net sales increased largely due to $83.5 million of pricing increases across multiple markets, particularly for crossties and utility poles.
Results of Operations – Comparison of Years Ended December 31, 2024 and December 31, 2023 Consolidated Results Net sales for the years ended December 31, 2024 and 2023 are summarized by segment in the following table: Year Ended December 31, 2024 2023 Change % Change (Dollars in millions) Railroad and Utility Products and Services $ 942.7 $ 897.9 $ 44.8 5.0 % Performance Chemicals 651.6 671.6 (20.0 ) -3.0 % Carbon Materials and Chemicals 497.8 584.7 (86.9 ) -14.9 % Total $ 2,092.1 $ 2,154.2 $ (62.1 ) -2.9 % 30 Koppers Holdings Inc. 2024 Annual Report RUPS net sales increased largely due to $29.5 million of pricing increases for crossties and utility poles, along with higher volumes for these products and an increase in activity in our railroad bridge services business, partly offset by lower activity in our crosstie recovery business.
Capital expenditures for both periods include increased investment in growth projects, such as the expansion of our RUPS facility in North Little Rock, Arkansas and a yield enhancement project at our CMC facility in Nyborg, Denmark. Net cash provided by financing activities for the year ended December 31, 2023 was $2.6 million compared to $4.8 million in the prior year.
Capital expenditures were higher in the prior year period due to investment in growth projects, such as the expansion of our RUPS facility in North Little Rock, Arkansas which was completed in the fourth quarter of 2023 and a yield enhancement project at our CMC facility in Nyborg, Denmark which was completed in the first quarter of 2024.
Pension and other employee benefit plan funding contributions (for defined benefit plans) are expected to total approximately $7.6 million in 2024, for normal plan operations.
See Note 16 – Leases for discussion of our operating lease obligations. 33 Koppers Holdings Inc. 2024 Annual Report Pension and other employee benefit plan funding contributions (for defined benefit plans) are expected to total approximately $4.0 million in 2025, for normal plan operations.
The maximum amount available under the Credit Facility is increased by the amount of cash held by certain subsidiaries under the terms of the Credit Facility. 32 Koppers Holdings Inc. 2023 Annual Report Our need for cash in the next twelve months relates primarily to contractual obligations which includes debt service, pension plan funding, purchase commitments and operating leases, as well as working capital, capital spending, dividends and share repurchases.
Our need for cash in the next twelve months relates primarily to contractual obligations which includes debt service, pension plan funding, purchase commitments and operating leases, as well as working capital, capital spending, dividends and share repurchases. We may also use cash to pursue other potential strategic acquisitions or voluntary pension plan contributions, including pension plan settlements.
Selling, general and administrative expenses were $20.8 million higher when compared to the prior year period due mainly to an increase in compensation related costs along with an increase in bank fees and travel expenses. These increases were partly offset by a reduction in professional services and insurance costs.
Additionally, asset retirement obligations in our European CMC operations and its related depreciation expense increased during 2024 when compared to the prior year period. Selling, general and administrative expenses were $5.2 million higher when compared to the prior year period due mainly to an increase in compensation-related costs along with an increase in professional service and insurance expenses.
The bonds used are rated AA or higher by a recognized rating agency, and only non-callable bonds are included with the exception of those with a make-whole call feature. The actuary limited the selection to those bonds with a minimum of 100,000 outstanding issues.
This model calculates an equivalent single discount rate for the projected benefit plan cash flows using a hypothetical bond portfolio to match expected cash flows under our benefit plans. The bonds used are rated AA or higher by a recognized rating agency, and only non-callable bonds are included with the exception of those with a make-whole call feature.
Income tax expense increased by $3.2 million when compared to the prior year period due to higher income from continuing operations before income taxes. This increase was partially offset by a lower effective income tax rate when compared to the prior year period.
Income tax expense decreased by $14.1 million when compared to the prior year period due primarily to lower income before income taxes.
As of December 31, 2022, approximately 80 percent of accounts payable was current and 20 percent was 1-30 days past due. Purchase Commitments and Contractual Obligations Purchase commitments consist primarily of raw materials purchase contracts. These are typically not fixed price arrangements; the prices are based on prevailing market prices.
Purchase Commitments and Contractual Obligations Purchase commitments consist primarily of raw materials purchase contracts. These are typically not fixed price arrangements; the prices are based on prevailing market prices. As a result, we generally expect to be able to hedge the purchases with sales at those future prices.
Gain on sale of assets for 2023 was related to the demolition of our closed coal tar distillation facility located in China, while the prior year gain was related to the sale of our utility pole treating facility in Sweetwater, Tennessee.
Loss (gain) on sale of assets was primarily related to the liquidation of our former coal tar distillation facility located in China while the gain on sale of assets for 2023 was related to a sale of assets at that same facility. See Note 3 – Acquisitions, Divestitures and Discontinued Operations.
See Note 15 – Debt for discussion of the contractual obligations under our debt agreements, including interest payments and the timing of principal repayments. See Note 16 – Leases for discussion of our operating lease obligations.
Payments Due by Period 2025 2026-2027 2028-2029 Thereafter Total (Dollars in millions) Purchase commitments $ 207.5 $ 306.9 $ 76.6 $ 0.2 $ 591.2 Contractual obligations are primarily related to our debt agreements and operating leases. See Note 15 – Debt for discussion of the contractual obligations under our debt agreements, including interest payments and the timing of principal repayments.
Interest expense was $26.2 million higher when compared to the prior year period, due primarily to higher interest rates and an increase in the write-off of debt issuance costs of $1.6 million related to the repayment of the 2025 Notes as described in Note 15 – Debt.
Interest expense was $5.2 million higher when compared to the prior year period due to higher borrowings and interest rates, partly offset by the write-off of debt issuance costs in 2023. Loss on pension settlement was $4.0 million in 2024. See Note 14 – Pensions and Post-Retirement Benefit Plans.
Net cash used in investing activities for the year ended December 31, 2023 was $116.0 million compared to $114.8 million in the prior year driven primarily by capital expenditures.
For both periods, the primary source of cash was net income, excluding non-cash items, less working capital usage which was higher in the current year primarily as a result of the timing of purchases and payments. Net cash used in investing activities for the year ended December 31, 2024 was $173.3 million compared to $116.0 million in the prior year.
In the prior year, the primary source of financing cash flows was net borrowings of $36.3 million and the primary uses of financing cash flows were repurchases of common stock, payments of debt issuance costs and dividends paid. Liquidity and Capital Resources Our Credit Facility is described in Note 15 – Debt.
The primary source of financing cash flows for the year ended December 31, 2024 was net borrowings of $88.7 million and the primary uses of financing cash flows were repurchases of common stock, including payments related to taxes withheld under stock-based compensation plans, and dividends paid.
In addition, we are evaluating the termination of our US qualified pension plan, which would be targeted for completion by late 2024. If we proceed with the termination, the additional funding requirement is estimated to be approximately $25 million. The funded status of our defined benefit plans is disclosed in Note 14 – Pensions and Post-Retirement Benefit Plans.
In addition, we terminated our largest United States qualified defined benefit plan through a funding payment of $14 million in February 2025. The funded status of our defined benefit plans is disclosed in Note 14 – Pensions and Post-Retirement Benefit Plans. See Note 10 – Income Taxes for discussion of unrecognized tax benefits.
Removed
Outlook We remain committed to expanding and optimizing our business and making continued progress towards our long-term financial goals.
Added
Forward-looking statements, including the guidance below, are based upon current expectations and are subject to factors that could cause actual results to differ materially from those set forth below. Please see “Forward-Looking Statements” for more information.
Removed
After considering global economic conditions, as well as ongoing uncertainty associated with geopolitical and supply chain challenges, the following summarizes our 2024 financial goals: • sales of approximately $2.25 billion, • adjusted EBITDA of approximately $275 million, and • capital expenditures of approximately $100 million, including capitalized interest, with approximately $29 million of the total allocated to discretionary projects.
Added
Outlook After considering the current intensely competitive environment, global economic conditions, as well as ongoing uncertainty associated with geopolitical and supply chain challenges, we anticipate taking measures to streamline our organization to support an increasingly cost-conscious customer base.
Removed
This is consistent with 2023 crosstie installations of approximately 18.4 million crossties with the small increase expected to be from the commercial market. • According to BMO Capital Markets, market demand for utility poles is expected to remain high throughout 2024 as a result of aging pole infrastructure, efforts to strengthen poles against larger and more frequent storms, a need to add larger poles to support continued electrification and expansion of broadband access. • The Leading Indicator of Remodeling Activity (LIRA) reported by the Joint Center for Housing Studies of Harvard University, predicts a moderate 6.5 percent decrease in annual homeowner renovation and maintenance expenditures through the fourth quarter of 2024 with annual spending on home improvements and repairs expected to drop from $481 billion to $450 billion over the next four quarters. • For the external markets served by our CMC business, we anticipate a slowdown in the near-term in manufacturing overall as well as in the steel, aluminum and carbon black industries.
Added
These actions, some of which are one-time savings and some of which are expected to be permanent savings, are intended to ensure that we extend our decade-long growth in profitability and support a higher margin profile by leveraging a smaller global team highly focused on serving customer preferences.
Removed
The December 2023 S&P Global Mobility forecast saw global light-vehicle sales increasing by 2.8 percent from the prior year and reaching 88.3 million units globally in 2024.
Added
This is slightly lower than the estimated 2024 crosstie purchases of approximately 19.6 million crossties with the small decrease expected to be from Class I railroads.
Removed
Any or all of these factors could impact our actual results for 2024.
Added
We expect the crosstie market to remain stable. • Market demand for utilities poles is expected to grow in 2025 with most of the growth concentrated in the second half of the year, while demand in the first half is expected to remain relatively flat.
Removed
Volume increases for Class I crossties and higher activity in our crosstie recovery business also contributed to the increase. These increases were partly offset by lower activity in our other maintenance of way businesses and a 2.5 percent volume decrease in our utility pole businesses.
Added
Key drivers include aging pole infrastructure, the expansion of renewable energy, vehicle electrification, grid-hardening measures and extreme weather protection. Recently, the realization of potential productivity gains from artificial intelligence (AI) has significantly increased the demand for electricity.
Removed
Foreign currency changes compared to the prior year period had an unfavorable impact on sales in the current year period of $2.0 million, mainly from our Australian utility pole business. PC net sales increased as a result of global price increases of $75.5 million, or 13 percent in the current year period, particularly in the Americas for our copper-based preservatives.
Added
Technology companies are now securing power supplies for data centers to fuel AI, resulting in higher volume demand for both distribution and transmission wood poles.
Removed
Volumes increased by 3.6 percent globally, including a 7.7 percent increase in the Americas, partly offset by volume decreases in Australasia and Europe. Foreign currency changes compared to the prior year period had an unfavorable impact on sales in the current year period of $4.3 million.
Added
We will continue to focus on expanding our presence in the western and midwestern United States and Canada along with improving our efficiency and capturing new customers to increase our market share. • Product demand for our PC business has historically been associated with consumer spending on home repair and remodeling projects in North America.
Removed
CMC net sales decreased due mainly to $27.3 million of volume decreases, primarily phthalic anhydride and carbon pitch, partly offset by volume increases for refined tar. Pricing had a minimal impact on sales for the year as higher prices for carbon pitch in the first half of the year were offset by lower prices for chemical products.
Added
The Leading Indicator of Remodeling Activity (LIRA) reported by the Joint Center for Housing Studies of Harvard University projects that year-over-year spending for annual homeowner renovation and maintenance expenditures is expected to grow by 1.2 percent in 2025.
Removed
Foreign currency changes compared to the prior year period from our international markets had a favorable impact on sales in the current year period of $0.7 million. 30 Koppers Holdings Inc. 2023 Annual Report Cost of sales as a percentage of net sales was 80 percent, compared to 83 percent in the prior year period as global price increases helped offset increased raw material and operating costs incurred in 2022 and 2023 on a consolidated basis and across most of our businesses.
Added
While the LIRA projects a mild increase in 2025, our PC business expects flat or lower volumes as a result of customer market share shifts. • For the external markets served by our CMC business, we have experienced a slowdown in the near-term in manufacturing overall, including the steel, aluminum and carbon black industries.
Removed
The lower effective income tax rate is due mainly to the geographical mix of earnings as shown in the effective income tax reconciliation in Note 10 – Income Taxes.
Added
The availability of coal tar, the primary raw material for our CMC business, is linked to levels of metallurgical coke production. As the global steel industry, excluding Asia, has reduced the production of steel using metallurgical coke, the volumes of coal tar have been reduced.
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The domestic utility pole business's increased sales, operating profit and adjusted EBITDA drove the improved results. PC adjusted EBITDA increased as revised customer pricing enabled us to partly recapture the higher raw material and operating costs that significantly impacted results in 2022, along with a 7.7 percent volume increase in the Americas for wood treatment preservatives.
Added
We are actively working to mitigate the impacts of the long-term decline of coal tar supply by gaining market acceptance for petroleum-blended products, investing in projects to increase distillation yields and balancing raw material supply and cost with customer demand and pricing.
Removed
The price increases were partly offset by $46.0 million of higher raw material and selling, general and administrative costs.
Added
Seasonality and Effects of Weather on Operations Our quarterly operating results fluctuate due to a variety of factors that are outside of our control, including inclement weather conditions, which in the past have affected operating results. Operations at some of our facilities have at times been reduced during the winter months.
Removed
CMC adjusted EBITDA decreased due to an increase of $43.6 million in raw material and selling, general and administrative costs, a $2.8 million bad debt reserve and volume decreases, partly offset by lower operating costs in North America compared to the prior year period as well as $2.3 million of insurance proceeds recognized in the current year period.
Added
Moreover, demand for some of our products declines during periods of inclement weather. As a result of the foregoing, we anticipate that we may experience material fluctuations in quarterly operating results. Historically, our operating results have been significantly lower in the first and fourth calendar quarters as compared to the second and third calendar quarters.
Removed
Foreign currency changes from our international markets had an unfavorable impact on profitability in the current year period of $1.2 million. CMC’s near-term profitability may be negatively affected by customers associated with bad debt reserve activity, but this is not expected to have a material effect on the Company’s overall profitability in 2024. See Item 7.
Added
Volumes in our domestic utility pole business increased 6.9 percent primarily as a result of our acquisition of Brown Wood and was partly offset by a decrease in our legacy utility pole business due to temporary customer overstock and budget realignment.
Removed
The increase was primarily the result of higher net sales and improved collection of accounts receivable, partly offset by higher costs and an increase in inventory consistent with restocking crosstie inventory in our RUPS segment.
Added
PC net sales decreased due primarily to sales to the recently acquired Brown Wood of approximately $9 million no longer being included in our reported sales beginning April 1, 2024, lower volumes of our industrial non-copper based preservatives and lower pricing of $3.1 million in the Americas.
Removed
Liquidity As of December 31, 2023, the maximum amount available under the Credit Facility considering restrictions from debt covenants was approximately $386 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeSee Note 15 – Debt for discussion of the changes in debt and our interest rate swap agreements. For variable rate debt, interest rate changes impact earnings and cash flows, assuming other factors are held constant.
Biggest changeSee Note 15 – Debt for discussion of the changes in debt and Note 5 - Derivative Financial Instruments for discussion of our interest rate swap agreements. For variable rate debt, interest rate changes impact earnings and cash flows.
The following analyses present the sensitivity of the market value, earnings and cash flows of our financial instruments and foreign operations to hypothetical changes in interest and exchange rates and market prices for copper as if these changes occurred at December 31, 2023.
The following analyses present the sensitivity of the market value, earnings and cash flows of our financial instruments and foreign operations to hypothetical changes in interest and exchange rates and market prices for copper as if these changes occurred at December 31, 2024.
Holding other variables constant, if there were a ten percent reduction in all relevant exchange rates, the effect on our earnings, based on actual earnings from foreign operations for the year ended December 31, 2023, would be a reduction of approximately $5.4 million. 36 Koppers Holdings Inc. 2023 Annual Report
Holding other variables constant, if there were a ten percent reduction in all relevant exchange rates, the effect on our earnings, based on actual earnings from foreign operations for the year ended December 31, 2024, would be a reduction of approximately $4.2 million. 37 Koppers Holdings Inc. 2024 Annual Report
See Note 5 – Derivative Financial Instruments for quantities and the financial statement impact of these contracts as of December 31, 2023. Holding other variables constant, if there were a 10 percent reduction in the December 31, 2023 market price of copper, the fair value of these contracts would be a loss of $11.7 million.
See Note 5 – Derivative Financial Instruments for quantities and the financial statement impact of these contracts as of December 31, 2024. Holding other variables constant, if there were a 10 percent reduction in the December 31, 2024 market price of copper, the fair value of these contracts would be a loss of $28.2 million.
This hypothetical loss would be allocated $9.5 million to other comprehensive income and $2.2 million recognized in income, before tax. Interest Rate and Debt Sensitivity Analysis . Our exposure to market risk for changes in interest rates relates primarily to our interest payments on our variable rate debt obligations.
This hypothetical loss would be allocated $11.1 million to other comprehensive income and $17.1 million recognized in income, before tax. Interest Rate and Debt Sensitivity Analysis . Our exposure to market risk for changes in interest rates relates primarily to our interest payments on our variable rate debt obligations.
These forward-looking statements are selective in nature and only address the potential impacts from financial instruments and foreign operations. They do not include other potential effects that could impact our business as a result of these changes. Commodity Price Sensitivity Analysis.
These forward-looking statements are selective in nature and only address the potential impacts from financial instruments and foreign operations. They do not include other potential effects that could impact our business as a result of these changes. 36 Koppers Holdings Inc. 2024 Annual Report Commodity Price Sensitivity Analysis.
A one percentage point increase in interest rates would have decreased earnings and cash flows by approximately $4.6 million over a twelve-month period, holding other variables constant inclusive of interest rate swap effects. Exchange Rate Sensitivity Analysis .
Assuming other factors are held constant, a one percentage point increase in interest rates would have decreased earnings and cash flows by approximately $5.5 million over a twelve-month period, holding other variables constant, inclusive of interest rate swap effects. Exchange Rate Sensitivity Analysis .

Other KOP 10-K year-over-year comparisons