Item 1. Financial Statements
ITEM 1. FINANCIAL STATEMENTS
KOPPERS HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended
March 31,
2026 2025
(Dollars in millions, except share and per share amounts) (Unaudited) (Unaudited)
Net sales $ 455.3 $ 456.5
Cost of sales 368.7 350.7
Depreciation and amortization 19.4 18.0
Selling, general and administrative 41.7 41.1
Impairment and restructuring 7.8 20.0
(Gain) on sale of assets ( 4.3 ) ( 0.3 )
Operating profit 22.0 27.0
Other income, net 0.9 1.4
Interest expense 15.0 16.6
Loss on pension settlement 0.0 29.0
Income (loss) before income taxes 7.9 ( 17.2 )
Income tax provision (benefit) 0.8 ( 3.3 )
Net income (loss) $ 7.1 $ ( 13.9 )
Earnings (loss) per common share:
Basic $ 0.36 $ ( 0.68 )
Diluted $ 0.35 $ ( 0.68 )
Weighted average shares outstanding (in thousands):
Basic 19,552 20,369
Diluted 20,122 20,369
KOPPERS HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Three Months Ended
March 31,
2026 2025
(Dollars in millions) (Unaudited) (Unaudited)
Net income (loss) $ 7.1 $ ( 13.9 )
Changes in other comprehensive income (loss):
Currency translation adjustment ( 5.8 ) 9.2
Cash flow hedges, net of tax of $ 0.3 and $ 1.3
0.8 3.0
Pension adjustments, net of tax of $ 0.0 and $ 8.3
0.3 25.1
Comprehensive income $ 2.4 $ 23.4
The accompanying notes are an integral part of these condensed consolidated financial statements.
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KOPPERS HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEET
March 31, 2026 December 31, 2025
(Dollars in millions, except share and per share amounts) (Unaudited)
Assets
Cash and cash equivalents $ 42.8 $ 38.0
Accounts receivable, net of allowance of $ 4.3 and $ 7.0
181.0 158.7
Inventories, net 395.9 411.2
Derivative contracts 26.2 31.5
Other current assets 23.0 29.3
Total current assets 668.9 668.7
Property, plant and equipment, net of accumulated depreciation of $ 473.1 and $ 465.4
645.7 650.9
Goodwill 329.4 329.4
Intangible assets, net 103.1 106.7
Operating lease right-of-use assets 102.5 102.9
Deferred tax assets 6.5 7.0
Other assets 24.2 21.2
Total assets $ 1,880.3 $ 1,886.8
Liabilities
Accounts payable $ 143.4 $ 122.4
Accrued liabilities 70.1 72.6
Current operating lease liabilities 28.1 27.2
Current maturities of long-term debt 4.9 4.9
Total current liabilities 246.5 227.1
Long-term debt 915.3 914.3
Operating lease liabilities 74.6 76.1
Accrued postretirement benefits 13.1 13.7
Deferred tax liabilities 43.9 43.7
Other long-term liabilities 37.4 37.6
Total liabilities 1,330.8 1,312.5
Commitments and contingent liabilities (Note 12)
Equity
Senior Convertible Preferred Stock, $ 0.01 par value per share; 10,000,000
shares authorized; no shares issued
0.0 0.0
Common Stock, $ 0.01 par value per share; 80,000,000 shares authorized;
26,789,723 and 26,213,052 shares issued
0.3 0.3
Additional paid-in capital 336.4 332.4
Retained earnings 544.3 539.4
Accumulated other comprehensive loss ( 65.8 ) ( 61.4 )
Treasury stock, at cost, 7,560,355 and 6,757,247 shares
( 265.7 ) ( 236.7 )
Total Koppers shareholders’ equity 549.5 574.0
Noncontrolling interests 0.0 0.3
Total equity 549.5 574.3
Total liabilities and equity $ 1,880.3 $ 1,886.8
The accompanying notes are an integral part of these condensed consolidated financial statements.
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KOPPERS HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Three Months Ended March 31,
2026 2025
(Dollars in millions) (Unaudited) (Unaudited)
Cash provided by (used in) operating activities:
Net income (loss) $ 7.1 $ ( 13.9 )
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 19.4 18.0
Depreciation in impairment and restructuring 0.0 12.2
Stock-based compensation 3.9 6.6
Change in derivative contracts 3.9 ( 9.1 )
Non-cash interest expense 0.9 0.9
(Gain) on sale of assets ( 4.3 ) ( 0.6 )
Insurance proceeds 0.0 ( 2.2 )
Deferred income taxes 0.0 0.3
Pension settlement 0.0 29.0
Change in other liabilities ( 0.3 ) 4.0
Cloud-based software implementation costs, net of amortization 0.1 ( 0.9 )
Other - net 0.1 ( 0.6 )
Changes in working capital:
Accounts receivable ( 23.2 ) ( 11.1 )
Inventories 17.8 4.0
Accounts payable 22.1 ( 32.8 )
Accrued liabilities 1.1 ( 24.3 )
Other working capital ( 2.3 ) ( 2.2 )
Net cash provided by (used in) operating activities 46.3 ( 22.7 )
Cash (used in) provided by investing activities:
Capital expenditures ( 11.4 ) ( 14.3 )
Insurance proceeds 0.0 2.2
Sale of assets 0.0 2.1
Sale of business and divestitures 0.5 ( 7.6 )
Other investing activities 0.4 0.0
Net cash used in investing activities ( 10.5 ) ( 17.6 )
Cash provided by (used in) financing activities:
Borrowings of credit facility 166.8 144.4
Repayments of credit facility ( 165.5 ) ( 94.1 )
Repayments of long-term debt ( 1.2 ) ( 1.2 )
Issuances of Common Stock 0.1 0.3
Repurchases of Common Stock ( 29.0 ) ( 19.1 )
Dividends paid and return of capital to noncontrolling interests ( 2.2 ) ( 1.6 )
Net cash (used in) provided by financing activities ( 31.0 ) 28.7
Effect of exchange rate changes on cash 0.0 1.0
Net increase (decrease) in cash and cash equivalents 4.8 ( 10.6 )
Cash and cash equivalents at beginning of period 38.0 43.9
Cash and cash equivalents at end of period $ 42.8 $ 33.3
Supplemental disclosure of non-cash investing and financing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities $ 7.3 $ 3.9
Accrued capital expenditures 0.4 3.5
The accompanying notes are an integral part of these condensed consolidated financial statements.
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KOPPERS HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Three Months Ended
March 31,
2026 2025
(Dollars in millions, except per share amounts) (Unaudited) (Unaudited)
Total equity – beginning of period $ 574.3 $ 489.0
Common Stock:
Balance at beginning and end of period 0.3 0.3
Additional paid-in capital:
Balance at beginning of period 332.4 317.2
Employee stock plans 3.9 6.6
Issuance of common stock 0.1 0.3
Balance at end of period 336.4 324.1
Retained earnings:
Balance at beginning of period 539.4 490.3
Net income (loss) 7.1 ( 13.9 )
Common Stock dividends ($ 0.09 and $ 0.08 per share)
( 1.9 ) ( 1.9 )
Return of capital to noncontrolling interests ( 0.3 ) 0.0
Balance at end of period 544.3 474.5
Accumulated other comprehensive loss:
Balance at beginning of period ( 61.4 ) ( 120.6 )
Currency translation adjustment ( 5.5 ) 9.2
Cash flow hedges, net of tax (1)
0.8 3.0
Pension adjustments, net of tax (2)
0.3 25.1
Balance at end of period ( 65.8 ) ( 83.3 )
Treasury stock:
Balance at beginning of period ( 236.7 ) ( 198.5 )
Purchases ( 29.0 ) ( 19.1 )
Balance at end of period ( 265.7 ) ( 217.6 )
Noncontrolling interests:
Balance at beginning of period 0.3 0.3
Currency translation adjustment ( 0.3 ) 0.0
Balance at end of period 0.0 0.3
Total equity – end of period $ 549.5 $ 498.3
(Shares in thousands)
Common Stock:
Balance at beginning of period 26,213 25,761
Issued for employee stock plans 577 359
Balance at end of period 26,790 26,120
Treasury Stock:
Balance at beginning of period ( 6,757 ) ( 5,480 )
Shares repurchased ( 803 ) ( 636 )
Balance at end of period ( 7,560 ) ( 6,116 )
Common Stock Outstanding 19,230 20,004
(1) Amounts reclassified from accumulated other comprehensive income to net income related to derivative financial instruments, net of tax, were $ 0.4 million and $ 0.6 million during the three months ended March 31, 2026 and 2025, respectively.
(2) Amounts reclassified from accumulated other comprehensive income to net income consist of amounts shown for pension adjustments. This component of accumulated other comprehensive income is included in the computation of net periodic pension cost as disclosed in Note 10 – Pensions and Post-Retirement Benefit Plans.
The accompanying notes are an integral part of these condensed consolidated financial statements.
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KOPPERS HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. Basis of Presentation and New Accounting Pronouncements
Basis of Presentation – The accompanying unaudited condensed consolidated financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the United States applicable to interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation of Koppers Holdings Inc.’s and its subsidiaries’ (Koppers, Koppers Holdings, the Company, we or us) financial position and interim results as of and for the periods presented have been included. All such adjustments are of a normal recurring nature unless disclosed otherwise. Because our business is seasonal, results for interim periods are not necessarily indicative of those that may be expected for a full year. The Condensed Consolidated Balance Sheet as of December 31, 2025 has been summarized from the audited balance sheet contained in the Annual Report on Form 10-K as of and for the year ended December 31, 2025. Certain prior period amounts in the condensed consolidated financial statements and notes to the condensed consolidated financial statements have been reclassified to conform to the current period’s presentation.
The financial information included herein should be read in conjunction with our audited consolidated financial statements and related notes included in our Annual Report on Form 10-K as of and for the year ended December 31, 2025.
New Accounting Pronouncements – In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03, Income Statement - Reporting Comprehensive Income (Topic 220): Expense Disaggregation Disclosures. This ASU requires the disaggregation of certain expenses into specific categories, such as purchases of inventory, employee compensation, depreciation and intangible asset amortization. Additionally, the amendments require disclosure of the total amount of selling expenses and an annual disclosure of the definition of selling expenses. ASU No. 2024-03 is effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any and all prior periods presented in the financial statements. We are currently evaluating this ASU to determine its impact on our disclosures.
2. Restructuring
Plant Closures and Restructuring – The following table summarizes restructuring activities:
Three Months Ended March 31, 2026 Three Months Ended March 31, 2025 Cumulative Total
(Dollars in millions)
Phthalic Anhydride Shutdown:
Severance and employee benefits $ 0.1 $ 0.1 $ 1.1
Depreciation and asset disposal costs 0.0 13.9 26.6
Plant cleaning, waste disposal and demolition costs 0.4 0.0 13.8
Workforce reduction program 0.0 3.1 8.3
Consulting services 2.4 2.9 18.3
Other restructuring costs 4.9 0.0 4.9
Total impairment and restructuring $ 7.8 $ 20.0 $ 73.0
Phthalic Anhydride Shutdown – In December 2024, we made the decision to discontinue phthalic anhydride production at our facility in Stickney, Illinois. The decision was driven by significant near-term capital spending requirements that could not be economically justified by end-market projections and will substantially reduce annual emissions of certain regulated air contaminants. During the second quarter of 2025, we completed the shutdown of the phthalic anhydride plant. We expect this action to result in pre-tax charges to earnings of $ 50 million to $ 54 million through the end of 2026, approximately $ 28 million of which constitutes non-cash charges and approximately $ 22 million to $ 26 million of which constitutes cash expenditures. Estimates of the total cumulative pre-tax amount incurred and to be incurred for each major type of cost associated with the discontinuation plan are: (i) retention and severance costs of approximately $ 1 million, (ii) accelerated depreciation and asset write-down costs of approximately $ 28 million, and (iii) plant cleaning, waste disposal and demolition costs of approximately $ 21 million to $ 25 million.
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Workforce Reduction Program – In November 2024, we committed to a workforce reduction program across select U.S. locations, which is intended to streamline operations and reduce costs. This workforce reduction program resulted in the reallocation of people and resources, included voluntary and involuntary reductions in employees and ended in the fourth quarter of 2025.
Consulting Services – We have incurred and will continue to incur consulting and other professional service fees starting with a comprehensive assessment of each of our businesses and functions which began in the fourth quarter of 2024 and was completed during the third quarter of 2025. We then started the multi-year company-wide transformative project to design and implement changes that we believe will enable us to reach our full potential and improve profitability, modernize business processes and pursue portfolio realignment, if necessary.
Other Restructuring Costs – In the first quarter of 2026, we announced plans to idle two of our facilities. Consolidating production of these facilities will help us optimize our network, better align capacity with demand, reduce operating costs and strengthen the long-term competitiveness of our operations.
We made the decision to idle production activities at our Utility and Industrial Products facility in Vance, Alabama, effective in February 2026. Substantially all production handled at this location was transitioned to our Kennedy, Alabama plant. These facilities were located within 60 miles of each other and served the same market which resulted in plant underutilization, redundancy and higher operating costs.
We also announced our plan to idle production activities at our Railroad Products and Services facility in Florence, South Carolina due to lower overall future forecasted demand from the facility's largest customer. We expect to ramp down production at Florence over the next several months with plant idling activities to be completed by November 2026. During this time period, we will transition incremental production to our facility in Guthrie, Kentucky.
The following table includes details of our phthalic anhydride shutdown and workforce reduction program liabilities:
Phthalic Anhydride Shutdown Workforce Reduction Program
(Dollars in millions)
Liability at December 31, 2024 $ 0.0 $ 4.4
Accrual 13.5 1.2
Cash paid ( 8.1 ) ( 5.0 )
Liability at December 31, 2025 $ 5.4 $ 0.6
Accrual 0.5 0.0
Cash paid ( 0.7 ) ( 0.4 )
Liability at March 31, 2026 $ 5.2 $ 0.2
KCCC Liquidation – In July 2024, Koppers and Tangshan Iron & Steel Group Co. Ltd. (TISCO) signed an agreement to effectuate the ultimate liquidation of Koppers (China) Carbon & Chemical Company Limited (KCCC), which ceased operations in 2015. The liquidation of KCCC was completed in February 2026 which resulted in a non-cash gain of approximately $ 4 million during the first quarter of 2026.
3. Fair Value Measurements
The following table presents the estimated fair values and the related carrying amounts of our financial instruments:
March 31, 2026 December 31, 2025
Fair Value Carrying Value Fair Value Carrying Value
(Dollars in millions)
Assets - Investments and Other Assets $ 1.3 $ 1.3 $ 1.3 $ 1.3
Liabilities - Debt (including current portion) $ 936.4 $ 928.8 $ 933.6 $ 928.3
Investments and Other Assets – Represents the broker-quoted cash surrender value on universal life insurance policies. This asset is classified as Level 2 in the valuation hierarchy and is measured from values received from financial institutions.
Debt – The fair value of our long-term debt is estimated based on the market prices for the same or similar issuances or on the current rates offered to us for debt of the same remaining maturities (Level 2). The fair value of our Credit Facility approximates carrying value due to the variable rate nature of this instrument.
See Note 4 – Derivative Financial Instruments, for the fair value of our derivative financial instruments.
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4. Derivative Financial Instruments
We utilize derivative instruments to manage exposures to risks that have been identified, measured and are capable of being mitigated. The primary risks that we manage by using derivative instruments are commodity price risk associated with copper, fuel oil, foreign currency exchange risk and interest rate risk associated with variable rate borrowings. Generally, we enter into master netting arrangements with the counterparties and offset net derivative positions with the same counterparties. Currently, our agreements do not require cash collateral.
The Company recognizes all derivative instruments as either assets or liabilities at fair value on the balance sheet. The derivative instruments are classified as current or noncurrent based upon the expected timing of cash flows and are subject to offset under our master netting arrangements. A derivative instrument's fair value is determined using significant other observable inputs, a Level 2 fair value measurement.
For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income and is reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative instruments representing hedge ineffectiveness are recognized in current earnings. In our condensed consolidated statement of cash flows, settlements of derivative instruments are classified as operating activities.
Swap contracts on copper are used to manage the price risk associated with forecasted purchases of materials used in our manufacturing processes. Generally, we will not hedge cash flow exposures for durations longer than 36 months and we have hedged certain volumes of copper through the end of 2026. Prior to July 2025, we designated certain of our commodity swaps as cash flow hedges of forecasted purchases of commodities. For those commodity swaps where hedge accounting is not elected, the unrealized gain or loss on the derivative is reported as cost of sales in the condensed consolidated statement of operations.
During the third quarter of 2025, our quarterly effectiveness assessment identified that our hedging contracts had fallen outside the required effectiveness thresholds to continue cash flow hedge accounting. This was caused by the increased and cumulative volatility in the market prices for copper during the first half of 2025. Accordingly, we prospectively discontinued cash flow hedge accounting in the third quarter of 2025. As of March 31, 2026, $ 2.0 million remained in accumulated other comprehensive income and will be released to income as the underlying hedge contracts mature through December 2026. Subsequent changes in the fair value of these copper swap contracts will continue to be recognized immediately in earnings until such swap contracts settle or mature.
We enter into heating oil swap contracts to manage price risk associated with fuel oil purchases for our plant operations and certain raw material requirements. Generally, we will not hedge cash flow exposures for durations longer than 36 months and we have hedged certain volumes of heating oil through the end of 2027. These swap contracts are not designated as hedges so the unrealized gain or loss on the derivative is reported as cost of sales in the condensed consolidated statement of operations. As of March 31, 2026 and December 31, 2025, we had contracts totaling 3.6 million and 3.8 million gallons, respectively.
We enter into foreign currency forward contracts to manage foreign currency risk associated with our receivable and payable balances in addition to foreign-denominated sales. These forward contracts related to foreign currency are not designated as hedges so the unrealized gain or loss on the derivative is reported as cost of sales in the condensed consolidated statement of operations.
We enter into interest rate swaps to effectively convert portions of our variable interest rate debt into fixed rate debt to add stability to interest expense and to manage our exposure to interest rate movements. We entered into interest rate swap agreements with an aggregate notional value of $ 400.0 million at a weighted average fixed Secured Overnight Financing Rate (SOFR) of 3.97 percent for a portion of our variable rate debt. All swap agreements expire in April 2027. The interest rate swaps have been designated as cash flow hedges on interest payments involving the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
See the condensed consolidated statement of comprehensive income and condensed consolidated statement of shareholders' equity for amounts recorded in other comprehensive income and for amounts reclassified from accumulated other comprehensive income into net income.
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The fair value of the outstanding derivative contracts recorded in the balance sheet are as follows:
March 31, 2026
Copper Swap Contracts Heating Oil Contracts Foreign Currency Forward
Contracts Interest Rate Swap Contracts Total
(Dollars in millions)
Derivative contracts $ 23.4 $ 2.4 $ 0.0 $ 0.4 $ 26.2
Other assets 0.0 0.5 0.0 0.0 0.5
Accrued liabilities 0.0 0.0 ( 0.1 ) ( 1.6 ) ( 1.7 )
Other long-term liabilities 0.0 0.0 0.0 ( 0.2 ) ( 0.2 )
Net asset (liability) on balance sheet $ 23.4 $ 2.9 $ ( 0.1 ) $ ( 1.4 ) $ 24.8
Accumulated other comprehensive gain, net of tax $ 2.0 $ 0.0 $ 0.0 $ 1.0 $ 3.0
December 31, 2025
Copper Swap Contracts Heating Oil Contracts Foreign Currency Forward
Contracts Interest Rate Swap Contracts Total
(Dollars in millions)
Derivative contracts $ 31.4 $ 0.0 $ 0.0 $ 0.1 $ 31.5
Accrued liabilities 0.0 ( 0.4 ) 0.0 ( 2.2 ) ( 2.6 )
Other long-term liabilities 0.0 0.0 0.0 ( 1.1 ) ( 1.1 )
Net asset (liability) on balance sheet $ 31.4 $ ( 0.4 ) $ 0.0 $ ( 3.2 ) $ 27.8
Accumulated other comprehensive gain (loss), net of tax $ 2.5 $ 0.0 $ 0.0 $ ( 2.4 ) $ 0.1
We estimate that unrealized gains, net of tax, for commodity price hedging of $ 2.0 million and unrealized losses, net of tax, for interest rate swaps of $ 0.9 million, respectively, will be reclassified from other comprehensive income into earnings over the next twelve months .
The unrealized gain (loss) from our hedging contracts is as follows:
Three Months Ended
March 31,
2026 2025
(Dollars in millions)
Copper swap contracts $ ( 7.3 ) $ 9.0
Heating oil contracts 3.4 0.2
Foreign currency forward contracts ( 0.1 ) 0.5
Copper Swap Contracts – We had outstanding copper swap contracts of the following amounts:
Units Outstanding (in Pounds) Net Fair Value – Asset
March 31, 2026 December 31, 2025 March 31, 2026 December 31, 2025
(Amounts in millions)
Not designated as hedges 23.7 25.6 $ 23.4 $ 31.4
Foreign Currency Forward Contracts – The net currency units outstanding for contracts were:
March 31, 2026 December 31, 2025
(In millions)
British Pound Sterling GBP 0.0 GBP 0.3
United States Dollars USD 2.5 USD 9.2
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5. Earnings and Dividends per Common Share
The following table sets forth the computation of basic and diluted earnings per common share:
Three Months Ended
March 31,
2026 2025
(Dollars in millions, except share and per share amounts)
Net income (loss) $ 7.1 $ ( 13.9 )
Weighted average common shares outstanding (in thousands):
Basic 19,552 20,369
Effect of dilutive securities 570 0
Diluted 20,122 20,369
Earnings per common share:
Basic $ 0.36 $ ( 0.68 )
Diluted $ 0.35 $ ( 0.68 )
Antidilutive securities excluded from computation of diluted
earnings per common share 135 1,110
On May 7, 2026, we declared a quarterly dividend of $ 0.09 per common share, payable on June 15, 2026 to shareholders of record as of May 29, 2026.
6. Stock-based Compensation
The board of directors granted restricted stock units and performance stock units (collectively, the stock units) to certain employee participants in January 2026. Most grants of restricted stock units vest in three or four years . Performance stock units vest based upon either a performance condition or a market condition. For units granted in 2025 and prior, performance stock units granted with a performance condition have a cumulative three-year performance objective based on adjusted EBITDA (see Note 7 – Segment Information). For units granted in 2026, performance stock units granted with a performance condition have a cumulative adjusted earnings per share objective and a cumulative free cash flow objective, each weighted at 50 percent, with adjusted EBITDA margin used as a performance modifier (i.e. plus or minus 25 percent of actual earned performance). For performance stock units granted with a market condition, the applicable objective is based on our total shareholder return relative to the Standard & Poor’s SmallCap 600 Materials Index and has multi-year performance objectives. Both types of performance stock units have a three-year period for vesting, if the applicable performance objectives are achieved.
The number of performance stock units granted represents the target award and participants have the ability to earn between zero and 200 percent of the target award based upon actual performance for units granted in 2025 and prior, and between zero and 250 percent of the target award based upon actual performance for units granted in 2026. If minimum performance criteria are not achieved, no performance stock units will vest. For the awards granted in January 2026, target shares for units with a market condition totaled 124,878 and target shares for units with a performance condition totaled 137,844 .
We calculated the fair value of the performance stock unit awards with a market condition on the date of the grant using assumptions listed below. These awards incorporate a fair value cap such that the number of awards that vest will be reduced if our stock price exceeds the cap at the end of the performance measurement period:
January 2026 Grant
Grant date price per share of performance award $ 26.93
Expected volatility 37.74 %
Risk-free interest rate 3.53 %
Look-back period in years 3.00
Grant date fair value per share $ 27.97
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The following table shows a summary of the status and activity of non-vested stock units:
Restricted
Stock Units Performance
Stock Units Total
Stock Units Weighted Average
Grant Date Fair
Value per Unit
Non-vested at December 31, 2025 530,237 734,231 1,264,468 $ 35.22
Granted 219,528 262,722 482,250 $ 27.24
Credited from dividends 371 643 1,014 $ 28.20
Performance share adjustment 0 28,505 28,505 $ 28.93
Vested ( 209,958 ) ( 329,924 ) ( 539,882 ) $ 33.53
Forfeited ( 20,167 ) ( 16,761 ) ( 36,928 ) $ 36.95
Non-vested at March 31, 2026 520,011 679,416 1,199,427 $ 32.60
The following table shows a summary of the status and activity of stock options:
Options Weighted Average
Exercise Price
per Option Weighted Average
Remaining
Contractual Term
(in years) Aggregate Intrinsic
Value (in millions)
Outstanding at December 31, 2025 507,130 $ 28.62
Exercised ( 70,178 ) $ 19.26
Outstanding at March 31, 2026 436,952 $ 30.12 3.59 $ 4.1
Exercisable at March 31, 2026 436,952 $ 30.12 3.59 $ 4.1
The following table presents total stock-based compensation expense recognized in the condensed consolidated statement of operations:
Three Months Ended
March 31,
2026 2025
(Dollars in millions)
Selling, general and administrative expenses $ 3.9 $ 6.6
Less related income tax benefit 1.1 2.0
Decrease in net income $ 2.8 $ 4.6
7. Segment Information
We have three reportable segments: Railroad and Utility Products and Services (RUPS), Performance Chemicals (PC) and Carbon Materials and Chemicals (CMC). Our reportable segments contain multiple aggregated business units since management believes the long-term financial performance of these business units is affected by similar economic conditions. The reportable segments are each managed separately because they manufacture and distribute distinct products with different production processes.
Our RUPS segment primarily sells pressure-treated railroad ties to the railroad industry and treated utility poles to utility markets. Railroad products and services include procuring and treating items such as crossties, switch ties and various types of lumber used for railroad bridges and crossings. Utility products include the pressure treatment of transmission and distribution poles for electric, telephone and broadband utilities. In addition, we provide untreated wood products and rail joint bars, which are steel bars used to join rails together for railroads, to the railroad markets and inspection services to the utility markets. We also operate a business related to the recovery of used crossties, serving the same customer base as our North American railroad business.
Our PC segment develops, manufactures, and markets wood preservation chemicals and wood treatment technologies and services to a diverse range of end-markets including residential, industrial, commercial construction and agricultural applications.
Our CMC segment is primarily a manufacturer of creosote, carbon pitch, naphthalene and carbon black feedstock. Creosote is used in the treatment of wood and carbon black feedstock is used in the production of carbon black. Carbon pitch is a critical raw material used in the production of aluminum and steel. Naphthalene is used as a surfactant in the production of concrete.
Our measure of segment profitability is adjusted income before interest expense, income taxes, depreciation, amortization and certain non-cash and/or non-recurring items that do not contribute directly to management’s evaluation of our operating results (as defined by us, adjusted EBITDA). These non-cash and/or non-recurring items typically include last-in, first-out (LIFO) inventory effects, impairment, restructuring and plant closure costs, significant gains or losses on sale
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of assets, mark-to-market commodity hedging, acquisition-related charges, amortization of cloud-based software implementation costs and other unusual items. This presentation is consistent with how our chief operating decision maker evaluates the results of operations and makes strategic decisions about the business. 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 prior to 2026. For these reasons, we believe that adjusted EBITDA represents the most relevant measure of segment profit and loss.
Adjusted EBITDA is reconciled to net income on a consolidated basis, the most directly comparable financial measure determined and reported in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Intersegment transactions are eliminated in consolidation.
Contract Balances – The timing of revenue recognition results in both billed accounts receivable and unbilled receivables, both classified as accounts receivable, net of allowance within the condensed consolidated balance sheet. Contract assets of $ 1.7 million and $ 1.8 million are recorded within accounts receivable, net of allowance within the condensed consolidated balance sheet as of March 31, 2026 and December 31, 2025, respectively.
Segment Revenues for Significant Product Lines
Three Months Ended
March 31,
2026 2025
(Dollars in millions)
Railroad and Utility Products and Services:
Railroad treated products $ 134.2 $ 146.3
Utility poles 74.8 67.9
Railroad infrastructure products and services 11.0 20.8
Total Railroad and Utility Products and Services $ 220.0 $ 235.0
Performance Chemicals:
Wood preservative products and other $ 142.1 $ 120.9
Carbon Materials and Chemicals:
Pitch and related products $ 70.2 $ 65.2
Carbon black feedstock and distillates 13.8 14.2
Naphthalene, phthalic anhydride, and other chemicals 9.2 21.2
Total Carbon Materials and Chemicals $ 93.2 $ 100.6
Total $ 455.3 $ 456.5
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Segment Expenses
Three Months Ended
March 31,
2026 2025
(Dollars in millions)
Cost of sales:
Railroad and Utility Products and Services $ 176.0 $ 190.7
Performance Chemicals 110.2 79.0
Carbon Materials and Chemicals 82.5 81.0
Total $ 368.7 $ 350.7
Selling, general and administrative expenses:
Railroad and Utility Products and Services $ 18.3 $ 18.2
Performance Chemicals 14.9 15.1
Carbon Materials and Chemicals 8.5 7.8
Total $ 41.7 $ 41.1
Other (income) expense to reconcile to Adjusted EBITDA (1) :
Railroad and Utility Products and Services $ 3.1 $ 0.6
Performance Chemicals ( 8.8 ) 6.7
Carbon Materials and Chemicals 1.3 1.9
Total $ ( 4.4 ) $ 9.2
Adjusted EBITDA:
Railroad and Utility Products and Services $ 22.6 $ 25.5
Performance Chemicals 25.8 20.1
Carbon Materials and Chemicals 0.9 9.9
Total $ 49.3 $ 55.5
(1) Other (income) expense amounts primarily relate to miscellaneous (income) expense and the adjustments to reconcile to adjusted EBITDA such as acquisition-related charges, LIFO inventory effects and mark-to-market commodity hedging.
Segment Adjusted EBITDA
Three Months Ended
March 31,
2026 2025
(Dollars in millions)
Adjusted EBITDA:
Railroad and Utility Products and Services $ 22.6 $ 25.5
Performance Chemicals 25.8 20.1
Carbon Materials and Chemicals 0.9 9.9
Items excluded from the determination of segment profit:
Acquisition inventory step-up amortization ( 0.3 ) 0.0
Amortization of cloud-based software implementation costs
( 0.5 ) ( 0.3 )
Gain on sale of assets 4.3 0.3
Impairment, restructuring and plant closure costs (1)
( 7.8 ) ( 20.0 )
LIFO benefit (2)
1.2 1.8
Mark-to-market commodity hedging (losses) gains ( 3.9 ) 9.1
Pension settlement and expense 0.0 ( 29.0 )
Depreciation and amortization ( 19.4 ) ( 18.0 )
Interest expense ( 15.0 ) ( 16.6 )
Income tax provision ( 0.8 ) 3.3
Net income (loss) $ 7.1 $ ( 13.9 )
(1) See Note 2 - Restructuring.
(2) The LIFO expense adjustment removes the entire impact of LIFO and effectively reflects the results as if we were on a first-in, first-out (FIFO) inventory basis.
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Other Segment Disclosures
Three Months Ended
March 31,
2026 2025
(Dollars in millions)
Intersegment revenues:
Performance Chemicals $ 7.2 $ 6.9
Carbon Materials and Chemicals 23.1 22.2
Total $ 30.3 $ 29.1
Depreciation and amortization expense:
Railroad and Utility Products and Services $ 8.2 $ 8.5
Performance Chemicals 4.3 3.8
Carbon Materials and Chemicals 6.9 5.7
Total $ 19.4 $ 18.0
Capital expenditures:
Railroad and Utility Products and Services $ 5.4 $ 5.1
Performance Chemicals 2.8 3.5
Carbon Materials and Chemicals 3.0 5.0
Corporate 0.2 0.7
Total $ 11.4 $ 14.3
Segment Assets
March 31, 2026 December 31, 2025
(Dollars in millions)
Segment assets:
Railroad and Utility Products and Services $ 841.0 $ 827.5
Performance Chemicals 547.9 536.6
Carbon Materials and Chemicals 465.0 486.7
Corporate 26.4 36.0
Total $ 1,880.3 $ 1,886.8
Goodwill:
Railroad and Utility Products and Services $ 156.5 $ 156.4
Performance Chemicals 172.9 173.0
Total $ 329.4 $ 329.4
8. Income Taxes
Effective Tax Rate – The income tax provision for interim periods is comprised of an estimated annual effective income tax rate applied to current year ordinary income and tax associated with discrete items. These discrete items generally relate to excess stock compensation deductions, changes in tax laws, adjustments to unrecognized tax benefits and changes of estimated tax liability to the actual liability determined upon filing income tax returns. To determine the annual effective tax rate, management is required to make estimates of annual pretax income in each domestic and foreign jurisdiction in which we conduct business. Entities that have historical pre-tax losses and current year estimated pre-tax losses that are not projected to generate a future benefit are excluded from the estimated annual effective income tax rate.
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The estimated annual effective income tax rate differs from the U.S. federal statutory tax rate due to:
March 31,
2026 2025
Federal income tax rate 21.0 % 21.0 %
Foreign earnings taxed at different rates 3.3 4.5
State income taxes, net of federal tax benefit 2.3 2.5
Nondeductible expenses 1.1 2.2
Change in tax contingency reserves 0.2 0.3
U.S. tax on international operations, net of credits ( 0.2 ) 0.2
Estimated annual effective income tax rate 27.7 % 30.7 %
Income taxes as a percentage of pretax income were 10.1 percent and 19.2 percent for the three months ended March 31, 2026 and 2025, respectively. The effective income tax rate for the three months ended March 31, 2026 was lower than the 2026 estimated annual effective income tax rate due to the liquidation of our former coal tar distillation facility located in China. This one-time non-cash gain did not have any associated income tax expense. The effective income tax rate for the three months ended March 31, 2025 was lower than the 2025 estimated annual effective income tax rate due to the loss on pension settlement which was treated as a discrete item in the first quarter tax provision.
During the year, management regularly updates estimates of pre-tax income and income tax expense based on changes in pre-tax income projections by taxable jurisdiction, repatriation of foreign earnings, unrecognized tax benefits and other tax matters. To the extent that actual results vary from these estimates, the actual annual effective income tax rate at the end of the year could be materially different from the estimated annual effective income tax rate as of the three months ended March 31, 2026.
Effective January 1, 2024, certain jurisdictions in which we operate have enacted legislation that is consistent with one or more Organization for Economic Co-operation and Development Global Anti-Base Erosion Model Rules (commonly referred to as "Pillar Two"). These Pillar Two rules include minimum domestic top up taxes, income inclusion rules and undertaxed profit rules all aimed to ensure that multinational business corporations pay a minimum effective corporate tax rate of 15 percent in each jurisdiction in which they operate. We have analyzed our tax profile by jurisdiction and do not expect to incur top up taxes in 2026.
Unrecognized Tax Benefits – We file income tax returns in the U.S. federal jurisdiction, individual U.S. state jurisdictions and non-U.S. jurisdictions. With few exceptions, we are no longer subject to U.S. federal, U.S. state, or non-U.S. income tax examinations by tax authorities for years prior to 2020.
As of March 31, 2026 and December 31, 2025, unrecognized tax benefits of $ 1.1 million for both periods would affect the effective tax rate if recognized. We do not anticipate material changes to the amount of unrecognized tax benefits within the next twelve months.
9. Inventories
March 31, 2026 December 31, 2025
(Dollars in millions)
Raw materials $ 332.7 $ 351.6
Work in process 15.9 17.3
Finished goods 150.8 147.0
Total $ 499.4 $ 515.9
Less revaluation to LIFO 103.5 104.7
Inventories, net $ 395.9 $ 411.2
10. Pensions and Post-Retirement Benefit Plans
We maintain defined benefit and defined contribution plans to provide retirement benefits for employees in the United States, as well as employees outside the United States.
During 2024, we initiated a plan to terminate our largest United States qualified pension plan. In 2025, we completed the irrevocable transfer of $ 84.5 million of pension liabilities and an equal amount of pension assets to an insurance company. In order to achieve this transfer, additional cash funding of approximately $ 12 million was required in 2025. In the first quarter of 2025, we recorded a settlement loss of approximately $ 29.0 million, before tax.
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In connection with the planned termination of our defined benefit pension plan in the United Kingdom, in 2021, we entered into a buy-in bulk annuity insurance policy in exchange for a premium payment of $ 67.8 million, which is subject to adjustment as a result of subsequent data cleansing activities. Under the terms of this buy-in insurance policy, the insurer is liable to pay the benefits of the plan, but the plan still retains full legal responsibility to pay the benefits to members using the insurance payments. The buy-in policy will be treated as a plan asset going forward until such time as the buy-in policy is converted to a buy-out policy, which is when individual insurance policies will be assigned to each member of the plan and the plan will no longer have legal responsibility to pay the benefits to the members. The data cleansing effort has been substantially completed and we expect to recognize a pre-tax pension settlement loss of approximately $ 20 million upon the pension obligation becoming irrevocably settled, the timing of which is uncertain. The timing of the conversion to a buy-out policy and related recognition of the estimated pension settlement loss has been impacted by a ruling from the High Court of Justice in the United Kingdom in the case of Virgin Media Limited v NTL Pension Trustees II Limited and Others (the "Virgin Media Case") related to certain amendments to UK pension plans. In April 2026, the UK government approved legislation to address industry wide issues resulting from the Virgin Media Case. This legislation will enable us to proceed with the conversion to a buy-out policy.
The following table provides the components of net periodic benefit cost for the pension plans:
Three Months Ended
March 31,
2026 2025
(Dollars in millions)
Service cost $ 0.1 $ 0.3
Interest cost 0.6 1.2
Expected return on plan assets ( 0.5 ) ( 0.8 )
Amortization of net loss 0.2 0.4
Settlement 0.0 29.0
Net periodic benefit cost $ 0.4 $ 30.1
Defined contribution plan expense $ 2.9 $ 3.3
11. Debt
Weighted Average Interest Rate Maturity March 31, 2026 December 31, 2025
(Dollars in millions)
Credit Facility 5.58 % 2030 $ 449.3 $ 448.0
Term Loan B 6.17 % 2030 479.5 480.3
Total debt $ 928.8 $ 928.3
Less current maturities of long-term debt 4.9 4.9
Less unamortized debt issuance costs 8.6 9.1
Long-term debt $ 915.3 $ 914.3
Credit Facility – We have a credit agreement (the Credit Facility) with a consortium of banks. The Credit Facility provides for 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. The interest rate on the Credit Facility is variable and may be based on the SOFR, which is the applicable benchmark for current borrowings, or an alternative benchmark depending on the borrowing type.
Borrowings under the Credit Facility are secured by a first priority lien on substantially all of the assets (excluding real property and other customary assets) of Koppers Inc., Koppers Holdings Inc. and our material domestic subsidiaries. The Credit Facility contains certain covenants that may limit Koppers Inc. and its restricted subsidiaries from taking certain actions. These limitations include, among others, restrictions on additional indebtedness, liens, dividends, investments, acquisitions, certain distributions, asset sales, transactions with affiliates and modifications to material documents, including organizational documents. In addition, such covenants may give rise to events of default upon the failure by Koppers Inc. and its restricted subsidiaries to meet certain financial ratios.
As of March 31, 2026, we had $ 343.5 million of unused revolving credit availability after restrictions from certain letter of credit commitments and other covenants. As of March 31, 2026, $ 7.2 million of commitments were utilized by outstanding letters of credit.
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Term Loan B – In April 2023, we issued a class of senior secured term loans under the Credit Facility (the Term Loan B) which was upsized in April 2024, resulting in $ 488.0 million of aggregate net proceeds, before debt financing costs. The interest rate on the Term Loan B is variable and is based on, at our option, adjusted Term SOFR Rate or adjusted Daily Simple SOFR. The interest rate margins applicable to adjusted Term SOFR Rate or adjusted Daily Simple SOFR loans are 2.50 percent with a floor of 0.50 percent. The principal balance of the Term Loan B is repayable in quarterly installments on the last business day of each quarterly period in an amount equal to 0.25 percent of the principal amount, with the balance due at maturity on April 10, 2030.
Interest Rate Swaps – See Note 4 – Derivative Financial Instruments for discussion of the interest rate swap agreements, which effectively convert the variable rate to a fixed rate for a portion of our variable rate debt.
12. Commitments and Contingent Liabilities
We are involved in litigation and various proceedings relating to environmental laws and regulations, product liability and other matters. Certain of these matters are discussed below. The ultimate resolution of these contingencies is subject to significant uncertainty and should we fail to prevail in any of these legal matters or should several of these legal matters be resolved against us in the same reporting period, these legal matters could, individually or in the aggregate, be material to the condensed consolidated financial statements.
Environmental and Other Litigation Matters
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 including, among other things, the cleanup of contaminated sites, the treatment, storage and disposal of wastes, the discharge of effluent into waterways, the emission of substances into the air and various health and safety matters. We expect to incur substantial costs for ongoing compliance with such laws and regulations. We may also face governmental or third-party claims, or otherwise incur costs, relating to cleanup of, or for injuries resulting from, contamination at sites associated with past and present operations. We accrue for environmental liabilities when a determination can be made that a liability is probable and reasonably estimable.
Environmental and Other Liabilities Retained or Assumed by Others. We have agreements with former owners of certain of our operating locations under which the former owners retained, assumed and/or agreed to indemnify us against certain environmental and other liabilities. The most significant of these agreements was entered into at Koppers Inc.’s formation on December 29, 1988 (the Acquisition). Under the related asset purchase agreement between Koppers Inc. and Beazer East, subject to certain limitations, Beazer East retained the responsibility for and agreed to indemnify Koppers Inc. against certain liabilities, damages, losses and costs, including, with certain limited exceptions, liabilities under and costs to comply with environmental laws to the extent attributable to acts or omissions occurring prior to the Acquisition and liabilities related to products sold by Beazer East prior to the Acquisition (the Indemnity). Beazer Limited, the parent company of Beazer East, unconditionally guaranteed Beazer East’s performance of the Indemnity pursuant to a guarantee.
The Indemnity provides different mechanisms, subject to certain limitations, by which Beazer East is obligated to indemnify Koppers Inc. with regard to certain environmental, product and other liabilities and imposes certain conditions on Koppers Inc. before receiving such indemnification, including, in some cases, certain limitations regarding the time period as to which claims for indemnification can be brought. In July 2004, Koppers Inc. and Beazer East agreed to amend the environmental indemnification provisions of the December 29, 1988 asset purchase agreement to extend the indemnification period for pre-closing environmental liabilities, subject to the following paragraph, and agreed to share toxic tort litigation defense arising from any sites acquired from Beazer East.
Qualified expenditures under the Indemnity are not subject to a monetary limit. Qualified expenditures under the Indemnity include (i) environmental cleanup liabilities required by third parties, such as investigation, remediation and closure costs, relating to pre-December 29, 1988 (Pre-Closing) acts or omissions of Beazer East or its predecessors; (ii) environmental claims by third parties for personal injuries, property damages and natural resources damages relating to Pre-Closing acts or omissions of Beazer East or its predecessors; (iii) punitive damages for the acts or omissions of Beazer East and its predecessors without regard to the date of the alleged conduct and (iv) product liability claims for products sold by Beazer East or its predecessors without regard to the date of the alleged conduct. The indemnification period ended July 14, 2019 (the Claim Deadline), and Beazer East may now tender certain third-party claims described in sections (i) and (ii) above to Koppers Inc. However, to the extent the third-party claims described in sections (i) and (ii) above were tendered to Beazer East by the Claim Deadline, Beazer East will continue to be required to pay the costs arising from such claims under the Indemnity. Furthermore, the Claim Deadline did not change the provisions of the Indemnity with respect to indemnification for non-environmental claims, such as product liability claims, which claims may continue to be tendered by Koppers Inc. to Beazer East.
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The Indemnity provides for the resolution of issues between Koppers Inc. and Beazer East by an arbitrator on an expedited basis upon the request of either party. The arbitrator could be asked, among other things, to make a determination regarding the allocation of environmental responsibilities between Koppers Inc. and Beazer East. Arbitration decisions under the Indemnity are final and binding on the parties.
Contamination has been identified at most manufacturing and other sites of our subsidiaries. One site currently owned and operated by Koppers Inc. in the United States is listed on the National Priorities List promulgated under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (CERCLA). Currently, at the properties acquired from Beazer East, which includes the National Priorities List site and all but one of which are permitted under the Resource Conservation and Recovery Act (RCRA), a significant portion of all investigative, cleanup and closure activities are being conducted and paid for by Beazer East pursuant to the terms of the Indemnity. In addition, other of Koppers Inc.’s sites are or have been operated under RCRA and various other environmental permits, and remedial and closure activities are being conducted at some of these sites.
To date, the parties that retained, assumed and/or agreed to indemnify us against the liabilities referred to above, including Beazer East, have performed their obligations in all material respects. Periodically, issues have arisen between Koppers Inc. and Beazer East and/or other indemnitors that have been resolved without arbitration. Koppers Inc. and Beazer East engage in discussions from time to time that involve, among other things, the allocation of environmental costs related to certain operating and closed facilities.
If for any reason (including disputed coverage or financial incapability) one or more of such parties fail to perform their obligations and we are held liable for or otherwise required to pay all or part of such liabilities without reimbursement, the imposition of such liabilities on us could have a material adverse effect on our business, financial condition, cash flows and results of operations. Furthermore, we could be required to record a contingent liability on our balance sheet with respect to such matters, which could result in a negative impact to our business, financial condition, cash flows and results of operations.
Domestic Environmental Matters. Koppers Inc. has been named as one of the potentially responsible parties (PRPs) at the Portland Harbor CERCLA site located on the Willamette River in Oregon. Koppers Inc. operated a coal tar pitch terminal near the site. Koppers Inc. has responded to a US Environmental Protection Agency (the EPA) information request and has executed a PRP agreement which outlines a private process to develop an allocation of past and future costs among more than 80 parties to the site. Koppers Inc. believes it is a de minimis contributor at the site.
The EPA issued its Record of Decision (ROD) in January 2017 for the Portland Harbor CERCLA site. The selected remedy includes a combination of sediment removal, capping, enhanced and monitored natural recovery and riverbank improvements. The ROD does not determine who is responsible for remediation costs. At that time, the net present value and undiscounted costs of the selected remedy as estimated in the ROD were approximately $ 1.1 billion and $ 1.7 billion, respectively. These costs will likely increase given the remedy has not and will not be implemented for several years. Responsibility for implementing and funding that work will be decided in the separate private allocation process which is ongoing and is expected to provide further clarification with respect to liability allocation in 2026. In November 2024, Koppers Inc. received a Special Notice Letter (SNL) from the EPA. The SNL was formally issued to approximately 60 parties and initiates negotiations between PRPs and the EPA for implementation of the ROD. In May 2025, Koppers Inc. submitted a response to the SNL to the EPA.
Additionally, Koppers Inc. is involved in two separate matters involving natural resource damages at the Portland Harbor site. One matter involves claims by the trustees to recover damages based upon an assessment of damages to natural resources caused by the releases of hazardous substances to the Willamette River. The assessment serves as the foundation to estimate liabilities for settlements of natural resource damages claims or litigation to recover from those who do not settle with the trustee groups. Koppers Inc. has agreed to resolve its natural resource damage liabilities for the assessment area pursuant to a consent decree lodged with the United States District Court for the District of Oregon in November 2023. The consent decree was approved by the District Court in October 2025, and one party has appealed that decision to the United States Court of Appeals for the Ninth Circuit. A second matter involves a lawsuit filed in January 2017 by the Yakama Nation in the United States District Court for the District of Oregon. Yakama Nation seeks recovery for response costs and the costs of assessing injury to natural resources to waterways beyond the current assessment area. Following the most recent court rulings, the Yakama Nation case has been stayed pending completion of the private allocation process for the Portland Harbor CERCLA site.
In September 2009, Koppers Inc. received a general notice letter from the EPA notifying it that it may be a PRP at the Newark Bay CERCLA site. Koppers Inc. operated a wood treating facility near the site in Newark, New Jersey. In January 2010, Koppers Inc. submitted a response to the general notice letter asserting that Koppers Inc. is a de minimis party at this site.
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We have accrued the estimated costs of participating in the PRP groups at the Portland Harbor and Newark Bay CERCLA sites and estimated de minimis contributor settlement amounts at the sites totaling $ 3.7 million as of March 31, 2026. The actual cost could be materially higher as there has not been a determination of how those costs will be allocated among the PRPs at the sites. Accordingly, an unfavorable resolution of these matters may have a material adverse effect on our business, financial condition, cash flows and results of operations.
There are two plant sites related to the PC business and one plant site related to the Utility and Industrial Products business in our RUPS segment in the United States where we have recorded environmental remediation liabilities for soil and groundwater contamination which occurred prior to our acquisition of the businesses. As of March 31, 2026, our estimated environmental remediation liability for these acquired sites totals $ 3.6 million.
In June 2024, Koppers Inc. received a letter stating that the Illinois Attorney General’s Office (IL AGO) received an enforcement referral from the Illinois Environmental Protection Agency relating to certain alleged air emissions violations at our Stickney, IL facility. We are cooperating with IL AGO in connection with this matter.
We have not provided a reserve for the Stickney, IL enforcement matter because, at this time, we cannot reasonably determine the probability of a loss, and the amount of loss, if any, cannot be reasonably estimated. The timing of a resolution to this matter cannot be reasonably determined. Although Koppers Inc. is vigorously defending this matter, an unfavorable resolution of this matter may have a material adverse effect on our business, financial condition, cash flows and results of operations.
Foreign Environmental Matters. There is one plant site related to the PC business located in Australia where we have recorded an environmental remediation liability for soil and groundwater contamination which occurred prior to the acquisition of the business. As of March 31, 2026, our estimated environmental remediation liability for the acquired site totals $ 1.2 million.
Environmental Reserves Rollforward. The following table reflects changes in the accrual for environmental remediation. As of March 31, 2026 and December 31, 2025, $ 1.6 million and $ 1.8 million, respectively, were classified as current liabilities .
Period ended
March 31, 2026 December 31, 2025
(Dollars in millions)
Balance at beginning of period $ 10.2 $ 10.3
Expense 0.0 0.5
Cash expenditures ( 0.1 ) ( 0.4 )
Revision of reserves ( 0.1 ) ( 0.3 )
Currency translation 0.0 0.1
Balance at end of period $ 10.0 $ 10.2
13. Subsequent Events
On May 8, 2026, we announced that we have made a conditional decision to discontinue distillation and chemical manufacturing operations at our facility in Stickney, Illinois, subject to the satisfaction of any bargaining obligations that might exist with the union that represents certain employees at that facility. The conditional decision, which is pending negotiations and consultation with the union, was driven by challenging market conditions over the past decade, including unit operating costs outpacing our ability to capture higher pricing, reduced raw material supply from North American steel manufacturers and increased capital requirements. We anticipate winding down the remaining distillation and chemical production activities by December 31, 2026, pending discussions with the union. We are tentatively targeting fourth quarter 2026 for shifting production to our coal tar distillation facility located in Nyborg, Denmark. As part of this conditional decision, we continue to evaluate potentially appropriate uses for the Stickney facility following the end of production activities.
We expect this action to result in pre-tax charges to earnings of $ 227 million to $ 262 million through the end of 2029, $ 170 million to $ 195 million of which constitutes non-cash charges and approximately $ 57 million to $ 67 million of which constitutes cash expenditures. Estimates of the total pre-tax amount for each major type of cost associated with the discontinuation plan are: (i) retention and severance costs of approximately $ 5 million (including both for salaried and union employees, and pending negotiations and consultation with the union), (ii) accelerated depreciation and asset write-down costs of approximately $ 170 million to $ 195 million, and (iii) plant cleaning, waste disposal and demolition costs of approximately $ 52 million to $ 62 million.
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.