What changed in this filing

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Item 1. Business

2022-02-23 compared with 2021-02-24 · 41 added, 39 removed, 201 unchanged (28% of the section changed)

23 unchanged sentences

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 and other related railroad products.

The majority of the creosote we produce in North America and Europe is sold internally to our RUPS business for treating railroad crossties.

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.

2 unchanged sentences

Railroad and Utility Products and Services

Our RUPS business sells treated and untreated wood products, rail joint bars and services primarily to the railroad markets in the United States and Canada and the utility markets in the United States and Australia.

Our RUPS business sells treated and untreated wood products, rail joint bars and services primarily to the railroad markets in the United States and Canada and treated wood products and services to the utility markets in the United States and Australia.

We also operate a railroad services business that conducts engineering, design, repair and inspection services for railroad bridges and a business related to the recovery of used crossties, serving the same customer base as our North American railroad business.

The primary end-markets for RUPS are the North American railroad industry, which has an installed base of approximately 450 million wood crossties, and the U.S.

and Australian utility industries which utilizes wooden distribution and transmission poles.

Both crossties and utility poles require periodic replacement.

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.

2 unchanged sentences

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 supplies to enable us to access raw materials and service customers effectively.

Our network of plants is strategically located near timber suppliers to enable us to access raw materials and service customers effectively.

In addition, our crosstie treating plants are typically adjacent to our largest railroad customers’ rail lines.

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.

Hardwoods, such as oak and other species, are the major raw materials in wood crossties.

Hardwood prices, which account for more than 50 percent of a finished crosstie’s cost, fluctuate with the demand from other hardwood lumber markets, such as oak flooring, pallets and other specialty lumber products.

Weather conditions can be a factor in the supply of raw material, as unusually wet or inclement conditions may make it difficult to harvest timber.

Koppers Holdings Inc.

2021 Annual Report

Hardwoods, such as oak and other species, are the major raw materials in wood crossties.

Hardwood prices, which account for approximately 70 percent of a finished crosstie’s cost, fluctuate with the demand from other hardwood lumber markets, such as oak flooring, pallets and other specialty lumber products.

Weather conditions can be a factor in the supply of raw material, as unusually wet or inclement conditions may make it difficult to harvest timber.

In the United States, hardwood lumber for crossties is procured by us from hundreds of small sawmills throughout the northeastern, midwestern and southern areas of the country.

12 unchanged sentences

This also forms the customer base for our rail joint bar products.

The railroad crosstie market trended lower in 2020, with approximately 18.7 million replacement crossties purchased during the year, up from 18.5 million and down from 21.2 million purchased during 2019 and 2018, respectively.

Demand for railroad crossties may decline during winter months due to inclement weather conditions which make it difficult to harvest lumber and to install railroad crossties.

As a result, operating results may vary from quarter to quarter depending on the severity of weather conditions and other variables affecting our products.

The railroad crosstie market trended higher in 2021, with approximately 18.8 million replacement crossties purchased during the year, up from 18.7 million and 18.5 million purchased during 2020 and 2019, respectively.

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.

2 unchanged sentences

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 chromated copper arsenate and creosote, which we produce internally and purchase from PC and CMC, respectively, and pentachlorophenol, which we purchase from an outside supplier.

It is expected that the only North American manufacturer of pentachlorophenol will permanently cease production by the end of 2021.

Accordingly, it is expected that utility pole treaters who utilize pentachlorophenol will convert to another accepted treatment preservative over the next 10 months.

We treat poles with a variety of preservatives, including chromated copper arsenate and creosote, which we produce internally and purchase from PC and CMC.

We also operate a business related to the recovery of used utility poles and a business related to the inspection of utility poles.

Performance Chemicals

Our PC business maintains sales and manufacturing capabilities in the United States, Canada, Europe, South America, Australia and New Zealand.

We believe we have the number one market share in North America, Australia and New Zealand.

Our North American sales represent approximately 70 percent of PC’s total revenue.

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 and chromated copper arsenate.

2 unchanged sentences

Because we are a global supplier of wood preservatives, we face various competitors in all the geographic regions in which we participate.

PC supplies six of the ten largest lumber treating companies in the United States, the largest treated wood market in the world, in addition to the two largest lumber treating companies in Canada.

PC supplies eight 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.

1 unchanged sentence

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.

We utilize swap contracts to hedge our exposure to copper price risk.

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 continuous supply of wood preservatives.

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.

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.

5 unchanged sentences

In 2014, we embarked on a plan to restructure our CMC operating footprint that reduced our global number of coal tar distillation facilities from the 11 that existed as of January 1, 2014 to three in total as of December 31, 2021.

In September 2020, we sold our remaining Chinese distillation facility in operation, Koppers (Jiangsu) Carbon Chemical Company Limited (“KJCC”) located in Pizhou, Jiangsu Province as discussed in “Note 4 – Plant Closures and Discontinued Operations” .

Our CMC business has experienced challenges over the past several years due to the closure of aluminum smelters that has occurred in North America, Western Europe and Australia.

4 unchanged sentences

carbon pitch, a critical raw material used in the production of aluminum and steel;

naphthalene, used as a feedstock in the production of phthalic anhydride and as a surfactant in the production of concrete, and

naphthalene, used as a feedstock in the production of phthalic anhydride and as a surfactant in the production of concrete;

phthalic anhydride, used in the production of plasticizers, polyester resins and alkyd paints, respectively.

44 unchanged sentences

Approximately 424 of our employees are represented by a number of different labor unions and are covered under numerous labor agreements.

The labor contracts at two of our facilities covering approximately 236 employees are scheduled to expire during 2021.

The labor contracts at three of our facilities covering approximately 132 employees are scheduled to expire during 2022.

Human Capital Management

4 unchanged sentences

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.

Our decision-making considers the impact our actions may have on our employees and for each action we take, protecting employee health and well-being is our priority.

To accomplish all this, and to better reflect the importance of our employees, we recently transformed our human resources function into a Culture and Engagement team to enhance the employee experience.

This transformation is a reflection of how we approach our corporate culture, and how we engage with and support our employees both at work and in other aspects of their lives.

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 as well.

Our talented employees are a critical element to make our business successful, so it is essential that we position them for success.

It is also important that we continue attracting top talent to our workforce.

Our Culture and Engagement team leads these efforts to attract, retain and develop our employees and has created various programs to enhance the skill set of our workforce.

Recognizing the importance of a consistent and comprehensive onboarding and safety training experience for new hires across our facility footprint, we have implemented a web-based training program to ensure every employee receives a consistent message from the start of their employment.

The new program includes two videos detailing the Company and its primary business lines as well as a new hire folder filled with information on employee programs, services, benefits and more.

We have also implemented a toolkit to help managers guide new employees for success and we have begun to conduct regular new hire surveys to solicit feedback and identify opportunities for improvement.

Recognizing the importance of a consistent and comprehensive onboarding and safety training experience for new hires across our facility footprint, we have a web-based training program to ensure every employee receives a consistent message from the start of their employment.

The program includes videos detailing our company and our primary business lines as well as a new hire folder filled with information on employee programs, services, benefits and more.

We also have a toolkit to help managers guide new employees for success and we conduct regular new hire surveys to solicit feedback and identify opportunities for improvement.

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.

5 unchanged sentences

These monthly meetings also help managers gauge employee engagement and develop approaches to increase and sustain positive engagement.

We have also implemented a New Hire Mentoring Program as another component of our development process.

We also have a New Hire Mentoring Program as another component of our development process.

The program provides both hourly and salaried employees an extra opportunity to receive support from experienced employees and discuss any ideas they may have for improving our operations or their work experience.

Prior to participating, mentors and mentees receive training on getting the most out of the program and surveys are conducted throughout to measure success.

Prior to participating, mentors and mentees receive training on getting the most out of the program.

Training and Education

As a part of our people-focused approach to our operations, we are committed to helping our employees thrive in their roles and grow both personally and professionally.

A major component of this prerogative is our commitment to providing each employee with the training and education they need to be successful.

We 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.

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.

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.

4 unchanged sentences

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.

Our Director for Global Inclusion and Diversity focuses on supporting our strategy to be an employer of choice, chairs the company's Inclusion and Diversity Committee, and helps to ensure that all employees feel they are heard and valued to harness the power of an engaged workforce.

Our Director for Global Inclusion and Diversity 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

4 unchanged sentences

The program gives our employees the opportunity to buy shares at a discount through payroll deductions during defined quarterly offering periods.

Koppers Holdings Inc.

2020 Annual Report

Health and Safety

4 unchanged sentences

For our U.S.-based employees, we also offer four weeks of paid time-off for mothers and fathers who have a birth or adoption as part of our parental bonding leave program.

Additionally, we offer flexible work schedules around core hours.

Additionally, we offer work schedule flexibility including the opportunity to work remotely when conditions allow.

Koppers Holdings Inc.

2021 Annual Report

We work with a Zero Harm approach to every employee’s health and safety.

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.

Environmental, Social and Governance Matters

7 unchanged sentences

Our Sustainability Steering Committee provides guidance on goals and programs designed to improve our performance against those expectations.

Toward this goal and starting in 2019, we began work on a materiality analysis, both internal and external, that highlighted the areas where we can most effectively address the needs of our stakeholders.

Toward this goal in 2019, we conducted a materiality analysis, both internal and external, that highlighted the areas where we can most effectively address the needs of our stakeholders.

Environmental

The circular nature of our business starts with our raw materials, the majority volume of which are by-products generated by other industries (including scrap copper and coal tar) and renewable resources (trees).

We purchase approximately 33 million pounds of scrap copper which is postconsumer or post-industrial in nature.

The circular nature of our business starts with our raw materials, the majority of which are by-products generated by other industries (including scrap copper and coal tar) and renewable resources (trees).

We purchase approximately 32 million pounds of scrap copper per year which is postconsumer or post-industrial in nature.

We believe this places Koppers in the center of what is known as the “circular economy” that emphasizes the “reduce, reuse, recycle” mentality that continues to frame global conservation efforts.

Our wood-treatment solutions, while supporting an important role in our global infrastructure across multiple industries, also support an important role in the carbon cycle.

Treating wood significantly increases its useful lifespan, allowing the carbon stored within the wood to be immobilized for up to 50 years, keeping it out of the atmosphere and limiting carbon’s impact on the environment.

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 and utility poles by repurposing used wood products, including as a fuel source.

10 unchanged sentences

Our Culture and Engagement team ensures that a diverse slate of candidates is considered for open positions.

Our first employee resource group, LINKWomen, which was launched in 2018, provides an important development forum for employees and serves as a model for future initiatives.

Our employee resource groups, LINKWomen, which was launched in 2018, and LINKParents, which was launched in 2021, provide an important development forum for employees and serve as a model for future initiatives.

Additionally, the composition of our board of directors has been recognized for gender and racial diversity.

16 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business