What changed in this filing

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Item 1. Financial Statements

2022-08-04 compared with 2022-05-06 · 159 added, 117 removed, 585 unchanged (32% of the section changed)

1 unchanged sentence

KOPPERS HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME

Three Months Ended March 31,

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

Three Months Ended June 30,

Six Months Ended June 30,

(Dollars in millions, except per share amounts)

10 unchanged sentences

Income from continuing operations

Loss on sale of discontinued operations, net of tax benefit of $ 0.0 and $ 0.1

(Gain) loss on sale of discontinued operations, net of tax

(expense) benefit of $ 0.0 , $ 0.1 , $( 0.2 ) and $ 0.1

Net loss attributable to noncontrolling interests

8 unchanged sentences

Earnings per diluted common share

Comprehensive income

Comprehensive (loss) income

Comprehensive loss attributable to noncontrolling interests

Comprehensive income attributable to Koppers

Comprehensive (loss) income attributable to Koppers

Weighted average shares outstanding (in thousands):

41 unchanged sentences

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(Dollars in millions)

14 unchanged sentences

Other working capital

Net cash used in operating activities

Net cash provided by operating activities

Cash (used in) provided by investing activities:

12 unchanged sentences

Effect of exchange rate changes on cash

Net increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

19 unchanged sentences

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 for the year ended December 31, 2021.

COVID-19 Assessment

In March 2020, the World Health Organization categorized the coronavirus disease (“COVID-19”) as a pandemic.

COVID-19 continues to impact the United States and other countries across the world.

There remains a level of uncertainty over the economic and operational impacts of COVID-19, and as a result the related future financial impact cannot be reasonably estimated at this time.

Our consolidated financial statements presented in this report reflect certain estimates and assumptions made by management that affect the reported amounts of assets and liabilities and disclosure of such assets and liabilities at the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting periods presented.

Such estimates and assumptions affect, among other things, our goodwill, long-lived asset and intangible asset valuation;

inventory valuation;

assessment of the annual effective tax rate;

valuation of deferred income taxes;

the allowance for doubtful accounts;

and measurement of cash incentive plans.

Events and changes in circumstances arising after March 31, 2022, including those resulting from the impacts of COVID-19, will be reflected in management’s estimates for future periods.

New Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No.

Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting.

This update provides temporary optional expedients and exceptions to U.S.

GAAP on contract modifications, hedging relationships, and other transactions affected by reference rate reform to ease entities' financial reporting burdens as the market transitions from the London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates.

The guidance was effective upon issuance and may be applied prospectively to contract modifications made, hedging relationships entered into, and other transactions affected by reference rate reform, evaluated on or before December 31, 2022, beginning during the reporting period in which the guidance has been elected.

Our debt agreements include the use of alternate rates when LIBOR is not available and we do not maintain hedging relationships applicable to this ASU.

We do not expect the application of this update to have a material impact on our financial statements and, to the extent we enter into modifications of agreements that are impacted by the LIBOR phase-out, we will apply such guidance to those contract modifications.

In March 2022, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2022-01, “Derivatives and Hedging (Topic 815):

Fair Value Hedging—Portfolio Layer Method.” This ASU amends and simplifies existing guidance in order to allow companies to more accurately present the economic effects of risk management activities in financial statements.

2022-01 is effective for periods beginning after December 15, 2022, and earlier adoption is permitted.

We are currently in the process of reviewing the effect of this ASU on our financial statements.

Plant Closures and Divestitures

16 unchanged sentences

KJCC was located in Pizhou, Jiangsu Province, China and was a 75 percent-owned coal tar distillation company which was part of our CMC segment.

Restricted cash of $ 2.3 million is being held in an escrow account and is recorded within cash and cash equivalents as of March 31, 2022 to cover potential customary indemnity claims by the Buyers.

Restricted cash of $ 2.3 million is being held in an escrow account and is recorded within cash and cash equivalents as of June 30, 2022 to cover potential customary indemnity claims by the Buyers.

On December 23, 2021 and March 31, 2022, the Buyers issued various claims, which after negotiation were settled in April 2022 for $ 0.9 million, of which our share is $ 0.7 million.

After reduction for the settlement, we expect the escrow amount will be fully released by the end of the second quarter.

After reduction for the settlement, we expect the escrow amount will be fully released by the end of the third quarter.

The sale of KJCC represented a strategic shift that had a major effect on our operations and accordingly is classified as discontinued operations in our condensed consolidated financial statements and notes.

In addition, we ceased carbon black production at our CMC facility located in Kurnell, Australia during 2011.

This entity is also reflected as a discontinued operation in our condensed consolidated financial statements and notes.

Fair Value Measurements

Carrying amounts and the related estimated fair values of our financial instruments as of March 31, 2022 and December 31, 2021 are as follows:

March 31, 2022

Carrying amounts and the related estimated fair values of our financial instruments as of June 30, 2022 and December 31, 2021 are as follows:

June 30, 2022

December 31, 2021

8 unchanged sentences

The fair value of our Credit Facility approximates carrying value due to the variable rate nature of this instrument.

Comprehensive Income and Equity

Total comprehensive income for the three months ended March 31 , 2022 and 2021 is summarized in the table below:

Three Months Ended March 31,

Comprehensive (Loss) Income and Equity

Total comprehensive (loss) income for the three and six months ended June 30 , 2022 and 2021 is summarized in the table below:

Three Months Ended June 30,

Six Months Ended June 30,

(Dollars in millions)

Changes in other comprehensive income:

Changes in other comprehensive (loss) income:

Currency translation adjustment

Unrealized (loss) gain on cash flow hedges, net

of tax benefit (expense) of $ 2.1 and $( 4.5 )

Unrealized (loss) gain on cash flow hedges,

net of tax benefit (expense) of

$ 12.6 , $( 0.1 ), $ 15.0 and $( 4.6 )

Unrecognized pension net loss, net of tax

expense of $ 0.0 , $ 0.1 , $ 0.1 and $ 0.2

Total comprehensive income

Comprehensive loss attributable to noncontrolling interests

Comprehensive income attributable to Koppers

Total comprehensive (loss) income

Comprehensive loss attributable to

noncontrolling interests

Comprehensive (loss) income attributable to Koppers

Amounts reclassified from accumulated other comprehensive loss to net income consist of amounts shown for changes in or amortization of unrecognized pension net loss.

This component of accumulated other comprehensive loss is included in the computation of net periodic pension cost as disclosed in Note 13 – “Pensions and Post-Retirement Benefit Plans.” Other amounts reclassified from accumulated other comprehensive loss related to derivative financial instruments, net of tax, of $ 10.1 million for the three months ended March 31, 2022, and $ 7.2 million for the three months ended March 31, 2021.

The following tables present the change in equity for the three months ended March 31, 2022 and 2021, respectively:

This component of accumulated other comprehensive loss is included in the computation of net periodic pension cost as disclosed in Note 13 – “Pensions and Post-Retirement Benefit Plans.” Other amounts reclassified from accumulated other comprehensive loss related to derivative financial instruments of $ 11.1 million and $ 21.2 million for the three and six months ended June 30, 2022, respectively, and $ 12.7 million and $ 19.9 million for the three and six months ended June 30, 2021, respectively.

The amounts in the preceding sentence are net of tax.

The following tables present the change in equity for the three months ended June 30, 2022 and 2021, respectively:

(Dollars in millions)

4 unchanged sentences

Noncontrolling

Balance at December 31,

Balance at March 31, 2022

Issuance of common stock

2 unchanged sentences

Other comprehensive

income (loss)

(loss) income

Currency translation

1 unchanged sentence

Unrecognized pension

Balance at June 30, 2022

(Dollars in millions)

Additional Paid-In Capital

Retained Earnings

Accumulated Other Comprehensive Loss

Treasury Stock

Noncontrolling

Balance at March 31,

Issuance of common stock

Repurchases of common

Employee stock plans

Other comprehensive

(loss) income

Currency translation

Cumulative translation

adjustment loss on

sale of subsidiary

Unrealized gain on

cash flow hedges

Unrecognized pension

Balance at June 30,

The following tables present the change in equity for the six months ended June 30, 2022 and 2021, respectively:

(Dollars in millions)

12 unchanged sentences

Currency translation

Unrealized loss on

cash flow hedges

Unrecognized pension

Balance at June 30, 2022

(Dollars in millions)

Additional Paid-In Capital

Retained Earnings

Accumulated Other Comprehensive Loss

Treasury Stock

Noncontrolling

Balance at December 31,

Issuance of common stock

Employee stock plans

Other comprehensive

(loss) income

Currency translation

Cumulative translation

adjustment loss on

sale of subsidiary

Unrealized gain on

1 unchanged sentence

Unrecognized pension

Balance at March 31,

For the three months ended March 31, 2022, we declared dividends totaling $ 0.05 per common share.

On May 5, 2022 , we declared a quarterly dividend of $ 0.05 per common share, payable on June 13, 2022 to shareholders of record as of May 27, 2022 .

Repurchases of common

Balance at June 30,

On August 4, 2022 , we declared a quarterly dividend of $ 0.05 per common share, payable on September 12, 2022 to shareholders of record as of August 26, 2022 .

Earnings per Common Share

3 unchanged sentences

The following table sets forth the computation of basic and diluted earnings per common share:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(Dollars in millions, except share amounts, in thousands)

Net income attributable to Koppers

Loss on sale of discontinued operations, net of

tax benefit of $ 0.0 and $ 0.1

(Gain) loss on sale of discontinued operations,

net of tax of $ 0.0

Income from continuing operations attributable to Koppers

26 unchanged sentences

March 2020 Grant

March 2019 Grant

Grant date price per share of performance

8 unchanged sentences

There are special vesting provisions for the stock units related to a change in control.

The following table shows a summary of the performance stock units as of March 31, 2022:

The following table shows a summary of the performance stock units as of June 30, 2022:

Performance Period

The following table shows a summary of the status and activity of non-vested stock units for the three months ended March 31, 2022:

The following table shows a summary of the status and activity of non-vested stock units for the six months ended June 30, 2022:

Weighted Average

3 unchanged sentences

Performance share adjustment

Non-vested at March 31, 2022

Non-vested at June 30, 2022

Stock Options

17 unchanged sentences

Prior to February 2022, we had not declared a dividend since 2014.

The dividend yield is based on the Company’s current and prospective dividend rate which calculates a continuous dividend yield based upon the market price of the underlying common stock.

The expected life in years is based on historical exercise data of options previously granted by us.

2 unchanged sentences

Treasury bill rates for the expected life of the option.

The following table shows a summary of the status and activity of stock options for the three months ended March 31, 2022:

The following table shows a summary of the status and activity of stock options for the six months ended June 30, 2022:

Weighted Average

5 unchanged sentences

Outstanding at December 31, 2021

Outstanding at March 31, 2022

Exercisable at March 31, 2022

Outstanding at June 30, 2022

Exercisable at June 30, 2022

Stock Compensation Expense

Total stock-based compensation expense recognized under our LTIP and employee stock purchase plan for the three months ended March 31, 2022 and 2021 is as follows:

Three Months Ended March 31,

Total stock-based compensation expense recognized under our LTIP and employee stock purchase plan for the three and six months ended June 30, 2022 and 2021 is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

(Dollars in millions)

5 unchanged sentences

Cash received from the exercise of stock options

As of March 31, 2022 , total future compensation expense related to non-vested stock-based compensation arrangements is expected to total $ 26.7 million and the weighted-average period over which this expense is expected to be recognized is approximately 32 months .

As of June 30, 2022 , total future compensation expense related to non-vested stock-based compensation arrangements is expected to total $ 24.6 million and the weighted-average period over which this expense is expected to be recognized is approximately 29 months .

Segment Information

14 unchanged sentences

Our primary measure of segment profitability is adjusted earnings before interest, 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 items include impairment, restructuring and plant closure costs, mark-to-market commodity hedging, gain on sale of assets and non-cash LIFO effects.

These items include impairment, restructuring and plant closure costs, mark-to-market commodity hedging, gain on sale of assets and LIFO inventory effects.

This presentation is consistent with how our chief operating decision maker evaluates the results of operations and makes strategic decisions about the business.

6 unchanged sentences

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 $ 5.4 million and $ 7.9 million are recorded within accounts receivable, net of allowance within the condensed consolidated balance sheet as of March 31, 2022 and December 31, 2021, respectively.

Contract assets of $ 6.1 million and $ 7.9 million are recorded within accounts receivable, net of allowance within the condensed consolidated balance sheet as of June 30, 2022 and December 31, 2021, respectively.

The following table sets forth certain sales and operating data, net of all intersegment transactions, for our segments for the periods indicated:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(Dollars in millions)

14 unchanged sentences

Carbon Materials and Chemicals

Items excluded from the determination of segment profit:

Impairment, restructuring and plant closure costs

Items excluded from the determination of segment

Impairment, restructuring and plant closure

benefits (costs)

Gain on sale of assets

Mark-to-market commodity hedging (losses) gains

Mark-to-market commodity hedging (losses)

Corporate unallocated

4 unchanged sentences

The following table sets forth revenues for significant product lines, net of all intersegment transactions, for our segments for the periods indicated:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(Dollars in millions)

25 unchanged sentences

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.

The estimated annual effective income tax rate, excluding discrete items, was 32.9 percent and 25.8 percent for three months ended March 31, 2022 and 2021, respectively.

The estimated annual effective income tax rate, excluding discrete items, was 34.3 percent and 25.8 percent for the six months ended June 30, 2022 and 2021, respectively.

The estimated annual effective income tax rate differs from the U.S.

4 unchanged sentences

Nondeductible expenses

GILTI inclusion, net of foreign tax credits

State income taxes, net of federal tax benefit

Change in tax contingency reserves

GILTI inclusion, net of foreign tax credits

Estimated annual effective income tax rate

Income taxes as a percentage of pretax income were 33.4 percent for the three months ended March 31, 2022.

This is higher than the estimated annual effective income tax rate due to various discrete items, which were not material in the aggregate or individually.

The interest expense deduction limitation is limited to 30 percent of adjusted taxable income as defined under the tax regulations.

1 unchanged sentence

This change in the determination of adjusted taxable income has decreased the amount of interest expense we can deduct and has had a significant unfavorable impact on our estimated annual effective income tax rate for the current year.

Income taxes as a percentage of pretax income were 24.5 percent for the three months ended March 31, 2021.

This was lower than the estimated annual effective income tax rate due primarily to an excess tax deduction for vested stock awards.

Income taxes as a percentage of pretax income were 37.0 percent for the three months ended June 30, 2022.

This is higher than the estimated annual effective income tax rate of 34.3 percent due to additional tax expense recognized in the current quarter as a result of increasing the estimated annual effective income tax rate utilized in the previous quarter.

Income taxes as a percentage of pretax income were 34.8 percent for the six months ended June 30, 2022.

This was higher than the estimated annual effective income tax rate of 34.3 percent due to minor discrete items.

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 for the three months ended March 31, 2022.

Unrecognized Tax Benefits

7 unchanged sentences

income tax examinations by tax authorities for years prior to 2016.

Unrecognized tax benefits totaled $ 1.5 million as of March 31, 2022 and December 31, 2021.

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate, was approximately $ 1.5 million as of March 31, 2022 and December 31, 2021.

Unrecognized tax benefits totaled $ 1.5 million as of June 30, 2022 and December 31, 2021.

The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate, was approximately $ 1.5 million as of June 30, 2022 and December 31, 2021.

We recognize interest expense and any related penalties from unrecognized tax benefits in income tax expense.

As of March 31, 2022 and December 31, 2021, we had accrued approximately $ 0.4 million for interest and penalties.

As of June 30, 2022 and December 31, 2021, we had accrued approximately $ 0.4 million for interest and penalties.

We do not anticipate material changes to the amount of unrecognized tax benefits within the next twelve months.

Net inventories as of March 31, 2022 and December 31, 2021 are summarized in the table below:

Net inventories as of June 30, 2022 and December 31, 2021 are summarized in the table below:

(Dollars in millions)

4 unchanged sentences

Property, Plant and Equipment

Property, plant and equipment as of March 31, 2022 and December 31, 2021 are summarized in the table below:

Property, plant and equipment as of June 30, 2022 and December 31, 2021 are summarized in the table below:

(Dollars in millions)

11 unchanged sentences

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 is expected to be completed in late 2022 or early 2023 at which time the pension obligation will be irrevocably settled.

The data cleansing effort is expected to be completed in early 2023 at which time the pension obligation will be irrevocably settled.

Upon that event, we will recognize a pre-tax pension settlement loss of approximately $ 22 million.

2 unchanged sentences

employees and a life insurance benefit to most U.S.

For salaried employees, the retiree medical and retiree insurance plans have been closed to new participants.

The following table provides the components of net periodic benefit cost for the pension plans for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

For salaried employees, the retiree medical and retiree life insurance plans have been closed to new participants.

The following table provides the components of net periodic benefit cost for the pension plans for the three and six months ended June 30, 2022 and 2021:

Three Months Ended June 30,

Six Months Ended June 30,

(Dollars in millions)

4 unchanged sentences

Defined contribution plan expense

Debt as of March 31, 2022 and December 31, 2021 was as follows:

Debt as of June 30, 2022 and December 31, 2021 was as follows:

Interest Rate

1 unchanged sentence

Revolving Credit Facility

Senior Notes due 2025

2 unchanged sentences

Long-term debt

Credit Facility

We maintain a $ 600.0 million senior secured revolving credit facility and a $ 100.0 million secured term loan facility (collectively, the “Credit Facility”), as amended.

The secured term loan had a quarterly amortization of $ 2.5 million and the interest rate on the Credit Facility was variable and based on LIBOR .

As of March 31, 2022, the secured term loan has been fully repaid.

Borrowings under the Credit Facility are secured by a first priority lien on substantially all of the assets of Koppers Inc., Koppers Holdings Inc.

Revolving Credit Facility

In June 2022, we entered into an $ 800.0 million revolving credit agreement (the “Credit Facility”) with a consortium of banks which replaced our previous $ 600.0 million senior secured revolving credit facility and $ 100.0 million senior secured term loan facility (the latter having been fully repaid as of March 31, 2022).

The Credit Facility also provides for 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 maturity date of the Credit Facility is in June 2027 subject to a springing maturity in the event the 2025 Notes (as defined below) are not repurchased, redeemed or refinanced prior to November 15, 2024.

The interest rate on the Credit Facility is variable and may be based on the Secured Overnight Financing Rate (“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 their material domestic subsidiaries.

The Credit Facility contains certain covenants for Koppers Inc.

and its restricted subsidiaries that limit capital expenditures, additional indebtedness, liens, dividends, investments or acquisitions.

The Credit Facility contains certain covenants that limit Koppers Inc.

and its restricted subsidiaries, including, without limitation, limitations on additional indebtedness, liens, dividends, investments, acquisitions, subsidiary and certain other distributions, asset sales, transactions with affiliates and modifications to material documents, including organizational documents.

In addition, such covenants 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, 2022, we had $ 257.8 million of unused revolving credit availability for working capital purposes after restrictions from certain letter of credit commitments and other covenants.

As of March 31, 2022, $ 7.8 million of commitments were utilized by outstanding undrawn letters of credit.

As of June 30, 2022, we had $ 317.2 million of unused revolving credit availability after restrictions from certain letter of credit commitments and other covenants.

As of June 30, 2022, $ 7.8 million of commitments were utilized by outstanding undrawn letters of credit.

Senior Notes due 2025

18 unchanged sentences

Cash expenditures

Currency translation

Balance at end of period

10 unchanged sentences

Variable lease expense is recognized in the period in which the obligation for those payments is incurred.

Operating lease costs were $ 7.5 million and $ 7.7 million during the three months ended March 31, 2022 and 2021, respectively.

Variable lease costs were $ 0.8 million during the three months ended March 31, 2022 and 2021.

The following table presents information about the amount and timing of cash flows arising from our operating leases as of March 31, 2022:

Operating lease costs were $ 7.2 million and $ 14.7 million during the three and six months ended June 30, 2022, respectively, and $ 7.6 million and $ 15.3 million during the three and six months ended June 30, 2021, respectively.

Variable lease costs were $ 0.6 million and $ 1.4 million during the three and six months ended June 30, 2022, respectively, and $ 0.8 million and $ 1.6 million during the three and six months ended June 30, 2021, respectively.

The following table presents information about the amount and timing of cash flows arising from our operating leases as of June 30, 2022:

(Dollars in millions)

22 unchanged sentences

We designate certain of our commodity swaps as cash flow hedges of forecasted purchases of commodities.

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.

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 (loss) 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.

1 unchanged sentence

These amounts are classified in cost of sales in the condensed consolidated statement of operations.

As of March 31, 2022 and December 31, 2021, we had outstanding copper swap contracts of the following amounts:

As of June 30, 2022 and December 31, 2021, we had outstanding copper swap contracts of the following amounts:

Units Outstanding (in Pounds)

3 unchanged sentences

Contracts where hedge accounting was not

As of March 31, 2022 and December 31, 2021, the fair value of the outstanding copper swap contracts is recorded in the balance sheet as follows:

As of June 30, 2022 and December 31, 2021, the fair value of the outstanding copper swap contracts is recorded in the balance sheet as follows:

(Dollars in millions)

Derivative contracts

Other long-term liabilities

Net asset on balance sheet

Accumulated other comprehensive gain, net of tax

In the next twelve months , we estimate that $ 36.8 million of unrealized gains, net of tax, related to commodity price hedging will be reclassified from other comprehensive income into earnings .

See Note 6 – “Comprehensive Income and Equity”, for amounts recorded in other comprehensive income and for amounts reclassified from accumulated other comprehensive loss into net income for the periods specified below.

For the three months ended March 31, 2022 and 2021, the unrealized (loss) gain from contracts where hedge accounting was not elected is as follows:

Three Months Ended March 31,

We estimate that $ 12.9 million of unrealized gains, net of tax, related to commodity price hedging will be reclassified from other comprehensive (loss) income into earnings over the next twelve months .

See Note 6 – “ Comprehensive (Loss) Income and Equity ” , for amounts recorded in other comprehensive loss and for amounts reclassified from accumulated other comprehensive loss in to net income for the periods specified below.

For the three and six months ended June 30, 2022 and 2021, the unrealized (loss) gain from contracts where hedge accounting was not elected is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

(Dollars in millions)

(Loss) gain from contracts where hedge accounting was not elected

(Loss) gain from contracts where hedge accounting was

The fair value associated with forward contracts related to foreign currency that are not designated as hedges are immediately charged to earnings.

These amounts are classified in cost of sales in the condensed consolidated statement of operations and comprehensive income.

As of March 31, 2022 and December 31, 2021, the fair value of outstanding foreign currency forward contracts is recorded in the balance sheet as follows:

These amounts are classified in cost of sales in the condensed consolidated statement of operations and comprehensive (loss) income.

As of June 30, 2022 and December 31, 2021, the fair value of outstanding foreign currency forward contracts is recorded in the balance sheet as follows:

(Dollars in millions)

2 unchanged sentences

Net liability on balance sheet

As of March 31, 2022 and December 31, 2021, the net currency units outstanding for these contracts were:

As of June 30, 2022 and December 31, 2021, the net currency units outstanding for these contracts were:

(In millions)

7 unchanged sentences

is one of several defendants in lawsuits filed in two states in which the plaintiffs claim they suffered a variety of illnesses (including cancer) as a result of exposure to coal tar pitch sold by the defendants.

There were 57 plaintiffs in 30 cases pending as of March 31, 2022, compared to 59 plaintiffs in 31 cases pending as of December 31, 2021.

As of March 31, 2022 , there were 29 cases pending in the Court of Common Pleas of Allegheny County, Pennsylvania, and one case pending in the Circuit Court of Knox County, Tennessee.

There were 57 plaintiffs in 30 cases pending as of June 30, 2022, compared to 59 plaintiffs in 31 cases pending as of December 31, 2021.

As of June 30, 2022 , there were 29 cases pending in the Court of Common Pleas of Allegheny County, Pennsylvania, and one case pending in the Circuit Court of Knox County, Tennessee.

The plaintiffs in all 30 pending cases seek to recover compensatory damages.

60 unchanged sentences

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 are approximately $ 1.1 billion and $ 1.7 billion, respectively.

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 may increase given the remedy will not be implemented for several years.

9 unchanged sentences

In September 2009, Koppers Inc.

received a general notice letter notifying it that it may be a PRP at the Newark Bay CERCLA site.

received a general notice letter stating that it may be a PRP at the Newark Bay CERCLA site.

In January 2010, Koppers Inc.

1 unchanged sentence

is a de minimis party at this site.

We have accrued the estimated costs of participating in the PRP group at the Portland Harbor and Newark Bay CERCLA sites and estimated de minimis contributor settlement amounts at the sites totaling $ 3.4 million as of March 31, 2022.

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.

1 unchanged sentence

There are two plant sites related to the Performance Chemicals business and one plant site related to the Utility and Industrial Products business 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, 2022, our estimated environmental remediation liability for these acquired sites totals $ 4.0 million.

As of June 30, 2022, our estimated environmental remediation liability for these acquired sites totals $ 4.0 million.

Foreign Environmental Matters .

There is one plant site related to the Performance Chemicals 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, 2022 , our estimated environmental remediation liability for the acquired site totals $ 1.4 million.

As of June 30, 2022 , our estimated environmental remediation liability for the acquired site totals $ 1.3 million.

Environmental Reserves Rollforward.

The following table reflects changes in the accrual for environmental remediation.

A total of $ 2.6 million and $ 2.8 million are classified as current liabilities as of March 31, 2022 and December 31, 2021:

A total of $ 2.4 million and $ 2.8 million are classified as current liabilities as of June 30, 2022 and December 31, 2021:

(Dollars in millions)

5 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-Q

Item 1. Financial Statements