This report and any documents incorporated herein by reference contain
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 and may include, but are not limited to,
statements about sales levels, acquisitions, restructuring, declines in the
value of Koppers assets and the effect of any related impairment charges,
profitability and anticipated expenses and cash outflows. All forward-looking
statements involve risks and uncertainties. All statements contained herein that
are not clearly historical in nature are forward-looking, and words such as
"believe," "anticipate," "expect," "estimate," "may," "will," "should,"
"continue," "plans," "potential," "intends," "likely," or other similar words or
phrases are generally intended to identify forward-looking statements. Any
forward-looking statement contained herein, in press releases, written
statements or documents filed with the Securities and Exchange Commission, or in
Koppers communications and discussions with investors and analysts in the normal
course of business through meetings, phone calls and conference calls, regarding
future dividends, expectations with respect to sales, earnings, cash flows,
operating efficiencies, restructurings, product introduction or expansion, the
benefits of acquisitions and divestitures, or other matters as well as
financings and debt reduction, are subject to known and unknown risks,
uncertainties and contingencies. Many of these risks, uncertainties and
contingencies are beyond our control, and may cause actual results, performance
or achievements to differ materially from anticipated results, performance or
achievements. Factors that might affect such forward-looking statements,
include, among other things, the impact of changes in commodity prices, such as
oil and copper, on product margins; general economic and business conditions;
existing and future adverse effects as a result of the coronavirus (COVID-19)
pandemic; disruption in the U.S. and global financial markets; potential
difficulties in protecting our intellectual property; the ratings on our debt
and our ability to repay or refinance our outstanding indebtedness as it
matures; our ability to operate within the limits of our debt covenants;
potential impairment of our goodwill and/or long-lived assets; demand for
Koppers goods and services; competitive conditions; interest rate and foreign
currency rate fluctuations; availability and costs of key raw materials, such as
coal tar, and unfavorable resolution of claims against us, as well as those
discussed more fully elsewhere in this report and in documents filed with the
Securities and Exchange Commission by Koppers, particularly our latest annual
report on Form 10-K and subsequent filings. We caution you that the foregoing
list of important factors may not contain all of the material factors that are
important to you. In addition, in light of these risks and uncertainties, the
matters referred to in the forward-looking statements contained in this report
and the documents incorporated by reference herein may not in fact occur. Any
forward-looking statements in this report speak only as of the date of this
report, and we undertake no obligation to update any forward-looking statement
to reflect events or circumstances after that date or to reflect the occurrence
of unanticipated events.

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the unaudited financial statements
and related notes included in Item 1 of this Part I as well as the audited
consolidated financial statements and the related notes included in our Annual
Report on Form 10-K for the year ended December 31, 2021.

Overview



We are a leading integrated global provider of treated wood products, wood
preservation chemicals and carbon compounds. Our products and services are used
in a variety of niche applications in a diverse range of end-markets, including
the railroad, specialty chemical, utility, residential lumber, agriculture,
aluminum, steel, rubber and construction industries. We serve our customers
through a comprehensive global manufacturing and distribution network, with
manufacturing capabilities in North America, South America, Australasia and
Europe.

We operate three principal businesses: RUPS, PC and CMC. Through our RUPS
business, we believe that we are the largest supplier of wood crossties to the
Class I railroads in North America. Our other treated wood products include
utility poles for the electric, telephone, and broadband utility industries in
the United States and Australia and construction pilings in the U.S. We also
provide rail joint bar products as well as various services to the railroad
industry in North America.

Through our PC business, we believe that we are the global leader in developing, manufacturing and marketing wood preservation chemicals and wood treatment technologies for use in the pressure treating of lumber for residential, industrial and agricultural applications.



Our CMC business processes coal tar into a variety of products, including
creosote, carbon pitch, carbon black feedstock, naphthalene and phthalic
anhydride, which are intermediate materials necessary in the pressure treatment
of wood, and the production of aluminum, carbon black, high-strength concrete,
plasticizers and specialty chemicals, respectively.


                                       22
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Non-GAAP Financial Measures



We utilize certain financial measures that are not in accordance with U.S.
generally accepted accounting principles (U.S. GAAP) to analyze and manage the
performance of our business. We believe that adjusted EBITDA provides
information useful to investors in understanding the underlying operational
performance of the company, our business and performance trends, and facilitates
comparisons between periods. The exclusion of certain items permits evaluation
and a comparison of results for business operations, and it is on this basis
that our management internally assesses our performance. In addition, our board
of directors and executive management team use adjusted EBITDA as a performance
measure under the company's annual incentive plans.

Although we believe that these non-GAAP financial measures enhance investors'
understanding of our business and performance, these non-GAAP financial measures
should not be considered an alternative to GAAP basis financial measures and
should be read in conjunction with the relevant GAAP financial measures. Other
companies in a similar industry may define or calculate these measures
differently than we do, limiting their usefulness as comparative measures.
Because of these limitations, these non-GAAP financial measures should not be
considered in isolation or as substitutes for performance measures calculated in
accordance with GAAP.

Adjusted EBITDA is a non-GAAP financial measure defined as net income from
continuing operations before interest, income taxes, depreciation, amortization
and other adjustments. These adjustments are items that we believe are not
representative of underlying business performance. Adjusted items typically
include certain expenses associated with impairment, restructuring and plant
closure costs, significant gains and losses on asset disposals or business
combinations, LIFO and mark-to-market commodity hedging and other unusual items.
Adjusted EBITDA is the primary measure of profitability we use to evaluate our
businesses. Refer to Note 9 - "Segment Information" for reconciliations from
adjusted EBITDA to net income on a consolidated basis.

Outlook

Trend Overview



Our businesses and results of operations are affected by various competitive and
other factors including (i) the impact of global economic conditions on demand
for our products, including the impact of imported products from competitors in
certain regions where we operate; (ii) raw material pricing and availability, in
particular the cost and availability of hardwood lumber for railroad crossties,
softwood lumber for utility poles, scrap copper prices, and the cost and amount
of coal tar available in global markets, which is negatively affected by
reductions in blast furnace steel production and currently by the Russian
invasion of Ukraine; (iii) volatility in oil prices, which impacts the cost of
coal tar and certain other raw materials, as well as selling prices and margins
for certain of our products including carbon black feedstock, phthalic
anhydride, and naphthalene; (iv) competitive conditions in global carbon pitch
markets; and (v) changes in foreign exchange rates.

The Infrastructure Investment and Jobs Act, which was signed into law on
November 15, 2021, will usher in more than a trillion dollars in new spending
across eight years to improve the nation's roads, bridges, rail, internet, water
systems and more. As a global leader in water- and oil-borne preservatives
serving many end markets with our wood-treatment technologies, we believe we are
well-positioned to benefit from the new legislation. Our products are used in
multiple infrastructure applications, including utility poles, railroad ties,
highway and construction concrete, steel, aluminum, and wood for construction
projects.

Effects of COVID-19 on our operations



Our operating results may fluctuate due to a variety of factors that are outside
of our control, including from the effects of the current pandemic. The COVID-19
outbreak began to have a global effect in the first quarter of 2020 and
continues to have a significant impact on global markets driven by supply chain
and production disruptions, workforce restrictions, trends in spending patterns
and other factors. During the COVID-19 pandemic, substantially all of our global
businesses have continued to operate without significant disruption. In the
United States, Koppers was designated as an essential business, as determined by
the Cybersecurity and Infrastructure Security Agency (CISA) within the
Department of Homeland Security. As a result, we have been able to meet the
demands of our customers in the various markets we serve by continuing to
operate to help our customers transport critical goods, provide power and
connectivity to homes and businesses, and keep our infrastructure running
reliably.

Our condensed consolidated financial statements and discussion and analysis of
financial condition and results of operations reflect estimates and assumptions
made by us as of March 31, 2022, including those related to COVID-19. Events and
changes in circumstances arising after March 31, 2022, including those resulting
from the impacts of COVID-19, will be reflected in our estimates for future
periods.


                                       23
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Railroad and Utility Products and Services



Historically, North American demand for crossties had been in the range of 22
million to 25 million crossties annually. However, the crosstie replacement
market has been significantly lower in recent years. According to the Railway
Tie Association ("RTA"), the estimated total crosstie installations in 2021 were
approximately 18.3 million, of which 14.2 million were for Class I railroads.
Throughout the pandemic, some sawmills were operating at 50 percent or less of
their production capacity. Sawmills provide raw materials to several industries
beyond the wood crosstie market and as demand and pricing for construction
lumber increased significantly throughout 2021 and continuing into 2022, overall
crosstie production output thus far has been lower than forecasted. Crosstie
prices increased significantly as a result of limited supply and railroad
customers are deferring their purchases. Given continuing economic
uncertainties, including those related to COVID-19, the RTA is forecasting a
slight increase in 2022 of 1.9 percent, or 18.7 million crossties, primarily
from the commercial market while Class I volumes are expected to remain at
relatively similar demand levels. In 2023, the outlook continues to be modest
with a projected increase of 2.0 percent, or 19.0 million crossties, primarily
from the Class I railroads.

According to the Association of American Railroads ("AAR"), rail traffic for the
first three months of 2022 was mixed compared with the prior year period. For
the first quarter of 2022, total U.S. carload traffic increased 2.6 percent from
the prior year, while intermodal units declined by 6.9 percent. The combined
U.S. traffic for carloads and intermodal units was lower than the prior year by
2.7 percent. In March, the trends were conflicting as carloads for certain
categories such as chemicals, crushed stone and sand, food products, lumber, and
motor vehicles were higher than prior months; however, carloads for grain,
petroleum products, and paper products were down.

With respect to our utility products business, the installed base for wood
distribution poles in the U.S. is approximately 150 million and nearly half of
this total are 40 years old. Industry demand has historically been in the range
of two million to three million poles annually. On an overall basis, we believe
that the rate at which utilities purchase utility poles will grow as they
continue replacement programs within their service territories. As a whole, the
key factors that drive growth in the utility pole market include growing global
energy consumption as well as expansion of the global telecommunication
industry. Generally, utilities need to maintain their infrastructure to avoid
interruptions in service due to extreme weather events that are occurring more
frequently. At the same time, the need for digital connectivity remains strong
given that portions of the population are continuing to work remotely. As long
as there are not any extended supply chain disruptions, we anticipate that 2022
demand for pole replacements will be relatively stable to slightly higher, as
the overall industry is trending toward expanded and upgraded transmission
networks. In addition, there is a developing trend in the industry for utilities
to maintain some additional inventory to prepare for potential damaging storms.

With respect to raw materials, we expect the cost of poles to be affected as
lumber for other uses continue to be in high demand and, consequently, lead to
increased costs for pole material. Also, transportation costs, which include
fuel costs, are expected to experience some upward pressure and affect the price
of pole material delivered to the pole peelers from the forest. As a result of
these inflationary factors, we are implementing price increases to pass on
higher costs to end customers.

Longer term, we are evaluating opportunities to potentially expand our market
presence in the United States as well as certain overseas markets. We believe
there remains an overall need for sustained investment in infrastructure and
capacity expansion and with our vertical integration capabilities in wood
treatment and strong customer relationships, we will ultimately benefit from
increased demand.

As part of optimizing our business, we continue to evaluate a number of
opportunities to improve efficiencies in our operational processes, people and
facilities. With our 14 North American RUPS treating facilities operating at
less than full utilization, our goal is to either capture more volume through
the existing facilities or consolidate our operating footprint. In January 2022,
we began curtailing operations at our Sweetwater, Tennessee plant. We sold the
plant in March 2022 and recorded a gain of $2.5 million on the sale. During
2021, we exited the Texas Electric Cooperatives' Jasper, Texas facility and
relocated the production of utility products to our Somerville, Texas plant.
Separately, in the third quarter of 2020, we permanently closed our Denver,
Colorado wood treatment facility. Concurrent with the decision to close the
Denver facility, we announced our plan to modernize and upgrade parts of our
treating network, specifically at our facility in North Little Rock, Arkansas,
which would be primarily funded through proceeds from the sale of non-core
assets, including the Denver facility. In October 2021, we sold our closed
Denver, Colorado crosstie treating facility and recorded a gain on sale of $23.4
million. In addition, as part of the sales agreement, we may receive additional
contingent post-closing payments secured by a guaranty from the buyer after
applicable redevelopment milestones are reached. At this time, we are unable to
estimate how much, if any, of these additional funds will ultimately be paid to
us.

                                       24
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Performance Chemicals



As most of the products sold by PC are copper-based products, changes in the
price and availability of copper can have a significant impact on product
pricing and margins. We attempt to moderate the variability in copper pricing
over time by entering into hedging transactions for the majority of our copper
needs, which primarily range from six months up to 36 months. These hedges
typically match expected customer purchases and from time to time, we enter into
forward transactions based upon long-term forecasted needs of copper. Copper
prices began to reach peak levels in mid-2021 boosted by pent-up demand as home
repair and remodeling growth accelerated when pandemic lockdowns were eased, and
the market faced tight supplies. In 2022, thus far copper prices have remained
high but projections for future copper prices are mixed and are contingent on
supply and demand dynamics as well as the impact of higher interest rates on
economic growth.

Product demand for our PC business has historically been closely associated with
consumer spending on home repair and remodeling projects in North America, and
therefore, trends in existing home sales serve as a leading indicator. In recent
months, the market for existing homes seems to be slowing. According to the
National Association of Realtors® ("NAR"), total existing-home sales decreased
in March by 2.7 percent compared with February and 4.5 percent compared with the
prior year, marking two consecutive months of declines. The housing market is
expected to be impacted by rising interest rates and inflation, which in turn,
are having unfavorable effects on purchasing power.

According to the Leading Indicator of Remodeling Activity ("LIRA") reported by
the Joint Center for Housing Studies of Harvard University, home renovation and
repair expenditures increased by 11.5 percent year-over-year in the first
quarter of 2022. The LIRA projects that expenditures for improvements and
repairs to the owner-occupied housing stock are expected to grow throughout 2022
and into early next year. The year-over-year increases in residential renovation
and maintenance spending are estimated to reach 19.7 percent in the third
quarter of 2022 before decreasing to 15.1 percent in the first quarter of 2023.
While annual improvement and repair spending is projected to reach $450 billion
by the first quarter of 2023, headwinds such as the rising costs of project
financing, construction materials, and labor, as well as growing concerns about
a broader economic slowdown or recession may further slow remodeling growth.

The Conference Board Consumer Confidence Index® was 107.2 in March, increasing
slightly from 105.7 in February. While economic growth continued late into the
first quarter of 2022, consumers are indicating a weakened outlook and
purchasing intentions for big-ticket items such as automobiles are softening
somewhat over the past few months as expectations for interest rates have risen.

Although the market data and projections for home improvements are continually changing, we anticipate ongoing demand for residential treated wood and residential renovation markets is remaining favorable.

Carbon Materials and Chemicals



The primary products produced by CMC are creosote, which is a registered
pesticide in the United States and used primarily in the pressure treatment of
railroad crossties, and carbon pitch, which is sold primarily to the aluminum
industry for the production of carbon anodes used in the smelting of aluminum.
We have realigned capacity in our CMC plants in North America and Europe over
the past several years to levels required to meet creosote demand in North
America for the treatment of railroad crossties. The CMC business currently
supplies our North American RUPS business with its creosote requirements.

The availability of coal tar, the primary raw material for our CMC business, is
linked to levels of metallurgical coke production. As the global steel industry,
excluding Asia, has reduced the production of steel using metallurgical coke,
the volumes of coal tar have been reduced. Coal tar raw material supply remains
constrained globally due to reductions in blast furnace steel capacity in
addition to near term supply restrictions resulting from the Russian invasion of
Ukraine in March 2022. Our European CMC business typically receives
approximately 20 percent of its annual coal tar requirements from Russia and
Ukraine. We have ceased purchasing coal tar from Russian suppliers and we are
currently unable to purchase coal tar from Ukrainian suppliers due to the
conflict. Currently, the financial impact of volume reductions in our coal tar
supply have been offset by higher prices in our end markets for that region and
are not expected to materially impact operating results.

For the external markets served by our CMC business, we anticipate some slowdown
in manufacturing. According to IHS Markit Automotive Group (IHS), the global
auto production forecast was updated in March to reflect the impact of Russia's
invasion of Ukraine and in April, the forecast was further downgraded. This was
due to some additional challenges that have arisen, including a sluggish
recovery in semiconductor supplies, the impact of further COVID lockdowns in
China, and the longer-term influence of high raw material prices that will put
added pressure on new vehicle affordability. Currently, the forecast reflects
noteworthy reductions for several markets, with the most significant reductions
focused on Europe and China.


                                       25

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Seasonality and Effects of Weather on Operations



Our quarterly operating results fluctuate due to a variety of factors that are
outside of our control, including inclement weather conditions, which in the
past have affected operating results. Operations at some of our facilities have
at times been reduced during the winter months. Moreover, demand for some of our
products declines during periods of inclement weather. As a result of the
foregoing, we anticipate that we may experience material fluctuations in
quarterly operating results. Historically, our operating results have been
significantly lower in the first and fourth calendar quarters as compared to the
second and third calendar quarters.

Results of Operations - Comparison of Three Months Ended March 31, 2022 and 2021

Consolidated Results

Net sales for the three months ended March 31, 2022 and 2021 are summarized by segment in the following table:



                                                     Three Months Ended March 31,
                                                         2022                2021        Net Change
(Dollars in millions)
Railroad and Utility Products and Services      $       183.4       $       191.9                -4 %
Performance Chemicals                                   136.4               123.6                10 %
Carbon Materials and Chemicals                          139.5                92.0                52 %
                                                $       459.3       $       407.5                13 %



RUPS net sales decreased by $8.5 million, or four percent, compared to the prior
year period. The sales decrease was largely related to volume decreases in our
utility pole business as a result of transitioning production from the Texas
Electric Cooperatives' Jasper, Texas plant to our Somerville, Texas plant along
with volume decreases of untreated crossties for certain Class I customers and
volume decreases in the commercial crosstie market. These decreases were offset,
in part, by pricing increases in various markets within the segment and volume
increases in our maintenance-of-way businesses. Foreign currency changes
compared to the prior year period had an unfavorable impact on sales in the
current year period of $0.6 million, mainly from our Australian utility pole
business.

PC net sales increased by $12.8 million, or ten percent, compared to the prior
year period. The sales increase was primarily due to global price increases in
the current year period for our copper-based preservatives and higher demand for
preservatives in some of our international markets. The increases were offset,
in part, by volume decreases for preservatives in Canada as high lumber prices,
excess treated inventory from prior year and a return to normal consumer
spending habits have tempered customer demand compared to extremely high levels
of pandemic-fueled demand in the first half of 2021. Foreign currency changes
compared to the prior year period had a de minimis impact on sales in the
current year period.

CMC net sales increased by $47.5 million, or 52 percent, compared to the prior
year period due mainly to higher sales prices and volumes for carbon pitch,
phthalic anhydride and carbon black feedstock along with higher sales prices for
naphthalene in the current year period. Foreign currency changes compared to the
prior year period from our international markets had an unfavorable impact on
sales in the current year period of $5.3 million.

Cost of sales as a percentage of net sales was 81 percent for the quarter ended
March 31, 2022 compared to 78 percent in the prior year quarter. Gross margin
was unfavorably impacted in the current year period primarily by an increase in
raw material costs, fuel costs and shipping costs along with a decrease in
absorption due to lower utilization at some of our plants in the current year
period as sales volumes and throughput at RUPS has declined compared to the
prior year period.

Depreciation and amortization charges for the quarter ended March 31, 2022 were
$1.9 million lower when compared to the prior year period mainly due to an
increase in an asset retirement obligation in our European CMC operations in the
first quarter of 2021.

Gain on sale of assets for the quarter ended March 31, 2022 was $2.5 million and
was related to the sale of our utility pole treating facility in Sweetwater,
Tennessee while the gain on sale of assets for the quarter ended March 31, 2021
was $7.5 million and was related to the sales of two previously decommissioned
plants as described in Note 3 - "Plant Closures and Divestitures".

Impairment and restructuring charges for the quarter ended March 31, 2022 were
$1.2 million lower when compared to the prior year period. The prior year period
included accelerated depreciation, demolition and other plant closure period
costs related to the closure of our Denver, Colorado facility.

                                       26
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Selling, general and administrative expenses for the quarter ended March 31,
2022 were $4.6 million higher when compared to the prior year period due mainly
to an increase of $1.6 million for consulting and professional services, $1.4
million for employee benefit related expenses and $1.0 million for travel and
entertainment expenses.

Interest expense for the quarter ended March 31, 2022 was consistent with the prior year period.



Income tax expense for the quarter ended March 31, 2022 was $9.7 million, an
increase of $1.2 million when compared to the prior year quarter. The increase
in the current year period is due to an increase in the estimated annual
effective income tax rate when compared to the prior year period. The increase
is attributable to the geographical mix of earnings as well as an increase in
the interest expense deduction limitation due to a tax law change that went into
effect January 1, 2022.

Segment Results.

Segment adjusted EBITDA and adjusted EBITDA margin for the three months ended March 31, 2022 and 2021 is summarized by segment in the following table:


                                                         Three Months Ended March 31,
(Dollars in millions)                                     2022                   2021        % Change
Adjusted EBITDA:
Railroad and Utility Products and Services      $         11.6         $         16.4             -29 %
Performance Chemicals                                     20.9                   27.8             -25 %
Carbon Materials and Chemicals                            20.1                   10.4              93 %
Corporate unallocated                                      0.0                    0.5            -100 %
Total Adjusted EBITDA                           $         52.6         $         55.1              -5 %
Adjusted EBITDA margin as a percentage of
GAAP sales:
Railroad and Utility Products and Services                 6.3 %                  8.5 %           -26 %
Performance Chemicals                                     15.3 %                 22.5 %           -32 %
Carbon Materials and Chemicals                            14.4 %                 11.3 %            27 %
Total Adjusted EBITDA margin                              11.5 %                 13.5 %           -15 %


RUPS adjusted EBITDA decreased by $4.8 million compared to the prior year
period. Adjusted EBITDA as a percentage of net sales decreased to 6.3 percent
from 8.5 percent in the prior year period and was unfavorably impacted in our
domestic utility pole business by higher raw material, freight and fuel costs,
as well as driver shortages and labor inefficiencies driven by the current labor
shortage. In addition, unfavorability in our railroad crosstie business was
driven by higher raw material costs and lower absorption of fixed costs due to
lower tie throughput as a result of decreased purchasing activity of untreated
crossties by our Class I customers driven by the impact that higher lumber
prices had on the hardwood market. Finally, travel expenses have also increased
over the prior year period as we emerge from in-person restrictions related to
the pandemic. These unfavorable factors were partially offset by price increases
implemented across our businesses.

PC adjusted EBITDA decreased by $6.9 million compared to the prior year period.
Adjusted EBITDA as a percentage of net sales decreased to 15.3 percent from 22.5
percent in the prior year period. The current year period was unfavorably
impacted primarily by an increase in raw material costs, including scrap copper,
net of gains realized from our copper-hedging program. This was offset, in part,
by global price increases in the current year period for our copper-based
preservatives and higher demand for preservatives in some of our other
international markets.

CMC adjusted EBITDA increased by $9.7 million compared to the prior year period.
Adjusted EBITDA as a percentage of net sales increased to 14.4 percent from 11.3
percent in the prior year period. The current year period was favorably impacted
by higher sales prices and volumes for carbon pitch, phthalic anhydride and
carbon black feedstock along with higher sales prices for naphthalene. These
increases were offset, in part, by an increase in raw material costs and
selling, general and administrative costs in the current year period.

                                       27
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The following table reconciles net income to adjusted EBITDA on a consolidated basis as calculated by us for the periods indicated below:


                                                                Three Months Ended March 31,
(Dollars in millions)                                            2022                   2021
Net income                                             $         18.8         $         25.8
Interest expense                                                  9.8                   10.1
Depreciation and amortization                                    14.2                   16.1
Income tax provision                                              9.7                    8.5
Discontinued operations                                           0.5                    0.4
Sub-total                                                        53.0                   60.9
Adjustments to arrive at adjusted EBITDA:
Impairment, restructuring and plant closure costs(1)              0.1                    3.3
(Gain) on sale of assets                                         (2.5 )                 (7.5 )
LIFO expense                                                      1.7                    1.0
Mark-to-market commodity hedging losses (gains)                   0.3                   (2.6 )
Total adjustments                                                (0.4 )                 (5.8 )
Adjusted EBITDA                                        $         52.6         $         55.1

(1) Includes costs associated with restructuring, sales and closures of certain RUPS and CMC facilities as described in Note 3 - "Plant Closures and Divestitures".

Cash Flow



Net cash used in operating activities for the three months ended March 31, 2022
was $8.0 million compared to net cash used in operating activities of $7.4
million in the prior year period as higher working capital usage of $0.5 million
in the current year period was a result of an increase in accounts receivable
consistent with our increase in sales and an increase in inventory due to
increased levels and raw material costs offset, in part, by a corresponding
increase in accounts payable. Operating profit, excluding gain on sale of
assets, was consistent with the prior year period.

Net cash used in investing activities for the three months ended March 31, 2022
was $22.0 million compared to net cash used in investing activities of $19.5
million in the prior year period. Capital expenditures for both periods include
increased investment in growth projects, primarily in our crosstie business,
such as the expansion of our RUPS facility in North Little Rock, Arkansas. In
addition, the current year period included $3.8 million of cash provided by the
sale of our utility pole treating facility in Sweetwater, Tennessee while the
prior year period included $4.7 million of cash provided by the sales of two
previously decommissioned CMC plants.

Net cash provided by financing activities was $33.4 million for the three months
ended March 31, 2022 and March 31, 2021. The cash provided by financing
activities in the three months ended March 31, 2022 reflected net borrowings of
$45.4 million partially offset by repurchases of common stock and dividends paid
of $12.2 million. The cash provided by financing activities in the prior year
period primarily reflected net borrowings of debt of $34.1 million.

Liquidity and Capital Resources



The Credit Facility includes a $600.0 million senior secured revolving credit
facility and a $100.0 million secured term loan facility as described in Note 14
"Debt." As of March 31, 2022, the secured term loan has been fully repaid.

Restrictions on Dividends to Koppers Holdings

Koppers Holdings depends on the dividends from the earnings of Koppers Inc. and
its subsidiaries to generate the funds necessary to meet its financial
obligations, including the payment of any declared dividend of Koppers Holdings.
The Credit Facility prohibits Koppers Inc. from making dividend payments to
Koppers Holdings unless (1) such dividend payments are permitted by the
indenture governing the "2025 Notes", (2) no event of default or potential
default has occurred or is continuing under our Credit Facility, and (3) we are
in pro forma compliance with our fixed charge coverage ratio covenant after
giving effect to such dividend. The indenture governing the 2025 Notes restricts
Koppers Inc.'s ability to finance our payment of dividends if (1) a default has
occurred or would result from such financing, (2) Koppers Inc., or a restricted
subsidiary of Koppers Inc. which is not a guarantor under the indenture, is not
able to incur additional indebtedness (as defined in the indenture), and (3) the
sum of all restricted payments (as defined in the indenture) have exceeded the
permitted amount (which we refer to as the "basket") at such point in time.

At March 31, 2022, the basket totaled $281.2 million. Notwithstanding such
restrictions, the indenture governing the 2025 Notes permits an additional
aggregate amount of $0.30 per share each fiscal quarter to finance dividends on
the capital stock of Koppers Holdings, whether or not there is any basket
availability, provided that at the time of such payment, no default in the
indenture has occurred or would result from financing the dividends. In
addition, certain required coverage ratios in the Credit Facility may restrict
the ability of Koppers Inc. to pay dividends.

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Liquidity

The following table summarizes our estimated liquidity as of March 31, 2022 (dollars in millions):



Cash and cash equivalents(1)             $  46.9
Amount available under Credit Facility     257.8
Total estimated liquidity                $ 304.7

(1) Cash includes approximately $46.2 million held by foreign subsidiaries and

excludes approximately $2.3 million of restricted cash.

Our liquidity was $348.4 million as of December 31, 2021.



Our need for cash in the next twelve months relates primarily to contractual
obligations which include debt service, pension plan funding, purchase
commitments and operating leases, as well as working capital, capital
maintenance programs, the funding of plant consolidation and rationalizations,
dividends and share repurchases. We may also use cash to pursue other potential
strategic acquisitions or voluntary pension plan contributions. Capital
expenditures in 2022, excluding acquisitions, if any, are expected to total
approximately $95 million and are expected to be funded by cash from operations.
We anticipate that our liquidity will continue to be adequate to fund our cash
requirements for the next twelve months.

We manage our working capital to increase our flexibility to pay down debt. Debt
will fluctuate throughout any operating period based upon the timing of receipts
from customers and payments to vendors. As of March 31, 2022 and December 31,
2021, approximately 80 percent and 75 percent of accounts payable was current,
approximately 15 percent and 20 percent was 1-30 days past due and approximately
five percent was past due greater than 30 days, respectively.

Debt Covenants

The covenants under the Credit Facility may affect availability of the facility or restrict the ability of Koppers Inc. to pay dividends, including the following financial ratios:

? The fixed charge coverage ratio, calculated as of the end of each fiscal

quarter for the four fiscal quarters then ended, is not permitted to be less

than 1.10. The fixed charge coverage ratio as of March 31, 2022 was 1.31.

? The total secured leverage ratio, calculated as of the end of each fiscal

quarter for the four fiscal quarters then ended, is not permitted to exceed

2.75. The total secured leverage ratio as of March 31, 2022 was 1.43.

? The total leverage ratio, calculated as of the end of each fiscal quarter for

the four fiscal quarters then ended, is not permitted to exceed 4.75. The

total leverage ratio as of March 31, 2022 was 3.57.




We are currently in compliance with all covenants governing the Credit Facility.
Our continued ability to meet these financial ratios can be affected by events
beyond our control; however, excluding possible acquisitions, we currently
expect that our net cash flows from operating activities and funds available
from our Credit Facility will be sufficient to provide for our working capital
needs and capital spending requirements over the next twelve months.

Legal Matters

The information set forth in Note 18 to the Condensed Consolidated Financial Statements of Koppers Holdings Inc. included in Item 1 of this Part I is incorporated herein by reference.

Recently Issued Accounting Guidance

The information set forth in Note 2 to the Condensed Consolidated Financial Statements of Koppers Holdings Inc. included in Item 1 of this Part I is incorporated herein by reference.

Critical Accounting Policies

There have been no material changes to our critical accounting policies as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

Environmental and Other Matters

The information set forth in Note 18 to the Condensed Consolidated Financial Statements of Koppers Holdings Inc. included in Item 1 of this Part I is incorporated herein by reference.


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