19. Subsidiary Guarantor Information for Koppers Inc. Senior Notes

On January 25, 2017, Koppers Inc. issued $500.0 million principal value of Senior Notes due 2025 (the “2025 Notes”). Koppers Holdings and each of Koppers Inc.’s 100 percent-owned material domestic subsidiaries other than Koppers Assurance, Inc. fully and unconditionally guarantee the payment of principal and interest on the 2025 Notes. The domestic guarantor subsidiaries include Koppers World-Wide Ventures Corporation, Koppers Delaware, Inc., Koppers Concrete Products, Inc., Concrete Partners, Inc., Koppers Performance Chemicals Inc., Koppers Railroad Structures Inc., Koppers NZ, LLC, Koppers-Nevada Limited Liability Company, Wood Protection LP, Wood Protection Management LLC, Koppers Asia LLC and Koppers Ventures Inc. Non-guarantor subsidiaries are owned directly or indirectly by Koppers Inc. or are owned directly or indirectly by Koppers World-Wide Ventures Corporation.

The guarantee of a guarantor subsidiary will be automatically and unconditionally released and discharged in the event of:

•

any sale of the capital stock or substantially all of the assets of the guarantor subsidiary;

•

the designation of the guarantor subsidiary as an unrestricted subsidiary in accordance with the indenture governing the 2025 Notes; and

•

the legal defeasance, covenant defeasance or satisfaction and discharge of the indenture governing the 2025 Notes.

Shelf Registration

Under a registration statement on Form S-3, Koppers Holdings may sell a combination of securities, including common stock, debt securities, preferred stock, depository shares, warrants, purchase contracts and units, from time to time in one or more offerings. In addition, Koppers Inc. may sell debt securities from time to time under the registration statement. Debt securities may be fully and unconditionally guaranteed, on a joint and several basis, by Koppers Holdings, Koppers Inc. and/or each of Koppers Inc.’s 100 percent-owned material domestic subsidiaries other than Koppers Assurance, Inc. The domestic guarantor subsidiaries are the same as those which guarantee the 2025 Notes. Non-guarantor subsidiaries are owned directly or indirectly by Koppers Inc. or are owned directly or indirectly by Koppers World-Wide Ventures Corporation. The guarantor subsidiaries that issue guarantees, if any, will be determined when a debt offering actually occurs under the registration statement and accordingly, the condensed consolidating financial information for subsidiary guarantors will be revised to identify the subsidiaries that actually provided guarantees. These guarantees will be governed pursuant to a supplement indenture which the trustee and the issuing company would enter into concurrent with the debt offering.

Reliance of Koppers Holdings on Earnings of Koppers Inc. and its Subsidiaries

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 Revolving Credit Facility prohibits Koppers Inc. from making dividend payments to Koppers Holdings unless (1) such dividend payments are permitted by the indenture governing Koppers Inc.’s 2025 Notes, (2) no event of default or potential default has occurred or is continuing under the credit agreement, 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 applicable indenture, is not able to incur additional indebtedness (as defined in the applicable indenture), and (3) the sum of all restricted payments (as defined in the applicable indenture) have exceeded the permitted amount (which we refer to as the “basket”) at such point in time.

The Koppers Inc. Revolving Credit Facility provides for a revolving credit facility of up to $400.0 million at variable rates. Borrowings under the Revolving Credit Facility are secured by a first priority lien on substantially all of the assets of Koppers Inc. and its material domestic subsidiaries. The Revolving Credit Facility contains certain covenants for Koppers Inc. and its restricted subsidiaries that limit capital expenditures, additional indebtedness, liens, dividends and investments or acquisitions. 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 June 30, 2017, Koppers Inc.’s assets exceeded its liabilities by $72.0 million. There are no net assets unavailable for distribution to Koppers Holdings Inc. by Koppers Inc. as of June 30, 2017. Cash dividends paid to Koppers Holdings Inc. by its subsidiaries totaled $2.0 million and $0.7 million for the six months ended June 30, 2017 and 2016, respectively.

Condensed Consolidating Statement of Operations

For the Three Months Ended June 30, 2017

	Parent			Koppers Inc.			Domestic Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
(Dollars in millions)
Net sales	$	0.0		$	153.2		$	94.2		$	151.8		$	(21.2	)	$	378.0
Cost of sales including depreciation and amortization		0.0			141.9			65.1			123.0			(21.5	)		308.5
Selling, general and administrative		0.5			11.3			10.1			10.0			0.0			31.9
Operating profit (loss)		(0.5	)		0.0			19.0			18.8			0.3			37.6
Other income		0.0			0.1			0.6			0.3			(0.3	)		0.7
Equity income (loss) of subsidiaries		20.0			25.5			12.9			(0.1	)		(58.3	)		0.0
Interest expense		0.0			10.0			(0.1	)		1.2			(0.3	)		10.8
Income taxes		(0.2	)		(4.4	)		7.2			4.0			0.0			6.6
Income from continuing operations		19.7			20.0			25.4			13.8			(58.0	)		20.9
Discontinued operations		0.0			0.0			0.0			(1.1	)		0.0			(1.1	)
Noncontrolling interests		0.0			0.0			0.0			0.1			0.0			0.1
Net income attributable to Koppers	$	19.7		$	20.0		$	25.4		$	12.6		$	(58.0	)	$	19.7
Comprehensive income attributable to Koppers	$	24.5		$	24.8		$	29.9		$	18.5		$	(73.2	)	$	24.5

Condensed Consolidating Statement of Operations

For the Three Months Ended June 30, 2016

	Parent			Koppers Inc.		Domestic Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
(Dollars in millions)
Net sales	$	0.0		$	181.6	$	87.3	$	142.3		$	(26.1	)	$	385.1
Cost of sales including depreciation and amortization		0.0			167.8		63.6		117.6			(26.1	)		322.9
Selling, general and administrative		0.3			10.9		4.2		14.8			0.0			30.2
Operating profit (loss)		(0.3	)		2.9		19.5		9.9			0.0			32.0
Other income		0.0			0.0		0.7		0.1			(0.4	)		0.4
Equity income of subsidiaries		12.4			26.3		6.0		0.0			(44.7	)		0.0
Interest expense		0.0			13.7		0.0		1.0			(0.4	)		14.3
Income taxes		0.0			2.8		0.3		3.7			0.0			6.8
Income from continuing operations		12.1			12.7		25.9		5.3			(44.7	)		11.3
Noncontrolling interests		0.0			0.0		0.0		(0.8	)		0.0			(0.8	)
Net income attributable to Koppers	$	12.1		$	12.7	$	25.9	$	6.1		$	(44.7	)	$	12.1
Comprehensive income attributable to Koppers	$	10.9		$	11.3	$	24.8	$	3.6		$	(39.7	)	$	10.9

Condensed Consolidating Statement of Operations

For the Six Months Ended June 30, 2017

	Parent			Koppers Inc.			Domestic Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
(Dollars in millions)
Net sales	$	0.0		$	304.1		$	175.4	$	288.2		$	(43.1	)	$	724.6
Cost of sales including depreciation and amortization		0.0			290.0			119.1		228.8			(41.4	)		596.5
Selling, general and administrative		1.0			22.2			20.3		19.4			0.0			62.9
Operating profit (loss)		(1.0	)		(8.1	)		36.0		40.0			(1.7	)		65.2
Other income		0.0			0.2			1.2		1.8			(0.5	)		2.7
Equity income (loss) of subsidiaries		24.9			51.8			30.3		(0.1	)		(106.9	)		0.0
Interest expense		0.0			19.7			0.0		2.1			(0.4	)		21.4
Loss on extinguishment of debt		0.0			13.3			0.0		0.0			0.0			13.3
Income taxes		(0.2	)		(14.0	)		13.7		8.1			0.0			7.6
Income from continuing operations		24.1			24.9			53.8		31.5			(108.7	)		25.6
Discontinued operations		0.0			0.0			0.0		(1.2	)		0.0			(1.2	)
Noncontrolling interests		0.0			0.0			0.0		0.3			0.0			0.3
Net income attributable to Koppers	$	24.1		$	24.9		$	53.8	$	30.0		$	(108.7	)	$	24.1
Comprehensive income attributable to Koppers	$	36.5		$	37.4		$	65.8	$	42.0		$	(145.2	)	$	36.5

Condensed Consolidating Statement of Operations

For the Six Months Ended June 30, 2016

	Parent			Koppers Inc.			Domestic Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
(Dollars in millions)
Net sales	$	0.0		$	349.5		$	167.3	$	262.7		$	(47.6	)	$	731.9
Cost of sales including depreciation and amortization		0.0			335.8			121.9		222.8			(48.9	)		631.6
Selling, general and administrative		0.8			20.9			14.2		24.6			0.0			60.5
Operating profit (loss)		(0.8	)		(7.2	)		31.2		15.3			1.3			39.8
Other income		0.0			0.1			2.7		0.1			(0.9	)		2.0
Equity income of subsidiaries		11.6			43.5			8.1		0.0			(63.2	)		0.0
Interest expense		0.0			25.1			0.0		2.4			(0.9	)		26.6
Income taxes		0.0			(0.6	)		0.4		6.5			0.0			6.3
Income from continuing operations		10.8			11.9			41.6		6.5			(61.9	)		8.9
Discontinued operations		0.0			0.0			0.0		0.6			0.0			0.6
Noncontrolling interests		0.0			0.0			0.0		(1.3	)		0.0			(1.3	)
Net income attributable to Koppers	$	10.8		$	11.9		$	41.6	$	8.4		$	(61.9	)	$	10.8
Comprehensive income attributable to Koppers	$	18.8		$	19.5		$	49.3	$	12.2		$	(81.0	)	$	18.8

Condensed Consolidating Balance Sheet

June 30, 2017

	Parent		Koppers Inc.		Domestic Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated
(Dollars in millions)
ASSETS
Cash and cash equivalents	$	0.0	$	0.0	$	0.0		$	40.0	$	0.0		$	40.0
Receivables, net		0.0		62.1		36.7			85.8		0.0			184.6
Affiliated receivables		0.0		15.9		1.5			12.7		(30.1	)		0.0
Inventories, net		0.0		86.7		39.6			105.9		(2.5	)		229.7
Other current assets		0.0		6.4		17.9			22.1		0.3			46.7
Total current assets		0.0		171.1		95.7			266.5		(32.3	)		501.0
Equity investments		70.5		761.2		231.1			0.0		(1,062.8	)		0.0
Property, plant and equipment, net		0.0		140.5		44.6			118.3		0.0			303.4
Goodwill		0.0		0.8		153.1			34.0		0.0			187.9
Intangible assets, net		0.0		7.7		104.4			24.1		0.0			136.2
Deferred tax assets		0.0		29.6		(8.7	)		5.8		0.0			26.7
Affiliated loan receivables		0.0		34.0		217.8			21.2		(273.0	)		0.0
Other assets		0.0		4.6		3.3			5.2		0.1			13.2
Total assets	$	70.5	$	1,149.5	$	841.3		$	475.1	$	(1,368.0	)	$	1,168.4
LIABILITIES AND EQUITY
Accounts payable		0.1		62.9		42.3			43.1		0.0			148.4
Affiliated payables		1.5		10.7		7.5			10.4		(30.1	)		0.0
Accrued liabilities		0.0		52.2		14.9			49.3		0.0			116.4
Current maturities of long-term debt		0.0		0.1		0.0			12.4		0.0			12.5
Total current liabilities		1.6		125.9		64.7			115.2		(30.1	)		277.3
Long-term debt		0.0		655.4		0.0			25.1		0.0			680.4
Affiliated debt		0.0		221.5		17.1			34.4		(273.0	)		0.0
Other long-term liabilities		0.0		74.7		14.2			48.2		0.0			137.2
Total liabilities		1.6		1,077.5		96.0			222.9		(303.1	)		1,094.9
Koppers shareholders’ equity		68.9		72.0		745.3			247.6		(1,064.9	)		68.9
Noncontrolling interests		0.0		0.0		0.0			4.6		0.0			4.6
Total liabilities and equity	$	70.5	$	1,149.5	$	841.3		$	475.1	$	(1,368.0	)	$	1,168.4

Condensed Consolidating Balance Sheet

December 31, 2016

	Parent		Koppers Inc.		Domestic Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Consolidating Adjustments			Consolidated
(Dollars in millions)
ASSETS
Cash and cash equivalents	$	0.0	$	0.0	$	0.0		$	20.8	$	0.0		$	20.8
Receivables, net		0.0		50.8		25.4			64.4		0.0			140.6
Affiliated receivables		0.7		34.8		32.2			15.4		(83.1	)		0.0
Inventories, net		0.0		106.6		23.9			99.0		(0.8	)		228.7
Other current assets		0.0		5.1		13.4			29.2		0.3			48.0
Total current assets		0.7		197.3		94.9			228.8		(83.6	)		438.1
Equity investments		29.9		697.4		195.4			0.0		(922.7	)		0.0
Property, plant and equipment, net		0.0		126.7		39.6			114.5		0.0			280.8
Goodwill		0.0		0.8		153.1			32.5		0.0			186.4
Intangible assets, net		0.0		7.9		107.1			26.9		0.0			141.9
Deferred tax assets		0.0		29.7		(8.4	)		5.8		0.0			27.1
Affiliated loan receivables		0.0		36.9		205.3			21.9		(264.1	)		0.0
Other assets		0.0		5.5		6.1			1.6		0.0			13.2
Total assets	$	30.6	$	1,102.2	$	793.1		$	432.0	$	(1,270.4	)	$	1,087.5
LIABILITIES AND EQUITY
Accounts payable	$	0.2	$	69.6	$	38.9		$	35.5	$	0.0		$	144.2
Affiliated payables		0.0		46.0		20.7			24.5		(91.2	)		0.0
Accrued liabilities		0.0		49.5		18.9			37.9		0.0			106.3
Current maturities of long-term debt		0.0		30.2		0.0			12.4		0.0			42.6
Total current liabilities		0.2		195.3		78.5			110.3		(91.2	)		293.1
Long-term debt		0.0		592.0		0.0			27.8		0.0			619.8
Affiliated debt		0.0		209.9		23.5			30.7		(264.1	)		0.0
Other long-term liabilities		0.0		75.0		11.6			53.4		0.0			140.0
Total liabilities		0.2		1,072.2		113.6			222.2		(355.3	)		1,052.9
Koppers shareholders’ equity		30.4		30.0		679.5			205.6		(915.1	)		30.4
Noncontrolling interests		0.0		0.0		0.0			4.2		0.0			4.2
Total liabilities and equity	$	30.6	$	1,102.2	$	793.1		$	432.0	$	(1,270.4	)	$	1,087.5

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 30, 2017

	Parent			Koppers Inc.			Domestic Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
(Dollars in millions)
Cash provided by (used in) operating activities	$	3.3		$	(8.4	)	$	26.4		$	12.0		$	(2.0	)	$	31.3
Cash provided by (used in) investing activities:
Capital expenditures and acquisitions		0.0			(23.1	)		(8.0	)		(3.1	)		0.0			(34.2	)
Repayments (loans to) from affiliates		0.0			2.9			(12.5	)		0.7			8.9			0.0
Repayment of loan		0.0			0.0			0.0			9.5			0.0			9.5
Net cash provided by divestitures and asset sales		0.0			0.0			0.5			0.3			0.0			0.8
Net cash (used in) provided by investing activities		0.0			(20.2	)		(20.0	)		7.4			8.9			(23.9	)
Cash provided by (used in) financing activities:
Borrowings (repayments) of long-term debt		0.0			30.0			0.0			(4.0	)		0.0			26.0
Borrowings (repayments) of affiliated debt		0.0			11.6			(6.4	)		3.7			(8.9	)		0.0
Debt issuance costs		0.0			(11.0	)		0.0			0.0			0.0			(11.0	)
Dividends paid		0.0			(2.0	)		(0.0	)		0.0			2.0			0.0
Stock repurchased		(3.3	)		0.0			0.0			0.0			0.0			(3.3	)
Net cash provided by (used in) financing activities		(3.3	)		28.6			(6.4	)		(0.3	)		(6.9	)		11.7
Effect of exchange rates on cash		0.0			0.0			0.0			0.1			0.0			0.1
Net increase in cash and cash equivalents		0.0			0.0			0.0			19.2			0.0			19.2
Cash and cash equivalents at beginning of year		0.0			0.0			0.0			20.8			0.0			20.8
Cash and cash equivalents at end of period	$	0.0		$	0.0		$	0.0		$	40.0		$	0.0		$	40.0

Condensed Consolidating Statement of Cash Flows

For the Six Months Ended June 30, 2016

	Parent			Koppers Inc.			Domestic Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated
(Dollars in millions)
Cash provided by (used in) operating activities	$	0.2		$	(2.6	)	$	47.5		$	9.0		$	(19.8	)	$	34.3
Cash provided by (used in) investing activities:
Capital expenditures and acquisitions		0.0			(14.4	)		(1.5	)		(5.4	)		0.0			(21.3	)
Repayments (loans to) from affiliates		0.0			(5.1	)		(21.3	)		(0.5	)		26.9			0.0
Net cash proceeds from divestitures and asset sales		0.0			0.1			0.4			0.1			0.0			0.6
Net cash (used in) provided by investing activities		0.0			(19.4	)		(22.4	)		(5.8	)		26.9			(20.7	)
Cash provided by (used in) financing activities:
Repayments of long-term debt		0.0			(13.1	)		0.0			0.2			0.0			(12.9	)
Borrowings (repayments) of affiliated debt		0.0			37.1			(6.6	)		(3.6	)		(26.9	)		0.0
Dividends paid		0.0			(0.7	)		(19.1	)		0.0			19.8			0.0
Stock repurchased		(0.2	)		0.0			0.0			0.0			0.0			(0.2	)
Net cash provided by (used in) financing activities		(0.2	)		21.9			(25.7	)		(3.4	)		(7.1	)		(14.5	)
Effect of exchange rates on cash		0.0			0.0			0.0			(4.5	)		0.0			(4.5	)
Net decrease in cash and cash equivalents		0.0			(0.1	)		(0.6	)		(4.7	)		0.0			(5.4	)
Cash and cash equivalents at beginning of year		0.0			0.1			0.7			21.0			0.0			21.8
Cash and cash equivalents at end of period	$	0.0		$	0.0		$	0.1		$	16.3		$	0.0		$	16.4