Koppers Holdings Inc.KOP
Koppers Holdings Inc. Goodwill & Intangibles Disclosure
Goodwill and Intangible Assets
Goodwill and other purchased intangible assets are included in the identifiable assets of the business segment to which they have been assigned. Goodwill is assessed for impairment annually, using a quantitative goodwill impairment test, or more frequently if a change in circumstances or the occurrence of significant events indicate the carrying value may not be recoverable. In making this assessment, management may first consider qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Examples of qualitative factors
include macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, entity-specific events, events affecting reporting units, and sustained changes in our stock price.
If results of the qualitative assessment indicate a more likely than not determination or if a qualitative assessment is not performed, a quantitative test is performed utilizing a combination of an income approach, using a discounted cash flow methodology, and a market approach, by comparing the estimated fair value of each reporting unit with its net book value. The discounted cash flow calculations are dependent on several key assumptions including the timing of future forecasted cash flows, forecasted revenue growth rates, forecasted EBITDA margin and the discount rate. The market approach uses the guideline company method, which involves calculating valuation multiples based on financial data from comparable publicly traded companies. Multiples derived from these companies provide an indication of how much a knowledgeable investor in the marketplace would be willing to pay for a company. These multiples are then applied to the financial data for our reporting units to arrive at an indication of value. To determine the reasonableness of the calculated fair values of our reporting units, we review the assumptions described to ensure neither the market approach nor the income approach yields significantly different valuations. We selected these valuation approaches because we believe the combination of these approaches, along with our best judgment regarding underlying assumptions and estimates, provides us with the best estimate of fair value of our reporting units.
We perform an assessment of goodwill at the reporting unit level. We have three reporting units for purposes of goodwill evaluation. These units consist of our PC operating segment, our Railroad Products and Services reporting unit and our Utility Products reporting unit. Railroad Products and Services and Utility Products are one level below our RUPS operating segment. The Railroad Products and Services reporting unit primarily serves the rail industry in North America, and the Utility Products reporting unit serves the utility industries in the United States and Australia. For each of the three years ended December 31, 2025, we determined that the estimated fair values exceeded the carrying values of all the reporting units, and accordingly, goodwill was not impaired.
The change in the carrying amount of goodwill attributable to each reporting unit was as follows:
| Performance Chemicals | Railroad Products and Services | Utility Products | Total | |||||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | 173.8 | $ | 41.0 | $ | 79.6 | $ | 294.4 | ||||||||||||||||||
| Acquisitions | 0.0 | 0.0 | 25.3 | 25.3 | ||||||||||||||||||||||
| Currency translation | (2.3) | (0.1) | (0.2) | (2.6) | ||||||||||||||||||||||
| Balance at December 31, 2024 | $ | 171.5 | $ | 40.9 | $ | 104.7 | $ | 317.1 | ||||||||||||||||||
| Acquisitions | 0.0 | 0.0 | 11.7 | 11.7 | ||||||||||||||||||||||
| Divestitures | 0.0 | (1.2) | 0.0 | (1.2) | ||||||||||||||||||||||
| Currency translation | 1.5 | 0.0 | 0.3 | 1.8 | ||||||||||||||||||||||
| Balance at December 31, 2025 | $ | 173.0 | $ | 39.7 | $ | 116.7 | $ | 329.4 | ||||||||||||||||||
Intangible assets, other than goodwill, are recorded at fair value and amortized on a straight-line basis over their estimated useful lives. We annually evaluate the remaining useful life of the intangible asset being amortized to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of an intangible asset’s remaining useful life is changed, the remaining carrying amount of the intangible asset will be amortized prospectively over that revised remaining useful life. Intangible assets are also subject to testing for recoverability whenever events or changes indicate that its carrying value may not be recoverable.
Our intangible assets are summarized below:
| December 31, | |||||||||||||||||||||||||||||||||||||||||
| Weighted average remaining life in years | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||
| Estimated life in years | Gross Carrying Amount | Accumulated Amortization | Net | Gross Carrying Amount | Accumulated Amortization | Net | |||||||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||||||||
| Customer contracts | 9 to 18 | 8.5 | $ | 246.0 | $ | 142.3 | $ | 103.7 | $ | 255.0 | $ | 138.6 | $ | 116.4 | |||||||||||||||||||||||||||
| Technology | 4 to 12 | 0.6 | 26.3 | 26.2 | 0.1 | 26.3 | 26.1 | 0.2 | |||||||||||||||||||||||||||||||||
| Trademarks | 4 to 18 | 8.2 | 9.9 | 7.0 | 2.9 | 9.2 | 6.8 | 2.4 | |||||||||||||||||||||||||||||||||
| Supply contracts | 10 | 0 | 2.5 | 2.5 | 0.0 | 2.2 | 2.2 | 0.0 | |||||||||||||||||||||||||||||||||
| Non-compete agreements | 12 | 0 | 1.6 | 1.6 | 0.0 | 1.6 | 1.6 | 0.0 | |||||||||||||||||||||||||||||||||
| Total | 8.3 | $ | 286.3 | $ | 179.6 | $ | 106.7 | $ | 294.3 | $ | 175.3 | $ | 119.0 | ||||||||||||||||||||||||||||
In 2025, the gross carrying value of intangible assets decreased by a net $8.0 million, due primarily to the KRS divestiture, partly offset by the Greenhill acquisition, both described in Note 3 and foreign exchange translation. Total amortization expense related to these intangible assets was $16.0 million, $15.8 million and $14.5 million for the years ended December 31, 2025, 2024 and 2023, respectively. Estimated amortization expense for the next five years is summarized below:
| Estimated annual amortization | ||||||||
| (Dollars in millions) | ||||||||
| 2026 | $ | 14.6 | ||||||
| 2027 | 14.3 | |||||||
| 2028 | 13.5 | |||||||
| 2029 | 13.3 | |||||||
| 2030 | 13.2 | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 27, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 29, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.