Good morning ladies and gentlemen. Thank you for standing by. Welcome to Koppers Second Quarter 2023 Earnings Conference Call and Webcast. At this time, all participants are in listen-only mode. Please note that this event is being recorded. I will now turn the call over to Quynh McGuire. Please go ahead.

Thanks and good morning. I'm Quynh McGuire, Vice President of Investor Relations. Welcome to our second quarter 2023 earnings conference call. We issued our press release earlier today. You may access it on our website at www.koppers.com. As indicated in our announcement, we've also posted materials to the Investor Relations page of our website that will be referenced in today's call. Consistent with our practice in prior quarterly conference calls, this is being broadcast live on our website and a recording of this call will be available on our website for replay through November 3rd, 2023. At this time, I would like to direct your attention to our forward-looking disclosure statements seen on slide two. Certain comments made on this conference call may be characterized as forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a number of assumptions, risks, and uncertainties including risks described in the cautionary statement included in our press release and in the company's filings with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking statements included in the company's comments, you should not regard the inclusion of such information as a representation that its objectives, plans, and projected results will be achieved. The company assumes no obligation to update any forward-looking statements made during this call. References may also be made to certain non-GAAP financial measures. The company has provided with its press release and the slides referenced during this call reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures. Joining me for our call today are Leroy Ball, President and CEO of Koppers; and Jimmi Smith, Chief Financial Officer. I'll now turn this discussion over to Leroy.

Thank you, Quynh. Good morning everyone. Thanks for joining us today. We have a lot of great information to cover. It was a great quarter and a lot I want to discuss in terms of things to come. But why don't we just kick things off by starting on slide three where I want to remind everybody that Koppers is going to be hosting an Investor Day scheduled for Thursday, September 14th, 2023 at the Intercontinental Hotel in Chicago and also we have some activities planned for Wednesday, September 13th which will include a baseball game that evening to allow for some additional interaction between the attendees and our senior management team. I very much hope that you'll be able to join us for as many of these events as possible. The Investor Day presentation will also be available virtually with a live webcast and for those attending virtually, you'll have the opportunity to participate in real-time in the question-and-answer session following the presentation and we'll provide a replay of the Investor Day event on our website as well. We look forward to providing further insights on our business, sharing updates on our strategic priorities and our longer-term outlook while emphasizing our focus on driving shareholder value. So, let's turn to reviewing the second quarter. There's a lot of positive developments happening at Koppers both in Q2 and 2023 in general. Now, before I go over some of the highlights, I want to start by saying that even under challenging market conditions, we continue to validate our unique vertically integrated business model, which serves a diverse mix of infrastructure and related markets that need our products and services. More or less the same blueprint we've been using to drive transformational improvement over the past nine years and by continuing to strategically expand and optimize our business model, we're capitalizing on new business opportunities as well as upgrading our operations network to increase capacity, improve efficiencies, and reduce costs. So lets move to some of the highlights for the second quarter on slide five. We achieved consolidated sales of $577 million, an all-time record quarter and the seventh consecutive record for current quarter sales. We generated adjusted EBITDA of $70 million, a record quarter in profitability and from a GAAP accounting standpoint, the second quarter was the second straight quarter that we reached a new quarterly high for operating profit. Adjusted EBITDA margin was 12.2%, a nice improvement from the 10.9% margin in the prior year period. Diluted earnings per share were $1.15 compared with $0.55 from the prior year and adjusted earnings per share were $1.26 exceeding the $0.97 in the prior year quarter. And although not on the slide, to-date through June 30th, we used $2.1 million of cash from operations, which is a little behind where we would typically be through the first six months of the year. Higher cash interest and higher working capital kept operating cash flow below historical norms, but I still believe that we'll finish the year over the $100 million mark and be somewhere close to our capital spend total for the year. Speaking of capital deployment, we deployed $71 million of cash in the first half with $37 million going to required maintenance and zero harm capital expenditures, $34 million going to discretionary spend items such as $26 million on growth and productivity capital projects, $2.5 million on dividends, and just under $6 million on share repurchases. I would like to extend sincere thanks to our Koppers team across the globe for continuously exceeding expectations no matter the challenges faced, and at the same time maintaining their unrelenting focus on safety, service, quality, and reliability, which provides an ongoing formula for our success. Next, let's take a look at the progress being made with our Zero Harm 2.0 platform. Slide seven shows that 27 out of our 45 operating facilities worked accident-free in the second quarter along with a 25% reduction in recordable injuries. Zero Harm 2.0 represents a reenergizing of engagement among our frontline employees and accelerating our progress toward zero. Our UIP leadership team has now completed their training and Zero Harm foundations and observations and year-to-date through June 30, the recordable injury rate for UIP has dropped an impressive 75% year-over-year. Congratulations to the entire UIP organization for living our Zero Harm culture. Our managers and frontline supervisors are starting to receive training on incident investigation and reporting which are important in identifying and preventing unsafe situations and reducing risk of injury and as of June 30, every frontline employee has completed training and peer-to-peer safety observations. This training reinforces the idea that colleagues who care about each other's safety can be one of the most powerful influences in strengthening the zero-harm culture. As a result, our leading activities year-to-date through June 30 increased by 38% compared with the prior year, which helps to decrease serious safety incidents. Zero Harm topics are discussed globally during monthly toolbox talks which deliver brief training to employees by their direct supervisors at our facilities. The ideal atmosphere for these discussions is small groups where people feel comfortable asking questions or bringing up topics that might be tougher for them to discuss in larger groups. During the past several months, we featured various life-saving rules as well as the video of me discussing our safety-focused culture with Joe Dowd, our Vice President of Zero Harm. As always, the safety and well-being of our employees and our communities remain a core principle of our zero-harm culture. I'll now turn the discussion over to our Chief Financial Officer, Jimmi Sue Smith. Jimmi Sue?

Thanks, Leroy. The press release issued earlier today detailed our second quarter 2023 results. My comments this morning are based on that information. So starting on Slide 9, second quarter consolidated sales were a record $577 million, up $75 million or 15% over the second quarter of 2022. By segment, rough sales increased $30 million or 15% from the prior year quarter. PC sales increased $31 million or 21% and CM&C sales increased $13 million or 9%. On Slide 10, adjusted EBITDA was also a quarterly record of $70 million with a 12% margin. By segment RUPS generated EBITDA of $22 million and 9.5% margin, PC had EBITDA of $32 million and 17.9% and CM&C had EBITDA of $16 million with a 9.7% margin. Moving on to Slide 11, our RUPS business generated record sales of $234 million compared with $204 million in the prior year quarter. Sales growth was primarily driven by $20.3 million of price increases across multiple markets, particularly for crossties and utility poles in the United States. Higher volumes for crossties and utility poles also contributed to the sales increase. From a procurement perspective, market prices for untreated crossties remain relatively high, but they are stabilizing and as a result crosstie procurement was higher by 46% compared to the second quarter of last year, while crossties treatment increased by 3% versus the prior year quarter. Adjusted EBITDA for RUPS was $22 million, up from $13 million in the prior year, driven by price increases and $6.5 million in improved plant utilization, partly offset by higher raw material and operating costs. It's worth noting that the domestic utility and industrial products division of this business achieved record quarter sales and record adjusted EBITDA and margin contributing significantly to the overall performance for RUPS. On Slide 12, our Performance Chemicals business delivered record quarter sales of $181 million, up from $150 million in the second quarter of 2022. The year-over-year sales growth was a result of global price increases of $21 million, particularly in the Americas for our Kopper-based preservatives. In addition, we saw an 8% increase in volumes globally driven by the Americas partly offset by volume decreases in Europe and Australasia. Adjusted EBITDA for PC in the second quarter was $32 million, up from $20 million in the prior year quarter. Year-over-year profitability increased as a result of our renegotiated customer contracts which allowed for increased pricing in order to recapture prior year cost increases. Our profitability also benefited from higher overall volumes partly offset by higher raw material costs. Our team at PC has worked hard to successfully return that business to normalized levels of EBITDA margin at 18% both for the quarter and the first half of 2023. Slide 13 shows CM&C second quarter sales of $162 million compared with $149 million in the prior year. Sales were higher as a result of $7.2 million in price increases as well as higher volumes of refined tar in North America. This was partly offset by price decreases for certain other products and volume decreases in phthalic anhydride in North America. Adjusted EBITDA for CM&C in the second quarter was $16 million compared with $21 million in the prior year quarter. The year-over-year decrease in profitability reflects higher raw material costs of $17.2 million, particularly in Europe and North America. This was partly offset by higher pricing as well as higher volumes in North America driving improved plant utilization. Compared with the first quarter of 2023, the average pricing of major products decreased 4% and average coal tar costs were higher by 7% compared with the prior year quarter, the average pricing of major products increased by 4% while average coal tar costs were up by 24%. Slide 15 outlines our continued commitment to a balanced capital allocation approach that includes investment in the business, returning capital to shareholders through dividends and share repurchases and reducing leverage as appropriate. At June 30, 2023, we had $858 million of net debt and $300 million in available borrowing capacity. Our net leverage ratio at June 30 was 3.4 times. Long term, we continue to target a two to three times net leverage ratio. On slide 16, total capital expenditures through the second quarter of 2023 were approximately $63 million or $61 million net of cash proceeds. By category, we spent $27 million on maintenance, $10 million on Zero Harm and $26 million on growth and productivity projects. By segment, we spent $29 million on RUPS, $4.5 million on PC, $28.5 million on CM&C, and $1 million on corporate initiatives. Finally, on slide 18, as previously announced, our Board of Directors declared a quarterly cash dividend of $0.06 per share of Koppers' common stock to be paid on September 11, 2023, to shareholders of record as of the close of trading on August 25, 2023. At this quarterly dividend rate, subject to the review by the Board of Directors, the annual dividend will be $0.24 per share for 2023. And with that, I'll turn it back over to Leroy.

Thanks, Jimmi Sue. Moving on to the notable happenings at Koppers, slide 20 provides highlights from our recent trip to Newport, Denmark. I was last here in 2019 and a lot has changed since then. I really enjoyed being at the plant and getting valuable feedback from our employees who love to show me all they've been up to since my last visit. Their pride in their performance is completely justified, as that location consistently ranks among the safest, most efficient, and productive sites anywhere in Koppers. Our Newborn facility is an impressive operation and represents a model to which all our facilities should aspire to be. It was exciting to see the progress on our enhanced carbon products plant, which is expected to begin commissioning this quarter. At its most basic level, our enhanced carbon products plant will enable us to reprocess product generated for low-value markets and create a higher-value product to be sold at a much higher price point. Longer term, we have the ability to produce even higher value products including some that would have applications as a high-quality battery coating for the electric vehicle market. We've already received several patents for our enhanced carbon products portfolio, with others in the pipeline. It is a testament to the ingenuity of our CMC technical team and a broad-based commercial team that continues to move the ball forward quietly and methodically in this area. It will be exciting when the new facility is officially in production at the beginning of next year. Thanks again to all the Newport crew for all the planning and work that went into making my time there an amazing and meaningful visit. Slide 21 shows our 2022 corporate sustainability report, which was issued in June. The report details our pursuit of goals supporting our company's values of people, planet, and performance. Some of the 2022 highlights included in the report are, reducing our total recordable rate of reportable injuries by 5%, expanding our investment in career growth and continuing education opportunities for employees at all levels of the organization, increasing the diversity of our leadership team, and reducing our Scope 1 and 2 emissions by almost half from our 2007 baseline. Those are just a few of the many accomplishments that supported our financial performance, which also grew in 2022, once again showing that profitability and sustainability are both a winning proposition. In addition, last week, we released the inaugural Koppers Taskforce on Climate-related Financial Disclosures report, a globally recognized reporting structure developed by the Financial Stability Board. The report discloses climate-related risks and opportunities across four primary categories: governance, strategy, risk management, and metrics and targets, and provides a common framework intended to make climate-related disclosures more consistent and comparable across companies. Producing our first voluntary TCFD report represents an important step for Koppers in learning more about the risks to our businesses and opportunities for improvement. With each successive year, our culture of sustainability becomes more rooted in all aspects of our business, as it should be, and as we continue introducing sustainable operations into our DNA, we are gaining even greater recognition for our progress. Turning to page 22 and you can see what I'm talking about. In addition to making Newsweek's list of most responsible companies for the third straight year, which we announced earlier this year, we were recently named to USA TODAY's first-ever list of America's climate leaders. We also learned in July that Koppers Australia moved up to silver status from bronze in the Sustainability Advantage program run by the New South Wales EPA, due to measurable improvements in areas of sustainability, such as energy efficiency, greenhouse gas reduction, and resource efficiency. Koppers has also recently moved up the charts of two third-party sustainability raters. MSCI moved us to AA rating from an A rating, which puts us in the top 8% of commodity chemical companies and our score with Eco Vadis improved from the 56th percentile to the 75th percentile, also moving us up to silver status from bronze in their rating system. At Koppers, we know that running a sustainable organization is critical in all aspects and can also be a competitive advantage as more customers are seeking companies like ours to be their business partner. Keeping our values of people, planet, and performance at the forefront of all we do ensures we never lose sight of what's important. Moving on, in February, I outlined what I felt were the keys to success in reaching our 2023 adjusted EBITDA goal of $250 million. In May, I gave an update on our progress through March and we'll now provide a current update on where we stand through June. The bottom line is that while everything hasn't gone perfectly in each of the key areas, the net result has been more positive than negative, which keeps us on a confident path to not only reaching our $250 million in adjusted EBITDA goal for this year, but also $275 million in 2024 and $300 million or better in 2025. Starting on slide 24 with Performance Chemicals. The first and most important key to success this year was realizing price increases without a major loss of market share. In February, I mentioned that we had enacted major price increases effective as of the start of the year that should net us over $60 million of top-line improvement and recapture the costs that we had absorbed throughout much of 2022. Through six months we continue to track better than original expectations as we realized $46 million of price increases across our global sales network correlating to a 16% increase over our first half 2022 sales. In addition, our volume losses have been manageable. We've also picked up some new business that helps us slightly reduce our customer concentration risk across a broader customer base. This is an area where we're scoring ahead of expectations and should see the benefits continue to build throughout the year. The second key to success for PC in 2023 is residential demand not declining greater than 10% due to a downturn in the economy. Coming into the year, we modeled a 5% to 10% decline in year-over-year base volumes and that excludes any net gains or losses in share, which to-date have been flat to slightly negative. Now, through the first six months, overall volumes were up 6.5% over the same period last year and factoring out a small net market share loss would actually have organic volumes up between 6.5% to 10%. While we feel good about those numbers, we expect things to cool off a bit in the back half of the year, and overall volumes for the year to come in closer to flat compared to 2022. The leading indicators for this business have not really improved since the last quarter as existing home sales are still struggling, down again in June and year-over-year down 18.9%. The leading indicator of remodeling activity continues to project the deceleration in spending that began in the third quarter of 2022 to continue at least through the second quarter of 2024, which is as far out as they project. Even worse, LIRA has spending for the first and second quarter of next year actually contracting compared to the similar 2023 period, marking the first time that's happened in 10 years. Yet against that backdrop, volumes continue to remain solid. Why? Well, there are a couple of positive things to point to that might explain some of the answer. The first is that while higher interest rates in an uncertain economy have had a negative impact on existing home sales, the rapid change in rates has led many people to forgo the thoughts of upgrading to a new home and instead put money into their current home, accepting that they may be there for several more years. Another positive making it easier to decide to improve current homes comes in the cost of treated wood, which has subsided considerably since peaking at different periods in 2021 and 2022. Treated lumber, which our preservatives protect and extend the life of, has emerged as one of the most reasonably priced products today versus a year ago. The final key to success for PC in 2023 is that Koppers' preservatives such as CCA and DCI are replacing the non-copper produced industrial chemical Penta, which is currently being phased out after losing its US EPA and Canadian registrations. In 2022, we experienced a 33% increase in our industrial sales volumes and through the first six months of this year we've seen a volume bump of 13% over the prior year. Even with that kind of growth, we're tracking a little below our internal projections for the year, but the overall story remains positive. We expect this trend to continue as industrial demand looks to remain strong from increased infrastructure spending, which also benefits our Utility and Industrial Products business. Speaking of UIP which is a division of our RUPS segment, as seen on slide 25 we continue to enjoy strong demand across the board, as already mentioned, and that's why it's important for our facilities to run uninterrupted to serve customer demand, which has happened for the most part. I mentioned back in May how we lost one of our dry kilns to a fire impacting our supply of dry wood, while driving up costs somewhat by replacing internal supply with third-party materials. Now so far we've managed to work through that challenge better than anticipated and even posted our most profitable quarter for UIP since it became part of Koppers. I give credit to our entire UIP team led by Jim Healey, who came together to produce one of the strongest performing quarters, with efficiency at each of the facilities at or near their peak, while operating more safely than ever. In the meantime, we continue to work to not just replace the damaged kiln, but also another end-of-life inefficient kiln in our operation that will add capacity. Both of these capital projects were approved by our Board in May and are expected to be operational in October 2023 and January 2024, helping our performances higher pricing that generated $20 million through the first six months, which made up for cost increases experienced over the past 18 months. It's hard to believe that through June we've already exceeded the full year 2022 profitability of this business which at the time represented an all-time best year for UIP. Back in February, I highlighted bringing the Leesville, Louisiana facility online as the second key to success in 2023 for UIP. But as I sit here today, this now represents a key to the improvement we expect to generate in 2024. Losing a kiln like we did in April caused us to rethink things. We already had a kiln constructed for Leesville awaiting site prep work prior to installation and knowing the unintended delays that can occur, we felt our best option was to take the kiln constructed for Leesville and divert it to our other site. As a result, we pushed the completion date for the Leesville project to January 2024, meaning the site won't have an impact on this year's results, and despite the delay, it will not affect our ability to exceed expectations for this year due to the overall strength of the market, the execution of our operations team, and the skills of our sales team to recoup cost increases from our customer base. The good news is the market for poles in Texas remains strong, which is what the Leesville site will feed. This project still represents a crucial piece to our ability to grow adjusted EBITDA to $275 million in 2024. In the Railroad Products and Services division or RUPS on slide 26, our first key to success for 2023 remains rebuilding our dry inventory as soon as possible, and we're still on pace to procure over 7 million ties, which represents our highest procurement year since 2015. And while we've made up ground on building our dry inventory this year, most of the increase occurred during Q1, with little progress made in Q2 as we fight to keep up with demand. For the year, dry inventory is up 20% but we need at least another 20% to 25% improvement to get to greater efficiency in the plants. We'll continue to chip away at this, but it may take a little longer than we had anticipated to reach the inventory levels we want. The second key for RPS is recouping the value of our creosote preservative in the market. We continue to work with our customer base on potential price adjustments to provide relief to what has become an untenable situation, and one of the largest reasons for our rough business underperformance over the last few years. I continue to acknowledge that for the rail industry to maintain a healthy supply chain across ties, it needs to pay a fair price for its preservative, as it is the preservative that brings the value to the tie, extending its life in service by 15 to 25 years beyond what would be left untreated. Through six months, we've realized $24 million in price increases across all of RPS, not just for Creosote. We need at least another $30 million or more in price increases to get this business back to a healthy level and we're actively working on that. The success of our utility pole business is currently overshadowing the financial underperformance in our railroad business, and while second quarter adjusted EBITDA margins for the total RUPS segment represent the second-best Q2 margin we've posted in the past six years. If you carve out just the rail portion, Q2 2023 adjusted EBITDA margins represent the worst Q2 margin that our stand-alone rail businesses had going back to 2009, and that has us on track for what would be a new low annual margin realized for that business, as we're tracking below the prior year low realized just last year. That said, I remain confident we can work something out on the pricing front that gets us to market because, as I've mentioned before, the alternative is that we will not remain in this business, which I don't think is good for the industry. We've been leaders on the sustainability front, which I've spoken about earlier in this presentation, and we've been responsive to helping to solve the industry's desire to find a more sustainable life cycle for end-of-life crossties, investing $65 million in our recovery business which has demonstrated its value. It's time we begin getting compensated fairly, or we'll have to recoup our investments in a different way. The final key outline for RPS success in 2023 is getting the North Little Rock expansion finished by mid-year. It's now August, and although we didn't meet the goal, we're not far off. One of our three new cylinders has been commissioned with the other two cylinders in the process in the third quarter. We're currently working through some of the bugs one would expect when bringing up a facility of this scale, and once fully operational will be the most efficient crosstie facility in North America when running at full capacity. We're also close to formalizing our commitment for the remaining capacity at the plant, and we have already begun buying untreated ties to be ready to treat for this customer next year. While this project will end up having a little impact on 2023 results at this point, it remains a key component of reaching our target of $300 million in adjusted EBITDA in 2025. Slide 27 features our Materials & Chemicals business. The first key to success in 2023 for CMC, as it is in almost every year, is managing through a challenging raw material market. These markets seem to be in a state of perpetual flux. But as I often mention, I don't think there's anyone better than our people at staying ahead of where markets are moving and capturing maximum value on the margin spread between our supply and the end markets. The drop in aluminum production in Europe due to curtailments has outpaced the pullback in steel and has caused a significant drop in both raw material costs and end market pricing in Europe. How long that dynamic remains in place remains to be seen, but it will cause pressure on results in our European business in the short term as we write down inventory to current market levels. In the US and Australasia current market dynamics are better to varying degrees, and we expect to be able to offset most of Europe's challenge over the remainder of the year. The second key for CM&C comes in continuing to push acceptance of petroleum blended products, which mitigates reductions in coal tar volumes. While we've had pretty good success in the acceptance of our hybrid pitch products, the adoption rate has been slower in the pavement sealer markets. In the US, there's been no shortage of coal tar-based pavement sealer products, so customers have not felt the pressure to bring in a new product. We're taking a longer-term view on petroleum blended products since the various markets we serve will eventually have to include other alternatives, and the work we're doing now to introduce them to the market will pay dividends in the future. The final key for CMC this year is seeing a demand environment not negatively impacted by recession and that's somewhat interdependent on the challenging raw material environment I spoke about earlier. As we enter 2023, we modeled similar year-over-year demand. Through six months, our volumes are down slightly, but industry volumes, particularly in Europe, are down much more than copper demand. This is because much of the aluminum capacity curtailed in the last year is based in Central and Southern Europe, which is an area primarily served by competitors, and that impact has created the mismatch and supply I mentioned earlier resulting in dropping raw material costs and end market pricing for Europe, which will have an impact on that region's profitability. Our other regions find themselves currently in a better balance. Overall, we feel we can mitigate most of the impact we might see in Europe's results. Moving to our 2023 guidance on Slide 29, our sales forecast for 2023 is approximately $2.1 billion compared with $1.98 billion in 2022 with RUPS and PC expected to see top line increases. For RUPS, it will be a combination of price and volume, and for PC, it will be priced and industrial volume growth. For CMC, it's expected to hold to the prior year sales level with slightly higher pricing offsetting slightly lower sales volumes. On Slide 30, our 2023 EBITDA projection remains at $250 million, which is where we currently stand on a trailing 12-month basis as of the midpoint of this year. On a comparable basis, this will be our ninth consecutive year of EBITDA growth and will be the largest year-over-year increase since 2015. While our forecast for consolidated adjusted EBITDA remains unchanged since May, we believe we'll get there due to stronger performance from our utility business, driving rough results higher than what we thought a few months ago, which will serve to offset some additional weakness that we potentially see in our CM&C segment. On Slide 31, our adjusted EPS guidance for 2023 is approximately $4.40, the same as our forecast at the beginning of the year, which compares favorably with the $4.14 that we earned in 2022. Higher average interest costs will absorb a significant amount of earnings growth generated through operations, but despite that, 2023 is expected to finish at our highest suggested EPS in company history, surpassing the $4.21 achieved in 2021. On Slide 32, we anticipate that our capital spending will be approximately $110 million to $120 million in 2023, $5 million to $15 million higher than 2022 levels. Required spending on maintenance and Zero Harm will approximate $68 million, with approximately $42 million to $52 million dedicated to finishing our significant growth and productivity projects, that will enable us to achieve the ambitious growth projections we have for the next couple of years. As I stated previously by the end of this year, we'll spend all that will be required to achieve our 2025 adjusted EBITDA goal of $300 million, at an overall cost much lower than what was communicated at our 2021 Investor Day. Moving to Slide 33, you can see our expected path to $300 million of EBITDA from our 2020 base. The majority of that improvement will be realized over the last three years of the plan as the investments we made in the first part of the planning period begin paying off in the later years. We're seeing exactly that play out this year, and we're primed to keep it going for several years to come. With our continued focus on expanding and optimizing our core business, I remain confident in our ability to not just meet, but possibly exceed our $250 million adjusted EBITDA forecast for this year. I'm also confident in our targets of $275 million in 2024 and $300 million in 2025, with significant cash generation occurring over this period, that will enable us to increase cash back to shareholders, while still reducing leverage back between the two to three times range that we've been talking about, and also investing to continue to grow the business. I'm excited about the future, and I can't wait to tell you more about it at our upcoming Investor Day in Chicago, in September. But for now, I would like to open it up for questions.

We will now begin the question-and-answer session. The first question is from Liam Burke with B. Riley FBR. Please go ahead.

Thank you. Good morning, Leroy. Good morning, Jimmi Smith.

Good morning.

Good morning.

Leroy, could we go into a little more detail about the rough EBITDA margins? They were terrific, but then we spent some time looking at the railroad products and services and material raw materials costs and how it's affecting margins in that business segment. What are you doing outside of rail that has delivered such a nice number?

I would say the pole business certainly has been helping to keep the margins up or pull the margins up in that business. Demand is strong in the US and it's created a good pricing environment. We had a lot of cost increases come through in the back half of 2021 heading into early 2022 that we were playing catch up on, and we've been able to get caught up on that and being in a good pricing position, with strong demand and some of the projects quite frankly that we put into place to help improve efficiency and reduce some bottlenecks within our facilities, improving efficiency and reducing costs. It's been a number of different factors, Liam, that have contributed to this, but it always helps to have a healthy market for sure and so that business has performed well and our Australian business is in a pretty strong position as well. They always have been. They're just a smaller piece of the overall pie. But the utility business has absolutely been the leader on the upside, and we have work to do when it comes to the rail piece of things. Costs have increased significantly over the past couple of years, and we're trying to recoup that in the form of price increases and we're continuing to work down that path. I do have confidence we will be successful because we need to have a healthy supply chain.

All things aside, I mean is this 9.5% presuming, you do get some price increases on ROP. Is that a sustainable number?

Well, the expectation is that we get this business back into the double digits. I mean this business should absolutely be in the range of 12% to 16% margins overall, and that's what we've been aiming to get back into. A lot of the projects we've been undertaking are geared towards doing exactly that. We've been asked the question before, why spend money on a business that is generating 6% margins, which it was before? And are there returns there? We believe there are and we believe we're starting to see some of the impact of that. A lot of the benefits there have been overshadowed by costs just escalating up to this point, and we've had a little more trouble getting back, but we'll figure that one out.

Okay. Great, and really quick Jimmi Sue. Operating cash flow was slightly negative for the first six months of the year. Usually in the second quarter, cash flow is strong enough to flip into the positive territory. Understanding that working capital timing issues can affect that number. But was there anything in the second quarter cash flows that created or failed to get you over the positive operating cash number?

I think you hit on the biggest issue there, Liam, which was the working capital not flipping as early as it normally does. But I will say, we saw a strong acceleration in cash flows in the month of June and are continuing to see that. So we think we're seeing sort of our normal pattern just maybe on a month or 6-week delay from when it has normally started.

Great. Thank you, Leroy, and Jimmi Sue.

Thanks, Liam.

The next question is from Gary Prestopino with Barrington Research. Please go ahead.

Hey, good morning, all. General question in terms of with the infrastructure build federal spending and all are you starting to see more money being released there for you for specifically what you do?

Yes, we're certainly seeing that in the pole side. The demand there has always been relatively healthy but it has picked up with infrastructure dollars being allocated, and we're seeing it on the rail side as well. So, yes, dollars are out there being spent and it is having an impact.

Okay. And then in terms of what you're talking about getting, I guess, pricing further price increases for the Creosote, is that with entities that have not given you any price increases, or do you have to go back to some of the other ones you already negotiated and try and pass on higher price increases?

So, it's a little bit complicated, right? To be totally frank, it's across the board. We've had significant increases. Obviously, we know what's going on in the labor front. Goods and services, you name it, and the costs have gone up. We do have contractually with the long-term contracts in place the ability to recoup some of that and we have up to a certain limit. It's just not been enough, so we are trying to work within the bounds of the contract to ensure that we can get back fair value for the items that have exceeded our ability contractually to get the price increases for. I mean, it does not serve the rail industry to have an unhealthy supply chain, and so we'll continue to work on that. I think I can tell you we believe we have bottomed out from that standpoint, and there's nowhere to go but up, but we're going to be fighting as much as we can to try and get ourselves back to where we need to be.

Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to CEO Leroy Ball for any closing remarks.

Thank you. I just want to again thank everybody for your interest in Koppers and for your participation on today's conference call. I hope you can join us in Chicago for our Investor Day in September. Until then, please be safe. Thank you. Bye-bye.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.