Koppers Holdings Inc.

Previous wording

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 synergies, 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 “outlook,” "guidance,” “forecast,” “believe,” “anticipate,” “expect,” “estimate,” “may,” “will,” “should,” “continue,” “plan,” “potential,” “intend,” “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, cost reduction efforts, transformation initiatives, product introductions or expansions, 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, availability of and fluctuations in the prices of key raw materials, including coal tar, lumber and scrap copper; the impact of changes in commodity prices, such as oil, copper and chemicals, on product margins; the successful implementation of multi-year cost mitigation programs; the extent of the dependence of certain of our businesses on certain market sectors and customers; economic, political and environmental conditions in international markets, including governmental changes, tariffs, restrictions on trade and restrictions on the ability to transfer capital across countries; current and potential future tariffs or duties; the ratings on our debt and our ability to repay or refinance our outstanding indebtedness as it matures; our ability to operate within the limitations of our debt covenants; capital market and banking market conditions, including interest rates, borrowing costs, foreign currency rate fluctuations, and general volatility; general economic and business conditions, including labor shortages, increased employee turnover and demand for our goods and services; disruptions and inefficiencies in…

Excerpt shortened here; the source contains the full paragraph.

Current wording

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 synergies, 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 “outlook,” "guidance,” “forecast,” “believe,” “anticipate,” “expect,” “estimate,” “may,” “will,” “should,” “continue,” “plan,” “potential,” “intend,” “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, regarding future dividends, expectations with respect to sales, earnings, cash flows, operating efficiencies, restructurings, cost reduction efforts, transformation initiatives, product introductions or expansions, 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, availability of and fluctuations in the prices of key raw materials, including coal tar, lumber and scrap copper; the impact of changes in commodity prices, such as oil, copper and chemicals, on product margins; the successful implementation of multi-year cost mitigation programs; the extent of the dependence of certain of our businesses on certain market sectors and customers; economic, political and environmental conditions in international markets, including governmental changes, tariffs, restrictions on trade and restrictions on the ability to transfer capital across countries; geopolitical events (including the current war in the Middle East); current and potential future tariffs or duties; the ratings on our debt and our ability to repay or refinance our outstanding indebtedness as it matures; our ability to operate within the limitations of our debt covenants; capital market and banking market conditions, including interest rates, borrowing costs, foreign currency rate fluctuations, and general volatility; general economic and business conditions, including labor shortages, increased employee turnover and demand for our goods and services; disruptions and inefficiencies in the supply chain; unexpected business disruptions (including, but not limited to, labor d…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Through our RUPS business, we believe that we are the largest supplier of railroad crossties to the Class I railroads in North America and the second largest producer of utility poles in the United States. Our utility poles are used in the electric, telephone, and broadband industries in the United States and Australia and construction pilings in the United States. In addition, we provide untreated wood products and rail joint bars to the railroad markets and inspection services to the utility markets. We also operate a business related to the recovery of used crossties, serving the same customer base as our North American railroad business. We sold our railroad bridge services business during the third quarter of 2025. See Note 2 - Acquisitions and Restructuring.

Current wording

Through our RUPS business, we believe that we are the largest supplier of railroad crossties to the Class I railroads in North America and the second largest producer of utility poles in the United States. Our utility poles are used in the electric, telephone, and broadband industries in the United States and Australia and construction pilings in the United States. In addition, we provide untreated wood products and rail joint bars to the railroad markets and inspection services to the utility markets. We also operate a business related to the recovery of used crossties, serving the same customer base as our North American railroad business.

Previous wording

Our CMC business processes coal tar into a variety of products, including creosote, carbon pitch, carbon black feedstock and naphthalene, which are intermediate materials necessary in the pressure treatment of wood, and the production of aluminum, steel, carbon black and high-strength concrete. Our CMC segment ceased production of phthalic anhydride in the second quarter of 2025. See Note 2 – Acquisitions and Restructuring.

Current wording

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

Previous wording

We utilize certain financial measures that are not in accordance with 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 between periods of results for business operations, and it is on this basis that our management internally assesses our performance. Adjusted EBITDA is the measure of profitability we use to evaluate our businesses. In addition, adjusted EBITDA is the primary measure used to determine the level of achievement of management's short-term incentive goals and related payout, as well as one of the measures used to determine performance and related payouts for certain performance share units granted to management.

Current wording

We utilize certain financial measures that are not in accordance with 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 between periods of results for business operations, and it is on this basis that our management internally assesses our performance. Adjusted EBITDA is the measure of profitability we use to evaluate our businesses. In addition, adjusted EBITDA is the primary measure used to determine the level of achievement of management's short-term incentive goals and related payout, as well as one of the measures used to determine performance and related payouts for certain performance share units granted to management prior to 2026.

Previous wording

Adjusted EBITDA is a non-GAAP financial measure defined as income before interest expense, income taxes, depreciation, amortization and other adjustments. These other adjustments are items that we believe are not representative of underlying business performance. Adjusted items typically include LIFO inventory effects, impairment, restructuring and plant closure costs, significant gains and losses on asset disposals, mark-to-market commodity hedging, acquisition-related charges, amortization of cloud-based software implementation costs and other unusual items. The LIFO expense adjustment removes the entire impact of LIFO and effectively reflects the results as if we were on a FIFO inventory basis. An adjusted EBITDA reconciliation is presented in the Segment Results section and reconciles net income to adjusted EBITDA on a consolidated basis.

Current wording

Adjusted EBITDA is a non-GAAP financial measure defined as income before interest expense, income taxes, depreciation, amortization and other adjustments. These other adjustments are items that we believe are not representative of underlying business performance. Adjusted items typically include LIFO inventory effects, impairment, restructuring and plant closure costs, significant gains and losses on asset disposals or business combinations, mark-to-market commodity hedging, acquisition-related charges, cloud-computing amortization expenses and other unusual items. The LIFO expense adjustment removes the entire impact of LIFO and effectively reflects the results as if we were on a FIFO inventory basis. An adjusted EBITDA reconciliation is presented in the Segment Results section and reconciles net income to adjusted EBITDA on a consolidated basis.

Previous wording

After considering the current intensely competitive environment, global economic conditions, as well as ongoing uncertainty associated with geopolitical and supply chain challenges, we anticipate taking measures to streamline our organization to support an increasingly cost-conscious customer base. These actions, some of which are one-time savings and some of which are expected to be permanent savings, are intended to ensure that we continue our growth in profitability and support a higher margin profile by leveraging a smaller global team highly focused on serving customer preferences. Through the planning phase that has occurred throughout 2025, we believe we have identified actionable transformation initiatives to position Koppers for future success, creating a roadmap to reshape our company into a higher earning, higher margin, higher free cash flow and higher return on capital business over the next three years. These initiatives impact all facets of the organization and are focused on growing the more profitable businesses while continuing to selectively scale back our lower margin, capital intensive business. We believe this will grow earnings per share, lower our maintenance and capital requirements and consistently generate higher margins.

Current wording

After considering the current intensely competitive environment, global economic conditions, as well as ongoing uncertainty associated with geopolitical and supply chain challenges, we commenced taking measures to streamline our organization to support an increasingly cost-conscious customer base. These actions, some of which are one-time savings and some of which are expected to be permanent savings, are intended to ensure that we grow our profitability and support a higher margin profile by leveraging a smaller global team highly focused on serving customer preferences. Through the planning phase that occurred throughout 2025, we believe we have identified actionable transformation initiatives to position Koppers for future success, creating a roadmap to reshape our company into a higher earning, higher margin, higher free cash flow and higher return on capital business over the next three years. These initiatives impact all facets of the organization and are focused on growing the more profitable businesses while continuing to selectively scale back our lower margin, capital intensive business. We believe this will grow earnings per share, lower our maintenance and capital requirements and consistently generate higher margins.

Previous wording

•For our RUPS segment, our focus is to (i) recoup cost increases, including the value of our creosote preservative in the market, (ii) maximize opportunities for increased volumes, including expanding our customer base into the Texas, western and midwestern utility pole markets and (iii) lower operating and selling, general and administrative expenses.

Current wording

•For our RUPS segment, our focus is to continue to (i) recoup cost increases, including the value of our creosote preservative in the market, (ii) maximize opportunities for increased volumes, including expanding our customer base in the midwestern and western utility pole markets and (iii) optimizing our network to better align capacity with demand and reduce operating costs.

Previous wording

•For our PC segment, our focus is to (i) acquire new customers in our residential preservatives markets to offset certain customer market share losses, (ii) expand market share in our industrial preservatives markets and (iii) improve our cost structure.

Current wording

•For our PC segment, our focus is to continue to (i) acquire new customers and grow organic market share in our residential preservatives markets, (ii) expand market share in our industrial preservatives markets and (iii) align and improve our cost structure.

Previous wording

•For our CMC segment, our focus is to (i) execute on domestic plant restructuring projects, (ii) optimize and develop markets for enhanced carbon products and (iii) implement global tar and pitch strategies.

Current wording

•For our CMC segment, our focus is to continue to (i) execute on domestic plant restructuring projects including the closure of our Stickney, Illinois coal tar distillation plant by the end of 2026 (see Note 13), (ii) optimize and develop markets for enhanced carbon products and (iii) develop and implement global tar and pitch strategies to mitigate expected raw material cost increases.

Previous wording

•The Railway Tie Association’s estimate of total crosstie purchases in 2025 is approximately 19.9 million ties, with approximately 13.4 million for Class I railroads. This is lower than the 2024 crosstie purchases of approximately 21.3 million crossties with the decrease expected to be from the commercial market. Over the past few years, North American demand for crossties has been in the range of 18 million to 22 million crossties annually. We expect the crosstie market to remain stable and within this range. However, volumes for our business in any year can be affected by individual customer demands, logistics and business conditions.

Current wording

•The Railway Tie Association’s estimate of total crosstie purchases in 2026 is approximately 19.9 million ties, with approximately 13.4 million for Class I railroads, which is comparable to the 2025 estimate of crosstie purchases. Over the past few years, North American demand for crossties has been in the range of 18 million to 22 million crossties annually. We expect the crosstie market to remain stable and within this range. However, volumes for our business in any year can be affected by individual customer demands, logistics and business conditions.

Previous wording

•Market demand for utility poles is expected to grow over the next few years. Key drivers include aging pole infrastructure, the expansion of renewable energy, vehicle electrification, grid-hardening measures and extreme weather protection as well as some growth driven by productivity gains from artificial intelligence (AI) which will increase electricity demand. We continue to focus on expanding our presence in the western and midwestern United States and Canada along with improving our efficiency and capturing new customers to increase our market share.

Current wording

•Market demand for utility poles is expected to grow over the next few years. The main driver for growth is the construction of data centers that support artificial intelligence development. The data centers that are being constructed nationwide consume large amounts of electricity. Other drivers of pole demand include aging pole infrastructure, the expansion of renewable energy, vehicle electrification, grid-hardening measures, and extreme weather protection. Our Utility Products business continues to focus on expanding its presence in the midwestern and western United States.

Previous wording

•Product demand for our PC business has historically been associated with consumer spending on home repair and remodeling projects in North America. The Leading Indicator of Remodeling Activity (LIRA) reported by the Joint Center for Housing Studies of Harvard University projects that year-over-year spending for annual homeowner renovation and maintenance expenditures is expected to grow by 2.4 percent in early 2026 before easing to 1.9 percent in the third quarter of 2026. While the LIRA projects a slight increase in the fourth quarter of 2025, our PC business expects lower volumes as a result of customer market share shifts with the remaining customer volumes expected to be slightly down.

Current wording

•Product demand for our PC business has historically been associated with consumer spending on home repair and remodeling projects in North America. The Leading Indicator of Remodeling Activity (LIRA) reported by the Joint Center for Housing Studies of Harvard University projects that year-over-year spending for annual homeowner renovation and maintenance expenditures is expected to grow by 2.1 percent in the middle of 2026 before easing to 1.6 percent by the end of 2026. Our PC business expects higher volumes through market share growth and acquiring new customers supported by the LIRA projections.

Previous wording

Our 2025 outlook reflects plans to substantially offset costs related to import and export tariffs, where possible, but there is continued uncertainty regarding the implementation dates and scope of potential additional tariffs, as well as potential retaliatory trade policy. As a result of these items, our outlook may vary. See also Item 1A. Risk Factors in this 10-Q as well as in our Form 10-K for the year ended December 31, 2024.

Current wording

Our outlook reflects plans to substantially offset costs related to import and export tariffs, where possible, but there is continued uncertainty regarding the implementation dates and scope of potential additional tariffs, as well as potential retaliatory trade policy. As a result of these items, our outlook may vary. See also Item 1A. Risk Factors in our Form 10-K for the year ended December 31, 2025.

Previous wording

RUPS net sales decreased due to $22.7 million of lower volumes in our Class I crosstie business and lower activity in our maintenance-of-way businesses. These decreases were largely offset by higher volumes in our commercial crosstie business, increased volumes in our domestic utility pole business and $6.9 million of price increases across multiple markets, particularly for crossties. Foreign currency changes compared to the prior year period had an unfavorable impact on sales in the current year period of $2.1 million, mainly from our Australian utility pole business.

Current wording

RUPS net sales decreased due to customer mix in our Class I crosstie business, lower activity in our maintenance-of-way businesses, including approximately $9.6 million related to the sale of our railroad services business during the third quarter of 2025, and price decreases across multiple markets, particularly for crossties. These decreases were partly offset by increased volumes in our domestic utility pole business, including our acquisition of a western U.S. pole procurement business, and higher volumes in our commercial crosstie business. Foreign currency changes had a favorable impact on sales in the current year period of $1.4 million compared to the prior year period, mainly from our Australian utility pole business.

Previous wording

CMC net sales decreased mainly due to volume decreases of phthalic anhydride of $19.6 million as we ceased production of the product in the second quarter of 2025, lower volumes and lower prices for carbon black feedstock and lower sales prices for carbon pitch where prices were down approximately three percent globally. The decreases in carbon pitch prices were driven by market dynamics in the current year period, particularly in Australasia. These decreases were partly offset by volume increases for carbon pitch and creosote.

Current wording

CMC net sales decreased mainly due to lower phthalic anhydride volumes of $13.9 million as we ceased production of the product in the second quarter of 2025 and lower sales prices across most products, especially carbon pitch where prices were down approximately nine percent globally driven by market dynamics. These decreases were partly offset by volume increases for carbon pitch, naphthalene and carbon black feedstock. Foreign currency changes from our international markets had a favorable impact on sales in the current year period of $7.6 million compared to the prior year period.

Previous wording

Cost of sales as a percentage of net sales was 76 percent, compared to 78 percent in the prior year period as lower operating expenses were partly offset by lower sales volumes. Significant items impacting cost of sales in individual operating segments are discussed as part of "Segment adjusted EBITDA and adjusted EBITDA margin" herein.

Current wording

Cost of sales as a percentage of net sales was 81 percent, compared to 77 percent in the prior year period as higher raw material and operating expenses combined with lower sales prices. Significant items impacting cost of sales in individual operating segments are discussed as part of "Segment Results" herein.

Previous wording

Depreciation and amortization expenses were $1.4 million higher when compared to the prior year period primarily as a result of our acquisition of Brown Wood.

Current wording

Depreciation and amortization expenses were $1.4 million higher when compared to the prior year period primarily as a result of depreciation on recent capital expenditures as well as higher asset retirement obligations in our European CMC operations.

Previous wording

Impairment and restructuring charges in the current year period represent costs associated with discontinuing phthalic anhydride production at our facility in Stickney, Illinois, consulting services related to our comprehensive assessment of our businesses and our workforce reduction program across selected U.S. locations to streamline operations and reduce costs. See Note 2 - Acquisitions and Restructuring.

Current wording

Impairment and restructuring charges in the current year period represent costs associated with the decision to idle two plants in our RUPS business, consulting services related to our comprehensive assessment of our businesses and discontinuing phthalic anhydride production at our facility in Stickney, Illinois. In the prior year period, it also includes our workforce reduction program across selected U.S. locations to streamline operations and reduce costs. See Note 2 - Restructuring.

Previous wording

Loss on sale of assets for the three months ended September 30, 2024 was related to the liquidation of our former coal tar distillation facility located in China. See Note 2 - Acquisitions and Restructuring.

Current wording

(Gain) on sale of assets for the three months ended March 31, 2026 was primarily related to the liquidation of KCCC.

Previous wording

Interest expensewas $7.3 million lower when compared to the prior year period due to lower interest rates.

Current wording

Interest expensewas $1.6 million lower when compared to the prior year period due to lower interest rates and lower borrowings.

Previous wording

Loss on pension settlement in the current year period represents the settlement loss recorded as a result of the termination of our United States qualified pension plan as discussed in Note 10 - Pensions and Post-Retirement Benefit Plans.

Current wording

Loss on pension settlement in the prior year period represents the settlement loss recorded as a result of the termination of our United States qualified pension plan as discussed in Note 10 - Pensions and Post-Retirement Benefit Plans.

Previous wording

Income tax provision increased by $1.4 million when compared to the prior year period due primarily to higher income before income taxes. See Note 8 - Income Taxes.

Current wording

Income tax expense increased by $4.1 million when compared to the prior year period due primarily to higher income before income taxes. See Note 8 – Income Taxes.

Previous wording

RUPS net sales decreased due to $15.8 million of lower volumes in our Class I crosstie business and lower activity in our maintenance-of-way businesses, including the sale of our railroad bridge services business during the third quarter of 2025. These decreases were partly offset by higher volumes in our commercial crosstie business, a 6.5 percent volume increase in our domestic utility pole business and $1.9 million of price increases, primarily in crossties.

Current wording

RUPS adjusted EBITDA decreased due primarily to lower net sales prices, lower sales volumes and lower activity in our maintenance-of-way businesses, including approximately $0.6 million related to the sale of our railroad services business during the third quarter of 2025.

Previous wording

PC adjusted EBITDA decreased due primarily to lower sales volumes and higher raw material costs of $23.0 million, partly offset by lower logistics expenses, particularly in North America, and selling, general and administrative expenses of $7.1 million and higher royalty income. Higher raw material costs were unfavorably impacted by scrap copper costs, net of the benefit realized from our copper-hedging program.

Current wording

PC adjusted EBITDA increased due primarily to higher sales volumes and prices, partly offset by $2.4 million of higher raw material and operating costs. Higher raw material costs were unfavorably impacted by scrap copper costs, net of the benefit realized from our copper-hedging program.

Previous wording

CMC adjusted EBITDA increased due to operating cost savings from discontinuing phthalic anhydride production and lower raw material costs of $2.9 million, partly offset by lower sales prices.

Current wording

CMC adjusted EBITDA decreased due to lower sales prices as well as higher operating and raw material costs. These decreases were partly offset by the operating cost savings from discontinuing phthalic anhydride production at our facility in Stickney, Illinois.

Previous wording

(1)The LIFO expense adjustment removes the entire impact of LIFO and effectively reflects the results as if we were on a FIFO inventory basis.

Current wording

(2)The LIFO expense adjustment removes the entire impact of LIFO and effectively reflects the results as if we were on a FIFO inventory basis.

Previous wording

Net cash provided by operating activities for the nine months ended September 30, 2025 was $77.4 million compared to $44.7 million in the prior year. For both periods, the primary source of cash was net income, excluding non-cash items, principally depreciation and in 2025, the pension settlement loss. Working capital usage was lower in the current year primarily as a result of the timing of receipts and payments, partly offset by pension funding of approximately $14 million in connection with the settlement.

Current wording

Net cash provided by operating activities for the three months ended March 31, 2026 was $46.3 million compared to net cash used in operating activities of $22.7 million in the prior year. For both periods, the primary source of cash was net income, excluding non-cash items, principally depreciation and in 2025, the pension settlement loss. Working capital usage improved in the current year primarily as a result of the timing of receipts and payments as well as a reduction in inventory. Additionally, in 2025, working capital was negatively impacted by pension funding of approximately $14 million in connection with the settlement.

Previous wording

Net cash used in financing activitiesfor the nine months ended September 30, 2025 was $47.3 million compared to net cash provided by financing activities of $88.4 million in the prior year. The primary uses of financing cash flows for the nine months ended September 30, 2025 were repurchases of common stock, including payments related to taxes withheld under stock-based compensation plans, net debt repayments of $7.8 million, dividends and debt issuance costs. In the prior year, the primary source of financing cash flows was net borrowings of $138.9 million due primarily to borrowings to fund the Brown Wood acquisition. The primary uses of financing cash flows in the prior year were repurchases of common stock, including payments related to taxes withheld under stock-based compensation plans and dividends.

Current wording

Net cash used in financing activitiesfor the three months ended March 31, 2026 was $31.0 million compared to net cash provided by financing activities of $28.7 million in the prior year. In the current year, the primary uses of financing cash flows were repurchases of common stock, including payments related to taxes withheld under stock-based compensation plans, and dividends. In the prior year, the primary source of financing cash flows was net borrowings of $49.1 million and the primary uses of financing cash flows in the prior year were repurchases of common stock, including payments related to taxes withheld under stock-based compensation plans, and dividends.

Previous wording

As of September 30, 2025, liquidity from our Credit Facility and cash on hand was approximately $379 million. Our Credit Facility is described in Note 11 – Debt.

Current wording

As of March 31, 2026, liquidity from our Credit Facility and cash on hand was approximately $386 million. Our Credit Facility is described in Note 11 – Debt.

Previous wording

Our need for cash in the next twelve months relates primarily to contractual obligations which include debt service, purchase commitments and operating leases, as well as working capital, capital spending, dividends and share repurchases. We may also use cash to pursue other potential strategic acquisitions. Capital expenditures in 2025, excluding acquisitions, if any, are expected to total approximately $52 to $55 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 at least the next twelve months.

Current wording

Our need for cash in the next twelve months relates primarily to contractual obligations which include debt service, purchase commitments and operating leases, as well as working capital, capital spending, dividends, share repurchases and plant consolidations and closure. We may also use cash to pursue other potential strategic acquisitions. Capital expenditures in 2026, excluding acquisitions, if any, are expected to total approximately $55 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 at least the next twelve months.

Previous wording

We manage our working capital to increase our flexibility to pay down debt. The amount of our outstanding debt and our overall cash flows will fluctuate throughout any operating period based upon, among other things, the timing of receipts from customers and payments to vendors. As of September 30, 2025 and December 31, 2024, approximately 85 percent of accounts payable was current and 15 percent was 1-30 days past due.

Current wording

We manage our working capital to increase our flexibility to pay down debt. The amount of our outstanding debt and our overall cash flows will fluctuate throughout any operating period based upon, among other things, the timing of receipts from customers and payments to vendors. As of March 31, 2026, approximately 85 percent of accounts payable was current and 15 percent was 1-30 days past due. As of December 31, 2025, approximately 95 percent of accounts payable was current and 5 percent was 1-30 days past due.

Previous wording

•The total net leverage ratio is calculated as of the last day of each fiscal quarter in accordance with the Credit Facility definitions of consolidated total net debt divided by consolidated EBITDA and is not permitted to exceed 4.75. The total net leverage ratio as of September 30, 2025 was 3.3.

Current wording

•The total net leverage ratio is calculated as of the last day of each fiscal quarter in accordance with the Credit Facility definitions of consolidated total net debt divided by consolidated EBITDA and is not permitted to exceed 4.75. The total net leverage ratio as of March 31, 2026 was 3.4.

Previous wording

•The cash interest coverage ratio, calculated as of the last day of each fiscal quarter, is not permitted to be less than 2.0. The cash interest coverage ratio as of September 30, 2025 was 4.2.

Current wording

•The cash interest coverage ratio, calculated as of the last day of each fiscal quarter, is not permitted to be less than 2.0. The cash interest coverage ratio as of March 31, 2026 was 4.4.