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December 14, 2005
Steven R. Lacy, Esq.
Sr. VP, Administration, General Counsel and Secretary
Koppers Holdings Inc.
436 Seventh Avenue
Pittsburgh, PA 15219
Re: Koppers Holdings Inc.
Amendment No. 2 to Registration Statement on Form S-1
Filed November 16, 2005
File No. 333-128250
Dear Mr. Lacy:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation
as to why our comment is inapplicable or a revision is
unnecessary.
Please be as detailed as necessary in your explanation. In some
of
our comments, we may ask you to provide us with information so we
may
better understand your disclosure. After reviewing this
information,
we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We
look forward to working with you in these respects. We welcome
any
questions you may have about our comments or any other aspect of
our
review. Feel free to call us at the telephone numbers listed at
the
end of this letter.
General
1. We reissue prior comment 1. As previously requested, please
file on
EDGAR the pricing, selling shareholder, and dividend information
in
your next amendment. We will need sufficient time to process this
information and we may issue additional comments.
2. Please update your disclosure to include the dividend you
issued in
December.
Gatefolds
3. Please tell us whether the pictures of products are your
finished
products or the finished products of third parties that contain
components of your products. If they are not your finished
products,
please delete. Similarly, please delete any pictures of locations
that
are not owned or leased by you.
Summary, page 1
4. We note your response to prior comment 7. As we previously
commented and discussed telephonically, the discussion of industry
overview and your strengths is not appropriate for the Summary
section. We note that you have included this information
elsewhere in
the prospectus. Please delete. In addition, under risks related to
your business strategy, define what you mean by "free cash flow."
Risk Factors, page 12
You may not receive dividends . . ., page 22
5. Describe the consequences to the company or investors if you
paid
dividends in violation of Pennsylvania law.
Dividend Policy, page 29
6. We reissue prior comment 20. Please disclose all the omitted
information in this section. We may have additional substantive
comments once you have completed the missing information.
7. We note your response to prior comment 21. However, despite
the
fact that dividends will be payable at the discretion of the board
of
directors and are not guaranteed, we believe that disclosure of a
proposed dividend rate will likely influence an investor`s
decision on
whether to purchase your common stock. Therefore, we continue to
believe that the disclosures we previously requested may be
necessary
in order to provide investors with adequate information to assess
your
ability to pay dividends. Alternately, you may delete all
references
to an expected amount of dividends to be paid from the
registration
statement and any selling materials.
8. We note your response to prior comment 22. Explain what you
mean by
"excess cash." How will the board determine whether to pay
dividends
of out "excess cash" versus using borrowings? What was the policy
for
paying out recent dividends from borrowings? Quantify the increase
in
your amended credit facility to account for the payment of
dividends.
9. We note your response to prior comment 23. Please describe in
detail the covenant restrictions in your indentures and their
potential impact on your ability to pay dividends at the rates
identified. For example, what are the formulas for the restricted
payments covenants in the indentures? Explain in greater detail
the
other restricted payments that can affect the cash available to
pay
dividends. Provide sufficient information so that investors would
be
able to calculate this information.
10. We note your response to prior comment 24. You disclose that
you
expect to pay dividends; however, you include a risk factor that
you
may not pay dividends because of restrictions imposed by
Pennsylvania
law. Expand the disclosure to more completely describe your
analysis
to reach the conclusion that you could pay dividends at the rates
identified. For example,:
* Did you receive a valuation report?
* If so, describe the contents of the valuation report.
* Provide your analysis and quantify how you determined that you
can
pay dividends under Pennsylvania law.
11. It appears that the valuation report is important to an
investor
in determining your ability to pay dividends. Please file this
report
as an exhibit or provide us your analysis of why this is not
material
to investors.
12. We reissue prior comment 25. Disclose whether the board
contemplates paying out all excess cash. If not, clarify what the
rate
is based on. Fully address the potential long-term implications
for
your business and financial condition arising from paying out
cash. We
may have additional comments after we review your response.
13. We note your response to prior comment 26. Clearly address the
potential necessity of using borrowings to fund dividends.
Discuss
these assumptions and considerations in your Management`s
Discussion
and Analysis of Financial Condition and Results of Operations as
well,
to the extent that they represent known material trends, demands,
commitments and uncertainties, or are otherwise material to an
understanding of your business, results of operations and
financial
condition.
Employees and Employee Relations, page 67
14. We note your response to prior comment 34. Please update your
disclosure regarding the status of the labor contracts that expire
in
2005.
Principal and Selling Stockholders, page 82
15. We reissue prior comment 39. Please identify the selling
shareholders and the shares they are offering.
Shares Eligible for Future Sale, page 96
16. We reissue prior comment 42. Quantify the number of shares
that
are eligible for future sale under each subheading.
Financial Statements
Note 1 - Significant Accounting Policies, Revenue Recognition,
page F-
26
17. We note your response to prior comment 46. Please revise your
revenue recognition policy and disclosures under critical
accounting
policies to address the factors that resulted in you concluding
that
your revenue recognition policy for bill and hold arrangements is
appropriate and quantify the amount of revenue you recognized
related
to these arrangements during the periods presented. In addition,
please confirm that service revenues did not exceed 10% of total
revenues for the years ended December 31, 2003 and 2002.
Note 9 - Environmental and Other Matters, page F-12 and Note 8 -
Commitments and Contingencies, page F-43
18. We note your response to prior comment 47. Please confirm to
us
that there are no other significant limitations under the
indemnification agreement with Beazer East that should be
disclosed.
Also, please provide us a copy of the indemnity extension.
19. In light of the potential materiality of the legal and
environmental matters that you disclose and discuss, it appears to
us
that you should revise your disclosures under critical accounting
policies to quantify the impact of these estimates on your
financial
statements for each period presented by providing separate roll-
forwards of your accruals related to these matters and you should
address the specific facts and circumstances that impacted your
estimates during each period presented.
Note 9 - Operations by Business Segment, page F-48
20. We note your response to prior comment 49. However, your
conclusion that CM&C-US, CM&C-Australia and CM&C-Europe are not
operating segments appears inconsistent with the internal reports
you
provided and the provisions of paragraph 10 of SFAS 131. As
previously requested, please demonstrate to us how your current
presentation complies with paragraph 17 of SFAS 131.
Exhibits
21. We reissue prior comment 50. Please file a statement on
computation of per share earnings. See Item 601(b)(11) of
Regulation
S-K.
Exhibit 5.1 - Legal Opinion
22. Please include the number of shares being registered.
23. You cannot assume that "the Pricing Committee of the Board of
Directors of the Company which has been appointed by the Board of
Directors of the Company in connection with the issuance of the
Primary Shares will have taken the action necessary to set the
sale
price of the Primary Shares prior to the issuance by the Company
thereof." Please delete.
24. In the penultimate paragraph, either delete the last sentence
or
refile an opinion on the day you want the registration statement
to go
effective.
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing
includes all information required under the Securities Act of 1933
and
that they have provided all information investors require for an
informed investment decision. Since the company and its
management
are in possession of all facts relating to a company`s disclosure,
they are responsible for the accuracy and adequacy of the
disclosures
they have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
? should the Commission or the staff, acting pursuant to
delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
? the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
? the company may not assert staff comments and the declaration
of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division
of Corporation Finance in connection with our review of your
filing or
in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering of
the securities specified in the above registration statement. We
will
act on the request and, pursuant to delegated authority, grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
You may contact Dale Welcome at (202) 551-3865 or in his
absence, Anne McConnell at (202) 551-3709 if you have questions
regarding comments on the financial statements and related
matters.
Please contact Brigitte Lippmann at (202) 551-3713 or in her
absence,
Chris Edwards at (202) 551-3742 or me at (202) 551-3760 with any
other
questions.
Sincerely,
Pamela A. Long
Assistant Director
cc: Richard Farley, Esq.
Cahill Gordon & Reindel LLP
80 Pine Street
New York, NY 10005
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Steven R. Lacy, Esq.
Koppers Holdings Inc.
December 14, 2005
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0404
DIVISION OF
CORPORATION FINANCE