Welcome to the Koppers first quarter earnings conference call on May 7, 2009. (Operator Instructions) I would now hand the conference over to Mike Snyder.

Welcome to our first quarter conference call. My name is Mike Snyder, and I am the Director of Investor Relations for Koppers. At this time, each of you should have received a copy of our press release. If you haven’t, one is available on our website or else you can call [Rosa Linski] at 412-227-2444, and we can either fax or e-mail you a copy. Before we get started, I’d like to remind all of you that certain comments made during this conference call may be characterized as forward-looking under the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be affected by certain risks and uncertainties, including risks described in the company’s filings with the SEC. 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’s actual results could differ materially from such forward-looking statements. I am joined on this morning’s call by Walt Turner, President and CEO of Koppers; and Brian McCurrie, Vice President and CFO. At this time, I’d like to turn over the call to Walt Turner. Walt?

Welcome to our 2009 first quarter conference call. Our first quarter sales for the company were $273 million compared to the prior year first quarter sales of $331 million. The Carbon Materials & Chemicals sales for the first quarter were significantly impacted by the global recession. However, sales for the quarter increased significantly in our Railroad & Utility Products business as the Class 1 railroads increased their buying untreated volumes. We were very pleased to see that we were able to navigate through a difficult quarter, generating not only profits, but also positive cash flows. The first quarter volumes of carbon materials to the aluminium and steel industry declined 27% from the prior year’s first quarter as a result of declines in aluminium and steel production and foreign exchange. Sales volumes for carbon black feedstock to the carbon black producers declined 12%, as many of the global rubber producers continued the reduction in production and raw material purchases that began impacting the fourth quarter. Sales volumes of phthalic anhydride declined 22% in the first quarter compared to the prior year. We are seeing some improvement trends over the fourth quarter levels, but end market demand in Carbon Materials & Chemicals remains quite depressed over the prior year levels. Those prices potentially for phthalic anhydride and carbon black feedstocks declined from the prior year quarter as lower demand and lower benchmark oil reduced prices. In addition to end market demand, due to reductions in metallurgical coke production, availability of coal tar is tight, leading to price increases in North America and Australia. On the positive side, our Railroad & Utility Products business had a very strong first quarter as sales were up 17%. As we stated in our last call, Class 1 railroad customers have continued to buy and insert ties…

Sales for the first quarter decreased 17.7% to $272.7 million and as compared to $331.2 million for the prior year quarter with approximately $23 million of this decrease relating of FX. We continue to see the most significant impact of the global economic decline in our Carbon Materials & Chemicals business where we saw global volume declines due to lower sales of 34.6% or $77 million, more than offsetting higher sales in the Railroad & Utility segment which increased 17% or $18.5 million based on increased volumes and pricing for crossties. The first quarter sales decline in Carbon Materials & Chemicals was comprised of a 9% or $21.1 million decrease in sales of carbon materials, a 5% or $10.8 million reduction in sales of distillates, a 7% or $15.5 million decline in sales of coal tar chemicals and a 13% or $29.6 million decrease in sales of other products, which include carbon black, benzole, fuels, freight and other miscellaneous products. First quarter carbon material sales were negatively impacted by $25.1 million due to lower volumes of carbon pitch sales, as smelter closures and curtailments impacted customer volumes for carbon pitch, along with $8.5 million of foreign exchange impact, partially offset by $12.6 million of higher prices due primarily to higher cost coal tar resulting from reduced availability. Particularly impacted were operations in Europe and North America where aluminum production curtailments were concentrated. Sales of distillates, which include creosote and carbon black feedstocks, were negatively impacted by lower volumes amounting to $4.4 million. Lower prices for distillates amounted to $5.1 million, reflecting the decline in oil prices from the prior year quarter. We have seen some increases in this business late in the first quarter when compared to the fourth quarter and believe partial restocking is taking place. This is particularly…

In 2008, our two business segments, Carbon Materials & Chemicals and Railroad & Utility Products, were 65% and 35% respectively of our total revenues. The Railroad & Utility Products segment is growing, as we expected, in 2009, as the demand for untreated wood crossties primarily to the North American Class 1 railroads increases. We believe that we are seeing a shifting of these volumes into the first half of the year, and we will see moderation of buying patterns in the second half. We continue to believe that the rate of the tie insertions in 2009 will not be significantly impacted by the economic conditions we see today. Due to the importance of crossties to the rail infrastructure, we believe that the railroads will reduce spending on ties only as the last resort. We see this business, although having some risk for volatility in a very uncertain economic environment, as having a more consistent performance in the market downturn. We also continue to review the government stimulus plan closely and are hopeful that infrastructure spending will have a positive impact on the railroads. The Carbon Materials & Chemicals segment is largely tied to the steel and aluminum markets. As you recall, we use a byproduct of metallurgical coke-making process, coal tar, as our raw material to produce carbon pitch for the aluminum industry, carbon black feedstock for the rubber market and naphthalene as a feedstock for concrete additives and also for further processing in the phthalic anhydride for the plastics and resins markets. Beginning in late 2008 and continuing to this point in 2009, we have seen significant reductions in steel and coal production that have led to reductions in coal tar availability. Although we are constrained in certain regions of the world due to lower volumes of tar, we…

(Operator Instructions). Your first question comes from Laurence Alexander - Jefferies & Company. Laurence Alexander - Jefferies & Company: First, would you mind discussing given some color on how you think carbon pitch price negotiation might evolve this year?

Most of our long-term contracts contain pricing formulas that we have which are semiannual or in even some instances quarterly. So, as we go forward, negotiating our raw material coal tar contracts, obviously those prices would fluctuate accordingly. It’s really feel focusing on lowering raw material cost, which will be eventually benefit from those pitch contracts. As far as the demand for carbon pitch, we’ve seen the global aluminium industry operating somewhere around 70% to 75% of capacity. And unfortunately, as I mentioned, we’ve seen some of these older higher cost smelters in the U.S. and Russia and Europe who’ve cut back more [smelter] than other places around the world. In the U.S., the current operating capacity is something like 43%, 45% of capacity, which as you know we have a fairly a strong market share in. Laurence Alexander - Jefferies & Company: In any of the regions or end markets that you serve, are you seeing any signs of restocking, even if it’s probably temporary in nature?

We were just over in China a few weeks ago. Probably China has shown us the most activity and particularly in things like carbon black feedstock -- or recommend to carbon black. Places like Europe and North America have been fairly quiet still. Probably the most optimistic region of the world that we’ve seen has been China. Laurence Alexander - Jefferies & Company: Finally on the Railroad & Utility Products segment, the surge in white tie volume gives you a clear amount of visibility on coated ties sales later on in the year? How would you estimate a rough band or how that segment should come in for the entire year? I understand the lack of visibility on the CM&C segment, but that segment you should have quite a bit of clarity on.

First of all, you’ve heard us talking that we had a very strong first quarter on the railroad side. Part of that obviously was an increased white tie procurement into our operation, which actually was a nice increase when you look at the first quarter, probably 25%, 30% versus last year. When you look at more so how many ties did we have in our plants that were being air-stacked for drying, at the end of March, we had 6.6 million ties air-stacked. At the end of the year 2008, we had 6.2 million. So that was a nice increase and that does give us some insight as to what the treating will be over the next five or six months or so.

Laurence, maybe he has sort of an order of magnitude, the first quarter sales were up about 17% year-on-year. That growth rate is probably won’t continue through the end of the year. It will moderate to something lesser than that, maybe half to 10% kind of a thing. Then you’ll probably see a bit more leverage and profitability as the additional volumes work their way through the system.

It would be nice to annualize first quarter, but I don’t think that’s going to happen. Laurence Alexander - Jefferies & Company: Last question is on the utility side of that segment. Any restructuring that can be done there to help to improve segment EBITDA next year?

Actually, the utility sales volumes have been pretty flat throughout these last few quarters. We are always looking at ways to improve that margin, which, as you’ve heard us say the fact that it’s not been variable perhaps, but we are always focusing on ways to improve that margin.

It’s actually interesting, Laurence. Because we have plants that run both poles and ties, some of the volume increases in the railroad business have helped some of the overall margins on the utility business as well.

Your next question comes from Steve Schwartz - First Analysis.

Can you guys possibly explain the difference in the buying patterns between the commercial railroads and the Class 1? Does it simply come down to this the credit crunch that had gone on?

From the commercial business, I think it primarily is. I think it’s interesting as sort of time moves on, the ultimate demand is probably there, I think their ability to finance the projects is less. So, what we believe is a lower buying pattern on the commercial side that ultimately will create a demand that needs to be satisfied, maybe as we move into next year, as the financial crisis settles out. The Class 1s, I think it’s a bit of a different [yeast]. They seem to have the financial capacity to be able to do the work and with the lower revenue volumes that they are able to get a lot more work done ultimately at a lower cost for them. So we think they are using this as an opportunity to upgrade the maintenance of their infrastructure.

Also hopefully, on the commercial shore line railroads, we didn’t see a small sign of some stimulus money being used out of the Midwest for the commuter and track application. Hopefully, as the stimulus money starts move into the states and move out, that some of the shore lines will take advantage of some of that money later on.

This white tie purchases were strong, and I could see where that would affect the topline, because hardwood prices are up. This is typically the low margin part of the total sale you do. So I am wondering if there is something else that helped boost your margin in that business.

Yes. It’s mainly throughput absorption.

The volume was a major result.

The white tie purchases is just simply procurement with very little profit dollar for you relative to the treating portion of the sale. So, when you say throughput, can you explain to me how that maybe is factored into margin on the white tie purchase?

If you have a 15% or so fixed cost in your plant, if you are able to move 15% more volume through your plant, you’re going to have a per tie cost reduction.

Okay. So you are assigning that to the white ties even though it’s simply procurement?

Yes, yes.

Okay. I think that pretty well answer it for me.

Be a little bit careful. If you remember, the first quarter of last year was a pretty poor, relatively for white tie procurement, quarter for us overall. So, I think there is a positive comp there for us that’s partially affecting us.

Your next question comes from Saul Ludwig - KeyBanc.

What percentage did you coal tar cost increase in the quarter?

North America was the largest area that we saw some increases in. It was in excess of 30% going into this year. I mean the two markets that we saw the most significant increase in coal tar cost were in North America and Australia.

And they were both about 30%?

Yes, somewhere in that range. In Australia, it wasn’t because the cost of material went up. They actually didn’t have enough material, so we had to input more raw materials into Australia, and that ended up costing us more.

If you have a 30% increase in your coal tar cost, what percent increase do you need in selling prices of pitch to just match dollar for dollar?

If the formula allows for a 30% increase in our pitch price, where we end up losing margin is in the downstream products. Now, we have more ability in things like creosote pricing around the world than we do in carbon black feedstock pricing, which has went to oil. So, where we have markets that pitch and creosote sales were able to better manage that cost increase.

Your SG&A total costs were down $2.4 million. Your corporate cost were the same. So, the $2.4 million decrease in SG&A was in the segments. Was the SG&A in railroad ties basically flat, and the whole $2.4 million decline in carbon materials or how did that SG&A change by the segments?

There was a piece of SG&A reduction in the Railroad & Utility Products segment, Saul.

How much was that?

In that segment, it’s about little less than $1 million, $900,000.

It would be much bigger in the coal tar and the carbon materials?

Right, because I think the Carbon Materials & Chemicals business are not only getting the true cost reduction initiative, it’s also getting the benefit of the FX rate.

Part of that is due to FX?

Correct. The CM&C business has more volatility around FX than the Railroad & Utility Products business has.

Walt, you mentioned that in the U.S., the 25% of the coal tar needs by the aluminium company is imported. Is that imported by you from your operations or are you out of the loop on that such that if the imports are cut out, is that cutting out somebody else or are you getting cut out as well, as the import component is reduced?

Well, we share in that import market as well, and we have for quite some time now. So, we are actually on both West Coast and East Coast. So, it’s something that we did not see some of these older smelters returning back to operation that would impact imports, and we would be a small part of it.

On a relative basis, the margins for us on import product are a lot lower than what we predict.

Where does that come from? Which plants of your’s does the imported product come from?

A certain amount came out of China or came out of Europe. A lot of it came from third parties.

Finally, you’re a heavy variable cost company, but did you have unobserved overhead that was also a component of the earnings decline in the carbon materials sector? If so, how much was that?

The answer is yes. The quantification of that, I don’t really have on my fingertips. I think if you look around the world, we’re probably operating at a lower production capacity than we would have certainly last year or early in the year, but there is a negative impact to that. Saul, I don’t have that number right in front of me.

Then finally, as you’ve pointed out in your release and as occurs historically, there is a seasonal influence that goes from the first quarter to the second quarter. Normally, the second quarter is at least two times the first quarter and maybe even little more sometimes. If you look at your first quarter where you had that $5 million of high class inventory, which I imagine is about $0.15 a share, should we be looking at sort of somewhere in $0.70 to $1 wide range? Is that the right arena to be thinking about?

No. We are not giving guidance, but I do think the normal seasonal pattern for us, which is always a broad statement, Saul, the movement saying from first and second quarter will be two times is a lot higher than what it would normally be. I do think the impact of higher cost of raw materials will help us, but I don’t think you’re going to see a two times increase in profitability in the business into the second quarter.

Adjusted versus this sort of pro forma, a $0.35 number. We didn’t have the $5 million of high cost inventory hitting you. That’s about $0.15 a share, right?

I think you have to tax affect that.

So, 5 million?

3 million.

3 million on [14 million] is $0.15?

Yes.

(Operator Instructions) Your next question comes from Steve Schwartz - First Analysis.

Brian, how much cash did you generate from working capital?

It’s a bit of mixed bag. If you look at some of the larger movements, the cash that was generated from reduction of inventories in the first quarter was about $15 million, but we used about 14 million in the reduction of accounts payable. So, it’s a bit of mixed bag. Most of it is really dropping through net income EBITDA through the bottomline, which is actually a good thing for us, Steve. I think it wasn’t solely driven by inventory reductions.

(Operator Instructions) Your next question comes from [Inaudible]

I just have a question regarding the railroad business. Can you explain again what are the drivers behind the net sale increase in the quarter? What was the main driver behind the uptick there?

There are really two main things. One, if you go back in history, if you go back to the first quarter of 2008, first quarter of 2008 was actually a period where the railroads come off a very high procurement cycle in the year before. So we actually had a lower procurement cycle in procuring the white ties, these are the untreated crossties. In 2009, the railroads not only were in the restocking mode but we actually saw an increase in acceleration of demand for the white ties themselves. But we believe that this is being driven not only by restocking inventories, but also the fact that the railroads were to accelerate some of their tie procurement and ultimately treating to accelerate maintenance on their infrastructure.

And just a bit of side notes, Sam, with fewer [rail creosotes] going down the various railroad system, this is getting a little more maintenance time on the lines, so with less disruptions with the trains. So they are actually improving their productivity as well throughout this maintenance yield.

Do you see, I know it maybe early for you guys to comment on this, but any sort of repercussion from the infrastructure sort of plan from the new administration? Would there be an impact from your perspective in terms of the infrastructure that has to be lead?

I’d say there is certainly a lot to talk about and I think what we’ve seen tangibly has been relatively small and mainly around some upgrades around the impact. We have not seen, so we don’t have orders in hand for significant upticks related to infrastructure stimulus spending.

We actually do have one more question. Do you have time to take it, sir?

More question, sure.

Your next question comes from [Ivan Matthews]

What was the gross margin in the carbon materials and also on the railroad?

The gross margin?

Yes. My second question is, are you seeing in Europe any view of the smaller competitors going out of business? And are you seeing any sort of consolidation opportunities?

With the second question first, we generally work constantly looking at opportunities for any M&A whether it’s Europe or anywhere else. I think we do know that struggled companies are operating at very low capacities. And I liked them say, as we get a closed eye on what is going on and would love to take advantage of the opportunities that would make sense for us to look at that.

One quick follow-up to that. In your last release, you said that when both your JV and the other project was done in China, is there any opportunities to grow in China to start shipping product in there? Are you seeing some of their smelters get up into the technology that the western smelters use?

We are definitely pursuing those opportunity as well, especially with some of the newer higher anchorage smelter part lines that will be built in China. I think we mentioned in the past we’ve already implemented sort of a technical private testing support there that we are utilizing in calling on the larger smelters that are both, in operation, as well as new projects coming on-stream. Going forward, that’s part of our strategy.

Gross profit percentage for global carbon material and chemicals in the first quarter of 2009 we’re little over 10%, compared to about 16% last year. And in railroad and utility products, its 14% compared to about 12.5%.

Thank you. And there appear to be no further questions. I’ll hand the call back to Walt Turner. Please go ahead, sir.

We certainly thank you for participating in today’s call and appreciate your continued interest in our company. You often hear us refer to the diversity of our end markets as a strength of confidence, and I believe you are seeing this benefit in 2009 as the strength of our railroad business is mitigating the negative impact of the global recession on our car material and chemical businesses. We see continued strong demand in our end markets in the long-term, particularly based on the committed aluminum capacity additions, coming online in the Middle East in 2009-2010. And we are very well positioned given the capacity additions we have in China. Our balance sheet strength should provide potential opportunities to stimulate growth or create shareholder value in the future. And finally, we remain firmly committed to enhancing our shareholder value by executing our strategy of providing our customers with the highest quality products and services while continuing to focus on our safety, healthy and environmental issues. We certainly look forward to speaking to you again in the near future. Thank you very much.

And this concludes the Koppers first quarter earnings conference call. Thank you for your participation. And you may now disconnect.