Document DvgVEOapnaDVvywaERq4mzaMM

12 Doscription Of KopporS BusiflQSS General Development ot Koppers Koppers Comcany. inc. was incorporated on Seoiemcer 30. 1944 under the laws of me State of Delaware Cn November 10. 1944. it succeedeo by me'ger to me properties and business ot tour predecessor compa nies. Those comoanies grew logically out of Koppers original business, estaolisheo m 1907. to cesign ano ouiid chemical-recovery coke plants for tne American steel inoustry. The accounts of all subsidiaries listed on page 56 are consolidated with Koopers fi nancial statements for reporting purposes. References in this report to the business or accounts of "Keepers" or "Company" in clude the parent company, the listed subsidi aries on page 56 and certain other, small subsidiaries not listed. Prior to 1965. Koppers was highly de pendent upon its original steel plant con struction business for earnings growth. This accounted for as much as 40% of tne Com pany's annual earnings, it was a cyclical business that had a disconcerting roller coaster effect on the Company's growth prospects. in 1965, the Company began to build a manufacturing organization that would pro duce consistent earnings growth and thereby reduce Koppers dependence upon the steel industry capital investment cycle. Koppers today is a diversified manufacturing corpora tion offering specialized engineering and construction capabilities that, over the past five years, have accounted for less than 10% of the Company's total operating in come. Headquartered in Pittsburgh, Pennsyl vania. it nas 279 operating locations and makes more than 100 types of products. These are sold into numerous end mantels: the primary end markets are listed on page 10. Pursuit of the Company's obiective to expano ns manufacturing businesses to achieve consistent earnings growth nas ceen characterized by rising levels of capital in vestment. The chart on page 2 shows me significant growth of the Company's capital expenditures, financed principally througn re tained earnings and a prudent increase m the level of debt. This expansion program has increased the total investment in Koppers operating units from SI90 million in 1964 to S763 mil lion at the close of 1978. The tables at the start of each group discussion in this section indicate the level of investment in each busi ness segment. In addition, the operations of Koppers business segments are desenbeo in this section. As the result of Koppers aggressive in vestment program, total manufacturing saies have grown each year since 1965. The ac companying chart analyzes Koppers saies growth from an internal and external growth standpoint. The 14-year performance of op erations that compose Koppers today-- shown by the three lower sections of me chart--traces an annual average com pounded growth rate of 13% since 1964. Excluding sales contributed by all acquisitions since 1964. Koppers internal growth rate has averaged 9.5% per year. The manufacturing portion of this internal growth has averaged 10% per year since 1964. Koppers earnings have improved m 11 of the 14 years since Koppers began expan sion of its manufacturing base, growing at a 13% average annual rate. Koppers Sales Growth--Internal vs. External ($ Millions) SI.600 84 65 66 67 68 69 70 71 72 73 74 75 76 77 78