Form 8-K SunCoke Energy, Inc. For: Dec 15

�

�

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

�

�

FORM 8-K

�

�

CURRENT REPORT

Pursuant to Section�13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): December�15, 2014

�

�

SUNCOKE ENERGY, INC.

(Exact name of registrant as specified in its charter)

�

�

�

Delaware	�	001-35243	�	90-0640593
(State of Incorporation)	�	(Commission File Number)	�	(IRS Employer Identification No.)

�

1011 Warrenville Road, Suite 600 Lisle, Illinois	�	60532
(Address of principal executive offices)	�	(Zip code)

Registrant�s telephone number, including area code: (630)�824-1000

Not Applicable

(Former name or former address, if changed since last report)

�

�

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

�

�	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

�

�	Soliciting material pursuant to Rule�14a-12 under the Exchange Act (17 CFR 240.14a-12)

�

�	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

�

�	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

�

�

�

---

Item�2.05. Costs Associated with Exit or Disposal Activities

On December�15, 2014, SunCoke Energy, Inc. (the �Company�) announced the implementation of a phased plan to scale back its Coal Mining business, while continuing to pursue opportunities to sell all or a portion of that business. The Company�s initial actions include elimination of approximately 175 positions, idling of certain mines and reduction of annual mid-vol coal production from approximately 1.1�million tons to about 500�thousand tons. If the Company does not succeed in selling its Coal Mining business and mining becomes less economical than procuring coal from third-party sources, the Company may idle its remaining mines, demolish its existing coal preparation plant and purchase the coal requirements for its Jewell Coke cokemaking facility from third-parties.

In connection with these actions, the Company expects to incur one-time cash costs of $25 million to $35 million, including:

�

�

(a)

previously disclosed estimated expense of $10 million, relating mainly to contract terminations, to be incurred primarily in fourth quarter 2014;

�

�

(b)

anticipated employee severance and other one-time costs to idle mines of $10 million to $15 million, to be recognized in fourth quarter 2014 and early 2015; and

�

�

(c)

expected capital expenditures of $5 million to $10 million in 2015 to demolish the existing coal preparation plant and install additional coal handling and storage units to enable third-party coal purchases for the Company�s Jewell Coke cokemaking facility.

In addition, the Company expects to recognize non-cash charges related to workers� compensation, asset reclamation, black lung liability and other post-employment benefits liabilities. The Company estimates that, due to anticipated changes in discount rates and claim approval rates, its incremental black lung charge in fourth quarter 2014 will be approximately $15 million versus the original estimate of $8 million.

A copy of the press release announcing these actions is attached hereto as Exhibit 99.1, and is incorporated herein by reference.

Item�2.06. Material Impairments.

In addition to the actions referenced in Item�2.05 (�Costs Associated with Exit or Disposal Activities�) above, the Company also intends to evaluate the long-lived assets of its Coal Mining business to determine if the carrying value of such assets is recoverable.

Safe Harbor Statement

Statements contained in this report, or in the exhibit to this report, that state the Company�s or management�s expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The Company�s actual results could differ materially from those projected in such forward-looking statements. Factors that could affect those results include those mentioned in the documents that the Company has filed with the Securities and Exchange Commission.

---

Item�9.01 Financial Statements and Exhibits.

(d) Exhibits

�

Exhibit No.	��	Description
99.1	��	SunCoke Energy, Inc. Press Release (December 15, 2014).

---

SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

�

Date: December�15, 2014

---

EXHIBIT INDEX

�

Exhibit No.	��	Exhibit
99.1	��	SunCoke Energy, Inc. press release (December 15, 2014)

Exhibit 99.1

�

Investors:

Lisa Ciota: 630-824-1907

Media:

Steve Carlson: 630-824-1783

SUNCOKE ENERGY, INC. BEGINS EXECUTING CONTINGENCY PLAN

TO DOWNSIZE COAL MINING BUSINESS

�

�

�

�

Taking immediate action to reduce coal production by more than 50�percent and substantially decrease cash loss related to Coal Mining business

�

�

�

�

Evaluating further options for the continued wind-down of Coal Mining business

�

�

�

�

Continuing to pursue opportunities to sell all or a portion of Coal Mining business

Lisle, IL [December 15, 2014] � SunCoke Energy, Inc. (NYSE: SXC) today announced it is executing a phased plan to scale back its Coal Mining business.

�While we plan to continue pursuing opportunities to sell all or a portion of our Coal Mining business, the challenging coal price environment has led us to make these hard decisions,� said Fritz Henderson, Chairman and Chief Executive Officer of SunCoke Energy, Inc. �I�ve been very impressed by and thankful for the leadership and commitment of our coal team, which has consistently achieved high levels of productivity, safety and regulatory compliance during this difficult time. However, idling a significant portion of the Coal Mining business is the right step going forward and allows us to focus on our core competencies of processing and handling raw materials for industrial customers.�

Our initial actions include immediately idling certain mines to reduce coal production from approximately 1.1�million annual tons to about 500�thousand annual tons of mid-vol coal and eliminating approximately 175 positions. In the short term, we expect to continue to mine about 500�thousand annual tons as we pursue a sale or explore other alternatives such as potentially retaining contractors to mine on our behalf or purchasing all our coal requirements to supply our Jewell Coke facility. We also plan to reduce operations at our coal preparation plant by 50�percent to further reduce costs.

While we expect our downsizing plan to significantly reduce the ongoing cost to supply coal to our Jewell Coke operations, in light of current coal market conditions, we will continue to incur costs whether we mine the mid-vol portion of Jewell Coke�s coal supply requirements or purchase all coal from third-parties. If we are ultimately unsuccessful in selling the Coal Mining

---

SunCoke Energy, Inc.

Page | 2

�

business and mining mid-vol coal becomes less economic than procuring from third-party sources, we may decide to idle the remaining mines, demolish the preparation plant and purchase all Jewell Coke coal requirements from third-parties. The anticipated impact to Jewell Coke of purchasing 100%�third-party coal is estimated to be approximately $20 million annually, primarily due to incremental coal transportation and material handling costs. This is approximately $20 million favorable to the anticipated cash loss of continuing to operate the Coal Mining business absent any wind down actions.

We expect to incur one-time cash costs of $25 million to $35 million related to our plans to downsize our coal operations including:

�

�

�

�

The previously disclosed estimated expense of approximately $10�million primarily related to contract terminations, which will be incurred primarily in fourth quarter 2014

�

�

�

�

Anticipated employee severance and other one-time costs to idle mines of $10 million to $15 million to be recognized in fourth quarter 2014 and early 2015

�

�

�

�

Expected capital expenditures of $5 million to $10 million in 2015 to demolish our coal preparation plant and install additional coal handling and storage to enable third-party coal purchases for our Jewell facility.

In view of our Coal Mining business downsizing plans, we expect to recognize non-cash charges related to workers� compensation, asset reclamation, black lung liability and other post-employment benefits liabilities. Further, we will also evaluate the recoverability of the long-lived assets of the Coal Mining business to determine if the carrying value of the assets is recoverable. Unrelated to the coal downsizing plans, we now estimate that due to anticipated changes in discount rates and claim approval rates our incremental black lung charge in the fourth quarter will be approximately $15 million versus our original estimate of $8 million.

UPCOMING EVENTS

We plan to issue fourth quarter 2014 earnings and provide 2015 guidance before market opens on Thursday, January�29, 2015. Also on this date, we expect to host an investor conference call, which will be webcast live and archived for replay on www.suncoke.com. Times and dial-in information for these conference calls and webcasts will be provided in early January 2015.

SUNCOKE ENERGY, INC.

SunCoke Energy, Inc. is the largest independent producer of coke in the Americas, with 50 years of experience supplying coke to the integrated steel industry. Our advanced, heat-recovery cokemaking process produces high-quality coke for use in steelmaking, typically captures waste heat for derivative energy resale and meets or exceeds environmental standards. Our U.S. cokemaking facilities are located in Virginia, Indiana, Ohio and Illinois. Outside the U.S., we have cokemaking operations in Vitoria, Brazil and Odisha, India. Our coal mining operations, which

---

SunCoke Energy, Inc.

Page | 3

�

have more than 110�million tons of proven and probable reserves, are located in Virginia and West Virginia. In addition, through our 56 percent ownership of SXCP, we have an interest in SXCP�s coal logistics business, which has the collective capacity to blend and transload more than 30�million tons of coal annually. To learn more about SunCoke Energy, Inc., visit our website at www.suncoke.com.

FORWARD LOOKING STATEMENTS

Some of the statements included in this press release constitute �forward looking statements� (as defined in Section�27A of the Securities Act of 1933, as amended and Section�21E of the Securities Exchange Act of 1934, as amended). Forward-looking statements include all statements that are not historical facts and may be identified by the use of such words as �believe,� �expect,� �plan,� �project,� �intend,� �anticipate,� �estimate,� �predict,� �potential,� �continue,� �may,� �will,� �should� or the negative of these terms or similar expressions. Forward-looking statements are inherently uncertain and involve significant known and unknown risks and uncertainties (many of which are beyond the control of the Company) that could cause actual results to differ materially.

Such risks and uncertainties include, but are not limited to domestic and international economic, political, business, operational, competitive, regulatory and/or market factors affecting the Company, as well as uncertainties related to: pending or future litigation, legislation, or regulatory actions; liability for remedial actions or assessments under existing or future environmental regulations; gains and losses related to acquisition, disposition or impairment of assets; recapitalizations; access to, and costs of, capital; the effects of changes in accounting rules applicable to the Company; and changes in tax, environmental and other laws and regulations applicable to the Company�s businesses.

Forward-looking statements are not guarantees of future performance, but are based upon the current knowledge, beliefs and expectations of Company management, and upon assumptions by the Company concerning future conditions, any or all of which ultimately may prove to be inaccurate. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company does not intend, and expressly disclaims any obligation, to update or alter its forward-looking statements (or associated cautionary language), whether as a result of new information, future events or otherwise after the date of this press release except as required by applicable law.

In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company has included in its filings with the Securities and Exchange Commission cautionary language identifying important factors (but not necessarily all the important factors) that could cause actual results to differ materially from those expressed in any forward-looking

---

SunCoke Energy, Inc.

Page | 4

�

statement made by the Company. For information concerning these factors, see the Company�s Securities and Exchange Commission filings such as its annual and quarterly reports and current reports on Form 8-K, copies of which are available free of charge on the Company�s website at www.suncoke.com. All forward-looking statements included in this press release are expressly qualified in their entirety by such cautionary statements. Unpredictable or unknown factors not discussed in this release also could have material adverse effects on forward-looking statements.

###

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• NOVAGOLD Announces Date of its 2024 Virtual Annual General Meeting of Shareholders
• ROSEN, TOP RANKED INVESTOR COUNSEL, Encourages Shoals Technologies Group, Inc. Investors to Secure Counsel Before Important Deadline in Securities Class Action – SHLS
• Relay Resources Welcomes New Chief Revenue Officer to Leadership Team