Form 8-K SunCoke Energy, Inc. For: Jul 26

 

 

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): July 26, 2018

 

 

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 

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Item 2.02.

Results of Operations and Financial Condition.

On July 26, 2018, SunCoke Energy, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter of 2018. A copy of this press release is attached as Exhibit 99.1 and is incorporated herein by reference.

 

Item 7.01.

Regulation FD Disclosure.

As noted above, on July 26, 2018, the Company issued a press release announcing its financial results for the second quarter of 2018. Additional information concerning the Company’s financial results for the second quarter of 2018 will be presented in a slide presentation to investors during a previously announced teleconference on July 26, 2018. A copy of the slide presentation is attached as Exhibit 99.2 and is incorporated herein by reference.

The information in this report, being furnished pursuant to Items 2.02, 7.01 and 9.01 of Form 8-K, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and is not incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Safe Harbor Statement

Statements contained in the exhibits 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.

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Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit     No.		Description
99.1		SunCoke Energy, Inc. Press Release, announcing earnings (July 26, 2018).
99.2		SunCoke Energy, Inc. Slide Presentation regarding earnings (July 26, 2018).

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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: July 26, 2018

Exhibit 99.1

 

Investors and Media:

Andy Kellogg & Kory Kutzke

(630) 824-1907

SUNCOKE ENERGY, INC. ANNOUNCES STRONG SECOND QUARTER 2018 RESULTS

 

•

Net income attributable to SXC was $4.2 million, or $0.06 per share, and operating cash flow was $28.0 million in the current period

 

•

Adjusted EBITDA for the quarter was $67.3 million, up $19.8 million or 42 percent, versus the prior year period driven by strong Domestic Coke performance and record volumes in our Logistics business

 

•

Reaffirm full-year 2018 Consolidated Adjusted EBITDA guidance of $240 million to $255 million

LISLE, Ill. (July 26, 2018) - SunCoke Energy, Inc. (NYSE: SXC) today reported results for the second quarter 2018, which reflect significant year-over-year improvement across our operating segments.

“We are pleased with our strong second quarter 2018 operating results in both the coke and logistics businesses. We continue to execute against our 2018 objectives and remain solidly on pace to achieve our full-year Adjusted EBITDA guidance,” said Mike Rippey, President and Chief Executive Officer of SunCoke Energy, Inc.

The Company continued to execute its Indiana Harbor oven rebuild initiative during the second quarter. At the end of the second quarter, we had completed 21 of the 67 A-battery oven rebuilds and remain on schedule to complete all A-battery ovens by the end of November. Rippey commented, “We are encouraged with our progress to date. The rebuilt ovens continue to demonstrate good performance, which has resulted in significantly increased production and higher coal-to-coke yields.”

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SECOND QUARTER CONSOLIDATED RESULTS

 

		Three Months Ended June 30,
(Dollars in millions)		2018				2017				Increase
Revenues		$	367.0			$	323.2			$	43.8
Adjusted EBITDA(1)		$	67.3			$	47.5			$	19.8
Net income (loss) attributable to SXC		$	4.2			$	(24.2	)		$	28.4

 

(1)	See definition of Adjusted EBITDA and reconciliation elsewhere in this release.

Revenues during the second quarter 2018 increased $43.8 million compared to the prior year period, primarily reflecting higher sales volumes and the pass-through of higher coal prices in our Domestic Coke segment as well as record sales volumes at CMT.

Adjusted EBITDA during the second quarter 2018 increased $19.8 million to $67.3 million, primarily due to improved sales volumes at our Domestic Coke and Logistics segments.

Net income attributable to SXC was $4.2 million, or $0.06 per share, for the second quarter 2018, which was favorable by $28.4 million as compared to the second quarter 2017 loss of $24.2 million, or $0.38 per share. The improvement was driven by improved operating results in the current period discussed above as well as the absence of the loss on extinguishment of debt attributable to SXC of $11.6 million related to the Company and the Partnership’s refinancing activities in the prior year period.

SECOND QUARTER SEGMENT RESULTS

Domestic Coke

Domestic Coke consists of cokemaking facilities and heat recovery operations at our Jewell, Indiana Harbor, Haverhill, Granite City and Middletown plants.

 

		Three Months Ended June 30,
(Dollars in millions, except per ton amounts)		2018				2017				Increase
Revenues		$	328.7			$	296.5			$	32.2
Adjusted EBITDA(1)		$	52.9			$	44.0			$	8.9
Sales volumes (thousands of tons)			1,007				953				54
Adjusted EBITDA per ton(2)		$	52.53			$	46.17			$	6.36

 

(1)	See definition of Adjusted EBITDA and reconciliation elsewhere in this release.

(2)	Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke sales volumes.

 

•

Revenues increased $32.2 million primarily reflecting the pass-through of higher coal prices as well as higher sales volumes.

 

•

Adjusted EBITDA increased $8.9 million primarily driven by improved results at our Indiana Harbor facility of $5.5 million. Higher volumes and improved operating performance from our rebuilt ovens coupled with favorable contractual operating and maintenance recovery contributed to this year-over-year increase. Additionally, Adjusted EBITDA at our remaining Domestic Coke facilities increased by $3.4 million, primarily driven by $3.6 million of higher sales volumes, improved operational coal-to-coke yields and favorable energy prices. Comparisons between periods were also impacted by the timing and scope of planned outages and the absence of under-recovered coal costs from unfulfilled coal supply commitments, which provided a benefit of $3.4 million and $1.4 million, respectively, to Adjusted

 

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EBITDA as compared to the prior year period. These improvements were partially offset by $4.8 million of higher maintenance and operating costs during the second quarter 2018 compared to prior year period.

Logistics

Logistics consists of the handling and mixing services of coal and other aggregates operated by SunCoke Energy Partners, L.P. at our Convent Marine Terminal (“CMT”), Lake Terminal and Kanawha River Terminals (“KRT”). Additionally, Dismal River Terminal (“DRT”) is operated by SXC.

 

		Three Months Ended June 30,
(Dollars in millions)		2018				2017				Increase (Decrease)
Revenues		$	28.1			$	16.2			$	11.9
Intersegment sales		$	5.5			$	5.1			$	0.4
Adjusted EBITDA(1)		$	19.7			$	10.0			$	9.7
Tons handled (thousands of tons)(2)			6,980				5,173				1,807
CMT take-or-pay shortfall tons (thousands of tons)(3)			63				956				(893	)

 

(1)	See definition of Adjusted EBITDA and reconciliation elsewhere in this release.

(2)	Reflects inbound tons handled during the period.

(3)	Reflects tons billed under take-or-pay contracts where services have not yet been performed.

 

•

Revenues and Adjusted EBITDA increased by $11.9 million and $9.7 million, respectively, driven primarily by record sales volumes at CMT in the current year period. CMT had minimal take-or-pay shortfall tons from our long-term, take-or-pay arrangements at the end of the second quarter 2018 with no shortfall tons attributable to our two largest coal export customers.

Brazil Coke

Brazil Coke consists of a cokemaking facility in Vitória, Brazil, which we operate for an affiliate of ArcelorMittal.

 

•

Revenues and Adjusted EBITDA were $10.2 million and $4.8 million, respectively, and were comparable with the prior year period.

Corporate and Other

Corporate and other expenses, which include costs related to our legacy coal mining business, were $10.1 million in second quarter 2018, an improvement of $0.9 million versus second quarter 2017, primarily driven by lower employee-related costs.

 

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2018 OUTLOOK

Our 2018 guidance is as follows:

 

•

Domestic coke production is expected to be approximately 3.9 million tons

 

•

Consolidated Adjusted EBITDA is expected to be between $240 million to $255 million

 

•

Adjusted EBITDA attributable to SXC is expected to be between $160 million and $171 million, reflecting the impact of public ownership in SXCP

 

•

Capital expenditures are projected to be approximately $95 million, including $25 to $30 million related to our Indiana Harbor oven rebuild project and approximately $35 million related to our Granite City gas sharing project

 

•

Cash generated by operations is estimated to be between $150 million and $165 million

 

•

Cash taxes are projected to be between $7 million and $14 million

RELATED COMMUNICATIONS

We will host our quarterly earnings call at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) today. The conference call will be webcast live and archived for replay in the Investors section of www.suncoke.com. Investors may participate in this call by dialing 1-833-236-5757 in the U.S. or 1-647-689-4185 if outside the U.S., confirmation code 8552559.

SUNCOKE ENERGY, INC.

SunCoke Energy, Inc. (NYSE: SXC) supplies high-quality coke to the integrated steel industry under long-term, take-or-pay contracts that pass through commodity and certain operating costs to customers. We utilize an innovative heat-recovery cokemaking technology that captures excess heat for steam or electrical power generation. We are the sponsor of SunCoke Energy Partners, L.P. (“Partnership”) (NYSE: SXCP), a publicly traded master limited partnership. At June 30, 2018, we owned the general partner of the Partnership, which consists of a 2.0 percent ownership interest and incentive distribution rights, and owned a 60.4 percent limited partner interest in the Partnership. Our cokemaking facilities are located in Illinois, Indiana, Ohio, Virginia and Brazil. To learn more about SunCoke Energy, Inc., visit our website at www.suncoke.com.

DEFINITIONS

 

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Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted for any impairments, loss (gain) on extinguishment of debt, changes to our contingent consideration liability related to our acquisition of CMT and/or loss on the disposal of our interest in VISA SunCoke. EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or operating income under GAAP and may not be comparable to other similarly titled measures in other businesses. Management believes Adjusted EBITDA is an important measure of the operating performance and liquidity of the Company’s net assets and its ability to incur and service debt, fund capital expenditures and make distributions. Adjusted EBITDA provides useful information to investors because it highlights trends in our business that may not otherwise be apparent when relying solely on GAAP measures and because it eliminates items that have less bearing on our operating performance and liquidity. EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, and they should not be considered a substitute for net income, operating cash flow or any other measure of financial performance presented in accordance with GAAP.

 

•

Adjusted EBITDA attributable to SXC represents Adjusted EBITDA less Adjusted EBITDA attributable to noncontrolling interests.

 

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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 SXC) 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 SXC, 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 SXC; and changes in tax, environmental and other laws and regulations applicable to SXC’s businesses.

Forward-looking statements are not guarantees of future performance, but are based upon the current knowledge, beliefs and expectations of SXC management, and upon assumptions by SXC 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. SXC 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, SXC 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 statement made by SXC. For information concerning these factors, see SXC’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 SXC’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.

 

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SunCoke Energy, Inc.

Consolidated Statements of Operations

(Unaudited)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2018				2017				2018				2017
		(Dollars and shares in millions, except per share amounts)
Revenues
Sales and other operating revenue		$	367.0			$	323.2			$	717.5			$	632.9
Costs and operating expenses
Cost of products sold and operating expenses			282.7				257.0				553.3				491.2
Selling, general and administrative expenses			17.6				24.0				33.5				43.6
Depreciation and amortization expense			32.0				33.3				64.9				66.6
Total costs and operating expenses			332.3				314.3				651.7				601.4
Operating income			34.7				8.9				65.8				31.5
Interest expense, net			15.7				15.5				31.5				29.5
Loss on extinguishment of debt			—				20.2				0.3				20.3
Income (loss) before income tax expense			19.0				(26.8	)			34.0				(18.3	)
Income tax expense			2.2				4.7				4.2				70.9
Loss from equity method investment			5.4				—				5.4				—
Net income (loss)			11.4				(31.5	)			24.4				(89.2	)
Less: Net income (loss) attributable to noncontrolling interests			7.2				(7.3	)			11.5				(66.0	)
Net income (loss) attributable to SunCoke Energy, Inc.		$	4.2			$	(24.2	)		$	12.9			$	(23.2	)
Earnings (loss) attributable to SunCoke Energy, Inc. per common share:
Basic		$	0.06			$	(0.38	)		$	0.20			$	(0.36	)
Diluted		$	0.06			$	(0.38	)		$	0.20			$	(0.36	)
Weighted average number of common shares outstanding:
Basic			64.7				64.3				64.6				64.3
Diluted			65.6				64.3				65.5				64.3

 

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SunCoke Energy, Inc.

Consolidated Balance Sheets

 

		June 30, 2018				December 31, 2017
		(Unaudited)
		(Dollars in millions, except par value amounts)
Assets
Cash and cash equivalents		$	143.0			$	120.2
Receivables			80.5				68.5
Inventories			116.4				111.0
Income tax receivable			4.8				4.8
Other current assets			9.5				6.7
Total current assets			354.2				311.2
Properties, plants and equipment (net of accumulated depreciation of $792.1 and $733.2 million at June 30, 2018 and December 31, 2017, respectively)			1,487.9				1,501.3
Goodwill			76.9				76.9
Other intangible assets, net			162.3				167.9
Deferred charges and other assets			3.0				2.8
Total assets		$	2,084.3			$	2,060.1
Liabilities and Equity
Accounts payable		$	134.8			$	115.5
Accrued liabilities			44.4				53.2
Deferred revenue			3.2				1.7
Current portion of long-term debt and financing obligation			3.8				2.6
Interest payable			4.1				5.4
Total current liabilities			190.3				178.4
Long-term debt and financing obligation			860.0				861.1
Accrual for black lung benefits			45.9				44.9
Retirement benefit liabilities			27.1				28.2
Deferred income taxes			257.8				257.8
Asset retirement obligations			14.2				14.0
Other deferred credits and liabilities			16.6				16.1
Total liabilities			1,411.9				1,400.5
Equity
Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no issued shares at both June 30, 2018 and December 31, 2017			—				—
Common stock, $0.01 par value. Authorized 300,000,000 shares; issued 72,205,859 and 72,006,905 shares at June 30, 2018 and December 31, 2017, respectively			0.7				0.7
Treasury stock, 7,477,657 shares at both June 30, 2018 and December 31, 2017			(140.7	)			(140.7	)
Additional paid-in capital			487.3				486.2
Accumulated other comprehensive loss			(13.5	)			(21.2	)
Retained earnings			114.1				101.2
Total SunCoke Energy, Inc. stockholders’ equity			447.9				426.2
Noncontrolling interests			224.5				233.4
Total equity			672.4				659.6
Total liabilities and equity		$	2,084.3			$	2,060.1

 

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SunCoke Energy, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

 

		Six Months Ended June 30,
		2018				2017
		(Dollars in millions)
Cash Flows from Operating Activities:
Net income (loss)		$	24.4			$	(89.2	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense			64.9				66.6
Deferred income tax expense			0.3				79.8
Payments in excess of expense for postretirement plan benefits			(1.1	)			(1.2	)
Share-based compensation expense			1.6				3.0
Loss on extinguishment of debt			0.3				20.3
Loss from equity method investment			5.4				—
Changes in working capital pertaining to operating activities:
Receivables			(12.0	)			(4.6	)
Inventories			(5.4	)			(23.9	)
Accounts payable			16.8				15.6
Accrued liabilities			(9.0	)			(6.2	)
Deferred revenue			1.5				9.5
Interest payable			(1.3	)			(9.6	)
Income taxes			—				(11.9	)
Other			(1.1	)			6.2
Net cash provided by operating activities			85.3				54.4
Cash Flows from Investing Activities:
Capital expenditures			(43.6	)			(22.4	)
Sale of equity method investment			4.0				—
Return of Brazilian investment			—				20.5
Other investing activities			0.3				—
Net cash used in investing activities			(39.3	)			(1.9	)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt			45.0				620.6
Repayment of long-term debt			(45.2	)			(532.2	)
Debt issuance costs			(0.5	)			(15.6	)
Proceeds from revolving credit facility			92.5				128.0
Repayment of revolving credit facility			(92.5	)			(200.0	)
Repayment of financing obligation			(1.3	)			(1.2	)
Acquisition of additional interest in the Partnership			(4.2	)			(24.6	)
Cash distribution to noncontrolling interests			(17.7	)			(24.6	)
Other financing activities			0.7				(0.3	)
Net cash used in financing activities			(23.2	)			(49.9	)
Net increase in cash, cash equivalents and restricted cash			22.8				2.6
Cash, cash equivalents and restricted cash at beginning of period			120.2				134.5
Cash, cash equivalents and restricted cash at end of period		$	143.0			$	137.1
Supplemental Disclosure of Cash Flow Information
Interest paid		$	31.8			$	37.2
Income taxes paid, net of refunds of $1.3 million and $0.1 million in 2018 and 2017, respectively		$	4.4			$	3.1

 

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SunCoke Energy, Inc.

Segment Financial and Operating Data

The following tables set forth financial and operating data for the three and six months ended June 30, 2018 and 2017:

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2018				2017				2018				2017
		(Dollars in millions, except per ton amounts)
Sales and other operating revenues:
Domestic Coke		$	328.7			$	296.5			$	646.8			$	575.2
Brazil Coke			10.2				10.5				20.3				21.3
Logistics			28.1				16.2				50.4				36.4
Logistics intersegment sales			5.5				5.1				10.9				10.2
Elimination of intersegment sales			(5.5	)			(5.1	)			(10.9	)			(10.2	)
Total sales and other operating revenues		$	367.0			$	323.2			$	717.5			$	632.9
Adjusted EBITDA(1):
Domestic Coke		$	52.9			$	44.0			$	107.2			$	93.7
Brazil Coke			4.8				4.5				9.5				8.9
Logistics			19.7				10.0				33.3				23.1
Corporate and Other(2)			(10.1	)			(11.0	)			(18.7	)			(22.6	)
Total Adjusted EBITDA		$	67.3			$	47.5			$	131.3			$	103.1
Coke Operating Data:
Domestic Coke capacity utilization			94	%			90	%			93	%			90	%
Domestic Coke production volumes (thousands of tons)			999				950				1,961				1,898
Domestic Coke sales volumes (thousands of tons)			1,007				953				1,981				1,899
Domestic Coke Adjusted EBITDA per ton(3)		$	52.53			$	46.17			$	54.11			$	49.34
Brazilian Coke production—operated facility (thousands of tons)			431				437				872				872
Logistics Operating Data:
Tons handled (thousands of tons)(4)			6,980				5,173				12,801				10,892
CMT take-or-pay shortfall tons (thousands of tons)(5)			63				956				126				1,500

 

(1)	See definition of Adjusted EBITDA and reconciliation to GAAP elsewhere in this release.

(2)

Corporate and Other includes the activity from our legacy coal mining business, which contributed Adjusted EBITDA losses of $2.4 million and $4.7 million during the three and six months ended June 30, 2018, respectively, as well as $2.7 million and $6.2 million million during the three and six months ended June 30, 2017, respectively.

(3)	Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke sales volumes.

(4)	Reflects inbound tons handled during the period.

(5)	Reflects tons billed under take-or-pay contracts where services have not yet been performed.

 

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SunCoke Energy, Inc.

Reconciliations of Non-GAAP Information

Net Cash Provided by Operating Activities

to Net Income and Adjusted EBITDA

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2018				2017				2018				2017
		(Dollars in millions)
Net cash provided by operating activities		$	28.0			$	24.9			$	85.3			$	54.4
Subtract:
Depreciation and amortization expense			32.0				33.3				64.9				66.6
Deferred income tax expense			0.1				14.0				0.3				79.8
Loss on extinguishment of debt			—				20.2				0.3				20.3
Loss from equity method investment(1)			5.4				—				5.4				—
Changes in working capital and other			(20.9	)			(11.1	)			(10.0	)			(23.1	)
Net income (loss)		$	11.4			$	(31.5	)		$	24.4			$	(89.2	)
Add:
Depreciation and amortization expense		$	32.0			$	33.3			$	64.9			$	66.6
Interest expense, net(2)			15.7				15.2				31.5				28.9
Loss on extinguishment of debt			—				20.2				0.3				20.3
Income tax expense			2.2				4.7				4.2				70.9
Contingent consideration adjustments			0.6				0.3				0.6				0.3
Loss from equity method investment			5.4				—				5.4				—
Expiration of land deposits and write-off of costs related to potential new cokemaking facility(3)			—				5.3				—				5.3
Adjusted EBITDA			67.3				47.5				131.3				103.1
Subtract: Adjusted EBITDA attributable to noncontrolling interest(4)			21.6				17.5				40.6				39.1
Adjusted EBITDA attributable to SunCoke Energy, Inc.		$	45.7			$	30.0			$	90.7			$	64.0

 

(1)	In June 2018, the Company recorded a loss in connection with the disposal of our interest in VISA SunCoke Limited.

(2)

In conjunction with the adoption of ASU 2017-07, the non-service type expense associate with the postretirement benefit plans was excluded from operating income and recorded in interest expense, net on the Consolidated Statements of Operations during the periods presented. Amounts in prior periods were immaterial, and therefore, were not reclassified in the reconciliation of Adjusted EBITDA to net income and net cash provided by operating activities.

(3)	During the second quarter of 2017, the Company wrote-off previously capitalized engineering and land deposit costs of $5.3 million.

(4)	Reflects noncontrolling interest in Indiana Harbor and the portion of the Partnership owned by public unitholders.

 

10

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SunCoke Energy, Inc

Reconciliation of Non-GAAP Information

Estimated 2018 Net Cash Provided by Operating Activities to Estimated Net Income

and Estimated Consolidated Adjusted EBITDA

 

		2018
		Low				High
Net cash provided by operating activities		$	150			$	165
Subtract:
Depreciation and amortization expense			137				129
Changes in working capital and other			(22	)			(14	)
Loss from equity method investment			5				5
Net income		$	30			$	45
Add:
Loss from equity method investment			5				5
Depreciation and amortization expense			137				129
Interest expense, net			63				63
Income tax expense			5				13
Adjusted EBITDA		$	240			$	255
Subtract:
Adjusted EBITDA attributable to noncontrolling interests(1)			80				84
Adjusted EBITDA attributable to SunCoke Energy, Inc.		$	160			$	171

 

(1)	Reflects non-controlling interest in Indiana Harbor and the portion of the Partnership owned by public unitholders.

 

11

SunCoke Energy, Inc. Q2 2018 Earnings Conference Call July 26, 2018 Exhibit 99.2

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Forward-Looking Statements This slide presentation should be reviewed in conjunction with the Second Quarter 2018 earnings release of SunCoke Energy, Inc. (SXC) and conference call held on July 26, 2018 at 11:00 a.m. ET. Except for statements of historical fact, information contained in this presentation constitutes “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. Such forward-looking statements are based upon information currently available, and express management’s opinions, expectations, beliefs, plans, objectives, assumptions or projections with respect to anticipated future performance of SXC or SunCoke Energy Partners, L.P. (SXCP). These statements are not guarantees of future performance and undue reliance should not be placed on them. Although management believes that its plans, intentions and expectations reflected in, or suggested by, the forward-looking statements made in this presentation are reasonable, no assurance can be given that these plans, intentions or expectations will be achieved when anticipated or at all. Forward-looking statements often may be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “contemplate,” “estimate,” “predict,” “guidance,” “forecast,” “potential,” “continue,” “may,” “will,” “could,” “should,” or the negative of these terms or similar expressions. Such statements are subject to a number of known and unknown risks, and uncertainties, many of which are beyond the control of SXC and SXCP, or are difficult to predict, and may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Each of SXC and SXCP has included in its filings with the Securities and Exchange Commission (SEC) 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 statement. Such factors include, but are not limited to: changes in industry conditions; the ability to renew current customer, supplier and other material agreements; future liquidity, working capital and capital requirements; the ability to successfully implement business strategies and potential growth opportunities; the impact of indebtedness and financing plans, including sources and availability of third-party financing; possible or assumed future results of operations; the outcome of pending and future litigation; potential operating performance improvements and the ability to achieve anticipated cost savings from strategic revenue and efficiency initiatives. For more information concerning these factors, see the SEC filings of SXC and SXCP. All forward-looking statements included in this presentation are expressly qualified in their entirety by the cautionary statements contained in such SEC filings. The forward-looking statements in this presentation speak only as of the date hereof. Except as required by applicable law, SXC and SXCP do not have any intention or obligation to revise or update publicly any forward-looking statement (or associated cautionary language) made herein, whether as a result of new information, future events, or otherwise after the date of this presentation. This presentation includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Furthermore, the non-GAAP financial measures presented herein may not be consistent with similar measures provided by other companies. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided in the Appendix at the end of the presentation. Investors are urged to consider carefully the comparable GAAP measures and the reconciliations to those measures provided in the Appendix. These data should be read in conjunction with the periodic reports of SXC and SXCP previously filed with the SEC. Due to rounding, numbers presented throughout this presentation may not add up precisely to the totals indicated and percentages may not precisely reflect the absolute figures for the same reason. Industry and market data used in this presentation have been obtained from industry publications and sources as well as from research reports prepared for other purposes. SXC and SXCP have not independently verified the data obtained from these sources and cannot assure investors of either the accuracy or completeness of such data. SXC Q2 2018 Earnings Call

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Q2 2018 Highlights Safety and operating performance across coke and logistics fleet in line with expectations Strong Q2 ’18 Adj. EBITDA of $67.3M; ended quarter with ample liquidity of >$370M Remain on track with 2018 oven rebuild campaign at IHO; first set of completed ovens demonstrating solid operating performance CMT achieved its third consecutive quarter of record transloading volumes; increasing 2018 CMT total throughput volumes to 11.5Mt Remain well positioned to achieve FY 2018 Adj. EBITDA guidance of $240M to $255M SXC Q2 2018 Earnings Call

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Q2 2018 Financial Performance Please see appendix for a definition and reconciliation of Adjusted EBITDA. Coke Adjusted EBITDA includes Domestic Coke and Brazil Coke. Corporate and Other includes the results of our former coal mining business, which contributed Adjusted EBITDA losses of $2.4 million and $2.7 million to Corporate and Other during the three months ended June 30, 2018 and 2017, respectively. Q2 ‘18 EPS of $0.06 up from loss of $0.38 in the prior year quarter Strong cokemaking and logistic operating performance Absence of $11.6M loss on debt extinguishment related to Q2 ‘17 debt refinancing Consolidated Adj. EBITDA(1) of $67.3M up $19.8M or 42% Coke operations up $9.2M, driven by strong operating performance across the fleet Logistics increased $9.7M due to 1.8 million incremental throughput tons SXC Q2 2018 Earnings Call ($/share) ($ in millions) Earnings per Share (diluted) Consolidated Adj. EBITDA(1) Q2 2018 Earnings

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Adjusted EBITDA(1) – Q2 ‘17 to Q2 ‘18 Q2 ‘18 performance driven by strong domestic coke production and record CMT transloading volume Please see appendix for a definition and reconciliation of Adjusted EBITDA Corporate and Other includes the results of our former coal mining business, contributing Adjusted EBITDA losses of $2.4M and $2.7M to Corporate and Other during the three months ended June 30, 2018 and 2017, respectively. (1) (1) Primarily due to lower employee-related costs SXC Q2 2018 Earnings Call $3.1M – Strong volumes and yield from rebuilt ovens $2.2M – Benefit from increased O&M recovery Driven by record sales volumes at CMT ($1.2M) Higher maintenance and operating expenses partially offset by improved volumes, yield and energy revenue $3.4M – Impact of timing and scope of planned outages $1.4M – Absence of unfavorable coal cost recovery in Q2 2017 ($ in millions) (2)

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Domestic Coke Business Summary Q2 ‘18 cokemaking performance supports FY 2018 outlook Domestic Cokemaking Performance /ton /ton /ton /ton /ton 953K 975K 977K 974K Sales Tons (Production, Kt) 1,007K Delivered Adj. EBITDA/ton(1) of ~$53 on ~1.0 million tons of production Higher maintenance and operating costs partially offset by higher coke production and solid yield performance across Domestic Coke facilities Benefit from timing of planned outages and absence of unfavorable coal cost recovery in Q2 2017 Sustained operating performance from rebuilt ovens at IHO Rebuilt 21 of the 67 total ovens within our 2018 rebuild campaign Rebuilt ovens continue to perform as expected generating increased production and enhanced yield Please see appendix for a definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA per ton SXC Q2 2018 Earnings Call (1)

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Logistics Business Summary Improved Q2 ‘18 performance driven primarily by significant increase in CMT volumes M M M M M (Tons Handled, Kt) Logistics Performance $7.2M $9.7M $29.5M $12.0M CMT Adj. EBITDA $16.7M (1) (1) SXC Q2 2018 Earnings Call Adjusted EBITDA includes Logistics deferred revenue when it is recognized as GAAP revenue. Please see appendix for a definition and reconciliation of Adjusted EBITDA. Q4 2017 Adjusted EBITDA includes $16.4M recognition of previously deferred revenue related to take-or-pay shortfalls throughout 2017. (2) Delivered Q2 ‘18 Adj. EBITDA of $19.7M Increased volumes due to continued favorable coal export market dynamics Increase CMT 2018 base take-or-pay volumes to 10.0Mt; total throughput up to 11.5Mt CMT contributed $16.7M to Q2 ‘18 Adjusted EBITDA No take-or-pay volume shortfalls (e.g. deferred revenue) through the first half on coal export tons 300Kt merchant throughput tons in Q2 ’18 Costs associated with high water levels of $1.1M in the quarter ($1.8M YTD); water levels back to normal in middle of Q2 ‘18

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Q2 2018 Liquidity Maintain strong consolidated liquidity of >$370M, including >$200M of SXC standalone liquidity SXC Q2 2018 Earnings Call Distribution of $0.40/unit paid in Q2 ‘18 Consolidated Revolver Availability: $229M (Consolidated) Q2 ‘18 Total Debt $886M Gross Leverage(1) 3.58x Gross leverage for Q2 2018 calculated using midpoint of FY 2018E Consolidated Adjusted EBITDA guidance Strong Q2 operating performance Includes $26.3M semi-annual Senior Note interest payment $10.3M Granite City Remediation CapEx $9.4M IHO oven rebuild $7.9M Ongoing CapEx

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2018 Key Initiatives Drive strong operational and safety performance while optimizing asset utilization Deliver Operations Excellence and Optimize Asset Base Complete 67 planned A-battery oven rebuilds and deliver near-breakeven FY ‘18 Adj. EBITDA Complete 2018 Indiana Harbor Oven Rebuild Campaign Secure further new business to contribute towards $5M – $10M EBITDA target in next 2 years Leverage CMT Capabilities to Diversify Customer & Product Mix Achieve $240M – $255M Consol. Adj. EBITDA and $150M – $165M Op. Cash Flow guidance Accomplish 2018 Financial Objectives SXC Q2 2018 Earnings Call

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Questions

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Investor Relations 630-824-1907 www.suncoke.com

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Appendix

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Definitions Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted for any impairments, loss (gain) on extinguishment of debt, changes to our contingent consideration liability related to our acquisition of CMT and/or loss on the disposal of our interest in VISA SunCoke Limited. EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or operating income under GAAP and may not be comparable to other similarly titled measures in other businesses. Management believes Adjusted EBITDA is an important measure of the operating performance and liquidity of the Company's net assets and its ability to incur and service debt, fund capital expenditures and make distributions. Adjusted EBITDA provides useful information to investors because it highlights trends in our business that may not otherwise be apparent when relying solely on GAAP measures and because it eliminates items that have less bearing on our operating performance and liquidity. EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, and they should not be considered a substitute for net income, operating cash flow or any other measure of financial performance presented in accordance with GAAP. EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA attributable to SXC/SXCP represents Adjusted EBITDA less Adjusted EBITDA attributable to noncontrolling interests. Adjusted EBITDA/Ton represents Adjusted EBITDA divided by tons sold/handled. SXC Q2 2018 Earnings Call

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Reconciliation to Adjusted EBITDA The loss on extinguishment of debt was recorded in connection with the debt refinancing activities during the second quarter of 2017. In June 2018, the Company recorded a loss in connection with the disposal of our interest in VISA SunCoke Limited. In conjunction with the adoption of ASU 2017-07, the expense associate with the postretirement benefit plans was excluded from operating income and recorded in interest expense, net on the Consolidated Statements of Operations during the periods presented.  Amounts in prior periods were immaterial, and therefore, were not reclassified in the reconciliation of Adjusted EBITDA to net income and net cash provided by operating activities. During the second quarter of 2017, the Company wrote-off previously capitalized engineering and land deposit costs of $5.3 million. Reflects non-controlling interest in Indiana Harbor and the portion of the Partnership owned by public unitholders. SXC Q2 2018 Earnings Call

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Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per ton Q4 2017 Adjusted EBITDA includes $16.4M recognition of previously deferred revenue related to take-or-pay shortfalls throughout 2017. Corporate and Other includes the results of our legacy coal mining business. SXC Q2 2018 Earnings Call

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Balance Sheet & Debt Metrics Represents mid-point of FY 2018 guidance for Adj. EBITDA (Consolidated), Adj. EBITDA attributable to SXCP, and Adj. EBITDA attributable to SXC. SXC Q2 2018 Earnings Call

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2018 Guidance Summary Metric 2017 Results 2018 Guidance (published Jan. ‘18) Adjusted EBITDA(1) Consolidated Attrib. to SXC $234.7M $148.3M $240M – $255M $160M – $171M Capital Expenditures(2) $74.5M ~$95M Domestic Coke Production 3.86 Mt ~3.9 Mt Dom. Coke Adj. EBITDA/ton $49 / ton $50 – $52 / ton Operating Cash Flow $148.5M $150M – $165M Cash Taxes(3) $6.8M $7M – $14M Please see other appendix materials for a definition and reconciliation of Adjusted EBITDA. Includes CapEx for the Granite City gas sharing project of $18M and $35M for FY 2017 and 2018, respectively. Capital expenditures exclude the impact of capitalized interest. Included in Operating Cash Flow. Guidance remains unchanged from January 2018 announcement SXC Q2 2018 Earnings Call

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2018 Capital Expenditures SXC Q2 2018 Earnings Call 2017 ongoing CapEx includes approximately $51M in ongoing Coke Capex and $3M ongoing Logistics. Anticipate IHO Oven Rebuild CapEx to be between $25M and $30M in 2018. 2018 ongoing CapEX includes approximately $54M in ongoing Coke CapEx and $5M ongoing Logistics. Anticipate Granite City Gas Sharing project CapEx to be approximately $35M in 2018.

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2018E Guidance Reconciliation Reflects non-controlling interest in Indiana Harbor and the portion of the Partnership owned by public unitholders. SXC Q2 2018 Earnings Call

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Thermal Coal Export Profitability (in $ per metric tonne) Solid API2 benchmark price should continue to support CMT ILB producers’ competitiveness in maintaining viable exports Netback calculation example assuming $93 per metric tonne prompt API 2 benchmark (Q2 2018 average). Ocean Freight for 70,000 metric tonne US Gulf/ARA Coal Panamax freight. Consists of CN rail transportation from ILB coal mines to CMT and terminal transloading costs Source: DTC (1) (2) Believe ILB export thermal solidly profitable at Q2 ‘18 API2 benchmark pricing of ~$93/t Based on average ILB cash cost, netback calculation implies attractive margins 2019 and 2020 API2 forward price is ~$93/t and $88/t, respectively(4) CMT well-positioned to serve existing ILB thermal coal producers (in $ per short ton) (3) SXC Q2 2018 Earnings Call

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