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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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90-0640593
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Three Months Ended March 31,
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2019
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2018
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(Dollars and shares in millions, except per share amounts)
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Revenues
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Sales and other operating revenue
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$
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391.3
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$
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350.5
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Costs and operating expenses
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Cost of products sold and operating expenses
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307.4
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|
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270.6
|
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Selling, general and administrative expenses
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16.7
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15.9
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Depreciation and amortization expense
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37.2
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32.9
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Total costs and operating expenses
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361.3
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319.4
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Operating income
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30.0
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31.1
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Interest expense, net
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14.8
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15.8
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Loss on extinguishment of debt
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—
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0.3
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Income before income tax expense
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15.2
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15.0
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Income tax expense
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3.0
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2.0
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Net income
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12.2
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13.0
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Less: Net income attributable to noncontrolling interests
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2.4
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4.3
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Net income attributable to SunCoke Energy, Inc.
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$
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9.8
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$
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8.7
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Earnings attributable to SunCoke Energy, Inc. per common share:
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Basic
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$
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0.15
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$
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0.13
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Diluted
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$
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0.15
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$
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0.13
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Weighted average number of common shares outstanding:
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Basic
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64.9
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64.6
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Diluted
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65.3
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65.4
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Three Months Ended March 31,
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2019
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2018
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(Dollars in millions)
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Net income
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$
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12.2
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$
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13.0
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Other comprehensive income:
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Currency translation adjustment
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—
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(0.1
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)
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Comprehensive income
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12.2
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12.9
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Less: Comprehensive income attributable to noncontrolling interests
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2.4
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4.3
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Comprehensive income attributable to SunCoke Energy, Inc.
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$
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9.8
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$
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8.6
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March 31, 2019
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December 31, 2018
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(Unaudited)
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(Dollars in millions, except
par value amounts) |
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Assets
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Cash and cash equivalents
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$
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143.9
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$
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145.7
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Receivables
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86.3
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75.4
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Inventories
|
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150.7
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110.4
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Income tax receivable
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—
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0.7
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Other current assets
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6.2
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2.8
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Total current assets
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387.1
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335.0
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Properties, plants and equipment (net of accumulated depreciation of $866.0 million and $855.8 million at March 31, 2019 and December 31, 2018, respectively)
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1,459.0
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1,471.1
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Goodwill
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76.9
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76.9
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Other intangible assets, net
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154.1
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156.8
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Deferred charges and other assets
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20.2
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5.5
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Total assets
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$
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2,097.3
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$
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2,045.3
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Liabilities and Equity
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Accounts payable
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$
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145.7
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$
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115.0
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Accrued liabilities
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42.3
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45.6
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Deferred revenue
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7.5
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3.0
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Current portion of long-term debt and financing obligation
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4.5
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3.9
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Interest payable
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16.8
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3.6
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Income tax payable
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1.2
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—
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Total current liabilities
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218.0
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171.1
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Long-term debt and financing obligation
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828.8
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834.5
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Accrual for black lung benefits
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45.6
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44.9
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Retirement benefit liabilities
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24.6
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25.2
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Deferred income taxes
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254.3
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254.7
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Asset retirement obligations
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13.2
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14.6
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Other deferred credits and liabilities
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25.8
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17.6
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Total liabilities
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1,410.3
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1,362.6
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Equity
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Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no issued shares at both March 31, 2019 and December 31, 2018
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—
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—
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Common stock, $0.01 par value. Authorized 300,000,000 shares; issued 72,578,808 and 72,233,750 shares at March 31, 2019 and December 31, 2018, respectively
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0.7
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0.7
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Treasury stock, 7,477,657 shares at both March 31, 2019 and December 31, 2018
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(140.7
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)
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(140.7
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)
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Additional paid-in capital
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488.0
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488.8
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Accumulated other comprehensive loss
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(13.1
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)
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(13.1
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)
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Retained earnings
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137.2
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127.4
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Total SunCoke Energy, Inc. stockholders’ equity
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472.1
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463.1
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Noncontrolling interests
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214.9
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219.6
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Total equity
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687.0
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|
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682.7
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Total liabilities and equity
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$
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2,097.3
|
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$
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2,045.3
|
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Three Months Ended March 31,
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||||||
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2019
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2018
|
||||
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||||
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(Dollars in millions)
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
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Net income
|
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$
|
12.2
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$
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13.0
|
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Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
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|
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Depreciation and amortization expense
|
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37.2
|
|
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32.9
|
|
||
Deferred income tax (benefi
t) expense
|
|
(0.4
|
)
|
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0.2
|
|
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Payments in excess of expense for postretirement plan benefits
|
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(0.6
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)
|
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(0.6
|
)
|
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Share-based compensation expense
|
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0.9
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|
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0.8
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|
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Loss on extinguishment of debt
|
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—
|
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0.3
|
|
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Changes in working capital pertaining to operating activities:
|
|
|
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|
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Receivables
|
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(10.9
|
)
|
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(6.8
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)
|
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Inventories
|
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(40.3
|
)
|
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0.9
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|
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Accounts payable
|
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29.9
|
|
|
14.0
|
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||
Accrued liabilities
|
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(4.4
|
)
|
|
(8.7
|
)
|
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Deferred revenue
|
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4.5
|
|
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1.9
|
|
||
Interest payable
|
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13.2
|
|
|
11.7
|
|
||
Income taxes
|
|
1.9
|
|
|
(0.6
|
)
|
||
Other
|
|
(7.9
|
)
|
|
(1.7
|
)
|
||
Net cash provided by operating activities
|
|
35.3
|
|
|
57.3
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
|
||||
Capital expenditures
|
|
(20.9
|
)
|
|
(15.4
|
)
|
||
Net cash used in investing activities
|
|
(20.9
|
)
|
|
(15.4
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
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—
|
|
|
45.0
|
|
||
Repayment of long-term debt
|
|
(0.3
|
)
|
|
(44.9
|
)
|
||
Debt issuance costs
|
|
—
|
|
|
(0.5
|
)
|
||
Proceeds from revolving credit facility
|
|
60.7
|
|
|
53.5
|
|
||
Repayment of revolving credit facility
|
|
(65.7
|
)
|
|
(53.5
|
)
|
||
Repayment of financing obligation
|
|
(0.7
|
)
|
|
(0.6
|
)
|
||
Acquisition of additional interest in the Partnership
|
|
—
|
|
|
(3.4
|
)
|
||
Cash distribution to noncontrolling interests
|
|
(7.1
|
)
|
|
(10.6
|
)
|
||
Other financing activities
|
|
(3.1
|
)
|
|
(0.1
|
)
|
||
Net cash used in financing activities
|
|
(16.2
|
)
|
|
(15.1
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
|
(1.8
|
)
|
|
26.8
|
|
||
Cash and cash equivalents at beginning of period
|
|
145.7
|
|
|
120.2
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
143.9
|
|
|
$
|
147.0
|
|
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
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Interest paid, net of capitalized interest of $1.2 million and $0.5 million, respectively
|
|
$
|
0.9
|
|
|
$
|
3.0
|
|
Income taxes paid
|
|
$
|
1.0
|
|
|
$
|
2.3
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
||||
|
|
(Dollars in millions)
|
||||||
Coal
|
|
$
|
98.0
|
|
|
$
|
59.9
|
|
Coke
|
|
9.7
|
|
|
8.6
|
|
||
Materials, supplies and other
|
|
43.0
|
|
|
41.9
|
|
||
Total inventories
|
|
$
|
150.7
|
|
|
$
|
110.4
|
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
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|
Weighted - Average Remaining Amortization Years
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
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Net
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
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(Dollars in millions)
|
||||||||||||||||||||||
Customer contracts
|
4
|
|
$
|
31.7
|
|
|
$
|
18.6
|
|
|
$
|
13.1
|
|
|
$
|
31.7
|
|
|
$
|
17.7
|
|
|
$
|
14.0
|
|
Customer relationships
|
13
|
|
28.7
|
|
|
8.0
|
|
|
20.7
|
|
|
28.7
|
|
|
7.5
|
|
|
21.2
|
|
||||||
Permits
|
23
|
|
139.0
|
|
|
18.7
|
|
|
120.3
|
|
|
139.0
|
|
|
17.4
|
|
|
121.6
|
|
||||||
Total
|
|
|
$
|
199.4
|
|
|
$
|
45.3
|
|
|
$
|
154.1
|
|
|
$
|
199.4
|
|
|
$
|
42.6
|
|
|
$
|
156.8
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
||||
|
|
(Dollars in millions)
|
||||||
Accrued benefits
|
|
$
|
13.9
|
|
|
$
|
21.2
|
|
Current portion of postretirement benefit obligation
|
|
3.0
|
|
|
3.0
|
|
||
Other taxes payable
|
|
11.3
|
|
|
9.1
|
|
||
Current portion of black lung liability
|
|
4.5
|
|
|
4.5
|
|
||
Accrued legal
|
|
3.3
|
|
|
4.2
|
|
||
Other
|
|
6.3
|
|
|
3.6
|
|
||
Total accrued liabilities
|
|
$
|
42.3
|
|
|
$
|
45.6
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
||||
|
|
(Dollars in millions)
|
||||||
7.500 percent senior notes, due 2025 ("2025 Partnership Notes")
|
|
$
|
700.0
|
|
|
$
|
700.0
|
|
Term loan, due 2022 ("Term Loan")
|
|
43.6
|
|
|
43.9
|
|
||
SunCoke's revolving credit facility, due 2022 ("Revolving Facility")
|
|
—
|
|
|
—
|
|
||
Partnership's revolving credit facility, due 2022 ("Partnership Revolver")
|
|
100.0
|
|
|
105.0
|
|
||
5.82 percent financing obligation, due 2021 ("Partnership Financing Obligation")
|
|
9.4
|
|
|
10.1
|
|
||
Total borrowings
|
|
853.0
|
|
|
859.0
|
|
||
Original issue discount
|
|
(5.1
|
)
|
|
(5.4
|
)
|
||
Debt issuance costs
|
|
(14.6
|
)
|
|
(15.2
|
)
|
||
Total debt and financing obligation
|
|
833.3
|
|
|
838.4
|
|
||
Less: current portion of long-term debt and financing obligation
|
|
4.5
|
|
|
3.9
|
|
||
Total long-term debt and financing obligation
|
|
$
|
828.8
|
|
|
$
|
834.5
|
|
|
Three months ended March 31, 2019
|
||
|
(Dollars in millions)
|
||
Operating leases:
|
|
||
Cost of products sold and operating expenses
|
$
|
0.4
|
|
Selling, general and administrative expenses
|
0.1
|
|
|
|
$
|
0.5
|
|
Short-term leases:
|
|
||
Cost of products sold and operating expenses
(1)(2)
|
$
|
2.3
|
|
Total lease expense
|
2.8
|
|
(1)
|
Includes expenses for month-to-month equipment leases, which are classified as short-term as the Company is not reasonably certain to renew the lease term beyond one month.
|
(2)
|
Includes variable lease expenses, which are immaterial to the consolidated financial statements.
|
|
Three months ended March 31, 2019
|
|
Weighted average remaining lease term of operating leases
|
8.3 years
|
|
Weighted average discount rate of operating leases
|
5.1
|
%
|
|
Three months ended March 31, 2019
|
||
|
(Dollars in millions)
|
||
Operating cash flow information:
|
|
||
Cash paid for amounts included in the measurement of operating lease liabilities
|
$
|
1.9
|
|
Non-cash activity:
|
|
||
ROU assets obtained in exchange for new operating lease liabilities
|
$
|
5.0
|
|
(1)
|
Excluding the three months ended March 31, 2019.
|
|
|
|
Weighted Average Per Share
|
|||||||
|
Shares
|
|
Exercise Price
|
|
Grant Date Fair Value
|
|||||
Traditional stock options
|
267,897
|
|
|
$
|
9.87
|
|
|
$
|
4.09
|
|
|
|
Three Months Ended March 31, 2019
|
|
Risk-free interest rate
|
|
2
|
%
|
Expected term
|
|
6 years
|
|
Volatility
|
|
53
|
%
|
Dividend yield
|
|
2
|
%
|
|
Shares
|
|
Grant Date Fair Value per Share
|
|||
PSUs
(1)(2)
|
227,378
|
|
|
$
|
10.79
|
|
(1)
|
The PSU awards are split
50
/50 between the Company's
three
year cumulative Adjusted EBITDA performance measure and the Company's
three
-year average pre-tax return on capital performance measure for its coke and logistics businesses and unallocated corporate expenses.
|
(2)
|
The number of PSUs ultimately awarded will be determined by the above performance versus targets and the Company's
three
-year total shareholder return ("TSR") as compared to the TSR of the companies making up the Nasdaq Iron & Steel Index ("TSR Modifier"). The TSR Modifier can impact the payout between
75 percent
and
125 percent
of the Company's final performance measure results.
|
|
Three Months Ended March 31,
|
|
|
||||||||||
|
2019
|
|
2018
|
|
March 31, 2019
|
||||||||
|
Compensation Expense
(1)
|
|
Unrecognized Compensation Cost
|
|
Recognition Period
|
||||||||
|
(Dollars in millions)
|
|
|
(Years)
|
|||||||||
Equity Awards:
|
|
|
|
|
|
|
|
||||||
Stock Options
|
$
|
0.2
|
|
|
$
|
0.2
|
|
|
$
|
1.4
|
|
|
2.3
|
RSUs
|
0.1
|
|
|
0.1
|
|
|
$
|
1.5
|
|
|
1.5
|
||
PSUs
|
0.5
|
|
|
0.4
|
|
|
$
|
5.2
|
|
|
2.3
|
||
Total equity awards
|
$
|
0.8
|
|
|
$
|
0.7
|
|
|
|
|
|
||
Liability Awards:
|
|
|
|
|
|
|
|
||||||
Cash RSUs
|
$
|
0.4
|
|
|
$
|
0.1
|
|
|
$
|
1.6
|
|
|
1.9
|
Cash incentive award
|
0.1
|
|
|
0.2
|
|
|
$
|
1.3
|
|
|
2.1
|
||
Total liability awards
|
$
|
0.5
|
|
|
$
|
0.3
|
|
|
|
|
|
(1)
|
Compensation expense recognized by the Company is in selling, general and administrative expenses on the Consolidated Statements of Income.
|
|
|
Three Months Ended March 31,
|
||||
|
|
2019
|
|
2018
|
||
|
|
|
|
|
||
|
|
(Shares in millions)
|
||||
Weighted-average number of common shares outstanding-basic
|
|
64.9
|
|
|
64.6
|
|
Add: Effect of dilutive share-based compensation awards
|
|
0.4
|
|
|
0.8
|
|
Weighted-average number of shares-diluted
|
|
65.3
|
|
|
65.4
|
|
|
|
Three Months Ended March 31,
|
||||
|
|
2019
|
|
2018
|
||
|
|
|
|
|
||
|
|
(Shares in millions)
|
||||
Stock options
|
|
2.8
|
|
|
2.8
|
|
Performance stock units
|
|
0.1
|
|
|
0.2
|
|
Total
|
|
2.9
|
|
|
3.0
|
|
•
|
Level 1 - inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market.
|
•
|
Level 2 - inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability.
|
•
|
Level 3 - inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
|
|
(Dollars in millions)
|
||||||
Sales and other operating revenue:
|
|
|
|
|
||||
Cokemaking
|
|
$
|
344.5
|
|
|
$
|
302.5
|
|
Energy
|
|
13.8
|
|
|
13.6
|
|
||
Logistics
|
|
22.0
|
|
|
22.1
|
|
||
Operating and licensing fees
|
|
9.7
|
|
|
10.1
|
|
||
Other
|
|
1.3
|
|
|
2.2
|
|
||
Sales and other operating revenue
|
|
$
|
391.3
|
|
|
$
|
350.5
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
|
|
(Dollars in millions)
|
||||||
Sales and other operating revenue:
|
|
|
|
|
||||
AM USA
|
|
$
|
197.6
|
|
|
$
|
164.1
|
|
AM Brazil
|
|
9.7
|
|
|
10.1
|
|
||
AK Steel
|
|
104.1
|
|
|
92.9
|
|
||
U.S. Steel
|
|
54.1
|
|
|
51.7
|
|
||
Foresight and Murray
|
|
10.9
|
|
|
14.1
|
|
||
Other
|
|
14.9
|
|
|
17.6
|
|
||
Sales and other operating revenue
|
|
$
|
391.3
|
|
|
$
|
350.5
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(Dollars in millions)
|
||||||
Beginning balance at December 31, 2018 and 2017, respectively
|
|
$
|
3.0
|
|
|
$
|
1.7
|
|
Reclassification of the beginning contract liabilities to revenue, as a result of performance obligation satisfied
|
|
(1.0
|
)
|
|
(0.6
|
)
|
||
Billings in excess of services performed, not recognized as revenue
|
|
5.5
|
|
|
2.5
|
|
||
Ending balance at March 31, 2019 and 2018, respectively
|
|
$
|
7.5
|
|
|
$
|
3.6
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
|
|
(Dollars in millions)
|
||||||
Sales and other operating revenue:
|
|
|
|
|
||||
Domestic Coke
|
|
$
|
359.3
|
|
|
$
|
318.1
|
|
Brazil Coke
|
|
9.7
|
|
|
10.1
|
|
||
Logistics
|
|
22.3
|
|
|
22.3
|
|
||
Logistics intersegment sales
|
|
6.5
|
|
|
5.4
|
|
||
Elimination of intersegment sales
|
|
(6.5
|
)
|
|
(5.4
|
)
|
||
Total sales and other operating revenues
|
|
$
|
391.3
|
|
|
$
|
350.5
|
|
|
|
|
|
|
|
|||
Adjusted EBITDA:
|
|
|
|
|
||||
Domestic Coke
|
|
$
|
58.5
|
|
|
$
|
54.3
|
|
Brazil Coke
|
|
4.5
|
|
|
4.7
|
|
||
Logistics
|
|
12.7
|
|
|
13.6
|
|
||
Corporate and Other
(1)
|
|
(8.4
|
)
|
|
(8.6
|
)
|
||
Total Adjusted EBITDA
|
|
$
|
67.3
|
|
|
$
|
64.0
|
|
|
|
|
|
|
||||
Depreciation and amortization expense:
|
|
|
|
|
||||
Domestic Coke
|
|
$
|
30.6
|
|
|
$
|
25.3
|
|
Brazil Coke
|
|
0.2
|
|
|
0.2
|
|
||
Logistics
|
|
6.1
|
|
|
7.0
|
|
||
Corporate and Other
|
|
0.3
|
|
|
0.4
|
|
||
Total depreciation and amortization expense
|
|
$
|
37.2
|
|
|
$
|
32.9
|
|
|
|
|
|
|
||||
Capital expenditures:
|
|
|
|
|
||||
Domestic Coke
|
|
$
|
18.9
|
|
|
$
|
15.1
|
|
Logistics
|
|
2.0
|
|
|
0.3
|
|
||
Corporate and Other
|
|
—
|
|
|
—
|
|
||
Total capital expenditures
|
|
$
|
20.9
|
|
|
$
|
15.4
|
|
(1)
|
Corporate and Other includes the activity from our legacy coal mining business, which contributed Adjusted EBITDA losses of
$1.8 million
during the
three months ended March 31, 2019
, as well as
$2.3 million
during the
three months ended March 31, 2018
.
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
|
|
|
|
||||
|
|
(Dollars in millions)
|
||||||
Segment assets
|
|
|
|
|
||||
Domestic Coke
|
|
$
|
1,488.8
|
|
|
$
|
1,446.5
|
|
Brazil Coke
|
|
16.1
|
|
|
15.1
|
|
||
Logistics
|
|
471.4
|
|
|
463.0
|
|
||
Corporate and Other
|
|
121.0
|
|
|
120.0
|
|
||
Segment assets, excluding tax assets
|
|
2,097.3
|
|
|
2,044.6
|
|
||
Tax assets
|
|
—
|
|
|
0.7
|
|
||
Total assets
|
|
$
|
2,097.3
|
|
|
$
|
2,045.3
|
|
•
|
does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
|
•
|
does not reflect items such as depreciation and amortization;
|
•
|
does not reflect changes in, or cash requirement for, working capital needs;
|
•
|
does not reflect our interest expense, or the cash requirements necessary to service interest on or principal payments of our debt;
|
•
|
does not reflect certain other non-cash income and expenses;
|
•
|
excludes income taxes that may represent a reduction in available cash; and
|
•
|
includes net income attributable to noncontrolling interests.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
(Dollars in millions)
|
||||||
Net cash provided by operating activities
|
|
$
|
35.3
|
|
|
$
|
57.3
|
|
Subtract:
|
|
|
|
|
||||
Depreciation and amortization expense
|
|
37.2
|
|
|
32.9
|
|
||
Deferred income tax (benefit) expense
|
|
(0.4
|
)
|
|
0.2
|
|
||
Changes in working capital and other
|
|
(13.7
|
)
|
|
11.2
|
|
||
Net income
|
|
$
|
12.2
|
|
|
$
|
13.0
|
|
Add:
|
|
|
|
|
||||
Depreciation and amortization expense
|
|
$
|
37.2
|
|
|
$
|
32.9
|
|
Interest expense, net
|
|
14.8
|
|
|
15.8
|
|
||
Loss on extinguishment of debt
|
|
—
|
|
|
0.3
|
|
||
Income tax expense
|
|
3.0
|
|
|
2.0
|
|
||
Contingent consideration adjustments
(1)
|
|
(0.4
|
)
|
|
—
|
|
||
Simplification Transaction costs
|
|
0.5
|
|
|
—
|
|
||
Adjusted EBITDA
|
|
$
|
67.3
|
|
|
$
|
64.0
|
|
Subtract: Adjusted EBITDA attributable to noncontrolling interests
(2)
|
|
18.9
|
|
|
19.0
|
|
||
Adjusted EBITDA attributable to SunCoke Energy, Inc.
|
|
$
|
48.4
|
|
|
$
|
45.0
|
|
(1)
|
In connection with the CMT acquisition, the Partnership entered into a contingent consideration arrangement that requires the Partnership to make future payments to the seller based on future volume over a specified threshold, price and contract renewals. Contingent consideration adjustments in 2019 were primarily the result of modifications to the volume forecast.
|
(2)
|
Reflects noncontrolling interest in Indiana Harbor and the portion of the Partnership owned by public unitholders.
|
•
|
a sale or other disposition of the Guarantor Subsidiary or of all or substantially all of its assets;
|
•
|
a sale of the majority of the Capital Stock of a Guarantor Subsidiary to a third-party, after which the Guarantor Subsidiary is no longer a "Restricted Subsidiary" in accordance with the indenture governing the Notes;
|
•
|
the liquidation or dissolution of a Guarantor Subsidiary so long as no "Default" or "Event of Default", as defined under the indenture governing the Notes, has occurred as a result thereof;
|
•
|
the designation of a Guarantor Subsidiary as an "unrestricted subsidiary" in accordance with the indenture governing the Notes;
|
•
|
the requirements for defeasance or discharge of the indentures governing the Notes having been satisfied; or
|
•
|
the release, other than the discharge through payments by a Guarantor Subsidiary, from its guarantee under the Credit Agreement or other indebtedness that resulted in the obligation of the Guarantor Subsidiary under the indenture governing the Notes.
|
|
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Combining
and
Consolidating
Adjustments
|
|
Total
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and other operating revenue
|
|
$
|
—
|
|
|
$
|
62.3
|
|
|
$
|
330.3
|
|
|
$
|
(1.3
|
)
|
|
$
|
391.3
|
|
Equity in earnings of subsidiaries
|
|
11.9
|
|
|
6.3
|
|
|
—
|
|
|
(18.2
|
)
|
|
—
|
|
|||||
Total revenues, net of equity earnings of subsidiaries
|
|
11.9
|
|
|
68.6
|
|
|
330.3
|
|
|
(19.5
|
)
|
|
391.3
|
|
|||||
Costs and operating expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of products sold and operating expense
|
|
—
|
|
|
45.6
|
|
|
263.1
|
|
|
(1.3
|
)
|
|
307.4
|
|
|||||
Selling, general and administrative expense
|
|
2.1
|
|
|
3.4
|
|
|
11.2
|
|
|
—
|
|
|
16.7
|
|
|||||
Depreciation and amortization expense
|
|
—
|
|
|
2.0
|
|
|
35.2
|
|
|
—
|
|
|
37.2
|
|
|||||
Total costs and operating expenses
|
|
2.1
|
|
|
51.0
|
|
|
309.5
|
|
|
(1.3
|
)
|
|
361.3
|
|
|||||
Operating income
|
|
9.8
|
|
|
17.6
|
|
|
20.8
|
|
|
(18.2
|
)
|
|
30.0
|
|
|||||
Interest (income) expense, net - affiliate
|
|
—
|
|
|
(0.4
|
)
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|||||
Interest expense (income), net
|
|
0.8
|
|
|
(0.6
|
)
|
|
14.6
|
|
|
—
|
|
|
14.8
|
|
|||||
Total interest expense (income), net
|
|
0.8
|
|
|
(1.0
|
)
|
|
15.0
|
|
|
—
|
|
|
14.8
|
|
|||||
Income before income tax (benefit) expense
|
|
9.0
|
|
|
18.6
|
|
|
5.8
|
|
|
(18.2
|
)
|
|
15.2
|
|
|||||
Income tax (benefit) expense
|
|
(0.8
|
)
|
|
5.0
|
|
|
(1.2
|
)
|
|
—
|
|
|
3.0
|
|
|||||
Net income
|
|
9.8
|
|
|
13.6
|
|
|
7.0
|
|
|
(18.2
|
)
|
|
12.2
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
|
2.4
|
|
|||||
Net income attributable to SunCoke Energy, Inc.
|
|
$
|
9.8
|
|
|
$
|
13.6
|
|
|
$
|
4.6
|
|
|
$
|
(18.2
|
)
|
|
$
|
9.8
|
|
Comprehensive income
|
|
$
|
9.8
|
|
|
$
|
13.5
|
|
|
$
|
7.0
|
|
|
$
|
(18.1
|
)
|
|
$
|
12.2
|
|
Less: Comprehensive income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
|
2.4
|
|
|||||
Comprehensive income attributable to SunCoke Energy, Inc.
|
|
$
|
9.8
|
|
|
$
|
13.5
|
|
|
$
|
4.6
|
|
|
$
|
(18.1
|
)
|
|
$
|
9.8
|
|
|
|
Issuer
|
|
Guarantor
Subsidiaries |
|
Non-
Guarantor Subsidiaries |
|
Combining
and Consolidating Adjustments |
|
Total
|
||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Sales and other operating revenue
|
|
$
|
—
|
|
|
$
|
51.0
|
|
|
$
|
300.7
|
|
|
$
|
(1.2
|
)
|
|
$
|
350.5
|
|
Equity in earnings of subsidiaries
|
|
10.9
|
|
|
8.7
|
|
|
—
|
|
|
(19.6
|
)
|
|
—
|
|
|||||
Total revenues, net of equity in earnings of subsidiaries
|
|
10.9
|
|
|
59.7
|
|
|
300.7
|
|
|
(20.8
|
)
|
|
350.5
|
|
|||||
Costs and operating expenses
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of products sold and operating expenses
|
|
—
|
|
|
39.1
|
|
|
232.7
|
|
|
(1.2
|
)
|
|
270.6
|
|
|||||
Selling, general and administrative expenses
|
|
1.4
|
|
|
3.4
|
|
|
11.1
|
|
|
—
|
|
|
15.9
|
|
|||||
Depreciation and amortization expense
|
|
—
|
|
|
2.0
|
|
|
30.9
|
|
|
—
|
|
|
32.9
|
|
|||||
Total costs and operating expenses
|
|
1.4
|
|
|
44.5
|
|
|
274.7
|
|
|
(1.2
|
)
|
|
319.4
|
|
|||||
Operating income
|
|
9.5
|
|
|
15.2
|
|
|
26.0
|
|
|
(19.6
|
)
|
|
31.1
|
|
|||||
Interest (income) expense, net - affiliate
|
|
—
|
|
|
(2.0
|
)
|
|
2.0
|
|
|
—
|
|
|
—
|
|
|||||
Interest expense (income), net
|
|
0.7
|
|
|
(0.2
|
)
|
|
15.3
|
|
|
—
|
|
|
15.8
|
|
|||||
Total interest expense (income), net
|
|
0.7
|
|
|
(2.2
|
)
|
|
17.3
|
|
|
—
|
|
|
15.8
|
|
|||||
Loss on extinguishment of debt
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||
Income before income tax (benefit) expense
|
|
8.5
|
|
|
17.4
|
|
|
8.7
|
|
|
(19.6
|
)
|
|
15.0
|
|
|||||
Income tax (benefit) expense
|
|
(0.2
|
)
|
|
3.1
|
|
|
(0.9
|
)
|
|
—
|
|
|
2.0
|
|
|||||
Net income
|
|
8.7
|
|
|
14.3
|
|
|
9.6
|
|
|
(19.6
|
)
|
|
13.0
|
|
|||||
Less: Net income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
|
4.3
|
|
|||||
Net income attributable to SunCoke Energy, Inc.
|
|
$
|
8.7
|
|
|
$
|
14.3
|
|
|
$
|
5.3
|
|
|
$
|
(19.6
|
)
|
|
$
|
8.7
|
|
Comprehensive income
|
|
$
|
8.6
|
|
|
$
|
26.7
|
|
|
$
|
9.5
|
|
|
$
|
(31.9
|
)
|
|
$
|
12.9
|
|
Less: Comprehensive income attributable to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
|
4.3
|
|
|||||
Comprehensive income attributable to SunCoke Energy, Inc.
|
|
$
|
8.6
|
|
|
$
|
26.7
|
|
|
$
|
5.2
|
|
|
$
|
(31.9
|
)
|
|
$
|
8.6
|
|
|
|
|
|
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Combining
and
Consolidating
Adjustments
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
121.9
|
|
|
$
|
22.0
|
|
|
$
|
—
|
|
|
$
|
143.9
|
|
Receivables
|
|
—
|
|
|
14.9
|
|
|
71.4
|
|
|
—
|
|
|
86.3
|
|
|||||
Inventories
|
|
—
|
|
|
12.7
|
|
|
138.0
|
|
|
—
|
|
|
150.7
|
|
|||||
Other current assets
|
|
—
|
|
|
3.3
|
|
|
2.9
|
|
|
—
|
|
|
6.2
|
|
|||||
Advances to affiliate
|
|
—
|
|
|
297.1
|
|
|
—
|
|
|
(297.1
|
)
|
|
—
|
|
|||||
Total current assets
|
|
—
|
|
|
449.9
|
|
|
234.3
|
|
|
(297.1
|
)
|
|
387.1
|
|
|||||
Notes receivable from affiliate
|
|
—
|
|
|
—
|
|
|
200.0
|
|
|
(200.0
|
)
|
|
—
|
|
|||||
Properties, plants and equipment, net
|
|
—
|
|
|
54.1
|
|
|
1,404.9
|
|
|
—
|
|
|
1,459.0
|
|
|||||
Goodwill
|
|
—
|
|
|
3.4
|
|
|
73.5
|
|
|
—
|
|
|
76.9
|
|
|||||
Other intangible assets, net
|
|
—
|
|
|
0.9
|
|
|
153.2
|
|
|
—
|
|
|
154.1
|
|
|||||
Deferred income taxes
|
|
7.5
|
|
|
—
|
|
|
—
|
|
|
(7.5
|
)
|
|
—
|
|
|||||
Deferred charges and other assets
|
|
—
|
|
|
10.1
|
|
|
10.1
|
|
|
—
|
|
|
20.2
|
|
|||||
Total assets
|
|
$
|
7.5
|
|
|
$
|
518.4
|
|
|
$
|
2,076.0
|
|
|
$
|
(504.6
|
)
|
|
$
|
2,097.3
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Advances from affiliate
|
|
$
|
172.2
|
|
|
$
|
—
|
|
|
$
|
124.9
|
|
|
$
|
(297.1
|
)
|
|
—
|
|
|
Accounts payable
|
|
—
|
|
|
20.9
|
|
|
124.8
|
|
|
—
|
|
|
145.7
|
|
|||||
Accrued liabilities
|
|
1.2
|
|
|
9.7
|
|
|
31.4
|
|
|
—
|
|
|
42.3
|
|
|||||
Deferred revenue
|
|
—
|
|
|
—
|
|
|
7.5
|
|
|
—
|
|
|
7.5
|
|
|||||
Current portion of long-term debt and financing obligation
|
|
1.7
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
4.5
|
|
|||||
Interest payable
|
|
0.5
|
|
|
—
|
|
|
16.3
|
|
|
—
|
|
|
16.8
|
|
|||||
Income taxes payable
|
|
1.3
|
|
|
97.2
|
|
|
(97.3
|
)
|
|
—
|
|
|
1.2
|
|
|||||
Total current liabilities
|
|
176.9
|
|
|
127.8
|
|
|
210.4
|
|
|
(297.1
|
)
|
|
218.0
|
|
|||||
Long-term debt and financing obligation
|
|
40.5
|
|
|
—
|
|
|
788.3
|
|
|
—
|
|
|
828.8
|
|
|||||
Payable to affiliate
|
|
—
|
|
|
200.0
|
|
|
—
|
|
|
(200.0
|
)
|
|
—
|
|
|||||
Accrual for black lung benefits
|
|
—
|
|
|
11.0
|
|
|
34.6
|
|
|
—
|
|
|
45.6
|
|
|||||
Retirement benefit liabilities
|
|
—
|
|
|
11.9
|
|
|
12.7
|
|
|
—
|
|
|
24.6
|
|
|||||
Deferred income taxes
|
|
—
|
|
|
195.8
|
|
|
66.0
|
|
|
(7.5
|
)
|
|
254.3
|
|
|||||
Asset retirement obligations
|
|
—
|
|
|
—
|
|
|
13.2
|
|
|
—
|
|
|
13.2
|
|
|||||
Other deferred credits and liabilities
|
|
3.2
|
|
|
8.9
|
|
|
13.7
|
|
|
—
|
|
|
25.8
|
|
|||||
Total liabilities
|
|
220.6
|
|
|
555.4
|
|
|
1,138.9
|
|
|
(504.6
|
)
|
|
1,410.3
|
|
|||||
Equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no issued shares at March 31, 2019
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common stock, $0.01 par value. Authorized 300,000,000 shares; issued 72,578,808 shares at March 31, 2019
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|||||
Treasury stock, 7,477,657 shares at March 31, 2019
|
|
(140.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(140.7
|
)
|
|||||
Additional paid-in capital
|
|
488.0
|
|
|
81.6
|
|
|
604.3
|
|
|
(685.9
|
)
|
|
488.0
|
|
|||||
Accumulated other comprehensive loss
|
|
(13.1
|
)
|
|
(2.1
|
)
|
|
(11.0
|
)
|
|
13.1
|
|
|
(13.1
|
)
|
|||||
Retained earnings
|
|
137.3
|
|
|
539.6
|
|
|
128.9
|
|
|
(668.6
|
)
|
|
137.2
|
|
|||||
Equity investment eliminations
|
|
(685.3
|
)
|
|
(656.1
|
)
|
|
—
|
|
|
1,341.4
|
|
|
—
|
|
|||||
Total SunCoke Energy, Inc. stockholders’ equity
|
|
(213.1
|
)
|
|
(37.0
|
)
|
|
722.2
|
|
|
—
|
|
|
472.1
|
|
|||||
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
214.9
|
|
|
—
|
|
|
214.9
|
|
|||||
Total equity
|
|
(213.1
|
)
|
|
(37.0
|
)
|
|
937.1
|
|
|
—
|
|
|
687.0
|
|
|||||
Total liabilities and equity
|
|
$
|
7.5
|
|
|
$
|
518.4
|
|
|
$
|
2,076.0
|
|
|
$
|
(504.6
|
)
|
|
$
|
2,097.3
|
|
|
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Combining
and
Consolidating
Adjustments
|
|
Total
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
—
|
|
|
$
|
123.2
|
|
|
$
|
22.5
|
|
|
$
|
—
|
|
|
$
|
145.7
|
|
Receivables
|
|
—
|
|
|
13.3
|
|
|
62.1
|
|
|
—
|
|
|
75.4
|
|
|||||
Inventories
|
|
—
|
|
|
10.6
|
|
|
99.8
|
|
|
—
|
|
|
110.4
|
|
|||||
Income tax receivable
|
|
—
|
|
|
—
|
|
|
96.1
|
|
|
(95.4
|
)
|
|
0.7
|
|
|||||
Other current assets
|
|
—
|
|
|
1.8
|
|
|
1.0
|
|
|
—
|
|
|
2.8
|
|
|||||
Advances to affiliate
|
|
—
|
|
|
281.1
|
|
|
—
|
|
|
(281.1
|
)
|
|
—
|
|
|||||
Total current assets
|
|
—
|
|
|
430.0
|
|
|
281.5
|
|
|
(376.5
|
)
|
|
335.0
|
|
|||||
Notes receivable from affiliate
|
|
—
|
|
|
—
|
|
|
200.0
|
|
|
(200.0
|
)
|
|
—
|
|
|||||
Properties, plants and equipment, net
|
|
—
|
|
|
54.3
|
|
|
1,416.8
|
|
|
—
|
|
|
1,471.1
|
|
|||||
Goodwill
|
|
—
|
|
|
3.4
|
|
|
73.5
|
|
|
—
|
|
|
76.9
|
|
|||||
Other intangible assets, net
|
|
—
|
|
|
1.1
|
|
|
155.7
|
|
|
—
|
|
|
156.8
|
|
|||||
Deferred income taxes
|
|
7.0
|
|
|
—
|
|
|
—
|
|
|
(7.0
|
)
|
|
—
|
|
|||||
Deferred charges and other assets
|
|
—
|
|
|
5.1
|
|
|
0.4
|
|
|
—
|
|
|
5.5
|
|
|||||
Total assets
|
|
$
|
7.0
|
|
|
$
|
493.9
|
|
|
$
|
2,127.9
|
|
|
$
|
(583.5
|
)
|
|
$
|
2,045.3
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Advances from affiliate
|
|
$
|
167.3
|
|
|
$
|
—
|
|
|
$
|
113.8
|
|
|
$
|
(281.1
|
)
|
|
$
|
—
|
|
Accounts payable
|
|
—
|
|
|
14.7
|
|
|
100.3
|
|
|
—
|
|
|
115.0
|
|
|||||
Accrued liabilities
|
|
1.8
|
|
|
13.7
|
|
|
30.1
|
|
|
—
|
|
|
45.6
|
|
|||||
Deferred revenue
|
|
—
|
|
|
—
|
|
|
3.0
|
|
|
—
|
|
|
3.0
|
|
|||||
Current portion of long-term debt and financing obligation
|
|
1.1
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
3.9
|
|
|||||
Interest payable
|
|
0.4
|
|
|
—
|
|
|
3.2
|
|
|
—
|
|
|
3.6
|
|
|||||
Income taxes payable
|
|
1.9
|
|
|
93.5
|
|
|
—
|
|
|
(95.4
|
)
|
|
—
|
|
|||||
Total current liabilities
|
|
172.5
|
|
|
121.9
|
|
|
253.2
|
|
|
(376.5
|
)
|
|
171.1
|
|
|||||
Long-term debt and financing obligation
|
|
41.2
|
|
|
—
|
|
|
793.3
|
|
|
—
|
|
|
834.5
|
|
|||||
Payable to affiliate
|
|
—
|
|
|
200.0
|
|
|
—
|
|
|
(200.0
|
)
|
|
—
|
|
|||||
Accrual for black lung benefits
|
|
—
|
|
|
10.9
|
|
|
34.0
|
|
|
—
|
|
|
44.9
|
|
|||||
Retirement benefit liabilities
|
|
—
|
|
|
12.2
|
|
|
13.0
|
|
|
—
|
|
|
25.2
|
|
|||||
Deferred income taxes
|
|
—
|
|
|
194.9
|
|
|
66.8
|
|
|
(7.0
|
)
|
|
254.7
|
|
|||||
Asset retirement obligations
|
|
—
|
|
|
—
|
|
|
14.6
|
|
|
—
|
|
|
14.6
|
|
|||||
Other deferred credits and liabilities
|
|
3.5
|
|
|
6.6
|
|
|
7.5
|
|
|
—
|
|
|
17.6
|
|
|||||
Total liabilities
|
|
217.2
|
|
|
546.5
|
|
|
1,182.4
|
|
|
(583.5
|
)
|
|
1,362.6
|
|
|||||
Equity
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no issued and outstanding shares at December 31, 2018
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common stock, $0.01 par value. Authorized 300,000,000 shares; issued 72,223,750 shares at December 31, 2018
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|||||
Treasury Stock, 7,477,657 shares at December 31, 2018
|
|
(140.7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(140.7
|
)
|
|||||
Additional paid-in capital
|
|
488.9
|
|
|
61.0
|
|
|
612.8
|
|
|
(673.9
|
)
|
|
488.8
|
|
|||||
Accumulated other comprehensive loss
|
|
(13.1
|
)
|
|
(2.0
|
)
|
|
(11.1
|
)
|
|
13.1
|
|
|
(13.1
|
)
|
|||||
Retained earnings
|
|
127.5
|
|
|
526.1
|
|
|
124.2
|
|
|
(650.4
|
)
|
|
127.4
|
|
|||||
Equity investment eliminations
|
|
(673.5
|
)
|
|
(637.7
|
)
|
|
—
|
|
|
1,311.2
|
|
|
—
|
|
|||||
Total SunCoke Energy, Inc. stockholders’ equity
|
|
(210.2
|
)
|
|
(52.6
|
)
|
|
725.9
|
|
|
—
|
|
|
463.1
|
|
|||||
Noncontrolling interests
|
|
—
|
|
|
—
|
|
|
219.6
|
|
|
—
|
|
|
219.6
|
|
|||||
Total equity
|
|
(210.2
|
)
|
|
(52.6
|
)
|
|
945.5
|
|
|
—
|
|
|
682.7
|
|
|||||
Total liabilities and equity
|
|
$
|
7.0
|
|
|
$
|
493.9
|
|
|
$
|
2,127.9
|
|
|
$
|
(583.5
|
)
|
|
$
|
2,045.3
|
|
|
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Combining
and
Consolidating
Adjustments
|
|
Total
|
||||||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
9.8
|
|
|
$
|
13.6
|
|
|
$
|
7.0
|
|
|
$
|
(18.2
|
)
|
|
$
|
12.2
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization expense
|
|
—
|
|
|
2.0
|
|
|
35.2
|
|
|
—
|
|
|
37.2
|
|
|||||
Deferred income tax (benefit) expense
|
|
(0.5
|
)
|
|
0.9
|
|
|
(0.8
|
)
|
|
—
|
|
|
(0.4
|
)
|
|||||
Payments in excess of expense for postretirement plan benefits
|
|
—
|
|
|
(0.3
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(0.6
|
)
|
|||||
Share-based compensation expense
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|||||
Equity in loss of subsidiaries
|
|
(11.9
|
)
|
|
(6.3
|
)
|
|
—
|
|
|
18.2
|
|
|
—
|
|
|||||
Changes in working capital pertaining to operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Receivables
|
|
—
|
|
|
(1.6
|
)
|
|
(9.3
|
)
|
|
—
|
|
|
(10.9
|
)
|
|||||
Inventories
|
|
—
|
|
|
(2.1
|
)
|
|
(38.2
|
)
|
|
—
|
|
|
(40.3
|
)
|
|||||
Accounts payable
|
|
—
|
|
|
6.6
|
|
|
23.3
|
|
|
—
|
|
|
29.9
|
|
|||||
Accrued liabilities
|
|
(0.6
|
)
|
|
(4.8
|
)
|
|
1.0
|
|
|
—
|
|
|
(4.4
|
)
|
|||||
Deferred revenue
|
|
—
|
|
|
—
|
|
|
4.5
|
|
|
—
|
|
|
4.5
|
|
|||||
Interest payable
|
|
0.1
|
|
|
—
|
|
|
13.1
|
|
|
—
|
|
|
13.2
|
|
|||||
Income taxes
|
|
(1.1
|
)
|
|
3.7
|
|
|
(0.7
|
)
|
|
—
|
|
|
1.9
|
|
|||||
Other
|
|
0.3
|
|
|
(3.8
|
)
|
|
(4.4
|
)
|
|
|
|
|
(7.9
|
)
|
|||||
Net cash (used in) provided by operating activities
|
|
(3.0
|
)
|
|
7.9
|
|
|
30.4
|
|
|
—
|
|
|
35.3
|
|
|||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Capital expenditures
|
|
—
|
|
|
(1.6
|
)
|
|
(19.3
|
)
|
|
—
|
|
|
(20.9
|
)
|
|||||
Net cash used in investing activities
|
|
—
|
|
|
(1.6
|
)
|
|
(19.3
|
)
|
|
—
|
|
|
(20.9
|
)
|
|||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Repayment of long-term debt
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|||||
Proceeds from revolving facility
|
|
—
|
|
|
—
|
|
|
60.7
|
|
|
—
|
|
|
60.7
|
|
|||||
Repayment of revolving facility
|
|
—
|
|
|
—
|
|
|
(65.7
|
)
|
|
—
|
|
|
(65.7
|
)
|
|||||
Repayment of financing obligation
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
|||||
Cash distribution to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(7.1
|
)
|
|
—
|
|
|
(7.1
|
)
|
|||||
Other financing activities
|
|
(1.7
|
)
|
|
—
|
|
|
(1.4
|
)
|
|
—
|
|
|
(3.1
|
)
|
|||||
Net increase (decrease) in advances from affiliates
|
|
5.0
|
|
|
(7.6
|
)
|
|
2.6
|
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
3.0
|
|
|
(7.6
|
)
|
|
(11.6
|
)
|
|
—
|
|
|
(16.2
|
)
|
|||||
Net decrease in cash and cash equivalents
|
|
—
|
|
|
(1.3
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
(1.8
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
|
—
|
|
|
123.2
|
|
|
22.5
|
|
|
—
|
|
|
145.7
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
—
|
|
|
$
|
121.9
|
|
|
$
|
22.0
|
|
|
$
|
—
|
|
|
$
|
143.9
|
|
|
|
Issuer
|
|
Guarantor
Subsidiaries
|
|
Non-
Guarantor
Subsidiaries
|
|
Combining
and
Consolidating
Adjustments
|
|
Total
|
||||||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income
|
|
$
|
8.7
|
|
|
$
|
14.3
|
|
|
$
|
9.6
|
|
|
$
|
(19.6
|
)
|
|
$
|
13.0
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Depreciation and amortization expense
|
|
—
|
|
|
2.0
|
|
|
30.9
|
|
|
—
|
|
|
32.9
|
|
|||||
Deferred income tax expense (benefit)
|
|
—
|
|
|
0.3
|
|
|
(0.1
|
)
|
|
—
|
|
|
0.2
|
|
|||||
Payments in excess of expense for postretirement plan benefits
|
|
—
|
|
|
(0.2
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
(0.6
|
)
|
|||||
Share-based compensation expense
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|||||
Equity in loss of subsidiaries
|
|
(10.9
|
)
|
|
(8.7
|
)
|
|
—
|
|
|
19.6
|
|
|
—
|
|
|||||
Loss on extinguishment of debt
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|||||
Changes in working capital pertaining to operating activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Receivables
|
|
—
|
|
|
1.0
|
|
|
(7.8
|
)
|
|
—
|
|
|
(6.8
|
)
|
|||||
Inventories
|
|
—
|
|
|
(3.7
|
)
|
|
4.6
|
|
|
—
|
|
|
0.9
|
|
|||||
Accounts payable
|
|
—
|
|
|
4.7
|
|
|
9.3
|
|
|
—
|
|
|
14.0
|
|
|||||
Accrued liabilities
|
|
(0.4
|
)
|
|
(5.9
|
)
|
|
(2.4
|
)
|
|
—
|
|
|
(8.7
|
)
|
|||||
Deferred revenue
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|||||
Interest payable
|
|
(1.1
|
)
|
|
—
|
|
|
12.8
|
|
|
—
|
|
|
11.7
|
|
|||||
Income taxes
|
|
(0.3
|
)
|
|
2.3
|
|
|
(2.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
|||||
Other
|
|
(0.5
|
)
|
|
(1.5
|
)
|
|
0.3
|
|
|
—
|
|
|
(1.7
|
)
|
|||||
Net cash (used in) provided by operating activities
|
|
(3.4
|
)
|
|
4.6
|
|
|
56.1
|
|
|
—
|
|
|
57.3
|
|
|||||
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
|
—
|
|
|
(0.6
|
)
|
|
(14.8
|
)
|
|
—
|
|
|
(15.4
|
)
|
|||||
Net cash used in investing activities
|
|
—
|
|
|
(0.6
|
)
|
|
(14.8
|
)
|
|
—
|
|
|
(15.4
|
)
|
|||||
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of long-term debt
|
|
45.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45.0
|
|
|||||
Repayment of long-term debt
|
|
(44.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(44.9
|
)
|
|||||
Debt issuance cost
|
|
(0.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|||||
Proceeds from revolving facility
|
|
—
|
|
|
—
|
|
|
53.5
|
|
|
—
|
|
|
53.5
|
|
|||||
Repayments of revolving facility
|
|
—
|
|
|
—
|
|
|
(53.5
|
)
|
|
—
|
|
|
(53.5
|
)
|
|||||
Repayment of financing obligation
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
|||||
Acquisition of additional interest in the Partnership
|
|
—
|
|
|
(3.4
|
)
|
|
—
|
|
|
—
|
|
|
(3.4
|
)
|
|||||
Cash distribution to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
(10.6
|
)
|
|
—
|
|
|
(10.6
|
)
|
|||||
Other financing activities
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||||
Net increase (decrease) in advances from affiliates
|
|
3.9
|
|
|
(11.0
|
)
|
|
7.1
|
|
|
—
|
|
|
—
|
|
|||||
Net cash provided by (used in) financing activities
|
|
3.4
|
|
|
(14.4
|
)
|
|
(4.1
|
)
|
|
—
|
|
|
(15.1
|
)
|
|||||
Net (decrease) increase in cash and cash equivalents
|
|
—
|
|
|
(10.4
|
)
|
|
37.2
|
|
|
—
|
|
|
26.8
|
|
|||||
Cash and cash equivalents at beginning of period
|
|
—
|
|
|
103.6
|
|
|
16.6
|
|
|
—
|
|
|
120.2
|
|
|||||
Cash and cash equivalents at end of period
|
|
$
|
—
|
|
|
$
|
93.2
|
|
|
$
|
53.8
|
|
|
$
|
—
|
|
|
$
|
147.0
|
|
Facility
|
|
Location
|
|
Customer
|
|
Year of
Start Up
|
|
Contract
Expiration
|
|
Number of
Coke Ovens
|
|
Annual Cokemaking Nameplate
Capacity
(thousands of tons)
|
|
Use of Waste Heat
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owned and Operated:
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Jewell
|
Vansant, Virginia
|
|
AM USA
|
|
1962
|
|
December 2020
|
|
142
|
|
720
|
|
Partially used for thermal coal drying
|
|
Indiana Harbor
|
East Chicago, Indiana
|
|
AM USA
|
|
1998
|
|
October 2023
|
|
268
|
|
1,220
|
|
Heat for power generation
|
|
Haverhill Phase I
|
Franklin Furnace, Ohio
|
|
AM USA
|
|
2005
|
|
December 2020
|
|
100
|
|
550
|
|
Process steam
|
|
Haverhill Phase II
|
Franklin Furnace, Ohio
|
|
AK Steel
|
|
2008
|
|
December 2021
|
|
100
|
|
550
|
|
Power generation
|
|
Granite City
|
Granite City, Illinois
|
|
U.S. Steel
|
|
2009
|
|
December 2025
|
|
120
|
|
650
|
|
Steam for power generation
|
|
Middletown
(1)
|
Middletown, Ohio
|
|
AK Steel
|
|
2011
|
|
December 2032
|
|
100
|
|
550
|
|
Power generation
|
|
|
|
|
|
|
|
|
|
|
830
|
|
4,240
|
|
|
|
Operated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vitória
|
Vitória, Brazil
|
|
ArcelorMittal Brazil
|
|
2007
|
|
January 2023
|
|
320
|
|
1,700
|
|
Steam for power generation
|
|
|
|
|
|
|
|
|
|
|
1,150
|
|
5,940
|
|
|
(1)
|
Cokemaking nameplate capacity represents stated capacity for production of blast furnace coke. The Middletown coke sales agreement provides for coke sales on a “run of oven” basis, which includes both blast furnace coke and small coke. Middletown nameplate capacity on a “run of oven” basis is
578 thousand
tons per year.
|
|
Three Months Ended March 31,
|
|
|
||||||||
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||
|
(Dollars in millions)
|
||||||||||
Net income
|
$
|
12.2
|
|
|
$
|
13.0
|
|
|
$
|
(0.8
|
)
|
Net cash provided by operating activities
|
$
|
35.3
|
|
|
$
|
57.3
|
|
|
$
|
(22.0
|
)
|
Adjusted EBITDA
|
$
|
67.3
|
|
|
$
|
64.0
|
|
|
$
|
3.3
|
|
|
|
Three Months Ended March 31,
|
|
|
||||||||
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||
|
|
|
|
|
|
|
||||||
|
|
(Dollars in millions)
|
||||||||||
Revenues
|
|
|
|
|
|
|
||||||
Sales and other operating revenue
|
|
$
|
391.3
|
|
|
$
|
350.5
|
|
|
$
|
40.8
|
|
Costs and operating expenses
|
|
|
|
|
|
|
||||||
Cost of products sold and operating expenses
|
|
307.4
|
|
|
270.6
|
|
|
36.8
|
|
|||
Selling, general and administrative expenses
|
|
16.7
|
|
|
15.9
|
|
|
0.8
|
|
|||
Depreciation and amortization expense
|
|
37.2
|
|
|
32.9
|
|
|
4.3
|
|
|||
Total costs and operating expenses
|
|
361.3
|
|
|
319.4
|
|
|
41.9
|
|
|||
Operating income
|
|
30.0
|
|
|
31.1
|
|
|
(1.1
|
)
|
|||
Interest expense, net
|
|
14.8
|
|
|
15.8
|
|
|
(1.0
|
)
|
|||
Loss on extinguishment of debt
|
|
—
|
|
|
0.3
|
|
|
(0.3
|
)
|
|||
Income before income tax expense
|
|
15.2
|
|
|
15.0
|
|
|
0.2
|
|
|||
Income tax expense
|
|
3.0
|
|
|
2.0
|
|
|
1.0
|
|
|||
Net income
|
|
12.2
|
|
|
13.0
|
|
|
(0.8
|
)
|
|||
Less: Net income attributable to noncontrolling interests
|
|
2.4
|
|
|
4.3
|
|
|
(1.9
|
)
|
|||
Net income attributable to SunCoke Energy, Inc.
|
|
$
|
9.8
|
|
|
$
|
8.7
|
|
|
$
|
1.1
|
|
|
|
Three Months Ended March 31,
|
|
|
||||||||
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||
|
|
(Dollars in millions)
|
||||||||||
Net income attributable to the Partnership's common public unitholders'
(1)
|
|
$
|
1.7
|
|
|
$
|
4.6
|
|
|
$
|
(2.9
|
)
|
Net income (loss) attributable to third-party interest in our Indiana Harbor cokemaking facility
(2)
|
|
0.7
|
|
|
(0.3
|
)
|
|
1.0
|
|
|||
Net income attributable to noncontrolling interest
|
|
$
|
2.4
|
|
|
$
|
4.3
|
|
|
$
|
(1.9
|
)
|
(1)
|
The decrease during the
three months ended March 31, 2019
was due to lower net income at the Partnership, decreasing income allocated to public unitholders.
|
•
|
Domestic Coke consists of our Jewell facility, located in Vansant, Virginia, our Indiana Harbor facility, located in East Chicago, Indiana, our Haverhill facility, located in Franklin Furnace, Ohio, our Granite City facility located in Granite City, Illinois, and our Middletown facility located in Middletown, Ohio.
|
•
|
Brazil Coke consists of operations in Vitória, Brazil, where we operate the ArcelorMittal Brazil cokemaking facility.
|
•
|
Logistics consists of CMT, located in Convent, Louisiana, KRT, located in Ceredo and Belle, West Virginia, Lake Terminal, located in East Chicago, Indiana, and DRT, located in Vansant, Virginia. Lake Terminal and DRT are located adjacent to our Indiana Harbor and Jewell cokemaking facilities, respectively.
|
|
|
Three Months Ended March 31,
|
|
|
||||||||
|
|
2019
|
|
2018
|
|
Increase (Decrease)
|
||||||
|
|
|
|
|
|
|
||||||
|
|
(Dollars in millions)
|
||||||||||
Sales and other operating revenues:
|
|
|
|
|
|
|
||||||
Domestic Coke
|
|
$
|
359.3
|
|
|
$
|
318.1
|
|
|
$
|
41.2
|
|
Brazil Coke
|
|
9.7
|
|
|
10.1
|
|
|
(0.4
|
)
|
|||
Logistics
|
|
22.3
|
|
|
22.3
|
|
|
—
|
|
|||
Logistics intersegment sales
|
|
6.5
|
|
|
5.4
|
|
|
1.1
|
|
|||
Elimination of intersegment sales
|
|
(6.5
|
)
|
|
(5.4
|
)
|
|
(1.1
|
)
|
|||
Total sales and other operating revenues
|
|
$
|
391.3
|
|
|
$
|
350.5
|
|
|
$
|
40.8
|
|
Adjusted EBITDA
(1)
:
|
|
|
|
|
|
|
||||||
Domestic Coke
|
|
$
|
58.5
|
|
|
$
|
54.3
|
|
|
$
|
4.2
|
|
Brazil Coke
|
|
4.5
|
|
|
4.7
|
|
|
(0.2
|
)
|
|||
Logistics
|
|
12.7
|
|
|
13.6
|
|
|
(0.9
|
)
|
|||
Corporate and Other
(2)
|
|
(8.4
|
)
|
|
(8.6
|
)
|
|
0.2
|
|
|||
Total Adjusted EBITDA
|
|
$
|
67.3
|
|
|
$
|
64.0
|
|
|
$
|
3.3
|
|
Coke Operating Data:
|
|
|
|
|
|
|
||||||
Domestic Coke capacity utilization
|
|
96
|
%
|
|
92
|
%
|
|
4
|
%
|
|||
Domestic Coke production volumes (thousands of tons)
|
|
1,006
|
|
|
962
|
|
|
44
|
|
|||
Domestic Coke sales volumes (thousands of tons)
|
|
1,004
|
|
|
974
|
|
|
30
|
|
|||
Domestic Coke Adjusted EBITDA per ton
(3)
|
|
$
|
58.27
|
|
|
$
|
55.75
|
|
|
$
|
2.52
|
|
Brazilian Coke production—operated facility (thousands of tons)
|
|
419
|
|
|
441
|
|
|
(22
|
)
|
|||
Logistics Operating Data:
|
|
|
|
|
|
|
||||||
Tons handled (thousands of tons)
(4)
|
|
5,784
|
|
|
5,821
|
|
|
(37
|
)
|
|||
CMT take-or-pay shortfall tons (thousands of tons)
(5)
|
|
669
|
|
|
172
|
|
|
497
|
|
(1)
|
See
Note 13
in our consolidated financial statements for both the definition of Adjusted EBITDA and the reconciliations from GAAP to the non-GAAP measurement for the
three months ended March 31, 2019
and
2018
.
|
(2)
|
Corporate and Other includes the activity from our legacy coal mining business, which contributed Adjusted EBITDA losses of
$1.8 million
during the three months ended
March 31, 2019
, and
$2.3 million
for the
three months ended March 31, 2018
.
|
(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.
|
|
Three months ended March 31, 2019 vs. 2018
|
||||||
|
Sales and other operating revenue
|
|
Adjusted EBITDA
|
||||
|
(Dollars in millions)
|
||||||
Prior year period
|
$
|
318.1
|
|
|
$
|
54.3
|
|
Volumes
(1)
|
6.9
|
|
|
2.6
|
|
||
Coal cost recovery and yields
(2)
|
34.7
|
|
|
0.8
|
|
||
Operating and maintenance costs
(3)
|
—
|
|
|
1.0
|
|
||
Energy and other
|
(0.4
|
)
|
|
(0.2
|
)
|
||
Current year period
|
$
|
359.3
|
|
|
$
|
58.5
|
|
(1)
|
The increase in volumes was driven by improved performance from rebuilt ovens at our Indiana Harbor facility.
|
(2)
|
The increase in coal cost recovery and yields was driven by higher coal prices. The benefit of higher coal prices was partly offset by the impact of higher coal moistures as a result of heavy rainfall during the winter of 2019, which negatively impacted coal-to-coke yields and Adjusted EBITDA by $1.6 million.
|
(3)
|
The first quarter of 2019 benefited from the timing of planned outage work as compared the same prior year period.
|
|
Three months ended March 31, 2019 vs. 2018
|
||||||
|
Sales and other operating revenue, inclusive of intersegment sales
|
|
Adjusted EBITDA
|
||||
|
(Dollars in millions)
|
||||||
Prior year period
|
$
|
27.7
|
|
|
$
|
13.6
|
|
Transloading volumes
(1)
|
(1.7
|
)
|
|
(1.9
|
)
|
||
Price/margin impact of mix in transloading services
|
1.1
|
|
|
1.1
|
|
||
Operating and maintenance costs and other
(2)
|
1.7
|
|
|
(0.1
|
)
|
||
Current year period
|
$
|
28.8
|
|
|
$
|
12.7
|
|
(1)
|
Revenues decreased due to lower export volumes at CMT, but were partially offset by higher volumes at our domestic terminals, which increased revenues $1.6 million as compared to the same prior year period.
|
(2)
|
Operating and maintenance costs and other reflects $0.5 million of incremental costs during the current year period resulting from high water levels.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
|
|
(Dollars in millions)
|
||||||
Net cash provided by operating activities
|
|
$
|
35.3
|
|
|
$
|
57.3
|
|
Net cash used in investing activities
|
|
(20.9
|
)
|
|
(15.4
|
)
|
||
Net cash used in financing activities
|
|
(16.2
|
)
|
|
(15.1
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
|
$
|
(1.8
|
)
|
|
$
|
26.8
|
|
•
|
Ongoing capital expenditures required to maintain equipment reliability, the integrity and safety of our coke ovens and steam generators and to comply with environmental regulations. Ongoing capital expenditures are made to replace partially or fully depreciated assets in order to maintain the existing operating capacity of the assets and/or to extend their useful lives and also include new equipment that improves the efficiency, reliability or effectiveness of existing assets. Ongoing capital expenditures do not include normal repairs and maintenance expenses, which are expensed as incurred;
|
•
|
Environmental remediation project expenditures required to implement design changes to ensure that our existing facilities operate in accordance with existing environmental permits; and
|
•
|
Expansion capital expenditures to acquire and/or construct complementary assets to grow our business and to expand existing facilities as well as capital expenditures made to enable the renewal of a coke sales agreement and/or logistics service agreement and on which we expect to earn a reasonable return.
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2019
|
|
2018
|
||||
|
|
|
|
|
||||
|
|
(Dollars in millions)
|
||||||
Ongoing capital
(1)
|
|
$
|
16.4
|
|
|
$
|
8.1
|
|
Environmental remediation projects
(2)
|
|
4.5
|
|
|
7.3
|
|
||
Total capital expenditures
|
|
$
|
20.9
|
|
|
$
|
15.4
|
|
(1)
|
Includes
$4.8 million
and
$3.4 million
of capital expenditures in connection with our current oven rebuild initiative at our Indiana Harbor facility, during the
three months ended March 31, 2019
and
2018
, respectively.
|
(2)
|
Includes
$1.2 million
and
$0.5 million
of capitalized interest in connection with the environmental remediation projects during the
three months ended March 31, 2019
and
2018
, respectively.
|
|
|
2019
|
||||||
|
|
Low
|
|
High
|
||||
Net cash provided by operating activities
|
|
$
|
180
|
|
|
$
|
195
|
|
Subtract:
|
|
|
|
|
||||
Depreciation and amortization expense
|
|
150
|
|
|
145
|
|
||
Changes in working capital and other
|
|
(14
|
)
|
|
(1
|
)
|
||
Net income
|
|
$
|
44
|
|
|
$
|
51
|
|
Add:
|
|
|
|
|
||||
Depreciation and amortization expense
|
|
150
|
|
|
145
|
|
||
Interest expense, net
|
|
65
|
|
|
65
|
|
||
Income tax expense
|
|
6
|
|
|
14
|
|
||
Adjusted EBITDA
|
|
$
|
265
|
|
|
$
|
275
|
|
Subtract: Adjusted EBITDA attributable to noncontrolling interests
(1)
|
|
83
|
|
|
87
|
|
||
Adjusted EBITDA attributable to SunCoke Energy, Inc.
|
|
$
|
182
|
|
|
$
|
188
|
|
(1)
|
Reflects non-controlling interest in Indiana Harbor and the portion of the Partnership owned by public unitholders.
|
•
|
changes in levels of production, production capacity, pricing and/or margins for coal and coke;
|
•
|
variation in availability, quality and supply of metallurgical coal used in the cokemaking process, including as a result of non-performance by our suppliers;
|
•
|
changes in the marketplace that may affect our logistics business, including the supply and demand for thermal and metallurgical coal;
|
•
|
changes in the marketplace that may affect our cokemaking business, including the supply and demand for our coke products, as well as increased imports of coke from foreign producers;
|
•
|
competition from alternative steelmaking and other technologies that have the potential to reduce or eliminate the use of coke;
|
•
|
our dependence on, relationships with, and other conditions affecting our customers;
|
•
|
our dependence on, relationships with, and other conditions affecting our suppliers;
|
•
|
severe financial hardship or bankruptcy of one or more of our major customers, or the occurrence of a customer default or other event affecting our ability to collect payments from our customers;
|
•
|
volatility and cyclical downturns in the steel industry and in other industries in which our customers and/or suppliers operate;
|
•
|
volatility, cyclical downturns and other change in the business climate and market for coal, affecting customers or potential customers for the Partnership's logistics business;
|
•
|
our significant equity interest in the Partnership;
|
•
|
our ability to repair aging coke ovens to maintain operational performance;
|
•
|
our ability to enter into new, or renew existing, long-term agreements upon favorable terms for the sale of coke, steam, or electric power, or for handling services of coal and other aggregates (including transportation, storage and mixing);
|
•
|
the Partnership's ability to enter into new, or renew existing, agreements upon favorable terms for logistics services;
|
•
|
our ability to identify acquisitions, execute them under favorable terms, and integrate them into our existing business operations;
|
•
|
our ability to consummate investments under favorable terms, including with respect to existing cokemaking facilities, which may utilize by-product technology, and integrate them into our existing businesses and have them perform at anticipated levels;
|
•
|
our ability to develop, design, permit, construct, start up, or operate new cokemaking facilities in the U.S. or in foreign countries;
|
•
|
our ability to successfully implement domestic and/or our international growth strategies;
|
•
|
our ability to realize expected benefits from investments and acquisitions;
|
•
|
age of, and changes in the reliability, efficiency and capacity of the various equipment and operating facilities used in our cokemaking operations, and in the operations of our subsidiaries, major customers, business partners, and/or suppliers;
|
•
|
changes in the expected operating levels of our assets;
|
•
|
our ability to meet minimum volume requirements, coal-to-coke yield standards and coke quality standards in our coke sales agreements;
|
•
|
changes in the level of capital expenditures or operating expenses, including any changes in the level of environmental capital, operating or remediation expenditures;
|
•
|
our ability to service our outstanding indebtedness;
|
•
|
our ability to comply with the restrictions imposed by our financing arrangements;
|
•
|
our ability to comply with applicable federal, state or local laws and regulations, including, but not limited to, those relating to environmental matters;
|
•
|
nonperformance or force majeure by, or disputes with, or changes in contract terms with, major customers, suppliers, dealers, distributors or other business partners;
|
•
|
availability of skilled employees for our cokemaking and/or logistics operations, and other workplace factors;
|
•
|
effects of railroad, barge, truck and other transportation performance and costs, including any transportation disruptions;
|
•
|
effects of adverse events relating to the operation of our facilities and to the transportation and storage of hazardous materials or regulated media (including equipment malfunction, explosions, fires, spills, impoundment failure and the effects of severe weather conditions);
|
•
|
effects of adverse events relating to the business or commercial operations of our customers and/or suppliers;
|
•
|
disruption in our information technology infrastructure and/or loss of our ability to securely store, maintain, or transmit data due to security breach by hackers, employee error or malfeasance, terrorist attack, power loss, telecommunications failure or other events;
|
•
|
our ability to enter into joint ventures and other similar arrangements under favorable terms;
|
•
|
our ability to consummate assets sales, other divestitures and strategic restructuring in a timely manner upon favorable terms, and/or realize the anticipated benefits from such actions;
|
•
|
changes in the availability and cost of equity and debt financing;
|
•
|
impacts on our liquidity and ability to raise capital as a result of changes in the credit ratings assigned to our indebtedness;
|
•
|
changes in credit terms required by our suppliers;
|
•
|
risks related to labor relations and workplace safety;
|
•
|
proposed or final changes in existing, or new, statutes, regulations, rules, governmental policies and taxes, or their interpretations, including those relating to environmental matters and taxes;
|
•
|
the existence of hazardous substances or other environmental contamination on property owned or used by us;
|
•
|
the availability of future permits authorizing the disposition of certain mining waste and the management of reclamation areas;
|
•
|
risks related to obligations under mineral leases retained by us in connection with the divestment of our legacy coal mining business;
|
•
|
risks related to environmental compliance;
|
•
|
risks related to the ability of the assignee(s) to perform in compliance with applicable requirements under mineral leases assigned in connection with the divestment of our legacy coal mining business;
|
•
|
claims of noncompliance with any statutory or regulatory requirements;
|
•
|
proposed or final changes in accounting and/or tax methodologies, laws, regulations, rules, or policies, or their interpretations, including those affecting inventories, leases, post-employment benefits, income or other matters;
|
•
|
historical consolidated financial data may not be reliable indicators of future results;
|
•
|
public company costs;
|
•
|
our indebtedness and certain covenants in our debt documents;
|
•
|
our ability to secure new coal supply agreements or to renew existing coal supply agreements;
|
•
|
required permits and other regulatory approvals and compliance with contractual obligations and/or bonding requirements in connection with our cokemaking, logistics operations, and/or former coal mining activities;
|
•
|
changes in product specifications for the coke that we produce or the coals we mix, store and transport;
|
•
|
changes in insurance markets impacting cost, level and/or types of coverage available, and the financial ability of our insurers to meet their obligations;
|
•
|
changes in tax laws or their interpretations, including regulations governing the federal income tax treatment of the Partnership;
|
•
|
volatility in foreign currency exchange rates affecting the markets and geographic regions in which we conduct business;
|
•
|
the accuracy of our estimates of reclamation and other mine closure obligations;
|
•
|
inadequate protection of our intellectual property rights; and
|
•
|
effects of geologic conditions, weather, natural disasters and other inherent risks beyond our control.
|
Exhibit
Number |
|
|
|
Description
|
|
|
|
|
|
2.3
|
|
|
|
Agreement and Plan of Merger dated as of February 4, 2019 by and among SunCoke Energy, Inc., SC Energy Acquisition LLC, SunCoke Energy Partners, L.P., and SunCoke Energy Partners GP LLC. (incorporated by reference herein to Exhibit 2.1 to the Company's Current Report on Form 8-K, filed on February 5, 2019 File No. 001-35243
|
10.11
|
|
|
|
Support Agreement, dated as of February 4, 2019, by and between SunCoke Energy Partners, L.P., and Sun Coal & Coke LLC (incorporated by reference Ex. 10.1) to the Company's Current Report on Form 8-K, filed on February 5, 2019, File No. 001-35243
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
101*
|
|
|
|
The following financial statements from SunCoke Energy, Inc.'s Quarterly Report on Form 10-Q for the three months ended March 31, 2019, filed with the Securities and Exchange Commission on April 24, 2019, formatted in XBRL (eXtensible Business Reporting Language is attached to this report): (i) the Consolidated Statements of Income; (ii) the Consolidated Balance Sheets; (iii) the Consolidated Statements of Cash Flows; and, (iv) the Notes to Consolidated Financial Statements. Users of this data are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
|
*
|
Filed herewith.
|
SunCoke Energy, Inc.
Investor Relations
1011 Warrenville Road
Suite 600
Lisle, Illinois 60532
|
|
|
|
|
|
SunCoke Energy, Inc.
|
|
|
|
|
|
|
||
Dated:
|
April 24, 2019
|
|
|
|
By:
|
/s/ Fay West
|
|
|
|
|
|
|
Fay West
|
|
|
|
|
|
|
Senior Vice President and Chief Financial Officer
(As Principal Financial Officer and
Duly Authorized Officer of SunCoke Energy, Inc.)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended
March 31, 2019
of SunCoke Energy, Inc. (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarter ended
March 31, 2019
of SunCoke Energy, Inc. (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
This Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 2019
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in this Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 2019
fairly presents, in all material respects, the financial condition and results of operations of SunCoke Energy, Inc. for the periods presented therein.
|
1.
|
This Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 2019
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in this Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 2019
fairly presents, in all material respects, the financial condition and results of operations of SunCoke Energy, Inc. for the periods presented therein.
|
(1)
|
The table does not include the following: (i) facilities which have been idle or closed unless they received a citation or order issued by MSHA, (ii) permitted mining sites where we have not begun operations or (iii) mines that are operated on our behalf by contractors who hold the MSHA numbers and have the MSHA liabilities.
|
(2)
|
Alleged violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard.
|
(3)
|
Alleged failures to totally abate a citation within the period of time specified in the citation.
|
(4)
|
Alleged unwarrantable failure (i.e., aggravated conduct constituting more than ordinary negligence) to comply with a mining safety standard or regulation.
|
(5)
|
Alleged flagrant violations issued.
|
(6)
|
Alleged conditions or practices which could reasonably be expected to cause death or serious physical harm before such condition or practice can be abated.
|
(7)
|
Amounts shown include assessments proposed during the quarter ended
March 31, 2019
and do not necessarily relate to the citations or orders reflected in this table. Assessments for citations or orders reflected in this table may be proposed by MSHA after
March 31, 2019
.
|
(8)
|
Alleged pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of coal or other mine health or safety hazards.
|
(9)
|
Alleged potential to have a pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of coal or other mine health or safety hazards.
|
(10)
|
This number reflects legal proceedings which remain pending before the Federal Mine Safety and Health Review Commission (the “FMSHRC”) as of
March 31, 2019
. The pending legal actions may relate to the citations or orders issued by MSHA during the reporting period or to citations or orders issued in prior periods. The FMSHRC has jurisdiction to hear not only challenges to citations, orders, and penalties but also certain complaints by miners. The number of “pending legal actions” reported here reflects the number of contested citations, orders, penalties or complaints which remain pending as of
March 31, 2019
.
|
(11)
|
The legal proceedings reflected in this column of the table are categorized as follows in accordance with the categories established in the Procedural Rules of the FMSHRC:
|
Mine or Operating Name/MSHA Identification Number
|
Contests of Citations and Orders (#)
|
Contests of Proposed Penalties (#)
|
Complaints for Compensation (#)
|
Complaints for Discharge, Discrimination or Interference Under Section 105 (#)
|
Applications for Temporary Relief (#)
|
Appeals of Judges’ Decisions or Orders (#)
|
4400649/ #2 Prep Plant
|
0
|
0
|
0
|
0
|
0
|
0
|
Total
|
0
|
0
|
0
|
0
|
0
|
0
|
(12)
|
This number reflects legal proceedings initiated before the FMSHRC during the quarter ended
March 31, 2019
. The number of “initiated legal actions” reported here may not have remained pending as of
March 31, 2019
.
|
(13)
|
This number reflects legal proceedings before the FMSHRC that were resolved during the quarter ended
March 31, 2019
.
|