Core Viewpoint - The Zacks Coal industry is experiencing significant challenges due to declining coal usage in U.S. thermal power plants, with projections indicating a marginal improvement in demand by 2025 followed by a drop in 2026 due to ongoing energy transitions and utility operators phasing out coal assets [1][3]. Industry Overview - The Zacks Coal industry includes companies involved in coal exploration and mining, with the U.S. holding an estimated 252 billion short tons of recoverable coal reserves, 58% of which is underground mineable [3]. - Five U.S. states contribute to approximately 70% of annual coal production and 60% of surface mine extraction [3]. - The industry faces long-term challenges as renewable energy adoption accelerates and coal-fired power plants are gradually retired [3]. Trends Impacting the Industry - Coal export volumes are expected to decline in 2025 and continue into 2026 due to a global supply surplus and falling prices, particularly affecting metallurgical coal exports [2][4]. - The U.S. coal production is projected to be 531 million short tons in 2025, an increase from 512 million short tons in 2024, but expected to drop to 494 million short tons in 2026 [5]. - Coal's share in U.S. electricity generation is anticipated to decrease from 17% in 2025 to 16% in 2026, driven by rising environmental concerns and the transition to cleaner energy sources [5]. Industry Performance and Valuation - The Zacks Coal industry ranks 230, placing it in the bottom 5% of 243 Zacks industries, indicating a lackluster performance outlook [6][8]. - The coal industry has outperformed the Zacks Oil and Gas sector and the S&P 500 composite over the past year, with a gain of 22.7% compared to a 4.2% decline in the Oil-Energy sector and a 13.9% gain in the S&P 500 [9]. - The industry currently trades at a trailing 12-month EV/EBITDA of 8.84X, significantly lower than the Zacks S&P 500 composite's 18.12X [12]. Notable Companies - **Alliance Resource Partners (ARLP)**: Based in Tulsa, OK, ARLP produces coal primarily for utilities and industrial users, with projected sales tonnage in 2025 between 32.75-34 million short tons. The current distribution yield is 9.58% [16][17]. - **SunCoke Energy (SXC)**: Located in Lisle, IL, SXC focuses on metallurgical coal essential for steel production. The company benefits from its acquisition of Phoenix Global, which is expected to enhance earnings and cash flow stability. The current dividend yield is 5.82% [21][22].

Core Insights - Artificial intelligence (AI) is identified as the greatest investment opportunity of the current era, with a strong emphasis on the urgent need for energy to support its growth [1][2][3] - A specific company is highlighted as a key player in the AI energy sector, owning critical energy infrastructure assets that are essential for meeting the increasing energy demands of AI technologies [3][7][8] Investment Opportunity - Wall Street is investing heavily in AI, but there is a looming energy crisis as AI technologies require vast amounts of electricity, comparable to the energy consumption of small cities [2][3] - The company in focus is positioned to benefit from the surge in demand for electricity driven by AI data centers, making it a potentially lucrative investment [3][8] Company Profile - The company owns significant nuclear energy infrastructure assets, which are crucial for America's future power strategy [7] - It is capable of executing large-scale engineering, procurement, and construction (EPC) projects across various energy sectors, including oil, gas, and renewables [7][8] - The company is debt-free and has a substantial cash reserve, amounting to nearly one-third of its market capitalization, which positions it favorably compared to other energy firms burdened with debt [8][10] Market Position - The company has an equity stake in another prominent AI-related venture, providing investors with indirect exposure to multiple growth opportunities in the AI sector [9] - It is trading at a low valuation of less than 7 times earnings, making it an attractive option for investors looking for undervalued stocks in the AI and energy space [10] Future Outlook - The ongoing technological revolution driven by AI is expected to create significant investment opportunities, with a focus on companies that can adapt and thrive in this changing landscape [11][12] - The combination of AI infrastructure needs, energy demands, and the onshoring trend driven by tariffs presents a unique investment landscape that the highlighted company is well-positioned to navigate [14]

Core Insights - SunCoke Energy reported mixed results for Q2 2025, with revenue exceeding expectations but earnings per share and profitability falling short of forecasts [1][5][14] - The company is facing persistent headwinds in core operating results despite strategic advancements such as the Phoenix Global acquisition [1][13] Financial Performance - Q2 2025 GAAP EPS was $0.02, missing the estimate of $0.17, and down 92% from $0.25 in Q2 2024 [2] - Revenue for Q2 2025 was $434.1 million, surpassing the estimate of $348.05 million but down 7.8% from $470.9 million in Q2 2024 [2] - Adjusted EBITDA decreased by 31.3% year-over-year to $43.6 million [2] - Net income attributable to SunCoke was $1.9 million, a 91.2% decrease from $21.5 million in the prior year [2] Business Overview - SunCoke Energy primarily produces coke, essential for steelmaking, and operates a logistics segment for raw materials and finished coke [3] - The company relies on long-term, take-or-pay contracts with major steel producers, ensuring stable cash flow [4][9] Segment Performance - Domestic Coke segment revenue fell by 7% year-over-year, with adjusted EBITDA down 30% [6] - Logistics segment revenue dropped by 25.2% compared to the prior year, with adjusted EBITDA down 36.9% [7] - Brazil Coke operations remained stable with no significant year-over-year changes [8] Strategic Developments - The acquisition of Phoenix Global for $325 million is expected to enhance earnings and broaden the customer base, although it incurred upfront transaction costs [13] - The company extended its revolving credit facility to July 2030, improving liquidity [13] Future Outlook - Management reaffirmed full-year 2025 guidance for Adjusted EBITDA between $210 million and $225 million [14] - Domestic Coke production is projected at approximately 4.0 million tons in 2025, with operating cash flow expected between $165 million and $180 million [14]

Financial Data and Key Metrics Changes - SunCoke Energy reported consolidated adjusted EBITDA of $43.6 million for Q2 2025, a decrease from $63.5 million in the prior year period, primarily due to lower contract coke sales and unfavorable economics from the Granite City contract extension [4][12] - Net income attributable to SunCoke was $0.02 per share, down $0.23 compared to the prior year, impacted by lower contract coke sales and transaction costs related to the acquisition of Phoenix Global [11][12] - The company ended Q2 with a strong liquidity position of $536.2 million, including a cash balance of $186.2 million and a fully undrawn revolver of $350 million [5][14] Business Line Data and Key Metrics Changes - Domestic coke adjusted EBITDA for Q2 was $40.5 million, with coke sales volumes at 943,000 tons, reflecting a decrease due to a change in the mix of contract and spot coke sales [12][13] - The logistics business generated $7.7 million of adjusted EBITDA, with terminals handling combined throughput volumes of 4.8 million tons, also impacted by lower transloading volumes due to market conditions [13][14] Market Data and Key Metrics Changes - The company expects higher contract coke sales in the second half of the year, reaffirming its domestic coke adjusted EBITDA guidance range of $185 million to $192 million [13] - Logistics adjusted EBITDA guidance for the full year remains at $45 million to $50 million, with expectations of improved volumes in the second half [14][18] Company Strategy and Development Direction - The acquisition of Phoenix Global for $325 million is seen as a strategic fit, expected to be immediately accretive and providing opportunities for organic growth through new industrial customers [5][6][10] - The company aims to integrate Phoenix's operations into a new Industrial Services segment, leveraging its strong financial position and operational excellence [10][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improvements in both logistics and domestic coke in the second half of the year, reaffirming full-year consolidated adjusted EBITDA guidance of $210 million to $225 million [18] - The company is focused on maintaining operational discipline and capital allocation to reward long-term shareholders while integrating Phoenix's operations [17][18] Other Important Information - The company amended and extended its revolving credit facility, now maturing in July 2030, with covenants similar to the previous agreement [5][14] - The acquisition is expected to generate annual synergies of approximately $5 million to $10 million [6] Q&A Session Summary Question: Can you walk us through the drivers of the improvement from here? - Management indicated that the second quarter was expected to be the trough of 2025, with higher contract coke sales anticipated in the second half, aiming for a total of 2 million to 2.1 million tons of coke sales [20][21] Question: Can you talk about the macro drivers of Phoenix Global? - Management highlighted excitement about the EAF exposure from Phoenix, which diversifies the customer base and presents opportunities for organic growth [23][25] Question: What are the recent conversations with your largest customer regarding contract renewals? - Management confirmed active discussions with Cliffs regarding contract renewals, noting that they were surprised by comments made during Cliffs' earnings call [27][28] Question: How do you view the logistics business and export coal demand? - Management acknowledged that the majority of volumes at CMT are coal for export, with higher domestic pricing impacting international shipments, but reaffirmed logistics guidance based on expected volumes [39][40] Question: Any updates on the GPI project? - Management stated they are in active discussions with U.S. Steel regarding the GPI project but had no further details to share at this time [47]

**Form 10-Q Filing Information**](index=1&type=section&id=Form%2010-Q%20Filing%20Information) This section provides the basic filing information for the Quarterly Report on Form 10-Q for the period ended June 30, 2025, filed by SunCoke Energy, Inc. - Registrant: **SUNCOKE ENERGY, INC.**[2](index=2&type=chunk) - Quarterly period ended: **June 30, 2025**[2](index=2&type=chunk) - Commission File Number: **001-35243**[2](index=2&type=chunk) **Registered Securities** | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | --- | --- | --- | | Common Stock, par value $0.01 per share | SXC | New York Stock Exchange | **Filer Status** | Large accelerated filer | ý | Accelerated filer | ☐ | | --- | --- | --- | --- | | Non-accelerated filer | ¨ | Smaller reporting company | ☐ | | | | Emerging growth company | ☐ | - Shares of Common Stock outstanding as of **July 25, 2025**: **84,665,509**[4](index=4&type=chunk) **Cautionary Statement Concerning Forward-Looking Statements**](index=3&type=section&id=CAUTIONARY%20STATEMENT%20CONCERNING%20FORWARD-LOOKING%20STATEMENTS) This section outlines the nature of forward-looking statements made in the report, emphasizing that they are based on management's current beliefs and assumptions and involve risks and uncertainties. It also states that the company has no obligation to update these statements, except as required by law, and lists various risk factors that could cause actual results to differ materially. - Forward-looking statements are identified by terms like **'believe,' 'expect,' 'plan,' 'intend,' 'anticipate,' 'estimate,' 'predict,' 'potential,' 'continue,' 'may,' 'will,' 'should'** or their negatives[8](index=8&type=chunk) - Such statements are not guarantees of future performance and are based on current knowledge, beliefs, and expectations, which may prove inaccurate[8](index=8&type=chunk) - The company does not have any intention or obligation to update any forward-looking statement after the report date, except as required by applicable law[9](index=9&type=chunk) - Risk factors include impacts of international conflicts, inflation, trade regulations, volatility in steel and coal industries, changes in coke and coal markets, customer financial hardship, operational performance of coke ovens, environmental compliance, labor relations, indebtedness, competition from alternative technologies, and ability to implement growth strategies or acquisitions[10](index=10&type=chunk)[11](index=11&type=chunk)[14](index=14&type=chunk) **PART I – FINANCIAL INFORMATION**](index=6&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section presents the company's unaudited consolidated financial statements and management's discussion and analysis of financial condition and results of operations **Item 1. Consolidated Financial Statements**](index=6&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements of **SunCoke Energy, Inc.** for the three and six months ended **June 30, 2025** and **2024**, including statements of income, comprehensive income, balance sheets, cash flows, and equity, along with accompanying notes **Consolidated Statements of Income (Unaudited)**](index=6&type=section&id=Consolidated%20Statements%20of%20Income%20(Unaudited)%20For%20the%20Three%20and%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) The consolidated statements of income show a significant decrease in net income attributable to **SunCoke Energy, Inc.** for both the three and six months ended **June 30, 2025**, compared to the prior year, primarily due to lower revenues and operating income **Consolidated Statements of Income (Unaudited)** | Metric | Three Months Ended June 30, 2025 (Millions $) | Three Months Ended June 30, 2024 (Millions $) | Change (Millions $) | Six Months Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2024 (Millions $) | Change (Millions $) | | :----------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------ | :----------------------------------------- | :----------------------------------------- | :------------------ | | Revenues | 434.1 | 470.9 | (36.8) | 870.1 | 959.3 | (89.2) | | Total costs and operating expenses | 424.3 | 436.2 | (11.9) | 830.1 | 890.1 | (60.0) | | Operating income | 9.8 | 34.7 | (24.9) | 40.0 | 69.2 | (29.2) | | Income before income tax expense | 4.4 | 28.9 | (24.5) | 29.4 | 57.1 | (27.7) | | Net income | 3.5 | 23.3 | (19.8) | 22.9 | 44.4 | (21.5) | | Net income attributable to SunCoke Energy, Inc. | 1.9 | 21.5 | (19.6) | 19.2 | 41.5 | (22.3) | | Basic EPS | 0.02 | 0.25 | (0.23) | 0.22 | 0.49 | (0.27) | | Diluted EPS | 0.02 | 0.25 | (0.23) | 0.22 | 0.49 | (0.27) | - Net income attributable to **SunCoke Energy, Inc.** decreased by **$19.6 million (91.2%)** for the three months ended **June 30, 2025**, and by **$22.3 million (53.7%)** for the six months ended **June 30, 2025**, compared to the respective prior year periods[17](index=17&type=chunk) **Consolidated Statements of Comprehensive Income (Unaudited)**](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)%20For%20the%20Three%20and%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) The consolidated statements of comprehensive income show a decrease in comprehensive income attributable to **SunCoke Energy, Inc.** for both the three and six months ended **June 30, 2025**, primarily driven by the decrease in net income **Consolidated Statements of Comprehensive Income (Unaudited)** | Metric | Three Months Ended June 30, 2025 (Millions $) | Three Months Ended June 30, 2024 (Millions $) | Change (Millions $) | Six Months Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2024 (Millions $) | Change (Millions $) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------ | :----------------------------------------- | :----------------------------------------- | :------------------ | | Net income | 3.5 | 23.3 | (19.8) | 22.9 | 44.4 | (21.5) | | Other comprehensive income (loss) | 0.2 | (0.7) | 0.9 | 0.4 | (0.8) | 1.2 | | Comprehensive income | 3.7 | 22.6 | (18.9) | 23.3 | 43.6 | (20.3) | | Comprehensive income attributable to SunCoke Energy, Inc. | 2.1 | 20.8 | (18.7) | 19.6 | 40.7 | (21.1) | - Other comprehensive income (loss) for the three months ended **June 30, 2025**, was **$0.2 million**, a positive change from a loss of **$0.7 million** in the prior year, mainly due to currency translation adjustment[19](index=19&type=chunk) **Consolidated Balance Sheets**](index=8&type=section&id=Consolidated%20Balance%20Sheets%20at%20June%2030,%202025%20(Unaudited)%20and%20December%2031,%202024) The consolidated balance sheets show a slight decrease in total assets and total equity at **June 30, 2025**, compared to **December 31, 2024**, while total liabilities also decreased **Consolidated Balance Sheets (Millions $)** | Metric | June 30, 2025 | December 31, 2024 | Change | | :----------------------------------- | :------------ | :---------------- | :----- | | Cash and cash equivalents | 186.2 | 189.6 | (3.4) | | Total current assets | 484.0 | 474.6 | 9.4 | | Properties, plants and equipment (net) | 1,107.6 | 1,143.6 | (36.0) | | Total assets | 1,641.4 | 1,668.2 | (26.8) | | Total current liabilities | 185.1 | 205.8 | (20.7) | | Long-term debt | 493.4 | 492.3 | 1.1 | | Total liabilities | 934.4 | 957.2 | (22.8) | | Total SunCoke Energy, Inc. stockholders' equity | 677.7 | 680.2 | (2.5) | | Total equity | 707.0 | 711.0 | (4.0) | - Total assets decreased by **$26.8 million** to **$1,641.4 million** at **June 30, 2025**, from **$1,668.2 million** at **December 31, 2024**[21](index=21&type=chunk) - Total liabilities decreased by **$22.8 million** to **$934.4 million** at **June 30, 2025**, from **$957.2 million** at **December 31, 2024**[21](index=21&type=chunk) **Consolidated Statements of Cash Flows (Unaudited)**](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)%20For%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) The consolidated statements of cash flows show a significant increase in net cash provided by operating activities for the six months ended **June 30, 2025**, primarily due to favorable working capital changes, while cash used in investing activities decreased and cash used in financing activities increased **Consolidated Statements of Cash Flows (Unaudited)** | Metric | Six Months Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2024 (Millions $) | Change (Millions $) | | :----------------------------------- | :----------------------------------------- | :----------------------------------------- | :------------------ | | Net cash provided by operating activities | 43.3 | 0.7 | 42.6 | | Net cash used in investing activities | (17.2) | (33.4) | 16.2 | | Net cash used in financing activities | (29.5) | (25.5) | (4.0) | | Net decrease in cash and cash equivalents | (3.4) | (58.2) | 54.8 | | Cash and cash equivalents at end of period | 186.2 | 81.9 | 104.3 | - Net cash provided by operating activities increased significantly by **$42.6 million** to **$43.3 million** for the six months ended **June 30, 2025**, compared to **$0.7 million** in the prior year[23](index=23&type=chunk)[129](index=129&type=chunk) - Net cash used in investing activities decreased by **$16.2 million** to **$17.2 million**, primarily due to lower capital spending[23](index=23&type=chunk)[130](index=130&type=chunk) **Consolidated Statements of Equity (Unaudited)**](index=10&type=section&id=Consolidated%20Statements%20of%20Equity%20(Unaudited)%20For%20the%20Three%20and%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) The consolidated statements of equity detail changes in common stock, treasury stock, additional paid-in capital, accumulated other comprehensive loss, and retained earnings, showing a slight decrease in total equity attributable to **SunCoke Energy, Inc.** for the six months ended **June 30, 2025** **Consolidated Statements of Equity (Unaudited) - Six Months Ended June 30, 2025** | Metric | December 31, 2024 (Millions $) | June 30, 2025 (Millions $) | Change (Millions $) | | :----------------------------------- | :----------------------------- | :------------------------- | :------------------ | | Common Stock Amount | 1.0 | 1.0 | 0.0 | | Treasury Stock Amount | (184.0) | (184.0) | 0.0 | | Additional Paid-In Capital | 732.8 | 731.6 | (1.2) | | Accumulated Other Comprehensive Loss | (7.7) | (7.3) | 0.4 | | Retained Earnings | 138.1 | 136.4 | (1.7) | | Total SunCoke Energy, Inc. Stockholders' Equity | 680.2 | 677.7 | (2.5) | | Noncontrolling Interest | 30.8 | 29.3 | (1.5) | | Total Equity | 711.0 | 707.0 | (4.0) | - Total **SunCoke Energy, Inc.** stockholders' equity decreased by **$2.5 million** for the six months ended **June 30, 2025**, primarily due to dividends paid (**$20.9 million**) and a decrease in retained earnings, partially offset by net income (**$19.2 million**) and share-based compensation (**$1.8 million**)[29](index=29&type=chunk) **Notes to the Consolidated Financial Statements**](index=13&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) These notes provide detailed information and explanations supporting the consolidated financial statements, covering business description, accounting policies, specific asset and liability breakdowns, debt, commitments, share-based compensation, earnings per share, fair value measurements, revenue recognition, and business segment information **1. General**](index=13&type=section&id=1.%20General) This note describes **SunCoke Energy, Inc.**'s core business as the largest independent producer of high-quality coke in the Americas, primarily for blast furnace steelmaking and foundry production, and its logistics business providing material handling and mixing services - **SunCoke Energy** is the largest independent producer of high-quality coke in the Americas, with over **60 years** of experience[34](index=34&type=chunk) - The company owns and operates **five** cokemaking facilities in the U.S. with a collective capacity of approximately **4.2 million tons per year**, and operates **one** facility in **Brazil** for **ArcelorMittal Brasil S.A.** with **1.7 million tons annual capacity**[34](index=34&type=chunk) - The **logistics** business provides material handling and/or mixing services with a collective capacity to mix and/or transload over **40 million tons annually** and storage capacity of approximately **3 million tons**[35](index=35&type=chunk) **2. Inventories**](index=13&type=section&id=2.%20Inventories) This note provides a breakdown of the company's inventory components, showing an increase in total inventories at **June 30, 2025**, compared to **December 31, 2024**, primarily driven by higher coal inventory **Components of Inventories (Millions $)** | Component | June 30, 2025 | December 31, 2024 | Change | | :------------------------ | :------------ | :---------------- | :----- | | Coal | 141.2 | 109.3 | 31.9 | | Coke | 17.3 | 13.9 | 3.4 | | Materials, supplies and other | 56.8 | 57.6 | (0.8) | | Total inventories | 215.3 | 180.8 | 34.5 | - Total inventories increased by **$34.5 million** to **$215.3 million** at **June 30, 2025**, from **$180.8 million** at **December 31, 2024**, with coal inventory being the largest contributor to this increase[37](index=37&type=chunk) **3. Intangible Assets**](index=14&type=section&id=3.%20Intangible%20Assets) This note details the company's intangible assets, including permits and other intangibles, and reports the associated amortization expense. Goodwill remains constant **Intangible Assets, Net (Millions $)** | Asset Type | June 30, 2025 Net | December 31, 2024 Net | | :--------- | :---------------- | :-------------------- | | Permits | 23.8 | 24.4 | | Other | 1.3 | 1.4 | | Total | 25.1 | 25.8 | | Goodwill (Domestic Coke segment) | 3.4 | 3.4 | - Total amortization expense for intangible assets was **$0.4 million** for the three months ended **June 30, 2025** (down from **$0.5 million** in **2024**) and **$0.7 million** for the six months ended **June 30, 2025** (down from **$1.0 million** in **2024**)[39](index=39&type=chunk) **4. Income Taxes**](index=14&type=section&id=4.%20Income%20Taxes) This note provides information on income tax expense and effective tax rates, highlighting the impact of discrete items in the prior year and the expected favorable impact of the **One Big Beautiful Bill Act (OBBBA)** on future cash taxes **Income Tax Expense and Effective Tax Rate** | Metric | Three Months Ended June 30, 2025 (Millions $) | Three Months Ended June 30, 2024 (Millions $) | Six Months Ended June 30, 2025 (Millions $) | Six Months Ended June 30, 2024 (Millions $) | | :-------------------------- | :------------------------------------------ | :------------------------------------------ | :----------------------------------------- | :----------------------------------------- | | Income before income tax expense | 4.4 | 28.9 | 29.4 | 57.1 | | Income tax expense | 0.9 | 5.6 | 6.5 | 12.7 | | Effective tax rate | 20.5% | 19.4% | 22.1% | 22.2% | - Income tax expense for the three and six months ended **June 30, 2024**, included a **$2.2 million** deferred tax benefit from the release of a valuation allowance on state NOLs, partially offset by a **$1.9 million** expense from revaluation of deferred tax liabilities due to state tax rate changes, with no similar events in **2025**[41](index=41&type=chunk) - The recently enacted **One Big Beautiful Bill Act (OBBBA)** is expected to have a favorable impact on the company's future cash taxes, with an estimated decrease in cash taxes in **2025**[43](index=43&type=chunk) **5. Accrued Liabilities**](index=15&type=section&id=5.%20Accrued%20Liabilities) This note provides a detailed breakdown of accrued liabilities, showing a decrease in total accrued liabilities at **June 30, 2025**, primarily driven by a reduction in accrued benefits **Accrued Liabilities (Millions $)** | Component | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Accrued benefits | 16.9 | 28.7 | (11.8) | | Current portion of postretirement benefit obligation | 1.0 | 1.0 | 0.0 | | Other taxes payable | 12.8 | 10.2 | 2.6 | | Current portion of black lung liability | 1.1 | 1.0 | 0.1 | | Lease liabilities | 2.7 | 2.7 | 0.0 | | Other | 8.7 | 9.0 | (0.3) | | Total accrued liabilities | 43.2 | 52.6 | (9.4) | - Total accrued liabilities decreased by **$9.4 million** to **$43.2 million** at **June 30, 2025**, from **$52.6 million** at **December 31, 2024**[44](index=44&type=chunk) **6. Debt**](index=15&type=section&id=6.%20Debt) This note details the company's debt structure, including senior notes and the revolving credit facility, and confirms compliance with all debt covenants as of **June 30, 2025** **Total Debt (Millions $)** | Component | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | 4.875 percent senior notes, due 2029 | 500.0 | 500.0 | | $350.0 revolving credit facility, due 2026 | — | — | | Total borrowings | 500.0 | 500.0 | | Debt issuance costs | (6.6) | (7.7) | | Total debt | 493.4 | 492.3 | - As of **June 30, 2025**, the **Revolving Facility** had no outstanding balance, with **$350.0 million** available. In **July 2025**, the facility was amended and extended to **July 2030**, with capacity reduced to **$325.0 million**[46](index=46&type=chunk) - The company was in compliance with all applicable debt covenants as of **June 30, 2025**, including a maximum consolidated net leverage ratio of **4.50:1.00** and a minimum consolidated interest coverage ratio of **2.50:1.00**[47](index=47&type=chunk)[49](index=49&type=chunk) **7. Commitments and Contingent Liabilities**](index=15&type=section&id=7.%20Commitments%20and%20Contingent%20Liabilities) This note discusses legal matters, including the termination of a consent decree for the **Haverhill facility** and ongoing claims, with management believing that any potential liabilities would not have a material adverse impact on the consolidated financial statements - The consent decree for the **Haverhill facility**, related to air emission violations, was terminated on **March 25, 2025**[51](index=51&type=chunk) - The company is a party to various pending and threatened claims, including commercial disputes, employment, personal injury, tort, and environmental claims[52](index=52&type=chunk) - Management believes that any liability arising from these claims would likely not have a material adverse impact on the consolidated financial statements[52](index=52&type=chunk) **8. Share-Based Compensation**](index=16&type=section&id=8.%20Share-Based%20Compensation) This note details the company's share-based compensation programs, including equity-classified awards (Restricted Stock Units and Performance Share Units) and liability-classified awards (Cash RSUs and Cash Incentive Awards), along with their grant dates, vesting schedules, and compensation expenses - During the six months ended **June 30, 2025**, the company issued **303,093 Restricted Stock Units (RSUs)** to employees and directors, with a weighted average grant date fair value of **$9.03 per unit**[54](index=54&type=chunk) - Performance Share Units (PSUs) were granted to certain employees, with awards vesting between **25% and 240%** of original units based on **three-year** cumulative **Adjusted EBITDA** and pre-tax return on capital, and a TSR Modifier[55](index=55&type=chunk)[56](index=56&type=chunk)[59](index=59&type=chunk) **Share-Based Compensation Expense (Millions $)** | Award Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Equity Awards: RSUs | 1.1 | 1.4 | 1.3 | 1.8 | | Equity Awards: PSUs | 0.2 | 0.1 | 0.4 | 1.1 | | Liability Awards: Cash RSUs | 0.3 | 0.3 | 0.3 | 0.8 | | Liability Awards: Cash incentive award | 0.3 | 0.4 | 0.8 | 1.3 | **9. Earnings per Share**](index=17&type=section&id=9.%20Earnings%20per%20Share) This note provides the reconciliation of weighted-average common shares used to compute basic and diluted earnings per share (EPS), also listing equity awards excluded from diluted EPS calculation due to their anti-dilutive effect **Weighted-Average Number of Common Shares (Millions)** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Weighted-average number of common shares outstanding-basic | 85.5 | 85.1 | 85.5 | 85.0 | | Add: Effect of dilutive share-based compensation awards | 0.1 | 0.2 | 0.1 | 0.3 | | Weighted-average number of shares-diluted | 85.6 | 85.3 | 85.6 | 85.3 | **Anti-Dilutive Equity Awards Excluded from EPS (Millions of Shares)** | Award Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Stock options | 0.1 | 0.5 | 0.2 | 0.6 | | Restricted share units | 0.1 | — | 0.1 | — | | Performance share units | 0.1 | 0.1 | 0.1 | 0.1 | | Total | 0.3 | 0.6 | 0.4 | 0.7 | **10. Fair Value Measurement**](index=18&type=section&id=10.%20Fair%20Value%20Measurement) This note defines fair value and its three-level hierarchy, and discloses the fair value measurement of certain financial assets and liabilities, including cash and cash equivalents (Level 1) and total debt (Level 2) - Fair value is defined as the price received to sell an asset or paid to transfer a liability in an orderly transaction between market participants[67](index=67&type=chunk) - Cash and cash equivalents are measured at fair value based on quoted prices in active markets (Level 1 inputs)[68](index=68&type=chunk) - The fair value of total debt was estimated at **$464.7 million** at **June 30, 2025** (carrying amount **$500.0 million**), and **$454.9 million** at **December 31, 2024** (carrying amount **$500.0 million**), using Level 2 inputs[69](index=69&type=chunk) **11. Revenue from Contracts with Customers**](index=19&type=section&id=11.%20Revenue%20from%20Contracts%20with%20Customers) This note details the company's revenue recognition policies for its cokemaking and logistics businesses, including long-term take-or-pay agreements, and provides disaggregated sales and other operating revenue by product/service and by customer - Blast furnace coke sales are largely made under long-term, take-or-pay agreements, with approximately **17.8 million tons** of unsatisfied performance obligations expected over **nine years**[71](index=71&type=chunk) - **Logistics** revenues are derived from handling and/or mixing services on a per-ton basis, with estimated take-or-pay revenue of **$47.5 million** expected over the next **three years**[75](index=75&type=chunk)[76](index=76&type=chunk) **Disaggregated Sales and Other Operating Revenue by Product or Service (Millions $)** | Product/Service | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cokemaking | 397.2 | 429.3 | 788.5 | 876.0 | | Energy | 12.5 | 11.5 | 25.3 | 23.4 | | Logistics | 13.9 | 19.8 | 36.0 | 40.1 | | Operating and licensing fees | 8.6 | 9.1 | 16.4 | 17.4 | | Other | 1.9 | 1.2 | 3.9 | 2.4 | | Total | 434.1 | 470.9 | 870.1 | 959.3 | **Disaggregated Sales and Other Operating Revenue by Customer (Millions $)** | Customer | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Cliffs Steel | 250.7 | 286.9 | 550.0 | 604.2 | | U.S. Steel | 60.3 | 70.1 | 120.3 | 142.1 | | Other | 123.1 | 113.9 | 199.8 | 213.0 | | Total | 434.1 | 470.9 | 870.1 | 959.3 | **12. Business Segment Information**](index=20&type=section&id=12.%20Business%20Segment%20Information) This note defines the company's three reportable segments (**Domestic Coke**, **Brazil Coke**, and **Logistics**) and presents their financial performance based on **Adjusted EBITDA**, along with depreciation, capital expenditures, and segment assets - Reportable segments are **Domestic Coke** (**five** U.S. cokemaking facilities), **Brazil Coke** (operating facility for **ArcelorMittal Brazil**), and **Logistics** (material handling terminals)[79](index=79&type=chunk)[80](index=80&type=chunk) - **Adjusted EBITDA** is the primary measure of segment performance, defined as earnings before interest, taxes, depreciation, and amortization, adjusted for impairments, restructuring costs, debt extinguishment gains/losses, and transaction costs[82](index=82&type=chunk)[123](index=123&type=chunk) **Adjusted EBITDA by Segment (Millions $)** | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Domestic Coke | 40.5 | 57.9 | 90.4 | 119.3 | | Brazil Coke | 2.6 | 2.5 | 4.9 | 4.9 | | Logistics | 7.7 | 12.2 | 21.4 | 25.2 | | Corporate and Other, net | (7.2) | (9.1) | (13.3) | (18.0) | | Total Adjusted EBITDA | 43.6 | 63.5 | 103.4 | 131.4 | **Capital Expenditures by Segment (Millions $)** | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Domestic Coke | 4.5 | 16.5 | 6.6 | 31.0 | | Logistics | 8.0 | 1.0 | 10.7 | 1.6 | | Brazil Coke | — | — | 0.1 | — | | Corporate and Other | 0.1 | — | 0.1 | 0.4 | | Total capital expenditures | 12.6 | 17.5 | 17.5 | 33.0 | **Segment Assets (Millions $)** | Segment | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Domestic Coke | 1,306.8 | 1,351.1 | | Logistics | 160.4 | 158.2 | | Brazil Coke | 12.9 | 10.2 | | Corporate and Other | 161.3 | 148.7 | | Total assets | 1,641.4 | 1,668.2 | **Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, and cash flows, including an overview of the business, market discussion, key financial results, recent developments, and detailed analysis of consolidated and segment performance, liquidity, and capital expenditures **Overview**](index=25&type=section&id=Overview) This overview reiterates **SunCoke Energy**'s position as the largest independent producer of high-quality coke in the Americas, primarily serving the steelmaking industry, and highlights its logistics business providing material handling services - **SunCoke Energy** is the largest independent producer of high-quality coke in the Americas, with over **60 years** of experience[97](index=97&type=chunk) - The company operates **five** cokemaking facilities in the U.S. (**4.2 million tons/year capacity**) and **one** in **Brazil** (**1.7 million tons/year capacity**), utilizing heat recovery technology[97](index=97&type=chunk) - The **logistics** business provides material handling and mixing services with over **40 million tons annual capacity** and **3 million tons storage capacity**[98](index=98&type=chunk) **Market Discussion**](index=25&type=section&id=Market%20Discussion) This section discusses the market dynamics influencing **SunCoke**'s businesses, noting that long-term **Domestic Coke** agreements are insulated from global price fluctuations, while non-contracted coke and logistics volumes are impacted by global market conditions, energy needs, and steel/coal market trends - Long-term, take-or-pay **Domestic Coke** sales agreements are not impacted by global coke price fluctuations[99](index=99&type=chunk) - Non-contracted blast furnace coke sales are influenced by global coke prices and demand[99](index=99&type=chunk) - **Logistics** volumes at Convent Marine Terminal (CMT) are affected by seaborne export market dynamics, global energy needs, and benchmark pricing for coal exports, while Kanawha River Terminal (KRT) is impacted by steel prices, blast furnace operating levels, natural gas prices, and electricity demand[100](index=100&type=chunk) **Second Quarter Key Financial Results**](index=26&type=section&id=Second%20Quarter%20Key%20Financial%20Results) The company's consolidated financial results for the second quarter and first half of **2025** show a decline in net income and **Adjusted EBITDA** compared to the prior year, primarily due to lower pricing and volumes in the **Domestic Coke** segment and lower **Logistics** volumes, partially offset by improved operating cash flows **Second Quarter Key Financial Results (Millions $)** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Increase (Decrease) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Increase (Decrease) | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------ | :----------------------------- | :----------------------------- | :------------------ | | Net income | 3.5 | 23.3 | (19.8) | 22.9 | 44.4 | (21.5) | | Net cash provided by (used in) operating activities | 17.5 | (9.3) | 26.8 | 43.3 | 0.7 | 42.6 | | Adjusted EBITDA | 43.6 | 63.5 | (19.9) | 103.4 | 131.4 | (28.0) | - Operating results for the first half of **2025** reflect lower pricing in the **Domestic Coke** segment due to sales mix and **Granite City** contract economics, lower volumes from unfavorable coal-to-coke yields, and lower **Logistics** volumes[101](index=101&type=chunk) - Operating cash flows improved significantly year-over-year, primarily due to a favorable change in primary working capital, driven by the timing of customer payments in the prior year[101](index=101&type=chunk) **Recent Developments**](index=26&type=section&id=Recent%20Developments) This section highlights recent strategic and financial developments, including a significant acquisition, new tax legislation, an extension of the revolving credit facility, and a contract extension for the **Granite City** facility - Acquisition of **Phoenix Global**: On **May 28, 2025**, the company entered into a definitive Merger Agreement to acquire **Phoenix Global**, a mill services provider, for a base purchase price of **$325 million** in cash, expected to close in Q3 **2025**[103](index=103&type=chunk) - **One Big Beautiful Bill Act (OBBBA)**: Enacted on **July 4, 2025**, this legislation is expected to have a favorable impact on future cash taxes, with an estimated decrease in **2025**[103](index=103&type=chunk) - **Revolving Facility** Extension: In **July 2025**, the **revolving credit facility** was amended and extended to **July 2030**, with its capacity reduced by **$25.0 million** to **$325.0 million**[103](index=103&type=chunk) - **Granite City** Contract Extension: In **April 2025**, the long-term, take-or-pay agreement with **U.S. Steel** for the **Granite City** facility was extended through **September 30, 2025**, with an option for an additional three months[103](index=103&type=chunk) **Results of Operations (Consolidated)**](index=27&type=section&id=Results%20of%20Operations%20(Consolidated)) Consolidated results show a decrease in sales and other operating revenue and operating income for both the three and six months ended **June 30, 2025**, compared to the prior year, primarily driven by lower pricing and volumes in the **Domestic Coke** segment and the impact of lower coal prices **Consolidated Results of Operations (Millions $)** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (Millions $) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Millions $) | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------ | :----------------------------- | :----------------------------- | :------------------ | | Sales and other operating revenue | 434.1 | 470.9 | (36.8) | 870.1 | 959.3 | (89.2) | | Cost of products sold and operating expenses | 375.1 | 389.7 | (14.6) | 737.4 | 791.9 | (54.5) | | Selling, general and administrative expenses | 20.6 | 17.8 | 2.8 | 35.3 | 36.2 | (0.9) | | Depreciation and amortization expense | 28.6 | 28.7 | (0.1) | 57.4 | 62.0 | (4.6) | | Operating income | 9.8 | 34.7 | (24.9) | 40.0 | 69.2 | (29.2) | | Net income attributable to SunCoke Energy, Inc. | 1.9 | 21.5 | (19.6) | 19.2 | 41.5 | (22.3) | - Sales and other operating revenue decreased primarily due to lower pricing in the **Domestic Coke** segment (mix of contracted vs. non-contracted sales, **Granite City** contract economics) and the pass-through of lower coal prices on long-term agreements, compounded by lower volumes from unfavorable coal-to-coke yields[104](index=104&type=chunk) - Selling, general and administrative expenses increased for the three months ended **June 30, 2025**, due to costs related to the **Phoenix Global** acquisition, but decreased for the six-month period due to lower employee-related and legacy coal mining business expenses[105](index=105&type=chunk) **Analysis of Segment Results**](index=28&type=section&id=Analysis%20of%20Segment%20Results) This section provides a detailed analysis of the financial performance for each of the company's reportable segments: **Domestic Coke**, **Logistics**, **Brazil Coke**, and **Corporate and Other**, highlighting key drivers for changes in revenue and **Adjusted EBITDA** **Domestic Coke**](index=28&type=section&id=Domestic%20Coke) The **Domestic Coke** segment experienced a decrease in sales and other operating revenues and **Adjusted EBITDA** for both the three and six months ended **June 30, 2025**, primarily due to lower volumes from unfavorable coal-to-coke yields, lower pricing on non-contracted sales, and the impact of the **Granite City** contract extension **Domestic Coke Segment Performance (Millions $)** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (Millions $) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Millions $) | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------ | :----------------------------- | :----------------------------- | :------------------ | | Sales and Other Operating Revenues | 410.4 | 441.6 | (31.2) | 816.2 | 901.1 | (84.9) | | Adjusted EBITDA | 40.5 | 57.9 | (17.4) | 90.4 | 119.3 | (28.9) | | Capacity utilization | 95% | 99% | (4)% | 93% | 99% | (6)% | | Production volumes (thousands of tons) | 947 | 978 | (31) | 1,852 | 1,978 | (126) | | Sales volumes (thousands of tons) | 943 | 973 | (30) | 1,841 | 1,969 | (128) | | Adjusted EBITDA per ton | 42.95 | 59.51 | (16.56) | 49.10 | 60.59 | (11.49) | - The decrease in sales and **Adjusted EBITDA** was driven by lower volumes due to unfavorable coal-to-coke yields and the **Granite City** contract extension, as well as lower pricing on non-contracted blast coke sales and the pass-through of lower coal prices[117](index=117&type=chunk)[121](index=121&type=chunk) - Operating and maintenance costs benefited from lower planned maintenance outage costs in the current year[121](index=121&type=chunk) **Logistics**](index=29&type=section&id=Logistics) The **Logistics** segment reported decreased sales and other operating revenues and **Adjusted EBITDA** for both the three and six months ended **June 30, 2025**, primarily due to lower transloading volumes and pricing at CMT **Logistics Segment Performance (Millions $)** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (Millions $) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Millions $) | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------ | :----------------------------- | :----------------------------- | :------------------ | | Sales and Other Operating Revenues (exclusive of intersegment) | 15.1 | 20.2 | (5.1) | 37.5 | 40.8 | (3.3) | | Adjusted EBITDA | 7.7 | 12.2 | (4.5) | 21.4 | 25.2 | (3.8) | | Tons handled (thousands of tons) | 4,746 | 5,982 | (1,236) | 10,470 | 11,435 | (965) | - **Logistics** results reflect lower transloading volumes and lower transloading pricing at Convent Marine Terminal (CMT), driven by the absence of an index price adjustment benefit[118](index=118&type=chunk) **Brazil Coke**](index=29&type=section&id=Brazil%20Coke) The **Brazil Coke** segment's sales and other operating revenue and **Adjusted EBITDA** remained reasonably consistent for both the three and six months ended **June 30, 2025**, compared to the prior year periods **Brazil Coke Segment Performance (Millions $)** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (Millions $) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Millions $) | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------ | :----------------------------- | :----------------------------- | :------------------ | | Sales and Other Operating Revenues | 8.6 | 9.1 | (0.5) | 16.4 | 17.4 | (1.0) | | Adjusted EBITDA | 2.6 | 2.5 | 0.1 | 4.9 | 4.9 | — | | Production (thousands of tons) | 371 | 397 | (26) | 751 | 768 | (17) | - Sales and other operating revenue and **Adjusted EBITDA** were reasonably consistent year-over-year[119](index=119&type=chunk) **Corporate and Other**](index=29&type=section&id=Corporate%20and%20Other) The **Corporate and Other** segment reported a reduced **Adjusted EBITDA** loss for both the three and six months ended **June 30, 2025**, benefiting from lower employee-related expenses and reduced expenses from the legacy coal mining business **Corporate and Other Adjusted EBITDA (Millions $)** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change (Millions $) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Millions $) | | :----------------------------------- | :------------------------------- | :------------------------------- | :------------------ | :----------------------------- | :----------------------------- | :------------------ | | Adjusted EBITDA (loss) | (7.2) | (9.1) | 1.9 | (13.3) | (18.0) | 4.7 | - The segment benefited from lower employee-related expenses and reduced expenses related to the legacy coal mining business[120](index=120&type=chunk) **Non-GAAP Financial Measures**](index=31&type=section&id=Non-GAAP%20Financial%20Measures) This section defines **Adjusted EBITDA** as a non-GAAP financial measure used by management and investors to analyze financial performance, and provides a reconciliation to its most directly comparable GAAP measure, net income - **Adjusted EBITDA** is defined as earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for impairments, restructuring costs, gains or losses on extinguishment of debt, and/or transaction costs[123](index=123&type=chunk) - Management uses **Adjusted EBITDA** to assess operating performance and allocate resources, noting it is not a substitute for GAAP measures and may not be comparable to other companies' metrics[123](index=123&type=chunk)[124](index=124&type=chunk) **Reconciliation of Adjusted EBITDA to Net Income (Millions $)** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | 3.5 | 23.3 | 22.9 | 44.4 | | Add: Depreciation and amortization expense | 28.6 | 28.7 | 57.4 | 62.0 | | Add: Interest expense, net | 5.4 | 5.8 | 10.6 | 12.1 | | Add: Income tax expense | 0.9 | 5.6 | 6.5 | 12.7 | | Add: Transaction costs | 5.2 | 0.1 | 6.0 | 0.2 | | Adjusted EBITDA | 43.6 | 63.5 | 103.4 | 131.4 | **Liquidity and Capital Resources**](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity needs and sources, confirming sufficient resources to meet working capital requirements and outlining the funding plan for the **Phoenix Global** acquisition - Primary liquidity needs include funding working capital and investments, servicing debt, maintaining cash reserves, and capital expenditures[126](index=126&type=chunk) - Sources of liquidity include cash generated from operations, borrowings under the **Revolving Facility**, and debt/equity offerings[126](index=126&type=chunk) - As of **June 30, 2025**, the company had **$186.2 million** in cash and cash equivalents and **$350.0 million** available under its **Revolving Facility**[126](index=126&type=chunk) - The **$325 million Phoenix Global** acquisition will be funded with existing cash and availability under the **Revolving Facility**[126](index=126&type=chunk) **Cash Flow Summary**](index=32&type=section&id=Cash%20Flow%20Summary) This section summarizes and analyzes the company's cash flows from operating, investing, and financing activities for the six months ended **June 30, 2025** and **2024**, detailing the drivers behind the changes in each category **Cash Flows from Operating Activities**](index=32&type=section&id=Cash%20Flows%20from%20Operating%20Activities) Net cash provided by operating activities significantly increased for the six months ended **June 30, 2025**, primarily due to a favorable year-over-year change in primary working capital **Net Cash Provided by Operating Activities (Millions $)** | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Millions $) | | :----------------------------------- | :----------------------------- | :----------------------------- | :------------------ | | Net cash provided by operating activities | 43.3 | 0.7 | 42.6 | - The increase was primarily driven by a favorable year-over-year change in primary working capital (receivables, inventories, and accounts payable), mainly due to the timing of customer payments in the prior year[129](index=129&type=chunk) **Cash Flows from Investing Activities**](index=32&type=section&id=Cash%20Flows%20from%20Investing%20Activities) Net cash used in investing activities decreased for the six months ended **June 30, 2025**, mainly due to lower capital spending on asset upgrades in the prior year and the timing of payments for ongoing capital expenditures **Net Cash Used in Investing Activities (Millions $)** | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Millions $) | | :----------------------------------- | :----------------------------- | :----------------------------- | :------------------ | | Net cash used in investing activities | (17.2) | (33.4) | 16.2 | - The decrease was primarily driven by lower capital spending in connection with asset upgrades in the prior year and the timing of payments related to ongoing capital expenditures[130](index=130&type=chunk) **Cash Flows from Financing Activities**](index=32&type=section&id=Cash%20Flows%20from%20Financing%20Activities) Net cash used in financing activities increased for the six months ended **June 30, 2025**, primarily due to higher dividends paid and increased cash distributions to noncontrolling interests **Net Cash Used in Financing Activities (Millions $)** | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Millions $) | | :----------------------------------- | :----------------------------- | :----------------------------- | :------------------ | | Net cash used in financing activities | (29.5) | (25.5) | (4.0) | - The increase was primarily driven by a **$3.7 million** increase in dividends paid (due to a higher dividend per share) and **$0.8 million** higher cash distributions to noncontrolling interests[131](index=131&type=chunk) **Dividends**](index=32&type=section&id=Dividends) This section reports the recent cash dividend declarations by **SunCoke**'s Board of Directors - On **April 30, 2025**, a cash dividend of **$0.12 per share** was declared and paid on **June 2, 2025**[132](index=132&type=chunk) - On **July 30, 2025**, a cash dividend of **$0.12 per share** was declared, to be paid on **September 2, 2025**[132](index=132&type=chunk) **Covenants**](index=32&type=section&id=Covenants) The company confirms its compliance with all applicable debt covenants as of **June 30, 2025**, and does not anticipate any violations or restrictions on operations or future financing - As of **June 30, 2025**, the company was in compliance with all applicable debt covenants[133](index=133&type=chunk) - Management does not anticipate any violation of these covenants or that they will restrict operations or ability to obtain additional financing[133](index=133&type=chunk) **Capital Requirements and Expenditures**](index=32&type=section&id=Capital%20Requirements%20and%20Expenditures) This section outlines the company's capital-intensive operations, detailing the types of capital expenditures (ongoing, expansion, environmental) and providing a summary of actual cash payments for these expenditures - Capital requirements consist primarily of **ongoing capital expenditures** (maintenance, reliability, environmental compliance), **expansion capital expenditures** (growth, new markets, contract renewals), and environmental project expenditures[135](index=135&type=chunk)[144](index=144&type=chunk) **Total Capital Expenditures (Millions $)** | Type | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (Millions $) | | :-------------------- | :----------------------------- | :----------------------------- | :------------------ | | Ongoing capital | 9.5 | 30.4 | (20.9) | | Expansion capital | 8.0 | 2.6 | 5.4 | | Total capital expenditures | 17.5 | 33.0 | (15.5) | - Total capital expenditures decreased by **$15.5 million** for the six months ended **June 30, 2025**, primarily due to a significant reduction in **ongoing capital**, partially offset by an increase in **expansion capital**[136](index=136&type=chunk) **Critical Accounting Policies**](index=33&type=section&id=Critical%20Accounting%20Policies) This section states that there have been no significant changes to the company's accounting policies during the three months ended **June 30, 2025** - No significant changes to accounting policies during the three months ended **June 30, 2025**[137](index=137&type=chunk) **Recent Accounting Standards**](index=33&type=section&id=Recent%20Accounting%20Standards) This section indicates that no new accounting standards material to the company have been adopted during the six months ended **June 30, 2025** - No new accounting standards material to the company have been adopted during the six months ended **June 30, 2025**[138](index=138&type=chunk) **Item 3. Quantitative and Qualitative Disclosures about Market Risk**](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there have been no material changes to the company's exposure to market risk since the disclosures in its Annual Report on Form 10-K for the year ended **December 31, 2024** - No material changes to the company's exposure to market risk since the Annual Report on Form 10-K for **December 31, 2024**[139](index=139&type=chunk) **Item 4. Controls and Procedures**](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details management's evaluation of the company's disclosure controls and procedures and reports on any changes in internal control over financial reporting **Management's Evaluation of Disclosure Controls and Procedures**](index=33&type=section&id=Management's%20Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of **June 30, 2025** - Disclosure controls and procedures are designed to ensure timely and accurate reporting of information required under the Exchange Act[140](index=140&type=chunk) - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of **June 30, 2025**[142](index=142&type=chunk) **Changes in Internal Control over Financial Reporting**](index=33&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section states that there have been no changes in the company's internal control over financial reporting that materially affected, or are reasonably likely to materially affect, its internal control during the quarter ended **June 30, 2025** - No changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, internal control during the quarter ended **June 30, 2025**[143](index=143&type=chunk) **PART II – OTHER INFORMATION**](index=34&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, defaults, mine safety disclosures, and other information **Item 1. Legal Proceedings**](index=34&type=section&id=Item%201.%20Legal%20Proceedings) This section incorporates by reference the legal matters discussed in Note 7 to the consolidated financial statements and reiterates management's belief that any liabilities from pending or threatened claims would not be material to the company's financial position, results of operations, or cash flows - Information on legal proceedings is incorporated from Note 7 to the consolidated financial statements[146](index=146&type=chunk) - Management believes that any liabilities arising from pending or threatened claims would not likely be material to the company's consolidated financial statements at **June 30, 2025**[147](index=147&type=chunk) **Item 1A. Risk Factors**](index=34&type=section&id=Item%201A.%20Risk%20Factors) This section states that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended **December 31, 2024** - No material changes with respect to risk factors previously disclosed in the Annual Report on Form 10-K for **December 31, 2024**[148](index=148&type=chunk) **Item 2. Unregistered Sales of Equity Securities and Use of Proceeds**](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides an update on the company's share repurchase program, indicating that no repurchases have occurred since the first quarter of **2020**, with a significant amount remaining available under the authorization - The Board of Directors authorized a share repurchase program for up to **$100.0 million** on **October 28, 2019**[149](index=149&type=chunk) - No share repurchases have been made since the **first quarter of 2020**[149](index=149&type=chunk) - As of **June 30, 2025**, **$96.3 million** remains available under the authorized repurchase program[149](index=149&type=chunk) **Item 3. Defaults Upon Senior Securities**](index=34&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states that there have been no defaults upon senior securities - None[150](index=150&type=chunk) **Item 4. Mine Safety Disclosures**](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section clarifies the company's ongoing responsibilities related to mine safety, despite the divestment of most coal mining assets, due to reclamation obligations and **MSHA** regulation of certain logistics assets - Despite divesting most coal mining assets in **April 2016**, the company remains responsible for reclamation of certain legacy coal mining locations subject to **MSHA** regulatory purview[151](index=151&type=chunk) - The company continues to own certain logistics assets that are regulated by **MSHA**[151](index=151&type=chunk) **Item 5. Other Information**](index=34&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report - None[152](index=152&type=chunk) **Item 6. Exhibits**](index=35&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including the Merger Agreement, corporate documents, certifications, mine safety disclosures, and iXBRL financial statements - Key exhibits include the Agreement and Plan of Merger (Exhibit 2.1), Amended and Restated Certificate of Incorporation and Bylaws (Exhibits 3.1, 3.2), CEO and CFO Certifications (Exhibits 31.1, 31.2, 32.1, 32.2), Mine Safety Disclosures (Exhibit 95.1), and iXBRL formatted financial statements (Exhibit 101)[154](index=154&type=chunk) **Signatures**](index=36&type=section&id=Signatures) This section contains the formal signatures of the authorized officers, certifying the filing of the Quarterly Report on Form 10-Q - The report was signed on **July 30, 2025**, by **Mark W. Marinko**, Senior Vice President and Chief Financial Officer, as a duly authorized officer and principal financial and accounting officer[159](index=159&type=chunk)

SunCoke Energy, Inc. Q2 2025 Earnings Conference Call Forward-Looking Statements This presentation should be reviewed in conjunction with the second quarter 2025 earnings release of SunCoke Energy, Inc. (SunCoke) and conference call held on July 30, 2025 at 11:00 a.m. ET. This presentation contains "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 often may be ident ...

Company Performance - SunCoke Energy reported quarterly earnings of $0.02 per share, missing the Zacks Consensus Estimate of $0.15 per share, and down from $0.25 per share a year ago, representing an earnings surprise of -86.67% [1] - The company posted revenues of $434.1 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 25.10%, but down from year-ago revenues of $470.9 million [2] - Over the last four quarters, SunCoke has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - SunCoke shares have lost about 22.6% since the beginning of the year, while the S&P 500 has gained 8.3% [3] - The current Zacks Rank for SunCoke is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.15 on $347 million in revenues, and $0.64 on $1.48 billion in revenues for the current fiscal year [7] - The outlook for the coal industry, where SunCoke operates, is currently in the bottom 17% of the Zacks industries, which may materially impact stock performance [8] Industry Context - Peabody Energy, another company in the coal industry, is expected to report a quarterly loss of $0.04 per share, reflecting a year-over-year change of -102.8%, with revenues expected to be $937.6 million, down 10% from the year-ago quarter [9][10]

[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) SunCoke Energy reported a decline in Q2 2025 net income and Adjusted EBITDA, while progressing with the Phoenix Global acquisition, extending its credit facility, and reaffirming full-year guidance [Second Quarter 2025 Performance Overview](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Overview) SunCoke Energy reported a significant decline in Q2 2025 net income and Adjusted EBITDA compared to the prior year, primarily due to unfavorable timing and mix of contract and spot coke sales in Domestic Coke and lower volumes in Logistics **Q2 2025 Consolidated Financial Highlights** | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------- | :------ | :------ | :------- | | Net income attributable to SXC | $1.9M | $21.5M | $(19.6)M | | Consolidated Adjusted EBITDA | $43.6M | $63.5M | $(19.9)M | - Quarterly financial results were adversely impacted by the timing and mix of contract and spot coke sales in the Domestic Coke segment and lower volumes in the Logistics segment[3](index=3&type=chunk) [Strategic Developments & Outlook](index=1&type=section&id=Strategic%20Developments%20%26%20Outlook) SunCoke is progressing with the acquisition of Phoenix Global for $325 million, expected to close on August 1, 2025, and be immediately accretive, while also extending its revolving credit facility and reaffirming full-year 2025 guidance - Announced the acquisition of Phoenix Global for **$325 million**; all regulatory approvals have been received, transaction expected to close on August 1, 2025, and be immediately accretive[3](index=3&type=chunk)[4](index=4&type=chunk) - Extension of revolving credit facility originally due June 2026 completed in July; now maturing in **July 2030**[4](index=4&type=chunk) - Reaffirming full-year 2025 Consolidated Adjusted EBITDA guidance range of **$210 million - $225 million**, with expectations for higher Adjusted EBITDA in the second half of the year[3](index=3&type=chunk)[4](index=4&type=chunk) [Consolidated Financial Results](index=2&type=section&id=Consolidated%20Financial%20Results) Consolidated financial results for Q2 2025 show a decrease in revenues, net income, and Adjusted EBITDA, primarily due to segment-specific challenges and transaction costs [Three Months Ended June 30, 2025](index=2&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025) For Q2 2025, consolidated revenues decreased by $36.8 million to $434.1 million, net income attributable to SXC dropped by $19.6 million to $1.9 million, and Adjusted EBITDA declined by $19.9 million to $43.6 million, primarily due to challenges in Domestic Coke and Logistics segments and transaction costs **Consolidated Financial Performance (Q2 2025 vs Q2 2024)** | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Increase (decrease) ($M) | | :-------------------------- | :----------- | :----------- | :----------------------- | | Revenues | 434.1 | 470.9 | (36.8) | | Net income attributable to SXC | 1.9 | 21.5 | (19.6) | | Adjusted EBITDA | 43.6 | 63.5 | (19.9) | - Revenues decreased primarily due to timing/mix of contract and spot coke sales, lower volumes and pricing at Granite City, and lower transloading volumes at CMT[6](index=6&type=chunk) - Net income attributable to SXC decreased due to factors mentioned above, plus transaction costs[7](index=7&type=chunk) [Segment Performance Analysis](index=2&type=section&id=Segment%20Performance%20Analysis) This section analyzes the performance of Domestic Coke, Logistics, Brazil Coke, and Corporate and Other segments, highlighting declines in Domestic Coke and Logistics, and consistent results in Brazil Coke [Domestic Coke Segment](index=2&type=section&id=Domestic%20Coke%20Segment) The Domestic Coke segment experienced a $31.2 million decrease in revenues to $410.4 million and a $17.4 million decrease in Adjusted EBITDA to $40.5 million in Q2 2025, primarily due to unfavorable sales mix and lower volumes at Granite City **Domestic Coke Segment Performance (Q2 2025 vs Q2 2024)** | Metric | Q2 2025 | Q2 2024 | Increase (decrease) | | :-------------------------- | :------ | :------ | :------------------ | | Revenues ($M) | 410.4 | 441.6 | (31.2) | | Adjusted EBITDA ($M) | 40.5 | 57.9 | (17.4) | | Sales volumes (thousands of tons) | 943 | 973 | (30) | | Adjusted EBITDA per ton | $42.95 | $59.51 | $(16.56) | - Revenues and Adjusted EBITDA decreased primarily due to the timing/mix of contract and spot coke sales volumes coupled with lower volumes and pricing due to contract extension economics at Granite City[11](index=11&type=chunk)[12](index=12&type=chunk) [Logistics Segment](index=3&type=section&id=Logistics%20Segment) The Logistics segment's revenues decreased by $5.1 million to $15.1 million, and Adjusted EBITDA decreased by $4.5 million to $7.7 million in Q2 2025, driven by lower transloading volumes at CMT **Logistics Segment Performance (Q2 2025 vs Q2 2024)** | Metric | Q2 2025 | Q2 2024 | Increase (decrease) | | :-------------------------- | :------ | :------ | :------------------ | | Revenues ($M) | 15.1 | 20.2 | (5.1) | | Adjusted EBITDA ($M) | 7.7 | 12.2 | (4.5) | | Tons handled (thousands of tons) | 4,746 | 5,982 | (1,236) | - Decreases in revenues and Adjusted EBITDA were primarily driven by lower transloading volumes at CMT due to challenging market conditions[15](index=15&type=chunk) [Brazil Coke Segment](index=3&type=section&id=Brazil%20Coke%20Segment) The Brazil Coke segment reported revenues of $8.6 million and Adjusted EBITDA of $2.6 million in Q2 2025, remaining reasonably consistent with the prior year period **Brazil Coke Segment Performance (Q2 2025 vs Q2 2024)** | Metric | Q2 2025 ($M) | Q2 2024 ($M) | | :---------------- | :----------- | :----------- | | Revenues | 8.6 | 9.1 | | Adjusted EBITDA | 2.6 | 2.5 | [Corporate and Other](index=3&type=section&id=Corporate%20and%20Other) Corporate and Other expenses decreased to $7.2 million in Q2 2025 from $9.1 million in Q2 2024, primarily due to lower legacy black lung expenses - Corporate and Other expense was **$7.2 million** in Q2 2025, compared to **$9.1 million** in Q2 2024, primarily due to lower legacy black lung expenses resulting from the DOL exemption[17](index=17&type=chunk) [Full-Year 2025 Outlook](index=4&type=section&id=Full-Year%202025%20Outlook) SunCoke reaffirmed its full-year 2025 Consolidated Adjusted EBITDA guidance, with revised projections reflecting the impact of new legislation and acquisition-related transaction costs **Full-Year 2025 Guidance** | Metric | Low ($M) | High ($M) | | :-------------------------------- | :------- | :-------- | | Consolidated Net Income | 40 | 59 | | Consolidated Adjusted EBITDA | 210 | 225 | | Capital expenditures | ~60 | ~60 | | Operating cash flow | 165 | 180 | | Cash taxes | 5 | 9 | | Domestic Coke total production (million tons) | ~4.0 | ~4.0 | - The 2025 revised guidance reflects the estimated impact of the "One Big Beautiful Bill Act" on cash taxes and the impact of transaction costs related to the acquisition of Phoenix Global on Consolidated Net Income[18](index=18&type=chunk) [Company Information](index=4&type=section&id=Company%20Information) This section provides an overview of SunCoke Energy's core business as a coke supplier and logistics provider, along with its investor relations and communication practices [About SunCoke Energy, Inc.](index=4&type=section&id=About%20SunCoke%20Energy%2C%20Inc.) SunCoke Energy, Inc. (NYSE: SXC) is a leading supplier of high-quality coke to domestic and international steelmaking and foundry customers, primarily under long-term, take-or-pay contracts, utilizing innovative heat-recovery technology and operating a logistics business - SunCoke Energy, Inc. supplies high-quality coke to domestic and international customers for blast furnace steel production and foundry casted iron, with most sales under long-term, take-or-pay contracts[20](index=20&type=chunk) - The company's process uses innovative heat-recovery technology for steam or electrical power generation[20](index=20&type=chunk) - Its logistics business provides export and domestic material handling services with a collective capacity to mix and transload over **40 million tons** of material annually[20](index=20&type=chunk) [Investor Relations & Communications](index=4&type=section&id=Investor%20Relations%20%26%20Communications) SunCoke communicates material information to investors through various public channels, and investors are encouraged to monitor these for important updates - SunCoke routinely announces material information via press releases, SEC filings, public conference calls, webcasts, sustainability reports, and its website[21](index=21&type=chunk) - Investors are encouraged to monitor and review information posted on the company's website, in addition to other communication channels[21](index=21&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents the Consolidated Statements of Income, Balance Sheets, and Cash Flows, detailing the company's financial performance and position for the reported periods [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) The Consolidated Statements of Income provide detailed revenue, cost, and profit figures for the three and six months ended June 30, 2025, and 2024, showing a significant decline in net income and earnings per share attributable to SXC in 2025 compared to 2024 **Consolidated Statements of Income (Q2 & YTD 2025 vs 2024)** | Metric | Three Months Ended June 30, 2025 ($M) | Three Months Ended June 30, 2024 ($M) | Six Months Ended June 30, 2025 ($M) | Six Months Ended June 30, 2024 ($M) | | :------------------------------------ | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Revenues | 434.1 | 470.9 | 870.1 | 959.3 | | Operating income | 9.8 | 34.7 | 40.0 | 69.2 | | Net income | 3.5 | 23.3 | 22.9 | 44.4 | | Net income attributable to SunCoke Energy, Inc. | 1.9 | 21.5 | 19.2 | 41.5 | | Diluted EPS | $0.02 | $0.25 | $0.22 | $0.49 | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) The Consolidated Balance Sheets present the company's financial position as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and equity, with slight decreases in total assets and liabilities **Consolidated Balance Sheets (June 30, 2025 vs Dec 31, 2024)** | Metric | June 30, 2025 ($M) | December 31, 2024 ($M) | | :-------------------------- | :----------------- | :--------------------- | | Total current assets | 484.0 | 474.6 | | Total assets | 1,641.4 | 1,668.2 | | Total current liabilities | 185.1 | 205.8 | | Total liabilities | 934.4 | 957.2 | | Total equity | 707.0 | 711.0 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) The Consolidated Statements of Cash Flows outline the cash generated from or used in operating, investing, and financing activities for the six months ended June 30, 2025, and 2024, showing a significant increase in net cash from operating activities **Consolidated Statements of Cash Flows (YTD 2025 vs 2024)** | Metric | Six Months Ended June 30, 2025 ($M) | Six Months Ended June 30, 2024 ($M) | | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Net cash provided by operating activities | 43.3 | 0.7 | | Net cash used in investing activities | (17.2) | (33.4) | | Net cash used in financing activities | (29.5) | (25.5) | | Net decrease in cash and cash equivalents | (3.4) | (58.2) | | Cash and cash equivalents at end of period | 186.2 | 81.9 | - Net cash provided by operating activities increased significantly to **$43.3 million** for the six months ended June 30, 2025, compared to **$0.7 million** in the prior year period[34](index=34&type=chunk) [Non-GAAP Measures and Reconciliations](index=4&type=section&id=Non-GAAP%20Measures%20and%20Reconciliations) This section defines non-GAAP financial measures, specifically Adjusted EBITDA, and provides detailed reconciliations from net income for both historical performance and future guidance [Definition of Non-GAAP Measures](index=4&type=section&id=Definition%20of%20Non-GAAP%20Measures) This section defines Adjusted EBITDA as earnings before interest, taxes, depreciation, and amortization, adjusted for impairments, restructuring costs, gains/losses on debt extinguishment, and transaction costs, clarifying its supplemental nature and limitations - Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, adjusted for impairments, restructuring costs, gains or losses on extinguishment of debt, and/or transaction costs[28](index=28&type=chunk) - Non-GAAP financial measures should not be considered as alternatives to U.S. GAAP measures and have important limitations as analytical tools[22](index=22&type=chunk) [Reconciliation of Net Income to Consolidated Adjusted EBITDA (Historical)](index=10&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Consolidated%20Adjusted%20EBITDA%20%28Historical%29) The reconciliation table details the adjustments made to convert GAAP Net Income to Consolidated Adjusted EBITDA for the three and six months ended June 30, 2025, and 2024, highlighting the impact of depreciation, interest, income tax, and transaction costs **Reconciliation of Net Income to Consolidated Adjusted EBITDA (Q2 & YTD 2025 vs 2024)** | Metric | Three Months Ended June 30, 2025 ($M) | Three Months Ended June 30, 2024 ($M) | Six Months Ended June 30, 2025 ($M) | Six Months Ended June 30, 2024 ($M) | | :-------------------------- | :------------------------------------ | :------------------------------------ | :---------------------------------- | :---------------------------------- | | Net income | 3.5 | 23.3 | 22.9 | 44.4 | | Add: Depreciation and amortization expense | 28.6 | 28.7 | 57.4 | 62.0 | | Add: Interest expense, net | 5.4 | 5.8 | 10.6 | 12.1 | | Add: Income tax expense | 0.9 | 5.6 | 6.5 | 12.7 | | Add: Transaction costs | 5.2 | 0.1 | 6.0 | 0.2 | | Adjusted EBITDA | 43.6 | 63.5 | 103.4 | 131.4 | [Reconciliation of Estimated 2025 Net Income to Estimated 2025 Consolidated Adjusted EBITDA (Guidance)](index=11&type=section&id=Reconciliation%20of%20Estimated%202025%20Net%20Income%20to%20Estimated%202025%20Consolidated%20Adjusted%20EBITDA%20%28Guidance%29) This reconciliation provides the estimated adjustments to convert the projected 2025 Net Income range ($40 million - $59 million) to the reaffirmed 2025 Consolidated Adjusted EBITDA guidance range ($210 million - $225 million), including estimated depreciation, interest, income tax, and transaction costs **Reconciliation of Estimated 2025 Net Income to Estimated 2025 Consolidated Adjusted EBITDA** | Metric | Low ($M) | High ($M) | | :-------------------------------- | :------- | :-------- | | Net income | 40 | 59 | | Add: Depreciation and amortization expense | 121 | 117 | | Add: Interest expense, net | 26 | 24 | | Add: Income tax expense | 11 | 15 | | Add: Transaction costs | 12 | 10 | | Adjusted EBITDA | 210 | 225 | [Legal & Disclaimers](index=5&type=section&id=Legal%20%26%20Disclaimers) This section provides a disclaimer regarding forward-looking statements, emphasizing their inherent uncertainties and the company's policy on updates [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section contains a comprehensive disclaimer regarding forward-looking statements, emphasizing that they represent current beliefs about future events, are inherently uncertain, and involve significant known and unknown risks - Forward-looking statements represent only current beliefs regarding future events, many of which are inherently uncertain and involve significant known and unknown risks and uncertainties[25](index=25&type=chunk) - Investors should not place undue reliance on these statements, which speak only as of the date of the press release[27](index=27&type=chunk) - SunCoke does not intend, and expressly disclaims any obligation, to update or alter its forward-looking statements after the date of the press release except as required by applicable law[27](index=27&type=chunk)

Industry Overview - The Zacks Coal industry is experiencing significant challenges due to a decline in coal usage in U.S. thermal power plants, with further weakening demand projected for 2025 as coal-fired units are retired and renewable energy sources gain traction [1][4] - Current U.S. estimated recoverable coal reserves stand at approximately 252 billion short tons, with 58% being underground mineable coal, but the industry's prospects are hindered by a shift towards renewable energy and the gradual shutdown of coal-powered generation units [2][4] - The coal industry is ranked 228 out of 245 Zacks industries, placing it in the bottom 7%, indicating a lackluster performance outlook [6][8] Production and Consumption Trends - U.S. coal production is expected to reach 520 million short tons (MMst) in 2025, a slight increase from 512 MMst in 2024, but is projected to decline by 9% to 475 MMst in 2026 due to increased competition from cleaner energy sources [5] - The share of coal in U.S. electricity generation is anticipated to decrease from 17% in 2025 to 15% in 2026, reflecting the ongoing transition to cleaner energy [4] Export and Market Performance - The coal industry is likely to face reduced export volumes in 2025 and 2026, influenced by a strong U.S. dollar and competition from natural gas and renewables [1][3] - Over the past year, coal stocks have underperformed, losing 8.7% compared to a 3.1% decline in the Zacks Oil-Energy sector and an 11.7% gain in the Zacks S&P 500 composite [10] Valuation Metrics - The coal industry is currently trading at a trailing 12-month EV/EBITDA ratio of 5.58X, significantly lower than the Zacks S&P 500 composite's 17.64X, indicating a challenging valuation environment [13] Key Companies - **Alliance Resource Partners (ARLP)**: Expected to produce between 32.75-34.75 million short tons in 2025, with a Zacks Rank 2 (Buy) and a current distribution yield of 10.49% [17][18] - **SunCoke Energy (SXC)**: Plans to produce 4 million tons of domestic coke in 2025, with a focus on metallurgical coal, and holds a Zacks Rank 3 (Hold) with a dividend yield of 5.64% [22][23]

Summary of SunCoke Energy (SXC) Acquisition of Phoenix Global Conference Call Company and Industry - **Company**: SunCoke Energy (SXC) - **Acquisition Target**: Phoenix Global - **Industry**: Steel production services Key Points and Arguments 1. **Acquisition Details**: SunCoke Energy announced a definitive agreement to acquire Phoenix Global for $325 million, representing an acquisition multiple of approximately 5.4 times based on a last twelve months adjusted EBITDA of $61 million as of March 31, 2025 [5][6] 2. **Funding and Synergies**: The acquisition will be funded through cash on hand and borrowing from a revolver with a capacity of $350 million. Expected annual synergies from the transaction are approximately $15 million [6][17] 3. **Strategic Fit**: Phoenix Global is a leading provider of mission-critical services to major steel producers, enhancing SunCoke's reach to new industrial customers, including electric arc furnace operators [7][8] 4. **Long-term Contracts**: Phoenix has long-term contracts with a weighted average life of approximately six years, providing predictable revenue and limiting earnings volatility [11][12] 5. **Operational Efficiency**: SunCoke plans to leverage its operational and technical expertise to enhance Phoenix's operations, aiming for improved efficiency and increased EBITDA from existing services [38][57] 6. **Market Expansion**: The acquisition will allow SunCoke to expand its footprint in North America, Brazil, and Europe, and to serve a larger group of steel mills, particularly in the electric arc furnace segment [16][20] 7. **Debt Profile Post-Acquisition**: Post-acquisition, SunCoke's gross leverage is expected to be approximately 2.62 times based on pro forma combined adjusted EBITDA of $279 million, which is below the long-term target of three times [17][18] 8. **Commitment to Shareholders**: The acquisition is positioned to enhance long-term sustainable earnings growth and increase shareholder value, while maintaining the quarterly dividend [21][48] Additional Important Content 1. **Limited Commodity Exposure**: Phoenix's contracts are structured to limit exposure to commodity price fluctuations, primarily using indexed pricing for diesel fuel [30][31] 2. **Future Growth Opportunities**: There are significant opportunities for growth in the electric arc furnace market, where Phoenix currently serves only 7% of the U.S. market [42][43] 3. **Granulated Pig Iron Project**: The acquisition does not impact SunCoke's plans for the granulated pig iron project, which remains a priority despite delays [46][48] 4. **Corporate Synergies**: Immediate corporate synergies are expected from the removal of redundancies, with further efficiencies anticipated as operations are integrated [36][57] This summary encapsulates the critical aspects of the conference call regarding SunCoke Energy's acquisition of Phoenix Global, highlighting the strategic rationale, financial implications, and future growth potential within the steel production services industry.