Financial Data and Key Metrics Changes - SunCoke Energy reported adjusted EBITDA of $70.6 million for Q1 2021, a 14% increase compared to Q1 2020, driven by improved operational performance across both Coke and Logistics segments [7][9][10] - Net income attributable to SunCoke was $0.20 per share, up $0.14 from the prior-year period, primarily due to the performance of the Logistics segment [9] - The company reduced debt by $33 million during the quarter and maintained a quarterly dividend of $0.06 per share [8][14] Business Line Data and Key Metrics Changes - The Domestic Coke segment achieved an adjusted EBITDA per ton of $61 on 1.038 million sales tons, with operations returning to full capacity [11] - The Logistics segment generated $10.9 million of adjusted EBITDA, significantly up from $3.3 million in the prior year, due to increased throughput volumes [12] - CMT handled 5.3 million tons of throughput volumes, an increase from 4.2 million tons in the prior-year period, driven by higher coal exports and iron ore [12] Market Data and Key Metrics Changes - Strong global demand and favorable API2 pricing contributed to increased coal export volumes, with expectations for continued strength in the second quarter [12][18] - The company expects to handle approximately 5 million tons of coal at CMT, exceeding the original guidance of 4 million to 5 million tons [12] Company Strategy and Development Direction - The company is focused on optimizing production and expanding market participation in foundry and export coal markets [7] - A new take-or-pay agreement for iron ore pellets at CMT is seen as a significant step towards revitalizing the Logistics segment [17] - The company aims to achieve a long-term gross leverage target of 3x or lower by the end of the year [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving results at the top end of the 2021 guidance of $215 million to $230 million, supported by strong performance in the steel and coal export markets [18] - The company emphasized the importance of maintaining exceptional safety performance while executing operational and capital plans [16] Other Important Information - The company ended Q1 with a cash balance of approximately $54 million and a total liquidity position of approximately $386 million [13][14] - Cash flow from operating activities was close to $65 million, reflecting strong operational performance [13] Q&A Session Summary Question: What was the foundry coke volumes in the first quarter? - Management refrained from discussing specific volumes or price components of foundry coke, noting that the foundry initiative has exceeded expectations [21] Question: Is the iron ore take-or-pay contract with a U.S. or foreign customer? - The contract is with a U.S. customer [26] Question: Can you provide more context around cash flow guidance for the year? - Management indicated that the plan is to use generated cash flow to reduce the revolver balance over the next three quarters [28] Question: What is driving the better-than-expected performance? - The outperformance is attributed to meeting expectations across domestic, export, and foundry markets, with significant contributions from cost management [32] Question: What is the plan for 2022 regarding Domestic Coke minimums? - Management is in discussions with domestic customers and exploring growth in export and foundry coke business, with updates expected as 2022 approaches [34] Question: Can you elaborate on the environmental advantages of your coking coal? - The company highlighted its environmentally friendly production process and the ability of its products to reduce greenhouse gas emissions in steel production [45]

SunCoke Energy, Inc. Q1 2021 Earnings Conference Call Forward‐Looking Statements This slide presentation should be reviewed in conjunction with the First Quarter 2021 earnings release of SunCoke Energy, Inc. (SunCoke) and conference call held on April 28, 2021 at 10:30 a.m. ET. This presentation call 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). Such forward‐looking statements in ...

Table of Contents ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-35243 SUNCOKE ENERGY, INC. (Exact name of registrant as specified in its charter) ______________________________________________________________________ Delaware 90-0640593 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 205 ...

PART I [Business Overview](index=3&type=section&id=Item%201.%20Business) SunCoke Energy, Inc. is the largest independent coke producer in the Americas with over 60 years of experience, also operating a logistics business [Company Overview](index=3&type=section&id=Overview) SunCoke Energy, Inc. is the largest independent producer of high-quality coke in the Americas, with over 60 years of cokemaking experience - SunCoke Energy, Inc. is the largest independent producer of **high-quality coke** in the Americas, with over **60 years of cokemaking experience**[9](index=9&type=chunk) - The company also owns and operates a logistics business, providing handling and/or blending services for steel, coke, power, coal production, and other manufacturing customers[9](index=9&type=chunk) - The company was incorporated in Delaware in 2010, went public in 2011, and its stock trades on the New York Stock Exchange under the ticker **“SXC”**[10](index=10&type=chunk) [Cokemaking Operations](index=3&type=section&id=Cokemaking%20Operations) SunCoke operates six cokemaking facilities in the US and Brazil, utilizing efficient heat recovery technology, with sales primarily through long-term take-or-pay contracts - SunCoke owns and operates **five cokemaking facilities in the U.S.** with a total annual capacity of approximately **4.2 million tons**, and operates one in Brazil for ArcelorMittal Brasil S.A. with an annual capacity of approximately **1.7 million tons**[10](index=10&type=chunk) - The company's coke ovens utilize **efficient waste heat recovery technology**, burning coal volatile matter to generate heat for power or steam sales, differing from byproduct cokemaking[10](index=10&type=chunk)[11](index=11&type=chunk)[12](index=12&type=chunk) - The company began exploring the foundry coke market in 2020, with commercial production and sales expected to commence in 2021 on a small scale[10](index=10&type=chunk) - Coke sales are primarily conducted through **long-term take-or-pay contracts**, with contracted volumes largely covering domestic capacity, thus minimizing the impact of spot coke prices on revenue[13](index=13&type=chunk) - In 2020, Cleveland-Cliffs Inc. acquired AK Steel and AM USA, consolidating the customer base into **“Cliffs Steel”**[14](index=14&type=chunk) Cokemaking Facility Overview | Facility | Location | Customer | Year of Start Up | Contract Expiration | Annual Cokemaking Nameplate Capacity (thousands of tons) | Use of Waste Heat | | :------- | :------- | :------- | :--------------- | :------------------ | :----------------------------------------------------- | :---------------- | | Jewell | Vansant, Virginia | Cliffs Steel | 1962 | Dec 2025 | 720 | Partially used for thermal coal drying | | Indiana Harbor | East Chicago, Indiana | Cliffs Steel | 1998 | Oct 2023 | 1,220 | Heat for power generation | | Haverhill I | Franklin Furnace, Ohio | Cliffs Steel | 2005 | Dec 2025 | 550 | Process steam | | Haverhill II | Franklin Furnace, Ohio | Cliffs Steel | 2008 | June 2025 | 550 | Power generation | | Granite City | Granite City, Illinois | U.S. Steel | 2009 | Dec 2024 | 650 | Steam for power generation | | Middletown | Middletown, Ohio | Cliffs Steel | 2011 | Dec 2032 | 550 | Power generation | | Vitória | Vitória, Brazil | ArcelorMittal Brazil | 2007 | Jan 2023 | 1,700 | Steam for power generation | - Coke sales agreements include pass-through provisions for coal and procurement costs, along with fixed fees or budgeted allocations for operating costs, mitigating risks from coal price volatility and inflationary costs[17](index=17&type=chunk)[18](index=18&type=chunk) - In the first half of 2020, U.S. steel production utilization declined by approximately **25%** due to COVID-19, but recovered significantly in the second half, reaching **75% in January 2021**, with continued recovery expected throughout 2021[19](index=19&type=chunk) [Logistics Operations](index=5&type=section&id=Logistics%20Operations) The logistics business provides coal and aggregate handling and blending services, facing market challenges in 2020 but securing new long-term contracts - Logistics operations include Convent Marine Terminal (CMT), Kanawha River Terminal (KRT), Lake Terminal, and Dismal River Terminal (DRT)[21](index=21&type=chunk) - Total capacity allows for blending and/or transloading over **40 million tons of coal and other aggregates annually**, with approximately **3 million tons of storage capacity**[22](index=22&type=chunk) - Revenue is derived from per-ton handling and/or blending services, without ownership of the materials processed[22](index=22&type=chunk) - In the first half of 2020, declining API2 and API6 coal prices negatively impacted CMT export volumes; the market recovered in Q4, with **CMT coal export volumes projected at 4 to 5 million tons for 2021**[23](index=23&type=chunk) - KRT serves both metallurgical and thermal coal markets, was impacted by market challenges in 2020, and is projected to handle approximately **10 million tons in 2021**[24](index=24&type=chunk) - Long-term contracts with Murray and Foresight were rejected due to bankruptcy; CMT signed a new long-term take-or-pay agreement with Javelin Global Commodities in December 2020 for **4 million tons in 2021 and 3 million tons in 2022**[25](index=25&type=chunk) [Seasonality](index=6&type=section&id=Seasonality) Cokemaking revenue is not seasonal, but profitability relates to coal-to-coke yield, while logistics demand is influenced by the domestic power market and river levels - Cokemaking operations revenue is not seasonal, but profitability is linked to coal-to-coke yield, which is typically more favorable in the third quarter[26](index=26&type=chunk) - Logistics business demand is influenced by changes in the domestic power market (thermal coal) and Mississippi River water levels (CMT operating costs)[26](index=26&type=chunk) [Raw Materials](index=6&type=section&id=Raw%20Materials) Metallurgical coal, the primary raw material for coke production, is sourced from third parties with costs typically passed on to customers - Metallurgical coal is the primary raw material for coke production, sourced entirely from third parties, with ample supply available[27](index=27&type=chunk) - Approximately **1.4 tons of metallurgical coal are required to produce one ton of coke**; **5.4 million tons were purchased in 2020**[28](index=28&type=chunk) - Metallurgical coal purchases are typically under one-year contracts, with costs passed through to customers, and procurement decisions often involve customer participation[28](index=28&type=chunk) [Transportation and Freight](index=7&type=section&id=Transportation%20and%20Freight) Inbound metallurgical coal costs are usually passed to customers, while coke sales delivery methods vary by agreement and facility - Inbound metallurgical coal transportation costs are generally passed through to customers[29](index=29&type=chunk) - Coke sales delivery methods vary by agreement and facility, with Jewell and Haverhill using rail, and Middletown, Indiana Harbor, and Granite City primarily delivering directly to customer blast furnaces via conveyor belts[30](index=30&type=chunk) - Most transportation and freight costs for the logistics segment are paid directly by customers to transportation providers[30](index=30&type=chunk) [Research and Development and Intellectual Property and Proprietary Rights](index=7&type=section&id=Research%20and%20Development%20and%20Intellectual%20Property%20and%20Proprietary%20Rights) R&D focuses on improving cokemaking technology, developing new products like foundry coke, and enhancing waste heat recovery, supported by patents - R&D projects aim to improve existing cokemaking technology, develop new products (e.g., foundry coke), and enhance waste heat recovery processes, with several patents already obtained[31](index=31&type=chunk) - At the Vitória cokemaking facility in Brazil, the company receives a per-ton licensing fee and an annual licensing fee through a license and operating agreement[32](index=32&type=chunk) [Competition](index=7&type=section&id=Competition) The cokemaking business faces intense competition from integrated steel producers' byproduct coke ovens, while logistics terminals compete with other facilities and transportation modes - The cokemaking business faces intense competition, primarily from blast furnace steel producers' captive byproduct coke ovens[33](index=33&type=chunk) - The company's heat recovery cokemaking process offers advantages, including producing higher quality coke, utilizing waste heat for power or steam generation, and reducing environmental impact[11](index=11&type=chunk)[36](index=36&type=chunk) - Domestic cokemaking operations account for approximately **30% of the U.S. blast furnace coke market capacity**, with most capacity secured by long-term contracts[36](index=36&type=chunk) - CMT is one of the largest export terminals on the U.S. Gulf Coast, accounting for approximately **55% of thermal coal exports from the region in 2020**[37](index=37&type=chunk) - KRT features fully automated, computer-controlled blending capabilities and access to CSX and Norfolk Southern railroads, as well as the Ohio River system[39](index=39&type=chunk) [Human Capital Management](index=8&type=section&id=Human%20Capital%20Management) The company prioritizes human capital management, emphasizing core values, diversity, employee development, and safety performance - The company culture is built on core values of excellence, innovation, commitment, integrity, and stewardship[42](index=42&type=chunk)[45](index=45&type=chunk) - As of December 31, 2020, the company had approximately **841 employees in the U.S. (about 41% unionized)** and **292 employees in Brazil (all unionized)**[43](index=43&type=chunk)[44](index=44&type=chunk) - The company is committed to Diversity, Equity, and Inclusion (DEI), with women comprising approximately **11% of the global workforce** and minorities approximately **17% of the U.S. workforce**[45](index=45&type=chunk) - Employee turnover was **less than 1% in 2020**, and the leadership team averages **20 years of leadership experience** and **over 10 years with SunCoke**[51](index=51&type=chunk) - Comprehensive health, welfare, and retirement plans are provided, along with professional training and employee development opportunities[52](index=52&type=chunk)[57](index=57&type=chunk) - Performance management and incentive programs incorporate financial, environmental, and safety metrics, with a high proportion of performance-based compensation[58](index=58&type=chunk) - Safety is a top priority, with a **Total Recordable Incident Rate (TRIR) of 0.81 in 2020**, which is below industry averages (**1.3 for petroleum and coal products manufacturing, 2.4 for steel mills**)[61](index=61&type=chunk)[62](index=62&type=chunk) Employee and Contractor Total Recordable Incident Rate (TRIR) | Year | Employee TRIR | Contractor TRIR | | :--- | :------------ | :-------------- | | 2018 | 0.59 | 1.03 | | 2019 | 0.9 | 0.8 | | 2020 | 1.08 | 0.38 | [Ethics & Compliance](index=11&type=section&id=Ethics%20%26%20Compliance) The company maintains a Code of Business Conduct and Ethics for all personnel, requiring annual training and providing channels for anonymous reporting - The company has a Code of Business Conduct and Ethics applicable to all employees, officers, and directors, requiring annual training completion[64](index=64&type=chunk) - Employees can anonymously report violations through various channels, and the company is committed to non-retaliation[65](index=65&type=chunk) [Legal and Regulatory Requirements](index=11&type=section&id=Legal%20and%20Regulatory%20Requirements) Operations are subject to extensive government regulations, including environmental laws and mining safety, with potential for increased compliance costs - The company's operations are subject to extensive government regulations, including environmental laws such as the Clean Air Act, Clean Water Act, Resource Conservation and Recovery Act, CERCLA, and mining safety disclosures[66](index=66&type=chunk)[73](index=73&type=chunk)[75](index=75&type=chunk)[77](index=77&type=chunk) - Cokemaking facilities utilize Maximum Achievable Control Technology (MACT) standards to limit hazardous air pollutant emissions, with some standards based on data from SunCoke's Jewell facility[69](index=69&type=chunk) - Stricter National Ambient Air Quality Standards (NAAQS) could require the company to install additional pollution control equipment, increasing operating costs[69](index=69&type=chunk) - As of December 31, 2020, asset retirement obligations related to estimated mine reclamation costs were **$2 million**, which are unfunded[72](index=72&type=chunk) - Greenhouse Gas (GHG) emission reporting rules apply, and future related legislation and regulations could lead to increased operating and capital costs[77](index=77&type=chunk) - The company has an obligation of **$64.6 million** for black lung benefits related to its legacy coal operations as of December 31, 2020[83](index=83&type=chunk) - Failure to comply with regulations could result in administrative, civil, and criminal penalties, as well as cleanup and site restoration costs[79](index=79&type=chunk) [Information about our Executive Officers](index=17&type=section&id=Information%20about%20our%20Executive%20Officers) This section provides biographical information and roles for the company's executive officers as of February 25, 2021 Executive Officer List (as of February 25, 2021) | Name | Age | Title | | :--- | :-- | :--------------------------------------------------- | | Michael G. Rippey | 63 | President and Chief Executive Officer | | Fay West | 51 | Senior Vice President and Chief Financial Officer | | Katherine T. Gates | 44 | Senior Vice President, Chief Legal Officer and Chief Human Resources Officer | | P. Michael Hardesty | 58 | Senior Vice President, Commercial Operations, Business Development, Terminals and International Coke | | Allison S. Lausas | 41 | Vice President, Controller and Treasurer | | John F. Quanci | 59 | Vice President, Chief Technology Officer | - Michael G. Rippey was appointed President and Chief Executive Officer on December 1, 2017, having previously held senior positions at Nippon Steel & Sumitomo Metal Corporation and ArcelorMittal USA[84](index=84&type=chunk) - Fay West was appointed Senior Vice President and Chief Financial Officer in October 2014, previously serving as Vice President and Controller at SunCoke Energy, Inc[85](index=85&type=chunk) - Katherine T. Gates was appointed Senior Vice President, Chief Legal Officer, and Chief Human Resources Officer on November 14, 2019, also responsible for environmental and sustainability functions[86](index=86&type=chunk) [Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) The company faces multiple risks including high customer concentration, operational disruptions, intense competition, stringent environmental regulations, and debt-related financial risks - The company's cokemaking and logistics businesses are highly dependent on a few customers, and any loss or default could materially adversely affect financial condition[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) - Cokemaking and logistics operations face operational risks, including equipment failures, natural disasters, fires, and explosions, which could lead to production interruptions and increased costs[97](index=97&type=chunk)[98](index=98&type=chunk) - The cokemaking business faces competition from alternative steelmaking technologies (e.g., electric arc furnaces) and alternative coke production technologies, which could reduce coke demand[100](index=100&type=chunk) - The logistics business faces competition from natural gas replacing thermal coal, new coal handling facilities, and truck transportation[101](index=101&type=chunk) - The company's operations are subject to extensive laws and regulations by federal, state, and local authorities, with high compliance costs and increasingly stringent regulations potentially leading to fines, operational restrictions, and increased costs[102](index=102&type=chunk)[103](index=103&type=chunk) - Failure to timely obtain, maintain, or renew permits or leases required for operations could result in significant reductions in production, cash flow, or profitability[105](index=105&type=chunk)[106](index=106&type=chunk) - The company faces risks of uninsured or underinsured losses and liabilities, particularly environmental and pollution risks, as well as cybersecurity risks[107](index=107&type=chunk) - Implementing growth strategies, future acquisitions, and/or divestitures carries risks, potentially failing to achieve anticipated benefits or facing integration challenges[108](index=108&type=chunk)[110](index=110&type=chunk) - Impairment of the carrying value of long-lived assets could adversely affect the business, financial condition, and results of operations[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - New or more stringent greenhouse gas emission standards and the physical impacts of climate change could increase operating costs and adversely affect the business and customers[116](index=116&type=chunk)[117](index=117&type=chunk) - The COVID-19 pandemic and other similar outbreaks could disrupt the company's operations and those of its customers and suppliers, continuing to adversely affect cash flow, financial condition, and results of operations[120](index=120&type=chunk) - Modifications or terminations of coke supply agreements, global steel industry overcapacity, and failure to meet minimum production or quality requirements could adversely affect the cokemaking business's cash flow and profitability[121](index=121&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) - The growth and success of the logistics business depend on sufficient throughput, and a long-term decline in coal demand could adversely affect its operating results and cash flow[137](index=137&type=chunk)[140](index=140&type=chunk) - The company faces significant debt maturities (**$690.5 million within the next five years**), and its high debt level may limit financial flexibility and increase vulnerability to adverse economic and industry conditions[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) - Employee health and safety regulations related to legacy coal mining operations and benefits for retired coal miners (e.g., black lung benefits) continue to impose significant costs on the company[147](index=147&type=chunk) - Other general risks include continued financial market uncertainty, labor disputes, failure to attract and retain key personnel, litigation, and cybersecurity breaches and information system failures[148](index=148&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[157](index=157&type=chunk) [Unresolved Staff Comments](index=30&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments in this report - None[159](index=159&type=chunk) [Properties](index=30&type=section&id=Item%202.%20Properties) SunCoke owns land for several cokemaking facilities and logistics terminals, leases other facilities and office space, and retains legacy coal mining assets - The company owns the land for its Jewell, Haverhill, Granite City, and Middletown cokemaking facilities, as well as the KRT and CMT logistics terminals[160](index=160&type=chunk) - The company leases the Indiana Harbor cokemaking facility, DRT, KRT terminals, and its corporate headquarters office space in Lisle, Illinois[161](index=161&type=chunk)[165](index=165&type=chunk) - The company retains approximately **5,000 acres of land**, mineral rights, and coal mining rights, which are legacy assets from its former coal mining operations[161](index=161&type=chunk) [Legal Proceedings](index=31&type=section&id=Item%203.%20Legal%20Proceedings) SunCoke is involved in various legal and administrative proceedings, but management believes the outcomes will not materially impact the company's financial position - The company is involved in various ongoing or potential legal and administrative proceedings, including commercial disputes, employment claims, personal injury claims, toxic exposure allegations, and general environmental claims[163](index=163&type=chunk) - Management believes that as of December 31, 2020, any resulting liabilities will not have a material adverse effect on the company's financial condition, results of operations, or cash flows[163](index=163&type=chunk) [Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Despite divesting most coal mining assets, the company remains responsible for reclamation at legacy sites and operates MSHA-regulated logistics assets - The company divested most of its coal mining assets in April 2016 but remains responsible for reclamation at certain legacy coal mining sites[164](index=164&type=chunk) - The company owns logistics assets that are subject to regulation by the Mine Safety and Health Administration (MSHA)[164](index=164&type=chunk) - Information regarding mine safety violations and other regulatory matters is included in Exhibit 95.1 to Form 10-K[164](index=164&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities](index=32&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholders%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) SunCoke's common stock trades on the NYSE under "SXC", with dividends declared quarterly and a stock repurchase program in place - The company's common stock (SXC) trades on the New York Stock Exchange[167](index=167&type=chunk) - As of February 19, 2021, the company had **82,806,106 shares of common stock outstanding** and **9,228 stockholders of record**[5](index=5&type=chunk)[170](index=170&type=chunk) Dividends Declared (2020-2021) | Date Declared | Record Date | Dividend Per Share | Payment Date | | :------------ | :---------- | :----------------- | :----------- | | Jan 29, 2020 | Feb 18, 2020 | $0.0600 | March 2, 2020 | | May 7, 2020 | May 21, 2020 | $0.0600 | June 4, 2020 | | Aug 3, 2020 | Aug 18, 2020 | $0.0600 | September 1, 2020 | | Nov 6, 2020 | Nov 20, 2020 | $0.0600 | December 1, 2020 | | Feb 4, 2021 | Feb 19, 2021 | $0.0600 | March 1, 2021 | - The company completed its **$150 million stock repurchase program** in the first quarter of 2020[172](index=172&type=chunk) - Under a new **$100 million repurchase program**, **$3.7 million (1.1 million shares)** were repurchased in Q1 2020, with **$96.3 million remaining available**; repurchases were suspended in Q4 2020[173](index=173&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses SunCoke Energy's 2020 financial performance, operational achievements, strategic outlook for 2021, and key accounting policies - This discussion and analysis is based on GAAP financial data and certain non-GAAP financial data, with reconciliations provided for non-GAAP measures to their most comparable GAAP components[176](index=176&type=chunk) - In 2020, the company reported **net income of $8.8 million**, **cash flow from operations of $157.8 million**, and **Adjusted EBITDA of $205.9 million**[178](index=178&type=chunk) - The company successfully operated during the COVID-19 pandemic and exceeded its revised financial targets[178](index=178&type=chunk)[183](index=183&type=chunk) [2020 Overview](index=34&type=section&id=2020%20Overview) The company maintained operations during COVID-19, exceeded revised financial targets, supported customers through contract revisions, and reduced total debt - The company maintained continuous operations during the COVID-19 pandemic, designated as a critical manufacturing sector and essential business[178](index=178&type=chunk) - Adjusted EBITDA for 2020 was **$205.9 million**, and cash flow from operations was **$157.8 million**, both exceeding revised guidance targets[178](index=178&type=chunk)[183](index=183&type=chunk) - The company supported its customer base and successfully negotiated contract revisions by providing coke supply relief in exchange for contract extensions[183](index=183&type=chunk) - Capital was returned to shareholders through the repurchase of **1.6 million shares ($7 million)** and quarterly dividends of **$0.06 per share**; total debt was reduced by approximately **$110 million in 2020**[183](index=183&type=chunk) - Assets were properly maintained, preserving their long-term integrity despite fluctuating operating levels[183](index=183&type=chunk) [Our Focus and Outlook for 2021](index=35&type=section&id=Our%20Focus%20and%20Outlook%20for%202021) The 2021 focus is on operational excellence, asset optimization, capital structure strengthening, and executing an $80 million capital expenditure plan - The primary focus for 2021 is achieving operational excellence, optimizing asset utilization, and successfully executing an approximately **$80 million capital expenditure plan**[182](index=182&type=chunk)[183](index=183&type=chunk)[225](index=225&type=chunk) - The company aims to secure additional commitments and customers through foundry coke and export sales to support full utilization of the domestic coke fleet[183](index=183&type=chunk) - Repositioning CMT from a primary coal export terminal to a diversified terminal is key for the continued success of the logistics business[183](index=183&type=chunk) - 2021 financial targets include Adjusted EBITDA projected between **$215 million and $230 million**, and cash flow from operations between **$160 million and $180 million**[183](index=183&type=chunk)[244](index=244&type=chunk) [Items Impacting Comparability](index=36&type=section&id=Items%20Impactin%20Comparability) Comparability is affected by 2020 contract revisions, the 2019 simplification transaction, and significant non-cash impairment charges in the logistics segment in 2019 - In 2020, the company negotiated contract revisions with steel customers, providing short-term coke supply relief in exchange for contract extensions, resulting in an approximate **$20 million reduction in 2020 Adjusted EBITDA**[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk) - In the 2019 simplification transaction, the company acquired all outstanding units of SunCoke Energy Partners, L.P., making it a wholly-owned subsidiary, treated as a non-cash equity transaction[186](index=186&type=chunk) - The bankruptcy of logistics customers (Murray and Foresight) led to a **$247.4 million non-cash, pre-tax impairment charge** in the logistics segment in 2019, including goodwill and long-lived asset impairments[187](index=187&type=chunk) [Consolidated Results of Operations (2020 vs. 2019)](index=37&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated sales and operating revenue decreased due to lower coal prices and reduced volumes, while net income improved significantly due to the absence of 2019 impairment charges Consolidated Results of Operations (2020 vs. 2019) | Metric | 2020 (Millions USD) | 2019 (Millions USD) | Increase (Decrease) (Millions USD) | | :-------------------------------------- | :------------------ | :------------------ | :--------------------------------- | | Sales and other operating revenue | $1,333.0 | $1,600.3 | $(267.3) | | Total costs and operating expenses | $1,263.3 | $1,744.6 | $(481.3) | | Operating income (loss) | $69.7 | $(144.3) | $214.0 | | Net income (loss) | $8.8 | $(148.4) | $157.2 | | Net income (loss) attributable to SunCoke Energy, Inc. | $3.7 | $(152.3) | $156.0 | - Sales and other operating revenue decreased by **$267.3 million**, primarily due to lower coal prices (pass-through costs), reduced volumes in the domestic coke business due to COVID-19, and lower logistics volumes[190](index=190&type=chunk) - Total costs and operating expenses decreased by **$481.3 million**, primarily due to the absence of the **$247.4 million long-lived asset and goodwill impairment charge** recorded in 2019[190](index=190&type=chunk) - Selling, general, and administrative expenses increased by **$5.6 million**, mainly driven by **$3.9 million in R&D costs for foundry coke production** and **$2 million for the revaluation of certain legacy liabilities**, partially offset by reduced employee-related expenses[191](index=191&type=chunk) - Depreciation and amortization expense decreased by **$10.1 million**, primarily due to the 2019 logistics asset impairment reducing asset carrying values and the absence of accelerated depreciation in 2019, partially offset by depreciation from new assets placed in service in 2020 (Indiana Harbor coke battery rebuild)[192](index=192&type=chunk) - Net interest expense decreased by **$4 million**, primarily due to lower weighted average debt balances and interest rates in 2020[193](index=193&type=chunk)[194](index=194&type=chunk) [Results of Reportable Business Segments (2020 vs. 2019)](index=38&type=section&id=Results%20of%20Reportable%20Business%20Segments) Domestic Coke, Brazil Coke, and Logistics segments experienced revenue and Adjusted EBITDA declines primarily due to COVID-19 impacts, lower volumes, and unfavorable exchange rates Segment Financial and Operating Data (2020 vs. 2019) | Metric | 2020 (Millions USD) | 2019 (Millions USD) | Increase (Decrease) (Millions USD) | | :-------------------------------------- | :------------------ | :------------------ | :--------------------------------- | | **Sales and other operating revenue:** | | | | | Domestic Coke | $1,265.4 | $1,489.1 | $(223.7) | | Brazil Coke | $31.6 | $38.4 | $(6.8) | | Logistics | $36.0 | $72.8 | $(36.8) | | **Adjusted EBITDA:** | | | | | Domestic Coke | $217.0 | $226.7 | $(9.7) | | Brazil Coke | $13.5 | $16.0 | $(2.5) | | Logistics | $17.3 | $42.6 | $(25.3) | | Corporate and Other, including legacy costs, net | $(41.9) | $(37.4) | $(4.5) | | **Operating Data:** | | | | | Domestic Coke capacity utilization (%) | 91 | 98 | (7) | | Domestic Coke production volumes (thousands of tons) | 3,840 | 4,168 | (328) | | Domestic Coke sales volumes (thousands of tons) | 3,789 | 4,171 | (382) | | Domestic Coke Adjusted EBITDA per ton | $57.27 | $54.35 | $2.92 | | Brazilian Coke production (thousands of tons) | 1,396 | 1,641 | (245) | | Logistics Tons handled (thousands of tons) | 14,678 | 21,053 | (6,375) | - Domestic Coke sales and other operating revenue and Adjusted EBITDA decreased, primarily due to **volume relief provided during the COVID-19 pandemic** and **lower coal prices**, partially offset by improved performance following the Indiana Harbor coke battery rebuild[204](index=204&type=chunk)[205](index=205&type=chunk) - Logistics sales and other operating revenue and Adjusted EBITDA significantly decreased, primarily due to **reduced transloading volumes**, **depressed thermal coal export prices**, and the impact of the COVID-19 pandemic[206](index=206&type=chunk) - Brazil Coke sales and other operating revenue and Adjusted EBITDA decreased, primarily due to **lower volumes** and **unfavorable foreign currency exchange rate movements**[209](index=209&type=chunk) - Corporate and Other expenses increased by **$4.5 million**, driven primarily by **$3.9 million in foundry-related R&D costs** and **$2 million in increased legacy costs**[210](index=210&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is primarily from operating cash flow and its revolving credit facility, with $48.4 million in cash and $299.9 million available on the credit line as of December 31, 2020 - The company's primary sources of liquidity are cash generated from operating activities and its revolving credit facility[211](index=211&type=chunk) - As of December 31, 2020, the company had **$48.4 million in cash and cash equivalents** and **$299.9 million available under its revolving credit facility**[211](index=211&type=chunk) - Net cash flow from operating activities was **$157.8 million in 2020**, a **$24.1 million decrease from 2019**, primarily due to lower operating performance and changes in working capital[214](index=214&type=chunk) - Net cash flow from investing activities was **$75.3 million in 2020**, a **$34.5 million decrease from 2019**, primarily due to lower capital expenditures[215](index=215&type=chunk) - Net cash flow from financing activities was **$131.2 million in 2020**, a **$10.5 million increase from 2019**, reflecting debt repurchases, dividend payments, and net repayments on the revolving credit facility[216](index=216&type=chunk)[217](index=217&type=chunk) - The company repurchased **$62.7 million in face value of 2025 Senior Notes** for **$55.9 million in cash** in 2020[216](index=216&type=chunk) - Dividends of **$19.9 million** were paid to shareholders in 2020[216](index=216&type=chunk) - The company repurchased **$7 million (1.6 million shares)** of common stock in 2020[219](index=219&type=chunk) - As of December 31, 2020, the company was in compliance with all applicable debt covenants[220](index=220&type=chunk) - Company credit ratings are **S&P BB- (stable)** and **Moody's B1 (negative outlook)**[221](index=221&type=chunk) Debt Maturities (as of December 31, 2020) | Year | Amount (Millions USD) | | :--- | :-------------------- | | 2021 | $3.0 | | 2022 | $3.2 | | 2023 | $3.3 | | 2024 | $93.7 | | 2025 | $587.3 | | 2026-Thereafter | $0.0 | | Total | $690.5 | Capital Expenditures (2019-2020) | Type | 2020 (Millions USD) | 2019 (Millions USD) | | :-------------------------- | :------------------ | :------------------ | | Ongoing capital | $59.5 | $94.2 | | Environmental remediation project | $0.0 | $15.9 | | Expansion capital | $14.4 | $0.0 | | Total capital expenditures | $73.9 | $110.1 | - Expected capital expenditures for 2021 are approximately **$80 million**[225](index=225&type=chunk) [Critical Accounting Policies](index=43&type=section&id=Critical%20Accounting%20Policies) Key accounting policies involve significant estimates and assumptions related to black lung benefit obligations and impairment of goodwill and long-lived assets - Critical accounting policies involve significant estimates and assumptions regarding black lung benefit obligations and impairment of goodwill and long-lived assets[226](index=226&type=chunk) - Black lung benefit liability was **$64.6 million as of December 31, 2020** (compared to $55.1 million in 2019), with an expense of **$15.4 million in 2020** (compared to $10.9 million in 2019)[231](index=231&type=chunk)[233](index=233&type=chunk)[380](index=380&type=chunk)[383](index=383&type=chunk) - In 2019, the logistics segment recorded a **$73.5 million goodwill impairment charge** due to customer bankruptcies and declining forecasts, resulting in the full impairment of the goodwill balance[236](index=236&type=chunk)[347](index=347&type=chunk) - In 2019, CMT (Logistics segment) recorded a **$173.9 million non-cash, pre-tax impairment charge** for long-lived assets, including **$113.3 million for intangible assets** and **$60.6 million for property, plant, and equipment**[240](index=240&type=chunk)[350](index=350&type=chunk) - No long-lived asset impairment was recorded in 2020[239](index=239&type=chunk) [Non-GAAP Financial Measures](index=45&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA is a non-GAAP financial measure used by management and investors to analyze financial performance, with a reconciliation provided to GAAP net income - Adjusted EBITDA is a non-GAAP financial measure used by company management and investors to analyze current and future financial performance[242](index=242&type=chunk)[432](index=432&type=chunk) - Adjusted EBITDA is defined as EBITDA, adjusted for impairments, (gain) loss on debt extinguishment, contingent consideration adjustments, restructuring costs, and simplification transaction costs[430](index=430&type=chunk) 2021 Adjusted EBITDA Guidance Reconciliation | Metric | Low (Millions USD) | High (Millions USD) | | :-------------------------------------- | :----------------- | :------------------ | | Net income | $15 | $35 | | Add: Depreciation and amortization expense | $137 | $133 | | Add: Interest expense, net | $55 | $50 | | Add: Income tax expense | $8 | $12 | | Adjusted EBITDA | $215 | $230 | | Subtract: Adjusted EBITDA attributable to noncontrolling interest | $9 | $9 | | Adjusted EBITDA attributable to SunCoke Energy, Inc. | $206 | $221 | [Guarantor Financial and Non-Financial Disclosures](index=46&type=section&id=Guarantor%20Financial%20and%20Non-Financial%20Disclosures) SunCoke Energy, Inc. and its 100% owned guarantor subsidiaries are expected to guarantee debt issued under a shelf registration statement, with summarized financial information provided - SunCoke Energy, Inc. (the Issuer) and its 100% owned subsidiaries (Guarantor Subsidiaries) are expected to guarantee debt issued under a shelf registration statement[246](index=246&type=chunk) - These guarantees are full and unconditional, subject to customary release provisions[246](index=246&type=chunk)[247](index=247&type=chunk) Condensed Consolidating Statement of Operations (Issuer and Guarantor Subsidiaries) (2020) | Metric | Amount (Millions USD) | | :---------------------- | :-------------------- | | Revenues | $962.6 | | Costs and operating expenses | $906.6 | | Operating income | $56.0 | | Net loss | $(6.6) | Condensed Consolidating Balance Sheet (Issuer and Guarantor Subsidiaries) (as of December 31, 2020) | Asset/Liability | Amount (Millions USD) | | :---------------------------------- | :-------------------- | | **Assets:** | | | | Cash | $44.6 | | Current receivables from Non-Guarantor subsidiaries | $14.2 | | Other current assets | $162.1 | | Properties, plants and equipment, net | $1,176.7 | | Other non-current assets | $54.8 | | Total assets | $1,452.4 | | **Liabilities:** | | | | Current liabilities | $126.5 | | Long-term debt and financing obligations | $673.9 | | Long-term payable to Non-Guarantor subsidiaries | $189.4 | | Other long-term liabilities | $240.6 | | Total liabilities | $1,230.4 | [Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) SunCoke faces market risks from changes in coal prices, interest rates, and foreign currency exchange rates, particularly for its Brazilian operations - The company's primary market risks include changes in coal prices, interest rates, and foreign currency exchange rates[257](index=257&type=chunk) - Coal costs, the largest component of coke prices for domestic cokemaking operations, are generally passed through to customers, thus having minimal impact on profitability unless target coal-to-coke yields are not met or spot sales occur[259](index=259&type=chunk)[260](index=260&type=chunk) - The company is exposed to interest rate risk due to floating-rate borrowings, such as its revolving credit facility, which had an outstanding balance of **$88.3 million as of December 31, 2020**[261](index=261&type=chunk) - Brazilian operations are affected by changes in the Brazilian Real exchange rate, with a **10% change in exchange rates estimated to impact net income by approximately $0.3 million in 2020**[263](index=263&type=chunk) [Financial Statements and Supplementary Data](index=52&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents SunCoke Energy's audited consolidated financial statements for 2020, 2019, and 2018, along with related notes and the auditor's report - This section includes the consolidated statements of operations, comprehensive income (loss), balance sheets, cash flows, and changes in equity for the years ended December 31, 2020, 2019, and 2018[265](index=265&type=chunk) - KPMG LLP issued an **unqualified opinion** on the company's consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2020[267](index=267&type=chunk) - The company changed its accounting method for leases effective January 1, 2019, adopting ASU 2016-02, Leases (Topic 842), and its subsequent amendments[268](index=268&type=chunk) - The evaluation of the company's estimated black lung benefit liability was identified as a **critical audit matter**, involving highly subjective judgments regarding actuarial models and key assumptions[277](index=277&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=90&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There are no changes in accountants or disagreements with them on accounting and financial disclosure in this report - None[435](index=435&type=chunk) [Controls and Procedures](index=90&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, affirmed the effectiveness of disclosure controls and procedures and internal control over financial reporting as of December 31, 2020 - As of December 31, 2020, the company's disclosure controls and procedures were deemed **effective at a reasonable assurance level**[436](index=436&type=chunk) - As of December 31, 2020, the company's internal control over financial reporting was deemed **effective based on the COSO 2013 framework**[438](index=438&type=chunk) - Despite the impact of COVID-19, with many employees working remotely, no material changes occurred in internal control over financial reporting during 2020[440](index=440&type=chunk) [Other Information](index=90&type=section&id=Item%209B.%20Other%20Information) There is no other information required to be disclosed in this report - None[441](index=441&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=91&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) The required disclosures for this item are incorporated by reference from the company's 2021 Annual Meeting of Stockholders Proxy Statement - The information required for this item is incorporated by reference from the company's definitive proxy statement for its 2021 Annual Meeting of Stockholders[443](index=443&type=chunk) [Executive Compensation](index=91&type=section&id=Item%2011.%20Executive%20Compensation) The required executive compensation disclosures are incorporated by reference from the company's 2021 Annual Meeting of Stockholders Proxy Statement - The information required for executive compensation is incorporated by reference from the company's definitive proxy statement for its 2021 Annual Meeting of Stockholders[444](index=444&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=91&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) The required disclosures for security ownership are incorporated by reference from the company's 2021 Annual Meeting of Stockholders Proxy Statement - The information required for security ownership of certain beneficial owners and management and related stockholder matters is incorporated by reference from the company's definitive proxy statement for its 2021 Annual Meeting of Stockholders[445](index=445&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=91&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) The required disclosures for certain relationships and related transactions and director independence are incorporated by reference from the company's 2021 Annual Meeting of Stockholders Proxy Statement - The information required for certain relationships and related transactions and director independence is incorporated by reference from the company's definitive proxy statement for its 2021 Annual Meeting of Stockholders[446](index=446&type=chunk) [Principal Accounting Fees and Services](index=91&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) The required disclosures for principal accounting fees and services are incorporated by reference from the company's 2021 Annual Meeting of Stockholders Proxy Statement - The information required for principal accounting fees and services is incorporated by reference from the company's definitive proxy statement for its 2021 Annual Meeting of Stockholders[447](index=447&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=92&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists the exhibits filed as part of the report and notes the omission of financial statement schedules due to information being presented elsewhere or not applicable - The consolidated financial statements are listed in Item 8 of the report[450](index=450&type=chunk) - Financial statement schedules have been omitted because the required information is presented elsewhere in the report or is not applicable[451](index=451&type=chunk) - The exhibit list includes various agreements, plans, and certifications, such as the Certificate of Incorporation, Credit Agreement, Incentive Plans, and Coke Supply Agreements[452](index=452&type=chunk)[453](index=453&type=chunk)[454](index=454&type=chunk)[456](index=456&type=chunk)[458](index=458&type=chunk)[461](index=461&type=chunk) [Form 10-K Summary](index=97&type=section&id=Item%2016.%20Form%2010-K%20Summary) A Form 10-K summary is not provided in this report - None[460](index=460&type=chunk)

SunCoke Energy, Inc. Q4 & FY 2020 Earnings and 2021 Guidance Conference Call Forward‐Looking Statements 2 This slide presentation should be reviewed in conjunction with the Fourth Quarter and Full‐Year 2020 earnings release of SunCoke Energy, Inc. (SunCoke) and conference call held on February 4, 2021 at 10:30 a.m. ET. This presentation call 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 am ...

Financial Data and Key Metrics Changes - In 2020, SunCoke Energy delivered $205.9 million of adjusted EBITDA, exceeding the revised guidance range of $190 million to $200 million, despite sub-optimal utilization rates [8][12] - The fourth quarter net loss attributable to SXC was $0.06 per share, down $0.04 compared to Q4 2019, while full year 2020 net income was $0.04 per share, up $2.02 from 2019 [14] - Consolidated adjusted EBITDA for Q4 2020 was $37 million, down $13.8 million from Q4 2019, primarily due to lower volumes in the Domestic Coke segment [15][19] Business Line Data and Key Metrics Changes - Domestic Coke operations contributed $217 million to adjusted EBITDA in 2020, exceeding the revised guidance for the segment [8][17] - The Logistics segment's adjusted EBITDA decreased by $25.3 million year-over-year, mainly due to the bankruptcy of a coal customer [19] - The foundry coke initiative has progressed well, with commercial production now established, and plans to run at full capacity in 2021 [10][12] Market Data and Key Metrics Changes - The steel industry saw capacity utilization rates drop to a low of 52% during the pandemic but began to recover towards the end of 2020, with hot rolled prices reaching levels not seen in years [22] - API2 prices for thermal coal increased by approximately 15% in Q4 2020 compared to the prior quarter, indicating a recovery in the coal export market [24] - The company anticipates handling between 4 million tons and 5 million tons of coal exports from CMT in 2021, reflecting improved market conditions [30] Company Strategy and Development Direction - SunCoke is focused on entering new foundry and export markets to diversify its customer base and enhance market presence [24][35] - The company aims to reduce its gross leverage ratio to 3 times or lower, emphasizing the importance of debt reduction in its capital allocation strategy [21][36] - Investments in the youngest domestic coke-making facilities in the NAFTA region are expected to support long-term operational efficiency and environmental performance [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2021, anticipating continued recovery in the steel industry and potential infrastructure investments to drive demand [22][36] - The company highlighted the importance of maintaining strong customer relationships and adapting to market changes, particularly in light of the pandemic [9][60] - Management noted that environmental performance improvements are ongoing and emphasized the need for fair trade practices to support domestic producers [71][72] Other Important Information - SunCoke reduced gross debt by $110 million in 2020, including repurchasing senior notes at a discount [11][21] - The company paid a $0.24 per share annual dividend and repurchased 1.6 million shares during the first quarter of 2020 [11][21] - The 2021 adjusted EBITDA guidance is set between $215 million and $230 million, with expectations for improved performance across all segments [26][32] Q&A Session Summary Question: What was the reason for the strong out-performance in Q4? - Management indicated that favorable weather and successful cost reduction initiatives contributed to the strong performance in Q4 [40] Question: Can you explain the transition from 2020 to 2021 in Domestic Coke? - Management clarified that while production capacity is 4.2 million tons, contracted volumes are around 3.8 million tons, with the remaining being sold into export and foundry markets [41][43] Question: What are the margin differentials between foundry coke and long-term contract coke? - Management refrained from providing specific profit margin information but indicated that foundry coke margins are expected to be in line with blast furnace margins [47] Question: What is the potential for CMT in the coming years? - Management noted that CMT has underutilized capacity and could handle significantly more volumes with modest investments [64] Question: How is the company addressing environmental performance in the steel industry? - Management emphasized that the domestic industry has made significant progress in CO2 reduction and continues to seek improvements while advocating for fair trade practices [71][72]

SunCoke Energy, Inc. (NYSE:SXC) Q3 2020 Earnings Conference Call November 6, 2020 10:00 AM ET Company Participants Shantanu Agrawal - Director, FP&A and Investor Relations Michael Rippey - President, Chief Executive Officer & Director Fay West - Senior Vice President & Chief Financial Officer Conference Call Participants Matthew Fields - Bank of America Merrill Lynch Nicholas Jarmoszuk - Stifel, Nicolaus & Company Mark Levin - The Benchmark Company Lucas Pipes - B. Riley Securities, Inc. Matthew Sandschafer ...

SunCoke Energy, Inc. Q3 2020 Earnings Conference Call Forward‐Looking Statements This slide presentation should be reviewed in conjunction with the Third Quarter 2020 earnings release of SunCoke Energy, Inc. (SunCoke) and conference call held on November 6, 2020. This conference call 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). Such forward‐looking statements include statements ...

Financial Data and Key Metrics Changes - The diluted EPS for Q2 2020 was $0.08 per share, an increase from $0.03 per share in Q2 2019, primarily due to costs associated with the simplification transaction in the prior year [15] - Adjusted EBITDA for Q2 2020 was $59 million, down from $63.1 million in Q2 2019, with a decrease in the Logistics segment contributing to this decline [16][17] - The cash balance at the end of the quarter was approximately $81 million, reflecting a reduction in borrowings from the revolving credit facility [18] - The company expects adjusted EBITDA for 2020 to be between $190 million and $200 million, a reduction of $40 million to $50 million from previous guidance [9][25] Business Line Data and Key Metrics Changes - Domestic coke sales volumes were 977,000 tons in Q2 2020, impacted by customer volume relief, with adjusted EBITDA per ton increasing to approximately $63 from $55 in Q2 2019 [21][22] - The Logistics segment saw a decrease in throughput volumes, handling approximately 2.7 million tons less than the prior year, significantly affected by the bankruptcy of Foresight Energy [16][23] Market Data and Key Metrics Changes - Steel capacity utilization remains low at approximately 59%, with uncertainty regarding the timing of a full recovery in demand [6] - Domestic demand for foundry coke is approximately 600,000 tons per year, with recent shutdowns of foundry coke producers leading to increased interest in domestic supply [12] Company Strategy and Development Direction - The company is pursuing a new business line in foundry coke, targeting an initial production of approximately 100,000 tons in 2021, with plans for further market penetration [11][14] - Investments of approximately $12 million are being made to support the transition to foundry coke production, with expectations of a short payback period [14] - The company aims to maintain a low-cost structure and has implemented workforce reductions to achieve permanent annual savings of approximately $10 million starting in 2021 [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the ongoing challenges in market conditions due to the COVID-19 pandemic but emphasizes the importance of long-term customer relationships and operational stability [5][6] - The company remains focused on optimizing operations and maintaining asset integrity, even as it navigates lower volume levels [26][27] - Management expresses confidence in capturing significant market share in the foundry coke market and maintaining strong margins through disciplined cost management [50][55] Other Important Information - The company has declared a dividend of $0.06 per share for the quarter, indicating confidence in its liquidity despite challenging market conditions [19] - The gross leverage at the end of the quarter was 3.3 times, with a target to reduce it to 3 times or lower over time [20] Q&A Session Summary Question: Which facility will be producing the foundry coke? - The foundry coke will be produced at the Jewell facility, which is logistically positioned to be the most efficient producer [32] Question: What is the expected EBITDA margin for foundry coke? - The margins are expected to be attractive on a time basis, with a two-for-one replacement ratio for blast furnace coke [33] Question: What is the current state of the Haverhill contract? - The company anticipates shipping 800,000 tons from both facilities in 2021, with flexibility in production sourcing [34][36] Question: How does the company plan to address the volume decline to ArcelorMittal? - The company is in constant dialogue with customers regarding their long-term requirements for coke [38] Question: What is the strategy for asset sales? - The company is not currently focused on asset sales due to the pandemic's impact on the market [46] Question: How does the company plan to fill the gap created by new contracts? - The company plans to fill the gap through both traditional blast furnace customers and continued success in foundry coke [66]

SunCoke Energy, Inc. Q2 2020 Earnings Conference Call Forward‐Looking Statements This slide presentation should be reviewed in conjunction with the Second Quarter 2020 earnings release of SunCoke Energy, Inc. (SunCoke) and conference call held on August 3, 2020. This conference call 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). Such forward‐looking statements include statements t ...