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 - Quarterly period ended: June 30, 20252 - Commission File Number: 001-352432 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: 84,665,5094 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 negatives8 - Such statements are not guarantees of future performance and are based on current knowledge, beliefs, and expectations, which may prove inaccurate8 - The company does not have any intention or obligation to update any forward-looking statement after the report date, except as required by applicable law9 - 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 acquisitions101114 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 periods17 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 adjustment19 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, 202421 - Total liabilities decreased by $22.8 million to $934.4 million at June 30, 2025, from $957.2 million at December 31, 202421 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 year23129 - Net cash used in investing activities decreased by $16.2 million to $17.2 million, primarily due to lower capital spending23130 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 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 experience34 - 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 capacity34 - 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 tons35 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 increase37 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 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 202541 - 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 202543 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, 202444 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 million46 - 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 2.50:1.004749 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, 202551 - The company is a party to various pending and threatened claims, including commercial disputes, employment, personal injury, tort, and environmental claims52 - Management believes that any liability arising from these claims would likely not have a material adverse impact on the consolidated financial statements52 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 unit54 - 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 Modifier555659 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 participants67 - Cash and cash equivalents are measured at fair value based on quoted prices in active markets (Level 1 inputs)68 - 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 inputs69 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 years71 - 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 years7576 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)7980 - 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 costs82123 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 experience97 - 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 technology97 - The logistics business provides material handling and mixing services with over 40 million tons annual capacity and 3 million tons storage capacity98 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 fluctuations99 - Non-contracted blast furnace coke sales are influenced by global coke prices and demand99 - 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 demand100 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 volumes101 - 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 year101 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 2025103 - 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 2025103 - 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 million103 - 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 months103 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 yields104 - 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 expenses105 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 prices117121 - Operating and maintenance costs benefited from lower planned maintenance outage costs in the current year121 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 benefit118 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-year119 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 business120 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 costs123 - 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' metrics123124 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 expenditures126 - Sources of liquidity include cash generated from operations, borrowings under the Revolving Facility, and debt/equity offerings126 - As of June 30, 2025, the company had $186.2 million in cash and cash equivalents and $350.0 million available under its Revolving Facility126 - The $325 million Phoenix Global acquisition will be funded with existing cash and availability under the Revolving Facility126 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 year129 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 expenditures130 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 interests131 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, 2025132 - On July 30, 2025, a cash dividend of $0.12 per share was declared, to be paid on September 2, 2025132 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 covenants133 - Management does not anticipate any violation of these covenants or that they will restrict operations or ability to obtain additional financing133 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 expenditures135144 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 capital136 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, 2025137 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, 2025138 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, 2024139 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 Act140 - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025142 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, 2025143 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 statements146 - 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, 2025147 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, 2024148 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, 2019149 - No share repurchases have been made since the first quarter of 2020149 - As of June 30, 2025, $96.3 million remains available under the authorized repurchase program149 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 - None150 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 purview151 - The company continues to own certain logistics assets that are regulated by MSHA151 Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) This section states that there is no other information to report - None152 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 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 officer159
SunCoke Energy(SXC) - 2025 Q2 - Quarterly Report