SunCoke Energy(SXC) - 2023 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Consolidated Financial Statements Unaudited consolidated financial statements for Q1 2023 and 2022, including income, balance sheets, cash flows, equity, and notes Consolidated Statements of Income (Unaudited) Financial Performance (Q1 2023 vs. Q1 2022) | Metric | 3 Months Ended March 31, 2023 (Millions $) | 3 Months Ended March 31, 2022 (Millions $) | Change (Millions $) | Change (%) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------ | :--------- | | Sales and other operating revenue | 487.8 | 439.8 | 48.0 | 10.9% | | Total costs and operating expenses | 456.1 | 391.2 | 64.9 | 16.6% | | Operating income | 31.7 | 48.6 | (16.9) | -34.8% | | Net income | 17.7 | 30.6 | (12.9) | -42.2% | | Net income attributable to SunCoke Energy, Inc. | 16.3 | 29.5 | (13.2) | -44.7% | | Basic EPS | 0.19 | 0.35 | (0.16) | -45.7% | | Diluted EPS | 0.19 | 0.35 | (0.16) | -45.7% | | Basic Weighted average shares outstanding | 84.5 | 83.2 | 1.3 | 1.6% | | Diluted Weighted average shares outstanding | 84.9 | 84.2 | 0.7 | 0.8% | Consolidated Statements of Comprehensive Income (Unaudited) Comprehensive Income (Q1 2023 vs. Q1 2022) | Metric | 3 Months Ended March 31, 2023 (Millions $) | 3 Months Ended March 31, 2022 (Millions $) | Change (Millions $) | Change (%) | | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------ | :--------- | | Net income | 17.7 | 30.6 | (12.9) | -42.2% | | Other comprehensive income (net of tax) | 0.2 | 1.4 | (1.2) | -85.7% | | Comprehensive income | 17.9 | 32.0 | (14.1) | -44.1% | | Comprehensive income attributable to SunCoke Energy, Inc. | 16.5 | 30.9 | (14.4) | -46.6% | Consolidated Balance Sheets Balance Sheet Highlights (March 31, 2023 vs. December 31, 2022) | Metric | March 31, 2023 (Millions $) | December 31, 2022 (Millions $) | Change (Millions $) | Change (%) | | :--------------------------------------- | :-------------------------- | :----------------------------- | :------------------ | :--------- | | Total current assets | 409.8 | 374.0 | 35.8 | 9.6% | | Total assets | 1,669.3 | 1,654.6 | 14.7 | 0.9% | | Total current liabilities | 231.8 | 224.0 | 7.8 | 3.5% | | Total liabilities | 1,041.0 | 1,031.9 | 9.1 | 0.9% | | Total SunCoke Energy, Inc. stockholders' equity | 593.5 | 585.6 | 7.9 | 1.3% | | Total equity | 628.3 | 622.7 | 5.6 | 0.9% | Consolidated Statements of Cash Flows Cash Flow Summary (Q1 2023 vs. Q1 2022) | Metric | 3 Months Ended March 31, 2023 (Millions $) | 3 Months Ended March 31, 2022 (Millions $) | Change (Millions $) | Change (%) | | :--------------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------ | :--------- | | Net cash provided by operating activities | 30.2 | 22.7 | 7.5 | 33.0% | | Net cash used in investing activities | (22.3) | (13.0) | (9.3) | 71.5% | | Net cash (used in) provided by financing activities | (14.6) | 6.2 | (20.8) | -335.5% | | Net (decrease) increase in cash and cash equivalents | (6.7) | 15.9 | (22.6) | -142.1% | | Cash and cash equivalents at end of period | 83.3 | 79.7 | 3.6 | 4.5% | Consolidated Statements of Equity Equity Changes (Q1 2023) | Metric | At December 31, 2022 (Millions $) | Net Income (Millions $) | Share-based Compensation (Millions $) | Share Issuances (Millions $) | Dividends (Millions $) | Cash Distribution to Noncontrolling Interests (Millions $) | At March 31, 2023 (Millions $) | | :--------------------------------------- | :-------------------------------- | :---------------------- | :------------------------------------ | :--------------------------- | :--------------------- | :------------------------------------------------------- | :----------------------------- | | Total SunCoke Energy, Inc. Equity | 585.6 | 16.3 | 1.6 | (3.4) | (6.8) | — | 593.5 | | Noncontrolling Interest | 37.1 | 1.4 | — | — | — | (3.7) | 34.8 | | Total Equity | 622.7 | 17.7 | 1.6 | (3.4) | (6.8) | (3.7) | 628.3 | Equity Changes (Q1 2022) | Metric | At December 31, 2021 (Millions $) | Net Income (Millions $) | Share-based Compensation (Millions $) | Share Issuances (Millions $) | Dividends (Millions $) | Cash Distribution to Noncontrolling Interests (Millions $) | At March 31, 2022 (Millions $) | | :--------------------------------------- | :-------------------------------- | :---------------------- | :------------------------------------ | :--------------------------- | :--------------------- | :------------------------------------------------------- | :----------------------------- | | Total SunCoke Energy, Inc. Equity | 498.1 | 29.5 | 2.5 | (1.4) | (5.1) | — | 525.0 | | Noncontrolling Interest | 37.3 | 1.1 | — | — | — | (1.5) | 36.9 | | Total Equity | 535.4 | 30.6 | 2.5 | (1.4) | (5.1) | (1.5) | 561.9 | Notes to the Consolidated Financial Statements 1. General - SunCoke Energy, Inc. is the largest independent producer of high-quality coke in the Americas, primarily used in blast furnace steelmaking and foundry production, with the majority of sales derived from long-term, take-or-pay agreements[31] - The Company owns and operates five cokemaking facilities in the U.S. with a collective nameplate capacity of approximately 4.2 million tons/year, and operates one facility in Brazil for ArcelorMittal Brasil S.A. with 1.7 million tons/year capacity, both utilizing heat recovery technology to create steam or electricity[31] - SunCoke also operates a logistics business providing material handling and mixing services with a collective capacity to mix and/or transload over 40 million tons of coal and other aggregates annually and storage capacity of approximately 3 million tons[32] 2. Inventories Inventory Components (March 31, 2023 vs. December 31, 2022) | Component | March 31, 2023 (Millions $) | December 31, 2022 (Millions $) | Change (Millions $) | Change (%) | | :------------------------ | :-------------------------- | :----------------------------- | :------------------ | :--------- | | Coal | 145.7 | 109.4 | 36.3 | 33.2% | | Coke | 34.5 | 14.3 | 20.2 | 141.3% | | Materials, supplies and other | 54.6 | 51.5 | 3.1 | 6.0% | | Total inventories | 234.8 | 175.2 | 59.6 | 34.0% | 3. Intangible Assets Intangible Assets, Net (March 31, 2023 vs. December 31, 2022) | Category | March 31, 2023 (Millions $) | December 31, 2022 (Millions $) | Change (Millions $) | Change (%) | | :------------------ | :-------------------------- | :----------------------------- | :------------------ | :--------- | | Customer relationships | 0.9 | 1.1 | (0.2) | -18.2% | | Permits | 26.9 | 27.2 | (0.3) | -1.1% | | Other | 1.5 | 1.5 | 0.0 | 0.0% | | Total Net Intangibles | 29.3 | 29.8 | (0.5) | -1.7% | - Goodwill of $3.4 million is allocated to the Domestic Coke segment at both March 31, 2023, and December 31, 2022[35] - Total amortization expense for intangible assets was $0.5 million for both the three months ended March 31, 2023, and 2022[36] 4. Income Taxes Income Tax Expense and Effective Tax Rate (Q1 2023 vs. Q1 2022) | Metric | 3 Months Ended March 31, 2023 (Millions $) | 3 Months Ended March 31, 2023 (%) | 3 Months Ended March 31, 2022 (Millions $) | 3 Months Ended March 31, 2022 (%) | | :------------------------ | :--------------------------------------- | :-------------------------------- | :--------------------------------------- | :-------------------------------- | | Income before income tax expense | 24.5 | N/A | 40.6 | N/A | | Income tax expense | 6.8 | N/A | 10.0 | N/A | | Effective tax rate | N/A | 27.8% | N/A | 24.6% | - Income taxes for Q1 2022 included a $1.0 million benefit from the revaluation of certain deferred tax liabilities due to changes in apportioned state tax rates[38] - Excluding discrete items, the effective tax rate was 27.8% for Q1 2023 and 27.2% for Q1 2022, reflecting state taxes, compensation deduction limitations, and the impact of new foreign tax credit utilization regulations in 2023[39] 5. Accrued Liabilities Accrued Liabilities (March 31, 2023 vs. December 31, 2022) | Component | March 31, 2023 (Millions $) | December 31, 2022 (Millions $) | Change (Millions $) | Change (%) | | :-------------------------------- | :-------------------------- | :----------------------------- | :------------------ | :--------- | | Accrued benefits | 13.4 | 29.7 | (16.3) | -54.9% | | Current portion of postretirement benefit obligation | 2.4 | 2.4 | 0.0 | 0.0% | | Other taxes payable | 12.1 | 9.8 | 2.3 | 23.5% | | Current portion of black lung liability | 5.9 | 5.9 | 0.0 | 0.0% | | Accrued legal | 5.2 | 4.9 | 0.3 | 6.1% | | Other | 6.6 | 8.1 | (1.5) | -18.5% | | Total accrued liabilities | 45.6 | 60.8 | (15.2) | -25.0% | 6. Debt and Financing Obligation Total Debt and Financing Obligation (March 31, 2023 vs. December 31, 2022) | Component | March 31, 2023 (Millions $) | December 31, 2022 (Millions $) | Change (Millions $) | Change (%) | | :-------------------------------------- | :-------------------------- | :----------------------------- | :------------------ | :--------- | | 4.875% senior notes, due 2029 | 500.0 | 500.0 | 0.0 | 0.0% | | $350.0 revolving credit facility, due 2026 | 35.0 | 35.0 | 0.0 | 0.0% | | 5.346% financing obligation, due 2024 | 8.0 | 8.8 | (0.8) | -9.1% | | Total borrowings | 543.0 | 543.8 | (0.8) | -0.1% | | Debt issuance costs | (11.2) | (11.6) | 0.4 | -3.4% | | Total debt and financing obligation | 531.8 | 532.2 | (0.4) | -0.1% | | Less: current portion of financing obligation | 3.4 | 3.3 | 0.1 | 3.0% | | Total long-term debt and financing obligation | 528.4 | 528.9 | (0.5) | -0.1% | - As of March 31, 2023, the Revolving Facility had a $35.0 million outstanding balance, leaving $315.0 million available[42] - The Company was in compliance with all applicable debt covenants as of March 31, 2023, including a maximum consolidated net leverage ratio of 4.50:1.00 and a minimum consolidated interest coverage ratio of 2.50:1.00[43][45] 7. Commitments and Contingent Liabilities - The Company is a party to various pending and threatened claims, including commercial disputes, employment claims, personal injury claims, common law tort claims, and environmental claims, but management believes any resulting liability would not have a material adverse impact on consolidated financial statements[46][47] - The estimated liability for black lung benefits was $58.6 million at March 31, 2023, an increase from $58.1 million at December 31, 2022[49] - The U.S. Department of Labor's DCMWC reauthorized self-insurance for black lung obligations but proposed a substantial increase in collateral to $40.4 million (from $8.4 million), which the Company is appealing. A new proposed rule could require collateral of 120% of total expected lifetime obligations, potentially reducing liquidity[50] 8. Share-Based Compensation - During Q1 2023, the Company issued 294,462 Restricted Stock Units (RSUs) to employees, vesting in three annual installments, with a weighted average grant date fair value of $9.24 per unit[52] - Performance Share Units (PSUs) totaling 147,232 were granted in Q1 2023, with a service period ending December 31, 2025, and vesting in Q1 2026. Payouts can range from 25% to 200% based on Adjusted EBITDA, pre-tax return on capital, and Total Shareholder Return (TSR) relative to the Nasdaq Iron & Steel Index[53][54][60] Share-Based Compensation Expense (Q1 2023 vs. Q1 2022) | Award Type | 3 Months Ended March 31, 2023 (Millions $) | 3 Months Ended March 31, 2022 (Millions $) | Change (Millions $) | Change (%) | | :---------------- | :--------------------------------------- | :--------------------------------------- | :------------------ | :--------- | | Equity Awards: | | | | | | RSUs | 0.3 | 0.3 | 0.0 | 0.0% | | PSUs | 1.3 | 0.7 | 0.6 | 85.7% | | Total equity awards | 1.6 | 1.0 | 0.6 | 60.0% | | Liability Awards: | | | | | | Cash RSUs | 0.7 | 0.7 | 0.0 | 0.0% | | Cash incentive award | 1.3 | 1.0 | 0.3 | 30.0% | | Total liability awards | 2.0 | 1.7 | 0.3 | 17.6% | 9. Earnings per Share Weighted-Average Common Shares Outstanding (Q1 2023 vs. Q1 2022) | Metric | 3 Months Ended March 31, 2023 (Millions) | 3 Months Ended March 31, 2022 (Millions) | Change (Millions) | Change (%) | | :---------------------------------------- | :--------------------------------------- | :--------------------------------------- | :---------------- | :--------- | | Weighted-average number of common shares outstanding-basic | 84.5 | 83.2 | 1.3 | 1.6% | | Add: Effect of dilutive share-based compensation awards | 0.4 | 1.0 | (0.6) | -60.0% | | Weighted-average number of shares-diluted | 84.9 | 84.2 | 0.7 | 0.8% | - Stock options totaling 1.4 million shares in Q1 2023 (1.8 million in Q1 2022) were excluded from diluted EPS computation as they were anti-dilutive[63] 10. Fair Value Measurement - Cash and cash equivalents are measured at fair value using Level 1 inputs (quoted prices in active markets)[65] - The fair value of total debt was estimated at $482.3 million at March 31, 2023 (carrying amount $543.0 million) and $471.9 million at December 31, 2022 (carrying amount $543.8 million), using Level 2 inputs (estimates from financial institutions)[66] 11. Revenue from Contracts with Customers - Cokemaking revenue is primarily from long-term, take-or-pay agreements; as of March 31, 2023, approximately 24.6 million tons of unsatisfied performance obligations are expected to be delivered over a weighted average remaining contract term of about ten years[67] - Logistics business expects approximately $45.0 million in take-or-pay revenue from multi-year contracts over the next four years[72] Disaggregated Sales and Other Operating Revenue by Product/Service (Q1 2023 vs. Q1 2022) | Product or Service | 3 Months Ended March 31, 2023 (Millions $) | 3 Months Ended March 31, 2022 (Millions $) | Change (Millions $) | Change (%) | | :------------------------ | :--------------------------------------- | :--------------------------------------- | :------------------ | :--------- | | Cokemaking | 444.6 | 395.9 | 48.7 | 12.3% | | Energy | 12.2 | 14.7 | (2.5) | -17.0% | | Logistics | 20.9 | 18.7 | 2.2 | 11.8% | | Operating and licensing fees | 7.9 | 9.4 | (1.5) | -16.0% | | Other | 2.2 | 1.1 | 1.1 | 100.0% | | Total | 487.8 | 439.8 | 48.0 | 10.9% | 12. Business Segment Information - The Company reports through three segments: Domestic Coke (five U.S. facilities), Brazil Coke (operating facility for ArcelorMittal Brazil), and Logistics (Convent Marine Terminal, Kanawha River Terminal, Lake Terminal)[74][75][76] - Dismal River Terminal (DRT) operations were combined into the Jewell cokemaking operations within the Domestic Coke segment starting January 1, 2023, previously included in the Logistics segment[76] Adjusted EBITDA by Segment (Q1 2023 vs. Q1 2022) | Segment | 3 Months Ended March 31, 2023 (Millions $) | 3 Months Ended March 31, 2022 (Millions $) | Change (Millions $) | Change (%) | | :------------------ | :--------------------------------------- | :--------------------------------------- | :------------------ | :--------- | | Domestic Coke | 60.4 | 76.0 | (15.6) | -20.5% | | Brazil Coke | 2.4 | 4.2 | (1.8) | -42.9% | | Logistics | 13.5 | 12.6 | 0.9 | 7.1% | | Corporate and Other, net | (9.2) | (9.0) | (0.2) | 2.2% | | Total Adjusted EBITDA | 67.1 | 83.8 | (16.7) | -19.9% | Capital Expenditures by Segment (Q1 2023 vs. Q1 2022) | Segment | 3 Months Ended March 31, 2023 (Millions $) | 3 Months Ended March 31, 2022 (Millions $) | Change (Millions $) | Change (%) | | :------------------ | :--------------------------------------- | :--------------------------------------- | :------------------ | :--------- | | Domestic Coke | 20.9 | 11.1 | 9.8 | 88.3% | | Brazil Coke | 1.5 | 0.1 | 1.4 | 1400.0% | | Logistics | 0.1 | 1.7 | (1.6) | -94.1% | | Corporate and Other | 0.1 | 0.0 | 0.1 | N/A | | Total | 22.6 | 12.9 | 9.7 | 75.2% | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses SunCoke Energy's Q1 2023 financial condition, operations, and cash flows, including market conditions and segment performance Overview - SunCoke Energy, Inc. is the largest independent producer of high-quality coke in the Americas, primarily used in blast furnace steelmaking and foundry production[87] - The Company operates five cokemaking facilities in the U.S. (4.2 million tons/year capacity) and one in Brazil (1.7 million tons/year capacity), utilizing heat recovery technology[87] - A logistics business provides material handling and mixing services with over 40 million tons/year capacity and 3 million tons of storage[88] Market Discussion - Economic uncertainty, driven by inflation and commodity pricing volatility, resulted in continued decreases in global export coke prices during Q1 2023[89] - Export coke tonnage, produced using capacity in excess of long-term take-or-pay agreements, is impacted by these price fluctuations[89] - Decreases in European energy needs due to mild weather led to a decline in benchmark coal prices, but export coal volumes through Convent Marine Terminal (CMT) were not negatively impacted in Q1 2023[90] First Quarter Key Financial Results Consolidated Results (Q1 2023 vs. Q1 2022) | Metric | 3 Months Ended March 31, 2023 (Millions $) | 3 Months Ended March 31, 2022 (Millions $) | Increase (Decrease) (Millions $) | | :-------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------------------- | | Net income | 17.7 | 30.6 | (12.9) | | Net cash provided by operating activities | 30.2 | 22.7 | 7.5 | | Adjusted EBITDA | 67.1 | 83.8 | (16.7) | - Operating results in Q1 2023 primarily reflect lower margins on export coke sales and the timing of shipments in the Domestic Coke segment[92] Recent Developments - In April 2023, the Indiana Harbor long-term, take-or-pay agreement with Cliffs Steel was extended to September 30, 2035, continuing to supply 1,220 thousand tons annually[93] - Reimbursement of certain operating and maintenance expenses under the extended agreement are fixed subject to annual inflation adjustment, while coal cost pass-through and other key provisions remain unchanged[93] Results of Operations Consolidated Income Statement Changes (Q1 2023 vs. Q1 2022) | Metric | 3 Months Ended March 31, 2023 (Millions $) | 3 Months Ended March 31, 2022 (Millions $) | Increase (Decrease) (Millions $) | | :---------------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------------------- | | Sales and other operating revenue | 487.8 | 439.8 | 48.0 | | Cost of products sold and operating expenses | 402.0 | 338.0 | 64.0 | | Selling, general and administrative expenses | 18.8 | 18.0 | 0.8 | | Depreciation and amortization expense | 35.3 | 35.2 | 0.1 | | Total costs and operating expenses | 456.1 | 391.2 | 64.9 | | Operating income | 31.7 | 48.6 | (16.9) | | Interest expense, net | 7.2 | 8.0 | (0.8) | | Income before income tax expense | 24.5 | 40.6 | (16.1) | | Income tax expense | 6.8 | 10.0 | (3.2) | | Net income | 17.7 | 30.6 | (12.9) | | Net income attributable to SunCoke Energy, Inc. | 16.3 | 29.5 | (13.2) | - Sales and other operating revenue and costs of products sold increased primarily due to the pass-through of higher coal prices in the Domestic Coke segment, partially offset by lower pricing on export coke sales and timing of shipments[95] - Interest expense, net, decreased due to lower average debt balances during the current year period[97] Results of Reportable Business Segments - Domestic Coke segment's sales and other operating revenues increased by $47.2 million to $458.8 million, while Adjusted EBITDA decreased by $15.6 million to $60.4 million, primarily due to lower sales pricing on export coke sales despite higher coal price pass-through on long-term agreements[104][107] - Logistics segment's Adjusted EBITDA increased to $13.5 million from $12.6 million, primarily reflecting higher transloading volumes at Convent Marine Terminal (CMT)[108] - Brazil Coke segment's revenues decreased to $7.9 million from $9.4 million, and Adjusted EBITDA decreased to $2.4 million from $4.2 million, mainly due to the absence of technology fees and production bonuses[109] Liquidity and Capital Resources - Primary liquidity needs include funding working capital, investments, debt service, cash reserves, and capital expenditures, with sources from operations, Revolving Facility borrowings, and debt/equity offerings[111] - As of March 31, 2023, the Company had $83.3 million of cash and cash equivalents and $315.0 million of borrowing availability under its Revolving Facility[111] - The Company may be required to provide additional collateral for black lung obligations if its appeal to the DCMWC is unsuccessful, or if a new proposed rule requiring 120% collateral of total expected lifetime obligations is finalized, potentially reducing liquidity[112][113] Cash Flow Summary Cash Flow Summary (Q1 2023 vs. Q1 2022) | Metric | 3 Months Ended March 31, 2023 (Millions $) | 3 Months Ended March 31, 2022 (Millions $) | Change (Millions $) | | :---------------------------------------- | :--------------------------------------- | :--------------------------------------- | :------------------ | | Net cash provided by operating activities | 30.2 | 22.7 | 7.5 | | Net cash used in investing activities | (22.3) | (13.0) | (9.3) | | Net cash (used in) provided by financing activities | (14.6) | 6.2 | (20.8) | | Net (decrease) increase in cash and cash equivalents | (6.7) | 15.9 | (22.6) | - Net cash provided by operating activities increased by $7.5 million, primarily due to a favorable year-over-year change in primary working capital, partially offset by lower operating results in Domestic Coke and higher employee-related payments[115] - Net cash used in financing activities was $14.6 million in Q1 2023, compared to $6.2 million provided in Q1 2022, mainly due to the absence of net proceeds from the Revolving Facility in the prior year, higher cash distributions to noncontrolling interests, and increased dividends paid[117] Dividends - On February 2, 2023, SunCoke's Board of Directors declared a cash dividend of $0.08 per share, paid on March 1, 2023[118] - On May 4, 2023, the Board declared another cash dividend of $0.08 per share, to be paid on June 1, 2023[118] Covenants - As of March 31, 2023, the Company was in compliance with all applicable debt covenants[119] - Management does not anticipate any covenant violations or restrictions on operations or the ability to obtain additional financing[119] Capital Requirements and Expenditures - Capital requirements consist of ongoing capital expenditures (maintenance, reliability, environmental compliance), expansion capital expenditures (growth, new markets, agreement renewals), and environmental remediation project expenditures[125] Capital Expenditures (Q1 2023 vs. Q1 2022) | Type | 3 Months Ended March 31, 2023 (Millions $) | 3 Months Ended March 31, 2022 (Millions $) | Change (Millions $) | Change (%) | | :------------------ | :--------------------------------------- | :--------------------------------------- | :------------------ | :--------- | | Ongoing capital | 21.7 | 11.4 | 10.3 | 90.4% | | Expansion capital | 0.9 | 1.5 | (0.6) | -40.0% | | Total capital expenditures | 22.6 | 12.9 | 9.7 | 75.2% | - Expansion capital includes spending in connection with the foundry cokemaking growth project[126] Critical Accounting Policies - There have been no significant changes to the Company's accounting policies during the three months ended March 31, 2023[122] Recent Accounting Standards - No new accounting standards material to SunCoke Energy, Inc. have been adopted during the three months ended March 31, 2023[123] Non-GAAP Financial Measures - The Company uses Adjusted EBITDA, a non-GAAP financial measure, to analyze current and expected future financial performance[124] - Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted for any impairments, restructuring costs, gains or losses on extinguishment of debt and transaction costs[79] - A reconciliation of Adjusted EBITDA to net income is provided in Note 12 to the consolidated financial statements[124] Item 3. Quantitative and Qualitative Disclosures about Market Risk No material changes to the Company's market risk exposure were reported since the 2022 Annual Report on Form 10-K - No material changes to the Company's exposure to market risk were disclosed compared to the Annual Report on Form 10-K for the year ended December 31, 2022[125] Item 4. Controls and Procedures Disclosure controls and procedures were effective as of March 31, 2023, with no material changes to internal control over financial reporting Management's Evaluation of Disclosure Controls and Procedures - Management, including the Chief Executive Officer and Chief Financial Officer, concluded that the Company's disclosure controls and procedures were effective as of March 31, 2023[129] Changes in Internal Control over Financial Reporting - 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 March 31, 2023[130] PART II – OTHER INFORMATION Item 1. Legal Proceedings The Company is involved in various legal proceedings, but management believes potential liabilities are not material to its financial position - The Company is a party to certain pending and threatened claims, including commercial disputes, employment claims, personal injury claims, common law tort claims, and general environmental claims[133] - Management believes that any liabilities that may arise from such matters would not likely be material in relation to the Company's business or its consolidated financial position, results of operations, or cash flows at March 31, 2023[133] Item 1A. Risk Factors No material changes to the Company's risk factors were reported since the 2022 Annual Report on Form 10-K - There have been no material changes with respect to risk factors disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2022[134] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The Company has a $100.0 million share repurchase program, with $96.3 million remaining and no repurchases since Q1 2020 - The Company has an authorized program to repurchase outstanding shares of common stock for a total aggregate cost not to exceed $100.0 million[135] - As of March 31, 2023, $96.3 million remains available under the authorized repurchase program[135] - There have been no share repurchases since the first quarter of 2020[135] Item 3. Defaults Upon Senior Securities No defaults upon senior securities were reported - No defaults upon senior securities were reported[136] Item 4. Mine Safety Disclosures The Company provides mine safety disclosures for its logistics assets, regulated by the Mine Safety and Health Administration - The Company continues to own certain logistics assets that are regulated by the Mine Safety and Health Administration[137] - Information concerning mine safety violations and other regulatory matters is included in Exhibit 95.1 to this Quarterly Report on Form 10-Q[137] Item 5. Other Information No other information was reported - No other information was disclosed in this section[138] Item 6. Exhibits This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including governance, certifications, and financial statements - Key exhibits include Amended and Restated Certificate of Incorporation (3.1), Amended and Restated Bylaws (3.2), CEO and CFO certifications (31.1, 31.2, 32.1, 32.2), Mine Safety Disclosures (95.1), and iXBRL formatted financial statements (101) and cover page (104)[140] Signature - The report was signed on May 4, 2023, by Mark W. Marinko, Senior Vice President and Chief Financial Officer of SunCoke Energy, Inc.[146]