8-K
false 0001514705 0001514705 2022-02-01 2022-02-01

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): February 1, 2022

 

 

SUNCOKE ENERGY, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-35243   90-0640593
(State of Incorporation)  

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

1011 Warrenville Road, Suite 600

Lisle, Illinois

  60532
(Address of principal executive offices)   (Zip code)

Registrant’s telephone number, including area code: (630) 824-1000

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $0.01 par value   SXC   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02.

Results of Operations and Financial Condition.

On February 1, 2022, SunCoke Energy, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter of 2021. A copy of this press release is attached as Exhibit 99.1 and is incorporated herein by reference.

 

Item 7.01.

Regulation FD Disclosure.

As noted above, on February 1, 2022, the Company issued a press release announcing its financial results for the fourth quarter of 2021. Additional information concerning the Company’s financial results for the fourth quarter of 2021 will be presented in a slide presentation to investors during a previously announced teleconference on February 1, 2022. A copy of the slide presentation is attached as Exhibit 99.2 and is incorporated herein by reference.

The information in this report, being furnished pursuant to Items 2.02, 7.01 and 9.01 of Form 8-K, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, and is not incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

 

Item 8.01.

Other Events.

On February 1, 2022, the Company issued a press release announcing the declaration of its quarterly cash dividend. A copy of this press release is attached hereto as Exhibit 99.3 and is incorporated herein by reference.

Safe Harbor Statement

Statements contained in the exhibits to this report that state the Company’s or management’s expectations or predictions of the future are forward-looking statements intended to be covered by the safe harbor provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The Company’s actual results could differ materially from those projected in such forward-looking statements. Factors that could affect those results include those mentioned in the documents that the Company has filed with the Securities and Exchange Commission.

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit
No.

  

Description

99.1    SunCoke Energy, Inc. Press Release, announcing earnings (February 1, 2022).
99.2    SunCoke Energy, Inc. Slide Presentation regarding earnings (February 1, 2022).
99.3    SunCoke Energy, Inc. Press Release, announcing cash dividend (February 1, 2022)
104    Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  SUNCOKE ENERGY, INC.
By:  

/s/ Bonnie M. Edeus

  Bonnie M. Edeus
  Vice President and Controller

Date: February 1, 2022

Exhibit 99.1

 

LOGO

Investors and Media:

Shantanu Agrawal

(630) 824-1907

SUNCOKE ENERGY, INC. ANNOUNCES STRONG 2021 RESULTS AND

PROVIDES FULL-YEAR 2022 GUIDANCE

 

   

Net income attributable to SXC was $43.4 million, or $0.52 per share, for the full-year 2021; Net income attributable to SXC was $12.7 million, or $0.15 per share, in the fourth quarter 2021

 

   

Full-year 2021 consolidated Adjusted EBITDA was $275.4 million, representing record-setting full year performance; Fourth quarter Adjusted EBITDA was $62.9 million

 

   

Operating cash flow was $233.1 million for the full-year 2021, above our revised guidance of $209 million to $224 million

 

   

Signed a 5 year take-or-pay coke contract with Algoma Steel beginning in 2022; average sales volume of 150,000 tons per year

 

   

Full-year 2022 consolidated Adjusted EBITDA is expected to be $240 million to $255 million

LISLE, Ill. (February 1, 2022) - SunCoke Energy, Inc. (NYSE: SXC) (the “Company” or “SunCoke”) today reported fourth quarter and full-year 2021 results, reflecting record-setting performance from our cokemaking and logistics businesses.

“In 2021, we further demonstrated our operational and technical expertise by meaningfully expanding into the foundry and export coke markets and ensuring, our best-in-class assets continue to run at full capacity. With the backdrop of strong commodity markets and robust demand for our products and services, we delivered the highest Adjusted EBITDA results in the history of SunCoke.” said Mike Rippey, President and Chief Executive Officer of SunCoke Energy, Inc. “We also successfully refinanced the company’s debt, significantly reducing the cost of debt and extending debt maturities.”

Looking forward, the Company expects 2022 consolidated Adjusted EBITDA to be between $240 million and $255 million, driven by our Domestic Coke plants continuing to operate at full capacity.

Rippey continued, “As we enter 2022, we remain focused on executing against our objectives of world-class safety performance, operational excellence and balanced capital allocation. We delivered robust cash flows and made significant progress towards our capital allocation objectives in 2021, setting the stage for continued progress on our capital allocation priorities in 2022. Additionally, we will continue to work towards strengthening customer relationships in both cokemaking and logistics businesses. We are confident that we will execute against our objectives and deliver significant value to SunCoke stakeholders.”


CONSOLIDATED RESULTS

 

     Three Months Ended
December 31,
     Years Ended
December 31,
 

(Dollars in millions)

   2021      2020     Increase/
(Decrease)
     2021      2020      Increase/
(Decrease)
 

Sales and other operating revenues

   $ 365.3      $ 310.1     $ 55.2      $ 1,456.0      $ 1,333.0      $ 123.0  

Net (loss) income attributable to SXC

   $ 12.7      $ (5.0   $ 17.7      $ 43.4      $ 3.7      $ 39.7  

Adjusted EBITDA(1)

   $ 62.9      $ 37.0     $ 25.9      $ 275.4      $ 205.9      $ 69.5  

 

(1)

See definition of Adjusted EBITDA and reconciliation elsewhere in this release.

Revenues increased during both the fourth quarter and full-year 2021 as compared to the same prior year periods, primarily reflecting higher volumes across both coke and logistics businesses resulting from strength in steel and coal markets as well as the absence of supply relief to certain customers in exchange for extending existing contracts during the prior year period.

Both fourth quarter and full-year 2021 Adjusted EBITDA increased as compared to the same prior year periods, primarily reflecting higher volumes discussed above.

Net income attributable to SXC for the fourth quarter and full-year 2021 both increased from the same prior year periods, driven by higher operating results discussed above as well as lower interest expense as a result of the debt refinancing completed during the second quarter of 2021. These improvements in net income attributable to SXC were partly offset by the loss on extinguishment of debt recorded in connection with the 2021 debt refinancing.

SEGMENT RESULTS

Domestic Coke

Domestic Coke consists of cokemaking facilities and heat recovery operations at our Jewell, Indiana Harbor, Haverhill, Granite City and Middletown plants.

 

     Three Months Ended
December 31,
     Years Ended December 31,  

(Dollars in millions, except per ton amounts)

   2021      2020      Increase/
(Decrease)
     2021      2020      Increase/
(Decrease)
 

Sales and other operating revenues

   $ 340.3      $ 289.6      $ 50.7      $ 1,354.5      $ 1,265.4      $ 89.1  

Adjusted EBITDA(1)

   $ 53.4      $ 43.3      $ 10.1      $ 243.4      $ 217.0      $ 26.4  

Sales Volume (in thousands of tons)

     1,026        880        146        4,183        3,789        394  

Adjusted EBITDA per ton(2)

   $ 52.05      $ 49.20      $ 2.85      $ 58.19      $ 57.27      $ 0.92  

 

(1)

See definitions of Adjusted EBITDA and reconciliation elsewhere in this release.

(2)

Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke sales volumes.

The increases in both revenue and Adjusted EBITDA for the fourth quarter and full-year 2021 as compared to the same prior year periods were driven by our return to normal production and sales volumes with the absence of the supply relief provided to our customers during the prior year periods as part of certain contract renewals. This resulted in higher volumes across the fleet, favorable energy revenues, and normalized operating and maintenance spending.

 

2


Logistics

Logistics consists of the handling and mixing services of coal and other aggregates at our Convent Marine Terminal (“CMT”), Lake Terminal, Kanawha River Terminals (“KRT”) and Dismal River Terminal (“DRT”).

 

     Three Months Ended
December 31,
     Years Ended
December 31,
 

(Dollars in millions)

   2021      2020      Increase/
(Decrease)
     2021      2020      Increase/
(Decrease)
 

Sales and other operating revenues

   $ 15.1      $ 11.7      $ 3.4      $ 64.9      $ 36.0      $ 28.9  

Intersegment sales

   $ 6.8      $ 5.3      $ 1.5      $ 27.1      $ 22.1      $ 5.0  

Adjusted EBITDA(1)

   $ 9.6      $ 6.7      $ 2.9      $ 43.5      $ 17.3      $ 26.2  

Tons handled (thousands of tons)(2)

     4,589        4,265        324        19,933        14,678        5,255  

 

(1)

See definitions of Adjusted EBITDA and reconciliation elsewhere in this release.

(2)

Reflects inbound tons handled during the period.

The increases in both revenues and Adjusted EBITDA for the fourth quarter and full-year 2021 as compared to the same prior year periods were driven by continued improvement in the export coal market, which resulted in higher throughput volumes and favorable pricing at CMT. Additionally, iron ore volumes at CMT favorably impacted the fourth quarter and full-year 2021.

Brazil Coke

Brazil Coke consists of a cokemaking facility in Vitória, Brazil, which we operate for an affiliate of ArcelorMittal.

 

     Three Months Ended
December 31,
     Years Ended
December 31,
 

(Dollars in millions)

   2021      2020      Increase/
(Decrease)
     2021      2020      Increase/
(Decrease)
 

Sales and other operating revenues

     9.9        8.8      $ 1.1        36.6        31.6      $ 5.0  

Adjusted EBITDA(1)

     4.2        3.0      $ 1.2        17.2        13.5      $ 3.7  

Brazilian Coke production—operated facility (thousands of tons)

     417        415        2        1,685        1,396        289  

 

(1)

See definitions of Adjusted EBITDA and reconciliation elsewhere in this release.

The increases in both revenues and Adjusted EBITDA for the fourth quarter and full-year 2021 as compared to the same prior year periods were driven by higher volumes as well as production bonuses for meeting certain volume targets during the current year periods.

Corporate and Other

Corporate expenses that can be identified with a segment have been included in determining segment results. The remainder is included in Corporate and Other.

 

     Three Months Ended
December 31,
     Years Ended
December 31,
 

(Dollars in millions)

   2021     2020     Increase/
(Decrease)
     2021     2020     Increase/
(Decrease)
 

Adjusted EBITDA(1)

     (4.3     (16.0   $ 11.7        (28.7     (41.9   $ 13.2  

 

(1)

See definitions of Adjusted EBITDA and reconciliation elsewhere in this release.

Corporate and other Adjusted EBITDA results improved for the fourth quarter and full-year 2021 as compared to the same prior year periods, reflecting favorable valuation adjustments as a result of changes in discount rates on certain legacy liabilities, which decreased legacy cost approximately $10.5 million and $11.3 million during the fourth quarter and full-year 2021, respectively. The current year periods also benefited from the absence of foundry related research and development costs of $1.5 million and $3.9 million during the fourth quarter and full-year 2021, respectively. These lower costs were partly offset by higher employee related expenses.

 

3


2022 OUTLOOK

Our 2022 guidance is as follows:

 

   

Domestic coke total production is expected to be approximately 4.1 million tons

 

   

Consolidated Adjusted EBITDA is expected to be $240 million to $255 million

 

   

Capital expenditures are projected to be approximately $80 million

 

   

Cash generated by operations is estimated to be between $190 million and $205 million

 

   

Cash taxes are projected to be between $8 million to $12 million

RELATED COMMUNICATIONS

We will host our quarterly earnings call at 10:30 a.m. Eastern Time (9:30 a.m. Central Time) today. The conference call will be webcast live and archived for replay in the Investors section of www.suncoke.com. Investors and analysts may participate in this call by using the following link:

https://conferencingportals.com/event/QkyupBiI

Upon registration, each participant will be emailed a confirmation and dial-in details.

SUNCOKE ENERGY, INC.

SunCoke Energy, Inc. (NYSE: SXC) supplies high-quality coke to domestic and international customers. Our coke is used in the blast furnace production of steel as well as the foundry production of casted iron, with the majority of sales under long-term, take-or-pay contracts. We also export coke to overseas customers seeking high-quality product for their blast furnaces. Our process utilizes an innovative heat-recovery technology that captures excess heat for steam or electrical power generation and draws upon more than 60 years of cokemaking experience to operate our facilities in Illinois, Indiana, Ohio, Virginia and Brazil. Our logistics business provides export and domestic material handling services to coke, coal, steel, power and other bulk customers. The logistics terminals have the collective capacity to mix and transload more than 40 million tons of material each year and are strategically located to reach Gulf Coast, East Coast, Great Lakes and international ports. To learn more about SunCoke Energy, Inc., visit our website at www.suncoke.com.

SunCoke routinely announces material information to investors and the marketplace using press releases, Securities and Exchange Commission filings, public conference calls, webcasts and SunCoke’s website at http://www.suncoke.com/English/investors/sxc. The information that SunCoke posts to its website may be deemed to be material. Accordingly, SunCoke encourages investors and others interested in SunCoke to routinely monitor and review the information that SunCoke posts on its website, in addition to following SunCoke’s press releases, Securities and Exchange Commission filings and public conference calls and webcasts.

DEFINITIONS

 

 

Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted for any impairments, (gain) loss on extinguishment of debt, restructuring costs, changes to our contingent consideration liability related to our acquisition of CMT, and/or transaction costs incurred as part of the Simplification Transaction. EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or operating income under accounting principles generally accepted in the U.S. (“GAAP”) and may not be comparable to other similarly titled measures in other businesses. Management believes Adjusted EBITDA is an important measure in assessing operating performance. Adjusted EBITDA provides useful information to investors because it highlights trends in our business that may not otherwise be apparent when relying solely on GAAP measures and because it eliminates items that have less bearing on our operating performance. EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, and they should not be considered a substitute for net income or any other measure of financial performance presented in accordance with GAAP.

 

 

Adjusted EBITDA attributable to SXC represents Adjusted EBITDA less Adjusted EBITDA attributable to noncontrolling interests.

 

4


FORWARD-LOOKING STATEMENTS

This press release and related conference call contain “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 that are not strictly historical facts, and include, among other things, statements regarding: our expectations of financial results, condition and outlook; anticipated effects of the COVID-19 pandemic and responses thereto, including the pandemic’s impact on general economic and market conditions, as well as on our business, our customers, our results of operations and financial condition; anticipated actions to be taken by management to sustain SunCoke during the economic uncertainty caused by the pandemic and related business actions; and anticipated actions by governments to contain the spread of COVID-19 or mitigate the severity thereof.

Forward-looking statements often may be identified by the use of such words as “believe,” “expect,” “plan,” “project,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “will,” “should,” or the negative of these terms, or similar expressions. Forward-looking statements are inherently uncertain and involve significant known and unknown risks and uncertainties (many of which are beyond the control of SunCoke) that could cause actual results to differ materially. Such risks and uncertainties include, but are not limited to domestic and international economic, political, business, operational, competitive, regulatory and/or market factors affecting SunCoke, as well as uncertainties related to: pending or future litigation, legislation or regulatory actions; liability for remedial actions or assessments under existing or future environmental regulations; gains and losses related to acquisition, disposition or impairment of assets; recapitalizations; access to, and costs of, capital; the effects of changes in accounting rules applicable to SunCoke; and changes in tax, environmental and other laws and regulations applicable to SunCoke’s businesses.

Currently, such risks and uncertainties also include: SunCoke’s ability to manage its business during and after the COVID-19 pandemic; the impact of the COVID-19 pandemic on SunCoke’s results of operations, revenues, earnings and cash flows; SunCoke’s ability to reduce costs and capital spending in response to the COVID-19 pandemic; SunCoke’s balance sheet and liquidity throughout and following the COVID-19 pandemic; SunCoke’s prospects for financial performance and achievement of strategic objectives following the COVID-19 pandemic; capital allocation strategy following the COVID-19-related outbreak; and the general impact on our industry and on the U.S. and global economy resulting from COVID-19, including actions by domestic and foreign governments and others to contain the spread, or mitigate the severity, thereof.

Forward-looking statements are not guarantees of future performance, but are based upon the current knowledge, beliefs and expectations of SunCoke management, and upon assumptions by SunCoke concerning future conditions, any or all of which ultimately may prove to be inaccurate. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. SunCoke does not intend, and expressly disclaims any obligation, to update or alter its forward-looking statements (or associated cautionary language), whether as a result of new information, future events or otherwise after the date of this press release except as required by applicable law.

In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, SunCoke has included in its filings with the Securities and Exchange Commission cautionary language identifying important factors (but not necessarily all the important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement made by SunCoke. For information concerning these factors and other important information regarding the matters discussed in this press release, see SunCoke’s Securities and Exchange Commission filings such as its annual and quarterly reports and current reports on Form 8-K, copies of which are available free of charge on SunCoke’s website at www.suncoke.com. All forward-looking statements included in this press release are expressly qualified in their entirety by such cautionary statements. Unpredictable or unknown factors not discussed in this release also could have material adverse effects on forward- looking statements.

 

5


SunCoke Energy, Inc.

Consolidated Statements of Operations

 

     Three Months Ended
December 31,
    Years Ended
December 31,
 
     2021      2020     2021      2020  
     (Unaudited)      (Unaudited)     (Unaudited)      (Audited)  
     (Dollars and shares in millions,
except per share amounts)
 

Revenues

          

Sales and other operating revenue

   $ 365.3      $ 310.1     $ 1,456.0      $ 1,333.0  

Costs and operating expenses

          

Cost of products sold and operating expenses

     288.9        243.0       1,118.8        1,048.2  

Selling, general and administrative expenses

     13.5        30.3       61.8        81.4  

Depreciation and amortization expense

     34.9        32.0       133.9        133.7  
  

 

 

    

 

 

   

 

 

    

 

 

 

Total costs and operating expenses

     337.3        305.3       1,314.5        1,263.3  

Operating income

     28.0        4.8       141.5        69.7  

Interest expense, net

     7.7        13.1       42.5        56.3  

(Gain) loss on extinguishment of debt, net

     —          (2.3     31.9        (5.7
  

 

 

    

 

 

   

 

 

    

 

 

 

Income (loss) before income tax expense (benefit)

     20.3        (6.0     67.1        19.1  

Income tax expense (benefit)

     6.3        (2.5     18.3        10.3  
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income (loss)

     14.0        (3.5     48.8        8.8  

Less: Net income attributable to noncontrolling interests

     1.3        1.5       5.4        5.1  
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income (loss) attributable to SunCoke Energy, Inc.

   $ 12.7      $ (5.0   $ 43.4      $ 3.7  
  

 

 

    

 

 

   

 

 

    

 

 

 

Earnings (loss) attributable to SunCoke Energy, Inc. per common share:

          

Basic

   $ 0.15      $ (0.06   $ 0.52      $ 0.04  

Diluted

   $ 0.15      $ (0.06   $ 0.52      $ 0.04  

Weighted average number of common shares outstanding:

          

Basic

     83.1        82.8       83.0        83.0  

Diluted

     84.0        82.8       83.7        83.2  

 

6


SunCoke Energy, Inc.

Consolidated Balance Sheets

 

     December 31,  
     2021     2020  
     (Unaudited)     (Audited)  
     (Dollars in millions, except par
value amounts)
 

Assets

    

Cash and cash equivalents

   $ 63.8     $ 48.4  

Receivables, net

     77.6       46.3  

Inventories

     127.0       126.6  

Income tax receivable

     —         5.5  

Other current assets

     3.5       2.9  
  

 

 

   

 

 

 

Total current assets

     271.9       229.7  
  

 

 

   

 

 

 

Properties, plants and equipment (net of accumulated depreciation of $1,160.1 million and $1,032.9 million at December 31, 2021 and 2020, respectively)

     1,287.9       1,328.0  

Intangible assets, net

     35.2       37.2  

Deferred charges and other assets

     20.4       18.5  
  

 

 

   

 

 

 

Total assets

   $ 1,615.4     $ 1,613.4  
  

 

 

   

 

 

 

Liabilities and Equity

    

Accounts payable

   $ 126.0     $ 104.1  

Accrued liabilities

     53.0       49.8  

Current portion of financing obligation

     3.2       3.0  

Interest payable

     —         2.0  
  

 

 

   

 

 

 

Total current liabilities

     182.2       158.9  
  

 

 

   

 

 

 

Long-term debt and financing obligation

     610.4       673.9  

Accrual for black lung benefits

     57.9       60.0  

Retirement benefit liabilities

     21.8       24.7  

Deferred income taxes

     169.0       159.3  

Asset retirement obligations

     11.6       11.4  

Other deferred credits and liabilities

     27.1       24.3  
  

 

 

   

 

 

 

Total liabilities

     1,080.0       1,112.5  
  

 

 

   

 

 

 

Equity

    

Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no issued shares at both December 31, 2021 and 2020

     —         —    

Common stock, $0.01 par value. Authorized 300,000,000 shares; issued 98,496,809 and 98,177,941 shares at December 31, 2021 and 2020, respectively

     1.0       1.0  

Treasury stock, 15,404,482 shares at both December 31, 2021 and 2020

     (184.0     (184.0

Additional paid-in capital

     721.2       715.7  

Accumulated other comprehensive loss

     (16.7     (17.1

Retained deficit

     (23.4     (46.6
  

 

 

   

 

 

 

Total SunCoke Energy, Inc. stockholders’ equity

     498.1       469.0  

Noncontrolling interests

     37.3       31.9  
  

 

 

   

 

 

 

Total equity

     535.4       500.9  
  

 

 

   

 

 

 

Total liabilities and equity

   $ 1,615.4     $ 1,613.4  
  

 

 

   

 

 

 

 

7


SunCoke Energy, Inc.

Consolidated Statements of Cash Flows

 

     Years Ended December 31,  
     2021     2020  
     (Unaudited)     (Audited)  
     (Dollars in millions)  

Cash Flows from Operating Activities:

    

Net income

   $ 48.8     $ 8.8  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation and amortization expense

     133.9       133.7  

Deferred income tax expense

     9.3       12.1  

Share-based compensation expense

     6.1       3.8  

Loss (gain) on extinguishment of debt, net

     31.9       (5.7

Changes in working capital pertaining to operating activities:

    

Receivables, net

     (31.3     13.2  

Inventories

     (1.1     21.8  

Accounts payable

     29.5       (38.0

Accrued liabilities

     2.8       2.5  

Interest payable

     (2.0     (0.2

Income taxes

     5.5       (3.3

Other

     (0.3     9.1  
  

 

 

   

 

 

 

Net cash provided by operating activities

     233.1       157.8  
  

 

 

   

 

 

 

Cash Flows from Investing Activities:

    

Capital expenditures

     (98.6     (73.9

Other investing activities

     (0.7     (1.4
  

 

 

   

 

 

 

Net cash used in investing activities

     (99.3     (75.3
  

 

 

   

 

 

 

Cash Flows from Financing Activities:

    

Proceeds from issuance of long-term debt

     500.0       —    

Repayment of long-term debt

     (609.3     (55.9

Proceeds from revolving facility

     690.1       629.9  

Repayment of revolving facility

     (663.4     (684.9

Proceeds from financing obligation

     —         10.0  

Repayment of financing obligation

     (2.9     (3.0

Debt issuance costs

     (12.0     —    

Dividends paid

     (20.1     (19.9

Shares repurchased

     —         (7.0

Other financing activities

     (0.8     (0.4
  

 

 

   

 

 

 

Net cash used in financing activities

     (118.4     (131.2
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     15.4       (48.7

Cash and cash equivalents at beginning of year

     48.4       97.1  
  

 

 

   

 

 

 

Cash and cash equivalents at end of year

   $ 63.8     $ 48.4  
  

 

 

   

 

 

 

Supplemental Disclosure of Cash Flow Information

    

Interest paid, net of capitalized interest of $0.5 million and $0.2 million, respectively

   $ 40.0     $ 51.8  

Income taxes paid, net of refunds of $2.9 million and $3.0 million, respectively

   $ 2.9     $ 1.1  

 

8


SunCoke Energy, Inc.

Segment Operating Data

 

     Three Months Ended
December 31,
    Years Ended
December 31,
 
     2021     2020     2021     2020  
     (Unaudited)     (Unaudited)     Unaudited)     (Audited)  
     (Dollars in millions)  

Sales and other operating revenues:

        

Domestic Coke

   $ 340.3     $ 289.6     $ 1,354.5     $ 1,265.4  

Brazil Coke

     9.9       8.8       36.6       31.6  

Logistics

     15.1       11.7       64.9       36.0  

Logistics intersegment sales

     6.8       5.3       27.1       22.1  

Elimination of intersegment sales

     (6.8     (5.3     (27.1     (22.1
  

 

 

   

 

 

   

 

 

   

 

 

 

Total sales and other operating revenue

   $ 365.3     $ 310.1     $ 1,456.0     $ 1,333.0  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA(1)

        

Domestic Coke

   $ 53.4     $ 43.3     $ 243.4     $ 217.0  

Brazil Coke

     4.2       3.0       17.2       13.5  

Logistics

     9.6       6.7       43.5       17.3  

Corporate and Other(2)

     (4.3     (16.0     (28.7     (41.9
  

 

 

   

 

 

   

 

 

   

 

 

 

Total Adjusted EBITDA

   $ 62.9     $ 37.0     $ 275.4     $ 205.9  
  

 

 

   

 

 

   

 

 

   

 

 

 

Coke Operating Data:

        

Domestic Coke capacity utilization (%)

     100     85     101     91

Domestic Coke production volumes (thousands of tons)

     1,031       907       4,162       3,840  

Domestic Coke sales volumes (thousands of tons)

     1,026       880       4,183       3,789  

Domestic Coke Adjusted EBITDA per ton(3)

   $ 52.05     $ 49.20     $ 58.19     $ 57.27  

Brazilian Coke production—operated facility (thousands of tons)

     417       415       1,685       1,396  

Logistics Operating Data:

        

Tons handled (thousands of tons)(4)

     4,589       4,265       19,933       14,678  

 

(1)

See definition of Adjusted EBITDA and reconciliation to GAAP elsewhere in this release.

(2)

Corporate and Other includes the activity from our legacy coal mining business, which included an Adjusted EBITDA gain of $3.1 million and Adjusted EBITDA loss of $1.9 million during the three and twelve months ended December 31, 2021, respectively, as well as Adjusted EBITDA losses of $7.4 million and $13.2 million during the three and twelve months ended December 31, 2020, respectively. Additionally, Corporate and Other includes foundry related research and development costs of $1.5 million and $3.9 million during the three and twelve months ended December 31, 2020, respectively.

(3)

Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke sales volumes.

(4)

Reflects inbound tons handled during the period.

 

9


SunCoke Energy, Inc.

Reconciliation of Non-GAAP Information

Adjusted Net Income (Loss) to Adjusted EBITDA

 

     Three Months Ended
December 31,
    Years Ended
December 31,
 
     2021      2020     2021      2020  
     (Unaudited)      (Unaudited)     (Unaudited)      (Audited)  
     (Dollars in millions)  

Net income (loss) attributable to SunCoke Energy, Inc.

   $ 12.7      $ (5.0   $ 43.4      $ 3.7  

Add: Net income attributable to noncontrolling interests

     1.3        1.5       5.4        5.1  
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income (loss)

   $ 14.0      $ (3.5   $ 48.8      $ 8.8  
  

 

 

    

 

 

   

 

 

    

 

 

 

Add:

          

Depreciation and amortization expense

     34.9        32.0       133.9        133.7  

Interest expense, net

     7.7        13.1       42.5        56.3  

(Gain) loss on extinguishment of debt, net

     —          (2.3     31.9        (5.7

Income tax expense (benefit)

     6.3        (2.5     18.3        10.3  

Restructuring costs(1)

     —          0.2       —          2.5  
  

 

 

    

 

 

   

 

 

    

 

 

 

Adjusted EBITDA

   $ 62.9      $ 37.0     $ 275.4      $ 205.9  
  

 

 

    

 

 

   

 

 

    

 

 

 

Subtract: Adjusted EBITDA attributable to noncontrolling interest(2)

     2.3        2.5       9.3        9.1  

Adjusted EBITDA attributable to SunCoke Energy, Inc.

   $ 60.6      $ 34.5     $ 266.1      $ 196.8  
  

 

 

    

 

 

   

 

 

    

 

 

 

 

(1)

Charges related to a company-wide restructuring and cost-reduction initiative.

(2)

Reflects noncontrolling interests in Indiana Harbor.

SunCoke Energy, Inc

Reconciliation of Non-GAAP Information

Estimated 2021 Consolidated Adjusted EBITDA to Estimated Net Income

 

     2022  
  

 

 

 
     Low     High  
  

 

 

   

 

 

 

Net income

   $ 50     $ 65  
  

 

 

   

 

 

 

Add:

    

Depreciation and amortization expense

   $ 141     $ 137  

Interest expense, net

   $ 31     $ 29  

Income tax expense

   $ 18     $ 24  
  

 

 

   

 

 

 

Adjusted EBITDA

   $ 240     $ 255  
  

 

 

   

 

 

 

Subtract: Adjusted EBITDA attributable to noncontrolling interest(1)

   $ (9   $ (9
  

 

 

   

 

 

 

Adjusted EBITDA attributable to SunCoke Energy, Inc.

   $ 231     $ 246  
  

 

 

   

 

 

 

 

(1)

Reflects noncontrolling interests in Indiana Harbor.

 

10

Slide 1

SunCoke Energy, Inc. Q4 & FY 2021 Earnings and 2022 Guidance Conference Call Exhibit 99.2


Slide 2

This slide presentation should be reviewed in conjunction with the Fourth Quarter and Full-Year 2021 earnings release of SunCoke Energy, Inc. (SunCoke) and conference call held on February 1, 2022 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 include statements that are not strictly historical facts, and include, among other things, statements regarding: our expectations of financial results, condition and outlook; anticipated effects of the COVID-19 pandemic and responses thereto, including the pandemic’s impact on general economic and market conditions, as well as on our business, our customers, our results of operations and financial condition; anticipated actions to be taken by management to sustain SunCoke during the economic uncertainty caused by the pandemic and related business actions; and anticipated actions by governments to contain the spread of COVID-19 or mitigate the severity thereof. Forward-looking statements often may be identified by the use of such words as "believe," "expect," "plan," "project," "intend," "anticipate," "estimate," "predict," "potential," "continue," "may," "will," "should," or the negative of these terms, or similar expressions. Forward-looking statements are inherently uncertain and involve significant known and unknown risks and uncertainties (many of which are beyond the control of SunCoke) that could cause actual results to differ materially. Such risks and uncertainties include, but are not limited to domestic and international economic, political, business, operational, competitive, regulatory and/or market factors affecting SunCoke, as well as uncertainties related to: pending or future litigation, legislation or regulatory actions; liability for remedial actions or assessments under existing or future environmental regulations; gains and losses related to acquisition, disposition or impairment of assets; recapitalizations; access to, and costs of, capital; the effects of changes in accounting rules applicable to SunCoke; and changes in tax, environmental and other laws and regulations applicable to SunCoke's businesses. Currently, such risks and uncertainties also include: SunCoke’s ability to manage its business during and after the COVID-19 pandemic; the impact of the COVID-19 pandemic on SunCoke’s results of operations, revenues, earnings and cash flows; SunCoke’s ability to reduce costs and capital spending in response to the COVID-19 pandemic; SunCoke’s balance sheet and liquidity throughout and following the COVID-19 pandemic; SunCoke’s prospects for financial performance and achievement of strategic objectives following the COVID-19 pandemic; capital allocation strategy following the COVID-19 pandemic; and the general impact on our industry and on the U.S. and global economy resulting from COVID-19, including actions by domestic and foreign governments and others to contain the spread, or mitigate the severity, thereof. Forward-looking statements are not guarantees of future performance, but are based upon the current knowledge, beliefs and expectations of SunCoke management, and upon assumptions by SunCoke concerning future conditions, any or all of which ultimately may prove to be inaccurate. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of the earnings release. SunCoke does not intend, and expressly disclaims any obligation, to update or alter its forward-looking statements (or associated cautionary language), whether as a result of new information, future events or otherwise after the date of the earnings release except as required by applicable law. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, SunCoke has included in its filings with the Securities and Exchange Commission cautionary language identifying important factors (but not necessarily all the important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement made by SunCoke. For information concerning these factors and other important information regarding the matters discussed in this presentation, see SunCoke's Securities and Exchange Commission filings such as its annual and quarterly reports and current reports on Form 8-K, copies of which are available free of charge on SunCoke's website at www.suncoke.com. All forward-looking statements included in this presentation are expressly qualified in their entirety by such cautionary statements. Unpredictable or unknown factors not discussed in this presentation also could have material adverse effects on forward- looking statements. Forward-Looking Statements


Slide 3

2021 Year In Review Delivered FY 2021 results above revised guidance; Successfully entered new coke markets; Significantly reduced interest expense and extended debt maturities FY 2021 Objective 2021 Achievements Commentary Deliver FY 2021 Consolidated Adj. EBITDA(1) modestly above $255M – $265M revised guidance Generate $80M – $100M Free Cash Flow (2) Further Stabilize and Strengthen SunCoke’s Capital Structure Lowered gross debt by $63.5M ; Gross leverage ratio at 2.3x (LTM basis) Executed debt refinancing Delivered FY 2021 consolidated Adj. EBITDA of $275.4M Generated ~$101M of Free Cash Flow Highest Adj. EBITDA in Company’s history Exceeded revised guidance due to excellent domestic coke performance as well as higher volumes and a new product at CMT Extended notes maturity by 4 years and revolver maturity by 2 years; Achieved annual interest rate savings of approximately $17M from debt refinancing Anticipate continuation of quarterly dividend See appendix for a definition and reconciliation of Adjusted EBITDA See appendix for a definition and reconciliation of Free Cash Flow Support Full Capacity Utilization via Export and Foundry Sales Domestic coke fleet operated at full capacity Successfully entered and participated in foundry and export coke markets Successfully executed on our contracted coke sales Signed a five year take-or-pay furnace coke contract with Algoma Steel; Average sales volume of 150k per year Developed strong customer relationships in both foundry and export coke markets during the first year of entering these new markets Expect to further increase foundry and export coke market participation in 2022


Slide 4

Q4 & FY 2021 Financial Performance See appendix for a definition and reconciliation of Adjusted EBITDA Coke Adjusted EBITDA includes Domestic Coke and Brazil Coke ($/share) ($ in millions) Diluted EPS Adj. EBITDA(1) Q4 and FY 2021 Earnings Review Q4 ‘21 EPS of $0.15 per share, up $0.21 per share from the prior year quarter Driven by absence of supply relief provided to certain customers in the prior year period FY’21 EPS of $0.52, up $0.48 per share from the prior year period Driven by strong operating results and lower interest expense, partially offset by debt refinancing related expenses Q4 ’21 Consolidated Adj. EBITDA(1) of $62.9M, up $25.9M compared to Q4 ‘ 20 Coke operations up $11.3M driven by higher volumes due to absence of turn-down and higher price realizations Corporate and other costs lower by $11.7M mainly driven by favorable legacy liability expense (non-cash) FY ’21 Consolidated Adj. EBITDA(1) of $275.4M, up $69.5M compared to FY’20 Driven by higher price/volume across coke and logistics businesses as well as lower legacy liability expenses (non-cash) at corporate


Slide 5

Adjusted EBITDA(1) – FY ‘20 to FY ‘21 See appendix for a definition and reconciliation of Adjusted EBITDA (1) Higher volumes due to absence of customer relief in exchange for contract extensions Higher price realization from success in export and foundry markets Higher throughput volumes, higher prices and new product at CMT ($ in millions) (1) FY ‘21 performance driven by higher price/volume across coke and logistics businesses as well as lower legacy liability expenses (non-cash) at corporate Lower legacy liability expense (non-cash) , absence of foundry related R&D costs partially offset by higher employee related expenses


Slide 6

Revolver Availability: $228.8M 12/31/2020 12/31/2021 Total Debt $691M $627M Gross Leverage 3.35x 2.28x FY 2021 Capital Deployment Strong cash flow generation deployed strategically towards operational capital needs, deleveraging, and dividends to shareholders ($ in millions) Pulled forward some capital work to manage labor availability and supply chain issues


Slide 7

2022 GUIDANCE


Slide 8

Projected 2022 Adjusted EBITDA Guidance $240 - $255 ($8) – ($14) ($2) – ($3) ($4) – ($10) ($6) – ($8) See appendix for a definition and reconciliation of Adjusted EBITDA (1) ($ in millions) Expect 2022 consolidated Adjusted EBITDA (1) of $240M - $255M mainly driven by lower price realizations at Coke and Logistics businesses and normalized legacy liability expense (non-cash) Running at full capacity but lower price realization on export sales Higher commodity risk with greater volume in export market Similar volumes year over year but lower price realization at CMT Normalized high water cost at CMT Normalized legacy liability expense (non-cash) Higher IT and insurance costs Lower volumes due to required capital rebuilds (1)


Slide 9

2022 Domestic Coke Business Outlook Domestic Coke Adj. EBITDA estimated to be $229M - $235M; Expect to run at full capacity; Grow market share in foundry and growing export business Domestic Coke Performance $217M 3,789Kt $229M - $235M ~Kt Kt $243M Continue to run coke fleet at full capacity ~3,550Kt contracted furnace coke tons Remaining ~700Kt equivalent furnace coke tons to be sold in foundry/export markets Q1 export coke sales finalized Lower price realization assumption on export sales Higher commodity risk with greater volume sold in the export market FY 2021 and FY 2022E estimated Domestic Coke sales includes coke produced for export and foundry sales See appendix for a definition and reconciliation of Adjusted EBITDA (2) (1) (1)


Slide 10

2022 Logistics Business Outlook Logistics Adjusted EBITDA guidance of $34M - $40M; Anticipate similar volumes across the Logistics segment year over year Logistics Performance 8,500 - 10,500 $34M - $40M ~10,200 18,700 - 20,700 2022 outlook based on current expectations for thermal coal export volume and price Anticipate CMT to handle 5.5Mt – 7.0Mt coal for export and 3.0Mt – 3.5Mt other products (iron ore, petcoke, aggregates, etc.) CMT Price kicker benefit (based on API2 price index) expected to be lower in 2022 as compared to previous year 2021 was exceptional year with no high-water cost; 2022 assumed to be a more normalized year FY 2022E (Tons Handled, Kt) (1) See appendix for a definition and reconciliation of Adjusted EBITDA


Slide 11

2022 Guidance Summary Expected 2022 Adjusted EBITDA of $240M - $255M; 2022 Free Cash Flow of $110M - $125M See appendix for a definition and reconciliation of Adjusted EBITDA Domestic coke sales for 2021 and 2022 estimate includes production for foundry and export sales Domestic Coke Adj. EBITDA/ton calculated as Domestic Coke EBITDA/Domestic Coke Sales Capital expenditure guidance excludes the impact of capitalized interest See appendix for a definition and reconciliation of Free Cash Flow (FCF) See appendix for definition and reconciliation of Adjusted EBITDA See appendix for definition and reconciliation of Free Cash Flow (FCF)


Slide 12

Further strengthen customer relationships and grow market share for long term success Support full capacity utilization of cokemaking assets Build on the Commercial Success of Foundry/Export Business 2022 Key Initiatives $240M - $255M Adjusted EBITDA Achieve 2022 Financial Objectives Deliver Safety/Operational Excellence and Combat Inflationary Pressures Continue to deliver strong safety and operational excellence Continued focus on developing projects to minimize inflationary impacts Continue work on further diversifying CMT with new product and customer mix Pursue New Customers for Logistics Business Continue to execute against our well-established capital allocation priorities of deleveraging, exploring growth opportunities and returning capital to shareholders Pursue Balanced Capital Allocation


Slide 13

APPENDIX


Slide 14

Domestic Coke Performance Domestic Coke Business Summary /ton /ton /ton /ton /ton Sales Tons (Coke Production, Kt) See appendix for a definition and reconciliation of Adjusted EBITDA and Adjusted EBITDA per ton 1,063K 880K Achieved FY ’21 Domestic Coke Adjusted EBITDA above the revised guidance range driven by full capacity utilization as well as strong performance in export and foundry markets 1,038K (1) 1,056K /ton /ton $56-$57/ton 1,026K 3,789K 4,183K ~4,100K


Slide 15

$6.7M $10.9M $11.4M Logistics Business Summary 4,589 (Tons Handled, Kt) See appendix for a definition and reconciliation of Adjusted EBITDA. FY ’21 Logistics Adjusted EBITDA strong results driven by strong volume/price as well as minimal high water costs at CMT Logistics Performance 8,500 – 10,500 M M $34M - $40M ~ 18,700 – 20,700 (1)


Slide 16

Adjusted EBITDA represents earnings before interest, loss (gain) on extinguishment of debt, taxes, depreciation and amortization (“EBITDA”), adjusted for impairments, loss on extinguishment of debt, restructuring costs, changes to our contingent consideration liability related to our acquisition of CMT, and/or transaction costs incurred as part of the Simplification Transaction. EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or operating income under GAAP and may not be comparable to other similarly titled measures in other businesses. Management believes Adjusted EBITDA is an important measure in assessing operating performance. Adjusted EBITDA provides useful information to investors because it highlights trends in our business that may not otherwise be apparent when relying solely on GAAP measures and because it eliminates items that have less bearing on our operating performance. EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, and they should not be considered a substitute for net income or any other measure of financial performance presented in accordance with GAAP. EBITDA represents earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA attributable to SXC represents Adjusted EBITDA less Adjusted EBITDA attributable to non-controlling interests. Adjusted EBITDA/Ton represents Adjusted EBITDA divided by tons sold/handled. Free Cash Flow (FCF) represents operating cash flow adjusted for capital expenditures. Management believes FCF is an important measure of liquidity. FCF is not a measure calculated in accordance with GAAP, and it should not be considered a substitute for operating cash flow or any other measure of financial performance presented in accordance with GAAP. Definitions


Slide 17

Coke Facility Capacity and Contract Duration/Volume Capacity represents blast furnace equivalent production capacity Represents production capacity for blast-furnace sized coke, however, customer takes all on a “run of oven” basis, which represents >600k tons per year.


Slide 18

Balance Sheet & Debt Metrics


Slide 19

2022 Guidance Reconciliation Reflects non-controlling interest in Indiana Harbor Free Cash Flow Reconciliation


Slide 20

SXC FCF/Share Reconciliation


Slide 21

Reconciliation to Adjusted EBITDA and Adjusted EBITDA attributable to SXC Charges related to a company-wide restructuring and cost-reduction initiative Reflects non-controlling interests in Indiana Harbor and the portion of the Partnership owned by public unitholders prior to the closing of the Simplification Transaction


Slide 22

Adjusted EBITDA and Adjusted EBITDA per ton (1) Corporate and Other includes the results of our legacy coal mining business.


Slide 23

Exhibit 99.3

 

LOGO

Investors and Media:

Shantanu Agrawal: 630-824-1907

SUNCOKE ENERGY, INC. DECLARES CASH DIVIDEND

Lisle, IL (February 1, 2022) – Today, SunCoke Energy, Inc. (NYSE: SXC) announced that its Board of Directors declared a cash dividend of $0.06 per share of the Company’s common stock to be paid March 1, 2022 to stockholders of record at the close of business on February 17, 2022.

ABOUT SUNCOKE ENERGY, INC.

SunCoke Energy, Inc. (NYSE: SXC) supplies high-quality coke to domestic and international customers. Our coke is used in the blast furnace production of steel as well as the foundry production of casted iron, with the majority of sales under long-term, take-or-pay contracts. We also export coke to overseas customers seeking high-quality product for their blast furnaces. Our process utilizes an innovative heat-recovery technology that captures excess heat for steam or electrical power generation and draws upon more than 60 years of cokemaking experience to operate our facilities in Illinois, Indiana, Ohio, Virginia and Brazil. Our logistics business provides export and domestic material handling services to coke, coal, steel, power and other bulk customers. The logistics terminals have the collective capacity to mix and transload more than 40 million tons of material each year and are strategically located to reach Gulf Coast, East Coast, Great Lakes and international ports. To learn more about SunCoke Energy, Inc., visit our website at www.suncoke.com.

# # #