- Net income attributable to SXCP
increased $1.8 million to $21.3 million
- Adjusted EBITDA attributable to SXCP,
which excludes $8.8 million of coal logistics deferred revenue, was
$44.8 million, which is in line with expectations, but down $4.0
million versus the prior year period
- Strong Distributable Cash Flow and
Distribution Cash Coverage Ratio of $35.5 million and 1.20x,
respectively
- Declared quarterly distribution of
$0.5940 per unit; reduced debt outstanding by $4 million in the
quarter
- Reaffirm full-year outlook for 2016
Adjusted EBITDA attributable to SXCP of $207 million to $217
million
SunCoke Energy Partners, L.P. (NYSE: SXCP) today reported
results for the third quarter 2016, which reflect the impact of
scheduled outages and lower sales volumes, partially offset by the
absence of deal costs, which were incurred in the prior year
period.
"We continue to perform in line with expectations and remain on
track to deliver against our 2016 Adjusted EBITDA guidance of $207
million to $217 million underpinned by our strong cokemaking
performance," said Fritz Henderson, Chairman, President and Chief
Executive Officer of SunCoke Energy Partners, L.P.
During the quarter, both major Convent Marine Terminal ("CMT")
customers reached resolution with their respective lending groups.
In addition, as announced earlier this week, Convent is expanding
into a new line of business by piloting domestic-facing thermal
coal volumes through the terminal on a merchant basis.
Henderson continued, "We applaud the milestones our CMT
customers reached with their lenders and are working side-by-side
with them to maximize the value our terminal can bring to their
operations. We are also quite pleased about the domestic thermal
coal pilot we announced earlier this week and look forward to
proving out our domestic-facing capability with the goal of
securing additional merchant volumes."
THIRD QUARTER RESULTS(1)
Three Months Ended September 30,
(Dollars in
millions)
2016 2015
Increase/(Decrease) Revenues $ 185.5 $ 210.2
$ (24.7 ) Net income attributable to SXCP $ 21.3 $
19.5 $ 1.8 Adjusted EBITDA(2) $ 45.7
$ 50.7 $ (5.0 ) (1) The current
and prior year periods are not comparable due to the contribution
of Convent Marine Terminal, which was acquired on August 12, 2015.
(2) See definition of Adjusted EBITDA and reconciliation elsewhere
in this release.
Revenues were $185.5 million in third quarter 2016, a decline of
$24.7 million from the same prior year period. The decline was
primarily due to the pass-through of lower coal costs and lower
sales volumes.
Net income attributable to SXCP was $21.3 million, an increase
of $1.8 million compared to the prior year period, primarily due to
fair value adjustments to our contingent consideration obligation,
mostly offset by the items discussed below.
Adjusted EBITDA decreased $5.0 million primarily due the impact
of scheduled outages in the current year period as well as lower
sales volumes in both our cokemaking and logistics operations. As a
reminder, Adjusted EBITDA results exclude coal logistics deferred
revenue until it is recognized as GAAP revenue, which is at the end
of the annual contract period, or typically in the fourth quarter
of each year.
THIRD QUARTER SEGMENT INFORMATION
Domestic Coke
Domestic Coke consists of cokemaking facilities and heat
recovery operations at our Haverhill, Middletown and Granite City
cokemaking facilities, located in Franklin Furnace and Middletown,
Ohio, and Granite City, Illinois, respectively.
Three Months Ended September 30,
(Dollars in
millions, except per ton amounts)
2016 2015
Increase/(Decrease) Revenues $ 170.8 $ 192.4
$ (21.6 ) Adjusted EBITDA(1) $ 42.9 $ 46.6 $ (3.7 )
Sales Volume (thousands of tons) 595 615 (20 ) Adjusted EBITDA per
ton(2) $ 72.10 $ 75.77
$ (3.67 ) (1) See definition of Adjusted
EBITDA and reconciliation elsewhere in this release. (2) Reflects
Domestic Coke Adjusted EBITDA divided by Domestic Coke sales
volumes.
- Revenues were affected by the
pass-through of lower coal prices and a decrease in sales volume of
20 thousand tons due partially to the customer volume
accommodations at Haverhill. The impact of customer volume
accommodations on Adjusted EBITDA was mitigated by make-whole
payments from AK Steel.
- Adjusted EBITDA decreased $3.7 million
to $42.9 million in third quarter 2016, primarily due lower energy
sales related to scheduled outages as well as the timing of sales
volumes.
Coal Logistics
Coal Logistics consists of the coal handling and mixing services
operated by SXCP at CMT located on the Mississippi river in
Louisiana, Lake Terminal in East Chicago, Indiana, and Kanawha
River Terminals, LLC ("KRT"), which has terminals along the Ohio
and Kanawha rivers in West Virginia. The current and prior year
periods are not comparable due to the contribution of CMT, which
was acquired on August 12, 2015.
Three Months Ended September 30,
(Dollars in
millions, except per ton amounts)
2016 2015
Increase/(Decrease) Revenues $ 14.7 $ 17.8
$ (3.1 ) Intersegment sales $ 1.5 $ 1.7 $ (0.2 )
Adjusted EBITDA(1) $ 7.0 $ 9.3 $ (2.3 ) Tons handled, excluding CMT
(thousands of tons)(2) 3,214 4,332 (1,118 ) Tons handled by CMT
(thousands of tons)(2) 841 817
24 (1) See definition of
Adjusted EBITDA and reconciliation elsewhere in this release. (2)
Reflects inbound tons handled during the period.
- Revenues were down $3.1 million, driven
by lower volumes at KRT and Lake Terminal, partly offset by a full
quarter of CMT results, which contributed $1.3 million in
additional revenues as compared to the prior year period.
- Adjusted EBITDA was down $2.3 million,
driven by lower sales volumes discussed above. Despite a full
quarter of operations, Adjusted EBITDA contributed by CMT was flat
as compared to the prior year, driven by a full quarter of
operating costs on only slightly higher volumes. As a reminder,
Adjusted EBITDA results exclude coal logistics deferred revenue
until it is recognized as GAAP revenue, which is at the end of the
annual contract period, or typically in the fourth quarter of each
year.
Corporate and Other
Corporate and other costs decreased $1.0 million to $4.2 million
for the three months ended September 30, 2016 compared to $5.2
million in the same period of 2015, primarily due to acquisition
and business development costs incurred in the prior year period,
partially offset by current period mark-to-market adjustments in
deferred compensation caused by increases in the Partnership's unit
price and higher legal expense.
RELATED COMMUNICATIONS
We will host our quarterly earnings call at 10:00 a.m.
Eastern Time (9:00 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 may participate in this
call by dialing 1-866-393-4306 in the U.S. or 1-617-826-1698 if
outside the U.S., confirmation code 89771946.
SUNCOKE ENERGY PARTNERS, L.P.
SunCoke Energy Partners, L.P. (NYSE: SXCP) is a publicly traded
master limited partnership that manufactures high-quality coke used
in the blast furnace production of steel and provides export and
domestic coal handling services to the coke, coal, steel and power
industries. In our cokemaking business, we utilize an innovative
heat-recovery technology that captures excess heat for steam or
electrical power generation and have long-term, take-or-pay coke
contracts that pass through commodity and certain operating costs.
Our coal handling terminals have the collective capacity to blend
and transload more than 35 million tons of coal each year and are
strategically located to reach Gulf Coast, East Coast, Great Lakes
and international ports. SXCP’s General Partner is a wholly owned
subsidiary of SunCoke Energy, Inc. (NYSE: SXC), which has more than
50 years of cokemaking experience serving the integrated steel
industry. To learn more about SunCoke Energy Partners, L.P., visit
our website at www.suncoke.com.
DEFINITIONS
- Adjusted
EBITDA represents earnings before interest, (gain) loss
on extinguishment of debt, taxes, depreciation and amortization,
adjusted for Coal Logistics changes to our contingent consideration
liability related to our acquisition of the CMT and the expiration
of certain acquired contractual obligations. Adjusted EBITDA does
not represent and should not be considered an alternative 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 of the operating
performance and liquidity of the Partnership's net assets and its
ability to incur and service debt, fund capital expenditures and
make distributions. 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 and liquidity. EBITDA and Adjusted EBITDA are not
measures calculated in accordance with GAAP, and they should not be
considered an alternative to net income, operating cash flow or any
other measure of financial performance presented in accordance with
GAAP.
- Adjusted
EBITDA attributable to SXCP equals Adjusted EBITDA less
Adjusted EBITDA attributable to noncontrolling interests.
- Distributable
Cash Flow equals Adjusted EBITDA plus sponsor support
and Coal Logistics deferred revenue; less net cash paid for
interest expense, ongoing capital expenditures, accruals for
replacement capital expenditures and cash distributions to
noncontrolling interests; plus amounts received under the Omnibus
Agreement and acquisition expenses deemed to be Expansion Capital
under our Partnership Agreement. Distributable Cash Flow is a
non-GAAP supplemental financial measure that management and
external users of SXCP's financial statements, such as industry
analysts, investors, lenders and rating agencies use to assess:
- SXCP's operating performance as
compared to other publicly traded partnerships, without regard to
historical cost basis;
- the ability of SXCP's assets to
generate sufficient cash flow to make distributions to SXCP's
unitholders;
- SXCP's ability to incur and service
debt and fund capital expenditures; and
- the viability of acquisitions and other
capital expenditure projects and the returns on investment of
various investment opportunities.
We believe that Distributable Cash Flow
provides useful information to investors in assessing SXCP's
financial condition and results of operations. Distributable Cash
Flow should not be considered an alternative to net income,
operating income, cash flows from operating activities, or any
other measure of financial performance or liquidity presented in
accordance with GAAP. Distributable Cash Flow has important
limitations as an analytical tool because it excludes some, but not
all, items that affect net income and net cash provided by
operating activities and used in investing activities.
Additionally, because Distributable Cash Flow may be defined
differently by other companies in the industry, our definition of
Distributable Cash Flow may not be comparable to similarly titled
measures of other companies, thereby diminishing its utility.
- Ongoing
capital expenditures (“capex”) are capital expenditures
made to maintain the existing operating capacity of our assets
and/or to extend their useful lives. Ongoing capex also includes
new equipment that improves the efficiency, reliability or
effectiveness of existing assets. Ongoing capex does not include
normal repairs and maintenance, which are expensed as incurred, or
significant capital expenditures. For purposes of calculating
distributable cash flow, the portion of ongoing capex attributable
to SXCP is used and includes capital expenditures included in
working capital at the end of the period.
- Replacement
capital expenditures (“capex”) represents an annual
accrual necessary to fund SXCP’s share of the estimated costs to
replace or rebuild our facilities at the end of their working
lives. This accrual is estimated based on the average quarterly
anticipated replacement capital that we expect to incur over the
long term to replace our major capital assets at the end of their
working lives. The replacement capex accrual estimate will be
subject to review and prospective change by SXCP’s general partner
at least annually and whenever an event occurs that causes a
material adjustment of replacement capex, provided such change is
approved by our conflicts committee.
FORWARD-LOOKING STATEMENTS
Some of the statements included in this press release constitute
“forward-looking statements.” Forward-looking statements include
all statements that are not historical facts and 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 SXCP) 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 SXCP, 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 SXCP; and changes in tax, environmental and other
laws and regulations applicable to SXCP’s businesses.
Forward-looking statements are not guarantees of future
performance, but are based upon the current knowledge, beliefs and
expectations of SXCP management, and upon assumptions by SXCP
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. SXCP 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.
SXCP 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 SXCP. For information
concerning these factors, see SXCP’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 SXCP’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.
SunCoke Energy Partners, L.P. Combined and
Consolidated Statements of Income (Unaudited)
Three Months Ended Nine
Months Ended September 30, September 30,
2016 2015 2016 2015
(Dollars and units in millions) Revenues Sales
and other operating revenue $ 185.5 $ 210.2 $ 561.4
$ 621.1
Costs and operating expenses Cost of
products sold and operating expenses 125.5 149.7 388.3 452.7
Selling, general and administrative expenses 9.0 9.8 28.5 24.7
Depreciation and amortization expense 18.1 17.0 57.3
47.0 Total costs and operating expenses 152.6
176.5 474.1 524.4
Operating income 32.9
33.7 87.3 96.7 Interest expense, net 11.5 12.4 35.7 34.4 (Gain)
loss on extinguishment of debt (1.0 ) — (24.9 ) 9.4
Income before income tax expense (benefit) 22.4 21.3 76.5 52.9
Income tax expense (benefit) 0.4 0.5 1.4 (2.4
)
Net income 22.0 20.8 75.1 55.3 Less: Net income
attributable to noncontrolling interests 0.7 1.3 1.9
5.6
Net income attributable to SunCoke Energy
Partners, L.P./Previous Owner $ 21.3 $ 19.5 $
73.2 $ 49.7 Less: Net income attributable to Previous
Owner — — — 0.6
Net income
attributable to SunCoke Energy Partners, L.P. $ 21.3 $
19.5 $ 73.2 $ 49.1 General partner's
interest in net income $ 1.8 $ 1.9 $ 13.6 $ 5.1 Limited partners'
interest in net income $ 19.5 $ 17.6 $ 59.6 $ 44.6 Net income per
common unit (basic and diluted) $ 0.42 $ 0.43 $ 1.29 $ 1.16 Net
income per subordinated unit (basic and diluted) $ — $ 0.38 $ — $
1.00 Weighted average common units outstanding (basic and diluted)
46.2 27.4 46.2 24.8 Weighted average subordinated units outstanding
(basic and diluted) — 15.7 — 15.7
SunCoke Energy
Partners, L.P. Combined and Consolidated Balance Sheets
September 30, 2016
December 31, 2015 (Unaudited) (Dollars in
millions) Assets Cash and cash equivalents $ 46.1 $ 48.6
Receivables 37.9 40.0 Receivables from affiliates, net — 1.4
Inventories 67.9 77.1 Other current assets 2.2 2.0 Total
current assets 154.1 169.1 Restricted cash 0.7 17.7
Properties, plants and equipment (net of accumulated depreciation
of $338.0 million and $291.1 million at September 30, 2016 and
December 31, 2015, respectively) 1,304.8 1,326.5 Goodwill 73.5 67.7
Other intangible assets, net 179.4 187.4 Deferred charges and other
assets — 0.5 Total assets $ 1,712.5 $ 1,768.9
Liabilities and Equity Accounts payable $ 49.2 $ 45.3
Accrued liabilities 12.0 10.8 Deferred revenue 27.6 2.1 Payable to
affiliate, net 6.2 — Current portion of long-term debt and
financing obligation 3.6 1.1 Interest payable 6.3 17.5 Total
current liabilities 104.9 76.8 Long-term debt and financing
obligation 817.6 894.5 Deferred income taxes 38.2 38.0 Asset
retirement obligations 6.0 5.6 Other deferred credits and
liabilities 8.3 9.0 Total liabilities 975.0 1,023.9
Equity Held by public: Common units (issued 20,797,464 and
20,787,744 units at September 30, 2016 and December 31, 2015,
respectively) 293.0 300.0 Held by parent: Common units (issued
25,415,696 and 9,705,999 units at September 30, 2016 and December
31, 2015, respectively) 405.7 211.0 Subordinated units (issued zero
units at September 30, 2016 and 15,709,697 units at December 31,
2015) — 203.3 General partner interest 24.1 15.1 Partners'
capital attributable to SunCoke Energy Partners, L.P. 722.8 729.4
Noncontrolling interest 14.7 15.6 Total equity 737.5
745.0 Total liabilities and equity $ 1,712.5 $ 1,768.9
SunCoke Energy Partners, L.P. Combined and
Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30, 2016
2015 (Dollars in millions)
Cash Flows from Operating Activities: Net income $ 75.1 $
55.3 Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization expense 57.3
47.0 Deferred income tax expense (benefit) 0.2 (3.1 ) (Gain) loss
on extinguishment of debt (24.9 ) 9.4 Changes in working capital
pertaining to operating activities: Receivables 2.1 (28.0 )
Receivables (payables) from affiliate, net 6.2 2.8 Inventories 9.2
16.7 Accounts payable 5.0 (4.1 ) Accrued liabilities 1.2 0.3
Deferred revenue 25.5 1.1 Interest payable (11.2 ) (8.7 ) Other
(5.7 ) (0.5 ) Net cash provided by operating activities 140.0
88.2
Cash Flows from Investing Activities:
Capital expenditures (30.1 ) (31.7 ) Acquisition of business —
(193.1 ) Decrease (increase) in restricted cash 17.0 (21.5 ) Other
investing activities 2.1 — Net cash used in investing
activities (11.0 ) (246.3 )
Cash Flows from Financing
Activities: Proceeds from issuance of common units of SunCoke
Energy Partners, L.P., net of offering costs — 30.0 Proceeds from
issuance of long-term debt — 210.8 Repayment of long-term debt
(60.8 ) (149.8 ) Proceeds from revolving credit facility 20.0 185.0
Repayment of revolving credit facility (25.0 ) — Proceeds from
financing obligation 16.2 — Repayment of financing obligation (0.5
) — Debt issuance costs (0.2 ) (4.5 ) Distributions to unitholders
(public and parent) (86.8 ) (75.0 ) Distributions to noncontrolling
interest (SunCoke Energy, Inc.) (2.8 ) (2.7 ) Common public unit
repurchases — (10.0 ) Capital contributions from SunCoke 8.4
2.3 Net cash (used in) provided by financing activities
(131.5 ) 186.1 Net (decrease) increase in cash and cash
equivalents (2.5 ) 28.0 Cash and cash equivalents at beginning of
period 48.6 33.3 Cash and cash equivalents at end of
period $ 46.1 $ 61.3
Supplemental Disclosure of
Cash Flow Information Interest paid $ 49.8 $ 44.4
SunCoke Energy Partners, L.P. Segment Operating Data
The following tables set forth financial
and operating data for the three months ended March 31, 2016 and
2015:
Three Months Ended
Nine Months Ended September 30, September 30,
2016 2015 2016 2015
(Dollars in millions) Sales and other operating
revenues: Domestic Coke $ 170.8 $ 192.4 $ 517.2 $ 581.1 Coal
Logistics 14.7 17.8 44.2 40.0 Coal Logistics intersegment sales 1.5
1.7 4.7 5.0 Elimination of intersegment sales (1.5 ) (1.7 ) (4.7 )
(5.0 ) Total $ 185.5 $ 210.2 $ 561.4 $ 621.1
Adjusted EBITDA(1): Domestic Coke $
42.9 $ 46.6 $ 130.3 $ 137.3 Coal Logistics 7.0 9.3 18.2 16.9
Corporate and Other (4.2 ) (5.2 ) (12.9 ) (10.5 ) Total $ 45.7
$ 50.7 $ 135.6 $ 143.7
Domestic Coke
Operating Data: Domestic Coke capacity utilization (%) 103 107
102 106 Domestic Coke production volumes (thousands of tons) 593
619 1,751 1,828 Domestic Coke sales volumes (thousands of tons) 595
615 1,755 1,826 Domestic Coke Adjusted EBITDA per ton(2) $ 72.10 $
75.77 $ 74.25 $ 75.19
Coal Logistics Operating Data: Tons
handled, excluding CMT (thousands of tons)(3) 3,214 4,332 9,266
12,492 Tons handled by CMT (thousands of tons)(3) 841 817 2,762 817
(1) See definition of Adjusted EBITDA and
reconciliation elsewhere in this release. (2) Reflects Domestic
Coke Adjusted EBITDA divided by Domestic Coke sales volumes. (3)
Reflects inbound tons handled during the period.
SunCoke
Energy Partners, L.P. Reconciliations of Non-GAAP
Information Adjusted EBITDA to Net Income and Net Cash
Provided by Operating Activities Three
Months Ended Nine Months Ended
September 30, September 30, 2016
2015(1) 2016(1)
2015(1) (Dollars in millions)
Net cash provided by operating activities $ 31.9 $ 15.7 $ 140.0 $
88.2 Subtract: Depreciation and amortization expense 18.1 17.0 57.3
47.0 (Gain) loss on extinguishment of debt (1.0 ) — (24.9 ) 9.4
Changes in working capital and other (7.2 ) (22.1 ) 32.5
(23.5 ) Net income
$ 22.0 $ 20.8
$ 75.1 $ 55.3 Add:
Depreciation and amortization expense $ 18.1 $ 17.0 $ 57.3 $ 47.0
Interest expense, net 11.5 12.4 35.7 34.4 (Gain) loss on
extinguishment of debt (1.0 ) — (24.9 ) 9.4 Income tax expense
(benefit), net 0.4 0.5 1.4 (2.4 ) Contingent consideration
adjustments(2) (4.6 ) — (8.3 ) — Non-cash reversal of acquired
contractual obligation(3) (0.7 ) — (0.7 ) —
Adjusted EBITDA $ 45.7 $
50.7 $ 135.6 $
143.7 Subtract: Adjusted EBITDA attributable to
Previous Owner(4) $ — $ — $ — $ 1.5 Adjusted EBITDA attributable to
noncontrolling interest (5) 0.9 1.9 2.6 7.5
Adjusted EBITDA attributable to SunCoke Energy Partners,
L.P. $ 44.8 $ 48.8 $ 133.0 $ 134.7
(1) Beginning in the second quarter of 2016,
in response to the Securities & Exchange Commission’s May 2016
update to its guidance on the appropriate use of non-GAAP financial
measures, Adjusted EBITDA no longer includes Coal Logistics
deferred revenue until it is recognized as GAAP revenue. (2) The
Partnership amended the contingent consideration terms with The
Cline Group during the first quarter of 2016. These amendments and
subsequent fair value adjustments resulted in gains of $4.6 million
and $8.3 million recorded during the three and nine months ended
September 30, 2016, respectively, which were excluded from Adjusted
EBITDA. (3) In association with the acquisition of CMT, we assumed
certain performance obligations under existing contracts and
recorded liabilities related to such obligations. In third quarter
of 2016, the final contractual performance period expired, without
the customer requiring performance. As such, we reversed the
liability in the period as we no longer have any obligations under
the contract. (4) Reflects net income attributable to our Granite
City facility prior to the Granite City Dropdown on January 13,
2015 adjusted for Granite City's share of interest, taxes,
depreciation and amortization during the same period. (5) Reflects
net income attributable to noncontrolling interest adjusted for
noncontrolling interest's share of interest, taxes, income, and
depreciation and amortization.
SunCoke Energy Partners,
L.P. Reconciliations of Non-GAAP Information
Reconciliation of Adjusted EBITDA and Distributable Cash
Flow to Net Income Three Months
Ended September 30, 2016 (As Reported)
(Dollars in millions) Net cash provided by operating
activities $ 31.9 Less: Depreciation and amortization expense
18.1 Gain on debt extinguishment (1.0 ) Changes in working capital
and other (7.2 ) Net income $ 22.0 Add: Depreciation
and amortization expense 18.1 Interest expense, net 11.5 Gain on
extinguishment of debt (1.0 ) Income tax expense 0.4 Contingent
consideration adjustment(1) (4.6 ) Non-cash reversal of acquired
contractual obligation(2) (0.7 ) Adjusted EBITDA $ 45.7
Less: Adjusted EBITDA attributable to noncontrolling
interest(3) 0.9 Adjusted EBITDA attributable to SXCP $ 44.8
Plus: Coal Logistics deferred revenue(4) 8.6
Less: Ongoing capex 3.5 Replacement capex accrual 1.9 Cash interest
accrual 12.2 Cash tax accrual 0.3 Distributable cash flow $
35.5 Quarterly Cash Distribution $ 29.5 Distribution
Coverage Ratio(5) 1.20 (1) Fair value
adjustments to the Partnership's contingent consideration
obligation resulted in a gain of $4.6 million recorded during the
three months ended September 30, 2016, which was excluded from
Adjusted EBITDA. (2) In association with the acquisition of CMT, we
assumed certain performance obligations under existing contracts
and recorded liabilities related to such obligations. In third
quarter of 2016, the final contractual performance period expired,
without the customer requiring performance. As such, we reversed
the liability in the period as we no longer have any obligations
under the contract. (3) Reflects net income attributable to
noncontrolling interest adjusted for noncontrolling interest’s
share of interest, taxes, depreciation and amortization. (4) Coal
Logistics deferred revenue adjusts for coal and liquid tons the
Partnership did not handle, but are included in Distributable Cash
Flow as the associated take-or-pay fees are billed to the customer.
Deferred revenue on take-or-pay contracts is recognized into GAAP
income annually based on the terms of the contract, at which time
it will be excluded from Distributable Cash Flow. (5) Distribution
cash coverage ratio is distributable cash flow divided by total
estimated distributions to the limited and general partners.
SunCoke Energy Partners, L.P. Reconciliations of Non-GAAP
Information Estimated 2016 Consolidated Adjusted EBITDA to
Estimated Net Income and Net Cash Provided by Operating
Activities 2016 Low
High Net cash provided by operating activities
$ 149 $ 163 Subtract: Depreciation and amortization expense 74 74
Gain on extinguishment of debt (20 ) (27 ) Changes in working
capital and other (12 ) (12 )
Net income $ 107 $ 128
Add: Depreciation and amortization expense 74 74 Interest
expense, net 57 53 (Gain) loss on extinguishment of debt (20 ) (27
) Income tax expense 1 1 Contingent consideration adjustments(1) (8
) (8 ) Non-cash reversal of acquired contractual obligation(2) (1 )
(1 )
Adjusted EBITDA $ 210 $ 220 Subtract:
Adjusted EBITDA attributable to noncontrolling interest(3) 3
3
Adjusted EBITDA attributable to SunCoke Energy
Partners, L.P. $ 207 $ 217 Add: Corporate cost
holiday / deferral(4) 14 14 Subtract: Ongoing capex 12 12
Replacement capex accrual 8 8 Cash interest accrual 53 49 Cash tax
accrual 1 1
Estimated distributable cash flow
$ 147 $ 161 (1) The Partnership
amended the contingent consideration terms with The Cline Group
during the first quarter of 2016. These amendments and subsequent
fair value adjustments resulted in gains of $4.6 million and $8.3
million recorded during the three and nine months ended September
30, 2016, respectively, which were excluded from Adjusted EBITDA.
(2) In association with the acquisition of CMT, we assumed certain
performance obligations under existing contracts and recorded
liabilities related to such obligations. In third quarter of 2016,
the final contractual performance period expired, without the
customer requiring performance. As such, we reversed the liability
in the period as we no longer have any obligations under the
contract. (3) Reflects net income attributable to noncontrolling
interest adjusted for noncontrolling interest's share of interest,
taxes, income, and depreciation and amortization. (4) Represents
SXC corporate cost reimbursement holiday/deferral for Q1 and Q2
2016. Actual capital allocation and distribution decisions to be
made quarterly.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161020005360/en/
SunCoke Energy Partners, L.P.Investors:Kyle Bland:
630-824-1987orMedia:Steve
Carlson: 630-824-1783
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