LISLE, Ill., July 27, 2017 /PRNewswire/ --
- Net loss attributable to SXC was $24.2
million, or $0.38 per share,
in the current period compared to a loss of $4.6 million, or $0.07 per share, in the prior year period
- Adjusted EBITDA for the quarter was $47.5 million, up $1.0
million versus the prior year period
- Purchased approximately 1.5 million SXCP units in the quarter;
1.6 million total units through July 26,
2017
- Reaffirm full-year 2017 Consolidated Adjusted EBITDA guidance
of $220 million to $235 million
SunCoke Energy, Inc. (NYSE: SXC) today reported results for the
second quarter 2017, which reflect comparable consolidated
operating results and current period charges related to the debt
refinancing completed in the quarter.
"Our second quarter operating performance finished in line with
our expectations and positions us to achieve our full-year
financial guidance targets in 2017," said Fritz Henderson, Chairman, President and Chief
Executive Officer of SunCoke Energy, Inc. "In the quarter, work
commenced on our 2017 Indiana Harbor oven rebuild campaign and we
successfully completed our scheduled outage at Granite City."
Additionally, the company began executing against its capital
allocation strategy to purchase SXCP units in the open market.
Through July 26, 2017, the company
had spent approximately $27 million
to acquire 1.6 million SXCP units. The company also completed its
debt refinancing at both SXC and SXCP.
Henderson continued, "We remained focused on allocating capital
in the most efficient manner for SXC shareholders and are pleased
with the execution of our SXCP unit purchases to-date.
Additionally, we successfully completed our debt refinancing which
extends our revolver and SXCP note maturities and provides the
flexibility to execute our growth and capital allocation strategies
going forward."
SECOND QUARTER CONSOLIDATED RESULTS
|
Three Months Ended
June 30,
|
|
(Dollars in
millions)
|
2017
|
|
2016
|
|
Increase/(Decrease)
|
|
Revenues
|
$
|
323.2
|
|
|
$
|
292.7
|
|
|
$
|
30.5
|
|
|
Adjusted
EBITDA(1)
|
$
|
47.5
|
|
|
$
|
46.5
|
|
|
$
|
1.0
|
|
|
Net loss attributable
to SXC
|
$
|
(24.2)
|
|
|
$
|
(4.6)
|
|
|
$
|
(19.6)
|
|
|
|
|
(1)
|
See definition of
Adjusted EBITDA and reconciliation elsewhere in this
release.
|
Revenues during the second quarter 2017 increased $30.5 million compared to the same prior year
period, reflecting the pass-through of higher coal prices in our
Domestic Coke segment as well as higher sales volumes in our Coal
Logistics segment.
Adjusted EBITDA during the second quarter 2017 increased
$1.0 million to $47.5 million, primarily due to higher sales
volumes in our Coal Logistics segment and higher technology and
licensing fees earned in our Brazil Coke segment. These
improvements were partially offset by lower Adjusted EBITDA in our
Domestic Coke segment, driven primarily by the impact of oven
rebuilds at our Indiana Harbor facility as well as the planned
outage at our Granite City
facility in the current year period.
Net loss attributable to SXC was $24.2
million, or $0.38 per share,
for the second quarter 2017 which is $19.6
million unfavorable to second quarter 2016 loss of
$4.6 million, or $0.07 per share. This change is driven primarily
by $20.2 million of debt
extinguishment costs related to our refinancing activities in the
current year period.
SECOND QUARTER 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
June 30,
|
|
(Dollars in
millions, except per ton amounts)
|
2017
|
|
2016
|
|
Increase/(Decrease)
|
|
Revenues
|
$
|
296.5
|
|
|
$
|
274.0
|
|
|
$
|
22.5
|
|
|
Adjusted
EBITDA(1)
|
$
|
44.0
|
|
|
$
|
51.0
|
|
|
$
|
(7.0)
|
|
|
Sales volumes
(thousands of tons)
|
953
|
|
|
992
|
|
|
(39)
|
|
|
Adjusted EBITDA per
ton(2)
|
$
|
46.17
|
|
|
$
|
51.41
|
|
|
$
|
(5.24)
|
|
|
|
|
(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 increased $22.5 million,
reflecting the pass-through of higher coal prices in our Domestic
Coke segment, partially offset by a decrease in sales volume of 39
thousand tons, primarily due to lower production at Indiana Harbor
associated with oven rebuilds in the current year period. Revenue
was also impacted by lower energy sales due to the planned outage
at our Granite City facility in
the current year period.
- Adjusted EBITDA decreased $7.0
million, reflecting lower volumes as discussed above,
$3.5 million in higher operating and
maintenance spending at Indiana Harbor due primarily to the oven
rebuilds, as well as lower energy sales and higher operating and
maintenance spend for the planned outage at Granite City. Adjusted EBITDA was also
impacted by $1.0 million of favorable
contracted coal prices at our Jewell facility in the current year
period.
Coal Logistics
Coal Logistics consists of the coal
handling and mixing services operated by SXCP at Convent Marine
Terminal ("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. Additionally, Dismal River
Terminal ("DRT"), located in Virginia adjacent to our Jewell Cokemaking
facility, is operated by SXC. DRT was formed to accommodate
Jewell in its direct procurement of third-party coal, beginning in
2016.
|
Three Months Ended
June 30,
|
|
(Dollars in
millions)
|
2017
|
|
2016
|
|
Increase/(Decrease)
|
|
Revenues
|
$
|
16.2
|
|
|
$
|
11.3
|
|
|
$
|
4.9
|
|
|
Intersegment
sales
|
$
|
5.1
|
|
|
$
|
5.2
|
|
|
$
|
(0.1)
|
|
|
Adjusted
EBITDA(1)
|
$
|
10.0
|
|
|
$
|
5.4
|
|
|
$
|
4.6
|
|
|
Tons handled
(thousands of tons)(2)
|
5,173
|
|
|
4,208
|
|
|
965
|
|
|
CMT take-or-pay
shortfall tons (thousands of tons)(3)
|
956
|
|
|
1,616
|
|
|
(660)
|
|
|
|
|
(1)
|
See definition of
Adjusted EBITDA and reconciliation elsewhere in this
release.
|
|
(2)
|
Reflects inbound tons
handled during the period.
|
|
(3)
|
Reflects tons billed
under take-or-pay contracts where services have not yet been
performed.
|
- Revenues and Adjusted EBITDA were up $4.9 million and $4.6
million, respectively, driven by higher sales volumes at our
CMT and KRT terminals in the current year period.
Brazil Coke
Brazil Coke consists of a cokemaking facility in Vitória,
Brazil, which we operate for an
affiliate of ArcelorMittal.
- Adjusted EBITDA increased $2.1
million to $4.5 million,
driven primarily by incremental technology and licensing fees
related to the addition of certain patents to our existing
intellectual property licensing agreement in the fourth quarter of
2016.
Corporate and Other
Corporate and other expenses,
which include costs related to our legacy coal mining business,
were $11.0 million in second quarter
2017, an improvement of $1.3 million
versus second quarter 2016. The improvement was driven partly by
lower legal costs.
2017 OUTLOOK
Our 2017 guidance is as follows:
- Domestic coke production is expected to be approximately 3.9
million tons
- Consolidated Adjusted EBITDA is expected to be between
$220 million and $235 million
- Adjusted EBITDA attributable to SXC is expected to be between
$130 million and $141 million,
reflecting the impact of public ownership in SXCP
- Capital expenditures are projected to be approximately
$80 million
- Cash flow from operations is estimated to be between
$128 million and $143 million
(updated post-refinancing)
- Cash taxes are projected to be between $6 million and $10 million (updated
post-refinancing)
RELATED COMMUNICATIONS
We will host our quarterly earnings call at 11:00 a.m.
Eastern Time (10:00 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 1-877-201-0168 in the U.S. or 1-647-788-4901 if outside the
U.S., confirmation code 47076190.
SUNCOKE ENERGY, INC.
SunCoke Energy, Inc. (NYSE: SXC) supplies high-quality coke to
the integrated steel industry under long-term, take-or-pay
contracts that pass through commodity and certain operating costs
to customers. We utilize an innovative heat-recovery
cokemaking technology that captures excess heat for steam or
electrical power generation. We are the sponsor of SunCoke
Energy Partners, L.P. ("Partnership") (NYSE: SXCP), a publicly
traded master limited partnership. At June 30, 2017, we
owned the general partner of the Partnership, which consists of a
2.0 percent ownership interest and incentive distribution rights,
and owned a 57.0 percent limited partner interest in the
Partnership. Our cokemaking facilities are located in
Illinois, Indiana, Ohio, Virginia, Brazil and India. To learn more about
SunCoke Energy, Inc., visit our website at www.suncoke.com.
DEFINITIONS
- Adjusted EBITDA represents earnings before interest,
loss (gain) on extinguishment of debt, taxes, depreciation and
amortization ("EBITDA"), adjusted for impairments, coal
rationalization costs, changes to our contingent consideration
liability related to our acquisition of CMT and the expiration of
certain acquired contractual obligations. 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 of the
operating performance and liquidity of the Company'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 a substitute for net income, operating cash flow 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.
FORWARD-LOOKING STATEMENTS
Some of the statements included in this press release constitute
"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). 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 SXC) 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 SXC, 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 SXC; and changes in tax, environmental and other laws
and regulations applicable to SXC's businesses.
Forward-looking statements are not guarantees of future
performance, but are based upon the current knowledge, beliefs and
expectations of SXC management, and upon assumptions by SXC
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. SXC 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, SXC 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 SXC. For information concerning these factors, see
SXC'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 SXC'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,
Inc.
|
|
Consolidated
Statements of Operations
|
|
(Unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars and shares in millions,
except per share amounts)
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Sales and other
operating revenue
|
|
$
|
323.2
|
|
|
$
|
292.7
|
|
|
$
|
632.9
|
|
|
$
|
603.8
|
|
|
Costs and
operating expenses
|
|
|
|
|
|
|
|
|
|
Cost of products sold
and operating expenses
|
|
257.2
|
|
|
224.4
|
|
|
491.6
|
|
|
464.9
|
|
|
Selling, general and
administrative expenses
|
|
24.1
|
|
|
23.7
|
|
|
43.8
|
|
|
47.0
|
|
|
Depreciation and
amortization expense
|
|
33.3
|
|
|
28.6
|
|
|
66.6
|
|
|
56.8
|
|
|
Loss on divestiture
of business
|
|
—
|
|
|
5.1
|
|
|
—
|
|
|
14.7
|
|
|
Total costs and
operating expenses
|
|
314.6
|
|
|
281.8
|
|
|
602.0
|
|
|
583.4
|
|
|
Operating
income
|
|
8.6
|
|
|
10.9
|
|
|
30.9
|
|
|
20.4
|
|
|
Interest expense,
net
|
|
15.2
|
|
|
13.4
|
|
|
28.9
|
|
|
27.4
|
|
|
Loss (gain) on
extinguishment of debt(1)
|
|
20.2
|
|
|
(3.5)
|
|
|
20.3
|
|
|
(23.9)
|
|
|
(Loss) income before
income tax expense
|
|
(26.8)
|
|
|
1.0
|
|
|
(18.3)
|
|
|
16.9
|
|
|
Income tax
expense(2)
|
|
4.7
|
|
|
—
|
|
|
70.9
|
|
|
3.3
|
|
|
Net (loss)
income
|
|
(31.5)
|
|
|
1.0
|
|
|
(89.2)
|
|
|
13.6
|
|
|
Less: Net (loss)
income attributable to noncontrolling
interests(2)
|
|
(7.3)
|
|
|
5.6
|
|
|
(66.0)
|
|
|
22.3
|
|
|
Net loss
attributable to SunCoke Energy, Inc.
|
|
$
|
(24.2)
|
|
|
$
|
(4.6)
|
|
|
$
|
(23.2)
|
|
|
$
|
(8.7)
|
|
|
Loss attributable to
SunCoke Energy, Inc. per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.38)
|
|
|
$
|
(0.07)
|
|
|
$
|
(0.36)
|
|
|
$
|
(0.14)
|
|
|
Diluted
|
|
$
|
(0.38)
|
|
|
$
|
(0.07)
|
|
|
$
|
(0.36)
|
|
|
$
|
(0.14)
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
64.3
|
|
|
64.2
|
|
|
64.3
|
|
|
64.1
|
|
|
Diluted
|
|
64.3
|
|
|
64.2
|
|
|
64.3
|
|
|
64.1
|
|
|
|
|
(1)
|
The Partnership
recorded a loss on extinguishment of debt as a result of its debt
refinancing activities during the second quarter of 2017. The
Partnership recorded a gain on extinguishment of debt as a result
of senior note repurchases through the first half of
2016.
|
|
|
|
(2)
|
In January 2017, the
Internal Revenue Service ("IRS") announced its decision to exclude
cokemaking as a qualifying income generating activity in its final
regulations (the "Final Regulations") issued under section
7704(d)(1)(E) of the Internal Revenue Code relating to the
qualifying income exception for publicly traded partnerships.
However, the Final Regulations include a transition period for
activities that were reasonably interpreted to be qualifying income
and carried on by publicly traded partnerships prior to the Final
Regulations. The Partnership previously received a will-level
opinion from its counsel, Vinson & Elkins LLP, that the
Partnership's cokemaking operations generated qualifying income
prior to the Final Regulations. Therefore, the Partnership believes
it had a reasonable basis to conclude its cokemaking operations
were considered qualifying income before the issuance of the new
regulations and as such expects to maintain its treatment as a
partnership through the transition period. Cokemaking entities in
the Partnership will become taxable as corporations on January 1,
2028, after the transition period ends.
|
|
|
|
As a result of the
Final Regulations, the Partnership recorded deferred income tax
expense of $148.6 million to set up its initial deferred income tax
liability during the first quarter of 2017, primarily related to
differences in the book and tax basis of fixed assets, which are
expected to exist at the end of the 10-year transition period when
the cokemaking operations become taxable. As the Company
consolidates the Partnership, the entire deferred income tax
expense was recognized during the first quarter of 2017. However,
the Company had already recorded $84.4 million of the deferred
income tax liability in its financial statements related to the
Company's share of the deferred tax liability for the book and tax
differences in its investment in the Partnership. Therefore, the
net impact to the Company's deferred tax expense was $64.2 million
during the six months ended June 30, 2017. This incremental tax
impact is solely attributable to the Partnership's public
unitholders. As such, an equal reduction to noncontrolling interest
was recorded. As a result, the Final Regulations have no impact to
net income attributable to the Company.
|
|
SunCoke Energy,
Inc.
|
|
Consolidated
Balance Sheets
|
|
|
|
|
|
|
|
June 30,
2017
|
|
December 31,
2016
|
|
|
(Unaudited)
|
|
|
|
|
(Dollars in
millions, except
par value
amounts)
|
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
136.7
|
|
|
$
|
134.0
|
|
|
Receivables
|
|
65.3
|
|
|
60.7
|
|
|
Receivable from
redemption of Brazilian investment
|
|
—
|
|
|
20.5
|
|
|
Inventories
|
|
116.4
|
|
|
92.5
|
|
|
Income tax
receivable
|
|
16.5
|
|
|
4.6
|
|
|
Other current
assets
|
|
6.1
|
|
|
3.8
|
|
|
Total current
assets
|
|
341.0
|
|
|
316.1
|
|
|
Properties, plants
and equipment (net of accumulated depreciation of $679.4 and $625.9
million at June 30, 2017 and December 31, 2016,
respectively)
|
|
1,510.9
|
|
|
1,542.6
|
|
|
Goodwill
|
|
76.9
|
|
|
76.9
|
|
|
Other intangible
assets, net
|
|
173.5
|
|
|
179.0
|
|
|
Deferred charges and
other assets
|
|
4.5
|
|
|
6.3
|
|
|
Total
assets
|
|
$
|
2,106.8
|
|
|
$
|
2,120.9
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
Accounts
payable
|
|
$
|
126.4
|
|
|
$
|
98.6
|
|
|
Accrued
liabilities
|
|
43.6
|
|
|
49.8
|
|
|
Deferred
revenue
|
|
12.0
|
|
|
2.5
|
|
|
Current portion of
long-term debt and financing obligation
|
|
3.7
|
|
|
4.9
|
|
|
Interest
payable
|
|
6.6
|
|
|
16.2
|
|
|
Total current
liabilities
|
|
192.3
|
|
|
172.0
|
|
|
Long-term debt and
financing obligation
|
|
870.3
|
|
|
849.2
|
|
|
Accrual for black
lung benefits
|
|
46.0
|
|
|
45.4
|
|
|
Retirement benefit
liabilities
|
|
27.8
|
|
|
29.0
|
|
|
Deferred income
taxes
|
|
428.7
|
|
|
352.5
|
|
|
Asset retirement
obligations
|
|
13.9
|
|
|
13.9
|
|
|
Other deferred
credits and liabilities
|
|
20.4
|
|
|
19.0
|
|
|
Total
liabilities
|
|
1,599.4
|
|
|
1,481.0
|
|
|
Equity
|
|
|
|
|
|
Preferred stock,
$0.01 par value. Authorized 50,000,000 shares; no issued shares at
June 30, 2017 and December 31, 2016
|
|
—
|
|
|
—
|
|
|
Common stock, $0.01
par value. Authorized 300,000,000 shares; issued 71,807,075 and
71,707,304 shares at June 30, 2017 and December 31, 2016,
respectively
|
|
0.7
|
|
|
0.7
|
|
|
Treasury stock,
7,477,657 shares at June 30, 2017 and December 31, 2016,
respectively
|
|
(140.7)
|
|
|
(140.7)
|
|
|
Additional paid-in
capital
|
|
489.2
|
|
|
492.1
|
|
|
Accumulated other
comprehensive loss
|
|
(19.2)
|
|
|
(19.0)
|
|
|
Retained
deficit
|
|
(45.5)
|
|
|
(22.0)
|
|
|
Total SunCoke Energy,
Inc. stockholders' equity
|
|
284.5
|
|
|
311.1
|
|
|
Noncontrolling
interests
|
|
222.9
|
|
|
328.8
|
|
|
Total
equity
|
|
507.4
|
|
|
639.9
|
|
|
Total liabilities and
equity
|
|
$
|
2,106.8
|
|
|
$
|
2,120.9
|
|
|
SunCoke Energy,
Inc.
|
|
Consolidated
Statements of Cash Flows
|
|
(Unaudited)
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
(Dollars in
millions)
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
Net (loss)
income
|
|
$
|
(89.2)
|
|
|
$
|
13.6
|
|
|
Adjustments to
reconcile net (loss) income to net cash provided by operating
activities:
|
|
|
|
|
|
Loss on divestiture
of business
|
|
—
|
|
|
14.7
|
|
|
Depreciation and
amortization expense
|
|
66.6
|
|
|
56.8
|
|
|
Deferred income tax
expense
|
|
79.8
|
|
|
3.6
|
|
|
Payments in excess of
expense for postretirement plan benefits
|
|
(1.2)
|
|
|
(1.2)
|
|
|
Share-based
compensation expense
|
|
3.0
|
|
|
3.4
|
|
|
Loss (gain) on
extinguishment of debt
|
|
20.3
|
|
|
(23.9)
|
|
|
Changes in working
capital pertaining to operating activities (net of the effects of
held for sale working capital):
|
|
|
|
|
|
Receivables
|
|
(4.6)
|
|
|
16.2
|
|
|
Inventories
|
|
(23.9)
|
|
|
15.5
|
|
|
Accounts
payable
|
|
15.6
|
|
|
(5.5)
|
|
|
Accrued
liabilities
|
|
(6.2)
|
|
|
7.0
|
|
|
Deferred
revenue
|
|
9.5
|
|
|
18.2
|
|
|
Interest
payable
|
|
(9.6)
|
|
|
(2.1)
|
|
|
Income
taxes
|
|
(11.9)
|
|
|
1.9
|
|
|
Other
|
|
6.2
|
|
|
3.3
|
|
|
Net cash provided by
operating activities
|
|
54.4
|
|
|
121.5
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
Capital
expenditures
|
|
(22.4)
|
|
|
(30.2)
|
|
|
Decrease in
restricted cash
|
|
0.1
|
|
|
15.9
|
|
|
Return of Brazilian
investment
|
|
20.5
|
|
|
—
|
|
|
Divestiture of coal
business
|
|
—
|
|
|
(12.1)
|
|
|
Other investing
activities
|
|
—
|
|
|
2.1
|
|
|
Net cash used in
investing activities
|
|
(1.8)
|
|
|
(24.3)
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
Proceeds from
issuance of long-term debt
|
|
620.6
|
|
|
—
|
|
|
Repayment of
long-term debt
|
|
(532.2)
|
|
|
(47.0)
|
|
|
Repayment of
financing obligation
|
|
(1.2)
|
|
|
—
|
|
|
Proceeds from
revolving credit facility
|
|
128.0
|
|
|
20.0
|
|
|
Repayment of
revolving credit facility
|
|
(200.0)
|
|
|
(60.4)
|
|
|
Debt issuance
costs
|
|
(15.6)
|
|
|
—
|
|
|
Acquisition of
additional interest in the Partnership
|
|
(24.6)
|
|
|
—
|
|
|
Cash distribution to
noncontrolling interests
|
|
(24.6)
|
|
|
(24.7)
|
|
|
Other financing
activities
|
|
(0.3)
|
|
|
(0.5)
|
|
|
Net cash used in
financing activities
|
|
(49.9)
|
|
|
(112.6)
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
2.7
|
|
|
(15.4)
|
|
|
Cash and cash
equivalents at beginning of period
|
|
134.0
|
|
|
123.4
|
|
|
Cash and cash
equivalents at end of period
|
|
$
|
136.7
|
|
|
$
|
108.0
|
|
|
Supplemental
Disclosure of Cash Flow Information
|
|
|
|
|
|
Interest
paid
|
|
$
|
37.2
|
|
|
$
|
30.8
|
|
|
Income taxes paid,
net of refunds of $0.1 million and $4.0 million in 2017 and 2016,
respectively.
|
|
$
|
3.1
|
|
|
$
|
(2.2)
|
|
|
SunCoke Energy,
Inc.
|
|
Segment Financial
and Operating Data
|
|
|
The following tables
set forth financial and operating data for the three and six months
ended June 30, 2017 and 2016:
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions, except per ton amounts)
|
|
Sales and other
operating revenues:
|
|
|
|
|
|
|
|
|
|
Domestic
Coke
|
|
$
|
296.5
|
|
|
$
|
274.0
|
|
|
$
|
575.2
|
|
|
$
|
563.0
|
|
|
Brazil
Coke
|
|
10.5
|
|
|
7.3
|
|
|
21.3
|
|
|
15.0
|
|
|
Coal
Logistics
|
|
16.2
|
|
|
11.3
|
|
|
36.4
|
|
|
24.3
|
|
|
Coal Logistics
intersegment sales
|
|
5.1
|
|
|
5.2
|
|
|
10.2
|
|
|
10.4
|
|
|
Corporate and
Other(1)
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
1.5
|
|
|
Corporate and Other
intersegment sales(1)
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
22.0
|
|
|
Elimination of
intersegment sales
|
|
(5.1)
|
|
|
(5.9)
|
|
|
(10.2)
|
|
|
(32.4)
|
|
|
Total sales and other
operating revenues
|
|
$
|
323.2
|
|
|
$
|
292.7
|
|
|
$
|
632.9
|
|
|
$
|
603.8
|
|
|
Adjusted
EBITDA(2):
|
|
|
|
|
|
|
|
|
|
Domestic
Coke
|
|
$
|
44.0
|
|
|
$
|
51.0
|
|
|
$
|
93.7
|
|
|
$
|
105.3
|
|
|
Brazil
Coke
|
|
4.5
|
|
|
2.4
|
|
|
8.9
|
|
|
4.7
|
|
|
Coal
Logistics
|
|
10.0
|
|
|
5.4
|
|
|
23.1
|
|
|
11.3
|
|
|
Corporate and
Other(3)
|
|
(11.0)
|
|
|
(12.3)
|
|
|
(22.6)
|
|
|
(31.0)
|
|
|
Total Adjusted
EBITDA
|
|
$
|
47.5
|
|
|
$
|
46.5
|
|
|
$
|
103.1
|
|
|
$
|
90.3
|
|
|
Coke Operating
Data:
|
|
|
|
|
|
|
|
|
|
Domestic Coke
capacity utilization (%)
|
|
90
|
|
|
95
|
|
|
90
|
|
|
94
|
|
|
Domestic Coke
production volumes (thousands of tons)
|
|
950
|
|
|
998
|
|
|
1,898
|
|
|
1,989
|
|
|
Domestic Coke sales
volumes (thousands of tons)
|
|
953
|
|
|
992
|
|
|
1,899
|
|
|
1,992
|
|
|
Domestic Coke
Adjusted EBITDA per ton(4)
|
|
$
|
46.17
|
|
|
$
|
51.41
|
|
|
$
|
49.34
|
|
|
$
|
52.86
|
|
|
Brazilian Coke
production—operated facility (thousands of tons)
|
|
437
|
|
|
431
|
|
|
872
|
|
|
845
|
|
|
Coal Logistics
Operating Data:
|
|
|
|
|
|
|
|
|
|
Tons handled
(thousands of tons)(5)
|
|
5,173
|
|
|
4,208
|
|
|
10,892
|
|
|
8,523
|
|
|
CMT take-or-pay
shortfall tons (thousands of tons)(6)
|
|
956
|
|
|
1,616
|
|
|
1,500
|
|
|
3,254
|
|
|
|
|
(1)
|
Corporate and Other
revenues related to our legacy coal mining business.
|
|
(2)
|
See definition of
Adjusted EBITDA and reconciliation to GAAP elsewhere in this
release.
|
|
(3)
|
Corporate and Other
includes the activity from our legacy coal mining business, which
incurred Adjusted EBITDA losses of $2.7 million and $6.2 million
during the three and six months ended June 30, 2017, respectively,
as well as losses of $3.0 million and $9.3 million during the three
and six months ended June 30, 2016, respectively.
|
|
(4)
|
Reflects Domestic
Coke Adjusted EBITDA divided by Domestic Coke sales
volumes.
|
|
(5)
|
Reflects inbound tons
handled during the period.
|
|
(6)
|
Reflects tons billed
under take-or-pay contracts where services have not yet been
performed.
|
|
SunCoke Energy,
Inc.
|
|
Reconciliations of
Non-GAAP Information
|
|
Net Cash Provided
by Operating Activities to
Net (Loss) Income and Adjusted EBITDA
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
(Dollars in
millions)
|
|
Net cash provided
by operating activities
|
|
$
|
24.9
|
|
|
$
|
92.1
|
|
|
$
|
54.4
|
|
|
$
|
121.5
|
|
|
Subtract:
|
|
|
|
|
|
|
|
|
|
Loss on divestiture
of business
|
|
—
|
|
|
5.1
|
|
|
—
|
|
|
14.7
|
|
|
Depreciation and
amortization expense
|
|
33.3
|
|
|
28.6
|
|
|
66.6
|
|
|
56.8
|
|
|
Deferred income tax
expense
|
|
14.0
|
|
|
0.4
|
|
|
79.8
|
|
|
3.6
|
|
|
Loss (gain) on
extinguishment of debt
|
|
20.2
|
|
|
(3.5)
|
|
|
20.3
|
|
|
(23.9)
|
|
|
Changes in working
capital and other
|
|
(11.1)
|
|
|
60.5
|
|
|
(23.1)
|
|
|
56.7
|
|
|
Net (loss)
income
|
|
$
|
(31.5)
|
|
|
$
|
1.0
|
|
|
$
|
(89.2)
|
|
|
$
|
13.6
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
Coal rationalization
costs(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
Depreciation and
amortization expense
|
|
33.3
|
|
|
28.6
|
|
|
66.6
|
|
|
56.8
|
|
|
Interest expense,
net
|
|
15.2
|
|
|
13.4
|
|
|
28.9
|
|
|
27.4
|
|
|
Loss (gain) on
extinguishment of debt
|
|
20.2
|
|
|
(3.5)
|
|
|
20.3
|
|
|
(23.9)
|
|
|
Income tax
expense
|
|
4.7
|
|
|
—
|
|
|
70.9
|
|
|
3.3
|
|
|
Contingent
consideration adjustments(2)
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
(3.7)
|
|
|
Loss on divestiture
of business
|
|
—
|
|
|
5.1
|
|
|
—
|
|
|
14.7
|
|
|
Expiration of land
deposits and write-off of costs related to potential new cokemaking
facility(3)
|
|
5.3
|
|
|
1.9
|
|
|
5.3
|
|
|
1.9
|
|
|
Adjusted
EBITDA(4)
|
|
47.5
|
|
|
46.5
|
|
|
103.1
|
|
|
90.3
|
|
|
Subtract: Adjusted
EBITDA attributable to noncontrolling
interest(5)
|
|
17.5
|
|
|
18.6
|
|
|
39.1
|
|
|
38.9
|
|
|
Adjusted EBITDA
attributable to SunCoke Energy, Inc.
|
|
$
|
30.0
|
|
|
$
|
27.9
|
|
|
$
|
64.0
|
|
|
$
|
51.4
|
|
|
|
|
(1)
|
Prior to the
divestiture of our coal mining business, the Company incurred coal
rationalization costs including employee severance, contract
termination costs and other costs to idle mines incurred during the
execution of our coal rationalization plan.
|
|
(2)
|
As a result of the
increase in fair value of the contingent consideration liability
during the second quarter of 2017, the Partnership recognized
expense of $0.3 million during the three and six months ended June
30, 2017. The Partnership amended its contingent consideration
terms with The Cline Group during the first quarter of 2016.
This amendment resulted in a gain of $3.7 million recorded during
the six months ended June 30, 2016.
|
|
(3)
|
In 2014, we finalized
the required permitting and engineering plan for a potential new
cokemaking facility to be constructed in Kentucky. However,
in June 2017, due to our focus on renewing our existing customer
contracts and the lack of any long-term customer commitment for a
majority of the facility's capacity, we decided to terminate the
project. As a result, during the second quarter of 2017, the
Company wrote-off previously capitalized engineering and land
deposit costs of $5.3 million. During the second quarter of 2016,
the Company wrote-off expiring land deposits related to the project
of $1.9 million.
|
|
(4)
|
In accordance with
the SEC's May 2016 update of its guidance on the appropriate use of
non-GAAP financial measures, Adjusted EBITDA does not include Coal
Logistics deferred revenue until it is recognized as GAAP
revenue.
|
|
(5)
|
Reflects
noncontrolling interest in Indiana Harbor and the portion of the
Partnership owned by public unitholders.
|
|
SunCoke Energy,
Inc.
|
|
Reconciliation of
Non-GAAP Information
|
|
Estimated 2017 Net
Cash Provided by Operating Activities to Estimated Net
Loss and Estimated
Consolidated Adjusted EBITDA
|
|
(updated
post-refinancing)
|
|
|
|
|
|
2017
|
|
|
Low
|
|
High
|
|
Net cash provided
by operating activities
|
|
$
|
128
|
|
|
$
|
143
|
|
|
Subtract:
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
131
|
|
|
131
|
|
|
Deferred income tax
expense
|
|
65
|
|
|
70
|
|
|
Changes in working
capital and other
|
|
(27)
|
|
|
(28)
|
|
|
Loss on
extinguishment of debt
|
|
20
|
|
|
20
|
|
|
Net
loss
|
|
$
|
(61)
|
|
|
$
|
(50)
|
|
|
Add:
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
131
|
|
|
131
|
|
|
Interest expense,
net
|
|
63
|
|
|
62
|
|
|
Loss on
extinguishment of debt
|
|
20
|
|
|
20
|
|
|
Income tax
expense
|
|
67
|
|
|
72
|
|
|
Adjusted
EBITDA
|
|
$
|
220
|
|
|
$
|
235
|
|
|
Subtract:
|
|
|
|
|
|
Adjusted EBITDA
attributable to noncontrolling interests(1)
|
|
90
|
|
|
94
|
|
|
Adjusted EBITDA
attributable to SunCoke Energy, Inc.
|
|
$
|
130
|
|
|
$
|
141
|
|
|
|
|
(1)
|
Reflects
non-controlling interest in Indiana Harbor and the portion of the
Partnership owned by public unitholders.
|
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SOURCE SunCoke Energy, Inc.