LISLE, Ill., Oct. 25, 2018
/PRNewswire/ -- SunCoke Energy Partners, L.P. (NYSE: SXCP) today
reported results for the third quarter 2018, which reflect strong
throughput volumes at the company's Convent Marine Terminal and
solid performance from Middletown
and Haverhill coke facilities, offset by the timing and scope of an
outage and unrelated machinery fire at Granite City.
Mike Rippey, President and Chief
Executive Officer of SunCoke Energy Partners, L.P. commented, "We
continue to be pleased with strong operating performance at CMT as
our customers continue to leverage our unique capabilities to
capitalize on the attractive export market and our Middletown and Haverhill coke facilities
continue to perform in line with our expectations."
Granite City began a planned
outage during the quarter, in which the scope and duration
increased materially versus original estimates. Our analysis
revealed that additional improvements would benefit the facility
and it was prudent to accelerate the timing of this work.
Additionally, as discussed on the company's second quarter earnings
call, Granite City experienced a
fire on a major piece of equipment which resulted in lost
production and lower revenues during the third quarter. The
incremental impact of these two events, which was not factored into
the company's full-year guidance, is approximately $9 million. As a result, full year 2018
Adjusted EBITDA attributable to SXCP guidance has been adjusted to
range between $210 million to
$215 million.
Rippey continued, "While we are disappointed to revise our
full-year 2018 guidance as a result of incremental expense and
lower revenue at Granite City, our
focus has been, and always will be, on driving operational
excellence and maximizing long-term performance at our
facilities. Based on the expertise we have built across our
fleet, it became a clear decision to increase the scope of the work
at Granite City in order to
improve the long-term reliability and operational performance of
those assets."
THIRD QUARTER RESULTS
|
Three Months Ended
September 30,
|
(Dollars in
millions)
|
2018
|
|
2017
|
|
Increase
(Decrease)
|
Revenues
|
$
|
224.1
|
|
|
$
|
214.0
|
|
|
$
|
10.1
|
|
Adjusted
EBITDA(1)
|
$
|
54.6
|
|
|
$
|
58.4
|
|
|
$
|
(3.8)
|
|
Net income
attributable to SXCP
|
$
|
15.3
|
|
|
$
|
22.6
|
|
|
$
|
(7.3)
|
|
(1) See
definition of Adjusted EBITDA and reconciliation elsewhere in this
release.
|
Revenues in third quarter 2018 increased $10.1 million from the prior year period,
primarily reflecting the higher sales volumes at CMT.
Adjusted EBITDA in the quarter decreased $3.8 million, driven primarily by the incremental
operating and maintenance costs and lower revenues related to a
planned outage and an unrelated machinery fire at our Granite City cokemaking facility offset by
higher sales volumes at CMT.
Net income attributable to SXCP in the third quarter 2018 was
$15.3 million, down $7.3 million versus the prior period. The
decrease in the current year period was driven by the operating
results discussed above and higher depreciation expense due to
revisions in estimated useful lives of certain assets in our
Domestic Coke segment.
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)
|
2018
|
|
2017
|
|
Increase
(Decrease)
|
Revenues
|
$
|
193.1
|
|
|
$
|
193.4
|
|
|
$
|
(0.3)
|
|
Adjusted
EBITDA(1)
|
$
|
37.4
|
|
|
$
|
50.0
|
|
|
$
|
(12.6)
|
|
Sales Volume
(thousands of tons)
|
589
|
|
|
585
|
|
|
4
|
|
Adjusted EBITDA per
ton(2)
|
$
|
63.50
|
|
|
$
|
85.47
|
|
|
$
|
(21.97)
|
|
(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 decreased $0.3 million
primarily driven by the increased scope and duration of the planned
outage at Granite City as well as
a machinery fire that occurred at Granite
City in July 2018, which
lowered volume and energy revenues compared to the prior period.
These decreases were offset by the pass-through of higher coal
prices of $4.4 million compared to
the prior period.
Adjusted EBITDA decreased $12.6
million driven by higher operating and maintenance costs and
lower revenues from the outage and the machinery fire discussed
above, which negatively impacted results by $8.2 million and $2.6
million, respectively, as compared to the prior period. We
anticipate the Granite City outage
will be completed by late-November and will decrease fourth quarter
Adjusted EBITDA results by approximately $4
million. The incremental impact of these two events, which
was not factored into the company's full-year guidance, is
approximately $9 million.
Logistics
Logistics consists of the handling and
mixing services of coal and other aggregates operated by SXCP at
our Convent Marine Terminal ("CMT"), Lake Terminal and Kanawha
River Terminals ("KRT").
|
Three Months Ended
September 30,
|
(Dollars in
millions, except per ton amounts)
|
2018
|
|
2017
|
|
Increase
(Decrease)
|
Revenues
|
$
|
31.0
|
|
|
$
|
20.6
|
|
|
$
|
10.4
|
|
Intersegment
sales
|
$
|
1.7
|
|
|
$
|
1.6
|
|
|
$
|
0.1
|
|
Adjusted
EBITDA(1)
|
$
|
20.9
|
|
|
$
|
12.3
|
|
|
$
|
8.6
|
|
Tons handled
(thousands of tons)(2)
|
6,697
|
|
|
4,862
|
|
|
1,835
|
|
CMT take-or-pay
shortfall tons (thousands of tons)(3)
|
42
|
|
|
1,005
|
|
|
(963)
|
|
(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. Our two largest coal export customers did not have any
shortfall tons as of September 30, 2018.
|
Revenues and Adjusted EBITDA increased $10.4 million and $8.6
million, respectively, driven by 1.8 million of incremental
tons primarily at CMT. At the end of third quarter, we do not have
any shortfall tons related to our coal export customers as they
have shipped over their annual contractual obligations to date.
Given throughput volumes year-to-date and unlike previous fourth
quarters, we will not recognize deferred revenue in the fourth
quarter 2018.
Corporate and Other
Corporate and other expenses were
$3.7 million in the third quarter
2018 and were comparable to prior period.
2018 OUTLOOK
Our revised 2018 guidance is as follows:
- Adjusted EBITDA attributable to SXCP is expected to be between
$210 to $215
million
- Distributable Cash Flow expect to be between $110 to $115
million
- Capital expenditures are projected to be approximately
$61 million, including approximately
$30 million related to our
Granite City gas sharing
project
RELATED COMMUNICATIONS
We will host our quarterly earnings call at 8:30 a.m.
Eastern Time (7:30 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
may participate in this call by dialing 1-833-236-5757 in the U.S.
or 1-647-689-4185 if outside the U.S., confirmation code
8991756.
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 material handling services to coke, coal, steel, power and
other bulk and liquids customers. 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 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. SXCP's
General Partner is a wholly owned subsidiary of SunCoke Energy,
Inc. (NYSE: SXC), which has approximately 55 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,
taxes, depreciation and amortization ("EBITDA"), adjusted for any
loss (gain) on extinguishment of debt, and/or changes to our
contingent consideration liability related to our acquisition of
CMT. 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 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 generally
accepted accounting principles (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.
- Distributable Cash Flow Coverage Ratio equals
Distributable Cash Flow divided by estimated distributions to the
limited and general partners.
- Operating Cash Flow Coverage Ratio equals net cash
provided by operating activities divided by total estimated
distributions to the limited and general partners. Operating cash
flow is generally expected to be higher than Distributable Cash
Flow as Distributable Cash Flow is further reduced by certain cash
reserves including capital expenditures, an investing cash flow
item. Additionally, Distributable Cash Flow represents only the
Partnership's share of available cash by excluding Adjusted EBITDA
attributable to noncontrolling interest, while operating cash flow
is reported on a consolidated basis.
- 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.
- 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.
|
Consolidated
Statements of Operations
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars and units
in millions, except per unit amounts)
|
Revenues
|
|
|
|
|
|
|
|
|
Sales and other
operating revenue
|
|
$
|
224.1
|
|
|
$
|
214.0
|
|
|
$
|
667.5
|
|
|
$
|
610.2
|
|
Costs and
operating expenses
|
|
|
|
|
|
|
|
|
Cost of products sold
and operating expenses
|
|
162.2
|
|
|
146.2
|
|
|
484.3
|
|
|
431.0
|
|
Selling, general and
administrative expenses
|
|
7.8
|
|
|
7.4
|
|
|
24.7
|
|
|
24.4
|
|
Depreciation and
amortization expense
|
|
23.1
|
|
|
20.2
|
|
|
64.8
|
|
|
63.3
|
|
Total costs and
operating expenses
|
|
193.1
|
|
|
173.8
|
|
|
573.8
|
|
|
518.7
|
|
Operating
income
|
|
31.0
|
|
|
40.2
|
|
|
93.7
|
|
|
91.5
|
|
Interest expense,
net
|
|
14.9
|
|
|
15.1
|
|
|
44.9
|
|
|
41.7
|
|
Loss on
extinguishment of debt
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
20.0
|
|
Income before income
tax expense
|
|
16.1
|
|
|
25.0
|
|
|
48.8
|
|
|
29.8
|
|
Income tax
expense
|
|
0.4
|
|
|
1.7
|
|
|
1.0
|
|
|
150.7
|
|
Net income
(loss)
|
|
15.7
|
|
|
23.3
|
|
|
47.8
|
|
|
(120.9)
|
|
Less: Net income
(loss) attributable to noncontrolling interests
|
|
0.4
|
|
|
0.7
|
|
|
1.5
|
|
|
(1.3)
|
|
Net income (loss)
attributable to SunCoke Energy Partners, L.P.
|
|
$
|
15.3
|
|
|
$
|
22.6
|
|
|
$
|
46.3
|
|
|
$
|
(119.6)
|
|
|
|
|
|
|
|
|
|
|
General partner's
interest in net income
|
|
$
|
0.4
|
|
|
$
|
1.9
|
|
|
$
|
1.0
|
|
|
$
|
1.8
|
|
Limited partners'
interest in net income (loss)
|
|
$
|
14.9
|
|
|
$
|
20.7
|
|
|
$
|
45.3
|
|
|
$
|
(121.4)
|
|
Net income (loss) per
common unit (basic and diluted)
|
|
$
|
0.32
|
|
|
$
|
0.45
|
|
|
$
|
0.98
|
|
|
$
|
(2.63)
|
|
Weighted average
common units outstanding (basic and diluted)
|
|
46.2
|
|
|
46.2
|
|
|
46.2
|
|
|
46.2
|
|
SunCoke Energy
Partners, L.P.
|
Consolidated
Balance Sheets
|
|
|
|
September 30,
2018
|
|
December 31,
2017
|
|
|
(Unaudited)
|
|
|
|
|
(Dollars in
millions)
|
Assets
|
|
|
Cash and cash
equivalents
|
|
$
|
24.2
|
|
|
$
|
6.6
|
|
Receivables
|
|
53.2
|
|
|
42.2
|
|
Receivables from
affiliate, net
|
|
0.6
|
|
|
5.7
|
|
Inventories
|
|
82.1
|
|
|
79.4
|
|
Other current
assets
|
|
3.7
|
|
|
1.9
|
|
Total current
assets
|
|
163.8
|
|
|
135.8
|
|
Properties, plants
and equipment (net of accumulated depreciation of $479.1 million
and $423.1 million at September 30, 2018 and December 31, 2017,
respectively)
|
|
1,258.2
|
|
|
1,265.6
|
|
Goodwill
|
|
73.5
|
|
|
73.5
|
|
Other intangible
assets, net
|
|
158.4
|
|
|
166.2
|
|
Deferred charges and
other assets
|
|
0.2
|
|
|
0.3
|
|
Total
assets
|
|
$
|
1,654.1
|
|
|
$
|
1,641.4
|
|
Liabilities and
Equity
|
|
|
|
|
Accounts
payable
|
|
$
|
90.5
|
|
|
$
|
54.9
|
|
Accrued
liabilities
|
|
13.0
|
|
|
14.6
|
|
Deferred
revenue
|
|
2.6
|
|
|
1.7
|
|
Current portion of
long-term debt and financing obligation
|
|
2.7
|
|
|
2.6
|
|
Interest
payable
|
|
16.3
|
|
|
4.0
|
|
Total current
liabilities
|
|
125.1
|
|
|
77.8
|
|
Long-term debt and
financing obligation
|
|
793.3
|
|
|
818.4
|
|
Deferred income
taxes
|
|
120.3
|
|
|
119.2
|
|
Other deferred
credits and liabilities
|
|
10.8
|
|
|
10.1
|
|
Total
liabilities
|
|
1,049.5
|
|
|
1,025.5
|
|
Equity
|
|
|
|
|
Held by
public:
|
|
|
|
|
Common
units (issued 17,727,249 and 17,958,420 units at September 30,
2018 and December 31, 2017, respectively)
|
|
196.9
|
|
|
207.0
|
|
Held by
parent:
|
|
|
|
|
Common units (issued
28,499,899 and 28,268,728 units at September 30, 2018 and
December 31, 2017, respectively)
|
|
356.3
|
|
|
365.4
|
|
General partner's
interest
|
|
39.5
|
|
|
31.2
|
|
Partners' capital
attributable to SunCoke Energy Partners, L.P.
|
|
592.7
|
|
|
603.6
|
|
Noncontrolling
interest
|
|
11.9
|
|
|
12.3
|
|
Total
equity
|
|
604.6
|
|
|
615.9
|
|
Total liabilities and
equity
|
|
$
|
1,654.1
|
|
|
$
|
1,641.4
|
|
SunCoke Energy
Partners, L.P.
|
Consolidated
Statements of Cash Flows
|
(Unaudited)
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
(Dollars in
millions)
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net income
(loss)
|
|
$
|
47.8
|
|
|
$
|
(120.9)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization expense
|
|
64.8
|
|
|
63.3
|
|
Deferred income tax
expense
|
|
1.1
|
|
|
150.4
|
|
Loss on
extinguishment of debt
|
|
—
|
|
|
20.0
|
|
Changes in working
capital pertaining to operating activities:
|
|
|
|
|
Receivables
|
|
(11.0)
|
|
|
(6.3)
|
|
Receivables/payables
from affiliate, net
|
|
5.1
|
|
|
(5.9)
|
|
Inventories
|
|
(2.7)
|
|
|
(18.4)
|
|
Accounts
payable
|
|
30.3
|
|
|
16.6
|
|
Accrued
liabilities
|
|
(1.4)
|
|
|
2.8
|
|
Deferred
revenue
|
|
0.9
|
|
|
14.1
|
|
Interest
payable
|
|
12.3
|
|
|
2.3
|
|
Other
|
|
0.8
|
|
|
(5.3)
|
|
Net cash provided by
operating activities
|
|
148.0
|
|
|
112.7
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Capital
expenditures
|
|
(44.4)
|
|
|
(23.3)
|
|
Net cash used in
investing activities
|
|
(44.4)
|
|
|
(23.3)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Proceeds from
issuance of long-term debt
|
|
—
|
|
|
620.6
|
|
Repayment of
long-term debt
|
|
—
|
|
|
(644.9)
|
|
Repayment of
financing obligation
|
|
(1.9)
|
|
|
(1.8)
|
|
Proceeds from
revolving credit facility
|
|
127.2
|
|
|
268.0
|
|
Repayment of
revolving credit facility
|
|
(152.2)
|
|
|
(240.0)
|
|
Debt issuance
costs
|
|
—
|
|
|
(14.9)
|
|
Distributions to
unitholders (public and parent)
|
|
(67.2)
|
|
|
(89.7)
|
|
Distributions to
noncontrolling interest (SunCoke Energy, Inc.)
|
|
(1.9)
|
|
|
(1.7)
|
|
Capital contributions
from SunCoke
|
|
10.0
|
|
|
—
|
|
Net cash used in
financing activities
|
|
(86.0)
|
|
|
(104.4)
|
|
Net increase
(decrease) in cash and cash equivalents and restricted
cash
|
|
17.6
|
|
|
(15.0)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
|
6.6
|
|
|
42.3
|
|
Cash, cash
equivalents and restricted cash at end of period
|
|
$
|
24.2
|
|
|
$
|
27.3
|
|
Supplemental
Disclosure of Cash Flow Information
|
|
|
|
|
Interest
paid
|
|
$
|
32.3
|
|
|
$
|
38.3
|
|
Income taxes
paid
|
|
$
|
2.9
|
|
|
$
|
0.6
|
|
SunCoke Energy
Partners, L.P.
|
Segment Financial
and Operating Data
|
|
|
|
|
The following tables
set forth financial and operating data for the three and nine
months ended September 30, 2018 and 2017:
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions, except per ton amounts)
|
Sales and other
operating revenues:
|
|
|
|
|
|
|
|
Domestic
Coke
|
$
|
193.1
|
|
|
$
|
193.4
|
|
|
$
|
581.1
|
|
|
$
|
548.6
|
|
Logistics
|
31.0
|
|
|
20.6
|
|
|
86.4
|
|
|
61.6
|
|
Logistics
intersegment sales
|
1.7
|
|
|
1.6
|
|
|
5.2
|
|
|
4.9
|
|
Elimination of
intersegment sales
|
(1.7)
|
|
|
(1.6)
|
|
|
(5.2)
|
|
|
(4.9)
|
|
Total sales and other
operating revenues
|
$
|
224.1
|
|
|
$
|
214.0
|
|
|
$
|
667.5
|
|
|
$
|
610.2
|
|
Adjusted
EBITDA(1):
|
|
|
|
|
|
|
|
Domestic
Coke
|
$
|
37.4
|
|
|
$
|
50.0
|
|
|
$
|
118.7
|
|
|
$
|
130.0
|
|
Logistics
|
20.9
|
|
|
12.3
|
|
|
53.5
|
|
|
34.9
|
|
Corporate and
Other
|
(3.7)
|
|
|
(3.9)
|
|
|
(12.6)
|
|
|
(11.8)
|
|
Total Adjusted
EBITDA
|
$
|
54.6
|
|
|
$
|
58.4
|
|
|
$
|
159.6
|
|
|
$
|
153.1
|
|
Coke Operating
Data:
|
|
|
|
|
|
|
|
Domestic Coke
capacity utilization
|
102
|
%
|
|
103
|
%
|
|
101
|
%
|
|
100
|
%
|
Domestic Coke
production volumes (thousands of tons)
|
588
|
|
|
595
|
|
|
1,731
|
|
|
1,727
|
|
Domestic Coke sales
volumes (thousands of tons)
|
589
|
|
|
585
|
|
|
1,746
|
|
|
1,718
|
|
Domestic Coke
Adjusted EBITDA per ton(2)
|
$
|
63.50
|
|
|
$
|
85.47
|
|
|
$
|
67.98
|
|
|
$
|
75.67
|
|
Logistics
Operating Data:
|
|
|
|
|
|
|
|
Tons handled
(thousands of tons)(3)
|
6,697
|
|
|
4,862
|
|
|
18,915
|
|
|
15,220
|
|
CMT take-or-pay
shortfall tons (thousands of tons)(4)
|
42
|
|
|
1,005
|
|
|
147
|
|
|
2,505
|
|
(1)
|
See definition of
Adjusted EBITDA and reconciliation to GAAP elsewhere in this
release.
|
(2)
|
Reflects Domestic
Coke Adjusted EBITDA divided by Domestic Coke sales
volumes.
|
(3)
|
Reflects inbound tons
handled during the period.
|
(4)
|
Reflects tons billed
under take-or-pay contracts where services have not yet been
performed. Our two largest coal export customers did not have any
shortfall tons as of September 30, 2018.
|
SunCoke Energy
Partners, L.P.
|
Reconciliations of
Non-GAAP Information
|
Net Income (loss)
and Net Cash Provided by Operating Activities
|
to Adjusted
EBITDA
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
millions)
|
Net income
(loss)
|
|
$
|
15.7
|
|
|
$
|
23.3
|
|
|
$
|
47.8
|
|
|
$
|
(120.9)
|
|
Add:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
23.1
|
|
|
20.2
|
|
|
64.8
|
|
|
63.3
|
|
Interest expense,
net
|
|
14.9
|
|
|
15.1
|
|
|
44.9
|
|
|
41.7
|
|
Loss on
extinguishment of debt
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
20.0
|
|
Income tax
expense
|
|
0.4
|
|
|
1.7
|
|
|
1.0
|
|
|
150.7
|
|
Contingent
consideration adjustments
|
|
0.5
|
|
|
(2.0)
|
|
|
1.1
|
|
|
(1.7)
|
|
Adjusted
EBITDA
|
|
$
|
54.6
|
|
|
$
|
58.4
|
|
|
$
|
159.6
|
|
|
$
|
153.1
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
attributable to noncontrolling interest(1)
|
|
0.8
|
|
|
1.0
|
|
|
2.4
|
|
|
2.6
|
|
Adjusted EBITDA
attributable to SunCoke Energy Partners, L.P.
|
|
$
|
53.8
|
|
|
$
|
57.4
|
|
|
$
|
157.2
|
|
|
$
|
150.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(Dollars in
millions)
|
Net cash provided
by operating activities
|
|
$
|
72.6
|
|
|
$
|
61.1
|
|
|
$
|
148.0
|
|
|
$
|
112.7
|
|
Add:
|
|
|
|
|
|
|
|
|
Cash interest
paid
|
|
2.4
|
|
|
2.8
|
|
|
32.3
|
|
|
38.3
|
|
Cash income tax
paid
|
|
0.4
|
|
|
—
|
|
|
2.9
|
|
|
0.6
|
|
Changes in working
capital(2)
|
|
(18.8)
|
|
|
(8.8)
|
|
|
(21.2)
|
|
|
(2.9)
|
|
Contingent
consideration adjustments
|
|
0.5
|
|
|
(2.0)
|
|
|
1.1
|
|
|
(1.7)
|
|
Other adjustments to
reconcile cash provided by operating activities to Adjusted
EBITDA
|
|
(2.5)
|
|
|
5.3
|
|
|
(3.5)
|
|
|
6.1
|
|
Adjusted
EBITDA
|
|
$
|
54.6
|
|
|
$
|
58.4
|
|
|
$
|
159.6
|
|
|
$
|
153.1
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
attributable to noncontrolling
interest(1)
|
|
0.8
|
|
|
1.0
|
|
|
2.4
|
|
|
2.6
|
|
Adjusted EBITDA
attributable to SunCoke Energy Partners, L.P.
|
|
$
|
53.8
|
|
|
$
|
57.4
|
|
|
$
|
157.2
|
|
|
$
|
150.5
|
|
(1)
|
Reflects net income
attributable to noncontrolling interest adjusted for noncontrolling
interest's share of interest, taxes, income, and depreciation and
amortization.
|
(2)
|
Changes in working
capital exclude those items not impacting Adjusted EBITDA, such as
changes in interest payable and income taxes payable.
|
SunCoke Energy
Partners, L.P.
|
Reconciliations of
Non-GAAP Information
|
Net Income (loss)
and Operating Activities to
|
Distributable Cash
Flow
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(Dollars in
millions)
|
Net Income
(loss)
|
|
$
|
15.7
|
|
|
$
|
23.3
|
|
|
$
|
47.8
|
|
|
$
|
(120.9)
|
|
Add:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
|
23.1
|
|
|
20.2
|
|
|
64.8
|
|
|
63.3
|
|
Interest expense,
net
|
|
14.9
|
|
|
15.1
|
|
|
44.9
|
|
|
41.7
|
|
Loss on
extinguishment of debt
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
20.0
|
|
Income tax expense
(benefit)
|
|
0.4
|
|
|
1.7
|
|
|
1.0
|
|
|
150.7
|
|
Contingent
consideration adjustments
|
|
0.5
|
|
|
(2.0)
|
|
|
1.1
|
|
|
(1.7)
|
|
Logistics volume
shortfall billings(1)
|
|
(0.8)
|
|
|
4.2
|
|
|
0.3
|
|
|
12.9
|
|
Repayment of
corporate cost holiday deferral
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.4)
|
|
Subtract
|
|
|
|
|
|
|
|
|
Ongoing capex (SXCP
Share)
|
|
13.0
|
|
|
4.7
|
|
|
24.0
|
|
|
12.5
|
|
Replacement capex
accrual
|
|
1.9
|
|
|
1.9
|
|
|
5.8
|
|
|
5.7
|
|
Cash interest
accrual
|
|
15.1
|
|
|
14.7
|
|
|
45.1
|
|
|
40.2
|
|
Cash income tax
accrual(2)
|
|
0.6
|
|
|
0.6
|
|
|
1.7
|
|
|
1.8
|
|
Adjusted EBITDA
attributable to noncontrolling interest(3)
|
|
0.8
|
|
|
1.0
|
|
|
2.4
|
|
|
2.6
|
|
Distributable cash
flow
|
|
$
|
22.4
|
|
|
$
|
39.7
|
|
|
80.9
|
|
|
$
|
94.8
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
(Dollars in
millions)
|
Net cash provided
by operating activities
|
|
$
|
72.6
|
|
|
$
|
61.1
|
|
|
$
|
148.0
|
|
|
$
|
112.7
|
|
Add:
|
|
|
|
|
|
|
|
|
Cash interest
paid
|
|
2.4
|
|
|
2.8
|
|
|
32.3
|
|
|
38.3
|
|
Cash income tax
paid
|
|
0.4
|
|
|
—
|
|
|
2.9
|
|
|
0.6
|
|
Changes in working
capital(4)
|
|
(18.8)
|
|
|
(8.8)
|
|
|
(21.2)
|
|
|
(2.9)
|
|
Logistics volume
shortfall billings(1)
|
|
(0.8)
|
|
|
4.2
|
|
|
0.3
|
|
|
12.9
|
|
Repayment of
corporate cost holiday/deferral
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8.4)
|
|
Contingent
consideration adjustment
|
|
0.5
|
|
|
(2.0)
|
|
|
1.1
|
|
|
(1.7)
|
|
Other adjustments to
reconcile cash provided by operating activities to Adjusted
EBITDA
|
|
(2.5)
|
|
|
5.3
|
|
|
(3.5)
|
|
|
6.1
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Ongoing capex (SXCP
share)
|
|
13.0
|
|
|
4.7
|
|
|
24.0
|
|
|
12.5
|
|
Replacement capex
accrual
|
|
1.9
|
|
|
1.9
|
|
|
5.8
|
|
|
5.7
|
|
Cash interest
accrual
|
|
15.1
|
|
|
14.7
|
|
|
45.1
|
|
|
40.2
|
|
Cash income tax
accrual(2)
|
|
0.6
|
|
|
0.6
|
|
|
1.7
|
|
|
1.8
|
|
Adjusted EBITDA
attributable to noncontrolling interest(3)
|
|
0.8
|
|
|
1.0
|
|
|
2.4
|
|
|
2.6
|
|
Distributable cash
flow
|
|
$
|
22.4
|
|
|
$
|
39.7
|
|
|
$
|
80.9
|
|
|
$
|
94.8
|
|
Quarterly cash
distribution declared in the period
|
|
$
|
18.9
|
|
|
$
|
29.5
|
|
|
$
|
56.7
|
|
|
$
|
88.5
|
|
Operating cash
flow coverage ratio(5)
|
|
3.84
|
|
|
2.07
|
|
|
2.61
|
|
|
1.27
|
|
Distribution
coverage ratio(6)
|
|
1.19
|
|
|
1.35
|
|
|
1.43
|
|
|
1.07
|
|
(1)
|
Logistics volume
shortfall billings adjusts to include ton minimums billed
throughout the year in Distributable Cash Flow to better align with
cash collection. Volume shortfall billings on take-or-pay contracts
are recorded as deferred revenue and are recognized into GAAP
income based on the terms of the contract, at which time they will
be excluded from Distributable Cash Flow.
|
(2)
|
Cash tax impact from
the operations of Gateway Cogeneration Company LLC, which is an
entity subject to income taxes for federal and state purposes at
the corporate level.
|
(3)
|
Reflects net income
attributable to noncontrolling interest adjusted for noncontrolling
interest's share of interest, taxes, income, and depreciation and
amortization.
|
(4)
|
Changes in working
capital exclude those items not impacting Adjusted EBITDA, such as
changes in interest payable and income taxes payable.
|
(5)
|
Operating cash flow
coverage ratio is net cash provided by operating activities divided
by total estimated distributions to the limited and general
partners. Operating cash flow is generally expected to be
higher than Distributable Cash Flow as Distributable Cash Flow is
further reduced by certain cash reserves including capital
expenditures, an investing cash flow item. Additionally,
Distributable Cash Flow represents only the Partnership's share of
available cash by excluding Adjusted EBITDA attributable to
noncontrolling interest, while operating cash flow is reported on a
consolidated basis.
|
(6)
|
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 Net
Income and Net Cash Provided by Operating Activities
|
to Estimated
2018 Consolidated Adjusted EBITDA
|
|
|
|
The Partnership has
revised its full year 2018 Adjusted EBITDA guidance range as a
result of the higher than expected outage costs and a machinery
fire at our Granite City facility. Below is a reconciliation
of revised 2018 estimated Adjusted EBITDA from its closest GAAP
measures:
|
|
|
|
|
|
2018
|
|
|
Low
|
|
High
|
|
|
(Dollars in
millions)
|
Net
Income
|
|
$
|
54
|
|
|
$
|
64
|
|
Add:
|
|
|
|
|
Depreciation and
amortization expense(1)
|
|
97
|
|
|
92
|
|
Interest
expense
|
|
60
|
|
|
60
|
|
Income tax
expense
|
|
2
|
|
|
3
|
|
Adjusted
EBITDA
|
|
$
|
213
|
|
|
$
|
219
|
|
Subtract:
|
|
|
|
|
Adjusted EBITDA
attributable to noncontrolling interest(2)
|
|
3
|
|
|
4
|
|
Adjusted EBITDA
attributable to SunCoke Energy Partners, L.P.
|
|
$
|
210
|
|
|
$
|
215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
Low
|
|
High
|
|
|
(Dollars in
millions)
|
Net cash provided
by operating activities
|
|
$
|
140
|
|
|
$
|
150
|
|
Add:
|
|
|
|
|
Cash interest
paid
|
|
60
|
|
|
60
|
|
Cash income tax
paid
|
|
2
|
|
|
3
|
|
Changes in working
capital and other(3)
|
|
11
|
|
|
6
|
|
Adjusted
EBITDA
|
|
$
|
213
|
|
|
$
|
219
|
|
Subtract:
|
|
|
|
|
Adjusted EBITDA
attributable to noncontrolling interest(2)
|
|
3
|
|
|
4
|
|
Adjusted EBITDA
attributable to SunCoke Energy Partners, L.P.
|
|
$
|
210
|
|
|
$
|
215
|
|
(1)
|
Reflects revisions in
estimated useful lives of certain assets in our Domestic Coke
segment made in the third quarter.
|
(2)
|
Reflects net income
attributable to noncontrolling interest adjusted for noncontrolling
interest's share of interest, taxes, income, and depreciation and
amortization.
|
(3)
|
Changes in working
capital exclude those items not impacting Adjusted EBITDA, such as
changes in interest payable and income taxes payable.
|
SunCoke Energy
Partners, L.P.
|
Reconciliations of
Non-GAAP Information
|
Estimated Net
Income and Net Cash Provided by Operating Activities
|
to Estimated 2018
Distributable Cash Flow
|
|
|
|
The Partnership has
revised its full year 2018 Distributable Cash Flow guidance range
as a result of the higher than expected outage costs and a
machinery fire at our Granite City facility. Below is a
reconciliation of revised 2018 estimated Distributable Cash Flow
from its closest GAAP measures:
|
|
|
|
|
|
2018
|
|
|
Low
|
|
High
|
Net
Income
|
|
$
|
54
|
|
|
$
|
64
|
|
Add:
|
|
|
|
|
Depreciation and
amortization expense(1)
|
|
97
|
|
|
92
|
|
Interest
expense
|
|
60
|
|
|
60
|
|
Income tax
expense
|
|
2
|
|
|
3
|
|
Subtract:
|
|
|
|
|
Ongoing capex (SXCP
share)(2)
|
|
30
|
|
|
30
|
|
Replacement capex
accrual
|
|
8
|
|
|
8
|
|
Cash interest
accrual(3)
|
|
60
|
|
|
60
|
|
Cash tax
accrual(4)
|
|
2
|
|
|
2
|
|
Adjusted EBITDA
attributable to noncontrolling interest(5)
|
|
3
|
|
|
4
|
|
Distributable Cash
Flow
|
|
$
|
110
|
|
|
$
|
115
|
|
|
|
|
|
|
|
|
2018
|
|
|
Low
|
|
High
|
Net cash provided
by operating activities
|
|
$
|
140
|
|
|
$
|
150
|
|
Add:
|
|
|
|
|
Cash Interest
paid
|
|
60
|
|
|
60
|
|
Cash Income tax
paid
|
|
2
|
|
|
3
|
|
Changes in working
capital(6)
|
|
11
|
|
|
6
|
|
Subtract:
|
|
|
|
|
Ongoing capex (SXCP
share)(2)
|
|
30
|
|
|
30
|
|
Replacement capex
accrual
|
|
8
|
|
|
8
|
|
Cash interest
accrual(4)
|
|
60
|
|
|
60
|
|
Cash tax
accrual(5)
|
|
2
|
|
|
2
|
|
Adjusted EBITDA
attributable to noncontrolling interest(5)
|
|
3
|
|
|
4
|
|
Distributable Cash
Flow
|
|
$
|
110
|
|
|
$
|
115
|
|
Estimated
distributions(7)
|
|
$
|
76
|
|
|
$
|
76
|
|
Operating cash
flow coverage ratio(8)
|
|
1.85x
|
|
|
1.99x
|
|
Distribution cash
coverage ratio(9)
|
|
1.46x
|
|
|
1.52x
|
|
(1)
|
Reflects revisions in
estimated useful lives of certain assets in our Domestic Coke
segment made in the third quarter.
|
(2)
|
Increased from $25M
to $30M as a result of additional ongoing capex from increased
scope to the Granite City outage.
|
(3)
|
Revised cash interest
accrual from $57M to $60M as a result of higher interest
rates.
|
(4)
|
Cash tax impact from
the operations of Gateway Cogeneration Company LLC, which is an
entity subject to income taxes for federal and state purposes at
the corporate level.
|
(5)
|
Reflects net income
attributable to noncontrolling interest adjusted for noncontrolling
interest's share of interest, taxes, income, and depreciation and
amortization.
|
(6)
|
Changes in working
capital exclude those items not impacting Adjusted EBITDA, such as
changes in interest payable and income taxes payable.
|
(7)
|
Estimated
distributions assumes distributions are held constant at $0.40 per
unit each quarter.
|
(8)
|
Operating cash flow
coverage ratio is net cash provided by operating activities divided
by total estimated distributions to the limited and general
partners. Operating cash flow is generally expected to be
higher than Distributable Cash Flow as Distributable Cash Flow is
further reduced by certain cash reserves including capital
expenditures, an investing cash flow item. Additionally,
Distributable Cash Flow represents only the Partnership's share of
available cash by excluding Adjusted EBITDA attributable to
noncontrolling interest, while operating cash flow is reported on a
consolidated basis.
|
(9)
|
Distribution cash
coverage ratio is distributable cash flow divided by total
estimated distributions to the limited and general
partners.
|
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SOURCE SunCoke Energy Partners, L.P.