SunCoke Energy, Inc. Announces Second Quarter 2016 Results
-
Net loss attributable to SXC was $4.6 million, or $0.07 per share, in
the current period compared to a loss of $13.5 million, or $0.21 per
share, in the prior year period
-
Adjusted EBITDA was $46.5 million, up $13.1 million versus the prior
year period
-
Reduced consolidated debt outstanding by $57.5 million, including
SXCP's repurchase of $17.1 million of face value bonds during the
quarter
-
Reaffirmed full-year guidance for 2016 Consolidated Adjusted EBITDA of
$210 million to $235 million
SunCoke Energy, Inc. (NYSE: SXC) today reported results for the second
quarter 2016, which reflect the absence of a non-cash pension plan
termination charge in the prior year period and comparable
year-over-year operating results after considering several offsetting
factors described below.
“In the second quarter, we delivered results in line with expectations
for our cokemaking business, but continue to experience production
shortfalls at Indiana Harbor and saw low volumes across our Coal
Logistics franchise," said Fritz Henderson, Chairman, President and
Chief Executive Officer of SunCoke Energy, Inc. "Despite these
challenges, our take-or-pay contracts continue to underpin our steady
results and we remain committed to optimizing asset performance across
the business."
SunCoke continued to de-lever its balance sheet by reducing total debt
outstanding by more than $57 million in the quarter. The Company also
reaffirmed its full-year outlook for 2016 Consolidated Adjusted EBITDA
of $210 million to $235 million.
Henderson added, "With the first half of the year behind us, we are in
position to deliver on our commitments to shareholders and remain
flexible and responsive to the evolving industry landscape."
SECOND QUARTER CONSOLIDATED RESULTS(1)
|
|
|
|
|
Three Months Ended June 30,
|
(Dollars in millions)
|
|
2016
|
|
2015
|
|
Increase/ (Decrease)
|
Revenues
|
|
$
|
292.7
|
|
|
$
|
348.2
|
|
|
$
|
(55.5
|
)
|
Net loss attributable to SXC
|
|
$
|
(4.6
|
)
|
|
$
|
(13.5
|
)
|
|
$
|
8.9
|
|
Adjusted EBITDA(2)
|
|
$
|
46.5
|
|
|
$
|
33.4
|
|
|
$
|
13.1
|
|
(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 declined $55.5 million to $292.7 million in second quarter 2016
compared with the same prior year period, primarily reflecting the
pass-through of lower coal costs as well as lower coke sales volumes.
Net loss attributable to SXC was $4.6 million, or $0.07 per share, in
the current period compared to a loss of $13.5 million, or $0.21 per
share, in the prior year period. The current period was impacted by a
$3.5 million gain on the extinguishment of debt, a $5.1 million loss on
the divestiture of the coal mining business, as well as the items
discussed below.
Adjusted EBITDA increased $13.1 million to $46.5 million, primarily due
to lower operational costs at Indiana Harbor and our divested coal
mining business, the contribution from the Convent Marine Terminal
("CMT") acquisition and the lapping of a second quarter 2015 pension
termination charge of $12.6 million. These items were partly offset by
lower sales volumes as mentioned above.
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)
|
|
2016
|
|
2015
|
|
Increase/ (Decrease)
|
Revenues
|
|
$
|
274.0
|
|
|
$
|
326.5
|
|
|
$
|
(52.5
|
)
|
Adjusted EBITDA(1)
|
|
$
|
51.0
|
|
|
$
|
56.2
|
|
|
$
|
(5.2
|
)
|
Sales volumes (thousands of tons)
|
|
992
|
|
|
1,110
|
|
|
(118
|
)
|
Adjusted EBITDA per ton(2)
|
|
$
|
51.41
|
|
|
$
|
50.63
|
|
|
$
|
0.78
|
|
(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 both the pass-through of lower coal prices
and a decrease in sales volume of 118 thousand tons, primarily due to
the timing of shipments at Jewell, lower production at Indiana Harbor
and the impact of customer volume accommodations at Haverhill.
-
Adjusted EBITDA decreased $5.2 million, reflecting lower sales
volumes, the complete write-off of a $1.4 million receivable related
to 2015 spot coke sales to Essar Algoma and $1.3 million of coal
transportation charges, which were transferred to our Domestic Coke
segment as a result of the divestiture of our coal mining business.
These decreases were partly offset by lower operating and maintenance
spending at Indiana Harbor of $4.6 million as compared to the same
prior year period.
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, Kanawha River Terminals, LLC
("KRT"), which has terminals along the Ohio and Kanawha rivers in West
Virginia, and Dismal River Terminal ("DRT"), located in Virginia
adjacent to our Jewell Cokemaking facility. DRT was constructed to
accommodate Jewell in its direct procurement of third-party coal,
beginning in 2016. 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 June 30,
|
(Dollars in millions, except per ton
amounts)
|
|
2016
|
|
2015
|
|
Increase/ (Decrease)
|
Revenues
|
|
$
|
11.2
|
|
|
$
|
8.6
|
|
|
$
|
2.6
|
|
Intersegment sales
|
|
$
|
5.2
|
|
|
$
|
4.9
|
|
|
$
|
0.3
|
|
Adjusted EBITDA(1)
|
|
$
|
5.4
|
|
|
$
|
5.0
|
|
|
$
|
0.4
|
|
Tons handled, excluding CMT (thousands of tons)(2)
|
|
3,232
|
|
|
4,366
|
|
|
(1,134
|
)
|
Tons handled by CMT (thousands of tons)(2)
|
|
976
|
|
|
—
|
|
|
976
|
|
(1)
|
|
See definition of Adjusted EBITDA and reconciliation elsewhere in
this release.
|
(2)
|
|
Reflects inbound tons handled during the period.
|
|
|
|
-
Revenues were up $2.6 million, driven by a $7.0 million contribution
from CMT, partly offset by lower volumes at KRT and Lake Terminal.
-
Adjusted EBITDA was up $0.4 million, driven by a $4.2 million
contribution from CMT, partly offset by lower volumes at KRT and Lake
Terminal. Below-target throughput in the quarter was driven by
demand-side challenges in both the thermal and metallurgical coal
markets.
Brazil Coke
Brazil Coke consists of a cokemaking facility in Vitória, Brazil, which
we operate for an affiliate of ArcelorMittal. Brazil Coke earns
operating and technology licensing fees based on production and
recognizes a dividend on a preferred stock investment assuming certain
minimum production levels are achieved.
-
Adjusted EBITDA of $2.4 million was comparable to the prior year period
Coal Mining
In April 2016, the Company divested substantially all of its coal mining
business to Revelation Energy, LLC, which resulted in a total loss of
$14.7 million, of which $9.6 million and $5.1 million were recorded in
the first and second quarters of 2016, respectively.
-
Adjusted EBITDA, which excludes the $5.1 million loss on divestiture
discussed above, was a loss of $0.9 million in the current year period
compared to a loss of $5.4 million in the prior year period. The
improved results reflect a shift of $1.3 million of coal
transportation to our Domestic Coke segment and lower operating costs
due to the divestiture of our coal mining business, which was
completed in the quarter.
Corporate and Other
Corporate and other expenses, including legacy costs, were $11.4 million
in second quarter 2016, an improvement of $13.6 million versus second
quarter 2015, driven by a $12.6 million non-cash pension plan
termination charge in the second quarter 2015. Current period savings
from lower headcount also contributed to lower corporate costs.
2016 OUTLOOK
Our 2016 guidance is as follows:
-
Domestic coke production is expected to be between 4.0 million and
4.1 million tons
-
Consolidated Adjusted EBITDA is expected to be between $210 million
and $235 million
-
Adjusted EBITDA attributable to SXC is expected to be between $105
million and $124 million, reflecting the impact of public ownership in
SXCP
-
Capital expenditures are projected to be approximately $45 million
-
Cash generated by operations is estimated to be between $150 million
and $170 million
-
Cash taxes are projected to be between $4 million and $9 million
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 1-866-393-4306 in the
U.S. or 1-617-826-1698 if outside the U.S., confirmation code 43197747.
UPCOMING EVENTS
Additionally, we plan to participate in the following events:
-
Citi MLP/Midstream Infrastructure Conference, August 17, 2016, Las
Vegas, Nevada
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, 2016, we owned
the general partner of the Partnership, which consists of a 2.0 percent
ownership interest and incentive distribution rights, and owned a 53.9
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, (gain) loss 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
interest, taxes, depreciation and amortization and impairments
attributable to our equity method investment. 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.
-
Legacy Costs include costs
associated with former mining employee-related liabilities net of
certain royalty revenues.
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,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(Dollars and shares in millions, except per share amounts)
|
Revenues
|
|
|
|
|
|
|
|
|
Sales and other operating revenue
|
|
$
|
292.6
|
|
|
$
|
347.6
|
|
|
$
|
603.1
|
|
|
$
|
671.5
|
|
Other income, net
|
|
0.1
|
|
|
0.6
|
|
|
0.7
|
|
|
0.7
|
|
Total revenues
|
|
292.7
|
|
|
348.2
|
|
|
603.8
|
|
|
672.2
|
|
Costs and operating expenses
|
|
|
|
|
|
|
|
|
Cost of products sold and operating expenses
|
|
224.4
|
|
|
296.0
|
|
|
464.9
|
|
|
558.1
|
|
Selling, general and administrative expenses
|
|
23.7
|
|
|
19.4
|
|
|
47.0
|
|
|
32.0
|
|
Depreciation and amortization expense
|
|
28.6
|
|
|
26.4
|
|
|
56.8
|
|
|
50.2
|
|
Loss on divestiture of business
|
|
5.1
|
|
|
—
|
|
|
14.7
|
|
|
—
|
|
Total costs and operating expenses
|
|
281.8
|
|
|
341.8
|
|
|
583.4
|
|
|
640.3
|
|
Operating income
|
|
10.9
|
|
|
6.4
|
|
|
20.4
|
|
|
31.9
|
|
Interest expense, net
|
|
13.4
|
|
|
13.0
|
|
|
27.4
|
|
|
26.9
|
|
(Gain) loss on extinguishment of debt
|
|
(3.5
|
)
|
|
—
|
|
|
(23.9
|
)
|
|
9.4
|
|
Income (loss) before income tax expense and loss from equity method
investment
|
|
1.0
|
|
|
(6.6
|
)
|
|
16.9
|
|
|
(4.4
|
)
|
Income tax (benefit) expense
|
|
—
|
|
|
(0.8
|
)
|
|
3.3
|
|
|
0.3
|
|
Loss from equity method investment
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
1.4
|
|
Net income (loss)
|
|
1.0
|
|
|
(6.5
|
)
|
|
13.6
|
|
|
(6.1
|
)
|
Less: Net income attributable to noncontrolling interests
|
|
5.6
|
|
|
7.0
|
|
|
22.3
|
|
|
11.4
|
|
Net loss attributable to SunCoke Energy, Inc.
|
|
$
|
(4.6
|
)
|
|
$
|
(13.5
|
)
|
|
$
|
(8.7
|
)
|
|
$
|
(17.5
|
)
|
Loss attributable to SunCoke Energy, Inc. per common share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.07
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.27
|
)
|
Diluted
|
|
$
|
(0.07
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
(0.27
|
)
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
64.2
|
|
|
65.2
|
|
|
64.1
|
|
|
65.7
|
|
Diluted
|
|
64.2
|
|
|
65.2
|
|
|
64.1
|
|
|
65.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SunCoke Energy, Inc.
|
Consolidated Balance Sheets
|
(Unaudited)
|
|
|
|
June 30,
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
|
(Dollars in millions, except
|
|
|
par value amounts)
|
Assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
108.0
|
|
|
$
|
123.4
|
|
Receivables
|
|
48.2
|
|
|
64.6
|
|
Inventories
|
|
106.4
|
|
|
121.8
|
|
Income tax receivable
|
|
9.7
|
|
|
11.6
|
|
Other current assets
|
|
7.2
|
|
|
3.9
|
|
Assets held for sale
|
|
—
|
|
|
0.9
|
|
Total current assets
|
|
279.5
|
|
|
326.2
|
|
Restricted cash
|
|
2.3
|
|
|
18.2
|
|
Investment in Brazilian cokemaking operations
|
|
41.0
|
|
|
41.0
|
|
Properties, plants and equipment (net of accumulated depreciation of
$637.2 million and $656.4 million at June 30, 2016 and December 31,
2015, respectively)
|
|
1,558.3
|
|
|
1,582.0
|
|
Goodwill
|
|
70.5
|
|
|
71.1
|
|
Other intangible assets, net
|
|
184.6
|
|
|
190.2
|
|
Deferred charges and other assets
|
|
5.8
|
|
|
15.4
|
|
Long-term assets held for sale
|
|
—
|
|
|
11.4
|
|
Total assets
|
|
$
|
2,142.0
|
|
|
$
|
2,255.5
|
|
Liabilities and Equity
|
|
|
|
|
Accounts payable
|
|
$
|
91.7
|
|
|
$
|
99.8
|
|
Accrued liabilities
|
|
50.3
|
|
|
42.9
|
|
Deferred revenue
|
|
20.3
|
|
|
2.1
|
|
Current portion of long-term debt
|
|
1.1
|
|
|
1.1
|
|
Interest payable
|
|
16.8
|
|
|
18.9
|
|
Liabilities held for sale
|
|
—
|
|
|
0.9
|
|
Total current liabilities
|
|
180.2
|
|
|
165.7
|
|
Long-term debt
|
|
887.3
|
|
|
997.7
|
|
Accrual for black lung benefits
|
|
45.1
|
|
|
44.7
|
|
Retirement benefit liabilities
|
|
30.1
|
|
|
31.3
|
|
Deferred income taxes
|
|
352.9
|
|
|
349.0
|
|
Asset retirement obligations
|
|
13.8
|
|
|
16.3
|
|
Other deferred credits and liabilities
|
|
16.9
|
|
|
22.1
|
|
Long-term liabilities held for sale
|
|
—
|
|
|
5.9
|
|
Total liabilities
|
|
1,526.3
|
|
|
1,632.7
|
|
Equity
|
|
|
|
|
Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no
issued shares at June 30, 2016 and December 31, 2015
|
|
—
|
|
|
—
|
|
Common stock, $0.01 par value. Authorized 300,000,000 shares; issued
71,657,185 and 71,489,448 shares at June 30, 2016 and December 31,
2015, respectively
|
|
0.7
|
|
|
0.7
|
|
Treasury stock, 7,477,657 shares at June 30, 2016 and December 31,
2015, respectively
|
|
(140.7
|
)
|
|
(140.7
|
)
|
Additional paid-in capital
|
|
489.0
|
|
|
486.1
|
|
Accumulated other comprehensive loss
|
|
(18.7
|
)
|
|
(19.8
|
)
|
Retained deficit
|
|
(45.1
|
)
|
|
(36.4
|
)
|
Total SunCoke Energy, Inc. stockholders’ equity
|
|
285.2
|
|
|
289.9
|
|
Noncontrolling interests
|
|
330.5
|
|
|
332.9
|
|
Total equity
|
|
615.7
|
|
|
622.8
|
|
Total liabilities and equity
|
|
$
|
2,142.0
|
|
|
$
|
2,255.5
|
|
|
|
|
|
|
|
|
|
|
SunCoke Energy, Inc.
|
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
|
Six Months Ended June 30,
|
|
|
2016
|
|
2015
|
|
|
(Dollars in millions)
|
Cash Flows from Operating Activities:
|
|
|
|
|
Net income (loss)
|
|
$
|
13.6
|
|
|
$
|
(6.1
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
|
|
|
|
|
Loss on divestiture of business
|
|
14.7
|
|
|
—
|
|
Depreciation and amortization expense
|
|
56.8
|
|
|
50.2
|
|
Deferred income tax expense
|
|
3.6
|
|
|
(1.1
|
)
|
Settlement loss and expense for pension plan
|
|
—
|
|
|
13.1
|
|
Gain on curtailment and payments in excess of expense for
postretirement plan benefits
|
|
(1.2
|
)
|
|
(5.5
|
)
|
Share-based compensation expense
|
|
3.4
|
|
|
4.2
|
|
Loss from equity method investment
|
|
—
|
|
|
1.4
|
|
(Gain) loss on extinguishment of debt
|
|
(23.9
|
)
|
|
9.4
|
|
Changes in working capital pertaining to operating activities (net
of the effects of divestiture):
|
|
|
|
|
Receivables
|
|
16.2
|
|
|
21.5
|
|
Inventories
|
|
15.5
|
|
|
36.0
|
|
Accounts payable
|
|
(5.5
|
)
|
|
(25.4
|
)
|
Accrued liabilities
|
|
7.0
|
|
|
(18.9
|
)
|
Deferred revenue
|
|
18.2
|
|
|
—
|
|
Interest payable
|
|
(2.1
|
)
|
|
1.9
|
|
Income taxes
|
|
1.9
|
|
|
(0.9
|
)
|
Other
|
|
3.3
|
|
|
(3.2
|
)
|
Net cash provided by operating activities
|
|
121.5
|
|
|
76.6
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
Capital expenditures
|
|
(30.2
|
)
|
|
(22.5
|
)
|
Decrease in restricted cash
|
|
15.9
|
|
|
—
|
|
Divestiture of coal business
|
|
(12.1
|
)
|
|
—
|
|
Other investing activities
|
|
2.1
|
|
|
—
|
|
Net cash used in investing activities
|
|
(24.3
|
)
|
|
(22.5
|
)
|
Cash Flows from Financing Activities:
|
|
|
|
|
Proceeds from issuance of long-term debt
|
|
—
|
|
|
210.8
|
|
Repayment of long-term debt
|
|
(47.0
|
)
|
|
(149.5
|
)
|
Debt issuance costs
|
|
—
|
|
|
(4.8
|
)
|
Proceeds from revolving credit facility
|
|
20.0
|
|
|
—
|
|
Repayment of revolving credit facility
|
|
(60.4
|
)
|
|
—
|
|
Cash distribution to noncontrolling interests
|
|
(24.7
|
)
|
|
(18.7
|
)
|
Shares repurchased
|
|
—
|
|
|
(20.0
|
)
|
Proceeds from exercise of stock options, net of shares withheld for
taxes
|
|
(0.5
|
)
|
|
(0.4
|
)
|
Dividends paid
|
|
—
|
|
|
(8.8
|
)
|
Net cash (used in) provided by financing activities
|
|
(112.6
|
)
|
|
8.6
|
|
Net (decrease) increase in cash and cash equivalents
|
|
(15.4
|
)
|
|
62.7
|
|
Cash and cash equivalents at beginning of period
|
|
123.4
|
|
|
139.0
|
|
Cash and cash equivalents at end of period
|
|
$
|
108.0
|
|
|
$
|
201.7
|
|
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
Interest paid
|
|
$
|
30.8
|
|
|
$
|
25.0
|
|
Income taxes paid, net of refunds of $4.0 million in 2016 and no
refunds in 2015
|
|
$
|
(2.2
|
)
|
|
$
|
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, 2016 and 2015:
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(Dollars in millions, except per ton amounts)
|
Sales and other operating revenues:
|
|
|
|
|
|
|
|
|
Domestic Coke
|
|
$
|
274.0
|
|
|
$
|
326.5
|
|
|
$
|
563.0
|
|
|
$
|
629.6
|
|
Brazil Coke
|
|
7.4
|
|
|
8.5
|
|
|
15.1
|
|
|
18.4
|
|
Coal Logistics
|
|
11.2
|
|
|
8.6
|
|
|
24.2
|
|
|
15.9
|
|
Coal Logistics intersegment sales
|
|
5.2
|
|
|
4.9
|
|
|
10.4
|
|
|
9.6
|
|
Coal Mining
|
|
—
|
|
|
4.0
|
|
|
0.8
|
|
|
7.6
|
|
Coal Mining intersegment sales
|
|
0.7
|
|
|
24.8
|
|
|
22.0
|
|
|
49.0
|
|
Elimination of intersegment sales
|
|
(5.9
|
)
|
|
(29.7
|
)
|
|
(32.4
|
)
|
|
(58.6
|
)
|
Total sales and other operating revenue
|
|
$
|
292.6
|
|
|
$
|
347.6
|
|
|
$
|
603.1
|
|
|
$
|
671.5
|
|
Adjusted EBITDA(1):
|
|
|
|
|
|
|
|
|
Domestic Coke
|
|
$
|
51.0
|
|
|
$
|
56.2
|
|
|
$
|
105.3
|
|
|
$
|
108.9
|
|
Brazil Coke
|
|
2.4
|
|
|
2.6
|
|
|
4.7
|
|
|
6.7
|
|
Coal Logistics
|
|
5.4
|
|
|
5.0
|
|
|
11.3
|
|
|
7.6
|
|
Coal Mining
|
|
(0.9
|
)
|
|
(5.4
|
)
|
|
(5.0
|
)
|
|
(8.5
|
)
|
Corporate and Other, including legacy costs, net(2)
|
|
(11.4
|
)
|
|
(25.0
|
)
|
|
(26.0
|
)
|
|
(33.4
|
)
|
Total Adjusted EBITDA
|
|
$
|
46.5
|
|
|
$
|
33.4
|
|
|
$
|
90.3
|
|
|
$
|
81.3
|
|
Coke Operating Data:
|
|
|
|
|
|
|
|
|
Domestic Coke capacity utilization (%)
|
|
95
|
|
|
99
|
|
|
94
|
|
|
97
|
|
Domestic Coke production volumes (thousands of tons)
|
|
998
|
|
|
1,047
|
|
|
1,989
|
|
|
2,045
|
|
Domestic Coke sales volumes (thousands of tons)
|
|
992
|
|
|
1,110
|
|
|
1,992
|
|
|
2,059
|
|
Domestic Coke Adjusted EBITDA per ton(3)
|
|
$
|
51.41
|
|
|
$
|
50.63
|
|
|
$
|
52.86
|
|
|
$
|
52.89
|
|
Brazilian Coke production—operated facility (thousands of tons)
|
|
431
|
|
|
437
|
|
|
845
|
|
|
876
|
|
Coal Logistics Operating Data:
|
|
|
|
|
|
|
|
|
Tons handled, excluding CMT (thousands of tons)(4)
|
|
3,232
|
|
|
4,366
|
|
|
6,602
|
|
|
8,160
|
|
Tons handled by CMT (thousands of tons)(4)
|
|
976
|
|
|
—
|
|
|
1,921
|
|
|
—
|
|
(1)
|
|
See definition of Adjusted EBITDA and reconciliation to GAAP
elsewhere in this release.
|
(2)
|
|
Legacy costs, net include costs associated with former mining
employee-related liabilities net of certain royalty revenues. See
details of these legacy items below.
|
(3)
|
|
Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke
sales volumes.
|
(4)
|
|
Reflects inbound tons handled during the period.
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
June 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
(Dollars in millions)
|
Black lung charges
|
|
$
|
(1.8
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
(3.5
|
)
|
|
$
|
(1.9
|
)
|
Postretirement benefit plan (expense) benefit
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|
(0.4
|
)
|
|
3.8
|
|
Defined benefit plan expense, including termination charges
|
|
—
|
|
|
(12.9
|
)
|
|
—
|
|
|
(13.1
|
)
|
Workers' compensation expense
|
|
(0.1
|
)
|
|
(0.5
|
)
|
|
(0.4
|
)
|
|
(1.4
|
)
|
Other
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
Total legacy (costs) income, net
|
|
$
|
(2.1
|
)
|
|
$
|
(15.2
|
)
|
|
$
|
(4.3
|
)
|
|
$
|
(13.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SunCoke Energy, Inc.
|
Reconciliations of Non-GAAP Information
|
Adjusted EBITDA to Net (Loss) Income and Net Cash Provided by
Operating Activities
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2016
|
|
2015
|
|
2016(1)
|
|
2015
|
|
|
(Dollars in millions)
|
Net cash provided by operating activities
|
|
$
|
92.1
|
|
|
$
|
65.5
|
|
|
$
|
121.5
|
|
|
$
|
76.6
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Loss on divestiture of business
|
|
5.1
|
|
|
—
|
|
|
14.7
|
|
|
—
|
|
Depreciation and amortization expense
|
|
28.6
|
|
|
26.4
|
|
|
56.8
|
|
|
50.2
|
|
Deferred income tax expense (benefit)
|
|
0.4
|
|
|
(4.2
|
)
|
|
3.6
|
|
|
(1.1
|
)
|
(Gain) loss on extinguishment of debt
|
|
(3.5
|
)
|
|
—
|
|
|
(23.9
|
)
|
|
9.4
|
|
Changes in working capital and other
|
|
60.5
|
|
|
49.8
|
|
|
56.7
|
|
|
24.2
|
|
Net Income
|
|
$
|
1.0
|
|
|
$
|
(6.5
|
)
|
|
$
|
13.6
|
|
|
$
|
(6.1
|
)
|
Add:
|
|
|
|
|
|
|
|
|
Adjustment to unconsolidated affiliate earnings(2)
|
|
$
|
—
|
|
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
1.0
|
|
Coal rationalization costs (income)(3)
|
|
—
|
|
|
0.6
|
|
|
0.2
|
|
|
(0.4
|
)
|
Depreciation and amortization expense
|
|
28.6
|
|
|
26.4
|
|
|
56.8
|
|
|
50.2
|
|
Interest expense, net
|
|
13.4
|
|
|
13.0
|
|
|
27.4
|
|
|
26.9
|
|
(Gain) loss on extinguishment of debt
|
|
(3.5
|
)
|
|
—
|
|
|
(23.9
|
)
|
|
9.4
|
|
Income tax (benefit) expense
|
|
—
|
|
|
(0.8
|
)
|
|
3.3
|
|
|
0.3
|
|
Loss on divestiture of business
|
|
5.1
|
|
|
—
|
|
|
14.7
|
|
|
—
|
|
Reduction of contingent consideration(4)
|
|
—
|
|
|
—
|
|
|
(3.7
|
)
|
|
—
|
|
Expiration of land deposits(5)
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
Adjusted EBITDA
|
|
$
|
46.5
|
|
|
$
|
33.4
|
|
|
$
|
90.3
|
|
|
$
|
81.3
|
|
Subtract: Adjusted EBITDA attributable to noncontrolling interest(6)
|
|
18.6
|
|
|
18.1
|
|
|
38.9
|
|
|
36.2
|
|
Adjusted EBITDA attributable to SunCoke Energy, Inc.
|
|
27.9
|
|
|
15.3
|
|
|
51.4
|
|
|
45.1
|
|
(1)
|
|
In response to the Securities & Exchange Commission’s May 2016
update of its guidance of the appropriate use of non-GAAP financial
measures, first quarter of 2016 Adjusted EBITDA has been recast to
no longer include Coal Logistics deferred revenue until it is
recognized as GAAP revenue.
|
(2)
|
|
Reflects share of interest, taxes, depreciation and amortization
related to our equity method investment in VISA SunCoke.
|
(3)
|
|
Coal rationalization costs (income) includes employee severance,
contract termination costs and other costs to idle mines incurred
during the execution of our coal rationalization plan. The six
months ended June 30, 2015, included $2.2 million of income related
to a severance accrual adjustment.
|
(4)
|
|
The Partnership amended its contingent consideration terms with The
Cline Group, which reduced the fair value of the contingent
consideration liability, resulting in a $3.7 million gain recorded
during the six months ended June 30, 2016, which was excluded from
Adjusted EBITDA.
|
(5)
|
|
Reflects the expiration of land deposits in connection with the
Company's potential new cokemaking facility to be constructed in
Kentucky.
|
(6)
|
|
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 2016 Consolidated Adjusted EBITDA to Estimated Net
Income
|
and Net Cash Provided by Operating Activities
|
|
|
|
2016
|
|
|
Low
|
|
High
|
Net cash provided by operating activities
|
|
$
|
150.0
|
|
|
$
|
170.0
|
|
Subtract:
|
|
|
|
|
Depreciation and amortization expense
|
|
106.0
|
|
|
106.0
|
|
Gain on extinguishment of debt
|
|
(20.0
|
)
|
|
(27.0
|
)
|
Loss on divestiture of business
|
|
14.0
|
|
|
14.0
|
|
Changes in working capital and other
|
|
6.0
|
|
|
7.0
|
|
Net Income
|
|
$
|
44.0
|
|
|
$
|
70.0
|
|
Add:
|
|
|
|
|
Coal rationalization costs(1)
|
|
2.0
|
|
|
1.0
|
|
Depreciation and amortization expense
|
|
106.0
|
|
|
106.0
|
|
Interest expense, net
|
|
62.0
|
|
|
58.0
|
|
Gain on extinguishment of debt
|
|
(20.0
|
)
|
|
(27.0
|
)
|
Income tax expense
|
|
6.0
|
|
|
17.0
|
|
Loss on divestiture of business
|
|
14.0
|
|
|
14.0
|
|
Reduction of contingent consideration(2)
|
|
(4.0
|
)
|
|
(4.0
|
)
|
Adjusted EBITDA
|
|
$
|
210.0
|
|
|
$
|
235.0
|
|
Subtract:
|
|
|
|
|
Adjusted EBITDA attributable to noncontrolling interests(3)
|
|
105.0
|
|
|
111.0
|
|
Adjusted EBITDA attributable to SunCoke Energy, Inc.
|
|
$
|
105.0
|
|
|
$
|
124.0
|
|
(1)
|
|
Coal rationalization costs includes employee severance, contract
termination costs and other costs to idle mines incurred during the
execution of our coal rationalization plan.
|
(2)
|
|
The Partnership amended its contingent consideration terms with The
Cline Group, which reduced the fair value of the contingent
consideration liability, resulting in a $3.7 million gain recorded
during the six months ended June 30, 2016, which was excluded from
Adjusted EBITDA.
|
(3)
|
|
Reflects noncontrolling interest in Indiana Harbor and the portion
of the Partnership owned by public unitholders.
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160728005239/en/
Copyright Business Wire 2016