- Net income attributable to SXC was up
$29.6 million to $6.1 million, or $0.10 per share, in the current
period compared to a loss of $23.5 million, or $0.36 per share, in
the prior year period
- Adjusted EBITDA, which excludes $8.8
million of coal logistics deferred revenue, was $49.4 million,
which is in line with expectations and up $0.3 million versus the
prior year period
- Reduced total consolidated debt
outstanding by approximately $25 million in the third quarter and
by more than $135 million in the last twelve months, including
approximately $132 million of SXCP bond repurchases
- Reaffirm full-year guidance for 2016
Consolidated Adjusted EBITDA of $210 million to $235 million
SunCoke Energy, Inc. (NYSE: SXC) today reported results for the
third quarter 2016, which reflect consistent consolidated operating
results versus the prior year period.
“Our third quarter results are in line with expectations and we
are most pleased with the continued cost discipline at Indiana
Harbor as well as the sustained cost savings achieved following the
divestiture of our former Coal Mining operation," said Fritz
Henderson, Chairman, President and Chief Executive Officer of
SunCoke Energy, Inc.
The Company continues to navigate through market developments
and execute its de-levering objectives. In the quarter, SunCoke
reduced total debt outstanding by approximately $25 million.
Furthermore, the Company is pleased that both of its major Convent
Marine Terminal ("CMT") customers recently reached resolution with
each of their respective lending groups. In addition, as announced
earlier this week, Convent is expanding into a new line of business
by piloting domestic-facing thermal coal volumes through the
terminal on a merchant basis.
The Company also reaffirms its full-year outlook for 2016
Consolidated Adjusted EBITDA of $210 million to $235 million.
Henderson added, "Through three quarters, we are in position to
deliver on our commitments to shareholders and remain flexible and
responsive to the changing steel and coal market industry
conditions."
THIRD QUARTER CONSOLIDATED
RESULTS(1)
Three Months Ended September 30,
(Dollars in
millions)
2016 2015
Increase/(Decrease)
Revenues $ 293.9 $ 336.9 $ (43.0 ) Net income (loss)
attributable to SXC $ 6.1 $ (23.5 ) $ 29.6 Adjusted EBITDA(2)
$ 49.4 $ 49.1 $ 0.3 (1)
The current and prior year periods are not comparable due to
the divestiture of our Coal Mining business in April 2016 and 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 $43.0 million to $293.9 million in third
quarter 2016 compared with the same prior year period, primarily
reflecting the pass-through of lower coal costs as well as lower
sales volumes.
Net income attributable to SXC was $6.1 million, or $0.10 per
share, compared to the prior year period net loss attributable to
SXC of $23.5 million, or $0.36 per share. The increase was
primarily due to the absence of a $19.4 million, or $0.30 per
share, impairment of our equity method investment in Visa SunCoke
in the prior year period as well as fair value adjustments to our
contingent consideration obligation in the current year period.
Adjusted EBITDA increased $0.3 million to $49.4 million,
primarily due to lower corporate costs as well as lower operational
costs in our Coal Mining segment, resulting from the divestiture of
the business, and at our Indiana Harbor cokemaking facility. These
savings were mostly offset by the impact of scheduled outages in
the current year period as well as lower sales volumes in both our
cokemaking and logistics operations. As a reminder, Adjusted EBITDA
results exclude coal logistics deferred revenue until it is
recognized as GAAP revenue, which is at the end of the annual
contract period, or typically in the fourth quarter of each
year.
THIRD QUARTER SEGMENT 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 September 30,
(Dollars in
millions, except per ton amounts)
2016 2015
Increase/(Decrease)
Revenues $ 273.0 $ 311.5 $ (38.5 ) Adjusted EBITDA(1)
$ 52.1 $ 55.9 $ (3.8 ) Sales volumes (thousands of tons) 1,000
1,043 (43 ) Adjusted EBITDA per ton(2) $ 52.10
$ 53.60 $ (1.50 ) (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
43 thousand tons, primarily due to lower production at Indiana
Harbor and the impact of customer volume accommodations at
Haverhill. The impact of customer volume accommodations on Adjusted
EBITDA was mitigated by make-whole payments from AK Steel.
- Adjusted EBITDA decreased $3.8 million,
reflecting lower coke sales volumes and lower energy sales due to
scheduled outages. Additionally, the current year period included
$1.0 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 impacts were partially offset by lower
operating and maintenance spending at Indiana Harbor of $3.6
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 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. The current and prior year periods are not
comparable due to the contribution of CMT, which was acquired on
August 12, 2015, and DRT, which was constructed in early 2016.
Three Months Ended September 30,
(Dollars in
millions, except per ton amounts)
2016 2015
Increase/(Decrease)
Revenues $ 12.3 $ 13.8 $ (1.5 ) Intersegment sales $
4.9 $ 5.7 $ (0.8 ) Adjusted EBITDA(1) $ 7.3 $ 9.3 $ (2.0 ) Tons
handled, excluding CMT (thousands of tons)(2) 3,493 4,332 (839 )
Tons handled by CMT (thousands of tons)(2) 841
817 24 (1) See definition of Adjusted
EBITDA and reconciliation elsewhere in this release. (2) Reflects
inbound tons handled during the period.
- Revenues were down $1.5 million, driven
by lower volumes at KRT and Lake Terminal, partly offset by a $1.0
million contribution of DRT as well as a full quarter of CMT
results, which contributed $1.3 million more revenues as compared
to the prior year period.
- Adjusted EBITDA was down $2.0 million,
primarily driven by a the lower volumes discussed above. Despite a
full quarter of operations, Adjusted EBITDA contributed by CMT was
down slightly from the prior year, driven by a full quarter of
operating costs on only slightly higher volumes. As a reminder,
Adjusted EBITDA results exclude coal logistics deferred revenue
until it is recognized as GAAP revenue, which is at the end of the
annual contract period, or typically in the fourth quarter of each
year.
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 $3.2 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.
- Adjusted EBITDA was a loss of $0.6
million in the current year period compared to a loss of $4.9
million in the prior year period. The improved results reflect
lower operating costs due to the divestiture of the business, as
well as a shift of $1.0 million of coal transportation costs to our
Domestic Coke segment.
Corporate and Other
Corporate and other expenses, including legacy costs, were $12.6
million in third quarter 2016, an improvement of $2.0 million
versus third quarter 2015, driven by charges incurred in the prior
year period of $2.2 million for severance costs and $2.2 million
for acquisition and business development costs. These improvements
were partially offset by current period mark-to-market adjustments
in deferred compensation caused by increases in the Company's share
price and the Partnership's unit price as well as costs to resolve
certain legal matters in the current year period.
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 1-877-201-0168 in the U.S. or 1-647-788-4901 if
outside the U.S., confirmation code 89766307.
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 September 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, the expiration of certain acquired contractual
obligations, 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 Nine Months Ended September 30,
September 30, 2016 2015 2016
2015 (Dollars and shares in millions,
except per share amounts) Revenues Sales and other
operating revenue $ 293.7 $ 336.2 $ 896.8 $ 1,007.7 Other income,
net 0.2 0.7 0.9 1.4 Total revenues
293.9 336.9 897.7 1,009.1
Costs and
operating expenses Cost of products sold and operating expenses
217.6 266.3 682.5 824.4 Selling, general and administrative
expenses 21.8 21.9 68.8 53.9 Depreciation and amortization expense
25.6 25.6 82.4 75.8 Loss on divestiture of business — —
14.7 — Total costs and operating expenses
265.0 313.8 848.4 954.1
Operating
income 28.9 23.1 49.3 55.0 Interest expense, net 12.9 14.6 40.3
41.5 (Gain) loss on extinguishment of debt (1.0 ) — (24.9 )
9.4 Income before income tax expense and loss from equity
method investment 17.0 8.5 33.9 4.1 Income tax expense 2.6 4.8 5.9
5.1 Loss from equity method investment — 20.2 —
21.6 Net income (loss) 14.4 (16.5 ) 28.0 (22.6 )
Less: Net income attributable to noncontrolling interests 8.3
7.0 30.6 18.4
Net income (loss)
attributable to SunCoke Energy, Inc. $ 6.1 $ (23.5 ) $
(2.6 ) $ (41.0 ) Earnings (loss) attributable to SunCoke Energy,
Inc. per common share: Basic $ 0.10 $ (0.36 ) $ (0.04 ) $ (0.63 )
Diluted $ 0.10 $ (0.36 ) $ (0.04 ) $ (0.63 ) Weighted average
number of common shares outstanding: Basic 64.2 64.5 64.1 65.3
Diluted 64.5 64.5 64.1 65.3
SunCoke Energy,
Inc. Consolidated Balance Sheets (Unaudited)
September 30, December 31, 2016
2015 (Dollars in millions, except par value
amounts) Assets Cash and cash equivalents $ 105.3 $
123.4 Receivables 54.1 64.6 Inventories 97.8 121.8 Income tax
receivable 7.2 11.6 Other current assets 4.8 3.9 Assets held for
sale — 0.9 Total current assets 269.2 326.2
Restricted cash 0.7 18.2 Investment in Brazilian cokemaking
operations 41.0 41.0 Properties, plants and equipment (net of
accumulated depreciation of $632.9 and $590.2 million at September
30, 2016 and December 31, 2015, respectively) 1,547.5 1,582.0
Goodwill 76.9 71.1 Other intangible assets, net 181.8 190.2
Deferred charges and other assets 4.8 15.4 Long-term assets held
for sale — 11.4 Total assets $ 2,121.9 $
2,255.5
Liabilities and Equity Accounts payable $
93.1 $ 99.8 Accrued liabilities 50.0 42.9 Deferred revenue 27.6 2.1
Current portion of long-term debt and financing obligation 3.6 1.1
Interest payable 6.8 18.9 Liabilities held for sale — 0.9
Total current liabilities 181.1 165.7
Long-term debt and financing obligation 860.9 997.7 Accrual for
black lung benefits 44.2 44.7 Retirement benefit liabilities 29.3
31.3 Deferred income taxes 353.8 349.0 Asset retirement obligations
13.2 16.3 Other deferred credits and liabilities 20.0 22.1
Long-term liabilities held for sale — 5.9 Total
liabilities 1,502.5 1,632.7
Equity Preferred
stock, $0.01 par value. Authorized 50,000,000 shares; no issued
shares at September 30, 2016 and December 31, 2015 — — Common
stock, $0.01 par value. Authorized 300,000,000 shares; issued
71,676,576 and 71,489,448 shares at September 30, 2016 and December
31, 2015, respectively 0.7 0.7 Treasury stock, 7,477,657 shares at
September 30, 2016 and December 31, 2015, respectively (140.7 )
(140.7 ) Additional paid-in capital 490.6 486.1 Accumulated other
comprehensive loss (18.8 ) (19.8 ) Retained deficit (39.0 ) (36.4 )
Total SunCoke Energy, Inc. stockholders’ equity 292.8 289.9
Noncontrolling interests 326.6 332.9 Total equity
619.4 622.8 Total liabilities and equity $ 2,121.9
$ 2,255.5
SunCoke Energy, Inc.
Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30, 2016
2015 (Dollars in millions) Cash Flows from
Operating Activities: Net income (loss) $ 28.0 $ (22.6 )
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Loss on divestiture of business 14.7 —
Depreciation and amortization expense 82.4 75.8 Deferred income tax
expense 4.5 6.9 Settlement loss and expense for pension plan — 13.1
Gain on curtailment and payments in excess of expense for
postretirement plan benefits (2.0 ) (6.4 ) Share-based compensation
expense 5.0 5.8 Loss from equity method investment — 21.6 (Gain)
loss on extinguishment of debt (24.9 ) 9.4 Changes in working
capital pertaining to operating activities (net of the effects of
divestiture and acquisition): Receivables 10.3 8.0 Inventories 24.1
20.7 Accounts payable (3.5 ) (10.4 ) Accrued liabilities 6.7 (20.9
) Deferred revenue 25.5 1.1 Interest payable (12.1 ) (10.8 ) Income
taxes 4.4 (5.0 ) Other 3.0 (3.3 ) Net cash provided by
operating activities 166.1 83.0
Cash Flows from
Investing Activities: Capital expenditures (42.9 ) (49.3 )
Acquisition of business — (193.1 ) Decrease (increase) in
restricted cash 17.5 (21.5 ) Divestiture of coal business (12.8 ) —
Other investing activities 2.1 — Net cash used in
investing activities (36.1 ) (263.9 )
Cash Flows from Financing
Activities: Proceeds from issuance of long-term debt — 210.8
Repayment of long-term debt (60.8 ) (149.8 ) Proceeds from
revolving credit facility 20.0 185.0 Repayment of revolving credit
facility (85.4 ) — Proceeds from financing obligation 16.2 —
Repayment of financing obligation (0.5 ) — Debt issuance costs (0.2
) (4.8 ) Cash distribution to noncontrolling interests (36.9 )
(31.0 ) Shares repurchased — (35.7 ) Units repurchased — (10.0 )
Other financing activities (0.5 ) (1.0 ) Dividends paid —
(18.4 ) Net cash (used in) provided by financing activities (148.1
) 145.1 Net decrease in cash and cash equivalents (18.1 )
(35.8 ) Cash and cash equivalents at beginning of period 123.4
139.0 Cash and cash equivalents at end of period $
105.3 $ 103.2
Supplemental Disclosure of Cash Flow
Information Interest paid $ 54.2 $ 52.4 Income taxes paid, net
of refunds of $6.3 million in 2016 and no refunds in 2015 $ (3.1 )
$ 3.3
SunCoke Energy, Inc. Segment Financial and
Operating Data
The following tables set forth financial
and operating data for the three and nine months ended September
30, 2016 and 2015:
Three Months Ended Nine
Months Ended September 30, September 30,
2016 2015 2016 2015
(Dollars in millions, except per ton amounts)
Sales and other operating revenues: Domestic Coke $ 273.0 $
311.5 $ 836.0 $ 941.1 Brazil Coke 8.4 8.0 23.5 26.4 Coal Logistics
12.3 13.8 36.5 29.7 Coal Logistics intersegment sales 4.9 5.7 15.3
15.3 Coal Mining — 2.9 0.8 10.5 Coal Mining intersegment sales —
25.3 22.0 74.3 Elimination of intersegment sales (4.9 ) (31.0 )
(37.3 ) (89.6 ) Total sales and other operating revenue $ 293.7
$ 336.2 $ 896.8 $ 1,007.7
Adjusted
EBITDA(1): Domestic Coke $ 52.1 $ 55.9 $ 157.4 $
164.8 Brazil Coke 3.2 3.4 7.9 10.1 Coal Logistics 7.3 9.3 18.6 16.9
Coal Mining (0.6 ) (4.9 ) (5.6 ) (13.4 ) Corporate and Other,
including legacy costs, net(2) (12.6 ) (14.6 ) (38.6 ) (48.0 )
Total Adjusted EBITDA $ 49.4 $ 49.1 $ 139.7 $
130.4
Coke Operating Data: Domestic Coke capacity
utilization (%) 94 98 94 98 Domestic Coke production volumes
(thousands of tons) 1,001 1,049 2,990 3,094 Domestic Coke sales
volumes (thousands of tons) 1,000 1,043 2,992 3,102 Domestic Coke
Adjusted EBITDA per ton(3) $ 52.10 $ 53.60 $ 52.61 $ 53.13
Brazilian Coke production—operated facility (thousands of tons) 449
449 1,294 1,324
Coal Logistics Operating Data: Tons handled,
excluding CMT (thousands of tons)(4) 3,493 4,332 10,095 12,492 Tons
handled by CMT (thousands of tons)(4) 841 817 2,762 817 (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.
Three Months Ended Nine Months Ended
September 30, September 30, 2016
2015 2016 2015 (Dollars in
millions) Black lung charges $ (1.7 ) $ (1.4 ) $ (5.2 ) $ (3.3
) Postretirement benefit plan (expense) benefit (0.2 ) (0.1 ) (0.6
) 3.7 Defined benefit plan expense, including termination charges —
— — (13.1 ) Workers' compensation expense (0.2 ) (0.2 ) (0.6 ) (1.6
) Other 0.2 0.3 0.2 (0.4 ) Total legacy costs,
net $ (1.9 ) $ (1.4 ) $ (6.2 ) $ (14.7 ) (3) Reflects
Domestic Coke Adjusted EBITDA divided by Domestic Coke sales
volumes. (4) Reflects inbound tons handled during the period.
SunCoke Energy, Inc. Reconciliations of
Non-GAAP Information Adjusted EBITDA to Net (Loss) Income
and Net Cash Provided by Operating Activities Three
Months Ended Nine Months Ended September 30,
September 30, 2016 2015(1)
2016(1) 2015(1) (Dollars in
millions) Net cash provided by operating activities $
44.6 $ 6.4 $ 166.1 $ 83.0 Subtract: Loss on divestiture of business
— — 14.7 — Depreciation and amortization expense 25.6 25.6 82.4
75.8 Deferred income tax expense 0.9 8.0 4.5 6.9 (Gain) loss on
extinguishment of debt (1.0 ) — (24.9 ) 9.4 Changes in working
capital and other 4.7 (10.7 ) 61.4 13.5
Net
Income $ 14.4 $ (16.5 ) $ 28.0 $ (22.6 ) Add:
Adjustment to unconsolidated affiliate earnings(2) $ — $ 19.8 $ — $
20.8 Coal rationalization costs (3) 0.2 0.8 0.4 0.4 Depreciation
and amortization expense 25.6 25.6 82.4 75.8 Interest expense, net
12.9 14.6 40.3 41.5 (Gain) loss on extinguishment of debt (1.0 ) —
(24.9 ) 9.4 Income tax expense 2.6 4.8 5.9 5.1 Loss on divestiture
of business — — 14.7 — Contingent consideration adjustments(4) (4.6
) — (8.3 ) — Expiration of land deposits(5) — — 1.9 — Non-cash
reversal of acquired contractual obligation(6) (0.7 ) — (0.7
) —
Adjusted EBITDA $ 49.4 $ 49.1 $
139.7 $ 130.4 Subtract: Adjusted EBITDA attributable
to noncontrolling interest(7) 18.9 20.1 57.8
56.3 Adjusted EBITDA attributable to SunCoke Energy,
Inc. $ 30.5 $ 29.0 $ 81.9 74.1
(1) Beginning in the second quarter of 2016, in response to
the Securities & Exchange Commission’s May 2016 update of its
guidance on the appropriate use of non-GAAP financial measures,
Adjusted EBITDA no longer includes Coal Logistics deferred revenue
until it is recognized as GAAP revenue. (2) Reflects share of
interest, taxes, depreciation and amortization related to our
equity method investment in VISA SunCoke. The three and nine months
ended September 30, 2015 include a $19.4 million impairment of our
investment. (3) Coal rationalization costs includes employee
severance, contract termination costs and other costs to idle mines
incurred during the execution of our coal rationalization plan. The
nine months ended September 30, 2015, included $2.3 million of
income related to a severance accrual adjustment. (4) The
Partnership amended its contingent consideration terms with The
Cline Group during the first quarter of 2016. These amendments and
subsequent fair value adjustments resulted in gains of $4.6 million
and $8.3 million recorded during the three and nine months ended
September 30, 2016, respectively, which were excluded from Adjusted
EBITDA. (5) Reflects the expiration of land deposits in connection
with the Company's potential new cokemaking facility to be
constructed in Kentucky. (6) In association with the acquisition of
CMT, we assumed certain performance obligations under existing
contracts and recorded liabilities related to such obligations. In
third quarter of 2016, the final contractual performance period
expired, without the customer requiring performance. As such, we
reversed the liability in the period as we no longer have any
obligations under the contract. (7) 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 $ 170 Subtract: Depreciation and amortization
expense 106 106 Gain on extinguishment of debt (20 ) (27 ) Loss on
divestiture of business 14 14 Changes in working capital and other
1 2
Net Income $ 49 $ 75 Add:
Coal rationalization costs(1) 2 1 Depreciation and amortization
expense 106 106 Interest expense, net 62 58 Gain on extinguishment
of debt (20 ) (27 ) Income tax expense 6 17 Loss on divestiture of
business 14 14 Contingent consideration adjustments(2) (8 ) (8 )
Non-cash reversal of acquired contractual obligation(3) (1 ) (1 )
Adjusted EBITDA $ 210 $ 235 Subtract:
Adjusted EBITDA attributable to
noncontrolling interests(4)
105 111 Adjusted EBITDA attributable to SunCoke
Energy, Inc. $ 105 $ 124 (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
during the first quarter of 2016. These amendments and subsequent
fair value adjustments resulted in gains of $4.6 million and $8.3
million recorded during the three and nine months ended September
30, 2016, respectively, which were excluded from Adjusted EBITDA.
(3) In association with the acquisition of CMT, we assumed certain
performance obligations under existing contracts and recorded
liabilities related to such obligations. In third quarter of 2016,
the final contractual performance period expired, without the
customer requiring performance. As such, we reversed the liability
in the period as we no longer have any obligations under the
contract. (4) Reflects 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/20161020005354/en/
SunCoke Energy, Inc.Investors:Kyle Bland:
630-824-1907orMedia:Steve
Carlson: 630-824-1783
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