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8-K - FORM 8-K - SunCoke Energy, Inc. | d249501d8k.htm |
EX-99.1 - PRESS RELEASE DATED NOVEMBER 2, 2011 - SunCoke Energy, Inc. | d249501dex991.htm |
Q3 2011
Earnings Conference Call November 2, 2011
Exhibit 99.2 |
Safe Harbor
Statement This slide presentation should be reviewed in conjunction with
SunCokes Third Quarter 2011 earnings release conference call held on
November 2, 2011 at 10:00 a.m. ET and SEC Form 10-Q for the quarter ended September 30, 2011.
Statements in this presentation that are not historical facts are
forward-looking statements intended to be covered by the safe harbor
provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements are based upon assumptions by SunCoke concerning
future conditions, any or all of which ultimately may prove to be
inaccurate, and upon the current knowledge, beliefs and expectations of SunCoke management. These forward-
looking statements are not guarantees of future performance.
Forward looking statements are inherently uncertain and involve significant risks
and uncertainties that could cause actual results to differ materially from
those described during this presentation. Such risks and uncertainties include economic, business,
competitive and/or regulatory factors affecting SunCokes business, as well as
uncertainties related to the outcomes of pending or future
litigation.
In
accordance
with
the
safe
harbor
provisions
of
the
Private
Securities
Litigation
Reform
Act
of
1995,
SunCoke
has included in its filings with the Securities and Exchange Commission, cautionary
language identifying important factors (though not necessarily all such
factors) that could cause future outcomes to differ materially from those set forth in the forward looking
statements. For more information concerning these factors, see SunCoke's Securities
and Exchange Commission filings. SunCoke expressly disclaims any obligation
to update or alter its forward looking statements, whether as a result of new
information, future events or otherwise. For more information concerning these
factors, see SunCoke's Securities and Exchange Commission
filings,
available
on
SunCoke's
website
at
www.suncoke.com
in
the
Investor
Relations
section.
This presentation includes certain non-GAAP financial measures intended to
supplement, not substitute for, comparable GAAP measures. Reconciliations of
non-GAAP financial measures to GAAP financial measures are provided in the Appendix at the end
of the presentation. Investors are urged to consider carefully the comparable GAAP
measures and the reconciliations to those measures provided in the Appendix,
or on our website at www.suncoke.com. Third Quarter 2011 Earnings Conference
Call 1
Exhibit 99.2 |
Overview
Third Quarter 2011 Earnings Conference Call
2
Q3
2011
Net
Income
attributable
to
SunCoke
shareholders
of
$18.4
million
and EPS of $0.26 per share
Q3 2011 Adjusted EBITDA of $44.8 million reflects improved sequential
performance over Q1 & Q2 2011
Decreased from $62.2 million in Q3 2010
Achieved record domestic coke production with return to target contract
volumes at Indiana Harbor
Completed purchase of GECC 19% stake in Indiana Harbor partnership
for $34 million
Accretive to 2012 Adjusted EBITDA by approximately $8 million
Commenced Middletown start-up in mid-October and expect to achieve 100%
throughput by July 2012 |
Overview
(continued) Third Quarter 2011 Earnings Conference Call
3
Coal
operations
improved
Q3
2011
Adjusted
EBITDA
by
$9.5
million on
stronger metallurgical coal pricing
Jewell
coal
production
flat
year
over
year
reflecting
challenges
to
Jewell
deep mining expansion
Corporate expense of $14.3 million reflects impact of standalone, relocation
and Middletown start-up costs in the quarter
Ended quarter with cash balance of $111 million with $150 million revolver
undrawn |
($ in
millions) Q3 '11
Q3 '10
Q2 '11
Q3 '11 vs.
Q3 '10
Q3 '11 vs.
Q2 '11
Revenue
$403.5
$331.6
$378.0
$71.9
$25.5
Operating Income
$30.1
$48.4
$21.4
($18.3)
$8.7
Net Income Attributable to
Shareholders
$18.4
$37.5
$22.4
($19.1)
($4.0)
Earnings Per Share
$0.26
$0.53
$0.32
($0.27)
($0.06)
Coke
Adjusted
EBITDA
(1)
$50.3
$66.2
$39.0
($15.9)
$11.3
Coal Adjusted EBITDA
$8.8
($0.7)
$9.1
$9.5
($0.3)
Corporate/Other
($14.3)
($3.3)
($10.5)
($11.0)
($3.8)
Adjusted
EBITDA
(2)
$44.8
$62.2
$37.6
($17.4)
$7.2
Coke Sales Volumes
968
984
927
(16)
41
Coal Sales Volumes
371
313
334
58
37
Q3 11 Financial Results
(1)
Coke
Adjusted
EBITDA
includes
Adjusted
EBITDA
from
Jewell
Coke,
Other
Domestic
Coke
and
International
segments.
(2)
For
a
definition
of
Adjusted
EBITDA
and
reconciliation
of
Adjusted
EBITDA
to
net
income
and
operating
income,
please
see
the
appendix.
Third Quarter 2011 Earnings Conference Call
4
Achieved Q3 2011 EPS of
$0.26 and Adjusted
EBITDA of $44.8 million
Coke Adjusted EBITDA
85% of total operating
segment EBITDA
Comparisons to Q3 2010
impacted by
ArcelorMittal settlement
and higher corporate
costs
Sequential improvement
versus Q2 2011 driven by
better Domestic Coke
results |
Q3 2010 to Q3
2011 Adjusted EBITDA
(1)
Bridge
Adjusted EBITDA reflects impact of ArcelorMittal settlement, higher corporate costs and
favorable non-recurring Q3 2010 domestic Coke items, offset by improved Coal Mining
results ($ in millions)
(1) For a definition of Adjusted EBITDA and reconciliation of Adjusted EBITDA
to net income and operating income, please see the appendix. (2) Jewell
Coke includes approximately $1.3 million in favorable coal transfer impact, Coal Mining includes offsetting $1.3 million unfavorable coal transfer impact.
5
Third Quarter 2011 Earnings Conference Call
$62.2
$44.8
$9.5
$1.1
($7.9)
($11.0)
($8.1)
($1.0)
$0
$10
$20
$30
$40
$50
$60
$70
Q3 2010A
Adjusted
EBITDA
ArcelorMittal
Settlement Impact
Corporate / Other
(incl. Middletown)
Other Domestic Coke
(ex-settlement)
Jewell Coke (2)
(ex-settlement)
Coal Mining (2)
International
Q3 2011A
Adjusted
EBITDA |
Q2 2011 to Q3
2011 Adjusted EBITDA
(1)
Bridge
Adjusted EBITDA reflects continued improvement at Indiana Harbor, improved yields at Granite
City and higher volumes at Jewell Coke, offset by Middletown start-up expenses and
higher Coal Mining costs ($ in millions)
(1) For a definition of Adjusted EBITDA and reconciliation of Adjusted EBITDA
to net income and operating income, please see the appendix. (2) Jewell
Coke includes approximately $1.9 million in unfavorable coal transfer impact, Coal Mining includes offsetting $1.9 million favorable coal transfer impact.
6
$44.8
Third Quarter 2011 Earnings Conference Call
$37.6
$5.6
$4.9
$1.4
($0.3)
($2.6)
($1.8)
$25
$30
$35
$40
$45
$50
$55
Q2 2011A
Adjusted
EBITDA
Indiana Harbor
Improvements
Granite City
Improvements
Jewell Coke (2)
Volume
Coal Mining (2)
Middletown Startup
Costs
Other
Q3 2011A
Adjusted
EBITDA |
$16
$11
$11
$14
$42
$8
$25
$34
$ 60/ton
$ 22/ton
$ 39/ton
$50/ton
$ 0
$ 20
$ 40
$ 60
$ 80
$ 100
$ 120
$ 140
($5)
$5
$15
$25
$35
$45
$55
$65
$75
Q3 '10
Q1 '11
Q2 '11
Q3 '11
Jewell Coke Segment
Domestic Coke Financial Summary
(Jewell Coke & Other Domestic Coke)
Domestic Coke Production
Domestic Coke Pro Forma Adjusted EBITDA
(1)
, Pro Forma for
ArcelorMittal Settlement and Coal Transfer Price
(Tons in thousands)
($ in millions, except per ton amounts)
Other
Domestic
Coke:
773
Other
Domestic
Coke:
745
Other
Domestic
Coke:
786
953
922
965
Pro Forma Adjusted EBITDA / ton
(1) For a definition of Pro Forma Adjusted EBITDA and Pro Forma Adjusted
EBITDA/Ton and a reconciliation of Pro Forma Adjusted EBITDA to operating
income, please see the appendix.
Third Quarter 2011 Earnings Conference Call
7
Other
Domestic
Coke:
687
861
$48
$36
$19
$58
Record domestic coke production on return to target
volume levels at Indiana Harbor
With continued improvement over Q1 2011
& Q2 2011
profitability 180
174
177
179
297
256
301
314
296
266
276
293
180
165
168
179
Q3 '10
Q1 '11
Q2 '11
Q3 '11
Jewell
Indiana Harbor
Haverhill
Granite City |
Domestic Coke
Profitability (Jewell Coke & Other Domestic Coke)
Third Quarter 2011 Earnings Conference Call
8
Domestic Coke Pro Forma Adjusted EBITDA
(1)
, Pro Forma for
ArcelorMittal Settlement and Coal Transfer Price
($ in millions, except per ton amounts)
(1) For a definition of Pro Forma Adjusted EBITDA and Pro Forma Adjusted EBITDA
per Ton and a reconciliation of Pro Forma Adjusted EBITDA to operating
income, please see the appendix.
Q3
2011
Adjusted
EBITDA
per
ton
representative
of
full
potential
of
current domestic coke assets (excluding Middletown) |
Coal Mining
Financial Summary Coal Sales, Production and Purchases
Cost/Ton
(Tons in thousands)
Coal Cash Cost
(1)
($ per ton)
(1)
Mining and preparation costs, excluding depreciation, depletion and amortization,
divided by coal production volume. Excludes $1.9M reduction in fair value of HKCC
contingent consideration liability.
(2)
Cost of mining and preparation costs, purchased raw coal costs, and depreciation,
depletion and amortization divided by coal sales volume. Depreciation, depletion and
amortization per ton were $8.96 and $6.26 for the third quarter of 2011 and 2010,
respectively and $9.50 and $7.05 for the first and second quarter of 2011, respectively.
Third Quarter 2011 Earnings Conference Call
9
Sales and production increased
Y-o-Y due to Harold Keene (HKCC)
acquisition
Flat Y-o-Y Jewell production
reflective of geology, staffing and
regulatory compliance challenges
Higher mining cash costs driven by
production challenges, employee
retention costs and higher royalties
Q-o-Q further impacted by
lower proportion of HKCC
production
$106
$114
$126
$132
$111
$124
$131
$134
Q3 '10
Q1 '11
Q2 '11
Q3 '11
Coal Production Cost (2)
314
386
334
371
270
335
340
340
51
51
24
22
Q3 '10
Q1 '11
Q2 '11
Q3 '11
Jewell Coal sales
Jewell Coal production
Jewell Coal purchases
66
323
308
256
269
337
272
84
68
HKCC production
49
26
48
HKCC third-party sales |
Jewell Coal
Mining Cost Summary Coal Cash Production Cost
Third Quarter 2011 Earnings Conference Call
10
(1)
Mining and preparation costs, excluding depreciation, depletion and amortization,
divided by coal production volume. (2)
The
reject
rate
is
calculated
as
1-
(clean
tons
/
raw
tons);
represents
the
amount
of
mined
material
that
is
not
usable
coal.
(3)
Average employees for the period includes mining, preparation, loading, support and
administrative/management employees (4)
Payroll and benefits excludes any accrued expenses for black lung liabilities
(5)
Raw tons and clean tons per employee annualized
Cash Production Cost Per Ton
(1)
, Reject Rate
(2) |
Coal Mining
Financial Summary Coal Mining Pro Forma Adjusted EBITDA
(1)
and Avg. Sales
Price/Ton
(2)
Pro Forma for Coal Transfer Price Impact
($ in millions, except per ton amounts)
Pro Forma Adjusted EBITDA
Pro Forma Adjusted EBITDA / ton
Third Quarter 2011 Earnings Conference Call
11
Q3 2011 Pro Forma Adjusted
EBITDA improved by $11 million
Y-o-Y on stronger coal prices
Q3 2011 Pro Forma Adjusted
EBITDA declined Q-o-Q due to sales
and production mix
Offset by $1.9 million favorable
fair value adjustment
2012 coal pricing expected to be
set
in
late
November
market
is
softer than Q2 2011 but still above
current contracts
Pro Forma Sales Price (2)
Coal Cash Cost per Ton
($2)
$12
$11
$9
$100
$152
$162
$155
($5)/ton
$32/ton
$34/ton
$25/ton
$106
$114
$126
$132
-$50
$0
$50
$100
$150
$200
Q3 '10
Q1 '11
Q2 '11
Q3 '11
(1)
For a definition of Pro Forma Adjusted EBITDA and a reconciliation of ProForma
Adjusted EBITDA to operating income, please
see the appendix
(2)
Average Sales Price is the weighted average sales price for all coal sales volumes, includes
sales to affiliates and sales to Jewell Coke established via a transfer pricing agreement. The
transfer price per ton to Jewell Coke was $103.68, $133.57, $156.12 and $163.53 for Q3
10, Q1 11, Q2 11 and Q3 11,respectively. Pro Forma Sales
Price is the Average Sales Price adjusted to set the internal transfer price on
Jewell Coke coal purchase volumes equal to the Jewell Coke coal component
contract price. The per ton coal cost component included in the Jewell Coke
contract was approximately $100, $165, $165 and $165 for Q3 10, Q1 11, Q2
11 and Q3 11, respectively. |
$3.5
$14.3
$4.3
$1.7
$2.5
$2.3
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
Q3 2010A
Standalone
Costs
Relocation
Costs
Middletown
Start-up Costs
Business
Development/
Legal Costs
Q3 2011A
Corporate Costs
Third Quarter 2011 Earnings Conference Call
12
Q3 2011 Corporate costs reflect combination of Standalone, Relocation and
Middletown start-up costs
($ in millions) |
Summary Cash
Flow ($ in millions, except where indicated)
Net Income
$22
$51
$131
Loss on firm purchase commitment
-
19
-
Depreciation, depletion, and amortization
15
42
36
Deferred income tax expense
9
15
11
Changes in working capital pertaining to operating activities
(4)
(65)
86
Other
1
(3)
(10)
Net cash provided by operations
$42
$59
$254
Capital Expenditures
Ongoing
($12)
($30)
($30)
Expansion
(44)
(154)
(106)
Acquisition of business, net of cash received
-
(38)
-
Net cash used in investing activities
($56)
($222)
($136)
Proceeds from issuance of long-term debt/costs/repayments
$679
$679
$0
Purchase of noncontrolling interest in Indiana Harbor facility
(34)
(34)
-
Distributions to noncontrolling interests in cokemaking operations
-
(1)
(19)
Increase (decrease) in advances/payable to/from affiliate
(551)
(408)
(83)
Repayment of notes payable assumed in acquisition
-
(2)
-
Net cash used in financing activities
$94
$234
($103)
Net increase (decrease) in cash
$80
$71
$16
Cash balance at beginning of period
$30
$40
$3
Cash balance at end of period
$111
$111
$18
Free Cash Flow
(1)
($14)
($165)
$118
Liquidity and leverage ratios as of September 30, 2011
Undrawn revolver
$150
Total liquidity
$261
Total Debt
$695
Total Debt / Adj. EBITDA LTM
(2)
4.8x
Net Debt
$584
Net Debt / Adj. EBITDA LTM
(2)
4.1x
For the
Three
Months
Ended
September
30, 2011
For the Nine
Months
Ended
September
30, 2011
For the Nine
Months
Ended
September
30, 2010
Third Quarter 2011 Earnings Conference Call
13
SunCoke retained $110 million
in cash after $700 million debt
issuance at time of IPO (net of
$575 million payment to Sunoco
and debt issuance costs)
Quarter end balance of
$111 million plus undrawn
$150 million revolver provides
adequate liquidity to finance
ongoing and expansion projects
Anticipate 2012 Capital
Expenditures to be lower with
Middletown completion in 2011
(1) Free Cash Flow represents cash from (i) operations; (ii) less investing; (iii)
less payments to minority interest. For a definition of
Free Cash Flow and a reconciliation of Free Cash Flow, please see the appendix.
(2) Last Twelve Months (LTM) Adjusted EBITDA for 2011 was approximately $144
million. For a definition of Adjusted EBITDA and reconciliation of Adjusted
EBITDA to net income and operating income, please see the appendix. Liquidity Update
|
Q4 2011
Outlook Third Quarter 2011 Earnings Conference Call
14
Adjusted EBITDA to increase with increase in SunCoke ownership
Indiana Harbor
Ownership Increase
Preferred dividend of $9M recognized in Q4; paid in Q2 2012
International
Nine Month Effective Tax Rate: 16%
Expect
Q4
Effective
Tax
Rate:
7%
-
10%
Expect
Year
End
Effective
Tax
Rate:
14%
-
16%
Effective
Tax Rate
Increase in coal inventory at Middletown
Expect
to
reduce
coal
inventory,
excluding
Middletown,
over
next
two
quarters
Do not anticipate being a cash tax payer in Q4 11
Working Capital
Expect 2011 Capital Expenditures to be approximately $235 million
Capital Expenditures YTD is $184 million
Capital Expenditures |
Coke Business
Update Indiana Harbor
Contract
renewal
negotiations
in
progress
Expect
to
spend
approximately
$50
million
over
next
3
years
to
refurbish
facility in anticipation of contract renewal
Middletown
Expect to reach full production levels by July 2012
Haverhill & Granite City
Discussions with EPA regarding NOVs on-going
Anticipate spending $80 to $100 million at these facilities from
2013 to 2016 to enhance environmental performance
Previous projection was approximately $65 million
Discussions with EPA regarding NOV at Indiana Harbor have been
postponed until early 2012
Third Quarter 2011 Earnings Conference Call
15 |
Coke Business
Update (continued) Third Quarter 2011 Earnings Conference Call
16
US Coke Plant Development
Near-term focus remains on obtaining permits for up to 1.1 million ton
per year facility; anticipate permits in latter half of 2012
Kentucky site remains preferred location (but not only location) for
multi-customer facility
Will defer seeking customer commitments until further progress on
permits achieved in light of current economic outlook
India Entry
Due diligence on Global Coke minority investment progressing well
Currently negotiating definitive agreements on estimated $30 million
investment |
Coal Mining
Business Update Third Quarter 2011 Earnings Conference Call
17
First coal shipments expected in late Q4 2011
Anticipate production of approximately 350K tons per year from 2012 to
2014 (estimated 75% Mid-Vol, 25% Thermal) from 1.2 million ton
reserve
Based on results to date, anticipate 2011 production of approximately
1.05 million tons
Given production challenges, focus on improving productivity of existing
mines in 2012 and defer opening new mines until 2013
Expect production of approximately 1.15 million tons in 2012; increasing
to 1.45 million tons in 2013
Jewell Coal Expansion
Surface Mining (Revelation) Partnership |
Coal Mining
Business Update (continued) Third Quarter 2011 Earnings Conference Call
18
Currently
evaluating
impact
of
Patient
Protection
and
Affordable
Care
Act, discount rate and other assumptions on expected Black Lung costs
No conclusions to date
But changes may increase liability by approximately $4-$6 million
Evaluation to be completed in Q4 2011
Expect total mining production of 1.8 million tons in 2012 (Jewell 1.15
million tons, Surface Mining 0.35 million tons, and HKCC 0.3 million
tons)
Underground mining cash costs to remain at about $130/ton until
productivity improvements take hold in 2012/2013
Economics
of
surface
mining
(Revelation)
partnership
expected
to
be
similar to existing underground Mid-Vol production
Production and Mining Costs
Black Lung Liability |
Questions
Third Quarter 2011 Earnings Conference Call
19 |
Summary
Third Quarter 2011 Earnings Conference Call
20
Continued sequential operational and financial improvements in the
quarter versus Q1 & Q2 2011
Coke earnings growth on track with Indiana Harbor
improvements/partnership purchase and start-up of Middletown facility
Significant Coal Mining earnings growth year over year despite production
challenges
and
delay
of
expansion,
with
additional
upside
likely
for
2012/2013
Solid liquidity position even after Indiana Harbor partnership purchase and
working capital build |
Appendix
Third Quarter 2011 Earnings Conference Call
21 |
Definitions
Adjusted EBITDA
adjusted for sales discounts and the deduction of income attributable to
non-controlling interests in our Indiana Harbor cokemaking
operations. EBITDA reflects sales discounts included as a reduction in
sales and other operating revenue. The sales discounts represent the sharing
with our customers of a portion of nonconventional fuels tax credits, which
reduce our income tax expense. However, we believe that our Adjusted EBITDA would
be inappropriately penalized if these
discounts
were
treated
as
a
reduction
of
EBITDA
since
they
represent
sharing
of
a
tax
benefit
which
is
not
included
in EBITDA. Accordingly, in computing Adjusted EBITDA, we have added back these
sales discounts. Our Adjusted EBITDA also reflects the deduction of income
attributable to noncontrolling interest in our Indiana Harbor cokemaking
operations. 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 of other businesses.
Management believes Adjusted EBITDA is an important measure of the operating
performance of the Companys assets and is indicative of the
Companys ability to generate cash from operations.
Pro Forma Adjusted EBITDA
to equal the coal component contract price in Jewell Cokes coke sales price
for coal sales volumes sold to Jewell Coke under the transfer pricing
agreement. Management believes Pro Forma Adjusted EBITDA provides transparency into the
underlying profitability of these respective segments for the periods
presented.
Pro Forma Adjusted EBITDA/Ton
Free Cash Flow
controlling interests. Management believes Free Cash Flow information
enhances an investors understanding of a business
ability to generate cash. Free Cash Flow does not represent and should not
be considered an alternative to net income or cash flows from operating
activities as determined under United States generally accepted accounting principles
(GAAP) and may not be comparable to other similarly titled measures of other
businesses. Third Quarter 2011 Earnings Conference Call
22
represents earnings before interest, taxes, depreciation, depletion and
amortization (EBITDA) represents Adjusted EBITDA adjusted for
the ArcelorMittal settlement impact and coal represents Pro Forma Adjusted
EBITDA divided by tons sold. equals cash from operations less cash used in
investing activities less cash distributions to non- transfer price
impacts. The Jewell Coke and Coal Mining results have been adjusted to set the internal transfer price |
Jewell Coke
Other
Domestic
Coke
International
Coke
Coal Mining
Corporate
and Other
Total
Net Income
$22
Add: Depreciation, depletion and amortization
15
Subtract: Interest Income
(1)
Add: Interest cost - affiliates
0
Subtract: Capitalized interest
(5)
Add: Interest expense
9
Add: Income tax expense
5
EBITDA
$14
$34
$2
$9
($14)
$45
Add: Sales discounts provided to customers due to sharing of nonconventional fuels tax
credits 3
$3
Add (Subtract): net (income) loss attributable to noncontrolling interests
(3)
(3)
Adjusted EBITDA
$14
$34
$2
$9
($14)
$45
Add (Subtract): coal transfer price impact
(0)
0
-
Pro Forma
Adjusted EBITDA without coal tranfer price impact $14
$34
$2
$9
($14)
$45
Sales Volumes (thousands of tons)
191
777
373
371
Pro Forma Adjusted EBITDA per Ton
$73
$44
$5
$25
Operating Income (Loss)
$13
$24
$2
$5
($15)
$30
Depreciation Expense
1
10
0
3
0
15
EBITDA
$14
$34
$2
$9
($14)
$45
EBITDA Reconciliation, $MM
For The Three Months Ended September 30, 2011
Third Quarter 2011 Earnings Conference Call
23
Domestic Coke Weighted
Average = $50 |
EBITDA
Reconciliation, $MM For The Three Months Ended June 30, 2011
Third Quarter 2011 Earnings Conference Call
24
Domestic Coke Weighted
Average = $39
Jewell Coke
Other
Domestic
Coke
International
Coke
Coal Mining
Corporate
and Other
Total
Net Income
$24
Add: depreciation, depletion and amortization
15
Subtract: interest income (primarily from affiliates)
(6)
Add:
interest
cost
-
affiliate
2
Subtract: capitalized interest
(0)
Add (Subtract): income tax expense (benefit)
2
EBITDA
$13
$24
$1
$9
($11)
$36
3
3
(2)
(2)
Adjusted EBITDA
$13
$25
$1
$9
($11)
$38
Add (Subtract): coal transfer price impact
(2)
2
-
Pro Forma Adjusted EBITDA without coal transfer impact
$11
$25
$1
$11
($11)
$38
Sales Volumes (thousands of tons)
170
757
412
334
Pro Forma Adjusted EBITDA per Ton
$62
$33
$34
Operating Income (Loss)
$12
$14
$1
$6
($11)
$21
Depreciation Expense
1
10
0
3
0
15
EBITDA
$13
$24
$1
$9
($11)
$36
Add (Subtract): net (income) loss attributable to noncontrolling interests Add: Sales discounts provided to customers due to
sharing of nonconventional fuels tax credits |
EBITDA
Reconciliation, $MM For The Three Months Ended March 31, 2011
Third Quarter 2011 Earnings Conference Call
25
Domestic Coke Weighted
Average = $22
Jewell Coke
Other
Domestic
Coke
International
Coke
Coal Mining
Corporate
and Other
Total
Net Income
$6
Add: depreciation, depletion and amortization
13
Subtract: interest income (primarily from affiliates)
(6)
2
Subtract: capitalized interest
(0)
Add (Subtract): income tax expense (benefit)
3
EBITDA
$19
($1)
$1
$4
($6)
$17
Add: sales discounts provided to customers due to sharing of nonconventional fuels tax
credits 3
3
6
6
Adjusted EBITDA
$19
$8
$1
$4
($6)
$27
Add (Subtract): coal transfer price impact
(8)
8
-
Pro Forma Adjusted EBITDA without coal transfer price impact
$11
$8
$1
$12
($6)
$27
Sales Volumes (thousands of tons)
175
697
362
386
Pro Forma Adjusted EBITDA per Ton
$63
$12
$32
Operating Income (Loss)
$18
($9)
$1
$2
($7)
$4
Depreciation Expense
1
9
0
3
1
13
EBITDA
$19
($1)
$1
$4
($6)
$17
For the Three Months Ended March 31, 2011 (Unaudited)
Add (Subtract): net (income) loss attributable to noncontrolling interests
Add:
interest
cost
-
affiliate |
EBITDA
Reconciliation, $MM For The Three Months Ended September 30, 2010
Third Quarter 2011 Earnings Conference Call
26
Domestic Coke Weighted
Average = $58
Jewell Coke
Other
Domestic
Coke
International
Coke
Coal Mining
Corporate
and Other
Total
Net Income
$41
Add: Depreciation, depletion and amortization
14
Subtract: Interest Income
(6)
1
Subtract: Capitalized interest
(0)
Add: Interest expense
-
Add: Income tax expense
12
EBITDA
$28
$38
$1
($1)
($3)
$62
Add: Sales discounts provided to customers due to sharing of nonconventional fuels tax
credits 3
$3
(3)
(3)
Adjusted EBITDA
$28
$37
$1
($1)
($3)
$62
Add (Subtract): pro forma impact of ArcelorMittal settlement
($13)
$5
($8)
Add (Subtract): coal transfer price impact
1
(1)
-
Pro Forma Adjusted EBITDA without ArcelorMittal settlement and coal tranfer price impacts
$16
$42
$1
($2)
($3)
$54
Sales Volumes (thousands of tons)
196
788
431
313
Pro Forma Adjusted EBITDA per Ton
$83
$54
$1
($5)
Operating Income (Loss)
$27
$27
$1
($3)
($3)
$48
Depreciation Expense
1
11
0
2
0
14
EBITDA
$28
$38
$1
($1)
($3)
$62
Add (Subtract): net (income) loss attributable to noncontrolling interests
Add:
interest
cost
-
affiliate |
EBITDA
Reconciliation, $MM For The Three Months Ended December 31, 2010
Third Quarter 2011 Earnings Conference Call
27
Domestic Coke Weighted
Average = $44
Jewell Coke
Other
Domestic
Coke
International
Coke
Coal Mining
Corporate and
Other
Total
Net Income
$15
Add: Depreciation, depletion and amortization
12
Subtract: Interest Income
(6)
Add:
Interest
cost
-
affiliates
1
Subtract: Capitalized interest
(0)
Add: Interest expense
0
Add: Income tax expense
6
EBITDA
$20
$7
$14
($8)
($4)
$28
Add: Sales discounts provided to customers due to sharing of nonconventional fuels tax
credits 3
3
3
3
Adjusted EBITDA
$20
$13
$14
($8)
($4)
$35
Add (Subtract): pro forma impact of ArcelorMittal settlement
(12)
5
Add: Legal and Settlement charges related to ArcelorMittal Settlement and Indiana Harbor
Arbitration 4
13
Add (Subtract): coal transfer price impact
(1)
1
Pro Forma Adjusted EBITDA without ArcelorMittal settlement and coal tranfer price impacts
$11
$31
$14
($7)
($4)
$44
Sales Volumes (thousands of tons)
179
750
Pro Forma Adjusted EBITDA per Ton
$59
$41
Operating Income (Loss)
$19
($2)
$14
($10)
($5)
$16
Depreciation Expense
1
9
0
2
0
12
EBITDA
$20
$7
$14
($8)
($4)
$28
Add (Subtract): net (income) loss attributable to noncontrolling interests |
Jewell
Coke
Other
Domestic
Coke
International
Coke
Coal
Mining
Corporate
and Other
Total
Net Income
$146
Add: Depreciation, depletion and amortization
48
Subtract: Interest Income (Primarily from Affiliates)
(24)
Add: Interest cost Affiliate
5
Subtract: Capitalized interest
(1)
Add (Subtract): Income tax expense
47
EBITDA
$151
$74
$15
($4)
($14)
$222
Add: Sales discounts provided to customers due to sharing of nonconventional fuels tax
credits
12
12
Add (Subtract): Net (Income) loss attributable to noncontrolling interests
(7)
(7)
Adjusted EBITDA
$151
$79
$15
($4)
($14)
$227
Add (Subtract): Pro Forma impact of ArcelorMittal settlement
(78)
18
(60)
Add: Legal and Settlement charges related to ArcelorMittal Settlement and Indiana Harbor
Arbitration 4
13
16
Add (Subtract): Pro Forma coal transfer price impact
(28)
28
Pro Forma Adjusted EBITDA without ArcelorMittal settlement and coal transfer price impacts
$49
$109
$15
$24
($14)
$184
Sales Volumes (thousands of tons)
721
2,917
1,277
Pro Forma Adjusted EBITDA per Ton
$69
$37
$19
Operating Income (Loss)
$147
$39
$15
($11)
($15)
$174
Add: Depreciation Expense
4
35
0
8
1
48
EBITDA
$151
$74
$15
($4)
($14)
$222
EBITDA Reconciliation, $MM
For The Year Ended 2010
Third Quarter 2011 Earnings Conference Call
28
Domestic Coke Weighted
Average = $44 |
EBITDA
Reconciliation, $MM For The Year Ended 2009
Third Quarter 2011 Earnings Conference Call
29
Domestic Coke Weighted
Average = $27
Jewell
Coke
Other
Domestic
Coke
International
Coke
Coal
Mining
Corporate
and Other
Total
Net Income
$211
Add: Depreciation, depletion and amortization
$32
Subtract: Interest Income (Primarily from Affiliates)
($2)
Add:
Interest
cost
Affiliate
$6
Subtract: Capitalized interest
($1)
Add (Subtract): Income tax expense
$21
EBITDA
$182
$36
$23
$11
($9)
$244
Add: Sales discounts provided to customers due to sharing of nonconventional fuels tax
credits
8
$8
(22)
($22)
Adjusted EBITDA
$18
$23
$23
$11
($9)
$230
Add (Subtract): Pro Forma impact of ArcelorMittal settlement
(84)
13
($71)
Add (Subtract): Pro Forma coal transfer price Impact
(58)
58
Pro Forma Adjusted EBITDA without ArcelorMittal settlement and coal transfer price impacts
$41
$36
$23
$69
($9)
$159
Sales Volumes (thousands of tons)
694
2,119
1,214
Pro Forma Adjusted EBITDA per Ton
$59
$17
$56
Operating Income (Loss)
$178
$15
$23
$5
($9)
$212
Add: Depreciation Expense
5
22
0
6
0
$32
EBITDA
$182
$36
$23
$11
($9)
$244
Add (Subtract): net (income) loss attributable to noncontrolling interests |
EBITDA
Reconciliation, $MM For The Year Ended 2008
Third Quarter 2011 Earnings Conference Call
30
Domestic Coke Weighted
Average = $36
Jewell
Coke
Other
Domestic
Coke
International
Coke
Coal
Mining
Corporate
and Other
Total
Net Income
$133
Add: Depreciation, depletion and amortization
25
Subtract: Interest Income (Primarily from Affiliates)
(28)
Add:
Interest
cost
Affiliate
11
Subtract: Capitalized interest
(4)
Add (Subtract): Income tax expense
38
EBITDA
$119
$50
$5
$14
($13)
$175
Add: Sales discounts provided to customers due to sharing of nonconventional fuels tax
credits
1
1
(19)
(19)
Adjusted EBITDA
$119
$32
$5
$14
($13)
$157
Add (Subtract): Pro Forma impact of ArcelorMittal settlement
(56)
16
(40)
Add (Subtract): Pro Forma coal transfer price Impact
(17)
17
Pro Forma Adjusted EBITDA without ArcelorMittal settlement and coal transfer price impacts
$46
$48
$5
$31
($13)
$117
Sales Volumes (thousands of tons)
727
1,901
1,233
Pro Forma Adjusted EBITDA per Ton
$63
$25
$25
Operating Income (Loss)
$114
$35
$5
$10
($13)
$151
Add: Depreciation Expense
5
15
0
4
0
25
EBITDA
$119
$50
$5
$14
($13)
$175
Add (Subtract): net (income) loss attributable to noncontrolling interests |
Free Cash Flow
Reconciliation, $MM Third Quarter 2011 Earnings Conference Call
31
For the Three
Months Ended
September 30, 2011
For the Six
Months Ended
June 30, 2011
For the Nine
Months Ended
September 30, 2011
For the Nine
Months Ended
September 30, 2010
Net Cash Provided by Operating Activities
42
$
16
$
59
$
254
$
Cash Flows from
Investing Activities: Capital Expenditures
On-going Capital
(12)
(18)
(30)
(30)
Expansion Capital
Coal Mining
(3)
(6)
(9)
-
Middletown
(41)
(104)
(145)
(106)
Total
(56)
$
(128)
$
(184)
$
(136)
$
Acquisition of business,
net of cash received -
(38)
(38)
-
Proceeds from the sales of assets
-
-
-
0
Net Cash Used in Investing Activities
(56)
$
(166)
$
(222)
$
(136)
$
Proceeds from issuance of
long-term debt/costs/repayments 679
-
679
-
Purchase of noncontrolling interest in Indiana Harbor facility
(34)
-
(34)
-
Cash distributions to noncontrolling interests in cokemaking operations
-
(1)
(1)
(19)
Increase (decrease) in advances/payable to/from affiliate
(551)
143
(408)
(83)
Repayment of notes payable assumed in acquisition
-
(2)
(2)
-
Net cash used in financing activities
94
$
140
$
234
$
(103)
$
Free Cash Flow
(14)
$
(149)
$
(163)
$
118
$
Free Cash Flow
excluding Expansion Capital 30
$
(39)
$
(9)
$
224
$
|
Media releases and SEC filings are available
on our website at www.suncoke.com
Contact Investor Relations for more information: 630-824-1907
Third Quarter 2011 Earnings Conference Call
32 |