Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - SunCoke Energy, Inc. | d426588d8k.htm |
| EX-99.1 - PRESS RELEASE - SunCoke Energy, Inc. | d426588dex991.htm |
 Q3 2012
Earnings Conference Call
October 24, 2012
Exhibit 99.2 |
 Safe Harbor
Statement Safe Harbor Statement
This slide presentation should be reviewed in conjunction with SunCoke’s Third
Quarter 2012 earnings release and conference call held on October 24, 2012
at 10:00 a.m. ET. Some
of
the
information
included
in
this
presentation
contains
“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). Such forward-looking statements are based on
management’s beliefs and assumptions and on information currently available.
Forward-looking statements include the information concerning SunCoke’s
possible or assumed future results of operations, the planned Master Limited
Partnership, business strategies, financing plans, competitive position, potential
growth opportunities, potential operating performance improvements, the effects of
competition and the effects of future legislation or regulations.
Forward-looking statements include all statements that are not historical facts and may be
identified
by
the
use
of
forward-looking
terminology
such
as
the
words
“believe,”
“expect,”
“plan,”
“intend,”
“anticipate,”
“estimate,”
“predict,”
“potential,”
“continue,”
“may,”
“will,”
“should”
or the negative of these terms or similar expressions.
Forward-looking
statements
involve
risks,
uncertainties
and
assumptions.
Actual
results
may
differ
materially
from
those
expressed in these forward-looking statements. You should not put undue
reliance on any forward-looking statements. 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 (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 SunCoke. For more information concerning
these factors, see SunCoke's Securities and
Exchange
Commission
filings.
All
forward-looking
statements
included
in
this
presentation
are
expressly
qualified
in
their entirety by such cautionary statements. SunCoke does not have any intention
or obligation to update publicly any forward-looking statement (or its
associated cautionary language) whether as a result of new information or future events
or after the date of this presentation, except as required by applicable law.
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. SunCoke
Energy Q3 2012 Earnings Conference Call 1 |
 Q3 2012 Earnings
Overview SunCoke Energy Q3 2012 Earnings Conference Call
2
Q3 2012 EPS up 73% to $0.45 per share •
Middletown continues to perform at high level •
All U.S. coke facilities built on solid prior year
performance
Coal delivered slightly favorable results •
Benefited from higher YoY price/volume and
contingent consideration adjustment •
Production costs and reject rates increased Strong
liquidity position
•
Cash balance of nearly $160 million and virtually
undrawn revolver of $150 million •
FY 2012 free cash flow
expected to be in
excess of $100 million costs, with $60+ million
expected in Q4
2012
Refining range of expected 2012 Adjusted
EBITDA to $255 million to $270 million •
Implies expected Q4 2012 Adjusted EBITDA of
$61 million to $76 million Earnings
Per Share (diluted)
Adjusted EBITDA
(1)
(in millions)
(1)
For a definition and reconciliation of Adjusted EBITDA, please see appendix. (2)
For a definition and reconciliation of free cash flow, please see appendix
(1)
(2) |
 Revenue up
19% Adjusted EBITDA
(3)
increased 62%
Earnings Per Share of $0.45
Q3 2012 Financial Results
Q3 2012 Financial Results
Middletown added nearly $77 million on
volume of 156 thousand tons
Middletown contributed almost
$17 million
Domestic Coke Adjusted EBITDA
(3)
per
ton up $11 per ton to $61
Coal benefited from higher mid-vol.
price/volumes and $3.2 million
contingent consideration adjustment
Corporate costs lower due to 2011
headquarter relocation
Reflects strong U.S. cokemaking business
performance and lower corporate costs
SunCoke Energy Q3 2012 Earnings Conference Call
3
(1) Coke Adjusted EBITDA includes Jewell Coke, Other Domestic Coke and International
segments. (2) Coal Adjusted EBITDA includes Coal Mining segment. In Q1 ’12,
internal coal transfer price mechanism changed to reflect Jewell Coke contract price;
prior year periods adjusted to reflect this change. (3) For a definition and
reconciliation of Adjusted EBITDA and Adjusted EBITDA per ton, please see
appendix.
($ in millions)
Q3'12
Q3'11
Change
Domestic Coke Sales Volumes
1,116
968
148
Coal Sales Volumes
392
371
21
Revenue
$480.5
$403.5
$77.0
Operating Income
$52.7
$30.0
$22.7
Net Income Attributable to
Shareholders
$31.6
$18.2
$13.4
Earnings Per Share
$0.45
$0.26
$0.19
Coke Adjusted EBITDA
(1)
$69.4
$49.9
$19.5
Coal Adjusted EBITDA
(2)
$10.7
$9.2
$1.5
Corporate/Other
($7.7)
($14.3)
$6.6
Adjusted EBITDA
(3)
$72.4
$44.8
$27.6 |
 $44.8
$72.4
$16.9
$2.6
$1.5
$6.6
Q3 2011
Adjusted
EBITDA (1)
Middletown
Coke Business
(excluding Middletown)
Coal Mining
Corporate
Q3 2012
Adjusted
EBITDA (1)
Adjusted EBITDA
Adjusted EBITDA
(1)
(1)
Bridge–Q3 2011 to Q3 2012
Bridge–Q3 2011 to Q3 2012
SunCoke Energy Q3 2012 Earnings Conference Call
4
Middletown was the primary driver of the quarter’s performance
(1)
($ in millions)
For a definition and reconciliation of Adjusted EBITDA, please see the appendix.
|
 EPS Bridge
– EPS Bridge –
Q3 2011 to Q3 2012
Q3 2011 to Q3 2012
SunCoke Energy Q3 2012 Earnings Conference Call
5
EPS benefited from strong coke business results and lower corporate costs
offset by financing costs for standalone capital structure
$0.26
$0.45
$0.28
$0.10
$0.02
($0.06)
($0.12)
($0.03 )
Q3 2011 EPS
(Diluted)
Adjusted
EBITDA(1)
Coke Business
Adjusted
EBITDA(1)
Corporate
Adjusted
EBITDA(1)
Coal Mining
Depreciation,
Depletion
& Amortization
Financing Costs
Taxes
Q3 2012 EPS
(Diluted)
(1)
For a definition and reconciliation of Adjusted EBITDA, please see the appendix. |
 Q3 2012 Sources
& Uses of Cash Q3 2012 Sources & Uses of Cash
SunCoke Energy Q3 2012 Earnings Conference Call
6
Ended quarter with solid cash position, virtually undrawn revolver
and improving credit metrics
($ in millions)
Primary Changes vs. Q2 2012:
Accounts receivables: ($37.6m)*
Accounts payable: ($28.6m)
Interest: ($8.3m)
Inventory: +$17.3m
* Due to timing of payment on $23.7 million receivable on Monday, October 1, 2012 instead of
Sunday, September 30.
$190.0
$32.9
$18.9
$5.3
$157.8
($57.0)
($9.0)
($19.9)
($3.4)
Q2 2012
Cash
Balance
Q3 2012
Net Income
Depreciation,
Depletion &
Amortization
Deferred
Taxes &
Taxes Payable
Changes in
Working
Capital
(excl. Taxes Payable)
Other
Capital
Expenditures
Cash Used
In Financing
Activities
Q3 2012
Cash
Balance |
 Domestic Coke Business Summary
Domestic Coke Business Summary
(Jewell Coke & Other Domestic Coke)
(Jewell Coke & Other Domestic Coke)
SunCoke Energy Q3 2012 Earnings Conference Call
7
($ in millions, except per ton amounts)
Sustained strong coke operations drove
Adjusted
EBITDA
(1)
per
ton
above
$60
per
ton
179
176
174
176
177
314
309
291
299
291
293
289
286
291
297
178
172
175
177
178
68
142
153
154
964
1,014
1,068
1,097
1,095
Q3 '11
Q4 '11
Q1 '12
Q2 '12
Q3 '12
Jewell
Indiana Harbor
Haverhill
Granite City
Middletown
Domestic Coke Production
(Tons in thousands)
$14
$11
$15
$13
$14
$34
$21
$40
$49
$55
$48
$32
$55
$62
$69
$ 50
$ 34
$ 51
$ 57
$ 61
/ton
(2)
/ton
/ton
(3)
/ton
/ton
Domestic Coke Adjusted EBITDA
(1)
Per Ton
Q3 '11
Q4 '11
Q1 '12
Q2 '12
Q3 '12
Jewell Coke Segment
Other Domestic Coke Segment
Adjusted EBITDA/ton
(1)
For a definition of Adjusted EBITDA and Adjusted EBITDA/Ton and reconciliations,
see appendix.
(2) Includes Indiana Harbor contract billing adjustment of $6.0
million, net of NCI, and inventory adjustment of $6.2 million, net of NCI, of which
$3.1 million is attributable to Q3 2011. (3) Includes a $2.4 million, net of NCI, charge related to coke
inventory reduction and a $1.3 million, net of NCI, lower cost or market
adjustment on pad coal inventory and lower coal-to-coke yields related
to the startup at Middletown.
|
 SunCoke Energy Q3 2012 Earnings Conference Call
8
Pretax Return on Invested Capital (ROIC)
Pretax Return on Invested Capital (ROIC)
1)
For a definition of Pretax ROIC and reconciliations, please see the appendix.
Pretax ROIC is calculated as Adjusted Pretax Operating Income divided by average invested capital
(stockholders’
equity
plus
total
debt
net
of
cash
and
cash
equivalents);
for
a
reconciliation
of
Adjusted
Pretax
Operating
Income
to
Adjusted
EBITDA,
please
see
appendix
2)
This
table
excludes
Middletown
assets
up
to
and
including
Q4
2011.
At
the
end
of
Q4
2011,
identifiable
assets
included
in
Other
Domestic
Coke
attributable
to
Middletown
were
$402.8m (prior to Q4 2011, Middletown was included in the Corporate and Other
segment); see historical segment detail in public filings for additional detail.
3)
Includes Indiana Harbor contract billing adjustment of $6.0 million, net of NCI,
and inventory adjustment of $6.2 million, net of NCI, of which $3.1 million is attributable to Q3 2011.
4)
Includes a $2.4 million, net of NCI, charge related to a coke inventory reduction
and a $1.3 million, net of NCI, lower cost or market adjustment on pad coal inventory and $4.0 million of
non-recurring costs and lower coal-to-coke yields related to the
startup at Middletown. Pretax ROIC, ex-Middletown prior 2012
(1)(2)
Q1 2011
Q2 2011
Q3 2011
Q4 2011
2011
Q1 2012
Q2 2012
Q3 2012
Total Domestic Coke (Includes Jewell Coke and Other Domestic Coke)
2%
15%
23%
12%
13%
17%
20%
24%
International Coke
10%
7%
20%
120%
36%
0%
7%
11%
Coal Mining
46%
28%
21%
(5%)
23%
11%
17%
22%
Total SunCoke (Including Corp./Other)
4%
11%
16%
8%
10%
13%
17%
20%
2%
15%
23%
12%
17%
20%
24%
13%
Q1 2011
Q2 2011
Q3 2011
Q4 2011
2011
Q1 2012
Q2 2012
Q3 2012
Pretax ROIC
(1)
for Domestic Coke
excluding Middletown prior to 2012
(2) |
 Coal Mining
Financial Summary Coal Mining Financial Summary
SunCoke Energy Q3 2012 Earnings Conference Call
9
Q3 2012 segment Adjusted EBITDA
(1)
up
$1.5 million to $10.7 million
Higher mid-vol. price and volumes
benefited results YoY
Contingent consideration fair value
adjustment contributed $1.3 million to
increase
Cash production costs up
Experienced yield and productivity
challenges in quarter
Increased mix of mid-vol. coal production
also pulled average costs up
Represented $3.2 million of segment’s
Q3 2012 Adj. EBITDA
–
Jewell underground cash cost per ton:
$149 in Q3 2012; $143 in Q2 2012; $138 in
Q3 2011
•
•
•
•
•
Coal Mining Adjusted EBITDA
(1)
and Avg. Sales
Price/Ton
(2)
Coal Sales, Production and Purchases
$9
$2
$7
$9
$11
$155
$159
$171
$169
$165
$25
$20
$20
$25
$27
$132
$138
$151
$137
$143
Q3 '11
Q4 '11(3)
Q1 '12
Q2 '12
Q3 '12
Coal Adjusted EBITDA
Average Sales Price
Coal Adj EBITDA / ton
Coal Cash Cost / ton
Q3 '11
Q4 '11
Q1 '12
Q2 '12
Q3 '12
Coal Sales
371
363
373
365
392
Coal Producton
340
349
375
401
349
Purchased Coal
22
20
19
4
10
Reject Rate (%)
64
65
68
66
67
($ in millions, except per ton amounts)
(1) For a definition and a reconciliation of Adjusted EBITDA, please see the
appendix. (2)
Average Sales Price is the weighted average sales price for all coal sales volumes, including
sales to affiliates and sales to Jewell Coke. (3)
Q4 2011 Adjusted EBITDA inclusive of Black Lung Liability charge of $3.4 million and
OPEB expense allocation of $1.8 million. |
 SunCoke
Energy Q3 2012 Earnings Conference Call 10
Coal Mining Action Plan
Coal Mining Action Plan
Taking more aggressive action in Q4 2012 to reduce costs and
improve productivity to position coal business for 2013
•
Rationalizing underground mining plan
–
Idling 2 company operated mines (6
4) and 3 contract mines (8
5)
Maintain
idled
operations
on
“stand-by”
for
when
markets
improve
–
Concentrating people and equipment in remaining mines, while leveraging lower
variable costs (such as royalties, transportation, etc.)
•
Implementing improved underground mining practices
–
Relocating two operating sections in largest company mine closer
to portal
–
Implement deep cut plans as MSHA approval received
•
Installing new cyclone & ultra fine circuit in prep plant; expect to complete by
year end
–
Anticipate this will improve yields by at least 2% and achieve payback in 18 months
•
Targeting at least 10% reduction in overall Jewell underground cash costs in
2013 |
 Coal Mining
Business Outlook Coal Mining Business Outlook
SunCoke Energy Q3 2012 Earnings Conference Call
11
•
2013 mining plan based on expected flat sales volumes vs. 2012
(approximately 1.5 million tons)
–
Revelation venture and purchased coal expected to represent about ~30% of
volumes in 2013, compared with estimated 15% in 2012
–
Mix change will drive lower average cost per ton
•
2013 pricing/contracting in process
–
Anticipate significant reduction from YTD 2012 average realized price of $168
per ton
–
Will update outlook once pricing finalized in Q4 2012
–
Expect Coal Mining will contribute minimally to 2013 results
•
Despite anticipated underground cash cost reductions and mix
improvement, significant margin compression likely in 2013 |
 Full
Year Adjusted EBITDA Full Year Adjusted EBITDA
(1)
(1)
Outlook
Outlook
SunCoke Energy Q3 2012 Earnings Conference Call
12
FY 2012 Adjusted EBITDA
(1)
expected to increase by more than $110 million
vs. FY 2011 driven by strength of coke business
($ in millions)
(1)
$55.8
$255
-
$270
$141
$65.5
$72.4
$61
-
$76
Q1 2012
Adjusted EBITDA
Q2 2012
Adjusted EBITDA
Q3 2012
Adjusted EBITDA
Estimated
Q4 2012
Adjusted EBITDA
Estimated
FY 2012
Adjusted EBITDA
FY 2011
Adjusted
EBITDA
For a definition and reconciliation of Adjusted EBITDA, please see the appendix.
|
 Updated 2012
Guidance Updated 2012 Guidance
Metric
Expected 2012 Outlook
Adjusted EBITDA
(1)
$255 million –
$270 million
EPS* (at 22% tax rate)
$1.30 –
$1.40
Capital Expenditures &
Investments
Approximately $75 million
Free Cash Flow
(2)
$100 million +
Cash Tax Rate
10% –
15%
Effective Tax Rate
20% –
24%
Corporate Costs
$29 million –
$32 million
Coke Production
In excess of 4.3 million tons
Coal Production
Approximately 1.4 million tons
SunCoke Energy Q3 2012 Earnings Conference Call
13
(1) For a definition and reconciliation of Adjusted EBITDA, please see the appendix.
(2) For a definition of Free Cash Flow and reconciliation, please see the appendix.
*Diluted |
 Questions |
 Media releases and SEC filings
are available on
www.suncoke.com
Investor Relations:
630-824-1907 |
 Appendix
|
 Definitions
•
Adjusted
EBITDA
represents
earnings
before
interest,
taxes,
depreciation,
depletion
and
amortization
(“EBITDA”)
adjusted
for
sales
discounts and the deduction of income attributable to noncontrolling 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
customers
of
a
portion
of
nonconventional
fuel
tax
credits,
which
reduce
our
income
tax
expense.
However,
we
believe
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
that
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 interests 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 in other businesses. Adjusted EBITDA does not represent and should
not be considered as an alternative to net income as determined by GAAP, and calculations thereof
may not be comparable to those reported by other companies. We believe Adjusted
EBITDA is an important measure of operating performance
and
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. Adjusted EBITDA is a measure
of operating performance that is not defined by GAAP and should not be considered a
substitute for net (loss) income as determined in accordance with GAAP.
•
Adjusted
EBITDA/Ton
represents
Adjusted
EBITDA
divided
by
tons
sold.
•
Free Cash Flow
equals cash from operations less cash used in investing activities less cash
distributions to non-controlling interests. Management
believes
Free
Cash
Flow
information
enhances
an
investor’s
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 GAAP
and may not be comparable to other similarly titled measures of other businesses.
•
Pretax
Return
on
Invested
Capital
(ROIC)
is
defined
as
Adjusted
EBITDA
less
depreciation
expense
plus
net
income
attributable
to
non-controlling
interests
divided
by
average
invested
capital
(stockholders’
equity
plus
total
debt
net
of
cash
and
cash
equivalents).
We use Pretax ROIC as one measure of how effectively we deploy capital and make
multi-year investment decisions. It is also used as a
long-term performance measure under certain of our incentive compensation plans. Pretax ROIC is not a measure of financial
performance under generally accepted accounting principles, and may not be
comparable to other similarly titled measures used by other companies. Pretax
ROIC should not be considered in isolation or as an alternative to net earnings as an indicator of
performance. We define segment level Pretax ROIC as Adjusted EBITDA less
depreciation expense plus net income attributable to non-controlling
interests divided by average allocated invested capital. Average allocated invested capital for each respective
segment is calculated pro-rata based on the segment level identifiable assets
for the period as disclosed in our public filings. SunCoke Energy Q3 2012
Earnings Conference Call 17 |
 Reconciliations
SunCoke Energy Q3 2012 Earnings Conference Call
18
$ in millions
Q3 2012
Q2 2012
Q1 2012
FY 2011
Q4 2011
Q3 2011
Q2 2011
Q1 2011
Adjusted Operating Income
54.8
46.6
37.1
80.4
14.9
33.5
24.6
7.4
Net Income (Loss) attributable to Noncontrolling Interest
1.3
1.3
(0.3)
(1.7)
(0.5)
3.4
1.6
(6.2)
Subtract: Depreciation Expense
(18.9)
(20.2)
(18.4)
(58.4)
(16.0)
(14.7)
(14.7)
(13.0)
Adjusted EBITDA
72.4
65.5
55.8
140.5
31.4
44.8
37.7
26.6
Subtract: Depreciation, depletion and amortization
(18.9)
(20.2)
(18.4)
(58.4)
(16.0)
(14.7)
(14.7)
(13.0)
Subtract: Financing expense, net
(12.2)
(11.8)
(12.0)
(1.4)
(7.1)
(3.3)
4.5
4.5
Subtract: Income Tax
(7.6)
(7.0)
(5.3)
(7.2)
2.9
(5.1)
(1.9)
(3.1)
Subtract: Sales Discount
(2.1)
(3.8)
(3.2)
(12.9)
(3.2)
(3.5)
(3.1)
(3.1)
Add: Net Income attributable to NCI
1.3
1.3
(0.3)
(1.7)
(0.5)
3.4
1.6
(6.2)
Net Income
32.9
24.0
16.6
58.9
7.5
21.6
24.1
5.7
Reconciliations from Adjusted Operating Income and Adjusted EBITDA to Net Income
|
 Reconciliations
SunCoke Energy Q3 2012 Earnings Conference Call
19
$ in millions, except per ton data
Jewell
Coke
Other
Domestic
Coke
International
Coke
Jewell
Coal
Corporate
Combined
Domestic
Coke
Q3 2012
Adjusted EBITDA
13.6
54.9
0.9
10.7
(7.7)
72.4
68.5
Subtract: Depreciation, depletion and amortization
(1.4)
(12.7)
-
(4.2)
(0.6)
(18.9)
(14.1)
to noncontrolling interests
1.3
1.3
1.3
Adjusted Pre-Tax Operating Income
12.2
43.5
0.9
6.5
(8.3)
54.8
55.7
Adjusted EBITDA
13.6
54.9
0.9
10.7
(7.7)
72.4
68.5
Sales Volume (thousands of tons)
183
933
310
392
1,116
Adjusted EBITDA per Ton
74.3
58.8
2.9
27.3
61.4
Average Allocated Invested Capital
(1)
51.2
889.0
32.6
117.2
NMF
1,090.1
940.3
Annualized Quarterly Pretax ROIC
95%
20%
11%
22%
NMF
20%
24%
Q2 2012
Adjusted EBITDA
12.5
48.6
0.7
9.3
(5.6)
65.5
61.1
Subtract: Depreciation, depletion and amortization
(1.3)
(13.7)
(0.1)
(4.3)
(0.8)
(20.2)
(15.0)
to noncontrolling interests
1.3
1.3
1.3
Adjusted Pre-Tax Operating Income
11.2
36.2
0.6
5.0
(6.4)
46.6
47.4
Adjusted EBITDA
12.5
48.6
0.7
9.3
(5.6)
65.5
61.1
Sales Volume (thousands of tons)
170
892
358
373
1,062
Adjusted EBITDA per Ton
73.5
54.5
2.0
24.9
57.5
Average Allocated Invested Capital
(1)
50.9
892.7
36.6
117.7
NMF
1,097.9
943.6
Annualized Quarterly Pretax ROIC
88%
16%
7%
17%
NMF
17%
20%
Q1 2012
Adjusted EBITDA
15.0
40.1
0.1
7.4
(6.8)
55.8
55.1
Subtract: Depreciation, depletion and amortization
(1.3)
(12.6)
(0.1)
(4.1)
(0.3)
(18.4)
(13.9)
to noncontrolling interests
(0.3)
(0.3)
(0.3)
Adjusted Pre-Tax Operating Income
13.7
27.2
-
3.3
(7.1)
37.1
40.9
Adjusted EBITDA
15.0
40.1
0.1
7.4
(6.8)
55.8
55.1
Sales Volume (thousands of tons)
186
892
358
373
1,078
Adjusted EBITDA per Ton
80.6
45.0
0.3
19.8
51.1
Average Allocated Invested Capital
(1)
53.3
928.2
41.0
119.6
NMF
1,142.1
981.5
Annualized Quarterly Pretax ROIC
103%
12%
0%
11%
NMF
13%
17%
Reconciliations from Adjusted EBITDA to Adjusted Pre-Tax Operating Income
|
 Reconciliations
SunCoke Energy Q3 2012 Earnings Conference Call
20
$ in millions, except per ton data
Jewell
Coke
Other
Domestic
Coke
International
Coke
Jewell
Coal
Corporate
Combined
Domestic
Coke
FY 2011
Adjusted EBITDA
46.1
89.4
13.7
35.5
(44.2)
140.5
135.5
Subtract: Depreciation, depletion and amortization
(4.9)
(38.7)
(0.2)
(12.9)
(1.7)
(58.4)
(43.6)
to noncontrolling interests
(1.7)
(1.7)
(1.7)
Adjusted Pre-Tax Operating Income
41.2
49.0
13.5
22.6
(45.9)
80.4
90.2
Adjusted EBITDA
46.1
89.4
13.7
35.5
(44.2)
140.5
135.5
Sales Volume (thousands of tons)
702
3,068
1,442
1,454
3,770
Adjusted EBITDA per Ton
65.7
29.1
9.5
24.4
35.9
Average Allocated Invested Capital
52.8
627.8
37.4
99.8
NMF
817.8
680.6
Pretax ROIC
78%
8%
36%
23%
NMF
10%
13%
Q4 2011
Adjusted EBITDA
10.6
21.3
10.2
2.5
(13.2)
31.4
31.9
Subtract: Depreciation, depletion and amortization
(1.2)
(10.6)
(0.1)
(3.7)
(0.4)
(16.0)
(11.8)
to noncontrolling interests
(0.5)
(0.5)
(0.5)
Adjusted Pre-Tax Operating Income
9.4
10.2
10.1
(1.2)
(13.6)
14.9
19.6
Adjusted EBITDA
10.6
21.3
10.2
2.5
(13.2)
31.4
31.9
Sales Volume (thousands of tons)
166
837
295
363
1,003
Adjusted EBITDA per Ton
63.9
25.4
34.6
6.9
31.8
Average Allocated Invested Capital
46.7
594.0
33.7
105.6
NMF
779.9
640.6
Annualized Quarterly Pretax ROIC
81%
7%
120%
-5%
NMF
8%
12%
Q3 2011
Adjusted EBITDA
13.9
34.3
1.7
9.2
(14.3)
44.8
48.2
Subtract: Depreciation, depletion and amortization
(1.2)
(9.9)
-
(3.3)
(0.3)
(14.7)
(11.1)
to noncontrolling interests
3.4
3.4
3.4
Adjusted Pre-Tax Operating Income
12.7
27.8
1.7
5.9
(14.6)
33.5
40.5
Adjusted EBITDA
13.9
34.3
1.7
9.2
(14.3)
44.8
48.2
Sales Volume (thousands of tons)
191
777
373
371
968
Adjusted EBITDA per Ton
72.8
44.1
4.6
24.8
49.8
Average Allocated Invested Capital
53.5
636.2
34.8
115.1
NMF
839.6
689.7
Annualized Quarterly Pretax ROIC
95%
17%
20%
21%
NMF
16%
23%
Reconciliations from Adjusted EBITDA to Adjusted Pre-Tax Operating Income
|
 Reconciliations
Reconciliations
SunCoke Energy Q3 2012 Earnings Conference Call
21
$ in millions, except per ton data
Jewell
Coke
Other
Domestic
Coke
International
Coke
Jewell
Coal
Corporate
Combined
Domestic
Coke
Q2 2011
Adjusted EBITDA
10.6
25.3
0.8
11.5
(10.5)
37.7
35.9
Subtract: Depreciation, depletion and amortization
(1.4)
(9.6)
(0.1)
(3.2)
(0.4)
(14.7)
(11.0)
to noncontrolling interests
1.6
1.6
1.6
Adjusted Pre-Tax Operating Income
9.2
17.3
0.7
8.3
(10.9)
24.6
26.5
Adjusted EBITDA
10.6
25.3
0.8
11.5
(10.5)
37.7
35.9
Sales Volume (thousands of tons)
170
757
412
334
927
Adjusted EBITDA per Ton
62.4
33.4
1.9
34.4
38.7
Average Allocated Invested Capital
57.9
648.2
39.7
117.7
NMF
863.4
706.1
Annualized Quarterly Pretax ROIC
64%
11%
7%
28%
NMF
11%
15%
Q1 2011
Adjusted EBITDA
11.0
8.5
1.0
12.3
(6.2)
26.6
19.5
Subtract: Depreciation, depletion and amortization
(1.1)
(8.6)
-
(2.7)
(0.6)
(13.0)
(9.7)
to noncontrolling interests
(6.2)
(6.2)
(6.2)
Adjusted Pre-Tax Operating Income
9.9
(6.3)
1.0
9.6
(6.8)
7.4
3.6
Adjusted EBITDA
11.0
8.5
1.0
12.3
(6.2)
26.6
19.5
Sales Volume (thousands of tons)
175
697
362
386
872
Adjusted EBITDA per Ton
62.9
12.2
2.8
31.9
22.4
Average Allocated Invested Capital
56.0
645.6
41.4
83.8
NMF
826.9
701.7
Annualized Quarterly Pretax ROIC
71%
-4%
10%
46%
NMF
4%
2%
Reconciliations from Adjusted EBITDA to Adjusted Pre-Tax Operating Income
|
 SunCoke Energy Q3 2012 Earnings Conference Call
22
Pretax Return on Invested Capital Reconciliation
(1)
(2)
Q1 2012 Average Invested Capital includes Middletown in both the beginning and ending of
quarter average (Q1 2012 and Q4 2011) See Adjusted EBITDA and Pretax ROIC Reconciliation
for respective periods, 2010 uses Adjusted Pro Forma Operating Income Consolidated Sun
Coke Energy Q3 2012
Q2 2012
Q1 2012
2011
Q4 2011
Q3 2011
Q2 2011
Q1 2011
2010
Adjusted Pre-Tax Operating Income
(1)
54.8
46.6
37.1
80.4
14.9
33.5
24.6
7.4
151.5
Invested Capital ($ in millions)
Q3 2012
Q2 2012
Q1 2012
(2)
2011
Q4 2011
Q3 2011
Q2 2011
Q1 2011
2010
Debt
$724.1
$724.9
$725.7
$726.4
$726.4
$697.8
$794.7
$715.7
$655.3
Equity
543.6
535.4
513.3
559.9
559.9
604.5
457.3
433.4
429.3
Cash
(157.8)
(190.0)
(113.6)
(127.5)
(127.5)
(110.9)
(30.5)
(11.0)
(40.1)
Middletown
(402.8)
(402.8)
(387.6)
(346.1)
(286.7)
(242.2)
Invested Capital
$1,109.9
$1,070.3
$1,125.4
$756.0
$756.0
$803.8
$875.4
$851.5
$802.4
Average Invested Capital*
$1,090.1
$1,097.9
$1,142.1
$817.8
$779.9
$839.6
$863.4
$826.9
$844.0
Q3 2012
Q2 2012
Q1 2012
2011
Q4 2011
Q3 2011
Q2 2011
Q1 2011
2010
Quarterly ROIC
20%
17%
13%
8%
16%
11%
4%
Last Twelve Months' ROIC
10%
18%
*5 quarter average for 2011, two quarter average for each quarter, year-end average for
2010 |
 SunCoke Energy Q3 2012 Earnings Conference Call
23
Pretax Return on Invested Capital Reconciliation
Period ended
Jewell
Coke
Other
Domestic Coke
International
Coke
Coal
Mining
Corporate
and Other
Total
Identifiable Assets for
Allocating Invested Capital
Q3 2012
86.0
1,447.7
52.8
190.1
183.8
1,960.4
Q2 2012
81.4
1,458.4
53.9
193.0
183.5
1,970.2
Q1 2012
83.9
1,440.2
64.6
189.1
141.1
1,918.9
Q4 2011, inc Middletown
81.6
1,440.8
62.7
182.1
174.6
1,941.8
Q4 2011
81.6
1,038.0
62.7
182.1
174.6
1,539.0
Q3 2011
77.7
990.6
52.7
178.3
192.3
1,879.2
Q2 2011
85.1
954.4
53.6
173.5
67.2
1,972.6
Q1 2011
82.6
922.6
61.2
167.3
48.9
1,860.1
2010
80.9
962.6
59.7
76.7
7.3
1,718.5
Percentage of
Invested Capital
Q3 2012
4.8%
81.5%
3.0%
10.7%
NMF
100.0%
Q2 2012
4.6%
81.6%
3.0%
10.8%
NMF
100.0%
Q1 2012
4.7%
81.0%
3.6%
10.6%
NMF
100.0%
Q4 2011, inc Middletown
4.6%
81.5%
3.5%
10.3%
NMF
100.0%
Q4 2011
6.0%
76.1%
4.6%
13.3%
NMF
100.0%
Q3 2011
6.0%
76.2%
4.1%
13.7%
NMF
100.0%
Q2 2011
6.7%
75.4%
4.2%
13.7%
NMF
100.0%
Q1 2011
6.7%
74.8%
5.0%
13.6%
NMF
100.0%
2010
6.9%
81.6%
5.1%
6.5%
NMF
100.0%
Allocated
Invested Capital
Q3 2012
53.7
904.4
33.0
118.8
-
1,109.9
Q2 2012
48.8
873.6
32.3
115.6
-
1,070.3
Q1 2012
53.1
911.7
40.9
119.7
-
1,125.4
Q4 2011, inc Middletown
53.5
944.8
41.1
119.4
-
1,158.8
Q4 2011
45.2
575.1
34.7
100.9
-
756.0
Q3 2011
48.1
612.9
32.6
110.3
-
803.8
Q2 2011
58.8
659.6
37.0
119.9
-
875.4
Q1 2011
57.0
636.7
42.3
115.5
-
851.5
2010
55.0
654.6
40.6
52.1
-
802.4
Note: This table excludes
Middletown assets up to and including Q4 2011. At the end of Q4 2011, identifiable assets included in Other Domestic Coke attributable to Middletown were
$402.8m (prior to Q4 2011, Middletown was included in the Corporate and Other segment); see historical
segment detail in public filings for additional detail. |
  (in
millions) 2012E
Low
2012E
High
Net Income
$94
$104
Depreciation, Depletion and Amortization
80
78
Total financing costs, net
48
47
Income tax expense
25
34
EBITDA
$247
$263
Sales discounts
11
12
Noncontrolling interests
(3)
(5)
Adjusted EBITDA
$255
$270
Estimated 2012 EBITDA Reconciliation
2012E Net Income to Adjusted EBITDA Reconciliation
SunCoke Energy Q3 2012 Earnings Conference Call
24 |
 Free Cash Flow
Reconciliation Free Cash Flow Reconciliation
SunCoke Energy Q3 2012 Earnings Conference Call
25
(in millions)
Estimated
2012
For nine
months ended
9/30/2012
(Actual)
Cash from operations
In excess of
$ 179
$ 78
Less cash used for investing activities
Approx.
(75)
(41)
Less payments to minority interest
Approx.
(4)
(0)
Free Cash Flow
In excess of
$ 100
$ 36
2012E Estimated Free Cash Flow Reconciliation |