SECURITIES AND EXCHANGE COMMISSION

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ý Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act) ~~of 1934.~~. Yes ¨ No ý

The registrant had ~~23,572,550~~46,206,168 common ~~units and 15,709,697 subordinated~~ units outstanding at April ~~24, 2015~~.22, 2016.

~~Table of Contents~~

SUNCOKE ENERGY PARTNERS, L.P.

TABLE OF CONTENTS



PART I - FINANCIAL INFORMATION

Item 1. Combined and Consolidated Financial Statements	1

Combined and Consolidated Statements of Income (Unaudited) For the Three Months Ended March 31, ~~2015~~2016 and ~~2014~~2015	1

~~Combined and~~ Consolidated Balance Sheets ~~(Unaudited)~~ At March 31, ~~2015~~2016 (Unaudited) and December 31, ~~2014~~2015	2

Combined and Consolidated Statements of Cash Flows (Unaudited) For the Three Months Ended March 31, ~~2015~~2016 and ~~2014~~2015	3

Consolidated Statement of Equity (Unaudited) For the Three Months Ended March 31, ~~2015~~2016	4

Notes to the Combined and Consolidated Financial Statements	5

1. General	5

2. ~~Acquisition~~Related Party Transaction and Agreements	56

3. ~~Related Party Transactions~~Cash Distributions and Net Income Per Unit	7

4. ~~Net Income Per Unit and Cash Distributions~~Inventories	811

5. ~~Inventories~~Goodwill and Other Intangible Assets	11

6. Income Taxes	1112

7. Debt	12

8. Supplemental Cash Flow Information	1213

9. Commitments and Contingent Liabilities	1213

10. Fair Value Measurements	1314

11. Business Segment Disclosures	1315

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	1718

Item 3. Quantitative and Qualitative Disclosures About Market Risk	2832

Item 4. Controls and Procedures	2832

PART II - OTHER INFORMATION

Item 1. Legal Proceedings	2933

Item 1A. Risk Factors	2933

Item 2. Unregistered Sale of Equity Securities and Use of Proceeds	33

Item 6. Exhibits	3034

Signature	3135

~~Table of Contents~~

PART I - FINANCIAL INFORMATION



Item 1.	Combined and Consolidated Financial Statements

SunCoke Energy Partners, L.P.

Combined and Consolidated Statements of Income

(Unaudited)

Three Months Ended March 31,
2015 2014
(Dollars and units in millions, except per unit amounts)
Revenues
Sales and other operating revenue $ 203.3
$ 214.5
Costs and operating expenses
Cost of products sold and operating expenses 147.4
166.0
Selling, general and administrative expenses 7.6
6.3
Depreciation and amortization expense 14.6
13.0
Total costs and operating expenses 169.6
185.3
Operating income 33.7
29.2
Interest expense, net 20.6
2.9
Income before income tax expense 13.1
26.3
Income tax (benefit) expense (3.3 ) 0.6
Net income 16.4
25.7
Less: Net income attributable to noncontrolling interests 3.2
9.9
Net income attributable to SunCoke Energy Partners, L.P./Predecessor $ 13.2
$ 15.8
Less: Net income attributable to Predecessor 0.6
2.6
Net income attributable to SunCoke Energy Partners, L.P. $ 12.6
$ 13.2

General partner's interest in net income $ 1.8
$ 3.0
Limited partners' interest in net income $ 11.4
$ 12.8
Net income per common unit (basic and diluted) $ 0.29
$ 0.41
Net income per subordinated unit (basic and diluted) $ 0.29
$ 0.41
Weighted average common units outstanding (basic and diluted) 23.3
15.7
Weighted average subordinated units outstanding (basic and diluted) 15.7
15.7

~~(See Accompanying Notes)~~



	Three Months Ended March 31,
	2016			2015

	(Dollars and units in millions, except per unit amounts)
Revenues
Sales and other operating revenue	$	194.5		$	203.3
Costs and operating expenses
Cost of products sold and operating expenses	134.2			147.4
Selling, general and administrative expenses	8.4			7.6
Depreciation and amortization expense	18.7			14.6
Total costs and operating expenses	161.3			169.6
Operating income	33.2			33.7
Interest expense, net	12.5			11.2
(Gain) loss on extinguishment of debt	(20.4		)	9.4
Income before income tax expense	41.1			13.1
Income tax expense (benefit)	0.6			(3.3		)
Net income	40.5			16.4
Less: Net income attributable to noncontrolling interests	0.7			3.2
Net income attributable to SunCoke Energy Partners, L.P./Previous Owner	$	39.8		$	13.2
Less: Net income attributable to Previous Owner	—			0.6
Net income attributable to SunCoke Energy Partners, L.P.	$	39.8		$	12.6

General partner's interest in net income	$	10.1		$	1.8
Limited partners' interest in net income	$	29.7		$	11.4
Net income per common unit (basic and diluted)	$	0.64		$	0.29
Net income per subordinated unit (basic and diluted)	$	—		$	0.29
Weighted average common units outstanding (basic and diluted)	46.2			23.3
Weighted average subordinated units outstanding (basic and diluted)	—			15.7

~~Table of Contents~~

SunCoke Energy Partners, L.P.

~~Combined and~~ Consolidated Balance Sheets

~~(Unaudited)~~

March 31, 2015 December 31, 2014
(Dollars in millions)
Assets
Cash and cash equivalents $ 91.8
$ 33.3
Receivables 30.1
36.3
Receivables from affiliates, net —
3.1
Inventories 84.1
90.4
Other current assets 3.6
1.5
Total current assets 209.6
164.6
Properties, plants and equipment, net 1,197.5
1,213.4
Goodwill and other intangible assets, net 14.9
15.1
Deferred income taxes —
21.6
Deferred charges and other assets 0.5
2.3
Total assets $ 1,422.5
$ 1,417.0
Liabilities and Equity
Accounts payable $ 58.7
$ 61.1
Accrued liabilities 10.3
11.2
Interest payable 7.4
12.3
Total current liabilities 76.4
84.6
Long-term debt 597.4
399.0
Deferred income taxes 37.9
—
Asset retirement obligations 5.3
5.3
Other deferred credits and liabilities 1.5
1.4
Total liabilities 718.5
490.3
Equity
Held by public:
Common units (issued 16,790,101 and 16,789,164 units at March 31, 2015 and December 31, 2014, respectively)
241.1
239.1
Held by parent:

Common units (issued 6,782,449 and 4,904,752 units at March 31, 2015 and December 31, 2014, respectively) 165.1
113.8
Subordinated units (issued 15,709,697 units at March 31, 2015 and December 31, 2014, respectively) 205.6
203.7
General partner interest 10.6
9.2
Parent net equity —
349.8
Partners' capital attributable to SunCoke Energy Partners, L.P. 622.4
915.6
Noncontrolling interest 81.6
11.1
Total equity 704.0
926.7
Total liabilities and partners' net equity $ 1,422.5
$ 1,417.0

~~(See Accompanying Notes)~~



	March 31, 2016		December 31, 2015
	(Unaudited)
	(Dollars in millions)
Assets
Cash and cash equivalents	$	33.7	$	48.6
Receivables	44.9		40.0
Receivables from affiliates, net	—		1.4
Inventories	73.3		77.1
Other current assets	4.3		2.0
Total current assets	156.2		169.1
Restricted cash	10.3		17.7
Properties, plants and equipment (net of accumulated depreciation of $307.2 million and $291.1 million at March 31, 2016 and December 31, 2015, respectively)	1,317.2		1,326.5
Goodwill	67.1		67.7
Other intangible assets, net	184.8		187.4
Deferred charges and other assets	0.5		0.5
Total assets	$	1,736.1	$	1,768.9
Liabilities and Equity
Accounts payable	$	50.7	$	45.3
Accrued liabilities	22.7		12.9
Payable to affiliate, net	0.8		—
Current portion of long-term debt	1.1		1.1
Interest payable	6.6		17.5
Total current liabilities	81.9		76.8
Long-term debt	841.5		894.5
Deferred income taxes	38.3		38.0
Asset retirement obligations	5.7		5.6
Other deferred credits and liabilities	5.6		9.0
Total liabilities	973.0		1,023.9
Equity
Held by public:
Common units (issued 20,790,472 and 20,787,744 units at March 31, 2016 and December 31, 2015, respectively)	304.2		300.0
Held by parent:
Common units (issued 25,415,696 and 9,705,999 units at March 31, 2016 and December 31, 2015, respectively)	419.3		211.0
Subordinated units (issued zero units at March 31, 2016 and 15,709,697 units at December 31, 2015)	—		203.3
General partner interest	24.6		15.1
Partners' capital attributable to SunCoke Energy Partners, L.P.	748.1		729.4
Noncontrolling interest	15.0		15.6
Total equity	763.1		745.0
Total liabilities and equity	$	1,736.1	$	1,768.9

~~Table of Contents~~

SunCoke Energy Partners, L.P.

Combined and Consolidated Statements of Cash Flows

(Unaudited)

Three Months Ended March 31,
2015 2014

(Dollars in millions)
Cash Flows from Operating Activities:
Net income $ 16.4
$ 25.7
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense 14.6
13.0
Deferred income tax (benefit) expense (3.3 ) 0.6
Loss on debt extinguishment 9.4
—
Changes in working capital pertaining to operating activities:
Receivables (4.5 ) (9.4 )
Receivables from affiliate, net 4.7
6.4
Inventories 6.3
1.4
Accounts payable (2.4 ) (11.9 )
Accrued liabilities (0.9 ) (14.1 )
Interest payable (9.5 ) (2.8 )
Other (1.1 ) (1.9 )
Net cash provided by operating activities 29.7
7.0
Cash Flows from Investing Activities:
Capital expenditures (5.5 ) (16.1 )
Net cash used in investing activities (5.5 ) (16.1 )
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt 210.8
—
Repayment of long-term debt, including market premium (149.5 ) —
Debt issuance costs (4.2 ) —
Proceeds from revolving credit facility —
16.0
Repayment of revolving facility —
(16.0 )
Distributions to unitholders (public and parent) (22.2 ) (15.2 )
Distributions to noncontrolling interest (SunCoke Energy, Inc.) (0.6 ) (12.3 )
Net transfers to parent —
9.5
Net cash provided by (used in) financing activities 34.3
(18.0 )
Net increase (decrease) in cash and cash equivalents 58.5
(27.1 )
Cash and cash equivalents at beginning of period 33.3
46.3
Cash and cash equivalents at end of period $ 91.8
$ 19.2

~~(See Accompanying Notes)~~



	Three Months Ended March 31,
	2016			2015

	(Dollars in millions)
Cash Flows from Operating Activities:
Net income	$	40.5		$	16.4
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	18.7			14.6
Deferred income tax expense (benefit)	0.3			(3.3		)
(Gain) loss on extinguishment of debt	(20.4		)	9.4
Changes in working capital pertaining to operating activities:
Receivables	(4.9		)	(4.5		)
Receivables from affiliate, net	2.2			4.7
Inventories	3.8			6.3
Accounts payable	7.6			(2.4		)
Accrued liabilities	8.9			(0.9		)
Interest payable	(10.9		)	(9.5		)
Other	(5.4		)	(1.1		)
Net cash provided by operating activities	40.4			29.7
Cash Flows from Investing Activities:
Capital expenditures	(8.0		)	(5.5		)
Restricted cash	7.4			—
Other investing activities	0.6			—
Net cash used in investing activities	—			(5.5		)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt	—			210.8
Repayment of long-term debt, including market premium	(32.9		)	(149.5		)
Debt issuance costs	—			(4.2		)
Proceeds from revolving credit facility	20.0			—
Repayment of revolving credit facility	(20.0		)	—
Distributions to unitholders (public and parent)	(29.5		)	(22.2		)
Distributions to noncontrolling interest (SunCoke Energy, Inc.)	(1.3		)	(0.6		)
Capital contributions from SunCoke	8.4			—
Net cash (used in) provided by financing activities	(55.3		)	34.3
Net (decrease) increase in cash and cash equivalents	(14.9		)	58.5
Cash and cash equivalents at beginning of period	48.6			33.3
Cash and cash equivalents at end of period	$	33.7		$	91.8
Supplemental Disclosure of Cash Flow Information
Interest paid	$	24.3		$	21.0

~~Table of Contents~~

SunCoke Energy Partners, L.P.

~~Combined and~~ Consolidated Statement of Equity

(Unaudited)

Parent Net Equity Common
- Public Common
- SunCoke Subordinated
- SunCoke General Partner
- SunCoke Noncontrolling Interest Total
(Dollars in millions)
At December 31, 2014 $ 349.8
$ 239.1
$ 113.8
$ 203.7
$ 9.2
$ 11.1
$ 926.7
Partnership net income 0.6
4.9
1.9
4.6
1.2
3.2
16.4
Distribution to unitholders —
(9.1 ) (3.7 ) (8.5 ) (0.9 ) —
(22.2 )
Distributions to noncontrolling interest —
—
—
—
—
(0.6 ) (0.6 )
Dropdown of interest in Granite City:

Issuance of units —
—
50.7
—
1.0
—
51.7
Adjustments to equity for the acquisition of an interest in Granite City —
(79.2 ) (32.0 ) (74.0 ) (3.9 ) —
(189.1 )
Allocation of parent net equity in Granite City to SunCoke Energy Partners, L.P. (271.5 ) 85.4
34.4
79.8
4.0
67.9
—
Granite City net assets not assumed by SunCoke Energy Partners, L.P. (78.9 ) —
—
—
—
—
(78.9 )
At March 31, 2015 $ —
$ 241.1
$ 165.1
$ 205.6
$ 10.6
$ 81.6
$ 704.0



		Common - Public			Common - SunCoke			Subordinated - SunCoke			General Partner - SunCoke			Noncontrolling Interest			Total

	(Dollars in millions)
At December 31, 2015		$	300.0		$	211.0		$	203.3		$	15.1		$	15.6		$	745.0
Conversion of subordinated units to common units		—			203.3			(203.3		)	—			—			—
Partnership net income		16.5			13.2			—			10.1			0.7			40.5
Distribution to unitholders		(12.3		)	(15.2		)	—			(2.0		)	—			(29.5		)
Distributions to noncontrolling interest		—			—			—			—			(1.3		)	(1.3		)
Capital contribution from SunCoke		—			7.0			—			1.4			—			8.4
At March 31, 2016		$	304.2		$	419.3		$	—		$	24.6		$	15.0		$	763.1

~~(See Accompanying Notes)~~

~~Table of Contents~~

SunCoke Energy Partners, L.P.

Notes to the Combined and Consolidated Financial Statements

1. General

Description of Business

SunCoke Energy Partners, L.P., (the "Partnership", "we", "our", and "us"), is a Delaware limited partnership formed in July 2012, which primarily ~~manufactures~~produces coke used in the blast furnace production of steel. At March 31, ~~2015,~~2016, we owned a 98 percent interest in Haverhill Coke Company LLC ("Haverhill") ~~and~~, Middletown Coke Company, LLC ("Middletown") ~~as well as a 75 percent interest in~~and Gateway Energy and Coke Company, LLC ("Granite City"). The remaining 2 percent ownership interest in our three cokemaking facilities was owned by SunCoke Energy, Inc. ("SunCoke"). At March 31, ~~2015,~~2016, SunCoke, through a subsidiary, owned a ~~56.1~~53.9 percent partnership interest in us and all of our incentive distribution rights ("IDR") and indirectly owned and controlled our general partner, which holds a 2.0 percent general partner interest in us. ~~Our~~We also own a Coal Logistics business, which provides coal handling ~~and blending~~and/or mixing services to ~~third party~~third-party customers as well as to our own cokemaking facilities. Our Coal Logistics business consists of Convent Marine Terminal ("CMT"), Kanawha River Terminals LLC ("KRT") and SunCoke Lake Terminal, LLC ("Lake Terminal").

Incorporated in Delaware in 2012 and headquartered in Lisle, Illinois, we became a publicly-traded ~~company~~partnership in 2013 and our stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “SXCP.”

Basis of Presentation

The accompanying unaudited combined and consolidated financial statements included herein have been prepared in conformity with accounting principles generally accepted in the United States ("GAAP") for interim reporting. Certain information and disclosures normally included in financial statements have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). In management’s opinion, the financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. The results of operations for the period ended March 31, ~~2015~~2016 are not necessarily indicative of the operating results for the full year. These unaudited interim combined and consolidated financial statements and notes should be read in conjunction with the audited combined and consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, ~~2014.~~2015.

~~On January 13, 2015, the Partnership acquired a 75 percent interest in SunCoke's Granite City cokemaking facility (the "Granite City Dropdown").~~ The combined and consolidated financial statements for the periods presented pertain to the operations of the Partnership and give retrospective effect to include the results of operations ~~financial position~~ and cash flows of Granite City (the "Previous Owner"), as a result of the January 2015 dropdown of a 75 percent interest in Granite City ~~Dropdown.~~

("Granite City participated in centralized financing and cash management programs not maintained at the Partnership for periods prior to the Granite City Dropdown. Accordingly, none of SunCoke’s cash or interest income for periods prior to the Granite City Dropdown has been assigned to Granite City in the combined and consolidated financial statements. Advances between Granite City and SunCoke that are specifically related to Granite City have been reflected in the combined and consolidated financial statements for periods prior to the Granite City Dropdown. Transfers of cash to and from SunCoke’s financing and cash management program are reflected as a component of parent net equity on the Combined and Consolidated Balance Sheets. The Granite City Dropdown did not impact historical earnings per unit as pre-acquisition earnings were allocated to our general partner.Dropdown").

New Accounting Pronouncements

In April ~~2015,~~2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ~~2015-03, "Interest—Imputation of Interest (Subtopic 835-30)~~2016-10, "Revenue From Contracts With Customers (Topic 606): ~~Simplifying the Presentation of Debt Issuance Cost.~~Identifying Performance Obligations and Licensing." ASU ~~2015-03 requires that debt issuance costs~~2016-10 clarifies guidance related to ~~a recognized debt liability be presented~~identifying performance obligations and licensing implementation guidance contained in the ~~balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts.~~new revenue recognition standard. It is effective for ~~fiscal years, and interim~~annual reporting periods ~~within those fiscal years,~~ beginning after December 15, ~~2015, with early adoption permitted. The Company early adopted this ASU during the first quarter of 2015. See Note 7.~~

In February 2015, the FASB issued ASU 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis." ASU 2015-02 eliminates the deferral of FASB Statement No. 167, "Amendments to FASB Interpretation No. 46(R)," and makes changes to both the variable interest model and the voting model. It is effective for fiscal years, and2017, including interim periods within ~~those fiscal years, beginning after December 15, 2015, with~~that reporting period and permits early adoption ~~permitted.~~on a limited basis. The ~~Company does not expect~~Partnership is currently evaluating this ASU to ~~have a material effect~~determine its potential impact on the ~~Company's~~Partnership's financial condition, results of operations, or cash flows.

In March 2016, the FASB issued ASU 2016-08, "Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)." ASU 2016-08 clarifies the implementation guidance on principal versus agent considerations. It is effective for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018, with early adoption permitted. The Partnership is currently evaluating this ASU to determine its potential impact on the Partnership's financial condition, results of operations, and cash flows.

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." ASU 2016-02 requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. It is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020, with early adoption permitted. The Partnership is currently evaluating this ASU to determine its potential impact on the Partnership's financial condition, results of operations, and cash flows.

Reclassifications

Certain amounts in the prior period combined and consolidated financial statements have been reclassified to conform to the current year presentation.

~~2. Acquisition~~

Table of Contents

~~Granite City Dropdown~~

On January 13, 2015, the Partnership acquired a 75 percent interest in SunCoke's Granite City cokemaking facility for a total transaction value of $245.0 million. SunCoke continues to own the remaining 25 percent interest in Granite City. The Granite City cokemaking facility, which began operations in 2009, has annual cokemaking capacity of 650 thousand tons and produces super-heated steam for power generation. Both the coke and the steam are provided to U.S. Steel under a long-term take-or-pay contract that expires in 2025.

The Granite City Dropdown was a transfer of businesses between entities under common control. Accordingly, our historical financial information has been retrospectively adjusted to include Granite City’s historical results and financial position for all periods presented. The Partnership accounted for the Granite City Dropdown as an equity transaction, with SunCoke's interest in Granite City reflected in parent net equity until the date of the transaction. On the date of the Granite City Dropdown, the parent net equity of $203.6 million in the Granite City cokemaking facility was allocated to the general partner and limited partners based on their ownership interest in the Partnership immediately following the equity issuances described above and $67.9 million was allocated to noncontrolling interest for the 25 percent of Granite City retained by SunCoke.

In connection with the Granite City Dropdown, the Partnership issued 1.9 million common units totaling approximately $50.7 million and $1.0 million of general partner interests to SunCoke. In addition, the Partnership assumed and repaid $135.0 million principal amount of SunCoke’s outstanding 7.625 percent senior notes and paid $5.6 million of accrued interest and $7.7 million of redemption premium in connection therewith. The Partnership retained the remaining cash of $45.0 million to pre-fund SunCoke’s obligation to indemnify the Partnership for the anticipated cost of an environmental project at Granite City. To fund the Granite City Dropdown, the Partnership issued an additional $200.0 million of its 7.375 percent unsecured senior notes, due 2020 (the "Partnership Notes").

As the results of Granite City are presented combined with the results of the Partnership for periods prior to the Granite City Dropdown, the only impact on our Combined and Consolidated Statement of Cash Flows for the Granite City Dropdown was the related financing activities discussed above.

~~Haverhill and Middletown Dropdown~~

On May 9, 2014, we completed the acquisition of an additional 33 percent interest in each of the Haverhill, OH ("Haverhill") and Middletown, OH ("Middletown") cokemaking facilities, in each of which we previously had a 65 percent interest, for total transaction value of $365.0 million ~~(the "Haverhill and Middletown Dropdown").~~

The results of the Haverhill and Middletown operations are consolidated in the combined and consolidated financial statements of the Partnership for all periods presented and any interest in the Haverhill and Middletown operations retained by Sun Coal & Coke is recorded as a noncontrolling interest of the Partnership. Sun Coal & Coke retained a 35 percent ~~interest in Haverhill and Middletown prior to the Haverhill and Middletown Dropdown and a~~ ~~2 percent~~ ~~interest in Haverhill and Middletown subsequent to the Haverhill and Middletown Dropdown~~. ~~We accounted for the Haverhill and Middletown Dropdown as an equity transaction, which resulted in a~~ ~~$171.3 million~~ ~~reduction to noncontrolling interest for the additional 33 percent~~ ~~interest acquired by the Partnership. Partnership equity was decreased $170.1 million for the difference between the consideration discussed below and the $171.3 million~~ ~~of noncontrolling interest acquired.~~

~~Total consideration for the Haverhill and Middletown Dropdown included $3.4 millionof cash to SunCoke,~~ ~~2.7 million~~ ~~common units totaling$80.0 million~~ ~~issued to SunCoke and $3.3 million~~of general partner interests issued to SunCoke. We retained $7.0 million in cash to pre-fund SunCoke’s obligation to indemnify us for the anticipated cost of an environmental remediation project at Haverhill, which did not impact Partnership equity. In addition, we assumed and repaid approximately $271.3 million of outstanding SunCoke debt and other liabilities, which includes a market premium of$11.4 million to complete the tender of certain debt. The market premium was included in Partnership net income. In conjunction with the assumption of this debt, the Partnership also assumed the related debt issuance costs and debt discount, which were included in the adjustments to equity related to the acquisition in the Consolidated Statement of Equity.

~~We funded the Haverhill and Middletown Dropdown with$88.7 millionof net proceeds from the sale of 3.2 millioncommon units to the public, which was completed on April 30, 2014, and approximately$263.1 millionof gross proceeds from the issuance of an additional $250.0 millionaggregate principal amount of Partnership Notes through a private placement on May 9, 2014.In conjunction with the issuance of the additional Partnership Notes, the Partnership incurred debt issuance costs of~~ ~~$4.9 million~~, ~~$0.9 million~~of which was considered a modification of debt and was included in other operating cash flows in the Combined and Consolidated Statement of Cash Flows with the remainder included in financing cash flows. In addition, the Partnership received ~~$5.0 million~~ ~~to fund interest from February 1, 2014 to May 9, 2014, the period prior to the issuance. This interest was paid to noteholders on August 1, 2014.~~

As Haverhill and Middletown were consolidated both prior to and subsequent to the Haverhill and Middletown Dropdown, the only impact on our Combined and Consolidated Statement of Cash Flows was the related financing activities discussed above.

~~Table of Contents~~

The terms of the contribution agreements and the acquisition of the interest in Granite City and interest in Haverhill and Middletown were approved by the conflicts committee of our general partner’s Board of Directors, which consists entirely of independent directors.

3.2. Related Party Transactions and Agreements

The related party transactions with SunCoke and its affiliates are described below.

Transactions with Affiliate

Our Coal Logistics business provides coal handling ~~and blending~~and/or mixing services to certain SunCoke cokemaking operations. During ~~the~~ three months ended March 31, ~~2015~~2016 and ~~2014,~~2015, Coal Logistics recorded ~~$3.0 million and $2.8 million, respectively, in~~ revenues derived from services provided to SunCoke’s cokemaking ~~operations.~~operations of $2.6 million and $3.0 million, respectively. The Partnership also purchased coal and other services from SunCoke and its affiliates totaling ~~$1.5~~$0.1 million and ~~$7.7~~$1.5 million during the three months ended March 31, ~~2015~~2016 and ~~2014,~~2015, respectively. At March 31, ~~2015,~~ 2016,net payables ~~with~~to SunCoke and affiliates were ~~insignificant.~~$0.8 million, which was recorded in payable to affiliates, net on the Consolidated Balance Sheets.

Transactions with Related Parties

Our Coal Logistics business provides coal handling and storage services to Murray Energy Corporation ("Murray") and Foresight Energy LP ("Foresight"), who are related parties with The Cline Group. The Cline Group currently owns a 10.3 percent interest in the Partnership as part of the CMT acquisition. Additionally, Murray also holds a significant interest in Foresight. Sales to Murray and Foresight accounted for $5.1 million, or 2.6 percent, of the Partnership's sales and other operating revenue and were recorded in the Coal Logistics segment for the three months ended March 31, 2016. At March 31, 2016, receivables from Murray and Foresight were $13.5 million, which was recorded in receivables on the Consolidated Balance Sheets, and deferred revenue for minimum volume payments was $8.7 million, which was recorded in accrued liabilities on the Consolidated Balance Sheets. Deferred revenue on take-or-pay contracts is recognized into GAAP income annually based on the terms of the contract.

As part of the CMT acquisition, the Partnership withheld $21.5 million in cash to fund the completion of capital improvements at CMT. The cash withheld was recorded as restricted cash on the Consolidated Balance Sheet. During the first quarter of 2016, the Partnership amended an agreement with The Cline Group, which unrestricted $6.0 million of the restricted cash and relieved any obligation of the Partnership to repay these amounts to The Cline Group. The remaining restricted cash balance as of March 31, 2016 of $10.3 million is primarily related to the new state-of-the-art ship loader, which will allow for faster coal loading onto larger ships.

Additionally, the Partnership amended the contingent consideration terms with The Cline Group, which reduced the fair value of the contingent consideration liability from $7.9 million at December 31, 2015 to $4.2 million at March 31, 2016, with the resulting $3.7 million gain recognized as a reduction to costs of products sold and operating expenses on the Combined and Consolidated Statements of Income during the three months ended March 31, 2016. See Note 10.

Allocated Expenses

SunCoke charges us for all direct costs and expenses incurred on our behalf and allocated costs associated with support services provided to our operations. Allocated expenses from SunCoke for general corporate and operations support costs ~~totaled $6.6 million and $5.3 million for the~~ ~~three months ended March 31, 2015~~ ~~and 2014, respectively, and~~ are included in selling, general and administrative ~~expenses.~~expenses and totaled $7.0 million and $6.6 million for the three months ended March 31, 2016 and 2015, respectively. These costs include legal, accounting, tax, treasury, engineering, information technology, insurance, employee benefit costs, communications, human resources, and procurement. Corporate allocations are recorded in accordance with the terms of our omnibus agreement with SunCoke and our general partner. These allocations were increased in the first quarter of 2016 for additional support provided to the CMT operations.

In an effort to increase the Partnership's liquidity position for continued de-levering of its balance sheet, SunCoke provided a "reimbursement holiday" during the first quarter of 2016 on the corporate cost allocation to the Partnership, resulting in a capital contribution of $7.0 million. SunCoke also returned its IDR cash distribution of $1.4 million to the Partnership ("IDR giveback") as a capital contribution.

Omnibus Agreement

In connection with the closing of our initial public offering on January 24, 2013 ("IPO"), we entered into an omnibus agreement with SunCoke and our general partner that addresses certain aspects of our relationship with them, including:

Business Opportunities. We have preferential rights to invest in, acquire and construct cokemaking facilities in the United States and Canada. SunCoke has preferential rights to all other business opportunities.

Potential Defaults by Coke Agreement Counterparties. For a period of five years from the closing date of the IPO, SunCoke has agreed to make us whole (including an obligation to pay for coke) to the extent (i) AK Steel exercises the early termination right provided in its Haverhill coke sales agreement, (ii) any customer fails to purchase coke or defaults in payment under its coke sales agreement (other than by reason of force majeure or our default) or (iii) we amend a coke sales agreement's terms to reduce a customer's purchase obligation as a result of the customer's financial distress. We and SunCoke will share in any damages and other amounts recovered from ~~third parties~~third-parties arising from such events in proportion to our relative losses.

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Environmental Indemnity. SunCoke will indemnify us to the full extent of any remediation losses at the Haverhill and Middletown cokemaking facilities arising from any environmental matter discovered and identified as requiring remediation prior to the closing of the IPO. In addition, SunCoke contributed $67.0 million in partial satisfaction of this obligation from the proceeds of the IPO and an additional $7.0 million in connection with the Haverhill and Middletown Dropdown. SunCoke also has agreed towill indemnify us ~~to the full extent of any required~~for remediation losses at the Granite City cokemaking facility arising from any environmental matter discovered and identified as requiring remediation prior to the closing of the initial Granite City Dropdown. SunCoke ~~has~~ contributed ~~$45.0~~$67.0 million in partial satisfaction of this ~~obligation. See Note 2.~~obligation from the proceeds of the IPO, and an additional $52.0 million in connection with subsequent dropdowns. If, prior to the fifth anniversary of the closing of the IPO, a pre-existing environmental matter is identified as requiring remediation, SunCoke will indemnify us for up to $50.0 million of any such remediation costs (we will bear the first $5.0 million of any such costs).

Other Indemnification. SunCoke will fully indemnify us with respect to any additional tax liability related to periods prior to or in connection with the closing of the IPO or the Granite City Dropdown to the extent not currently presented on the ~~combined and consolidated balance sheet.~~Consolidated Balance Sheets. Additionally, SunCoke will either cure or fully indemnify us for losses resulting from any material title defects at the properties owned by the entities acquired in connection with the closing of the IPO or the Granite City Dropdown to the extent that those defects interfere with or could reasonably be expected to interfere with the operations of the related cokemaking facilities. We will indemnify SunCoke for events relating to our operations except to the extent that we are entitled to indemnification by SunCoke.

License. SunCoke has granted us a royalty-free license to use the name “SunCoke” and related marks. Additionally, SunCoke has granted us a non-exclusive right to use all of SunCoke's current and future cokemaking and related technology. We have not paid and will not pay a separate license fee for the rights we receive under the license.

Expenses and Reimbursement. SunCoke will continue to provide us with certain corporate and other services, and we will reimburse SunCoke for all direct costs and expenses incurred on our behalf and a portion of corporate and other costs and expenses attributable to our operations. ~~Additionally, we paid all fees in connection with~~SunCoke may consider providing additional support to the Partnership ~~Notes offerings and~~in the

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future by providing a corporate cost reimbursement holiday, whereby the Partnership ~~Revolver and~~would not be required to reimburse SunCoke for costs or a deferral, whereby the Partnership would be granted extended payment terms. Additionally, we have agreed to pay all ~~additional~~ fees in connection with any future financing arrangement entered into for the purpose of replacing the ~~Partnership Revolver~~credit facility or the ~~Partnership Notes.~~senior notes.

So long as SunCoke controls our general partner, the omnibus agreement will remain in full force and effect unless mutually terminated by the parties. If SunCoke ceases to control our general partner, the omnibus agreement will terminate, but our rights to indemnification and use of SunCoke's existing cokemaking and related technology will survive. The omnibus agreement can be amended by written agreement of all parties to the agreement, but we may not agree to any amendment that would, in the reasonable discretion of our general partner, be adverse in any material respect to the holders of our common units without prior approval of the conflicts committee.

4.3. Cash Distributions and Net Income Per Unit

Cash Distributions

Our partnership agreement generally provides that we will make cash distributions, if any, each quarter in the following manner:

first, 98 percent to the holders of common units and 2 percent to our general partner, until each common unit has received the minimum quarterly distribution of $0.412500 plus any arrearages from prior quarters;

second, 98 percent to the holders of subordinated units and 2 percent to our general partner, until each subordinated unit has received the minimum quarterly distribution of $0.412500; and

third, 98 percent to all unitholders, pro rata, and 2 percent to our general partner, until each unit has received a distribution of $0.474375.

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If cash distributions to our unitholders exceed $0.474375 per unit in any quarter, our unitholders and our general partner will receive distributions according to the following percentage allocations:



	Total Quarterly Distribution Per Unit Target Amount		Marginal Percentage Interest in Distributions
	Total Quarterly Distribution Per Unit Target Amount		Unitholders	General Partner
Minimum Quarterly Distribution	$0.412500		98%	2%
First Target Distribution	above $0.412500	up to $0.474375	98%	2%
Second Target Distribution	above $0.474375	up to $0.515625	85%	15%
Third Target Distribution	above $0.515625	up to $0.618750	75%	25%
Thereafter	above $0.618750		50%	50%

On January 26, 2015, our Board of Directors declared a quarterly cash distribution of $0.5408 per unit. This distribution was paid on February 27, 2015 to unitholders of record on February 13, 2015 and totaled $22.2 million. On April 20, 2015, our Board of Directors declared a quarterly cash distribution of $0.5715 per unit. This distribution will be paid on May 29, 2015 to unitholders of record on May 15, 2015.

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Our distributions are declared subsequent to quarter end. The table below represents total cash distributions applicable to the period in which the distributions were earned:

Three Months Ended March 31,
2015
2014⁽¹⁾
(Dollars in millions, except per unit amounts)
General partner's distributions:
General partner's distributions $ 0.5
$ 0.3
General partner's incentive distribution rights 0.9
0.1
Total general partner's distributions 1.4
0.4
Limited partners' distributions:
Common 13.4
7.9
Subordinated 9.0
7.9
Total limited partners' distributions 22.4
15.8
Total Cash Distributions Earned $ 23.8
$ 16.2
Cash distributions per unit applicable to limited partners $ 0.5715
$ 0.5000



Earned in Quarter Ended	Total Quarterly Distribution Per Unit		Total Cash Distribution including general partners IDRs		Date of Distribution	Unitholders Record Date
			(Dollars in millions)
March 31, 2015	$	0.5715	$	23.8	May 29, 2015	May 15, 2015
June 30, 2015	$	0.5825	$	29.0	August 31, 2015	August 14, 2015
September 30, 2015	$	0.5940	$	29.6	December 1, 2015	November 13, 2015
December 31, 2015	$	0.5940	$	29.5	March 1, 2016	February 15, 2016
March 31, 2016⁽¹⁾	$	0.5940	$	29.5	June 1, 2016	May 16, 2016


~~(1)~~	Includes cash distribution to unitholders of record as of March 31, 2014. The total cash distribution paid on May 30, 2014 was $19.2 million, which included an additional $3.0 million related to units issued to fund the Haverhill and Middletown Dropdown during May 2014, prior to the payment of the cash distribution.

(1) On April 18, 2016, our Board of Directors declared a cash distribution of $0.5940 per unit, which will be paid on June 1, 2016, to unitholders of record on May 16, 2016. SunCoke has elected to provide the Partnership with deferred payment terms on the IDR cash distributions in the second quarter of 2016.

Allocation of Net Income

Our partnership agreement contains provisions for the allocation of net income to the unitholders and the general partner. For purposes of maintaining partner capital accounts, the partnership agreement specifies that items of income and loss shall be allocated among the partners in accordance with their respective percentage interest. Normal allocations according to percentage interests are made after giving effect, if any, to priority income allocations in an amount equal to incentive cash distributions allocated 100 percent to the general partner. Net income from Granite City’s operations prior to the Granite City Dropdown is allocated to the general partner.

Upon payment of the cash distribution for the fourth quarter of 2015, the financial requirements for the conversion of all subordinated units were satisfied. As a result, the 15,709,697 subordinated units converted into common units on a one-for-one basis. For purpose of calculating net income per unit, the conversion of the subordinated units is deemed to have occurred on January 1, 2016. The conversion did not impact the amount of the cash distribution paid or the total number of the Partnership's outstanding units representing limited partner interest.

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The calculation of net income allocated to the general and limited partners was as follows:



	Three Months Ended March 31,
	2016			2015

	(Dollars in millions)
Net income attributable to SunCoke Energy L.P./Previous Owner	$	39.8		$	13.2
Less: Expenses allocated to Common - SunCoke ⁽¹⁾	(7.0		)	—
Less: Allocation of net income attributable to the Previous Owner to the general partner	—			0.6
Net income attributable to all partners	46.8			12.6
General partner's incentive distribution rights	9.4			0.9
Net income attributable to partners, excluding incentive distribution rights	37.4			11.7
General partner's ownership interest:	2.0		%	2.0		%
General partner's allocated interest in net income	0.7			0.3
General partner's incentive distribution rights	9.4			0.9
Net income attributable to the Previous Owner	—			0.6
Total general partner's interest in net income	$	10.1		$	1.8
Common - public unitholder's interest in net income	$	16.5		$	4.9
Common - SunCoke interest in net income:
Common - SunCoke interest in net income	20.2			1.9
Expenses allocated to Common - SunCoke ⁽¹⁾	(7.0		)	—
Total common - SunCoke interest in net income	13.2			1.9
Subordinated - SunCoke interest in net income	—			4.6
Total limited partners' interest in net income	$	29.7		$	11.4

(1)Per the amended Partnership agreement, expenses paid on behalf of the Partnership are to be allocated entirely to the partner who paid them. During the three months ended March 31, 2016, SunCoke paid $7.0 million of allocated corporate costs on behalf of the Partnership and will not seek reimbursement for those costs. These expenses are recorded as a direct reduction to SunCoke's interest in net income for the three months ended March 31, 2016.

Earnings Per Unit

Our net income is allocated to the general partner and limited partners in accordance with their respective partnership percentages, after giving effect to priority income allocations for incentive distributions, if any, to our general partner, pursuant to our partnership agreement. Distributions less than or greater than earnings are allocated in accordance with our partnership agreement. Payments made to our unitholders are determined in relation to actual distributions declared and are not based on the net income allocations used in the calculation of net income per unit.

In addition to the common and subordinated units, we also have identified the general partner interest and ~~incentive distribution rights~~IDRs as participating securities and we use the two-class method when calculating the net income per unit applicable to limited partners, which is based on the weighted-average number of common units outstanding during the period. Basic and diluted net income per unit applicable to limited partners are the same because we do not have any potentially dilutive units outstanding. ~~The~~In 2015, the Partnership early adopted ASU 2015-06, "Earnings Per Share (Topic 260): Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions (a consensus of the Emerging Issues Task Force)." Therefore, the Granite City Dropdown does not impact historical earnings per unit as the earnings of Granite City prior to the Granite City Dropdown were allocated entirely to our general partner.

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The calculation of earnings per unit is as follows:


	Three Months Ended March 31,						Three Months Ended March 31,
	2015			2014⁽¹⁾			2016			2015
	(Dollars and units in millions, except per unit amounts)
Net income attributable to SunCoke Energy L.P./Predecessor	$	13.2		$	15.8
Less: Allocation of Granite City's net income to the general partner prior to the Granite City Dropdown	0.6			2.6
Net income attributable to partners	12.6			13.2
General partner's distributions (including incentive distribution rights)	1.4			0.4
							(Dollars and units in millions, except per unit amounts)
Net income attributable to SunCoke Energy L.P./Previous Owner							$	39.8		$	13.2
Less: Expenses allocated to Common - SunCoke							(7.0		)	—
Less: Allocation of net income attributable to the Previous Owner to the general partner							—			0.6
Net income attributable to all partners							46.8			12.6
General partner's distributions (including, $1.4 and $0.9 million of incentive distribution rights, respectively)							2.0			1.4
Limited partners' distributions on common units	13.4			7.9			27.5			13.4
Limited partners' distributions on subordinated units	9.0			7.9			—			9.0
Distributions (greater than) less than earnings	(11.2		)	(3.0		)
Distributions less than (greater than) earnings							17.3			(11.2		)
General partner's earnings:
Distributions (including incentive distribution rights)	1.4			0.4
Allocation of distributions (greater than) less than earnings	(0.2		)	—
Granite City's net income prior to the Granite City Dropdown	0.6			2.6
Distributions (including $1.4 and $0.9 million of cash incentive distribution rights, respectively)							2.0			1.4
Allocation of distributions less than (greater than) earnings							8.1			(0.2		)
Net income attributable to Previous Owner							—			0.6
Total general partner's earnings	1.8			3.0			10.1			1.8
Limited partners' earnings on common units:
Distributions	13.4			7.9			27.5			13.4
Allocation of distributions (greater than) less than earnings	(6.6		)	(1.5		)
Expenses allocated to Common - SunCoke							(7.0		)	—
Allocation of distributions less than (greater than) earnings							9.2			(6.6		)
Total limited partners' earnings on common units	6.8			6.4			29.7			6.8
Limited partners' earnings on subordinated units:
Distributions	9.0			7.9			—			9.0
Allocation of distributions (greater than) less than earnings	(4.4		)	(1.5		)
Allocation of distributions greater than earnings							—			(4.4		)
Total limited partners' earnings on subordinated units	4.6			6.4			—			4.6
Weighted average limited partner units outstanding:
Common - basic and diluted	23.3			15.7			46.2			23.3
Subordinated - basic and diluted	15.7			15.7			—			15.7
Net income per limited partner unit:
Common - basic and diluted	$	0.29		$	0.41		$	0.64		$	0.29
Subordinated - basic and diluted	$	0.29		$	0.41		$	—		$	0.29


~~(1)~~	Includes cash distribution to unitholders of record as of March 31, 2014. The total cash distribution paid on May 30, 2014 was $19.2 million, which included an additional $3.0 million related to units issued to fund the Haverhill and Middletown Dropdown during May 2014, prior to the payment of the cash distribution.

Unit Activity

Unit activity for the three months ended March 31, ~~2015:~~2016:

Common - Public Common - SunCoke Total Common Subordinated - SunCoke
At December 31, 2014 16,789,164
4,904,752
21,693,916
15,709,697
Units issued in conjunction with the Granite City Dropdown —
1,877,697
1,877,697
—
Units issued to directors 937
—
937
—
At March 31, 2015 16,790,101
6,782,449
23,572,550
15,709,697



	Common - Public	Common - SunCoke	Total Common	Subordinated - SunCoke
At December 31, 2015	20,787,744	9,705,999	30,493,743	15,709,697
Units issued to directors	2,728	—	2,728	—
Conversion of subordinate units to common units	—	15,709,697	15,709,697	(15,709,697	)
At March 31, 2016	20,790,472	25,415,696	46,206,168	—

~~Allocation of Net Income~~

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4. Inventories

The components of inventories were as follows:



	March 31, 2016		December 31, 2015

	(Dollars in millions)
Coal	$	40.4	$	42.5
Coke	3.8		5.6
Materials, supplies, and other	29.1		29.0
Total inventories	$	73.3	$	77.1

5. Goodwill and Other Intangible Assets

Goodwill allocated to the Partnership's reportable segments as of March 31, 2016 and changes in the carrying amount of goodwill during the three months ended March 31, 2016 were as follows:



	Coal Logistics

	(Dollars in millions)
Net balance at December 31, 2015	$	67.7
Adjustments⁽¹⁾	(0.6		)
Net balance at March 31, 2016	$	67.1


(1)	In the first quarter of 2016, a working capital adjustment to the acquisition date fair value of the acquired net assets decreased the amount of the purchase price allocated to goodwill by $0.6 million.

Goodwill, which represents the excess of the purchase price over the fair value of net assets acquired, is tested for impairment as of October 1 of each year, or when events occur or circumstances change that would, more likely than not, reduce the fair value of a reporting unit to below its carrying value. There were no events or circumstances in the first quarter of 2016 that would, more likely than not, reduce the fair value of a reporting unit to below its carrying value.

The components of gross and net intangible assets were as follows:



		March 31, 2016						December 31, 2015
	Weighted - Average Remaining Amortization Years	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
		(Dollars in millions)
Customer contracts	6	$	24.0	$	2.0	$	22.0	$	24.0	$	1.2	$	22.8
Customer relationships	14	28.7		2.3		26.4		28.7		1.8		26.9
Permits	26	139.0		3.2		135.8		139.0		1.9		137.1
Trade name	3	1.2		0.6		0.6		1.2		0.6		0.6
Total		$	192.9	$	8.1	$	184.8	$	192.9	$	5.5	$	187.4

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~~shall be allocated among~~Total amortization expense for intangible assets subject to amortization was $2.6 million and $0.2 million for the partners in accordance with their respective percentage interest. Normal allocations according to percentage interests are made after giving effect, if any, to priority income allocations in an amount equal to incentive cash distributions allocated ~~100 percent~~ tothree months ended March 31, 2016 and 2015, respectively. Based on the ~~general partner. Net income from Granite City’s operations prior to~~carrying value of the ~~Granite City Dropdown is allocated to~~finite-lived intangible assets as of March 31, 2016, we estimate amortization expense for each of the ~~general partner.~~

~~The calculation of net income allocated to the general and limited partners was~~next five years as follows:

Three Months Ended March 31,
2015 2014
(Dollars in millions)
Net income attributable to SunCoke Energy L.P./Predecessor $ 13.2
$ 15.8
Less: Allocation of Granite City's net income to the general partner prior to the Granite City Dropdown 0.6
2.6
Net income attributable to partners 12.6
13.2
General partner's incentive distribution rights 0.9
0.1

11.7
13.1
General partner's ownership interest 2.0 % 2.0 %
General partner's allocated interest in net income 0.3
0.3
General partner's incentive distribution rights 0.9
0.1
Granite City's net income prior to the Granite City Dropdown
0.6
2.6
Total general partner's interest in net income $ 1.8
$ 3.0
Common - public unitholder's interest in net income $ 4.9
$ 5.5
Common - SunCoke interest in net income 1.9
0.9
Subordinated - SunCoke interest in net income 4.6
6.4
Total limited partners' interest in net income $ 11.4
$ 12.8



	Amount

	(Dollars in millions)
2016⁽¹⁾	$	7.9
2017	10.5
2018	10.5
2019	10.3
2020	10.3
2021-Thereafter	135.3
Total	$	184.8

(1) Excludes amortization expense recorded during the three months ended March 31, 2016.

~~5. Inventories~~

~~The components of inventories were as follows:~~

March 31, 2015 December 31, 2014
(Dollars in millions)
Coal $ 49.0
$ 60.4
Coke 8.1
2.0
Material, supplies, and other 27.0
28.0
Total inventories $ 84.1
$ 90.4

6. Income Taxes

The Partnership is a limited partnership and generally is not subject to federal ~~or state~~ income taxes. However, as part of the Granite City Dropdown in the first quarter of 2015, the Partnership acquired an interest in Gateway Cogeneration Company, LLC, which is subject to income taxes for federal and state purposes. ~~In addition, due to~~Additionally, as a result of the Granite City Dropdown, ~~earnings of~~ the Partnership ~~are~~is subject to ~~an additional~~ state income tax. Earnings from our Middletown operations are subject to a local income tax.

The Partnership recorded income tax expense of $0.6 million for the three months ended March 31, 2016 compared to an income tax benefit of $3.3 million for the three months ended March 31, ~~2015 compared to an income tax expense of $0.6 million for the three months ended March 31, 2014.~~2015. The three months ended March 31, 2015 include an income tax benefit of $4.0 million related to the tax impacts of the Granite City Dropdown. Earnings from our Granite City operations include federal and state income taxes calculated on a theoretical separate-return basis until the date of the Granite City ~~Dropdown. Additionally, the three months ended March 31, 2015 includes an equity settlement of $62.8 million of net deferred tax assets calculated~~Dropdown on a hypothetical separate-return basis related to our Granite City operations that had been previously utilized by the Predecessor, which primarily resulted in a deferred tax liability of $37.9 million at March 31, 2015 as compared to a deferred tax asset of $21.6 million as of December 31, 2014.

January 13, 2015.

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7. Debt

Total debt, including the current portion of long-term debt, consisted of the following:

March 31, 2015 December 31, 2014
(Dollars in millions)
7.375% senior notes, due 2020 (“Partnership Notes”), including original issue premium of $14.9 million and $11.5 million at March 31, 2015 and December 31, 2014, respectively.
$ 614.9
$ 411.5
Debt issuance costs (17.5 ) (12.5 )
Total long-term debt $ 597.4
$ 399.0



	March 31, 2016			December 31, 2015

	(Dollars in millions)
7.375% senior notes, due 2020 ("Partnership Notes")	$	499.7		$	552.5
Revolving credit facility, due 2019 ("Partnership Revolver")	182.0			182.0
Promissory note payable, due 2021 ("Promissory Note")	114.0			114.3
Partnership's term loan, due 2019 ("Partnership Term Loan")	50.0			50.0
Total borrowings	$	845.7		$	898.8
Original issue premium	10.2			12.1
Debt issuance cost	(13.3		)	(15.3		)
Total debt	$	842.6		$	895.6
Less: current portion of long-term debt	1.1			1.1
Total long-term debt	$	841.5		$	894.5

~~On January 13, 2015,~~In the first quarter of 2016, the Partnership continued de-levering its balance sheet and repurchased $52.8 million face value of outstanding Partnership Notes for $32.6 million in the open market. This resulted in a $20.4 million gain on extinguishment of debt, which included a write-off of $0.2 million of unamortized original issue premium, net of unamortized debt issuance costs.

During the first quarter of 2016, the Partnership issued $1.5 million of letters of credit as collateral to its surety providers in connection with workers' compensation, general liability and other financial guarantee obligations. These letters of credit lower the ~~Granite City Dropdown,~~Partnership's borrowing availability under the Partnership ~~issued an additional $200.0~~Revolver. At March 31, 2016, the Partnership Revolver had $1.5 million of Partnership Notes. Proceeds of $204.0 million included an original issue premium of $4.0 million. In addition, the Partnership received $6.8 million to fund interest from August 1, 2014 to January 13, 2014, the interest period prior to issuance. This interest was paid to noteholders on February 1, 2015. The Partnership incurred debt issuance costs of $5.2 million, of which $1.0 million was considered a modification of debt and was recorded in interest expense, net on the Combined and Consolidated Statements of Income and was included in other operating cash flows on the Combined and Consolidated Statements of Cash Flow.

In connection with the Granite City Dropdown, the Partnership assumed from SunCoke and repaid $135.0 million principal amount of SunCoke’s outstanding 7.625 percent senior notes and paid interest of $5.6 million. The Partnership also paid a redemption premium of $7.7 million, which was included in interest expense, net on the Combined and Consolidated Statements of Income. The Partnership assumed $2.2 million in debt issuance costs in connection with the assumption of this debt from SunCoke, $0.7 million of which related to the portion of the debt extinguished and was recorded in interest expense, net on the Combined and Consolidated Statements of Income.

~~As of March 31, 2015, the Partnership had no~~ letters of credit outstanding and an outstanding balance of $182.0 million, leaving ~~$250.0~~$66.5 million ~~available~~available.

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The Partnership repaid $0.3 million of the Promissory Note on March 31, 2016, in accordance with the ~~Partnership's revolving credit facility ("Partnership Revolver").~~ Promissory Note repayment schedule.

Covenants

The Partnership is subject to certain debt covenants that, among other things, limit the Partnership’s ability and the ability of certain of the Partnership’s subsidiaries to (i) incur indebtedness, (ii) pay dividends or make other distributions, (iii) prepay, redeem or repurchase certain debt, (iv) make loans and investments, (v) sell assets, (vi) incur liens, (vii) enter into transactions with affiliates and (viii) consolidate or merge. These covenants are subject to a number of exceptions and qualifications set forth in the respective agreements governing the Partnership's debt. ~~Additionally, under~~

Under the terms of the Partnership Revolver, ~~at March 31, 2015,~~ the Partnership ~~was~~is subject to a maximum consolidated leverage ratio of ~~4.00:~~4.50:1.00 (and, if applicable, 5.00:1.00 during the remainder of any fiscal quarter and the two immediately succeeding fiscal quarters following our acquisition of additional assets having a fair market value greater than $50 million), calculated by dividing total debt by EBITDA as defined by the Partnership Revolver, and a minimum consolidated interest coverage ratio of 2.50:1.00, calculated by dividing EBITDA by interest expense as defined by the Partnership Revolver.

Under the terms of the promissory agreement, Raven Energy LLC, a wholly-owned subsidiary of the Partnership, is subject to a maximum leverage ratio of 5.00:1.00 for any fiscal quarter ending prior to August 12, 2018, calculated by dividing total debt by EBITDA as defined by the promissory agreement. For any fiscal quarter ending on or after August 12, 2018, the maximum leverage ratio is 4.50:1.00. Additionally in order to make restricted payments, Raven Energy LLC is subject to a fixed charge ratio of greater than 1.00:1.00, calculated by dividing EBITDA by fixed charges as defined by the promissory agreement.

If we fail to perform our obligations under these and other covenants, the lenders' credit commitment could be terminated and any outstanding borrowings, together with accrued interest, under the Partnership Revolver could be declared immediately due and payable. The Partnership has a cross-default provision that applies to our indebtedness having a principal amount in excess of $20 million.

As of March 31, ~~2015,~~2016, the Partnership was in compliance with all applicable debt covenants contained in the Partnership ~~Revolver.~~Revolver and promissory agreement. We do not anticipate violation of these covenants nor do we anticipate that any of these covenants will restrict our operations or our ability to obtain additional financing.

~~On April 21, 2015, the Partnership amended its revolving credit facility to increase the maximum consolidated leverage ratio from 4.00:1.00 to 4.50:1.00.~~

8. Supplemental Cash Flow Information

Significant non-cash activities were as follows:

Three Months Ended March 31,
2015 2014
(Dollars in millions)
Debt assumed by SunCoke Energy Partners, L.P. $ 135.0
$ —
Net assets of the Predecessor not assumed by SunCoke Energy Partners, L.P.
Accounts Receivable 9.1
—
Property, plant and equipment 7.0
—
Net deferred tax assets 62.8
—



	Three Months Ended March 31,
	2016		2015

	(Dollars in millions)
Debt assumed by SunCoke Energy Partners, L.P.	$	—	$	135.0
Net assets of the Previous Owner not assumed by SunCoke Energy Partners, L.P.
Receivables	—		9.1
Property, plants and equipment	—		7.0
Deferred taxes, net	—		62.8

9. Commitments and Contingent Liabilities

~~Table of Contents~~

The United States Environmental Protection Agency (the "EPA") has issued Notices of Violations (“NOVs”) for the Haverhill and Granite City cokemaking facilities which stem from alleged violations of air operating permits for these facilities. We are working in a cooperative manner with the EPA, the Ohio Environmental Protection Agency and the Illinois Environmental Protection Agency to address the allegations, and have entered into a consent degree in federal district court with these parties. The consent decree includes a $2.2 million civil penalty payment that was paid by SunCoke in December 2014, as well as capital projects already underway to improve the reliability of the energy recovery systems and enhance environmental performance at the Haverhill and Granite City cokemaking facilities.

We retained an aggregate of $119 million in proceeds from the Partnership offering, the dropdown of Haverhill and Middletown ~~Dropdown~~ and the Granite City Dropdown to fund these environmental remediation projects at the Haverhill and Granite City cokemaking ~~operations.~~facilities. Pursuant to the omnibus agreement, any amounts that we spend on these projects in excess of the $119

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million will be reimbursed by SunCoke. Prior to our formation, SunCoke ~~previously~~ spent $7 million related to these projects. We have spent approximately ~~$71~~$83 million to date and the remaining capital is expected to be spent through the first quarter of ~~2017.~~2019.

The Partnership is a party to certain other pending and threatened claims, including matters related to commercial and tax disputes, product liability, employment claims, personal injury claims, premises-liability claims, allegations of exposures to toxic substances and general environmental claims. Although the ultimate outcome of these claims cannot be ascertained at this time, it is reasonably possible that some portion of these claims could be resolved unfavorably to the Partnership. Management of the Partnership believes that any liability which may arise from claims would not behave a material ~~in relation to the~~adverse impact on our consolidated financial ~~position, results of operations or cash flows of the Partnership at March 31, 2015.~~statements.

10. Fair Value Measurements

The Partnership measures certain financial and non-financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. Fair value disclosures are reflected in a three-level hierarchy, maximizing the use of observable inputs and minimizing the use of unobservable inputs.

The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows:

Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market.

Level 2—inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability.

Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Certain assets and liabilities are measured at fair value on a recurring basis. The Partnership’s cash equivalents are measured at fair value based on quoted prices in active markets for identical assets. These inputs are classified as Level 1 within the valuation hierarchy. The Partnership had no cash equivalents at March 31, 2016.

Convent Marine Terminal Contingent Consideration

In connection with the CMT acquisition, the Partnership entered into a contingent consideration arrangement that requires us to make future payments to The Cline Group based on future volume over a specified threshold, price, and contract renewals. During the first quarter of 2016, the Partnership amended the contingent consideration terms with The Cline Group, which reduced the fair value of the contingent consideration liability to $4.2 million at March 31, 2016. The contingent consideration liability is included in other deferred credits and liabilities on the Consolidated Balance Sheet.

The fair value of the contingent consideration was estimated based on a probability-weighted analysis using significant inputs that are not observable in the market, or Level 3 inputs. Key assumptions included probability adjusted levels of coal handling services provided by CMT, anticipated price per ton on future sales, and probability of contract renewal including length of future contracts, volume commitment, and anticipated price per ton.

Non-Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the assets and liabilities are not measured at fair value on an ongoing basis, but are subject to fair value adjustments in certain circumstances (e.g., when there is evidence of impairment). At ~~March 31, 2015, no material fair value adjustments or fair value measurements were required for these non-financial assets or liabilities.~~

Certain Financial Assets and Liabilities not Measured at Fair Value

At March 31, ~~2015~~2016, the estimated fair value of the Partnership's ~~long-term~~total debt was ~~$615.6~~$695.8 million compared to a carrying amount of ~~$614.9~~$845.7 million. The fair value was estimated by management based upon estimates of debt pricing provided by financial institutions which are considered Level 2 inputs.

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11. Business Segment Disclosures

The Partnership derives its revenues from the Domestic Coke and Coal Logistics reportable segments. Domestic Coke operations are comprised of the Haverhill and Middletown cokemaking facilities located in Ohio and the Granite City cokemaking facility located in Illinois. These facilities use similar production processes to produce coke and to recover waste heat that is converted to steam or electricity. Steam is sold to third-party customers primarily pursuant to steam supply and purchase agreements. Electricity is sold into the regional power market or to AK Steel pursuant to energy sales agreements. Coke sales at the Partnership's cokemaking facilities are made pursuant to long-term, take-or-pay agreements with ArcelorMittal, AK Steel and U.S. Steel. Each of the coke sales agreements contain pass-through provisions for costs incurred in the cokemaking process, including coal procurement costs (subject to meeting contractual coal-to-coke yields), operating and maintenance expenses, costs related to the transportation of coke to the customers, taxes (other than income taxes) and costs associated with changes in regulation, in addition to containing a fixed fee.

~~Table of Contents~~

Coal Logistics operations are comprised of ~~SunCoke~~CMT located in Louisiana, Lake Terminal ~~LLC ("Lake Terminal")~~ located in Indiana and ~~Kanawha River Terminals ("KRT")~~KRT located in Kentucky and West Virginia. This business provides coal handling ~~and blending~~and/or mixing services to ~~third party~~third-party customers as well as SunCoke cokemaking facilities and has a collective capacity to ~~blend~~mix and transload more than 3040 million tons of coal annually. Coal handling and ~~blending~~mixing results are presented in the Coal Logistics segment.

Corporate and other expenses that can be identified with a segment have been included in determining segment results. The remainder is included in Corporate and Other. Interest expense, net isand (gain) loss on extinguishment of debt are also excluded from segment results. Segment assets ~~net of tax~~ are those assets that are utilized within a specific ~~segment and excludes deferred taxes.~~segment.

The following table includes Adjusted EBITDA, which is the measure of segment profit or loss reported to the chief operating decision maker for purposes of allocating resources to the segments and assessing their performance:


							Three Months Ended March 31,
	Three Months Ended March 31,						2016			2015
	2015			2014
	(Dollars in millions)						(Dollars in millions)
Sales and other operating revenue:
Domestic Coke	$	193.0		$	203.0		$	178.9		$	193.0
Coal Logistics	10.3			11.5			15.6			10.3
Coal Logistics intersegment sales	1.7			1.4			1.5			1.7
Elimination of intersegment Sales	(1.7		)	(1.4		)
Elimination of intersegment sales							(1.5		)	(1.7		)
Total sales and other operating revenue	$	203.3		$	214.5		$	194.5		$	203.3
Adjusted EBITDA:
Domestic Coke	$	48.5		$	41.0		$	46.3		$	48.5
Coal Logistics	2.6			2.1			15.1			2.6
Corporate and Other	(2.8		)	(1.4		)	(4.0		)	(2.8		)
Total Adjusted EBITDA	$	48.3		$	41.7		$	57.4		$	48.3
Depreciation and amortization expense:
Domestic Coke	$	12.8		$	11.2		$	13.3		$	12.8
Coal Logistics	1.8			1.8			5.4			1.8
Total depreciation and amortization expense	$	14.6		$	13.0		$	18.7		$	14.6
Capital expenditures:
Domestic Coke	$	5.3		$	15.8		$	5.9		$	5.3
Coal Logistics	0.2			0.3			2.1			0.2
Total capital expenditures	$	5.5		$	16.1		$	8.0		$	5.5

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The following table sets forth the Partnership’s total sales and other operating revenue by product or service, excluding intersegment revenues:


	Three Months Ended March 31,				Three Months Ended March 31,
	2015		2014		2016		2015
	(Dollars in millions)
					(Dollars in millions)
Sales and other operating revenue:
Cokemaking revenues	$	176.5	$	185.2	$	163.4	$	176.5
Energy revenues	16.5		17.8		14.7		16.5
Coal logistics revenues	10.0		10.9		15.3		10.0
Other revenues	0.3		0.6		1.1		0.3
Total revenues	$	203.3	$	214.5	$	194.5	$	203.3

The following table sets forth the ~~Company's~~Partnership's segment assets:

The Partnership evaluates the performance of its segments based on segment Adjusted EBITDA, which represents earnings before interest, (gain) loss on extinguishment of debt, taxes, depreciation and ~~amortization. Prior~~amortization, adjusted for Coal Logistics deferred revenue and changes to ~~the expiration of~~ our ~~nonconventional fuel tax credits in 2013, Adjusted EBITDA included an add-back of sales discounts~~contingent consideration liability related to our acquisition of the ~~sharing of these credits with our customers. Any adjustments to these amounts subsequent to 2013 have been~~CMT. Coal Logistics deferred revenue adjusts for coal and liquid tons the Partnership did not handle, but are included in Adjusted ~~EBITDA.~~EBITDA as the associated take-or-pay fees are billed to the customer. Deferred revenue on take-or-pay contracts is recognized into GAAP income annually based on the terms of the contract. Adjusted EBITDA does not represent and should not be considered an alternative to net income or operating income under GAAP and may not be comparable to other similarly titled measures in other businesses.

Management believes Adjusted EBITDA is an important measure of the operating performance and liquidity of the Partnership's net assets and its ability to incur and service debt, fund capital expenditures and make distributions. Adjusted EBITDA provides useful information to investors because it highlights trends in our business that may not otherwise be apparent when relying solely on GAAP measures and because it eliminates items that have less bearing on our operating ~~performance.~~performance and liquidity. EBITDA and Adjusted EBITDA ~~is a measure of operating performance that is~~are not ~~defined by~~measures calculated in accordance with GAAP, ~~does not represent~~ and they should not be considered ~~a substitute for~~an alternative to net income, ~~as determined~~operating cash flow or any other measure of financial performance presented in accordance with GAAP. ~~Calculations of Adjusted EBITDA may not be comparable to those reported by other companies.~~

Set forth below is additional ~~detail as to how we use Adjusted EBITDA as a measure of operating performance, as well as a~~ discussion of the limitations of Adjusted EBITDA as an analytical tool.

~~Operating Performance.~~ Our management uses Adjusted EBITDA in a number of ways to assess our combined financial and operating performance, and we believe this measure is helpful to management in identifying trends in our performance. Adjusted EBITDA helps management identify controllable expenses and make decisions designed to help us meet our current financial goals and optimize our financial performance while neutralizing the impact of capital structure on financial results. Accordingly, we believe this metric measures our financial performance based on operational factors that management can impact in the short-term, namely our cost structure and expenses.

Limitations.Other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. Adjusted EBITDA also has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP. Some of these limitations include that Adjusted EBITDA:

does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

does not reflect items such as depreciation and amortization;

does not reflect changes in, or cash ~~requirement~~requirements for, working capital needs;

does not reflect our interest expense, or the cash requirements necessary to service interest on or principal payments of our debt;

does not reflect certain other non-cash income and expenses;

excludes income taxes that may represent a reduction in available cash; and

includes net income attributable to noncontrolling interests.

Below is a reconciliation of Adjusted EBITDA (unaudited) to net income and net cash provided by operating activities, which isare its most directly comparable financial ~~measure~~measures calculated and presented in accordance with GAAP:

Add: Adjusted EBITDA attributable to Predecessor⁽¹⁾

Add: Adjusted EBITDA attributable to Previous Owner⁽¹⁾

Add: Adjusted EBITDA attributable to noncontrolling interest⁽²⁾

Sales discounts provided to customers due to sharing of nonconventional fuel tax credits⁽³⁾

Coal Logistics deferred revenue⁽³⁾

Reduction in contingent consideration⁽⁴⁾

Reflects net income attributable to our Granite City ~~Adjusted EBITDA~~facility prior to the Granite City Dropdown on January 13, 2015 ~~dropdown transaction.~~adjusted for Granite City's share of interest, taxes, depreciation and amortization during the same period.

Reflects net income attributable to noncontrolling interest adjusted for noncontrolling ~~interest~~interest's share of interest, taxes, income, and ~~depreciation.~~depreciation and amortization.

Coal Logistics deferred revenue adjusts for coal and liquid tons the Partnership did not handle, but are ~~related~~included in Adjusted EBITDA as the associated take-or-pay fees are billed to ~~nonconventional fuel tax credits,~~the customer. Deferred revenue on take-or-pay contracts is recognized into GAAP income annually based on the terms of the contract.



Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains certain forward-looking statements of expected future developments, as defined in the Private Securities Litigation Reform Act of 1995. This discussion contains forward-looking statements about our business, operations and industry that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations and intentions. Our future results and financial condition may differ materially from those we currently anticipate as a result of the factors we describe under “Cautionary Statement Concerning Forward-Looking Statements.”

This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based on financial data derived from the financial statements prepared in accordance with United States ("U.S.") generally accepted accounting principles (“GAAP”) and certain other financial data that is prepared using non-GAAP measures. For a reconciliation of these non-GAAP measures to the most comparable GAAP components, see “Non-GAAP Financial Measures” at the end of this Item.

~~The combined~~These statements reflect significant assumptions and ~~consolidated financial statements pertain~~allocations and include all expenses allocable to ~~the operations~~our business, but may not be indicative of ~~the Partnership and the operations of Gateway Energy and Coke Company, LLC ("Granite City"),~~those that would have been achieved had we operated as ~~Granite City and the Partnership were under common control~~a separate public entity for all periods ~~presented. The transfers~~presented or of ~~net assets between entities under common control were accounted for as if the transfer occurred at the beginning of the period, and prior years were recast to furnish comparative information.~~future results.

SunCoke Energy Partners, L.P., (the "Partnership", "we", "our", and "us"), is a Delaware limited partnership formed in July 2012, which primarily ~~manufactures~~produces coke used in the blast furnace production of steel. At March 31, ~~2015,~~2016, we ~~own~~owned a 98 percent interest in Haverhill Coke Company LLC ("Haverhill") ~~and~~, Middletown Coke Company, LLC ("Middletown") ~~as well as a 75 percent in~~and Gateway Energy and Coke Company, LLC ("Granite City"). The remaining 2 percent ownership interest in our three cokemaking facilities iswas owned by SunCoke Energy, Inc. ("SunCoke"). At March 31, ~~2015,~~2016, SunCoke, through a subsidiary, owned a ~~56.1~~53.9 percent partnership interest in us and all of our incentive distribution rights ("IDR") and indirectly owned and controlled our general partner, which holds a 2.0 percent general partner interest in us. ~~Our~~We also own a Coal Logistics business, which provides coal handling ~~and blending~~and/or mixing services to ~~third party~~third-party customers as well as to our own cokemaking facilities. Our Coal Logistics business consists of Convent Marine Terminal ("CMT"), Kanawha River Terminals LLC ("KRT") and SunCoke Lake Terminal, LLC ("Lake Terminal").

Our cokemaking ovens utilize efficient, modern heat recovery technology designed to combust the coal’s volatile components liberated during the cokemaking process and use the resulting heat to create steam or electricity for sale. This differs from by-product cokemaking, which re-purposes the coal’s liberated volatile components for other uses. We have constructed the only greenfield cokemaking facilities in the U.S. in the last 25 years and are the only North American coke producer that utilizes heat recovery technology in the cokemaking process. We believe that heat recovery technology has several advantages over the alternative by-product cokemaking process, including producing higher quality coke, using waste heat to generate steam or electricity for sale and reducing the environmental impact.

All of our coke sales are made pursuant to long-term, take-or-pay agreements. These coke sales agreements have an average remaining term of approximately ~~ten~~nine years and contain pass-through provisions for costs we incur in the cokemaking process, ~~including:~~including coal procurement costs (subject to meeting contractual coal-to-coke yields), operating and maintenance expenses, costs related to the transportation of coke to our customers, taxes (other than income taxes) and costs associated with changes in regulation. The coke sales agreement and energy sales agreement with AK Steel at our Haverhill facility are subject to early termination by AK Steel under limited circumstances and provided that AK Steel has given at least two years prior notice of its intention to terminate the agreements and certain other conditions are met. ~~In addition, AK Steel is required to pay a significant termination payment to us if it exercises its termination right prior to 2018.~~ No other coke sales contract has an early termination clause. For a five-year period following our initial public offering on January 24, 2013 ("IPO"), SunCoke has agreed to make us whole or purchase all of our coke production not taken by our customers in the event of a customer's default or exercise of certain termination rights, under the same terms as those provided for in the coke sales agreements with our customers.

Our core business model is predicated on providing steelmakers an alternative to investing capital in their own captive coke production facilities. We direct our marketing efforts principally towards steelmaking customers that require coke for use in their blast furnaces. Our steelmaking customers are currently operating in an environment that is challenged by global overcapacity and lower demand. The combination of a strong U.S. dollar, continued high import activity and reduced drilling activity caused by low oil and gas prices has served to depress both spot and contract prices for steel, which has driven market deterioration for flat rolled and tubular steel. Several steel producers, including certain of our customers, have filed petitions with the Department of Commerce ("DOC") and the International Trade Commission ("ITC") alleging that unfairly traded imports are causing material injury to the domestic steel industry in the U.S. and that foreign steel producers benefit from significant subsidies provided by the governments of their respective countries. While steel pricing has rebounded in early 2016, aided by favorable preliminary rulings from the DOC and ITC as well as improved global supply and demand dynamics,

our customers have kept certain facilities idled as they await further signs of market stability. Despite these challenges, our customers continue to comply with the terms of their long-term, take-or-pay contracts with us.

Our Granite City facility and the first phase of our Haverhill facility, or Haverhill 1, have steam generation facilities, which use hot flue gas from the cokemaking process to produce steam for sale to customers pursuant to steam supply and purchase agreements. Granite City sells steam to U.S. Steel and Haverhill 1 provides steam to Altivia Petrochemicals, LLC ("Altivia"). Our Middletown facility and the second phase of our Haverhill facility, or Haverhill 2, have cogeneration plants that use the hot flue gas created by the cokemaking process to generate electricity, which is either sold into the regional power market or to AK Steel pursuant to energy sales agreements.

The following table sets forth information about our cokemaking facilities and our coke, steam and energy sales agreements:



Facility	Location	Coke Customer	Year of Start Up	Contract Expiration	Number of Coke Ovens	Annual Cokemaking Capacity (thousands of tons)	Use of Waste Heat
Granite City	Granite City, Illinois	U.S. Steel	2009	2025	120	650	Steam for power generation
Haverhill 1	Franklin Furnace, Ohio	ArcelorMittal	2005	2020	100	550	Process steam
Haverhill 2	Franklin Furnace, Ohio	AK Steel	2008	2022	100	550	Power generation
Middletown⁽¹⁾	Middletown, Ohio	AK Steel	2011	2032	100	550	Power generation
Total					420	2,300

We also provide coal handling ~~and blending~~and/or mixing services with our Coal Logistics ~~business.~~business, which has collective capacity to mix and/or transload more than 40 million tons of coal annually and store up to 3 million tons. CMT is one of the largest export terminals on the U.S. gulf coast and has direct rail access and the capability to transload 10 million tons of coal annually through its operations in Convent, Louisiana. Our terminal located in East Chicago, Indiana, ~~SunCoke~~ Lake Terminal, ~~LLC ("Lake Terminal")~~ provides coal handling and ~~blending~~mixing services to SunCoke's Indiana Harbor cokemaking operations. ~~Kanawha River Terminals ("KRT")~~KRT is a leading metallurgical and thermal coal ~~blending~~mixing and handling terminal service provider with collective capacity to ~~blend~~mix and transload 30 million tons of coal annually through its operations in West Virginia and Kentucky. Coal is transported from the mine site in numerous ways, including rail, truck, barge or ship. Our coal terminals act as intermediaries between coal producers and coal end users by providing transloading, storage and ~~blending~~mixing services. We do not take possession of coal in our Coal Logistics business, but instead earn revenue by providing coal handling ~~and blending~~and/or mixing services to our customers on a fee per ton basis. We provide ~~blending~~mixing and handling services to steel, coke (including some of our domestic cokemaking facilities), electric utility and coal producing customers.

Our Coal Logistics coal mining customers are currently faced with a market depressed by oversupply and declining coal prices. Our CMT customers are also impacted by seaborne export market dynamics. Fluctuations in the benchmark price for coal delivery into northwest Europe, as referenced in the API2 index price, influence our customers' decisions to place tons into the export market and thus impact transloading volumes through our terminal facility. Despite the current challenging coal mining and coal export markets, our customers have continued to perform on their contracts with us.

Organized in Delaware in July 2012, and headquartered in Lisle, Illinois, we are a master limited partnership whose common units, representing limited partnership interests, were first listed for trading on the New York Stock Exchange (“NYSE”) in January 2013 under the symbol “SXCP.”

~~Granite City Dropdown.~~

On January 13, 2015, the Partnership acquired a 75 percent interest in SunCoke's Granite City cokemaking facility for a total transaction value of $245.0 million (the "Granite City Dropdown"). The remaining 25 percent interest continues to be owned by SunCoke. The Granite City Dropdown is reflected in the combined and consolidated financial statements of the Partnership as if the transfer occurred at the beginning of the period and prior periods have been revised to include the Granite City financial position, results of operations and cash flows as the Granite City Dropdown was accounted for as a common control transaction. In connection with the Granite City Dropdown, the Partnership assumed and repaid $135.0 million principal amount of SunCoke's outstanding 7.625 percent senior notes and issued an additional $200.0 million of Partnership Notes. See Note 2 and Note 7 to our combined and consolidated financial statements for additional information on the Granite City Dropdown and related debt activities.

•~~Idling of U.S.~~AK Steel ~~Granite City Works operations.~~Make-Whole

~~During the first quarter of 2015, U.S. Steel announced plans to temporarily idle its Granite City Works operations subject to customer demand.~~ Our ~~Granite City~~Haverhill 2 cokemaking facility supplies coke to ~~U.S. Steel’s Granite City Works~~AK Steel under a long-term, take-or-pay contract until ~~2025 and~~2022. During the ~~temporary idling does~~first quarter of 2016, AK Steel elected to reduce 2016 production by 75,000 tons at our Haverhill 2 facility. As a result, during the first quarter of 2016, Domestic Coke sales tons were approximately 10,000 tons lower than our previous volume targets. Based on our long-term, take-or-pay contract, AK Steel will provide us with make-whole payments. We do not expect this arrangement to impact any obligations that U.S. Steel has under this contract. Additionally, we are supported by our omnibus agreement with SunCoke, our general partner, that provides certain commercial protections through January of 2018. See Note 3 to our combined and consolidated financial statements.

Adjusted EBITDA targets.

First Quarter Key Financial Results

Items Impacting Comparability

In connection with the dropdown of Granite City during the first quarter of 2015, the Partnership assumed and repaid $135.0 million of SunCoke's outstanding notes. As a result of the redemption, a loss on extinguishment of debt was recorded in the prior year of $9.4 million, which included a $7.7 million redemption premium and a $1.4 million write-off of unamortized debt issuance costs.

Results of Operations

The following table sets forth amounts from the Combined and Consolidated Statements of Income for the three months ended March 31, ~~2015~~2016 and ~~2014~~2015:

Revenues. Total revenues were ~~$203.3~~$194.5 million and ~~$214.5~~$203.3 million for the three months ended March 31, 2016 and 2015, ~~and 2014,~~ respectively. ~~The decrease was~~These decreases were primarily due to the pass-through of lower coal prices in our Domestic Coke ~~segment.~~segment as well as the absence of energy sales to Haverhill Chemicals as previously discussed in "Items Impacting Comparability." These decreases were partially offset by additional revenues of $7.7 million generated by our CMT business.

Costs and Operating Expenses. Total operating expenses were ~~$169.6~~$161.3 million and ~~$185.3~~$169.6 million for the three months ended March 31, 2016 and 2015, ~~and 2014,~~ respectively. ~~The decreases~~For the three months ended March 31, 2016, the decrease in ~~cost of products sold~~costs and operating expenses ~~were~~was primarily driven by reduced coal costs in our Domestic Coke segment, ~~as well as lower repairs~~partially offset by CMT costs and ~~maintenance expense in the current year period.~~operating expenses of $3.9 million.

Interest Expense, net. Interest expense, net was ~~$20.6~~$12.5 million and ~~$2.9~~$11.2 million for the three months ended March 31, 2016 and 2015, ~~and 2014,~~ respectively. ~~Comparability between periods~~The increase in interest expense, net from increased borrowings was ~~impacted~~$3.3 million, which was partially offset by ~~financing costs associated with~~interest expense, net savings from the ~~Granite City Dropdown and higher debt balances as previously discussed. See Note 7 to our combined and consolidated financial statements for further discussion~~repurchase of ~~these financing activities.~~more than $100 million of senior notes.

Income Taxes. Income ~~tax benefit was $3.3 million and income~~ tax expense was $0.6 million for the three months ended March 31, 2016 compared to an income tax benefit of $3.3 million for the three months ended March 31, 2015, ~~and 2014,~~ respectively. Comparability between periods was impacted by the Granite City Dropdown as previously ~~discussed.~~discussed in "Items Impacting Comparability."

Noncontrolling Interest. Income attributable to noncontrolling interest represents SunCoke's retained ownership interest in our cokemaking facilities. Income attributable to noncontrolling interest was ~~$3.2~~$0.7 million and ~~$9.9~~$3.2 million for the three months ended March 31, ~~2015~~2016 and ~~2014,~~2015, respectively. The decrease is primarily due to SunCoke's decrease in ~~noncontrolling interest was the result of the Partnership's increased~~ ownership ~~in the Haverhill and Middletown cokemaking facilities. This decrease was partially offset by the acquisition of a 75 percent~~ interest in Granite City ~~which in turn established noncontrolling interest for the~~from a 25 percent interest to a 2 percent interest in August of ~~Granite City not acquired. See Note 2 to our combined and consolidated financial statements for further discussion of this transaction.~~2015.

Net Income Attributable to ~~Predecessor.~~Previous Owner. Net income attributable to ~~Predecessor~~Previous Owner reflects Granite City net income for periods prior to the Granite City ~~Dropdown.~~Dropdown that occurred in January 2015.

Results of Reportable Business Segments

We report our business results through two segments:

Management believes Adjusted EBITDA is an important measure of operating performance and liquidity and it is used as the primary basis for the Chief Operating Decision Maker ("CODM") to evaluate the performance of each of our reportable segments. Adjusted EBITDA should not be considered a substitute for the reported results prepared in accordance with ~~U.S.~~ GAAP. See ~~“Non-GAAP~~"Non-GAAP Financial ~~Measures”~~Measures" near the end of this Item.

Segment Operating Data

The following tables set forth financial and operating data for the three months ended March 31, ~~2015~~2016 and ~~2014~~2015:

Adjusted EBITDA⁽¹⁾:

Domestic Coke Adjusted EBITDA per ton⁽²⁾

Coal Logistics Adjusted EBITDA per ton handled⁽³⁾

Tons handled, excluding CMT (thousands of tons)⁽³⁾

Tons handled by CMT (thousands of tons)⁽³⁾

Pay tons (thousands of tons)⁽⁴⁾

See definition of Adjusted EBITDA and reconciliation to GAAP at the end of this Item.

Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke sales volumes.

Reflects inbound tons handled during the period.

Coal Logistics deferred revenue adjusts for coal and liquid tons the Partnership did not handle, but are included in Adjusted EBITDA ~~divided by Coal Logistics tons handled.~~as the associated take-or-pay fees are billed to the customer. Deferred revenue on take-or-pay contracts is recognized into GAAP income annually based on the terms of the contract.

Analysis of Segment Results

Three Months Ended March 31, ~~2015~~2016 compared to Three Months Ended March 31, ~~2014~~2015

Sales and Other Operating Revenue

Sales and other operating revenue decreased ~~$10.0~~$14.1 million, or ~~4.9~~7.3 percent, to ~~$193.0~~$178.9 million for the three months ended March 31, ~~2015~~2016 compared to ~~$203.0~~$193.0 million for the corresponding period of ~~2014.~~2015. The decrease was mainly attributable to the pass-through of lower coal prices, which lowered revenues by ~~$13.2~~$14.1 million. ~~Higher overall~~Revenues further decreased by $2.0 million due to the absence of energy sales to Haverhill Chemicals as previously discussed in "Items Impacting Comparability." These decreases were partially offset by increases of $2.0 million primarily associated with higher sales volumes of 114 thousand tons ~~increased revenues by $4.4 million. The remaining decrease~~and a slightly higher reimbursement of ~~$1.2 million was primarily related to lower energy sales.~~operating and maintenance costs.

Domestic Coke Adjusted EBITDA ~~increased $7.5~~decreased $2.2 million, or ~~18.3~~4.5 percent, to ~~$48.5~~$46.3 million for the three months ended March 31, ~~2015~~2016 compared to ~~$41.0~~$48.5 million in the corresponding period of ~~2014. Overall, Adjusted EBITDA increased~~2015 primarily due to improved performance driven by better coal-to-coke yields, higher volumes and lower operating and maintenance costs, increasing Adjusted EBITDA $3.8 million, $3.0 million and $1.3 million, respectively. These improvements were partially

~~related to a favorable comparison to the prior year, which experienced more severe winter weather. Lower~~ energy sales ~~of $0.6 million in the current year slightly offset these improvements to Adjusted EBITDA.~~discussed above.

Depreciation expense, which was not included in segment profitability, was ~~$12.8~~$13.3 million for the three months ended March 31, ~~2015~~2016 compared to ~~$11.2~~$12.8 million in the prior year period. This increase was ~~partially offset by~~primarily the result of depreciation expense in the current year period on certain environmental remediation assets placed in service at our Haverhill cokemaking facility.

Sales and Other Operating Revenue

Inclusive of intersegment sales, sales and other operating revenue were ~~$12.0~~$17.1 million for the three months ended March 31, ~~2015~~2016 compared to ~~$12.9~~$12.0 million for the corresponding period of ~~2014,~~2015. This increase was primarily due to ~~a decrease~~revenue from CMT of $7.7 million in ~~coal blending and handling volume of 565 thousand tons.~~the current year period, which was partially offset by lower volumes at KRT driven by warmer weather conditions in the current year period.

Coal Logistics Adjusted EBITDA was ~~$2.6~~$15.1 million for the three months ended March 31, ~~2015~~2016 compared to ~~$2.1~~$2.6 million in the ~~corresponding period~~prior year period. The acquisition of ~~2014 as a result~~CMT provided Adjusted EBITDA of ~~higher margins caused by a shift~~$13.0 million in ~~sales mix, partly~~the current year period. This increase was partially offset by lower ~~volumes.~~volumes at KRT driven by warmer weather conditions in the current year period.

Depreciation and amortization expense, which was not included in segment profitability, was ~~$1.8~~$5.4 million ~~for both~~during the three months ended March 31, ~~2015~~2016 compared to $1.8 million during the same prior year period, primarily due to $3.5 million of depreciation and ~~2014, respectively.~~amortization expense associated with CMT.

Corporate and other expenses increased ~~$1.4~~$1.2 million to ~~$2.8~~$4.0 million for the three months ended March 31, ~~2015~~2016 compared to ~~$1.4~~$2.8 million in the same period of ~~2014. The increase was mainly attributable~~2015, primarily due to ~~$0.9 million of dropdown related transaction costs and~~ a higher allocation of costs from ~~SunCoke in the current period.~~SunCoke.

Liquidity and Capital Resources

Our primary liquidity needs are to finance the replacement of partially or fully depreciated assets and other capital expenditures, service our debt, fund investments, fund working capital, maintain cash reserves, and pay distributions. We are prudently managing liquidity in light of our customers' ongoing labor negotiations. We believe our current resources, including the potential borrowings under our revolving credit facility, are sufficient to meet our working capital requirements for our current business for the foreseeable future. Our sources of liquidity include cash generated from operations, borrowings under our revolving credit facility and, from time to time, debt and equity offerings. We may be required to access the capital markets for funding related to the maturities of our long-term borrowings beginning in 2019. In addition, we are actively seeking to retire or repurchase a portion of our outstanding debt. Such repurchases will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. As of March 31, ~~2015,~~2016, we had ~~$91.8~~$33.7 million of cash and cash equivalents and ~~$250.0~~$66.5 million of borrowing availability under the Partnership Revolver.

On April ~~20, 2015,~~18, 2016, our Board of Directors declared a quarterly cash distribution of ~~$0.5715~~$0.5940 per unit. This distribution will be paid on ~~May 29, 2015~~June 1, 2016 to unitholders of record on May ~~15, 2015. Because we intend~~16, 2016. The Board of Director's decision to ~~distribute substantially all~~hold quarterly unitholder distributions flat at $0.5940 per unit is part of our capital allocation strategy to shift excess cash ~~available~~flow towards

repurchasing the Partnership's debt. The Partnership and its Board of Directors will continue to evaluate its capital allocation and distribution priorities on a quarterly basis.

In an effort to increase the Partnership's liquidity position for ~~distribution, our growth may not be as rapid as~~continued de-levering of its balance sheet, SunCoke provided a "reimbursement holiday" during the ~~growth~~first quarter of ~~businesses that reinvest available cash~~2016 on the corporate cost allocation to ~~expand ongoing operations. Moreover, our future growth may be slower than our historical growth. We expect that we will,~~the Partnership, resulting in ~~large part, rely upon external financing sources, including bank borrowings and issuances~~a capital contribution of ~~debt and equity securities, to fund acquisitions and expansion capital expenditures. To the extent we are unable to finance growth externally, our~~$7.0 million. SunCoke also returned its IDR cash distribution ~~policy could significantly impair our ability~~of $1.4 million to ~~grow. To~~ the ~~extent we issue additional units~~Partnership ("IDR giveback") as a capital contribution.

For the second quarter of 2016, SunCoke has elected to provide the Partnership with one year deferred payment terms on the reimbursement of the corporate cost allocation and IDR cash distribution rather than a reimbursement holiday and IDR giveback. SunCoke will continue to evaluate alternatives for providing sponsor support on a quarterly basis.

In the first quarter of 2016, the Partnership continued de-levering its balance sheet and repurchased $52.8 million face value of outstanding Partnership Notes for $32.6 million in ~~connection with any acquisitions or expansion capital expenditures,~~ the payment of distributions on those additional units may increase the risk that we will be unable to maintain or increase our per unit distribution level. The incurrence of additional debt by us would result in increased interest expense, which in turn may also affect the amount of cash that we have available to distribute to our unitholders.open market.

During the first quarter of ~~2015, to fund the Granite City Dropdown,~~2016, the Partnership issued ~~an additional $200.0~~$1.5 million of letters of credit as collateral to its surety providers in connection with workers' compensation, general liability and other financial guarantee obligations. These letters of credit lower the Partnership's borrowing availability under the Partnership ~~Notes.~~Revolver.

On April 21, 2015, the Partnership amended its revolving credit facility to increase the maximum consolidated leverage ratio from 4.00:1.00 to 4.50:1.00. The amendment allows the Partnership additional financial flexibility to fund potential future inorganic growth opportunities.

The following table sets forth a summary of the net cash provided by (used in) operating, investing and financing activities for the three months ended March 31, ~~2015~~2016 and ~~2014:~~2015:

Cash Provided by Operating Activities

Net cash provided by operating activities increased by ~~$22.7~~$10.7 million to ~~$29.7~~$40.4 million for the three months ended March 31, ~~2015~~2016 as compared to ~~$7.0~~$29.7 million in the corresponding period of ~~2014.~~2015. The increase primarily reflects the contribution of CMT's net cash provided by operating activities of $7.4 million in ~~operating cash flows was primarily driven by changes in working capital including~~ the first quarter of 2016, as well as timing of ~~accounts payable and the settlement of $13.1 million of accrued sales discounts in 2014.~~payments on inventory purchases.

Cash Used in Investing Activities

~~Cash~~Net cash used in investing activities decreased ~~$10.6~~$5.5 million to ~~$5.5 million~~zero for the three months ended March 31, ~~2015~~2016 as compared to ~~$16.1~~$5.5 million in the corresponding period in ~~2014.~~2015. The decrease is primarily ~~attributable to lower environmental remediation expenditures and lower ongoing capital expenditures as compared~~due to the ~~prior year period.~~amendment of an agreement with The Cline Group, which unrestricted $6.0 million of previously restricted cash and relieved the Partnership of any obligation to repay these amounts to The Cline Group.

Cash Used in Financing Activities

Net cash ~~provided by~~used in financing activities was ~~$34.3~~$55.3 million for the three months ended March 31, ~~2015~~2016 as compared to net cash ~~used is~~provided by financing activities of ~~$18.0~~$34.3 million for the corresponding period of ~~2014.~~ 2015. In 2016, we repurchased $52.8 million face value of outstanding Partnership Notes for $32.6 million of cash in the open market. The Partnership also repaid $0.3 million of the face value Promissory Note on March 31, 2016. Additionally, we made distributions to our unitholders of $29.5 million and distributions to SunCoke of $1.3 million. The distributions were partially offset by capital contributions from SunCoke of $8.4 million from the "reimbursement holiday" and IDR giveback.

In the ~~first quarter of~~three months ended March 31, 2015, we received gross proceeds of $210.8 million from the issuance of Partnership Notes. These cash inflows were partially offset by debt issuance costs of $4.2 million, distributions to our unitholders of $22.2 million, distributions to SunCoke of $0.6 million and the repayment of debt assumed from ~~Suncoke~~SunCoke and other liabilities of $149.5 ~~million, including a redemption premium of $7.7~~ million.

In the three months ended March 31, 2014, we paid distributions of $12.3 million to SunCoke and distributions to unitholders of $15.2 million. These distributions were partially offset by net transfers from parent of $9.5 million related to SunCoke's centralized financing and cash management program for Granite City prior to the Granite City Dropdown.

Capital Requirements and Expenditures

Our cokemaking operations are capital intensive, requiring significant investment to upgrade or enhance existing operations and to meet environmental and operational regulations. The level of future capital expenditures will depend on various factors, including market conditions and customer requirements, and may differ from current or anticipated levels. Material changes in capital ~~expenditures~~expenditure levels may impact financial results, including but not limited to the amount of depreciation, interest expense and repair and maintenance expense.

Our capital requirements have consisted, and are expected to consist, primarily of:

The following table summarizes capital expenditures for the three months ended March 31, ~~2015~~2016 and ~~2014~~:2015:

Environmental remediation capital⁽¹⁾

Expansion capital - CMT⁽²⁾

In 2016, we expect lower ongoing capital spending across the entire fleet and will focus our efforts on projects that are geared toward asset care and increasing workforce safety. Additionally, we have shifted the timing of the environmental remediation project at Granite City and will begin the work in 2017.

~~Our~~In 2016, excluding capitalized interest and pre-funded capital projects at CMT, we expect our capital expenditures ~~for 2015 are expected~~ to be approximately ~~$53~~$18 million, of which includes ongoing capital expenditures ~~are expected to be~~of approximately ~~$17~~$15 million. We expect that capital expenditures will remain at this level in 2017 and 2018.

We retained $119 million in proceeds from the Partnership ~~offering, the Haverhill~~Offering, and ~~Middletown Dropdown and the Granite City Dropdown~~subsequent dropdowns to fund our environmental remediation projects to comply with the expected terms of a consent decree at the Haverhill and Granite City cokemaking operations. Pursuant to the omnibus agreement, any amounts that we spend on these projects in excess of the $119 million will be reimbursed by SunCoke. Prior to our formation, SunCoke ~~previously~~ spent approximately $7 million related to these projects. ~~We have~~The Partnership has spent approximately ~~$71~~$83 million to date and the remaining capital is expected to be spent through the first quarter of ~~2017.~~2019.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies

There have been no significant changes to our accounting policies during the three months ended March 31, ~~2015~~2016. Please refer to our Annual Report on Form 10-K dated February ~~24, 2015~~18, 2016 for a summary of these policies.

Recent Accounting Standards

See Note 1 to our consolidated financial statements.

Non-GAAP Financial Measures

In addition to the GAAP results provided in the ~~Annual~~Quarterly Report on Form ~~10-K,~~10-Q, we have provided a non-GAAP financial measure, Adjusted EBITDA. Reconciliation from GAAP to the non-GAAP measurement is presented below.

Our management, as well as certain investors, use this non-GAAP measure to analyze our current and expected future financial performance. This measure is not in accordance with, or a substitute for, GAAP and may be different from, or inconsistent with, non-GAAP financial measures used by other companies.

~~Adjusted EBITDA~~. Adjusted EBITDA represents earnings before interest, (gain) loss on extinguishment of debt, taxes, depreciation and ~~amortization. Prior~~amortization, adjusted for Coal Logistics deferred revenue and changes to ~~the expiration of~~ our ~~nonconventional fuel tax credits in 2013, Adjusted EBITDA included an add-back of sales discounts~~contingent consideration liability related to our acquisition of the ~~sharing of these credits with our customers. Any adjustments to these amounts subsequent to 2013 have been~~CMT. Coal Logistics deferred revenue adjusts for coal and liquid tons the Partnership did not handle, but are included in Adjusted ~~EBITDA.~~EBITDA as the associated take-or-pay fees are billed to the customer. Deferred revenue on take-or-pay contracts is recognized into GAAP income annually based on the terms of the contract. Adjusted EBITDA does not represent and should not be considered an alternative to net income or operating income under GAAP and may not be comparable to other similarly titled measures in other businesses.

Set forth below is additional ~~detail as to how we use Adjusted EBITDA as a measure of operating performance, as well as a~~ discussion of the limitations of Adjusted EBITDA as an analytical tool.

~~Operating Performance~~Limitations.. Our management uses Adjusted EBITDA in a number of ways to assess our combined financial and operating performance, and we believe this measure is helpful to management in identifying trends in our performance. Adjusted EBITDA helps management identify controllable expenses and make decisions designed to help us meet our current financial goals and optimize our financial performance while neutralizing the impact of capital structure on

~~Limitations~~. Other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. Adjusted EBITDA also has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP. Some of these limitations include that Adjusted EBITDA:

does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

does not reflect items such as depreciation and amortization;

does not reflect changes in, or cash requirements for, working capital needs;

does not reflect our interest expense, or the cash requirements necessary to service interest on or principal payments of our debt;

does not reflect certain other non-cash income and expenses;

excludes income taxes that may represent a reduction in available cash; and

includes net income attributable to noncontrolling interests.

~~We explain Adjusted EBITDA and reconcile this non-GAAP financial measure to our net income, which is its most directly comparable financial measure calculated and presented in accordance with GAAP.~~

Below is a reconciliation of Adjusted EBITDA (unaudited) to net income and net cash provided by operating activities, which are its ~~closest GAAP measure:~~most directly comparable financial measures calculated and presented in accordance with GAAP:

Add: Adjusted EBITDA attributable to Predecessor⁽¹⁾

Add: Adjusted EBITDA attributable to Previous Owner⁽¹⁾

Add: Adjusted EBITDA attributable to noncontrolling interest⁽²⁾

Sales discounts provided to customers due to sharing of nonconventional fuel tax credits⁽³⁾

Coal Logistics deferred revenue⁽³⁾

Reduction of contingent consideration⁽⁴⁾

Reflects net income attributable to noncontrolling interest adjusted for noncontrolling interest's share of interest, taxes, income, and depreciation and amortization.

Coal Logistics deferred revenue adjusts for coal and liquid tons the Partnership did not handle, but are included in Adjusted EBITDA as the associated take-or-pay fees are billed to the customer. Deferred revenue on take-or-pay contracts is recognized into GAAP income annually based on the terms of the contract.

Below is a reconciliation of 2016 Estimated Adjusted EBITDA to its closest GAAP measures:



	2016
	Low			High
Adjusted EBITDA attributable to SunCoke Energy Partners, L.P.	$	207		$	217
Add: Adjusted EBITDA attributable to noncontrolling interest⁽¹⁾	3			3
Adjusted EBITDA	$	210		$	220
Subtract:
Depreciation and amortization expense	74			74
Interest expense, net	57			53
(Gain) loss on extinguishment of debt	(20		)	(27		)
Income tax expense	1			1
Reduction of contingent consideration⁽²⁾	(4		)	(4		)
Net income	$	102		$	123
Add:
Depreciation and amortization expense	74			74
Gain on extinguishment of debt	(20		)	(27		)
Changes in working capital and other	(7		)	(7		)
Net cash provided by operating activities	$	149		$	163

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

We have made forward-looking statements in this Quarterly Report on Form 10-Q, including, among others, in the sections entitled ~~“Business,~~“Risk Factors,” ~~“Risk Factors”~~“Quantitative and Qualitative Disclosures about Market Risk” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Such forward-looking statements are based on management’s beliefs and assumptions and on information currently available. Forward-looking statements include the information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, potential growth opportunities, potential operating performance, 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. In particular, statements in this Quarterly Report on Form 10-Q concerning future distributions are subject to approval by our Board of Directors and will be based upon circumstances then existing.

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. We do not have any intention or obligation to update any forward-looking statement (or its associated cautionary language), whether as a result of new information or future events, after the date of this Quarterly Report on Form 10-Q, except as required by applicable law.

The risk factors discussed in “Risk Factors” could cause our results to differ materially from those expressed in these forward-looking statements. There also may be other risks that we are unable to predict at this time. Such risks and uncertainties include, without limitation:

The factors identified above are believed to be important factors, but not necessarily all of the important factors, that could cause actual results to differ materially from those expressed in any forward-looking statement made by us. Other factors not discussed herein could also have material adverse effects on us. All forward-looking statements included in this Quarterly Report on Form 10-Q are expressly qualified in their entirety by the foregoing cautionary statements.



Item 3.	Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the Partnership's exposure to market risk since December 31, ~~2014.~~2015.



Item 4.	Controls and Procedures

Management’s Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Exchange Act, the Partnership carried out an evaluation of the effectiveness of the design and operation of the Partnership's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of March 31, ~~2015.~~2016. This evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.

Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed in Partnership reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Partnership reports filed or submitted under the Exchange Act is accumulated and communicated to management, including the Partnership's Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, ~~2015~~,2016, the Partnership's disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

On August 12, 2015 we acquired Raven Energy LLC including Convent Marine Terminal and consider the transaction material to our results of operations, cash flows and financial position from the date of the acquisition. In conducting our evaluation of the effectiveness of our internal control over financial reporting, we have elected to exclude Raven from our evaluation in the year from acquisition as permitted by the Securities and Exchange Commission. Raven represents $421.1 million of total assets and $7.7 million of total revenue in the combined and consolidated financial statements of the Partnership as of and for the three months ended March 31, 2016. We are currently in the process of evaluating and integrating Raven’s internal controls over financial reporting and expect to complete the integration of Raven’s internal controls in 2016. There ~~was~~were no ~~change~~changes in our internal control over financial reporting that occurred during the quarter ended March 31, ~~2015~~,2016, that has materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting.



Item 1.	Legal Proceedings

The information presented in Note 9 ~~entitled "Commitments and Contingent Liabilities"~~ to our combined and consolidated financial statements within this Quarterly Report on Form 10-Q is incorporated herein by reference.

Many legal and administrative proceedings are pending or may be brought against us arising out of our current and past operations, including matters related to commercial and tax disputes, product liability, employment claims, personal injury claims, premises-liability claims, allegations of exposures to toxic substances and general environmental claims. Although the ultimate outcome of these proceedings cannot be ascertained at this time, it is reasonably possible that some of them could be resolved unfavorably to us. Our management believes that any liabilities that may arise from such matters would not be material in relation to our business or our combined and consolidated financial position, results of operations or cash flows at March 31, 2016.



Item 1A.	Risk Factors

There have been no material changes with respect to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2014.~~2015.



Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds

On July 20, 2015, the Partnership's Board of Directors authorized a program for the Partnership to repurchase up to $50.0 million of its common units. At March 31, 2016, there was $37.2 million available under the authorized unit repurchase program. There were no unit repurchases during the first quarter of 2016.

The following exhibits are filed as part of, or incorporated by reference into, this Form 10-Q.



Exhibit Number				Description
~~4.1~~				~~Fourth Supplemental Indenture, dated of January 16, 2015, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-35782) filed on January 20, 2015~~

~~10.1~~				Contribution Agreement, dated as of January 12, 2015, by and among Sun Coal & Coke LLC, SunCoke Energy Partners, L.P., SunCoke Energy, Inc. and, solely with respect to Section 2.9 thereof, Gateway Energy & Coke Company, LLC, incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-35782) filed on January 13, 2015

~~10.2~~				~~Amendment No. 2 to Omnibus Agreement, dated as of January 13, 2015, incorporated by reference to Exhibit 10.4.2 to the Annual Report on Form 10-K (File No. 001-35782) filed on February 24, 2015~~

~~10.3†~~				Amendment No. 3 to Coke Sale and Feed Water Processing Agreement, dated as of January 12, 2015, by and among Gateway Energy & Coke Company, LLC, Gateway Cogeneration Company LLC and U.S. Steel Corporation, incorporated by reference to Exhibit 10.9.3 to the Annual Report on Form 10-K (File No. 001-35782) filed on February 24, 2015

31.1*				Chief Executive Officer Certification Pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*				Chief Financial Officer Certification Pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*				Chief Executive Officer Certification Pursuant to Exchange Act Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*				Chief Financial Officer Certification Pursuant to Exchange Act Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

95.1*				Mine Safety Disclosures

~~101~~101*				The following financial statements from SunCoke Energy Partners L.P.'s Quarterly Report on Form 10-Q for the three months ended March 31, ~~2015,~~2016, filed with the Securities and Exchange Commission on April ~~28, 2015,~~27, 2016, formatted in XBRL (eXtensible Business Reporting Language is attached to this report): (i) the Combined and Consolidated Statements of ~~Operations;~~Income; (ii) the ~~Combined and~~ Consolidated Balance Sheets; (iii) the Combined and Consolidated Statements of Cash Flows; (iv) the Consolidated Statement of Equity; and, ~~(iv)~~(v) the Notes to Combined and Consolidated Financial Statements. Users of this data are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under these sections



*	Filed herewith.
†	~~Certain portions have been omitted pursuant to a confidential treatment request. Omitted information has been separately filed with the Securities and Exchange Commission.~~

Pursuant to the requirements of Section 13 or 15(a) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lisle, State of Illinois, on April ~~28, 2015.~~27, 2016.



SunCoke Energy Partners, L.P.

By:		SunCoke Energy Partners GP LLC, its general partner

By:		/s/ Fay West
		Fay West
		Senior Vice President and Chief Financial Officer (As Principal Financial Officer and Duly Authorized Officer of SunCoke Energy Partners GP LLC)



Delaware		35-2451470
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)



Large accelerated filer	¨		Accelerated filer	ý
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	¨



	(Dollars in millions)
Debt extinguishment costs related to the Granite City Dropdown	$	9.4
Interest on additional debt related to the Granite City Dropdown	4.1
Interest on additional debt related to the Haverhill and Middletown Dropdown	4.6
Other changes in capitalized interest and fees	(0.4		)
Total increase in interest expense, net	$	17.7



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	March 31, 2015		December 31, 2014
	(Dollars in millions)
Assets
Cash and cash equivalents	$	91.8	$	33.3
Receivables	30.1		36.3
Receivables from affiliates, net	—		3.1
Inventories	84.1		90.4
Other current assets	3.6		1.5
Total current assets	209.6		164.6
Properties, plants and equipment, net	1,197.5		1,213.4
Goodwill and other intangible assets, net	14.9		15.1
Deferred income taxes	—		21.6
Deferred charges and other assets	0.5		2.3
Total assets	$	1,422.5	$	1,417.0
Liabilities and Equity
Accounts payable	$	58.7	$	61.1
Accrued liabilities	10.3		11.2
Interest payable	7.4		12.3
Total current liabilities	76.4		84.6
Long-term debt	597.4		399.0
Deferred income taxes	37.9		—
Asset retirement obligations	5.3		5.3
Other deferred credits and liabilities	1.5		1.4
Total liabilities	718.5		490.3
Equity
Held by public:
Common units (issued 16,790,101 and 16,789,164 units at March 31, 2015 and December 31, 2014, respectively)	241.1		239.1
Held by parent:
Common units (issued 6,782,449 and 4,904,752 units at March 31, 2015 and December 31, 2014, respectively)	165.1		113.8
Subordinated units (issued 15,709,697 units at March 31, 2015 and December 31, 2014, respectively)	205.6		203.7
General partner interest	10.6		9.2
Parent net equity	—		349.8
Partners' capital attributable to SunCoke Energy Partners, L.P.	622.4		915.6
Noncontrolling interest	81.6		11.1
Total equity	704.0		926.7
Total liabilities and partners' net equity	$	1,422.5	$	1,417.0


(3)	~~Sales discounts~~ Coal Logistics deferred revenue adjusts for coal and liquid tons the Partnership did not handle, but are ~~related~~included in Adjusted EBITDA as the associated take-or-pay fees are billed to ~~nonconventional fuel tax credits,~~the customer. Deferred revenue on take-or-pay contracts is recognized into GAAP income annually based on the terms of the contract.


(1)	Cokemaking capacity represents stated capacity for the production of blast furnace coke. The Middletown coke sales agreement provides for coke sales on a “run of oven” basis, which includes both blast furnace coke and small coke. Middletown capacity on a “run of oven” basis is 578 thousand tons per year.


(1)	Includes capitalized interest of $0.6 million and $0.7 million in the three months ended March 31, 2016 and 2015, respectively.


(2)	Includes capital expenditures of $1.4 million on the ship loader expansion project paid for with pre-funded cash, which was restricted in conjunction with the acquisition of CMT and $0.6 million of interest capitalized in connection with the project.


(4)	The Partnership amended the contingent consideration terms with The Cline Group, which reduced the fair value of the contingent consideration liability from $7.9 million at December 31, 2015 to $4.2 million at March 31, 2016, resulting in a $3.7 million gain, which was excluded from Adjusted EBITDA.