![]() Dahlman Rose Metals & Mining Conference November 13, 2012 Exhibit 99.1 |
![]() Mark Newman Senior Vice President & Chief Financial Officer |
![]() ![]() ![]() ![]() Safe Harbor Statement Safe Harbor Statement Some of the information included in this presentation contains “forward-looking statements” (as defined in Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended). Such forward-looking statements are based on management’s beliefs and assumptions and on information currently available. Forward-looking statements include the information concerning SunCoke’s possible or assumed future results of operations, the planned Master Limited Partnership, business strategies, financing plans, competitive position, potential growth opportunities, potential operating performance improvements, the effects of competition and the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and may be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “will,” “should” or the negative of these terms or similar expressions. Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. You should not put undue reliance on any forward-looking statements. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, SunCoke has included in its filings with the Securities and Exchange Commission cautionary language identifying important factors (but not necessarily all the important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement made by SunCoke. For more information concerning these factors, see SunCoke's Securities and Exchange Commission filings. All forward-looking statements included in this presentation are expressly qualified in their entirety by such cautionary statements. SunCoke does not have any intention or obligation to update publicly any forward-looking statement (or its associated cautionary language) whether as a result of new information or future events or after the date of this presentation, except as required by applicable law. This presentation includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non-GAAP financial measures to GAAP financial measures are provided in the Appendix at the end of the presentation. Investors are urged to consider carefully the comparable GAAP measures and the reconciliations to those measures provided in the Appendix, or on our website at www.suncoke.com. Dahlman Rose Metals & Mining Conference - November 2012 3 |
![]() ![]() ![]() ![]() About SunCoke About SunCoke Largest independent producer of metallurgical coke in the Americas Coke is an essential ingredient in blast furnace production of steel Cokemaking business generates ~85% of Adjusted EBITDA (1) 5.9 million tons of capacity in six facilities; 5 in U.S. and 1 in Brazil 2012 U.S. coke production is expected to be in excess of 4.3 million tons Coal mining operations represents ~15% of Adjusted EBITDA (1) High quality mid-vol. metallurgical coal reserves in Virginia and West Virginia Expect to mine about 1.4 million tons in 2012 Dahlman Rose Metals & Mining Conference - November 2012 4 (1) For a definition and reconciliation of Adjusted EBITDA, please see appendix. 9 months ended September 30, 2012 Revenue: $1.4 billion Adjusted EBITDA: $193.7 million (includes corporate costs of $20.1 million) Jewell Coke 19.2% Other Domestic Coke 67.2% Int'l Coke 0.8% Coal Mining 12.8% SunCoke Business Segments (excludes corporate costs) |
![]() ![]() ![]() ![]() More than doubled capacity since 2006 with four new plants Only company to design, build and operate new greenfield developments in U.S. in more than a decade Supply nearly 20% of U.S. and Canada coke needs (1) Secure, long-term take-or-pay contracts with leading steelmakers Customers include ArcelorMittal, U.S. Steel and AK Steel Cokemaking operations are strategically located in proximity to customers’ facilities The Leading Independent Cokemaker The Leading Independent Cokemaker SunCoke Cokemaking Capacity (In thousands of tons) Dahlman Rose Metals & Mining Conference - November 2012 5 (1) Source: Company estimates Jewell Coke (Virginia) Indiana Harbor (Indiana) Haverhill I (Ohio) Vitória (Brazil) Haverhill II (Ohio) Granite City (Illinois) Middletown (Ohio) |
![]() COKE IN THE BLAST FURNACE COKE IN THE BLAST FURNACE & SUNCOKE’S COKEMAKING TECHNOLOGY & SUNCOKE’S COKEMAKING TECHNOLOGY Dahlman Rose Metals & Mining Conference - November 2012 6 |
![]() ![]() Blast Furnaces and Coke Blast Furnaces and Coke 7 1 short ton of hot metal (NTHM) Top Gas Dahlman Rose Metals & Mining Conference - November 2012 BEST IN CLASS in lbs/ST BEST IN CLASS in lbs/ST Iron Iron burden burden Iron ore/ Iron ore/ pellets pellets Scrap Scrap 3100 3100 198 198 Flux Flux Limestone Limestone 600 600 30 30 Coke Coke BEST IN CLASS in lbs/ST BEST IN CLASS in lbs/ST Fuel Fuel Fuel Nat Gas Coal Most efficient blast Most efficient blast furnaces require furnaces require 800-900 lbs/NTHM 800-900 lbs/NTHM of fuel to produce of fuel to produce a ton of hot metal a ton of hot metal Blast furnaces are the most Blast furnaces are the most efficient and proven method efficient and proven method of reducing iron oxides of reducing iron oxides into liquid iron into liquid iron Coke is a vital material to Coke is a vital material to blast furnace steel making blast furnace steel making We believe stronger, larger We believe stronger, larger coke is becoming more coke is becoming more important as blast furnaces important as blast furnaces seek to optimize fuel needs seek to optimize fuel needs Up to 80-120 Up to 120-180 |
![]() ![]() ![]() ![]() SunCoke’s Heat Recovery SunCoke’s Heat Recovery Cokemaking Technology Cokemaking Technology CS Global Credit Conference - October 2012 8 Industry leading environmental signature Leverage negative pressure technology to substantially reduce hazardous emissions Convert waste heat into steam and electrical power Generate about 9 MW of electric power per 110,000 tons of annual coke production Meet stringent U.S. EPA Maximum Achievable Control Technology standard Traditional by-product cokemaking methods have significant environmental impacts |
![]() SUNCOKE’S VALUE PROPOSITION & SUNCOKE’S VALUE PROPOSITION & CONTRACT PROVISIONS CONTRACT PROVISIONS Dahlman Rose Metals & Mining Conference - November 2012 9 |
![]() ![]() ![]() ![]() SunCoke’s Value Proposition SunCoke’s Value Proposition Provide an assured supply of coke to steelmakers Larger, stronger coke for improved blast furnace performance Demonstrated sustained 15% - 20% turndown capability High quality coke with cheaper coal blends Burn loss vs. by-product Capital preservation and lower capacity cost per ton; particularly relative to greenfield investment Stringent U.S. regulatory environment Power prices and reliability versus value of coke oven gas and by-product "credits" High Quality & Reliable Coke Supply Turndown Flexibility Coal Flexibility Capital Efficiency & Flexibility Environment /Economic Trade-offs Dahlman Rose Metals & Mining Conference - November 2012 10 ¯ |
![]() ![]() ![]() ![]() Key Contract Provisions Key Contract Provisions Customers must take all our production up to a maximum or pay contract price for amount not taken – We are obligated to deliver a minimum quantity of coke annually Represents profit and return on capital – Fixed fee is fixed for life of contract Cost of coal is passed-through subject to achieving a contracted coal-to-coke yield standard Operating costs are passed-through based on annually negotiated budget or a fixed budget adjusted for inflation These costs are passed-through Take-or-Pay Fixed Fee Coal Cost Operating Costs Transportation & Taxes Dahlman Rose Metals & Mining Conference - November 2012 11 |
![]() SUNCOKE’S GROWTH STRATEGY SUNCOKE’S GROWTH STRATEGY Dahlman Rose Metals & Mining Conference - November 2012 12 |
![]() ![]() ![]() ![]() Strategies for Enhancing Shareholder Value Strategies for Enhancing Shareholder Value 13 Dahlman Rose Metals & Mining Conference - November 2012 Operational Excellence Grow The Coke Business Strategically Optimize Assets • Maintain focus on details and discipline of coke and coal mining operations • Sustain and enhance top quartile safety performance and ability to meet environment standards • Leverage operating know- how and technology to continuously improve yields and operating costs • Domestic • Continue permitting efforts for next potential U.S. facility • Explore opportunities to make strategic investments in existing capacity • International • Execute India entry and pursue follow-on growth • Coke MLP • Execute plan to place a portion of our cokemaking assets into an MLP structure • Coal • Taking more aggressive actions to optimize operations and enhance long- term strategic flexibility |
![]() ![]() ![]() ![]() Dahlman Rose Metals & Mining Conference - November 2012 Source: CRU, The Annual Outlook for Metallurgical Coke 2012. Replace aging coke batteries operated by integrated steel producers Source: CRU, The Annual Outlook for Metallurgical Coke 2012 51% of coke capacity is at facilities >30 years old Integrated Integrated Steel Steel Producers Producers 63% 63% SunCoke 18% DTE 5% Other Merchant Other Merchant & Foundry & Foundry 6% 6% Imports Imports 8% 8% U.S. and Canada Opportunity U.S. and Canada Opportunity 14 Total 2011 Coke Demand: 19.5 million tons % of U.S. & Canada coke production Average Age Aging Cokemaking Facilities U.S. & Canada Coke Supply 37 27% 9 24% SunCoke U.S. & Canada (excl SXC) 40+ years 30-40 years |
![]() ![]() ![]() ![]() Coke Price Comparison Coke Price Comparison 15 SunCoke’s coke is competitive on price, quality and reliability, providing us the opportunity to displace imported coke Dahlman Rose Metals & Mining Conference - November 2012 U.S. and Canada Coke Imports Representative Delivered Coke Prices - $/ton $320 $76 $353 $361 $115 Other Domestic Coke Ukrainian Coke (1) Chinese Coke (2) SunCoke Coke Price @ Spot Coal Price SunCokePrice - Contracted Coal Price Differential Coke Price Chinese 40% Export Tax Premium (Tariff) 1 Includes approx. $65/ton freight and approx. $30/ton handling loss for shipping to Great Lakes region $396 1 2 $396 $353 Coke Price 4.5 3.2 0.9 2.0 2.0 2.0 1.8 1.6 1.5 1.7 2005 2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E 2016E Imports SunCoke sales volumes Based on September 2012 prices $476 5.2 4.8 Source: World Price (DTC), Coke Market Report, CRU and company estimates Includes approx. $70/ton freight and approx. $35/ton handling loss for shipping to Great Lakes region |
![]() ![]() ![]() ![]() Sources: CRU, The Annual Outlook for Metallurgical Coke 2011, CIA World Factbook. India Opportunity India Opportunity Dahlman Rose Metals & Mining Conference - November 2012 16 Projected to be 3rd largest steel market by 2020 Blast furnace to play a critical role in growth Importing approximately 2 million tons annually Coke capacity investment lags steel investment 3.5 million tons merchant production or 13% of total 17 active merchant coke producers 10% - 20% short power Average wholesale price >$80 mwh (2x U.S. rate) Growing Steel Market Coke supply Deficit Active Merchant Market Electric Power Deficit India Steel/Coke Market • • Committed to Committed to India entry India entry strategy strategy – – Discussing Discussing opportunities in opportunities in India India – – Targeting Targeting potential entry potential entry by early 2013 by early 2013 |
![]() ![]() ![]() ![]() Master Limited Partnership Master Limited Partnership Expected Assets/Structure – At closing of offering, MLP expected to own approximately a 65% interest in Haverhill and Middletown – SXC to own General Partner, incentive distribution rights and a portion of the partnership units Proceeds to SXC – Expected uses will include paying down debt, funding expansion and other general corporate purposes Dahlman Rose Metals & Mining Conference - November 2012 17 Middletown Operations Haverhill Operations |
![]() SUNCOKE’S FINANCIAL RESULTS SUNCOKE’S FINANCIAL RESULTS Dahlman Rose Metals & Mining Conference - November 2012 18 |
![]() ![]() ![]() ![]() Earnings Overview (1) For a definition and reconciliation of Adjusted EBITDA, please see appendix. (2) For a definition and reconciliation of free cash flow, please see appendix Dahlman Rose Metals & Mining Conference - November 2012 19 Results driven by strong Coke business performance Middletown startup has been a success Entire U.S. cokemaking fleet delivering strong results Coal remains a challenge Higher than expected cash costs Expect continued difficult demand/price environment Implementing aggressive coal action plan Strong liquidity position Cash balance of nearly $160 million and virtually undrawn revolver of $150 million FY 2012 free cash flow (2) expected to be in excess of $100 million costs |
![]() ![]() ![]() ![]() Domestic Coke Business Summary Domestic Coke Business Summary (Jewell Coke & Other Domestic Coke) (Jewell Coke & Other Domestic Coke) Dahlman Rose Metals & Mining Conference - November 2012 20 Domestic Coke Production Domestic Coke Adjusted EBITDA (1) Per Ton (Tons in thousands) ($ in millions, except per ton amounts) (1) For a definition of Adjusted EBITDA and Adjusted EBITDA/Ton and reconciliations, see appendix. (2) Includes Indiana Harbor contract billing adjustment of $6.0 million, net of NCI, and inventory (3) Includes a $2.4 million, net of NCI, charge related to coke inventory reduction and a $1.3 million, net of NCI, lower cost or market adjustment on pad coal inventory and lower coal-to-coke yields related to the startup at Middletown. Sustained strong performance across entire U.S. cokemaking fleet is driving results $ 80 $90 adjustment of $6.2 million, net of NCI, of which $3.1 million is attributable to Q3 2011. |
![]() ![]() ![]() ![]() Coal Mining Financial Summary Coal Mining Financial Summary Dahlman Rose Metals & Mining Conference - November 2012 21 Coal Mining Adjusted EBITDA (1) and Avg. Sales Price/Ton (2) ($ in millions, except per ton amounts) (1) (2) (3) YTD Sept 2012 Coal Segment Adjusted EBITDA (1) declined to $27.4 million Cash production costs increasing in a difficult demand/price environment – Reject rates remain high due to geology and preparation plant inefficiency – Higher labor costs due to additional headcount Taking aggressive action to position Coal Segment for 2013 – Rationalizing underground mining plan, including idling mines – Implementing improved underground mining practices – Investing to enhance prep plant efficiency Coal Sales, Production and Purchases -$50 $0 $50 $100 $150 $200 $155 $159 $171 $169 $165 $25 $20 $20 $25 $27 $132 $138 $151 $137 $143 Q3 '11 Q4 '11(3) Q1 '12 Q2 '12 Q3 '12 Coal Adjusted EBITDA Average Sales Price Coal Adj EBITDA / ton Coal Cash Cost / ton For a definition and a reconciliation of Adjusted EBITDA, please see the appendix. Average Sales Price is the weighted average sales price for all coal sales volumes, including sales to affiliates and sales to Jewell Coke. Q4 2011 Adjusted EBITDA inclusive of Black Lung Liability charge of $3.4 million and OPEB expense allocation of $1.8 million. Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Coal Sales 371 363 373 365 392 Coal Producton 340 349 375 401 349 Purchased Coal 22 20 19 4 10 Reject Rate (%) 64 65 68 66 67 |
![]() ![]() ![]() ![]() 22 FY 2012 Adjusted EBITDA (1) expected to increase by more than $110 million vs. FY 2011 driven by strength of coke business Full Year Adjusted EBITDA Full Year Adjusted EBITDA (1) (1) Outlook Outlook ($ in millions) Dahlman Rose Metals & Mining Conference - November 2012 (1) For a definition and reconciliation of Adjusted EBITDA, please see the appendix. |
![]() QUESTIONS QUESTIONS Dahlman Rose Metals & Mining Conference - November 2012 23 |
![]() Appendix |
![]() ![]() ![]() ![]() Definitions • Adjusted EBITDA represents earnings before interest, taxes, depreciation, depletion and amortization (“EBITDA”) adjusted for sales discounts and the deduction of income attributable to noncontrolling interests in our Indiana Harbor cokemaking operations. EBITDA reflects sales discounts included as a reduction in sales and other operating revenue. The sales discounts represent the sharing with customers of a portion of nonconventional fuel tax credits, which reduce our income tax expense. However, we believe our Adjusted EBITDA would be inappropriately penalized if these discounts were treated as a reduction of EBITDA since they represent sharing of a tax benefit that is not included in EBITDA. Accordingly, in computing Adjusted EBITDA, we have added back these sales discounts. Our Adjusted EBITDA also reflects the deduction of income attributable to noncontrolling interests in our Indiana Harbor cokemaking operations. EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or operating income under GAAP and may not be comparable to other similarly titled measures in other businesses. Adjusted EBITDA does not represent and should not be considered as an alternative to net income as determined by GAAP, and calculations thereof may not be comparable to those reported by other companies. We believe Adjusted EBITDA is an important measure of operating performance and provides useful information to investors because it highlights trends in our business that may not otherwise be apparent when relying solely on GAAP measures and because it eliminates items that have less bearing on our operating performance. Adjusted EBITDA is a measure of operating performance that is not defined by GAAP and should not be considered a substitute for net (loss) income as determined in accordance with GAAP. • Adjusted EBITDA/Ton represents Adjusted EBITDA divided by tons sold. • Free Cash Flow equals cash from operations less cash used in investing activities less cash distributions to non-controlling interests. Management believes Free Cash Flow information enhances an investor’s understanding of a business’ ability to generate cash. Free Cash Flow does not represent and should not be considered an alternative to net income or cash flows from operating activities as determined under GAAP and may not be comparable to other similarly titled measures of other businesses. Dahlman Rose Metals & Mining Conference - November 2012 25 |
![]() ![]() ![]() ![]() Reconciliations Dahlman Rose Metals & Mining Conference - November 2012 26 $ in millions Q3 2012 Q2 2012 Q1 2012 FY 2011 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Adjusted Operating Income 54.8 46.6 37.1 80.4 14.9 33.5 24.6 7.4 Net Income (Loss) attributable to Noncontrolling Interest 1.3 1.3 (0.3) (1.7) (0.5) 3.4 1.6 (6.2) Subtract: Depreciation Expense (18.9) (20.2) (18.4) (58.4) (16.0) (14.7) (14.7) (13.0) Adjusted EBITDA 72.4 65.5 55.8 140.5 31.4 44.8 37.7 26.6 Subtract: Depreciation, depletion and amortization (18.9) (20.2) (18.4) (58.4) (16.0) (14.7) (14.7) (13.0) Subtract: Financing expense, net (12.2) (11.8) (12.0) (1.4) (7.1) (3.3) 4.5 4.5 Subtract: Income Tax (7.6) (7.0) (5.3) (7.2) 2.9 (5.1) (1.9) (3.1) Subtract: Sales Discount (2.1) (3.8) (3.2) (12.9) (3.2) (3.5) (3.1) (3.1) Add: Net Income attributable to NCI 1.3 1.3 (0.3) (1.7) (0.5) 3.4 1.6 (6.2) Net Income 32.9 24.0 16.6 58.9 7.5 21.6 24.1 5.7 Reconciliations from Adjusted Operating Income and Adjusted EBITDA to Net Income |
![]() ![]() ![]() ![]() $ in millions, except per ton data Jewell Coke Other Domestic Coke International Coke Jewell Coal Corporate Combined Domestic Coke Q3 2012 Adjusted EBITDA 13.6 54.9 0.9 10.7 (7.7) 72.4 68.5 Subtract: Depreciation, depletion and amortization (1.4) (12.7) - (4.2) (0.6) (18.9) (14.1) to noncontrolling interests 1.3 1.3 1.3 Adjusted Pre-Tax Operating Income 12.2 43.5 0.9 6.5 (8.3) 54.8 55.7 Adjusted EBITDA 13.6 54.9 0.9 10.7 (7.7) 72.4 68.5 Sales Volume (thousands of tons) 183 933 310 392 1,116 Adjusted EBITDA per Ton 74.3 58.8 2.9 27.3 61.4 Average Allocated Invested Capital 51.2 889.0 32.6 117.2 NMF 1,090.1 940.3 Annualized Quarterly Pretax ROIC 95% 20% 11% 22% NMF 20% 24% Q2 2012 Adjusted EBITDA 12.5 48.6 0.7 9.3 (5.6) 65.5 61.1 Subtract: Depreciation, depletion and amortization (1.3) (13.7) (0.1) (4.3) (0.8) (20.2) (15.0) to noncontrolling interests 1.3 1.3 1.3 Adjusted Pre-Tax Operating Income 11.2 36.2 0.6 5.0 (6.4) 46.6 47.4 Adjusted EBITDA 12.5 48.6 0.7 9.3 (5.6) 65.5 61.1 Sales Volume (thousands of tons) 170 904 302 365 1,074 Adjusted EBITDA per Ton 73.5 53.8 2.3 25.5 56.9 Average Allocated Invested Capital 50.9 892.7 36.6 117.7 NMF 1,097.9 943.6 Annualized Quarterly Pretax ROIC 88% 16% 7% 17% NMF 17% 20% Q1 2012 Adjusted EBITDA 15.0 40.1 0.1 7.4 (6.8) 55.8 55.1 Subtract: Depreciation, depletion and amortization (1.3) (12.6) (0.1) (4.1) (0.3) (18.4) (13.9) to noncontrolling interests (0.3) (0.3) (0.3) Adjusted Pre-Tax Operating Income 13.7 27.2 - 3.3 (7.1) 37.1 40.9 Adjusted EBITDA 15.0 40.1 0.1 7.4 (6.8) 55.8 55.1 Sales Volume (thousands of tons) 186 892 358 373 1,078 Adjusted EBITDA per Ton 80.6 45.0 0.3 19.8 51.1 Average Allocated Invested Capital 53.3 928.2 41.0 119.6 NMF 1,142.1 981.5 Annualized Quarterly Pretax ROIC 103% 12% 0% 11% NMF 13% 17% Reconciliations from Adjusted EBITDA to Adjusted Pre-Tax Operating Income Reconciliations Dahlman Rose Metals & Mining Conference - November 2012 27 (1) (1) (1) |
![]() ![]() ![]() ![]() Reconciliations Dahlman Rose Metals & Mining Conference - November 2012 28 $ in millions, except per ton data Jewell Coke Other Domestic Coke International Coke Jewell Coal Corporate Combined Domestic Coke FY 2011 Adjusted EBITDA 46.1 89.4 13.7 35.5 (44.2) 140.5 135.5 Subtract: Depreciation, depletion and amortization (4.9) (38.7) (0.2) (12.9) (1.7) (58.4) (43.6) to noncontrolling interests (1.7) (1.7) (1.7) Adjusted Pre-Tax Operating Income 41.2 49.0 13.5 22.6 (45.9) 80.4 90.2 Adjusted EBITDA 46.1 89.4 13.7 35.5 (44.2) 140.5 135.5 Sales Volume (thousands of tons) 702 3,068 1,442 1,454 3,770 Adjusted EBITDA per Ton 65.7 29.1 9.5 24.4 35.9 Average Allocated Invested Capital 52.8 627.8 37.4 99.8 NMF 817.8 680.6 Pretax ROIC 78% 8% 36% 23% NMF 10% 13% Q4 2011 Adjusted EBITDA 10.6 21.3 10.2 2.5 (13.2) 31.4 31.9 Subtract: Depreciation, depletion and amortization (1.2) (10.6) (0.1) (3.7) (0.4) (16.0) (11.8) to noncontrolling interests (0.5) (0.5) (0.5) Adjusted Pre-Tax Operating Income 9.4 10.2 10.1 (1.2) (13.6) 14.9 19.6 Adjusted EBITDA 10.6 21.3 10.2 2.5 (13.2) 31.4 31.9 Sales Volume (thousands of tons) 166 837 295 363 1,003 Adjusted EBITDA per Ton 63.9 25.4 34.6 6.9 31.8 Average Allocated Invested Capital 46.7 594.0 33.7 105.6 NMF 779.9 640.6 Annualized Quarterly Pretax ROIC 81% 7% 120% -5% NMF 8% 12% Q3 2011 Adjusted EBITDA 13.9 34.3 1.7 9.2 (14.3) 44.8 48.2 Subtract: Depreciation, depletion and amortization (1.2) (9.9) - (3.3) (0.3) (14.7) (11.1) to noncontrolling interests 3.4 3.4 3.4 Adjusted Pre-Tax Operating Income 12.7 27.8 1.7 5.9 (14.6) 33.5 40.5 Adjusted EBITDA 13.9 34.3 1.7 9.2 (14.3) 44.8 48.2 Sales Volume (thousands of tons) 191 777 373 371 968 Adjusted EBITDA per Ton 72.8 44.1 4.6 24.8 49.8 Average Allocated Invested Capital 53.5 636.2 34.8 115.1 NMF 839.6 689.7 Annualized Quarterly Pretax ROIC 95% 17% 20% 21% NMF 16% 23% Reconciliations from Adjusted EBITDA to Adjusted Pre-Tax Operating Income |
![]() ![]() ![]() ![]() Reconciliations Reconciliations Dahlman Rose Metals & Mining Conference - November 2012 29 $ in millions, except per ton data Jewell Coke Other Domestic Coke International Coke Jewell Coal Corporate Combined Domestic Coke Q2 2011 Adjusted EBITDA 10.6 25.3 0.8 11.5 (10.5) 37.7 35.9 Subtract: Depreciation, depletion and amortization (1.4) (9.6) (0.1) (3.2) (0.4) (14.7) (11.0) to noncontrolling interests 1.6 1.6 1.6 Adjusted Pre - Tax Operating Income 9.2 17.3 0.7 8.3 (10.9) 24.6 26.5 Adjusted EBITDA 10.6 25.3 0.8 11.5 (10.5) 37.7 35.9 Sales Volume (thousands of tons) 170 757 412 334 927 Adjusted EBITDA per Ton 62.4 33.4 1.9 34.4 38.7 Average Allocated Invested Capital 57.9 648.2 39.7 117.7 NMF 863.4 706.1 Annualized Quarterly Pretax ROIC 64% 11% 7% 28% NMF 11% 15% Q1 2011 Adjusted EBITDA 11.0 8.5 1.0 12.3 (6.2) 26.6 19.5 Subtract: Depreciation, depletion and amortization (1.1) (8.6) - (2.7) (0.6) (13.0) (9.7) to noncontrolling interests (6.2) (6.2) (6.2) Adjusted Pre - Tax Operating Income 9.9 (6.3) 1.0 9.6 (6.8) 7.4 3.6 Adjusted EBITDA 11.0 8.5 1.0 12.3 (6.2) 26.6 19.5 Sales Volume (thousands of tons) 175 697 362 386 872 Adjusted EBITDA per Ton 62.9 12.2 2.8 31.9 22.4 Average Allocated Invested Capital 56.0 645.6 41.4 83.8 NMF 826.9 701.7 Annualized Quarterly Pretax ROIC 71% -4% 10% 46% NMF 4% 2% Reconciliations from Adjusted EBITDA to Adjusted Pre-Tax Operating Income |
![]() ![]() ![]() ![]() ![]() (in millions) 2012E Low 2012E High Net Income $94 $104 Depreciation, Depletion and Amortization 80 78 Total financing costs, net 48 47 Income tax expense 25 34 EBITDA $247 $263 Sales discounts 11 12 Noncontrolling interests (3) (5) Adjusted EBITDA $255 $270 Estimated 2012 EBITDA Reconciliation 2012E Net Income to Adjusted EBITDA Reconciliation Dahlman Rose Metals & Mining Conference - November 2012 30 |
![]() ![]() ![]() ![]() Free Cash Flow Reconciliation Free Cash Flow Reconciliation Dahlman Rose Metals & Mining Conference - November 2012 31 (in millions) Estimated 2012 Cash from operations In excess of $ 179 Less cash used for investing activities Approx. (75) Less payments to minority interest Approx. (4) Free Cash Flow In excess of $ 100 2012E Estimated Free Cash Flow Reconciliation |
![]() REFERENCE REFERENCE Dahlman Rose Metals & Mining Conference - November 2012 32 |
![]() ![]() ![]() ![]() Our cokemaking operations are strategically located in proximity to our customers’ integrated steelmaking facilities SunCoke Operations SunCoke Operations Indiana Harbor Middletown Haverhill 1 Haverhill 2 114M tons of reserves Coal Mining Vitoria, Brazil Dahlman Rose Metals & Mining Conference - November 2012 33 Our metallurgical coal mining business is located in Central Appalachia Jewell Coke Granite City |
![]() ![]() ![]() ![]() Natural Gas in The Blast Furnace Natural Gas in The Blast Furnace Impact of Low Natural Gas Prices • Natural gas cannot completely replace coke in blast furnace – We estimate natural gas and other injectants can replace up to about 30% – The less coke used the more important the coke’s quality • Alternative technologies take time to implement, require significant capital commitments and are energy intensive • Coke oven gases produced by integrated steelmakers’ own coke ovens is less valuable in low cost natural gas environment, potentially impacting steelmakers’ future reinvest/rebuild decisions Blast Furnace Fuel Pricing 34 Source: CRU, SXC Analysis US$/MMBtu Dahlman Rose Metals & Mining Conference - November 2012 |
![]() SunCoke’s Cokemaking Technology SunCoke’s Cokemaking Technology 35 Dahlman Rose Metals & Mining Conference - November 2012 Our industry-leading cokemaking technology meets U.S. EPA Maximum Achievable Control Technology (MACT) Standards |
![]() ![]() ![]() ![]() SunCoke’s Heat Recovery vs. By-Product Oven SunCoke’s Heat Recovery vs. By-Product Oven 36 Dahlman Rose Metals & Mining Conference - November 2012 SunCoke Heat Recovery Traditional By-Product |
![]() ![]() ![]() ![]() YTD 2012 Sources & Uses of Cash YTD 2012 Sources & Uses of Cash Dahlman Rose Metals & Mining Conference - November 2012 37 Ended Q3 2012 with solid cash position, virtually undrawn revolver and improving credit metrics ($ in millions) * Due to timing of payment of a $23.7 million receivable on Monday, October 1, 2012 instead of Sunday, September 30. Primarily reflects: Accounts Receivable: ($24.9m)* Account Payable: ($50.7m) Inventories: $27.0m Q4 2011 Cash Balance YTD 2012 Net Income Depreciation, Depletion & Amortization Deferred Taxes & Taxes Payable Changes in Working Capital (excl. Taxes Payable) Other Capital Expenditures Cash used in financing activities Q3 2012 Cash Balance |