Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Investor Presentation (October 2012)
27 slides from Suncoke Energy's investor presentation, Oct 15, 2012
Slide 1: Investor Meetings
Exhibit 99.1 Investor Meetings October 2012
Slide 2: 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 man
Slide 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 pro
Slide 4: Blast Furnaces and Coke
Blast Furnaces and Coke BEST IN CLASS in lbs/ST Iron ore/ Blast furnaces are the most Iron pellets 3100 efficient and proven method burden of reducing iron oxides Scrap 198 into liquid iron Top Gas Flux Limestone 30 Fuel Coke 600 Coke is a vital material to blast furnace steel making BEST IN CLASS i
Slide 5: The Leading Independent Cokemaker
The Leading Independent Cokemaker SunCoke More than doubled capacity since Cokemaking Capacity 2006 with four new plants (In thousands of tons) - Only company to design, build and operate new greenfield developments 5,940 in U.S. in more than a decade 5,390 5,390 - Supply about 20% of U.S. and Canad
Slide 6: SunCoke's Heat Recovery Cokemaking Technology
SunCoke’s Heat Recovery Cokemaking Technology 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 prod
Slide 7: SunCoke's Value Proposition
SunCoke’s Value Proposition High Quality Provide an assured supply of coke to steelmakers & Reliable Coke Supply Larger, stronger coke for improved blast furnace performance Turndown Flexibility Demonstrated sustained 15% 20% - turndown capability Coal High quality coke with cheaper coal blends Flex
Slide 8: Key Contract Provisions
Key Contract Provisions Customers must take all our production up to a maximum or Take-or-Pay 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 -Fixed fee is fixed for life of contract Cost of co
Slide 9: Q1 & Q2 2012 Earnings Overview
Q1 & Q2 2012 Earnings Overview Earnings Per Share (diluted) Results driven by strong Coke business performance $0.32 $0.32 - Middletown startup has been a success $0.24 - Continued improvement at Indiana Harbor $0.17 - Strong operations at other facilities Coal action plan progressing 2011 - Difficu
Slide 10: Domestic Coke Business Summary
Domestic Coke Business Summary (Jewell Coke & Other Domestic Coke) Strong performance driven by Middletown, Indiana Harbor and other operations Domestic Coke Production (1) Per Ton Domestic Coke Adjusted EBITDA (Tons in thousands) ($ in millions, except per ton amounts) (1) For a definition of EBITD
Slide 11: Coal Mining Financial Summary
Coal Mining Financial Summary Coal Mining Adjusted EBITDA(1) and Avg. Sales Cash production costs increasing in face of Price/Ton(2) difficult demand/price environment ($ in millions, except per ton amounts) - Pricing up modestly, reflecting strong mid-vol. pricing/volumes, offset by weak hi-vol. an
Slide 12: First Half 2012 Sources & Uses of Cash
First Half 2012 Sources & Uses of Cash Liquidity position and credit metrics improving; free cash flow (1) was $66 million in first half 2012 ($ in millions) Q4 2011 1H 2012 Depreciation, Deferred Changes in Other Capital Cash used in Q2 2012 Cash Net Income Depletion & Taxes Working Expenditures fi
Slide 13: 2012 Adjusted EBITDA Outlook
(1) 2012 Adjusted EBITDA Outlook Strong U.S. cokemaking business expected to drive increase in Adjusted EBITDA (1) in 2012 ($ in millions) (1) For a definition of Adjusted EBITDA and reconciliation of Adjusted EBITDA, please see the appendix. Investor Visits - October 2012 13
Slide 14: Strategies for Enhancing Shareholder Value
Strategies for Enhancing Shareholder Value Operational Grow The Coke Strategically Optimize Excellence Business Assets • Maintain focus on details • U.S. & Canada • Coke MLP and discipline of coke and • Continue permitting • Execute plan to place a coal mining operations efforts for next potential p
Slide 15: U.S. and Canada Opportunity
U.S. and Canada Opportunity Replace aging coke batteries operated by integrated steel producers Total 2011 Coke Demand: 19.5 million tons Average Age %of U.S. & Canada coke production 37 SunCoke 18% DTE 5% 27% Integrated 24% Other Merchant Steel & Foundry 6% Producers Imports 63% 9 8% SunCoke U.S. &
Slide 16: Coke Price Comparison
Coke Price Comparison SunCoke’s coke is competitive on price, quality and reliability, providing us the opportunity to displace imported coke Representative Delivered Coke Prices $/ton - U.S. and Canada Coke Imports Based on July 2012 prices Chinese 40% Export Tax Premium (Tariff) Chinese Coke Price
Slide 17: Natural Gas in The Blast Furnace
Natural Gas in The Blast Furnace Impact of Low Natural Gas Prices Blast Furnace Fuel Pricing • 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 • Alternati
Slide 18: India Opportunity
India Opportunity Projected to be 3rd largest steel market by 2020 Growing Steel Market Blast furnace to play a critical role in growth • Committed to Importing approximately 2 million tons annually India entry Coke supply Deficit strategy Coke capacity investment lags India steel investment – Discu
Slide 19: Master Limited Partnership
Master Limited Partnership Filed S-1 on August 8, 2012 – Amended S-1 on September 14, 2012 and October 9, 2012 Expected Assets/Structure – At closing of offering, MLP expected to own approximately a 65% interest Haverhill Operations in Haverhill and Middletown – SXC to own General Partner, incentive
Slide 20: Appendix
Appendix VM SunCoke Energy The Higher Degree
Slide 21: Definitions
Definitions • AdjustedEBITDA representsearningsbeforeinterest,taxes,depreciation,depletionandamortization(“EBITDA”) adjustedfor salesdiscountsandthe deductionof incomeattributableto non-controllinginterestsin our Indiana Harborcokemakingoperations.EBITDAreflectssalesdiscountsincludedasa reductionin
Slide 22: Reconciliations
Reconciliations Reconciliations from Adjusted Operating Income and Adjusted EBITDA to Net Income $ in millions Q2 2012 Q1 2012 FY 2011 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Adjusted Operating Income 46.6 37.1 80.4 14.9 33.5 24.6 7.4 Net Income (Loss) attributable to Noncontrolling Interest 1.3 (0.3) (1.7)
Slide 23: Reconciliations
Reconciliations Reconciliations from Adjusted EBITDA to Adjusted Pre-Tax Operating Income Other Domestic International Domestic $ in millions, except per ton data Jewell Coke Coke Coke Jewell Coal Corporate Combined Coke Q2 2012 Adjusted EBITDA 12.5 48.6 0.7 9.3 (5.6) 65.5 61.1 Subtract: Depreciatio
Slide 24: Reconciliations
Reconciliations Reconciliations from Adjusted EBITDA to Adjusted Pre-Tax Operating Income Other Domestic International Domestic $ in millions, except per ton data Jewell Coke Coke Coke Jewell Coal Corporate Combined Coke Q4 2011 Adjusted EBITDA 10.6 21.3 10.2 2.5 (13.2) 31.4 31.9 Subtract: Depreciat
Slide 25: Reconciliations
Reconciliations Reconciliations from Adjusted EBITDA to Adjusted Pre-Tax Operating Income Other Domestic International Domestic $ in millions, except per ton data Jewell Coke Coke Coke Jewell Coal Corporate Combined Coke Q2 2011 Adjusted EBITDA 10.6 25.3 0.8 11.5 (10.5) 37.7 35.9 Subtract: Depreciat
Slide 26: Estimated EBITDA Reconciliation
Estimated EBITDA Reconciliation 2012E Net Income to Adjusted EBITDA Reconciliation 2012E 2012E (in millions) Low High Net Income $98 $122 Depreciation, Depletion and Amortization 74 72 Total financing costs, net 48 46 Income tax expense 25 37 EBITDA $245 $277 Sales discounts 11 10 Noncontrolling int
Slide 27: Free Cash Flow Reconciliations
Free Cash Flow Reconciliations First Half 2012 Free Cash Flow Reconciliation 1st Half (in millions) 2012 Cash from operations $ 86.7 Less cash used for investing activities (20.7) Less payments to minority interest ( -) Free Cash Flow $ 66.0 2012E Estimated Free Cash Flow Reconciliation (in millions
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