Slide 1: Q2 '11 Earnings Conference Call
Q2 ‘11 Earnings Conference Call August 3, 2011
Slide 2: Safe Harbor Statement
Safe Harbor Statement This slide presentation should be reviewed in conjunction with SunCoke‟s Second Quarter 2011 earnings conference call held on August 3, 2011 at 5:00 p.m. ET. You may listen to the audio portion of the conference call by phone or on the website and an audio recording will be ava
Slide 3: Separation Update
Separation Update • Completed Initial Public Offering (NYSE: SXC) • Issued $700 million aggregate of Long-Term Debt and entered into a $150 million Revolving Credit Facility • $400 million Senior Notes • $300 million Secured Term Loan Credit Facility • Repaid intercompany payable to Sunoco of $575 m
Slide 4: Second Quarter Overview
Second Quarter Overview Q2 ‘11 vs. Q2 ’10 • Year-over-year quarterly results reflect unfavorable impact of ArcelorMittal settlement, and relocation and public company readiness costs • Net Income Attributable to Net Parent Investment of $22.4 million in Q2 „11 vs. $44.3 million in Q2 ‟10 • Adjusted
Slide 5: Q2 '11 Financial Results
Q2 ‘11 Financial Results Q2 '11 vs. Q2 '11 vs. ($ in millions) Q2 '11 Q2 '10 Q1 '11 Q2 '10 Q1 '11 Revenue $378.0 $349.3 $333.3 $28.7 $44.7 Operating Income $21.4 $57.9 $4.3 ($36.5) $17.1 Net Income Attributable to $22.4 $44.3 $11.8 ($21.9) $10.6 Net Parent Investment Adjusted EBITDA (1) $37.6 $68.7
Slide 6: Q2 2010 to Q2 2011 Adjusted EBITDA Reconciliation
Q2 2010 to Q2 2011 Adjusted EBITDA Reconciliation (1) Excluding settlement impact, Adjusted EBITDA improvement from Haverhill and Granite City was offset by operational issues at Indiana Harbor and Coal Mining and relocation and public readiness costs ($ in millions) $70 $60 ($19.3) $2.5 $50 $5.2 ($
Slide 7: Q1 2011 to Q2 2011 Adjusted EBITDA Reconciliation
Q1 2011 to Q2 2011 Adjusted EBITDA Reconciliation (1) Adjusted EBITDA improvement driven by the absence of coke cover loss and improvements at Indiana Harbor and Haverhill, partially offset by higher relocation and public company readiness costs ($ in millions) $50 $45 $2.0 $40 $3.9 ($5.5) ($0.8) $3
Slide 8: Domestic Coke Financial Summary
Domestic Coke Financial Summary (Jewell Coke & Other Domestic Coke) Domestic Coke Pro Forma Adjusted EBITDA(1) , Pro Forma for Domestic Coke Production ArcelorMittal Settlement and Coal Transfer Price (Tons in thousands) ($ in millions, except per ton amounts) 922 883 861 168 153 165 $55 $ 45 $ 41/t
Slide 9: Coal Mining Financial Summary
Coal Mining Financial Summary Coal Mining Pro Forma Adjusted EBITDA (5), Pro Forma for Coal Sales, Production and Purchases Coal Transfer Price Impact (Tons in thousands) ($ in millions, except per ton amounts) 386 335 334 340 314 265 $49/ton 51 23 24 Q2 '10 Q1 '11 Q2 '11 Coal sales Coal production
Slide 10: Capital Expenditures
Capital Expenditures • Capital Expenditures increased $62M from first half of 2010, primarily related to Middletown Operations - Capital Expenditures for Q1 „11 and Q2 ‟11 were $59.5M and $68.5M, respectively • Estimated 2011 Capital Expenditures of approximately $231 million - 2011 Expansion Capita
Slide 11: Cash Flows and Financial Position
Cash Flows and Financial Position • Issued $700M in debt in the form of $300M Term Capital Structure Loan and $400M Senior Notes • Sufficient liquidity (cash and undrawn revolver) to Liquidity support growth strategy and allow opportunistic acquisitions • Will continue to invest operating cash flows
Slide 12: Key Drivers of Near Term Growth (2012/2013)
Key Drivers of Near Term Growth (2012/2013) Middletown • Plant is approximately 95% complete and 90% staffed and is on track to commence operations in Q4 Indiana Harbor • No anticipated contractual production shortfall in 2012/2013 • $50M – $100M estimated spending to support contract extension • Co
Slide 13: Key Drivers of Longer Term Growth (2013 and Beyond)
Key Drivers of Longer Term Growth (2013 and Beyond) International – Brazil, China and India • Steel is growing in emerging economies, led by China and India • India is attractive for us given expected growth in primary coke demand and coke supply/demand balance • Signed Memorandum of Understanding w
Slide 14: Questions
Questions Second Quarter 2011 Earnings Conference Call 13
Slide 15: Appendix
Appendix Second Quarter 2011 Earnings Conference Call 14
Slide 16: Management Team
Management Team SunCoke’s management team represents a combination of deep industry knowledge, international experience and broad management/technical skills Years of industry Name Position experience Previous experience Fritz Henderson Chief Executive Officer 26 General Motors Michael Thomson Presi
Slide 17: Board of Directors
Board of Directors Name Affiliation Employment History Board affiliations Fritz Henderson SunCoke Energy SunCoke Energy, Inc; General Motors Compuware Corp. Alvin Bledsoe Independent PricewaterhouseCoopers LLP Crestwood Midstream Partners Robert Darnall Independent Inland Steel Industries; Ispat Nor
Slide 18: Definitions
Definitions • Adjusted EBITDA represents earnings before interest, taxes, depreciation, depletion and amortization (“EBITDA”) adjusted for sales discounts and the deduction of income attributable to non-controlling interests in our Indiana Harbor cokemaking operations. EBITDA reflects sales discount
Slide 19: EBITDA Reconciliation, $MM
EBITDA Reconciliation, $MM For The Three Months Ended June 30, 2011 Other Domestic International Corporate Jewell Coke Coke Coke Coal Mining and Other Total Net Income $23,993 Add: depreciation, depletion and amortization 14,605 Subtract: interest income (primarily from affiliates) (5,763) Add: inte
Slide 20: EBITDA Reconciliation, $MM
EBITDA Reconciliation, $MM For The Three Months Ended June 30, 2010 Other Domestic International Corporate Jewell Coke Coke Coke Coal Mining and Other Total Net Income $47,550 Add: depreciation, depletion and amortization 11,107 Subtract: interest income (primarily from affiliates) (6,039) Add: inte
Slide 21: EBITDA Reconciliation, $MM
EBITDA Reconciliation, $MM For The Three Months Ended March 31, 2011 Other Domestic International Corporate Jewell Coke Coke Coke Coal Mining and Other Total Net Income $5,655 Add: Depreciation, depletion and amortization 13,020 Subtract: interest income (primarily from affiliates) (5,717) Add: inte
Slide 22: Media releases and SEC filings are available on our website
Media releases and SEC filings are available on our website at www.suncoke.com Contact Investor Relations for more information: 630-824-1907 Second Quarter 2011 Earnings Conference Call 21