Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Q3 2012 Earnings Presentation
26 slides from Suncoke Energy's earnings presentation, Oct 24, 2012
Slide 1: Q3 2012 Earnings Conference Call
Q3 2012 Earnings Conference Call October 24,, 2012
Slide 2: Safe Harbor Statement
Safe Harbor Statement This slide presentation should be reviewed in conjunction with SunCoke’s Third Quarter 2012 earnings release and conference call held on October 24, 2012 at 10:00 a.m. ET. Some of the information included in this presentation contains “forward-looking statements” (as defined in
Slide 3: Q3 2012 Earnings Overview
Q3 2012 Earnings Overview Q3 2012 EPS up 73% to $0.45 per share Earnings Per Share (diluted) • Middletown continues to perform at high level $0.45 • All U U.S. S coke k ffacilities ili i b built il on solid lid prior i year $0.32 performance $0.32 $0.26 $0.24 Coal delivered slightly favorable result
Slide 4: Q3 2012 Financial Results
Q3 2012 Financial Results ($ in millions) Q3'12 Q3'11 Change Revenue up 19% • Middletown added nearly $77 million Domestic Coke Sales Volumes 1,116 968 148 on volume of 156 thousand tons Coal Sales Volumes 392 371 21 Adjusted EBITDA(3) increased 62% Revenue $480.5 $403.5 $77.0 • Middl Middletown con
Slide 5: Adjusted EBITDA Bridge
Adjusted EBITDA Bridge Bridge––Q3 2011 to Q3 2012 (1) Middletown was the primary driver of the quarter’s performance ($ in millions) $2 6 $2.6 $1 5 $1.5 $6 6 $6.6 $16.9 $72.4 $44.8 Q3 2011 Middletown Coke Business Coal Mining Corporate Q3 2012 Adjusted (excluding Middletown) Adjusted EBITDA (1) EBIT
Slide 6: EPS Bridge
EPS Bridge – Q3 2011 to Q3 2012 EPS benefited from strong coke business results and lower corporate costs offset by financing costs for standalone capital structure $0.02 ($0.06) $0 10 $0.10 ($0.12) ($0.03 ) $0.28 $0.45 $0.26 Q3 2011 EPS Adjusted Adjusted Adjusted Depreciation, Financing Costs Taxes
Slide 7: Q3 2012 Sources & Uses of Cash
Q3 2012 Sources & Uses of Cash Ended quarter with solid cash position, virtually undrawn revolver and improving credit metrics ($ in millions) $5.3 $18.9 $32.9 ($57.0) ($9.0) ($19.9) ($3.4) Primary Changes vs. Q2 2012: Accounts receivables: ($37.6m)* $190.0 Accounts payable: ($28.6m) Interest: ($8.3
Slide 8: Domestic Coke Business Summary
Domestic Coke Business Summary (Jewell Coke & Other Domestic Coke) Sustained strong coke operations drove Adjusted EBITDA(1) per ton above $60 per ton Domestic Coke Production Domestic Coke Adjusted EBITDA(1) Per Ton $90 $ 8 0 (Tons in thousands) ($ in millions, except per ton amounts) 1,095 1,097 1
Slide 9: Pretax Return on Invested Capital (ROIC)
Pretax Return on Invested Capital (ROIC) Pretax ROIC(1) for Domestic Coke excluding Middletown prior to 2012(2) 23% 24% 20% 17% 15% 12% 13% 2% Q1 2011 Q2 2011 Q3 2011 Q4 2011 2011 Q1 2012 Q2 2012 Q3 2012 (1)(2) Pretax ROIC, ex‐Middletown prior 2012 Q1 2011 Q2 2011 Q3 2011 Q4 2011 2011 Q1 2012 Q2 201
Slide 10: Coal Mining Financial Summary
Coal Mining Financial Summary Coal Mining Adjusted EBITDA(1) and Avg. Sales (1) Q3 2012 segment Adjusted EBITDA up Price/Ton(2) ($ in millions, except per ton amounts) $2 00 $1.5 million to $10.7 million $155 $159 $171 $169 $165 • Higher mid‐vol. price and volumes $1 50 benefited results YoY $151 $1
Slide 11: Coal Mining Action Plan
Coal Mining Action Plan Taking more aggressive action in Q4 2012 to reduce costs and improve productivity to position coal business for 2013 • Rationalizing underground mining plan – Idling 2 company operated mines (6 4) and 3 contract mines (8 5) Maintain idled operations on “stand‐by” for wh
Slide 12: Coal Mining Business Outlook
Coal Mining Business Outlook • 2013 mining plan based on expected flat sales volumes vs. 2012 (approximately 1.5 million tons) – Revelation venture and purchased coal expected to represent about ~30% of volumes in 2013, 2013 compared with estimated 15% in 2012 – Mix change will drive lower average c
Slide 13: Full Year Adjusted EBITDA Outlook
(1) Full Year Adjusted EBITDA Outlook FY 2012 Adjusted EBITDA(1) expected to increase by more than $110 million vs. FY 2011 driven di by b strength t th off coke k business b i ($ in millions) $61 ‐ $76 $72.4 $255 ‐ $270 $65 5 $65.5 $141 $55.8 Q1 2012 Q2 2012 Q3 2012 Estimated Estimated FY 2011 Adju
Slide 14: Updated 2012 Guidance
Updated 2012 Guidance Metric Expected 2012 Outlook Adjusted EBITDA (1) $255 million – $270 million EPS* (at 22% tax rate) $1.30 – $1.40 Capital Expenditures & Approximately $75 million Investments Free Cash Flow ((2)) $100 million + Cash Tax Rate 10% – 15% Effective Tax Rate 20% – 24% Corporate Cost
Slide 15: Questions
Questions SunCoke Energy The Higher Degree
Slide 16: Media releases and SEC filings are available on www.suncoke.com
Media releases and SEC filings are available on www.suncoke.com Investor Relations: 630-824-1907
Slide 17: Appendix
Appendix SunCoke Energy The Higher Degree
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 noncontrolling interests in our Indiana Harbor cokemaking operations. EBITDA reflects sales discounts
Slide 19: Reconciliations
Reconciliations Reconciliations from Adjusted Operating Income and Adjusted EBITDA to Net Income $ 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 13
Slide 20: Reconciliations
Reconciliations Reconciliations from Adjusted EBITDA to Adjusted Pre‐Tax Operating Income Other Jewell Domestic International Jewell Domestic $ in millions, millions except per ton data C k Coke C k Coke C k Coke C l Coal C Corporate t C Combined bi d C k Coke Q3 2012 Adjusted EBITDA 13.6 54.9 0.9 1
Slide 21: Reconciliations
Reconciliations Reconciliations from Adjusted EBITDA to Adjusted Pre‐Tax Operating Income Other Jewell Domestic International Jewell Domestic $ in millions,, except p per p ton data Coke Coke Coke Coal Corporate p Combined Coke FY 2011 Adjusted EBITDA 46.1 89.4 13.7 35.5 (44.2) 140.5 135.5 Subtract:
Slide 22: Reconciliations
Reconciliations Reconciliations from Adjusted EBITDA to Adjusted Pre‐Tax Operating Income Other Jewell Domestic International Jewell Domestic $ in millions, except per ton data Coke Coke Coke Coal Corporate Combined Coke Q2 2011 Adjusted EBITDA 10.6 25.3 0.8 11.5 (10.5) 37.7 35.9 Subtract: ( Depreci
Slide 23: Pretax Return on Invested Capital Reconciliation
Pretax Return on Invested Capital Reconciliation Consolidated Sun Coke Energy Q3 2012 Q2 2012 Q1 2012 2011 Q4 2011 Q3 2011 Q2 2011 Q1 2011 2010 (1) Adjusted Pre‐Tax Operating Income 54.8 46.6 37.1 80.4 14.9 33.5 24.6 7.4 151.5 (2) Invested Capital ($ in millions) Q3 2012 Q2 2012 Q1 2012 2011 Q4 2011
Slide 24: Pretax Return on Invested Capital Reconciliation
Pretax Return on Invested Capital Reconciliation Jewell Other International Coal Corporate Period ended Coke Domestic Coke Coke Mining and Other Total Identifiable Assets for Allocating Invested Capital Q3 2012 86.0 1,447.7 52.8 190.1 183.8 1,960.4 Q2 2012 81.4 1,458.4 53.9 193.0 183.5 1,970.2 Q1 20
Slide 25: Estimated 2012 EBITDA Reconciliation
Estimated 2012 EBITDA Reconciliation 2012E Net Income to Adjusted EBITDA Reconciliation 2012E 2012E (in millions) Low High Net Income N I $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 Noncontro
Slide 26: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation 2012E Estimated E i d Free F Cash C h Flow Fl Reconciliation R ili i For nine months ended Estimated 9/30/2012 (in millions) 2012 (Actual) Cash from operations In excess of $ 179 $ 78 Less cash used for investing activities Approx Approx. (75) (41) Less payments to mino