Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Barclays CEO Energy-Power Conference 2012
29 slides from Suncoke Energy's conference presentation, Sep 5, 2012
Slide 1: Barclays CEO Energy-Power Conference
Exhibit 99.1 Barclays CEO Energy-Power Conference September 5, 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 SunCoke Largest independent producer of Cokemaking Capacity metallurgical coke in the Americas (In thousands of tons) Cokemaking business generates ~85% of Adjusted EBITDA (1) – 5.9 million tons of capacity in six facilities; five in U.S. and one in Brazil – Four new plants since 2006
Slide 4: Blast Furnaces and Coke
Blast Furnaces and Coke BEST IN CLASS in lbs/ST Iron Iron ore/ Blast furnaces are the most 3100 burden pellets efficient and proven method 198 Scrap of reducing iron oxides Top Gas into liquid iron Flux Limestone 30 Fuel Coke 600 Coke is a vital material to blast furnace steel making BEST IN CLASS i
Slide 5: SunCoke's Cokemaking Technology
SunCoke’s Cokemaking Technology Our industry-leading cokemaking technology meets U.S. EPA Maximum Achievable Control Technology (MACT) Standards Barclays CEO Energy-Power Conference 5
Slide 6: SunCoke's Heat Recovery vs. By-Product Oven
SunCoke’s Heat Recovery vs. By-Product Oven SunCoke Heat Recovery Traditional By-Product Pressurization Negative pressure Positive pressure Potential for emission of hazardous Air Emissions Meets U.S. EPA MACT standards compounds Power Generation Cogenerates power Power consuming process Hazardous I
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 Coal High quality coke with cheaper coal blends Flexibility – Bur
Slide 8: SunCoke's Contract Proposition
SunCoke’s Contract Proposition We deliver coke to customers through a competitive turnkey solution, which produces a consistent stream of earnings Typical Key What SunCoke Offers Coke Contract Provisions Capital Funding and Ownership Take-Or-Pay SunCoke Fixed Fee Permits and Approvals Customer Energ
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 $0.17 – Strong operations at other facilities Coal action plan progressing 2011 2012 – Di
Slide 10: Domestic Coke Business Summary
Domestic Coke Business Summary (Jewell Coke & Other Domestic Coke) Strong performance driven by Middletown, Indiana Harbor and other operations DomesticCokeProduction (1) Per Ton Domestic Coke Adjusted EBITDA (Tons in thousands) ($ in millions, except per ton amounts) Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2
Slide 11: Coal Mining Financial Summary
Coal Mining Financial Summary CoalMiningAdjustedEBITDA (1) andAvg.Sales Cash production costs increasing in face of Price/Ton (2) difficult demand/price environment ($ in millions, except per ton amounts) $171 $167 – Pricing up modestly, reflecting strong mid-vol. $162 $155 $159 pricing/volumes, off
Slide 12: 2012 Adjusted EBITDA Outlook
(1) 2012 Adjusted EBITDA Outlook Strong U.S. cokemaking business expected to drive increase in Adjusted EBITDA (1) in 2012 ($ in millions) 2011 Coke Business Coal Mining Corporate 2012 Adjusted Adjusted Costs EBITDA(1) EBITDA(1) (1) For a definition of Adjusted EBITDA and reconciliation of Adjusted
Slide 13: 2012 Guidance
2012 Guidance Metric Expected 2012 Outlook (1) Adjusted EBITDA $250 million– $280 million EPS* (at 22% tax rate) $1.30 – $1.65 Capital Expenditures Approximately $85 million & Investments (1) Free Cash Flow $100 million + Cash Tax Rate 10% –15% Effective Tax Rate 20% –24% Corporate Costs $30 million
Slide 14: Strategies for Enhancing Shareholder Value
Strategies for Enhancing Shareholder Value Operational Grow The Coke Strategically Optimize Excellence Business Assets • Maintain focus on details • U.S. & Canada • Coke MLP and discipline of coke and • Continue permitting • Execute plan to place a coal mining operations efforts for next potential p
Slide 15: Grow the Coke Business: U.S. and Canada
Grow the Coke Business: U.S. and Canada Replace aging coke batteries operated by integrated steel producers Aging Cokemaking Facilities U.S. & Canada Coke Supply Total 2011 Coke Demand: 19.5 million tons Average Age %of U.S. & Canada coke production 37 SunCoke 18% DTE 27% 5% 24% Integrated Other Mer
Slide 16: Grow the Coke Business: U.S. and Canada
Grow the Coke Business: U.S. and Canada SunCoke believes it has the opportunity to displace higher cost coke imports Chinese Coke Price vs. Representative SunCoke (1) Price U.S. and Canada Coke Imports (US$/ton) (Tons in millions) Source: Steel Business Briefing, 2012 Source: CRU, Metallurgical Coke
Slide 17: Coke Price Comparison
Coke Price Comparison SunCoke’s coke is highly competitive on price, quality and reliability versus imported coke DeliveredCokePrices- $/ton Based on June 2012 prices $551 $144 $395 $54 $327 $407 $341 $327 Other Domestic Coke Ukrainian Chinese (Delivered Price) Coke (2) Coke (1) SunCoke Coke Price @
Slide 18: 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 19: Grow the Coke Business: U.S. and Canada
Grow the Coke Business: U.S. and Canada U.S. and Canada SunCoke’s Potential Coke Market North America Opportunity Strategy in millions of tons 5 Permit a potential new Import displacement multi-customer and demand growth 660k/TPY U.S. plant Aging battery replacement Explore acquisition of existing c
Slide 20: Grow the Coke Business: International India
Grow the Coke Business: International India I-ndia 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 India entry Coke supply 2 million tons annually strategy Deficit – Discussing Coke capacity
Slide 21: Master Limited Partnership
Master Limited Partnership Filed S-1 on August 8, 2012 Expected Assets/Structure – At closing of offering, MLP will own 60% interest in Haverhill and Middletown – SXC to own General Partner, incentive distribution rights and a portion of the partnership Haverhill Operations units Proceeds to SXC – E
Slide 22: Appendix
Appendix SunCoke Energy The Higher Degree
Slide 23: Definitions
Definitions • AdjustedEBITDA representsearningsbeforeinterest,taxes,depreciation,depletionandamortization(“EBITDA”) adjusted for sales discounts and the deduction of income attributable to non-controlling interests in our Indiana Harborcokemakingoperations.EBITDAreflectssalesdiscountsincludedasa red
Slide 24: 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 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 2012 Adjusted EBITDA 12.5 48.6 0.7 9.3 (5.6) 65.5 61.1 Subtract: Depreciatio
Slide 26: 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 27: 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 28: 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 29: 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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