Slide 1: Q4 2012 Earnings Conference Call
Q4 2012 Earnings Conference Call February 5, 2013
Slide 2: Forward-Looking Statements
Forward-Looking Statements FORWARD-LOOKING STATEMENTS This slide presentation should be reviewed in conjunction with the Fourth Quarter 2012 earnings releases of SunCoke Energy, Inc. (SunCoke) and SunCoke Energy Partners, L.P. (Partnership) and the conference call held on February 5 at 10:00 a.m. ET
Slide 3: SunCoke Energy, Inc. Results
SUNCOKE ENERGY, INC. RESULTS SXC and SXCP Q4 2012 Earnings Conference Call 2
Slide 4: Q4 & FY 2012 Earnings Overview
Q4 & FY 2012 Earnings Overview Earnings Per Share (diluted) Q4 and FY 2012 EPS up significantly $1.40 • Near-flawless Middletown startup and better results at Indiana Harbor drove $0.87 performance for both periods • Sustained solid performance across $0.39 cokemaking fleet $0.12 • Achieved domestic
Slide 5: 2012 Accomplishments
2012 Accomplishments Proved our • Executed successful Middletown startup cokemaking • Improved Indiana Harbor results expertise • Achieved solid operations across entire coke fleet Took action to • Delivered positive coal Adjusted EBITDA and cash flow neutral optimize coal results business • Impleme
Slide 6: Q4 & FY 2012 Financial Results
Q4 & FY 2012 Financial Results Q4 2012 FY 2012 Revenue up 16% and 25% for vs. vs. ($ in millions) Q4'12 Q4'11 FY 2012 FY 2011 Q4 2011 FY 2011 Q4‘12 and FY‘12, respectively • Middletown added $43.1 Domestic Coke Sales Volumes 1,077 1,003 4,345 3,770 75 575 million and $260.3 million Coal Sales Volume
Slide 7: Adjusted EBITDA Bridge – Q4 '11 to Q4 '12
Adjusted EBITDA(1) Bridge – Q4 ‘11 to Q4 ‘12 Fourth quarter’s performance benefited from Middletown and better Indiana Harbor results ($ in millions) $4.2 ($2.7) $3.5 • Lower Black Lung charge • Higher costs • Lower Black $15.9 related to Lung charge and Middletown planned HRSG ($2.6 million) startu
Slide 8: Adjusted EBITDA Bridge – FY '11 to FY '12
Adjusted EBITDA(1) Bridge – FY ‘11 to FY ‘12 Middletown, Indiana Harbor, solid cokemaking operations and lower corporate costs drove the year’s performance ($ in millions) ($2.1) $15.2 $13.5 • Higher cash • Lower • Primarily production relocation, no $7.4 $32.7 driven by costs on coal Middletown str
Slide 9: Diluted EPS Bridge
Diluted EPS Bridge EPS benefited from strong coke business results and lower corporate costs offset by standalone capital structure Q4 2011 to Q4 2012 FY 2011 to FY 2012 ($0.10) ($0.31) ($0.07) ($0.66) ($0.09) $1.73 $0.53 ($0.23) $0.39 $1.40 $0.87 $0.12 Q4 2011 EPS Adjusted Depreciation, Financing C
Slide 10: Domestic Coke Business Summary
Domestic Coke Business Summary (Jewell Coke & Other Domestic Coke) Achieved Adjusted EBITDA per ton of $58 in Q4 ‘12 and $57 for FY ‘12, solidly within our targeted $55 to $60 per ton range Domestic Coke Production Domestic Coke Adjusted EBITDA(1) Per Ton $90 $80 (Tons in thousands) ($ in millions,
Slide 11: Coal Mining Financial Summary
Coal Mining Financial Summary Coal Mining Adjusted EBITDA(1) and Avg. Sales Price/Ton(2) Q4 2012 Adjusted EBITDA up ($ in millions, except per ton amounts) $171 $200 $3.5 million vs. Q4 2011 $159 $167 $165 $166 • Benefited from higher average prices $150 • Lower Black Lung liability Q4 2012 vs. Q4 2
Slide 12: Liquidity Position
Liquidity Position Ended 2012 with strong cash balance and virtually undrawn revolver, providing foundation for future growth ($ in millions) ($40.0) ($3.4) $71.2 $1.3 $23.3 $29.0 Primary Changes vs.. Q3 2012 • Accts Receivable: $21.1m* • Inventories: $29.1m • Accts Payable: $11.9m $239.2 • Accrued
Slide 13: SunCoke Energy Partners, LP Results
SUNCOKE ENERGY PARTNERS, LP RESULTS SXC and SXCP Q4 2012 Earnings Conference Call 12
Slide 14: Post-IPO Organizational Structure
Post-IPO Organizational Structure SunCoke Energy, Inc. What Remains at the Parent? (NYSE: SXC) 3 U.S. coking facilities with ~2.6 million tons of annual capacity 35% interest in Haverhill and Middletown with ~0.6 million tons (2) of annual capacity Operation of 1 Brazil coking facility with ~1
Slide 15: Strategic Roles of SXC and SXCP
Strategic Roles of SXC and SXCP • Develop new coke projects • Grow U.S. & Canada cokemaking business • Grow international business • Steel facing MLP with advantaged cost of capital • Optimize coal • GP & limited partner investor in SXCP SXC and SXCP Q4 2012 Earnings Conference Call 14
Slide 16: SXCP Strengths
SXCP Strengths Modern, High Quality Asset Base Stable Cash Flow from Long-Term Financial Take-or-Pay Flexibility to Contracts and Facilitate Growth Cost Pass-Thru Provisions SXCP Strengths Strong Sponsor Growth and Experienced Opportunities Management Team Contractual Support from Sponsor (Omnibus A
Slide 17: ProForma Liquidity & Debt Metrics
ProForma Liquidity & Debt Metrics (in millions) SunCoke SXCP Consolidated Cash Position at 12/31/12 $ 239 $ - $ 239 Cash Retained From SXCP Offerings (1) 73 79 152 Total ProForma Cash Position $ 312 $ 79 $ 391 Revolver Capacity 150 100 250 Total Liquidity $ 462 $ 179 $ 641 Total Debt(2) $ 495 $ 150
Slide 18: SXCP Q4 2012 Financial Results
SXCP Q4 2012 Financial Results Q4 2012 Adjusted EBITDA and Distribution Coverage in-line with 2013E forecast ($ in millions except where noted) Q4 2012 Coke Production (in '000s of tons) 443 Coke Sales Volumes (in '000s of tons) 440 • Q4‘12 annualized performance $87.2m exceeds 2013E forecast of Fin
Slide 19: Pro Forma Common Unit Coverage
Pro Forma Common Unit Coverage 12 Months Ending ($ and units in millions, except per unit data) December 31, 2013 Adjusted EBITDA attributable to SXCP (1) $88.3 Less: Cash interest ($150 million senior notes @ 7.375% plus $0.5 million revolver commitment fee) 11.6 Accrual for replacement capital exp
Slide 20: 2013 Guidance
2013 GUIDANCE SXC and SXCP Q4 2012 Earnings Conference Call 19
Slide 21: SXC: 2013 Adjusted EBITDA Outlook
(1) SXC: 2013 Adjusted EBITDA Outlook Estimated 2013 results to be impacted by weak coal business, partly offset by continued solid coke operations and VISA SunCoke JV ($ in millions) $0-$10 $0 - $10 ($35-$50) ($5-$10) $266 $205-$230 FY 2012 Domestic International Coke Coal Mining Corporate 2013E Ad
Slide 22: SXC: 2013 Diluted Earnings Per Share Outlook
SXC: 2013 Diluted Earnings Per Share Outlook EPS outlook reflects lower 2013E Adjusted EBITDA(1), accelerated depreciation due to refurbishments and public ownership of SXCP ($0.45- $0.80) ~($0.07) $0.09- ~($0.08) ~($0.14) $1.40 $0.20 ~($0.30) ~$0.10 $0.60- $0.85 $0.30- $0.55 FY 2012 EPS 2013E EBITD
Slide 23: SXC: 2013 Guidance Summary
SXC: 2013 Guidance Summary Original 2013 Revised Guidance: Metric Guidance 2013 Post SXCP IPO Adjusted EBITDA (1) Consolidated $205 – $230 million $205 – $230 million Attributable to SXC Shareholders N/A $165 – $190 million EPS Attributable to SXC Shareholders $0.60 - $0.85 $0.30 – $0.55 (diluted) C
Slide 24: 2013 Priorities
2013 Priorities Grow The Coke Strategically Optimize Operational Excellence Business Assets • Sustain momentum at coke • Domestic • SXCP facilities • Obtain permit for next • Achieve smooth launch, potential U.S. facility governance and operation • Execute Indiana Harbor Plan • Identify and pursue o
Slide 25: Questions
QUESTIONS SXC and SXCP Q4 2012 Earnings Conference Call 24
Slide 26: Investor Relations
Investor Relations: 630-824-1907 www.suncoke.com
Slide 27: Appendix
APPENDIX SXC and SXCP Q4 2012 Earnings Conference Call 26
Slide 28: Definitions
Definitions • Adjusted EBITDA represents earnings before interest, taxes, depreciation, depletion and amortization (“EBITDA”) adjusted for sales discounts and the interest, taxes, depreciation, depletion and amortization attributable to equity earnings in our unconsolidated affiliates. EBITDA reflec
Slide 29: Definitions
Definitions • Distributable Cash Flow equals Adjusted EBITDA less net cash paid for interest expense, on-going capital expenditures, accruals for replacement capital expenditures, and cash distributions to noncontrolling interests. Distributable Cash Flow is a non-GAAP supplemental financial measure
Slide 30: Reconciliations
Reconciliations Reconciliations from Net Income to Adjusted EBITDA $ in millions FY 2012 Q4 2012 Q3 2012 Q2 2012 Q1 2012 FY 2011 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Net Income 102.5 29.0 32.9 24.0 16.6 58.9 7.5 21.6 24.1 5.7 Subtract: Depreciation, depletion and amortization (80.8) (23.3) (18.9) (20.2)
Slide 31: Reconciliations
Reconciliations Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per Ton Other Jewell Domestic International Jewell Domestic $ in millions, except per ton data Coke Coke Coke Coal Corporate Combined Coke FY 2012 Adjusted EBITDA 50.5 198.9 11.9 33.4 (29.0) 265.7 249.4 Sales Volume (thous
Slide 32: Reconciliations
Reconciliations Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per Ton Other Jewell Domestic International Jewell Domestic $ in millions, except per ton data Coke Coke Coke Coal Corporate Combined Coke FY 2011 Adjusted EBITDA 46.1 87.7 13.7 35.5 (44.2) 138.8 133.8 Sales Volume (thousa
Slide 33: 2012 Guidance and Results
2012 Guidance and Results Initial 2012 Metric Guidance 2012 Actual (as of February 2, 2012) Adjusted EBITDA (1) $250 – $280 million $265.7 million EPS (assuming a 22% tax rate) $1.30 – $1.65 $1.40 Capital Expenditures ~ $150 million $84.1 million & Investments Free Cash Flow(2) $50+ million $120 mil
Slide 34: 2012 Free Cash Flow Reconciliation
2012 Free Cash Flow Reconciliation 2012 Free Cash Flow Reconciliation (in millions) FY 2012 Cash from operations $206.1 Less cash used for investing activities (84.1) Less payments to non controlling interest (2.3) Free Cash Flow $119.7 SXC and SXCP Q4 2012 Earnings Conference Call 33
Slide 35: Expected 2013E EBITDA Reconciliation
Expected 2013E EBITDA Reconciliation 2013E Net Income to Adjusted EBITDA Reconciliation 2013E 2013E (in millions) Low High Net Income $43 $60 Depreciation, Depletion and Amortization 97 95 Total financing costs, net 55 55 Income tax expense 3 10 EBITDA $198 $220 Sales discounts 7 7 Adjustment to unc
Slide 36: 2013E Capital Expenditures and Investments
2013E Capital Expenditures and Investments For Year Ended December 31, 2013 • SXC includes approximately ($ in millions) SXC SXCP Consolidated $25m coke and $24m coal On-Going Approx. $49 $9 $58 • SXCP includes 65% of $14m Environmental expected at Haverhill and Approx. - $15 $15 Remediation Middlet
Slide 37: SXCP – Adjusted EBITDA and Distributable Cash Flow Reconciliations, ProForma for SXCP IPO
SXCP – Adjusted EBITDA and Distributable Cash Flow Reconciliations, ProForma for SXCP IPO For the three months ended December 31, ($ in Millions) 2012 Net Income $ 15.3 Add: Income Taxes 7.0 Add: Interest Expense (1) 2.5 Add: Depreciation, depletion and amortization 8.8 Add: Sales discounts - Add: P