Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Goldman Sachs Chicago Small Cap Summit 2012
33 slides from Suncoke Energy's conference presentation, Aug 1, 2012
Slide 1: Goldman Sachs Chicago Small Cap Summit
Exhibit 99.1 Goldman Sachs Chicago Small Cap Summit August 1, 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 SunCoke Business metallurgical coke in the Americas Segments – Coke is an essential ingredient in blast (excluding corporate costs) furnace production of steel Int'l Coke, Coal mining operations represents 1% Coal Jewell Mining, ~15% of Adjusted EBITDA (
Slide 4: The Leading Independent Cokemaker
The Leading Independent Cokemaker More than doubled capacity since SunCoke 2006 with four new plants Cokemaking Capacity (In thousands of tons) Proven ability to permit,design, construct and start up greenfield 5,940 developments and work 5,390 5,390 internationally 4,740 4,190 Industry-leading envi
Slide 5: SunCoke Operations
SunCoke Operations Our cokemaking operations are strategically located in proximity to our customers’ integrated steelmaking facilities Indiana Middletown Harbor Granite City Haverhill 1 Haverhill 2 Jewell Coal Coke Mining 114M tons of reserves Our metallurgical coal Vitoria, mining business is loca
Slide 6: SunCoke's Cokemaking Technology
SunCoke’s Cokemaking Technology SunCoke EnergyGoldman - Sachs Small Cap Summit 6
Slide 7: 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 MACT standard for new batteries compounds Power Generation Cogenerates power Power consuming process Hazardous
Slide 8: SunCoke's Value Proposition
SunCoke‘s Value Proposition High Quality & Reliable Provide an assured supply of coke to steelmakers 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 9: 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 Customer Permits and Approvals Energ
Slide 10: Q2 2012 Earnings Overview
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 $0.17 – Strong operations at other facilities Coal action plan progressing 2011 2012 – Difficu
Slide 11: Adjusted EBITDA Bridge – Q2 2011 to Q2 2012
Adjusted EBITDA (1) Bridge –Q2 2011 to Q2 2012 Quarter’s performance led by strong Coke business results ($ in millions) $4.9 ($2.2) $11.1 $14.0 $65.5 $37.7 Q2 2011 Middletown Coke Business Coal Mining Corporate Q2 2012 Adjusted (Jewel/Haverhill/ Costs Adjusted EBITDA (1) Indiana Harbor/ EBITDA (1)
Slide 12: 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 (1) For a definition of EBITDA and Adjusted EBITDA/Ton and reconciliations, please see th
Slide 13: Domestic Coke Business Outlook
Domestic Coke Business Outlook (1) • ExpectdomesticcokeAdjustedEBITDA perton to be $55 - $60 forbalanceof 2012 • Based on current sentiment, 2012 coke sales volume expected to be in middle of range Estimated Estimated ($ in millions, except as noted) Low High Domestic Coke Adjusted EBITDA (1) Per To
Slide 14: Coal Mining Financial Summary
Coal Mining Financial Summary (1) Coal Mining Adjusted EBITDA 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. &
Slide 15: 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) $9 -$14 $5 -$15 $95 -$110 $250 -$280 $141 2011 Coke Business Coal Mining Corporate 2012 Adjusted Adjusted Costs EBITDA(1) EBITDA(1) (1) For a definition of Adjus
Slide 16: 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 $85million & Investments (1) Free Cash Flow $100 million + Cash Tax Rate 10% –15% Effective Tax Rate 20% –24% Corporate Costs $30 million –
Slide 17: Strategies for Enhancing Shareholder Value
Strategies for Enhancing Shareholder Value Operational Grow The Coke Strategically Optimize Excellence Business Assets Maintain focus on details U.S. & Canada Coke MLP and discipline of coke and Continue permitting Execute plan to place a coal mining operations efforts for next portion of our potent
Slide 18: Operations Excellence
Operations Excellence The SunCoke Way Safety & Environment Execution Productivity Sustain and enhance Leverage operating know- Rigorous focus on the details top quartile safety how and technology to and discipline performance continuously improve yields of coke and and operating coal mining operatio
Slide 19: Grow the Coke Business: U.S. and Canada
Grow the Coke Business: U.S. and Canada SunCoke believes it has the opportunity to displace higher cost coke imports ChineseCokePricevs.Representative SunCoke Price U.S. and Canada Coke Imports (US$/ton) SunCoke(1) Chinese (Tons in millions) Q2 2012: $395 $449 2011 Average: $371 $454 2008-2010 Avera
Slide 20: Coke Price Comparison
Coke Price Comparison SunCoke’s coke is highly competitive on price, quality and reliability versus Chinese imported coke Delivered Coke Prices $/ton - $551 $144 $399 $395 $407 Jewel Other Chinese Domestic Coke Coke SunCoke Coke Price Chinese Coke Price FOB Ex. Export Tax Chinese Export Tax Premium
Slide 21: 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 Average Age %of U.S. & Canada coke production SunCoke 43 18% DTE 5% 27% Other Merchant 24% & Foundry 6% Integrated Steel 9 Imports Produce
Slide 22: Grow the Coke Business: U.S. and Canada
Grow the Coke Business: U.S. and Canada BF/BOF Crude Steel Production Impact of low natural gas prices on and Blast Furnace Coke Demand coke demand In million tons 2010 Coke Rate: – Displaces coke in blast furnace 894 lbs/thm 2015E Coke Rate: 800 lbs/thm – Natural gas cannot completely replace coke;
Slide 23: Grow the Coke Business: U.S. and Canada
Grow the Coke Business: U.S. and Canada U.S. and Canada Coke Market Opportunity SunCoke’s Strategy in millions of tons 5 Permit a potential new 2 660k/TPY U.S. plant Import displacement (likely multi-customer) 3 Aging battery replacement Explore acquisition of existing coke assets Expected demand op
Slide 24: 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 25: Master Limited Partnership
Master Limited Partnership Board approved formation of MLP Expected Assets/Structure – A portion of our interests in Haverhill and Middletown – SXC to own General Partner, incentive distribution rights and a portion of the partnership units Haverhill Operations Proceeds to SXC – Expected uses will i
Slide 26: Appendix
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Slide 27: Definitions
Definitions • AdjustedEBITDArepresentsearningsbeforeinterest,taxes,depreciation,depletionandamortization(“EBITDA”) adjusted for sales discounts and the deduction of income attributable to non-controlling interests in our Indiana Harborcokemakingoperations.EBITDAreflectssalesdiscountsincludedasa redu
Slide 28: Reconciliations
Reconciliations Reconciliations from Adjusted Operating Income and Adjusted EBITDA to Net Income $ in millions Q2 2012 Q1 2012 Q4 2011 Q3 2011 Q2 2011 Q1 2011 Adjusted Operating Income 46.6 37.1 14.9 33.5 24.6 7.4 Net Income (Loss) attributable to Noncontrolling Interest 1.3 (0.3) (0.5) 3.4 1.6 (6.2
Slide 29: 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 30: 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 31: 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 32: 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 33: Free Cash Flow Reconciliations
Free Cash Flow Reconciliations First Half 2012 Free Cash Flow Reconciliation 1 st 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 million
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