Suncoke Energy, Inc. · NYSE:SXC
Suncoke Energy — Q3 2014 Earnings Presentation
24 slides from Suncoke Energy's earnings presentation, Oct 24, 2014
Slide 1: SunCoke Energy, Inc. Q3 2014 Earnings Conference Call
SunCoke Energy, Inc. Q3 2014 Earnings Conference Call October 24, 2014
Slide 2: Forward-Looking Statements
Forward-Looking Statements TM This slide presentation should be reviewed in conjunction with the Third Quarter 2014 earnings release of SunCoke Energy, Inc. (SXC) and the conference call held on October 24, 2014 at 11:30 a.m. ET. Some of the information included in this presentation constitutes “for
Slide 3: Q3 2014 Highlights
Q3 2014 Highlights TM Operating Highlights • Delivered solid Coke performance across fleet − Achieved best Domestic Coke Adjusted EBITDA per ton since SXC IPO of $67/ton − Indiana Harbor within targeted production range • Benefited from full quarter of Coal Logistics vs. Q3 ‘13 • Maintained strong s
Slide 4: Basis of Presentation
Basis of Presentation TM Continuing Operations focus of presentation Adjusted EBITDA from Continuing Operations excludes Discontinued Operations and Legacy Costs • Prior period comparisons also adjusted to reflect reporting changes • For a definition and reconciliation of Net Income to Adjusted EBIT
Slide 5: Q3 2014 Earnings Overview
Q3 2014 Earnings Overview TM (1) Adjusted EBITDA from Cont. Ops. Improved Adj. EBITDA from Continuing ($ in millions) Operations • Domestic Coke benefited from better Indiana $68.0 Harbor and Granite City results • Coal Logistics and lower Corporate costs also $54.8 $53.1 $51.1 $60.1 $39.8 key contr
Slide 6: Q3 2014 Financial Results
Q3 2014 Financial Results TM Q3'14 vs. ($ in millions, except volumes and per share) Q3'14 Q3'13 Q3'13 Adj. EBITDA from Continuing Domestic Coke Sales Volumes 1,074 1,084 (10) Operations up 33% Coal Transloading Volumes 4,772 136 4,636 • Total Coke Adj. EBITDA up 15% – Indiana Harbor improved $7.0M
Slide 7: Adjusted EBITDA from Continuing Ops.
Adjusted EBITDA from Continuing Ops. TM Q3 benefited from better Indiana Harbor performance, Coal Logistics and reduced Corporate costs ($ in millions) $3.9 $3.1 $1.8 • Timing of Q3 ‘13 M&A $7.0 • Brazil: $1.0M expense: $2.4M • India: $0.8M • Lower employee costs: $1.4M $68.0 $1.1 • Timing of Coal $
Slide 8: Diluted EPS from Continuing Ops.
Diluted EPS from Continuing Ops. TM EPS benefited from Adjusted EBITDA improvement, partly offset by higher taxes and NCI ($ per share) ($0.05) ($0.05) $0.25 ($0.08) • Coal Logistics Depreciation: ($0.03) • Indiana Harbor Accelerated Depreciation: ($0.02) • SXCP: ($0.04) • DTE Energy: ($0.01) $0.21
Slide 9: Domestic Coke Business Summary
Domestic Coke Business Summary TM Delivered Adjusted EBITDA per ton of $67; Full Year 2014 outlook of $60-$65 per ton Domestic Coke Production Domestic Coke Adjusted EBITDA(1) Per Ton (thousands of tons) ($ in millions, except per ton amounts) 1,081 1,059 1,090 $67/ton 1,056 153 944 155 $61/ton 154
Slide 10: Indiana Harbor Performance
Indiana Harbor Performance TM Demonstrated sequential quarter 2014E Coke Production (thousands of tons) and year-over-year improvement Previous Q4 ‘14 Guidance 285-295 • Q3 ‘14 production in line with guidance 290K – 300K tons 275 • Sustained yields above 65% benchmark 264 Expect to be at low end of
Slide 11: Discontinued Operations Financial Summary
Discontinued Operations Financial Summary TM Q3 ‘14 Adj. EBITDA from Disc. Revised 2014 Adj. EBITDA from Disc. Ops. Operations loss of $3.2M Prior 2014E Coal Segment Guidance ($20M) – ($30M) • Down $3.1M vs. Q3 ‘13 loss of $0.1M Cost allocation to Coal retained at Corporate/Other $8M • Despite impro
Slide 12: Liquidity Position
Liquidity Position TM Ended quarter with solid cash position and revolver capacity $13.3 ($26.4) $22.5 ($26.4) $204.4 $24.9 $58.5 • Inventory: ($14.9M) ($75.0) • Interest Payable: ($6.9M) • Income Taxes: ($6.4M) Attributable ($18.3) $114.8 to SXCP ($4.2) SXCP revolver $26.9 availability: $249M • Dis
Slide 13: SXC Capital Allocation
SXC Capital Allocation TM Modest leverage and expected future dropdown proceeds provide flexibility to pursue growth and return cash to shareholders Capital Available Capital Reinvestment for Deployment • Greenfield projects and M&A Dividend • $0.0585 quarterly dividend per share equivalent to 33% G
Slide 14: YTD 2014 Value Creation Scorecard
YTD 2014 Value Creation Scorecard TM Significant actions taken to unlock shareholder value and transition toward pure-play GP Value Creation Pathways Accomplishments Operations Excellence Recovered from weather-challenged Q1 Improved sequential quarter and year-over-year performance at Indiana
Slide 15: Questions
QUESTIONS SXC Q3 2014 Earnings Call 14
Slide 16: Investor Relations
Investor Relations 630-824-1907 www.suncoke.com
Slide 17: Appendix
APPENDIX SXC Q3 2014 Earnings Call 16
Slide 18: Definitions
Definitions TM Adjusted EBITDA represents earnings before interest, taxes, depreciation, depletion and amortization (“EBITDA”) adjusted for asset and goodwill impairment, costs related to exiting our Coal business, sales discounts and the interest, taxes, depreciation, depletion and amortization att
Slide 19: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA TM ($ in millions) Q3 2014 Q2 2014 Q1 2014 FY 2013 Q4 2013 Q3 2013 Q2 2013 Q1 2013 Net Income/(Loss) $6.4 ($48.6) ($3.8) $50.1 $18.7 $12.3 $12.7 $6.4 Subtract: Net Loss from Discontinued Operations (18.5) (41.3) (6.3) (15.7) (4.5) (3.6) (2.9) (4.7) Net
Slide 20: Reconciliation of Net Income to Adjusted EBITDA from Discontinued Operations
Reconciliation of Net Income to Adjusted EBITDA from Discontinued Operations TM ($ in millions) Q3 2014 Q2 2014 Q1 2014 FY 2013 Q4 2013 Q3 2013 Q2 2013 Q1 2013 Net Loss from Discontinued Operations ($18.5) ($41.3) ($6.3) ($15.7) ($4.5) ($3.6) ($2.9) ($4.7) Depreciation, depletion and amortization 0.
Slide 21: Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per ton
Reconciliation of Segment Adjusted EBITDA and Adjusted EBITDA per ton TM Domestic India Corporate / Continuing Discontinued ($ in millions, except per ton data) Coke Brazil Coke Coke(1) Coal Logistics Other Operations Operations Legacy Costs Combined Q3 2014 Adjusted EBITDA $72.4 $2.5 ($1.3) $3.8 ($
Slide 22: 2014E Guidance Reconciliation
2014E Guidance Reconciliation TM 2014E 2014E ($ in millions) Low High Net Loss ($42) ($20) Subtract: Net Loss from Discontinued Operations (87) (77) Net Income from Continuing Operations $45 $57 Depreciation, depletion and amortization 95 95 Interest expense, net 65 65 Income tax expense 12 15 Legac
Slide 23: Balance Sheet & Debt Metrics
Balance Sheet & Debt Metrics TM Balance SXC Attributable to Attributable to Consolidated SXCP ($ in millions - as of 9/30/14) SXC Cash $115 $27 $88 Revolver Capacity 398 249 149 Total Liquidity $513 $276 $237 Total Debt (Long and Short-term) $652 $412 $240 Net Debt (Total Debt less Cash) 537 385 152
Slide 24: Capital Expenditures & Investments
Capital Expenditures & Investments TM ($ in millions) 2014E(1) Ongoing(2) $50 Environmental Project 45 Indiana Harbor Refurbishment 25 Total CapEx $120 Investments 0 Ongoing: Discontinued Operations (3) 8 Total CapEx & Investments $128 (1) Does not include spending to initiate construction of potent