This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

SunCoke Energy, Inc. Reports Third Quarter 2012 Results

The climb in operating income and Adjusted EBITDA, which grew 76 percent and 62 percent, respectively, reflected the contribution of our Middletown facility, lower corporate costs and continued solid performance across all our cokemaking facilities.

The 74 percent increase in net income attributable to shareholders in third quarter 2012 was led by the contribution of our Middletown facility and lower corporate costs. This increase was partly offset by financing costs related to our standalone corporate structure.

SEGMENT RESULTS

Jewell Coke

The Jewell Coke segment consists of our cokemaking operations in Vansant, Virginia. Substantially all of the metallurgical coal used at our Jewell cokemaking facility is supplied from our coal mining operations. Beginning in first quarter 2012, the intersegment coal costs charged to the Jewell Coke segment are reflective of the contract price Jewell Coke charges its customer. Prior year periods have been adjusted to reflect this change.

             
  Three months ended September 30,
    Increase/
(In millions, except per ton amounts)   2012   2011   (Decrease)
Segment Revenues $ 74.2 $ 71.0 $ 3.2
Adjusted EBITDA (1) $ 13.6 $ 13.9 $ (0.3 )
Sales Volumes (in thousands of tons) 183 191 (8 )
Adjusted EBITDA per Ton (1)   $ 74.32   $ 72.77   $ 1.55  

(1) See definition of Adjusted EBITDA and Adjusted EBITDA per Ton and reconciliation elsewhere in this release.

  • Revenues increased by $3.2 million in third quarter 2012 due to the pass-through of higher coal costs partly offset by lower coke sales volumes. Sales volumes were down due to the timing of shipments to our customer.
  • Adjusted EBITDA declined slightly in third quarter 2012 due to lower coke sales volumes.

Other Domestic Coke

Other Domestic Coke consists of cokemaking facilities and heat recovery operations at our Indiana Harbor, Haverhill, Granite City and Middletown plants. The Middletown cokemaking facility commenced operations in October 2011. On September 30, 2011, we increased our ownership interest in the partnership that owns the Indiana Harbor cokemaking facility from 66 percent to 85 percent by acquiring the interest held by one of the unaffiliated third-party partners.

             
  Three months ended September 30,
(In millions, except per ton amounts)   2012   2011   Increase
Segment Revenues $ 388.7   $ 310.0   $ 78.7
Adjusted EBITDA (1)(2) $ 54.9 $ 34.3 $ 20.6
Sales Volumes (in thousands of tons) 933 777 156
Adjusted EBITDA per Ton (1)   $ 58.84   $ 44.14   $ 14.70

(1) See definitions of Adjusted EBITDA and Adjusted EBITDA per Ton and reconciliations elsewhere in this release.

(2) Excludes income (loss) attributable to noncontrolling interest in Indiana Harbor.

  • Our Middletown facility contributed $76.7 million to segment revenues and $16.9 million to segment Adjusted EBITDA in third quarter 2012.
  • Excluding Middletown, segment Adjusted EBITDA benefited from solid performance across all our facilities reflecting better coal-to-coke yield and operating expense recovery versus third quarter 2011, partly offset by lower energy sales. Our increased ownership interest in our Indiana Harbor facility also benefited Adjusted EBITDA by approximately $1.6 million by reducing income attributable to noncontrolling interest.

International Coke

International Coke consists of a cokemaking facility in Vitória, Brazil, which we operate for a Brazilian affiliate of ArcelorMittal. International Coke earns operating and technology licensing fees based on production, and recognizes a dividend on its preferred stock investment, generally in the fourth quarter, assuming certain minimum production levels are achieved at the facility.

  • Segment Adjusted EBITDA declined from $1.7 million to $0.9 million primarily due to lower sales volumes.

Coal Mining

Coal Mining consists of our metallurgical coal mining activities conducted in Virginia and West Virginia. A substantial portion of the metallurgical coal produced by our coal mining operations is sold to our Jewell Coke segment for conversion into metallurgical coke. Beginning in first quarter 2012, intersegment coal revenues for sales to the Jewell Coke segment are reflective of the contract price Jewell Coke charges its customer. Prior year periods have been adjusted to reflect this change.

             
  Three months ended September 30,
    Increase/
(In millions, except per ton amounts)   2012   2011   (Decrease)
Total Segment Revenues (including sales to affiliates) $ 65.1 $ 57.2 $ 7.9
Segment Revenues (excluding sales to affiliates) $ 8.9 $ 12.7 $ (3.8 )
Adjusted EBITDA (1) $ 10.7 $ 9.2 $ 1.5
Coal Production (in thousands of tons) 349 340 9
Sales Volumes (in thousands of tons) (2) 392 371 21
Sales Price per ton (excludes transportation costs) (3) $ 165.17 $ 154.85 $ 10.32
Adjusted EBITDA per Ton (1)   $ 27.30   $ 24.80   $ 2.50  

(1) See definitions of Adjusted EBITDA and Adjusted EBITDA per Ton and reconciliations elsewhere in this release.

(2) Includes production from Company and contract-operated mines.

(3) Includes sales to affiliates.

  • Coal Mining segment revenues benefited from higher average sale prices and higher internal sales volumes. The higher average sales price reflects a favorable shift in mix with mid-volatile coal representing a larger proportion of coal sold in third quarter 2012.
  • The increase in Adjusted EBITDA reflects higher sales of mid-volatile coal offset by increased production costs reflecting a change in mix of coal mined as mid-volatile coal, which generally costs more to mine, represented a larger portion of third quarter 2012 production. Additionally, the current period benefited by approximately $1.3 million due to a favorable fair value adjustment related to our Harold Keene Coal Co., Inc. contingent consideration arrangement.

Corporate and Other

Corporate expenses declined by $6.6 million to $7.7 million in third quarter 2012. The decline primarily reflects favorable comparison to third quarter 2011, which included $2.5 million of Middletown costs, $1.9 million in lower charges from Sunoco and $1.7 million of restructuring costs.

2 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs