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
TheStreet Open House

SunCoke Energy, Inc. Reports Third Quarter 2012 Results

In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, SunCoke Energy has included in its filings with the Securities and Exchange Commission cautionary language identifying important factors (but not necessarily all the important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement made by SunCoke Energy. For more information concerning these factors, see SunCoke Energy’s Securities and Exchange Commission filings. All forward-looking statements included in this press release are expressly qualified in their entirety by such cautionary statements. SunCoke Energy does not have any intention or obligation to update any forward-looking statement (or its associated cautionary language) whether as a result of new information or future events, after the date of this press release except as required by applicable law.

   
SunCoke Energy, Inc.
Combined and Consolidated Statements of Income

(Unaudited)

 
 
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2012   2011 2012   2011
(Dollars and shares in millions, except per share amounts)
Revenues
Sales and other operating revenue $ 480.1 $ 403.1 $ 1,421.4 $ 1,113.7
Other income, net   0.4     0.4     1.3     1.1  
Total revenues   480.5     403.5     1,422.7     1,114.8  
Costs and operating expenses
Cost of products sold and operating expenses 388.9 332.8 1,174.6 933.3
Loss on firm purchase commitments 18.5
Selling, general and administrative expenses 20.0 26.0 61.2 64.8
Depreciation, depletion and amortization   18.9     14.7     57.5     42.4  
Total costs and operating expenses   427.8     373.5     1,293.3     1,059.0  
Operating income   52.7     30.0     129.4     55.8  
Interest income—affiliate 1.1 12.5
Interest income 0.1 0.2 0.4 0.3
Interest cost—affiliate (0.4 ) (3.6 )
Interest cost (12.3 ) (8.8 ) (36.4 ) (8.8 )
Capitalized interest       4.6         5.3  
Total financing (expense) income, net   (12.2 )   (3.3 )   (36.0 )   5.7  
Income before income tax expense 40.5 26.7 93.4 61.5
Income tax expense   7.6     5.1     19.9     10.1  
Net income 32.9 21.6 73.5 51.4
Less: Net income (loss) attributable to noncontrolling interests   1.3     3.4     2.3     (1.2 )
Net income attributable to SunCoke Energy, Inc. / net parent investment $ 31.6   $ 18.2   $ 71.2   $ 52.6  
Earnings attributable to SunCoke Energy, Inc. / net parent investment per common share:
Basic $ 0.45 $ 0.26 $ 1.02 $ 0.75
Diluted $ 0.45 $ 0.26 $ 1.01 $ 0.75
Weighted average common shares outstanding:
Basic 70.0 70.0 70.0 70.0
Diluted 70.3 70.0 70.3 70.0
   
SunCoke Energy, Inc.
Consolidated Balance Sheets
 
 
September 30, December 31,
2012 2011
(Unaudited)
(Dollars in millions, except per share amounts)
Assets
Cash and cash equivalents $ 157.8 $ 127.5
Accounts receivable 91.1 66.2
Inventories 189.2 219.7
Deferred income taxes   0.8     0.6  
Total current assets   438.9     414.0  
Investment in Brazilian cokemaking operations 41.0 41.0
Properties, plants and equipment, net 1,380.4 1,391.8
Lease and mineral rights, net 52.6 53.2
Goodwill 9.4 9.4
Deferred charges and other assets   38.1     32.4  
Total assets $ 1,960.4   $ 1,941.8  
Liabilities and Equity
Accounts payable $ 121.0 $ 181.9
Current portion of long-term debt 3.3 3.3
Accrued liabilities 87.7 80.4
Interest payable   8.1     15.9  
Total current liabilities   220.1     281.5  
Long-term debt 720.8 723.1
Accrual for black lung benefits 33.5 33.5
Retirement benefit liabilities 47.3 50.6
Deferred income taxes 359.2 261.1
Asset retirement obligations 14.2 12.5
Other deferred credits and liabilities 21.7 19.6
Commitments and contingent liabilities    
Total liabilities   1,416.8     1,381.9  
Equity
Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no issued and outstanding shares at September 30, 2012 and December 31, 2011
Common stock, $0.01 par value. Authorized 300,000,000 shares; issued and outstanding 69,965,788 and 70,012,702 shares at September 30, 2012 and December 31, 2011, respectively 0.7 0.7
Treasury stock, 592,197 shares at September 30, 2012 and no shares at December 31, 2011 (9.1 )
Additional paid-in capital 433.0 511.3
Accumulated other comprehensive loss (8.9 ) (6.5 )
Retained earnings   91.2     20.0  
Total SunCoke Energy, Inc. stockholders’ equity 506.9 525.5
Noncontrolling interests   36.7     34.4  
Total equity   543.6     559.9  
Total liabilities and equity $ 1,960.4   $ 1,941.8  
   
SunCoke Energy, Inc.
Combined and Consolidated Statements of Cash Flows

(Unaudited)

 
 
For the Nine Months
Ended September 30,

2012

2011
(Dollars in millions)
Cash Flows from Operating Activities:
Net income $ 73.5 $ 51.4
Adjustments to reconcile net income to net cash provided by operating activities:
Loss on firm purchase commitments 18.5
Depreciation, depletion and amortization 57.5 42.4
Deferred income tax expense 39.2 14.6
Payments (in excess of) less than expense for retirement plans (6.2 ) 0.3
Share-based compensation expense 5.1
Changes in working capital pertaining to operating activities:
Accounts receivable (24.9 ) (4.2 )
Inventories 27.0 (112.8 )
Accounts payable and accrued liabilities (50.7 ) 51.1
Interest payable (7.8 )
Income taxes payable (23.6 ) 0.6
Other   (11.3 )   (3.2 )
Net cash provided by operating activities   77.8     58.7  
 
Cash Flows from Investing Activities:
Capital expenditures (40.6 ) (184.2 )
Acquisition of business, net of cash received       (37.6 )
Net cash used in investing activities   (40.6 )   (221.8 )
 
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt 698.5
Debt issuance costs (18.9 )
Repayment of long-term debt (2.5 ) (0.7 )
Proceeds from exercise of stock options 4.7
Repurchase of common stock (9.1 )
Purchase of noncontrolling interest in Indiana Harbor facility (34.0 )
Decrease in advances from affiliate (412.8 )
Repayments of notes payable assumed in acquisition (2.3 )
Increase in payable to affiliate 5.3
Cash distributions to noncontrolling interests in cokemaking operations       (1.2 )
Net cash (used in) provided by financing activities   (6.9 )   233.9  
Net increase in cash and cash equivalents 30.3 70.8
Cash and cash equivalents at beginning of period   127.5     40.1  
Cash and cash equivalents at end of period $ 157.8   $ 110.9  
   

Segment Financial and Operating Data

The following tables set forth the sales and other operating revenues and Adjusted EBITDA of our segments and operating data for the three and nine months ended September 30, 2012 and 2011.

 
 
For the Three Months For the Nine Months
Ended September 30, Ended September 30,

2012

 

2011

2012

 

2011

(Dollars in millions)
Sales and other operating revenues:
Jewell Coke $ 74.2 $ 71.0 $ 216.8 $ 197.1
Other Domestic Coke 388.7 310.0 1,139.8 857.3
International Coke 8.3 9.4 27.3 29.1
Coal Mining 8.9 12.7 37.5 30.2
Coal Mining intersegment sales 56.2 44.5 152.5 129.5
Elimination of intersegment sales   (56.2 )   (44.5 )   (152.5 )   (129.5 )
Total $ 480.1   $ 403.1   $ 1,421.4   $ 1,113.7  
Adjusted EBITDA (1) :
Jewell Coke $ 13.6 $ 13.9 $ 41.1 $ 35.5
Other Domestic Coke 54.9 34.3 143.6 68.1
International Coke 0.9 1.7 1.7 3.5
Coal Mining 10.7 9.2 27.4 33.0
Corporate and Other   (7.7 )   (14.3 )   (20.1 )   (31.0 )
Total $ 72.4   $ 44.8   $ 193.7   $ 109.1  
Coke Operating Data:
Capacity Utilization (%)
Jewell Coke 98 98 98 98
Other Domestic Coke   104     105     104     100  
Total 103 104 103 100
Coke production volumes (thousands of tons):
Jewell Coke 177 179 528 530
Other Domestic Coke (2)   920     785     2,732     2,217  
Total 1,097 964 3,260 2,747
International Coke production—operated facility (thousands of tons) 310 373 970 1,149
Coke sales volumes (thousands of tons):
Jewell Coke 183 191 540 536
Other Domestic Coke (3)   933     777     2,728     2,231  
Total   1,116     968     3,268     2,767  
Domestic Coke Adjusted EBITDA per ton (4) $ 61.38 $ 49.79 $ 56.52 $ 37.44
Coal Operating Data (5) :
Coal sales volumes (thousands of tons):
Internal use 322 272 862 865
Third parties   70     99     268     226  
Total   392     371     1,130     1,091  
Coal production (thousands of tons) 349 340 1,125 1,015
Purchased coal (thousands of tons) 10 22 33 97
Coal sales price per ton (excludes transportation costs) (6) $ 165.17 $ 154.85 $ 167.71 $ 155.87
Coal cash production cost per ton (7) $ 142.56 $ 132.08 $ 143.12 $ 124.77
Purchased coal cost per ton (8) $ 106.12 $ 78.79 $ 88.09 $ 108.52
Total coal production cost per ton (9) $ 145.42 $ 133.73 $ 150.52 $ 130.22
    (1)     See definition of Adjusted EBITDA and reconciliations elsewhere in this release.
(2) Includes Middletown production volumes of 154 thousand and 449 thousand tons for the three and nine months ended September 30, 2012, respectively.
(3) Excludes 15 thousand and 42 thousand tons of consigned coke sales in three and nine months ended September 30, 2012, respectively. Includes Middletown sales volumes of 156 thousand and 445 thousand tons for the three and nine months ended September 30, 2012, respectively.
(4) Reflects Jewell Coke plus Other Domestic Coke Adjusted EBITDA divided by U.S. coke sales volumes.
(5) Includes production from Company and contract-operated mines.
(6) Includes sales to affiliates.
(7) Mining and preparation costs, excluding depreciation, depletion and amortization, divided by coal production volume.
(8) Costs of purchased raw coal divided by purchased coal volume.
(9) Cost of mining and preparation costs, purchased raw coal costs, and depreciation, depletion and amortization divided by coal sales volume. Depreciation, depletion and amortization per ton were $10.94 and $8.96 for the three months ended September 30, 2012 and 2011, respectively, and $11.19 and $8.45 for the nine months ended September 30, 2012 and 2011, respectively.
   
SunCoke Energy, Inc.
 
 
Reconciliations of Adjusted EBITDA to Net Income
 
 
Three Months Ended Nine Months Ended
September 30 September 30
2012   2011 2012   2011
(Dollars in millions)
Adjusted EBITDA $ 72.4 $ 44.8 $ 193.7 $ 109.1
Subtract: Depreciation, depletion and amortization 18.9 14.7 57.5 42.4
Subtract (Add): Financing expense (income), net 12.2 3.3 36.0 (5.7 )
Subtract: Income tax expense 7.6 5.1 19.9 10.1
Subtract: Sales discount provided to customers due to sharing of nonconventional fuel tax credits 2.1 3.5 9.1 9.7
Subtract (Add) : Net loss (income) attributable to noncontrolling interest   (1.3 )   (3.4 )   (2.3 )   1.2  
Net income $ 32.9   $ 21.6   $ 73.5   $ 51.4  
   

Reconciliation of Estimated 2012 Adjusted EBITDA to Net Income

 
 
Low High
(Dollars in millions)   (Estimated)   (Estimated)
Estimated 2012 Net Income $94 $104
Depreciation, depletion and amortization 80 78
Total financing costs, net 48 47
Income tax expense   25   34
Estimated 2012 EBITDA   $247   $263
Sales discounts 11 12
Noncontrolling interests   (3)   (5)
Estimated 2012 Adjusted EBITDA   $255   $270
   

Reconciliation of 2012 Estimated Free Cash Flow

 
 
2012
(Dollars in millions)       (Estimated)
Estimated Cash Provided by Operations   In excess of   $ 179
Estimated cash used in investing activities Approx. (75)
Estimated distribution to noncontrolling interests   Approx.   (4)
Estimated Free Cash Flow   In excess of   $ 100




5 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 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

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