Capital expenditures and investments are expected to increase from $70 million in 2012 to approximately $200 million in 2013. This projected increase is driven by approximately $75 million for the refurbishment of the Indiana Harbor facility and environmental remediation projects at the Haverhill and Granite City facilities as well as an estimated $67 million investment in the VISA SunCoke joint venture. Primarily as a result of the VISA SunCoke joint venture investment, the Company anticipates a free cash flow deficit of approximately $65 million for 2013. In addition, SunCoke expects both its 2013 effective tax rate and cash tax rate to be between 17% and 22%.UPCOMING COMMUNICATIONS Members of SunCoke’s senior management team will host the company’s first Investor Day conference on December 11, 2012, at 2 pm EST. Presenters include: Frederick “Fritz” Henderson, Chairman & Chief Executive Officer; Mike Thomson, President & Chief Operating Officer; Dr. John Quanci, Vice President, Technology; Mike Hardesty, Senior Vice President, Sales and Commercial Operations; and Mark Newman, Senior Vice President & Chief Financial Officer. Presentations will be webcast live and archived for replay for a limited time in the Investor Relations section of the Company’s website at www.suncoke.com . DEFINITIONS
- Adjusted EBITDA represents earnings before interest, taxes, depreciation, depletion and amortization (“EBITDA”) adjusted for sales discounts, the deduction of income attributable to noncontrolling interests in our Indiana Harbor cokemaking operations, and the interest, taxes, depreciation, depletion and amortization attributable to equity earnings in our unconsolidated affiliates. EBITDA reflects sales discounts included as a reduction in sales and other operating revenue. The sales discounts represent the sharing with customers of a portion of nonconventional fuel tax credits, which reduce our income tax expense. However, we believe our Adjusted EBITDA would be inappropriately penalized if these discounts were treated as a reduction of EBITDA since they represent sharing of a tax benefit that is not included in EBITDA. Accordingly, in computing Adjusted EBITDA, we have added back these sales discounts. Our Adjusted EBITDA also reflects the deduction of income attributable to noncontrolling interests in our Indiana Harbor cokemaking operations. Our Adjusted EBITDA also includes EBITDA attributable to our unconsolidated affiliates. EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or operating income under GAAP and may not be comparable to other similarly titled measures in other businesses. Adjusted EBITDA does not represent and should not be considered as an alternative to net income as determined by GAAP, and calculations thereof may not be comparable to those reported by other companies. We believe Adjusted EBITDA is an important measure of operating performance and provides useful information to investors because it highlights trends in our business that may not otherwise be apparent when relying solely on GAAP measures and because it eliminates items that have less bearing on our operating performance. Adjusted EBITDA is a measure of operating performance that is not defined by GAAP and should not be considered a substitute for net (loss) income as determined in accordance with GAAP.
- Adjusted EBITDA per Ton represents Adjusted EBITDA divided by tons sold.
- Free Cash Flow equals cash from operations less cash used in investing activities less cash distributions to noncontrolling interests. Management believes Free Cash Flow information enhances an investor’s understanding of a business’ ability to generate cash. Free Cash Flow does not represent and should not be considered an alternative to net income or cash flows from operating activities as determined under GAAP and may not be comparable to other similarly titled measures of other businesses.