SunCoke Energy Inc
For the period ended Jun 30, 2024. Filed Jul 31, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Jul 31, 2024
SXC$9.80+1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-01.
0001514705-24-000008
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0001514705-24-000017
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 85 previous paragraphs and 86 current paragraphs.
57 unchanged; 24 reworded; 5 added; 4 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
Our Convent Marine Terminal (“CMT”) serves certain customers impacted by seaborne export market dynamics. Volumes through CMT are primarily impacted by fluctuations in both European energy needs and benchmark pricing for coal delivery into Europe, which can be impacted by weather conditions, natural gas prices, and global thermal coal supply. Our Kanawha River Terminal (“KRT”) serves two primary domestic markets, metallurgical coal trade and thermal coal trade. Metallurgical markets are primarily impacted by steel prices and blast furnace operating levels whereas thermal markets are impacted by natural gas prices and electricity demand.
Current report
Second Quarter Key Financial Results
Current report
Income Tax Expense. Income tax expense during the three and six months ended June 30, 2024 benefited from the release of valuation allowances established on deferred tax assets related to state net operating loss carryforwards, partially offset by the revaluation of certain deferred tax liabilities due to changes in apportioned state tax rates. See Note 4 to our consolidated financial statements for further detail.
Current report
(4)Energy and other during the three and six months ended June 30, 2024 decreased primarily due to unfavorable energy pricing.
Current report
Net cash used in investing activities decreased by $16.6 million to $33.4 million for the six months ended June 30, 2024 as compared to the corresponding prior year period. The decrease was primarily driven by the absence of capital spending in connection with both an oven rebuild project and the foundry expansion project in the current year period. Additionally, the timing of payments related to ongoing capital expenditures further contributed to the decrease in the current year as compared to the same prior year period. Refer to Capital Requirements and Expenditures below for further detail.
Removed paragraphs (4)
Previous report
During the current year period, the suppression of European energy needs, driven by mild weather conditions, and the stabilization of the global thermal coal supply in the prior year continued to negatively impact export coal volumes through Convent Marine Terminal (“CMT”).
Previous report
First Quarter Key Financial Results
Previous report
Income Tax Expense. Income tax expense during the three months ended March 31, 2024 primarily reflects the absence of foreign taxes of $0.8 million recognized in the prior year period, and the establishment of a valuation allowance in the current year period related to foreign tax credits resulting in expense of $0.5 million. See Note 4 to our consolidated financial statements for further detail.
Previous report
Net cash used in investing activities was $15.1 million and $22.3 million for the three months ended March 31, 2024 and 2023, respectively. Both periods primarily reflect ongoing capital expenditures.
Reworded paragraphs (24)
Previous wording
During the three months ended March 31, 2024, our domestic coke plants continued to operate at full capacity. Higher sales volumes on our long-term, take-or-pay agreements and non-contracted blast coke were driven by the timing of sales. Our long-term, take-or-pay Domestic Coke sales agreements, which largely consume our capacity, are not impacted by the fluctuations of global coke prices. Non-contracted blast coke, which is produced utilizing capacity in excess of that reserved for long-term, take-or-pay Domestic Coke sales agreements, is sold in the global market and can be impacted by fluctuations of global coke prices.
Current wording
During the first half of 2024, our domestic coke plants continued to operate at full capacity. Our long-term, take-or-pay Domestic Coke sales agreements, which largely consume our capacity, are not impacted by the fluctuations of global coke prices. Non-contracted blast coke, which is produced utilizing capacity in excess of that reserved for long-term, take-or-pay Domestic Coke sales agreements, is sold in the global market and can be impacted by fluctuations of global coke prices.
Previous wording
Higher blast coke sales, primarily driven by timing of shipments, were the primary driver of strong operating results during the three months ended March 31, 2024. This increase was offset by unfavorable coal-to-coke yields on our long-term, take-or-pay agreements and lower transloading volumes at CMT. Operating cash flows during the current period primarily reflect an unfavorable year-over-year change in primary working capital. See detailed analysis of the quarter's results throughout this MD&A.
Current wording
Operating results for the first half of 2024 primarily reflect unfavorable coal-to-coke yields on our long-term, take-or-pay agreements and lower blast coke sales volumes. Net income benefited primarily from lower depreciation expense, lower income tax expense and lower net interest expense. Operating cash flows during the current period primarily reflect an unfavorable year-over-year change in primary working capital, primarily due to timing of customer payments. See detailed analysis of the quarter's results throughout this MD&A.
Previous wording
There were no recent developments that occurred, or unusual events that significantly impacted comparability to the prior year period during the three months ended March 31, 2024.
Current wording
There were no recent developments that occurred, or unusual events that significantly impacted comparability to the prior year periods during the three and six months ended June 30, 2024.
Previous wording
The following table sets forth amounts from the Consolidated Statements of Income for the three months ended March 31, 2024 and 2023, respectively:
Current wording
The following table sets forth amounts from the Consolidated Statements of Income for the three and six months ended June 30, 2024 and 2023, respectively:
Previous wording
Sales and Other Operating Revenue and Costs of Products Sold and Operating Expenses. Sales and other operating revenue and costs of products sold and operating expenses increased for thethree months ended March 31, 2024 compared to the same prior year period, primarily driven by higher volumes on our blast coke sales due to the timing of shipments, which was partially offset by the pass-through of lower coal prices in our Domestic Coke segment.
Current wording
Sales and Other Operating Revenue and Costs of Products Sold and Operating Expenses. Sales and other operating revenue and costs of products sold and operating expenses decreased for the three and six months ended June 30, 2024 compared to the same prior year periods, primarily driven by the pass-through of lower coal prices on our long-term, take-or-pay agreements and lower blast coke sales volumes.
Previous wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses were reasonably consistent with the prior year period.
Current wording
Selling, General and Administrative Expenses. Selling, general and administrative expenses during the three and six months ended June 30, 2024 were reasonably consistent with the same prior year periods.
Previous wording
Depreciation and Amortization Expense. Depreciation and amortization expense for the three months ended March 31, 2024 decreased as a result of the expiration of the useful lives of assets in our Domestic Coke segment placed into service in prior periods.
Current wording
Depreciation and Amortization Expense. Depreciation and amortization expense for the three and six months ended June 30, 2024 decreased as a result of the expiration of the useful lives of assets in our Domestic Coke segment placed into service in prior periods.
Previous wording
Interest Expense, Net. Interest expense, net, benefited during the three months ended March 31, 2024 from lower average debt balances in the current year period and higher interest income of $0.4 million as compared to the same prior year period.
Current wording
Interest Expense, Net. Interest expense, net, benefited during the three and six months ended June 30, 2024 from lower average debt balances in the current year periods and higher interest income of $0.9 million and $1.2 million, respectively, as compared to the same prior year periods.
Previous wording
•Logistics consists of CMT, located in Convent, Louisiana, Kanawha River Terminal (“KRT”), located in Ceredo and Belle, West Virginia, and Lake Terminal, located in East Chicago, Indiana. Lake Terminal is located adjacent to our Indiana Harbor cokemaking facility.
Current wording
•Logistics consists of CMT, located in Convent, Louisiana, KRT, located in Ceredo and Belle, West Virginia, and Lake Terminal, located in East Chicago, Indiana. Lake Terminal is located adjacent to our Indiana Harbor cokemaking facility.
Previous wording
(1)Volumes during the three months ended March 31, 2024 increased due to the timing of shipments of our blast coke sales.
Current wording
(1)Volumes during the three months ended June 30, 2024 decreased due to the timing of shipments of our blast coke sales. Volumes during the three and six months ended June 30, 2024 were also negatively impacted by lower coal-to-coke yields.
Previous wording
(2)Sales and other operating revenue decreased primarily as a result of the pass-through of lower coal prices on our long-term, take-or-pay agreements and lower sales pricing on our non-contracted blast coke sales. Adjusted EBITDA was also negatively impacted by the lower sales pricing on our non-contracted blast coke sales, as well as lower coal-to coke yields on our long-term, take-or-pay agreements. These decreases to Adjusted EBITDA were more than offset by the impact of lower coal prices on our non-contracted blast coke sales.
Current wording
(2)Sales and other operating revenue during the three and six months ended June 30, 2024 decreased primarily as a result of the pass-through of lower coal prices on our long-term, take-or-pay agreements. Adjusted EBITDA during the three and six months ended June 30, 2024 was negatively impacted by lower coal-to-coke yields on our long-term, take-or-pay agreements. Additionally, Adjusted EBITDA during the six months ended June 30, 2024 was negatively impacted by the lower sales pricing on our non-contracted blast coke sales, which was partially offset by the impact of lower coal prices on our non-contracted blast coke sales.
Previous wording
(3)Operating and maintenance costs increased as a result of timing of planned maintenance outages.
Current wording
(3)Operating and maintenance costs during the three and six months ended June 30, 2024 increased as a result of timing of planned maintenance outages.
Previous wording
During the three months ended March 31, 2024, sales and other operating revenues, exclusive of intersegment sales, were $20.6 million, compared to $21.1 million, in the corresponding prior year period. Adjusted EBITDA, inclusive of the impact of intersegment transactions, during the three months ended March 31, 2024 was $13.0 million, compared to $13.5 million in the corresponding prior year period. The decreases in Logistics results as compared to the same prior year period primarily reflect lower transloading volumes at CMT and lower ancillary revenue, partially offset by higher transloading pricing.
Current wording
During the three and six months ended June 30, 2024, sales and other operating revenues, exclusive of intersegment sales, were $20.2 million and $40.8 million, respectively, compared to $19.7 million and $40.8 million, respectively, in the corresponding prior year periods. Adjusted EBITDA, inclusive of the impact of intersegment transactions, during the three and six months ended June 30, 2024 was $12.2 million and $25.2 million, respectively, compared to $11.7 million and $25.2 million, respectively, in the corresponding prior year periods. Logistics results during the three and six months ended June 30, 2024, as compared to the same prior year periods reflect higher transloading volumes, partially offset by lower transloading pricing.
Previous wording
During the three months ended March 31, 2024, sales and other operating revenue and Adjusted EBITDA were $8.3 million and $2.4 million, respectively, which was reasonably consistent with the prior year period.
Current wording
During the three and six months ended June 30, 2024, sales and other operating revenue were $9.1 million and $17.4 million, respectively, which was reasonably consistent with the prior year periods. Adjusted EBITDA during three and six months ended June 30, 2024 was $2.5 million and $4.9 million, respectively, which was reasonably consistent with the same prior year periods.
Previous wording
Corporate and Other Adjusted EBITDA was a loss of $8.9 million for the three months ended March 31, 2024, which was reasonably consistent with $9.2 million in the corresponding prior year period.
Current wording
Corporate and Other Adjusted EBITDA was a loss of $9.1 million and $18.0 million, respectively, for the three and six months ended June 30, 2024, which was reasonably consistent with the same prior year periods.
Previous wording
Our primary liquidity needs are to fund working capital and investments, service our debt, maintain cash reserves and replace partially or fully depreciated assets and other capital expenditures. Our sources of liquidity include cash generated from operations, borrowings under our revolving credit facility (“Revolving Facility”) and, from time to time, debt and equity offerings. We believe our current resources are sufficient to meet our working capital requirements for our current business for at least the next 12 months and thereafter for the foreseeable future. As of March 31, 2024, we had $120.1 million of cash and cash equivalents and $350.0 million of borrowing availability under our Revolving Facility.
Current wording
Our primary liquidity needs are to fund working capital and investments, service our debt, maintain cash reserves and replace partially or fully depreciated assets and other capital expenditures. Our sources of liquidity include cash generated from operations, borrowings under our revolving credit facility (“Revolving Facility”) and, from time to time, debt and equity offerings. We believe our current resources are sufficient to meet our working capital requirements for our current business for at least the next 12 months and thereafter for the foreseeable future. As of June 30, 2024, we had $81.9 million of cash and cash equivalents and $350.0 million of borrowing availability under our Revolving Facility.
Previous wording
The following table sets forth a summary of the net cash provided by (used in) operating, investing and financing activities for the three months ended March 31, 2024 and 2023:
Current wording
The following table sets forth a summary of the net cash provided by (used in) operating, investing and financing activities for the six months ended June 30, 2024 and 2023:
Previous wording
Net cash provided by operating activities decreased by $20.2 million to $10.0 million for the three months ended March 31, 2024 as compared to the corresponding prior year period. The decrease primarily reflects an unfavorable year-over-year change in primary working capital, which is comprised of accounts receivable, inventories, and accounts payable, driven by the timing of shipments as compared to the prior year period and the impact of changes in coal pricing, partially offset by the timing of coal purchases.
Current wording
Net cash provided by operating activities decreased by $98.2 million to $0.7 million for the six months ended June 30, 2024 as compared to the corresponding prior year period. The decrease primarily reflects an unfavorable year-over-year change in primary working capital, which is comprised of accounts receivable, inventories, and accounts payable, driven by the timing of customer payments and the timing of coal purchases.
Previous wording
Net cash used in financing activities increased $0.3 million to $14.9 million for the three months ended March 31, 2024 as compared to the corresponding prior year period. This increase in net cash used in financing activities was primarily driven by an increase in dividends paid of $2.3 million as compared to the prior year period, as a result of an increase to the dividend per share amount, which was partially offset by lower cash distributions made to noncontrolling interests of $1.5 million.
Current wording
Net cash used in financing activities decreased by $35.2 million to $25.5 million for the six months ended June 30, 2024 as compared to the corresponding prior year period. The decrease in net cash used in financing activities was primarily driven by lower net repayments of $35.0 million on the Revolving Facility, lower cash distributions made to noncontrolling interests of $2.3 million as well as the absence of repayments on financing obligations of $1.7 million in the current year period. These decreases were offset by an increase to dividends paid of $3.5 million as compared to the prior year period, primarily as a result of an increase in the dividend per share amount.
Previous wording
Additionally, on May 1, 2024, SunCoke's Board of Directors declared a cash dividend of $0.10 per share of the Company's common stock. This dividend will be paid on June 3, 2024, to stockholders of record on May 15, 2024.
Current wording
Additionally, on July 31, 2024, SunCoke's Board of Directors declared a cash dividend of $0.12 per share of the Company's common stock. This dividend will be paid on September 3, 2024, to stockholders of record on August 15, 2024.
Previous wording
Our operations are capital intensive, requiring significant investment to upgrade or enhance existing operations and to meet environmental and operational regulations. The level of future capital expenditures will depend on various factors, including market conditions and customer requirements, and may differ from current or anticipated levels. Material changes in capital expenditure levels may impact financial results, including but not limited to the amount of depreciation, interest expense and repair and maintenance expense.
Current wording
Our operations are capital intensive, requiring significant investment to upgrade or enhance existing operations and to meet environmental and operational regulations. The level of future capital expenditures will depend on various factors, including market conditions, regulatory requirements and customer requirements, and may differ from current or anticipated levels. Material changes in capital expenditure levels may impact financial results, including but not limited to the amount of depreciation, interest expense and repair and maintenance expense.
Previous wording
•Environmental remediation project expenditures required to implement design changes to ensure that our existing facilities operate in accordance with existing environmental permits.
Current wording
•Environmental remediation project expenditures required to implement design changes to ensure that our existing facilities operate in accordance with existing environmental permits or changing regulations.
Previous wording
There have been no significant changes to our accounting policies during the three months ended March 31, 2024. Please refer to our Annual Report on Form 10-K filed for the year ended December 31, 2023 for a summary of these policies.
Current wording
There have been no significant changes to our accounting policies during the six months ended June 30, 2024. Please refer to our Annual Report on Form 10-K filed for the year ended December 31, 2023 for a summary of these policies.
Previous wording
There have been no new accounting standards material to SunCoke Energy that have been adopted during the three months ended March 31, 2024.
Current wording
There have been no new accounting standards material to the Company that have been adopted during the six months ended June 30, 2024.