SunCoke Energy Inc
For the period ended Dec 31, 2024. Filed Feb 21, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 21, 2025
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-K
Period ended 2023-12-31; filed 2024-02-22.
0001514705-24-000005
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-21.
0001514705-25-000004
Item 7. 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 95 previous paragraphs and 101 current paragraphs.
56 unchanged; 32 reworded; 13 added; 7 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 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 (13)
Current report
•Granite City Contract Extension. In October 2024, the Granite City long-term, take-or-pay agreement with United States Steel Corporation (“U.S. Steel”) was extended through June 30, 2025, with an option for U.S. Steel to extend for an additional six months. Under the terms of the agreement, Granite City will supply 295 thousand tons of coke to U.S. Steel during the initial six month term. The terms of the extension includes a turn down fee, but results in significantly lower overall economics compared to the current long-term, take-or-pay agreement. Other key provisions of the agreement, including the pass-through of coal costs, remain unchanged.
Current report
Items Impacting Comparability
Current report
•U.S. Department of Labor’s Division of Coal Mine Workers Compensation (“DCMWC”) Regulatory Exemption. In August 2024, the Company reached an agreement with the DCMWC and made a payment of $36.0 million to extinguish the majority of its self-insured federal black lung liabilities. As a result of the agreement, the Company recognized a $9.5 million pre-tax gain within selling, general and administrative expenses on the Consolidated Statements of Income during the year ended December 31, 2024. The agreement resulted in a reduction of $45.5 million of the Company's black lung liability on the Consolidated Balance Sheets. See Note 12 to our consolidated financial statements for further detail.
Current report
Selling, General and Administrative Expenses. The decrease in selling, general and administrative expense was primarily impacted by the recognition of a $9.5 million gain, which was the result of the extinguishment of certain liabilities related to our legacy coal mining business. See Note 12 to our consolidated financial statements for further detail.
Current report
(1)Volumes during 2024 were negatively impacted by lower coal-to-coke yields. These decreases were partially and completely offset for Revenues and Adjusted EBITDA, respectively, by higher volumes on our foundry coke sales and higher volumes at certain of our cokemaking facilities driven by the absence of oven rebuilds in the current year period.
Current report
(3)Operating and maintenance costs primarily benefited in the current year period from lower planned outage costs and the absence of oven rebuilds.
Current report
(1)Volumes primarily increasedas a result of higher demand and transloading volumes at KRT.
Current report
(3)Revenues and Adjusted EBITDA increased as a result of favorable ancillary revenue.
Current report
Corporate and Other Adjusted EBITDA increased $10.2 million, or 31 percent, to a loss of $22.2 million in 2024 compared to a loss of $32.4 million in 2023. This increase was primarily driven by the recognition of a $9.5 million gain, which was the result of the extinguishment of certain liabilities related to our legacy coal mining business. See Note 12 to our consolidated financial statements for further detail.
Current report
On February 1, 2013, SunCoke obtained commercial insurance for state and federal black lung claims, in excess of a deductible, for employees with a last date of employment after that date. For claims based on employment that ended prior to February 1, 2013, SunCoke was reauthorized by the U.S. Department of Labor’s Division of Coal Mine Workers Compensation (“DCMWC”) to self-insure its black lung liabilities for $8.4 million. On February 21, 2020, DCMWC made an initial security determination to increase the amount of SunCoke’s collateral requirement for self-insured claims to $40.4 million. The Company appealed the security determination to the DCMWC. On August 13, 2024, the Company and DCMWC agreed that the Company would make a lump sum payment of $36.0 million to satisfy its self-insured federal black lung liabilities, with limited exceptions estimated to be approximately $1.4 million. In exchange, the DCMWC agreed to permanently assume responsibility for payment of black lung benefits for claims based on employment that ended prior to February 1, 2013, and SunCoke received a certificate of exemption that eliminates the Company’s responsibility for future payments arising from claims based on employment that ended prior to February 1, 2013, excluding limited exceptions estimated to be approximately $1.4 million. As a result of the agreement, the Company no longer maintains any collateral to self-insure its former black lung liabilities incurred prior to February 1, 2013. Additionally, on January 19, 2023, the Department of Labor proposed a new rule that would require self-insured operators to post collateral in the amount of 120 percent of the company's total expected lifetime black lung liabilities as determined by the DCMWC. If finalized, the new rule would not apply to SunCoke. See further discussion in Note 12 to our consolidated financial statements.
Current report
On February 1, 2013, SunCoke obtained commercial insurance for state and federal black lung claims, in excess of a deductible, for employees with a last date of employment after that date. For claims based on employment that ended prior to February 1, 2013, SunCoke was reauthorized by the U.S. Department of Labor’s Division of Coal Mine Workers Compensation (“DCMWC”) to self-insure its black lung liabilities for $8.4 million. On February 21, 2020, DCMWC made an initial security determination to increase the amount of SunCoke’s collateral requirement for self-insured claims to $40.4 million. The Company appealed the security determination to the DCMWC. On August 13, 2024, the Company and DCMWC agreed that the Company would make a lump sum payment of $36.0 million to satisfy its self-insured federal black lung liabilities, with limited exceptions estimated to be approximately $1.4 million. In exchange, the DCMWC agreed to permanently assume responsibility for payment of black lung benefits for claims based on employment that ended prior to February 1, 2013, and SunCoke received a certificate of exemption that eliminates the Company’s responsibility for future payments arising from claims based on employment that ended prior to February 1, 2013, excluding limited exceptions estimated to be approximately $1.4 million. This agreement resulted in a reduction of $45.5 million of the Company's black lung liability, and a one-time gain of $9.5 million within selling, general and administrative expenses on the Consolidated Statements of Income during the year ended December 31, 2024. The Company no longer maintains any collateral to self-insure its former black lung liabilities incurred prior to February 1, 2013. The Company’s commercially insured federal and state black lung liabilities are not impacted by this agreement.
Current report
(1)Payments for the year ended December 31, 2024 represent $4.4 million of black lung benefit payments made by the Company and the $36.0 million payment made to the DCMWC related to the regulatory exemption detailed above.
Current report
(2)The benefit for the year ended December 31, 2024 includes $5.4 million of accretion expense of the black lung liability and a $9.5 million gain related to the regulatory exemption detailed above. The $9.5 million gain is included in selling, general and administrative expense on the Consolidated Statement of Income.
Removed paragraphs (7)
Previous report
•2023 Indiana Harbor Contract Renewal. In April 2023, the Indiana Harbor long-term, take-or-pay agreement with Cliffs Steel was extended to September 30, 2035. Under the extended agreement, Indiana Harbor will continue to supply 1,220 thousand tons to Cliffs Steel annually. Reimbursement of certain operating and maintenance expenses under the contract are fixed subject to annual adjustment based on an inflation index. Other key provisions of the agreement, including the pass-through of coal costs, remain unchanged.
Previous report
Selling, General and Administrative Expenses. The decrease in selling, general and administrative expense primarily reflects lower employee related expenses, lower cost of professional services and lower transaction costs incurred as part of the granulated pig iron project. These lower costs were partially offset by valuation adjustments primarily as a result of changes in discount rates on certain legacy liabilities, which increased legacy costs by $5.7 million as compared to the prior year.
Previous report
(1)Higher volumes on our long-term, take-or-pay agreements increased both revenues and Adjusted EBITDA during 2023. These higher volumes were mostly offset by lower volumes on non-contracted blast coke sales.
Previous report
(1)Volumes decreased as a result of lower demand at CMT driven by weakened thermal coal markets and the short-term idling of a customer mine during the fourth quarter of 2023. Additionally, Adjusted EBITDA in the current year period reflects the absence of DRT volumes.
Previous report
(3)Revenues and Adjusted EBITDA decreased as a result of unfavorable ancillary revenue, which was a result of lower volumes at CMT. This decrease in Adjusted EBITDA was more than offset by the absence of costs associated with DRT in the current year period.
Previous report
Corporate and Other Adjusted EBITDA decreased $2.5 million, or 8 percent, to a loss of $32.4 million in 2023 compared to a loss of $29.9 million in 2022. This decrease was primarily driven by valuation adjustments as a result of changes in discount rates on certain legacy liabilities, which increased legacy costs by $5.7 million, partially offset by lower employee related expenses and lower cost of professional services in the current year period.
Previous report
(1)Black lung expense (benefit) incurred in excess of annual accretion of the black lung liability reflects the impact of changes in discount rates, current filing and approval rate assumptions and/or other changes in our actuarial assumptions.
Reworded paragraphs (32)
Previous wording
Operating results during the year ended December 31, 2023 primarily reflects lower margin on our non-contracted blast coke sales, unfavorable energy pricing at our Haverhill facility and lower transloading volumes in our Logistics segment. These decreases were partially offset by favorable coal-to-coke yields on our long-term, take-or-pay agreements and favorable pricing on our foundry coke sales. Net income for the current year period was further impacted by the establishment of a valuation allowance on deferred tax assets attributable to existing foreign tax credit carryforwards. Operating cash flows during the current period primarily reflect a favorable year-over-year change in primary working capital.
Current wording
Operating results during the year ended December 31, 2024 primarily reflect higher transloading volumes and pricing in our Logistics segment, as well as the extinguishment of certain black lung liabilities during the current year period, which resulted in the recognition of a $9.5 million pre-tax gain. These increases were partially offset by unfavorable coal-to-coke yields on our long-term, take-or-pay agreements within our Domestic Coke segment. Operating cash flows during the current period primarily reflect an unfavorable year-over-year change in primary working capital and a one-time payment of $36.0 million related to the extinguishment of certain black lung liabilities.
Previous wording
We returned meaningful capital to our shareholders through the declaration and payment of a dividend during each quarter of 2023, increasing from $0.08 per share during the first half of the year to $0.10 per share during the second half of the year, representing a quarterly increase of 25 percent. Additionally, we reduced total debt by approximately $44 million in 2023.
Current wording
We returned meaningful capital to our shareholders through the declaration and payment of a dividend during each quarter of 2024, increasing from $0.10 per share during the first half of the year to $0.12 per share during the second half of the year, representing a quarterly increase of 20 percent.
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 in 2023 as compared to 2022, primarily driven by the pass-through of higher coal prices in our Domestic Coke segment. Additionally, revenues further benefited from higher volumes on our long-term, take-or-pay agreements. These increases to sales and other operating revenue were partially offset by lower volumes and unfavorable pricing on our non-contracted blast coke sales.
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 in 2024 as compared to 2023, primarily driven by the pass-through of lower coal prices on our long-term, take-or-pay agreements.
Previous wording
Depreciation and Amortization Expense. Depreciation and amortization expense was reasonably consistent with the prior year period.
Current wording
Depreciation and Amortization Expense. Depreciation and amortization expense decreased in 2024 as compared to 2023 as a result of the expiration of the useful lives of assets in our Domestic Coke segment, which were placed into service in prior periods.
Previous wording
Interest Expense, net. Interest expense, net, benefited in 2023 from lower average debt balances during the current year period and higher interest income of $2.0 million.
Current wording
Interest Expense, net. Interest expense, net, benefited in 2024 from lower average debt balances during the current year period and higher interest income of $2.6 million.
Previous wording
Income Tax Expense. Income tax expense during 2023 primarily reflects the establishment of a valuation allowance on deferred tax assets attributable to existing foreign tax credit carryforwards, which was a portion of a valuation allowance released during the third quarter of 2022, resulting in $8.4 million of deferred tax expense. The establishment of the valuation allowance during 2023 was the result of changes in tax regulations. See Note 4 to our consolidated financial statements for further detail.
Current wording
Income Tax Expense. Income tax expense during 2024 benefited from the absence of $8.4 million of deferred tax expense recorded in the prior year related to the establishment of a valuation allowance on deferred tax assets attributable to existing foreign tax credit carryforwards, as a result of changes in tax regulations. Additionally, the current year period further 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.
Previous wording
The operations of each of our reportable segments are described in Part I of this Annual Report on Form 10-K. The Company elected to combine Dismal River Terminal (“DRT”) operations into the Jewell cokemaking operations in the Domestic Coke segment beginning January 1, 2023. The DRT results were included in the Logistics segment in 2022 and are not recast.
Current wording
The operations of each of our reportable segments are described in Part I of this Annual Report on Form 10-K.
Previous wording
Management believes Adjusted EBITDA is an important measure of operating performance, which is used by the chief operating decision maker as one of the measurements to evaluate the performance of each of our reportable segments. Adjusted EBITDA should not be considered a substitute for the reported results prepared in accordance with GAAP. See the “Non-GAAP Financial Measures” section below for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement.
Current wording
Management believes Adjusted EBITDA is an important measure of operating performance, which is used by the chief operating decision maker as one of the measurements to help determine the allocation of costs and resources to our reportable segments. Adjusted EBITDA should not be considered a substitute for the reported results prepared in accordance with GAAP. See the “Non-GAAP Financial Measures” section below for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement.
Previous wording
(2)Corporate and Other, net is not a reportable segment.
Current wording
(1)Corporate and Other, net is not a reportable segment.
Previous wording
(1)See the “Non-GAAP Financial Measures” section below for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement.
Current wording
(2)See the “Non-GAAP Financial Measures” section below for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement.
Previous wording
(2)Revenues increased primarily as a result of the pass-through of higher coal prices on our long-term, take-or-pay agreements. Adjusted EBITDA decreased primarily due to lower margins on our non-contracted blast coke sales. These decreases to Adjusted EBITDA were partially offset by favorable coal-to-coke yields on our long-term, take-or-pay agreements and favorable pricing on foundry coke sales.
Current 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. Adjusted EBITDA was negatively impacted by lower coal-to-coke yields on our long-term, take-or-pay agreements and 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)Energy and other decreased primarily as a result of unfavorable energy pricing at our Haverhill facility.
Current wording
(4)Energy and other decreased primarily as a result of unfavorable energy pricing. These decreases were partially offset by higher energy sales as a result of increased volumes related toupgrades of our assets made in the prior year period.
Previous wording
Intersegment sales and other operating revenue in our Logistics segment were $22.1 million and $28.9 million as of December 31, 2023 and 2022, respectively. Adjusted EBITDA presented above is inclusive of the impact of intersegment transactions.
Current wording
Intersegment sales and other operating revenue in our Logistics segment were $22.9 million and $22.1 million as of December 31, 2024 and 2023, respectively. Adjusted EBITDA presented above is inclusive of the impact of intersegment transactions.
Previous wording
(2)Revenues and Adjusted EBITDA increased as a result of higher transloading pricing.
Current wording
(2)Revenues and Adjusted EBITDA increased as a result of higher transloading pricing at CMT.
Previous wording
Sales and other operating revenue decreased $2.8 million, or 7 percent, to $35.2 million in 2023 compared to $38.0 million in 2022. Adjusted EBITDA decreased $5.4 million, or 37 percent, to $9.1 million in 2023 compared to $14.5 million in 2022. Decreases in sales and other operating revenue and Adjusted EBITDA were primarily due to the absence of technology fees, which expired at the end of 2022.
Current wording
Sales and other operating revenue decreased $0.1 million, or zero percent, to $35.1 million in 2024 compared to $35.2 million in 2023. Adjusted EBITDA increased $0.8 million, or 9 percent, to $9.9 million in 2024 compared to $9.1 million in 2023. The increase in Adjusted EBITDA primarily reflects higher operating fees and production volumes.
Previous wording
(1)Costs incurred as part of the granulated pig iron project with U.S. Steel.
Current wording
(1)Reflects costs incurred related to potential mergers and acquisitions and the granulated pig iron project with U.S. Steel.
Previous wording
Our primary liquidity needs are to fund working capital, fund 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 December 31, 2023, we had $140.1 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, fund 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 December 31, 2024, we had $189.6 million of cash and cash equivalents and $350.0 million of borrowing availability under our Revolving Facility.
Previous wording
Net cash provided by operating activities increased $40.1 million to $249.0 million in 2023 as compared to 2022. The increase primarily reflects a favorable year-over-year change in primary working capital, which is comprised of accounts receivable, inventories, and accounts payable, driven by the timing of receipts from customers and the impact of the changes in coal prices. The current year period was further impacted by an increase in deferred income tax expense relating to new regulations impacting foreign tax credit utilization. See Note 4 to our consolidated financial statements for further detail on the change in deferred income tax expense. These favorable impacts were partially offset by lower operating results and higher payments made for employee related expenses in the current period.
Current wording
Net cash provided by operating activities decreased $80.2 million to $168.8 million in 2024 as compared to $249.0 million in 2023. 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 receipts from customers and the impact of the changes in coal prices. A payment of $36.0 million related to the extinguishment of certain liabilities related to our legacy coal mining business further negatively impacted net cash provided by operating activities in the current year period. Lower depreciation and deferred income tax expense as compared to the prior year period also favorably impacted cash provided by operating activities. See Note 4 to our consolidated financial statements for further detail on the change in deferred income tax expense.
Previous wording
Net cash used in investing activities increased $39.0 million to $109.2 million in 2023 as compared to 2022 primarily driven by ongoing capital expenditures related to upgrades of our assets in order to improve long-term reliability and operational performance as well as increased spending on the foundry expansion project in the current year period. Refer to Capital Requirements and Expenditures below for further detail.
Current wording
Net cash used in investing activities decreased $36.9 million to $72.3 million in 2024 as compared to $109.2 million in 2023. The decrease primarily reflects lower ongoing capital expenditures, partially driven by the absence of capital spending in connection with oven rebuild projects, as well as the absence of the foundry expansion project in the current year period. Refer to Capital Requirements and Expenditures below for further detail.
Previous wording
Net cash used in financing activities decreased $22.8 million to $89.7 million in 2023 as compared to $112.5 millionin 2022. This decrease in net cash used in financing activities was primarily driven by lower net repayments of $45.0 million on the Revolving Facility in the current year period. This decrease was offset by an increase in dividends paid of $7.1 million as compared to the prior year period, primarily as a result of an increase in the dividend per share amount, as well as higher cash distributions made to noncontrolling interests of $7.4 million in the current year period. The current year period was also impacted by higher repayments on financing obligations of $5.6 million, resulting from the early buyout on a sale leaseback arrangement, discussed further in Note 11 to our consolidated financial statements.
Current wording
Net cash used in financing activities decreased $42.7 million to $47.0 million in 2024 as compared to $89.7 millionin 2023. The decrease in net cash used in financing activities was primarily driven by lower net repayments of $35.0 million on the Revolving Facility, the absence of repayments on financing obligations of $8.8 million resulting from the early buyout on a sale leaseback arrangement in the prior year period, and lower cash distributions made to noncontrolling interests of $3.7 million. These decreases were partially offset by an increase to dividends paid of $6.9 million as compared to the prior year period, primarily as a result of an increase in the dividend per share amount.
Previous wording
In addition to the $30.7 million in dividends paid to our shareholders during 2023, on February 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 March 1, 2024, to stockholders of record on February 15, 2024. See further discussion in “Item 5. Market for Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities.”
Current wording
In addition to the $37.6 million in dividends paid to our shareholders during 2024, on January 30, 2025, 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 March 3, 2025, to stockholders of record on February 17, 2025. See further discussion in “Item 5. Market for Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities.”
Previous wording
In May 2023, S&P Global Ratings reaffirmed our corporate credit rating of BB- (stable). In November 2023, Moody’s Investors Service reaffirmed our corporate credit rating of B1 (positive).
Current wording
In February 2024, S&P Global Ratings reaffirmed our corporate credit rating of BB- (stable). In October 2024, Moody’s Investors Service reaffirmed our corporate credit rating of B1 and changed the rating outlook from positive to stable.
Previous wording
As of December 31, 2023, significant contractual obligations related to our metallurgical coal procurement contracts, which are generally based on annual coke production requirements at fixed coal prices, were $928.6 million and extend through 2024. As of December 31, 2023, significant contractual obligations related to debt were $500 million of principal borrowings and $134.1 million of related interest, which will be repaid through 2029. See Note 11 to our consolidated financial statements. We also have contractual obligations for leases, including land, office space, equipment, railcars and locomotives. See Note 13 to our consolidated financial statements.
Current wording
As of December 31, 2024, significant contractual obligations related to our metallurgical coal procurement contracts, which are generally based on annual coke production requirements at fixed coal prices, were $876.6 million and extend through 2025. As of December 31, 2024, significant contractual obligations related to debt were $500 million of principal borrowings and $109.7 million of related interest, which will be repaid through 2029. See Note 11 to our consolidated financial statements. We also have contractual obligations for leases, including land, office space, equipment, railcars and locomotives. See Note 13 to our consolidated financial statements.
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 project expenditures to ensure that our existing facilities operate in accordance with changing regulations.
Previous wording
(1)Includes capital spending in connection with the foundry cokemaking growth project.
Current wording
(1)Capital expenditures for the year ended December 31, 2023 includes capital spending in connection with the foundry cokemaking growth project.
Previous wording
The Company has obligations related to coal workers’ pneumoconiosis, or black lung, to provide benefits to certain of its former coal miners and their dependents further described in Note 12 to our consolidated financial statements.
Current wording
The Company has obligations to provide certain black lung benefits to legacy coal miners and their dependents further described in Note 12 to our consolidated financial statements.
Previous wording
We adjust our liability each year based upon actuarial calculations of our expected future payments for these benefits. Our independent actuarial consultants calculate the present value of the estimated black lung liability annually based on actuarial models utilizing our population of former coal miners, historical payout patterns of both the Company and the industry, actuarial mortality rates, medical costs, death benefits, dependents, discount rates and the current federally mandated payout rates. The estimated liability may be impacted by future changes in the statutory mechanisms, modifications by court decisions and changes in filing patterns by claimants and their advisors, the impact of which cannot be estimated.
Current wording
We adjust our liability each year based upon actuarial calculations of our expected future payments for these benefits. Our independent actuarial consultants calculate the present value of the estimated black lung liability annually in the fourth quarter, unless there are changes in facts and circumstances that could materially alter the amount of the liability, based on actuarial models utilizing our population of legacy coal miners, historical payout patterns of both the Company and the industry, expected claim filing patterns, expected claimant success rates, actuarial mortality rates, medical costs, death benefits, dependents, discount rates and the current federally mandated payout rates. The estimated liability may be impacted by future changes in the applicable laws, as interpreted by the courts, and changes in filing patterns by claimants and their advisors, the impact of which cannot be estimated.
Previous wording
During the first quarter of 2020, the U.S. Department of Labor's Division of Coal Mine Workers' Compensation (“DCMWC”) requested SunCoke provide additional collateral of approximately $32 million to secure certain of its black lung obligations. SunCoke exercised its right to appeal the DCMWC’s determination and provided additional information supporting the Company’s position in May 2020 and February 2021. If the Company’s appeal is unsuccessful, the Company may be required to provide additional collateral to receive its self-insurance reauthorization from the DCMWC, which could potentially reduce the Company’s liquidity. Additionally, on January 19, 2023, the Department of Labor issued a new proposed rule that would require self-insured companies to post collateral in the amount of 120 percent of the company's total expected lifetime black lung obligations as determined by the DCMWC. While this new proposed rule is not effective, if finalized, it could potentially reduce the Company's liquidity. We submitted comments on this proposed rule and continue to monitor any impact to the Company. See further discussion in Note 12 to our consolidated financial statements.
Current wording
Additionally, on January 19, 2023, the Department of Labor proposed a new rule that would require self-insured operators to post collateral in the amount of 120 percent of the company's total expected lifetime black lung liabilities as determined by the DCMWC. This proposed new rule and any future rulings would not apply to SunCoke as a result of the regulatory exemption detailed above.
Previous wording
The following table summarizes discount rates utilized, active claims and the total black lung liabilities. Our independent actuarial consultants calculate the present value of the black lung liability annually in the fourth quarter, unless there are changes in facts and circumstances that could materially alter the amount of the liability.
Current wording
The following table summarizes discount rates utilized, active claims and total black lung liabilities:
Previous wording
(1)The discount rate is determined based on a portfolio of high-quality corporate bonds with maturities that are consistent with the estimated duration of our black lung obligations. A decrease of 25 basis points in the discount rate would have increased black lung expense by $1.4 million in 2023.
Current wording
(1)The discount rate is determined based on a portfolio of high-quality corporate bonds with maturities that are consistent with the estimated duration of our black lung obligations. A decrease of 25 basis points in the discount rate would have increased black lung expense by $0.4 million in 2024.
Previous wording
(2)The current portion of the black lung liability was $5.0 million and $5.9 million at December 31, 2023 and 2022, respectively, and was included in accrued liabilities on the Consolidated Balance Sheets.
Current wording
(2)The current portion of the black lung liability was $1.0 million and $5.0 million at December 31, 2024 and 2023, respectively, and was included in accrued liabilities on the Consolidated Balance Sheets.