SunCoke Energy, Inc.

3. Acquisitions

On August 1, 2025 (“Acquisition Date”), the Company acquired all the equity of Flame Aggregator, LLC, by causing Phoenix Global to merge with and into one of its indirect wholly owned subsidiaries with Phoenix Global surviving, pursuant to the Merger Agreement, dated as of May 27, 2025. This acquisition has been accounted for as a business combination. The acquisition of Phoenix Global expands our industrial services offerings including adding servicing of electric arc furnace operations and international markets to the Company’s portfolio. The acquisition is included as part of the Company's Industrial Services segment.

The acquisition purchase consideration, in accordance with ASC 805, totaled $295.8 million in cash payments.

The initial accounting for the business combination is incomplete at the time of this filing due to the limited amount of time between the Acquisition Date and the date that these financial statements are issued. The Company has performed a preliminary valuation analysis of the fair market value of the assets and liabilities of Phoenix Global. The final purchase price allocation will be determined when the Company has completed its evaluation of the valuation analysis. The final allocation could differ from the preliminary allocation. The final allocation may include changes in allocations to acquired intangible assets as well as goodwill and other changes to assets acquired and liabilities assumed in the transaction. The estimated useful lives of acquired intangible assets are also preliminary. Measurement period adjustments, if any, will be recognized in the reporting period in which the adjustment amounts are determined within twelve months from the Acquisition Date. Subsequent to the preliminary purchase price allocation disclosed as of September 30, 2025, the Company recorded measurement period adjustments primarily related to working capital and refinements to the preliminary valuation of property, plants, and equipment. Property, plants, and equipment increased by approximately $17.5 million and accounts receivable decreased approximately $2.3 million.

The following table sets forth the components and the allocation of the purchase price and summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the date of acquisition.

The fair value of accounts receivable in the table above reflects a reduction of $10.2 million associated with expected credit losses.

The goodwill is attributable primarily to the synergies expected from combining the operations of both entities and intangible assets that do not qualify for separate recognition, including the existing workforce acquired through the acquisition. No portion of the goodwill is expected to be deductible for income tax purposes.

The Company amortizes its intangible assets over their estimated useful lives. The preliminary fair values allocated to the identifiable intangible assets and their preliminary estimated useful lives are as follows:

Acquisition-related costs

Acquisition-related costs consist of miscellaneous professional service fees and expenses for acquisition-related activities and due diligence. The Company incurred acquisition-related costs of $10.1 million during the year ended December 31, 2025, which are included in selling, general and administrative expenses on the Consolidated Statements of Operations. No such costs were incurred during the year ended December 31, 2024.

Revenue and earnings of Phoenix Global

The results of operations for the acquisition since the Acquisition Date have been included in our consolidated financial statements for the year ended December 31, 2025. Additionally, during the year ended December 31, 2025, the Company incurred $3.3 million of restructuring charges related to employee severance costs, which are included in selling, general and administrative expenses on the Consolidated Statements of Operations.

The following table summarizes Phoenix Global’s revenue and earnings included in the accompanying Consolidated Statements of Operations from the Acquisition Date through December 31, 2025:

Supplemental pro forma financial information

The unaudited pro forma financial information included in the table below represents a summary of the consolidated results of operations for the years ended 2024 and 2025, assuming the acquisition had been completed as of January 1, 2024. The pro forma financial information is not necessarily indicative of the results of operations that would have been achieved if the acquisition had been effective as of that date, or of future results, and includes certain nonrecurring pro forma adjustments.

For the year ended December 31, 2024, there are adjustments related to the elimination of debt and associated interest expense of $15.0 million at Phoenix Global, interest expense of $14.6 million for borrowings under the Company's Revolving Facility to finance the transaction, additional expenses from the remeasurement of assets and liabilities upon acquisition of $7.4 million, and additional tax benefit from the adjustments of $1.7 million.

For the year ended December 31, 2025, there are adjustments related to the elimination of debt and associated interest expense of $7.9 million at Phoenix Global, interest expense of $12.9 million for borrowings under the Company's Revolving Facility to finance the transaction, and increased expenses from the remeasurement of assets and liabilities upon acquisition of $0.4 million. The income tax effects from the adjustments were a net benefit of $1.1 million.