SunCoke Energy, Inc.

Previous report

Impairment in the carrying value of long-lived assets could materially and adversely affect our business, financial condition and results of operations.

Previous report

We have a significant amount of long-lived assets on our Consolidated Balance Sheets. Under generally accepted accounting principles, long-lived assets must be reviewed for impairment whenever adverse events or changes in circumstances indicate a possible impairment. We are required to perform impairment tests on our assets whenever events or changes in circumstances lead to a reduction of the estimated useful life or estimated future cash flows that would indicate that the carrying amount may not be recoverable or whenever management’s plans change with respect to those assets. If business conditions or other factors cause profitability and cash flows to decline, we may be required to record non-cash impairment charges.

Previous report

Events and conditions that could result in impairment in the value of our long-lived assets include, but are not limited to: negotiations related to renewals of certain of our long-term, take-or-pay agreements, new contracts and/or modifications entered into in the future, termination or non-renewal of existing contracts, and other factors leading to a reduction in expected long-term sales or profitability, the impact of a downturn in the global economy, competition, advances in technology, adverse changes in the regulatory environment, or a significant decline in the trading price of our common stock or market capitalization, lower future cash flows, slower industry growth rates and other changes in the industries in which we or our customers operate.

Previous report

Our Granite City long-term, take-or-pay agreement currently extends through December 31, 2025. Non-renewal of this agreement and/or absence of an agreement related to the granulated pig iron project or other coke supply contract could result in impairment in the value of our long-lived assets at the cokemaking plant. The current carrying value of the long-lived assets at our Granite City cokemaking plant is $238.0 million. There are also asset retirement obligations of $7.9 million at the Granite City cokemaking plant that could be negatively impacted by the matters discussed above.