SunCoke Energy, Inc.

6. Income Taxes

At the end of each interim period, we make our best estimate of the annual effective tax rate and the impact of discrete items, if any, and adjust the rate as necessary.

The Company's effective tax rate was 25.9 percent and 25.5 percent for the three and nine months ended September 30, 2026, respectively, and (376.0) percent and (35.8) percent for the three and nine months ended September 30, 2025, respectively. For the three and nine months ended September 30, 2026, the Company’s effective tax rate differed from the federal statutory rate of 21.0 percent primarily due to state and foreign taxes and a valuation allowance recorded against unused foreign tax credits, partially offset by earnings attributable to the Company’s noncontrolling ownership interests in a partnership that are not subject to tax.

During the three and nine months ended September 30, 2025, as part of tax planning, SunCoke conducted an analysis with respect to the Company’s capital investments under Section 48 of the Internal Revenue Code, which resulted in a net tax benefit of $20.7 million. The benefit was partially offset by $1.9 million in nondeductible transaction costs in connection with the acquisition of Phoenix Global. Before the impact of the discrete items mentioned above, the Company’s effective tax rate was 18.3 percent and 20.8 percent for the three and nine months ended September 30, 2025, respectively. The difference between the Company’s effective tax rates and federal statutory rate of 21.0 percent reflect the impact of state taxes, compensation deduction limitation under Section 162(m) of the Internal Revenue Code and a valuation allowance established for unused foreign tax credits, offset by earnings attributable to its noncontrolling ownership interests in a partnership.