sxc-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________________________________________________________

FORM 10-Q

_____________________________________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-35243

_____________________________________________________________________

SUNCOKE ENERGY, INC.

(Exact name of registrant as specified in its charter)

______________________________________________________________________


Delaware						90-0640593
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1011 Warrenville Road, Suite 600

Lisle, Illinois 60532

(630) 824-1000

(Registrant’s telephone number, including area code)

____________________________________________________________

Securities registered pursuant to section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

SXC

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ý Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ý No

As of April 29, 2022, there were 83,380,822 shares of the Registrant’s $0.01 par value Common Stock outstanding.

Table of Contents

SUNCOKE ENERGY, INC.

TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements			1

Consolidated Statements of Income (Unaudited) For the Three Months Ended March 31, 2022 and 2021			1

Consolidated Statements of Comprehensive Income (Unaudited) For the Three Months Ended March 31, 2022 and 2021			2

Consolidated Balance Sheets at March 31, 2022 (Unaudited) and December 31, 2021			3

Consolidated Statements of Cash Flows (Unaudited) For the Three Months Ended March 31, 2022 and 2021			4

Consolidated Statements of Equity (Unaudited) For the Three Months Ended March 31, 2022 and 2021			5

Notes to the Consolidated Financial Statements			6

1. General			6

2. Inventories			6

3. Intangible Assets			7

4. Income Taxes			7

5. Accrued Liabilities			7

6. Debt and Financing Obligation			8

7. Commitments and Contingent Liabilities			8

8. Share-Based Compensation			9

9. Earnings per Share			11

10. Fair Value Measurement			11

11. Revenue from Contracts with Customers			12

12. Business Segment Information			13





Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			16

Item 3. Quantitative and Qualitative Disclosures about Market Risk			27

Item 4. Controls and Procedures			27

PART II – OTHER INFORMATION

Item 1. Legal Proceedings			28

Item 1A. Risk Factors			28

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			28

Item 4. Mine Safety Disclosures			28

Item 6. Exhibits			29

Signature			30

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

SunCoke Energy, Inc.

Consolidated Statements of Income

(Unaudited)


	Three Months Ended March 31,
	2022		2021

	(Dollars and shares in millions, except per share amounts)
Revenues
Sales and other operating revenue	$	439.8	$	359.9
Costs and operating expenses
Cost of products sold and operating expenses	338.0		274.0
Selling, general and administrative expenses	18.0		15.3
Depreciation and amortization expense	35.2		32.4
Total costs and operating expenses	391.2		321.7
Operating income	48.6		38.2
Interest expense, net	8.0		12.7
Income before income tax expense	40.6		25.5
Income tax expense	10.0		7.3
Net income	30.6		18.2
Less: Net income attributable to noncontrolling interests	1.1		1.7
Net income attributable to SunCoke Energy, Inc.	$	29.5	$	16.5
Earnings attributable to SunCoke Energy, Inc. per common share:
Basic	$	0.35	$	0.20
Diluted	$	0.35	$	0.20
Weighted average number of common shares outstanding:
Basic	83.2		82.8
Diluted	84.2		83.5

(See Accompanying Notes)

Table of Contents

SunCoke Energy, Inc.

Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended March 31,
	2022		2021

	(Dollars in millions)
Net income	$	30.6	$	18.2
Other comprehensive income (loss):
Reclassifications of prior service benefit and actuarial benefit amortization to earnings, net of tax	0.1		0.1
Currency translation adjustment	1.3		(0.7)
Comprehensive income	32.0		17.6
Less: Comprehensive income attributable to noncontrolling interests	1.1		1.7
Comprehensive income attributable to SunCoke Energy, Inc.	$	30.9	$	15.9

(See Accompanying Notes)

Table of Contents

SunCoke Energy, Inc.

Consolidated Balance Sheets


	March 31, 2022		December 31, 2021
	(Unaudited)
	(Dollars in millions, except par value amounts)
Assets
Cash and cash equivalents	$	79.7	$	63.8
Receivables, net	99.5		77.6
Inventories	194.1		127.0
Other current assets	10.0		3.5
Total current assets	383.3		271.9
Properties, plants and equipment (net of accumulated depreciation of $1,195.0 million and $1,160.1 million at March 31, 2022 and December 31, 2021, respectively)	1,266.1		1,287.9
Intangible assets, net	34.7		35.2
Deferred charges and other assets	21.6		20.4
Total assets	$	1,705.7	$	1,615.4
Liabilities and Equity
Accounts payable	$	168.1	$	126.0
Accrued liabilities	48.9		52.4
Current portion of financing obligation	3.2		3.2
Interest payable	6.1		—
Income tax payable	3.9		0.6
Total current liabilities	230.2		182.2
Long-term debt and financing obligation	625.0		610.4
Accrual for black lung benefits	58.7		57.9
Retirement benefit liabilities	21.3		21.8
Deferred income taxes	174.3		169.0
Asset retirement obligations	11.9		11.6
Other deferred credits and liabilities	22.4		27.1
Total liabilities	1,143.8		1,080.0
Equity
Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no issued shares at both March 31, 2022 and December 31, 2021	—		—
Common stock, $0.01 par value. Authorized 300,000,000 shares; issued 98,754,995 and 98,496,809 shares at March 31, 2022 and December 31, 2021, respectively	1.0		1.0
Treasury stock, 15,404,482 shares at both March 31, 2022 and December 31, 2021	(184.0)		(184.0)
Additional paid-in capital	722.3		721.2
Accumulated other comprehensive loss	(15.3)		(16.7)
Retained earnings (deficit)	1.0		(23.4)
Total SunCoke Energy, Inc. stockholders’ equity	525.0		498.1
Noncontrolling interest	36.9		37.3
Total equity	561.9		535.4
Total liabilities and equity	$	1,705.7	$	1,615.4

(See Accompanying Notes)

Table of Contents

SunCoke Energy, Inc.

Consolidated Statements of Cash Flows

(Unaudited)


	Three Months Ended March 31,
	2022		2021

	(Dollars in millions)
Cash Flows from Operating Activities
Net income	$	30.6	$	18.2
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	35.2		32.4
Deferred income tax expense	5.3		3.1
Share-based compensation expense	1.1		0.5

Changes in working capital pertaining to operating activities:
Receivables, net	(21.9)		0.5
Inventories	(66.9)		(8.9)
Accounts payable	41.9		12.9
Accrued liabilities	(3.9)		(3.7)
Interest payable	6.1		11.0
Income taxes	3.3		3.8
Other	(8.1)		(5.0)
Net cash provided by operating activities	22.7		64.8
Cash Flows from Investing Activities
Capital expenditures	(12.9)		(20.1)
Other investing activities	(0.1)		—
Net cash used in investing activities	(13.0)		(20.1)
Cash Flows from Financing Activities


Proceeds from revolving facility	137.0		161.8
Repayment of revolving facility	(122.0)		(194.1)
Repayment of financing obligation	(0.8)		(0.7)

Dividends paid	(5.0)		(5.1)
Cash distribution to noncontrolling interests	(1.5)		—
Other financing activities	(1.5)		(1.0)
Net cash provided by (used in) financing activities	6.2		(39.1)
Net increase in cash and cash equivalents	15.9		5.6
Cash and cash equivalents at beginning of period	63.8		48.4
Cash and cash equivalents at end of period	$	79.7	$	54.0
Supplemental Disclosure of Cash Flow Information
Interest paid, net of capitalized interest of zero and $0.1 million, respectively	$

SEC Form 10-Q filed by SunCoke Energy Inc.