About SXC & SXCP Raw materials processing and handling company with growth opportunities in cokemaking, coal logistics & other industrial verticals Current Business Future Platforms Cokemaking Coal Logistics Industrial Materials…
Roles of SXC and SXCP Raw materials processing and handling company with growth opportunities in cokemaking, coal logistics & other industrial verticals General Partner & 53% LP owner of Long-term, fee-based, take-or-pay SXCP,…
Recent News Long-term value creation strategy balances growth with return of capital Recent Value-Enhancing Actions Stable, Long-term Acquisitions(1) of Convent Marine Terminal and 23% Business Model interest in Granite City…
CONVENT MARINE TERMINAL (CMT) ACQUISITION OVERVIEW SunCoke Energy August 2015 Investor Presentations 5
Convent Marine Terminal Acquisition SunCoke Energy Partners to acquire premier Illinois Basin coal export terminal for 412M Asset Overview Acquisition Highlights Large, efficient, well-capitalized Gulf Coast Provides excellent fit…
Appealing Transaction Economics Immediately accretive acquisition anticipated to create substantial value Transaction Terms Purchase Consideration 82.4 million of SXCP common limited partnership 412 million in cash and SXCP equity…
Advantaged Customers & Contract Structure Convent throughput volumes contracted with lowest-cost ILB producers via attractive long-term, take-or-pay contracts Lowest Cost ILB Coal Producer Base Advantaged Contract Structure Foresight…
ILB Strong Market Position Low-cost producers positioned to take advantage of growing ILB market share (million short tons) ILB Domestic Utility Demand ILB basin produces lowest-cost bituminous 180 coal and benefits from advantaged…
Coal Logistics Convent substantially augments existing Coal Logistics franchise Platform for Growth Strategically located assets with access to barge, rail and truck Experienced management team capable of driving growth SXCPs…
COKEMAKING BUSINESS SunCoke Energy August 2015 Investor Presentations 11
Coke Market Dynamics Coke is an essential ingredient in blast furnace steel production Coke Market Overview US and Canada Coke Supply U.S. BF/BOF steel production outlook Integrated Steelmakers driven by automotive & construction…
Stable Cokemaking Business Model Long-term, take-or-pay contracts generate stable cash flow and insulate business from industry cyclicality Key Contract Provisions/Terms(1) Contract Value Propositions Customers required to take all…
Strategic Customer Blast Furnace Assets Our cokemaking assets supply coke to our customers strategic blast furnaces Customer Asset Supported Primary Product Line Comment One of the most productive BF in Middletown Auto the…
CAPITAL ALLOCATION SunCoke Energy August 2015 Investor Presentations 15
Capital Allocation Strategy Continued execution of capital allocation strategy leverages GP/LP structure to further enhance value for SXC & SXCP investors Raised dividend 100% to 0.15/share 9 consecutive distribution increases…
Suncoke Investment Thesis Well positioned to create long-term value for investors Stable, Long-term Business Model Solid Financial Foundation with Significant Flexibility Significant Value Proposition Potential Growth…
APPENDIX SunCoke Energy August 2015 Investor Presentations 19
ABOUT SXC & SXCP: OUR FACILITIES, TECHNOLOGY AND COKE MARKET OVERVIEW SunCoke Energy August 2015 Investor Presentations 20
SXC & SXCP Organizational Structure SXC owns: 2% GP interest 53% LP interest 100% IDRs Domestic Coal Mining International Coke (110M tons SXC provides via Coke reserves) Omnibus Agreement: Commercial contract support…
Our Operations Operations located to serve our customers most strategic assets Lake Terminal Indiana (Coal Logistics) Harbor Coke Plant Characteristics KRT 3 Terminals (Coal Logistics) Advantaged inbound and outbound logistics…
SunCokes Cokemaking Technology Our industry-leading cokemaking technology meets U.S. EPA MACT standards and makes larger, stronger coke Industry-leading environmental signature Leverage negative pressure to substantially reduce…
Blast Furnaces and Coke Best in Class (lbs/st) Iron Iron Ore/Pellets 3,100 Burden Scrap 198 Flux Limestone 30 Fuel Coke 600 Top Gas Blast Furnace Steelmaking BFs are most efficient and proven method of reducing iron oxides into…
Attractive CMT Asset Profile Modern infrastructure enhanced with 120M capital investment further highlights asset quality and historical operations excellence Convent Asset Infrastructure Excellent safety and environmental…
Benefit to SXC Cash Flow TM Convent acquisition highlights value of GP structure, generating estimated 16M of incremental cash flow to SXC in 2016 Pro-Forma w/ Pro-Forma w/ Standalone Standalone(3) Convent(2) Convent(2) 2013…
DEFINITIONS SunCoke Energy August 2015 Investor Presentations 27
Definitions BASIS OF PRESENTATION On January 13, 2015, SunCoke Energy Partners, L.P. acquired a 75 percent interest in the Granite City cokemaking facility from SunCoke. Because this was a transfer between entities under common…
SXCP GUIDANCE AND FINANCIAL RECONCILIATIONS SunCoke Energy August 2015 Investor Presentations 30
Distribution Performance Raised Q2 15 distribution in line with previous guidance; Substantial distribution upside from announced transaction SXCP Distribution Growth 9th consecutive Q2 15 cash distribution raised quarterly increase…
2015 Outlook Estimated 2015 cash distributions reflect prudent 1.10x target coverage 2014 2015 Outlook(1) ( in millions, except per unit data) As Reported Low High Adjusted EBITDA attributable to SXCP 131 169 179 Less: Ongoing capex…
Expected 2015E EBITDA Reconciliation 2015E 2015E ( in millions) Low High Net Income 69 79 Depreciation and amortization 57 57 Interest expense, net 56 56 Income tax expense 1 1 Adjusted EBITDA 183 193 EBITDA attributable to…
2015E Capital Expenditures 100% Basis ( in millions) 2014 2015E Ongoing 17 20 Prefunded from dropdown Environmental Remediation(1) 45 22 proceeds Expansion 0 0 Total CapEx 62 42 Note: Excludes CapEx associated with Convent…
SXC GUIDANCE AND FINANCIAL RECONCILIATIONS SunCoke Energy August 2015 Investor Presentations 35
Consolidated Guidance Summary TM Reaffirm Full Year 2015 Adjusted EBITDA Guidance; Updated Cash Taxes and Capital Expenditures Guidance Metric 2015 Guidance Adjusted EBITDA(1) Consolidated 190 210 million Attributable to SXC…
2015E Guidance Reconciliation TM 2015E 2015E ( in millions) Low High Net Income 21 38 Income tax expense/(benefit) 5 10 Interest expense, net 66 64 Depreciation, depletion and amortization expense 94 94 Non recurring coal…
Balance Sheet & Debt Metrics TM (1) As of 6/30/2015 Balance SXC Attributable Attributable Consolidated to SXCP ( in millions) to SXC Cash 202 99 103 Revolver Capacity 398 250 149 Total Liquidity 600 349 251 Total Debt…
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