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Suncoke Energy, Inc. Announces Third Quarter 2015 Results And UPDATES FULL YEAR 2015 GUIDANCE

The following excerpt is from the company's SEC filing.

Net loss of $23.5 million, or $0.36 per share, reflects performance challenges at our Indiana Harbor cokemaking facility and VISA SunCoke impairment charge of $19.4 million, or $0.30 per share

Adjusted EBITDA was $50.2 million in third quarter 2015, down $14.0 million year-on-year

Convent Marine Terminal contributed $5.4 million to third quarter Adjusted EBITDA and is expected to deliver full year 2015 Adjusted EBITDA of approximately $20 million

Revised full year 2015 Consolidated Adjusted EBITDA guidance of $180 million to $190 million reflects Indiana Harbor challenges and benefit of Con vent Marine Terminal

LISLE, Ill. (October 12, 2015) - SunCoke Energy, Inc. (NYSE: SXC) today reported a third quarter 2015 loss attributable to shareholders of $23.5 million, or $0.36 per share, due primarily to performance challenges at our Indiana Harbor cokemaking facility and a $19.4 million impairment to our equity method investment in VISA SunCoke, our joint venture in India.

While the acquisition of the Convent Marine Terminal added $5.4 million to the quarters results, operating performance at Indiana Harbor was the primary driver of the decline in consolidated Adjusted EBITDA. said Fritz Henderson, Chairman, President and Chief Executive Officer of SunCoke Energy, Inc.

In view of the persistent operating challenges and costs at Indiana Harbor, we had to take additional actions to address this plants performance, Henderson said. During third quarter, we conducted a robust review of the facility and strengthened our refurbishment efforts by implementing a holistic plan, including rebuilding certain ovens to address interior oven conditions. We are in early stages of this effort but are encouraged by preliminary results.

Given the quarters results and our outlook for the remainder of the year, we are revising our full year 2015 Consolidated Adjusted EBITDA guidance to $180 million to $190 million. This reflects an expected Adjusted EBITDA benefit of approximately $20 million from the acquisition of the Convent Marine Terminal, offset by lower expectations for Indiana Harbor, which we now expect will not contribute to 2015 Adjusted EBITDA.

THIRD QUARTER CONSOLIDATED RESULTS

Three Months Ended

September 30,

(Dollars in millions)

Decrease

Revenues

Operating income

Net loss attributable to SXC

See definition of Adjusted EBITDA and reconciliation elsewhere in this release.

Revenues declined $40.1 million to $336.9 million in third quarter 2015 compared with the same prior year period, reflecting the pass-through of lower coal costs in our Domestic Coke segment as well as lower sales volumes.

Operating income was $23.1 million in the current period compared to $25.9 million in the prior year period, which included a $16.4 million impairment charge related to our coal mining operations. Adjusted EBITDA declined $14.0 million to $50.2 million. These decreases are primarily the result of operating challenges at Indiana Harbor, partially offset by the results of our newly acquired Convent Marine Terminal.

Net loss attributable to SXC was $23.5 million, or $0.36 per share, in third quarter 2015, including a $19.4 million, or $0.30 per share, impairment of our equity method investment in Visa SunCoke. Prior year net loss attributable to SXC was $3.6 million, or $0.05 per share, which included a $10.0 million, net of tax, or $0.14 per share, impairment charge on our coal mining business.

THIRD QUARTER SEGMENT RESULTS

Domestic Coke consists of cokemaking facilities and heat recovery operations at our Jewell, Indiana Harbor, Haverhill, Granite City and Middletown plants.

Domestic Coke Results

Three Months Ended September 30,

(Dollars in millions, except per ton amounts)

Sales Volume (thousands of tons)

Adjusted EBITDA per ton

(13.81

See definitions of Adjusted EBITDA and Adjusted EBITDA per Ton and reconciliation elsewhere in this release.

Segment revenues were affected by the pass-through of lower coal price as well as a decrease in volume of 31 thousand tons.

Adjusted EBITDA was $55.9 million, reflecting underperformance at Indiana Harbor, which decreased Adjusted EBITDA by $11.4 million, as well as the $2.9 million impact of our customers decision to idle its Haverhill Chemicals LLC facility, with whom we have a steam supply agreement.

Coal Logistics

Coal Logistics consists of the coal handling and blending services operated by SXCP at Convent Marine Terminal located on the Mississippi river in Louisiana, Lake Terminal in East Chicago, IN, and Kanawha River Terminals, LLC (KRT), which has terminals along the Ohio, Big Sandy and Kanawha rivers in West Virginia and Kentucky.

Coal Logistics Results

(in millions, except per ton amounts)

Increase

Tons handled (thousands of tons)

See definitions of Adjusted EBITDA and Adjusted EBITDA per ton and reconciliation elsewhere in this release.

Adjusted EBITDA was up $6.6 million, driven by the $5.4 million contribution of our recently acquired Convent Marine Terminal facility. Convent Marine Terminal handled 817 thousand tons during the period.

Brazil Coke

Brazil Coke consists of a cokemaking facility in Vitória, Brazil, which we operate for an affiliate of ArcelorMittal. Brazil Coke earns operating and technology licensing fees based on production and recognizes a dividend on a preferred stock investment assuming certain minimum production levels are achieved.

Segment Adjusted EBITDA remained largely flat at $3.4 million.

India Coke

India Coke consists of our 49 percent interest in our VISA SunCoke joint venture, which owns a 440 thousand ton cokemaking facility and associated steam generation unit in Odisha, India. Financial results for VISA SunCoke are recorded on a one-month lag and represent our 49 percent share of the joint ventures results.

Adjusted EBITDA remained relatively flat at a loss of $0.8 million in third quarter 2015. Import competition from China continues to depress coke pricing in India, resulting in weak margins.

We recorded a $19.4 million impairment charge, bringing our investment in VISA SunCoke to zero, as a result of a decline in projected market factors, including coal prices and the expected continuation of low priced Chinese coke imports.

Coal Mining

Coal Mining consists of our metallurgical coal mining activities conducted in Virginia and West Virginia, currently mined by contractors. A majority of the metallurgical coal produced by our coal mining business is sold to our Jewell Coke facility for conversion into coke.

Adjusted EBITDA was a loss of $4.9 million, down $2.0 million due to a $12 per...


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