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SunCoke Energy, Inc.

SunCoke Energy, Inc.SXCEarnings & Financial Report

NYSE · beverage industry

Energy Brands, also doing business as Glacéau, is a privately owned subsidiary of the Coca-Cola Company based in Whitestone, Queens, New York, that manufactures and distributes various lines of drinks marketed as enhanced water. Founded in May 1996 by J. Darius Bikoff with an electrolyte enhanced line of water called Smartwater, Energy Brands initially distributed its products to health food stores and independent retailers in the New York area. Adding Fruitwater and Vitaminwater to its line ...

What changed in SunCoke Energy, Inc.'s 10-K — 2023 vs 2024

Top changes in SunCoke Energy, Inc.'s 2024 10-K

289 paragraphs added · 288 removed · 221 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

97 edited+18 added−24 removed95 unchanged
Nonattainment designations under the new standard and any future more stringent standard for ozone have two potential impacts: (1) demonstrating compliance with the standard using dispersion modeling for permitting new facilities or significant new projects may be more difficult; and (2) facilities operating in areas that are classified as moderate non-attainment areas may be required to install Reasonably Available Control Technology (“RACT”) or demonstrate that they already meet RACT standards.
Nonattainment designations under the 2015 standard and any future more stringent standard for ozone have two potential impacts: (1) demonstrating compliance with the standard using dispersion modeling for permitting new facilities or significant new projects may be more difficult; and (2) facilities operating in areas that are classified as moderate non-attainment areas may be required to install Reasonably Available Control Technology (“RACT”) or demonstrate that they already meet RACT standards.
There is a potential risk that any re-designations may have an impact on our operations and costs for facilities located in areas that the EPA determines to be non-attainment with the 1-hour SO2 NAAQS. • In 2012, more stringent NAAQS for fine particulate matter ("PM"), or PM 2.5, went into effect.
There is a potential risk that any re-designations may have an impact on our operations and costs for facilities located in areas that the EPA determines to be non-attainment with the 1-hour SO2 NAAQS. • In 2012, more stringent NAAQS for fine particulate matter (“PM”), or PM 2.5, went into effect.
We have constructed the only greenfield cokemaking facilities in the U.S. in over 30 years and are the only North American coke producer that utilizes heat recovery technology in the cokemaking process. 1 Table of Contents The following table sets forth information about our cokemaking facilities: Facility Location Year of Start Up Use of Waste Heat Number of Coke Ovens Annual Cokemaking Nameplate Capacity (1) (thousands of tons) Customer (3) Contract Expiration Contract Volume (thousands of tons) Owned and Operated: Middletown (2) Middletown, Ohio 2011 Power generation 100 550 Cliffs Steel December 2032 Capacity Haverhill II Franklin Furnace, Ohio 2008 Power generation 100 550 Cliffs Steel June 2025 Capacity Granite City Granite City, Illinois 2009 Steam for power generation 120 650 U.S.
We have constructed the only greenfield cokemaking facilities in the U.S. in over 35 years and are the only North American coke producer that utilizes heat recovery technology in the cokemaking process. 1 Table of Contents The following table sets forth information about our cokemaking facilities: Facility Location Year of Start Up Use of Waste Heat Number of Coke Ovens Annual Cokemaking Nameplate Capacity (1) (thousands of tons) Customer (3) Contract Expiration Contract Volume (thousands of tons) Owned and Operated: Middletown (2) Middletown, Ohio 2011 Power generation 100 550 Cliffs Steel December 2032 Capacity Haverhill II Franklin Furnace, Ohio 2008 Power generation 100 550 Cliffs Steel June 2025 Capacity (4) Granite City Granite City, Illinois 2009 Steam for power generation 120 650 U.S.
Steel December 2024 Capacity Indiana Harbor East Chicago, Indiana 1998 Heat for power generation 268 1,220 Cliffs Steel September 2035 Capacity Jewell Vansant, Virginia 1962 Partially used for coal drying 142 720 Cliffs Steel/ Algoma Steel (4) December 2025/ December 2026 400 / 165 Haverhill I Franklin Furnace, Ohio 2005 Process steam 100 550 Total 830 4,240 Operated: Vitória Vitória, Brazil 2007 Steam for power generation 320 1,700 ArcelorMittal Brazil January 2028 Capacity Total 1,150 5,940 (1) Cokemaking nameplate capacity represents stated capacity for production of blast furnace coke equivalent production.
Steel June 2025 Capacity (5) Indiana Harbor East Chicago, Indiana 1998 Heat for power generation 268 1,220 Cliffs Steel September 2035 Capacity Jewell Vansant, Virginia 1962 Partially used for coal drying 142 720 Cliffs Steel/ Algoma Steel (6) December 2025/ December 2026 400 / 165 Haverhill I Franklin Furnace, Ohio 2005 Process steam 100 550 Total 830 4,240 Operated: Vitória Vitória, Brazil 2007 Steam for power generation 320 1,700 ArcelorMittal Brazil January 2028 Capacity Total 1,150 5,940 (1) Cokemaking nameplate capacity represents stated capacity for production of blast furnace coke equivalent production.
As with typical annual purchases, the cost of these supplemental purchases is also generally passed through to our customers. Most metallurgical coal procurement decisions are made through a coal committee structure with customer participation. The customer can generally exercise an overriding vote on most coal procurement decisions. In 2024, our metallurgical coal contracts are generally based on coke production requirements.
As with typical annual purchases, the cost of these supplemental purchases is also generally passed through to our customers. Most metallurgical coal procurement decisions are made through a coal committee structure with customer participation. The customer can generally exercise an overriding vote on most coal procurement decisions. In 2025, our metallurgical coal contracts are generally based on coke production requirements.
("GAAP"), we are required to account for the costs related to the closure of mines and the reclamation of the land upon exhaustion of coal reserves. The fair value of an asset retirement obligation is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made.
(“GAAP”), we are required to account for the costs related to the closure of mines and the reclamation of the land upon exhaustion of coal reserves. The fair value of an asset retirement obligation is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made.
In addition, each of the four cokemaking facilities that we have built since 1990 has either met or exceeded the applicable Best Available Control Technology (“BACT”), or Lowest Achievable Emission Rate (“LAER”) standards, as applicable, set forth by the EPA for cokemaking facilities at that time.
In addition, each of the four cokemaking facilities that we have built since 1990 has either met or exceeded the applicable Best Available Control Technology (“BACT”), or Lowest Achievable Emission Rate (“LAER”) standards, as applicable, set forth by the EPA for cokemaking facilities.
The Clean Air Act ("CAA") and similar state laws and regulations affect our cokemaking operations. These may be through permitting and/or emissions control requirements relating to criteria 10 Table of Contents pollutants or MACT standards.
The Clean Air Act (“CAA”) and similar state laws and regulations affect our cokemaking operations. These may be through permitting and/or emissions control requirements relating to criteria 10 Table of Contents pollutants or MACT standards.
The Patient Protection and Affordable Care Act (“PPACA”), which was implemented in 2010, amended previous legislation and provides for the automatic extension of awarded lifetime benefits to surviving spouses and changes the legal criteria used to assess and award claims. SunCoke is not an active coal mine operator and does not perform or oversee coal mining.
The Patient Protection and Affordable Care Act (“PPACA”), which was implemented in 2010, amended previous legislation and provides for the automatic extension of awarded lifetime benefits to surviving spouses and changes the legal criteria used to assess and award claims. SunCoke is not an active coal mine operator and does not 12 Table of Contents perform or oversee coal mining.
They guide our actions and decisions so we can always strive to do the right thing for our stakeholders, our business and each other. • Excellence: expect the best from yourself, remove obstacles, inspire and support others, embrace diversity and celebrate success. • Innovation: master the science and process, create a better way, find a better solution and push the envelope. • Commitment: deliver results, be accountable, work as a team, continuously improve and grow and always communicate effectively. • Integrity: do what is right, say what you mean, do what you say, earn trust and treat others with respect. • Stewardship: provide safe, reliable and environmentally sound operations for our people and their families, our customers and the communities where we do business.
They guide our actions and decisions so we can always strive to do the right thing for our stakeholders, our business and each other. • Excellence: expect the best from yourself, remove obstacles, inspire and support others and celebrate success. • Innovation: master the science and process, create a better way, find a better solution and push the envelope. 6 Table of Contents • Commitment: deliver results, be accountable, work as a team, continuously improve and grow and always communicate effectively. • Integrity: do what is right, say what you mean, do what you say, earn trust and treat others with respect. • Stewardship: provide safe, reliable and environmentally sound operations for our people and their families, our customers and the communities where we do business.
While we are not able to determine the extent to which the 2015 ozone standard will impact our business at this time, it presents a potential risk of having an impact on our operations and costs. 9 Table of Contents • The EPA adopted a rule in 2010 requiring a new facility that is a major source of greenhouse gases (“GHGs”) to install equipment or employ BACT procedures.
While we are not able to determine the extent to which any new ozone standards will impact our business at this time, it presents a potential risk of having an impact on our operations and costs. 9 Table of Contents • The EPA adopted a rule in 2010 requiring a new facility that is a major source of greenhouse gases (“GHGs”) to install equipment or employ BACT procedures.
The amounts recorded are dependent upon a number of variables, including the estimated future retirement costs, inflation rates, and the assumed credit-adjusted interest rates. Our future operating results would be adversely affected if these accruals were determined to be insufficient. These obligations are unfunded.
The amounts recorded are dependent upon a number of variables, including the estimated future retirement costs, inflation rates, and the assumed credit-adjusted interest rates. Our future operati ng results would be adversely affected if these accruals were determined to be insufficient. These obligations are unfunded.
The Clean Water Act of 1972 (“CWA”) may affect our operations by requiring water quality standards generally and through the National Pollutant Discharge Elimination System (“NPDES”) program. Regular monitoring, reporting requirements and performance standards are requirements of NPDES 11 Table of Contents permits that govern the discharge of pollutants into water.
The Clean Water Act of 1972 (“CWA”) may affect our operations by requiring water quality standards generally and through the National Pollutant Discharge Elimination System (“NPDES”) program. Regular monitoring, reporting requirements and performance standards are requirements of NPDES permits that govern the discharge of pollutants into water.
We also offer supplemental benefits programs designed to enhance the daily life and well-being of our employees, including: supplemental life insurance for all eligible family members, supplemental short-term disability, a legal services plan, an identity theft and device protection program, financial retirement planning education and coaching, paid-time off (including time for community service), tuition reimbursement, health management for chronic conditions, a 24/7 employee assistance program, and telemedicine.
We also offer supplemental benefits programs designed to enhance the daily life and well-being of our employees, including: supplemental life insurance for all eligible family members, supplemental short-term disability, a legal services plan, an identity theft and device protection program, financial retirement planning education and coaching, paid-time off (including time for community service), tuition reimbursement, health management for chronic conditions, a 24/7 employee assistance program, telemedicine, critical illness, accident and hospital indemnity insurance.
While we are not able to determine the extent to which a different determination by the VDEQ or the EPA would impact our business at this time and were it to withstand legal challenges, it presents a potential risk of having an impact on our operations and costs at the Jewell facility. ◦ On April 6, 2022, the EPA proposed a Federal Implementation Plan Addressing Regional Ozone Transport for the 2015 Ozone NAAQS, which proposed requirements applicable to certain coke plant operations.
While we are not able to determine at this time the extent to which a determination by the VDEQ or the EPA requiring more significant measures would impact our business, were it to withstand legal challenges, it presents a potential risk of having an impact on our operations and costs at the Jewell facility. ◦ On April 6, 2022, the EPA proposed a Federal Implementation Plan Addressing Regional Ozone Transport for the 2015 Ozone NAAQS, which proposed requirements applicable to certain coke plant operations.
Over the past several years, special training topics have included Active Shooter Preparedness, Harassment, Worker’s Compensation, Diversity and Inclusion (Inclusive Leadership, Unconscious Bias at the Workplace), Conducting Effective Investigations, Retirement Planning, and Substance Abuse Awareness. SunCoke’s Personal Information & Privacy Policy outlines specific procedures for employees to handle sensitive information in a secure and responsible manner.
Over the past several years, special training topics have included Active Shooter Preparedness, Harassment, Worker’s Compensation, Unconscious Bias at the Workplace, Conducting Effective Investigations, Retirement Planning, and Substance Abuse Awareness. SunCoke’s Personal Information & Privacy Policy outlines specific procedures for employees to handle sensitive information in a secure and responsible manner.
According to the Bureau of Labor Statistics, the TRIR of Other Petroleum and Coal Products (Coke) Manufacturing was 3.1 in 2022 and the TRIR for the Iron and Steel Mills sector was 2.2 in 2022, based on the most recent data available. Our year-over-year safety performance is consistently significantly lower than average industry-wide rates, demonstrating our strong commitment to safety.
According to the Bureau of Labor Statistics, the TRIR of Other Petroleum and Coal Products (Coke) Manufacturing was 2.9 in 2023 and the TRIR for the Iron and Steel Mills sector was 2.1 in 2023, based on the most recent data available. Our year-over-year safety performance is consistently significantly lower than average industry-wide rates, demonstrating our strong commitment to safety.
Nigl has progressed into leadership and oversight roles for the Company’s domestic cokemaking 14 Table of Contents operations. Prior to joining SunCoke, Mr. Nigl was Machining General Manager at DMAX Ltd., an American manufacturer of diesel engines for heavy-duty trucks.
Nigl has progressed into leadership and oversight roles for the Company’s domestic cokemaking operations. Prior to joining SunCoke, Mr. Nigl was Machining General Manager at DMAX Ltd., an American manufacturer of diesel engines for heavy-duty trucks.
During 2023, operating costs under four of our coke sales agreements are fixed subject to an annual adjustment based on an inflation index.
During 2024, operating costs under four of our coke sales agreements are fixed subject to an annual adjustment based on an inflation index.
Discharges must either meet state water quality standards or be authorized through available regulatory processes such as alternate standards or variances. Additionally, through the CWA Section 401 certification program, states have approval authority over water discharge permits or licenses that might result in a discharge to their waters.
Discharges must either meet state water quality standards or be authorized through available regulatory processes such as alternate standards or variances. Additionally, through the CWA Section 401 certification program, states have approval authority over water 11 Table of Contents discharge permits or licenses that might result in a discharge to their waters.
Under this rule, certain modifications to our facilities could subject us to the additional permitting and other obligations related to emissions of GHGs under the New Source Review/Prevention of Significant Deterioration ("NSR/PSD") and Title V programs of the CAA based on whether the facility triggered NSR/PSD because of emissions of another pollutant such as SO2, NOx, PM, ozone or lead. ◦ The EPA has engaged in various rulemakings in recent years to attempt to regulate GHG emissions from existing and new coal fired power plants.
Potential future modifications to our facilities could subject us to the additional permitting and other obligations related to emissions of GHGs under the New Source Review/Prevention of Significant Deterioration ("NSR/PSD") and Title V programs of the CAA based on whether the facility triggered NSR/PSD because of emissions of another pollutant such as SO2, NOx, PM, ozone or lead. ◦ The EPA has engaged in various rulemakings in recent years to regulate GHG emissions from existing and new coal fired power plants.
The following discussion summarizes the principal legal and regulatory requirements that we believe may significantly affect us. 8 Table of Contents Permitting and Bonding • Permitting Process for Cokemaking Facilities. The permitting process for our cokemaking facilities is administered by each state individually. However, the main requirements for obtaining environmental construction and operating permits are found in the federal regulations.
The following discussion summarizes the principal legal and regulatory requirements that we believe may significantly affect us. Permitting and Bonding • Permitting Process for Cokemaking Facilities. The permitting process for our cokemaking facilities is administered by each state individually. However, the main requirements for obtaining environmental construction and operating permits are found in the federal regulations.
Refer to our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A") for further detail on our coal contractual obligations.
Refer to our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) for further detail on our coal contractual obligations.
Our top priority has always been the safety and health of our employees, contractors and visitors. 7 Table of Contents Safety is so important to SunCoke that we include safety in our core values and also incorporate safety as a metric in our short-term incentive program. We have an ambition of zero incidents and injuries in the workplace.
Our top priority has always been the safety and health of our employees, contractors and visitors. Safety is so important to SunCoke that we include safety in our core values and also incorporate safety as a metric in our short-term incentive program. Our ambition is to have zero incidents and injuries in the workplace.
On June 9, 2022, the U.S. the EPA redesignated the area where the Middletown facility is located as an attainment area for the 2015 ozone NAAQS.
On June 9, 2022, the EPA redesignated the area where the Middletown facility is located as an attainment area for the 2015 ozone NAAQS.
Guidance & Reporting Without Fear of Retaliation All employees, officers and directors must report suspected policy violations of our Code of Business Conduct and Ethics to the Compliance Team, which is led by our Chief Compliance Officer and includes representatives from our Human Resources and Legal departments.
Guidance & Reporting Without Fear of Retaliation All employees, officers and directors must report suspected policy violations of our Code of Business Conduct and Ethics to the Compliance Team, which is led by our Chief Compliance Officer and oversees investigations conducted by representatives from our Human Resources and Legal departments.
In recent years, our Domestic Coke segment has accounted for approximately 37 percent of the U.S. blast furnace coke market capacity. We are the only coke producer who has built new cokemaking facilities in the U.S. in over 30 years, which will allow us to absorb additional market share from aging by-product coke batteries owned by other coke producers.
In recent years, our Domestic Coke segment has accounted for approximate ly 38 percent of the U.S. blast furnace coke market capacity. We are the only coke producer who has built new cokemaking facilities in the U.S. in over 30 years, which will allow us to absorb additional market share from aging by-product coke batteries owned by other coke producers.
The level of pay at risk increases progressively with positions of greater responsibility, with long-term cash and equity incentives with multi-year vesting periods granted at the Director, Vice President and Senior Vice President levels. Further, below the Director level, top performers may be granted long-term cash and equity incentives with multi-year vesting for retention.
The level of pay at risk increases progressively with positions of greater responsibility, with long-term cash and equity incentives with multi-year vesting periods granted at the Director, Vice President and Senior Vice President levels. Further, below the Director level, top performers may be granted long-term incentive (restricted stock units) with multi-year vesting for retention.
Any changes in attainment status for areas where our facilities are located present a potential risk that may impact our operations and costs. • More stringent NAAQS for ambient nitrogen dioxide ("NO2") and sulfur dioxide ("SO2") went into effect in 2010.
Any changes in attainment status for areas where our facilities are located present a potential risk that may impact our operations and costs. • More stringent NAAQS for ambient nitrogen dioxide (“NO2”) and sulfur dioxide (“SO2”) went into effect in 2010.
We purchased 5.9 million tons of metallurgical coal in 2023. Metallurgical coal is generally purchased on an annual basis via one-year contracts with costs primarily passed through to our customers in accordance with the applicable long-term, take-or-pay coke sales agreements. Occasionally, shortfalls in deliveries by metallurgical coal suppliers require us to procure supplemental coal volumes.
We purchased 6.1 million tons of metallurgical coal in 2024. Metallurgical coal is generally purchased on an annual basis via one-year contracts with costs primarily passed through to our customers in accordance with the applicable long-term, take-or-pay coke sales agreements. Occasionally, shortfalls in deliveries by metallurgical coal suppliers require us to procure supplemental coal volumes.
The 6 Table of Contents stability of our workforce is anchored by our experienced corporate leadership team along with our General Managers that lead the day-to-day operations at our facilities. Our leaders each have an average of nearly 20 years of leadership experience and an average tenure (or length of service) of over 14 years with SunCoke.
The stability of our workforce is also anchored by our experienced corporate leadership team along with our General Managers that lead the day-to-day operations at our facilities. Our leaders each have an average of nearly 20 years of leadership experience and an average tenure (or length of service) of 14 years with SunCoke.
If redesignated, there is a potential risk that any re-designations may have an impact on our operations and costs for facilities located in areas that the EPA determines to be non-attainment with the NAAQS. • In 2015, the EPA revised the existing NAAQS for ground level ozone to make the standard more stringent.
If redesignated, there is a potential risk that any re-designations may have an impact on our operations and costs for facilities located in areas that the EPA determines to be non-attainment with the NAAQS if the rule is upheld in court and otherwise remains in effect. • In 2015, the EPA revised the existing NAAQS for ground level ozone to make the standard more stringent.
These changes in the terms of such bonds have been accompanied, at times, by a decrease in the number of companies willing to issue surety bonds. As of December 31, 2023, we have posted $8.3 million in surety bonds or other forms of financial security for future reclamation. Regulation of Operations • Clean Air Act.
These changes in the terms of such bonds have been accompanied, at times, by a decrease in the number of companies willing to issue surety bonds. As of December 31, 2024, we have post ed $8.4 million in surety bonds or other forms of financial security for future reclamation. Regulation of Operations • Clean Air Act.
When targeted coal-to-coke yields are achieved, the price of coal is not a significant determining factor in the profitability of these facilities, although it does affect our revenue and cost of sales for these facilities in approximately equal amounts.
When targeted coal-to-coke yields are achieved, the price of coal is not a significant determining factor in the profitability of our long-term, take-or-pay coke sales agreements, although it does affect our revenue and cost of sales for these facilities in approximately equal amounts.
To reach our goal, we follow our Safety Vision, which is comprised of five core components including: • Visible safety leadership - Site and corporate leadership have made a commitment to safety as the paramount value within the Company and our site leadership practices visible safety leadership on a daily basis. • Communication and training - All team members and contractors take responsibility for their own safety and the safety of those around them, and we train for proper safety knowledge. • Safe work practices - All team members and contractors take the time necessary to properly identify and mitigate hazards and safely do each job. • Incident investigation – We have a structured process for investigating incidents and perform root cause analysis of significant incidents. • Continuous improvement – We are always focused on preventing safety incidents and Thinking Safe, Acting Safe and Being Safe.
To reach our goal, we follow our Safety Vision, which is comprised of five core components including: • Visible safety leadership – Site and corporate leadership have made a commitment to safety as the paramount value within the Company and our site leadership practices visible safety leadership on a daily basis. • Communication and training – All team members and contractors take responsibility for their own safety and the safety of those around them, and we train for proper safety knowledge. • Safe work practices – All team members and contractors take the time necessary to properly identify and mitigate hazards and safely do each job. • Incident investigation – We have a structured process for investigating incidents and perform root cause failure analyses.
As coal prices increase, the benefits associated with favorable coal-to-coke yields also increase. These features of our long-term, take-or-pay coke sales agreements reduce our exposure to variability in coal price changes and inflationary costs over the remaining terms of these agreements. Coke prices in our long-term, take-or-pay agreements also include both an operating cost component and a fixed fee component.
These features of our long-term, take-or-pay coke sales agreements reduce our exposure to variability in coal price changes and inflationary costs over the remaining terms of these agreements. Coke prices in our long-term, take-or-pay agreements also include both an operating cost component and a fixed fee component.
At which time, the present value of the estimated asset retirement costs is capitalized as part of the carrying amount of the long-lived asset. At December 31, 2023, we had an asset retirement obligation of $2.3 million related to estimated mine reclamation costs.
At which time, the present value of the estimated asset retirement costs is capitalized as part of the carrying amount of the long-lived asset. At December 31, 2024, we had an asset retirement obligation of $4.7 million related to estimated mine reclamation costs.
Additionally, our facilities and ovens were constructed using proven, industry-leading technology with many proprietary features allowing us to produce consistently higher quality coke than our competitors produce. Our technology also allows us to produce heat that can be converted into steam or electrical power. We monitor the development of competing technologies carefully.
Additionally, our facilities and ovens were constructed using proven, industry-leading technology with many proprietary features allowing us to produce consistently higher quality coke than our competitors produce. Our technology also allows us to produce heat that can be converted into steam or electrical power.
We engage in succession planning to help identify development and training opportunities for high performing talent, preparing potential successors for our most critical roles through assessment of the incumbents and equipping these employees with individualized development plans and job assignments to help them grow.
We engage in succession planning to help identify development and training opportunities for high performing talent, preparing potential successors for our most critical roles through assessment of the incumbents and equipping these employees with individualized development plans and job assignments to help them grow. We have customized leadership development plans for the immediate successors of key positions across the Company.
On November 5, 2020, the Virginia Department of Environmental Quality (“VDEQ”) requested that the Jewell facility conduct an analysis of potential controls for SO2 under the Regional Haze program.
The program has been challenged by various parties. On November 5, 2020, the Virginia Department of Environmental Quality (“VDEQ”) requested that the Jewell facility conduct an analysis of potential controls for SO2 under the Regional Haze program.
Workforce Composition and Recruitment As of December 31, 2023, we have 871 employees in the U.S. Approximately 40 percent of our domestic employees, principally at our cokemaking operations, are represented by the United Steelworkers union under various local collective bargaining agreements. Additionally, approximately 3 percent of our domestic employees are represented by the International Union of Operating Engineers.
Workforce Composition As of December 31, 2024, we have 868 employees in the U.S. Approximately 40 percent of our domestic employees, at our cokemaking operations, are represented by the United Steelworkers union under various local collective bargaining agreements. Additionally, approximately 3 percent of our domestic employees are represented by the International Union of Operating Engineers at our Lake Terminal facility.
All non-contracted blast coke is produced utilizing capacity in excess of that reserved for long-term, take-or-pay Domestic Coke sales agreements, which largely consume our capacity and are not impacted by the fluctuation of coke prices. Logistics Our principal competitors of CMT are located on the U.S. Gulf Coast or U.S. East Coast.
Non-contracted blast coke, which is produced utilizing capacity in excess of that reserved for long-term, take-or-pay Domestic Coke sales agreements, is sold in the global market and can be impacted by fluctuations of global coke prices. Logistics Our principal competitors of CMT are located on the U.S. Gulf Coast or U.S. East Coast.
Additionally, we have continued 5 Table of Contents to successfully utilize our existing coke ovens to produce foundry coke in addition to our primary product of blast furnace coke. As of December 31, 2023, we had 79 patents issued and 34 pending in the U.S., as well as 250 issued and 80 pending in foreign jurisdictions.
Additionally, we have continued to successfully utilize our existing coke ovens to produce foundry coke in addition to our primary product of blast furnace 5 Table of Contents coke. As of December 31, 2024, we had 83 patents issued and 38 pending in the U.S., as well as 222 issued and 75 pending in foreign jurisdictions.
A construction permit allows construction and commencement of operations at the facility and is generally valid for at least 18 months. Generally, construction commences during this period, while many states allow this period to be extended in certain situations. A facility's operating permit may be a state operating permit or a Title V operating permit. • Air Quality.
A construction permit allows construction and commencement of operations at the facility and is generally valid for at least 18 months. Generally, construction commences during this period, while many states allow this period to be extended in certain situations.
Prior to joining the Company, Mr. Zabiello worked in assurance services for Crowe Horwath LLP, a global public accounting firm. Shantanu Agrawal. Mr. Agrawal was appointed Vice President, Finance and Treasurer of SunCoke Energy, Inc. in July, 2021 and subsequently also assumed responsibility for the Procurement function in January 2023.
Zabiello worked in assurance services for Crowe Horwath LLP, a global public accounting firm. Shantanu Agrawal. Mr. Agrawal was appointed Vice President, Finance and Treasurer of SunCoke Energy, Inc. in July 2021 and subsequently also assumed responsibility for the Procurement function in January 2023. Prior to that he was Director, Financial Performance & Analysis (“FP&A”) and Investor Relations. Mr.
Our Gifts, Entertainment and Sponsored Travel Policy provides guidance regarding business courtesies, including reporting obligations and value limitations. We also have a Human Rights Policy, which affirms our commitment to a fair living wage for all employees.
Our Prohibited Payments and Political Contributions Policy addresses payments made to U.S. officials, including campaign contributions. Our Gifts, Entertainment and Sponsored Travel Policy provides guidance regarding business courtesies, including reporting obligations and value limitations. We also have a Human Rights Policy, which affirms our commitment to a fair living wage for all employees.
However, the Company's website is expressly not incorporated by reference herein. Information about our Executive Officers Our executive officers and their ages as of February 22, 2024, were as follows: Michael G. Rippey 66 Chief Executive Officer Katherine T. Gates 47 President Mark W. Marinko 62 Senior Vice President and Chief Financial Officer P.
However, the Company's website is expressly not incorporated by reference herein. Information about our Executive Officers Our executive officers and their ages as of February 21, 2025, were as follows: Katherine T. Gates 48 President and Chief Executive Officer Mark W. Marinko 63 Senior Vice President and Chief Financial Officer P.
Our target for Total Recordable Incident Rate ("TRIR") at SunCoke for 2023 w as 0.80 company-wide, which includes both employees and contractors. Our safety performance in 2023 was 0.99 TRIR. Our excellent safety record is best understood in comparison to industry-wide safety performance.
Our target for Total Rec ordable Incident Rate (“TRIR”) at SunCoke for 2024 was 0.80 company-wide, which includes both employees and contractors. Our safety performance in 2024 was a 0.50 TRIR. Our excellent safety record is best understood in comparison to industry-wide safety performance.
Zabiello was appointed Vice President and Controller of SunCoke Energy, Inc. in April 2023. Mr. Zabiello joined the Company in 2012 and has assumed progressively more responsible financial leadership roles, most recently serving as Director, Accounting and Assistant Treasurer. Mr. Zabiello is a Certified Public Accountant and holds Bachelor’s and Master’s degrees in Accounting from Northern Illinois University.
Zabiello joined the Company in 2012 and has assumed progressively more responsible financial leadership roles, most recently serving as Director, Accounting and Assistant Treasurer. Mr. Zabiello is a Certified Public Accountant and holds Bachelor’s and Master’s degrees in Accounting from Northern Illinois University. Prior to joining the Company, Mr.
However, to the extent that the actual coal-to-coke yields are less than the contractual standard, we are responsible for the cost of the excess coal used in the cokemaking process. Conversely, to the 2 Table of Contents extent our actual coal-to-coke yields are higher than the contractual standard, we realize gains.
However, to the extent that the actual coal-to-coke yields are less than the contractual standard, we are responsible for the cost of the excess coal used in the cokemaking process. Conversely, to the extent our actual coal-to-coke yields are higher than the contractual standard, we realize gains. As coal prices increase, the benefits associated with favorable coal-to-coke yields also increase.
( “ Algoma Steel ” ). (4) Under the long-term, take-or-pay agreement with Cliffs Steel, Jewell and Haverhill I supply a combined 400 thousand tons annually through 2025. Additionally, the long-term, take-or-pay agreement between Haverhill I and Algoma Steel provides for coke supply to shift to Jewell.
See further discussion in “ Management's Discussion and Analysis Financial Condition and Results of Operations. ” (6) Under the long-term, take-or-pay agreement with Cliffs Steel, Jewell and Haverhill I supply a combined 400 thousand tons annually through 2025. Additionally, the long-term, take-or-pay agreement between Haverhill I and Algoma Steel provides for coke supply to shift to Jewell.
Employee Development & Training SunCoke provides a robust training program that is meant to meet applicable regulatory requirements. In addition to the annual interactive video-based SunCoke Code of Business Conduct and Ethics training we provide to all employees, we also provide specialized trainings on an as-needed basis for current topics throughout the year.
In addition to the annual interactive video-based SunCoke Code of Business Conduct and Ethics training we provide to all employees, we also provide specialized trainings on an as-needed basis for current topics throughout the year.
Quanci was Director, Corporate Technology of Sunoco, Inc. (a leading transportation fuel provider with interests in logistics). Dr. Quanci has over 30 years of domestic and international experience in process research, development, plant optimization, manufacturing, rebuilding/turnarounds, and taking new technologies from ideation to full production. Over the course of his career, Dr.
Quanci has over 30 years of domestic and international experience in process research, development, plant optimization, manufacturing, rebuilding/turnarounds, and taking new technologies from ideation to full production. Over the course of his career, Dr.
Currently there is little information as to what may constitute BACT for GHG in most industries.
Currently there is little information as to what may constitute BACT for GHG for the cokemaking industry.
Our long-term, take-or-pay coke sales agreements contain pass-through provisions for costs we incur in the cokemaking process, including coal and coal procurement costs, subject to meeting contractual coal-to-coke yields, operating and maintenance expenses, costs related to the transportation of coke to our customers, taxes (other than income taxes) and costs associated with changes in regulation.
Our domestic capacity is largely consumed by these long-term agreements, which do not have exposure to the fluctuations in domestic and global spot prices for blast furnace coke. 2 Table of Contents Our long-term, take-or-pay coke sales agreements contain pass-through provisions for costs we incur in the cokemaking process, including coal and coal procurement costs, subject to meeting contractual coal-to-coke yields, operating and maintenance expenses, costs related to the transportation of coke to our customers, taxes (other than income taxes) and costs associated with changes in regulation.
Hardesty joined SunCoke Energy, Inc. in 2011 as Senior Vice President, Sales and Commercial Operations, and has more than 30 years of experience in the mining industry. Before joining SunCoke, Mr. Hardesty served as Senior Vice President for International Coal Group, Inc.
Hardesty was appointed Senior Vice President, Commercial Operations, Business Development, Terminals and International Coke of SunCoke Energy, Inc., effective October 1, 2015. Mr. Hardesty joined SunCoke Energy, Inc. in 2011 as Senior Vice President, Sales and Commercial Operations, and has more than 30 years of experience in the mining industry. Before joining SunCoke, Mr.
At Vitória, Brazil, where we operate one cokemaking facility on behalf of ArcelorMittal Brazil, we have intellectual property and licensing agreements in place for the entity’s use of our technology. As of December 31, 2023, we had 38 patents issued and 16 pending in Brazil.
At Vitória, Brazil, where we operate one cokemaking facility on behalf of ArcelorMittal Brazil, we have intellectual property and licensing agreements in place for the entity’s use of our technology. As of December 31, 2024, we had 39 patents issued and 18 pending in Brazil. Human Capital Management Safety We live by the ethos: Think Safe. Act Safe. Be Safe.
However, SunCoke has retained certain black lung liabilities associated with legacy coal operations. Our obligation related to black lung benefits at December 31, 2023 was $58.2 million and was estimated based on various assumptions, including actuarial estimates, discount rates, number of active claims, changes in health care costs and the impact of PPACA.
Our remaining obligation related to black lung benefits at December 31, 2024 was $13.7 million and was estimated based on various assumptions, including actuarial estimates, discount rates, number of active claims, changes in health care costs and the impact of PPACA.
In 2023, CMT accounted for approximately 42 percent of U.S. thermal coal exports from the U.S. Gulf Coast and approximately 16 percent of total U.S. thermal coal exports. CMT has a state-of-the-art ship loader, the largest of its kind in the world.
In 2024, CMT accounted for ap proximately 38 per cent of U.S. thermal coal exports from the U.S. Gulf Coast and approxim ately 16 pe rcent of total U.S. thermal coal exports. CMT has a state-of-the-art ship loader, the largest of its kind in the world.
Michael Hardesty 61 Senior Vice President, Commercial Operations, Business Development, Terminals and International Coke Karl A. Zabiello 38 Vice President, Controller Shantanu Agrawal 37 Vice President, Finance and Treasurer John F. Quanci 62 Vice President, Chief Technology Officer Patrick G. Nigl 57 Vice President, Coke Operations Michael G. Rippey. Since January 1, 2023 Mr.
Michael Hardesty 62 Senior Vice President, Commercial Operations, Business Development, Terminals and International Coke Karl A. Zabiello 39 Vice President, Controller Shantanu Agrawal 38 Vice President, Finance and Treasurer John F. Quanci 63 Vice President, Engineering and Technology and Chief Technology Officer Patrick G. Nigl 58 Vice President, Coke Operations Katherine T. Gates. Ms.
The EPA also finalized a rule in 2010 requiring a new facility that is a major source of GHGs to install equipment or employ BACT procedures.
Our facilities are presently subject to the GHG reporting rule, which obligates us to report annual emissions of GHGs. The EPA also finalized a rule in 2010 requiring a new facility that is a major source of GHGs to install equipment or employ BACT procedures.
(“ICG”), where he was responsible for leading the sales and marketing functions and was a key member of the executive management team. Prior to ICG, Mr. Hardesty served as Vice President of Commercial Optimization at Arch Coal, where he developed and executed trade strategies, optimized production output and directed coal purchasing activities.
Hardesty served as Senior Vice President for International Coal Group, Inc. (“ICG”), where he was responsible for leading the sales and marketing functions and was a key member of the executive management team. Prior to ICG, Mr.
Our cokemaking facilities employ MACT standards designed to limit emissions of certain hazardous air pollutants. Specific MACT standards apply to oven door leaks, charging, oven pressure, pushing and quenching. Certain MACT standards for cokemaking facilities were developed using test data from SunCoke's Jewell cokemaking facility located in Vansant, Virginia.
Specific MACT standards apply to oven door leaks, charging, oven pressure, pushing, quenching, and emissions from our main stacks and bypass vent stacks. Certain MACT standards for cokemaking facilities were developed using test data from SunCoke's facilities.
From July 2014 to October 2015, she was Vice President and Assistant General Counsel, where she focused on litigation, regulatory and commercial matters. In addition, from October 2015 through June 2019, Ms. Gates served as a director of SunCoke Energy Partners GP LLC, the general partner of SunCoke Energy Partners, L.P, our former master limited partnership subsidiary. Ms.
In addition, from October 2015 through June 2019, Ms. Gates was elected as a director of SunCoke Energy Partners GP LLC, the general partner of SunCoke Energy Partners, L.P., our former publicly traded master limited partnership subsidiary. Prior to joining SunCoke, Ms.
Talent Management and Total Compensation Our full-year performance management process begins with setting annual goals for the Company, which guide the development of functional, local and individual employee goals. Employees and their managers are accountable for the goals and must review their performance against the goals on an ongoing basis.
Talent Management We use an annual review process to evaluate employees' performance and assist in their development. Our full-year performance management process begins with setting annual goals for the Company, which guide the development of functional, local and individual employee goals.
Under the CERCLA, we may be responsible for all or part of the costs of cleaning up facilities at which such substances have been released and for natural resource damages.
Under the CERCLA, we may be responsible for all or part of the costs of cleaning up facilities at which such substances have been released and for natural resource damages. We also must comply with reporting requirements under the Emergency Planning and Community Right-to-Know Act and the Toxic Substances Control Act. • Climate Change Legislation and Regulations.
Metallurgical markets are primarily impacted by steel prices and blast furnace operating levels whereas thermal markets are impacted by natural gas prices and electricity demand. Our KRT competitors are generally located within 100 miles of our operations. KRT has fully automated and computer-controlled mixing capabilities that mix coal to within two percent 4 Table of Contents accuracy of customer specifications.
Our KRT terminals serve two primary domestic markets, metallurgical coal trade and thermal coal trade. Metallurgical markets are primarily impacted by steel prices and blast furnace operating levels whereas thermal markets are impacted by natural gas prices and electricity demand. Our KRT competitors are generally located within 100 miles of our operations.
If the EPA were to ever promulgate a similar rule that applies to our facilities, it may present a potential risk of having an impact on our operations and cost structure. ◦ The SEC has said it intends to finalize new climate rules that, among other matters, may require disclosure of certain climate change-related information.
If the EPA were to ever promulgate a similar rule that applies to our facilities, it may present a risk of having an impact on our operations and cost structure. ◦ The SEC published a final rule on March 6, 2024 requiring disclosure of certain climate change-related information. The rule is currently stayed and being challenged in federal court.
The VDEQ is currently reviewing Jewell’s determination that the installation of new controls is not feasible and any new requirements should be limited to operating pollution controls already present at the facility. Jewell submitted a permit application to the VDEQ related to this determination, which is under review by the VDEQ at this time.
Jewell determined that the installation of new controls is not feasible and any new requirements should be limited to operating pollution controls already present at the facility.
Coast Guard pursuant to the Maritime Transportation Security Act. We have an internal inspection program designed to monitor and ensure compliance by CMT with these requirements.
These standards impose minimum requirements for our operations to maintain and operate sites and equipment in a safe manner. • Security. CMT is subject to regulation by the U.S. Coast Guard pursuant to the Maritime Transportation Security Act. We have an internal inspection program designed to monitor and ensure compliance by CMT with these requirements.
Additionally, Human Resources works in collaboration with our Legal department, including our Chief Compliance Officer, as necessary for human capital matters, ethics and compliance. Workforce Culture Our culture at SunCoke is driven by our core values. SunCoke’s values of excellence, innovation, commitment, integrity and stewardship are at the heart of who we are and how we work every day.
Culture and Core Values Our culture at SunCoke is driven by our core values. SunCoke’s values of excellence, innovation, commitment, integrity and stewardship are at the heart of who we are and how we work every day.
Seasonality Our revenues in our Domestic Coke segment are largely tied to long-term, take-or-pay agreements and as such, are not seasonal. However, our cokemaking profitability is tied to coal-to-coke yields, which improve in drier weather. Accordingly, the coal-to-coke yield component of our profitability tends to be more favorable in the third quarter.
Lake Terminal provides coal handling and mixing services to our Indiana Harbor cokemaking facility and therefore, does not have any competitors. Seasonality Our revenues in our Domestic Coke segment are largely tied to long-term, take-or-pay agreements and as such, are not seasonal. However, our cokemaking profitability is tied to coal-to-coke yields, which improve in drier weather.
We are subject to two categories of MACT standards. The first category applies to pushing and quenching. The second category applies to emissions from charging and coke oven doors. The EPA is required to make a risk-based determination for pushing and quenching emissions and determine whether additional emissions reductions are necessary.
We are subject to two categories of MACT standards. The first category applies to pushing, quenching, and emissions from the main stacks and bypass vent stacks. The second category applies to emissions from charging and coke oven doors.
It is possible that the areas where our facilities are located may be redesignated in the future as non-attainment areas as a result of this rule.
In November 2024, the state of Ohio, which is where our Middletown facility is located, has been preliminarily designated as nonattainment under the new PM 2.5. It is possible that the areas where our other facilities are located may also be redesignated in the future as non-attainment areas as a result of this rule.
Gates joined SunCoke in February 2013 as Senior Health, Environment and Safety Counsel. Prior to joining SunCoke, Ms. Gates practiced law for two decades. As a Partner at Beveridge & Diamond, P.C., she served on the firm’s Management Committee and co-chaired the civil litigation section of the firm’s Litigation Practice Group. Mark W. Marinko. Mr.
Gates was a Partner at Beveridge & Diamond, P.C., where she served on the firm’s Management Committee and co-chaired the firm’s civil litigation practice group. Mark W. Marinko. Mr. Marinko was appointed as SunCoke Energy, Inc.’s Senior Vice President and Chief Financial Officer in March 2022. Prior to joining SunCoke, Mr.
In recent years, steelmakers have begun to explore alternatives to blast furnace technology that require less or alternatives to coke, such as electric arc furnaces. We also monitor ferrous technologies, such as direct reduced iron production, as these could indirectly impact our blast furnace customers.
We monitor the development of competing technologies carefully, such as steelmakers' growing use of electronic arc furnaces as an alternative to blast furnace technology, which requires less or alternatives to coke. We also monitor ferrous technologies, such as direct reduced iron production, as these could indirectly impact our blast furnace customers.
Marinko was appointed as SunCoke Energy, Inc.’s Senior Vice President and Chief Financial Officer in March 2022. Prior to joining SunCoke, Mr. Marinko served as the Senior Vice President and Chief Financial Officer with Great Lakes Dredge and Dock Corporation (the largest dredging company within the United States). Prior to joining Great Lakes Dredge & Dock Corporation, Mr.
Marinko served as the Senior Vice President and Chief Financial Officer with Great Lakes Dredge and Dock Corporation (the largest dredging company within the United States). Prior to joining Great Lakes Dredge & Dock Corporation, Mr. Marinko was President of the Consumer Services division at TransUnion, LLC, a global provider of information and decision-processing services. P. Michael Hardesty. Mr.
The leadership of our Human Resources department, in partnership with local Human Resources and General Managers sponsor the development and oversight of all human capital programs in the organization including: (i) workforce composition, recruitment and retention, (ii) culture, (iii) workforce stability, (iv) employee development and training, (v) benefits, (vi) talent management and total compensation.
The leadership of our Human Resources department sponsors the development and oversight of all human capital programs in the organization including: workforce composition, talent acquisition and retention, culture, workforce stability, employee development and training, benefits, talent management and total compensation. Additionally, our Legal department, including the Chief Compliance Officer, oversees matters related to ethics and compliance.
Our Code of Business Conduct and Ethics, along with our Core Values, establish the principles that guide our daily actions to uphold the highest standards of ethical and legal behavior. Whether working with customers, vendors, business partners or neighbors, we always strive to act with integrity.
Ethics & Compliance We have adopted a Code of Business Conduct and Ethics that applies to all of our officers, directors and employees, including senior financial officers and executives. Our Code of Business Conduct and Ethics, along with our Core Values, establish the principles that guide our daily actions to uphold the highest standards of ethical and legal behavior.
All employees must complete annual training on our Code of Business Conduct and Ethics, which we review and update as needed. We educate all employees to avoid potential conflicts of interest. Our Prohibited Payments and Political Contributions Policy addresses payments made to U.S. officials, including campaign contributions.
Whether working with customers, vendors, business partners or neighbors, we always strive to act with integrity. All employees must complete annual training on our Code of Business Conduct and Ethics, which we review and update as needed. We educate all employees to avoid potential conflicts of interest.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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These risks are not the only risks we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition, or results of operations.
However, these are not the only risks we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition, or results of operations.
Specifically, a higher level of debt could have important consequences, including: • making it more difficult for us to satisfy our obligations with respect to the notes and our other debt; • limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions, distributions or other general corporate requirements; • requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for the payment of dividends, working capital, capital expenditures, acquisitions and other general corporate purposes; • increasing our vulnerability to general adverse economic and industry conditions; • exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under the credit facilities, are at variable rates of interest; • limiting our flexibility in planning for and reacting to changes in the industry in which we compete; • placing us at a competitive disadvantage to other, less leveraged competitors; and • increasing our cost of borrowing.
Specifically, a higher level of debt could have important consequences, including: • making it more difficult for us to satisfy our obligations with respect to the notes and our other debt; • limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions, distributions or other general corporate requirements; • requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for the payment of dividends, working capital, capital expenditures, acquisitions and other general corporate purposes; • increasing our vulnerability to general adverse economic and industry conditions; 23 Table of Contents • exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under the credit facilities, are at variable rates of interest; • limiting our flexibility in planning for and reacting to changes in the industry in which we compete; • placing us at a competitive disadvantage to other, less leveraged competitors; and • increasing our cost of borrowing.
If a customer refuses to take or pay for our coke, we must continue to operate our coke ovens even though we may not be able to sell our coke immediately and may incur significant additional costs for natural gas to maintain the temperature inside our coke oven batteries and fees under our rail contracts to account for reductions in inbound coal or outbound coke shipments at our plants, which may have a material and adverse effect on our cash flows, financial position or results of operations.
If a customer refuses to take or pay for our coke, we must continue to operate our coke ovens even though we may not be able to sell our coke immediately or may incur significant additional costs for: (i) natural gas to maintain the temperature inside our coke oven batteries; and (ii) fees under our rail contracts to account for reductions in inbound coal or outbound coke shipments at our plants, which may have a material and adverse effect on our cash flows, financial position or results of operations.
Our operations are subject to strict regulation by federal, state and local authorities with respect to: discharges of substances into the surrounding environment including the air, water and ground; emissions of GHGs; compliance with the NAAQS; management and disposal of hazardous substances and wastes; cleanup of contaminated sites; protection of groundwater quality and availability; protection of plants and wildlife; reclamation and restoration of properties after completion of mining or drilling; sales of electric power; installation of safety equipment in our facilities; and protection of employee health and safety.
Our operations are subject to strict regulation by federal, state and local authorities with respect to: discharges of substances into the surrounding environment including the air, water and ground; emissions of GHGs; compliance with the NAAQS; management and disposal of hazardous substances and wastes; cleanup of contaminated sites; protection of groundwater quality and availability; protection of plants and wildlife; reclamation and restoration of properties after 16 Table of Contents completion of mining or drilling; sales of electric power; installation of safety equipment in our facilities; and protection of employee health and safety.
Such competition could reduce demand for our products and services, thus having an adverse effect on our financial condition and results of operations. We are subject to extensive laws and regulations, which may increase our cost of doing business and have an adverse effect on our cash flows, financial position or results of operations.
Such competition could reduce demand for our products and services, thus having a material and adverse effect on our financial condition and results of operations. We are subject to extensive laws and regulations, which may increase our cost of doing business and have an adverse effect on our cash flows, financial position, or results of operations.
If any permits or leases are not issued or renewed in a timely fashion or at all, or if permits issued or renewed are conditioned in a manner that restricts our ability to efficiently and economically conduct our operations, it could have an adverse effect on our financial condition and results of operations.
If any permits or leases are not issued or renewed in a timely fashion or at all, or if permits issued or renewed are conditioned in a manner that restricts our ability to efficiently and economically conduct our operations, it could have a material and adverse effect on our financial condition and results of operations.
At our Granite City and Haverhill cokemaking facilities, we rely on third-parties to mix coals that we have purchased into coal mixes that we use to produce coke. We have entered into long-term agreements with coal mixing service providers that are coterminous with our coke sales agreements.
At our Granite City and Haverhill cokemaking facilities, we rely on third-parties to mix coals that we have purchased into coal mixes that we use to produce coke. We have entered into agreements with coal mixing service providers that are coterminous with our coke sales agreements.
With respect to our represented employees, we may be adversely impacted by the loss of employees who retire or obtain other employment during a layoff or a work stoppage. 25 Table of Contents We currently are, and likely will be, subject to litigation, the disposition of which could have a material adverse effect on our cash flows, financial position or results of operations.
With respect to our represented employees, we may be adversely impacted by the loss of employees who retire or obtain other employment during a layoff or a work stoppage. We currently are, and likely will be, subject to litigation, the disposition of which could have a material adverse effect on our cash flows, financial position or results of operations.
Our operations depend upon critical pieces of equipment that occasionally may be out of service for scheduled upgrades or maintenance or as a result of unanticipated failures. Assets and equipment critical to these operations also may deteriorate or become depleted materially sooner than we currently estimate, resulting in additional maintenance spending or additional replacement capital expenditures.
Our operations depend upon critical pieces of 14 Table of Contents equipment that occasionally may be out of service for scheduled upgrades or maintenance or as a result of unanticipated failures. Assets and equipment critical to these operations also may deteriorate or become depleted materially sooner than we currently estimate, resulting in additional maintenance spending or additional replacement capital expenditures.
The loss of access to rail capacity could create temporary disruption until the access is restored, significantly impairing our ability to receive coal and resulting in materially decreased 21 Table of Contents revenues. Our ability to open new cokemaking facilities may also be affected by the availability and cost of rail or other transportation systems available for servicing these facilities.
The loss of access to rail capacity could create temporary disruption until the access is restored, significantly impairing our ability to receive coal and resulting in materially decreased revenues. Our ability to open new cokemaking facilities may also be affected by the availability and cost of rail or other transportation systems available for servicing these facilities.
Depending upon the nature and severity of such events, we could be exposed to significant financial loss, reputational damage, potential civil or criminal government or other regulatory enforcement actions, or private litigation, the settlement or outcome of which could have a material and adverse effect on our financial condition or results of operations.
Depending upon the nature and severity of such events, we could be exposed to significant financial loss, reputational damage, potential civil or criminal government or other regulatory enforcement 18 Table of Contents actions, or private litigation, the settlement or outcome of which could have a material and adverse effect on our financial condition or results of operations.
We may be unable to obtain, maintain or renew permits or leases necessary for our operations, which could materially reduce our production, cash flows or profitability. Our cokemaking and logistics operations require us to obtain a number of permits that impose strict regulations on various environmental and operational matters.
We may be unable to obtain, maintain or renew permits or leases necessary for our operations, which could materially and adversely affect our production, cash flows or profitability. Our cokemaking and logistics operations require us to obtain a number of permits that impose strict regulations on various environmental and operational matters.
The nature of our operations exposes us to possible litigation claims in the future, including disputes relating to our operations and commercial and contractual arrangements. Although we make every effort to avoid litigation, these matters are not totally within our control.
The nature of our operations exposes us to possible litigation claims in the future, including disputes relating to our operations and commercial and contractual arrangements. Although we make every effort to avoid litigation, these matters 24 Table of Contents are not totally within our control.
Factors affecting our 24 Table of Contents ability to raise cash through an offering of our common stock or a refinancing of our debt include financial market conditions, the value of our assets, and our performance at the time we need capital.
Factors affecting our ability to raise cash through an offering of our common stock or a refinancing of our debt include financial market conditions, the value of our assets, and our performance at the time we need capital.
Our cokemaking and logistics operations are subject to significant hazards and risks, any of which could result in production and transportation difficulties and disruptions, equipment failures and risk of catastrophic loss, permit non-compliance, pollution, personal injury or wrongful death claims and other damage to our properties and the property of others.
Our cokemaking and logistics operations are subject to significant hazards and risks, any of which could result in production and transportation difficulties and disruptions, equipment failures and risk of catastrophic loss, non-compliance with our operating permits, pollution, personal injury or wrongful death claims and other damage to our properties and the property of others.
Our coke production obligations at our Jewell cokemaking facility and one half of our Haverhill cokemaking facility require us to deliver coke to certain customers via railcar. We have entered into long-term rail transportation agreements to meet these obligations.
Our coke production obligations at our Jewell cokemaking facility and our Haverhill cokemaking facility require us to deliver coke to certain customers via railcar. We have entered into long-term rail transportation agreements to meet these obligations.
Accordingly, decreased demand for coal, or other bulk commodities, or a decrease in the market price of coal, or other bulk commodities, could have a material adverse effect on the results of operations or financial condition of our logistics business.
Accordingly, 22 Table of Contents decreased demand for coal, or other bulk commodities, or a decrease in the market price of coal, or other bulk commodities, could have a material adverse effect on the results of operations or financial condition of our logistics business.
Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all our debt.
Our failure to comply with those covenants, or covenants of any new agreements, could result in an event of default which, if not cured or waived, could result in the acceleration of all our debt.
For example, new laws and regulations governing data privacy and the unauthorized disclosure of confidential information, including the European Union General Data Protection Regulation and recent California legislation (which, among other things, provides for a private right of action), pose increasingly complex compliance challenges and could potentially elevate our costs over time.
For example, new laws and regulations governing data privacy and the unauthorized disclosure of confidential information including, but not limited to the European Union General Data Protection Regulation and recent 25 Table of Contents California legislation (which, among other things, provides for a private right of action), pose increasingly complex compliance challenges and could potentially elevate our costs over time.
Non-governmental organizations, environmental groups and individuals have certain rights to engage in the permitting process, and may 17 Table of Contents comment upon, or object to, the requested permits. Such persons also have the right to bring citizen’s lawsuits to challenge the issuance of permits, or the validity of environmental impact statements related thereto.
Non-governmental organizations, environmental groups and individuals have certain rights to engage in the permitting process, and may comment upon, or object to, the requested permits. Such persons may also have the right to bring citizen’s lawsuits to challenge the issuance of permits, or the validity of environmental evaluations related thereto.
A portion of our strategy to grow our business is dependent upon our ability to acquire and operate new assets that result in an increase in our earnings. We may not derive the financial returns we expect on our investment in such additional assets or such operations may not be profitable.
A portion of our strategy to grow our business is dependent upon our ability to acquire and operate new assets that result in an increase in our earnings. We may not realize the expected financial returns from our investment in such additional assets, or such operations may not be profitable.
Business-Legal and Regulatory Requirements-Regulation of Operations.” General Risks Sustained uncertainty in financial markets, or unfavorable economic conditions in the industries in which our customers operate, may lead to a reduction in the demand for our products and services, and adversely impact our cash flows, financial position or results of operations.
General Risks Sustained uncertainty in financial markets, or unfavorable economic conditions in the industries in which our customers operate, may lead to a reduction in the demand for our products and services, and adversely impact our cash flows, financial position or results of operations.
We previously have been and could again in the future be subject to litigation for alleged bodily injuries or property damage arising from claimed exposure to emissions or hazardous substances allegedly used, released, or disposed of by us, as well as litigation related to climate change by governments, private entities, or individuals.
We previously have been and could again in the future be subject to litigation for alleged personal injury or property damage arising from claimed exposure to emissions or hazardous substances allegedly used, released, or disposed of by us, as well as litigation related to climate change by governments, private entities, or individuals. We make every effort to avoid litigation.
We are subject to the credit risk of our major customers and other parties. If we fail to adequately assess the creditworthiness of existing or future customers or unanticipated deterioration of their creditworthiness, any resulting increase in nonpayment or nonperformance by them could have a material adverse effect on our cash flows, financial position or results of operations.
If we fail to adequately assess the creditworthiness of existing or future customers or unanticipated deterioration of their creditworthiness, any resulting increase in nonpayment or nonperformance by them could have a material adverse effect on our cash flows, financial position or results of operations.
Even where insurance coverage applies, insurers may contest their obligations to make payments. Our financial condition, results of operations and cash flows could be materially and adversely affected by losses and liabilities from un-insured or under-insured events, as well as by delays in the payment of insurance proceeds, or the failure by insurers to make payments.
Our financial condition, results of operations and cash flows could be materially and adversely affected by losses and liabilities from un-insured or under-insured events, as well as by delays in the payment of insurance proceeds, or the failure by insurers to make payments.
Events and conditions that could result in impairment in the value of our long-lived assets include: the impact of a downturn in the global economy, competition, advances in technology, adverse changes in the regulatory environment, new contracts and/or modification, termination or non-renewal of existing contracts, and other factors leading to a reduction in expected long-term sales or profitability, 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.
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.
If one or more of these customers were to significantly reduce its purchases of coke or logistics services from us without a make-whole payment, or default on their agreements with us, or terminate or fail to renew their agreements with us, or if we were unable to sell such coke or logistics services to these customers on terms as favorable to us as the terms under our current agreements, our cash flows, financial position, permit compliance, or results of operations could be materially and adversely affected.
If one or more of these customers were to significantly reduce its purchases of coke or logistics services from us without a make-whole payment, or default on their agreements with us, or terminate or fail to renew their agreements with us, or if we were unable to sell such coke or logistics services to these customers on terms as favorable to us as the terms under our current agreements, our cash flows, financial position, permit compliance, or results of operations could be materially and adversely affected. 15 Table of Contents Impairment in the carrying value of long-lived assets could materially and adversely affect our business, financial condition and results of operations.
Risks Inherent in Our Business and Industry Our cokemaking and logistics businesses are subject to operating risks, some of which are beyond our control. Equipment failures or deterioration of assets, may lead to production curtailments, shutdowns, impairments, or additional expenditures, which could have a material adverse effect on our results of operations and financial condition.
Risks Inherent in Our Business and Industry Our cokemaking and logistics businesses are subject to operating risks, some of which are beyond our control. Equipment failures or deterioration of assets, may lead to production curtailments, shutdowns, impairments, or additional expenditures, which could materially and adversely affect our results of operations and financial condition.
Our businesses are subject to inherent risks, some for which we maintain third party insurance and some for which we self-insure. We may incur losses and be subject to liability claims that could have a material adverse effect on our financial condition, results of operations or cash flows.
Our businesses are subject to inherent risks, some for which we maintain third party insurance and some for which we self-insure. We may incur losses and be subject to liability claims that could materially and adversely affect our financial condition, results of operations or cash flows.
We face competition, both in our cokemaking operations and in our logistics business, which has the potential to reduce demand for our products and services, and that could have an adverse effect on our financial condition and results of operations.
We face competition, both in our cokemaking operations and in our logistics business, which has the potential to reduce demand for our products and services, and that could materially and adversely affect our financial condition and results of operations.
Impairment in the carrying value of long-lived assets could adversely affect our business, financial condition and results of operations. 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 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.
Item 1A. Risk Factors In addition to the other information included in this Annual Report on Form 10-K and in our other filings with the SEC, the following risk factors should be considered in evaluating our business and future prospects.
In addition to the other information included in this Annual Report on Form 10-K and in our other filings with the SEC, the following risk factors should be considered in evaluating our business and future prospects. These risk factors represent what we believe to be the known material risk factors with respect to us and our business.
If any one or more of these customers were to become financially distressed and unable to pay us, significantly reduce their purchases of coke, steam, or electricity from us, or if we were unable to sell coke or electricity to them on terms as favorable to us as the terms under our current agreements, our cash flows, financial position, permit compliance or results of operations may be materially and adversely affected.
If any one or more of these customers were to become financially distressed and unable to pay us, significantly reduce their purchases of coke, steam, or electricity from us, or if we were unable to sell coke or electricity to them on terms as favorable to us as the terms under our current agreements, our cash flows, financial position, permit compliance or results of operations may be materially and adversely affected. 19 Table of Contents Further, because of certain technological design constraints, we do not have the ability to shut down our cokemaking operations if we do not have adequate customer demand.
Additional capital may not be available on favorable terms, or at all, which could compromise our ability to meet our financial obligations and grow our business. We may need to raise additional capital to fund operations in the future or to finance acquisitions or other business objectives. Such additional capital may not be available on favorable terms or at all.
We may need to raise additional capital to fund operations in the future or to finance acquisitions or other business objectives. Such additional capital may not be available on favorable terms or at all. Lack of sufficient capital resources could significantly limit our ability to meet our financial obligations or to take advantage of business and strategic opportunities.
Regulatory requirements, including those related to GHGs, and various CAA programs, may change in the future in a manner that could result in substantially increased capital, operating and compliance costs, which could have an adverse effect on our financial condition and results of operations.
In addition, such regulatory requirements, including those related to GHGs, and various CAA programs, may change in the future in a manner that could result in substantially increased capital, operating and compliance costs, materially and adversely affecting our cash flows, financial condition, or results of operations.
These risk factors represent what we believe to be the known material risk factors with respect to us and our business. Our business, operating results, cash flows and financial condition are subject to these risks and uncertainties, any of which could cause actual results to vary materially from recent results or from anticipated future results.
Item 1A. Risk Factors Our business, operating results, cash flows and financial condition are subject to these risks and uncertainties, any of which could cause actual results to vary materially and adversely from recent results or from anticipated future results.
Such transactions also could result in a number of financial consequences having a material adverse effect on our results of operations and our financial position, including reduced cash balances; higher fixed expenses; the incurrence of debt and contingent liabilities (including indemnification obligations); restructuring charges; loss of customers, suppliers, distributors, licensors or employees; legal, accounting and advisory fees; and impairment charges. 18 Table of Contents Our operating results have been and may continue to be affected by fluctuations in our costs of production, and, if we cannot pass increases in our costs of production to our customers, our financial condition, results of operations and cash flows may be negatively affected.
Such transactions also could result in a number of financial consequences having a material adverse effect on our results of operations and our financial position, including reduced cash balances; higher fixed expenses; the incurrence of debt and contingent liabilities (including indemnification obligations); restructuring charges; loss of customers, suppliers, distributors, licensors or employees; legal, accounting and advisory fees; and impairment charges.
Disruptions to our supply of coal and coal mixing services may reduce the amount of coke we produce and deliver, and if we are not able to cover the shortfall in coal supply or obtain replacement mixing services from other providers, our results of operations and profitability could be adversely affected.
Disruptions to our supply of coal and coal mixing services may reduce the amount of coke we produce and deliver, and if we are not able to cover the shortfall in coal supply or obtain replacement mixing services from other providers, our results of operations and profitability could be adversely affected. 20 Table of Contents Substantially all of the metallurgical coal used to produce coke at our cokemaking facilities is purchased from third-parties under one-year contracts.
If the operations at the Vitória cokemaking facility are interrupted or if certain minimum production levels are not achieved, we will not be able to earn the same licensing and operating fees as we are currently earning, which could have an adverse effect on our financial position, results of operations and cash flows.
If the operations at the Vitória cokemaking facility are interrupted or if certain minimum production levels are not achieved, we will not be able to earn the same licensing and operating fees as we are currently earning, which could have an adverse effect on our financial position, results of operations and cash flows. 21 Table of Contents Additionally, the Vitória, Brazil operations require us to comply with a number of U.S. and international laws and regulations, including those involving anti-bribery, anti-corruption and anti-fraud.
Complying with these and other regulatory requirements, including the terms of our permits, can be costly and time-consuming, and may hinder operations. In addition, these requirements are complex, change frequently and have become more stringent over time.
For a description of environmental laws and matters applicable to us and associated risks, see “Item 1. Business-Legal and Regulatory Requirements.” Complying with these and other regulatory requirements, including the terms of our permits, can be costly and time-consuming, and may hinder operations. In addition, these requirements are complex, change frequently and have become more stringent over time.
If any of these events were to occur, we could incur substantial losses because of personal injury or loss of life, severe damage to and destruction of property and equipment, and pollution or other environmental damage resulting in curtailment or suspension of our related operations. 23 Table of Contents Risks Related to Indebtedness, Liquidity and Financial Position We may need additional capital in the future to meet our financial obligations and to pursue our business objectives.
If any of these events were to occur, we could incur substantial losses because of personal injury or loss of life, severe damage to and destruction of property and equipment, and pollution or other environmental damage resulting in curtailment or suspension of our related operations.
Substantially all of our coke sales currently are made pursuant to long-term contracts with Cliffs Steel and U.S. Steel. We expect these customers, and/or their respective successors in interest, by operation of merger, or otherwise, to continue to account for a significant portion of our revenues for the foreseeable future.
Substantially all of our sales are made to a limited number of customers. We expect these customers, and/or their respective successors in interest, by operation of merger, or otherwise, to continue to account for a significant portion of our revenues for the foreseeable future. We are subject to the credit risk of our major customers and other parties.
Inflation has the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure. The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, increased costs of labor, weakening exchange rates and other similar effects.
The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, increased costs of labor, weakening exchange rates and other similar effects.
Such reduced demand for our coke could adversely affect the certainty of our long-term relationships with our customers, depress coke prices, and limit our ability to enter into new, or renew existing, commercial arrangements with our customers, as well as our ability to sell into the North American spot coke and export coke markets, and could materially and adversely affect our future revenues and profitability. 20 Table of Contents Certain provisions in our long-term coke agreements may result in economic penalties to us, or may result in termination of our coke sales agreements for failure to meet minimum volume requirements, coal-to-coke yields or other required specifications, and certain provisions in these agreements and our energy sales agreements may permit our customers to suspend performance.
Such reduced demand for our coke could adversely affect the certainty of our long-term relationships with our customers, depress coke prices, and limit our ability to enter into new, or renew existing, commercial arrangements with our customers, as well as our ability to sell into the North American spot coke and export coke markets, and could materially and adversely affect our future revenues and profitability.
If our assets do not generate the amount of future cash flows that we expect, or we are not able to execute on capital maintenance or procure replacement assets in an economically feasible manner, our future results of operations may be materially and adversely affected. 15 Table of Contents The financial performance of our cokemaking and logistics businesses is substantially dependent upon a limited number of customers, and the loss of any of these customers, or any failure by them to perform under their contracts with us, could materially and adversely affect our financial condition, permit compliance, results of operations and cash flows.
The financial performance of our cokemaking and logistics businesses is substantially dependent upon a limited number of customers, and the loss of any of these customers, or any failure by them to perform under their contracts with us, could materially and adversely affect our financial condition, permit compliance, results of operations and cash flows.
Our operations result in emissions of various substances to the air, including GHGs, use hazardous materials, and generate solid and hazardous waste. We have in the past and could in the future be subject to claims under federal, state and local laws and regulations arising from these activities, including for the investigation and clean-up of soil, surface water, or groundwater.
We have in the past and could in the future be subject to claims under federal, state and local laws and regulations arising from these activities, including for the investigation and clean-up of soil, surface water, or groundwater. Some environmental laws also can impose liability regardless of fault or legality at the time in question, including the characterization of materials.
Failure by us or our intermediaries to comply with the foregoing or other anti-bribery, anti-corruption and anti-fraud laws could adversely impact our results of operations, financial position, and cash flows, damage our reputation and negatively impact our stock price. 22 Table of Contents Risks Related to Our Logistics Business The growth and success of our logistics business depends upon our ability to find and contract for adequate throughput volumes, and an extended decline in demand for coal could affect the customers for our logistics business adversely.
Failure by us or our intermediaries to comply with the foregoing or other anti-bribery, anti-corruption and anti-fraud laws could adversely impact our results of operations, financial position, and cash flows, damage our reputation and negatively impact our stock price.
As cyber-attacks continue to evolve, we may be required to expend additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities. 26 Table of Contents We are or may become subject to privacy and data protection laws, rules and directives relating to the processing of personal data in the states and countries where we operate.
As cyber-attacks continue to evolve, we may be required to expend additional resources to continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities.
The growth of cyber-attacks has resulted in an evolving legal landscape which imposes costs that are likely to increase over time.
We are or may become subject to privacy and data protection laws, rules and directives relating to the processing of personal data in the states and countries where we operate. The growth of cyber-attacks has resulted in an evolving legal landscape which imposes costs that are likely to increase over time.
We may not be able to refinance this debt, or may be forced to do so on terms substantially less favorable than our currently outstanding debt. We may be forced to delay or not make capital expenditures, which may adversely affect our competitive position and financial results. We may be adversely affected by the effects of inflation.
We may be forced to delay or not make capital expenditures, which may adversely affect our competitive position and financial results. We may be adversely affected by the effects of inflation. Inflation has the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure.
As alternative processes for production of steel become more widespread, the demand for blast furnace coke, including the coke we produce, may be significantly reduced. • Logistics business : Decreased throughput and utilization of our logistics assets could result indirectly due to competition in the electrical power generation business from abundant and relatively inexpensive supplies of 16 Table of Contents natural gas displacing thermal coal as a fuel for electrical power generation by utility companies.
In addition, decreased throughput and utilization of our logistics assets could result indirectly due to competition in: (i) the electrical power generation business from abundant and relatively inexpensive supplies of natural gas displacing thermal coal as a fuel for electrical power generation by utility companies; (ii) the steel industry from processes such as electric arc furnaces, or blast furnace injection of pulverized coal or natural gas reducing demand for metallurgical coals handled through our logistics facilities; and/or (iii) the barge unloading business from service alternatives, such as mid-stream operations.
In addition, certain risks, such as certain environmental and pollution risks, and certain cybersecurity risks, generally are not fully insurable. We must compensate employees for work-related injuries. If we do not make adequate provision for our workers' compensation liabilities, or we are pursued for applicable sanctions, costs, and liabilities, our operations and our profitability could be adversely affected.
In addition, certain risks, such as certain environmental and pollution risks, and 17 Table of Contents certain cybersecurity risks, generally are not fully insurable. We must compensate employees for work-related injuries.
To the extent we are subject to any such activism, it may require us to incur costs or otherwise adversely impact our business. Many of our customers, business partners, and suppliers may be subject to similar expectations, which may augment or create additional risks, including risks that may not be known to us.
Many of our customers, business partners, and suppliers may be subject to similar expectations, which could create additional risks, including risks unknown to us. Failure to appropriately navigate any of these considerations could materially and adversely impact our reputation, financial condition, and/or results of operations.
An increase in severe weather events and flooding may adversely impact us, our operations, and our ability to procure raw materials and manufacture and transport our products which could have a material adverse effect on our financial condition and results of operations. Extreme weather conditions may increase our costs, temporarily impact our production capabilities or cause damage to our facilities.
Extreme weather and temperature conditions, such as storms, fires, and flooding, may increase our costs, impact our production capabilities, damage our facilities, contribute to workplace hazards, and materially and adversely affect our ability to procure raw materials, and/or manufacture and transport our products.
Such additional facilities could compete directly with us in specific markets now served by our logistics business. Certain coal mining companies and independent terminal operators in some areas may compete directly with our logistics facilities. In some markets, trucks may competitively deliver mined coal to certain shorter-haul destinations, resulting in reduced utilization of existing terminal capacity.
In some markets, trucks may competitively deliver products to certain shorter-haul destinations, resulting in reduced utilization of existing terminal capacity.
Although we make every effort to avoid litigation, these matters are not totally within our control. We will contest these matters vigorously and have made insurance claims where appropriate, but because of the uncertain nature of litigation and coverage decisions, we cannot predict the outcome of these matters.
However, such matters are not totally within our control, and due to the inherently uncertain nature of litigation, we cannot predict the outcome of such matters.
For a description of certain environmental laws and matters applicable to us and associated risks, see “Item 1. Business-Legal and Regulatory Requirements.” Our operations may impact the environment or cause exposure to hazardous substances, which could result in material liabilities to us.
Our operations may impact the environment or cause exposure to hazardous pollutants, which could result in material liabilities to us. Our operations result in emissions of various substances to the air, including GHGs and hazardous air pollutants. Our operations also generate solid and hazardous waste.
A new or more stringent greenhouse gas emission standard designed to address climate change and physical effects attributed to climate change may adversely affect our operations and impose significant costs on our business and our customers and suppliers.
Physical effects attributed to, and various parties’ efforts to respond to climate-related changes, could materially and adversely affect our operations and impose significant costs on our business and our customers and suppliers. We are subject to various climate-related risks.
Removed
In addition, competition in the steel industry from processes such as electric arc furnaces, or blast furnace injection of pulverized coal or natural gas, may reduce the demand for metallurgical coals processed through our logistics facilities. In the future, additional coal handling facilities and terminals with rail and/or barge access may be constructed in the Eastern U.S.
Added
If our assets do not generate the amount of future cash flows that we expect, or we are not able to execute on capital maintenance or procure replacement assets in an economically feasible manner, our future results of operations may be materially and adversely affected.
Removed
Some environmental laws also can impose liability regardless of fault or legality at the time in question, including the characterization of materials.
Added
As alternative processes for production of steel become more widespread, the demand for blast furnace coke, including the coke we produce, may be significantly reduced. • Logistics business : Other logistics facilities and independent terminal operations in some areas may compete directly with our logistics facilities.
Removed
Our operations require a reliable supply of equipment, replacement parts and metallurgical coal.
Added
In the future, additional logistics facilities and terminals with rail and/or barge access may be constructed in the Gulf Coast and East Coast regions, and such additional facilities and terminals could compete directly with us in specific markets now served by our CMT and KRT facilities, respectively.
Removed
There is increasing regulatory attention concerning the issue of climate change and the impact of GHGs, particularly from fossil fuels, which are integral to our cokemaking and logistics businesses.
Added
Other logistics facilities, both global and domestic, may compete with our coal handling exports out of the Gulf Region, which may reduce the demand for our CMT facility.
Removed
Our business and operations, as well as the business and operations of our key suppliers and customers, may become subject to legislation or regulation intended to limit GHG emissions or the use of fossil fuels. It is not possible to foresee the details of such legislation or regulations or changes in the economy or their resulting effects on our business.
Added
If we do not make adequate provision for our workers' compensation liabilities, or we are pursued for applicable sanctions, costs, and liabilities, our operations and our profitability could be adversely affected. Even where insurance coverage applies, insurers may contest their obligations to make payments.
Removed
Because our coking process is dependent on coal as a raw material and the coking process generates carbon dioxide, we are limited in our ability to reduce our GHG emissions and could be affected by future regulation of GHGs.
Added
Our operating results have been and may continue to be affected by fluctuations in our costs of production, and, if we cannot pass increases in our costs of production to our customers, our financial condition, results of operations and cash flows may be negatively affected. Our operations require a reliable supply of equipment, replacement parts and metallurgical coal.
Removed
Future legislation or regulation regarding climate change and GHG emissions could have a material adverse effect on our financial condition and results of operations. Climate change may cause changes in weather patterns and increase the frequency or severity of weather events and flooding.
Added
Various policymakers have adopted, or are considering adopting, regulations regarding GHGs, particularly from fossil fuels, which are integral to our cokemaking and logistics businesses. Such regulations range from provisions to reduce GHG emissions, either directly or indirectly (such as through carbon pricing), to requirements for disclosure of climate-related information, any of which may result in substantial compliance costs.
Removed
For example, our terminals are located near bodies of water and may be impacted by flooding or hurricanes, disrupting our or our customers' ability to move products. Our coke plants are also generally located near bodies of water and may be impacted by the effects of climate change.
Added
Moreover, pressure to reduce GHG emissions may also contribute to competition with alternatives to our products. Our operations may be impacted by climate-related changes in weather, temperature, hydrological patterns, and/or increased frequency or severity of natural disasters.
Removed
Additionally, extreme cold could prevent coal delivery and unloading at our coke plants, impeding operation, or create a more hazardous outdoor working environment for our employees . Investor interest in climate change, fossil fuels, and sustainability could adversely affect our business and our stock price.
Added
While we aim to manage such risks, we cannot guarantee that such mitigation efforts will be successful, or that insurance will continue to be available at costs we deem acceptable. Any of these transition or physical risks associated with climate change could materially and adversely affect our reputation, financial condition, and results of operations.
Removed
Climate change and sustainability have increasingly become important topics to investors and the community at large.
Added
Stakeholder scrutiny of sustainability matters could materially and adversely affect our business and our stock price. There continues to be significant attention to climate, civil and human rights, and other sustainability issues by various stakeholders. Responding to such matters can be complex.
Removed
As such, there have been recent efforts aimed at the investment community to encourage the divestment of shares of companies associated with energy, coal and/or fossil fuels, as well as to pressure lenders and other financial services companies to limit or curtail business relations with coal and fossil fuel companies.
Added
Methodologies and data for measuring and reporting on sustainability matters continue to evolve, as does our own approach to such matters, and we cannot guarantee that our approach will align with the preferences or interpretations of any particular stakeholder. While we take actions to manage our sustainability profile, such initiatives may be costly and may not have the desired effect.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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We engage outside third-party experts, cybersecurity advisors, and auditors to conduct regular risk assessments, penetration testing, and vulnerability analyses. Our enterprise risk management and cybersecurity-specific risk identification 27 Table of Contents programs include consideration of third-party risks and informs our selection and oversight of third-party service providers.
We engage outside third-party experts, cybersecurity advisors, and auditors to conduct regular risk assessments, penetration testing, and vulnerability analyses. Our enterprise risk management and cybersecurity-specific risk identification programs include consideration of third-party risks and informs our selection and oversight of third-party service providers.
We conduct appropriate due diligence on third-party service providers, vendors, and partners before establishing relationships with them, and we monitor such relationships on an ongoing basis. We also periodically review the Company’s cyber insurance policies to ensure appropriate coverage.
We conduct appropriate due diligence on third-party service providers, vendors, and partners before establishing relationships with them, and we monitor such relationships on an ongoing basis.
Incident Response and Vulnerability Management In the event of a cybersecurity incident, our incident response plans are designed to respond with an incident response team to address any breaches. Our ongoing vulnerability management program complements our incident response capabilities.
We also periodically review the Company’s cyber insurance policies to ensure appropriate coverage. 26 Table of Contents Incident Response and Vulnerability Management In the event of a cybersecurity incident, our incident response plans are designed to respond with an incident response team to address any breaches. Our ongoing vulnerability management program complements our incident response capabilities.

Item 2. Properties

Properties — owned and leased real estate

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Properties We own the following real property as of December 31, 2023: • Approximately 900 acres in Vansant (Buchanan County), Virginia on which the Jewell cokemaking facility is located, along with the offices, warehouse and support buildings for our Jewell coke affiliates as well as other general property holdings and unoccupied land. • Approximately 400 acres in Franklin Furnace (Scioto County), Ohio, at and around the area where the Haverhill cokemaking facility (both the first and second phases) is located. • Approximately 45 acres in Granite City (Madison County), Illinois, adjacent to the U.S.
Properties We own the following real property as of December 31, 2024: • Approximately 900 acres in Vansant (Buchanan County), Virginia on which the Jewell cokemaking facility is located, along with the offices, warehouse and support buildings for our Jewell coke affiliates as well as other general property holdings and unoccupied land. • Approximately 400 acres in Franklin Furnace (Scioto County), Ohio, at and around the area where the Haverhill cokemaking facility (both the first and second phases) is located. • Approximately 45 acres in Granite City (Madison County), Illinois, adjacent to the U.S.
James Parish), Louisiana, on which CMT is located. We lease the following real property as of December 31, 2023: • Approximately 90 acres of land located in East Chicago (Lake County), Indiana, on which the Indiana Harbor cokemaking facility is located and the coal handling and/or mixing facilities (Lake Terminal) that service the Indiana Harbor cokemaking facility.
James Parish), Louisiana, on which CMT is located. We lease the following real property as of December 31, 2024: • Approximately 90 acres of land located in East Chicago (Lake County), Indiana, on which the Indiana Harbor cokemaking facility is located and the coal handling and/or mixing facilities (Lake Terminal) that service the Indiana Harbor cokemaking facility.
These agreements convey mining rights to us in exchange for payment of certain immaterial royalties and/or fixed fees.
These agreements convey mining rights to us in exchange for payment of certain immaterial royalties and/or fixed fees. 27 Table of Contents
As lessee of the property, we are responsible for restoring the leased property to a safe and orderly condition. • Approximately 310 acres of land located in Buchanan County, Virginia at and around the area where our Jewell coal handling terminal is located. • Approximately 30 acres in Belle (Kanawha County), West Virginia, on which KRT has a terminal for its mixing and/or handling services along the Kanawha River. • Our corporate headquarters is located in leased office space in Lisle, Illinois under a 9 year lease that commenced in 2021. 28 Table of Contents While the Company completed the disposal of its coal mining business in April 2016, we continue to have rights to small parcels of land, mineral rights and coal mining rights for approximately 5 thousand acres of land in Buchanan and Russell Counties, Virginia.
As lessee of the property, we are responsible for restoring the leased property to a safe and orderly condition. • Approximately 310 acres of land located in Buchanan County, Virginia at and around the area where our Jewell coal handling terminal is located. • Approximately 30 acres in Belle (Kanawha County), West Virginia, on which KRT has a terminal for its mixing and/or handling services along the Kanawha River. • Our corporate headquarters is located in leased office space in Lisle, Illinois under a 9 year lease that commenced in 2021.
Added
While the Company completed the disposal of its coal mining business in April 2016, we continue to have rights to small parcels of land, mineral rights and coal mining rights for approximately 4,200 acres of land in Buchanan and Russell Counties, Virginia.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Our management believes that any liabilities that may arise from such matters would not likely be material in relation to our business or our consolidated financial position, results of operations or cash flows at December 31, 2023.
Our management believes that any liabilities that may arise from such matters would not likely be material in relation to our business or our consolidated financial position, results of operations or cash flows at December 31, 2024.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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The information concerning mine safety violations and other regulatory matters that we are required to report in accordance with Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.014) is included in Exhibit 95.1 to this Annual Report on Form 10-K. 29 Table of Contents PART II
The information concerning mine safety violations and other regulatory matters that we are required to report in accordance with Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.014) is included in Exhibit 95.1 to this Annual Report on Form 10-K. 28 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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There have been no share repurchases since the first quarter of 2020 as the Company has suspended additional repurchases, leaving $96.3 million available under the authorized repurchase program as of December 31, 2023. Item 6. [Reserved] 31 Table of Contents
There have been no share repurchases since the first quarter of 2020 as the Company has suspended additional repurchases, leaving $96.3 million available under the authorized repurchase program as of December 31, 2024. Item 6. [Reserved] 30 Table of Contents
The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from December 31, 2018 to December 31, 2023. In selecting the indices for comparison, we considered market capitalization and industry or line-of-business.
The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from December 31, 2019 to December 31, 2024. In selecting the indices for comparison, we considered market capitalization and industry or line-of-business.
While we do not manufacture steel, we do produce coke, an essential ingredient in the blast furnace production of steel. Accordingly, we believe the NASDAQ U.S. Benchmark Iron & Steel Index is appropriate for comparison purposes. 30 Table of Contents Holders As of February 16, 2024, we had 7,816 holders of record of our common stock.
While we do not manufacture steel, we do produce coke, an essential ingredient in the blast furnace production of steel. Accordingly, we believe the NASDAQ U.S. Benchmark Iron & Steel Index is appropriate for comparison purposes. 29 Table of Contents Holders As of February 14, 2025, we had 7,408 holders of record of our common stock.
The S&P Small Cap 600 Index is a broad equity market index comprised of companies of between $900 million and $5.8 billion. The Company is a part of this index. The NASDAQ U.S. Benchmark Iron and Steel Index is comprised of U.S.-based steel and metals manufacturing and coal and iron ore mining companies.
The S&P Small Cap 600 Index is a broad equity market index comprised of companies of between $1.1 billion and $7.4 billion. The Company is a part of this index. The NASDAQ U.S. Benchmark Iron and Steel Index is comprised of U.S.-based steel and metals manufacturing and coal and iron ore mining companies.
Dividends Our Board of Directors declared the following dividends during 2023 and through February 22, 2024: Date Declared Record Date Dividend Per Share Payment Date February 2, 2023 February 16, 2023 $0.08 March 1, 2023 May 4, 2023 May 18, 2023 $0.08 June 1, 2023 August 1, 2023 August 17, 2023 $0.10 September 1, 2023 November 1, 2023 November 15, 2023 $0.10 December 1, 2023 February 1, 2024 February 15, 2024 $0.10 March 1, 2024 Our payment of dividends in the future, if any, will be determined by our Board of Directors and will depend on business conditions, our financial condition, earnings, liquidity and capital requirements, covenants in our debt agreements and other factors.
Dividends Our Board of Directors declared the following dividends during 2024 and through February 21, 2025: Date Declared Record Date Dividend Per Share Payment Date February 1, 2024 February 15, 2024 $0.10 March 1, 2024 May 1, 2024 May 15, 2024 $0.10 June 3, 2024 July 31, 2024 August 15, 2024 $0.12 September 3, 2024 October 31, 2024 November 15, 2024 $0.12 December 2, 2024 January 30, 2025 February 17, 2025 $0.12 March 3, 2025 Our payment of dividends in the future, if any, will be determined by our Board of Directors and will depend on business conditions, our financial condition, earnings, liquidity and capital requirements, covenants in our debt agreements and other factors.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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See Note 13 to our consolidated financial statements. Capital Requirements and Expenditures Our operations are capital intensive, requiring significant investment to upgrade or enhance existing operations and to meet environmental and operational regulations. The level of future capital expenditures will depend on various factors, including market conditions and customer requirements, and may differ from current or anticipated levels.
See Note 13 to our consolidated financial statements. Capital Requirements and Expenditures Our operations are capital intensive, requiring significant investment to upgrade or enhance existing operations and to meet environmental and operational regulations. The level of future capital expenditures will depend on various factors, including market conditions, regulatory requirements and customer requirements, and may differ from current or anticipated levels.
Net i ncome attributable to noncontrolling interests represents a 14.8 percent third-party interest in our Indiana Harbor cokemaking facility and fluctuates with the financial performance of that facility. 33 Table of Contents Results of Reportable Business Segments We report our business results through three reportable segments: • Domestic Coke consists of our Jewell facility, located in Vansant, Virginia, our Indiana Harbor facility, located in East Chicago, Indiana, our Haverhill facility, located in Franklin Furnace, Ohio, our Granite City facility located in Granite City, Illinois, and our Middletown facility located in Middletown, Ohio. • Brazil Coke consists of operations in Vitória, Brazil, where we operate the ArcelorMittal Brazil cokemaking facility. • Logistics consists of CMT, located in Convent, Louisiana, KRT, located in Ceredo and Belle, West Virginia, and Lake Terminal, located in East Chicago, Indiana.
Net i ncome attributable to noncontrolling interests represents a 14.8 percent third-party interest in our Indiana Harbor cokemaking facility and fluctuates with the financial performance of that facility. 32 Table of Contents Results of Reportable Business Segments We report our business results through three reportable segments: • Domestic Coke consists of our Jewell facility, located in Vansant, Virginia, our Indiana Harbor facility, located in East Chicago, Indiana, our Haverhill facility, located in Franklin Furnace, Ohio, our Granite City facility located in Granite City, Illinois, and our Middletown facility located in Middletown, Ohio. • Brazil Coke consists of operations in Vitória, Brazil, where we operate the ArcelorMittal Brazil cokemaking facility. • Logistics consists of CMT, located in Convent, Louisiana, KRT, located in Ceredo and Belle, West Virginia, and Lake Terminal, located in East Chicago, Indiana.
A decrease of 25 basis points in the discount rate would have increased black lung expense by $1.4 million in 2023. (2) The current portion of the black lung liability was $5.0 million and $5.9 million at December 31, 2023 and 2022, respectively, and was included in accrued liabilities on the Consolidated Balance Sheets.
A decrease of 25 basis points in the discount rate would have increased black lung expense by $0.4 million in 2024. (2) The current portion of the black lung liability was $1.0 million and $5.0 million at December 31, 2024 and 2023, respectively, and was included in accrued liabilities on the Consolidated Balance Sheets.
The preparation 39 Table of Contents of our consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities. The Company's black lung benefit obligations is an item that is subject to such estimates and assumptions.
The preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities. The Company's black lung benefit obligations is an item that is subject to such estimates and assumptions.
As of December 31, 2023, significant contractual obligations related to debt were $500 m illion of principal borrowings and $134.1 million of related interest, which will be repaid through 2029. See Note 11 to our consolidated financial statements. We also have contractual obligations for leases, including land, office space, equipment, railcars and locomotives.
As of December 31, 2024, significant contractual obligations related to debt were $500 m illion of principal borrowings and $109.7 million of related interest, which will be repaid through 2029. See Note 11 to our consolidated financial statements. We also have contractual obligations for leases, including land, office space, equipment, railcars and locomotives.
Logistics The following table explains year-over-year changes in our Logistics segment's sales and other operating revenues, exclusive of intersegment sales, and Adjusted EBITDA results: Sales and other operating revenue, exclusive of intersegment sales Adjusted EBITDA 2023 vs 2022 2023 vs 2022 (Dollars in millions) Beginning $ 77.6 $ 49.7 Transloading volumes (1) (3.3) (13.3) Price/margin impact of mix in transloading services (2) 2.2 3.0 Other (3) (2.5) 4.9 Ending $ 74.0 $ 44.3 Intersegment sales and other operating revenue in our Logistics segment were $22.1 million and $28.9 million as of December 31, 2023 and 2022, respectively.
Logistics The following table explains year-over-year changes in our Logistics segment's sales and other operating revenues, exclusive of intersegment sales, and Adjusted EBITDA results: Sales and other operating revenue, exclusive of intersegment sales Adjusted EBITDA 2024 vs 2023 2024 vs 2023 (Dollars in millions) Beginning $ 74.0 $ 44.3 Transloading volumes (1) 6.1 3.9 Price/margin impact of mix in transloading services (2) 1.2 1.5 Other (3) 1.7 0.7 Ending $ 83.0 $ 50.4 Intersegment sales and other operating revenue in our Logistics segment were $22.9 million and $22.1 million as of December 31, 2024 and 2023, respectively.
Our results of operations include reference to our business operations and market conditions, which are further described in Part I of this document. 2023 Overview Our consolidated results of operations in 2023 were as follows: Year Ended December 31, 2023 (Dollars in millions) Net income $ 63.5 Net cash provided by operating activities $ 249.0 Adjusted EBITDA (1) $ 268.8 (1) See “Non-GAAP Financial Measures” in this Item 7 below for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement.
Our results of operations include reference to our business operations and market conditions, which are further described in Part I of this document. 2024 Overview Our consolidated results of operations in 2024 were as follows: Year Ended December 31, 2024 (Dollars in millions) Net income $ 103.5 Net cash provided by operating activities $ 168.8 Adjusted EBITDA (1) $ 272.8 (1) See “Non-GAAP Financial Measures” in this Item 7 below for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement.
Black Lung Benefit Liabilities The Company has obligations related to coal workers’ pneumoconiosis, or black lung, to provide benefits to certain of its former coal miners and their dependents further described in Note 12 to our consolidated financial statements. We adjust our liability each year based upon actuarial calculations of our expected future payments for these benefits.
Black Lung Benefit Liabilities The Company has obligations to provide certain black lung benefits to legacy coal miners and their dependents further described in Note 12 to our consolidated financial statements. We adjust our liability each year based upon actuarial calculations of our expected future payments for these benefits.
Interest expense, net, benefited in 2023 from lower average debt balances during the current year period and higher interest income of $2.0 million. Income Tax Expense.
Interest expense, net, benefited in 2024 from lower average debt balances during the current year period and higher interest income of $2.6 million. Income Tax Expense.
Management believes Adjusted EBITDA is an important measure of operating performance, which is used by the chief operating decision maker as one of the measurements to evaluate the performance of each of our reportable segments. Adjusted EBITDA should not be considered a substitute for the reported results prepared in accordance with GAAP.
Management believes Adjusted EBITDA is an important measure of operating performance, which is used by the chief operating decision maker as one of the measurements to help determine the allocation of costs and resources to our reportable segments. Adjusted EBITDA should not be considered a substitute for the reported results prepared in accordance with GAAP.
The increase primarily reflects a favorable year-over-year change in primary working capital, which is comprised of accounts receivable, inventories, and accounts payable, driven by the timing of receipts from customers and the impact of the changes in coal prices.
The decrease primarily reflects an unfavorable year-over-year change in primary working capital, which is comprised of accounts receivable, inventories, and accounts payable, driven by the timing of receipts from customers and the impact of the changes in coal prices.
Reconciliation of Non-GAAP Financial Measures Below is a reconciliation of Adjusted EBITDA to net income, which is its most directly comparable financial measure calculated and presented in accordance with GAAP: Years Ended December 31, 2023 2022 2021 (Dollars in millions) Net income $ 63.5 $ 104.9 $ 48.8 Add: Depreciation and amortization expense 142.8 142.5 133.9 Interest expense, net 27.3 32.0 42.5 Loss on extinguishment of debt — — 31.9 Income tax expense 34.3 16.8 18.3 Transaction costs (1) 0.9 1.5 — Adjusted EBITDA $ 268.8 $ 297.7 $ 275.4 (1) Costs incurred as part of the granulated pig iron project with U.S.
Reconciliation of Non-GAAP Financial Measures Below is a reconciliation of Adjusted EBITDA to net income, which is its most directly comparable financial measure calculated and presented in accordance with GAAP: Years Ended December 31, 2024 2023 2022 (Dollars in millions) Net income $ 103.5 $ 63.5 $ 104.9 Add: Depreciation and amortization expense 118.9 142.8 142.5 Interest expense, net 23.4 27.3 32.0 Income tax expense 25.0 34.3 16.8 Transaction costs (1) 2.0 0.9 1.5 Adjusted EBITDA $ 272.8 $ 268.8 $ 297.7 (1) Reflects costs incurred related to potential mergers and acquisitions and the granulated pig iron project with U.S.
We returned meaningful capital to our shareholders through the declaration and payment of a dividend during each quarter of 2023, increasing from $0.08 per share during the first half of the year to $0.10 per share during the second half of the year, representing a quarterly increase of 25 percent.
We returned meaningful capital to our shareholders through the declaration and payment of a dividend during each quarter of 2024, increasing from $0.10 per share during the first half of the year to $0.12 per share during the second half of the year, representing a quarterly increase of 20 percent. Recent Developments • Granite City Contract Extension.
December 31, 2023 2022 (Dollars in millions) Discount rate (1) 4.5 % 4.9 % Active claims 311 332 Total black lung liability, discounted (2) $ 58.2 $ 58.1 Total black lung liability, undiscounted $ 96.0 $ 88.4 (1) The discount rate is determined based on a portfolio of high-quality corporate bonds with maturities that are consistent with the estimated duration of our black lung obligations.
The following table summarizes discount rates utilized, active claims and total black lung liabilities: December 31, 2024 2023 (Dollars in millions) Discount rate (1) 4.5 % 4.5 % Active claims 57 311 Total black lung liability, discounted (2) $ 13.7 $ 58.2 Total black lung liability, undiscounted $ 25.3 $ 96.0 (1) The discount rate is determined based on a portfolio of high-quality corporate bonds with maturities that are consistent with the estimated duration of our black lung obligations.
Critical Accounting Policies and Estimates A summary of our significant accounting policies is included in Note 2 to our consolidated financial statements. Our management believes that the application of these policies on a consistent basis enables us to provide the users of our financial statements with useful and reliable information about our operating results and financial condition.
Our management believes that the application of these policies on a consistent basis enables us to provide the users of our financial statements with useful and reliable information about our operating results and financial condition.
Cash Flow Summary The following table sets forth a summary of the net cash provided by (used in) operating, investing and financing activities for the years ended December 31, 2023 and 2022: Years Ended December 31, 2023 2022 (Dollars in millions) Net cash provided by operating activities $ 249.0 $ 208.9 Net cash used in investing activities (109.2) (70.2) Net cash used in financing activities (89.7) (112.5) Net increase in cash and cash equivalents $ 50.1 $ 26.2 Cash Provided by Operating Activities Net cash provided by operating activities increased $40.1 million to $249.0 million in 2023 as compared to 2022.
Cash Flow Summary The following table sets forth a summary of the net cash provided by (used in) operating, investing and financing activities for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 (Dollars in millions) Net cash provided by operating activities $ 168.8 $ 249.0 Net cash used in investing activities (72.3) (109.2) Net cash used in financing activities (47.0) (89.7) Net increase in cash and cash equivalents $ 49.5 $ 50.1 Cash Provided by Operating Activities Net cash provided by operating activities decreased $80.2 million to $168.8 million in 2024 as compared to $249.0 million in 2023.
Additionally, on January 19, 2023, the Department of Labor issued a new proposed rule that would require self-insured companies to post collateral in the amount of 120 percent of the company's total expected lifetime black lung obligations as determined by the DCMWC. While this new proposed rule is not effective, if finalized, it could potentially reduce the Company's liquidity.
Additionally, on January 19, 2023, the Department of Labor proposed a new rule that would require self-insured operators to post collateral in the amount of 120 percent of the company's total expected lifetime black lung liabilities as determined by the DCMWC. If finalized, the new rule would not apply to SunCoke.
In November 2023, Moody’s Investors Service reaffirmed our corporate credit rating of B1 (positive). Contractual Obligations As of December 31, 2023, significant contractual obligations related to our metallurgical coal procurement contracts, which are generally based on annual coke production requirements at fixed coal prices, were $928.6 million and extend through 2024.
Contractual Obligations As of December 31, 2024, significant contractual obligations related to our metallurgical coal procurement contracts, which are generally based on annual coke production requirements at fixed coal prices, were $876.6 million and extend through 2025.
See the “Non-GAAP Financial Measures” section below for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement. 34 Table of Contents Segment Operating Data The following table sets forth financial and operating data by segment for the years ended December 31, 2023 and 2022: Years Ended December 31, 2023 2022 Increase (Decrease) (Dollars in millions, except per ton amounts) Sales and other operating revenue: Domestic Coke $ 1,954.0 $ 1,856.9 $ 97.1 Brazil Coke 35.2 38.0 (2.8) Logistics 74.0 77.6 (3.6) Logistics intersegment sales 22.1 28.9 (6.8) Elimination of intersegment sales (22.1) (28.9) 6.8 Total sales and other operating revenue $ 2,063.2 $ 1,972.5 $ 90.7 Adjusted EBITDA (1) : Domestic Coke $ 247.8 $ 263.4 $ (15.6) Brazil Coke 9.1 14.5 (5.4) Logistics 44.3 49.7 (5.4) Corporate and Other, net (2) (32.4) (29.9) (2.5) Total Adjusted EBITDA $ 268.8 $ 297.7 $ (28.9) Coke Operating Data: Domestic Coke capacity utilization (3) 101 % 100 % 1 % Domestic Coke production volumes (thousands of tons) 4,049 4,023 26 Domestic Coke sales volumes (thousands of tons) 4,046 4,031 15 Domestic Coke Adjusted EBITDA per ton (4) $ 61.25 $ 65.34 $ (4.09) Brazilian Coke production—operated facility (thousands of tons) 1,558 1,585 (27) Logistics Operating Data: Tons handled (thousands of tons) 20,483 22,291 (1,808) (1) See the “Non-GAAP Financial Measures” section below for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement.
See the “Non-GAAP Financial Measures” section below for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement. 33 Table of Contents Segment Operating Data The following table sets forth financial and operating data by segment for the years ended December 31, 2024 and 2023: Years Ended December 31, 2024 2023 Increase (Decrease) (Dollars in millions, except per ton amounts) Sales and other operating revenue: Domestic Coke $ 1,817.3 $ 1,954.0 $ (136.7) Brazil Coke 35.1 35.2 (0.1) Logistics 83.0 74.0 9.0 Logistics intersegment sales 22.9 22.1 0.8 Elimination of intersegment sales (22.9) (22.1) (0.8) Total sales and other operating revenue $ 1,935.4 $ 2,063.2 $ (127.8) Adjusted EBITDA: Domestic Coke $ 234.7 $ 247.8 $ (13.1) Brazil Coke 9.9 9.1 0.8 Logistics 50.4 44.3 6.1 Corporate and Other, net (1) (22.2) (32.4) 10.2 Total Adjusted EBITDA (2) $ 272.8 $ 268.8 $ 4.0 Coke Operating Data: Domestic Coke capacity utilization (3) 100 % 101 % (1) % Domestic Coke production volumes (thousands of tons) 4,032 4,049 (17) Domestic Coke sales volumes (thousands of tons) 4,028 4,046 (18) Domestic Coke Adjusted EBITDA per ton (4) $ 58.27 $ 61.25 $ (2.98) Brazilian Coke production—operated facility (thousands of tons) 1,579 1,558 21 Logistics Operating Data: Tons handled (thousands of tons) 22,540 20,483 2,057 (1) Corporate and Other, net is not a reportable segment.
Our independent actuarial consultants calculate the present value of the estimated black lung liability annually based on actuarial models utilizing our population of former coal miners, historical payout patterns of both the Company and the industry, actuarial mortality rates, medical costs, death benefits, dependents, discount rates and the current federally mandated payout rates.
Our independent actuarial consultants calculate the present value of the estimated black lung liability annually in the fourth quarter, unless there are changes in facts and circumstances that could materially alter the amount of the liability, based on actuarial models utilizing our population of legacy coal miners, historical payout patterns of both the Company and the industry, expected claim filing patterns, expected claimant success rates, actuarial mortality rates, medical costs, death benefits, dependents, discount rates and the current federally mandated payout rates.
Sales and other operating revenue and costs of products sold and operating expenses increased in 2023 as compared to 2022, primarily driven by the pass-through of higher coal prices in our Domestic Coke segment. Additionally, revenues further benefited from higher volumes on our long-term, take-or-pay agreements.
Sales and other operating revenue and costs of products sold and operating expenses decreased in 2024 as compared to 2023, primarily driven by the pass-through of lower coal prices on our long-term, take-or-pay agreements. Selling, General and Administrative Expenses.
(4) Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke sales volumes. 35 Table of Contents Analysis of Segment Results Domestic Coke The following table explains year-over-year changes in our Domestic Coke segment's sales and other operating revenues and Adjusted EBITDA results: Sales and other operating revenue Adjusted EBITDA 2023 vs 2022 2023 vs 2022 (Dollars in millions) Beginning $ 1,856.9 $ 263.4 Volume (1) 3.9 0.8 Price (2) 103.3 (8.7) Operating and maintenance costs N/A (0.1) Energy and other (3) (10.1) (7.6) Ending $ 1,954.0 $ 247.8 (1) Higher volumes on our long-term, take-or-pay agreements increased both revenues and Adjusted EBITDA during 2023.
(4) Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke sales volumes. 34 Table of Contents Analysis of Segment Results Domestic Coke The following table explains year-over-year changes in our Domestic Coke segment's sales and other operating revenues and Adjusted EBITDA results: Sales and other operating revenue Adjusted EBITDA 2024 vs 2023 2024 vs 2023 (Dollars in millions) Beginning $ 1,954.0 $ 247.8 Volume (1) (6.1) — Price (2) (127.1) (11.1) Operating and maintenance costs (3) N/A 1.2 Energy and other (4) (3.5) (3.2) Ending $ 1,817.3 $ 234.7 (1) Volumes during 2024 were negatively impacted by lower coal-to-coke yields.
Dividends In addition to the $30.7 million in dividends paid to our shareholders during 2023, on February 1, 2024, SunCoke's Board of Directors declared a cash dividend of $0.10 per share of the Company's common stock. This dividend will be paid 38 Table of Contents on March 1, 2024, to stockholders of record on February 15, 2024.
Dividends In addition to the $37.6 million in dividends paid to our shareholders during 2024, on January 30, 2025, SunCoke's Board of Directors declared a cash dividend of $0.12 per share of the Company's common stock. This dividend will be paid on March 3, 2025, to stockholders of record on February 17, 2025. See further discussion in “Item 5.
Refer to Capital Requirements and Expenditures below for further detail. Cash Used in Financing Activities Net cash used in financing activities decreased $22.8 million to $89.7 million in 2023 as compared to $112.5 million in 202 2.
Refer to Capital Requirements and Expenditures below for further detail. 37 Table of Contents Cash Used in Financing Activities Net cash used in financing activities decreased $42.7 million to $47.0 million in 2024 as compared to $89.7 million in 2023.
Brazil Coke Sales and other operating revenue decreased $2.8 million, or 7 percent, to $35.2 million in 2023 compared to $38.0 million in 2022. Adjusted EBITDA decreased $5.4 million, or 37 percent, to $9.1 million in 2023 compared to $14.5 million 36 Table of Contents in 2022.
(3) Revenues and Adjusted EBITDA increased as a result of favorable ancillary revenue. 35 Table of Contents Brazil Coke Sales and other operating revenue decreased $0.1 million, or zero percent, to $35.1 million in 2024 compared to $35.2 million in 2023. Adjusted EBITDA increased $0.8 million, or 9 percent, to $9.9 million in 2024 compared to $9.1 million in 2023.
Ongoing capital expenditures do not include normal repairs and maintenance expenses, which are expensed as incurred; • Expansion capital expenditures to acquire and/or construct complementary assets to grow our business and to expand existing facilities as well as capital expenditures made to enable the renewal of a coke sales agreement and/or logistics service agreement and on which we expect to earn a reasonable return; and • Environmental remediation project expenditures required to implement design changes to ensure that our existing facilities operate in accordance with existing environmental permits.
Ongoing capital expenditures do not include normal repairs and maintenance expenses, which are expensed as incurred; • Expansion capital expenditures to acquire and/or construct complementary assets to grow our business and to expand existing facilities as well as capital expenditures made to enable the renewal of a coke sales agreement and/or logistics service agreement and on which we expect to earn a reasonable return; and • Environmental project expenditures to ensure that our existing facilities operate in accordance with changing regulations. 38 Table of Contents The following table summarizes our capital expenditures: Years Ended December 31, 2024 2023 (Dollars in millions) Ongoing capital $ 64.3 $ 94.5 Expansion capital (1) 8.6 14.7 Total capital expenditures (2) $ 72.9 $ 109.2 (1) Capital expenditures for the year ended December 31, 2023 includes capital spending in connection with the foundry cokemaking growth project.
This decrease was offset by an increase in dividends paid of $7.1 million as compared to the prior year period, primarily as a result of an increase in the dividend per share amount, as well as higher cash distributions made to noncontrolling interests of $7.4 million in the current year period.
These decreases were partially offset by an increase to dividends paid of $6.9 million as compared to the prior year period, primarily as a result of an increase in the dividend per share amount.
We believe our current resources are sufficient to meet our working capital requirements for our current business for at least the next 12 months and thereafter for the foreseeable future.
We believe our current resources are sufficient to meet our working capital requirements for our current 36 Table of Contents business for at least the next 12 months and thereafter for the foreseeable future. As of December 31, 2024, we had $189.6 million of cash and cash equivalents and $350.0 million of borrowing availability under our Revolving Facility.
Refer to Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Annual Report on Form 10-K for the year-over-year analysis of consolidated results of operations for the year ended December 31, 2022 as compared to the year ended December 31, 2021. 32 Table of Contents Years Ended December 31, 2023 2022 Increase (Decrease) (Dollars in millions) Revenues Sales and other operating revenue $ 2,063.2 $ 1,972.5 $ 90.7 Costs and operating expenses Cost of products sold and operating expenses 1,724.6 1,604.9 119.7 Selling, general and administrative expenses 70.7 71.4 (0.7) Depreciation and amortization expense 142.8 142.5 0.3 Total costs and operating expenses 1,938.1 1,818.8 119.3 Operating income 125.1 153.7 (28.6) Interest expense, net 27.3 32.0 (4.7) Income before income tax expense 97.8 121.7 (23.9) Income tax expense 34.3 16.8 17.5 Net income 63.5 104.9 (41.4) Less: Net income attributable to noncontrolling interests 6.0 4.2 1.8 Net income attributable to SunCoke Energy, Inc. $ 57.5 $ 100.7 $ (43.2) Sales and Other Operating Revenue and Costs of Products Sold and Operating Expenses.
Years Ended December 31, 2024 2023 Increase (Decrease) (Dollars in millions) Revenues Sales and other operating revenue $ 1,935.4 $ 2,063.2 $ (127.8) Costs and operating expenses Cost of products sold and operating expenses 1,603.4 1,724.6 (121.2) Selling, general and administrative expenses 61.2 70.7 (9.5) Depreciation and amortization expense 118.9 142.8 (23.9) Total costs and operating expenses 1,783.5 1,938.1 (154.6) Operating income 151.9 125.1 26.8 Interest expense, net 23.4 27.3 (3.9) Income before income tax expense 128.5 97.8 30.7 Income tax expense 25.0 34.3 (9.3) Net income 103.5 63.5 40.0 Less: Net income attributable to noncontrolling interests 7.6 6.0 1.6 Net income attributable to SunCoke Energy, Inc. $ 95.9 $ 57.5 $ 38.4 Sales and Other Operating Revenue and Costs of Products Sold and Operating Expenses.
Lake Terminal is located adjacent to our Indiana Harbor cokemaking facility. The operations of each of our reportable segments are described in Part I of this Annual Report on Form 10-K. The Company elected to combine Dismal River Terminal (“DRT”) operations into the Jewell cokemaking operations in the Domestic Coke segment beginning January 1, 2023.
Lake Terminal is located adjacent to our Indiana Harbor cokemaking facility. The operations of each of our reportable segments are described in Part I of this Annual Report on Form 10-K. Corporate expenses that can be identified with a segment have been included in determining segment results.
Consolidated Results of Operations The following section includes year-over-year analysis of consolidated results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022. See “Analysis of Segment Results” later in this Item 7 for further details of these results.
See Note 12 to our consolidated financial statements for further detail. 31 Table of Contents Consolidated Results of Operations The following section includes year-over-year analysis of consolidated results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Income tax expense during 2023 primarily reflects the establishment of a valuation allowance on deferred tax assets attributable to existing foreign tax credit carryforwards, which was a portion of a valuation allowance released during the third quarter of 2022, resulting in $8.4 million of deferred tax expense.
Income tax expense during 2024 benefited from the absence of $8.4 million of deferred tax expense recorded in the prior year related to the establishment of a valuation allowance on deferred tax assets attributable to existing foreign tax credit carryforwards, as a result of changes in tax regulations.
These higher volumes were mostly offset by lower volumes on non-contracted blast coke sales. (2) Revenues increased primarily as a result of the pass-through of higher coal prices on our long-term, take-or-pay agreements. Adjusted EBITDA decreased primarily due to lower margins on our non-contracted blast coke sales.
(2) Sales and other operating revenue decreased primarily as a result of the pass-through of lower coal prices on our long-term, take-or-pay agreements.
See further discussion in “Item 5. Market for Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities.” Covenants As of December 31, 2023, we were in compliance with all applicable debt covenants.
Market for Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities.” Covenants As of December 31, 2024, we were in compliance with all applicable debt covenants. We do not anticipate a violation of these covenants nor do we anticipate that any of these covenants will restrict our operations or our ability to obtain additional financing.
(2) Corporate and Other, net is not a reportable segment. (3) The production of foundry coke tons does not replace blast furnace coke tons on a ton for ton basis, as foundry coke requires longer coking time. The Domestic Coke capacity utilization is calculated assuming a single ton of foundry coke replaces approximately two tons of blast furnace coke.
The Domestic Coke capacity utilization is calculated assuming a single ton of foundry coke replaces approximately two tons of blast furnace coke.
As of December 31, 2023, we had $140.1 million of cash and cash equivalents and $350.0 million of borrowing availability under our Revolving Facility. 37 Table of Contents We may, from time to time, seek to retire or purchase additional amounts of our outstanding equity and/or debt securities through cash purchases and/or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise.
We may, from time to time, seek to retire or purchase additional amounts of our outstanding equity and/or debt securities through cash purchases and/or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.
This decrease in net cash used in financing activities was primarily driven by lower net repayments of $45.0 million on the Revolving Facility in the current year period.
The decrease in net cash used in financing activities was primarily driven by lower net repayments of $35.0 million on the Revolving Facility, the absence of repayments on financing obligations of $8.8 million resulting from the early buyout on a sale leaseback arrangement in the prior year period, and lower cash distributions made to noncontrolling interests of $3.7 million.
The estimated liability may be impacted by future changes in the statutory mechanisms, modifications by court decisions and changes in filing patterns by claimants and their advisors, the impact of which cannot be estimated. The following table summarizes discount rates utilized, active claims and the total black lung liabilities.
The estimated liability may be impacted by future changes in the applicable laws, as interpreted by the courts, and changes in filing patterns by claimants and their advisors, the impact of which cannot be estimated.
Decreases in sales and other operating revenue and Adjusted EBITDA were primarily due to the absence of technology fees, which expired at the end of 2022. Corporate and Other Corporate and Other Adjusted EBITDA decreased $2.5 million, or 8 percent, to a loss of $32.4 million in 2023 compared to a loss of $29.9 million in 2022.
The increase in Adjusted EBITDA primarily reflects higher operating fees and production volumes. Corporate and Other Corporate and Other Adjusted EBITDA increased $10.2 million, or 31 percent, to a loss of $22.2 million in 2024 compared to a loss of $32.4 million in 2023.
We submitted comments on this proposed rule and continue to monitor any impact to the Company. See further discussion in Note 12 to our consolidated financial statements.
See further discussion in Note 12 to our consolidated financial statements.
We do not anticipate a violation of these covenants nor do we anticipate that any of these covenants will restrict our operations or our ability to obtain additional financing. See Note 11 to our consolidated financial statements for details on debt covenants. Credit Rating In May 2023, S&P Global Ratings reaffirmed our corporate credit rating of BB- (stable).
See Note 11 to our consolidated financial statements for details on debt covenants. Credit Rating In February 2024, S&P Global Ratings reaffirmed our corporate credit rating of BB- (stable). In October 2024, Moody’s Investors Service reaffirmed our corporate credit rating of B1 and changed the rating outlook from positive to stable.
These decreases to Adjusted EBITDA were partially offset by favorable coal-to-coke yields on our long-term, take-or-pay agreements and favorable pricing on foundry coke sales. (3) Energy and other decreased primarily as a result of unfavorable energy pricing at our Haverhill facility.
Adjusted EBITDA was negatively impacted by lower coal-to-coke yields on our long-term, take-or-pay agreements and lower sales pricing on our non-contracted blast coke sales, which was partially offset by the impact of lower coal prices on our non-contracted blast coke sales.
The following table summarizes the annual black lung payments and expense (benefit): Years Ended December 31, 2023 2022 2021 (Dollars in millions) Payments $ 5.4 $ 5.0 $ 4.4 Expense (benefit) (1) $ 5.5 $ (0.2) $ 3.1 (1) Black lung expense (benefit) incurred in excess of annual accretion of the black lung liability reflects the impact of changes in discount rates, current filing and approval rate assumptions and/or other changes in our actuarial assumptions.
The following table summarizes the annual black lung payments and expense (benefit): Years Ended December 31, 2024 2023 2022 (Dollars in millions) Payments (1) $ 40.4 $ 5.4 $ 5.0 Expense (benefit) (2) $ (4.1) $ 5.5 $ (0.2) (1) Payments for the year ended December 31, 2024 represent $4.4 million of black lung benefit payments made by the Company and the $36.0 million payment made to the DCMWC related to the regulatory exemption detailed above.
Adjusted EBITDA presented above is inclusive of the impact of intersegment transactions. (1) Volumes decreased as a result of lower demand at CMT driven by weakened thermal coal markets and the short-term idling of a customer mine during the fourth quarter of 2023. Additionally, Adjusted EBITDA in the current year period reflects the absence of DRT volumes.
Adjusted EBITDA presented above is inclusive of the impact of intersegment transactions. (1) Volumes primarily increased as a result of higher demand and transloading volumes at KRT. (2) Revenues and Adjusted EBITDA increased as a result of higher transloading pricing at CMT.
The current year period was further impacted by an increase in deferred income tax expense relating to new regulations impacting foreign tax credit utilization. See Note 4 to our consolidated financial statements for further detail on the change in deferred income tax expense.
See Note 4 to our consolidated financial statements for further detail on the change in deferred income tax expense. Cash Used in Investing Activities Net cash used in investing activities decreased $36.9 million to $72.3 million in 2024 as compared to $109.2 million in 2023.
The establishment of the valuation allowance during 2023 was the result of changes in tax regulations. See Note 4 to our consolidated financial statements for further detail. Noncontrolling Interest.
Additionally, the current year period further benefited from the release of valuation allowances established on deferred tax assets related to state net operating loss carryforwards, partially offset by the revaluation of certain deferred tax liabilities due to changes in apportioned state tax rates. See Note 4 to our consolidated financial statements for further detail. Noncontrolling Interest.
Removed
Operating results during the year ended December 31, 2023 primarily reflects lower margin on our non-contracted blast coke sales, unfavorable energy pricing at our Haverhill facility and lower transloading volumes in our Logistics segment. These decreases were partially offset by favorable coal-to-coke yields on our long-term, take-or-pay agreements and favorable pricing on our foundry coke sales.
Added
Operating results during the year ended December 31, 2024 primarily reflect higher transloading volumes and pricing in our Logistics segment, as well as the extinguishment of certain black lung liabilities during the current year period, which resulted in the recognition of a $9.5 million pre-tax gain.
Removed
Net income for the current year period was further impacted by the establishment of a valuation allowance on deferred tax assets attributable to existing foreign tax credit carryforwards. Operating cash flows during the current period primarily reflect a favorable year-over-year change in primary working capital.
Added
These increases were partially offset by unfavorable coal-to-coke yields on our long-term, take-or-pay agreements within our Domestic Coke segment. Operating cash flows during the current period primarily reflect an unfavorable year-over-year change in primary working capital and a one-time payment of $36.0 million related to the extinguishment of certain black lung liabilities.
Removed
Additionally, we reduced total debt by approximately $44 million in 2023. Recent Developments • 2023 Indiana Harbor Contract Renewal. In April 2023, the Indiana Harbor long-term, take-or-pay agreement with Cliffs Steel was extended to September 30, 2035. Under the extended agreement, Indiana Harbor will continue to supply 1,220 thousand tons to Cliffs Steel annually.
Added
In October 2024, the Granite City long-term, take-or-pay agreement with United States Steel Corporation (“U.S. Steel”) was extended through June 30, 2025, with an option for U.S. Steel to extend for an additional six months. Under the terms of the agreement, Granite City will supply 295 thousand tons of coke to U.S. Steel during the initial six month term.
Removed
Reimbursement of certain operating and maintenance expenses under the contract are fixed subject to annual adjustment based on an inflation index. Other key provisions of the agreement, including the pass-through of coal costs, remain unchanged.
Added
The terms of the extension includes a turn down fee, but results in significantly lower overall economics compared to the current long-term, take-or-pay agreement. Other key provisions of the agreement, including the pass-through of coal costs, remain unchanged. Items Impacting Comparability • U.S. Department of Labor’s Division of Coal Mine Workers Compensation (“DCMWC”) Regulatory Exemption.
Removed
These increases to sales and other operating revenue were partially offset by lower volumes and unfavorable pricing on our non-contracted blast coke sales. Selling, General and Administrative Expenses. The decrease in selling, general and administrative expense primarily reflects lower employee related expenses, lower cost of professional services and lower transaction costs incurred as part of the granulated pig iron project.
Added
In August 2024, the Company reached an agreement with the DCMWC and made a payment of $36.0 million to extinguish the majority of its self-insured federal black lung liabilities.
Removed
These lower costs were partially offset by valuation adjustments primarily as a result of changes in discount rates on certain legacy liabilities, which increased legacy costs by $5.7 million as compared to the prior year. Depreciation and Amortization Expense. Depreciation and amortization expense was reasonably consistent with the prior year period. Interest Expense, net.
Added
As a result of the agreement, the Company recognized a $9.5 million pre-tax gain within selling, general and administrative expenses on the Consolidated Statements of Income during the year ended December 31, 2024. The agreement resulted in a reduction of $45.5 million of the Company's black lung liability on the Consolidated Balance Sheets.
Removed
The DRT results were included in the Logistics segment in 2022 and are not recast. Corporate expenses that can be identified with a segment have been included in determining segment results.
Added
See “Analysis of Segment Results” later in this Item 7 for further details of these results.
Removed
(2) Revenues and Adjusted EBITDA increased as a result of higher transloading pricing. (3) Revenues and Adjusted EBITDA decreased as a result of unfavorable ancillary revenue, which was a result of lower volumes at CMT. This decrease in Adjusted EBITDA was more than offset by the absence of costs associated with DRT in the current year period.
Added
Refer to Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report on Form 10-K for the year-over-year analysis of consolidated results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Removed
This decrease was primarily driven by valuation adjustments as a result of changes in discount rates on certain legacy liabilities, which increased legacy costs by $5.7 million, partially offset by lower employee related expenses and lower cost of professional services in the current year period.
Added
The decrease in selling, general and administrative expense was primarily impacted by the recognition of a $9.5 million gain, which was the result of the extinguishment of certain liabilities related to our legacy coal mining business. See Note 12 to our consolidated financial statements for further detail. Depreciation and Amortization Expense.
Removed
Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. Refer to further liquidity discussion in “Part II - Item 5 - Market for Registrant's Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities.” During the first quarter of 2020, the U.S.
Added
Depreciation and amortization expense decreased in 2024 as compared to 2023 as a result of the expiration of the useful lives of assets in our Domestic Coke segment, which were placed into service in prior periods. Interest Expense, net.
Removed
Department of Labor's Division of Coal Mine Workers' Compensation (“DCMWC”) requested SunCoke provide additional collateral of approximately $32 million to secure certain of its black lung obligations. SunCoke exercised its right to appeal the DCMWC’s determination and provided additional information supporting the Company’s position in May 2020 and February 2021.
Added
(2) See the “Non-GAAP Financial Measures” section below for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement. (3) The production of foundry coke tons does not replace blast furnace coke tons on a ton for ton basis, as foundry coke requires longer coking time.
Removed
If the Company’s appeal is unsuccessful, the Company may be required to provide additional collateral to receive its self-insurance reauthorization from the DCMWC, which could potentially reduce the Company’s liquidity.
Added
These decreases were partially and completely offset for Revenues and Adjusted EBITDA, respectively, by higher volumes on our foundry coke sales and higher volumes at certain of our cokemaking facilities driven by the absence of oven rebuilds in the current year period.
Removed
These favorable impacts were partially offset by lower operating results and higher payments made for employee related expenses in the current period.
Added
(3) Operating and maintenance costs primarily benefited in the current year period from lower planned outage costs and the absence of oven rebuilds. (4) Energy and other decreased primarily as a result of unfavorable energy pricing.
Removed
Cash Used in Investing Activities Net cash used in investing activities increased $39.0 million to $109.2 million in 2023 as compared to 2022 primarily driven by ongoing capital expenditures related to upgrades of our assets in order to improve long-term reliability and operational performance as well as increased spending on the foundry expansion project in the current year period.
Added
These decreases were partially offset by higher energy sales as a result of increased volumes related to upgrades of our assets made in the prior year period .
Removed
The current year period was also impacted by higher repayments on financing obligations of $5.6 million, resulting from the early buyout on a sale leaseback arrangement, discussed further in Note 11 to our consolidated financial statements.
Added
This increase was primarily driven by the recognition of a $9.5 million gain, which was the result of the extinguishment of certain liabilities related to our legacy coal mining business. See Note 12 to our consolidated financial statements for further detail.
Removed
The following table summarizes our capital expenditures: Years Ended December 31, 2023 2022 (Dollars in millions) Ongoing capital $ 94.5 $ 72.1 Expansion capital (1) 14.7 3.4 Total capital expenditures (2) $ 109.2 $ 75.5 (1) Includes capital spending in connection with the foundry cokemaking growth project. (2) Reflects actual cash payments during the periods presented for our capital requirements.
Added
Refer to further liquidity discussion in “Part II - Item 5 - Market for Registrant's Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities.” On February 1, 2013, SunCoke obtained commercial insurance for state and federal black lung claims, in excess of a deductible, for employees with a last date of employment after that date.
Removed
Our independent actuarial consultants calculate the present value of the black lung liability annually in the fourth quarter, unless there are changes in facts and circumstances that could materially alter the amount of the liability.
Added
For claims based on employment that ended prior to February 1, 2013, SunCoke was reauthorized by the U.S. Department of Labor’s Division of Coal Mine Workers Compensation (“DCMWC”) to self-insure its black lung liabilities for $8.4 million.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Revenues and expenses of our foreign operations are translated at average exchange rates during the period and balance sheet accounts are translated at period-end exchange rates. Balance sheet translation adjustments are excluded from the results of operations and are recorded in equity as a component of accumulated other compr ehensive loss.
Revenues and expenses of our foreign operations are translated at average exchange rates during the period and balance sheet accounts are translated at period-end exchange rates. Balance sheet translation adjustments are excluded from the results of operations and are recorded in equity as a component of accumulated other compr ehensive income (loss).
Assuming a 50 basis point change in secured overnight financing rate (“SOFR”), interest expense would have been impacted by $0.1 million and $0.5 million in 2023 and 2022, respectively. At December 31, 2023, we had no outstanding borrowings with variable interest rates under the Revolving Facility.
Assuming a 50 basis point change in secured overnight financing rate (“SOFR”), interest expense would have been impacted by zero and $0.1 million in 2024 and 2023, respectively. At December 31, 2024, we had no outstanding borrowings with variable interest rates under the Revolving Facility.
Assuming a 50 basis point change in the rate of interest associated with our cash and cash equivalents, interest income would have been impacted by $0.6 million and $0.4 million for the years ended December 31, 2023 and 2022, respectively.
Assuming a 50 basis point change in the rate of interest associated with our cash and cash equivalents, interest income would have been impacted by $0.8 million and $0.6 million for the years ended December 31, 2024 and 2023, respectively.
Interest rates We are exposed to changes in interest rates as a result of borrowing activities with variable interest rates and interest earned on our cash balances. During the years ended December 31, 2023 and 2022, the daily average outstanding balance on borrowings with variable interest rates was $14.9 million and $105.8 million, respectively.
Interest rates We are exposed to changes in interest rates as a result of borrowing activities with variable interest rates and interest earned on our cash balances. During the years ended December 31, 2024 and 2023, the daily average outstanding balance on borrowings with variable interest rates was $0.2 million and $14.9 million, respectively.
If the currency exchange rates had changed by 10 percent, we estimate the impact to our net income in 2023 and 2022 would have been approximately $0.4 million in both periods. 41 Table of Contents
If the currency exchange rates had changed by 10 percent, we estimate the impact to our net income in 2024 and 2023 would have been approximately $0.2 million and $0.4 million, respectively. 41 Table of Contents
At December 31, 2023 and 2022, we had cash and cash equivalents of $140.1 million and $90.0 million, respectively, which accrue interest at various rates.
At December 31, 2024 and 2023, we had cash and cash equivalents of $189.6 million and $140.1 million, respectively, which accrue interest at various rates.

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