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What changed in SunCoke Energy, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of SunCoke Energy, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+282 added−290 removedSource: 10-K (2024-02-22) vs 10-K (2023-02-24)

Top changes in SunCoke Energy, Inc.'s 2023 10-K

282 paragraphs added · 290 removed · 228 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

110 edited+21 added−25 removed85 unchanged
Biggest changeLegal and Regulatory Requirements Our operations are subject to extensive governmental regulation, including environmental laws, which are a significant factor in our business. The following discussion summarizes the principal legal and regulatory requirements that we believe may significantly affect us. 9 Table of Contents Permitting and Bonding • Permitting Process for Cokemaking Facilities.
Biggest changeThe 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.
However, the supply of coke from international merchants does impact our ability to sell tons in excess of those contracted under out long-term, take-or-pay agreements into the coke export market. We believe we are well-positioned to compete with other coke producers.
However, the supply of coke from international merchants does impact our ability to sell tons in excess of those contracted under out long-term, take-or-pay agreements into the export coke market. We believe we are well-positioned to compete with other coke producers.
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 4 Table of Contents operations. KRT has fully automated and computer-controlled mixing capabilities that mix coal to within two percent accuracy of customer specifications.
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.
Excessively hot summer weather or cold winter weather may increase commercial and residential needs for heat or air conditioning, which in turn may increase electricity usage and the demand for thermal coal and, therefore, may favorably impact our logistics business.
Excessively hot summer weather or cold winter weather may increase commercial and residential needs for air conditioning or heat, which in turn may increase electricity usage and the demand for thermal coal and, therefore, may favorably impact our logistics business.
In July 2013, the EPA identified or "designated" as non-attainment 29 areas in 16 states where monitored air quality showed violations of the 2010 1-hour SO2 NAAQS. In December 2017, EPA issued a final designation of attainment or unclassifiable for all areas where our facilities are located.
In July 2013, the EPA identified or "designated" as non-attainment 29 areas in 16 states where monitored air quality showed violations of the 2010 1-hour SO2 NAAQS. In December 2017, the EPA issued a final designation of attainment or unclassifiable for all areas where our facilities are located.
In January 2018, EPA designated the areas where the Haverhill and Jewell facilities are located as attainment/unclassifiable for ozone. In June 2018, EPA designated the areas where the Granite City, Indiana Harbor, and Middletown facilities are located as marginal nonattainment for ozone.
In January 2018, the EPA designated the areas where the Haverhill and Jewell facilities are located as attainment/unclassifiable for ozone. In June 2018, the EPA designated the areas where the Granite City, Indiana Harbor, and Middletown facilities are located as marginal nonattainment for ozone.
FERC has granted requests for authority to sell electricity from the Haverhill and Middletown facilities at market-based rates and the entities are subject to FERC’s market-based rate regulations, which require regular regulatory compliance filings. • Clean Water Act of 1972.
The FERC has granted requests for authority to sell electricity from the Haverhill and Middletown facilities at market-based rates and the entities are subject to the FERC’s market-based rate regulations, which require regular regulatory compliance filings. • Clean Water Act of 1972.
The EPA has limited the disposal options for certain wastes that are designated as hazardous wastes under RCRA.
The EPA has limited the disposal options for certain wastes that are designated as hazardous wastes under the RCRA.
In the course of our operations we may have generated and may generate wastes that fall within CERCLA’s definition of hazardous substances. We also may be an owner or operator of facilities at which hazardous substances have been released by previous owners or operators.
In the course of our operations we may have generated and may generate wastes that fall within the CERCLA’s definition of hazardous substances. We also may be an owner or operator of facilities at which hazardous substances have been released by previous owners or operators.
Under 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. • Pursuant to a court-mandated deadline, EPA published a final rule in December 2020 that does not impose financial assurance requirements for managing hazardous substances on the coal products manufacturing sector under Section 108(b) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA 108(b)”).
We also must comply with reporting requirements under the Emergency Planning and Community Right-to-Know Act and the Toxic Substances Control Act. ◦ Pursuant to a court-mandated deadline, the EPA published a final rule in December 2020 that does not impose financial assurance requirements for managing hazardous substances on the coal products manufacturing sector under Section 108(b) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA 108(b)”).
EPA’s final rule determined that the risks associated with these facilities’ operations are addressed by existing federal and state programs and regulations and modern industry practices. • Climate Change Legislation and Regulations. Our facilities are presently subject to the GHG reporting rule, which obligates us to report annual emissions of GHGs.
The EPA’s final rule determined that the risks associated with these facilities’ operations are addressed by existing federal and state programs and regulations and modern industry practices. • Climate Change Legislation and Regulations. Our facilities are presently subject to the GHG reporting rule, which obligates us to report annual emissions of GHGs.
Prior to that, he successfully rose through progressively responsible financial, commercial and administrative leadership roles at ArcelorMittal USA and its predecessor companies: (i) from 2005 to 2006, he was Executive Vice President, Sales and Marketing at Mittal Steel USA; (ii) from 2000 to 2005, he was Executive Vice President and Chief Financial Officer at lspat Inland Inc.; and (iii) from 1998 to 2000, he served as Vice President, Finance and Chief Financial Officer of Ispat Inland Inc.
Prior to that, he successfully rose through progressively responsible financial, commercial and administrative leadership roles at ArcelorMittal USA and its predecessor companies: (i) from 2005 to 2006, he was Executive Vice President, Sales and Marketing at Mittal Steel USA; (ii) from 2000 to 2005, he was Executive Vice President and Chief Financial Officer at Ispat Inland Inc.; and (iii) from 1998 to 2000, he served as Vice President, Finance and Chief Financial Officer of Ispat Inland Inc.
Our logistics terminals, which are strategically located to reach Gulf Coast, East Coast, Great Lakes and international ports, have the collective capacity to mix and/or transload more than 40 million tons of product annually and have storage capacity of approximately 3 million tons. We report our business results through three segments: Domestic Coke, Brazil Coke and Logistics.
Our logistics terminals, which are strategically located to reach Gulf Coast, East Coast, Great Lakes and international ports, have the collective capacity to mix and/or transload more than 40 million tons of product annually and have storage capacity of approximately 3 million tons. We report our business results through three reportable segments: Domestic Coke, Brazil Coke and Logistics.
Fluctuations in the benchmark price for coal delivery into northwest Europe, as referenced in the Argus/McCloskey's Coal Price Index Report ("API2 index price"), as well as Newcastle index coal prices, as referenced in the Argus/McCloskey's Coal Price Index ("API6 index price"), which reflect low-ash coal prices shipped from Australia, contribute to our customers' decisions to place tons into the export market and thus impact transloading volumes through CMT.
Fluctuations in the benchmark price for coal delivery into northwest Europe, as referenced in the Argus/McCloskey's Coal Price Index Report ( “ API2 index price ” ), as well as Newcastle index coal prices, as referenced in the Argus/McCloskey's Coal Price Index ( “ API6 index price ” ), which reflect low-ash coal prices shipped from Australia, contribute to our customers' decisions to place tons into the export market and thus impact transloading volumes through CMT.
Middletown nameplate capacity on a “run of oven” basis is 578 thousand tons per year. (3) Customers under long-term, take-or-pay agreements include Cleveland-Cliffs Steel Holding Corporation and Cleveland-Cliffs Steel LLC, both subsidiaries of Cleveland-Cliffs Inc. and collectively referred to as "Cliffs Steel," United States Steel Corporation ("U.S. Steel"), and Algoma Steel Inc. ("Algoma Steel").
Middletown nameplate capacity on a “run of oven” basis is 578 thousand tons per year. (3) Customers under long-term, take-or-pay agreements include Cleveland-Cliffs Steel Holding Corporation and Cleveland-Cliffs Steel LLC, both subsidiaries of Cleveland-Cliffs Inc. and collectively referred to as “ Cliffs Steel ”, United States Steel Corporation ( “ U.S. Steel ” ), and Algoma Steel Inc.
The international merchant coke market is largely supplied by Chinese, Colombian and Ukrainian producers, among others, but it can be challenging to maintain high quality coke in the export market, and when coupled with transportation costs, coke imports into the U.S. are often not economical.
The international merchant coke market is largely supplied by Chinese and Colombian producers, among others, but it can be challenging to maintain high quality coke in the export market, and when coupled with transportation costs, coke imports into the U.S. are often not economical.
East Coast. CMT is one of the largest export terminals on the U.S. Gulf Coast and provides strategic access to seaborne markets for coal and other bulk materials. Additionally, CMT is the largest bulk material terminal in the lower U.S. with direct rail access on the Canadian National Railway.
CMT is one of the largest export terminals on the U.S. Gulf Coast and provides strategic access to seaborne markets for coal and other bulk materials. Additionally, CMT is the largest bulk material terminal in the lower U.S. with direct rail access on the Canadian National Railway.
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 rulemakings in recent years to regulate GHG emissions from existing and new coal fired power plants.
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.
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, a weight-loss program, 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, and telemedicine.
In recent years, our Domestic Coke segment has accounted for approximately 35 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 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.
Agrawal has led the Company’s finance function, including budgeting, forecasting, financial analysis, cash management, investor relations and procurement. John F. Quanci. Dr. John F. Quanci joined SunCoke Energy, Inc. in October, 2010, and was appointed to his current position as Vice President, Chief Technology Officer in May 2019. Prior to joining SunCoke, Dr.
In his current roles, Mr. Agrawal has led the Company’s finance function, including budgeting, forecasting, financial analysis, cash management, investor relations and procurement. John F. Quanci. Dr. John F. Quanci joined SunCoke Energy, Inc. in October, 2010, and was appointed to his current position as Vice President, Chief Technology Officer in May 2019. Prior to joining SunCoke, Dr.
("ArcelorMittal Brazil”), which has approximately 1.7 million tons of annual cokemaking capacity. We also own and operate a logistics business that provides export and domestic material handling and/or mixing services to steel, coke (including some of our domestic cokemaking facilities), electric utility, coal producing and other manufacturing based customers.
(“ArcelorMittal Brazil”), which has approximately 1.7 million tons of annual cokemaking capacity. We also own and operate a logistics business that provides export and domestic material handling and/or mixing services to steel, coke (including some of our domestic cokemaking facilities), electric utility, coal producing and other manufacturing based customers.
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 2023, 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 2024, our metallurgical coal contracts are generally based on coke production requirements.
Based on the species that have been designated as endangered or threatened on our properties and the current application of these laws and regulations, we do not believe that they are likely to have a material adverse effect on our operations. • Permitting and Bonding for Former Coal Mining Operations.
Based on the species that have been designated as endangered or threatened on our properties and the current application of these laws and regulations, we do not believe that they are likely to have a material adverse effect on our operations. • Permitting Requirements for Former Coal Mining Operations.
Under our other four coke sales agreements, operating costs are passed through to the respective customers subject to an annually negotiated budget, in some cases subject to a cap annually adjusted for inflation, and we share any difference in costs from the budgeted amounts with our customers.
Under our other three coke sales agreements, operating costs are passed through to the respective customers subject to an annually negotiated budget, in some cases subject to a cap annually adjusted for inflation, and we share any difference in costs from the budgeted amounts with our customers.
Foundry coke is a high-quality grade of coke that is used at foundries to melt iron and various metals in cupola furnaces, which is further processed via casting or molding into products used in various industries such as construction, transportation and industrial products.
Foundry coke is a high-quality type of coke that is used at foundries to melt iron and various metals in cupola furnaces, which is further processed via casting or molding into products used in various industries such as construction, transportation and industrial products.
In 2014, the Supreme Court issued an opinion holding that although EPA may not treat GHGs as a pollutant for the purpose of determining whether a source must obtain a PSD or Title V permit, EPA may continue to require GHG limitations in permits for sources classified as major based on their emission of other pollutants.
In 2014, the Supreme Court issued a decision holding that although the EPA may not treat GHGs as a pollutant for the purpose of determining whether a source must obtain a PSD or Title V permit, the EPA may continue to require GHG limitations in permits for sources classified as major based on their emission of other pollutants.
He began his career with Inland Steel Company (a predecessor to ArcelorMittal USA) in 1984. Mr. Rippey currently serves on the Board of Directors of Olympic Steel, Inc. [NASDAQ: ZEUS] (a leading U.S. metals service center), where he is a member of the Nominating Committee and serves as Chair of the Audit and Compliance Committee.
He began his career with Inland Steel Company (a predecessor to ArcelorMittal USA) in 1984. Mr. Rippey currently serves on the Board of Directors of Olympic Steel, Inc. [NASDAQ: ZEUS] (a leading U.S. metals service center), where he is a member of the Nominating Committee and serves as Chair of the Audit and Compliance 13 Table of Contents Committee.
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 10 Table of Contents Reasonably Available Control Technology (“RACT”) or demonstrate that they already meet RACT standards.
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.
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. 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. 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.
Steel December 2024 Capacity Indiana Harbor East Chicago, Indiana 1998 Heat for power generation 268 1,220 Cliffs Steel October 2023 Capacity Jewell Vansant, Virginia 1962 Partially used for thermal 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 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.
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.
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.
However, SunCoke has retained certain black lung liabilities associated with legacy coal operations. Our obligation related to black lung benefits at December 31, 2022 was $58.1 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.
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.
The nature of the operations of the Haverhill and Middletown facilities makes each facility a qualifying facility under PURPA, which exempts the facilities and the Company from certain regulatory burdens, including the Public 12 Table of Contents Utility Holding Company Act of 2005 (“PUHCA”), limited provisions of the FPA, and certain state laws and regulation.
The nature of the operations of the Haverhill and Middletown facilities makes each facility a qualifying facility under PURPA, which exempts the facilities and the Company from certain regulatory burdens, including the Public Utility Holding Company Act of 2005 (“PUHCA”), limited provisions of the FPA, and certain state laws and regulation.
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.
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.
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 2 Table of Contents 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 these facilities, although it does affect our revenue and cost of sales for these facilities in approximately equal amounts.
While we are not able to determine the extent to which a different determination by VDEQ or EPA would impact our business at this time, it presents a potential risk of having an impact on our operations and costs at the Jewell facility. ◦ On April 6, 2022, EPA proposed a Federal Implementation Plan Addressing Regional Ozone Transport for the 2015 Ozone NAAQS, which includes requirements applicable to certain coke plant operations.
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.
(4) Under the long-term, take-or-pay agreement with Cliffs Steel, Jewell and Haverhill I supplies a combined 400 thousand tons annually for 2022 through 2025. Additionally, the long-term, take-or-pay agreement between Haverhill I and Algoma Steel provides for coke supply to shift to Jewell.
( “ 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.
Hardesty joined SunCoke Energy, Inc. in 2011 as Senior Vice President, Sales and Commercial Operations, and has more than 30 years of 15 Table of Contents experience in the mining industry. Before joining SunCoke, Mr. Hardesty served as Senior Vice President for International Coal Group, Inc.
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.
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. • 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 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.
These designations mean that no action is required for the facilities with respect to SO2 emissions at this time. However, it is possible for these areas to be redesignated in the future as non-attainment areas.
These designations mean that no action is required for the facilities wi th respect to SO2 emissions at this time. However, it is possible for these areas to be redesignated in the future as non-attainment areas.
Our cokemaking facilities 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 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.
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 to ensure proper safety knowledge. • Safe work practices - All team members and contractors take the time necessary to properly identify and mitigate all hazards and safely do each job. • Incident investigation – We comply with all applicable laws and regulations and perform root cause analysis on all 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 analysis of significant incidents. • Continuous improvement – We are always focused on preventing safety incidents and Thinking Safe, Acting Safe and Being Safe.
Our terminal operations located along waterways and the Gulf of Mexico are also governed by permitting requirements under the CWA (as defined below) and CAA. These terminals are subject to U.S. Coast Guard regulations and comparable state statutes regarding design, installation, construction, and management.
Our terminal operations located along waterways and the Gulf of Mexico are also governed by permitting requirements under the CWA (as defined below) and the CAA. These terminals are subject to U.S. Coast Guard regulations and comparable state statutes regarding design, installation, construction, management and security. • Federal Energy Regulatory Commission.
We purchased 6.0 million tons of metallurgical coal in 2022. 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 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.
The 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 10 years with SunCoke.
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.
Year Total TRIR 2020 0.81 2021 0.76 2022 0.69 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.
Year Total TRIR 2021 0.76 2022 0.69 2023 0.99 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.
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, 2022, we had an asset retirement obligation of $2.9 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, 2023, we had an asset retirement obligation of $2.3 million related to estimated mine reclamation costs.
According to the Bureau of Labor Statistics, the TRIR of Other Petroleum and Coal Products (Coke) Manufacturing was 4.3 for 2021 and 2.8 for the Iron and Steel Mills sector, 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 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.
He is a past board member and Secretary-Treasurer of the Putnam County Development Authority in West Virginia. In addition, from October 2015 through June 2019, Mr. Hardesty 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. Bonnie M. Edeus. Ms.
He is a past board member and Secretary-Treasurer of the Putnam County Development Authority in West Virginia. In addition, from October 2015 through June 2019, Mr. Hardesty 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. Karl A. Zabiello . Mr.
Lake Terminal and DRT provide coal handling and mixing services to SunCoke's Indiana Harbor and Jewell cokemaking operations, respectively. 3 Table of Contents Market Discussion and Competition Cokemaking The majority of our current production from our cokemaking business is committed under long-term, take-or-pay agreements.
Lake Terminal provides coal handling and mixing services to SunCoke's Indiana Harbor cokemaking operations. 3 Table of Contents Market Discussion and Competition Cokemaking The majority of our current production from our cokemaking business is committed under long-term, take-or-pay agreements.
Employee Development & Training SunCoke provides a robust training program that meets or exceeds all 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.
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 2016, EPA issued a request for information and testing to our cokemaking facilities and other companies as part of its residual risk and technology review of the MACT standard for pushing and quenching, and a technology review of the MACT standard for coke ovens and charging emissions. Testing was conducted by our cokemaking facilities in 2017.
In 2016 and 2022, the EPA issued a request for information and testing to our cokemaking facilities and other companies as part of its residual risk and technology review of the MACT standard for pushing and quenching, and a technology review of the MACT standard for coke ovens and charging emissions.
The CAA air emissions programs that may affect our operations, directly or indirectly, include, but are not limited to: the Acid Rain Program; NAAQS implementation for SO2, PM, NO2, lead, ozone, and carbon monoxide; GHG rules; the Cross-State Air Pollution Rule; MACT emissions standards for hazardous air pollutants; the Regional Haze Program; New Source Performance Standards (“NSPS”); and New Source Review. ◦ The CAA requires, among other things, the regulation of hazardous air pollutants through the development and promulgation of various industry-specific MACT standards.
These air emissions programs that may affect our operations, directly or indirectly, include, but are not limited to: the Acid Rain Program; NAAQS implementation for SO2, PM, NO2, lead, ozone, and carbon monoxide; GHG rules; the Cross-State Air Pollution Rule; MACT emissions standards for hazardous air pollutants; the Regional Haze Program; New Source Performance Standards (“NSPS”); and New Source Review. ◦ Regulation of hazardous air pollutants through the development and promulgation of various industry-specific MACT standards impacts our cokemaking facilities.
In 2022, CMT accounted for approximately 42.5 percent of U.S. thermal coal exports from the U.S. Gulf Coast and approximately 19.5 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 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.
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.
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.
The status of the area where the Indiana Harbor facility is located was challenged in litigation and upheld in July 2020. As a result of the same litigation, the status of the area where the Granite City facility is located was remanded to EPA, which finalized the area as nonattainment in January 2021. On June 9, 2022, the U.S.
The status of the area where the Indiana Harbor facility is located was challenged in litigation and upheld in July 2020. As a result of the same litigation, the status of the area where the Granite City facility is located was remanded to the EPA, which finalized the area as nonattainment in January 2021.
During 2022, operating costs under three of our coke sales agreements are fixed subject to an annual adjustment based on an inflation index.
During 2023, operating costs under four of our coke sales agreements are fixed subject to an annual adjustment based on an inflation index.
Over the past several years, special training topics have included Active Shooter Preparedness, Harassment, Worker’s Compensation, Diversity and Inclusion, Conducting Effective Investigations, Retirement Planning, and Substance Abuse Awareness. SunCoke’s Personal Information & Privacy Policy outlines specific procedures to ensure that employees 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, 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.
KRT also has the ability to provide pad storage and has access to both CSX and Norfolk Southern rail lines as well as the Ohio River system. Lake Terminal and DRT provide coal handling and/or mixing services to our Indiana Harbor and Jewell cokemaking facilities, respectively, and therefore, do not have any competitors.
KRT also has the ability to provide pad storage and has access to both CSX and Norfolk Southern rail lines as well as the Ohio River system. Lake Terminal provides coal handling and/or mixing services to our Indiana Harbor cokemaking facility and therefore, does not have any competitors.
As a result, competition mainly affects our ability to obtain new contracts supporting development of additional cokemaking capacity, including foundry coke, re-contracting existing facilities, as well as the sale of coke in the export market. We direct our marketing efforts principally towards these areas. The cokemaking market is highly competitive.
As a result, competition mainly affects our ability to obtain new contracts supporting development of additional cokemaking capacity, including foundry coke, re-contracting existing facilities, as well as the sale of non-contracted blast coke tons in the North American spot coke and export coke markets. We direct our marketing efforts principally towards these areas. The cokemaking market is highly competitive.
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, 2022, we have posted $9.6 million in surety bonds or other forms of financial security for future reclamation. 11 Table of Contents 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, 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.
The Personal Information & Privacy Policy is updated to remain consistent with data security best practices. SunCoke utilizes a variety of information security training methods, including 7 Table of Contents training segments on data security best practices and periodic security awareness communications that remind employees to stay vigilant with respect to data security.
The Personal Information & Privacy Policy is updated periodically to reflect evolving data security best practices. SunCoke utilizes a variety of information security training methods, including training segments on data security best practices and periodic security awareness communications that remind employees to stay vigilant with respect to data security.
Our facilities are subject to regulation by OSHA or MSHA under the OSH Act and other agencies with standards designed to ensure worker safety. These standards impose minimum requirements for our operations to maintain and operate sites and equipment in a safe manner.
Our facilities are subject to regulation by OSHA or MSHA under the OSH Act and other agencies with standards designed to ensure worker safety. These standards impose minimum requirements for our operations to maintain and operate sites and equipment in a safe manner. 12 Table of Contents • Security. CMT is subject to regulation by the U.S.
We believe in developing our employees both within their daily roles and to be ready for their next assignment at SunCoke. Development occurs in the form of leadership training, cross training, stretch assignments, and on the job training.
We believe in developing our employees both within their daily roles and to be ready for their next assignment at SunCoke. Development occurs in the form of leadership training, cross training, stretch assignments, and on the job training. In 2023, SunCoke signed a contract to partner with a global leadership consulting firm.
Refer to our Management's Discussion and Analysis for further detail on our coal contractual obligations. Transportation and Freight For inbound transportation of metallurgical coal purchases, our facilities that access a single rail provider have long-term transportation agreements, and where necessary, coal-mixing agreements that run concurrently with the associated long-term, take-or-pay coke sales agreements for the facility.
Transportation and Freight For inbound transportation of metallurgical coal purchases, our facilities that access a single rail provider have long-term transportation agreements, and where necessary, coal-mixing agreements that run concurrently with the associated long-term, take-or-pay coke sales agreements for the facility.
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.
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.
Tonnage produced in excess of those contracted under our long-term, take-or-pay agreements at Jewell and Haverhill I is generally sold into the foundry and export coke markets. Blast Furnace Coke Our blast furnace coke sales are primarily made pursuant to long-term, take-or-pay agreements with the customers noted in the table above.
Non-contracted blast coke produced utilizing capacity in excess of that reserved for our long-term, take-or-pay agreements at Jewell and Haverhill I is generally sold into the foundry, export and North American spot coke markets. Blast Furnace Coke Our blast furnace coke sales are primarily made pursuant to long-term, take-or-pay agreements with the customers noted in the table above.
The Clean Air Act ("CAA") and similar state laws and regulations affect our cokemaking operations, primarily through permitting and/or emissions control requirements relating to criteria pollutants and 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.
However, the Company's website is expressly not incorporated by reference herein. 14 Table of Contents Information about our Executive Officers Our executive officers and their ages as of February 24, 2023, were as follows: Michael G. Rippey 65 Chief Executive Officer Katherine T. Gates 46 President Mark W. Marinko 61 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 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.
Our target for Total Recordable Incident Rate ("TRIR") at SunCoke for 2022 w as 0.80 company-wide, which includes both employees and contractors. We improved our safety performance in 2022 (0.69 TRIR). 8 Table of Contents Our excellent safety record is best understood in comparison to industry-wide safety performance.
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 coke is primarily used as a principal raw material in the blast furnace steelmaking process as well as in the foundry production of casted iron, and the majority of our sales are derived from blast furnace coke sales made under long-term, take-or-pay agreements. We also export coke to international customers seeking high-quality product for their blast furnaces.
Our coke is primarily used as a principal raw material in the blast furnace steelmaking process as well as in the foundry production of casted iron, and the majority of our sales are derived from blast furnace coke sales made under long-term, take-or-pay agreements.
The leadership of our Human Resources department, in partnership with local Human Resources and General Managers, as well as our Legal department, including our Chief Compliance Officer, sponsor the development and oversight of all human capital programs in the organization including: (i) safety, (ii) workforce composition, recruitment and retention, (iii) culture and our commitment to diversity, equity and inclusion, (iv) workforce stability, (v) employee development and training, (vi) benefits, (vii) talent management and total compensation, and (viii) ethics and compliance.
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.
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.
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.
Our domestic capacity is largely consumed by these long-term agreements, therefore, we have limited exposure to the domestic spot prices for blast furnace coke.
Our domestic capacity is largely consumed by these long-term agreements, which do not have exposure to the fluctuations in domestic spot prices for blast furnace coke.
Michael Hardesty 60 Senior Vice President, Commercial Operations, Business Development, Terminals and International Coke Bonnie M. Edeus 39 Vice President, Controller Shantanu Agrawal 36 Vice President, Finance and Treasurer John F. Quanci 61 Vice President, Chief Technology Officer Patrick G. Nigl 56 Vice President, Coke Operations Michael G. Rippey. Since January 1, 2023. Mr.
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.
Workforce Composition, Recruitment and Our Commitment to Diversity, Equity and Inclusion (“DEI”) As of December 31, 2022, we have 887 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.
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.
We have an internal inspection program designed to monitor and ensure compliance by CMT with these requirements. We believe that we are in material compliance with all applicable laws and regulations regarding the security of the facility. • Black Lung Benefits Revenue Act of 1977 and Black Lung Benefits Reform Act of 1977, as amended in 1981.
We believe that we are in material compliance with all applicable laws and regulations regarding the security of the facility. • Black Lung Benefits Revenue Act of 1977 and Black Lung Benefits Reform Act of 1977, as amended in 1981.
Revenues from the Brazilian cokemaking facility are derived from licensing and operating fees, which are based upon the level of production required by our customer and full pass-through of the operating costs of the facility. Logistics Our Logistics segment consists of Convent Marine Terminal ("CMT"), Kanawha River Terminal ("KRT"), Lake Terminal and Dismal River Terminal (“DRT”).
Revenues from the Brazilian cokemaking facility are derived from licensing and operating fees, which are based upon the level of production required by our customer and full pass-through of the operating costs of the facility.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSuch 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 excess capacity in the spot market, and could materially and adversely affect our future revenues and profitability.
Biggest changeSuch 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.
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; 25 Table of Contents • 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; • 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 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 17 Table of Contents 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.
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 natural gas displacing thermal coal as a fuel for electrical power generation by utility companies.
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.
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.
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.
We cannot assure that there will continue to be an ample supply of metallurgical coal available or that these facilities will be supplied without any significant disruption in coke production, as economic, environmental, and other conditions outside of our control may reduce our ability to source sufficient amounts of coal for our forecasted operational needs.
We cannot assure that there will continue to be an ample supply of metallurgical coal available that meet our quality specifications or that these facilities will be supplied without any significant disruption in coke production, as economic, environmental, and other conditions outside of our control may reduce our ability to source sufficient amounts of coal for our forecasted operational needs.
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.
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.
Risks associated with acquisitions include the diversion of management’s attention from other business concerns, the 19 Table of Contents potential loss of key employees and customers of the acquired business, the possible assumption of unknown liabilities, potential disputes with the sellers, and the inherent risks in entering markets or lines of business in which we have limited or no prior experience.
Risks associated with acquisitions include the diversion of management’s attention from other business concerns, the potential loss of key employees and customers of the acquired business, the possible assumption of unknown liabilities, potential disputes with the sellers, and the inherent risks in entering markets or lines of business in which we have limited or no prior experience.
For a description of certain environmental laws and matters applicable to us and associated risks, see “Item 1. Business-Legal and Regulatory Requirements.” 18 Table of Contents Our operations may impact the environment or cause exposure to hazardous substances, which could result in material liabilities to us.
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.
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 a material adverse effect on our business, financial condition and results of operations.
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.
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 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 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.
From time to time, we discuss the extension of existing agreements and enter into new long-term agreements for the supply of coke, steam, and energy to our customers, but these negotiations may not be successful and these customers may 21 Table of Contents not continue to purchase coke, steam, or electricity from us under long-term agreements.
From time to time, we discuss the extension of existing agreements and enter into new long-term agreements for the supply of coke, steam, and energy to our customers, but these negotiations may not be successful and these customers may not continue to purchase coke, steam, or electricity from us under long-term agreements.
At December 31, 2022, our liabilities for coal workers’ black lung benefits totaled $58.1 million . Our business could be materially and adversely harmed if these liabilities, including the number and award size of claims, were increased. See “Item 1.
At December 31, 2023, our liabilities for coal workers’ black lung benefits totaled $58.2 million . Our business could be materially and adversely harmed if these liabilities, including the number and award size of claims, were increased. See “Item 1.
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 United States.
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.
Factors beyond our control could disrupt our cokemaking and logistics operations, adversely affect our ability to service the needs of our customers and increase our operating costs, all of which could have a material and adverse effect on 16 Table of Contents our results of operations.
Factors beyond our control could disrupt our cokemaking and logistics operations, adversely affect our ability to service the needs of our customers and increase our operating costs, all of which could have a material and adverse effect on our results of operations.
The quality of our coke depends significantly on the effectiveness of our quality control systems, which, in turn, depends on a number of factors, including the design of our quality control systems, our quality-training program, our laboratories and our 22 Table of Contents ability to ensure that our employees adhere to our quality control policies and guidelines.
The quality of our coke depends significantly on the effectiveness of our quality control systems, which, in turn, depends on a number of factors, including the design of our quality control systems, our quality-training program, our laboratories and our ability to ensure that our employees adhere to our quality control policies and guidelines.
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.
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.
In addition, the laws of various foreign countries in which we plan to compete may not protect our intellectual property to the same extent as do the laws of the United States. If we fail to obtain adequate patent protection for our proprietary technology, our ability to be commercially competitive may be materially impaired.
In addition, the laws of various foreign countries in which we plan to compete may not protect our intellectual property to the same extent as do the laws of the U.S. If we fail to obtain adequate patent protection for our proprietary technology, our ability to be commercially competitive may be materially impaired.
These revenues depend on continuing operations and, in some cases, certain minimum production levels being achieved at the Vitória cokemaking facility. In the past, the Brazilian economy has been 23 Table of Contents characterized by frequent and occasionally extensive intervention by the Brazilian government and unstable economic cycles.
These revenues depend on continuing operations and, in some cases, certain minimum production levels being achieved at the Vitória cokemaking facility. In the past, the Brazilian economy has been characterized by frequent and occasionally extensive intervention by the Brazilian government and unstable economic cycles.
Risks Related to Our Cokemaking Business If a substantial portion of our agreements to supply coke, electricity, and/or steam are modified or terminated, our cash flows, financial position, permit compliance or results of operations may be adversely affected if we are not able to replace such agreements, or if we are not able to enter into new agreements at the same level of profitability.
Risks Related to Our Cokemaking Business If a substantial portion of our agreements to supply coke, electricity, and/or steam are modified or terminated, our cash flows, financial position, permit compliance, results of operations and/or carrying value of our long-lived assets may be adversely affected if we are not able to replace such agreements, or if we are not able to enter into new agreements at the same level of profitability.
Many steelmakers also are exploring alternatives to blast furnace technology that require less or no use of coke or alternatives that reduce the amount of GHG emissions from the process. For example, electric arc furnace technology is a commercially proven process widely used in the United States.
Many steelmakers also are exploring alternatives to blast furnace technology that require less or no use of coke or alternatives that reduce the amount of GHG emissions from the process. For example, electric arc furnace technology is a commercially proven process widely used in the U.S.
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, 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: 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.
If the cost to produce coke and provide logistics services, including cost of supplies, equipment, metallurgical coal or labor, experience significant price inflation and we cannot pass such increases in our costs of production to our customers, our profit margins may be reduced and our financial condition, results of operations and cash flows may be adversely affected.
If the cost to produce coke and provide logistics services increases due to price or usage, including cost of supplies, equipment, metallurgical coal or labor, and we cannot pass such increases in our costs of production to our customers, our profit margins may be reduced and our financial condition, results of operations and cash flows may be adversely affected.
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, although we are evaluating the feasibility of reducing our GHG emissions profile.
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.
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.
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.
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.
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.
If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, we may be required to delay or reduce the scope of our business strategy. We face material debt maturities which may adversely affect our consolidated financial position. Over the next five years, we have $43.8 million of total consolidated debt maturing.
If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, we may be required to delay or reduce the scope of our business strategy. We may face material debt maturities which may adversely affect our consolidated financial position.
See Note 11 to the consolidated financial statements. 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 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 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.
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.
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.
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.
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 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.
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.
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 and could result in an adverse effect on our business, financial condition and 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.
If these efforts are successful, our stock price and our ability to access capital markets may be negatively impacted. Members of the investment community are also increasing their focus on sustainability practices, including management of GHGs and climate change. As a result, we may face increasing pressure regarding our sustainability disclosures and practices.
If these efforts are successful, our stock price and our ability to access capital markets may be negatively impacted. Members of the investment community are also increasing their focus on sustainability practices, including management of GHGs and climate change. To the extent ESG matters impact our reputation, they may also impact our ability to attract or retain employees or customers.
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.
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.
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. 20 Table of Contents 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.
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.
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.
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.
Our 27 Table of Contents disaster recovery plans may not entirely prevent delays or other complications that could arise from an information systems failure. Our business interruption insurance may not compensate us adequately for losses that may occur.
Our disaster recovery plans may not entirely prevent delays or other complications that could arise from an information systems failure. Our business interruption insurance may not compensate us adequately for losses that may occur. In the ordinary course of our business, we collect and store sensitive data in our data centers, on our networks, and in our cloud vendors.
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, our cash flows or profitability could be materially and adversely affected.
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.
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.
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.
A material decrease in coal mining production in the areas of operation for our logistics business, whether as a result of depressed commodity prices or otherwise, could result in a decline in the volume of coal processed through our logistics facilities, which would reduce our revenues and operating income. 24 Table of Contents Decreased demand for thermal or metallurgical coals, and extended or substantial price declines for coal could adversely affect our operating results for future periods and our ability to generate cash flows necessary to improve productivity and expand operations.
A material decrease in coal mining production in the areas of operation for our logistics business, whether as a result of depressed commodity prices or otherwise, could result in a decline in the volume of coal processed through our logistics facilities, which would reduce our revenues and operating income.
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.
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.
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.
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.
Extreme weather conditions may increase our costs, temporarily impact our production capabilities or cause damage to our facilities. 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.
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.
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.
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.
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.
The growth of cyber-attacks has resulted in an evolving legal landscape which imposes costs that are likely to increase over time.
Our coke plants are also generally located near bodies of water and may be impacted by the effects of climate change. 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.
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.
Climate change may cause changes in weather patterns and increase the frequency or severity of weather events and flooding.
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.
Severe weather may also adversely impact our suppliers and our customers and their ability to purchase and transport our products. Investor interest in climate change, fossil fuels, and sustainability could adversely affect our business and our stock price. Climate change and sustainability have increasingly become important topics to investors and the community at large.
Climate change and sustainability have increasingly become important topics to investors and the community at large.
Removed
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.
Added
Some environmental laws also can impose liability regardless of fault or legality at the time in question, including the characterization of materials.
Removed
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.
Added
Our operations require a reliable supply of equipment, replacement parts and metallurgical coal.
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, the use of fossil fuels or the effects of climate change, or may be impacted by the increasing drive towards a lower carbon economy in an effort to limit the impacts of climate change.
Added
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.
Removed
Any new regulations, legislation or taxes that affect other industries that use coal or other fossil fuels processed through our terminals could reduce throughput and utilization of our logistics assets.
Added
As a result, we may face increasing pressure regarding our sustainability disclosures and practices.
Removed
Future legislation or regulation regarding climate change and GHG emissions could impose significant costs on our business and our customers and suppliers due to increased energy, capital equipment, emissions controls, environmental monitoring and reporting and other costs in order to comply with these laws and regulations.
Added
While we have in the past engaged, and expect in the future to continue to engage, in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) on “ESG matters”, such as sustainability and inclusion, to respond to stakeholder expectations, such initiatives may be costly and may not have the desired effect.
Removed
Failure to comply with these regulations could result in fines to our company and could affect our business, financial condition and results of operations. Additionally, our suppliers may face cost increases to comply with any new legislation or regulations leading to higher costs to us for goods or services.
Added
For example, actions or statements that we may take based on expectations, assumptions, or third-party information may at some point be 19 Table of Contents determined to be erroneous or otherwise not in keeping with best practices.
Removed
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.
Added
If we fail to, or are perceived to fail to, appropriately advance certain initiatives or use appropriate methodologies and data sources, we may be subject to various adverse impacts, including reputational damage, stakeholder engagement, and/or litigation. Simultaneously, there are efforts by some parties, including some policymakers and activists, to constrain or eliminate companies' efforts on various ESG-related matters.
Removed
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.
Added
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.
Removed
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. 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.
Added
Decreased demand for thermal or metallurgical coals, and extended or substantial price declines for coal could adversely affect our operating results for future periods and our ability to generate cash flows necessary to improve productivity and expand operations.
Removed
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.
Added
Lack of sufficient capital resources could significantly limit our ability to meet our financial obligations or to take advantage of business and strategic opportunities.
Removed
Business-Legal and Regulatory Requirements-Regulation of Operations.” General Risks The COVID-19 pandemic has in the past and may continue to adversely impact or disrupt our, and our customers’ and suppliers’, business, operations, cash flows, financial condition and results of operations. Any future outbreak of COVID-19 variants or any other highly infectious or contagious disease could have a similar impact.
Added
As of December 31, 2023, we have no consolidated debt maturing over the next five years. See Note 11 to our consolidated financial statements. However, we may enter into debt agreements throughout the course of the fiscal year which could create material debt maturities.
Removed
The COVID-19 pandemic had, and may continue to have, adverse impacts on our business. While our facilities continued to operate during the COVID-19 pandemic due to our inclusion in the Critical Manufacturing Sector as defined by the U.S.
Removed
Department of Homeland Security, COVID-19 negatively impacted our business and results of operations primarily due to the impacts of the COVID-19 pandemic on our customers and suppliers. For example, certain of our steelmaking and logistics customers were adversely impacted by the idling of manufacturing plants as a result of the COVID-19 pandemic.
Removed
In an effort to assist certain of our steelmaking customers impacted by the COVID-19 pandemic, we implemented volume relief measures by providing near-term coke supply relief for such customers in exchange for extending of certain contracts.
Removed
The extent to which COVID-19 or other future pandemics impact our business and results of operations, and our customers' and suppliers' business and results of operations, are out of our control and will depend on future developments that are highly uncertain and cannot be predicted, including rising inflation and supply chain issues, the emergence of new variants, the severity and duration of the pandemic and actions taken to contain it or mitigate its effects, as well as the effectiveness of vaccine rollout plans, the public's perception of the safety of the vaccines and their willingness to take the vaccines, public safety measures and the impact of the pandemic on the global economy.
Removed
Therefore, the impact of COVID-19, including any 26 Table of Contents resurgences of the virus, new variants, or other similar future health crises may heighten other risks discussed herein, which could adversely impact or disrupt our business, financial condition, results of operations, cash flows and market value.
Removed
In the ordinary course of our business, we collect and store sensitive data in our data centers, on our networks, and in our cloud vendors.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs 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 DRT 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.
Biggest changeAs 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.
Steel may require us to demolish and remove the facility and remediate the site to original condition upon exercise of its option to repurchase the land. • Approximately 250 acres in Middletown (Butler County), Ohio near Cliff’s Middletown Works facility, on which the Middletown cokemaking facility is located. • Approximately 180 acres in Ceredo (Wayne County), West Virginia on which KRT has two terminals for its mixing and/or handling services along the Ohio and Big Sandy Rivers. • Approximately 175 acres in Convent (St.
Steel may require us to demolish and remove the facility and remediate the site to original condition upon exercise of its option to repurchase the land. • Approximately 250 acres in Middletown (Butler County), Ohio near the Cliffs Steel Middletown Works facility, on which the Middletown cokemaking facility is located. • Approximately 180 acres in Ceredo (Wayne County), West Virginia on which KRT has two terminals for its mixing and/or handling services along the Ohio and Big Sandy Rivers. • Approximately 175 acres in Convent (St.
James Parish), Louisiana, on which CMT is located. We lease the following real property as of December 31, 2022: • 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, 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.
Properties We own the following real property as of December 31, 2022: • Approximately 1,700 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. 28 Table of Contents • 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, 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.
The leased property is inside ArcelorMittal’s Indiana Harbor Works facility and is part of an enterprise zone.
The leased property is inside the Cliffs Steel Indiana Harbor Works facility and is part of an enterprise zone.
Removed
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.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOur 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, 2022.
Biggest changeOur 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.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures While the Company divested substantially all of its remaining coal mining assets in April 2016, the Company remains responsible for reclamation of certain legacy coal mining locations that are subject to Mine Safety and Health Administration ("MSHA") regulatory purview and the Company continues to own certain logistics assets that are regulated by MSHA.
Biggest changeItem 4. Mine Safety Disclosures While the Company divested substantially all of its remaining coal mining assets in April 2016, the Company remains responsible for reclamation of certain legacy coal mining locations that are subject to Mine Safety and Health Administration (“MSHA”) regulatory purview and the Company continues to own certain logistics assets that are regulated by MSHA.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph below matches the Company's cumulative 5-Year total shareholder return on common stock with the cumulative total returns of the S&P Small Cap 600 Index, the NASDAQ U.S. Benchmark Iron & Steel Index, and the Dow Jones U.S. Iron & Steel Index.
Biggest changeThe shareholder returns in the graph below are based on historical data and are not indicative of, nor intended to forecast, future performance. The graph below matches the Company's cumulative 5-Year total shareholder return on common stock with the cumulative total returns of the S&P Small Cap 600 Index and the NASDAQ U.S. Benchmark Iron & Steel Index.
Performance Graph The following performance graph and related information shall not be deemed "soliciting material" or be "filed" with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or Exchange Act, except to the extent we specifically incorporate it by reference into such filing.
Performance Graph The following performance graph and related information shall not be deemed “ soliciting material ” or be “ filed ” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act or Exchange Act, except to the extent we specifically incorporate it by reference into such filing.
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, 2017 to December 31, 2022. 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, 2018 to December 31, 2023. In selecting the indices for comparison, we considered market capitalization and industry or line-of-business.
There have been no share repurchases since the first quarter of 2020 as the Company temporarily suspended additional repurchases, leaving $96.3 million available under the authorized repurchase program as of December 31, 2022. 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, 2023. Item 6. [Reserved] 31 Table of Contents
Dividends Our Board of Directors declared the following dividends during 2022 and through February 24, 2023: Date Declared Record Date Dividend Per Share Payment Date February 1, 2022 February 17, 2022 $0.06 March 1, 2022 May 2, 2022 May 18, 2022 $0.06 June 1, 2022 August 2, 2022 August 18, 2022 $0.08 September 1, 2022 October 31, 2022 November 18, 2022 $0.08 December 1, 2022 February 2, 2023 February 16, 2023 $0.08 March 1, 2023 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 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.
The S&P Small Cap 600 Index is a broad equity market index comprised of companies of between $450 million and $2.1 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 $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.
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. The Company has elected to replace the Dow Jones U.S. Iron and Steel Index with the NASDAQ U.S.
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.
Removed
Benchmark Iron and Steel Index in this analysis and going forward, as the market capitalization profile is more comparable to that of the Company. In this transition year, the stock performance graph includes both the Dow Jones U.S. Iron and Steel Index and the NASDAQ U.S.
Removed
Benchmark Iron and Steel Index. 30 Table of Contents Holders As of February 17, 2023, we had 8,340 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

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

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Biggest changeYears Ended December 31, 2022 2021 Increase (Decrease) (Dollars in millions) Revenues Sales and other operating revenue $ 1,972.5 $ 1,456.0 $ 516.5 Costs and operating expenses Cost of products sold and operating expenses 1,604.9 1,118.8 486.1 Selling, general and administrative expenses 71.4 61.8 9.6 Depreciation and amortization expense 142.5 133.9 8.6 Total costs and operating expenses 1,818.8 1,314.5 504.3 Operating income 153.7 141.5 12.2 Interest expense, net 32.0 42.5 (10.5) Loss on extinguishment of debt — 31.9 (31.9) Income before income tax expense 121.7 67.1 54.6 Income tax expense 16.8 18.3 (1.5) Net income 104.9 48.8 56.1 Less: Net income attributable to noncontrolling interests 4.2 5.4 (1.2) Net income attributable to SunCoke Energy, Inc. $ 100.7 $ 43.4 $ 57.3 Sales and Other Operating Revenue and Costs of Products Sold and Operating Expenses.
Biggest changeRefer 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.
Critical Accounting Policies and Estimates A summary of our significant accounting policies is included in Note 2 to the 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.
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.
Ongoing capital expenditures do not include normal repairs and maintenance expenses, which are expensed as incurred; 38 Table of Contents • 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 remediation project expenditures required to implement design changes to ensure that our existing facilities operate in accordance with existing environmental permits.
As a result, our future results and financial condition may differ materially from those we currently anticipate as a result of the factors we describe under “Cautionary Statement Concerning Forward-Looking Statements” and “Risk Factors.” This Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is based on financial data derived from the financial statements prepared in accordance with United States generally accepted accounting principles (“GAAP”) and certain other financial data that is prepared using a non-GAAP measure.
As a result, our future results and financial condition may differ materially from those we currently anticipate as a result of the factors we describe under “Cautionary Statement Concerning Forward-Looking Statements” and “Risk Factors.” This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is based on financial data derived from the financial statements prepared in accordance with United States generally accepted accounting principles (“GAAP”) and certain other financial data that is prepared using a non-GAAP measure.
Non-GAAP Financial Measures In addition to the GAAP results provided in the Annual Report on Form 10-K, we have provided a non-GAAP financial measure, Adjusted EBITDA. Our management, as well as certain investors, uses this non-GAAP measure to analyze our current and expected future financial performance.
Non-GAAP Financial Measures In addition to the GAAP results provided in this Annual Report on Form 10-K, we have provided a non-GAAP financial measure, Adjusted EBITDA. Our management, as well as certain investors, use this non-GAAP measure to analyze our current and expected future financial performance.
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.
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.
Net i ncome attributable to noncontrolling interest 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 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 Convent Marine Terminal ("CMT"), located in Convent, Louisiana, Kanawha River Terminal ("KRT"), located in Ceredo and Belle, West Virginia, SunCoke Lake Terminal ("Lake Terminal"), located in East Chicago, Indiana, and Dismal River Terminal ("DRT"), located in Vansant, Virginia.
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.
Liquidity and Capital Resources Our primary liquidity needs are to fund working capital, fund investments, service our debt, maintain cash reserves and replace partially or fully depreciated assets and other capital expenditures. Our sources of liquidity include cash generated from operations, borrowings under our Revolving Facility and, from time to time, debt and equity offerings.
Steel. Liquidity and Capital Resources Our primary liquidity needs are to fund working capital, fund investments, service our debt, maintain cash reserves and replace partially or fully depreciated assets and other capital expenditures. Our sources of liquidity include cash generated from operations, borrowings under our revolving credit facility (“Revolving Facility”) and, from time to time, debt and equity offerings.
We will submit 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.
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.
For a reconciliation of the non-GAAP measure to its most comparable GAAP component, see "Non-GAAP Financial Measures" in this Item and Note 19 to our consolidated financial statements. Our MD&A is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition and cash flows.
For a reconciliation of the non-GAAP measure to its most comparable GAAP component, see “Non-GAAP Financial Measures” in this Item 7. Our MD&A is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition and cash flows.
We returned meaningful capital to our shareholders through the declaration and payment of a dividend during each quarter of 2022, increasing from $0.06 per share during the first half of the year to $0.08 per share during the second half of the year, representing a quarterly increase of 33 percent.
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.
(2) 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.
(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 following table summarizes our capital expenditures: Years Ended December 31, 2022 2021 (Dollars in millions) Ongoing capital $ 72.1 $ 87.6 Expansion capital (1) 3.4 11.0 Total capital expenditures (2) $ 75.5 $ 98.6 (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.
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.
Management believes Adjusted EBITDA is an important measure of operating performance and uses it as the primary basis for the chief operating decision maker 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 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.
Our results of operations include reference to our business operations and market conditions, which are further described in Part I of this document. 2022 Overview Our consolidated results of operations in 2022 were as follows: Year Ended December 31, 2022 (Dollars in millions) Net income $ 104.9 Net cash provided by operating activities $ 208.9 Adjusted EBITDA (1) $ 297.7 (1) See Note 19 in our consolidated financial statements 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. 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.
(2) The current portion of the black lung liability was $5.9 million and $5.4 million at December 31, 2022 and 2021, respectively, and was included in accrued liabilities on the Consolidated Balance Sheets. 39 Table of Contents The following table summarizes annual black lung payments and (benefit) expense: Years Ended December 31, 2022 2021 2020 (Dollars in millions) Payments $ 5.0 $ 4.4 $ 6.0 (Benefit) expense (1) $ (0.2) $ 3.1 $ 15.4 (1) Black lung (benefit) expense 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, 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.
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.
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.
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, 2022 and 2021: Years Ended December 31, 2022 2021 (Dollars in millions) Net cash provided by operating activities $ 208.9 $ 233.1 Net cash used in investing activities (70.2) (99.3) Net cash used in financing activities (112.5) (118.4) Net increase in cash and cash equivalents $ 26.2 $ 15.4 Cash Provided by Operating Activities Net cash provided by operating activities decreased by $24.2 million to $208.9 million in 2022 as compared to 2021.
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.
The following table summarizes discount rates utilized, active claims and the total black lung liabilities: December 31, 2022 2021 Discount rate (1) 4.9 % 2.4 % Active claims 332 332 Total black lung liability (dollars in millions) (2) $ 58.1 $ 63.3 (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.
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 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 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 decrease primarily reflects unfavorable year-over-year changes in primary working capital, which is comprised of accounts receivable, inventories and accounts payable, driven by higher coal prices.
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.
See Note 19 to our consolidated financial statements. 34 Table of Contents Segment Operating Data The following table sets forth financial and operating data by segment for the years ended December 31, 2022 and 2021: Years Ended December 31, 2022 2021 Increase (Decrease) (Dollars in millions, except per ton amounts) Sales and other operating revenue: Domestic Coke $ 1,856.9 $ 1,354.5 $ 502.4 Brazil Coke 38.0 36.6 1.4 Logistics 77.6 64.9 12.7 Logistics intersegment sales 28.9 27.1 1.8 Elimination of intersegment sales (28.9) (27.1) (1.8) Total sales and other operating revenue $ 1,972.5 $ 1,456.0 $ 516.5 Adjusted EBITDA (1) : Domestic Coke $ 263.4 $ 243.4 $ 20.0 Brazil Coke 14.5 17.2 (2.7) Logistics 49.7 43.5 6.2 Corporate and Other, net (29.9) (28.7) (1.2) Total Adjusted EBITDA $ 297.7 $ 275.4 $ 22.3 Coke Operating Data: Domestic Coke capacity utilization (2) 100 % 101 % (1) % Domestic Coke production volumes (thousands of tons) 4,023 4,162 (139) Domestic Coke sales volumes (thousands of tons) 4,031 4,183 (152) Domestic Coke Adjusted EBITDA per ton (3) $ 65.34 $ 58.19 $ 7.15 Brazilian Coke production—operated facility (thousands of tons) 1,585 1,685 (100) Logistics Operating Data: Tons handled (thousands of tons) 22,291 19,933 2,358 (1) See Note 19 in our consolidated financial statements 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. 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.
Dividends In addition to the $23.6 million in dividends paid to our shareholders during 2022, on February 2, 2023, SunCoke's Board of Directors declared a cash dividend of $0.08 per share of the Company's common stock. This dividend will be paid on March 1, 2023, to stockholders of record of February 16, 2023. See further discussion in "Item 5.
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.
Contractual Obligations As of December 31, 2022, significant contractual obligations related to our metallurgical coal procurement contracts, which are generally based on annual coke production requirements at fixed coal prices, were $1,092.8 million and extend through 2023.
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.
The increase was driven by higher employee related expenses and higher cost of professional services. These increased costs were mostly offset by valuation adjustments as a result of changes in discount rates on certain legacy liabilities, which decreased legacy costs by $3.3 million.
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.
These higher costs were partially offset by valuation adjustments as a result of changes in discount rates on certain legacy liabilities, which decreased legacy costs by $3.3 million as compared to the prior year. Depreciation and Amortization Expense. Depreciation and amortization expense increased as a result of depreciable assets placed into service since the prior year period.
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.
(3) 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 2022 vs 2021 2022 vs 2021 (Dollars in millions) Beginning $ 1,354.5 $ 243.4 Volume (1) (46.4) (13.9) Price (2) 543.2 47.4 Operating and maintenance costs (3) N/A (13.1) Energy and other (4) 5.6 (0.4) Ending $ 1,856.9 $ 263.4 (1) Volumes decreased during 2022 primarily due to changes in the mix of production.
(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.
Sales and other operating revenue and costs of products sold and operating expenses increased in 2022 as compared to 2021, primarily driven by the pass-through of higher coal prices in our Domestic Coke segment, which also resulted in lower margins.
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.
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. As of December 31, 2022, we had $90.0 million of cash and cash equivalents and $315.0 million of borrowing availability under our Revolving Facility.
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.
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. Material changes in capital expenditure levels may impact financial results, including but not limited to the amount of depreciation, interest expense and repair and maintenance expense.
Material changes in capital expenditure levels may impact financial results, including but not limited to the amount of depreciation, interest expense and repair and maintenance expense.
This measure is not in accordance with, or a substitute for, GAAP and may be different from, or inconsistent with, non-GAAP financial measures used by other companies. See Note 19 in our consolidated financial statements for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement for 2022, 2021 and 2020.
This measure is not in accordance with, or a substitute for, GAAP and may be different from, or inconsistent with, non-GAAP financial measures used by other companies.
The amounts involved may be material. Refer to further liquidity discussion below as well as "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.
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.
Logistics The following table explains year-over-year changes in our Logistics segment's sales and other operating revenues and Adjusted EBITDA results: Sales and other operating revenue, inclusive of intersegment sales Adjusted EBITDA 2022 vs 2021 2022 vs 2021 (Dollars in millions) Beginning $ 92.0 $ 43.5 Transloading volumes (1) 5.9 3.6 Price/margin impact of mix in transloading services (2) 8.9 8.9 Other (3) (0.3) (6.3) Ending $ 106.5 $ 49.7 (1) Volumes improved as a result of increased demand driven by the strong domestic metallurgical and thermal coal markets.
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.
The increase in selling, general and administrative expense primarily reflects higher employee related expenses, higher cost of professional services, and transaction costs incurred as part of the granulated pig iron project.
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.
(2) Revenues increased primarily as a result of the pass-through of higher coal prices on our long-term, take-or-pay agreements, which also had a favorable impact on Adjusted EBITDA due to higher coal-to-coke yield gains on higher coal prices. Favorable pricing on export coke sales also increased revenues and was the primary driver of the increase to Adjusted EBITDA during 2022.
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.
As of December 31, 2022 significant contractual obligations related to debt were $543.8 m illion of principal borrowings and $166.6 million of related interest, which will be repaid through 2029. Projected interest costs on variable rate instruments were calculated using market rates at December 31, 2022. See Note 11 to our consolidated financial statements.
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.
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.
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.
Market for Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities." Covenants As of December 31, 2022, 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.
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.
A decrease of 25 basis points in the discount rate would have increased black lung expense by $1.1 million in 2022.
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.
We also have contractual obligations for leases, including land, office space, equipment, railcars and locomotives. 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.
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 11 to the consolidated financial statements for details on debt covenants. Credit Rating In May 2022, S&P Global Ratings reaffirmed our corporate credit rating of BB- (stable). In June 2022, Moody’s Investors Service reaffirmed our corporate credit rating of B1 and upgraded the outlook from stable to positive.
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).
Additionally, dividends paid in 2022 increased $3.5 million as compared to the dividends paid in the prior year as a result of an increase in the dividend per share amount.
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.
See "Analysis of Segment Results" later in this section for further details of these 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.
Income tax expense during 2022 reflects the net impact of Foreign Tax Credit regulations signed in 2022 further described in Note 4 to our consolidated financial statements, which had a net result of an income tax benefit of $6.5 million during the current year period.
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.
Cash Used in Investing Activities Net cash used in investing activities decreased $29.1 million to $70.2 million in 2022 as compared to 2021 primarily driven by the timing of payments related to capital expenditures as well as the completion of certain foundry cokemaking expansion projects in 2021. Refer to Capital Requirements and Expenditures below for further detail.
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.
(2) Revenues and Adjusted EBITDA increased as a result of favorable pricing at CMT driven by the strong export coal market. (3) Other decreases in Adjusted EBITDA reflect higher operating and maintenance costs. Brazil Coke Sales and other operating revenue increased $1.4 million, or 4 percent, to $38.0 million in 2022 compared to $36.6 million in 2021.
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.
Lake Terminal and DRT are located adjacent to our Indiana Harbor and Jewell cokemaking facilities, respectively. The operations of each of our segments are described in Part I of this document. Corporate expenses that can be identified with a segment have been included in determining segment results. The remainder is included in Corporate and Other.
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.
Interest Expen se, net. Interest expense, net, benefited in 2022 from a lower interest rate on the outstanding senior notes, which decreased to 4.875 percent from 7.500 percent as a result of the debt refinancing that occurred during the second quarter of 2021, as well as lower average debt balances during the current year period. Income Tax Expense.
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.
Removed
The Company delivered strong financial results for the year ended 2022. Favorable pricing on export coke sales in our Domestic Coke segment and higher price realization and volumes within our Logistics segment drove record Adjusted EBITDA performance in 2022. We also increased our participation in the foundry coke market, while continuing to deliver on our long-term, take-or-pay coke contracts.
Added
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.
Removed
Additionally, we reduced total debt by approximately $83 million in 2022 . Recent Developments • Granulated Pig Iron Project. On June 28, 2022, the Company entered into a non-binding letter of intent with U.S. Steel. The letter of intent sets out the principal terms and conditions upon which SunCoke would acquire two blast furnaces from U.S.
Added
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.
Removed
Steel's Granite City Works facility and construct a granulated pig iron facility with an annual capacity of 2 million tons to be sold to U.S. Steel for a ten year initial term. Items Impacting Comparability • 2021 Debt Refinancing. During the second quarter of 2021, the Company refinanced its debt obligations.
Added
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.
Removed
The Company issued $500.0 million of 4.875 percent senior notes, due in 2029 ("2029 Senior Notes"), amended and extended the maturity of its revolving credit facility ("Revolving Facility") to June 2026 and reduced the Revolving Facility capacity by $50.0 million to $350.0 million.
Added
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.
Removed
The Company used the proceeds of the 2029 Senior Notes along with borrowings under the Company's Revolving Facility to purchase and redeem all of the 7.500 percent senior notes, due in 2025 ("2025 Senior Notes").
Added
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.
Removed
As a result of the debt refinancing and revolver amendment, the year ended December 31, 2021 included a loss on extinguishment of debt on the Consolidated Statement of Income of $31.9 million, which consisted of the premium paid of $22.0 million and the write-off of unamortized debt issuance costs of $6.9 million and the remaining original issue discount of $3.0 million. 32 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, 2022 as compared to the year ended December 31, 2021.
Added
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.
Removed
Refer to Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2021 Annual Report on Form 10-K for the year-over-year analysis of consolidated results of operations for the year ended December 31, 2021 as compared to the year ended December 31, 2020.
Added
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.
Removed
Additionally, revenues further benefited from favorable pricing on export coke sales in our Domestic Coke segment, which partially offset the impact of higher coal prices on margins. Selling, General and Administrative Expen ses.
Added
The remainder is included in Corporate and Other, including activity from our legacy coal mining business, which is not considered a reportable segment and, therefore, not included in our segment information in Note 19. However, we have included Corporate and Other within our operating data below.
Removed
Additionally, the current year period reflects the recognition of research and development credits and lower apportioned state income tax rates, which resulted in an income tax benefits of $4.0 million and $6.4 million, respectively, including the related revaluation of certain deferred tax liabilities. See Note 4 to our consolidated financial statements for further detail. Noncontrolling Interest.
Added
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.
Removed
(3) Higher operating and maintenance costs includes the impact of planned maintenance outages and higher cost of fuel. (4) Favorable energy pricing at our Haverhill II facility increased both revenue and Adjusted EBITDA. This increase to Adjusted EBITDA was more than offset by higher allocation of corporate costs.
Added
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.
Removed
Adjusted EBITDA decreased $2.7 million, or 16 percent, to $14.5 million in 2022 compared to $17.2 million in 2021. Sales and other operating revenue and Adjusted EBITDA reflect the impact of lower volumes, including the absence of production bonuses for meeting certain volume targets received in the prior year.
Added
(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.
Removed
The impact of lower volumes on sales and other operating revenue was more than offset by the pass-through of higher reimbursable operating and maintenance costs as well as favorable translation adjustments. 36 Table of Contents Corporate and Other Corporate and Other expenses, increased $1.2 million, or 4 percent, to $29.9 million in 2022 as compared to $28.7 million in 2021.
Added
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.
Removed
This decrease was partially offset by 37 Table of Contents higher operating results in our Domestic Coke segment, primarily driven by favorable pricing on export coke sales, and in our Logistics segment, driven by favorable pricing and higher transloading volumes.
Added
The Company evaluates the performance of its segments based on segment Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted for any impairments, restructuring costs, gains or losses on extinguishment of debt, and/or transaction costs (“Adjusted EBITDA”).
Removed
Cash Used in Financing Activities Net cash used in financing activities decreased $5.9 million to $112.5 million in 2022 as compared to $118.4 million in 2021.
Added
EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income or operating income under GAAP and may not be comparable to other similarly titled measures in other businesses. Management believes Adjusted EBITDA is an important measure in assessing operating performance.
Removed
T his decrease was primarily driven by the absence of costs associated with the debt refinancing that took place during the second quarter of 2021, which consisted of a $22.0 million premium and $12.0 million of debt issuance costs.
Added
Adjusted EBITDA provides useful information to investors because it highlights trends in our business that may not otherwise be apparent when relying solely on GAAP measures and because it eliminates items that have less bearing on our operating performance.
Removed
These decreases were partly offset by higher current period net repayments on the Company's debt of $19.7 million, excluding the impact of funding of the debt refinancing in the prior period, and $4.4 million of cash distributions made to noncontrolling interests.
Added
EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, and they should not be considered a substitute for net income, or any other measure of financial performance presented in accordance with GAAP. Additionally, other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+0 added−1 removed10 unchanged
Biggest changeWe are subject to market risk for the price of coals used to produce coke sold into the export coke market. Export coke sales are typically based on coke market pricing at the time of sale, rather than the pass-through provisions in our long-term, take-or-pay agreements. Generally over time, market prices for metallurgical coal and coke have been correlated.
Biggest changeWe are subject to market risk for the price of coals used to produce non-contracted blast coke sold into both the export and North American domestic coke markets. Non-contracted blast coke sales are typically based on coke market pricing at the time of sale, rather than the pass-through provisions in our long-term, take-or-pay agreements.
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 $0.4 million and $0.3 million for the years ended December 31, 2022 and 2021, 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 $0.6 million and $0.4 million for the years ended December 31, 2023 and 2022, 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, 2022 and 2021, the daily average outstanding balance on borrowings with variable interest rates was $105.8 million and $102.8 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, 2023 and 2022, the daily average outstanding balance on borrowings with variable interest rates was $14.9 million and $105.8 million, respectively.
Additionally, the timing of contracting our coal purchases versus the timing of contracting our coke sales may cause favorable or unfavorable differences between the prices at which we procure our coals and the market rates at which we are able to sell our coke into the export market.
Additionally, the timing of contracting our coal purchases versus the timing of contracting our coke sales may cause favorable or unfavorable differences between the prices at which we procure our coals and the market rates at which we are able to sell our coke into both the export and North American domestic coke markets.
If the currency exchange rates had changed by 10 percent, we estimate the impact to our net income in 2022 and 2021 would have been approximately $0.4 million and $0.5 million. 41 Table of Contents
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
Assuming a 50 basis point change in LIBOR, interest expense would have been impacted by $0.5 million in both 2022 and 2021, respectively. At December 31, 2022, we had outstanding borrowings with variable interest rates of $35.0 million under the Revolving Facility.
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.
We monitor the market for our coal purchases versus pricing in the coke market to optimize profitability in our export business. However, we are exposed to market risk to the extent the coal and coke markets fall out of correlation.
Generally over time, market prices for metallurgical coal and coke have been correlated. We monitor the market for our coal purchases versus pricing in the coke markets to optimize profitability in both the export and North American domestic coke markets. However, we are exposed to market risk to the extent the coal and coke markets fall out of correlation.
Refer to Note 11 to our consolidated financial statements for further detail. At December 31, 2022 and 2021, we had cash and cash equivalents of $90.0 million and $63.8 million, respectively, which accrue interest at various rates.
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.
Removed
Subsequent to December 31, 2022, we amended the Revolving Facility to transition from a variable interest rate based on LIBOR to a variable interest rate based on the secured overnight financing rate ("SOFR"). The Company does not expect the transition from LIBOR to SOFR to have a material impact on its consolidated financial statements and disclosures.

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