16. Supplemental Condensed Consolidating Financial Information

Certain 100 percent owned subsidiaries of the Company serve as guarantors of the obligations under the Credit Agreement and $240 million Notes (“Guarantor Subsidiaries”). These guarantees are full and unconditional (subject, in the case of the Guarantor Subsidiaries, to customary release provisions as described below) and joint and several. For purposes of the following footnote, SunCoke Energy, Inc. is referred to as “Issuer.” The indenture dated July 26, 2011 among the Company, the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., governs subsidiaries designated as “Guarantor Subsidiaries.” All other consolidated subsidiaries of the Company are collectively referred to as “Non-Guarantor Subsidiaries.”

The ability of the Partnership and Indiana Harbor to pay dividends and make loans to the Company is restricted under the partnership agreements of the Partnership and Indiana Harbor, respectively. The credit agreement governing the Partnership’s credit facility and the indenture governing the Partnership Notes contain customary provisions which would potentially restrict the Partnership’s ability to make distributions or loans to the Company under certain circumstances. For the year ended December 31, 2013, less than 25 percent of net assets were restricted.

The guarantee of a Guarantor Subsidiary will terminate upon:


•	a sale or other disposition of the Guarantor Subsidiary or of all or substantially all of its assets;


•	a sale of the majority of the Capital Stock of a Guarantor Subsidiary to a third party, after which the Guarantor Subsidiary is no longer a "Restricted Subsidiary" in accordance with the indenture governing the Notes;


•	the liquidation or dissolution of a Guarantor Subsidiary so long as no "Default" or "Event of Default," as defined under the indenture governing the Notes, has occurred as a result thereof;


•	the designation of a Guarantor Subsidiary as an "unrestricted subsidiary" in accordance with the indenture governing the Notes


•	the requirements for defeasance or discharge of the indentures governing the Notes having been satisfied;


•	the release, other than the discharge through payments by a Guarantor Subsidiary, from its guarantee under the Credit Agreement or other indebtedness that resulted in the obligation of the Guarantor Subsidiary under the indenture governing the Notes.

The following supplemental condensed combining and consolidating financial information reflects the Issuer’s separate accounts, the combined accounts of the Guarantor Subsidiaries, the combined accounts of the Non-Guarantor Subsidiaries, the combining and consolidating adjustments and eliminations and the Issuer’s consolidated accounts for the dates and periods indicated. For purposes of the following condensed combining and consolidating information, the Issuer’s investments in its subsidiaries and the Guarantor and Non-Guarantor Subsidiaries’ investments in its subsidiaries are accounted for under the equity method of accounting.

SunCoke Energy, Inc.

Condensed Consolidating Statement of Operations

Three Months Ended June 30, 2014

(Dollars in millions)



	Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Combining and Consolidating Adjustments		Total

Revenues
Sales and other operating revenue	$	—		$	116.0		$	255.7		$	—	$	371.7
Equity in (loss) earnings of subsidiaries	(67.9		)	8.4			—			59.5		—
Other income	—			0.5			—			—		0.5
Total revenues	(67.9		)	124.9			255.7			59.5		372.2
Costs and operating expenses
Cost of products sold and operating expenses	—			87.0			203.0			—		290.0
Selling, general and administrative expenses	3.7			10.2			8.0			—		21.9
Depreciation, depletion and amortization	—			10.8			17.8			—		28.6
Asset and goodwill impairment	—			103.1			—			—		103.1
Total costs and operating expenses	3.7			211.1			228.8			—		443.6
Operating (loss) income	(71.6		)	(86.2		)	26.9			59.5		(71.4		)
Interest expense (income), net	6.8			(2.3		)	22.6			—		27.1
(Loss) income before income tax (benefit) expense and loss from equity method investment	(78.4		)	(83.9		)	4.3			59.5		(98.5		)
Income tax (benefit) expense	(29.2		)	(15.7		)	(5.9		)	—		(50.8		)
Loss from equity method investment	—			—			0.9			—		0.9
Net (loss) income	(49.2		)	(68.2		)	9.3			59.5		(48.6		)
Less: Net income attributable to noncontrolling interests	—			—			0.6			—		0.6
Net (loss) income attributable to SunCoke Energy, Inc.	$	(49.2	)	$	(68.2	)	$	8.7		$	59.5	$	(49.2	)
Comprehensive (loss) income	$	(47.0	)	$	(68.9	)	$	12.2		$	57.3	$	(46.4	)
Less: Comprehensive income attributable to noncontrolling interests	—			—			0.6			—		0.6
Comprehensive (loss) income attributable to SunCoke Energy, Inc.	$	(47.0	)	$	(68.9	)	$	11.6		$	57.3	$	(47.0	)

SunCoke Energy, Inc.

Condensed Consolidating Statement of Operations

Three Months Ended June 30, 2013

(Dollars in millions)



	Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total

Revenues
Sales and other operating revenue	$	—		$	132.9		$	270.7		$	—		$	403.6
Equity in earnings of subsidiaries	14.5			18.9			—			(33.4		)	—
Other income	—			—			0.1			—			0.1
Total revenues	14.5			151.8			270.8			(33.4		)	403.7
Costs and operating expenses
Cost of products sold and operating expenses	—			110.8			221.6			—			332.4
Selling, general and administrative expenses	3.0			12.1			6.7			—			21.8
Depreciation, depletion and amortization	—			10.5			12.9			—			23.4
Total costs and operating expenses	3.0			133.4			241.2			—			377.6
Operating income	11.5			18.4			29.6			(33.4		)	26.1
Interest expense (income), net	9.3			(3.8		)	6.6			—			12.1
Income before income tax expense and loss from equity method investment	2.2			22.2			23.0			(33.4		)	14.0
Income tax (benefit) expense	(3.5		)	4.9			(0.3		)	—			1.1
Loss from equity method investment	—			—			0.2			—			0.2
Net income	5.7			17.3			23.1			(33.4		)	12.7
Less: Net income attributable to noncontrolling interests	—			—			7.0			—			7.0
Net income attributable to SunCoke Energy, Inc.	$	5.7		$	17.3		$	16.1		$	(33.4	)	$	5.7
Comprehensive income	$	1.7		$	16.7		$	19.6		$	(29.3	)	$	8.7
Less: Comprehensive income attributable to noncontrolling interests	—			—			7.0			—			7.0
Comprehensive income attributable to SunCoke Energy, Inc.	$	1.7		$	16.7		$	12.6		$	(29.3	)	$	1.7

SunCoke Energy, Inc.

Condensed Consolidating Statement of Operations

Six Months Ended June 30, 2014

(Dollars in millions)



	Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Combining and Consolidating Adjustments		Total

Revenues
Sales and other operating revenue	$	—		$	228.6		$	501.1		$	—	$	729.7
Equity in (loss) earnings of subsidiaries	(61.3		)	17.8			—			43.5		—
Other income	—			2.0			0.1			—		2.1
Total revenues	(61.3		)	248.4			501.2			43.5		731.8
Costs and operating expenses
Cost of products sold and operating expenses	—			183.9			410.1			—		594.0
Selling, general and administrative expenses	6.9			22.4			14.5			—		43.8
Depreciation, depletion and amortization	—			21.4			36.2			—		57.6
Asset and goodwill impairment	—			103.1			—			—		103.1
Total costs and operating expenses	6.9			330.8			460.8			—		798.5
Operating (loss) income	(68.2		)	(82.4		)	40.4			43.5		(66.7		)
Interest expense (income), net	16.1			(4.4		)	27.5			—		39.2
(Loss) income before income tax benefit and loss from equity method investment	(84.3		)	(78.0		)	12.9			43.5		(105.9		)
Income tax benefit	(27.3		)	(22.4		)	(5.3		)	—		(55.0		)
Loss from equity method investment	—			—			1.5			—		1.5
Net (loss) income	(57.0		)	(55.6		)	16.7			43.5		(52.4		)
Less: Net income attributable to noncontrolling interests	—			—			4.6			—		4.6
Net (loss) income attributable to SunCoke Energy, Inc.	$	(57.0	)	$	(55.6	)	$	12.1		$	43.5	$	(57.0	)
Comprehensive (loss) income	$	(54.6	)	$	(56.9	)	$	20.4		$	41.1	$	(50.0	)
Less: Comprehensive income attributable to noncontrolling interests	—			—			4.6			—		4.6
Comprehensive (loss) income attributable to SunCoke Energy, Inc.	$	(54.6	)	$	(56.9	)	$	15.8		$	41.1	$	(54.6	)

SunCoke Energy, Inc.

Condensed Consolidating Statement of Operations

Six Months Ended June 30, 2013

(Dollars in millions)



	Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries		Combining and Consolidating Adjustments			Total

Revenues
Sales and other operating revenue	$	—		$	269.8		$	585.3	$	—		$	855.1
Equity in earnings of subsidiaries	27.6			38.5			—		(66.1		)	—
Other income, net	—			2.4			0.1		—			2.5
Total revenues	27.6			310.7			585.4		(66.1		)	857.6
Costs and operating expenses
Cost of products sold and operating expenses	—			226.4			488.4		—			714.8
Selling, general and administrative expenses	5.5			24.6			12.3		—			42.4
Depreciation, depletion and amortization	—			20.6			26.7		—			47.3
Total costs and operating expenses	5.5			271.6			527.4		—			804.5
Operating income	22.1			39.1			58.0		(66.1		)	53.1
Interest expense (income), net	19.1			(7.5		)	16.3		—			27.9
Income before income tax (benefit) expense and loss from equity method investment	3.0			46.6			41.7		(66.1		)	25.2
Income tax (benefit) expense	(4.8		)	9.9			0.8		—			5.9
Loss from equity method investment	—			—			0.2		—			0.2
Net income	7.8			36.7			40.7		(66.1		)	19.1
Less: Net income attributable to noncontrolling interests	—			—			11.3		—			11.3
Net income attributable to SunCoke Energy, Inc.	$	7.8		$	36.7		$	29.4	$	(66.1	)	$	7.8
Comprehensive income	$	3.4		$	35.6		$	37.3	$	(61.6	)	$	14.7
Less: Comprehensive income attributable to noncontrolling interests	—			—			11.3		—			11.3
Comprehensive income attributable to SunCoke Energy, Inc.	$	3.4		$	35.6		$	26.0	$	(61.6	)	$	3.4

SunCoke Energy, Inc.

Condensed Consolidating Balance Sheet

June 30, 2014

(Dollars in millions, except per share amounts)



	Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total
Assets
Cash and cash equivalents	$	—		$	140.5		$	63.9		$	—		$	204.4
Receivables	—			27.3			43.0			—			70.3
Inventories	—			47.8			92.6			—			140.4
Income taxes receivable	64.5			—			20.9			(85.4		)	—
Deferred income taxes	14.2			11.8			0.8			(14.2		)	12.6
Other current assets	—			3.9			1.8			—			5.7
Advances to affiliate	13.3			85.9			—			(99.2		)	—
Interest receivable from affiliate	—			3.6			—			(3.6		)	—
Total current assets	92.0			320.8			223.0			(202.4		)	433.4
Notes receivable from affiliate	—			89.0			300.0			(389.0		)	—
Investment in Brazil cokemaking operations	—			—			41.0			—			41.0
Equity method investment in VISA SunCoke Limited	—			—			58.5			—			58.5
Properties, plants and equipment, net	—			422.9			1,076.4			—			1,499.3
Lease and mineral rights, net	—			18.7			—			—			18.7
Goodwill and other intangible assets, net	—			3.4			15.5			—			18.9
Deferred charges and other assets	6.3			25.0			16.1			—			47.4
Investment in subsidiaries	733.4			516.4			—			(1,249.8		)	—
Total assets	$	831.7		$	1,396.2		$	1,730.5		$	(1,841.2	)	$	2,117.2
Liabilities and Equity
Advances from affiliate	$	—		$	13.3		$	85.9		$	(99.2	)	$	—
Accounts payable	—			35.4			86.4			—			121.8
Accrued liabilities	—			35.3			17.0			—			52.3
Short-term debt, including current portion of long-term debt	—			—			13.0			—			13.0
Interest payable	7.6			—			7.3			—			14.9
Interest payable to affiliate	—			—			3.6			(3.6		)	—
Income taxes payable	—			88.7			—			(85.4		)	3.3
Total current liabilities	7.6			172.7			213.2			(188.2		)	205.3
Long-term debt	240.0			—			412.5			—			652.5
Payable to affiliate	—			300.0			89.0			(389.0		)	—
Accrual for black lung benefits	—			32.2			—			—			32.2
Retirement benefit liabilities	—			34.5			—			—			34.5
Deferred income taxes	—			317.3			2.8			(14.2		)	305.9
Asset retirement obligations	—			15.9			2.5			—			18.4
Other deferred credits and liabilities	1.7			13.6			1.0			—			16.3
Total liabilities	249.3			886.2			721.0			(591.4		)	1,265.1
Equity
Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no issued and outstanding shares at June 30, 2014	—			—			—			—			—
Common stock, $0.01 par value. Authorized 300,000,000 shares; issued and outstanding 69,289,348 shares at June 30, 2014	0.7			—			—			—			0.7
Treasury stock,1,755,355 shares at June 30, 2014	(30.0		)	—			—			—			(30.0		)
Additional paid-in capital	536.6			167.9			535.7			(703.6		)	536.6
Accumulated other comprehensive (loss) income	(11.7		)	(3.9		)	(7.8		)	11.7			(11.7		)
Retained earnings	86.8			346.0			211.9			(557.9		)	86.8
Total SunCoke Energy, Inc. stockholders’ equity	582.4			510.0			739.8			(1,249.8		)	582.4
Noncontrolling interests	—			—			269.7			—			269.7
Total equity	582.4			510.0			1,009.5			(1,249.8		)	852.1
Total liabilities and equity	$	831.7		$	1,396.2		$	1,730.5		$	(1,841.2	)	$	2,117.2

SunCoke Energy, Inc.

Condensed Consolidating Balance Sheet

December 31, 2013

(Dollars in millions, except per share amounts)



	Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total
Assets
Cash and cash equivalents	$	—		$	184.7		$	48.9		$	—		$	233.6
Receivables	—			53.4			38.1			—			91.5
Inventories	—			44.1			91.2			—			135.3
Income tax receivable	39.9			—			13.4			(46.7		)	6.6
Advances to affiliates	48.2			33.6			—			(81.8		)	—
Deferred income taxes	9.4			11.8			0.8			(9.4		)	12.6
Other current assets	—			1.3			1.0			—			2.3
Interest receivable from affiliate	—			7.3			—			(7.3		)	—
Total current assets	97.5			336.2			193.4			(145.2		)	481.9
Notes receivable from affiliate	—			89.0			300.0			(389.0		)	—
Investment in Brazilian cokemaking operations	—			—			41.0						41.0
Equity method investment in VISA SunCoke Limited	—			—			56.8			—			56.8
Properties, plants and equipment, net	—			500.9			1,043.2			—			1,544.1
Lease and mineral rights, net	—			52.8			—			—			52.8
Goodwill and other intangible assets, net	—			9.4			16.0			—			25.4
Deferred charges and other assets	11.7			20.5			9.7			—			41.9
Investment in Subsidiaries	963.3			723.8			—			(1,687.1		)	—
Total assets	$	1,072.5		$	1,732.6		$	1,660.1		$	(2,221.3	)	$	2,243.9
Liabilities and Equity
Advances from affiliate	$	—		$	48.2		$	33.6		$	(81.8	)	$	—
Accounts payable	—			48.8			105.5			—			154.3
Accrued liabilities	0.5			52.6			16.4			—			69.5
Short-term debt, including current portion of long-term debt	1.0			—			40.0			—			41.0
Interest payable	13.6			—			4.6			—			18.2
Interest payable to affiliate	—			—			7.3			(7.3		)	—
Income taxes payable	—			46.7			—			(46.7		)	—
Total current liabilities	15.1			196.3			207.4			(135.8		)	283.0
Long term-debt	498.4			—			149.7			—			648.1
Payable to affiliate	—			300.0			89.0			(389.0		)	—
Accrual for black lung benefits	—			32.4			—			—			32.4
Retirement benefit liabilities	—			34.8			—			—			34.8
Deferred income taxes	—			383.9			2.1			(9.4		)	376.6
Asset retirement obligations	—			15.5			2.4			—			17.9
Other deferred credits and liabilities	1.6			16.6			0.6			—			18.8
Total liabilities	515.1			979.5			451.2			(534.2		)	1,411.6
Equity													—
Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no issued and outstanding shares at December 31, 2013	—			—			—			—			—
Common stock, $0.01 par value. Authorized 300,000,000 shares; issued and outstanding 69,636,785 shares at December 31, 2013	0.7			—			—			—			0.7
Treasury Stock, 1,255,355 shares at December 31, 2013	(19.9		)	—			—			—			(19.9		)
Additional paid-in capital	446.9			354.2			745.6			(1,099.8		)	446.9
Accumulated other comprehensive loss	(14.1		)	(2.7		)	(11.4		)	14.1			(14.1		)
Retained earnings	143.8			401.6			199.8			(601.4		)	143.8
Total SunCoke Energy, Inc. stockholders’ equity	557.4			753.1			934.0			(1,687.1		)	557.4
Noncontrolling interests	—			—			274.9			—			274.9
Total equity	557.4			753.1			1,208.9			(1,687.1		)	832.3
Total liabilities and equity	$	1,072.5		$	1,732.6		$	1,660.1		$	(2,221.3	)	$	2,243.9

SunCoke Energy, Inc.

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2014

(Dollars in millions)



	Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total
Cash Flows from Operating Activities:
Net (loss) income	$	(57.0	)	$	(55.6	)	$	16.7		$	43.5		(52.4		)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Asset and goodwill impairment	—			103.1			—			—			103.1
Depreciation, depletion and amortization	—			21.4			36.2			—			57.6
Deferred income tax (benefit) expense	(4.8		)	(65.8		)	0.7			—			(69.9		)
Payments in excess of expense for retirement plans	—			(0.5		)	—			—			(0.5		)
Share-based compensation expense	5.3			—			—			—			5.3
Excess tax benefit from share-based awards	(0.2		)	—			—			—			(0.2		)
Loss from equity method investment	—			—			1.5			—			1.5
Loss on extinguishment of debt	—			—			15.4			—			15.4
Equity in earnings of subsidiaries	61.3			(17.8		)	—			(43.5		)	—
Changes in working capital pertaining to operating activities:
Receivables	—			26.1			(4.9		)	—			21.2
Inventories	—			(3.7		)	(1.4		)	—			(5.1		)
Accounts payable	0.1			(13.5		)	(19.1		)	—			(32.5		)
Accrued liabilities	(0.6		)	(17.2		)	0.6			—			(17.2		)
Interest payable	(6.0		)	3.7			(1.0		)	—			(3.3		)
Income taxes	(24.4		)	42.0			(7.5		)	—			10.1
Other	5.5			(9.5		)	(3.8		)	—			(7.8		)
Net cash (used in) provided by operating activities	(20.8		)	12.7			33.4			—			25.3
Cash Flows from Investing Activities:
Capital expenditures	—			(8.6		)	(69.2		)	—			(77.8		)
Net cash used in investing activities	—			(8.6		)	(69.2		)	—			(77.8		)
Cash Flows from Financing Activities:
Net proceeds from issuance of SunCoke Energy Partners, L.P. units	—			—			88.7			—			88.7
Proceeds from issuance of long-term debt	—			—			268.1			—			268.1
Repayment of long-term debt	(0.2		)	—			(271.3		)	—			(271.5		)
Debt issuance cost	—			—			(5.8		)	—			(5.8		)
Proceeds from revolving facility	—			—			40.0			—			40.0
Repayment of revolving facility	—			—			(72.0		)	—			(72.0		)
Cash distribution to noncontrolling interests	—			—			(14.8		)	—			(14.8		)
Shares repurchased	(10.1		)	—			—			—			(10.1		)
Proceeds from exercise of stock options	0.5			—			—			—			0.5
Excess tax benefit from share-based awards	0.2			—			—			—			0.2
Net increase (decrease) in advances from affiliate	30.4			(48.3		)	17.9			—			—
Net cash provided by (used in) financing activities	20.8			(48.3		)	50.8			—			23.3
Net (decrease) increase in cash and cash equivalents	—			(44.2		)	15.0			—			(29.2		)
Cash and cash equivalents at beginning of period	—			184.7			48.9			—			233.6
Cash and cash equivalents at end of period	$	—		$	140.5		$	63.9		$	—		$	204.4

SunCoke Energy, Inc.

Condensed Consolidating Statement of Cash Flows

Six Months Ended June 30, 2013

(Dollars in millions)



	Issuer			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Combining and Consolidating Adjustments			Total

Cash Flows from Operating Activities:
Net income	$	7.8		$	36.7		$	40.7		$	(66.1	)	$	19.1
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation, depletion and amortization	—			20.6			26.7			—			47.3
Deferred income tax expense	—			3.4			—			—			3.4
Payments in excess of expense for retirement plans	—			(0.9		)	—			—			(0.9		)
Share-based compensation expense	3.6			—			—			—			3.6
Equity in earnings of subsidiaries	(27.6		)	(38.5		)	—			66.1			—
Loss from equity method investment	—			—			0.2			—			0.2
Changes in working capital pertaining to operating activities:
Receivables	—			1.6			8.9			—			10.5
Inventories	—			11.4			10.1			—			21.5
Accounts payable	(0.5		)	0.4			6.5			—			6.4
Accrued liabilities	(0.2		)	(1.5		)	(14.5		)	—			(16.2		)
Interest payable	(2.1		)	(3.6		)	8.4			—			2.7
Income taxes	(10.0		)	13.3			(9.2		)	—			(5.9		)
Other	10.4			(3.4		)	(9.7		)	—			(2.7		)
Net cash (used in) provided by operating activities	(18.6		)	39.5			68.1			—			89.0
Cash Flows from Investing Activities:
Capital expenditures	—			(14.4		)	(47.0		)	—			(61.4		)
Equity method investment in VISA SunCoke Limited	—			—			(67.7		)	—			(67.7		)
Net cash used in investing activities	—			(14.4		)	(114.7		)	—			(129.1		)
Cash Flows from Financing Activities:
Net proceeds from issuance of SunCoke Energy Partners, L.P. units	—			—			237.8			—			237.8
Proceeds from issuance of long-term debt	—			—			150.0			—			150.0
Repayment of long-term debt	—			—			(225.0		)	—			(225.0		)
Debt issuance costs	(0.7		)	—			(5.3		)	—			(6.0		)
Cash distributions to noncontrolling interests	—			—			(6.3		)	—			(6.3		)
Shares repurchased	(2.4		)	—			—			—			(2.4		)
Proceeds from exercise of stock options	0.9			—			—			—			0.9
Net increase (decrease) in advances from affiliate	20.8			(24.5		)	3.7			—			—
Net cash provided by (used in) financing activities	18.6			(24.5		)	154.9			—			149.0
Net increase in cash and cash equivalents	—			0.6			108.3			—			108.9
Cash and cash equivalents at beginning of period	—			206.9			32.3			—			239.2
Cash and cash equivalents at end of period	$	—		$	207.5		$	140.6		$	—		$	348.1