Business Segment Information

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Business Segment Information

12. Business Segment Information

The Company reports its business through three segments: Domestic Coke, Brazil Coke and Logistics. The Domestic Coke segment includes the Jewell, Indiana Harbor, Haverhill, Granite City and Middletown cokemaking facilities. Each of these facilities produces coke, and all facilities except Jewell recover waste heat, which is converted to steam or electricity.

The Brazil Coke segment includes the licensing and operating fees payable to us under long-term contracts with ArcelorMittal Brazil, under which we operate a cokemaking facility located in Vitória, Brazil through at least 2023.

Logistics operations are comprised of CMT, KRT, Lake Terminal, which provides services to our Indiana Harbor cokemaking facility, and DRT, which provides services to our Jewell cokemaking facility. Handling and mixing results are presented in the Logistics segment.

Corporate expenses that can be identified with a segment have been included in determining segment results. The remainder is included in Corporate and Other. Corporate and Other also includes activity from our legacy coal mining business.

Segment assets are those assets utilized within a specific segment and exclude taxes.

The following table includes Adjusted EBITDA, which is the measure of segment profit or loss reported to the chief operating decision maker for purposes of allocating resources to the segments and assessing their performance:    

	Three Months Ended March 31,
	2021		2020
	(Dollars in millions)
Sales and other operating revenue:
Domestic Coke	$	335.3	$	365.2
Brazil Coke	8.5		8.5
Logistics	16.1		9.0
Logistics intersegment sales	6.6		6.6
Elimination of intersegment sales	(6.6)		(6.6)
Total sales and other operating revenues	$	359.9	$	382.7
Adjusted EBITDA:
Domestic Coke	$	63.5	$	63.4
Brazil Coke	4.5		4.1
Logistics	10.9		3.3
Corporate and Other(1)	(8.3)		(8.7)
Total Adjusted EBITDA	$	70.6	$	62.1
Depreciation and amortization expense:
Domestic Coke	$	28.7	$	30.5
Brazil Coke	0.1		0.1
Logistics	3.3		3.2
Corporate and Other	0.3		0.3
Total depreciation and amortization expense	$	32.4	$	34.1
Capital expenditures:
Domestic Coke	$	16.4	$	20.7
Brazil Coke	0.1		0.1
Logistics	3.6		2.0
Total capital expenditures	$	20.1	$	22.8

(1)Corporate and Other includes activity from our legacy coal mining business, which contributed Adjusted EBITDA losses of $1.9 million and $2.1 million during the three months ended March 31, 2021 and 2020, respectively. Additionally, Corporate and Other includes foundry related research and development costs of $0.8 million during the three months ended March 31, 2020.

The following table sets forth the Company's segment assets:

	March 31, 2021		December 31, 2020
	(Dollars in millions)
Segment assets
Domestic Coke	$	1,360.9	$	1,358.9
Brazil Coke	12.4		17.7
Logistics	200.1		199.5
Corporate and Other	30.0		31.8
Segment assets, excluding income tax receivable	1,603.4		1,607.9
Tax assets	1.7		5.5
Total assets	$	1,605.1	$	1,613.4

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 and gain on extinguishment of debt. 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. 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. 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.

Below is a reconciliation of Adjusted EBITDA to net income, which is its most directly comparable financial measure calculated and presented in accordance with GAAP:

	Three Months Ended March 31,
	2021		2020
	(Dollars in millions)
Net income attributable to SunCoke Energy, Inc.	$	16.5	$	4.9
Add: Net income attributable to noncontrolling interests	1.7		1.0
Net income	$	18.2	$	5.9
Add:
Depreciation and amortization expense	32.4		34.1
Interest expense, net	12.7		14.6
Gain on extinguishment of debt	—		(2.9)
Income tax expense	7.3		10.4
Adjusted EBITDA	$	70.6	$	62.1
Subtract: Adjusted EBITDA attributable to noncontrolling interests(1)	2.6		2.0
Adjusted EBITDA attributable to SunCoke Energy, Inc.	$	68.0	$	60.1

(1)Reflects noncontrolling interest in Indiana Harbor.