Business Segment Information (Tables)

3 Months Ended

Mar. 31, 2015

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,
	2015			2014
	(Dollars in millions)
Sales and other operating revenue:
Domestic Coke	$	303.1		$	333.5
Brazil Coke	9.9			9.3
Coal Logistics	7.3			8.7
Coal Logistics intersegment sales	4.7			4.2
Corporate and other intersegment sales	2.5			5.0
Elimination of intersegment sales	(7.2		)	(9.2		)
Total sales and other operating revenue	$	320.3		$	351.5

Adjusted EBITDA:
Adjusted EBITDA from continuing operations:
Domestic Coke	$	52.7		$	46.8
Brazil Coke	4.1			1.7
India Coke	(0.7		)	0.1
Coal Logistics	2.6			2.1
Corporate and Other	(9.6		)	(11.2		)
Total Adjusted EBITDA from continuing operations	49.1			39.5
Legacy income (costs), net⁽¹⁾	1.9			(1.5		)
Adjusted EBITDA from discontinued operations	(3.1		)	(4.4		)
Adjusted EBITDA	$	47.9		$	33.6

Depreciation and amortization expense:
Domestic Coke⁽²⁾	$	18.2		$	21.0
Brazil Coke	0.2			0.1
Coal Logistics	1.8			1.8
Corporate and Other⁽³⁾	3.6			1.5
Total depreciation and amortization expense	$	23.8		$	24.4

Capital expenditures:
Domestic Coke	$	8.0		$	36.3
Brazil Coke	—			—
Coal Logistics	0.2			0.3
Corporate and Other	0.1			0.9
Total capital expenditures	$	8.3		$	37.5


(1)	Legacy income (costs), net, includes royalty revenues and costs related to coal mining assets and liabilities expected to be retained by SunCoke Energy, which are not part of the disposal group. See details of these legacy items in the table at the end of this footnote.


(2)	We revised the estimated useful life of certain assets at Indiana Harbor in connection with both the refurbishment project as well as the additional work on the oven floors and sole flues, which resulted in additional depreciation of $0.4 million and $5.6 million, or $0.01 and $0.08 per common share from continuing operations, during the three months ended March 31, 2015 and 2014, respectively.

(3)

Based on the Company plans to demolish the preparation plant, we revised the estimated useful lives of certain coal preparation plant assets located at our Jewell facility, which resulted in additional depreciation of $2.0 million, or $0.03 per common share from continuing operations, during the three months ended March 31, 2015. As the coal preparation plant will not be sold with the rest of the coal mining business, these assets and related depreciation expense are not included in the disposal group in discontinued operations but are instead included in Corporate and Other.

The following table sets forth the Company’s total sales and other operating revenue by product or service:



	Three Months Ended March 31,
	2015		2014
	(Dollars in millions)
Coke sales	$	286.5	$	315.8
Steam and electricity sales	16.6		17.8
Operating and licensing fees	9.9		9.3
Coal logistics	7.0		8.0
Other	0.3		0.6
Sales and other operating revenue	$	320.3	$	351.5

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



	March 31, 2015		December 31, 2014
	(Dollars in millions)
Segment assets
Domestic Coke	$	1,610.6	$	1,585.5
Brazil Coke	61.6		61.6
India Coke	21.9		22.5
Coal Logistics	111.8		114.4
Corporate and Other	109.7		144.4
Segment assets, excluding tax assets and discontinued operations	1,915.6		1,928.4
Discontinued operations	19.2		19.3
Tax assets	27.2		32.4
Total assets	$	1,962.0	$	1,980.1

Reconciliation of Adjusted EBITDA to net income

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,
	2015			2014
	(Dollars in millions)
Adjusted EBITDA attributable to SunCoke Energy, Inc.	$	29.8		$	24.3
Add: Adjusted EBITDA attributable to noncontrolling interests⁽¹⁾	18.1			9.3
Adjusted EBITDA	$	47.9		$	33.6
Subtract:
Adjusted EBITDA from discontinued operations⁽²⁾	(3.1		)	(4.4		)
Legacy income (costs), net⁽³⁾	1.9			(1.5		)
Adjusted EBITDA from continuing operations	$	49.1		$	39.5
Subtract:
Adjustment to unconsolidated affiliate earnings⁽⁴⁾	0.3			1.0
Depreciation and amortization expense	23.8			24.4
Interest expense, net	23.3			12.1
Income tax expense (benefit)	1.2			(1.2		)
Sales discounts provided to customers due to sharing of nonconventional fuel tax credits⁽⁵⁾	—			(0.5		)
Asset impairment				—
Legacy (income) costs, net⁽³⁾	(1.9		)	1.5
Income from continuing operations	$	2.4		$	2.2
Loss from discontinued operations, net of tax	(2.0		)	(6.0		)
Net income (loss)	$	0.4		$	(3.8	)


(1)	Reflects noncontrolling interest in Indiana Harbor and the portion of the Partnership owned by public unitholders.


(2)	See reconciliation of Adjusted EBITDA from discontinued operations below.



	Three Months Ended March 31,
	2015			2014
	(Dollars in millions)
Adjusted EBITDA from discontinued operations	$	(3.1	)	$	(4.4	)
Subtract:
Depreciation and depletion from discontinued operations	—			4.4
Income tax benefit from discontinued operations	(0.1		)	(3.0		)
Exit costs⁽¹⁾	(1.0		)	0.2
Loss from discontinued operations, net of tax	$	(2.0	)	$	(6.0	)


(1)	The three months ended March 31, 2015 includes $2.2 million of income related to an adjustment in the coal severance accrual.


(3)	Legacy (income) costs, net includes royalty revenues and costs related to coal mining assets and liabilities expected to be retained by the Company which are not part of the disposal group, and therefore, are reported in continuing operations in Corporate and Other. See detail of these legacy costs in the table below.



	Three Months Ended March 31,
	2015			2014
	(Dollars in millions)
Black lung charges	$	0.9		$	0.5
Postretirement benefit plan benefit⁽¹⁾	(3.9		)	(0.2		)
Defined benefit plan expense	0.2			—
Workers compensation expense	0.9			1.2
Total legacy (income) costs, net	$	(1.9	)	$	1.5


(1)	Includes a postretirement benefit plan curtailment gain of $4.0 million, which represented accelerated amortization of prior service credits previously recorded in accumulated other comprehensive income related to the termination of coal mining employees during the first quarter of 2015.


(4)	Reflects share of interest, taxes, depreciation and amortization related to VISA SunCoke.

(5)

Sales discounts are related to nonconventional fuel tax credits, which expired in 2013. At December 31, 2013, we had $13.6 million accrued related to sales discounts to be paid to our customer at our Granite City facility. During the first quarter of 2014, we settled this obligation for $13.1 million which resulted in a gain of $0.5 million. This gain is recorded in sales and other operating revenue on our Consolidated Statement of Operations.

- Definition

Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.

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