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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Suncoke Energy Partners, L.P. Common Units Representing Limited Partner Interests | NYSE:SXCP | NYSE | Ordinary Share |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 12.41 | 0.00 | 01:00:00 |
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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35-2451470
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Item 1.
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Consolidated Financial Statements
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Three Months Ended September 30,
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Nine Months Ended September 30,
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||||||||||||
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2017
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2016
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2017
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2016
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||||||||
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||||||||
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(Dollars and units in millions, except per unit amounts)
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||||||||||||||
Revenues
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||||||||
Sales and other operating revenue
|
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$
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214.0
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$
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185.5
|
|
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$
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610.2
|
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$
|
561.4
|
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Costs and operating expenses
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||||||||
Cost of products sold and operating expenses
|
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146.2
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125.5
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431.0
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388.3
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||||
Selling, general and administrative expenses
|
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7.4
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9.0
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24.4
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28.5
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|
||||
Depreciation and amortization expense
|
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20.2
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|
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18.1
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|
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63.3
|
|
|
57.3
|
|
||||
Total costs and operating expenses
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|
173.8
|
|
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152.6
|
|
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518.7
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|
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474.1
|
|
||||
Operating income
|
|
40.2
|
|
|
32.9
|
|
|
91.5
|
|
|
87.3
|
|
||||
Interest expense, net
|
|
15.1
|
|
|
11.5
|
|
|
41.7
|
|
|
35.7
|
|
||||
Loss (gain) on extinguishment of debt
|
|
0.1
|
|
|
(1.0
|
)
|
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20.0
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|
|
(24.9
|
)
|
||||
Income before income tax expense
|
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25.0
|
|
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22.4
|
|
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29.8
|
|
|
76.5
|
|
||||
Income tax expense
|
|
1.7
|
|
|
0.4
|
|
|
150.7
|
|
|
1.4
|
|
||||
Net income (loss)
|
|
23.3
|
|
|
22.0
|
|
|
(120.9
|
)
|
|
75.1
|
|
||||
Less: Net income (loss) attributable to noncontrolling interests
|
|
0.7
|
|
|
0.7
|
|
|
(1.3
|
)
|
|
1.9
|
|
||||
Net income (loss) attributable to SunCoke Energy Partners, L.P.
|
|
$
|
22.6
|
|
|
$
|
21.3
|
|
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$
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(119.6
|
)
|
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$
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73.2
|
|
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|
|
|
|
|
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|
||||||||
General partner's interest in net income
|
|
$
|
1.9
|
|
|
$
|
1.8
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|
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$
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1.8
|
|
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$
|
13.6
|
|
Limited partners' interest in net income (loss)
|
|
$
|
20.7
|
|
|
$
|
19.5
|
|
|
$
|
(121.4
|
)
|
|
$
|
59.6
|
|
Net income (loss) per common unit (basic and diluted)
|
|
$
|
0.45
|
|
|
$
|
0.42
|
|
|
$
|
(2.63
|
)
|
|
$
|
1.29
|
|
Weighted average common units outstanding (basic and diluted)
|
|
46.2
|
|
|
46.2
|
|
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46.2
|
|
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46.2
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
|
(Unaudited)
|
|
|
||||
|
|
(Dollars in millions)
|
||||||
Assets
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
26.9
|
|
|
$
|
41.8
|
|
Receivables
|
|
46.0
|
|
|
39.7
|
|
||
Receivables from affiliate, net
|
|
2.6
|
|
|
—
|
|
||
Inventories
|
|
85.3
|
|
|
66.9
|
|
||
Other current assets
|
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5.2
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1.6
|
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Total current assets
|
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166.0
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150.0
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||
Properties, plants and equipment (net of accumulated depreciation of $405.5 million and $352.6 million at September 30, 2017 and December 31, 2016, respectively)
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1,268.6
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|
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1,294.9
|
|
||
Goodwill
|
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73.5
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|
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73.5
|
|
||
Other intangible assets, net
|
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168.9
|
|
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176.7
|
|
||
Deferred charges and other assets
|
|
0.8
|
|
|
0.9
|
|
||
Total assets
|
|
$
|
1,677.8
|
|
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$
|
1,696.0
|
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Liabilities and Equity
|
|
|
|
|
||||
Accounts payable
|
|
$
|
69.5
|
|
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$
|
47.0
|
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Accrued liabilities
|
|
14.5
|
|
|
11.7
|
|
||
Deferred revenue
|
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16.6
|
|
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2.5
|
|
||
Current portion of long-term debt and financing obligation
|
|
2.6
|
|
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4.9
|
|
||
Interest payable
|
|
17.0
|
|
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14.7
|
|
||
Payable to affiliate, net
|
|
—
|
|
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4.7
|
|
||
Total current liabilities
|
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120.2
|
|
|
85.5
|
|
||
Long-term debt and financing obligation
|
|
816.3
|
|
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805.7
|
|
||
Deferred income taxes
|
|
188.3
|
|
|
37.9
|
|
||
Other deferred credits and liabilities
|
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10.0
|
|
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13.2
|
|
||
Total liabilities
|
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1,134.8
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942.3
|
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Equity
|
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|
||||
Held by public:
|
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|
||||
Common units
(issued 18,829,226 and 20,800,181 units at September 30, 2017 and December 31, 2016, respectively)
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185.2
|
|
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296.9
|
|
||
Held by parent:
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|
||||
Common units (issued 27,396,673 and 25,415,696 units at September 30, 2017 and December 31, 2016, respectively)
|
|
318.5
|
|
|
410.3
|
|
||
General partner interest
|
|
27.9
|
|
|
32.1
|
|
||
Partners' capital attributable to SunCoke Energy Partners, L.P.
|
|
531.6
|
|
|
739.3
|
|
||
Noncontrolling interest
|
|
11.4
|
|
|
14.4
|
|
||
Total equity
|
|
543.0
|
|
|
753.7
|
|
||
Total liabilities and equity
|
|
$
|
1,677.8
|
|
|
$
|
1,696.0
|
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
|
|
(Dollars in millions)
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
||||
Net (loss) income
|
|
$
|
(120.9
|
)
|
|
$
|
75.1
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization expense
|
|
63.3
|
|
|
57.3
|
|
||
Deferred income tax expense
|
|
150.4
|
|
|
0.2
|
|
||
Loss (gain) on extinguishment of debt
|
|
20.0
|
|
|
(24.9
|
)
|
||
Changes in working capital pertaining to operating activities:
|
|
|
|
|
||||
Receivables
|
|
(6.3
|
)
|
|
2.1
|
|
||
Receivables (payables) from affiliate, net
|
|
(5.9
|
)
|
|
6.2
|
|
||
Inventories
|
|
(18.4
|
)
|
|
9.2
|
|
||
Accounts payable
|
|
16.6
|
|
|
5.0
|
|
||
Accrued liabilities
|
|
2.8
|
|
|
1.2
|
|
||
Deferred revenue
|
|
14.1
|
|
|
25.5
|
|
||
Interest payable
|
|
2.3
|
|
|
(11.2
|
)
|
||
Other
|
|
(5.3
|
)
|
|
(5.7
|
)
|
||
Net cash provided by operating activities
|
|
112.7
|
|
|
140.0
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
|
||||
Capital expenditures
|
|
(23.3
|
)
|
|
(30.1
|
)
|
||
Decrease in restricted cash
|
|
0.1
|
|
|
17.0
|
|
||
Other investing activities
|
|
—
|
|
|
2.1
|
|
||
Net cash used in investing activities
|
|
(23.2
|
)
|
|
(11.0
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
|
||||
Proceeds from issuance of long-term debt
|
|
620.6
|
|
|
—
|
|
||
Repayment of long-term debt
|
|
(644.9
|
)
|
|
(60.8
|
)
|
||
Proceeds from financing obligation
|
|
—
|
|
|
16.2
|
|
||
Repayment of financing obligation
|
|
(1.8
|
)
|
|
(0.5
|
)
|
||
Proceeds from revolving credit facility
|
|
268.0
|
|
|
20.0
|
|
||
Repayment of revolving credit facility
|
|
(240.0
|
)
|
|
(25.0
|
)
|
||
Debt issuance costs
|
|
(14.9
|
)
|
|
(0.2
|
)
|
||
Distributions to unitholders (public and parent)
|
|
(89.7
|
)
|
|
(86.8
|
)
|
||
Distributions to noncontrolling interest (SunCoke Energy, Inc.)
|
|
(1.7
|
)
|
|
(2.8
|
)
|
||
Capital contributions from SunCoke
|
|
—
|
|
|
8.4
|
|
||
Net cash used in financing activities
|
|
(104.4
|
)
|
|
(131.5
|
)
|
||
Net decrease in cash and cash equivalents
|
|
(14.9
|
)
|
|
(2.5
|
)
|
||
Cash and cash equivalents at beginning of period
|
|
41.8
|
|
|
48.6
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
26.9
|
|
|
$
|
46.1
|
|
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
||||
Interest paid
|
|
$
|
38.3
|
|
|
$
|
49.8
|
|
|
|
Common
- Public |
|
Common
- SunCoke |
|
General Partner
- SunCoke |
|
Noncontrolling Interest
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(Dollars in millions)
|
|||||||||||||||||||
At December 31, 2016
|
|
$
|
296.9
|
|
|
$
|
410.3
|
|
|
$
|
32.1
|
|
|
$
|
14.4
|
|
|
$
|
753.7
|
|
Partnership net loss
|
|
(55.2
|
)
|
|
(66.2
|
)
|
|
1.8
|
|
|
(1.3
|
)
|
|
(120.9
|
)
|
|||||
Distribution to unitholders, net of unit issuances
|
|
(35.8
|
)
|
|
(46.3
|
)
|
|
(6.0
|
)
|
|
—
|
|
|
(88.1
|
)
|
|||||
Distributions to noncontrolling interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.7
|
)
|
|
(1.7
|
)
|
|||||
Public units acquired by SunCoke
|
|
(20.7
|
)
|
|
20.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
At September 30, 2017
|
|
$
|
185.2
|
|
|
$
|
318.5
|
|
|
$
|
27.9
|
|
|
$
|
11.4
|
|
|
$
|
543.0
|
|
•
|
first
,
98 percent
to the holders of common units and
2 percent
to our general partner, until each common unit has received the minimum quarterly distribution of
$0.412500
plus any arrearages from prior quarters and
|
•
|
second,
98 percent
to all unitholders, pro rata, and
2 percent
to our general partner, until each unit has received a distribution of
$0.474375
.
|
|
Total Quarterly Distribution Per Unit Target Amount
|
|
Marginal Percentage
Interest in Distributions
|
||||
|
Unitholders
|
|
General Partner
|
||||
Minimum Quarterly Distribution
|
$0.412500
|
|
98%
|
|
2%
|
||
First Target Distribution
|
above $0.412500
|
|
up to $0.474375
|
|
98%
|
|
2%
|
Second Target Distribution
|
above $0.474375
|
|
up to $0.515625
|
|
85%
|
|
15%
|
Third Target Distribution
|
above $0.515625
|
|
up to $0.618750
|
|
75%
|
|
25%
|
Thereafter
|
above $0.618750
|
|
50%
|
|
50%
|
Earned in Quarter Ended
|
|
Total Quarterly Distribution Per Unit
|
|
Total Cash Distribution including general partners IDRs
|
|
Date of Distribution
|
|
Unitholders Record Date
|
||||
|
|
|
|
(Dollars in millions)
|
|
|
|
|
||||
June 30, 2016
|
|
$
|
0.5940
|
|
|
$
|
29.5
|
|
|
September 1, 2016
|
|
August 15, 2016
|
September 30, 2016
|
|
$
|
0.5940
|
|
|
$
|
29.5
|
|
|
December 1, 2016
|
|
November 15, 2016
|
December 31, 2016
|
|
$
|
0.5940
|
|
|
$
|
29.5
|
|
|
March 1, 2017
|
|
February 15, 2017
|
March 31, 2017
|
|
$
|
0.5940
|
|
|
$
|
29.5
|
|
|
June 1, 2017
|
|
May 15, 2017
|
June 30, 2017
|
|
$
|
0.5940
|
|
|
$
|
29.5
|
|
|
September 1, 2017
|
|
August 15, 2017
|
September 30, 2017
(1)
|
|
$
|
0.5940
|
|
|
$
|
29.5
|
|
|
December 1, 2017
|
|
November 15, 2017
|
(1)
|
On
October 17, 2017
, our Board of Directors declared a cash distribution of
$0.5940
per unit, which will be paid on
December 1, 2017
, to unitholders of record on
November 15, 2017
.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(Dollars in millions)
|
||||||||||||||
Net income (loss) attributable to SunCoke Energy L.P.
|
|
$
|
22.6
|
|
|
$
|
21.3
|
|
|
$
|
(119.6
|
)
|
|
$
|
73.2
|
|
Less: Expenses allocated to Common - SunCoke
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.0
|
)
|
||||
Net income (loss) attributable to all partners
|
|
22.6
|
|
|
21.3
|
|
|
(119.6
|
)
|
|
80.2
|
|
||||
General partner's incentive distribution rights
|
|
1.4
|
|
|
1.4
|
|
|
4.2
|
|
|
12.2
|
|
||||
Net income (loss) attributable to partners, excluding incentive distribution rights
|
|
21.2
|
|
|
19.9
|
|
|
(123.8
|
)
|
|
68.0
|
|
||||
General partner's ownership interest:
|
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
||||
General partner's allocated interest in net income (loss)
(2)
|
|
0.5
|
|
|
0.4
|
|
|
(2.4
|
)
|
|
1.4
|
|
||||
General partner's incentive distribution rights
|
|
1.4
|
|
|
1.4
|
|
|
4.2
|
|
|
12.2
|
|
||||
Total general partner's interest in net income (loss)
|
|
$
|
1.9
|
|
|
$
|
1.8
|
|
|
$
|
1.8
|
|
|
$
|
13.6
|
|
Common - public unitholder's interest in net income (loss)
|
|
$
|
8.6
|
|
|
$
|
8.8
|
|
|
$
|
(55.2
|
)
|
|
$
|
29.9
|
|
Common - SunCoke interest in net income (loss):
|
|
|
|
|
|
|
|
|
||||||||
Common - SunCoke interest in net income (loss)
|
|
12.1
|
|
|
10.7
|
|
|
(66.2
|
)
|
|
36.7
|
|
||||
Expenses allocated to Common - SunCoke
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.0
|
)
|
||||
Total common - SunCoke interest in net income (loss)
|
|
12.1
|
|
|
10.7
|
|
|
(66.2
|
)
|
|
29.7
|
|
||||
Total limited partners' interest in net income (loss)
|
|
$
|
20.7
|
|
|
$
|
19.5
|
|
|
$
|
(121.4
|
)
|
|
$
|
59.6
|
|
(1)
|
Per the amended partnership agreement, expenses paid on behalf of the Partnership are to be allocated entirely to the partner who paid them. During the first quarter of 2016, SunCoke paid
$7.0 million
of allocated corporate costs on behalf of the Partnership and will not seek reimbursement for those costs. These expenses are recorded as a direct reduction to SunCoke's interest in net income for the nine months ended September 30, 2016.
|
(2)
|
Our net income is allocated to the general partner and limited partners in accordance with their respective partnership percentages, after giving effect to priority income allocations for incentive distributions, if any, to our general partner, pursuant to our partnership agreement. The table above represents a simplified presentation of the calculation, and therefore, amounts may not recalculate precisely.
|
|
|
Three Months Ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(Dollars and units in millions, except per unit amounts)
|
||||||||||||||
Net income (loss) attributable to SunCoke Energy L.P.
|
|
$
|
22.6
|
|
|
$
|
21.3
|
|
|
$
|
(119.6
|
)
|
|
$
|
73.2
|
|
Less: Expenses allocated to Common - SunCoke
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.0
|
)
|
||||
Net income (loss) attributable to all partners
|
|
22.6
|
|
|
21.3
|
|
|
(119.6
|
)
|
|
80.2
|
|
||||
General partner's distributions (including $1.4 million, $1.4 million, $4.2 million and $4.2 million of cash incentive distribution rights declared, respectively)
|
|
2.0
|
|
|
2.0
|
|
|
6.0
|
|
|
6.0
|
|
||||
Limited partners' distributions on common units
|
|
27.5
|
|
|
27.5
|
|
|
82.5
|
|
|
82.4
|
|
||||
Distributions greater than earnings/loss
|
|
(6.9
|
)
|
|
(8.2
|
)
|
|
(208.1
|
)
|
|
(8.2
|
)
|
||||
General partner's earnings:
|
|
|
|
|
|
|
|
|
||||||||
Distributions (including $1.4 million, $1.4 million, $4.2 million and $4.2 million of cash incentive distribution rights declared, respectively)
|
|
2.0
|
|
|
2.0
|
|
|
6.0
|
|
|
6.0
|
|
||||
Allocation of distributions (greater than) less than earnings/loss
|
|
(0.1
|
)
|
|
(0.2
|
)
|
|
(4.2
|
)
|
|
7.6
|
|
||||
Total general partner's earnings
|
|
1.9
|
|
|
1.8
|
|
|
1.8
|
|
|
13.6
|
|
||||
Limited partners' earnings (loss) on common units:
|
|
|
|
|
|
|
|
|
||||||||
Distributions
|
|
27.5
|
|
|
27.5
|
|
|
82.5
|
|
|
82.4
|
|
||||
Expenses allocated to Common - SunCoke
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.0
|
)
|
||||
Allocation of distributions greater than earnings/loss
|
|
(6.8
|
)
|
|
(8.0
|
)
|
|
(203.9
|
)
|
|
(15.8
|
)
|
||||
Total limited partners' earnings (loss) on common units
|
|
20.7
|
|
|
19.5
|
|
|
(121.4
|
)
|
|
59.6
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Weighted average limited partner units outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Common - basic and diluted
|
|
46.2
|
|
|
46.2
|
|
|
46.2
|
|
|
46.2
|
|
||||
Net income (loss) per limited partner unit:
|
|
|
|
|
|
|
|
|
||||||||
Common - basic and diluted
|
|
$
|
0.45
|
|
|
$
|
0.42
|
|
|
$
|
(2.63
|
)
|
|
$
|
1.29
|
|
|
|
Common - Public
|
|
Common - SunCoke
|
|
Total Common
|
|||
At December 31, 2016
|
|
20,800,181
|
|
|
25,415,696
|
|
|
46,215,877
|
|
Units issued to directors
|
|
10,022
|
|
|
—
|
|
|
10,022
|
|
Public units acquired by SunCoke
|
|
(1,980,977
|
)
|
|
1,980,977
|
|
|
—
|
|
At September 30, 2017
|
|
18,829,226
|
|
|
27,396,673
|
|
|
46,225,899
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
|
||||
|
|
(Dollars in millions)
|
||||||
Coal
|
|
$
|
48.9
|
|
|
$
|
34.5
|
|
Coke
|
|
8.0
|
|
|
4.7
|
|
||
Materials, supplies, and other
|
|
28.4
|
|
|
27.7
|
|
||
Total inventories
|
|
$
|
85.3
|
|
|
$
|
66.9
|
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
Weighted - Average Remaining Amortization Years
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
|
Gross Carrying Amount
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
|
|
|
(Dollars in millions)
|
||||||||||||||||||||||
Customer contracts
|
5
|
|
$
|
24.0
|
|
|
$
|
6.9
|
|
|
$
|
17.1
|
|
|
$
|
24.0
|
|
|
$
|
4.5
|
|
|
$
|
19.5
|
|
Customer relationships
|
14
|
|
28.7
|
|
|
5.2
|
|
|
23.5
|
|
|
28.7
|
|
|
3.8
|
|
|
24.9
|
|
||||||
Permits
|
25
|
|
139.0
|
|
|
10.9
|
|
|
128.1
|
|
|
139.0
|
|
|
7.1
|
|
|
131.9
|
|
||||||
Trade name
|
1
|
|
1.2
|
|
|
1.0
|
|
|
0.2
|
|
|
1.2
|
|
|
0.8
|
|
|
0.4
|
|
||||||
Total
|
|
|
$
|
192.9
|
|
|
$
|
24.0
|
|
|
$
|
168.9
|
|
|
$
|
192.9
|
|
|
$
|
16.2
|
|
|
$
|
176.7
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
|
||||
|
|
(Dollars in millions)
|
||||||
7.500 percent senior notes, due 2025 ("2025 Partnership Notes")
|
|
$
|
630.0
|
|
|
$
|
—
|
|
7.375 percent senior notes, due 2020 ("2020 Partnership Notes")
|
|
—
|
|
|
463.0
|
|
||
Partnership term loan, due 2019 ("Partnership Term Loan")
|
|
—
|
|
|
50.0
|
|
||
Revolving credit facility, due 2022 and 2019, respectively ("Partnership Revolver")
|
|
200.0
|
|
|
172.0
|
|
||
Partnership promissory note payable, due 2021 ("Promissory Note")
|
|
—
|
|
|
113.2
|
|
||
5.82 percent financing obligation, due 2021 ("Financing Obligation")
|
|
13.3
|
|
|
15.2
|
|
||
Total borrowings
|
|
843.3
|
|
|
813.4
|
|
||
Original issue (discount) premium
|
|
(9.1
|
)
|
|
7.5
|
|
||
Debt issuance cost
|
|
(15.3
|
)
|
|
(10.3
|
)
|
||
Total debt and financing obligation
|
|
818.9
|
|
|
810.6
|
|
||
Less: current portion of long-term debt and financing obligation
|
|
2.6
|
|
|
4.9
|
|
||
Total long-term debt and financing obligation
|
|
$
|
816.3
|
|
|
$
|
805.7
|
|
•
|
Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market.
|
•
|
Level 2—inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability.
|
•
|
Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(Dollars in millions)
|
||||||||||||||
Sales and other operating revenue:
|
|
|
|
|
|
|
|
|
||||||||
Domestic Coke
|
|
$
|
193.4
|
|
|
$
|
170.8
|
|
|
$
|
548.6
|
|
|
$
|
517.2
|
|
Coal Logistics
|
|
20.6
|
|
|
14.7
|
|
|
61.6
|
|
|
44.2
|
|
||||
Coal Logistics intersegment sales
|
|
1.6
|
|
|
1.5
|
|
|
4.9
|
|
|
4.7
|
|
||||
Elimination of intersegment sales
|
|
(1.6
|
)
|
|
(1.5
|
)
|
|
(4.9
|
)
|
|
(4.7
|
)
|
||||
Total sales and other operating revenue
|
|
$
|
214.0
|
|
|
$
|
185.5
|
|
|
$
|
610.2
|
|
|
$
|
561.4
|
|
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
||||||||
Domestic Coke
|
|
$
|
50.0
|
|
|
$
|
42.9
|
|
|
$
|
130.0
|
|
|
$
|
130.3
|
|
Coal Logistics
|
|
12.3
|
|
|
7.0
|
|
|
34.9
|
|
|
18.2
|
|
||||
Corporate and Other
|
|
(3.9
|
)
|
|
(4.2
|
)
|
|
(11.8
|
)
|
|
(12.9
|
)
|
||||
Total Adjusted EBITDA
|
|
$
|
58.4
|
|
|
$
|
45.7
|
|
|
$
|
153.1
|
|
|
$
|
135.6
|
|
Depreciation and amortization expense:
|
|
|
|
|
|
|
|
|
||||||||
Domestic Coke
|
|
$
|
14.3
|
|
|
$
|
12.7
|
|
|
$
|
45.6
|
|
|
$
|
38.7
|
|
Coal Logistics
|
|
5.9
|
|
|
5.4
|
|
|
17.7
|
|
|
18.6
|
|
||||
Total depreciation and amortization expense
|
|
$
|
20.2
|
|
|
$
|
18.1
|
|
|
$
|
63.3
|
|
|
$
|
57.3
|
|
Capital expenditures:
|
|
|
|
|
|
|
|
|
||||||||
Domestic Coke
|
|
$
|
13.0
|
|
|
$
|
4.4
|
|
|
$
|
21.8
|
|
|
$
|
15.8
|
|
Coal Logistics
|
|
0.4
|
|
|
3.6
|
|
|
1.5
|
|
|
14.3
|
|
||||
Total capital expenditures
|
|
$
|
13.4
|
|
|
$
|
8.0
|
|
|
$
|
23.3
|
|
|
$
|
30.1
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
|
||||
|
|
(Dollars in millions)
|
||||||
Segment assets:
|
|
|
|
|
||||
Domestic Coke
|
|
$
|
1,182.6
|
|
|
$
|
1,184.2
|
|
Coal Logistics
|
|
494.2
|
|
|
510.6
|
|
||
Corporate and Other
|
|
1.0
|
|
|
1.2
|
|
||
Total assets
|
|
$
|
1,677.8
|
|
|
$
|
1,696.0
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
(Dollars in millions)
|
||||||||||||||
Sales and other operating revenue:
|
|
|
|
|
|
|
|
|
||||||||
Cokemaking
|
|
$
|
177.0
|
|
|
$
|
155.8
|
|
|
$
|
503.8
|
|
|
$
|
471.3
|
|
Energy
|
|
14.7
|
|
|
13.9
|
|
|
39.0
|
|
|
42.5
|
|
||||
Logistics
|
|
19.2
|
|
|
14.2
|
|
|
59.0
|
|
|
43.2
|
|
||||
Other
|
|
3.1
|
|
|
1.6
|
|
|
8.4
|
|
|
4.4
|
|
||||
Total revenues
|
|
$
|
214.0
|
|
|
$
|
185.5
|
|
|
$
|
610.2
|
|
|
$
|
561.4
|
|
•
|
does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
|
•
|
does not reflect items such as depreciation and amortization;
|
•
|
does not reflect changes in, or cash requirements for, working capital needs;
|
•
|
does not reflect our interest expense, or the cash requirements necessary to service interest on or principal payments of our debt;
|
•
|
does not reflect certain other non-cash income and expenses;
|
•
|
excludes income taxes that may represent a reduction in available cash; and
|
•
|
includes net income attributable to noncontrolling interests.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
(Dollars in millions)
|
||||||||||||||
Net cash provided by operating activities
|
|
$
|
61.1
|
|
|
$
|
31.9
|
|
|
$
|
112.7
|
|
|
$
|
140.0
|
|
Subtract:
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization expense
|
|
20.2
|
|
|
18.1
|
|
|
63.3
|
|
|
57.3
|
|
||||
Loss (gain) on extinguishment of debt
|
|
0.1
|
|
|
(1.0
|
)
|
|
20.0
|
|
|
(24.9
|
)
|
||||
Deferred income tax expense (benefit)
|
|
1.6
|
|
|
(0.2
|
)
|
|
150.4
|
|
|
0.2
|
|
||||
Changes in working capital and other
|
|
15.9
|
|
|
(7.0
|
)
|
|
(0.1
|
)
|
|
32.3
|
|
||||
Net income (loss)
|
|
$
|
23.3
|
|
|
$
|
22.0
|
|
|
$
|
(120.9
|
)
|
|
$
|
75.1
|
|
Add:
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization expense
|
|
$
|
20.2
|
|
|
$
|
18.1
|
|
|
$
|
63.3
|
|
|
$
|
57.3
|
|
Interest expense, net
|
|
15.1
|
|
|
11.5
|
|
|
41.7
|
|
|
35.7
|
|
||||
Loss (gain) on extinguishment of debt
|
|
0.1
|
|
|
(1.0
|
)
|
|
20.0
|
|
|
(24.9
|
)
|
||||
Income tax expense, net
|
|
1.7
|
|
|
0.4
|
|
|
150.7
|
|
|
1.4
|
|
||||
Contingent consideration adjustments
(1)
|
|
(2.0
|
)
|
|
(4.6
|
)
|
|
(1.7
|
)
|
|
(8.3
|
)
|
||||
Non-cash reversal of acquired contractual obligation
(2)
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
||||
Adjusted EBITDA
(3)
|
|
$
|
58.4
|
|
|
$
|
45.7
|
|
|
$
|
153.1
|
|
|
$
|
135.6
|
|
Subtract:
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA attributable to noncontrolling interest
(4)
|
|
$
|
1.0
|
|
|
$
|
0.9
|
|
|
$
|
2.6
|
|
|
$
|
2.6
|
|
Adjusted EBITDA attributable to SunCoke Energy Partners, L.P.
|
|
$
|
57.4
|
|
|
$
|
44.8
|
|
|
$
|
150.5
|
|
|
$
|
133.0
|
|
(1)
|
As a result of changes in the fair value of the contingent consideration liability, the Partnership recognized gains of
$2.0 million
and
$1.7 million
during the three and nine months ended September 30, 2017, respectively. The Partnership amended its contingent consideration terms with The Cline Group during the first quarter of 2016. This amendment and subsequent fair value adjustments resulted in a gain of
$4.6 million
and
$8.3 million
recorded during the three and nine months ended September 30, 2016, respectively.
|
(2)
|
In association with the acquisition of CMT, we assumed certain performance obligations under existing contracts and recorded liabilities related to such obligations. In the third quarter of 2016, the final acquired contractual performance obligation expired without the customer requiring performance. Therefore, the Partnership reversed the liability as we no longer have any obligations under the contract.
|
(3)
|
In accordance with the SEC’s May 2016 update to its guidance on the appropriate use of non-GAAP financial measures, Adjusted EBITDA does not include Coal Logistics deferred revenue until it is recognized as GAAP revenue.
|
(4)
|
Reflects net income attributable to noncontrolling interest adjusted for noncontrolling interest's share of interest, taxes, income, and depreciation and amortization.
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Facility
|
|
Location
|
|
Coke
Customer
|
|
Year of
Start Up
|
|
Contract
Expiration
|
|
Number of
Coke Ovens
|
|
Annual Cokemaking
Capacity
(thousands of tons)
|
|
Use of Waste Heat
|
||
Granite City
|
|
Granite City, Illinois
|
|
U.S. Steel
|
|
2009
|
|
2025
|
|
120
|
|
|
650
|
|
|
Steam for power generation
|
Haverhill I
|
|
Franklin Furnace, Ohio
|
|
ArcelorMittal
|
|
2005
|
|
2020
|
|
100
|
|
|
550
|
|
|
Process steam
|
Haverhill II
|
|
Franklin Furnace, Ohio
|
|
AK Steel
|
|
2008
|
|
2022
|
|
100
|
|
|
550
|
|
|
Power generation
|
Middletown
(1)
|
|
Middletown, Ohio
|
|
AK Steel
|
|
2011
|
|
2032
|
|
100
|
|
|
550
|
|
|
Power generation
|
Total
|
|
|
|
|
|
|
|
|
|
420
|
|
|
2,300
|
|
|
|
(1)
|
Cokemaking capacity represents stated capacity for the production of blast furnace coke. The Middletown coke sales agreement provides for coke sales on a “run of oven” basis, which includes both blast furnace coke and small coke. Middletown nameplate capacity on a “run of oven” basis is
578 thousand
tons per year.
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2017
|
|
2016
|
|
Increase (Decrease)
|
|
2017
|
|
2016
|
|
Increase (Decrease)
|
||||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||||
Sales and other operating revenue
(1)
|
$
|
214.0
|
|
|
$
|
185.5
|
|
|
$
|
28.5
|
|
|
$
|
610.2
|
|
|
$
|
561.4
|
|
|
$
|
48.8
|
|
Net cash provided by operating activities
(2)
|
$
|
61.1
|
|
|
$
|
31.9
|
|
|
$
|
29.2
|
|
|
$
|
112.7
|
|
|
$
|
140.0
|
|
|
$
|
(27.3
|
)
|
Adjusted EBITDA
(1)
|
$
|
58.4
|
|
|
$
|
45.7
|
|
|
$
|
12.7
|
|
|
$
|
153.1
|
|
|
$
|
135.6
|
|
|
$
|
17.5
|
|
(1)
|
See analysis of changes described in "Analysis of Segment Results."
|
(2)
|
See analysis of changes described in "Liquidity and Capital Resources."
|
•
|
Termination of Proposed Simplification Transaction.
In April 2017, SunCoke announced the termination of discussions with the Conflicts Committee of our Board of Directors regarding its proposal to acquire all of the Partnership’s common units not already owned by SunCoke ("Simplification Transaction"), announced on October 31, 2016. The Conflicts Committee and its independent advisors reviewed the proposal made by SunCoke and had several discussions with SunCoke regarding the potential transaction. At this time, the parties determined that they will not be able to reach an agreement and have therefore terminated discussions regarding the proposed Simplification Transaction.
|
•
|
Debt Activities.
During the first nine months of 2017, the Partnership refinanced its debt obligations.
As a result of the debt refinancing, the nine months ended September 30, 2017 included a loss on extinguishment of debt on the Consolidated Statement of Operations of
$20.0 million
, which consisted primarily of the premium paid of
$18.7 million
. The Partnership anticipates annualized interest expense, net to increase by approximately
$8 million
, which includes approximately
$6 million
of cash interest and
$2 million
of amortization of debt issuance costs and discounts.
See
Note 7
to our consolidated financial statements for further details.
|
•
|
IRS Final Regulations on Qualifying Income.
In January 2017, the Internal Revenue Service ("IRS") announced its decision to exclude cokemaking as a qualifying income generating activity in its final regulations (the "Final Regulations") issued under section 7704(d)(1)(E) of the Internal Revenue Code relating to the qualifying income exception for publicly traded partnerships. However, the Final Regulations include a transition period for activities that were reasonably interpreted to be qualifying income and carried on by publicly traded partnerships prior to the Final Regulations. The Partnership previously received a will-level opinion from its counsel, Vinson & Elkins LLP, that the Partnership's cokemaking operations generated qualifying income prior to the Final Regulations. Therefore, the Partnership believes it had a reasonable basis to conclude its cokemaking operations were considered qualifying income before the issuance of the new regulations and as such expects to maintain its treatment as a partnership through the transition period. Cokemaking entities in the Partnership will become taxable as corporations on January 1, 2028, after the transition period ends.
|
•
|
Pass Through Coal Cost Under-Recovery
.
During the fourth quarter of 2016, as part of our ordinary course coal sourcing activities, Haverhill, Middletown and AK Steel each entered into arrangements with a coal supplier for 2017 fulfillment. As a result of unfulfilled coal supply commitments by this coal supplier, substitute coal suppliers are currently meeting the shortfall at a higher price. We are sharing half of the increased coal cover cost differential with AK Steel.
During the third quarter of 2017, we received
$1.5 million
of reimbursements from this
|
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
|
2017
|
|
2016
|
|
Increase (Decrease)
|
|
2017
|
|
2016
|
|
Increase (Decrease)
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
(Dollars in millions)
|
||||||||||||||||||||||
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sales and other operating revenue
|
|
$
|
214.0
|
|
|
$
|
185.5
|
|
|
$
|
28.5
|
|
|
$
|
610.2
|
|
|
$
|
561.4
|
|
|
$
|
48.8
|
|
Costs and operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of products sold and operating expenses
|
|
146.2
|
|
|
125.5
|
|
|
20.7
|
|
|
431.0
|
|
|
388.3
|
|
|
42.7
|
|
||||||
Selling, general and administrative expenses
|
|
7.4
|
|
|
9.0
|
|
|
(1.6
|
)
|
|
24.4
|
|
|
28.5
|
|
|
(4.1
|
)
|
||||||
Depreciation and amortization expense
|
|
20.2
|
|
|
18.1
|
|
|
2.1
|
|
|
63.3
|
|
|
57.3
|
|
|
6.0
|
|
||||||
Total costs and operating expenses
|
|
173.8
|
|
|
152.6
|
|
|
21.2
|
|
|
518.7
|
|
|
474.1
|
|
|
44.6
|
|
||||||
Operating income
|
|
40.2
|
|
|
32.9
|
|
|
7.3
|
|
|
91.5
|
|
|
87.3
|
|
|
4.2
|
|
||||||
Interest expense, net
|
|
15.1
|
|
|
11.5
|
|
|
3.6
|
|
|
41.7
|
|
|
35.7
|
|
|
6.0
|
|
||||||
Loss (gain) on extinguishment of debt
(1)
|
|
0.1
|
|
|
(1.0
|
)
|
|
1.1
|
|
|
20.0
|
|
|
(24.9
|
)
|
|
44.9
|
|
||||||
Income before income tax expense
|
|
25.0
|
|
|
22.4
|
|
|
2.6
|
|
|
29.8
|
|
|
76.5
|
|
|
(46.7
|
)
|
||||||
Income tax expense
|
|
1.7
|
|
|
0.4
|
|
|
1.3
|
|
|
150.7
|
|
|
1.4
|
|
|
149.3
|
|
||||||
Net income (loss)
|
|
23.3
|
|
|
22.0
|
|
|
1.3
|
|
|
(120.9
|
)
|
|
75.1
|
|
|
(196.0
|
)
|
||||||
Less: Net income (loss) attributable to noncontrolling interests
|
|
0.7
|
|
|
0.7
|
|
|
—
|
|
|
(1.3
|
)
|
|
1.9
|
|
|
(3.2
|
)
|
||||||
Net income (loss) attributable to SunCoke Energy Partners, L.P.
|
|
$
|
22.6
|
|
|
$
|
21.3
|
|
|
$
|
1.3
|
|
|
$
|
(119.6
|
)
|
|
$
|
73.2
|
|
|
$
|
(192.8
|
)
|
(1)
|
See year-over-year changes described in "Recent Developments and Items Impacting Comparability."
|
•
|
Domestic Coke consists of our Haverhill, Middletown and Granite City cokemaking and heat recovery operations located in Franklin Furnace, Ohio; Middletown, Ohio; and Granite City, Illinois, respectively.
|
•
|
Coal Logistics consists of our handling and/or mixing services in East Chicago, Indiana; Ceredo, West Virginia; Belle, West Virginia; and Convent, Louisiana.
|
|
Three Months Ended September 30,
|
|
|
|
Nine Months Ended September 30,
|
|
|
||||||||||||||||
|
2017
|
|
2016
|
|
Increase (Decrease)
|
|
2017
|
|
2016
|
|
Increase (Decrease)
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(Dollars in millions)
|
||||||||||||||||||||||
Sales and other operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Domestic Coke
|
$
|
193.4
|
|
|
$
|
170.8
|
|
|
$
|
22.6
|
|
|
$
|
548.6
|
|
|
$
|
517.2
|
|
|
$
|
31.4
|
|
Coal Logistics
|
20.6
|
|
|
14.7
|
|
|
5.9
|
|
|
61.6
|
|
|
44.2
|
|
|
17.4
|
|
||||||
Coal Logistics intersegment sales
|
1.6
|
|
|
1.5
|
|
|
0.1
|
|
|
4.9
|
|
|
4.7
|
|
|
0.2
|
|
||||||
Elimination of intersegment sales
|
(1.6
|
)
|
|
(1.5
|
)
|
|
(0.1
|
)
|
|
(4.9
|
)
|
|
(4.7
|
)
|
|
(0.2
|
)
|
||||||
Total Sales and other operating revenues
|
$
|
214.0
|
|
|
$
|
185.5
|
|
|
$
|
28.5
|
|
|
$
|
610.2
|
|
|
$
|
561.4
|
|
|
$
|
48.8
|
|
Adjusted EBITDA
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Domestic Coke
|
$
|
50.0
|
|
|
$
|
42.9
|
|
|
$
|
7.1
|
|
|
$
|
130.0
|
|
|
$
|
130.3
|
|
|
(0.3
|
)
|
|
Coal Logistics
|
12.3
|
|
|
7.0
|
|
|
5.3
|
|
|
34.9
|
|
|
18.2
|
|
|
16.7
|
|
||||||
Corporate and Other
|
(3.9
|
)
|
|
(4.2
|
)
|
|
0.3
|
|
|
(11.8
|
)
|
|
(12.9
|
)
|
|
1.1
|
|
||||||
Total Adjusted EBITDA
|
$
|
58.4
|
|
|
$
|
45.7
|
|
|
$
|
12.7
|
|
|
$
|
153.1
|
|
|
$
|
135.6
|
|
|
$
|
17.5
|
|
Coke Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Domestic Coke capacity utilization (%)
|
103
|
|
|
103
|
|
|
—
|
|
|
100
|
|
|
102
|
|
|
(2
|
)
|
||||||
Domestic Coke production volumes (thousands of tons)
|
595
|
|
|
593
|
|
|
2
|
|
|
1,727
|
|
|
1,751
|
|
|
(24
|
)
|
||||||
Domestic Coke sales volumes (thousands of tons)
|
585
|
|
|
595
|
|
|
(10
|
)
|
|
1,718
|
|
|
1,755
|
|
|
(37
|
)
|
||||||
Domestic Coke Adjusted EBITDA per ton
(2)
|
$
|
85.47
|
|
|
$
|
72.10
|
|
|
$
|
13.37
|
|
|
$
|
75.67
|
|
|
$
|
74.25
|
|
|
$
|
1.42
|
|
Coal Logistics Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tons handled (thousands of tons)
(3)
|
4,862
|
|
|
4,055
|
|
|
807
|
|
|
15,220
|
|
|
12,028
|
|
|
3,192
|
|
||||||
CMT take-or-pay shortfall tons (thousands of tons)
(4)
|
1,005
|
|
|
1,748
|
|
|
(743
|
)
|
|
2,505
|
|
|
5,002
|
|
|
(2,497
|
)
|
(1)
|
See
Note 10
in our consolidated financial statements for both the definition of Adjusted EBITDA and the reconciliations from GAAP to the non-GAAP measurement for the
three and nine months ended September 30, 2017
and
2016
.
|
(2)
|
Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke sales volumes.
|
(3)
|
Reflects inbound tons handled during the period.
|
(4)
|
Reflects tons billed under take-or-pay contracts where services have not yet been performed.
|
|
Three months ended September 30, 2017 vs. 2016
|
|
Nine months ended September 30, 2017 vs. 2016
|
||||||||||||
|
Sales and other operating revenue
|
|
Adjusted EBITDA
|
|
Sales and other operating revenue
|
|
Adjusted EBITDA
|
||||||||
|
(Dollars in millions)
|
||||||||||||||
Prior year period
|
$
|
170.8
|
|
|
$
|
42.9
|
|
|
$
|
517.2
|
|
|
$
|
130.3
|
|
Volumes
(1)
|
(1.0
|
)
|
|
1.6
|
|
|
(4.2
|
)
|
|
2.6
|
|
||||
Coal cost recovery and yields
(2)
|
23.5
|
|
|
2.5
|
|
|
38.3
|
|
|
(0.9
|
)
|
||||
Operating and maintenance costs
|
(1.2
|
)
|
|
0.8
|
|
|
(0.3
|
)
|
|
(1.9
|
)
|
||||
Energy and other
(3)
|
1.3
|
|
|
2.2
|
|
|
(2.4
|
)
|
|
(0.1
|
)
|
||||
Current year period
|
$
|
193.4
|
|
|
$
|
50.0
|
|
|
$
|
548.6
|
|
|
$
|
130.0
|
|
(1)
|
We delivered lower volumes to AK Steel in 2017 compared to 2016, but received make-whole payments in both periods based on the terms of our long-term, take-or-pay contract. As such this reduction in volumes did not impact the period-over-period change in Adjusted EBITDA.
|
(2)
|
The increase in revenues was primarily driven by the pass-through of higher coal prices. These higher coal prices also increased the benefit of coal-to-coke yields, increasing Adjusted EBITDA. This benefit during the nine months ended September 30, 2017 was more than offset by the impact of the coal cover costs associated with the unfulfilled coal supply commitments by our coal supplier previously discussed in "Recent Developments and Items Impacting Comparability," which decreased both revenues and Adjusted EBITDA by $3.0 million for the nine months ended September 30, 2017.
|
(3)
|
Lower allocations of costs from SunCoke benefited Adjusted EBITDA by $0.5 million during both the three and nine months ended September 30, 2017. Adjusted EBITDA for the nine months ended September 30, 2017 was favorably impacted by the absence of the second quarter 2016 write-off of a $1.4 million receivable related to 2015 spot coke sales to Essar Algoma. The three months ended September 30, 2017 had higher energy sales, increasing both revenue and Adjusted EBITDA by $0.8 million. For the nine months ended September 30, 2017, both revenues and Adjusted EBITDA were unfavorably impacted by $3.6 million of lower energy sales as a result of the planned outage at the Granite City facility in the second quarter.
|
|
Three months ended September 30, 2017 vs. 2016
|
|
Nine months ended September 30, 2017 vs. 2016
|
||||||||||||
|
Sales and other operating revenue, inclusive of intersegment sales
|
|
Adjusted EBITDA
|
|
Sales and other operating revenue, inclusive of intersegment sales
|
|
Adjusted EBITDA
|
||||||||
|
(Dollars in millions)
|
||||||||||||||
Prior year period
|
$
|
16.2
|
|
|
$
|
7.0
|
|
|
$
|
48.9
|
|
|
$
|
18.2
|
|
Transloading volumes
(1)
|
6.1
|
|
|
5.7
|
|
|
17.6
|
|
|
17.2
|
|
||||
Price/margin impact of mix in transloading services
|
(0.7
|
)
|
|
(0.8
|
)
|
|
(1.3
|
)
|
|
(1.3
|
)
|
||||
Operating and maintenance costs and other
|
0.6
|
|
|
0.4
|
|
|
1.3
|
|
|
0.8
|
|
||||
Current year period
|
$
|
22.2
|
|
|
$
|
12.3
|
|
|
$
|
66.5
|
|
|
$
|
34.9
|
|
(1)
|
The increase in revenues and Adjusted EBITDA during the three and nine months ended September 30, 2017 was the result of higher tons handled as compared to the prior year periods of
807 thousand
and
3,192 thousand
, respectively, primarily at CMT, including nominal business from new customers.
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
|
|
(Dollars in millions)
|
||||||
Net cash provided by operating activities
|
|
$
|
112.7
|
|
|
$
|
140.0
|
|
Net cash used in investing activities
|
|
(23.2
|
)
|
|
(11.0
|
)
|
||
Net cash used in financing activities
|
|
(104.4
|
)
|
|
(131.5
|
)
|
||
Net decrease in cash and cash equivalents
|
|
$
|
(14.9
|
)
|
|
$
|
(2.5
|
)
|
•
|
Ongoing capital expenditures required to maintain equipment reliability, ensure the integrity and safety of our coke ovens and steam generators and to comply with environmental regulations. Ongoing capital expenditures are made to replace partially or fully depreciated assets in order to maintain the existing operating capacity of the assets and/or to extend their useful lives and also include new equipment that improves the efficiency, reliability
|
•
|
Environmental remediation project expenditures required to implement design changes to ensure that our existing facilities operate in accordance with existing environmental permits; and
|
•
|
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 on which we expect to earn a reasonable return.
|
|
|
Nine Months Ended September 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
|
|
|
||||
|
|
(Dollars in millions)
|
||||||
Ongoing capital
|
|
$
|
11.9
|
|
|
$
|
10.7
|
|
Environmental remediation capital
(1)
|
|
11.0
|
|
|
6.5
|
|
||
Expansion capital:
|
|
|
|
|
—
|
|
||
CMT ship loader
(2)
|
|
0.1
|
|
|
12.9
|
|
||
Other expansion capital
|
|
0.3
|
|
|
—
|
|
||
Total
|
|
$
|
23.3
|
|
|
$
|
30.1
|
|
(1)
|
Includes
$0.7 million
and
$2.2 million
of capitalized interest, in connection with the environmental remediation projects, during the
nine months ended September 30, 2017
and
2016
, respectively.
|
(2)
|
Represents capital expenditures of $11.0 million for the ship loader expansion project funded with cash withheld in conjunction with the acquisition of CMT and $1.9 million of capitalized interest for the nine months ended September 30, 2016.
|
•
|
Total ongoing capital expenditures of approximately
$19 million
;
|
•
|
Total capital expenditures on environmental remediation projects of approximately
$25 million
; and
|
•
|
Total expansion capital of approximately
$1 million
in our Coal Logistics segment.
|
|
|
2017
|
||||||
|
|
Low
|
|
High
|
||||
Net Cash Provided by Operating Activities
|
|
$
|
130
|
|
|
$
|
150
|
|
Subtract:
|
|
|
|
|
||||
Depreciation and amortization expense
|
|
86
|
|
|
86
|
|
||
Deferred income tax expense
|
|
149
|
|
|
149
|
|
||
Changes in working capital and other
|
|
(23
|
)
|
|
(14
|
)
|
||
Loss on extinguishment of debt
|
|
20
|
|
|
20
|
|
||
Net loss
|
|
$
|
(102
|
)
|
|
$
|
(91
|
)
|
Add:
|
|
|
|
|
||||
Depreciation and amortization expense
|
|
86
|
|
|
86
|
|
||
Interest expense, net
|
|
58
|
|
|
57
|
|
||
Loss on extinguishment of debt
|
|
20
|
|
|
20
|
|
||
Income tax expense
|
|
151
|
|
|
151
|
|
||
Adjusted EBITDA
|
|
$
|
213
|
|
|
$
|
223
|
|
Subtract: Adjusted EBITDA attributable to noncontrolling interest
(1)
|
|
3
|
|
|
3
|
|
||
Adjusted EBITDA attributable to SunCoke Energy Partners, L.P.
|
|
$
|
210
|
|
|
$
|
220
|
|
(1)
|
Reflects net income attributable to noncontrolling interest adjusted for noncontrolling interest's share of interest, taxes, income, and depreciation and amortization.
|
•
|
changes in levels of production, production capacity, pricing and/or margins for coal and coke;
|
•
|
variation in availability, quality and supply of metallurgical coal used in the cokemaking process, including as a result of non-performance by our suppliers;
|
•
|
changes in the marketplace that may affect our logistics business, including the supply and demand for thermal and metallurgical coals;
|
•
|
changes in the marketplace that may affect our cokemaking business, including the supply and demand for our coke, as well as increased imports of coke from foreign producers;
|
•
|
competition from alternative steelmaking and other technologies that have the potential to reduce or eliminate the use of coke;
|
•
|
our dependence on, relationships with, and other conditions affecting, our customers;
|
•
|
severe financial hardship or bankruptcy of one or more of our major customers, or the occurrence of a customer default or other event affecting our ability to collect payments from our customers;
|
•
|
volatility and cyclical downturns in the coal market, in the carbon steel industry, and other industries in which our customers and/or suppliers operate;
|
•
|
our ability to enter into new, or renew existing, long-term agreements upon favorable terms for the sale of coke, steam, or electric power, or for coal and other aggregates handling services (including transportation, storage and mixing);
|
•
|
our ability to identify acquisitions, execute them under favorable terms and integrate them into our existing business operations;
|
•
|
our ability to realize expected benefits from investments and acquisitions;
|
•
|
our ability to consummate investments under favorable terms, including with respect to existing cokemaking facilities, which may utilize by-product technology, and integrate them into our existing businesses and have them perform at anticipated levels;
|
•
|
our ability to develop, design, permit, construct, start up or operate new cokemaking facilities in the U.S.;
|
•
|
our ability to successfully implement our growth strategy;
|
•
|
age of, and changes in the reliability, efficiency and capacity of the various equipment and operating facilities used in our cokemaking and/or logistics operations, and in the operations of our major customers, business partners and/or suppliers;
|
•
|
changes in the expected operating levels of our assets;
|
•
|
our ability to meet minimum volume requirements, coal-to-coke yield standards and coke quality standards in our coke sales agreements;
|
•
|
changes in the level of capital expenditures or operating expenses, including any changes in the level of environmental capital, operating or remediation expenditures;
|
•
|
our ability to service our outstanding indebtedness;
|
•
|
our ability to comply with the restrictions imposed by our financing arrangements;
|
•
|
our ability to comply with federal or state environmental statutes, rules or regulations;
|
•
|
nonperformance or force majeure by, or disputes with, or changes in contract terms with, major customers, suppliers, dealers, distributors or other business partners;
|
•
|
availability of skilled employees for our cokemaking and/or logistics operations, and other workplace factors;
|
•
|
effects of railroad, barge, truck and other transportation performance and costs, including any transportation disruptions;
|
•
|
effects of adverse events relating to the operation of our facilities and to the transportation and storage of hazardous materials (including equipment malfunction, explosions, fires, spills, and the effects of severe weather conditions);
|
•
|
effects of adverse events relating to the business or commercial operations of our customers and/or suppliers;
|
•
|
disruption in our information technology infrastructure and/or loss of our ability to securely store, maintain, or transmit data due to security breach by hackers, employee error or malfeasance, terrorist attack, power loss, telecommunications failure or other events;
|
•
|
our ability to enter into joint ventures and other similar arrangements under favorable terms;
|
•
|
our ability to consummate assets sales, other divestitures and strategic restructuring in a timely manner upon favorable terms, and/or realize the anticipated benefits from such actions;
|
•
|
changes in the availability and cost of equity and debt financing;
|
•
|
impacts on our liquidity and ability to raise capital as a result of changes in the credit ratings assigned to our indebtedness;
|
•
|
changes in credit terms required by our suppliers;
|
•
|
risks related to labor relations and workplace safety;
|
•
|
proposed or final changes in existing, or new, statutes, regulations, rules, governmental policies and taxes, or their interpretations, including those relating to environmental matters and taxes;
|
•
|
the existence of hazardous substances or other environmental contamination on property owned or used by us;
|
•
|
receipt of required permits and other regulatory approvals and compliance with contractual obligations in connection with our cokemaking and/or logistics operations;
|
•
|
claims of noncompliance with any statutory and regulatory requirements;
|
•
|
the accuracy of our estimates of any necessary reclamation and/or remediation activities;
|
•
|
proposed or final changes in accounting and/or tax methodologies, laws, regulations, rules, or policies, or their interpretations, including those affecting inventories, leases, post-employment benefit income, and/or other items;
|
•
|
historical consolidated financial data may not be reliable indicator of future results;
|
•
|
public company costs;
|
•
|
our indebtedness and certain covenants in our debt documents;
|
•
|
changes in product specifications for the coke that we produce or the coals that we mix, store and transport;
|
•
|
changes in insurance markets impacting costs and the level and types of coverage available, and the financial ability of our insurers to meet their obligations;
|
•
|
changes in financial markets impacting pension expense and funding requirements;
|
•
|
inadequate protection of our intellectual property rights; and
|
•
|
effects of geologic conditions, weather, natural disasters and other inherent risks beyond our control.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
|
|
|
Description
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
101*
|
|
|
|
The following financial statements from SunCoke Energy Partners L.P.'s Quarterly Report on Form 10-Q for the three months ended September 30, 2017, filed with the Securities and Exchange Commission on October 26, 2017, formatted in XBRL (eXtensible Business Reporting Language is attached to this report): (i) the Consolidated Statements of Operations; (ii) the Consolidated Balance Sheets; (iii) the Consolidated Statements of Cash Flows; (iv) the Consolidated Statement of Equity; and, (v) the Notes to Consolidated Financial Statements.
|
*
|
Filed herewith.
|
SunCoke Energy Partners, L.P.
|
||
|
|
|
By:
|
|
SunCoke Energy Partners GP LLC, its general partner
|
|
|
|
By:
|
|
/s/ Fay West
|
|
|
Fay West
|
|
|
Senior Vice President and Chief Financial Officer
(As Principal Financial Officer and Duly Authorized Officer of SunCoke Energy Partners GP LLC)
|
1 Year Suncoke Energy Partners, L.P. Common Units Representing Limited Partner Interests Chart |
1 Month Suncoke Energy Partners, L.P. Common Units Representing Limited Partner Interests Chart |
Support: +44 (0) 203 8794 460 | support@advfn.com
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