UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

_____________________________________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~September 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-35243

_____________________________________________________________________

SUNCOKE ENERGY, INC.

(Exact name of registrant as specified in its charter)

______________________________________________________________________


Delaware						90-0640593
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

1011 Warrenville Road, Suite 600

Lisle, Illinois 60532

(Address of principal executive offices, including zip code)

(630) 824-1000

(Registrant’s telephone number, including area code)

____________________________________________________________

Securities registered pursuant to ~~section~~Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

SXC

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ý Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ý No

As of ~~April 29,~~October 28, 2022, there were ~~83,380,822~~83,402,313 shares of the Registrant’s ~~$0.01~~Common Stock, par value ~~Common Stock~~$0.01 per share outstanding.

Table of Contents

SUNCOKE ENERGY, INC.

TABLE OF CONTENTS


PART I – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements			1

Consolidated Statements of Income (Unaudited) For the Three and Nine Months Ended ~~March 31,~~September 30, 2022 and 2021			1

Consolidated Statements of Comprehensive Income (Unaudited) For the Three and Nine Months Ended ~~March 31,~~September 30, 2022 and 2021			2

Consolidated Balance Sheets at ~~March 31,~~September 30, 2022 (Unaudited) and December 31, 2021			3

Consolidated Statements of Cash Flows (Unaudited) For the ~~Three~~Nine Months Ended ~~March 31,~~September 30, 2022 and 2021			4

Consolidated Statements of Equity (Unaudited) For the Three and Nine Months Ended ~~March 31,~~September 30, 2022 and 2021			5

Notes to the Consolidated Financial Statements			67

1. General			67

2. Inventories			67

3. Intangible Assets			78

4. Income Taxes			78

5. Accrued Liabilities			79

6. Debt and Financing Obligation			89

7. Commitments and Contingent Liabilities			89

8. Share-Based Compensation			910

9. Earnings per Share			1112

10. Fair Value Measurement			1112

11. Revenue from Contracts with Customers			1213

12. Business Segment Information			1314





Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			1617

Item 3. Quantitative and Qualitative Disclosures about Market Risk			2729

Item 4. Controls and Procedures			2729

PART II – OTHER INFORMATION

Item 1. Legal Proceedings			2830

Item 1A. Risk Factors			2830

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			2830

Item 3. Defaults Upon Senior Securities			30

Item 4. Mine Safety Disclosures			2830

Item 5. Other Information			30

Item 6. Exhibits			2931

Signature			3032

Table of Contents

PART I – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

SunCoke Energy, Inc.

Consolidated Statements of Income

(Unaudited)


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021					2022		2021		2022		2021

		(Dollars and shares in millions, except per share amounts)				(Dollars and shares in millions, except per share amounts)
Revenues	Revenues							Revenues
Sales and other operating revenue	Sales and other operating revenue	$	439.8	$	359.9			Sales and other operating revenue	$	516.8	$	366.5	$	1,458.5	$	1,090.7
Costs and operating expenses	Costs and operating expenses							Costs and operating expenses
Cost of products sold and operating expenses	Cost of products sold and operating expenses	338.0		274.0				Cost of products sold and operating expenses	413.4		277.3		1,163.2		829.9
Selling, general and administrative expenses	Selling, general and administrative expenses	18.0		15.3				Selling, general and administrative expenses	20.1		15.3		57.9		48.3
Depreciation and amortization expense	Depreciation and amortization expense	35.2		32.4				Depreciation and amortization expense	35.7		32.5		106.7		99.0
Total costs and operating expenses	Total costs and operating expenses	391.2		321.7				Total costs and operating expenses	469.2		325.1		1,327.8		977.2
Operating income	Operating income	48.6		38.2				Operating income	47.6		41.4		130.7		113.5
Interest expense, net	Interest expense, net	8.0		12.7				Interest expense, net	8.0		7.9		24.3		34.8
Income before income tax expense		40.6		25.5
Income tax expense		10.0		7.3
Loss on extinguishment of debt								Loss on extinguishment of debt	—		—		—		31.9
Income before income tax (benefit) expense								Income before income tax (benefit) expense	39.6		33.5		106.4		46.8
Income tax (benefit) expense								Income tax (benefit) expense	(2.9)		9.4		14.3		12.0
Net income	Net income	30.6		18.2				Net income	42.5		24.1		92.1		34.8
Less: Net income attributable to noncontrolling interests	Less: Net income attributable to noncontrolling interests	1.1		1.7				Less: Net income attributable to noncontrolling interests	1.1		1.1		3.2		4.1
Net income attributable to SunCoke Energy, Inc.	Net income attributable to SunCoke Energy, Inc.	$	29.5	$	16.5			Net income attributable to SunCoke Energy, Inc.	$	41.4	$	23.0	$	88.9	$	30.7
Earnings attributable to SunCoke Energy, Inc. per common share:	Earnings attributable to SunCoke Energy, Inc. per common share:							Earnings attributable to SunCoke Energy, Inc. per common share:
Basic	Basic	$	0.35	$	0.20			Basic	$	0.49	$	0.28	$	1.06	$	0.37
Diluted	Diluted	$	0.35	$	0.20			Diluted	$	0.49	$	0.27	$	1.05	$	0.37
Weighted average number of common shares outstanding:	Weighted average number of common shares outstanding:							Weighted average number of common shares outstanding:
Basic	Basic	83.2		82.8				Basic	83.9		83.0		83.8		83.0
Diluted	Diluted	84.2		83.5				Diluted	84.7		83.8		84.5		83.6

(See ~~Accompanying Notes)~~accompanying notes to the consolidated financial statements)

Table of Contents

SunCoke Energy, Inc.

Consolidated Statements of Comprehensive Income

(Unaudited)


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021					2022		2021		2022		2021

		(Dollars in millions)				(Dollars in millions)
Net income	Net income	$	30.6	$	18.2			Net income	$	42.5	$	24.1	$	92.1	$	34.8
Other comprehensive income (loss):	Other comprehensive income (loss):							Other comprehensive income (loss):
Reclassifications of prior service benefit and actuarial benefit amortization to earnings, net of tax		0.1		0.1
Reclassifications of prior service benefit and actuarial loss amortization to earnings, net of tax								Reclassifications of prior service benefit and actuarial loss amortization to earnings, net of tax	0.1		0.1		0.3		0.3
Currency translation adjustment	Currency translation adjustment	1.3		(0.7)				Currency translation adjustment	(0.3)		(1.0)		—		(0.8)
Comprehensive income	Comprehensive income	32.0		17.6				Comprehensive income	42.3		23.2		92.4		34.3
Less: Comprehensive income attributable to noncontrolling interests	Less: Comprehensive income attributable to noncontrolling interests	1.1		1.7				Less: Comprehensive income attributable to noncontrolling interests	1.1		1.1		3.2		4.1
Comprehensive income attributable to SunCoke Energy, Inc.	Comprehensive income attributable to SunCoke Energy, Inc.	$	30.9	$	15.9			Comprehensive income attributable to SunCoke Energy, Inc.	$	41.2	$	22.1	$	89.2	$	30.2

(See ~~Accompanying Notes)~~accompanying notes to the consolidated financial statements)

Table of Contents

SunCoke Energy, Inc.

Consolidated Balance Sheets


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021
		(Unaudited)					(Unaudited)
		(Dollars in millions, except par value amounts)					(Dollars in millions, except par value amounts)
Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	79.7	$	63.8	Cash and cash equivalents	$	59.3	$	63.8
Receivables, net	Receivables, net	99.5		77.6		Receivables, net	118.7		77.6
Inventories	Inventories	194.1		127.0		Inventories	204.9		127.0
Other current assets	Other current assets	10.0		3.5		Other current assets	6.4		3.5
Total current assets	Total current assets	383.3		271.9		Total current assets	389.3		271.9
Properties, plants and equipment (net of accumulated depreciation of $1,195.0 million and $1,160.1 million at March 31, 2022 and December 31, 2021, respectively)		1,266.1		1,287.9
Properties, plants and equipment (net of accumulated depreciation of $1,248.9 million and $1,160.1 million at September 30, 2022 and December 31, 2021, respectively)						Properties, plants and equipment (net of accumulated depreciation of $1,248.9 million and $1,160.1 million at September 30, 2022 and December 31, 2021, respectively)	1,238.9		1,287.9
Intangible assets, net	Intangible assets, net	34.7		35.2		Intangible assets, net	33.7		35.2
Deferred charges and other assets	Deferred charges and other assets	21.6		20.4		Deferred charges and other assets	17.9		20.4
Total assets	Total assets	$	1,705.7	$	1,615.4	Total assets	$	1,679.8	$	1,615.4
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Accounts payable	Accounts payable	$	168.1	$	126.0	Accounts payable	$	153.0	$	126.0
Accrued liabilities	Accrued liabilities	48.9		52.4		Accrued liabilities	55.0		52.4
Current portion of financing obligation	Current portion of financing obligation	3.2		3.2		Current portion of financing obligation	3.3		3.2
Interest payable	Interest payable	6.1		—		Interest payable	6.2		—
Income tax payable	Income tax payable	3.9		0.6		Income tax payable	2.4		0.6
Total current liabilities	Total current liabilities	230.2		182.2		Total current liabilities	219.9		182.2
Long-term debt and financing obligation	Long-term debt and financing obligation	625.0		610.4		Long-term debt and financing obligation	561.2		610.4
Accrual for black lung benefits	Accrual for black lung benefits	58.7		57.9		Accrual for black lung benefits	60.3		57.9
Retirement benefit liabilities	Retirement benefit liabilities	21.3		21.8		Retirement benefit liabilities	20.5		21.8
Deferred income taxes	Deferred income taxes	174.3		169.0		Deferred income taxes	170.8		169.0
Asset retirement obligations	Asset retirement obligations	11.9		11.6		Asset retirement obligations	12.4		11.6
Other deferred credits and liabilities	Other deferred credits and liabilities	22.4		27.1		Other deferred credits and liabilities	23.1		27.1
Total liabilities	Total liabilities	1,143.8		1,080.0		Total liabilities	1,068.2		1,080.0
Equity	Equity					Equity
Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no issued shares at both March 31, 2022 and December 31, 2021		—		—
Common stock, $0.01 par value. Authorized 300,000,000 shares; issued 98,754,995 and 98,496,809 shares at March 31, 2022 and December 31, 2021, respectively		1.0		1.0
Treasury stock, 15,404,482 shares at both March 31, 2022 and December 31, 2021		(184.0)		(184.0)
Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no issued shares at both September 30, 2022 and December 31, 2021						Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no issued shares at both September 30, 2022 and December 31, 2021	—		—
Common stock, $0.01 par value. Authorized 300,000,000 shares; issued 98,806,795 and 98,496,809 shares at September 30, 2022 and December 31, 2021, respectively						Common stock, $0.01 par value. Authorized 300,000,000 shares; issued 98,806,795 and 98,496,809 shares at September 30, 2022 and December 31, 2021, respectively	1.0		1.0
Treasury stock, 15,404,482 shares at both September 30, 2022 and December 31, 2021						Treasury stock, 15,404,482 shares at both September 30, 2022 and December 31, 2021	(184.0)		(184.0)
Additional paid-in capital	Additional paid-in capital	722.3		721.2		Additional paid-in capital	726.4		721.2
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(15.3)		(16.7)		Accumulated other comprehensive loss	(16.4)		(16.7)
Retained earnings (deficit)	Retained earnings (deficit)	1.0		(23.4)		Retained earnings (deficit)	48.5		(23.4)
Total SunCoke Energy, Inc. stockholders’ equity	Total SunCoke Energy, Inc. stockholders’ equity	525.0		498.1		Total SunCoke Energy, Inc. stockholders’ equity	575.5		498.1
Noncontrolling interest	Noncontrolling interest	36.9		37.3		Noncontrolling interest	36.1		37.3
Total equity	Total equity	561.9		535.4		Total equity	611.6		535.4
Total liabilities and equity	Total liabilities and equity	$	1,705.7	$	1,615.4	Total liabilities and equity	$	1,679.8	$	1,615.4

(See ~~Accompanying Notes)~~accompanying notes to the consolidated financial statements)

Table of Contents

SunCoke Energy, Inc.

Consolidated Statements of Cash Flows

(Unaudited)


		Three Months Ended March 31,					Nine Months Ended September 30,
		2022		2021			2022		2021

		(Dollars in millions)					(Dollars in millions)
Cash Flows from Operating Activities	Cash Flows from Operating Activities					Cash Flows from Operating Activities
Net income	Net income	$	30.6	$	18.2	Net income	$	92.1	$	34.8
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	Depreciation and amortization expense	35.2		32.4		Depreciation and amortization expense	106.7		99.0
Deferred income tax expense	Deferred income tax expense	5.3		3.1		Deferred income tax expense	1.8		5.8
Share-based compensation expense	Share-based compensation expense	1.1		0.5		Share-based compensation expense	5.0		4.3

Loss on extinguishment of debt						Loss on extinguishment of debt	—		31.9
Changes in working capital pertaining to operating activities:	Changes in working capital pertaining to operating activities:					Changes in working capital pertaining to operating activities:
Receivables, net	Receivables, net	(21.9)		0.5		Receivables, net	(44.7)		(13.8)
Inventories	Inventories	(66.9)		(8.9)		Inventories	(77.8)		(3.4)
Accounts payable	Accounts payable	41.9		12.9		Accounts payable	26.5		13.3
Accrued liabilities	Accrued liabilities	(3.9)		(3.7)		Accrued liabilities	2.4		0.2
Interest payable	Interest payable	6.1		11.0		Interest payable	6.2		4.7
Income taxes	Income taxes	3.3		3.8		Income taxes	1.8		5.0
Other	Other	(8.1)		(5.0)		Other	0.6		2.2
Net cash provided by operating activities	Net cash provided by operating activities	22.7		64.8		Net cash provided by operating activities	120.6		184.0
Cash Flows from Investing Activities	Cash Flows from Investing Activities					Cash Flows from Investing Activities
Capital expenditures	Capital expenditures	(12.9)		(20.1)		Capital expenditures	(55.7)		(52.1)
Other investing activities	Other investing activities	(0.1)		—		Other investing activities	3.6		—
Net cash used in investing activities	Net cash used in investing activities	(13.0)		(20.1)		Net cash used in investing activities	(52.1)		(52.1)
Cash Flows from Financing Activities	Cash Flows from Financing Activities					Cash Flows from Financing Activities

Proceeds from issuance of long-term debt						Proceeds from issuance of long-term debt	—		500.0
Repayment of long-term debt						Repayment of long-term debt	—		(609.3)
Proceeds from revolving facility	Proceeds from revolving facility	137.0		161.8		Proceeds from revolving facility	450.0		581.1
Repayment of revolving facility	Repayment of revolving facility	(122.0)		(194.1)		Repayment of revolving facility	(498.0)		(567.4)
Repayment of financing obligation	Repayment of financing obligation	(0.8)		(0.7)		Repayment of financing obligation	(2.4)		(2.2)

Debt issuance costs						Debt issuance costs	—		(12.0)
Dividends paid	Dividends paid	(5.0)		(5.1)		Dividends paid	(16.9)		(15.1)
Cash distribution to noncontrolling interests	Cash distribution to noncontrolling interests	(1.5)		—		Cash distribution to noncontrolling interests	(4.4)		—
Other financing activities	Other financing activities	(1.5)		(1.0)		Other financing activities	(1.3)		(0.8)
Net cash provided by (used in) financing activities		6.2		(39.1)
Net increase in cash and cash equivalents		15.9		5.6
Net cash used in financing activities						Net cash used in financing activities	(73.0)		(125.7)
Net (decrease) increase in cash and cash equivalents						Net (decrease) increase in cash and cash equivalents	(4.5)		6.2
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	63.8		48.4		Cash and cash equivalents at beginning of period	63.8		48.4
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	79.7	$	54.0	Cash and cash equivalents at end of period	$	59.3	$	54.6
Supplemental Disclosure of Cash Flow Information	Supplemental Disclosure of Cash Flow Information					Supplemental Disclosure of Cash Flow Information
Interest paid, net of capitalized interest of zero and $0.1 million, respectively		$	0.9	$	0.5
Income taxes paid		$	1.4	$	0.4
Interest paid, net of capitalized interest of zero and $0.4 million, respectively						Interest paid, net of capitalized interest of zero and $0.4 million, respectively	$	15.4	$	26.6
Income taxes paid, net of refunds of zero and $2.9 million, respectively						Income taxes paid, net of refunds of zero and $2.9 million, respectively	$	10.8	$	1.3

(See ~~Accompanying Notes)~~accompanying notes to the consolidated financial statements)

Table of Contents

SunCoke Energy, Inc.

Consolidated Statements of Equity

Three Months Ended ~~March 31,~~September 30, 2022

(Unaudited)


		Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained (Deficit) Earnings		Total SunCoke Energy, Inc. Equity		Non-controlling Interests		Total Equity			Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Earnings		Total SunCoke Energy, Inc. Equity		Non-controlling Interests		Total Equity
		Shares	Amount		Shares	Amount															Shares	Amount		Shares	Amount

		(Dollars in millions)																			(Dollars in millions)
At December 31, 2021		98,496,809	$	1.0	15,404,482	$	(184.0)	$	721.2	$	(16.7)	$	(23.4)	$	498.1	$	37.3	$	535.4
At June 30, 2022																				At June 30, 2022	98,795,825	$	1.0	15,404,482	$	(184.0)	$	724.4	$	(16.2)	$	13.9	$	539.1	$	35.0	$	574.1
Net income	Net income	—	—		—	—		—		—		29.5		29.5		1.1		30.6		Net income	—	—		—	—		—		—		41.4		41.4		1.1		42.5
Reclassifications of prior service benefit and actuarial benefit amortization to earnings, net of tax		—	—		—	—		—		0.1		—		0.1		—		0.1
Reclassifications of prior service benefit and actuarial loss amortization to earnings, net of tax																				Reclassifications of prior service benefit and actuarial loss amortization to earnings, net of tax	—	—		—	—		—		0.1		—		0.1		—		0.1
Currency translation adjustment	Currency translation adjustment	—	—		—	—		—		1.3		—		1.3		—		1.3		Currency translation adjustment	—	—		—	—		—		(0.3)		—		(0.3)		—		(0.3)
Share-based compensation	Share-based compensation	—	—		—	—		2.5		—		—		2.5		—		2.5		Share-based compensation	—	—		—	—		2.0		—		—		2.0		—		2.0
Share issuances, net of shares withheld for taxes	Share issuances, net of shares withheld for taxes	258,186	—		—	—		(1.4)		—		—		(1.4)		—		(1.4)		Share issuances, net of shares withheld for taxes	10,970	—		—	—		—		—		—		—		—		—
Dividends	Dividends	—	—		—	—		—		—		(5.1)		(5.1)		—		(5.1)		Dividends	—	—		—	—		—		—		(6.8)		(6.8)		—		(6.8)
Cash distribution to noncontrolling interests	Cash distribution to noncontrolling interests	—	—		—	—		—		—		—		—		(1.5)		(1.5)		Cash distribution to noncontrolling interests	—	—		—	—		—		—		—		—		—		—
At March 31, 2022		98,754,995	$	1.0	15,404,482	$	(184.0)	$	722.3	$	(15.3)	$	1.0	$	525.0	$	36.9	$	561.9
At September 30, 2022																				At September 30, 2022	98,806,795	$	1.0	15,404,482	$	(184.0)	$	726.4	$	(16.4)	$	48.5	$	575.5	$	36.1	$	611.6

SunCoke Energy, Inc.

Consolidated Statements of Equity

Three Months Ended ~~March 31,~~September 30, 2021

(Unaudited)


		Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Deficit		Total SunCoke Energy, Inc. Equity		Non-controlling Interests		Total Equity			Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Deficit		Total SunCoke Energy, Inc. Equity		Non-controlling Interests		Total Equity
		Shares	Amount		Shares	Amount															Shares	Amount		Shares	Amount

		(Dollars in millions)																			(Dollars in millions)
At December 31, 2020		98,177,941	$	1.0	15,404,482	$	(184.0)	$	715.7	$	(17.1)	$	(46.6)	$	469.0	$	31.9	$	500.9
At June 30, 2021																				At June 30, 2021	98,392,059	$	1.0	15,404,482	$	(184.0)	$	717.1	$	(16.7)	$	(49.0)	$	468.4	$	34.9	$	503.3
Net income	Net income	—	—		—	—		—		—		16.5		16.5		1.7		18.2		Net income	—	—		—	—		—		—		23.0		23.0		1.1		24.1
Reclassifications of prior service benefit and actuarial benefit amortization to earnings, net of tax		—	—		—	—		—		0.1		—		0.1		—		0.1
Reclassifications of prior service benefit and actuarial loss amortization to earnings, net of tax																				Reclassifications of prior service benefit and actuarial loss amortization to earnings, net of tax	—	—		—	—		—		0.1		—		0.1		—		0.1
Currency translation adjustment	Currency translation adjustment	—	—		—	—		—		(0.7)		—		(0.7)		—		(0.7)		Currency translation adjustment	—	—		—	—		—		(1.0)		—		(1.0)		—		(1.0)
Share-based compensation	Share-based compensation	—	—		—	—		0.5		—		—		0.5		—		0.5		Share-based compensation	—	—		—	—		2.0		—		—		2.0		—		2.0
Share issuances, net of shares withheld for taxes	Share issuances, net of shares withheld for taxes	204,416	—		—	—		(0.9)		—		—		(0.9)		—		(0.9)		Share issuances, net of shares withheld for taxes	93,575	—		—	—		0.3		—		—		0.3		—		0.3
Dividends	Dividends	—	—		—	—		—		—		(5.0)		(5.0)		—		(5.0)		Dividends	—	—		—	—		—		—		(5.1)		(5.1)		—		(5.1)
At March 31, 2021		98,382,357	$	1.0	15,404,482	$	(184.0)	$	715.3	$	(17.7)	$	(35.1)	$	479.5	$	33.6	$	513.1
At September 30, 2021																				At September 30, 2021	98,485,634	$	1.0	15,404,482	$	(184.0)	$	719.4	$	(17.6)	$	(31.1)	$	487.7	$	36.0	$	523.7

(See accompanying notes to the consolidated financial statements)

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SunCoke Energy, Inc.

Consolidated Statements of Equity

Nine Months Ended September 30, 2022

(Unaudited)


	Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained (Deficit) Earnings		Total SunCoke Energy, Inc. Equity		Non-controlling Interests		Total Equity
	Shares	Amount		Shares	Amount

	(Dollars in millions)
At December 31, 2021	98,496,809	$	1.0	15,404,482	$	(184.0)	$	721.2	$	(16.7)	$	(23.4)	$	498.1	$	37.3	$	535.4
Net income	—	—		—	—		—		—		88.9		88.9		3.2		92.1
Reclassifications of prior service benefit and actuarial loss amortization to earnings, net of tax	—	—		—	—		—		0.3		—		0.3		—		0.3

Share-based compensation	—	—		—	—		6.4		—		—		6.4		—		6.4
Share issuances, net of shares withheld for taxes	309,986	—		—	—		(1.2)		—		—		(1.2)		—		(1.2)
Dividends	—	—		—	—		—		—		(17.0)		(17.0)		—		(17.0)
Cash distribution to noncontrolling interests	—	—		—	—		—		—		—		—		(4.4)		(4.4)
At September 30, 2022	98,806,795	$	1.0	15,404,482	$	(184.0)	$	726.4	$	(16.4)	$	48.5	$	575.5	$	36.1	$	611.6

SunCoke Energy, Inc.

Consolidated Statements of Equity

Nine Months Ended September 30, 2021

(Unaudited)


	Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Retained Deficit		Total SunCoke Energy, Inc. Equity		Non-controlling Interests		Total Equity
	Shares	Amount		Shares	Amount

	(Dollars in millions)
At December 31, 2020	98,177,941	$	1.0	15,404,482	$	(184.0)	$	715.7	$	(17.1)	$	(46.6)	$	469.0	$	31.9	$	500.9
Net income	—	—		—	—		—		—		30.7		$	30.7	4.1		34.8
Reclassifications of prior service benefit and actuarial loss amortization to earnings, net of tax	—	—		—	—		—		0.3		—		0.3		—		0.3
Currency translation adjustment	—	—		—	—		—		(0.8)		—		(0.8)		—		(0.8)
Share-based compensation	—	—		—	—		4.3		—		—		4.3		—		4.3
Share issuances, net of shares withheld for taxes	307,693	—		—	—		(0.6)		—		—		(0.6)		—		(0.6)
Dividends	—	—		—	—		—		—		(15.2)		(15.2)		—		(15.2)
At September 30, 2021	98,485,634	$	1.0	15,404,482	$	(184.0)	$	719.4	$	(17.6)	$	(31.1)	$	487.7	$	36.0	$	523.7

(See accompanying notes to the consolidated financial statements)

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SunCoke Energy, Inc.

Notes to the Consolidated Financial Statements

1. General

Description of Business

SunCoke Energy, Inc. (“SunCoke Energy,” “SunCoke,” “Company,” “we,” “our” and “us”) is the largest independent producer of high-quality coke in the Americas, as measured by tons of coke produced each year, and has more than 60 years of coke production experience. We have designed, developed and built, and we currently own and operate, 5five cokemaking facilities in the United States (“U.S.”), which have collective nameplate capacity to produce approximately 4.2 million tons of blast furnace coke per year. Additionally, we have designed and currently operate 1one cokemaking facility in Brazil under licensing and operating agreements on behalf of ArcelorMittal Brasil S.A. (“ArcelorMittal Brazil”), which has approximately 1.7 million tons of annual cokemaking capacity. Our cokemaking ovens utilize efficient, modern heat recovery technology designed to combust the coal’s volatile components liberated during the cokemaking process and use the resulting heat to create steam or electricity for sale. The majority of our coke is used in the blast furnace production of steel and is sold under long-term, take-or-pay agreements with our steelmaking customers. Our coke is also used in the foundry production of casted iron as well as exported to international customers seeking high-quality products for their blast furnaces.

We also own and operate a logistics business that provides handling and/or mixing services to steel, coke (including some of our domestic cokemaking facilities), electric utility, coal producing and other manufacturing based customers. Our logistics business has the collective capacity to mix and/or transload more than 40 million tons of coal and other aggregates annually and has storage capacity of approximately 3 million tons.

Basis of Presentation

The accompanying unaudited consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim reporting. Certain information and disclosures normally included in financial statements have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In management’s opinion, the financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. The results of operations for the period ended ~~March 31,~~September 30, 2022 are not necessarily indicative of the operating results expected for the entire year. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.

2. Inventories

The components of inventories were as follows:


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021

		(Dollars in millions)					(Dollars in millions)
Coal	Coal	$	116.0	$	63.5	Coal	$	129.6	$	63.5
Coke	Coke	29.5		16.6		Coke	24.2		16.6
Materials, supplies and other	Materials, supplies and other	48.6		46.9		Materials, supplies and other	51.1		46.9
Total inventories	Total inventories	$	194.1	$	127.0	Total inventories	$	204.9	$	127.0

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3. Intangible Assets

Intangible assets, net, include Goodwill allocated to our Domestic Coke segment of $3.4 million at both ~~March 31,~~September 30, 2022 and December 31, 2021, and other intangibles detailed in the table below, excluding fully amortized intangible assets.


			March 31, 2022						December 31, 2021								September 30, 2022						December 31, 2021
		Weighted - Average Remaining Amortization Years	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net			Weighted - Average Remaining Amortization Years	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net

			(Dollars in millions)														(Dollars in millions)
Customer relationships	Customer relationships	2	$	6.7	$	5.1	$	1.6	$	6.7	$	5.0	$	1.7	Customer relationships	2	$	6.7	$	5.4	$	1.3	$	6.7	$	5.0	$	1.7
Permits	Permits	20	31.7		3.5		28.2		31.7		3.1		28.6		Permits	20	31.7		4.2		27.5		31.7		3.1		28.6
Other	Other	28	1.6		0.1		1.5		1.6		0.1		1.5		Other	28	1.6		0.1		1.5		1.6		0.1		1.5
Total	Total		$	40.0	$	8.7	$	31.3	$	40.0	$	8.2	$	31.8	Total		$	40.0	$	9.7	$	30.3	$	40.0	$	8.2	$	31.8

Total amortization expense for intangible assets subject to amortization was $0.5 million and $1.5 million for both the three and nine months ended ~~March 31,~~September 30, 2022 and ~~2021.~~September 30, 2021, respectively.

4. Income Taxes

At the end of each interim period, we make our best estimate of the effective tax rate and the impact of discrete items, if any, and adjust the rate as necessary.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
	(Dollars in millions)
Income before income tax (benefit) expense	$	39.6		$	33.5		$	106.4		$	46.8
Income tax (benefit) expense	(2.9)			9.4			14.3			12.0
Effective tax rate	(7.3)		%	28.1		%	13.4		%	25.6		%

~~The Company~~Income taxes recorded ~~income tax expense of $10.0 million and~~ ~~$7.3 million~~ ~~for~~reflect discrete items recorded during the ~~three~~periods. Income taxes recorded during the nine months ended March 31, 2022 and 2021, respectively, resulting in an effective tax rate of 24.6 percent and 28.6 percent, respectively, as compared to the 21.0 percent federal statutory rate. During both periods, the difference between the Company’s effective tax rate and the federal statutory rate primarily reflects the impact of state taxes and disallowed expenses. The impact of state taxes inSeptember 30, 2022 included the revaluation of certain deferred tax liabilities due to changes in apportioned state tax rates, which resulted in an income tax benefit of $1.0 million recorded during the first quarter of 2022. During the three months ended September 30, 2022, the Company released a valuation allowance established on the deferred tax assets attributable to existing foreign tax credit carryforwards, resulting in a deferred tax benefit of $11.3 million. The release of the aforementioned valuation allowance was a result of new regulations impacting foreign tax credit utilization, published by the U.S. Treasury in 2022. These regulations make foreign taxes paid in future years to certain countries, including Brazil, no longer creditable in the U.S. After completing tax planning, the Company now expects to be able to utilize the foreign tax credits carried forward from prior years. The Company also recognized deferred tax benefits of $4.6 million from research and development tax credits during the three and nine months ended September 30, 2022.Income taxes recorded during the nine months ended September 30, 2021 included the impact changes in state tax laws, which resulted in a state tax benefit of $1.3 million recorded during the second quarter of 2021.

Before the impact of the discrete items described above, the Company’s effective tax rate was 32.3 percent and 29.1 percent for the three and nine months ended September 30 2022, respectively, and 28.1 percent and 28.4 percent for the three and nine months ended September 30, 2021, respectively. The difference between the Company's effective tax rates and the federal statutory rate of 21.0 percent during all periods presented reflect the impact of state taxes as well as compensation deduction limitations under Section 162(m) of the Internal Revenue Code. The three and nine months ended September 30, 2022 also reflect the impact of foreign taxes as a result of the new regulations noted above.

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5. Accrued Liabilities

Accrued liabilities consisted of the following:


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021

		(Dollars in millions)					(Dollars in millions)
Accrued benefits	Accrued benefits	$	16.9	$	21.7	Accrued benefits	$	22.9	$	21.7
Current portion of postretirement benefit obligation	Current portion of postretirement benefit obligation	2.6		2.6		Current portion of postretirement benefit obligation	2.6		2.6
Other taxes payable	Other taxes payable	11.8		9.2		Other taxes payable	12.1		9.2
Current portion of black lung liability	Current portion of black lung liability	5.4		5.4		Current portion of black lung liability	5.4		5.4
Accrued legal	Accrued legal	4.6		4.5		Accrued legal	5.1		4.5
Other	Other	7.6		9.0		Other	6.9		9.0
Total accrued liabilities	Total accrued liabilities	$	48.9	$	52.4	Total accrued liabilities	$	55.0	$	52.4

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6. Debt and Financing Obligation

Total debt and financing obligation, including the current portion of the financing obligation, consisted of the following:


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021

		(Dollars in millions)					(Dollars in millions)
4.875 percent senior notes, due 2029 ("2029 Senior Notes")	4.875 percent senior notes, due 2029 ("2029 Senior Notes")	$	500.0	$	500.0	4.875 percent senior notes, due 2029 ("2029 Senior Notes")	$	500.0	$	500.0
$350.0 revolving credit facility, due 2026 ("Revolving Facility")	$350.0 revolving credit facility, due 2026 ("Revolving Facility")	130.0		115.0		$350.0 revolving credit facility, due 2026 ("Revolving Facility")	67.0		115.0
5.346 percent financing obligation, due 2024	5.346 percent financing obligation, due 2024	11.2		12.0		5.346 percent financing obligation, due 2024	9.6		12.0
Total borrowings	Total borrowings	641.2		627.0		Total borrowings	576.6		627.0
Debt issuance costs	Debt issuance costs	(13.0)		(13.4)		Debt issuance costs	(12.1)		(13.4)
Total debt and financing obligation	Total debt and financing obligation	$	628.2	$	613.6	Total debt and financing obligation	$	564.5	$	613.6
Less: current portion of financing obligation	Less: current portion of financing obligation	3.2		3.2		Less: current portion of financing obligation	3.3		3.2
Total long-term debt and financing obligation	Total long-term debt and financing obligation	$	625.0	$	610.4	Total long-term debt and financing obligation	$	561.2	$	610.4

Revolving Facility

As of ~~March 31,~~September 30, 2022, the Revolving Facility had a ~~$130.0~~$67.0 million outstanding balance, leaving ~~$220.0~~$283.0 million available. Additionally, the Company has certain letters of credit totaling ~~$23.6~~$23.4 million, which do not reduce the Revolving Facility's available balance.

Covenants

Under the terms of the Revolving Facility, the Company is subject to a maximum consolidated net leverage ratio of 4.50:1.00 and a minimum consolidated interest coverage ratio of 2.50:1.00. The Company's debt agreements contain other covenants and events of default that are customary for similar agreements and may limit our ability to take various actions including our ability to pay a dividend or repurchase our stock.

If we fail to perform our obligations under these and other covenants, the lenders' credit commitment could be terminated and any outstanding borrowings, together with accrued interest, under the Revolving Facility could be declared immediately due and payable. The Company has a cross default provision that applies to our indebtedness having a principal amount in excess of $35.0 million.

As of ~~March 31,~~September 30, 2022, the Company was 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.

7. Commitments and Contingent Liabilities

Legal Matters

The Company is a party to certain pending and threatened claims, including matters related to commercial disputes, employment claims, personal injury claims, common law tort claims and environmental claims. Although the ultimate outcome of these claims cannot be ascertained at this time, it is reasonably possible that some portion of these claims could be resolved

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unfavorably to the Company. Management of the Company believes that any liability which may arise from these claims would likely not have a material adverse impact on our consolidated financial statements. SunCoke's threshold for disclosing material environmental legal proceedings involving a government authority where potential monetary sanctions are involved is $1.0 million.

Black Lung Benefit Liabilities

The Company has obligations related to coal workers’ pneumoconiosis, or black lung, benefits to certain of its former coal miners and their dependents. Such benefits are provided for under Title IV of the Federal Coal Mine and Safety Act of 1969 and subsequent amendments, as well as for black lung benefits provided in the states of Virginia, Kentucky and West Virginia pursuant to workers’ compensation legislation. The Patient Protection and Affordable Care Act (“PPACA”), which was implemented in 2010, amended previous legislation related to coal workers’ black lung obligations. PPACA provides for the automatic extension of awarded lifetime benefits to surviving spouses and changes the legal criteria used to assess and award claims.

We adjust our liability each year based upon actuarial calculations of our expected future payments for these benefits. Our independent actuarial consultants calculate the present value of the estimated black lung liability annually based on

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actuarial models utilizing our population of former coal miners, historical payout patterns of both the Company and the industry, actuarial mortality rates, disability incidence, medical costs, death benefits, dependents, discount rates and the current federally mandated payout rates. The estimated liability may be impacted by future changes in the statutory mechanisms, modifications by court decisions and changes in filing patterns driven by perceptions of success by claimants and their advisors, the impact of which cannot be estimated. The estimated liability was $~~64.1~~65.7 million and $63.3 million at ~~March 31,~~September 30, 2022 and December 31, 2021, respectively, of which the current portion of $5.4 million was included in accrued liabilities on the Consolidated Balance Sheets in both periods.

On February 1, 2013, SunCoke obtained commercial insurance for black lung claims in excess of a deductible for employees with a last date of employment after that date. Also during 2013, we were reauthorized to continue to self-insure black lung liabilities incurred prior to February 1, 2013 by the U.S. Department of Labor's Division of Coal Mine Workers' Compensation ("DCMWC") in exchange for $8.4 million of collateral. In July 2019, the DCMWC required that SunCoke, along with a number of other companies, file an application and supporting documentation for reauthorization to self-insure our legacy black lung obligations incurred prior to February 1, 2013. The Company provided the requested information in the fourth quarter of 2019. The DCMWC subsequently notified the Company in a letter dated February 21, 2020 that the Company was reauthorized to self-insure certain of its black lung obligations; however, the reauthorization is contingent upon the Company providing collateral of $40.4 million to secure certain of its black lung obligations. This proposed collateral requirement is a substantial increase from the $8.4 million in collateral that the Company currently provides to secure these self-insured black lung obligations. The reauthorization process provided the Company with the right to appeal the security determination. SunCoke exercised its right to appeal the DCMWC’s security determination and provided additional information supporting the Company’s position in May 2020 and February 2021. If the Company’s appeal is unsuccessful, the Company may be required to provide additional collateral to receive the self-insurance reauthorization from the DCMWC, which could potentially reduce the Company’s liquidity.

8. Share-Based Compensation

Equity Classified Awards

During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, the Company granted share-based compensation to eligible participants under the SunCoke Energy, Inc. Long-Term Performance Enhancement Plan (“SunCoke LTPEP”). All awards vest immediately upon a qualifying termination of employment, as defined by the SunCoke LTPEP, following a change in control.

On May 12, 2022, the Company adopted the SunCoke Energy, Inc. Omnibus Long-Term Incentive Plan (the "Omnibus Plan"). The Omnibus Plan provides for the grant of equity-based awards including stock options and share units, or restricted stock, to the Company’s Board of Directors and certain employees selected for participation in the plan. The total number of shares of common stock authorized for issuance under the Omnibus Plan consists of 2,700,000 new shares in addition to shares previously authorized for issuance under the SunCoke Energy Inc. Retainer Stock Plan for Outside Directors ("Retainer Stock Plan") and the SunCoke LTPEP. As of the effective date, new awards will no longer be granted under the Retainer Stock Plan or SunCoke LTPEP. The awards previously granted under these two plans were not modified or impacted by the adoption of the Omnibus Plan.

Restricted Stock Units Settled in Shares

~~The~~During the nine months ended September 30, 2022, the Company issued ~~309,721 stock-settled~~335,728 restricted stock units (“RSUs”) to certain employees and members of the Board of Directors, to be settled in shares of the Company’s common ~~stock during the three months ended March 31, 2022.~~stock. The weighted average grant date fair value was ~~$7.66~~$7.57 per unit, ~~and was~~ based on the closing price of our common stock on the ~~day~~date of ~~the~~ grant. ~~The~~

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RSUs granted to employees vest and become payable in 3three annual installments beginning one year from the date of grant. RSUs granted to the Company's Board of Directors vest upon grant, but are paid out upon termination of board service.

Performance Share Units

Performance share units (“PSUs”) were granted to certain employees to be settled in shares of the Company's common stock during the ~~three~~nine months ended ~~March 31,~~September 30, 2022, for which the service period will end on December 31, 2024, and will vest and become payable during the first quarter of 2025. The service period for certain retiree eligible participants is accelerated. The Company granted the following PSUs:

Shares Weighted Average Grant Date Fair Value per Unit
PSUs(1)(2)
154,860 $ 8.40


	Shares	Weighted Average Grant Date Fair Value per Unit
PSUs(1)(2)	154,860	$	7.46

(1)~~The~~Performance measures for the PSU awards are split 50/50 between the Company's ~~three year~~three-year cumulative Adjusted EBITDA (as defined in Note 12) ~~performance measure~~ and the Company's three-year average pre-tax return on capital ~~performance measure~~ for its coke and logistics businesses and unallocated corporate expenses.

(2)The number of PSUs ultimately awarded will be determined by the above performance measures versus targets and the Company's three-year total shareholder return (“TSR”) as compared to the TSR of the companies making up the Nasdaq Iron & Steel Index (“TSR Modifier”). The TSR Modifier can impact the payout between 80 percent and 120 percent of the Company's final performance measure results.

~~The~~Each PSU award may vest between 25 percent and 200 percent of the original units granted. The fair value of the PSUs granted during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 is based on the closing price of our common stock on the date of grant as well as a Monte Carlo simulation for the valuation of the TSR Modifier.

~~Table~~ The grant date valuation of ~~Contents~~

the TSR Modifier is adjusted during the period if the Company's performance measure results drive the calculation of final vested units granted above the maximum percentage.

Liability Classified Awards

Restricted Stock Units Settled in Cash

During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, the Company issued ~~247,123~~250,615 restricted stock units to certain employees to be settled in cash (“Cash RSUs”), which vest and become payable in three annual installments beginning one year from the grant ~~date and are part of the SunCoke LTPEP.~~date. The weighted average grant date fair value of the Cash RSUs granted during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 was ~~$7.54~~$7.56 per unit, ~~and was~~ based on the closing price of our common stock on the ~~day~~date of grant.

The Cash ~~RSU~~RSUs liability is adjusted based on the closing price of our common stock at the end of each quarterly period and was ~~$1.1~~$1.3 million at ~~March 31,~~September 30, 2022 and $1.9 million at December 31, 2021.

Cash Incentive Awards

The Company also granted long-term cash compensation to eligible participants under the SunCoke Energy, Inc. Long-Term Cash Incentive Plan (“SunCoke LTCIP”), which became effective January 1, 2016. The SunCoke LTCIP is designed to provide for performance-based, cash-settled awards. All awards vest immediately upon a qualifying termination of employment, as defined by the SunCoke LTCIP, following a change in control. As of May 12, 2022, performance-based, cash-settled awards will be granted under the new Omnibus Plan. The awards previously granted under the SunCoke LTCIP were not modified or impacted by the adoption of the Omnibus Plan. The cash incentive award liability will continue to be included in accrued liabilities and other deferred credits and liabilities on the Consolidated Balance Sheets under the Omnibus Plan.

The Company issued awards with an aggregate grant date fair value of approximately $2.0 million during the ~~three~~nine months ended ~~March 31,~~September 30, 2022, for which the service period will end on December 31, 2024 and will vest and become payable during the first quarter of 2025. The service period for certain retiree eligible participants is accelerated. The performance measures for these awards are split 50/50 between the Company's three-year cumulative Adjusted EBITDA ~~performance~~ and the Company's three-year average pre-tax return on capital for its coke and logistics businesses and unallocated corporate expenses.

The cash incentive award liability at ~~March 31,~~September 30, 2022 was adjusted based on the Company's three-year cumulative Adjusted EBITDA ~~performance~~ and adjusted average pre-tax return on capital for the Company's coke and logistics businesses and unallocated corporate expenses. The cash incentive award liability was ~~$4.6~~$7.5 million at ~~March 31,~~September 30, 2022 and $4.1 million at December 31, 2021.

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Summary of Share-Based Compensation Expense

Below is a summary of the compensation expense, unrecognized compensation costs, and the period for which the unrecognized compensation cost is expected to be recognized over:


		Three Months Ended March 31,									Three Months Ended September 30,					Nine Months Ended September 30,
		2022		2021					March 31, 2022					2022		2021		2022		2021		September 30, 2022
		Compensation Expense(1)				Unrecognized Compensation Cost	Weighted Average Remaining Recognition Period	Compensation Expense(1)										Unrecognized Compensation Cost		Weighted Average Remaining Recognition Period
		(Dollars in millions)					(Years)	(Dollars in millions)												(Years)
Equity Awards:	Equity Awards:												Equity Awards:

RSUs	RSUs	$	0.3	$	0.3				$	2.4		1.2	RSUs	$	0.6	$	0.7	$	1.6	$	1.7	$	1.1	1.0
PSUs	PSUs	0.7		0.1					$	3.7		1.1	PSUs	1.2		1.2		3.0		2.4		$	1.5	1.1
Total equity awards	Total equity awards	$	1.0	$	0.4								Total equity awards	$	1.8	$	1.9	$	4.6	$	4.1
Liability Awards:	Liability Awards:												Liability Awards:
Cash RSUs	Cash RSUs	$	0.7	$	0.8				$	3.1		2.1	Cash RSUs	$	0.1	$	0.2	$	1.0	$	1.3	$	1.4	1.9
Cash incentive award	Cash incentive award	1.0		0.2					$	5.7		1.5	Cash incentive award	1.5		1.1		3.9		2.4		$	3.1	1.4
Total liability awards	Total liability awards	$	1.7	$	1.0								Total liability awards	$	1.6	$	1.3	$	4.9	$	3.7

(1)Compensation expense recognized by the Company is included in selling, general and administrative expenses on the Consolidated Statements of Income.

The Company issued ~~$0.1~~$0.4 million and ~~$0.1~~$0.2 million of share-based compensation to the Company's Board of Directors during ~~both~~ the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and 2021, respectively.

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9. Earnings per Share

Basic earnings per share (“EPS”) has been computed by dividing net income attributable to SunCoke Energy, Inc. by the weighted average number of shares outstanding during the period. Except where the result would be anti-dilutive, diluted EPS has been computed to give effect to share-based compensation awards using the treasury stock method.

The following table sets forth the reconciliation of the weighted-average number of common shares used to compute basic EPS to those used to compute diluted EPS:


		Three Months Ended March 31,			Three Months Ended September 30,			Nine Months Ended September 30,
		2022	2021				2022	2021	2022	2021

		(Shares in millions)		(Shares in millions)
Weighted-average number of common shares outstanding-basic	Weighted-average number of common shares outstanding-basic	83.2	82.8			Weighted-average number of common shares outstanding-basic	83.9	83.0	83.8	83.0
Add: Effect of dilutive share-based compensation awards	Add: Effect of dilutive share-based compensation awards	1.0	0.7			Add: Effect of dilutive share-based compensation awards	0.8	0.8	0.7	0.6
Weighted-average number of shares-diluted	Weighted-average number of shares-diluted	84.2	83.5			Weighted-average number of shares-diluted	84.7	83.8	84.5	83.6

The following table shows equity awards that are excluded from the computation of diluted earnings per share as the shares would have been anti-dilutive:


		Three Months Ended March 31,			Three Months Ended September 30,			Nine Months Ended September 30,
		2022	2021				2022	2021	2022	2021

		(Shares in millions)		(Shares in millions)
Stock options	Stock options	1.8	2.9			Stock options	1.6	2.2	1.7	2.8

Total	Total	1.8	2.9			Total	1.6	2.2	1.7	2.8

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10. Fair Value Measurement

The Company measures certain financial and non-financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received from the sale of an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. Fair value disclosures are reflected in a three-level hierarchy, maximizing the use of observable inputs and minimizing the use of unobservable inputs.

The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows:

•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.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Certain assets and liabilities are measured at fair value on a recurring basis. The Company's cash and cash equivalents were measured at fair value at ~~March 31,~~September 30, 2022 and December 31, 2021 based on quoted prices in active markets for identical assets. These inputs are classified as Level 1 within the valuation hierarchy.

Certain Financial Assets and Liabilities not Measured at Fair Value

At ~~March 31,~~September 30, 2022 and December 31, 2021, the fair value of the Company’s total debt was estimated to be $~~612.0~~460.2 million and $625.1 million, respectively, compared to a carrying amount of $~~641.2~~576.6 million and $627.0 million, respectively. The fair value was estimated by management based upon estimates of debt pricing provided by financial institutions, which are considered Level 2 inputs.

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11. Revenue from Contracts with Customers

Cokemaking

Our blast furnace coke sales are largely made pursuant to long-term, take-or-pay coke sales agreements primarily with 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 take-or-pay provisions in our agreements require our customers to purchase coke volumes as specified in the agreements or pay the contract price for any tonnage they do not purchase. The take-or-pay provisions of our agreements also require us to deliver minimum annual tonnage. As of ~~March 31,~~September 30, 2022, our coke sales agreements have approximately ~~13.9~~12.3 million tons of unsatisfied or partially unsatisfied performance obligations, which are expected to be delivered over a weighted average remaining contract term of approximately six years.

Foundry coke sales are generally made under annual agreements with our customers for an agreed upon price and do not contain take-or-pay volume commitments. Export coke sales are generally made on a spot basis at the current market price.

Revenues on all coke sales are recognized when performance obligations to our customers are satisfied in an amount that reflects the consideration that we expect to receive in exchange for the coke.

Logistics

In our logistics business, handling and/or mixing services are provided to steel, coke (including some of our domestic cokemaking facilities), electric utility, coal producing and other manufacturing based customers. Materials are transported in numerous ways, including rail, truck, barge or ship. We do not take possession of materials handled, but rather act as intermediaries between our customers and end users, deriving our revenues from services provided on a per ton basis. The handling and mixing services consist primarily of two performance obligations, unloading and loading of materials. Revenues are recognized when the customer receives the benefits of the services provided, in an amount that reflects the consideration that we will receive in exchange for those services.

The long-term, take-or-pay agreement between Convent Marine Terminal ("CMT") and Javelin Global Commodities (UK) Ltd. ("Javelin") for coal handling and storage was extended during the first quarter of 2022, which includes 4 million take-or-pay tons in both 2023 and 2024. Estimated take-or-pay revenue of approximately $~~47.5~~48.5 million from all of our ~~multi-year~~multi-

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year logistics contracts is expected to be recognized over the next 3four years for unsatisfied or partially unsatisfied performance obligations as of ~~March 31,~~September 30, 2022.

Disaggregated Sales and Other Operating Revenue

The following table provides disaggregated sales and other operating revenue by product or service, excluding intersegment revenues:


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021					2022		2021		2022		2021

		(Dollars in millions)				(Dollars in millions)
Sales and other operating revenue:	Sales and other operating revenue:							Sales and other operating revenue:
Cokemaking	Cokemaking	$	395.9	$	320.1			Cokemaking	$	468.5	$	325.4	$	1,319.4	$	969.7
Energy	Energy	14.7		14.8				Energy	17.3		14.1		49.0		42.7
Logistics	Logistics	18.7		15.9				Logistics	20.1		16.9		58.4		49.3
Operating and licensing fees	Operating and licensing fees	9.4		8.5				Operating and licensing fees	8.9		9.2		27.9		26.7
Other	Other	1.1		0.6				Other	2.0		0.9		3.8		2.3
Sales and other operating revenue	Sales and other operating revenue	$	439.8	$	359.9			Sales and other operating revenue	$	516.8	$	366.5	$	1,458.5	$	1,090.7

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The following tables provide disaggregated sales and other operating revenue by customer:


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021			2022		2021		2022		2021

		(Dollars in millions)					(Dollars in millions)
Sales and other operating revenue:	Sales and other operating revenue:					Sales and other operating revenue:
Cliffs Steel	Cliffs Steel	$	264.4	255.7		Cliffs Steel	$	302.7	240.4		861.4		749.1
U.S. Steel	U.S. Steel	60.5		51.0		U.S. Steel	75.2		54.0		209.8		157.9
Other	Other	114.9		53.2		Other	138.9		72.1		387.3		183.7
Sales and other operating revenue	Sales and other operating revenue	$	439.8	$	359.9	Sales and other operating revenue	$	516.8	$	366.5	$	1,458.5	$	1,090.7

12. Business Segment Information

The Company reports its business through 3three 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, Kanawha River Terminal ("KRT"), Lake Terminal, which provides services to our Indiana Harbor cokemaking facility, and Dismal River Terminal ("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, which also includes activity from our legacy coal mining business.

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

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The following table includes Adjusted EBITDA, as defined below, 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,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021					2022		2021		2022		2021

		(Dollars in millions)				(Dollars in millions)
Sales and other operating revenue:	Sales and other operating revenue:							Sales and other operating revenue:
Domestic Coke	Domestic Coke	$	411.6	$	335.3			Domestic Coke	$	487.7	$	340.3	$	1,371.8	$	1,014.2
Brazil Coke	Brazil Coke	9.4		8.5				Brazil Coke	8.9		9.2		27.9		26.7
Logistics	Logistics	18.8		16.1				Logistics	20.2		17.0		58.8		49.8
Logistics intersegment sales	Logistics intersegment sales	7.5		6.6				Logistics intersegment sales	7.4		6.3		22.2		20.3
Elimination of intersegment sales	Elimination of intersegment sales	(7.5)		(6.6)				Elimination of intersegment sales	(7.4)		(6.3)		(22.2)		(20.3)
Total sales and other operating revenues	Total sales and other operating revenues	$	439.8	$	359.9			Total sales and other operating revenues	$	516.8	$	366.5	$	1,458.5	$	1,090.7

Adjusted EBITDA:	Adjusted EBITDA:							Adjusted EBITDA:
Domestic Coke	Domestic Coke	$	76.0	$	63.5			Domestic Coke	$	76.6	$	65.1	$	216.9	$	190.0
Brazil Coke	Brazil Coke	4.2		4.5				Brazil Coke	3.3		4.5		11.4		13.0
Logistics	Logistics	12.6		10.9				Logistics	12.9		11.6		38.0		33.9
Corporate and Other, net	Corporate and Other, net	(9.0)		(8.3)				Corporate and Other, net	(9.1)		(7.3)		(27.5)		(24.4)
Total Adjusted EBITDA	Total Adjusted EBITDA	$	83.8	$	70.6			Total Adjusted EBITDA	$	83.7	$	73.9	$	238.8	$	212.5

Depreciation and amortization expense:	Depreciation and amortization expense:							Depreciation and amortization expense:
Domestic Coke	Domestic Coke	$	31.3	$	28.7			Domestic Coke	$	31.7	$	28.8	$	94.9	$	87.9
Brazil Coke	Brazil Coke	—		0.1				Brazil Coke	—		0.1		0.1		0.3
Logistics	Logistics	3.6		3.3				Logistics	3.7		3.3		10.9		9.9
Corporate and Other	Corporate and Other	0.3		0.3				Corporate and Other	0.3		0.3		0.8		0.9
Total depreciation and amortization expense	Total depreciation and amortization expense	$	35.2	$	32.4			Total depreciation and amortization expense	$	35.7	$	32.5	$	106.7	$	99.0

Capital expenditures:	Capital expenditures:							Capital expenditures:
Domestic Coke	Domestic Coke	$	11.1	$	16.4			Domestic Coke	$	20.6	$	16.4	$	51.8	$	43.8
Brazil Coke	Brazil Coke	0.1		0.1				Brazil Coke	—		—		0.1		0.1
Logistics	Logistics	1.7		3.6				Logistics	0.5		2.0		3.2		8.2

Corporate and Other								Corporate and Other	0.6		—		0.6		—
Total capital expenditures	Total capital expenditures	$	12.9	$	20.1			Total capital expenditures	$	21.7	$	18.4	$	55.7	$	52.1

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


		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021

		(Dollars in millions)					(Dollars in millions)
Segment assets	Segment assets					Segment assets
Domestic Coke	Domestic Coke	$	1,450.5	$	1,370.6	Domestic Coke	$	1,444.3	$	1,370.6
Brazil Coke	Brazil Coke	19.4		18.0		Brazil Coke	12.9		18.0
Logistics	Logistics	203.5		202.9		Logistics	193.7		202.9
Corporate and Other	Corporate and Other	32.3		23.9		Corporate and Other	28.9		23.9
Total assets	Total assets	$	1,705.7	$	1,615.4	Total assets	$	1,679.8	$	1,615.4

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, restructuring costs, ~~and~~ gains or losses on extinguishment of ~~debt.~~debt and transaction costs ("Adjusted EBITDA"). 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

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performance. EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, and they should not be

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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.

Reconciliation of Non-GAAP Financial Measures

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,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021					2022		2021		2022		2021
		(Dollars in millions)				(Dollars in millions)
Net income attributable to SunCoke Energy, Inc.	Net income attributable to SunCoke Energy, Inc.	$	29.5	$	16.5			Net income attributable to SunCoke Energy, Inc.	$	41.4	$	23.0	$	88.9	$	30.7
Add: Net income attributable to noncontrolling interests	Add: Net income attributable to noncontrolling interests	1.1		1.7				Add: Net income attributable to noncontrolling interests	1.1		1.1		3.2		4.1
Net income	Net income	$	30.6	$	18.2			Net income	$	42.5	$	24.1	$	92.1	$	34.8
Add:	Add:							Add:
Depreciation and amortization expense	Depreciation and amortization expense	35.2		32.4				Depreciation and amortization expense	35.7		32.5		106.7		99.0
Interest expense, net	Interest expense, net	8.0		12.7				Interest expense, net	8.0		7.9		24.3		34.8
Income tax expense		10.0		7.3
Loss on extinguishment of debt								Loss on extinguishment of debt	—		—		—		31.9
Income tax (benefit) expense								Income tax (benefit) expense	(2.9)		9.4		14.3		12.0
Transaction costs(1)								Transaction costs(1)	0.4		—		1.4		—
Adjusted EBITDA	Adjusted EBITDA	$	83.8	$	70.6			Adjusted EBITDA	$	83.7	$	73.9	$	238.8	$	212.5
Subtract: Adjusted EBITDA attributable to noncontrolling interests(1)		2.1		2.6
Subtract: Adjusted EBITDA attributable to noncontrolling interests(2)								Subtract: Adjusted EBITDA attributable to noncontrolling interests(2)	2.1		2.1		6.2		7.0
Adjusted EBITDA attributable to SunCoke Energy, Inc.	Adjusted EBITDA attributable to SunCoke Energy, Inc.	$	81.7	$	68.0			Adjusted EBITDA attributable to SunCoke Energy, Inc.	$	81.6	$	71.8	$	232.6	$	205.5

(1)Costs incurred as part of the granulated pig iron project with U.S. Steel.

(2)Reflects noncontrolling interest in Indiana Harbor.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 (the "Quarterly Report on Form 10-Q") contains certain forward-looking statements, ~~of expected future developments,~~ as defined in the Private Securities Litigation Reform Act of 1995. This discussion contains forward-looking statements about our business, operations and industry that involve risks and uncertainties, such as statements regarding our plans, objectives, expected future developments, expectations and ~~intentions. Our~~intentions, and they involve known and unknown risks that are difficult to predict. 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 in our filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2021 (the "Annual Report on Form 10-K"), and as updated in this Quarterly Report on Form 10-Q, and ~~under~~other quarterly and current reports, which are on file with the SEC and are available at the SEC's website (www.sec.gov). Additionally, please see our “Cautionary Statement Concerning Forward-Looking ~~Statements.~~Statements” located elsewhere in this Quarterly Report on Form 10-Q.

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 the United States generally accepted accounting principles (“GAAP”) and certain other financial data that is prepared using a non-GAAP measure. For a reconciliation of the non-GAAP measure to its most comparable GAAP component, see “Non-GAAP Financial Measures” at the end of this Item and Note 12 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 flow.

Overview

SunCoke Energy, Inc. (“SunCoke Energy,” “SunCoke,” “Company,” “we,” “our” and “us”) is the largest independent producer of high-quality coke in the Americas, as measured by tons of coke produced each year, and has more than 60 years of coke production experience. We have designed, developed and built, and we currently own and operate, five cokemaking facilities in the United States (“U.S.”), which have collective nameplate capacity to produce approximately 4.2 million tons of blast furnace coke per year. Additionally, we have designed and currently operate one cokemaking facility in Brazil under licensing and operating agreements on behalf of ArcelorMittal Brasil S.A. (“ArcelorMittal Brazil”), which has approximately 1.7 million tons of annual cokemaking capacity. Our cokemaking ovens utilize efficient, modern heat recovery technology designed to combust the coal’s volatile components liberated during the cokemaking process and use the resulting heat to create steam or electricity for sale. The majority of our coke is used in the blast furnace production of steel and is sold under long-term, take-or-pay agreements with our steelmaking customers. Our coke is also used in the foundry production of casted iron as well as exported to international customers seeking high-quality products for their blast furnaces.

Market Discussion

The ~~ongoing~~ global coke trade imbalance, driven by a decrease in global coke supply and certain geopolitical events, including the Russian invasion of Ukraine and the related sanctions imposed on Russia ~~during the first quarter of~~in 2022, ~~have~~ increased demand for and pricing of export coke out of the U.S. ~~This increase in demand and~~during the ~~related escalating coke prices have~~first half of 2022, which benefited our export coke ~~sales~~sales. Economic uncertainty, driven by inflation and commodity pricing volatility during the third quarter, has resulted in a decrease in price of and demand for global export coke as compared to the first ~~quarter~~half of 2022. Export coke tonnage is produced utilizing capacity in excess of tons contracted in our long-term, take-or-pay Domestic Coke sales agreements, which are not impacted by global coke trade imbalance and the ~~rise~~fluctuation of coke prices.

During the ~~first quarter of~~nine months ended September 30, 2022, natural gas prices have remained high, continuing to increase global demand for coal to meet European energy needs. Additionally, geopolitical events discussed above have further contributed to the increased coal demand in Europe. Higher demand has driven up the benchmark price for coal delivery into northwest Europe. The increase in global demand for coal has benefited certain CMT customers and is expected to continue to favorably impact export coal volumes through CMT as well as our handling rates.

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~~First~~Third Quarter Key Financial Results

Our consolidated results of operations were as follows:


		Three Months Ended March 31,				Increase (Decrease)			Three Months Ended September 30,						Increase (Decrease)			Nine Months Ended September 30,								Increase (Decrease)
		2022		2021						2022				2021			Increase (Decrease)			2022				2021				Increase (Decrease)
		(Dollars in millions)						(Dollars in millions)
Net income	Net income	$	30.6	$	18.2	$	12.4				Net income	$	42.5		$	24.1				$	18.4			$	92.1			$	34.8			$	57.3

Net cash provided by operating activities	Net cash provided by operating activities	$	22.7	$	64.8	$	(42.1)				Net cash provided by operating activities	$	54.4		$	79.4		$	(25.0)			$	120.6			$	184.0			$	(63.4)
Adjusted EBITDA	Adjusted EBITDA	$	83.8	$	70.6	$	13.2				Adjusted EBITDA	$	83.7		$	73.9		$	9.8			$	238.8			$	212.5			$	26.3

~~Results~~Operating results for the three and nine months ended ~~March 31,~~September 30, 2022 reflect a strong ~~start to the year. The improved~~ operating ~~results as compared to the same prior year period were~~performance, primarily driven by favorable pricing on ~~our~~ export ~~coke sales.~~coke. Operating cash flows during the current year period primarily reflect ~~the impact of~~ higher coal ~~prices and timing of payments.~~ prices. See detailed analysis of the quarter's results throughout the MD&A. See Note 12 to our consolidated financial statements for the definition and reconciliation of Adjusted EBITDA, a non-GAAP measure.

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. 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

~~There were no unusual events during~~•2021 Debt Refinancing. During the ~~three months~~second quarter of 2021, the Company refinanced its debt obligations. The Company issued $500.0 million of 4.875 percent 2029 Senior Notes, amended and extended the maturity of its Revolving Facility to June 2026 and reduced the Revolving Facility capacity by $50.0 million to $350.0 million. 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. As a result of the debt refinancing and revolver amendment, the year ended ~~March~~December 31, ~~2022 significantly impacting comparability to~~2021 included a loss on extinguishment of debt on the ~~prior year period.~~Consolidated Statement of Operations 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.

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Results of Operations

The following table sets forth amounts from the Consolidated Statements of Income for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021, respectively:


		Three Months Ended March 31,				Increase (Decrease)			Three Months Ended September 30,						Increase (Decrease)			Nine Months Ended September 30,								Increase (Decrease)
		2022		2021							2022			2021			Increase (Decrease)			2022				2021				Increase (Decrease)

		(Dollars in millions)						(Dollars in millions)
Revenues	Revenues									Revenues
Sales and other operating revenue	Sales and other operating revenue	$	439.8	$	359.9	$	79.9			Sales and other operating revenue		$	516.8		$	366.5				$	150.3			$	1,458.5			$	1,090.7			$	367.8
Costs and operating expenses	Costs and operating expenses									Costs and operating expenses
Cost of products sold and operating expenses	Cost of products sold and operating expenses	338.0		274.0		64.0				Cost of products sold and operating expenses		413.4			277.3			136.1				1,163.2				829.9				333.3
Selling, general and administrative expenses	Selling, general and administrative expenses	18.0		15.3		2.7				Selling, general and administrative expenses		20.1			15.3			4.8				57.9				48.3				9.6
Depreciation and amortization expense	Depreciation and amortization expense	35.2		32.4		2.8				Depreciation and amortization expense		35.7			32.5			3.2				106.7				99.0				7.7
Total costs and operating expenses	Total costs and operating expenses	391.2		321.7		69.5				Total costs and operating expenses		469.2			325.1			144.1				1,327.8				977.2				350.6
Operating income	Operating income	48.6		38.2		10.4				Operating income		47.6			41.4			6.2				130.7				113.5				17.2
Interest expense, net	Interest expense, net	8.0		12.7		(4.7)				Interest expense, net		8.0			7.9			0.1				24.3				34.8				(10.5)
Income before income tax expense		40.6		25.5		15.1
Income tax expense		10.0		7.3		2.7
Loss on extinguishment of debt										Loss on extinguishment of debt		—			—			—				—				31.9				(31.9)
Income before income tax (benefit) expense										Income before income tax (benefit) expense		39.6			33.5			6.1				106.4				46.8				59.6
Income tax (benefit) expense										Income tax (benefit) expense		(2.9)			9.4			(12.3)				14.3				12.0				2.3
Net income	Net income	30.6		18.2		12.4				Net income		42.5			24.1			18.4				92.1				34.8				57.3
Less: Net income attributable to noncontrolling interests	Less: Net income attributable to noncontrolling interests	1.1		1.7		(0.6)				Less: Net income attributable to noncontrolling interests		1.1			1.1			—				3.2				4.1				(0.9)
Net income attributable to SunCoke Energy, Inc.	Net income attributable to SunCoke Energy, Inc.	$	29.5	$	16.5	$	13.0			Net income attributable to SunCoke Energy, Inc.		$	41.4		$	23.0		$	18.4			$	88.9			$	30.7			$	58.2

Sales and Other Operating Revenue and Costs of Products Sold and Operating Expenses. Sales and other operating revenue and costs of products sold and operating expenses increased for the three and nine months ended ~~March 31,~~September 30, 2022 compared to the same prior year ~~period,~~periods, primarily driven by the pass through of higher coal prices in our Domestic Coke segment. Revenues further benefited from favorable pricing on export coke sales in our Domestic Coke segment.

Selling, General and Administrative Expenses. Selling, general and administrative expenses increased ~~slightly~~ during the three and nine months ended ~~March 31,2022~~September 30, 2022 as compared to the same prior year ~~period,~~periods, driven by higher employee related expenses,

~~Table~~ higher cost of ~~Contents~~

professional services and transaction costs incurred as part of the granulated pig iron project. During the nine months ended September 30, 2022, these costs were partially offset by a ~~$0.9~~$1.0 million favorable change in period-over-period, mark-to-market adjustments on deferred compensation as compared to the same prior year period.

Depreciation and Amortization Expense. Depreciation and amortization expense increased during the three and nine months ended ~~March 31,~~September 30, 2022 as a result of depreciable assets placed into service since the prior year period.

Interest Expense, Net. Interest expense, net, benefited during the ~~three~~nine months ended ~~March 31,~~September 30, 2022 from a lower interest rate on the ~~Senior Notes,~~outstanding senior notes, which decreased to 4.875 percent from 7.500 percent as a result of the debt refinancing during the second quarter of ~~2021.~~2021, as well as lower average debt balances during the current year period.

Income Tax (Benefit) Expense. Income tax (benefit) expense during the three and nine months ended ~~March 31,~~September 30, 2022 ~~reflects~~primarily reflect the ~~impacts~~release of ~~revaluation of certain~~a valuation allowance established on the deferred tax ~~liabilities due~~assets attributable to ~~changes in~~existing foreign tax credit carryforwards and the ~~apportioned state tax rates,~~recognition of research and development credits, resulting in ~~a benefit~~benefits of ~~approximately $1.0 million.~~ $11.3 million and $4.6 million, respectively.See Note 4 to our consolidated financial statements for further detail.

Noncontrolling Interest. Net income 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.

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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 CMT, located in Convent, Louisiana, KRT, located in Ceredo and Belle, West Virginia, Lake Terminal, located in East Chicago, Indiana, and DRT, located in Vansant, Virginia. Lake Terminal and DRT are located adjacent to our Indiana Harbor and Jewell cokemaking facilities, respectively.

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

Management believes Adjusted EBITDA is an important measure of operating performance, which is used 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. See Note 12 to our consolidated financial statements.

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Segment Financial and Operating Data

The following tables set forth financial and operating data:


		Three Months Ended March 31,						Increase (Decrease)				Three Months Ended September 30,							Increase (Decrease)				Nine Months Ended September 30,										Increase (Decrease)
		2022			2021									2022				2021				Increase (Decrease)				2022					2021					Increase (Decrease)

		(Dollars in millions)									(Dollars in millions)
Sales and other operating revenues:	Sales and other operating revenues:												Sales and other operating revenues:
Domestic Coke	Domestic Coke	$	411.6		$	335.3		$	76.3				Domestic Coke		$	487.7			$	340.3						$	147.4				$	1,371.8				$	1,014.2				$	357.6
Brazil Coke	Brazil Coke	9.4			8.5			0.9					Brazil Coke		8.9				9.2				(0.3)					27.9					26.7					1.2
Logistics	Logistics	18.8			16.1			2.7					Logistics		20.2				17.0				3.2					58.8					49.8					9.0
Logistics intersegment sales	Logistics intersegment sales	7.5			6.6			0.9					Logistics intersegment sales		7.4				6.3				1.1					22.2					20.3					1.9
Elimination of intersegment sales	Elimination of intersegment sales	(7.5)			(6.6)			(0.9)					Elimination of intersegment sales		(7.4)				(6.3)				(1.1)					(22.2)					(20.3)					(1.9)
Total sales and other operating revenues	Total sales and other operating revenues	$	439.8		$	359.9		$	79.9				Total sales and other operating revenues		$	516.8			$	366.5			$	150.3				$	1,458.5				$	1,090.7				$	367.8
Adjusted EBITDA(1):	Adjusted EBITDA(1):												Adjusted EBITDA(1):
Domestic Coke	Domestic Coke	$	76.0		$	63.5		$	12.5				Domestic Coke		$	76.6			$	65.1			$	11.5				$	216.9				$	190.0				$	26.9
Brazil Coke	Brazil Coke	4.2			4.5			(0.3)					Brazil Coke		3.3				4.5				(1.2)					11.4					13.0					(1.6)
Logistics	Logistics	12.6			10.9			1.7					Logistics		12.9				11.6				1.3					38.0					33.9					4.1
Corporate and Other, net	Corporate and Other, net	(9.0)			(8.3)			(0.7)					Corporate and Other, net		(9.1)				(7.3)				(1.8)					(27.5)					(24.4)					(3.1)
Total Adjusted EBITDA	Total Adjusted EBITDA	$	83.8		$	70.6		$	13.2				Total Adjusted EBITDA		$	83.7			$	73.9			$	9.8				$	238.8				$	212.5				$	26.3
Coke Operating Data:	Coke Operating Data:												Coke Operating Data:
Domestic Coke capacity utilization(2)	Domestic Coke capacity utilization(2)	99		%	101		%	(2)		%			Domestic Coke capacity utilization(2)		101		%		100		%		1		%			100		%			101		%			(1)		%
Domestic Coke production volumes (thousands of tons)	Domestic Coke production volumes (thousands of tons)	975			1,036			(61)					Domestic Coke production volumes (thousands of tons)		1,028				1,041				(13)					3,000					3,131					(131)
Domestic Coke sales volumes (thousands of tons)	Domestic Coke sales volumes (thousands of tons)	962			1,038			(76)					Domestic Coke sales volumes (thousands of tons)		1,022				1,056				(34)					2,991					3,157					(166)
Domestic Coke Adjusted EBITDA per ton(3)	Domestic Coke Adjusted EBITDA per ton(3)	$	79.00		$	61.18		$	17.82				Domestic Coke Adjusted EBITDA per ton(3)		$	74.95			$	61.65			$	13.30				$	72.52				$	60.18				$	12.34
Brazilian Coke production—operated facility (thousands of tons)	Brazilian Coke production—operated facility (thousands of tons)	419			417			2					Brazilian Coke production—operated facility (thousands of tons)		383				426				(43)					1,208					1,268					(60)
Logistics Operating Data:	Logistics Operating Data:												Logistics Operating Data:
Tons handled (thousands of tons)	Tons handled (thousands of tons)	5,236			5,300			(64)					Tons handled (thousands of tons)		5,721				4,940				781					16,766					15,344					1,422

(1)See Note 12 in our consolidated financial statements for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021.

(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.

(3)Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke sales volumes.

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Analysis of Segment Results

Domestic Coke

The following table sets forth year-over-year changes in the Domestic Coke segment's sales and other operating revenues and Adjusted EBITDA results:


		Three Months Ended March 31, 2022 vs. 2021					Three Months Ended September 30, 2022 vs. 2021				Nine Months Ended September 30, 2022 vs. 2021
		Sales and other operating revenue		Adjusted EBITDA					Sales and other operating revenue		Adjusted EBITDA		Sales and other operating revenue		Adjusted EBITDA
		(Dollars in millions)				(Dollars in millions)
Prior year period	Prior year period	$	335.3	$	63.5			Prior year period	$	340.3	$	65.1	$	1,014.2	$	190.0
Volume(1)	Volume(1)	(21.8)		(5.8)				Volume(1)	(10.5)		(4.7)		(50.2)		(14.4)
Price(2)	Price(2)	98.3		23.1				Price(2)	153.8		15.0		400.9		48.9
Operating and maintenance costs(3)	Operating and maintenance costs(3)	N/A		(2.7)				Operating and maintenance costs(3)	N/A		(1.0)		N/A		(10.3)
Energy and other(4)	Energy and other(4)	(0.2)		(2.1)				Energy and other(4)	4.1		2.2		6.9		2.7
Current year period	Current year period	$	411.6	$	76.0			Current year period	$	487.7	$	76.6	$	1,371.8	$	216.9

(1)Volumes during the three and nine months ended September 30, 2022 decreased primarily ~~as a result of~~due to changes in the mix of production and unfavorable weather conditions during the first quarter of 2022 which impacted coal-to-coke yields and resulted in lower production volumes. Timing of export blast furnace coke sales partly offset these decreases in volumes.production.

(2)~~Favorable pricing on export coke sales~~Revenues increased ~~both revenues~~during the three and ~~Adjusted EBITDA. Revenues also increased~~nine months ended September 30, 2022, primarily as a result of the pass through of higher coal prices on our long-term, take-or-pay agreements. Favorable pricing on export coke sales increased both revenues and Adjusted EBITDA during the three and nine months ended September 30, 2022.

(3)Operating and maintenance costs increased as a result of planned maintenance outages.

(4)Energy and other increased as a result of favorable energy pricing at our Haverhill facility.

Logistics

During the three and nine months ended ~~March 31,~~September 30, 2022, sales and other operating revenues, inclusive of intersegment sales were ~~$26.3~~$27.6 million and $81.0 million, respectively, compared to ~~$22.7~~$23.3 million and $70.1 million, respectively, in the corresponding prior year period. Adjusted EBITDA during the three and nine months ended ~~March 31,~~September 30, 2022 was ~~$12.6~~$12.9 million and $38.0 million, respectively, compared to ~~$10.9~~$11.6 million and $33.9 million, respectively, in the corresponding prior year period. Increases in Logistics results as compared to the same prior year periods reflect higher transloading volumes across the terminals and favorable ~~pricing at CMT, driven by the strong export coal market.~~pricing.

Brazil

During the three and nine months ended ~~March 31,~~September 30, 2022, revenues were ~~$9.4~~$8.9 million and ~~Adjusted EBITDA was $4.2~~$27.9 million, respectively, which ~~was~~were comparable to results in the prior periods. Adjusted EBITDA was $3.3 million and $11.4 million, in the three and nine months ended September 30, 2022, respectively, compared to $4.5 million and $13.0 million, respectively, in the corresponding prior year ~~period.~~periods. The decrease in Adjusted EBITDA was primarily due to the absence of production bonuses for meeting certain volume targets.

Corporate and Other

Corporate and Other Adjusted EBITDA was a loss of ~~$9.0~~$9.1 million and $27.5 million for the three and nine months ended ~~March 31,~~September 30, 2022, respectively, and ~~$8.3~~$7.3 million ~~for~~and $24.4 million, respectively, in the corresponding prior year periods. The three and nine months ended ~~March 31, 2021. The three months ended March 31,~~September 30, 2022 ~~was~~were primarily impacted by higher employee related expenses as compared to the same prior year periods and higher cost of professional services. During the nine months ended September 30, 2022, these costs were partially offset by a ~~$0.9~~$1.0 million favorable change in period-over-period, mark-to-market adjustments on deferred compensation as compared to the same prior year period.

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. 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

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thereafter for the foreseeable future. As of ~~March 31,~~September 30, 2022, we had ~~$79.7~~$59.3 million of cash and cash equivalents and ~~$220.0~~$283.0 million of borrowing availability under our Revolving Facility.

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. The amounts involved may be material. Refer to ~~Part~~"Part II Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds."

During the first quarter of 2020, the U.S. Department of Labor's Division of Coal Mine Workers' Compensation (“DCMWC”) requested SunCoke to provide additional collateral of approximately $32 million to secure certain of its black lung obligations. SunCoke exercised its right to appeal the DCMWC’s determination and provided additional information

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supporting the Company’s position in May 2020 and February 2021. If the Company’s appeal is unsuccessful, the Company may be required to provide additional collateral to receive its self-insurance reauthorization from the DCMWC, which could potentially reduce the Company’s liquidity. See further discussion in Note 7 to our consolidated financial statements.

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 ~~three~~nine months ended ~~March 31,~~September 30, 2022 and 2021:


		Three Months Ended March 31,					Nine Months Ended September 30,
		2022		2021			2022		2021

		(Dollars in millions)					(Dollars in millions)
Net cash provided by operating activities	Net cash provided by operating activities	$	22.7	$	64.8	Net cash provided by operating activities	$	120.6	$	184.0
Net cash used in investing activities	Net cash used in investing activities	(13.0)		(20.1)		Net cash used in investing activities	(52.1)		(52.1)
Net cash provided by (used in) financing activities		6.2		(39.1)
Net increase in cash and cash equivalents		$	15.9	$	5.6
Net cash used in financing activities						Net cash used in financing activities	(73.0)		(125.7)
Net (decrease) increase in cash and cash equivalents						Net (decrease) increase in cash and cash equivalents	$	(4.5)	$	6.2

Cash Flows from Operating Activities

Net cash provided by operating activities decreased by ~~$42.1~~$63.4 million to ~~$22.7~~$120.6 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 as compared to the corresponding prior year period. The decrease primarily reflects an unfavorable year-over-year change in primary working capital, which is comprised of accounts receivable, inventories and accounts payable, ~~primarily~~ driven by ~~the timing of coal purchases and~~ higher coal ~~prices~~prices. The current year period was further impacted by higher income tax payments of $9.5 million, primarily due to higher earnings as compared to the ~~same~~corresponding prior year period. ~~This decrease was~~These decreases were partially offset by higher operating results in both our coke and logistics ~~businesses.~~businesses and lower interest payments of $11.2 million, driven by lower interest rates as a result of the debt refinancing that took place during the second quarter of 2021.

Cash Flows from Investing Activities

Net cash used in investing activities ~~decreased by $7.1 million to $13.0~~was $52.1 million for both the ~~three~~nine months ended ~~March 31,~~September 30, 2022 ~~as compared to the corresponding prior year period, driven by timing of payments related to~~and 2021. Both periods primarily reflect ongoing capital expenditures.

Cash Flows from Financing Activities

Net cash ~~provided by~~used in financing activities ~~was $6.2~~decreased by $52.7 million to $73.0 million for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 as compared to ~~$39.1~~the corresponding prior year period. This 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. The current period was further impacted by lower net repayments of $25.6 million made on the Revolving Facility, excluding the impact of funding of the debt refinancing in the prior period, partially offset by $4.4 million of cash ~~used~~distributions made to noncontrolling interests. The Company paid dividends of $16.9 million during the nine months ended September 30, 2022, an increase of $1.8 million as compared to the dividends paid in the corresponding prior year ~~period. The increase was primarily driven by net proceeds of $15.0 million on the revolving facility during the current year~~ period as ~~compared to net repayments~~a result of ~~$32.3 million during~~an increase in the ~~same prior year period.~~dividend per share amount.

Dividends

On ~~February 1,~~August 2, 2022, SunCoke's Board of Directors declared a cash dividend of ~~$0.06~~$0.08 per share of the Company's common stock. This dividend was paid on ~~March~~September 1, 2022, to stockholders of record on ~~February 17,~~August 18, 2022.

Additionally, on ~~May 2,~~October 31, 2022, SunCoke's Board of Directors declared a cash dividend of ~~$0.06~~$0.08 per share of the Company's common stock. This dividend will be paid on ~~June~~December 1, 2022, to stockholders of record on ~~May~~November 18, 2022.

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Covenants

As of ~~March 31,~~September 30, 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 Note 6 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- and stable outlook. In June 2022, Moody’s Investors Service reaffirmed our corporate credit rating of B1 and upgraded the outlook from stable to positive.

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. 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.

Our capital requirements have consisted, and are expected to consist, primarily of:

•Ongoing capital expenditures required to maintain equipment reliability, 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

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to extend their useful lives and also include new equipment that improves the efficiency, reliability or effectiveness of existing assets. 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 grow our business through new markets or 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; and~~permits.

The following table summarizes our capital expenditures:


		Three Months Ended March 31,					Nine Months Ended September 30,
		2022		2021			2022		2021

		(Dollars in millions)					(Dollars in millions)
Ongoing capital	Ongoing capital	$	11.4	$	16.4	Ongoing capital	$	52.4	$	44.6
Expansion capital(1)	Expansion capital(1)	1.5		3.7		Expansion capital(1)	3.3		7.5
Total capital expenditures(2)	Total capital expenditures(2)	$	12.9	$	20.1	Total capital expenditures(2)	$	55.7	$	52.1

(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.

Critical Accounting Policies

There have been no significant changes to our accounting policies during the three and nine months ended ~~March 31,~~September 30, 2022. Please refer to our Annual Report on Form 10-K filed on February 24, 2022 for a summary of these policies.

Recent Accounting Standards

There have been no new accounting standards material to SunCoke Energy, Inc. that have been adopted during the three and nine months ended ~~March 31,~~September 30, 2022.

Non-GAAP Financial Measures

In addition to the GAAP results provided in this Quarterly Report on Form 10-Q, we have provided a non-GAAP financial measure, Adjusted EBITDA. Our management, as well as certain investors, use this non-GAAP measure to analyze

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our current and expected future financial performance. 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 12 in our consolidated financial statements for both the definition of Adjusted EBITDA and its reconciliation from GAAP to the non-GAAP measurement for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021, respectively.

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Guarantor Financial and Non-Financial Disclosures

The Company has an existing shelf registration statement, which was filed on November 8, 2019, upon the expiration of the prior shelf registration statement, for the offering of debt and/or securities on a delayed or continuous basis and is presenting these guarantor financial and non-financial disclosures in connection therewith. The following information has been prepared and presented pursuant to amended SEC Rule 3-10 of Regulation S-X and new SEC Rule 13-01 of Regulation S-X.

For purposes of the following information, SunCoke Energy, Inc. is referred to as “Issuer.” All 100 percent owned subsidiaries of the Company are expected to serve as guarantors of obligations (“Guarantor Subsidiaries”) included in the shelf registration statement, other than the Indiana Harbor partnership and certain of the Company’s corporate financing, international and legacy coal mining subsidiaries ("Non-Guarantors"). These guarantees will be full and unconditional (subject, in the case of the Guarantor Subsidiaries, to customary release provisions as described below) and joint and several.

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 indenture governing the notes having been satisfied; or

•the release, other than the discharge through payments by a Guarantor Subsidiary, from other indebtedness that resulted in the obligation of the Guarantor Subsidiary under the indenture governing the notes.

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The following tables present summarized financial information for the Issuer and the Guarantor Subsidiaries on a combined basis after intercompany balances and transactions between the Issuer and Guarantor Subsidiaries have been eliminated and excluding investment in and equity in earnings from the Non-Guarantor Subsidiaries:


Statements of Income	Statements of Income	Issuer and Guarantor Subsidiaries				Statements of Income	Issuer and Guarantor Subsidiaries
		Three Months Ended March 31, 2022		Year Ended December 31, 2021			Nine Months Ended September 30, 2022		Year Ended December 31, 2021
		(Dollars in millions)					(Dollars in millions)
Revenues	Revenues	$	321.8	$	1,080.7	Revenues	$	1,074.1	$	1,080.7
Costs and operating expenses	Costs and operating expenses	276.0		961.2		Costs and operating expenses	951.0		961.2
Operating income	Operating income	45.8		119.5		Operating income	123.1		119.5
Net income	Net income	$	26.4	$	23.4	Net income	$	80.1	$	23.4


Balance Sheets	Balance Sheets	Issuer and Guarantor Subsidiaries				Balance Sheets	Issuer and Guarantor Subsidiaries
		March 31, 2022		December 31, 2021			September 30, 2022		December 31, 2021
		(Dollars in millions)					(Dollars in millions)
Assets:	Assets:					Assets:
Cash	Cash	$	14.6	$	10.9	Cash	$	12.8	$	10.9
Current receivables from Non-Guarantor subsidiaries	Current receivables from Non-Guarantor subsidiaries	8.3		25.7		Current receivables from Non-Guarantor subsidiaries	8.6		25.7
Other current assets	Other current assets	264.4		175.2		Other current assets	277.0		175.2
Properties, plants and equipment, net	Properties, plants and equipment, net	1,143.1		1,158.2		Properties, plants and equipment, net	1,122.8		1,158.2
Other non-current assets	Other non-current assets	68.9		65.4		Other non-current assets	82.6		65.4
Total assets	Total assets	$	1,499.3	$	1,435.4	Total assets	$	1,503.8	$	1,435.4
Liabilities:	Liabilities:					Liabilities:
Current liabilities	Current liabilities	$	177.3	$	143.2	Current liabilities	$	176.4	$	143.2
Long-term debt and financing obligation	Long-term debt and financing obligation	625.0		610.4		Long-term debt and financing obligation	561.2		610.4
Long-term payable to Non-Guarantor subsidiaries	Long-term payable to Non-Guarantor subsidiaries	200.0		200.0		Long-term payable to Non-Guarantor subsidiaries	200.0		200.0
Other long-term liabilities	Other long-term liabilities	255.8		251.6		Other long-term liabilities	273.4		251.6
Total liabilities	Total liabilities	$	1,258.1	$	1,205.2	Total liabilities	$	1,211.0	$	1,205.2

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

We have made forward-looking statements in this Quarterly Report on Form 10-Q, including, among others, in the sections entitled “Risk Factors,” “Quantitative and Qualitative Disclosures About Market Risk” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements include all statements that are not historical facts and may be identified by the use of forward-looking terminology such as the words “believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “will,” “should” or the negative of these terms or similar expressions. Such forward-looking statements are based on management’s beliefs, expectations and assumptions based upon information currently available, and include, but are not limited to, statements concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, potential growth opportunities (including, among other things, anticipated expansion into the foundry coke market), the influence of competition, and the effects of future legislation or regulations. Forward-looking statements also include statements regarding the potential, assumed, or expected future impacts of COVID-19 and related economic conditions on our business, financial condition and results of operations, and/or potential operating performance. In addition, statements in this Quarterly Report on Form 10-Q concerning future dividend declarations are subject to approval by our Board of Directors and will be based upon circumstances then existing. Forward-looking statements are not guarantees of future performance, but are based upon the current knowledge, beliefs and expectations of SunCoke management, and upon assumptions by SunCoke concerning future conditions, any or all of which ultimately may prove to be inaccurate.

Forward-looking statements involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking statements. You should not put undue reliance on any forward-looking statements. We do not have any intention or obligation to update any forward-looking statement (or its associated cautionary language), whether as a result of new information or future events, after the date of this Quarterly Report on Form 10-Q, except as required by applicable law.

The risk factors discussed in “Risk Factors” in our Annual Report on Form 10-K and this Quarterly Report on Form 10-Q could cause our results to differ materially from those expressed in the forward-looking statements made in this Quarterly Report on Form 10-Q. There also may be other risks that are currently unknown to us or that we are unable to predict at this time. Such risks and uncertainties include, without limitation:

•the potential operating and financial impacts on our operations, or those of our customers and suppliers, and the general impact on our industry and on the U.S. and global economy, resulting from COVID-19 or any other widespread contagion;

•actual or potential impacts of the ~~Russia-Ukranian~~Russia-Ukrainian crisis on global commodity prices, inflationary pressures, and state sponsored cyber activity;

•the effect of inflation on wages and operating expenses;

•volatility and cyclical downturns in the steel industry and in other industries in which our customers and/or suppliers operate;

•changes in the marketplace that may affect our cokemaking business, including the supply and demand for our coke products, as well as increased imports of coke from foreign producers;

•volatility, cyclical downturns and other change in the business climate and market for coal, affecting customers or potential customers for our logistics business;

•changes in the marketplace that may affect our logistics business, including the supply and demand for thermal and metallurgical coal;

•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;

•our ability to repair aging coke ovens to maintain operational performance;

•age of, and changes in the reliability, efficiency and capacity of the various equipment and operating facilities used in our cokemaking operations, and in the operations of our subsidiaries major customers, business partners and/or suppliers;

•changes in the expected operating levels of our assets;

•changes in the level of capital expenditures or operating expenses, including any changes in the level of environmental capital, operating or remediation expenditures;

•changes in levels of production, production capacity, pricing and/or margins for coal and coke;

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•changes in product specifications for the coke that we produce or the coals we mix, store and transport;

•our ability to meet minimum volume requirements, coal-to-coke yield standards and coke quality standards in our coke sales agreements;

•variation in availability, quality and supply of metallurgical coal used in the cokemaking process, including as a result of non-performance by our suppliers;

•effects of geologic conditions, weather, natural disasters and other inherent risks beyond our control;

•effects of adverse events relating to the operation of our facilities and to the transportation and storage of hazardous materials or regulated media (including equipment malfunction, explosions, fires, spills, impoundment failure and the effects of severe weather conditions);

•the existence of hazardous substances or other environmental contamination on property owned or used by us;

•required permits and other regulatory approvals and compliance with contractual obligations and/or bonding requirements in connection with our cokemaking, logistics operations, and/or former coal mining activities;

•the availability of future permits authorizing the disposition of certain mining waste and the management of reclamation areas;

•risks related to environmental compliance;

•our ability to comply with applicable federal, state or local laws and regulations, including, but not limited to, those relating to environmental matters;

•risks related to labor relations and workplace safety;

•availability of skilled employees for our cokemaking, and/or logistics operations, and other workplace factors;

•our ability to service our outstanding indebtedness;

•our indebtedness and certain covenants in our debt documents;

•our ability to comply with the covenants and restrictions imposed by our financing arrangements;

•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;

•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 and/or suppliers;

•consolidation of major customers

•nonperformance or force majeure by, or disputes with, or changes in contract terms with, major customers, suppliers, dealers, distributors or other business partners;

•effects of adverse events relating to the business or commercial operations of our customers and/or suppliers;

•changes in credit terms required by our suppliers;

•our ability to secure new coal supply agreements or to renew existing coal supply agreements;

•effects of railroad, barge, truck and other transportation performance and costs, including any transportation disruptions;

•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 handling services of coal and other aggregates (including transportation, storage and mixing);

•our ability to enter into new, or renew existing, agreements upon favorable terms for logistics services;

•our ability to successfully implement domestic and/or international growth strategies;

•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;

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•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;

•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. or in foreign countries;

•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;

•the accuracy of our estimates of reclamation and other environmental obligations;

•risks related to obligations under mineral leases retained by us in connection with the divestment of our legacy coal mining business;

•risks related to the ability of the assignee(s) to perform in compliance with applicable requirements under mineral leases assigned in connection with the divestment of our legacy coal mining business;

•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;

•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 benefits, income, or other matters;

•changes in federal, state, or local tax laws or regulations, including the interpretations thereof;

•claims of noncompliance with any statutory or regulatory requirements;

•changes in insurance markets impacting cost, level and/or types of coverage available, and the financial ability of our insurers to meet their obligations;

•inadequate protection of our intellectual property rights;

•volatility in foreign currency exchange rates affecting the markets and geographic regions in which we conduct business; and

•historical consolidated financial data may not be reliable indicators of future results.

The factors identified above are believed to be important factors, but not necessarily all of the important factors, that could cause actual results to differ materially from those expressed in any forward-looking statement made by us. Other factors not discussed herein also could have material adverse effects on us. All forward-looking statements included in this Quarterly Report on Form 10-Q are expressly qualified in their entirety by the foregoing cautionary statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the Company's exposure to market risk disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 4. Controls and Procedures

Management’s Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures, (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of ~~1934),~~1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in its reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

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The Company carried out an evaluation, under the supervision and with the participation of management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the quarter ended ~~March 31,~~September 30, 2022. We have not experienced any material impact to our internal controls over financial reporting due to COVID-19. ~~We are continually monitoring and assessing the effects of COVID-19 on our internal controls to minimize the impact to their design and operating effectiveness.~~

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

The information presented in Note 7 to our consolidated financial statements within this Quarterly Report on Form 10-Q is incorporated herein by reference.

Certain legal and administrative proceedings are pending or may be brought against us arising out of our current and past operations, including matters related to commercial disputes, employment claims, personal injury claims, common law tort claims, and general environmental claims. Although the ultimate outcome of these proceedings cannot be ascertained at this time, it is reasonably possible that some of them could be resolved unfavorably to us. Our 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 ~~March 31,~~September 30, 2022.

Item 1A. Risk Factors

There have been no material changes with respect to risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On October 28, 2019, the Company's Board of Directors authorized a program to repurchase outstanding shares of the Company’s common stock, $0.01 par value per share, from time to time in open market transactions at prevailing market prices, in privately negotiated transactions, or by other means in accordance with federal securities laws, for a total aggregate cost to the Company not to exceed $100.0 million. There have been no share repurchases since the first quarter of 2020. As of ~~March 31,~~September 30, 2022, $96.3 million remains available under the authorized repurchase program.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

While the Company divested substantially all of its remaining coal mining assets in April 2016, the Company continues to own certain logistics assets that are also regulated by Mine Safety and Health Administration. The information concerning mine safety violations and other regulatory matters that we are required to report in accordance with Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.014) is included in Exhibit 95.1 to this Quarterly Report on Form 10-Q.

Item 5. Other Information

None.

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Item 6. Exhibits

~~The following exhibits are filed as part of, or incorporated by reference into, this Form 10-Q.~~

Exhibit
Number

Description

3.1

Amended and Restated Certificate of Incorporation of the Company (incorporated by reference herein to Exhibit 3.1 to the Company’s Amendment No. 4 to Registration Statement on Form S-1 filed on July 6, 2011, File No. 333-173022)

3.2

Amended and Restated Bylaws of SunCoke Energy, Inc., effective as of February 1, 2016 (incorporated by reference herein to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on February 2, 2016, File No. 001-35243)

22.1*

List of Issuers and Guarantor Subsidiaries

31.1*

Chief Executive Officer Certification Pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*

Chief Financial Officer Certification Pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*

Chief Executive Officer Certification Pursuant to Exchange Act Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*

Chief Financial Officer Certification Pursuant to Exchange Act Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

95.1*

Mine Safety Disclosures

101*

The following financial statements from SunCoke Energy, Inc.'s Quarterly Report on Form 10-Q for the three and nine months ended ~~March 31,~~September 30, 2022, filed with the Securities and Exchange Commission on ~~May 2,~~October 31, 2022, is formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Balance Sheets, (iv) the Consolidated Statements of Cash Flows, (v) the Consolidated Statements of Equity, and (vi) the Notes to Consolidated Financial Statements.

104*

The cover page from SunCoke Energy, Inc's Quarterly Report on Form 10-Q for the ~~quarter~~three and nine months ended ~~March 31,~~September 30, 2022 formatted in iXBRL (Inline eXtensible Business Reporting Language) and contained in Exhibit 101.


*			Filed herewith.

**********

We are pleased to furnish this Quarterly Report on Form 10-Q to shareholders who request it by writing to:


SunCoke Energy, Inc. Investor Relations 1011 Warrenville Road Suite 600 Lisle, Illinois 60532

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SunCoke Energy, Inc.

Dated:

~~May 2,~~October 31, 2022

By:

/s/ Mark W. Marinko

Mark W. Marinko

Senior Vice President and Chief Financial Officer
(As Principal Financial Officer and Duly Authorized Officer of SunCoke Energy, Inc.)

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