What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-02-25 compared with 2020-02-20 · 372 added, 668 removed, 844 unchanged (55% of the section changed)

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Accrued Liabilities

Debt and Financing Obligation

Debt and Financing Obligations

Commitments and Contingent Liabilities

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Business Segment Information

Selected Quarterly Data (unaudited)

Supplemental Condensed Consolidating Financial Information

Report of Independent Registered Public Accounting Firm

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Assessment of the fair value for the Logistics reporting unit

As discussed in Note 8 to the consolidated financial statements, the Company assessed goodwill in the Logistics reporting unit for impairment.

As of September 30, 2019, the Company concluded the fair value of its Logistics reporting unit was below its carrying value and recorded a $73.5 million impairment charge.

The Company determined the fair value of the Logistics reporting unit using a discounted cash flow analysis.

We identified assessment of the fair value of the Logistics reporting unit as a critical audit matter.

The determination of the fair value required the use of cash flow and discount rate assumptions.

Auditor judgment was required to evaluate the Company’s estimation of forecasted volumes and rates on existing contracts and incremental business, which included the Company’s use of historical data, industry data impacting expected volumes, and average handling prices.

In addition, the discounted cash flow analysis included a discount rate assumption for which there was limited observable market information, and the calculated fair value of the Logistics reporting unit was sensitive to possible changes to this assumption.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company’s goodwill impairment assessment process, including controls related to the development of cash flows of the Logistics reporting unit and the discount rate.

We evaluated the Company’s cash flow assumptions, by comparing the assumptions to current and historical volume levels and pricing.

We performed sensitivity analyses over the assumptions for forecasted volumes and rates and the discount rate to assess their impact on the fair value of the Logistics reporting unit.

We compared the Company’s historical estimates of volumes and rates to actual results to assess the Company’s ability to accurately forecast.

In addition, we involved valuation professionals with specialized skills and knowledge who assisted in:

evaluating the Company’s discount rate by comparing the inputs to the discount rate to publicly available data for comparable entities and assessing the resulting discount rate

testing the estimate of the Logistics reporting unit fair value using the reporting unit’s cash flow assumptions and discount rate, and compared the results to the Company’s fair value estimate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the Company’s estimated black lung benefit liability

As discussed in Note 13 to the consolidated financial statements, as of December 31, 2019, the Company’s black lung benefit liability was $55.1 million.

As discussed in Note 13 to the consolidated financial statements, the Company has obligations related to coal workers’ pneumoconiosis, or black lung, benefits to certain former coal miners and their dependents.

As of December 31, 2020, the Company’s black lung benefit liabili ty was $64.6 million.

The Company, with the assistance of an external expert, estimated the liability using an actuarial model with several assumptions.

We identified the evaluation of the Company’s estimated black lung benefit liability as a critical audit matter.

There was a high degree of subjectivity and sensitivity in evaluating the actuarial model and certain assumptions in the actuarial model.

There was a high degree of subjective auditor judgment in evaluating the actuarial model and key assumptions in the actuarial model.

The actuarial model included internally-developed assumptions related to expected claim filing patterns and expected claimant success rates.

There was limited market information from which to develop the model and these assumptions, and therefore subjective auditor judgment was required to evaluate the relevance and reliability of internally developed information.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company’s process to estimate the black lung benefit liability, including controls related to

the development of assumptions related to the expected claim filing patterns and claimant success rates.

There was limited market information from which to develop these assumptions, and therefore subjective auditor judgment was required to evaluate the relevance and reliability of internally-developed information.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s process to estimate the black lung benefit liability, including controls related to the development of assumptions related to the expected claim filing patterns and claimant success rates.

We evaluated the Company’s assumptions related to expected claim filing patterns and the claimant success rates by comparing the assumptions to industry filing patterns and claimant success rates.

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We compared the Company’s historical black lung payment estimates to actual payments to assess the accuracy of previous estimates related to its black lung benefit liability.

In addition, we involved actuarial professionals with specialized skills and knowledge who assisted in evaluating the model and the expected claim filing patterns and expected claimant success rates assumptions used by the Company to estimate its black lung benefit liability by comparing the model and assumptions to industry standards.

Assessment of impairment of long-lived assets at Convent Marine Terminal

As discussed in Note 8 to the consolidated financial statements, in 2019 the Company assessed the Convent Marine Terminal (CMT) long-lived assets for impairment.

The fair value of the asset group was lower than the carrying value, resulting in an impairment charge of $173.9 million.

The Company determined the fair value of the CMT asset group based on discounted cash flows and asset replacement cost with related adjustments for capacity utilization.

We identified the assessment of the impairment of the Convent Marine Terminal as a critical audit matter.

In part, the calculation of the impairment is based on the estimated fair value of the Convent Marine Terminal.

In addition, the discounted cash flow analysis included a discount rate assumption for which there was limited observable market information, and the calculated fair value of the Convent Marine Terminal was sensitive to possible changes to this assumption.

Additionally, the estimate of asset replacement cost included adjustments for capacity utilization for which there was limited observable market information.

The primary procedures we performed to address this critical audit matter included the following.

We tested certain internal controls over the Company’s long-lived asset impairment assessment process, including controls related to the development of cash flows of the CMT asset group, the discount rate, asset replacement cost and adjustments for capacity utilization.

We evaluated the Company’s cash flow assumptions, including those related to forecasted volumes and rates on existing contracts and incremental merchant business, by comparing the assumptions to current and historical volume levels and pricing.

We performed sensitivity analyses over the cash flow and discount rate assumptions to assess their impact on the Company’s determination of the fair value of the Convent Marine terminal.

We compared the Company’s historical estimates of cash flows to actual results to assess the Company’s ability to accurately forecast.

In addition, we involved valuation professionals with specialized skills and knowledge who assisted in:

evaluating the Company’s discount rate by comparing the Company’s inputs to the discount rate to publicly available data for comparable entities and assessing the resulting discount rate to the Company’s discount rate

evaluating the asset replacement cost and related adjustments for capacity utilization by comparing the asset replacement cost and related adjustments for capacity utilization to publicly available data for comparable asset groups

testing the estimate of the Convent Marine Terminal’s fair value using the Company’s cash flow assumptions and discount rate, and compared the results of our estimate of fair value to the Company’s fair value estimate.

In addition, we involved actuarial professionals with specialized skills and knowledge who assisted in evaluating the expected claim filing patterns and expected claimant success rates assumptions used by the Company to estimate its black lung benefit liability by comparing the assumptions to industry standards.

We have served as the Company’s auditor since 2015.

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Years Ended December 31,

2020 2019 2018

(Dollars and shares in millions, except per share amounts)

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Total costs and operating expenses 1,263.3 1,744.6 1,332.2

Operating (loss) income

Operating income (loss) 69.7 ( 144.3 ) 118.7

Interest expense, net 56.3 60.3 61.4

(Gain) loss on extinguishment of debt, net ( 5.7 ) ( 1.5 ) 0.3

(Loss) income before income tax (benefit) expense and loss from equity method investment

Income tax (benefit) expense

Income (loss) before income tax expense (benefit) and loss from equity method investment 19.1 ( 203.1 ) 57.0

Income tax expense (benefit) 10.3 ( 54.7 ) 4.6

Loss from equity method investment

Net (loss) income

Net income (loss) attributable to noncontrolling interests

Net (loss) income attributable to SunCoke Energy, Inc.

(Loss) earnings attributable to SunCoke Energy, Inc.

Net income (loss) 8.8 ( 148.4 ) 47.0

Net income attributable to noncontrolling interests 5.1 3.9 20.8

Net income (loss) attributable to SunCoke Energy, Inc.

$ 3.7 $ ( 152.3 ) $ 26.2

Earnings (loss) attributable to SunCoke Energy, Inc.

per common share:

Basic $ 0.04 $ ( 1.98 ) $ 0.40

Diluted $ 0.04 $ ( 1.98 ) $ 0.40

Weighted average number of common shares outstanding:

Basic 83.0 76.8 64.7

Diluted 83.2 76.8 65.5

(See Accompanying Notes)

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Years Ended December 31,

2020 2019 2018

(Dollars in millions)

Net (loss) income

Net income (loss) $ 8.8 $ ( 148.4 ) $ 47.0

Other comprehensive income (loss):

Reclassifications of actuarial loss amortization and prior service benefit to earnings (net of related tax expense of zero for all years)

0.1 — ( 0.1 )

Retirement benefit plans funded status adjustment (net of related tax benefit (expense) of $ 0.4 million, $ 0.3 million and $( 0.2 ) million, respectively)

( 1.6 ) ( 0.7 ) 0.6

Currency translation adjustment ( 1.2 ) ( 0.6 ) ( 1.4 )

Recognition of accumulated currency translation loss upon sale of equity method investment

Comprehensive (loss) income

Comprehensive income (loss) attributable to noncontrolling interests

Comprehensive (loss) income attributable to SunCoke Energy, Inc.

Comprehensive income (loss) 6.1 ( 149.7 ) 55.1

Comprehensive income attributable to noncontrolling interests 5.1 3.9 20.8

Comprehensive income (loss) attributable to SunCoke Energy, Inc.

$ 1.0 $ ( 153.6 ) $ 34.3

(See Accompanying Notes)

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Cash and cash equivalents

$ 48.4 $ 97.1

Receivables, net

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Total current assets

Properties, plants and equipment (net of accumulated depreciation of $903.7 million and $855.8 million at December 31, 2019 and 2018, respectively)

Other intangible assets, net

Properties, plants and equipment (net of accumulated depreciation of $ 1,032.9 and $ 903.7 at December 31, 2020 and 2019, respectively)

1,328.0 1,390.2

Goodwill and other intangible assets, net 37.2 38.1

Deferred charges and other assets

$ 1,613.4 $ 1,753.8

Liabilities and Equity

Accounts payable

$ 104.1 $ 142.4

Accrued liabilities

Deferred revenue

Current portion of long-term debt and financing obligation

Current portion of financing obligations 3.0 2.9

Interest payable

Total current liabilities

Long-term debt and financing obligation

Long-term debt and financing obligations 673.9 780.0

Accrual for black lung benefits

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Total liabilities

1,112.5 1,235.4

Preferred stock, $ 0.01 par value.

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Treasury stock, 15,404,482 and 13,783,182 shares at December 31, 2020 and 2019, respectively

( 184.0 ) ( 177.0 )

Additional paid-in capital

Accumulated other comprehensive loss ( 17.1 ) ( 14.4 )

Retained (deficit) earnings

Retained deficit ( 46.6 ) ( 30.1 )

Total SunCoke Energy, Inc.

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Total liabilities and equity

$ 1,613.4 $ 1,753.8

(See Accompanying Notes)

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Years Ended December 31,

2020 2019 2018

(Dollars in millions)

Cash Flows from Operating Activities:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Net income (loss) $ 8.8 $ ( 148.4 ) $ 47.0

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Long-lived asset and goodwill impairment — 247.4 —

Depreciation and amortization expense 133.7 143.8 141.6

Deferred income tax benefit

Deferred income tax expense (benefit) 12.1 ( 63.1 ) ( 3.4 )

Payments in excess of expense for postretirement plan benefits

( 1.7 ) ( 1.9 ) ( 2.4 )

Share-based compensation expense 3.8 4.5 3.1

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Receivables, net 13.2 15.9 ( 6.9 )

Inventories 21.8 ( 36.6 ) 0.6

Accounts payable ( 38.0 ) 23.5 ( 0.7 )

Accrued liabilities 2.5 ( 2.4 ) ( 6.0 )

Deferred revenue

Interest payable ( 0.2 ) ( 1.4 ) ( 1.8 )

Income taxes ( 3.3 ) ( 1.5 ) 4.5

Other 10.8 3.6 4.5

Net cash provided by operating activities 157.8 181.9 185.8

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Capital expenditures ( 73.9 ) ( 110.1 ) ( 100.3 )

Return of Brazilian investment

Sale of equity method investment — — 4.0

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Repayment of revolving facility ( 684.9 ) ( 370.3 ) ( 204.5 )

Repayment of financing obligation

Cash distributions to noncontrolling interests

Acquisition of additional interest in the Partnership

Shares repurchased

Proceeds from financing obligation 10.0 — —

Repayment of financing obligations ( 3.0 ) ( 2.9 ) ( 2.6 )

Dividends paid ( 19.9 ) ( 5.1 ) —

Shares repurchased ( 7.0 ) ( 36.3 ) —

Acquisition of additional interest in the Partnership — — ( 4.2 )

Cash distributions to noncontrolling interests — ( 14.2 ) ( 31.9 )

Other financing activities ( 0.4 ) ( 7.9 ) 0.4

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Net (decrease) increase in cash and cash equivalents ( 48.7 ) ( 48.6 ) 25.5

Cash, cash equivalents and restricted cash at beginning of year

Cash and cash equivalents at beginning of year 97.1 145.7 120.2

Cash and cash equivalents at end of year $ 48.4 $ 97.1 $ 145.7

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Interest paid, net of capitalized interest of $ 0.2 million, $ 2.3 million and $ 3.2 million, respectively

$ 51.8 $ 58.2 $ 59.6

Income taxes paid, net of refunds of $ 3.0 million, $ 0.3 million and $ 4.3 million, respectively

$ 1.1 $ 9.5 $ 3.7

(See Accompanying Notes)

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Consolidated Statements of Equity

Treasury Stock

Comprehensive Loss

Total SunCoke

Non- controlling

Common Stock Treasury Stock Additional

Capital Accumulated

Comprehensive Loss Retained

Earnings Total SunCoke

Equity Non- controlling

Interests Total

Shares Amount Shares Amount

(Dollars in millions)

At December 31, 2017 72,006,905 $ 0.7 7,477,657 $ ( 140.7 ) $ 486.2 $ ( 21.2 ) $ 101.2 $ 426.2 $ 233.4 $ 659.6

Net income (loss)

Reclassifications of prior service cost and actuarial loss amortization to earnings (net of related tax expense of zero)

Net income — — — — — — 26.2 26.2 20.8 47.0

Reclassification of prior service cost and actuarial loss amortization to earnings, net of tax

— — — — — ( 0.1 ) — ( 0.1 ) — ( 0.1 )

Retirement benefit plans funded status adjustment (net of related tax benefit of $ 0.2 million)

— — — — — 0.6 — 0.6 — 0.6

Currency translation adjustment

Cash distribution to noncontrolling interest

— — — — — ( 1.4 ) — ( 1.4 ) — ( 1.4 )

Recognition of accumulated currency translation loss upon sale of equity method investment

— — — — — 9.0 — 9.0 — 9.0

Cash distribution to noncontrolling interests — — — — — — — — ( 31.9 ) ( 31.9 )

Share-based compensation expense — — — — 3.1 — — 3.1 — 3.1

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Acquisition of additional interest in the Partnership:

Cash paid — — — — ( 1.5 ) — — ( 1.5 ) ( 2.7 ) ( 4.2 )

Deferred tax adjustment — — — — 0.3 — — 0.3 — 0.3

Cumulative effect from adoption of ASU 2016-09

Cumulative effect from adoption of ASU 2018-02

At December 31, 2018 72,233,750 $ 0.7 7,477,657 $ ( 140.7 ) $ 488.8 $ ( 13.1 ) $ 127.4 $ 463.1 $ 219.6 $ 682.7

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Consolidated Statements of Equity

Treasury Stock

Comprehensive Loss

Total SunCoke

Non- controlling

Common Stock Treasury Stock Additional

Capital Accumulated

Comprehensive Loss Retained

(Deficit) Total SunCoke

Equity Non- controlling

Interests Total

Shares Amount Shares Amount

(Dollars in millions)

At December 31, 2018 72,233,750 $ 0.7 7,477,657 $ ( 140.7 ) $ 488.8 $ ( 13.1 ) $ 127.4 $ 463.1 $ 219.6 $ 682.7

Reclassification of prior service cost and actuarial loss amortization to earnings, net of tax

Net (loss) income — — — — — — ( 152.3 ) ( 152.3 ) 3.9 ( 148.4 )

Retirement benefit plans funded status adjustment (net of related tax benefit of $ 0.3 million)

— — — — — ( 0.7 ) — ( 0.7 ) — ( 0.7 )

Currency translation adjustment — — — — — ( 0.6 ) — ( 0.6 ) — ( 0.6 )

Recognition of accumulated currency translation loss upon sale of equity method investment

Cash distribution to noncontrolling interests

Share-based compensation expense — — — — 4.5 — — 4.5 — 4.5

Share issuances, net of shares withheld for taxes 359,988 — — — ( 1.7 ) — — ( 1.7 ) — ( 1.7 )

Acquisition of additional interest in the Partnership:

Share repurchases — — 6,305,525 ( 36.3 ) — — — ( 36.3 ) — ( 36.3 )

Dividends — — — — — — ( 5.2 ) ( 5.2 ) — ( 5.2 )

Cash distribution to noncontrolling interest — — — — — — — — ( 14.2 ) ( 14.2 )

Simplification Transaction:

Share issuances, for the acquisition of Partnership public units 24,818,149 0.3 — — 182.2 — — 182.5 ( 182.5 ) —

Share issuances, for the final Partnership distribution 635,502 — — — — — — — — —

Transaction costs — — — — ( 5.4 ) — — ( 5.4 ) — ( 5.4 )

Deferred tax adjustment — — — — 43.7 — — 43.7 — 43.7

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Consolidated Statements of Equity

Treasury Stock

Comprehensive Loss

Total SunCoke

Non- controlling

Common Stock Treasury Stock Additional

Capital Accumulated

Comprehensive Loss Retained

Deficit Total SunCoke

Equity Non- controlling

Interests Total

Shares Amount Shares Amount

(Dollars in millions)

At December 31, 2019 98,047,389 1.0 13,783,182 ( 177.0 ) 712.1 ( 14.4 ) ( 30.1 ) $ 491.6 26.8 $ 518.4

Net (loss) income

Net income — — — — — — 3.7 3.7 5.1 8.8

Reclassification of prior service cost and actuarial loss amortization to earnings, net of tax — — — — — 0.1 — 0.1 — 0.1

Retirement benefit plans funded status adjustment (net of related tax benefit of 0.4 million)

— — — — — ( 1.6 ) — ( 1.6 ) — ( 1.6 )

Currency translation adjustment — — — — — ( 1.2 ) — ( 1.2 ) — ( 1.2 )

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Share repurchases — — 1,621,300 ( 7.0 ) — — — ( 7.0 ) — ( 7.0 )

Cash distribution to noncontrolling interest

Simplification Transaction:

Share issuances, for the acquisition of Partnership public units

Share issuances, for the final Partnership distribution

Transaction costs

Deferred tax adjustment

Dividends — — — — — — ( 20.2 ) ( 20.2 ) — ( 20.2 )

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

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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 over 55 years of coke production experience.

Coke is a principal raw material in the blast furnace steelmaking process and is produced by heating metallurgical coal in a refractory oven, which releases certain volatile components from the coal, thus transforming the coal into coke.

Additionally, we own and operate a logistics business, which primarily provides handling and/or mixing services of coal and other aggregates to third-party customers as well as to our own cokemaking facilities.

We have designed, developed, built, own and operate five cokemaking facilities in the United States (“U.S.”) with collective nameplate capacity to produce approximately 4.2 million tons of coke per year.

Additionally, we have designed and 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.

To diversify our business and customer base, SunCoke began exploring the foundry coke market in 2020.

Foundry coke is a high-quality grade of coke that is used at foundries to melt iron and various metals in cupola furnaces, which is further processed via casting or molding into products used in various industries such as construction, transportation and industrial products.

Throughout 2020, we tested production capacity and executed successful test sales of foundry coke.

We will begin to produce and sell foundry coke on a commercial scale in 2021.

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.

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Intercompany transactions and balances have been eliminated in consolidation.

Our consolidated financial statements include SunCoke Energy Partners, L.P.

Our consolidated financial statements have historically included SunCoke Energy Partners, L.P.

(the “Partnership”), which owned our Haverhill, Middletown, and Granite City cokemaking facilities and Convent Marine Terminal ("CMT"), Kanawha River Terminal ("KRT") and SunCoke Lake Terminal ("Lake Terminal").

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The Company also receives fees for operating the cokemaking plant in Brazil and for the licensing of its proprietary technology for use at this facility as well as reimbursement of substantially all of its operating costs.

See Note 19 .

Cash Equivalents

The Company considers all highly liquid investments with a remaining maturity of three months or less at the time of purchase to be cash equivalents.

These cash equivalents consist principally of certificates of deposit.

These cash equivalents consist principally of money market funds.

Inventories are valued at the lower of cost or net realizable value.

Cost is determined using the first-in, first-out method, except for the Company’s materials and supplies inventory, which are determined using the average-cost method.

The Company utilizes the selling prices under its long-term coke supply contracts to record lower of cost or net realizable value inventory adjustments.

The Company primarily utilizes the selling prices under its long-term coke supply contracts to record lower of cost or net realizable value inventory adjustments.

Properties, Plants and Equipment

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Intangible Assets

Intangible assets are primarily comprised of permits, customer contracts and customer relationships.

Intangible assets are primarily comprised of permits.

Intangible assets are amortized over their useful lives in a manner that reflects the pattern in which the economic benefit of the intangible asset is consumed.

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The Company has obligations related to coal workers’ pneumoconiosis, or black lung, benefits of certain of our former coal miners and their dependents.

We act as a self-insurer for both state and federal black lung benefits and adjust our liability each year based upon actuarial calculations of our expected future payments for these benefits, including a provision for incurred but not reported losses.

See Note 13 .

We adjust our liability each year based upon actuarial calculations of our expected future payments for these benefits, including a provision for incurred but not reported losses.

Postretirement Benefit Plan Liabilities

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The credit (charge) to accumulated other comprehensive income (loss), which is reflected net of related tax effects, is subsequently recognized in net income when amortized as a component of postretirement benefit plans expense included in interest expense, net on the Consolidated Statements of Operations.

See Note 10 .

Asset Retirement Obligations

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The associated asset retirement costs are capitalized as part of the carrying amount of the asset and depreciated over its remaining estimated useful life.

When the assumptions used to estimate a recorded asset retirement obligation change, a revision is recorded to both the asset retirement obligation and the asset retirement cost capitalized to the extent remaining useful life exists.

The Company’s asset retirement obligations primarily relate to costs associated with restoring land to its original state.

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The costs of equity awards and cash awards are recorded to additional paid-in capital and accrued liabilities, respectively, on the Consolidated Balance Sheets.

See Note 16 .

Fair Value Measurements

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Assets and liabilities are classified within the fair value hierarchy based on the lowest level (least observable) input that is significant to the measurement in its entirety.

See Note 18 .

Currency Translation

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Upon adoption, the Company recognized right-of-use assets and lease liabilities of $ 5.1 million at January 1, 2019.

See Note 14 .

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

The Company adopted this standard on January 1, 2018, using the modified retrospective method with no material impact on our revenue recognition model on an annual basis.

See Note 19 .

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230):

Restricted cash.” The Company retrospectively adopted this ASU in the first quarter 2018 and modified the Company's cash flow presentation to include restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.

Historical restricted cash balances were related to cash withheld from the 2015 acquisition of CMT to fund the completion of certain expansion capital improvements, and the related immaterial impacts were reclassified on the consolidated statement of cash flows for the year ended December 31, 2017.

The restricted cash balance was zero at both December 31, 2019 and December 31, 2018.

In March 2017, the FASB issued ASU 2017-07, “Compensation-Retirement Benefits (Topic 715):

Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” The Company adopted this ASU in the first quarter 2018 and retrospectively presented net periodic postretirement benefit cost in the income statement separately from the service cost component and outside a subtotal of income from operations.

In conjunction with the adoption of this standard, expense of $ 1.3 million was reclassified from operating income and was recorded in interest expense, net on the Consolidated Statements of Operations for the year ended December 31, 2017.

See Note 10 .

In February 2018, the FASB issued ASU 2018-02, “Income Statement-Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” The Company adopted this ASU in the first quarter 2018 and reclassified $ 1.1 million of deferred tax adjustments to accumulated other comprehensive income (loss) from retained earnings on the December 31, 2017 balance sheet for the tax effects resulting from the Tax Cuts and Jobs Act of 2017.

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Additionally, approximately 3 percent of our domestic employees are represented by the International Union of Operating Engineers.

During 2019, the labor agreements at KRT, Lake Terminal and Haverhill were renewed and will expire on April 30, 2022, June 30, 2022 and October 31, 2023, respectively.

In addition, during 2019, the labor agreement at Indiana Harbor was retroactively renewed, with an effective date of September 1, 2018 and an expiration date of August 31, 2022.

During 2020, the labor agreements at Granite City and Haverhill were renewed and will expire on September 1, 2023 and November 1, 2023, respectively.

As of December 31, 2020, we have approximately 292 employees at the cokemaking facility in Vitória, Brazil, all of whom are represented by a union under a labor agreement.

During 2019, the labor agreement at our Vitoria, Brazil facility was renewed for an additional year, and it expires on November 30, 2020 .

During 2020, the labor agreement at our Vitória, Brazil facility was renewed for an additional year, and it expires on November 30, 2021.

Acquisitions and Divestitures

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Deferred income taxes $ ( 43.7 )

Common stock $ 0.3

Additional paid-in capital $ 225.9

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Subsequent to the closing of the Simplification Transaction, SunCoke incurred $ 0.3 million of legal and consulting costs, which were included in selling, general and administrative expenses on the Consolidated Statements of Operations for the year ended December 31, 2019.

The following table summarizes the effects of the changes in the Company's ownership interest in the Partnership on SunCoke's equity:

The following table summarizes the effects of the changes in the Company's ownership interest in the Partnership on SunCoke's equity in 2019 and 2018.

There were no changes in SunCoke's ownership interest in consolidated subsidiaries in 2020.

Years Ended December 31,

(Dollars in millions)

Net (loss) income attributable to SunCoke Energy, Inc.

$ ( 152.3 ) $ 26.2

Increase (decrease) in SunCoke Energy, Inc.

equity for the purchase of additional interest in the Partnership (1)

182.5 ( 1.2 )

Changes from net (loss) income attributable to SunCoke Energy, Inc.

and transfers to noncontrolling interest $ 30.2 $ 25.0

During the years ended December 31, 2018 and 2017, the Company purchased 231,171 and 2,853,032 , respectively, of outstanding Partnership common units in the open market for total cash payments of $ 4.2 million and $ 48.7 million , respectively.

SunCoke controlled the Partnership both before and after these unit acquisitions.

(1) During the years ended December 31, 2018 the Company purchased 231,171 , of outstanding Partnership common units in the open market for total cash payments of $ 4.2 million.

SunCoke controlled the Partnership both before and after this unit acquisition.

Therefore, the cash paid for the Partnership units in excess of the net book value of Partnership interest acquired was recorded as a reduction to additional paid-in capital, reducing SunCoke’s equity balance.

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Therefore, its financial results had not been included in our financial statements since that time.

Divestiture of Preferred Investment in Brazilian Cokemaking Operations

On November 28, 2016, ArcelorMittal Brazil redeemed SunCoke’s indirectly held preferred and common equity interests in Sol Coqueria Tubarão S.A.

("Brazil Investment"), previously accounted for at cost, for consideration of $ 41.0 million .

The Company received $ 20.5 million in cash at closing in 2016 and received the remaining $ 20.5 million in cash, plus interest of $ 0.2 million , in 2017.

Starting in 2016, SunCoke receives $ 5.1 million in licensing fees per year, in addition to our per ton licensing fee, through 2023 related to the addition of certain patents to its existing intellectual property licensing agreement, which are currently in use by ArcelorMittal Brazil at the Brazil facility.

The Company also extended the life of its patents with the Brazilian authorities through 2033, providing opportunity to extend the existing licensing agreement beyond 2023.

Licensing fees are included in sales and other operating revenue on the Consolidated Statements of Operations.

Customer Concentrations

In 2019 , the Company sold approximately 4.2 million tons of coke under long-term, take-or-pay contracts to its three primary customers in the U.S.:

AK Steel Corporation ("AK Steel"), ArcelorMittal USA LLC and/or its affiliates (“AM USA”) and United States Steel Corporation ("U.S.

In addition, licensing and operating fees are payable to the Company under long-term contracts with ArcelorMittal Brazil.

The table below shows sales to the Company's significant customers:

Historically, coke sales were made by the Company under long-term, take-or-pay contracts to three primary customers in the U.S.:

ArcelorMittal USA LLC ("AM USA"), AK Steel Holding Corporation ("AK Steel") and United States Steel Corporation ("U.S.

In March 2020, Cleveland-Cliffs Inc.

("Cliffs") completed the acquisition of AK Steel, and subsequently changed the name of AK Steel to Cleveland-Cliffs Steel Holding Corporation.

In December 2020, Cliffs completed the acquisition of AM USA, and subsequently changed the name of AM USA to Cleveland-Cliffs Steel LLC.

Collectively, we refer to Cleveland-Cliffs Steel Holding Corporation and Cleveland-Cliffs Steel LLC as "Cliffs Steel."

Our contracts with each entity were not impacted by the transactions that occurred in 2020.

Contracts with Cliffs Steel are expected to account for approximately 75 percent of our domestic cokemaking capacity in 2021 and approximately 65 percent of our domestic cokemaking capacity in 2022.

In 2020, the Company sold approximately 3.8 million tons of coke under long-term, take-or-pay contracts.

The tables below shows sales to the Company's significant customers:

Year Ended December 31,

Sales and other operating revenue Percent of Company sales and other operating revenue

(Dollars in millions)

Cliffs Steel / AM USA (1)(2)

$ 687.3 51.6 %

Cliffs Steel / AK Steel (1)(2)

$ 355.8 26.7 %

$ 208.2 15.6 %

Years Ended December 31,

Sales and other operating revenue

Percent of Company sales and other operating revenue

Sales and other operating revenue

Percent of Company sales and other operating revenue

Sales and other operating revenue

Percent of Company sales and other operating revenue

Sales and other operating revenue Percent of Company sales and other operating revenue Sales and other operating revenue Percent of Company sales and other operating revenue

(Dollars in millions)

AM USA and ArcelorMittal Brazil (1)

(1) Represents revenues included in our Domestic Coke and Brazil Coke segments.

$ 786.4 49.1 % $ 695.6 47.9 %

$ 433.3 27.1 % $ 377.9 26.0 %

$ 255.4 16.0 % $ 206.8 14.3 %

(1) Combined sales to Cliffs Steel/AM USA and Cliffs Steel/AK Steel were $ 1,043.1 million, or 78.3 percent of total Company sales and other operating revenue for the year ended December 31, 2020.

(2) Represents revenues included in our Domestic Coke segment.

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The Company generally does not require any collateral with respect to its receivables.

At both December 31, 2019 and 2018, the Company’s receivables balances were primarily due from AM USA and ArcelorMittal Brazil, AK Steel and U.S.

As a result, the Company experiences concentrations of credit risk in its receivables with these three customers.

At December 31, 2020, the Company’s receivables balance was primarily due from Cliffs Steel and U.S.

Steel, with receivables due of $ 22.9 million and $ 6.3 million, respectively.

At December 31, 2019, the Company's receivables balance was primarily due from AM USA, AK Steel and U.S.

Steel, with receivables due of $ 19.5 million, $ 13.2 million, and $ 7.3 million, respectively.

As a result, the Company experiences concentrations of credit risk in its receivables with these customers.

These concentrations of credit risk may be affected by changes in economic or other conditions affecting the steel industry.

The table below shows receivables due from the Company's significant customers:

(Dollars in millions)

AM USA and ArcelorMittal Brazil

Our logistics business provided coal handling and storage services to Murray Energy Corporation, Inc.

("Murray") and Foresight Energy LLC ("Foresight"), who have historically been the two primary customers in the Logistics segment.

In 2019, Murray filed for bankruptcy and rejected its take-or-pay contract with CMT, which resulted in the absence of approximately $ 30 million of take-or-pay revenues.

The table below shows sales to Foresight and Murray:

Years Ended December 31,

(Dollars in millions)

Sales and other operating revenue (1)

Percent of Company sales and other operating revenue

Percent of Logistics segment sales and other operating revenue, including intersegment sales

The 2019 results reflect zero take-or-pay revenues from Murray.

Receivables, net due from Foresight totaled $ 0.5 million at December 31, 2019.

Receivables, net due from Foresight and Murray totaled $ 3.2 million at December 31, 2018.

The components of income before income tax (benefit) expense and loss from equity method investment are as follows:

The components of income before income tax expense (benefit) and loss from equity method investment are as follows:

Years Ended December 31,

2020 2019 2018

(Dollars in millions)

Domestic $ 6.1 $ ( 218.6 ) $ 39.3

Foreign 13.0 15.5 17.7

Total $ 19.1 $ ( 203.1 ) $ 57.0

Income tax expense (benefit) consisted of the following:

Years Ended December 31,

2020 2019 2018

(Dollars in millions)

Current tax expense (benefit):

Total current tax expense

Deferred tax (benefit) expense:

Total deferred tax (benefit) expense

Current tax (benefit) expense:

federal $ ( 4.7 ) $ 0.3 $ 1.4

State ( 0.3 ) 3.8 2.1

Foreign 3.2 4.3 4.5

Total current tax (benefit) expense ( 1.8 ) 8.4 8.0

Deferred tax expense (benefit):

federal 3.6 ( 39.3 ) ( 3.1 )

State 8.5 ( 23.8 ) ( 0.3 )

Total deferred tax expense (benefit) 12.1 ( 63.1 ) ( 3.4 )

Total $ 10.3 $ ( 54.7 ) $ 4.6

The reconciliation of income tax expense at the U.S.

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Years Ended December 31,

2020 2019 2018

(Dollars in millions)

Income tax (benefit) expense at U.S.

Income tax expense (benefit) at U.S.

statutory rate $ 4.0 21.0 % $ ( 42.7 ) 21.0 % $ 12.0 21.0 %

Increase (reduction) in income taxes resulting from:

Logistics goodwill impairment

Impact of Final Regulations (1)

Impact of Tax Legislation (2)

Income attributable to noncontrolling interests in partnerships (1)

( 1.1 ) ( 5.6 ) % ( 0.6 ) 0.3 % ( 3.9 ) ( 6.8 ) %

State and other income taxes, net of federal income tax effects (2)

7.8 41.2 % ( 15.0 ) 7.4 % 1.6 2.8 %

Impact of CARES Act (3)

( 1.5 ) ( 7.9 ) % — — % — — %

Logistics goodwill impairment — — % 3.3 ( 1.7 ) % — — %

Impact of Tax Legislation (4)

— — % — — % ( 4.8 ) ( 8.4 ) %

Return to provision adjustments 1.2 6.5 % ( 0.8 ) 0.4 % — — %

Change in valuation allowance ( 1.3 ) ( 6.9 ) % 0.6 ( 0.3 ) % 0.7 1.2 %

Income tax (benefit) expense at effective tax rate

On January 19, 2017, the Internal Revenue Service ("IRS") announced its decision to exclude cokemaking as a qualifying income generating activity in its final regulations (the "Final Regulations") issued under section 7704(d)(1)(E) of the Internal Revenue Code relating to the qualifying income exception for publicly traded partnerships.

As a result, the Partnership recorded deferred income tax expense of $ 148.6 million to set up its initial deferred income tax liability during 2017, primarily related to differences in the book and tax basis of fixed assets.

However, the Company had previously recorded $ 84.4 million of the deferred income tax liability in its financial statements related to the Company's share of the deferred tax liability for the book and tax differences in its investment in the Partnership.

As such, the Company's 2017 financial statements reflect the $ 64.2 million incremental impact from the Final Regulations solely attributable to the Partnership’s public unitholders, which was also recorded as an equal reduction to noncontrolling interest.

In 2018, the Partnership recorded a deferred tax benefit of $ 3.6 million related to its changes in projected deferred tax liability associated with projected book and tax differences at the end of the 10-year transition period due to current period additions and changes in estimated useful lives of certain assets.

The Company's 2018 financial statements reflect a $ 1.4 million benefit, which is solely attributable to the Partnership’s public unitholders and was also recorded as an equal reduction to noncontrolling interest.

As a result, the Final Regulations had no impact to net income attributable to the Company in 2018 or 2017.

Following the closing of the Simplification Transaction in June 2019, the Final Regulations no longer apply to the Company.

Other 1.2 6.0 % 0.5 ( 0.2 ) % ( 1.0 ) ( 1.8 ) %

Income tax expense (benefit) at effective tax rate $ 10.3 54.3 % $ ( 54.7 ) 26.9 % $ 4.6 8.0 %

(1) No income tax expense is reflected in the Consolidated Statements of Operations for income attributable to noncontrolling interests in our Indiana Harbor cokemaking facility or the Partnership prior to the Simplification Transaction discussed in Note 3.

(2) A change in the tax filing status of our Convent Marine Terminal in Louisiana from a taxable partnership to a member of the consolidated return group resulted in lower apportioned state tax rates and the revaluation of certain deferred tax assets, which resulted in $ 6.5 million of deferred income tax expense in 2020.

(3) On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security ("CARES Act") was enacted.

The enactment of the CARES Act allows the Company to carry back net operating losses generated in 2019 to each of the five years preceding 2019.

As a result of the CARES Act, SunCoke expects to receive tax refunds of approximately $ 4.8 million for prior year taxes paid and recorded a tax benefit of $ 1.5 million during 2020.

(4) On December 22, 2017, the Tax Cuts and Jobs Act ("Tax Legislation") was enacted.

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corporate income tax structure, including lowering corporate income tax rates.

In addition, the SEC staff released Staff Accounting Bulletin 118 on December 23, 2017, which provided for companies to record a provisional impact of the Tax Legislation during a measurement period, not to exceed one year, in situations where companies do not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting under ASC 740, "Income Taxes", for certain income tax effects of the Tax Legislation for the reporting period which includes enactment.

During 2017, SunCoke recorded a provisional net income tax benefit of $ 154.7 million , of which $ 125.0 million was attributable to the Company, for the impact of this Tax Legislation.

These benefits were primarily due to the $ 169.0 million net benefit resulting from the remeasurement of U.S.

deferred income tax liabilities and assets at the lower enacted corporate tax rates.

During 2017, based on information available at the time, the Company recorded provisional income tax expense of $ 14.3 million for a valuation allowance against $ 19.0 million of foreign tax credit carryforwards that the Company believed would not be realized prior to their expiration as a result of the Tax Legislation.

reasonable detail to complete the accounting under ASC 740, "Income Taxes", for certain income tax effects of the Tax Legislation for the reporting period which includes enactment.

Based on an updated analysis of the foreign tax credit rules relating to the new Tax Legislation, the Company revised its estimate of the realizability of its foreign tax credits, resulting in a net $ 4.8 million benefit during the third quarter of 2018.

were no other significant changes to previous estimates and amounts recorded in 2017 relating to this Tax Legislation.

No income tax expense is reflected in the Consolidated Statements of Operations for income attributable to noncontrolling interests in our Indiana Harbor cokemaking facility or the Partnership prior to the Simplification Transaction discussed in Note 3 .

Excludes the impact of the Final Regulations on qualifying income discussed above.

In 2017, the Company recorded a valuation allowance as a result of changes in future state allocation assumptions.

The tax effects of temporary differences that comprise the net deferred income tax liability from operations are as follows:

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valuation allowance (7)

( 19.6 ) ( 20.9 )

Deferred tax asset, net 75.0 64.3

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(3) Federal net operating loss does not expire.

The Tax Legislation generally limits the deductibility of business interest expense to 30 percent of adjusted taxable income.

This limitation resulted in a deferred tax asset as the interest expense in excess of the limitation is eligible for deduction in future taxable years and has no expiration.

(4) The Tax Legislation generally limits the deductibility of business interest expense to 30 percent (50 percent as a result of CARES Act) of adjusted taxable income.

This limitation resulted in a deferred tax asset in 2019 as the interest expense in excess of the limitation is eligible for deduction in future taxable years and has no expiration.

In 2020, SunCoke applied the final regulations on section 163(j) released by the IRS on July 28, 2020, which resulted in no interest limitation for the year.

(5) State tax credit carryforward, net of federal income tax effects expires in 2021 through 2022.

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(Dollars in millions)

Coal $ 60.6 $ 94.4

Coke 21.1 8.1

Materials, supplies and other 44.9 44.5

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Construction-in-progress 47.4 29.5

Other 42.4 42.3

Gross investment, at cost 2,360.9 2,293.9

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Goodwill and Other Intangible Assets

A significant portion of our logistics business has historically held long-term, take-or-pay contracts with Murray and Foresight, which have been adversely impacted by declining coal export prices and domestic demand.

On October 29, 2019, Murray filed for Chapter 11 bankruptcy and also filed a motion to reject its contract with CMT, which was subsequently authorized by the bankruptcy court.

In addition, during the third quarter Foresight engaged outside counsel and financial advisors to assess restructuring options and has elected to exercise its grace period on its third quarter interest payment to its lenders, which was subsequently extended to February 28, 2020.

A significant portion of our logistics business has historically been from long-term, take-or-pay contracts with Murray American Coal, Inc.

("Murray") and Foresight Energy LLC ("Foresight"), which have been adversely impacted by declining coal export prices and domestic demand.

Murray filed for Chapter 11 bankruptcy on October 29, 2019.

Foresight engaged outside counsel and financial advisors to assess restructuring options during 2019 and subsequently filed for Chapter 11 bankruptcy on March 10, 2020.

Both Murray and Foresight's contracts with CMT were subsequently rejected by the bankruptcy courts.

Impairment of Goodwill

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There were no changes in the carrying amount of goodwill during the fiscal year ended December 31, 2020.

Domestic Coke

Domestic Coke Logistics Total

(Dollars in millions)

Net balances at December 31, 2017 and 2018

Net balances at December 31, 2018 $ 3.4 $ 73.5 $ 76.9

Impairment — ( 73.5 ) ( 73.5 )

Net balances at December 31, 2019 and 2020 $ 3.4 $ — $ 3.4

Impairment of Long-Lived Assets

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As a result, during 2019, the Company recorded a total non-cash, pre-tax long-lived asset impairment charge of $ 173.9 million included in long-lived asset and goodwill impairment on the Consolidated Statements of Operations, all of which was attributable to the Logistics segment.

The charge included an impairment of CMT's long-lived intangible assets and property, plants and equipment of $ 113.3 million and $ 60.6 million , respectively.

The charge included an impairment of CMT's long-lived intangible assets of $ 113.3 million and of CMT's property, plant and equipment of $ 60.6 million.

Components of other intangible assets, net

The components of other intangible assets, net were as follows:

December 31, 2019

December 31, 2018

Weighted - Average Remaining Amortization Years

Gross Carrying Amount

Accumulated Amortization

Gross Carrying Amount

Accumulated Amortization

The components of other intangible assets, net, excluding fully amortized intangible assets, were as follows:

December 31, 2020 December 31, 2019

Weighted - Average Remaining Amortization Years Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net

(Dollars in millions)

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Customer relationships 4 6.7 4.5 2.2 6.7 3.9 2.8

Permits 22 31.7 1.7 30.0 31.7 0.3 31.4

Other 30 1.6 — 1.6 — — —

Total $ 40.0 $ 6.2 $ 33.8 $ 46.1 $ 11.4 $ 34.7

The permits above represent the environmental and operational permits required to operate a coal export terminal in accordance with the U.S.

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(Dollars in millions)

Thereafter 24.4

Asset Retirement Obligations

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Asset retirement obligation at end of year (3)

$ 11.4 $ 15.3

(1) Included in cost of products sold and operating expenses on the Consolidated Statements of Operations.

The current portion of asset retirement obligation liabilities, which totaled $ 0.9 million at December 31, 2019, is classified in accrued liabilities on the Consolidated Balance Sheets.

(2) Revisions of estimated cash flows in 2020 were primarily due to the identification of more cost efficient demolition methods as well as the timing of projected spending on certain obligations.

(3) The current portion of asset retirement obligation liabilities, which totaled zero and $ 0.9 million at December 31, 2020 and December 31, 2019, respectively, is classified in accrued liabilities on the Consolidated Balance Sheets.

Retirement Benefits Plans

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Years Ended December 31,

2020 2019 2018

(Dollars in millions)

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The following assumptions were used to determine postretirement benefit plans expense:

2020 2019 2018

Discount rate 2.90 % 4.00 % 3.35 %

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Years Ended December 31,

2020 2019 2018

(Dollars in millions)

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Actuarial (losses) gains ( 2.0 ) ( 1.0 ) 0.8

$ ( 1.8 ) $ ( 1.0 ) $ 0.7

The following table sets forth the components of the changes in benefit obligations:

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Interest cost 0.7 1.1

Actuarial loss/(gain)

Actuarial loss 2.0 1.0

Benefits paid ( 2.6 ) ( 2.9 )

Benefit obligation at end of year (1)

$ 27.5 $ 27.4

(1) The current portion of retirement benefit liabilities, which totaled $ 2.8 million and $ 2.9 million at December 31, 2020 and 2019, respectively, is classified in accrued liabilities on the Consolidated Balance Sheets.

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Current portion of black lung liability 4.6 4.6

Accrued legal 6.4 2.7

Other 7.9 5.5

Total accrued liabilities $ 49.8 $ 47.3

Debt and Financing Obligation

Total debt and financing obligation consisted of the following:

Debt and Financing Obligations

Total debt and financing obligations consisted of the following:

(Dollars in millions)

7.50 percent senior notes, due 2025 ("2025 Senior Notes")

Term loan, due 2022 ("Term Loan")

$ 587.3 $ 650.0

$ 400.0 revolving credit facility, due 2024 ("Revolving Facility")

SunCoke's revolving credit facility, due 2022 ("2022 Revolving Facility")

Partnership's revolving credit facility, due 2022 ("Partnership Revolver")

5.82 percent financing obligation, due 2021 ("Financing Obligation")

5.35 percent financing obligation, due 2024

Total borrowings $ 690.5 $ 800.5

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On August 5, 2019, SunCoke entered into a supplemental indenture relating to the 2025 Senior Notes, pursuant to which SunCoke has provided a full and unconditional parent guarantee of these obligations.

As of January 1, 2020, the Partnership merged with and into SunCoke Energy Partners Finance Corp.

("Finance Corp"), at which time the 2025 Senior Notes became the senior unsecured obligations of Finance Corp, which is a wholly-owned subsidiary of the Company.

As of January 1, 2020, the Partnership merged with and into Finance Corp., at which time the 2025 Senior Notes became the senior unsecured obligations of Finance Corp, which is a wholly-owned subsidiary of the Company.

Subsequently, Finance Corp and SunCoke entered into a supplemental indenture relating to the 2025 Senior Notes to acknowledge the merger and clarify certain terms of the indenture.

Interest on the 2025 Senior Notes is payable semi-annually in cash in arrears on June 15 and December 15 of each year.

The Company may redeem some or all of the 2025 Senior Notes at any time on or after June 15, 2020 at specified redemption prices plus accrued and unpaid interest, if any, to the redemption date.

Before June 15, 2020, and following certain equity offerings, the Company also may redeem up to 35 percent of the 2025 Senior Notes at a price equal to 107.5 percent of the principal amount, plus accrued and unpaid interest, if any, to the redemption date.

In addition, at any time prior to June 15, 2020, the Company may redeem some or all of the 2025 Senior Notes at a price equal to 100 percent of the principal amount, plus accrued and unpaid interest, if any, to the redemption date, plus a “make-whole” premium.

During the third quarter of 2019, the Company repurchased $ 50.0 million face value of outstanding 2025 Senior Notes for $ 46.6 million of cash payments, resulting in a gain on extinguishment of debt on the Consolidated Statements of Operations of $ 2.2 million , net of the write-off of unamortized debt issuance costs and original issue discount.

The Company may redeem some or all of the 2025 Senior Notes at specified redemption prices plus accrued and unpaid interest, if any, to the redemption date.

On or after June 15, 2020, the Company also may redeem up to 35 percent of the 2025 Senior Notes at a price equal to 105.6 percent of the principal amount, plus accrued and unpaid interest, if any, to the redemption date.

Beginning June 15, 2021, the premium on the redemption price will decrease by 1.9 percent on an annual basis through June 15, 2023.

On or after June 15, 2023 the redemption price will equal 100 percent of the principal amount.

During 2020, the Company repurchased $ 62.7 million face value of outstanding 2025 Senior Notes in the open market for $ 55.9 million of cash payments, resulting in a gain on extinguishment of debt on the Consolidated Statements of Operations of $ 5.7 million, net of the write-off of unamortized debt issuance costs and original issue discount.

The Company is obligated to offer to purchase all or a portion of the 2025 Senior Notes at a price of (a) 101 percent of their principal amount, together with accrued and unpaid interest, if any, to the date of purchase, upon the occurrence of certain change of control events and (b) 100 percent of their principal amount, together with accrued and unpaid interest, if any, to the date of purchase, upon the occurrence of certain asset dispositions.

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The obligations under the credit agreement are guaranteed by certain of the Company’s subsidiaries and secured by liens on substantially all of the Company’s and the guarantors’ assets pursuant to a guarantee and collateral agreement.

On August 5, 2019, the Company amended and restated the Partnership Revolver to provide additional flexibility by increasing the capacity to $ 400.0 million extending the revolving termination date to August 5, 2024 and including SunCoke Energy, Inc.

as a borrower ("Revolving Facility").

This Revolving Facility also replaced the 2022 Revolving Facility.

With proceeds from the Revolving Facility, the Company repaid the outstanding Partnership Revolver balance of $ 100.0 million as well as its outstanding Term Loan for $ 43.3 million .

As a result, the Company recorded a loss on extinguishment of debt on the Consolidated Statements of Operations of $ 0.7 million for the year ended December 31, 2019, representing a write-off of unamortized debt issuance costs.

These debt refinancing activities increased total borrowing capacity by $ 15.0 million and extended maturities by approximately two years , with no impact on our total debt balance.

As of December 31, 2020, the Revolving Facility had letters of credit outstanding of $ 11.8 million and $ 88.3 million outstanding balance, leaving $ 299.9 million available.

During 2019, the Company replaced certain letters of credit totaling $ 11.5 million with new letters of credit, which no longer reduce the Revolving Facility's available balance.

Additionally, the Company has certain letters of credit totaling $ 11.5 million, which do not reduce the Revolving Facility's available balance.

Commitment fees are based on the unused portion of the Revolving Facility at a rate of 0.25 percent.

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The weighted-average interest rate for borrowings outstanding under the Revolving Facility was 2.6 percent during 2020.

There were no borrowings under the 2022 Revolving Facility during 2019, 2018 or 2017.

Partnership Revolver

Prior to the Revolver Refinancing described above, borrowings under the Partnership Revolver bore interest at either (i) a variable rate of LIBOR plus 250 basis points or (ii) an ABR plus 150 basis points.

The spread was subject to change based on the Partnership's consolidated leverage ratio, as defined in the credit agreement.

The weighted-average interest rate for borrowings under the Partnership Revolver was 5.3 percent , 4.8 percent and 3.8 percent during 2019, 2018 and 2017, respectively.

Financing Obligation

The Company's sale-leaseback arrangement of certain coke and logistics equipment has an initial lease period of 60 months and an early buyout option after 48 months to purchase the equipment at 34.5 percent of the original lease equipment cost.

The arrangement is accounted for as a financing transaction, resulting in a financing obligation on the Consolidated Balance Sheets.

The financing obligation is guaranteed by the Partnership.

Under the terms of the Revolving Facility, the Company is subject to a maximum consolidated leverage ratio of 4.50 :

1.00 and a minimum consolidated interest coverage ratio of 2.50 :

The Company has sale-leaseback arrangements related to certain coke and logistics equipment.

The arrangements have an initial period of 48 months beginning December 2020, and an early buyout option after 36 months to purchase the equipment at a fixed rate.

The arrangements are accounted for as financing transactions, resulting in financing obligations on the Consolidated Balance Sheets.

Under the terms of the Revolving Facility, the Company is subject to a maximum consolidated leverage ratio of 4.50 :1.00 and a minimum consolidated interest coverage ratio of 2.50 :1.00.

The Company's debt agreements contains 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.

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2026-Thereafter —

This $ 4.3 million may be paid in 2020 should the Company choose to exercise its early buyout option on the Financing Obligation.

Total $ 690.5

Commitments and Contingent Liabilities

Legal Matters

The EPA issued Notices of Violations (“NOVs”) for our Haverhill and Granite City cokemaking facilities which stemmed from alleged violations of our air emission operating permits for these facilities.

We worked in a cooperative manner with the EPA, the Ohio Environmental Protection Agency and the Illinois Environmental Protection Agency to address the allegations and entered into a consent decree in federal district court in the Southern District of Illinois (the “Court”) with these parties.

The consent decree included a $ 2.2 million civil penalty payment, which was paid in December 2014 , as well as capital projects to improve the reliability of the energy recovery systems and enhance environmental performance at the Haverhill and Granite City facilities.

In the third quarter of 2018, the Court entered an amendment to the consent decree, which provided the Haverhill and Granite City facilities with additional time to perform necessary maintenance on the flue gas desulfurization systems without exceeding consent decree limits.

The emissions associated with this maintenance will be mitigated in accordance with the amendment, and there are no civil penalty payments associated with this amendment performance.

The project at Haverhill was completed in 2016.

The project at Granite City was due to be completed in February 2019, but was instead completed in June 2019, and the Company is in discussions with the government entities regarding, among other things, the timing thereof.

We spent $ 151.5 million related to these environmental projects since work began in 2012.

SunCoke Energy has also received NOVs, Findings of Violations (“FOVs”), and information requests from the EPA related to our Indiana Harbor cokemaking facility, which allege violations of certain air operating permit conditions for this facility.

The Clean Air Act (the “CAA”) provides the EPA with the authority to issue, among other actions, an order to enforce a State Implementation Plan (“SIP”) 30 days after an NOV.

The CAA also authorizes EPA enforcement of other non-SIP requirements immediately after an FOV.

Generally, an NOV applies to SIPs and requires the EPA to wait 30 days, while an FOV applies to all other provisions (such as federal regulations) of the CAA, and has no waiting period.

The NOVs and/or FOVs were received in 2010, 2012, 2013, 2015 and 2016.

After discussions with the EPA and the Indiana Department of Environmental Management (“IDEM”) in 2010, resolution of the NOVs and FOVs was postponed by mutual agreement because of ongoing discussions regarding the NOVs at Haverhill and Granite City.

In January 2012, the Company began working in a cooperative manner to address the allegations with the EPA, the IDEM and Cokenergy, LLC., an independent power producer that owns and operates an energy facility, including heat recovery equipment and a flue gas desulfurization system, that processes hot flue gas from our Indiana Harbor facility to produce steam and electricity and to reduce the sulfur and particulate content of such flue gas.

The EPA, IDEM, SunCoke Energy and Cokenergy, LLC met regularly since those discussions commenced to reach a settlement of the NOVs and FOVs.

Capital projects were underway during this time to address items that would be included in conjunction with a settlement.

Between 2005 and 2012, the EPA and the Ohio Environmental Protection Agency (“OEPA”) issued Notices of Violations (“NOVs”), alleging violations of air emission operating permits for our Haverhill and Granite City cokemaking facilities.

We worked in a cooperative manner with the EPA, the OEPA and the Illinois Environmental Protection Agency to address the allegations and, in November 2014, entered into a consent decree with these parties in federal district court in the Southern District of Illinois.

The consent decree included a civil penalty paid in December 2014, and a commitment to undertake capital projects to improve reliability and enhance environmental performance.

The Haverhill project was completed in 2016, but completion of the Granite City project was delayed to June 2019, with SunCoke agreeing to pay an immaterial amount associated with the delay.

Between 2010 and 2016, SunCoke Energy also received certain NOVs, Findings of Violations (“FOVs”), and information requests from the EPA, alleging violations of air operating permit conditions related to our Indiana Harbor cokemaking facility.

To reach a settlement of these NOVs and FOVs, we met regularly with the EPA, the Indiana Department of Environmental Management and Cokenergy, LLC., an independent power producer that processes hot flue gas

from our Indiana Harbor facility to reduce the sulfur and particulate content and produce steam and electricity.

A consent decree among the parties was entered by the federal district court in the Northern District of Indiana during the fourth quarter of 2018.

The settlement includes a $ 2.5 million civil penalty that was paid in the fourth quarter of 2018.

Further, the settlement consists of capital projects that were completed during the fourth quarter of 2019 to improve reliability and environmental performance of the coke ovens at the facility.

The Company is a party to certain other pending and threatened claims, including matters related to commercial and tax disputes, product liability, employment claims, personal injury claims, premises-liability claims, allegations of exposures to toxic substances and environmental claims.

The settlement included a civil penalty paid in the fourth quarter of 2018, and implementation of certain capital projects, completed during the fourth quarter of 2019, to improve reliability and environmental performance of the coke ovens at the facility.

The Company is a party to certain other 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 unfavorably to the Company.

Management of the Company believes that any liability which may arise from these claims would 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 million.

Black Lung Benefit Liabilities

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Total black lung liability (dollars in millions) (2)

$ 64.6 $ 55.1

(1) The discount rate is determined based on a portfolio of high-quality corporate bonds with maturities that are consistent with the estimated duration of our black lung obligations.

A decrease of 25 basis points in the discount rate would have increased black lung expense by $ 1.6 million in 2020.

(2) The current portion of the black lung liability was $ 4.6 million and $ 4.5 million at December 31, 2019 and 2018 , respectively, and was included in accrued liabilities on the Consolidated Balance Sheets.

(2) The current portion of the black lung liability was $ 4.6 million at both December 31, 2020 and 2019, respectively, and was included in accrued liabilities on the Consolidated Balance Sheets.

The following table summarizes annual black lung payments and expense:

Years Ended December 31,

2020 2019 2018

(Dollars in millions)

Payments $ 6.0 $ 5.2 $ 6.3

$ 15.4 $ 10.9 $ 5.4

(1) Expenses incurred in excess of annual accretion of the black lung liability primarily reflect the impact of changes in discount rates as well as increases in expected future claims as a result of higher refiling and approval rate assumptions.

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.

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.

The Company leases land, office space, equipment, railcars and locomotives.

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Because the Company’s leases do not provide an implicit rate of return, the Company uses its incremental borrowing rate at the inception of a lease to calculate the present value of lease payments.

Our incremental borrowing rate is determined through market sources for secured borrowings and approximates the interest rate at which we could borrow on a collateralized basis with similar terms and payments in similar economic environments.

The Company has elected to apply the short-term lease exception for all asset classes, therefore, excluding all leases with a term of less than 12 months from the balance sheet, and will recognize the lease payments in the period they are incurred.

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The components of lease expense were as follows:

Year ended December 31, 2019

Year ended December 31, 2020 Year ended December 31, 2019

(Dollars in millions)

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Supplemental balance sheet information related to leases was as follows:

Financial Statement Classification

December 31, 2019

Financial Statement Classification December 31, 2020 December 31, 2019

(Dollars in millions)

Operating ROU assets

Deferred charges and other assets

Operating ROU assets Deferred charges and other assets $ 10.8 $ 12.4

Operating lease liabilities:

Current operating lease liabilities

Accrued liabilities

Noncurrent operating lease liabilities

Other deferred credits and liabilities

Current operating lease liabilities Accrued liabilities $ 2.0 $ 1.9

Noncurrent operating lease liabilities Other deferred credits and liabilities 8.2 9.8

Total operating lease liabilities $ 10.2 $ 11.7

The weighted average remaining lease term and weighted average discount rate were as follows:

December 31, 2019

Weighted average remaining lease term of operating leases

December 31, 2020 December 31, 2019

Weighted average remaining lease term of operating leases 7.3 years 7.9 years

Weighted average discount rate of operating leases 4.7 % 4.8 %

Supplemental cash flow information related to leases was as follows:

Year Ended December 31, 2019

Year Ended December 31, 2020 Year Ended December 31, 2019

(Dollars in millions)

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Total lease liabilities $ 10.2

Leases prior to the adoption of ASC 842, "Leases"

The aggregate amount of future minimum annual rental payments applicable to noncancelable leases as of December 31, 2018 were as follows:

(Dollars in millions)

Year ending December 31:

2024-Thereafter

Total rental expense for all operating leases was $ 9.8 million and $ 7.3 million in 2018 and 2017, respectively.

Prior to the adoption of ASC 842, "Leases," certain contracts to sell coke were deemed to contain a lease.

The lease component of the price of coke represented the rental payment for the use of the property, plant and equipment.

The total amount of revenue recognized by the Company for these rentals represented less than 10 percent of consolidated sales and was included in other operating revenues for each of the years ended December 31, 2018 and 2017.

Upon adoption of ASC 842, "Leases," in 2019, these long-term contracts to sell coke were no longer deemed to contain operating leases.

Accumulated Other Comprehensive Loss

The following tables set forth the changes in the balance of accumulated other comprehensive loss, net of tax, by component:

Benefit Plans

Currency Translation Adjustments

Benefit Plans Currency Translation Adjustments Total

(Dollars in millions)

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Other comprehensive loss before reclassifications / adjustments — ( 0.6 ) ( 0.6 )

Amounts reclassified from accumulated other comprehensive loss

Retirement benefit plans funded status adjustment ( 0.7 ) — ( 0.7 )

Recognition of accumulated currency translation loss upon sale of equity method investment (1)

Net current period change in accumulated other comprehensive loss ( 0.7 ) ( 0.6 ) ( 1.3 )

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At December 31, 2020 $ ( 8.2 ) $ ( 8.9 ) $ ( 17.1 )

These accumulated currency translation losses were recognized into income as a result of the sale of our equity method investment in VISA SunCoke.

The tax benefit associated with the Company's benefit plans as of December 31, 2020 and 2019 was $ 2.4 million and $ 2.1 million, respectively.

The increase (decrease) on net income due to reclassification adjustments from accumulated other comprehensive income were as follows (1) :

The (decrease) increase in net income due to reclassification adjustments from accumulated other comprehensive income were as follows (1) :

2020 2019 2018

(Dollars in millions)

Recognition of accumulated currency translation loss upon sale of equity method investment

Recognition of accumulated currency translation loss upon sale of equity method investment in VISA SunCoke $ — $ — $ ( 9.0 )

Amortization of benefit plans to net income:

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Total, net of tax (3)

$ ( 0.1 ) $ — $ ( 8.9 )

(1) Amounts in parentheses indicate debits to net income.

(2) These accumulated other comprehensive (income) loss components are included in the computation of postretirement benefit plan expense (benefit) and included in interest expense, net on the Consolidated Statements of Operations.

See Note 10 .

(3) The related tax cost (benefit) was immaterial for all years presented.

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All awards vest immediately upon a change in control and a qualifying termination of employment as defined by the SunCoke LTPEP.

The plan authorizes the issuance of (i) 1,600,000 shares of SunCoke Energy common stock issuable upon

the adjustment of Sunoco, Inc.

The plan authorizes the issuance of (i) 1,600,000 shares of SunCoke Energy common stock issuable upon the adjustment of Sunoco, Inc.

equity awards in connection with the Separation and Distribution Agreement between Sunoco, Inc.

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Stock Options

There were no stock options granted by the Company during 2020.

The Company granted the following stock options during the years ended December 31, 2019 and 2018, with an exercise price equal to the closing price of our common stock on the date of grant:

Weighted Average Per Share

Exercise Price

Weighted Average Grant Date Fair Value

Number of Shares Exercise Price Weighted Average Grant Date Fair Value

Traditional stock options:

Performance based options:

2019 grant 267,897 $ 9.87 $ 4.09

(1) In order to become exercisable, the performance based options required the closing price of the Company's common stock to reach or exceed $ 14.78 per share for the 2017 grants for any 15 trading days during the three -year period beginning on the grant date.

As this was not achieved, these performance based options were forfeited in 2020.

2018 grant 78,447 $ 10.49 $ 5.38

The stock options vest in three equal annual installments beginning one year from the date of grant.

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The weighted-average fair value of employee stock options granted during the years ended December 31, 2019 and 2018 was based on using the following weighted-average assumptions:

Years Ended December 31,

Risk free interest rate 2 % 3 %

Expected term

Expected term 6 years 6 years

Volatility 53 % 52 %

Dividend yield 2 % — %

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The following table summarizes information with respect to common stock option awards outstanding as of December 31, 2020 and stock option activity during the fiscal year then ended:

Exercise Price

Weighted Average Remaining Contractual Term (years)

Options Weighted

Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate

Intrinsic Value (millions)

Outstanding at December 31, 2019 3,136,831 $ 15.02 4.3 $ 0.3

Exercised ( 2,825 ) $ 3.80

Forfeited ( 33,146 ) $ 12.25

Outstanding at December 31, 2020 3,100,860 $ 15.02 3.2 $ 0.1

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Intrinsic value for stock options is defined as the difference between the current market value of our common stock and the exercise price of the stock options.

Total intrinsic value of stock options exercised during 2018 and 2017 was $ 0.8 million and $ 0.3 million , respectively.

Total intrinsic value of stock options exercised in 2020 was immaterial and was $ 0.8 million on options exercised during 2018.

There were no stock options exercised during 2019.

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The Company granted the following restricted stock units ("RSUs") during the years ended December 31, 2020, 2019 and 2018:

Weighted Average Grant-Date Fair Value

Grant Date Fair Value

Number of RSUs Weighted Average Grant-Date Fair Value per Unit Grant Date Fair Value

(Dollars in millions)

2020 grants 304,332 $ 6.04 $ 1.8

2019 grants 136,425 $ 9.87 $ 1.3

2018 grants 32,128 $ 10.49 $ 0.3

The RSUs vest in three annual installments beginning one year from the date of grant.

The following table summarizes information with respect to RSUs outstanding as of December 31, 2020 and RSU activity during the fiscal year then ended:

RSUs Weighted

Average Grant-

Date Fair Value

Date Fair Value per Unit

Nonvested at December 31, 2019 165,384 $ 9.95

Granted 304,332 $ 6.04

Vested ( 63,729 ) $ 9.97

Forfeited — $ —

Nonvested at December 31, 2020 405,987 $ 7.02

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The Company granted the following PSUs during the years ended December 31, 2020, 2019 and 2018:

Fair Value per Share

Grant Date Fair Value

Number of PSUs Fair Value per Unit Grant Date Fair Value

(Dollars in millions)

2020 grant (1)

228,248 $ 6.70 $ 1.5

2019 grant (1)

227,378 $ 10.79 $ 2.5

2018 grant (1)

96,389 $ 11.36 $ 1.1

(1) The service period for the 2020, 2019, and 2018 PSUs ends on December 31, 2022, 2021 and 2020, and the awards will vest during the first quarter of 2023, 2022 and 2021, respectively.

(2) The Company granted 237,610 PSUs in February 2017, for which the service period will end on December 31, 2019, and 148,148 PSUs in December 2017, for which the service period will end on December 31, 2020.

These awards will vest during the first quarter of 2020 and 2021, respectively.

The PSU grants were split 50 /50 between the Company's three -year cumulative Adjusted EBITDA performance measure and the Company's three -year average pre-tax return on capital ("ROIC") performance measure for its coke and logistics businesses and unallocated corporate expenses.

The number of PSU's ultimately awarded will be determined by the Adjusted EBITDA and ROIC performance 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 50 percent and 150 percent of the 2017 award and between 25 percent and 125 percent of the 2018 and 2019 awards) of the Company's final performance measure results.

The number of PSUs ultimately awarded will be determined by the Adjusted EBITDA and ROIC performance 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 75 percent and 125 percent of the 2020 awards, and between 25 percent and 125 percent of the 2019 and 2018 awards) of the Company's final performance measure results.

The award may vest between zero and 250 percent of the original units granted.

The fair value of the PSUs granted 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.

The number of PSUs ultimately awarded for the 2020 grants will be determined by the Adjusted EBITDA and ROIC performance versus targets, and is not impacted by the TSR Modifier.

The following table summarizes information with respect to unearned PSUs outstanding as of December 31, 2020 and PSU activity during the fiscal year then ended:

PSUs Weighted

Average Grant-

Date Fair Value

Date Fair Value per Unit

Nonvested at December 31, 2019 575,363 $ 11.20

Performance adjustments

Granted 228,248 $ 6.70

Vested ( 92,992 ) $ 11.40

Forfeited ( 25,316 ) $ 11.40

Nonvested at December 31, 2020 685,303 $ 9.76

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The Company issued a grant date fair value award of $ 2.0 million, $ 0.6 million and $ 1.0 million during the years ended December 31, 2020, 2019 and 2018, respectively, for which the service periods end on December 31, 2023, 2022 and 2021, respectively, and the awards will vests during the first quarter of 2024, 2023 and 2022, respectively.

The awards are

split 50 /50 between the Company's three cumulative Adjusted EBITDA performance and the Company's three-year average pre-tax return on capital performance measure for its coke and logistics businesses and unallocated corporate expense, consistent with the PSU awards.

The 2019 and 2018 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 performance measure for its coke and logistics businesses and unallocated corporate expense, consistent with the PSU awards.

The 2020 award is also split 50 /50 between the Adjusted EBITDA and ROIC metrics, consistent with the PSU awards, but is not impacted by the TSR modifier.

See above for details.

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Compensation Expense (1)

Unrecognized Compensation Cost

Recognition Period

(Dollars in millions)

Net of tax Unrecognized Compensation Cost Recognition Period

(Dollars in millions) (Dollars in millions) (Years)

Equity Awards:

Stock Options $ 0.3 $ 1.1 $ 0.5 $ 0.3 $ 0.9 $ 0.4 $ 0.1 1.1

RSUs 1.9 1.0 0.4 1.5 0.9 0.3 $ 0.5 1.9

PSUs 1.5 2.2 1.9 1.2 1.8 1.7 $ 1.5 1.5

Total equity awards $ 3.7 $ 4.3 $ 2.8 $ 3.0 $ 3.6 $ 2.4

Liability Awards:

Cash RSUs $ 0.8 $ 0.9 $ 0.8 $ 0.6 $ 0.7 $ 0.6 $ 0.6 1.9

Cash incentive award 0.6 0.4 0.9 0.4 0.3 0.7 $ 1.2 1.9

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Years Ended December 31,

2020 2019 2018

(Shares in millions)

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Years Ended December 31,

2020 2019 2018

(Shares in millions)

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Performance stock units 0.3 0.4 0.1

Total 3.7 3.5 2.8

Fair Value Measurements

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Certain assets and liabilities are measured at fair value on a recurring basis.

The Company’s cash equivalents, which amounted to $ 5.1 million and $ 3.2 million at December 31, 2019 and 2018 , respectively, were measured at fair value based on quoted prices in active markets for identical assets.

The Company’s cash equivalents were measured at fair value at December 31, 2020 and December 31, 2019 based on quoted prices in active markets for identical assets.

These inputs are classified as Level 1 within the valuation hierarchy.

CMT Contingent Consideration

In connection with the CMT acquisition, the Company entered into a contingent consideration arrangement that runs through 2022 and requires us to make future payments to The Cline Group based on future volume over a specified threshold, price and contract renewals.

The fair value of the contingent consideration was estimated based on a probability-weighted analysis using significant inputs that are not observable in the market, or Level 3 inputs.

Key assumptions included probability adjusted levels of handling services provided by CMT, anticipated price per ton on future sales and probability of contract renewal, including length of future contracts, volume commitment, and anticipated price per ton.

Due to a change in market and customer conditions further described in Note 8 , we decreased our forecasted projections, which were classified as Level 3 inputs.

In connection with the CMT acquisition, the Company entered into a contingent consideration arrangement that required us to make future payments through 2022 to The Cline Group based on future volume over a specified threshold,

price and contract renewals.

Prior to the termination of the related contract in 2020, the fair value of the contingent consideration was estimated based on a probability-weighted analysis using significant inputs that are not observable in the market, or Level 3 inputs.

Due to the change in market and customer conditions in 2019, further described in Note 8, we decreased our forecasted projections, which were classified as Level 3 inputs.

The decrease in forecasted projections, as well as a payment made in 2019, resulted in a reduction of the contingent consideration liability, primarily included in other deferred credits and liabilities on the Consolidated Balance Sheets, to zero at December 31, 2019 from $ 5.0 million at December 31, 2018.

During 2018, CMT achieved record volumes and the Company increased CMT’s throughput volume projections in future periods for certain customers due to favorable coal prices, which were expected to increase export volume through CMT.

The combined impact of the strong 2018 volumes and improved volume projections resulted in an increase of $ 2.5 million to the fair value of the contingent consideration balance.

During 2017, as a result of adverse mining conditions faced by one of our thermal coal customers, as well as fluctuating export coal pricing, the Company lowered CMT's throughput volume, which reduced the contingent consideration liability balance by $ 1.7 million .

The changes in fair value discussed above were recorded to costs of products sold and operating expenses on the Consolidated Statements of Operations during 2019, 2018 and 2017.

During 2018, volumes and improved volume projections resulted in an increase of $ 2.5 million to the fair value of the contingent consideration balance.

Changes in fair value were recorded to costs of products sold and operating expenses on the Consolidated Statements of Operations during 2019 and 2018.

Certain Financial Assets and Liabilities not Measured at Fair Value

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Revenue from Contracts with Customers

Substantially all our coke sales are made pursuant to long-term, take-or-pay agreements with AM USA, AK Steel and U.S.

Steel, who are three of the largest blast furnace steelmakers in North America.

The take-or-pay provisions of our agreements require us to deliver minimum annual tonnage, which varies by contract, but covers at least 90 percent of each facility's nameplate capacity.

Substantially all our coke sales are made pursuant to long-term, take-or-pay agreements with Cliffs Steel and U.S.

Steel, who are two of the largest blast furnace steelmakers in North America.

The take-or-pay provisions of our agreements require our customers to purchase all or substantially all of the coke volumes produced 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, which vary by contract, and have historically been approximately 4.1 million tons, covering at least 90 percent of each facility's nameplate capacity.

The take-or-pay provisions also require our customers to purchase such volumes of coke or pay the contract price for any tonnage they elect not to take.

These coke sales agreements have an average remaining term of approximately four years , and to date, our coke customers have satisfied their obligations under these agreements.

As a result of the impacts the COVID-19 global pandemic has had on our customers, in July 2020, SunCoke entered into customer agreement amendments, providing near-term coke supply relief for our customers, in exchange for extending certain agreements.

Subsequent to these amendments, in October 2020, the contract expiration date of the Haverhill II contract with Cliffs Steel was further extended from June 2023 to June 2025.

Our coke sales agreements have approximately 17.6 million tons of unsatisfied or partially unsatisfied performance obligations, which are expected to be delivered over an average remaining contract term of approximately six years .

Our coke sales prices include an operating cost component, a coal cost component and a return of capital component.

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The handling and mixing services consist primarily of two performance obligations, unloading and loading of materials.

Our logistics business has take-or-pay agreements requiring us to handle approximately 4 million tons annually, excluding our agreement with Foresight, which we anticipate will be renegotiated in 2020, resulting in lower volumes and price.

The take-or-pay provisions in these agreements require our customers to purchase such handling services or pay the contract price for services they elect not to take.

Estimated take-or-pay revenue of approximately $ 14 million from all of our multi-year logistics contracts, excluding our agreement with Foresight, is expected to be recognized over the next four years for unsatisfied or partially unsatisfied performance obligations as of December 31, 2019.

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.

Billings to CMT customers for take-or-pay volume shortfalls based on pro-rata volume commitments under take-or-pay contracts that are in excess of billings earned for services provided are recorded as contract liabilities and characterized as deferred revenue on the Consolidated Balance Sheets.

Deferred revenue is recognized at the earliest of i) when the performance obligation is satisfied;

ii) when the performance obligation has expired, based on the terms of the contract;

or iii) when the likelihood that the customer would exercise its right to the performance obligation becomes remote.

The following table provides changes in the Company's deferred revenue:

(Dollars in millions)

Beginning balance

Reclassification of the beginning contract liabilities to revenue, as a result of performance obligation satisfied

Billings in excess of services performed, not recognized as revenue

Ending balance

Estimated take-or-pay revenue of approximately $ 35 million from all of our multi-year logistics contracts is expected to be recognized over the next three years for unsatisfied or partially unsatisfied performance obligations as of December 31, 2020.

Our energy sales are made pursuant to either steam or energy supply and purchase agreements or is sold into the regional power market.

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Years Ended December 31,

2020 2019 2018

(Dollars in millions)

Sales and other operating revenue:

Cokemaking $ 1,218.9 $ 1,434.9 $ 1,250.5

Energy 43.6 51.1 49.7

Logistics 35.5 72.1 101.0

Operating and licensing fees 31.6 38.4 40.4

Other 3.4 3.8 9.3

Sales and other operating revenue $ 1,333.0 $ 1,600.3 $ 1,450.9

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Years Ended December 31,

2020 2019 2018

(Dollars in millions)

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Domestic Coke $ 1,265.4 $ 1,489.1 $ 1,308.3

Brazil Coke 31.6 38.4 40.4

Logistics 36.0 72.8 102.2

Logistics intersegment sales 22.1 26.3 24.5

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Domestic Coke $ 217.0 $ 226.7 $ 207.9

Brazil Coke 13.5 16.0 18.4

Logistics 17.3 42.6 72.6

Corporate and Other (1)

( 41.9 ) ( 37.4 ) ( 35.7 )

Total Adjusted EBITDA $ 205.9 $ 247.9 $ 263.2

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Domestic Coke $ 119.1 $ 120.5 $ 114.4

Brazil Coke 0.5 0.6 0.7

Logistics 12.8 21.4 25.1

Corporate and Other 1.3 1.3 1.4

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Domestic Coke $ 60.0 $ 105.2 $ 94.9

Corporate and Other

Brazil Coke 0.4 0.3 0.2

Logistics 13.5 4.6 5.2

Total capital expenditures $ 73.9 $ 110.1 $ 100.3

(1) Corporate and Other includes the activity from our legacy coal mining business, which incurred Adjusted EBITDA losses of $ 13.2 million, $ 11.2 million, and $ 9.8 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Additionally, Corporate and Other includes foundry related research and development costs of $ 3.9 million during 2020.

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

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Domestic Coke $ 1,358.9 $ 1,434.2

Brazil Coke 17.7 14.6

Logistics 199.5 200.8

Corporate and Other 31.8 102.0

Segment assets, excluding income tax receivable 1,607.9 1,751.6

Tax receivable 5.5 2.2

Total assets $ 1,613.4 $ 1,753.8

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, (gain) loss on extinguishment of debt, changes to our contingent consideration liability related to our acquisition of CMT, loss on the disposal of our interest in VISA SunCoke and/or transaction costs incurred as part of the Simplification Transaction.

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Additionally, other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

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

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

Years Ended December 31,

2020 2019 2018

(Dollars in millions)

Net (loss) income

Net income (loss) attributable to SunCoke Energy, Inc.

$ 3.7 $ ( 152.3 ) $ 26.2

Net income attributable to noncontrolling interests 5.1 3.9 20.8

Net income (loss) $ 8.8 $ ( 148.4 ) $ 47.0

Long-lived asset and goodwill impairment — 247.4 —

Depreciation and amortization expense

133.7 143.8 141.6

Interest expense, net 56.3 60.3 61.4

(Gain) loss on extinguishment of debt, net ( 5.7 ) ( 1.5 ) 0.3

Income tax (benefit) expense

Income tax expense (benefit) 10.3 ( 54.7 ) 4.6

Contingent consideration adjustments (1)

Transaction costs (3)

Expiration of land deposits and write-off of costs related to potential new cokemaking facility (4)

— ( 4.2 ) 2.5

Restructuring costs (2)

Simplification Transaction costs (3)

Loss from equity method investment — — 5.4

Adjusted EBITDA

$ 205.9 $ 247.9 $ 263.2

Adjusted EBITDA attributable to noncontrolling interests (4)

9.1 40.7 82.0

Adjusted EBITDA attributable to SunCoke Energy, Inc.

In conjunction with the adoption of ASU 2017-07, the non-service type expense associated with the postretirement benefit plans was excluded from operating income and recorded in interest expense, net on the Consolidated Statements of Operations during the periods presented.

Amounts in prior periods were immaterial, and therefore, were not reclassified in the reconciliation of Adjusted EBITDA to net income.

$ 196.8 $ 207.2 $ 181.2

(1) In connection with the CMT acquisition, the Company entered into a contingent consideration arrangement that requires the Company to make future payments to the seller based on future volume over a specified threshold, price and contract renewals.

Adjustments to the fair value of the contingent consideration were primarily the result of modifications to the volume forecast.

Customer events during the third quarter of 2019 reduced the contingent consideration liability to zero .

See Note 18 .

This liability was written to zero during the third quarter of 2019, and the related contract was terminated in 2020.

(2) Charges related to a company-wide restructuring and cost-reduction initiative.

(3) Costs expensed primarily by the Partnership associated with the Simplification Transaction.

In 2014, we finalized the required permitting and engineering plan for a potential new cokemaking facility, however, the project was later terminated.

As a result, during 2017 the Company wrote-off previously capitalized engineering costs and land deposits for a potential new cokemaking facility of $ 5.3 million .

These costs were included in selling, general and administrative expenses on the Consolidated Statements of Operations.

(4) Reflects noncontrolling interests in Indiana Harbor and the portion of the Partnership owned by public unitholders prior to the Simplification Transaction.

Selected Quarterly Data (unaudited)

(Dollars in millions)

Sales and other operating revenue

Gross profit (2)

Net income (loss)

Net income (loss) attributable to noncontrolling interests

Net income (loss) attributable to SunCoke Energy, Inc.

Earnings (loss) attributable to SunCoke Energy, Inc.

per common share:

During the third quarter of 2019, the Company recorded non-cash, pre-tax asset impairment charges to the Logistics segment on the Consolidated Statements of Operations of $ 247.4 million .

Gross profit equals sales and other operating revenue less cost of products sold and operating expenses and depreciation and amortization.

Basic and diluted earnings per share are computed independently for each of the quarters presented.

Therefore, the sum of quarterly basic and diluted per share information may not equal annual basic and diluted earnings per share.

Supplemental Condensed Consolidating Financial Information

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 this condensed consolidating financial information in connection therewith.

The following condensed consolidating financial information has been prepared and presented pursuant to SEC Rule 3-10(e) of Regulation S-X.

For purposes of the following information, SunCoke Energy is referred to as “Issuer.” Certain 100 percent owned subsidiaries of the Company, including the Partnership, are expected to serve as guarantors of obligations (“Guarantor Subsidiaries”) included in the shelf registration statement.

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 indenture governing the 2025 Senior Notes contains customary provisions, which would potentially restrict the ability of the Partnership to make distributions or loans to the Company under certain circumstances.

For the year ended December 31, 2019, less than 25 percent of net assets were restricted by these indenture provisions.

All other consolidated subsidiaries of the Company, including Indiana Harbor and certain international and coal mining entities, are collectively referred to as “Non-Guarantor Subsidiaries.”

In connection with the filing of the new shelf registration in 2019, the prior period financial statements in this footnote have been reclassified to reflect the “Guarantor Subsidiaries” and “Non-Guarantor Subsidiaries” as defined in the new shelf registration.

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;

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.

The following supplemental condensed combining and consolidating financial information reflects the Issuer’s separate accounts, the combined accounts of the Guarantor Subsidiaries, the combined accounts of the Non-Guarantor Subsidiaries, the combining and consolidating adjustments and eliminations and the Issuer’s consolidated accounts for the dates and periods indicated.

For purposes of the following condensed combining and consolidating information, the Issuer’s investments in its subsidiaries and the Guarantor and Non-Guarantor Subsidiaries’ investments in its subsidiaries are accounted for under the equity method of accounting.

SunCoke Energy, Inc.

Condensed Consolidating Statement of Operations

Years Ended December 31, 2019

(Dollars in millions)

Consolidating

Sales and other operating revenue

Equity in (loss) earnings of subsidiaries

Total revenues, net of equity in earnings of subsidiaries

Costs and operating expenses

Cost of products sold and operating expenses

Selling, general and administrative expenses

Depreciation and amortization expenses

Long-lived asset and goodwill impairment

Total costs and operating expenses

Operating loss

Interest (income) expense, net - affiliate

Interest expense, net

Total interest expense, net

Loss (gain) on extinguishment of debt

Loss before income tax benefit

Income tax benefit

Net income attributable to noncontrolling interests

Net loss attributable to SunCoke Energy, Inc.

Comprehensive loss

Comprehensive income attributable to noncontrolling interests

Comprehensive loss attributable to SunCoke Energy, Inc.

SunCoke Energy, Inc.

Condensed Consolidating Statement of Operations

Years Ended December 31, 2018

(Dollars in millions)

Consolidating

Sales and other operating revenue

Equity in earnings (loss) of subsidiaries

Total revenues, net of equity in earnings (loss) of subsidiaries

Costs and operating expenses

Cost of products sold and operating expenses

Selling, general and administrative expenses

Depreciation and amortization expenses

Total costs and operating expenses

Operating income (loss)

Interest (income) expense, net - affiliate

Interest expense, net

Total interest expense, net

Gain on extinguishment of debt

Income (loss) before income tax (benefit) expense

Income tax (benefit) expense

Loss from equity method investment

Net income (loss)

Net income (loss) attributable to noncontrolling interests

Net income (loss) attributable to SunCoke Energ y, Inc.

Comprehensive income (loss)

Comprehensive income (loss) attributable to noncontrolling interests

Comprehensive income (loss) attributable to SunCoke Energ y, Inc.

SunCoke Energy, Inc.

Condensed Consolidating Statement of Operations

Years Ended December 31, 2017

(Dollars in millions)

Consolidating

Sales and other operating revenue

Equity in earnings (loss) of subsidiaries

Total revenues, net of equity in earnings (loss) of subsidiaries

Costs and operating expenses

Cost of products sold and operating expenses

Selling, general and administrative expenses

Depreciation and amortization expenses

Total costs and operating expenses

Operating income (loss)

Interest (income) expense, net - affiliate

Interest expense, net

Total interest expense, net

Loss on extinguishment of debt, net

Income before income tax (benefit) expense and loss (gain) from equity method investment

Income tax (benefit) expense

Net income (loss)

Net loss attributable to noncontrolling interests

Net income (loss) attributable to SunCoke Energy, Inc.

Comprehensive income (loss)

Comprehensive loss attributable to noncontrolling interests

Comprehensive income (loss) attributable to SunCoke Energy, Inc.

SunCoke Energy, Inc.

Condensed Consolidating Balance Sheet

December 31, 2019

(Dollars in millions, except per share amounts)

Consolidating

Cash and cash equivalents

Income tax receivable

Other current assets

Advances to affiliates

Total current assets

Notes receivable from affiliate

Properties, plants and equipment, net

Other intangibles assets, net

Deferred income taxes

Deferred charges and other assets

Investment in subsidiaries

Liabilities and Equity

Advances from affiliate

Accounts payable

Accrued liabilities

Deferred revenue

Current portion of long-term debt and financing

Interest payable

Income taxes payable

Total current liabilities

Long term-debt and financing obligation

Payable to affiliate

Accrual for black lung benefits

Retirement benefit liabilities

Deferred income taxes

Asset retirement obligations

Other deferred credits and liabilities

Total liabilities

Total SunCoke Energy, Inc.

stockholders’ equity

Noncontrolling interests

Total liabilities and equity

SunCoke Energy, Inc.

Condensed Consolidating Balance Sheet

December 31, 2018

(Dollars in millions, except per share amounts)

Consolidating

Cash and cash equivalents

Income taxes receivable

Other current assets

Advances to affiliate

Total current assets

Notes receivable from affiliate

Properties, plants and equipment, net

Other intangible assets, net

Deferred income taxes

Deferred charges and other assets

Investment in subsidiaries

Liabilities and Equity

Advances from affiliate

Accounts payable

Accrued liabilities

Deferred Revenue

Current portion of long-term debt and financing obligation

Interest payable

Income taxes payable

Total current liabilities

Long-term debt and financing obligation

Payable to affiliate

Accrual for black lung benefits

Retirement benefit liabilities

Deferred income taxes

Asset retirement obligations

Other deferred credits and liabilities

Total liabilities

Total SunCoke Energy, Inc.

stockholders’ equity

Noncontrolling interests

Total liabilities and equity

SunCoke Energy, Inc.

Condensed Consolidating Statement of Cash Flows

Years Ended December 31, 2019

(Dollars in millions)

Consolidating

Cash Flows from Operating Activities:

Net income (loss)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Long-lived asset and goodwill impairment

Depreciation and amortization expense

Deferred income tax (benefit) expense

Payments (in excess of) less than expense for postretirement plan

Share-based compensation expense

Equity in earnings (loss) of subsidiaries

Loss (gain) on extinguishment of debt

Changes in working capital pertaining to operating activities:

Accounts payable

Accrued liabilities

Deferred revenue

Interest payable

Net cash (used in) provided by operating activities

Cash Flows from Investing Activities:

Capital expenditures

Other investing activities

Net cash used in investing activities

Cash Flows from Financing Activities:

Repayment of long-term debt

Debt issuance costs

Proceeds from revolving facility

Repayment of revolving facility

Repayment of financing obligation

Cash distributions to noncontrolling interests

Share repurchases

Dividends paid

Other financing activities

Net (decrease) increase in advances from affiliates

Net cash provided by (used in) financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash, cash equivalents at end of year

SunCoke Energy, Inc.

Condensed Consolidating Statement of Cash Flows

Years Ended December 31, 2018

(Dollars in millions)

Consolidating

Cash Flows from Operating Activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:

Depreciation and amortization expense

Deferred income tax benefit

Payments (in excess of) less than expense for postretirement plan

Share-based compensation expense

Equity in (loss) earnings of subsidiaries

Loss from equity method-investment

Loss on extinguishment of debt

Changes in working capital pertaining to operating activities:

Accounts payable

Accrued liabilities

Deferred revenue

Interest payable

Net cash (used in) provided by operating activities

Cash Flows from Investing Activities:

Capital expenditures

Sale of equity method investment

Other investing activities

Net cash used in investing activities

Cash Flows from Financing Activities:

Proceeds from issuance of long-term debt

Repayment of long-term debt

Debt issuance costs

Proceeds from revolving facility

Repayment of revolving facility

Repayment of financing obligation

Cash distributions to noncontrolling interests

Acquisition of additional interest in the Partnership

Other financing activities

Net increase (decrease) in advances from affiliates

Net cash provided by (used in) financing activities

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of year

Cash, cash equivalents and restricted cash at end of year

SunCoke Energy, Inc.

Condensed Consolidating Statement of Cash Flows

December 31, 2017

(Dollars in millions)

Consolidating

Cash Flows from Operating Activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:

Depreciation and amortization expense

Deferred income tax (benefit) expense

Payments in excess of expense for postretirement plan benefits

Share-based compensation expense

Equity in (loss) earnings of subsidiaries

Loss on extinguishment of debt

Changes in working capital pertaining to operating activities:

Accounts payable

Accrued liabilities

Deferred revenue

Interest payable

Net cash (used in) provided by operating activities

Cash Flows from Investing Activities:

Capital expenditures

Return of Brazilian investment

Net cash used in investing activities

Cash Flows from Financing Activities:

Proceeds from issuance of long-term debt

Repayment of long-term debt

Debt issuance costs

Proceeds from revolving facility

Repayment of revolving facility

Repayment of financing obligation

Cash distributions to noncontrolling interests

Acquisition of additional interest in the Partnership

Other financing activities

Net increase (decrease) in advances from affiliates

Net cash provided by (used in) financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of year

Cash, cash equivalents and restricted cash at end of year

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data