What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-24 compared with 2021-02-25 · 169 added, 240 removed, 976 unchanged (30% of the section changed)

12 unchanged sentences

Customer Concentrations

Properties, Plants, and Equipment, Net

Goodwill and Other Intangible Assets

Properties, Plants, and Equipment

Intangible Assets

Asset Retirement Obligations

19 unchanged sentences

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for leases effective January 1, 2019 due to the adoption of Accounting Standards Update 2016-02, Leases (Topic 842), and its subsequent amendments.

Basis for Opinions

14 unchanged sentences

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to

permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

36 unchanged sentences

Interest expense, net 42.5 56.3 60.3

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

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

Loss (gain) on extinguishment of debt, net 31.9 ( 5.7 ) ( 1.5 )

Income (loss) before income tax expense (benefit) 67.1 19.1 ( 203.1 )

Income tax expense (benefit) 18.3 10.3 ( 54.7 )

Loss from equity method investment

Net income (loss) 48.8 8.8 ( 148.4 )

17 unchanged sentences

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)

Reclassifications of actuarial loss amortization and prior service benefit to earnings (net of related tax benefit of $ 0.1 million in 2021 and zero for 2020 and 2019)

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

1.0 ( 1.6 ) ( 0.7 )

Currency translation adjustment ( 0.9 ) ( 1.2 ) ( 0.6 )

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

Comprehensive income (loss) 49.2 6.1 ( 149.7 )

15 unchanged sentences

1,287.9 1,328.0

Goodwill and other intangible assets, net 37.2 38.1

Intangible assets, net 35.2 37.2

Deferred charges and other assets

4 unchanged sentences

Accrued liabilities

Current portion of financing obligations 3.0 2.9

Current portion of financing obligation 3.2 3.0

Interest payable

Total current liabilities

Long-term debt and financing obligations 673.9 780.0

Long-term debt and financing obligation 610.4 673.9

Accrual for black lung benefits

11 unchanged sentences

issued 98,496,809 and 98,177,941 shares at December 31, 2021 and 2020, respectively

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

Treasury stock, 15,404,482 shares at both December 31, 2021 and 2020

( 184.0 ) ( 184.0 )

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Deferred income tax expense (benefit) 9.3 12.1 ( 63.1 )

Payments in excess of expense for postretirement plan benefits

( 1.7 ) ( 1.9 ) ( 2.4 )

Share-based compensation expense 6.1 3.8 4.5

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

Loss from equity method investment — — 5.4

Loss (gain) on extinguishment of debt, net 31.9 ( 5.7 ) ( 1.5 )

Changes in working capital pertaining to operating activities:

9 unchanged sentences

Capital expenditures ( 98.6 ) ( 73.9 ) ( 110.1 )

Sale of equity method investment — — 4.0

Other investing activities ( 0.7 ) ( 1.4 ) 0.3

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Repayment of long-term debt ( 609.3 ) ( 55.9 ) ( 90.5 )

Debt issuance costs — ( 2.1 ) ( 0.5 )

Proceeds from revolving facility 690.1 629.9 408.6

1 unchanged sentence

Proceeds from financing obligation — 10.0 —

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

Repayment of financing obligation ( 2.9 ) ( 3.0 ) ( 2.9 )

Debt issuance costs ( 12.0 ) — ( 2.1 )

Dividends paid ( 20.1 ) ( 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 )

1 unchanged sentence

Net cash used in financing activities ( 118.4 ) ( 131.2 ) ( 120.7 )

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

Net increase (decrease) in cash and cash equivalents 15.4 ( 48.7 ) ( 48.6 )

Cash and cash equivalents at beginning of year 48.4 97.1 145.7

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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 — — — — — — 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

— — — — — ( 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

Share-issuances, net of shares withheld for taxes 226,845 — — — 0.7 — — 0.7 — 0.7

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

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

(See Accompanying Notes)

SunCoke Energy, Inc.

Consolidated Statements of Equity

Common Stock Treasury Stock Additional

Capital Accumulated

Comprehensive Loss Retained

(Deficit) Total SunCoke

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At December 31, 2020 98,177,941 $ 1.0 15,404,482 $ ( 184.0 ) $ 715.7 $ ( 17.1 ) $ ( 46.6 ) $ 469.0 $ 31.9 $ 500.9

Net income — — — — — — 43.4 43.4 5.4 48.8

Reclassification of prior service cost and actuarial loss amortization to earnings, net of tax — — — — — 0.3 — 0.3 — 0.3

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

— — — — — 1.0 — 1.0 — 1.0

Currency translation adjustment — — — — — ( 0.9 ) — ( 0.9 ) — ( 0.9 )

Share-based compensation expense — — — — 6.1 — — 6.1 — 6.1

Share issuances, net of shares withheld for taxes 318,868 — — — ( 0.6 ) — — ( 0.6 ) — ( 0.6 )

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

At December 31, 2021 98,496,809 $ 1.0 15,404,482 $ ( 184.0 ) $ 721.2 $ ( 16.7 ) $ ( 23.4 ) $ 498.1 $ 37.3 $ 535.4

(See Accompanying Notes)

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("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.

In order to further diversify our business and customer base, we have entered the foundry coke market.

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.

We began producing and selling foundry coke on a commercial scale in 2021.

We also began selling blast furnace coke into the export coke market in 2021, utilizing capacity in excess of that reserved for our long-term, take-or-pay agreements.

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.

1 unchanged sentence

We have constructed the only greenfield cokemaking facilities in the U.S.

in approximately 30 years and are the only North American coke producer that utilizes heat recovery technology in the cokemaking process.

in over 30 years and are the only North American coke producer that utilizes heat recovery technology in the cokemaking process.

We provide steam pursuant to steam supply and purchase agreements with our customers.

1 unchanged sentence

Our logistics business provides handling and/or mixing services to steel, coke (including some of our domestic cokemaking facilities), electric utility, coal producing and other manufacturing based customers.

The logistics business has terminals in Indiana, West Virginia, Virginia, and Louisiana with collective capacity to mix and/or transload more than 40 million tons of coal and other aggregates annually and has total storage capacity of approximately 3 million tons.

Incorporated in Delaware in 2010 and headquartered in Lisle, Illinois, we became a publicly-traded company in 2011, and our stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “SXC.”

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On June 28, 2019, the Company acquired the outstanding units of the Partnership not already owned by SunCoke, at which time the Partnership became a wholly-owned subsidiary of SunCoke.

As of January 1, 2020, the Partnership merged with and into SunCoke Energy Partners Finance Corp., which is also a wholly-owned subsidiary of the Company.

Net income attributable to noncontrolling interest represents the common public unitholders’ interest in the Partnership prior to the transaction discussed in Note 3 as well as a 14.8 percent third-party interest in our Indiana Harbor cokemaking facility.

On January 1, 2020, the Partnership merged with and into SunCoke Energy Partners Finance Corp., which is also a wholly-owned subsidiary of the Company.

Net income attributable to noncontrolling interest represents a 14.8 percent third-party interest in our Indiana Harbor cokemaking facility as well as the common public unitholders’ interest in the Partnership prior to the transaction discussed in Note 3.

Summary of Significant Accounting Policies

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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 primarily 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 coke supply agreements to record lower of cost or net realizable value inventory adjustments.

Properties, Plants and Equipment

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Normal repairs and maintenance costs are expensed as incurred.

Goodwill, which represents the excess of the purchase price over the fair value of net assets acquired, is tested for impairment as of October 1 of each year, or when events occur or circumstances change that would, more likely than not, reduce the fair value of a reporting unit to below its carrying value.

The Company performs its annual goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount.

The Company would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value.

Intangible Assets

45 unchanged sentences

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” ASU 2016-02 requires leases to be recognized as assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months.

Subsequently, the FASB has issued various ASUs to provide further clarification around certain aspects of ASC 842, “Leases.” We adopted the standard effective January 1, 2019 using the modified retrospective transition approach and elected not to adjust prior comparative periods.

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

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.

No accounting pronouncements adopted during the year ended December 31, 2021 had a material impact on the Company's consolidated financial statements.

Labor Concentrations

As of December 31, 2020, we have approximately 841 employees in the U.S.

Approximately 41 percent of our domestic employees, principally at our cokemaking operations, are represented by the United Steelworkers union under various contracts.

As of December 31, 2021, we have 848 employees in the U.S.

Approximately 41 percent of our domestic employees, principally at our cokemaking operations, are represented by the United Steelworkers union under various

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

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.

Labor agreements at KRT, Lake Terminal, and Indiana Harbor will expire on April 30, 2022, June 30, 2022, and September 1, 2022, respectively.

We will negotiate the renewal of these agreements in 2022 and do not anticipate any work stoppages.

As of December 31, 2021, we have 279 employees at the cokemaking facility in Vitória, Brazil, all of whom are represented by a union under a labor agreement.

During 2021, the labor agreement at our Vitória, Brazil facility was renewed for an additional year, and it expires on November 30, 2022.

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Additionally, the Company incurred transaction costs totaling $ 11.0 million, of which $ 5.4 million were incurred by SunCoke and were recorded as a reduction to additional paid-in capital on the Consolidated Balance Sheets at December 31, 2019.

The remaining transaction costs were incurred by the Partnership, resulting in $ 4.9 million and $ 0.4 million of expense included in selling, general and administrative expenses on the Consolidated Statements of Operations for the years ended December 31, 2019 and 2018, respectively.

The remaining transaction costs were incurred by the Partnership, resulting in $ 4.9 million of expense included in selling, general and administrative expenses on the Consolidated Statements of Operations for the year ended December 31, 2019.

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 in 2019 and 2018.

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

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

There were no changes in SunCoke's ownership interest in consolidated subsidiaries in 2020 or 2021.

Years Ended December 31,

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

$ ( 152.3 ) $ 26.2

Increase (decrease) in SunCoke Energy, Inc.

Net loss attributable to SunCoke Energy, Inc.

Increase in SunCoke Energy, Inc.

equity for the purchase of additional interest in the Partnership 182.5

182.5 ( 1.2 )

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

Changes from net loss attributable to SunCoke Energy, Inc.

and transfers to noncontrolling interest $ 30.2

(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.

Upon the closing of the Simplification Transaction, the Company's program to purchase outstanding Partnership common units was terminated.

Divestiture of India Equity Method Investment

On June 27, 2018, we sold our 49 percent investment in VISA SunCoke Limited ("VISA SunCoke") for cash consideration of $ 4.0 million.

Consequently, we recognized $ 9.0 million of accumulated currency translation losses and incurred $ 0.4 million of transaction costs, resulting in a net $ 5.4 million loss from equity method investment during 2018 on the Consolidated Statements of Operations.

Our investment in VISA SunCoke was previously accounted for as an equity method investment and was fully impaired in 2015.

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

Customer Concentrations

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:

In 2021, the Company sold approximately 3.8 million tons of coke under long-term, take-or-pay contracts to its two primary customers in the U.S.:

Cleveland-Cliffs Steel Holding Corporation and Cleveland-Cliffs Steel LLC, subsidiaries of Cleveland-Cliffs Inc.

and collectively referred to as "Cliffs Steel," and United States Steel Corporation ("U.S.

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

Year Ended December 31,

1 unchanged sentence

(Dollars in millions)

Cliffs Steel / AM USA (1)(2)

$ 687.3 51.6 %

Cliffs Steel / AK Steel (1)(2)

Cliffs Steel (1)(3)

$ 994.6 68.3 %

3 unchanged sentences

(Dollars in millions)

Cliffs Steel / AM USA (1)(3)

$ 687.3 51.6 % $ 786.4 49.1 %

Cliffs Steel / AK Steel (1)(3)

$ 355.8 26.7 % $ 433.3 27.1 %

$ 208.2 15.6 % $ 255.4 16.0 %

(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.

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

(2) Represents revenues included in our Domestic Coke and Logistics segments.

(3) In March 2020, Cliffs completed the acquisition of AK Steel Holding Corporation ("AK Steel"), and subsequently changed the name of AK Steel to Cleveland-Cliffs Steel Holding Corporation.

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

As stated above, subsequent to the acquisitions we collectively refer to these subsidiaries as Cliffs Steel.

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

At December 31, 2021, the Company's receivables balance was primarily due from Cliffs Steel, US Steel, and ArcelorMittal Brazil with receivables due of $ 30.0 million, $ 7.3 million and $ 7.6 million respectively.

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

The components of income (loss) before income tax expense (benefit) are as follows:

Years Ended December 31,

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(Dollars in millions)

Current tax (benefit) expense:

Current tax expense (benefit):

federal $ 0.8 $ ( 4.7 ) $ 0.3

1 unchanged sentence

Foreign 4.5 3.2 4.3

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

Total current tax expense (benefit) 9.0 ( 1.8 ) 8.4

Deferred tax expense (benefit):

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Total $ 18.3 $ 10.3 $ ( 54.7 )

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

The reconciliation of income tax expense (benefit) at the U.S.

statutory rate to income tax expense (benefit) is as follows:

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

Impact of Tax Legislation (4)

— — % — — % ( 4.8 ) ( 8.4 ) %

Non-deductible equity compensation 3.4 4.9 % 1.0 5.5 % 2.3 ( 1.2 ) %

Return to provision adjustments ( 0.1 ) ( 0.1 ) % 1.2 6.5 % ( 0.8 ) 0.4 %

3 unchanged sentences

(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.

(2) Changes in state tax laws during 2021 resulted in a state tax benefit of $ 1.3 million, which partially offsets the state tax expense.

Additionally, 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.

The Tax Legislation significantly revised the U.S.

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.

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.

As a result of the CARES Act, SunCoke recorded a tax benefit of $ 1.5 million during 2020.

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

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Federal net operating loss (3)

Section 163j interest limitation carryforward (4)

State tax credit carryforward, net of federal income tax effects — 0.3

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(3) Federal net operating loss does not expire.

(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.

(4) State net operating loss carryforward, net of federal income tax effects expires in 2032 through 2040.

(7) Primarily related to state tax credit and net operating loss carryforwards and an $ 10.7 million allowance against the foreign tax credit carryforward.

(5) Primarily related to net operating loss carryforwards and an $ 11.3 million allowance against the foreign tax credit carryforward.

The Company's consolidated federal income tax returns have been examined by the IRS for all years through the year ended December 31, 2014.

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Total inventories $ 127.0 $ 126.6

Properties, Plants, and Equipment, Net

Properties, Plants, and Equipment

The components of net properties, plants and equipment were as follows:

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Total properties, plants and equipment, net $ 1,287.9 $ 1,328.0

Goodwill and Other Intangible Assets

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

The Company concluded the impact of the events discussed above could more likely than not reduce the fair value of the Logistics reporting unit below its carrying value, requiring SunCoke to perform its annual goodwill test as of September 30, 2019.

The fair value of the Logistics reporting unit, which was determined based on a discounted cash flow analysis, did not exceed the carrying value of the reporting unit.

Key assumptions in our goodwill impairment test included reduced forecasted volumes and reduced rates from Foresight, no further business from Murray, incremental merchant business and a discount rate of 12 percent, representing the estimated weighted average cost of capital for this business line.

As a result, the Company recorded a $ 73.5 million non-cash, pre-tax impairment charge to the Logistics segment on the Consolidated Statements of Operations during 2019, which represents a full impairment of the Logistics goodwill balance.

Goodwill allocated to SunCoke's reportable segments as of December 31, 2020 and December 31, 2019 and changes in the carrying amount of goodwill during the fiscal year ended December 31, 2020 are shown below.

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

Domestic Coke Logistics Total

(Dollars in millions)

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

As a result of our logistics customers' events discussed above, CMT's long-lived assets, including customer contracts, customer relationships, permits and properties, plant and equipment, were also assessed for impairment as of September 30, 2019.

The Company re-evaluated its projections for throughput volumes, pricing and customer performance against the existing long-term, take-or-pay contracts.

The resulting undiscounted cash flows were lower than the carrying value of the asset group.

Therefore, the Company assessed the fair value of the asset group to measure the amount of impairment.

The fair value of the CMT long-lived assets was determined to be $ 112.1 million based on discounted cash flows, asset replacement cost and adjustments for capacity utilization, which are considered Level 3 inputs in the fair value hierarchy as defined in Note 18.

Key assumptions in our discounted cash flows included reduced forecasted volumes and reduced rates from Foresight, no further business from Murray, incremental merchant business and a discount rate of 11 percent, representing the estimated weighted average cost of capital for this asset group.

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 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, excluding fully amortized intangible assets, were as follows:

Intangible Assets

Intangible assets, net, include goodwill allocated to our Domestic Coke segment of $ 3.4 million at both December 31, 2021 and 2020, and other intangibles detailed in the table below, excluding fully amortized intangible assets.

There were no changes in the carrying amount of goodwill during the fiscal years ended December 31, 2021 and 2020, respectively.

December 31, 2021 December 31, 2020

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(Dollars in millions)

Customer contracts — $ — $ — $ — $ 7.7 $ 7.2 $ 0.5

Customer relationships 3 6.7 5.0 1.7 6.7 4.5 2.2

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We have historical experience of renewing and extending similar arrangements at our other facilities and intend to continue to renew our permits as they come up for renewal for the foreseeable future.

The permits were renewed regularly prior to our acquisition of CMT.

permits were renewed regularly prior to our acquisition of CMT.

These permits have an average remaining renewal term of approximately 3.2 years.

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Thereafter 22.9

2019 Impairment of Goodwill and Long-Lived Assets

Prior to 2020, a significant portion of our logistics business was from long-term, take-or-pay contracts with Murray American Coal, Inc.

("Murray") and Foresight Energy LLC ("Foresight"), which were adversely impacted by declining coal export prices and domestic demand in 2019.

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.

The fair value of the Logistics reporting unit, which was determined based on a discounted cash flow analysis, did not exceed the carrying value of the reporting unit.

As a result, the Company recorded a $ 73.5 million non-cash, pre-tax impairment charge to the Logistics segment on the Consolidated Statements of Operations during 2019, which represented a full impairment of the Logistics goodwill balance.

As a result of our logistics customers' events, CMT's long-lived assets, including customer contracts, customer relationships, permits and properties, plant and equipment, were also assessed for impairment as of September 30, 2019.

The Company re-evaluated its projections for throughput volumes, pricing and customer performance against the existing long-term, take-or-pay contracts.

The resulting undiscounted cash flows were lower than the carrying value of the asset group.

Therefore, the Company assessed the fair value of the asset group to measure the amount of impairment.

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.

Asset Retirement Obligations

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(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.

(3) The current portion of asset retirement obligation liabilities, which totaled $ 0.7 million and zero at December 31, 2021 and December 31, 2020, respectively, is classified in accrued liabilities on the Consolidated Balance Sheets.

Retirement Benefits Plans

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Retirement benefit plan funded status

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

Actuarial gains (losses) 1.3 ( 2.0 ) ( 1.0 )

$ 1.7 $ ( 1.8 ) $ ( 1.0 )

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Interest cost 0.5 0.7

Actuarial loss 2.0 1.0

Actuarial (gains) losses ( 1.3 ) 2.0

Benefits paid ( 2.3 ) ( 2.6 )

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(1) The current portion of retirement benefit liabilities, which totaled $ 2.6 million and $ 2.8 million at December 31, 2021 and 2020, respectively, is classified in accrued liabilities on the Consolidated Balance Sheets.

The following table sets forth the cumulative amounts not yet recognized in net (loss) income:

The following table sets forth the cumulative amounts not yet recognized in net income (loss):

Years Ended December 31,

(Dollars in millions)

Cumulative amounts not yet recognized in net (loss) income:

Cumulative amounts not yet recognized in net income (loss):

Actuarial losses $ 10.0 $ 12.1

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4.875 percent senior notes, due 2029 ("2029 Senior Notes")

$ 587.3 $ 650.0

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

$ 350.0 revolving credit facility, due 2026 ("Revolving Facility")

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Total long-term debt and financing obligation $ 610.4 $ 673.9

2025 Senior Notes

The 2025 Senior Notes were the senior unsecured obligations of the Partnership.

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 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 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.

These restrictions and prohibitions are subject to certain qualifications and exceptions set forth in the Indenture, including without limitation, reinvestment rights with respect to the proceeds of asset dispositions.

The 2025 Senior Notes contain covenants that, among other things, limit the Company's ability and the ability of certain subsidiaries to (i) incur indebtedness, (ii) pay dividends or make other distributions, (ii) prepay, redeem or repurchase certain subordinated debt, (iv) make loans and investments, (v) sell assets, (vi) incur liens, (vii) enter into transactions with affiliates, (viii) enter into agreements restricting the ability of subsidiaries to pay dividends and (ix) consolidate or merge.

Issuance of 2029 Senior Notes

On June 22, 2021, the Company issued $ 500.0 million aggregate principal amount of senior secured notes with an interest rate of 4.875 percent due in June 2029.

The Company received proceeds of $ 500.0 million from the issuance and incurred debt issuance costs related to this transaction of $ 10.4 million, which are included in long-term debt and financing obligation, net of amortization, on the Consolidated Balance Sheets as of December 31, 2021.

The 2029 Senior Notes are the senior secured obligations of the Company.

Interest on the 2029 Senior Notes is payable semi-annually in cash in arrears on

June 30 and December 30 of each year, commencing on December 30, 2021.

The Company may redeem some or all of the 2029 Senior Notes at its option, in whole or part, at the dates and amounts set forth in the applicable indenture.

The applicable indenture for the 2029 Senior Notes contains covenants that, among other things, limit the Company's ability and, in certain circumstances, the ability of certain of the Company’s subsidiaries to (i) borrow money, (ii) create liens on assets, (iii) pay dividends or make other distributions on or repurchase or redeem the Company's capital stock, (iv) prepay, redeem or repurchase certain debt, (v) make loans and investments, (vi) sell assets, (vii) incur liens, (viii) enter into transactions with affiliates, (ix) enter into agreements restricting the ability of subsidiaries to pay dividends and (x) consolidate, merge or sell all or substantially all of the Company's assets.

Purchase and Redemption of 2025 Senior Notes

During the second quarter of 2021, pursuant to the applicable indenture with The Bank of New York Mellon Corporation as trustee ("Trustee"), the Trustee delivered redemption notices to holders of the 2025 Senior Notes, which were the senior unsecured obligations of Finance Corp., a wholly owned subsidiary of the Company.

The principal amount of the 2025 Senior Notes redeemed was $ 587.3 million, which represented all of the outstanding principal of the 2025 Senior Notes at 100 percent.

On June 22, 2021, the proceeds required for redemption, including the applicable premium and accrued interest totaling $ 612.1 million, were irrevocably deposited with the Trustee, at which time the 2025 Senior Notes were fully satisfied and discharged, and held by the Trustee until the date of redemption, July 8, 2021.

As a result, during the year ended December 31, 2021, the Company recorded a loss on extinguishment of debt on the Consolidated Statement of Operations of $ 31.1 million, which consisted of the premium paid of $ 22.0 million and the write-off of unamortized debt issuance costs of $ 6.1 million and the remaining original issue discount of $ 3.0 million.

Revolving Facility

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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 June 22, 2021, in conjunction with the issuance of the 2029 Senior Notes, the Company amended and extended the maturity of its Revolving Facility from August 2024 to June 2026 and reduced its capacity by $ 50.0 million to $ 350.0 million, resulting in additional debt issuance costs of $ 1.6 million, which are included in long-term debt and financing obligation, net of amortization, on the Consolidated Balance Sheets as of December 31, 2021.

Additionally, the Company recorded a loss on extinguishment of debt on the Consolidated Statement of Operations of $ 0.8 million, representing the write-off of unamortized debt issuance costs, during the twelve months ended December 31, 2021.

As of December 31, 2021, the Revolving Facility had letters of credit outstanding of $ 6.2 million and $ 115.0 million outstanding balance, leaving $ 228.8 million available.

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Financing Obligation

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.

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

The arrangement has 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 arrangement is accounted for as a financing transaction, resulting in a financing obligation 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.

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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.

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

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.

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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.

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

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

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

Such benefits are provided for under Title IV of the Federal Coal Mine and Safety Act of 1969 and subsequent amendments, as well as for black lung benefits provided in the states of Virginia, Kentucky and West Virginia pursuant to workers’ compensation legislation.

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PPACA provides for the automatic extension of awarded lifetime benefits to surviving spouses and changes the legal criteria used to assess and award claims.

We 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.

Our independent actuarial consultants calculate the present value of the estimated black lung liability annually based on actuarial models utilizing our population of former coal miners, historical payout patterns of both the Company and the industry, actuarial mortality rates, disability incidence, medical costs, death benefits, dependents, discount rates and the current federally mandated payout rates.

We adjust our liability each year based upon actuarial calculations of our expected future payments for these benefits.

Our independent actuarial consultants calculate the present value of the estimated black lung liability annually based on actuarial models utilizing our population of former coal miners, historical payout patterns of both the Company and the industry, actuarial mortality rates, medical costs, death benefits, dependents, discount rates and the current federally mandated payout rates.

The estimated liability may be impacted by future changes in the statutory mechanisms, modifications by court decisions and changes in filing patterns driven by perceptions of success by claimants and their advisors, the impact of which cannot be estimated.

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A decrease of 25 basis points in the discount rate would have increased black lung expense by $ 1.4 million in 2021.

(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.

(2) The current portion of the black lung liability was $ 5.4 million and $ 4.6 million at December 31, 2021 and 2020, respectively, and was included in accrued liabilities on the Consolidated Balance Sheets.

The following table summarizes annual black lung payments and expense:

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$ 3.1 $ 15.4 $ 10.9

(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.

(1) Expenses incurred in excess of annual accretion of the black lung liability in 2020 and 2019 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.

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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.

SunCoke exercised its right to appeal the DCMWC’s security determination and provided

additional information supporting the Company’s position in May 2020 and February 2021.

If the Company’s appeal is unsuccessful, the Company may be required to provide additional collateral to receive the self-insurance reauthorization from the DCMWC, which could potentially reduce the Company’s liquidity.

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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.

Additionally, the Company has elected to account for lease and nonlease components of an arrangement, such as assets and services, as a single lease component for all asset classes.

Additionally, the Company elected the practical expedient to account for lease and non-lease components of an arrangement, such as assets and services, as a single lease component for all asset classes on existing leases upon the adoption of ASC 842.

Certain of our long-term leases include one or more options to renew or to terminate, with renewal terms that can extend the lease term from one month to 50 years.

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At December 31, 2019 $ ( 6.7 ) $ ( 7.7 ) $ ( 14.4 )

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

Other comprehensive income (loss) before reclassifications / adjustments 0.1 ( 1.2 ) ( 1.1 )

Retirement benefit plans funded status adjustment ( 1.6 ) — ( 1.6 )

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

Other comprehensive loss before reclassifications / adjustments 0.1 ( 1.2 ) ( 1.1 )

Other comprehensive income (loss) before reclassifications / adjustments 0.3 ( 0.9 ) ( 0.6 )

Retirement benefit plans funded status adjustment 1.0 — 1.0

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

Years Ended December 31,

2021 2020 2019

(Dollars in millions)

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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Prior service benefit 0.4 0.5 0.6

Total before taxes ( 0.4 ) ( 0.1 ) —

Income tax 0.1 — —

Total, net of tax $ ( 0.3 ) $ ( 0.1 ) $ —

$ ( 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.

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

Share-Based Compensation

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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:

There were no stock options granted by the Company during the years ended December 31, 2021 and 2020, respectively.

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

Weighted Average Per Share

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2019 grant 267,897 $ 9.87 $ 4.09

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.

The stock options expire ten years from the date of grant.

The Company calculates the value of each employee stock option, estimated on the date of grant, using the Black-Scholes option pricing model with a Monte Carlo simulation for the performance based options.

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:

The Company calculates the value of each employee stock option, estimated on the date of grant, using the Black-Scholes option pricing model.

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

Year Ended December 31,

Risk free interest rate 2 %

Expected term 6 years 6 years

Expected term 6 years

Volatility 53 %

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Forfeited ( 12,836 ) $ 9.87

Expired ( 906,632 ) 17.24

Outstanding at December 31, 2021 2,087,505 $ 14.59 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 in 2020 was immaterial and was $ 0.8 million on options exercised during 2018.

There were no stock options exercised during 2019.

Total intrinsic value of stock options exercised in 2021 was $ 0.3 million.

In 2020 the amount was immaterial and there were no stock options exercised during 2019.

Restricted Stock Units

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(1) The service period for the 2021, 2020, and 2019 PSUs ends on December 31, 2023, 2022 and 2021, and the awards will vest during the first quarter of 2024, 2023 and 2022, respectively.

The service period for certain retiree eligible participants is accelerated.

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 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 TSR Modifier can impact the payout (between 75 percent and 125 percent of the 2021 and 2020 awards, and between 25 percent and 125 percent of the 2019 award) 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, 2021 and PSU activity during the fiscal year then ended:

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Granted 177,176 $ 7.60

Performance adjustments ( 70,321 ) 11.74

Vested ( 168,854 ) $ 11.74

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The Cash RSU liability at December 31, 2021 was adjusted based on the closing price of our common stock on December 31, 2021 of $ 6.59 per share.

The Cash RSU liability at December 31, 2020 was not material.

The Cash RSU liability is adjusted based on the closing price of our common stock at the end of each quarterly period and was $ 1.9 million at December 31, 2021 and was $ 1.1 million December 31, 2020.

Cash Incentive Award

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The Company issued a grant date fair value award of $ 2.1 million, $ 2.0 million and $ 0.6 million during the years ended December 31, 2021, 2020 and 2019, 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 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.

The service period for certain retiree eligible participants is accelerated.

The 2019 award is 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 2021 and 2020 awards are 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.

The cash incentive award liability at December 31, 2020 was adjusted based on the Company's current performance related to the above awards.

The cash incentive award liability at December 31, 2020 was not material.

The cash incentive award liability at December 31, 2021 was adjusted based on the Company's three-year cumulative Adjusted EBITDA performance and adjusted average pre-tax return on capital for the Company's coke and logistics businesses and unallocated corporate expenses.

The cash incentive award liability was $ 4.1 million at December 31, 2021 and $ 1.3 million at December 31, 2020.

Summary of Share-Based Compensation Expense

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Compensation Expense (1)

Net of tax Unrecognized Compensation Cost Recognition Period

Net of tax Unrecognized Compensation Cost Weighted Average Remaining Recognition Period

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

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Earnings Per Share

Basic earnings per share (“EPS”) has been computed by dividing net (loss) income available to SunCoke Energy, Inc.

Basic earnings per share (“EPS”) has been computed by dividing net income (loss) available to SunCoke Energy, Inc.

by the weighted average number of shares outstanding during the period.

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

Cash Equivalents

Cash and Cash Equivalents

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

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.

The Company’s cash and cash equivalents were measured at fair value at December 31, 2021 and December 31, 2020 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 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, 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.

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

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 Cliffs Steel and U.S.

Our coke sales are largely 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.

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 .

Additionally, SunCoke entered into a five year take-or-pay agreement with Algoma Steel beginning in 2022, with average sales of approximately 150 thousand tons of blast furnace coke per year, further diversifying our customer base.

These agreements require us to produce and deliver the contracted volumes of coke and require our customers to purchase such volumes of coke up to a specified tonnage or pay the contract price for any tonnage they elect not to take.

As of December 31, 2021, our coke sales agreements have approximately 14.7 million tons of unsatisfied or partially unsatisfied performance obligations, which are expected to be delivered over a weighted average remaining contract term of approximately six years .

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

Operating costs under two of our coke sales agreements are contractual, subject to an annual adjustment based on an inflation index.

Under our other four coke sales agreements operating costs are passed through to the respective customers subject to an annually negotiated budget, in some cases subject to a cap annually adjusted for inflation, and generally we share any difference in costs from the budgeted amounts with our customers.

Operating costs under three of our coke sales agreements are fixed subject to an annual adjustment based on an inflation index.

Under our other four coke sales agreements, operating costs are passed through to the respective customers subject to an annually negotiated budget, in some cases subject to a cap annually adjusted for inflation, and we share any difference in costs from the budgeted amounts with our customers.

Our coke sales agreements contain pass-through provisions for coal and coal procurement costs, subject to meeting contractual coal-to-coke yields.

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

Foundry and Export Coke

Foundry coke sales are generally made under annual agreements with our customers for an agreed upon price and do not contain take-or-pay volume commitments.

Export coke sales are generally made on a spot basis at the current market price.

In our logistics business, handling and/or mixing services are provided to steel, coke (including some of our domestic cokemaking facilities), electric utility, coal producing and other manufacturing based customers.

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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.

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.

Estimated take-or-pay revenue of approximately $ 24.3 million from all of our multi-year logistics contracts is expected to be recognized over the next two years for unsatisfied or partially unsatisfied performance obligations as of December 31, 2021.

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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Each of these facilities produces coke, and all facilities except Jewell recover waste heat, which is converted to steam or electricity through a similar production process.

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

Logistics operations are comprised of CMT, KRT, Lake Terminal, which provides services to our Indiana Harbor cokemaking facility, and DRT, which provides services to our Jewell cokemaking facility.

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Corporate expenses that can be identified with a segment have been included in determining segment results.

The remainder is included in Corporate and Other.

Corporate and Other also includes activity from our legacy coal mining business.

The remainder is included in Corporate and Other, which also includes activity from our legacy coal mining business.

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

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

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

Years Ended December 31,

25 unchanged sentences

Logistics 14.7 13.5 4.6

Corporate and Other 0.5 — —

Total capital expenditures $ 98.6 $ 73.9 $ 110.1

11 unchanged sentences

Total assets $ 1,615.4 $ 1,613.4

The Company evaluates the performance of its segments based on segment Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted for any impairments, (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.

The Company evaluates the performance of its segments based on segment Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted for any impairments, restructuring costs, gains or losses on extinguishment of debt, changes to our contingent consideration liability related to our acquisition of CMT and/or transaction costs incurred as part of the Simplification Transaction.

EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income under GAAP and may not be comparable to other similarly titled measures in other businesses.

15 unchanged sentences

Interest expense, net 42.5 56.3 60.3

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

Loss (gain) on extinguishment of debt, net 31.9 ( 5.7 ) ( 1.5 )

Income tax expense (benefit) 18.3 10.3 ( 54.7 )

Contingent consideration adjustments (1)

— ( 4.2 ) 2.5

Restructuring costs (2)

Simplification Transaction costs (3)

Loss from equity method investment — — 5.4

Adjusted EBITDA

1 unchanged sentence

Adjusted EBITDA attributable to noncontrolling interests (4)

9.1 40.7 82.0

Adjusted EBITDA attributable to SunCoke Energy, Inc.

$ 266.1 $ 196.8 $ 207.2

(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.

5 unchanged sentences

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