SunCoke Energy, Inc. 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm 43 Consolidated Statements of Income for the Years Ended December 31, 2024, 2023 and 2022 45 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2024, 2023 and 2022 46 Consolidated Balance Sheets at December 31, 2024 and 2023 47 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022 48 Consolidated Statements of Equity for the Years Ended December 31, 2024, 2023 and 2022 49 Notes to Consolidated Financial Statements 51 1. General and Basis of Presentation 51 2. Summary of Significant Accounting Policies 51 3. Customer Concentrations 54 4. Income Taxes 55 5. Inventories 57 6. Properties, Plants, and Equipment 57 7. Intangible Assets 57 8. Asset Retirement Obligations 58 9. Retirement Benefit Plans 59 10. Accrued Liabilities 61 11. Debt and Financing Obligations 61 12. Commitments and Contingent Liabilities 62 13. Leases 64 14. Accumulated Other Comprehensive Loss 66 15. Share-Based Compensation 67 16. Earnings Per Share 70 17. Fair Value Measurements 70 18. Revenue From Contracts with Customers 71 19. Business Segment Information 72 42 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors SunCoke Energy, Inc.: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying consolidated balance sheets of SunCoke Energy, Inc. and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. 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; 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. 43 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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 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. Sufficiency of audit evidence over metallurgical coal inventory As discussed in Notes 2 and 5 to the consolidated financial statements, the value of metallurgical coal inventory was $109.3 million as of December 31, 2024. Metallurgical coal is received at the coke plants throughout the year and is the principal raw material for the Company's cokemaking operations. The Company engages an independent third-party to perform surveys of the quantity of metallurgical coal inventory using unmanned aerial system technology. We identified the assessment of the sufficiency of evidence over the quantity of metallurgical coal inventory as a critical audit matter. Subjective auditor judgment was required to assess the quantity of metallurgical coal inventory because of the nature of the evidence obtained and the need to evaluate the survey results developed by the Company's independent third-party. The following are the primary procedures we performed to address this critical audit matter. We applied auditor judgment to determine the nature and extent of procedures to be performed over the quantity of metallurgical coal inventory. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company's metallurgical coal inventory process, including controls over the quantity of metallurgical coal inventory. We evaluated the qualifications and experience of the Company's independent third-party who performs the metallurgical coal inventory surveys. We observed the metallurgical coal inventory surveys performed by the Company's independent third-party at an interim date. We evaluated the independent third-party's surveys by reconciling the results to the number of piles of metallurgical coal at each coke plant observed and to the Company's calculations and records. We also compared the individual survey results for each coke plant to each other and evaluated certain adjustments and trends. We selected a sample of metallurgical coal receipts from the interim survey date through year­ end and agreed them to third-party support including coal and freight invoices. We developed an expectation of metallurgical coal quantity used in production from the date of the interim survey through year-end and compared it to actual metallurgical coal used in production. We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of evidence obtained. /s/ KPMG LLP We have served as the Company’s auditor since 2015. Chicago, Illinois February 21, 2025 44 Table of Contents SunCoke Energy, Inc. Consolidated Statements of Income Years Ended December 31, 2024 2023 2022 (Dollars and shares in millions, except per share amounts) Revenues Sales and other operating revenue $ 1,935.4 $ 2,063.2 $ 1,972.5 Costs and operating expenses Cost of products sold and operating expenses 1,603.4 1,724.6 1,604.9 Selling, general and administrative expenses 61.2 70.7 71.4 Depreciation and amortization expense 118.9 142.8 142.5 Total costs and operating expenses 1,783.5 1,938.1 1,818.8 Operating income 151.9 125.1 153.7 Interest expense, net 23.4 27.3 32.0 Income before income tax expense 128.5 97.8 121.7 Income tax expense 25.0 34.3 16.8 Net income 103.5 63.5 104.9 Less: Net income attributable to noncontrolling interests 7.6 6.0 4.2 Net income attributable to SunCoke Energy, Inc. $ 95.9 $ 57.5 $ 100.7 Earnings attributable to SunCoke Energy, Inc. per common share: Basic $ 1.13 $ 0.68 $ 1.20 Diluted $ 1.12 $ 0.68 $ 1.19 Weighted average number of common shares outstanding: Basic 85.1 84.7 83.8 Diluted 85.3 84.9 84.6 (See Accompanying Notes) 45 Table of Contents SunCoke Energy, Inc. Consolidated Statements of Comprehensive Income Years Ended December 31, 2024 2023 2022 (Dollars in millions) Net income $ 103.5 $ 63.5 $ 104.9 Other comprehensive income (loss): Reclassifications of actuarial loss amortization and prior service benefit to earnings (net of related tax benefit of $ 0.1 million for all years) 0.2 0.1 0.4 Retirement benefit plans funded status adjustment (net of related tax (expense) benefit of $( 1.9 ) million, $ 0.2 million and $( 0.9 ) million, respectively) 6.4 ( 0.4 ) 3.1 Currency translation adjustment ( 1.5 ) 0.5 0.2 Comprehensive income 108.6 63.7 108.6 Less: Comprehensive income attributable to noncontrolling interests 7.6 6.0 4.2 Comprehensive income attributable to SunCoke Energy, Inc. $ 101.0 $ 57.7 $ 104.4 (See Accompanying Notes) 46 Table of Contents SunCoke Energy, Inc. Consolidated Balance Sheets December 31, 2024 2023 (Dollars in millions, except par value amounts) Assets Cash and cash equivalents $ 189.6 $ 140.1 Receivables, net 96.6 88.3 Inventories 180.8 182.6 Income tax receivable — 1.4 Other current assets 7.6 4.4 Total current assets 474.6 416.8 Properties, plants and equipment (net of accumulated depreciation of $ 1,497.6 and $ 1,383.6 at December 31, 2024 and 2023, respectively) 1,143.6 1,191.1 Intangible assets, net 29.2 31.1 Deferred charges and other assets 20.8 21.4 Total assets $ 1,668.2 $ 1,660.4 Liabilities and Equity Accounts payable $ 153.2 $ 172.1 Accrued liabilities 52.6 51.7 Total current liabilities 205.8 223.8 Long-term debt 492.3 490.3 Accrual for black lung benefits 12.7 53.2 Retirement benefit liabilities 7.6 15.8 Deferred income taxes 196.8 190.4 Asset retirement obligations 17.2 14.1 Other deferred credits and liabilities 24.8 27.3 Total liabilities 957.2 1,014.9 Equity Preferred stock, $ 0.01 par value. Authorized 50,000,000 shares; no issued shares at both December 31, 2024 and 2023 — — Common stock, $ 0.01 par value. Authorized 300,000,000 shares; issued 99,756,420 and 99,161,446 shares at December 31, 2024 and 2023, respectively 1.0 1.0 Treasury stock, 15,404,482 shares at both December 31, 2024 and 2023 ( 184.0 ) ( 184.0 ) Additional paid-in capital 732.8 729.8 Accumulated other comprehensive loss ( 7.7 ) ( 12.8 ) Retained earnings 138.1 80.2 Total SunCoke Energy, Inc. stockholders' equity 680.2 614.2 Noncontrolling interests 30.8 31.3 Total equity 711.0 645.5 Total liabilities and equity $ 1,668.2 $ 1,660.4 (See Accompanying Notes) 47 Table of Contents SunCoke Energy, Inc. Consolidated Statements of Cash Flows Years Ended December 31, 2024 2023 2022 (Dollars in millions) Cash Flows from Operating Activities: Net income $ 103.5 $ 63.5 $ 104.9 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expense 118.9 142.8 142.5 Deferred income tax expense 4.5 18.6 2.3 Share-based compensation expense 4.0 5.1 6.7 Gain on extinguishment of legacy coal liabilities ( 9.5 ) — — Changes in working capital pertaining to operating activities: Receivables, net ( 8.9 ) 16.8 ( 32.3 ) Inventories 1.8 ( 7.2 ) ( 48.2 ) Accounts payable ( 12.9 ) 19.7 27.4 Accrued liabilities ( 31.9 ) ( 10.2 ) 8.4 Income taxes 1.4 ( 1.4 ) — Other ( 2.1 ) 1.3 ( 2.8 ) Net cash provided by operating activities 168.8 249.0 208.9 Cash Flows from Investing Activities: Capital expenditures ( 72.9 ) ( 109.2 ) ( 75.5 ) Other investing activities 0.6 — 5.3 Net cash used in investing activities ( 72.3 ) ( 109.2 ) ( 70.2 ) Cash Flows from Financing Activities: Proceeds from revolving facility 11.0 291.0 596.0 Repayment of revolving facility ( 11.0 ) ( 326.0 ) ( 676.0 ) Repayment of financing obligation — ( 8.8 ) ( 3.2 ) Dividends paid ( 37.6 ) ( 30.7 ) ( 23.6 ) Cash distributions to noncontrolling interests ( 8.1 ) ( 11.8 ) ( 4.4 ) Other financing activities ( 1.3 ) ( 3.4 ) ( 1.3 ) Net cash used in financing activities ( 47.0 ) ( 89.7 ) ( 112.5 ) Net increase in cash and cash equivalents 49.5 50.1 26.2 Cash and cash equivalents at beginning of year 140.1 90.0 63.8 Cash and cash equivalents at end of year $ 189.6 $ 140.1 $ 90.0 Supplemental Disclosure of Cash Flow Information Interest paid $ 24.4 $ 25.7 $ 28.5 Income taxes paid, net of refunds of $ 0.3 million , zero and $ 0.5 million, respectively $ 18.0 $ 17.7 $ 14.5 (See Accompanying Notes) 48 Table of Contents SunCoke Energy, Inc. Consolidated Statements of Equity Common Stock Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained (Deficit) Earnings Total SunCoke Energy, Inc. Equity Non- controlling Interests Total Equity Shares Amount Shares Amount (Dollars in millions) At December 31, 2021 98,496,809 $ 1.0 15,404,482 $ ( 184.0 ) $ 721.2 $ ( 16.7 ) $ ( 23.4 ) $ 498.1 $ 37.3 $ 535.4 Net income — — — — — — 100.7 100.7 4.2 104.9 Reclassification of prior service benefit and actuarial loss amortization to earnings (net of related tax benefit of $ 0.1 million) — — — — — 0.4 — 0.4 — 0.4 Retirement benefit plans funded status adjustment (net of related tax expense of $ 0.9 million) — — — — — 3.1 — 3.1 — 3.1 Currency translation adjustment — — — — — 0.2 — 0.2 — 0.2 Share-based compensation — — — — 8.1 — — 8.1 — 8.1 Share issuances, net of shares withheld for taxes 318,971 — — — ( 1.2 ) — — ( 1.2 ) — ( 1.2 ) Dividends — — — — — — ( 23.8 ) ( 23.8 ) — ( 23.8 ) Cash distribution to noncontrolling interests — — — — — — — — ( 4.4 ) ( 4.4 ) At December 31, 2022 98,815,780 $ 1.0 15,404,482 $ ( 184.0 ) $ 728.1 $ ( 13.0 ) $ 53.5 $ 585.6 $ 37.1 $ 622.7 Net income — — — — — — 57.5 57.5 6.0 63.5 Reclassification of prior service benefit and actuarial loss amortization to earnings (net of related tax benefit of $ 0.1 million) — — — — — 0.1 — 0.1 — 0.1 Retirement benefit plans funded status adjustment (net of related tax benefit of $ 0.2 million) — — — — — ( 0.4 ) — ( 0.4 ) — ( 0.4 ) Currency translation adjustment — — — — — 0.5 — 0.5 — 0.5 Share-based compensation — — — — 5.1 — — 5.1 — 5.1 Share issuances, net of shares withheld for taxes 345,666 — — — ( 3.4 ) — — ( 3.4 ) — ( 3.4 ) Dividends — — — — — — ( 30.8 ) ( 30.8 ) — ( 30.8 ) Cash distribution to noncontrolling interests — — — — — — — — ( 11.8 ) ( 11.8 ) At December 31, 2023 99,161,446 $ 1.0 15,404,482 $ ( 184.0 ) $ 729.8 $ ( 12.8 ) $ 80.2 $ 614.2 $ 31.3 $ 645.5 (See Accompanying Notes) 49 Table of Contents SunCoke Energy, Inc. Consolidated Statements of Equity Common Stock Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total SunCoke Energy, Inc. Equity Non- controlling Interests Total Equity Shares Amount Shares Amount (Dollars in millions) At December 31, 2023 99,161,446 $ 1.0 15,404,482 $ ( 184.0 ) $ 729.8 $ ( 12.8 ) $ 80.2 $ 614.2 $ 31.3 $ 645.5 Net income — — — — — — 95.9 95.9 7.6 103.5 Reclassification of prior service benefit and actuarial loss amortization to earnings (net of related tax benefit of $ 0.1 million) — — — — — 0.2 — 0.2 — 0.2 Retirement benefit plans funded status adjustment (net of related tax expense of $ 1.9 million) — — — — — 6.4 — 6.4 — 6.4 Currency translation adjustment — — — — — ( 1.5 ) — ( 1.5 ) — ( 1.5 ) Share-based compensation — — — — 4.0 — — 4.0 — 4.0 Share issuances, net of shares withheld for taxes 594,974 — — — ( 1.0 ) — — ( 1.0 ) — ( 1.0 ) Dividends — — — — — ( 38.0 ) ( 38.0 ) — ( 38.0 ) Cash distribution to noncontrolling interests — — — — — — — — ( 8.1 ) ( 8.1 ) At December 31, 2024 99,756,420 $ 1.0 15,404,482 $ ( 184.0 ) $ 732.8 $ ( 7.7 ) $ 138.1 $ 680.2 $ 30.8 $ 711.0 (See Accompanying Notes) 50 Table of Contents SunCoke Energy, Inc. Notes to Consolidated Financial Statements 1. General and Basis of Presentation Description of Business SunCoke Energy, Inc. (“SunCoke Energy,” “SunCoke,” “Company,” “we,” “our” and “us”) is the largest independent producer of high-quality coke in the Americas, as measured by tons of coke produced each year, and has more than 60 years of coke production experience. Coke is produced by heating metallurgical coal in a refractory oven, which releases certain volatile components from the coal, thus transforming the coal into coke. Our coke is primarily used as a principal raw material in the blast furnace steelmaking process as well as in the foundry production of casted iron, and the majority of our sales are derived from blast furnace coke sales made under long-term, take-or-pay agreements. We also sell coke produced utilizing capacity in excess of that reserved for our long-term, take-or-pay agreements to customers in both the export and North American domestic coke markets seeking high-quality product for their blast furnaces. We have designed, developed and built, and we currently own and operate five cokemaking facilities in the United States (“U.S.”) with collective nameplate capacity to produce approximately 4.2 million tons of blast furnace coke per year. Additionally, we designed and currently operate one cokemaking facility in Brazil under licensing and operating agreements on behalf of ArcelorMittal Brasil S.A. (“ArcelorMittal Brazil”), which has approximately 1.7 million tons of annual cokemaking capacity. We also own and operate a logistics business that provides export and domestic material handling and/or mixing services to steel, coke (including some of our domestic cokemaking facilities), electric utility, coal producing and other manufacturing based customers. Our logistics terminals, which are strategically located to reach Gulf Coast, East Coast, Great Lakes and international ports, have the collective capacity to mix and/or transload more than 40 million tons of coal and other aggregates annually and have storage capacity of approximately 3 million tons. Consolidation and Basis of Presentation The consolidated financial statements of the Company and its subsidiaries were prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and include the assets, liabilities, revenues and expenses of the Company and all subsidiaries where we have a controlling financial interest. Intercompany transactions and balances have been eliminated in consolidation. Net income attributable to noncontrolling interest represents a 14.8 percent third-party interest in our Indiana Harbor cokemaking facility. 2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual amounts could differ from these estimates. Revenue Recognition The Company sells coke as well as steam and electricity and also provides mixing and/or handling services of coal and other aggregates. 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 18. 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. Inventories 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 primarily utilizes the contracted sales prices under its coke sales contracts to record lower of cost or net realizable value inventory adjustments. The Company engages an independent third-party to perform surveys of the quantity of metallurgical coal inventory using unmanned aerial system technology. See Note 5. 51 Table of Contents Properties, Plants and Equipment Plants and equipment are depreciated on a straight-line basis over their estimated useful lives. Coke and energy plant, machinery and equipment are generally depreciated over 20 to 30 years. Logistics plant, machinery and equipment are generally depreciated over 15 to 30 years. Depreciation and amortization is excluded from cost of products sold and operating expenses and is presented separately on the Consolidated Statements of Income. Gains and losses on the disposal or retirement of fixed assets are reflected in earnings when the assets are sold or retired. Amounts incurred that extend an asset’s useful life, increase its productivity or add production capacity are capitalized. Additionally, the Company generally capitalizes interest on capital projects with an expected construction period of one year or longer. The Company accounts for changes in useful lives, when appropriate, as a change in estimate, with prospective application only. Direct costs, such as outside labor, materials, internal payroll and benefits costs incurred during capital projects are capitalized; indirect costs are not capitalized. Normal repairs and maintenance costs are expensed as incurred. The amounts of accrued capital expenditures for the years ended December 31, 2024, 2023 and 2022 were $ 2.7 million, $ 8.7 million and $ 15.6 million, respectively. See Note 6 and the Consolidated Statements of Cash Flows. Intangible Assets 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. Intangible assets are assessed for impairment when a triggering event occurs. See Note 7. Impairment of Long-Lived Assets Long-lived assets, which includes intangible assets and properties, plants and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Company did not identify any triggering events for a review for impairment during the years ended December 31, 2024 and 2023. A long-lived asset, or group of assets, is considered to be impaired when the undiscounted net cash flows expected to be generated by the asset, which are largely driven by our contractual arrangements, are less than its carrying amount. Such estimated future cash flows are highly subjective and are based on numerous assumptions about future operations and market conditions. The impairment recognized is the amount by which the carrying amount exceeds the fair market value of the impaired asset, or group of assets. It is also difficult to precisely estimate fair market value because quoted market prices for the Company's long-lived assets may not be readily available. Therefore, fair market value is generally based on the present values of estimated future cash flows using discount rates commensurate with the risks associated with the assets being reviewed for impairment. See Note 6 and Note 7. Income Taxes Income tax expense (benefit) is determined by applying the provisions of federal and state tax laws to taxable income (loss) during the period. The Company does business in a number of states with differing laws concerning how income subject to each state's tax structure is measured. These laws, as well as changes in tax legislation, impact what effective tax rate is applied to income generated in each state, and the Company makes estimates of how income will be apportioned among various states based on these factors. Deferred tax asset and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those differences are projected to be recovered or settled. The Company records a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company recognizes uncertain tax positions in its financial statements when minimum recognition threshold and measurement attributes are met in accordance with current accounting guidance. See Note 4. Black Lung Benefit Liabilities The Company has obligations related to coal workers’ pneumoconiosis, or black lung, benefits of certain of the Company's former coal miners and their dependents. The Company adjusts the liability each year based upon actuarial calculations of the Company's expected future payments for these benefits, including a provision for incurred but not reported losses. Adjustments are recognized in the period the adjustment occurs as a component of selling, general and administrative expense on the Consolidated Statements of Income. See Note 12. 52 Table of Contents Postretirement Benefit Plan Liabilities The postretirement benefit plans, which are frozen, are unfunded and the accumulated postretirement benefit obligation is fully recognized on the Consolidated Balance Sheets. Actuarial gains (losses) and prior service costs (benefits) which have not yet been recognized in net income are recognized as a credit (charge) to accumulated other comprehensive income (loss). 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 Income. See Note 9. Asset Retirement Obligations The fair value of a liability for an asset retirement obligation is recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. 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. See Note 8. Leases The Company determines if an arrangement contains a lease at inception. The Company recognizes right-of-use assets and lease liabilities associated with leases based on the present value of the future minimum lease payments over the lease term at the commencement date. The Company's leases do not provide an implicit rate of return, therefore, the Company uses its incremental borrowing rate at the inception of the lease to calculate the present value of lease payments. The Company's incremental borrowing rate is determined through market sources for secured borrowings and approximates the interest rate at which the Company could borrow on a collateralized basis with similar terms and payments in similar economic environments. Lease terms reflect options to extend or terminate the lease when it is reasonably certain that the option will be exercised. 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 accounts 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. See Note 13. Shipping and Handling Costs Shipping and handling costs are included in cost of products sold and operating expenses on the Consolidated Statements of Income and are generally passed through to the Company's customers. The Company has elected the practical expedient under Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers,” to account for shipping and handling activities as a promise to fulfill the transfer of coke. See Note 18. Share-Based Compensation The Company measures the cost of employee services in exchange for equity instrument awards and cash awards based on the grant-date fair value of the award. Cash awards and the performance metrics of equity awards are remeasured on a quarterly basis. The market metrics of equity awards are not remeasured. The total cost is recognized over the requisite service period. Award forfeitures are accounted for as they occur. 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 15. Fair Value Measurements The Company determines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As required, the Company utilizes valuation techniques that maximize the use of observable inputs (levels 1 and 2) and minimize the use of unobservable inputs (level 3) within the fair value hierarchy included in current accounting guidance. 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 17. Currency Translation The functional currency of the Company’s Brazilian operations is the Brazilian real. The Company’s Brazil operations translate its assets and liabilities into U.S. dollars at the current exchange rates in effect at the end of the fiscal period. The gains or losses that result from this process are shown as cumulative translation adjustments within accumulated other comprehensive income (loss) in the Consolidated Balance Sheets. The revenue and expense accounts of foreign operations are translated into U.S. dollars at the average exchange rates during the period. 53 Table of Contents Recently Adopted Accounting Pronouncements In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” ASU 2023-07 requires disclosure of incremental segment information on an interim and annual basis. The Company adopted this standard for the fiscal year ending December 31, 2024 with a retrospective application to all prior periods presented in the financial statements. See Note 19 to our consolidated financial statements for further detail. Recent Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvement to Income Tax Disclosures.” ASU 2023-09 requires additional disclosures aimed at enhancing the transparency and decision usefulness of income tax disclosures. This ASU is effective for fiscal years beginning after December 15, 2024 on a prospective basis. The Company does not expect this ASU to have a material impact on the Company's disclosures. The Company plans to adopt the guidance for the fiscal year ending December 31, 2025. In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income (Topic 220): Disaggregation of Income Statement Expenses.” ASU 2024-03 requires additional disclosures aimed at enhancing the transparency and decision usefulness of income statement expenses. This ASU is effective for fiscal years beginning after December 15, 2026 as well as interim periods beginning after December 15, 2027 and requires retrospective application to all prior periods presented in the financial statements. The Company is currently evaluating the impact of the guidance on the related disclosures. The Company plans to adopt the guidance for the fiscal year ending December 31, 2027. Labor Concentrations As of December 31, 2024, the Company has 868 employees in the U.S. Approximately 40 percent of the Company's domestic employees, principally at the Company's cokemaking operations, are represented by the United Steelworkers union under various contracts. Additionally, approximately 3 percent of the Company's domestic employees are represented by the International Union of Operating Engineers. Labor agreements at Kanawha River Terminal (“KRT”), SunCoke Lake Terminal (“Lake Terminal”), and Indiana Harbor were renewed in 2022 and will expire on April 30, 2025, June 30, 2025, and September 1, 2026, respectively. As of December 31, 2024,the Company has 300 employees at the cokemaking facility in Vitória, Brazil, all of whom are represented by Sindimetal-ES - Union of Metallurgists under a labor agreement. During 2024, the labor agreement at the Company's Vitória, Brazil facility was renewed for an additional year, and it expires on October 31, 2025. 3. Customer Concentrations In 2024, the Company sold approximately 3.5 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. Steel”). The tables below show sales to the Company's significant customers: Years Ended December 31, 2024 2023 2022 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) Cliffs Steel (1) $ 1,237.0 63.9 % $ 1,349.4 65.4 % $ 1,182.8 60.0 % U.S. Steel (2) $ 284.6 14.7 % $ 300.8 14.6 % $ 284.8 14.4 % (1) Represents revenues included in our Domestic Coke segment. (2) Represents revenues included in our Domestic Coke segment for the year ended December 31, 2024 and revenues included in our Domestic Coke and Logistics segments for the years ended December 31, 2023 and 2022. The Company generally does not require any collateral with respect to its receivables due under long-term, take-or-pay contracts. Receivables due from Cliffs Steel and U.S. Steel were approximately $ 48.4 million and $ 8.5 million as of December 31, 2024, respectively, and $ 35.7 million and $ 7.9 million as of December 31, 2023, respectively. These balances comprised approxi mately 59 perce nt and 50 percent of the Company's receivables balance as of December 31, 2024 and 54 Table of Contents 2023, respectively. As a result, the Company experiences concentrations of credit risk in its receivables with these customers, which may be affected by changes in economic or other conditions affecting the steel industry. 4. Income Taxes The components of income before income tax expense are as follows: Years Ended December 31, 2024 2023 2022 (Dollars in millions) Domestic $ 118.8 $ 88.8 $ 107.1 Foreign 9.7 9.0 14.6 Total $ 128.5 $ 97.8 $ 121.7 Income tax expense consisted of the following: Years Ended December 31, 2024 2023 2022 (Dollars in millions) Current tax expense (benefit): U.S. federal $ 18.4 $ 7.9 $ 4.3 State ( 0.7 ) 4.7 5.4 Foreign 2.8 3.1 4.8 Total current tax expense 20.5 15.7 14.5 Deferred tax expense (benefit): U.S. federal 5.0 19.7 8.6 State ( 0.5 ) ( 1.1 ) ( 6.3 ) Total deferred tax expense 4.5 18.6 2.3 Total $ 25.0 $ 34.3 $ 16.8 The reconciliation of income tax expense at the U.S. statutory rate to income tax expense is as follows: Years Ended December 31, 2024 2023 2022 (Dollars in millions) Income tax expense at U.S. statutory rate $ 27.0 21.0 % $ 20.5 21.0 % $ 25.6 21.0 % Increase (reduction) in income taxes resulting from: Income attributable to noncontrolling interests in partnerships (1) ( 1.6 ) ( 1.2 ) % ( 1.3 ) ( 1.3 ) % ( 0.9 ) ( 0.7 ) % State and other income taxes, net of federal income tax effects (2) 4.4 3.4 % 3.0 3.1 % ( 0.9 ) ( 0.7 ) % Foreign income taxes (3) — — % 3.1 3.1 % 4.8 4.0 % R&D tax credit (4) ( 0.7 ) ( 0.5 ) % ( 0.7 ) ( 0.7 ) % ( 4.0 ) ( 3.4 ) % Non-deductible equity compensation 1.7 1.3 % 2.8 2.9 % 3.0 2.5 % Return to provision adjustments ( 2.9 ) ( 2.3 ) % ( 1.8 ) ( 1.8 ) % ( 0.1 ) ( 0.1 ) % Change in valuation allowance (3) ( 3.0 ) ( 2.3 ) % 8.8 9.0 % ( 11.0 ) ( 9.0 ) % Other 0.1 0.1 % ( 0.1 ) ( 0.2 ) % 0.3 0.2 % Income tax expense at effective tax rate $ 25.0 19.5 % $ 34.3 35.1 % $ 16.8 13.8 % (1) No income tax expense is reflected in the Consolidated Statements of Income for income attributable to noncontrolling interests in our Indiana Harbor cokemaking facility. (2) During 2024, higher apportioned state tax rates required the revaluation of certain deferred tax liabilities and resulted in deferred tax expense of $ 1.7 million. The increase in apportioned state rates was mainly driven by tax planning conducted by the Company. Lower apportioned state tax rates required the revaluation of certain deferred 55 Table of Contents tax liabilities and resulted in deferred tax benefits of $ 4.9 million recorded during 2022. The decrease in apportioned state tax rates in 2022 was partly driven by the dissolution of SunCoke Energy Partners Finance Corp. (3) During 2024, the Company released a valuation allowance established on the deferred tax assets attributable to existing state net operating losses (“NOLs”) carryforwards, resulting in a deferred tax benefit of $ 3.5 million. The release of the aforementioned valuation allowance was a result of tax planning conducted by the Company, as the state NOLs carried forward from prior years are now expected to be utilized. The Company also established a $ 0.6 million valuation allowance, representing a portion of foreign tax credits projected to be unused before expiration. During 2023, the Company established an $ 8.4 million valuation allowance, which was a portion of an $ 11.3 million valuation allowance that was released during 2022 on deferred tax assets attributable to existing foreign tax credit carryforwards. The release of the valuation allowance during 2022 was a result of new regulations published in 2022 by the U.S. Treasury (2022 Foreign Tax Credit (“FTC”) final regulations) that made foreign taxes paid in future years to certain countries, including Brazil, no longer creditable in the U.S. After tax planning in 2022, the Company expected to be able to utilize its existing foreign tax credits carried forward from prior years. During 2023, Brazil enacted new legislation that aligned the Brazil transfer pricing law with the 2022 OECD Guidelines. As a result, the Company has determined that Brazil taxes paid or accrued in 2024 and forward will become creditable under the 2022 final FTC regulations. Due to the change in the Brazilian tax law, the FTCs that are projected to be created will cause $ 8.4 million of the foreign tax credit carryforward from prior years to not be utilized, resulting in the establishment of the valuation allowance during 2023. Also, during 2023, the IRS issued Notice 2023-55 and 2023-80 that generally allow taxpayers to defer the application of the of the 2022 FTC final regulations until further guidance is issued. Foreign income taxes paid in 2023 reflected the absence of the generation of foreign tax credits for taxes paid in Brazil due to the Company’s election not to defer the application of the 2022 FTC final regulations allowed under the notices. (4) SunCoke conducted an analysis with respect to the Company’s research and development activities, which resulted in a current tax benefit of $ 0.7 million during both 2024 and 2023 and a deferred tax benefit of $ 4.0 million during 2022. The tax effects of temporary differences that comprise the net deferred income tax liability from operations are as follows: December 31, 2024 2023 (Dollars in millions) Deferred tax assets: Retirement benefit liabilities $ 2.0 $ 4.1 Black lung benefit liabilities 3.1 13.2 Share-based compensation 0.2 0.6 Foreign tax credit carryforward (1) 8.9 8.4 State net operating loss carryforward, net of federal income tax effects (2) 10.1 13.2 Other liabilities not yet deductible 14.8 11.4 Total deferred tax assets 39.1 50.9 Less: valuation allowance (3) ( 15.0 ) ( 17.9 ) Deferred tax asset, net 24.1 33.0 Deferred tax liabilities: Properties, plants and equipment ( 163.7 ) ( 158.3 ) Investment in partnerships ( 57.2 ) ( 65.1 ) Total deferred tax liabilities ( 220.9 ) ( 223.4 ) Net deferred tax liability $ ( 196.8 ) $ ( 190.4 ) (1) Foreign tax credit carryforward expires in 2028 through 2035. (2) State net operating loss carryforward, net of federal income tax effects expires in 2033 through 2047. 56 Table of Contents (3) Primarily related to state net operating loss carryforwards and valuation allowance attributable to existing foreign tax credit carryforwards. The Company's consolidated federal income tax returns have been examined by the IRS for all years through the year ended December 31, 2014. Due to federal tax credit carryforwards generated by the Company for tax years ended going back to 2015, SunCoke is currently open to examination by the IRS for tax years ended December 31, 2015 and forward. State and foreign income tax returns are generally subject to examination for a period of three to five years after the filing of the respective returns. The state impact of any amended federal returns remains subject to examination by various states for a period of up to one year after formal notification of such amendments to the states. Uncertain Tax Positions During 2024, 2023 and 2022, the company recorded expense related to uncertain current and prior year tax positions of $ 0.1 million, $ 0.1 million and $ 0.3 million, respectively. At December 31, 2024, 2023 and 2022, the balances of unrecognized tax benefits at were $ 0.5 million, $ 0.4 million and $ 0.3 million, respectively, that, if recognized, will reduce the effective tax rate on income from continuing operations. There were no associated interest or penalties recognized for the years ended December 31, 2024, 2023 or 2022. The Company expects that nominal unrecognized tax benefits pertaining to income tax matters will be required in the next twelve months. 5. Inventories The Company’s inventory consists of metallurgical coal, which is the principal raw material for the Company’s cokemaking operations, coke, which is the finished good sold by the Company to its customers, and materials, supplies and other. These components of inventory, net of lower of cost or net realizable value adjustments of zero and $ 2.0 million at December 31, 2024 and 2023, respectively, were as follows: December 31, 2024 2023 (Dollars in millions) Coal $ 109.3 $ 107.7 Coke 13.9 17.4 Materials, supplies and other 57.6 57.5 Total inventories $ 180.8 $ 182.6 6. Properties, Plants, and Equipment The components of net properties, plants and equipment were as follows: December 31, 2024 2023 (Dollars in millions) Coke and energy plant, machinery and equipment $ 2,251.0 $ 2,193.9 Logistics plant, machinery and equipment 185.4 181.2 Land and land improvements 112.6 110.0 Construction-in-progress 42.9 43.3 Other 49.3 46.3 Gross investment, at cost 2,641.2 2,574.7 Less: accumulated depreciation ( 1,497.6 ) ( 1,383.6 ) Total properties, plants and equipment, net $ 1,143.6 $ 1,191.1 7. Intangible Assets Intangible assets, net, include goodwill allocated to our Domestic Coke segment of $ 3.4 million at both December 31, 2024 and 2023, 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, 2024 and 2023, 57 Table of Contents respectively. December 31, 2024 December 31, 2023 Weighted - Average Remaining Amortization Years Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net (Dollars in millions) Customer relationships 0 $ 6.7 $ 6.7 $ — $ 6.7 $ 6.2 $ 0.5 Permits 18 31.7 7.3 24.4 31.7 5.9 25.8 Other 26 1.6 0.2 1.4 1.6 0.2 1.4 Total $ 40.0 $ 14.2 $ 25.8 $ 40.0 $ 12.3 $ 27.7 The permits above represent the environmental and operational permits required to operate a coal export terminal in accordance with the U.S. Environmental Protection Agency (“EPA”) and other regulatory bodies. Intangible assets are amortized over their useful lives in a manner that reflects the pattern in which the economic benefit of the asset is consumed. The permits’ useful lives were estimated to be 27 years at acquisition based on the expected useful life of the significant operating equipment at the facility. 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. These permits have an average remaining renewal term of approximate ly 4.4 y ears. Total amortization expense for intangible assets subject to amortization was $ 1.9 million, $ 2.1 million and $ 2.0 million for the years ended December 31, 2024, 2023 and 2022, respectively. Based on the carrying value of finite-lived intangible assets as of December 31, 2024, we estimate amortization expense for each of the next five years and the aggregate amount thereafter as follows: (Dollars in millions) 2025 $ 1.5 2026 1.5 2027 1.4 2028 1.4 2029 1.4 2030-Thereafter 18.6 Total $ 25.8 8. Asset Retirement Obligations The Company has asset retirement obligations, primarily in the Domestic Coke segment, related to certain contractual obligations. These contractual obligations mostly relate to costs associated with restoring land to its original state, and may require the retirement and removal of long-lived assets from certain cokemaking properties as well as other reclamation obligations related to our former coal mining business. The Federal Surface Mining Control and Reclamation Act of 1977 and similar state statutes require that mine property be restored in accordance with specified standards and an approved reclamation plan. We do not have any unrecorded asset retirement obligations. The following table provides a reconciliation of changes in the asset retirement obligation from operations during each period: Years ended December 31, 2024 2023 (Dollars in millions) Asset retirement obligation at beginning of year $ 14.1 $ 13.8 Liabilities settled — ( 0.7 ) Accretion expense (1) 1.0 1.0 Revisions in estimated cash flows (2) 2.2 — Asset retirement obligation at end of year (3) $ 17.3 $ 14.1 58 Table of Contents (1) Included in cost of products sold and operating expenses on the Consolidated Statements of Income. (2) Revisions of estimated cash flows in 2024 were primarily due to the timing of projected spending on certain obligations. (3) The current portion of the asset retirement obligation liability was $ 0.1 million at December 31, 2024 and is classified in accrued liabilities on the Consolidated Balance Sheets. There was no current portion of the asset retirement obligation liability at December 31, 2023. 9. Retirement Benefits Plans Postretirement Health Care and Life Insurance Plans The Company has plans which provide health care and life insurance benefits for many of its retirees (“postretirement benefit plans”). The postretirement benefit plans are unfunded and the costs are borne by the Company. Effective January 1, 2011, postretirement medical benefits for future retirees were phased out or eliminated for non-mining employees with less than ten years of service. Postretirement benefit plans expense consisted of the following components: Years Ended December 31, 2024 2023 2022 (Dollars in millions) Interest cost on benefit obligations $ 0.8 $ 0.9 $ 0.6 Amortization of: Actuarial losses 0.4 0.4 0.7 Prior service benefit ( 0.1 ) ( 0.2 ) ( 0.2 ) Total expense $ 1.1 $ 1.1 $ 1.1 Postretirement benefit plans expense is determined using actuarial assumptions as of the beginning of the year or using weighted-average assumptions when curtailments, settlements and/or other events require a plan remeasurement. The following assumptions were used to determine postretirement benefit plans expense: December 31, 2024 2023 2022 Discount rate 4.95 % 5.25 % 2.50 % The following amounts were recognized as components of other comprehensive income (loss) before related tax impacts: Years Ended December 31, 2024 2023 2022 (Dollars in millions) Reclassifications to earnings of: Actuarial loss amortization $ 0.4 $ 0.4 $ 0.7 Prior service benefit amortization ( 0.1 ) ( 0.2 ) ( 0.2 ) Retirement benefit plan funded status adjustments: Actuarial gain (loss) (1) 8.3 ( 0.6 ) 4.0 $ 8.6 $ ( 0.4 ) $ 4.5 (1) The actuarial gain for the year ended December 31, 2024 was primarily due to the remeasurement of the retirement benefit plan obligation associated with a plan amendment during the current year period. 59 Table of Contents The following table sets forth the components of the changes in benefit obligations: Years Ended December 31, 2024 2023 (Dollars in millions) Benefit obligation at beginning of year $ 18.1 $ 18.8 Interest cost 0.8 0.9 Actuarial (gain) loss ( 8.3 ) 0.6 Benefits paid ( 2.0 ) ( 2.2 ) Benefit obligation at end of year (1) $ 8.6 $ 18.1 (1) The current portion of retirement benefit liabilities, which totaled $ 1.0 million and $ 2.3 million at December 31, 2024 and 2023, respectively, is classified in accrued liabilities on the Consolidated Balance Sheets. The following table sets forth the cumulative amounts not yet recognized in net income: Years Ended December 31, 2024 2023 (Dollars in millions) Cumulative amounts not yet recognized in net income: Actuarial losses $ 4.0 $ 5.4 Prior service benefits (1) ( 7.8 ) ( 0.7 ) Accumulated other comprehensive (income) loss (before related tax benefit) $ ( 3.8 ) $ 4.7 (1) The increase in prior service benefits not yet recognized in net income in 2024 reflects the impact of the remeasurement of the retirement benefit plan obligation associated with a plan amendment during the current year period. The expected benefit payments through 2034 for the postretirement benefit plan are as follows: (Dollars in millions) 2025 $ 1.1 2026 1.0 2027 0.9 2028 0.9 2029 0.8 2030 through 2034 $ 3.4 The measurement date for the Company’s postretirement benefit plans is December 31. The following discount rates were used to determine the benefit obligation: December 31, 2024 2023 Discount rate 5.40 % 4.95 % The health care cost trend assumption used at to compute the accumulated postretirement benefit obligation for the postretirement benefit plans was 6.50 percent and 6.75 percent at December 31, 2024 and 2023 , respectively, which are both assumed to decline gradually to 5.00 percent in 2031 and to remain at that level thereafter. Defined Contribution Plans The Company has defined contribution plans which provide retirement benefits for certain of its employees. The Company’s contributions, which are charged against income as incurred, amounted to $ 8.5 million, $ 7.9 million and $ 7.9 million, respectively, for the years ended December 31, 2024, 2023 and 2022. 60 Table of Contents 10. Accrued Liabilities Accrued liabilities consist of following: December 31, 2024 2023 (Dollars in millions) Accrued benefits $ 28.7 $ 26.8 Current portion of postretirement benefit obligation 1.0 2.3 Other taxes payable 10.2 10.4 Current portion of black lung liability 1.0 5.0 Lease liabilities 2.7 2.5 Other 9.0 4.7 Total accrued liabilities $ 52.6 $ 51.7 11. Debt and Financing Obligations Total debt and financing obligations consisted of the following: December 31, 2024 2023 (Dollars in millions) 4.875 percent senior notes, due 2029 (“2029 Senior Notes”) $ 500.0 $ 500.0 $ 350.0 revolving credit facility, due 2026 (“Revolving Facility”) — — Total borrowings $ 500.0 $ 500.0 Debt issuance costs ( 7.7 ) ( 9.7 ) Total long-term debt $ 492.3 $ 490.3 2029 Senior Notes 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. 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 borrow money, create liens on assets, pay dividends or make other distributions on or repurchase or redeem the Company's capital stock, prepay, redeem or repurchase certain debt, make loans and investments, sell assets, incur liens, enter into transactions with affiliates, enter into agreements restricting the ability of subsidiaries to pay dividends and consolidate, merge or sell all or substantially all of the Company's assets. Revolving Facility The proceeds of any borrowings made under the Revolving Facility can be used to finance working capital needs, acquisitions, capital expenditures and for other general corporate purposes. 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. As of December 31, 2024, the Revolving Facility had no outstanding balance leaving $ 350.0 million available. Additionally, the Company has certain letters of credit totaling $ 13.6 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 0.175 percent. Borrowings under the Revolving Facility bear interest, at SunCoke's option, at a variable rate per annum equal to either (i) an adjusted term secured overnight financing rate (“SOFR”) rate (defined as SOFR for a specified term plus a credit spread adjustment of 10 basis points, subject to a zero percent floor) plus 1.50 percent or (ii) an alternate base rate plus 0.50 percent. The applicable margin is subject to change based on SunCoke's consolidated leverage ratio, as defined in the credit agreement. The weighted-average interest rate for borrowings outstanding under the Revolving Facility was 6.9 percent during 2024. 61 Table of Contents Covenants 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 contain other covenants and events of default that are customary for similar agreements and may limit our ability to take various actions including our ability to pay a dividend or repurchase our stock. If we fail to perform our obligations under these and other covenants, the lenders' credit commitment could be terminated and any outstanding borrowings, together with accrued interest, under the Revolving Facility could be declared immediately due and payable. The Company has a cross default provision that applies to our indebtedness having a principal amount in excess of $ 35 million. As of December 31, 2024, the Company was in compliance with all debt covenants. We do not anticipate violation of these covenants nor do we anticipate that any of these covenants will restrict our operations or our ability to obtain additional financing. Maturities As of December 31, 2024, the combined aggregate amount of maturities for long-term borrowings for each of the next five years and thereafter is as follows: (Dollars in millions) 2025 $ — 2026 — 2027 — 2028 — 2029 500.0 2030-Thereafter — Total $ 500.0 12. Commitments and Contingent Liabilities Legal Matters 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. Although all projects regarding the consent decree have been completed, the consent decree remains in effect and is being overseen for compliance. 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, a consent decree with the EPA and the Indiana Department of Environmental Management was entered by the federal district court in the Northern District of Indiana during the fourth quarter of 2018. After Indiana Harbor completed all consent decree requirements, the federal district court terminated the consent decree in January 2023. The Company is a party to certain pending and threatened claims, including matters related to commercial disputes, employment claims, personal injury claims, common law tort claims, and environmental claims. Although the ultimate outcome of these claims cannot be ascertained at this time, it is reasonably possible that some portion of these claims could be resolved unfavorably to the Company. Management of the Company believes that any liability which may arise from these claims would likely not have a material adverse impact on our consolidated financial statements. SunCoke's threshold for disclosing material environmental legal proceedings involving a government authority where potential monetary sanctions are involved is $ 1 million. Black Lung Benefit Liabilities The Company has obligations to provide certain black lung benefits to legacy coal miners and their dependents under Title IV of the Federal Coal Mine Health and Safety Act of 1969, as amended (“Black Lung Benefits Act”), as well as 62 Table of Contents for black lung benefits in the states of Virginia, Kentucky and West Virginia pursuant to state workers’ compensation legislation. 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 in the fourth quarter, unless there are changes in facts and circumstances that could materially alter the amount of the liability, based on actuarial models utilizing our population of legacy coal miners, historical payout patterns of both the Company and the industry, expected claim filing patterns, expected claimant success rates, 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 applicable laws, as interpreted by the courts, and changes in filing patterns by claimants and their advisors, the impact of which cannot be estimated. On February 1, 2013, SunCoke obtained commercial insurance for state and federal black lung claims, in excess of a deductible, for employees with a last date of employment after that date. For claims based on employment that ended prior to February 1, 2013, SunCoke was reauthorized by the U.S. Department of Labor’s Division of Coal Mine Workers Compensation (“DCMWC”) to self-insure its black lung liabilities for $ 8.4 million. On February 21, 2020, DCMWC made an initial security determination to increase the amount of SunCoke’s collateral requirement for self-insured claims to $ 40.4 million. The Company appealed the security determination to the DCMWC. On August 13, 2024, the Company and DCMWC agreed that the Company would make a lump sum payment of $ 36.0 million to satisfy its self-insured federal black lung liabilities, with limited exceptions estimated to be approximately $ 1.4 million. In exchange, the DCMWC agreed to permanently assume responsibility for payment of black lung benefits for claims based on employment that ended prior to February 1, 2013, and SunCoke received a certificate of exemption that eliminates the Company’s responsibility for future payments arising from claims based on employment that ended prior to February 1, 2013, excluding limited exceptions estimated to be approximately $ 1.4 million. This agreement resulted in a reduction of $ 45.5 million of the Company's black lung liability, and a one-time gain of $ 9.5 million within selling, general and administrative expenses on the Consolidated Statements of Income during the year ended December 31, 2024. The Company no longer maintains any collateral to self-insure its former black lung liabilities incurred prior to February 1, 2013. The Company’s commercially insured federal and state black lung liabilities are not impacted by this agreement. Additionally, on January 19, 2023, the Department of Labor proposed a new rule that would require self-insured operators to post collateral in the amount of 120 percent of the company's total expected lifetime black lung liabilities as determined by the DCMWC. This proposed new rule and any future rulings would not apply to SunCoke as a result of the regulatory exemption detailed above. The following table summarizes discount rates utilized, active claims and total black lung liabilities: December 31, 2024 2023 (Dollars in millions) Discount rate (1) 4.5 % 4.5 % Active claims 57 311 Total black lung liability, discounted (2) $ 13.7 $ 58.2 Total black lung liability, undiscounted $ 25.3 $ 96.0 (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 $ 0.4 million in 2024. (2) The current portion of the black lung liability was $ 1.0 million and $ 5.0 million at December 31, 2024 and 2023, respectively, and was included in accrued liabilities on the Consolidated Balance Sheets. 63 Table of Contents Expected payments for each of the five succeeding years and the aggregate amount thereafter as of December 31, 2024: (Dollars in millions) 2025 $ 1.0 2026 0.9 2027 1.5 2028 1.1 2029 0.9 2030-Thereafter 19.9 Total $ 25.3 The following table reconciles the expected aggregate undiscounted amount to amounts recognized in the Consolidated Balance Sheets: December 31, 2024 2023 (Dollars in millions) Black lung liability, undiscounted $ 25.3 $ 96.0 Impact of discounting ( 11.6 ) ( 37.8 ) Black lung liability, discounted $ 13.7 $ 58.2 The following table summarizes the annual black lung payments and expense (benefit): Years Ended December 31, 2024 2023 2022 (Dollars in millions) Payments (1) $ 40.4 $ 5.4 $ 5.0 (Benefit) expense (2) $ ( 4.1 ) $ 5.5 $ ( 0.2 ) (1) Payments for the year ended December 31, 2024 represent $ 4.4 million of black lung benefit payments made by the Company and the $ 36.0 million payment made to the DCMWC related to the regulatory exemption detailed above. (2) The benefit for the year ended December 31, 2024 includes $ 5.4 million of accretion expense of the black lung liability and a $ 9.5 million gain related to the regulatory exemption detailed above. The $ 9.5 million gain is included in selling, general and administrative expense on the Consolidated Statement of Income. 13. Leases The Company's operating leases consist primarily of leases for land, office space, equipment, railcars and locomotives. 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. The Company's finance leases are immaterial to our consolidated financial statements. 64 Table of Contents The components of lease expense were as follows: Years ended December 31, 2024 2023 (Dollars in millions) Operating leases: Cost of products sold and operating expenses $ 2.4 $ 2.3 Selling, general and administrative expenses 0.5 0.5 $ 2.9 $ 2.8 Short-term leases: Cost of products sold and operating expenses (1)(2) 5.5 4.0 Total lease expense $ 8.4 $ 6.8 (1) Includes expenses for month-to-month equipment leases, which are classified as short-term as the Company is not reasonably certain to renew the lease term beyond one month. (2) Includes variable lease expenses, which are immaterial to the consolidated financial statements. Supplemental balance sheet information related to leases was as follows: Years ended December 31, Financial Statement Classification 2024 2023 (Dollars in millions) Operating ROU assets Deferred charges and other assets $ 11.5 $ 11.6 Operating lease liabilities: Current operating lease liabilities Accrued liabilities $ 2.4 $ 2.3 Noncurrent operating lease liabilities Other deferred credits and liabilities 8.5 8.6 Total operating lease liabilities $ 10.9 $ 10.9 The weighted average remaining lease term and weighted average discount rate were as follows: Years ended December 31, 2024 2023 Weighted average remaining lease term of operating leases 8.4 years 7.1 years Weighted average discount rate of operating leases 5.0 % 4.7 % Supplemental cash flow information related to leases was as follows: Years ended December 31, 2024 2023 (Dollars in millions) Operating cash flow information: Cash paid for amounts included in the measurement of operating lease liabilities $ 2.6 $ 2.5 Non-cash activity: ROU assets obtained in exchange for new operating lease liabilities $ 2.3 $ 2.6 65 Table of Contents Maturities of operating lease liabilities as of December 31, 2024 are as follows: (Dollars in millions) 2025 $ 2.8 2026 2.0 2027 1.6 2028 1.6 2029 1.4 2030-Thereafter 4.2 Total lease payments 13.6 Less: imputed interest 2.7 Total lease liabilities $ 10.9 14. Accumulated Other Comprehensive Loss The following tables set forth the changes in the balance of accumulated other comprehensive income (loss), net of tax, by component: Benefit Plans Currency Translation Adjustments Total (Dollars in millions) At December 31, 2022 $ ( 3.4 ) $ ( 9.6 ) $ ( 13.0 ) Other comprehensive income before reclassifications / adjustments 0.1 0.5 0.6 Retirement benefit plans funded status adjustment ( 0.4 ) — ( 0.4 ) Net current period change in accumulated other comprehensive income (loss) ( 0.3 ) 0.5 0.2 At December 31, 2023 $ ( 3.7 ) $ ( 9.1 ) $ ( 12.8 ) Other comprehensive income before reclassifications / adjustments 0.2 ( 1.5 ) ( 1.3 ) Retirement benefit plans funded status adjustment 6.4 — 6.4 Net current period change in accumulated other comprehensive income (loss) 6.6 ( 1.5 ) 5.1 At December 31, 2024 $ 2.9 $ ( 10.6 ) $ ( 7.7 ) The Company recorded tax expense of $ 0.9 million and a tax benefit of $ 1.0 million associated with the Company's benefit plans as of December 31, 2024 and 2023, respectively. The decrease in net income due to reclassification adjustments from accumulated other comprehensive income (loss) were as follows (1) : Years Ended December 31, 2024 2023 2022 (Dollars in millions) Amortization of benefit plans to net income: (2) Actuarial loss $ ( 0.4 ) $ ( 0.4 ) $ ( 0.7 ) Prior service benefit 0.1 0.2 0.2 Total before taxes ( 0.3 ) ( 0.2 ) ( 0.5 ) Income tax 0.1 0.1 0.1 Total, net of tax $ ( 0.2 ) $ ( 0.1 ) $ ( 0.4 ) (1) Amounts in parentheses indicate a decrease to net income. (2) These accumulated other comprehensive income (loss) components are included in the computation of postretirement benefit plan expense and included in interest expense, net on the Consolidated Statements of Income. See Note 9. 66 Table of Contents 15. Share-Based Compensation Equity Classified Awards . On May 12, 2022, the Company adopted the SunCoke Energy, Inc. Omnibus Long-Term Incentive Plan (the “Omnibus Plan”). The Omnibus Plan provides for the grant of equity-based awards including stock options and share units, or restricted stock, to the Company’s Board of Directors and certain employees selected for participation in the plan. The total number of shares of common stock authorized for issuance under the Omnibus Plan consists of (i) 2,700,000 new shares, (ii) 2,434,445 shares of common stock reserved for issuance primarily under the previous SunCoke Energy, Inc. Long-Term Performance Enhancement Plan (“SunCoke LTPEP”), which all equity based awards were issued under prior to the effective date of May 12, 2022, and (iii) any shares of common stock subject to awards granted under the SunCoke LTPEP that were outstanding on the effective date and that, on or after such date, are not issued or delivered to a participant. As of the effective date, new awards will no longer be granted under the SunCoke LTPEP. Awards previously granted under the SunCoke LTPEP, and described in further detail below, were not modified or impacted by the adoption of the Omnibus Plan. Stock Options Stock options granted by the Company vest in three equal annual installments beginning one year from the date of grant, and 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. There were no stock options granted by the Company during the years ended December 31, 2024, 2023 and 2022. The following table summarizes information with respect to common stock option awards outstanding as of December 31, 2024 and stock option activity during the fiscal year then ended: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value (Dollars in millions) Outstanding and Exercisable December 31, 2023 1,199,656 $ 14.89 2.3 $ 0.5 Exercised ( 283,642 ) $ 10.01 Expired ( 323,228 ) $ 20.00 Outstanding and Exercisable December 31, 2024 592,786 $ 14.45 1.1 $ 0.2 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 2024, 2023 and 2022 was $ 0.5 million, $ 0.1 million, and $ 0.2 million, respectively. Restricted Stock Units Settled in Shares The Company issues restricted stock units (“RSUs”) to be settled in shares of the Company's common stock to certain employees and members of the Board of Directors. The Company granted the following RSUs during the years ended December 31, 2024, 2023 and 2022: Number of RSUs Weighted Average Grant-Date Fair Value per Unit Grant Date Fair Value (Dollars in millions) 2024 grants 268,565 $ 10.86 $ 2.9 2023 grants 352,646 $ 8.97 $ 3.2 2022 grants 346,600 $ 7.62 $ 2.6 The RSUs granted to employees vest and become payable in three annual installments beginning one year from the date of grant. RSUs granted to the Company's Board of Directors vest upon grant, but are issued upon termination of board service. 67 Table of Contents The following table summarizes information with respect to RSUs outstanding as of December 31, 2024 and RSU activity during the fiscal year then ended: Number of RSUs Weighted Average Grant- Date Fair Value per Unit Nonvested at December 31, 2023 715,270 $ 8.12 Granted 268,565 $ 10.86 Vested ( 320,662 ) $ 7.78 Nonvested at December 31, 2024 663,173 $ 9.40 Total grant date fair value of RSUs vested was $ 2.5 million, $ 2.1 million and $ 1.7 million during 2024, 2023 and 2022, respectively. Performance Share Units The Company grants performance share units (“PSUs”), which represent the right to receive shares of the Company's common stock, contingent upon the attainment of Company performance and market goals and continued employment. The Company granted the following PSUs during the years ended December 31, 2024, 2023 and 2022: Number of PSUs Weighted Average Grant Date Fair Value per Unit Grant Date Fair Value (Dollars in millions) 2024 grant (1) 162,510 $ 10.96 $ 1.8 2023 grant (1) 147,232 $ 9.84 $ 1.4 2022 grant (1) 154,860 $ 8.40 $ 1.3 (1) The service period for the 2024, 2023, and 2022 PSUs ends on December 31, 2026, 2025 and 2024, and the awards will vest during the first quarter of 2027, 2026 and 2025, 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 U.S. Benchmark Iron & Steel Index (“TSR Modifier”). The TSR Modifier can impact the payout (between 80 percent and 120 percent of the 2024, 2023 and 2022 awards) of the Company's final performance measure results. The 2024, 2023 and 2022 awards may vest between 25 percent and 200 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 following table summarizes information with respect to unearned PSUs outstanding as of December 31, 2024 and PSU activity during the fiscal year then ended: Number of PSUs Weighted Average Grant Date Fair Value per Unit Nonvested at December 31, 2023 452,825 $ 7.50 Granted 162,510 $ 10.96 Performance adjustments 175,847 $ 11.51 Vested ( 326,580 ) $ 11.51 Nonvested at December 31, 2024 464,602 $ 9.94 68 Table of Contents Liability Classified Awards Restricted Stock Units Settled in Cash During the years ended December 31, 2024, 2023 and 2022, the Company issued 165,384 , 216,547 and 250,615 restricted stock units to be settled in cash (“Cash RSUs”), respectively, which vest in three annual installments beginning one year from the grant date. The weighted average grant date fair value of the Cash RSUs granted during the years ended December 31, 2024, 2023 and 2022, was $ 10.96 , $ 9.24 and $ 7.56 , respectively, and was based on the closing price of our common stock on the day of grant. The Cash RSU liability at December 31, 2024 was adjusted based on the closing price of our common stock on December 31, 2024 of $ 10.70 per share. The Cash RSU liability was $ 2.6 million and $ 2.8 million at December 31, 2024 and 2023, respectively. Cash Incentive Award As of May 12, 2022, The Company grants performance-based, cash settled awards to eligible participants under the Omnibus Plan. All awards vest immediately upon a change in control and a qualifying termination of employment as defined by the Omnibus Plan. The cash incentive award liability is included in accrued liabilities and other deferred credits and liabilities on the Consolidated Balance Sheets. As of the effective date, new awards will no longer be granted under the SunCoke Energy, Inc. Long-Term Cash Incentive Plan (“SunCoke LTCIP”). The awards previously granted under the SunCoke LTCIP were not modified or impacted by the adoption of the Omnibus Plan. The Company issued a grant date fair value award of $ 2.6 million, $ 2.2 million and $ 2.0 million during the years ended December 31, 2024, 2023 and 2022, respectively, for which the service periods end on December 31, 2026, 2025 and 2024, respectively, and the awards will vests during the first quarter of 2027, 2026 and 2025, respectively. The service period for certain retiree eligible participants is accelerated. The 2024, 2023 and 2022 awards are 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, 2024 was adjusted based on the Company's three-year cumulative Adjusted EBITDA and the Company's three-year adjusted average pre-tax return on capital for its coke and logistics businesses and unallocated corporate expenses. The cash incentive award liability was $ 6.8 million and $ 8.1 million at December 31, 2024 and 2023, respectively. Summary of Share-Based Compensation Expense Below is a summary of the compensation expense, unrecognized compensation costs, the period for which the unrecognized compensation cost is expected to be recognized over for each award: Years Ended December 31, 2024 2023 2022 2024 2023 2022 December 31, 2024 Compensation Expense (1) Net of tax Unrecognized Compensation Cost Weighted Average Remaining Recognition Period (Dollars in millions) (Dollars in millions) (Years) Equity Awards: RSUs $ 2.5 $ 2.9 $ 2.5 $ 1.9 $ 2.3 $ 1.9 $ 1.1 2.0 PSUs 1.4 1.9 3.9 1.1 1.4 3.0 $ 0.8 1.8 Total equity awards $ 3.9 $ 4.8 $ 6.4 $ 3.0 $ 3.7 $ 4.9 Liability Awards: Cash RSUs $ 1.9 $ 2.6 $ 2.1 $ 1.4 $ 2.0 $ 1.6 $ 1.3 1.7 Cash incentive award 2.1 2.7 5.1 1.6 2.0 3.9 $ 1.4 1.7 Total liability awards $ 4.0 $ 5.3 $ 7.2 $ 3.0 $ 4.0 $ 5.5 (1) Compensation expense is recognized by the Company in selling, general and administrative expenses on the Consolidated Statements of Income. The Company issued $ 0.1 million, $ 0.3 million, and $ 0.3 million of share-based compensation to the Company's Board of Directors in addition to RSUs included in the table above during the years ended December 31, 2024, 2023 and 2022, respectively. 69 Table of Contents 16. Earnings Per Share Basic earnings per share (“EPS”) has been computed by dividing net income attributable to SunCoke Energy, Inc. by the weighted average number of shares outstanding during the period. Except where the result would be anti-dilutive, diluted earnings per share has been computed to give effect to share-based compensation awards using the treasury stock method. The following table sets forth the reconciliation of the weighted-average number of common shares used to compute basic earnings per share to those used to compute diluted EPS: Years Ended December 31, 2024 2023 2022 (Shares in millions) Weighted-average number of common shares outstanding-basic 85.1 84.7 83.8 Add: effect of dilutive share-based compensation awards 0.2 0.2 0.8 Weighted-average number of shares-diluted 85.3 84.9 84.6 The following table shows stock options, restricted stock units, and performance stock units that are excluded from the computation of diluted earnings per share as the shares would have been anti-dilutive: Years Ended December 31, 2024 2023 2022 (Shares in millions) Stock options 0.6 1.2 1.6 Performance share units 0.1 — — Total 0.7 1.2 1.6 17. Fair Value Measurements The Company measures certain financial and non-financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. Fair value disclosures are reflected in a three-level hierarchy, maximizing the use of observable inputs and minimizing the use of unobservable inputs. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows: • Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market. • Level 2—inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability. • Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability. Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis Cash and Cash Equivalents Certain assets and liabilities are measured at fair value on a recurring basis. The Company’s cash and cash equivalents were measured at fair value at December 31, 2024 and December 31, 2023 based on quoted prices in active markets for identical assets. These inputs are classified as Level 1 within the valuation hierarchy. Certain Financial Assets and Liabilities not Measured at Fair Value At December 31, 2024 and 2023, the fair value of the Company’s long-term debt was estimated to be $ 454.9 million and $ 450.2 million, respectively, compared to a carrying amount of $ 500.0 million at both periods. These fair values were estimated by management based upon estimates of debt pricing provided by financial institutions which are considered Level 2 inputs. 70 Table of Contents 18. Revenue from Contracts with Customers Cokemaking Our blast furnace coke sales are largely made pursuant to long-term, take-or-pay agreements. 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, 2024, our coke sales agreements have approximately 19.1 million tons of unsatisfied or partially unsatisfied performance obligations, which are expected to be delivered over a weighted average remaining contract term of approximately nine years . Sales prices for coke sold under our long-term, take-or-pay agreements include an operating cost component, a coal cost component and a return of capital component. Operating costs under four of our coke sales agreements are fixed subject to an annual adjustment based on an inflation index. Under our other three 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. To the extent that the actual coal-to-coke yields are less than the contractual standard, we are responsible for the cost of the excess coal used in the cokemaking process. Conversely, to the extent our actual coal-to-coke yields are higher than the contractual standard, we realize gains. The reimbursement of pass-through operating and coal costs from these coke sales agreements are considered to be variable consideration components included in the cokemaking sales price. The return of capital component for each ton of coke sold to the customer is determined at the time the coke sales agreement is signed and is effective for the term of each sales agreement. This component of our coke sales prices is intended to provide an adequate return on invested capital and may differ based on investment levels and other considerations. The actual return on invested capital at any facility is also impacted by favorable or unfavorable performance on pass-through cost items. 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. We also sell non-contracted blast furnace coke tons into the North American spot coke and export coke markets, utilizing capacity in excess of that reserved for our long-term, take-or-pay agreements. These non-contracted blast coke sales are generally sold on a spot basis at the current market price, and do not contain the same provisions as our long-term, take-or-pay agreements discussed above. While the revenues in our Domestic Coke segment are primarily tied to blast furnace coke sales made under long-term, take-or-pay agreements, we also produce and sell foundry coke out of our Jewell cokemaking facility. 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. Logistics In our logistics business, handling and/or mixing services are provided to steel, coke (including some of our domestic cokemaking facilities), electric utility, coal producing and other manufacturing based customers. Materials are transported in numerous ways, including rail, truck, barge or ship. We do not take possession of materials handled, but rather act as intermediaries between our customers and end users, deriving our revenues from services provided on a per ton basis. The handling and mixing services consist primarily of two performance obligations, unloading and loading of materials. Revenues are recognized when the customer receives the benefits of the services provided, in an amount that reflects the consideration that we will receive in exchange for those services. Estimated take-or-pay revenue of approximately $ 64.3 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, 2024. Energy 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. Our Middletown facility and the second phase of our Haverhill facility, or Haverhill II, have cogeneration plants that generate electricity, which is either sold into the regional power market or to customers pursuant to energy sales agreements. Our Granite City facility and the first phase of our Haverhill facility, or Haverhill I, have steam generation facilities, which produce steam for sale to customers pursuant to steam supply and purchase agreements. The energy provided under these arrangements results in transfer of control over time. Revenues are recognized over time as energy is delivered to our customers, in an amount based on the terms of each arrangement. Energy generated at our remaining facilities is either used internally or provided, at minimal cost, to energy suppliers. 71 Table of Contents Operating and Licensing Fees Operating and licensing fees are made pursuant to long-term contracts with ArcelorMittal Brazil, where we operate a Brazilian cokemaking facility. The licensing fees are based upon the level of production required by our customer. Operating fees include the full pass-through of the operating costs of the Brazilian facility as well as a per ton fee based on the level of production required by our customer. Revenues are recognized over time as our customers receive and consume the benefits in an amount that corresponds directly with the value provided to the customer to date. Disaggregated Sales and Other Operating Revenue The following table provides disaggregated sales and other operating revenue by product or service, excluding intersegment revenues: Years Ended December 31, 2024 2023 2022 (Dollars in millions) Sales and other operating revenue: Cokemaking $ 1,766.5 $ 1,898.5 $ 1,791.3 Energy 47.9 47.3 61.5 Logistics 81.3 73.1 76.7 Operating and licensing fees 35.1 35.2 38.0 Other 4.6 9.1 5.0 Sales and other operating revenue $ 1,935.4 $ 2,063.2 $ 1,972.5 See Note 3 Customer Concentrations for further detail on operating revenue. 19. Business Segment Information The Company’s reportable segments are strategic business units that offer different products and services. They are managed separately because each business requires different operational support and management. The Company reports its business through three reportable segments: Domestic Coke, Brazil Coke and Logistics. The Domestic Coke segment includes the Jewell, Indiana Harbor, Haverhill, Granite City and Middletown cokemaking facilities. Each of these facilities produces coke, and all facilities except Jewell recover waste heat, which is converted to steam or electricity. The Brazil Coke segment includes the licensing and operating fees payable to us under long-term contracts with ArcelorMittal Brazil, under which we operate a cokemaking facility located in Vitória, Brazil through January 2028. Logistics operations are comprised of CMT, KRT, and Lake Terminal, which provides services to our Indiana Harbor cokemaking facility. Handling and mixing results are presented in the Logistics segment. The Company elected to combine Dismal River Terminal (“DRT”) operations into the Jewell cokemaking operations in the Domestic Coke segment beginning January 1, 2023. The DRT results were included in the Logistics segment in 2022 and are not recast. Corporate expenses that can be identified with a segment have been included in determining segment results. The remainder is included in Corporate and Other, which is not a reporting segment, but which also includes activity from our legacy coal mining business. Segment assets are those assets utilized within a specific segment. In considering the financial performance of the business, the chief operating decision maker (“CODM”), who is the Company’s President and Chief Executive Officer, evaluates the performance of its segments based on Adjusted EBITDA reportable segments, which is defined as earnings before interest, taxes, depreciation and amortization, adjusted for any impairments, restructuring costs, gains or losses on extinguishment of debt, transaction costs, and/or corporate/other expenses (“Adjusted EBITDA reportable segments”). The CODM uses this measure to help determine the allocation of costs and resources to our reportable segments. Additionally, other companies may calculate Adjusted EBITDA reportable segments differently than we do, limiting its usefulness as a comparative measure. 72 Table of Contents The following tables include Adjusted EBITDA reportable segments, as defined above, which is a 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. Year Ended December 31, 2024 (Dollars in millions) Domestic Coke Brazil Coke Logistics Total Sales and other operating revenue $ 1,817.3 $ 35.1 $ 83.0 $ 1,935.4 Intersegment revenues — — 22.9 22.9 Net revenues $ 1,817.3 $ 35.1 $ 105.9 $ 1,958.3 Reconciliation of revenue Elimination of intersegment revenues ( 22.9 ) Total consolidated revenues $ 1,935.4 Less: (1) Operating and maintenance expense $ 306.4 $ 21.9 $ 53.8 Cost of products sold and other expenses (2) 1,244.2 — — Selling, general and administrative expenses 32.0 3.3 1.7 Adjusted EBITDA reportable segments $ 234.7 $ 9.9 $ 50.4 $ 295.0 Depreciation and amortization expense 118.9 Interest expense, net (3) 23.4 Other corporate expenses (4) 24.2 Income before income tax expense $ 128.5 (1) The significant expense categories and amounts align with segment-level information that is regularly provided to the CODM. (2) Cost of products sold and other expenses includes coal and transportation costs. (3) Interest expense, net of $ 23.4 million reflects (i) consolidated interest expense of $ 28.7 million and (ii) consolidated interest income of $ 5.3 million. (4) Other corporate expenses represents business expenses not allocated to the Company’s reportable segments and are included in Corporate, which is not a reportable segment. 73 Table of Contents Year Ended December 31, 2023 (Dollars in millions) Domestic Coke Brazil Coke Logistics Total Sales and other operating revenue $ 1,954.0 $ 35.2 $ 74.0 $ 2,063.2 Intersegment revenues — — 22.1 22.1 Net revenues $ 1,954.0 $ 35.2 $ 96.1 $ 2,085.3 Reconciliation of revenue Elimination of intersegment revenues ( 22.1 ) Total consolidated revenues $ 2,063.2 Less: (1) Operating and maintenance expense $ 305.1 $ 22.7 $ 50.3 Cost of products sold and other expenses (2) 1,368.6 — — Selling, general and administrative expenses 32.5 3.4 1.5 Adjusted EBITDA reportable segments $ 247.8 $ 9.1 $ 44.3 $ 301.2 Depreciation and amortization expense 142.8 Interest expense, net (3) 27.3 Other corporate expenses (4) 33.3 Income before income tax expense $ 97.8 (1) The significant expense categories and amounts align with segment-level information that is regularly provided to the CODM. (2) Cost of products sold and other expenses includes coal and transportation costs. (3) Interest expense, net of $ 27.3 million reflects (i) consolidated interest expense of $ 30.0 million and (ii) consolidated interest income of $ 2.7 million. (4) Other corporate expenses represents business expenses not allocated to the Company’s reportable segments and are included in Corporate, which is not a reportable segment. 74 Table of Contents Year Ended December 31, 2022 (Dollars in millions) Domestic Coke Brazil Coke Logistics Total Sales and other operating revenue $ 1,856.9 $ 38.0 $ 77.6 $ 1,972.5 Intersegment revenues — — 28.9 28.9 Net revenues $ 1,856.9 $ 38.0 $ 106.5 $ 2,001.4 Reconciliation of revenue Elimination of intersegment revenues ( 28.9 ) Total consolidated revenues $ 1,972.5 Less: (1) Operating and maintenance expense $ 294.4 $ 19.8 $ 55.2 Cost of products sold and other expenses (2) 1,263.7 — — Selling, general and administrative expenses 35.4 3.7 1.6 Adjusted EBITDA reportable segments $ 263.4 $ 14.5 $ 49.7 $ 327.6 Depreciation and amortization expense 142.5 Interest expense, net (3) 32.0 Other corporate expenses (4) 31.4 Income before income tax expense $ 121.7 (1) The significant expense categories and amounts align with segment-level information that is regularly provided to the CODM. (2) Cost of products sold and other expenses includes coal and transportation costs. (3) Interest expense, net of $ 32.0 million reflects (i) consolidated interest expense of $ 32.7 million and (ii) consolidated interest income of $ 0.7 million. (4) Other corporate expenses represents business expenses not allocated to the Company’s reportable segments and are included in Corporate, which is not a reportable segment. 75 Table of Contents The following table sets forth the Company’s depreciation and amortization expense as well as its capital expenditures: Years Ended December 31, 2024 2023 2022 (Dollars in millions) Depreciation and amortization expense: Domestic Coke $ 105.2 $ 129.4 $ 126.8 Brazil Coke 0.3 0.3 0.2 Logistics 12.6 12.8 14.5 Total reportable segments $ 118.1 $ 142.5 $ 141.5 Corporate and Other 0.8 0.3 1.0 Total depreciation and amortization expense $ 118.9 $ 142.8 $ 142.5 Capital expenditures: Domestic Coke $ 64.2 $ 103.2 $ 70.3 Brazil Coke 8.0 0.4 0.1 Logistics 0.2 5.1 4.5 Total reportable segments $ 72.4 $ 108.7 $ 74.9 Corporate and Other 0.5 0.5 0.6 Total capital expenditures $ 72.9 $ 109.2 $ 75.5 The following table sets forth the Company’s segment assets: December 31, 2024 2023 (Dollars in millions) Segment assets: Domestic Coke $ 1,351.1 $ 1,405.5 Brazil Coke 10.2 11.9 Logistics 158.2 158.4 Total reportable segments $ 1,519.5 $ 1,575.8 Corporate and Other 148.7 84.6 Total assets $ 1,668.2 $ 1,660.4 76 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.