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Item 7. Management’s Discussion and Analysis

2026-02-20 compared with 2025-02-21 · 177 added, 155 removed, 160 unchanged (67% of the section changed)

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Our consolidated results of operations in 2025 were as follows:

Year Ended December 31, 2024

Years Ended December 31,

2025 2024 Increase (Decrease)

(Dollars in millions)

Net income $ 103.5

Net (loss) income

$ (38.8) $ 103.5 $ (142.3)

Net cash provided by operating activities $ 109.1 $ 168.8 $ (59.7)

Adjusted EBITDA (1)

$ 219.2 $ 272.8 $ (53.6)

(1) See “Non-GAAP Financial Measures” in this Item 7 below for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement.

Operating results during the year ended December 31, 2024 primarily reflect higher transloading volumes and pricing in our Logistics segment, as well as the extinguishment of certain black lung liabilities during the current year period, which resulted in the recognition of a $9.5 million pre-tax gain.

These increases were partially offset by unfavorable coal-to-coke yields on our long-term, take-or-pay agreements within our Domestic Coke segment.

Operating cash flows during the current period primarily reflect an unfavorable year-over-year change in primary working capital and a one-time payment of $36.0 million related to the extinguishment of certain black lung liabilities.

We returned meaningful capital to our shareholders through the declaration and payment of a dividend during each quarter of 2024, increasing from $0.10 per share during the first half of the year to $0.12 per share during the second half of the year, representing a quarterly increase of 20 percent.

Operating results during the year ended December 31, 2025 primarily reflect a $90.1 million ($68.1 million net of tax) impairment charge at our Haverhill I cokemaking facility as a result of Algoma Steel's breach of contract.

Additionally, operating results reflect lower pricing in our Domestic Coke segment mainly driven by the mix of contracted and non-contracted blast coke sales in the current year period, lower volumes due to unfavorable coal-to-coke yields, lower volumes due to Algoma Steel's breach of contract , the impact of the Granite City contract extension economics, lower terminals handling volumes due to market conditions as well as the absence of a $9.5 million pre-tax gain related to the extinguishment of certain black lung liabilities during the prior year period.

Operating results for the year ended December 31, 2025 include five months of operating results associated with the acquisition of Flame Aggregator, LLC (“Phoenix Global”).

Net loss was reduced during the current year period by income tax benefits recognized on investment tax credits and the impairment charge discussed above.

Operating cash flows during the current period primarily reflect payments to settle liabilities assumed as part of the acquisition of Phoenix Global, an increase in income tax receivables related to capital investment tax credits and the unfavorable operating results discussed above.

See detailed analysis of the year's results throughout this MD&A.

We returned meaningful capital to our shareholders through the declaration and payment of a dividend of $0.12 per share during each quarter of 2025.

Recent Developments

• One Big Beautiful Bill Act.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law.

The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027.

Following the enactment of the OBBBA, the Company recognized the tax effects of the legislation in the interim period that included the enactment date, as required under ASC 740, Income Taxes.

The Company has evaluated the impact of the OBBBA on cash taxes, deferred tax assets and liabilities and has reflected these effects in the consolidated financial statements for the year ended December 31, 2025.

• Revolving Facility Extension.

On July 25, 2025, we amended and extended the maturity of our revolving credit facility (“Revolving Facility”) to July 2030 under substantially similar terms.

The amendment also reduced the Revolving Facility capacity by $25.0 million to $325.0 million.

• Acquisition of Phoenix Global.

On August 1, 2025, we completed the acquisition of Phoenix Global, a privately held provider of mission-critical mill services to major steel producing companies.

We acquired Phoenix Global for preliminary purchase consideration of $295.8 million.

See Note 3 to our consolidated financial statements for further detail.

• Algoma Coke Supply Contract.

At the end of the third quarter of 2025, we were notified of Algoma Steel Inc's breach of contract and refusal to accept any additional coke tons.

We are actively pursuing all avenues to enforce the contract and recover any financial losses.

• Haverhill II Contract Extension.

In November 2025, the Haverhill II long-term, take-or-pay agreement with Cleveland-Cliffs Steel Holding Corporation and Cleveland-Cliffs Steel LLC, subsidiaries of Cleveland-Cliffs Inc.

and collectively referred to as “Cliffs Steel,” was extended through December 31, 2028.

Under the extension, the Company will provide 500 thousand tons of metallurgical coke annually.

• Haverhill I Closure.

In the fourth quarter of 2025, the Company made the decision to optimize its coke fleet and close its Haverhill I cokemaking facility in the first quarter of 2026, resulting in the impairment charges discussed above.

• Granite City Contract Extension.

In October 2024, the Granite City long-term, take-or-pay agreement with United States Steel Corporation (“U.S.

Steel”) was extended through June 30, 2025, with an option for U.S.

Steel to extend for an additional six months.

Under the terms of the agreement, Granite City will supply 295 thousand tons of coke to U.S.

Steel during the initial six month term.

The terms of the extension includes a turn down fee, but results in significantly lower overall economics compared to the current long-term, take-or-pay agreement.

Other key provisions of the agreement, including the pass-through of coal costs, remain unchanged.

In January 2026, the Granite City long-term, take-or-pay agreement with United States Steel Corporation (“U.S.

Steel”) was extended through December 31, 2026.

Under the extension, the Company will provide 590 thousand tons of metallurgical coke.

The provisions and economics of this extension remain similar to those included in the previous extensions executed in 2024 and 2025.

Items Impacting Comparability

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In August 2024, the Company reached an agreement with the DCMWC and made a payment of $36.0 million to extinguish the majority of its self-insured federal black lung liabilities.

As a result of the agreement, the Company recognized a $9.5 million pre-tax gain within selling, general and administrative expenses on the Consolidated Statements of Income during the year ended December 31, 2024.

As a result of the agreement, the Company recognized a $9.5 million pre-tax gain within selling, general and administrative expenses on the Consolidated Statements of Operations during the year ended December 31, 2024.

The agreement resulted in a reduction of $45.5 million of the Company's black lung liability on the Consolidated Balance Sheets.

See Note 13 to our consolidated financial statements for further detail.

• Acquisition of Phoenix Global.

As discussed above, we completed the acquisition of Phoenix Global on August 1, 2025 and five months of Phoenix Global results are included in the consolidated financial statements.

Consolidated Results of Operations

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153.6 118.9 34.7

Long-lived asset impairment 90.3 — 90.3

Total costs and operating expenses 1,881.7 1,783.5 98.2

Operating income 151.9 125.1 26.8

Operating (loss) income (44.4) 151.9 (196.3)

Interest expense, net

28.4 23.4 5.0

Income before income tax expense 128.5 97.8 30.7

Income tax expense 25.0 34.3 (9.3)

Net income 103.5 63.5 40.0

(Loss) income before income tax (benefit) expense

(72.8) 128.5 (201.3)

Income tax (benefit) expense (34.0) 25.0 (59.0)

Net (loss) income (38.8) 103.5 (142.3)

Net income attributable to noncontrolling interests

Net income attributable to SunCoke Energy, Inc.

5.4 7.6 (2.2)

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

$ (44.2) $ 95.9 $ (140.1)

Sales and Other Operating Revenue and Costs of Products Sold and Operating Expenses.

Sales and other operating revenue and costs of products sold and operating expenses decreased in 2024 as compared to 2023, primarily driven by the pass-through of lower coal prices on our long-term, take-or-pay agreements.

Sales and other operating revenue and costs of products sold and operating expenses decreased during 2025 compared to the same prior year period, driven by lower pricing in our Domestic Coke segment mainly driven by the mix of contracted and non-contracted blast coke sales in the current year period, lower contracted coke tons delivered due to Algoma Steel's breach of contract, the impact of the Granite City contract extension economics and the impact of the pass-through of lower coal prices on our long-term, take-or-pay agreements.

Additionally, sales and other operating revenue during 2025 were negatively impacted by lower volumes due to unfavorable coal-to-coke yields.

The decreases in sales and other operating revenue and costs of products sold and operating expenses were partially offset by the inclusion of five months of Phoenix Global results.

Selling, General and Administrative Expenses.

The decrease in selling, general and administrative expense was primarily impacted by the recognition of a $9.5 million gain, which was the result of the extinguishment of certain liabilities related to our legacy coal mining business.

S elling, general and administrative expenses increased during 2025, reflecting transaction costs of $10.1 million incurred related to the acquisition of Phoenix Global as well as the absence of a $9.5 million gain, which was the result of the extinguishment of certain liabilities related to our legacy coal mining business in the prior year period.

See Note 13 to our consolidated financial statements for further detail.

Additionally, s elling, general and administrative expenses during 2025 further increased due to the inclusion of Phoenix Global's costs in the current year period.

These increased costs were partially offset by lower employee related expenses and lower legal expenses in the current year period.

Depreciation and Amortization Expense.

Depreciation and amortization expense decreased in 2024 as compared to 2023 as a result of the expiration of the useful lives of assets in our Domestic Coke segment, which were placed into service in prior periods.

The increase to depreciation and amortization expense during 2025 reflects the inclusion of Phoenix Global's expense in the current year period.

This increase was partially offset by the expiration of the useful lives of assets in our Domestic Coke segment placed into service in prior periods.

Long-lived Asset Impairment.

During the fourth quarter of 2025, a triggering event occurred requiring a review for impairment at our Haverhill I cokemaking facility, which resulted in a $90.1 million impairment charge.

See Note 7 to our consolidated financial statements for further detail.

Interest Expense, net.

Interest expense, net, benefited in 2024 from lower average debt balances during the current year period and higher interest income of $2.6 million.

Income Tax Expense.

Income tax expense during 2024 benefited from the absence of $8.4 million of deferred tax expense recorded in the prior year related to the establishment of a valuation allowance on deferred tax assets attributable to existing foreign tax credit carryforwards, as a result of changes in tax regulations.

Additionally, the current year period further benefited from the release of valuation allowances established on deferred tax assets related to state net operating loss carryforwards, partially offset by the revaluation of certain deferred tax liabilities due to changes in apportioned state tax rates.

Interest expense, net, during 2025 increased as a result of interest incurred on Revolving Facility borrowings related to the acquisition of Phoenix Global.

Income Tax (Benefit) Expense.

Income tax (benefit) expense during 2025 benefited from an analysis conducted as part of tax planning on the Company's capital investments under Section 48 of the Internal Revenue Code as well as the income tax impact of the Haverhill I long-lived asset impairment charge, which resulted in a net tax benefit.

This benefit was partially offset by nondeductible transaction costs in connection with the acquisition of Phoenix Global.

See Note 5 to our consolidated financial statements for further detail.

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Results of Reportable Business Segments

We report our business results through three reportable segments:

• Domestic Coke consists of our Jewell facility, located in Vansant, Virginia, our Indiana Harbor facility, located in East Chicago, Indiana, our Haverhill facility, located in Franklin Furnace, Ohio, our Granite City facility located in Granite City, Illinois, and our Middletown facility located in Middletown, Ohio.

• Brazil Coke consists of operations in Vitória, Brazil, where we operate the ArcelorMittal Brazil cokemaking facility.

• Logistics consists of CMT, located in Convent, Louisiana, KRT, located in Ceredo and Belle, West Virginia, and Lake Terminal, located in East Chicago, Indiana.

Following the acquisition of Phoenix Global and as discussed in Note 20 – Business Segment Information, we updated our reportable segments and have recast all segment information for all prior periods presented herein to reflect this change.

We report our business results through two reportable segments:

• Domestic Coke consists of our Jewell facility, located in Virginia, our Indiana Harbor facility, located in Indiana, our Granite City facility located in Illinois, and our Middletown and Haverhill facilities located in Ohio.

• Industrial Services consists of logistics terminals including CMT, located in Louisiana, KRT, located in West Virginia, and Lake Terminal, located in Indiana.

Lake Terminal is located adjacent to our Indiana Harbor cokemaking facility.

The operations of each of our reportable segments are described in Part I of this Annual Report on Form 10-K.

Additionally, Industrial Services includes fifteen molten slag removal, handling and processing operating sites across the United States, Brazil, Slovakia and Spain.

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

The remainder is included in Corporate and Other, including activity from our legacy coal mining business, which is not considered a reportable segment and, therefore, not included in our segment information in Note 19.

The remainder is included in Corporate and Other, including licensing and operating fees payable to us under long-term contracts with ArcelorMittal Brazil as well as the expenses related to those operations and activity from our legacy coal mining business, which is not considered a reportable segment and therefore, not included in our segment information in Note 20.

However, we have included Corporate and Other within our operating data below.

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Adjusted EBITDA should not be considered a substitute for the reported results prepared in accordance with GAAP.

See the “Non-GAAP Financial Measures” section below for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement.

See the “Non-GAAP Financial Measures” section for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement.

Segment Operating Data

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$ 1,613.8 $ 1,817.3 $ (203.5)

35.1 35.2 (0.1)

83.0 74.0 9.0

Logistics intersegment sales

22.9 22.1 0.8

Industrial Services 187.8 83.0 104.8

Industrial Services intersegment sales 21.9 22.9 (1.0)

Elimination of intersegment sales

(21.9) (22.9) 1.0

Total sales and other operating revenue

Total sales and other operating revenue reportable segments $ 1,801.6 $ 1,900.3 $ (98.7)

Corporate and other, net (1)

35.7 35.1 0.6

Total Sales and other operating revenue $ 1,837.3 $ 1,935.4 $ (98.1)

Adjusted EBITDA:

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$ 170.0 $ 234.7 $ (64.7)

Logistics 50.4 44.3 6.1

Industrial Services 62.3 50.4 11.9

Total Adjusted EBITDA reportable segments 232.3 285.1 (52.8)

Corporate and Other, net (1)

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$ 46.35 $ 58.27 $ (11.92)

Brazilian Coke production—operated facility (thousands of tons) 1,579 1,558 21

Logistics Operating Data:

Tons handled (thousands of tons) 22,540 20,483 2,057

(1) Corporate and Other, net is not a reportable segment.

Industrial Services Operating Data:

Terminals handling volumes (thousands of tons)

20,320 22,540 (2,220)

Steel customer volumes serviced (thousands of tons)

9,223 — 9,223

(1) Corporate and Other, net is not a reportable segment and includes the results of Brazil cokemaking operations.

(2) See the “Non-GAAP Financial Measures” section below for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement.

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(151.1) (45.0)

(55.8) (39.8)

Operating and maintenance costs (3)

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Ending $ 1,613.8 $ 170.0

(1) Volumes during 2024 were negatively impacted by lower coal-to-coke yields.

These decreases were partially and completely offset for Revenues and Adjusted EBITDA, respectively, by higher volumes on our foundry coke sales and higher volumes at certain of our cokemaking facilities driven by the absence of oven rebuilds in the current year period.

(2) Sales and other operating revenue decreased primarily as a result of the pass-through of lower coal prices on our long-term, take-or-pay agreements.

Adjusted EBITDA was negatively impacted by lower coal-to-coke yields on our long-term, take-or-pay agreements and lower sales pricing on our non-contracted blast coke sales, which was partially offset by the impact of lower coal prices on our non-contracted blast coke sales.

(3) Operating and maintenance costs primarily benefited in the current year period from lower planned outage costs and the absence of oven rebuilds.

(4) Energy and other decreased primarily as a result of unfavorable energy pricing.

These decreases were partially offset by higher energy sales as a result of increased volumes related to upgrades of our assets made in the prior year period .

The following table explains year-over-year changes in our Logistics segment's sales and other operating revenues, exclusive of intersegment sales, and Adjusted EBITDA results:

Sales and other operating revenue, exclusive of intersegment sales Adjusted EBITDA

2024 vs 2023 2024 vs 2023

(Dollars in millions)

Beginning $ 74.0 $ 44.3

Transloading volumes (1)

Price/margin impact of mix in transloading services (2)

Ending $ 83.0 $ 50.4

Intersegment sales and other operating revenue in our Logistics segment were $22.9 million and $22.1 million as of December 31, 2024 and 2023, respectively.

Adjusted EBITDA presented above is inclusive of the impact of intersegment transactions.

(1) Volumes primarily increased as a result of higher demand and transloading volumes at KRT.

(2) Revenues and Adjusted EBITDA increased as a result of higher transloading pricing at CMT.

(3) Revenues and Adjusted EBITDA increased as a result of favorable ancillary revenue.

Sales and other operating revenue decreased $0.1 million, or zero percent, to $35.1 million in 2024 compared to $35.2 million in 2023.

Adjusted EBITDA increased $0.8 million, or 9 percent, to $9.9 million in 2024 compared to $9.1 million in 2023.

The increase in Adjusted EBITDA primarily reflects higher operating fees and production volumes.

(1) Volumes during 2025 were negatively impacted by lower coal-to-coke yields, lower contracted coke tons delivered due to Algoma Steel's breach of contract and lower coke tons in the Granite City contract extension.

(2) The pass-through of lower coal prices decreased sales and other operating revenue during 2025.

Further, sales and other operating revenue and Adjusted EBITDA decreased during 2025 as a result of lower pricing on our non-contracted blast coke sales and the impact of lower economics on the Granite City contract extension.

Additionally, Adjusted EBITDA was negatively impacted by lower coal-to-coke yields on our long-term, take-or-pay agreements.

(3) Operating and maintenance costs during 2025 benefited from lower planned maintenance outage costs in the current year as well as the timing of other maintenance costs.

(4) Energy and other increased due to favorable energy pricing, which was partially offset by lower energy sales volumes as a result of energy-generating asset outages in the current year period.

Industrial Services

Sales and other operating revenues, exclusive of intersegment sales, was $187.8 million in 2025 compared to $83.0 million in the corresponding prior year period.

Adjusted EBITDA, inclusive of the impact of intersegment transactions, was $62.3 million in 2025 , compared to $50.4 million , in the corresponding prior year period.

Industrial services results during 2025 include the results of five months of Phoenix Global.

Sales and other operating revenues and Adjusted EBITDA for 2025 were negatively impacted by lower transloading volumes due to market conditions and lower transloading pricing at CMT driven by the absence of an index price adjustment benefit as compared to the prior year period.

Corporate and Other

Corporate and Other Adjusted EBITDA increased $10.2 million, or 31 percent, to a loss of $22.2 million in 2024 compared to a loss of $32.4 million in 2023.

This increase was primarily driven by the recognition of a $9.5 million gain, which was the result of the extinguishment of certain liabilities related to our legacy coal mining business.

See Note 12 to our consolidated financial statements for further detail.

Corporate and Other Adjusted EBITDA represented a loss of $13.1 million in 2025 compared to a loss of $12.3 million in 2024.

This increase was primarily driven by the absence of a $9.5 million gain, which was the result of the extinguishment of certain liabilities related to our legacy coal mining business in the prior year period.

These increases were partially offset during 2025 by lower employee related expenses and lower legal expenses.

Non-GAAP Financial Measures

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This measure is not in accordance with, or a substitute for, GAAP and may be different from, or inconsistent with, non-GAAP financial measures used by other companies.

The Company evaluates the performance of its segments based on segment Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted for any impairments, restructuring costs, gains or losses on extinguishment of debt, and/or transaction costs (“Adjusted EBITDA”).

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

Management believes Adjusted EBITDA is an important measure in assessing operating performance.

Adjusted EBITDA provides useful information to investors because it highlights trends in our business that may not otherwise be apparent when relying solely on GAAP measures and because it eliminates items that have less bearing on our operating performance.

Adjusted EBITDA provides useful information to investors because it highlights trends in our business that may not otherwise be

apparent when relying solely on GAAP measures and because it eliminates items that have less bearing on our operating performance.

EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, and they should not be considered a substitute for net income, or any other measure of financial performance presented in accordance with GAAP.

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Reconciliation of Non-GAAP Financial Measures

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

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

Years Ended December 31,

2024 2023 2022

(Dollars in millions)

Net income $ 103.5 $ 63.5 $ 104.9

Net (loss) income $ (38.8) $ 103.5

Depreciation and amortization expense 153.6 118.9

Interest expense, net 28.4 23.4

Income tax expense 25.0 34.3 16.8

Long-lived asset impairment (1)

Income tax (benefit) expense (34.0) 25.0

Loss on derivative forward contracts 0.7 —

Restructuring costs (2)

Transaction costs (3)

Site closure costs (4)

Adjusted EBITDA $ 219.2 $ 272.8

(1) Reflects costs incurred related to potential mergers and acquisitions and the granulated pig iron project with U.S.

(1) Primarily reflects the long-lived asset impairment charge associated with our Haverhill I cokemaking facility asset group within the Domestic Coke reportable segment.

See Note 7 to our consolidated financial statements for further detail.

(2) Restructuring costs include severance and other related charges primarily associated with the acquisition of Phoenix Global.

(3) Reflects costs incurred related to the Phoenix Global acquisition and the granulated pig iron project with U.S.

(4) Primarily reflects costs incurred associated with closing certain Phoenix Global operating sites.

Liquidity and Capital Resources

Our primary liquidity needs are to fund working capital, fund investments, service our debt, maintain cash reserves and replace partially or fully depreciated assets and other capital expenditures.

Our sources of liquidity include cash generated from operations, borrowings under our revolving credit facility (“Revolving Facility”) and, from time to time, debt and equity offerings.

We believe our current resources are sufficient to meet our working capital requirements for our current

business for at least the next 12 months and thereafter for the foreseeable future.

Our primary liquidity needs are to fund working capital and investments, service our debt, maintain cash reserves and replace partially or fully depreciated assets and other capital expenditures.

Our sources of liquidity include cash generated from operations, borrowings under our Revolving Facility and, from time to time, debt and equity offerings.

We believe our current resources are sufficient to meet our working capital requirements for our current business for at least the next 12 months and thereafter for the foreseeable future.

We funded the acquisition of Phoenix Global with existing cash and borrowing availability under our Revolving Facility.

As of December 31, 2025, we had $88.7 million of cash and cash equivalents and $132.0 million of borrowing availability under our Revolving Facility.

We have not provided foreign withholding taxes, state income taxes and federal and state taxes on foreign currency gains/losses on accumulated undistributed earnings of certain foreign subsidiaries because these earnings are considered to be permanently reinvested.

It is not practicable to determine the amount of the unrecognized deferred tax liability related to the undistributed earnings.

We do not anticipate the need to repatriate funds to the U.S.

to satisfy domestic liquidity needs arising in the ordinary course of business, including liquidity needs associated with our domestic debt service requirements.

We may, from time to time, seek to retire or purchase additional amounts of our outstanding equity and/or debt securities through cash purchases and/or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise.

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The amounts involved may be material.

Refer to further liquidity discussion in “Part II - Item 5 - Market for Registrant's Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities.”

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.

As a result of the agreement, the Company no longer maintains any collateral to self-insure its former black lung liabilities incurred prior to February 1, 2013.

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.

If finalized, the new rule would not apply to SunCoke.

See further discussion in Note 12 to our consolidated financial statements.

Refer to further liquidity

discussion in “Part II - Item 5 - Market for Registrant's Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities.”

Cash Flow Summary

The following table sets forth a summary of the net cash provided by (used in) operating, investing and financing activities for the years ended December 31, 2024 and 2023:

The following table sets forth a summary of the net cash (used in) provided by operating, investing and financing activities for the years ended December 31, 2025 and 2024:

Years Ended December 31,

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Net cash used in investing activities (339.2) (72.3)

Net cash used in financing activities (47.0) (89.7)

Net increase in cash and cash equivalents $ 49.5 $ 50.1

Cash Provided by Operating Activities

Net cash provided by operating activities decreased $80.2 million to $168.8 million in 2024 as compared to $249.0 million in 2023.

The decrease primarily reflects an unfavorable year-over-year change in primary working capital, which is comprised of accounts receivable, inventories, and accounts payable, driven by the timing of receipts from customers and the impact of the changes in coal prices.

A payment of $36.0 million related to the extinguishment of certain liabilities related to our legacy coal mining business further negatively impacted net cash provided by operating activities in the current year period.

Lower depreciation and deferred income tax expense as compared to the prior year period also favorably impacted cash provided by operating activities.

See Note 4 to our consolidated financial statements for further detail on the change in deferred income tax expense.

Cash Used in Investing Activities

Net cash used in investing activities decreased $36.9 million to $72.3 million in 2024 as compared to $109.2 million in 2023.

The decrease primarily reflects lower ongoing capital expenditures, partially driven by the absence of capital spending in connection with oven rebuild projects, as well as the absence of the foundry expansion project in the current year period.

Net cash provided by (used in) financing activities 128.8 (47.0)

Effect of translation changes on cash 0.4 —

Net (decrease) increase in cash and cash equivalents

$ (100.9) $ 49.5

Cash Flows from Operating Activities

Net cash provided by operating activities decreased by $59.7 million to $109.1 million in 2025 as compared to $168.8 million in 2024.

The decrease primarily reflects payments to settle liabilities assumed as part of the acquisition of Phoenix Global, an increase in income tax receivables related to capital investment tax credits and unfavorable operating results for the current year period as compared to the same prior year period.

Cash Flows from Investing Activities

Net cash used in investing activities increased by $266.9 million to $339.2 million in 2025 as compared to $72.3 million in 2024.

The increase was primarily driven by cash paid for the acquisition of Phoenix Global of $271.5 million, which consisted of the purchase consideration net of cash and cash equivalents assumed in the acquisition.

See Note 3 to our consolidated financial statements for further detail.

This increase was partially offset by higher capital spending in connection with certain upgrades to improve the long-term reliability and operational performance of our assets in the prior year period.

Refer to “Capital Requirements and Expenditures” below for further detail.

Cash Used in Financing Activities

Net cash used in financing activities decreased $42.7 million to $47.0 million in 2024 as compared to $89.7 million in 2023.

The decrease in net cash used in financing activities was primarily driven by lower net repayments of $35.0 million on the Revolving Facility, the absence of repayments on financing obligations of $8.8 million resulting from the early buyout on a sale leaseback arrangement in the prior year period, and lower cash distributions made to noncontrolling interests of $3.7 million.

These decreases were partially offset by an increase to dividends paid of $6.9 million as compared to the prior year period, primarily as a result of an increase in the dividend per share amount.

Cash Flows from Financing Activities

Net cash provided by financing activities increased by $175.8 million to $128.8 million in 2025 as compared to net cash used in financing activities of $47.0 million in 2024.

The increase in net cash provided by financing activities was primarily driven by higher net borrowings of $193.0 million on the Revolving Facility, related to funding the acquisition of Phoenix Global.

These increases were partially offset by an increase in repayments of finance lease liabilities of $10.1 million, consisting of additional finance leases acquired as part of the acquisition of Phoenix Global and finance lease buyouts executed in the current year period.

Additionally, the increase in the current year period was further offset by an increase to dividends paid of $3.8 million as compared to the prior year period, primarily as a result of an increase in the dividend per share amount, and debt issuance costs paid of $2.1 million related to the amendment and extension of the Revolving Facility.

In addition to the $41.4 million in dividends paid to our shareholders during 2025, on January 30, 2026, SunCoke's Board of Directors declared a cash dividend of $0.12 per share of the Company's common stock.

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Credit Rating

In February 2024, S&P Global Ratings reaffirmed our corporate credit rating of BB- (stable).

In October 2024, Moody’s Investors Service reaffirmed our corporate credit rating of B1 and changed the rating outlook from positive to stable.

In May 2025, S&P Global Ratings reaffirmed our corporate credit rating of BB- (stable).

In June 2025, Moody’s Investors Service reaffirmed our corporate credit rating of B1 and the outlook remains stable.

Contractual Obligations

As of December 31, 2025, significant contractual obligations related to our metallurgical coal procurement contracts, which are generally based on annual coke production requirements at fixed coal prices, were $738.2 million and extend through 2026.

As of December 31, 2024, significant contractual obligations related to debt were $500 m illion of principal borrowings and $109.7 million of related interest, which will be repaid through 2029.

As of December 31, 2025, significant contractual obligations related to debt we re $693.0 million of principal borrowings and $139.7 million of related interest, which will be repaid through 2030.

See Note 12 to our consolidated financial statements.

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

• Ongoing capital expenditures required to maintain equipment reliability, the integrity and safety of our coke ovens and steam generators and to comply with environmental regulations.

• Ongoing capital expenditures required to maintain equipment reliability, the integrity and safety of our coke ovens, steam generators and assets at our terminals and operating sites and to comply with environmental regulations.

Ongoing capital expenditures are made to replace partially or fully depreciated assets in order to maintain the existing operating capacity of the assets and/or to extend their useful lives and also include new equipment that improves the efficiency, reliability or effectiveness of existing assets.

Ongoing capital expenditures do not include normal repairs and maintenance expenses, which are expensed as incurred;

• Expansion capital expenditures to acquire and/or construct complementary assets to grow our business and to expand existing facilities as well as capital expenditures made to enable the renewal of a coke sales agreement and/or logistics service agreement and on which we expect to earn a reasonable return;

• Expansion capital expenditures to acquire and/or construct complementary assets to grow our business and to expand existing facilities as well as capital expenditures made to grow our business through new markets or enable the renewal of a coke sales agreement and/or industrial services agreement and on which we expect to earn a reasonable return;

• Environmental project expenditures to ensure that our existing facilities operate in accordance with changing regulations.

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$ 66.8 $ 72.9

(1) Capital expenditures for the year ended December 31, 2023 includes capital spending in connection with the foundry cokemaking growth project.

(1) Reflects actual cash payments during the periods presented for our capital requirements.

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The preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities.

The Company's black lung benefit obligations is an item that is subject to such estimates and assumptions.

Although our management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, actual results may differ to some extent from the estimates on which our consolidated financial statements have been prepared at any point in time.

Despite these inherent limitations, our management believes the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and consolidated financial statements and footnotes provide a meaningful and fair perspective of our financial condition.

Black Lung Benefit Liabilities

The Company has obligations to provide certain black lung benefits to legacy coal miners and their dependents further described in Note 12 to our consolidated financial statements.

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.

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.

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:

(Dollars in millions)

Discount rate (1)

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.

The following table summarizes the annual black lung payments and expense (benefit):

Years Ended December 31,

2024 2023 2022

(Dollars in millions)

$ 40.4 $ 5.4 $ 5.0

Expense (benefit) (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.

The Company's valuation of tangible and intangible assets as part of business combinations and assessment of impairment of long-lived assets are subject to such estimates and assumptions.

Our management bases its estimates on various assumptions that are believed to be reasonable under the circumstances.

Our management believes the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and consolidated financial statements and footnotes herein provide a meaningful and fair perspective of our financial condition.

Business Combinations

We account for acquisitions using the acquisition method under which, upon obtaining control, we recognize each identifiable asset acquired and liability assumed at its acquisition date fair value.

The determination of those fair values requires significant judgment and the use of valuation techniques when observable market inputs are unavailable.

third-party valuation specialists to review these critical assumptions and prepare detailed fair value analyses for material acquisitions.

We value acquired intangible assets using models such as the income approach, including the relief-from-royalty method and multi-period excess earnings method as well as other cost-based techniques.

Key unobservable inputs include forecasted revenue growth rates, discount rates, royalty rates and estimated useful lives.

We value acquired property, plant and equipment using a combination of the cost and market approaches.

The market approach estimates fair value by analyzing recent actual market transactions for similar assets or liabilities.

The cost approach estimates fair value based on the expected cost to replace or reproduce the asset or liability and relies on assumptions regarding the occurrence and extent of any physical, functional and/or economic obsolescence.

Some of the more significant estimates and assumptions inherent in these approaches are the values of asset replacement costs, comparable assets and estimated remaining economic lives of the assets.

Any excess of the purchase price over the fair values of identifiable net assets is recorded as goodwill.

During the measurement period, up to one year from the acquisition date, significant provisional amounts are adjusted with a corresponding offset to goodwill.

On August 1, 2025, we completed the acquisition of Phoenix Global, a privately held provider of mission-critical mill services to major steel producing companies.

See Note 3 to our consolidated financial statements for further detail.

Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

In order to determine if assets have been impaired, assets are grouped and tested at the lowest level for which identifiable independent cash flows are available (“asset group”).

An impairment loss is recognized when the sum of projected undiscounted cash flows is less than the carrying value of the asset group.

The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the asset group.

Fair value is determined using an income approach when observable inputs are unavailable.

Impairment charges could materially decrease our future net income and result in lower asset values on our consolidated balance sheets.

Fair value determinations of long-lived assets require considerable judgment and are sensitive to changes in underlying assumptions, estimates, and market factors.

Estimating whether our long-lived assets are recoverable requires us to make assumptions and estimates regarding our future plans, as well as industry, economic, and regulatory conditions.

These assumptions and estimates include estimated future annual net cash flows, discount rates, growth rates, and other market factors.

If current expectations of future growth rates and margins are not met, if market factors outside of our control, such as discount rates, change, or if management’s expectations or plans otherwise change, then our long-lived assets may be impaired in the future.

During the fourth quarter of 2025, the Company concluded a triggering event occurred requiring a review for impairment at our Haverhill I cokemaking facility asset group as a result of Algoma Steel's breach of contract, which negatively impacted forecasted future cash flows.

The Company performed an impairment test utilizing the income approach, which resulted in a $90.1 million impairment charge.

Recent Accounting Standards

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

What changed 10-K

Item 7. Management’s Discussion and Analysis