SunCoke Energy Partners, L.P. Announces First Quarter 2019 Results
LISLE, Ill., April 24, 2019 /PRNewswire/ -- SunCoke Energy Partners, L.P. (NYSE: SXCP) today reported results for the first quarter 2019.
"I would like to thank all our SunCoke employees for their commitment and dedication throughout the quarter despite facing adverse weather conditions, which impacted operations across our business during the quarter," said Mike Rippey, Chairman, President and Chief Executive Officer of SunCoke Energy Partners, L.P.
FIRST QUARTER RESULTS
Three Months Ended March 31,
(Dollars in
millions) 2019 2018 Increase
(Decrease)
---
Revenues $
230.4 $
214.8 $
15.6
Adjusted
EBITDA(1) $
47.7 $
49.5 $
(1.8)
Net income
attributable
to SXCP $
4.5 $
12.2 $
(7.7)
---
(1) See definition of Adjusted EBITDA
and reconciliation elsewhere in
this release.
Revenues in first quarter 2019 increased $15.6 million from the prior year period, primarily reflecting the pass-through of higher coal prices in our Domestic Coke segment.
Adjusted EBITDA in the quarter decreased $1.8 million, primarily driven by adverse weather conditions, which impacted both our Domestic Coke and Logistics segments.
Net income attributable to SXCP in the first quarter 2019 was $4.5 million, down $7.7 million versus the prior year period. The decrease in the current period was driven by the operating results discussed above and higher depreciation expense driven by revisions in estimated useful lives of certain assets in our Domestic Coke segment made during the third quarter 2018.
FIRST QUARTER SEGMENT INFORMATION
Domestic Coke
Domestic Coke consists of cokemaking facilities and heat recovery operations at our Haverhill, Middletown and Granite City cokemaking facilities, located in Franklin Furnace and Middletown, Ohio, and Granite City, Illinois, respectively.
Three Months Ended March 31,
(Dollars in
millions,
except per
ton amounts) 2019 2018 Increase
(Decrease)
---
Revenues $
204.8 $
190.0 $
14.8
Adjusted
EBITDA(1) $
39.3 $
40.3 $
(1.0)
Sales Volume
(thousands of
tons) 570 568 2
Adjusted
EBITDA per
ton(2) $
68.95 $
70.95 $
(2.00)
---
(1) See definition of Adjusted EBITDA
and reconciliation elsewhere in
this release.
(2) Reflects Domestic Coke Adjusted
EBITDA divided by Domestic Coke
sales volumes.
Revenues increased $14.8 million primarily reflecting the pass-through of higher coal prices.
Adjusted EBITDA decreased driven by lower coal-to-coke yields primarily due to the impact from heavy rainfalls, which elevated coal moisture levels. This decrease was partially offset by a $1.0 million benefit from the timing of planned outage costs.
Logistics
Logistics consists of the handling and mixing services of coal and other aggregates operated by SXCP at our Convent Marine Terminal ("CMT"), Lake Terminal and Kanawha River Terminals ("KRT").
Three Months Ended March 31,
(Dollars in
millions, except
per ton amounts) 2019 2018 Increase
(Decrease)
---
Revenues $
25.6 $
24.8 $
0.8
Intersegment sales $
2.0 $
1.7 $
0.3
Adjusted EBITDA(1) $
12.5 $
13.4 $
(0.9)
Tons handled
(thousands of
tons)(2) 5,501 5,531 (30)
CMT take-or-pay
shortfall tons
(thousands of
tons)(3) 669 172 497
---
(1) See definition of Adjusted EBITDA
and reconciliation elsewhere in
this release.
(2) Reflects inbound tons handled
during the period.
(3) Reflects tons billed under take-
or-pay contracts where services
have not yet been performed.
Revenues were reasonably consistent with prior year period. Adjusted EBITDA decreased by $0.9 million, driven primarily by incremental high water costs at CMT during the current period.
Corporate and Other
Corporate and other expenses were $4.1 million in the first quarter 2019, which was comparable with the prior year period of $4.2 million.
2019 OUTLOOK
Our 2019 guidance is as follows:
-- Adjusted EBITDA attributable to SXCP is expected to be between $215 to
$225 million
-- Distributable Cash Flow expect to be between $93 to $108 million
-- Capital expenditures are projected to be between $55 to $60 million,
expect $6 million related to completing our Granite City gas sharing
project
SUNCOKE ENERGY PARTNERS, L.P.
SunCoke Energy Partners, L.P. (NYSE: SXCP) is a publicly traded master limited partnership that manufactures high-quality coke used in the blast furnace production of steel and provides export and domestic material handling services to coke, coal, steel, power and other bulk and liquids customers. In our cokemaking business, we utilize an innovative heat-recovery technology that captures excess heat for steam or electrical power generation and have long-term, take-or-pay coke contracts that pass through commodity and certain operating costs. Our logistics terminals have the collective capacity to mix and transload more than 40 million tons of material each year and are strategically located to reach Gulf Coast, East Coast, Great Lakes and international ports. SXCP's General Partner is a wholly owned subsidiary of SunCoke Energy, Inc. (NYSE: SXC), which has approximately 55 years of cokemaking experience serving the integrated steel industry. To learn more about SunCoke Energy Partners, L.P., visit our website at www.suncoke.com.
DEFINITIONS
-- Adjusted EBITDA represents earnings before interest, taxes, depreciation
and amortization ("EBITDA"), adjusted for any loss on extinguishment of
debt, changes to our contingent consideration liability related to our
acquisition of CMT and/or transaction costs incurred as part of the
Simplification Transaction. Adjusted EBITDA does not represent and
should not be considered an alternative to net income or operating
income under accounting principles generally accepted in the U.S.
("GAAP") and may not be comparable to other similarly titled measures in
other businesses. Management believes Adjusted EBITDA is an important
measure of the operating performance and liquidity of the Partnership's
net assets and its ability to incur and service debt, fund capital
expenditures and make distributions. 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 and liquidity. EBITDA and Adjusted EBITDA are not measures
calculated in accordance with GAAP, and they should not be considered an
alternative to net income, operating cash flow or any other measure of
financial performance presented in accordance with GAAP.
-- Adjusted EBITDA attributable to SXCP equals Adjusted EBITDA less
Adjusted EBITDA attributable to noncontrolling interests.
-- Distributable Cash Flow equals Adjusted EBITDA plus sponsor support and
Logistics deferred revenue, less net cash paid for interest expense,
ongoing capital expenditures, accruals for replacement capital
expenditures, and cash distributions to noncontrolling interests; plus
amounts received under the Omnibus Agreement and acquisition expenses
deemed to be Expansion Capital under our Partnership Agreement.
Distributable Cash Flow is a non-GAAP supplemental financial measure
that management and external users of SXCP's financial statements, such
as industry analysts, investors, lenders and rating agencies use to
assess:
-- SXCP's operating performance as compared to other publicly traded
partnerships, without regard to historical cost basis;
-- the ability of SXCP's assets to generate sufficient cash flow to
make distributions to SXCP's unitholders;
-- SXCP's ability to incur and service debt and fund capital
expenditures; and
-- the viability of acquisitions and other capital expenditure projects
and the returns on investment of various investment opportunities.
We believe that Distributable Cash Flow provides useful information to investors in assessing SXCP's financial condition and results of operations. Distributable Cash Flow should not be considered an alternative to net income, operating income, cash flows from operating activities, or any other measure of financial performance or liquidity presented in accordance with GAAP. Distributable Cash Flow has important limitations as an analytical tool because it excludes some, but not all, items that affect net income and net cash provided by operating activities and used in investing activities. Additionally, because Distributable Cash Flow may be defined differently by other companies in the industry, our definition of Distributable Cash Flow may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.
-- Distributable Cash Flow Coverage Ratio equals Distributable Cash Flow
divided by estimated distributions to the limited and general partners.
-- Operating Cash Flow Coverage Ratio equals net cash provided by operating
activities divided by total estimated distributions to the limited and
general partners. Operating cash flow is generally expected to be higher
than Distributable Cash Flow as Distributable Cash Flow is further
reduced by certain cash reserves including capital expenditures, an
investing cash flow item. Additionally, Distributable Cash Flow
represents only the Partnership's share of available cash by excluding
Adjusted EBITDA attributable to noncontrolling interest, while operating
cash flow is reported on a consolidated basis.
-- Ongoing capital expenditures ("capex") are capital expenditures made to
maintain the existing operating capacity of our assets and/or to extend
their useful lives. Ongoing capex also includes new equipment that
improves the efficiency, reliability or effectiveness of existing
assets. Ongoing capex does not include normal repairs and maintenance,
which are expensed as incurred, or significant capital expenditures. For
purposes of calculating distributable cash flow, the portion of ongoing
capex attributable to SXCP is used.
-- Replacement capital expenditures ("capex") represents an annual accrual
necessary to fund SXCP's share of the estimated costs to replace or
rebuild our facilities at the end of their working lives. This accrual
is estimated based on the average quarterly anticipated replacement
capital that we expect to incur over the long term to replace our major
capital assets at the end of their working lives. The replacement capex
accrual estimate will be subject to review and prospective change by
SXCP's general partner at least annually and whenever an event occurs
that causes a material adjustment of replacement capex, provided such
change is approved by our conflicts committee.
IMPORTANT NOTICE TO INVESTORS
SXCP and SXC previously have announced the execution of a definitive merger agreement for the acquisition by SXC of all publicly held common units of SXCP. SXC has filed a registration statement on Form S-4 with the Securities and Exchange Commission ("SEC") containing a draft joint prospectus/consent statement/proxy statement of SXC and SXCP. Once the SEC has completed its review of this filing and declared it effective, SXC and SXCP security holders are urged to read the definitive joint prospectus/consent statement/proxy statement and other documents filed with the SEC regarding the proposed transaction carefully and in their entirety when they become available because they will contain important information. Investors may obtain a free copy of the draft joint prospectus/consent statement/proxy statement at any time and will be able to obtain a free copy of the definitive joint prospectus/consent statement/proxy statement when it becomes available, as well as other filings containing information about the proposed transaction, without charge, at the SEC's internet site (http://www.sec.gov). Copies of the definitive joint prospectus/consent statement/proxy statement when it becomes available, as well as copies of the filings with the SEC that will be incorporated by reference in such definitive joint prospectus/consent statement/proxy statement, can be obtained, without charge by directing a request either to SXC, 1011 Warrenville Road, 6th Floor, Lisle, IL 60532 USA, Attention: Investor Relations or to SXCP, 1011 Warrenville Road, 6th Floor, Lisle, IL 60532 USA, Attention: Investor Relations.
The respective directors and executive officers of SXC and SXCP may be deemed to be "participants" (as defined in Schedule 14A under the Securities Exchange Act of 1934 as amended) in respect of the proposed transaction. Information about SXC's directors and executive officers is available in SXC's annual report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on February 15, 2019. Information about SXCP's directors and executive officers is available in SXCP's annual report on Form 10-K for the fiscal year ended December 31, 2018 filed with the SEC on February 15, 2019. Other information regarding the participants in the solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint definitive prospectus/consent statement/proxy statement, when available, and other relevant materials filed with the SEC.
This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
FORWARD-LOOKING STATEMENTS
Some of the statements included in this press release constitute "forward-looking statements." Forward-looking statements include all statements that are not historical facts and may be identified by the use of such words as "believe," "expect," "plan," "project," "intend," "anticipate," "estimate," "predict," "potential," "continue," "may," "will," "should" or the negative of these terms or similar expressions. Forward-looking statements are inherently uncertain and involve significant known and unknown risks and uncertainties (many of which are beyond the control of SXCP) that could cause actual results to differ materially.
Such risks and uncertainties include, but are not limited to, domestic and international economic, political, business, operational, competitive, regulatory, and/or market factors affecting SXCP, as well as uncertainties related to: pending or future litigation, legislation or regulatory actions; liability for remedial actions or assessments under existing or future environmental regulations; gains and losses related to acquisition, disposition or impairment of assets; recapitalizations; access to, and costs of, capital; the effects of changes in accounting rules applicable to SXCP; and changes in tax, environmental and other laws and regulations applicable to SXCP's businesses.
Forward-looking statements are not guarantees of future performance, but are based upon the current knowledge, beliefs and expectations of SXCP management, and upon assumptions by SXCP concerning future conditions, any or all of which ultimately may prove to be inaccurate. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. SXCP does not intend, and expressly disclaims any obligation, to update or alter its forward-looking statements (or associated cautionary language), whether as a result of new information, future events or otherwise after the date of this press release except as required by applicable law.
SXCP has included in its filings with the Securities and Exchange Commission cautionary language identifying important factors (but not necessarily all the important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement made by SXCP. For information concerning these factors, see SXCP's Securities and Exchange Commission filings such as its annual and quarterly reports and current reports on Form 8-K, copies of which are available free of charge on SXCP's website at www.suncoke.com. All forward-looking statements included in this press release are expressly qualified in their entirety by such cautionary statements. Unpredictable or unknown factors not discussed in this release also could have material adverse effects on forward-looking statements.
SunCoke Energy Partners, L.P.
Consolidated Statements of Income
(Unaudited)
Three Months Ended March 31,
2019 2018
(Dollars and units in millions, except per
unit
amounts)
Revenues
Sales and other operating
revenue $
230.4 $
214.8
Costs and operating expenses
Cost of products sold and
operating expenses 174.1 157.1
Selling, general and
administrative expenses 8.7 8.2
Depreciation and amortization
expense 28.4 21.5
Total costs and operating
expenses 211.2 186.8
Operating income 19.2 28.0
Interest expense, net 14.4 15.0
Income before income tax
(benefit) expense 4.8 13.0
Income tax (benefit) expense (0.1) 0.3
Net income 4.9 12.7
Less: Net income attributable
to noncontrolling interests 0.4 0.5
Net income attributable to
SunCoke Energy Partners, L.P. $
4.5 $
12.2
General partner's interest in
net income $
0.1 $
0.3
Limited partners' interest in
net income $
4.4 $
11.9
Net income per common unit
(basic and diluted) $
0.10 $
0.26
Weighted average common units
outstanding (basic and
diluted) 46.2 46.2
SunCoke Energy Partners, L.P.
Consolidated Balance Sheets
March 31, 2019 December 31, 2018
(Unaudited)
(Dollars in millions)
Assets
Cash $
2.7 $
12.6
Receivables 61.4 48.8
Receivables from affiliate,
net 3.1
Inventories 104.6 79.0
Other current assets 3.0 1.0
Total current assets 171.7 144.5
Properties, plants and
equipment (net of
accumulated depreciation of
$521.7 million and $499.9
million at March 31, 2019
and December 31, 2018,
respectively) 1,233.0 1,245.1
Goodwill 73.5 73.5
Other intangible assets, net 153.2 155.8
Deferred charges and other
assets 2.4 0.2
Total assets $
1,633.8 $
1,619.1
Liabilities and Equity
Accounts payable $
78.3 $
68.8
Accrued liabilities 13.1 13.5
Deferred revenue 7.5 3.0
Current portion of long-
term debt and financing
obligation 2.8 2.8
Interest payable 16.3 3.2
Payable to affiliate, net 2.7
Total current liabilities 120.7 91.3
Long-term debt and
financing obligation 788.3 793.3
Deferred income taxes 115.6 115.7
Other deferred credits and
liabilities 13.2 12.1
Total liabilities 1,037.8 1,012.4
Equity
Held by public:
Common units (issued
17,727,249 units at both
March 31, 2019 and December
31, 2018, respectively) 188.7 194.1
Held by parent:
Common units (issued
28,499,899 units at both
March 31, 2019 and December
31, 2018, respectively) 342.9 351.6
General partner's interest 53.0 49.3
Partners' capital
attributable to SunCoke
Energy Partners, L.P. 584.6 595.0
Noncontrolling interest 11.4 11.7
Total equity 596.0 606.7
Total liabilities and equity $
1,633.8 $
1,619.1
SunCoke Energy Partners, L.P.
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March 31,
2019 2018
(Dollars in millions)
Cash Flows from Operating Activities:
Net income $
4.9 $
12.7
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization expense 28.4 21.5
Deferred income tax expense (0.1) 0.4
Changes in working capital pertaining to operating activities:
Receivables (12.6) (5.6)
Receivables/payables from affiliate, net 5.8 5.7
Inventories (25.6) (0.3)
Accounts payable 9.3 20.9
Accrued liabilities (0.6) (3.0)
Deferred revenue 4.5 1.9
Interest payable 13.1 12.8
Other (1.4) (0.9)
Net cash provided by operating activities 25.7 66.1
Cash Flows from Investing Activities:
Capital expenditures (13.4) (10.6)
Net cash used in investing activities (13.4) (10.6)
Cash Flows from Financing Activities:
Repayment of financing obligation (0.7) (0.6)
Proceeds from revolving credit facility 60.7 53.5
Repayment of revolving credit facility (65.7) (53.5)
Distributions to unitholders (public and parent) (18.9) (29.5)
Distributions to noncontrolling interest (SunCoke Energy, Inc.) (0.7) (0.5)
Capital contributions from SunCoke 4.0 10.0
Other financing activities (0.9)
Net cash used in financing activities (22.2) (20.6)
Net (decrease) increase in cash and cash equivalents (9.9) 34.9
Cash and cash equivalents at beginning of period 12.6 6.6
Cash and cash equivalents at end of period $
2.7 $
41.5
Supplemental Disclosure of Cash Flow Information
Interest paid, net of capitalized interest of $1.2 million and
$0.5 million, respectively $
0.4 $
1.5
Income taxes paid
$ $
1.3
SunCoke Energy Partners, L.P.
Segment Financial and Operating Data
The following tables set forth financial and operating data for the three months ended March 31, 2019 and 2018:
Three Months Ended March 31,
2019 2018
(
Dollars in
millions, except per ton amounts)
Sales and other operating
revenues:
Domestic Coke $
204.8 $
190.0
Logistics 25.6 24.8
Logistics intersegment sales 2.0 1.7
Elimination of intersegment
sales (2.0) (1.7)
Total sales and other operating
revenues $
230.4 $
214.8
Adjusted EBITDA(1):
Domestic Coke $
39.3 $
40.3
Logistics 12.5 13.4
Corporate and Other (4.1) (4.2)
Total Adjusted EBITDA $
47.7 $
49.5
Coke Operating Data:
Domestic Coke capacity
utilization 101
% 98
%
Domestic Coke production volumes
(thousands of tons) 572 554
Domestic Coke sales volumes
(thousands of tons) 570 568
Domestic Coke Adjusted EBITDA
per ton(2) $
68.95 $
70.95
Logistics Operating Data:
Tons handled (thousands of
tons)(3) 5,501 5,531
CMT take-or-pay shortfall tons
(thousands of tons)(4) 669 172
(1) See definition of Adjusted EBITDA
and reconciliation to GAAP
elsewhere in this release.
(2) Reflects Domestic Coke Adjusted
EBITDA divided by Domestic Coke
sales volumes.
(3) Reflects inbound tons handled
during the period.
(4) Reflects tons billed under take-
or-pay contracts where services
have not yet been performed.
SunCoke Energy Partners, L.P.
Reconciliations of Non-GAAP Information
Net Income and Net Cash Provided by Operating Activities
to Adjusted EBITDA
Three Months Ended March 31,
2019 2018
(Dollars in millions)
Net income $
4.9 $
12.7
Add:
Depreciation and amortization
expense 28.4 21.5
Interest expense, net 14.4 15.0
Income tax (benefit) expense (0.1) 0.3
Simplification Transaction costs 0.5
Contingent consideration
adjustments(1) (0.4)
Adjusted EBITDA $
47.7 $
49.5
Subtract:
Adjusted EBITDA attributable to
noncontrolling interest(2) 0.8 0.8
Adjusted EBITDA attributable to
SunCoke Energy Partners, L.P. $
46.9 $
48.7
Three Months Ended March 31,
2019 2018
(Dollars in millions)
Net cash provided by operating
activities $
25.7 $
66.1
Add:
Cash interest paid, net of
capitalized interest 0.4 1.5
Cash income tax paid 1.3
Changes in working capital(3) 19.2 (19.6)
Contingent consideration
adjustments(1) (0.4)
Simplification Transaction costs 0.5
Other adjustments to reconcile
cash provided by operating
activities to Adjusted EBITDA 2.3 0.2
Adjusted EBITDA $
47.7 $
49.5
Subtract:
Adjusted EBITDA attributable to
noncontrolling interest(2) 0.8 0.8
Adjusted EBITDA attributable to
SunCoke Energy Partners, L.P. $
46.9 $
48.7
(1) In connection with the CMT
acquisition, the Partnership
entered into a contingent
consideration arrangement that
requires the Partnership to make
future payments to the seller
based on future volume over a
specified threshold, price and
contract renewals. Contingent
consideration adjustments in 2019
were primarily the result of
modifications to the volume
forecast.
(2) Reflects net income attributable to
noncontrolling interest adjusted
for noncontrolling interest's
share of interest, taxes, income,
and depreciation and amortization.
(3) Changes in working capital exclude
those items not impacting Adjusted
EBITDA, such as changes in
interest payable.
SunCoke Energy Partners, L.P.
Reconciliations of Non-GAAP Information
Net Income (loss) and Operating Activities to
Distributable Cash Flow
Three Months Ended March 31,
2019 2018
(Dollars in millions)
Net Income $
4.9 $
12.7
Add:
Depreciation and amortization
expense 28.4 21.5
Interest expense, net 14.4 15.0
Income tax (benefit) expense (0.1) 0.3
Contingent consideration
adjustments (0.4)
Simplification Transaction costs 0.5
Logistics volume shortfall
billings(1) 3.9 1.2
Subtract
Ongoing capex (SXCP Share) 7.7 5.0
Replacement capex accrual 1.9 1.9
Cash interest accrual 14.9 14.9
Cash income tax accrual(2) 0.3 0.6
Adjusted EBITDA attributable to
noncontrolling interest(3) 0.8 0.8
Distributable cash flow $
26.0 $
27.5
Three Months Ended March 31,
2019 2018
(Dollars in millions)
Net cash provided by operating
activities $
25.7 $
66.1
Add:
Cash interest paid, net of
capitalized interest 0.4 1.5
Cash income tax paid 1.3
Changes in working capital(4) 19.2 (19.6)
Logistics volume shortfall
billings(1) 3.9 1.2
Simplification Transaction costs 0.5
Contingent consideration
adjustments (0.4)
Other adjustments to reconcile
cash provided by operating
activities to Adjusted EBITDA 2.3 0.2
Subtract:
Ongoing capex (SXCP share) 7.7 5.0
Replacement capex accrual 1.9 1.9
Cash interest accrual 14.9 14.9
Cash income tax accrual(2) 0.3 0.6
Adjusted EBITDA attributable to
noncontrolling interest(3) 0.8 0.8
Distributable cash flow $
26.0 $
27.5
Quarterly cash distribution
declared in the period $
18.9 $
18.9
Operating cash flow coverage
ratio(5) 1.36 3.50
Distribution coverage ratio(6) 1.38 1.46
(1) Logistics volume shortfall billings
adjusts to include ton minimums
billed throughout the year in
Distributable Cash Flow to better
align with cash collection. Volume
shortfall billings on take-or-
pay contracts are recorded as
deferred revenue and are
recognized into GAAP income based
on the terms of the contract, at
which time they will be excluded
from Distributable Cash Flow.
(2) Cash tax impact from the operations
of Gateway Cogeneration Company
LLC, which is an entity subject to
income taxes for federal and state
purposes at the corporate level.
(3) Reflects net income attributable to
noncontrolling interest adjusted
for noncontrolling interest's
share of interest, taxes, income,
and depreciation and amortization.
(4) Changes in working capital exclude
those items not impacting Adjusted
EBITDA, such as changes in
interest payable and income taxes
payable.
(5) Operating cash flow coverage ratio
is net cash provided by operating
activities divided by total
estimated distributions to the
limited and general partners.
Operating cash flow is generally
expected to be higher than
Distributable Cash Flow as
Distributable Cash Flow is further
reduced by certain cash reserves
including capital expenditures, an
investing cash flow item.
Additionally, Distributable Cash
Flow represents only the
Partnership's share of available
cash by excluding Adjusted EBITDA
attributable to noncontrolling
interest, while operating cash
flow is reported on a consolidated
basis.
(6) Distribution cash coverage ratio is
distributable cash flow divided by
total estimated distributions to
the limited and general partners.
SunCoke Energy Partners, L.P.
Reconciliations of Non-GAAP Information
Estimated Net Income and Net Cash Provided by Operating Activities
to Estimated 2019 Consolidated Adjusted EBITDA
2019
Low High
(Dollars in millions)
Net Income $
46 $
61
Add:
Depreciation and amortization
expense 110 105
Interest expense 60 60
Income tax expense 2 3
Adjusted EBITDA $
218 $
229
Subtract:
Adjusted EBITDA attributable to
noncontrolling interest(1) 3 4
Adjusted EBITDA attributable to
SunCoke Energy Partners, L.P. $
215 $
225
2019
Low High
(Dollars in millions)
Net cash provided by operating
activities $
145 $
160
Add:
Cash interest paid, net of
capitalized interest 60 60
Cash income tax paid 2 3
Changes in working capital and
other(2) 11 6
Adjusted EBITDA $
218 $
229
Subtract:
Adjusted EBITDA attributable to
noncontrolling interest(1) 3 4
Adjusted EBITDA attributable to
SunCoke Energy Partners, L.P. $
215 $
225
(1) Reflects net income attributable to
noncontrolling interest adjusted
for noncontrolling interest's
share of interest, taxes, income,
and depreciation and amortization.
(2) Changes in working capital exclude
those items not impacting Adjusted
EBITDA, such as changes in
interest payable.
SunCoke Energy Partners, L.P.
Reconciliations of Non-GAAP Information
Estimated Net Income and Net Cash Provided by Operating Activities
to Estimated 2019 Distributable Cash Flow
2019
Low High
Net Income $
46 $
61
Add:
Depreciation and amortization
expense 110 105
Interest expense 60 60
Income tax expense 2 3
Subtract:
Ongoing capex (SXCP share) 53 48
Replacement capex accrual 8 8
Cash interest accrual 60 60
Cash tax accrual 1 1
Adjusted EBITDA attributable to
noncontrolling interest(1) 3 4
Distributable Cash Flow $
93 $
108
2019
Low High
Net cash provided by operating
activities $
145 $
160
Add:
Cash Interest paid, net of
capitalized interest 60 60
Cash Income tax paid 2 3
Changes in working capital(2) 11 6
Subtract:
Ongoing capex (SXCP share) 53 48
Replacement capex accrual 8 8
Cash interest accrual 60 60
Cash tax accrual 1 1
Adjusted EBITDA attributable to
noncontrolling interest(1) 3 4
Distributable Cash Flow $
93 $
108
Estimated distributions(3) $
76 $
76
Operating cash flow coverage
ratio(4) 1.92x 2.12x
Distribution cash coverage
ratio(5) 1.23x 1.43x
(1) Reflects net income attributable to
noncontrolling interest adjusted
for noncontrolling interest's
share of interest, taxes, income,
and depreciation and amortization.
(2) Changes in working capital exclude
those items not impacting Adjusted
EBITDA, such as changes in
interest payable.
(3) Estimated distributions assumes
distributions are held constant at
$0.40 per unit each quarter.
(4) Operating cash flow coverage ratio
is net cash provided by operating
activities divided by total
estimated distributions to the
limited and general partners.
Operating cash flow is generally
expected to be higher than
Distributable Cash Flow as
Distributable Cash Flow is further
reduced by certain cash reserves
including capital expenditures, an
investing cash flow item.
Additionally, Distributable Cash
Flow represents only the
Partnership's share of available
cash by excluding Adjusted EBITDA
attributable to noncontrolling
interest, while operating cash
flow is reported on a consolidated
basis.
(5) Distribution cash coverage ratio is
distributable cash flow divided by
total estimated distributions to
the limited and general partners.
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SOURCE SunCoke Energy Partners, L.P.
