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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________________________________________________
FORM 10-Q
 _____________________________________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
OR 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number 001-35243 
 _____________________________________________________________________
SUNCOKE ENERGY, INC.
(Exact name of registrant as specified in its charter)
 ______________________________________________________________________ 
Delaware   90-0640593
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer
Identification No.)
1011 Warrenville Road, Suite 600
Lisle, Illinois 60532
(630) 824-1000
(Registrant’s telephone number, including area code)
 ____________________________________________________________ 
Securities registered pursuant to section 12(b) of the Act:
Title of each class   Trading symbol(s)   Name of each exchange on which registered
Common Stock, par value $0.01 per share   SXC   New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ý  Yes    ¨  No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     ý  Yes    ¨  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ý Accelerated filer ¨
Non-accelerated filer ¨ Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).      Yes    ý  No
As of October 30, 2020, there were 82,768,075 shares of the Registrant’s $0.01 par value Common Stock outstanding.


SUNCOKE ENERGY, INC.
TABLE OF CONTENTS
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PART I – FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
SunCoke Energy, Inc.
Consolidated Statements of Operations
(Unaudited)
  Three Months Ended September 30, Nine Months Ended September 30,
  2020 2019 2020 2019
  (Dollars and shares in millions, except per share amounts)
Revenues
Sales and other operating revenue $ 302.2  $ 404.3  $ 1,022.9  $ 1,203.1 
Costs and operating expenses
Cost of products sold and operating expenses
238.3  319.4  805.2  953.8 
Selling, general and administrative expenses 18.4  14.3  51.1  52.9 
Depreciation and amortization expense 33.5  35.6  101.7  109.8 
Long-lived asset and goodwill impairment —  247.4  —  247.4 
Total costs and operating expenses 290.2  616.7  958.0  1,363.9 
Operating income (loss) 12.0  (212.4) 64.9  (160.8)
Interest expense, net 13.7  15.7  43.2  45.6 
Gain on extinguishment of debt (0.5) (1.5) (3.4) (1.5)
(Loss) income before income tax expense (benefit) (1.2) (226.6) 25.1  (204.9)
Income tax expense (benefit) 0.2  (63.5) 12.8  (57.3)
Net (loss) income (1.4) (163.1) 12.3  (147.6)
Less: Net income (loss) attributable to noncontrolling interests
1.3  (0.1) 3.6  3.3 
Net (loss) income attributable to SunCoke Energy, Inc. $ (2.7) $ (163.0) $ 8.7  $ (150.9)
(Loss) earnings attributable to SunCoke Energy, Inc. per common share:
Basic $ (0.03) $ (1.81) $ 0.10  $ (2.05)
Diluted $ (0.03) $ (1.81) $ 0.10  $ (2.05)
Weighted average number of common shares outstanding:
Basic 82.8  89.9  83.1  73.7 
Diluted 82.8  89.9  83.2  73.7 
(See Accompanying Notes)
1

SunCoke Energy, Inc.
Consolidated Statements of Comprehensive (Loss) Income
(Unaudited) 
  Three Months Ended September 30, Nine Months Ended September 30,
  2020 2019 2020 2019
 
(Dollars in millions)
Net (loss) income $ (1.4) $ (163.1) $ 12.3  $ (147.6)
Other comprehensive (loss) income:
Reclassifications of prior service benefit and actuarial benefit amortization to earnings, net of tax 0.1  —  0.1  — 
Currency translation adjustment (0.4) (0.9) (1.9) (0.8)
Comprehensive (loss) income (1.7) (164.0) 10.5  (148.4)
Less: Comprehensive income (loss) attributable to noncontrolling interests
1.3  (0.1) 3.6  3.3 
Comprehensive (loss) income attributable to SunCoke Energy, Inc. $ (3.0) $ (163.9) $ 6.9  $ (151.7)
(See Accompanying Notes)
2

SunCoke Energy, Inc.
Consolidated Balance Sheets
September 30, 2020 December 31, 2019
(Unaudited)
  (Dollars in millions, except
par value amounts)
Assets
Cash and cash equivalents $ 86.0  $ 97.1 
Receivables, net 46.8  59.5 
Inventories 129.7  147.0 
Income tax receivable 7.4  2.2 
Other current assets 4.9  2.5 
Total current assets 274.8  308.3 
Properties, plants and equipment (net of accumulated depreciation of $1,001.2 million and $903.7 million at September 30, 2020 and December 31, 2019, respectively)
1,332.5  1,390.2 
Goodwill and other intangible assets, net 37.7  38.1 
Deferred charges and other assets 16.8  17.2 
Total assets $ 1,661.8  $ 1,753.8 
Liabilities and Equity
Accounts payable $ 92.7  $ 142.4 
Accrued liabilities 43.9  47.3 
Current portion of financing obligation 5.1  2.9 
Interest payable 13.9  2.2 
Total current liabilities 155.6  194.8 
Long-term debt and financing obligation 719.7  780.0 
Accrual for black lung benefits 52.0  50.5 
Retirement benefit liabilities 23.0  24.5 
Deferred income taxes 163.0  147.6 
Asset retirement obligations 14.8  14.4 
Other deferred credits and liabilities 24.4  23.6 
Total liabilities 1,152.5  1,235.4 
Equity
Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no issued shares at both September 30, 2020 and December 31, 2019
—  — 
Common stock, $0.01 par value. Authorized 300,000,000 shares; issued 98,172,557 and 98,047,389 shares at September 30, 2020 and December 31, 2019, respectively
1.0  1.0 
Treasury stock, 15,404,482 and 13,783,182 shares at September 30, 2020 and December 31, 2019, respectively
(184.0) (177.0)
Additional paid-in capital 714.7  712.1 
Accumulated other comprehensive loss (16.2) (14.4)
Retained deficit (36.6) (30.1)
Total SunCoke Energy, Inc. stockholders’ equity 478.9  491.6 
Noncontrolling interest 30.4  26.8 
Total equity 509.3  518.4 
Total liabilities and equity $ 1,661.8  $ 1,753.8 
(See Accompanying Notes)
3

SunCoke Energy, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
  Nine Months Ended September 30,
  2020 2019
  (Dollars in millions)
Cash Flows from Operating Activities:
Net income (loss) $ 12.3  $ (147.6)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Long-lived asset and goodwill impairment —  247.4 
Depreciation and amortization expense 101.7  109.8 
Deferred income tax expense (benefit) 15.4  (64.2)
Payments in excess of expense for postretirement plan benefits (1.4) (1.5)
Share-based compensation expense 2.9  3.3 
Gain on extinguishment of debt (3.4) (1.5)
Changes in working capital pertaining to operating activities:
Receivables 12.7  12.7 
Inventories 17.3  (46.6)
Accounts payable (38.8) 6.0 
Accrued liabilities (3.3) (2.2)
Interest payable 11.7  10.8 
Income taxes (5.2) (2.4)
Other 1.2  (3.5)
Net cash provided by operating activities 123.1  120.5 
Cash Flows from Investing Activities:
Capital expenditures (53.4) (81.5)
Other investing activities (1.4) 0.2 
Net cash used in investing activities (54.8) (81.3)
Cash Flows from Financing Activities:
Repayment of long-term debt (15.8) (90.5)
Debt issuance costs —  (2.0)
Proceeds from revolving credit facility 407.9  392.6 
Repayment of revolving credit facility (446.9) (354.3)
Repayment of financing obligation (2.1) (2.1)
Dividends paid (15.0) — 
Shares repurchased (7.0) (13.2)
Cash distribution to noncontrolling interests —  (14.2)
Other financing activities (0.5) (7.5)
Net cash used in financing activities (79.4) (91.2)
Net decrease in cash and cash equivalents (11.1) (52.0)
Cash and cash equivalents at beginning of period 97.1  145.7 
Cash and cash equivalents at end of period $ 86.0  $ 93.7 
Supplemental Disclosure of Cash Flow Information
Interest paid, net of capitalized interest of $0.1 million and $2.3 million, respectively
$ 28.0  $ 32.3 
Income taxes paid, net of refunds of $0.3 million and zero, respectively
$ 2.6  $ 8.8 
(See Accompanying Notes)
4


SunCoke Energy, Inc.
Consolidated Statements of Equity
Three Months Ended September 30, 2020
(Unaudited)
Common Stock Treasury Stock Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Deficit
Total  SunCoke
Energy, Inc.  Equity
Non-controlling
Interests
Total
Equity
Shares Amount Shares Amount
(Dollars in millions)
At June 30, 2020 98,172,557  $ 1.0  15,404,482  $ (184.0) $ 714.1  $ (15.9) $ (28.8) $ 486.4  $ 29.1  $ 515.5 
Net loss —  —  —  —  —  —  (2.7) (2.7) 1.3  (1.4)
Reclassifications of prior service benefit and actuarial benefit amortization to earnings, net of tax —  —  —  —  —  0.1  —  0.1  —  0.1 
Currency translation adjustment —  —  —  —  —  (0.4) —  (0.4) —  (0.4)
Share-based compensation expense —  —  —  —  0.6  —  —  0.6  —  0.6 
Dividends —  —  —  —  —  —  (5.1) (5.1) —  (5.1)
At September 30, 2020 98,172,557  $ 1.0  15,404,482  $ (184.0) $ 714.7  $ (16.2) $ (36.6) $ 478.9  $ 30.4  $ 509.3 

SunCoke Energy, Inc.
Consolidated Statements of Equity
Three Months Ended September 30, 2019
(Unaudited)
Common Stock Treasury Stock Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
(Deficit)
Total  SunCoke
Energy, Inc.  Equity
Non-controlling
Interests
Total
Equity
Shares Amount Shares Amount
(Dollars in millions)
At June 30, 2019 98,036,174  $ 1.0  7,477,657  (140.7) 709.7  (13.0) 139.5  696.5  26.3  722.8 
Net loss —  —  —  —  —  —  (163.0) (163.0) (0.1) (163.1)
Currency translation adjustment —  —  —  —  —  (0.9) —  (0.9) —  (0.9)
Share-based compensation expense —  —  —  —  1.2  —  —  1.2  —  1.2 
Share issuances, net of shares withheld for taxes 4,198  —  —  —  —  —  —  —  —  — 
Share repurchases —  —  2,066,475  (13.2) —  —  —  (13.2) —  (13.2)
At September 30, 2019 98,040,372  $ 1.0  9,544,132  $ (153.9) $ 710.9  $ (13.9) $ (23.5) $ 520.6  $ 26.2  $ 546.8 


5



SunCoke Energy, Inc.
Consolidated Statements of Equity
Nine Months Ended September 30, 2020
(Unaudited)
Common Stock Treasury Stock Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Deficit
Total  SunCoke
Energy, Inc.  Equity
Non-controlling
Interests
Total
Equity
Shares Amount Shares Amount
(Dollars in millions)
At December 31, 2019 98,047,389  $ 1.0  13,783,182  $ (177.0) $ 712.1  $ (14.4) $ (30.1) $ 491.6  $ 26.8  $ 518.4 
Net income —  —  —  —  —  —  8.7  8.7  3.6  12.3 
Reclassifications of prior service benefit and actuarial benefit amortization to earnings, net of tax —  —  —  —  —  0.1  —  0.1  —  0.1 
Currency translation adjustment
—  —  —  —  —  (1.9) —  (1.9) —  (1.9)
Share-based compensation expense
—  —  —  —  2.9  —  —  2.9  —  2.9 
Share issuances, net of shares withheld for taxes
125,168  —  —  —  (0.3) —  —  (0.3) —  (0.3)
Share repurchases
—  —  1,621,300  (7.0) —  —  —  (7.0) —  (7.0)
Dividends
—  —  —  —  —  —  (15.2) (15.2) —  (15.2)
At September 30, 2020 98,172,557  $ 1.0  15,404,482  $ (184.0) $ 714.7  $ (16.2) $ (36.6) $ 478.9  $ 30.4  $ 509.3 




6

SunCoke Energy, Inc.
Consolidated Statements of Equity
Nine Months Ended September 30, 2019
(Unaudited)
Common Stock Treasury Stock Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
Loss
Retained
Earnings
(Deficit)
Total  SunCoke
Energy, Inc.  Equity
Non-controlling
Interests
Total
Equity
Shares Amount Shares Amount
(Dollars in millions)
At December 31, 2018 72,233,750  $ 0.7  7,477,657  (140.7) 488.8  (13.1) 127.4  463.1  219.6  682.7 
Net income —  —  —  —  —  —  (150.9) (150.9) 3.3  (147.6)
Currency translation adjustment
—  —  —  —  —  (0.8) —  (0.8) —  (0.8)
Cash distribution to noncontrolling interests
—  —  —  —  —  —  —  —  (14.2) (14.2)
Share-based compensation expense
—  —  —  —  3.3  —  —  3.3  —  3.3 
Share issuances, net of shares withheld for taxes
352,971  —  —  —  (1.7) —  —  (1.7) —  (1.7)
Share repurchases —  —  2,066,475  (13.2) —  —  —  (13.2) —  (13.2)
Simplification Transaction:
—  — 
Share issuances, for the acquisition of Partnership public units 24,818,149  0.3  —  —  182.2  —  —  182.5  (182.5) — 
Share issuances, for the final Partnership distribution 635,502  —  —  —  —  —  —  —  —  — 
Transaction costs —  —  —  —  (5.4) —  —  (5.4) —  (5.4)
Deferred tax adjustment —  —  —  —  43.7  —  —  43.7  —  43.7 
At September 30, 2019 98,040,372  $ 1.0  9,544,132  $ (153.9) $ 710.9  $ (13.9) $ (23.5) $ 520.6  $ 26.2  $ 546.8 
7

SunCoke Energy, Inc.
Notes to the Consolidated Financial Statements
1. General
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 over 55 years of coke production experience. Coke is a principal raw material in the blast furnace steelmaking process and is produced by heating metallurgical coal in a refractory oven, which releases certain volatile components from the coal, thus transforming the coal into coke. Additionally, we own and operate a logistics business, which primarily provides handling and/or mixing services of coal and other aggregates to third-party customers as well as to our own cokemaking facilities.
We have designed, developed, built, own and operate five cokemaking facilities in the United States (“U.S.”), which consist of our Haverhill, Middletown, Granite City, Jewell and Indiana Harbor cokemaking facilities. Our cokemaking facilities have collective nameplate capacity to produce approximately 4.2 million tons of blast furnace coke per year. Our U.S. coke sales are made pursuant to long-term, take-or-pay agreements with ArcelorMittal USA LLC and/or its affiliates (“AM USA”), AK Steel Corporation (“AK Steel”) and United States Steel Corporation (“U.S. Steel”), who are three of the largest blast furnace steelmakers in North America. Additionally, we have designed and operate one cokemaking facility in Brazil under licensing and operating agreements on behalf of ArcelorMittal Brasil S.A. (“ArcelorMittal Brazil”), which has approximately 1.7 million tons of annual cokemaking capacity. To diversify our business and customer base, SunCoke began exploring the foundry coke market. Foundry coke is a high-quality grade of coke that is used at foundries to melt iron and various metals in cupola furnaces, which is further processed via casting or molding into products used in various industries such as construction, transportation and industrial products. Throughout 2020, we have been testing production capacity and executing successful test sales of foundry coke. We expect we will be in a position to produce and sell approximately 100 thousand tons of foundry coke in 2021.
Our cokemaking ovens utilize efficient, modern heat recovery technology designed to combust the coal’s volatile components liberated during the cokemaking process and use the resulting heat to create steam or electricity for sale. This differs from by-product cokemaking, which repurposes the coal’s liberated volatile components for other uses. We have constructed the only greenfield cokemaking facilities in the U.S. in approximately 30 years and are the only North American coke producer that utilizes heat recovery technology in the cokemaking process. We provide steam pursuant to steam supply and purchase agreements with our customers. Electricity is sold into the regional power market or pursuant to energy sales agreements.
Our logistics business provides handling and/or mixing services to steel, coke (including some of our domestic cokemaking facilities), electric utility, coal producing and other manufacturing based customers. Our logistics business consists of Convent Marine Terminal (“CMT”), Kanawha River Terminal (“KRT”), SunCoke Lake Terminal (“Lake Terminal”) and Dismal River Terminal (“DRT”) and has collective capacity to mix and/or transload more than 40 million tons of coal and other aggregates annually and has total storage capacity of approximately 3 million tons.
Incorporated in Delaware in 2010 and headquartered in Lisle, Illinois, we became a publicly-traded company in 2011 and our stock is listed on the New York Stock Exchange under the symbol “SXC.”
Basis of Presentation
The accompanying unaudited consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) for interim reporting. Certain information and disclosures normally included in financial statements have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In management’s opinion, the financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. The results of operations for the period ended September 30, 2020 are not necessarily indicative of the operating results expected for the entire year. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019.
2. Acquisitions
Simplification Transaction
Prior to June 28, 2019, SunCoke owned a 60.4 percent limited partner interest in SunCoke Energy Partners, L.P. (the "Partnership") as well as our 2.0 percent general partner interest. The remaining 37.6 percent limited partner interest in the
8

Partnership was held by public unitholders. On June 28, 2019, the Company acquired all of the outstanding common units of the Partnership not already owned by SunCoke (the "Simplification Transaction"). Following the completion of the Simplification Transaction, the Partnership became a wholly-owned subsidiary of SunCoke, the Partnership common units ceased to be publicly traded and the Partnership’s incentive distribution rights were eliminated. As of January 1, 2020, the Partnership merged with and into SunCoke Energy Partners Finance Corp. ("Finance Corp."), which is also a wholly-owned subsidiary of the Company.
The following table summarizes the effects of the changes in the Company's ownership interest in the Partnership on SunCoke's equity:
Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019
(Dollars in millions)
Net loss attributable to SunCoke Energy, Inc. $ (163.0) $ (150.9)
Increase in SunCoke Energy, Inc. equity for the change in ownership interest in the Partnership(1)
—  182.5 
Change from net (loss) income attributable to SunCoke Energy, Inc. and transfers from noncontrolling interest
$ (163.0) $ 31.6 
(1)Represents the non-cash impact related to the Simplification Transaction.
3. Inventories
The components of inventories were as follows:
September 30, 2020 December 31, 2019
 
(Dollars in millions)
Coal $ 71.6  $ 94.4 
Coke 11.7  8.1 
Materials, supplies and other 46.4  44.5 
Total inventories $ 129.7  $ 147.0 
4. Goodwill and Other Intangible Assets
Goodwill, which represents the excess of the purchase price over the fair value of net assets acquired, is assessed for impairment as of October 1 of each year, or when events occur or circumstances change that would, more likely than not, reduce the fair value of a reporting unit to below its carrying value. Goodwill allocated to our Domestic Coke segment was $3.4 million at both September 30, 2020 and December 31, 2019.
The components of other intangible assets, net, excluding fully amortized intangible assets, were as follows:
September 30, 2020 December 31, 2019
Weighted - Average Remaining Amortization Years Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net
(Dollars in millions)
Customer contracts $ —  $ —  $ —  $ 7.7  $ 7.2  $ 0.5 
Customer relationships 4 6.7  4.3  2.4  6.7  3.9  2.8 
Permits 22 31.7  1.4  30.3  31.7  0.3  31.4 
Other 30 1.6  —  1.6  —  —  — 
Total $ 40.0  $ 5.7  $ 34.3  $ 46.1  $ 11.4  $ 34.7 
Total amortization expense for intangible assets subject to amortization was $0.7 million and $2.0 million for the three and nine months ended September 30, 2020, respectively, and $2.7 million and $8.1 million for the three and nine months ended September 30, 2019, respectively.
2019 Impairments
A significant portion of our logistics business had historically been from long-term, take-or-pay contracts with Murray American Coal, Inc. ("Murray") and Foresight Energy LLC ("Foresight"), which were adversely impacted by declining coal
9

export prices and domestic demand. On October 29, 2019, Murray filed for Chapter 11 bankruptcy and also filed a motion to reject its contract with CMT, which was subsequently authorized by the bankruptcy court. In addition, during the third quarter of 2019, Foresight engaged outside counsel and financial advisors to assess restructuring options and subsequently filed for Chapter 11 bankruptcy on March 10, 2020.
Impairment of Goodwill
The Company concluded the impact of the events discussed above could more likely than not reduce the fair value of the Logistics reporting unit below its carrying value, requiring SunCoke to perform its annual goodwill test as of September 30, 2019. The fair value of the Logistics reporting unit, which was determined based on a discounted cash flow analysis, did not exceed the carrying value of the reporting unit. Key assumptions in our goodwill impairment test included reduced forecasted volumes and reduced rates from Foresight, no further business from Murray, incremental merchant business and a discount rate of 12 percent, representing the estimated weighted average cost of capital for this business line. As a result, the Company recorded a $73.5 million non-cash, pre-tax impairment charge to the Logistics segment on the Consolidated Statements of Operations during 2019, which represents a full impairment of the Logistics goodwill balance.
Impairment of Long-Lived Assets
As a result of our logistics customers' events discussed above, CMT's long-lived assets, including customer contracts, customer relationships, permits and properties, plant and equipment, were also assessed for impairment as of September 30, 2019. The Company re-evaluated its projections for throughput volumes, pricing and customer performance against the existing long-term take-or-pay contracts. The resulting undiscounted cash flows were lower than the carrying value of the asset group. Therefore, the Company assessed the fair value of the asset group to measure the amount of impairment. The fair value of the CMT long-lived assets was determined to be $112.1 million based on discounted cash flows, asset replacement cost and adjustments for capacity utilization, which are considered Level 3 inputs in the fair value hierarchy as defined in Note 11. Key assumptions in our discounted cash flows included reduced forecasted volumes and reduced rates from Foresight, no further business from Murray, incremental merchant business and a discount rate of 11 percent, representing the estimated weighted average cost of capital for this asset group. As a result, during 2019, the Company recorded a total non-cash, pre-tax long-lived asset impairment charge of $173.9 million included in long-lived asset and goodwill impairment on the Consolidated Statements of Operations, all of which was attributable to the Logistics segment. The charge included an impairment of CMT's long-lived intangible assets of $113.3 million and of CMT's property, plant and equipment of $60.6 million.
5. Income Taxes
At the end of each interim period, we make our best estimate of the effective tax rate and the impact of discrete items, if any, and adjust the rate as necessary.
The Company recorded income tax expense of $0.2 million and $12.8 million for the three and nine months ended September 30, 2020, respectively, resulting in effective tax rates of (16.7) percent and 51.0 percent, respectively, as compared to the 21.0 percent federal statutory rate. The difference between the Company's effective tax rate and the federal statutory rate during the three months ended September 30, 2020 was primarily the result of state tax rates. Differences between the Company's effective tax rates and the federal statutory rate during the nine months ended September 30, 2020 were primarily driven by the revaluation of certain deferred tax assets due to lower apportioned state tax rates, which resulted in $6.5 million of deferred income tax expense. Additionally, the new tax law passed in response to the novel coronavirus ("COVID-19"), the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, which was enacted March 27, 2020, allows the Company to carry back net operating losses generated in 2019 to each of the five years preceding 2019. As a result, SunCoke expects to receive income tax refunds of approximately $4.8 million for prior year taxes paid and recorded a tax benefit of $1.5 million during the nine months ended September 30, 2020.
The Company recorded income tax benefit of $63.5 million and $57.3 million for the three and nine months ended September 30, 2019, respectively, resulting in effective tax rates of (28.0) percent in both periods, as compared to the 21.0 percent federal statutory rate. This tax benefit was the result of the impairment charges recorded to our Logistics assets, which resulted in a $68.7 million decrease to the related deferred tax liabilities on the Consolidated Balance Sheets. Differences between the Company's effective tax rates and the statutory rate during the three and nine months ended September 30, 2019 were primarily due to the impact of state income taxes.
10

6. Accrued Liabilities
Accrued liabilities consisted of the following:
September 30, 2020 December 31, 2019
 
(Dollars in millions)
Accrued benefits $ 17.8  $ 21.7 
Current portion of postretirement benefit obligation 2.9  2.9 
Other taxes payable 11.2  9.9 
Current portion of black lung liability 4.6  4.6 
Other 7.4  8.2 
Total accrued liabilities $ 43.9  $ 47.3 
7. Debt and Financing Obligation
Total debt and financing obligation, including the current portion of the financing obligation, consisted of the following:
September 30, 2020 December 31, 2019
 
(Dollars in millions)
7.50 percent senior notes, due 2025 ("2025 Senior Notes")
$ 630.5  $ 650.0 
$400.0 million revolving credit facility, due 2024 ("Revolving Facility")
104.3  143.3 
5.82 percent financing obligation, due 2021 ("Financing Obligation")
5.1  7.2 
Total borrowings 739.9  800.5 
Original issue discount (3.7) (4.3)
Debt issuance costs (11.4) (13.3)
Total debt and financing obligation $ 724.8  $ 782.9 
Less: current portion of financing obligation 5.1  2.9 
Total long-term debt and financing obligation $ 719.7  $ 780.0 
2025 Senior Notes
During the nine months ended September 30, 2020, the Company repurchased $19.5 million face value of outstanding 2025 Senior Notes for $15.8 million of cash payments, resulting in a gain on extinguishment of debt on the Consolidated Statements of Operations of $3.4 million, net of the write-off of unamortized debt issuance costs and original issue discount. Subsequent to September 30, 2020, the Company repurchased an additional $33.2 million face value of outstanding 2025 Senior Notes for $30.2 million of cash payments, which will result in an additional gain on extinguishment of debt of $2.4 million, net of the write-off of unamortized debt issuance costs and original issue discount.
Revolving Facility
As of September 30, 2020, the Revolving Facility had letters of credit outstanding of $11.8 million and a $104.3 million outstanding balance, leaving $283.9 million available. Additionally, the Company has certain letters of credit totaling $11.5 million, which do not reduce the Revolving Facility's available balance.
11

Covenants
Under the terms of the Revolving Facility, the Company is subject to a maximum consolidated net 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 $35.0 million.
As of September 30, 2020, the Company was in compliance with all applicable debt covenants. We do not anticipate a violation of these covenants nor do we anticipate that any of these covenants will restrict our operations or our ability to obtain additional financing.
8. Commitments and Contingent Liabilities
Legal Matters
Between 2005 and 2012, the U.S. Environmental Protection Agency ("EPA") and the Ohio Environmental Protection Agency (“OEPA”) issued Notices of Violations (“NOVs”), alleging violations of air emission operating permits for our Haverhill and Granite City cokemaking facilities. We worked in a cooperative manner with the EPA, the OEPA and the Illinois Environmental Protection Agency to address the allegations and, in November 2014, entered into a consent decree with these parties in federal district court in the Southern District of Illinois. The consent decree included a civil penalty paid in December 2014, and a commitment to undertake capital projects to improve reliability and enhance environmental performance. The Haverhill project was completed in 2016, but completion of the Granite City project was delayed to June 2019, with SunCoke agreeing to pay an immaterial amount associated with the delay.
Between 2010 and 2016, SunCoke Energy also received certain NOVs, Findings of Violations (“FOVs”), and information requests from the EPA, alleging violations of air operating permit conditions related to our Indiana Harbor cokemaking facility. To reach a settlement of these NOVs and FOVs, we met regularly with the EPA, the Indiana Department of Environmental Management and Cokenergy, LLC., an independent power producer that processes hot flue gas from our Indiana Harbor facility to reduce the sulfur and particulate content and produce steam and electricity. A consent decree among the parties was entered by the federal district court in the Northern District of Indiana during the fourth quarter of 2018. The settlement included a civil penalty paid in the fourth quarter of 2018, and implementation of certain capital projects, completed during the fourth quarter of 2019, to improve reliability and environmental performance of the coke ovens at the facility.
The Company is a party to certain other pending and threatened claims, including matters related to commercial disputes, employment claims, personal injury claims, common law tort claims and environmental claims. Although the ultimate outcome of these claims cannot be ascertained at this time, it is reasonably possible that some portion of these claims could be resolved unfavorably to the Company. Management of the Company believes that any liability which may arise from these claims would not have a material adverse impact on our consolidated financial statements.
Black Lung Benefit Liabilities
The Company has obligations related to coal workers’ pneumoconiosis, or black lung, benefits to certain former coal miners and their dependents. Such benefits are provided for under Title IV of the Federal Coal Mine and Safety Act of 1969 and subsequent amendments, as well as for black lung benefits provided in the states of Virginia, Kentucky and West Virginia pursuant to workers’ compensation legislation. The Patient Protection and Affordable Care Act (“PPACA”), which was implemented in 2010, amended previous legislation related to coal workers’ black lung obligations. PPACA provides for the automatic extension of awarded lifetime benefits to surviving spouses and changes the legal criteria used to assess and award claims.
We adjust our liability each year based upon actuarial calculations of our expected future payments for these benefits. Our independent actuarial consultants calculate the present value of the estimated black lung liability annually based on actuarial models utilizing our population of former coal miners, historical payout patterns of both the Company and the industry, actuarial mortality rates, disability incidence, medical costs, death benefits, dependents, discount rates and the current federally mandated payout rates. The estimated liability may be impacted by future changes in the statutory mechanisms, modifications by court decisions and changes in filing patterns driven by perceptions of success by claimants and their advisors, the impact of which cannot be estimated. The estimated liability was $56.6 million and $55.1 million at September 30, 2020 and December 31, 2019, respectively, of which the current portion of $4.6 million was included in accrued liabilities on the Consolidated Balance Sheets in both periods.
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On February 1, 2013, SunCoke obtained commercial insurance for any black lung liabilities for employees with a last date of employment after that date. Also during 2013, we were reauthorized to continue to self-insure black lung liabilities incurred prior to February 1, 2013 by the U.S. Department of Labor's Division of Coal Mine Workers' Compensation (“DCMWC”) in exchange for $8.4 million of collateral. In July 2019, the DCMWC required that SunCoke, along with a number of other companies, file an application and supporting documentation for reauthorization to self-insure our legacy black lung obligations incurred prior to February 1, 2013. The Company provided the requested information in the fourth quarter of 2019. The DCMWC subsequently notified the Company in a letter dated February 21, 2020 that the Company was reauthorized to self-insure certain of its black lung obligations; however, the reauthorization is contingent upon the Company providing collateral of $40.4 million to secure certain of its black lung obligations. This proposed collateral requirement is a substantial increase from the $8.4 million in collateral that the Company currently provides to secure these self-insured black lung obligations. The reauthorization process provided the Company with the right to appeal the security determination. SunCoke exercised its right to appeal the DCMWC’s security determination and provided additional information supporting the Company’s position in May 2020. If the Company’s appeal is unsuccessful, the Company may be required to provide additional collateral to receive the self-insurance reauthorization from the DCMWC, which could potentially reduce the Company’s liquidity.
9. Share-Based Compensation
Equity Classified Awards
During the nine months ended September 30, 2020, the Company granted share-based compensation to eligible participants under the SunCoke Energy, Inc. Long-Term Performance Enhancement Plan (“SunCoke LTPEP”). All awards vest immediately upon a qualifying termination of employment, as defined by the SunCoke LTPEP, following a change in control.
Restricted Stock Units Settled in Shares
The Company issued 304,332 stock-settled restricted stock units (“RSUs”) to certain employees to be settled in shares of the Company’s common stock during the nine months ended September 30, 2020. The weighted average grant date fair value was $6.04 per unit and was based on the closing price of our common stock on the day of the grant. The RSUs vest in three annual installments beginning one year from the date of grant.
Performance Share Units
The Company granted the following performance share units (“PSUs”) to certain employees to be settled in shares of the Company's common stock during the nine months ended September 30, 2020, for which the service period will end on December 31, 2022 and will vest during the first quarter of 2023:
Shares Grant Date Fair Value per Unit
PSUs(1)(2)
228,248  $ 6.70 
(1)The PSU awards are split 50/50 between the Company's three year cumulative Adjusted EBITDA (as defined in Note 13) performance measure and the Company's three-year average pre-tax return on capital performance measure for its coke and logistics businesses and unallocated corporate expenses.
(2)The number of PSUs ultimately awarded will be determined by the above performance measures versus targets and the Company's three-year total shareholder return (“TSR”) as compared to the TSR of the companies making up the Nasdaq Iron & Steel Index (“TSR Modifier”). The TSR Modifier can impact the payout between 75 percent and 125 percent of the Company's final performance measure results.
The award may vest between zero and 250 percent of the original units granted. The fair value of the PSUs granted during the nine months ended September 30, 2020 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.
Stock Options
The Company did not grant any stock options during the nine months ended September 30, 2020.
Liability Classified Awards
Restricted Stock Units Settled in Cash
During the nine months ended September 30, 2020, the Company issued 263,998 restricted stock units to certain employees to be settled in cash (“Cash RSUs”), which vest in three annual installments beginning one year from the grant date.
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The weighted average grant date fair value of the Cash RSUs granted during the nine months ended September 30, 2020 was $6.04 per unit and was based on the closing price of our common stock on the day of grant.
The Cash RSU liability is adjusted based on the closing price of our common stock at the end of each quarterly period and at both September 30, 2020 and December 31, 2019 was not material.
Cash Incentive Awards
The Company also granted share-based compensation to eligible participants under the SunCoke Energy, Inc. Long-Term Cash Incentive Plan (“SunCoke LTCIP”), which became effective January 1, 2016. The SunCoke LTCIP is designed to provide for performance-based, cash-settled awards. All awards vest immediately upon a qualifying termination of employment, as defined by the SunCoke LTCIP, following a change in control.
The Company issued awards with an aggregate grant date fair value of $2.0 million during the nine months ended September 30, 2020, for which the service period will end on December 31, 2022 and will vest during the first quarter of 2023. The awards are split 50/50 between the Company's three-year cumulative Adjusted EBITDA performance and the Company's three-year average pre-tax return on capital for its coke and logistics businesses and unallocated corporate expenses. The 2020 awards are not subject to the Company's three-year TSR Modifier performance.
The cash incentive award liability at September 30, 2020 was adjusted based on the Company's three-year cumulative Adjusted EBITDA performance and adjusted average pre-tax return on capital for the Company's coke and logistics businesses and unallocated corporate expenses. The cash incentive award liability at both September 30, 2020 and December 31, 2019 was not material.
Summary of Share-Based Compensation Expense
Below is a summary of the compensation expense, unrecognized compensation costs, and the period for which the unrecognized compensation cost is expected to be recognized over:
Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019 September 30, 2020
Compensation Expense(1)
Unrecognized Compensation Cost Weighted Average Remaining Recognition Period
(Dollars in millions) (Years)
Equity Awards:
Stock Options $ —  $ 0.3  $ 0.3  $ 0.8  $ 0.2  1.2
RSUs 0.5  0.3  1.4  0.7  $ 1.0  1.3
PSUs 0.1  0.6  1.1  1.6  $ 2.2  1.6
Total equity awards $ 0.6  $ 1.2  $ 2.8  $ 3.1 
Liability Awards:
Cash RSUs $ 0.2  $ —  $ 0.3  $ 0.7  $ 0.7  1.8
Cash incentive award 0.3  (0.1) 0.6  0.3  $ 1.6  2.1
Total liability awards $ 0.5  $ (0.1) $ 0.9  $ 1.0 
(1)Compensation expense recognized by the Company is included in selling, general and administrative expenses on the Consolidated Statements of Operations.
The Company issued $0.1 million and $0.2 million of share-based compensation to the Company's Board of Directors during the nine months ended September 30, 2020 and 2019, respectively.
10. 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.

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The following table sets forth the reconciliation of the weighted-average number of common shares used to compute basic EPS to those used to compute diluted EPS:
 
Three Months Ended September 30, Nine Months Ended September 30,
 
2020 2019 2020 2019
 
(Shares in millions)
Weighted-average number of common shares outstanding-basic
82.8  89.9  83.1  73.7 
Add: Effect of dilutive share-based compensation awards
—  —  0.1  — 
Weighted-average number of shares-diluted
82.8  89.9  83.2  73.7 
The following table shows equity awards that are excluded from the computation of diluted earnings per share as the shares would have been anti-dilutive:
    Three Months Ended September 30, Nine Months Ended September 30,
  2020 2019 2020 2019
(Shares in millions)
Stock options 3.1  3.1  3.1  3.0 
Restricted stock units 0.4  0.2  0.3  0.1 
Performance stock units 0.5  0.6  0.3  0.3 
Total 4.0  3.9  3.7  3.4 
11. Fair Value Measurement
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 from the sale of 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
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 September 30, 2020 and December 31, 2019 based on quoted prices in active markets for identical assets. These inputs are classified as Level 1 within the valuation hierarchy.
Certain Financial Assets and Liabilities not Measured at Fair Value
At September 30, 2020 and December 31, 2019, the fair value of the Company’s total debt was estimated to be $673.6 million and $776.1 million, respectively, compared to a carrying amount of $739.9 million and $800.5 million, respectively. The fair value was estimated by management based upon estimates of debt pricing provided by financial institutions, which are considered Level 2 inputs.
12. Revenue from Contracts with Customers
Cokemaking
Substantially all our coke sales are made pursuant to long-term, take-or-pay coke sales agreements with AM USA, AK Steel and U.S. Steel, who are three of the largest blast furnace steelmakers in North America. The take-or-pay provisions in our
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agreements require our customers to purchase all or substantially all of the coke volumes produced as specified in the agreements or pay the contract price for any tonnage they do not purchase. The take-or-pay provisions of our agreements also require us to deliver minimum annual tonnage, which vary by contract, and have historically been approximately 4.1 million tons, covering at least 90 percent of each facility's nameplate capacity.
As a result of the impacts the COVID-19 global pandemic has had on our customers, in July 2020, SunCoke entered into customer agreement amendments, providing near-term coke supply relief for our customers, in exchange for extending certain agreements. Subsequent to these amendments, in October 2020, the contract expiration date of the Haverhill II contract with AK Steel was further extended from June 2023 to June 2025.
Our coke sales agreements have approximately 18.5 million tons of unsatisfied or partially unsatisfied performance obligations, which are expected to be delivered over an average remaining contract term of approximately six years.
Disaggregated Sales and Other Operating Revenue
The following table provides disaggregated sales and other operating revenue by product or service, excluding intersegment revenues:    
Three Months Ended September 30, Nine Months Ended September 30,
  2020 2019 2020 2019
  (Dollars in millions)
Sales and other operating revenue:
Cokemaking $ 275.8  $ 363.9  $ 937.3  $ 1,073.0 
Energy 11.2  13.7  36.3  40.4 
Logistics 8.0  16.0  24.0  57.4 
Operating and licensing fees 7.1  9.6  22.8  29.3 
Other 0.1  1.1  2.5  3.0 
Sales and other operating revenue $ 302.2  $ 404.3  $ 1,022.9  $ 1,203.1 
The following table provides disaggregated sales and other operating revenue by customer:
Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
(Dollars in millions)
Sales and other operating revenue:
AM USA $ 154.2  $ 196.8  $ 530.3  $ 586.4 
AM Brazil 7.1  9.5  22.8  29.2 
AK Steel 79.0  109.7  276.7  326.5 
U.S. Steel 49.4  68.9  159.3  191.9 
Other 12.5  19.4  33.8  69.1 
Sales and other operating revenue $ 302.2  $ 404.3  $ 1,022.9  $ 1,203.1 
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13. Business Segment Information
The Company reports its business through three 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 at least 2023.
Logistics operations are comprised of CMT, KRT, Lake Terminal, which provides services to our Indiana Harbor cokemaking facility, and DRT, which provides services to our Jewell cokemaking facility. Handling and mixing results are presented in the Logistics segment.
Corporate expenses that can be identified with a segment have been included in determining segment results. The remainder is included in Corporate and Other. Corporate and Other also includes activity from our legacy coal mining business.
Segment assets are those assets utilized within a specific segment and exclude taxes.
The following table includes Adjusted EBITDA, which is the measure of segment profit or loss reported to the chief operating decision maker for purposes of allocating resources to the segments and assessing their performance:    
 
Three Months Ended September 30, Nine Months Ended September 30,
 
2020 2019 2020 2019
  (Dollars in millions)
Sales and other operating revenue:
Domestic Coke $ 287.1  $ 378.5  $ 975.8  $ 1,115.8 
Brazil Coke 7.1  9.6  22.8  29.3 
Logistics 8.0  16.2  24.3  58.0 
Logistics intersegment sales 5.0  6.1  16.8  19.3 
Elimination of intersegment sales (5.0) (6.1) (16.8) (19.3)
Total sales and other operating revenues $ 302.2  $ 404.3  $ 1,022.9  $ 1,203.1 
Adjusted EBITDA:
Domestic Coke $ 48.7  $ 59.8  $ 173.7  $ 174.6 
Brazil Coke 3.2  3.9  10.5  12.7 
Logistics 4.3  9.6  10.6  34.1 
Corporate and Other(1)
(8.4) (6.6) (25.9) (24.3)
Total Adjusted EBITDA $ 47.8  $ 66.7  $ 168.9  $ 197.1 
Depreciation and amortization expense:
Domestic Coke $ 29.8  $ 28.9  $ 90.7  $ 90.1 
Brazil Coke 0.2  0.2  0.4  0.5 
Logistics 3.2  6.1  9.6  18.2 
Corporate and Other 0.3  0.4  1.0  1.0 
Total depreciation and amortization expense
$ 33.5  $ 35.6  $ 101.7  $ 109.8 
Capital expenditures:
Domestic Coke $ 12.5  $ 28.0  $ 44.8  $ 78.4 
Logistics 4.0  0.4  8.6  3.1 
Total capital expenditures $ 16.5  $ 28.4  $ 53.4  $ 81.5 
(1)Corporate and Other includes activity from our legacy coal mining business, which contributed Adjusted EBITDA losses of $1.3 million and $5.8 million during the three and nine months ended September 30, 2020, respectively, as well as $2.0 million and $5.8 million during the three and nine months ended September 30, 2019, respectively. Additionally, Corporate and Other includes foundry related research and development costs of $0.9 million and $2.3 million during the three and nine months ended September 30, 2020, respectively.

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The following table sets forth the Company's segment assets:
September 30, 2020 December 31, 2019
(Dollars in millions)
Segment assets
Domestic Coke $ 1,352.8  $ 1,434.2 
Brazil Coke 14.4  14.6 
Logistics 196.4  200.8 
Corporate and Other 90.8  102.0 
Segment assets, excluding tax assets 1,654.4  1,751.6 
Tax assets 7.4  2.2 
Total assets $ 1,661.8  $ 1,753.8 
The Company evaluates the performance of its segments based on segment Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted for any impairments, gain on extinguishment of debt, changes to our contingent consideration liability related to our acquisition of CMT, and/or transaction costs incurred as part of the Simplification Transaction. EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives to net income 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. 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. Additionally, other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.
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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:
  Three Months Ended September 30, Nine Months Ended September 30,
  2020 2019 2020 2019
  (Dollars in millions)
Net (loss) income attributable to SunCoke Energy, Inc. $ (2.7) $ (163.0) $ 8.7  $ (150.9)
Add: Net income (loss) attributable to noncontrolling interests
1.3  (0.1) 3.6  3.3 
Net (loss) income $ (1.4) $ (163.1) $ 12.3  $ (147.6)
Add:
Long-lived asset and goodwill impairment —  247.4  —  247.4 
Depreciation and amortization expense 33.5  35.6  101.7  109.8 
Interest expense, net 13.7  15.7  43.2  45.6 
Gain on extinguishment of debt (0.5) (1.5) (3.4) (1.5)
Income tax expense (benefit) 0.2  (63.5) 12.8  (57.3)
Contingent consideration adjustments(1)
—  (3.9) —  (4.2)
Restructuring costs(2)
2.3  —  2.3  — 
Simplification Transaction costs(3)
—  —  —  4.9 
Adjusted EBITDA $ 47.8  $ 66.7  $ 168.9  $ 197.1 
Subtract: Adjusted EBITDA attributable to noncontrolling interests(4)
2.3  1.6  6.6  39.1 
Adjusted EBITDA attributable to SunCoke Energy, Inc.
$ 45.5  $ 65.1  $ 162.3  $ 158.0 
(1)In connection with the CMT acquisition, the Company entered into a contingent consideration arrangement that required the Company to make future payments to the seller based on future volume over a specified threshold, price and contract renewals. Contingent consideration adjustments in the first half of 2019 were primarily the result of modifications to the volume forecast. This liability was written to zero during the third quarter of 2019, and the related contract was terminated in 2020.
(2)Charges related to a company-wide restructuring and cost-reduction initiative.
(3)Costs expensed by the Partnership associated with the Simplification Transaction.
(4)Reflects noncontrolling interest in Indiana Harbor and the portion of the Partnership owned by public unitholders prior to the Simplification Transaction.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
This Quarterly Report on Form 10-Q contains certain forward-looking statements of expected future developments, as defined in the Private Securities Litigation Reform Act of 1995. This discussion contains forward-looking statements about our business, operations and industry that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations and intentions. Our future results and financial condition may differ materially from those we currently anticipate as a result of the factors we describe in our filings with the SEC, including this Quarterly Report on Form 10-Q, and under “Cautionary Statement Concerning Forward-Looking Statements.
Currently, such risks and uncertainties also include: SunCoke’s ability to manage its business during and after the COVID-19 pandemic; the impact of the COVID-19 pandemic on SunCoke’s results of operations, revenues, earnings and cash flows; SunCoke’s ability to reduce costs and capital spending in response to the COVID-19 pandemic; SunCoke’s balance sheet and liquidity throughout and following the COVID-19 pandemic; SunCoke’s prospects for financial performance and achievement of strategic objectives following the COVID-19 pandemic; capital allocation strategy following the COVID-19 pandemic; and the general impact on our industry and on the U.S. and global economy resulting from COVID-19, including actions by domestic and foreign governments and others to contain the spread, or mitigate the severity, thereof.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is based on financial data derived from the financial statements prepared in accordance with the United States generally accepted accounting principles (GAAP) and certain other financial data that is prepared using a non-GAAP measure. For a reconciliation of the non-GAAP measure to its most comparable GAAP component, see Non-GAAP Financial Measures at the end of this Item and Note 13 to our consolidated financial statements.
Our MD&A is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition and cash flow.
Overview
SunCoke Energy, Inc. (“SunCoke Energy,” “SunCoke,” “Company,” “we,” “our” and “us”) is the largest independent producer of high-quality coke in the Americas, as measured by tons of coke produced each year, and has over 55 years of coke production experience. Coke is a principal raw material in the blast furnace steelmaking process and is produced by heating metallurgical coal in a refractory oven, which releases certain volatile components from the coal, thus transforming the coal into coke. We also own and operate a logistics business that primarily provides handling and/or mixing services to steel, coke (including some of our domestic cokemaking facilities), electric utility, coal producing and other manufacturing based customers.     
Cokemaking
We have designed, developed, built, own and operate five cokemaking facilities in the United States (“U.S.”), which consist of our Haverhill, Middletown, Granite City, Jewell and Indiana Harbor cokemaking facilities. These five cokemaking facilities have collective nameplate capacity to produce approximately 4.2 million tons of blast furnace coke per year. Additionally, we have designed and operate one cokemaking facility in Brazil under licensing and operating agreements on behalf of ArcelorMittal Brasil S.A. (“ArcelorMittal Brazil”), which has approximately 1.7 million tons of annual cokemaking capacity. To diversify our business and customer base, SunCoke began exploring the foundry coke market. Foundry coke is a high-quality grade of coke that is used at foundries to melt iron and various metals in cupola furnaces, which is further processed via casting or molding into products used in various industries such as construction, transportation and industrial products. Throughout 2020, we have been testing production capacity and executing successful test sales of foundry coke. We expect we will be in a position to produce and sell approximately 100 thousand tons of foundry coke in 2021.
Our core business model is predicated on providing steelmakers an alternative to investing capital in their own captive coke production facilities. We direct our marketing efforts principally towards steelmaking customers that require coke for use in their blast furnaces. Our U.S. coke sales are made pursuant to long-term, take-or-pay agreements with ArcelorMittal USA LLC and/or its affiliates (“AM USA”), AK Steel Corporation (“AK Steel”) and United States Steel Corporation (“U.S. Steel”), who are three of the largest blast furnace steelmakers in North America. These coke sales agreements have a weighted average remaining term of approximately six years based on annual nameplate capacity and contain pass-through provisions for costs we incur in the cokemaking process, including coal costs (subject to meeting contractual coal-to-coke yields), operating and maintenance expenses, costs related to the transportation of coke to our customers, taxes (other than income taxes) and costs associated with changes in regulation. The coal component of the Jewell coke price is based on the weighted-average contract price of third-party coal purchases at our Haverhill facility applicable to AM USA coke sales.
In March 2020, Cleveland-Cliffs Inc. ("Cliffs"), a leading producer of iron ore pellets, completed the acquisition of AK Steel. In September 2020, Cliffs announced that it has entered into a definitive agreement with AM USA to acquire
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substantially all of the operations of AM USA and its subsidiaries. We do not currently anticipate any impact to our contracts resulting from these transactions.
Steelmaking customers continue to operate in a challenging environment. In response to the decline in end user demand as well as in an effort to slow the spread of the novel coronavirus ("COVID-19"), in March 2020, end user manufacturers began idling plants, which directly and adversely impacted our customers. As a result, the U.S. steel production utilization rate declined approximately 10 percent from December 2019 to approximately 70 percent in October 2020, up from 50 percent in June 2020. In response to this decrease in demand for steel production, certain blast furnaces have idled and other steelmaking facilities that continue to operate have turned down production. In order to help navigate through this challenging environment, SunCoke worked with our customers to provide near-term coke supply relief for customers in exchange for extending certain contracts. See further discussion in "Recent Developments."
We expect it will take substantial time to return to normalized production levels, but given current market uncertainties and uncertainty regarding the duration, severity and potential resurgence of the COVID-19 pandemic, we cannot predict when production levels will normalize. Before steel production ramps back up, stockpiles throughout the supply chain likely will be utilized and end user demand will likely not return to its previous levels until the overall economy recovers.
Our Granite City facility and the first phase of our Haverhill facility, or Haverhill I, have steam generation facilities, which use hot flue gas from the cokemaking process to produce steam for sale to customers, pursuant to steam supply and purchase agreements. Granite City sells steam to U.S. Steel and Haverhill I provides steam, at minimal cost, to Altivia Petrochemicals, LLC. Our Middletown facility and the second phase of our Haverhill facility, or Haverhill II, have cogeneration plants that use the hot flue gas created by the cokemaking process to generate electricity, which either is sold into the regional power market or to AK Steel pursuant to energy sales agreements. Our Haverhill II facility amended energy agreement with AK Steel expires in 2021, at which time Haverhill II intends to continue to generate electricity for sale at prevailing market rates, either into the regional power market or to AK Steel.
The following table sets forth information about our cokemaking facilities and our coke and energy sales agreements as of September 30, 2020:
Facility Location Customer Year of
Start Up
Contract
Expiration
Number of
Coke Ovens
Annual Cokemaking Nameplate
Capacity(1)
(thousands of tons)
Use of Waste Heat
Owned and Operated:
Jewell
Vansant, Virginia
AM USA 1962
December 2025(3)
142 720
Partially used for thermal coal  drying
Indiana Harbor
East Chicago, Indiana
AM USA
1998 October 2023 268 1,220
Heat for power generation
Haverhill I
Franklin Furnace, Ohio
AM USA
2005
December 2025(3)
100 550
Process steam
Haverhill II
Franklin Furnace, Ohio
AK Steel 2008
June 2025(4)
100 550
Power generation
Granite City
Granite City, Illinois
U.S. Steel 2009 December 2024 120 650
Steam for power generation
Middletown(2)
Middletown, Ohio
AK Steel 2011 December 2032 100 550
Power generation
830 4,240
Operated:
Vitória
Vitória, Brazil
ArcelorMittal Brazil
2007 January 2023 320 1,700
Steam for power generation
1,150 5,940
(1)Cokemaking nameplate capacity represents stated capacity for production of blast furnace coke. The minimum tons in our coke sales agreements may be lower than the annual cokemaking nameplate capacity.
(2)The Middletown coke sales agreement provides for coke sales on a “run of oven” basis, which includes both blast furnace coke and small coke. Middletown nameplate capacity on a “run of oven” basis is 578 thousand tons per year.
(3)In July 2020, the Jewell and Haverhill I contracts with AM USA were amended to extend the contract expiration date from December 2020 to December 2025. See "Recent Developments" for additional details.
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(4)In July 2020, the Haverhill II contract with AK Steel was amended to extend the contract expiration date from December 2021 to June 2023. In October 2020, the contract expiration date was further extended to June 2025. See "Recent Developments" for additional details. The energy supply agreement, whereby AK Steel purchases electricity produced from the Haverhill II cogeneration plant, will expire in December 2021.
Logistics
Our logistics business consists of Convent Marine Terminal (“CMT”), Kanawha River Terminal (“KRT”), Lake Terminal and Dismal River Terminal (“DRT”). CMT is one of the largest export terminals on the U.S. Gulf Coast. CMT provides strategic access to seaborne markets for coal and other industrial materials. The terminal provides loading and unloading services and has direct rail access and has the current capability to transload 15 million tons annually with its top of the line shiploader. The facility serves coal mining customers as well as other merchant business, including aggregates (crushed stone) and petroleum coke. CMT's efficient barge unloading capabilities complement its rail and truck offerings and provide the terminal with the ability to transload and mix a significantly broader variety of materials, including petroleum coke and other materials from barges at its dock. KRT is a leading metallurgical and thermal coal mixing and handling terminal service provider with collective capacity to mix and transload 25 million tons annually through its two operations in West Virginia. Lake Terminal and DRT provide coal handling and mixing services to SunCoke's Indiana Harbor and Jewell cokemaking operations, respectively.
Our logistics business has the collective capacity to mix and/or transload more than 40 million tons of coal and other aggregates annually and has storage capacity of approximately 3 million tons. Materials are transported in numerous ways, including rail, truck, barge or ship. We do not take title of the materials handled but instead derive our revenues by providing handling and/or mixing services to our customers on a per ton basis. Revenues are recognized when services are provided as defined by customer contracts. Logistics services provided to our domestic cokemaking facilities are provided under contracts with terms equivalent to those of arm's-length transactions.
Certain CMT customers are impacted by seaborne export market dynamics. Fluctuations in the benchmark price for coal delivery into northwest Europe, as referenced in the Argus/McCloskey's Coal Price Index report (“API2 index price”), as well as Newcastle index coal prices, as referenced in the Argus/McCloskey's Coal Price Index report (“API6 index price”), which reflect low-ash coal prices shipped from Australia, contribute to our customers' decisions to place tons into the export market and thus impact transloading volumes through CMT. Tempered demand from Europe and increasing Russian coal supply have caused the global thermal coal prices to remain at depressed levels, which have continued to unfavorably impact export volumes from our customers.
Our KRT terminals serve two primary domestic markets: metallurgical coal trade and thermal coal trade. Metallurgical markets are primarily impacted by steel prices and blast furnace operating levels, whereas thermal markets are impacted by natural gas prices and electricity demand. Challenging market conditions have impacted the volume of coal moving through our domestic logistics terminals, including the terminals that serve our own cokemaking facilities, as a result of the volume relief provided to our Domestic Coke customers.
Historically, a significant portion of our logistics business was derived from a long-term, take-or-pay contract with Foresight Energy LLC ("Foresight"). On March 10, 2020, Foresight filed for Chapter 11 bankruptcy and our contract with Foresight was subsequently rejected. CMT is handling tons in 2020 under a new agreement with Javelin Global Commodities (UK) Ltd (“Javelin”), the global coal trading and marketing agent for Foresight and others, and is in the process of negotiating a longer term contract with Javelin.
Third Quarter Key Financial Results
Our consolidated results of operations were as follows:
  Three Months Ended September 30, Increase (Decrease) Nine Months Ended September 30, Increase (Decrease)
  2020 2019 2020 2019
  (Dollars in millions)
Net (loss) income $ (1.4) $ (163.1) $ 161.7  $ 12.3  $ (147.6) $ 159.9 
Net cash provided by operating activities
$ 74.5  $ 84.9  $ (10.4) $ 123.1  $ 120.5  $ 2.6 
Adjusted EBITDA
$ 47.8  $ 66.7  $ (18.9) $ 168.9  $ 197.1  $ (28.2)
The three and nine months ended September 30, 2020 reflect the impact of volume relief provided to certain Domestic Coke customers beginning during the second quarter, partly offset by the ongoing success of our oven rebuild program at Indiana Harbor, as well as lower Logistics volumes. See detailed analysis of the quarter's results throughout the MD&A. See
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Note 13 to our consolidated financial statements for the definition and reconciliation of Adjusted EBITDA, a non-GAAP measure.
Recent Developments
COVID-19. On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. Our facilities have continued to operate during the COVID-19 pandemic due to our inclusion in the Critical Manufacturing Sector as defined by the U.S. Department of Homeland Security and the designation as an essential business by state and local government authorities.
Our top priority has been and continues to be the safety and health of our employees and contractors. In response to the outbreak, we established an internal task force of subject matter experts, initiated enhanced health and safety measures across our facilities and enacted a work from home program for all qualifying personnel. The majority of qualifying personnel have returned to working on-site. We have implemented screening procedures consistent with U.S. Centers for Disease Control and Prevention (“CDC”) recommendations at each of our sites, which may include screen questionnaires and temperature checks for employees, contractors, or other service providers. Additionally, to ensure employee safety, we have also adopted protocols consistent with CDC, state, and local guidance, which include but are not limited to increased cleaning and disinfection, social distancing, physical separations, and, in certain instances, mask-wearing.
We are closely monitoring the impact of the outbreak of COVID-19 on all aspects of our business, including how it has and will impact our suppliers. We have not experienced any significant impacts or interruptions with respect to our ability to procure coal as a result of COVID-19, and we will continue to closely monitor our inventory levels to mitigate the risk of any potential supply interruptions.
Customer Contract Amendments and Revised 2020 Guidance. SunCoke engaged in discussions with its steelmaking customers regarding market challenges presented by the current COVID-19 global pandemic. These discussions addressed near-term coke supply relief for customers in exchange for extending certain contracts.
In July 2020, SunCoke reached an agreement with AK Steel for a supply reduction of 200 thousand tons of coke in 2020, including a 125 thousand ton reduction at Haverhill II and a 75 thousand ton reduction at Middletown, in exchange for extending the Haverhill II contract from December 31, 2021 to June 30, 2023. Subsequent to these amendments, in October 2020, the Haverhill II contract was further extended to June 30, 2025. Key provisions of the agreement, including pass-through of coal costs, reimbursement of operating and maintenance expenses subject to certain metrics, and pricing remain unchanged.
Also in July 2020, SunCoke reached an agreement with AM USA to reduce supply by approximately 300 thousand coke tons in 2020 in exchange for extending the Haverhill I and Jewell contracts to December 31, 2025. Under the new contracts, SunCoke will produce a combined 800 thousand tons for the 2021 contract year and a combined 400 thousand tons on an annualized basis for the 2022 through 2025 contract years. In connection with these discussions, AM USA withdrew its notice declaring a force majeure event.
As we temporarily ramp down coke production in 2020 and address market conditions in the logistics business, we have taken several steps to reduce costs and optimize our operations. The impact of these actions, along with lower volumes, will result in a reduction in 2020 Adjusted EBITDA of $40 million to $50 million from our original expectations. Consistent with our updated guidance provided in August 2020, we expect 2020 Adjusted EBITDA to be between $190 million and $200 million. Additionally, as a result of these changes as well as anticipated changes in working capital, we expect full year 2020 cash from operating activities of approximately $116 million to $136 million. We also expect 2020 capital expenditures of approximately $80 million.
We continue to evaluate our cost structure to ensure that we remain a low-cost provider. We have taken further actions, including a reduction in force, which is anticipated to result in full year savings of approximately $10 million in 2021.
Our business model is built on long-term customer relationships. The actions we have taken, together with our customers, not only address all the near-term contracts that were approaching expiration, but also further strengthen our long-term customer relationships and add meaningful certainty and stability to our business.
The Company expects that the impacts of COVID-19 and related economic conditions on our future results will continue to evolve in ways that are difficult to anticipate. See “Part II - Item 1A - Risk Factors” for additional discussion.

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2020 Revised Key Initiatives. With these new challenges, SunCoke's primary focus in 2020 is to:
Successfully navigate through the COVID-19 pandemic. SunCoke will continue to make every effort to protect the safety and well-being of employees and contractors during this health crisis.
Deliver operational excellence and optimize asset base. SunCoke will continue to deliver strong operational performance and asset optimization while following all safety guidelines.
Support customer base and successful relief negotiation. SunCoke's business model is based on long-term partnerships with our coke customers. We will continue to support our customers to help them navigate through the current crisis, while providing long-term stability by navigating through successful customer relief negotiations.
Maintain asset integrity for long-term viability. SunCoke will ensure that assets are safeguarded during the current crisis situation to minimize any potential negative financial impact in the long-term. We will ensure our asset base is properly maintained, even as operating levels may fluctuate in the near term.
Achieve revised 2020 financial objectives. SunCoke is confident in our liquidity position and will remain committed to achieving our revised financial target of Adjusted EBITDA of between $190 million and $200 million in 2020.
Results of Operations
The following table sets forth amounts from the Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019, respectively:
 
Three Months Ended September 30,  Increase (Decrease) Nine Months Ended
September 30,
Increase (Decrease)
 
2020 2019 2020 2019
 
(Dollars in millions)
Revenues
Sales and other operating revenue $ 302.2  $ 404.3  $ (102.1) $ 1,022.9  $ 1,203.1  $ (180.2)
Costs and operating expenses
Cost of products sold and operating expenses
238.3  319.4  (81.1) 805.2  953.8  (148.6)
Selling, general and administrative expenses 18.4  14.3  4.1  51.1  52.9  (1.8)
Depreciation and amortization expense 33.5  35.6  (2.1) 101.7  109.8  (8.1)
Long-lived asset and goodwill impairment —  247.4  (247.4) —  247.4  (247.4)
Total costs and operating expenses 290.2  616.7  (326.5) 958.0  1,363.9  (405.9)
Operating income (loss) 12.0  (212.4) 224.4  64.9  (160.8) 225.7 
Interest expense, net 13.7  15.7  (2.0) 43.2  45.6  (2.4)
Gain on extinguishment of debt (0.5) (1.5) 1.0  (3.4) (1.5) (1.9)
(Loss) income before income tax expense (benefit) (1.2) (226.6) 225.4  25.1  (204.9) 230.0 
Income tax expense (benefit) 0.2  (63.5) 63.7  12.8  (57.3) 70.1 
Net (loss) income (1.4) (163.1) 161.7  12.3  (147.6) 159.9 
Less: Net income (loss) attributable to noncontrolling interests
1.3  (0.1) 1.4  3.6  3.3  0.3 
Net (loss) income attributable to SunCoke Energy, Inc. $ (2.7) $ (163.0) $ 160.3  $ 8.7  $ (150.9) $ 159.6 

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 for the three and nine months ended September 30, 2020 compared to the same prior year period, partly due to the pass-through of lower coal prices in our Domestic Coke segment. Revenues further declined during the three and nine months ended September 30, 2020 as compared to the same prior year period as a result of lower volumes in our Domestic Coke segment, driven by volume relief provided to our customers impacted by the COVID-19 pandemic, as well as lower volumes in our Logistics segment.
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Selling, General and Administrative Expenses. Selling, general and administrative expenses during the three and nine months ended September 30, 2020 included research and development costs related to foundry coke production of $0.9 million and $2.3 million, respectively. The three and nine months ended September 30, 2020 also included $2.3 million of restructuring costs. The three months ended September 30, 2020 was further impacted by the impact of period-over-period, mark-to-market adjustments in deferred compensation driven by changes in the Company's share price. The nine months ended September 30, 2020 benefited from the absence of $4.9 million of transaction costs incurred during the same prior year period as well as lower legal fees.
Depreciation and Amortization Expense. Depreciation and amortization expense for the three and nine months ended September 30, 2020 decreased by $2.8 million and $8.4 million, respectively, as a result of the impairment of our Logistics assets, which was recorded in the third quarter of 2019. Depreciation expense increased $2.0 million and $6.1 million, respectively, during the three and nine months ended September 30, 2020 as a result of oven rebuilds at Indiana Harbor, which were completed throughout 2019. This increase was mostly offset by the absence of additional depreciation associated with planned upgrades to certain heat recovery steam generators, which was recorded during the same prior year periods.
Interest Expense, Net. Interest expense, net benefited during the three and nine months ended September 30, 2020, as a result of 2025 Senior Notes repurchases as well as lower interest rates on the Revolving Facility, which was partly offset by lower capitalized interest of $2.1 million in the nine months ended September 30, 2020.
Income Tax Expense (Benefit). The increase in income tax expense during the three and nine months ended September 30, 2020 is due to the absence of a $68.7 million tax benefit as a result of the non-cash, pre-tax impairment charges recorded to our Logistics assets during the three and nine months ended September 30, 2019. Additionally, the revaluation of certain deferred tax assets due to lower apportioned state tax rates resulted in deferred income tax expense of $6.5 million during the nine months ended September 30, 2020. See Note 5 to our consolidated financial statements.
Noncontrolling Interest. Net income attributable to noncontrolling interest represents a 14.8 percent third-party interest in our Indiana Harbor cokemaking facility. Net income from Indiana Harbor has increased in the current year periods as a result of the completion of the oven rebuild project and resulting improved performance, which therefore resulted in an increase in net income attributable to noncontrolling interest. Prior to the Company acquiring all of the outstanding common units of the Partnership not already owned by SunCoke (the "Simplification Transaction"), net income attributable to noncontrolling interest also represented the common public unitholders’ interest in the Partnership.

The following table provides details into net income (loss) attributable to noncontrolling interest:
Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 Increase (Decrease) 2020 2019 Increase (Decrease)
(Dollars in millions)
Net income (loss) attributable to third-party interest in our Indiana Harbor cokemaking facility $ 1.3  $ (0.1) $ 1.4  $ 3.6  $ 0.7  $ 2.9 
Net income attributable to the Partnership's common public unitholders'
$ —  $ —  $ —  $ —  $ 2.6  $ (2.6)
Net income (loss) attributable to noncontrolling interest $ 1.3  $ (0.1) $ 1.4  $ 3.6  $ 3.3  $ 0.3 
Results of Reportable Business Segments
We report our business results through three 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, Lake Terminal, located in East Chicago, Indiana, and DRT, located in Vansant, Virginia. Lake Terminal and DRT are located adjacent to our Indiana Harbor and Jewell cokemaking facilities, respectively.
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Corporate expenses that can be identified with a segment have been included in determining segment results. The remainder is included in Corporate and Other, including activity from our legacy coal mining business.
Management believes Adjusted EBITDA is an important measure of operating performance, which is used as the primary basis for the chief operating decision maker to evaluate the performance of each of our reportable segments. Adjusted EBITDA should not be considered a substitute for the reported results prepared in accordance with GAAP. See Note 13 to our consolidated financial statements.
Segment Financial and Operating Data
The following tables set forth financial and operating data:
 
Three Months Ended
September 30,
Increase (Decrease) Nine Months Ended
September 30,
Increase (Decrease)
 
2020 2019 2020 2019
 
(Dollars in millions)
Sales and other operating revenues:
Domestic Coke $ 287.1  $ 378.5  $ (91.4) $ 975.8  $ 1,115.8  $ (140.0)
Brazil Coke 7.1  9.6  (2.5) 22.8  29.3  (6.5)
Logistics 8.0  16.2  (8.2) 24.3  58.0  (33.7)
Logistics intersegment sales 5.0  6.1  (1.1) 16.8  19.3  (2.5)
Elimination of intersegment sales (5.0) (6.1) 1.1  (16.8) (19.3) 2.5 
Total sales and other operating revenues $ 302.2  $ 404.3  $ (102.1) $ 1,022.9  $ 1,203.1  $ (180.2)
Adjusted EBITDA(1):
Domestic Coke $ 48.7  $ 59.8  $ (11.1) $ 173.7  $ 174.6  $ (0.9)
Brazil Coke 3.2  3.9  (0.7) 10.5  12.7  (2.2)
Logistics 4.3  9.6  (5.3) 10.6  34.1  (23.5)
Corporate and Other(2)
(8.4) (6.6) (1.8) (25.9) (24.3) (1.6)
Total Adjusted EBITDA $ 47.8  $ 66.7  $ (18.9) $ 168.9  $ 197.1  $ (28.2)
Coke Operating Data:
Domestic Coke capacity utilization
82  % 99  % (17) % 92  % 98  % (6) %
Domestic Coke production volumes (thousands of tons)
877  1,059  (182) 2,933  3,095  (162)
Domestic Coke sales volumes (thousands of tons)
868  1,057  (189) 2,909  3,091  (182)
Domestic Coke Adjusted EBITDA per ton(3)
$ 56.11  $ 56.58  $ (0.47) $ 59.71  $ 56.49