Welcome to the SXC Earnings Call. My name is Cynthia and I'll be your operator for today's call. [Operator Instructions]. Please note that this conference is being recorded. I'll now turn the call over to your host, Lisa Ciota. Ms. Ciota you may begin.

Thank you, Cynthia and good morning, everyone. Thank you for joining us on the SunCoke Energy First Quarter 2015 Earnings Conference Call. With me are Fritz Henderson, our Chairman and Chief Executive Officer; and Fay West, our Senior Vice President and Chief Financial Officer. Following our remarks made by management today the call will be open for Q&A. This conference call is being webcast live on the Investor Relations section of suncoke.com, and a replay available for a few weeks. If we don't get to your questions on the call today please feel free to give me a call later this afternoon at 630-824-1907. Now before I turn the call over to Fritz, let me remind you that the various remarks we make on today’s call about future expectations constitute forward-looking statements and the cautionary language regarding forward-looking statements in our SEC filings apply to our remarks today. These documents are available on our website as are reconciliations to any non-GAAP measures discussed on today’s call. Now I'll turn the call over to Fritz. Fritzerick “Fritz” A. Henderson : Thank you Lisa and good morning everyone. Page two is a quick summary of the quarter. The quarter for SunCoke Energy was a solid one, both from a safety, environmental and operating and financial perspective, a good start to the year for us and Fay will have, a chance to go through the normal variances but as you look at it, a good solid start for the year for SunCoke Energy. I will come back and talk about some pluses and minuses but we are pleased to see that. We did increase our quarterly dividend earlier this week by 28% on SunCoke Energy shares in-line with the increased distribution we are receiving from SXCP, our investment in our partner -- our limited partnership, SunCoke Energy Partners. We do, as a parent, continue to maintain financial flexibility to both support growth importantly and return additional capital to shareholders. I’ll have more to say about that later in the presentation. We continue to work the pipeline of long-term growth opportunities in a number of industrial facing verticals, and finally based upon the performance we had in the first quarter and our expectations as we are in April through the rest of the year we have recently affirmed our 2015 consolidated adjusted EBITDA guidance, reflecting both the operating performance of our plants and the strength of our long-term take or pay cokemaking contract. At this point I will turn it over to Fay.

Thank you Fritz. As was just mentioned the first quarter of 2015 proved to be a solid quarter across our businesses. Adjusted EBITDA from continuing operations for the first quarter was $49.1 million and was up approximately $10 million or 24% from the prior year quarter. As you can see in the chart this increase is based on better performance, both at our coke operations and at our coal logistics operations. Corporate costs were also lower as compared to the prior year and we will walk through the changes in adjusted EBITDA in greater details on the next slide. Moving onto EPS, in the first quarter of 2015, we reported an EPS loss of $0.03. The current period includes transaction and financing costs related to the Granite City dropdown which occurred in January of 2015. EPS, excluding the impact of the financing and transaction cost was income of $0.06 per share. Finally we are reaffirming our full year consolidated EBITDA adjusted guidance of $190 to $210 million. Turning to slide four, and drilling further into the first quarter results, working from the last two items in the chart we identified the drivers of year-over-year increases and adjusted EBITDA for continuing operations. We saw year-over-year improvement in our domestic coke operations most significantly at our Indiana Harbor facilities were coal and coke yields and sales volumes were up meaningfully. As you may recall our 2014 performance across the fleet was impacted by severe weather conditions and while we did experience the coldest February on record at our Indiana Harbor facility this year the impact of weather was not as significant in the current year. Overall the absolute trends for operating in maintenance activities at our domestic coke operations was unfavorably impacted year-over-year by the resetting of Indiana Harbor's cost factor mechanism.…

Thank you. We will now begin the question-and-answer session. [Operator Instructions]. And our first comes from Paul Luther of Bank of America/Merrill Lynch.

Hi, good morning again Fritz, and Fay and Lisa. Fritzerick “Fritz” A. Henderson : Hi, Paul.

Good morning.

Thanks for taking my questions here. First, I was wondering if you could just provide a little more color, just with respect to the future drop down in how the leverage at SXC impacts that discussion, because I know that at SXC you reported total debt of about $100 million and I just want to get a sense what that means for potential returns out of further dropdowns if you are if the amount of debt you have to exchange at the LP, how that effects the decisions? Fritzerick “Fritz” A. Henderson : So we have a $105 million of bonds remaining at the parent. With the next dropdown transaction we would anticipate assuming it -- the Granite City 23%, you would have a portion of those bonds called, as we have done in prior dropdowns. What we can very well do is call all the bonds so we could actually use cash at the parent or more likely use some revolver capacity at the parent to call the remaining bonds. Once we do that, they I’ll call the basket provision that are in the bonds, the bonds are extinguished. So that’s how we would think about the $105 million of bonds that are sitting remaining upstairs at the parent.

Okay. Can you talk a little bit more about Indiana Harbor and progress with respect to the output there, if you have any better sense of when you might hit those kind of stable consecutive quarters? Fritzerick “Fritz” A. Henderson : So let’s kind of start with the fact that it’s behind where we wanted it to be. While -- I mean we saw we saw improvement in the first quarter but it was obviously not what we were looking for relative to production. This was -- as we thought about the first quarter performance Indiana Harbor was negatively affected by a number of factors, actually most notably we came into the first quarter from the fourth quarter of last year not running at the levels we wanted to be. And then frankly it was a difficult winter for Indiana Harbor, was very cold which affected the ovens and the oven’s performance. We were up year-over-year but not where we wanted to be. As we look into the second quarter while we are disappointed with March I should say, what have we seen? We have seen a better oven performance, we have seen better mechanical availability, reliability. We have seen the asset itself performed significantly better from an environmental perspective, from a safety perspective, ovens per day [ph] is improving, oven temperatures are improving. We see a lot of good leading indicators. So as we think about Indiana Harbor it has taken us longer to achieve the goals that we want. I wouldn’t call the second quarter -- I don’t think the second quarter is going to be indicative of what the run rate should be for Indiana Harbor. I think as we get into the second half of the year we feel good about the run rate of Indiana Harbor. But what that would say is that if we actually ran in the third and the fourth quarter the way we expect to run that we really wouldn’t consider that to be dropped down until early next year. So that’s how I tried to respond to your question.

Yeah, thanks, that’s helpful. And then finally ask just at Coal Logistics and the outlook there, I think previously you had guided to EBITDA of $17 million, I think that was mentioned on the last call, just seeing that Q1 is little bit below what our run rate would be, I don’t know if that was just seasonality and weather impact, I just wanted to check in on that business too.

I think we were impacted in the first quarter by weather, specifically since flooding [ph] kind of, that impacts their operations as well. They were better than the prior year quarter, primarily because they had some -- they really did a nice job of managing their overall operating costs and had some sales mix capability versus the last year. At this point we are still intending our full year guidance remains unchanged for Coal Logistics.

Okay, great. Thanks Fritz and Fay. Fritzerick “Fritz” A. Henderson : Thank you

Thank you. Fritzerick “Fritz” A. Henderson : So Lisa advices me that there are no other questions.

If anybody wants to queue up for questions please do so, otherwise we will conclude the call.

[Operator Instructions]. And our next question comes from Paul Luther of Bank of America Merrill Lynch.

Hi, I figured I would continue. I had another one just, I appreciate the color you gave on cash return. I was wondering how you think about dividends versus buybacks given what the stock is. I think you have a $55 million left of authorization. In terms of dividends I believe you have pegged it against the LP and GP cash flows from partners, would you look to change that ratio, just wondering if you could just add a little more color on those things? Fritzerick “Fritz” A. Henderson : Paul thank you very much for asking a question. I am told -- Lisa actually advices me that the queue has got another behind us, that’s good, otherwise you would have been the only person to ask me a question all morning. I would say a couple of things. First; we did have $55 million left on the repurchase authorization. We wouldn’t ask to refresh that for example until we actually call the bonds, because we need to do that, we need to kind of go through these steps. From my perspective I think there is a role to be played in both share repurchase as well as dividends in the capital allocation strategy. We did -- we have pegged the SXC dividend at 33% of the SXCP from the cash flows that the parent receives from the SXCP, both GP and LP cash flows. Obviously this is a subject for Board consideration. As we think about it we are not wedded to 33% we have flexibility beyond that. And as I think about the parent and the cash that’s generated at the parent, even pre-dropdown transaction, this is why I was -- spent some time in that chart. We have flexibility to increase dividend above where we are today. Obviously it’s a subject that’s got to be approved by the Board. I think there is a role to be played in the capital allocation frame with both the share repurchases as well as dividends and we have done both. I would say just the last point I would make on this subject is leverage capacity at the parent, particularly in the assets upstairs [indiscernible] it’s basically unlevered in terms of net cash. Our approach is to preserve that leverage capacity to support growth. But the business itself generates cash. It gives us the ability to both repurchase shares and pay an increased dividend without having to use leverage.

Got it, that's helpful. Thanks again Fritz. Fritzerick “Fritz” A. Henderson : You're welcome.

And our next question comes from Dean Graves [ph] with [indiscernible]. You may begin.

Hi good morning. Frederick “Fritz” A. Henderson : Dean, are you on mute?

Yes, sorry I was but I figured it out. Sorry about that. Fritz I wondered if you could first talk to us a little bit about the change in leverage, targeted ex-XTP [ph] have turned a 3.5 to 4 and served what you guy’s start process was around that and sort of why that was a level and maybe not a an even higher level for example. And then the second question unrelated, can you guys review for us the reset of the cost pass through mechanism at Indiana Harbor and why that was the case and sort of what that means up from a cost perspective. Frederick “Fritz” A. Henderson : Okay. When we developed our 3 to 3.5 originally, I mean obviously we had a new MLP, a new non-traditional MLP in a different space. We thought that was kind of -- we thought it was a conservative level of leverage. What Dean, what the rating agencies have indicated is below 4 is where they see us relative to our existing rating. And so as we've matured, it is I think we've demonstrated performance we felt like 3.5 to 4 was a reasonable level to move to, one that would preserve the existing rating, one that would allow us to run the business and provide us a little more flexibility to support growth. And so that's the quick answer to the 3.5 to 4. I think your question is it meaningfully above 4, I don't really think it's warranted and more overwrite, I'm reasonably confident it would attract negative rating action. Our credit agreements typically allow us a half of point of flex in the event of an acquisition, I think we would I think six month. So we have some flexibility even with an existing credit agreements,…

So as a follow up to your comment on the amendment to the leverage covenant, you mentioned you could possibly exceed it for six months. Does that mean you could exceed now the 4.5 times for six months? Frederick “Fritz” A. Henderson : Yes.

Okay. Frederick “Fritz” A. Henderson : It basically, I think of it as a -- we think of it as basically something you use in the event you have a single transaction and we have a clear glide path to come back under that number. We think 3.5 to 4 is the right number -- right place to be.

Okay. Thanks Fritz. Frederick “Fritz” A. Henderson : You are welcome.

[Operator Instructions]. And our next question comes from Garrett Nelson with BB&T Capital Markets. You may begin.

Hi, everyone. Sorry for the lack of questions. It's kind of a busy earnings day. But a great release and it's good to see that a lot of the fears that are out there are overblown. Has U.S. Steel given you any indication as to how long they think Granite City will be idled? And sorry if I missed it earlier, but where is that coke, where are they shipping that coke from your Granite City coke ovens? Frederick “Fritz” A. Henderson : So Garrett, no need for apologies. Thank you for asking a question. I would say a couple of things. Your question on where we shipping it interestingly we're not shipping it anywhere. They're running one of the two blast furnaces today. So we are and their coke plant shutdown some time ago. So we're basically supplying the blast furnace that's there. There is some inventory being -- that we've worked with U.S. Steel to locate, places to put inventory and frankly it's business as usual today. And then on your first question, no they've not indicated -- what they’ve said publicly is the outage would continue and they would come back into production based upon market conditions. They've not provided us any other color on that.

Great, okay, thanks. A - Frederick “Fritz” A. Henderson : You're welcome. Okay, so there aren't any other questions. Again I want to thank all of you on the call. I know it is a busy day actually for you and for us. But appreciate very much your interest in SunCoke, your investment in SunCoke. And look forward to talking to you on an ongoing basis going forward. Thanks very much.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.