Welcome to the SXC Earnings Call. My name is [Ellanda] and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later we will conduct the question-and-answer session. Please note that this conference is being recorded. It’s now my pleasure to turn the call over to Ms. Lisa Ciota. You may begin.

Thank you, Ellanda and good morning, everyone. Thank you for joining us to discuss SunCoke Energy’s Second Quarter Results and the announced acquisition of Convent Marine Terminal by SXCP. 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 we’ll open the call for questions. This conference call is being webcast live on the Investor Relations section of our website at www.suncoke.com, and there will be a replay of this call available on the website. Now before I turn the call over to Fritz, let me remind you that the various remarks we make about forward-looking statements constitute future expectations and the cautionary language regarding forward-looking statements in our SEC filings apply to our remarks on the call today. These documents are on our website as are any reconciliations to non-GAAP measures that we discuss on today’s call. With that, I'll turn it over to Fritz.

Thanks Lisa and good morning everyone. Thanks again for joining us this morning. As you saw we made a number of announcements strictly related to SunCoke Energy Partners. In light of those announcements we pulled forward our second quarter results to today. So that everyone has the benefit of seeing all the information at the same time. Many of these announcements particularly regarding the Convent transaction we discussed in detail on our SXCP call this morning, but certain points they’re repeating will do so here this morning. Importantly all the actions we are taking are focused on driving shareholder value. So continue to guide us as we look ahead and we believe we are much in line with your investors on this call. In terms of announcements for the quarter our operating results are in line with calendar year targets I’ll let Fay take you those numbers. As you saw last week we doubled the quarterly dividend at SunCoke Energy. This morning SunCoke Energy Partners announced the highly accretive acquisition of the Convent Marine Terminal. Fourth, we reached agreement with the Conflicts Committee to dropdown the remaining 23% of our Granite City facility into SXCP. And finally, we’re affirming today our 2015 consolidated adjusted EBITDA guidance of between $190 million to $210 million. Importantly these actions that it reflects four points; first it reflects the execution on a disciplined growth strategy that we laid out for investors towards the end of last year we have been diligently working on. Second a sensible approach to capital allocation that balances maintain the financial resources to grow our business with meaningfully returning cash to shareholders. Third, the commitment to do what we said we would do. And fourth and finally the actions underscore and really highlight I think the stability in the long-term - of our long-term business model, both the Coke business that we’re in today as well as obviously with the announcement of Convent are significantly larger coal handling business. And this is done in the backdrop of what is clearly a challenging industry backdrop. We will start by discussing some highlights for the quarter walk through our capital allocation initiatives and then discuss the benefits of the Convent Marine Terminal acquisition before we open up for questions. But turn over to Fay to talk about the quarter.

Thank you, Fritz. So starting with some highlights on the quarter consolidated adjusted EBITDA excluding one time non-cash items was down approximately $10 million. This decrease was driven by the underperformance of our Indiana Harbor facility and a pull forward of plant maintenance activities at Granite City. I will cover these on the next slide. We are pleased with the progress and execution of our coal mining rationalization plan and activities remain on schedule. As we previously indicated while we continue to seek a sale of our coal mining business given the current environment it is highly improbable that its sale will likely occur within the next 12 months. Accordingly our coal segment reverts back to continuing operations. Importantly, this change has no impact on our consolidated guidance. Our coal operations whether treated as discontinued operations or continuing operations were baked into our original consolidated adjusted EBITDA guidance of $190 million to $210 million. Turning to EPS, we reported a loss of $0.21 per share, which primarily reflects charges related to a one-time non-cash pension termination charge, which was about $0.17 per share. The termination of the pension plan and the related accounting charge were also considered in our 2015 guidance. As Fritz stated, we are reaffirming our 2015 consolidated adjusted EBITDA guidance and we expect to update guidance following the close of our Convent Marine acquisition. Turning to Slide 4 and drilling further into first quarter results, we identify the drivers of the year-over-year changes in adjusted EBITDA. Just a little help on reading this chart both the current period and the prior period results include non-cash one-time charges and these items are highlighted in blue on the chart. But to provide a more meaningful analysis of the current period operations, we will focus on results excluding these accounting…

Yes, thanks Fay. Couple of comments on Indiana Harbor. First, if we look across our fleet again the rest of our plants are performing in a very solid way. Our international operations particularly Brazil are performing very well, coal actions are ahead of schedule, coal costs are under control. Indiana Harbor - our significant challenge, continues to be our significant challenge and frankly across our fleet I would say the one significant challenge we have across our fleet. As we think about it, it certainly taken us longer then it’s anticipated and its cost is more of time being money. As we think about the status of the plant, we are commissioning the second major Pusher Charger Machine now that commenced about 30 days ago and we are in the process of doing that. The work that was done to learn from the commissioning of the first PCM has been good and we are doing a good job I think commissioning that second Pusher Charger Machine, but it's obviously had some impact on our production here certainly in the last 30 to 45 days. But I would say results are good with respect to the second Pusher Charger Machine, which is really the last major piece of equipment that’s being installed in the facility. With respect to the ovens and the oven’s performance, three of the four oven batteries are performing significantly better than they have in the past in the fourth is not and that’s where we have the lion share of our efforts focused today to resolve the remaining oven performance issues we have, it really goes to the heat in the ovens and the ability to put adequate charge weights and to run the plant on a stable way in that fourth battery you recall in that past that we've done significant oven repairs, we’ve done some floor replacements. Those have shown good results at other batteries and so kind of the battery if you will in the Indiana Harbor or last frontier. We have a significant amount of work underway today to bring that battery back to where it needs to be so the plant can operate in a stable way going forward. Our objectives to finish that work before the winter begins and so that we exit 2015 running the plant in a stable way generating adequate operating performance, that’s the quick summary what’s happening with Indiana Harbor.

Moving on to Slide 6, we ended the quarter with approximately $202 million in cash and approximately $400 million in combined revolver capacity. This gives us significant flexibility to continue to execute on our growth opportunities and to return capital to shareholders. Turning to cash flow you could see we generated positive cash flow from operations of approximately $65 million and CapEx of approximately $14 million with - in line with expectation. We also had approximately $5 million in dividend payments and $10 million in distribution to SXCP shareholders. Once again we ended the quarter with a solid liquidity position as well as a strong balance sheet. I’ll turn it back to Frit.

All right. Thanks Fay. Let me talk about the Convent Marine Terminal. It’s the Premier - we think A Premier Gulf Coast coal export facility was the financially and operationally sound business model. One is quite consistent actually with our Coke business that will both materially expand our Coal Logistics platform and also diversify our customer base. It leverages our coal competencies in Coal Logistics with new capabilities and represents our entry into the coal export market. The facility itself has a number of strategic advantages. It’s one of the most modern and lowest cost facilities in the region is strategically located on the Mississippi River and it is the only facility in the region with a direct rail link to highly valued low-cost Illinois Basin coals. It is also dredged for Panamax capability, so it has the unique logistics advantages. It hasn’t placed attractive long-term take or pay contracts with two leading Illinois basin coal producers who are generally start off as the low-cost producers in that region. The terminal itself is a tremendous asset with a stable base business and significant upside through a recent capital investment program that has just recently being completed with one remaining piece to go. It’s about a $120 million total program of which $100 million has been spent to improve efficiency for automation from loading coal from rail and loading the ships. The last piece of the program which is pre-funded as part of this acquisition is $20 million to be spent on new state-of-the-art ship loader, a second rail unloading system and additional storage infrastructure. The combination of this CapEx which is as I said the lion share is already behind us with the last 20 to go will provide a significant platform for supporting these two customers going forward and…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question is from Lucas Pipes. Your line is open.

Good morning again.

Hi Lucas.

I do have a follow-up question on the proposed acquisition that is could you breakdown the take-or-pay volume commitments by Foresight and Marine?

Its total 10 and we are not going to break it down between the two.

Okay. Thank you.

Welcome.

Our next question is from Garrett Nelson. Your line is open.

Hi, just a question regarding the drop in your Domestic Coke EBITDA per ton to about $51 during the quarter. I was little surprised to see that especially since your quarterly coke sales volumes were the highest in a long-time. What was the driver of that and what gives you the confidence that number will rebound in the second half of the year to come within your $55 to $60 guidance?

So we pull forward about $4 million of expenses for Granite City which costs you about $4 a ton.

Okay, that makes sense. All right. Thank you.

You’re welcome.

Our next question is from [Lin Zhang]. Your line is open.

Hey, good morning. Thanks for taking my call. First question you mentioned that the MLP does not need to issue equity publicly to finance their dropdown. Do you mean do not issue equity this year or maybe a next couple of years I just want to clarify that.

Let me be - really crystal clear, we do not have any plan to issue public equity associated with the Convent transaction, the value transaction we don’t need to, we don't have to, we don’t plan to issue public units. Whether or not we might issue public units in the future for other transactions impossible to speculate.

Okay, good. That’s what I want to clarify. And also I want to clarify what are the lockup for client shares is 4 months to 6 months you said?

42 months. The lockup is for 42 months, it’s ratability over that time period.

Oh! Great, and thank you. The last one is can you also comment on what you see there on the current M&A market for coal or a coal terminal logistic asset because givens our weak market, the coal market I am assuming that you should see a lot of opportunities just wondering like can you talk a little bit about what you're seeing there and what are the potential for SunCoke to build up more market share or more footprint?

So good question. We in this case feel like we are affiliated with two low-cost producers in the Illinois Basin, for a lot of reason like the Convent Terminal in terms of its - basically quadruples the size of our Logistics business so it's a really meaningful acquisition for us. We think that given what’s going on in the coal space that you’re going to see a significant amount of restructuring from parties that don’t have the same credit quality that Marine and Foresight have and we could very well see other high quality assets coming available over the next 12 months to 18 months and we will be vigilant of looking at it. And I think obviously there you know as well as all the announcements made out there and we think actually that this could create some opportunity for us. To further grow our coal logistics franchise on the right assets that support the right mine. So I think the opportunities are going to be there I can’t tell you which it's going to be. But we’re going to remain vigilant and remain very involved because we think some opportunity maybe weren’t there two years ago.

Great. Thank you very much.

You’re welcome.

Our next question is from [indiscernible]. Your line is open.

Thank you. Good morning everyone. A question on the acquisition of Convent Marine Terminal, in your prepared remarks you talked about stress testing the profitability of coal exports. Can you walk us through some of the ranges used on key variables such as rail and barge costs from the mine to the port freight costs as well as international coal prices? And then more broadly based on the work you've done can you comment on the profitability of Illinois Basin coal exports relative to PRB and Appalachia coal.

So we did look at all those factors, both the rail costs which we know because we did our diligence, so we know what the rail cost is. We looked at API II we stress tested the API II various ranges. We looked at what's happening with the Seaborne freight markets. And then we basically did net back to work FOB mine. We looked at the profitability both on a fully cost as well as on a marginal cost basis to understand what the profitability was in Illinois Basin coals, certainly not only absolute sense but relative to the domestic market because the customers in the Illinois Basin particularly our two customers balance the lion share that business is domestic but they obviously the expert business is also important for them. And then finally relative Illinois Basin other basin, Illinois Basin is significantly more competitive than other basins and significantly more profitable. Central Northern and Southern App we know something about Central App and I would say the cost positions in those markets are more challenged and relative to PRB they are pretty significantly challenged in terms of logistics. So we think the Illinois Basin combines both strong mine dynamics as well as advantage logistics.

Got it and just to focus on, to just dig in a little deeper, when you talk about rail costs and barge cost. Can you give us some rough estimates in terms of the numbers that you used?

No, because we know the exact numbers and there you know there are issues they are confidential between our customers in the rails.

Got it, understood. And then just bigger picture to know that you have this acquisition on the way and the SXC level what is going to be the focus areas for management over the next couple of years?

What I would say is let me talk about the focus of the management team over the next couple of months. I would say obviously as I mentioned before Indiana Harbors are the largest operating focus and that's where we have a significant amount of attention and resources being dedicated by the management team to bring that plan up to performing the way it should. I would say the work being done on the M&A pipeline we’ve been very active and we are going to stay very active because it's the way for us to grow the business in the near-term. I would say we’ve articulated what our game plan is with respect to capital allocation here. So I would say where we spending are most time and this would be now the basics of our business whether it's the environmental performance of our plants, the safety of our of our people these are the bedrock of our business whether it's in coal logistics or coke business and I would say you know that 90% of the people 95% of the people SunCoke that’s what they work on every day you know production, yield, safety, environmental performance. I would say in terms of - how do grow the business obviously it’s working the M&A pipeline. And also finally integrating the acquisition we expect to close this acquisition by no later than 91. We’ll make - conditions closing are fairly customary. And we’re looking forward to bringing this terminal in and making a part of the family and continue to serve these customers. Beyond 2015, I would say you know we’re really focused more on 2015 I mean I think growth in our business is got to be driven by M&A, which means you got to work the pipeline really hard every single day.

Got it, thanks a lot.

You are welcome.

[Operator Instructions] We have a question from [Matthew Barron]. Your line is open.

Yes, it’s [Matt McGrath] Fritz.

Hi, Matt.

Following on the growth question given at the P level your average target and given the cost of capital in the equity markets currently, can you walk me through how you would plan to commence incremental growth?

Well, if you look at this all the action today as you know are focused on correcting –dislocated yield today at the MLP. We believe that the MLP structure over time it’s the right structure for our business, but obviously where the yield has been we are trading about a 16% yield for business with no commodity risk, long-term take or pay agreements so there's a lot of reasons why we think that the yield at the MLP is frankly dislocated from business realities. If we are successful in moving that yield, we think that the MLP itself can - and we acquire assets that generate cash flow. So if we can go back to more normal MLP operations and use high-yield financing, normal financing opportunities and then issuing units like most MLPs do then that would be best, if not we have a parent that has no debt, when the Granite City transaction is done and the parent generates significant cash as well. Our preference is to actually use the MLP to grow our business, but we do have a parent with a significant capacity to grow as well in the event we were to find attractive growth opportunities.

When you thought about buying this business, do you evaluate the alternative of buying stock in the parent using the parents balance sheet to grow it’s not a riskless or costless endeavor those are huge opportunity cost that you evaluate that?

Yes, that’s why we did the transaction at SXCP not at the parent. Obviously, we’ve done share repurchases at the parent. As I said in the charts we’re going to execute opportunistically against the remaining $55 million authorization, but we chose not to do this transaction at the parent today.

On a go-forward basis, when you look at an acquisition would you evaluate it against the cost of capital of a parent what could you do with the capital of the parent?

Yes.

When does the solid financing expire?

Pardon me.

The solid financing piece of the deal when does that expire, when does that need to be, when do you need a permanent financing structure?

It’s six-year financing Matt.

So you have six years to come up with the permanent financial plan, you are under any pressure to do the financing in advance of that?

No Not that, we have $214 million that’s being closed off cash and revolver that’s the piece that we want to term out, but the actual seller financing is on market terms and we have no pressure to refinance that.

So what's the timeline on that $214 million on the revolver or that need to be sort of finalized?

I mean we’re fine at $214 million so I think we are going to refinance that and term it out at the appropriate time. We don't have anything picking that said we have to go by such and such date, which is the ideal position to find yourself in.

You said several time this morning that you don’t expect to do a public equity offering of P shares that you've raised you said public three times or four times. You raised the idea that the parent could buy P shares as away from the transaction. Why would that make sense as opposed to using your revolver in the six-year seller financing?

Yes, actually first of all the six-year seller financing is already in place. So as I said in my comments that’s not our preference to do that, we have the flexibility that certainly will do that as part of the Granite City transaction at a minimum because you need to do that from a tax standpoint. Beyond that actually my purpose is not to provide any parent financing in the permanent structure for the Convent transaction.

Okay one last question, when you guys say that your plan is to distribute 80% to 90% of the free cash flow to parent and shareholders is that - I mean are we going to accomplish that over a certain period of time, is there a timeline around that and we started there now in your mind and if not when will we get there?

I would say - so good question it actually gives me a chance to talk a bit, but drop downs are bit more. So when we said when we articulated the 80% to 90% is we thought that was a suitable payout ratio once it became - once the company SunCoke became a pure play GP and dropped the remaining part of its assets, but let me stop there and say we obviously have Jewell sitting upstairs, we have Brazil sitting upstairs, we have Indiana Harbor obviously being refurbished sitting upstairs. Our belief is over time were best served growing or MLP and leaving SXC as a pure play GP and distributing 80% to 90%, but I also made the comment earlier that our yield today is dislocated from market reality. We are not going to destroy value by dropping assets into the MLP willy-nilly without having a reasonable economic basis for it. So if we are not able to do that those assets are still sitting upstairs, they are generating cash flow, and we have certainly seen our willingness to increase dividends of the parent and the Convent transaction itself provides $0.15 to $0.20 more dividend capacity at the parent and we remain with Jewell, Brazil and Indiana Harbor sitting upstairs which can support additional dividends at the parent. Obviously dividend policy is the function of the board, but we don’t see that we have to drop all the remaining assets down to pursue our capital allocation priorities. Now your last question on timing, I think it's we are going to have to see what the reaction is here over the next 30 days to 45 days in terms of what happens with the MLP as we said before. We think that the MLP’s yield today is rational and dislocated from the economics of the business and then judge accordingly.

Okay. Thanks.

You’re welcome.

Our next question is from Paul Luther. Your line is open.

Thanks. Can you just provide I guess a bit of an update for Indiana Harbor if you see a better second half then first half given the latest major piece of equipment installed and when you think it might get to a - the expected run rate on that?

There will be a better second half than first half, but that’s not a great bar because the first half obviously included a pretty weak first quarter, we’re behind our plan the we are actually on schedule expect to commissioning of the second major piece of equipment. And as I said before we anticipate finishing the work on the remaining battery before we get into winter because it's really important that we do that, so we’re stable coming out of this year that's really all I can say about Indian Harbor at this point.

Okay, thanks. And then just an update on coal back with the backing of consolidated ops do you have more strength you can coal in terms of cutting costs or potential further rationalization there are do you expect that kind of steady state going forward for the time being.

We’re ahead a schedule in our coal rationalization plan, if you just look at man power for example our peak man power at coal was little over 500 people at the end of 2012 at the end of 2014 we had 400 folks today, we have 46 and we are on path to bring that down to the minimum necessary to oversee the both procurement activities as well as whatever contract mining has been done at the site. So we do have some additional levers to pull was in the second half of the year. We articulated the ongoing drag of coal longer-term could be approximately $12 million to $12.5 million dollars that's still what we believe is the potential for drag going forward and really what that is that roughly the transportation cost of bringing purchased coals into the coke plant at Jewel. We will continue to look for opportunities and levers to lower that cost too. But we’re on path to achieve at least that.

Okay. Got it, thank you. End of Q&A

You’re welcome. Okay I am advised there are no more questions. So again thanks very much for joining us this morning and for your support and your investment in SunCoke Energy. Thanks bye.

Thank you ladies and gentlemen this concludes today’s conference. Thank you for your participation. You may now disconnect.