Good morning. My name is Connor, and I’ll be your conference operator today. At this time, I would like to welcome everyone to the SunCoke Energy Q4 and Full Year 2015 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Kyle Bland, Director of Investor Relations, you may begin your conference.

Thanks, Connor, and good morning to everyone and thank you for joining us to discuss SunCoke Energy fourth quarter and full year 2015 earnings. With me are Fritz Henderson, our Chairman, President and Chief Executive Officer and Fay West, Senior Vice President and Chief Financial Officer. Following the remarks made by management, we’ll open the call for Q&A. This conference call is being webcast live on the Investor Relations section of our Web site and a replay will be available for your convenience. If we don’t get to your question on the call today, please feel free to reach out to our Investor Relations team. Before I turn the call over to Fritz, let me remind you that the various remarks we make on today’s call, regarding future expectations, constitute forward-looking statements. And the cautionary language regarding forward-looking statements in our SEC filings apply to remarks we make today. These documents are available on our Web site as our reconciliation to any non-GAAP measures discussed on today’s call. And with that I’ll turn it over to Fritz.

Thank you, Kyle, and thank you all for joining the call this morning. Before we dive into the fourth quarter results, I’d like to first reflect more broadly at 2015. Despite the challenges facing our steel and coal customers, our operations, excluding Indiana Harbor and I’ll come back to Indiana Harbor, performed quite well from a safety, environmental and operating standpoint, helping us finish the year within our revised guidance range. As discussed in December at our Investor Day, we continue to focus our efforts at Indiana Harbor on stabilizing the operations and reducing operation and maintenance costs. Indiana Harbor was the driver of the mix to our original goals in 2015, and must be the primary operating focus in 2016 while holding the excellent levels of operating performance across the rest of our plants. The first test of our progress would be executing year-over-year improvements through the winter season, carrying that momentum into the remainder of 2016. Beyond our operating performance, we executed the drop down of our Granite City facility and significantly expanded our Coal Logistics platform with the acquisition of the Convent Marine Terminal. Convent is off to a solid start, and delivered $21 million of adjusted EBITDA in 2015, slightly in excess of the original goal we set forth as at the time of the acquisition. We made changes in 2015 to streamline the organization and reduce our corporate spend, helping to contribute towards projected $13 million of corporate savings in fiscal ’16. Finally, we executed our capital allocation strategy by returning a little over $60 million to shareholders in 2016, and began executing our de-levering strategy at the partnership in the fourth quarter by repurchasing nearly $50 million of senior notes in that quarter. We expect to continue de-levering in 2016. With all this said, our share price declined 82% in 2015, reflecting both the results for the Company and importantly, the changes and the challenges being faced by our customers on the coke side of the business, supporting steel customers, and particularly with the Convent Marine Terminal to coal handling side of our business. And the heightened risks in the environment as a result of those challenges. And this sets the backdrop for 2016 and I’ll have more to say about that at the end of the presentation. Now I’d like to turn it over to Fay.

Thanks Fritz. For the quarter, consolidated adjusted EBITDA was $54.3 million, and was up $2.4 million versus the prior year, mostly due to the benefit of the Convent acquisition, which contributed over $15 million to the period results. But this benefit was partially offset by the performance at Indiana Harbor as well as lower coke sale. For the full year, consolidated adjusted EBITDA was nearly $186 million and was in line with our revised guidance range of $180 million to $190 million. Adjusted EBITDA in 2015 reflects the $21 million contribution from Convent, but also reflects the performance at Indiana Harbor, the impact of the Haverhill Chemicals reorganization, as well as higher legacy costs. Looking at EPS, we reported fourth quarter earnings per share of $0.30, which reflects the operating items that I just discussed, as well as a gain on the extinguishment of debt, driven by our de-levering activities at SXCP. If we turn to Slide 4 and working from left to right on the chart, we identify the drivers of the year-over-year changes in adjusted EBITDA. Most notably, you can see the $10.1 million impact at Indiana Harbor which was driven impart by lower yields and volumes. Also impacting results was an under recovery of O&M which is offset partly by lower nominal O&M spend. Moving to our other coke operations, fourth quarter results reflect lower volumes versus the prior year which we will discuss in detail shortly. Additionally, the Coke segment results continue to reflect the previously disclosed reorganization of Haverhill Chemicals as well as separation cost at our Jewell coke facility which are in line with our original expectations. As you could see on the chart, we achieved favorable year-over-year performance at our corporate, coal mining and coal logistics segments. Convent also contributed $15.6 million to…

Thanks Fay. Wrapping up on Chart 9, wrapping up on our 2016 priorities, team remains focused on managing through the current challenges in the industry environment, while delivering against our operational and financial targets. Our top focus strategically is to anticipate, adapt, and respond as an organization to the challenges our customers face going forward and to a significant extent it's about being flexible and maintain flexibility and financial flexibility to be able to either anticipate or respond in the event that one or more of these challenges were to result in events and/or issues that our customers might face more broadly. We also remain committed entirely on stabilizing the Indiana Harbor operations and delivering against our track-record of operational excellence across the remaining coke and coal logistics fleet. And last, we’re committed to achieving our 2016 guidance, and executing our de-levering strategy to fortify our financial foundation to position SunCoke and SunCoke Energy Partners for the long-term. With that, let’s turn it over to Q&A.

[Operator Instructions] Your first question comes from the line of Pavan Hoskote with Goldman Sachs. Your line is open.

Thanks for the very detailed update last month, and really I have just one question here. So, at your Investor Day, you expressed confidence on the basing coal exports through your terminal despite the weak coal markets. Since then you’ve seen about three weeks of very weak U.S. coal production data. They almost drove some unresolved corporate issues at one of your key customers at that terminal. So in light of all this, can you give us your updated thoughts on the sensitivity of EBITDA from your Convent Marine Terminal?

Well, when we set our targets for ’16 Pavan we set it based upon a 6.5 million rate, our utilization rate, which is about 65% of the capacity of the Convent Marine Terminal. So we already tried to be reasonably conservative in terms of looking at the volumes that we would see. We set a range for the Convent Marine Terminal of 50 million to 55 million of adjusted EBITDA, which we think is a reasonable range for the Convent Terminal, reflecting both the performance of the business, the nature of our contracts, and the risks that our customers face. We still feel that’s a reasonable range.

Your next question comes from the line of Paul Luther with Bank of America/Merrill Lynch. Your line is open.

Hi it is PT for Paul how are you guys?

Good PT, how about you?

Good morning.

Good, thanks. I just want to follow-up a couple of questions on the Convent Marine Terminal. Can you remind us what the take or pay volumes are with the two primary customers there? And then can you give us I think you updated us on Q3. Can you give us the Q4 update on how coal was delivering the quarter versus the take or pay volumes?

So I’ll let Fay take the second question. The first question is a pretty simple one it is $5 million each with our two customers, that’s how the take or pay works. And interestingly, in 2015, one of those two customers actually operated, which were operating in excess of the take or pay volumes through the day-to-day acquisition and ended up the year in excess of take or pay volume. So, Fay, you want to talk about the volume results.

Yes. During the fourth quarter Convent translated about 1.4 million tonnes and had about 1 million of pay tonnes in the quarter.

And then on the corporate cost holiday and IDR holiday and you said in the past you would reevaluate that quarterly. What are the sorts of things that you’re considering when reevaluating like, I guess to be more specific what would make you consider cancelling that holiday?

So PT as we think about it, I talked about this exclusively in the SXCP call earlier this morning. The overarching objective of the partnership is to deliver at least $60 million of excess cash flow to de-lever the balance sheet. And as we think about the corporate cost holiday going forward, we think it's an integrated fed decision that starts looking at how is the business performing? So, obviously, we need to say how we’re performing as a business. The second thing you need to look at is what’s happening in the environment with respect to our customers, both for risk they face and if any of those risks actually results in events that might be realized, we have to be able to factor that into our thinking. Third, as we think about this specifically the corporate cost holiday, it's about generating $60 million of coverage. And so, as we think about it, the level of distribution at the MLP and the level of corporate cost holiday provided by the parent are an integrated -- it's an integrated decision. So it's about generating at least a $60 million of coverage. The last point we would look at obviously is we’d be looking at our progress toward our de-levering goals that we see even more attractive opportunities to de-lever, but we could very well take actions that would generate more coverage at the MLP. Now obviously you can do that through the corporate cost holiday or you can do that for distributions, and so that’s why the decisions are going to be made quarterly.

And then last one if I may, can you just give us may be a refresh on the coal mining operations and further rationalization? I was looking at Slide 20 that mentioned 5 million of non-recurring coal rationalization cost, so I just want to see if there's something new there?

No, there's nothing new there. It's pretty much what we outlined in our Investor Day in December. And it really involves further rationalization and closure of mines.

Your next question comes from the line of Pavel Kaganas with Newtyn. Your line is open.

I just have one question on the de-levering and the bond buybacks. I know you had bought an extensive amount in Q4 at around $0.75 and the presentation guides to an average of $0.70 throughout 2016 and then just looking at where they are trading year-to-date the prices seem very attractive, so I'm wondering, why you haven’t been buying back the bonds in January so far?

We've been blacked out pending the call actually today, so because we hadn’t been able to actually provide actual results relative to the guidance we provided in December we weren’t permitted to.

Your next question comes from the line of Frank Rango with Purchase Capital Management. Your line is open.

With regards to the Convent, so I was looking back at the way you structured the acquisition and I think part of the consideration was of course units and part of it was earn-out if I remember correctly. And with the bonds of Murray and of course they're trading at such distressed levels, it just gives rise to the question that should those entities file, how would that affect the earn-out that you have with them would that be an offsetting claim in their bankruptcy or how would that work?

Frank, the earn-out, the agreement to purchase Convent was with Raven actually which is Chris Cline's organization. The contracts are with Foresight and Murray, but the earn-out provision is part of the contract with Cline and Raven, so they are different actually. It's not a part of the executory contract.

So, is there any -- but, if the 10 counterparties that you have for the coal, if they were to declare bankruptcy, so you’d have -- you'd still be on the hook for that earn-out to Raven. Is that the bottom-line?

Well, we'd be unlikely to generate additional volumes above the 10 million. And I guess what I would say is, yes, if to the extent that we generate additional unrelated businesses to those two customers which is what large statement -- in the earn-out we have related to both volumes -- related to volumes above 10 million tonnes, so if volumes fell precipitously as a result of one of the customers having at event then we wouldn’t be over 10 million tonnes, there wouldn’t be any earn-out.

Your next question comes from the line of Lucas Pipes with FBR Capital Markets. Your line is open.

Sorry, this is Derek Hernandez on for Lucas. So just wanted to ask a quick question with regards to the Indiana Harbor outlook, I know this is not updated from the December, but we're just wondering if there was any outlook in terms of the potential EBITDA growth over the year or if it's kind of a flat line across?

So Derek, welcome

Thank you.

No change as to what we had identified in December and if you look back at December, we did identify an improvement year-over-year. No changes to that to-date and as I said in my comments, your first evaluation that is going to be how did we perform in the first quarter relative to winter periods in the first quarter of '15 and '14. And so the focus today is really about executing much-much better sequentially as well as year-over-year in the winter.

Your next question comes from the line of Garrett Nelson with BB&T Capital Markets. Your line is open.

I know that weather has impacted your Q1 coke volumes in the past, how has weather impacted your operations so far if at all? And is it safe to assume that your Q1 production and sales will probably be a bit weaker than the final three quarters?

Well, let me just talk about the year. We do anticipate running the plants for the year at contract maximums. We did as Fay mentioned ramp down our production in the fourth quarter in order to stay within contract maxes, so you could see lower -- a small level of lower volumes in the first quarter, but across the year, we would anticipate being at contract max. So now let me deal with your question on weather. To think about weather in 2014, it affected virtually all of our plants. Think about the winter in 2015, the rest of our plants did a much better job, Indiana Harbor continued to struggle. I think with respect to 2016 so far the I would say first of all the weather has been more benign. We don’t have any plans in Manhattan or Boston, or Washington D.C., so the weather has been I think more favorable for us so far. Second, we’ve had more moisture issues in a number of plants from rain, particularly in and around our Granite City plant but I would call that kind of business as usual. And so I think we have to see what our results are in the first quarter. But I think I am encouraged by the work the team has done to be able to operate our plants safely, productively and efficiently in winter.

And how should we be thinking about domestic coke production by facility in 2016 versus 2015? I know you’re guiding for your total coke production to be about flattish at 4.1 million tonnes. And I think you talked about Indiana Harbor being higher. But maybe if you could just provide a bridge just help us a little bit in thinking about your production by facility that you’re expecting?

So I would say Indiana Harbor we guided to $1 million, 0.50 for 2016 and that would be versus 975 where we ended roughly in 2015. So that’s up 75,000. We did guide I’ll have to talk to you about where we stood at the rest of our plants. I think what we’ve seen with our customers, we have introduced some higher volatile material coal blends into our 2016 blend and whenever you have higher VM and your blends are going to have -- you're going to have lower volumes across because you’re going to have more volatile materials in the coal. But Fay do you want to just talk more specifically?

Yes, so at Indiana Harbor, we did guide to that a 75,000 tonne increase year-over-year. But at our domestic coke facilities, we are planning our production and contract mass for 2016 and we are anticipating no pent up spot sales. So it should be relatively flat at our other facilities.

Adjusted for VM.

And then could you remind us what percentage of SunCoke’s total revenue the U.S. Steel and AK Steel accounted for last year, do you have those numbers?

So I can put it in tonnes, which is probably the most relevant way to think about it. We were from Granite City, which is the only facility that we support U.S. Steel at about not quite 700,000 tonnes 660 was the final number for the year. And then with respect to AK Steel, we support them from Coverdale and Middletown and those two facilities would be somewhere between 1.15 and 1.2, so 1.2 is the total, thanks.

Your next question comes from the line of Melissa Tan with R.W. Pressprich. Your line is open.

Just regarding your capital allocation strategy, earlier you mentioned because of the blackout period, you were not able to buy back some bonds. But just looking at your goals to get down to leverage under four times, and looking at your available free cash flow. How would you balance that with the dividend on the partnership side?

Melissa, I’d refer back to the comments I made earlier in the call. As we look at what we want to do in the partnership side of the business, we want to generate at least $60 million of cash coverage in order to de-lever emphasize the word at least we do $60 million, we feel like we will land within our targeted ranges of leverage. But we will evaluate that on a quarterly basis. And specifically to your question on the distribution, as I mentioned earlier in the call, we’ll look at the leverage that we can pull, the partnership, whether it's through distributions or whether it's through corporate cost holidays in order to ensure that we de-lever at least to that extent.

And just second one just regarding to your contract with the U.S. Steel, with the fact that they’re currently idling the Granite City. Are they still consuming the coke for other facilities?

We reproduced the contract max at Granite City in 2015. U.S. Steel does have inventory of coke and so I mean your specific question is where they consuming it? And I think the answer to that is no I mean basically it's been produced in the inventory as to we’re working with U.S. Steel as we would with any other customer to make sure that the coke we would produce for that narrow inventory and that inventory by the way can be ours or theirs, is ultimately consumed in other blast furnaces. But I don’t have anything specific I can talk about here this morning.

[Operator Instructions] There are no further questions at this time. I’ll turn the call back over to the presenters.

All right, again, thanks very much for joining the call here this morning. And thanks for both your interest and investment in SunCoke Energy.