Good morning. My name is Rachel, and I will be your conference operator today. At this time, I would like to welcome everyone to the SXC Fourth Quarter 2016 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Kyle Bland, Director of Investor Relations, you may begin your conference.

Thank you, Rachel. Good morning and thank you for joining us to discuss SunCoke Energy's fourth quarter and full-year 2016 earnings. With me are Fritz Henderson, our Chairman, President and Chief Executive Officer; and Fay West, our Senior Vice President and Chief Financial Officer. Following the remarks made by management, we will open the call for Q&A. This conference call is being webcast live on the Investor Relations section of our website, and a replay will be available for a few weeks. If we don't get to your questions 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 the remarks we make 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.

Thanks, Kyle, and thank you all for joining us this morning. Before we jump into the materials, I wanted to touch briefly on the simplification transaction. Process is running its course as expected. The Conflicts Committee has hired legal and financial advisors has gotten input from SXCP unitholders and conducting its diligence. We continue to gather SunCoke Energy shareholder feedback and appreciate the prospectus that many of you have shared with us. We remain confident in the strategic and financial merits of the transaction, but we will remain price disciplined through the negotiation. Obviously, even that we are engaged in active discussions with the committee, we won't be commenting on anything beyond the scope of these materials today. As mentioned on SXCP's call earlier this morning, SXCP’s intend to maintain its existing distribution policy during the evaluation period of process. And finally, the final qualifying income regulations which are now in effect only strengthen our conviction. The simplification transaction is the right thing to do to achieve the long-term value creation for all SunCoke shareholders. Again, those negotiation with the committee remain ongoing and private, I won’t be saying anything further on the topic beyond what's on the chart. Turning to Slide 4, slide would reflect on accomplishments in 2016. First, we delivered on our commitment to shareholders by achieving our financial guidance targets and operating the business within those targets that we laid out earlier this year, which made it possible the significant reduced consolidated debt outstanding [tune of about] $145 million in a consolidated basis. We divested our coal business earlier in 2016 and we are ahead of schedule on our run rate cash flow saving. On the operation side specifically, we continue to be pleased with the overall safety and operating performance of our coke and logistic assets and we are able to achieve record results at our Middletown facility. Additionally, we are pleased to have finalized to commissioning our new ship loader at Convent and we're continuing our pursuit of further incremental business which spiked in 2017. And finally, we made meaningful strides to our operating cost reductions at Indiana Harbor and continue to implement our holistic oven rebuild approach for facility. However, when you look at the numbers where we have work ahead, we remain committed to driving long-term performance in Indiana Harbor. With that, I’d like to turn it over to Fay to review our fourth quarter and 2016 results.

Thanks, Fritz, and good morning, everyone. Turning to Slide 4, you can see that quarterly EPS of $0.26 per share was down $0.04 versus the prior year period. This is driven by lower taxes and a larger quarterly 2015 gain on debt extinguishment. Similarly, full-year EPS for 2016 was $0.22 and is up $0.66 over the prior year. Current year benefited from $25 million of gains on debt extinguishment as well as the lapping of impairments and pension plan termination charges in 2015. Consolidated adjusted EBITDA for the fourth quarter was $77.3 million and is up over $20 million due primarily to the recognition of deferred revenue at Convent on take or pay times. This revenue is included in adjusted EBITDA when it is recognized for GAAP purposes, which occurs in the fourth quarter of each year. And again, as Fritz mentioned, we were able to deliver full-year consolidated adjusted EBITDA within our guidance range, finishing the year at $217 million, up $31.6 million year-over-year. Turning to Slide 6 and taking a deeper look at our Q4 adjusted EBITDA result. Indiana Harbor which is in the midst of their oven rebuild initiative was down $5.9 million compared to 2015 due in part to lower volumes. Also impacting the quarter where the take or pay payment to late terminal for 2016 coal handling services, which is an in and out and an SXC consolidated basis. Excluding Indiana Harbor, the remainder of the coke business was impacted by an unexpected turbine failure at our Haverhill facility. This resulted in repair costs as well as lost energy revenue, which was partially offset by business interruption insurance proceeds. The turbine has been repaired and it came back on line in mid-January. Quarterly results also reflect the Brazil related transaction, we announced in the quarter.…

Thanks Fay. And wrapping up 2016, challenging year [indiscernible], but I'm proud of what the team was able to accomplish despite the significant headwinds facing our steel and coal customers particularly in the first half of the year were perfect, but we delivered on a number of critical objectives including meeting or exceeding our headline adjusted EBITDA and operating cash flow guidance particularly in the operating cash flow side [indiscernible] time. Second, reducing debt at the combined enterprise level by over $145 million leaving apparent actually in a net cash position at the end of the year. And finally, completing the Haverhill 1 gas sharing project and finally commissioning our new ship loader and securing new merchant business at our Convent Terminals. While we have worked to do at Indiana Harbor and we did missed our adjusted EBITDA and production guidance targets at that facility. We are committed to furthering our holistic oven rebuild approach to more oven in 2017 with a goal of stabilized performance and driving long-term profitability at the Indiana Harbor plant. Turning to Slide 13 and looking at 2017 now. Our full-year 2017 consolidated adjusted EBITDA guidance was $220 million to $235 million representing a $10 million improvement at the midpoint versus 2016 actual. Domestic Coke is expected to be down $5 million to $10 million compared to 2016 driven principally by the impact of additional oven rebuilds at Indiana Harbor. We also assumes the Middletown performance back to more historical run rate levels from the record levels that we experienced in 2015. In the favorable column, we expect to see higher yield gains and higher coal prices favorable Jewell contracted coal prices versus 2015 and lapping of 2016 items highlighted on the chart. Coal Logistics is expected to be up $3 million to $8 million…

Thanks, Fritz. Turning to Slide 15, in 2017 we expect Domestic Coke adjusted EBITDA excluding Indiana Harbor of $197 million to $202 million. This is driven by similar operating performance as compared to 2016 including over 100% asset utilization, steady coke yields of around 70% and production of between 3.025 tons to 3.05 million tons. As noted on the chart, we again expect to deliver 75,000 tons to low contract max to AKS steel out of our Haverhill facilities, but we will receive take or pay payments to keep SunCoke economically whole. Moving to the next Slide, 2017 adjusted EBITDA guidance for Coal Logistics of $67 million to $72 million. At KRT, we expect the strengthening domestic coal fundamentals just on the back half of 2016 to continue into 2017 helping drive higher volumes product. At Convent, we anticipate that attractive coal export economics will drive increased volume. Our guidance assumes 8 million tons of throughputs between our two take or pay coal customers. We’ve also assumes 500,000 tons of merchant volume running through this facility in 2017. As we continue our pursued of new business in 2017, we except to add barge unloading capabilities at Convent, in order to expand the product offerings and broaden the list to potential future customers. Moving to Slide 17, in 2016, we partnered with experts of A.T. Kearney to help champion a full review of all of our operational sourcing and administrative processes. The Board and Management review encompassed all aspects of the business. Each plant and corporate function was benchmarked and cost and staffing levels in organizational design changes were analyzed to ensure proper burden for all activities. As a result of this project, we identified approximately $10 million in total savings which we expect to drive about $7 million in annual…

Thanks Fay and ramping up of the Slide 22. You just heard in 2017. We're going to remain focused on operational execution, maximizing the capability and performance of our coke and logistics assets and ensuring execution on further rebuild at Indiana Harbor. We continue to make progress of the conflicts committee on the proposed simplification transaction and but we do remain as I said before quite disciplined in that regard. Targeting a potential closing of the transaction in mid of 2017, we are able to reach the agreement with the conflicts committee. And finally, will be focused on executing on our commitment to shareholders by achieving our full-year financial targets that we laid out today. With that, I would like to open it up for Q&A.

[Operator Instructions] Your first question comes from the line of [indiscernible]. Your line is open.

Hi, I am wondering when you think the iPhone 7 come out because I am really decided Apple?

Eli, good morning. This is Fritz Henderson. You are on the SunCoke Energy conference call, and I don’t know anything about the iPhone 7.

Sorry, do you remember what number is for Apple?

No, I don’t. I am sorry.

Sorry about that.

No problem.

Your next question comes from the line of [indiscernible]. Your line is open.

Hey, Fritz good morning. Thanks for taking our call.

Good morning, Adam.

I want to confirm my understanding that something you said earlier which is that you're targeting Indiana Harbor profitability in 2018 is that correct?

Yes.

Got it. And are you able to put a range around what sort of profitability you might expect in 2018?

Not today Adam, as we finalize the work in 2017 and develop our targets for 2018 that's when I’d like to lay those numbers.

Okay. Can you help us understand or put a frame of reference around sort of the bridge from negative $13 million of EBITDA to some sort of profitability, how much of that is from the oven rebuilds and improved performance and how much of that is from the [metal] contract?

I would say it will be combination of three things. One, we do anticipate as we have over half the ovens rebuilt in the plants at that point that production level should rebound from the 900,000 tons. Second, we do continue to be focused on cost discipline. One of the things I mentioned in the 2017 guidance is, we're incorporating the lessons learned from our 2016 rebuild back to the 2015 rebuild. We're going to spend about $5 million in that regard associated with actually making those changes in the 2015 rebuilds in their entirety in 2017. That would not carryover into 2018. So that would be a second swing factor. And then the third swing factor would be the middle contract which comes back to developing budget related O&M reimbursement at the facilities contracted.

Got it. Okay, thank you. That’s very helpful. I have another question if you want to take it.

Sure.

I noticed in the year-over-year bridge for EBITDA performance, 2016 was a little bit lower than 2015 due in part to $3.6 million or $3.5 million of reduced met yield profitability?

Fay, do you want to handle that?

Yes, so you are bridging 2015 to 2016?

Yes.

Yes, and so coke price is that just a function of coal prices and when we put out our guidance in 2015, we had anticipated that we would achieve lower benefit from the coal-to-coke yield would be lower based on coal pricing in 2015 compared to coal pricing in 2016.

In your 2017 budget or you budgeting for getting all that $3.5 million or $3.6 million back. What is your assumption on coal pricing in 2017?

Correct, so as coal price have increased, our 2017 guidance includes the benefit of those – and coke yields of those higher prices.

Yes, we think coke prices should be up about $18; actually they are up $18 year-over-year. And I think on chart, look at the coal profitability chart, but the benefit of the higher coal prices has been factored into the guidance for 2017.

Correct.

Your next question comes from the line of Lee McMillan with Clarkson. Your line is open.

Good morning, everybody. Thanks for taking the question.

Good morning.

Good morning, Lee.

I had a little bit more on Indiana Harbor, looking at kind of the trajectory of where production has gone over the past couple quarters and then the 900,000 for 2017, I'm just curious how you're thinking about a ramp back up to get to that level from the 200,000 in December? Should we assume that Q4 was the low point and we ran from here or is it more or like backend loaded towards the end of 2017?

Q4 is a low point because if you look at the Harbor Q4 results, we had all the ovens out pretty much throughout that quarter in addition to obviously the performance of the ovens that have been rebuilt. They pretty much stay the same. So what we anticipate in 2017 is couple things, one, we’re obviously going to be doing more ovens, but we'll be doing them, I mean our game plan at this point is actually be doing the more readably through the year rather than in one quarter. So you would be seeing it in each quarter, but fourth quarter 2016 would be a low point.

Okay, got it. And then for the $13 million EBITDA loss guidance for 2017 there, I didn’t see the actual for 2016. Was that in presentation?

It was actually.

Yes. So we say it’s $4.2 million lower than the prior year. Yes, favorable versus the prior year, so it’s around – it’s a loss of around $3 million.

Okay. And then last one, I think you said that Haverhill turbine came back up in mid January. Should we assume any Q1 impact or no?

I would say small, but I think the impact is largely behind us at this point.

Okay, great. Thanks.

Thanks.

Your next question comes from the line of Lucas Pipes with FBR & Company. Your line is open.

Hey. Good morning, again. I have a higher level question. On Slide 15, you show the Domestic Coke production. And it shows a modest decline going back to 2013, 2014 when the range excluding Indiana Harbor bit closer to 3.2 million tons and including Indiana Harbor I thought if historically SunCoke on a consolidated basis being a producer of roughly 4.3 tons or so. And I was wondering what accounts for this decline. There seems to be much healthier sentiments surrounding this steel market, so what would it take to get back to 3.2 million tons and hopefully on a consolidated basis pushing that 4.3? Thank you.

As Fay outlined the chart, in 2016, we did turn down for rate case deal about 75,000 tons, the [indiscernible] O&M reimburse were adjusted to make us full. Our guidance for 2017 has been done on a carryover basis, so we basically assume similar arrangement would be made. And I would say with respect to AKS production, I mean the Ashland facility remain idle and what I would say is when we look at I mean let me just discuss your point directly. When you look at the sentiment around respectively, what might happen with our customers, it's true. I mean there is certainly a better overall sentiment with respect to the outlook for steel demand and production therefore respectively, but if you look at the actual operating rates Lucas today, I mean they're pretty much similar to what we've been running at in the third and fourth quarter of 2016 and we've developed our guidance basically assuming that we're to continue.

Got it. Okay. And I mean SunCoke capacity has been coming out of the market over the last couple years. How would you assess SunCoke’s opportunity to take for the market share?

So capacity has been coming out. One of the things we're going to watch very carefully through the year and not just 2017, but in the 2018 is what happens with aggregate steel demand and operating rate in the blast furnaces themselves. As I look at the environment today to say what's your ability to improve share or take share if operating rate stay where they are today, obviously we’ve to see what happens with other capacity, but we feel good about our contract renewals that come up in 2020 at both our Jewell and our Haverhill facility. But I would say your opportunity to grow share from here if operating rates stay where they are is modest. If we see an uptick in operating rates from things like infrastructure build for example, not only does that make us even more optimistic about our contract renewals, but we do have as you could see in the chart, we have 100,000 to 200,000 tons of additional capacity that we can bring on line from the facilities that you see on Page 15. So we would be very pleased to be able to ramp our plant back up.

All right. Thank you very much.

You’re welcome.

[Operator Instructions] Your next question comes from Philip Gibbs with KeyBanc. Your line is open.

Good morning, Fritz. How are you?

Good. Phil, how about you?

Doing well. A question on the coal prices up $18 a ton year-over-year in 2017, is that the implied input cost upside for your Coke business which is largely tolling or the implied coal pricing in your coal sales?

On the tolling side, we don't sell any coal any longer.

Okay. And with some of your comments to do more of the ovens in terms of the rebuilds at Indiana Harbor that any of that have to do with our metals decision to restart one of the blast furnaces in the fall or did you have that in the plans prior to that?

We will be encouraged that we see additional blast furnace production come on stream, but the rebuild plan is really been something we've been focused on over the last several years and the 53 that we've outlined for 2017 has been they for us to some time.

Thanks very much.

You're welcome. End of Q&A

And we have no further questions at this time. I turn the call back over to the presenters.

Thank you. Thanks for everybody joining. I must say it’s the first time I’ve ever taken a phone call on the iPhone 7. So that was an interesting question. But appreciate everybody from SunCoke both analysts and investors joining us for the call and for your investment in the SunCoke. Thank you.

This concludes today's conference call. You may now disconnect.