Suncoke energy partners, l.p. announces third quarter 2016 results
Lisle, ill.--(business wire)--suncoke energy partners, l.p. (nyse: sxcp) today reported results for the third quarter 2016, which reflect the impact of scheduled outages and lower sales volumes, partially offset by the absence of deal costs, which were incurred in the prior year period. "we continue to perform in line with expectations and remain on track to deliver against our 2016 adjusted ebitda guidance of $207 million to $217 million underpinned by our strong cokemaking performance," said fritz henderson, chairman, president and chief executive officer of suncoke energy partners, l.p. during the quarter, both major convent marine terminal ("cmt") customers reached resolution with their respective lending groups. in addition, as announced earlier this week, convent is expanding into a new line of business by piloting domestic-facing thermal coal volumes through the terminal on a merchant basis. henderson continued, "we applaud the milestones our cmt customers reached with their lenders and are working side-by-side with them to maximize the value our terminal can bring to their operations. we are also quite pleased about the domestic thermal coal pilot we announced earlier this week and look forward to proving out our domestic-facing capability with the goal of securing additional merchant volumes." third quarter results(1) (dollars in millions) revenues were $185.5 million in third quarter 2016, a decline of $24.7 million from the same prior year period. the decline was primarily due to the pass-through of lower coal costs and lower sales volumes. net income attributable to sxcp was $21.3 million, an increase of $1.8 million compared to the prior year period, primarily due to fair value adjustments to our contingent consideration obligation, mostly offset by the items discussed below. adjusted ebitda decreased $5.0 million primarily due the impact of scheduled outages in the current year period as well as lower sales volumes in both our cokemaking and logistics operations. as a reminder, adjusted ebitda results exclude coal logistics deferred revenue until it is recognized as gaap revenue, which is at the end of the annual contract period, or typically in the fourth quarter of each year. third quarter segment information domestic coke domestic coke consists of cokemaking facilities and heat recovery operations at our haverhill, middletown and granite city cokemaking facilities, located in franklin furnace and middletown, ohio, and granite city, illinois, respectively. (dollars in millions, except per ton amounts) revenues were affected by the pass-through of lower coal prices and a decrease in sales volume of 20 thousand tons due partially to the customer volume accommodations at haverhill. the impact of customer volume accommodations on adjusted ebitda was mitigated by make-whole payments from ak steel. adjusted ebitda decreased $3.7 million to $42.9 million in third quarter 2016, primarily due lower energy sales related to scheduled outages as well as the timing of sales volumes. coal logistics coal logistics consists of the coal handling and mixing services operated by sxcp at cmt located on the mississippi river in louisiana, lake terminal in east chicago, indiana, and kanawha river terminals, llc ("krt"), which has terminals along the ohio and kanawha rivers in west virginia. the current and prior year periods are not comparable due to the contribution of cmt, which was acquired on august 12, 2015. (dollars in millions, except per ton amounts) revenues were down $3.1 million, driven by lower volumes at krt and lake terminal, partly offset by a full quarter of cmt results, which contributed $1.3 million in additional revenues as compared to the prior year period. adjusted ebitda was down $2.3 million, driven by lower sales volumes discussed above. despite a full quarter of operations, adjusted ebitda contributed by cmt was flat as compared to the prior year, driven by a full quarter of operating costs on only slightly higher volumes. as a reminder, adjusted ebitda results exclude coal logistics deferred revenue until it is recognized as gaap revenue, which is at the end of the annual contract period, or typically in the fourth quarter of each year. corporate and other corporate and other costs decreased $1.0 million to $4.2 million for the three months ended september 30, 2016 compared to $5.2 million in the same period of 2015, primarily due to acquisition and business development costs incurred in the prior year period, partially offset by current period mark-to-market adjustments in deferred compensation caused by increases in the partnership's unit price and higher legal expense. related communications we will host our quarterly earnings call at 10:00 a.m. eastern time (9:00 a.m. central time) today. the conference call will be webcast live and archived for replay in the investors section of www.suncoke.com. investors may participate in this call by dialing 1-866-393-4306 in the u.s. or 1-617-826-1698 if outside the u.s., confirmation code 89771946. suncoke energy partners, l.p. suncoke energy partners, l.p. (nyse: sxcp) is a publicly traded master limited partnership that manufactures high-quality coke used in the blast furnace production of steel and provides export and domestic coal handling services to the coke, coal, steel and power industries. in our cokemaking business, we utilize an innovative heat-recovery technology that captures excess heat for steam or electrical power generation and have long-term, take-or-pay coke contracts that pass through commodity and certain operating costs. our coal handling terminals have the collective capacity to blend and transload more than 35 million tons of coal each year and are strategically located to reach gulf coast, east coast, great lakes and international ports. sxcp’s general partner is a wholly owned subsidiary of suncoke energy, inc. (nyse: sxc), which has more than 50 years of cokemaking experience serving the integrated steel industry. to learn more about suncoke energy partners, l.p., visit our website at www.suncoke.com. definitions adjusted ebitda represents earnings before interest, (gain) loss on extinguishment of debt, taxes, depreciation and amortization, adjusted for coal logistics changes to our contingent consideration liability related to our acquisition of the cmt and the expiration of certain acquired contractual obligations. adjusted ebitda does not represent and should not be considered an alternative 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 of the operating performance and liquidity of the partnership's net assets and its ability to incur and service debt, fund capital expenditures and make distributions. 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 and liquidity. ebitda and adjusted ebitda are not measures calculated in accordance with gaap, and they should not be considered an alternative to net income, operating cash flow or any other measure of financial performance presented in accordance with gaap. adjusted ebitda attributable to sxcp equals adjusted ebitda less adjusted ebitda attributable to noncontrolling interests. distributable cash flow equals adjusted ebitda plus sponsor support and coal logistics deferred revenue; less net cash paid for interest expense, ongoing capital expenditures, accruals for replacement capital expenditures and cash distributions to noncontrolling interests; plus amounts received under the omnibus agreement and acquisition expenses deemed to be expansion capital under our partnership agreement. distributable cash flow is a non-gaap supplemental financial measure that management and external users of sxcp's financial statements, such as industry analysts, investors, lenders and rating agencies use to assess: sxcp's operating performance as compared to other publicly traded partnerships, without regard to historical cost basis; the ability of sxcp's assets to generate sufficient cash flow to make distributions to sxcp's unitholders; sxcp's ability to incur and service debt and fund capital expenditures; and the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities. sxcp's operating performance as compared to other publicly traded partnerships, without regard to historical cost basis; the ability of sxcp's assets to generate sufficient cash flow to make distributions to sxcp's unitholders; sxcp's ability to incur and service debt and fund capital expenditures; and the viability of acquisitions and other capital expenditure projects and the returns on investment of various investment opportunities. we believe that distributable cash flow provides useful information to investors in assessing sxcp's financial condition and results of operations. distributable cash flow should not be considered an alternative to net income, operating income, cash flows from operating activities, or any other measure of financial performance or liquidity presented in accordance with gaap. distributable cash flow has important limitations as an analytical tool because it excludes some, but not all, items that affect net income and net cash provided by operating activities and used in investing activities. additionally, because distributable cash flow may be defined differently by other companies in the industry, our definition of distributable cash flow may not be comparable to similarly titled measures of other companies, thereby diminishing its utility. ongoing capital expenditures (“capex”) are capital expenditures made to maintain the existing operating capacity of our assets and/or to extend their useful lives. ongoing capex also includes new equipment that improves the efficiency, reliability or effectiveness of existing assets. ongoing capex does not include normal repairs and maintenance, which are expensed as incurred, or significant capital expenditures. for purposes of calculating distributable cash flow, the portion of ongoing capex attributable to sxcp is used and includes capital expenditures included in working capital at the end of the period. replacement capital expenditures (“capex”) represents an annual accrual necessary to fund sxcp’s share of the estimated costs to replace or rebuild our facilities at the end of their working lives. this accrual is estimated based on the average quarterly anticipated replacement capital that we expect to incur over the long term to replace our major capital assets at the end of their working lives. the replacement capex accrual estimate will be subject to review and prospective change by sxcp’s general partner at least annually and whenever an event occurs that causes a material adjustment of replacement capex, provided such change is approved by our conflicts committee. forward-looking statements some of the statements included in this press release constitute “forward-looking statements.” forward-looking statements include all statements that are not historical facts and may be identified by the use of such words as “believe,” “expect,” “plan,” “project,” “intend,” “anticipate,” “estimate,” “predict,” “potential,” “continue,” “may,” “will,” “should” or the negative of these terms or similar expressions. forward-looking statements are inherently uncertain and involve significant known and unknown risks and uncertainties (many of which are beyond the control of sxcp) that could cause actual results to differ materially. such risks and uncertainties include, but are not limited to, domestic and international economic, political, business, operational, competitive, regulatory, and/or market factors affecting sxcp, as well as uncertainties related to: pending or future litigation, legislation or regulatory actions; liability for remedial actions or assessments under existing or future environmental regulations; gains and losses related to acquisition, disposition or impairment of assets; recapitalizations; access to, and costs of, capital; the effects of changes in accounting rules applicable to sxcp; and changes in tax, environmental and other laws and regulations applicable to sxcp’s businesses. forward-looking statements are not guarantees of future performance, but are based upon the current knowledge, beliefs and expectations of sxcp management, and upon assumptions by sxcp concerning future conditions, any or all of which ultimately may prove to be inaccurate. the reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. sxcp does not intend, and expressly disclaims any obligation, to update or alter its forward-looking statements (or associated cautionary language), whether as a result of new information, future events or otherwise after the date of this press release except as required by applicable law. sxcp has included in its filings with the securities and exchange commission cautionary language identifying important factors (but not necessarily all the important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement made by sxcp. for information concerning these factors, see sxcp’s securities and exchange commission filings such as its annual and quarterly reports and current reports on form 8-k, copies of which are available free of charge on sxcp’s website at www.suncoke.com. all forward-looking statements included in this press release are expressly qualified in their entirety by such cautionary statements. unpredictable or unknown factors not discussed in this release also could have material adverse effects on forward-looking statements. the following tables set forth financial and operating data for the three months ended march 31, 2016 and 2015:
