Good morning. My name is Sean, and I will be your conference operator today. At this time, I would like to welcome everyone to the SunCoke Energy Third Quarter 2016 Earnings Conference 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, please go ahead sir.

Thanks, Sean. Good morning and thank you for joining us to discuss SunCoke Energy's third quarter 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. With that, I'll turn it over to Fritz.

Thanks, Kyle, and thank you all for joining us this morning. Starting off on Slide 3 where I share a few perspectives on the quarter. In our cokemaking fleet similar to what we saw in the first end of second quarter of this year, we continue to achieve solid safety, environmental and operating performance across the fleet and on track for performance in line with our target for 2016. Middletown particularly has had a very good year, is on track for record year. At Indiana Harbor, we continue to see meaningful improvement attraction in the area of cost control and with operations and maintenance spend year-over-year favorable and we’ve recently begun our 2016 oven rebuilds here in the fourth quarter. On logistics front, we saw a modest improvement over our Q2, a sequential improvement over our Q2 logistics volumes, but overall volumes remain below our target. We were encouraged by recent developments across the logistics fleet. Actually as we look into the fourth quarter at KRT as well as at Convent Marine Terminal, and I’m going to touch on it a bit more later in the call. From a capital allocation perspective, we continued our deleveraging efforts and reduced debt outstanding by over $25 million on a consolidated basis in the quarter, including $20 million repayment of our revolver SXC, leaving the parent in a positive net cash debt position. And so, we feel good about what was achieved at both the MLP as well as at the parent in the quarter. And finally, we’re reaffirming today with nine months in the books our adjusted EBITDA guidance of $210 million to $235 million for 2016 based upon the stability of our business model and our take or pay contract. A few thoughts in the next chart on market conditions. Most…

Thanks, Fritz, and good morning everybody. For the third quarter consolidated adjusted EBITDA of $49.4 million is flat to 2015 as cost improvements at Indiana Harbor and lower costs due to the divestiture of our coal business were offset by lower coke and coal logistic volumes as well as the impact of scheduled outages. Before moving forward and as a reminder, our adjusted EBITDA results excludes coal logistics deferred revenue, which in response to the new SEC guideline is recognized in adjusted EBITDA when it is recorded as revenue under GAAP accounting, in our case, typically by December 31st of each year. Deferred revenue in the third quarter was $8.8 million. From an EPS perspective, earnings were $0.10 per share, up $0.46 versus the prior year. The comparison to the prior year is impacted by the lapping of a $0.30 per share impairment loss on our India joint venture that occurred in the prior year. Turning to the next slide and looking at our adjusted EBITDA results. You can see the $3 million performance improvement at Indiana Harbor that was driven by disciplined cost management, but was partially offset by lower volumes and yields. Fritz will discuss Indiana Harbor in more detail on later slides. Excluding Indiana harbor, the remainder of the coke business was impacted by several items including lower volumes due primarily to the timing of shipments, lower energy sales as a result of scheduled outages primarily at Haverhill, the timing of O&M spend at Jewell and $1 million of coal transportation costs that were shifted from coal mining to Jewell Coke. Moving on from coke, our corporate segment benefited from the lapping of severance cost and Convent deal costs, which were recognized in Q3 of 2015, but was offset by higher stock compensation expense that was driven by favorable changes in our stock price during the quarter. At coal logistics, the $44.3 million contribution from our Convent facility was comparable to Q3 2015 and KRT and Lake Terminal were impacted this quarter by lower throughputs. Volumes across all terminals remain below expectations, but we expect a sequential improvement in volumes in the fourth quarter. And finally, we continue to benefit from the divestiture of our coal mining business and realized a $3.3 million in cost savings as a result. Looking at Slide 7 on our Domestic Coke business, we delivered solid second quarter adjusted EBITDA per ton of $52 and about 1 million tons of production. While our quarterly results were impacted by the previously mentioned factor, factors including continued cost improvement at Indiana Harbor, the timing of coke sales and lower energy sales, we remain in line with expectations and are on track to achieve strong coke adjusted EBITDA results in 2016, which are underpinned by a record performance at Middletown. I’ll now turn it back over to Fritz to provide some additional comments on Indiana Harbor.

Thanks Fay. As I mentioned earlier Indiana Harbor continues to realize the benefits of a holistic cost management approach as netted us about $13 million and O&M improvement year-to-date and was a driver of improvements in the third quarter versus third quarter of 2015. However as I discussed in the second quarter we continue to experience operational disruption driven partially by higher than expected oven degradation across non-rebuilt ovens at the plant. Looking at oven rebuilds after evaluating the quarter data from our oven rebuild program from 2015, we remain encouraged by the sustained performance across the 48 ovens we rebuilt last year. We continue to analyze the monitor results and we incorporated our learnings from those ovens rebuilt into the 2016 rebuilds, which are underway here in October. This waiver rebuilds will be targeted across our C battery. Indiana Harbor plant has four batteries: A, B, C and D. And we are targeting the Lion's share of our rebuild activity on the C battery this year and will be done in distinct blocks of ovens with each block being taken out entirely out of service, excuse me, in order to perform the rebooking [ph] in the walls and the floors. Between capital and expense in total we expect to spend about $15 million on those 38 ovens. Moving forward and as we wrap up the 2016 rebuilds, we will continue to optimize scope and incorporate lessons learned into our 2017 capital plans, which we anticipate will include a substantial amount of oven rebuilds at the harbor and we will provide an update on this when we provide our 2017 guidance and targets. At this point, I would like to turn it back over to Fay.

Thanks Fritz. Looking at Slide 9, in the quarter we have sequentially higher coal logistics volumes. However, we were below our targeted run rate. On the domestic coal logistics side, low natural gas prices and high inventories push volumes down in the first half of the year, but with the favorable natural gas price movements and warmer summer weather, especially in the south, volumes increased over Q2. On the met coal side, higher inventories drove lower than expected volumes, but the recent upswing and prices should encourage additional volume in Q4. At Convent, we earned $4.3 million of adjusted EBITDA in the period on 841,000 inbound tons. As I mentioned on a previous slide, these results do not includes the $8.8 million of deferred revenue earned for pay tons in the quarter. While we saw below target volumes at CMT, we are encouraged by the continued rise in API2 prices and expect sequential improvement in volumes in the third quarter.

Fourth quarter…

I am sorry, in the fourth quarter. On Slide 10, we have a few recent developments at Convent that we wanted to highlight. First, we are excited to announce the piloting of a new line of business at CMT. We have engaged a U.S. based utility to move volume through Convent for the domestic thermal coal market. While the first trains have just recently arrived at the terminal, we expect the fourth quarter opportunity to be between 50,000 to 100,000 tons and look forward to proving out our domestic facing capabilities with a goal of securing additional merchant volumes. Secondly, we’re in the process of commissioning our new ship loader and expect it will be fully operational by the end of November. With the new machinery in place, our annual transloading capacity will increase to 15 million tons per year, which positions us well as we continue to develop additional lines of business and pursue new customer relationships. Lastly, we’ve reached an agreement with Murray and Foresight to provide some volume based incentives in the form of ancillary revenue rebates in exchange for a limited one year contract extension, these rebates, which phase out as API2 prices rise, and are only in place for 2016 and 2017. Our intent is to incentivize our customers to ship more coal during periods of low API2 prices. Most importantly this arrangement does not impact your base take or pay volumes or rates and there is no change to our full-year 2016 CMT adjusted EBITDA guidance. Looking at liquidity on Slide 11, we ended the quarter with nearly $300 million of consolidated liquidity, including $105 million of cash and more than $190 million of combined revolver availability. In the quarter, over $40 million of operating cash flow was used primarily to pay down debt and to fund CapEx and distributions to SXCP unitholders. Excluding outstanding letters of credit, SXC has now fully repaid all borrowings under its revolving credit facility. Moving on to Page 12, we're looking at capital deployment through the first three quarters of the year on this slide. And as you could see, we have generated very strong operating cash flow of over $166 million year-to-date. And it put that cash flow towards value enhancing actions including divesting of our coal mining business, funding targeted investments at our operating facilities and repurchasing a significant amount of debt at a discount. Additionally as I just mentioned, we entirely repaid the SXC revolver through the first three quarters of the year and now maintain cash in excess of a remaining debt at SXC. With that I will turn it back to Fritz.

Thanks Fay. I am wrapping up on Slide 13. Continue to adapt to the headwinds, challenges and changes that are faced by our industry and our customers on a daily basis. We’re seeing significant improvements however in the underlying industry and customer dynamics than what we saw earlier in the year. We are mindful however of the risks that remain in the business. And so I think the important thing is to be flexible and responsive and that's what we've been focused on in 2016. We are particularly pleased with the recent milestones that each of our two CMT customers reached in the quarter. From an operations perspective, we remain focused on improving performance of our Indiana Harbor Coke plant and the 2016 oven rebuilds have started here in the fourth quarter is another step in that direction and the journey to bringing Indiana Harbor toward [indiscernible]. We look to continue to deliver on our track record of strong operational, safety and environmental performance across the rest of the cokemaking fleet. And we're excited about the opportunities we have in front of us at CMT and in our other logistics assets. And lastly, we're on track to achieve our consolidated 2016 financial guidance and deleveraging targets and remain focused on delivering these commitments to shareholders. With that I would like to turn it over to Q&A. Thank you.

[Operator Instructions] Your first question comes from the line of Lucas Pipes with FBR & Co. Your line is now open.

Hey, good morning again.

Hi, Lucas.

Fritz just a quick follow up on Indiana Harbor. It sounds like things are maybe tent – well, at this point tentatively moving in the right direction. I just wondered if you could follow up on how quickly you think we're going to get more data on this and when you will make a final assessment and ultimately where you see that performance on an EBITDA basis at Indiana Harbor longer-term?

So, we'll talk about the Indiana Harbor in 2017 and longer-term, when we publish our targets for next year. What I would say is, when I step back and look objectively at 2016’s performance, I think about a year ago when it was clear that we weren't – I didn't feel we were going in the right direction at Indiana Harbor, we took a number of actions, I mean a number of changes. One of which is to be more holistic in our evaluation of the plant. And secondly is to make sure that we stop and monitored our performance and gathered data, so that as we took action we did it in a more measured way. And that manifests itself in two ways this year in terms of the Indiana Harbor’s performance. One, what you've seen is improved O&M because I think we've been much more disciplined, we’ve been very disciplined in terms of the cost management of the plant. Second is we've doubled basically the ovens we intended to rebuild from that which we'd actually identified earlier this year when we enter 2016. So instead of doing the 19 ovens that we’d originally planned, we’ve doubled it because we've been encouraged by the results we've seen with the ovens, the 48 ovens we rebuilt last year. That being said, we took the lessons learned because while we've been pleased with our performance, there are areas where we can continue to improve. And so we factor that lesson learned into the 38 ovens we’re rebuilding. And then we'll make an assessment as we measure the performance of the ovens we're rebuilding in 2016 and we'll make a final call as to what we want to do in 2017. I do anticipate a significant rebuild activity in 2017, but we'll…

All right, I look forward to that. And then maybe shifting gears and this is really more of a big, big picture question. But when you look across the assets at SXC versus SXCP, how do you think about this current dual structure to listings? What do you think could maybe make sense longer-term? You've got out of coal earlier this year. Any vision there for how these entities should go forward?

So our board obviously just continuously evaluate your structure, in this case obviously the MLP structure is something that the board will regularly look at. I would say we don't have anything to announce today. But I would say when you look at it, we have been encouraged by the improvement in yields at the MLP and it’s basically been from the price going from the low fives to where it is today. But nonetheless when you look at the absolute level of yields at the MLP, it’s not a cost effective financing vehicle for us, so it is an MLP that’s what it is to finance growth. So I would say this is something the board will continually look at as part of the – board will continually look at as part of the – continuously looking at the business and we'll update investors as appropriate.

And Fritz, when you say that even the current yield does not an effective, what would be an alternative?

Well, when I say the current yields not effective, it’s just look at it where it is. You can't really do drop down transactions that could be accretive and attractive to the parent. You can't use it to finance the growth project. And so, one alternative is obviously wait to see how things correct, but I would say many companies – no, I wouldn’t say many, but a number of companies in the MLP space are in our position and are evaluating the cost effectiveness of their MLPs respectively. Beyond that I'm just not prepared to comment.

All right, well, I appreciate that and good luck with everything. Thanks.

Thank you.

[Operator Instructions] And there are no further questions. I turn the conference back to the presenters.

Okay. Thank you very much for your time this morning and your interest in and investment in SunCoke Energy. Thank you.