SunCoke Energy, Inc. (SXC) Q4 2017 Earnings Report, Transcript and Summary

Good morning. My name is Kelly and I will be your conference operator today. At this time, I would like to welcome everyone to the SunCoke Energy Q4 2017 Earnings and 2018 Guidance 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. Jonathan Law, Vice President, Strategy Investor Relations, you may begin your conference.

Thank you. Good morning, and thank you all for joining us to discuss SunCoke Energy's fourth quarter and full year 2017 earnings. With me are Mike Rippey, our new President and Chief Executive Officer and Fay West, Senior Vice President and Chief Financial Officer. Following management's prepared remarks, we will 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 there later today. 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 things over to Mike, let me remind you that the various remarks that we make on today’s call regarding future expectations constitute forward-looking statements. The cautionary language regarding forward-looking statements in our SEC filings apply to the remarks we make today. These documents are available on our Web site, as are reconciliations to any non-GAAP financial measures discussed on today's call. With that, I'll now turn things over to Mike.

Thanks Jonathan. And thank you for joining us this morning. Let me start by saying I'm excited to be leading SunCoke. The management team and the Board have grown SunCoke over the past several years, and have also endured their share of challenges. Through it all have positioned SunCoke for the success that it enjoys today. I look forward to continuing to enhance our existing operations, while formulating a strategy that will position the company for further success in 2018 and beyond. In terms of my background, I spent my entire career in the steel industry, it’s a challenging industry to be sure, but an industry in which I believe companies can enjoy great success. The overall economic climate for the domestic steel market and our customers has shown improvement over the past year, and I'm optimistic that the fundamentals will continue to do so. High regard for this company and its people are major reasons that I chose to join SunCoke. The company has very strong business fundamentals. Our coke business is integral and blast furnace steel making and this team has a proven track record of successfully growing the logistics business. My first 60 days as CEO, I've had the opportunity to meet our leaders and have spent significant time at all of our domestic operations. I'm impressed by the passion that our teams have for our business, their knowledge of our customers and their dedication to our company. It's because of these teams and their commitment that we can produce coke and move material day-in and day-out to valued partner in the steel and global logistics supply chain. That being said, I did not take this job to simply stand still. As we move forward, we will adapt and change to improve performance, optimize our assets and ultimately, grow our company. These broad goals remain relatively unchanged, and I will have more to say on our long term strategy later this year. Before I turn things over to Fay to discuss our results for 2017 in detail and share our 2018 outlook, I’d like to take a step back and review the team’s various achievements on slide three. These items were previously communicated to you, our investors, as SunCoke key initiatives in 2017. As we look at our two primary financial measures, adjusted EBITDA and operating cash flow, we delivered strong results across both measures. 2017, our commercial group worked towards diversifying the customer base and product mix in our logistics business. And we’re successful in delivering $1.5 million of CMT new business wins. Wins represent a nice start toward our goal of $5 million to $10 million of incremental EBITDA at Convent in the next few years. And also a signal to the market, we are ready, willing and most importantly, able to expand our footprint on the lower Mississippi. Fay and team successfully refinanced our capital structure in 2017, including restructuring our revolving credit facilities at both SXC and SXCP, which refinancing provided a significant extension of our debt maturities of more than four years, increasing the weighted average maturity, our debt to nearly seven years remaining on a consolidated basis. Importantly, our new structure provides us the flexibility to execute our growth and capital allocation priorities going forward. Indiana Harbor, we successfully completed the 2017 rebuild campaign, rebuild ovens are performing to our expectations. 2017 campaign came in on budget, although we experienced a time delay of roughly three weeks, we felt short of our financial target this year, primarily due to faster than anticipated degradation of our non-rebuild A and B battery ovens in November and December. Degradation was much greater than originally anticipated and the loss production related to this degradation not only reflected in our current results but also impacts our 2018 outlook, which I’ll cover later in this presentation. And finally, on the simplification transaction. The team remained price disciplined during the negotiations. And as previously announced earlier this year, was unable to reach agreement with the SXCP conflicts committee. However, we do continue to believe in strategic rationale of the transaction, including the immediate cash flow accretion, synergies between the two entities, driven by tax and cost efficiencies and the increased flexibility for a consolidated SunCoke, pursue a broader set of M&A target without the MLP qualifying income limitations. All-in-all, our teams were successful in achieving the majority of our 2017 initiatives, and our strong consolidated 2017 financial results reflect these accomplishments. I’ll be back later in the call to discuss our plan and outlook for 2018. And with that, I’ll turn things over to Fay, to review our fourth quarter and full year financials. Fay?

Thanks Mike. Good morning everyone. Turning to slide four. As you can see, fourth quarter and full year EPS were $2.05 per share and $1.88 per share respectively and reflect the impact of recent tax reform. I’ll have more to say about this and other EPS impacts in a few slides, but the revaluation of our deferred tax items resulted in an income tax benefit attributable to SXC of approximately $125 million in the fourth quarter. Consolidated adjusted EBITDA for the fourth quarter was $69.5 million. In 2017, CMT achieved record volumes, which resulted in the recognition of higher revenues throughout the year. Therefore, our deferred revenue recognition on take or pay volume shortfalls in the fourth quarter of 2017 was lower than the fourth quarter of 2016. Excluding these deferred revenue timing impacts, fourth quarter results were $7.3 million higher versus fourth quarter of 2016. On a full year basis, we delivered adjusted EBITDA of $234.7 million, which was at the very top end of our 2017 guidance range, and up significantly compared to 2016. Turning to slide five and looking at key tax reform items and the anticipated impact to SunCoke. On the left hand side of this chart, you can see that we've listed a few key provisions from the new tax code and the expected impact to SunCoke. Given that this legislation was enacted during 2017, we were required to revalue all U.S. deferred income tax assets and liabilities on our balance sheet from the previous corporate tax rate of 35% to the new tax rate of 21%. Based on the new 21% corporate tax rate, the revaluation of SXC’s deferred tax items resulted in a fourth quarter income tax benefit attributable to SXC of approximately $125 million. On the right side of the slide, you can see our projection of the expected average annual cash tax benefits to SXC, which is based on currently available information and management's assumption for future years. We do not anticipate a meaningful difference in our average cash taxes in the near term. This is primarily due to the expected timing of the utilization of tax credit. Prior to the changes in tax law, we were expecting to utilize the majority of our tax credits by the end of 2019. We now expect those tax benefits to extend beyond 2019, which offset the benefit of a lower corporate tax rate. However, in 2020 through 2027, we anticipate a meaningful cash tax benefit of approximately $15 million annually. This is driven primarily by the corporate rate cuts. Turning now to slide six and looking at our EPS loss for the quarter and the full year. Looking first at the quarter, Q4 2017 EPS of $2.05 per share was up significantly and was driven primarily by the $125 million income tax benefit attributable to SXC that I just discussed. This benefited EPS by $1.91 per share. You can also see that the $0.10 quarterly impact related to the timing of deferred revenue recognition was partially offset by improved results in Q4 of 2017. Full year EPS of $1.88 per share also includes the favorable impact of tax reform, as well as $0.17 benefit from higher adjusted EBITDA and the absence of impacts related to our 2016 coal mining divestiture. Partially offsetting these benefits were the impacts from our debt extinguishment activities in both 2016 and 2017. 2016 included $25 million gain from repurchasing debt at a significant discount to par, whereas 2017 includes the impact from our refinancing activities, including the write off of debt issuance cost. Turning now to our adjusted EBITDA performance on slide seven. Fourth quarter 2017 adjusted EBITDA was $69.5 million compared to $77.3 million in Q4 of 2016. Indiana Harbor, which continues its oven rebuild initiatives, was down $0.9 million when compared to 2016 due to an increase in O&M costs, which were offset partially by improved production from rebuild ovens. Excluding Indiana Harbor, the remainder of our coke assets were up slightly in 2017. Turning to our Logistics segment. Excluding the timing impact of our deferred revenue recognition, you can see that we were up nearly $5 million versus Q4 of 2016. This increase was driven largely by a significant increase in base volumes in the quarter and a slightly higher per ton rate on our base take or pay volumes in 2017. KRT was down $2.4 million due to lower volumes, which was driven by lower customer demand. When you add the $3 million benefit from our corporate and other segment, you can see that our fourth quarter 2017 results were up $7.3 million when excluding deferred revenue. Lastly, we had $15.1 million of lower deferred revenue recognized in Q4 2017 compared with Q4 2016. As a reminder, deferred revenue relates to take or pay shortfalls at our Convent facility and is recognized in adjusted EBITDA when it is recorded into GAAP revenue, typically at the end of each year. Because CMT posted record volumes in 2017, we incurred less take or pay volume shortfalls throughout the year, and instead recognized higher GAAP revenue and EBITDA on actual volumes during the year. This led to a lower revenue true up at the end of 2017 compared with 2016. Flipping to our full year adjusted EBITDA bridge on slide eight. We see that full year 2017 adjusted EBITDA was $234.7 million, up nearly $18 million or more than 8% compared to $217 million of adjusted EBITDA in 2016. Looking across our entire coke business, we were down slightly about 1.5%. Breaking that down further, Indiana Harbor was down $15.4 million compared with 2016, due mostly to two factors; first, we incurred higher O&M due to a greater number of oven rebuild taking place in 2017 compared with 2016; we also incurred additional cost to apply lessons learned to our original 2015 rebuild. These additional costs were contemplated in our 2017 guidance but nonetheless, impacted results when compared with 2016. The second impact to our 2017 Indiana Harbor results was production. As part of our plan, we anticipated lower production in 2017 as we rebuilt 20 more ovens this year than we did in 2016. As Mike mentioned, we also spent a bit of additional time in the fourth quarter completing the remainder of our 2017 oven rebuilds, which was not contemplated in our original guidance. This impacted volumes as we were not able to reap the increased productivity of our newly built ovens for as long as we had originally anticipated. Finally, in our 2017 business plan, we contemplated a certain degradation rate across our non-rebuild ovens. But in November and December, we experienced higher than expected degradation across our A battery and B battery ovens. Moving on, the rest of our coke making fleet was up $12.4 million or nearly 6% versus 2016. About $8 million of this increase was due to favorable operating performance. Yield outperformance contributed about $6.1 million of this increase and $2 million of the increase was from our Brazil Coke operation, which had a record production year. Also contributing to the year-over-year increase were $4.4 million of one-time benefits. Logistics was up $6.9 million based on significant improvement in CMT base volumes and a higher rate per ton. Also contributing to the increase was $1 million of incremental new business. Finally, our corporate and other segment was favorable by $13.8 million, which included $3.3 million benefit from our cost saving initiatives. Also contributing to the year-over-year favorability was the impact of coal mining operations, which were disclosed off in April 2016. Current year results for legacy coal were in line with expectations. All-in-all, we ended the year with adjusted EBITDA of $234.7 million. Turning to our domestic coke results on slide nine. As you can see from the chart, fourth quarter adjusted EBITDA was $39.6 million and adjusted EBITDA per ton was $41. Both metrics were up compared to the fourth quarter of 2016. On a full year basis, domestic coke adjusted EBITDA of $188.9 million and adjusted EBITDA per ton of $49 were both up at the top end of our guidance ranges. These figures include all of our domestic operations, including the EBITDA impact of Indiana Harbor results. Moving to the next slide. Our Logistics business generated $35.1 million of adjusted EBITDA during the fourth quarter. CMT contributed $29.5 million on significantly higher volume. We’ve seen continued stabilization of coal transloading market here in the U.S. with current API to pricing supporting healthy export margins. However, our KRT volumes were lower in the fourth quarter due to lower customer demand. On a full year basis, logistics delivered adjusted EBITDA of $70.8 million, up $6.9 million or nearly 11% from 2016. This improvement was due to record CMT volumes, the highest ever recorded at this facility, which also included new business, such as aggregates and Pet Coke. As we look at our capital allocation priorities on slide 11. During the year, we purchased 2.9 million SXCP units, which generated $2.3 million of additional cash for SXC in 2017. We also expect that these units will generate an additional $1.7 million of cash with the payment of SXCP’s recently declared fourth quarter distribution. In 2017, we also optimized our consolidated balance sheet by refinancing SXCP’s notes repaying SXC’s remaining notes outstanding and restructuring both revolvers. These actions meaningfully extended our debt maturities and provide us with significant flexibility moving forward, to execute our growth and capital allocation priorities. Turning to our capital deployment on slide 12. As you can see, we generated solid operating cash flow above our revised post debt refinancing guidance range of 128 to 143, which was driven by the strong operating performance I just highlighted. During the year, we also receive the final portion of our cash consideration from the 2016 redemption of our Brazil Coke preferred equity interest. CapEx of $75.6 million during the year was slightly below our $80 million guidance, and included about $29 million related to our Indiana Harbor oven rebuild initiative and $19 million related to our Granite City gas sharing project. As I just discussed, we repurchased 2.9 million units for $49 million in total and also declared four quarters of SXCP distributions during the year. All-in-all, we ended 2017 with a cash balance of $120 million and strong liquidity of nearly $350 million and our consolidated cash -- consolidated leverage was just below 3.8 times. I'll now hand the call back to Mike to discuss our 2018 outlook.

Thanks Fay. Before we get into our 2018 guidance, I wanted to provide a few brief thoughts on the overall market where we see things heading as we go into the New Year. On steel, I believe we entered the year with some positive momentum the modest industry improvements in 2017. That being said, there's still room for improvement in addressing import challenges that our customers face. Hot rolled coil benchmark price continues to rise as industrial and manufacturing activities pick up here domestically with autos holding fairly steady and construction continuing to rise. HRC prices are currently in the low 700s compared to an average of 620 in 2017. Capacity utilization remains below 80%, driven by the continued flow of imports, but the trend is positive and we believe both the pace and efficacy of trade measures will increase over time. We've seen a sharp rebound in energy prices with Brent crude recently crossing north of $70 per barrel. It may result in additional drilling activity and pipeline development here in the U.S. to benefit the OCTG market. Some longer term tailwinds, which we believe could be catalysts for the steel and manufacturing sectors, include an increase in infrastructure spending and a favorable outcome for section 232. On coal, I believe resilient is the best word for the coal markets as we enter '18. Coal volumes have been robust on the back of strong API 2 and Newcastle prices, which are approaching $100 per ton on strong demand from both Europe and Asia. We anticipate volumes and pricing to remain at these levels throughout 2018, and for the U.S. to be a significant participant in seaborne coal trade. Domestically, natural gas continues to put pressure on domestic thermal coal, and we see met coal holding relatively flat in 2017. In total, we think 2018 macro environment will be modestly better than 2017 with some potential upside as we move into 2019 and beyond. With that, I'll hand the call back to Fay to review our detailed 2018 financial guidance.

Thanks Mike. On slide 15, you can see that we are expecting another strong year of earnings growth with 2018 consolidated adjusted EBITDA guidance of between $240 million to $255 million, which is up $13 million at the midpoint versus 2017. We expect Indiana Harbor will report an adjusted EBITDA improvement of $16 million to $20 million, driven primarily by increased production from our rebuilt ovens, as well as the benefit from the reset of our O&M cost sharing mechanisms ending this year. We expect our other domestic coke assets will be down between $5 million to $9 million in 2018, driven by three items; first, higher outage costs due to increased scope; second, increased coal costs at our Jewell Coke facility, driven by higher met coal prices; and finally, the normalization of coke making yields after posting strong yields in 2017. We also expect our Brazil coke operations will be down slightly as it returns to a normalized run rate after a record production year in 2017. Turning to our logistics business. We expect improved performance in 2018 based on the continued stability of CMT volumes, which includes additional new business volumes, as well as the higher annual per ton rate on our base take or pay volumes. We also expect higher KRT volumes as customer demand patterns normalize. Finally, we expect our coke and other segment will be slightly improved in 2018. Turning to our domestic coke outlook on slide 16. In 2018, we expect our domestic coke adjusted EBITDA, excluding Indiana Harbor, will be between $198 million to $202 million. In any given year, we may experience certain items, either positive or negative, that impact adjusted EBITDA. While these annual benefits or impacts may cause adjusted EBITDA differences year-to-year, you can see that on the full whole our domestic coke business, excluding Indiana Harbor, has delivered consistent results over the last few years and expects to remain in this range again in 2018. As I mentioned a moment ago, we anticipate that some of the favorable benefits that we saw in 2017, including significantly improved coal to coke yields, will revert back to normalized annual performance while other one-time items like the lower contracted coal price at Jewell will break the other way this year and impact our 2018 results. Additionally, we expect higher planned outage cost in 2018 due to increased scope. For context, we typically perform routine boiler outages annually, and turbine and flue gas desulphurization or FGD outages biannually at our facilities. In 2017, we completed FGD outages at both Middletown and Granite City. In 2018, we anticipate similar FGD outages at Haverhill 1 and Haverhill 2. We also expect to complete the turbine outages at both Middletown and Haverhill, which did not occur in 2017. We are also planning to complete replacements of the outer shell of our existing spray, dry absorber equipment or SDA in 2018. We plan to complete the majority of this work at Haverhill in 2018 and anticipate that it'll increase both outage related expenses, as well as our CapEx outlook, which I will highlight in just a bit. We expect production will be in the range of 3.025 million to 3.075 million tons, which is in line with 2017. Flipping to the next page. In 2018, we expect Indiana Harbor will generate near breakeven adjusted EBITDA on 870,000 to 900,000 tons of production. As I previously mentioned, this outlook includes improved production from our rebuilt ovens and the reset of our O&M reimbursement mechanisms. I also mentioned with our 2017 results that we experienced higher than expected oven degradation on the non-rebuild A battery and B battery ovens during the fourth quarter. Because we plan to complete our 67 oven rebuilds ratably throughout 2018, we've previously expected that the A battery ovens would continue to perform at a certain production level prior to being taken out of service for planned oven rebuild work. However, our 2018 product outlook has now been impacted by this accelerated degradation as we no longer expect that these ovens will be able to produce at our previously targeted production level. We also had anticipated a certain performance level of B battery ovens, which has not played out as we have expected and as such, will also impact overall production in 2018. These impacts are why our 2018 guidance for Indiana Harbor has been modified versus our prior expectation. We do continue to experience improved performance across the 148 previously rebuilt ovens, and we expect that with the completion of our 2018 campaign, the rebuilt ovens across our A, C, and D batteries will be able to consistently produce in excess of 900,000 tons annually. While we have had challenges in the past at Indiana Harbor, especially as we have worked over the last few years to address the plans deteriorating oven conditions, we remain committed to stabilizing Indiana Harbor’s operations and returning the facility to profitability. Importantly, we have taken into account these historical challenges, as well as the plant’s current operating performance in formulating our current assessment of Indiana Harbor’s 2018 outlook. Turning now to our logistics outlook on the next slide. 2018 logistics adjusted EBITDA is expected to be between $71 million and $76 million. At KRT, we expect a meaningful recovery over 2017 levels as end markets for both met and thermal coal normalize. At CMT, we expect to handle 6.5 million tons of base take or pay volumes as one of our customers has publicly disclosed that they have encountered adverse mining conditions at one of their top producing mines. We expect that this will impact coal export volumes through Convent in 2018. While our base volumes are projected to be down in 2018, we do not expect that this will have a material impact in our Logistics’ adjusted EBITDA due to the take or pay nature of our contract. Also as Mike mentioned previously, export coal economics remain attractive and we believe that there could be potential volume upside as miners continue to recognize healthy netback economics. We do however expect 1.5 million tons of new business through CMT this year, which we expect will contribute an additional $2 million to $3 million compared with 2017. We remain focused on securing additional new business in order to further diversify our customer base and product mix, and to optimize this facility. To that end, our recently secured barge and loading capabilities equipped CMT to handle all forms of transports, which we believe provides us with a unique advantage in handling a variety of different bulk and liquid materials. On slide 19, we have highlighted our 2018 capital plan. We expect to spend $95 million in 2018 as the continued implementation of our Granite City gas sharing project and an increased number of Indiana Harbor oven rebuilt are driving capital requirements higher. As many of you recall, we began the implementation of our Granite City project in 2017, which is expected to significantly reduce the amount of venting we have at this facility. We expect this project will require $55 million of capital in total between last year and this year, which is up slightly from our prior estimates. In 2018, we also expect our ongoing CapEx will be slightly elevated due to certain coke improvement projects. Turning to slide 20. This slide provides a historical view of our actual performance and guidance, including our 2018 outlook across many key metrics. Looking at 2018, we expect 2018 adjusted EBITDA to be between $240 million and $255 million. We also expect that our domestic adjusted EBITDA per ton will be slightly higher. Additionally, we expect operating cash flow to be up year over year due primarily to improved operating performance across the fleet. With that, I will hand it back to Mike.

Thank you, Fay. Wrapping up on slide 21. For 2018, we are going to be keenly focused on improving operational performance across both our coke and logistics businesses, including continued execution of our Indiana Harbor rebuild initiative. From a commercial perspective, we will continue to focus on leveraging CMT's unique capabilities to secure further new business towards our goal of achieving $5 million to $10 million of additional EBITDA in the next few years. And finally, we'll again be focused on executing on our commitments to shareholders by achieving full year financial targets, which we laid out today. With that, let's go ahead and open up the call for Q&A.

[Operator Instructions] Our first question comes from Lee MacMillan from Clarksons Platou Securities. Please go ahead your line is open.

I was wondering if you guys could run it through the assumptions regarding Indiana Harbor and the breakeven guidance in a little more detail. On the one hand, I see there's $18 million year over year improvement but at the same time, production expectations look like they're up somewhat marginally from 2017. So I'm wondering if that's the relative efficiency of the rebuilt ovens falling through, because you also talked about degradation at non-rebuilt ovens and then you have the O&M reset. So maybe if you could quantify the O&M and then talk about the balance between new ovens -- rebuilt ovens running better and non-rebuilt ones degrading.

Lee, there's a number of questions in there, and so I'll try to get to them. So our Indiana Harbor production for 2018 is anticipated to be between 870,000 and 900,000 tons. And when you look at our near breakeven guidance and the increase year over year, there're two components that are driving that. One is the O&M reset and the other is the increased production from our rebuilt ovens, right. And the way to think about that increase year over year is roughly 50% is associated with the O&M reset and 50% is associated with the increase in production.

So you got the 9 million and then another 9 million of that incremental tonnage, and that's outweighing the degradation at the non-rebuilt. Then the other question, I guess moving on to non-Indiana Harbor guidance, ex-Indi. With the steel market is tight as it is in the U.S. and you commented some of this in the 2018 outlook, expectations I think for utilization is pretty strong in the domestic steel market. Is there any upside to the ex-Indi Harbor guidance from just increased volume requirements from your customers running at higher utilization or is that already baked into your expectations?

So I would just remind you that we actually -- our facilities typically run full out. And we are typically producing above nameplate capacity. The incremental impacts to SXC would be very minimal to our EBITDA just based on the nature of our take or pay contracts and the way that we run our facility. It would be marginally if we could produce above our nameplate capacity, let's say at our Granite City facility. Across the fleet, that number is not terribly large. So the impact to our results isn't that material. And I would also -- so I think if that helps -- give you any context.

Your next question comes from Lucas Pipes from B. Riley FBR. Please go ahead, your line is open.

Ted Beachley for Lucas Pipes today. So just one question, going forward into 2018, how do you think of shortfalls related to the take or pay volumes at CMT? Do you expect that deferred volumes will continue to drop in 2018, or how are you guys thinking of that?

So we've guided in 2018 that we're going to have 6.5 million tons of throughput through the facility for our take or pay contracts with FELP and Murray, that's down versus 2017. So we will see an increase in the fourth quarter of 2018 on deferred revenue recognition. But I would just comment that on the whole given the take or pay nature of those contracts, the impact to adjusted EBITDA is relatively immaterial. It really is just based on incremental revenue from ancillary services. So even though you’re going to have lower volumes for those two contracts through the facility, the impact should not be terribly material.

[Operator Instructions] Our next question comes from Richard Diamond from Castlewood Capital. Please go ahead, your line is open.

Can you address AK Steel, as yesterday's news has put both the stock of SXC and SXCP under pressure?

So AK yesterday announced that they took out impairment on Ashland, .but they also indicated that the Ashland works remains on temporary idle. And so it's not a permanent closure of that facility as we look at what our customers said publicly.

Can you indicate how that would impact your contract as well as early notification periods?

So our contract with AK have for an early termination, it requires a two year notice and it requires the permanent shutdown of the Ashland blast furnace. As I indicated, our customer hasn’t indicated that there is a permanent shutdown. They said it was a temporary idle, which is no different today than where I was last year or two years ago.

And there are no further questions at this time. I will now turn the call back to Mike Rippey for closing remarks.

Thank you all you for joining us this morning and for your interest in SunCoke. I plan to be out on the road with Fay and the IR team in early March and look forward to meeting with many of you then. Again thanks, and have a good day.

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