Good morning. My name is Matthew and I will be your conference operator today. At this time, I would like to welcome everyone to the SunCoke Energy Q1 2018 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. Andy Kellogg, Treasurer and Director of Investor Relations, you may begin your conference.

Good morning and thank you for joining us this morning to discuss SunCoke Energy's first quarter 2018 earnings. With me are Mike Rippey, our President and Chief Executive Officer and Fay West, our 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 our Investor Relations section of our website, and a replay will be available there later today. If we don't get to your questions on the call, 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 website, 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, Andy and thank you all for joining the call this morning. We are off to a good start and making progress towards achieving our 2018 objectives. First quarter performance and financial results are a testament to the progress we're making. We continue to be pleased with the overall safety and operating performance of our coke and logistics assets and are encouraged to see the results from the sustained performance of our rebuilt ovens at the Indiana Harbor. 144 ovens rebuilt in 2016 and 2017 are demonstrating both solid charge weights and coking times, which have resulted in an increase in production and higher yields. In March, we began work on the 2018 rebuild campaign and we anticipate our first group of ovens will be back in service in early May. As a reminder, we will rebuild 67 ovens as part of this year’s campaign to fully rebuild our A battery. While still early, we are on schedule and on budget and anticipate this year's rebuild program will be completed in November. After this year, we will have rebuilt greater than 75% of the facility. We're encouraged by the results that we're seeing from our rebuilt ovens, which are reflected in our first quarter results. At Convent, we handled record volumes with over 2.5 million tons of throughput in the first quarter. Given CMT’s unique capabilities and favorable coal export market dynamics, we anticipate netbacks to our customers will remain attractive and with a strong start to the year, we are increasing expectations on throughput tons to be between 10 million to 10.5 million tons in 2018. And lastly, with a strong start to the year, we're well positioned to achieve our fiscal year 2018 guidance targets. Now, I'll turn the call over to Fay to review our first quarter earnings. Fay?

Thanks, Mike and good morning, everyone. Turning to slide 4, our first quarter net income attributable to SXC was $8.7 million or $0.13 per share. EPS was up $0.11 from the prior year period due to strong operating performance, which was partially offset by higher interest expense from our debt refinancing last year. Q1 adjusted EBITDA of $64 million was up 15% over the prior year period. The increase was driven by strong operating performance in our coke business, significantly increased volumes at CMT and lower corporate and legacy costs. Moving to the detailed adjusted EBITDA bridge on slide 5, we are pleased with the strong performance in the first quarter. And as you can see, consolidated adjusted EBITDA is up $8.4 million over the prior year. Our coke segment performed well this quarter. Indiana Harbor’s first quarter adjusted EBITDA of $5.8 million is up almost $9 million versus the prior year period. We continue to see sustained operating performance from rebuilt ovens, which are driving an increase in production and higher yields. Additionally, Indiana Harbor received $2.7 million dollars in higher O&M reimbursement, due to the contractual reset of the O&M cost sharing mechanism with our customer. As a reminder, in 2018 and through the end of the contract, Indiana Harbor’s O&M is reimbursed based on an annual budget versus the fixed rate mechanism that we had in 2015 through 2017. Excluding Indiana Harbor, the remainder of the coke business on balance performed as expected. First quarter adjusted EBITDA was impacted by the timing of outage costs and lower yields at our Haverhill facility. We did not have any maintenance outages in the first quarter of 2017. So this affects quarter-over-quarter comparability. Quarterly results were also impacted by the timing of other planned maintenance projects. Additionally, we experienced an…

Thanks, Fay. Wrapping up on slide 10, we remain focused on operational execution, maximizing the capabilities and performance of our coke and logistics assets and ensuring the successful execution of this year’s oven rebuild campaign at the Indiana Harbor. We also continue to focus on leveraging CMT's unique capabilities to secure incremental business. And finally, we are continuously focused on executing on our commitments to shareholders by achieving our full year 2018 financial targets and remain on track to do so after a strong start in Q1. With that, let’s open up the call for Q&A.

[Operator Instructions] Our first question comes from the line of Lucas Pipes with B. Riley FBR.

Good job at Indiana Harbor in particular and I wanted to ask to what extent the results thus far strengthen the case for full rebuilt of the entire facility?

So, we are -- we were very pleased with the performance in the quarter by Indiana Harbor and the results kind of speak to that. We have not yet made a decision on B battery, but we are encouraged by the way that the B battery ovens that have been rebuilt are operating. We do plan later this year to communicate what our plan is on rebuilding B battery, whether we do all or none or portion of the remaining 57 ovens. So stay tuned.

Sorry. Did you say when exactly you would make that determination or just later this year? Could you refine that?

Yes. So I think I'll probably be in the back half of the year.

And what are some of the metrics that you're looking at in terms of making that decision, in terms of the ovens that are currently operating, what sort of thresholds would they have to clear or what exactly is the decision predicated upon?

So obviously we're looking at kind of the performance of the oven, how we charge the oven, how the ovens coke out, what the production is, how they're maintaining kind of their structure. We're also evaluating the balance of the battery. As you know that B battery has been our most challenged battery in the past and what additional work would need to be -- what additional work is required to rebuild those ovens.

Okay. Thank you for that. And then maybe a bigger picture question. Over the last couple of years, it has been my observation that you've gained market share in the domestic coke industry. And you've consistently made the argument that some of the integrated ovens are in need of capital and at what point do you think there is the need for maybe additional coke making capacity in this country and when would you have those conversations with your customers?

So, as you know, there has been some incremental coke capacity that's come out over the last few years. The decision on kind of existing batteries that our customers operate, when and if those come out will be a decision that's made by our customers. And so of course that's something that we're monitoring as well as increased production or demands might exist over the next couple of years. Certainly, it’s something that we're mindful of as we go into our 2020 renewal. But I think it really is just something that we're monitoring and evaluating when and if there's any incremental production that's required.

[Operator Instructions] Our next question comes from the line of Derek Hernandez with Seaport Global Securities.

I wanted to also add my congratulations for a really great quarter and wanted to begin at Indiana Harbor. I believe that you mentioned in your comments, you’re reiterating your anticipation of Indiana Harbor being roughly EBITDA neutral for the year. I think that given the Q1 results were about 9 million higher than last year, that leaves about a further 9 million incremental increase over the rest of the year. Is that the right way to think about the improved performance at Indiana Harbor for 2018?

So, we give annual guidance. And so the breakeven guidance was on an annual basis. We don't talk about things on a quarterly basis. What you see kind of during the first quarter is very strong performance by the plant, but there was limited -- there were a limited number of ovens that were out of service. The rebuild campaign -- the 2018 rebuild campaign didn’t start in earnest until March. So what we're going to see in the second and third quarter are an increase in the rebuild activity. So obviously that's going to take ovens out of service, as you rebuild those additional ovens and it's also going to have an incremental impact on EBITDA, the demolition costs run through EBITDA. So I think you're going to see some tempering of Indiana Harbor results in the second and third quarter based on what we -- based on the 2018 rebuild schedule and that's how we put together our full year EBITDA guidance.

Very good. Yes. And then your plan I believe ends about November. So I presume that would imply kind of a seasonal pick up in the fourth quarter from this kind of higher work intensity in Q2 and Q3, correct?

Yes. You're right on that.

Okay. Excellent. And turning to the LP interest in SXCP, you reported a slight increase in units over the course of the quarter from the end of the year 2017. Is this going to continue, is this currently your main capital allocation strategy of accumulating units over 2018 or is this maybe somewhat tempered over the last few quarters and how -- what's your thinking around the returns there, given the reduced distribution announced today.

So, we still have remaining authorization to repurchase units. SXC does. And as we've said in the past, our plan is obviously to deploy capital in the most efficient way for shareholders to maximize value. What I would say is we do have -- we do have the option of purchasing additional units in the future. That it possible. And given the remaining authorization to do so, we’ll evaluate those decisions kind of as that time -- as time progresses.

I see. Thank you. And then you also mentioned in your presentation in particular potential tuck-in M&A. Is that something we should consider, say, in line with your recent logistics segment additions or maybe some other line of business also being considered.

So our primary focus has been on the logistics space and so that is where we’ve been spending some time. We're obviously exploring acquisitions that are of a certain size. And so that's, I think if you wanted to characterize where we're spending our time, it really is in the logistics space at this time.

Got it. Well, again, congratulations on a really great quarter. Good luck for the rest of the year and thanks for taking my questions.

Thank you.

There are no further questions at this time. I'll turn the call back over to you.

Okay. Again, I'd like to thank everyone for your interest today and your investment in SunCoke. And just to end, we will look forward to talking soon and we will be together again at the end of the second quarter. So thanks again for your participation.

This concludes today's conference call. You may not disconnect.