SunCoke Energy, Inc. (SXC) Q4 2020 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and welcome to the SunCoke Energy Incorporated Q4 2020 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Shantanu Agrawal. Please begin.

Good morning and thank you for joining us this morning to discuss SunCoke Energy's fourth quarter and full year 2020 results as well as '21 guidance. With me today are Mike Rippey, President and Chief Executive Officer; and Fay West, Senior Vice President and Chief Financial Officer. Following management's prepared remarks, we'll 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 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 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 our reconciliations to non-GAAP financial measures discussed on today's call. With that, I'll now turn things over to Mike.

Thanks Shantanu. Good morning and thank you all for joining us today. This morning we announced SunCoke's fourth quarter and full year results, and before I turn it over to Fay, who will review the results in detail, I want to discuss a few highlights. Let me start by first thanking all of our SunCoke employees for their commitment and contribution in what was an extremely challenging year. The dedication of our team is clearly visible for our safety record, operational excellence and financial results. On the coronavirus front, we continue to take all necessary measures to ensure the health and safety of our workforce and the additional precautions we have taken remain in place. COVID-19 task force continually monitors and evaluates the evolving situation and responds and adjust as the environment develops. On Slide 3, you can see the key initiatives that we set out and how we performed against these objectives. We delivered $205.9 million of adjusted EBITDA in 2020, exceeding our revised guidance range of $190 million to $200 million. This reflects the strong performance of our coke operations despite running a sub-optimal utilization rates and strong cost control across the company. Earlier this year, we announced the companywide cost savings initiative, which we anticipate will result in approximately $10 million of annualized savings. These cost savings initiatives provided benefits in 2020 and will continue in the years ahead. The domestic coke operations contributed $217 million to adjusted EBITDA in 2020, which exceeded the revised guidance range for domestic coke. I am pleased with the safe and efficient operation of our coke facilities all while following additional precautionary measures due to the pandemic. Another significant achievement for SunCoke in 2020 is the extension of existing contracts at Jewell, Haverhill 1 and Haverhill 2. We helped our customers navigate through challenging market conditions earlier this year, by reducing current year production and exchange for contract extensions, which illustrates the strength and long-term nature of our customer relationships. We also signed a two-year take-or-pay coal handling agreement with Javelin at CMT during the fourth quarter. This contract provides stability to the operations at CMT, while we actively pursue new business opportunities. I also want to briefly touch on our foundry coke initiative. The testing, development and capital deployment necessary for profitable foundry coke production went well throughout 2020. We are now commercial in this new market with a high quality product. During the fourth quarter, we also explored export coke opportunities for 2021 and today have had good success. We plan on running at full capacity in 2021 and feel confident that demand from export and foundry markets will support this level of production. Looking at our capital structure and deployment of free cash flow in 2020, we reduced gross debt by $110 million and net debt by approximately $61 million. This includes the opportunistic open-market purchases of approximately $63 million face value senior notes. Additionally, we paid a $0.24 per share annual dividend and repurchased 1.6 million shares during the first quarter. As we reflect on our business, we are pleased with the strength of our core operations, which allowed us to drive robust cash flows for the year. This strong cash flow has provided us the ability to weather market challenges, while also aggressively pursuing a balanced yet opportunistic approach to capital allocation. Fay will go into more detail on this, but on a high level, we made progress on our capital allocation initiatives for the year, reducing our debt, investing in our assets and returning meaningful capital to our shareholders. With that, I'll turn it over to Fay to review our third -- our fourth quarter earnings in detail.

Thanks, Mike, and good morning everyone. Turning to Slide 4. The fourth quarter net loss attributable to SXC was $0.06 per share, down $0.04 versus the fourth quarter of 2019. On a GAAP basis, our full year 2020 net income attributable to SXC was $0.04 per share, up $2.02 versus the full year of 2019. As a reminder, full year 2019 results included a $2.27 per share impairment charge recorded to Logistics goodwill and long-lived asset at CMT. After adjusting for these charges, 2020 diluted EPS was $0.25 lower than the prior year, due primarily to lower volumes at both the domestic coke and logistics segments. Consolidated adjusted EBITDA for the fourth quarter of 2020 was $37 million, down $13.8 million versus the fourth quarter of 2019. The decrease was mainly driven by lower volumes in our Domestic Coke segment. On a full year basis we delivered adjusted EBITDA of $205.9 million, down $42 million versus the full year of 2019. Coke operations were down $12.2 million due to lower volumes, which were partially offset by lower operating costs. Year-over-year results were also impacted by the bankruptcy of our coal customer at our Logistics segment. Turning to the next slide and looking further at our fourth quarter adjusted EBITDA performance. Slide 5 bridges fourth quarter 2019 adjusted EBITDA to fourth quarter 2020 adjusted EBITDA. As we have discussed in our previous conference calls in response to challenging and -- in response to a challenging and unprecedented environment we partnered with our coke customers to address their near-term coke needs. In exchange for the extension of several coke contracts, we agreed to reduce our coke production in 2020 by approximately 550,000 tons. This volume reduction contributed to the lower adjusted EBITDA from coke operations in the fourth quarter of 2020 as compared to the prior year. Strong cost control and management partially offset the impact of lower volumes. Logistics operations were $1.8 million lower quarter-over-quarter due to lower volumes as well as lower pricing, which was offset partially by lower operating costs. Corporate and other expenses were higher by $2.9 million quarter-over-quarter, mainly due to higher non-cash legacy liability expense. Turning to Slide 6. Full year 2020 adjusted EBITDA was $205.9 million down $42 million compared to the prior year. Our Domestic Coke segment delivered strong operational performance despite running at reduced production level. Lower sales volumes were partly offset by strong cost control and efficient operating procedures. The Domestic Coke segment delivered full-year adjusted EBITDA of approximately $217 million, which was well above our full year revised Domestic Coke guidance. Including Brazil, our coke operations delivered adjusted EBITDA of $230.5 million. Adjusted EBITDA of the Logistics segment decreased $25.3 million year-over-year, primarily as a result of the Chapter 11 bankruptcy of Foresight Energy and the subsequent rejection of the contract with CMT. Finally, our corporate and other segment was unfavorable by $4.5 million. Lower employee-related costs were offset by higher non-cash legacy liability expense and foundry related R&D cost. In summary, we are very pleased with the performance across all our segments of the company especially during a very tough and challenging year. Turning to our capital deployment on Slide 7. As Mike highlighted, we generated very strong operating cash flow, approximately $158 million in the year, which was above our full year revised guidance range of $116 million to $136 million. This robust cash flow generation allowed us to make good progress on our capital deployment initiatives. Capex of $74 million was spent during the year, which was below our guidance and included close to $11 million for foundry related expansion work. As we manage through the various constraints and challenges caused by the pandemic, we deferred certain capital projects in 2020. We expect maintenance capex will be higher in 2021 as our operations return to normal levels. We continue to make good progress managing our balance sheet. During the year we spent approximately $104 million of cash to reduce debt outstanding by $110 million. This includes repurchasing $62.7 million face value SXCP notes at a discount. As we have consistently indicated our long-term goal is to reduce our gross leverage ratio down to 3 times or lower. We also returned capital to our shareholders in 2020. We repurchased approximately 1.6 million shares for $7 million during the first quarter. We also paid a total of $0.24 per share dividend in 2020 which was the use of cash of approximately $20 million. In total, we ended 2020 with a cash balance of approximately $48 million and a strong liquidity position of approximately $348 million, setting the stage for continued progress against our capital allocation priorities in 2021. At this time, I would like to turn the call back over to Mike to share our views on the steel and coal market, before I run through our guidance expectations for 2021. Mike?

Thanks, Fay. Before we -- pardon me. Before we review our 2021 guidance, I wanted to provide a few brief thoughts on the overall market and where we see things as we enter the New Year. 2020 proved to be a roller coaster ride for the steel industry. Prior to the pandemic, utilization rates were stable at around 80%, reflecting good fundamental demand. As the coronavirus took hold, capacity utilization plummeted dramatically to a low of 52% with all major integrated steel producers shutting down blast furnaces. As the economy started to reopen in the fall, steel demand and capital -- and capacity utilization began to recover slowly. As 2020 came to a close, hot rolled prices reached levels not seen in many years. Steel demand and capacity utilization rates largely recovered and were approaching pre-pandemic levels. We anticipate 2021 to be a year of continued recovery for the steel industry, potential for passage of a long overdue infrastructure bill, coupled with continued industrial recovery provides a good backdrop for the industry. Looking beyond 2021, we believe that SunCoke is well positioned for long-term success. We have the youngest domestic coke making facilities in the NAFTA region and continue to invest in our facilities to ensure they operate safely and efficiently. We have leading technology with outstanding environmental performance and are recognized as the EPA MACT standard. Our coke production process is the cleanest and least carbon intensive in the world. We believe some of the older coke supply is coming towards the end of their life cycle and will be retired in the future. In addition, recent developments in the steel market have created the potential to economically produced pig iron or consumption by the [EAFs]. The production of pig iron, the domestic blast furnaces will require coke, which could create opportunities for our company. We are also entering new foundry and export markets, which provides on customer and market diversification. On the thermal coal export side, the market is showing signs of recovery. API2 prices increased by approximately 15% in the fourth quarter versus the prior quarter. And we have seen substantial increases in export coal shipments from the Gulf Coast and East Coast ports. We recently signed a new two-year take-or-pay agreement with Javelin to handle coal at CMT. We have also successfully handled iron ore at CMT and we expect that we will continue to handle this new product in 2021, fully repositioning CMT is a multi-year undertaking and it continues to be one of our top priorities. Now, I'll turn it over to Fay to review our 2021 adjusted EBITDA guidance.

Thanks, Mike. Turning to Slide 10. We expect 2021 adjusted EBITDA to be between $215 million and $230 million. Domestic Coke will contribute an incremental $2 million to $7 million in 2021 as we run our Domestic Coke fleet at full capacity with uncontracted capacity being sold into the export and foundry markets. We anticipate higher O&M spending as our operations and capital activities return to a more normal level in 2021. Turning to Logistics segment, we expect logistics to contribute an additional $3 million to $8 million in 2021. As Mike mentioned, we anticipate that market conditions for coal export will continue to improve, which we anticipate will result in higher volume. We also see opportunities for incremental volumes from non-coal throughput. Lastly, we expect our Corporate and Other segment to be better by approximately $4 million to $8 million. The year-over-year favorability is driven by lower employee-related costs and the absence of certain discrete items such as foundry related R&D expense. Moving on to Slide 11. In 2021, we expect our Domestic Coke adjusted EBITDA will be between $219 million and $224 million with sales of approximately 4.1 million tons. Once again, we expect to run the domestic fleet at full capacity. Approximately 3.85 million tons are contracted under long-term take-or-pay agreements. We expect to sell the remaining volumes in the foundry and export markets. Foundry and export tons do not replace blast furnace tons and a ton per ton basis. For example, due to the differences in the production price -- process, a single ton of foundry coke replaces approximately 2 tons of blast furnace coke. These differences are reflected in our sales estimates of 4.1 million tons. The total sales volume for foundry and export coke is expected to be between 250,000 tons and 270,000 tons, which is the blast furnace equivalent of approximately 400,000 tons. Our 2021 projections also include lower cost coal cost recovery at our Jewell facility, which is exposed to commodity risk through 2021. Additionally, lower coal prices in 2021 will drive lower yield gains across our Domestic Coke fleet. Lastly, we also expect that operating and maintenance costs will be higher in 2021 as compared to 2020. Certain maintenance and maintenance activities and capital projects were deferred due to constraints imposed by the pandemic as well as lower production. As production ramps up and the operating conditions normalize, we expect that maintenance spending will normalize as well. Looking at Slide 12. 2021 Logistics adjusted EBITDA is expected to be between $20 million and $25 million, an increase of $3 million to $8 million versus 2020. As discussed earlier, we have a new contract with Javelin, which included a 4 million ton take-or-pay volume agreement for 2021 and 3 million tons for 2022. Given the current coal export market and looking at the API2 forward curve, we are projecting between 4 million tons and 5 million tons of coal to be exported from CMT in 2021. Additionally, we have also tested iron ore handling at our facility and continue to look for other opportunities. Our value estimates include between 2.5 million to 3 million tons of non-coke throughput such as pet coke, aggregates and iron ore. We expect slightly higher volumes at our domestic coal terminals as well with our coke production facilities ramping back up to full production. But third-party volumes will remain tempered. We expect to handle 10.5 million tons through our domestic coal terminals in 2021 versus approximately 9.5 million tons handled in 2020. Overall, we see some positive indication that the commodity market is improving and that the initial success at CMT has achieved in test products will result in potential upside, which is contemplated in the larger guidance range for Logistics adjusted EBITDA in 2021. We understand that this is a small step toward realizing the full potential of CMT and we will continue to pursue our initiatives to bring on new customers additional volume and new products at CMT. Moving to the 2021 guidance summary on Slide 13. This slide provides a historical view of actual performance across many metrics as well as a summary of our 2021 guidance. Once again, we expect adjusted EBITDA to be between $215 million and $230 million in 2021. Our coke operations are expected to ramp back up to full capacity and the Logistics segment had some upside potential with new products and higher coal export volumes. We anticipate our capex requirement in 2021 will be around $80 million. This includes some deferred projects from 2020 and is in line with our long-term capital capex estimates on an annual basis. Our free cash flow is expected to be between $80 million and $100 million after taking into account cash interest, cash taxes, capital expenditures and minimal working capital changes. With that, I'll turn it back to Mike.

Thank you, Fay. So wrapping up on Slide 14. 2021 will be a year to build on our strong foundation. As always safety and operational performance is top of mind for our organization. Our efforts will focus on successfully executing against our operating and capital plan in 2021. We are entering into two new markets for 2021. We tested these opportunities on a limited basis, but this year will be the first where we participate on an industrial scale. Our objective is to succeed in these markets by proving ourselves as a reliable supplier of high quality product. These sales are important for SunCoke success in 2021 as well as in future years. We will continue to pursue opportunities to optimize our asset base, specifically as it relates to CMT, repositioning Convent Marine Terminal from primarily a coal export terminal to a more diversified terminal will be an area of focus. SunCoke will continue working toward further expanding our customers and products in 2021. As we have demonstrated in the past, we will continue to execute our well established and well balanced capital allocation goals, continuing to bring our debt balance down is critical to stabilizing and strengthening our capital structure. We will continue to evaluate capital needs of our business, our capital structure and the need to reward shareholders on a continuous basis and we'll make capital allocation decisions accordingly. In total, we are excited and optimistic for the New Year, after battling through an unprecedented 2020. We see great potential to build on the strength of our core coke making and Logistics franchises to enter new markets, serve new customers, meet our financial targets and create value for our shareholders. With that, let's go ahead and open it up for Q&A.

[Operator Instructions] Our first question comes from the line of Matthew Fields with Bank of America.

Hi, everyone. So last time we spoke, it was November 6, and you all were kind of holding to your full-year guidance, which implied a pretty negative fourth quarter in terms of EBITDA and free cash flow. I think a pretty negative free cash flow to hit that $36 million to $56 million, obviously you'd be pretty handily on both fronts. So what was the reason for that strong out-performance in 4Q? Was it just a really, really conservative guide or was there something that kind of just fundamentally changed in the last six weeks of the quarter?

Nothing fundamentally changed Matthew. Sometimes the wind is a bit of your back and we found that to be the case in the fourth quarter. Weather was quite mild. It's not been quite as mild here in the Midwest recently, but the weather in the fourth quarter was mild. So, our operations performed at very good levels. The cost reduction initiatives, which we announced starting to come into full fruition in the fourth quarter, so I'm delighted with the ability of the company to simultaneously implement a cost reduction initiative and unfortunately that means fewer employees here at SunCoke, but while in the process of reducing our cost, we didn't miss a beat as we began to ramp back up to full production here in 2021. So I think it was really a quite outstanding quarter for the company and its employees. Again [Audio Gap] some good weather. There was perhaps and you see it in 2021 we have more capital work in 2021 than we had in '20. So we're doing a little bit catching up that we weren't able to accomplish in the fourth quarter which does have an impact on our O&M cost as well. So it was really just a good quarter.

Okay. And then I wanted to sort of tie the puts and takes on the Domestic Coke side from '20 to '21. And then I think phase comments about foundry coke replacing 2 tons of blast furnace coke maybe some further explanation about that. I think and please correct me if I'm wrong here, but I think from '20 to '21, you have 125,000 tons coming back from the AK Steel contracts. You have 200,000 tons going away in the [MTNA] contracts. So maybe I'm wrong on those figures, but help me sort of tie that bridge 2020 to '21 and then the balance is 400,000 tons of blast furnace coke, but you're only going to be selling 260 -- 250 to 270 tons of foundry coke and the rest is export? Is that the way to get to 4.1 million tons?

No, so, at blast furnace kind of equivalent, right, what we've always thought of and how we've always discussed kind of our tonnage. Roughly 4.2 million tons of production at full utilization, okay? When you look at our contracted volumes, as I mentioned we're at under long-term take-or-pay volumes, we're a little over 3.8 million tons. So when you're trying to just do that math, you have 4.2 million tons to 3.8 million tons you have 400,000 tons of uncontracted volumes under long-term take-or-pay contracts. And so those tons will then be deployed either into -- because we're going to run at full run rate, either into the export market or the foundry market. Now, it's not a ton per ton comparison on the foundry front. And so when we look at what we're planning on selling in the foundry space and the export space, it is the differential of that amount.

And provided that really is the extended coking times for the production of the foundry coke.

Okay. So you will essentially be producing 4.2 million tons. But you will be selling fewer than that?

No, no, no. What we...

We'll be utilizing the time fully. All the capacity of the facilities will be used. We will use every minute of available time to produce coke. We produce less foundry coke per unit of time because the coking cycle is longer. So you get less throughput.

All right. Great. And then your overall margins guidance $53 to $55, isn't really down that much. So can you give us a little guidance on the margin sort of differential between foundry coke and you're sort of long-term contract to coke?

We're not giving specific profit margin information. Foundry is, I know you can appreciate, it's a small market and we don't really want to say anything that would competitively harm us, but it's appropriate to think that the relative profitability of our different product offerings are more or less the same. There is some internal opportunity on the foundry side to reduce our cost as we go fully commercial, look to optimize our production, get the yields ups on. So there is some internal opportunity to bring the profit of the foundry product up. But certainly in line with the blast furnace margins.

Okay, that's helpful. And then on the Logistics side, congrats on that new Javelin contract. Just wanted to sort of dig in a little bit there. Convent going from 5.1 up to 6.5 to 8, but with an additional 4 million tons from Javelin, is there some coal that's going away. Or was that 5.1 was a chunk of that not coal. Like help me understand where that extra 4 million tons is fitting in?

So I think where your math isn't paying together is, it's not an incremental 4 million tons. We moved tons in 2020...

On a spot basis.

For Javelin.

Okay.

3.5 million. And so it's -- this is just a new contract, which it's not spot like it was in 2020, its take-or-pay for 4 million tons.

So the incremental, is only about 0.5 million tons in 2021 for Javelin.

'21. Yes.

Got it. Okay, that's very helpful. And then are we going to start to see, I know we can sort of back into the margin, you'll get some Logistics based on your EBITDA guide, but you used to sort of generate $3 to $4 per ton on the revenue side in the coal logistics business. Are we going to be trending back up toward there or is it going to be kind of on the revenue basis that same as '20 closer to '21?

What we did not different in foundry as we're now entering new markets and finding ourselves in competitive situations. We're not really intending to say anything more than we have with regard to our throughputs and the EBITDA of the segment.

Okay, that's fair. And then lastly from me and thanks for the patience here. With the free cash flow expected in '21, if you kind of apply that you could pay down your entire revolver over the course of '21 which would put you in 0.3 or 0.4 of a turn below 3 times. You said continued debt reduction is important. And if you're going to be below 3 times, does that mean you can take the foot off the gas with that or and increased shareholder returns or do we think that 3 times might turn into 2.5 times as the target over time or even lower?

I mean, if you're -- I think your math is correct. As we continue to make good progress next year and pay down debt that would drive us being a bit below 3 times and as we've said all along 3 times or lower. So I think our priority in 2021 will be to get that debt level down to 3 times or lower and that speaks pretty well to the excess cash flow we have next year.

Our next question comes from the line of Lucas Pipes with B. Riley Securities.

Two primary questions on my mind. First on the contract minimums, you had previously outlined that this step downs here this year 2021 and then 2022. I wanted to ask what extent you have discussions with your Domestic Coke customers today about potential increases to that -- you noted, Mike, the market -- steel market is very strong. So I just wondered if those conversations have started again? Thank you.

Yes, it's a good question, Lucas. Actually they really at the other end. It's not a matter of starting and stopping, as you're aware, as we supported our customers in 2020, we renegotiated and extended our existing contracts. We did that in a couple of different points during the year and those conversations are on a continuing basis. We also though and responsibly look to other opportunities for customer diversification and to ensure that our facilities run full. So, we're in discussions, both with our existing customers as well as potential customers.

And you've noted the strength in the market or would you say those at this point are really spilled over into those ongoing conversations yet?

No. Clearly the market is strengthening where capacity utilization rates are back 77% I guess is the last number I saw. So we're approaching 80% and 80% plus is healthy market. So that's a good environment for us to find ourselves. As I indicated this need for an infrastructure bill is -- the lack of one is really a pause, it needs to be addressed by our country, perhaps in a bipartisan way Washington can get up and actually do something about it, instead talking about it. That's a catalyst for further demand development in the steel market. So we see the improvement continuing, industrial recovery continue. So there is a bit of environment to discuss. But we did extensions last year during the period of significant contraction. And the reason we're able to do that is, we believe our customers recognize us for the high quality product we make and for the investments we've made and the fact that we're going to be a long-term reliable supplier. So it's not necessarily only about where you sit in the steel cycle. We take the long view and we think our customers and potential customers take a long view. So this is -- it's just -- it's part of the -- just the ongoing dialog.

Very helpful. And couldn't agree more on the infrastructure side. Mike another topic I wanted to touch on was the full potential for CMT. I believe in your prepared remarks, you mentioned, you used that phrase, and I wondered if you could speak to full potential in a quantitative way. I know this full potential doesn't seem like it's achievable here in 2021. If you look out two, three, maybe even four or five years, where do you see that facility in terms of potential EBITDA through various initiatives you've taken? Thank you.

I don't want to start forecasting 2022 and beyond EBITDA for either our logistics business or our coke business. But clearly there is underutilized capacity at the terminal today. We've demonstrated in the ability to 212 million tons through there in the past. So that's a first stop and beyond that there is opportunities to expand that terminal in a thoughtful and profitable way where it could handle substantially more volumes than the 12 million that is historically done. So it's a journey. But there is latent capacity there without investment and there is additional capacity in the presence of some modest investments.

[Operator Instructions] Our next question comes from the line of Phil Gibbs with KeyBanc Capital Markets.

Thanks for all the color on 2021 in terms of the composition in the Domestic Coke operations. Can you give us any texture in terms of 2020 in terms of what that was, I think you shipped around 3.8 million tons. How much -- what was the split there between the domestic take-or-pays and your foundry export business?

It was all domestic. There was no commercial volumes of either export or foundry.

Okay. So the domestic take-or-pay is relatively flattish or modest growth this year?

Correct.

Okay. And I think in your prepared remarks you had made a comment about potential pig iron opportunities and just a question in terms of what you're hearing on that whether or not you think that's a 2021 reality or a 2022 potential. Just, what's the volumes in terms of -- in terms of that comment.

I think it starts to show up in '21. You've got about a Canadian producer that's beginning to produce pig now, it's I think being actively explored by domestic blast furnace producers. There's approximately 5 million tons of pig is imported into this country every year and it's being imported frankly from places where the environmental concerns that we demonstrate every day aren't quite as great. So there is an economic opportunity and I think it's also an opportunity in terms of the global environment to do something in an environmentally more responsible way. So there is I think good opportunities. I think when and how much is a question better directed to the people who would actually produce the pig.

That makes sense. And then just one more from me. I know there's a lot of focus on emissions reductions obviously within the steel industry, but just from my perch, I think that evolution domestically has been going on. I think probably even before the Obama administration and I think it accelerated in terms of the demands that were put on your -- some of your blast furnace customers and maybe if you could provide some color just in terms of where you think the industry is in terms of its evolution here domestically and how far ahead we are potentially versus the rest of the world given the fact that I think we've kind of been an early adopter to this view for a while. I just think there's a lot of misinformation. Thanks.

You're 100% right. So CO2 reduction and environmental performance is not new to the domestic industry. It's actually decades old. So tremendous progress has already been made here in the United States and there's scope for continued improvement with regard to the environmental performance of the industry and we applaud our customers who look to improve their environmental footprint. As you know, we have a very small footprint, but even with our small footprint we look to continuously improve it. Other players, and I think now we could get into a long discussion about trade and the fairness of trade and the subsidies that are present in imported steel, but clearly in other parts of the world and I'm not saying the entire world, by the way, there's environmentally responsible producers throughout the world, but certainly significant portions of the steel that's moved around the world is produced by people who don't take their environmental responsibility seriously as ours. And I think that's something we need to continue to educate consumers, investors, particularly people in the Washington who are responsible for trade laws and trade enforcement business' message needs to continue to ring out. It's all we do is continue to improve and we need to our environmental performance as an industry and others aren't required to do the same globally and CO2 is a global issue, it's not a US issue. We are not accomplishing much. All we do is export pollution by allowing those who indiscriminately produce to import into our country, we haven't accomplished anything, in fact you could argue we encourage pollution if we don't have strong trade laws. So there is a body of work here and I applaud the industry for all that it's been able to do over the past couple of decades. And you're right it predates the Obama administration and it will extend beyond the next administration too. This is a continuing journey. So we need to continue to work hard and we need to insist that, that others do the same.

At this time, there are no further questions. I would now like to turn it back over to Mike Rippey for any closing remarks.

So again, I'd like to thank everyone today for joining the call and as always, we appreciate your continued interest in SunCoke and look forward to continuing our dialog. Thanks.

Ladies, thank you for your participation. You may now disconnect.