Suncoke Energy Partners L.P. Annual Report 2018

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FY2018 Annual Report · Suncoke Energy Partners L.P.

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Table
of
Contents

(Mark One)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2018 or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
Commission File Number 001-35782

SUNCOKE ENERGY PARTNERS, L.P.
(Exact name of Registrant as specified in its charter)

Delaware

(State of or other jurisdiction of
incorporation or organization)
1011 Warrenville Road, Suite 600
Lisle, Illinois

(Address of principal executive offices)

35-2451470

(I.R.S. Employer
Identification No.)

60532

(zip code)

Registrant’s telephone number, including area code: (630) 824-1000
Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class
Common units representing limited partner interests

Name of Each Exchange on which Registered
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate
by
check
mark
if
the
registrant
is
a
well-known
seasoned
issuer,
as
defined
in
Rule
405
of
the
Securities
Act.

Yes

ý
Indicate
by
check
mark
if
the
registrant
is
not
required
to
file
reports
pursuant
to
Section
13
or
15(d)
of
the
Act.

Yes

ý
Indicate
by
check
mark
whether
the
registrant
(1)
has
filed
all
reports
required
to
be
filed
by
Section
13
or
15(d)
of
the
Securities
Exchange
Act
of
1934
during
the

preceding
12
months
(or
for
such
shorter
period
that
the
registrant
was
required
to
file
such
reports),
and
(2)
has
been
subject
to
such
filing
requirements
for
the
past
90
days.

Yes

Indicate
by
check
mark
whether
the
registrant
has
submitted
electronically
and
posted
on
its
corporate
Web
site,
if
any,
every
Interactive
Data
File
required
to
be
submitted
and
posted
pursuant
to
Rule
405
of
Regulation
S-T
during
the
preceding
12
months
(or
for
such
shorter
period
that
the
registrant
was
required
to
submit
and
post
such
files).

Yes

Indicate
by
check
mark
if
disclosure
of
delinquent
filers
pursuant
to
Item
405
of
Regulation
S-K
is
not
contained
herein,
and
will
not
be
contained,
to
the
best
of
registrant’s
knowledge,
in
definitive
proxy
or
information
statements
incorporated
by
reference
in
Part
III
of
this
Form
10-K
or
any
amendment
to
this
Form
10-K.

Indicate
by
check
mark
whether
the
registrant
is
a
large
accelerated
filer,
an
accelerated
filer,
a
non-accelerated
filer,
a
smaller
reporting
company
or
an
emerging
growth
company.
See
the
definitions
of
“large
accelerated
filer,”
“accelerated
filer,”
“smaller
reporting
company,”
and
“emerging
growth
company”
in
Rule
12b-2
of
the
Exchange
Act.

Large
accelerated
filer

Non-accelerated
filer

Accelerated
filer

Smaller
reporting
company

Emerging
growth
company

If
an
emerging
growth
company,
indicate
by
check
mark
if
the
registrant
has
elected
not
to
use
the
extended
transition
period
for
complying
with
any
new
or
revised

financial
accounting
standards
provided
pursuant
to
Section
13(a)
of
the
Exchange
Act.
¨

Indicate
by
check
mark
whether
the
registrant
is
a
shell
company
(as
defined
in
Rule
12b-2
of
the
Act).

Yes

ý
The
aggregate
market
value
of
the
registrant's
common
units
held
by
non-affiliates
of
the
registrant
(treating
directors
and
executive
officers
of
the
registrant’s
general
partner
and
holders
of
10
percent
or
more
of
the
common
units
outstanding,
for
this
purpose,
as
affiliates
of
the
registrant)
as
of
June
30,
2018
was
$251,920,809
,
computed
based
on
a
price
per
common
unit
of
$14.22
,
the
price
at
which
the
common
units
were
last
sold
as
reported
on
the
New
York
Stock
Exchange
on
such
date.

As
of
February
8,
2019
,
the
registrant
had
46,227,148
common
units
outstanding.

Table
of
Contents

PART I

Item
1.

Business

Item
1A.

Risk
Factors

Item
1B.

Unresolved
Staff
Comments

SUNCOKE ENERGY PARTNERS, L.P.

TABLE OF CONTENTS

Item
2.

Item
3.

Item
4.

PART II

Item
5.

Item
6.

Item
7.

Properties

Legal
Proceedings

Mine
Safety
Disclosures

Market
for
Registrant’s
Common
Equity,
Related
Stockholders
Matters
and
Issuer
Purchases
of
Equity
Securities

Selected
Financial
Data

Management’s
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations

Item
7A.

Quantitative
and
Qualitative
Disclosures
About
Market
Risk

Item
8.

Item
9.

Financial
Statements
and
Supplementary
Data

Changes
in
and
Disagreements
with
Accountants
on
Accounting
and
Financial
Disclosure

Item
9A.

Controls
and
Procedures

Item
9B.

Other
Information

PART III

Item
10.

Directors,
Executive
Officers
and
Corporate
Governance

Item
11.

Executive
Compensation

Item
12.

Security
Ownership
of
Certain
Beneficial
Owners
and
Management
and
Related
Stockholder
Matters

Item
13.

Certain
Relationships
and
Related
Transactions,
and
Director
Independence

Item
14.

Principal
Accounting
Fees
and
Services

PART IV

Item
15.

Exhibits,
Financial
Statement
Schedules

100

103

105

107

Table
of
Contents

Item 1.

Business

Overview

PART I

SunCoke
Energy
Partners,
L.P.,
(the
“Partnership,”
“we,”
“our”
and
“us”),
primarily
produces
coke
used
in
the
blast
furnace
production
of
steel.
Coke
is
a

principal
raw
material
in
the
blast
furnace
steelmaking
process
and
is
produced
by
heating
metallurgical
coal
in
a
refractory
oven,
which
releases
certain
volatile
components
from
the
coal,
thus
transforming
the
coal
into
coke.

We
also
provide
handling
and/or
mixing
services
to
steel,
coke
(including
some
of
our
and
SunCoke
Energy,
Inc.'s
(“SunCoke”)
domestic
cokemaking
facilities),
electric
utility,
coal
producing
and
other
manufacturing
based
customers.

At
December
31,
2018
,
we
owned
a
98
percent
interest
in
Haverhill
Coke
Company
LLC
(“Haverhill”),
Middletown
Coke
Company,
LLC
(“Middletown”)
and
Gateway
Energy
and
Coke
Company,
LLC
(“Granite
City”)
and
SunCoke
owned
the
remaining
2
percent
interest
in
each
of
Haverhill,
Middletown,
and
Granite
City.
The
Partnership
also
owns
a
100
percent
interest
in
all
of
its
logistics
terminals.
Through
its
subsidiary,
SunCoke
owned
a
60.4
percent
limited
partnership
interest
in
us
and
indirectly
owned
and
controls
our
general
partner,
which
holds
a
2
percent
general
partner
interest
in
us
and
all
of
our
incentive
distribution
rights
(“IDRs”).

On
February
5,
2019,
SunCoke
and
the
Partnership
announced
that
they
have
entered
into
a
definitive
agreement
whereby
SunCoke
will
acquire
all

outstanding
common
units
of
the
Partnership
not
already
owned
by
SunCoke
in
a
stock-for-unit
merger
transaction
(the
“Simplification
Transaction”).
Pursuant
to
the
terms
of
this
agreement
(“Merger
Agreement”),
Partnership
unaffiliated
common
unitholders
will
receive
1.40
SunCoke
common
shares,
plus
a
fraction
of
a
SunCoke
common
share
based
on
a
ratio
as
further
described
in
the
Merger
Agreement,
for
each
Partnership
common
unit.
On
behalf
of
the
Partnership
and
its
public
unitholders,
the
terms
of
the
Simplification
Transaction
were
negotiated,
reviewed
and
approved
by
the
conflicts
committee
of
the
Board
of
Directors
of
the
Partnership's
general
partner,
which
consisted
solely
of
independent
directors.
The
transaction
was
approved
by
the
Board
of
Directors
of
the
general
partner
of
the
Partnership
and
the
Board
of
Directors
of
SunCoke.

Following
completion
of
the
Simplification
Transaction,
the
Partnership
will
become
a
wholly-owned
subsidiary
of
SunCoke,
the
Partnership's
common
units
will
cease
to
be
publicly
traded
and
the
Partnership's
IDRs
will
be
eliminated.

The
Simplification
Transaction
is
expected
to
close
late
in
the
second
quarter
of
2019
or
early
in
the
third
quarter
of
2019,
subject
to
customary
closing
conditions,
including
the
approval
by
holders
of
a
majority
of
the
outstanding
SunCoke
common
shares
and
Partnership
common
units,
as
well
as
customary
regulatory
approvals.
SunCoke
indirectly
owns
the
majority
of
the
Partnership
common
units,
which
is
sufficient
to
approve
the
transaction
on
behalf
of
the
holders
of
Partnership
common
units.

We
were
organized
in
Delaware
since
July
2012,
and
are
headquartered
in
Lisle,
Illinois.
We
are
a
master
limited
partnership
whose
common
units,

representing
limited
partnership
interests,
were
first
listed
for
trading
on
the
New
York
Stock
Exchange
(“NYSE”)
in
January
2013
under
the
symbol
“SXCP.”

Table
of
Contents

Cokemaking Operations

The
following
table
sets
forth
information
about
our
cokemaking
facilities:

Facility

Haverhill
I

Haverhill
II

Middletown
(1)

Granite
City

Total

Location

Coke Customer

Franklin
Furnace,
Ohio

Middletown,
Ohio
Granite
City,

Illinois

AM
USA

AK
Steel

AK
Steel
U.S.
Steel

Year of
Start Up

2005

2008

2011

2009

Contract
Expiration

December
2020

December
2021

December
2032

December
2025

Number of
Coke Ovens

Annual Cokemaking
Nameplate
Capacity
(thousands of tons)

Use of Waste Heat

100

120

420

550
Process
steam
550
Power
generation
550
Power
generation
650

Steam
for
power
generation

2,300

(1) Cokemaking
nameplate
capacity
represents
stated
capacity
for
the
production
of
blast
furnace
coke.
Middletown
production
and
sales
volumes
are
based
on
“run
of
oven”
capacity,
which
includes
both
blast
furnace
coke
and
small
coke.
Using
the
stated
capacity,
Middletown
nameplate
capacity
on
a
“run
of
oven”
basis
is
approximately
578
thousand
tons
per
year.

Together,
we
and
SunCoke
are
the
largest
independent
producer
of
high-quality
coke
in
the
Americas,
as
measured
by
tons
of
coke
produced
each
year,

and,
in
our
opinion,
SunCoke
is
the
technological
leader
in
the
cokemaking
process
with
over
55
years
of
coke
production
experience.
SunCoke
designed,
developed,
built,
and
currently
owns
and
operates
five
cokemaking
facilities
in
the
United
States
(“U.S.”)
(including,
together
with
us,
Haverhill,
Middletown
and
Granite
City)
with
an
aggregate
coke
production
capacity
of
approximately
4.2
million
tons
per
year.
Our
cokemaking
ovens
have
collective
capacity
to
produce
2.3
million
tons
of
coke
annually
and
utilize
efficient,
modern
heat
recovery
technology
designed
to
combust
the
coal’s
volatile
components
liberated
during
the
cokemaking
process
and
use
the
resulting
heat
to
create
steam
or
electricity
for
sale.
This
differs
from
by-product
cokemaking,
which
seeks
to
repurpose
the
coal’s
liberated
volatile
components
for
other
uses.
SunCoke
has
constructed
the
only
greenfield
cokemaking
facility
in
the
U.S.
in
approximately
30
years
and
is
the
only
North
American
coke
producer
that
utilizes
heat
recovery
technology
in
the
cokemaking
process.

SunCoke's
advanced
heat
recovery
cokemaking
process
has
numerous
advantages
over
by-product
cokemaking,
including
producing
higher
quality
coke,
using
waste
heat
to
generate
derivative
energy
for
resale
and
reducing
the
environmental
impact.
The
Clean
Air
Act
Amendments
of
1990
specifically
directed
the
U.S.
Environmental
Protection
Agency
(“EPA”)
to
evaluate
its
heat
recovery
coke
oven
technology
as
a
basis
for
establishing
Maximum
Achievable
Control
Technology
(“MACT”)
standards
for
new
cokemaking
facilities.
In
addition,
each
of
the
four
cokemaking
facilities
that
SunCoke
has
built
since
1990
has
either
met
or
exceeded
the
applicable
Best
Available
Control
Technology
(“BACT”),
or
Lowest
Achievable
Emission
Rate
(“LAER”)
standards,
as
applicable,
set
forth
by
the
EPA
for
cokemaking
facilities
at
that
time.

Our
Granite
City
facility
and
the
first
phase
of
our
Haverhill
facility,
or
Haverhill
I,
have
steam
generation
facilities
which
use
hot
flue
gas
from
the
cokemaking
process
to
produce
steam
for
sale
to
customers
pursuant
to
steam
supply
and
purchase
agreements.
Granite
City
sells
steam
to
United
States
Steel
Corporation
("U.S.
Steel")
and
Haverhill
I
provides
steam,
at
minimal
cost,
to
Altivia
Petrochemicals,
LLC.
Our
Middletown
facility
and
the
second
phase
of
our
Haverhill
facility,
or
Haverhill
II,
have
cogeneration
plants
that
use
the
hot
flue
gas
created
by
the
cokemaking
process
to
generate
electricity,
which
either
is
sold
into
the
regional
power
market
or
to
AK
Steel
Holding
Corporation
("AK
Steel")
pursuant
to
energy
sales
agreements.

Our
core
business
model
is
predicated
on
providing
steelmakers
an
alternative
to
investing
capital
in
their
own
captive
coke
production
facilities.
We
direct
our
marketing
efforts
principally
towards
steelmaking
customers
that
require
coke
for
use
in
their
blast
furnaces.
Substantially
all
of
our
coke
sales
were
made
pursuant
to
long-term,
take-or-pay
agreements
with
AK
Steel,
ArcelorMittal
USA
LLC
and/or
its
affiliates
(“AM
USA”)
and
U.S.
Steel,
three
of
the
largest
blast
furnace
steelmakers
in
North
America,
each
of
which
individually
accounts
for
greater
than
ten
percent
of
our
consolidated
revenues.
The
take-or-pay
provisions
require
us
to
produce
the
contracted
volumes
of
coke
and
require
our
customers
to
purchase
such
volumes
of
coke
up
to
a
specified
tonnage
or
pay
the
contract
price
for
any
tonnage
they
elect
not
to
take.
As
a
result,
our
ability
to
produce
the
contracted
coke
volume
is
a
key
determinant
of
our
profitability.
We
generally
do
not
have
significant
spot
coke
sales
since
our
capacity
is
consumed
by
long-term
contracts;
accordingly,
spot

Table
of
Contents

prices
for
coke
do
not
generally
affect
our
revenues.
To
date,
our
coke
customers
have
satisfied
their
obligations
under
these
agreements.

Our
coke
sales
agreements
have
an
average
remaining
term
of
approximately
seven
years
and
contain
pass-through
provisions
for
costs
we
incur
in
the

cokemaking
process,
including
coal
and
coal
procurement
costs
subject
to
meeting
contractual
coal-to-coke
yields,
operating
and
maintenance
costs,
costs
related
to
transportation
of
coke
to
our
customers,
taxes
(other
than
income
taxes)
and
costs
associated
with
changes
in
regulation.
When
targeted
coal-to-coke
yields
are
achieved,
the
price
of
coal
is
not
a
significant
determining
factor
in
the
profitability
of
these
facilities,
although
it
does
affect
our
revenue
and
cost
of
sales
for
these
facilities
in
approximately
equal
amounts.
However,
to
the
extent
that
the
actual
coal-to-coke
yields
are
less
than
the
contractual
standard,
we
are
responsible
for
the
cost
of
the
excess
coal
used
in
the
cokemaking
process.
Conversely,
to
the
extent
our
actual
coal-to-coke
yields
are
higher
than
the
contractual
standard,
we
realize
gains.
As
coal
prices
increase,
the
benefits
associated
with
favorable
coal-to-coke
yields
also
increase.
These
features
of
our
coke
sales
agreements
reduce
our
exposure
to
variability
in
coal
price
changes
and
inflationary
costs
over
the
remaining
terms
of
these
agreements.

Our
coke
prices
include
both
an
operating
cost
component
and
a
fixed
fee
component.
Operating
costs
under
three
of
our
coke
sales
agreements
are

passed
through
to
the
respective
customers
subject
to
an
annually
negotiated
budget,
in
some
cases
subject
to
a
cap
annually
adjusted
for
inflation,
and
we
share
any
difference
in
costs
from
the
budgeted
amounts
with
our
customers.
Under
our
one
other
coke
sales
agreement,
the
operating
cost
component
for
our
coke
sales
are
fixed
subject
to
an
annual
adjustment
based
on
an
inflation
index.
Accordingly,
actual
operating
costs
in
excess
of
caps
or
budgets
can
have
a
significant
impact
on
the
profitability
of
all
our
domestic
cokemaking
facilities.
The
fixed
fee
component
for
each
ton
of
coke
sold
to
the
customer
is
determined
at
the
time
the
coke
sales
agreement
is
signed
and
is
effective
for
the
term
of
each
sales
agreement.
The
fixed
fee
is
intended
to
provide
an
adequate
return
on
invested
capital
and
may
differ
based
on
investment
levels
and
other
considerations.
The
actual
return
on
invested
capital
at
any
facility
is
based
on
the
fixed
fee
per
ton
and
favorable
or
unfavorable
performance
on
pass-through
cost
items.

The
coke
sales
agreement
and
energy
sales
agreement
with
AK
Steel
at
our
Haverhill
facility
are
subject
to
early
termination
by
AK
Steel
only
if
AK

Steel
meets
both
of
the
following
two
criteria:
(1)
AK
Steel
permanently
shuts
down
operation
of
the
iron
producing
portion
of
its
Ashland
Works
Plant
and
(2)
AK
Steel
has
not
acquired
or
begun
construction
of
a
new
blast
furnace
in
the
U.S.
to
replace,
in
whole
or
in
part,
the
Ashland
Works
Plant
iron
production
capacity.
If
AK
Steel
were
able
to
satisfy
both
criteria
and
chose
to
elect
early
termination,
AK
Steel
must
provide
two
years
advance
notice
of
the
termination.
During
the
two-year
notice
period,
AK
Steel
must
continue
to
perform
in
full
under
the
terms
of
the
coke
sales
agreement
and
energy
sales
agreement.
On
January
28,
2019,
AK
Steel
announced
its
intention
to
permanently
close
its
Ashland
Works
Plant
by
the
end
of
2019.
Were
the
Ashland
Works
Plant
to
permanently
shut
down,
we
believe
AK
Steel
has
not
and
would
not
satisfy
the
second
criterion.
No
other
coke
sales
agreement
has
an
early
termination
clause.

While
our
steelmaking
customers
continue
to
operate
in
an
environment
that
is
challenged
by
global
overcapacity,
throughout
2018
they
benefited
from

improved
steel
pricing,
favorable
trade
policies,
including
U.S.
steel
tariffs
signed
into
order
during
the
first
half
of
2018,
and
solid
end
market
demand.
Imports
of
finished
steel
have
decreased
from
27
percent
of
U.S.
steel
consumption
in
2017
to
approximately
23
percent
of
U.S.
steel
consumption
in
2018.
U.S.
Steel
restarted
both
of
the
blast
furnaces
at
its
Granite
City
Works
facility
during
2018.

Logistics Operations

Our
logistics
business
consists
of
Convent
Marine
Terminal
(“CMT”),
Kanawha
River
Terminal
(“KRT”)
and
SunCoke
Lake
Terminal
(“Lake
Terminal”).
CMT,
located
in
Convent,
Louisiana,
is
one
of
the
largest
export
terminals
on
the
U.S.
Gulf
Coast.
CMT
provides
strategic
access
to
seaborne
markets
for
coal
and
other
bulk
materials.
Supporting
low-cost
Illinois
basin
coal
producers,
the
terminal
provides
loading
and
unloading
services
and
has
direct
rail
access
and
the
current
capability
to
transload
15
million
tons
annually
due
to
its
top
of
the
line
ship
loader.
The
facility
is
supported
by
long-term
contracts
with
volume
commitments
covering
10
million
tons
of
its
current
capacity
as
well
as
350
thousand
liquid
tons.
The
facility
also
serves
other
merchant
business
including
aggregates
(crushed
stone)
and
petroleum
coke.
CMT's
efficient
barge
unloading
capabilities
complement
its
rail
and
truck
offerings
and
provide
the
terminal
with
the
ability
to
transload
and
mix
a
significantly
broader
variety
of
materials,
including
coal,
petroleum
coke
and
other
materials
from
barges
at
its
dock.
KRT
is
a
leading
metallurgical
and
thermal
coal
mixing
and
handling
terminal
service
provider
with
collective
capacity
to
mix
and
transload
25
million
tons
annually
through
its
operations
in
Ceredo
and
Belle,
West
Virginia.
Lake
Terminal
is
located
in
East
Chicago,
Indiana
and
provides
coal
handling
and
mixing
services
to
SunCoke's
Indiana
Harbor
cokemaking
operations.

Table
of
Contents

Our
logistics
business
has
the
collective
capacity
to
mix
and/or
transload
more
than
40
million
tons
of
coal
and
other
aggregates
annually
and
has
storage
capacity
of
approximately
3
million
tons.
Our
terminals
act
as
intermediaries
between
our
customers
and
end
users
by
providing
transloading
and
mixing
services.
Materials
are
transported
in
numerous
ways,
including
rail,
truck,
barge
or
ship.
We
do
not
take
possession
of
materials
handled
but
instead
derive
our
revenue
by
providing
handling
and/or
mixing
services
to
our
customers
on
a
per
ton
basis.
Revenues
are
recognized
when
services
are
provided
as
defined
by
customer
contracts.
See
Note
14
to
our
consolidated
financial
statements
for
our
revenue
recognition
policies.
Logistics
services
provided
to
our
and
SunCoke's
domestic
cokemaking
facilities
are
provided
under
contracts
with
terms
equivalent
to
those
of
an
arm's-length
transactions.

The
financial
performance
of
our
logistics
business
is
substantially
dependent
upon
a
limited
number
of
customers.
Our
CMT
customers
are
impacted
by
seaborne
export
market
dynamics.
Fluctuations
in
the
benchmark
price
for
coal
delivery
into
northwest
Europe,
as
referenced
in
the
Argus/McCloskey's
Coal
Price
Index
report
(“API2
index
price”),
as
well
as
Newcastle
index
coal
prices,
as
referenced
in
the
Argus/McCloskey's
Coal
Price
Index
report
(“API5
index
price”),
which
reflect
high-ash
coal
prices
shipped
from
Australia,
contribute
to
our
customers'
decisions
to
place
tons
into
the
export
market
and
thus
impact
transloading
volumes
through
our
terminal
facility.
Our
KRT
terminals
serve
two
primary
domestic
markets,
metallurgical
coal
trade
and
thermal
coal
trade.
Metallurgical
markets
are
primarily
impacted
by
steel
prices
and
blast
furnace
operating
levels
whereas
thermal
markets
are
impacted
by
natural
gas
prices
and
electricity
demand.

Strong
API2
and
API5
index
prices
continued
to
provide
attractive
economics
for
Illinois
Basin
and
Northern
Appalachian
coal
producers
during
2018,
which
resulted
in
record
volumes
at
our
CMT
facility.
In
2018,
the
Mississippi
River
experienced
near-historic
water
levels,
which
adversely
impacted
our
barge
unloading
and
our
vessel
loading
activities
at
CMT.
At
KRT,
domestic
metallurgical
and
thermal
market
conditions
and
volumes
were
favorable
in
2018
compared
to
2017
due
to
increased
demand
from
steel
and
utility
customers.
However,
KRT
volumes
were
suppressed
during
2018
by
rail
availability
due
to
strong
demand
for
dry
bulk
products
in
the
export
market.

Seasonality

Our
revenues
in
our
cokemaking
business
and
much
of
our
logistics
business
are
tied
to
long-term,
take-or-pay
contracts,
and
as
such,
are
not
seasonal.
However,
our
cokemaking
profitability
is
tied
to
coal-to-coke
yields,
which
improve
in
drier
weather.
Accordingly,
the
coal-to-coke
yield
component
of
our
profitability
tends
to
be
more
favorable
in
the
third
quarter.
Extreme
weather
conditions
may
also
challenge
our
operating
costs
and
production
in
the
winter
months
for
our
domestic
coke
business.
KRT
service
demand
fluctuates
due
to
changes
in
the
domestic
electricity
markets.
Excessively
hot
summer
weather
or
cold
winter
weather
may
increase
commercial
and
residential
needs
for
heat
or
air
conditioning,
which
in
turn
may
increase
electricity
usage
and
the
demand
for
thermal
coal
and,
therefore,
may
favorably
impact
our
logistics
business.

Additionally,
at
CMT,
service
fluctuates
with
global
thermal
coal
prices
and
end
market
demand.
Activity
is
generally
lower
in
the
third
quarter,
typically
due
to
lower
European
demand
for
heat.
Operating
costs
at
CMT
are
impacted
by
water
levels
on
the
Mississippi
River,
which
are
often
higher
in
the
spring
months.

Raw Materials

Metallurgical
coal
is
the
principal
raw
material
for
our
cokemaking
operations.
All
of
the
metallurgical
coal
used
to
produce
coke
at
our
cokemaking

facilities
is
purchased
from
third-parties.
We
believe
there
is
an
adequate
supply
of
metallurgical
coal
available
in
the
U.S.
and
worldwide,
and
we
have
been
able
to
supply
coal
to
our
cokemaking
facilities
without
any
significant
disruption
in
coke
production.

Each
ton
of
coke
produced
at
our
facilities
requires
approximately
1.4
tons
of
metallurgical
coal.
In
2018,
we
purchased
approximately
3.4
million
tons
of

metallurgical
coal
for
our
coke
production.
Coal
is
generally
purchased
on
an
annual
basis
via
one-year
contracts
with
costs
passed
through
to
our
customers
in
accordance
with
the
applicable
coke
sales
agreements.
Occasionally,
shortfalls
in
deliveries
by
coal
suppliers
require
us
to
procure
supplemental
coal
volumes.
As
with
typical
annual
purchases,
the
cost
of
these
supplemental
purchases
is
also
generally
passed
through
to
our
customers.
In
2019,
certain
of
our
coal
contracts
contain
an
option
to
reduce
our
commitment
by
up
to
15
percent
at
the
Partnership's
discretion.
Most
coal
procurement
decisions
are
made
through
a
coal
committee
structure
with
customer
participation.
The
customer
can
generally
exercise
an
overriding
vote
on
most
coal
procurement
decisions.

Table
of
Contents

Transportation and Freight

For
inbound
transportation
of
coal
purchases,
our
cokemaking
facilities
have
long-term
transportation
agreements
and
where
necessary,
coal-mixing

agreements
that
run
concurrently
with
the
associated
coke
sales
agreements.
At
our
facilities
with
multiple
transportation
options,
including
rail
and
barge,
we
enter
into
short-term
transportation
contracts
from
year
to
year.

For
coke
sales,
the
point
of
delivery
varies
by
agreement
and
facility.
The
point
of
delivery
for
coke
sales
from
the
Haverhill
cokemaking
facilities
is

generally
designated
by
the
customer
and
shipments
are
made
by
railcar
under
a
long-term
transportation
agreement.
All
delivery
costs
are
passed
through
to
the
customers.
At
the
Middletown
and
Granite
City
cokemaking
facilities,
coke
is
delivered
primarily
by
a
conveyor
belt
leading
to
the
customer’s
blast
furnace.
Most
transportation
and
freight
costs
in
our
Logistics
segment
are
paid
by
the
customer
directly
to
the
transportation
provider.

Research and Development and Intellectual Property and Proprietary Rights

As
part
of
our
omnibus
agreement,
SunCoke
has
granted
us
a
royalty-free
license
to
use
the
name
“SunCoke”
and
related
marks.
Additionally,
SunCoke
has
granted
us
a
non-exclusive
right
to
use
all
of
SunCoke’s
current
and
future
cokemaking
and
related
technology
necessary
to
operate
our
business.
SunCoke’s
research
and
development
program
seeks
to
improve
existing
and
develop
promising
new
cokemaking
technologies
and
enhance
our
heat
recovery
processes.
Over
the
years,
this
program
has
produced
numerous
patents
related
to
heat
recovery
coking
design
and
operation,
including
patents
for
pollution
control
systems,
oven
pushing
and
charging
mechanisms,
oven
flue
gas
control
mechanisms
and
various
others.

Competition

Cokemaking

The
cokemaking
business
is
highly
competitive.
Most
of
the
world’s
coke
production
capacity
is
owned
by
blast
furnace
steel
companies
utilizing
by-

product
coke
oven
technology.
The
international
merchant
coke
market
is
largely
supplied
by
Chinese,
Colombian
and
Ukrainian
producers,
among
others,
though
it
is
difficult
to
maintain
high
quality
coke
in
the
export
market,
and
when
coupled
with
transportation
costs,
coke
imports
into
the
U.S.
are
often
not
economical.

The
principal
competitive
factors
affecting
our
cokemaking
business
include
coke
quality
and
price,
reliability
of
supply,
proximity
to
market,
access
to

metallurgical
coals
and
environmental
performance.
Our
oven
design
and
heat
recovery
technology
play
a
role
in
all
of
these
factors.
Competitors
include
merchant
coke
producers
as
well
as
the
cokemaking
facilities
owned
and
operated
by
blast
furnace
steel
companies.

In
the
past,
there
have
been
technologies
which
have
sought
to
produce
carbonaceous
substitutes
for
coke
in
the
blast
furnace.
While
none
have
proven

commercially
viable
thus
far,
we
monitor
the
development
of
competing
technologies
carefully.
We
also
monitor
ferrous
technologies,
such
as
direct
reduced
iron
production
("DRI"),
as
these
could
indirectly
impact
our
blast
furnace
customers.

We
believe
we
are
well-positioned
to
compete
with
other
coke
producers.
Together
with
SunCoke,
our
Domestic
Coke
segment
accounts
for

approximately
30
percent
of
the
U.S.
coke
market
capacity,
excluding
the
capacity
used
to
produce
foundry
coke.
Current
production
from
our
cokemaking
business
is
committed
under
long-term
take-or-pay
contracts.
As
a
result,
competition
mainly
affects
our
ability
to
obtain
new
contracts
supporting
development
of
additional
cokemaking
capacity,
re-contracting
existing
facilities,
as
well
as
the
sale
of
coke
in
the
spot
market.
Our
facilities
were
constructed
using
proven,
industry-leading
technology
with
many
proprietary
features
allowing
us
to
produce
consistently
higher
quality
coke
than
our
competitors
produce.
Additionally,
our
technology
allows
us
to
produce
heat
that
can
be
converted
into
steam
or
electrical
power.

Logistics

The
principal
competitors
of
CMT
are
located
on
the
U.S.
Gulf
Coast
or
U.S.
East
Coast.
CMT
is
one
of
the
largest
export
terminals
on
the
U.S.
Gulf

Coast
and
provides
strategic
access
to
seaborne
markets
for
coal
and
other
industrial
materials.
Additionally,
CMT
is
the
largest
bulk
material
terminal
in
the
lower
U.S.
with
direct
rail
access
on
the
Canadian
National
Railway.
In
2018,
CMT
accounted
for
approximately
47
percent
of
U.S.
thermal
coal
exports
from
the
U.S.
Gulf
Coast
and
approximately
20
percent
of
total
U.S.
thermal
coal
exports.
CMT
has
a
state-of-the-art
ship
loader,
which
is
the
largest
of
its
kind
in
the
world.
We
believe
this
ship
loader
has
the
fastest
loading
rate
available
in
the
Gulf
Region
and
should
allow
our
customers
to
benefit
from
lower
shipping
costs.
Additionally,
CMT
has
a
strategic
alliance
with
a
company
that
performs
barge
unloading
services
for
the
terminal,
which
provides
CMT
with
the
ability
to
transload
and
mix
a
significantly
broader
variety
of
materials.

Table
of
Contents

Our
KRT
competitors
are
generally
located
within
100
miles
of
our
operations.
KRT
has
fully
automated
and
computer-controlled
mixing
capabilities
that

mix
coal
to
within
two
percent
accuracy
of
customer
specifications.
KRT
also
has
the
ability
to
provide
pad
storage
and
has
access
to
both
CSX
and
Norfolk
Southern
rail
lines
as
well
as
the
Ohio
River
system.

Lake
Terminal
provides
coal
handling
and/or
mixing
services
to
SunCoke's
Indiana
Harbor
cokemaking
facility
and
therefore,
does
not
have
any

competitors.

Employees

We
are
managed
and
operated
by
the
officers
of
our
general
partner.
Our
operating
personnel
are
employees
of
our
operating
subsidiaries.
Our
operating

subsidiaries
had
approximately
545
employees
at
December
31,
2018.
Approximately
43
percent
of
our
operating
subsidiaries'
employees
are
represented
by
the
United
Steelworkers
union.
Additionally,
approximately
5
percent
are
represented
by
the
International
Union
of
Operating
Engineers.
The
labor
agreements
at
KRT,
Lake
Terminal
and
Haverhill
will
expire
on
April
30,
2019,
June
30,
2019
and
November
1,
2019,
respectively.
We
will
negotiate
the
renewal
of
these
agreements
in
2019
and
do
not
anticipate
any
work
stoppages.

Safety

We
are
committed
to
maintaining
a
safe
work
environment
and
ensuring
environmental
compliance
across
all
of
our
operations,
as
the
health
and
safety

of
our
employees
and
the
communities
in
which
we
operate
are
paramount.
We
employ
practices
and
conduct
training
to
help
ensure
that
our
employees
work
safely.
Furthermore,
we
utilize
processes
for
managing
and
monitoring
safety
and
environmental
performance.

We
have
consistently
operated
within
the
top
quartiles
for
the
U.S.
Occupational
Safety
and
Health
Administration’s
("OSHA")
recordable
injury
rates
as

measured
and
reported
by
the
American
Coke
and
Coal
Chemicals
Institute.

Legal and Regulatory Requirements

The
following
discussion
summarizes
the
principal
legal
and
regulatory
requirements
that
we
believe
may
significantly
affect
us.

Permitting and Bonding

• Permitting Process for Cokemaking Facilities. The
permitting
process
for
our
cokemaking
facilities
is
administered
by
the
individual
states.
However,
the
main
requirements
for
obtaining
environmental
construction
and
operating
permits
are
found
in
the
federal
regulations.
Once
all
requirements
are
satisfied,
a
state
or
local
agency
produces
an
initial
draft
permit.
Generally,
the
facility
reviews
and
comments
on
the
initial
draft.
After
accepting
or
rejecting
the
facility’s
comments,
the
agency
typically
publishes
a
notice
regarding
the
issuance
of
the
draft
permit
and
makes
the
permit
and
supporting
documents
available
for
public
review
and
comment.
A
public
hearing
may
be
scheduled,
and
the
EPA
also
has
the
opportunity
to
comment
on
the
draft
permit.
The
state
or
local
agency
responds
to
comments
on
the
draft
permit
and
may
make
revisions
before
a
final
construction
permit
is
issued.
A
construction
permit
allows
construction
and
commencement
of
operations
of
the
facility
and
is
generally
valid
for
at
least
18
months.
Generally,
construction
commences
during
this
period,
while
many
states
allow
this
period
to
be
extended
in
certain
situations.
A
facility's
operating
permit
may
be
a
state
operating
permit
or
a
Title
V
operating
permit.

• Air Quality. Our
cokemaking
facilities
employ
MACT
standards
designed
to
limit
emissions
of
certain
hazardous
air
pollutants.
Specific
MACT

standards
apply
to
door
leaks,
charging,
oven
pressure,
pushing
and
quenching.
Certain
MACT
standards
for
new
cokemaking
facilities
were
developed
using
test
data
from
SunCoke's
Jewell
cokemaking
facility
located
in
Vansant,
Virginia.
Under
applicable
federal
air
quality
regulations,
permitting
requirements
may
differ
among
facilities,
depending
upon
whether
the
cokemaking
facility
will
be
located
in
an
“attainment”
area—i.e.,
one
that
meets
the
national
ambient
air
quality
standards
(“NAAQS”)
for
certain
pollutants,
or
in
a
“non-attainment”
or
"unclassifiable"
area.
The
status
of
an
area
may
change
over
time
as
new
NAAQS
standards
are
adopted,
resulting
in
an
area
change
from
one
status
or
classification
to
another.
In
an
attainment
area,
the
facility
must
install
air
pollution
control
equipment
or
employ
BACT.
In
a
non-attainment
area,
the
facility
must
install
air
pollution
control
equipment
or
employ
procedures
that
meet
LAER
standards.
LAER
standards
are
the
most
stringent
emission
limitation
achieved
in
practice
by
existing
facilities.
Unlike
the
BACT
analysis,
cost
is
generally
not
considered
as
part
of
a
LAER
analysis,
and
emissions
in
a
non-attainment
area
must
be
offset
by
emission
reductions
obtained
from
other
sources.

Table
of
Contents

•

Stringent
NAAQS
for
ambient
nitrogen
dioxide
and
sulfur
dioxide
went
into
effect
in
2010.
In
July
2013,
the
EPA
identified
or
"designated"
as
non-attainment
29
areas
in
16
states
where
monitored
air
quality
showed
violations
of
the
2010
1-hour
SO2
NAAQS.
In
August
2015,
the
EPA
finalized
a
new
rulemaking
to
assist
in
implementation
of
the
primary
1-hour
SO2
NAAQS
that
requires
either
additional
monitoring,
or
modeling
of
ambient
air
SO2
levels
in
various
areas
including
where
certain
of
our
facilities
are
located.
By
July
2016,
states
subject
to
this
rulemaking
were
required
to
provide
the
EPA
with
either
a
modeling
approach
using
existing
emissions
data,
or
a
plan
to
undertake
ambient
air
monitoring
for
SO2
to
begin
in
2017.
For
states
that
choose
to
install
ambient
air
SO2
monitoring
stations,
after
three
years
of
data
has
been
collected,
or
sometime
in
2020,
the
EPA
will
evaluate
this
data
relative
to
the
appropriate
attainment
designation
for
the
areas
under
the
1-hour
SO2
NAAQS.
For
states
that
chose
to
model,
designations
were
made
by
December
2017.
This
rulemaking
required
certain
of
our
facilities
to
undertake
this
ambient
air
monitoring
or
modeling.
In
December
2017,
EPA
issued
a
final
designation
of
attainment
or
unclassifiable
for
all
areas
where
our
facilities
are
located.
These
designations
mean
that
no
future
action
is
required
for
the
facilities
with
respect
to
SO2
emissions
at
this
time.
However,
legal
challenges
to
these
designations
are
possible.
If
redesignated,
we
may
be
required
to
install
additional
pollution
controls
and
incur
greater
costs
of
operating
at
those
of
our
facilities
located
in
areas
that
EPA
determines
to
be
non-attainment
with
the
1-hour
SO2
NAAQS
based
on
its
evaluation
of
this
data.
In
2012,
a
NAAQS
for
fine
particulate
matter,
or
PM
2.5,
went
into
effect.
In
January
2015,
the
area
where
the
Granite
City
facility
is
located
were
designated
unclassifiable
for
PM
2.5,
and
the
area
where
the
Haverhill
facilities
are
located
were
designated
unclassifiable/attainment
for
PM
2.5.
In
April
2015,
the
area
where
the
Middletown
facility
is
located
was
designated
unclassifiable/attainment
for
PM
2.5.
In
November
2015,
the
EPA
revised
the
existing
NAAQS
for
ground
level
ozone
to
make
the
standard
more
stringent.
In
January
2018,
EPA
designated
the
area
where
the
Haverhill
facility
is
located
as
attainment/unclassifiable
for
ozone.
In
June
2018,
EPA
designated
the
areas
where
the
Granite
City
and
Middletown
facilities
are
located
as
marginal
nonattainment
for
ozone.
Nonattainment
designations
under
the
new
standards
and
any
future
more
stringent
standard
for
ozone
have
two
impacts
on
permitting:
(1)
demonstrating
compliance
with
the
standard
using
dispersion
modeling
from
a
new
facility
will
be
more
difficult;
and
(2)
facilities
operating
in
areas
that
become
non-attainment
areas
due
to
the
application
of
new
standards
may
be
required
to
install
Reasonably
Available
Control
Technology
(“RACT”).
A
number
of
states
have
filed
or
joined
suits
to
challenge
the
EPA’s
new
standard
in
court.
While
we
are
not
able
to
determine
the
extent
to
which
this
new
standard
will
impact
our
business
at
this
time,
it
does
have
the
potential
to
have
a
material
impact
on
our
operations
and
cost
structure.

The
EPA
adopted
a
rule
in
2010
requiring
a
new
facility
that
is
a
major
source
of
greenhouse
gases
(“GHGs”)
to
install
equipment
or
employ
BACT
procedures.
Currently,
there
is
little
information
on
what
may
be
acceptable
as
BACT
to
control
GHGs
(primarily
carbon
dioxide
from
our
facilities),
but
the
database
and
additional
guidance
may
be
enhanced
in
the
future.

Several
states
have
additional
requirements
and
standards
other
than
those
in
the
federal
statutes
and
regulations.
Many
states
have
lists
of
“air
toxics”
with
emission
limitations
determined
by
dispersion
modeling.
States
also
often
have
specific
regulations
that
deal
with
visible
emissions,
odors
and
nuisance.
In
some
cases,
the
state
delegates
some
or
all
of
these
functions
to
local
agencies.

• Wastewater and Stormwater. Our
heat
recovery
cokemaking
technology
does
not
produce
wastewater
as
is
typically
associated
with
by-product

cokemaking.
Our
cokemaking
facilities,
in
some
cases,
have
wastewater
discharge
and
stormwater
permits.

• Waste. The
primary
solid
waste
product
from
our
heat
recovery
cokemaking
technology
is
calcium
sulfate
from
flue
gas
desulfurization,
which
is

generally
taken
to
a
solid
waste
landfill.
The
solid
material
from
periodic
cleaning
of
heat
recovery
steam
generators
has
been
disposed
of
as
hazardous
waste.
On
the
whole,
our
heat
recovery
cokemaking
process
does
not
generate
substantial
quantities
of
hazardous
waste.

• U.S. Endangered Species Act. The
U.S.
Endangered
Species
Act
and
certain
counterpart
state
regulations
are
intended
to
protect
species
whose
populations
allow
for
categorization
as
either
endangered
or
threatened.
With
respect
to
permitting
additional
cokemaking
facilities,
protection
of
endangered
or
threatened
species
may
have
the
effect
of
prohibiting,
limiting
the
extent
of
or
placing
permitting
conditions
on
soil
removal,
road
building
and
other
activities
in
areas
containing
the
affected
species.
Based
on
the
species
that
have
been
designated
as
endangered
or
threatened
on
our
properties
and
the
current
application
of
these
laws
and
regulations,
we
do
not
believe
that
they
are
likely
to
have
a
material
adverse
effect
on
our
operations.

Table
of
Contents

• Permitting Process for Certain Coal Terminals. Certain
coal
terminal
operations
in
West
Virginia
and
Kentucky
have
state-issued
surface
mining

permits.
The
permit
application
process
is
initiated
by
collecting
baseline
data
to
adequately
characterize,
assess
and
model
the
pre-terminal
environmental
condition
of
the
permit
area,
including
soil
and
rock
structures,
cultural
resources,
soils,
surface
and
ground
water
hydrology,
and
existing
use.
The
permit
application
includes
the
coal
terminal
operations
plan
and
reclamation
plan,
documents
defining
ownership
and
agreements
pertaining
to
coal,
minerals,
oil
and
gas,
water
rights,
rights
of
way
and
surface
land
and
documents
required
by
the
Office
of
Surface
Mining
Reclamation
and
Enforcement’s
(“OSM’s”)
Applicant
Violator
System.
Once
a
permit
application
is
submitted
to
the
regulatory
agency,
it
goes
through
a
completeness
and
technical
review
before
a
public
notice
and
comment
period.
Regulatory
authorities
have
considerable
discretion
in
the
timing
of
the
permit
issuance
and
the
public
has
the
right
to
comment
on
and
otherwise
engage
in
the
permitting
process,
including
through
public
hearings
and
intervention
in
the
courts.
SMCRA
mine
permits
also
take
a
significant
period
of
time
to
be
transferred.

• Bonding Requirements for Coal Terminals with Surface Mining Permits. Before
a
surface
mining
permit
is
issued
in
West
Virginia,
a
mine
operator
must
submit
a
bond
or
other
form
of
financial
security
to
guarantee
the
payment
and
performance
of
certain
long-term
mine
closure
and
reclamation
obligations.
The
costs
of
these
bonds
or
other
forms
of
financial
security
have
fluctuated
in
recent
years
and
the
market
terms
of
surety
bonds
related
to
surface
mining
permits
generally
have
become
less
favorable
to
terminal
operators
and
others
with
such
permits.
These
and
other
changes
in
the
terms
of
such
bonds
have
been
accompanied,
at
times,
by
a
decrease
in
the
number
of
companies
willing
to
issue
surety
bonds.
As
of
December
31,
2018
,
we
have
posted
$0.3
million
in
surety
bonds
for
our
West
Virginia
and
Louisiana
coal
terminal
operations.

Regulation of Operations

• Clean Air Act. The
Clean
Air
Act
and
similar
state
laws
and
regulations
affect
our
cokemaking
operations,
primarily
through
permitting
and/or

emissions
control
requirements
relating
to
particulate
matter
(“PM”)
and
sulfur
dioxide
(“SO2”)
and
MACT
standards.
The
Clean
Air
Act
air
emissions
programs
that
may
affect
our
operations,
directly
or
indirectly,
include,
but
are
not
limited
to:
the
Acid
Rain
Program;
NAAQS
implementation
for
SO2,
PM
and
nitrogen
oxides
(“NOx”),
lead
ozone
and
carbon
monoxide;
GHG
rules;
the
Clean
Air
Interstate
Rule;
MACT
emissions
limits
for
hazardous
air
pollutants;
the
Regional
Haze
Program;
New
Source
Performance
Standards
(“NSPS”);
and
New
Source
Review.
The
Clean
Air
Act
requires,
among
other
things,
the
regulation
of
hazardous
air
pollutants
through
the
development
and
promulgation
of
various
industry-specific
MACT
standards.
Our
cokemaking
facilities
are
subject
to
two
categories
of
MACT
standards.
The
first
category
applies
to
pushing
and
quenching.
The
second
category
applies
to
emissions
from
charging
and
coke
oven
doors.
The
EPA
is
required
to
make
a
risk-based
determination
for
pushing
and
quenching
emissions
and
determine
whether
additional
emissions
reductions
are
necessary.
In
2016,
EPA
issued
a
request
for
information
and
testing
to
our
cokemaking
facilities
and
other
companies
as
part
of
its
residual
risk
and
technology
review
of
the
MACT
standard
for
pushing
and
quenching,
and
a
technology
review
of
the
MACT
standard
for
coke
ovens
and
charging
emissions.
Testing
was
conducted
by
our
cokemaking
facilities
in
2017,
but
the
EPA
has
yet
to
publish
or
propose
any
residual
risk
standards;
therefore,
the
impact
of
potential
additional
EPA
regulation
in
this
area
cannot
be
estimated
at
this
time.

• Terminal Operations. Our
terminal
operations
located
along
waterways
and
the
Gulf
of
Mexico
are
also
governed
by
permitting
requirements
under

the
CWA
and
CAA.
These
terminals
are
subject
to
U.S.
Coast
Guard
regulations
and
comparable
state
statutes
regarding
design,
installation,
construction,
and
management.
Many
such
terminals
owned
and
operated
by
other
entities
that
are
also
used
to
transport
coal
and
petcoke,
including
for
export,
have
been
pursued
by
environmental
interest
groups
for
alleged
violations
of
their
permits’
requirements,
or
have
seen
their
efforts
to
obtain
or
renew
such
permits
contested
by
such
groups.
While
we
believe
that
our
operations
are
in
material
compliance
with
these
permits,
it
is
possible
that
such
challenges
or
claims
will
be
made
against
our
operations
in
the
future.
Moreover,
our
terminal
operations
may
be
affected
by
the
impacts
of
additional
regulation
on
petcoke
or
on
the
mining
of
all
types
of
coal
and
use
of
thermal
coal
for
fuel,
which
is
restricting
supply
in
some
markets
and
may
reduce
the
volumes
of
coal
that
our
terminals
manage.

• Federal Energy Regulatory Commission. The
Federal
Energy
Regulatory
Commission
(“FERC”)
regulates
the
sales
of
electricity
from
our
Haverhill

and
Middletown
facilities,
including
the
implementation
of
the
Federal
Power
Act
(“FPA”)
and
the
Public
Utility
Regulatory
Policies
Act
of
1978
(“PURPA”).
The
nature
of
the
operations
of
the
Haverhill
and
Middletown
facilities
makes
each
facility
a
qualifying
facility
under
PURPA,
which
exempts
the
facilities
and
the
Partnership
from
certain
regulatory
burdens,
including
the
Public
Utility
Holding
Company
Act
of
2005
(“PUHCA”),
limited
provisions
of
the
FPA,
and
certain
state
laws
and

Table
of
Contents

regulation.
FERC
has
granted
requests
for
authority
to
sell
electricity
from
the
Haverhill
and
Middletown
facilities
at
market-based
rates
and
the
entities
are
subject
to
FERC’s
market-based
rate
regulations,
which
require
regular
regulatory
compliance
filings.

• Clean Water Act of 1972. Although
our
cokemaking
facilities
generally
do
not
have
water
discharge
permits,
the
Clean
Water
Act
(“CWA”)
may
affect
our
operations
by
requiring
water
quality
standards
generally
and
through
the
National
Pollutant
Discharge
Elimination
System
(“NPDES”).
Regular
monitoring,
reporting
requirements
and
performance
standards
are
requirements
of
NPDES
permits
that
govern
the
discharge
of
pollutants
into
water.
Discharges
must
either
meet
state
water
quality
standards
or
be
authorized
through
available
regulatory
processes
such
as
alternate
standards
or
variances.
Additionally,
through
the
CWA
Section
401
certification
program,
states
have
approval
authority
over
federal
permits
or
licenses
that
might
result
in
a
discharge
to
their
waters.
Similarly,
for
permitting
or
any
future
water
intake
and/or
discharge
projects,
our
facilities
could
be
subject
to
the
Army
Corps
of
Engineers
Section
404
permitting
process.

• Resource Conservation and Recovery Act. We
may
generate
wastes,
including
“solid”
wastes
and
“hazardous”
wastes
that
are
subject
to
the

Resource
Conservation
and
Recovery
Act
(“RCRA”)
and
comparable
state
statutes,
although
certain
mining
and
mineral
beneficiation
wastes
and
certain
wastes
derived
from
the
combustion
of
coal
currently
are
exempt
from
regulation
as
hazardous
wastes
under
RCRA.
The
EPA
has
limited
the
disposal
options
for
certain
wastes
that
are
designated
as
hazardous
wastes
under
RCRA.
Furthermore,
it
is
possible
that
certain
wastes
generated
by
our
operations
that
currently
are
exempt
from
regulation
as
hazardous
wastes
may
in
the
future
be
designated
as
hazardous
wastes,
and
therefore
be
subject
to
more
rigorous
and
costly
management,
disposal
and
clean-up
requirements.
Certain
of
our
wastes
are
also
subject
to
Department
of
Transportation
regulations
for
shipping
of
materials.

• Climate Change Legislation and Regulations. Our
facilities
are
presently
subject
to
the
GHG
reporting
rule,
which
obligates
us
to
report
annual
emissions
of
GHGs.
The
EPA
also
finalized
a
rule
in
2010
requiring
a
new
facility
that
is
a
major
source
of
GHGs
to
install
equipment
or
employ
BACT
procedures.
In
2014,
the
Supreme
Court
issued
an
opinion
holding
that
although
EPA
may
not
treat
GHGs
as
a
pollutant
for
the
purpose
of
determining
whether
a
source
must
obtain
a
PSD
or
Title
V
permit,
EPA
may
continue
to
require
GHG
limitations
in
permits
for
sources
classified
as
major
based
on
their
emission
of
other
pollutants.
Currently
there
is
little
information
as
to
what
may
constitute
BACT
for
GHG
in
most
industries.
Under
this
rule,
certain
modifications
to
our
facilities
could
subject
us
to
the
additional
permitting
and
other
obligations
relative
to
emissions
of
GHGs
under
the
New
Source
Review/Prevention
of
Significant
Deterioration
("NSR/PSD")
and
Title
V
programs
of
the
Clean
Air
Act
based
on
whether
the
facility
triggered
NSR/PSD
because
of
emissions
of
another
pollutant
such
as
SO2,
NOx,
PM,
ozone
or
lead.
The
EPA
has
engaged
in
rulemaking
to
regulate
GHG
emissions
from
existing
and
new
coal
fired
power
plants,
and
we
expect
continued
legal
challenges
to
this
rulemaking
and
any
future
rulemaking
for
other
industries.
For
instance,
in
August
2015,
the
EPA
issued
its
final
Clean
Power
Plan
rules
establishing
carbon
pollution
standards
for
power
plants.
In
February
2016,
the
U.S.
Supreme
Court
granted
a
stay
of
the
implementation
of
the
Clean
Power
Plan
before
the
U.S.
Court
of
Appeals
for
the
District
of
Columbia
(“D.C.
Circuit”)
issued
a
decision
on
the
rule.
By
its
terms,
this
stay
will
remain
in
effect
throughout
the
pendency
of
the
appeals
process
including
at
the
D.C.
Circuit
and
the
Supreme
Court
through
any
certiorari
petition
that
may
be
granted.
In
October
2017,
the
EPA
proposed
to
repeal
the
Clean
Power
Plan
("CPP")
although
the
final
outcome
of
this
proposal
and
the
pending
litigation
regarding
the
CPP
is
uncertain
at
this
time.
In
connection
with
this
proposed
repeal,
EPA
issued
an
Advanced
Notice
of
Proposed
Rulemaking
("ANPRM")
in
December
2017
regarding
emission
guidelines
to
limit
GHG
emissions
from
existing
electric
utility
generating
units.
The
ANPRM
seeks
comment
regarding
what
the
EPA
should
include
in
a
potential
new,
existing
source
regulation
of
GHG
emissions
under
the
Clean
Air
Act
that
the
EPA
may
propose.
On
October
9,
2018,
the
U.S.
Supreme
Court
rejected
any
further
challenges
to
the
decision
to
repeal
the
Clean
Power
Plan.
Although
EPA
proposed
the
Affordable
Clean
Energy
(“ACE”)
rule
as
a
replacement
for
the
CPP
in
August
2018,
the
ACE
rule
has
not
yet
been
finalized.

Currently,
we
do
not
anticipate
these
new
or
existing
power
plan
GHG
rules
to
impact
our
facilities.
However,
the
impact
current
and
future
GHG-
related
legislation
and
regulations
have
on
us
will
depend
on
a
number
of
factors,
including
whether
GHG
sources
in
multiple
sectors
of
the
economy
are
regulated,
the
overall
GHG
emissions
cap
level,
the
degree
to
which
GHG
offsets
are
allowed,
the
allocation
of
emission
allowances
to
specific
sources
decisions
by
states
regarding
the
sources
that
will
be
subject
to
any
implementing
programs
they
may
adopt
and
the
indirect
impact
of
carbon
regulation
on
coal
prices.
We
may
not
recover
the
costs
related
to
compliance
with
regulatory
requirements
imposed
on
us
from
our
customers
due
to
limitations
in
our
agreements.
The
imposition
of
a
carbon
tax
or
similar
regulation
could
materially
and
adversely
affect
our

Table
of
Contents

revenues.
Collectively,
these
requirements
along
with
restrictions
and
requirements
regarding
the
mining
of
all
types
of
coal
may
reduce
the
volumes
of
coal
that
we
manage
and
may
ultimately
adversely
impact
our
customers.
Depending
on
whether
another
rule
is
promulgated
in
the
future,
it
could
increase
the
demand
for
natural
gas-generated
electricity.

• Mine Improvement and New Emergency Response Act of 2006. The
Mine
Improvement
and
New
Emergency
Response
Act
of
2006
(the
“Miner
Act”),
has
increased
significantly
the
enforcement
of
safety
and
health
standards
and
imposed
safety
and
health
standards
on
all
aspects
of
mining
operations.
There
also
has
been
a
significant
increase
in
the
dollar
penalties
assessed
for
citations
issued.

• Safety. Our
facilities
are
subject
to
regulation
by
the
Occupational
Safety
and
Health
Administration
(OSHA)
of
the
United
States
Department
of
Labor
and
other
agencies
with
standards
designed
to
ensure
worker
safety.
As
noted
above,
we
have
consistently
operated
within
the
top
quartiles
for
OSHA’s
recordable
injury
rates
as
measured
and
reported
by
the
American
Coke
and
Coal
Chemicals
Institute.

• Security. CMT
is
subject
to
regulation
by
the
U.S.
Coast
Guard
pursuant
to
the
Maritime
Transportation
Security
Act.
We
have
an
internal
inspection

program
designed
to
monitor
and
ensure
compliance
by
CMT
with
these
requirements.
We
believe
that
we
are
in
material
compliance
with
all
applicable
laws
and
regulations
regarding
the
security
of
the
facility.

Reclamation and Remediation

• Comprehensive Environmental Response, Compensation, and Liability Act. Under
the
Comprehensive
Environmental
Response,
Compensation,

and
Liability
Act
(“CERCLA”),
also
known
as
Superfund,
and
similar
state
laws,
responsibility
for
the
entire
cost
of
clean-up
of
a
contaminated
site,
as
well
as
natural
resource
damages,
can
be
imposed
upon
current
or
former
site
owners
or
operators,
or
upon
any
party
who
released
one
or
more
designated
“hazardous
substances”
at
the
site,
regardless
of
the
lawfulness
of
the
original
activities
that
led
to
the
contamination.
In
the
course
of
our
operations
we
may
have
generated
and
may
generate
wastes
that
fall
within
CERCLA’s
definition
of
hazardous
substances.
We
also
may
be
an
owner
or
operator
of
facilities
at
which
hazardous
substances
have
been
released
by
previous
owners
or
operators.
Under
CERCLA,
we
may
be
responsible
for
all
or
part
of
the
costs
of
cleaning
up
facilities
at
which
such
substances
have
been
released
and
for
natural
resource
damages.
We
also
must
comply
with
reporting
requirements
under
the
Emergency
Planning
and
Community
Right-to-Know
Act
and
the
Toxic
Substances
Control
Act.

Environmental Matters and Compliance

Our
failure
to
comply
with
the
aforementioned
requirements
may
result
in
the
assessment
of
administrative,
civil
and
criminal
penalties,
the
imposition
of
clean-up
and
site
restoration
costs
and
liens,
the
issuance
of
injunctions
to
limit
or
cease
operations,
the
suspension
or
revocation
of
permits
and
other
enforcement
measures
that
could
have
the
effect
of
limiting
production
from
our
operations.
The
EPA
and
state
regulators
have
issued
Notices
of
Violations
(“NOVs”)
for
the
Haverhill
and
Granite
City
cokemaking
facilities
which
stem
from
alleged
violations
of
air
operating
permits
for
these
facilities.
SunCoke
is
working
in
a
cooperative
manner
with
the
EPA
and
Ohio
Environmental
Protection
Agency
to
address
the
allegations
and
has
entered
into
a
consent
decree
in
federal
district
court
with
these
parties.
The
consent
decree
includes
an
approximately
$2.2
million
civil
penalty
payment
that
was
paid
by
SunCoke
in
December
2014,
as
well
as
capital
projects
underway
to
improve
the
reliability
of
the
energy
recovery
systems
and
enhance
environmental
performance
at
the
Haverhill
and
Granite
City
facilities.
We
retained
an
aggregate
of
$119
million
in
proceeds
from
our
initial
public
offering
and
subsequent
dropdowns
to
comply
with
the
expected
terms
of
a
consent
decree
at
the
Haverhill
and
Granite
City
cokemaking
operations.
SunCoke
and
the
Partnership
anticipate
spending
approximately
$150
million
to
comply
with
these
environmental
remediation
projects.
Pursuant
to
the
omnibus
agreement,
any
amounts
that
we
spend
on
these
projects
in
excess
of
the
$119
million
will
be
reimbursed
by
SunCoke.
Prior
to
our
formation,
SunCoke
spent
approximately
$7
million
related
to
these
projects.
The
Partnership
has
spent
approximately
$131
million
to
date
and
expects
to
spend
the
remaining
capital
through
the
first
half
of
2019.
SunCoke
has
reimbursed
the
Partnership
approximately
$20
million
for
the
estimated
additional
spending
beyond
what
has
previously
been
funded.

Many
other
legal
and
administrative
proceedings
are
pending
or
may
be
brought
against
us
arising
out
of
our
current
and
past
operations,
including

matters
related
to
commercial
and
tax
disputes,
product
liability,
antitrust,
employment
claims,
natural
resource
damage
claims,
premises-liability
claims,
allegations
of
exposures
of
third-parties
to
toxic
substances
and
general
environmental
claims.
Although
the
ultimate
outcome
of
these
proceedings
cannot
be
ascertained
at
this
time,
it
is
reasonably
possible
that
some
of
them
could
be
resolved
unfavorably
to
us.
Our
management
believes
that
any
liabilities
that
may
arise
from
such
matters
would
not
be
material
in
relation
to
our
business
or
our
consolidated
financial
position,
results
of
operations
or
cash
flows
at
December
31,
2018
.

Table
of
Contents

Under
the
terms
of
the
omnibus
agreement,
SunCoke
will
indemnify
us
for
certain
environmental
remediation
projects
costs.
Please
read
“Part
III.

Item
13.
Certain
Relationships
and
Related
Transactions,
and
Director
Independence—Agreements
Entered
Into
with
Affiliates
in
Connection
with
our
Initial
Public
Offering—Omnibus
Agreement.”

IRS Final Regulations on Qualifying Income

Section
7704
of
the
Internal
Revenue
Code
(the
"Code")
provides
that
a
publicly-traded
partnership
will
be
treated
as
a
corporation
for
federal
income
tax
purposes.
However,
if
90
percent
or
more
of
a
partnership’s
gross
income
for
every
taxable
year
it
is
publicly-traded
consists
of
“qualifying
income,”
the
publicly-
traded
partnership
may
continue
to
be
treated
as
a
partnership
for
federal
income
tax
purposes.

At
the
time
of
our
initial
public
offering,
in
January
2013,
we
believed,
and
received
a
legal
opinion
to
the
effect,
that
income
from
our
cokemaking
operations
would
be
treated
as
generating
qualifying
income
under
the
Code.

The
Partnership
and
counsel
believed
at
the
time
that
this
view
was
based
on
the
correct
interpretation
of
the
Code
and
the
legislative
history
of
the
relevant
Code
section,
and
since
that
time
continued
to
believe
that
income
from
its
cokemaking
operations
is
qualifying
income.

On
January
19,
2017,
the
Treasury
Department
and
the
Internal
Revenue
Service
("IRS")
issued
qualifying
income
regulations
(the
"Final
Regulations")
on
the
treatment
of
income
from
natural
resource
activities
of
publicly
traded
partnerships
as
qualifying
income
for
purposes
of
the
Code.

The
Final
Regulations
were
published
in
the
Federal
Register
on
January
24,
2017,
and
apply
to
taxable
years
beginning
after
January
19,
2017.

Under
the
Final
Regulations,
the
Partnership’s
cokemaking
operations
have
been
excluded
from
the
definition
of
activities
that
generate
qualifying
income.

The
Final
Regulations
provide
that
if
a
partnership’s
income
from
non-qualifying
operations
“was
qualifying
income
under
the
statute
as
reasonably

interpreted,”
then
that
partnership
will
have
a
transition
period
ending
on
the
last
day
of
the
partnership’s
taxable
year
that
included
the
date
that
is
ten
years
after
the
date
the
Final
Regulations
are
published
in
the
Federal
Register
(i.e.,
December
31,
2027),
during
which
it
can
treat
income
from
such
activities
as
qualifying
income.
After
conferring
with
outside
counsel,
the
Partnership
is
of
the
view
that
its
interpretation
was
reasonable
in
concluding
that
the
Partnership’s
income
from
cokemaking
was
qualifying
income,
and
that
the
Partnership
will
benefit
from
the
ten-year
transition
period.
Subsequent
to
the
transition
period,
certain
cokemaking
entities
in
the
Partnership
will
become
taxable
as
corporations.
Also
see
“Part
I.
Item
1A.
Risk
Factors"
and
Note
6
to
the
consolidated
financial
statements.

The
present
federal
income
tax
treatment
of
publicly
traded
partnerships,
including
the
Partnership,
or
an
investment
in
its
common
units,
may
be

modified
by
administrative,
legislative
or
judicial
interpretation
at
any
time.
Any
modification
to
the
federal
income
tax
laws
and
interpretations
thereof
may
or
may
not
be
applied
retroactively.
Moreover,
any
such
modification
could
make
it
more
difficult
or
impossible
for
the
Partnership
to
meet
the
exception
which
allows
publicly
traded
partnerships
that
generate
qualifying
income
to
be
treated
as
partnerships
(rather
than
corporations)
for
U.S.
federal
income
tax
purposes,
affect
or
cause
us
to
change
our
business
activities,
or
affect
the
tax
consequences
of
an
investment
in
its
common
units.
For
example,
as
discussed
above,
on
January
24,
2017,
Final
Regulations
were
published
in
the
Federal
Register
and
apply
to
taxable
years
beginning
on
or
after
January
19,
2017.
The
Final
Regulations
will
likely
affect
the
ability
of
partnerships
to
continue
to
qualify
as
a
publicly
traded
partnership.

Available Information

We
make
available
free
of
charge,
through
our
website,
www.suncoke.com
,
our
annual
reports
on
Form
10-K,
quarterly
reports
on
Form
10-Q,
current
reports
on
Form
8-K
and
amendments
to
those
reports
filed
or
furnished
pursuant
to
Section
13(a)
or
15(d)
of
the
Exchange
Act
as
soon
as
reasonably
practicable
after
we
electronically
file
or
furnish
such
material
with
the
Securities
and
Exchange
Commission,
or
SEC.
These
documents
are
also
available
at
the
SEC’s
website
at
www.sec.gov
.
Our
website
also
includes
our
Code
of
Business
Conduct
and
Ethics,
our
Governance
Guidelines,
our
Related
Persons
Transaction
Policy
and
the
charters
of
our
Audit
Committee
and
conflicts
committee.

A
copy
of
any
of
these
documents
will
be
provided
without
charge
upon
written
request
to
Investor
Relations,
SunCoke
Energy
Partners,
L.P.,
1011

Warrenville
Road,
Suite
600,
Lisle,
Illinois
60532.

Table
of
Contents

Item 1A.

Risk Factors

In
addition
to
the
other
information
included
in
this
Annual
Report
on
Form
10-K,
the
following
risk
factors
should
be
considered
in
evaluating
our

business
and
future
prospects.
These
risk
factors
represent
what
we
believe
to
be
the
known
material
risk
factors
with
respect
to
us
and
our
business.
Our
business,
operating
results,
cash
flows
and
financial
condition
are
subject
to
these
risks
and
uncertainties,
any
of
which
could
cause
actual
results
to
vary
materially
from
recent
results
or
from
anticipated
future
results.

These
risks
are
not
the
only
risks
we
face.
Additional
risks
and
uncertainties
not
currently
known
to
us,
or
that
we
currently
deem
to
be
immaterial
also

may
materially
and
adversely
affect
our
business,
financial
condition,
or
results
of
operations.

Risk Related to the Simplification Transaction

The proposed Simplification Transaction is subject to conditions, including some conditions that may not be satisfied on a timely basis, if at all.

Failure to complete the Simplification Transaction, or significant delays in completing the Simplification Transaction, could negatively affect each party's
future business and financial results and the trading prices of our common units and SunCoke’s common stock.

Completion
of
the
proposed
Simplification
Transaction
is
subject
to
a
number
of
conditions,
including
approval
of
(i)
the
Merger
Agreement
by
SunCoke’s
common
stockholders
and
(ii)
the
issuance
of
the
SunCoke’s
common
stock
to
be
used
as
merger
consideration,
which
make
the
completion
and
timing
of
the
consummation
of
the
Simplification
Transaction
uncertain.
Also,
either
the
Partnership
or
SunCoke
may
terminate
the
Merger
Agreement
if
the
Simplification
Transaction
has
not
been
completed
by
September
30,
2019,
except
that
this
termination
right
will
not
be
available
to
any
party
whose
failure
to
perform
any
obligation
under
the
Merger
Agreement
has
been
the
principal
cause
of,
or
resulted
in,
the
failure
of
the
proposed
Simplification
Transaction
to
be
consummated
by
such
date.

Completion
of
the
proposed
Simplification
Transaction
is
not
assured
and
is
subject
to
several
risks
and
uncertainties,
including
the
risk
that
the
required

approvals
may
not
obtained
,
or
even
if
obtained,
still
may
not
result
in
successful
completion
of
the
Simplification
Transaction.
In
addition,
the
proposed
Simplification
Transaction
is
subject
to
a
number
of
conditions,
some
of
which
are
beyond
the
parties'
control,
that,
if
not
satisfied
or
waived,
may
prevent,
delay
or
otherwise
result
in
the
proposed
Simplification
Transaction
not
occurring.

If
the
proposed
Simplification
Transaction
is
not
completed,
or
if
there
are
significant
delays
in
completing
the
proposed
Simplification
Transaction,
the

Partnership's
and
SunCoke’s
future
business
and
financial
results
and
the
trading
prices
of
our
common
units
and
SunCoke’s
common
stock
could
be
negatively
affected,
and
each
of
the
parties
will
be
subject
to
several
risks,
including
the
following:

•

the
parties
may
be
liable
for
fees
or
expenses
to
one
another
under
the
terms
and
conditions
of
the
Merger
Agreement;

there
may
be
negative
reactions
from
the
financial
markets
due
to
the
fact
that
current
prices
of
our
common
units
and
SunCoke's
common
stock
may
reflect
a
market
assumption
that
the
proposed
Simplification
Transaction
will
be
completed;
and

the
attention
of
management
will
have
been
diverted
to
the
proposed
Simplification
Transaction
rather
than
their
own
operations
and
pursuit
of
other
opportunities
that
could
have
been
beneficial
to
their
respective
businesses.

The Partnership and SunCoke are subject to business uncertainties and contractual restrictions while the proposed Simplification Transaction is

pending, which could adversely affect each party's business and operations.

In
connection
with
the
pendency
of
the
proposed
Simplification
Transaction,
it
is
possible
that
some
customers
and
other
persons
with
whom
we
or

SunCoke
have
business
relationships
may
delay
or
defer
certain
business
decisions
as
a
result
of
the
Simplification
Transaction,
which
could
negatively
affect
our
and
SunCoke’s
respective
revenues,
earnings
and
cash
flow,
as
well
as
the
market
price
of
our
common
units
and/or
SunCoke’s
common
stock,
regardless
of
whether
the
proposed
Simplification
Transaction
is
eventually
completed.
Under
the
terms
of
the
Merger
Agreement,
the
Partnership
and
SunCoke
are
each
subject
to
certain
restrictions
on
the
conduct
of
its
business
prior
to
completing
the
Simplification
Transaction,
which
may
adversely
affect
the
ability
to
execute
certain
business
strategies
including,
in
some
cases
,
the
ability
to
enter
into
contracts,
acquire
or
dispose
of
assets,
incur
indebtedness,
or
incur
capital
expenditures.
Such
limitations
could
affect
each
party's
businesses
and
operations
negatively
prior
to
the
completion
of
the
proposed
Simplification
Transaction.

Table
of
Contents

Because the exchange ratio is fixed and because the market price of SunCoke’s common stock will fluctuate prior to the completion of the proposed

Simplification Transaction, our unaffiliated common unitholders cannot be sure of the market value of the SunCoke common stock they will receive as
Simplification Transaction consideration relative to the value of our common units they exchange.

The
market
value
of
the
consideration
that
our
unaffiliated
common
unitholders
actually
receive
in
the
proposed
Simplification
Transaction
will
depend

on
the
trading
price
of
SunCoke’s
common
stock
at
the
closing
of
the
proposed
Simplification
Transaction.
The
exchange
ratio
that
determines
the
number
of
shares
of
SunCoke’s
common
stock
that
our
unaffiliated
common
unitholders
will
receive
in
the
proposed
Simplification
Transaction
is
fixed
at
1.40
shares
of
SunCoke’s
common
stock
for
each
common
unit
of
the
Partnership.
There
is
no
mechanism
contained
in
the
Merger
Agreement,
or
otherwise,
to
adjust
the
number
of
shares
of
SunCoke’s
common
stock
that
our
unaffiliated
common
unitholders
will
receive
based
upon
any
decrease
or
increase
in
the
trading
price
of
SunCoke’s
common
stock.
Stock
or
unit
price
changes
may
result
from
a
variety
of
factors,
many
of
which
are
beyond
our
and
SunCoke’s
control,
including:

•

changes
in
our
or
SunCoke’s
business,
operations
and
prospects;

changes
in
market
assessments
of
our
or
SunCoke’s
business,
operations
and
prospects;

changes
in
market
assessments
of
the
likelihood
that
the
proposed
Simplification
Transaction
will
be
completed;

interest
rates,
commodity
prices,
general
market,
industry
and
economic
conditions
and
other
factors
generally
affecting
the
price
of
our
common
units
or
SunCoke's
common
stock;
and

federal,
state
and
local
legislation,
governmental
regulation
and
legal
developments
in
the
businesses
in
which
we
and
SunCoke
operate.

If
the
price
of
SunCoke’s
common
stock
at
the
closing
of
the
proposed
Simplification
Transaction
is
less
than
the
price
of
SunCoke’s
common
stock
on
the
date
that
the
Merger
Agreement
was
signed,
then
the
market
value
of
the
merger
consideration
will
be
less
than
contemplated
at
the
time
the
Merger
Agreement
was
signed.

The date our unaffiliated common unitholders will receive the merger consideration depends on the completion date of the proposed Simplification

Transaction, which is uncertain.

Completion
of
the
proposed
Simplification
Transaction
is
subject
to
several
conditions,
not
all
of
which
are
controllable
by
us
or
SunCoke.
Accordingly,
even
if
the
proposed
Simplification
Transaction
is
approved
by
our
common
unitholders
and
SunCoke’s
common
stockholders,
the
date
on
which
our
unaffiliated
common
unitholders
will
receive
the
merger
consideration
depends
upon
the
completion
date
of
the
proposed
Simplification
Transaction,
which
is
uncertain
and
subject
to
several
other
closing
conditions.

We and SunCoke may incur transaction-related costs in connection with the proposed Simplification Transaction.

We
and
SunCoke
each
expect
to
incur
a
number
of
non-recurring
transaction-related
costs
associated
with
completing
the
proposed
Simplification
Transaction,
combining
the
operations
of
the
two
companies
and
attempting
to
achieve
desired
synergies.
Non-recurring
transaction
costs
include,
but
are
not
limited
to,
fees
paid
to
legal,
financial
and
accounting
advisors,
filing
fees,
proxy
solicitation
costs
and
printing
costs.
Many
of
the
expenses
that
will
be
incurred
are,
by
their
nature,
difficult
to
estimate
accurately
at
the
present
time
.

Certain executive officers and directors of our general partner have interests in the proposed Simplification Transaction that are different from, or in
addition to, the interests they may have as our unaffiliated common unitholders, which could influence their decision to support or approve the proposed
Simplification Transaction.

Certain
executive
officers
and/or
directors
of
our
general
partner
own
equity
interests
in
SunCoke,
receive
fees
and
other
compensation
from
SunCoke
and
will
have
rights
to
ongoing
indemnification
and
insurance
coverage
by
the
surviving
company
that
give
them
interests
in
the
proposed
Simplification
Transaction
that
may
be
different
from,
or
in
addition
to,
the
interests
of
an
unaffiliated
unitholder
of
the
Partnership.
Additionally,
certain
of
our
general
partner’s
executive
officers
and
director
beneficially
own
Partnership
common
units
and
will
receive
the
applicable
merger
consideration
upon
completion
of
the
proposed
Simplification
Transaction,
receive
fees
and
other
compensation
from
us
and
are
entitled
to
indemnification
arrangements
with
us
that
give
them
interests
in
the
proposed
Simplification
Transaction
that
may
be
different
from,
or
in
addition
to,
the
interests
of
our
unaffiliated
stockholders.

Table
of
Contents

Financial projections by us and SunCoke may not prove to be reflective of actual future results.

In
connection
with
the
proposed
Simplification
Transaction,
we
and
SunCoke
have
prepared
and
considered,
among
other
things,
internal
financial
forecasts
for
the
Partnership
and
SunCoke,
respectively
.
These
forecasts
speak
only
as
of
the
date
made
and
will
not
be
updated.
These
financial
projections
were
not
provided
with
a
view
to
public
disclosure,
are
subject
to
significant
economic,
competitive,
industry
and
other
uncertainties
and
may
not
be
achieved
in
full,
at
all
or
within
projected
time
frames.
In
addition,
the
failure
of
SunCoke’s
businesses
to
achieve
projected
results
could
have
a
material
adverse
effect
on
SunCoke’s
share
price,
financial
position
and
ability
to
institute
or
maintain
a
dividend
on
its
stock
following
the
proposed
Simplification
Transaction.

We and SunCoke may be unable to obtain the regulatory clearances required to complete the proposed Simplification Transaction or, in order to do

so, we and SunCoke may be required to comply with material restrictions or satisfy material conditions.

The
closing
of
the
proposed
Simplification
Transaction
is
subject
to
the
condition
precedent
that
there
is
no
law,
injunction,
judgment
or
ruling
by
a
governmental
authority
in
effect
enjoining,
restraining,
preventing
or
prohibiting
the
consummation
of
the
transactions
contemplated
by
the
Merger
Agreement,
or
making
the
consummation
of
the
transactions
contemplated
by
the
Merger
Agreement
illegal.
Additionally,
one
or
more
state
attorneys
general
could
seek
to
block
or
challenge
the
proposed
Simplification
Transaction
as
they
deem
necessary
or
desirable
in
the
public
interest
at
any
time,
including
after
completion
of
the
transaction.
In
addition,
under
certain
circumstances,
a
third
party
could
initiate
a
private
action
challenging
or
seeking
to
enjoin
the
proposed
Simplification
Transaction,
before
or
after
it
is
completed.
We
may
not
prevail
and
could
incur
significant
costs
in
defending
or
settling
any
such
action.

Shares of SunCoke’s common stock to be received by our unaffiliated common unitholders as a result of the proposed Simplification Transaction

have different rights from our common units.

Following
completion
of
the
proposed
Simplification
Transaction,
our
unaffiliated
common
unitholders
no
longer
will
hold
our
common
units,
but
instead
will
be
stockholders
of
SunCoke.
There
are
important
differences
between
the
rights
of
our
unaffiliated
common
unitholders
and
the
rights
of
SunCoke’s
stockholders.
Ownership
interests
in
a
limited
partnership
are
fundamentally
different
from
ownership
interests
in
a
corporation.
Our
unaffiliated
common
unitholders
will
own
SunCoke
common
stock
following
the
completion
of
the
proposed
Simplification
Transaction,
and
their
rights
associated
with
the
common
stock
will
be
governed
by
SunCoke’s
organizational
documents
and
the
Delaware
General
Corporation
Law,
which
differ
in
a
number
of
respects
from
our
partnership
agreement
and
the
Limited
Partnership
Act
of
the
State
of
Delaware.

Litigation filed against us and/or SunCoke could prevent or delay the consummation of the Simplification Transaction or result in the payment of

damages following completion of the Simplification Transaction.

Following
announcement
of
the
proposed
Simplification
Transaction,
purported
Partnership
unitholders
may
file
putative
unitholder
class
action
lawsuits
against
us,
our
general
partner,
and
the
general
partner's
Board
of
Directors,
among
others.
Among
other
remedies,
the
plaintiffs
may
seek
to
enjoin
the
transactions
contemplated
by
the
merger
agreement.
The
outcome
of
any
such
litigation
is
uncertain.
If
a
dismissal
is
not
granted
or
a
settlement
is
not
reached,
such
lawsuits
could
prevent
or
delay
completion
of
the
Simplification
Transaction
and
result
in
substantial
costs
to
us
and/or
SunCoke,
including
costs
associated
with
indemnification.
Additional
lawsuits
may
be
filed
against
us,
SunCoke
or
our
respective
officers
or
directors
in
connection
with
the
Simplification
Transaction.
The
defense
or
settlement
of
any
lawsuit
or
claim
that
remains
unresolved
at
the
time
the
Simplification
Transaction
is
consummated
may
adversely
affect
the
business,
financial
condition,
results
of
operations
and
cash
flows
of
the
combined
organization.

Risks Inherent in Our Business and Industry

Sustained uncertainty in financial markets, or unfavorable economic conditions in the industries in which our customers operate, may lead to a

reduction in the demand for our products and services, and adversely impact our cash flows, financial position or results of operations, and therefore may limit
our ability to make cash distributions to unitholders.

Sustained
volatility
and
disruption
in
worldwide
capital
and
credit
markets
in
the
U.S.
and
globally
could
restrict
our
ability
to
access
the
capital
market
at

a
time
when
we
would
like,
or
need,
to
raise
capital
for
our
business
including
for
potential
acquisitions,
or
other
growth
opportunities.

Deteriorating
or
unfavorable
economic
conditions
in
the
industries
in
which
our
customers
operate,
such
as
steelmaking
and
electric
power
generation,

may
lead
to
reduced
demand
for
steel
products,
coal,
and
other
bulk

Table
of
Contents

commodities
which,
in
turn,
could
adversely
affect
the
demand
for
our
products
and
services
and
negatively
impact
the
revenues,
margins
and
profitability
of
our
business.

Additionally,
the
tightening
of
credit,
or
lack
of
credit
availability
to
our
customers,
could
adversely
affect
our
ability
to
collect
our
trade
receivables.
We

also
are
exposed
to
the
credit
risk
of
our
coke
and
logistics
customers,
and
any
significant
unanticipated
deterioration
of
their
creditworthiness
and
resulting
increase
in
nonpayment
or
nonperformance
by
them
could
have
a
material
adverse
effect
on
the
cash
flows
and/or
results
of
our
operations.

Adverse developments at our cokemaking and/or logistics operations, including equipment failures or deterioration of assets, may lead to production
curtailments, shutdowns, impairments, or additional expenditures, which could have a material adverse effect on our results of operations, and therefore may
limit our ability to make cash distributions to unitholders.

Our
cokemaking
and
logistics
operations
are
subject
to
significant
hazards
and
risks
that
include,
but
are
not
limited
to,
equipment
malfunction,
explosions,
fires
and
the
effects
of
severe
weather
conditions
and
extreme
temperatures,
any
of
which
could
result
in
production
and
transportation
difficulties
and
disruptions,
permit
non-compliance,
pollution,
personal
injury
or
wrongful
death
claims
and
other
damage
to
our
properties
and
the
property
of
others.

Adverse
developments
at
our
cokemaking
facilities
could
significantly
disrupt
our
coke,
steam
and/or
electricity
production
and
our
ability
to
supply

coke,
steam,
and/or
electricity
to
our
customers.
Adverse
developments
at
our
logistics
operations
could
significantly
disrupt
our
ability
to
provide
handling,
mixing,
storage,
terminalling,
transloading
and/or
transportation
services,
of
coal
and
other
dry
and
liquid
bulk
commodities,
to
our
customers.
Any
sustained
disruption
at
our
cokemaking
and/or
logistics
operations
could
have
a
material
adverse
effect
on
our
results
of
operations.

There
is
a
risk
of
mechanical
failure
of
our
equipment
both
in
the
normal
course
of
operations
and
following
unforeseen
events.
Our
cokemaking
and

logistics
operations
depend
upon
critical
pieces
of
equipment
that
occasionally
may
be
out
of
service
for
scheduled
upgrades
or
maintenance
or
as
a
result
of
unanticipated
failures.
Our
facilities
are
subject
to
equipment
failures
and
the
risk
of
catastrophic
loss
due
to
unanticipated
events
such
as
fires,
accidents
or
violent
weather
conditions
or
extreme
temperatures.
As
a
result,
we
may
experience
interruptions
in
our
processing
and
production
capabilities,
which
could
have
a
material
adverse
effect
on
our
results
of
operations
and
financial
condition.
In
particular,
to
the
extent
a
disruption
leads
to
our
failure
to
maintain
the
temperature
inside
our
coke
oven
batteries,
we
may
not
be
able
to
maintain
the
integrity
of
the
ovens
or
to
continue
operation
of
such
coke
ovens,
which
could
adversely
affect
our
ability
to
meet
our
customers’
requirements
for
coke
and,
in
some
cases,
electricity
and/or
steam.

Assets
and
equipment
critical
to
the
operations
of
our
cokemaking
and
logistics
operations
also
may
deteriorate
or
become
depleted
materially
sooner
than
we
currently
estimate.
Such
deterioration
of
assets
may
result
in
additional
maintenance
spending
or
additional
capital
expenditures.
If
these
assets
do
not
generate
the
amount
of
future
cash
flows
that
we
expect,
and
we
are
not
able
to
execute
on
capital
maintenance
or
procure
replacement
assets
in
an
economically
feasible
manner,
our
future
results
of
operations
may
be
materially
and
adversely
affected.

Impairment in the carrying value of long-lived assets and goodwill could adversely affect our business and results of operations.

We
have
a
significant
amount
of
long-lived
assets
and
goodwill
on
our
Consolidated
Balance
Sheets.
Under
generally
accepted
accounting
principles,

long-lived
assets
must
be
reviewed
for
impairment
whenever
adverse
events
or
changes
in
circumstances
indicate
a
possible
impairment.
We
are
required
to
perform
impairment
tests
on
our
assets
whenever
events
or
changes
in
circumstances
lead
to
a
reduction
of
the
estimated
useful
life
or
estimated
future
cash
flows
that
would
indicate
that
the
carrying
amount
may
not
be
recoverable
or
whenever
management’s
plans
change
with
respect
to
those
assets.

If
business
conditions
or
other
factors
cause
profitability
and
cash
flows
to
decline,
we
may
be
required
to
record
non-cash
impairment
charges.
Goodwill

must
be
evaluated
for
impairment
annually
or
more
frequently
if
events
indicate
it
is
warranted.
If
the
carrying
value
of
our
reporting
units
exceeds
their
current
fair
value
as
determined
based
on
the
discounted
future
cash
flows
of
the
related
business,
the
goodwill
is
considered
impaired
and
is
reduced
to
fair
value
by
a
non-cash
charge
to
earnings.

Events
and
conditions
that
could
result
in
impairment
in
the
value
of
our
long-lived
assets
and
goodwill
include:
the
impact
of
a
downturn
in
the
global

economy,
competition,
advances
in
technology,
adverse
changes
in
the
regulatory
environment,
and
other
factors
leading
to
a
reduction
in
expected
long-term
sales
or
profitability,
or
a
significant
decline
in
the
trading
price
of
our
common
stock
or
market
capitalization,
lower
future
cash
flows,
slower
industry
growth
rates
and
other
changes
in
the
industries
in
which
we
or
our
customers
operate.

Table
of
Contents

The financial performance of our cokemaking and logistics businesses is substantially dependent upon a limited number of customers, and the loss of

these customers, or any failure by them to perform under their contracts with us, could materially and adversely affect our financial condition, permit
compliance, results of operations and cash flows, and therefore may limit our ability to make cash distributions to unitholders.

Substantially
all
of
our
coke
sales
currently
are
made
pursuant
to
long-term
contracts
with
AM
USA,
U.S.
Steel
and
AK
Steel,
and
we
expect
these
three
customers
to
continue
to
account
for
a
significant
portion
of
our
revenues
for
the
foreseeable
future.
In
our
logistics
business,
a
significant
portion
of
our
revenues
and
cash
flows
are
derived
from
long-term
contracts
with
Foresight
Energy
LLC
and
Murray
American
Coal,
Inc.
at
CMT,
and
we
expect
these
two
customers
to
continue
to
account
for
a
significant
portion
of
the
revenues
of
our
logistics
business
for
the
foreseeable
future.

We
are
subject
to
the
credit
risk
of
our
major
customers
and
other
parties.
If
we
fail
to
adequately
assess
the
creditworthiness
of
existing
or
future
customers
or
unanticipated
deterioration
of
their
creditworthiness,
any
resulting
increase
in
nonpayment
or
nonperformance
by
them
could
have
a
material
adverse
effect
on
our
cash
flows,
financial
position
or
results
of
operations.
During
periods
of
weak
demand
for
steel
or
coal,
our
customers
may
experience
significant
reductions
in
their
operations,
or
substantial
declines
in
the
prices
of
the
steel,
or
coal
products,
they
sell.
These
and
other
factors
such
as
labor
relations
or
bankruptcy
filings
may
lead
certain
of
our
customers
to
seek
renegotiation
or
cancellation
of
their
existing
contractual
commitments
to
us,
or
reduce
their
utilization
of
our
services,

The
loss
of
any
of
these
customers
(or
financial
difficulties
at
any
of
these
customers,
which
result
in
nonpayment
or
nonperformance)
could
have
a

significant
adverse
effect
on
our
business.
If
one
or
more
of
these
customers
were
to
significantly
reduce
its
purchases
of
coke
or
logistics
services
from
us
without
a
make-whole
payment,
or
default
on
their
agreements
with
us,
or
terminate
or
fail
to
renew
their
agreements
with
us,
or
if
we
were
unable
to
sell
such
coke
or
logistics
services
to
these
customers
on
terms
as
favorable
to
us
as
the
terms
under
our
current
agreements,
our
cash
flows,
financial
position,
permit
compliance,
or
results
of
operations
could
be
materially
and
adversely
affected.

Our cokemaking and logistics businesses are subject to operating risks, some of which are beyond our control, that could result in a material increase

in our operating expenses, and therefore may limit our ability to make cash distributions to unitholders.

Factors
beyond
our
control
could
disrupt
our
cokemaking
and
logistics
operations,
adversely
affect
our
ability
to
service
the
needs
of
our
customers,
and

increase
our
operating
costs,
all
of
which
could
have
a
material
adverse
effect
on
our
results
of
operations.
Such
factors
could
include:

•

geological,
hydrologic,
or
other
conditions
that
may
cause
damage
to
infrastructure
or
personnel;

fire,
explosion,
or
other
major
incident
causing
injury
to
personnel
and/or
equipment,
that
causes
a
cessation,
or
significant
curtailment,
of
all
or
part
of
our
cokemaking
or
logics
operations
at
a
site
for
a
period
of
time;

processing
and
plant
equipment
failures,
operating
hazards
and
unexpected
maintenance
problems
affecting
our
cokemaking
or
logistics
operations,
or
our
customers;

adverse
weather
and
natural
disasters,
such
as
severe
winds,
heavy
rains
or
snow,
flooding,
extreme
temperatures
and
other
natural
events
affecting
our
cokemaking
or
logistics
operations,
transportation,
or
our
customers;
and

possible
legal
challenges
to
the
renewal
of
key
permits,
which
may
lead
to
their
renewal
on
terms
that
restrict
our
cokemaking
or
logistics
operations,
or
impose
additional
costs
on
us.

If
any
of
these
conditions
or
events
occur,
our
cokemaking
or
logistics
operations
may
be
disrupted,
operating
costs
could
increase
significantly,
and
we

could
incur
substantial
losses.
Such
disruptions
in
our
operations
could
materially
and
adversely
affect
our
financial
condition,
or
results
of
operations.

We face competition, both in our cokemaking operations and in our logistics business, which has the potential to reduce demand for our products and

services, and that could have an adverse effect on our results of operations, and therefore may limit our ability to make cash distributions to unitholders.

We
face
competition,
both
in
our
cokemaking
operations
and
in
our
logistics
business:

•

Cokemaking
operations
:
Historically,
coke
has
been
used
as
a
main
input
in
the
production
of
steel
in
blast
furnaces.
However,
some
blast
furnace
operators
have
relied
upon
natural
gas,
pulverized
coal,
and/or
other
coke
substitutes.
Many
steelmakers
also
are
exploring
alternatives
to
blast
furnace
technology
that
require
less
or
no
use
of
coke.
For
example,
electric
arc
furnace
technology
is
a
commercially
proven
process
widely

Table
of
Contents

used
in
the
U.S.
As
these
alternative
processes
for
production
of
steel
become
more
widespread,
the
demand
for
coke,
including
the
coke
we
produce,
may
be
significantly
reduced.
We
also
face
competition
from
alternative
cokemaking
technologies,
including
both
by-product
and
heat
recovery
technologies
other
than
our
own.
As
these
technologies
improve
and
as
new
technologies
are
developed,
competition
in
the
cokemaking
industry
may
intensify.
As
alternative
processes
for
production
of
steel
become
more
widespread,
the
demand
for
coke,
including
the
coke
we
produce,
may
be
significantly
reduced.

•

Logistics
business
:
Decreased
throughput
and
utilization
of
our
logistics
assets
could
result
indirectly
due
to
competition
in
the
electrical
power
generation
business
from
abundant
and
relatively
inexpensive
supplies
of
natural
gas
displacing
thermal
coal
as
a
fuel
for
electrical
power
generation
by
utility
companies.
In
addition,
competition
in
the
steel
industry
from
processes
such
as
electric
arc
furnaces,
or
blast
furnace
injection
of
pulverized
coal
or
natural
gas,
may
reduce
the
demand
for
metallurgical
coals
processed
through
our
logistics
facilities.
In
the
future,
additional
coal
handling
facilities
and
terminals
with
rail
and/or
barge
access
may
be
constructed
in
the
Eastern
U.S.
Such
additional
facilities
could
compete
directly
with
us
in
specific
markets
now
served
by
our
logistics
business.
Certain
coal
mining
companies
and
independent
terminal
operators
in
some
areas
may
compete
directly
with
our
logistics
facilities.
In
some
markets,
trucks
may
competitively
deliver
mined
coal
to
certain
shorter-haul
destinations,
resulting
in
reduced
utilization
of
existing
terminal
capacity.

Such
competition
could
reduce
demand
for
our
products
and
services,
thus
having
a
material
and
adverse
effect
on
our
results
of
operations.

We are subject to extensive laws and regulations, which may increase our cost of doing business and have an adverse effect on our cash flows,

financial position or results of operations, and therefore may limit our ability to make cash distributions to unitholders.

Our
operations
are
subject
to
strict
regulation
by
federal,
state
and
local
authorities
with
respect
to:
discharges
of
substances
into
the
air
and
water;

emissions
of
greenhouse
gases,
or
GHG,
compliance
with
the
NAAQS,
management
and
disposal
of
hazardous
substances
and
wastes,
cleanup
of
contaminated
sites,
protection
of
groundwater
quality
and
availability,
protection
of
plants
and
wildlife,
reclamation
and
restoration
of
properties
after
completion
of
mining
or
drilling,
installation
of
safety
equipment
in
our
facilities,
sales
of
electric
power,
and
protection
of
employee
health
and
safety.
Complying
with
these
and
other
regulatory
requirements,
including
the
terms
of
our
permits,
can
be
costly
and
time-consuming,
and
may
hinder
operations.
In
addition,
these
requirements
are
complex,
change
frequently
and
have
become
more
stringent
over
time.
Regulatory
requirements
may
change
in
the
future
in
a
manner
that
could
result
in
substantially
increased
capital,
operating
and
compliance
costs,
and
could
have
a
material
adverse
effect
on
our
business.

Failure
to
comply
with
applicable
laws,
regulations
or
permits
may
result
in
the
assessment
of
administrative,
civil
and
criminal
penalties,
the
imposition

of
cleanup
and
site
restoration
costs
and
liens,
the
issuance
of
injunctions
to
limit
or
cease
operations,
the
suspension
or
revocation
of
permits
and
other
enforcement
measures
that
could
cause
delays
in
permitting
or
development
of
projects
or
materially
limit,
or
increase
the
cost
of,
our
operations.
We
may
not
have
been,
or
may
not
be,
at
all
times,
in
complete
compliance
with
all
such
requirements,
and
we
may
incur
material
costs
or
liabilities
in
connection
with
such
requirements,
or
in
connection
with
remediation
at
sites
we
own,
or
third-party
sites
where
it
has
been
alleged
that
we
have
liability,
in
excess
of
the
amounts
we
have
accrued.
For
a
description
of
certain
environmental
laws
and
matters
applicable
to
us,
see
“Item
1.
Business-Legal
and
Regulatory
Requirements.”

We may be unable to obtain, maintain or renew permits or leases necessary for our operations, which could materially reduce our production, cash

flows or profitability, and therefore may limit our ability to make cash distributions to unitholders.

Our
cokemaking
and
logistics
operations
require
us
to
obtain
a
number
of
permits
that
impose
strict
regulations
on
various
environmental
and
operational

matters.
These,
as
well
as
our
facilities
and
operations
(including
our
generation
of
electricity),
require
permits
issued
by
various
federal,
state
and
local
agencies
and
regulatory
bodies.
The
permitting
rules,
and
the
interpretations
of
these
rules,
are
complex,
change
frequently,
and
are
often
subject
to
discretionary
interpretations
by
our
regulators,
all
of
which
may
make
compliance
more
difficult
or
impractical,
and
may
possibly
preclude
the
continuance
of
ongoing
operations
or
the
development
of
future
cokemaking
and/or
logistics
facilities.
Non-governmental
organizations,
environmental
groups
and
individuals
have
certain
rights
to
engage
in
the
permitting
process,
and
may
comment
upon,
or
object
to,
the
requested
permits.
Such
persons
also
have
the
right
to
bring
citizen’s
lawsuits
to
challenge
the
issuance
of
permits,
or
the
validity
of
environmental
impact
statements
related
thereto.
If
any
permits
or
leases
are
not
issued
or
renewed
in
a
timely
fashion
or
at
all,
or
if
permits
issued
or
renewed
are
conditioned
in
a
manner
that
restricts
our
ability
to
efficiently
and
economically
conduct
our
operations,
our
cash
flows
or
profitability
could
be
materially
and
adversely
affected.

Table
of
Contents

We may incur costs and liabilities resulting from claims for damages to property or injury to persons arising from our operations, and such costs and

liabilities could have a material and adverse effect on our financial condition or results of operations, and therefore may limit our ability to make cash
distributions to unitholders.

Our
success
depends,
in
part,
on
the
quality,
efficacy
and
safety
of
our
products
and
services.
If
our
operations
do
not
meet
applicable
safety
standards,
or

our
products
or
services
are
found
to
be
unsafe,
our
relationships
with
customers
could
suffer
and
we
could
lose
business
or
become
subject
to
liability
or
claims.
In
addition,
our
cokemaking
and
logistics
operations
have
inherent
safety
risks
that
may
give
rise
to
events
resulting
in
death,
injury,
or
property
loss
to
employees,
customers,
or
unaffiliated
third
parties.
Depending
upon
the
nature
and
severity
of
such
events,
we
could
be
exposed
to
significant
financial
loss,
reputational
damage,
potential
civil
or
criminal
government
or
other
regulatory
enforcement
actions,
or
private
litigation,
the
settlement
or
outcome
of
which
could
have
a
material
and
adverse
effect
on
our
financial
condition
or
results
of
operations.

Our businesses are subject to inherent risks, some for which we maintain third party insurance and some for which we self-insure. We may incur

losses and be subject to liability claims that could have a material adverse effect on our financial condition, results of operations or cash flows, and therefore
may limit our ability to make cash distributions to unitholders.

We
are
currently
covered
by
insurance
policies
maintained
by
our
sponsor
and
we
currently
maintain
our
own
directors’
and
officers’
liability
insurance
policy.
These
insurance
policies
provide
limited
coverage
for
some,
but
not
all,
of
the
potential
risks
and
liabilities
associated
with
our
businesses.
For
some
risks,
we
may
not
obtain
insurance
or
be
covered
by
our
sponsor’s
policies
if
we
believe
the
cost
of
available
insurance
is
excessive
relative
to
the
risks
presented.
As
a
result
of
market
conditions,
premiums
and
deductibles
for
certain
insurance
policies
can
increase
substantially,
and
in
some
instances,
certain
insurance
may
become
unavailable
or
available
only
for
reduced
amounts
of
coverage.
As
a
result,
we
and
our
sponsor
may
not
be
able
to
renew
our
or
its
existing
insurance
policies
or
procure
other
desirable
insurance
on
commercially
reasonable
terms,
if
at
all.
In
addition,
certain
risks,
such
as
certain
environmental
and
pollution
risks,
and
certain
cybersecurity
risks,
generally
are
not
fully
insurable.
Even
where
insurance
coverage
applies,
insurers
may
contest
their
obligations
to
make
payments.
Further,
with
the
exception
of
directors’
and
officers’
liability,
for
which
we
maintain
our
own
insurance
policy,
our
coverage
under
our
sponsor’s
insurance
policies
is
our
sole
source
of
insurance
for
risks
related
to
our
business.
Our
sponsor’s
insurance
coverage
may
not
be
adequate
to
cover
us
against
losses
we
incur
and
coverage
under
these
policies
may
be
depleted
or
may
not
be
available
to
us
to
the
extent
that
our
sponsor
exhausts
the
coverage
limits.
Our
financial
condition,
results
of
operations
and
cash
flows
and,
therefore,
our
ability
to
distribute
cash
to
unitholders,
could
be
materially
and
adversely
affected
by
losses
and
liabilities
from
un-insured
or
under-insured
events,
as
well
as
by
delays
in
the
payment
of
insurance
proceeds,
or
the
failure
by
insurers
to
make
payments.

We
also
may
incur
costs
and
liabilities
resulting
from
claims
for
damages
to
property
or
injury
to
persons
arising
from
our
operations.
We
must
compensate
employees
for
work-related
injuries.
If
we
do
not
make
adequate
provision
for
our
workers’
compensation
liabilities,
it
could
harm
our
future
operating
results.
If
we
are
required
to
pay
for
these
sanctions,
costs
and
liabilities,
our
operations
and
therefore
our
ability
to
distribute
cash
to
unitholders
could
be
adversely
affected.

Divestitures and other significant transactions may adversely affect our business. In particular, if we are unable to realize the anticipated benefits

from such transactions, or are unable to conclude such transactions upon favorable terms, our financial condition, results of operations or cash flows could be
adversely affected.

We
regularly
review
strategic
opportunities
to
further
our
business
objectives,
and
may
eliminate
assets
that
do
not
meet
our
return-on-investment
criteria.
If
we
are
unable
to
complete
such
divestitures
or
other
transactions
upon
favorable
terms,
or
in
a
timely
manner,
or
if
the
market
conditions
assumed
in
our
project
economics
deteriorate,
our
financial
condition,
results
of
operations
or
cash
flows
could
be
adversely
affected.

The
anticipated
benefits
of
divestitures
and
other
strategic
transactions
may
not
be
realized,
or
may
be
realized
more
slowly
than
we
expected.
Such
transactions
also
could
result
in
a
number
of
financial
consequences
having
a
material
effect
on
our
results
of
operations
and
our
financial
position,
including
reduced
cash
balances;
higher
fixed
expenses;
the
incurrence
of
debt
and
contingent
liabilities
(including
indemnification
obligations);
restructuring
charges;
loss
of
customers,
suppliers,
distributors,
licensors
or
employees;
legal,
accounting
and
advisory
fees;
and
impairment
charges.

Table
of
Contents

We may not be able to successfully implement our growth strategies or plans, and we may experience significant risks associated with future

acquisitions and/or investments. If we are unable to execute our strategic plans, whether as a result of unfavorable market conditions in the industries in
which our customers operate, or otherwise, our future results of operations could be materially and adversely affected.

A
portion
of
our
strategy
to
grow
our
business
is
dependent
upon
our
ability
to
acquire
and
operate
new
assets
that
result
in
an
increase
in
our
earnings
per

share.
We
may
not
derive
the
financial
returns
we
expect
on
our
investment
in
such
additional
assets
or
such
operations
may
not
be
profitable.
We
cannot
predict
the
effect
that
any
failed
expansion
may
have
on
our
core
businesses.
The
success
of
our
future
acquisitions
and/or
investments
will
depend
substantially
on
the
accuracy
of
our
analysis
concerning
such
businesses
and
our
ability
to
complete
such
acquisitions
or
investments
on
favorable
terms,
as
well
as
to
finance
such
acquisitions
or
investments
and
to
integrate
the
acquired
operations
successfully
with
existing
operations.
Antitrust
and
other
laws
may
prevent
us
from
completing
acquisitions.
If
we
are
not
able
to
execute
our
strategic
plans
effectively,
or
successfully
integrate
new
operations,
whether
as
a
result
of
unfavorable
market
conditions
in
the
industries
in
which
our
customers
operate,
or
otherwise,
our
business
reputation
could
suffer
and
future
results
of
operations
could
be
materially
and
adversely
affected.

Risks
associated
with
acquisitions
include
the
diversion
of
management’s
attention
from
other
business
concerns,
the
potential
loss
of
key
employees
and
customers
of
the
acquired
business,
the
possible
assumption
of
unknown
liabilities,
potential
disputes
with
the
sellers,
and
the
inherent
risks
in
entering
markets
or
lines
of
business
in
which
we
have
limited
or
no
prior
experience.
Additionally,
in
the
event
we
form
joint
ventures
or
other
similar
arrangements,
we
must
pay
close
attention
to
the
organizational
formalities
and
time-consuming
procedures
for
sharing
information
and
making
decisions.
We
may
share
ownership
and
management
with
other
parties
who
may
not
have
the
same
goals,
strategies,
priorities,
or
resources
as
we
do.
The
benefits
from
a
successful
investment
in
an
existing
entity
or
joint
venture
will
be
shared
among
the
co-owners,
so
we
will
not
receive
the
exclusive
benefits
from
a
successful
investment.
Additionally,
if
a
co-owner
changes,
our
relationship
may
be
materially
and
adversely
affected.

Security breaches and other information systems failures could disrupt our operations, compromise the integrity of our data, expose us to liability,

cause increased expenses and cause our reputation to suffer, any or all of which could have a material and adverse effect on our business or financial position.

Our
business
is
dependent
on
financial,
accounting
and
other
data
processing
systems
and
other
communications
and
information
systems,
including
our
enterprise
resource
planning
tools.
We
process
a
large
number
of
transactions
on
a
daily
basis
and
rely
upon
the
proper
functioning
of
computer
systems.
If
a
key
system
were
to
fail
or
experience
unscheduled
downtime
for
any
reason,
our
operations
and
financial
results
could
be
affected
adversely.
Our
systems
could
be
damaged
or
interrupted
by
a
security
breach,
terrorist
attack,
fire,
flood,
power
loss,
telecommunications
failure
or
similar
event.

Our
disaster
recovery
plans
may
not
entirely
prevent
delays
or
other
complications
that
could
arise
from
an
information
systems
failure.
Our
business
interruption
insurance
may
not
compensate
us
adequately
for
losses
that
may
occur.

In
the
ordinary
course
of
our
business,
we
collect
and
store
sensitive
data
in
our
data
centers,
on
our
networks,
and
in
our
cloud
vendors.

In
addition,
we

rely
on
third
party
service
providers,
for
support
of
our
information
technology
systems,
including
the
maintenance
and
integrity
of
proprietary
business
information
and
other
confidential
company
information
and
data
relating
to
customers,
suppliers
and
employees.
The
secure
processing,
maintenance
and
transmission
of
this
information
is
critical
to
our
operations
and
business
strategy.

We
have
instituted
data
security
measures
for
confidential
company
information
and
data
stored
on
electronic
and
computing
devices,
whether
owned
or
leased
by
us
or
a
third
party
vendor.
However,
despite
such
measures,
there
are
risks
associated
with
customer,
vendor,
and
other
third-party
access
and
our
information
technology
and
infrastructure
may
be
vulnerable
to
attacks
by
hackers
or
breached
due
to:
employee
error
or
malfeasance,
failure
of
third
parties
to
meet
contractual,
regulatory
and
other
obligations
to
us,
or
other
disruptions.

Any
such
breach
could
compromise
our
networks
and
the
information
stored
there
could
be
accessed,
publicly
disclosed,
lost
or
stolen.

Any
such
access,

disclosure
or
other
loss
of
information
could
result
in
legal
claims
or
proceedings,
liability
under
laws
that
protect
the
privacy
of
personal
information,
and
regulatory
penalties,
disrupt
our
operations,
and
damage
our
reputation,
which
could
materially
and
adversely
affect
our
business
and
financial
position.

We are exposed to, and may be adversely affected by, interruptions to our computer and information technology systems and sophisticated cyber-

attacks.

We
rely
on
our
information
technology
systems
and
networks
in
connection
with
many
of
our
business
activities.
Some
of
these
networks
and
systems
are

managed
by
third-party
service
providers
and
are
not
under
our
direct
control.
Our
operations
routinely
involve
receiving,
storing,
processing
and
transmitting
sensitive
information
pertaining
to
our

Table
of
Contents

business,
customers,
dealers,
suppliers,
employees
and
other
sensitive
matters.
Cyber-attacks
could
materially
disrupt
operational
systems;
result
in
loss
of
trade
secrets
or
other
proprietary
or
competitively
sensitive
information;
compromise
personally
identifiable
information
regarding
customers
or
employees;
and
jeopardize
the
security
of
our
facilities.
A
cyber-attack
could
be
caused
by
malicious
outsiders
using
sophisticated
methods
to
circumvent
firewalls,
encryption
and
other
security
defenses.
Because
techniques
used
to
obtain
unauthorized
access
or
to
sabotage
systems
change
frequently
and
generally
are
not
recognized
until
they
are
launched
against
a
target,
we
may
be
unable
to
anticipate
these
techniques
or
to
implement
adequate
preventative
measures.
Information
technology
security
threats,
including
security
breaches,
computer
malware
and
other
cyber-attacks
are
increasing
in
both
frequency
and
sophistication
and
could
create
financial
liability,
subject
us
to
legal
or
regulatory
sanctions
or
damage
our
reputation
with
customers,
dealers,
suppliers
and
other
stakeholders.
We
continuously
seek
to
maintain
a
robust
program
of
information
security
and
controls,
but
a
cyber-attack
could
have
a
material
adverse
effect
on
our
competitive
position,
reputation,
results
of
operations,
financial
condition
and
cash
flows.
As
cyber-attacks
continue
to
evolve,
we
may
be
required
to
expend
additional
resources
to
continue
to
modify
or
enhance
our
protective
measures
or
to
investigate
and
remediate
any
information
security
vulnerabilities.

We are or may become subject to privacy and data protection laws, rules and directives relating to the processing of personal data in the countries

where we operate.

The
growth
of
cyber-attacks
has
resulted
in
an
evolving
legal
landscape
which
imposes
costs
that
are
likely
to
increase
over
time.
For
example,
new
laws

and
regulations
governing
data
privacy
and
the
unauthorized
disclosure
of
confidential
information,
including
the
European
Union
General
Data
Protection
Regulation
and
recent
California
legislation
(which,
among
other
things,
provides
for
a
private
right
of
action),
pose
increasingly
complex
compliance
challenges
and
could
potentially
elevate
our
costs
over
time.
Any
failure
by
us
to
comply
with
such
laws
and
regulations
could
result
in
penalties
and
liabilities.
It
is
also
possible
under
certain
legislation
that
if
we
acquire
a
company
that
has
violated
or
is
not
in
compliance
with
applicable
data
protection
laws,
we
may
incur
significant
liabilities
and
penalties
as
a
result.

Our operating results have been and may continue to be affected by fluctuations in our costs of production, and, if we cannot pass increases in our

costs of production to our customers, our financial condition, results of operations and cash flows may be negatively affected.

Our
operations
require
a
reliable
supply
of
equipment,
replacement
parts
and
metallurgical
coal.
If
the
cost
to
produce
coke
and
provide
logistics
services,
including
cost
of
supplies,
equipment,
metallurgical
coal,
labor,
experience
significant
price
inflation,
and
we
cannot
pass
such
increases
in
our
costs
of
production
to
our
customers,
our
profit
margins
may
be
reduced
and
our
financial
condition,
results
of
operations
and
cash
flows
may
be
adversely
affected.

Labor disputes with the unionized portion of our workforce could affect us adversely. Union represented labor creates an increased risk of work

stoppages and higher labor costs, which could reduce revenues and therefore limit our ability to make cash distributions to unitholders.

We
rely,
at
one
or
more
of
our
facilities,
on
unionized
labor,
and
there
is
always
the
possibility
that
we
may
be
unable
to
reach
agreement
on
terms
and

conditions
of
employment
or
renewal
of
a
collective
bargaining
agreement.
When
collective
bargaining
agreements
expire
or
terminate,
we
may
not
be
able
to
negotiate
new
agreements
on
the
same
or
more
favorable
terms
as
the
current
agreements,
or
at
all,
and
without
production
interruptions,
including
labor
stoppages.
If
we
are
unable
to
negotiate
the
renewal
of
a
collective
bargaining
agreement
before
its
expiration
date,
our
operations
and
our
profitability
could
be
adversely
affected.
A
prolonged
labor
dispute,
which
may
include
a
work
stoppage,
could
adversely
affect
our
ability
to
satisfy
our
customers’
orders
and,
as
a
result,
adversely
affect
our
operations,
or
the
stability
of
production
and
reduce
our
future
revenues,
or
profitability,
as
well
as
our
ability
to
pay
cash
distributions
to
our
unitholders.
It
is
also
possible
that,
in
the
future,
additional
employee
groups
may
choose
to
be
represented
by
a
labor
union.

Our ability to operate our company effectively could be impaired if we fail to attract and retain key personnel.

We
have
implemented
recruitment,
training
and
retention
efforts
to
optimally
staff
our
operations.
Our
ability
to
operate
our
business
and
implement
our
strategies
depends
in
part
on
the
efforts
of
our
executive
officers
and
other
key
employees.
In
addition,
our
future
success
will
depend
on,
among
other
factors,
our
ability
to
attract
and
retain
other
qualified
personnel.
The
loss
of
the
services
of
any
of
our
executive
officers
or
other
key
employees
or
the
inability
to
attract
or
retain
other
qualified
personnel
in
the
future
could
have
a
material
adverse
effect
on
our
business
or
business
prospects.
With
respect
to
our
represented
employees,
we
may
be
adversely
impacted
by
the
loss
of
employees
who
retire
or
obtain
other
employment
during
a
layoff
or
a
work
stoppage.

Table
of
Contents

We currently are, and likely will be, subject to litigation, the disposition of which could have a material adverse effect on our cash flows, financial

position or results of operations.

The
nature
of
our
operations
exposes
us
to
possible
litigation
claims
in
the
future,
including
disputes
relating
to
our
operations
and
commercial
and

contractual
arrangements.
Although
we
make
every
effort
to
avoid
litigation,
these
matters
are
not
totally
within
our
control.
We
will
contest
these
matters
vigorously
and
have
made
insurance
claims
where
appropriate,
but
because
of
the
uncertain
nature
of
litigation
and
coverage
decisions,
we
cannot
predict
the
outcome
of
these
matters.
Litigation
is
very
costly,
and
the
costs
associated
with
prosecuting
and
defending
litigation
matters
could
have
a
material
adverse
effect
on
our
financial
condition
and
profitability.
In
addition,
our
profitability
or
cash
flow
in
a
particular
period
could
be
affected
by
an
adverse
ruling
in
any
litigation
currently
pending
in
the
courts
or
by
litigation
that
may
be
filed
against
us
in
the
future.
We
are
also
subject
to
significant
environmental
and
other
government
regulation,
which
sometimes
results
in
various
administrative
proceedings.
For
additional
information,
see
“Item
3.
Legal
Proceedings.”

Risks Related to Our Indebtedness

We face material debt maturities which may adversely affect our consolidated financial position.

Over
the
next
five
years,
we
have
approximately
$115.1
million
of
total
consolidated
debt
maturing
(See
Note
11
to
the
consolidated
financial

statements).
We
may
not
be
able
to
refinance
this
debt,
or
may
be
forced
to
do
so
on
terms
substantially
less
favorable
than
our
currently
outstanding
debt.
We
may
be
forced
to
delay
or
not
make
capital
expenditures,
which
may
adversely
affect
our
competitive
position
and
financial
results.

Our indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under outstanding notes and credit

facilities.

Subject
to
the
limits
contained
in
our
credit
agreements,
the
indenture
that
governs
our
outstanding
notes,
and
our
other
debt
instruments,
we
may
be
able
to
incur
additional
debt
from
time
to
time
to
finance
working
capital,
capital
expenditures,
investments
or
acquisitions,
or
for
other
purposes.
If
we
do
so,
the
risks
related
to
our
level
of
debt
could
intensify.
Specifically,
a
higher
level
of
debt
could
have
important
consequences,
including:

• making
it
more
difficult
for
us
to
satisfy
our
obligations
with
respect
to
the
notes
and
our
other
debt;

•

limiting
our
ability
to
obtain
additional
financing
to
fund
future
working
capital,
capital
expenditures,
acquisitions
or
other
general
corporate
requirements;

requiring
a
substantial
portion
of
our
cash
flows
to
be
dedicated
to
debt
service
payments
instead
of
other
purposes,
thereby
reducing
the
amount
of
cash
flows
available
for
the
payment
of
dividends,
working
capital,
capital
expenditures,
acquisitions
and
other
general
corporate
purposes;

increasing
our
vulnerability
to
general
adverse
economic
and
industry
conditions;

exposing
us
to
the
risk
of
increased
interest
rates
as
certain
of
our
borrowings,
including
borrowings
under
the
credit
facilities,
are
at
variable
rates
of
interest;

limiting
our
flexibility
in
planning
for
and
reacting
to
changes
in
the
industry
in
which
we
compete;

placing
us
at
a
competitive
disadvantage
to
other,
less
leveraged
competitors;
and

increasing
our
cost
of
borrowing.

In
addition,
the
indenture
that
governs
our
outstanding
notes
and
the
credit
agreement
governing
our
credit
facilities
contain
restrictive
covenants
that
limit
our
ability
to
engage
in
activities
(such
as
incurring
additional
debt)
that
may
be
in
our
long-term
best
interest.
Our
failure
to
comply
with
those
covenants
could
result
in
an
event
of
default
which,
if
not
cured
or
waived,
could
result
in
the
acceleration
of
all
our
debt.

Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Borrowings
under
the
credit
facilities
are
at
variable
rates
of
interest
and
expose
us
to
interest
rate
risk.
If
interest
rates
increase,
our
debt
service
obligations
on
the
variable
rate
indebtedness
will
increase
even
though
the
amount
borrowed
remains
the
same,
and
our
net
income
and
cash
flows,
including
cash
available
for
servicing
our
indebtedness,
will
correspondingly
decrease.
From
time
to
time,
we
may
enter
into
interest
rate
swaps
that
involve
the
exchange
of
floating
for
fixed
rate
interest
payments
in
order
to
reduce
interest
rate
volatility.

Table
of
Contents

Our credit facilities and the indenture governing our senior notes each contains restrictions and financial covenants that may restrict our business

and financing activities.

Our
credit
facilities
and
the
indenture
governing
our
senior
notes
contain,
and
any
other
future
financing
agreements
that
we
may
enter
into
will
likely

contain,
operating
and
financial
restrictions
and
covenants
that
may
restrict
our
ability
to
finance
future
operations
or
capital
needs,
to
engage
in,
expand
or
pursue
our
business
activities
or
to
make
distributions
to
our
unitholders.

Our
ability
to
comply
with
any
such
restrictions
and
covenants
is
uncertain
and
will
be
affected
by
the
levels
of
cash
flow
from
our
operations
and
events
or
circumstances
beyond
our
control.
If
market
or
other
economic
conditions
deteriorate,
our
ability
to
comply
with
these
covenants
may
be
impaired.
If
we
violate
any
of
the
restrictions,
covenants,
ratios
or
tests
in
our
credit
facilities
or
the
indenture,
a
significant
portion
of
our
indebtedness
may
become
immediately
due
and
payable
and
our
lenders’
commitment
to
make
further
loans
to
us
may
terminate.
We
might
not
have,
or
be
able
to
obtain,
sufficient
funds
to
make
these
accelerated
payments.

Restrictions in the agreements governing our indebtedness and other factors could limit our ability to make distributions to our unitholders.

The
indenture
governing
the
senior
notes
and
our
credit
facilities
prohibit
us
from
making
distributions
to
unitholders
if
certain
defaults
exist,
subject
to

certain
exceptions.

In
addition,
both
the
indenture
and
the
credit
facilities
contain
additional
restrictions
limiting
our
ability
to
pay
distributions
to
unitholders.

Accordingly,
we
may
be
restricted
by
our
debt
agreements
from
distributing
all
of
our
available
cash
to
our
unitholders.

Please
read
“Part
II.
Item
7.
Management’s
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations-Liquidity
and
Capital
Resources.”

Declaration
and
payment
of
future
distributions
to
unitholders
will
depend
upon
several
factors,
including
our
financial
condition,
earnings,
capital
requirements,
level
of
indebtedness,
statutory
and
contractual
restrictions
applying
to
the
payment
of
such
distributions,
and
such
other
considerations
that
the
Board
of
Directors
of
our
general
partner
deems
relevant.

Our level of indebtedness may increase, reducing our financial flexibility.

In
the
future,
we
may
incur
significant
indebtedness
in
order
to
make
future
acquisitions
or
to
develop
or
expand
our
facilities.
Our
level
of
indebtedness

could
affect
our
operations
in
several
ways,
including
the
following:

•

a
significant
portion
of
our
cash
flows
could
be
used
to
service
our
indebtedness;

a
high
level
of
debt
would
increase
our
vulnerability
to
general
adverse
economic
and
industry
conditions;

the
covenants
contained
in
the
agreements
governing
our
outstanding
indebtedness
will
limit
our
ability
to
borrow
additional
funds,
dispose
of
assets,
pay
distributions
and
make
certain
investments;

a
high
level
of
debt
may
place
us
at
a
competitive
disadvantage
compared
to
our
competitors
that
are
less
leveraged,
and
therefore
may
be
able
to
take
advantage
of
opportunities
that
our
indebtedness
would
prevent
us
from
pursuing;

our
debt
covenants
may
also
affect
our
flexibility
in
planning
for,
and
reacting
to,
changes
in
the
economy
and
our
industry;
and

a
high
level
of
debt
may
impair
our
ability
to
obtain
additional
financing
in
the
future
for
working
capital,
capital
expenditures,
acquisitions,
distributions
or
for
general
corporate
or
other
purposes.

A
high
level
of
indebtedness
increases
the
risk
that
we
may
default
on
our
debt
obligations.
Our
ability
to
meet
our
debt
obligations
and
to
reduce
our
level
of
indebtedness
depends
on
our
future
performance.
General
economic
conditions
and
financial,
business
and
other
factors
affect
our
operations
and
our
future
performance.
Many
of
these
factors
are
beyond
our
control.
We
may
not
be
able
to
generate
sufficient
cash
flows
to
pay
the
interest
on
our
debt,
and
future
working
capital,
borrowings
or
equity
financing
may
not
be
available
to
pay
or
refinance
such
debt.
Factors
that
will
affect
our
ability
to
raise
cash
through
an
offering
of
our
units
or
a
refinancing
of
our
debt
include
financial
market
conditions,
the
value
of
our
assets
and
our
performance
at
the
time
we
need
capital.

Rating agencies may downgrade our credit ratings, which would make it more difficult for us to raise capital and would increase our financing costs.

Any
downgrades
in
our
credit
ratings
may
make
raising
capital
more
difficult,
may
increase
the
cost
and
affect
the
terms
of
future
borrowings,
may
affect

the
terms
under
which
we
purchase
goods
and
services
and
may
limit
our
ability
to
take
advantage
of
potential
business
opportunities.

Table
of
Contents

Risks Related to Our Cokemaking Business

If a substantial portion of our agreements to supply coke, electricity, and/or steam are modified or terminated, our results of operations may be

adversely affected if we are not able to replace such agreements, or if we are not able to enter into new agreements at the same level of profitability.

We
make
substantially
all
of
our
coke,
electricity
and
steam
sales
under
long-term
agreements.
If
a
substantial
portion
of
these
agreements
are
modified
or

terminated
or
if
force
majeure
is
exercised,
our
results
of
operations
may
be
adversely
affected
if
we
are
not
able
to
replace
such
agreements,
or
if
we
are
not
able
to
enter
into
new
agreements
at
the
same
level
of
profitability.
The
profitability
of
our
long-term
coke,
energy
and
steam
sales
agreements
depends
on
a
variety
of
factors
that
vary
from
agreement
to
agreement
and
fluctuate
during
the
agreement
term.
We
may
not
be
able
to
obtain
long-term
agreements
at
favorable
prices,
compared
either
to
market
conditions
or
to
our
cost
structure.
Price
changes
provided
in
long-term
supply
agreements
may
not
reflect
actual
increases
in
production
costs.
As
a
result,
such
cost
increases
may
reduce
profit
margins
on
our
long-term
coke
and
energy
sales
agreements.
In
addition,
contractual
provisions
for
adjustment
or
renegotiation
of
prices
and
other
provisions
may
increase
our
exposure
to
short-term
price
volatility.

From
time
to
time,
we
discuss
the
extension
of
existing
agreements
and
enter
into
new
long-term
agreements
for
the
supply
of
coke,
steam,
and
energy
to
our
customers,
but
these
negotiations
may
not
be
successful
and
these
customers
may
not
continue
to
purchase
coke,
steam,
or
electricity
from
us
under
long-term
agreements.
In
addition,
declarations
of
bankruptcy
by
customers
can
result
in
changes
in
our
contracts
with
less
favorable
terms.
If
any
one
or
more
of
these
customers
were
to
become
financially
distressed
and
unable
to
pay
us,
significantly
reduce
their
purchases
of
coke,
steam,
or
electricity
from
us,
or
if
we
were
unable
to
sell
coke
or
electricity
to
them
on
terms
as
favorable
to
us
as
the
terms
under
our
current
agreements,
our
cash
flows,
financial
position,
permit
compliance,
or
results
of
operations
may
be
materially
and
adversely
affected.

Further,
because
of
certain
technological
design
constraints,
we
do
not
have
the
ability
to
shut
down
our
cokemaking
operations
if
we
do
not
have

adequate
customer
demand.
If
a
customer
refuses
to
take
or
pay
for
our
coke,
we
must
continue
to
operate
our
coke
ovens
even
though
we
may
not
be
able
to
sell
our
coke
immediately
and
may
incur
significant
additional
costs
for
natural
gas
to
maintain
the
temperature
inside
our
coke
oven
batteries
and
fees
under
our
rail
contracts
to
account
for
reductions
in
inbound
coal
or
outbound
coke
shipments
at
our
plants,
which
may
have
a
material
and
adverse
effect
on
our
cash
flows,
financial
position
or
results
of
operations.

The coke sales agreement and the energy sales agreement with AK Steel at our Haverhill II facility are subject to early termination under certain

circumstances and any such termination coupled with our inability to market the coke at similar prices could adversely affect our financial position.

The
coke
sales
agreement
and
the
energy
sales
agreement
with
AK
Steel
at
our
Haverhill
II
facility
are
subject
to
early
termination
by
AK
Steel
upon

satisfaction
of
two
criteria.
The
Haverhill
coke
sales
agreement
with
AK
Steel
expires
on
December
31,
2021.
The
Haverhill
energy
sales
agreement
with
AK
Steel
runs
concurrently
with
the
term
of
the
coke
sales
agreement,
including
any
renewals,
and
automatically
terminates
upon
the
termination
of
the
related
coke
sales
agreement.
Since
January
1,
2014,
the
coke
sales
agreement
may
be
terminated
by
AK
Steel
at
any
time
on
or
after
upon
two
years
prior
written
notice,
if
AK
Steel
(i)
permanently
shuts
down
operation
of
the
iron
producing
portion
at
its
steel
mill
in
Ashland,
Kentucky
(the
Ashland
Works
Plant)
and
(ii)
has
not
acquired
or
begun
construction
of
a
new
blast
furnace
in
the
U.S.
to
replace,
in
whole
or
in
part,
the
Ashland
Works
Plant’s
iron
production
capacity.
If
AK
Steel
were
able
to
satisfy
both
criteria
and
chose
to
elect
early
termination,
AK
Steel
must
provide
two
years
advance
notice
of
the
termination.
During
the
two
year
notice
period,
AK
Steel
must
continue
to
perform
in
full
under
the
terms
of
the
coke
sales
agreement
and
energy
sales
agreement.
On
January
28,
2019,
AK
Steel
announced
its
intention
to
permanently
close
its
Ashland
Works
Plant
by
the
end
of
2019.
Were
the
Ashland
Works
Plant
to
permanently
shut
down,
we
believe
AK
Steel
has
not
and
would
not
satisfy
the
second
criterion.

If
AK
Steel
were
to
terminate
the
coke
sales
agreement
and
we
were
unable
to
enter
into
similar
long-term
contracts
with
replacement
customers
for
the

coke
previously
purchased
by
AK
Steel,
then
we
may
be
forced
to
sell
some
or
all
of
the
previously
contracted
coke
in
the
spot
market.

Excess capacity in the global steel industry, and/or increased exports of coke from producing countries, may weaken our customers' demand for our

coke and could materially and adversely affect our future revenues and profitability.

In
some
countries
steelmaking
capacity
exceeds
demand
for
steel
products.
Rather
than
reducing
employment
by
matching
production
capacity
to

consumption,
steel
manufacturers
in
these
countries
(often
with
local
government
assistance
or
subsidies
in
various
forms)
may
export
steel
at
prices
that
are
significantly
below
their
home
market
prices

Table
of
Contents

and
that
may
not
reflect
their
costs
of
production
or
capital.
Our
steelmaking
customers,
may
decrease
the
prices
they
charge
for
steel,
or
take
other
action,
as
the
supply
of
steel
increases.
The
profitability
and
financial
position
of
our
steelmaking
customers
may
be
adversely
affected,
causing
such
customers
to
reduce
their
demand
for
our
coke
and
making
it
more
likely
that
they
may
seek
to
renegotiate
their
contracts
with
us
or
fail
to
pay
for
the
coke
they
are
required
to
take
under
our
contracts.
In
addition,
future
increases
in
exports
of
coke
from
China
and/or
other
coke-producing
countries
also
may
reduce
our
customers'
demand
for
coke
capacity.
Such
reduced
demand
for
our
coke
could
adversely
affect
the
certainty
of
our
long-term
relationships
with
our
customers
depress
coke
prices,
and
limit
our
ability
to
enter
into
new,
or
renew
existing,
commercial
arrangements
with
our
customers,
as
well
as
our
ability
to
sell
excess
capacity
in
the
spot
market,
and
could
materially
and
adversely
affect
our
future
revenues
and
profitability.

Certain provisions in our long-term coke agreements may result in economic penalties to us, or may result in termination of our coke sales
agreements for failure to meet minimum volume requirements or other required specifications, and certain provisions in these agreements and our energy
sales agreements may permit our customers to suspend performance.

Our
agreements
for
the
supply
of
coke,
energy
and/or
steam,
contain
provisions
requiring
us
to
supply
minimum
volumes
of
our
products
to
our
customers.
To
the
extent
we
do
not
meet
these
minimum
volumes,
we
are
generally
required
under
the
terms
of
our
coke
sales
agreements
to
procure
replacement
supply
to
our
customers
at
the
applicable
contract
price
or
potentially
be
subject
to
cover
damages
for
any
shortfall.
If
future
shortfalls
occur,
we
will
work
with
our
customer
to
identify
possible
other
supply
sources
while
we
implement
operating
improvements
at
the
facility,
but
we
may
not
be
successful
in
identifying
alternative
supplies
and
may
be
subject
to
paying
the
contract
price
for
any
shortfall
or
to
cover
damages,
either
of
which
could
adversely
affect
our
future
revenues
and
profitability.
Our
coke
sales
agreements
also
contain
provisions
requiring
us
to
deliver
coke
that
meets
certain
quality
thresholds.
Failure
to
meet
these
specifications
could
result
in
economic
penalties,
including
price
adjustments,
the
rejection
of
deliveries
or
termination
of
our
agreements.

Our
coke
and
energy
sales
agreements
contain
force
majeure
provisions
allowing
temporary
suspension
of
performance
by
our
customers
for
the
duration

of
specified
events
beyond
the
control
of
our
customers.
Declaration
of
force
majeure,
coupled
with
a
lengthy
suspension
of
performance
under
one
or
more
coke
or
energy
sales
agreements,
may
seriously
and
adversely
affect
our
cash
flows,
financial
position
and
results
of
operations.

To the extent we do not meet coal-to-coke yield standards in our coke sales agreements, we are responsible for the cost of the excess coal used in the

cokemaking process, which could adversely impact our results of operations and profitability.

Our
ability
to
pass
through
our
coal
costs
to
our
customers
under
our
coke
sales
agreements
is
generally
subject
to
our
ability
to
meet
some
form
of
coal-

to-coke
yield
standard.
To
the
extent
that
we
do
not
meet
the
yield
standard
in
the
contract,
we
are
responsible
for
the
cost
of
the
excess
coal
used
in
the
cokemaking
process.
We
may
not
be
able
to
meet
the
yield
standards
at
all
times,
and
as
a
result
we
may
suffer
lower
margins
on
our
coke
sales
and
our
results
of
operations
and
profitability
could
be
adversely
affected.

Failure to maintain effective quality control systems at our cokemaking facilities could have a material adverse effect on our results of operations.

The
quality
of
our
coke
is
critical
to
the
success
of
our
business.
For
instance,
our
coke
sales
agreements
contain
provisions
requiring
us
to
deliver
coke
that
meets
certain
quality
thresholds.
If
our
coke
fails
to
meet
such
specifications,
we
could
be
subject
to
significant
contractual
damages
or
contract
terminations,
and
our
sales
could
be
negatively
affected.
The
quality
of
our
coke
depends
significantly
on
the
effectiveness
of
our
quality
control
systems,
which,
in
turn,
depends
on
a
number
of
factors,
including
the
design
of
our
quality
control
systems,
our
quality-training
program,
our
laboratories
and
our
ability
to
ensure
that
our
employees
adhere
to
our
quality
control
policies
and
guidelines.
Any
significant
failure
or
deterioration
of
our
quality
control
systems
could
have
a
material
adverse
effect
on
our
results
of
operations.

Disruptions to our supply of coal and coal mixing services may reduce the amount of coke we produce and deliver, and if we are not able to cover the

shortfall in coal supply or obtain replacement mixing services from other providers, our results of operations and profitability could be adversely affected.

Substantially
all
of
the
metallurgical
coal
used
to
produce
coke
at
our
cokemaking
facilities,
is
purchased
from
third-parties
under
one-year
contracts.
We

cannot
assure
that
there
will
continue
to
be
an
ample
supply
of
metallurgical
coal
available
or
that
these
facilities
will
be
supplied
without
any
significant
disruption
in
coke
production,
as
economic,
environmental,
and
other
conditions
outside
of
our
control
may
reduce
our
ability
to
source
sufficient
amounts
of
coal
for
our
forecasted
operational
needs.
If
we
are
not
able
to
make
up
the
shortfalls
resulting
from
such
supply
failures
through

Table
of
Contents

purchases
of
coal
from
other
sources,
the
failure
of
our
coal
suppliers
to
meet
their
supply
commitments
could
materially
and
adversely
impact
our
results
of
operations
and,
ultimately,
impact
the
structural
integrity
of
our
coke
oven
batteries.

At
our
Granite
City
and
Haverhill
cokemaking
facilities,
we
rely
on
third-parties
to
mix
coals
that
we
have
purchased
into
coal
mixes
that
we
use
to

produce
coke.
We
have
entered
into
long-term
agreements
with
coal
mixing
service
providers
that
are
coterminous
with
our
coke
sales
agreements.
However,
there
are
limited
alternative
providers
of
coal
mixing
services
and
any
disruptions
from
our
current
service
providers
could
materially
and
adversely
impact
our
results
of
operations.
In
addition,
if
our
rail
transportation
agreements
are
terminated,
we
may
have
to
pay
higher
rates
to
access
rail
lines
or
make
alternative
transportation
arrangements.

Limitations on the availability and reliability of transportation, and increases in transportation costs, particularly rail systems, could materially and

adversely affect our ability to obtain a supply of coal and deliver coke to our customers.

Our
ability
to
obtain
coal
depends
primarily
on
third-party
rail
systems
and
to
a
lesser
extent
river
barges.
If
we
are
unable
to
obtain
rail
or
other
transportation
services,
or
are
unable
to
do
so
on
a
cost-effective
basis,
our
results
of
operations
could
be
adversely
affected.
Alternative
transportation
and
delivery
systems
are
generally
inadequate
and
not
suitable
to
handle
the
quantity
of
our
shipments
or
to
ensure
timely
delivery.
The
loss
of
access
to
rail
capacity
could
create
temporary
disruption
until
the
access
is
restored,
significantly
impairing
our
ability
to
receive
coal
and
resulting
in
materially
decreased
revenues.
Our
ability
to
open
new
cokemaking
facilities
may
also
be
affected
by
the
availability
and
cost
of
rail
or
other
transportation
systems
available
for
servicing
these
facilities.

Our
arrangements
with
AM
USA
at
the
Haverhill
cokemaking
facility
require
us
to
deliver
coke
to
AM
USA
via
railcar.
We
have
entered
into
long-term
rail
transportation
agreements
to
meet
these
obligations.
Disruption
of
these
transportation
services
because
of
weather-related
problems,
mechanical
difficulties,
train
derailments,
infrastructure
damage,
strikes,
lock-outs,
lack
of
fuel
or
maintenance
items,
fuel
costs,
transportation
delays,
accidents,
terrorism,
domestic
catastrophe
or
other
events
could
temporarily,
or
over
the
long-term,
impair
our
ability
to
produce
coke,
and
therefore,
could
materially
and
adversely
affect
our
business
and
results
of
operations.

If we are unable to effectively protect our intellectual property, third parties may use our technology, which would impair our ability to compete in our

markets.

Our
future
success
will
depend
in
part
on
our
ability
to
obtain
and
maintain
meaningful
patent
protection
for
certain
of
our
technologies
and
products

throughout
the
world.
The
degree
of
future
protection
for
our
proprietary
rights
is
uncertain.
We
rely
on
patents
to
protect
a
significant
part
our
intellectual
property
portfolio
and
to
enhance
our
competitive
position.
However,
our
presently
pending
or
future
patent
applications
may
not
issue
as
patents,
and
any
patent
previously
issued
to
us
or
our
subsidiaries
may
be
challenged,
invalidated,
held
unenforceable
or
circumvented.
Furthermore,
the
claims
in
patents
that
have
been
issued
to
us
or
our
subsidiaries
or
that
may
be
issued
to
us
in
the
future
may
not
be
sufficiently
broad
to
prevent
third
parties
from
using
cokemaking
technologies
and
heat
recovery
processes
similar
to
ours.
In
addition,
the
laws
of
various
foreign
countries
in
which
we
plan
to
compete
may
not
protect
our
intellectual
property
to
the
same
extent
as
do
the
laws
of
the
United
States.
If
we
fail
to
obtain
adequate
patent
protection
for
our
proprietary
technology,
our
ability
to
be
commercially
competitive
may
be
materially
impaired.

Risks Related to Our Logistics Business

The growth and success of our logistics business depends upon our ability to find and contract for adequate throughput volumes, and an extended

decline in demand for coal could affect the customers for our logistics business adversely. As a consequence, the operating results and cash flows of our
logistics business could be materially and adversely affected.

The
financial
results
of
our
logistics
business
segment
are
significantly
affected
by
the
demand
for
both
thermal
coal
and
metallurgical
coal.
An
extended

decline
in
our
customers’
demand
for
either
thermal
or
metallurgical
coals
could
result
in
a
reduced
need
for
the
coal
mixing,
terminalling
and
transloading
services
we
offer,
thus
reducing
throughput
and
utilization
of
our
logistics
assets.
Demand
for
such
coals
may
fluctuate
due
to
factors
beyond
our
control:

•

Thermal
coal
demand
:
may
be
impacted
by
changes
in
the
energy
consumption
pattern
of
industrial
consumers,
electricity
generators
and
residential
users,
as
well
as
weather
conditions
and
extreme
temperatures.
The
amount
of
thermal
coal
consumed
for
electric
power
generation
is
affected
primarily
by
the
overall
demand
for
electricity,
the
availability,
quality
and
price
of
competing
fuels
for
power
generation,
and
governmental
regulation.
For
example,
over
the
past
few
years,
production
of
natural
gas
in
the
U.S.
has
increased
dramatically,
which
has
resulted
in
lower
natural-gas
prices.
As
a
result
of
sustained
low
natural
gas
prices,
coal-fuel
generation
plants
have
been
displaced
by
natural-gas
fueled
generation
plants.
In
addition,

Table
of
Contents

state
and
federal
mandates
for
increased
use
of
electricity
from
renewable
energy
sources,
or
the
retrofitting
of
existing
coal-fired
generators
with
pollution
control
systems,
also
could
adversely
impact
the
demand
for
thermal
coal.
Finally,
unusually
warm
winter
weather
may
reduce
the
commercial
and
residential
needs
for
heat
and
electricity
which,
in
turn,
may
reduce
the
demand
for
thermal
coal;
and

• Metallurgical
coal
demand
:
may
be
impacted
adversely
by
economic
downturns
resulting
in
decreased
demand
for
steel
and
an
overall
decline
in
steel
production.
A
decline
in
blast
furnace
production
of
steel
may
reduce
the
demand
for
furnace
coke,
an
intermediate
product
made
from
metallurgical
coal.
Decreased
demand
for
metallurgical
coal
also
may
result
from
increased
steel
industry
utilization
of
processes
that
do
not
use,
or
reduce
the
need
for,
furnace
coke,
such
as
electric
arc
furnaces,
or
blast
furnace
injection
of
pulverized
coal
or
natural
gas.

Additionally,
fluctuations
in
the
market
price
of
coal
can
greatly
affect
production
rates
and
investments
by
third-parties
in
the
development
of
new
and
existing
coal
reserves.
Mining
activity
may
decrease
as
spot
coal
prices
decrease.
We
have
no
control
over
the
level
of
mining
activity
by
coal
producers,
which
may
be
affected
by
prevailing
and
projected
coal
prices,
demand
for
hydrocarbons,
the
level
of
coal
reserves,
geological
considerations,
governmental
regulation
and
the
availability
and
cost
of
capital.
A
material
decrease
in
coal
mining
production
in
the
areas
of
operation
for
our
logistics
business,
whether
as
a
result
of
depressed
commodity
prices
or
otherwise,
could
result
in
a
decline
in
the
volume
of
coal
processed
through
our
logistics
facilities,
which
would
reduce
our
revenues
and
operating
income.

Decreased
demand
for
thermal
or
metallurgical
coals,
and
extended
or
substantial
price
declines
for
coal
could
adversely
affect
our
operating
results
for

future
periods
and
our
ability
to
generate
cash
flows
necessary
to
improve
productivity
and
expand
operations.
The
cash
flows
associated
with
our
logistics
business
may
decline
unless
we
are
able
to
secure
new
volumes
of
coal,
or
other
dry
bulk
products,
by
attracting
additional
customers
to
these
operations.
Future
growth
and
profitability
of
our
logistics
business
segment
will
depend,
in
part,
upon
whether
we
can
contract
for
additional
coal
and
other
bulk
commodity
volumes
at
a
rate
greater
than
that
of
any
decline
in
volumes
from
existing
customers.
Accordingly,
decreased
demand
for
coal,
or
other
bulk
commodities,
or
a
decrease
in
the
market
price
of
coal,
or
other
bulk
commodities,
could
have
a
material
adverse
effect
on
the
results
of
operations
or
financial
condition
of
our
logistics
business.

The geographic location of the Convent Marine Terminal could expose us to potential significant liabilities, including operational hazards and

unforeseen business interruptions, that could substantially and adversely affect our future financial performance.

CMT
is
located
in
the
Gulf
Coast
region,
and
its
operations
are
subject
to
operational
hazards
and
unforeseen
interruptions,
including
interruptions
from

hurricanes
or
floods,
which
have
historically
impacted
the
region
with
some
regularity.
If
any
of
these
events
were
to
occur,
we
could
incur
substantial
losses
because
of
personal
injury
or
loss
of
life,
severe
damage
to
and
destruction
of
property
and
equipment,
and
pollution
or
other
environmental
damage
resulting
in
curtailment
or
suspension
of
our
related
operations.

Risks Inherent in an Investment in Us

We may not generate sufficient earnings from operations to enable us to pay quarterly distributions to unitholders.

The
amount
we
decide
to
distribute
on
our
common
units
depends
upon
our
liquidity
and
other
considerations,
which
will
fluctuate
from
quarter
to
quarter

based
on
the
following
factors,
some
of
which
are
beyond
our
control:

•

severe
financial
hardship
or
bankruptcy
of
one
or
more
of
our
major
customers,
or
the
occurrence
of
other
events
affecting
our
ability
to
collect
payments
from
our
customers,
including
our
customers’
default;

volatility
and
cyclical
downturns
in
the
steel
industry
and
other
industries
in
which
our
customers
and/or
suppliers
operate;

the
exercise
by
AK
Steel
of
its
early
termination
rights
under
its
coke
sales
agreement
and
its
energy
sales
agreement
at
the
Haverhill
facility;

our
sponsor’s
inability
to
perform
under
the
omnibus
agreement;

age
of,
and
changes
in
the
reliability,
efficiency
and
capacity
of
the
various
equipment
and
operating
facilities
used
in
our
cokemaking
operations
and/or
our
logistics
business,
and
in
the
operations
of
our
major
customers,
business
partners
and/or
suppliers;

the
cost
of
environmental
remediation
projects
at
our
cokemaking
operations
and
our
logistics
facilities;

Table
of
Contents

•

changes
in
the
expected
operating
levels
of
our
assets;

our
ability
to
meet
minimum
volume
requirements,
coal-to-coke
yield
standards
and
coke
quality
requirements
in
our
coke
sales
agreements;

our
ability
to
enter
into
new,
or
renew
existing,
long-term
agreements
for
the
supply
of
coke
to
domestic
steel
producers
under
terms
similar
to,
or
more
favorable
than,
those
currently
in
place;

our
ability
to
enter
into
new,
or
renew
existing,
agreements
for
the
sale
of
steam
and
electricity
generated
by
our
facilities
under
terms
similar
to,
or
more
favorable
than,
those
currently
in
place;

our
ability
to
enter
into
new,
or
renew
existing,
agreements
for
coal
handling,
mixing,
storage,
terminalling,
transloading
and/or
transportation
services
at
our
logistics
facilities,
under
terms
similar
to,
or
more
favorable
than,
those
currently
in
place;

changes
in
the
marketplace
that
may
adversely
affect
the
supply
of,
and
demand
for,
our
coke
and/or
our
logistics
services,
including
increased
exports
of
coke
from
other
countries
and
increasing
competition
from
alternative
steelmaking
and
cokemaking
technologies
that
have
the
potential
to
reduce
or
eliminate
the
use
of
coke;

our
relationships
with,
and
other
conditions
affecting,
our
customers
and/or
suppliers;

changes
in
levels
of
production,
production
capacity,
pricing
and/or
margins
for
coke
and/or
coal;

our
ability
to
secure
new
coal
supply
and/or
logistics
agreements
or
to
renew
existing
agreements;

variation
in
availability,
quality
and
supply
of
metallurgical
coal
used
in
the
cokemaking
process,
including
as
a
result
of
nonperformance
by
our
suppliers;

effects
of
railroad,
barge,
truck
and
other
transportation
performance
and
costs,
including
any
transportation
disruptions;

cost
of
labor
and
other
risks
related
to
employees
and
workplace
safety;

effects
of
adverse
events
relating
to
the
operation
of
our
facilities
and
to
the
transportation
and
storage
of
hazardous
materials
(including
equipment
malfunction,
explosions,
fires,
spills,
and
the
effects
of
severe
weather
conditions
and
extreme
temperatures);

changes
in
product
specifications
for
the
coke
that
we
produce,
or
the
coals
that
we
mix;

changes
in
credit
terms
required
by
our
suppliers;

changes
in
insurance
markets
and
the
level,
types
and
costs
of
coverage
available,
and
the
financial
ability
of
our
insurers
to
meet
their
obligations;

changes
in,
or
new,
statutes,
regulations
or
governmental
policies
by
federal,
state
and
local
authorities
with
respect
to
protection
of
the
environment;

changes
in,
or
new,
statutes,
regulations
or
governmental
policies
by
federal
authorities
with
respect
to
the
sale
of
electric
energy
from
the
Haverhill
and
Middletown
facilities;

proposed
or
final
changes
in
accounting
and/or
tax
methodologies,
laws,
regulations,
rules,
or
policies,
or
their
interpretations,
including
those
affecting
inventories,
leases,
equity
compensation,
income,
or
other
matters;

changes
in
tax
laws
or
their
interpretations,
including
the
adoption
of
proposed
rules
governing
whether
a
partnership
such
as
ours
would
be
treated
as
a
corporation
for
federal
income
tax
purposes;

nonperformance
or
force
majeure
by,
or
disputes
with
or
changes
in
contract
terms
with,
major
customers,
suppliers,
dealers,
distributors
or
other
business
partners;
and

changes
in,
or
new,
statutes,
regulations,
governmental
policies
and
taxes,
or
their
interpretations.

In
addition,
the
actual
amount
of
cash
we
will
have
available
for
distribution
will
depend
on
other
factors,
some
of
which
are
beyond
our
control,

including:

•

the
level
of
capital
expenditures
we
make;

the
cost
of
acquisitions;

Table
of
Contents

•

our
debt
service
requirements
and
other
liabilities;

fluctuations
in
our
working
capital
needs;

our
ability
to
borrow
funds
and
access
capital
markets;

restrictions
contained
in
debt
agreements
to
which
we
are
a
party;
and

the
amount
of
cash
reserves
established
by
our
general
partner.

Our sponsor owns and controls our general partner, which has sole responsibility for conducting our business and managing our operations. Our
general partner and its affiliates, including our sponsor, have conflicts of interest with us and may favor their own interests to the detriment of us and our
unitholders.

Our
sponsor
owns
and
controls
our
general
partner
and
appoints
the
directors
of
our
general
partner.
Although
our
general
partner
has
a
duty
to
manage
us
in
a
manner
it
believes
to
be
in
our
best
interests,
the
executive
officers
and
directors
of
our
general
partner
have
a
fiduciary
duty
to
manage
our
general
partner
in
a
manner
beneficial
to
our
sponsor.
Therefore,
conflicts
of
interest
may
arise
between
our
sponsor
or
any
of
its
affiliates,
including
our
general
partner,
on
the
one
hand,
and
us
or
any
of
our
unitholders,
on
the
other
hand.
In
resolving
these
conflicts
of
interest,
our
general
partner
may
favor
its
own
interests
and
the
interests
of
its
affiliates
over
the
interests
of
our
common
unitholders.
These
conflicts
include
the
following
situations,
among
others:

•

our
general
partner
is
allowed
to
take
into
account
the
interests
of
parties
other
than
us,
such
as
our
sponsor,
in
exercising
certain
rights
under
our
partnership
agreement,
which
has
the
effect
of
limiting
its
duty
to
our
unitholders;

neither
our
partnership
agreement
nor
any
other
agreement
requires
our
sponsor
to
pursue
a
business
strategy
that
favors
us;

our
partnership
agreement
replaces
the
fiduciary
duties
that
would
otherwise
be
owed
by
our
general
partner
with
contractual
standards
governing
its
duties,
limits
our
general
partner’s
liabilities
and
restricts
the
remedies
available
to
our
unitholders
for
actions
that,
without
such
limitations,
might
constitute
breaches
of
fiduciary
duty;

except
in
limited
circumstances,
our
general
partner
has
the
power
and
authority
to
conduct
our
business
without
unitholder
approval;

our
general
partner
determines
the
amount
and
timing
of
asset
purchases
and
sales,
borrowings,
issuances
of
additional
partnership
securities
and
the
level
of
reserves,
each
of
which
can
affect
the
amount
of
cash
that
is
distributed
to
our
unitholders;

our
general
partner
determines
the
amount
and
timing
of
any
capital
expenditure
and
whether
a
capital
expenditure
is
classified
as
an
ongoing
capital
expenditure,
which
reduces
operating
surplus,
or
a
replacement
capital
expenditure,
which
does
not
reduce
operating
surplus.
This
determination
can
affect
the
amount
of
cash
that
is
distributed
to
our
unitholders
which,
in
turn,
may
affect
the
ability
of
the
subordinated
units
to
convert;

our
general
partner
may
cause
us
to
borrow
funds
in
order
to
permit
the
payment
of
cash
distributions,
even
if
the
purpose
or
effect
of
the
borrowing
is
to
make
IDRs;

our
partnership
agreement
permits
us
to
distribute
up
to
$26.5
million
as
operating
surplus,
even
if
it
is
generated
from
asset
sales,
non-working
capital
borrowings
or
other
sources
that
would
otherwise
constitute
capital
surplus.
This
cash
may
be
used
to
fund
distributions
on
our
subordinated
units
or
the
IDRs;

our
general
partner
determines
which
costs
incurred
by
it
and
its
affiliates
are
reimbursable
by
us;

our
partnership
agreement
does
not
restrict
our
general
partner
from
causing
us
to
pay
it
or
its
affiliates
for
any
services
rendered
to
us
or
entering
into
additional
contractual
arrangements
with
its
affiliates
on
our
behalf;

our
general
partner
intends
to
limit
its
liability
regarding
our
contractual
and
other
obligations;

our
general
partner
may
exercise
its
right
to
call
and
purchase
common
units
if
it
and
its
affiliates
own
more
than
80
percent
of
the
common
units;

our
general
partner
controls
the
enforcement
of
obligations
that
it
and
its
affiliates
owe
to
us;

Table
of
Contents

•

our
general
partner
decides
whether
to
retain
separate
counsel,
accountants
or
others
to
perform
services
for
us;
and

our
general
partner
may
elect
to
cause
us
to
issue
common
units
to
it
in
connection
with
a
resetting
of
the
target
distribution
levels
related
to
our
general
partner’s
IDR
without
the
approval
of
the
conflicts
committee
of
the
Board
of
Directors
of
our
general
partner
or
the
unitholders.
This
election
may
result
in
lower
distributions
to
the
common
unitholders
in
certain
situations.

In
addition,
we
may
compete
directly
with
our
sponsor
for
acquisition
opportunities.
Please
read
“Our
sponsor
and
other
affiliates
of
our
general
partner

may
compete
with
us.”

We expect to distribute substantially all of our available cash, which could limit our ability to grow and make acquisitions.

We
expect
that
we
will
distribute
substantially
all
of
our
available
cash
to
our
unitholders
and
will
rely
primarily
upon
external
financing
sources,

including
commercial
bank
borrowings
and
the
issuance
of
debt
and
equity
securities,
to
fund
our
acquisitions
and
expansion
capital
expenditures.
As
a
result,
to
the
extent
we
are
unable
to
finance
growth
externally,
our
cash
distribution
policy
will
significantly
impair
our
ability
to
grow.

In
addition,
because
we
distribute
substantially
all
of
our
available
cash,
we
may
not
grow
as
quickly
as
businesses
that
reinvest
their
cash
to
expand

ongoing
operations.
To
the
extent
we
issue
additional
units
in
connection
with
any
acquisitions
or
expansion
capital
expenditures,
the
payment
of
distributions
on
those
additional
units
may
increase
the
risk
that
we
will
be
unable
to
maintain
or
increase
our
per
unit
distribution
level.
There
are
no
limitations
in
our
partnership
agreement
on
our
ability
to
issue
additional
units,
including
units
ranking
senior
to
the
common
units.
The
incurrence
of
additional
commercial
borrowings
or
other
debt
to
finance
our
growth
strategy
would
result
in
increased
interest
expense,
which,
in
turn,
may
impact
the
cash
that
we
have
available
to
distribute
to
our
unitholders.

Our preferential right over our sponsor to pursue certain growth opportunities and our right of first offer to acquire certain of our sponsor’s assets

are subject to risks and uncertainties, and ultimately we may not pursue those opportunities or acquire any of those assets.

Our
omnibus
agreement
provides
us
with
preferential
rights
to
pursue
certain
growth
opportunities
in
the
U.S.
and
Canada
identified
by
our
sponsor
and
a
right
of
first
offer
to
acquire
certain
of
our
sponsor’s
cokemaking
assets
located
in
the
U.S.
and
Canada
for
so
long
as
our
sponsor
or
its
controlled
affiliate
controls
our
general
partner.
The
consummation
and
timing
of
any
future
acquisitions
of
such
assets
will
depend
upon,
among
other
things,
our
sponsor’s
ability
to
identify
such
growth
opportunities,
our
sponsor’s
willingness
to
offer
such
assets
for
sale,
our
ability
to
negotiate
acceptable
customer
contracts
and
other
agreements
with
respect
to
such
assets
and
our
ability
to
obtain
financing
on
acceptable
terms.
We
can
offer
no
assurance
that
we
will
be
able
to
successfully
consummate
any
future
acquisitions
pursuant
to
our
rights
under
the
omnibus
agreement,
and
our
sponsor
is
under
no
obligation
to
identify
growth
opportunities
or
to
sell
any
assets
that
would
be
subject
to
our
right
of
first
offer.
For
these
or
a
variety
of
other
reasons,
we
may
decide
not
to
exercise
our
preferential
right
to
pursue
growth
opportunities
or
our
right
of
first
offer
when
any
opportunities
are
identified
or
assets
are
offered
for
sale,
and
our
decision
will
not
be
subject
to
unitholder
approval.
Please
read
“Part
III.
Item
13.
Certain
Relationships
and
Related
Transactions,
and
Director
Independence-Agreements
with
Affiliates-Omnibus
Agreement.”

Our partnership agreement contains provisions that eliminate and replace the fiduciary duty standards to which our general partner otherwise would

be held by state law.

Our
partnership
agreement
permits
our
general
partner
to
make
a
number
of
decisions
in
its
individual
capacity,
as
opposed
to
in
its
capacity
as
our

general
partner,
or
otherwise
free
of
fiduciary
duties
to
us
and
our
unitholders.
This
entitles
our
general
partner
to
consider
only
the
interests
and
factors
that
it
desires
and
relieves
it
of
any
duty
or
obligation
to
give
any
consideration
to
any
interest
of,
or
factors
affecting,
us,
our
affiliates
or
our
limited
partners.
Examples
of
decisions
that
our
general
partner
may
make
in
its
individual
capacity
include:

•

how
to
allocate
business
opportunities
among
us
and
its
affiliates;

whether
to
exercise
its
call
right;

how
to
exercise
its
voting
rights
with
respect
to
the
units
it
owns;

whether
to
exercise
its
registration
rights;

whether
to
elect
to
reset
target
distribution
levels;
and

whether
or
not
to
consent
to
any
merger
or
consolidation
of
the
partnership
or
amendment
to
the
partnership
agreement.

Table
of
Contents

By
purchasing
a
common
unit,
a
unitholder
is
treated
as
having
consented
to
the
provisions
in
the
partnership
agreement,
including
the
provisions

discussed
above.

Our partnership agreement restricts the remedies available to our unitholders for actions taken by our general partner that might otherwise constitute

breaches of fiduciary duty.

Our
partnership
agreement
provides
that:

•

whenever
our
general
partner
makes
a
determination
or
takes,
or
declines
to
take,
any
action
in
its
capacity
as
our
general
partner,
it
must
do
so
in
good
faith,
and
will
not
be
subject
to
any
other
standard
imposed
by
our
partnership
agreement,
or
any
law,
rule
or
regulation,
or
at
equity;

our
general
partner
will
not
have
any
liability
to
us
or
our
unitholders
for
decisions
made
in
its
capacity
as
a
general
partner
so
long
as
it
acted
in
good
faith,
meaning
that
it
believed
that
the
decision
was
in
the
best
interest
of
our
partnership;

our
general
partner
and
its
officers
and
directors
will
not
be
liable
for
monetary
damages
to
us
or
our
limited
partners
resulting
from
any
act
or
omission
unless
there
has
been
a
final
and
non-appealable
judgment
entered
by
a
court
of
competent
jurisdiction
determining
that
our
general
partner
or
its
officers
and
directors,
as
the
case
may
be,
acted
in
bad
faith
or,
in
the
case
of
a
criminal
matter,
acted
with
knowledge
that
the
conduct
was
criminal;
and

our
general
partner
will
not
be
in
breach
of
its
obligations
under
the
partnership
agreement
or
its
duties
to
us
or
our
limited
partners
if
a
transaction
with
an
affiliate,
or
the
resolution
of
a
conflict
of
interest,
is:

•

approved
by
the
conflicts
committee
of
the
Board
of
Directors
of
our
general
partner,
although
our
general
partner
is
not
obligated
to
seek
such
approval;
or

approved
by
the
vote
of
a
majority
of
the
outstanding
common
units,
excluding
any
common
units
owned
by
our
general
partner
and
its
affiliates.

In
connection
with
a
situation
involving
a
transaction
with
an
affiliate
or
a
conflict
of
interest,
any
determination
by
our
general
partner
must
be
made
in
good
faith.
If
an
affiliate
transaction
or
the
resolution
of
a
conflict
of
interest
is
not
approved
by
our
common
unitholders
or
the
conflicts
committee
then
it
will
be
presumed
that,
in
making
its
decision,
taking
any
action
or
failing
to
act,
the
Board
of
Directors
acted
in
good
faith,
and
in
any
proceeding
brought
by
or
on
behalf
of
any
limited
partner
or
the
partnership,
the
person
bringing
or
prosecuting
such
proceeding
will
have
the
burden
of
overcoming
such
presumption.

Our sponsor and other affiliates of our general partner may compete with us.

Pursuant
to
the
terms
of
our
partnership
agreement,
the
doctrine
of
corporate
opportunity,
or
any
analogous
doctrine,
does
not
apply
to
our
general
partner

or
any
of
its
affiliates,
including
its
executive
officers
and
directors
and
our
sponsor.
Except
as
described
under
“Part
III.
Item
13.
Certain
Relationships
and
Related
Transactions,
and
Director
Independence-Agreements
Entered
Into
with
Affiliates
in
Connection
with
our
Initial
Public
Offering-Omnibus
Agreement.”
any
such
person
or
entity
that
becomes
aware
of
a
potential
transaction,
agreement,
arrangement
or
other
matter
that
may
be
an
opportunity
for
us
will
not
have
any
duty
to
communicate
or
offer
such
opportunity
to
us.
Any
such
person
or
entity
will
not
be
liable
to
us
or
to
any
limited
partner
for
breach
of
any
fiduciary
duty
or
other
duty
by
reason
of
the
fact
that
such
person
or
entity
pursues
or
acquires
such
opportunity
for
itself,
directs
such
opportunity
to
another
person
or
entity
or
does
not
communicate
such
opportunity
or
information
to
us.
This
may
create
actual
and
potential
conflicts
of
interest
between
us
and
affiliates
of
our
general
partner
and
result
in
less
than
favorable
treatment
of
us
and
our
unitholders.

Our general partner may elect to cause us to issue common units to it in connection with a resetting of the target distribution levels related to its IDRs,
without the approval of the conflicts committee of its Board of Directors or the holders of our common units. This could result in lower distributions to holders
of our common units.

Our
general
partner
has
the
right,
as
the
initial
holder
of
our
IDRs,
at
any
time
when
there
are
no
subordinated
units
outstanding
and
it
has
received

incentive
distributions
at
the
highest
level
to
which
it
is
entitled
(48.0
percent)
for
the
prior
four
consecutive
fiscal
quarters,
to
reset
the
initial
target
distribution
levels
at
higher
levels
based
on
our
distributions
at
the
time
of
the
exercise
of
the
reset
election.
Following
a
reset
election
by
our
general
partner,
the
minimum
quarterly
distribution
will
be
adjusted
to
equal
the
reset
minimum
quarterly
distribution
and
the
target
distribution
levels
will
be
reset
to
correspondingly
higher
levels
based
on
percentage
increases
above
the
reset
minimum
quarterly
distribution.

If
our
general
partner
elects
to
reset
the
target
distribution
levels,
it
will
be
entitled
to
receive
a
number
of
common
units.
The
number
of
common
units
to

be
issued
to
our
general
partner
will
equal
the
number
of
common
units

Table
of
Contents

that
would
have
entitled
the
holder
to
an
aggregate
quarterly
cash
distribution
in
the
two-quarter
period
prior
to
the
reset
election
equal
to
the
distribution
to
our
general
partner
on
the
IDRs
in
the
quarter
prior
to
the
reset
election.
Our
general
partner’s
general
partner
interest
in
us
(currently
2
percent)
will
be
maintained
at
the
percentage
that
existed
immediately
prior
to
the
reset
election.
We
anticipate
that
our
general
partner
would
exercise
this
reset
right
in
order
to
facilitate
acquisitions
or
internal
growth
projects
that
would
not
be
sufficiently
accretive
to
cash
distributions
per
common
unit
without
such
conversion.
It
is
possible,
however,
that
our
general
partner
could
exercise
this
reset
election
at
a
time
when
it
is
experiencing,
or
expects
to
experience,
declines
in
the
cash
distributions
it
receives
related
to
its
IDR
and
may,
therefore,
desire
to
be
issued
common
units
rather
than
retain
the
right
to
receive
incentive
distributions
based
on
the
initial
target
distribution
levels.
This
risk
could
be
elevated
if
our
IDRs
have
been
transferred
to
a
third-party.
As
a
result,
a
reset
election
may
cause
our
common
unitholders
to
experience
a
reduction
in
the
amount
of
cash
distributions
that
our
common
unitholders
would
have
otherwise
received
had
we
not
issued
new
common
units
to
our
general
partner
in
connection
with
resetting
the
target
distribution
levels.

Holders of our common units have limited voting rights and are not entitled to appoint our general partner or its directors, which could reduce the

price at which our common units will trade.

Unlike
the
holders
of
common
stock
in
a
corporation,
unitholders
have
only
limited
voting
rights
on
matters
affecting
our
business
and,
therefore,
limited
ability
to
influence
management’s
decisions
regarding
our
business.
Unitholders
will
have
no
right
on
an
annual
or
ongoing
basis
to
appoint
our
general
partner
or
its
Board
of
Directors.
The
Board
of
Directors
of
our
general
partner,
including
the
independent
directors,
is
chosen
entirely
by
our
sponsor,
as
a
result
of
it
owning
our
general
partner,
and
not
by
our
unitholders.
Unlike
publicly-traded
corporations,
we
will
not
conduct
annual
meetings
of
our
unitholders
to
appoint
directors
or
conduct
other
matters
routinely
conducted
at
annual
meetings
of
stockholders
of
corporations.

Even if holders of our common units are dissatisfied, they cannot initially remove our general partner without its consent.

If
our
unitholders
are
dissatisfied
with
the
performance
of
our
general
partner,
they
will
have
limited
ability
to
remove
our
general
partner.
Unitholders

initially
will
be
unable
to
remove
our
general
partner
without
its
consent
because
our
general
partner
and
its
affiliates
will
own
sufficient
units
to
be
able
to
prevent
its
removal.
The
vote
of
the
holders
of
at
least
66

2
/3
percent
of
all
outstanding
common
units
is
required
to
remove
our
general
partner.
Our
sponsor
currently
owns
an
aggregate
of
60.4
percent
of
our
outstanding
units.

Our general partner's interest or the control of our general partner may be transferred to a third-party without unitholder consent.

Our
general
partner
may
transfer
its
general
partner
interest
to
a
third-party
in
a
merger
or
in
a
sale
of
all
or
substantially
all
of
its
assets
without
the

consent
of
our
unitholders.
Furthermore,
our
partnership
agreement
does
not
restrict
the
ability
of
the
members
of
our
general
partner
to
transfer
their
respective
membership
interests
in
our
general
partner
to
a
third-party.
The
new
members
of
our
general
partner
would
then
be
in
a
position
to
replace
the
Board
of
Directors
and
executive
officers
of
our
general
partner
with
their
own
designees
and
thereby
exert
significant
control
over
the
decisions
taken
by
the
Board
of
Directors
and
executive
officers
of
our
general
partner.
This
effectively
permits
a
“change
of
control”
without
the
vote
or
consent
of
the
unitholders.

The IDRs held by our general partner, or indirectly held by our sponsor, may be transferred to a third-party without unitholder consent.

Our
general
partner
or
our
sponsor
may
transfer
the
IDRs
to
a
third-party
at
any
time
without
the
consent
of
our
unitholders.
If
our
sponsor
transfers
the

IDRs
to
a
third-party
but
retains
its
ownership
interest
in
our
general
partner,
our
general
partner
may
not
have
the
same
incentive
to
grow
our
partnership
and
increase
quarterly
distributions
to
unitholders
over
time
as
it
would
if
our
sponsor
had
retained
ownership
of
the
IDRs.
For
example,
a
transfer
of
IDRs
by
our
sponsor
could
reduce
the
likelihood
of
our
sponsor
accepting
offers
made
by
us
relating
to
assets
owned
by
it,
as
it
would
have
less
of
an
economic
incentive
to
grow
our
business,
which
in
turn
would
impact
our
ability
to
grow
our
asset
base.

Our general partner has a call right that may require unitholders to sell their common units at an undesirable time or price.

If
at
any
time
our
general
partner
and
its
affiliates
own
more
than
80
percent
of
the
common
units,
our
general
partner
will
have
the
right,
but
not
the

obligation,
which
it
may
assign
to
any
of
its
affiliates
or
to
us,
to
acquire
all,
but
not
less
than
all,
of
the
common
units
held
by
unaffiliated
persons
at
a
price
equal
to
the
greater
of
(1)
the
average
of
the
daily
closing
price
of
the
common
units
over
the
20
trading
days
preceding
the
date
three
days
before
notice
of
exercise
of
the
call
right
is
first
mailed
and
(2)
the
highest
per-unit
price
paid
by
our
general
partner
or
any
of
its
affiliates
for
common

Table
of
Contents

units
during
the
90-day
period
preceding
the
date
such
notice
is
first
mailed.
As
a
result,
unitholders
may
be
required
to
sell
their
common
units
at
an
undesirable
time
or
price
and
may
receive
no
return
or
a
negative
return
on
their
investment.
Unitholders
may
also
incur
a
tax
liability
upon
a
sale
of
their
units.
Our
general
partner
is
not
obligated
to
obtain
a
fairness
opinion
regarding
the
value
of
the
common
units
to
be
repurchased
by
it
upon
exercise
of
the
limited
call
right.
There
is
no
restriction
in
our
partnership
agreement
that
prevents
our
general
partner
from
issuing
additional
common
units
and
exercising
its
call
right.
If
our
general
partner
exercised
its
limited
call
right,
the
effect
would
be
to
take
us
private
and,
if
the
units
were
subsequently
deregistered,
we
would
no
longer
be
subject
to
the
reporting
requirements
of
the
Securities
Exchange
Act
of
1934,
or
the
Exchange
Act.

We may issue additional units without unitholder approval, which would dilute existing unitholder ownership interests.

Our
partnership
agreement
does
not
limit
the
number
of
additional
limited
partner
interests
we
may
issue
at
any
time
without
the
approval
of
our

unitholders.
The
issuance
of
additional
common
units
or
other
equity
interests
of
equal
or
senior
rank
will
have
the
following
effects:

•

our
existing
unitholders’
proportionate
ownership
interest
in
us
will
decrease;

the
amount
of
earnings
per
unit
may
decrease;

because
a
lower
percentage
of
total
outstanding
units
will
be
subordinated
units,
the
risk
that
a
shortfall
in
the
payment
of
the
minimum
quarterly
distribution
will
be
borne
by
our
common
unitholders
will
increase;

the
ratio
of
taxable
income
to
distributions
may
increase;

the
relative
voting
strength
of
each
previously
outstanding
unit
may
be
diminished;
and

the
market
price
of
the
common
units
may
decline.

There are no limitations in our partnership agreement on our ability to issue units ranking senior to the common units.

In
accordance
with
Delaware
law
and
the
provisions
of
our
partnership
agreement,
we
may
issue
additional
partnership
interests
that
are
senior
to
the

common
units
in
right
of
distribution,
liquidation
and
voting.
The
issuance
by
us
of
units
of
senior
rank
may
reduce
or
eliminate
the
amounts
available
for
distribution
to
our
common
unitholders,
diminish
the
relative
voting
strength
of
the
total
common
units
outstanding
as
a
class,
or
subordinate
the
claims
of
the
common
unitholders
to
our
assets
in
the
event
of
our
liquidation.

The market price of our common units could be adversely affected by sales of substantial amounts of our common units in the public or private

markets, including sales by our sponsor or other large holders.

Sales
by
our
sponsor
or
other
large
holders
of
a
substantial
number
of
our
common
units
in
the
public
markets,
or
the
perception
that
such
sales
might

occur,
could
have
a
material
adverse
effect
on
the
price
of
our
common
units
or
could
impair
our
ability
to
obtain
capital
through
an
offering
of
equity
securities.
In
addition,
we
have
provided
registration
rights
to
our
sponsor.
Under
our
agreement,
our
general
partner
and
its
affiliates
have
registration
rights
relating
to
the
offer
and
sale
of
any
units
that
they
hold,
subject
to
certain
limitations.

Our partnership agreement restricts the voting rights of unitholders owning 20 percent or more of our common units.

Our
partnership
agreement
restricts
unitholders’
voting
rights
by
providing
that
any
units
held
by
a
person
or
group
that
owns
20
percent
or
more
of
any

class
of
units
then
outstanding,
other
than
our
general
partner
and
its
affiliates,
their
transferees
and
persons
who
acquired
such
units
with
the
prior
approval
of
the
Board
of
Directors
of
our
general
partner,
cannot
vote
on
any
matter.

Cost reimbursements due to our general partner and its affiliates for services provided to us or on our behalf will reduce our earnings and therefore

our ability to distribute cash to our unitholders. The amount and timing of such reimbursements will be determined by our general partner.

Prior
to
making
any
distribution
on
the
common
units,
we
will
reimburse
our
general
partner
and
its
affiliates
for
all
expenses
they
incur
and
payments

they
make
on
our
behalf.
Our
partnership
agreement
does
not
set
a
limit
on
the
amount
of
expenses
for
which
our
general
partner
and
its
affiliates
may
be
reimbursed.
These
expenses
include
salary,
bonus,
incentive
compensation
and
other
amounts
paid
to
persons
who
perform
services
for
us
or
on
our
behalf
and
expenses
allocated
to
our
general
partner
by
its
affiliates.
Our
partnership
agreement
provides
that
our
general
partner
will
determine
in
good
faith
the
expenses
that
are
allocable
to
us.
The
reimbursement
of
expenses
and
payment
of
fees,
if
any,

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to
our
general
partner
and
its
affiliates
will
reduce
our
earnings
and
therefore
our
ability
to
distribute
cash
to
our
unitholders.
See
Note
5
to
our
consolidated
financial
statements
for
details
on
the
Partnership's
distribution
policy.

The amount of estimated replacement capital expenditures our general partner is required to deduct from operating surplus each quarter could

increase in the future, resulting in a decrease in available cash from operating surplus that could be distributed to our unitholders.

Our
partnership
agreement
requires
our
general
partner
to
deduct
from
operating
surplus
each
quarter
estimated
replacement
capital
expenditures
as

opposed
to
actual
replacement
capital
expenditures
in
order
to
reduce
disparities
in
operating
surplus
caused
by
fluctuating
replacement
capital
expenditures,
which
are
capital
expenditures
required
to
replace
our
major
capital
assets.
The
amount
of
annual
estimated
replacement
capital
expenditures
for
purposes
of
calculating
operating
surplus
is
based
upon
our
current
estimates
of
the
reasonable
expenditures
we
will
be
required
to
make
in
the
future
to
replace
our
major
capital
assets,
including
all
or
a
major
portion
of
a
plant
or
other
facility,
at
the
end
of
their
working
lives.
Our
partnership
agreement
does
not
cap
the
amount
of
estimated
replacement
capital
expenditures
that
our
general
partner
may
designate.
The
amount
of
our
estimated
replacement
capital
expenditures
may
be
more
than
our
actual
replacement
capital
expenditures,
which
will
reduce
the
amount
of
available
cash
from
operating
surplus
that
we
would
otherwise
have
available
for
distribution
to
unitholders.
The
amount
of
estimated
replacement
capital
expenditures
deducted
from
operating
surplus
is
subject
to
review
and
change
by
the
Board
of
Directors
of
our
general
partner
at
least
once
a
year,
with
any
change
approved
by
the
conflicts
committee.

The amount of cash we have available for distribution to holders of our units depends primarily on our cash flow and not solely on profitability,

which may prevent us from making cash distributions during periods when we record net income.

The
amount
of
cash
we
have
available
for
distribution
depends
primarily
upon
our
cash
flow,
including
cash
flow
from
reserves
and
working
capital
or

other
borrowings,
and
not
solely
on
profitability,
which
will
be
affected
by
non-cash
items.
As
a
result,
we
may
pay
cash
distributions
during
periods
when
we
record
net
losses
for
financial
accounting
purposes
and
may
not
pay
cash
distributions
during
periods
when
we
record
net
income.

Unitholder liability may not be limited if a court finds that unitholder action constitutes control of our business.

A
general
partner
of
a
partnership
generally
has
unlimited
liability
for
the
obligations
of
the
partnership,
except
for
those
contractual
obligations
of
the
partnership
that
are
expressly
made
without
recourse
to
the
general
partner.
Our
partnership
is
organized
under
Delaware
law,
and
we
conduct
business
in
Ohio,
Illinois,
West
Virginia
and
Louisiana.
The
limitations
on
the
liability
of
holders
of
limited
partner
interests
for
the
obligations
of
a
limited
partnership
have
not
been
clearly
established
in
some
jurisdictions.
You
could
be
liable
for
our
obligations
as
if
you
were
a
general
partner
if
a
court
or
government
agency
were
to
determine
that:

•

we
were
conducting
business
in
a
state
but
had
not
complied
with
that
particular
state’s
partnership
statute;
or

your
right
to
act
with
other
unitholders
to
remove
or
replace
the
general
partner,
to
approve
some
amendments
to
our
partnership
agreement
or
to
take
other
actions
under
our
partnership
agreement
constitute
“control”
of
our
business.

Unitholders may have liability to repay distributions and in certain circumstances may be personally liable for the obligations of the partnership.

Under
certain
circumstances,
unitholders
may
have
to
repay
amounts
wrongfully
returned
or
distributed
to
them.
Under
Section
17-607
of
the
Delaware
Revised
Uniform
Limited
Partnership
Act,
or
the
Delaware
Act,
we
may
not
make
a
distribution
to
our
unitholders
if
the
distribution
would
cause
our
liabilities
to
exceed
the
fair
value
of
our
assets.
Delaware
law
provides
that
for
a
period
of
three
years
from
the
date
of
the
impermissible
distribution,
limited
partners
who
received
the
distribution
and
who
knew
at
the
time
of
the
distribution
that
it
violated
Delaware
law
will
be
liable
to
the
limited
partnership
for
the
distribution
amount.
Liabilities
to
partners
on
account
of
their
partnership
interests
and
liabilities
that
are
non-recourse
to
the
partnership
are
not
counted
for
purposes
of
determining
whether
a
distribution
is
permitted.

If we fail to maintain effective internal control over financial reporting, our ability to accurately report our financial results could be adversely

affected.

We
are
required
to
comply
with
the
SEC’s
rules
implementing
Sections
302
and
404
of
the
Sarbanes
Oxley
Act
of
2002,
which
require
our
management
to
certify
financial
and
other
information
in
our
quarterly
and
annual
reports
and
provide
an
annual
management
report
on
the
effectiveness
of
our
internal
control
over
financial
reporting.
To
comply
with
the
requirements
of
being
a
publicly-traded
partnership,
we
will
need
to
implement
additional
internal
controls,
reporting

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of
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systems
and
procedures
and
hire
additional
accounting,
finance
and
legal
staff.
Accordingly,
we
may
not
be
required
to
have
our
independent
registered
public
accounting
firm
attest
to
the
effectiveness
of
our
internal
controls
until
our
annual
report
for
the
fiscal
year
ending
December
31,
2017.
Once
it
is
required
to
do
so,
our
independent
registered
public
accounting
firm
may
issue
a
report
that
is
adverse
in
the
event
it
is
not
satisfied
with
the
level
at
which
our
controls
are
documented,
designed,
operated
or
reviewed.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud. As a

result, current and potential unitholders could lose confidence in our financial reporting, which would harm our business and the trading price of our units.

Effective
internal
controls
are
necessary
for
us
to
provide
reliable
financial
reports,
prevent
fraud
and
operate
successfully
as
a
public
company.
If
we

cannot
provide
reliable
financial
reports
or
prevent
fraud,
our
reputation
and
operating
results
would
be
harmed.
We
cannot
be
certain
that
our
efforts
to
maintain
our
internal
controls
will
be
successful,
that
we
will
be
able
to
maintain
adequate
controls
over
our
financial
processes
and
reporting
in
the
future
or
that
we
will
be
able
to
comply
with
our
obligations
under
Section
404
of
the
Sarbanes
Oxley
Act
of
2002.
Any
failure
to
develop
or
maintain
effective
internal
controls,
or
difficulties
encountered
in
implementing
or
improving
our
internal
controls,
could
harm
our
operating
results
or
cause
us
to
fail
to
meet
our
reporting
obligations.
Ineffective
internal
controls
could
also
cause
investors
to
lose
confidence
in
our
reported
financial
information,
which
would
likely
have
a
negative
effect
on
the
trading
price
of
our
units.

The New York Stock Exchange, or NYSE, does not require a publicly-traded partnership like us to comply with certain of its corporate governance

requirements.

Because
we
are
a
publicly-traded
partnership,
the
NYSE
will
not
require
that
we
have
a
majority
of
independent
directors
on
our
general
partner’s
Board

of
Directors
or
compensation
and
nominating
and
corporate
governance
committees.
Accordingly,
unitholders
will
not
have
the
same
protections
afforded
to
certain
corporations
that
are
subject
to
all
of
the
NYSE
corporate
governance
requirements.

Tax Risks to Common Unitholders

Our tax treatment depends on our status as a partnership for federal income tax purposes, as well as our not being subject to a material amount of

entity-level taxation by individual states. The IRS has issued final regulations which would result in our being treated as a corporation for federal income tax
purposes and subject to entity-level taxation beginning January 1, 2028. In addition, the IRS may challenge our status as a partnership for federal income tax
purposes from the time of our initial public offering. If the IRS were to treat us as a corporation for federal income tax purposes or we were to become subject
to material additional amounts of entity-level taxation for state tax purposes, then our ability to distribute cash to you could be substantially reduced.

The
anticipated
after-tax
economic
benefit
of
an
investment
in
our
common
units
depends
largely
on
our
being
treated
as
a
partnership
for
federal
income

tax
purposes.
Despite
the
fact
that
we
are
organized
as
a
limited
partnership
under
Delaware
law,
a
partnership
such
as
ours
would
be
treated
as
a
corporation
for
federal
income
tax
purposes
unless
more
than
90
percent
of
our
income
is
from
certain
specified
sources
(the
"Qualifying
Income
Exception")
under
Section
7704
of
the
Internal
Revenue
Code
of
1986,
as
amended
(the
“Code”).

On
January
19,
2017,
the
IRS
and
the
US
Department
of
Treasury
issued
qualifying
income
regulations
(the
“Final
Regulations”)
regarding
the
Qualifying
Income
Exception.

The
Final
Regulations
were
published
in
the
Federal
Register
on
January
24,
2017,
and
apply
to
taxable
years
beginning
on
or
after
January
19,
2017.

Under
the
Final
Regulations,
our
cokemaking
operations
have
been
excluded
from
the
definition
of
qualifying
income
activities,
subject
to
a
ten-year
transition
period.

As
a
result,
the
following
consequences
might
ensue:

If
our
income
from
cokemaking
operations
“was
qualified
income
under
the
statute
as
reasonably
interpreted
prior
to
May
6,
2015,”
then
we
will
have
a
transition
period
ending
on
December
31,
2027,
during
which
we
can
treat
income
from
our
existing
cokemaking
activities
as
qualifying
income.
Our
transitional
status
during
this
period
is
likely
to
impair
our
growth
prospects,
and
we
do
not
expect
to
acquire
additional
cokemaking
operations
without
receipt
of
an
IRS
private
letter
ruling
confirming
the
availability
of
the
transition
period
as
applied
to
the
income
from
such
an
acquisition.

The
IRS
might
challenge
our
treatment
of
income
from
our
cokemaking
operations
as
qualifying
income
by
asserting
that
such
treatment
did
not
rely

upon
a
reasonable
interpretation
of
the
statute
prior
to
May
6,
2015.
If
so,
nothing
would
preclude
the
IRS
from
challenging
our
status
as
a
partnership
for
federal
income
tax
purposes
from
the
time
of
our
initial
public
offering.

If
this
challenge
were
to
occur
and
prevail,
(i)
we
would
be
taxed
retroactively
as
if
we
were
a
corporation
at
federal
and
state
tax
rates,
likely
resulting
in
a
material
amount
of
taxable
income
and
taxes
in
certain
open
years,
(ii)
historical
and
future
distributions
would
generally
be
taxed
again
as
corporate
distributions
and
(iii)
no
income,

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gains,
losses,
deductions
or
credits
recognized
by
us
would
flow
to
our
unitholders.
This
would
result
in
a
material
reduction
in
our
cash
flow
and
after-tax
return
to
our
unitholders
and
the
recording
of
an
income
tax
provision
and
a
reduction
in
net
income.

If,
notwithstanding
our
confidence
regarding
our
eligibility
to
use
the
transition
period
based
on
our
belief
and
a
legal
opinion
from
outside
counsel,
the

IRS
were
to
challenge
our
eligibility
to
qualify
for
the
transition
period
or
our
position
that
we
have
satisfied
the
Qualifying
Income
Exception
from
the
time
of
our
IPO,
we
would
vigorously
disagree
with
such
a
challenge,
although
we
can
provide
no
assurance
of
our
likelihood
of,
or
costs
associated
with,
prevailing.
Please
read
"Item
1
Business
-
IRS
Final
Regulation
on
Qualifying
income."

If
we
were
treated
as
a
corporation
for
federal
income
tax
purposes,
we
would
pay
federal
income
tax
on
our
taxable
income
at
the
corporate
tax
rate,
and

would
likely
pay
state
income
tax
at
varying
rates.
Distributions
to
you
would
generally
be
taxed
again
as
corporate
distributions,
and
no
income,
gains,
losses,
deductions
or
credits
recognized
by
us
would
flow
through
to
you.
Because
a
tax
would
be
imposed
upon
us
as
a
corporation,
our
after
tax
earnings
and
therefore
our
ability
to
distribute
cash
to
you
would
be
substantially
reduced.
Therefore,
treatment
of
us
as
a
corporation
would
result
in
a
material
reduction
in
the
anticipated
cash
flow
and
after-tax
return
to
the
unitholders,
likely
causing
a
substantial
reduction
in
the
value
of
our
common
units.

Our
partnership
agreement
provides
that
if
a
law
is
enacted
or
existing
law
is
modified
or
interpreted
in
a
manner
that
subjects
us
to
taxation
as
a

corporation
or
otherwise
subjects
us
to
entity-level
taxation
for
federal,
state
or
local
income
tax
purposes,
the
minimum
quarterly
distribution
amount
and
the
target
distribution
amounts
may
be
adjusted
to
reflect
the
impact
of
that
law
on
us.

The tax treatment of publicly traded partnerships or an investment in our units could be subject to potential legislative, judicial or administrative

changes and differing interpretations, possibly on a retroactive basis.

The
present
U.S.
federal
income
tax
treatment
of
publicly
traded
partnerships,
including
us,
or
an
investment
in
our
common
units
may
be
modified
by

administrative,
legislative
or
judicial
changes
or
differing
interpretations
at
any
time.
From
time
to
time,
members
of
Congress
have
proposed
and
considered
such
substantive
changes
to
the
existing
federal
income
tax
laws
that
would
affect
publicly
traded
partnerships.
Although
there
is
no
current
legislative
proposal,
a
prior
legislative
proposal
would
have
eliminated
the
qualifying
income
exception
to
the
treatment
of
all
publicly
traded
partnerships
as
corporations
upon
which
we
rely
for
our
treatment
as
a
partnership
for
U.S.
federal
income
tax
purposes.

In
addition,
as
discussed
above,
on
January
24,
2017,
Final
Regulations
were
published
in
the
Federal
Register
and
apply
to
taxable
years
beginning
on
or

after
January
19,
2017.
The
Final
Regulations
will
likely
affect
our
ability
to
continue
to
qualify
as
a
publicly
traded
partnership.

Any
modification
to
the
U.S.
federal
income
tax
laws
may
be
applied
retroactively
and
could
make
it
more
difficult
or
impossible
for
us
to
meet
the

exception
for
certain
publicly
traded
partnerships
to
be
treated
as
partnerships
for
U.S.
federal
income
tax
purposes.
We
are
unable
to
predict
whether
any
of
these
changes
or
other
proposals
will
ultimately
be
enacted.
Any
such
changes
could
negatively
impact
the
value
of
an
investment
in
our
common
units.

Unitholders may be subject to limitation on their ability to deduct interest expense incurred by us.

In
general,
we
are
entitled
to
a
deduction
for
interest
paid
or
accrued
on
indebtedness
properly
allocable
to
our
trade
or
business
during
our
taxable
year.

However,
under
the
Tax
Reform
Legislation,
for
taxable
years
beginning
after
December
31,
2017,
our
deduction
for
"business
interest"
is
limited
to
the
sum
of
our
business
interest
income
and
30%
of
our
"adjusted
taxable
income."

For
purposes
of
this
limitation,
our
adjusted
taxable
income
is
computed
without
regard
to
any
business
interest
expense
or
business
interest
income,
and
in
the
case
of
taxable
years
beginning
before
January
1,
2022,
any
deduction
allowable
for
depreciation,
amortization,
or
depletion.

You will be required to pay taxes on your share of our income even if you do not receive any cash distributions from us.

Because
our
unitholders
will
be
treated
as
partners
to
whom
we
will
allocate
taxable
income
that
could
be
different
in
amount
than
the
cash
we
distribute,

you
will
be
required
to
pay
federal
income
taxes
and,
in
some
cases,
state
and
local
income
taxes
on
your
share
of
our
taxable
income
whether
or
not
you
receive
cash
distributions
from
us.
You
may
not
receive
cash
distributions
from
us
equal
to
your
share
of
our
taxable
income
or
even
equal
to
the
actual
tax
liability
that
result
from
that
income.

Tax gain or loss on the disposition of our common units could be more or less than expected.

If
you
sell
your
common
units,
you
will
recognize
a
gain
or
loss
equal
to
the
difference
between
the
amount
realized
and
your
tax
basis
in
those
common

units.
Because
distributions
in
excess
of
your
allocable
share
of
our
net

Table
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Contents

taxable
income
result
in
a
decrease
in
your
tax
basis
in
your
common
units,
the
amount,
if
any,
of
such
prior
excess
distributions
with
respect
to
the
units
you
sell
will,
in
effect,
become
taxable
income
to
you
if
you
sell
such
units
at
a
price
greater
than
your
tax
basis
in
those
units,
even
if
the
price
you
receive
is
less
than
your
original
cost.
In
addition,
because
the
amount
realized
includes
a
unitholder’s
share
of
our
liabilities,
if
you
sell
your
units,
you
may
incur
a
tax
liability
in
excess
of
the
amount
of
cash
you
receive
from
the
sale.

A
substantial
portion
of
the
amount
realized
from
your
sale
of
our
units,
whether
or
not
representing
gain,
may
be
taxed
as
ordinary
income
to
you
due
to

potential
recapture
items,
including
depreciation
recapture.

Thus,
you
may
recognize
both
ordinary
income
and
capital
loss
from
the
sale
of
units
if
the
amount
realized
on
a
sale
of
such
units
is
less
than
your
adjusted
basis
in
the
units.

Net
capital
loss
may
only
offset
capital
gains,
subject
to
applicable
IRS
limitations.

In
the
taxable
period
in
which
you
sell
your
units,
you
may
recognize
ordinary
income
from
our
allocations
of
income
and
gain
to
you
prior
to
the
sale
and
from
recapture
items
that
generally
cannot
be
offset
by
any
capital
loss
recognized
upon
the
sale
of
units.

Tax-exempt entities face unique tax issues from owning our common units that may result in adverse tax consequences to them.

Investment
in
our
common
units
by
tax-exempt
entities,
such
as
employee
benefit
plans
and
individual
retirement
accounts
(known
as
IRAs)
raises
issues

unique
to
them.
For
example,
virtually
all
of
our
income
allocated
to
organizations
that
are
exempt
from
U.S.
federal
income
tax,
including
IRAs
and
other
retirement
plans,
will
be
unrelated
business
taxable
income
and
will
be
taxable
to
them.
Further,
with
respect
to
taxable
years
beginning
after
December
31,
2017,
a
tax-exempt
entity
with
more
than
one
unrelated
trade
or
business
(including
by
attribution
from
investment
in
a
partnership
such
as
ours
that
is
engaged
in
one
or
more
unrelated
trade
or
business)
is
required
to
compute
the
unrelated
business
taxable
income
of
such
tax-exempt
entity
separately
with
respect
to
each
such
trade
or
business
(including
for
purposes
of
determining
any
net
operating
loss
deduction).
As
a
result,
for
years
beginning
after
December
31,
2017,
it
may
not
be
possible
for
tax-exempt
entities
to
utilize
losses
from
an
investment
in
our
partnership
to
offset
unrelated
business
taxable
income
from
another
unrelated
trade
or
business
and
vice
versa.
Tax-exempt
entities
should
consult
a
tax
advisor
before
investing
in
our
common
units.

Non-U.S. Unitholders will be subject to U.S. taxes and withholding with respect to their income and gain from owning our units.

Non-U.S.
unitholders
are
generally
taxed
and
subject
to
income
tax
filing
requirements
by
the
United
States
on
income
effectively
connected
with
a
U.S.
trade
or
business
(“effectively
connected
income”).
Income
allocated
to
our
unitholders
and
any
gain
from
the
sale
of
our
units
will
generally
be
considered
to
be
“effectively
connected”
with
a
U.S.
trade
or
business.

As
a
result,
distributions
to
a
Non-U.S.
unitholder
will
be
subject
to
withholding
at
the
highest
applicable
effective
tax
rate
and
a
Non-U.S.
unitholder
who
sells
or
otherwise
disposes
of
a
unit
will
also
be
subject
to
U.S.
federal
income
tax
on
the
gain
realized
from
the
sale
or
disposition
of
that
unit.

The
Tax
Cuts
and
Jobs
Act
(“Tax
Legislation”)
imposes
a
withholding
obligation
of
10
percent
of
the
amount
realized
upon
a
Non-U.S.
unitholder’s
sale

or
exchange
of
an
interest
in
a
partnership
that
is
engaged
in
a
U.S.
trade
or
business.
However,
due
to
challenges
of
administering
a
withholding
obligation
applicable
to
open
market
trading
and
other
complications,
the
IRS
has
temporarily
suspended
the
application
of
this
withholding
rule
to
open
market
transfers
of
interest
in
publicly
traded
partnerships
pending
promulgation
of
regulations
or
other
guidance
that
resolves
the
challenges.

It
is
not
clear
if
or
when
such
regulations
or
other
guidance
will
be
issued.

Non-U.S.
unitholders
should
consult
a
tax
advisor
before
investing
in
our
common
units

If the IRS contests the federal income tax positions we take, the market for our common units may be adversely impacted and the cost of any IRS

contest will reduce our earnings and therefore our ability to distribute cash to you.

We
have
not
requested
a
ruling
from
the
IRS
with
respect
to
our
treatment
as
a
partnership
for
U.S.
federal
income
tax
purposes.
The
IRS
may
adopt

positions
that
differ
from
the
positions
we
take.
It
may
be
necessary
to
resort
to
administrative
or
court
proceedings
to
sustain
some
or
all
of
the
positions
we
take.
A
court
may
not
agree
with
some
or
all
of
the
positions
we
take.
Any
contest
by
the
IRS
may
materially
and
adversely
impact
the
market
for
our
common
units
and
the
price
at
which
they
trade.
Our
costs
of
any
contest
by
the
IRS
will
be
borne
indirectly
by
our
unitholders
and
our
general
partner
because
the
costs
will
reduce
our
earnings
and
therefore
our
ability
to
distribute
cash.

If the IRS makes audit adjustments to our income tax returns for tax years beginning after December 31, 2017, it (and some states) may assess and
collect any taxes (including any applicable penalties and interest) resulting from such audit adjustment directly from us, in which case our cash available for
distribution to our unitholders might be substantially reduced and our current and former unitholders may be required to indemnify us for any taxes
(including any applicable penalties and interest) resulting from such audit adjustments that were paid on such unitholders’ behalf.

Table
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Contents

Pursuant
to
the
Bipartisan
Budget
Act
of
2015,
for
tax
years
beginning
after
December
31,
2017,
if
the
IRS
makes
audit
adjustments
to
our
income
tax
returns,
it
(and
some
states)
may
assess
and
collect
any
taxes
(including
any
applicable
penalties
and
interest)
resulting
from
such
audit
adjustment
directly
from
us.
To
the
extent
possible
under
the
new
rules,
our
general
partner
may
elect
to
either
pay
the
taxes
(including
any
applicable
penalties
and
interest)
directly
to
the
IRS
or,
if
we
are
eligible,
issue
a
revised
information
statement
to
each
unitholder
with
respect
to
an
audited
and
adjusted
return.
Although
our
general
partner
may
elect
to
have
our
unitholders
take
such
audit
adjustment
into
account
in
accordance
with
their
interests
in
us
during
the
tax
year
under
audit,
there
can
be
no
assurance
that
such
election
will
be
practical,
permissible
or
effective
in
all
circumstances.
As
a
result,
our
current
unitholders
may
bear
some
or
all
of
the
tax
liability
resulting
from
such
audit
adjustment,
even
if
such
unitholders
did
not
own
units
in
us
during
the
tax
year
under
audit.
If,
as
a
result
of
any
such
audit
adjustment,
we
are
required
to
make
payments
of
taxes,
penalties
and
interest,
our
cash
available
for
distribution
to
our
unitholders
might
be
substantially
reduced
and
our
current
and
former
unitholders
may
be
required
to
indemnify
us
for
any
taxes
(including
any
applicable
penalties
and
interest)
resulting
from
such
audit
adjustments
that
were
paid
on
such
unitholders
behalf.
These
rules
are
not
applicable
for
tax
years
beginning
on
or
prior
to
December
31,
2017.

We will treat each purchaser of our common units as having the same tax benefits without regard to the actual common units purchased. The IRS

may challenge this treatment, which could adversely affect the value of the common units.

Because
we
cannot
match
transferors
and
transferees
of
common
units,
we
will
adopt
depreciation
and
amortization
positions
that
may
not
conform
to
all

aspects
of
existing
Treasury
Regulations.
A
successful
IRS
challenge
to
those
positions
could
adversely
affect
the
amount
of
tax
benefits
available
to
you.
It
also
could
affect
the
timing
of
these
tax
benefits
or
the
amount
of
gain
from
your
sale
of
common
units
and
could
have
a
negative
impact
on
the
value
of
our
common
units
or
result
in
audit
adjustments
to
your
tax
returns.

We will prorate our items of income, gain, loss and deduction between transferors and transferees of our units based upon the ownership of our units

on the first day of each month, instead of on the basis of the date a particular unit is transferred. The IRS may challenge this treatment, which could change
the allocation of items of income, gain, loss and deduction among our unitholders.

We
generally
prorate
our
items
of
income,
gain,
loss
and
deduction
between
transferors
and
transferees
of
our
common
units
based
upon
the
ownership
of

our
common
units
on
the
first
day
of
each
month
(the
“Allocation
Date”),
instead
of
on
the
basis
of
the
date
a
particular
common
unit
is
transferred.
Similarly,
we
generally
allocate
certain
deductions
for
depreciation
of
capital
additions,
gain
or
loss
realized
on
a
sale
or
other
disposition
of
our
assets
and,
in
the
discretion
of
the
general
partner,
any
other
extraordinary
item
of
income,
gain,
loss
or
deduction
based
upon
ownership
on
the
Allocation
Date.
Treasury
Regulations
allow
a
similar
monthly
simplifying
convention,
but
such
regulations
do
not
specifically
authorize
all
aspects
of
our
proration
method.
If
the
IRS
were
to
challenge
our
proration
method,
we
may
be
required
to
change
the
allocation
of
items
of
income,
gain,
loss
and
deduction
among
unitholders.

A unitholder whose common units are the subject of a securities loan (e.g., a loan to a “short seller” to cover a short sale of common units) may be
considered as having disposed of those common units. If so, he would no longer be treated for tax purposes as a partner with respect to those common units
during the period of the loan and may recognize gain or loss from the disposition.

Because
there
is
no
tax
concept
of
loaning
a
partnership
interest,
a
unitholder
whose
common
units
are
the
subject
of
a
securities
loan
may
be
considered
as
having
disposed
of
the
loaned
units.
In
that
case,
he
may
no
longer
be
treated
for
tax
purposes
as
a
partner
with
respect
to
those
common
units
during
the
period
of
the
loan
to
the
short
seller
and
the
unitholder
may
recognize
gain
or
loss
from
such
disposition.
Moreover,
during
the
period
of
the
loan,
any
of
our
income,
gain,
loss
or
deduction
with
respect
to
those
common
units
may
not
be
reportable
by
the
unitholder
and
any
cash
distributions
received
by
the
unitholder
as
to
those
common
units
could
be
fully
taxable
as
ordinary
income.
Unitholders
desiring
to
assure
their
status
as
partners
and
avoid
the
risk
of
gain
recognition
from
a
loan
to
a
short
seller
should
modify
any
applicable
brokerage
account
agreements
to
prohibit
their
brokers
from
borrowing
their
common
units.

We have adopted certain valuation methodologies in determining a unitholder's allocations of income, gain, loss and deduction. The IRS may

challenge these methodologies or the resulting allocations, and such a challenge could adversely affect the value of our common units.

In
determining
the
items
of
income,
gain,
loss
and
deduction
allocable
to
our
unitholders,
we
must
routinely
determine
the
fair
market
value
of
our
assets.

Although
we
may
from
time
to
time
consult
with
professional
appraisers
regarding
valuation
matters,
we
make
many
fair
market
value
estimates
using
a
methodology
based
on
the
market
value
of
our
common
units
as
a
means
to
measure
the
fair
market
value
of
our
assets.
The
IRS
may
challenge
these
valuation
methods
and
the
resulting
allocations
of
income,
gain,
loss
and
deduction.

Table
of
Contents

A
successful
IRS
challenge
to
these
methods
or
allocations
could
adversely
affect
the
timing
or
amount
of
taxable
income
or
loss
being
allocated
to
our

unitholders.
It
also
could
affect
the
amount
of
gain
from
our
unitholders'
sale
of
common
units
and
could
have
a
negative
impact
on
the
value
of
the
common
units
or
result
in
audit
adjustments
to
our
unitholders'
tax
returns
without
the
benefit
of
additional
deductions.

Unitholders will likely be subject to state and local taxes and return filing requirements in states where you do not live as a result of investing in our

common units.

In
addition
to
federal
income
taxes,
you
will
likely
be
subject
to
other
taxes
in
the
states
in
which
we
own
assets
and
conduct
business,
including
state
and

local
taxes,
unincorporated
business
taxes
and
estate,
inheritance
or
intangible
taxes
that
are
imposed
by
the
various
jurisdictions
in
which
we
conduct
business
or
own
property
now
or
in
the
future,
even
if
you
do
not
live
in
any
of
those
jurisdictions.
Further,
you
may
be
subject
to
penalties
for
failure
to
comply
with
those
requirements.
We
currently
own
assets
and
conduct
business
in
in
Louisiana,
Ohio,
Illinois,
Indiana,
Virginia,
and
West
Virginia.
As
we
make
acquisitions
or
expand
our
business,
we
may
own
assets
or
conduct
business
in
additional
states
or
foreign
jurisdictions
that
impose
a
personal
income
tax.
It
is
your
responsibility
to
file
all
U.S.
federal,
foreign,
state
and
local
tax
returns.

Table
of
Contents

Item 1B.

Unresolved Staff Comments

None.

Item 2.

Properties

We
own
the
following
real
property:

•

Approximately
400
acres
in
Franklin
Furnace
(Scioto
County),
Ohio,
at
and
around
the
area
where
the
Haverhill
cokemaking
facility
(both
first
and
second
phases)
is
located.

Approximately
250
acres
in
Middletown
(Butler
County),
Ohio
near
AK
Steel’s
Middletown
Works
facility,
on
which
the
Middletown
cokemaking
facility
is
located.

Approximately
41
acres
in
Granite
City
(Madison
County),
Illinois,
adjacent
to
the
U.S.
Steel
Granite
City
Works
facility,
on
which
the
Granite
City
cokemaking
facility
is
located.
Upon
the
earlier
of
ceasing
production
at
the
facility
or
the
end
of
2044,
U.S.
Steel
has
the
right
to
repurchase
the
property,
including
the
facility,
at
the
fair
market
value
of
the
land.
Alternatively,
U.S.
Steel
may
require
us
to
demolish
and
remove
the
facility
and
remediate
the
site
to
original
condition
upon
exercise
of
its
option
to
repurchase
the
land.

Approximately
180
acres
in
Ceredo
(Wayne
County),
West
Virginia
on
which
KRT
has
two
terminals
for
its
mixing
and/or
handling
services
along
the
Ohio
and
Big
Sandy
Rivers.

Approximately
174
acres
in
Convent
(St.
James
Parish),
Louisiana,
on
which
CMT
is
located.

We
lease
the
following
real
property:

•

Approximately
45
acres
of
land
located
in
East
Chicago
(Lake
County),
Indiana,
through
a
sublease
from
SunCoke
to
Lake
Terminal
for
the
coal
handling
and
mixing
facilities
that
service
SunCoke's
Indiana
Harbor
cokemaking
facility.
The
leased
property
is
inside
ArcelorMittal’s
Indiana
Harbor
Works
facility
and
is
part
of
an
enterprise
zone.

Approximately
25
acres
in
Belle
(Kanawha
County),
West
Virginia
on
which
KRT
has
a
terminal
for
its
mixing
and/or
handling
services
along
the
Kanawha
River.

Item 3.

Legal Proceedings

The
information
presented
in
Note
12
to
our
consolidated
financial
statements
within
this
Annual
Report
on
Form
10-K
is
incorporated
herein
by

reference.

Many
legal
and
administrative
proceedings
are
pending
or
may
be
brought
against
us
arising
out
of
our
current
and
past
operations,
including
matters
related
to
commercial
and
tax
disputes,
product
liability,
employment
claims,
personal
injury
claims,
premises-liability
claims,
allegations
of
exposures
to
toxic
substances
and
general
environmental
claims.
Although
the
ultimate
outcome
of
these
proceedings
cannot
be
ascertained
at
this
time,
it
is
reasonably
possible
that
some
of
them
could
be
resolved
unfavorably
to
us.
Our
management
believes
that
any
liabilities
that
may
arise
from
such
matters
would
not
be
material
in
relation
to
our
business
or
our
consolidated
financial
position,
results
of
operations
or
cash
flows
at
December
31,
2018
.

Item 4.

Mine Safety Disclosures

Certain
logistics
assets
are
subject
to
Mine
Safety
and
Health
Administration
regulatory
purview.
The
information
concerning
mine
safety
violations
and

other
regulatory
matters
that
we
are
required
to
report
in
accordance
with
Section
1503(a)
of
the
Dodd-Frank
Wall
Street
Reform
and
Consumer
Protection
Act
and
Item
104
of
Regulation
S-K
(17
CFR
229.014)
is
included
in
Exhibit
95.1
to
this
Annual
Report
on
Form
10-K.

Table
of
Contents

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities

Market for the Partnership’s Common Equity

The
Partnership's
common
units,
representing
limited
partnership
interests,
have
been
trading
under
the
trading
symbol
“SXCP”
on
the
New
York
Stock

Exchange
since
January
18,
2013.
At
the
close
of
business
on
February
8,
2019
,
there
were
four
holders
of
record
of
the
Partnership’s
common
units,
including
Sun
Coal
&
Coke
LLC,
which
owns
100
percent
of
our
general
partner
and
holds
28,499,899
of
our
common
units.
The
number
of
record
holders
does
not
include
holders
of
shares
in
“street
name”
or
persons,
partnerships,
associations,
corporations
or
other
entities
identified
in
security
position
listings
maintained
by
depositories.

Market Repurchase Program

On
July
20,
2015,
the
Partnership's
Board
of
Directors
authorized
a
program
for
the
Partnership
to
repurchase
up
to
$50.0
million
of
its
common
units.
There
were
no
unit
repurchases
during
2018
by
the
Partnership.
At
December
31,
2018
,
there
was
$37.2
million
available
under
the
authorized
unit
repurchase
program.

Table
of
Contents

Item 6.

Selected Financial Data

The
following
table
presents
summary
consolidated
operating
results
and
other
information
of
the
Partnership
and
should
be
read
in
conjunction
with

"Item
7.
Management’s
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations"
and
our
consolidated
financial
statements
and
accompanying
notes
included
elsewhere
in
this
Annual
Report
on
Form
10-K.

Our
consolidated
financial
statements
include
amounts
allocated
from
SunCoke
for
corporate
and
other
costs
attributable
to
our
operations.
These
allocated
costs
are
for
services
provided
to
us
by
SunCoke.
SunCoke
centrally
provides
engineering,
operations,
procurement
and
information
technology
support
to
its
and
our
facilities.
In
addition,
allocated
costs
include
legal,
accounting,
tax,
treasury,
insurance,
employee
benefit
costs,
communications
and
human
resources.
All
corporate
costs
that
were
specifically
identifiable
to
a
particular
operating
facility
of
SunCoke
or
the
Partnership
have
been
allocated
to
that
facility.
Where
specific
identification
of
charges
to
a
particular
operating
facility
was
not
practicable,
a
reasonable
method
of
allocation
was
applied
to
all
remaining
corporate
and
other
costs.
The
allocation
methodology
for
all
remaining
corporate
and
other
costs
is
based
on
management’s
estimate
of
the
proportional
level
of
effort
devoted
by
corporate
resources
that
is
attributable
to
each
of
SunCoke’s
and
the
Partnership's
operating
facilities.

The
consolidated
financial
statements
do
not
necessarily
reflect
what
our
financial
position
and
results
of
operations
would
have
been
if
we
had
operated

as
an
independent,
publicly-traded
partnership
during
the
periods
shown.
In
addition,
the
consolidated
financial
statements
are
not
necessarily
indicative
of
our
future
results
of
operations
or
financial
condition.

Operating Results:

Total
revenues

Operating
income
Net
income
(loss)
(2)

Net
income
(loss)
attributable
to
SunCoke
Energy
Partners,
L.P.

Net
income
(loss)
per
common
unit
(basic
and
diluted)
Net
income
per
subordinated
unit
(basic
and
diluted)
(3)

Distributions
declared
per
unit

Balance Sheet Data (at period end):

Total
assets

Long-term
debt
and
financing
obligation

Years Ended December 31,

2018 (1)

2017 (1)

2016 (1)

2015 (1)

2014

(Dollars in millions, except per unit amounts)

892.1
$

117.2
$

59.4
$

57.5

1.22
$

—
$

845.6
$

142.8
$

(17.5)
$

(18.1)
$

(0.54)
$

—
$

779.7
$

146.1
$

121.4
$

119.1
$

2.07
$

—
$

838.5
$

137.2
$

92.2
$

85.4
$

1.92
$

1.71
$

873.0

135.1

87.5

56.0

1.58

1.43

1.6000
$

2.3760
$

2.2888
$

2.0175

1,619.1
$

1,641.4
$

1,696.0
$

1,768.9
$

1,417.0

793.3
$

818.4
$

805.7
$

894.5
$

399.0

(1) The
results
of
CMT
have
been
included
in
the
consolidated
financial
statements
since
it
was
acquired
on
August
12,
2015.
CMT
added
the
following:

Combined
assets

Revenues

Operating
income

Years Ended December 31,

2018

2017

2016

2015

370.9
$

81.3
$

40.2
$

(Dollars in millions)
394.6
$

71.1
$

42.3
$

411.7
$

62.7
$

46.5
$

426.1

28.6

18.4

(2)

In
2017,
as
a
result
of
the
Final
Regulations
on
qualifying
income
and
the
new
Tax
Legislation,
the
Partnership
recorded
deferred
income
tax
expense,
net
of
$79.8
million.
See
Note
6
to
our
consolidated
financial
statements.

(3) Upon
payment
of
the
cash
distribution
for
the
fourth
quarter
of
2015,
the
financial
requirements
for
the
conversion
of
all
subordinated
units
were
satisfied.
As
a
result,
the
15,709,697
subordinated
units
converted
into
common
units
on
a
one-for-one
basis.
For
purpose
of
calculating
net
income
per
unit,
the
conversion
of
the
subordinated
units
is
deemed
to
have
occurred
on
January
1,
2016.

Table
of
Contents

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

This
Annual
Report
on
Form
10-K
contains
certain
forward-looking
statements
of
expected
future
developments,
as
defined
by
the
Private
Securities

Litigation
Reform
Act
of
1995.
This
discussion
contains
forward-looking
statements
about
our
business,
operations
and
industry
that
involve
risks
and
uncertainties,
such
as
statements
regarding
our
plans,
objectives,
expectations
and
intentions.
Our
future
results
and
financial
condition
may
differ
materially
from
those
we
currently
anticipate
as
a
result
of
the
factors
we
describe
under
“Cautionary
Statement
Concerning
Forward-Looking
Statements”
and
“Risk
Factors.”

This
Management’s
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations
("MD&A")
is
based
on
financial
data
derived
from
the

financial
statements
prepared
in
accordance
with
United
States
("U.S.")
generally
accepted
accounting
principles
(“GAAP”)
and
certain
other
financial
data
that
is
prepared
using
non-GAAP
measures.
For
a
reconciliation
of
these
non-GAAP
measures
to
the
most
comparable
GAAP
components,
see
“Non-GAAP
Financial
Measures”
at
the
end
of
this
Item
and
Note
15
to
our
consolidated
financial
statements.

Our
MD&A
is
provided
in
addition
to
the
accompanying
consolidated
financial
statements
and
notes
to
assist
readers
in
understanding
our
results
of

operations,
financial
condition,
and
cash
flows.
Our
results
of
operations
include
reference
to
our
business
operations
and
market
conditions,
which
are
further
described
in
Part
I
of
this
document.

2018 Overview

Our
consolidated
results
of
operations
were
as
follows:

Net
income
attributable
to
SunCoke
Energy
Partners,
L.P.

Net
cash
provided
by
operating
activities

Adjusted
EBITDA
attributable
to
SunCoke
Energy
Partners,
L.P.

Year Ended December
31,

2018

(Dollars in millions)
57.5

162.8

209.4

During
2018
,
the
Partnership
successfully
delivered
against
the
majority
of
our
key
objectives:

•

Financial objectives. Net
income
attributable
to
SunCoke
Energy
Partners,
L.P.
in
2018
was
$57.5
million
.
We
delivered
Adjusted
EBITDA
attributable
to
SunCoke
Energy
Partners,
L.P.
of
$209.4
million
,
slightly
below
our
guidance
range
of
$210
million
to
$215
million
,
and
generated
$162.8
million
of
operating
cash
flow,
above
our
revised
guidance
of
between
$140
million
and
$150
million
.
Domestic
Coke
contributed
Adjusted
EBITDA
of
$157.5
million
,
and
Logistics
delivered
Adjusted
EBITDA
of
$71.6
million
,
reflecting
the
highest
annual
volumes
in
CMT’s
history.

Achieved de-leveraging goals. We
achieved
our
objective
to
pay
down
$25
million
on
the
Partnership
Revolver
in
2018
and
continue
to
maintain
our
focus
on
strengthening
our
balance
sheet
and
reducing
debt
in
2019.

Leveraged CMT capabilities to further diversify customer and product mix. We
continued
to
further
diversify
the
product
mix
by
handling
petroleum
coke,
aggregates
and
liquids,
and
we
remain
focused
on
adding
additional
dry
bulk
products
to
grow
the
terminal.

In
2018,
we
moved
approximately
one
million
merchant
tons
of
bulk
products
through
CMT.

Delivered operational excellence and optimized our asset base. We
continued
to
improve
operational
performance
across
both
our
coke
and
logistics
businesses,
which
was
reflected
by
the
increase
in
volumes
in
both
segments
during
2018.
We
encountered
operational
challenges
at
our
Granite
City
facility
during
2018,
which
included
an
extended
outage
and
a
machinery
fire.
As
part
of
the
extended
outage,
we
completed
various
upgrades
on
our
heat
recovery
steam
generators
and
flue
gas
desulfurization
system
in
order
to
improve
the
long-term
reliability
and
operational
performance
of
these
assets.
These
necessary
upgrades
will
better
position
Granite
City
for
long-term
success.
We
also
made
significant
progress
on
our
environmental
remediation
project
at
Granite
City
and
expect
the
project
to
be
completed
by
the
middle
of
2019.

Table
of
Contents

Our Focus and Outlook for 2019

During
2019
,
our
primary
focus
will
be
to:

•

Achieve financial objectives. We
expect
to
deliver
Adjusted
EBITDA
attributable
to
the
Partnership
of
between
$215
million
and
$225
million
and
operating
cash
flow
of
between
$145
million
and
$160
million
.
Significant
operational
improvements
at
Granite
City
and
solid
ongoing
operations
across
the
remaining
Domestic
Coke
fleet
are
expected
to
contribute
to
the
growth
in
Adjusted
EBITDA.

Continue to pay down debt and strengthen the balance sheet. We
remain
committed
to
continuing
to
strengthen
the
balance
sheet
and
plan
to
allocate
excess
cash
flow,
after
distributions,
towards
reducing
debt,
which
will
maximize
long-term
value
for
all
unitholders.

Deliver operational excellence and optimize our asset base. We
remain
focused
on
further
improving
operational
performance
across
both
our
coke
and
logistics
businesses,
as
well
as
successfully
executing
on
our
2019
capital
plan.
We
expect
operational
improvements
at
Granite
City
to
generate
an
increase
in
production
and
higher
energy
revenues
as
well
as
lower
operating
and
maintenance
costs.
We
also
continue
to
work
to
secure
further
new
business
and
diversify
our
customer
base.

Items Impacting Comparability

•

Debt Activities. During
2017,
the
Partnership
refinanced
its
debt
obligations
and
amended
and
restated
the
Partnership
Revolver,
resulting
in
a
loss
on
extinguishment
of
debt
on
the
Consolidated
Statement
of
Operations
of
$20.0
million
.

During
2016,
the
Partnership
de-levered
its
balance
sheet
by
repurchasing
$89.5
million
of
face
value
notes
due
in
2020,
resulting
in
gains
on
debt
extinguishment
of
$25.0
million
on
the
Consolidated
Statement
of
Operations.

As
a
result
of
the
above
debt
activities,
weighted
average
debt
balances
during
2018,
2017
and
2016
were
$839.2
million,
$840.8
million
and
$843.1
million,
respectively,
and
related
interest
expense
in
2018,
2017
and
2016
was
$62.7
million
,
$57.5
million
and
$52.7
million
,
respectively
or
a
weighted
average
interest
rate
of
7.47
percent,
6.84
percent
and
6.25
percent,
respectively.
The
increase
in
related
interest
expense
in
2017
as
compared
to
2016
was
driven
by
higher
interest
rates
as
a
result
of
the
Partnership's
debt
refinancing
activities.
Interest
expense
in
2018
reflects
a
full
year
of
the
higher
rates.

•

Tax Rulings.

◦

IRS Final Regulations on Qualifying Income. In
January
2017,
the
IRS
announced
its
decision
to
exclude
cokemaking
as
a
qualifying
income
generating
activity
in
its
final
regulations
(the
"Final
Regulations")
issued
under
section
7704(d)(1)(E)
of
the
Internal
Revenue
Code
relating
to
the
qualifying
income
exception
for
publicly
traded
partnerships.
Subsequent
to
the
10-year
transition
period,
certain
cokemaking
entities
in
the
Partnership
will
become
taxable
as
corporations.
As
a
result
of
the
qualifying
income
exception
discussed
above,
the
Partnership
recorded
deferred
income
tax
expense
of
$148.6
million
related
to
its
changes
in
its
projected
deferred
tax
liability
associated
with
projected
book
to
tax
differences
at
the
end
of
the
10-year
transition
period
.
The
Partnership
recorded
a
deferred
tax
benefit
of
$3.6
million
in
2018
as
a
result
of
current
period
additions
and
changes
in
estimated
useful
lives
of
certain
assets.
See
Note
6
to
our
consolidated
financial
statements.

Tax Legislation. On
December
22,
2017,
the
Tax
Cuts
and
Jobs
Act
(“Tax
Legislation”)
was
enacted.
The
Tax
Legislation
significantly
revised
the
U.S.
corporate
income
tax
structure,
including
lowering
corporate
income
tax
rates.
As
a
result,
the
Partnership
recorded
an
income
tax
benefit
of
$68.8
million
for
the
remeasurement
of
its
U.S.
deferred
income
tax
liabilities,
reversing
a
portion
of
the
deferred
income
tax
expense
recorded
from
the
Final
Regulations
in
the
first
quarter
of
2017.

The
net
impact
of
the
Final
Regulations
and
Tax
Legislation,
resulted
in
$79.8
million
of
deferred
income
tax
expense,
net
during
2017.

Table
of
Contents

Consolidated Results of Operations

The
following
section
includes
analysis
of
consolidated
results
of
operations
for
the
years
ended
December
31,
2018
,
2017
and
2016
.
See
"Analysis
of

Segment
Results"
later
in
this
section
for
further
details
of
these
results.

Revenues

Sales
and
other
operating
revenue

Costs and operating expenses

Cost
of
products
sold
and
operating
expenses

Selling,
general
and
administrative
expenses

Depreciation
and
amortization
expense

Total
costs
and
operating
expenses

Operating income

Interest
expense,
net
(1)
Loss
(gain)
on
extinguishment
of
debt,
net
(1)

Income
before
income
tax
expense
(benefit)

Income
tax
(benefit)
expense
(1)

Net income (loss)

Less:
Net
income
attributable
to
noncontrolling
interests

Net income (loss) attributable to SunCoke Energy Partners, L.P.

Years Ended December 31,

Increase (Decrease)

2018

2017

2016

2018 vs. 2017
2017 vs. 2016

(Dollars in millions)

892.1
$

845.6
$

779.7
$

46.5
$

65.9

648.9

33.6

92.4

774.9

117.2

59.4

—

57.8

(1.6)

586.7

32.5

83.6

702.8

142.8

56.4

20.0

66.4

83.9

517.2

38.7

77.7

633.6

146.1

47.7

(25.0)

123.4

2.0

62.2

1.1

8.8

72.1

(25.6)

3.0

(20.0)

(8.6)

(85.5)

69.5

(6.2)

5.9

69.2

(3.3)

8.7

45.0

(57.0)

81.9

59.4
$

(17.5)
$

121.4
$

76.9
$

(138.9)

1.9

0.6

2.3

1.3

(1.7)

57.5
$

(18.1)
$

119.1
$

75.6
$

(137.2)

(1) See
year-over-year
changes
described
in
"Items
Impacting
Comparability."

Sales and Other Operating Revenue and Costs of Products Sold and Operating Expenses. Sales
and
other
operating
revenue
and
costs
of
products
sold
and
operating
expenses
increased
for
2018
and
2017
as
compared
to
prior
year
periods,
primarily
due
to
the
pass-through
of
higher
coal
prices
in
our
Domestic
Coke
segment.
Higher
sales
volumes
in
our
Logistics
segment
also
increased
revenues.

Selling, General and Administrative Expenses. The
increase
in
selling,
general
and
administrative
expense
in
2018
as
compared
to
2017
was
driven
by
higher
costs
to
resolve
certain
legal
matters.
The
decrease
in
selling,
general
and
administrative
expense
in
2017
as
compared
to
2016
was
driven
by
lower
professional
service
fees
and
the
absence
of
unfavorable
mark-to-market
adjustments
on
deferred
compensation
driven
by
changes
in
the
Partnership's
unit
price
recorded
in
2016.

Depreciation and Amortization Expense. Depreciation
and
amortization
expense
increased
in
2018
as
compared
to
2017
driven
by
revisions
to
the
estimated
useful
lives
of
certain
assets
in
our
Domestic
Coke
segment,
primarily
as
a
result
of
plans
to
replace
major
components
of
certain
heat
recovery
steam
generators
with
upgraded
materials
and
design.
The
revisions
resulted
in
additional
depreciation
of
$9.2
million
or
$0.20
per
common
unit,
during
2018.
The
increase
in
depreciation
and
amortization
expense
during
2017
as
compared
to
2016
was
impacted
by
depreciation
expense
on
CMT's
ship
loader
and
certain
environmental
remediation
assets
(i.e.
gas
sharing)
at
our
Haverhill
cokemaking
facility,
both
placed
in
service
during
the
fourth
quarter
of
2016.

Noncontrolling Interest. Net
income
attributable
to
noncontrolling
interest
represents
SunCoke's
retained
ownership
interest
in
our
cokemaking
facilities.
The
net
impact
of
the
Final
Regulations
and
Tax
Legislation
attributable
to
SunCoke's
retained
ownership
interest
in
our
cokemaking
facilities
impacted
2017.

Table
of
Contents

Results of Reportable Business Segments

We
report
our
business
results
through
two
segments:

• Domestic
Coke
consists
of
our
Haverhill
facility,
located
in
Franklin
Furnace,
Ohio,
our
Middletown
facility,
located
in
Middletown,
Ohio,
and
our

Granite
City
facility,
located
in
Granite
City,
Illinois.

• Logistics
consists
of
Convent
Marine
Terminal
("CMT"),
located
in
Convent,
Louisiana,
Kanawha
River
Terminal
("KRT"),
located
in
Ceredo
and

Belle,
West
Virginia,
and
SunCoke
Lake
Terminal
("Lake
Terminal"),
located
in
East
Chicago,
Indiana.
Lake
Terminal
is
located
adjacent
to
SunCoke's
Indiana
Harbor
cokemaking
facility.

The
operations
of
each
of
our
segments
are
described
in
Part
I
of
this
document.

Corporate
and
other
expenses
that
can
be
identified
with
a
segment
have
been
included
as
deductions
in
determining
operating
results
of
our
business

segments
and
the
remaining
expenses
have
been
included
in
Corporate
and
Other.

Management
believes
Adjusted
EBITDA
is
an
important
measure
of
operating
performance
and
liquidity
and
uses
it
as
the
primary
basis
for
the
chief

operating
decision
maker
to
evaluate
the
performance
of
each
of
our
reportable
segments.
Adjusted
EBITDA
should
not
be
considered
a
substitute
for
the
reported
results
prepared
in
accordance
with
GAAP.
See
“Non-GAAP
Financial
Measures”
near
the
end
of
this
Item
and
Note
15
to
our
consolidated
financial
statements
.

Table
of
Contents

Segment Operating Data

The
following
tables
set
forth
financial
and
operating
data
by
segment
for
the
years
ended
December
31,
2018
,
2017
and
2016
:

Years Ended December 31,

2018

2017

2016

Increase (Decrease)

2018 vs. 2017
2017 vs. 2016

(Dollars in millions, except per ton amounts)

Sales and other operating revenue:

Domestic
Coke

Logistics

Logistics
intersegment
sales

Elimination
of
intersegment
sales

Total

Adjusted EBITDA (1) :

Domestic
Coke

Logistics

Corporate
and
Other

Total

Coke Operating Data:

776.7
$

739.7
$

681.8
$

37.0
$

115.4

105.9

6.9

(6.9)

6.5

(6.5)

97.9

6.1

(6.1)

9.5

0.4

(0.4)

892.1
$

845.6
$

779.7
$

46.5
$

157.5
$

170.3
$

167.0
$

(12.8)
$

71.6

(16.6)

69.7

(15.3)

63.2

(17.2)

1.9

(1.3)

57.9

8.0

0.4

(0.4)

65.9

3.3

6.5

1.9

212.5
$

224.7
$

213.0
$

(12.2)
$

11.7

Domestic
Coke
capacity
utilization
(%)

Domestic
Coke
production
volumes
(thousands
of
tons)

Domestic
Coke
sales
volumes
(thousands
of
tons)
Domestic
Coke
Adjusted
EBITDA
per
ton
(2)

Logistics Operating Data:
Tons
handled
(thousands
of
tons)
(3)
CMT
take-or-pay
shortfall
tons
(thousands
of
tons)
(4)

101

2,332

2,344

101

2,313

2,298

101

2,334

2,336

—

(21)

(38)

67.19
$

74.11
$

71.49
$

(6.92)
$

2.62

25,499

20,546

17,469

4,953

220

2,918

6,076

(2,698)

3,077

(3,158)

(1) See
Note
15
in
our
consolidated
financial
statements
for
both
the
definition
of
Adjusted
EBITDA
and
the
reconciliations
from
GAAP
to
the
non-GAAP

measurement
for
the
years
ended
December
31,
2018,
2017
and
2016.

(2) Reflects
Domestic
Coke
Adjusted
EBITDA
divided
by
Domestic
Coke
sales
volumes.
(3) Reflects
inbound
tons
handled
during
the
period.
(4) Reflects
tons
billed
under
take-or-pay
contracts
where
services
were
not
performed.

Table
of
Contents

Analysis of Segment Results

Domestic Coke

The
following
table
explains
year-over-year
changes
in
our
Domestic
Coke
segment's
sales
and
other
operating
revenues
and
Adjusted
EBITDA
results:

Beginning

Volumes
(1)
Coal
cost
recovery
and
yields
(2)
Operating
and
maintenance
costs
(3)
Energy
and
other
(4)

Ending

Sales and other operating revenue

Adjusted EBITDA

2018 vs. 2017

2017 vs. 2016

2018 vs. 2017

2017 vs. 2016

739.7
$

(Dollars in millions)
681.8
$

170.3
$

167.0

6.2

34.3

3.2

(6.7)

(4.3)

61.6

0.2

0.4

(4.7)

4.7

(7.8)

(5.0)

3.6

0.1

(5.5)

5.1

776.7
$

739.7
$

157.5
$

170.3

(1)

In
2017,
volumes
were
negatively
impacted
by
a
decrease
in
volumes
to
AK
Steel,
for
which
AK
Steel
provided
make
whole
payments.
In
2018,
these
volumes
to
AK
Steel
increased,
benefiting
revenue
with
minimal
impact
on
Adjusted
EBITDA
as
the
Partnership
is
made
whole
on
volume
shortfalls.
Partly
offsetting
this
benefit
were
lower
volumes
at
Granite
City.

(2) Revenues
and
the
impact
of
coal-to-coke
yields
on
Adjusted
EBITDA
move
directionally
with
changes
in
coal
prices,
which
increased
in
both
2018
and

2017
as
compared
to
the
prior
year
periods.
Additionally,
in
2017,
certain
coal
costs
were
under-recovered
as
a
result
of
unfulfilled
coal
supply
commitments
by
on
of
our
coal
suppliers.

(3) The
timing
and
scope
of
outage
work
negatively
impacted
Adjusted
EBITDA
by
$6.6
million
in
2018.

(4) The
decrease
in
energy
in
2018
as
compared
to
2017
was
primarily
driven
by
our
extended
Granite
City
outage
and
the
impact
a
machinery
fire
had
on

energy
production.
The
improvement
in
2017
as
compared
to
2016
was
driven
by
the
impact
of
a
turbine
failure
at
our
Haverhill
facility
in
October
2016,
which
was
fully
restored
in
January
2017.
This
turbine
failure
adversely
affected
energy
production
in
2016,
although
the
impact
was
partially
mitigated
by
insurance
recoveries.

Logistics

The
following
table
explains
year-over-year
changes
in
our
Logistics
segment's
sales
and
other
operating
revenues
and
Adjusted
EBITDA
results:

Beginning

Transloading
volumes
(1)

Price/margin
impact
of
mix
in
transloading
services
Operating
and
maintenance
costs
and
other
(2)

Ending

Sales and other operating revenue,
inclusive of intersegment sales

Adjusted EBITDA

2018 vs. 2017

2017 vs. 2016

2018 vs. 2017

2017 vs. 2016

112.4
$

9.2

1.7

(1.0)

(Dollars in millions)
104.0
$

3.2

2.4

2.8

69.7
$

3.4

1.7

(3.2)

122.3
$

112.4
$

71.6
$

63.2

2.5

2.4

1.6

69.7

(1) CMT
achieved
record
volumes
in
2017,
which
further
increased
in
2018.
Volumes
were
12.2
million
tons,
8.0
million
tons
and
4.3
million
tons
in
2018,

2017
and
2016,
respectively.

(2)

In
2018,
the
Mississippi
River
experienced
near-historic
water
levels,
which
negatively
impacted
Adjusted
EBITDA
during
2018
as
compared
to
2017.

Table
of
Contents

Corporate and Other

2018 compared to 2017

Corporate
expenses
increased
$1.3
million
to
$16.6
million
in
2018
compared
to
$15.3
million
in
2017
,
primarily
as
a
result
higher
allocation
of
costs

from
SunCoke
as
well
as
costs
to
resolve
certain
legal
matters
during
2018.

2017 compared to 2016

Corporate
expenses
improved
$1.9
million
to
$15.3
million
in
2017
compared
to
$17.2
million
in
2016.
The
improvement
was
driven
by
lower
spending

on
professional
services
and
the
absence
of
unfavorable
period-over-period
mark-to-market
adjustments
in
deferred
compensation
driven
by
changes
in
the
Partnership's
unit
price
recorded
in
2016.

Liquidity and Capital Resources

Our
primary
liquidity
needs
are
to
fund
working
capital,
fund
investments,
service
our
debt,
pay
distributions,
maintain
cash
reserves
and
replace
partially

or
fully
depreciated
assets
and
other
capital
expenditures.
Our
sources
of
liquidity
include
cash
generated
from
operations,
borrowings
under
our
revolving
credit
facility
and,
from
time
to
time,
debt
and
equity
offerings.
As
of
December
31,
2018
,
we
had
$12.6
million
of
cash
and
$178.1
million
of
borrowing
availability
under
the
Partnership
Revolver.

Distributions

On
January
28,
2019
,
our
Board
of
Directors
declared
a
quarterly
cash
distribution
of
$0.4000
per
unit.
This
distribution
will
be
paid
on
March
1,
2019
,

to
unitholders
of
record
on
February
15,
2019
.

T
he
Partnership
anticipates
it
will
maintain
the
current
quarterly
distribution
rate
of
$0.4000
per
unit
until
the
closing
of
the
Simplification
Transaction,

discussed
in
Part
I
and
Note
1
to
our
consolidated
financial
statements.
Partnership
common
unitholders
will
receive
a
prorated
distribution
per
unit
payable
in
SunCoke
common
shares
based
upon
a
quarterly
distribution
of
$0.4000
per
unit
for
the
period
beginning
with
the
first
day
of
the
most
recent
full
calendar
quarter
with
respect
to
which
any
Partnership
unitholder
distribution
record
date
has
not
occurred
(or
if
there
is
no
such
full
calendar
quarter,
then
beginning
with
the
first
day
of
the
partial
calendar
quarter
in
which
the
closing
occurs)
and
ending
on
the
day
prior
to
the
close
of
the
Simplification
Transaction.

Covenants

As
of
December
31,
2018
,
the
Partnership
was
in
compliance
with
all
debt
covenants.
We
do
not
anticipate
violation
of
these
covenants
nor
do
we

anticipate
that
any
of
these
covenants
will
restrict
our
operations
or
our
ability
to
obtain
additional
financing.
See
Note
11
to
the
consolidated
financial
statements
for
details
on
debt
covenants.

We
expect
the
Partnership's
current
debt
structure
to
remain
unchanged
at
the
time
of
the
Simplification
Transaction
closing.
The
Simplification

Transaction
will
not
trigger
any
change-of-control
provisions
.

Credit
Rating

In
February
2018,
S&P
Global
Ratings
reaffirmed
SunCoke's
corporate
family
credit
rating
of
BB-
(stable).
Additionally,
in
May
2018,
Moody’s

Investors
Service
reaffirmed
SunCoke's
corporate
family
credit
rating
of
B1
(stable).

Table
of
Contents

Cash
Flow
Summary

The
following
table
sets
forth
a
summary
of
the
net
cash
provided
by
(used
in)
operating,
investing
and
financing
activities
for
the
years
ended

December
31,
2018
,
2017
and
2016
:

Net
cash
provided
by
operating
activities

Net
cash
used
in
investing
activities

Net
cash
used
in
financing
activities

Net
increase
(decrease)
in
cash,
cash
equivalents
and
restricted
cash

Cash Provided by Operating Activities

Years Ended December 31,

2018

2017

2016

(Dollars in millions)

162.8
$

(60.6)

(96.2)

6.0
$

136.7
$

(39.0)

(133.4)

(35.7)
$

183.6

(35.0)

(172.6)

(24.0)

Net
cash
provided
by
operating
activities
increased
$26.1
million
to
$162.8
million
in
2018
as
compared
to
2017.
The
increase
was
driven
by
a
favorable

year-over-year
change
of
approximately
$31
million
in
primary
working
capital,
which
is
comprised
of
accounts
receivable,
inventories
and
accounts
payable,
primarily
as
a
result
of
the
timing
of
coal
purchases
and
the
settlement
of
balances
with
SunCoke
during
2017.
Additionally,
the
current
year
period
benefited
from

$7.6
million

of
lower
interest
payments,
net
of
capitalized
interest,
as
a
result
of
the
Partnership's
debt
restructuring
in
the
second
quarter
of
2017,
which
impacted
the
timing
of
interest
payments
and
resulted
in
additional
payments
in
2017.

Net
cash
provided
by
operating
activities
decreased
by
$46.9
million
in
2017
as
compared
to
2016.
The
decrease
in
operating
cash
flows
was
primarily

driven
by
the
unfavorable
year-over-year
change
in
primary
working
capital,
of
which
approximately
$25
million
was
due
to
fluctuating
coal
prices
and
inventory
levels.
Further
contributing
to
the
unfavorable
year-over-year
change
was
the
payment
of
$7.0
million
of
the
deferred
corporate
allocated
costs
to
SunCoke
during
the
second
quarter
of
2017,
which
had
been
deferred
in
the
prior
year
period
and
higher
cash
interest
payments
during
2017
as
compared
to
2016
due
primarily
to
changes
in
the
timing
of
interest
payments
as
a
result
of
the
Partnership
refinancing
its
debt
obligations.

Cash Used in Investing Activities

Net
cash
used
in
investing
activities
increased
$21.6
million
to
$60.6
million
in
2018
as
compared
to
2017.
The
increase
was
due
to
higher
capital

spending
on
the
environmental
remediation
project
at
Granite
City
during
2018
as
well
as
higher
spending
for
ongoing
capital
expenditures
compared
to
2017.

Net
cash
used
in
investing
activities
increased
$4.0
million
to
$39.0
million
in
2017
compared
to
2016.
The
increase
was
due
to
higher
capital
spending

on
the
environmental
remediation
project
at
Granite
City
during
2017
as
compared
to
2016.

Cash Used in Financing Activities

Net
cash
used
in
financing
activities
was
$96.2
million
in
2018
and
was
primarily
related
to
the
Partnership's
distribution
payments
to
unitholders
and

noncontrolling
interest
of
$88.6
million
and
the
Partnership's
repayment
of
$25.0
million
on
its
revolving
credit
facility
during
the
third
quarter
of
2018.
Pursuant
to
the
omnibus
agreement,
SunCoke,
through
the
general
partner,
made
capital
contributions
of
$20.0
million
to
us
during
2018
for
certain
known
environmental
remediation
projects.
See
Note
11
to
our
consolidated
financial
statements
for
further
discussion
of
debt
activities.

Net
cash
used
in
financing
activities
was
$133.4
million
in
2017
and
was
primarily
related
to
the
Partnership's
distribution
payments
to
unitholders
and

noncontrolling
interest
of
$121.9
million
.
Additionally,
during
2017,
the
Partnership
refinanced
its
debt
obligations,
for
which
the
Partnership
made
repayments
of
debt,
net
of
proceeds,
of
$11.5
million
.

Net
cash
used
in
financing
activities
was

$172.6
million

2016
.
In
connection
with
the
Partnership's
de-levering
activities,
the
Partnership
made

repayments
of
debt,
net
of
proceeds
from
the
sale-leaseback
arrangement,
of
$61.1
million.
Additionally,
during
2016,
the
Partnership
paid
distributions
to
unitholders
and
noncontrolling
interest
of
$119.9
million.
The
repayments
of
debt
and
distributions
were
partially
offset
by
capital
contributions
from
SunCoke
of

$8.4
million

from
the
reimbursement
holiday.

Table
of
Contents

Capital Requirements and Expenditures

Our
cokemaking
operations
are
capital
intensive,
requiring
significant
investment
to
upgrade
or
enhance
existing
operations
and
to
meet
environmental
and
operational
regulations.
The
level
of
future
capital
expenditures
will
depend
on
various
factors,
including
market
conditions
and
customer
requirements,
and
may
differ
from
current
or
anticipated
levels.
Material
changes
in
capital
expenditure
levels
may
impact
financial
results,
including
but
not
limited
to
the
amount
of
depreciation,
interest
expense
and
repair
and
maintenance
expense.

Our
capital
requirements
have
consisted,
and
are
expected
to
consist,
primarily
of:

•

Ongoing
capital
expenditures
required
to
maintain
equipment
reliability,
ensure
the
integrity
and
safety
of
our
coke
ovens
and
steam
generators
and
to
comply
with
environmental
regulations.
Ongoing
capital
expenditures
are
made
to
replace
partially
or
fully
depreciated
assets
in
order
to
maintain
the
existing
operating
capacity
of
the
assets
and/or
to
extend
their
useful
lives
and
also
include
new
equipment
that
improves
the
efficiency,
reliability
or
effectiveness
of
existing
assets.
Ongoing
capital
expenditures
do
not
include
normal
repairs
and
maintenance
expenses,
which
are
expensed
as
incurred;

Environmental
remediation
project
expenditures
required
to
implement
design
changes
to
ensure
that
our
existing
facilities
operate
in
accordance
with
existing
environmental
permits;
and

Expansion
capital
expenditures
to
acquire
and/or
construct
complementary
assets
to
grow
our
business
and
to
expand
existing
facilities
as
well
as
capital
expenditures
made
to
enable
the
renewal
of
a
coke
sales
agreement
and/or
logistics
service
agreement
and
on
which
we
expect
to
earn
a
reasonable
return.

The
following
table
summarizes
ongoing,
environmental
remediation
project
and
expansion
capital
expenditures:

Ongoing
capital
Environmental
remediation
project
(1)
Expansion
capital
(2)

Total

Years Ended December 31,

2018

2017

2016

(Dollars in millions)

30.2
$

29.8

0.8

60.8
$

18.2
$

19.4

1.4

39.0
$

15.8

7.8

13.5

37.1

(1)

Includes
$3.2
million
,
$1.1
million
and
$2.7
million
of
capitalized
interest
in
connection
with
the
gas
sharing
projects
for
the
years
ended
December
31,
2018
,
2017
and
2016
,
respectively.

(2) Primarily
consists
of
capital
expenditures
for
the
ship
loader
expansion
project
funded
with
cash
withheld
in
conjunction
with
the
acquisition
of
CMT.

Additionally,
this
includes
capitalized
interest
of
$2.3
million
for
the
year
ended
December
31,
2016.

In
2019,
we
expect
our
capital
expenditures
to
be
between
$55
million
and
$60
million
.

We
retained
an
aggregate
of
$119
million
in
proceeds
from
our
IPO
and
subsequent
dropdowns
to
comply
with
the
expected
terms
of
a
consent
decree
at

the
Haverhill
and
Granite
City
cokemaking
operations.
SunCoke
and
the
Partnership
anticipate
spending
approximately
$150
million
to
comply
with
these
environmental
remediation
projects.
Pursuant
to
the
omnibus
agreement,
any
amounts
that
we
spend
on
these
projects
in
excess
of
the
$119
million
will
be
reimbursed
by
SunCoke.
Prior
to
our
formation,
SunCoke
spent
approximately
$7
million
related
to
these
projects.
The
Partnership
has
spent
approximately
$131
million
to
date
and
expects
to
spend
the
remaining
capital
through
the
first
half
of
2019.
SunCoke
has
reimbursed
the
Partnership
approximately
$20
million
for
the
estimated
additional
spending
beyond
what
has
previously
been
funded.

Table
of
Contents

Contractual Obligations

The
following
table
summarizes
our
significant
contractual
obligations
as
of
December
31,
2018
:

Total

2019

2020-2021

2022-2023

Thereafter

(Dollars in millions)

Payment Due Dates

Total
borrowings:
(1)

Principal

Interest
Operating
leases
(2)

Purchase
obligations:

Coal
(3)

Transportation
and
coal
handling
(4)

Other
(5)

815.1
$

359.1

1.5

434.0

89.1

7.1

2.8
$

58.6

1.1

434.0

23.6

2.4

7.3
$

105.0
$

116.7

0.3

—

26.2

2.0

107.2

0.1

—

12.9

1.8

Total

1,705.9
$

522.5
$

152.5
$

227.0
$

700.0

76.6

—

26.4

0.9

803.9

(1) At
December
31,
2018
,
debt
consists
of
$700.0
million
of
Partnership
Notes,
$105.0
million
of
Partnership
Revolver
and
$10.1
million
of
Partnership

Financing
Obligation.
Projected
interest
costs
on
variable
rate
instruments
were
calculated
using
market
rates
at
December
31,
2018
.

(2) Our
operating
leases
include
leases
for
office
space,
land,
locomotives,
office
equipment
and
other
property
and
equipment.
Operating
leases
include
all

operating
leases
that
have
initial
noncancelable
terms
in
excess
of
one
year.

(3) Certain
coal
procurement
contracts
included
in
the
table
above
were
not
executed
at
December
31,
2018
.
We
estimate
these
contracts
to
be
approximately

$68
million
of
purchase
obligations
in
2019
and
expect
these
to
be
finalized
in
the
first
quarter
of
2019
.

(4) Transportation
and
coal
handling
services
consist
primarily
of
railroad
and
terminal
services
attributable
to
delivery
and
handling
of
coke
sales.
Long-
term
commitments
generally
relate
to
locations
for
which
limited
transportation
options
exist
and
match
the
length
of
the
related
coke
sales
agreement.

(5) Primarily
represents
open
purchase
orders
for
materials,
supplies
and
services.

A
purchase
obligation
is
an
enforceable
and
legally
binding
agreement
to
purchase
goods
or
services
that
specifies
significant
terms,
including:
fixed
or

minimum
quantities
to
be
purchased;
fixed,
minimum
or
variable
price
provisions;
and
the
approximate
timing
of
the
transaction.
Our
principal
purchase
obligations
in
the
ordinary
course
of
business
consist
of
coal
and
transportation
and
coal
handling
services,
including
railroad
services.
Our
coal
purchase
obligations
are
generally
for
terms
of
one
year
and
are
based
on
fixed
prices.
These
purchase
obligations
generally
include
fixed
or
minimum
volume
requirements.
Transportation
and
coal
handling
obligations
also
typically
include
required
minimum
volume
commitments
and
are
for
long-term
agreements.
The
purchase
obligation
amounts
in
the
table
above
are
based
on
the
minimum
quantities
or
services
to
be
purchased
at
estimated
prices
to
be
paid
based
on
current
market
conditions.
Accordingly,
the
actual
amounts
may
vary
significantly
from
the
estimates
included
in
the
table.

Off-Balance Sheet Arrangements

We
have
off-balance
sheet
arrangements,
which
include
operating
leases
disclosed
in
Note
12
to
the
consolidated
financial
statements.
Other
than
these
arrangements,
the
Partnership
has
not
entered
into
any
transactions,
agreements
or
other
contractual
arrangements
that
would
result
in
material
off-balance
sheet
liabilities.

Impact of Inflation

Although
the
impact
of
inflation
has
been
relatively
low
in
recent
years,
it
is
still
a
factor
in
the
U.S.
economy
and
may
increase
the
cost
to
acquire
or

replace
properties,
plants,
and
equipment
and
may
increase
the
costs
of
labor
and
supplies.
To
the
extent
permitted
by
competition,
regulation
and
existing
agreements,
we
have
generally
passed
along
increased
costs
to
our
customers
in
the
form
of
higher
fees.
We
expect
to
continue
this
practice.

Table
of
Contents

Critical Accounting Policies

The
discussion
and
analysis
of
our
financial
condition
and
results
of
operations
are
based
upon
the
consolidated
financial
statements
of
SunCoke
Energy

Partners,
L.P.,
which
have
been
prepared
in
accordance
with
GAAP.
The
preparation
of
these
financial
statements
requires
the
use
of
estimates
and
assumptions
that
affect
the
reported
amounts
of
assets,
liabilities,
revenues
and
expenses
and
related
disclosure
of
contingent
assets
and
liabilities.
Accounting
for
impairments
is
subject
to
significant
estimates
and
assumptions.
Although
our
management
bases
our
estimates
on
historical
experience
and
various
other
assumptions
that
are
believed
to
be
reasonable
under
the
circumstances,
actual
results
may
differ
to
some
extent
from
the
estimates
on
which
our
consolidated
financial
statements
have
been
prepared
at
any
point
in
time.
Despite
these
inherent
limitations,
our
management
believes
the
“Management’s
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations”
and
consolidated
financial
statements
and
footnotes
provide
a
meaningful
and
fair
perspective
of
our
financial
condition.

Accounting for Impairments of Goodwill

Goodwill,
which
represents
the
excess
of
the
purchase
price
over
the
fair
value
of
the
net
assets
acquired,
is
tested
for
impairment
as
of
October
1
of
each

year,
or
when
events
occur
or
circumstances
change
that
would,
more
likely
than
not,
reduce
the
fair
value
of
the
reporting
unit
to
below
its
carrying
value.
We
perform
our
annual
goodwill
impairment
test
by
comparing
the
fair
value
of
the
reporting
unit
with
its
carrying
amount.
We
would
recognize
an
impairment
charge
for
the
amount
by
which
the
carrying
amount
exceeds
the
reporting
unit’s
fair
value.

The
Logistics
reporting
unit
had
$73.5
million
of
goodwill
at
December
31,
2018.
The
step
one
analysis
as
of
October
1
st
resulted
in
the
fair
value
of
the
Logistics
reporting
unit,
which
was
determined
based
on
a
discounted
cash
flow
analysis,
exceeding
its
carrying
value
by
approximately
30
percent
.
A
significant
portion
of
our
logistics
business
holds
long-term,
take-or-pay
contracts
with
Murray
American
Coal,
Inc.
("Murray")
and
Foresight
Energy
LLC
("Foresight").
Key
assumptions
in
our
goodwill
impairment
test
include
continued
customer
performance
against
long-term,
take-or-pay
contracts,
renewal
of
future
long-term,
take-or-pay
contracts,
incremental
merchant
business
and
a
14
percent
discount
rate
representing
the
estimated
weighted
average
cost
of
capital
for
this
business
line.
The
use
of
different
assumptions,
estimates
or
judgments,
such
as
the
estimated
future
cash
flows
of
Logistics
and
the
discount
rate
used
to
discount
such
cash
flows,
could
significantly
impact
the
estimated
fair
value
of
a
reporting
unit,
and
therefore,
impact
the
excess
fair
value
above
carrying
value
of
the
reporting
unit.
A
100
basis
point
change
in
the
discount
rate
would
not
have
reduced
the
fair
value
of
the
reporting
unit
below
its
carrying
value.

Recent Accounting Standards

See
Note
2
to
the
consolidated
financial
statements.

Table
of
Contents

Non-GAAP Financial Measures

In
addition
to
the
GAAP
results
provided
in
the
Annual
Report
on
Form
10-K,
we
have
provided
a
non-GAAP
financial
measure,
Adjusted
EBITDA.
Our

management,
as
well
as
certain
investors,
uses
this
non-GAAP
measure
to
analyze
our
current
and
expected
future
financial
performance
and
liquidity.
This
measure
is
not
in
accordance
with,
or
a
substitute
for,
GAAP
and
may
be
different
from,
or
inconsistent
with,
non-GAAP
financial
measures
used
by
other
companies.
See
Note
15
in
our
consolidated
financial
statements
for
both
the
definition
of
Adjusted
EBITDA
and
the
reconciliations
from
GAAP
to
the
non-GAAP
measurement
for
2018,
2017
and
2016.

Below
are
reconciliations
of
2019
estimated
Adjusted
EBITDA
from
its
closest
GAAP
measures:

Net Income

Add:

Depreciation
and
amortization
expense

Interest
expense

Income
tax
expense

Adjusted EBITDA

Subtract:

Adjusted
EBITDA
attributable
to
noncontrolling
interest
(1)

Adjusted EBITDA attributable to SunCoke Energy Partners, L.P.

Net cash provided by operating activities

Add:

Cash
interest
paid

Cash
income
taxes
paid

Changes
in
working
capital
and
other

Adjusted EBITDA

Subtract:

Adjusted
EBITDA
attributable
to
noncontrolling
interest
(1)

Adjusted EBITDA attributable to SunCoke Energy Partners, L.P.

2019

Low

High

(Dollars in millions)

46
$

110

218
$

215
$

2019

Low

High

(Dollars in millions)

145
$

218
$

215
$

105

229

225

160

229

225

(1) Reflects
net
income
attributable
to
noncontrolling
interest
adjusted
for
noncontrolling
interest's
share
of
interest,
taxes,
depreciation
and
amortization.

Table
of
Contents

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

We
have
made
forward-looking
statements
in
this
Annual
Report
on
Form
10-K,
including,
among
others,
in
the
sections
entitled
“Risk
Factors,”

“Quantitative
and
Qualitative
Disclosures
About
Market
Risk”
and
“Management’s
Discussion
and
Analysis
of
Financial
Condition
and
Results
of
Operations.”
Such
forward-looking
statements
are
based
on
management’s
beliefs
and
assumptions
and
on
information
currently
available.
Forward-looking
statements
include
the
information
concerning
our
possible
or
assumed
future
results
of
operations,
business
strategies,
financing
plans,
competitive
position,
potential
growth
opportunities,
potential
operating
performance,
the
effects
of
competition
and
the
effects
of
future
legislation
or
regulations.
Forward-looking
statements
include
all
statements
that
are
not
historical
facts
and
may
be
identified
by
the
use
of
forward-looking
terminology
such
as
the
words
“believe,”
“expect,”
“plan,”
“intend,”
“anticipate,”
“estimate,”
“predict,”
“potential,”
“continue,”
“may,”
“will,”
“should”
or
the
negative
of
these
terms
or
similar
expressions.
In
particular,
statements
in
this
Annual
Report
on
Form
10-K
concerning
future
distributions
are
subject
to
approval
by
our
Board
of
Directors
and
will
be
based
upon
circumstances
then
existing.

Forward-looking
statements
involve
risks,
uncertainties
and
assumptions.
Actual
results
may
differ
materially
from
those
expressed
in
these
forward-
looking
statements.
You
should
not
put
undue
reliance
on
any
forward-looking
statements.
We
do
not
have
any
intention
or
obligation
to
update
any
forward-
looking
statement
(or
its
associated
cautionary
language),
whether
as
a
result
of
new
information
or
future
events,
after
the
date
of
this
Annual
Report
on
Form
10-
K,
except
as
required
by
applicable
law.

The
risk
factors
discussed
in
“Risk
Factors”
could
cause
our
results
to
differ
materially
from
those
expressed
in
the
forward-looking
statements
made
in

this
Annual
Report
on
Form
10-K.
There
also
may
be
other
risks
that
we
are
unable
to
predict
at
this
time.
Such
risks
and
uncertainties
include,
without
limitation:

•

changes
in
levels
of
production,
production
capacity,
pricing
and/or
margins
for
coal
and
coke;

variation
in
availability,
quality
and
supply
of
metallurgical
coal
used
in
the
cokemaking
process,
including
as
a
result
of
non-performance
by
our
suppliers;

changes
in
the
marketplace
that
may
affect
our
logistics
business,
including
the
supply
and
demand
for
thermal
and
metallurgical
coals;

changes
in
the
marketplace
that
may
affect
our
cokemaking
business,
including
the
supply
and
demand
for
our
coke,
as
well
as
increased
imports
of
coke
from
foreign
producers;

competition
from
alternative
steelmaking
and
other
technologies
that
have
the
potential
to
reduce
or
eliminate
the
use
of
coke;

our
dependence
on,
relationships
with,
and
other
conditions
affecting,
our
customers;

our
dependence
on,
relationships
with,
and
other
conditions
affecting,
our
suppliers;

severe
financial
hardship
or
bankruptcy
of
one
or
more
of
our
major
customers,
or
the
occurrence
of
a
customer
default
or
other
event
affecting
our
ability
to
collect
payments
from
our
customers;

volatility
and
cyclical
downturns
in
the
coal
market,
in
the
carbon
steel
industry,
and
other
industries
in
which
our
customers
and/or
suppliers
operate;

our
ability
to
repair
aging
coke
ovens
to
maintain
operational
performance;

our
ability
to
enter
into
new,
or
renew
existing,
long-term
agreements
upon
favorable
terms
for
the
sale
of
coke
steam,
or
electric
power,
or
for
coal
handling
services
(including
transportation,
storage
and
mixing);

our
ability
to
identify
acquisitions,
execute
them
under
favorable
terms
and
integrate
them
into
our
existing
business
operations;

our
ability
to
realize
expected
benefits
from
investments
and
acquisitions;

our
ability
to
consummate
investments
under
favorable
terms,
including
with
respect
to
existing
cokemaking
facilities,
which
may
utilize
by-product
technology,
in
the
U.S.
and
Canada,
and
integrate
them
into
our
existing
businesses
and
have
them
perform
at
anticipated
levels;

our
ability
to
develop,
design,
permit,
construct,
start
up
or
operate
new
cokemaking
facilities
in
the
U.S.;

our
ability
to
successfully
implement
our
growth
strategy;

Table
of
Contents

•

age
of,
and
changes
in
the
reliability,
efficiency
and
capacity
of
the
various
equipment
and
operating
facilities
used
in
our
cokemaking
and/or
logistics
operations,
and
in
the
operations
of
our
major
customers,
business
partners
and/or
suppliers;

changes
in
the
expected
operating
levels
of
our
assets;

our
ability
to
meet
minimum
volume
requirements,
coal-to-coke
yield
standards
and
coke
quality
standards
in
our
coke
sales
agreements;

changes
in
the
level
of
capital
expenditures
or
operating
expenses,
including
any
changes
in
the
level
of
environmental
capital,
operating
or
remediation
expenditures;

our
ability
to
service
our
outstanding
indebtedness;

our
ability
to
comply
with
the
restrictions
imposed
by
our
financing
arrangements;

our
ability
to
comply
with
applicable
federal,
state
or
local
laws
and
regulations,
including,
but
not
limited
to,
those
relating
to
environmental
matters;

nonperformance
or
force
majeure
by,
or
disputes
with,
or
changes
in
contract
terms
with,
major
customers,
suppliers,
dealers,
distributors
or
other
business
partners;

availability
of
skilled
employees
for
our
cokemaking
and/or
logistics
operations,
and
other
workplace
factors;

effects
of
railroad,
barge,
truck
and
other
transportation
performance
and
costs,
including
any
transportation
disruptions;

effects
of
adverse
events
relating
to
the
operation
of
our
facilities
and
to
the
transportation
and
storage
of
hazardous
materials
or
regulated
media
(including
equipment
malfunction,
explosions,
fires,
spills,
impoundment
failure
and
the
effects
of
severe
weather
conditions);

effects
of
adverse
events
relating
to
the
business
or
commercial
operations
of
our
customers
and/or
suppliers;

disruption
in
our
information
technology
infrastructure
and/or
loss
of
our
ability
to
securely
store,
maintain,
or
transmit
data
due
to
security
breach
by
hackers,
employee
error
or
malfeasance,
terrorist
attack,
power
loss,
telecommunications
failure
or
other
events;

our
ability
to
enter
into
joint
ventures
and
other
similar
arrangements
under
favorable
terms;

our
ability
to
consummate
assets
sales,
other
divestitures
and
strategic
restructuring
in
a
timely
manner
upon
favorable
terms,
and/or
realize
the
anticipated
benefits
from
such
actions;

changes
in
the
availability
and
cost
of
equity
and
debt
financing;

impacts
on
our
liquidity
and
ability
to
raise
capital
as
a
result
of
changes
in
the
credit
ratings
assigned
to
our
indebtedness;

changes
in
credit
terms
required
by
our
suppliers;

risks
related
to
labor
relations
and
workplace
safety;

proposed
or
final
changes
in
existing,
or
new,
statutes,
regulations,
rules,
governmental
policies
and
taxes,
or
their
interpretations,
including
those
relating
to
environmental
matters
and
taxes;

the
existence
of
hazardous
substances
or
other
environmental
contamination
on
property
owned
or
used
by
us;

receipt
of
required
permits
and
other
regulatory
approvals
and
compliance
with
contractual
obligations
in
connection
with
our
cokemaking
and
/or
logistics
operations;

risks
related
to
environmental
compliance;

claims
of
noncompliance
with
any
statutory
or
regulatory
requirements;

the
accuracy
of
our
estimates
of
any
necessary
reclamation
and/or
remediation
activities;

our
indebtedness
and
certain
covenants
in
our
debt
documents;

changes
in
product
specifications
for
the
coke
that
we
produce
or
the
coals
that
we
mix,
store
and
transport;

Table
of
Contents

•

changes
in
insurance
markets
impacting
costs
and
the
level
and
types
of
coverage
available,
and
the
financial
ability
of
our
insurers
to
meet
their
obligations;

inadequate
protection
of
our
intellectual
property
rights;
and

effects
of
geologic
conditions,
weather,
natural
disasters
and
other
inherent
risks
beyond
our
control.

The
factors
identified
above
are
believed
to
be
important
factors,
but
not
necessarily
all
of
the
important
factors,
that
could
cause
actual
results
to
differ
materially
from
those
expressed
in
any
forward-looking
statement
made
by
us.
Other
factors
not
discussed
herein
could
also
have
material
adverse
effects
on
us.
All
forward-looking
statements
included
in
this
Annual
Report
on
Form
10-K
are
expressly
qualified
in
their
entirety
by
the
foregoing
cautionary
statements.

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Our
primary
areas
of
market
risk
include
changes
in
the
price
of
coal,
which
is
the
key
raw
material
for
our
cokemaking
business
and
interest
rates.
We
do

not
enter
into
any
market
risk
sensitive
instruments
for
trading
purposes.

Price
of
coal

We
did
not
use
derivatives
to
hedge
any
of
our
coal
purchases.
Although
we
have
not
previously
done
so,
we
may
enter
into
derivative
financial
instruments

from
time
to
time
in
the
future
to
economically
manage
our
exposure
related
to
these
market
risks.

The
largest
component
of
the
price
of
our
coke
is
coal
cost.
However,
under
the
coke
sales
agreements
at
all
of
our
cokemaking
facilities,
coal
costs
are
a
pass-through
component
of
the
coke
price,
provided
that
we
are
able
to
realize
certain
targeted
coal-to-coke
yields.
As
such,
when
targeted
coal-to-coke
yields
are
achieved,
the
price
of
coal
is
not
a
significant
determining
factor
in
the
profitability
of
these
facilities.

The
provisions
of
our
coke
sales
agreements
require
us
to
meet
minimum
production
levels
and
generally
require
us
to
secure
replacement
coke
supplies
at
the
prevailing
market
price
if
we
do
not
meet
contractual
minimum
volumes.
Because
market
prices
for
coke
are
generally
highly
correlated
to
market
prices
for
metallurgical
coal,
to
the
extent
any
of
our
facilities
are
unable
to
produce
their
contractual
minimum
volumes,
we
are
subject
to
market
risk
related
to
the
procurement
of
replacement
supplies.

Interest
Rates

We
are
exposed
to
changes
in
interest
rates
as
a
result
of
our
borrowing
activities
and
our
cash
balances.
The
daily
average
outstanding
balance
on

borrowings
with
variable
interest
rates
was
$127.9
million
and
$184.3
million
during
the
years
ended
December
31,
2018
and
2017
,
respectively.
Assuming
a
50
basis
point
change
in
LIBOR,
interest
expense
would
have
been
impacted
by
$0.6
million
and
$0.9
million
in
2018
and
2017
,
respectively.
At
December
31,
2018
,
we
had
outstanding
borrowings
with
variable
interest
rates
of
$105.0
million
under
the
Partnership
Revolver.

At
December
31,
2018
and
2017
,
we
had
cash
and
cash
equivalents
of
$12.6
million
and
$6.6
million
,
respectively,
which
accrues
interest
at
various
rates.
Assuming
a
50
basis
point
change
in
the
rate
of
interest
associated
with
our
cash
and
cash
equivalents,
interest
income
would
have
been
impacted
by
zero
and
$0.1
million
for
the
years
ended
December
31,
2018
and
2017
.

Item 8.

Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS

Report
of
Independent
Registered
Public
Accounting
Firm

Consolidated
Statements
of
Operations
for
the
Years
Ended
December
31,
2018,
2017
and
2016

Consolidated
Balance
Sheets
at
December
31,
2018
and
2017

Consolidated
Statements
of
Cash
Flows
for
the
Years
Ended
December
31,
2018,
2017
and
2016

Consolidated
Statements
of
Equity
for
the
Years
Ended
December
31,
2018,
2017
and
2016

Notes
to
Consolidated
Financial
Statements

1.
General
and
Basis
of
Presentation

2.
Summary
of
Significant
Accounting
Policies

3.
Related
Party
Transactions

4.
Customer
Concentrations

5.
Net
Income
per
Unit
and
Cash
Distribution

6.
Income
Taxes

7.
Inventories

8.
Properties,
Plants
and
Equipment,
Net

9.
Goodwill
and
Other
Intangible
Assets

10.
Retirement
and
Other
Post-Employment
Benefits
Plans

11.
Debt
and
Financing
Obligation

12.
Commitments
and
Contingent
Liabilities

13.
Fair
Value
Measurements

14.
Revenue
from
Contracts
with
Customers

15.
Business
Segment
Information

16.
Selected
Quarterly
Data
(unaudited)

Page

Report of Independent Registered Public Accounting Firm

To
the
unitholders
and
board
of
directors

SunCoke
Energy
Partners
L.P.:

Opinions
on
the
Consolidated
Financial
Statements
and
Internal
Control
Over
Financial
Reporting

We
have
audited
the
accompanying
consolidated
balance
sheets
of
SunCoke
Energy
Partners,
L.P.,
and
subsidiaries
(the
“Partnership”)
as
of
December
31,
2018
and
2017,
the
related
consolidated
statements
of
operations,
equity,
and
cash
flows
for
each
of
the
years
in
the
three‑year
period
ended
December
31,
2018,
and
the
related
notes
(collectively,
the
“consolidated
financial
statements”).
We
also
have
audited
the
Partnership’s
internal
control
over
financial
reporting
as
of
December
31,
2018,
based
on
criteria
established
in
Internal
Control
-
Integrated
Framework
(2013)
issued
by
the
Committee
of
Sponsoring
Organizations
of
the
Treadway
Commission.

In
our
opinion,
the
consolidated
financial
statements
present
fairly,
in
all
material
respects,
the
financial
position
of
the
Partnership
as
of
December
31,
2018
and
2017,
and
the
results
of
its
operations
and
its
cash
flows
for
each
of
the
years
in
the
three‑year
period
ended
December
31,
2018,
in
conformity
with
U.S.
generally
accepted
accounting
principles.
Also
in
our
opinion,
the
Partnership
maintained,
in
all
material
respects,
effective
internal
control
over
financial
reporting
as
of
December
31,
2018,
based
on
criteria
established
in
Internal
Control
-
Integrated
Framework
(2013)
issued
by
the
Committee
of
Sponsoring
Organizations
of
the
Treadway
Commission.

Basis
for
Opinion

The
Partnership’s
management
is
responsible
for
these
consolidated
financial
statements,
for
maintaining
effective
internal
control
over
financial
reporting,
and
for
its
assessment
of
the
effectiveness
of
internal
control
over
financial
reporting,
included
in
the
accompanying
Management’s
Report
on
Internal
Control
over
Financial
Reporting.
Our
responsibility
is
to
express
an
opinion
on
the
Partnership’s
consolidated
financial
statements
and
an
opinion
on
the
Partnership’s
internal
control
over
financial
reporting
based
on
our
audits.
We
are
a
public
accounting
firm
registered
with
the
Public
Company
Accounting
Oversight
Board
(United
States)
(“PCAOB”)
and
are
required
to
be
independent
with
respect
to
the
Partnership
in
accordance
with
the
U.S.
federal
securities
laws
and
the
applicable
rules
and
regulations
of
the
Securities
and
Exchange
Commission
and
the
PCAOB.

We
conducted
our
audits
in
accordance
with
the
standards
of
the
PCAOB.
Those
standards
require
that
we
plan
and
perform
the
audits
to
obtain
reasonable
assurance
about
whether
the
consolidated
financial
statements
are
free
of
material
misstatement,
whether
due
to
error
or
fraud,
and
whether
effective
internal
control
over
financial
reporting
was
maintained
in
all
material
respects.

Our
audits
of
the
consolidated
financial
statements
included
performing
procedures
to
assess
the
risks
of
material
misstatement
of
the
consolidated
financial
statements,
whether
due
to
error
or
fraud,
and
performing
procedures
that
respond
to
those
risks.
Such
procedures
included
examining,
on
a
test
basis,
evidence
regarding
the
amounts
and
disclosures
in
the
consolidated
financial
statements.
Our
audits
also
included
evaluating
the
accounting
principles
used
and
significant
estimates
made
by
management,
as
well
as
evaluating
the
overall
presentation
of
the
consolidated
financial
statements.
Our
audit
of
internal
control
over
financial
reporting
included
obtaining
an
understanding
of
internal
control
over
financial
reporting,
assessing
the
risk
that
a
material
weakness
exists,
and
testing
and
evaluating
the
design
and
operating
effectiveness
of
internal
control
based
on
the
assessed
risk.
Our
audits
also
included
performing
such
other
procedures
as
we
considered
necessary
in
the
circumstances.
We
believe
that
our
audits
provide
a
reasonable
basis
for
our
opinions.

Definition
and
Limitations
of
Internal
Control
Over
Financial
Reporting

A
company’s
internal
control
over
financial
reporting
is
a
process
designed
to
provide
reasonable
assurance
regarding
the
reliability
of
financial
reporting
and
the
preparation
of
financial
statements
for
external
purposes
in
accordance
with
generally
accepted
accounting
principles.
A
company’s
internal
control
over
financial
reporting
includes
those
policies
and
procedures
that
(1)
pertain
to
the
maintenance
of
records
that,
in
reasonable
detail,
accurately
and
fairly
reflect
the
transactions
and
dispositions
of
the
assets
of
the
company;
(2)
provide
reasonable
assurance
that
transactions
are
recorded
as
necessary
to
permit
preparation
of
financial
statements
in
accordance
with
generally
accepted
accounting
principles,
and
that
receipts
and
expenditures
of
the
company
are
being
made
only
in
accordance
with
authorizations
of
management
and
directors
of
the
company;
and
(3)
provide
reasonable
assurance
regarding
prevention
or
timely
detection
of
unauthorized
acquisition,
use,
or
disposition
of
the
company’s
assets
that
could
have
a
material
effect
on
the
financial
statements.

Because
of
its
inherent
limitations,
internal
control
over
financial
reporting
may
not
prevent
or
detect
misstatements.
Also,
projections
of
any
evaluation
of
effectiveness
to
future
periods
are
subject
to
the
risk
that
controls
may
become
inadequate
because
of
changes
in
conditions,
or
that
the
degree
of
compliance
with
the
policies
or
procedures
may
deteriorate.

/s/
KPMG
LLP

We
have
served
as
the
Partnership’s
auditor
since
2015.

Chicago,
Illinois

February
15,
2019

Table
of
Contents

SunCoke Energy Partners, L.P.
Consolidated Statements of Operations

Years Ended December 31,

2018

2017

2016

(Dollars and units in millions, except per unit amounts)

892.1
$

845.6
$

779.7

648.9

33.6

92.4

774.9

117.2

59.4

—

57.8

(1.6)

59.4

1.9

57.5

1.2
$

56.3
$

1.22
$

46.2

586.7

32.5

83.6

702.8

142.8

56.4

20.0

66.4

83.9

(17.5)

0.6

(18.1)

7.1
$

(25.2)
$

(0.54)
$

46.2

517.2

38.7

77.7

633.6

146.1

47.7

(25.0)

123.4

2.0

121.4

2.3

119.1

23.6

95.5

2.07

46.2

Revenues

Sales
and
other
operating
revenue

Costs and operating expenses

Cost
of
products
sold
and
operating
expenses

Selling,
general
and
administrative
expenses

Depreciation
and
amortization
expense

Total
costs
and
operating
expenses

Operating income

Interest
expense,
net

Loss
(gain)
on
extinguishment
of
debt,
net

Income
before
income
tax
(benefit)
expense

Income
tax
(benefit)
expense

Net income (loss)

Less:
Net
income
attributable
to
noncontrolling
interests

Net income (loss) attributable to SunCoke Energy Partners, L.P.

General
partner's
interest
in
net
income

Limited
partners'
interest
in
net
income
(loss)

Net
income
(loss)
per
common
unit
(basic
and
diluted)

Weighted
average
common
units
outstanding
(basic
and
diluted)

(See
Accompanying
Notes)

SunCoke Energy Partners, L.P.
Consolidated Balance Sheets

Table
of
Contents

Assets

Cash
and
cash
equivalents

Receivables

Receivables
from
affiliates,
net

Inventories

Other
current
assets

Total
current
assets

Properties,
plants
and
equipment
(net
of
accumulated
depreciation
of
$499.9
million,
and
$423.1
million
at
December
31,
2018
and
2017,
respectively)

Goodwill

Other
intangible
assets

Deferred
charges
and
other
assets

Total
assets

Liabilities and Equity

Accounts
payable

Accrued
liabilities

Deferred
revenue

Current
portion
of
long-term
debt
and
financing
obligation

Interest
payable

Total
current
liabilities

Long-term
debt
and
financing
obligation

Deferred
income
taxes

Other
deferred
credits
and
liabilities

Total
liabilities

Equity

Held
by
public:

Common
units
17,727,249,
and
17,958,420
units
issued
at
December
31,
2018
and
2017,
respectively)

Held
by
parent:

Common
units
28,499,899
and
28,268,728
units
issued
at
December
31,
2018
and
2017,
respectively)

General
partner's
interest

Partners’
capital
attributable
to
SunCoke
Energy
Partners,
L.P.

Noncontrolling
interest

Total
equity

Total
liabilities
and
equity

December 31,

2018

2017

(Dollars in millions)

12.6
$

48.8

3.1

79.0

1.0

144.5

1,245.1

73.5

155.8

0.2

1,619.1
$

68.8
$

13.5

3.0

2.8

3.2

91.3

793.3

115.7

12.1

6.6

42.2

5.7

79.4

1.9

135.8

1,265.6

73.5

166.2

0.3

1,641.4

54.9

14.6

1.7

2.6

4.0

77.8

818.4

119.2

10.1

1,012.4

1,025.5

194.1

351.6

49.3

595.0

11.7

606.7

207.0

365.4

31.2

603.6

12.3

615.9

(See
Accompanying
Notes)

1,619.1
$

1,641.4

Table
of
Contents

SunCoke Energy Partners, L.P.
Consolidated Statements of Cash Flows

Cash Flows from Operating Activities:

Net
income
(loss)

Adjustments
to
reconcile
net
income
(loss)
to
net
cash
provided
by
operating
activities:

Depreciation
and
amortization
expense

Deferred
income
tax
(benefit)
expense

Loss
(gain)
on
extinguishment
of
debt

Changes
in
working
capital
pertaining
to
operating
activities:

Receivables

Receivables
from
affiliates,
net

Inventories

Accounts
payable

Accrued
liabilities

Deferred
revenue

Interest
payable

Other

Net
cash
provided
by
operating
activities

Cash Flows from Investing Activities:

Capital
expenditures

Other
investing
activities

Net
cash
used
in
investing
activities

Cash Flows from Financing Activities:

Proceeds
from
issuance
of
common
units,
net
of
offering
costs

Proceeds
from
issuance
of
long-term
debt

Repayment
of
long-term
debt

Debt
issuance
costs

Proceeds
from
revolving
credit
facility

Repayment
of
revolving
credit
facility

Proceeds
from
financing
obligation

Repayment
of
financing
obligation

Distributions
to
unitholders
(public
and
parent)

Distributions
to
noncontrolling
interest
(SunCoke
Energy,
Inc.)

Capital
contributions
from
SunCoke

Net
cash
used
in
financing
activities

Net
increase
(decrease)
in
cash
and
cash
equivalents
and
restricted
cash

Cash,
cash
equivalents
and
restricted
cash
at
beginning
of
year

Cash,
cash
equivalents
and
restricted
cash
at
end
of
year

Supplemental Disclosure of Cash Flow Information

Interest
paid,
net
of
capitalized
interest
of
$3.2
million,
$1.1
million
and
$5.0
million,
respectively

Income
taxes
paid

(See
Accompanying
Notes)

Years Ended December 31,

2018

2017

2016

(Dollars in millions)

59.4
$

(17.5)
$

121.4

92.4

(3.5)

—

(6.6)

2.6

0.4

13.2

(0.9)

1.3

(0.8)

5.3

162.8

(60.8)

0.2

(60.6)

—

179.5

(204.5)

—

(2.6)

(86.1)

(2.5)

20.0

(96.2)

6.0

6.6

83.6

81.3

20.0

(2.5)

(9.0)

(12.5)

3.1

2.7

(0.8)

(10.7)

(1.0)

136.7

(39.0)

—

(39.0)

—

693.7

(644.9)

(15.8)

350.0

(392.0)

—

(2.5)

77.7

(0.1)

(25.0)

0.3

4.7

10.2

2.3

0.5

0.4

(2.8)

(6.0)

183.6

(37.1)

2.1

(35.0)

—

(66.1)

(0.2)

28.0

(38.0)

16.2

(1.0)

(119.2)

(116.4)

(2.7)

—

(133.4)

(35.7)

42.3

(3.5)

8.4

(172.6)

(24.0)

66.3

42.3

49.0

1.5

12.6
$

6.6
$

56.9
$

2.9
$

64.5
$

1.4
$

Table
of
Contents

At December 31, 2015

Partnership
net
income

Conversion
of
subordinated
units
to
common
units

Distribution
to
unitholders,
net
of
unit
issuances

Distribution
to
noncontrolling
interest

SunCoke
capital
contributions

At December 31, 2016

Partnership
net
(loss)
income

Distribution
to
unitholders,
net
of
unit
issuances

Public
units
acquired
by
SunCoke

Distribution
to
noncontrolling
interest

At December 31, 2017

Partnership
net
income

Distribution
to
unitholders

Distributions
to
noncontrolling
interest

Public
units
acquired
by
SunCoke

SunCoke
capital
contributions

At December 31, 2018

SunCoke Energy Partners, L.P.
Consolidated Statements of Equity

Common - Public

Common -
SunCoke

Subordinated
- SunCoke

General Partner -
SunCoke

Non- controlling
Interest

Total

300.0
$

211.0
$

46.1

—

(49.2)

—

49.4

203.3

(60.4)

—

7.0

296.9
$

410.3
$

(13.5)

(11.7)

(46.8)

(29.6)

—

(62.8)

29.6

—

(Dollars in millions)
203.3
$

—

(203.3)

—

—
$

—

15.1
$

15.6
$

23.6

—

(8.0)

—

1.4

2.3

—

(3.5)

—

32.1
$

14.4
$

7.1

0.6

(8.0)

—

(2.7)

207.0
$

365.4
$

—
$

31.2
$

12.3
$

21.7

(31.9)

—

(2.7)

—

34.6

(51.1)

—

2.7

—

1.2

(3.1)

—

20.0

1.9

—

(2.5)

—

194.1
$

351.6
$

—
$

49.3
$

11.7
$

(See
Accompanying
Notes)

745.0

121.4

—

(117.6)

(3.5)

8.4

753.7

(17.5)

(117.6)

—

(2.7)

615.9

59.4

(86.1)

(2.5)

—

20.0

606.7

Table
of
Contents

1. General

Description of Business

SunCoke Energy Partners, L.P.

Notes to Consolidated Financial Statements

SunCoke
Energy
Partners,
L.P.,
(the
“Partnership,”
“we,”
“our”
and
“us”),
primarily
produces
coke
used
in
the
blast
furnace
production
of
steel.
Coke
is
a

We
also
provide
handling
and/or
mixing
services
of
coal
and
other
aggregates
at
our
logistics
terminals.

At
December
31,
2018
,
we
owned
a
98
percent
interest
in
Haverhill
Coke
Company
LLC
(“Haverhill”),
Middletown
Coke
Company,
LLC

(“Middletown”)
and
Gateway
Energy
and
Coke
Company,
LLC
(“Granite
City”)
and
SunCoke
Energy,
Inc.
(“SunCoke”)
owned
the
remaining
2
percent
interest
in
each
of
Haverhill,
Middletown,
and
Granite
City.
The
Partnership
also
owns
a
100
percent
interest
in
all
of
its
logistics
terminals.
Through
its
subsidiary,
SunCoke
owned
a
60.4
percent
limited
partnership
interest
in
us
and
indirectly
owned
and
controls
our
general
partner,
which
holds
a
2
percent
general
partner
interest
in
us
and
all
of
our
incentive
distribution
rights
(“IDRs”).

Our
cokemaking
ovens
have
collective
capacity
to
produce
2.3
million
tons
of
coke
annually
and
utilize
efficient,
modern
heat
recovery
technology

designed
to
combust
the
coal’s
volatile
components
liberated
during
the
cokemaking
process
and
use
the
resulting
heat
to
create
steam
or
electricity
for
sale.
This
differs
from
by-product
cokemaking,
which
seeks
to
repurpose
the
coal’s
liberated
volatile
components
for
other
uses.
We
have
constructed
the
only
greenfield
cokemaking
facilities
in
the
United
States
(“U.S.”)
in
approximately
30
years
and
are
the
only
North
American
coke
producer
that
utilizes
heat
recovery
technology
in
the
cokemaking
process.
We
provide
steam
pursuant
to
steam
supply
and
purchase
agreements
with
our
customers.
Electricity
is
sold
into
the
regional
power
market
or
pursuant
to
energy
sales
agreements.

Our
logistics
business
provides
coal
handling
and/or
mixing
services
to
steel,
coke
(including
some
of
our
domestic
cokemaking
facilities),
electric
utility
and
coal
mining
customers.
The
logistics
business
has
terminals
in
Indiana,
West
Virginia,
and
Louisiana
with
the
collective
capacity
to
mix
and/or
transload
more
than
40
million
tons
of
coal
annually
and
has
total
storage
capacity
of
approximately
3
million
tons.

On
February
5,
2019,
SunCoke
and
the
Partnership
announced
that
they
have
entered
into
a
definitive
agreement
whereby
SunCoke
will
acquire
all

We
were
organized
in
Delaware
in
2012
and
are
headquartered
in
Lisle,
Illinois.
We
became
a
publicly-traded
partnership
in
2013,
and
our
stock
is
listed

on
the
New
York
Stock
Exchange
(“NYSE”)
under
the
symbol
“SXCP.”

Consolidation and Basis of Presentation

The
consolidated
financial
statements
of
the
Partnership
and
its
subsidiaries
were
prepared
in
accordance
with
accounting
principles
generally
accepted
in

the
U.S.
(“GAAP”)
and
include
the
assets,
liabilities,
revenues
and
expenses
of
the
Partnership
and
all
subsidiaries
where
we
have
a
controlling
financial
interest.
Intercompany
transactions
and
balances
have
been
eliminated
in
consolidation.
Net
income
attributable
to
noncontrolling
interest
represents
SunCoke's
respective
ownership
interest
in
Haverhill,
Middletown
and
Granite
City
during
years
ended
December
31,
2018
,
2017
and
2016
.

Table
of
Contents

2. Summary of Significant Accounting Policies

Use of Estimates

The
preparation
of
financial
statements
in
conformity
with
GAAP
requires
management
to
make
estimates
and
assumptions
that
affect
the
amounts

reported
in
the
consolidated
financial
statements
and
accompanying
notes.
Actual
amounts
could
differ
from
these
estimates.

Reclassifications

Certain
amounts
in
the
prior
period
consolidated
financial
statements
have
been
reclassified
to
conform
to
the
current
year
presentation.
See
"Recently

Adopted
Accounting
Pronouncements"
for
further
details.

Revenue Recognition

The
Partnership
sells
coke
as
well
as
steam
and
electricity
and
also
provides
mixing
and
handling
services
of
coal
and
other
aggregates.
See
Note
Note
14

Substantially
all
of
the
coke
produced
by
the
Partnership
is
sold
pursuant
to
long-term
contracts
with
its
customers.
The
Partnership
evaluates
each
of
its

contracts
to
determine
whether
the
arrangement
contains
a
lease
under
the
applicable
accounting
standards.
If
the
specific
facts
and
circumstances
indicate
that
it
is
remote
that
parties
other
than
the
contracted
customer
will
take
more
than
a
minor
amount
of
the
coke
that
will
be
produced
by
the
property,
plant
and
equipment
during
the
term
of
the
coke
supply
agreement,
and
the
price
that
the
customer
is
paying
for
the
coke
is
neither
contractually
fixed
per
unit
nor
equal
to
the
current
market
price
per
unit
at
the
time
of
delivery,
then
the
long-term
contract
is
deemed
to
contain
a
lease.
The
lease
component
of
the
price
of
coke
represents
the
rental
payment
for
the
use
of
the
property,
plant
and
equipment,
and
all
such
payments
are
accounted
for
as
contingent
rentals
as
they
are
only
earned
by
the
Partnership
when
the
coke
is
delivered
and
title
passes
to
the
customer.
The
total
amount
of
revenue
recognized
by
the
Partnership
for
these
contingent
rentals
represents
less
than
10
percent
of
sales
and
other
operating
revenues
for
each
of
the
years
ended
December
31,
2018
,
2017
and
2016
.
Upon
adoption
of
Accounting
Standard
Codification
("ASC")
842,
"Leases"
in
2019,
these
long-term
contracts
to
sell
coke
will
no
longer
be
deemed
to
contain
operating
leases.

Cash Equivalents

The
Partnership
considers
all
highly
liquid
investments
with
a
remaining
maturity
of
three
months
or
less
at
the
time
of
purchase
to
be
cash
equivalents.

These
cash
equivalents
consist
principally
of
money
market
investments.

Inventories

Inventories
are
valued
at
the
lower
of
cost
or
net
realizable
value.
Cost
is
determined
using
the
first-in,
first-out
method,
except
for
the
Partnership’s

materials
and
supplies
inventory,
which
are
determined
using
the
average-cost
method.
The
Partnership
utilizes
the
selling
prices
under
its
long-term
coke
supply
contracts
to
record
lower
of
cost
or
net
realizable
value
inventory
adjustments.

Properties, Plants and Equipment

Plants
and
equipment
are
depreciated
on
a
straight-line
basis
over
their
estimated
useful
lives.
Coke
and
energy
plant,
machinery
and
equipment
are

generally
depreciated
over
25
to
30
years
.
Logistics
plant
and
equipment
are
generally
depreciated
over
15
to
35
years
.
Depreciation
and
amortization
is
excluded
from
cost
of
products
sold
and
operating
expenses
and
is
presented
separately
in
the
Consolidated
Statements
of
Operations.
Gains
and
losses
on
the
disposal
or
retirement
of
fixed
assets
are
reflected
in
earnings
when
the
assets
are
sold
or
retired.
Amounts
incurred
that
extend
an
asset’s
useful
life,
increase
its
productivity
or
add
production
capacity
are
capitalized.
The
Partnership
accounts
for
changes
in
useful
lives,
when
appropriate,
as
a
change
in
estimate,
with
prospective
application
only.
The
Partnership
capitalized
interest
of
$3.2
million
,
$1.1
million
and
$5.0
million
in
2018
,
2017
and
2016
,
respectively.
Direct
costs,
such
as
outside
labor,
materials,
internal
payroll
and
benefits
costs,
incurred
during
capital
projects
are
capitalized;
indirect
costs
are
not
capitalized.
Normal
repairs
and
maintenance
costs
are
expensed
as
incurred.

Impairment of Long-Lived Assets

Long-lived
assets
are
reviewed
for
impairment
whenever
events
or
changes
in
circumstances
indicate
that
the
carrying
amount
of
the
assets
may
not
be

recoverable.
A
long-lived
asset,
or
group
of
assets,
is
considered
to
be
impaired
when
the
undiscounted
net
cash
flows
expected
to
be
generated
by
the
asset
are
less
than
its
carrying
amount.
Such
estimated
future
cash
flows
are
highly
subjective
and
are
based
on
numerous
assumptions
about
future
operations
and
market
conditions.
The
impairment
recognized
is
the
amount
by
which
the
carrying
amount
exceeds
the
fair
market
value
of
the
impaired
asset,
or
group
of
assets.
It
is
also
difficult
to
precisely
estimate
fair
market
value
because
quoted
market
prices
for

Table
of
Contents

our
long-lived
assets
may
not
be
readily
available.
Therefore,
fair
market
value
is
generally
based
on
the
present
values
of
estimated
future
cash
flows
using
discount
rates
commensurate
with
the
risks
associated
with
the
assets
being
reviewed
for
impairment.

Goodwill and Other Intangibles

Goodwill,
which
represents
the
excess
of
the
purchase
price
over
the
fair
value
of
net
assets
acquired,
is
tested
for
impairment
as
of
October
1
of
each

year,
or
when
events
occur
or
circumstances
change
that
would,
more
likely
than
not,
reduce
the
fair
value
of
a
reporting
unit
to
below
its
carrying
value.
The
Partnership
performs
its
annual
goodwill
impairment
test
by
comparing
the
fair
value
of
the
reporting
unit
with
its
carrying
amount.
The
Partnership
would
recognize
an
impairment
charge
for
the
amount
by
which
the
carrying
amount
exceeds
the
reporting
unit’s
fair
value.
See
Note
9
.

Intangible
assets
are
primarily
comprised
of
permits,
customer
contracts
and
customer
relationships.
Intangible
assets
are
amortized
over
their
useful
lives

in
a
manner
that
reflects
the
pattern
in
which
the
economic
benefit
of
the
intangible
asset
is
consumed.
Intangible
assets
are
assessed
for
impairment
when
a
triggering
event
occurs.

Asset Retirement Obligations

The
fair
value
of
a
liability
for
an
asset
retirement
obligation
is
recognized
in
the
period
in
which
it
is
incurred
if
a
reasonable
estimate
of
fair
value
can
be

made.
The
associated
asset
retirement
costs
are
capitalized
as
part
of
the
carrying
amount
of
the
asset
and
depreciated
over
its
remaining
estimated
useful
life.
At
December
31,
2018
and
2017
,
Granite
City
had
asset
retirement
obligations
of
$7.0
million
and
$6.5
million
,
respectively,
primarily
related
to
costs
associated
with
restoring
land
to
its
original
state,
which
are
included
in
other
deferred
credits
and
liabilities
on
the
Consolidated
Balance
Sheets.

Shipping and Handling Costs

Shipping
and
handling
costs
are
included
in
cost
of
products
sold
and
operating
expenses
on
the
Consolidated
Statements
of
Operations
and
are
generally

passed
through
to
our
customers.
The
Partnership
has
elected
the
practical
expedient
under
ASC
606,
"Revenue
from
Contracts
with
Customers",
to
account
for
shipping
and
handling
activities
as
a
promise
to
fulfill
the
transfer
of
coke.

Income Taxes

Deferred
tax
asset
and
liabilities
are
measured
using
enacted
tax
rates
expected
to
apply
to
taxable
income
in
the
years
in
which
those
differences
are

projected
to
be
recovered
or
settled.

The
Partnership
recognizes
uncertain
tax
positions
in
its
financial
statements
when
minimum
recognition
threshold
and
measurement
attributes
are
met
in

accordance
with
current
accounting
guidance.
See
Note
6
.

Fair Value Measurements

The
Partnership
determines
fair
value
as
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
an
orderly
transaction
between

market
participants
at
the
measurement
date.
As
required,
the
Partnership
utilizes
valuation
techniques
that
maximize
the
use
of
observable
inputs
(levels
1
and
2)
and
minimize
the
use
of
unobservable
inputs
(level
3)
within
the
fair
value
hierarchy
included
in
current
accounting
guidance.
Assets
and
liabilities
are
classified
within
the
fair
value
hierarchy
based
on
the
lowest
level
(least
observable)
input
that
is
significant
to
the
measurement
in
its
entirety.
See
Note
13
.

Recently Adopted Accounting Pronouncements

In
May
2014,
Financial
Accounting
Standards
Board
("FASB")
issued
Accounting
Standards
Update
("ASU")
2014-09,
“Revenue
from
Contracts
with

Customers
(Topic
606),”
which
supersedes
the
revenue
recognition
requirements
in
“Revenue
Recognition
(Topic
605),”
and
requires
entities
to
recognize
revenue
to
depict
the
transfer
of
promised
goods
or
services
to
customers
in
an
amount
that
reflects
the
consideration
to
which
the
entity
expects
to
be
entitled
in
exchange
for
those
goods
or
services.
The
Partnership
adopted
this
standard
on
January
1,
2018,
using
the
modified
retrospective
method
with
no
material
impact
on
our
revenue
recognition
model
on
an
annual
basis.
See

Note
14
.

In
November
2016,
the
FASB
issued
ASU
2016-18,
“Statement
of
Cash
Flows
(Topic
230):
Restricted
cash.”
The
Partnership
retrospectively
adopted
this
ASU
in
the
first
quarter
2018
and
modified
the
cash
flow
presentation
to
include
restricted
cash
with
cash
and
cash
equivalents
when
reconciling
the
beginning-of-
period
and
end-of-period
total
amounts
shown
on
the
statement
of
cash
flows.
Historical
restricted
cash
balances
were
related
to
cash
withheld
from
the
2015
acquisition
of
CMT
to
fund
the
completion
of
certain
expansion
capital
improvements,
and
the
related
immaterial
impacts

Table
of
Contents

have
been
reclassified
on
the
statement
of
cash
flows
for
the
years
ended
December
31,
2017
and
2016.
The
restricted
cash
balance
was

zero

at
both
December
31,
2018
and
December
31,
2017.

Recently Issued Pronouncements

In
February
2016,
the
FASB
issued
ASU
2016-02,
"Leases
(Topic
842)."
ASU
2016-02
requires
leases
to
be
recognized
as
assets
and
liabilities
on
the

balance
sheet
for
the
rights
and
obligations
created
by
all
leases
with
terms
of
more
than
12
months.
Subsequently,
the
FASB
has
issued
various
ASUs
to
provide
further
clarification
around
certain
aspects
of
ASC
842,
"Leases"
.

This
standard
is
effective
for
annual
and
interim
periods
in
fiscal
years
beginning
after
December
15,
2018,
with
early
adoption
permitted.
A
multi-disciplined
implementation
team
has
gained
an
understanding
of
the
accounting
and
disclosure
provisions
of
the
standard
and
analyzed
the
impacts
to
our
business,
including
the
development
of
new
accounting
processes
to
account
for
our
leases
and
support
the
required
disclosures.
We
have
implemented
a
technology
tool
to
assist
with
the
accounting
and
reporting
requirements
of
this
standard.
While
we
are
still
finalizing
the
impact
of
adopting
this
standard,
we
expect
that
upon
adoption
the
right-of-use
assets
and
lease
liabilities,
such
as
land,
the
lease
of
our
corporate
office
space
and
certain
equipment
rentals,
will
increase
the
reported
assets
and
liabilities
on
our
Consolidated
Balance
Sheets
by
less
than
$5
million.
The
Partnership
adopted
this
standard
on
January
1,
2019,
by
applying
the
modified
retrospective
transition
approach
and
electing
not
to
adjust
prior
comparative
periods.

Labor Concentrations

We
are
managed
and
operated
by
the
officers
of
our
general
partner.
Our
operating
personnel
are
employees
of
our
operating
subsidiaries.
Our
operating

3. Related Party Transactions

Transactions with Affiliate

Logistics
provides
coal
handling
and
mixing
services
to
certain
SunCoke
cokemaking
operations.
During
2018
,
2017
,
and
2016
,
Logistics
recorded

$13.1
million
,
$17.3
million
and
$17.1
million
,
respectively,
in
revenues
derived
from
services
provided
to
SunCoke’s
cokemaking
operations.
The
Partnership
also
purchased
coal
and
other
services
from
SunCoke
and
its
affiliates
totaling
$4.8
million
in
2016
.

Allocated Expenses

We
were
allocated
expenses
of
$27.2
million
,
$27.6
million
and
$27.9
million
in
2018
,
2017
and
2016
,
respectively,
for
services
provided
to
us
by

SunCoke.
SunCoke
centrally
provides
engineering,
operations,
procurement
and
information
technology
support
to
its
facilities.
In
addition,
allocated
costs
include
legal,
accounting,
tax,
treasury,
insurance,
employee
benefit
costs,
communications
and
human
resources.
Corporate
allocations
are
recorded
based
upon
the
omnibus
agreement
under
which
SunCoke
will
continue
to
provide
us
with
certain
support
services.
SunCoke
will
charge
us
for
all
direct
costs
and
expenses
incurred
on
our
behalf
and
a
fee
associated
with
support
services
provided
to
our
operations.

Table
of
Contents

In
the
first
half
of
2016
,
SunCoke
took
certain
actions
to
support
the
Partnership's
strategy
to
de-lever
its
balance
sheet
and
maintain
a
solid
liquidity

position.
During
the
first
quarter
of
2016
,
SunCoke
provided
a
"reimbursement
holiday"
on
the
$7.0
million
of
corporate
costs
allocated
to
the
Partnership
and
also
returned
its
$1.4
million
IDR
cash
distribution
to
the
Partnership
("IDR
giveback"),
resulting
in
capital
contributions
of
$8.4
million
.
During
the
second
quarter
of
2016
,
SunCoke
provided
the
Partnership
with
deferred
payment
terms
until
April
2017
on
the
reimbursement
of
the
$7.0
million
of
allocated
corporate
costs
to
the
Partnership
and
the
$1.4
million
IDR
cash
distribution,
resulting
in
an
outstanding
payable
to
SunCoke
of
$8.4
million
included
in
payable
to
affiliate,
net
on
the
Consolidated
Balance
Sheets
as
of
December
31,
2016.
During
2017,
the
Partnership
paid
the
amounts
due
to
SunCoke.

Omnibus Agreement

In
connection
with
the
closing
of
our
initial
public
offering
("IPO"),
we
entered
into
an
omnibus
agreement
with
SunCoke
and
our
general
partner
that

addresses
certain
aspects
of
our
relationship
with
them,
including:

Business
Opportunities.
We
have
preferential
rights
to
invest
in,
acquire
and
construct
cokemaking
facilities
in
the
U.S.
and
Canada.
SunCoke
has
preferential
rights
to
all
other
business
opportunities.

Environmental
Indemnity.
SunCoke
will
indemnify
us
to
the
full
extent
of
any
remediation
at
the
Haverhill,
Middletown
and
Granite
City
cokemaking
facilities
arising
from
any
known
environmental
matter
discovered
and
identified
as
requiring
remediation
prior
to
the
closing
of
the
IPO
and
the
Granite
City
Dropdown,
respectively.
In
connection
with
the
IPO
and
subsequent
asset
dropdowns,
SunCoke
has
contributed
$119
million
in
partial
satisfaction
of
this
obligation
and
contributed
an
additional
$20
million
during
2018.
SunCoke
will
reimburse
us
for
additional
spending
in
excess
of
$139
million
as
required
for
such
known
remediation
obligations.

Other
Indemnification.
SunCoke
will
fully
indemnify
us
with
respect
to
any
additional
tax
liability
related
to
periods
prior
to
or
in
connection
with
the
closing
of
the
IPO
or
the
Granite
City
Dropdown
to
the
extent
not
currently
presented
on
the
Consolidated
Balance
Sheets.
Additionally,
SunCoke
will
either
cure
or
fully
indemnify
us
for
losses
resulting
from
any
material
title
defects
at
the
properties
owned
by
the
entities
acquired
in
connection
with
the
closing
of
the
IPO
or
the
Granite
City
Dropdown
to
the
extent
that
those
defects
interfere
with
or
could
reasonably
be
expected
to
interfere
with
the
operations
of
the
related
cokemaking
facilities.
We
will
indemnify
SunCoke
for
events
relating
to
our
operations
except
to
the
extent
that
we
are
entitled
to
indemnification
by
SunCoke.

License.
SunCoke
has
granted
us
a
royalty-free
license
to
use
the
name
“SunCoke”
and
related
marks.
Additionally,
SunCoke
has
granted
us
a
non-exclusive
right
to
use
all
of
SunCoke's
current
and
future
cokemaking
and
related
technology.
We
have
not
paid
and
will
not
pay
a
separate
license
fee
for
the
rights
we
receive
under
the
license.

Expenses
and
Reimbursement.
SunCoke
will
continue
to
provide
us
with
certain
corporate
and
other
services,
and
we
will
reimburse
SunCoke
for
all
direct
costs
and
expenses
incurred
on
our
behalf
and
a
portion
of
corporate
and
other
costs
and
expenses
attributable
to
our
operations.
SunCoke
may
consider
providing
additional
support
to
the
Partnership
in
the
future
by
providing
a
corporate
cost
reimbursement
holiday,
whereby
the
Partnership
would
not
be
required
to
reimburse
SunCoke
for
costs.
Additionally,
we
paid
all
fees
in
connection
with
our
senior
notes
offering
and
our
revolving
credit
facility
and
have
agreed
to
pay
all
additional
fees
in
connection
with
any
future
financing
arrangement
entered
into
for
the
purpose
of
replacing
the
credit
facility
or
the
senior
notes.

So
long
as
SunCoke
controls
our
general
partner,
the
omnibus
agreement
will
remain
in
full
force
and
effect
unless
mutually
terminated
by
the
parties.
If
SunCoke
ceases
to
control
our
general
partner,
the
omnibus
agreement
will
terminate,
but
our
rights
to
indemnification
and
use
of
SunCoke's
existing
cokemaking
and
related
technology
will
survive.
The
omnibus
agreement
can
be
amended
by
written
agreement
of
all
parties
to
the
agreement,
but
we
may
not
agree
to
any
amendment
that
would,
in
the
reasonable
discretion
of
our
general
partner,
be
adverse
in
any
material
respect
to
the
holders
of
our
common
units
without
prior
approval
of
the
conflicts
committee.

Table
of
Contents

4. Customer Concentrations

In
2018
,
the
Partnership
sold
approximately
2.2
million
tons
of
coke
under
long-term
take-or-pay
contracts
to
its
three
primary
customers:
AK
Steel

Corporation
("AK
Steel"),
ArcelorMittal
USA
LLC
and/or
its
affiliates
(“AM
USA”)
and
United
States
Steel
Corporation
("U.S.
Steel").

The
table
below
shows
sales
to
the
Partnership's
significant
customers:

Years ended December 31,

2018

2017

2016

Sales and other
operating
revenue

Percent of
Partnership sales
and other
operating revenue

Sales and other
operating
revenue

Percent of
Partnership sales
and other
operating revenue

Sales and other
operating
revenue

Percent of
Partnership sales
and other
operating revenue

171.9

377.9

206.8

19.3%
$

42.4%
$

23.2%
$

(Dollars in millions)
182.4

331.3

214.1

21.6%
$

39.2%
$

25.3%
$

142.5

350.0

185.3

18.3%

44.9%

23.8%

AM
USA
(1)
AK
Steel
(1)
U.S.
Steel
(2)

(1)
Represents
revenues
included
in
our
Domestic
Coke
segment.

(2)
Represents
revenues
included
in
our
Domestic
Coke
and
Logistics
segments.

The
Partnership
generally
does
not
require
any
collateral
with
respect
to
its
receivables.
At
December
31,
2018
,
the
Partnership’s
receivables
balances

were
primarily
due
from
AM
USA,
AK
Steel
and
U.S.
Steel.
As
a
result,
the
Partnership
experiences
concentrations
of
credit
risk
in
its
receivables
with
these
three
customers.
These
concentrations
of
credit
risk
may
be
affected
by
changes
in
economic
or
other
conditions
affecting
the
steel
industry.

The
table
below
shows
receivables
due
from
the
Partnership's
significant
customers:

AM
USA

AK
Steel

U.S.
Steel

December 31,

2018

2017

(Dollars in millions)

8.4
$

25.3
$

5.2
$

7.0

13.2

5.6

Our
logistics
business
provides
coal
handling
and
storage
services
to
Murray
Energy
Corporation,
Inc.
("Murray")
and
Foresight
Energy
LLC

("Foresight"),
who
are
the
two
primary
customers
in
the
Logistics
segment.

Table
of
Contents

The
table
below
shows
sales
to
Murray
and
Foresight:

Sales
and
other
operating
revenue

Percent
of
Partnership
sales
and
other
operating
revenue

Percent
of
Logistics
segment
sales
and
other
operating
revenue,
including
intersegment
sales

The
table
below
shows
receivables
due
from
Murray
and
Foresight:

Murray
and
Foresight

5. Net Income Per Unit and Cash Distribution

Cash Distributions

Years ended December 31,

2018

2017

2016

62.5

(Dollars in millions)

57.8

7.0%

51.1%

6.8%

51.4%

53.5

6.9%

51.4%

December 31,

2018

2017

(Dollars in millions)

3.2
$

9.7

The
Partnership
distributes
available
cash
on
or
about
the
first
day
of
each
of
March,
June,
September
and
December
to
the
holders
of
record
of
common

units
on
or
about
the
15th
day
of
each
such
month.
Available
cash
is
generally
all
cash
on
hand,
less
reserves
established
by
the
general
partner
in
its
discretion.
Our
general
partner
has
broad
discretion
to
establish
cash
reserves
that
it
determines
are
necessary
or
appropriate
for
the
proper
conduct
of
Partnership’s
business.

The
Partnership
intends
to
make
quarterly
distributions,
to
the
extent
there
is
sufficient
cash
from
operations
after
establishment
of
cash
reserves
and

payment
of
fees
and
expenses,
including
payments
to
the
general
partner.
Our
general
partner's
board
of
directors
will
evaluate
the
appropriate
level
of
cash
distributions
on
a
quarterly
basis.
There
is
no
guarantee
that
the
Partnership
will
pay
a
quarterly
distribution
on
the
common
units
in
any
quarter.
Additionally,
the
Partnership
will
be
prohibited
from
making
any
distributions
to
unitholders
if
it
would
cause
an
event
of
default,
or
an
event
of
default
exists,
under
the
credit
facility
or
the
senior
notes.
See
Note
11
.

In
general,
the
Partnership
pays
cash
distributions
each
quarter
to
our
unitholders
and
our
general
partner
according
to
the
following
percentage

allocations:

First
Target
Distribution

Second
Target
Distribution

Third
Target
Distribution

Thereafter

Total Quarterly Distribution Per Unit Amount
up
to
$0.412500

above
$0.474375

above
$0.515625

up
to
$0.515625

up
to
$0.618750

above
$0.618750

Marginal Percentage
Interest in Distributions

Unitholders

98%

85%

75%

50%

General Partner
2%

15%

25%

50%

Table
of
Contents

Our
distributions
are
declared
subsequent
to
quarter
end.
The
table
below
represents
total
cash
distributions
applicable
to
the
period
in
which
the

distributions
were
earned:

Earned in Quarter Ended

Total Quarterly
Distribution Per Unit

Total Cash Distribution,
including general partner's
IDRs

(Dollars in millions)

Date of Distribution

Unitholders Record Date

December
31,
2017

March
31,
2018

June
30,
2018

September
30,
2018
December
31,
2018
(1)

0.5940
$

0.4000
$

29.5
March
1,
2018

February
15,
2018

18.9
June
1,
2018

May
15,
2018

18.9
September
4,
2018

August
15,
2018

18.9
December
3,
2018

November
15,
2018

18.9
March
1,
2019

February
15,
2019

(1) On

January
28,
2019
,
our
Board
of
Directors
declared
a
cash
distribution
of

$0.4000

per
unit.
The
distribution
will
be
paid
on

March
1,
2019
,
to

unitholders
of
record
on
February
15,
2019
.

Allocation of Net Income

Our
partnership
agreement
contains
provisions
for
the
allocation
of
net
income
to
the
unitholders
and
the
general
partner.
For
purposes
of
maintaining

partner
capital
accounts,
the
partnership
agreement
specifies
that
items
of
income
and
loss
shall
be
allocated
among
the
partners
in
accordance
with
their
respective
percentage
interest.
Normal
allocations
according
to
percentage
interests
are
made
after
giving
effect,
if
any,
to
priority
income
allocations
in
an
amount
equal
to
incentive
cash
distributions
allocated
100
percent
to
the
general
partner.

The
calculation
of
net
income
allocated
to
the
general
and
limited
partners
was
as
follows:

Net
income
(loss)
attributable
to
SunCoke
Energy
Partners
L.P.
Less:
Expense
allocated
to
Common
-
SunCoke
(1)

Net
income
(loss)
attributable
to
partners

General
partner's
incentive
distribution
rights

Net
income
(loss)
attributable
to
partners,
excluding
incentive
distribution
rights

General
partner's
ownership
interest

General
partner's
allocated
interest
in
net
income
(loss)
(2)

General
partner's
incentive
distribution
rights

Total general partner's interest in net income

Common
-
public
unitholder's
interest
in
net
income
(loss)

Common
-
SunCoke
interest
in
net
income
(loss):

Common
-
SunCoke
interest
in
net
income
(loss)
Expenses
allocated
to
Common
-
SunCoke
(1)

Total
common
-
SunCoke
interest
in
net
income
(loss)

Total limited partners' interest in net income (loss)

Years Ended December 31,

2018

2017

2016

57.5

—

57.5

—

57.5

2.0%

1.2

—

1.2

21.6

34.7

—

34.7

56.3

(Dollars in millions)
(18.1)

—

(18.1)

7.5

(25.6)

2.0%

(0.4)

7.5

7.1

(13.5)

(11.7)

—

(11.7)

(25.2)

119.1

(7.0)

126.1

21.0

105.1

2.0%

2.6

21.0

23.6

46.1

56.4

(7.0)

49.4

95.5

(1) Per
the
amended
partnership
agreement,
expenses
paid
on
behalf
of
the
Partnership
are
to
be
allocated
entirely
to
the
partner
who
paid
them.
During
the

first
quarter
of
2016
,
SunCoke
paid
$7.0
million
of
allocated
corporate
costs
on
behalf
of
the
Partnership
and
will
not
seek
reimbursement
for
those
costs.
See
Note
3
.
These
expenses
are
recorded
as
a
direct
reduction
to
SunCoke's
interest
in
net
income
for
the
year
ended
December
31,
2016
.

(2) Our
net
income
is
allocated
to
the
general
partner
and
limited
partners
in
accordance
with
their
respective
partnership
percentages,
after
giving
effect
to
priority
income
allocations
for
incentive
distributions,
if
any,
to
our
general
partner,
pursuant
to
our
partnership
agreement.
The
table
above
represents
a
simplified
presentation
of
the
calculation,
and
therefore,
amounts
may
not
recalculate
precisely.

Table
of
Contents

Earnings Per Unit

Our
net
income
is
allocated
to
the
general
partner
and
limited
partners
in
accordance
with
their
respective
partnership
percentages,
after
giving
effect
to
priority
income
allocations
for
incentive
distributions,
if
any,
to
our
general
partner,
pursuant
to
our
partnership
agreement.
Distributions
less
than
or
greater
than
earnings
are
allocated
in
accordance
with
our
partnership
agreement.
Payments
made
to
our
unitholders
are
determined
in
relation
to
actual
distributions
declared
and
are
not
based
on
the
net
income
allocations
used
in
the
calculation
of
net
income
per
unit.

In
addition
to
the
common
units,
we
have
also
IDRs
as
participating
securities
and
use
the
two-class
method
when
calculating
the
net
income
per
unit

applicable
to
limited
partners,
which
is
based
on
the
weighted-average
number
of
common
units
outstanding
during
the
period.
Basic
and
diluted
net
income
per
unit
applicable
to
limited
partners
are
the
same
because
we
do
not
have
any
potentially
dilutive
units
outstanding.

The
calculation
of
earnings
per
unit
is
as
follows:

Net
income
(loss)
attributable
to
SunCoke
Energy
Partners
L.P.
Less:
Expense
allocated
to
Common
-
SunCoke
(1)

Net
income
(loss)
attributable
to
all
partners

General
partner's
distributions
(including
zero,
$5.6
million
and
$5.6
million
of
cash

incentive
distribution
rights
declared,
respectively)

Limited
partners'
distributions
on
common
units

Distributions
(greater
than)
less
than
earnings

General partner's earnings:

Distributions
(including
zero,
$5.6
million
and
$5.6
million
of
cash
incentive
distribution

rights
declared,
respectively)

Allocation
of
distributions
(greater
than)
less
than
earnings

Total
general
partner's
earnings

Limited partners' earnings on common units:

Distributions

Expenses
allocated
to
Common
-
SunCoke

Allocation
of
distributions
(greater
than)
less
than
earnings

Total
limited
partners'
earnings
on
common
units

Weighted average limited partner units outstanding:

Common
-
basic
and
diluted

Net income per limited partner unit:

Common
-
basic
and
diluted

Years Ended December 31,

2018

2017

2016

(Dollars in millions, except per unit amounts)

57.5
$

—

57.5

(18.1)
$

—

(18.1)

1.6

73.8

(17.9)

1.6

(0.4)

1.2

73.8

—

(17.5)

56.3

8.0

109.8

(135.9)

8.0

(0.9)

7.1

109.8

—

(135.0)

(25.2)

46.2

1.22
$

(0.54)
$

119.1

(7.0)

126.1

8.0

109.8

8.3

8.0

15.6

23.6

109.8

(7.0)

(7.3)

95.5

46.2

2.07

(1) Per
the
amended
partnership
agreement,
expenses
paid
on
behalf
of
the
Partnership
are
to
be
allocated
entirely
to
the
partner
who
paid
them.
During
the

Table
of
Contents

Unit Activity

Unit
activity
for
the
years
ended
December
31,
2018
,
2017
and
2016
is
as
follows:

Common - Public

At December 31, 2015

Units
issued
to
directors
Conversion
of
subordinate
units
to
common
units
(1)

At December 31, 2016

Units
issued
to
directors

Common
units
acquired
by
SunCoke

At December 31, 2017

Common
Units
acquired
by
SunCoke

At December 31, 2018

20,787,744

Common - SunCoke

9,705,999

Total Common

30,493,743

Subordinated -
SunCoke
15,709,697

12,437

—

12,437

—

15,709,697

(15,709,697)

20,800,181

25,415,696

46,215,877

11,271

—

(2,853,032)

2,853,032

11,271

—

17,958,420

28,268,728

46,227,148

(231,171)

231,171

—

17,727,249

28,499,899

46,227,148

—

(1) Upon
payment
of
the
cash
distribution
for
the
fourth
quarter
of
2015,
the
financial
requirements
for
the
conversion
of
all
subordinated
units
were
satisfied.

As
a
result,
the
15,709,697
subordinated
units
converted
into
common
units
on
a
one-for-one
basis
in
2016.

6. Income Taxes

The
Partnership
is
a
limited
partnership
for
tax
purposes,
and
as
such
is
generally
not
subject
to
federal
or
state
income
tax.

In
January
2017,
the
IRS
issued
final
regulations
(the
"Final
Regulations")
under
section
7704(d)(1)(E)
of
the
Internal
Revenue
Code,
which
excluded

cokemaking
as
a
qualifying
income
activity
for
purposes
of
the
qualifying
income
exception
for
publicly
traded
partnerships.
Subsequent
to
the
10-year
transition
period
under
the
Final
Regulations,
certain
cokemaking
entities
in
the
Partnership
will
become
taxable
as
corporations.

The
Partnership
also
holds
an
interest
in
Gateway
Cogeneration
Company,
LLC,
which
is
subject
to
income
taxes
for
both
federal
and
state
tax
purposes.

In
addition
to
Granite
City,
the
Middletown
operations
in
the
Partnership
are
subject
to
state
and
local
income
taxes.

The
components
of
income
tax
(benefit)
expense
are
as
follows:

Current
tax
expense:

U.S.
federal

U.S.
state
and
local

Total
current
tax
expense

Deferred
tax
(benefit)
expense:

U.S.
federal

U.S.
state
and
local

Total
deferred
tax
(benefit)
expense

Total

Years Ended December 31,

2018

2017

2016

(Dollars in millions)

0.7
$

1.2

1.9

(3.4)

(0.1)

(3.5)

(1.6)
$

1.7
$

0.9

2.6

72.5

8.8

81.3

83.9
$

2.1

—

2.1

(1.1)

1.0

(0.1)

2.0

Table
of
Contents

The
reconciliation
of
Partnership
income
tax
(benefit)
expense
at
the
U.S.
statutory
rate
is
as
follows:

Income
tax
expense
at
U.S.
statutory
rate

12.1

21.0
%
$

(Dollars in millions)
23.3

35.0
%
$

43.2

35.0
%

Years Ended December 31,

2018

2017

2016

(Reduction)
increase
in
income
taxes
resulting
from:

Impact
of
Final
Regulations
(1)
Impact
of
Tax
Legislation
(2)

Partnership
income
not
subject
to
tax

State
and
local
tax
for
Middletown
and
Granite
City
operations

Other

Total
tax
provision

(3.6)

—

(11.2)

1.1

—

(1.6)

(6.2)%

—
%

(19.4)%

1.8
%

—
%

148.6

(68.8)

(21.8)

2.6

—

223.5
%

(103.1)%

—

—
%

(32.8)%

(42.2)

(34.1)%

3.7
%

—
%

1.2

(0.2)

2.0

0.9
%

(0.2)%

1.6
%

(2.8)%
$

83.9

126.3
%
$

(1) As
a
result
of
the
Final
Regulations
discussed
above,
the
Partnership
recorded
a
deferred
income
tax
benefit
of
$3.6
million
and
$148.6
million
related
to

its
changes
in
its
projected
deferred
tax
liability
associated
with
projected
book
to
tax
differences
at
the
end
of
the
10-year
transition
period
in
2018
and
2017,
respectively.
The
benefit
recorded
in
2018
was
driven
by
current
period
additions
and
changes
in
estimated
useful
lives
of
certain
assets.

(2) On
December
22,
2017,
the
Tax
Legislation
was
enacted.
The
Tax
Legislation
significantly
revised
the
U.S.
corporate
income
tax
structure,
including
lowering
corporate
income
tax
rates.
As
a
result,
the
Partnership
recorded
an
income
tax
benefit
of
$68.8
million
for
the
remeasurement
of
its
U.S.
deferred
income
tax
liabilities,
reversing
a
portion
of
the
deferred
income
tax
expense
recorded
from
the
Final
Regulations
in
the
first
quarter
of
2017.

The
temporary
differences
that
comprise
the
net
deferred
income
tax
assets
and
liabilities
are
as
follows:

Deferred
tax
assets

Deferred
tax
liabilities:

Properties,
plants
and
equipment

Other
liabilities

Total
deferred
tax
liabilities

Net
deferred
tax
liability

December 31,

2018

2017

(Dollars in millions)

—
$

—

(114.7)

(1.0)

(115.7)

(115.7)
$

(118.4)

(0.8)

(119.2)

The
Partnership
is
currently
open
to
examination
under
statute
by
the
IRS
for
the
tax
years
ended
December
31,
2015
and
forward.
State
and
local
income

tax
returns
are
generally
subject
to
examination
for
a
period
of
three
years
after
filing
of
the
respective
returns.
Pursuant
to
the
omnibus
agreement,
SunCoke
will
fully
indemnify
us
with
respect
to
any
tax
liability
arising
prior
to
or
in
connection
with
the
closing
of
our
IPO.
There
are
no
uncertain
tax
positions
recorded
as
of
December
31,
2018
or
2017
,
and
there
was
no
associated
interest
or
penalties
recognized
for
the
years
ended
December
31,
2018
,
2017
or
2016
.
The
Partnership
does
not
expect
that
any
unrecognized
tax
benefits
pertaining
to
income
tax
matters
will
be
required
in
the
next
twelve
months.

Table
of
Contents

7. Inventories

The
Partnership’s
inventory
consists
of
metallurgical
coal,
which
is
the
principal
raw
material
for
the
Partnership’s
cokemaking
operations;
coke,
which
is

the
finished
goods
sold
by
the
Partnership
to
its
customers;
and
materials,
supplies
and
other.

The
components
of
inventories
were
as
follows:

Coal

Coke

Materials,
supplies,
and
other

Total
inventories

8. Properties, Plants, and Equipment, Net

The
components
of
net
properties,
plants
and
equipment
were
as
follows:

Coke
and
energy
plant,
machinery
and
equipment
(1)

Logistics
plant,
machinery
and
equipment

Land
and
land
improvements

Construction-in-progress

Other

Gross
investment,
at
cost

Less:
accumulated
depreciation
(1)

Total
properties,
plant
and
equipment,
net

December 31,

2018

2017

(Dollars in millions)

40.3
$

6.4

32.3

79.0
$

41.0

9.5

28.9

79.4

December 31,

2018

2017

(Dollars in millions)
1,367.3
$

210.8

96.9

63.6

6.4

1,745.0
$

(499.9)

1,245.1
$

1,339.9

208.6

95.9

38.4

5.9

1,688.7

(423.1)

1,265.6

(1)

Includes
assets,
consisting
mainly
of
coke
and
energy
plant,
machinery
and
equipment,
with
a
gross
investment
totaling
$877.1
million
and
$835.0
million
and
accumulated
depreciation
of
$231.8
million
and
$196.6
million
at
December
31,
2018
and
2017,
respectively,
which
are
subject
to
long-term
contracts
to
sell
coke
and
are
deemed
to
contain
operating
leases.
Upon
adoption
of
ASC
842,
"Leases",
in
2019,
these
contracts
will
no
longer
be
deemed
to
contain
operating
leases.

9. Goodwill and Other Intangible Assets

Goodwill
allocated
to
the
Partnership's
reportable
segments
was
$73.5
million
at
December
31,
2018
and
2017
,
respectively.
There
were
no
changes
in

the
carrying
amount
of
goodwill
during
the
years
ended
December
31,
2018
and
2017
:

Balance
at
December
31,
2018
and
2017

Logistics

(Dollars in millions)

73.5

The
Partnership
performed
its
annual
goodwill
impairment
test
as
of
October
1,
2018,
with
no
indication
of
impairment.
The
fair
value
of
the
Logistics

reporting
unit,
which
was
determined
based
on
a
discounted
cash
flow
analysis,
exceeded
carrying
value
of
the
reporting
unit
by
approximately
30
percent
.
A
significant
portion
of
our
logistics
business
holds
long-term,
take-or-pay
contracts
with
Murray
and
Foresight.
Key
assumptions
in
our
goodwill
impairment
test
include
continued
customer
performance
against
long-term,
take-or-pay
contracts,
renewal
of
future
long-term,
take-or-pay
contracts,
incremental
merchant
business
and
a
14
percent
discount
rate
representing
the
estimated
weighted
average
cost
of
capital
for
this
business
line.
The
use
of
different
assumptions,
estimates
or
judgments,
such
as
the
estimated
future
cash
flows
of
Logistics
and
the
discount
rate
used
to
discount
such
cash
flows,
could
significantly
impact
the
estimated
fair
value
of
a
reporting
unit,
and
therefore,
impact
the
excess
fair
value
above
carrying
value
of
the
reporting
unit.
A
100
basis
point
change
in
the
discount
rate
would
not
have
reduced
the
fair
value
of
the
reporting
unit
below
its
carrying
value.

Table
of
Contents

The
following
table
summarizes
the
components
of
gross
and
net
intangible
asset
balances:

December 31, 2018

December 31, 2017

Weighted -
Average
Remaining
Amortization
Years

Customer
contracts

Customer
relationships

Permits

Trade
name

Total

Gross Carrying
Amount

Accumulated
Amortization

Net

Gross Carrying
Amount

Accumulated
Amortization

Net

(Dollars in millions)

24.0
$

11.0
$

13.0
$

24.0
$

7.8
$

28.7

139.0

1.2

7.5

17.4

1.2

21.2

121.6

—

28.7

139.0

1.2

5.7

12.2

1.0

192.9
$

37.1
$

155.8
$

192.9
$

26.7
$

16.2

23.0

126.8

0.2

166.2

The
permits
above
represent
the
environmental
and
operational
permits
required
to
operate
a
coal
export
terminal
in
accordance
with
the
United
States

Environmental
Protection
Agency
and
other
regulatory
bodies.
Intangible
assets
are
amortized
over
their
useful
lives
in
a
manner
that
reflects
the
pattern
in
which
the
economic
benefit
of
the
asset
is
consumed.
The
permits’
useful
lives
were
estimated
to
be
27
years
at
acquisition
based
on
the
expected
useful
life
of
the
significant
operating
equipment
at
the
facility.
We
have
historical
experience
of
renewing
and
extending
similar
arrangements
at
our
other
facilities
and
intend
to
continue
to
renew
our
permits
as
they
come
up
for
renewal
for
the
foreseeable
future.
The
permits
were
renewed
regularly
prior
to
our
acquisition
of
CMT.
These
permits
have
an
average
remaining
renewal
term
of
approximately
2.4
years.

Total
amortization
expense
for
intangible
assets
subject
to
amortization
was
$10.4
million
,
$10.5
million
and
$10.7
million
for
the
years
ended
December
31,
2018
,
2017
and
2016
,
respectively.
Based
on
the
carrying
value
of
finite-lived
intangible
assets
as
of
December
31,
2018
,
we
estimate
amortization
expense
for
each
of
the
next
five
years
as
follows:

2019

2020

2021

2022

2023

Thereafter

Total

(Dollars in millions)

10.3

7.0

107.6

155.8

Table
of
Contents

10. Retirement and Other Post-Employment Benefits Plans

Certain
employees
of
the
Partnership's
operating
subsidiaries
participate
in
defined
contribution
and
postretirement
health
care
and
life
insurance
plans

sponsored
by
SunCoke.
The
Partnership’s
contributions
to
the
defined
contribution
plans,
which
are
principally
based
on
its
allocable
portion
of
SunCoke’s
pretax
income
and
the
aggregate
compensation
levels
of
participating
employees,
are
charged
against
income
as
incurred.
These
charges
amounted
to
$4.1
million
,
$3.9
million
and
$3.4
million
in
2018
,
2017
and
2016
,
respectively,
and
are
reflected
in
cost
of
products
sold
and
operating
expenses
in
the
Consolidated
Statements
of
Operations.
The
postretirement
benefit
plans
are
unfunded
and
the
costs
are
borne
by
the
Partnership.
The
expense
allocated
to
the
Partnership
for
other
postretirement
benefit
plans
was
immaterial
for
all
periods
presented.

11. Debt and Financing Obligation

Total
debt
and
financing
obligation
consisted
of
the
following:

7.500
percent
senior
notes,
due
2025
("Partnership
Notes")

Revolving
credit
facility,
due
2022
("Partnership
Revolver")

5.82
percent
financing
obligation,
due
2021
("Partnership
Financing
Obligation")

Total
borrowings

Discount

Debt
issuance
costs

Total
debt
and
financing
obligation

Less:
current
portion
of
long-term
debt
and
financing
obligation

Total
long-term
debt
and
financing
obligation

Partnership Notes

December 31,

2018

2017

(Dollars in millions)
700.0
$

105.0

10.1

815.1
$

(5.4)

(13.6)

796.1
$

2.8

793.3
$

700.0

130.0

12.7

842.7

(5.9)

(15.8)

821.0

2.6

818.4

The
Partnership
Notes
are
the
senior
unsecured
obligations
of
the
Partnership,
and
are
guaranteed
on
a
senior
unsecured
basis
by
each
of
the
Partnership’s

existing
and
certain
future
subsidiaries.
Interest
on
the
Partnership
Notes
is
payable
semi-annually
in
cash
in
arrears
on
June
15
and
December
15
of
each
year,
which
commenced
on
December
15,
2017.

The
Partnership
may
redeem
some
or
all
of
the
Partnership
Notes
at
any
time
on
or
after
June
15,
2020
at
specified
redemption
prices
plus
accrued
and
unpaid
interest,
if
any,
to
the
redemption
date.
Before
June
15,
2020,
and
following
certain
equity
offerings,
the
Partnership
also
may
redeem
up
to
35
percent
of
the
Partnership
Notes
at
a
price
equal
to
107.5
percent
of
the
principal
amount,
plus
accrued
and
unpaid
interest,
if
any,
to
the
redemption
date.
In
addition,
at
any
time
prior
to
June
15,
2020,
the
Partnership
may
redeem
some
or
all
of
the
Partnership
Notes
at
a
price
equal
to
100
percent
of
the
principal
amount,
plus
accrued
and
unpaid
interest,
if
any,
to
the
redemption
date,
plus
a
“make-whole”
premium.

The
Partnership
is
obligated
to
offer
to
purchase
all
or
a
portion
of
the
Partnership
Notes
at
a
price
of
(a)
101
percent
of
their
principal
amount,
together

with
accrued
and
unpaid
interest,
if
any,
to
the
date
of
purchase,
upon
the
occurrence
of
certain
change
of
control
events
and
(b)
100
percent
of
their
principal
amount,
together
with
accrued
and
unpaid
interest,
if
any,
to
the
date
of
purchase,
upon
the
occurrence
of
certain
asset
dispositions.
These
restrictions
and
prohibitions
are
subject
to
certain
qualifications
and
exceptions
set
forth
in
the
Indenture,
including
without
limitation,
reinvestment
rights
with
respect
to
the
proceeds
of
asset
dispositions.

The
Partnership
Notes
contains
covenants
that,
among
other
things,
limit
the
Partnership’s
ability
and
the
ability
of
certain
of
the
Partnership’s
subsidiaries
to
(i)
incur
indebtedness,
(ii)
pay
dividends
or
make
other
distributions,
(ii)
prepay,
redeem
or
repurchase
certain
subordinated
debt,
(iv)
make
loans
and
investments,
(v)
sell
assets,
(vi)
incur
liens,
(vii)
enter
into
transactions
with
affiliates,
(viii)
enter
into
agreements
restricting
the
ability
of
subsidiaries
to
pay
dividends
and
(ix)
consolidate
or
merge.

Partnership Revolver

The
proceeds
of
any
borrowings
made
under
the
Partnership
Revolver
can
be
used
to
finance
working
capital
needs,
acquisitions,
capital
expenditures
and

for
other
general
corporate
purposes.
The
Partnership
Revolver
provides
total
aggregate

Table
of
Contents

commitments
from
lenders
of
$285.0
million
and
up
to
$200.0
million
uncommitted
incremental
revolving
capacity.
The
obligations
under
the
Partnership
Revolver
are
guaranteed
by
the
Partnership’s
subsidiaries
and
secured
by
liens
on
substantially
all
of
the
Partnership’s
and
the
guarantors’
assets.

As
of
December
31,
2018,
the
Partnership
had
$1.9
million
of
letters
of
credit
outstanding
and
an
outstanding
balance
of
$105.0
million
,
leaving
$178.1

million
available.
Commitment
fees
are
based
on
the
unused
portion
of
the
Partnership
Revolver
at
a
rate
of
0.4
percent
.

The
Partnership
Revolver
borrowings
bear
interest
at
a
variable
rate
of
LIBOR
plus
250

basis
points
or
an
alternative
base
rate
plus
150
basis
points.
The

spread
is
subject
to
change
based
on
the
Partnership's
consolidated
leverage
ratio,
as
defined
in
the
credit
agreement.
The
weighted-average
interest
rate
for
borrowings
under
the
Partnership
Revolver
was
4.8
percent
,
3.8
percent
,
3.3
percent
during
2018,
2017
and
2016,
respectively

Partnership Financing Obligation

The
Partnership's
sale-leaseback
arrangement
of
certain
coke
and
logistics
equipment
has
an
initial
lease
period
of
60
months
and
an
early
buyout
option

after
48
months
to
purchase
the
equipment
at
34.5
percent
of
the
original
lease
equipment
cost.
The
arrangement
is
accounted
for
as
a
financing
transaction,
resulting
in
a
financing
obligation
on
the
Consolidated
Balance
Sheets.
The
financing
obligation
is
guaranteed
by
the
Partnership.

Covenants

Under
the
terms
of
the
Partnership's
credit
agreement,
the
Partnership
is
subject
to
a
maximum
consolidated
leverage
ratio
of
4.5
:
1.0
prior
to
June
30,

2020
and
4.0
:
1.0
after
June
30,
2020
and
a
minimum
consolidated
interest
coverage
ratio
of
2.5
:
1.0
.
The
Partnership's
credit
agreement
contains
other
covenants
and
events
of
default
that
are
customary
for
similar
agreements
and
may
limit
our
ability
to
take
various
actions
including
our
ability
to
pay
a
dividend
or
repurchase
our
stock.

If
we
fail
to
perform
our
obligations
under
these
and
other
covenants,
the
lenders'
credit
commitment
could
be
terminated
and
any
outstanding
borrowings,
together
with
accrued
interest,
under
the
Partnership
Revolver
could
be
declared
immediately
due
and
payable.
The
Partnership
have
a
cross
default
provision
that
applies
to
our
indebtedness
having
a
principal
amount
in
excess
of
$35.0
million
.

As
of
December
31,
2018
,
the
Partnership
was
in
compliance
with
all
debt
covenants.
We
do
not
anticipate
violation
of
these
covenants
nor
do
we

anticipate
that
any
of
these
covenants
will
restrict
our
operations
or
our
ability
to
obtain
additional
financing.

Maturities

As
of
December
31,
2018
,
the
combined
aggregate
amount
of
maturities
for
long-term
borrowings
for
each
of
the
next
five
years
is
as
follows:

2019
2020
(1)

2021

2022

2023

2024-Thereafter

Total

(1) Assumes
the
Partnership
Financing
Obligation
early
buyout
option
is
exercised
in
2020.

(Dollars in millions)

2.8

7.3

—

105.0

—

700.0

815.1

Table
of
Contents

12. Commitments and Contingent Liabilities

Lease Obligations

The
Partnership,
as
lessee,
has
noncancelable
operating
leases
for
land,
office
space,
equipment
and
railcars.
The
aggregate
amount
of
future
minimum

annual
rentals
applicable
to
noncancelable
operating
leases
is
as
follows:

Year ending December 31:

2019

2020

2021

2022

2023

2024-Thereafter

Total

Minimum
Rental
Payments

(Dollars in millions)

1.1

0.2

0.1

—

1.5

Total
rental
expense
for
all
operating
leases
was
$5.7
million
,
$4.1
million
and
$4.9
million
in
2018
,
2017
and
2016
,
respectively.

Legal Matters

The
EPA
issued
Notices
of
Violations
(“NOVs”)
for
the
Haverhill
and
Granite
City
cokemaking
facilities
which
stemmed
from
alleged
violations
of
air

operating
permits
for
these
facilities.
We
are
working
in
a
cooperative
manner
with
the
EPA,
the
Ohio
Environmental
Protection
Agency
and
the
Illinois
Environmental
Protection
Agency
to
address
the
allegations,
and
have
entered
into
a
consent
degree
in
federal
district
court
with
these
parties.
The
consent
decree
includes
a
$2.2
million
civil
penalty
payment
that
was
paid
by
SunCoke
in
2014,
as
well
as
capital
projects
underway
to
improve
the
reliability
of
the
energy
recovery
systems
and
enhance
environmental
performance
at
the
Haverhill
and
Granite
City
cokemaking
facilities.
In
the
third
quarter
of
2018,
the
Court
entered
an
amendment
to
the
consent
decree
which
provides
the
Haverhill
and
Granite
City
facilities
with
additional
time
to
perform
necessary
maintenance
on
the
flue
gas
desulfurization
systems
without
exceeding
consent
decree
limits.
The
emissions
associated
with
this
maintenance
will
be
mitigated
in
accordance
with
the
amendment,
and
there
are
no
civil
penalty
payments
associated
with
this
amendment.
The
project
at
Granite
City
was
due
to
be
completed
in
February
2019,
but
the
Partnership
now
expects
to
complete
the
project
in
July
2019
and
is
in
discussions
with
the
government
entities
regarding,
among
other
things,
the
timing
thereof.

We
retained
an
aggregate
of
$119
million
in
proceeds
from
our
IPO
and
subsequent
dropdowns
to
comply
with
the
expected
terms
of
a
consent
decree
at

The
Partnership
is
a
party
to
certain
other
pending
and
threatened
claims,
including
matters
related
to
commercial
and
tax
disputes,
product
liability,

employment
claims,
personal
injury
claims,
premises-liability
claims,
allegations
of
exposures
to
toxic
substances
and
general
environmental
claims.

Although
the
ultimate
outcome
of
these
claims
cannot
be
ascertained
at
this
time,
it
is
reasonably
possible
that
some
portion
of
these
claims
could
be
resolved
unfavorably
to
the
Partnership.
Management
of
the
Partnership
believes
that
any
liability
which
may
arise
from
claims
would
not
have
a
material
adverse
impact
on
our
consolidated
financial
statements.

Table
of
Contents

13. Fair Value Measurements

The
Partnership
measures
certain
financial
and
non-financial
assets
and
liabilities
at
fair
value
on
a
recurring
basis.
Fair
value
is
defined
as
the
price
that
would
be
received
to
sell
an
asset
or
paid
to
transfer
a
liability
in
the
principal
or
most
advantageous
market
in
an
orderly
transaction
between
market
participants
on
the
measurement
date.
Fair
value
disclosures
are
reflected
in
a
three-level
hierarchy,
maximizing
the
use
of
observable
inputs
and
minimizing
the
use
of
unobservable
inputs.

The
valuation
hierarchy
is
based
upon
the
transparency
of
inputs
to
the
valuation
of
an
asset
or
liability
on
the
measurement
date.
The
three
levels
are

defined
as
follows:

•

Level
1—inputs
to
the
valuation
methodology
are
quoted
prices
(unadjusted)
for
an
identical
asset
or
liability
in
an
active
market.

Level
2—inputs
to
the
valuation
methodology
include
quoted
prices
for
a
similar
asset
or
liability
in
an
active
market
or
model-derived
valuations
in
which
all
significant
inputs
are
observable
for
substantially
the
full
term
of
the
asset
or
liability.

Level
3—inputs
to
the
valuation
methodology
are
unobservable
and
significant
to
the
fair
value
measurement
of
the
asset
or
liability.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Certain
assets
and
liabilities
are
measured
at
fair
value
on
a
recurring
basis.
The
Partnership’s
cash
equivalents
are
measured
at
fair
value
based
on
quoted
prices
in
active
markets
for
identical
assets.
These
inputs
are
classified
as
Level
1
within
the
valuation
hierarchy.
The
Partnership
did
not
have
any
cash
equivalents
at
December
31,
2018
and
cash
equivalents
were
immaterial
at
December
31,
2017.

Non-Financial Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain
assets
and
liabilities
are
measured
at
fair
value
on
a
nonrecurring
basis;
that
is,
the
assets
and
liabilities
are
not
measured
at
fair
value
on
an

ongoing
basis,
but
are
subject
to
fair
value
adjustments
in
certain
circumstances
(e.g.,
when
there
is
evidence
of
impairment).
At
December
31,
2018
,
no
material
fair
value
adjustments
or
fair
value
measurements
were
required
for
these
non-financial
assets
or
liabilities.

Convent Marine Terminal Contingent Consideration

In
connection
with
the
CMT
acquisition,
the
Partnership
entered
into
a
contingent
consideration
arrangement
that
runs
through
2022
and
requires
the
Partnership
to
make
future
payments
to
The
Cline
Group
based
on
future
volume
over
a
specified
threshold,
price,
and
contract
renewals
.
The
fair
value
of
the
contingent
consideration
was
estimated
based
on
a
probability-weighted
analysis
using
significant
inputs
that
are
not
observable
in
the
market,
or
Level
3
inputs.
Key
assumptions
included
probability
adjusted
levels
of
coal
handling
services
provided
by
CMT,
anticipated
price
per
ton
on
future
sales
and
probability
of
contract
renewal,
including
length
of
future
contracts,
volume
commitment,
and
anticipated
price
per
ton.
The
fair
value
of
the
contingent
consideration
was
$5.0
million
and
$2.5
million
at
December
31,
2018
and
2017
,
respectively,
and
was
primarily
included
in
other
deferred
charges
and
liabilities
on
the
Consolidated
Balance
Sheets.

During
2018,
CMT
achieved
record
volumes
and
the
Partnership
increased
CMT’s
throughput
volume
projections
in
future
periods
for
certain
customers
due
to
favorable
coal
prices,
which
are
expected
to
increase
export
volume
through
CMT.
The
combined
impact
of
the
strong
2018
volumes
and
improved
volume
projections
resulted
in
an
increase
to
the
fair
value
of
the
Partnership's
contingent
consideration
balance
of
$2.5
million,
which
was
recorded
as
a
charge
to
costs
of
products
sold
and
operating
expenses
in
the
Consolidated
Statements
of
Operations
during
2018.

During
2017
and
2016,
as
a
result
of
adverse
mining
conditions
faced
by
one
of
our
thermal
coal
customers
as
well
as
fluctuating
export
coal
pricing,
the

Partnership
lowered
CMT's
throughput
volume,
which
reduced
the
Partnership's
contingent
consideration
liability
balance
by
$1.7
million
and
$6.4
million
,
respectively.
Additionally,
during
March
2016,
as
a
part
of
commercial
activities
subsequent
to
the
acquisition
of
CMT,
the
Partnership
and
The
Cline
Group
signed
an
amended
agreement,
which
modified
the
contingent
consideration
terms
by
increasing
the
volume
threshold
required
for
the
Partnership
to
make
payments
to
The
Cline
Group
in
exchange
for
future
pricing
modifications,
resulting
in
a
$3.7
million
reduction
to
the
contingent
consideration
liability.
These
decreases
in
fair
value
were
recorded
as
reductions
to
costs
of
products
sold
and
operating
expenses
on
the
Consolidated
Statements
of
Income
during
2017
and
2016.

Table
of
Contents

Certain Financial Assets and Liabilities not Measured at Fair Value

At
December
31,
2018
and
2017
,
the
estimated
fair
value
of
the
Partnership’s
long-term
debt
was
estimated
to
be
$778.9
million
and
$875.0
million
,

respectively,
compared
to
a
carrying
amount
of
$815.1
million
and
$842.7
million
,
respectively.
The
fair
value
was
estimated
by
management
based
upon
estimates
of
debt
pricing
provided
by
financial
institutions
and
are
considered
Level
2
inputs.

14. Revenue from Contracts with Customers

Cokemaking

Substantially
all
our
coke
sales
are
made
pursuant
to
long-term,
take-or-pay
agreements
with
AM
USA,
AK
Steel
and
U.S.
Steel,
who
are
three
of
the

largest
blast
furnace
steelmakers
in
North
America.
The
take-or-pay
provisions
of
our
agreements
require
us
to
deliver
minimum
annual
tonnage,
which
varies
by
contract,
but
covers
at
least
90
percent
of
each
facility's
annual
capacity.
The
take-or-pay
provisions
also
require
our
customers
to
purchase
such
volumes
of
coke
or
pay
the
contract
price
for
any
tonnage
they
elect
not
to
take.
These
coke
sales
agreements
have
an
average
remaining
term
of
approximately
seven
years,
and
to
date,
our
coke
customers
have
satisfied
their
obligations
under
these
agreements.

Our
coke
sales
prices
include
an
operating
cost
component,
a
coal
cost
component
and
a
return
of
capital
component.
Operating
costs
under
one
of
our

coke
sales
agreements
are
contractual,
subject
to
an
annual
adjustment
based
on
an
inflation
index.
Under
our
other
three
coke
sales
agreements
operating
costs
are
passed
through
to
the
respective
customers
subject
to
an
annually
negotiated
budget,
in
some
cases
subject
to
a
cap
annually
adjusted
for
inflation,
and
generally
we
share
any
difference
in
costs
from
the
budgeted
amounts
with
our
customers.
Our
coke
sales
agreements
contain
pass-through
provisions
for
coal
and
coal
procurement
costs,
subject
to
meeting
contractual
coal-to-coke
yields.
To
the
extent
that
the
actual
coal-to-coke
yields
are
less
than
the
contractual
standard,
we
are
responsible
for
the
cost
of
the
excess
coal
used
in
the
cokemaking
process.
Conversely,
to
the
extent
our
actual
coal-to-coke
yields
are
higher
than
the
contractual
standard,
we
realize
gains.
The
reimbursement
of
pass-through
operating
and
coal
costs
from
these
coke
sales
agreements
are
considered
to
be
variable
consideration
components
included
in
the
cokemaking
sales
price.
The
return
of
capital
component
for
each
ton
of
coke
sold
to
the
customer
is
determined
at
the
time
the
coke
sales
agreement
is
signed
and
is
effective
for
the
term
of
each
sales
agreement.
This
component
of
our
coke
sales
prices
is
intended
to
provide
an
adequate
return
on
invested
capital
and
may
differ
based
on
investment
levels
and
other
considerations.
The
actual
return
on
invested
capital
at
any
facility
is
also
impacted
by
favorable
or
unfavorable
performance
on
pass-through
cost
items.
Revenues
are
recognized
when
performance
obligations
to
our
customers
are
satisfied
in
an
amount
that
reflects
the
consideration
that
we
expect
to
receive
in
exchange
for
the
coke.

Logistics

In
our
logistics
business,
handling
and/or
mixing
services
are
provided
to
steel,
coke
(including
some
of
our
and
SunCokes's
domestic
cokemaking

facilities),
electric
utility,
coal
producing
and
other
manufacturing
based
customers.
Materials
are
transported
in
numerous
ways,
including
rail,
truck,
barge
or
ship.
We
do
not
take
possession
of
materials
handled,
but
rather
act
as
intermediaries
between
our
customers
and
end
users,
deriving
our
revenues
from
services
provided
on
a
per
ton
basis.
The
handling
and
mixing
services
consist
primarily
of
two
performance
obligations,
unloading
and
loading
of
materials.
Our
logistics
business
has
long-term,
take-or-pay
agreements
requiring
us
to
handle
over
15
million
tons
annually.
The
take-or-pay
provisions
in
these
agreements
require
our
customers
to
purchase
such
handling
services
or
pay
the
contract
price
for
services
they
elect
not
to
take.
Estimated
take-or-pay
revenue
of
approximately
$365
million
from
all
of
our
long-term
logistics
contracts
is
expected
to
be
recognized
over
the
next
five
years
for
unsatisfied
or
partially
unsatisfied
performance
obligations
as
of
December
31,
2018
.
To
date,
our
customers
have
satisfied
their
obligations
under
these
agreements.
Included
with
these
long-term,
take-or-pay
arrangements
are
our
contracts
with
Murray
and
Foresight,
which
cover
10
million
tons
of
CMT's
annual
transloading
capacity
of
15
million
tons.
Revenues
in
our
logistics
business
are
recognized
when
the
customer
receives
the
benefits
of
the
services
provided,
in
an
amount
that
reflects
the
consideration
that
we
will
receive
in
exchange
for
those
services.
Billings
to
CMT
customers
for
take-or-pay
volume
shortfalls
based
on
pro-rata
volume
commitments
under
take-or-pay
contracts
that
are
in
excess
of
billings
earned
for
services
provided
are
recorded
as
contract
liabilities
and
characterized
as
deferred
revenue
on
the
Consolidated
Balance
Sheets.
Deferred
revenue
is
recognized
at
the
earliest
of
i)
when
the
performance
obligation
is
satisfied;
ii)
when
the
performance
obligation
has
expired,
based
on
the
terms
of
the
contract;
or
iii)
when
the
likelihood
that
the
customer
would
exercise
its
right
to
the
performance
obligation
becomes
remote.

Table
of
Contents

The
following
table
provides
changes
in
the
Partnership's
deferred
revenue:

Beginning
balance
at
December
31,
2017
and
2016,
respectively

Reclassification
of
the
beginning
contract
liabilities
to
revenue,
as
a
result
of
performance
obligation
satisfied

Billings
in
excess
of
services
performed,
not
recognized
as
revenue

Ending
balance
at
December
31,
2018
and
2017,
respectively

Energy

2018

2017

(Dollars in millions)

1.7
$

(1.4)

2.7

3.0
$

2.5

(2.1)

1.3

1.7

Our
energy
sales
are
made
pursuant
to
either
steam
or
energy
supply
and
purchase
agreements
or
is
sold
into
the
regional
power
market.
Our
cokemaking
ovens
utilize
efficient,
modern
heat
recovery
technology
designed
to
combust
the
coal’s
volatile
components
liberated
during
the
cokemaking
process
and
use
the
resulting
heat
to
create
steam
or
electricity
for
sale.
The
energy
provided
under
these
arrangements
result
in
transfer
of
control
over
time.
Revenues
are
recognized
as
energy
is
delivered
to
our
customers,
in
an
amount
based
on
the
terms
of
each
arrangement.

Disaggregated
Sales
and
Other
Operating
Revenue

The
following
table
provides
disaggregated
sales
and
other
operating
revenue
by
product
or
service,
excluding
intersegment
revenues:

Sales and other operating revenue:

Cokemaking

Energy

Logistics

Other

Sales
and
other
operating
revenue

Disaggregated
sales
and
other
operating
revenue
by
customer
is
discussed
in
Note
4
.

Years Ended December 31,

2018

2017

2016

(Dollars in millions)

720.6

49.7

114.4

7.4

892.1

686.9

52.7

102.6

3.4

845.6

623.6

53.7

96.3

6.1

779.7

Table
of
Contents

15. Business Segment Information

The
Partnership
derives
its
revenues
from
the
Domestic
Coke
and
Logistics
reportable
segments.
Domestic
Coke
operations
are
comprised
of
the
Haverhill,
Middletown
and
Granite
City
cokemaking
facilities,
which
use
similar
production
processes
to
produce
coke
and
to
recover
waste
heat
that
is
converted
to
steam
or
electricity.

Logistics
operations
are
comprised
of
CMT,
Lake
Terminal
and
KRT.
Handling
and
mixing
results
are
presented
in
the
Logistics
segment.

Corporate
and
other
expenses
that
can
be
identified
with
a
segment
have
been
included
in
determining
segment
results.
The
remainder
is
included
in

Corporate
and
Other.

The
following
table
includes
Adjusted
EBITDA,
which
is
the
measure
of
segment
profit
or
loss
and
liquidity
reported
to
the
chief
operating
decision

maker
for
purposes
of
allocating
resources
to
the
segments
and
assessing
their
performance:

Sales and other operating revenue:

Domestic
Coke

Logistics

Logistics
intersegment
sales

Elimination
of
intersegment
sales

Total
sales
and
other
operating
revenue

Adjusted EBITDA:

Domestic
Coke

Logistics

Corporate
and
Other

Total
Adjusted
EBITDA

Depreciation and amortization expense:
Domestic
Coke
(1)

Logistics

Total
depreciation
and
amortization
expense

Capital expenditures:

Domestic
Coke

Logistics

Total
capital
expenditures

Years Ended December 31,

2018

2017

2016

(Dollars in millions)

776.7
$

115.4

6.9

(6.9)

739.7
$

105.9

6.5

(6.5)

892.1
$

845.6
$

157.5
$

71.6

(16.6)

212.5
$

68.1
$

24.3

92.4
$

57.2
$

3.6

60.8
$

170.3
$

69.7

(15.3)

224.7
$

59.9
$

23.7

83.6
$

35.0
$

4.0

39.0
$

681.8

97.9

6.1

(6.1)

779.7

167.0

63.2

(17.2)

213.0

53.4

24.3

77.7

22.1

15.0

37.1

(1) We
revised
the
estimated
useful
lives
of
certain
assets
in
our
Domestic
Coke
segment,
primarily
as
a
result
of
plans
to
replace
major
components
of

certain
heat
recovery
steam
generators
with
upgraded
materials
and
design,
resulting
in
additional
depreciation
of
$9.2
million
,
or
$0.20
per
common
unit,
during
the
year
ended
December
31,
2018.

The
following
table
sets
forth
the
Partnership's
segment
assets:

Segment
assets:

Domestic
Coke

Logistics

Corporate
and
Other

Total Assets

December 31,

2018

2017

(Dollars in millions)

1,158.4
$

458.7

2.0

1,619.1
$

1,151.4

489.8

0.2

1,641.4

Table
of
Contents

The
Partnership
evaluates
the
performance
of
its
segments
based
on
segment
Adjusted
EBITDA,
which
represents
earnings
before
interest,
taxes,

depreciation
and
amortization
("EBITDA"),
adjusted
for
l
oss
(gain)
on
extinguishment
of
debt,
transaction
costs
related
to
the
Simplification
Transaction
and
changes
to
our
contingent
consideration
liability
related
to
our
acquisition
of
CMT
and
the
expiration
of
certain
acquired
contractual
obligations.
Adjusted
EBITDA
does
not
represent
and
should
not
be
considered
an
alternative
to
net
income
or
operating
income
under
GAAP
and
may
not
be
comparable
to
other
similarly
titled
measures
in
other
businesses.

Management
believes
Adjusted
EBITDA
is
an
important
measure
of
the
operating
performance
and
liquidity
of
the
Partnership's
net
assets
and
its
ability
to
incur
and
service
debt,
fund
capital
expenditures
and
make
distributions.
Adjusted
EBITDA
provides
useful
information
to
investors
because
it
highlights
trends
in
our
business
that
may
not
otherwise
be
apparent
when
relying
solely
on
GAAP
measures
and
because
it
eliminates
items
that
have
less
bearing
on
our
operating
performance
and
liquidity.
EBITDA
and
Adjusted
EBITDA
are
not
measures
calculated
in
accordance
with
GAAP,
and
they
should
not
be
considered
an
alternative
to
net
income,
operating
cash
flow
or
any
other
measure
of
financial
performance
presented
in
accordance
with
GAAP.
Set
forth
below
is
additional
discussion
of
the
limitations
of
Adjusted
EBITDA
as
an
analytical
tool.

Limitations.
Other
companies
may
calculate
Adjusted
EBITDA
differently
than
we
do,
limiting
its
usefulness
as
a
comparative
measure.
Adjusted
EBITDA
also
has
limitations
as
an
analytical
tool
and
should
not
be
considered
in
isolation
or
as
a
substitute
for
an
analysis
of
our
results
as
reported
under
GAAP.
Some
of
these
limitations
include
that
Adjusted
EBITDA
:

•

does
not
reflect
our
cash
expenditures,
or
future
requirements,
for
capital
expenditures
or
contractual
commitments
;

does
not
reflect
items
such
as
depreciation
and
amortization;

does
not
reflect
changes
in,
or
cash
requirements
for,
working
capital
needs;

does
not
reflect
our
interest
expense,
or
the
cash
requirements
necessary
to
service
interest
on
or
principal
payments
of
our
debt;

does
not
reflect
certain
other
non-cash
income
and
expenses;

excludes
income
taxes
that
may
represent
a
reduction
in
available
cash;
and

includes
net
income
attributable
to
noncontrolling
interests.

Table
of
Contents

Below
are
reconciliations
of
Adjusted
EBITDA
from
net
(loss)
income
and
net
cash
provided
by
operating
activities,
which
are
its
most
directly

comparable
financial
measures
calculated
and
presented
in
accordance
with
GAAP:

Net income (loss)

Add:

Depreciation
and
amortization
expense

Interest
expense,
net

Loss
(gain)
on
extinguishment
of
debt

Income
tax
(benefit)
expense
Contingent
consideration
adjustments
(1)

Transaction
Costs
Non-cash
reversal
of
acquired
contractual
obligations
(2)

Adjusted EBITDA (3)

Subtract:

Adjusted
EBITDA
attributable
to
noncontrolling
interest
(5)

Adjusted EBITDA attributable to SunCoke Energy Partners, L.P.

Years Ended December 31,

2018

2017

2016

(Dollars in millions)

59.4
$

(17.5)
$

121.4

92.4

59.4

—

(1.6)

2.5

0.4

—

83.6

56.4

20.0

83.9

(1.7)

—

212.5
$

224.7
$

3.1

209.4
$

3.4

221.3
$

Years Ended December 31,

2018

2017

2016

(Dollars in millions)

77.7

47.7

(25.0)

2.0

(10.1)

—

(0.7)

213.0

3.3

209.7

Net cash provided by operating activities

162.8
$

136.7
$

183.6

Add:

Cash
interest
paid,
net
of
capitalized
interest

Cash
taxes
paid

Changes
in
working
capital
Contingent
consideration
adjustments
(1)

Transaction
Costs
Non-cash
reversal
of
acquired
contractual
obligation
(2)

Other
adjustments
to
reconcile
cash
(used
in)
provided
by
operating
activities
to
Adjusted

EBITDA

Adjusted EBITDA

Subtract:

Adjusted
EBITDA
attributable
to
noncontrolling
interest
(3)

Adjusted EBITDA attributable to SunCoke Energy Partners, L.P.

56.9

2.9

(10.0)

2.5

0.4

—

(3.0)

212.5
$

3.1

209.4
$

64.5

1.4

19.0

(1.7)

—

4.8

224.7
$

3.4

221.3
$

49.0

1.5

(17.8)

(10.1)

—

(0.7)

7.5

213.0

3.3

209.7

(1) As
a
result
of
changes
in
the
fair
value
of
the
contingent
consideration
liability,
the
Partnership
recognized
expense
of
$2.5
million
in
2018
and
benefits
of

(2)

$1.7
million
and
$10.1
million
during
and
2017
and
2016,
respectively.
See
Note
13
.
In
association
with
the
acquisition
of
CMT,
we
assumed
certain
performance
obligations
under
existing
contracts
and
recorded
liabilities
related
to
such
obligations.
In
2016,
the
final
acquired
contractual
performance
obligations
expired
without
the
customer
requiring
performance.
Therefore,
the
Partnership
reversed
the
liability
as
we
no
longer
have
any
obligations
under
the
contracts.

(3) Reflects
net
income
attributable
to
noncontrolling
interest
adjusted
for
noncontrolling
interest's
share
of
interest,
taxes,
income,
and
depreciation
and

amortization.

Table
of
Contents

16. Selected Quarterly Data (unaudited)

Sales
and
other
operating
revenue
Gross
profit
(5)

Net
income
(loss)

Net
income
(loss)
attributable
to

SunCoke
Energy
Partners,
L.P.

Net
income
(loss)
per
common
unit

(basic
and
diluted)
(6)

Cash
distribution
per
unit
paid
during

period

2018

2017

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter (1)

First
Quarter (2)

Second
Quarter (3)

Third
Quarter

Fourth
Quarter (1)(4)

(Dollars in millions, except per unit amounts)

214.8
$

228.6
$

224.1
$

224.6
$

195.6
$

200.6
$

214.0
$

36.2
$

15.7
$

43.4
$

19.4
$

38.8
$

15.7
$

32.4
$

38.6
$

29.7
$

11.6
$

(131.7)
$

(12.5)
$

47.6
$

23.3
$

235.4

59.4

103.4

15.3
$

18.8
$

15.3
$

11.2
$

(129.3)
$

(12.9)
$

22.6
$

101.5

0.32
$

0.40
$

0.32
$

0.24
$

(2.77)
$

(0.30)
$

0.45
$

0.65

0.5940
$

0.4000
$

0.5940
$

0.5940

(1) The
Partnership
recognized
deferred
revenue
from
Logistics
take-or-pay
billings
for
minimum
volume
shortfalls
of
$16.4
million
into
revenue
in
the

fourth
quarter
of
2017.
As
a
result
of
the
increase
in
tons
handled
throughout
2018,
there
were
no
shortfalls
to
be
recognized
during
fourth
quarter.

(2) During
the
first
quarter
of
2017,
the
Partnership
recorded
$148.6
million
of
deferred
income
tax
expense
as
a
result
of
the
IRS
Final
Regulations
on

qualifying
income.
See
Note
6
.

(3) During
the
second
quarter
of
2017,
the
Partnership
incurred
$19.9
million
of
losses
in
connection
with
debt
refinancing.

(4) During
the
fourth
quarter
of
2017,
the
Partnership
recorded
$68.8
million
of
tax
benefits
as
a
result
of
the
new
Tax
Legislation.
See
Note
6
.

(5)
Gross
profit
equals
sales
and
other
operating
revenue
less
cost
of
products
sold
and
operating
expenses
and
depreciation
and
amortization.

(6) Net
income
per
common
unit
is
computed
independently
for
each
of
the
quarters
presented.
Therefore,
the
sum
of
quarterly
net
income
per
common
unit
information
may
not
equal
annual
net
income
per
common
unit.
The
deferred
tax
liabilities
recorded
in
the
first
quarter
of
2017
as
a
result
of
the
Final
Regulations
on
qualifying
income
were
revised
by
the
new
Tax
Legislation,
enacted
in
the
fourth
quarter
of
2017.
Our
full
year
net
loss
per
common
unit
calculation
was
impacted
as
a
result.

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.

Controls and Procedures

Management’s Evaluation of Disclosure Controls and Procedures

Our
management,
with
the
participation
of
our
principal
executive
officer
and
principal
financial
officer,
is
responsible
for
evaluating
the
effectiveness
of

our
disclosure
controls
and
procedures
(as
defined
in
Exchange
Act
Rules
13a-15(e)
and
15d-15(e)).
Our
disclosure
controls
and
procedures
are
designed
to
provide
reasonable
assurance
that
the
information
required
to
be
disclosed
by
us
in
reports
that
we
file
or
submit
under
the
Exchange
Act
is
accumulated
and
communicated
to
our
management,
including
our
principal
executive
officer
and
principal
financial
officer,
as
appropriate
to
allow
timely
decisions
regarding
required
disclosure
and
is
recorded,
processed,
summarized
and
reported
within
the
time
periods
specified
in
the
rules
and
forms
of
the
SEC.
Based
upon
that
evaluation,
our
principal
executive
officer
and
principal
financial
officer
concluded
that,
as
of
the
end
of
the
period
covered
by
this
report,
our
disclosure
controls
and
procedures
were
effective
at
the
reasonable
assurance
level.

Table
of
Contents

Management’s Report on Internal Control over Financial Reporting

The
management
of
our
general
partner,
with
the
participation
of
our
principal
executive
officer
and
principal
financial
officer,
is
responsible
for

establishing
and
maintaining
adequate
internal
control
over
our
financial
reporting,
as
such
term
is
defined
under
Exchange
Act
Rule
13a-15(f).
Our
internal
control
system
was
designed
to
provide
reasonable
assurance
to
the
management
of
our
general
partner
regarding
the
preparation
and
fair
presentation
of
published
financial
statements.

In
evaluating
the
effectiveness
of
our
internal
control
over
financial
reporting
as
of
December
31,
2018
,
the
management
of
our
general
partner
used
the

framework
set
forth
by
the
Committee
of
Sponsoring
Organizations
of
the
Treadway
Commission
in
Internal
Control
-Integrated
Framework
(2013).
Based
on
such
evaluation,
the
management
of
our
general
partner
concluded
that
our
internal
control
over
financial
reporting
was
effective
as
of
December
31,
2018
.

The
management
of
our
general
partner,
including
our
principal
executive
officer
and
principal
financial
officer,
does
not
expect
that
our
disclosure

controls
and
procedures
or
our
internal
controls
over
financial
reporting
will
prevent
all
errors
and
all
fraud.
A
control
system,
no
matter
how
well
conceived
and
operated,
can
provide
only
reasonable,
not
absolute,
assurance
that
the
objectives
of
the
control
system
are
met.
Further,
the
design
of
a
control
system
must
reflect
the
fact
that
there
are
resource
constraints,
and
the
benefits
of
controls
must
be
considered
relative
to
their
costs.
Because
of
the
inherent
limitations
in
all
control
systems,
no
evaluation
of
controls
can
provide
absolute
assurance
that
all
control
issues,
misstatements,
errors,
and
instances
of
fraud,
if
any,
within
our
partnership
have
been
or
will
be
prevented
or
detected.
These
inherent
limitations
include
the
realities
that
judgments
in
decision-making
can
be
faulty
and
that
breakdowns
can
occur
because
of
simple
error
or
mistake.
Controls
also
can
be
circumvented
by
the
individual
acts
of
some
persons,
by
collusion
of
two
or
more
people,
or
by
management
override
of
the
controls.
The
design
of
any
system
of
controls
is
based
in
part
on
certain
assumptions
about
the
likelihood
of
future
events,
and
there
can
be
no
assurance
that
any
design
will
succeed
in
achieving
its
stated
goals
under
all
potential
future
conditions.
Projections
of
any
evaluation
of
controls
effectiveness
to
future
periods
are
subject
to
risks
that
internal
controls
may
become
inadequate
as
a
result
of
changes
in
conditions,
or
through
the
deterioration
of
the
degree
of
compliance
with
policies
or
procedures.

KPMG
LLP,
our
independent
registered
public
accounting
firm,
issued
an
attestation
report
on
our
internal
control
over
financial
reporting,
which
is

contained
in
Item
8,
“Financial
Statements
and
Supplementary
Data.”

Changes in Internal Control over Financial Reporting

During
the
first
quarter
of
2018,
we
implemented
a
new
enterprise
resource
planning
("ERP")
system.
Accordingly,
we
modified
the
design
and
documentation
of
certain
internal
control
processes
and
procedures
relating
to
the
new
ERP
system
at
that
time.
Other
than
the
ERP
and
related
systems
implementation,
there
have
been
no
changes
in
the
Partnership's
internal
control
over
financial
reporting
that
materially
affected,
or
are
reasonably
likely
to
materially
affect,
our
internal
control
over
financial
reporting.

Item 9B.

Other Information

None.

Table
of
Contents

Item 10.

Directors, Executive Officers and Corporate Governance

Management of SunCoke Energy Partners, L.P.

PART III

We
are
managed
and
operated
by
the
Board
of
Directors
and
executive
officers
of
our
general
partner.
As
of
January
31,
2019,
SunCoke
owns,
directly
or

indirectly,
61.7
percent
of
our
outstanding
common
units
and
all
of
our
incentive
distribution
rights
("IDRs").
As
a
result
of
its
ownership
of
our
general
partner,
SunCoke
has
the
right
to
appoint
all
members
of
the
Board
of
Directors
of
our
general
partner,
including
the
independent
directors.
Our
unitholders
are
not
entitled
to
appoint
the
directors
of
our
general
partner
or
otherwise
directly
participate
in
our
management
or
operation.
Our
general
partner
owes
certain
duties
to
our
unitholders
as
well
as
a
fiduciary
duty
to
SunCoke.

SunCoke
indirectly
controls
our
general
partner
and
indirectly
owns
a
significant
limited
partner
interest
in
us.
All
of
our
general
partner’s
named
executive
officers
are
employed
as
executive
officers
of
SunCoke.
Our
general
partner’s
executive
officers
allocate
their
time
between
managing
our
business
and
affairs
and
those
of
SunCoke.
Such
executive
officers
devote
as
much
time
to
the
management
of
our
business
and
affairs
as
is
necessary
for
the
proper
conduct
of
our
business
and
affairs.
In
addition
to
rendering
services
to
us,
these
executive
officers
devoted
a
majority
of
their
professional
time
to
SunCoke
during
2018.
These
executives
participate
in
the
employee
benefit
plans
and
compensation
arrangements
of
SunCoke,
and
the
Compensation
Committee
of
SunCoke’s
Board
of
Directors
sets
the
components
of
their
compensation,
including
base
salary
and
annual
and
long-term
incentives.
We
have
no
control
over
this
compensation
determination
process.
Please
refer
to
SunCoke
Energy,
Inc.’s
2019
Annual
Meeting
Proxy
Statement
for
information
on
the
compensation
of
these
executive
officers.

Under
the
terms
of
our
omnibus
agreement
with
SunCoke,
we
do
not
pay
a
management
fee
or
other
compensation
in
connection
with
our
general
partner’s
management
of
our
business.
However,
we
reimburse
our
general
partner
and
its
affiliates
(including
SunCoke)
for
direct
costs
and
expenses
they
incur
and
payments
they
make
in
providing
general
and
administrative
services
for
our
benefit.
Corporate
and
other
costs
and
expenses
incurred
by
SunCoke
and
its
affiliates
that
are
directly
attributable
to
Partnership
entities
will
be
allocated
to
us.
A
portion
of
all
remaining
corporate
and
other
costs
and
expenses
incurred
by
SunCoke
and
its
affiliates
are
allocated
to
us,
based
on
SunCoke’s
estimate
of
the
proportionate
level
of
effort
attributable
to
our
operations.
SunCoke
allocates
these
corporate
and
other
costs
on
the
basis
of
the
costs
and
the
level
of
support
attributable
to
the
applicable
operating
facilities
for
each
function
performed
by
the
sponsor
(e.g.,
HR,
legal,
finance,
tax,
treasury,
communications,
engineering,
insurance,
etc.),
rather
than
on
the
basis
of
time
spent
by
individual
officers
acting
within
a
function.
The
estimated
cost
and
level
of
support
for
each
of
our
operating
facilities
is
based
on
a
weighted
average
of
certain
factors
determined
by
management
of
SunCoke,
including
the
type
of
operations
and
products
produced,
as
well
as
contract
and
business
complexity
at
each
facility.
Our
partnership
agreement
does
not
set
a
limit
on
the
amount
of
expenses
for
which
our
general
partner
and
its
affiliates
may
be
reimbursed.

Each
year,
our
general
partner
determines
the
aggregate
amount
to
be
reimbursed
to
SunCoke,
by
us,
taking
into
account
the
totality
of
services
performed

for
our
benefit
by
the
named
executive
officers
during
the
calendar
year.
The
amounts
reimbursed
to
SunCoke
are
not
calculated
with
regard
to
an
executive
officer's
time
spent
on
our
business
matters
versus
those
of
SunCoke.
There
is
no
specific
allocation
of
a
portion
of
a
shared
officer's
compensation
in
connection
with
services
rendered
on
our
behalf.
During
2018,
SunCoke
allocated
$27.2
million
of
expenses
in
the
aggregate
for
the
services
they
render
to
us.
See
Item
13,
“Certain
Relationships
and
Related
Transactions,
and
Director
Independence”
for
further
discussion
of
our
relationships
and
transactions
with
SunCoke
and
its
affiliates.

Table
of
Contents

Executive Officers and Directors of Our General Partner

Our
general
partner
has
seven
directors,
three
of
whom,
Messrs.
Bledsoe
and
Somerhalder
and
Ms.
Carnes;
meet
applicable
independence
and
experience

standards
established
by
the
NYSE
and
the
Exchange
Act.
The
NYSE
does
not
require
a
listed
publicly
traded
partnership,
such
as
ours,
to
have
a
majority
of
independent
directors
on
the
Board
of
Directors
of
its
general
partner
or
to
establish
a
compensation
committee
or
a
nominating
committee.
Directors
are
appointed
for
a
one-year
term
and
hold
office
until
their
successors
have
been
elected
or
qualified
or
until
the
earlier
of
their
death,
resignation,
removal
or
disqualification.
Executive
officers
serve
at
the
discretion
of
the
board.
There
are
no
family
relationships
among
any
of
our
directors
or
executive
officers.

The
following
table
shows
information
for
the
current
executive
officers
and
directors
of
our
general
partner:

Our Directors, Executive Officers and Other Key Executives

Name
Michael
G.
Rippey

Fay
West

Katherine
T.
Gates

P.
Michael
Hardesty

Allison
S.
Lausas

Gary
P.
Yeaw

Martha
Z.
Carnes

John
W.
Somerhalder,
II

Alvin
Bledsoe

Age
61

Position with Our General Partner

Chairman,
President
and
Chief
Executive
Officer

Senior
Vice
President,
Chief
Financial
Officer
and
Director

Senior
Vice
President,
General
Counsel,
Chief
Compliance
Officer
and
Director

Senior
Vice
President,
Commercial
Operations,
Business
Development,
Terminals,
and

International
Coke
and
Director

Vice
President,
Finance
and
Controller

Senior
Vice
President,
Human
Resources

Director

Michael
G.
Rippey.
Mr.
Rippey
was
named
President
and
Chief
Executive
Officer
and
appointed
as
Chairman
of
the
Board
of
our
general
partner
on

December
1,
2017.
Also
on
December
1,
2017,
Mr.
Rippey
was
appointed
President
and
Chief
Executive
Officer
of
SunCoke
Energy,
Inc.
Prior
to
joining
SunCoke
Energy,
Inc.,
he
served
as
Senior
Advisor
to
Nippon
Steel
&
Sumitomo
Metal
Corporation
(a
leading
global
steelmaker),
since
2015.
From
2014
to
2015,
he
served
as
Chairman
of
the
Board
of
ArcelorMittal
USA
(a
major
domestic
steel
manufacturer),
and
from
August
2006
through
October
2014,
he
was
ArcelorMittal
USA’s
President
and
Chief
Executive
Officer.
Mr.
Rippey
currently
serves
on
the
Board
of
Directors
of
Olympic
Steel,
Inc.
(NASDAQ:
ZEUS),
a
major
steel
service
center
headquartered
in
Ohio,
where
he
is
a
member
of
the
Nominating
Committee,
and
serves
as
Chair
of
the
Audit
and
Compliance
Committee.
Mr.
Rippey
is
an
accomplished
senior
executive
with
a
wealth
of
finance,
sales,
operations
and
management
experience
in
the
metals
industry.
He
has
successfully
dealt
with
dynamic
and
challenging
business
environments
and,
as
a
past
executive
officer
and
Chairman
of
ArcelorMittal
USA,
he
has
an
intimate
knowledge
and
understanding
of
the
challenges
and
opportunities
facing
SunCoke
as
it
continues
to
serve
the
steel
industry.

Fay
West
.
Ms.
West
was
appointed
as
Senior
Vice
President
and
Chief
Financial
Officer
of
both
our
general
partner
and
of
SunCoke
in
October
2014

and,
at
that
time,
was
also
appointed
to
the
Board
of
Directors
of
our
general
partner.
Prior
to
that
time,
she
served
as
Vice
President
and
Controller
of
our
general
partner
since
July
2012,
and
as
Vice
President
and
Controller
of
SunCoke
since
February
2011.
Prior
to
joining
SunCoke,
Ms.
West
was
Assistant
Controller
at
United
Continental
Holdings,
Inc.
(an
airline
holding
company)
from
April
2010
to
January
2011.
She
was
Vice
President,
Accounting
and
Financial
Reporting
for
PepsiAmericas,
Inc.
(a
manufacturer
and
distributor
of
beverage
products)
from
December
2006
through
March
2010
and
Director
of
Financial
Reporting
from
December
2005
to
December
2006.
Ms.
West
is
a
director
of
Quaker
Chemical
Corporation
(a
leading
manufacturer
and
supplier
of
process
fluids
and
specialty
chemicals)
where
she
also
serves
as
a
member
of
its
Audit
Committee.
Ms.
West’s
financial
and
accounting
expertise
and
her
broad
industry
and
management
experience,
as
well
as
her
experience
with
SunCoke,
provides
the
board
with
valuable
expertise
in
senior
level
strategic
planning
and
financial
disclosure
and
reporting
matters.

Table
of
Contents

Katherine
Gates.
Ms.
Gates
was
appointed
Senior
Vice
President,
General
Counsel
and
Chief
Compliance
Officer
of
both
our
general
partner
and
of

SunCoke
effective
October
22,
2015.
Ms.
Gates
joined
SunCoke
in
February
2013,
as
Senior
Health,
Environment
and
Safety
(“
HES
”)
Counsel.
She
was
promoted
to
Vice
President
and
Assistant
General
Counsel
of
both
our
general
partner
and
of
SunCoke
in
July
2014.
Ms.
Gates
began
her
legal
career
in
private
practice
as
a
Partner
at
the
law
firm
of
Beveridge
&
Diamond,
P.C.
She
served
on
the
firm’s
Management
committee,
where
she
addressed
budget,
compensation,
commercial
and
other
issues.
Ms.
Gates
also
co-chaired
the
Civil
Litigation
Section
of
the
firm’s
Litigation
Practice
Group.
She
also
clerked
for
the
U.S.
Department
of
Justice.
We
believe
that
Ms.
Gates’
legal
knowledge
and
skill,
as
well
as
her
experience
with
SunCoke’s
operations,
provides
the
Board
of
Directors
with
valuable
expertise
regarding
senior
level
strategic
planning
and
relevant
legal
matters,
including
those
related
to
corporate
governance,
litigation,
health,
environment,
safety,
mergers,
acquisitions,
compliance
and
commercial
matters.

P.
Michael
Hardesty.
Mr.
Hardesty
was
appointed
Senior
Vice
President,
Commercial
Operations,
Business
Development,
Terminals
and
International

Coke
of
SunCoke
effective
October
1,
2015.
At
that
time,
he
also
was
appointed
as
a
Director
of
our
general
partner.
Mr.
Hardesty
has
been
a
Senior
Vice
President
of
our
general
partner
since
joining
SunCoke
in
2011
as
its
Senior
Vice
President,
Sales
and
Commercial
Operations.
He
has
more
than
30
years
of
experience
in
the
mining
industry.
Before
joining
SunCoke,
Mr.
Hardesty
served
as
Senior
Vice
President
for
International
Coal
Group,
Inc.
(“
ICG
”),
where
he
was
responsible
for
leading
the
sales
and
marketing
functions
and
was
a
key
member
of
the
executive
management
team.
Prior
to
ICG,
Mr.
Hardesty
served
as
Vice
President
of
Commercial
Optimization
at
Arch
Coal,
where
he
developed
and
executed
trade
strategies,
optimized
production
output
and
directed
coal
purchasing
activities.
He
is
a
past
board
member
and
Secretary-Treasurer
of
the
Putnam
County
Development
Authority
in
West
Virginia.
We
believe
that
Mr.
Hardesty’s
extensive
industry
experience,
as
well
as
his
experience
with
SunCoke,
provides
the
Board
of
Directors
with
valuable
expertise
in
commercial
operations,
marketing
and
logistics.
Mr.
Hardesty
also
possesses
health,
environment
and
safety
oversight
experience
by
virtue
of
his
oversight
experience
as
a
senior-level
executive
at
ICG.

Allison
S.
Lausas
.
Ms.
Lausas
was
appointed
Vice
President,
Finance
and
Controller
of
both
our
general
partner
and
of
SunCoke
on
May
3,
2018.
Prior
to

that
from
October
2014
to
May
2018,
Ms.
Lausas
was
Vice
President
and
Controller
of
both
Companies.
Ms.
Lausas
joined
SunCoke
in
2011
and
most
recently
held
the
role
of
Assistant
Controller.
Prior
to
joining
SunCoke
Energy,
Inc.,
she
worked
as
an
auditor
at
KPMG,
LLP,
an
audit,
advisory
and
tax
services
firm,
from
2002
to
2011
where
she
served
both
public
and
private
corporations
in
the
consumer
and
industrial
markets.

Gary
P.
Yeaw.
Mr.
Yeaw
was
appointed
Senior
Vice
President,
Human
Resources
of
SunCoke
on
November
1,
2015
and
also
was
appointed
as
Senior

Vice
President
of
our
general
partner
at
that
time.
Prior
to
that,
he
was
Vice
President,
Human
Resources
of
SunCoke.
Mr.
Yeaw
leads
the
human
resources
function
at
SunCoke,
and
is
responsible
for
key
organizational
activities.
Prior
to
joining
SunCoke,
he
was
Executive
Vice
President,
Human
Resources
and
Communications
for
Chemtura
Corporation.
Mr.
Yeaw
also
served
as
Vice
President,
Human
Resources
for
American
Standard
Companies,
as
well
as
Vice
President,
Human
Resources
Operational
Excellence
in
charge
of
global
benefit
programs,
labor
relations,
HR
systems
and
employee
services.
Mr.
Yeaw
holds
professional
designations
as
a
Senior
Human
Resources
Professional,
Certified
Compensation
Professional
and
was
a
charter
member
of
the
International
Society
of
Employee
Benefits
Specialists.

Martha
Z.
Carnes
.
Ms.
Carnes
was
appointed
to
the
Board
of
Directors
of
our
general
partner
effective
September
1,
2017.
From
1982
until
her
retirement
from
the
firm
in
June
2016,
Ms.
Carnes
served
in
various
senior
roles
at
PricewaterhouseCoopers,
or
PwC
(an
international
accounting
firm),
including
as:
(i)
Assurance
Partner
serving
large,
publicly
traded
companies
in
the
energy
industry;
(ii)
Managing
Partner
of
PwC’s
Houston,
Texas
office;
and
(iii)
PwC's
Energy
and
Mining
leader
for
the
United
States,
where
she
led
the
firm's
energy
and
mining
assurance,
tax
and
advisory
practices.
Ms.
Carnes
currently
serves
as
a
director
on
the
Supervisory
Board
of
Core
Laboratories
N.V.
[NYSE:
CLB],
a
Netherlands
company
(one
of
the
world’s
largest
providers
of
reservoir
description
and
production
enhancement
services
to
the
oil
and
gas
industry),
where
she
is
Chairman
of
the
Audit
Committee.
She
is
also
a
director
of
Matrix
Service
Company
[NASDAQ:
MTRX]
(a
provider
of
design,
engineering,
construction,
repair
and
maintenance
services
to
industrial
and
energy
clients
in
North
America),
where
she
Chairs
the
Audit
Committee
and
serves
on
the
Compensation,
and
Nominating
and
Corporate
Governance
committees.
Ms.
Carnes
is
an
experienced
finance
and
public
accounting
executive,
having
spent
her
entire
34-year
career
with
PwC.
By
virtue
of
her
experience,
Ms.
Carnes
possesses
strategic
planning,
managerial
and
leadership
expertise,
having
led
the
design
and
execution
of
market
and
sector
strategies,
business
development,
compensation,
professional
development,
succession
planning,
and
client
satisfaction
initiatives
for
clients
in
the
mining,
utilities
and
energy
industries.
In
addition,
Ms.
Carnes
brings
vast
experience
with
capital
markets
and
financing
activities,
having
served
as
lead
audit
partner
on
some
of
the
largest
merger
and
acquisition
transactions
completed
in
the
energy
sector.

Table
of
Contents

John
W.
Somerhalder,
II.
Mr.
Somerhalder
was
appointed
to
the
Board
of
Directors
of
our
general
partner
effective
September
1,
2017.
From
February
2017
to
September
2017,
he
served
as
the
Interim
President
and
Chief
Executive
Officer
of
privately
held
Colonial
Pipeline
Company
(one
of
the
nation’s
largest
refined
products
pipeline
companies).
He
was
Chairman
and
Chief
Executive
Officer
of
AGL
Resources
Inc.
(a
former
publicly
traded
energy
services
holding
company
acquired
by
Southern
Company,
one
of
the
nation's
largest
natural
gas-distributors)
from
May
2015
through
December
2015.
From
November
2007
to
May
2015,
he
was
Chairman,
President
and
Chief
Executive
Officer,
and
from
March
2006
to
November
2007,
he
was
President
and
Chief
Executive
Officer
of
AGL
Resources
Inc.
Prior
to
that,
Mr.
Somerhalder
served
as
Executive
Vice
President
of
El
Paso
Corporation
(a
natural
gas
and
energy
products
provider),
including,
from
2000
to
May
2005.
Since
2013,
Mr.
Somerhalder
has
served
as
a
director
of
Crestwood
Equity
Partners
(from
2010
to
2013
as
a
director
of
Crestwood
Gas
Services,
LLC
and
from
2007
to
2010
as
a
director
of
Quicksilver
Gas
Services,
LLC),
and
since
October
2016,
Mr.
Somerhalder
has
served
as
a
director
of
CenterPoint
Energy,
Inc.
(a
major
publicly
traded
electric
and
natural
gas
utility).
Mr.
Somerhalder
also
is
a
past
Chairman
of
the
American
Gas
Association
and
the
Interstate
Natural
Gas
Association
of
America.
With
over
four
decades
in
the
energy
industry,
Mr.
Somerhalder
is
a
senior-level
executive
with
managerial
and
leadership
expertise,
and
experience
in
general
operations,
strategic
planning,
business
development,
marketing
and
corporate
restructuring
(including
mergers
and
acquisitions).
In
addition,
Mr.
Somerhalder
brings
extensive
knowledge
of
the
energy
industry,
and
terminalling
and
logistics
businesses
and
he
has
had
extensive
dealings
with
governmental
and
other
regulatory
agencies
in
multiple
jurisdictions.

Alvin
Bledsoe
.
Mr.
Bledsoe
was
appointed
as
a
director
of
general
partner
in
September
2017,
and
since
June
2011,
he
also
has
been
a
director
of
our
sponsor,
SunCoke
Energy,
Inc.
From
1972
until
his
retirement
from
the
firm
in
2005,
Mr.
Bledsoe
served
in
various
senior
roles
at
PricewaterhouseCoopers
LLP,
or
PwC
(an
international
accounting
firm).
In
2007,
he
joined
the
Board
of
Directors
of
Crestwood
Gas
Services
GP
LLC,
the
general
partner
of
Crestwood
Midstream
Partners
LP
(a
natural
gas
and
crude
oil
logistics
master
limited
partnership).
Upon
the
October
2013
merger
and
subsequent
related
corporate
restructuring
between
Crestwood
Midstream
Partners
LP,
Inergy,
L.P.
and
Inergy
Midstream,
L.P.,
Mr.
Bledsoe
was
appointed
to
the
Boards
of
Crestwood
Midstream
GP
LLC,
the
general
partner
of
Crestwood
Midstream
Partners
LP
and
Crestwood
Equity
GP
LLC,
the
general
partner
of
Crestwood
Equity
Partners
LP
(a
natural
gas
and
crude
oil
logistics
master
limited
partnership
holding
company),
where
he
chaired
the
Audit
Committees
of
both
companies.
In
2015,
Crestwood
Equity
Partners
L.P.
acquired
Crestwood
Midstream
Partners
L.P.
and
eliminated
the
need
for
a
separate
Board
of
Directors
at
Crestwood
Midstream
GP
LLC.
Following
this
acquisition,
Mr.
Bledsoe
is
a
director
of
Crestwood
Equity
GP
LLC,
and
chair
its
Audit
Committee.
Mr.
Bledsoe
is
an
experienced
finance
and
public
accounting
executive,
having
spent
his
entire
33-year
career
with
PwC.
By
virtue
of
his
experience,
Mr.
Bledsoe
is
knowledgeable
about
finance,
merger
and
acquisition
transactions
and
major
cost
restructurings
and
possesses
knowledge
of
the
mining,
utilities
and
energy
industries.
In
addition,
he
brings
relevant
industry
expertise,
having
served
clients
within
these
industry
sectors
and
having
served
as
the
global
leader
for
PwC’s
Energy,
Mining
and
Utilities
Industries
Assurance
and
Business
Advisory
Services
Group.
While
at
PwC,
Mr.
Bledsoe
also
gained
experience
working
with
boards
of
directors
by
interfacing
with
the
boards
of
directors
of
his
clients.

Director Independence

The
Board
of
Directors
of
our
general
partner
has
determined
that
each
of
Messrs.
Bledsoe
and
Somerhalder
and
Ms.
Carnes
are
independent
as
defined

under
applicable
independence
standards
established
by
the
NYSE
and
the
Exchange
Act.
In
evaluating
director
independence
with
respect
to
Messrs.
Bledsoe
and
Somerhalder
and
Ms.
Carnes,
the
Board
of
Directors
of
our
general
partner
assessed
whether
each
of
them
possesses
the
integrity,
judgment,
knowledge,
experience,
skill
and
expertise
that
are
likely
to
enhance
the
board’s
ability
to
manage
and
direct
our
affairs
and
business,
including,
when
applicable,
to
enhance
the
ability
of
committees
of
the
board
to
fulfill
their
duties.

Board Meetings; Committees of the Board of Directors

The
Board
of
Directors
of
our
general
partner
has
an
audit
committee
and
a
conflicts
committee.
The
Board
of
Directors
of
our
general
partner
does
not

have
a
compensation
committee,
but
the
Board
of
Directors
of
our
general
partner
approves
equity
grants.
No
grants
of
Partnership
equity
were
awarded
to
executive
officers
during
2018.
The
Board
of
Directors
of
our
general
partner
held
six
regular
meetings
in
fiscal
2018.
Each
director
who
served
in
fiscal
2018
attended
at
least
75
percent
of
the
aggregate
of
the
total
number
of
meetings
of
the
Board
and
Committees
on
which
he
or
she
served
during
the
periods
that
he
or
she
served
in
fiscal
2018.

Table
of
Contents

Audit Committee

The
audit
committee
of
our
general
partner
has
been
established
in
accordance
with
Section
3(a)(58)(A)
of
the
Exchange
Act,
and
consists
of
Messrs.
Bledsoe
and
Somerhalder
and
Ms.
Carnes,
all
of
whom
meet
the
independence
and
experience
standards
established
by
the
NYSE
and
the
Exchange
Act.
The
audit
committee
is
chaired
by
Mr.
Bledsoe.
The
Board
of
Directors
of
our
general
partner
has
determined
that
Messrs.
Bledsoe
and
Somerhalder
and
Ms.
Carnes
are
“audit
committee
financial
experts”
within
the
meaning
of
the
SEC
rules.
The
audit
committee
operates
pursuant
to
a
written
charter,
a
copy
of
which
is
available
on
our
website
at
www.suncoke.com
.
The
audit
committee
assists
the
Board
of
Directors
in
its
oversight
of
the
integrity
of
our
financial
statements
and
our
compliance
with
legal
and
regulatory
requirements
and
partnership
policies
and
controls.
The
audit
committee
has
the
sole
authority
to
(1)
retain
and
terminate
our
independent
registered
public
accounting
firm,
(2)
approve
all
auditing
services
and
related
fees
and
the
terms
thereof
performed
by
our
independent
registered
public
accounting
firm,
and
(3)
pre-approve
any
non-audit
services
and
tax
services
to
be
rendered
by
our
independent
registered
public
accounting
firm,
(4)
oversee
and
monitor
the
Partnership’s
internal
audit
function
and
independent
auditors,
and
(5)
monitor
compliance
with
legal
and
regulatory
requirements,
including
our
Code
of
Business
Conduct
and
Ethics.
The
audit
committee
is
also
responsible
for
confirming
the
independence
and
objectivity
of
our
independent
registered
public
accounting
firm.
Our
independent
registered
public
accounting
firm
has
unrestricted
access
to
the
audit
committee
and
our
management,
as
necessary.
The
audit
committee
met
seven
times
in
fiscal
2018.

Conflicts Committee

Mr.
Somerhalder
and
Ms.
Carnes
serve
on
the
conflicts
committee
to
review
specific
matters
that
the
board
believes
may
involve
conflicts
of
interest
and

determines
to
submit
to
the
conflicts
committee
for
review.
The
conflicts
committee
is
chaired
by
Mr.
Somerhalder.
The
conflicts
committee
determines
if
the
resolution
of
the
conflict
of
interest
is
in
our
best
interest.
The
members
of
the
conflicts
committee
may
not
be
officers
or
employees
of
our
general
partner
or
directors,
officers
or
employees
of
its
affiliates,
including
SunCoke,
and
must
meet
the
independence
standards
established
by
the
NYSE
and
the
Exchange
Act
to
serve
on
an
audit
committee
of
a
Board
of
Directors,
along
with
other
requirements
in
our
partnership
agreement.
Under
our
partnership
agreement,
any
matters
approved
by
the
conflicts
committee
(including,
but
not
limited
to,
the
recently
announced
Simplification
Transaction)
will
be
conclusively
deemed
to
be
in
our
best
interest,
approved
by
all
of
our
partners
and
not
a
breach
by
our
general
partner
of
any
duties
it
may
owe
us
or
our
unitholders.

Executive Sessions of Non-Management Directors

The
Board
of
Directors
of
our
general
partner
holds
regular
executive
sessions
in
which
the
three
independent
directors
meet
without
any
members
of

management
present.
The
purpose
of
these
executive
sessions
is
to
promote
open
and
candid
discussion
among
the
independent
directors.
The
rules
of
the
NYSE
require
that
one
of
the
independent
directors
must
preside
over
each
executive
session,
and
the
role
of
presiding
director
is
rotated
among
each
of
the
independent
directors.

Procedures for Contacting the Board of Directors

A
means
for
interested
parties
to
contact
the
Board
of
Directors
(including
the
independent
directors
as
a
group)
directly
has
been
established
in
the
general
partner’s
Governance
Guidelines,
published
on
our
website
at
www.suncoke.com
.
Information
may
be
submitted
confidentially
and
anonymously,
although
we
may
be
obligated
by
law
to
disclose
the
information
or
identity
of
the
person
providing
the
information
in
connection
with
government
or
private
legal
actions
and
in
certain
other
circumstances.

Code of Ethics

We
have
adopted
a
Code
of
Business
Conduct
and
Ethics
that
applies
to
all
of
our
officers,
directors
and
employees.
An
electronic
copy
of
the
code
is
available
on
our
website
at
www.suncoke.com
.
For
a
discussion
of
other
corporate
governance
materials
posted
on
our
website,
see
“Part
I.
Item
1.
Business.”

Section-16(a) Beneficial Ownership Reporting Compliance

Section
16(a)
of
the
Securities
Exchange
Act
of
1934
requires
the
directors
and
executive
officers
of
our
general
partner,
as
well
as
persons
who
own

more
than
ten
percent
of
the
common
units
representing
limited
partnership
interests
in
us,
to
file
reports
of
ownership
and
changes
of
ownership
on
Forms
3,
4
and
5
with
the
Securities
and
Exchange
Commission,
or
SEC.
Based
upon
our
review
of
the
filings
made
with
the
SEC
and
representations
made
by
our
directors,
executive
officers
and
>10%
holders,
we
believe
that
our
general
partner’s
executive
officers
and
directors,
and
our
affiliated
>10%
holders,
timely
filed
all
reports
required
under
Section
16(a)
of
the
Securities
Exchange
Act
during
the
fiscal
year
ended
December
31,
2018.

Table
of
Contents

Item 11.

Executive Compensation

Compensation Discussion and Analysis

We
are
managed
by
the
executive
officers
of
our
general
partner
who
are
also
executive
officers
of,
and
are
employed
by,
SunCoke
and
they
participate
in

the
employee
benefit
plans
and
compensation
arrangements
of
SunCoke.
Neither
we
nor
our
general
partner
have
a
compensation
committee.
The
executive
officers
of
our
general
partner
are
compensated
directly
by
SunCoke.
All
decisions
as
to
the
compensation
of
the
executive
officers
of
our
general
partner
who
are
involved
in
our
management
are
made
by
the
Compensation
Committee
of
SunCoke.
Therefore,
we
do
not
have
any
policies
or
programs
relating
to
compensation
of
the
executive
officers
of
our
general
partner
and
we
make
no
decisions
relating
to
such
compensation.
We
have
no
control
over
this
compensation
determination
process.
Other
than
any
awards
that
may
be
granted
in
the
future
under
our
Long-Term
Incentive
Plan,
the
compensation
of
our
general
partner’s
executive
officers
currently
is,
and
in
the
future,
will
be,
set
by
SunCoke.
The
executive
officers
of
our
general
partner
will
continue
to
participate
in
SunCoke’s
employee
benefit
plans
and
arrangements,
including
any
SunCoke
plans
that
may
be
established
in
the
future.
Pursuant
to
the
terms
of
our
omnibus
agreement
with
SunCoke,
we
reimburse
SunCoke
for
a
portion
of
SunCoke’s
compensation
expense
related
to
our
general
partner’s
executive
officers
(which
expenses
include
the
share
of
the
compensation
paid
to
the
executive
officers
of
our
general
partner
attributable
to
the
time
they
spend
managing
out
business).
See
“Item
10,
Directors,
Executive
Officers
and
Corporate
Governance-Management
of
SunCoke
Energy
Partners,
L.P.”
for
information
regarding
the
omnibus
agreement
and
allocation
of
expenses
between
the
entities
that
share
the
services
of
these
executives.
None
of
the
executive
officers
of
our
general
partner
have
employment
agreements
with
us
or
are
otherwise
specifically
compensated
by
us
for
their
service
as
an
executive
officer
of
our
general
partner.

A
full
discussion
of
the
policies
and
programs
of
the
Compensation
Committee
of
SunCoke
will
be
set
forth
in
the
proxy
statement
for
SunCoke’s
2019
annual
meeting
of
stockholders
which
will
be
available
upon
its
filing
on
the
SEC’s
website
at
www.sec.gov
and
on
SunCoke’s
website
at
www.suncoke.com
at
the
“Investors
-
Financial
Reports
-
Annual
Report
&
Proxy”
tab.
SunCoke’s
2019
Proxy
Statement
also
will
be
available
free
of
charge
from
the
Corporate
Secretary
of
our
general
partner.

Table
of
Contents

Summary Compensation Table

The
following
table
sets
forth
certain
information
with
respect
to
SunCoke’s
compensation
of
our
general
partner’s
named
executive
officers
(NEOs),
consisting
of:
(a)
our
principal
executive
officer;
(b)
our
principal
financial
officer;
and
(c)
the
three
most
highly
compensated
executive
officers
(other
than
the
principal
executive
officer
and
principal
financial
officer)
who
were
serving
as
executive
officers
at
the
end
of
2018.
The
table
summarizes
the
compensation
attributable
to
services
performed
for
us
by
our
general
partner’s
NEOs
during
fiscal
years
2016,
2017
and
2018
but
determined
and
paid
by
SunCoke.
The
amounts
reported
in
the
table
below
were
calculated
based
upon
an
estimate
of
the
portion
of
each
NEO’s
total
compensation
paid
by
SunCoke
which
was
reimbursed
by
us
pursuant
to
the
terms
of
the
omnibus
agreement.
Further
information
regarding
the
compensation
of
our
general
partner’s
NEOs,
who
also
are
named
executive
officers
of
SunCoke,
will
be
set
forth
in
SunCoke’s
2019
Proxy
Statement.
Compensation
amounts
set
forth
in
SunCoke’s
2019
Proxy
Statement
will
include
all
compensation
paid
by
SunCoke,
including
the
amounts
shown
in
the
table
below,
which
are
attributable
to
services
performed
for
us.

Name and Principal Position (1) Year
2018

Michael
G.
Rippey
Chairman
&
CEO

Salary
$408,963

Bonus
$—

2017

2018

2017

2016

2018

2017

2016

2018

2017

2016

2018

2017

2016

33,032

431,079

422,080

384,198

235,460

225,749

215,020

370,935

355,637

301,253

125,093

119,799

—

Fay
West
SVP
&
CFO

P.
Michael
Hardesty
SVP,
Commercial
Ops.,
Bus.
Dev.
&
Terminals

Katherine
T.
Gates

SVP,
Gen.
Counsel
&
Chief
Compliance
Officer

Gary
P.
Yeaw
SVP,
Human
Resources

NOTES TO TABLE :

Stock Awards (2) Option Awards

(3)

Nonequity Incentive
Plan Compensation (4)

Changes in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings (5)

All other
Compensation (6)

$—

925,201

286,230

173,218

244,940

168,888

95,391

134,896

168,888

119,238

100,579

124,999

78,446

110,932

$—

209,199

67,361

43,301

32,919

39,743

23,847

18,129

39,743

29,809

13,517

29,417

19,608

14,908

$482,168

$—

$20,133

—

337,922

512,067

528,348

188,376

239,644

258,734

255,130

305,616

274,056

69,708

94,852

102,967

—

75,466

80,202

17,706

68,104

69,861

40,288

92,029

90,657

51,655

17,622

18,609

6,773

Total
$911,264

1,167,432

1,198,058

1,230,868

1,208,111

700,571

654,492

667,067

926,725

900,957

741,060

366,839

336,608

355,379

(1) Name
and
Principal
Position
.
Each
of
our
NEOs
split
their
professional
time
between
SunCoke
and
us,
and
all
compensation
paid
to
them
is
determined
and
paid
by
SunCoke.
In
accordance
with
SEC
rules,
a
portion
of
the
total
compensation
paid
by
SunCoke
to
the
NEOs
is
allocated
to
the
services
performed
for
us,
based
on
an
estimate
of
the
portion
of
each
NEO’s
compensation
which
was
reimbursed
by
us
to
SunCoke
pursuant
to
the
terms
of
the
omnibus
agreement,
and
which
we
believe
accurately
reflects
the
amount
of
compensation
each
NEO
was
paid
for
the
services
provided
to
us.
For
2016,
the
applicable
allocation
percentage
was
approximately
56
percent,
for
2017
the
applicable
allocation
percentage
was
59
percent
and
for
2018
the
applicable
allocation
percentage
was
approximately
62
percent.The
total
compensation
paid
by
SunCoke
to
the
NEOs
in
2016,
2017
and
2018,
as
well
as
a
discussion
of
how
their
compensation
was
determined,
is
disclosed
in
SunCoke’
2019
Annual
Meeting
Proxy
Statement.

(2) Stock
Awards
.
The
NEOs
do
not
receive
any
equity
awards
from
us.
Equity
awards
were
granted
to
the
NEOs
pursuant
to
the
terms
of
the
SunCoke
Energy,
Inc.
Long-Term
Performance
Enhancement
Plan
(“
LTPEP
”),
and
such
awards
include
time-based
restricted
common
stock
units
and
performance-based
common
stock
units
(RSUs
and
PSUs,
respectively)
of
SunCoke.
The
amounts
shown
in
the
table
are
the
grant
date
fair
value
for
the
portion
of
such
awards
attributable
to
us,
computed
in
accordance
with
FASB
ASC
Topic
718.
The
assumptions
used
by
SunCoke
to
determine
the
grant
date
fair
value
of
these
equity
awards
can
be
found
in
SunCoke’s
Annual
Report
on
Form
10-K
for
the
year-ended
December
31,
2018.
For
each
NEO,
the
number
and
value
of
outstanding
SunCoke
equity
awards
(including
unvested
RSUs
and
PSUs)
at
year-end
is
reported
in
SunCoke’s
2019
Annual
Meeting
Proxy
Statement.
PSUs
awarded
under
the
LTPEP
are
subject
to
three-year
“cliff”
vesting
and
are
settled
in
shares
of

Table
of
Contents

SunCoke
common
stock,
with
eventual
payout
ranging
from
zero
to
250%
of
target,
depending
upon
the
level
of
attainment
of
specified
pre-determined
performance
goals
and
objectives
for
SunCoke.
The
value
of
these
performance-based
awards
at
grant
date
was
calculated
assuming
that
the
highest
level
of
performance
conditions
will
be
achieved.

(3) Option
Awards
.
The
NEO's
do
not
receive
any
option
awards
from
us.
Nonqualified
stock
option
awards
and
Nonqualified
performance
stock
options
awards
were
granted
under
the
terms
of
pursuant
to
the
terms
of
the
SunCoke
LTPEP.
Amounts
shown
are
the
grant
date
fair
value
of
SunCoke
stock
option
awards
attributable
to
us
computed
in
accordance
with
FASB
ASC
Topic
718,
excluding
the
effect
of
estimated
forfeitures.
The
assumptions
used
by
SunCoke
to
determine
the
grant
date
fair
value
of
the
option
awards
can
be
found
in
Note
15
Share-Based
Compensation,
in
SunCoke’s
Annual
Report
on
Form
10-K
for
the
year-ended
December
31,
2018.
Once
vested,
the
options
may
be
exercised
to
acquire
shares
of
SunCoke’s
common
stock.
For
each
NEO,
the
number
and
value
of
outstanding
SunCoke
equity
awards
(including
unexercised
stock
options)
at
year-end
is
reported
in
SunCoke’s
2019
Annual
Meeting
Proxy
Statement.

(4) Non
-Equity
Incentive
Plan
.
SunCoke
provides
a
performance-based
annual
cash
incentive
plan
(the
“AIP”),
in
which
our
NEOs
participate.
Payments
under
the
AIP
are
based
upon
the
levels
of
attainment
of
certain
pre-determined
financial
and
operating
goals
of
SunCoke.
The
AIP
works
in
conjunction
with
SunCoke’s
Senior
Executive
Incentive
Plan,
or
SEIP,
which
acts
as
an
overlay
to
the
AIP
and
sets
a
performance-based
ceiling
on
the
amounts
paid
under
the
AIP.

(5) Change
in
Pension
Value
and
Nonqualified
Deferred
Compensation
Earnings
.
SunCoke
does
not
maintain
any
defined
benefit
pension
plan,
or
supplemental
executive
retirement
plan
for
its
named
executive
officers,
including
our
NEOs.
However,
our
NEOs
do
participate
in:
(a)
the
SunCoke
Energy,
Inc.
401(k)
Plan,
a
tax-qualified
defined
contribution
plan
available
to
all
employees;
and
(b)
the
SunCoke
Energy,
Inc.
Savings
Restoration
Plan,
a
nonqualified
defined
contribution
plan
for
executives
whose
compensation
exceeds
IRS
limits
on
compensation
applicable
to
SunCoke’s
401(k)
plan.
For
the
periods
presented
in
the
table,
there
were
no
above-market,
or
preferential,
earnings
on
any
compensation
deferred
under
SunCoke’s
Savings
Restoration
Plan.
Please
refer
to
the
“Nonqualified
Deferred
Compensation”
table
in
SunCoke’s
2019
Proxy
Statement
for
further
details
of
each
NEOs
aggregate
earnings
and
account
balance
under
SunCoke’s
Savings
Restoration
Plan.

(6) All
Other
Compensation
.
Amounts
shown
represent
payments
made
by
SunCoke
on
behalf
of
the
NEOs
and
attributable
to
us.
These
amounts
include
annual
and
matching
contributions
to
SunCoke’s
401(k)
and/or
Savings
Restoration
Plan
and
a
relocation
stipend
for
Mr.
Hardesty
and
Ms.
Gates.
None
of
these
amounts
were
provided
directly
by
us.
No
perquisites
are
disclosed
because
SunCoke
does
not
provide
its
named
executive
officers
(including
our
NEOs)
with
perquisites
or
other
personal
benefits
such
as
partnership
vehicles,
club
memberships,
financial
planning
assistance,
or
tax
preparation
services.

Long-Term Incentive Plan

In
connection
with
the
completion
of
our
initial
public
offering
in
2013,
our
general
partner
adopted
the
SunCoke
Energy
Partners,
L.P.
Long-Term
Incentive
Plan,
or
LTIP.
The
LTIP
allows
for
grants
of
(1)
restricted
units,
(2)
unit
appreciation
rights,
referred
to
as
UARs,
(3)
unit
options,
referred
to
as
Options,
(4)
phantom
units,
(5)
unit
awards,
(6)
substitute
awards,
(7)
other
unit-based
awards,
(8)
cash
awards,
(9)
performance
awards
and
(10)
distribution
equivalent
rights,
referred
to
as
DERs,
collectively
referred
to
as
Awards.
The
LTIP
provides
our
general
partner
with
maximum
flexibility
with
respect
to
the
design
of
compensatory
arrangements
for
employees,
officers,
consultants,
and
directors
of
our
general
partner
and
any
of
its
affiliates
providing
services
to
us.
However,
the
only
equity
issued
under
the
LTIP
as
of
December
31,
2018
were
quarterly
payments
of
common
units
to
those
non-employee
directors
of
our
general
partner
who
did
not
elect
to
defer
receipt
of
their
common
unit
retainer.
Please
see
the
section
entitled
“Director
Compensation”
for
additional
information
regarding
the
compensation
program
for
the
non-employee
directors
of
our
general
partner.

The
LTIP
is
administered
by
the
Board
of
Directors
of
our
general
partner
or
an
alternative
committee
appointed
by
the
Board
of
Directors
of
our
general
partner,
to
which
we
refer,
collectively,
as
the
“committee”
for
purposes
of
this
summary.
The
committee
has
the
power
to
determine
to
whom
and
when
Awards
will
be
granted,
determine
the
amount
of
Awards
(measured
in
cash
or
in
shares
of
our
common
units),
proscribe
and
interpret
the
terms
and
provisions
of
each
Award
agreement
(the
terms
of
which
may
vary),
accelerate
the
vesting
provisions
associated
with
an
Award,
delegate
duties
under
the
LTIP
and
execute
all
other
responsibilities
permitted
or
required
under
the
LTIP.
The
maximum
aggregate
number
of
common
units
that
may
be
issued
pursuant
to
any
and
all
Awards
under
the
LTIP
shall
not
exceed
1,600,000
common
units,
subject
to

Table
of
Contents

adjustment
due
to
recapitalization
or
reorganization,
or
related
to
forfeitures
or
the
expiration
of
Awards,
as
provided
under
the
LTIP.

If
a
common
unit
subject
to
any
Award
is
not
issued
or
transferred,
or
ceases
to
be
issuable
or
transferable
for
any
reason,
including
(but
not
exclusively)
because
units
are
withheld
or
surrendered
in
payment
of
taxes
or
any
exercise
or
purchase
price
relating
to
an
Award
or
because
an
Award
is
forfeited,
terminated,
expires
unexercised,
is
settled
in
cash
in
lieu
of
common
units,
or
is
otherwise
terminated
without
a
delivery
of
units,
those
common
units
will
again
be
available
for
issue,
transfer,
or
exercise
pursuant
to
Awards
under
the
LTIP,
to
the
extent
allowable
by
law.
Common
units
to
be
delivered
pursuant
to
awards
under
our
LTIP
may
be
common
units
acquired
by
our
general
partner
in
the
open
market,
from
any
other
person,
directly
from
us,
or
any
combination
of
the
foregoing.

SunCoke Compensatory Plans, Agreements, and Programs

The
executive
officers
of
our
general
partner,
including
our
NEOs,
are
employed
by
SunCoke
and
they
participate
in
the
employee
benefit
plans,
including
retirement
plans,
and
compensation
arrangements
of
SunCoke.
In
accordance
with
the
omnibus
agreement,
we
reimburse
our
sponsor,
SunCoke,
for
the
portion
of
costs
and
expenses
incurred
by
sponsor
entities
that
are
allocated
to
us,
including
the
cost
of
salaries
and
other
employee
benefits,
such
as
401(k),
pension,
bonuses
and
health
insurance
benefits
relating
to
SunCoke
employees
who
provide
services
to
us
(including
our
NEOs).
The
following
is
a
brief
description
of
the
severance,
retirement,
and
change
of
control
benefits
provided
by
SunCoke.

Retirement Benefits. SunCoke
does
not
maintain
any
tax-qualified
defined
benefit
pension
plan,
or
supplemental
executive
retirement
plan.
However
, o ur
NEOs
have
the
opportunity
to
participate
in
the
following
SunCoke
Energy,
Inc.
retirement
plans:

•

SunCoke 401(k) Plan. SunCoke
offers
all
of
its
employees,
including
the
NEOs,
the
opportunity
to
participate
in
the
SunCoke
401(k)
Plan,
formerly
known
as
SunCoke
Energy
Profit
Sharing
and
Retirement
Plan,
which
is
a
tax
qualified
defined
contribution
plan
with
401(k)
and
profit
sharing
features
designed
primarily
to
help
participating
employees
accumulate
funds
for
retirement.
Our
NEOs
may
make
elective
contributions,
and
SunCoke
makes
company
contributions
consisting
of
a
matching
contribution
equal
to
100
percent
of
employee
contributions
up
to
5
percent
of
eligible
compensation
and
an
employer
contribution
equal
to
3
percent
of
eligible
compensation.
All
NEOs
are
eligible
to
receive
these
contributions.

Savings Restoration Plan. The
Savings
Restoration
Plan,
or
SRP,
is
an
unfunded,
nonqualified
deferred
compensation
plan
administered
by
SunCoke
and
made
available
to
participants
in
the
SunCoke
401(k)
Plan
whose
compensation
exceeds
the
IRS
limits
on
compensation
that
can
be
taken
into
account
under
that
Plan
($270,000
for
2017
and
$275,000
for
2018).
Under
the
SRP,
employees
can
make
an
advance
election
to
defer
on
a
pre-tax
basis
up
to
50
percent
of
the
portion
of
their
salary
and
bonus
that
exceeds
the
compensation
limit.
Such
amounts
will
be
credited
to
a
bookkeeping
account
established
for
each
participant
as
of
the
date
the
amounts
would
otherwise
have
been
paid
to
the
participant.
Employer
contributions
will
be
credited
to
the
accounts
of
each
employee
who
elects
to
defer
compensation
and
they
consist
of
(1)
a
matching
contribution
equal
to
100
percent
of
the
first
5
percent
of
compensation
deferred
by
the
participant
under
the
SRP
and
(2)
an
additional
contribution
equal
to
3
percent
of
the
compensation
deferred
by
the
participant
under
the
SRP.
SunCoke
Energy
can
also
make
additional
discretionary
contributions.
Participants
are
fully
vested
in
their
own
deferrals
as
well
as
the
3
percent
employer
contribution,
and
will
vest
in
the
employer
matching
contributions
received
for
plan
years
and
discretionary
contributions
in
accordance
with
the
vesting
schedule
in
the
401(k)
Plan,
which
provides
for
100
percent
vesting
after
three
years
of
service.
Participants
can
direct
the
investment
of
their
bookkeeping
accounts
among
the
same
investment
alternatives
available
under
the
401(k)
Plan.
Unless
the
participant
elects
otherwise,
distributions
are
made
in
a
lump
sum
on
the
first
day
of
the
seventh
month
following
termination
of
employment
with
SunCoke
(or
immediately
to
the
participant’s
beneficiary
in
the
event
of
the
participant’s
earlier
death).
The
participant
can
elect,
prior
to
his
or
her
first
year
of
participation,
to
receive
a
distribution
in
installments
over
two
to
ten
years
instead
of
a
lump
sum
if
he
or
she
terminates
due
to
retirement,
which
is
defined
as
termination
after
attaining
at
least
age
55
with
combined
age
plus
continuous
years
of
service,
equal
to
65
years.
In
addition,
a
participant
can
elect,
concurrently
with
the
annual
deferral
election,
to
receive
an
in-service
lump
sum
distribution
of
the
amount
he
or
she
elects
to
defer
for
such
year,
with
such
payment
date
not
earlier
than
three
years
from
the
end
of
the
year
in
which
the
election
is
made.
A
participant
can
change
the
time
or
method
of
distribution
in
limited
circumstances.

Severance and Change in Control Benefits. Our
NEOs
participate
in
the
SunCoke
Energy
Executive
Involuntary
Severance
Plan
and
the
SunCoke
Energy
Special
Executive
Severance
Plan.
The
purpose
of
these
plans
is
to
recognize
an
executive’s
service
to
SunCoke
Energy
and
provide
a
market
competitive
level
of
protection
and
assistance
if
an
executive
is
involuntarily
terminated.

Table
of
Contents

•

Special Executive Severance Plan. SunCoke's
Special
Executive
Severance
Plan
provides
severance
to
designated
executives
whose
employment
is
terminated
by
SunCoke
other
than
for
cause,
death
or
disability,
or
who
resign
for
good
reason
(as
such
terms
are
defined
in
the
Plan)
within
two
years
following
a
change
in
control
of
SunCoke.
Severance
is
generally
payable
in
a
lump
sum,
equal
to
two
times
the
sum
of
the
executive’s
annual
base
salary
and
the
greater
of
(i)
100
percent
of
the
executive’s
target
annual
incentive
in
effect
immediately
before
the
change
in
control
or,
if
higher,
employment
termination
date,
or
(ii)
the
average
annual
incentive
awarded
to
the
executive
with
respect
to
the
three
years
ending
before
the
change
in
control
or,
if
higher,
ending
before
the
employment
termination
date,
with
the
multiple
depending
on
the
executive’s
position.
Executives
are
also
entitled
to
(x)
a
pro
rata
portion
of
the
current
year
Annual
Incentive
at
Company
performance
if
termination
occurs
after
the
first
quarter
of
the
calendar
year,
(y)
the
continuation
of
medical
plan
benefits
(including
dental)
at
active
employee
rates
for
the
benefit
extension
period
of
two
years
(which
run
concurrently
with
COBRA),
and
(z)
continuation
of
life
insurance
coverage
equal
to
one
time’s
the
executive’s
base
salary
and
outplacement
services

Executive Involuntary Severance Plan. The
Executive
Involuntary
Severance
Plan
provides
severance
to
designated
executives
whose
employment
is
terminated
by
SunCoke
other
than
for
cause
(as
defined
in
the
Plan),
death
or
disability.
Severance
is
paid
in
monthly
installments
and
ranges
from
one
to
one
and
half
times
the
sum
of
the
executive’s
annual
base
salary
and
target
annual
incentive,
depending
on
the
executive’s
position.
Executives
are
also
entitled
to
a
prorata
portion
of
the
current
year
Annual
Incentive
at
Company
performance
if
termination
occurs
after
the
first
quarter
of
the
calendar
year,
the
continuation
of
medical
plan
benefits
(excluding
dental)
at
active
employee
rates
for
the
salary
continuation
period
of
one
to
one
and
a
half
years
(which
run
concurrently
with
COBRA),
and
continuation
of
life
insurance
coverage
equal
to
one
time’s
the
executive’s
base
salary
and
outplacement
services.
Severance
is
subject
to
the
execution
of
a
release
of
claims
against
SunCoke
and
its
affiliates,
including
us,
at
the
time
of
termination
of
the
executive’s
employment.

Other SunCoke Benefits.

Our
NEOs
participate
in
the
same
basic
benefits
package
and
on
the
same
terms
as
other
eligible
SunCoke
employees.
The
benefits
package
includes
the
savings
program
described
above,
as
well
as
medical
and
dental
benefits,
disability
benefits,
insurance
(life,
travel
and
accident),
death
benefits
and
vacations
and
holidays.

For
additional
detailed
information
regarding
the
compensatory
plans,
agreements
and
programs
of
SunCoke
in
which
our
NEOs
participate,
we
encourage

you
to
read
SunCoke
Energy,
Inc.’s
2019
Annual
Meeting
Proxy
Statement.

Compensation Committee Interlocks and Insider Participation

As
previously
discussed,
our
general
partner’s
Board
of
Directors
is
not
required
to
maintain,
and
does
not
maintain,
a
compensation
committee.
During
2018,
all
compensation
decisions
with
respect
to
our
NEOs
were
made
by
the
Compensation
Committee
of
the
Board
of
Directors
of
SunCoke,
which
is
comprised
entirely
of
independent
members
of
SunCoke’s
Board.
In
addition,
none
of
these
individuals
receive
any
compensation
directly
from
us
or
our
general
partner.

Compensation Policies and Practices as They Relate to Risk Management

We
do
not
have
any
employees.
We
are
managed
and
operated
by
the
directors
and
officers
of
our
general
partner
and
employees
of
SunCoke
perform
services
on
our
behalf.
We
do
not
have
any
compensation
policies
or
practices
that
need
to
be
assessed
or
evaluated
for
the
effect
on
our
operations.
For
an
analysis
of
any
risks
arising
from
SunCoke’s
compensation
policies
and
practices,
please
read
SunCoke’s
2019
Proxy
Statement.

Board Report on Compensation

Neither
we
nor
our
general
partner
has
a
compensation
committee.
The
Board
of
Directors
of
our
general
partner
has
reviewed
and
discussed
with

management
the
Compensation
Discussion
and
Analysis
set
forth
above
and
based
on
this
review
and
discussion
has
approved
it
for
inclusion
in
this
Form
10-K.

Table
of
Contents

Members of The Board:

John
W.
Somerhalder,
II
(Conflicts
Committee
Chair)

• Michael
G.
Rippey
(Chairman)
•

•
Alvin
Bledsoe
(Audit
Committee
Chair)
•
Martha
Z.
Carnes
•
Fay
West
•
Katherine
T.
Gates
•
P.
Michael
Hardesty

Director Compensation

Currently,
directors
who
are
also
employees
of
SunCoke
receive
no
additional
compensation
for
service
on
the
general
partner’s
Board
of
Directors
or
any

committees
of
the
Board.
As
such,
they
are
not
included
in
the
narrative
or
tabular
disclosures
below.

Compensation Philosophy: The
Board
of
Directors
believes
that
the
compensation
program
for
independent
directors
should
be
designed
to:
(i)
attract

experienced
and
highly
qualified
individuals;
(ii)
provide
appropriate
compensation
for
their
commitment
and
contributions
to
the
Partnership
and
its
common
unitholders;
and
(iii)
align
the
interests
of
the
independent
directors
and
unitholders.

Retainers and Fees: The
table
below
summarizes
the
current
structure
of
our
independent
director
compensation
program:

Summary of Independent Director Compensation

Annual
Retainer
(Cash
Portion)

Annual
Retainer
(Common
Unit
Portion)

SUBTOTAL
(Base
Retainers
Only)

Audit
Committee
Chair
Retainer
(Cash)

Audit
Committee
Member
Retainer
(Cash)

Conflicts
Committee
Chair
Retainer
(Cash)

Conflicts
Committee
Member
Retainer
(Cash)

TOTAL

Mr. Alvin Bledsoe (1)

Ms. Martha Z.
Carnes

Mr. John W.
Somerhalder II

72,000 $

89,000 $

68,000

140,000

85,000

174,000

99,000

85,000

184,000

20,000

Not
applicable

10,000

Not
applicable

10,000

24,000

14,000

Not
applicable

160,000 $

198,000 $

218,000

(1) Mr.
Bledsoe
also
serves
as
an
independent
director
on
the
Board
of
Directors
of,
SunCoke,
where
he
chairs
the
Audit
Committee,
and
is
compensated
by

SunCoke
Energy,
Inc.

Long-Term Incentive Plan: Each
of
the
general
partner’s
independent
directors
is
entitled
to
receive
a
number
of
vested
common
units,
paid
quarterly,
under
the
SunCoke
Energy
Partners
GP
LLC
Long-Term
Incentive
Plan.
These
common
units,
representing
limited
partner
interests
in
the
Partnership,
have
an
aggregate
fair
market
value
of
$85,000
on
an
annualized
basis.
The
fair
market
value
of
each
quarterly
payment
is
calculated
as
of
the
payment
date,
by
dividing
one-fourth
of
the
aggregate
portion
of
the
annual
common
unit
retainer
value
by
the
average
closing
price
for
a
common
unit
during
the
ten
trading
days
on
the
NYSE
immediately
prior
to
the
payment
date.

Directors’ Deferred Compensation Plan: The
SunCoke
Energy
Partners,
L.P.
Directors’
Deferred
Compensation
Plan,
or
Deferred
Compensation
Plan,
permits
the
general
partner’s
independent
directors
to
defer
a
portion
of
their
cash
and/or
common
unit
compensation.
Payments
of
compensation
deferred
under
the
Directors’
Deferred
Compensation
Plan
are
restricted
in
terms
of
the
earliest
and
latest
dates
that
payments
may
begin.
Payments
of
compensation
deferred
under
the
Deferred
Compensation
Plan
will
be
made
at,
or
commence
on,
January
15
of
the
calendar
year
following
the
calendar
year
in
which
an
independent
director
leaves
the
Board,
with
any
successive
annual
installment
payments
to
be
made
no
earlier
than
January
15
of
each
such
year.
Each
independent
director
has
the
option
to
defer
his
or
her
compensation
in
the
form
of
phantom
unit
credits,
cash
units
or
a
combination
of
both.
Cash
units
accrue
interest
at
a
rate
set
annually
by
the
Board.
A
phantom
unit
credit
is
treated
as
though
invested
in
Partnership
common
units,
but
the
phantom
unit
credits
do
not
have
voting
rights.
Phantom
unit
credits
are
credited
with
distribution
equivalent
rights
(in
the
form
of
additional
phantom
unit
credits),
on
the
applicable
date(s)
for
the
Partnership’s
cash
distributions.
Phantom
unit
credits
are
settled
in

Table
of
Contents

cash
based
upon
the
average
closing
price
for
the
Partnership’s
common
units
during
the
ten
trading
days
on
the
NYSE
immediately
prior
to
the
payment
date.

Unit Ownership Guidelines : The
general
partner’s
independent
directors
are
not
required
to
hold
any
minimum
amount
of
Partnership
common
units.
Pursuant
to
the
Partnership’s
limited
partnership
agreement,
the
independent
members
of
the
general
partner’s
Conflicts
Committee
are
not
permitted
to
hold
any
ownership
interest
(including
common
stock)
in
SunCoke
Energy,
Inc.
[NYSE:
SXC].

Other Benefits : As
part
of
their
compensation
package,
the
general
partner's
independent
the
directors
are
reimbursed
for
their
out-of-pocket
expenses

related
to
attendance
at
Board
and
Board
Committee
meetings
including:
hotel
rooms/lodging,
meals,
and
transportation
(
e.g.,
commercial
flights,
trains,
cars,
parking,
etc
.).

Directors’ & Officers’ Insurance and Indemnification Agreements: The
general
partner’s
limited
liability
company
operating
agreement
(the
“
LLC

Agreement
”)
requires
that
the
general
partner
indemnify
its
directors
and
officers,
to
the
fullest
extent
permitted
by
applicable
law,
against
any
costs,
expenses
(including
legal
fees
and
expenses)
and
other
liabilities
to
which
they
may
become
subject
by
reason
of
their
service
to
the
general
partner
and/or
the
Partnership.
The
general
partner
maintains
an
appropriate
program
of
liability
insurance
for
its
directors
and
officers
and
has
entered
into
indemnification
agreements
with
its
independent
directors
and
certain
key
executive
officers.
This
insurance
and
the
indemnification
agreements
supplement
the
indemnification
obligations
contained
in
provisions
in
the
LLC
Agreement.

The
following
table
sets
forth
the
compensation
for
our
independent
directors
in
fiscal
2018:

Director Compensation Table

Name (1)

Fees
Earned or
Paid in Cash (2)

Unit
Awards (3)

All Other
Compensation (4)

$72,000

$89,000

$99,000

$—

$68,000

$85,000

$—

$4,911

$2,998

$12,999

$998,285

$432,046

$738,652

Total

$144,911

$176,998

$196,999

$998,285

$432,046

$738,652

Alvin
Bledsoe

Martha
Z.
Carnes

John
W.
Somerhalder,
II
C.
Scott
Hobbs
(5)
Wayne
L.
Moore
(5)
Nancy
M.
Snyder
(5)

NOTES TO TABLE :

(1) Messrs.
Hobbs
and
Moore,
and
Ms.
Snyder,
each
resigned
from
our
general
partner’s
Board
of
Directors
effective
September
1,
2017,
and
Messrs.

Bledsoe
and
Somerhalder,
and
Ms.
Carnes,
were
appointed
to
our
general
partner’s
Board
of
Directors
effective
September
1,
2017.

(2) The
amounts
in
this
column
include
all
retainer
and
meeting
fees
paid
or
deferred
pursuant
to
the
Directors’
Deferred
Compensation
Plan
in
2018.
As
compensation
for
their
time
and
effort
spent
during
the
fourth
quarter
of
2018
on
the
Simplification
Transaction,
Ms.
Carnes
and
Mr.
Somerhalder
were
paid
$2,000
each
for
Conflicts
Committee
meeting
attended
in
person
and
$1,000
for
each
Conflicts
Committee
meeting
attended
telephonically.

(3) The
amounts
in
this
column
represent
the
fair
value
of
the
common
unit
retainer
payments
made
to
each
director
in
fiscal
2018
as
of
the
date
of
each
quarterly
payment,
calculated
pursuant
to
FASB
ASC
Topic
718.
The
number
of
common
units
granted
to
each
independent
director
was
determined
by
dividing
the
quarterly
common
unit
retainer
payment
by
the
average
closing
price
of
a
Partnership
common
unit
for
the
ten
trading
days
preceding
the
payment
date
in
2018.
Messrs.
Bledsoe,
and
Somerhalder
each
deferred
their
respective
common
unit
retainers
into
the
Directors’
Deferred
Compensation
Plan.

(4) The
amounts
shown
in
this
column
reflect
the
value
of
distribution
equivalents
earned
on
deferred
compensation
account
balances
during
2018.

(5) On
January
22,
2018,
our
former
directors,
Messrs.
Hobbs
and
Moore,
and
Ms.
Snyder
received
payment
in
cash
for
the
entire
balance
of
all
deferred
compensation
credited
to
their
respective
deferred
compensation
accounts.
In
accordance
with
the
terms
of
the
Directors’
Deferred
Compensation
Plan,
compensation
deferred
in
the
form
of
phantom
unit
credits
was
valued
using
the
average
closing
price
for
our
common
units
for
the
period
of
ten
(10)
trading
days
immediately
prior
to
January
15,
2018.
Mr.
Hobbs
received
a
cash
payment
of
$998,285,
Mr.
Moore
received
a
cash
payment
of
$432,046,
and
Ms.
Snyder
received
a
cash
payment
of
$738,652.

Table
of
Contents

Business Expenses: Each
independent
director
is
reimbursed
for
out-of-pocket
expenses
in
connection
with
attending
meetings
of
the
Board
of
Directors
or
committees,
including
room,
meals
and
transportation
to
and
from
the
meetings.

Indemnification: Each
director
will
be
indemnified
fully
by
us
for
actions
associated
with
being
a
member
of
our
general
partner’s
Board
of
Directors,
to
the
fullest
extent
permitted
under
applicable
state
law.

Independent Director Stock Ownership Guidelines: Consistent
with
our
partnership
agreement,
Ms.
Carnes
and
Mr.
Somerhalder,
as
independent
directors
not
otherwise
affiliated
with
our
general
partner,
or
SunCoke
Energy,
Inc.,
are
expected
not
to
maintain
any
ownership
interest
in
the
common
stock
of
SunCoke.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The
following
table
sets
forth
as
of
January
31,
2019,
the
beneficial
ownership
of
common
units
of
SunCoke
Energy
Partners,
L.P.
held
by:
(i)
affiliates
of
our
general
partner;
(ii)
each
of
the
current
directors
and
named
executive
officers
of
our
general
partner;
and
(iii)
all
current
directors
and
executive
officers
of
our
general
partner
as
a
group.

Name of Beneficial Owner (1)
Sun
Coal
&
Coke
LLC
(2)

Michael
G.
Rippey

Fay
West

P.
Michael
Hardesty

Gary
P.
Yeaw

Katherine
T.
Gates

Allison
S.
Lausas
Alvin
Bledsoe
(3)

Martha
Z.
Carnes

John
W.
Somerhalder,
II
(3)

All
directors
and
executive
officers
as
a
group
(9
people)

Less
than
one
percent
of
our
outstanding
common
units.

Common
Units
Beneficially
Owned
28,499,899

Percentage of
Common
Units
Beneficially
Owned

61.7%

—

6,031

2,500

—

300

1,000

1,668

—

11,499

(1) The
business
address
for
SunCoke
Energy
Partners,
L.P.
and
each
individual
is
1011
Warrenville
Road,
Suite
600,
Lisle,
Illinois
60532.

(2) Sun
Coal
&
Coke
LLC
is
a
wholly
owned
direct
subsidiary
of
SunCoke
Energy,
Inc.,
and
is
the
sole
member
of
our
general
partner.

(3) Certain
directors
have
elected
to
defer
all
or
a
portion
of
their
compensation
into
phantom
unit
credits
under
the
SunCoke
Energy
Partners,
L.P.
Directors’
Deferred
Compensation
Plan
described
in
the
section
entitled
“Executive
Compensation-Director
Compensation---Directors'
Deferred
Compensation
Plan.”
Each
phantom
unit
credit
is
treated
as
if
it
were
invested
in
common
units
representing
limited
partnership
interests
in
the
Partnership,
and
distribution
equivalents
are
credited
in
the
form
of
additional
phantom
unit
credits.
These
phantom
unit
credits
do
not
have
voting
rights.
Such
phantom
unit
credits
ultimately
will
be
settled
in
cash
following
termination
of
the
director’s
service
on
the
Board,
based
upon
the
average
closing
price
for
our
common
units
for
the
ten
trading
days
on
the
NYSE
immediately
prior
to
the
payment
date.
The
following
directors
hold
such
phantom
unit
credits:
Mr.
Bledsoe:
6,188.31
phantom
unit
credits;
Ms.
Carnes:
5,847.96
phantom
unit
credits
and
Mr.
Somerhalder:
16,723.64
phantom
unit
credits.

Beneficial Stock Ownership of Unaffiliated Persons Owning More Than Five Percent of Our Common Units

As
of
January
31,
2019,
there
were
no
reported
common
units
beneficially
owned
by
unitholders,
not
otherwise
affiliated
with
us,
in
amounts
greater
than

five
percent
of
the
outstanding
common
units
representing
limited
partnership
interests
in
the
Partnership.

100

Table
of
Contents

Beneficial Ownership of Our Sponsor’s Common Stock by the Directors and Executive Officers of Our General Partner

The
following
table
sets
forth
certain
information
regarding
beneficial
ownership
of
SunCoke
Energy,
Inc.’s
common
stock,
as
of
January
31,
2019,
by

directors
of
our
general
partner,
by
each
named
executive
officer
and
by
all
directors
and
executive
officers
of
our
general
partner,
as
a
group.
Unless
otherwise
noted,
each
individual
exercises
sole
voting
or
investment
power
over
the
shares
of
SunCoke
common
stock
shown
in
the
table.
For
purposes
of
this
table,
beneficial
ownership
includes
shares
of
SunCoke
common
stock
as
to
which
the
person
has
sole
or
shared
voting
or
investment
power
and
also
any
shares
of
SunCoke,
Inc.
common
stock
that
such
person
has
the
right
to
acquire
within
60
days
of
January
31,
2019,
through
the
exercise
of
any
option,
warrant,
or
right.

Name

Shares of SunCoke
Energy, Inc.
Common Stock

Right to Acquire
Within 60 Days
After January 31,
2019 (1)

Michael
G.
Rippey

Fay
West

P.
Michael
Hardesty
(2)

Gary
P.
Yeaw

Katherine
T.
Gates
(3)

Allison
S.
Lausas

Alvin
Bledsoe
(4)

Martha
Z.
Carnes
(5)

John
W.
Somerhalder,
II
(5)

—

28,416

75,021

44,070

7,916

5,006

5,934

—

24,288

281,915

166,389

153,294

84,853

18,443

—

Total

24,288

310,331

241,410

197,364

92,769

23,449

5,934

—

All
directors
and
executive
officers
as
a
group
(9
people)

166,363

729,182

895,545

Percent
of SunCoke
Energy, Inc.
Common Stock
Outstanding

Less
than
one
percent
of
SunCoke's
outstanding
common
stock.

(1) The
amounts
shown
in
this
column
reflect
shares
of
SunCoke
Energy,
Inc.
common
stock
which
the
persons
listed
have
the
right
to
acquire
as
a
result
of
the
vesting
of
stock
options,
conversion
of
restricted
share
units,
and/or
settlement
of
performance
share
units
at
100%
of
target,
within
60
days
after
January
31,
2019
under
certain
plans,
including
the
SunCoke
Energy,
Inc.
Long-Term
Performance
Enhancement
Plan.

(2) Mr.
Hardesty
also
holds
9,981
units,
valued
at
$4.61/unit,
in
the
SunCoke
401(k)
Plan,
and
8,949
units,
valued
at
$4.90/unit,
in
the
SunCoke
Energy,
Inc.

Savings
Restoration
Plan
("SRP").
Equivalent
share
ownership
represented
by
these
units
was
derived,
in
each
case,
by
multiplying
the
number
of
units
held
by
the
current
value
per
unit,
and
then
dividing
by
$11.24/common
share
(NYSE
closing
price
on
January
31,
2019).
Thus,
Mr.
Hardesty’s
participation
in
these
funds
represents
an
aggregate
share
equivalent
position
of
approximately
7,995
shares
of
SunCoke.
This
position
is
not
reflected
in
the
data
shown
in
the
foregoing
table.

(3) Ms.
Gates
also
holds
3,433
units
in
the
SRP.
Equivalent
share
ownership
represented
by
these
units
was
derived
by
multiplying
the
number
of
units
held

by
$4.90/unit
(current
value),
and
then
dividing
by
$11.24/common
share
(NYSE
closing
price
on
January
31,
2019).
Thus,
Ms.
Gates’
participation
in
the
SRP
represents
a
share
equivalent
position
of
approximately
1,497
shares
of
SunCoke.
This
position
is
not
reflected
in
the
data
shown
in
the
foregoing
table.

(4) Mr.
Bledsoe
is
also
a
director
of
SunCoke
Energy,
Inc.
and
he
has
elected
to
defer
a
portion
of
his
compensation
from
SunCoke
in
the
form
of
Share
Units
under
the
SunCoke
Energy,
Inc.
Directors’
Deferred
Compensation
Plan.
Mr.
Bledsoe
currently
holds
67,906.49
Share
Units.
These
Share
Units
are
not
reflected
in
the
data
shown
in
the
foregoing
table.
Each
Share
Unit
is
treated
as
if
it
were
invested
in
SunCoke
common
stock,
and
dividend
equivalents
(if
any)
are
credited
in
the
form
of
additional
Share
Units.
These
Share
Units
do
not
have
voting
rights.
Such
Share
Units
ultimately
will
be
settled
in
cash
(based
upon
a
ten-day
average
closing
price
for
trading

101

Table
of
Contents

of
SunCoke
common
stock
on
the
NYSE
prior
to
payment)
following
termination
of
Mr.
Bledsoe’s
service
on
SunCoke’s
Board
of
Directors.
A
description
of
the
SunCoke
Energy,
Inc.
Directors’
Deferred
Compensation
Plan
will
be
included
in
the
proxy
statement
for
SunCoke’s
2019
annual
meeting
of
stockholders
which
will
be
available
upon
its
filing
on
the
SEC’s
website
at
www.sec.gov
and
on
SunCoke’s
website
at
www.suncoke.com
at
the
“Investors
-
Financial
Reports
-
Annual
Report
&
Proxy”
tab.
SunCoke’s
2019
Proxy
Statement
also
will
be
available
free
of
charge
from
the
Corporate
Secretary
of
our
general
partner.

(5) Consistent
with
our
partnership
agreement,
Ms.
Carnes
and
Mr.
Somerhalder,
as
independent
directors
otherwise
unaffiliated
with
our
general
partner,
or

SunCoke,
are
expected
not
to
maintain
any
ownership
interest
in
the
common
stock
of
SunCoke
Energy,
Inc.

Securities Authorized for Issuance under Equity Compensation Plans

The
following
table
provides
information,
as
of
December
31,
2018,
regarding
Partnership
common
units
that
may
be
issued
upon
conversion
(assuming
a

one-for-one
conversion)
of
securities
granted
under
the
general
partner’s
Long-Term
Incentive
Plan.
For
more
information
about
this
plan,
which
did
not
require
approval
by
the
Partnership’s
limited
partners,
refer
to
"Item
11.
Executive
Compensation
-
Long-Term
Performance
Enhancement
Plan.”

EQUITY COMPENSATION PLAN INFORMATION (1)

Plan Category

Equity
compensation
plans
approved
by
security
holders

Equity
compensation
plans
not
approved
by
security

holders

(a)
Number of securities to be issued
upon exercise of outstanding
options, warrants and rights
Not
Applicable

(b)
Weighted-average exercise price of
outstanding options warrants and
rights
Not
Applicable

(c)
Number of securities remaining
available for future issuance under
equity compensation plans
(excluding securities reflected in
column (a))
Not
Applicable

Not
Applicable

1,554,640

(1) The
only
securities
issued
under
SunCoke
Energy
Partners,
L.P.
Long-Term
Incentive
Plan
since
the
Partnership’s
initial
public
offering
have
been
common
units
issued
to
directors
in
payment
of
their
common
unit
retainers.
Although
permitted
by
the
terms
of
the
Long-Term
Incentive
Plan,
no
restricted
units,
unit
appreciation
rights,
unit
options,
or
other
unit-based
awards
convertible
into
common
units
have
been
granted
to
executive
officers
or
directors.

102

Table
of
Contents

Item 13.

Certain Relationships and Related Transactions, and Director Independence

SunCoke,
through
its
Sun
Coal
&
Coke
subsidiary,
beneficially
owns
28,268,728
common
units
representing
an
aggregate
limited
partnership
interest
in
us
of
60.4
percent
,
and
indirectly
owns
and
controls
our
general
partner.
SunCoke
also
appoints
all
of
the
directors
of
our
general
partner.
In
addition,
our
general
partner
owns
a
2
percent
general
partner
interest
in
us
and
all
of
our
IDRs.

The
terms
of
the
transactions
and
agreements
disclosed
in
this
section
were
determined
by
and
among
affiliated
entities
and,
consequently,
are
not
the
result
of
arm’s
length
negotiations.
These
terms
and
agreements
are
not
necessarily
at
least
as
favorable
to
us
as
the
terms
that
could
have
been
obtained
from
unaffiliated
third
parties.

Distributions and Payments to Our General Partner and Its Affiliates

The
following
table
summarizes
the
distributions
and
payments
to
be
made
by
us
to
our
general
partner
and
its
affiliates
in
connection
with
the
ongoing

operation
and
any
liquidation
of
SunCoke
Energy
Partners,
L.P.

See
"Item
5.
Market
for
Registrant's
Common
Equity,
Related
Stockholders
Matters
and
Issuer
Purchases
of
Equity
Securities
-
The
Partnership's

Distribution
Policy,"
for
a
complete
description
of
the
distributions
we
make
to
our
general
partner
and
its
affiliates.

Operational Stage

Payments
to
our
general
partner
and
its
affiliates

Under
the
terms
of
our
omnibus
agreement
with
SunCoke,
our
general
partner
and
its
affiliates
do
not
receive
a
management
fee
or
other
compensation
for
its
management
of
our
partnership,
but
we
reimburse
our
general
partner
and
its
affiliates
for
all
direct
and
indirect
expenses
they
incur
and
payments
they
make
in
providing
general
and
administrative
services
on
our
behalf.
Our
partnership
agreement
does
not
set
a
limit
on
the
amount
of
expenses
for
which
our
general
partner
and
its
affiliates
may
be
reimbursed.
Our
partnership
agreement
provides
that
our
general
partner
will
determine
in
good
faith
the
expenses
that
are
allocable
to
us.

Withdrawal
or
removal
of
our
general
partner

If
our
general
partner
withdraws
or
is
removed,
its
general
partner
interest
and
its
IDRs
will
either
be
sold
to
the
new
general
partner
for
cash
or
converted
into
common
units,
in
each
case
for
an
amount
equal
to
the
fair
market
value
of
those
interests.

Liquidation Stage

Liquidation

Agreements with Affiliates

Upon
our
liquidation,
the
partners,
including
our
general
partner,
will
be
entitled
to
receive
liquidating
distributions
according
to
their
particular
capital
account
balances.

We
have
entered
into
certain
agreements
with
SunCoke,
as
described
below.
While
we
believe
these
agreements
are
on
terms
no
less
favorable
to
us
than

those
that
could
have
been
negotiated
with
unaffiliated
third
parties,
they
are
not
the
result
of
arm’s-length
negotiations.

Arrangements Between SunCoke Energy and the Partnership

Omnibus Agreement

The
omnibus
agreement
with
SunCoke
and
our
general
partner
addresses
certain
aspects
of
our
relationship,
including:

Business
Opportunities
.
We
have
a
preferential
right
to
invest
in,
acquire
and
construct
cokemaking
facilities
in
the
U.S.
and
Canada.
SunCoke
has
a

preferential
right
to
all
other
business
opportunities.
If
we
decide
not
to
pursue
an
opportunity
to
construct
a
new
cokemaking
facility
and
SunCoke
or
any
of
its
controlled
affiliates
undertake
such
construction,
then
upon
completion
of
such
construction,
we
will
have
the
option
to
acquire
such
facility
at
a
price

103

Table
of
Contents

sufficient
to
give
SunCoke
an
internal
rate
of
return
on
its
invested
capital
equal
to
the
sum
of
SunCoke’s
weighted
average
cost
of
capital
(as
determined
in
good
faith
by
SunCoke)
and
6.0
percent.
If
we
decide
not
to
pursue
an
opportunity
to
invest
in
or
acquire
a
cokemaking
facility,
SunCoke
or
any
of
its
controlled
affiliates
may
undertake
such
an
investment
or
acquisition
and
if
such
acquisition
is
completed
by
SunCoke,
the
cokemaking
facility
so
acquired
will
be
subject
to
the
right
of
first
offer
described
below.
If
a
business
opportunity
includes
cokemaking
facilities
but
such
facilities
represent
a
minority
of
the
value
of
such
business
opportunity
as
determined
by
SunCoke
in
good
faith,
SunCoke
will
have
a
preferential
right
as
to
such
business
opportunity.
These
agreements
as
to
business
opportunities
shall
apply
only
so
long
as
SunCoke
controls
us,
and
shall
not
apply
with
respect
to
any
business
opportunity
SunCoke
or
any
of
its
controlled
affiliates
was
actively
pursuing
at
the
time
of
the
closing
of
our
IPO.

Right
of
First
Offer
.
If
SunCoke
or
any
of
its
controlled
affiliates
decides
to
sell,
convey
or
otherwise
transfer
to
a
third-party
a
cokemaking
facility
located
in
the
U.S.
or
Canada
or
an
interest
therein,
we
shall
have
a
right
of
first
offer
as
to
such
facility.
SunCoke
shall
have
the
same
right
of
first
offer
if
we
decide
to
sell,
convey
or
otherwise
transfer
to
a
third-party
any
cokemaking
facility
or
an
interest
therein.
In
the
event
a
party
decides
to
sell,
convey
or
otherwise
transfer
a
cokemaking
facility,
it
will
offer
the
other
party,
referred
to
as
the
ROFO
Party,
such
facility
with
a
proposed
price
for
such
assets.
If
the
ROFO
Party
does
not
exercise
its
right,
the
seller
shall
have
the
right
to
complete
the
proposed
transaction,
on
terms
not
materially
more
favorable
to
the
buyer
than
the
last
written
offer
proposed
during
negotiations
with
the
ROFO
Party,
with
a
third-party
within
270
days.
If
the
seller
fails
to
complete
such
a
transaction
within
270
days,
then
the
right
of
first
offer
is
reinstated.
This
right
of
first
offer
shall
apply
only
so
long
as
SunCoke
controls
us.

Indemnity
.
SunCoke
will
indemnify
the
Partnership
with
respect
to
remediation
arising
from
any
environmental
matter
discovered
and
identified
as
requiring
remediation
prior
to
the
contribution
by
SunCoke
to
us
of
an
interest
in
the
Haverhill,
Middletown
and
Granite
City
(Gateway)
cokemaking
facilities,
except
for
any
liability
or
increase
in
liability
resulting
from
changes
in
environmental
regulations;
provided,
however,
that,
in
each
case,
SunCoke
will
be
deemed
to
have
contributed
in
satisfaction
of
this
obligation,
as
of
the
effective
date
of
the
contribution
of
an
interest
in
these
cokemaking
facilities,
the
amount
identified
in
the
applicable
contribution
agreement
as
being
reserved
to
pre-fund
existing
environmental
remediation
projects.

We
will
indemnify
SunCoke
for
events
relating
to
our
operations
except
to
the
extent
that
we
are
entitled
to
indemnification
by
SunCoke.

Real Property .
SunCoke
will
either
cure
or
fully
indemnify
us
for
losses
resulting
from
any
material
title
defects
at
the
properties
owned
by
the

entities
in
which
we
have
acquired
an
interest
from
SunCoke,
to
the
extent
that
such
defects
interfere
with,
or
reasonably
could
be
expected
to
interfere
with,
the
operations
of
the
related
cokemaking
facilities.

License
.
SunCoke
has
granted
us
a
royalty-free
license
to
use
the
name
“SunCoke”
and
related
marks.
Additionally,
SunCoke
will
grant
us
a
non-

exclusive
right
to
use
all
of
SunCoke’s
current
and
future
cokemaking
and
related
technology.
We
have
not
paid
and
will
not
pay
a
separate
license
fee
for
the
rights
we
receive
under
the
license.

Expenses
and
Reimbursement
.
SunCoke
will
continue
to
provide
us
with
certain
general
and
administrative
services,
and
we
will
reimburse
SunCoke
for

all
direct
costs
and
expenses
incurred
on
our
behalf
and
the
portion
of
SunCoke’s
corporate
and
other
costs
and
expenses
attributable
to
our
operations.
Additionally,
we
have
agreed
to
pay
all
fees
(i)
due
under
our
revolving
credit
facility
and/or
existing
senior
notes;
and
(iii)
in
connection
with
any
future
financing
arrangement
entered
into
for
the
purpose
of
amending,
modifying,
or
replacing
our
revolving
credit
facility
or
our
senior
notes.

The
omnibus
agreement
can
be
amended
by
written
agreement
of
all
parties
to
the
agreement.
However,
we
may
not
agree
to
any
amendment
or

modification
that
would,
in
the
reasonable
discretion
of
our
general
partner,
be
adverse
in
any
material
respect
to
the
holders
of
our
common
units
without
prior
approval
of
the
conflicts
committee.
So
long
as
SunCoke
controls
our
general
partner,
the
omnibus
agreement
will
remain
in
full
force
and
effect
unless
mutually
terminated
by
the
parties.
If
SunCoke
ceases
to
control
our
general
partner,
the
omnibus
agreement
will
terminate,
provided
(i)
the
indemnification
obligations
described
above
and
(ii)
our
non-exclusive
right
to
use
all
of
SunCoke’s
existing
cokemaking
and
related
technology
will
remain
in
full
force
and
effect
in
accordance
with
their
terms.

Procedures for Review, Approval and Ratification of Transactions with Related Persons

Our
general
partner
has
adopted
policies
for
the
review,
approval
and
ratification
of
transactions
with
related
persons.
The
board
has
also
adopted
a

written
code
of
business
conduct
and
ethics,
under
which
a
director
is
expected
to
bring
to
the
attention
of
the
chief
executive
officer
or
the
board
any
conflict
or
potential
conflict
of
interest
that
may
arise
between
the
director
or
any
affiliate
of
the
director,
on
the
one
hand,
and
us
or
our
general
partner
on
the
other.
The
resolution
of
any
such
conflict
or
potential
conflict
should,
at
the
discretion
of
the
board
in
light
of
the
circumstances,
be
determined
by
a
majority
of
the
disinterested
directors.

104

Table
of
Contents

If
a
conflict
or
potential
conflict
of
interest
arises
between
our
general
partner
or
its
affiliates,
on
the
one
hand,
and
us
or
our
unitholders,
on
the
other

hand,
the
resolution
of
any
such
conflict
or
potential
conflict
should
be
addressed
by
the
Board
of
Directors
of
our
general
partner
in
accordance
with
the
provisions
of
our
partnership
agreement.
At
the
discretion
of
the
board
in
light
of
the
circumstances,
the
resolution
may
be
determined
by
the
board
in
its
entirety
or
by
the
conflicts
committee
of
the
Board
of
Directors.
Pursuant
to
our
code
of
business
conduct,
executive
officers
are
required
to
avoid
conflicts
of
interest
unless
approved
by
the
Board
of
Directors
of
our
general
partner.

In
the
case
of
any
sale
of
equity
by
us
in
which
an
owner
or
affiliate
of
an
owner
of
our
general
partner
participates,
our
practice
is
to
obtain
approval
of

the
board
for
the
transaction.
The
board
will
typically
delegate
authority
to
set
the
specific
terms
to
a
pricing
committee.
Actions
by
the
pricing
committee
will
require
unanimous
approval.
The
code
of
business
conduct
and
ethics
described
above
were
adopted
in
connection
with
the
closing
of
our
IPO,
and
as
a
result,
the
transactions
described
above
were
not
reviewed
according
to
such
procedures.

Director Independence

See
“Item
10.
Directors,
Executive
Officers
and
Corporate
Governance”
for
information
regarding
the
directors
of
our
general
partner
and
independence

requirements
applicable
for
the
Board
of
Directors
of
our
general
partner
and
its
committees.

Item 14.

Principal Accounting Fees and Services

Audit and Non-Audit Fees

KPMG
served
as
the
Partnership's
principal
independent
public
accountant.
The
following
table
shows
the
fees
billed
for
audit,
audit-related
services
and

all
other
services
for
each
of
the
last
two
years:

Audit

Audit Committee Pre-Approval Policy

Audit and Non-Audit Fees

2018

2017

795,919
$

864,475

As
outlined
in
its
charter,
the
Audit
Committee
of
the
board
of
directors
of
our
general
partner
maintains
an
auditor
independence
policy
that
mandates

that
the
Audit
Committee
of
its
board
of
directors
pre-approve
the
audit
and
non-audit
services
and
related
budget
in
advance.
The
policy
identifies:

(1)

the
guiding
principles
that
must
be
considered
by
the
Audit
Committee
in
approving
services
to
ensure
that
the
auditor’s
independence
is
not
impaired;

(2) describes
the
audit,
audit-related
and
tax
services
that
may
be
provided
and
the
non-audit
services
that
are
prohibited;
and

(3) sets
forth
pre-approval
requirements
for
all
permitted
services.

105

Table
of
Contents

In
some
cases,
pre-approval
is
provided
by
the
full
Audit
Committee
for
the
applicable
fiscal
year
for
a
particular
category
or
group
of
services,
subject
to
an
authorized
amount.
In
other
cases,
the
Audit
Committee
specifically
pre-approves
services.
To
ensure
compliance
with
the
policy,
the
policy
requires
that
our
Vice
President
and
Controller
report
the
amount
of
fees
incurred
for
the
various
services
provided
by
the
auditor
not
less
frequently
than
semiannually.
The
Audit
Committee
has
delegated
authority
to
its
Chair
to
pre-approve
one
or
more
individual
audit
or
permitted
non-audit
services
for
which
estimated
fees
do
not
exceed
$50,000
,
as
well
as
adjustments
to
any
estimated
pre-approval
fee
thresholds
up
to
$25,000
for
any
individual
service.
Any
such
pre-approvals
must
then
be
reported
at
the
next
scheduled
meeting
of
the
Audit
Committee.
All
of
the
audit
fees
shown
on
the
table
above
were
pre-approved
by
the
Audit
Committee.

106

Table
of
Contents

Item 15.

Exhibits, Financial Statement Schedules

(a)

the
following
documents
are
included
with
the
filing
of
this
report:

PART IV

Consolidated
financial
statements

The
consolidated
financial
statements
are
set
forth
under
Item
8
of
this
report.

Financial
statement
schedules:

Financial
statement
schedules
are
omitted
because
required
information
is
shown
elsewhere
in
this
report,
is
not
necessary
or
is
not
applicable.

Exhibits:

Exhibit
Number

2.1

2.2

2.3

3.1

3.2

3.2.1

3.2.2

4.1

10.1

10.1.1

10.1.2

Description

Contribution
Agreement,
dated
as
of
January
12,
2015,
by
and
among
Sun
Coal
&
Coke
LLC,
SunCoke
Energy
Partners,
L.P.,
SunCoke
Energy,
Inc.
and,
solely
with
respect
to
Section
2.9
thereof,
Gateway
Energy
&
Coke
Company,
LLC,
incorporated
by
reference
to
Exhibit
2.1
to
the
Current
Report
on
Form
8-K
(File
No.
001-35782)
filed
on
January
13,
2015

Contribution
Agreement,
dated
as
of
July
20,
2015,
by
and
between
Raven
Energy
Holdings,
LLC
and
SunCoke
Energy
Partners,
L.P.,
incorporated
by
reference
to
Exhibit
2.1
to
the
Current
Report
on
Form
8-K
(File
No.
001-35782)
filed
on
August
18,
2015.

Agreement
and
Plan
of
Merger
dated
as
of
February
4,
2019,
by
and
among
SunCoke
Energy,
Inc.,
SC
Energy
Acquisition
LLC,
SunCoke
Energy
Partners,
L.P.,
and
SunCoke
Energy
Partners
GP
LLC.
(incorporated
by
reference
to
Exhibit
2.1
of
the
current
Report
on
form
8-K,
(file
No.
001-35782)
filed
February
5,
2019.)

Certificate
of
Limited
Partnership
of
SunCoke
Energy
Partners,
L.P.
incorporated
by
reference
to
Exhibit
3.1
to
the
Registration
Statement
on
Form
S-1
(File
No.
333-183162)
filed
August
8,
2012

First
Amended
and
Restated
Agreement
of
Limited
Partnership
of
SunCoke
Energy
Partners,
L.P.,
dated
as
of
January
24,
2013,
incorporated
by
reference
to
Exhibit
3.1
to
the
Current
Report
on
Form
8-K
(File
No.
001-35782)
filed
on
January
24,
2013

Amendment
No.
1
to
First
Amended
and
Restated
Agreement
of
Limited
Partnership
of
SunCoke
Energy
Partners,
L.P.,
dated
December
23,
2015,
incorporated
by
reference
to
Exhibit
3.1
to
the
Current
Report
on
Form
8-K
(File
No.
001-
35782)
filed
on
December
30,
2015.

Amendment
No.
2
to
Second
Amended
and
Restated
Agreement
of
Limited
Partnership
of
SunCoke
Energy
Partners,
L.P.,
dated
October
17,
2017,
incorporated
by
reference
to
Exhibit
3.1
to
the
Current
Report
on
Form
8-K
(File
No.
001-35782)
filed
on
October
17,
2017

Senior
Notes
Indenture,
dated
as
of
May
24,
2017,
by
and
among
SunCoke
Energy
Partners,
L.P.,
SunCoke
Energy
Partners
Finance
Corp.,
the
Guarantors
named
therein,
and
The
Bank
of
New
York
Mellon,
as
trustee,
incorporated
by
reference
to
Exhibit
4.1
to
the
Current
Report
on
Form
8-K
(File
No.
001-35782)
filed
on
May
25,
2017.

Omnibus
Agreement,
dated
January
24,
2013,
incorporated
by
reference
to
Exhibit
10.2
to
the
Current
Report
on
Form
8-K
(File
No.
001-35782)
filed
on
January
24,
2013

Amendment
No.
1
to
Omnibus
Agreement,
dated
March
17,
2014,
incorporated
by
reference
to
Exhibit
10.1
to
the
Quarterly
Report
on
Form
10-Q
(File
No.
001-35782)
filed
on
October
28,
2014

Amendment
No.
2
to
Omnibus
Agreement,
dated
as
of
January
13,
2015,
incorporated
by
reference
to
Exhibit
10.4.2
to
the
Annual
Report
on
Form
10-K
(File
No.
001-35782)
filed
on
February
24,
2015.

107

Table
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Contents

10.2

10.3†

10.3.1†

10.3.2†

10.3.3†

10.3.4†

10.3.5†

10.3.6†

10.4†

10.4.1†

10.5†

10.5.1†

10.6†

10.6.1†

Credit
Agreement,
dated
May
24,
2017,
incorporated
by
reference
to
Exhibit
10.2
to
the
Current
Report
on
Form
8-K
(File
No.
001-
35782)
filed
on
May
25,
2017.

Coke
Purchase
Agreement,
dated
as
of
October
28,
2003,
by
and
between
Haverhill
Coke
Company
LLC,
ArcelorMittal
Cleveland
Inc.
(f/k/a
ISG
Cleveland
Inc.)
and
ArcelorMittal
Indiana
Harbor
Inc.
(f/k/a
ISG
Indiana
Harbor
Inc.),
incorporated
by
reference
to
Exhibit
10.6
to
the
Registration
Statement
on
Form
S-1
(File
No.
333-183162)
filed
August
8,
2012

Amendment
No.
1
to
Coke
Purchase
Agreement,
dated
as
of
December
5,
2003,
by
and
between
Haverhill
Coke
Company
LLC,
ArcelorMittal
Cleveland
Inc.
(f/k/a
ISG
Cleveland
Inc.)
and
ArcelorMittal
Indiana
Harbor
Inc.
(f/k/a
ISG
Indiana
Harbor
Inc.),
incorporated
by
reference
to
Exhibit
10.7
to
the
Registration
Statement
on
Form
S-1
(File
No.
333-183162)
filed
August
8,
2012

Letter
Agreement,
dated
as
of
May
7,
2008,
between
ArcelorMittal
USA
Inc.,
Haverhill
Coke
Company
LLC,
Jewell
Coke
Company,
L.P.
and
ISG
Sparrows
Point
LLC,
serving
as
Amendment
No.
2
to
the
Coke
Purchase
Agreement,
by
and
between
Haverhill
Coke
Company
LLC,
ArcelorMittal
Cleveland
Inc.
(f/k/a
ISG
Cleveland
Inc.)
and
ArcelorMittal
Indiana
Harbor
Inc.
(f/k/a
ISG
Indiana
Harbor
Inc.),
incorporated
by
reference
to
Exhibit
10.8
to
the
Registration
Statement
on
Form
S-1
(File
No.
333-183162)
filed
August
8,
2012

Amendment
No.
3
to
Coke
Purchase
Agreement,
dated
as
of
May
8,
2008,
by
and
between
Haverhill
Coke
Company
LLC,
ArcelorMittal
Cleveland
Inc.
(f/k/a
ISG
Cleveland
Inc.)
and
ArcelorMittal
Indiana
Harbor
Inc.
(f/k/a
ISG
Indiana
Harbor
Inc.),
incorporated
by
reference
to
Exhibit
10.9
to
the
Registration
Statement
on
Form
S-1
(File
No.
333-183162)
filed
August
8,
2012

Amendment
No.
4
to
Coke
Purchase
Agreement,
dated
as
of
January
26,
2011,
by
and
between
Haverhill
Coke
Company
LLC,
ArcelorMittal
Cleveland
Inc.
(f/k/a
ISG
Cleveland
Inc.)
and
ArcelorMittal
Indiana
Harbor
Inc.
(f/k/a
ISG
Indiana
Harbor
Inc.),
incorporated
by
reference
to
Exhibit
10.10
to
the
Registration
Statement
on
Form
S-1
(File
No.
333-183162)
filed
August
8,
2012

Amendment
No.
5
to
Coke
Purchase
Agreement,
dated
as
of
January
26,
2012,
by
and
between
Haverhill
Coke
Company
LLC,
ArcelorMittal
Cleveland
Inc.
(f/k/a
ISG
Cleveland
Inc.)
and
ArcelorMittal
Indiana
Harbor
Inc.
(f/k/a
ISG
Indiana
Harbor
Inc.),
incorporated
by
reference
to
Exhibit
10.11
to
the
Registration
Statement
on
Form
S-1
(File
No.
333-183162)
filed
August
8,
2012

Amendment
No.
6
to
Coke
Purchase
Agreement,
dated
as
of
March
15,
2012,
by
and
between
Haverhill
Coke
Company
LLC,
ArcelorMittal
Cleveland
Inc.
(f/k/a
ISG
Cleveland
Inc.)
and
ArcelorMittal
Indiana
Harbor
Inc.
(f/k/a
ISG
Indiana
Harbor
Inc.),
incorporated
by
reference
to
Exhibit
10.12
to
the
Registration
Statement
on
Form
S-1
(File
No.
333-183162)
filed
August
8,
2012

Coke
Purchase
Agreement,
dated
as
of
August
31,
2009,
by
and
between
Haverhill
Coke
Company
LLC
and
AK
Steel
Corporation,
incorporated
by
reference
to
Exhibit
10.13
to
the
Registration
Statement
on
Form
S-1
(File
No.
333-183162)
filed
August
8,
2012

Amendment
No.
1
to
Coke
Purchase
Agreement,
dated
as
of
May
8,
2012,
by
and
between
Haverhill
Coke
Company
LLC
and
AK
Steel
Corporation,
incorporated
by
reference
to
Exhibit
10.14
to
the
Registration
Statement
on
Form
S-1
(File
No.
333-183162)
filed
August
8,
2012

Energy
Sales
Agreement,
dated
as
of
August
31,
2009,
by
and
between
Haverhill
Coke
Company
LLC
and
AK
Steel
Corporation,
incorporated
by
reference
to
Exhibit
10.15
to
the
Registration
Statement
on
Form
S-1
(File
No.
333-183162)
filed
August
8,
2012

Supplemental
Energy
Sales
Agreement,
dated
as
of
June
1,
2012,
by
and
between
Haverhill
Coke
Company
LLC
and
AK
Steel
Corporation,
incorporated
by
reference
to
Exhibit
10.16
to
the
Registration
Statement
on
Form
S-1
(File
No.
333-183162)
filed
August
8,
2012

Coke
Sale
and
Feed
Water
Processing
Agreement,
dated
as
of
February
28,
2008,
by
and
between
Gateway
Energy
&
Coke
Company,
LLC
and
U.S.
Steel
Corporation,
incorporated
by
reference
to
Exhibit
10.32
to
SunCoke
Energy
Inc.'s
Amendment
No.7
to
Registration
Statement
on
Form
S-1
(File
No.
333-173022)
filed
July
20,
2011

Amendment
No.
1
to
Coke
Sale
and
Feed
Water
Processing
Agreement,
dated
as
of
November
1,
2010,
by
and
between
Gateway
Energy
&
Coke
Company,
LLC
and
U.S.
Steel
Corporation,
incorporated
by
reference
to
Exhibit
10.33
to
SunCoke
Energy,
Inc.'s
Amendment
No.2
to
Registration
Statement
on
Form
S-1
(File
No.
333-173022)
filed
June
3,
2011

108

Table
of
Contents

10.6.2

10.6.3†

10.7

10.8

10.9**

10.10**

10.11

21.1*

23.1*

24.1*

31.1*

31.2*

32.1*

32.2*

95.1*

101.INS*

101.SCH*

101.CAL*

101.DEF*

101.LAB*

101.PRE*

Amendment
No.
2
to
Coke
Sale
and
Feed
Water
Processing
Agreement,
dated
as
of
July
6,
2011,
by
and
between
Gateway
Energy
&
Coke
Company,
LLC
and
U.S.
Steel
Corporation,
incorporated
by
reference
to
Exhibit
10.9.2
to
the
Annual
Report
on
Form
10-K
(File
No.
001-35782)
filed
on
February
24,
2015.

Amendment
No.
3
to
Coke
Sale
and
Feed
Water
Processing
Agreement,
dated
as
of
January
12,
2015,
by
and
among
Gateway
Energy
&
Coke
Company,
LLC,
Gateway
Cogeneration
Company
LLC
and
U.S.
Steel
Corporation,
incorporated
by
reference
to
Exhibit
10.9.3
to
the
Annual
Report
on
Form
10-K
(File
No.
001-35782)
filed
on
February
24,
2015.

Amended
and
Restated
Coke
Purchase
Agreement,
dated
as
of
September
1,
2009
by
and
between
Middletown
Coke
Company,
LLC
and
AK
Steel
Corporation,
incorporated
herein
by
reference
to
Exhibit
10.17
to
the
Registration
Statement
on
Form
S-1
(File
No.
333-
183162)
filed
August
8,
2012

Second
Amended
and
Restated
Energy
Sales
Agreement,
dated
as
of
May
8,
2012,
by
and
between
Middletown
Coke
Company,
LLC
and
AK
Steel
Corporation,
incorporated
herein
by
reference
to
Exhibit
10.18
to
the
Registration
Statement
on
Form
S-1
(File
No.
333-
183162)
filed
August
8,
2012

SunCoke
Energy
Partners,
L.P.
Long-Term
Incentive
Plan,
incorporated
by
reference
to
Exhibit
10.4
to
Amendment
No.
6
to
the
Registration
Statement
on
Form
S-1
(File
No.
333-183162)
filed
November
21,
2012

SunCoke
Energy
Partners,
L.P.
Directors’
Deferred
Compensation
Plan,
incorporated
by
reference
to
Exhibit
10.19
to
Amendment
No.
6
to
the
Registration
Statement
on
Form
S-1
(File
No.
333-183162)
filed
November
21,
2012

Support
Agreement,
dated
as
of
February
4,
2019,
by
and
between
SunCoke
Energy
Partners,
L.P.,
and
Sun
Coal
&
Coke
LLC.
(incorporated
by
reference
to
Exhibit
10.1
to
the
Current
Report
on
Form
8-K
(File
No.
001-35782)
filed
on
February
5,
2019.

List
of
Subsidiaries
of
SunCoke
Energy
Partners,
L.P.
(filed
herewith)

Consent
of
KPMG
LLP
(filed
herewith)

Powers
of
Attorney
(filed
herewith)

Certification
of
Chief
Executive
Officer
Pursuant
to
Section
302
of
the
Sarbanes-Oxley
Act
of
2002
(18
U.S.C.
Section
7241)
(filed
herewith)

Certification
of
Chief
Financial
Officer
Pursuant
to
Section
302
of
the
Sarbanes-Oxley
Act
of
2002
(18
U.S.C.
Section
7241)
(filed
herewith)

Certification
of
Chief
Executive
Officer
Pursuant
to
Section
906
of
the
Sarbanes-Oxley
Act
of
2002
(18
U.S.C.
Section
1350)
(furnished
herewith)

Certification
of
Chief
Financial
Officer
Pursuant
to
Section
906
of
the
Sarbanes-Oxley
Act
of
2002
(18
U.S.C.
Section
1350)
(furnished
herewith)

Mine
Safety
Disclosure
(filed
herewith)

XBRL
Instance
Document
(filed
herewith)

XBRL
Taxonomy
Extension
Schema
Document
(filed
herewith)

XBRL
Taxonomy
Extension
Calculation
Linkbase
Document
(filed
herewith)

XBRL
Taxonomy
Extension
Definition
Linkbase
Document
(filed
herewith)

XBRL
Taxonomy
Extension
Label
Linkbase
Document
(filed
herewith)

XBRL
Taxonomy
Extension
Presentation
Linkbase
Document
(filed
herewith)

Provided
herewith.

** Management
contract
or
compensatory
plan
or
arrangement

†

Certain
portions
have
been
omitted
pursuant
to
confidential
treatment
requests.
Omitted
information
has
been
separately
filed
with
the
Securities
and
Exchange
Commission.

109

Table
of
Contents

Pursuant
to
the
requirements
of
Section
13
or
15(a)
of
the
Securities
Exchange
Act
of
1934,
the
registrant
has
duly
caused
this
report
to
be
signed
on
its

behalf
by
the
undersigned,
thereunto
duly
authorized,
on
February
15,
2019
.

SIGNATURES

SunCoke
Energy
Partners,
L.P.

By:

SunCoke
Energy
Partners
GP
LLC,
its
general
partner

/s/
Fay
West

Fay
West
Senior
Vice
President
and
Chief
Financial
Officer

Pursuant
to
the
requirements
of
the
Securities
Exchange
Act
of
1934,
this
report
has
been
signed
by
the
following
persons
on
behalf
of
the
registrant
and

in
the
capacities
indicated
on
February
15,
2019
.

Signature

/s/
Michael
G.
Rippey*

Michael
G.
Rippey

/s/
Fay
West

Fay
West

/s/
Allison
S.
Lausas*

Allison
S.
Lausas

/s/
Katherine
T.
Gates*

Katherine
T.
Gates

/s/
P.
Michael
Hardesty*

P.
Michael
Hardesty

/s/
Martha
Z.
Carnes*

Martha
Z.
Carnes

/s/
John
W.
Somerhalder,
II*

John
W.
Somerhalder,
II

/s/
Alvin
Bledsoe*

Alvin
Bledsoe

Title

Chairman,
President
and
Chief
Executive
Officer
(Principal
Executive
Officer)

Senior
Vice
President,
Chief
Financial
Officer
and
Director
(Principal
Financial
Officer)

Vice
President,
Finance
and
Controller
(Principal
Accounting
Officer)

Senior
Vice
President,
General
Counsel,
Chief
Compliance
Officer
and
Director

Senior
Vice
President,
Commercial
Operations,
Business
Development,
Terminals,
and
International
Coke
and
Director

Director

Fay
West,
pursuant
to
powers
of
attorney
duly
executed
by
the
above
officers
and
directors
of
SunCoke
Energy
Partners,
L.P.
and
filed
with
the
SEC
in
Washington,
D.C.,
hereby
executes
this
Annual
Report
on
Form
10-K
on
behalf
of
each
of
the
persons
named
above
in
the
capacity
set
forth
opposite
his
or
her
name.

/s/
Fay
West

Fay
West

February
15,
2019

110

SunCoke Energy Partners, L.P.

Subsidiaries of the Registrant

Exhibit 21.1

Name

Registration

Haverhill
Coke
Company
LLC
(98%)*

-----Haverhill
Cogeneration
Company
LLC

-----FF
Farms
Holdings
LLC

Middletown
Coke
Company,
LLC
(98%)*

-----Middletown
Cogeneration
Company
LLC

Gateway
Energy
&
Coke
Company,
LLC
(98%)*

-----Gateway
Cogeneration
Company
LLC

SunCoke
Energy
Partners
Finance
Corp.

SunCoke
Logistics
LLC

-----SunCoke
Lake
Terminal
LLC

-----Kanawha
River
Terminals
LLC

----------Marigold
Dock,
Inc.

----------Ceredo
Liquid
Terminal

-----Raven
Energy
LLC

----------CMT
Liquids
Terminal,
LLC

*
Remaining
equity
interest
held
indirectly
by
our
sponsor,
SunCoke
Energy,
Inc.

Consent of Independent Registered Public Accounting Firm

Exhibit
23.1

The
Board
of
Directors
SunCoke
Energy
Partners,
L.P.:

We
consent
to
the
incorporation
by
reference
in
the
registration
statement
(No.
333-187428)
on
Form
S-8
of
SunCoke
Energy
Partners,
L.P.
of
our
report
dated
February
15,
2019,
with
respect
to
the
consolidated
balance
sheets
of
SunCoke
Energy
Partners,
L.P.
as
of
December
31,
2018
and
2017,
and
the
related
consolidated
statements
of
operations,
equity,
and
cash
flows
for
each
of
the
years
in
the
three-year
period
ended
December
31,
2018,
and
the
related
notes
(collectively,
the
“combined
and
consolidated
financial
statements”),
and
the
effectiveness
of
internal
control
over
financial
reporting
as
of
December
31,
2018,
which
reports
appear
in
the
December
31,
2018
annual
report
on
Form
10-K
of
SunCoke
Energy
Partners,
L.P.

/s/
KPMG
LLP

Chicago,
Illinois
February
15,
2019

Exhibit 24.1

POWER OF ATTORNEY

The
undersigned,
a
director
of
SunCoke
Energy
Partners
GP
LLC,
hereby
constitutes
and
appoints
Michael
G.
Rippey,
Fay
West
and
Katherine
T.
Gates,
and
each
of
them,
his
or
her
true
and
lawful
attorneys-in-fact
and
agents
with
full
power
of
substitution
and
re
- substitution,
for
him
or
her
and
in
his
or
her
name
place
and
stead,
in
any
and
all
capacities,
to
sign
for
him
or
her
in
the
capacities
indicated
below
the
Annual
Report
of
SunCoke
Energy
Partners,
L.P.
on
Form
10-K
for
the
fiscal
year
ended
December
31,
2018
and
any
and
all
amendments
to
such
Annual
Report
on
Form
10-K,
and
to
cause
the
same
to
be
filed
with
all
exhibits
thereto,
and
all
documents
in
connection
therewith,
with
the
Securities
and
Exchange
Commission,
granting
unto
said
attorneys-in-fact
and
agents,
and
each
of
them,
full
power
and
authority
to
do
and
perform
each
and
every
act
and
thing
requisite
and
desirable
to
be
done
in
and
about
the
premises
as
fully
and
to
all
intents
and
purposes
as
the
undersigned
might
or
could
do
in
person,
hereby
ratifying
and
confirming
all
acts
and
things
that
said
attorneys-in-fact
and
agents
or
any
of
them,
or
their
or
his
or
her
substitute
or
substitutes
may
lawfully
do
or
cause
to
be
done
by
virtue
hereof.

IN
WITNESS
WHEREOF,
the
undersigned
has
executed
this
Power
of
Attorney
as
of
this
15th
day
of
February
2019
.

Signature:
/s/
John
W.
Somerhalder,
II

Name:
John
W.
Somerhalder,
II

Title:
Director

POWER OF ATTORNEY

IN
WITNESS
WHEREOF,
the
undersigned
has
executed
this
Power
of
Attorney
as
of
this
15th
day
of
February
2019
.

Signature:
/s/
Martha
Z.
Carnes

Name:
Martha
Z.
Carnes

Title:
Director

POWER OF ATTORNEY

IN
WITNESS
WHEREOF,
the
undersigned
has
executed
this
Power
of
Attorney
as
of
this
15th
day
of
February
2019
.

Signature:
/s/
Alvin
Bledsoe

Name:

Alvin
Bledsoe
Title:
Director

POWER OF ATTORNEY

The
undersigned,
an
officer
and
director
of
SunCoke
Energy
Partners
GP
LLC,
hereby
constitutes
and
appoints
Michael
G.
Rippey,
Fay
West
and
Katherine
T.
Gates,
and
each
of
them,
his
or
her
true
and
lawful
attorneys-in-fact
and
agents
with
full
power
of
substitution
and
re
- substitution,
for
him
or
her
and
in
his
or
her
name
place
and
stead,
in
any
and
all
capacities,
to
sign
for
him
or
her
in
the
capacities
indicated
below
the
Annual
Report
of
SunCoke
Energy
Partners,
L.P.
on
Form
10-K
for
the
fiscal
year
ended
December
31,
2018
and
any
and
all
amendments
to
such
Annual
Report
on
Form
10-K,
and
to
cause
the
same
to
be
filed
with
all
exhibits
thereto,
and
all
documents
in
connection
therewith,
with
the
Securities
and
Exchange
Commission,
granting
unto
said
attorneys-in-fact
and
agents,
and
each
of
them,
full
power
and
authority
to
do
and
perform
each
and
every
act
and
thing
requisite
and
desirable
to
be
done
in
and
about
the
premises
as
fully
and
to
all
intents
and
purposes
as
the
undersigned
might
or
could
do
in
person,
hereby
ratifying
and
confirming
all
acts
and
things
that
said
attorneys-in-fact
and
agents
or
any
of
them,
or
their
or
his
or
her
substitute
or
substitutes
may
lawfully
do
or
cause
to
be
done
by
virtue
hereof.

IN
WITNESS
WHEREOF,
the
undersigned
has
executed
this
Power
of
Attorney
as
of
this
15th
day
of
February
2019
.

Signature:
/s/
Fay
West

Name:
Fay
West

Title:
Senior
Vice
President

Chief
Financial
Officer
and
Director

(Principal
Financial
Officer)

POWER OF ATTORNEY

IN
WITNESS
WHEREOF,
the
undersigned
has
executed
this
Power
of
Attorney
as
of
this
15th
day
of
February
2019
.

Signature:
/s/
Katherine
T.
Gates

Name:
Katherine
T.
Gates

Title:
Senior
Vice
President,

General
Counsel,

Chief
Compliance
Officer
and
Director

POWER OF ATTORNEY

IN
WITNESS
WHEREOF,
the
undersigned
has
executed
this
Power
of
Attorney
as
of
this
15th
day
of
February
2019
.

Signature:
/s/
Michael
G.
Rippey

Name:
Michael
G.
Rippey

Title:
Chairman,
President,
and
Chief
Executive
Officer

(Principal
Executive
Officer)

POWER OF ATTORNEY

The
undersigned,
an
officer
of
SunCoke
Energy
Partners
GP
LLC,
hereby
constitutes
and
appoints
Michael
G.
Rippey,
Fay
West
and
Katherine
T.
Gates,
and
each
of
them,
his
or
her
true
and
lawful
attorneys-in-fact
and
agents
with
full
power
of
substitution
and
re
- substitution,
for
him
or
her
and
in
his
or
her
name
place
and
stead,
in
any
and
all
capacities,
to
sign
for
him
or
her
in
the
capacities
indicated
below
the
Annual
Report
of
SunCoke
Energy
Partners,
L.P.
on
Form
10-K
for
the
fiscal
year
ended
December
31,
2018
and
any
and
all
amendments
to
such
Annual
Report
on
Form
10-K,
and
to
cause
the
same
to
be
filed
with
all
exhibits
thereto,
and
all
documents
in
connection
therewith,
with
the
Securities
and
Exchange
Commission,
granting
unto
said
attorneys-in-fact
and
agents,
and
each
of
them,
full
power
and
authority
to
do
and
perform
each
and
every
act
and
thing
requisite
and
desirable
to
be
done
in
and
about
the
premises
as
fully
and
to
all
intents
and
purposes
as
the
undersigned
might
or
could
do
in
person,
hereby
ratifying
and
confirming
all
acts
and
things
that
said
attorneys-in-fact
and
agents
or
any
of
them,
or
their
or
his
or
her
substitute
or
substitutes
may
lawfully
do
or
cause
to
be
done
by
virtue
hereof.

IN
WITNESS
WHEREOF,
the
undersigned
has
executed
this
Power
of
Attorney
as
of
this
15th
day
of
February
2019
.

Signature:
/s/
Allison
S.
Lausas

Name:
Allison
S.
Lausas

Title:
Vice
President,
Finance
and
Controller

(Principal
Accounting
Officer)

POWER OF ATTORNEY

The
undersigned,
an
officer
and
director
of
SunCoke
Energy
Partners
GP
LLC,
hereby
constitutes
and
appoints
Michael
G.
Rippey,
Fay
West
and
Katherine
T.
Gates,
and
each
of
them,
his
or
her
true
and
lawful
attorneys-in-fact
and
agents
with
full
power
of
substitution
and
re
- substitution,
for
him
or
her
and
in
his
or
her
name
place
and
stead,
in
any
and
all
capacities,
to
sign
for
him
or
her
in
the
capacities
indicated
below,
the
Annual
Report
of
SunCoke
Energy
Partners,
L.P.
on
Form
10-K
for
the
fiscal
year
ended
December
31,
2018
and
any
and
all
amendments
to
such
Annual
Report
on
Form
10-K,
and
to
cause
the
same
to
be
filed
with
all
exhibits
thereto,
and
all
documents
in
connection
therewith,
with
the
Securities
and
Exchange
Commission,
granting
unto
said
attorneys-in-fact
and
agents,
and
each
of
them,
full
power
and
authority
to
do
and
perform
each
and
every
act
and
thing
requisite
and
desirable
to
be
done
in
and
about
the
premises
as
fully
and
to
all
intents
and
purposes
as
the
undersigned
might
or
could
do
in
person,
hereby
ratifying
and
confirming
all
acts
and
things
that
said
attorneys-in-fact
and
agents
or
any
of
them,
or
their
or
his
or
her
substitute
or
substitutes
may
lawfully
do
or
cause
to
be
done
by
virtue
hereof.

IN
WITNESS
WHEREOF,
the
undersigned
has
executed
this
Power
of
Attorney
as
of
this
15th
day
of
February
2019.

Signature:
/s/
P.Michael
Hardesty

Name:
P.
Michael
Hardesty

Title:
Senior
Vice
President,
Sales
and
Commercial
Operations,
Terminals
and
International
Coke
and
Director

Exhibit 31.1

I,
Michael
G.
Rippey,
certify
that:

CERTIFICATION

I
have
reviewed
this
Annual
Report
on
Form
10-K
for
the
fiscal
year
ended
December
31,
2018
of
SunCoke
Energy
Partners,
L.P.
(the
“registrant”);

Based
on
my
knowledge,
this
report
does
not
contain
any
untrue
statement
of
a
material
fact
or
omit
to
state
a
material
fact
necessary
to
make
the

statements
made,
in
light
of
the
circumstances
under
which
such
statements
were
made,
not
misleading
with
respect
to
the
period
covered
by
this
report;

Based
on
my
knowledge,
the
financial
statements,
and
other
financial
information
included
in
this
report,
fairly
present
in
all
material
respects
the

financial
condition,
results
of
operations
and
cash
flows
of
the
registrant
as
of,
and
for,
the
periods
presented
in
this
report;

The
registrant’s
other
certifying
officer(s)
and
I
are
responsible
for
establishing
and
maintaining
disclosure
controls
and
procedures
(as
defined
in
Exchange
Act
Rules
13a-15(e)
and
15d-15(e))
and
internal
control
over
financial
reporting
(as
defined
in
Exchange
Act
Rules
13a-15(f)
and
15d-15(f))
for
the
registrant
and
have:

(a)

Designed
such
disclosure
controls
and
procedures,
or
caused
such
disclosure
controls
and
procedures
to
be
designed
under
our
supervision,

to
ensure
that
material
information
relating
to
the
registrant,
including
its
consolidated
subsidiaries,
is
made
known
to
us
by
others
within
those
entities,
particularly
during
the
period
in
which
this
report
is
being
prepared;

(b)

Designed
such
internal
control
over
financial
reporting,
or
caused
such
internal
control
over
financial
reporting
to
be
designed
under
our

supervision,
to
provide
reasonable
assurance
regarding
the
reliability
of
financial
reporting
and
the
preparation
of
financial
statements
for
external
purposes
in
accordance
with
generally
accepted
accounting
principles;

(c)

Evaluated
the
effectiveness
of
the
registrant’s
disclosure
controls
and
procedures
and
presented
in
this
report
our
conclusions
about
the

effectiveness
of
the
disclosure
controls
and
procedures,
as
of
the
end
of
the
period
covered
by
this
report
based
on
such
evaluation;
and

(d)

Disclosed
in
this
report
any
change
in
the
registrant’s
internal
control
over
financial
reporting
that
occurred
during
the
registrant’s
fourth

fiscal
quarter
that
has
materially
affected,
or
is
reasonably
likely
to
materially
affect,
the
registrant’s
internal
control
over
financial
reporting;
and

The
registrant’s
other
certifying
officer(s)
and
I
have
disclosed,
based
on
our
most
recent
evaluation
of
internal
control
over
financial
reporting,
to
the

registrant’s
auditors
and
the
audit
committee
of
the
registrant’s
board
of
directors
(or
persons
performing
the
equivalent
functions):

(a)

All
significant
deficiencies
and
material
weaknesses
in
the
design
or
operation
of
internal
control
over
financial
reporting
which
are

reasonably
likely
to
adversely
affect
the
registrant’s
ability
to
record,
process,
summarize
and
report
financial
information;
and

(b)

Any
fraud,
whether
or
not
material,
that
involves
management
or
other
employees
who
have
a
significant
role
in
the
registrant’s
internal

control
over
financial
reporting.

/s/
Michael
G.
Rippey
Michael
G.
Rippey
Chairman,
President
and
Chief
Executive
Officer

February
15,
2019

Exhibit 31.2

I,
Fay
West,
certify
that:

CERTIFICATION

I
have
reviewed
this
Annual
Report
on
Form
10-K
for
the
fiscal
year
ended
December
31,
2018
of
SunCoke
Energy
Partners,
L.P.
(the
“registrant”);

Based
on
my
knowledge,
this
report
does
not
contain
any
untrue
statement
of
a
material
fact
or
omit
to
state
a
material
fact
necessary
to
make
the

statements
made,
in
light
of
the
circumstances
under
which
such
statements
were
made,
not
misleading
with
respect
to
the
period
covered
by
this
report;

Based
on
my
knowledge,
the
financial
statements,
and
other
financial
information
included
in
this
report,
fairly
present
in
all
material
respects
the

financial
condition,
results
of
operations
and
cash
flows
of
the
registrant
as
of,
and
for,
the
periods
presented
in
this
report;

(a)

Designed
such
disclosure
controls
and
procedures,
or
caused
such
disclosure
controls
and
procedures
to
be
designed
under
our
supervision,

(b)

Designed
such
internal
control
over
financial
reporting,
or
caused
such
internal
control
over
financial
reporting
to
be
designed
under
our

(c)

Evaluated
the
effectiveness
of
the
registrant’s
disclosure
controls
and
procedures
and
presented
in
this
report
our
conclusions
about
the

effectiveness
of
the
disclosure
controls
and
procedures,
as
of
the
end
of
the
period
covered
by
this
report
based
on
such
evaluation;
and

(d).

Disclosed
in
this
report
any
change
in
the
registrant’s
internal
control
over
financial
reporting
that
occurred
during
the
registrant’s
fourth

fiscal
quarter
that
has
materially
affected,
or
is
reasonably
likely
to
materially
affect,
the
registrant’s
internal
control
over
financial
reporting;
and

The
registrant’s
other
certifying
officer(s)
and
I
have
disclosed,
based
on
our
most
recent
evaluation
of
internal
control
over
financial
reporting,
to
the

registrant’s
auditors
and
the
audit
committee
of
the
registrant’s
board
of
directors
(or
persons
performing
the
equivalent
functions):

(a)

All
significant
deficiencies
and
material
weaknesses
in
the
design
or
operation
of
internal
control
over
financial
reporting
which
are

reasonably
likely
to
adversely
affect
the
registrant’s
ability
to
record,
process,
summarize
and
report
financial
information;
and

(b)

Any
fraud,
whether
or
not
material,
that
involves
management
or
other
employees
who
have
a
significant
role
in
the
registrant’s
internal

control
over
financial
reporting.

/s/
Fay
West
Fay
West
Senior
Vice
President
and
Chief
Financial
Officer

February
15,
2019

Exhibit 32.1

CERTIFICATION OF
CHIEF EXECUTIVE OFFICER
OF SUNCOKE ENERGY PARTNERS GP LLC
PURSUANT TO 18 U.S.C. SECTION 1350

In
connection
with
this
Annual
Report
on
Form
10-K
of
SunCoke
Energy
Partners,
L.P.
for
the
fiscal
year
ended
December
31,
2018
,
I,
Michael
G.
Rippey,
Chairman,
President
and
Chief
Executive
Officer
of
SunCoke
Energy
Partners
GP
LLC,
the
general
partner
of
SunCoke
Energy
Partners,
L.P.,
hereby
certify
pursuant
to
18
U.S.C.
Section
1350,
as
adopted
pursuant
to
Section
906
of
the
Sarbanes-Oxley
Act
of
2002,
that:

This
Annual
Report
on
Form
10-K
for
the
fiscal
year
ended
December
31,
2018
fully
complies
with
the

requirements
of
Section
13(a)
or
15(d)
of
the
Securities
Exchange
Act
of
1934;
and

The
information
contained
in
this
Annual
Report
on
Form
10-K
for
the
fiscal
year
ended
December
31,
2018
fairly
presents,
in
all
material
respects,
the
financial
condition
and
results
of
operations
of
SunCoke
Energy
Partners,
L.P.
for
the
periods
presented
therein.

/s/
Michael
G.
Rippey

Michael
G.
Rippey

Chairman,
President
and
Chief
Executive
Officer

February
15,
2019

Exhibit 32.2

CERTIFICATION OF
CHIEF FINANCIAL OFFICER
OF SUNCOKE ENERGY PARTNERS GP LLC
PURSUANT TO 18 U.S.C. SECTION 1350

In
connection
with
this
Annual
Report
on
Form
10-K
of
SunCoke
Energy
Partners,
L.P.
for
the
fiscal
year
ended
December
31,
2018
,
I,
Fay
West,
Senior
Vice
President
and
Chief
Financial
Officer
of
SunCoke
Energy
Partners
GP
LLC,
the
general
partner
of
SunCoke
Energy
Partners,
L.P.,
hereby
certify
pursuant
to
18
U.S.C.
Section
1350,
as
adopted
pursuant
to
Section
906
of
the
Sarbanes-Oxley
Act
of
2002,
that:

This
Annual
Report
on
Form
10-K
for
the
fiscal
year
ended
December
31,
2018
fully
complies
with
the

requirements
of
Section
13(a)
or
15(d)
of
the
Securities
Exchange
Act
of
1934;
and

/s/
Fay
West

Fay
West

Senior
Vice
President
and

Chief
Financial
Officer

February
15,
2019

SunCoke Energy Partners
Mine Safety Disclosures for the Period Ended December 31, 2018

Exhibit 95.1

We
are
committed
to
maintaining
a
safe
work
environment
and
working
to
ensure
environmental
compliance
across
all
of
our
operations.
The
health
and

safety
of
our
employees
and
limiting
the
impact
to
communities
in
which
we
operate
are
critical
to
our
long-term
success.
We
employ
practices
and
conduct
training
to
help
ensure
that
our
employees
work
safely.
Furthermore,
we
utilize
processes
for
managing,
monitoring
and
improving
safety
and
environmental
performance.

We
have
consistently
operated
within
the
top
quartile
for
the
U.S.
Occupational
Safety
and
Health
Administration’s
recordable
injury
rates
as
measured
and
reported
by
the
American
Coke
and
Coal
Chemicals
Institute.
We
also
have
worked
to
maintain
low
injury
rates
reportable
to
the
U.S.
Department
of
Labor’s
Mine
Safety
and
Health
Administration
(“MSHA”).

The
following
table
presents
the
information
concerning
mine
safety
violations
and
other
regulatory
matters
that
we
are
required
to
report
in
accordance
with
Section
1503(a)
of
the
Dodd-Frank
Wall
Street
Reform
and
Consumer
Protection
Act.
Whenever
MSHA
believes
that
a
violation
of
the
Federal
Mine
Safety
and
Health
Act
of
1977
(the
“Mine
Act”),
any
health
or
safety
standard,
or
any
regulation
has
occurred,
it
may
issue
a
citation
which
describes
the
alleged
violation
and
fixes
a
time
within
which
the
operator
must
abate
the
violation.
In
these
situations,
MSHA
typically
proposes
a
civil
penalty,
or
fine,
that
the
operator
is
ordered
to
pay.
In
evaluating
the
following
table
regarding
mine
safety,
investors
should
take
into
account
factors
such
as:
(1)
the
number
of
citations
and
orders
will
vary
depending
on
the
size
of
a
coal
mine,
(2)
the
number
of
citations
issued
will
vary
from
inspector
to
inspector,
mine
to
mine
and
MSHA
district
to
district
and
(3)
citations
and
orders
can
be
contested
and
appealed,
and
during
that
process
are
often
reduced
in
severity
and
amount,
and
are
sometimes
dismissed.

The
mine
data
retrieval
system
maintained
by
MSHA
may
show
information
that
is
different
than
what
is
provided
in
the
table
below.
Any
such
difference
may
be
attributed
to
the
need
to
update
that
information
on
MSHA’s
system
or
other
factors.
Orders
and
citations
issued
to
independent
contractors
who
work
at
our
mine
sites
are
not
reported
in
the
table
below.
All
section
references
in
the
table
below
refer
to
provisions
of
the
Mine
Act.

Mine or Operating
Name/MSHA Identification
Number

Section 104
S&S Citations
(#)(2)

Section
104(b)
Orders (#)
(3)

Section
104(d)
Citations and
Orders (#)(4)

Section 110(b)
(2) Violations
(#)(5)

Section
107(a)
Orders (#)(6)

Total Dollar Value of
MSHA Assessments
Proposed ($)(7)

Received
Notice of
Pattern of
Violations
Under
Section 104(e)
(yes/no)(8)

Received
Notice of
Potential to
Have Pattern
Under
Section 104(e)
(yes/no)(9)

Total
Number of
Mining
Related
Fatalities (#)

Legal Actions
Pending as of
Last Day of
Period (#)(10)
(11)

Legal
Actions
Initiated
During
Period (#)
(12)

Legal
Actions
Resolved
During
Period (#)
(13)

Ceredo
Dock
/
46-09051

Quincy
Dock
/
46-07736

Belfry
#5
/
15-10789

Total

0 $

1,239

118

1,357

(1)

The
table
does
not
include
the
following:
(i)
facilities
which
have
been
idle
or
closed
unless
they
received
a
citation
or
order
issued
by
MSHA,
(ii)
permitted

mining
sites
where
we
have
not
begun
operations
or
(iii)
mines
that
are
operated
on
our
behalf
by
contractors
who
hold
the
MSHA
numbers
and
have
the

MSHA
liabilities.

(2)

Alleged
violations
of
mandatory
health
or
safety
standards
that
could
significantly
and
substantially
contribute
to
the
cause
and
effect
of
a
coal
or
other
mine

safety
or
health
hazard.

(3)

Alleged
failures
to
totally
abate
a
citation
within
the
period
of
time
specified
in
the
citation.

(4)

Alleged
unwarrantable
failure
(i.e.,
aggravated
conduct
constituting
more
than
ordinary
negligence)
to
comply
with
a
mining
safety
standard
or
regulation.

(5)

Alleged
flagrant
violations
issued.

(6)

Alleged
conditions
or
practices
which
could
reasonably
be
expected
to
cause
death
or
serious
physical
harm
before
such
condition
or
practice
can
be
abated.

(7)

Amounts
shown
include
assessments
proposed
during
the
year
ended
December
31,
2018
and
do
not
necessarily
relate
to
the
citations
or
orders
reflected
in

this
table.
Assessments
for
citations
or
orders
reflected
in
this
table
may
be
proposed
by
MSHA
after
December
31,
2018
.

(8)

Alleged
pattern
of
violations
of
mandatory
health
or
safety
standards
that
are
of
such
nature
as
could
have
significantly
and
substantially
contributed
to
the

cause
and
effect
of
coal
or
other
mine
health
or
safety
hazards.

(9)

Alleged
potential
to
have
a
pattern
of
violations
of
mandatory
health
or
safety
standards
that
are
of
such
nature
as
could
have
significantly
and
substantially

contributed
to
the
cause
and
effect
of
coal
or
other
mine
health
or
safety
hazards.

(10) This
number
reflects
legal
proceedings
which
remain
pending
before
the
Federal
Mine
Safety
and
Health
Review
Commission
(the
“FMSHRC”)
as
of

December
31,
2018
.
The
pending
legal
actions
may
relate
to
the
citations
or
orders
issued
by
MSHA
during
the
reporting
period
or
to
citations
or
orders

issued
in
prior
periods.
The
FMSHRC
has
jurisdiction
to
hear
not
only
challenges
to
citations,
orders,
and
penalties
but
also
certain
complaints
by
miners.

The
number
of
“pending
legal
actions”
reported
here
reflects
the
number
of
contested
citations,
orders,
penalties
or
complaints
which
remain
pending
as
of

December
31,
2018
.

(11) The
legal
proceedings
which
remain
pending
before
the
FMSHRC
as
of
December
31,
2018
are
categorized
as
follows
in
accordance
with
the
categories

established
in
the
Procedural
Rules
of
the
FMSHRC.

Mine or Operating Name/MSHA
Identification Number

Contests of Citations
and Orders (#)

Contests of Proposed
Penalties (#)

Complaints for
Compensation (#)

Ceredo
Dock
/
46-09051

Quincy
Dock
/
46-07736

Belfry
#5
/
15-10789

Total

Complaints for
Discharge,
Discrimination or
Interference Under
Section 105 (#)

Applications for
Temporary Relief (#)

Appeals of Judges’
Decisions or Orders
(#)

(12) This
number
reflects
legal
proceedings
initiated
before
the
FMSHRC
during
the
year
ended
December
31,
2018
.
The
number
of
“initiated
legal
actions”

reported
here
may
not
have
remained
pending
as
of
December
31,
2018
.

(13) This
number
reflects
legal
proceedings
before
the
FMSHRC
that
were
resolved
during
the
year
ended
December
31,
2018
.