SXC Suncoke Energy, Inc. - 10-K

Item 1A. Risk Factors

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 and adversely from recent results or from anticipated future results. In addition to the other information included in this Annual Report on Form 10-K and in our other filings with the SEC, 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.

However, these 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.

Risks Inherent in Our Business and Industry

Our cokemaking and industrial services businesses are subject to operating risks, some of which are beyond our control. Equipment failures or deterioration of assets, may lead to major incidents, production curtailments, shutdowns, impairments, or additional expenditures, which could materially and adversely affect our results of operations and financial condition.

Factors beyond our control could disrupt our cokemaking and industrial services operations, adversely affect our ability to service the needs of our customers and increase our operating costs, all of which could have a material and adverse effect on our results of operations. Adverse developments at our cokemaking facilities could significantly disrupt our ability to produce and supply coke, steam, and/or energy to our customers. Adverse developments at our industrial services operations could significantly disrupt our ability to provide scrap handling and sales, slag handling and sales, metals recovery, labor, handling, mixing, storage, terminalling, transloading and/or transportation services, of coal and other dry and liquid bulk commodities, to our customers. Our 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. Assets and equipment critical to these operations also may deteriorate or become depleted materially sooner than we currently estimate, resulting in additional maintenance spending or additional timely replacement capital expenditures.

Our cokemaking and industrial services operations are subject to significant hazards and risks, any of which could result in production and transportation difficulties and disruptions, equipment failures and risk of catastrophic loss, non-

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compliance with our operating permits, pollution, personal injury or wrongful death claims and other damage to our properties and the property of others. Such hazards and risks include, but are not limited to:

• 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 industrial services operations at a site for a period of time;

• processing and plant equipment failures or malfunction, operating hazards and unexpected maintenance problems affecting our cokemaking or industrial services operations, or our customers; and

• adverse weather conditions and natural disasters, such as severe winds, heavy rains or snow, flooding, extreme temperatures and other natural events, including those resulting from climate change, affecting our cokemaking or industrial services operations, transportation, or our customers;

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, energy and/or steam. If any of these conditions or events occur, our cokemaking or industrial services operations may be disrupted, operating costs could increase significantly and we could incur substantial losses. Additionally, the inability to provide slag services to customers could impact our industrial services operations. Such disruptions in our operations could materially and adversely affect our financial condition or results of operations.

If our assets do not generate the amount of future cash flows that we expect, or 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.

The financial performance of our cokemaking and industrial services businesses is substantially dependent upon a limited number of customers, and the loss of any of these customers, or any failure by them to perform under their contracts with us, could materially and adversely affect our financial condition, results of operations and cash flows.

Substantially all of our sales are to a limited number of customers. We expect these customers, and/or their respective successors in interest, by operation of merger, or otherwise, to continue to account for a significant portion of our revenues 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 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 industrial 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 provide industrial 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.

Impairment in the carrying value of long-lived assets could materially and adversely affect our business, financial condition and results of operations.

We have a significant amount of long-lived assets 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

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

Events and conditions that could result in impairment in the value of our long-lived assets include, but are not limited to: negotiations related to renewals of certain of our long-term, take-or-pay agreements, new contracts and/or modifications entered into in the future, termination or non-renewal of existing contracts, and other factors leading to a reduction in expected long-term sales or profitability, the impact of a downturn in the global economy, competition, advances in technology, adverse changes in the regulatory environment, 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.

During the fourth quarter of 2025, the Company concluded a triggering event occurred requiring a review for impairment at our Haverhill I cokemaking facility asset group as a result of Algoma Steel's breach of contract, which negatively impacted forecasted future cash flows. The Company performed an impairment test utilizing the income approach, which resulted in a $90.1 million impairment charge. See further discussion in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

We face competition, both in our cokemaking operations and in our industrial services business, which has the potential to reduce demand for our products and services, and that could materially and adversely affect our financial condition and results of operations.

We face competition, both in our cokemaking operations and in our industrial services 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 or alternatives that reduce the amount of GHG emissions from the process. For example, electric arc furnace technology is a commercially proven process widely used in the U.S. As these alternative processes for production of steel become more widespread, the demand for blast furnace 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. 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 blast furnace coke, including the coke we produce, may be significantly reduced.

• Industrial services business : Other logistics facilities and independent terminal operations in some areas may compete directly with our logistics facilities. In some markets, trucks may competitively deliver products to certain shorter-haul destinations, resulting in reduced utilization of existing terminal capacity. In the future, additional logistics facilities and terminals with rail and/or barge access may be constructed in the Gulf Coast and East Coast regions, and such additional facilities and terminals could compete directly with us in specific markets now served by our CMT and KRT facilities, respectively. Other logistics facilities, both global and domestic, may compete with our coal handling exports out of the Gulf Region, which may reduce the demand for our CMT facility. In addition, decreased throughput and utilization of our logistics assets could result indirectly due to competition in: (i) 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; (ii) the steel industry from processes such as electric arc furnaces, or blast furnace injection of pulverized coal or natural gas reducing demand for metallurgical coals handled through our logistics facilities; and/or (iii) the barge unloading business from service alternatives, such as mid-stream operations. In addition, other companies may be able to provide services to our customers at the same or reduced cost. Any reduction in domestic or global demand for steel has the potential to reduce the need for our industrial services operations. These factors have the potential to reduce demand for our services and slag sales and could materially and adversely affect our financial condition and results of operations.

In addition, there is competitive risk to our blast furnace and foundry cokemaking operations due to dumping, including excess blast furnace coke in the global market and foundry coke from the European Union dumped at below market prices into the U.S., displacing domestic production and presenting significant barriers to compete internationally. Changes in tariff regulations and trade policy also have the potential to impact our financial condition and results of operations by making our coke and our customers’ steel either more or less competitive with those products manufactured in other countries. These competition risks could materially and adversely affect our future revenues and profitability.

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We are subject to extensive environmental, health, and safety 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.

Our operations are subject to strict regulation by federal, state and local authorities with respect to: discharges of substances into the surrounding environment including the air, water and ground; compliance with the NAAQS and other emissions standards; management and disposal of hazardous substances and wastes; cleanup of contaminated sites; protection of surface water and groundwater quality and availability; and protection of plants and wildlife.

Our operations are also subject to strict regulation by federal, state and local authorities, including OSHA and MSHA, with respect to; protection of employee health and safety; reclamation and restoration of properties after completion of mining or drilling; and installation of safety equipment in our facilities. Regulatory changes implemented by OSHA, MSHA, or similar agencies could impose additional costs on us. We operate at facilities that may be inherently dangerous workplaces and oftentimes involve extreme conditions. If serious accidents or fatalities occur or our safety record were to deteriorate, existing service arrangements could be terminated. Adverse experience with hazards and claims could result in liabilities caused by, among other things, injury or death to persons, which could have a negative effect on our ability to attract and retain employees or our reputation with existing or potential new customers and prospects for future business.

For a description of environmental, health and safety laws and matters applicable to us and associated risks, see “Item 1. Business-Legal and Regulatory Requirements.”

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.

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. In addition, such regulatory requirements, including those related to various CAA programs, may change in the future in a manner that could result in substantially increased capital, operating and compliance costs, materially and adversely affecting our cash flows, financial condition, or results of operations.

Our operations may impact the environment or cause exposure to hazardous pollutants, which could result in material liabilities to us.

Our operations result in emissions of various substances to the air, including hazardous air pollutants. Our operations also generate solid and hazardous waste. We have in the past and could in the future be subject to claims under federal, state and local laws and regulations arising from these activities, including for the investigation and clean-up of soil, surface water, or groundwater. Some environmental laws also can impose liability regardless of fault or legality at the time in question, including the characterization of materials. We previously have been and could again in the future be subject to litigation for alleged personal injury or property damage arising from claimed exposure to emissions or hazardous substances allegedly used, released, or disposed of by us, as well as litigation related to climate change by governments, private entities, or individuals. We make every effort to avoid litigation. However, such matters are not totally within our control, and due to the inherently uncertain nature of litigation, we cannot predict the outcome of such matters. Environmental impacts resulting from our operations, including exposures to emissions, hazardous substances, or wastes associated with our operations, could result in costs and liabilities that could adversely impact our financial condition and results of operations.

We may be unable to renew permits or leases necessary for our operations, and may become subject to new and more stringent regulations, which could materially and adversely affect our production, cash flows or profitability.

Our cokemaking and industrial services operations, including our generation of electricity, require us to comply with numerous regulations and maintain a number of permits issued by various federal, state and local agencies and regulatory bodies that impose strict requirements on various environmental and operational matters. Our industrial services operations are in some cases dependent upon the permits of the steel mill customers where they operate. The regulations, permitting rules, and the interpretations of these regulations and rules, are complex, change frequently, and are often subject to discretionary interpretations by our regulators, all of which may make compliance more costly, difficult or impractical, and may possibly preclude the continuance of ongoing operations or the development of future cokemaking, energy generation, and/or industrial services facilities. For example, the United States Environmental Protection Agency finalized stringent new

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Clean Air Act Maximum Achievable Control Technology standards in 2024 that are now being litigated and reconsidered by the agency. Non-governmental organizations, environmental groups and individuals have certain rights to engage in the regulatory and permitting process, and may comment upon, or object to, the regulatory changes and requested permits. Such persons may also have the right to bring lawsuits to challenge the regulatory changes and renewal of permits, or the validity of environmental evaluations related thereto. If any permits or leases are not renewed, or if regulations are promulgated or renewed permits are conditioned in a manner that restricts our ability to efficiently and economically conduct our operations, it could have a material and adverse effect on our financial condition and results of operations. Similarly, the Federal Energy Regulatory Commission (“FERC”) regulates the sales of electricity from our Haverhill and Middletown facilities, exempts the facilities from certain requirements under the Public Utility Regulatory Policies Act of 1978 (“PURPA”), and grants requests for authority to sell electricity from these facilities at market-based rates. Changes to the interpretation and application of these rules by FERC may occur from time to time, and could adversely impact the future results of our power generation business.

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 materially and adversely affect our financial condition, results of operations or cash flows.

We maintain insurance policies that provide limited coverage for some, but not all, potential risks and liabilities associated with our business. We may not obtain insurance 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 may not be able to renew our 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. We must compensate employees for work-related injuries. If we do not make adequate provision for our workers' compensation liabilities, or we are pursued for applicable sanctions, costs, and liabilities, our operations and our profitability could be adversely affected. Even where insurance coverage applies, insurers may contest their obligations to make payments. Our financial condition, results of operations and cash flows could be materially and adversely affected by losses and liabilities from uninsured or under-insured events, as well as by delays in the payment of insurance proceeds, or the failure by insurers to make payments.

We may not be able to successfully implement our growth strategies or plans, and we may experience significant risks associated with future acquisitions, investments and/or divestitures. 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. We may not realize the expected financial returns from 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. 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. 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.

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.

We regularly review strategic opportunities to further our business objectives, and may eliminate assets that do not meet our return-on-investment criteria. 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 adverse effect on our results of operations and our financial position, including reduced cash

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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.

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 industrial services increases due to price or usage, including cost of supplies, equipment, metallurgical coal or labor, 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.

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.

Our success depends, in part, on the quality, efficacy and safety of our operations and services. If our operations or services do not meet applicable safety standards, our relationships with customers could suffer and we could lose business or become subject to liability or claims. In addition, our cokemaking and industrial services 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.

Physical effects attributed to, and various parties’ efforts to respond to climate-related changes, could materially and adversely affect our operations and impose significant costs on our business and our customers and suppliers.

We are subject to various climate-related risks. Various policymakers have adopted, or are considering adopting, regulations regarding GHGs, particularly from fossil fuels, which are integral to our cokemaking and industrial services businesses. Such regulations range from provisions to reduce GHG emissions, either directly or indirectly (such as through carbon pricing), to requirements for disclosure of climate-related information, any of which may result in substantial compliance costs. Moreover, pressure to reduce GHG emissions may also contribute to competition with alternatives to our products.

Our operations may be impacted by climate-related changes in weather, temperature, hydrological patterns, and/or increased frequency or severity of natural disasters. Extreme weather and temperature conditions, such as storms, fires, and flooding, may increase our costs, impact our production capabilities, damage our facilities, contribute to workplace hazards, and materially and adversely affect our ability to procure raw materials, and/or manufacture and transport our products. While we aim to manage such risks, we cannot guarantee that such mitigation efforts will be successful, or that insurance will continue to be available at costs we deem acceptable. Any of these transition or physical risks associated with climate change could materially and adversely affect our reputation, financial condition, and results of operations.

Stakeholder scrutiny of sustainability matters could materially and adversely affect our business and our stock price.

There continues to be significant attention to climate, civil and human rights, and other sustainability issues by various stakeholders. Responding to such matters can be complex. Methodologies and data for measuring and reporting on sustainability matters continue to evolve, as does our own approach to such matters, and we cannot guarantee that our approach will align with the preferences or interpretations of any particular stakeholder. While we take actions to manage our sustainability profile, such initiatives may be costly and may not have the desired effect.

Various regulations regarding sustainability matters have been adopted or proposed, but such regulations are not uniform, and can increase the complexity and cost of compliance. We may incur costs to respond to such regulation, or activism from both advocates and opponents of sustainability measures. Many of our customers, business partners, and suppliers may be subject to similar expectations, which could create additional risks, including risks unknown to us. Failure to appropriately navigate any of these considerations could materially and adversely impact our reputation, financial condition, and/or results of operations.

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Risks Related to Our Cokemaking Business

If a substantial portion of our agreements to supply coke, energy, and/or steam are modified or terminated or a contract is breached, our cash flows, financial position, permit compliance, results of operations and/or carrying value of our long-lived assets 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, energy and steam sales under long-term agreements. If a substantial portion of these agreements are modified or terminated or if force majeure is exercised or a contract is breached, 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/or 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.

At the end of the third quarter of 2025, we were notified of Algoma Steel Inc's breach of contract and refusal to accept any additional coke tons. We are actively pursuing all avenues to enforce the contract and recover any financial losses.

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, energy, or steam 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, energy, or steam from us, or if we were unable to sell coke or energy 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 idle our cokemaking operations if we do not have adequate customer demand. If a customer refuses to take or pay for our coke, we may choose to continue to operate our coke ovens even though we may not be able to sell our coke immediately or may incur significant additional operational costs and fees related to vendor contracts, which may have a material and adverse effect on our cash flows, financial position or results of operations.

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 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, exports of blast furnace and/or foundry 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 blast furnace and/or foundry 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 into the North American spot coke and export coke markets, 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, coal-to-coke yields 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 long-term 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

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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 long-term 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. To the extent that we do not meet the coal-to-coke yield standard in an agreement, we are responsible for the cost of the excess coal used in the cokemaking process.

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.

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 that meets our quality specifications, or that safety, 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 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 blends that we use to produce coke. We have entered into agreements with coal mixing service providers that are coterminous with our coke sales agreements. 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 coke production obligations at our Jewell cokemaking facility and our Haverhill cokemaking facility require us to deliver coke to certain customers via railcar. We have entered into annual rail transportation agreements to meet these obligations. Disruption of these transportation services because of weather-related problems, including those related to climate change, 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.

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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 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 U.S. 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 Industrial Services Business

The growth and success of our industrial services business depends upon our ability to find and contract on-site scrap and slag handling and processing services as well as adequate throughput volumes, and an extended decline in demand for these services and coal could affect the customers for our industrial services business adversely. As a consequence, the operating results and cash flows of our industrial services business could be materially and adversely affected.

The financial results of our industrial services business segment are significantly affected by the ability to secure contracts for on-site scrap and slag handling and processing as well as the demand for both thermal coal and metallurgical coal. An extended decline in our customers’ demand for these services and thermal or metallurgical coals, including as a result of cyclical downturns as well as legislation or regulations promoting renewable energy or limiting carbon emissions from the energy sector, could result in a reduced need for the material handling and/or mixing services we offer, thus reducing throughput and utilization of our industrial services assets. Demand for such services may fluctuate due to factors beyond our control:

• Scrap and slag handling and processing : may be impacted by cyclical downturns, prolonged slowdowns in steel mill production, excess production capacity and changes in outsourcing practices. The resource recovery and slag optimization technologies business can also be adversely impacted by the reduction in the selling prices of its materials, which are in some cases market-based and vary based upon the current fair value of the components being sold. Therefore, the revenue generated from the sale of such materials varies based upon the fair value of the commodity components being sold. Demand for the Company’s products and services may be adversely impacted by any decrease in regulatory or market scrutiny of our customers’ environmental and sustainability practices and any decision by our customers to focus resources currently committed to such practices into other business initiatives.

• 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, including natural gas, and governmental regulation. For example, state and federal mandates and market demand for increased use of electricity from renewable energy sources, or mandates for the retrofitting of existing coal-fired generators with pollution control systems, 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

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availability and cost of capital. A material decrease in coal mining production in the areas of operation for our industrial services business, whether as a result of depressed commodity prices or otherwise, could result in a decline in the volume of coal processed through our industrial services 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 industrial services 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 industrial services 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 industrial services business.

The geographic location of CMT 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, floods, or other potential effects of climate change, 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 Related to International Operations

Our global presence subjects us to a variety of risks and legal requirements arising from doing business internationally. If we are unable to successfully manage such risks and legal requirements, our results of operations, financial condition, liquidity and cash flows could be materially and adversely affected.

We maintain coke operations in Brazil and our industrial services business segment also currently operates in four countries, including the United States, Brazil, Slovakia and Spain. Our international operations require us to comply with a number of U.S. and international laws and regulations, including those involving anti-bribery, anti-corruption and anti-fraud. In particular, our international operations are subject to U.S. and foreign anti-corruption laws and regulations, including the regulations imposed by the Foreign Corrupt Practices Act (“FCPA”), which generally prohibits issuers and their strategic or local partners, agents or representatives, which we refer to as our intermediaries (even if those intermediaries are not themselves subject to the FCPA or other similar laws), from making improper payments to foreign officials for the purpose of obtaining or keeping business or obtaining an improper business benefit. The FCPA also imposes accounting standards and requirements on publicly traded U.S. corporations and their foreign affiliates, which, among other things, are intended to prevent the diversion of corporate funds to the payment of bribes and other improper payments, and to prevent the establishment of “off the books” slush funds from which improper payments can be made.

Our global footprint also exposes us to a variety of other risks that may adversely affect our results of operations, financial condition, liquidity and cash flows. Such risks include, but may not be limited to, the following:

• periodic governmental interventions and/or unstable economic cycles or downturns in the countries in which we do business;

• imposition of, or increases in, currency exchange controls and hard currency shortages;

• customs matters and changes in monetary, taxation, credit tariff and/or other trade policies;

• changes in regulatory requirements in the countries in which we do business, including environmental and permitting requirements;

• changes in tax regulations, higher tax rates in certain jurisdictions and potentially adverse tax consequences including potential restrictions on repatriation of earnings, adverse tax withholding requirements, and "double taxation";

• longer payment cycles and difficulty in collecting accounts receivable;

• complexities in complying with a variety of U.S. and foreign government laws, controls and regulations;

• political, economic and social instability, civil and political unrest, terrorist actions and armed hostilities in the regions or countries in which, or adjacent to which, we do business;

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• inflation rates in the countries in which we do business;

• complying with complex labor laws in foreign jurisdictions;

• laws in various international jurisdictions that limit the right and ability of subsidiaries to pay dividends and remit earnings to affiliated companies unless specified conditions are met;

• sovereign risk related to international governments, including, but not limited to, governments stopping interest payments or repudiating their debt, nationalizing private businesses or altering foreign exchange regulations; and

• uncertainties arising from local business practices, cultural considerations and international political and trade tensions.

Accordingly, our inability to successfully mitigate the risks associated with our international operations could have a material adverse effect on our results of operations, financial condition, liquidity, and/or cash flows.

Risks Related to Indebtedness, Liquidity and Financial Position

We may need additional capital in the future to meet our financial obligations and to pursue our business objectives. Additional capital may not be available on favorable terms, or at all, which could compromise our ability to meet our financial obligations and grow our business.

We may need to raise additional capital to fund operations in the future or to finance acquisitions or other business objectives. Such additional capital may not be available on favorable terms or at all. Lack of sufficient capital resources could significantly limit our ability to meet our financial obligations or to take advantage of business and strategic opportunities. Any additional capital raised through the sale of equity or convertible debt securities would dilute stock ownership, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock. Any debt financing we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, we may be required to delay or reduce the scope of our business strategy.

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

Over the next five years, we have $693.0 million of total consolidated debt maturing. See Note 12 to our 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.

We may be adversely affected by the effects of inflation.

Inflation has the potential to adversely affect our liquidity, business, financial condition and results of operations by increasing our overall cost structure. The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, increased costs of labor, weakening exchange rates and other similar effects. Although we may take measures to mitigate the impact of this inflation, if these measures are not effective, our business, financial condition, results of operations and liquidity could be materially adversely affected. Even if such measures are effective, there could be a difference between the timing of when these beneficial actions impact our results of operations and when the cost of inflation is incurred.

Our level of indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations under our credit facilities and other debt documents. Further, our credit facilities contain operating and financial covenants that may restrict our business and financing activities.

Subject to the limits contained in our credit agreements 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, distributions or other general corporate requirements;

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• 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.

Our ability to meet our debt obligations and reduce our level of indebtedness depends upon our future performance and general economic, financial, business, and other factors, many of which are beyond our control. Factors affecting our ability to raise cash through an offering of our common stock or a refinancing of our debt include financial market conditions, the value of our assets, and our performance at the time we need capital.

In addition, the credit agreement governing our credit facilities contains 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, or covenants of any new agreements, could result in an event of default which, if not cured or waived, could result in the acceleration of all our debt. In the event of an acceleration of all our debt, we may not have sufficient cash on hand to repay the indebtedness in full or refinance such debt on favorable terms, or at all. Such event could materially adversely affect our business, financial condition and results of operations.

General Risks

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.

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 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.

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.

A significant portion of our employees are represented by labor unions in a number of countries under various collective bargaining agreements with varying durations and expiration dates. There can be no assurance that any current or future issues with our employees will be resolved or that we will not encounter future strikes, work stoppages or other types of conflicts with labor unions or our employees. We rely at these 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. In addition, existing collective bargaining agreements may not prevent a strike or work stoppage at the Company's facilities in the future. A prolonged labor dispute, which may include strikes, work stoppages, or other types of labor disputes, 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. It is also possible that, in the future, additional employee groups may choose to be represented by a labor union.

We may also be subject to general country strikes or work stoppages unrelated to our business or collective bargaining agreements. A work stoppage or other limitations on production at our facilities for any reason could have an adverse effect on our business, results of operations, financial condition and cash flows. In addition, many of our customers and suppliers have unionized work forces, and may experience a lack of qualified employees. Strikes or work stoppages, as

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well as labor shortages, experienced by our customers or suppliers could have an adverse effect on our business and supply chain, results of operations and financial condition.

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.

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.”

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, which may cause damage to our brand and reputation, material financial penalties, and legal liability and which could materially adversely affect our business, results of operations, and financial condition.

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 business, customers, dealers, suppliers, employees and other sensitive matters. We face numerous and evolving cybersecurity risks that

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threaten the confidentiality, integrity and availability of our and third-party technology systems and confidential information, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, as well as through diverse attack vectors, such as social engineering/phishing, malware (including ransomware), malfeasance by insiders, human or technological error, and as a result of malicious code embedded in open-source software, or misconfigurations, bugs or other vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) technology systems, products or services. 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. Additionally, any integration of artificial intelligence in our or any service providers’ operations, products or services is expected to pose new or unknown cybersecurity risks and challenges. 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. As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents, or to avoid a material adverse impact to our information technology systems, confidential information or business. There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our information technology systems, confidential information or business. Furthermore, given the nature of complex systems, software and services like ours, and the scanning tools that we deploy across our networks and products, we regularly identify and track security vulnerabilities. We are unable to comprehensively apply patches or confirm that measures are in place to mitigate all such vulnerabilities, or that patches will be applied before vulnerabilities are exploited by a threat actor. A cyber-attack could have a material adverse effect on our competitive position, reputation, results of operations, financial condition and cash flows.

We and certain of our third-party providers regularly experience cyberattacks and other incidents, and we expect such attacks and incidents to continue in varying degrees. While to date no incidents have had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future.

As cyber-attacks continue to evolve, including with the use of artificial intelligence, 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. Finally, we cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.

We are or may become subject to privacy and data protection laws, rules and directives relating to the processing of personal data in the states and 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, but not limited to 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. Further, there has been a substantial increase in legislative activity and regulatory focus on data privacy and security in the United States and elsewhere, including in relation to cybersecurity incidents. 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.

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, as defined in 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, expected future developments, expectations and intentions, and they involve known and unknown risks that are difficult to predict. As a result, 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 generally accepted accounting principles (“GAAP”) and certain other financial data that is prepared using a non-GAAP measure. For a reconciliation of the non-GAAP measure to its most comparable GAAP component, see “Non-GAAP Financial Measures” in this Item 7.

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.

2025 Overview

Our consolidated results of operations in 2025 were as follows:

Years Ended December 31,

Increase (Decrease)

(Dollars in millions)

Net (loss) income

Net cash provided by operating activities

Adjusted EBITDA (1)

(1) See “Non-GAAP Financial Measures” in this Item 7 below for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement.

Operating results during the year ended December 31, 2025 primarily reflect a $90.1 million ($68.1 million net of tax) impairment charge at our Haverhill I cokemaking facility as a result of Algoma Steel's breach of contract. Additionally, operating results reflect lower pricing in our Domestic Coke segment mainly driven by the mix of contracted and non-contracted blast coke sales in the current year period, lower volumes due to unfavorable coal-to-coke yields, lower volumes due to Algoma Steel's breach of contract , the impact of the Granite City contract extension economics, lower terminals handling volumes due to market conditions as well as the absence of a $9.5 million pre-tax gain related to the extinguishment of certain black lung liabilities during the prior year period. Operating results for the year ended December 31, 2025 include five months of operating results associated with the acquisition of Flame Aggregator, LLC (“Phoenix Global”). Net loss was reduced during the current year period by income tax benefits recognized on investment tax credits and the impairment charge discussed above. Operating cash flows during the current period primarily reflect payments to settle liabilities assumed as part of the acquisition of Phoenix Global, an increase in income tax receivables related to capital investment tax credits and the unfavorable operating results discussed above. See detailed analysis of the year's results throughout this MD&A.

We returned meaningful capital to our shareholders through the declaration and payment of a dividend of $0.12 per share during each quarter of 2025.

Recent Developments

• One Big Beautiful Bill Act. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. Following the enactment of the OBBBA, the Company recognized the tax effects of the legislation in the interim period that included the enactment date, as required under ASC 740, Income Taxes. The Company has evaluated the impact of the OBBBA on cash taxes, deferred tax assets and liabilities and has reflected these effects in the consolidated financial statements for the year ended December 31, 2025.

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• Revolving Facility Extension. On July 25, 2025, we amended and extended the maturity of our revolving credit facility (“Revolving Facility”) to July 2030 under substantially similar terms. The amendment also reduced the Revolving Facility capacity by $25.0 million to $325.0 million.

• Acquisition of Phoenix Global. On August 1, 2025, we completed the acquisition of Phoenix Global, a privately held provider of mission-critical mill services to major steel producing companies. We acquired Phoenix Global for preliminary purchase consideration of $295.8 million. See Note 3 to our consolidated financial statements for further detail.

• Algoma Coke Supply Contract. At the end of the third quarter of 2025, we were notified of Algoma Steel Inc's breach of contract and refusal to accept any additional coke tons. We are actively pursuing all avenues to enforce the contract and recover any financial losses.

• Haverhill II Contract Extension. In November 2025, the Haverhill II long-term, take-or-pay agreement with Cleveland-Cliffs Steel Holding Corporation and Cleveland-Cliffs Steel LLC, subsidiaries of Cleveland-Cliffs Inc. and collectively referred to as “Cliffs Steel,” was extended through December 31, 2028. Under the extension, the Company will provide 500 thousand tons of metallurgical coke annually.

• Haverhill I Closure. In the fourth quarter of 2025, the Company made the decision to optimize its coke fleet and close its Haverhill I cokemaking facility in the first quarter of 2026, resulting in the impairment charges discussed above.

• Granite City Contract Extension. In January 2026, the Granite City long-term, take-or-pay agreement with United States Steel Corporation (“U.S. Steel”) was extended through December 31, 2026. Under the extension, the Company will provide 590 thousand tons of metallurgical coke. The provisions and economics of this extension remain similar to those included in the previous extensions executed in 2024 and 2025.

Items Impacting Comparability

• U.S. Department of Labor’s Division of Coal Mine Workers Compensation (“DCMWC”) Regulatory Exemption. In August 2024, the Company reached an agreement with the DCMWC and made a payment of $36.0 million to extinguish the majority of its self-insured federal black lung liabilities. As a result of the agreement, the Company recognized a $9.5 million pre-tax gain within selling, general and administrative expenses on the Consolidated Statements of Operations during the year ended December 31, 2024. The agreement resulted in a reduction of $45.5 million of the Company's black lung liability on the Consolidated Balance Sheets. See Note 13 to our consolidated financial statements for further detail.

• Acquisition of Phoenix Global. As discussed above, we completed the acquisition of Phoenix Global on August 1, 2025 and five months of Phoenix Global results are included in the consolidated financial statements.

Consolidated Results of Operations

The following section includes year-over-year analysis of consolidated results of operations for the year ended December 31, 2025 as compared to the year ended December 31, 2024. See “Analysis of Segment Results” later in this Item 7 for further details of these results. Refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2024 Annual Report on Form 10-K for the year-over-year analysis of consolidated results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

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Years Ended December 31,

Increase (Decrease)

(Dollars in millions)

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

Long-lived asset impairment

Total costs and operating expenses

Operating (loss) income

Interest expense, net

(Loss) income before income tax (benefit) expense

Income tax (benefit) expense

Net (loss) income

Less: Net income attributable to noncontrolling interests

Net (loss) income attributable to SunCoke Energy, Inc.

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 decreased during 2025 compared to the same prior year period, driven by lower pricing in our Domestic Coke segment mainly driven by the mix of contracted and non-contracted blast coke sales in the current year period, lower contracted coke tons delivered due to Algoma Steel's breach of contract, the impact of the Granite City contract extension economics and the impact of the pass-through of lower coal prices on our long-term, take-or-pay agreements. Additionally, sales and other operating revenue during 2025 were negatively impacted by lower volumes due to unfavorable coal-to-coke yields. The decreases in sales and other operating revenue and costs of products sold and operating expenses were partially offset by the inclusion of five months of Phoenix Global results.

Selling, General and Administrative Expenses. S elling, general and administrative expenses increased during 2025, reflecting transaction costs of $10.1 million incurred related to the acquisition of Phoenix Global as well as the absence of a $9.5 million gain, which was the result of the extinguishment of certain liabilities related to our legacy coal mining business in the prior year period. See Note 13 to our consolidated financial statements for further detail. Additionally, s elling, general and administrative expenses during 2025 further increased due to the inclusion of Phoenix Global's costs in the current year period. These increased costs were partially offset by lower employee related expenses and lower legal expenses in the current year period.

Depreciation and Amortization Expense. The increase to depreciation and amortization expense during 2025 reflects the inclusion of Phoenix Global's expense in the current year period. This increase was partially offset by the expiration of the useful lives of assets in our Domestic Coke segment placed into service in prior periods.

Long-lived Asset Impairment. During the fourth quarter of 2025, a triggering event occurred requiring a review for impairment at our Haverhill I cokemaking facility, which resulted in a $90.1 million impairment charge. See Note 7 to our consolidated financial statements for further detail.

Interest Expense, net. Interest expense, net, during 2025 increased as a result of interest incurred on Revolving Facility borrowings related to the acquisition of Phoenix Global.

Income Tax (Benefit) Expense. Income tax (benefit) expense during 2025 benefited from an analysis conducted as part of tax planning on the Company's capital investments under Section 48 of the Internal Revenue Code as well as the income tax impact of the Haverhill I long-lived asset impairment charge, which resulted in a net tax benefit. This benefit was partially offset by nondeductible transaction costs in connection with the acquisition of Phoenix Global. See Note 5 to our consolidated financial statements for further detail.

Noncontrolling Interest. Net i ncome attributable to noncontrolling interests represents a 14.8 percent third-party interest in our Indiana Harbor cokemaking facility and fluctuates with the financial performance of that facility.

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Results of Reportable Business Segments

Following the acquisition of Phoenix Global and as discussed in Note 20 – Business Segment Information, we updated our reportable segments and have recast all segment information for all prior periods presented herein to reflect this change.

We report our business results through two reportable segments:

• Domestic Coke consists of our Jewell facility, located in Virginia, our Indiana Harbor facility, located in Indiana, our Granite City facility located in Illinois, and our Middletown and Haverhill facilities located in Ohio.

• Industrial Services consists of logistics terminals including CMT, located in Louisiana, KRT, located in West Virginia, and Lake Terminal, located in Indiana. Lake Terminal is located adjacent to our Indiana Harbor cokemaking facility. Additionally, Industrial Services includes fifteen molten slag removal, handling and processing operating sites across the United States, Brazil, Slovakia and Spain.

Corporate expenses that can be identified with a segment have been included in determining segment results. The remainder is included in Corporate and Other, including licensing and operating fees payable to us under long-term contracts with ArcelorMittal Brazil as well as the expenses related to those operations and activity from our legacy coal mining business, which is not considered a reportable segment and therefore, not included in our segment information in Note 20. However, we have included Corporate and Other within our operating data below.

Management believes Adjusted EBITDA is an important measure of operating performance, which is used by the chief operating decision maker as one of the measurements to help determine the allocation of costs and resources to our reportable segments. Adjusted EBITDA should not be considered a substitute for the reported results prepared in accordance with GAAP. See the “Non-GAAP Financial Measures” section for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement.

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Segment Operating Data

The following table sets forth financial and operating data by segment for the years ended December 31, 2025 and 2024:

Years Ended December 31,

Increase (Decrease)

(Dollars in millions, except per ton amounts)

Sales and other operating revenue:

Domestic Coke

Industrial Services

Industrial Services intersegment sales

Elimination of intersegment sales

Total sales and other operating revenue reportable segments

Corporate and other, net (1)

Total Sales and other operating revenue

Adjusted EBITDA:

Domestic Coke

Industrial Services

Total Adjusted EBITDA reportable segments

Corporate and Other, net (1)

Total Adjusted EBITDA (2)

Coke Operating Data:

Domestic Coke capacity utilization (3)

Domestic Coke production volumes (thousands of tons)

Domestic Coke sales volumes (thousands of tons)

Domestic Coke Adjusted EBITDA per ton (4)

Industrial Services Operating Data:

Terminals handling volumes (thousands of tons)

Steel customer volumes serviced (thousands of tons)

(1) Corporate and Other, net is not a reportable segment and includes the results of Brazil cokemaking operations.

(2) See the “Non-GAAP Financial Measures” section below for both the definition of Adjusted EBITDA and the reconciliation from GAAP to the non-GAAP measurement.

(3) The production of foundry coke tons does not replace blast furnace coke tons on a ton for ton basis, as foundry coke requires longer coking time. The Domestic Coke capacity utilization is calculated assuming a single ton of foundry coke replaces approximately two tons of blast furnace coke.

(4) Reflects Domestic Coke Adjusted EBITDA divided by Domestic Coke sales volumes.

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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:

Sales and other operating revenue

Adjusted EBITDA

(Dollars in millions)

Beginning

Volume (1)

Price (2)

Operating and maintenance costs (3)

Energy and other (4)

Ending

(1) Volumes during 2025 were negatively impacted by lower coal-to-coke yields, lower contracted coke tons delivered due to Algoma Steel's breach of contract and lower coke tons in the Granite City contract extension.

(2) The pass-through of lower coal prices decreased sales and other operating revenue during 2025. Further, sales and other operating revenue and Adjusted EBITDA decreased during 2025 as a result of lower pricing on our non-contracted blast coke sales and the impact of lower economics on the Granite City contract extension. Additionally, Adjusted EBITDA was negatively impacted by lower coal-to-coke yields on our long-term, take-or-pay agreements.

(3) Operating and maintenance costs during 2025 benefited from lower planned maintenance outage costs in the current year as well as the timing of other maintenance costs.

(4) Energy and other increased due to favorable energy pricing, which was partially offset by lower energy sales volumes as a result of energy-generating asset outages in the current year period.

Industrial Services

Sales and other operating revenues, exclusive of intersegment sales, was $187.8 million in 2025 compared to $83.0 million in the corresponding prior year period. Adjusted EBITDA, inclusive of the impact of intersegment transactions, was $62.3 million in 2025 , compared to $50.4 million , in the corresponding prior year period. Industrial services results during 2025 include the results of five months of Phoenix Global. Sales and other operating revenues and Adjusted EBITDA for 2025 were negatively impacted by lower transloading volumes due to market conditions and lower transloading pricing at CMT driven by the absence of an index price adjustment benefit as compared to the prior year period.

Corporate and Other

Corporate and Other Adjusted EBITDA represented a loss of $13.1 million in 2025 compared to a loss of $12.3 million in 2024. This increase was primarily driven by the absence of a $9.5 million gain, which was the result of the extinguishment of certain liabilities related to our legacy coal mining business in the prior year period. These increases were partially offset during 2025 by lower employee related expenses and lower legal expenses.

Non-GAAP Financial Measures

In addition to the GAAP results provided in this Annual Report on Form 10-K, we have provided a non-GAAP financial measure, Adjusted EBITDA. Our management, as well as certain investors, use this non-GAAP measure to analyze our current and expected future financial performance. 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.

The Company evaluates the performance of its segments based on segment Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and amortization (“EBITDA”), adjusted for any impairments, restructuring costs, gains or losses on extinguishment of debt, gains or losses on derivative instruments, site closure costs and/or transaction costs (“Adjusted EBITDA”). EBITDA and Adjusted EBITDA do not represent and should not be considered alternatives 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 in assessing operating performance. Adjusted EBITDA provides useful information to investors because it highlights trends in our business that may not otherwise be

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apparent when relying solely on GAAP measures and because it eliminates items that have less bearing on our operating performance. EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, and they should not be considered a substitute for net income, or any other measure of financial performance presented in accordance with GAAP. Additionally, other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Reconciliation of Non-GAAP Financial Measures

Below is a reconciliation of Adjusted EBITDA to net (loss) income, which is its most directly comparable financial measure calculated and presented in accordance with GAAP:

Years Ended December 31,

(Dollars in millions)

Net (loss) income

Add:

Depreciation and amortization expense

Interest expense, net

Long-lived asset impairment (1)

Income tax (benefit) expense

Loss on derivative forward contracts

Restructuring costs (2)

Transaction costs (3)

Site closure costs (4)

Adjusted EBITDA

(1) Primarily reflects the long-lived asset impairment charge associated with our Haverhill I cokemaking facility asset group within the Domestic Coke reportable segment. See Note 7 to our consolidated financial statements for further detail.

(2) Restructuring costs include severance and other related charges primarily associated with the acquisition of Phoenix Global.

(3) Reflects costs incurred related to the Phoenix Global acquisition and the granulated pig iron project with U.S. Steel.

(4) Primarily reflects costs incurred associated with closing certain Phoenix Global operating sites.

Liquidity and Capital Resources

Our primary liquidity needs are to fund working capital and investments, service our debt, 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 Facility and, from time to time, debt and equity offerings. We believe our current resources are sufficient to meet our working capital requirements for our current business for at least the next 12 months and thereafter for the foreseeable future. We funded the acquisition of Phoenix Global with existing cash and borrowing availability under our Revolving Facility. As of December 31, 2025, we had $88.7 million of cash and cash equivalents and $132.0 million of borrowing availability under our Revolving Facility.

We have not provided foreign withholding taxes, state income taxes and federal and state taxes on foreign currency gains/losses on accumulated undistributed earnings of certain foreign subsidiaries because these earnings are considered to be permanently reinvested. It is not practicable to determine the amount of the unrecognized deferred tax liability related to the undistributed earnings. We do not anticipate the need to repatriate funds to the U.S. to satisfy domestic liquidity needs arising in the ordinary course of business, including liquidity needs associated with our domestic debt service requirements.

We may, from time to time, seek to retire or purchase additional amounts of our outstanding equity and/or debt securities through cash purchases and/or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. Refer to further liquidity

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discussion in “Part II - Item 5 - Market for Registrant's Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities.”

Cash Flow Summary

The following table sets forth a summary of the net cash (used in) provided by operating, investing and financing activities for the years ended December 31, 2025 and 2024:

Years Ended December 31,

(Dollars in millions)

Net cash provided by operating activities

Net cash used in investing activities

Net cash provided by (used in) financing activities

Effect of translation changes on cash

Net (decrease) increase in cash and cash equivalents

Cash Flows from Operating Activities

Net cash provided by operating activities decreased by $59.7 million to $109.1 million in 2025 as compared to $168.8 million in 2024. The decrease primarily reflects payments to settle liabilities assumed as part of the acquisition of Phoenix Global, an increase in income tax receivables related to capital investment tax credits and unfavorable operating results for the current year period as compared to the same prior year period.

Cash Flows from Investing Activities

Net cash used in investing activities increased by $266.9 million to $339.2 million in 2025 as compared to $72.3 million in 2024. The increase was primarily driven by cash paid for the acquisition of Phoenix Global of $271.5 million, which consisted of the purchase consideration net of cash and cash equivalents assumed in the acquisition. See Note 3 to our consolidated financial statements for further detail. This increase was partially offset by higher capital spending in connection with certain upgrades to improve the long-term reliability and operational performance of our assets in the prior year period. Refer to “Capital Requirements and Expenditures” below for further detail.

Cash Flows from Financing Activities

Net cash provided by financing activities increased by $175.8 million to $128.8 million in 2025 as compared to net cash used in financing activities of $47.0 million in 2024. The increase in net cash provided by financing activities was primarily driven by higher net borrowings of $193.0 million on the Revolving Facility, related to funding the acquisition of Phoenix Global. These increases were partially offset by an increase in repayments of finance lease liabilities of $10.1 million, consisting of additional finance leases acquired as part of the acquisition of Phoenix Global and finance lease buyouts executed in the current year period. Additionally, the increase in the current year period was further offset by an increase to dividends paid of $3.8 million as compared to the prior year period, primarily as a result of an increase in the dividend per share amount, and debt issuance costs paid of $2.1 million related to the amendment and extension of the Revolving Facility.

Dividends

In addition to the $41.4 million in dividends paid to our shareholders during 2025, on January 30, 2026, SunCoke's Board of Directors declared a cash dividend of $0.12 per share of the Company's common stock. This dividend will be paid on March 2, 2026, to stockholders of record on February 17, 2026. See further discussion in “Item 5. Market for Registrant’s Common Equity, Related Stockholders Matters and Issuer Purchases of Equity Securities.”

Covenants

As of December 31, 2025, we were in compliance with all applicable debt covenants. We do not anticipate a 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 12 to our consolidated financial statements for details on debt covenants.

Credit Rating

In May 2025, S&P Global Ratings reaffirmed our corporate credit rating of BB- (stable). In June 2025, Moody’s Investors Service reaffirmed our corporate credit rating of B1 and the outlook remains stable.

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Contractual Obligations

As of December 31, 2025, significant contractual obligations related to our metallurgical coal procurement contracts, which are generally based on annual coke production requirements at fixed coal prices, were $738.2 million and extend through 2026. As of December 31, 2025, significant contractual obligations related to debt we re $693.0 million of principal borrowings and $139.7 million of related interest, which will be repaid through 2030. See Note 12 to our consolidated financial statements. We also have contractual obligations for leases, including land, office space, equipment, railcars and locomotives. See Note 14 to our consolidated financial statements.

Capital Requirements and Expenditures

Our 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, regulatory requirements 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, the integrity and safety of our coke ovens, steam generators and assets at our terminals and operating sites 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;

• 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 grow our business through new markets or enable the renewal of a coke sales agreement and/or industrial services agreement and on which we expect to earn a reasonable return; and

• Environmental project expenditures to ensure that our existing facilities operate in accordance with changing regulations.

The following table summarizes our capital expenditures:

Years Ended December 31,

(Dollars in millions)

Ongoing capital

Expansion capital

Total capital expenditures (1)

(1) Reflects actual cash payments during the periods presented for our capital requirements.

Critical Accounting Policies and Estimates

A summary of our significant accounting policies is included in Note 2 to our consolidated financial statements. Our management believes that the application of these policies on a consistent basis enables us to provide the users of our financial statements with useful and reliable information about our operating results and financial condition. The preparation of our consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosures of contingent assets and liabilities. The Company's valuation of tangible and intangible assets as part of business combinations and assessment of impairment of long-lived assets are subject to such estimates and assumptions. Our management bases its estimates on various assumptions that are believed to be reasonable under the circumstances. Our management believes the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and consolidated financial statements and footnotes herein provide a meaningful and fair perspective of our financial condition.

Business Combinations

We account for acquisitions using the acquisition method under which, upon obtaining control, we recognize each identifiable asset acquired and liability assumed at its acquisition date fair value. The determination of those fair values requires significant judgment and the use of valuation techniques when observable market inputs are unavailable. We engage

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third-party valuation specialists to review these critical assumptions and prepare detailed fair value analyses for material acquisitions.

We value acquired intangible assets using models such as the income approach, including the relief-from-royalty method and multi-period excess earnings method as well as other cost-based techniques. Key unobservable inputs include forecasted revenue growth rates, discount rates, royalty rates and estimated useful lives. We value acquired property, plant and equipment using a combination of the cost and market approaches. The market approach estimates fair value by analyzing recent actual market transactions for similar assets or liabilities. The cost approach estimates fair value based on the expected cost to replace or reproduce the asset or liability and relies on assumptions regarding the occurrence and extent of any physical, functional and/or economic obsolescence. Some of the more significant estimates and assumptions inherent in these approaches are the values of asset replacement costs, comparable assets and estimated remaining economic lives of the assets.

Any excess of the purchase price over the fair values of identifiable net assets is recorded as goodwill. During the measurement period, up to one year from the acquisition date, significant provisional amounts are adjusted with a corresponding offset to goodwill.

On August 1, 2025, we completed the acquisition of Phoenix Global, a privately held provider of mission-critical mill services to major steel producing companies. See Note 3 to our consolidated financial statements for further detail.

Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. In order to determine if assets have been impaired, assets are grouped and tested at the lowest level for which identifiable independent cash flows are available (“asset group”). An impairment loss is recognized when the sum of projected undiscounted cash flows is less than the carrying value of the asset group. The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the asset group. Fair value is determined using an income approach when observable inputs are unavailable. Impairment charges could materially decrease our future net income and result in lower asset values on our consolidated balance sheets.

Fair value determinations of long-lived assets require considerable judgment and are sensitive to changes in underlying assumptions, estimates, and market factors. Estimating whether our long-lived assets are recoverable requires us to make assumptions and estimates regarding our future plans, as well as industry, economic, and regulatory conditions. These assumptions and estimates include estimated future annual net cash flows, discount rates, growth rates, and other market factors. If current expectations of future growth rates and margins are not met, if market factors outside of our control, such as discount rates, change, or if management’s expectations or plans otherwise change, then our long-lived assets may be impaired in the future.

During the fourth quarter of 2025, the Company concluded a triggering event occurred requiring a review for impairment at our Haverhill I cokemaking facility asset group as a result of Algoma Steel's breach of contract, which negatively impacted forecasted future cash flows. The Company performed an impairment test utilizing the income approach, which resulted in a $90.1 million impairment charge.

Recent Accounting Standards

See Note 2 to our consolidated financial statements.

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