SunCoke Energy, Inc.

Thank you for standing by, and welcome to SunCoke Energy, Inc., Q2 2020 earnings call. At this time, all participants are in a listen-only mode. Please be advised that today's call is being recorded. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to turn the call over to your speaker today. and Shantanu Agrawal, Director of Investor Relations. Please go ahead.

Good morning and thank you for joining us to discuss SunCoke Energy's second quarter 2020 earnings. With me today are Mike Rippey, President and Chief Executive Officer, and Fay West, Senior Vice President and Chief Financial Officer. Following management's prepared remarks, we'll open the call for Q&A. This conference call is being webcast live on the Investor Relations section of our website, and a replay will be available later today. If we don't get to your questions on the call today, please feel free to reach out to our investor relations team. Before I turn things over to Mike, let me remind you that various remarks we make on today's call regarding future expectations constitute forward-looking statements. The cautionary language regarding forward-looking statements in our SEC filings apply to the remarks we make today. These documents are available on our website as are reconciliations to non-GAAP financial measures discussed on today's call. With that, I'll now turn things over to Mike.

Thanks, Shantanu. Good morning and thank you for joining us on today's call. Let me start on slide three with an update on our ongoing response to the COVID-19 pandemic. As we discussed in our last call, Suncoke has been designated an essential business and our facilities continue to operate safely. Our employees are working diligently to serve our customers with essential products and services. We continue to take all necessary measures to ensure the health and safety of our workforce and have implemented policies and procedures that follow the guidelines established by the CDC, OSHA, and local health and governmental authorities. Our COVID-19 task force continually monitors and evaluates the evolving situation and responds and adjusts as the environment changes. As we move into the second half of the year, we recognize that market conditions remain challenged. In response, we have taken significant steps to support our customers in the short term, while simultaneously providing long-term stability for our stakeholders. Additionally, we are making investments to expand our product capabilities and diversify into new markets. On the customer side, we have addressed the lower demand environment. All of our customers have idled or banked blast furnaces during the first half of 2020. While there has been modest recovery in demand, steel capacity utilization remains low at approximately 59%, and it is difficult to predict when demand will fully return to normal levels. In response to these unprecedented and uncertain times, we have partnered with our customers to address their near-term coke needs. In 2020, We will reduce our production by approximately 550,000 tons and now expect to produce approximately 3,750,000 tons for the whole year. Substantially, all of this reduction will occur in the second half of the year. In exchange for these near-term reductions, we have extended several of our Coke contracts as detailed on this slide. Our business model is built on long-term customer relationships, and the actions we have taken not only address the near-term contracts are approaching expiration, but also further strengthens our long-term customer relationships and adds meaningful certainty and stability to our business. As we temporarily ramp down production in 2020 and address market conditions and logistic services, we have taken several steps to reduce costs and optimize our operations. The impact of these actions coupled with lower volumes will result in a reduction of 2020 adjusted EBITDA of 40 to 50 million from our previous guidance. We now expect 2020 adjusted EBITDA to be between 190 million and 200 million. We are also evaluating our cost structure to ensure that we remain a low-cost provider. We are taking meaningful actions, including a reduction in our workforce, which, while difficult during these unprecedented times, are all better positioned SunCoke for the future. We anticipate that these initiatives will result in permanent annual savings of approximately $10 million beginning in 2021. Now, before I turn it over to Fay, I'm excited to talk about a new opportunity that SunCoke is pursuing. Turning to slide four, as mentioned on prior calls, we have been looking at alternative Coke products, one of which is Foundry Coke. We have been evaluating Foundry Coke Thank you for joining us today. to look to imports as an alternative to domestic supply. We therefore believe this is an opportune time to enter the market and establish SunCoke as a long-term reliable supplier of high-quality foundry product. Expansion into this market provides both industry and customer diversification. There are more than 30 foundry Coke customers across the country and numerous related industrial Coke customers. During the production of foundry Coke, smaller-sized Coke, known as Egg, Nut, and Stove Coke is also produced and is utilized in other industrial applications such as sugar beet and rock wall production. The production of foundry and related industrial coke helps address the current glass furnace coke market imbalance. Differences in the production process has the effect of replacing approximately two tons of glass furnace coke for each ton of foundry coke produced. Our initial target is to produce approximately 100,000 huns of foundry coke in 2021. Importantly, our ovens are capable of producing this product with no direct investment or need for production downtime to transition into the foundry coke market. We are making capital investments of approximately $12 million on coal grinding, material handling, coke screening, and laboratory equipment. all of which is necessary to meet market demands. Given our cost-efficient production process, we anticipate the payback period for these projects will be relatively short. We'll provide additional details on foundry coke when we provide 2021 guidance early next year. With that, I'll turn it over to Faye to review our second quarter earnings in detail. Faye?