UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2018~~2019



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

For the transition period from to

Commission File Number 001-35782

SUNCOKE ENERGY PARTNERS, L.P.

(Exact name of Registrant as specified in its charter)



Delaware		35-2451470
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1011 Warrenville Road, Suite 600

Lisle, Illinois 60532

(630) 824-1000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ý Yes ¨ No

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

Large accelerated filer	¨		Accelerated filer	ý
Non-accelerated filer	¨	(Do not check if a smaller reporting company)	Smaller reporting company	¨
			Emerging growth company	ý¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.				ý¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No ý

The registrant had 46,227,148 common units outstanding at ~~October~~April 19, ~~2018~~2019.

Table of Contents

SUNCOKE ENERGY PARTNERS, L.P.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements	1
Consolidated Statements of Operations (Unaudited) For the Nine Months Ended September 30, 2018 and 2017	1
Consolidated Statements of Income (Unaudited) For the Three Months Ended March 31, 2019 and 2018	1
Consolidated Balance Sheets at September 30, 2018 (Unaudited) and December 31, 2017	2
Consolidated Balance Sheets at March 31, 2019 (Unaudited) and December 31, 2018	2
Consolidated Statements of Cash Flows (Unaudited) For the Nine Months Ended September 30, 2018 and 2017	3
Consolidated Statements of Cash Flows (Unaudited) For the Three Months Ended March 31, 2019 and 2018	3
Consolidated Statement of Equity (Unaudited) For the Nine Months Ended September 30, 2018	4
Consolidated Statements of Equity (Unaudited) For the Three Months Ended March 31, 2019 and 2018	4
Notes to the Consolidated Financial Statements	5
1. General	5
2. Related Party Transactions and Agreements	6
3. Cash Distributions and Net Income Per Unit	7
4. Inventories	9
5. Goodwill and Other Intangible Assets	10
6. Income Taxes	10
7. Debt and Financing Obligation	1110
8. Commitments and Contingent Liabilities	11
9. Fair Value Measurements	12
9. Leases
10. Revenue from Contracts with Customers	12
10. Fair Value Measurements	13
11. Business Segment Information	15
11. Revenue from Contracts with Customers	13
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
12. Business Segment Information	16
Item 3. Quantitative and Qualitative Disclosures About Market Risk	31
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 4. Controls and Procedures	31
Item 3. Quantitative and Qualitative Disclosures About Market Risk	30
Item 4. Controls and Procedures	30
PART II - OTHER INFORMATION
Item 1. Legal Proceedings	3231
Item 1A. Risk Factors	3231
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds	3231
Item 4. Mine Safety Disclosures	3231
Item 6. Exhibits	3332
Signature	3433

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PART I - FINANCIAL INFORMATION



Item 1.	Consolidated Financial Statements

SunCoke Energy Partners, L.P.

Consolidated Statements of ~~Operations~~Income

(Unaudited)

		Three Months Ended September 30,					Nine Months Ended September 30,
		Three Months Ended March 31,
		2018			2017		2018		2017
		2019			2018
	(Dollars and units in millions, except per unit amounts)	~~(Dollars and units in millions, except per unit amounts)~~
Revenues
Sales and other operating revenue		$	~~224~~230.14		$	214.08	$	~~667.5~~	$	~~610.2~~
Costs and operating expenses
Cost of products sold and operating expenses		~~162~~174.21			~~146~~157.21		~~484.3~~		~~431.0~~
Selling, general and administrative expenses		7.8.7			78.42		~~24.7~~		~~24.4~~
Depreciation and amortization expense		2328.14			2021.25		~~64.8~~		~~63.3~~
Total costs and operating expenses		~~193~~211.12			~~173~~186.8		~~573.8~~		~~518.7~~
Operating income		3119.02			4028.20		~~93.7~~		~~91.5~~
Interest expense, net		14.94			15.10		~~44.9~~		~~41.7~~
Loss on extinguishment of debt		—			0.1		—		20.0
Income before income tax (benefit) expense		4.8			13.0
Income before income tax expense		16.1			25.0		48.8		29.8
Income tax (benefit) expense		(0.1		)	0.3
Income tax expense		0.4			1.7		1.0		150.7
Net income		4.9			12.7
Net income (loss)		15.7			23.3		47.8		(120.9		)
Less: Net income attributable to noncontrolling interests		0.4			0.5
Less: Net income (loss) attributable to noncontrolling interests		0.4			0.7		1.5		(1.3		)
Net income attributable to SunCoke Energy Partners, L.P.		$	4.5		$	12.2
Net income (loss) attributable to SunCoke Energy Partners, L.P.		$	15.3		$	22.6	$	46.3	$	(119.6	)
General partner's interest in net income		$	0.1		$	0.3
General partner's interest in net income		$	0.4		$	1.9	$	1.0	$	1.8
Limited partners' interest in net income		$	4.4		$	11.9
Limited partners' interest in net income (loss)		$	14.9		$	20.7	$	45.3	$	(121.4	)
Net income per common unit (basic and diluted)		$	0.10		$	0.26
Net income (loss) per common unit (basic and diluted)		$	0.32		$	0.45	$	0.98	$	(2.63	)
Weighted average common units outstanding (basic and diluted)		46.2			46.2
Weighted average common units outstanding (basic and diluted)		46.2			46.2		46.2		46.2

(See Accompanying Notes)

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SunCoke Energy Partners, L.P.

Consolidated Balance Sheets

	September 30, 2018		December 31, 2017
	March 31, 2019		December 31, 2018
	(Unaudited)
	(Dollars in millions)
Assets
Cash and cash equivalents	$	24.2	$	6.6
Cash	$	2.7	$	12.6
Receivables	5361.24		4248.28
Receivables from affiliate, net	~~0.6~~—		53.71
Inventories	82104.16		79.40
Other current assets	3.70		1.90
Total current assets	~~163~~171.87		~~135~~144.85
Properties, plants and equipment (net of accumulated depreciation of $479.1 million and $423.1 million at September 30, 2018 and December 31, 2017, respectively)	1,258.2		1,265.6
Properties, plants and equipment (net of accumulated depreciation of $521.7 million and $499.9 million at March 31, 2019 and December 31, 2018, respectively)	1,233.0		1,245.1
Goodwill	73.5		73.5
Other intangible assets, net	~~158~~153.42		~~166~~155.28
Deferred charges and other assets	0.2.4		0.32
Total assets	$	1,~~654~~633.18	$	1,~~641~~619.41
Liabilities and Equity
Accounts payable	$	9078.53	$	5468.98
Accrued liabilities	13.01		1413.65
Deferred revenue	27.65		13.70
Current portion of long-term debt and financing obligation	2.78		2.68
Interest payable	16.3		43.02
Total current liabilities	125.1		77.8
Payable to affiliate, net	2.7		—
Long-term debt and financing obligation	793.3		818.4
Total current liabilities	120.7		91.3
Deferred income taxes	120.3		119.2
Long-term debt and financing obligation	788.3		793.3
Other deferred credits and liabilities	10.8		10.1
Deferred income taxes	115.6		115.7
Total liabilities	1,049.5		1,025.5
Other deferred credits and liabilities	13.2		12.1
Total liabilities	1,037.8		1,012.4
Equity
Held by public:
Common units (issued 17,727,249 and 17,958,420 units at September 30, 2018 and December 31, 2017, respectively)	196.9		207.0
Common units (issued 17,727,249 units at both March 31, 2019 and December 31, 2018, respectively)	188.7		194.1
Held by parent:
Common units (issued 28,499,899 and 28,268,728 units at September 30, 2018 and December 31, 2017, respectively)	356.3		365.4
Common units (issued 28,499,899 units at both March 31, 2019 and December 31, 2018, respectively)	342.9		351.6
General partner's interest	3953.50		3149.23
Partners' capital attributable to SunCoke Energy Partners, L.P.	~~592~~584.76		~~603~~595.60
Noncontrolling interest	11.94		1211.37
Total equity	~~604~~596.60		~~615~~606.97
Total liabilities and equity	$	1,~~654~~633.18	$	1,~~641~~619.41

(See Accompanying Notes)

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SunCoke Energy Partners, L.P.

Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2018			2017
	2019			2018
	(Dollars in millions)
Cash Flows from Operating Activities:
Net income (loss)	$	47.8		$	(120.9	)
Net income	$	4.9		$	12.7
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization expense	6428.84			6321.35
Deferred income tax expense	1(0.1		)	~~150~~0.4
Loss on extinguishment of debt	—			20.0
Changes in working capital pertaining to operating activities:
Receivables	(1112.06		)	(65.36		)
Receivables/payables from affiliate, net	5.18			(5.97		)
Inventories	(225.76		)	(180.43		)
Accounts payable	309.3			1620.69
Accrued liabilities	(10.46		)	2(3.80		)
Deferred revenue	04.95			~~14.~~1.9
Interest payable	1213.31			212.38
Other	0(1.84		)	(50.39		)
Net cash provided by operating activities	~~148~~25.07			~~112~~66.71
Cash Flows from Investing Activities:
Capital expenditures	(4413.4		)	(2310.36		)
Net cash used in investing activities	(4413.4		)	(2310.36		)
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt	—			620.6
Repayment of financing obligation	(0.7		)	(0.6		)
Repayment of long-term debt	—			(644.9		)
Proceeds from revolving credit facility	60.7			53.5
Repayment of financing obligation	(1.9		)	(1.8		)
Repayment of revolving credit facility	(65.7		)	(53.5		)
Proceeds from revolving credit facility	127.2			268.0
Distributions to unitholders (public and parent)	(18.9		)	(29.5		)
Repayment of revolving credit facility	(152.2		)	(240.0		)
Distributions to noncontrolling interest (SunCoke Energy, Inc.)	(0.7		)	(0.5		)
Debt issuance costs	—			(14.9		)
Capital contributions from SunCoke	4.0			10.0
Distributions to unitholders (public and parent)	(67.2		)	(89.7		)
Other financing activities	(0.9		)	—
Distributions to noncontrolling interest (SunCoke Energy, Inc.)	(1.9		)	(1.7		)
Net cash used in financing activities	(22.2		)	(20.6		)
Capital contributions from SunCoke	10.0			—
Net (decrease) increase in cash and cash equivalents	(9.9		)	34.9
Net cash used in financing activities	(86.0		)	(104.4		)
Cash and cash equivalents at beginning of period	12.6			6.6
Net increase (decrease) in cash and cash equivalents and restricted cash	17.6			(15.0		)
Cash and cash equivalents at end of period	$	2.7		$	41.5
Cash, cash equivalents and restricted cash at beginning of period	6.6			42.3
Cash, cash equivalents and restricted cash at end of period	$	24.2		$	27.3
Supplemental Disclosure of Cash Flow Information
Interest paid	$	32.3		$	38.3
Interest paid, net of capitalized interest of $1.2 million and $0.5 million, respectively	$	0.4		$	1.5
Income taxes paid	$	~~2.9~~—		$	01.63

(See Accompanying Notes)

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SunCoke Energy Partners, L.P.

Consolidated ~~Statement~~Statements of Equity

(Unaudited)

		Common - Public			Common - SunCoke			General Partner - SunCoke			Noncontrolling Interest			Total
		Common -Public			Common - SunCoke			General Partner - SunCoke			Noncontrolling Interest			Total
	(Dollars in millions)
At December 31, 2017		$	207.0		$	365.4		$	31.2		$	12.3		$	615.9
Partnership net income		~~17.~~4.6			277.93			1.0.3			10.5			4712.87
Distributions to unitholders		(2410.86		)	(3916.79		)	(2.70		)	—			(6729.25		)
Distributions to noncontrolling interest		—			—			—			(10.95		)	(10.95		)
Public units acquired by SunCoke		(2.72		)	2.72			—			—			—
SunCoke capital contributions		—			—			10.0			—			10.0
At September 30, 2018		$	196.9		$	356.3		$	39.5		$	11.9		$	604.6
At March 31, 2018		$	198.8		$	358.0		$	39.5		$	12.3		$	608.6
At December 31, 2018		$	194.1		$	351.6		$	49.3		$	11.7		$	606.7
Partnership net income		1.7			2.7			0.1			0.4			4.9
Distributions to unitholders		(7.1		)	(11.4		)	(0.4		)	—			(18.9		)
Distributions to noncontrolling interest		—			—			—			(0.7		)	(0.7		)
SunCoke capital contributions		—			—			4.0			—			4.0
At March 31, 2019		$	188.7		$	342.9		$	53.0		$	11.4		$	596.0

(See Accompanying Notes)

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SunCoke Energy Partners, L.P.

Notes to the Consolidated Financial Statements

1. General

Description of Business

Our cokemaking ovens have collective capacity to produce 2.3 million tons of coke annually and utilize efficient, modern heat recovery technology designed to combust the coal’s volatile components liberated during the cokemaking process and use the resulting heat to create steam or electricity for sale. This differs from by-product cokemaking, which seeks to repurpose the coal’s liberated volatile components for other uses. We have constructed the only greenfield cokemaking facilities in the United States ("U.S.") in approximately 30 years and are the only North American coke producer that utilizes heat recovery technology in the cokemaking process. We provide steam pursuant to steam supply and purchase agreements with our customers. Electricity is sold into the regional power market or pursuant to energy sales agreements.

Our logistics business provides handling and/or mixing services to steel, coke (including some of our and SunCoke's domestic cokemaking facilities), electric utility, coal producing and other manufacturing based customers. The logistics business has terminals with the collective capacity to mix and/or transload more than 40 million tons of coal annually and has total storage capacity of approximately 3 million tons.

On February 5, 2019, SunCoke and the Partnership announced that they have entered into a definitive agreement whereby SunCoke will acquire all outstanding common units of the Partnership not already owned by SunCoke in a stock-for-unit merger transaction (the “Simplification Transaction”). Pursuant to the terms of this agreement (“Merger Agreement”), Partnership unaffiliated common unitholders will receive 1.40 SunCoke common shares, plus a fraction of a SunCoke common share based on a formula as further described in the Merger Agreement, for each Partnership common unit. Following completion of the Simplification Transaction, the Partnership will become a wholly-owned subsidiary of SunCoke, the Partnership's common units will cease to be publicly traded and the Partnership's IDRs will be eliminated. We continue to expect the Simplification Transaction to close late in the second quarter of 2019 or early in the third quarter of 2019.

Organized in Delaware in 2012 and headquartered in Lisle, Illinois, we became a publicly-traded partnership in 2013 and our common units are listed on the New York Stock Exchange (“NYSE”) under the symbol “SXCP.”

Basis of Presentation

The accompanying unaudited consolidated financial statements included herein have been prepared in conformity with accounting principles generally accepted in the U.S. ("GAAP") for interim reporting. Certain information and disclosures normally included in financial statements have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). In management’s opinion, the financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of the results of operations, financial position and cash flows for the periods presented. The results of operations for the periods ended ~~September~~March 3031, ~~2018~~2019 are not necessarily indicative of the operating results for the full year. These unaudited interim consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018.

Recently Adopted Accounting Pronouncements

In ~~May~~February ~~2014~~2016, the Financial Accounting Standards Board ("“FASB"”) issued Accounting Standards Update ("“ASU"”) ~~2014~~2016-0902, "Leases ~~“Revenue from Contracts with Customers~~ (Topic ~~606~~842),”." ASU ~~which~~2016-02 ~~supersedes~~requires ~~the~~leases ~~revenue~~to ~~recognition~~be ~~requirements~~recognized inas ~~“Revenue~~assets ~~Recognition (Topic 605),”~~ and ~~requires~~liabilities ~~entities~~on ~~to recognize revenue to depict~~ the ~~transfer~~balance ofsheet ~~promised~~for ~~goods or services to customers in an amount that reflects~~ the ~~consideration~~rights toand ~~which~~obligations ~~the~~created ~~entity~~by ~~expects~~all toleases bewith ~~entitled~~terms inof ~~exchange~~more ~~for~~than ~~those~~12 ~~goods or services~~months. ~~The~~ ~~Partnership adopted this standard on January 1~~Subsequently, ~~2018, using~~ the ~~modified~~FASB ~~retrospective~~has ~~method~~issued ~~with~~various noASUs ~~material~~to ~~impact~~provide onfurther ~~our~~clarification ~~revenue~~around ~~recognition~~certain ~~model~~aspects onof anAccounting ~~annual~~Standards ~~basis. See~~Codification ~~Note~~(“ASC”) 10842, "Leases." The

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted cash.” The Partnership retrospectively adopted this ASU in the first quarter 2018 and modified the Partnership's cash flow presentation to include restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The restricted cash balance was zero at both September 30, 2018 and December 31, 2017, and was $0.4 million and $0.5 million at September 30, 2017 and December 31, 2016, respectively.

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~~Historical~~Partnership ~~restricted~~adopted ~~cash~~the ~~balances~~standard ~~related~~effective toJanuary 1, ~~cash~~2019 ~~withheld~~using in the ~~2015~~modified ~~acquisition~~retrospective oftransition ~~CMT~~approach and elected not to ~~fund~~adjust prior comparative periods. Upon adoption, the ~~completion~~Partnership recognized right-of-use ~~certain~~assets ~~expansion~~and ~~capital~~lease ~~improvements~~liabilities of $2. 5 million at January 1, 2019. See Note 9.

Recently Issued Accounting Pronouncements Not Yet Adopted

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." ASU 2016-02 requires leases to be recognized as assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. Subsequently, the FASB has issued various ASUs to provide further clarification around certain aspects of ASC 842. This standard is effective for annual and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. A multi-disciplined implementation team has gained an understanding of the accounting and disclosure provisions of the standard and is in the process of analyzing the impacts to our business, including the development of new accounting processes to account for our leases and support the required disclosures. We are implementing a technology tool to assist with the accounting and reporting requirements of this standard. While we are still evaluating the impact of adopting this standard, we expect that upon adoption the right-of-use assets and lease liabilities, such as land, the lease of our corporate office space and certain equipment rentals, will increase the reported assets and liabilities on our Consolidated Balance Sheets. The Partnership expects to prospectively adopt this standard on January 1, 2019.

Reclassifications

Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the current year presentation.

2. Related Party Transactions and Agreements

Transactions with Affiliate

Our logistics business provides handling and mixing services to certain SunCoke cokemaking operations. Logistics recorded revenues derived from services provided to SunCoke’s cokemaking operations of $3.03 million and $82.05 million for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2018~~2019, ~~respectively,~~ and ~~$2.2 million and $6.8 million for the three and nine months ended September 30~~2018, ~~2017,~~ respectively.

SunCoke charges us for all direct costs and expenses incurred on our behalf and allocated costs associated with support services provided to our operations. Allocated ~~Expenses~~expenses from SunCoke for general corporate and operations support costs totaled $6.9 million and $6.8 million for the three months ended March 31, 2019 and 2018, respectively, and were included in selling, general and administrative expenses on the Consolidated Statements of Income. These costs include legal, accounting, tax, treasury, engineering, information technology, insurance, employee benefit costs, communications, human resources, and procurement. Corporate allocations are recorded in accordance with the terms of our omnibus agreement with SunCoke and our general partner.

SunCoke charges us for all direct costs and expenses incurred on our behalf and allocated costs associated with support services provided to our operations. Allocated expenses from SunCoke for general corporate and operations support costs totaled $6.7 million and $20.4 million for the three and nine months ended September 30, 2018, respectively, and $6.8 million and $20.7 million for the three and nine months ended September 30, 2017, respectively, and were included in selling, general and administrative expenses on the Consolidated Statements of Operations. These costs include legal, accounting, tax, treasury, engineering, information technology, insurance, employee benefit costs, communications, human resources, and procurement. Corporate allocations are recorded in accordance with the terms of our omnibus agreement with SunCoke and our general partner.

Omnibus Agreement

In connection with the closing of our initial public offering ("IPO"), we entered into an omnibus agreement with SunCoke and our general partner that addresses certain aspects of our relationship with them, including:

Business Opportunities. We have preferential rights to invest in, acquire and construct cokemaking facilities in the U.S. and Canada. SunCoke has preferential rights to all other business opportunities.

Environmental Indemnity. SunCoke will indemnify us to the full extent of any remediation at the Haverhill, Middletown and Granite City cokemaking facilities arising from any known environmental matter discovered and identified as requiring remediation prior to the closing of the IPO and the dropdown of Granite City, respectively. SunCoke has contributed $~~129~~143 million in partial satisfaction of this obligation and will reimburse us for additional spending in excess of $~~129~~143 million as required for such known remediation obligations.

Other Indemnification. SunCoke will fully indemnify us with respect to any additional tax liability related to periods prior to or in connection with the closing of the IPO or the dropdown of the Partnership's Granite City facility (the "Granite City Dropdown") to the extent not currently presented on the Consolidated Balance Sheets. Additionally, SunCoke will either cure or fully indemnify us for losses resulting from any material title defects at the properties owned by the entities acquired in connection with the closing of the IPO or the Granite City Dropdown to the extent that those defects interfere with or could reasonably be expected to interfere with the operations of the related cokemaking facilities. We will indemnify SunCoke for events relating to our operations except to the extent that we are entitled to indemnification by SunCoke.

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License. SunCoke has granted us a royalty-free license to use the name “SunCoke” and related marks. Additionally, SunCoke has granted us a non-exclusive right to use all of SunCoke's current and future cokemaking and related technology. We have not paid and will not pay a separate license fee for the rights we receive under the license.

Expenses and Reimbursement. SunCoke will continue to provide us with certain corporate and other services, and we will reimburse SunCoke for all direct costs and expenses incurred on our behalf and a portion of corporate and other costs and expenses attributable to our operations. SunCoke may consider providing additional support to the Partnership in the future by providing a corporate cost reimbursement holiday, whereby the Partnership would not be required to reimburse SunCoke for costs. Additionally, we paid all fees in connection with our senior notes offering and our revolving credit facility and have agreed to pay all additional fees in connection with any future financing arrangement entered into for the purpose of replacing the credit facility or the senior notes.

So long as SunCoke controls our general partner, the omnibus agreement will remain in full force and effect unless mutually terminated by the parties. If SunCoke ceases to control our general partner, the omnibus agreement will terminate, but our rights to indemnification and use of SunCoke's existing cokemaking and related technology will survive. The omnibus agreement can be amended by written agreement of all parties to the agreement, but we may not agree to any amendment that would, in the reasonable discretion of our general partner, be adverse in any material respect to the holders of our common units without prior approval of the conflicts committee.

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3. Cash Distributions and Net Income Per Unit

Cash Distributions

~~Our~~ In ~~partnership~~general, ~~agreement~~the ~~generally~~Partnership ~~provides~~pays ~~that~~cash wedistributions ~~will~~each ~~make~~quarter ~~cash~~to ~~distributions,~~our ifunitholders ~~any,~~and ~~each~~our ~~quarter~~general partner according to the following percentage allocations:



	Total Quarterly Distribution Per Unit Target Amount		Marginal Percentage Interest in Distributions
	Total Quarterly Distribution Per Unit Target Amount		Unitholders	General Partner
First Target Distribution	up to $0.474375		98%	2%
Second Target Distribution	above $0.474375	up to $0.515625	85%	15%
Third Target Distribution	above $0.515625	up to $0.618750	75%	25%
Thereafter	above $0.618750		50%	50%

Our distributions are declared subsequent to quarter end. The table below represents total cash distributions applicable to the period in which the distributions were earned:

Earned in Quarter Ended	Total Quarterly Distribution Per Unit		Total Cash Distribution including general partners IDRs		Date of Distribution	Unitholders Record Date
			(Dollars in millions)
September 30, 2017	$	0.5940	$	29.5	December 1, 2017	November 15, 2017
December 31, 2017	$	0.5940	$	29.5	March 1, 2018	February 15, 2018
March 31, 2018	$	0.4000	$	18.9	June 1, 2018	May 15, 2018
June 30, 2018	$	0.4000	$	18.9	September 4, 2018	August 15, 2018
September 30, 2018(1)	$	0.4000	$	18.9	December 3, 2018	November 15, 2018
September 30, 2018	$	0.4000	$	18.9	December 3, 2018	November 15, 2018
December 31, 2018	$	0.4000	$	18.9	March 1, 2019	February 15, 2019
March 31, 2019 (1)	$	0.4000	$	18.9	June 3, 2019	May 15, 2019

(1) On ~~October~~April 1615, ~~2018~~2019, our Board of Directors declared a cash distribution of $0.404000 per unit, which will be paid on ~~December~~June 3, ~~2018~~2019, to unitholders of record on ~~November~~May 15, ~~2018~~2019.

Allocation of Net Income

Our partnership agreement contains provisions for the allocation of net income to the unitholders and the general partner. For purposes of maintaining partner capital accounts, the partnership agreement specifies that items of income and loss shall be allocated among the partners in accordance with their respective percentage interest. Normal allocations according to percentage interests are made after giving effect, if any, to priority income allocations in an amount equal to incentive cash distributions allocated 100 percent to the general partner.

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The calculation of net income allocated to the general and limited partners was as follows:

		Three Months Ended September 30,						Nine Months Ended September 30,
		Three Months Ended March 31,
		2018			2017			2018			2017
		2019			2018
	(Dollars in millions)	~~(Dollars in millions)~~
Net income (loss) attributable to SunCoke Energy Partners, L.P.		$	15.3		$	22.6		$	46.3		$	(119.6	)
Net income attributable to SunCoke Energy Partners, L.P.		$	4.5		$	12.2
General partner's incentive distribution rights		—			1.4			—			4.2
General partner's ownership interest:		2.0		%	2.0		%
Net income (loss) attributable to partners, excluding incentive distribution rights		15.3			21.2			46.3			(123.8		)
Total general partner's interest in net income		$	0.1		$	0.3
General partner's ownership interest:		2.0		%	2.0		%	2.0		%	2.0		%
Common - public unitholder's interest in net income		$	1.7		$	4.6
General partner's allocated interest in net income (loss)(1)		0.4			0.5			1.0			(2.4		)
Common - SunCoke interest in net income		2.7			7.3
General partner's incentive distribution rights		—			1.4			—			4.2
Total limited partners' interest in net income		$	4.4		$	11.9
Total general partner's interest in net income		$	0.4		$	1.9		$	1.0		$	1.8
Common - public unitholder's interest in net income (loss)		$	5.7		$	8.6		$	17.4		$	(55.2	)
Common - SunCoke interest in net income (loss)		9.2			12.1			27.9			(66.2		)
Total limited partners' interest in net income (loss)		$	14.9		$	20.7		$	45.3		$	(121.4	)

(1) Our net income is allocated to the general partner and limited partners in accordance with their respective partnership percentages, after giving effect to priority income allocations for incentive distributions, if any, to our general partner, pursuant to our partnership agreement. The table above represents a simplified presentation of the calculation, and therefore, amounts may not recalculate precisely.

Earnings Per Unit

Our net income is allocated to the general partner and limited partners in accordance with their respective partnership percentages, after giving effect to priority income allocations for incentive distributions, if any, to our general partner, pursuant to our partnership agreement. Distributions less than or greater than earnings are allocated in accordance with our partnership agreement. Payments made to our unitholders are determined in relation to actual distributions declared and are not based on the net income allocations used in the calculation of net income per unit.

In addition to the common units, we also have identified the general partner interest and IDRs as participating securities and we use the two-class method when calculating the net income per unit applicable to limited partners, which is based on the weighted-average number of common units outstanding during the period. Basic and diluted net income per unit applicable to limited partners are the same because we do not have any potentially dilutive units outstanding.

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The calculation of earnings per unit is as follows:

		Three Months Ended September 30,						Nine months ended September 30,
		Three Months Ended March 31,
		2018			2017			2018			2017
		2019			2018
	(Dollars and units in millions, except per unit amounts)	~~(Dollars and units in millions, except per unit amounts)~~
Net income (loss) attributable to SunCoke Energy Partners, L.P.		$	15.3		$	22.6		$	46.3		$	(119.6	)
Net income attributable to SunCoke Energy Partners, L.P.		$	4.5		$	12.2
General partner's distributions (including zero, $1.4 million, zero, and $4.2 million, of cash incentive distribution rights declared, respectively)		0.4			2.0			1.2			6.0
General partner's distributions (including zero cash incentive distribution rights declared)		0.4			0.4
Limited partners' distributions on common units		18.5			2718.5			~~55.5~~			~~82.5~~
Distributions greater than earnings/loss		(3.6		)	(6.9		)	(10.4		)	(208.1		)
Distributions greater than earnings		(14.4		)	(6.7		)
General partner's earnings (loss):
General partner's earnings:
Distributions (including zero, $1.4 million, zero and $4.2 million, of cash incentive distribution rights declared, respectively)		0.4			2.0			1.2			6.0
Distributions (including zero cash incentive distribution rights declared)		0.4			0.4
Allocation of distributions greater than earnings/loss		—			(0.1		)	(0.2		)	(4.2		)
Allocation of distributions greater than earnings		(0.3		)	(0.1		)
Total general partner's earnings		0.41			10.93			~~1.0~~			~~1.8~~
Limited partners' earnings (loss) on common units:
Limited partners' earnings on common units:
Distributions		18.5			2718.5			~~55.5~~			~~82.5~~
Allocation of distributions greater than earnings/loss		(3.6		)	(6.8		)	(10.2		)	(203.9		)
Allocation of distributions greater than earnings		(14.1		)	(6.6		)
Total limited partners' earnings (loss) on common units		14.9			20.7			45.3			(121.4		)
Total limited partners' earnings on common units		4.4			11.9
Weighted average limited partner units outstanding:
Common - basic and diluted		46.2			46.2			~~46.2~~			~~46.2~~
Net income (loss) per limited partner unit:
Net income per limited partner unit:
Common - basic and diluted		$	0.3210		$	0.4526		$	~~0.98~~		$	~~(2.63~~	)

Unit Activity

	Common - Public		Common - SunCoke	Total Common
At December 31, 2017	17,958,420		28,268,728	46,227,148
Common units acquired by SunCoke	(231,171	)	231,171	—
At September 30, 2018	17,727,249		28,499,899	46,227,148

4. Inventories

The components of inventories were as follows:

	September 30, 2018		December 31, 2017
	March 31, 2019		December 31, 2018
	(Dollars in millions)
Coal	$	4564.03	$	4140.03
Coke	57.62		96.54
Materials, supplies, and other	3133.51		2832.93
Total inventories	$	82104.16	$	79.40

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5. Goodwill and Other Intangible Assets

Goodwill, which represents the excess of the purchase price over the fair value of net assets acquired, is tested for impairment as of October 1 of each year, or when events occur or circumstances change that would, more likely than not, reduce the fair value of a reporting unit to below its carrying value. Goodwill allocated to our Logistics segment was $73.5 million at both ~~September~~March 3031, ~~2018~~2019 and December 31, ~~2017~~2018.

The components of other intangible assets, net were as follows:

		September 30, 2018						December 31, 2017
		March 31, 2019						December 31, 2018
	Weighted - Average Remaining Amortization Years	Gross Carrying Amount		Accumulated Amortization		Net		Gross Carrying Amount		Accumulated Amortization		Net
		(Dollars in millions)
Customer contracts	4	$	24.0	$	1011.18	$	1312.92	$	24.0	$	711.80	$	1613.20
Customer relationships	13	28.7		78.10		2120.67		28.7		5.7.5		2321.02
Permits	2423	139.0		1618.17		~~122~~120.93		139.0		1217.24		~~126~~121.86
Trade name	—	1.2		1.2		—		1.2		1.0		0.2
Total		$	191.7	$	38.5	$	153.2	$	191.7	$	35.9	$	155.8
Total		$	192.9	$	34.5	$	158.4	$	192.9	$	26.7	$	166.2

~~The~~Total ~~permits~~amortization ~~above~~expense ~~represent~~for ~~the~~intangible ~~environmental and operational permits required to operate a coal export terminal in accordance with the U.S. Environmental Protection Agency (the "EPA") and other regulatory bodies. Intangible~~ assets ~~are~~subject ~~amortized over their useful lives in a manner that reflects the pattern in which the economic benefit of the asset is consumed. The permits’ useful lives were estimated~~ to beamortization 27was ~~years at acquisition based on the expected useful life of the significant operating equipment at the facility~~$2. We6 ~~have~~million ~~historical experience of renewing and extending similar arrangements at our other facilities and intend to continue to renew our permits as they come up~~ for ~~renewal~~both ~~for~~ the ~~foreseeable~~three ~~future. The~~months ~~permits~~ended ~~were~~March ~~renewed~~31, ~~regularly~~2019, ~~prior~~and ~~to our acquisition of CMT~~2018. ~~These permits have an average remaining renewal term of approximately 2.7 years.~~

In both 2018 and 2017, total amortization expense for intangible assets subject to amortization was $2.6 million and $7.8 million for the three and nine months ended September 30, respectively.

6. Income Taxes

The Partnership is a limited partnership and generally is not subject to federal or state income taxes. At the end of each interim period, we make our best estimate of the effective tax rate expected to be applicable for the full fiscal year and the impact of discrete items, if any, and adjust the rate as necessary. The Partnership recorded income tax ~~expense~~benefit of $0.41 million ~~and~~for the three months ended March 31, 2019, primarily related to a $1.0.3 million tax benefit for the ~~three~~change in its projected deferred tax liability associated with projected book to tax differences at the end of the 10-year transition period under the final regulations on qualifying income under section 7704(d)(1)(E) of the Internal Revenue Code. This benefit was partially offset by local taxes and ~~nine~~activities related to Gateway Cogeneration Company LLC. The Partnership recorded income tax expense of $0.3 million for the three months ended ~~September~~March 3031, 2018, ~~respectively,~~ primarily related to local taxes and activities related to Gateway Cogeneration Company LLC.

In January 2017, the IRS announced its decision to exclude cokemaking as a qualifying income generating activity in its final regulations (the "Final Regulations") issued under section 7704(d)(1)(E) of the Internal Revenue Code relating to the qualifying income exception for publicly traded partnerships. Subsequent to the 10-year transition period, certain cokemaking entities in the Partnership will become taxable as corporations. As a result, the Partnership recorded deferred income tax expense of $148.6 million during the first quarter of 2017 related to the future tax obligation expected to be owed for the projected book to tax differences at the end of the 10-year transition period.

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7. Debt and Financing Obligation

Total debt and financing obligation, including the current portion of long-term debt and financing obligation, consisted of the following:

	September 30, 2018			December 31, 2017
	March 31, 2019			December 31, 2018
	(Dollars in millions)
7.500 percent senior notes, due 2025 ("2025 Partnership Notes")	$	700.0		$	700.0
Revolving credit facility, due 2022 ("Partnership Revolver")	~~105~~100.0			~~130~~105.0
5.82 percent financing obligation, due 2021 ("Financing Obligation")	109.84			1210.71
Total borrowings	~~815~~809.84			~~842~~815.71
Original issue discount	(5.51		)	(5.94		)
Debt issuance cost	(1413.32		)	(1513.86		)
Total debt and financing obligation	~~796~~791.01			~~821~~796.01
Less: current portion of long-term debt and financing obligation	2.78			2.68
Total long-term debt and financing obligation	$	~~793~~788.3		$	~~818~~793.43

Partnership Revolver

The Partnership Revolver has a capacity of $285.0 million. As of ~~September~~March 3031, ~~2018~~2019, the Partnership had ~~$1.9~~no ~~million~~ of letters of credit outstanding and an outstanding balance of $~~105~~100.0 million, leaving $~~178~~185.10 million available.

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Covenants

Under the terms of the Partnership Revolver, the Partnership is subject to a maximum leverage ratio of 4.50:1.00 prior to June 30, 2020 and 4.00:1.00 after June 30, 2020, and a minimum consolidated interest coverage ratio of 2.50:1.00. The Partnership Revolver contains other covenants and events of default that are customary for similar agreements and may limit our ability to take various actions including our ability to pay a distribution or repurchase our common units.

If we fail to perform our obligations under these and other covenants, the lenders' credit commitment could be terminated and any outstanding borrowings, together with accrued interest, under the Partnership Revolver could be declared immediately due and payable. The Partnership has a cross-default provision that applies to our indebtedness having a principal amount in excess of $35 million.

As of ~~September~~March 3031, ~~2018~~2019, the Partnership was 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.

8. Commitments and Contingent Liabilities

The EPA issued Notices of Violations (“NOVs”) for the Haverhill and Granite City cokemaking facilities which stemmed from alleged violations of air operating permits for these facilities. We are working in a cooperative manner with the EPA, the Ohio Environmental Protection Agency and the Illinois Environmental Protection Agency to address the allegations, and have entered into a consent decree in federal district court with these parties. The consent decree includes a $2.2 million civil penalty payment that was paid by SunCoke in 2014, as well as capital projects underway to improve the reliability of the energy recovery systems and enhance environmental performance at the Haverhill and Granite City cokemaking facilities. In Anthe ~~amendment~~third ~~was~~quarter ~~lodged~~of ~~in February~~ 2018, ~~and entered by~~ the ~~federal~~Court ~~district~~entered ~~court~~an inamendment ~~July~~to ~~2018.~~the ~~The~~consent ~~amendment~~decree which provides the Haverhill and Granite City facilities with additional time to perform necessary maintenance on the flue gas desulfurization systems without exceeding consent decree limits. The emissions associated with this maintenance will be mitigated in accordance with the amendment, and there are no civil penalty payments associated with this amendment. The project at Granite City was due to be completed in February 2019, but wethe ~~now~~Partnership ~~expect~~expects to complete the project in ~~July~~June 2019 and ~~are~~is in discussions with the government entities regarding, among other things, the timing thereof.

We SunCoke ~~retained~~and ~~an aggregate of $119 million in proceeds from~~ the Partnership's ~~IPO~~anticipate ~~and~~spending ~~subsequent~~approximately $150 ~~dropdowns~~ million to ~~fund~~comply ~~the~~with these environmental remediation projects ~~at the Haverhill and Granite City cokemaking facilities~~. ~~Pursuant~~ ~~to the omnibus agreement, any amounts that we spend on these projects in excess of the $119 million will be reimbursed by SunCoke.~~ Prior to our formation, SunCoke spent approximately $7 million related to these projects. WeThe ~~have~~Partnership has spent approximately $~~125~~134 million to date and expects to spend the remaining capital ~~is expected to be spent~~ through the first half of 2019. Pursuant to the omnibus agreement, ~~SunCoke,~~we ~~through~~retained an aggregate of $119 million in proceeds from our IPO and subsequent dropdowns to comply with the ~~general~~expected ~~partner,~~terms ~~made~~of a consent decree. Subsequently, SunCoke has made capital ~~contribution~~contributions ofto the Partnership of $1024 million and towill usmake ~~during~~additional ~~the~~capital ~~first~~contributions ~~quarter~~for ofany ~~2018~~amounts ~~for~~spent ~~these~~beyond what was previously funded.

The Partnership is a party to certain other pending and threatened claims, including matters related to commercial and tax disputes, product liability, employment claims, personal injury claims, premises-liability claims, allegations of exposures to toxic substances and general environmental claims. Although the ultimate outcome of these claims cannot be ascertained at this time, it is reasonably possible that some portion of these claims could be resolved unfavorably to the Partnership. Management of the Partnership believes that any liability which may arise from claims would not have a material adverse impact on our consolidated financial statements.

9. Leases

The Partnership leases land, equipment, railcars and locomotives. Arrangements are assessed at inception to determine if a lease exists and, with the adoption of ASC 842, "Leases," right-of-use (“ROU”) assets and lease liabilities are recognized based on the present value of lease payments over the lease term. Because the Partnership's leases do not provide an implicit rate of return, the Partnership uses its incremental borrowing rate at the inception of a lease to calculate the present value of lease payments. The Partnership has elected to apply the short-term lease exemption for all asset classes, therefore excluding them from the balance sheet, and will recognize the lease payments in the period they are incurred. Additionally, the Partnership has elected to account for lease and nonlease components of an arrangement, such as assets and services, as a single lease component for all asset classes.

Certain of our long-term leases include one or more options to renew or to terminate, with renewal terms that can extend the lease term up to 40 years. The impact of lease renewals or terminations are included in the expected lease term to the extent the Partnership is reasonably certain to exercise the renewal or termination. The Partnership has no finance leases.

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Lease expenses are classified as cost of products sold and operating expenses on the Consolidated Statements of Income. The components of lease expense were as follows:

known environmental remediation projects. SunCoke expects to make additional capital contributions to us of approximately $10 million in the fourth quarter of 2018 and approximately $5 million in the first half of 2019 for the estimated future spending related to these environmental remediation projects.



	Three months ended March 31, 2019
	(Dollars in millions)
Operating leases	$	0.3
Short-term leases⁽¹⁾⁽²⁾	$	1.6
Total lease expense	$	1.9

~~The~~(1) ~~Partnership~~Includes isexpenses afor ~~party~~ month-to-month ~~certain~~equipment ~~other pending and threatened claims~~leases, ~~including~~which ~~matters~~are ~~related~~classified toas ~~commercial and tax disputes, product liability, employment claims, personal injury claims, premises~~short-~~liability~~term ~~claims,~~as ~~allegations of exposures to toxic substances and general environmental claims. Although~~ the ~~ultimate~~Partnership ~~outcome of these claims cannot be ascertained at this time, it~~ is not reasonably ~~possible~~certain ~~that some portion of these claims could be resolved unfavorably~~ to ~~the~~renew ~~Partnership. Management of~~ the ~~Partnership~~lease ~~believes~~term ~~that~~beyond ~~any~~one ~~liability which may arise from claims would not have a material adverse impact on our consolidated financial statements~~month.

9.(2) ~~Fair~~Includes ~~Value~~variable ~~Measurements~~lease expenses, which are immaterial to the consolidated financial statements.

Total lease expense was $1.7 million during the three months ended March 31, 2018.

Supplemental balance sheet information related to leases was as follows:



	Financial Statement Classification	March 31, 2019
		(Dollars in millions)
Operating ROU assets	Deferred charges and other assets	$	2.1

Operating lease liabilities:
Current operating lease liabilities	Accrued liabilities	$	0.9
Noncurrent operating lease liabilities	Other deferred credits and liabilities	$	1.1
Total operating lease liabilities		$	2.0

The weighted average remaining lease term and weighted average discount rate were as follows:



	Three months ended March 31, 2019
Weighted average remaining lease term of operating leases	5.6 years
Weighted average discount rate of operating leases	5.2	%

Supplemental cash flow information related to leases was as follows:



	Three months ended March 31, 2019
	(Dollars in millions)
Operating cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	0.4

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Maturities of operating lease liabilities as of March 31, 2019 are as follows:



	(Dollars in millions)
Years ending December 31:
2019⁽¹⁾	0.7
2020	0.3
2021	0.3
2022	0.2
2023	0.1
2024-Thereafter	0.7
Total lease payments	2.3
Less: imputed interest	0.3
Total lease liabilities	$	2.0


(1)	Excluding the three months ended March 31, 2019.

The aggregate amount of future minimum annual rental payments applicable to noncancelable leases as of December 31, 2018 were as follows:



	Minimum Rental Payments
	(Dollars in millions)
Year ending December 31:
2019	$	1.1
2020	0.2
2021	0.1
2022	0.1
2023	—
2024-Thereafter	—
Total	$	1.5

10. Fair Value Measurements

The Partnership measures certain financial and non-financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. Fair value disclosures are reflected in a three-level hierarchy, maximizing the use of observable inputs and minimizing the use of unobservable inputs.

The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows:


•	Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market.


•	Level 2—inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model-derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability.


•	Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Certain assets and liabilities are measured at fair value on a recurring basis. ~~The~~ ~~Partnership’s cash equivalents are measured at fair value based on quoted prices in active markets for identical assets. These inputs are classified as Level 1 within the valuation hierarchy.~~ The Partnership did not have ~~material~~any cash equivalents at ~~September~~March 3031, ~~2018~~2019 or December 31, ~~2017~~2018.

Convent Marine Terminal Contingent Consideration

In connection with the CMT acquisition, the Partnership entered into a contingent consideration arrangement that requires us to make future payments to The Cline Group based on future volume over a specified threshold, price and contract renewals. The fair value of the contingent consideration was estimated based on a probability-weighted analysis using significant inputs that are not observable in the market, or Level 3 inputs. Key assumptions included probability adjusted levels of handling services provided by CMT, anticipated price per ton on future sales and probability of contract renewal, including length of future contracts, volume commitment, and anticipated price per ton. The fair value of the contingent consideration was $3.6 million at September 30, 2018, with $0.9 million included in accrued liabilities and $2.7 million included in other deferred credit and liabilities on the Consolidated Balance Sheets. The fair value of the contingent consideration was $2.5 million at December 31, 2017 and was included in other deferred credits and liabilities on the Consolidated Balance Sheets. The increase in the fair value of the contingent consideration liability was primarily due to changes in expected throughput volumes related to the long-term, take-or-pay agreements.

Certain Financial Assets and Liabilities not Measured at Fair Value

At September 30, 2018 and December 31, 2017, the estimated fair value of the Partnership's total debt was $864.2 million and $875.0 million, respectively, compared to a carrying amount of $815.8 million and $842.7 million, respectively. The fair value was estimated by management based upon estimates of debt pricing provided by financial institutions which are considered Level 2 inputs.

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10. Revenue from Contracts with Customers

Cokemaking

Substantially all our coke sales are made pursuant to long-term, take-or-pay agreements with ArcelorMittal USA LLC and/or its affiliates (“AM USA”), AK Steel Holding Corporation ("AK Steel") and United States Steel Corporation ("U.S. Steel"), who are three of the largest blast furnace steelmakers in North America. The take-or-pay provisions of our agreements require us to deliver minimum annual tonnage, which varies by contract, but covers at least 90 percent of each facility's annual capacity. The take-or-pay provisions also require our customers to purchase such volumes of coke or pay the contract price for any tonnage they elect not to take. These coke sales agreements have an average remaining term of approximately seven years, and to date, our coke customers have satisfied their obligations under these agreements.

Our coke sales prices include an operating cost component, a coal cost component and a return of capital component. Operating costs under one of our coke sales agreements are contractual, subject to an annual adjustment based on an inflation index. Under our other three coke sales agreements operating costs are passed through to the respective customers subject to an annually negotiated budget, in some cases subject to a cap annually adjusted for inflation, and generally we share any difference in costs from the budgeted amounts with our customers. Our coke sales agreements contain pass-through provisions for coal and coal procurement costs, subject to meeting contractual coal-to-coke yields. To the extent that the actual coal-to-coke yields are less than the contractual standard, we are responsible for the cost of the excess coal used in the cokemaking process. Conversely, to the extent our actual coal-to-coke yields are higher than the contractual standard, we realize gains. The reimbursement of pass-through operating and coal costs from these coke sales agreements are considered to be variable consideration components included in the cokemaking sales price. The return of capital component for each ton of coke sold to the customer is determined at the time the coke sales agreement is signed and is effective for the term of each sales agreement. This component of our coke sales prices is intended to provide an adequate return on invested capital and may differ based on investment levels and other considerations. The actual return on invested capital at any facility is also impacted by favorable or unfavorable performance on pass-through cost items. Revenues are recognized when performance obligations to our customers are satisfied in an amount that reflects the consideration that we expect to receive in exchange for the coke.

Logistics

In our logistics business, handling and/or mixing services are provided to steel, coke (including some of our and SunCokes's domestic cokemaking facilities), electric utility, coal producing and other manufacturing based customers. Materials are transported in numerous ways, including rail, truck, barge or ship. We do not take possession of materials handled, but rather act as intermediaries between our customers and end users, deriving our revenues from services provided on a per ton basis. The handling and mixing services consist primarily of two performance obligations, unloading and loading of materials. Our logistics business has long-term, take-or-pay agreements requiring us to handle over 15 million tons annually. The take-or-pay provisions in these agreements require our customers to purchase such handling services or pay the contract price for services they elect not to take. Estimated take-or-pay revenue of approximately $385 million from all of our long-term logistics contracts is expected to be recognized over the next five years for unsatisfied or partially unsatisfied performance obligations as of September 30, 2018. To date, our customers have satisfied their obligations under these agreements. Included with these long-term, take-or-pay arrangements are our contracts with Murray American Coal, Inc. ("Murray") and Foresight Energy LLC ("Foresight"), which cover 10 million tons of CMT's annual transloading capacity of 15 million tons. Revenues in our logistics business are recognized when the customer receives the benefits of the services provided, in an amount that reflects the consideration that we will receive in exchange for those services. Billings to CMT customers for take-or-pay volume shortfalls based on pro-rata volume commitments under take-or-pay contracts that are in excess of billings earned for services provided are recorded as contract liabilities and characterized as deferred revenue on the Consolidated Balance Sheets. Deferred revenue is recognized at the earliest of i) when the performance obligation is satisfied; ii) when the performance obligation has expired, based on the terms of the contract; or iii) when the likelihood that the customer would exercise its right to the performance obligation becomes remote.

The following table provides changes in the Partnership's deferred revenue:

	2018			2017
	(Dollars in millions)
Beginning balance at December 31, 2017 and 2016, respectively	$	1.7		$	2.5
Reclassification of the beginning contract liabilities to revenue, as a result of performance obligation satisfied	(1.4		)	(2.1		)
Billings in excess of services performed, not recognized as revenue	2.3			16.2
Ending balance at September 30, 2018 and 2017, respectively	$	2.6		$	16.6

Energy

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~~Our~~In ~~energy~~connection ~~sales~~with ~~are~~the ~~made~~CMT ~~pursuant~~acquisition, tothe ~~either~~Partnership ~~steam~~entered orinto ~~energy~~a ~~supply~~contingent consideration arrangement that runs through 2022 and ~~purchase~~requires ~~agreements~~us orto ismake ~~sold~~future ~~into~~payments ~~the~~to ~~regional~~The ~~power~~Cline ~~market.~~Group ~~Our~~based ~~cokemaking~~on ~~ovens~~future ~~utilize~~volume ~~efficient~~over a specified threshold, ~~modern~~price ~~heat~~and ~~recovery~~contract ~~technology~~renewals. The ~~designed~~fair tovalue ~~combust~~of the ~~coal’s~~contingent ~~volatile~~consideration ~~components~~was ~~liberated~~estimated ~~during~~based ~~the~~on ~~cokemaking~~a ~~process~~probability-weighted ~~and~~analysis ~~use~~using ~~the~~significant ~~resulting~~inputs ~~heat~~that toare ~~create~~not ~~steam~~observable in the market, or ~~electricity~~Level ~~for~~3 ~~sale~~inputs. Key ~~The~~assumptions ~~energy~~included probability adjusted levels of handling services provided ~~under~~by ~~these~~CMT, ~~arrangements~~anticipated ~~result~~price inper ~~transfer~~ton on future sales and probability of ~~control~~contract ~~over~~renewal, ~~time~~including length of future contracts, volume commitment, and anticipated price per ton. ~~Revenues~~The ~~are~~fair ~~recognized~~value asof ~~energy~~the iscontingent ~~delivered~~consideration towas ~~our~~$3.7 ~~customers~~million and $5.0 million at March 31, 2019 and December 31, 2018, respectively, and was primarily included in another ~~amount~~deferred ~~based~~credits and liabilities on the ~~terms~~Consolidated Balance Sheets. The decrease in the contingent consideration liability in the first quarter of ~~each~~2019 ~~arrangement~~was the result of a $0. 9 million payment made as well as a decrease in expected future payments for changes in expected throughput volumes related to the long-term, take-or-pay agreements.

Certain Financial Assets and Liabilities not Measured at Fair Value

At March 31, 2019 and December 31, 2018, the estimated fair value of the Partnership's total debt was $819.9 million and $778.9 million, respectively, compared to a carrying amount of $809.4 million and $815.1 million, respectively. The fair value was estimated by management based upon estimates of debt pricing provided by financial institutions which are considered Level 2 inputs.

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11. Revenue from Contracts with Customers

Disaggregated Sales and Other Operating Revenue

The following table provides disaggregated sales and other operating revenue by product or service, excluding intersegment revenues:



	Three Months Ended March 31
	2019		2018

	(Dollars in millions)
Sales and other operating revenue:
Cokemaking	$	190.9	$	174.8
Energy	13.8		13.6
Logistics	25.1		24.4
Other	0.6		2.0
Sales and other operating revenue	$	230.4	$	214.8

	Three Months Ended September 30				Nine Months Ended September 30,
	2018		2017		2018		2017
	(Dollars in millions)
Sales and other operating revenue:
Cokemaking	$	179.0	$	172.7	$	537.1	$	500.5
Energy	12.5		14.7		39.2		39.3
Logistics	30.8		23.8		85.8		62.0
Other	1.8		2.8		5.4		8.4
Sales and other operating revenue	$	224.1	$	214.0	$	667.5	$	610.2

The following table provides disaggregated sales and other operating revenue by customer:

		Three Months Ended September 30,				Nine Months Ended September 30,
		Three Months Ended March 31,
		2018		2017		2018		2017
		2019		2018
	(Dollars in millions)	~~(Dollars in millions)~~
Sales and other operating revenue:
AM USA		$	4443.29	$	4737.91	$	~~125.2~~	$	~~134.3~~
AK Steel		96104.31		8492.29		~~284.0~~		~~251.1~~
U.S. Steel		4754.41		5851.57		~~154.5~~		~~157.6~~
Foresight and Murray		1710.49		814.41		~~48.9~~		~~27.9~~
Other		1817.84		1519.0		~~54.9~~		~~39.3~~
Sales and other operating revenue		$	~~224~~230.14	$	214.08	$	~~667.5~~	$	~~610.2~~

~~Shipping~~Logistics ~~and~~Contract ~~Handling Costs~~ Balances

~~Shipping~~Our ~~and~~logistics ~~handling~~business ~~costs~~has ~~are~~long-term, ~~included~~take-or-pay inagreements ~~cost~~requiring ofus ~~products~~to ~~sold~~handle ~~and~~over ~~operating~~15 ~~expenses~~million ontons ~~the~~annually. ~~Consolidated~~The ~~Statements~~take-or-pay ofprovisions ~~Operations~~in ~~and~~these ~~are~~agreements ~~generally~~require ~~passed~~our ~~through~~customers to ~~our~~purchase ~~customers.~~such ~~The~~handling ~~Partnership~~services ~~has~~or ~~elected~~pay tothe ~~account~~contract price for ~~shipping~~services ~~and~~they ~~handling~~elect ~~activities~~not asto atake. ~~promise~~Estimated take-or-pay revenue of approximately $353 million from all of our long-term logistics contracts is expected to ~~fulfill~~be recognized over the ~~transfer~~next five years for unsatisfied or partially unsatisfied performance obligations as of ~~coke~~March 31, 2019.

14The following table provides changes in the Partnership's deferred revenue:



	2019			2018
	(Dollars in millions)
Beginning balance at December 31, 2018 and 2017, respectively	$	3.0		$	1.7
Reclassification of the beginning contract liabilities to revenue, as a result of performance obligation satisfied	(1.0		)	(0.6		)
Billings in excess of services performed, not recognized as revenue	5.5			2.5
Ending balance at March 31, 2019 and 2018, respectively	$	7.5		$	3.6

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1112. Business Segment Information

The Partnership derives its revenues from the Domestic Coke and Logistics reportable segments. Domestic Coke operations are comprised of the Haverhill, Middletown and Granite City cokemaking facilities, which use similar production processes to produce coke and to recover waste heat that is converted to steam or electricity.

Logistics operations are comprised of CMT, Lake Terminal and KRT. Handling and mixing results are presented in the Logistics segment.

Corporate and other expenses that can be identified with a segment have been included in determining segment results. The remainder is included in Corporate and Other.

The following table includes Adjusted EBITDA, which is the measure of segment profit or loss and liquidity reported to the chief operating decision maker for purposes of allocating resources to the segments and assessing their performance:

		Three Months Ended September 30,						Nine Months Ended September 30,
		Three Months Ended March 31,
		2018			2017			2018			2017
		2019			2018
	(Dollars in millions)	~~(Dollars in millions)~~
Sales and other operating revenue:
Domestic Coke		$	~~193~~204.18		$	~~193~~190.40		$	~~581.1~~		$	~~548.6~~
Logistics		3125.06			2024.68			~~86.4~~			~~61.6~~
Logistics intersegment sales		12.70			1.67			~~5.2~~			~~4.9~~
Elimination of intersegment sales		(12.70		)	(1.67		)	~~(5.2~~		)	~~(4.9~~		)
Total sales and other operating revenue		$	~~224~~230.14		$	214.08		$	~~667.5~~		$	~~610.2~~
Adjusted EBITDA:
Domestic Coke		$	3739.43		$	5040.03		$	~~118.7~~		$	~~130.0~~
Logistics		2012.95			1213.34			~~53.5~~			~~34.9~~
Corporate and Other		(34.71		)	(34.92		)	~~(12.6~~		)	~~(11.8~~		)
Total Adjusted EBITDA		$	5447.67		$	5849.45		$	~~159.6~~		$	~~153.1~~
Depreciation and amortization expense:
Domestic Coke(1)		$	17.1		$	14.3		$	46.1		$	45.6
Domestic Coke		$	22.5		$	14.7
Logistics		65.09			56.98			~~18.7~~			~~17.7~~
Total depreciation and amortization expense		$	2328.14		$	2021.25		$	~~64.8~~		$	~~63.3~~
Capital expenditures:
Domestic Coke		$	1411.56		$	1310.03		$	~~42.2~~		$	~~21.8~~
Logistics		01.98			0.43			~~2.2~~			~~1.5~~
Total capital expenditures		$	1513.4		$	1310.46		$	~~44.4~~		$	~~23.3~~

(1) We revised the estimated useful lives of certain assets in our Domestic Coke segment, primarily as a result of plans to replace major components of certain heat recovery steam generators with upgraded materials and design, resulting in additional depreciation of $2.7 million, or $0.06 per common unit, during both the three and nine months ended September 30, 2018.16

	September 30, 2018		December 31, 2017
	(Dollars in millions)
Segment assets:
Domestic Coke	$	1,183.0	$	1,151.4
Logistics	467.4		489.8
Corporate and Other	3.7		0.2
Total assets	$	1,654.1	$	1,641.4

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The following table sets forth the Partnership's segment assets:

The Partnership evaluates the performance of its segments based on segment Adjusted EBITDA, which represents earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted for any loss (gain) on extinguishment of debt, and/or changes to our contingent consideration liability related to our acquisition of CMT. Adjusted EBITDA does not represent and should not be considered an alternative to net income or operating income under GAAP and may not be comparable to other similarly titled measures in other businesses.



	March 31, 2019		December 31, 2018

	(Dollars in millions)
Segment assets:
Domestic Coke	$	1,173.6	$	1,158.4
Logistics	459.3		458.7
Corporate and Other	0.9		2.0
Total assets	$	1,633.8	$	1,619.1

The Partnership evaluates the performance of its segments based on segment Adjusted EBITDA, which represents earnings before interest, taxes, depreciation and amortization ("EBITDA"), adjusted for any loss on extinguishment of debt, changes to our contingent consideration liability related to our acquisition of CMT and/or transaction costs incurred as part of the Simplification Transaction. Adjusted EBITDA does not represent and should not be considered an alternative to net income or operating income under GAAP and may not be comparable to other similarly titled measures in other businesses.

Management believes Adjusted EBITDA is an important measure of the operating performance and liquidity of the Partnership's net assets and its ability to incur and service debt, fund capital expenditures and make distributions. Adjusted EBITDA provides useful information to investors because it highlights trends in our business that may not otherwise be apparent when relying solely on GAAP measures and because it eliminates items that have less bearing on our operating performance and liquidity. EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, and they should not be considered an alternative to net income, operating cash flow or any other measure of financial performance presented in accordance with GAAP. Set forth below is additional discussion of the limitations of Adjusted EBITDA as an analytical tool.

Limitations. Other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure. Adjusted EBITDA also has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results as reported under GAAP. Some of these limitations include that Adjusted EBITDA:


•	does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;


•	does not reflect items such as depreciation and amortization;


•	does not reflect changes in, or cash requirements for, working capital needs;


•	does not reflect our interest expense, or the cash requirements necessary to service interest on or principal payments of our debt;


•	does not reflect certain other non-cash income and expenses;


•	excludes income taxes that may represent a reduction in available cash; and


•	includes net income attributable to noncontrolling interests.

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	Three Months Ended September 30,					Nine Months Ended September 30,
	2018		2017			2018		2017
	(Dollars in millions)
Net income (loss)	$	15.7	$	23.3		$	47.8	$	(120.9	)
Add:
Depreciation and amortization expense	23.1		20.2			64.8		63.3
Interest expense, net	14.9		15.1			44.9		41.7
Loss on extinguishment of debt	—		0.1			—		20.0
Income tax expense	0.4		1.7			1.0		150.7
Contingent consideration adjustments	0.5		(2.0		)	1.1		(1.7		)
Adjusted EBITDA	$	54.6	$	58.4		$	159.6	$	153.1
Subtract:
Adjusted EBITDA attributable to noncontrolling interest(1)	0.8		1.0			2.4		2.6
Adjusted EBITDA attributable to SunCoke Energy Partners, L.P.	$	53.8	$	57.4		$	157.2	$	150.5

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
	(Dollars in millions)
Net cash provided by operating activities	$	72.6		$	61.1		$	148.0		$	112.7
Add:
Cash interest paid	2.4			2.8			32.3			38.3
Cash income tax paid	0.4			—			2.9			0.6
Changes in working capital(2)	(18.8		)	(8.8		)	(21.2		)	(2.9		)
Contingent consideration adjustments	0.5			(2.0		)	1.1			(1.7		)
Other adjustments to reconcile cash provided by operating activities to Adjusted EBITDA	(2.5		)	5.3			(3.5		)	6.1
Adjusted EBITDA	$	54.6		$	58.4		$	159.6		$	153.1
Subtract:
Adjusted EBITDA attributable to noncontrolling interest(1)	0.8			1.0			2.4			2.6
Adjusted EBITDA attributable to SunCoke Energy Partners, L.P.	$	53.8		$	57.4		$	157.2		$	150.5

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

(2) Changes in working capital exclude those items not impacting Adjusted EBITDA, such as changes in interest payable and income taxes payable.

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Below is a reconciliation of Adjusted EBITDA to net income and net cash provided by operating activities, which are its most directly comparable financial measures calculated and presented in accordance with GAAP:



		Three Months Ended March 31,
		2019			2018
	(Dollars in millions)
Net income		$	4.9		$	12.7
Add:
Depreciation and amortization expense		28.4			21.5
Interest expense, net		14.4			15.0
Income tax (benefit) expense		(0.1		)	0.3
Contingent consideration adjustments⁽¹⁾		(0.4		)	—
Simplification Transaction costs		0.5			—
Adjusted EBITDA		$	47.7		$	49.5
Subtract:
Adjusted EBITDA attributable to noncontrolling interest⁽²⁾		0.8			0.8
Adjusted EBITDA attributable to SunCoke Energy Partners, L.P.		$	46.9		$	48.7



		Three Months Ended March 31,
		2019			2018
	(Dollars in millions)
Net cash provided by operating activities		$	25.7		$	66.1
Add:
Cash interest paid, net of capitalized interest		0.4			1.5
Cash income tax paid		—			1.3
Changes in working capital⁽³⁾		19.2			(19.6		)
Contingent consideration adjustments⁽¹⁾		(0.4		)	—
Simplification Transaction costs		0.5			—
Other adjustments to reconcile cash provided by operating activities to Adjusted EBITDA		2.3			0.2
Adjusted EBITDA		$	47.7		$	49.5
Subtract:
Adjusted EBITDA attributable to noncontrolling interest⁽²⁾		0.8			0.8
Adjusted EBITDA attributable to SunCoke Energy Partners, L.P.		$	46.9		$	48.7


(1)	In connection with the CMT acquisition, the Partnership entered into a contingent consideration arrangement that requires the Partnership to make future payments to the seller based on future volume over a specified threshold, price and contract renewals. Contingent consideration adjustments in 2019 were primarily the result of modifications to the volume forecast.


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


(3)	Changes in working capital exclude those items not impacting Adjusted EBITDA, such as changes in interest payable.

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Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q contains certain forward-looking statements of expected future developments, 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, expectations and intentions. Our future results and financial condition may differ materially from those we currently anticipate as a result of the factors we describe under “Cautionary Statement Concerning Forward-Looking Statements.”

This Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is based on financial data derived from the financial statements prepared in accordance with United States ("U.S.") generally accepted accounting principles (“GAAP”) and certain other financial data that is prepared using non-GAAP measures. For a reconciliation of these non-GAAP measures to the most comparable GAAP components, see “Non-GAAP Financial Measures” at the end of this Item and Note 1112 to our consolidated financial statements.

Our MD&A is provided in addition to the accompanying consolidated financial statements and notes to assist readers in understanding our results of operations, financial condition and cash flow.

Overview

SunCoke Energy Partners, L.P., (the "Partnership", "we", "our", and "us") primarily produces coke used in the blast furnace production of steel. Coke is a principal raw material in the blast furnace steelmaking process and is produced by heating metallurgical coal in a refractory oven, which releases certain volatile components from the coal, thus transforming the coal into coke. ~~Additionally,~~We wealso ~~own~~provide handling and/or ~~operate~~mixing aservices ~~logistics~~to ~~business~~steel, ~~which~~coke ~~primarily~~(including ~~provides~~some ~~handling~~of our and~~/or~~ ~~mixing~~SunCoke ~~services~~Energy, ofInc.'s (“SunCoke”) domestic cokemaking facilities), electric utility, coal producing and other ~~aggregates~~manufacturing based customers. At ~~September~~March 3031, ~~2018~~2019, SunCoke Energy, Inc. ("SunCoke") through a subsidiary, owned a 60.4 percent limited partnership interest in us and indirectly owned and controlled our general partner, which holds a 2.0 percent general partner interest in us and all of our incentive distribution rights ("IDRs").

Cokemaking

At ~~September~~March 3031, ~~2018~~2019, we owned a 98 percent interest in Haverhill Coke Company LLC ("Haverhill"), Middletown Coke Company, LLC ("Middletown") and Gateway Energy and Coke Company, LLC ("Granite City") and SunCoke owned the remaining 2 percent ownership interest in each of Haverhill, Middletown, and Granite City. Our coke sales are made pursuant to long-term, take-or-pay agreements. ~~These~~Our ~~coke~~core ~~sales~~business ~~agreements~~model ~~have~~is anpredicated ~~average~~on ~~remaining~~providing ~~term~~steelmakers ofan ~~approximately~~alternative ~~seven~~to ~~years~~investing ~~and~~capital ~~contain pass-through provisions for costs we incur~~ in ~~the~~their ~~cokemaking~~own ~~process,~~captive ~~including coal procurement costs (subject to meeting contractual coal-to-~~coke ~~yields),~~production ~~operating~~facilities. ~~and~~We ~~maintenance~~direct ~~expenses,~~our ~~costs~~marketing ~~related~~efforts toprincipally ~~the~~towards ~~transportation~~steelmaking ~~of coke to our~~ customers, ~~taxes~~that ~~(other~~require ~~than~~coke ~~income~~for ~~taxes)~~use ~~and~~in ~~costs~~their ~~associated~~blast ~~with~~furnaces. ~~changes~~Our ~~in regulation~~U. ToS. ~~date,~~coke ~~our~~sales ~~customers~~are ~~have~~made ~~satisfied~~pursuant ~~their~~to ~~obligations~~long-term, ~~under~~take-or-pay ~~these~~ agreements~~. The~~ ~~coke~~with ~~sales~~ArcelorMittal ~~agreement~~USA LLC and/or ~~energy~~its ~~sales~~affiliates ~~agreement~~("AM ~~with~~USA"), AK Steel Holding Corporation ("AK Steel") atand ~~our~~United ~~Haverhill~~States ~~facility are subject to early termination by AK~~ Steel ~~only~~Corporation, if("U.S. AK Steel"), ~~meets~~who ~~both~~are three of the ~~following~~largest ~~two~~blast ~~criteria:~~furnace ~~(1)~~steel AKmakers ~~Steel~~in ~~permanently~~North ~~shuts~~America. ~~down~~These ~~operation~~coke ofsales ~~the~~agreements ~~iron~~have ~~producing~~an ~~portion~~average remaining term of ~~its~~approximately ~~Ashland~~six ~~Plant~~years and ~~(2)~~contain AKpass-through ~~Steel~~provisions ~~has~~for ~~not~~costs ~~acquired~~we orincur ~~begun~~in ~~construction~~the ofcokemaking aprocess, ~~new~~including ~~blast~~coal ~~furnace~~procurement incosts ~~the~~(subject ~~U.S.~~to meeting contractual coal-to-coke ~~replace~~yields), inoperating ~~whole~~and ormaintenance ~~in part~~expenses, ~~the~~costs ~~Ashland~~related ~~Plant~~to ~~iron~~the ~~production~~transportation ~~capacity.~~of AKcoke ~~Steel~~to ~~must~~our ~~give~~customers, attaxes ~~least~~(other ~~two~~than ~~years~~income ~~prior~~taxes) ~~notice~~and ofcosts ~~its~~associated ~~intention~~with tochanges ~~terminate~~in ~~the agreement~~regulation. To ~~Neither~~date, ofour ~~the~~customers ~~criteria~~ have ~~been~~satisfied ~~met.~~their Noobligations ~~other~~under ~~coke~~these ~~sales contract has an early termination clause~~agreements.

~~Our~~ The ~~core~~coke ~~business~~sales ~~model~~agreement isand ~~predicated~~energy onsales ~~providing~~agreement ~~steelmakers~~with anAK ~~alternative~~Steel toat ~~investing~~our ~~capital~~Haverhill infacility ~~their~~are ~~own~~subject ~~captive~~to ~~coke~~early ~~production~~termination ~~facilities.~~by WeAK ~~direct~~Steel ~~our~~only ~~marketing~~if ~~efforts~~AK ~~principally~~Steel ~~towards~~meets ~~steelmaking~~both ~~customers~~of ~~that~~the ~~require~~following ~~coke~~two ~~for~~criteria: ~~use~~(1) inAK ~~their~~Steel ~~blast~~permanently ~~furnaces.~~shuts ~~While~~down ~~our~~operation ~~steelmaking~~of ~~customers~~the ~~continue~~iron toproducing ~~operate~~portion inof anits ~~environment~~Ashland ~~that~~Works isPlant ~~challenged~~and by(2) ~~global~~AK ~~overcapacity,~~Steel ~~they~~has ~~have~~not ~~benefited~~acquired ~~from~~or ~~improved~~begun ~~steel~~construction ~~pricing,~~of ~~favorable~~a ~~trade~~new ~~policies,~~blast ~~including~~furnace in the U.S. ~~steel~~to ~~tariffs~~replace, ~~signed~~in ~~into~~whole ~~order~~or ~~during~~in part, the ~~first~~Ashland ~~half~~Works ofPlant ~~2018,~~iron ~~and~~production ~~solid~~capacity. ~~end~~If ~~market~~AK ~~demand. In~~Steel ~~response~~were able to ~~the~~satisfy ~~improving~~both ~~macro~~criteria ~~environment,~~and ~~United~~chose ~~States~~to elect early termination, AK Steel ~~Corporation~~must ~~(“U~~provide two years advance notice of the termination.S. During the two-year notice period, AK Steel”) ~~restarted~~must ~~both~~continue to perform under the terms of the ~~blast~~coke ~~furnaces~~sales atagreement and energy sales agreement. On January 28, 2019, AK Steel announced its ~~Granite~~intention ~~City~~to permanently close its Ashland Works ~~facility~~Plant inby ~~2018~~the end of 2019. ~~Despite~~ Were the ~~improving~~Ashland ~~market~~Plant ~~trends~~to permanently shut down, we believe AK Steel has ~~kept~~not ~~portions~~and ofwould ~~its~~not ~~Ashland~~satisfy ~~Kentucky~~the ~~Works~~second ~~facility~~criterion. ~~idled~~No other coke sales agreement has an early termination clause.

Our Granite City facility and the first phase of our Haverhill facility, or Haverhill I, have steam generation facilities, which use hot flue gas from the cokemaking process to produce steam for sale to customers, pursuant to steam supply and purchase agreements. Granite City sells steam to U.S. Steel and Haverhill I provides steam, at minimal cost, to Altivia Petrochemicals, LLC. Our Middletown facility and the second phase of our Haverhill facility, or Haverhill II, have cogeneration plants that use the hot flue gas created by the cokemaking process to generate electricity, which either is sold into the regional power market or to AK Steel pursuant to energy sales agreements.19

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~~The~~Our ~~following~~Granite ~~table~~City ~~sets~~facility ~~forth~~and ~~information~~the ~~about~~first phase of our ~~cokemaking~~Haverhill facility, or Haverhill I, have steam generation facilities, ~~and~~which ~~our~~use ~~coke~~hot flue gas from the cokemaking process to produce steam for sale to customers, pursuant to steam supply and ~~energy~~purchase ~~sales~~ agreements. Granite asCity sells steam to U.S. Steel and Haverhill I provides steam, at minimal cost, to Altivia Petrochemicals, LLC. Our Middletown facility and the second phase of ~~September 30~~our Haverhill facility, ~~2018:~~or Haverhill II, have cogeneration plants that use the hot flue gas created by the cokemaking process to generate electricity, which either is sold into the regional power market or to AK Steel pursuant to energy sales agreements.

The following table sets forth information about our cokemaking facilities and our coke, steam and energy sales agreements as of March 31, 2019:

Facility

Location

Coke

Customer

Year of

Start Up

Contract

Expiration

Number of

Coke Ovens

Annual Cokemaking

Capacity

(thousands of tons)

Use of Waste Heat

Granite City

Granite City, Illinois

U.S. Steel

2009

December 2025

120

650

Steam for power generation

Haverhill I

Franklin Furnace, Ohio

AM USA

2005

December 2020

100

550

Process steam

Haverhill II

Franklin Furnace, Ohio

AK Steel

2008

December 2021

100

550

Power generation

Middletown⁽¹⁾

Middletown, Ohio

AK Steel

2011

December 2032

100

550

Power generation

Total

420

2,300


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

Logistics

The Partnership owns a 100 percent interest in all of its logistics terminals, which consist of Convent Marine Terminal ("CMT"), Kanawha River Terminals, LLC ("KRT") and SunCoke Lake Terminal, LLC ("Lake Terminal"). CMT is one of the largest export terminals on the U.S. Gulf Coast. CMT provides strategic access to seaborne markets for coal and other industrial materials. Supporting low-cost Illinois Basin coal producers, the terminal provides loading and unloading services and has direct rail access. ~~and~~With its top of the line shiploader, CMT has the current capability to transload 15 million tons annually. The facility is supported by long-term contracts with volume commitments covering 10 million tons of its current capacity as well as 350 thousand liquid tons. In ~~2017,~~The wefacility ~~secured~~also ~~barge~~serves ~~unloading~~other ~~capabilities~~merchant tobusiness ~~efficiently~~including ~~unload~~aggregates ~~coal,~~(crushed ~~petroleum~~stone) ~~coke~~ and ~~other~~petroleum ~~materials~~coke. ~~from barges at~~ CMT’'s ~~dock. The~~efficient ~~addition of~~ barge unloading capabilities ~~complements~~complement ~~CMT's~~its ~~existing~~ rail and truck offerings and ~~provides~~provide the terminal with the ability to transload and mix a significantly broader variety of materials, including petroleum coke and other materials from barges at its dock. KRT is a leading metallurgical and thermal coal mixing and handling terminal service provider with collective capacity to mix and transload 25 million tons annually through its two operations in West Virginia. Lake Terminal provides coal handling and mixing services to SunCoke's Indiana Harbor cokemaking operations.

Our logistics business has the collective capacity to mix and/or transload more than 40 million tons of coal and other aggregates annually and has storage capacity of approximately 3 million tons. Our ~~services~~terminals ~~are~~act ~~provided~~as tointermediaries ~~steel,~~between ~~coke (including some of~~ our ~~and~~customers ~~SunCoke's domestic cokemaking facilities), electric utility, coal producing~~ and ~~other~~end ~~manufacturing~~users ~~based~~by ~~customers.~~providing ~~Services~~transloading ~~provided to our~~ and ~~SunCoke's~~mixing ~~domestic cokemaking facilities are provided under contracts with terms equivalent to those of an arm's-length transactions~~services. Materials are transported in numerous ways, including rail, truck, barge or ship. We do not take possession of materials handled, but ~~rather~~instead ~~act~~derive asour ~~intermediaries~~revenue ~~between~~by ~~our~~providing ~~customers~~handling and/or ~~end~~mixing ~~users,~~services ~~deriving~~to our ~~revenues~~customers ~~from services provided~~ on a per ton basis. ~~Billings~~ toRevenues ~~CMT customers for take-or-pay volume shortfalls based on pro-rata volume commitments under take-or-pay contracts that~~ are inrecognized ~~excess~~when ~~of billings earned for~~ services ~~provided~~ are ~~recorded~~provided as ~~contract~~defined ~~liabilities~~by and characterized as deferred revenue on the Consolidated Balance Sheets. Deferred revenue will be recognized at the earliest of i) when the performance obligation is satisfied; ii) when the performance obligation has expired, based on the terms of the contract; or iii) when the likelihood that the customer ~~would exercise its right to the performance obligation becomes remote~~contracts.

~~The~~Billings ~~financial~~to ~~performance~~CMT ofcustomers ~~our~~for ~~logistics~~take-or-pay ~~business~~volume isshortfalls ~~substantially~~based ~~dependent~~on ~~upon~~pro-rata avolume ~~limited~~commitments ~~number~~under oftake-or-pay ~~customers. Our~~contracts ~~CMT~~that ~~customers~~ are ~~impacted~~in byexcess ~~seaborne~~of ~~export~~billings ~~market~~earned ~~dynamics. Fluctuations~~for inservices ~~the~~provided ~~benchmark~~are ~~price~~recorded ~~for~~as ~~coal~~contract ~~delivery~~liabilities ~~into~~and ~~northwest~~characterized ~~Europe,~~ as ~~referenced~~deferred inrevenue on the ~~Argus/McCloskey's~~Consolidated ~~Coal~~Balance ~~Price~~Sheets. ~~Index~~Deferred ~~report~~revenue ~~("API2~~will ~~index~~be ~~price"),~~recognized asat ~~well~~the asearliest ~~Newcastle~~of ~~index~~i) ~~coal~~when ~~prices, as referenced in~~ the ~~Argus/McCloskey's~~performance ~~Coal~~obligation ~~Price~~is ~~Index~~satisfied; ~~report ("API5 index price"~~ii), ~~which~~when ~~reflect~~the ~~high-ash~~performance ~~coal~~obligation ~~prices~~has ~~shipped from Australia~~expired, ~~contribute~~based toon ~~our~~the ~~customers'~~terms ~~decisions~~of ~~to place tons into~~ the ~~export~~contract; ~~market~~or ~~and~~iii) ~~thus~~when ~~impact~~the ~~transloading~~likelihood ~~volumes~~that ~~through~~the ~~CMT.~~customer ~~Our~~would ~~KRT~~exercise ~~terminals~~its ~~serve~~right ~~two~~to ~~primary~~the ~~domestic~~performance ~~markets:~~obligation ~~metallurgical~~becomes ~~coal trade and thermal coal trade~~remote. ~~Metallurgical markets are primarily impacted by steel prices and blast furnace operating levels, whereas thermal markets are impacted by natural gas prices and electricity demand.~~

~~Strong~~The ~~API2~~financial ~~and~~performance ~~API5~~of ~~index~~our ~~prices~~logistics ~~continue~~business tois ~~provide~~substantially ~~attractive~~dependent ~~economics~~upon ~~for~~a ~~Illinois~~limited ~~Basin~~number ~~and~~of ~~Northern~~customers. ~~Appalachian~~Our CMT customers are impacted by seaborne export market dynamics. Fluctuations in the benchmark price for coal ~~producers~~delivery into northwest Europe, ~~which~~as ~~support~~referenced ~~continued~~in ~~strong~~the ~~volumes~~Argus/McCloskey's atCoal ~~CMT.~~Price ~~Late~~Index report (“API2 index price”), as well as Newcastle index coal prices, as referenced in the ~~first~~Argus/McCloskey's ~~quarter~~Coal ofPrice ~~2018~~Index report (“API5 index price”), ~~near~~which reflect high-~~historic~~ash ~~water~~coal ~~levels~~prices onshipped from Australia, contribute to our customers' decisions to place tons into the ~~Mississippi~~export ~~River~~market ~~adversely~~and ~~impacted~~thus impact transloading volumes through our ~~barge~~terminal ~~unloading~~facility. ~~activities~~Our ~~and~~KRT ~~temporarily~~terminals ~~limited~~serve ~~larger~~two ~~vessel~~primary domestic markets,

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loading activity at CMT. River conditions returned to normal during the middle of the second quarter of 2018. At KRT, metallurgical market conditions and volumes were favorable in 2018 compared to 2017 and we also saw improved demand from utility customers in the southeast region. However, KRT volumes were suppressed by rail availability due to strong demand for bulk products in the export market and barge availability due to high water on the Ohio River during the third quarter of 2018.

Third Quarter Key Financial Results

	Three Months Ended September 30,							Nine Months Ended September 30,
	2018		2017		Increase (Decrease)			2018		2017			Increase (Decrease)
	(Dollars in millions)
Net income (loss)	$	15.7	$	23.3	$	(7.6	)	$	47.8	$	(120.9	)	$	168.7
Net cash provided by operating activities	$	72.6	$	61.1	$	11.5		$	148.0	$	112.7		$	35.3
Adjusted EBITDA	$	54.6	$	58.4	$	(3.8	)	$	159.6	$	153.1		$	6.5

In the third quarter of 2018, strong sales volumes at CMT were offset by the impact of an outage at our Granite City facility. See detailed analysis of the quarter's results throughout the MD&A. See Note 11 to our consolidated financial statements for the definition and reconciliation of Adjusted EBITDA.

Recent Developments and Items Impacting Comparability

• 2018 Guidance Update. During the third quarter of 2018, the Partnership revised its full year 2018 Adjusted EBITDA guidance range to $210 million to $215 million from $215 million to $225 million. This reduction reflects the impact of a planned Granite City outage, which began during the third quarter of 2018 and materially increased in scope and duration from our original expectations as our analysis revealed additional improvements would benefit the facility. This outage is expected to be completed in late November of 2018 and will result in a full year reduction to Adjusted EBITDA of approximately $6.5 million beyond the originally planned estimate as well as additional capital expenditures of approximately $5 million.

• Granite City Fire. In July 2018, our Granite City facility experienced a fire on a piece of machinery resulting in lost production, unanticipated repair costs and lower energy revenues. This event negatively impacted Adjusted EBITDA by $2.6 million in the third quarter of 2018.

• IRS Final Regulations on Qualifying Income. In January 2017, the IRS announced its decision to exclude cokemaking as a qualifying income generating activity in its final regulations (the "Final Regulations") issued under section 7704(d)(1)(E) of the Internal Revenue Code relating to the qualifying income exception for publicly traded partnerships. Subsequent to the 10-year transition period, certain cokemaking entities in the Partnership will become taxable as corporations. As a result of the qualifying income exception, the Partnership recorded deferred income tax expense of $148.6 million during the first quarter of 2017, related to the future tax obligation expected to be owed for the projected book to tax differences at the end of the 10-year transition period. A portion of this deferred tax liability of $3.0 million was attributable to SunCoke's retained ownership interest in the cokemaking facilities and, therefore, was also reflected as a reduction in noncontrolling interest during the nine months ended September 30, 2017.

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~~Results~~metallurgical ofcoal ~~Operations~~trade and thermal coal trade. Metallurgical markets are primarily impacted by steel prices and blast furnace operating levels whereas thermal markets are impacted by natural gas prices and electricity demand.

~~The~~API2 ~~following~~and ~~table~~API5 ~~sets~~prices ~~forth~~declined ~~amounts~~in ~~from~~ the ~~Consolidated~~first ~~Statements~~quarter of ~~Operations~~2019 ~~for~~from the ~~three~~end of 2018, driven by reduced demand from Europe, Asia and ~~nine~~the ~~months~~Mediterranean ~~ended~~regions. While ~~September~~we 30expect the U.S. to continue to be a significant participant in the seaborne coal trade, we anticipate export volumes to be lower in 2019 as compared to 2018. However, ~~and~~due ~~2017:~~ to the take-or-pay nature of our contracts with coal export customers, lower export volumes do not have a material impact on our expected full-year results.

	Three Months Ended September 30,							Nine Months Ended September 30,
	2018		2017		Increase (Decrease)			2018		2017			Increase (Decrease)
	(Dollars in millions)
Revenues
Sales and other operating revenue	$	224.1	$	214.0	$	10.1		$	667.5	$	610.2		$	57.3
Costs and operating expenses
Cost of products sold and operating expenses	162.2		146.2		16.0			484.3		431.0			53.3
Selling, general and administrative expenses	7.8		7.4		0.4			24.7		24.4			0.3
Depreciation and amortization expense	23.1		20.2		2.9			64.8		63.3			1.5
Total costs and operating expenses	193.1		173.8		19.3			573.8		518.7			55.1
Operating income	31.0		40.2		(9.2		)	93.7		91.5			2.2
Interest expense, net	14.9		15.1		(0.2		)	44.9		41.7			3.2
Loss on extinguishment of debt	—		0.1		(0.1		)	—		20.0			(20.0		)
Income before income tax expense	16.1		25.0		(8.9		)	48.8		29.8			19.0
Income tax expense	0.4		1.7		(1.3		)	1.0		150.7			(149.7		)
Net income (loss)	15.7		23.3		(7.6		)	47.8		(120.9		)	168.7
Less: Net income (loss) attributable to noncontrolling interests	0.4		0.7		(0.3		)	1.5		(1.3		)	2.8
Net income (loss) attributable to SunCoke Energy Partners, L.P.	$	15.3	$	22.6	$	(7.3	)	$	46.3	$	(119.6	)	$	165.9

First Quarter Key Financial Results

Our consolidated results of operations were as follows:

Sales and Other Operating Revenue and Costs of Products Sold and Operating Expenses. Sales and other operating revenue and costs of products sold and operating expenses increased for the three and nine months ended September 30, 2018 compared to the same prior year period, primarily due to the pass-through of higher coal prices and higher volumes in our Domestic Coke segment. Higher sales volumes in our Logistics segment also increased revenue as compared to the prior year periods.



		Three Months Ended March 31,
		2019		2018		Decrease
	(Dollars in millions)
Net income		$	4.9	$	12.7	$	(7.8	)
Net cash provided by operating activities		$	25.7	$	66.1	$	(40.4	)
Adjusted EBITDA		$	47.7	$	49.5	$	(1.8	)

~~Depreciation~~Results ~~and Amortization Expense. The increase~~ in ~~depreciation and amortization expense was driven by revisions in 2018 to~~ the ~~estimated~~first ~~useful~~quarter ~~lives~~ of ~~certain~~2019, ~~assets~~reflect insolid ~~our~~operating ~~Domestic~~performance. ~~Coke~~Higher ~~segment,~~depreciation ~~primarily~~expense asalso aimpacted ~~result~~net ofincome ~~plans~~and torebuilding ~~replace~~coal ~~major~~inventory ~~components~~levels ofimpacted ~~certain~~cash ~~heat~~provided ~~recovery~~by ~~steam~~operating ~~generators~~activities. ~~with~~See ~~upgraded~~detailed ~~materials~~analysis ~~and~~of ~~design.~~the ~~The~~quarter's ~~revisions~~results ~~resulted~~throughout inthe ~~additional depreciation of $2~~MD&A.7 See ~~million,~~Note or12 ~~$0.06~~to ~~per~~our ~~common~~consolidated ~~unit,~~financial ~~during~~statements ~~both~~for the ~~three~~ definition and ~~nine~~reconciliation ~~months~~of ~~ended~~Adjusted ~~September 30, 2018~~EBITDA.

~~Interest~~Recent ~~Expense,~~Developments ~~net. Interest expense, net benefited from higher capitalized interest on the environmental remediation project during both the three~~ and ~~nine~~Items ~~months~~Impacting ~~ended~~Comparability ~~September 30, 2018. This benefit was more than offset by higher interest rates during the nine months ended September 30, 2018 as a result of our May 2017 debt restructuring.~~

~~Loss~~There onwere ~~Extinguishment~~no ofunusual ~~Debt.~~events ~~The~~during ~~loss on extinguishment of debt in~~ the ~~nine~~three months ended ~~September~~March 3031, ~~2017~~2019, ~~was~~significantly ~~recorded~~impacting incomparability ~~connection~~to ~~with~~ the ~~Partnership's~~prior ~~debt~~year ~~restructuring~~period.

Income Taxes. The nine months ended September 30, 2017 was impacted by the IRS Final Regulations previously discussed in "Recent Developments and Items Impacting Comparability."

Noncontrolling Interest. Net income (loss) attributable to noncontrolling interest represents SunCoke's retained ownership interest in our cokemaking facilities. The nine months ended September 30, 2017 includes $3.0 million related to the IRS Final Regulations previously described in "Recent Developments and Items Impacting Comparability."

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Results of Operations

The following table sets forth amounts from the Consolidated Statements of Income for the three months ended March 31, 2019 and 2018:



		Three Months Ended March 31,
		2019			2018		Increase (Decrease)

	(Dollars in millions)
Revenues
Sales and other operating revenue		$	230.4		$	214.8	$	15.6
Costs and operating expenses
Cost of products sold and operating expenses		174.1			157.1		17.0
Selling, general and administrative expenses		8.7			8.2		0.5
Depreciation and amortization expense		28.4			21.5		6.9
Total costs and operating expenses		211.2			186.8		24.4
Operating income		19.2			28.0		(8.8		)
Interest expense, net		14.4			15.0		(0.6		)
Income before income tax (benefit) expense		4.8			13.0		(8.2		)
Income tax (benefit) expense		(0.1		)	0.3		(0.4		)
Net income		4.9			12.7		(7.8		)
Less: Net income attributable to noncontrolling interests		0.4			0.5		(0.1		)
Net income attributable to SunCoke Energy Partners, L.P.		$	4.5		$	12.2	$	(7.7	)

Sales and Other Operating Revenue and Costs of Products Sold and Operating Expenses. Sales and other operating revenue and costs of products sold and operating expenses increased for the three months ended March 31, 2019 compared to the same prior year period, primarily due to the pass-through of higher coal prices in our Domestic Coke segment.

Selling, General and Administrative Expenses. Selling, general and administrative expenses during the three months ended March 31, 2019 increased compared to the same prior year period due to Simplification Transaction costs.

Depreciation and Amortization Expense. The increase in depreciation and amortization expense was driven by revisions made in the third quarter of 2018 to the estimated useful lives of certain assets in our Domestic Coke segment, primarily as a result of plans to replace major components of certain heat recovery steam generators with upgraded materials and design. The revisions resulted in additional depreciation of $5.7 million, or $0.12 per common unit, during the three months ended March 31, 2019.

Interest Expense, net. Interest expense, net benefited from higher capitalized interest on the environmental remediation project during the three months ended March 31, 2019.

Income tax (benefit) expense. The decrease in income tax expense was the result of a $0.3 million tax benefit related to an update to the future tax obligation expected to be owed for the projected book to tax differences at the end of the 10-year transition period under the final regulations on qualifying income. See Note 6 to our consolidated financial statements.

Noncontrolling Interest. Net income attributable to noncontrolling interest represents SunCoke's retained ownership interest in our cokemaking facilities and was reasonably consistent with the prior year period.

Results of Reportable Business Segments

We report our business results through two segments:

• Domestic Coke consists of our Haverhill facility, ~~Middletown~~located ~~and~~in ~~Granite~~Franklin ~~City~~Furnace, ~~cokemaking~~Ohio, ~~and~~our ~~heat~~Middletown ~~recovery~~facility, ~~operations~~ located in ~~Franklin Furnace~~Middletown, Ohio~~; Middletown~~, ~~Ohio;~~ and our Granite City facility, ~~Illinois~~located in Granite City, ~~respectively~~Illinois.

• Logistics consists of ~~our~~Convent ~~handling~~Marine ~~and/or~~Terminal ~~mixing~~("CMT"), located in ~~East~~Convent, ~~Chicago~~Louisiana, ~~Indiana;~~Kanawha ~~Ceredo~~River Terminal ("KRT"), ~~West~~located ~~Virginia;~~in Ceredo and Belle, West Virginia;, and ~~Convent~~SunCoke Lake Terminal ("Lake Terminal"), ~~Louisiana~~located in East Chicago, Indiana. Lake Terminal is located adjacent to SunCoke's Indiana Harbor cokemaking facility.

The operations of each of our segments are described at the beginning of the MD&A.

Corporate expenses that can be identified with a segment have been included in determining segment results. The remainder is included in Corporate and Other.

Management believes Adjusted EBITDA is an important measure of operating performance and liquidity and it is used as the primary basis for the chief operating decision maker to evaluate the performance of each of our reportable segments. Adjusted EBITDA should not be considered a substitute for the reported results prepared in accordance with GAAP. See "Non-GAAP Financial Measures" near the end of this Item.

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Segment Operating Data

The following tables set forth financial and operating data ~~for the three and nine months ended September 30, 2018 and 2017~~:

	Three Months Ended September 30,												Nine Months Ended September 30,
		Three Months Ended March 31,
	2018				2017				Increase (Decrease)				2018			2017			Increase (Decrease)
		2019				2018				Increase (Decrease)
	(Dollars in millions)
Sales and other operating revenues:
Domestic Coke	$	~~193.1~~$	204.8		$	~~193.4~~$	190.0		$	~~(0.3~~$	)14.8		$	~~581.1~~		$	~~548.6~~		$	~~32.5~~
Logistics	~~31.0~~	25.6			~~20.6~~	24.8			~~10.4~~	0.8			~~86.4~~			~~61.6~~			~~24.8~~
Logistics intersegment sales	~~1.7~~	2.0			~~1.6~~	1.7			~~0.1~~	0.3			~~5.2~~			~~4.9~~			~~0.3~~
Elimination of intersegment sales	~~(1.7~~	(2.0	)	)	~~(1.6~~	(1.7	)	)	~~(0.1~~	(0.3	)	)	~~(5.2~~		)	~~(4.9~~		)	~~(0.3~~		)
Total sales and other operating revenues	$	~~224.1~~$	230.4		$	~~214.0~~$	214.8		$	~~10.1~~$	15.6		$	~~667.5~~		$	~~610.2~~		$	~~57.3~~
Adjusted EBITDA(1):
Domestic Coke	$	~~37.4~~$	39.3		$	~~50.0~~$	40.3		$	(121.60	)	)	$	~~118.7~~		$	~~130.0~~		~~(11.3~~		)
Logistics	~~20.9~~	12.5			~~12.3~~	13.4			~~8.6~~	(0.9		)	~~53.5~~			~~34.9~~			~~18.6~~
Corporate and Other	~~(3.7~~	(4.1	)	)	~~(3.9~~	(4.2	)	)	~~0.2~~	0.1			~~(12.6~~		)	~~(11.8~~		)	~~(0.8~~		)
Total Adjusted EBITDA	$	~~54.6~~$	47.7		$	~~58.4~~$	49.5		$	~~(3.8~~$	)(1.8	)	$	~~159.6~~		$	~~153.1~~		$	~~6.5~~
Coke Operating Data:
Domestic Coke capacity utilization	~~102~~	101	%	%	~~103~~	98	%	%	(1	3	)%	%	~~101~~		%	~~100~~		%	1		%
Domestic Coke production volumes (thousands of tons)	~~588~~	572			~~595~~	554			(7	18	)		~~1,731~~			~~1,727~~			4
Domestic Coke sales volumes (thousands of tons)	~~589~~	570			~~585~~	568			4	2			~~1,746~~			~~1,718~~			28
Domestic Coke Adjusted EBITDA per ton(2)	$	~~63.50~~$	68.95		$	~~85.47~~$	70.95		$	~~(21.97~~$	)(2.00	)	$	~~67.98~~		$	~~75.67~~		$	~~(7.69~~	)
Logistics Operating Data:
Tons handled (thousands of tons)(3)	~~6,697~~	5,501			~~4,862~~	5,531			~~1,835~~	(30		)	~~18,915~~			~~15,220~~			~~3,695~~
CMT take-or-pay shortfall tons (thousands of tons)(4)	42	669			~~1,005~~	172			~~(963~~	497	)		~~147~~			~~2,505~~			~~(2,358~~		)

(1) See Note 1112 in our consolidated financial statements for both the definition of Adjusted EBITDA and the reconciliations from GAAP to the non-GAAP measurement for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2018~~2019 and ~~2017~~2018.


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


(3)	Reflects inbound tons handled during the period.

(4) Reflects tons billed under take-or-pay contracts where services have not yet been performed. ~~Our two largest coal export customers did not have any shortfall tons as of September 30, 2018.~~

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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:

	Three months ended September 30, 2018 vs. 2017								Nine months ended September 30, 2018 vs. 2017
		Three months ended March 31, 2019 vs. 2018
	~~Sales and other operating revenue~~	Sales and other operating revenue			~~Adjusted EBITDA~~	Adjusted EBITDA			~~Sales and other operating revenue~~			~~Adjusted EBITDA~~
	(Dollars in millions)
Prior year period	$	~~193.4~~$	190.0		$	~~50.0~~$	40.3		$	~~548.6~~		$	~~130.0~~
Volumes	~~(1.8~~	(2.1	)	)	~~(3.3~~	(0.3	)	)	~~2.5~~			~~(4.5~~		)
Coal cost recovery and yields(1)	~~4.4~~	17.3			~~(1.2~~	(1.7	)	)	~~28.7~~			~~3.6~~
Operating and maintenance costs(2)	~~0.3~~	0.4			~~(4.8~~	1.3	)		~~3.1~~			~~(9.0~~		)
Energy and other(3)	(3.2		)		(3.3		)		(1.8		)	(1.4		)
Energy and other		(0.8		)		(0.3		)
Current year period	$	~~193.1~~$	204.8		$	~~37.4~~$	39.3		$	~~581.1~~		$	~~118.7~~

(1) The increase in ~~revenues~~coal cost recovery and yields was driven by ~~pass-through of~~ higher coal prices. ~~Also,~~The ~~revenue~~benefit ~~and~~of ~~Adjusted~~higher ~~EBITDA~~coal ~~benefited~~prices inwas ~~the~~partly ~~current~~offset ~~year~~by ~~periods from~~ the ~~absence~~impact of ~~$0.2~~higher ~~million and $3.0 million of under-recovered~~ coal ~~costs~~moistures ~~from~~as ~~unfulfilled~~a ~~coal~~result ~~supply~~of ~~commitments~~heavy ~~during~~rainfall ~~the three and nine months ended September 30, 2017, respectively. Additionally, outage work performed at our Granite City facility~~ during the ~~three~~winter ~~months~~of ~~ended September 30~~2019, ~~2018~~which negatively impacted coal-to-coke yields and Adjusted EBITDA by $1.3 million.

(2) The ~~timing~~first ~~and~~quarter ~~scope~~ of ~~outage~~2019 ~~work~~benefited ~~negatively~~from ~~impacted Adjusted EBITDA by $5.6 million and $5.1 million in~~ the ~~three~~timing ~~and~~of ~~nine~~planned ~~months~~outage ~~ended~~work ~~September 30, 2018, respectively,~~ as compared to the same prior year ~~periods~~period.

(3) The decrease in energy was primarily driven by our extended Granite City outage and a machinery fire in the three months ended September 30, 2018.

Logistics

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

	Three months ended September 30, 2018 vs. 2017								Nine months ended September 30, 2018 vs. 2017
		Three months ended March 31, 2019 vs. 2018
	~~Sales and other operating revenue, inclusive of intersegment sales~~	Sales and other operating revenue, inclusive of intersegment sales			~~Adjusted EBITDA~~	Adjusted EBITDA			~~Sales and other operating revenue, inclusive of intersegment sales~~			~~Adjusted EBITDA~~
	(Dollars in millions)
Prior year period	$	~~22.2~~$	26.5		$	~~12.3~~$	13.4		$	~~66.5~~		$	~~34.9~~
Transloading volumes(1)	~~10.8~~	(1.7		)	~~9.0~~	(1.9		)	~~25.1~~			~~20.3~~
Price/margin impact of mix in transloading services	~~0.4~~	1.0			~~0.4~~	1.0			~~1.1~~			~~1.1~~
Operating and maintenance costs and other(2)	~~(0.7~~	1.8	)		~~(0.8~~	—	)		~~(1.1~~		)	~~(2.8~~		)
Current year period	$	~~32.7~~$	27.6		$	~~20.9~~$	12.5		$	~~91.6~~		$	~~53.5~~

(1) ~~The~~Revenues ~~increase~~decreased indue to lower export volumes ~~was~~at ~~driven~~CMT, bybut ~~significantly~~were ~~higher~~partially ~~throughput~~offset by higher volumes at ~~CMT~~our indomestic terminals, which increased revenues $1.6 million as compared to the ~~current~~same prior year ~~periods~~period.

(2) ~~Near-historic~~Operating ~~water~~and ~~levels~~maintenance ~~in early 2018 resulted in higher operating~~ costs atand ~~CMT,~~other ~~which~~reflects ~~negatively~~$0.5 ~~impacted~~million ~~Adjusted~~of ~~EBITDA~~incremental costs during the ~~three~~current ~~and~~year ~~nine~~period ~~months~~resulting ~~ended~~from ~~September~~high ~~30,~~water ~~of 2018 as compared to the same prior year periods~~levels.

Corporate and Other

During the three months ended ~~September~~March 3031, ~~2018~~2019, Corporate and Other expenses were comparable to the same prior year period.

During the nine months ended September 30, 2018, Corporate and Other expenses increased $0.8 million to $12.6 million as compared to the same prior year period due to a higher allocation of costs from SunCoke.

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Liquidity and Capital Resources

Our primary liquidity needs are to fund working capital, fund 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 credit 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 the foreseeable future. As of ~~September~~March 3031, ~~2018~~2019, we had $~~24.~~2.7 million of cash and ~~cash equivalents and~~ $~~178~~185.10 million of borrowing availability under the Partnership Revolver.

Distribution

On April 15, 2019, our Board of Directors declared a quarterly cash distribution of $0.4000 per unit. This distribution will be paid on June 3, 2019, to unitholders of record on May 15, 2019.

The Partnership anticipates it will maintain the current quarterly distribution rate of $0.4000 per unit until the closing of the Simplification Transaction. Partnership common unitholders will receive a prorated distribution per unit payable in SunCoke common shares based upon a quarterly distribution of $0.4000 per unit for the period beginning with the first day of the most recent full calendar quarter with respect to which any Partnership unitholder distribution record date has not occurred (or if there is no such full calendar quarter, then beginning with the first day of the partial calendar quarter in which the closing occurs) and ending on the day prior to the close of the Simplification Transaction.

Covenants

Credit Rating

In ~~February~~March ~~2018~~2019, S&P Global Ratings ~~("S&P Global")~~ reaffirmed SunCoke's ~~corporate~~and ~~family~~the Partnership's corporate credit rating of BB- (stable). Additionally, in ~~May~~February ~~2018~~2019, Moody’s Investors Service ~~(“Moody’s”)~~ reaffirmed SunCoke's corporate family ~~credit~~ rating of B1 (stable).

Distribution

On October 16, 2018, the Partnership's Board of Directors declared a quarterly cash distribution of $0.40 per unit. This distribution will be paid on December 3, 2018 to unitholders of record on November 15, 2018. In the first quarter of 2018, the Partnership announced a reduction in its distribution. Management and the Partnership's Board of Directors believe reallocating capital towards paying down debt and building additional liquidity will maximize long-term value for all unitholders, as a stronger balance sheet and increased financial flexibility better positions the Partnership for long-term success. This distribution policy will allow the Partnership to pay down debt towards its stated leverage target of 3.50:1.00 or lower by the end of 2019, and it will provide the desired cushion when our maximum leverage covenant steps down from the current 4.50:1:00 to 4.00:1.00 in June of 2020.

Cash Flow Summary

The following table sets forth a summary of the net cash provided by (used in) operating, investing and financing activities for the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019 and ~~2017~~2018:

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2018			2017
	2019			2018
	(Dollars in millions)
Net cash provided by operating activities	$	~~148~~25.07		$	~~112~~66.71
Net cash used in investing activities	(4413.4		)	(2310.36		)
Net cash used in financing activities	(8622.02		)	(~~104~~20.46		)
Net increase (decrease) in cash and cash equivalents and restricted cash	$	17.6		$	(15.0	)
Net (decrease) increase in cash and cash equivalents	$	(9.9	)	$	34.9

Cash Provided by Operating Activities

Net cash provided by operating activities ~~increased~~decreased by $3540.34 million to $~~148~~25.07 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019 as compared to the same period in the prior year. The ~~increase~~decrease was ~~driven~~due byto aan ~~favorable~~unfavorable year-over-year change ~~of approximately $36 million~~ in primary working capital, which is comprised of accounts receivable, inventories and accounts payable, primarily asdriven aby ~~result~~rebuilding ~~of the timing of~~ coal ~~purchases~~inventory ~~and~~levels ~~the~~at ~~settlement~~higher ofcoal ~~balances~~prices ~~with~~as ~~SunCoke. Additionally,~~compared to the ~~current~~prior year period ~~benefited from $6~~.0 ~~million of lower interest payments as a result of the Partnership's debt restructuring in the second quarter of 2017, which impacted the timing of when interest payments are made.~~

Cash Used in Investing Activities

Net cash used in investing activities increased $212.18 million to $4413.4 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019 as compared to the corresponding prior year period. The incurrent ~~2017~~year ~~due~~period toincluded higher ongoing capital spending as compared to the same prior year period, primarily related to the ~~environmental~~timing ~~remediation~~of ~~project~~capital atexpenditures ~~our~~and ~~Granite~~certain ~~City~~upgrades ~~facility~~in order to improve the long-term reliability and operational performance of our assets.

Cash Used in Financing Activities

Net cash used in financing activities ~~decreased~~increased $181.46 million to $8622.02 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019 as compared to the same period in the prior year. InDuring ~~accordance~~the ~~with~~first quarter of 2019, the ~~objectives~~Partnership ofrepaid $5.0 million on its revolving credit facility. Pursuant to the ~~new~~omnibus ~~distribution~~agreement, ~~policy~~SunCoke, through the general partner, made a capital

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~~Partnership~~contribution ~~paid~~of $114.70 million ~~lower distributions~~ to ~~its~~the ~~unitholders~~Partnership ~~and~~during ~~SunCoke~~the asfirst ~~compared~~quarter to2019 ~~the~~for ~~same~~certain ~~prior~~known ~~year~~environmental ~~period~~remediation ~~and~~projects, ~~also~~which ~~repaid~~was $256.0 million onless ~~its~~than ~~revolving credit facility during~~ the ~~third quarter of 2018. Pursuant to the omnibus agreement, SunCoke, through the general partner, made a~~ capital contribution ofmade ~~$10 million~~ to us during the first quarter ~~2018~~of ~~for certain known environmental remediation projects~~2018. ~~Additionally,~~The inimpact ~~August 2017, the Partnership utilized $100.0 million~~ of ~~its~~these ~~borrowings~~activities ~~under~~was ~~the~~partially ~~Partnership~~offset ~~Revolver~~by ~~and~~ a $1210.6 million of ~~cash~~decrease toin ~~repay~~distributions ~~the~~paid ~~remaining~~to ~~outstanding balance of $112.6 million on~~ the Partnership's ~~Promissory~~unitholders ~~Note. The~~and ~~May~~SunCoke ~~2017~~as ~~debt~~compared ~~restructuring~~to ~~resulted~~the infirst ~~$2.5~~quarter ~~million~~ of ~~net proceeds from financing cash flows~~2018.

Capital Requirements and Expenditures

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

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

•

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


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


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

The following table summarizes ongoing, the environmental remediation projects and expansion capital expenditures for the three months ended March 31, 2019 and 2018:

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2018		2017
	2019		2018
	(Dollars in millions)
Ongoing capital	$	218.29	$	113.93
Environmental remediation projects(1)	~~22.~~4.5		117.03
Expansion capital	0.8		0.4
Total	$	13.4	$	10.6
Total	$	44.4	$	23.3

(1) Includes $21.2 million and $0.75 million of capitalized interest, in connection with the environmental remediation projects, during the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019 and ~~2017~~2018, respectively.

In ~~2018~~2019, we expect our capital expenditures to be ~~approximately~~between $55 million and $6160 million,. ~~which is comprised of the following:~~

• SunCoke ~~Total~~and ~~ongoing~~the ~~capital~~Partnership ~~expenditures~~anticipate ofspending approximately $30150 million to comply with these environmental remediation projects. Prior to our formation, ~~which~~SunCoke spent approximately $7 million related to these projects. The Partnership has ~~increased~~spent approximately $5134 million to date and expects to spend the remaining capital through the first half of 2019. Pursuant to the omnibus agreement, we retained an aggregate of $119 million in proceeds from our ~~previous~~IPO ~~guidance~~and ~~due~~subsequent dropdowns to comply with the ~~expanded~~expected ~~scope~~terms of a consent decree. Subsequently, SunCoke has made capital contributions to the ~~Granite~~Partnership ~~City~~of $24 ~~outage;~~million and will make additional capital contributions for any amounts spent beyond what was previously funded.

•Off-Balance ~~Total~~Sheet capital expenditures on the environmental remediation projects are now expected to be approximately $30 million in 2018 and reflect a shift of $5 million of estimated capital expenditures from 2018 to 2019, with no impact on our total estimated spend on the project; andArrangements

•We ~~Total~~have ~~expansion~~letters ~~capital~~of credit, short term operating leases and outstanding surety bonds to secure reclamation and other performance commitments. There have been no significant changes to these arrangements during the three months ended March 31, 2019. Please refer to our Annual Report on Form 10-K filed on February 15, 2019 for further disclosure of ~~approximately~~these $1arrangements. ~~million~~Other than these arrangements, the Partnership has not entered into any transactions, agreements or other contractual arrangements that would result in ~~our~~material ~~Logistics~~off-balance ~~segment~~sheet liabilities.

We retained $119 million in proceeds from the Partnership's IPO and subsequent dropdowns to fund the environmental remediation projects at the Haverhill and Granite City cokemaking facilities. Pursuant to the omnibus agreement, any amounts that we spend on these projects in excess of the $119 million will be reimbursed by SunCoke. Prior to our formation, SunCoke spent approximately $7 million related to these projects. We have spent approximately $125 million to date and the remaining capital is expected to be spent through the first half of 2019. Pursuant to the omnibus agreement, SunCoke, through the general partner, made a capital contribution of $10 million to us during the first quarter of 2018 for these known environmental

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remediation projects. SunCoke expects to make additional capital contributions to us of approximately $10 million in the fourth quarter of 2018 and approximately $5 million in the first half of 2019 for the estimated future spending related to these environmental remediation projects.

Off-Balance Sheet Arrangements

We have letters of credit, operating leases and outstanding surety bonds to secure reclamation and other performance commitments. There have been no significant changes to these arrangements during the nine months ended September 30, 2018. Please refer to our Annual Report on Form 10-K filed on February 15, 2018 for further disclosure of these arrangements. Other than these arrangements, the Partnership has not entered into any transactions, agreements or other contractual arrangements that would result in material off-balance sheet liabilities.

Critical Accounting Policies

There have been no significant changes to our accounting policies during the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019. Please refer to our Annual Report on Form 10-K filed on February 15, ~~2018~~2019 for a summary of these policies.

Recent Accounting Standards

See Note 1 to our consolidated financial statements.

Non-GAAP Financial Measures

In addition to the GAAP results provided in the Annual Report on Form 10-K, we have provided a non-GAAP financial measure, Adjusted EBITDA. Our management, as well as certain investors, uses this non-GAAP measure to analyze our current and expected future financial performance and liquidity. This measure is not in accordance with, or a substitute for, GAAP and may be different from, or inconsistent with, non-GAAP financial measures used by other companies. See Note 12 in our consolidated financial statements for both the definition of Adjusted EBITDA and the reconciliations from GAAP to the non-GAAP measurement for the three months ended March 31, 2019 and 2018, respectively.

Below is a reconciliation of revised 2019 Adjusted EBITDA guidance from its closest GAAP measures:



	2019
	Low		High
	(Dollars in millions)
Net Income	$	46	$	61
Add:
Depreciation and amortization expense	110		105
Interest expense	60		60
Income tax expense	2		3
Adjusted EBITDA	$	218	$	229
Subtract:
Adjusted EBITDA attributable to noncontrolling interest⁽¹⁾	3		4
Adjusted EBITDA attributable to SunCoke Energy Partners, L.P.	$	215	$	225


	2019
	Low		High
	(Dollars in millions)
Net cash provided by operating activities	$	145	$	160
Add:
Cash interest paid, net of capitalized interest	60		60
Cash income tax paid	2		3
Changes in working capital and other⁽²⁾	11		6
Adjusted EBITDA	$	218	$	229
Subtract:
Adjusted EBITDA attributable to noncontrolling interest⁽¹⁾	3		4
Adjusted EBITDA attributable to SunCoke Energy Partners, L.P.	$	215	$	225


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


(2)	Changes in working capital exclude those items not impacting Adjusted EBITDA, such as changes in interest payable.

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Non-GAAP Financial Measures

In addition to the GAAP results provided in the Annual Report on Form 10-K, we have provided a non-GAAP financial measure, Adjusted EBITDA. Our management, as well as certain investors, uses this non-GAAP measure to analyze our current and expected future financial performance and liquidity. This measure is not in accordance with, or a substitute for, GAAP and may be different from, or inconsistent with, non-GAAP financial measures used by other companies. See Note 11 in our consolidated financial statements for both the definition of Adjusted EBITDA and the reconciliations from GAAP to the non-GAAP measurement for the three and nine months ended September 30, 2018 and 2017, respectively.

	2018
	Low		High
	(Dollars in millions)
Net Income	$	54	$	64
Add:
Depreciation and amortization expense(1)	97		92
Interest expense	60		60
Income tax expense	2		3
Adjusted EBITDA	$	213	$	219
Subtract:
Adjusted EBITDA attributable to noncontrolling interest(2)	3		4
Adjusted EBITDA attributable to SunCoke Energy Partners, L.P.	$	210	$	215
	2018
	Low		High
	(Dollars in millions)
Net cash provided by operating activities	$	140	$	150
Add:
Cash interest paid	60		60
Cash income tax paid	2		3
Changes in working capital and other(3)	11		6
Adjusted EBITDA	$	213	$	219
Subtract:
Adjusted EBITDA attributable to noncontrolling interest(2)	3		4
Adjusted EBITDA attributable to SunCoke Energy Partners, L.P.	$	210	$	215

(1) Reflects revisions in estimated useful lives of certain assets in our Domestic Coke segment made in the third quarter.

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

(3) Changes in working capital exclude those items not impacting Adjusted EBITDA, such as changes in interest payable and income taxes payable.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

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

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

The risk factors discussed in “Risk Factors” could cause our results to differ materially from those expressed in the forward-looking statements made in this Quarterly Report on Form 10-Q. There also may be other risks that we are unable to predict at this time. Such risks and uncertainties include, without limitation:

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


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


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


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


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

• our dependence on, relationships with, and other conditions affecting, our customers ~~and/or suppliers~~;


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


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

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


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

• our ability to ~~enter~~repair ~~into~~aging ~~new, or renew existing, long-term agreements upon favorable terms for the sale of~~ coke, ~~steam,~~ovens orto ~~electric~~maintain ~~power,~~operational ~~or for coal and other aggregates handling services (including transportation, storage and mixing)~~performance;


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


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


•	our ability to realize expected benefits from investments and acquisitions;

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


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


•	our ability to successfully implement our growth strategy;

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


•	changes in the expected operating levels of our assets;


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


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


•	our ability to service our outstanding indebtedness;


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


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


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


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


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

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


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


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


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

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


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


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


•	changes in credit terms required by our suppliers;

• risks related to labor relations and workplace safety ~~affecting our commercial operations and those of our customers and suppliers~~;

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


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

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

• ~~claims~~risks ofrelated ~~noncompliance~~to ~~with~~environmental ~~any statutory and regulatory requirements~~compliance;


•	claims of noncompliance with any statutory or regulatory requirements;


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

• proposed or final changes in accounting and/or tax methodologies, laws, regulations, rules, or policies, or their interpretations, including those affecting inventories, leases, ~~post-employment benefit~~ income, ~~and/~~or other ~~items~~matters;

• historical consolidated financial data may not be reliable indicators of future results;

• public company costs;


•	our indebtedness and certain covenants in our debt documents;

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• our ability to secure new coal supply agreements or to renew existing coal supply agreements;


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

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


•	inadequate protection of our intellectual property rights; and


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

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



Item 3.	Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the Partnership's exposure to market risk disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018.



Item 4.	Controls and Procedures

Management’s Evaluation of Disclosure Controls and Procedures

The Partnership maintains disclosure controls and procedures, (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934), as amended (the “Exchange Act”) that are designed to ensure that information required to be disclosed in its reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to the Partnership’s management, including its Chief Executive Officer and Chief Financial Officer as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

The Partnership carried out an evaluation, under the supervision and with the participation of management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Partnership’s disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, the Partnership’s Chief Executive Officer and Chief Financial Officer concluded that the Partnership's disclosure controls and procedures were effective as of the end of the period covered by this report.

Changes in Internal Control over Financial Reporting

~~During~~There the first quarter of 2018, we implemented a new enterprise resource planning ("ERP") system. Accordingly, we modified the design and documentation of certain internal control processes and procedures relating to the new ERP system at that time. Other than the ERP and related systems implementation, there have been no changes in the Partnership's internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMAITON



Item 1.	Legal Proceedings

The information presented in Note 8 to our consolidated financial statements within this Quarterly Report on Form 10-Q is incorporated herein by reference.

Many legal and administrative proceedings are pending or may be brought against us arising out of our current and past operations, including matters related to commercial and tax disputes, product liability, employment claims, personal injury claims, premises-liability claims, allegations of exposures to toxic substances and general environmental claims. Although the ultimate outcome of these proceedings cannot be ascertained at this time, it is reasonably possible that some of them could be resolved unfavorably to us. Our management believes that any liabilities that may arise from such matters would not be material in relation to our business or our consolidated financial position, results of operations or cash flows at ~~September~~March 3031, ~~2018~~2019.



Item 1A.	Risk Factors

There have been no material changes with respect to the risk factors disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2017~~2018.



Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds

Market Repurchases

There has been no activity with respect to the program to repurchase outstanding units during the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019. Please refer to our Annual Report on Form 10-K filed on February 15, ~~2018~~2019 for further information on the program.

Item 4. Mine Safety Disclosures

Certain logistics assets are subject to Mine Safety and Health Administration regulatory purview. The information concerning mine safety violations and other regulatory matters that we are required to report in accordance with Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 CFR 229.014) is included in Exhibit 95.1 to this Quarterly Report on Form 10-Q.

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Item 6.	Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this Form 10-Q.

ExhibitNumber				Description
2.3				Agreement and Plan of Merger dated as of February 4, 2019, by and among SunCoke Energy, Inc., SC Energy Acquisition LLC, SunCoke Energy Partners, L.P., and SunCoke Energy Partners GP LLC. (incorporated by reference to Exhibit 2.1 of the current Report on form 8-K, (file No. 001-35782) filed February 5, 2019.)
10.11				Support Agreement, dated as of February 4, 2019, by and between SunCoke Energy Partners, L.P., and Sun Coal & Coke LLC.(incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-35782) filed on February 5, 2019.
31.1*				Chief Executive Officer Certification Pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*				Chief Financial Officer Certification Pursuant to Exchange Act Rule 13a-14(a) or Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*				Chief Executive Officer Certification Pursuant to Exchange Act Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*				Chief Financial Officer Certification Pursuant to Exchange Act Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
95.1*				Mine Safety Disclosures
101*				The following financial statements from the SunCoke Energy Partners L.P.'s Quarterly Report on Form 10-Q for the ~~nine~~three months ended ~~September~~March 3031, ~~2018~~2019, filed with the Securities and Exchange Commission on ~~October~~April 2524, ~~2018~~2019, formatted in XBRL (eXtensible Business Reporting Language is attached to this report): (i) the Consolidated Statements of ~~Operations~~Income; (ii) the Consolidated Balance Sheets; (iii) the Consolidated Statements of Cash Flows; (iv) the Consolidated Statement of Equity; and, (v) the Notes to Consolidated Financial Statements.



*	Filed herewith.

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SIGNATURE

Pursuant to the requirements of Section 13 or 15(a) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Lisle, State of Illinois, on ~~October~~April 2524, ~~2018~~2019.



SunCoke Energy Partners, L.P.

By:		SunCoke Energy Partners GP LLC, its general partner

By:		/s/ Fay West
		Fay West
		Senior Vice President and Chief Financial Officer (As Principal Financial Officer and Duly Authorized Officer of SunCoke Energy Partners GP LLC)

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Filing Compare · SunCoke Energy Partners, L.P.