SunCoke Energy, Inc.SXC
SunCoke Energy, Inc. Revenue Disclosure
19. Revenue from Contracts with Customers
Cokemaking
Our blast furnace coke sales are largely made pursuant to long-term, take-or-pay agreements. These agreements require us to produce and deliver the contracted volumes of coke and require our customers to purchase such volumes of coke up to a specified tonnage or pay the contract price for any tonnage they elect not to take. As of December 31, 2025, our coke sales agreements have approximately 18.5 million tons of unsatisfied or partially unsatisfied performance obligations which are expected to be delivered over a weighted average remaining contract term of approximately eight years.
Sales prices for coke sold under our long-term, take-or-pay agreements include an operating cost component, a coal cost component and a return of capital component. Operating costs under four of our coke sales agreements were fixed subject to an annual adjustment based on an inflation index. Under our other coke sales agreements, operating costs were passed through to the respective customers subject to an annually negotiated budget, in some cases subject to a cap annually adjusted for inflation, and we share any difference in costs from the budgeted amounts with our customers. Some of 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.
We also sell non-contracted blast furnace coke tons into the North American spot coke and export coke markets, utilizing capacity in excess of that reserved for our long-term, take-or-pay agreements. These non-contracted blast coke sales are generally sold on a spot basis at the current market price, and do not contain the same provisions as our long-term, take-or-pay agreements discussed above.
While the revenues in our Domestic Coke segment are primarily tied to blast furnace coke sales made under long-term, take-or-pay agreements, we also produce and sell foundry coke out of our Jewell cokemaking facility. Foundry coke sales are generally made under annual agreements with our customers for an agreed upon price and do not contain take-or-pay volume commitments.
Industrial Services
A portion of our industrial services business consists of providing on-site scrap and slag handling and processing services for steel manufacturing customers. The transaction price for these contracts include fixed fees as well as other volume based variable charges which are correlated to customer production. Given the long-term nature of these arrangements, most contracts permit periodic adjustment based on changes in macroeconomic indicators. These service agreements consist primarily of one performance obligation, providing handling and processing services. Service revenues are recognized over time as the customer simultaneously receives the benefits provided by the Company's performance. The Company applies the “as invoiced” practical expedient as the amount of consideration the Company has the right to invoice corresponds directly with the value of the Company's performance to date.
Additionally, handling and/or mixing services are provided to steel, coke (including some of our 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 ownership 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 generally consist primarily of two performance obligations, unloading and loading of materials. Revenues 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.
The following table provides estimated fixed fee and take-or-pay revenue from all of our multi-year industrial services contracts is expected to be recognized over the next eleven years for unsatisfied or partially unsatisfied performance obligations as of December 31, 2025.
| (Dollars in millions) | |||||
| 2026-2028 | $ | 350.4 | |||
| 2029-2031 | 152.4 | ||||
| 2032-thereafter | 84.3 | ||||
| Total estimated fixed fee and take-or-pay revenue | $ | 587.1 | |||
Energy
Our cokemaking ovens utilize efficient, modern heat recovery technology designed to combust the coal’s volatile components liberated during the cokemaking process and use the resulting heat to create steam or electricity for sale. Our Middletown facility and the second phase of our Haverhill facility, or Haverhill II, have cogeneration plants that generate electricity which is either sold into the regional power market or to customers pursuant to energy sales agreements. Our Granite City facility and the first phase of our Haverhill facility, or Haverhill I, have steam generation facilities which produce steam for sale to customers pursuant to steam supply and purchase agreements. The energy provided under these arrangements results in transfer of control over time. Revenues are recognized over time as energy is delivered to our
customers, in an amount based on the terms of each arrangement. Energy generated at our remaining facilities is either used internally or provided, at minimal cost, to energy suppliers.
Operating and Licensing Fees
Operating and licensing fees are made pursuant to long-term contracts with ArcelorMittal Brazil, where we operate a Brazilian cokemaking facility. The licensing fees are based upon the level of production required by our customer. Operating fees include the full pass-through of the operating costs of the Brazilian facility as well as a per ton fee based on the level of production required by our customer. Revenues are recognized over time as our customers receive and consume the benefits in an amount that corresponds directly with the value provided to the customer to date.
Disaggregated Sales and Other Operating Revenue
The following table provides disaggregated sales and other operating revenue by product or service, excluding intersegment revenues:
| Years Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
| Sales and other operating revenue: | ||||||||||||||||||||
| Cokemaking | $ | 1,559.6 | $ | 1,766.5 | $ | 1,898.5 | ||||||||||||||
| Energy | 49.6 | 47.9 | 47.3 | |||||||||||||||||
Industrial Services(1) | 185.7 | 81.3 | 73.1 | |||||||||||||||||
| Operating and licensing fees | 35.7 | 35.1 | 35.2 | |||||||||||||||||
| Other | 6.7 | 4.6 | 9.1 | |||||||||||||||||
| Sales and other operating revenue | $ | 1,837.3 | $ | 1,935.4 | $ | 2,063.2 | ||||||||||||||
(1)The increase in 2025 reflects the inclusion of five months of Phoenix Global results.
See Note 4 Customer Concentrations for further detail on operating revenue.
The following tables provide disaggregated sales and other operating revenue by domestic and international:
| Years Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||
| Sales and other operating revenue: | ||||||||||||||||||||
| Domestic | $ | 1,769.4 | $ | 1,900.3 | $ | 2,028.0 | ||||||||||||||
| International | 67.9 | 35.1 | 35.2 | |||||||||||||||||
| Sales and other operating revenue | $ | 1,837.3 | $ | 1,935.4 | $ | 2,063.2 | ||||||||||||||
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.