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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 11-K

 

 

 

x	ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2013

 

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

For the transition period from                      to                     

Commission file number 001-35243

 

 

 

Full	title of the plan and the address of the plan, if different from that of the issuer named below:

SunCoke 401(k) Plan

 

A.	Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

SunCoke Energy, Inc

1011 Warrenville Road

Suite 600

Lisle, Illinois 60532

 

 

 

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SUNCOKE 401(k) PLAN

INDEX OF FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE

December 31, 2013 and 2012

 

		Page(s)
Report of Independent Registered Public Accounting Firm			1
AUDITED FINANCIAL STATEMENTS:
Statements of Net Assets Available for Plan Benefits at December 31, 2013 and 2012			2
Statement of Changes in Net Assets Available for Plan Benefits for the year ended December 31, 2013			3
NOTES TO FINANCIAL STATEMENTS			4-10
SUPPLEMENTAL SCHEDULE:
Schedule H, Line 4(i)—Schedule of Assets (Held at End of Year) December 31, 2013			11
SIGNATURES			12
EXHIBIT INDEX:			13
Consent of Independent Registered Public Accounting Firm			14

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Employee Benefits and Investment Committee of

SunCoke Energy, Inc.:

We have audited the accompanying statements of net assets available for plan benefits of the SunCoke 401(k) Plan (the “Plan”) as of December 31, 2013 and 2012 and the related statement of changes in net assets available for plan benefits for the year ended December 31, 2013. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan as of December 31, 2013 and 2012 and the changes in net assets available for plan benefits for the year ended December 31, 2013 in conformity with accounting principles generally accepted in the United States of America.

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedule is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/s/ Caron & Bletzer, PLLC

Kingston, NH

June 26, 2014

 

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SUNCOKE 401(k) PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS

December 31, 2013 and 2012

 

		2013				2012
Investments, at fair value:
Mutual funds		$	74,564,823			$	57,231,521
Common collective trust			24,407,527				26,906,599
SunCoke Energy, Inc. common stock			454,293				198,086
Total investments			99,426,643				84,336,206
Receivables:
Notes receivable from participants			1,398,565				947,624
Participant contributions receivable			231				1,733
Employer contributions receivable			141,116				2,822
Total receivables			1,539,912				952,179
Net assets available for plan benefits at fair value			100,966,555				85,288,385
Adjustment from fair value to contract value for interest in fully benefit-responsive investment contracts			(43,019	)			(201,645	)
Net assets available for plan benefits		$	100,923,536			$	85,086,740

The accompanying notes are an integral

part of the financial statements.

 

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SUNCOKE 401(k) PLAN

STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS

For the year ended December 31, 2013

 

		December 31, 2013
Additions:
Participant contributions		$	3,703,219
Rollover contributions			2,490,654
Employer contributions			3,746,174
Net appreciation in fair value of investments			11,342,061
Dividend and interest income			2,195,551
Total additions			23,477,659
Deductions:
Distributions paid to participants			7,516,397
Administrative fees			51,155
Total deductions			7,567,552
Net increase			15,910,107
Transfers:
Transfers from Savings Plan for Subsidiaries of SunCoke Energy, Inc.			478,006
Transfers to Savings Plan for Subsidiaries of SunCoke Energy, Inc.			(551,317	)
Net Transfers			(73,311	)
Net assets available for plan benefits, beginning of year			85,086,740
Net assets available for plan benefits, end of year		$	100,923,536

The accompanying notes are an integral

part of the financial statements.

 

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SUNCOKE 401(k) PLAN

NOTES TO FINANCIAL STATEMENTS

 

A.	PLAN DESCRIPTION:

The following description of the SunCoke 401(k) Plan (the “Plan”) provides only general information. Participants should refer to the plan document for more detailed information.

General

The Plan is a defined contribution plan sponsored by SunCoke Energy, Inc. (the “Company”) covering substantially all employees of the Company and its participating subsidiaries except employees of Dominion Coal Company and collectively bargained employees of Gateway Energy and Coke Company, LLC and Haverhill North Coke Company. Participants are immediately eligible to participate; however, they must complete six months of consecutive service to be eligible for employer contributions. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”). The Vanguard Fiduciary Trust Company is the Trustee for all Plan investments.

Contributions

Contributions to the Plan are made by both participating employees and the Company. Participants may contribute 1% to 50% of their eligible compensation, as defined by the Plan, on a pre-tax basis and/or an after-tax Roth contribution basis, subject to Internal Revenue Code (“IRC”) limitations. Participants who are at least age 50 may make additional “catch-up” contributions subject to IRC limitations. Participants may also contribute funds from another qualified retirement plan (“rollover contributions”), subject to certain requirements.

All eligible participants receive employer safe harbor contributions in an amount equal to 3% of a participant’s eligible compensation. The Company makes matching contributions equal to 100% of the first 5% of eligible compensation participants contribute to the Plan as a salary deferral. In addition, the Company, at its sole discretion, may also make a profit sharing contribution to the plan. During 2013, the Company did not make a profit sharing contribution.

Participant Accounts

Participant accounts are credited with the participants’ contributions, the Company’s contributions, and a proportional allocation of the Plan’s earnings, including realized and unrealized gains and losses, and expenses. The Plan complies with Section 404(c) of ERISA and offers diversified investment funds in which participants may invest their contributions, Company contributions, and earnings. Participants determine the percentage in which contributions are to be invested in each fund. Participants may change their investment options daily.

 

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SUNCOKE 401 (K) PLAN

NOTES TO FINANCIAL STATEMENTS

 

Vesting

Participants are always fully vested in the portion of their account which represents their contributions, employer safe harbor contributions, and the income earned thereon. Participants become fully vested immediately upon normal retirement age, death or total and permanent disability while still an active participant in the Plan.

Effective January 1, 2012, participants become vested in Company matching contributions and earnings thereon as follows:

 

Completed Years of Service		Percent Vested
Less than three years			0	%
Three or more years			100	%

Effective January 1, 2011, newly hired participants become vested in profit sharing contributions and earnings thereon as follows:

 

Completed Years of Service		Percent Vested
Less than three years			0	%
Three or more years			100	%

For participants hired prior to January 1, 2011, profit sharing contributions become 20% vested after two years of service and fully vested after three years of service.

Forfeitures

When participants terminate employment and are not fully vested in their accounts, the nonvested portion of their accounts represents forfeitures, as defined by the Plan. If a forfeiting participant is re-employed and fulfills certain requirements, as set forth in the Plan, the participant’s account will be restored. Forfeitures are used to pay administrative expenses or to reduce future employer contributions. During 2013, $154,342 of forfeitures were applied to reduce employer contributions. Total unapplied forfeitures were $9,359 and $77,654 at December 31, 2013 and 2012, respectively.

Distribution of Benefits

Participants are eligible to receive a distribution of the vested portion of their accounts upon termination of employment by reason of retirement, disability, death or other separation from service. Participants who terminate employment and have a vested account balance of less than $1,000 will receive a lump sum distribution of 100% of their vested benefits. Distributions to participants with vested account balances greater than $1,000, but not in excess of $5,000, who terminate employment will be paid to an individual retirement account designated by the plan administrator. Participants who have a vested account balance in excess of $5,000 may leave their funds invested in the Plan or may elect a lump sum distribution, installment payments, or a partial payment. In all circumstances participants may elect to roll over their vested account balances to an individual retirement account or qualified plan that accepts rollovers.

A participant may also request an in-service withdrawal upon attainment of age 59 ¹/₂, or upon demonstration by the participant to the plan administrator that the participant is suffering from “hardship” as defined by the Plan.

 

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SUNCOKE 401 (K) PLAN

NOTES TO FINANCIAL STATEMENTS

 

Notes Receivable from Participants (Plan Loans)

Participants may request a loan from the Plan up to the lesser of 50% of the participant’s vested account balance or $50,000, reduced by the highest outstanding loan balance during the previous 12 months. Loans must bear a reasonable rate of interest. Loans are collateralized by the participant’s vested interest in the Plan, and are supported by a promissory note. All loans must be repaid within 5 years. Participants may only have three loans outstanding at any given time.

Participant loans are valued at the unpaid principal balance plus any accrued but unpaid interest and categorized as notes receivable from participants on the statements of net assets available for plan benefits. Delinquent participant loans are reclassified as distributions based upon the terms of the plan document.

 

B.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Accounting

The financial statements are prepared on the accrual basis of accounting.

Investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for plan benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. The statements of net assets available for plan benefits present the fair value of the investment contracts as well as the adjustment of the fully benefit-responsive investment contracts from fair value to contract value. The statement of changes in net assets available for plan benefits is prepared on a contract value basis.

Investment Valuation and Income Recognition

Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. See Note D for discussion of fair value measurements.

Purchases and sales of investments are reflected on a trade-date basis. Dividend income is reported on the ex-dividend date while interest income is recorded as earned on an accrual basis.

 

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SUNCOKE 401 (K) PLAN

NOTES TO FINANCIAL STATEMENTS

 

Payment of Benefits

Benefits are recorded when paid.

Plan Expenses

Certain participant initiated fees are paid by plan participants. All other expenses incurred in the administration of the Plan are paid by the Company.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results may differ from those estimates.

Risks and Uncertainties

The Plan provides for various investment options in any combination of stocks, bonds, fixed income securities, mutual funds, and other investment securities. Investment securities are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the value of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statements of net assets available for plan benefits.

 

C.	INVESTMENTS:

The following represents the Plan’s investments as of December 31, 2013 and December 31, 2012 that represented 5% or more of the net assets available for plan benefits:

 

		2013				2012
Dodge & Cox Stock Fund		$	5,530,708			$	4,497,833
Vanguard Institutional Index Fund			18,373,289				14,124,376
Vanguard Total Bond Market Index Fund Signal Shares			5,863,200				6,916,773
Vanguard Wellington Fund Admiral Shares			7,255,297				6,043,606
BNP Paribas Pooled Trust Fund			24,407,527				26,906,599

 

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SUNCOKE 401 (K) PLAN

NOTES TO FINANCIAL STATEMENTS

 

During the year ended December 31, 2013, the investments held by the Plan (including investments bought, sold and held during the year) appreciated in value as follows:

 

		2013
Mutual funds		$	11,222,412
SunCoke Energy, Inc. common stock			119,649
Total net appreciation in fair value		$	11,342,061

 

D.	FAIR VALUE MEASUREMENTS:

Accounting standards establish a framework for measuring fair value. That framework sets forth a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below.

Level 1—Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access.

Level 2—Inputs to the valuation methodology are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in inactive markets; or other inputs that are observable or can be corroborated by observable market data for substantially the full terms of the assets or liabilities.

Level 3—Inputs to the valuation methodology are unobservable and supported by little or no market activity and are significant to the fair value of the assets or liabilities.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Following is a description of the valuation methodologies used by the Plan. There have been no changes in the methodologies used at December 31, 2013 and 2012.

Mutual funds – Valued at the net asset value of the shares held by the Plan at year end as determined by quoted market prices.

Common collective trust – Valued at the net asset value of underlying investments of participant units held by the Plan as of the last trading day of the period, as reported by the managers of the trust.

Company stock – Valued at the closing price reported on the active market on which the individual securities are traded.

The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

 

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SUNCOKE 401 (K) PLAN

NOTES TO FINANCIAL STATEMENTS

 

The following tables set forth by level and by investment class, within the fair value hierarchy, the Plan’s assets at fair value as of December 31, 2013:

 

		December 31, 2013
Description		Total				Level 1				Level 2				Level 3
Mutual funds:
U.S. equities		$	46,434,816			$	46,434,816			$	—			$	—
International equities			4,726,982				4,726,982				—				—
Balanced funds			16,839,004				16,839,004				—				—
Fixed income fund			6,564,021				6,564,021				—				—
Total mutual funds			74,564,823				74,564,823				—				—
Common collective trust			24,407,527				—				24,407,527				—
Company stock			454,293				454,293				—				—
Total		$	99,426,643			$	75,019,116			$	24,407,527			$	—

The common collective trust held by the Plan is a stable value investment which has an objective to preserve capital and to provide a competitive level of income over time that is consistent with the preservation of capital. To achieve this objective the fund invests in fixed-income securities, bond funds and money market funds. Twelve months notice is required for a complete liquidation, however the trustee, at their discretion, may waive the twelve month waiting period. Participant directed redemptions are allowed daily with no restrictions. There are no unfunded commitments.

The following tables set forth by level and by investment class, within the fair value hierarchy, the Plan’s assets at fair value as of December 31, 2012:

 

		December 31, 2012
Description		Total				Level 1				Level 2				Level 3
Mutual funds:
U.S. equities		$	35,567,157			$	35,567,157			$	—			$	—
International equities			2,158,888				2,158,888				—				—
Balanced funds			11,888,070				11,888,070				—				—
Fixed income fund			7,617,406				7,617,406				—				—
Total mutual funds			57,231,521				57,231,521				—				—
Common collective trust			26,906,599				—				26,906,599				—
Company stock			198,086				198,086				—				—
Total		$	84,336,206			$	57,429,607			$	26,906,599			$	—

 

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SUNCOKE 401 (K) PLAN

NOTES TO FINANCIAL STATEMENTS

 

E.	TAX STATUS:

The Plan has adopted the non-standardized prototype plan document of Vanguard Fiduciary Trust Company. The prototype sponsor received a favorable opinion letter dated March 31, 2008 in which the Internal Revenue Service stated that the prototype plan, as then designed, was in compliance with the applicable requirements of the IRC. The plan administrator believes that the Plan is designed and being operated in compliance with the applicable requirements of the IRC, and that the related trust is therefore tax-exempt. Accordingly, no provision for income taxes has been included in the financial statements.

Accounting standards require recording uncertain income tax positions that exist in the Plan’s financial statements. Plan management has determined there are no uncertain tax positions and believes there is no adjustment or disclosure required in the Plan’s financial statements. The Plan did not recognize any interest and penalty expense for the year ended December 31, 2013. The Form 5500 remains subject to examination by the IRS for the years ended December 31, 2010 through December 31, 2013.

 

F.	PARTIES-IN-INTEREST:

Section 3(14) of ERISA defines a party-in-interest to include, among others, fiduciaries or employees of the Plan, any person who provides services to the Plan or an employer whose employees are covered by the Plan. Accordingly, loans to participants and transactions with investment funds managed and held by the trustee are considered party-in-interest transactions.

 

G.	PLAN TERMINATION:

Although the Plan was established with the intention that it will continue indefinitely, the Company retains the right to discontinue its contributions at any time or to terminate the Plan, subject to the provisions of ERISA. In the event of plan termination, all participants will become 100% vested in their accounts.

 

H.	SUBSEQUENT EVENTS:

The Company has evaluated subsequent events through the date these financial statements were issued.

 

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SUNCOKE 401(k) PLAN

EIN: 90-0640593

Plan Number: 001

SCHEDULE H, LINE 4(i)-SCHEDULE OF ASSETS (HELD AT END OF YEAR)

December 31, 2013

 

(a)

(b)

(c)

(d)

(e)

Identity of issue, borrower, lessor or similar party

Description of investment including maturity date, rate of interest, collateral, par or maturity value

Cost

Current value

Artio Global High Income Fund; Class I

Mutual fund

**

$

733,131

Delaware Small Cap Value Fund; Institutional Class

Mutual fund

**

242,426

Dodge & Cox International Stock Fund

Mutual fund

**

1,722,990

Dodge & Cox Stock Fund

Mutual fund

**

5,530,708

Invesco International Growth Fund; Class Institutional

Mutual fund

**

255,383

Oppenheimer Developing Markets Fund Y Shares

Mutual fund

**

672,684

PIMCO Total Return Fund; Institutional Class

Mutual fund

**

1,120,544

Pimco Real Return-Institutional Class

Mutual fund

**

184,683

T. Rowe Price Small Cap Stock Fund, Inc.; Shares

Mutual fund

**

3,426,485

TRP Growth Stock Fund

Mutual fund

**

2,650,695

Templeton Global Bond Fund; Advisor Class

Mutual fund

**

700,821

*

Vanguard Institutional Index Fund

Mutual fund

**

18,373,289

*

Vanguard Mid-Cap Index Fund Signal Shares

Mutual fund

**

2,574,023

*

Vanguard REIT Index Fund Signal Shares

Mutual fund

**

660,531

*

Vanguard Selected Value Fund

Mutual fund

**

532,983

*

Vanguard Small-Cap Index Fund Signal Shares

Mutual fund

**

2,187,524

*

Vanguard Target Retirement 2010 Fund

Mutual fund

**

996,641

*

Vanguard Target Retirement 2015 Fund

Mutual fund

**

1,236,497

*

Vanguard Target Retirement 2020 Fund

Mutual fund

**

2,219,044

*

Vanguard Target Retirement 2025 Fund

Mutual fund

**

2,039,878

*

Vanguard Target Retirement 2030 Fund

Mutual fund

**

1,285,062

*

Vanguard Target Retirement 2035 Fund

Mutual fund

**

2,327,961

*

Vanguard Target Retirement 2040 Fund

Mutual fund

**

2,461,927

*

Vanguard Target Retirement 2045 Fund

Mutual fund

**

1,535,430

*

Vanguard Target Retirement 2050 Fund

Mutual fund

**

833,348

*

Vanguard Target Retirement 2055 Fund

Mutual fund

**

157,611

*

Vanguard Target Retirement 2060 Fund

Mutual fund

**

29,167

*

Vanguard Target Retirement Income

Mutual fund

**

1,716,438

*

Vanguard Total Bond Market Index Fund Signal Shares

Mutual fund

**

5,863,200

*

Vanguard Total International Stock Index Fund: Signal Shares

Mutual fund

**

2,748,609

*

Vanguard Wellington Fund Admiral Shares

Mutual fund

**

7,255,297

Wells Fargo Advantage Discovery Fund; Investor Class

Mutual fund

**

289,813

Total mutual funds

74,564,823

BNP Paribas Pooled Trust Fund

Common collective trust

**

24,407,527

*

SunCoke Energy, Inc. common stock

Common stock

**

454,293

Total investments on the statement of net assets available for plan benefits

99,426,643

*

Participant loans

(5.25%)

—

1,398,565

Total investments on the Form 5500

$

100,825,208

 

*	Represents a party-in-interest to the Plan.

**	Cost omitted for participant directed investments.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

 

DATED: June 26, 2014

 

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EXHIBIT INDEX

 

Exhibit
23		Consent of Independent Registered Public Accounting Firm

 

 

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