Good morning. My name is Chris, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the SunCoke Energy Fourth Quarter 2021 earnings call. All lines have been placed on mute to prevent any background noise.
After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star then the number one on your telephone key pad. To withdraw your question, please press star one again. Thank you. Shantanu Agrawal, Vice President of Investor Relations and Treasurer, you may begin.
Thanks, Chris. Good morning, and thank you for joining us this morning to discuss SunCoke Energy's fourth quarter and full year 2021 results, as well as 2022 guidance. With me today is Mike Rippey, President and Chief Executive Officer. Following management's prepared remarks, we'll open the call for Q&A.
This conference call is being webcast live on the investor relations section of our website, and a replay will be available later today. If we don't get to your questions on the call today, please feel free to reach out to our investor relations team.
Before I turn things over to Mike, let me remind you that the various remarks we make on today's call regarding future expectations constitute forward-looking statements. The cautionary language regarding forward-looking statements in our SEC filings apply to the remarks we make today. These documents are available on our website as are reconciliations to non-GAAP financial measures discussed on today's call. With that, I will now turn things over to Mike.
Thanks, Shantanu. Good morning, and thank you all for joining us on today's call. Today, we announce SunCoke Energy's fourth quarter and full year results. Before I turn it over to Shantanu, who will review the results in detail, I want to discuss a few highlights. Let me start by first thanking all of our SunCoke employees for their commitment and contributions in what has been an historic year for SunCoke.
Not only from a financial results perspective, but also because of the steps we have taken towards transforming the company. The dedication of our team is clearly visible through our safety record, operational excellence, and financial results. On slide three, you can see the key initiatives that we set out and how we performed against these objectives.
We delivered $275.4 million of Adjusted EBITDA in 2021, the highest in SunCoke's history, exceeding our revised guidance range of $255 million-$265 million. Additionally, we generated $101 million in free cash flow, which was also above our revised guidance range of $80 million-$100 million.
We operated our domestic coke fleet at full capacity, and the main driver behind that was our successful entry into the foundry and export coke markets. This was our first year of entering these new markets on a commercial scale, and we're extremely pleased with the success we achieved.
We developed strong customer relationships, and our high-quality products are well-received in both markets. Our operational and technical expertise, combined with a strong commodity market environment, provided an excellent opportunity to enter these markets.
We expect to further increase our participation in both the foundry and export coke markets in 2022. Additionally, we signed a five-year take-or-pay agreement to supply blast furnace coke to Algoma Steel beginning this year with an average sales volume of 150,000 tons per year.
This new contract addresses a portion of the uncontracted coke tons for the next five years, along with providing further customer diversification. We are excited to begin working with this new customer. Looking at our progress on capital structure, we successfully refinanced the company's debt in 2021, significantly reducing the cost of debt and extending debt maturities.
The interest rate savings resulting from the refinancing are in excess of $17 million on an annual basis. The debt refinancing is a significant step toward matching SunCoke's capital structure with our operating plans. From a capital allocation perspective, we deployed our free cash flow to reduce our gross debt by approximately $64 million.
Additionally, we returned $20 million to our shareholders, paying a $0.24 per share annual dividend, and anticipate this dividend to continue in 2022. With that, I'll turn it over to Shantanu to review our fourth quarter and full year earnings in detail. Shantanu?
Thanks, Mike. Turning to slide four now. The fourth quarter net income attributable to SXC was $0.15 per share, up $0.21 versus the fourth quarter 2020. Our full year 2021 net income attributable to SXC was $0.52 per share, up $0.48 versus the full year 2020, driven by strong operating results and lower interest expense, partially offset by loss on extinguishment of debt recorded in connection with the refinancing.
Consolidated Adjusted EBITDA for the fourth quarter 2021 was $62.9 million, up $25.9 million versus fourth quarter 2020. The increase was mainly driven by higher volumes across both coke and logistics businesses resulting from the strength in steel and coal markets, as well as the absence of supply relief provided to certain customers in exchange for extending existing contracts in 2020.
On a full-year basis, we delivered Adjusted EBITDA of $275.4 million, up $69.5 million versus full year 2020. Turning to slide five to discuss the year-over-year Adjusted EBITDA variance in detail. Our coke business delivered strong financial results, mainly driven by successful entry and participation in the foundry and export coke markets.
We also saw a significant increase in volume year-over-year due to the absence of supply relief provided to certain customers last year in exchange for contract extensions. The domestic coke segments delivered full-year Adjusted EBITDA of $243.4 million, which was well above our full-year revised domestic coke guidance. Including Brazil, our coke operations delivered Adjusted EBITDA of $260.6 million.
Logistics segment Adjusted EBITDA increased approximately $26 million year-over-year, driven by higher throughput volumes, higher price realizations, and the addition of a new product at CMT. With the backdrop of a strong commodity market, the logistics segment delivered full-year Adjusted EBITDA of $43.5 million.
Finally, our corporate and other expenses were lower by $13.2 million year-over-year, mainly due to lower non-cash legacy liability expense and absence of foundry-related R&D expense, which were partially offset by higher employee-related expenses. Overall, we are very pleased with the performance across all segments, resulting in a historic year for the company.
Turning to slide six to discuss capital deployment in 2021. We generated very strong operating cash flow in 2021 of approximately $233 million, which was above our full-year revised guidance range of $209 million-$224 million. This robust cash flow generation allowed us to make good progress on our capital deployment initiatives.
CapEx of approximately $98 million during the year was above our revised guidance as we pulled forward some capital work to manage labor availability and supply chain issues. As you will see in later slides, our 2022 capital expenditure is expected to be significantly lower as compared to 2021 at approximately $80 million, and takes into account both pulling forward of the projects as well as the impact of inflation on material and labor costs.
As discussed in our second quarter call, we significantly strengthened our balance sheet with the execution of the debt refinancing transactions. This refinancing both extended our maturity profile and lowered our cost of debt. The interest rate savings resulting from the debt financing are in excess of $17 million on an annual basis.
We incurred approximately $20 million as transaction fees for issuance of the new senior secured notes and extension of the revolver. We also paid $22 million as premium to call the 2025 senior notes as part of the refinancing transaction. Along with the refinancing, we also reduced our debt outstanding by approximately $64 million in 2021.
Year-over-year, we brought down our leverage ratio by more than a ton, and we expect the deleveraging to continue in 2022 as we further work towards lowering our outstanding revolver balance. We also returned capital to our shareholders in 2021 in the form of $0.24 per share annual dividend, which was a use of cash of approximately $20 million.
In total, we ended 2021 with a cash balance of approximately $64 million and strong liquidity of approximately $292 million, setting the stage for continued progress against our capital allocation priorities in 2022. Switching gears, I would now like to talk about our guidance expectation for 2022. Let's turn to slide eight. We expect 2022 adjusted EBITDA to be between $240 million and $255 million.
Domestic coke adjusted EBITDA is expected to be lower by $8 million-$14 million in 2022, mainly driven by a lower price realization assumption on export sales. Our coke facilities are expected to continue to run at full capacity, but as we increase our participation in the export and foundry markets, we are exposed to greater commodity risk, which is reflected in our guidance.
Brazil Coke adjusted EBITDA will be down $2 million-$3 million, mainly due to lower volumes due to a required capital rebuild project. As a reminder, the Brazil Coke is under an operating contract where the coke plant is owned by ArcelorMittal Brazil, and SunCoke provides the operating and technological services. All coke plant-related capital expenditures are paid by AM Brazil.
Turning to the logistics segment, we expect logistics to be lower by $4 million-$10 million in 2022. We anticipate similar volumes year-over-year, but lower price realizations as well as more normalized high water costs at CMT are expected to impact the profitability year-over-year. Lastly, we expect our corporate and other segment expense to be higher by approximately $6 million-$8 million. The year-over-year change is driven by normalized non-cash legacy liability expense as well as higher IT and insurance costs.
Moving on to slide nine. In 2022, we expect our domestic coke adjusted EBITDA to be between $229 million and $235 million, with sales of approximately 4.1 million tons, which includes contract, export, and foundry coke. We expect to run the domestic fleet at full capacity. Approximately 3.55 million tons are contracted under long-term take-or-pay agreements in 2022.
We anticipate selling the remaining 700,000 furnace equivalent tons in the foundry and export markets. This represents a significant increase in both foundry and export coke market participation from the previous year. As a reminder, foundry and export tons do not replace blast furnace tons on a ton-for-ton basis.
For example, due to differences in the production process, a single ton of foundry coke replaces approximately two tons of blast furnace coke. The order book for both export and foundry coke is solid, and the sales for first quarter of 2022 have been finalized. The drop in adjusted EBITDA year-over-year is mainly driven by lower price realization assumptions and higher commodity price risk as we increase our participation in spot markets.
Moving to slide 10. 2022 logistics adjusted EBITDA is expected to be between $34 million and $40 million. This outlook is based on current expectations for the thermal coal export volumes from the Gulf Coast and price realizations based on API2 forward curve. We are projecting between 5.5 and 7 million tons of coal to be exported from CMT in 2022.
Additionally, our volume estimates also include approximately 3-3.5 million tons of non-coal throughputs such as iron ore, petcoke, and aggregates. We expect to handle approximately the same volumes at our domestic coal terminals as we did last year with our coke production facilities running at full capacity and third-party volumes remaining unchanged.
The year-over-year decrease in logistics EBITDA is mainly driven by two factors. Firstly, we expect the CMT price kicker benefit, which is based on API2 coal price index, to be lower in 2022 as compared to previous year. This coal index futures contract has been very volatile recently and is expected to remain so in the near term. Secondly, 2021 was an exceptional year at CMT from a high water cost perspective.
We incurred no high water costs during the previous year, but anticipate a more normalized weather pattern, resulting in an increase in high water costs at CMT in 2022. Overall, we anticipate another solid year for logistics segment as we maintain the level of volumes reached last year and pave the way for continued success. Moving to the 2022 guidance summary on slide 11.
This slide provides an historical view of actual performance across many metrics as well as a summary of our 2022 guidance. Once again, we expect Adjusted EBITDA to be between $240 million and $255 million. Our coke and logistics business are expected to run at similar volumes year-over-year, but at lower price realizations. As mentioned earlier in the call, we anticipate our CapEx requirement in 2022 to be around $80 million.
We brought forward some of the capital spend from 2022 to 2021, which favorably impacts the 2022 CapEx guidance, but we continue to see inflationary pressure on wages and materials. Our free cash flow is expected to be between $110 million and $125 million after taking into account cash interest, cash taxes, capital expenditures, and working capital changes. With that, I will turn it back to Mike.
Thanks, Shantanu. Wrapping up on slide 12, 2022 will be a year of continued building on the progress we made in 2021. As always, safety and operational performance is top of mind for our organization. Our efforts will continue to focus on safely executing against our operating and capital plan in 2022. Additionally, we anticipate inflation to become a larger part of manufacturing market dynamics.
We have recently started developing continuous improvement plans with a goal of minimizing any inflationary pressures that our operations face in the future. We will continue to pursue opportunities to optimize our asset base, specifically as it relates to the Convent Marine Terminal. We made good progress on revitalizing CMT in 2021 with a backdrop of positive market dynamics and will continue to build on this foundation for CMT's long-term success.
As I mentioned in the beginning of this call, we're extremely pleased with our entry and success in the foundry and export coke markets. This diversification is a meaningful step for the long-term success of SunCoke. With a strong base established in 2021, we look to further strengthen our relationships, increase our brand recognition, and grow our market share in these new markets.
As we have demonstrated in the past, we will continue to pursue a balanced yet opportunistic approach to capital allocation. We expect our deleveraging initiative to continue in 2022 as we look to further bring down our revolver balance. We are looking at growth opportunities both organically and through M&A, and as we have said before, we will remain disciplined, understanding that it is not in shareholders' interest for the company to sacrifice long-term value creation for short-term marginal gains.
We continue to evaluate the capital needs of our business, our capital structure, and the need to reward shareholders on a continuous basis, and we'll make capital allocation decisions accordingly. Looking beyond 2022, we believe that SunCoke is well positioned for long-term success. We believe coke supply, which has been underinvested and nearing the end of life cycles, will continue to exit the market.
SunCoke is the youngest domestic cokemaking facilities in the NAFTA region, and we continue to invest in our facilities to ensure they operate safely and efficiently. We have leading technology with outstanding environmental performance and are recognized by the EPA MACT standard.
Our coke production process is the cleanest and least carbon intensive in the world. We have taken significant steps towards diversifying both our customer and product base and will continue to look for further opportunities to do so.
In total, we are excited for the new year after making significant progress in diversifying and growing our business in what was an historic 2021. We see good potential to further build on the strengths of our core coke-making and logistics franchises to meet our financial targets and create value for our shareholders. With that, let's go ahead and open the call for Q&A.
Thank you. As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. Our first question is from Lucas Pipes with B. Riley Securities. Your line is open.
Yes. Thank you so much for taking my questions. Good job in 2021. I wanted to ask a little bit more on the decline in EBITDA expectations in the domestic coke business. Specifically, is it degree of conservatism? When I look at commodity prices globally, I think you know the margins on export sales could be pretty attractive, but would appreciate your perspective on that. Thank you.
Well, Lucas, it's a great question, and it's obviously asking about the unknowable at this point. We hope you're right. We just are making an estimate, and you may characterize it as conservative. We see it as our best estimate as we sit here today. We have obviously good visibility in the first quarter.
We're sold out for the first quarter. So we know the pricing and the margins on those tons were well into the second quarter in terms of selling that capability. But we don't have visibility into the back half of the year. So it is an estimate. With all estimates, there's risk both on the up and the downside. So we've made an estimate, and I hope you're right.
Got it. In terms of what is embedded here in the guidance, it assumes a normalization in the back half of the year.
That's correct.
Got it. I assume the same can be said for the lower price kicker expectations at CMT.
You're 100% right.
Very helpful.
API2, you know, we see here holding up well in the first half, and we just don't have visibility into the second, at least not as clear a visibility as we do for the first.
Do you have your own subjective estimate, or do you look at the forward curve for the back half for the API 2?
No, no. We look at the four-year forward curve. You know, it runs out through 2023, so we're familiar with it on a daily basis.
Got it. Okay. No, I appreciate that. Maybe to turn to kind of bigger picture strategy. You are generating a nice amount of free cash flow here at the midpoint of your guidance. Could you list your priorities for the use of that cash?
Yeah. Our priority remains as it has been, which is to further de-lever the company. We've made nice progress, but there's still work to do, and we're gonna drive that revolver balance down. That's our number one priority. Beyond that, of course, we look to maintain our facilities in the excellent condition they are.
As I've said before, we see organic growth opportunities oftentimes presenting, you know, certainly the lowest level of risk and oftentimes the highest returns. That's most evident in the investment we made to enter the foundry market, as well as some very modest investments we made at CMT to allow ourselves into both the petcoke and iron ore opportunities. You know, organically, we'll look to grow our business as we have successfully done in the past.
Beyond that, we look to external growth through M&A. As we said many times, we'll do so in a very prudent way. You know, it's not growth at any price. It's profitable growth in industries where we have expertise and knowledge, both with regard to our technologies, our management know-how and industry perspectives. Of course, then we look to allocation to our shareholders. The capital allocation strategy is the same that's been in place now for several years.
Would it be reasonable for an investor to expect an increased emphasis on capital returns after the revolver is fully paid down?
Yeah. It then becomes a matter of what opportunities to grow the company are present to us and then to return to shareholders excess cash flows.
Okay. Well, I really appreciate your perspective and best of luck.
Great. Thanks.
Our next question is from Matthew Fields with Bank of America. Your line is open.
Hey, everyone. Exciting news on the new Algoma contract. Just maybe a little more detail on that. Is that a similar type of contract to your others where, you know, fixed price, fixed volume?
Yep. Very similar, Matthew.
Okay. Would you say it's accretive to margins in domestic coke, or is it then dilutive or, you know, neutral?
It is very consistent with the existing margins we earn from our other customers.
Okay. Then in your table of, you know, contract summary from your supply deck, I think it's page 17, it seems to imply that the Algoma coke will be maybe supplied from either Haverhill One or Jewell. Is there clarity on which facility is gonna be actually supplying Algoma? I mean, I think, you know, Haverhill is a lot closer to Sault Ste. Marie, and it's on the river. That one would make more sense.
Yeah, we have the option. We are currently anticipating supplying all that coal from Haverhill.
Jewell will continue to be kind of not used for your contracted domestic coal customers, more of the foundry and export outlet from Jewell.
That's mostly correct. There are some contract tons coming through there still.
Yeah. Matthew, this is Shantanu. I mean, as you see on the table, you know, I mean that 400,000 from Cleveland-Cliffs or to Cleveland-Cliffs could come out of Haverhill Jewell. It's like, you know, Jewell and Haverhill kind of acts as our flex capacity where, you know, we feel we fill up that 400,000, the 150 export and foundry from those two facilities.
With all of our foundry is coming from Jewell.
Jewell, yeah.
Okay, great. Thank you. On the logistics guide, it seems a little light to maybe some people who are watching what the coal producers are saying about their kind of opportunities in the export market. I know there's more than coal going through that port.
You mentioned a little bit of things on the cost side, you know, high water costs expected to normalize. Maybe you're not baking in any kind of price kicker that you got in 2021. Maybe, you know, like Lucas said, is that conservatism, but maybe you can explain kind of how you're getting to that guide when it seems like coal exports to the Gulf should be stronger in 2022 than they were in 2021.
No, we see that, it's a great question. We see volumes as relatively same, which is a continuation of the strong market dynamics we experienced in 2021. On the high water, historically, you know, during the spring season when you know, the snowpack melts in Minnesota, the rains come, the Mississippi River depth increases, and we incur a cost associated with that higher water in the spring.
Last year was quite abnormal in that we incurred no high water costs. So we don't plan on something that it's only happened once in my history at SunCoke. So we've budgeted for a return to the normal cost associated with the spring high water season. So that's one point. The other point is the question around API2 pricing.
We have assumed that price kicker for a portion of the year. We have not done so for the full year. You know, and certainly, you know, if you look at the forward curve today, you would call that conservative, but there's a lot of volatility in that API2 curve.
We haven't forecast that we'll receive the full benefit of that API2 kicker for the year. The two things that are going on then are the price realization, the assumption around the extent of the API2 price kicker and the resumption of normalized high water cost. Other than that, it's very much the same as last year.
That's helpful. Maybe to just sort of drill down and quantify a little bit of this. What was the kind of high water cost that you incurred maybe in 2019 and 2020 that you didn't incur in 2021?
It's in the order of $2-3 million is kind of the normalized cost. It can be, you know, higher than that. It's been higher than that. We had a very wet year a couple of years back, where the water remained high. It seemed like until September. I'd say call it $2-3 million a year.
Okay. Maybe, you know, what do you think about if things were to stay the same with API2, and you were to get that price kicker in the back half of the year, kind of what upside would that impose on your logistics guidance?
Well, we look a lot like 2021.
Yeah. I mean, you take away the high water cost, and we look very similar to 2021.
Okay. All right. That's helpful. Then, lastly, you know, going back to the capital structure. You know, I appreciate the comments you made earlier about number one priority is loan revolver balance. You know, based on the guidance after your distributions of $20 million or so, you're gonna have about $90 million-$105 million of cash to reduce that revolver balance.
That's gonna take you to kind of under two times net, which is, you know, well below what your historical kind of leverage target has been. You've been under that target for a while now. Do you think it's time to kind of revise that leverage target, you know, fundamentally lower, and that's just kind of what you're trying to get at with your capital allocation priorities?
Well, we've always said 3x or less, and again I probably didn't stress less strongly enough, but it remains 3x or less. I think as you look at our company, we're entering these new markets where we're doing quite well. But these markets, unlike the take-or-pay when all of our volumes were contracted under long-term take-or-pay contracts, it does change somewhat the risk profile of the company.
I'm quite comfortable being well below 3x as we enter these new markets. We've enjoyed great success. We plan on that. At the same time, we'll remain prudent and recognize there's a cyclical element to these earnings.
Okay, great. That's, that's it from me. Thank you very much, and good luck in 2022.
Appreciate it. Thanks, Matthew.
Our next question is from Nathan Martin with The Benchmark Company. Your line is open.
Hey, good morning, everybody. Congrats on the full year results, and thanks for taking my questions.
Thanks.
Mike, I guess I was wondering, can we possibly get some more color on the labor availability costs mentioned in your prepared remarks? Is it specifically difficulties hiring or maybe COVID absenteeism, higher wages, or a combination of those? Obviously, seeing that kind of up and down the supply chain. What are your thoughts on those issues going forward? Thanks.
No, we don't struggle to attract labor to our company. We do quite well. There's, you know, well-known channels into our company. When we do have openings, they're relatively straightforward to fill. We've, knock on wood, had exceptional performance as it relates to COVID, where, like, all companies, all communities, we've experienced absences related to the COVID-19.
We have had no spread in any of our plants, and that's really a true testament to the dedication of our people to keep people safe in the workplace. We have had no inability to produce and deliver our products because of COVID.
You know, what we refer to really is you know, kind of the general type of wage inflation that we're starting to see in our economy. We saw it most notably with regard to the capital work where we're employing outside resources to perform that work. We've seen the inflationary impacts on the capital side. During COVID, we weren't able to get all of the capital work done that we'd set out to do.
Some of that was because of contractor labor availability, and some of it was we just didn't want that level of activity during a period where we were very much looking to safeguard our employees from the virus. We as we did in the fourth quarter, we were able to do some catching up and getting ahead.
We feel in a very good position now with regard to the capital work we've achieved and that which we've planned for next year from an availability standpoint. We are seeing no inflationary pressures as it relates to both labor and materials.
Got it. Appreciate all that info there. Maybe just another question related to CMT specifically. I think, you know, 42 tons handled looked like it came in about 1 million tons lower than guided. I was wondering if any of that had to do, you know, with labor or supply chain issues. Just any thoughts there?
Yeah, it was some supply chain issues. One of our customers had some issues with one of their producing coal mines and was unable to get as much product to us as they had in the previous quarter.
Okay. Are those still ongoing, or are you seeing those progressing, getting better sequentially here?
They're in the process of bringing that mine back online as we speak.
Got it. I think I know exactly the one you're talking about. Appreciate that. Maybe just finally, just more of a modeling question. How much coke did you guys end up selling in the foundry and export markets in 2021? I was just wondering, as you pointed out, you expect to increase that amount here in 2022. Thanks.
Yeah, we don't go into specifics with regard to, particularly the foundry market. It's a small market, as you know, and we've achieved meaningful market share participation. We look to grow that market share. For commercial reasons, we don't discuss the specifics.
Yeah. I mean, what we can say, Nate, on that is like kind of on a you know, furnace equivalent capacity, we sold approximately 450,000 furnace equivalent in 2021. We are going to 700,000 equivalent in 2022. That kind of gives you the magnitude of the increase.
The increase in participation in both those markets. We don't give further-
Yeah.
Detail beyond that, and I think you can appreciate why. Shantanu has properly pointed out in the past and again today on a blast-furnace equivalent basis, the substitution rate is two to one on foundry.
Yeah, no, Shantanu, that's exactly what I was looking for. Appreciate that, guys. I'll leave it there. Thanks again for your time and best of luck in 2022.
Thanks, Nathan.
Our next question is from Karl Blunden with Goldman Sachs. Your line is open.
Hi, good morning. Thanks for all the time today. Mike, you mentioned in your opening comments an interest in M&A and organic growth where it makes sense. When investors think about pricing that, is all of that, all those opportunities doable with your cash flow and then potentially a bit of a revolver draw? Could that involve additional financing just based on what you see in the landscape?
What we're seeing right now would not require any additional borrowings on the part of the company.
Gotcha. On the cost inflation point, you mentioned that a couple times. Do you have a specific number baked in kind of year over year? Do you know how much that could vary? You know, I guess what I'm getting at is how much visibility do you have into cost or have you locked in at this point in time? Or that's still a source of significant uncertainty?
Not for 2022. It is quite locked in. The concern that we have, I think, is the concern that many are voicing now is, you know, is there a structural change in the inflation rate in the U.S. and how does that affect us in 2023 and beyond? You know, if inflation were to continue at rates like we've experienced more recently, you know, the compounding impact of that can become a real drag if you don't find ways to otherwise improve and become more efficient so as to offset those impacts. For 2022, there's no risk.
Gotcha. On the CapEx side, maybe I guess that line item could be impacted by inflation too longer term. What should we think of as your normalized CapEx? You know, you mentioned some of it was pulled forward into 2021. Now you got $80 for 2022. As we model this out further, is it slightly higher than that number, 2023 and beyond?
I think it's you know, 80-ish for a number, you know, and that's assuming kind of inflationary increases, you know, in the 2%-3% range. If inflation were to settle in at rates higher, then we'd have to adjust that number.
Yeah. I mean, our 2020 number was 73, right? This year, I mean, obviously we pulled forward some work, so it was 98. I think, Mike, 75-88, that's a pretty good estimate in the longer term.
Still very helpful. Thanks very much for the time.
Mm-hmm.
Our next question is from Peter Greatrex with Boundary Creek Advisors. Your line is open.
Hi. Good morning. When I look at the credit rating agency commentary at the time of the bond issue and the successful refinancing, I was just wondering if you could update everybody on interactions with the credit rating agencies and sort of whether they're seeing the progress that is obviously happening at the company. It seems like you're hitting some of the markers that they laid out, so any color on conversations with the rating agencies would be helpful.
Thanks, Peter. Thanks for the question. Yeah, no, I mean, we have regular conversations with them, right? I mean, as you mentioned, there are certain markers that they have laid out. One of the factors of taking our, you know, leverage down to a certain level is obviously kind of getting a better rating from the credit agency. Now, the other factor of that is to maintain our credit rating at that level as well.
I think having, as Mike previously pointed out in one of the questions, you know, the point of taking our leverage down further is to make sure, you know, we are kind of at that level and able to maintain as our business becomes more and more, you know, spot driven or we have more volumes in the spot market. Pretty good conversation. You know, when we refinance, they affirmed the ratings, and we continue to have good dialogue with them.
Great. Thank you.
Again, please press star one if you'd like to ask a question. It appears that we have no further questions. I'll turn the call over to Mr. Rippey for any closing remarks.
Great. Well, thank you. Again, thank you all for joining us this morning, and as always, for your continued interest in SunCoke. Look forward to continuing these discussions as 2022 now comes into focus and we move through it. Thanks again, and have a good day.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.