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This paper proposes a new method of S-parameter extraction from finite-difference time-domain simulations. Unlike the previously published methods, the present method extracts the frequency-dependent mode impedance and propagation constant directly from the three-dimensional simulations. This makes it accurate and computationally effective in wide-band analysis. This paper provides examples of calculations including difficult cases of inhomogeneous or lossy structures, with the frequency band spanning below and above the cutoff frequency. Special attention is given to the S-parameter extraction for evanescent modes. It is shown that the available literature provides insufficient and sometimes confusing background in this regard. Thus, a new consistent theoretical background is presented.