Table of Contents

Form10q2022q3p1i0.jpg
UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM
10-Q

FORM 10-Q

(Mark One)

x

☒
QUARTERLY
REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended
September 30, 2022
OR
☐
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarterly period ended June 30, 2019

OR

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

For the transition period from
to

Commission File Number Number:
1-16247

Coronado Global Resources Inc.

(Exact name of registrant as specified in its charter)

Delaware

Delaware

83-1780608

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

100 Bill Baker Way

Beckley, West Virginia 25801

(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
Level 33, Central Plaza One
,
345 Queen Street
Brisbane, Queensland
,
Australia
4000
(Address of principal executive offices) (Zip
(Zip Code)

(681) 207-7263

(
61
)
7
3031 7777
(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

None

None

None

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
None
None
None
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
(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.

Yeso
☒
Nox

☐
Indicate by check mark whether
the registrant has submitted electronically
every Interactive Data File required to
be submitted 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 such files).
Yes
☒
No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).

Yes  x    No  o

Indicate by check mark whether the registrant

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

Large accelerated filer

o

Accelerated filer

o

Non-accelerated filer

x

Smaller reporting company

o

Emerging growth company

o

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.

o

Large accelerated
filer
☐
Accelerated filer
☒
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
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.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yeso
☐
Nox

☒
The registrant’s
common stock is
publicly traded on
the Australian Securities
Exchange in the
form of CHESS
Depositary Interests, or
CDIs, convertible at the option of
the holders into shares of the
registrant’s common stock on a 10-for-1 basis.
The total number of shares
of the registrant’s
registrant's common
stock, par
value $0.01
per share,
outstanding on
October 31,
2022, including
shares of
common stock par value $0.01 per share, outstanding
underlying
CDIs, was
167,645,373
.
Form10q2022q3p2i1.jpg Form10q2022q3p2i0.jpg
Steel starts
here.
Quarterly Report on July 31, 2019, including shares of common stock underlying CDIs, was 96,651,692.

Form 10-Q for the quarterly period ended

September 30, 2022.
4
5
6
8
9
19
20
41
43
44
44
44
45
45
45
45
46
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
4
PART I —– FINANCIAL INFORMATION

ITEM 1.
FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets

(In US$ thousands, except share data)

Assets

 

Note

 

(Unaudited)
June 30,
2019

 

December 31,
2018

 

Current assets:

 

 

 

 

 

 

 

Cash and restricted cash

 

 

 

$

46,251

 

$

124,881

 

Trade receivables

 

 

 

204,248

 

206,127

 

Related party receivables

 

18

 

59,665

 

36,716

 

Income tax receivable

 

 

 

—

 

12,017

 

Inventories

 

6

 

129,424

 

95,103

 

Other current assets

 

 

 

40,722

 

40,914

 

Total current assets

 

 

 

480,310

 

515,758

 

Non-current assets:

 

 

 

 

 

 

 

Property, plant and equipment, net

 

7

 

1,603,087

 

1,618,558

 

Right of use asset — operating leases, net

 

10

 

64,343

 

—

 

Goodwill

 

8

 

28,008

 

28,008

 

Intangible assets, net

 

8

 

5,221

 

5,402

 

Deposits and reclamation bonds

 

 

 

12,541

 

11,635

 

Deferred income tax assets

 

 

 

7,779

 

11,848

 

Other non-current assets

 

 

 

17,194

 

18,355

 

Total assets

 

 

 

$

2,218,483

 

$

2,209,564

 

Liabilities and Stockholders’ Equity/Members’ Capital

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

 

 

$

41,084

 

$

42,962

 

Accrued expenses and other current liabilities

 

9

 

252,351

 

243,496

 

Income tax payable

 

 

 

33,024

 

9,241

 

Asset retirement obligations

 

 

 

7,719

 

7,719

 

Contingent royalty consideration

 

16

 

7,293

 

26,832

 

Contract obligations

 

13

 

35,066

 

39,116

 

Lease liabilities

 

10

 

28,128

 

1,308

 

Other current financial liabilities

 

 

 

13,126

 

7,727

 

Total current liabilities

 

 

 

417,791

 

378,401

 

Non-current liabilities:

 

 

 

 

 

 

 

Asset retirement obligations

 

 

 

122,864

 

118,072

 

Contract obligations

 

13

 

224,433

 

253,578

 

Deferred consideration liability

 

14

 

164,148

 

155,332

 

Other financial liabilities

 

 

 

2,697

 

4,073

 

Lease liabilities

 

10

 

52,902

 

2,481

 

Contingent royalty consideration

 

16

 

3,131

 

3,371

 

Deferred income tax liabilities

 

 

 

54,885

 

38,838

 

Other non-current liabilities

 

 

 

1,680

 

1,610

 

Total liabilities

 

 

 

1,044,531

 

955,756

 

Common stock $0.01 par value; 1,000,000,000 shares authorized, 96,651,692 shares are issued and outstanding as of June 30, 2019 and December 31, 2018

 

 

 

967

 

967

 

Series A Preferred stock $0.01 par value; 100,000,000 shares authorized, 1 Share issued and outstanding as of June 30, 2019 and December 31, 2018

 

 

 

—

 

—

 

Additional paid-in capital

 

 

 

1,108,041

 

1,107,948

 

Accumulated other comprehensive loss

 

 

 

(44,202

)

(49,609

)

Retained earnings

 

 

 

108,868

 

194,220

 

Noncontrolling interest

 

 

 

278

 

282

 

Total stockholders’ equity

 

 

 

1,173,952

 

1,253,808

 

Total liabilities and stockholders’ equity

 

 

 

$

2,218,483

 

$

2,209,564

 

Assets
Note
(Unaudited)
September 30,
2022
December 31,
2021
Current assets:
Cash and restricted cash
$
698,647
$
437,931
Trade receivables, net
418,236
271,923
Inventories
5
106,971
118,922
Other current assets
59,351
47,647
Assets held for sale
26,114
27,023
Total
current assets
1,309,319
903,446
Non-current assets:
Property, plant and equipment,
net
6
1,334,133
1,397,363
Right of use asset – operating leases, net
7,897
13,656
Goodwill
28,008
28,008
Intangible assets, net
3,362
3,514
Restricted deposits
14
88,439
80,981
Deferred income tax assets
—
14,716
Other non-current assets
33,252
19,728
Total
assets
$
2,804,410
$
2,461,412
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
85,353
$
97,514
Accrued expenses and other current liabilities
7
406,104
270,942
Income tax payable
108,187
25,612
Asset retirement obligations
8,803
9,414
Contract obligations
38,751
39,961
Lease liabilities
8,707
8,452
Other current financial liabilities
3,770
8,508
Liabilities held for sale
11,661
12,113
Total
current liabilities
671,336
472,516
Non-current liabilities:
Asset retirement obligations
108,148
110,863
Contract obligations
101,032
141,188
Deferred consideration liability
226,311
230,492
Interest bearing liabilities
8
299,929
300,169
Other financial liabilities
9,543
13,822
Lease liabilities
6,014
12,894
Deferred income tax liabilities
109,360
75,750
Other non-current liabilities
33,226
26,216
Total
liabilities
$
1,564,899
$
1,383,910
Common stock $
0.01
par value;
1,000,000,000
shares
authorized,
167,645,373
shares issued and outstanding as of
September 30, 2022 and December 31, 2021
1,677
1,677
Series A Preferred stock $
0.01
par value;
100,000,000
shares
authorized,
1
Share issued and outstanding as of September 30, 2022
and December 31, 2021
—
—
Additional paid-in capital
1,091,651
1,089,547
Accumulated other comprehensive losses
12
(120,136)
(44,228)
Retained earnings
266,319
30,506
Total
stockholders’ equity
1,239,511
1,077,502
Total
liabilities and stockholders’ equity
$
2,804,410
$
2,461,412
See accompanying notes to unaudited condensed
consolidated financial statements

statements.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
5
Unaudited Condensed Consolidated Statements of
Operations and Comprehensive Income

(In US$ thousands, except share data)

 

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

Note

 

2019

 

2018

 

2019

 

2018

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

Coal revenues

 

4

 

$

495,385

 

$

479,021

 

$

919,329

 

$

571,343

 

Coal revenues from related parties

 

4, 18

 

135,305

 

98,489

 

293,158

 

213,003

 

Other revenues

 

4

 

11,767

 

14,020

 

21,848

 

15,337

 

Total revenues

 

 

 

642,457

 

591,530

 

1,234,335

 

799,683

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

Cost of coal revenues (exclusive of items shown separately below)

 

 

 

264,137

 

305,309

 

533,696

 

424,620

 

Depreciation, depletion and amortization

 

 

 

45,508

 

42,594

 

85,279

 

64,402

 

Freight expenses

 

 

 

52,035

 

40,912

 

89,362

 

45,155

 

Stanwell rebate

 

 

 

45,847

 

32,812

 

94,674

 

32,812

 

Other royalties

 

 

 

49,073

 

67,695

 

93,422

 

82,987

 

Selling, general, and administrative expenses

 

 

 

9,242

 

8,513

 

18,311

 

52,283

 

Total costs and expenses

 

 

 

465,842

 

497,835

 

914,744

 

702,259

 

Operating income

 

 

 

176,615

 

93,695

 

319,591

 

97,424

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

(9,087

)

(18,987

)

(17,264

)

(25,488

)

Loss on debt extinguishment

 

 

 

—

 

—

 

—

 

(3,905

)

Other, net

 

5

 

(2,989

)

(2,391

)

1,042

 

(26,846

)

Total other income (expense), net

 

 

 

(12,076

)

(21,378

)

(16,222

)

(56,239

)

Income before tax

 

 

 

164,539

 

72,317

 

303,369

 

41,185

 

Income tax expense

 

11

 

(47,033

)

(12,995

)

(89,043

)

(5,534

)

Net income

 

 

 

117,506

 

59,322

 

214,326

 

35,651

 

Less: Net loss attributable to noncontrolling interest

 

 

 

(4

)

(2

)

(4

)

(4

)

Net income attributable to Coronado Global Resources Inc.

 

 

 

$

117,510

 

59,324

 

$

214,330

 

$

35,655

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income, net of income taxes:

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

 

(508

)

(18,695

)

(1,066

)

(18,695

)

Net gain on cash flow hedges, net of tax

 

 

 

894

 

—

 

6,473

 

—

 

Total comprehensive income

 

 

 

$

117,892

 

40,627

 

219,733

 

$

16,956

 

Less: Net loss attributable to noncontrolling interest

 

 

 

(4

)

(2

)

(4

)

(4

)

Total comprehensive income attributable to Coronado Global Resources Inc.

 

 

 

$

117,896

 

$

40,629

 

$

219,737

 

$

16,960

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of common stock

 

 

 

 

 

 

 

 

 

 

 

Basic

 

15

 

1.22

 

 

 

2.22

 

 

 

Diluted

 

15

 

1.22

 

 

 

2.22

 

 

 

Three months ended
September 30,
Nine months ended
September 30,
Note
2022
2021
2022
2021
Revenues:
Coal revenues
$
863,709
$
563,287
$
2,821,334
$
1,246,918
Coal revenues from related parties
—
—
—
97,335
Other revenues
10,948
10,304
33,152
29,705
Total
revenues
3
874,657
573,591
2,854,486
1,373,958
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
385,504
309,513
1,140,467
889,771
Depreciation, depletion and amortization
37,508
38,461
126,901
132,754
Freight expenses
63,026
58,043
189,316
166,090
Stanwell rebate
54,575
12,274
124,160
43,169
Other royalties
137,331
39,099
299,711
83,219
Selling, general, and administrative
10,405
8,044
28,657
21,250
Restructuring costs
—
—
—
2,300
Total
costs and expenses
688,349
465,434
1,909,212
1,338,553
Other (expense) income:
Interest expense, net
(17,220)
(18,251)
(52,034)
(49,982)
Loss on debt extinguishment
—
—
—
(5,744)
Decrease (increase) in provision for
discounting and credit losses
12
2,430
(572)
8,074
Other, net
32,898
(1,252)
55,191
(3,610)
Total
other income (expense), net
15,690
(17,073)
2,585
(51,262)
Income (loss) before tax
201,998
91,084
947,859
(15,857)
Income tax (expense) benefit
9
(51,423)
(9,096)
(235,391)
1,788
Net income (loss)
150,575
81,988
712,468
(14,069)
Less: Net loss attributable to
noncontrolling interest
—
—
—
(2)
Net income (loss) attributable to
Coronado Global Resources Inc.
$
150,575
$
81,988
$
712,468
$
(14,067)
Other comprehensive income, net of income
Foreign currency translation adjustment
12
(41,998)
(7,966)
(75,908)
(16,796)
Net gain on cash flow hedges, net of tax
—
(2,204)
—
4,045
Total
other comprehensive loss
(41,998)
(10,170)
(75,908)
(12,751)
Total
comprehensive income (loss)
108,577
71,818
636,560
(26,820)
Less: Net loss attributable to
noncontrolling interest
—
—
—
(2)
Total
comprehensive income (loss)
attributable to Coronado Global
Resources Inc.
$
108,577
$
71,818
$
636,560
$
(26,818)
Earnings (loss) per share of common stock
Basic
10
0.90
0.49
4.25
(0.09)
Diluted
10
0.90
0.49
4.25
(0.09)
See accompanying notes to unaudited condensed
consolidated financial statements

statements.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
6
Unaudited Condensed Consolidated Statements of
Stockholders’ Equity/Members’ Capital

Equity

(In US$ thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

Other

 

 

 

Non-

 

Total

 

 

 

Members’

 

Common Stock

 

Preferred Stock

 

Paid in

 

Comprehensive

 

Retained

 

controlling

 

Stockholders’

 

 

 

Capital

 

Shares

 

Amount

 

Series A

 

Amount

 

Capital

 

Income / (Loss)

 

Earnings

 

Interest

 

Equity

 

Balance December 31, 2018

 

$

—

 

96,651,692

 

967

 

1

 

—

 

1,107,948

 

(49,609

)

194,220

 

282

 

1,253,808

 

Net income

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

96,820

 

—

 

96,820

 

Other comprehensive income (net of $ 2,391 tax)

 

—

 

—

 

—

 

—

 

—

 

—

 

5,021

 

—

 

—

 

5,021

 

Total comprehensive income

 

$

—

 

—

 

—

 

—

 

—

 

—

 

5,021

 

96,820

 

—

 

101,841

 

Dividends paid

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

(299,682

)

—

 

(299,682

)

Balance March 31, 2019

 

$

—

 

96,651,692

 

967

 

1

 

—

 

1,107,948

 

(44,588

)

(8,642

)

282

 

1,055,967

 

Net income

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

117,510

 

(4

)

117,506

 

Other comprehensive income (net of $ 383 tax)

 

—

 

—

 

—

 

—

 

—

 

—

 

386

 

—

 

—

 

386

 

Total comprehensive income

 

$

—

 

—

 

—

 

—

 

—

 

—

 

386

 

117,510

 

(4

)

117,892

 

Share-based compensation for equity classified awards

 

—

 

—

 

—

 

—

 

—

 

93

 

—

 

—

 

—

 

93

 

Dividends paid

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

Balance June 30, 2019

 

$

—

 

96,651,692

 

967

 

1

 

—

 

1,108,041

 

(44,202

)

108,868

 

278

 

1,173,952

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

Other

 

 

 

Non-

 

Total

 

 

 

Members’

 

Common Stock

 

Preferred Stock

 

Paid in

 

Comprehensive

 

Retained

 

controlling

 

Members’

 

 

 

Capital

 

Shares

 

Amount

 

Series A

 

Amount

 

Capital

 

Income / (Loss)

 

Earnings

 

Interest

 

Capital

 

Balance December 31, 2017

 

$

553,524

 

—

 

—

 

—

 

—

 

—

 

—

 

79,539

 

237

 

633,300

 

Net (loss)

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

(23,669

)

(2

)

(23,671

)

Other comprehensive income

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

Total comprehensive income

 

$

—

 

—

 

—

 

—

 

—

 

—

 

—

 

(23,669

)

(2

)

(23,671

)

Members’ contributions

 

181,610

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

62

 

181,672

 

Balance March 31, 2018

 

735,134

 

—

 

—

 

—

 

—

 

—

 

—

 

55,870

 

297

 

791,301

 

Net income

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

59,324

 

(2

)

59,322

 

Other comprehensive income

 

—

 

—

 

—

 

—

 

—

 

—

 

(18,695

)

—

 

—

 

(18,695

)

Total comprehensive income

 

$

—

 

—

 

—

 

—

 

—

 

—

 

(18,695

)

59,324

 

(2

)

40,627

 

Members’ distributions

 

(30,274

)

—

 

—

 

—

 

—

 

—

 

—

 

—

 

—

 

(30,274

)

Balance June 30, 2018

 

704,860

 

—

 

—

 

—

 

—

 

—

 

(18,695

)

115,194

 

295

 

801,654

 

Common stock
Preferred stock
Additional
Accumulated other
Total
paid in
comprehensive
Retained
Noncontrolling
stockholders
Shares
Amount
Series A
Amount
capital
losses
earnings
interest
equity
Balance December 31, 2021
167,645,373
$
1,677
1
$
—
$
1,089,547
$
(44,228)
$
30,506
$
—
$
1,077,502
Net income
—
—
—
—
—
—
269,898
—
269,898
Other comprehensive income
—
—
—
—
—
16,258
—
—
16,258
Total
comprehensive income
—
—
—
—
—
16,258
269,898
—
286,156
Share-based compensation for equity
classified awards
—
—
—
—
84
—
—
—
84
Dividends
4
—
—
—
—
—
—
(150,881)
—
(150,881)
Balance March 31, 2022
167,645,373
$
1,677
1
$
—
$
1,089,631
$
(27,970)
$
149,523
$
—
$
1,212,861
Net income
—
—
—
—
—
—
291,995
—
291,995
Other comprehensive loss
—
—
—
—
—
(50,168)
—
—
(50,168)
Total
comprehensive (loss) income
—
—
—
—
—
(50,168)
291,995
—
241,827
Share-based compensation for equity
classified awards
—
—
—
—
1,731
—
—
—
1,731
Dividends
4
—
—
—
—
—
—
(200,040)
—
(200,040)
Balance June 30, 2022
167,645,373
$
1,677
1
$
—
$
1,091,362
$
(78,138)
$
241,478
$
—
$
1,256,379
Net income
—
—
—
—
—
—
150,575
—
150,575
Other comprehensive loss
—
—
—
—
—
(41,998)
—
—
(41,998)
Total
comprehensive (loss) income
—
—
—
—
—
(41,998)
150,575
—
108,577
Share-based compensation for equity
classified awards
—
—
—
—
289
—
—
—
289
Dividends
4
—
—
—
—
—
—
(125,734)
—
(125,734)
Balance September 30, 2022
167,645,373
$
1,677
1
$
—
$
1,091,651
$
(120,136)
$
266,319
$
—
$
1,239,511
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
7
Common stock
Preferred stock
Additional
Accumulated other
Total
paid in
comprehensive
(Accumulated
Noncontrolling
stockholders
Shares
Amount
Series A
Amount
capital
losses
losses)
interest
equity
Balance December 31, 2020
138,387,890
$
1,384
1
$
—
$
993,052
$
(28,806)
$
(158,919)
$
152
$
806,863
Net loss
—
—
—
—
—
—
(40,970)
(2)
(40,972)
Other comprehensive income (net of
$
2,111
tax)
—
—
—
—
—
317
—
—
317
Total
comprehensive income (loss)
—
—
—
—
—
317
(40,970)
(2)
(40,655)
Share-based compensation for equity
classified awards
—
—
—
—
(538)
—
—
—
(538)
Acquisition of non-controlling interest
—
—
—
—
(703)
—
—
(150)
(853)
Balance March 31, 2021
138,387,890
$
1,384
1
$
—
$
991,811
$
(28,489)
$
(199,889)
$
—
$
764,817
Net loss
—
—
—
—
—
—
(55,085)
—
(55,085)
Other comprehensive loss (net of $
24
tax)
—
—
—
—
—
(2,898)
—
—
(2,898)
Total
comprehensive loss
—
—
—
—
—
(2,898)
(55,085)
—
(57,983)
Issuance of common stock, net
29,257,483
293
—
—
97,448
—
—
—
97,741
Share-based compensation for equity
classified awards
—
—
—
—
737
—
—
—
737
Balance June 30, 2021
167,645,373
$
1,677
1
$
—
$
1,089,996
$
(31,387)
$
(254,974)
$
—
$
805,312
Net income
—
—
—
—
—
—
81,988
—
81,988
Other comprehensive loss (net of tax)
—
—
—
—
—
(10,170)
—
—
(10,170)
Total
comprehensive (loss) income
—
—
—
—
—
(10,170)
81,988
—
71,818
Share-based compensation for equity
classified awards
—
—
—
—
139
—
—
—
139
Balance September 30, 2021
167,645,373
$
1,677
1
$
—
$
1,090,135
$
(41,557)
$
(172,986)
$
—
$
877,269
See accompanying notes to unaudited condensed
consolidated financial statements

statements.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
8
Unaudited Condensed Consolidated Statements of
Cash Flows

(In US$ thousands)

 

 

Six Months Ended
June 30,

 

 

 

2019

 

2018

 

Cash Flows From Operating Activities:

 

 

 

 

 

Net income

 

214,326

 

35,651

 

Adjustments to reconcile net income to cash and restricted cash provided by operating activities:

 

 

 

 

 

Depreciation, depletion and amortization

 

85,404

 

64,354

 

Amortization of right of use asset - operating leases

 

10,394

 

—

 

Amortization of deferred financing costs

 

2,060

 

2,406

 

Non-cash interest expense

 

9,711

 

1,886

 

Amortization of contract obligations

 

(17,550

)

(14,390

)

Loss on disposal of property, plant and equipment

 

39

 

—

 

Increase (decrease) in contingent royalty consideration

 

(7,143

)

10,973

 

Loss on interest rate swap

 

—

 

4,871

 

Equity-based compensation expense

 

93

 

—

 

Deferred income taxes

 

17,026

 

5,448

 

Reclamation of asset retirement obligations

 

(2,552

)

(1,415

)

Change in estimate of asset retirement obligation

 

(125

)

48

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable - including related party receivables

 

(23,105

)

(32,097

)

Inventories

 

(34,562

)

1,287

 

Other current assets

 

(2,287

)

(8,154

)

Accounts payable

 

(1,832

)

10,736

 

Accrued expenses and other current liabilities

 

15,585

 

60,106

 

Operating lease liabilities

 

(11,073

)

—

 

Change in other liabilities

 

46,807

 

(98

)

Net cash provided by operating activities

 

301,216

 

141,612

 

Cash Flows From Investing Activities:

 

 

 

 

 

Capital expenditures

 

(66,430

)

(46,776

)

Purchase of deposits and reclamation bonds

 

(906

)

(523

)

Redemption of deposits and reclamation bonds

 

—

 

171

 

Acquisition of Curragh, net of cash acquired

 

—

 

(537,207

)

Net cash used in investing activities

 

(67,336

)

(584,335

)

Cash Flows From Financing Activities:

 

 

 

 

 

Proceeds from interest bearing liabilities and other financial liabilities, net of debt discount

 

109,008

 

720,083

 

Proceeds from interest rate swap

 

—

 

28,251

 

Debt issuance costs and other financing costs

 

—

 

(41,951

)

Principal payments on interest bearing liabilities and other financial liabilities

 

(108,073

)

(155,636

)

Principal payments on finance and capital lease obligations

 

(686

)

(1,052

)

Payment of contingent purchase consideration

 

(12,712

)

—

 

Dividends paid

 

(299,682

)

—

 

Members’ contributions (distributions), net

 

—

 

151,336

 

NCI member’s contributions

 

—

 

62

 

Net cash provided by (used in) financing activities

 

(312,145

)

701,093

 

Net increase (decrease) in cash and restricted cash

 

(78,265

)

258,370

 

Effect of exchange rate changes on cash and restricted cash

 

(365

)

(2,384

)

Cash and restricted cash at beginning of period

 

124,881

 

28,069

 

Cash and restricted cash at end of period

 

46,251

 

284,055

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

Cash payments for interest

 

1,148

 

38,665

 

Cash paid for taxes

 

35,873

 

4,417

 

Nine months ended
September 30,
2022
2021
Cash flows from operating activities:
Net income (loss)
$
712,468
$
(14,069)
Adjustments to reconcile net income to cash and restricted cash
provided by
operating activities:
Depreciation, depletion and amortization
126,901
132,754
Amortization of right of use asset - operating leases
5,597
6,694
Amortization of deferred financing costs
1,451
2,649
Loss on debt extinguishment
—
5,744
Non-cash interest expense
23,544
21,431
Amortization of contract obligations
(26,883)
(25,612)
Loss on disposal of property,
plant and equipment
433
835
Equity-based compensation expense
2,104
338
Deferred income taxes
49,929
2,189
Reclamation of asset retirement obligations
(3,961)
(2,393)
Increase (decrease) in provision for discounting and credit losses
572
(8,074)
Changes in operating assets and liabilities:
Accounts receivable - including related party receivables
(170,094)
9,783
Inventories
6,094
(12,889)
Other assets
(30,109)
12,187
Accounts payable
(3,371)
22,899
Accrued expenses and other current liabilities
161,224
16,363
Operating lease liabilities
(6,202)
(7,875)
Income tax payable
88,614
—
Change in other liabilities
7,073
8,161
Net cash provided by operating activities
945,384
171,115
Cash flows from investing activities:
Capital expenditures
(141,928)
(75,897)
Purchase of restricted deposits
(9,558)
(100,166)
Redemption of restricted deposits
816
30,281
Net cash used in investing activities
(150,670)
(145,782)
Cash flows from financing activities:
Proceeds from interest bearing liabilities and other financial
liabilities
—
411,524
Debt issuance costs and other financing costs
—
(15,263)
Principal payments on interest bearing liabilities and other financial
liabilities
(9,773)
(371,379)
Principal payments on finance lease obligations
(91)
—
Premiums paid on early redemption of debt
(90)
—
Dividends paid
(473,900)
—
Proceeds from stock issuance, net
—
97,741
Net cash (used in) provided by financing activities
(483,854)
122,623
Net increase in cash and restricted cash
310,860
147,956
Effect of exchange rate changes on cash and restricted
cash
(50,144)
2,287
Cash and restricted cash at beginning of period
437,931
45,736
Cash and restricted cash at end of period
$
698,647
$
195,979
Supplemental disclosure of cash flow information:
Cash payments for interest
$
19,035
$
13,681
Cash paid (refund) for taxes
$
90,888
$
(16,130)
Restricted cash
$
251
$
251
See accompanying notes to unaudited condensed
consolidated financial statements

statements.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
9
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

1.
Description of Business, Basis of Presentation

(a)
Description of the Business

Coronado
Global
Resources
Inc. (together with its subsidiaries,
is
a
global
producer,
marketer,
and
exporter
of
a
full
range
of
metallurgical
coals,
an
essential
element
in
the “Company” or “Coronado”) is
production
of
steel.
The
Company
has
a global producer, marketer,
portfolio
of
operating
mines
and exporter of a full range of metallurgical coals, an essential element in the production of steel.  The Company has a portfolio of operating mines and
development projects in
Queensland, Australia, and
in the states of
Pennsylvania, Virginia and
West Virginia
in
the USA.

United States, or U.S.

(b)
Basis of Presentation

The interim unaudited condensed consolidated financial statements
have been prepared in accordance with the
requirements of the U.S. Generally Accepted Accounting Principles,generally accepted
accounting principles, or U.S. GAAP,
and with the instructions to Form
10-Q and Article
10 of Regulation
S-X related to
interim financial reporting
issued by the
Securities and Exchange
Commission, or the
SEC. Accordingly,
they do not
include all of
the information
and footnotes required
by U.S.
GAAP for complete
financial statements and should
be read in
conjunction with the audited
consolidated financial
statements and notes thereto included in the
Company’s registration statementAnnual Report on Form 10, as amended,10-K filed with the
SEC and the
Australian Securities Exchange, or the ASX, on June 28, 2019.

During the year ended December 31, 2018, Coronado Group LLC and Coronado Global Resources Inc. completed a common control reorganization, or the Reorganization Transaction, of their legal entity structure. Prior to the Reorganization Transaction February

22, 2022.
The
interim
unaudited
condensed
consolidated
financial
statements
are
presented
in August 2018, Coronado Group HoldCo LLC, the holding company of our operations in Australia, or the Australian Operations, was a wholly-owned subsidiary of Coronado Group LLC. In connection with the Reorganization Transaction, (i) Coronado Group HoldCo LLC was converted into Coronado Global Resources Inc. in August 2018 and (ii) Coronado Group LLC contributed all of the equity ownership in our operations in the United States, or the
U.S. Operations, to Coronado Coal Corporation, a wholly-owned subsidiary of Coronado Global Resources Inc. Immediately following the Reorganization Transaction, Coronado Global Resources Inc. remained a wholly-owned subsidiary of Coronado Group LLC, which is currently owned by The Energy & Minerals Group, or EMG Group, and certain members of our management.

The Reorganization Transaction was treated as a combination of entities under common control in line with Accounting Standards Codification, or ASC, 805, Business Combinations, whereby the receiving entity (the Company) recorded the contributed assets and liabilities at the carrying value of Coronado Group LLC. Prior to the Reorganization Transaction, the consolidated financial statements of the Company reflect the net assets and operations of Coronado Group LLC. The financial statements presented following the Reorganization Transaction are those of the receiving entity (the Company) and are retrospectively adjusted to present that entity as if it always held the net assets or equity interests previously held by the seller, Coronado Group LLC. As such, financial information (including comparatives) of the Company has been presented as a continuation of the pre-existing accounting values of assets and liabilities in Coronado Group LLC’s financial statements.

The interim unaudited condensed consolidated financial statements are presented in U.S.

dollars,
unless
otherwise stated.
They include
the accounts of
Coronado Global
Resources Inc.,
its wholly-owned
subsidiaries
and its affiliates. subsidiaries
in which
it has
a controlling interest.
References to “US$
“US$” or “USD”
“USD” are
references to
U.S. dollars.
References to “A$
“A$” or “AUD”
“AUD” are
references to
Australian dollars,
the lawful
currency of
the Commonwealth
of
Australia. The Company, or Coronado,“Company” and “Coronado” are used interchangeably to refer to Coronado Global Resources Inc.
and its subsidiaries, collectively,
or to Coronado Group LLC,Global Resources
Inc., as appropriate to the
context.
Interests
in subsidiaries
controlled by
the Company
are consolidated
with any
outside stockholder
interests reflected
as
noncontrolling interests. All intercompany balances and transactions
have been eliminated inupon consolidation.

In
the
opinion
of
management,
these
interim
financial
statements
reflect
all
normal,
recurring
adjustments
necessary
for
the
fair
presentation
of
the
Company’s
financial
position,
results
of
operations,
comprehensive
income, cash flows and changes in
equity for the periods presented. Balance sheet information
presented herein
as of December 31, 2018
2021 has been derived from
the Company’s audited consolidated balance sheet at
that date.
The
Company’s
results
of
operations
for
the
three
and six
nine
months
ended June 
September
30, 2019
2022
are
not
necessarily indicative of the results that may be expected for future quarters or for
the year ending December 31, 2019.

2022.

2.
Summary of Significant Accounting Policies

Please see Note 2 “Summary
of Significant Accounting Policies”
contained in the
audited consolidated financial
statements for the year ended December 31, 20182021 included in Coronado Global Resources Inc.’s registration statement Annual Report
on Form 10, as amended,10-K filed with the SEC and ASX on June 28, 2019.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

February

22, 2022.
(a)Newly Adopted Accounting Standards

Leases. In February 2016,

During
the
period
there
has
been
no
new
Accounting
Standards
Update
issued
by
the
Financial
Accounting
Standards Board or FASB, established Topic 842, Leases, by issuing Accounting Standards Update, or ASU, No. 2016-02, which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishesthat had a right-of-use, or ROU, model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement.

On January 1, 2019, the Company adopted ASU No. 2016-02 using the modified retrospective transition approach and elected the package of practical expedients that allows it to forgo reassessment of lease classification for leases that have already commenced.  The Company also elected the practical expedients to the new standard without restating comparative prior period financial information, to not recognize ROU assets and liabilities for operating leases with shorter than 12-month terms and to include both lease and non-lease components with lease payments.

In addition to existing finance leases and other financing obligations, the adoption of the new standard resulted in the recognition of ROU assets of $66.8 million and lease liabilities of $81.1 million related to operating leases. On adoption, the lease liability included reclassification of a terminal services contract liability of $14.3 million, which is classified as a lease under the newly adopted standard. There was no material impact to the Consolidated Statements of Operations and Comprehensive Income, the Consolidated Statements of Cash Flows, or the Company’s debt covenant calculations as a result of the adoption of ASU 2016-02.

ASU No. 2016-02 also requires entities to disclose certain qualitative and quantitative information regarding the amount, timing, and uncertainty of cash flows arising from leases.  Such disclosures are included in Note 10 “Leases”.

(b)Accounting Standards Not Yet Implemented

Financial Instruments - Credit Losses. In June 2016, the FASB issued ASU 2016-13 related to the measurement of credit losses on financial instruments. The pronouncement replaces the incurred loss methodology to record credit losses with a methodology that reflects the expected credit losses for financial assets not accounted for at fair value with gains and losses recognized through net income. This standard is effective for fiscal years beginning after December 15, 2019 (January 1, 2020 for the Company) and interim periods therein. The Company expects to adopt ASU 2016-13 as of January 1, 2020 and is in the process of evaluating the impacts of adoption.

Fair Value Measurement. In August 2018, the FASB issued ASU 2018-13, which amended the fair value measurement guidance by removing and modifying certain disclosure requirements, while also adding new disclosure requirements. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The amendments are effective for all companies for fiscal years, and interim periods within those years, beginning after December 15, 2019. The Company plans to adopt all disclosure requirements effective January 1, 2020.

(c)Reclassification

Certain amounts in the prior period Condensed Consolidated Balance Sheet have been reclassified to conform to the presentation of the current period financial statements. These related to the reclassification of capital lease liabilities included within “other financial liabilities and capital leases” and “other financial liabilities, excluding current instalments” as at December 31, 2018 to “Lease liabilities” current and non-current, respectively. These reclassifications had no effect on the previously reported net income.

3.Acquisition of Curragh Complex

On December 22, 2017, a Membership Interest and Asset Purchase Agreement, or the Agreement, was entered by Coronado Australia Holdings Pty Ltd and Coronado Group LLC in order to acquire Wesfarmers Curragh Pty Ltd from Wesfarmers Limited (since renamed Coronado Curragh Pty Ltd), which we refer to as the Curragh acquisition.  The Agreement was executed on March 29, 2018.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The aggregate base purchase price for the Membership Interest in Curragh was A$700 million and was subject to adjustments pursuant to the terms of the Agreement. The Company acquired 100% of the Membership Interest.  The operating results related to the Curragh acquisition have been included in the consolidated financial statements since March 29, 2018.

The aggregate consideration on the date of the Curragh acquisition totaled $563.8 million.

Contingent consideration recognized on the date of the Curragh acquisition, specifically the Value Share Mechanism, or VSM, of $26.6 million associated with the Curragh acquisition represents the fair value of a two-year, 25% royalty on sales from metallurgical coal mined at Curragh.  The royalty only applies to the realized price on metallurgical coal sales above $145 per metric ton.  The VSM liability is marked-to-market at each reporting date, with any fluctuations included as an operating expense in the Consolidated Statement of Operations.  The payout structure of the royalty can be replicated through a probability weighted discounted cash flow approach using a Monte Carlo simulation over a 24-month period from acquisition date.  As such, the Company developed a fair value of the royalty using a Monte Carlo simulation.

In connection with the acquisition, Coronado Australia Holdings Pty Ltd incurred acquisition related costs for the six months ended June 30, 2018 of $53.8 million, $38.5 million of which is recorded in selling, general, and administrative expenses.  The remainder, relating to foreign currency swap losses, is recorded in the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income under “Other, net”.

The Curragh acquisition has been accounted for using the acquisition method of accounting which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date.  The following table summarizes total consideration transferred and the allocation of the purchase price to the acquired assets and liabilities:

 

 

Amount

 

 

 

(US$ thousands)

 

Fair value of total consideration transferred:

 

 

 

Cash consideration

 

$

537,207

 

Contingent consideration (Value Share Mechanism)

 

26,552

 

Total consideration transferred

 

563,759

 

 

 

 

 

Recognized amounts of identifiable assets acquired, and liabilities assumed:

 

 

 

Current assets

 

$

240,966

 

Property, plant and equipment

 

851,981

 

Deferred income tax assets

 

24,432

 

Other long-term assets

 

1,831

 

Current liabilities

 

(141,611

)

Contract obligations

 

(306,960

)

Asset retirement obligations

 

(104,305

)

Other long-term liabilities

 

(2,575

)

Total identifiable net assets acquired

 

$

563,759

 

No goodwill has been recorded in connection with this acquisition as the purchase consideration equaled the fair value of the net assets acquired.

The following pro forma summary reflects consolidated results of operation as if the Curragh acquisition had occurred on January 1, 2018 (unaudited).

Six Months Ended
June 30, 2018

(US$ thousands)

Revenue

1,116,183

Net Income

111,178

The pro forma financial information was prepared based on historical financial information and has been adjusted to give effect to pro forma adjustments that are (i) directly attributable to the Curragh acquisition, (ii) factually supportable and (iii) expected to have a continuing impact on the combined results.

These pro forma results are based on estimates and assumptions, which the Company believes are reasonable.  They are not the results that would have been realized had the acquisition actually occurred on January 1, 2018 and are not necessarily indicative of the Company’s

consolidated results of operations in future periods.  The pro forma results include adjustments related to purchase accounting, depreciation of property and equipment, and do not include any anticipated synergies or other expected benefits that may be realized from the Curragh acquisition.

The pro forma results for the six months ended June 30, 2018 exclude non-recurring adjustments of $53.8 million of transaction costs.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

4.financial statements.

3.
Segment Information

The Company has a portfolio of operating
mines and development projects in
Queensland, Australia, and in the
states
of
Pennsylvania,
Virginia
and
West
Virginia
in
the
U.S.
The
operations
in
Australia,
or
Australian
Operations, comprise
the 100%-owned
Curragh producing
mine complex. The
operations in the USA.  The Company operates its business along four reportable segments:  Curragh, Buchanan, Logan
United States,
or U.S. Operations,
comprise
two
100%-owned producing
mine complexes (Buchanan
and Greenbrier.  These segments are grouped based on geography.  Factors affecting Logan),
one
100%-
owned idled mine complex (Greenbrier) and
two
development properties (Mon Valley
and differentiating Russell County).
The
Company
operates
its
business
along
two
reportable
segments:
Australia
and
the financial performance
United
States.
The
organization
of each of these four
the
two
reportable
segments generally include coal quality, geology, and coal marketing opportunities, mining and transportation methods and regulatory issues.  The Company believes this method of segment reporting
reflects both
how
the way its business segments are currently managed and the way the performance of each segment is evaluated.  The four segments consist of similar
Company’s
chief
operating activities as each segment produces similar products.

The organization of the four reportable segments reflects how Coronado’s chief operating

decision
maker,
or
CODM, manages and allocates resources to the various components. 
components of the Company’s business.
The CODM
uses Adjusted
EBITDA as
the primary
metric to
measure each
segment’s
operating performance.
Adjusted EBITDA as is not a measure of financial performance in accordance with U.S. GAAP.
Investors should be
aware that
the primary metric to measure each segment’s operating performance.

Company’s

presentation of
Adjusted EBITDA
may not
be comparable
to similarly
titled financial
measures used by other companies.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
10
Adjusted EBITDA is
defined as earnings
before interest, tax, taxes,
depreciation, depletion and
amortization and other
foreign exchange losseslosses. Adjusted EBITDA is
also adjusted for certain discrete items that
management exclude
in analyzing each
of the
Company’s segments’ operating performance.
“Other and loss on debt extinguishment. “Other and corporate”
relates to additional
financial information for
the corporate function
such as accounting,
treasury, legal, human resources,
compliance,
and tax.
As such, the corporate function is not determined to be
a reportable segment but is discretely disclosed
for purposes of reconciliation to the Company’s condensed
consolidated financials.

financial statements.

Reportable segment
results as
of and for
the three and six
nine months
ended September
30, 2022
and 2021
are
presented below:
(in US$ thousands)
Australia
United
States
Other and
Corporate
Total
Three months ended JuneSeptember 30, 2019 and 2018 are presented below.

 

 

Curragh (1)

 

Buchanan

 

Logan

 

Greenbrier

 

Other and
Corporate

 

Total

 

 

 

($ thousands)

 

Three months ended June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

412,810

 

128,713

 

81,610

 

19,324

 

—

 

642,457

 

Adjusted EBITDA

 

151,561

 

60,289

 

18,126

 

1,227

 

(8,912

)

222,291

 

Net income/(loss)

 

91,024

 

34,600

 

7,968

 

(1,959

)

(14,127

)

117,506

 

Total assets

 

1,182,652

 

511,095

 

315,252

 

145,846

 

63,638

 

2,218,483

 

Capital expenditures (2)

 

9,341

 

13,476

 

12,671

 

1,279

 

—

 

36,767

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended June 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

387,379

 

126,292

 

59,230

 

18,294

 

335

 

591,530

 

Adjusted EBITDA

 

99,979

 

35,257

 

10,710

 

(188

)

(6,570

)

139,188

 

Net income/(loss)

 

54,217

 

24,755

 

3,989

 

3,845

 

(27,484

)

59,322

 

Total assets

 

1,287,848

 

500,502

 

259,963

 

145,454

 

115,076

 

2,308,843

 

Capital expenditures (2)

 

17,838

 

7,973

 

4,623

 

381

 

160

 

30,975

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

794,182

 

251,437

 

155,919

 

32,797

 

—

 

1,234,335

 

Adjusted EBITDA

 

271,709

 

116,401

 

35,291

 

(81

)

(17,965

)

405,355

 

Net income/(loss)

 

159,758

 

66,919

 

15,523

 

(5,033

)

(22,841

)

214,326

 

Total assets

 

1,182,652

 

511,095

 

315,252

 

145,846

 

63,638

 

2,218,483

 

Capital expenditures (2)

 

15,431

 

28,200

 

20,318

 

2,478

 

3

 

66,430

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended June 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenues

 

387,379

 

260,501

 

112,655

 

38,188

 

960

 

799,683

 

Adjusted EBITDA

 

99,979

 

99,701

 

15,501

 

983

 

(74,336

)

141,828

 

Net income/(loss)

 

54,217

 

76,843

 

2,748

 

(6,176

)

(91,981

)

35,651

 

Total assets

 

1,287,848

 

500,502

 

259,963

 

145,454

 

115,076

 

2,308,843

 

Capital expenditures (2)

 

17,838

 

15,628

 

13,191

 

559

 

430

 

47,646

 

2022
Total

(1)         On March 29, 2018, Coronado acquired the Curragh Mining business from Wesfarmers Limited.  Curragh is a separate reportable segment due to having separate management, location, revenues

$
546,485
$
328,172
$
—
$
874,657
Adjusted EBITDA
88,035
145,890
(10,349)
223,576
Net income (loss)
59,529
95,610
(4,564)
150,575
Total
assets and operations.  Curragh is located in central Queensland, Australia and the reportable segment produces a wide variety of metallurgical coal.

(2)

1,405,333
988,728
410,349
2,804,410
Capital expenditures includes financing fees incurred through other financial liabilities for the purchase
17,289
31,174
103
48,566
Three months ended September 30, 2021
Total
revenues
$
342,372
$
231,219
$
—
$
573,591
Adjusted EBITDA
67,383
88,441
(8,084)
147,740
Net income (loss)
39,868
54,444
(12,324)
81,988
Total
assets
1,155,082
862,961
183,863
2,201,906
Capital expenditures
7,972
9,436
182
17,590
Nine months ended September 30, 2022
Total
revenues
$
1,730,172
$
1,124,314
$
—
$
2,854,486
Adjusted EBITDA
523,319
578,183
(28,579)
1,072,923
Net income (loss)
337,582
399,723
(24,837)
712,468
Total
assets
1,405,333
988,728
410,349
2,804,410
Capital expenditures
64,005
75,595
433
140,033
Nine months ended September 30, 2021
Total
revenues
$
832,098
$
541,860
$
—
$
1,373,958
Adjusted EBITDA
30,445
164,404
(21,408)
173,441
Net (loss) income
(65,970)
83,157
(31,256)
(14,069)
Total
assets
1,155,082
862,961
183,863
2,201,906
Capital expenditures
28,186
40,061
1,650
69,897
The reconciliations
of certain equipment.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The reconciliation of Adjusted EBITDA to net income attributable to the

Company for the three and sixnine months
ended JuneSeptember 30, 20192022 and 20182021 are as follows:

 

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

 

2019

 

2018

 

2019

 

2018

 

 

 

(US$ thousands)

 

(US$ thousands)

 

Net income

 

$

117,506

 

59,322

 

$

214,326

 

35,651

 

Depreciation, depletion and amortization

 

45,508

 

42,594

 

85,279

 

64,402

 

Interest expense (net of income)

 

9,087

 

18,987

 

17,264

 

25,488

 

Other foreign exchange (gains) losses

 

3,157

 

5,290

 

(557

)

6,848

 

Loss on retirement of debt

 

—

 

—

 

—

 

3,905

 

Income tax expense

 

47,033

 

12,995

 

89,043

 

5,534

 

Consolidated Adjusted EBITDA

 

$

222,291

 

139,188

 

$

405,355

 

141,828

 

Three months ended
Nine months ended
September 30,
September 30,
(in US$ thousands)
2022
2021
2022
2021
Net income (loss)
$
150,575
$
81,988
$
712,468
$
(14,069)
Depreciation, depletion and amortization
37,508
38,461
126,901
132,754
Interest expense (net of income)
17,220
18,251
52,034
49,982
Other foreign exchange (gains) losses
(1)
(31,917)
2,487
(55,064)
4,376
Loss on extinguishment of debt
—
—
—
5,744
Income tax expense (benefit)
51,423
9,096
235,391
(1,788)
Restructuring costs
—
—
—
2,300
(Gains) losses on idled assets held for sale
(2)
(1,221)
(113)
621
2,216
(Decrease) increase in provision for discounting
and credit losses
(12)
(2,430)
572
(8,074)
Consolidated Adjusted EBITDA
$
223,576
$
147,740
$
1,072,923
$
173,441
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
11
(1)
The balance
primarily relates
to foreign
exchange gains
and losses
recognized in
the translation
of short-term
inter-entity balances
in
certain entities within the group that
are denominated in currencies other than
their respective functional currencies. These
gains and losses
are included in “Other, net” on the unaudited Consolidated Statement
of Operations and Comprehensive Income.
(2)
These losses relate to idled non-core assets
that the Company has classified as held
for sale with the view that
these will be sold within
the next twelve months.
The
reconciliations
of
capital
expenditures
per
the
Company’s
segment
information
to
capital
expenditures
disclosed
on
the
unaudited
Condensed
Consolidated
Statements
of
Cash
Flows
for
the
nine
months
ended
September 30, 2022 and 2021 are as follows:
Nine months ended September 30,
(in US$ thousands)
2022
2021
Capital expenditures per Condensed Consolidated Statements
of Cash
Flows
$
141,928
$
75,897
Accruals for capital expenditures
5,580
—
Payment for capital acquired in prior periods
(7,475)
(6,000)
Capital expenditures per segment detail
$
140,033
$
69,897
Disaggregation of Revenue

The Company disaggregates the revenue
from contracts with customers by
major product group for each of
the
Company’s
reportable
segments,
as
the company
Company
believes
it
best
depicts
the
nature,
amount,
timing
and
uncertainty of revenues and cash flows.
All revenue is recognized at a point in time.

 

 

Three months ended June 30, 2019

 

 

 

Curragh

 

Buchanan

 

Logan

 

Greenbrier

 

Other and
Corporate

 

Total

 

 

 

(US $ thousands)

 

Product Groups

 

 

 

 

 

 

 

 

 

 

 

 

 

Metallurgical coal

 

$

377,016

 

125,837

 

68,053

 

17,766

 

—

 

588,672

 

Thermal coal

 

26,687

 

2,827

 

12,058

 

446

 

—

 

42,018

 

Total coal revenue

 

403,703

 

128,664

 

80,111

 

18,212

 

—

 

630,690

 

Other(1)

 

9,107

 

49

 

1,499

 

1,112

 

—

 

11,767

 

Total

 

$

412,810

 

128,713

 

81,610

 

19,324

 

—

 

642,457

 

 

 

Three months ended June 30, 2018

 

 

 

Curragh

 

Buchanan

 

Logan

 

Greenbrier

 

Other and
Corporate

 

Total

 

 

 

(US$ thousands)

 

Product Groups

 

 

 

 

 

 

 

 

 

 

 

 

 

Metallurgical coal

 

$

349,486

 

122,771

 

47,443

 

17,427

 

—

 

537,127

 

Thermal coal

 

25,048

 

3,521

 

11,787

 

27

 

—

 

40,383

 

Total coal revenue

 

374,534

 

126,292

 

59,230

 

17,454

 

—

 

577,510

 

Other(1)

 

12,845

 

—

 

—

 

840

 

335

 

14,020

 

Total

 

$

387,379

 

126,292

 

59,230

 

18,294

 

335

 

591,530

 

 

 

Six months ended June 30, 2019

 

 

 

Curragh

 

Buchanan

 

Logan

 

Greenbrier

 

Other and
Corporate

 

Total

 

 

 

(US $ thousands)

 

Product Groups

 

 

 

 

 

 

 

 

 

 

 

 

 

Metallurgical coal

 

$

727,964

 

245,047

 

131,421

 

31,067

 

—

 

1,135,499

 

Thermal coal

 

47,978

 

6,306

 

22,208

 

496

 

—

 

76,988

 

Total coal revenue

 

775,942

 

251,353

 

153,629

 

31,563

 

—

 

1,212,487

 

Other(1)

 

18,240

 

84

 

2,290

 

1,234

 

—

 

21,848

 

Total

 

$

794,182

 

251,437

 

155,919

 

32,797

 

—

 

1,234,335

 

 

 

Six months ended June 30, 2018

 

 

 

Curragh

 

Buchanan

 

Logan

 

Greenbrier

 

Other and
Corporate

 

Total

 

 

 

(US$ thousands)

 

Product Groups

 

 

 

 

 

 

 

 

 

 

 

 

 

Metallurgical coal

 

$

349,486

 

253,335

 

93,201

 

35,982

 

—

 

732,004

 

Thermal coal

 

25,048

 

7,127

 

19,454

 

713

 

—

 

52,342

 

Total coal revenue

 

374,534

 

260,462

 

112,655

 

36,695

 

—

 

784,346

 

Other(1)

 

12,845

 

39

 

—

 

1,493

 

960

 

15,337

 

Total

 

$

387,379

 

260,501

 

112,655

 

38,188

 

960

 

799,683

 

Three months ended September 30, 2022

(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
518,010
$
309,609
$
827,619
Thermal coal
19,246
16,844
36,090
Total
coal revenue
537,256
326,453
863,709
Other
(1)
9,229
1,719
10,948
Total
$
546,485
$
328,172
$
874,657
Three months ended September 30, 2021
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
306,033
$
228,561
$
534,594
Thermal coal
26,525
2,168
28,693
Total
coal revenue
332,558
230,729
563,287
Other
(1)
9,814
490
10,304
Total
$
342,372
$
231,219
$
573,591
Nine months ended September 30, 2022
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
1,615,364
$
1,098,186
$
2,713,550
Thermal coal
86,537
21,247
107,784
Total
coal revenue
1,701,901
1,119,433
2,821,334
Other
(1)
28,271
4,881
33,152
Total
$
1,730,172
$
1,124,314
$
2,854,486
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
12
Nine months ended September 30, 2021
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
734,143
$
534,017
$
1,268,160
Thermal coal
70,614
5,479
76,093
Total
coal revenue
804,757
539,496
1,344,253
Other
(1)
27,341
2,364
29,705
Total
$
832,098
$
541,860
$
1,373,958
(1) Other revenue for Curraghthe Australian segment includes
the amortization of the Stanwell non-market coal
supply contract obligation liability.

4. Dividends
On February
24,
2022, the
Company’s
Board
of
Directors
declared
an unfranked
ordinary
dividend
of
$
150.9
million, or
9.0
cents per
CDI ($
0.90
per share
of common
stock). The
dividend had
a record
date of
March 18,
2022
and was paid on
April 8, 2022
.
On May 9, 2022,
the Company’s Board of Directors declared a special
unfranked dividend of $
99.5
million, or
5.9
cents per CDI ($
0.59
per share of common stock), reflecting
the unaccepted portion of the
offer to purchase the
Notes made in connection with the dividend declared on February 24, 2022, and a special unfranked dividend of
$
100.6
million, or
6.0
cents per CDI ($
0.6
per share of common
stock). The dividend had
a record date of
May
31, 2022
and was paid on
June 21, 2022
.
On August
8, 2022,
the Company’s
Board of
Directors
declared a
total unfranked
ordinary dividend
of $
125.7
million, or
7.5
cents per
CDI ($
0.75
per share
of common
stock), comprising
$
100.6
million of
the unaccepted
portion
of the
offer
to
purchase
the
Notes
made
in
connection
with
the
special
dividends
declared
on
May
9,
2022,
plus
an
additional
$
25.2
million.
The
dividend
had
a
record
date
of
August 30, 2022
and
was
paid
on
September 20, 2022
.
During the nine months ended September 30, 2022, the Company paid
a total of $
473.9
million in relation to the
above
dividends
to
stockholders
and
CDI
holders
on
the
ASX,
net
of
$
2.8
million
foreign
exchange
gain
on
payment of dividends to certain CDI holders that elected to
be paid in Australian dollars.
5.
Inventories
(in US$ thousands)
September 30,
2022
December 31,
2021
Raw coal
$
12,998
$
17,334
Saleable coal
34,200
42,006
Total
coal inventories
47,198
59,340
Supplies inventory
59,773
59,582
Total
inventories
$
106,971
$
118,922
Coal inventories measured
at its net
realizable value
were $
2.1
million
and $
2.2
million at September
30, 2022
and December
31, 2021,
respectively, and relates to
coal designated
for deliveries under
the Stanwell
non-market
coal supply agreement.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)

5.Expenses

Other, net

 

 

Three months ended
June 30,

 

Six months ended
June 30,

 

 

 

2019

 

2018

 

2019

 

2018

 

 

 

(US$ thousands)

 

(US$ thousands)

 

Loss on foreign exchange swap

 

$

—

 

—

 

$

—

 

(15,695

)

Other foreign exchange (losses) gains

 

(3,157

)

(5,290

)

557

 

(6,848

)

Other (expenses) income

 

168

 

2,899

 

485

 

(4,303

)

Total Other, net

 

$

(2,989

)

(2,391

)

$

1,042

 

(26,846

)

Coronado Global Resources Inc.
Form 10-Q September 30, 2022
13
6.Inventories

(US$ thousands)

 

June 30, 2019

 

December 31,
2018

 

Raw coal

 

$

54,407

 

$

20,106

 

Saleable coal

 

23,051

 

26,374

 

Total coal inventories

 

77,458

 

46,480

 

Supplies inventory

 

51,966

 

48,623

 

Total inventories

 

$

129,424

 

$

95,103

 

7.

Property, Plant and
Equipment

(US$ thousands)

 

June 30, 2019

 

December 31,
2018

 

Land

 

$

27,035

 

$

26,845

 

Buildings and improvements

 

83,831

 

89,027

 

Plant, machinery, mining equipment and transportation vehicles

 

794,619

 

765,432

 

Mineral rights and reserves

 

464,680

 

464,680

 

Office and computer equipment

 

3,752

 

3,700

 

Mine development

 

487,156

 

479,152

 

Asset retirement obligation asset

 

83,894

 

80,993

 

Construction in process

 

81,423

 

43,691

 

 

 

2,026,390

 

1,953,520

 

Less accumulated depreciation, depletion and amortization

 

423,303

 

334,962

 

Net property, plant and equipment

 

$

1,603,087

 

$

1,618,558

 

8.Goodwill

(in US$ thousands)
September 30,
2022
December 31,
2021
Land
$
26,661
$
27,853
Buildings and Other Intangible Assets

(a)Acquired Intangible Assets

 

 

June 30, 2019

 

(US$ thousands)

 

Weighted average
amortization period
(years)

 

Gross carrying
amount

 

Accumulated
amortization

 

Net carrying
amount

 

Intangible assets:

 

 

 

 

 

 

 

 

 

Amortizing intangible assets:

 

 

 

 

 

 

 

 

 

Mining permits - Greenbrier

 

14

 

$

1,500

 

800

 

700

 

Mining permits - Logan

 

15

 

1,642

 

717

 

925

 

Mining permits - Buchanan

 

28

 

4,000

 

404

 

3,596

 

Total intangible assets

 

 

 

$

7,142

 

1,921

 

5,221

 

 

 

December 31, 2018

 

(US$ thousands)

 

Weighted average
amortization period
(years)

 

Gross carrying
amount

 

Accumulated
amortization

 

Net carrying
amount

 

Intangible assets:

 

 

 

 

 

 

 

 

 

Amortizing intangible assets:

 

 

 

 

 

 

 

 

 

Mining permits - Greenbrier

 

14

 

$

1,500

 

760

 

740

 

Mining permits - Logan

 

15

 

1,642

 

638

 

1,004

 

Mining permits - Buchanan

 

28

 

4,000

 

342

 

3,658

 

Total intangible assets

 

 

 

$

7,142

 

1,740

 

5,402

 

Amortization expense is charged using the straight-line method over the useful lives of the respective intangible asset.  The aggregate amount ofimprovements

87,926
88,079
Plant, machinery, mining
equipment and transportation vehicles
976,633
963,272
Mineral rights and reserves
374,326
374,326
Office and computer equipment
8,953
8,718
Mine development
547,445
566,201
Asset retirement obligation asset
67,378
75,215
Construction in process
59,035
42,055
2,148,357
2,145,719
Less accumulated depreciation, depletion and amortization expense for amortizing intangible assets for the three months ended June 30, 2019
814,224
748,356
Net property, plant
and 2018 was $0.1 million and $0.1 million, respectively. The aggregate amount of amortization expense for amortizing intangible assets for the six months ended June 30, 2019 and 2018 was $0.2 million and $0.2 million, respectively.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(b)Goodwill

In connection with the Buchanan acquisition on March 31, 2016, the Company recorded goodwill in the amount of $28.0 million.  The balance of goodwill as at both June 30, 2019 and December 31, 2018 was $28.0 million.

9.equipment

$
1,334,133
$
1,397,363
7.
Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the
following:

(US$ thousands)

 

June 30, 2019

 

December 31,
2018

 

Wages and employee benefits

 

$

64,520

 

$

50,819

 

Taxes other than income taxes

 

8,221

 

6,512

 

Accrued royalties

 

50,648

 

49,129

 

Accrued freight costs

 

29,118

 

26,509

 

Accrued mining fees

 

52,187

 

45,615

 

Cash flow hedge derivative liability

 

—

 

5,311

 

Acquisition related accruals

 

30,186

 

30,349

 

Other liabilities

 

17,471

 

29,252

 

Total accrued expenses and other current liabilities

 

$

252,351

 

$

243,496

 

Included within acquisition

(in US$ thousands)
September 30,
2022
December 31,
2021
Wages and employee benefits
$
42,038
$
41,187
Taxes
other than income taxes
8,825
6,246
Accrued royalties
165,636
70,237
Accrued freight costs
36,962
27,754
Accrued mining fees
73,712
65,835
Acquisition related accruals
27,959
31,201
Other liabilities
50,972
28,482
Total
accrued expenses and other current liabilities
$
406,104
$
270,942
Acquisition related accruals is an amount outstanding
accrual for the estimated
stamp duty payable on the
Curragh acquisition of $30.2 million. This amount was outstanding as $
28.0
million
(A$
43.0
million). Refer to Note 14. “Contingencies” for further details.
8.
Interest Bearing Liabilities
The following is a summary of interest-bearing liabilities
at JuneSeptember 30, 2019 and 2022:
(in US$ thousands)
September 30, 2022
December 31, 2018 pending financial assessment to be made by2021
Weighted Average
Interest Rate at
September 30, 2022
Final
Maturity
10.75
% Senior Secured Notes
$
312,741
$
315,000
12.15
%
(2)
2026
ABL Facility
—
—
2024
Discount and debt issuance costs
(1)
(12,812)
(14,831)
Total
interest bearing liabilities
$
299,929
$
300,169
(1)
Debt issuance costs incurred on the Office of State Revenue in Queensland, Australia.

10.Leases

On January 1, 2019, the Company adopted ASC 842, Leases. Changes to the Company’s accounting policy as a result of adoption are discussed below.

From time to time, the Company enters into mining services contracts which may include embedded leases of mining equipment and other contractual agreements to lease mining equipment and facilities. Based upon the Company’s assessment establishment

of the terms of a specific lease agreement, the Company classifies a lease as either finance or operating.

(a)Finance Leases

ROU assets related to finance leases are presented in property, “Property, plant and equipment, net”ABL Facility has been included within

"Other non-current assets" on the
unaudited Condensed Consolidated Balance Sheet. Lease liabilities related to finance leases are presented in “Lease Liabilities” (current) and “Lease Liabilities” (non-current) on
(2)
Represents the unaudited Condensed Consolidated Balance Sheet.

Finance lease ROU assets effective interest rate.

Senior Secured Notes
As of
September 30,
2022, the
Company’s
aggregate principal
amount of
the
10.750
% Senior
Secured Notes
due
2026,
or
the
Notes,
outstanding
was
$
312.7
million.
The
Notes
mature
on
May 15, 2026
and lease liabilities
are recognized at the commencement date based on the present value
senior
secured obligations of the future lease payments over Company.
The
terms
of
the lease term.
Notes
are
governed
by
an
indenture,
dated
as
of
May
12,
2021,
or
the
Indenture,
among
Coronado Finance
Pty Ltd,
an Australian
proprietary
company,
as issuer,
Coronado,
as parent
guarantor,
the
other guarantors
party thereto
and Wilmington
Trust,
National Association,
as trustee.
The discount rate used to determine the present value Indenture
contains
Tableof the lease payments is the rate implicit in the lease unless that rate cannot be readily determined, in which case, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

(b)Operating Leases

ROU assets related to operating leases are presented as “Right of use asset — operating leases, net”, on the unaudited Condensed Consolidated Balance Sheet. Lease liabilities related to operating leases that are subject to the ASC 842 measurement requirements such as operating leases with lease terms greater than twelve months are presented in “Lease Liabilities” (current) and “Lease Liabilities” (non-current) on the unaudited Condensed Consolidated Balance Sheet.

Operating lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of the future lease payments over the lease term. The discount rate used to determine the present value of the lease payments is the rate implicit in the lease unless that rate cannot be readily determined, in which case, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Operating lease ROU assets may also include any cumulative prepaid or accrued rent when the lease payments are uneven throughout the lease term. The ROU assets and lease liabilities may also include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The ROU asset includes any lease payments made and lease incentives received prior to the commencement date. The Company has lease arrangements with lease and non-lease components which are accounted for separately. Non-lease components of the lease payments are expensed as incurred and are not included in determining the present value. As at June 30, 2019 the unaudited Condensed Consolidated Balance Sheet included $41.5 million of operating lease liabilities relating to equipment embedded within mining service contracts.

Contents

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)

Information related

Coronado Global Resources Inc.
Form 10-Q September 30, 2022
14
customary
covenants
for
high
yield
bonds,
including,
but
not
limited
to,
limitations
on
investments,
liens,
indebtedness, asset
sales, transactions
with affiliates
and restricted
payments, including
payment of
dividends
on capital stock. As of
September 30, 2022, the Company was in
compliance with all applicable covenants under
the Indenture.
For the
nine months ended
September 30, 2022,
in connection with
the dividends paid
in the
period, the Company
offered to Company’s right-of use assetspurchase up to a total of $
225.8
million aggregate principal amount of the Notes pursuant to the terms
of
the
Indenture.
For
the
nine
months
ended
September
30,
2022,
the
Company
purchased
an
aggregate
principal amount, for
accepted offers, of $
2.3
million at a
price equal to
104
% of the
principal amount of
the Notes,
plus accrued and related lease liabilities are as follows:

(US$ thousands)

 

Three month ended
June 30,
2019

 

Six months ended
June 30, 2019

 

Operating lease costs

 

$

6,378

 

12,861

 

Cash paid for operating lease liabilities

 

4,049

 

11,073

 

 

 

 

 

 

 

Finance lease costs:

 

 

 

 

 

Amortization of right of use assets

 

628

 

1,221

 

Interest on lease liabilities

 

52

 

108

 

Total finance lease costs

 

$

680

 

1,329

 

(US$ thousands)

 

June 30,
2019

 

December 31, 2018

 

Operating leases:

 

 

 

 

 

Operating lease right-of-use assets

 

$

64,343

 

—

 

 

 

 

 

 

 

Finance leases:

 

 

 

 

 

Property and equipment

 

7,881

 

7,074

 

Accumulated depreciation

 

(4,135

)

(2,914

)

Property and equipment, net

 

3,746

 

4,160

 

 

 

 

 

 

 

Current operating lease obligations

 

26,863

 

—

 

Operating lease liabilities, less current portion

 

51,064

 

—

 

Total operating lease liabilities

 

77,927

 

—

 

 

 

 

 

 

 

Current finance lease obligations

 

1,265

 

1,308

 

Finance lease liabilities, less current portion

 

1,838

 

2,481

 

Total Finance lease liabilities

 

3,103

 

3,789

 

 

 

 

 

 

 

Total Lease liability

 

$

81,030

 

3,789

 

June 30,
2019

Weighted Average Remaining Lease Term (Years)

Weighted average remaining lease term — finance leases

1.18

Weighted average remaining lease term — operating leases

3.24

Weighted Average Discount Rate

Weighted discount rate — finance lease

6.25

%

Weighted discount rate — operating lease

7.94

%

unpaid interest on the Notes to, but not

including, the date of redemption.
The Company’s operating leases have remaining lease termscarrying
value of 1 year to 5 years, some of which include options to extend the terms deemed reasonable to exercise. Maturities of lease liabilities are as follows:

(US$ thousands)

 

Operating lease

 

Finance lease

 

Year ending December 31,

 

 

 

 

 

2019

 

$

16,013

 

712

 

2020

 

30,436

 

2,568

 

2021

 

22,362

 

—

 

2022

 

8,434

 

—

 

2023

 

8,427

 

—

 

Thereafter

 

2,103

 

—

 

Total lease payments

 

87,775

 

3,280

 

Less imputed interest

 

(9,848

)

(177

)

Total lease liability

 

$

77,927

 

3,103

 

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11.Income Taxes

The Company is a corporation for U.S. federal and state income tax purposes. The Company’s accounting predecessor, Coronado Group LLC, was and is treated

debt issuance
costs, recorded
as a flow-through entity
direct deduction
from the
face amount
of the
Notes,
were $
12.8
million and $
14.8
million at September 30, 2022 and December 31, 2021, respectively.
ABL Facility
On May 12, 2021, the Company entered into a senior secured asset-based revolving credit agreement providing
for
a
multi-currency
asset-based-loan
facility,
or
ABL
Facility,
in
an
initial
principal
amount
of
$
100.0
million,
including a $
30.0
million sublimit for
the issuance of
letters of credit
and $
5.0
million for U.S. federal income tax purposes and as such, has generally not beenswingline
loans, at any
time outstanding, subject to U.S. federal income tax borrowing base availability.
The ABL Facility matures on
May 12, 2024
.
Borrowings
under
the
ABL
Facility
bear
interest
at
a
rate equal
to
a
BBSY
rate
plus an
applicable
margin.
In
addition to paying
interest on the
outstanding borrowings
under the entity level. Accordingly, unless otherwise specified, the historical results of operations and other financial information set forth in the Company’s registration statement on Form 10, as amended, filed with the SEC and ASX on June 28, 2019, for periods prior to the incorporation of ABL
Facility,
the Company is
also required
to pay a fee in respect of unutilized commitments, on amounts available to be drawn under outstanding letters of
credit and certain administrative fees.
As at
September
30,
2022,
no
amounts
were
drawn
and
no
letters
of credit
were
outstanding
under
the
ABL
Facility.
At September
30, 2022,
the Reorganization Transaction do not include any provision for U.S. income taxes.

Company

was in
compliance with
all applicable
covenants under
the ABL
Facility.
The carrying value of debt
issuance costs, recorded as “Other non-current assets” in
the unaudited Consolidated
Balance Sheets, were $
2.9
million and $
4.3
million at September 30,
2022 and December 31, 2021,
respectively.
9.
Income Taxes
For the three and sixnine months ended June
September 30, 20192022 and 2018,
2021, the Company estimated
its annual effective
tax rate
and applied this effective tax rate to its year-to-date pretax income at the end of the interim reporting period. The
tax effect
effects
of
unusual
or
infrequently
occurring
items,
including
effects
of
changes
in
tax
laws
or
rates
and
changes in judgment about the
realizability of deferred tax assets, are
reported in the interim period
in which they
occur. The Company’s 20192022 estimated annual effective tax rate including is
24.8
%, which has been favorably impacted by
mine depletion deductions in
the United States
and includes a
discrete items, is 29.4%. The Company had income tax expense of $47.0
$
0.6
million.
The Company
had an income
tax expense of
$
235.4
million and $89.0 based on an
income before tax
of $
947.9
million for the three and six
nine months
ended September 30, 2022.
Income tax
benefit of
$
1.8
million for
the nine
months ended June
September 30, 2019 respectively.

Income tax expense of $13.0 million for the three months ended June 30, 2018 and $5.5 million for the six months ended June 30, 2018 related solely to the Company’s Australian Operations and

2021 was
calculated based
on an
estimated annual effective tax rate of
11.3
% for the period, before any discrete items, of 13%.

The Company’s U.S. entities had no income tax expense for the three and six months ended June 30, 2018 because prior to September 19, 2018 they were treated as partnerships for U.S. income tax purposes.

12.Interest Bearing Liabilities

period.

The Company has utilizes the
“more likely than not”
standard in recognizing
a Multicurrency Revolving Syndicated Facility Agreement, or SFA, datedtax benefit in
its financial statements.
For the nine months
ended September 15, 2018, comprising of Facility A ($350 million loan facility) and Facility B (A$370 million bank guarantee facility). The SFA provides that30,
2022, the Company may borrow funds from Facility A
had
no
unrecognized tax benefits.
If accrual for
interest
or
penalties
is
required,
it
is
the
Company’s
policy
to
include
these
as
a
component
of
income
tax
expense.
The Company is
subject to taxation
in the
U.S. and its
various states, as
well as Australia
and its
various localities.
In the
U.S.
and
Australia, the
first tax
return
was
lodged for
the
year
ended December
31,
2018. In
the U.S.,
companies are
subject to
open tax
audits for
a period
of seven
years at
the federal
level and
five years
at the
state level.
In Australia,
companies
are subject
to open
tax audits
for a
period of one, two, three or six months, each referred to as a Term. The interest rate is set at
four years
from the commencement of each Term. At the end of each Term, the Company may elect to repay the loan or extend any loan amount outstanding for a further period of one, two, three or six months. The Term of the loan cannot extend beyond the termination
date of
assessment.
The Company assessed the SFA, being February 15, 2022.

Duringneed for valuation allowances by evaluating future taxable income, available for tax

strategies and the period January 1, 2019 to June 30, 2019reversal of temporary tax differences.
At December 31,
2021, the Company borrowed $104.0 Australian
Operations had
tax losses carried
forward of $
25.4
million under the SFA to fund the dividend payment made on March 29, 2019 (tax effected),
which are
indefinite lived
and included
in deferred
tax assets.
It is anticipated
that these
tax losses
will be fully
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)

14.Deferred Consideration Liability

On August 14, 2018

Coronado Global Resources Inc.
Form 10-Q September 30, 2022
15
utilized in
2022 and
both the Company completed the purchase
Australian Operations
and U.S.
Operations would
be in
tax payable
positions. In
addition, a company, which is not part of the Stanwell Reserved Area, or the SRA, adjacent to the current Curragh mining tenements. This area was acquired onAustralian tax consolidated group, had tax losses carried forward of
$
7.7
million (tax effected) for which a deferred consideration basis and on acquisition the Company recognized a “Right-to-mine-asset” and a corresponding deferred consideration liability of $155.2 million, calculated using a pre-tax discount rate of 13% representing fair value of the arrangements and the date of acquisition. The deferred consideration liability will reflect passage of time changes by way of an annual accretion at the pre-tax discount rate of 13% while the liability will decrease as domestic coal is supplied to Stanwell from the SRA. The accretion of deferred consideration is recognized in “Interest expense, net” in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income.

 

(US$ thousands)

 

June 30, 2019

 

December 31,
2018

 

Stanwell Reserved Area deferred consideration

 

$

164,148

 

155,332

 

 

 

$

164,148

 

155,332

 

15.full valuation allowance

has been recognized.
10.
Earnings per Share

Basic earnings per
share of common
stock is computed
by dividing net
income attributable
to the Company
for
the period,
by the
weighted-average
number of
shares
of common
stock outstanding
during the
same period.
Diluted earnings per share of common stock is computed
by dividing net income attributable to the Company
by
the weighted-average number
of shares
of common
stock outstanding adjusted
to give
effect to potentially
dilutive
securities.  There were no traded shares of common stock outstanding prior to October 23, 2018, therefore no earnings per share information has been presented for any period prior to that date.

Basic and diluted earnings per share was calculated as
follows (in thousands, except per share data):

(US$ thousands, except per share data)

 

Three months
ended June 30,
2019

 

Six months
ended June 30,
2019

 

Numerator:

 

 

 

 

 

Net Income

 

$

117,506

 

$

214,326

 

Less: Net income attributable to Non-controlling interest

 

(4

)

(4

)

Net Income attributable to Company stockholders

 

$

117,510

 

$

214,330

 

Denominator:

 

 

 

 

 

Weighted-average shares of common stock outstanding

 

96,652

 

96,652

 

Effects of dilutive shares

 

3

 

4

 

Weighted average diluted shares of common stock outstanding

 

96,655

 

96,656

 

Earnings Per Share (US$):

 

 

 

 

 

Basic

 

$

1.22

 

$

2.22

 

Dilutive

 

$

1.22

 

$

2.22

 

16.Derivatives and

Three months ended September 30,
Nine months ended September 30,
(in US$ thousands, except per share data)
2022
2021
2022
2021
Numerator:
Net income (loss)
$
150,575
$
81,988
$
712,468
$
(14,069)
Less:
Net loss attributable to Non-
controlling interest
—
—
—
(2)
Net income (loss) attributable to Company
stockholders
$
150,575
$
81,988
$
712,468
$
(14,067)
Denominator (in thousands):
Weighted-average shares of common stock
outstanding
167,645
167,645
167,645
153,078
Effects of dilutive shares
342
171
185
—
Weighted average diluted shares of
common stock outstanding
167,987
167,816
167,830
153,078
Earnings (Loss) Per Share (US$):
Basic
0.90
0.49
4.25
(0.09)
Dilutive
0.90
0.49
4.25
(0.09)
11.
Fair Value Measurement

(a)Derivatives

The Company may use derivative financial instruments to manage its risk in the normal course of operations, including foreign currency risks, price risk related to forecast purchase of raw materials (such as gas or diesel) and interest rate risk. Derivatives are exclusively used for cashflow hedges purposes and hedging for speculative purposes is strictly prohibited under the Treasury Risk Management Policy approved by our Board of Directors.

In 2018, the Company entered into forward derivative contracts with an aggregate notional amount of $44.6 million to hedge its exposure to diesel fuel prices for diesel fuel that is used in the operations at Curragh. The aggregated notional amount of these derivative contracts at June 30, 2019 was $24.0 million. During the three months ended June 30, 2019 the Company entered into additional derivative contracts, with a notional amount of $59.1 million, to hedge its exposure to diesel fuel prices in relation to Curragh consumption of diesel fuel in 2020. The aggregate notional amount for all outstanding derivative contracts was $83.1 million at June 30, 2019.  The forward diesel fuel contracts were designated as cash flow hedges.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The fair
value of derivatives reflected in the accompanying unaudited Condensed Consolidated Balance Sheet are set forth in the table below:

 

 

 

 

June 30, 2019

 

December 31, 2018

 

(US$ thousands)

 

Classification

 

Derivative
asset

 

Derivative
liability

 

Derivative
asset

 

Derivative
liability

 

 

 

Other current liabilities

 

—

 

—

 

—

 

5,402

 

Forward fuel contracts

 

Other current asset

 

2,317

 

—

 

—

 

—

 

 

 

Other non-current assets

 

1,308

 

—

 

—

 

—

 

 

 

 

 

3,625

 

—

 

—

 

5,402

 

The forward fuel contracts were designated as cash flow hedges. The following table presents our details of these outstanding hedge contracts:

 

 

June 30, 2019

 

December 31, 2018

 

(in thousands)

 

Notional
amount

 

Unit of
measure

 

Varying
maturity dates

 

Notional
amount

 

Unit of
measure

 

Varying
maturity dates

 

Designated forward fuel contracts

 

176,342

 

Liters

 

July 2019 — December 2020

 

93,420

 

Liters

 

January 2019 — December 2019

 

Other derivatives

During the six months ended June 30, 2018 the Company entered into a foreign exchange swap contract to hedge against the exposure fluctuations in the Australian Dollar against the U.S. Dollar on the purchase price of Curragh between the Agreement date and the completion date.  The Company elected not to formally designate the swaps as cash flow hedges.  As such, the Company accounted for the foreign exchange swaps as an economic hedge and recorded at fair value at the end of each reporting period.  Pursuant with ASC 815, the foreign exchange swaps were initially recorded at fair value and all subsequent changes were recorded to “Other, net” (see Note 5 — “Other, net”) within the unaudited Condensed Consolidated Statements of Operations.  As of June 30, 2019, the Company did not have any foreign exchange swaps outstanding.

(b)Fair Value of Financial Instruments

The fair value of

a financial
instrument is
the amount
that will
be received
to sell
an asset
or paid
to transfer
a
liability in
an orderly transaction
between market participants
at the
measurement date. The
fair values
of financial
instruments involve uncertainty and cannot be determined with
precision.

The Company utilizes valuation
techniques that maximize
the use of observable inputs
and minimize the use of
unobservable
inputs
to
the
extent
possible.
The
Company
determines
fair
value
based
on
assumptions
that
market participants would use in pricing
an asset or liability in the
market.
When considering market participant
assumptions in fair
value measurements, the
following fair value
hierarchy distinguishes between observable
and
unobservable inputs, which are categorized in one of the following
levels:

Level
1 Inputs:
Unadjusted
quoted
prices
in
active
markets
for identical
assets
or liabilities
accessible
to
the
reporting entity at the measurement date.

Level 2 Inputs:
Other than quoted prices that are observable for the
asset or liability,
either directly or indirectly,
for substantially the full term of the asset or liability.

Level
3
Inputs:
Unobservable
inputs
for
the
asset
or
liability
used
to
measure
fair
value
to
the
extent
that
observable inputs
are not
available, thereby
allowing for
situations in
which there
is little, if
any,
market activity
for the asset or liability at measurement date.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
16
Financial Instruments Measured on a Recurring Basis

As
of June 
September
30, 2019, the Company has the following liabilities that are
2022,
there
were
no
financial
instruments
required
to
be
measured
at
fair
value
on
a
recurring basis:

·                  Forward commodity contracts:  valued based on a valuation that is corroborated by the use of market-based pricing (Level 2)

·                  Contingent royalty:  fair value is determined using the Black-Scholes option pricing formula (Level 3)

·                  VSM:  fair value is determined using the projected cash flow analysis (Level 3)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

basis.

Other Financial Instruments
The following tables set forthmethods
and assumptions
are used to
estimate the hierarchyfair
value of the Company’s net other
financial liabilities positions for which fair value is measured on a recurring basis instruments
as of June
September 30, 2019:

(US$ thousands)

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Forward commodity contracts

 

$

—

 

3,625

 

—

 

3,625

 

Contingent royalty

 

—

 

—

 

10,073

 

10,073

 

VSM

 

—

 

—

 

351

 

351

 

 

 

$

—

 

3,625

 

10,424

 

14,049

 

The Company’s net financial liability positions for which fair value is measured on a recurring basis as of December 31, 2018 was as follows:

(US$ thousands)

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Forward commodity contracts

 

$

—

 

5,402

 

—

 

5,402

 

Contingent royalty

 

—

 

—

 

17,216

 

17,216

 

VSM

 

—

 

—

 

12,987

 

12,987

 

 

 

$

—

 

5,402

 

30,203

 

35,605

 

Contingent Royalty Consideration

Key assumptions in the valuation include the gross sales price forecast, export volume forecast, volatility, the risk-free rate, and credit-spread of the Company.

 

 

Quantitative Information about Level 3 Fair Value Measurements

 

(US$ thousands)

 

Fair value at
June 30, 2019

 

Valuation
technique

 

Unobservable input

 

Range (Weighted
Avg.)

 

Contingent Royalty Liability(1)

 

$

10,073

 

Black-Scholes Options model

 

Gross sales price forecast per ton

 

$104.0 to $111.9 ($109.8)

 

 

 

 

 

 

 

Export volume forecast (000’s)

 

5,221 tons over 21 months

 

 

 

 

 

 

 

Volatility

 

15.6%

 

 

 

 

 

 

 

Risk-free rate

 

2.11% to 2.37% (2.29)%

 

 

 

 

 

 

 

Company credit spread

 

0.072

 

(1)  $6.9 million of this amount is classified as a current liability with the remaining $3.1 million classified as a non-current liability.

Value Share Mechanism

Key assumptions in the valuation sales price forecast, expected volume forecast, tax rate and Foreign Exchange, or FX, rate.

 

 

Quantitative Information about Level 3 Fair Value Measurements

 

(US$ thousands)

 

Fair value at
June 30, 2019

 

Valuation
technique

 

Unobservable input

 

Range (Weighted
Avg.)

 

Value Share Mechanism (VSM)

 

$

351

 

Projected cash flows

 

Gross sales price forecast per ton

 

$131.3 to $146.8 $(137.8)

 

 

 

 

 

 

 

Tax rate

 

30.00%

 

 

 

 

 

 

 

FX rate

 

0.7020

 

Given the remaining period of the VSM obligation is short-term, the valuation technique has been changed from Monte Carlo simulation to a projected cash flow analysis.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following is a summary of all the activity related to the contingent royalty liability and value share mechanism:

 

 

Six months ended June 30, 2019 activity

 

(US$ thousands)

 

Account
classification

 

Contingent
Royalty
Liability

 

VSM

 

Incurred
royalties

 

Total

 

Beginning balance at January 1, 2019:

 

 

 

$

17,216

 

12,987

 

8,295

 

38,498

 

Statement of Operation activity:

 

 

 

 

 

 

 

 

 

 

 

Contingent liability/VSM expense incurred

 

Other royalties

 

 

 

 

 

15,105

 

15,105

 

Decrease in VSM Liability value

 

Other royalties

 

 

 

(12,636

)

 

 

(12,636

)

Decrease in Contingent Royalty Liability value

 

Other royalties

 

(7,143

)

 

 

 

 

(7,143

)

Total Statement of Operations activity:

 

 

 

$

(7,143

)

(12,636

)

15,105

 

(4,674

)

Cash paid to CONSOL/Wesfarmers

 

 

 

 

 

 

 

(18,384

)

(18,384

)

Balance sheet:

 

 

 

 

 

 

 

 

 

 

 

Royalties payable to CONSOL/Wesfarmers

 

Accrued expenses and other liabilities

 

 

 

 

 

5,016

 

5,016

 

VSM Liability

 

Contingent royalty consideration—current

 

 

 

351

 

 

 

351

 

Contingent Royalty Liability

 

Contingent royalty consideration

 

10,073

 

 

 

 

 

10,073

 

Total liabilities

 

 

 

$

10,073

 

351

 

5,016

 

15,440

 

There are no other fair value measurements of assets and liabilities that are measured at fair value on a nonrecurring basis as of June 30, 20192022 and December 31, 2018.

Other Financial Instruments

2021:

●
Cash
and
restricted
cash,
accounts
receivable,
accounts
payable,
accrued
expenses,
lease
liabilities
and
other
current
financial
liabilities:
The following methods and assumptions are used to estimate
carrying
amounts
reported
in
the fair value of other financial instruments as of June 30, 2019 and December 31, 2018:

·                  Cash and restricted cash, accounts receivable, accounts payable, accrued expenses, lease liabilities and other current financial liabilities:  The carrying amounts reported in the

unaudited
Condensed
Consolidated Balance Sheets approximate fair value due to the
short maturity of these instruments.

·                  Deposits

●
Restricted
deposits,
lease
liabilities,
interest
bearing
liabilities
and reclamation bonds, lease
other
financial
liabilities:
The
fair
values
approximate
the
carrying
values
reported
in
the
unaudited
Condensed
Consolidated
Balance
Sheets.
●
Interest bearing liabilities: The
Company’s outstanding interest-bearing liabilities andare carried at
amortized
cost.
As
of
September
30,
2022,
there
were
no
borrowings
outstanding
under
the
ABL
Facility.
The
estimated fair
value of
the
Notes is
approximately
$
326.8
million based
upon observable
market data
(Level 2).
12.
Accumulated Other Comprehensive Losses
Accumulated other financial liabilities:  The fair values approximate comprehensive losses consisted of
the carrying values reported following at September 30, 2022:
(in the unaudited Condensed Consolidated US$ thousands)
Foreign
currency
translation
adjustments
Balance Sheets.

17.at December 31, 2021

$
(44,228)
Net current-period other comprehensive income (loss):
Loss in other comprehensive income (loss) before reclassifications
(32,123)
Loss on long-term intra-entity foreign currency transactions
(43,785)
Total
net current-period other comprehensive gain
(75,908)
Balance at September 30, 2022
$
(120,136)
13.
Commitments

(a)
Mineral Leases

The
Company
leases
mineral
interests
and
surface
rights
from
land
owners
under
various
terms
and
royalty
rates. The future minimum royalties under these leases
are as follows:

(US$ thousands)

 

Amount

 

Year ending December 31,

 

 

 

2019

 

2,624

 

2020

 

5,313

 

2021

 

5,175

 

2022

 

5,010

 

2023

 

4,935

 

Thereafter

 

25,884

 

Total

 

48,941

 

(in US$ thousands)
Amount
Year ending
December 31,
2022
$
3,487
2023
4,868
2024
4,771
2025
4,643
2026
4,581
Thereafter
23,056
Total
$
45,406
Mineral leases are not in scope of ASC 842 and continue to
be accounted for under the guidance in ASC 932,
Extractive Activities —– Mining.

(b)Other commitments

As

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)

Coronado Global Resources Inc.
Form 10-Q September 30, 2022
17
(b)
Other commitments
As of
September
30, 2022,
purchase
commitments
for
capital expenditures
were $
33.6
million,
all of
which
is
obligated within the next twelve months.
In Australia, the
Company has generally
secured the ability
to transport coal
through rail contracts
and coal export
terminal contracts that are primarily funded
through take-or-pay arrangements with
terms ranging up to 11 years. 
9 years
.
In
the
U.S.,
the
Company
typically
negotiates
its
rail
and
coal
terminal
access
on
an
annual
basis.
As
of June 
September
30, 2019,
2022,
these
Australian
and
U.S.
commitments
under
take-or-pay
arrangements
totaled $1.04
$
1.0
billion, of which approximately $90.3 $
101.6
million is obligated within the next year.

18.Related-Party Transactions

X-Coal

Duringtwelve months.

14.
Contingencies
In the three and six months ended June 30, 2019
normal course
of business,
the Company sold coal to Xcoal Energy and Resources, or Xcoal, an entity associated with Non-Executive director, Mr. Ernie Thrasher.  Revenues from Xcoal of $135.3 million and $98.5 million, respectively, are recorded as coal revenues on the unaudited Condensed Consolidated Statement of Operations for the three months ended June 30, 2019 and 2018. Revenues from Xcoal of $293.2 million and $213.0 million, respectively, are recorded as coal revenues on the unaudited Condensed Consolidated Statement of Operations for the six months ended June 30, 2019 and 2018. At June 30, 2019 amounts due from Xcoal in respect of coal sales were $59.7 million.  As of December 31, 2018, amounts due from Xcoal in respect of coal sales were $36.0 million.  These balances are included in related party receivables.

19.Contingencies

In the normal course of business, the Company

is a
party to
certain guarantees
and financial
instruments with
off-balance sheet
risk, such
as letters
of credit
and performance
or surety
bonds. No
liabilities related
to these
arrangements are reflected
in the Company’s
unaudited Condensed Consolidated Balance Sheets.
Management
does not expect any material losses to result from these
guarantees or off-balance sheet financial instruments.

Facility B

At
September
30,
2022,
the
Company
had
outstanding
bank
guarantees
of
$
43.8
million
to
secure
various
obligations and commitments.
Restricted deposits represent cash deposits
held at third parties as required
by certain agreements entered into
by the
Company to
provide cash collateral.
The Company had
cash collateral in
the form
of deposits in
the SFA provides A$370 amount
of $
88.4
million for issuing bank guarantees in Australian dollars. At June and
$
81.0
million as
of September
30, 2019 Facility B of the SFA had been utilized to issue A$ 268.5 million of bank guarantees on behalf of the Company. In order to satisfy an obligation 2022
and December
31, 2021,
respectively,
to provide a U.S. dollar
back-to-back
support
for
bank guarantee to a third party, on June 12, 2019, the Company entered into a Bank Guarantee Facility Agreement with Westpac Banking Corporation with a limit of $28.6 million. At June 30, 2019, this facility was fully utilized to issue a bank guarantee to a third party for $28.6 million.

Curragh is a co-defendant to proceedings

guarantees,
financial
payments,
other
performance
obligations,
various
other
operating agreements
and contractual
obligations under
workers compensation
insurance. These
deposits are
restricted and classified as long-term assets in the Queensland Supreme Court brought by Aurizon. Aurizon’s claim relates to costs relating to the co-defendants’ use of the Wiggins Island Coal Export Terminal Pty Ltd, or WICET, rail links, in particular, whether the “First Milestone Target Date”, which triggers certain “WIRP Fee” payments under the Wiggins Island Rail Project Deed, or WIRP Deed, has been achieved. On June 27, 2019, the Queensland Supreme Court delivered judgements in favor of Aurizon against Coronado Curragh Pty Ltd and the other co-defendants.  The Company intends to continue to strongly contest the matter. The Company, together with the other co-defendants, lodged a notice of appeal of the Queensland Supreme Court judgement on July 25, 2019. It is currently expected that, were Aurizon successful in the ultimate result of the litigation and expert determinations, Coronado Curragh Pty Ltd would be required to pay approximately A$2.3 million per annum for the term of the WIRP Deed (which is 233 months). Resolution of this dispute would also result in the Company’s below rail access to WICET (of 1.5 MMtpa) becoming a firm contractual capacity entitlement (and the subject of a 20 year take-or-pay access agreement) instead of an ad hoc entitlement only. The Company’s unaudited
Condensed Consolidated Balance Sheet includes an estimated loss contingency associated Sheets.
In accordance
with these proceedingsthe
terms of approximately $4.2
the ABL
Facility,
the Company
may be
required
to cash
collateralize
the ABL
Facility to the extent of outstanding letters of credit after the expiration or termination date of such letter of credit.
As of September 30, 2022,
no
letter of credit was outstanding and
no
cash collateral was required.
For the U.S. Operations in order to provide the required financial assurance, the Company generally uses surety
bonds
for
post-mining
reclamation.
The
Company
can
also
use
bank
letters
of
credit
to
collateralize
certain
obligations. As of
September 30, 2022,
the Company had
outstanding surety
bonds of $
31.9
million and $3.5 letters
of credit
of $
16.8
million issued
from our
available bank
guarantees, to
meet contractual
obligations under
workers
compensation insurance
and to
secure other
obligations and
commitments. Future
regulatory changes
relating
to these obligations could result in increased obligations, additional
costs or additional collateral requirements.
Stamp duty on Curragh acquisition
On September 27, 2022, the Company received from
the Queensland Revenue Office, or QRO,
an assessment
of the stamp duty
payable on its
acquisition of the Curragh
mine in March
2018. The QRO assessed
the stamp
duty
on
this
acquisition
at
an
amount
of
$
53.5
million
(A$
82.2
million)
plus
unpaid
tax
interest
of
$
7.9
million
(A$
12.1
million). The
Company intends
to lodge
an objection
to the
assessment within
the required
timeframe
and before the end of November 2022. The outcome of
this objection is uncertain.
The Company
has reviewed
the assessment
received
and based
on legal
and valuation
advice it
has sought,
continues
to
maintain
its
position
and
the
estimated
accrual
of
$
28.0
million
(A$
43.0
million)
within
“Accrued
Expenses
and
Other
Current
Liabilities”
in
its
unaudited
Condensed
Consolidated
Balance
sheet,
as
at June
September 30, 2019 and December 31, 2018, respectively.

2022.

From time to time, the
Company becomes a
party to other legal
proceedings in the
ordinary course of business
in Australia, the U.S. and other countries where the Company does business.
Based on current information, the
Company believes that such other pending
or threatened proceedings are likely to
be resolved without a material
adverse
effect
on
its
financial
condition,
results
of
operations
or
cash
flows.

The liabilities recorded in relation to

In
management’s
opinion,
the above litigations do not include estimated future costs associated with legal representation, which, in accordance with the Company’s policy, are expensed as incurred. In management’s opinion, the
Company is not currently
involved in any legal
proceedings, which individually
or in the aggregate
could have a
material effect on the financial condition, results
of operations and/or liquidity of the Company.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)

20.

Coronado Global Resources Inc.
Form 10-Q September 30, 2022
18
15.
Subsequent Events

On August 5, 2019, October
30, 2022,
the Company’s
Board of
Directors declared
a fully franked interim total
unfranked special
dividend of $0.112
$
225.0
million, or
13.4
cents per Chess Depository Instrument, or CDI.
CDI, comprising
$
23.5
million of
the unaccepted
portion of
the offer
to purchase
the
Notes made
in
connection
with the
ordinary
dividends
declared on
August
8, 2022,
plus
an additional
$
201.5
million. CDIs
will be
quoted as
“ex” dividend
on November
18, 2022,
Australia time.
The dividend dividends
will have
a
record date of August 26, 2019,
November 21, 2022
, Australia
time, and
be payable
on September 20, 2019. Holders
December 12, 2022
, Australia
time. The
total ordinary dividends of CDIs trading on the ASX who elect to receive the dividend in Australian currency$
225.0
million will be paid based funded from available cash.
In connection with the declared ordinary dividends, Coronado Finance Pty
Ltd, a wholly-owned subsidiary of the
Company, offered
to purchase up to $
200.0
million aggregate principal amount of the
Notes at a purchase price
equal
to
104
%
of
the
principal
amount
of
the
Notes,
plus
accrued
and
unpaid
interest
to,
but
excluding,
the
settlement date, pursuant to the terms of the
Indenture. The payment of the ordinary
dividends is not contingent
on acceptance of the exchange rate onoffer to purchase the record date. The ex-dividend date will be August 23, 2019.

On August 5, 2019,Notes

by the Board Note holders.
Coronado Global Resources Inc.
Form 10-Q September 20, 2019. Holders of CDIs trading on the ASX who elect to receive the return of capital in Australian currency will be paid based on the exchange rate on the record date.

30, 2022

19
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM

To the Stockholders
and Board of Directors
of Coronado Global Resources
Inc.:

Results of Review of Interim Financial Information

Statements

We
have
reviewed
the
accompanying
condensed
consolidated
balance sheet
of
Coronado
Global
Resources
Inc. and subsidiaries (the Company) as
of JuneSeptember 30, 2019,2022, the
related condensed consolidated statements of operations and
comprehensive
income
for
the
three
and
nine-month
periods
ended
September
30,
2022
and
2021,
the
condensed consolidated
statements of
stockholders’ equity
for the
three-month periods
ended March
31,
June
30 and six-month periods ended JuneSeptember 30, 20192022 and 2018,2021, the related condensed consolidated statements of changes in stockholders’ equity/members’ capital and cash flows for the six-month nine-month
periods ended June September
30, 20192022 and 2018, 2021,
and the related
notes (collectively referred
to as the “condensed
consolidated interim financial information)
statements”). Based on our
reviews, we are
not aware of
any material modifications
that should be made to the
condensed consolidated interim financial informationstatements for itthem to be
in conformity with
U.S. generally accepted accounting principles.

We
have
previously
audited,
in
accordance
with
the
standards
of
the
Public
Company
Accounting
Oversight
Board (United States) (PCAOB), the
consolidated balance sheet of the Company
as of December 31, 2018, and2021, the
related consolidated statements
of operations
and comprehensive
income, changes in stockholders’ equity/members’ capital,stockholders'
equity and cash
flows
for the year then ended, and
the related notes (not presented herein);, and
in our report dated February 18, 2019, 22, 2022,
we
expressed
an
unqualified
audit
opinion
on
those
consolidated
financial
statements.
In
our
opinion,
the
information set
forth in
the accompanying
condensed consolidated
balance sheet
as of December
31, 2018, 2021,
is
fairly stated, in all material
respects, in relation to the consolidated balance
sheet from which it has been derived.

Basis for Review Results

This consolidated interim

These financial information is
statements
are the
responsibility
of the Company’s
Company's
management.
We
are a
public accounting
firm registered with the PCAOB and are required
to be independent with respect to the Company
in accordance
with the
U.S. federal
securities laws
and the
applicable rules
and regulations
of the
SEC and
the PCAOB.
We
conducted our review
in accordance with
the U.S. federal securities laws and the applicable rules and regulationsstandards of the Securities and Exchange Commission and
the PCAOB.

We A

review of interim
financial statements
consists principally
of applying
analytical procedures
and making
inquiries of
persons
responsible for
financial
and accounting matters.
It is substantially
less in scope
than an audit
conducted our reviews in accordance
with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards
of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as
a whole. Accordingly,
we do not express such an opinion.

/s/ KPMG LLP

Richmond, Virginia

August 5, 2019

Ernst & Young
Brisbane, Australia
November 8, 2022.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
20
ITEM 2.
MANAGEMENT’S DISCUSSION
AND ANALYSIS
OF FINANCIAL
CONDITION AND
RESULTS
OF
OPERATIONS

The following
Management’s Discussion
and Analysis
of our Financial
Condition and
Results of
Operations, or
MD&A, should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the
related notes to
those statements included
elsewhere in this
Form 10-Q. In addition,
this Form 10-Q report
should
be read in conjunction
with the Consolidated
Financial Statements for the three-year period
year ended December 31, 2018
2021 included
in Coronado Global Resources
Inc.’s registration statement on Form 10, as amended, filed with the U.S. Securities and Exchange Commission, or SEC, and the Australian Securities Exchange, or the ASX, on June 28, 2019.

Unless otherwise noted, references in this QuarterlyAnnual Report on Form 10-K

for the year ended December
31, 2021, filed
with
the
U.S.
Securities
and
Exchange
Commission,
or
SEC,
and
the
Australian
Securities
Exchange,
or
the
ASX, on February 22, 2022.
Unless otherwise
noted,
references
in this
Quarterly
Report on
Form 10-Q
to “we,” “us,
“us,” “our,
“our,” “Company,
“Company,”
or “Coronado”
“Coronado” refer
to Coronado
Global Resources
Inc. and
its consolidated
subsidiaries and
associates, unless
the context indicates otherwise.

All production and sales volumes contained in this Quarterly Report on Form 10-Q
are expressed in metric tons,
or Mt,
millions of
metric tons,
or MMt,
or millions
of metric
tons per
annum, or
MMtpa, except
where otherwise
stated. One Mt (1,000
(1,000 kilograms) is equal
to 2,204.62 pounds and
is equivalent to 1.10231
short tons. In addition,
all
dollar
amounts
contained
herein
are
expressed
in
United
States
dollars,
or
US$,
except
where
otherwise
stated.
References
to “A$
“A$”
are
references
to
Australian
dollars,
the
lawful
currency
of
the
Commonwealth
of
Australia. Some numerical figures included in this Quarterly Report
on Form 10-Q have been subject to rounding
adjustments. Accordingly, numerical figures shown as
totals in certain
tables may not
equal the sum
of the figures
that precede them.

CAUTIONARY NOTICE REGARDING FORWARD-LOOKINGFORWARD
-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as
amended, or the Securities Act, and Section 21E of the Securities
Exchange Act of 1934, as amended,
or the Exchange
Act, concerning
our business,
operations, financial
performance and
condition, the
coal, steel
and other industries, the impact of the
COVID-19 pandemic and related governmental
and economic responses
thereto, as well
as our plans, objectives
and expectations for our
business, operations, financial performance and condition, the coal, steel and other industries, as well as our plans, objectives and expectations for our business, operations, financial performance and
condition. Forward-looking statements may be
identified by words such
as “may,” “could,” “believes,” “estimates,” “expects,
“expects,” “intends,
“intends,” “considers”
“plans,”
“anticipate,”
“forecast,”
“outlook,”
“target,”
“likely,”
“considers”
and
other
similar
words.

Any
forward-looking
statements
involve
known
and
unknown
risks,
uncertainties,
assumptions
and
other
important factors that
could cause actual
results, performance,
events or outcomes
to differ
materially from
the
results,
performance,
events
or
outcomes
expressed
or
anticipated
in
these
statements,
many
of
which
are
beyond
our
control.
Such
forward-looking
statements
are
based
on
an
assessment
of
present
economic
and
operating
conditions
on
a
number
of
best
estimate
assumptions
regarding
future
events
and
actions.
These
factors are difficult to accurately predict and may be beyond our control. Factors that could affect our results, our
announced
plans,
including
our
plan
to
issue
dividends
and
distributions,
or
an
investment
in
our
securities
include, but are not limited to:

·

●
the prices we receive for our coal;

·

●
uncertainty in
global economic
conditions, including
the extent,
duration and
impact of
the Russia
and
Ukraine war, as well as risks related to government actions with respect to trade agreements, treaties or
policies;
●
a decrease in
the availability or increase
in costs of
key supplies, capital equipment
or commodities, such
as diesel fuel, steel, explosives and tires;
●
the extensive forms of taxation
that our mining operations
are subject to, and future
tax regulations and
developments.
For
example,
the
recent
amendments
to
the
coal
royalty
regime
announced
by
the
Queensland
state
Government
in
Australia
introducing
additional
higher
tiers
to
the
coal
royalty
rates
applicable to our Australian Operations;
●
severe financial
hardship,
bankruptcy,
temporary or
permanent shut
downs or
operational
challenges,
due to
future public
health crisis
(such as
COVID-19) or otherwise,
of one
or more
of our
major customers,
including customers in the steel industry,
key suppliers/contractors, which among
other adverse effects,
could
lead
to
reduced
demand
for
our
coal,
increased
difficulty
collecting
receivables
and
customers
and/or suppliers asserting force majeure or other reasons for not
performing their contractual obligations
to us;
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
21
●
our ability to generate sufficient cash to service
our indebtedness and other obligations;
●
our indebtedness and ability to
comply with the covenants and other
undertakings under the agreements
governing such indebtedness;
●
our
ability
to
collect
payments
from
our
customers
depending
on
their
creditworthiness,
contractual
performance or otherwise;
●
the demand for steel products, which impacts the demand for
our metallurgical, or Met, coals;

·

●
risks inherent to mining;

·

mining operations could
impact the amount
of coal produced,
cause delay or
suspend
coal deliveries, or increase the cost of operating our business;
●
the loss of, or significant reduction in, purchases by our
largest customers;

·                  our ability

●
risks unique to collect payments from our customers depending on their creditworthiness, contractual performance or otherwise;

·international mining and trading operations,

including tariffs and other barriers to trade;
●
unfavorable economic and financial market conditions;
●
our ability to continue acquiring and developing coal reserves
that are economically recoverable;

·

●
uncertainties in estimating our economically recoverable coal
reserves;

·

●
transportation for our coal becoming unavailable or uneconomic
for our customers;

·

●
the risk
that we
may
be required
to pay
for unused
capacity
pursuant
to the
terms
of our
take-or-pay
arrangements with rail and port operators;

·

●
our ability to retain key personnel and attract qualified
personnel;

·

●
any failure to maintain satisfactory labor relations;

·

●
our ability to obtain, renew or maintain permits and consents
necessary for our operations;

·

●
potential costs or liability under applicable environmental
laws and regulations, including with respect
to
any
exposure
to
hazardous
substances
caused
by
our
operations,
as
well
as
any
environmental
contamination our properties may have or our operations
may cause;

·

●
extensive regulation of our mining operations and future
regulations and developments;

·

●
our
ability
to
provide
appropriate
financial
assurances
for
our
obligations
under
applicable
laws
and
regulations;

·

●
assumptions underlying our asset retirement obligations
for reclamation and mine closures;

·

●
concerns
about
the
environmental
impacts
of
coal
combustion,
including perceived
possible
impacts
on
global
climate issues, which could result
in increased regulation of
coal combustion and requirements to
reduce
greenhouse gas,
or GHG,
emissions in
many jurisdictions,
which could
significantly affect
demand for
our products or our securities and divestment efforts affecting the investment community;

·                  the extensive forms of taxation that our mining operations are subjectreduced access to capital

and future tax regulations and developments;

·                  risks unique to international mining and trading operations;

·insurance;

●
any cyber-attacks or other security breaches that disrupt
our operations or result in the dissemination of
proprietary or confidential information about us, our customers
or other third parties;

·                  a decrease in the availability or increase in costs of key supplies, capital equipment or commodities, such as diesel fuel, steel, explosives and tires;

·                  unfavorable economic and financial market conditions;

·

●
the risk that we may not recover our investments in our mining, exploration and other assets, which may
require us to recognize impairment charges related to those assets;

·

●
risks related to divestitures and acquisitions;

·                  our indebtedness and ability to comply with the covenants under the agreements governing such indebtedness;

·                  our ability to generate sufficient cash to service all of our indebtedness or other obligations;

·

●
the risk that diversity in interpretation and application of accounting principles in the mining industry may
impact our reported financial results; and

·

●
other
risks
and
uncertainties
detailed
herein,
including,
but
not
limited
to,
those
discussed
in this report, including, but not limited to, those discussed in “Risk
“Risk
Factors,” set forth in Part II, Item 1A of this Quarterly Report
on Form 10-Q.

We make many

Coronado Global Resources Inc.
Form 10-Q September 30, 2022
22
We
make
many
of
our
forward-looking
statements
based
on
our
operating
budgets
and
forecasts,
which
are
based upon
detailed assumptions.
While we
believe that
our assumptions
are reasonable,
we caution
that it
is
very difficult to
predict the impact
of known factors,
and it is
impossible for us
to anticipate all
factors that could
affect our actual results.

See Part I, Item
1A. “Risk Factors”
of our registration statement Annual Report
on Form 10, as amended, 10-K for
the year ended December
31, 2021,
filed with the SEC
and ASX on February
22, 2022, and
Part II, Item 1A.
“Risk Factors” of
our Quarterly Reports
on Form 10-Q
for the quarterly
periods ended March
31, 2022 and
June 28, 2019, 30, 2022,
filed with the
SEC and ASX
on May 9, 2022 and
August 8, 2022, respectively,
for a more complete discussion
of the risks and uncertainties
mentioned above
and for
discussion of
other risks
and uncertainties
we face
that could
cause actual
results to
differ materially from those expressed or implied
by these forward-looking statements.
All
forward-looking
statements
attributable
to
us
are
expressly
qualified
in
their
entirety
by
these
cautionary
statements, as well as others
made in this Quarterly Report on Form
10-Q and hereafter in our other
filings with
the
SEC
and
public
communications.
You
should
evaluate
all
forward-looking
statements
made
by
us
in
the
context of these risks and uncertainties.

We caution you that the risks and uncertainties identified by us may not be all of the factors that are important to
you.
You
should
not
interpret
the
disclosure
of
any
risk
to
imply
that
the
risk
has
not
already
materialized.
Furthermore, the
forward-looking statements
included in this
Quarterly Report
on Form 10-Q
are made only
as
of the date
hereof. We
undertake no
obligation to
publicly update
or revise
any forward-looking
statement as
a
result of new information, future events, or otherwise, except
as required by applicable law.

Overview

We
are
a
global
producer,
marketer
and
exporter
of
a
full
range
of
Met coals.
coal
products.
We
own
a
portfolio
of
operating mines and development
projects in Queensland, Australia,
and in the states of
Pennsylvania, Virginia
and West Virginia and Pennsylvania in the United States.

Our operations in Australia, or our Australian
Operations
comprise the
100%-owned
Curragh producing
mine complex.
Our operations in the United States, or the U.S.
Operations
comprise three
two
100%-owned
producing
mine
complexes (Buchanan, Logan
(Buchanan
and Greenbrier)
Logan),
one
100%-owned
idled
mine
complex (Greenbrier) and two development properties (Pangburn-Shaner-Fallowfield (Mon Valley
and Russell County) and one idle property (Amonate). In addition to Met coal,
our Australian
Operations sell
thermal coal
domestically,
which is
used to
generate electricity,
to Stanwell.Stanwell
and
some thermal
coal in
the export
market. Our
U.S. Operations
primarily focus
on the
production of
Met coal
for
the North American domestic and seaborne
export markets and also produce and
sell some thermal coal that is
extracted in the process of mining Met coal.

Our business profile primarily focuses on the production of Met coal for the North American and seaborne export markets.

For the six
nine months
ended June September
30, 2019, 2022,
we produced
11.6
MMt and
sold 10.4 12.4
MMt of
coal. Met
coal and thermal coal
sales represented approximately 80.0% and 20.0%, respectively, 78.4%
of our total
volume of coal
sold and 96.2%
of total coal
revenues for the six
nine months
ended September 30, 2022.
Coking
coal
index
prices
declined
during
the
three
months
ended
September
30,
2022,
compared
to
record
quarter
price
and
revenues
for
the
three
months
ended
June
30,
2022,
due
to
slower
global
growth
outlook
impacting
demand,
higher
inflation,
and
a
continuation
of
the
COVID-19
lockdowns
in
China.
Prices
largely
stabilized in the
month of September
2022, supported by
supply constraints from
key Met coal
markets caused
by wet weather and logistical issues.
Coronado has
continued to
take advantage
of its
unique geographical
diversification as
a Met
coal supplier
of
scale to meet the requirements of steel customers across the globe. Our U.S. Operations have taken advantage
of current unique market fundamentals created
by the trade restrictions on Russian
coal by switching coal sales
from
China
to
Europe
providing
higher
returns
for
our
products.
In
addition
to
geographical
diversification,
Coronado is well positioned
to take advantage of
the current price arbitrage
between the Thermal
and Met coal
markets to maximize price realizations.
Our results for the nine months ended JuneSeptember 30, 2018.

2022 benefited from higher average realized Met

price per
Mt sold,
partially offset
by (1) significant
wet weather events
impacting production at
our Australian Operati
ons,
(2) inflationary
pressure, including
higher cost
of fuel
and labor
costs, (3)
adverse geological
conditions at
our
U.S.
Operations
resulting
in
lower
production
and
higher
equipment
maintenance
costs,
(4)
additional
fleets
mobilized
at
our
Australian
Operations
to
improve
coal
recovery
and
(5)
higher
sales
related
costs
(Stanwell
rebate, royalties and freight costs).
Coal revenues of $2.8 billion for the nine months
ended September 30, 2022 increased by 109.9% compared
to
the same
period
in
2021,
driven
by increased
average
realized
Met
price
per
Mt sold
from
$114.6
to
$279.4.
Sales volumes were lower for the nine months ended September 30,
2022 compared to the same period in 2021
primarily
due
to
lower
production
caused
by
significant
wet
weather
events
at
our
Australian
Operations
and
adverse geological conditions at our U.S. Operations.
Operating costs for the nine months ended September 30,
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
23
2022 were
$571.4 million,
or 48.3%,
higher compared
to the
corresponding period
in 2021
primarily driven
by
inflationary pressures,
additional contractor fleets
deployed at
our Australian
Operations to accelerate
overburden
removal to increase
coal availability,
higher maintenance
cost and higher
sales related costs,
such as Stanwell
rebate, royalties, freight and demurrage costs.
Dividends
On September 20,
2022, Coronado
settled its
previously declared
dividends totaling
$125.7 million
which were
paid to stockholders from available cash.
Liquidity
As of
September 30,
2022, the
Company’s net
cash position
was $385.7
million,
consisting of
cash (excluding
restricted cash) of $698.4
million and $312.7 million aggregate
principal amount of Notes outstanding.
Coronado
has available
liquidity of
$798.4 million
as of
September 30,
2022, comprising
cash (excluding
restricted cash)
and undrawn available borrowings under our ABL facility.
Safety
For
our
Australian
Operations,
the
twelve-month
rolling
average
Total
Reportable
Injury
Frequency
Rate,
or
TRIFR, at
September 30,
2022 was
4.15
compared to
a rate
of 3.07
at the
end of
December 31,
2021. At
out
U.S. Operations,
the twelve
-month rolling
average Total
Reportable Incident
Rate, or
TRIR, at
September
30,
2022 was
2.06
compared to a rate of 2.51 at the end of December 31, 2021.
Reportable rates for our Australian
and U.S. Operations are below the relevant industry
benchmarks.
The safety
of our
workforce is our
number one priority
and Coronado remains
focused on the
safety and wellbeing
of all employees and contracting parties.
Segment Reporting
In accordance with
Accounting Standards Codification,
or ASC, 280,
Segment Reporting, we
have adopted the
following reporting
segments: Curragh; Buchanan; Logan;Australia and Greenbrier.
the United
States. In
addition, “Corporate“Other and other”
Corporate” is
not a
reporting
segment but is disclosed for the purposes of reconciliation
to our consolidated financial statements.

Factors Affecting Comparability of our Financial Statements

Due to several factors, our historical results of operations are not comparable from period to period and may not be comparable to our financial results of operations in future periods. Set forth below is a brief description of the key factors impacting the comparability of our results of operations.

Curragh Acquisition

On March 29, 2018, we acquired Curragh from Wesfarmers Ltd, or Wesfarmers, for aggregate consideration, on the date of the transaction, of $563.8 million. We refer to this transaction as the Curragh acquisition.  The operating results of Curragh have been included in our consolidated financial statements since March 29, 2018.

Corporate Reorganization Transaction

During the year ended December 31, 2018, Coronado Group LLC and Coronado Global Resources Inc. completed a common control reorganization of their legal entity structure, which we refer to as the Reorganization Transaction. Prior to the Reorganization Transaction in August 2018, Coronado Group HoldCo LLC, the holding company of our Australian Operations, was a wholly-owned subsidiary of Coronado Group LLC.

The Company is a corporation for U.S. federal and state income tax purposes. The Company’s accounting predecessor, Coronado Group LLC, was and is treated as a flow-through entity for U.S. federal income tax purposes and as such, has generally not been subject to U.S. federal income tax at the entity level.

The Reorganization Transaction was treated as a combination of entities under common control in line with ASC 805, Business Combinations, whereby the receiving entity (the Company) recorded the contributed assets and liabilities at the carrying value of Coronado Group LLC. Prior to the Reorganization Transaction, the consolidated financial statements of the Company reflect the net assets and operations of Coronado Group LLC. The financial statements presented following the Reorganization Transaction are those of the receiving entity (the Company) and are retrospectively adjusted to present that entity as if it always held the net assets or equity interests previously held by the seller, Coronado Group LLC. As such, financial information (including comparatives) of the Company has been presented as a continuation of the pre-existing accounting values of assets and liabilities in Coronado Group LLC’s financial statements.

Australian IPO

On October 23, 2018, we completed an initial public offering on the ASX, pursuant to which the Company issued and sold the equivalent of 16,651,692 shares of common stock in the form of CHESS Depositary Interests, or CDIs, and the EMG Group sold the equivalent of 2,691,896.4 shares of common stock in the form of CDIs.

Results of Operations

How We Evaluate Our Operations

We
evaluate
our
operations
based
on
the
volume
of
coal
we
can
safely
produce
and
sell
in
compliance
with
regulatory
standards,
and
the
prices
we
receive
for
our
coal.
Our
sales
volume
and
sales
prices
are
largely
dependent upon
the terms
of our
coal sales
contracts, for
which prices
generally are
set based
on daily
index
averages, or on a quarterly basis.

basis or annual fixed price

contracts.
Our management
uses a
variety of
financial and
operating metrics
to analyze
our performance.
These metrics
are significant factors
in assessing
our operating results
and profitability.
These financial
and operating metrics to analyze our performance. These metrics are significant factors in assessing our operating results and profitability. These financial and operating metrics
include: (i) safety and environmental metrics; (ii) Adjusted EBITDA; (iii) total sales volumes and average realized
price
per
Mt
sold,
which
we
define
as
total
coal
revenues
divided
by
total
sales
volume;
(iv) Met
coal
sales
volumes and average realized Met price per
Mt sold, which we define as Met coal
revenues divided by Met coal
sales volume; (iii) Met sales volumes and(v) average realized met price
segment mining costs
per Mt sold,
which we define
as met coal revenues divided by met sales volume; (iv) average segment mining costs per Mt sold, which we define as cost of coal revenues
divided by sales volumes;
volumes (excluding
non-produced coal)
for the
respective
segment; and (v)
(vi) average
segment operating
costs
per Mt sold, which we define as segment operating costs
divided by sales volumes.

volumes for the respective segment.

Coal
revenues
are
shown
on
our
statement
of
operations
and
comprehensive
income
exclusive
of
other
revenues. Operating expenses are inclusive of
Generally,
export
sale contracts
for our
Australian
Operations
require
us to
bear the
cost of coal revenues, freight expense, Stanwell rebate and other royalties and exclude depreciation, depletion and amortization, and selling, general, and administrative expenses. Cost of coal revenues is shown on our statement of operations and comprehensive income exclusive
of freight expense, Stanwell rebate, other royalties, depreciation, depletion and amortization and selling, general and administrative expenses. Cost of coal revenues excludes these cost components as our chief operating decision maker, or CODM, does not view these costs as directly attributable to the production of coal. We believe our presentation of cost of coal revenues is useful to investors in providing an accurate view of the costs directly attributable to the production of coal in our mining costs segment. Additionally, for our international sales contracts, we typically bear the cost of freight
from our mines to
the applicable outbound
shipping port, while freight
costs from the port
to the end destination
are typically
borne by the
customer. Sales to the
export market from
our U.S.
Operations are generally
recognized
when title
to the coal
passes to
the customer
at the
mine load
out similar
to a
domestic sale.
For our
domestic
sales,
customers
typically
bear
the
cost
of
freight.
As
such,
freight
expenses
are
excluded
from
cost
of
coal
revenues to allow for consistency and comparability in
evaluating our operating performance.

Non-GAAP Financial Measures; Other
Measures

The
following
discussion
of
our
results
includes
references
to
and
analysis
of operations includes references to and analysis of
Adjusted
EBITDA,
Segment
Adjusted EBITDA and mining
costs, which is aare financial measure
measures not recognized in
accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP.
Non-GAAP financial
measures, including
Adjusted EBITDA,
Segment Adjusted
EBITDA and
mining costs,
are
used by investors to measure our operating performance and lenders to measure our ability to incur and service debt.

performance.

Coronado Global Resources Inc.
Form 10-Q September 30, 2022
24
Adjusted EBITDA, a non-GAAP measure, is defined as earnings before interest, tax, depreciation, depletion and
amortization
and
other
foreign
exchange losses and loss on debt extinguishment.
losses.
Adjusted
EBITDA
is
also
adjusted
for
certain
discrete
non-
recurring items that we exclude in
analyzing each of our segments’
operating performance. Adjusted EBITDA
is
not intended to
serve as an
alternative to U.S. GAAP
measures of performance
and may not
be comparable to similarly-titled
similarly titled measures presented
by other companies. A reconciliation
of Adjusted EBITDA to its
most directly
comparable measure under U.S. GAAP is included below. In addition, we present
Segment
Adjusted
EBITDA on a supplemental pro forma basis.

Segment

is
defined
as
Adjusted
EBITDA is defined as Adjusted EBITDA
by
operating
and
reporting
segment,
adjusted
for
certain
transactions,
eliminations
or
adjustments
that
our
CODM
does
not
consider
for
making
decisions
to
allocate resources among segments or assessing segment performance.
Segment Adjusted EBITDA is used as
a supplemental
financial measure
by management
and by
external users
of our
financial statements,
such
as
investors, industry analysts and lenders, to assess the operating
performance of the business.

Mining costs, a
non-GAAP measure, is
based on
reported cost of
coal revenues, which
is shown
on our
statement
of
operations
and
comprehensive
income
exclusive
of
freight
expense,
Stanwell
rebate,
other
royalties,
depreciation,
depletion
and
amortization,
and selling,
general and
administrative
expenses,
adjusted for
other
items that do not relate directly to the costs incurred to produce coal at a mine. Mining costs excludes these cost
components as
our CODM
does not
view these
costs as
directly attributable
to the
production of
coal. Mining
costs
is
used
as
a
supplemental
financial
measure
by
management,
providing
an
accurate
view
of
the
costs
directly
attributable
to
the
production
of
coal
at
our
mining
segments,
and
by
external
users
of
our
financial
statements, such as
investors, industry analysts and
ratings agencies, to assess
our mine operating
performance
in comparison to the mine operating performance of other
companies in the coal industry.
Three Months Ended JuneSeptember 30, 20192022 Compared
to Three Months Ended JuneSeptember 30, 2018

2021

Summary

Our

The financial and operational highlights for the three months
ended JuneSeptember 30, 2019:

·                  Tonnage 2022 include:

●
Net income for
the three months ended
September 30, 2022 of
$150.6 million increased by
$68.6 million,
from a net
income of $82.0
million for the
three months
ended September 30,
2021.
This increase was
driven by higher revenues partially offset by higher costs
and income tax expense.
●
Coking coal index
prices declined during
the three months
ended September 30,
2022, however prices
remained above historical
averages and the
average for the
three months
ended September
30, 2021.
Elevated
pricing,
combined
with
the
fact
that
a
large
portion
of
our
Met
coal
sales
at
our
Australian
Operations is
priced on
a three-month
lag basis,
resulted in
average realized
Met price
per Mt
sold of
$253.0 for the three months
ended September 30, 2022, 75.7%
higher compared to $144.0
per Mt sold
for the same period in 2021.
●
Sales volume
totaled 5.44.1
MMt for
the three
months ended
September 30,
2022, compared
to 4.6
MMt
for the
three months
ended September
30, 2021.
The lower
sales volumes
were largely
driven by
the
impact of unseasonal wet weather on production performance
at our Australian Operations.
●
Adjusted EBITDA for
the three months
ended September 30,
2022 of $223.6
million, an increase
of $75.9
million compared
to $147.7
million for
the three
months
ended September
30, 2021,
driven by
higher
coal sales revenues, partially offset by higher
operating costs.
●
As
of
September
30,
2022,
the
Company
had
total
available
liquidity
of
$798.4
million,
consisting
of
$698.4 million cash
(excluding restricted
cash) and $100.0
million of availability
under the ABL
Facility.
The ABL
Facility
is subject
to a
springing
fixed
charge
coverage
ratio
test if
availability
is less
than
a
certain amount.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
25
Three months ended September 30,
2022
2021
Change
%
(in US$ thousands)
Revenues:
Coal revenues
$
863,709
$
563,287
$
300,422
53.3%
Other revenues
10,948
10,304
644
6.3%
Total
revenues
874,657
573,591
301,066
52.5%
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
385,504
309,513
75,991
24.6%
Depreciation, depletion and amortization
37,508
38,461
(953)
(2.5%)
Freight expenses
63,026
58,043
4,983
8.6%
Stanwell rebate
54,575
12,274
42,301
344.6%
Other royalties
137,331
39,099
98,232
251.2%
Selling, general, and administrative expenses
10,405
8,044
2,361
29.4%
Total
costs and expenses
688,349
465,434
222,915
47.9%
Other income (expenses):
Interest expense, net
(17,220)
(18,251)
1,031
(5.6%)
Decrease (increase) in provision for
discounting and credit losses
12
2,430
(2,418)
(99.5%)
Other, net
32,898
(1,252)
34,150
(2,727.6%)
Total
other income (expenses), net
15,690
(17,073)
32,763
(191.9%)
Net income before tax
201,998
91,084
110,914
121.8%
Income tax expense
(51,423)
(9,096)
(42,327)
465.3%
Net income attributable to Coronado Global
Resources, Inc.
$
150,575
$
81,988
$
68,587
83.7%
Coal Revenues
Coal
revenues
were
$863.7
million
for
the
three
months
ended
September
30,
2022,
an
increase
of
$300.4
million, compared
to $563.3 million for the
three months ended September
30, 2021. Supply concerns
from key
Met coal markets supported high index prices through the September 2022 quarter which resulted in an average
realized Met price
per Mt
sold of $253.0
for the
three months ended
September 30, 2022,
75.7% higher compared
to $144.0
per Mt
sold
for the
same
period
in 2021.
This
increase was
partially
offset
by lower
Met coal
sales
volume of 3.3 MMt for the three months
ended JuneSeptember 30, 2019, or 0.2 MMt higher than the three months ended June 30, 2018. Significant improvements to rail availability at Curragh during the second quarter of 2019 provided the opportunity to recover delayed sales from the first quarter of 2019.

·                  Net income increased by $58.2 million, from $59.3 million for the three months ended June 30, 2018, to net income of $117.5 million for the three months ended June 30, 2019, reflecting increases in operating income and lower other expenses, partly offset by income tax expense.

·                  Coal markets remained positive during the three months ended June 30, 2019 as coal revenues averaged $5.8 per ton higher2022, compared to the three months ended June 30, 2018.

·                  Adjusted EBITDA for the three months ended June 30, 2019 totaled $222.3 million, an increase of $83.1 million, from Adjusted EBITDA of $139.2 million for the three months ended June 30, 2018, driven by very strong revenues and lower operating costs.

·                  As of June 30, 2019, we had cash of $46.0 million (excluding restricted cash) and $350.0 million of availability under the Multicurrency Revolving Syndicated Facility Agreement, dated September 15, 2018, which we refer 3.7 MMt in 2021,

primarily due
to as the SFA.

 

 

For Three Months Ended June 30,

 

 

 

($ in thousands)

 

 

 

2019

 

2018

 

Change

 

%

 

Revenues:

 

 

 

 

 

 

 

 

 

Coal revenues

 

630,690

 

577,510

 

53,180

 

9.2

%

Other revenues

 

11,767

 

14,020

 

(2,253

)

(16.1

)%

Total revenues

 

642,457

 

591,530

 

50,927

 

8.6

%

Costs and expenses:

 

 

 

 

 

 

 

 

 

Cost of coal revenues (exclusive of items shown separately below)

 

264,137

 

305,309

 

(41,172

)

(13.5

)%

Depreciation, depletion and amortization

 

45,508

 

42,594

 

2,914

 

6.8

%

Freight expenses

 

52,035

 

40,912

 

11,123

 

27.2

%

Stanwell rebate

 

45,847

 

32,812

 

13,035

 

39.7

%

Other royalties

 

49,073

 

67,695

 

(18,622

)

(27.5

)%

Selling, general, and administrative expenses

 

9,242

 

8,513

 

729

 

8.6

%

Total costs and expenses

 

465,842

 

497,835

 

(31,993

)

(6.4

)%

Operating income

 

176,615

 

93,695

 

82,920

 

88.5

%

Other income (expenses):

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(9,087

)

(18,987

)

9,900

 

(52.1

)%

Loss on debt extinguishment

 

—

 

—

 

—

 

—

 

Other, net

 

(2,989

)

(2,391

)

(598

)

25.0

%

Total other expenses, net

 

(12,076

)

(21,378

)

9,302

 

(43.5

)%

Net income before tax

 

164,539

 

72,317

 

92,222

 

127.5

%

Income tax expense

 

(47,033

)

(12,995

)

(34,038

)

261.9

%

Net income

 

117,506

 

59,322

 

58,184

 

98.1

%

Less: Net loss attributable to noncontrolling interest

 

(4

)

(2

)

(2

)

100.0

%

Net income attributable to Coronado Global Resources Inc.

 

117,510

 

59,324

 

58,186

 

98.1

%

Coal Revenues

Coal revenues were $630.7 million for the three months ended June 30, 2019, an increase of $53.2 million, as compared to $577.5 million for the three months ended June 30, 2018. The increase in coal revenues was attributable to higher Met coal sales volumes and higherabove average realized Met coal price per ton sold during the 2019 period. Improvements in rail conditionsrainfall impacting production at Curragh underpinned the increase in sales volumes whereas higher average realized Met coal pricing was primarily driven by committed (fixed and index priced) high volatile coal sales from the Logan segment, as well as an improved higher yielding Met coal sales mix.

Other Revenues

Other revenues were $11.8 million for the three months ended June 30, 2019, a decrease of $2.3 million, as compared to $14.0 million for the three months ended June 30, 2018. The decrease is predominantly related to Curragh, which recorded $12.6 million in other revenues relating to the amortization of the Stanwell non-market coal supply agreement, or CSA, liability for the three months ended June 30, 2018 compared to $8.5 million recognized for the three months ended June 30, 2019. This decrease was partially offset by an increase in freight revenues with respect to certain arrangements with customers at Logan and Greenbrier.

our Australian

Operations.
Cost of Coal Revenues (Exclusive of Items Shown
Separately Below)

Cost of coal revenues are comprised ofcomprise costs related
to produced tons sold, along with
changes in both the volumes and
carrying
values
of
coal
inventory.
Cost
of
coal
revenues
include
items
such
as
direct
operating
costs,
which
includes employee-related costs,
materials and
supplies, contractor services,
coal handling
and preparation costs
and production taxes.
Total
cost of coal revenues
was $385.5 million
for the Company were $264.1three months
ended September 30,
2022, an increase
of
$76.0 million, or 24.6%, compared to $309.5 million for
the three months ended JuneSeptember 30, 2019, 2021.
Our
Australian
Operations
contributed
$50.4
million
to
the
increase
in
total
cost
of
coal
revenues,
driven
by
additional
contractor
fleets
mobilized
to
accelerate
overburden
removal
to
increase
coal
availability,
and
inflationary
pressure,
including
higher
fuel
and
labor
costs,
partially
offset
by
a decrease
favorable
average
foreign
exchange rate
on translation
of $41.2 million, as the
Australian Operations
for the
three months
ended September
30, 2022
of
A$/US$: 0.68
compared to $305.3 
0.74 for
the same
period in
2021. Cost
of coal
revenues for
our U.S
Operations for
the three
months
ended September
30,
2022, was
$25.6
million
higher
compared
to the
three months
ended
September 30,
2021,
largely due
to the
impact of
inflation on
labor and
supply costs
and increased
purchased
coal transactions to meet sales commitments.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
26
Freight Expenses
Freight
expenses
include
costs
associated
with
take-or-pay
commitments
for
rail
and
port
providers
and
demurrage costs.
Freight expenses
totaled $63.0
million for
the three
months ended
September
30, 2022,
an
increase of
$5.0 million,
compared to
$58.0 million
for the
three months
ended September
30, 2021.
Our U.S.
Operations’ freight cost contributed
$7.1 million to this increase,
driven by coal sales
under certain contracts for
which we arrange and pay for transportation to port that did not exist to the same extent during the three months
ended JuneSeptember 30, 2018. 2021 and
higher demurrage costs,
offset by a $2.1 million
decrease in freight cost for our
Australian
Operations
due
to
lower
sales
volume
and
a
favorable
foreign
exchange
rate
on
translation
of
the
Australian Operations.
Stanwell Rebate
The primary reasons Stanwell
rebate was
$54.6 million
for this decrease are: (1) the
three months
ended September
30, 2022,
an increase
of $42.3
million, compared
to $12.3
million for
the three
months ended
September 30,
2021. The
increase was
largely
driven by
higher realized
export
reference coal
pricing
for the
prior twelve
-month
period
used to June 30, 2018 included
calculate
the unwind of a $21.4 million fair value adjustment recognized to coal inventories on the acquisition of Curragh; and (2)
rebate partially offset by favorable average foreign
exchange rate on translation of the Curragh operations for the three months ended June 30, 2019 of A$/US$: 0.71 versus 0.76 for the three months ended June 30, 2018. This was partially offset by higher production costs of $3.4 million at our U.S. Operations, primarily due to adverse geological mining conditions at certain mine complexes.

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization was $45.5 million for the three months ended June 30, 2019, an increase of $2.9 million, as compared to $42.6 million for the three months ended June 30, 2018. The increase was largely associated with our operating segments in the United States (Buchanan, Logan and Greenbrier) for which depreciation expense increased by $2.1 million, predominantly due to the expiration of a credit that was previously recognized on amortization of sales contracts.

Freight Expenses

The amount of freight expenses was $52.0 million for the three months ended June 30, 2019, an increase of $11.1 million, as compared to $40.9 million for the three months ended June 30, 2018. Curragh’s freight costs contributed $4.4 million to this increase driven by higher sales volumes which in turn incurred higher railings and port charges. The remaining $6.7 million increase relates mainly to new sales contracts entered into at Logan and Greenbrier which include the rendering of rail and port services to certain customers.

Stanwell Rebate

The Stanwell rebate was $45.8 million for the three months ended June 30, 2019, an increase of $13.0 million, as compared to $32.8 million for the three months ended June 30, 2018. The increase is driven primarily from higher export sales volumes in the three months ended June 30, 2019 versus the three months ended June 30, 2018.

Australian

Operations.
Other Royalties

Other royalties were $49.0$137.3 million in the three months ended JuneSeptember 30, 2019, a decrease2022, an
increase of $18.6$98.2 million,
as compared to $67.7
$39.1 million for
the three months
ended September 30,
2021. Higher royalties
were a product
of
higher
coal
revenues
compared
to
the
same
period
in
2021.
Effective
July
1,
2022,
the
Queensland
Government amended
Mineral Resources
Regulation 2013
(Qld) introducing
additional higher
tiers to
the coal
royalty
rates
which
resulted
in
additional
royalties
at
our
Australian
Operations
of
$58.7
million
for
the
three
months ended September 30, 2022.
Other, net
Other,
net
was
$32.9
million
in
the
three
months
ended
September
30,
2022,
an
increase
of
$34.2
million
compared
to net
loss
of $1.3
million
for the
three
months
ended
September
30,
2021. The
increase
primarily
relates
to
foreign
exchange
gains
recognized
in
the
translation
of
short-term
intra-entity
balances
in
certain
entities within the group that are denominated in currencies
other than their respective functional currencies.
Income Tax (Expense) Benefit
Income tax expense of $51.4 million for the
three months ended JuneSeptember 30, 2018.  The variance was primarily 2022 increased by $42.3 million,
compared to
a tax
expense of
$9.1 million
for the
three
months
ended September
30, 2021,
driven by a significant mark-to-market write up
higher
income before tax in the Contingent Royalty Consideration (payable to CONSOL) during the 2018 in respect of the Buchanan mine for $19.4 million due to higher forecast Met pricing at the end of June 30, 2018.

Interest Expense

Interest2022 period.

The income
tax expense net of interest income, was $9.1 million
for the
three months
ended September
30, 2022
is based
on an
annual effective
tax
rate of 24.8%.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
27
Nine months ended JuneSeptember 30, 2019, a decrease of $9.9 million, as compared 2022 Compared
to interest expense of $19.0 million for the threeNine months ended JuneSeptember 30, 2018. This decrease in interest expense was primarily attributable to the repayment of the $700 million term loan on October 24, 2018. 2021
Summary
The interest expense for the three months ended June 30, 2019 includes the discount rate unwind of the Stanwell Reserved Area, or the SRA, deferred consideration liability of $4.9 million and interest and finance charges on the SFA of $3.3 million.

Six Months Ended June 30, 2019 Compared to Six Months Ended June 30, 2018

Summary

Our financial and operational highlights for the sixnine months

ended JuneSeptember 30, 2019:

·                  Tonnage sold totaled 10.4 MMt for the six months ended June 30, 2019, or 5.1 MMt higher than the six months ended June 30, 2018, predominantly due to the acquisition of Curragh on March 29, 2018.

·2022 include:

●
Net income of
$712.5 million for
the nine months
ended September 30,
2022 increased by $178.7
$726.6 million,
from $35.7a net loss of
$14.1 million for the sixnine months
ended JuneSeptember 30, 2018, to $214.3 million for the six months ended June 30, 2019, reflecting increases in operating income, predominantly due to the acquisition of Curragh on March 29, 2018, lower interest expense, no loss on debt extinguishment, and lower other expenses, partly2021.
The increase was driven
by revenues, partially offset by higher costs and higher
income tax expense.

·                  Coal

●
Supply
concerns
in
key
Met
coal
markets, strengthened during
including
the six months ended June 30, 2019 as revenues averaged $116.7
continued
impact
of
the
Russian
invasion
of
Ukraine
on
global
supply
dynamics,
and
Met
coal
crossover
trades
into
the
thermal
market
caused
considerable volatility in coal pricing, resulting in average
realized Met price per Mt sold 6.7%of
$279.4 for the
nine months
ended September
30, 2022,
143.8% higher
compared $109.4 to
$114.6
per ton Mt
sold for
the six nine
months ended JuneSeptember 30, 2018.

·2021.

●
Sales volume totaled
12.4 MMt for
the nine months
ended September 30,
2022, or 1.1
MMt lower than
the nine
months ended September
30, 2021.
The lower sales
volumes were primarily
driven by
significant
wet weather
events at
our Australian
Operations and
adverse geological
conditions at
one of our
mine
complexes at our U.S. Operations.
●
Adjusted EBITDA for
the sixnine months
ended June September
30, 2019 totaled $405.42022 was
$1,072.9 million,
an increase of $263.5
$899.5 million, from Adjusted EBITDA of $141.8$173.4 million for the sixnine months ended JuneSeptember 30, 2018.

·                  Net cash of $301.2 million2021.

This increase was driven by higher coal revenues,
partially offset by higher operating costs.
●
Cash provided by
operating activities for the six months ended June 30, 2019 was partly offset by capital expenditures of $66.4 million.

·                  During the six months ended June 30, 2019, we paid a dividend of $299.7 million, which was funded by available cash and borrowings. The monies borrowed were fully repaid by June 30, 2019.

·                  As of June 30, 2019, we had available cash of $46.0 million (excluding restricted cash) and $350.0 million of additional liquidity available under the Syndicated Facility Agreement.

 

 

For Six Months Ended June 30,

 

 

 

($ in thousands)

 

 

 

2019

 

2018

 

Change

 

%

 

Revenues:

 

 

 

 

 

 

 

 

 

Coal revenues

 

1,212,487

 

784,346

 

428,141

 

54.6

%

Other revenues

 

21,848

 

15,337

 

6,511

 

42.5

%

Total revenues

 

1,234,335

 

799,683

 

434,652

 

54.4

%

Costs and expenses:

 

 

 

 

 

 

 

 

 

Cost of coal revenues (exclusive of items shown separately below)

 

533,696

 

424,620

 

109,076

 

25.7

%

Depreciation, depletion and amortization

 

85,279

 

64,402

 

20,877

 

32.4

%

Freight expenses

 

89,362

 

45,155

 

44,207

 

97.9

%

Stanwell rebate

 

94,674

 

32,812

 

61,862

 

188.5

%

Other royalties

 

93,422

 

82,987

 

10,435

 

12.6

%

Selling, general, and administrative expenses

 

18,311

 

52,283

 

(33,972

)

(65.0

)%

Total costs and expenses

 

914,744

 

702,259

 

212,485

 

30.3

%

Operating income

 

319,591

 

97,424

 

222,167

 

228.0

%

Other income (expenses):

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(17,264

)

(25,488

)

8,224

 

(32.3

)%

Loss on debt extinguishment

 

—

 

(3,905

)

3,905

 

(100.0

)%

Other, net

 

1,042

 

(26,846

)

27,888

 

(103.9

)%

Total other expenses, net

 

(16,222

)

(56,239

)

40,017

 

(71.2

)%

Net income (loss) before tax

 

303,369

 

41,185

 

262,184

 

636.6

%

Income tax (expense) benefit

 

(89,043

)

(5,534

)

(83,509

)

1,509.0

%

Net income (loss)

 

214,326

 

35,651

 

178,675

 

501.2

%

Less: Net loss attributable to noncontrolling interest

 

(4

)

(4

)

—

 

—

 

Net income (loss) attributable to Coronado Global Resources Inc.

 

214,330

 

35,655

 

178,675

 

501.2

%

Coal Revenues

Coal revenues were $1,212.5 $945.4

million for the six nine
months ended JuneSeptember 30, 2019,
2022,
an increase of $428.1$774.3 million as compared to $784.3 $171.1 million
for the same period in 2021.
●
As of
September 30,
2022, the
Company
had net
cash of
$385.7 million,
consisting
of a
closing cash
balance
(excluding
restricted
cash)
of
$698.4
million
and
$312.7
million
aggregate
principal
amount
outstanding of the Notes.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
28
Nine months ended September 30,
2022
2021
Change
%
(in US$ thousands)
Revenues:
Coal revenues
$
2,821,334
$
1,344,253
$
1,477,081
109.9%
Other revenues
33,152
29,705
3,447
11.6%
Total
revenues
2,854,486
1,373,958
1,480,528
107.8%
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
1,140,467
889,771
250,696
28.2%
Depreciation, depletion and amortization
126,901
132,754
(5,853)
(4.4%)
Freight expenses
189,316
166,090
23,226
14.0%
Stanwell rebate
124,160
43,169
80,991
187.6%
Other royalties
299,711
83,219
216,492
260.1%
Selling, general, and administrative expenses
28,657
21,250
7,407
34.9%
Restructuring costs
—
2,300
(2,300)
(100.0%)
Total
costs and expenses
1,909,212
1,338,553
570,659
42.6%
Other income (expenses):
Interest expense, net
(52,034)
(49,982)
(2,052)
4.1%
Loss on debt extinguishment
—
(5,744)
5,744
(100.0%)
(Increase) decrease in provision for discounting
and credit losses
(572)
8,074
(8,646)
(107.1%)
Other, net
55,191
(3,610)
58,801
(1,628.8%)
Total
other income (expenses), net
2,585
(51,262)
53,847
(105.0%)
Net income (loss) before tax
947,859
(15,857)
963,716
(6,077.5%)
Income tax (expense) benefit
(235,391)
1,788
(237,179)
(13,265.0%)
Net income (loss)
712,468
(14,069)
726,537
(5,164.1%)
Less: Net loss attributable to noncontrolling
—
(2)
2
(100.0%)
Net income (loss) attributable to Coronado Global
Resources, Inc.
$
712,468
$
(14,067)
$
726,535
(5,164.8%)
Coal Revenues
Coal revenues
were $2,821.3
million for
the nine
months ended
September 30,
2022, an
increase of
$1,477.1
million, compared to $1,344.3
million for the six nine
months ended JuneSeptember 30, 2018. The addition of Curragh contributed $402.0 million
2021. This increase was
driven
by favorable market conditions and higher coal indices, which
resulted in additional coal revenues for the six months ended June 30, 2019 that were not included within coal revenues for the six months ended June 30, 2018 given Curragh was acquired on March 29, 2018. Coal revenues for our operating segments in the United States (Buchanan, Logan and Greenbrier) of $436.5 million for the six months ended June 30, 2019 were $26.7 million higher than $409.8 million for the six months ended June 30, 2018 mainly as a result higher average realized Met coal pricing.

Other Revenues

Other revenues were $21.8 millionprice per

Mt sold for the sixnine months ended JuneSeptember 30, 2019, an increase2022 of $6.5 million, as$279.4, compared to $15.3 million$114.
6
per Mt sold for the six months ended June 30, 2018. The increase is predominantly related to the amortization of the Stanwell non-market CSA liability for the six months ended June 30, 2019 of $17.1 million compared to $12.6 million for the same
period since the acquisition of Curragh on March 29, 2018 included in the six months ended June 30, 2018.  Other revenues for our operating segments in the United States (Buchanan, Logan and Greenbrier) increased $1.1 million on higher freight revenue.

2021.

Cost of Coal Revenues (Exclusive of Items Shown
Separately Below)

Cost of coal revenues are comprised of costs related to produced tons sold, along with changes in both the volumes and carrying values of coal inventory. Cost of coal revenues include items such as direct operating costs, which includes employee-related costs, materials and supplies, contractor services, coal handling and preparation costs and production taxes.

Total
cost of coal revenues for the Company were $533.7was $1,140.5 million for the sixnine months
ended JuneSeptember 30, 2019,2022, an increase of $109.1
$250.7 million, as
or 28.2%,
compared to $424.6
$889.8 million
for the six
nine months
ended June September
30, 2018.  $94.5 million2021.
Cost of the increase was attributable to a full six-month contribution in the 2019 period from Curragh compared to a partial period from acquisition on March 29, 2018 to June 30, 2018. The remaining $14.6 million increase was primarily driven by higher production costs at the Buchanan and Logan operating segments in the U.S., resulting from adverse mining conditions.  In addition, Logan began production at three new
coal mines in the first half of 2019.

Depreciation, Depletion and Amortization

Depreciation, depletion and amortization was $85.3 millionrevenues for the six months ended June 30, 2019, an increase of $20.9 million, as compared to $64.4 million for the six months ended June 30, 2018. The increase was primarily a result of the addition of Curragh, which contributed $37.9 million in depreciation, depletion and amortization for the six months ended June 30, 2019 compared to $21.9 from the date of acquisition, March 29, 2018, to June 30, 2018.

Freight Expenses

The amount of freight expenses was $89.4 million for the six months ended June 30, 2019, an increase of $44.2 million, as compared to $45.2 million for the six months ended June 30, 2018. The increase is primarily due to $79.2 million of Curragh related freight expenses for the six months ended June 30, 2019 compared to $38.2 million for the six months ended June 30, 2018 which included Curragh only for a partial period from acquisition date of March 29, 2018 to June 30, 3018. The freight expense for our operating segments in the United States (Buchanan, Logan and Greenbrier), which predominantly sells its coal on an F.O.R basis, were $11.2 million for the six months ended June 30, 2019, an increase of $4.4 million, as compared to $6.8 million for the six months ended June 30, 2018. The increase is primarily driven by new rail and port arrangements with certain customers that did not exist in 2018 period.

Stanwell Rebate

The Stanwell rebate was $94.7 million for the six months ended June 30, 2019, an increase of $61.9 million, as compared to $32.8 million for the six months ended June 30, 2018. Curragh contribution to the Company’s result during the six months ended June 30, 2018 was only for part of the period since March 29, 2018, being the date of acquisition.

Other Royalties

Other royalties were $93.4 million in the six months ended June 30, 2019, an increase of $10.4 million, as compared to $83.0 million in the six months ended June 30, 2018. Curragh contributed approximately $79.1 million in other royalty expense for the six months ended June 30, 2019 compared to $38.2 million for the six months ended June 30, 2019 which only included Curragh for part of the period from March 29, 2018, the date of acquisition. This increase was in part offset by a decrease in other royalties attributable to

our U.S. Operations which decreased $28.4 million. The CONSOL Energy contingent royalty increased $16.4 million for
in the six nine
months ended June September
30, 2018 2022 increased
by $117.1 million,
as compared
to the
same period
in 2021,
driven by
the impact
of inflation
on labor
and supply
costs, adverse
geological
conditions
in
certain
mines
of
our
U.S.
Operations
resulting
in
unplanned
maintenance
costs,
and
increased
purchased
coal
transactions
to
meet
sales
commitments.
Cost
of
coal
revenues
for
our
Australian
Operations in
the nine
months ended
September 30,
2022 increased
by $133.6
million,
compared to a $7.1 million decrease for
the six months ended June 30, 2019.  This $23.5 million benefit is primarilysame
period in 2021, due to average realized pricing for export sales forecast in the mark-to-market adjustment for June 30, 2018 being significantly higher than the December 31, 2017 forecast in the mark-to-market calculation.  The benefit also reflects one less year remaining in the contingent royalty period.

Selling, General, and Administrative Expenses

Selling, general and administrative cost was $18.3 million for the six months ended June 30, 2019, a decrease of $34.0 million, as comparedadditional fleets mobilized to $52.3 million for the six months ended June 30, 2018. The decrease was due to specific one-off, non-recurring costs incurred in relation to the Curragh acquisition during March 2018 relating to stamp duty of $33.0 million and various professional service and legal fees of $4.7 million.

Interest Expense

Interest expense, net of interest income, was $17.3 million for the six months ended June 30, 2019, a decrease of $8.2 million, as compared to interest expense of $25.5 million for the six months ended June 30, 2018. Included within interest expense for the six months ended June 30, 2019 is $9.7 million relating to the accretion of the deferred consideration liability recognized accelerate overburden removal, inflationary pressure

on the purchase of the SRA on August 14, 2018, fuel
pricing
and $4.7 million finance charges related
labor
costs
and
increased
purchased
coal
transactions
to commitment and financial guarantee fees incurred in relation to the Syndicated Facility Agreement. This was
meet
sales
commitments.
Higher
costs
were partially offset by a decrease in interest expense compared to the six months ended June 30, 2018, during which the Company incurred interest on a term loan established for the Curragh acquisition. This loan was repaid in full on October 24, 2018.

Loss on Debt Extinguishment

For the six months ended June 30, 2018, the Company recognized a loss on debt extinguishment of $3.9 million relating to the extinguishment of a term loan that occurred in conjunction with the Curragh acquisition on March 29, 2018. There was no debt extinguishment cost for the six months ended June 30, 2019.

Other, Net

Other, net income was $1.0 million for the six months ended June 30, 2019, a decrease of $27.9 million, as compared to other, net expense $26.8 million for the six months ended June 30, 2018. This favorable variance is primarily comprised of non-recurring costs incurred for the six months ended June 30, 2018 relating to the $15.7 million loss on the settlement of a foreign exchange swaps recognized at the time of the Curragh acquisition and a fair value adjustment of $4.9 million on interest rate swaps that were in place during the six months ended June 30, 2018. The remaining difference mainly relates to foreign exchange gains or losses recognized in the translation of monetary items that were denominated in a currency different to the functional currency of operations of the Company.

Supplemental Segment Financial Data

Three Months Ended June 30, 2019 Compared to Three Months Ended June 30, 2018

Curragh

 

 

For Three Months Ended June 30,

 

 

 

($ in thousands)

 

 

 

2019

 

2018

 

Change

 

%

 

Sales Volume (MMt)

 

3.3

 

3.1

 

0.2

 

6.5

%

Total revenues ($)

 

412,810

 

386,756

 

26,054

 

6.7

%

Coal revenues ($)

 

403,703

 

374,534

 

29,169

 

7.8

%

Average realized price per Mt sold ($/Mt)

 

121.3

 

121.0

 

0.3

 

0.2

%

Met Sales Volume (MMt)

 

2.5

 

2.2

 

0.3

 

13.6

%

Met coal Revenues ($)

 

377,016

 

348,871

 

28,145

 

8.1

%

Average realized met price per Mt sold ($/Mt)

 

151.4

 

158.3

 

(6.9

)

(4.4

)%

Mining costs ($)

 

133,104

 

177,665

 

(44,561

)

(25.1

)%

Mining cost per Mt sold ($/Mt)

 

40.0

 

57.5

 

(17.5

)

(30.4

)%

Operating costs ($)

 

260,796

 

287,012

 

(26,216

)

(9.1

)%

Operating costs per Mt sold ($/Mt)

 

78.3

 

92.9

 

(14.6

)

(15.7

)%

Segment Adjusted EBITDA ($)

 

151,561

 

99,979

 

51,582

 

51.6

%

Coal revenues for Curragh for the three months ended June 30, 2019 were $403.7 million, an increase of $29.2 million or 7.8%, compared to $374.5 million for the three months ended June 30, 2018. This increase was driven largely by an increase in the export met sales volumes of 0.3Mt, partially offset by a decrease in average realized met price per Mt sold of $7.0 per ton.

Operating costs decreased by $26.2 million, or 9.1%, for the three months ended June 30, 2019 compared to the three months ended June 30, 2018. This decrease was driven primarily by mining costs which decreased by $44.6 million as a result of: (1) the three months to June 30, 2018 included the unwind of a $21.4 million fair value adjustment recognized to coal inventories on acquisition of Curragh, which was incurred as coal was sold during the period; and (2) favorable average foreign exchange rate on translation

of the Australian Operations for
the nine months ended September 30, 2022 of A$/US$:
0.71 compared to 0.76 for the same period in 2021.
Depreciation, Depletion and Amortization
Depreciation, depletion
and amortization
was $126.9
million for the
nine months
ended September 30,
2022, a
decrease of
$5.9 million,
as compared
to $132.8
million for
the nine
months ended
September
30, 2021.
The
decrease
was
associated
with
favorable
average
foreign
exchange
rate
on
translation
of
the
Australian
Operations,
partially
offset
by
additional
equipment
brought
into
service
during
the
twelve
months
since
September 30, 2021.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
29
Freight Expenses
Freight expenses
totaled $189.3
million for
the nine
months ended
September 30,
2022, an
increase of
$23.2
million,
compared
to
$166.1
million
for
the
nine
months
ended
September
30,
2021.
Our
U.S.
Operations
contributed
to
$28.9
million
of
the
increase
due
to
certain
contracts
for
which
we
arrange
and
pay
for
transportation to port that
did not exist
to the same
extent in the nine
months ended September 30,
2021, partially
offset by the benefits of lower average foreign
exchange rate on translation of the Australian Operations.
Stanwell Rebate
The Stanwell
rebate was
$124.2 million
for the
nine months
ended September
30, 2022,
an increase
of $81.0
million, as compared to
$43.2 million for the
nine months ended September
30, 2021. The increase
was largely
driven by
higher realized
export
reference coal
pricing
for the
prior twelve
-month
period
used to
calculate
the
rebate, partially offset by
the favorable average foreign
exchange rate on
translation of the
Australian
Operations.
Other Royalties
Other royalties were
$299.7 million for
the nine months
ended September 30,
2022, an increase
of $216.5 million,
as compared to $83.2 million for the nine months ended September 30, 2021. Higher royalties were a product of
higher average realized export
pricing and the adverse impact
of the new royalty regime
applicable from July 1,
2022 to our Australian Operations.
Other, net
Other,
net
was
$55.2
million
in
the
nine
months
ended
September
30,
2022,
an
increase
of
$58.8
million
compared
to
a
net
loss
of
$3.6
million
for
the
nine
months
ended
September
30,
2021.
The
increase
largely
relates
to
foreign
exchange
gains
recognized
in
the
translation
of
short-term
inter-entity
balances
in
certain
entities within the group that are denominated in currencies
other than their respective functional currencies.
Income Tax (Expense) Benefit
Income tax
expense of
$235.4 million for
the nine
months ended September
30, 2022
increased by
$237.2 million,
as compared
to a
$1.8
million tax
benefit for
the nine
months ended
September
30, 2021,
primarily driven
by
higher income before tax in the 2022 period.
The income tax expense for the nine
months ended September 30, 2022 is based
on an annual effective tax
rate
of 24.8%.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
30
Supplemental Segment Financial Data
Three months ended September 30, 2022 compared to
three months ended September 30, 2021
Australia
Three months ended September 30,
2022
2021
Change
%
(in US$ thousands)
Sales volume (MMt)
2.4
2.8
(0.4)
(12.9)%
Total
revenues ($)
546,485
342,372
204,113
59.6%
Coal revenues ($)
537,256
332,558
204,698
61.6%
Average realized price per Mt sold ($/Mt)
221.8
119.7
102.1
85.3%
Met sales volume (MMt)
1.7
2.0
(0.3)
(16.2)%
Met coal revenues ($)
518,010
306,033
211,977
69.3%
Average realized Met price per Mt sold ($/Mt)
313.0
154.9
158.1
102.1%
Mining costs ($)
241,674
180,837
60,837
33.6%
Mining cost per Mt sold ($/Mt)
99.8
67.4
32.4
48.1%
Operating costs ($)
458,405
275,782
182,623
66.2%
Operating costs per Mt sold ($/Mt)
189.3
99.2
90.1
90.8%
Segment Adjusted EBITDA ($)
88,035
67,383
20,652
30.6%
Coal revenues for
our Australian Operations
for the
three months ended
September 30,
2022 were
$537.3 million,
an increase of
$204.7 million or
61.6%, compared
to $332.6 million
for the three
months ended September
30,
2021. This increase
was largely driven
by a higher
average realized Met
price per Mt
sold for the
three months
ended September 30,
2022 of
$313.0 compared to
$154.9 per Mt
sold for
the same period
in 2021
due to
elevated
prices resulting from the
impact of supply concerns
from key Met markets such
as Australia and Canada. Sales
volume
of
2.4
MMt
decreased
by
0.4
MMt,
compared
to
2.8
MMt
for
the
three
months
ended
September
30,
2021, largely
due to
above average
rainfall
at the
Curragh operationsmine
complex
impacting coal
mining
activities
and
production.
Operating
costs
increased
by
$182.6
million,
or
66.2%,
for
the
three
months
ended
September
30,
2022,
compared to
the three
months ended
September
30, 2021.
The increase
was
largely
driven by
higher mining
costs, Stanwell rebate (mainly due to
higher realized coal pricing) and other
royalties due to higher revenues and
the new
royalty regime
introduced by
the Queensland
government from
July 1,
2022. Mining
costs were
$60.8
million, or 48.1%, higher for the three months ended JuneSeptember 30, 2019 2022 compared to the same period in 2021,
primarily due
to inflationary
pressures
and additional
contractor
fleets mobilized
in the
first half
of A$/2022
at our
Australian
Operations,
partially
offset
by
favorable
average
foreign
exchange
on
translation
of
our
Australian
Operations to US$: 0.71 versus 0.76 for the three months ended June 30, 2018. Lower mining. Increased costs and highercombined with lower sales volumes caused the mining resulted in higher Mining and Operating
cost per Mt sold forof $32.4 and $90.1, respectively,
compared to the three months ended June 30, 2019 to decrease by $17.5 per Mt sold. The decreasesame period in mining costs were partially offset by higher freight costs of $5.5 million, driven by higher railings to port and higher export sales volumes, and higher Stanwell rebates which increased by $13.0 million due mainly to higher sales volumes.

2021.

Segment Adjusted EBITDA increased by $51.6 million, or 51.6%, to $151.6of $88.0 million for the three months ended JuneSeptember 30, 2019 as2022 increased by $20.6
million compared
to $100.0
Adjusted
EBITDA
of
$67.4 million
for the six
three
months
ended
September
30,
2021. This
increase was primarily driven by higher coal revenues
partially offset by higher operating costs.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
31
United States
Three months ended JuneSeptember 30, 2018, due to lower operating
2022
2021
Change
%
(in US$ thousands)
Sales volume (MMt)
1.7
1.8
(0.1)
(5.7)%
Total
revenues ($)
328,172
231,219
96,953
41.9%
Coal revenues ($)
326,453
230,729
95,724
41.5%
Average realized price per Mt sold ($/Mt)
193.1
128.7
64.4
50.0%
Met sales volume (MMt)
1.6
1.7
(0.1)
(7.0)%
Met coal revenues ($)
309,609
228,561
81,048
35.5%
Average realized Met price per Mt sold ($/Mt)
191.6
131.6
60.0
45.6%
Mining costs and higher coal revenues.

Buchanan

 

 

For Three Months Ended June 30,

 

 

 

($ in thousands)

 

 

 

2019

 

2018

 

Change

 

%

 

Sales Volume (MMt)

 

1.2

 

1.2

 

—

 

—

 

Total revenues ($)

 

128,713

 

126,292

 

2,421

 

1.9

%

Coal revenues ($)

 

128,664

 

126,292

 

2,372

 

1.9

%

Average realized price per Mt sold ($/Mt)

 

103.0

 

104.9

 

(1.9

)

(1.8

)%

Met Sales Volume (MMt)

 

1.2

 

1.1

 

0.1

 

9.1

%

Met coal Revenues ($)

 

125,837

 

122,771

 

3,066

 

2.5

%

Average realized met price per Mt sold ($/Mt)

 

104.8

 

107.3

 

(2.5

)

(2.3

)%

Mining costs ($)

 

64,605

 

66,469

 

(1,864

)

(2.8

)%

Mining cost per Mt sold ($/Mt)

 

51.7

 

55.2

 

(3.5

)

(6.3

)%

Operating costs ($)

 

68,472

 

91,049

 

(22,577

)

(24.8

)%

Operating costs per Mt sold ($/Mt)

 

54.8

 

75.7

 

(20.9

)

(27.6

)%

Segment Adjusted EBITDA ($)

 

60,289

 

35,257

 

25,032

 

71.0

%

($)

132,380
109,385
22,995
21.0%
Mining cost per Mt sold ($/Mt)
81.4
62.7
18.7
29.8%
Operating costs ($)
182,031
143,145
38,886
27.2%
Operating costs per Mt sold ($/Mt)
107.7
79.9
27.8
34.8%
Segment Adjusted EBITDA ($)
145,890
88,441
57,449
65.0%
Coal revenuerevenues increased by $2.4$95.8 million,
or 1.9%41.5%, to $128.7$326.5 million for
the three months ended JuneSeptember 30, 2019 as
2022 compared
to $230.7
million for
the three
months
ended September
30, 2021.
This
increase was
largely
driven by
a higher
average realized
Met price
per Mt
sold for
the three
months ended
September 30,
2022 of
$191.6, compared to $126.3$131.6 per Mt sold for the same period in 2021, due to continued strong U.S.-sourced
coal
demand, particularly into China and Europe due to continuing impacts
on global supply dynamics caused by the
Russia and Ukraine conflict. Additionally,
coal from our U.S. Operations continued to experience strong demand
from China as import restrictions on Australian coal remain
in place.
Operating costs
increased by
$38.9 million,
or 27.2%,
to $182.0 million
for the three
months ended
September
30, 2022, compared
to operating
costs of
$143.1 million
for the
three months
ended September
30, 2021.
The
increase was due to higher purchased coal to meet sales commitments and higher mining costs of $23.0 million,
as a result of higher production costs due to the impact
of inflation of supplies and labor costs.
Segment Adjusted EBITDA of
$145.9 million for the
three months ended JuneSeptember 30, 2018. This increase was
2022 increased by $57.5
million compared to
$88.4 million for
the three months
ended September 30,
2021,
primarily driven
by a higher
average realized Met coal sales volumes of 0.1 MMt or 9.1%.  This was price per Mt sold,
partially offset by a lower average realized price due to import tariffs on U.S. coal imposed by China during the quarter.

Operating costs decreased by $22.6 million, or 24.8%, for the three months ended June 30, 2019 compared to the three months ended June 30, 2018.  This decrease was primarily driven by the CONSOL Energy contingent royalty of $19.4 million related to the mark-to-market adjustment and one less year remaining in the contingent payment period.  Prior year reflects a significant adjustment for higher forecast export pricing related to the mark-to-market calculation.  In addition, royalty expense was lower by $1.4 million related to a higher percentage of owned production (no royalty) mined in the second quarter 2019 compared to second quarter 2018.  Additionally, mining costs decreased by $1.9 million.  The decrease in operating costs resulted in a corresponding decrease of operating cost per ton of $20.9/t for the three months ended June 30, 2019 compared to the three months ended June 30, 2018, as there was no significant change to sales volumes when comparing the two periods.

For the three months ended June 30, 2019 adjusted EBITDA improved $25.0 million, or 71%, compared to the comparative quarter.  The improvement was primarily generated by the favorable mark-to-market adjustments related to the CONSOL Energy contingent royalty and lower royalties related to mining a higher percentage of owned coal versus leased coal.  In addition, higher Met sales and lower mine costs contributed to the improved performance.  This was partially offset by lower average realized pricing related to import tariffs on U.S. coal imposed by China.

Logan

 

 

For Three Months Ended June 30,

 

 

 

($ in thousands)

 

 

 

2019

 

2018

 

Change

 

%

 

Sales Volume (MMt)

 

0.7

 

0.7

 

—

 

—

 

Total revenues ($)

 

81,610

 

59,230

 

22,380

 

37.8

%

Coal revenues ($)

 

80,111

 

59,230

 

20,881

 

35.3

%

Average realized price per Mt sold ($/Mt)

 

119.7

 

84.6

 

35.1

 

41.5

%

Met Sales Volume (MMt)

 

0.5

 

0.4

 

0.1

 

25.0

%

Met coal Revenues ($)

 

68,053

 

47,443

 

20,610

 

43.4

%

Average realized met price per Mt sold ($/Mt)

 

146.1

 

106.8

 

39.3

 

36.8

%

Mining costs ($)

 

53,714

 

44,840

 

8,874

 

19.8

%

Mining cost per Mt sold ($/Mt)

 

80.3

 

64.1

 

16.2

 

25.3

%

Operating costs ($)

 

63,689

 

50,185

 

13,504

 

26.9

%

Operating costs per Mt sold ($/Mt)

 

95.2

 

71.7

 

23.5

 

32.8

%

Segment Adjusted EBITDA ($)

 

18,126

 

10,710

 

7,416

 

69.2

%

Coal revenues increased by $20.9 million, or 35.3%, to $80.1 million for the three months ended June 30, 2019 as compared to $59.2 million for the three months ended June 30, 2018. This improvement was driven by increased Met coal sales volume and a higher average realized price for high volatile coal, due to committed sales contracts and to improved sales mix.

Total operating costs increased $13.5 million, to $63.7 million for the three months ended June 30, 2019, compared to operating costs of $50.2 million for the three months ended June 30, 2018.  The increase was primarily due to higher cost production at existing operations, driven by mining conditions, and production set-up costs related to three additional mines coming online in 2019.  Additionally, freight expense increased due to new sales contracts, which includes the cost of rail and port services to certain customers.  The increase in operating costs resulted in a corresponding increase of operating cost per ton of $19.3/t for the three months ended June 30, 2019 compared to the three months ended June 30, 2018, as there was no significant change to sales volumes when comparing the two periods.

Adjusted EBITDA for the three months ended June 30, 2019 increased $7.4 million, or 69.2%, to $18.1 million, compared to $10.7 million for the three months ended June 30, 2018.  Improved performance relates to increased demand and higher prices for high volatile coal on committed contracts.  Partially offsetting this is higher cost production and a change in the production mix, with the addition of the three new operations.

Greenbrier

 

 

For Three Months Ended June 30,

 

 

 

($ in thousands)

 

 

 

2019

 

2018

 

Change

 

%

 

Sales Volume (MMt)

 

0.1

 

0.2

 

(0.1

)

(50.0

)%

Total revenues ($)

 

19,324

 

18,292

 

1,032

 

5.6

%

Coal revenues ($)

 

18,212

 

17,454

 

758

 

4.3

%

Average realized price per Mt sold ($/Mt)

 

145.6

 

99.9

 

45.7

 

45.7

%

Met Sales Volume (MMt)

 

0.1

 

0.2

 

(0.1

)

(50.0

)%

Met coal Revenues ($)

 

17,766

 

17,427

 

339

 

1.9

%

Average realized met price per Mt sold ($/Mt)

 

155.7

 

100.0

 

55.7

 

55.7

%

Mining costs ($)

 

12,714

 

16,335

 

(3,621

)

(22.2

)%

Mining cost per Mt sold ($/Mt)

 

101.6

 

93.5

 

8.1

 

8.7

%

Operating costs ($)

 

18,135

 

18,482

 

(347

)

(1.9

)%

Operating costs per Mt sold ($/Mt)

 

145.0

 

105.8

 

39.2

 

37.1

%

Segment Adjusted EBITDA ($)

 

1,227

 

(188

)

1,415

 

(752.7

)%

Coal revenues increased by $0.8 million, or 4.3%, to $18.2 million for the three months ended June 30, 2019 as compared to $17.5 million for the three months ended June 30, 2018. This increase was driven by higher average realized pricing, partly offset by lower sales volumes.  The lower sales volume is primarily related to the exhaustion of the Pollock Knob reserve, lack of purchased coal available for blending, and lower production volume due to adverse geological mining conditions and equipment downtime.

Total operating costs at Greenbrier for the three months ended June 30, 2019, were relatively in line with total operating costs for the three months ended June 30, 2018.  However, operating costs per ton increased $39.2 per ton due to lower sales volumes and additional freight expenses driven by new rail and port arrangements with certain customers that did not exist in the comparative period.

Adjusted EBITDA improved $1.4 million, resulting in $1.2 million of EBITDA for the three months ended June 30, 2019, compared to EBITDA of ($0.2) million for the three months ended June 30, 2018.  Improved performance was primarily related to increased demand for mid vol coal and higher average realized pricing.

costs.

Corporate and Other Adjusted EBITDA

The following table presents a summary of the components
of Corporate and Other Adjusted EBITDA:

 

 

For Three Months Ended June 30,

 

 

 

($ in thousands)

 

 

 

2019

 

2018

 

$
Change

 

%
Change

 

Salaries

 

3,433

 

3,165

 

268

 

8.5

%

Professional and consultancy fees

 

3,587

 

3,601

 

(14

)

(0.4

)%

Office and operational fees

 

559

 

909

 

(350

)

(38.5

)%

Dues, registration fees and licenses

 

71

 

87

 

(16

)

(18.4

)%

Gain on foreign exchange swap

 

—

 

—

 

—

 

—

 

Other

 

1,262

 

(1,192

)

2,454

 

(205.9

)%

Total Corporate and Other Adjusted EBITDA

 

8,912

 

6,570

 

2,342

 

35.6

%

Three months ended September 30,
2022
2021
Change
%
(in US$ thousands)
Selling, general, and administrative expenses
$
10,405
$
8,042
$
2,363
29.4%
Other, net
(56)
42
(98)
n/m
Total
Corporate and Other Adjusted EBITDA loss
$
10,349
$
8,084
$
2,265
28.0%
n/m – Not meaningful for comparison.
Corporate and
other costs
of $8.9 $10.4
million for
the three
months ended
September 30,
2022 increased
$2.3 million,
compared to $8.1 million for
the three months ended June September
30, 2019 increased $2.3 million compared 2021. The increase in
selling, general, and
administrative
expenses
was
primarily
driven
by
corporate
activities
partially
resuming
to $6.6 million for the three months ended June
pre-COVID-19
pandemic levels and timing of certain corporate costs.
Coronado Global Resources Inc.
Form 10-Q September 30, 2018. The 2018 period included fair value mark-to-market gains with respect to interest rate swaps of $3.4 million.

2022

32
Mining and operating
costs for Three Months Ended June the
three months
ended September
30, 2019 Compared 2022 compared
to Three Months Ended Junethree
months
ended September 30, 2018

2021

A reconciliation of
segment costs and
expenses, segment operating
costs, and segment
mining costs is
shown
below:

 

 

For Three Months Ended June 30, 2019

 

 

 

($ in thousands)

 

 

 

Curragh

 

Buchanan

 

Logan

 

Greenbrier

 

Other /
Corporate

 

Total
Consolidated

 

Total costs and expenses

 

283,948

 

80,212

 

70,626

 

22,006

 

9,050

 

465,842

 

Less: Selling, general and administrative expense

 

(282

)

—

 

—

 

—

 

(8,960

)

(9,242

)

Less: Depreciation, depletion and amortization

 

(22,870

)

(11,740

)

(6,937

)

(3,871

)

(90

)

(45,508

)

Total operating costs

 

260,796

 

68,472

 

63,689

 

18,135

 

—

 

411,092

 

Less: Other royalties

 

(39,209

)

(3,506

)

(5,302

)

(1,056

)

—

 

(49,073

)

Less: Stanwell rebate

 

(45,847

)

—

 

—

 

—

 

—

 

(45,847

)

Less: Freight expenses

 

(42,636

)

(361

)

(4,673

)

(4,365

)

—

 

(52,035

)

Total mining costs

 

133,104

 

64,605

 

53,714

 

12,714

 

—

 

264,137

 

 

 

For Three Months Ended June 30, 2018

 

 

 

($ in thousands)

 

 

 

Curragh

 

Buchanan

 

Logan

 

Greenbrier

 

Other /
Corporate

 

Total
Consolidated

 

Total costs and expenses

 

309,469

 

101,559

 

56,874

 

21,859

 

8,074

 

497,835

 

Less: Selling, general and administrative expense

 

(439

)

—

 

—

 

—

 

(8,074

)

(8,513

)

Less: Depreciation, depletion and amortization

 

(22,018

)

(10,510

)

(6,689

)

(3,377

)

—

 

(42,594

)

Total operating costs

 

287,012

 

91,049

 

50,185

 

18,482

 

—

 

446,728

 

Less: Other royalties

 

(38,241

)

(24,279

)

(3,869

)

(1,306

)

—

 

(67,695

)

Less: Stanwell rebate

 

(32,812

)

—

 

—

 

—

 

—

 

(32,812

)

Less: Freight expenses

 

(38,294

)

(301

)

(1,476

)

(841

)

—

 

(40,912

)

Total mining costs

 

177,665

 

66,469

 

44,840

 

16,335

 

—

 

305,309

 

Six Months Ended June 30, 2019 Compared to Six Months Ended June 30, 2018

Curragh

The unaudited pro forma supplemental financial data of Curragh for the six

Three months ended JuneSeptember 30, 2018, presented 2022
(in the table below, has been derived from the unaudited consolidated pro forma statements of operations included in this Form 10-QUS$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and gives effect to each of the Curragh acquisition as if it had occurred on January 1, 2018. The commentary below compares Curragh’s result for the six months ended June 30, 2019 to the pro forma results for the six months ended June 30, 2018 to provide more meaningful analysis of the segment performance.

 

 

For Six Months Ended June 30,

 

 

 

($ in thousands)

 

 

 

2019

 

Pro
forma
2018

 

Change

 

%

 

Sales Volume (MMt)

 

6.4

 

5.8

 

0.6

 

10.3

%

Total revenues ($)

 

794,182

 

703,879

 

90,303

 

12.8

%

Coal revenues ($)

 

775,942

 

688,028

 

87,914

 

12.8

%

Average realized price per Mt sold ($/Mt)

 

121.5

 

118.8

 

2.7

 

2.3

%

Met Sales Volume (MMt)

 

4.8

 

4.1

 

0.7

 

17.1

%

Met coal Revenues ($)

 

727,964

 

638,811

 

89,153

 

14.0

%

Average realized met price per Mt sold ($/Mt)

 

152.3

 

154.7

 

(2.4

)

(1.5

)%

Mining costs ($)

 

272,201

 

323,171

 

(50,970

)

(15.8

)%

Mining cost per Mt sold ($/Mt)

 

42.6

 

55.8

 

(13.2

)

(23.6

)%

Operating costs ($)

 

522,169

 

541,710

 

(19,541

)

(3.6

)%

Operating costs per Mt sold ($/Mt)

 

81.8

 

93.6

 

(11.8

)

(12.6

)%

Segment Adjusted EBITDA ($)

 

271,709

 

164,764

 

106,945

 

64.9

%

A reconciliation of unaudited pro forma financial data is shown below:

 

 

Historical Curragh
in US GAAP

 

Post-Acquisition

 

For six months
Ended
June 30,

 

($ in thousands)

 

January 1, 2018 -
March 29, 2018

 

March 30, 2018 -
June 30, 2018

 

Total Pro forma
2018

 

Sales Volume (MMt)

 

2.7

 

3.1

 

5.8

 

Total revenues ($)

 

316,500

 

387,379

 

703,879

 

Coal revenues ($)

 

313,494

 

374,534

 

688,028

 

Average realized price per Mt sold ($/Mt)

 

114.3

 

121.2

 

118.8

 

Met Sales Volume (MMt)

 

1.9

 

2.2

 

4.1

 

Met coal Revenues ($)

 

289,325

 

349,486

 

638,811

 

Average realized met price per Mt sold ($/Mt)

 

150.6

 

158.3

 

154.7

 

Mining costs ($)

 

145,506

 

177,699

 

323,205

 

Mining cost per Mt sold ($/Mt)

 

53.1

 

57.5

 

55.8

 

Operating costs ($)

 

254,698

 

286,913

 

541,611

 

Operating costs per Mt sold ($/Mt)

 

94.3

 

92.9

 

93.6

 

Segment Adjusted EBITDA ($)

 

64,785

 

99,979

 

164,764

 

($ in thousands)

 

Historical Curragh
in US GAAP

 

Post-Acquisition

 

For six months
Ended
June 30,

 

Curragh Segment Pro forma
Reconciliation to Adjusted EBITDA:

 

January 1, 2018 -
March 29, 2018

 

March 30, 2018 -
June 30, 2018

 

Total Pro forma
2018

 

Net Income (loss)

 

(308,947

)

54,217

 

(254,730

)

Add: Income tax expense (benefit)

 

17,772

 

23,867

 

41,639

 

Add: Interest expense (net of income)

 

341,703

 

(124

)

341,579

 

Add: Depreciation, depletion and amortization

 

14,257

 

22,019

 

36,276

 

Adjusted EBITDA

 

64,785

 

99,979

 

164,764

 

Pro forma coal revenues increased by $87.9 million, or 12.8%, to $775.9 million for the six months ended June 30, 2019 as compared to $688.0 million for the six months ended June 30, 2018. This increase was driven by higher Met coal sales volumes which increased 0.7 MMt or 17.1%, to 4.8MMt for the six months ended June 30, 2019 as compared to 4.1 MMt for the six months ended June 30, 2018.

Pro forma

expenses
$
475,496
$
202,167
$
10,686
$
688,349
Less: Selling, general and administrative
expense
—
—
(10,405)
(10,405)
Less: Depreciation, depletion and amortization
(17,091)
(20,136)
(281)
(37,508)
Total operating costs decreased by $19.5 million, or 3.6%, to $522.2 million for the six months ended June 30, 2019 compared to $541.7 million in the six months ended June 30, 2018 primarily driven by a decrease in
458,405
182,031
—
640,436
Less: Other royalties
(122,820)
(14,511)
—
(137,331)
Less: Stanwell rebate
(54,575)
—
—
(54,575)
Less: Freight expenses
(37,885)
(25,141)
—
(63,026)
Less: Other non-mining costs
(1,451)
(9,999)
—
(11,450)
Total mining costs per

Mt sold of $42.6 per ton as compared to $55.8 per ton for the six months ended June 30, 2018. Pro forma mining

241,674
132,380
—
374,054
Sales Volume excluding non-produced
coal
(MMt)
2.4
1.6
—
4.0
Mining cost per Mt sold was higher($/Mt)
99.8
81.4
—
92.4
Three months ended September 30, 2021
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and
expenses
$
294,219
$
162,866
$
8,349
$
465,434
Less: Selling, general and administrative
expense
—
—
(8,044)
(8,044)
Less: Depreciation, depletion and amortization
(18,435)
(19,721)
(305)
(38,461)
Total operating costs
275,784
143,145
—
418,929
Less: Other royalties
(30,835)
(8,264)
—
(39,099)
Less: Stanwell rebate
(12,274)
—
—
(12,274)
Less: Freight expenses
(39,974)
(18,069)
—
(58,043)
Less: Other non-mining costs
(11,864)
(7,427)
—
(19,291)
Total mining costs
180,837
109,385
—
290,222
Sales Volume excluding non-produced
coal
(MMt)
2.7
1.7
—
4.4
Mining cost per Mt sold ($/Mt)
67.4
62.7
—
65.6
Average realized Met
price per Mt
sold for the six months ended June 30, 2018 due to: (1) the unwind of a $21.4 million fair value adjustment recognized to coal inventories on acquisition of Curragh that was unwound during the
three months ended June September
30, 2018 as2022 compared
to three
months ended September 30, 2021
A reconciliation of the Company’s average realized
Met price per Mt sold is shown below:
Three months ended September 30,
2022
2021
Change
%
(in US$ thousands)
Met sales volume (MMt)
3.3
3.7
(0.4)
(11.9)%
Met coal wasrevenues ($)
827,619
534,594
293,025
54.8%
Average realized Met price per Mt sold and (2) unplanned outages at the wash plant. The decrease ($/Mt)
253.0
144.0
109.0
75.7%
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
33
Nine months ended September 30, 2022 compared to
Nine months ended September 30, 2021
Australia
Nine months ended September 30,
2022
2021
Change
%
(in pro forma operatingUS$ thousands)
Sales volume (MMt)
7.5
8.5
(1.0)
(11.6)%
Total
revenues ($)
1,730,172
832,098
898,074
107.9%
Coal revenues ($)
1,701,901
804,757
897,144
111.5%
Average realized price per Mt sold ($/Mt)
225.9
94.5
131.4
139.2%
Met sales volume (MMt)
5.0
6.3
(1.3)
(20.5)%
Met coal revenues ($)
1,615,364
734,143
881,221
120.0%
Average realized Met price per Mt sold ($/Mt)
323.9
117.0
206.9
176.8%
Mining costs were partially offset by higher Stanwell rebates which increased by $9.0 million due mainly to higher sales volumes.

($)

648,965
535,568
113,397
21.2%
Mining cost per Mt sold ($/Mt)
89.3
65.7
23.6
36.0%
Operating costs ($)
1,206,022
801,837
404,185
50.4%
Operating costs per Mt sold ($/Mt)
160.1
94.1
66.0
70.1%
Segment Adjusted EBITDA ($)
523,319
30,445
492,874
1,618.9%
Coal
revenues
for
our
Australian
Operations
for
the
nine
months
ended
September
30,
2022
were
$1,701.9
million,
an
increase
of
$897.1
million,
or
111.5%,
compared
to
$804.8
million
for
the
nine
months
ended
September 30,
2021. This
increase was
due to
a higher
average realized
Met price
per Mt
sold of
$323.9, an
increase
of
$206.9
per Mt
sold, compared
to
$117.0
per Mt
sold
during
the
same
period
in
2021. The
higher
realized
price
during
the
period
was
primarily
driven
by
disruption
in
supply
dynamics
caused
by
the
conflict
between Russia and Ukraine, as well as recent supply constraints from key Met coal markets due to unseasonal
wet weather and logistical issues. Sales volume of 7.5 MMt
was 1.0 MMt lower compared to 8.5 MMt for
the six nine
months ended JuneSeptember 30, 2019
2021, mainly driven
by significant wet
weather events experienced which
impacted
coal availability to during the 2022 period.
Operating
costs
increased
by
$404.2
million,
or
50.4%,
for
the
nine
months
ended
September
30,
2022,
compared
to
the
nine
months
ended
September
30,
2021.
The
increase
was $271.7
driven
by
higher
mining
costs,
increased
purchase
of
coal
costs
to
meet
sales
commitments,
higher
Stanwell
rebate
(mainly
due
to
higher
realized coal
pricing) and
greater royalties
due to
higher revenues
and adverse
impact of
the amended
royalty
regime
introduced
by
the
Queensland
Government
applicable
from
July
1,
2022.
Mining
costs
were
$113.4
million, an improvementor 48.1%, higher for
the nine months ended September
30, 2022 compared to the
same period in 2021,
primarily
due
to
inflationary
pressures
and
additional
contract
fleets
mobilized
during
first
half
of
2022
at
our
Australian
Operations,
partially
offset
by
favorable
average
foreign
exchange
on
translation
of
our
Australian
Operations to US$. Increased costs combined with lower sales volumes resulted in higher Mining and Operating
costs per Mt sold of $106.9$23.6 and $66.0, respectively,
compared to the same period in 2021.
For the
nine months
ended September
30, 2022,
Adjusted EBITDA
increased by
$492.9 million, (or 64.9%) over the pro forma
compared
to
Adjusted EBITDA of
$30.4 million for the six
nine months ended June
September 30, 2018.  Lower operating costs and2021.
This increase was
primarily
driven by higher coal revenues were two key factors that contributed to thepartially offset
by higher Adjusted EBITDA.

Buchanan

 

 

For Six Months Ended June 30,

 

 

 

($ in thousands)

 

 

 

2019

 

2018

 

Change

 

%

 

Sales Volume (MMt)

 

2.4

 

2.4

 

—

 

—

 

Total revenues ($)

 

251,437

 

260,501

 

(9,064

)

(3.5

)%

Coal revenues ($)

 

251,353

 

260,462

 

(9,109

)

(3.5

)%

Average realized price per Mt sold ($/Mt)

 

103.9

 

109.3

 

(5.4

)

(5.0

)%

Met Sales Volume (MMt)

 

2.3

 

2.3

 

—

 

—

 

Met coal Revenues ($)

 

245,047

 

253,335

 

(8,288

)

(3.3

)%

Average realized met price per Mt sold ($/Mt)

 

106.0

 

111.8

 

(5.8

)

(5.2

)%

Mining costs ($)

 

130,286

 

123,877

 

6,409

 

5.2

%

Mining cost per Mt sold ($/Mt)

 

53.8

 

52.0

 

1.8

 

3.5

%

Operating costs ($)

 

135,095

 

160,814

 

(25,719

)

(16.0

)%

Operating costs per Mt sold ($/Mt)

 

55.8

 

67.5

 

(11.7

)

(17.3

)%

Segment Adjusted EBITDA ($)

 

116,401

 

99,701

 

16,700

 

16.8

%

operating costs.

Coronado Global Resources Inc.
Form 10-Q September 30, 2022
34
United States
Nine months ended September 30,
2022
2021
Change
%
(in US$ thousands)
Sales volume (MMt)
4.9
4.9
—
(1.8)%
Total
revenues ($)
1,124,314
541,860
582,454
107.5%
Coal revenues decreased($)
1,119,433
539,496
579,937
107.5%
Average realized price per Mt sold ($/Mt)
230.5
109.0
121.5
111.4%
Met sales volume (MMt)
4.7
4.8
(0.1)
(1.4)%
Met coal revenues ($)
1,098,186
534,017
564,169
105.6%
Average realized Met price per Mt sold ($/Mt)
232.4
111.5
120.9
108.4%
Mining costs ($)
396,562
307,732
88,830
28.9%
Mining cost per Mt sold ($/Mt)
85.0
63.0
22.0
35.0%
Operating costs ($)
547,632
380,412
167,220
44.0%
Operating costs per Mt sold ($/Mt)
112.8
76.9
35.9
46.7%
Segment Adjusted EBITDA ($)
578,183
164,404
413,779
251.7%
Coal revenues increased by $9.1$579.9 million, or 3.5%107.5%, to $251.4
$1,119.4 million for the sixnine months ended June September
30, 2019
2022,
as
compared
to $260.5
$539.5
million
for
the six
nine
months
ended June 
September
30, 2018.
2021.
This decrease
increase
was driven by lower average realized price due to import tariffs on U.S. coal imposed by China and changes to the sales mix, partially offset by stronger pricing on domestic Met sales.

Total operating costs improved $25.7 million to $135.1 million for the six months ended June 30, 2019, compared to operating costs of $160.8 million for the six months ended June 30, 2018.  The improvement was primarily related to the mark-to-market adjustment for the CONSOL Energy contingent royalty and mining a greater percentage of owned coal versus leased coal.  This improvement was partially offset by increased mining costs of $6.4 million due to adverse mining conditions.  The overall improvement in operating costs resulted in a corresponding improvement in operating costs per ton of $11.7/t for the six months ended June 30, 2019, compared to the six months ended June 30, 2018, as there was no significant change to sales volumes when comparing the two periods.

Adjusted EBITDA for the six months ended June 30, 2019 was $116.4 million, an improvement of $16.7 million (or 16.8%) over the six months ended June 20, 2018.  Lower royalties related to the CONSOL Energy contingent royalty and mining a greater percentage of owned coal versus lease coal were partially offset by higher mine costs resulting from adverse mining conditions.

Logan

 

 

For Six Months Ended June 30,

 

 

 

($ in thousands)

 

 

 

2019

 

2018

 

Change

 

%

 

Sales Volume (MMt)

 

1.3

 

1.3

 

—

 

—

 

Total revenues ($)

 

155,919

 

112,655

 

41,264

 

36.6

%

Coal revenues ($)

 

153,629

 

112,655

 

40,974

 

36.4

%

Average realized price per Mt sold ($/Mt)

 

114.4

 

84.8

 

29.6

 

34.9

%

Met Sales Volume (MMt)

 

0.9

 

0.9

 

—

 

—

 

Met coal Revenues ($)

 

131,421

 

93,201

 

38,220

 

41.0

%

Average realized met price per Mt sold ($/Mt)

 

139.0

 

103.4

 

35.6

 

34.5

%

Mining costs ($)

 

104,765

 

89,175

 

15,590

 

17.5

%

Mining cost per Mt sold ($/Mt)

 

78.0

 

67.1

 

10.9

 

16.2

%

Operating costs ($)

 

120,925

 

99,444

 

21,481

 

21.6

%

Operating costs per Mt sold ($/Mt)

 

90.0

 

74.8

 

15.2

 

20.3

%

Segment Adjusted EBITDA ($)

 

35,291

 

15,501

 

19,790

 

127.7

%

Coal revenue increased by $41.0 million, or 36.4%, to $153.6 million for the six months ended June 30, 2019 as compared to $112.7 million for the six months ended June 30, 2018. This increase was

mainly driven by a higher average realized Met price per Mt sold for high volatile coal due to higher committed contract prices, as well as improvements to the sales mix.

For the six nine

months ended JuneSeptember 30, 2019 total operating2022
of $232.4
compared
to $111.5
per Mt
sold for
the same
period
in 2021.
The increase
reflected a
strong price
environment and high demand of U.S.-sourced coal
into China and Europe.
Operating costs at Logan increased $21.5
by $167.2 million,
or 21.6%44.0%, to $120.9 million compared to $99.4
$547.6
million for the six
nine months ended June 
September
30, 2018.  Mining costs increased $15.6 million, primarily due2022,
compared to higher cost production at existing operations, driven by mining conditions, and production costs related to three additional mines coming online in 2019.  Freight expense increased $2.9 million driven by new rail and port arrangements with certain customers that did not exist in the comparative period.  Other royalties increased $3.0 million due to higher revenues.  The increase in
operating costs resulted in a corresponding increase
of operating cost per ton of $15.2/t$380.4
million for
the six nine
months ended June
September 30, 2019,
2021.
The
increase
was primarily
due
to
higher
mining
costs
of
$88.8
million,
increase
of
28.9%
compared
to
the
same
period in
2021, as
a result
of adverse
geological conditions
causing higher
maintenance costs,
an increase
in
purchase
coal
costs
to
meet
sales
commitments,
higher
subcontractor’s
cost
due
to
labor
shortages
and
inflationary pressure on labor,
materials and supplies.
Adjusted
EBITDA
increased
by
$413.8
million,
or
251.7%,
for
the
nine
months
ended
September
30,
2022
compared to the six months ended June 30, 2018, as there was no significant change to sales volumes when comparing the two periods.

Adjusted

EBITDA improved by $19.8 million to $35.3 of $164.4
million for the six
nine months ended June
September 30, 2019, compared to $15.5 million for the six months ended June 30, 2018, a 127.7% 2021. This
increase as the $41.0 million increase in coal revenues more than offset the $21.5 million of increased operating costs.

Greenbrier

 

 

For Six Months Ended June 30,

 

 

 

($ in thousands)

 

 

 

2019

 

2018

 

Change

 

%

 

Sales Volume (MMt)

 

0.2

 

0.4

 

(0.2

)

(50.0

)%

Total revenues ($)

 

32,797

 

38,188

 

(5,391

)

(14.1

)%

Coal revenues ($)

 

31,563

 

36,695

 

(5,132

)

(14.0

)%

Average realized price per Mt sold ($/Mt)

 

133.6

 

101.4

 

32.2

 

31.8

%

Met Sales Volume (MMt)

 

0.2

 

0.3

 

(0.1

)

(33.3

)%

Met coal Revenues ($)

 

31,067

 

35,982

 

(4,915

)

(13.7

)%

Average realized met price per Mt sold ($/Mt)

 

138.3

 

104.1

 

34.2

 

32.9

%

Mining costs ($)

 

26,445

 

33,905

 

(7,460

)

(22.0

)%

Mining cost per Mt sold ($/Mt)

 

111.9

 

93.7

 

18.2

 

19.4

%

Operating costs ($)

 

32,965

 

38,305

 

(5,340

)

(13.9

)%

Operating costs per Mt sold ($/Mt)

 

139.5

 

105.9

 

33.6

 

31.7

%

Segment Adjusted EBITDA ($)

 

(81

)

983

 

(1,064

)

(108.2

)%

Coal revenue decreased by $5.1 million, or 14.0%, to $31.6 million for the six months ended June 30, 2019, as compared to $36.7 million for the six months ended June 30, 2018. This decrease

was primarily driven by lower sales volumes, higher average realized Met price
per Mt sold,
partially offset by higher average realized price. The lower sales volume is primarily related to the exhaustion of the Pollock Knob reserve, lack of purchased coal available for blending, and lower production volume due to adverse geological mining conditions and equipment downtime.

For the six months ended June 30, 2019, total operating costs improved by $5.3 million to $33.0 million, compared to costs of $38.3 million for the six months ended June 30, 2018.  The improvement was primarily due to lower sales volumes, partially offset by an increase in freight expense driven by new rail and port arrangements with certain customers that did not exist in the comparative period.  Operating cost per ton increased by $31.7 to $139.5, of which approximately $18/t was due the increased freight expenses.  Additionally, lower production volumes related to the exhaustion of the Pollock Knob reserve and to adverse geological mining conditions and equipment downtime, impacted average cost per ton.

Adjusted EBITDA declined $1.1 million on lower sales volume to ($0.1) million for the six months ended June 30, 2019, compared to adjusted EBITDA of $1.0 million for the six months ended June 30, 2018.

costs.

Corporate and Other Adjusted EBITDA

The following table presents a summary of the components
of Corporate and Other Adjusted EBITDA:

 

 

For Six Months Ended June 30,

 

 

 

($ in thousands)

 

 

 

2019

 

2018

 

$
Change

 

%
Change

 

Salaries

 

6,344

 

4,695

 

1,649

 

35.1

%

Professional and consultancy fees

 

7,362

 

10,182

 

(2,820

)

(27.7

)%

Office and operational fees

 

1,045

 

1,191

 

(146

)

(12.3

)%

Dues, registration fees and licenses

 

107

 

33,103

 

(32,996

)

(99.7

)%

Loss on foreign exchange swap

 

—

 

15,695

 

(15,695

)

(100.0

)%

Other

 

3,107

 

9,470

 

(6,363

)

(67.2

)%

Total Corporate and Other Adjusted EBITDA

 

17,965

 

74,336

 

(56,371

)

(75.8

)%

Nine months ended September 30,
2022
2021
Change
%
(in US$ thousands)
Selling, general, and administrative expenses
$
28,657
$
21,244
$
7,413
34.9%
Other, net
(78)
164
(242)
(147.6)%
Total
Corporate and Other Adjusted EBITDA loss of $74.3
$
28,579
$
21,408
$
7,171
33.5%
Corporate and other costs
increased $7.2 million to
$28.6 million for the six
nine months ended June September
30, 2018 includes one-time costs2022,
as compared to
$21.4 million for
the nine months
ended September
30, 2021. The
increase in relation selling,
general,
and
administrative
expenses
was
primarily
driven
by
corporate
activities
partially
resuming
to professional
pre-COVID-19
pandemic levels and consultancy fees and stamp dutytiming of $33.0 million and a loss on foreign exchange certain corporate costs.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
35
Mining and
operating costs
for Six Months Ended June the
Nine months
ended September
30, 2019 Compared2022
compared to Six Months Ended June
Nine months
ended September 30, 2018

2021

A reconciliation of
segment costs and
expenses, segment operating
costs, and segment
mining costs is
shown
below:
Nine months ended September 30, 2022
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and
expenses
$
1,270,397
$
609,291
$
29,524
$
1,909,212
Less: Selling, general and administrative
—
—
(28,657)
(28,657)
Less: Depreciation, depletion and amortization
(64,375)
(61,659)
(867)
(126,901)
Total operating costs
1,206,022
547,632
—
1,753,654
Less: Other royalties
(259,140)
(40,571)
—
(299,711)
Less: Stanwell rebate
(124,160)
—
—
(124,160)
Less: Freight expenses
(116,386)
(72,930)
—
(189,316)
Less: Other non-mining costs
(57,371)
(37,569)
—
(94,940)
Total mining costs
648,965
396,562
—
1,045,527
Sales Volume excluding non-produced
coal
7.3
4.7
—
11.9
Mining cost per Mt sold ($/Mt)
89.3
85.0
—
87.6
Nine months ended September 30, 2021
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and
expenses
$
872,875
$
443,696
$
21,982
$
1,338,553
Less: Selling, general and administrative
expense
—
—
(21,250)
(21,250)
Less: Restructuring costs
(2,300)
—
—
(2,300)
Less: Depreciation, depletion and amortization
(68,738)
(63,284)
(732)
(132,754)
Total operating costs
801,837
380,412
—
1,182,249
Less: Other royalties
(63,873)
(19,346)
—
(83,219)
Less: Stanwell rebate
(43,169)
—
—
(43,169)
Less: Freight expenses
(122,061)
(44,029)
—
(166,090)
Less: Other non-mining costs
(37,166)
(9,305)
—
(46,471)
Total mining costs
535,568
307,732
—
843,300
Sales Volume excluding non-produced
coal
8.2
4.9
—
13.1
Mining cost per Mt sold ($/Mt)
65.7
63.0
—
64.7
Average realized Met price per Mt sold for the Nine months ended September 30, 2022 compared to Nine
months ended September 30, 2021
A reconciliation of segment costs and expenses, segment operating costs, and segment mining coststhe Company’s average realized
Met price per Mt sold is shown below:

 

 

For Six Months Ended June 30, 2019

 

 

 

($ in thousands)

 

 

 

Curragh

 

Buchanan

 

Logan

 

Greenbrier

 

Other /
Corporate

 

Total
Consolidated

 

Total costs and expenses

 

564,658

 

157,770

 

134,457

 

39,703

 

18,156

 

914,744

 

Less: Selling, general and administrative expense

 

(332

)

—

 

—

 

—

 

(17,979

)

(18,311

)

Less: Depreciation, depletion and amortization

 

(42,157

)

(22,675

)

(13,532

)

(6,738

)

(177

)

(85,279

)

Total operating costs

 

522,169

 

135,095

 

120,925

 

32,965

 

—

 

811,154

 

Less: Other royalties

 

(77,100

)

(4,284

)

(9,996

)

(2,042

)

—

 

(93,422

)

Less: Stanwell rebate

 

(94,674

)

—

 

—

 

—

 

—

 

(94,674

)

Less: Freight expenses

 

(78,194

)

(526

)

(6,164

)

(4,478

)

—

 

(89,362

)

Total mining costs

 

272,201

 

130,285

 

104,765

 

26,445

 

—

 

533,696

 

 

 

For Six Months Ended June 30, 2018

 

 

 

($ in thousands)

 

 

 

Curragh

 

Buchanan

 

Logan

 

Greenbrier

 

Other /
Corporate

 

Total
Consolidated

 

Total costs and expenses

 

309,469

 

183,678

 

112,148

 

45,120

 

51,844

 

702,259

 

Less: Selling, general and administrative expense

 

(439

)

—

 

—

 

—

 

(51,844

)

(52,283

)

Less: Depreciation, depletion and amortization

 

(22,019

)

(22,864

)

(12,704

)

(6,815

)

—

 

(64,402

)

Total operating costs

 

287,011

 

160,814

 

99,444

 

38,305

 

—

 

585,574

 

Less: Other royalties

 

(38,242

)

(35,132

)

(7,000

)

(2,613

)

—

 

(82,987

)

Less: Stanwell rebate

 

(32,812

)

—

 

—

 

—

 

—

 

(32,812

)

Less: Freight expenses

 

(38,294

)

(1,805

)

(3,269

)

(1,787

)

—

 

(45,155

)

Total mining costs

 

177,663

 

123,877

 

89,175

 

33,905

 

—

 

424,620

 

Nine months ended September 30,
2022
2021
Change
%
(in US$ thousands)
Met sales volume (MMt)
9.7
11.1
(1.4)
(12.2)%
Met coal revenues ($)
2,713,550
1,268,160
1,445,390
114.0%
Average realized Met price per Mt sold ($/Mt)
279.4
114.6
164.8
143.8%
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
36
Reconciliation of Non-GAAP Financial Measures

Adjusted EBITDA

 

 

For Three Months 
Ended June 30,

 

For Six Months
Ended June 30,

 

 

 

2019

 

2018

 

2019

 

2018

 

 

 

($ in thousands)

 

Reconciliation to Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

Net Income

 

117,506

 

59,322

 

214,326

 

35,651

 

Add: Depreciation, depletion and amortization

 

45,508

 

42,594

 

85,279

 

64,402

 

Add: Interest expense (net of income)

 

9,087

 

18,987

 

17,264

 

25,488

 

Add: Other foreign exchange losses (gains)

 

3,157

 

5,290

 

(557

)

6,848

 

Add: Loss on retirement of debt

 

—

 

—

 

—

 

3,905

 

Add: Income tax expense

 

47,033

 

12,995

 

89,043

 

5,534

 

Adjusted EBITDA

 

222,291

 

139,188

 

405,355

 

141,828

 

Three months ended September 30,
Nine months ended September 30,
(in US$ thousands)
2022
2021
2022
2021
Reconciliation to Adjusted EBITDA:
Net income (loss)
$
150,575
$
81,988
$
712,468
$
(14,069)
Add: Depreciation, depletion and
amortization
37,508
38,461
126,901
132,754
Add: Interest expense (net of income)
17,220
18,251
52,034
49,982
Add: Other foreign exchange (gains) losses
(31,917)
2,487
(55,064)
4,376
Add: Loss on extinguishment of debt
—
—
—
5,744
Add: Income tax expense (benefit)
51,423
9,096
235,391
(1,788)
Add: Restructuring costs
—
—
—
2,300
Add: (Gains) losses on idled assets held for
sale
(1,221)
(113)
621
2,216
Add: (Decrease) increase in provision for
discounting and credit losses
(12)
(2,430)
572
(8,074)
Adjusted EBITDA
$
223,576
$
147,740
$
1,072,923
$
173,441
Liquidity and Capital Resources

Overview

Our objective is
to maintain a
prudent capital structure
and to ensure
that sufficient
liquid assets and
funding is
available to meet both anticipated and
unanticipated financial obligations, including unforeseen events that could
have an
adverse impact
on revenues
or costs.
Our principal
sources of
funds are
cash and
cash equivalents,
cash flow from operations and borrowingsavailability under the SFA.

ABL

Facility.
Our main uses of cash have historically been, and are expected to continue to be, the funding of our
operations,
working capital,
capital
expenditure,
debt
service
obligations,
business
or assets
acquisitions
and capital expenditure, debt service obligations and
payment
of
dividends. Based on our
outlook for the next 12
twelve months, which is
subject to continued changing demand
from
our
customers,
volatility
in
coal
prices,
ongoing
interruptions
and
uncertainties
surrounding
China’s
import
restrictions, such as trade
barriers imposed by China
on Australian sourced coal
and the uncertainty of
impacts
from our customersthe
Russia and volatility in coal prices,
Ukraine war
on the
global supply
chain, we expect to generate
believe expected cash
generated from
operations
together with
available borrowing
facilities and
other strategic
and financial
initiatives, will
be sufficient
to meet
the needs of our existing
operations, capital expenditure,
service our debt obligations
and, fund ourif declared, payment
of dividends.

Our ability to generate
sufficient cash depends
on our future performance
which may be subject
to a number of
factors
beyond
our
control,
including
general
economic,
financial
and
competitive
conditions
and
other
risks
described in this document, Part I,
Item 1A. “Risk Factors” of our registration statement
Annual Report on Form 10, as amended,10-K
for the year ended
December 31,
2021, filed
with the
SEC and
ASX on
February 22,
2022, and
Part II,
Item 1A.
“Risk Factors”
of
our Quarterly
Reports
on Form
10-Q for
the quarterly
periods ended
March 31,
2022 and
June 30,
2022,
filed
with the SEC and ASX on June 28, 2019. Over time, we may seek additional funding from a range of sources to diversify our funding sources.

May 9, 2022 and August 8,

2022, respectively.
Liquidity as of JuneSeptember 30, 20192022 and December 31, 2018
2021 was as follows:

 

 

June 30, 2019

 

December 31, 2018

 

 

 

($ in thousands)

 

Cash, excluding restricted cash

 

$

46,001

 

$

124,656

 

Availability under Revolving Syndicate Facility Agreement

 

350,000

 

350,000

 

Total

 

$

396,001

 

$

474,656

 

(in US$ thousands)
September 30,
2022
December 31,
2021
Cash, excluding restricted cash
$
698,396
$
437,679
Availability under ABL Facility
(1)
100,000
100,000
Total Indebtedness

$
798,396
$
537,679
(1)
The ABL
Facility contains
a springing
fixed charge
coverage ratio
of not
less than
1.00 to
1.00, which
ratio is
tested if
availability under
the ABL facility
is less than
$17.5 million
for five consecutive
business days
or less
than $15.0 million
on
any business day.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
37
Our total indebtedness as of JuneSeptember 30, 20192022 and
December 31, 20182021 consisted of the following:

 

 

June 30, 2019

 

December 31, 2018

 

 

 

($ in thousands)

 

Finance/capital lease liabilities

 

$

3,103

 

$

3,789

 

Other financial liabilities

 

15,823

 

11,800

 

Total

 

$

18,926

 

$

15,589

 

Liquidity

As

(in US$ thousands)
September 30,
2022
December 31,
2021
Current installments of June 30, 2019, available liquidity was $396.0 million comprising cashinterest bearing liabilities
$
312,741
$
315,000
Current installments of other financial liabilities and finance
lease obligations
3,890
8,634
Other financial liabilities and finance lease obligations, excluding current
installments
9,639
14,031
Total
$
326,270
$
337,665
Liquidity
As
of
September
30,
2022,
available
liquidity
was
$798.4 million,
comprising
of
cash
and
cash
equivalents
(excluding restricted cash) of $46.0$698.4 million and $350.0 $100.0
million of available borrowing facilities. borrowings under our ABL Facility.
As of
December 31, 2018,
2021, available liquidity
was $474.7$537.7 million,
comprising cash and
cash equivalents (excluding
restricted cash) of $124.7$437.7 million and $350.0$100.0 million of
available borrowing facilities.

borrowings under our ABL Facility.

Cash

Cash is held in
multicurrency interest bearing
bank accounts available to
be used to service
the working capital
needs of the Company. Cash
balances surplus to immediate working capital requirements are invested
in short-termshort-
term interest-bearing deposit accounts.

accounts or used to repay

interest bearing liabilities.
Senior Secured Credit Facilities

To assistNotes

As of
September
30,
2022, the
outstanding
principal
amount of
our Notes
was
$312.7 million
.
Interest on
the
Notes is payable semi-annually in managingarrears on May 15 and November 15 of each year.
The Notes mature on May
15, 2026 and are senior secured obligations of the potential volatility in economic and operational changes, which may influence the generation of free cash flow,Company.
The Notes are guaranteed
on a senior secured
basis by the Company entered into
and its wholly-owned
subsidiaries (other
than
the
Issuer)
(subject
to
certain
exceptions
and
permitted
liens)
and
secured
by
(i)
a
first-priority
lien
on
substantially all of the Company’s assets and the assets of the other guarantors (other than
accounts receivable
and other rights to payment,
inventory,
intercompany indebtedness, certain
general intangibles and commercial
tort claims, commodities accounts, deposit accounts, securities accounts and other related assets and proceeds
and
products
of
each
of
the
foregoing,
or,
collectively,
the
ABL
Collateral),
or
the
Notes
Collateral,
and
(ii)
a
second-priority lien on the ABL Collateral, which is
junior to a Syndicated Facility Agreementfirst-priority lien, for the
benefit of the lenders under
the ABL Facility.
The terms
of the
Notes are
governed
by the
Indenture.
The Indenture
contains
customary
covenants
for high
yield bonds, including,
but not limited
to, limitations on
investments, liens, indebtedness,
asset sales, transactions
with affiliates and restricted payments, including
payment of dividends on capital stock.
The Company may
redeem any of
the Notes beginning
on May 15,
2023. The initial
redemption price of
the Notes
is 108.063% of their principal amount, plus accrued and unpaid interest, if any, to,
but excluding, the redemption
date. The redemption
price will decline
each year after May
15, 2023, and will
be 100% of the
principal amount
of the
Notes, plus
accrued
and
unpaid
interest, beginning
on
May 15,
2025. The
Company
may also
redeem
some or all of the Notes
at any time and from
time to time prior to
May 15, 2023 at a
price equal to 100%
of the
principal amount thereof
plus a “make-whole”
premium, plus accrued
and unpaid interest,
if any, to, but
excluding,
the redemption date. The Company may also redeem a portion
of the Notes under certain circumstances prior to
May 15, 2023.
For the
nine months ended
September 15, 2018 providing two borrowing facilities:

·                  Facility A—$350 million multi-currency facility available for general working capital and corporate purposes; and

·                  Facility B—A$370 million bank guarantee facility.

The right to draw upon these facilities is conditional upon a number of provisions being satisfied at 30, 2022,

in connection with
the time that each drawdown request is issued. These conditions include, among other things, that:

·                  no Event of Default is continuing or would result from the proposed loan;

·                  the representations, as defined dividends paid

in the Syndicated Facility Agreement, that are made are true in all material respects and not misleading; and

·

period, the Company
offered to purchase up to a total of $225.8 million aggregate principal amount of the proposed loan Notes pursuant to the terms
of
the
Indenture.
For
the
nine
months
ended
September
30,
2022,
the
Company
purchased
an
aggregate
principal amount, for
accepted offers, of $2.3
million at a
price equal to
104% of the
principal amount of
the Notes,
plus accrued and unpaid interest on the Notes to, but not
including, the date of redemption.
As of September 30, 2022, we were in compliance with
all applicable covenants under the Indenture.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
38
ABL Facility
The ABL
Facility,
dated May
12, 2021,
is for
an aggregate
multi-currency
lender commitment
of up
to $100.0
million, including a $30.0 million
sublimit for the issuance
of letters of credit and
$5.0 million for swingline
loans,
at any
time outstanding,
subject to
borrowing
base availability.
The ABL
Facility
will not causemature
on May
12, 2024.
Borrowings under the committed facility limitABL
Facility bear interest at
a rate equal to be exceeded.

At June

a BBSY rate plus
an applicable margin. As
at
September 30, 2019, Facility A had2022, no borrowingsamounts were drawn and no letters
of credit were outstanding with $350 millionunder the ABL Facility.
As of availability undrawn.

September 30, 2022, we were in compliance with

all applicable covenants under the ABL Facility.
Bank Guarantees

We are required to provide financial assurances and Surety Bonds

We
are
required
to
provide
financial
assurances
and
securities
to
satisfy
contractual
and
other
requirements
generated in the
normal course of
business. Some of
these assurances are provided
to comply with
state or other
government agencies’ statutes and regulations. Facility B is available for this purpose and as As
of JuneSeptember 30, 2019, 2022,
we had issued Bank Guarantees totaling A$268.5outstanding bank guarantees
of
$43.8
million
to
secure
various
obligations
and
commitments.
The
Company
provided
cash,
in
the
form
of
deposits, as collateral against these bank guarantees.
For the U.S. Operations, in
order to provide the required
financial assurance, we generally
use surety bonds for
post-mining
reclamation.
We
can
also
use
bank
letters
of
credit
to
collateralize
certain
obligations.
As
of
September 30, 2022,
we had outstanding
surety bonds of
$31.9 million and
letters of credit
of $16.8 million
issued
from our available bank guarantees,
to satisfymeet contractual obligations under workers compensation insurance and
to secure other
obligations and commitments.
Future regulatory changes relating
to these requirements, leaving A$101.5obligations could
result
in increased obligations, additional costs or additional
collateral requirements.
Dividend
On
February
24,
2022,
our
Board
of
Directors
declared
an
unfranked
ordinary
dividend
of
9.0
cents
per
CDI
(USD). The dividend had a record date of March 18, 2022
and was paid on April 8, 2022.
On April 26,
2022, we amended
our dividend policy
with plans to
pay a fixed
cash dividend
of 0.5 cent
per CDI
biannually (1.0
cent per
CDI annually),
in accordance
with our
over-arching distribution
policy.
The payment
of
dividends remains at the discretion of our Board of Directors.
On May 9, 2022, our
Board of Directors declared
a special unfranked dividend
of $99.5 million, or
5.9 cents per
CDI, reflecting
the unaccepted
portion of
the offer
to purchase
the Notes
made in
connection with
the dividend
declared on
February 24,
2022, and
a special
unfranked dividend
of $100.6
million, or
6.0 cents
per CDI.
The
dividend had a record date of May 31, 2022 and was
paid on June 21, 2022.
On August
8, 2022,
the Company’s
Board of
Directors
declared a
total unfranked
ordinary dividend
of $125.7
million, or
7.5 cents
per CDI,
comprising
$100.6 million
of the
unaccepted portion
of the
offer
to purchase
the
Notes made in connection
with the special dividends
declared on May 9,
2022, plus an additional
$25.2 million.
The dividend had a record date of August 30, 2022 and was paid
on September 20, 2022.
On October
30, 2022,
the Company’s
Board of
Directors declared
a total
unfranked special
dividend of
$225.0
million, or
13.4 cents
per CDI,
comprising
$23.5 million
of the
unaccepted
portion of
the offer
to purchase
the
Notes made
in
connection
with the
ordinary
dividends
declared on
August
8, 2022,
plus
an additional
$201.5
million. The
dividends will have
a record
date of November
21, 2022, Australia
time, and
be payable on
December
12, 2022, Australia time. The total ordinary dividends of
$ 225.0 million will be funded from available under Facility B.

cash.

In additionconnection with the declared ordinary dividends, Coronado Finance Pty
Ltd, a wholly-owned subsidiary of the
Company, offered
to purchase up to $200.0 million aggregate
principal amount of the Notes at a purchase
price
equal
to
104%
of
the
principal
amount
of
the
Notes,
plus
accrued
and
unpaid
interest
to,
but
excluding,
the
settlement date, pursuant to the above,terms of the
Indenture. The payment of the ordinary
dividends is not contingent
on acceptance of the offer to satisfy an obligation to provide a U.S. dollar bank guarantee to a third party, on June 12, 2019purchase the Company entered into a Bank Guarantee Facility Agreement with Westpac Banking Corporation with a limit of $28.6 million. At June 30, 2019 this facility was fully utilized.

Secured Credit Facilities Terms

Interest Rate

Borrowings under our Syndicated Facility Agreement bear interest at a floating rate which is either (i) LIBOR plus an applicable margin for US$ loans and (ii) Bank Bill Swap Bid Rate, or BBSY, bid plus an applicable margin forNotes

by the A$ loan. The applicable margin for Facility A depends on the Net Debt to EBITDA ratio (as defined in the Syndicated Facility Agreement).

Financial Covenants

Under the SFA we are required to comply with financial covenants, namely leverage ratio, interest coverage ratio, tangible net worth.

Each financial covenant is calculated with reference to the definitions contained in the SFA. As of June 30, 2019, which was the last applicable compliance date under the SFA, we were in compliance with all applicable financial covenants under the SFA.

Dividend

We paid an aggregate dividend of $299.7 million on March 29, 2019 in A$ to holders of CDIs on the ASX as of March 5, 2019, based on the exchange rate on March 5, 2019.

Note holders.

Capital Requirements

Our main uses of cash have historically been and are expected to continue to be the
funding of our operations, working capital, and capital expenditure, and
the payment of
interest and dividends.

We intend
to use cash
to fund debt
service payments
on our Notes,
the
ABL Facility and our
other indebtedness, to fund operating
activities, working capital, capital expenditures, partial
redemption of the Notes, business or assets acquisitions
and, if declared, payment of dividends.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
39
Historical Cash Flows

The following
table summarizes
our cash
flows for
the six three
months ended June
September 30, 2019
2022 and 2018,
2021, as
reported in the accompanying consolidated financial statements:

Cash Flow

 

 

Six Months Ended June 30,

 

 

 

2019

 

2018

 

 

 

($ in thousands)

 

Net cash provided by operating activities

 

301,216

 

141,612

 

Net cash (used in) investing activities

 

(67,336

)

(584,335

)

Net cash (used in) provided by financing activities

 

(312,145

)

701,093

 

Net change in cash and cash equivalents

 

(78,265

)

258,370

 

Effect of exchange rate changes on cash and restricted cash

 

(365

)

(2,384

)

Cash and restricted cash at beginning of period

 

124,881

 

28,069

 

Cash and restricted cash at end of period

 

46,251

 

284,055

 

Operating activities

Nine months ended September 30,
(in US$ thousands)
2022
2021
Net cash provided by operating activities was $301.2 million and $141.6 million for the six months ended June 30, 2019 and 2018, respectively. The increase in cash provided by operating activities during the six months ended June 30, 2019 was primarily due to the additional cash contributed by Curragh since it was acquired on March 29, 2018, and an improvement in operating performance of the U.S. Operations.

Investing activities

$
945,384
$
171,115
Net cash used in investing activities
(150,670)
(145,782)
Net cash (used in) provided by financing activities
(483,854)
122,623
Net change in cash and cash equivalents
310,860
147,956
Effect of exchange rate changes on cash and restricted
cash
(50,144)
2,287
Cash and restricted cash at beginning of period
437,931
45,736
Cash and restricted cash at end of period
$
698,647
$
195,979
Operating activities
Net cash
provided
by operating
activities
was
$945.4 million
for the
nine months
ended
September
30, 2022
,
compared to $171.1 million
for the nine months
ended September 30, 2021.
The increase was $67.3driven
by higher
coal revenues due to increase in the average realized
Met coal pricing partially offset by higher operating
costs.
Investing activities
Net
cash
used
in
investing
activities
was
$150.7
million
for
the
nine
months
ended
September
30,
2022,
compared to $145.8 million for the sixnine months ended JuneSeptember 30, 2019, compared to $584.3 million 2021. Cash spent on capital expenditures
for the six
nine months ended June
September 30, 2018. Capital expenditure for the six months ended June 30, 2019 2022
was $66.4 $141.9
million, of
which $15.4$61.0 million related to Curragh and the remainder
related to the U.S. Operations. Capital expenditure for our
Australian
Operations, $80.5 million
related to the
U.S. Operations was $51.0 million and $46.8 
the remaining $0.4
million for other
and corporate.
During the sixnine months ended JuneSeptember 30, 2019 2022, a net of $6.3 million of additional deposits were provided as
collateral
for
our
U.S.
workers
compensation
obligations
and 2018, respectively. Included
$2.4
million
of
additional
security
deposit
was
provided by our Australian Operations to satisfy contractual requirements
in the cash flows in the six months ended June 30, 2018 was the cash considerationnormal course of $537.2 million used by Coronado to purchase Curragh.

business.

Financing activities

Net
cash
used
in
financing
activities
was
$483.9
million
for
the
nine
months
ended
September
30,
2022,
compared to
cash provided
by financing
activities of
$122.6 million
for the
nine months
ended September
30,
2021. The net cash
used in financing activities was $312.1 million
for the sixnine months
ended JuneSeptember 30, 2019, compared to $701.1 million of net cash provided by financing activities during the six months ended June 30, 2018. Uses of cash from financing activities during the six months ended June 30, 20192022, included $299.7 million for dividends paid to the shareholders of the Company and
dividend
payments of contingent royalty consideration under the Value Share Mechanism$473.9, net of $12.7 million. Includeda $2.8 million foreign exchange gain on
settlement of dividends for shareholders who
elected to be paid in the net cash provided in financing activities for the six months ended June 30, 2018 was proceeds from borrowings of $700.0 and $151.3 contributed by members of Coronado Group LLC (former parent of the Company), which were utilized for the purchase of CurraghAustralian dollars and the remainder
related to repayment of a term loan on March 29, 2018.

borrowings.

Included in
the net
cash used
in financing
activities for
the nine
months ended
September 30,
2021, were
net
proceeds from
borrowings of
$396.4 million,
repayment of
borrowings of
$371.4 million
and net
proceeds from
the stock issuance of $97.7 million.
Contractual Obligations

There were no
material changes
to our contractual
obligations from
the information
previously provided
in Item 2
7.
“Management’s
Discussion
and
Analysis
of
Financial
Conditions
and
Results
of
Operations”
of
our registration statement
Annual
Report on Form 10, as amended, filed with the SEC and ASX on June 28, 2019,10-K for the year ended December 31, 2018.

2021, filed with the SEC and

ASX on February 22, 2022.
Critical Accounting Policies and Estimates

The preparation
of
our
financial
statements
in
conformity
with
U.S. GAAP
requires
us to
make
estimates
and
assumptions that affect the
reported amounts of assets and liabilities
at the date of the financial statements
and
the reported
amounts of
revenue and
expenses during
the reporting
period. On
an ongoing basis,
we evaluate
our estimates. Our estimates are
based on historical experience
and various other assumptions
that we believe
are appropriate,
the results
of which form
the basis
for making
judgements about
the carrying values
of assets
and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. All
of these accounting estimates and assumptions, as well as the resulting impact to
our financial statements, have
been discussed with the audit committeeAudit Committee of our Board
of Directors.

Coronado Global Resources Inc.
Form 10-Q September 30, 2022
40
Our
critical
accounting
policies
are discussed
in
Item
7. “Management’s
Discussion
and
Analysis
of Financial
Condition and Results of
Operations” inof our registration statementAnnual
Report on Form 10, as amended, 10-K for
the year ended December
31, 2021,
filed with the SEC and ASX on June 28, 2019.

Unaudited Pro Forma Combined Financial Information

The following February 22, 2022.

Newly Adopted Accounting Standards and Accounting
Standards Not Yet Implemented
See
Note
2.
(a)
“Newly
Adopted
Accounting
Standards”
to
our
unaudited
condensed
consolidated pro forma
financial
statements of operations present the combination of the historical financial statements of Coronado and Curragh, adjusted to give effect to the acquisition of Wesfarmers Curragh Pty Ltd by Coronado, which we refer to as the Curragh acquisition.

The unaudited consolidated pro forma statement of operations for the six months ended June 30, 2018 combine the historical consolidated statement of operations of Coronado and the historical combined statement of operations for Curragh, giving effect to the acquisition of Wesfarmers Curragh Pty Ltd by Coronado as if they had been consummated on January 1, 2018. This will facilitate a pro forma comparison between the six months ended June 30, 2019 and June 30, 2018 in Management’s Discussion and Analysis of Financial Condition and Results of Operations. We believe

a discussion
of these two periods is more meaningful as it is on a comparable basis.

The unaudited consolidated pro forma statements newly

adopted accounting
standards. As
of operations doSeptember
30, 2022,
there were
no
accounting standards not reflect the costs yet implemented.
Coronado believes to be reasonable. The pro forma adjustments and related assumptions are described in the accompanying notes presented on the following pages.

The unaudited consolidated pro forma statements of operations are for informational purposes only and are not intended to represent or to be indicative of the actual results of operations or financial position that the combined business of Coronado and Curragh would have reported had the transactions been completed as of the dates set forth in the unaudited consolidated pro forma statements of operations and should not be taken as being indicative of Coronado’s future consolidated results of operation. The actual results may differ significantly from those reflected in the unaudited consolidated pro forma statements of operations for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the unaudited consolidated pro forma statements of operations and actual amounts. As a result, the pro forma consolidated information does not purport to be indicative of what the results of operations would have been had the transaction been completed on the applicable dates of the unaudited consolidated pro forma statements of operations.

Unaudited Consolidated pro forma statement of operations

For the six months-ended JuneGlobal Resources Inc.

Form 10-Q September 30, 2018

(U.S. dollars and AUD in thousands)

 

 

 

 

Historical 1 January 2018 to 29 March 2018

 

 

 

 

 

 

 

 

 

Historical

 

 

 

Note 2(a)

 

Note 2(b)

 

 

 

Note 2(c)

 

Pro Forma adjustments

 

 

 

 

 

Coronado
Global
Resources Inc.

 

Curragh

 

Reclassification

 

IFRS to US
GAAP
Adjustments

 

Curragh in
US GAAP

 

Curragh in
USD and US
GAAP

 

Pro forma
adjustments

 

Note 2

 

Consolidated
pro forma

 

 

 

USD

 

AUD

 

AUD

 

AUD

 

AUD

 

USD

 

USD

 

 

 

USD

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Coal revenues

 

561,363

 

406,696

 

—

 

—

 

406,696

 

313,494

 

—

 

 

 

874,857

 

Coal revenues from related parties

 

222,983

 

—

 

—

 

—

 

—

 

—

 

—

 

 

 

222,983

 

Other Revenues

 

15,337

 

—

 

—

 

—

 

—

 

—

 

3,006

 

(d

)

18,343

 

Total Revenues

 

799,683

 

406,696

 

—

 

—

 

406,696

 

313,494

 

3,006

 

 

 

1,116,183

 

Cost and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of coal revenues (exclusive of items shown separately below)

 

424,620

 

204,132

 

(15,367

)

—

 

188,765

 

145,506

 

—

 

 

 

570,126

 

Depreciation, depletion and amortization

 

64,402

 

—

 

16,971

 

1,525

 

18,496

 

14,257

 

7,977

 

(e

)

86,636

 

Freight expense

 

45,155

 

—

 

47,769

 

—

 

47,769

 

36,822

 

—

 

 

 

81,977

 

Stanwell rebate

 

32,812

 

—

 

55,949

 

—

 

55,949

 

43,127

 

—

 

 

 

75,939

 

Other royalty expenses

 

82,987

 

93,886

 

(55,949

)

—

 

37,937

 

29,243

 

—

 

 

 

112,230

 

Impairment

 

—

 

(263,097

)

—

 

263,097

 

—

 

—

 

—

 

 

 

—

 

Selling, general, and administrative expenses

 

52,283

 

50,098

 

(47,769

)

—

 

2,329

 

1,795

 

(38,101

)

(f

)

15,977

 

Total costs and expenses

 

702,259

 

85,019

 

1,604

 

264,622

 

351,245

 

270,750

 

(30,124

)

 

 

942,885

 

Operating income

 

97,424

 

321,677

 

(1,604

)

(264,622

)

55,451

 

42,744

 

33,130

 

 

 

173,298

 

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

585

 

—

 

—

 

—

 

—

 

—

 

—

 

 

 

585

 

Interest expense

 

(26,073

)

(444,895

)

1,604

 

—

 

(443,291

)

(341,703

)

336,058

 

(g

)

(31,718

)

Loss on debt extinguishment

 

(3,905

)

—

 

—

 

—

 

—

 

—

 

3,905

 

(h

)

—

 

Other, net

 

(26,846

)

10,098

 

—

 

—

 

10,098

 

7,784

 

15,695

 

(i

)

(3,367

)

Total other income (loss), net

 

(56,239

)

(434,797

)

1,604

 

—

 

(433,193

)

(333,919

)

355,658

 

 

 

(34,500

)

Income before tax

 

41,185

 

(113,120

)

—

 

(264,622

)

(377,742

)

(291,175

)

388,788

 

 

 

138,798

 

Income tax expense

 

(5,534

)

(102,443

)

—

 

79,387

 

(23,056

)

(17,772

)

(4,314

)

(j

)

(27,620

)

Net income

 

35,651

 

(215,563

)

—

 

(185,235

)

(400,798

)

(308,947

)

384,474

 

 

 

111,178

 

Less: Net loss attributable to noncontrolling interest

 

(4

)

—

 

—

 

—

 

—

 

—

 

—

 

 

 

(4

)

Net income (loss) attributable to Coronado Global Resources Inc.

 

35,655

 

(215,563

)

—

 

(185,235

)

(400,798

)

(308,947

)

384,474

 

 

 

111,182

 

Earnings per share of common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

0.37

 

—

 

—

 

—

 

—

 

—

 

—

 

 

 

$

1.15

 

Diluted

 

0.37

 

—

 

—

 

—

 

—

 

—

 

—

 

 

 

$

1.15

 

Average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

96,651,692

 

—

 

—

 

—

 

—

 

—

 

—

 

 

 

96,651,692

 

Diluted

 

$

96,656,067

 

—

 

—

 

—

 

—

 

—

 

—

 

 

 

96,656,067

 

See accompanying notes to the unaudited pro forma consolidated statement of operations.

Note 1. Basis of Preparation

The accompanying unaudited consolidated pro forma statement of operations was prepared in accordance with Article 11 of Regulation S-X and presents the pro forma combined results of operations of Coronado based upon the historical financial statements of each of Coronado and Curragh, after giving effect to the Curragh acquisition and change in tax status, and are intended to reflect the impact of the Curragh acquisition and change in tax status on Coronado’s statement of operations. The accompanying unaudited consolidated pro forma statement of operations has been prepared using, and should be read in conjunction with the consolidated financial statements of Coronado for the three and six months ended June 30, 2019. Assumptions and estimates underlying the pro forma adjustments are described in these notes.

The accompanying unaudited consolidated pro forma statement of operations is presented for illustrative purposes only and does not purport to be indicative of the actual results that would have been achieved by Coronado if the Curragh acquisition had been consummated as of the beginning of the periods presented or that will be achieved in the future. The unaudited consolidated pro forma statement of operations does not reflect the costs of any integration activities or benefits that may result from realization of synergies expected to result from the Curragh acquisition. In addition, throughout the period presented in the unaudited consolidated pro forma statement of operations until the date of acquisition on March 29, 2018, the operations of Curragh were conducted and accounted for as part of the former shareholder. Curragh’s unaudited combined financial information has been derived from the former shareholder’s historical accounting records and reflect certain allocations of direct costs and expenses. All of the allocations and estimates in such financial information are based on assumptions that the management of the former shareholder believes are reasonable. In the opinion of management, the unaudited consolidated pro forma statement of operations includes all normal and recurring adjustments that are considered necessary for the fair presentation of the results for the period presented. Curragh’s financial information does not necessarily represent the financial position of Curragh had it been operated as a stand-alone company during the period.

The unaudited consolidated pro forma statement of operations combines the historical consolidated statement of operations of Coronado for the three and six months ended June 30, 2018 and the unaudited combined financial information of Wesfarmer’s Curragh Pty Ltd for the three months ended March 29, 2018, giving effect to the Curragh acquisition as if both had been consummated on January 1, 2018.

Note 2. Income Statement Adjustments

The unaudited consolidated pro forma statement of operations reflects the following adjustments ($ in thousands):

(A)                               Reclassifications

These adjustments represent reclassifications to conform the accounting presentation of Curragh’s financial statements to Coronado’s financial statements.

(B)                               International Financial Reporting Standards, or IFRS, to U.S. GAAP adjustments (in AUD)

Impairment was adjusted as follows:

June 30, 2018

Elimination of Curragh’s impairment reversal(1)

263,097

Total IFRS to U.S. GAAP adjustment to impairment expense

263,097

2022

(1) Represents the removal of the IFRS, impairment reversal consistent with pushing back the U.S. GAAP acquisition fair values to January 1, 2018 and the prohibition under U.S. GAAP of the reversal of impairment expense.

Depreciation, depletion and amortization was adjusted as follows:

June 30, 2018

Adjustment to accretion of Curragh asset retirement obligation(1)

1,525

Total IFRS to U.S. GAAP adjustment to depreciation, depletion and amortization expense

1,525

41

(1) Under U.S. GAAP, a company-specific risk adjusted discount rate is used which is higher than the discount rate required by IFRS.  The higher discount rate under U.S. GAAP reduces the asset retirement obligation, or ARO, booked initially and results in a higher accretion expense each period as the discounted ARO balance increases.

See Note J for discussion of the calculation of the income tax expense.

(C)                               USD translation rate

In order to translate the Curragh AUD results into USD, an exchange rate of .7708 was utilized. This represents the average exchange rate for the period from January 1, 2018 to June 30, 2018.

(D)                               Other revenues

Other revenues were adjusted as follows:

June 30, 2018

Amortization of the Stanwell below market CSA(1)

3,006

Total pro forma adjustment to other revenues

3,006

(1)                                 Relates to the amortization of the Stanwell below market coal supply agreement, or CSA. The Stanwell below market CSA represents the fair value attributable to the Australian coal supply obligation arising from the Coronado Curragh business combination.

(E)                                Depreciation, depletion and amortization

Depreciation, depletion and amortization were adjusted as follows:

June 30, 2018

Adjustment to depreciation of Curragh assets acquired(1)

7,977

Total pro forma adjustment to depreciation, depletion and amortization

7,977

(1)                                 Represents the adjustment to Curragh’s historical depreciation and amortization as a result of preliminary fair value adjustments to the acquired depreciable assets, mineral reserves and amortizable intangible assets.

(F)                                 Selling, general and administrative

Selling, general and administrative expenses were adjusted as follows:

June 30, 2018

Transaction costs(1)

(38,101

)

Total pro forma adjustment to selling, general and administrative expenses

(38,101

)

(1)                                 Relates to advisory and legal fees incurred in the year ended June 30, 2018, which are directly attributable to the Curragh acquisition, but which are not expected to have a continuing impact on results following the consummation of the Curragh acquisition.

(G)                               Interest expense

Interest expense was adjusted as follows:

June 30, 2018

Eliminate intercompany interest expense(1)

341,702

Reversal of Bank of American Term Loan(2)

3,828

Recognition of DB Term Loan interest expense(3)(4)

(8,117

)

Amortization of DB Term Loan debt issuance costs and discount(5)

(1,355

)

Total pro forma adjustment to interest expense

336,058

(1)                                 Represents the removal of the historical interest charge in relation to an intercompany loan Curragh had with its previous shareholder, which was assigned to Coronado upon acquisitions and is therefore eliminated in consolidation.

(2)                                 Represents the reversal of interest expense related to the Bank of America Term Loan on Coronado’s Statement of Operations. This loan was extinguished on March 29, 2018 in conjunction with the acquisition of Curragh. In order to represent the financing in-place as if the acquisition occurred on January 1, 2018, the effects of this note have been removed.

(3)                                 Represents additional interest expense related to the DB Term Loan. This $700 million loan, established on March 29, 2018, was used to partially finance the acquisition of Curragh and the additional interest charge reflects this loan as if it were in existence on January 1, 2018. The assumed interest rate for the three months to March 29, 2018 was 8.802%, representing LIBOR plus a 6.5% spread. This is the actual interest rate of the loan at origination. Due to the proximity of the assumed origination (January 1, 2018) and the actual origination (March 29, 2018) as well as the fact the loan was extinguished on October 24, 2018, the interest rate at March 29, 2018 was determined to be representative and more meaningful for the pro forma adjustment than utilizing the current rate.

(4)                                 For each one-eighth of 1% change in estimated interest rate associated with the $700 million DB Term Loan, interest expense would increase or decrease by $0.4 million for the six months ended June 30, 2018.

(5)                                 Represents the additional amortization of debt issuance costs and the debt discount associated with the DB Term Loan.

(H)                              Loss on debt extinguishment

Loss on debt extinguishment was adjusted as follows:

June 30, 2018

Reversal of debt extinguishment related to the Bank of America Term Loan(1)

3,905

Total pro forma adjustment to loss on debt extinguishment expense

3,905

(1)                                 Represents the reversal of the debt extinguishment expense related to the Bank of America Term Loan on Coronado’s Statement of Operations. This loan was extinguished on March 29, 2018 in conjunction with the acquisition of Curragh. In order to represent the financing in-place as if the acquisition occurred on January 1, 2018, the effects of this note have been removed.

(I)                                   Other, net

Other, net was adjusted as follows:

June 30, 2018

Transaction costs(1)

15,695

Total pro forma adjustment to selling, general and administrative expenses

15,695

(1)                                 Relates to the loss on Foreign Exchange, or FX, swap incurred in the six months ended June 30, 2018, which is directly attributable to the Curragh acquisition as it locked in the USD exchange rate in advance of the purchase of Curragh. This loss on FX swap is not expected to have a continuing impact on results following the consummation of the Curragh acquisition.

(J)                                   Income tax provisions

For purposes of the unaudited pro forma condensed combined financial statements, an Australian statutory tax rate of approximately 30% has been used for pro forma adjustments related to Curragh. A U.S. blended statutory tax rate (Federal and State) of approximately 27% has been used for pro forma adjustments related to the U.S. LLC’s. This does not reflect Coronado’s effective tax rate, which will include other tax items such as state and foreign taxes as well as other tax charges and benefits, and does not take into account any historical or possible future tax events that may impact Coronado following the consummation of the Curragh acquisition.

ITEM 3.

QUANTITATIVE
AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

Our activities
expose us
to
a variety
of financial
risks, including market risk such
as commodity
price risk,
interest rate
risk, foreign
currency risk, liquidity risk and credit
risk. OurThe overall risk management objective is
to minimize potential adverse
effects on our financial performance from those
risks which are not coal price related.

We manage
financial risk
through policies
and procedures
approved by
our Board
of Directors.
These specify
the responsibility
of the
Board
of Directors
and
management
with regard
to the
management
of financial
risk.
Financial risks are
managed centrally by
our finance
team under the
direction of the
Group Chief Financial
Officer.
The finance team manages risk exposures primarily through delegated authority limits approved
by the Board of
Directors. The finance team regularly monitors
our exposure to these financial risks and reports
to management
and
the
Board
of
Directors
on
a
regular
basis.
Policies
are
reviewed
at
least
annually
and
amended
where
appropriate.

We may use
derivative financial instruments such
as forward fixed
price commodity contracts, interest
rate swaps
and
foreign
exchange
rate
contracts
to
hedge
certain
risk
exposures.
Derivatives are exclusively used
for economic hedging
speculative
purposes and hedging for speculative purposes
is
strictly prohibited by the Treasury Risk managementManagement Policy approved by our Board of
Directors. We use different
methods
to
measure
the
extent
to
which
we
are
exposed
to
various
financial
risks.
These
methods
include
sensitivity analysis
in the
case of
interest rate, rates,
foreign exchange
and other
price risks
and aging
analysis for
credit risk.

Commodity Price Risk

Coal Price Risk

We
are
exposed
to
domestic
and
global
coal
prices.
Our
principal
philosophy
is
that
our
investors
would
not
consider
hedging
of
coal
prices
to
be
in
the
long-term
interest
of
our
stockholders.
Therefore,
any
potential
hedging of coal prices through long-term fixed price contracts is subject to the approval of our Board of Directors
and would only be adopted in exceptional circumstances.

Access to
international markets
may be
subject to
ongoing interruptions
and trade
barriers due
to policies
and
tariffs of individual countries. For example, the imposition of
tariffs and import quota restrictions by China on U.S.
and
Australian
coal
imports,
respectively,
including
the
ongoing
suspension
of
imports
of
Australian
coal
into
China,
may
in
the
future
have
a
negative
impact
on
our
profitability.
We
may
or
may
not
be
able
to
access
alternate markets of our coal should additional interruptions and trade barriers occur in the future. An inability for
metallurgical coal suppliers to access international markets, including China, would likely result in an oversupply
of Met coal and may result in a decrease in prices and
or the curtailment of production.
We manage
our commodity
price risk
for our non-trading,
thermal coal
sales through
the use
of long-term
coal
supply agreements in our
U.S. Operations. In Australia, thermal
coal is sold
to Stanwell on a
supply contract. See
Item
1A. “Risk
“Risk
Factors—Risks
related
to
the
Supply
Deed
with
Stanwell
may
adversely
affect
our
financial
condition and results of operations” in our registration statementAnnual Report on Form 10, as amended,10-K filed with the SEC and ASX on June 28, 2019.

February

22, 2022.
Sales commitments in the
Met coal market are typically
not long-term in nature,
and we are therefore subject
to
fluctuations
in
market
pricing.
Certain
coal
sales
in
our
Australian
Operations
are
provisionally
priced
initially.
Provisionally priced sales
are those for
which price
finalization, referenced
to fluctuationsthe relevant
index, is outstanding
at the reporting date. The final sales price
is determined within 7 to 90 days after
delivery to the customer.
As of
September 30, 2022, we
had $53.2 million of
outstanding provisionally priced receivables
subject to changes in market pricing. For example, a
the relevant price index. If prices decreased 10%, these provisionally priced receivables would decrease inby $5.3
million. See Item 1A. “Risk Factors—Our profitability depends upon the hard coking coal, or HCC, benchmark price would have decreased reported revenuesprices we receive for our coal.
Prices for
coal
are
volatile
and
can
fluctuate
widely
based
upon
a
number
of
factors
beyond
our
control”
in
our
Annual
Report on Form 10-K filed with the three months ended June 30, 2019SEC and six months ended June, 2019 by approximately $363.3 million and $698.4 million respectively.

ASX on

February 22, 2022.
Diesel Fuel

We may
be exposed
to price
risk in
relation to
other commodities
from time
to time
arising from
raw materials
used in our operations (such as gas or
diesel). These commodities may be hedged through financial instruments
if the
exposure is
considered material
and where
the exposure
cannot be
mitigated through
fixed price
supply
agreements.

In 2018, we entered into fixed price contracts with

The fuel
required
for
our fuel suppliers to purchase 19.1 million liters operations
for
the remainder
of fuel for our U.S. Operations with a total commitment of $11.3 million for 2019. The remaining commitment as of June 30, 2019 was $5.6 million with respect to 9.5 million liters. Any additional fuel required fiscal
year
2022
will
be
purchased
under
fixed-price
contracts or on a spot basis.

In the same period, we have entered into forward derivative contracts to purchase 93.4 million liters

Coronado Global Resources Inc.
Form 10-Q September 30, 2019 we have entered into additional forward derivative contracts to purchase 126 million liters of diesel fuel with respect to the expected 2020 fuel requirements for Curragh. The fair value of the forward derivative contract as of June 30, 2019 was an asset of $3.6 million with respect to outstanding 173.3 million liters.

2022

42
Interest Rate Risk

Interest rate risk is the
risk that a change in interest rates on our borrowing
facilities will have an adverse impact
on
our
financial
performance,
investment
decisions
and
stockholder returns.
return.
Our
objectives
in
managing
our
exposure
to
interest
rates
include
minimizing
interest
costs
in
the
long
term,
providing
a
reliable
estimate
of
interest costs for the
annual work program
and budget and ensuring
that changes in interest
rates will not have
a material impact on our financial performance.

As
of June 
September
30, 2019,
2022,
we
had $17.1 
$326.3
million
of fixed-rate
fixed
rate
borrowings
and
Notes
and
no
variable-rate
borrowings outstanding. As discussed in Item 2. “Management’s Discussion and Analysis of Financial Condition and Results Of Operations—Liquidity and Capital Resources—Liquidity,” as of June 30, 2019, we had undrawn debt facility of $350 million with a variable
We currently do not hedge against interest rate of LIBOR or BBSY bid plus a margin. We intend to draw these funds for working capital requirements and general corporate purposes. A significant increase in the market interest rate following a drawdown could result in a material increase in the interest expense dependent on the amount drawn.

fluctuations.
Foreign Exchange Risk

A significant portion of our
sales are denominated in US$.
Foreign exchange risk is
the risk that our earnings
or
cash flows are adversely impacted by movements in exchange
rates of currencies that are not in US$.

Our main exposure
is to the
A$-US$ exchange rate
through our Australian
Operations, which have
predominantly
A$ denominated costs. Greater than 90% 76.3%
of expenses incurred at Curraghour Australian
Operations are denominated
in
A$.
Approximately 10%
23.7%
of Curragh’s
our
Australian
Operations’
purchases
are
made
with
reference
to
US$,
which
provides a natural hedge against
foreign exchange movements on
these purchases (including fuel, the Wiggins Island Coal Export Terminal Pty Ltd, or WICET, Terminal Handling Charge,
several port
handling charges,
demurrage, purchased
coal and
some insurance
premiums).
Appreciation of
the A$
against
US$ will increase Curragh’sour
Australian Operations’ US$
reported cost base and
reduce US$ reported net
income. Assuming we had no foreign currency hedging instruments in place, For
the portion of US$ required
to purchase A$ to settle our
Australian Operations’ operating costs,
a 5%10% increase
in the A$ to
US$ exchange rate would increase reported total
costs and expenses by approximately $7.9 $37.5
million
and $16.0$98.5 million for the three and nine months ended June
September 30, 2019 and the six months ended June 30, 2019,2022, respectively.

Under normal market conditions, we generally do not consider it necessary to hedge our
exposure to this foreign
exchange risk.
However,
there
may be
specific commercial
circumstances,
such
as the
hedging
of significant
capital
expenditure,
acquisitions,
disposals
and
other
financial
transactions,
where
we
may
deem
foreign
exchange hedging
as appropriate
and
where a
US$ contract
cannot
be negotiated
directly with
suppliers
and
other third parties.

During 2018, we entered into a foreign exchange swap to hedge the exposure to fluctuations in the A$-US$ in connection with the acquisition of Curragh. At June 30, 2019, we did not have any foreign exchange contracts outstanding.

For our Australian
Operations, we
translate all
monetary assets
and liabilities
at the
period-end exchange
rate,
all non-monetary
nonmonetary
assets
and
liabilities
at
historical
rates
and
revenue
and
expenses
at
the
average
exchange
rates in effect during
the periods. The net
effect of these
translation adjustments is
shown in the accompanying
consolidated financial statements within components of
net income.

We currently do not hedge our non-US$ exposures
against exchange rate fluctuations.

Liquidity Risk

Liquidity risk is the risk that we will not have sufficient liquid funds to meet our financial commitments as and when they fall due. Liquidity risk is managed centrally through short-term cash forecasting and longer-term strategic planning. Our objective is to ensure that we have sufficient liquid assets and funding to meet both our anticipated and unexpected financial obligations.

Access to capital is also an important feature of liquidity risk management. We manage this risk through proactive management of our funding profile by ensuring that we have access to diverse sources of funds and that we do not have material refinancing risk in any single reporting period.

Credit Risk

Credit risk is the risk of
sustaining a financial loss
as a result of a counterparty
not meeting its obligations
under
a financial instrument or customer contract.

We are exposed
to credit risk
when we have financial
derivatives, cash deposits,
lines of credit, letters
of credit
or bank guarantees
in place with
financial institutions.
To
mitigate against credit risk
from financial counterparties,
we have minimum credit rating requirements with financial
institutions where we transact.

We
are
also
exposed
to
counterparty
credit
risk
arising
from
our
operating
activities,
primarily
from
trade
receivables. Customers who wish to trade
on credit terms are subject to credit
verification procedures, including
an assessment of their independent credit rating, financial position, past experience and industry reputation.
We
monitor the financial performance
of counterparties on a routine
basis to ensure credit
thresholds are achieved.
Where required, we will request additional credit
support, such as letters of credit,
to mitigate against credit risk.
Credit
risk
is
monitored
regularly,
and
performance
reports
are
provided
to
our management.

management
and
Board
of
Directors.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
43
ITEM 4.
CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Disclosure

We
maintain
disclosure
controls
and
procedures
that
are controls and procedures
designed
to
ensure
that are designed
information
required
to ensure that information required to
be
disclosed in our reports filed under the Exchange Act reports is recorded, processed, summarized and
reported within the time periods
specified
in
the
SEC’s
rules
and forms.  Disclosure controls
forms,
and procedures include, without limitation, controls
that
such
information
is
accumulated
and procedures designed
communicated
to ensure that information required to be disclosed by
our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

The Company, under the supervision and with the participation of its

management, including the
Chief Executive Officer
and the Group
Chief Financial Officer, evaluatedas appropriate,
to allow
timely
decisions
regarding
required
disclosure
based
solely
on
the
definition
of
“disclosure
controls
and
procedures” in Rule 13a-15(e) promulgated under the
Exchange Act. In designing and evaluating the disclosure
controls
and
procedures,
management
recognized
that
any
controls
and
procedures,
no
matter
how
well
designed and operated, can provide only reasonable
assurance of achieving the desired control
objectives, and
management necessarily was
required to apply
its judgment in
evaluating the cost-benefit
relationship of possible
controls and procedures.
As of the end
of the period
covered by this Quarterly
Report on Form
10-Q, we carried
out an evaluation
under
the supervision and
with the participation
of our
management, including the
Chief Executive Officer
and the
Group
Chief Financial
Officer, of the effectiveness of
the design and
operation of the Company’s
our disclosure controls
and procedures (as defined in Rules 13a-15(e) procedures.
Based on
the foregoing,
the
Chief Executive
Officer
and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report, and
Group Chief
Financial
Officer
concluded
that such our
disclosure controls and procedures were effective to provide reasonable assurance that the desired control objectives were achieved.

Internal Control over Financial Reporting

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. GAAP. We are not currently required to comply with the SEC’s rules implementing Section 404 of the Sarbanes-Oxley Act of 2002, and are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. We will not be required to submit a report of management’s assessment regarding internal control over financial reporting or an attestation report of the Company’s registered public accounting firm until our second annual report on 10-K due to a transition period established by the rules of the SEC for newly registered companies.

During the preparation of our financial statements for the year ended December 31, 2018, we and our auditors identified a material weakness in our internal control over financial reporting related to the recognition and presentation of the impact of the Reorganization Transaction, which occurred just prior to the Australian IPO. The presentation was corrected prior to the issuance of the financial statements and did not result in any material misstatement of our financial statements or disclosures.

In the period since December 31, 2018, management has remediated the identified material weakness.  The remediation efforts implemented specifically focused on the identified item and have also aided in enhancing our overall financial control environment.  Remediation efforts applied during the period included (a) the immediate posting of the identified one-off item to ensure no material misstatement in our financial statements; (b) the continued recognition of this position since December 31, 2018 in our financial statements for the period ending June 30, 2019; (c) the Company has employed additional qualified resources to prepare, review and provide guidance on technical matters of this nature; and (d) the Company continues to utilize the expertise of certain third party technical advisors to assist in the review of complex transactions.

Our Chief Executive Officer and Chief Financial Officer have concluded that the Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, present fairly, in all material respects, the financial position of the Company at June 30, 2019 and the consolidated results of operations and cash flows for the period ended June 30, 2019 in conformity with U.S. generally accepted accounting principles.

effective.

Changes to Internal Control over Financial Reporting

As previously reported, we expect

During the
fiscal quarter covered
by this
Quarterly Report on
Form 10-Q,
there were
no changes
in the
Company's
internal
control
over
financial
reporting,
as
such
term
is
defined
in
Rule
13a-15(f)
of
the
Exchange
Act,
that
materially affected,
or are
reasonably
likely to continue to make changes in our
materially
affect,
the
Company’s
internal control controls
over financial reporting in connection with
reporting.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
44
PART II – OTHER
INFORMATION
ITEM 1.
LEGAL PROCEEDINGS
We are subject to various legal and
regulatory proceedings. For a description of our compliance efforts with respect significant legal
proceedings
refer
to
Note 14. “Contingencies” to
the
unaudited
condensed
consolidated
financial
statements
included
in
Part I,
Item 1. “Financial
Statements”
of
this
Quarterly
Report,
which
information
is
incorporated
by
reference
herein.
ITEM 1A.
RISK FACTORS
Except as set forth below,
there were no material changes
to the Sarbanes-Oxley Actrisk factors previously
disclosed in Part I, Item
1A, “Risk Factors”, of 2002.  As such, we will continue to assess
our Annual Report on
Form 10-K for the adequacy
year ended December 31,
2021, filed with the
SEC
and ASX on
February 22, 2022,
and Part II,
Item 1A. “Risk
Factors” of our internal control over financial reporting, remediate any control weaknesses that may be identified, validate through testing that controls are functioning as designed and implement a continuous reporting and improvement process for internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

We are involved in various legal proceedings from time to time in the normal course of business including proceedings related to employment matters. These liabilities do not include costs associated with legal representation, which are expensed as they are incurred. In management’s opinion, except for what is described below, we are not currently involved in any legal proceedings which, individually or in the aggregate and if determined adversely, could have a material effect on our financial condition, results of operations and/or liquidity or that would otherwise be required to be disclosed herein.

Curragh is a co-defendant to proceedings in the Queensland Supreme Court brought by Aurizon. Aurizon’s claim relates to costs relating to the co-defendants’ use of the WICET rail links, in particular, whether the “First Milestone Target Date”, which triggers certain “WIRP Fee” payments under the Wiggins Island Rail Project Deed, or WIRP Deed, has been achieved. On June 27, 2019, the Queensland Supreme Court delivered judgements in favor of Aurizon against Coronado Curragh Pty Ltd and the other co-defendants.  The Company intends to continue to strongly contest the matter. The Company, together with the other co-defendants, lodged a notice of appeal of the Queensland Supreme Court judgement on July 25, 2019. It is currently expected that, were Aurizon successful in the ultimate result of the litigation and expert determinations, Coronado Curragh Pty Ltd would be required to pay approximately A$2.3 million per annum for the term of the WIRP Deed (which is 233 months). Resolution of this dispute would also result in the Company’s below rail access to WICET (of 1.5 MMtpa) becoming a firm contractual capacity entitlement (and the subject of a 20 year take-or-pay access agreement) instead of an ad hoc entitlement only. The Company’s unaudited Condensed Consolidated Balance Sheet includes an estimated loss contingency associated with these proceedings.

In February 2019, the Queensland Competition Authority, or QCA, issued its final decision in respect of Access Undertaking 5, or UT5. The final decision, consistent with the draft decision issued in December 2017, reduces the rate of return that can be charged by Aurizon on its network routes. The Queensland coal producers experienced material rail haulage underperformance because soon after the draft UT5 decision was handed down by the QCA, the rail track network was severely restricted due to Aurizon’s modification of its maintenance practices in order to lower costs. It is possible that Aurizon will modify its maintenance practices in the future to lower costs should similar decisions be issued by the QCA, resulting in constrained access to the rail network, making it more difficult for customers (including us) to arrange for the transportation of coal in excess of their contracted capacity entitlement and having the potential to increase demurrage costs.

In a constrained rail capacity and high demand environment, there is a risk that we and other users of the network will not be allocated additional access to rail above annual contracted entitlements. Should this occur, the potential impact on us is higher in the short term as our contracted access entitlement for 1.5 MMt per annum of below rail capacity to WICET is currently treated as an ad hoc entitlement. This means that, in the event of a scheduling contest with a contracted user (which could arise because of changes by Aurizon to maintenance practices or because of increased usage of the line by other customers), a path we request may not be able to be scheduled. This capacity is now expected to become the subject of a long-term access agreement as the judgment from the litigation concluded in September 2018 has been handed down and the dispute between Wiggins Island Rail Project customers and Aurizon regarding the “First Milestone Target Date” under the WIRP Deed has been finally resolved.

In June 2018, two holders of preference equity issued by WICET Holdings commenced legal proceedings in the Supreme Court of New South Wales against WICET Pty Ltd and WICET Holdings alleging unpaid dividends in respect of the shares held by them. Although we are not exposed directly to this litigation, an adverse finding may detrimentally impact the financial position of WICET Holdings and WICET Pty Ltd and could result in the senior lenders or a receiver appointed by them taking steps to seek to recover against the shippers (including us) whether through increased terminal handling charges or otherwise.

ITEM 1A. RISK FACTORS

Our registration statement

Quarterly Reports
on Form 10, as amended,10-Q
for
the quarterly periods
ended March 31, 2022 and June 30, 2022, filed
with the SEC and ASX on June 28, 2019,May 9,
2022 and
August 8, 2022:
We
are
subject
to
extensive
forms
of
taxation,
which
imposes
significant
costs
on
us,
and
future
regulations
and
developments
could
increase
those
costs
or
limit
our
ability
to
produce
coal
competitively.
Federal,
state
or
local
governmental
authorities
in
nearly
all
countries
across
the
global
coal
mining
industry
impose various
forms of
taxation
on coal
producers,
including production
taxes,
sales-related
taxes,
royalties,
stamp duty, environmental
taxes and income taxes.
If new legislation or
regulations related to various forms
of coal taxation or
income or other taxes
generally, which
increase our costs or limit our ability to compete
in the areas in which we refer to as our Form 10, includes a detailed discussion of certain material risk factors we face. The information presented below restates the risk factor set forth under the heading “Risks related to our investment in WICET may sell coal, or which
adversely affect our
key customers, are adopted, or if the
basis upon which such duties
or taxes are assessed or levied,
changes or
is different from that provided by us, our business, financial condition andor results of operations”
operations could be adversely
affected.
For example, on September
27, 2022, we received from
the QRO an assessment
of the stamp duty payable
on
our acquisition of the Curragh
mine in Item 1AMarch 2018. The
QRO assessed the stamp
duty on this acquisition at
an
amount of
$53.5 million
(A$82.2 million)
plus unpaid
tax interest
of $7.9
million (A$12.1
million). We
intend to
lodge an objection to the assessment
within the required timeframe and
before the end of November
2022. The
outcome of this objection is uncertain.
We
have
reviewed
the
assessment
and,
based
on
legal
and
valuation
advice
we
have
sought,
continue
to
maintain our Form 10. You should consider this risk factor together withposition
and the other risk factors estimated
accrual of $28.0
million (A$43.0 million)
within “Accrued Expenses
and other matters described
Other Current Liabilities”
in our registration statement andunaudited
Condensed Consolidated
Balance Sheet, as
at September 30,
2022.
We cannot guarantee that the
steps we take to
defend our position in
this matter will be
successful, in this Quarterly Report on Form 10-Q.

Risks related to our investment in WICET may adversely affect our financial condition and results of operations .

We have a minority interest in WICET Holdings Pty Ltd, whose wholly owned subsidiary, WICET Pty Ltd, owns WICET. Other coal producers who export coal through WICET also hold shares in WICET Holdings Pty Ltd. In addition, we and the other coal producers (or shippers) have evergreen, ten year take-or-pay agreements with WICET Pty Ltd and pay a terminal handling charge to export coal through WICET, which is calculated case

the
amount
assessed
by reference to WICET’s annual operating costs, as well as finance costs associated with WICET Pty Ltd’s external debt facilities, refinanced
the
QRO
and extended in late 2018.

Under our take-or-pay agreement with WICET Pty Ltd, or

unpaid
tax
interest
on
the WICET Take-or-Pay Agreement, we are obligated to pay for that capacity via terminal handling charges, whether utilized or not. The terminal handling charge payable by us can be adjusted by WICET Pty Ltd if our share of WICET Pty Ltd’s operating
amount
outstanding
will
become
due
and finance cost increases, due to increased operating costs or because another shipper defaults and has its capacity reduced to nil. The terminal handling charge calculation is subject to a finance cap set under the terms of the WICET Take-or-Pay Agreement and this cap has already been reached and is in force. Since WICET began shipping export tonnages in April 2015, four WICET Holdings Pty Ltd shipper-shareholders have entered administration, resulting in defaults under their take-or-pay agreements and a decrease in the aggregate contracted tonnage at WICET from 27 MMtpa to 15.5 MMtpa.

Given the operation of the finance cap (agreed as part of WICET’s refinance) there is a limit to the recovery by WICET of its financing costs from shippers (subject to certain review event triggers). Accordingly, prior defaults referred to above have resulted in only minor increases to the terminal handling charges payable by the remaining shipper shareholders (including us). These increases have related to higher $/ton operating costs resulting from a lower contract base. If any of the four-remaining shipper shareholders liquidates and/or defaults under its take-or-pay agreement, a review of the finance cap would be triggered and the terminal handling charges for the remaining shipper shareholders, including us, will increase as each remaining shipper effectively would be proportionately liable to pay the defaulting shipper’s share of WICET’s operating and financing costs going forward.

In addition, if we default under our take-or-pay agreement with WICET Pty Ltd, we might be liable for a significant termination payment. The termination payment is approximately equal to our proportion of WICET Pty Ltd’s total external debt (which is based on the proportion that our contracted tonnage bears to the total contracted tonnage at WICET when the payment obligation is triggered). We have provided security to WICET Pty Ltd in the form of a bank guarantee, the amount of which is required to cover our estimated liabilities as a shipper under the WICET Take-or-Pay Agreement for the following 12 month period.

Any attempt by the senior lenders for WICET Pty Ltd’s external debt, or a receiver appointed by them, to take steps to seek to recover against the shipper-shareholders (whether through increased terminal handling charges or otherwise) could materially and adversely impact our business and results of operations. If an insolvency or other event ultimately resulted in a permanent cessation of operations at WICET, we may also be required to procure additional port capacity, as well as be liable for a termination payment under our take-or-pay agreement.

payable.
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES
AND USE OF PROCEEDS
None.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
45
ITEM 3.
DEFAULTS
UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Safety is the cornerstone of the Company’s values and is the number one priority
for all employees at Coronado
Global Resources. Resources Inc.
Our U.S. Operations
include multiple mining
complexes across
three states and
are regulated by
both the U.S.
Mine Safety
and Health
Administration, or
MSHA, and
state regulatory
agencies. Under
regulations mandated
by the Federal Mine Safety and Health Act of 1977, or the Mine Act, MSHA inspects our U.S. mines on a regular
basis and issues various citations and orders when it believes
a violation has occurred under the Mine Act.

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
(17
CFR
229.104),
each
operator
of
a
coal
or
other
mine in
the
United
States
is
required to report certain mine safety results in its periodic reports
filed with the SEC under the
Exchange Act.

Information
pertaining
to
mine
safety
matters
is
included
in
Exhibit 95.1
attached
to
this
Quarterly
Report
on
Form 10-Q. The disclosures reflect the United
States mining operations only, as these requirements do not
apply
to our mines operated outside the United States.

ITEM 5.
OTHER INFORMATION

None.

ITEM 6.
EXHIBITS

The following documents are filed as exhibits hereto:

Exhibit No.

Description of Document

2.1**

Share Sale Agreement-Cork, dated as of December 22, 2017, by and among Coronado Australia Holdings Pty Ltd, Coronado Group LLC and Wesfarmers Limited (filed as Exhibit 2.1 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on June 28, 2019 and incorporated herein by reference)

3.1

Amended and Restated Certificate of Incorporation (filed as

3.2

Amended and Restated By-Laws (filed as Exhibit 3.2 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

4.1

Stockholder’s Agreement, dated as of September 24, 2018, by and between the Company and Coronado Group (filed as Exhibit 4.1 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

4.2

Registration Rights and Sell-Down Agreement, dated as of September 24, 2018, by and between the Company and Coronado Group (filed as Exhibit 4.2 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.1

Relationship Deed, dated as of September 24, 2018, by and among the Company, Coronado Group, certain EMG Group entities and their affiliates (filed as Exhibit 10.1 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.2**

Syndicated Facility Agreement, dated as of September 15, 2018, by and among Coronado Finance Pty Ltd, other affiliates of the Company and Westpac Banking Corporation (filed as Exhibit 10.2 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on June 28, 2019 and incorporated herein by reference)

10.3†

Coronado Global Resources Inc. 2019 Short-Term Incentive Plan (filed as Exhibit 10.3 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.4†

Coronado Global Resources Inc. 2018 Equity Incentive Plan (filed as Exhibit 10.4 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.5†

Coronado Global Resources Inc. 2018 Non-Executive Director Plan (filed as Exhibit 10.5 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.6†

Employment Agreement dated as of September 21, 2018, by and between Coronado Global Resources Inc. and Garold Spindler (filed as Exhibit 10.6 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.7†

Employment Agreement dated as of August 31, 2018, by and between Coronado Curragh Pty Ltd and Ayten Saridas (filed as Exhibit 10.7 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.8†

Employment Agreement dated as of September 21, 2018, by and between Coronado Global Resources Inc. and James Campbell (filed as Exhibit 10.8 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.9†

Employment Agreement dated as of December 20, 2018, by and between Coronado Global Resources Inc. and Richard Rose (filed as Exhibit 10.9 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.10†

Employment Agreement dated as of December 25, 2018, by and between Coronado Global Resources Inc. and Ellen Ewart (filed as Exhibit 10.10 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.11†

Employment Agreement dated as of October 18, 2018, by and between Coronado Curragh Pty Ltd and Emma Pollard (filed as Exhibit 10.11 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

Exhibit No.

Description of Document

10.12†

Form of Stock Option Award Agreement (Long Term Incentive Grant) (filed as Exhibit 10.12 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.13†

Form of Performance Stock Unit Award Agreement (Long Term Incentive Grant) (filed as Exhibit 10.13 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.14†

Form of Non-Executive Director Restricted Stock Unit Award Agreement (filed as Exhibit 10.14 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.15†

Form of Restricted Stock Unit Award Agreement (Retention Grant) (filed as Exhibit 10.15 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.16†

Form of Restricted Stock Unit Award Agreement (STIP Deferral Grant) (filed as Exhibit 10.16 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.17†

Summary of Non-Executive Director Compensation (filed as Exhibit 10.17 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.18†

Form of Agreement of Indemnity, Insurance and Access (filed as Exhibit 10.18 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on April 29, 2019 and incorporated herein by reference)

10.19†

Separation Agreement and General Release, dated May 29, 2019, between Ellen Ewart and the Company and all entities owned or controlled by the Company (filed as Exhibit 10.19 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on June 14, 2019 and incorporated herein by reference)

10.20**

Amended Coal Supply Agreement, dated as of November 6, 2009, by and between Stanwell Corporation Limited and Wesfarmers Curragh Pty Ltd (now known as Coronado Curragh Pty Ltd) (filed as Exhibit 10.20 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on June 14, 2019 and incorporated herein by reference)

10.21**

Deed of Amendment to the Amended Coal Supply Agreement, dated as of November 21, 2016, by and between Stanwell Corporation Limited and Wesfarmers Curragh Pty Ltd (now known as Coronado Curragh Pty Ltd) (filed as Exhibit 10.21 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on June 14, 2019 and incorporated herein by reference)

10.22**

Curragh Mine New Coal Supply Deed, dated August 14, 2018, by and between Stanwell Corporation Limited and Coronado Curragh Pty Ltd (filed as Exhibit 10.22 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on June 14, 2019 and incorporated herein by reference)

10.23

Deed of Amendment, dated September 20, 2018 and effective September 21, 2018, among Coronado Curragh Pty Ltd, Stanwell Corporation Limited and Coronado Group LLC (filed as Exhibit 10.23 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on June 14, 2019 and incorporated herein by reference)

10.24

Deed of Amendment, dated March 5, 2019 and effective May 21, 2019, between Coronado Curragh Pty Ltd and Stanwell Corporation Limited (filed as Exhibit 10.24 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on June 14, 2019 and incorporated herein by reference)

10.25

Deed of Amendment, dated May 9, 2019 and effective May 21, 2019, between Coronado Curragh Pty Ltd and Stanwell Corporation Limited (filed as Exhibit 10.25 to the Company’s Registration Statement on Form 10 (File No. 000-56044) filed on June 14, 2019 and incorporated herein by reference)

31.1

Certification of the Chief Executive Officer pursuant to SEC Rules 13a-14(a) or 15d-14(a) adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of the Chief Financial Officer pursuant to SEC Rules 13a-14(a) or 15d-14(a) adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit No.

Description of Document

32.1

Certification pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

95.1

Mine Safety Disclosures

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

**                                  Portions of this exhibit have been omitted, which portions will be furnished to the SecuritiesCompany’s

3.2
15.1
31.1
31.2
32.1
95.1
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy
Extension Schema Document
101.CAL
Inline XBRL Taxonomy
Extension Calculation Linkbase Document
101.DEF
Inline XBRL Tax
onomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy
Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy
Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline
XBRL and contained in Exhibit 101)
___________________________
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
46
SIGNATURES
Pursuant to the requirements
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.

Coronado Global Resources Inc. (Registrant)

By:

/s/ Ayten Saridas

Ayten Saridas

Chief Financial Officer (as duly authorized officer and as principal financial officer of the registrant)

Coronado Global Resources Inc.
By:
/s/ Gerhard Ziems
Gerhard Ziems
Group Chief Financial Officer (as duly authorized officer
and as principal financial officer of the registrant)
Date: August 5, 2019

54

November 8, 2022