Form10q2023q3p1i0
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM
10-Q

(Mark One)
☒
 
QUARTERLY
 
REPORT PURSUANT TO SECTION 13
 
OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended
September 30, 20222023
OR
☐
 
TRANSITION REPORT PURSUANT TO
 
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from
 
to
 
Commission File Number:
1-16247

Coronado Global Resources Inc.
(Exact name of registrant as specified in its charter)

Delaware
83-1780608
(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 Code)
(
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
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 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.
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
 
☒
 
No
 
☐
Indicate by check mark whether the registrant
 
is a large accelerated filer,
 
an accelerated filer, a nonnon-accelerated
 
-accelerated filer, a smaller reporting
company,
 
or
 
an
 
emerging
 
growth
 
company.
 
See
 
the
 
definitions
 
of
 
“large
 
accelerated
 
filer,”
 
“accelerated
 
filer,”
 
“smaller
 
reporting
company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
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).
 
Yes
 
☐
 
No
☒
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 common
 
stock, par
 
value $0.01
 
per share,
 
outstanding on
 
October 31,
 
2022,2023, including
 
shares of
 
common stock
 
underlying
CDIs, was
167,645,373
.
Form10q2023q3p2i1 Form10q2022q3p2i0.jpgForm10q2023q3p2i0
Steel starts
here.
Quarterly Report on Form 10-Q for the quarterly period ended
 
ended September 30, 2022.2023.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
4
PART I – FINANCIAL INFORMATION
ITEM 1.
 
FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
(In US$ thousands, except share data)
Assets
Note
(Unaudited)
 
September 30,
20222023
December 31,
20212022
Current assets:
Cash and restricted cash
 
$
698,647337,097
$
437,931334,629
Trade receivables, net
 
418,236262,601
271,923409,979
Income tax receivable
10,409
—
Inventories
5
 
106,971207,272
118,922158,018
Other current assets
7
 
59,351118,422
47,64760,188
Assets held for sale
26,1144
27,023—
26,214
Total
 
current assets
 
1,309,319935,801
903,446989,028
Non-current assets:
Property, plant and equipment,
 
net
6
 
1,334,1331,426,769
1,397,3631,389,548
Right of use asset – operating leases, net
9
 
7,89748,479
13,65617,385
Goodwill
 
28,008
28,008
Intangible assets, net
 
3,3623,159
3,5143,311
Restricted deposits
1416
 
88,43967,942
80,98189,062
Deferred income tax assets
 
—1,567
14,716—
Other non-current assets
21,291
33,252
19,72833,585
Total
 
assets
 
$
2,804,4102,533,016
$
2,461,4122,549,927
Liabilities and Stockholders’ Equity
Current liabilities:
 
Accounts payable
 
$
85,35384,863
$
97,51461,780
Accrued expenses and other current liabilities
78
 
406,104257,461
270,942343,691
Income tax payable
 
108,187—
25,612119,981
Asset retirement obligations
 
8,80315,549
9,41410,646
Contract obligations
 
38,75138,495
39,96140,343
Lease liabilities
9
 
8,70716,580
8,4527,720
Other current financial liabilities
 
3,7703,944
8,5084,458
Liabilities held for sale
11,6614
12,113—
12,241
Total
 
current liabilities
 
671,336416,892
472,516600,860
Non-current liabilities:
Asset retirement obligations
 
108,148138,279
110,863127,844
Contract obligations
 
101,03267,924
141,18894,525
Deferred consideration liability
 
226,311254,001
230,492243,191
Interest bearing liabilities
810
 
299,929234,718
300,169232,953
Other financial liabilities
 
9,5435,748
13,8228,268
Lease liabilities
9
 
6,01435,248
12,89415,573
Deferred income tax liabilities
 
109,360109,444
75,75095,671
Other non-current liabilities
 
33,22635,332
26,21627,952
Total
 
liabilities
 
$
1,564,8991,297,586
$
1,383,9101,446,837
Common stock $
0.01
 
par value;
1,000,000,000
 
shares
authorized,
167,645,373
 
shares issued and outstanding as of
September 30, 20222023 and December 31, 20212022
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, 20222023
and December 31, 20212022
—
—
Additional paid-in capital
 
1,091,6511,093,845
1,089,5471,092,282
Accumulated other comprehensive losses
1214
 
(120,136)(121,970)
(44,228)(91,423)
Retained earnings
 
266,319261,878
30,506100,554
Total
 
stockholders’ equity
 
1,239,5111,235,430
1,077,5021,103,090
Total
 
liabilities and stockholders’ equity
 
$
2,804,4102,533,016
$
2,461,4122,549,927
See accompanying notes to unaudited condensed
 
consolidated financial statements.
Coronado Global Resources Inc.
Form 10-Q September 30, 2023
5
Unaudited Condensed Consolidated Statements of
Operations and Comprehensive Income
(In US$ thousands, except share data)
Three months ended
September 30,
Nine months ended
September 30,
Note
2023
2022
2023
2022
Revenues:
Coal revenues
$
707,303
$
863,709
$
2,163,093
$
2,821,334
Other revenues
10,527
10,948
47,977
33,152
Total
revenues
3
717,830
874,657
2,211,070
2,854,486
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
501,471
385,504
1,262,907
1,140,467
Depreciation, depletion and amortization
34,749
37,508
113,052
126,901
Freight expenses
71,746
63,026
192,542
189,316
Stanwell rebate
37,100
54,575
105,357
124,160
Other royalties
92,700
137,331
268,606
299,711
Selling, general, and administrative
expenses
12,221
10,405
29,976
28,657
Total
costs and expenses
749,987
688,349
1,972,440
1,909,212
Other (expense) income:
Interest expense, net
(14,496)
(17,220)
(43,341)
(52,034)
Loss on debt extinguishment
(1,385)
—
(1,385)
—
Decrease (increase) in provision for
discounting and credit losses
536
12
4,255
(572)
Other, net
8,189
32,898
17,704
55,191
Total
other (expense) income, net
(7,156)
15,690
(22,767)
2,585
(Loss) income before tax
(39,313)
201,998
215,863
947,859
Income tax benefit (expense)
11
18,230
(51,423)
(37,775)
(235,391)
Net (loss) income attributable to
Coronado Global Resources Inc.
$
(21,083)
$
150,575
$
178,088
$
712,468
Other comprehensive loss, net of income
taxes:
Foreign currency translation adjustments
14
(18,247)
(41,998)
(30,547)
(75,908)
Total
other comprehensive loss
(18,247)
(41,998)
(30,547)
(75,908)
Total
comprehensive (loss) income
attributable to Coronado Global
Resources Inc.
$
(39,330)
$
108,577
$
147,541
$
636,560
(Loss) earnings per share of common stock
Basic
12
(0.13)
0.90
1.06
4.25
Diluted
12
(0.13)
0.90
1.06
4.25
See accompanying notes to unaudited condensed
consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
56
Unaudited Condensed Consolidated Statements of
 
Operations and Comprehensive IncomeStockholders’ Equity
(In US$ thousands, except share data)
Three months ended
Common stock
September 30,Preferred stock
Nine months endedAdditional
September 30,Accumulated other
NoteTotal
paid in
comprehensive
Retained
stockholders
Shares
Amount
Series A
Amount
capital
losses
earnings
equity
Balance December 31, 2022
2021
2022
2021
Revenues:
Coal revenues167,645,373
$
863,7091,677
1
$
563,287—
$
2,821,3341,092,282
$
1,246,918(91,423)
Coal revenues from related parties$
100,554
$
1,103,090
Net income
—
—
—
97,335—
—
—
107,860
107,860
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 costscomprehensive loss
—
—
—
2,300—
—
(4,503)
—
(4,503)
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 extinguishmentcomprehensive (loss) income
—
—
—
(5,744)—
Decrease (increase) in provision—
(4,503)
107,860
103,357
Share-based compensation for equity
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 interestclassified awards
—
—
—
(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(308)
—
(2,204)
—
4,045(308)
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 interestDividends
—
—
—
(2)—
—
—
(8,382)
(8,382)
Balance March 31, 2023
167,645,373
$
1,677
1
$
—
$
1,091,974
$
(95,926)
$
200,032
$
1,197,757
Net income
—
—
—
—
—
—
91,311
91,311
Other comprehensive loss
—
—
—
—
—
(7,797)
—
(7,797)
Total
 
comprehensive (loss) income (loss)
attributable to Coronado Global—
Resources Inc.—
—
—
—
(7,797)
91,311
83,514
Share-based compensation for equity
classified awards
—
—
—
—
1,289
—
—
1,289
Balance June 30, 2023
167,645,373
$
108,5771,677
1
$
71,818—
$
636,5601,093,263
$
(26,818)(103,723)
Earnings (loss) per share of common stock$
Basic291,343
10$
0.901,282,560
0.49Net loss
4.25—
(0.09)—
Diluted—
10—
0.90—
0.49—
4.25(21,083)
(0.09)(21,083)
See accompanying notes to unaudited condensedOther comprehensive loss
—
—
—
—
—
(18,247)
—
(18,247)
Total
 
consolidated financial statements.comprehensive loss
—
—
—
—
—
(18,247)
(21,083)
(39,330)
Share-based compensation for equity
classified awards
—
—
—
—
582
—
—
582
Dividends
—
—
—
—
—
—
(8,382)
(8,382)
Balance September 30, 2023
167,645,373
$
1,677
1
$
—
$
1,093,845
$
(121,970)
$
261,878
$
1,235,430
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
6
Unaudited Condensed Consolidated Statements of
Stockholders’ Equity
(In US$ thousands, except share data)7
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
8
Unaudited Condensed Consolidated Statements of
 
Cash Flows
(In US$ thousands)
Nine months ended
September 30,
20222023
20212022
Cash flows from operating activities:
Net income (loss)
$
178,088
$
712,468
$
(14,069)
Adjustments to reconcile net income to cash and restricted cash
 
provided by
operating activities:
Depreciation, depletion and amortization
126,901113,052
132,754126,901
Amortization of right of use asset - operating leases
5,5976,894
6,6945,597
Amortization of deferred financing costs
1,4511,595
2,6491,451
Loss on debt extinguishment
—1,385
5,744—
Non-cash interest expense
23,54424,748
21,43123,544
Amortization of contract obligations
(26,883)(23,896)
(25,612)(26,883)
Loss on disposal of property,
 
plant and equipment
433393
835433
Equity-based compensation expense
2,1041,563
3382,104
Deferred income taxes
49,92913,140
2,18949,929
Reclamation of asset retirement obligations
(3,168)
(3,961)
(2,393)
Increase (decrease)(Decrease) increase in provision for discounting and credit
losses
572(4,255)
(8,074)572
Changes in operating assets and liabilities:
Accounts receivable - including related party receivables
147,956
(170,094)
9,783
Inventories
6,094(54,704)
(12,889)6,094
Other assets
(30,109)(5,197)
12,187(30,109)
Accounts payable
(3,371)25,676
22,899(3,371)
Accrued expenses and other current liabilities
161,224(69,303)
16,363161,224
Operating lease liabilities
(6,202)(9,311)
(7,875)(6,202)
Income tax payable
88,614(128,418)
—88,614
Change in other liabilities
7,0737,443
8,1617,073
Net cash provided by operating activities
945,384223,681
171,115945,384
Cash flows from investing activities:
Capital expenditures
(141,928)(182,442)
(75,897)(141,928)
Purchase of restricted and other deposits
(9,558)(26,836)
(100,166)(9,558)
Redemption of restricted and other deposits
81626,250
30,281816
Net cash used in investing activities
(150,670)(183,028)
(145,782)(150,670)
Cash flows from financing activities:
Proceeds from interest bearing liabilities and other financial
liabilities
—
411,524
Debt issuance costs and other financing costs
—(3,420)
(15,263)—
Principal payments on interest bearing liabilities and other financial
 
liabilities
(9,773)(2,732)
(371,379)(9,773)
Principal payments on finance lease obligations
(91)(98)
—(91)
Premiums paid on early redemption of debt
(90)—
—(90)
Dividends paid
(473,900)(16,755)
—
Proceeds from stock issuance, net
—
97,741(473,900)
Net cash (used in) provided byused in financing activities
(483,854)(23,005)
122,623(483,854)
Net increase in cash and restricted cash
310,86017,648
147,956310,860
Effect of exchange rate changes on cash and restricted
 
cash
(50,144)(15,180)
2,287(50,144)
Cash and restricted cash at beginning of period
437,931334,629
45,736437,931
Cash and restricted cash at end of period
$
698,647337,097
$
195,979698,647
Supplemental disclosure of cash flow information:
Cash payments for interest
$
19,03514,598
$
13,68119,035
Cash paid (refund) for taxes
$
90,888148,775
$
(16,130)90,888
Restricted cash
$
251
$
251
See accompanying notes to unaudited condensed
 
consolidated financial statements.
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
9
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
 
FINANCIAL STATEMENTS
1.
 
Description of Business, Basis of Presentation
(a)
Description of the Business
 
Coronado
 
Global
 
Resources
 
Inc.
 
is
 
a
 
global
 
producer,
 
marketer,
 
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 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 U.S. 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 Annual Report on Form 10-K filed with the
 
SEC and the
Australian Securities Exchange, or the ASX, on February
 
22, 2022.21, 2023.
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.,
and
 
its wholly-owned
 
subsidiarieswholly-owned
and subsidiaries
in which
it has
a controlling interest.subsidiaries.
 
References
to
 
“US$”
or
 
“USD”
are
 
references
to
 
U.S.
dollars.
References
References
to
 
“A$”
or
 
“AUD” are
 
are
references
to
 
Australian
dollars,
 
the
lawful
 
currency
of
 
the
Commonwealth
 
of
Australia.
The
“Company”
and
Australia. The “Company” “Coronado”
are
used
interchangeably
to
refer
to
Coronado
Global
Resources
Inc.
and “Coronado” are used interchangeably to refer
its
subsidiaries,
collectively, or to Coronado Global Resources Inc.
and its subsidiaries, collectively,, as
 
or to Coronado 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 upon 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,
 
20212022 has been derived from
 
the Company’s audited consolidated balance sheet at
 
that date.
The
 
Company’s
 
results
 
of
 
operations
 
for
 
the
 
three
 
and
 
nine
 
months
 
ended
 
September
 
30,
 
20222023
 
are
 
not
necessarily indicative of the results that may be expected for
 
the year ending December 31, 2022.2023.
2.
 
Summary of Significant Accounting Policies
Please see Note 2 “Summary
 
of Significant Accounting Policies”
 
contained in the audited
 
audited consolidated financial
statements for the year ended December 31, 20212022 included in Coronado Global Resources Inc.’s Annual Report
on Form 10-K filed with the SEC and ASX on February
 
22, 2022.21, 2023.
 
(a) Newly Adopted Accounting Standards
During
 
the
 
period,
 
there
 
has
 
been
 
no
 
new
 
Accounting
 
Standards
 
Update
 
issued
 
by
 
the
 
Financial
 
Accounting
Standards Board that had a material impact on the Company’s
 
consolidated 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
 
United States,
or U.S. Operations,
 
comprise
two
 
100%-owned producing
 
mine complexes (Buchanan
 
and Logan),
one
 
100%-
owned idled mine complex (Greenbrier) and
two
 
development properties (Mon Valley
 
and Russell County).
 
The
 
Company
 
operates
 
its
 
business
 
along
two
 
reportable
 
segments:
 
Australia
 
and
 
the
 
United
 
States.
 
The
organization
 
of
 
the
two
two
 
reportable
 
segments
 
reflects
 
how
 
the
 
Company’s
 
chief
 
operating
 
decision
 
maker,
 
or
CODM, manages and allocates resources to the various
 
components of the Company’s business.
The CODM
 
uses Adjusted
 
EBITDA as
 
the primary
 
metric to
 
measure each
 
segment’s
 
operating performance.
Adjusted EBITDA is not a measure of financial performance in accordance with U.S. GAAP.
 
Investors should be
aware that
 
the 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, 20222023
 
10
Adjusted EBITDA is
 
defined as earnings
 
before interest, taxes,
 
depreciation, depletion and
 
amortization and other
foreign exchange losses. Adjusted EBITDA is
 
also adjusted for certain discrete items that
 
management exclude
in analyzing each
 
of the
 
Company’s segments’ operating performance.
 
“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
 
a reportable segment but is discretely disclosed
for purposes of reconciliation to the Company’s condensed
 
consolidated financial statements.unaudited Condensed Consolidated Financial Statements.
Reportable segment
 
results as
 
of and for
 
the three
and nine
months ended
September 30,
2023 and
 
nine months
ended September
30, 2022
and 2021
are
presented below:
(in US$ thousands)
Australia
United
States
Other and
Corporate
Total
Three months ended September 30, 2023
Total
revenues
$
455,774
$
262,056
$
—
$
717,830
Adjusted EBITDA
(32,353)
47,630
(11,899)
3,378
Total
assets
1,217,712
1,012,399
302,905
2,533,016
Capital expenditures
10,625
50,709
173
61,507
Three months ended September 30, 2022
Total
 
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
1,405,333
988,728
410,349
2,804,410
Capital expenditures
17,289
31,174
103
48,566
ThreeNine months ended September 30, 20212023
Total
 
revenues
$
342,3721,286,242
$
231,219924,828
$
—
$
573,5912,211,070
Adjusted EBITDA
67,38335,580
88,441349,160
(8,084)(29,088)
147,740
Net income (loss)
39,868
54,444
(12,324)
81,988355,652
Total
 
assets
1,155,0821,217,712
862,9611,012,399
183,863302,905
2,201,9062,533,016
Capital expenditures
7,97234,352
9,436115,917
182253
17,590150,522
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 Adjusted EBITDA to net income attributable to the
 
Company for the three and nine months
ended September 30, 20222023 and 20212022 are as follows:
Three months ended
 
Nine months ended
September 30,
September 30,
(in US$ thousands)
2022
20212023
2022
20212023
2022
Net (loss) income (loss)
$
(21,083)
$
150,575
$
81,988178,088
$
712,468
$
(14,069)
Depreciation, depletion and amortization
34,749
37,508
38,461113,052
126,901
132,754
Interest expense (net of interest income)
14,496
17,220
18,25143,341
52,034
49,982Income tax (benefit) expense
(18,230)
51,423
37,775
235,391
Other foreign exchange (gains) lossesgains
(1)
(7,859)
(31,917)
2,487(17,265)
(55,064)
4,376
Loss on extinguishment of debt
—1,385
—
—
5,744
Income tax expense (benefit)
51,423
9,096
235,391
(1,788)
Restructuring costs1,385
—
—
—
2,300
(Gains) lossesLosses (gains) on idled assets held for sale
(2)
456
(1,221)
(113)3,531
621
2,216
(Decrease) increase in provision for discounting
discounting and credit losses
(536)
(12)
(2,430)(4,255)
572
(8,074)
Consolidated Adjusted EBITDA
$
3,378
$
223,576
$
147,740355,652
$
1,072,923
$
173,441
(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 an active plan
to sell. Prior to March 31, 2023, the
Company had idled
assets that were classified as held for sale. Refer
to Note 4 “Assets held for sale” for further details.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
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, 20222023 and 20212022 are as follows:
Nine months ended September 30,
(in US$ thousands)
20222023
20212022
Capital expenditures per unaudited Condensed Consolidated Statements
 
Statements of Cash
Cash Flows
$
141,928182,442
$
75,897141,928
Accruals for capital expenditures
5,580898
—5,580
Payment for capital acquired in prior periods
(11,241)
(7,475)
(6,000)Advance payment to acquire long lead capital items
(21,577)
—
Capital expenditures per segment detail
$
140,033150,522
$
69,897140,033
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
 
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 September 30, 2023
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
419,032
$
232,870
$
651,902
Thermal coal
27,783
27,618
55,401
Total
coal revenue
446,815
260,488
707,303
Other
(1)
8,959
1,568
10,527
Total
$
455,774
$
262,056
$
717,830
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
Nine months ended September 30, 20212023
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
306,0331,195,413
$
228,561773,184
$
534,5941,968,597
Thermal coal
26,52565,328
2,168129,168
28,693194,496
Total
 
coal revenue
332,5581,260,741
230,729902,352
563,2872,163,093
Other
(1)
9,81425,501
49022,476
10,30447,977
Total
$
342,3721,286,242
$
231,219924,828
$
573,5912,211,070
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
(1) Other revenue for the Australian segment includes
the amortization of the Stanwell non-market coal
supply contract obligation liability.
 
 
 
 
 
 
 
 
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2023
12
4.
Assets Held for Sale
During
the
fourth
quarter
of
2020, the
Company
committed
to
a
plan
to
sell
the
Greenbrier
mining
asset
and
determined that all
of the criteria
to classify assets
and liabilities as
held for sale
were met. The
asset is part
of
our U.S. segment, located
in the State of Virginia
in the United States. The
Greenbrier asset does not
form part
of the Company’s core business strategy and
has been idle since April 1, 2020.
The
Company
remains
committed
to
a
plan
to
sell
the
asset,
however,
on
March
31,
2023,
the
Company
concluded that the timing of
the sale within the next
twelve months is uncertain.
As such, the Greenbrier
mining
asset
has
been
reclassified
as
held
and
used
since
March
31,
2023,
as
it
does
not
meet
the
criteria
for
classification as held for sale.
The Greenbrier
mining asset
remains idle
and the
Company does
not intend
to recommence
operations at
the
mine.
The assets and
liabilities of Greenbrier met
the criteria for
classification as held for
sale as of
December 31, 2022,
therefore the Condensed Consolidated Balance Sheet continues to reflect these assets and liabilities as held for
sale as of that date.
5.
Inventories
 
 
 
 
 
 
 
(in US$ thousands)
September 30,
2023
December 31,
2022
Raw coal
$
72,839
$
50,604
Saleable coal
80,082
45,913
Total
coal inventories
152,921
96,517
Supplies inventory
54,351
61,501
Total
inventories
$
207,272
$
158,018
Coal inventories measured at
its net realizable value
were $
1.6
million
and $
5.0
million as at September
30, 2023
and December 31, 2022,
respectively,
and primarily relates
to coal designated for
deliveries under the Stanwell
non-market coal supply agreement.
6.
Property, Plant and
Equipment
(in US$ thousands)
September 30,
2023
December 31,
2022
Land
$
27,847
$
27,711
Buildings and improvements
87,900
91,336
Plant, machinery, mining
equipment and transportation vehicles
1,088,959
1,012,844
Mineral rights and reserves
390,394
373,309
Office and computer equipment
9,586
9,488
Mine development
548,733
565,106
Asset retirement obligation asset
76,698
87,877
Construction in process
153,162
82,713
Total
cost of property,
plant and equipment
2,383,279
2,250,384
Less accumulated depreciation, depletion and amortization
956,510
860,836
Property, plant and
equipment, net
$
1,426,769
$
1,389,548
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2023
13
7. Other Assets
(in US$ thousands)
September 30,
2023
December 31,
2022
Other current assets
Prepayments
$
33,761
$
26,831
Long service leave receivable
7,901
7,884
Tax
credits receivable
4,183
4,183
Deposits to acquire capital items
33,289
—
Short term deposits
21,618
—
Other
17,670
21,290
Total
other current assets
$
118,422
$
60,188
The Company has
other current assets
which includes prepayments,
favorable mineral leases,
long service leave
receivable,
equipment
deposits,
short
term
deposits
and
coalfield
employment
enhancement
tax
credit
receivable.
Short term deposits are term deposits that do not meet
the cash and cash equivalents criteria.
8.
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the
following:
(in US$ thousands)
September 30,
2023
December 31,
2022
Wages and employee benefits
$
45,355
$
38,687
Taxes
other than income taxes
8,123
5,988
Accrued royalties
61,831
117,131
Accrued freight costs
32,290
44,496
Accrued mining fees
81,466
103,492
Acquisition related accruals
11,172
11,669
Other liabilities
17,224
22,228
Total
accrued expenses and other current liabilities
$
257,461
$
343,691
Acquisition
related
accruals
is
an
accrual
for
the
estimated
remaining
stamp
duty
payable
on
the
Curragh
acquisition,
including
penalty
interest,
of
$
11.2
million
(A$
17.3
million).
Refer
to
Note
16
“Contingencies”
for
further details.
9.
Leases
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
of terms within
these agreements,
the Company classifies
a lease as
either finance
or
operating.
During the nine months
period ended September 30,
2023, the Company entered
into a number of agreements
to
lease
mining
equipment.
On
mobilization
of
this
mining
equipment,
the
Company
recognized
right-of-use
assets and operating lease liabilities of $
38.9
million.
As of September 30,
2023, there are additional
operating leases of
mining equipment, which
have not yet been
mobilized, that have
a present value
of minimum lease
payments of approximately $
34.0
million. These operating
leases have commenced in October 2023 with lease terms
of
5
years.
Information related to the Company’s right-of-use
assets and related lease liabilities are as follows:
 
 
 
 
 
 
 
 
 
 
 
 
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
1214
Three months ended
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 the 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,
2023
September 30,
2022
December 31,September 30,
20212023
Raw coalSeptember 30,
2022
Operating lease costs
$
12,9985,200
$
17,3341,699
Saleable coal$
34,2009,697
42,006$
6,514
Cash paid for operating lease liabilities
4,310
2,039
9,311
6,202
Finance lease costs:
Amortization of right of use assets
32
31
92
130
Interest on lease liabilities
2
4
8
21
Total
 
coal inventories
47,198
59,340
Supplies inventory
59,773
59,582
Total
inventoriesfinance lease costs
$
106,97134
$
118,92235
$
100
$
151
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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in US$ thousands)
September 30,
2023
December 31,
2022
Operating leases:
Operating lease right-of-use assets
$
48,479
$
17,385
Finance leases:
Property and equipment
360
371
Accumulated depreciation
(243)
(186)
Property and equipment, net
117
185
Current operating lease obligations
16,484
7,593
Operating lease liabilities, less current portion
35,248
15,505
Total
operating lease liabilities
51,732
23,098
Current finance lease obligations
96
127
Finance lease liabilities, less current portion
—
68
Total
Finance lease liabilities
96
195
Current lease obligation
16,580
7,720
Non-current lease obligation
35,248
15,573
Total
Lease liability
$
51,828
$
23,293
 
 
 
September 30,
2023
December 31,
2022
Weighted Average Remaining
Lease Term (Years)
Weighted average remaining lease term – finance
leases
0.75
1.52
Weighted average remaining lease term – operating
leases
3.19
4.11
Weighted Average Discount
Rate
Weighted discount rate – finance lease
7.60%
7.60%
Weighted discount rate – operating lease
9.00%
8.94%
 
 
 
 
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
1315
6.
The Company’s operating leases have remaining lease
 
Property, Plant andterms of
1
 
Equipmentyear to
5
years, some of which include
options
to extend the terms
where the Company deems
it is reasonably certain
the options will be
exercised. Maturities
of lease liabilities as at September 30, 2023, are as follows:
(in US$ thousands)
September 30,Operating
2022Lease
Finance
Lease
Year ending
December 31,
2021
Land2023
$
26,6615,483
$
27,85333
Buildings and improvements2024
87,92619,430
88,07966
Plant, machinery, mining2025
18,642
—
2026
11,333
—
2027
3,213
—
Thereafter
1,093
—
Total
 
equipment and transportation vehicleslease payments
976,63359,194
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
2,145,71999
Less accumulated depreciation, depletion and amortizationimputed interest
814,224(7,462)
748,356(3)
Net property, plantTotal
 
and equipmentlease liability
$
1,334,13351,732
$
1,397,36396
7.
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the
following:
(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
accrual for the estimated
stamp duty on the
Curragh acquisition of $
28.0
million
(A$
43.0
million). Refer to Note 14. “Contingencies” for further details.
8.10.
 
Interest Bearing Liabilities
The following is a summary of interest-bearing liabilities
 
at September 30, 2022:2023:
 
(in US$ thousands)
September 30, 20222023
December 31, 20212022
Weighted Average
Interest Rate at
September 30, 20222023
Final
Maturity
10.75
% Senior Secured Notes
$
312,741242,326
$
315,000242,326
12.1512.14
%
(2)
2026
New ABL Facility
—
—
20242026
Discount and debt issuance costs
(1)
(12,812)(7,608)
(14,831)(9,373)
Total
 
interest bearing liabilities
$
299,929234,718
$
300,169232,953
(1)
Debt issuance costs incurred on the establishment
 
of the ABL Facility has been included within
 
"Other non-current assets" onin the
unaudited Condensed Consolidated Balance Sheet.
(2)
 
Represents the effective interest rate.
Senior Secured Notes
As of
 
September 30,
 
2022,2023, the
 
Company’s
 
aggregate principal
 
amount of
 
the
10.750
% Senior
 
Secured Notes
due
 
2026,
 
or
 
the
 
Notes,
 
outstanding
 
was
 
$
312.7242.3
 
million.
 
The
 
Notes
 
mature
 
on
May 15, 2026
 
and
 
are
 
senior
secured obligations of the Company.
The
 
terms
 
of
 
the
 
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 Indenture
 
contains
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
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, 2022,2023, the Company was in
 
compliance with all applicable covenants under
the Indenture.
ForUnder the terms of the
 
nine months endedIndenture, upon the occurrence of a “Change
 
September 30, 2022,
in connection with
the dividends paid
of Control” (as defined in the
 
period,Indenture), the Company
offered to purchase up to a total of $
225.8
issuer
 
million aggregate principal amount is
required
to
make
an
offer,
or
a
Change
of the Notes pursuant
Control
Offer,
to the terms
ofrepurchase
 
the
 
Indenture.Notes
 
Forat
101
%
of
 
the
aggregate principal
 
nineamount thereof,
 
monthsplus accrued
 
endedand unpaid
 
Septemberinterest, if
 
30,any,
 
2022,to, but
excluding, the
repurchase
date. Alternatively,
if the
issuer elects
to redeem
all of
the Notes,
during the
12-month period
commencing
on
May 15 of
the years set
forth below at
the redemption
prices (expressed
in percentages of
principal amount on
the redemption date) set forth below, plus accrued and unpaid interest to,
but not including, the redemption date,
the issuer is not required to make a Change of Control
Offer:
Period
Redemption price
2023
108.06%
2024
104.03%
2025 and thereafter
100.00%
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2023
16
New Asset Based Revolving Credit Facility
On May
8, 2023,
the Company, Coronado Coal
Corporation, a Delaware
corporation and wholly
owned subsidiary
of the Company,
Coronado Finance Pty
Ltd, an Australian
proprietary company
and a wholly
owned subsidiary
of the Company,
or an Australian
Borrower, Coronado
Curragh Pty Ltd,
an Australian proprietary
company and
wholly
owned
subsidiary
of
 
the
 
Company,
 
purchasedor
 
an
 
aggregate
principal amount, forAustralian
 
accepted offers, Borrower
and,
together
with
the
other
Australian
Borrower, the Borrowers,
and the other guarantors party
thereto, collectively with the
Company,
the Guarantors
and, together
with the
Borrowers, the
Loan Parties,
entered into
a senior
secured asset-based
revolving credit
agreement in
an initial
aggregate amount
of $
2.3150.0
 
million, or
the New
ABL Facility,
with Global
Loan Agency
Services Australia
Pty Ltd,
as the
Administrative Agent,
Global Loan
Agency Services
Australia Nominees
Pty
Ltd, as the
Collateral Agent,
the Hongkong and
Shanghai Banking Corporation
Limited, Sydney
Branch, as the
Lender, and DBS Bank
Limited, Australia Branch,
as the
Lender and, together
with the other
Lender, the Lenders.
On August 3, 2023, the Company
satisfied all conditions precedent
under the New ABL Facility,
at which time it
became effective and replaced the predecessor
ABL Facility.
The New
ABL Facility
matures in
August 2026
and provides
for up
to $
150.0
million in
borrowings, including
a
$
100.0
million sublimit for the issuance
of letters of credit and $
70.0
million sublimit as a revolving
credit facility.
Availability under the New
ABL Facility is
limited to an
eligible borrowing base, determined
by applying customary
advance rates to eligible accounts receivable and inventory.
Borrowings under
the New
ABL Facility
bear interest
at a
 
pricerate per
annum equal
to an
applicable rate
of
1042.80
% of
plus BBSY,
for loans denominated in A$, or SOFR, for loans denominated
in US$, at the Borrower’s election.
The New
ABL Facility
is guaranteed
by the
 
principal amount ofGuarantors.
 
the Notes,
plus accrued and unpaid interest on the Notes to, but notAmounts outstanding
 
including, the date of redemption.
The carrying
value of
debt issuance
costs, recorded
as a
direct deduction
fromunder the
 
face amountNew ABL
Facility are
secured by
(i) first
priority lien
in the
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
 
Notes,foregoing, collectively,
were $the New ABL Collateral, (ii)
a second-priority lien on substantially
all of the Company’s
assets and the assets
of
12.8the guarantors, other than the New ABL
Collateral, and (iii) solely in the case of
the obligations of the Australian
Borrower, a featherweight
floating security interest over certain
assets of the Australian Borrower,
in each case,
subject to certain customary exceptions.
The New
ABL Facility
contains customary representations
and warranties
and affirmative and
negative covenants
including, among
others, a
covenant regarding
the maintenance
of leverage
ratio to
be less
than
3.00
 
million and $times, a
14.8covenant regarding maintenance of interest coverage ratio to be more than
3.00
 
million at September 30, 2022 and December 31, 2021, respectively.times, covenants relating to the
ABL Facility
On May 12, 2021, the Company entered into a senior secured asset-based revolving credit agreement providing
forpayment of dividends, or purchase or redemption of, with respect to any Equity Interests of Holdings or
 
aany of its
Subsidiaries,
 
multi-currencycovenants
 
asset-based-loanrelating
 
facility,to
financial
reporting,
covenants
relating
to
the
incurrence
of
liens
 
or
encumbrances, covenants relating to the incurrence or prepayment of certain debt, compliance with laws, use of
proceeds, maintenance of properties, maintenance of insurance, payment obligations, financial accommodation,
mergers and
sales of all
or substantially all
of the Borrowers
and Guarantors’, collectively
the Loan Parties,
assets
and limitations on changes in the nature of the Loan Parties’
business.
Subject
to
customary
grace
periods
and
notice
requirements,
the
New
 
ABL
 
Facility
 
inalso
 
ancontains
 
initialcustomary
events of default.
Under the terms of New ABL Facility,
 
principala Review Event (as defined in the New ABL Facility) is triggered if, among
other matters, a “change of control” (as defined in the
 
amountNew ABL Facility) occurs.
Following the
occurrence of
a Review
Event, the
Borrowers must
promptly meet
and consult
in good
faith with
the Administrative Agent and the Lenders to agree a
strategy to address the relevant Review Event including but
not limited to a restructure of the terms of the New ABL Facility to the satisfaction of the Lenders
.
If at the end of
a period
 
of
$
100.020
 
million,
including a $
30.0
business days
 
million sublimit forafter the
occurrence
of the
Review Event,
 
the issuance ofLenders
 
lettersare not
satisfied
with the
result of credittheir discussion or meeting with the Borrowers or do not wish to
 
and $continue to provide their commitments,
5.0
the Lenders may declare all amounts owing
 
million for swinglineunder the ABL Facility immediately due and payable,
terminate such
Lenders’
commitments
to
make
 
loans at any
time outstanding, subject to borrowing base availability.
The ABL Facility matures on
May 12, 2024
.
Borrowings
 
under
 
the
 
ABL
 
Facility,
 
bearrequire
 
interestthe
 
at
a
rate equalBorrowers
 
to
 
acash
 
BBSYcollateralize
 
rateany
letter of credit obligations and/or exercise any and all remedies
 
plus an
applicable
margin.
In
addition to paying
interest on the
outstanding borrowings
and other rights under the New ABL Facility.
Facility,To establish
 
the New ABL Facility, the Company isincurred debt issuance costs of $
3.4
 
also requiredmillion. The Company has
to pay a fee in respect of unutilized commitments, on amounts available to be drawn under outstanding letters of
credit and certain administrative fees.elected an accounting
 
policy to present debt
issuance costs incurred
before the debt liability
is recognized (e.g.
before the debt
proceeds are received)
as an asset
which will be
amortized ratably
over the term
of the facility.
The costs
will not
be subsequently
reclassified as
a direct
deduction of
the liability.
The carrying
value of
debt
issuance costs, recorded
as “Other
non-current assets” in
the unaudited Condensed
Consolidated Balance Sheet
was $
2.9
million as at September 30, 2023.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2023
17
As
at
 
September
 
30,
 
2022,2023,
the
letter
of
credit
sublimit
had
been
partially
used
to
issue
$
no21.6
 
amountsmillion
 
wereof
 
drawnbank
guarantees on
behalf of
the Company
 
and
no
 
lettersamounts were
drawn under
the revolving
credit sublimit
 
of credit
were
outstanding
under
the
ABLNew
ABL Facility.
 
AtAs at September 30,
 
30, 2022,
2023, the Company
was in
 
compliance with all applicable covenants under the
New ABL Facility.
Predecessor ABL Facility
 
all applicable
On
 
covenants underAugust
3,
2023,
 
the ABL
Facility.
The carrying value of debt
 
issuance costs, recorded as “Other non-current assets” inNew
ABL
Facility
replaced
 
the unaudited Consolidated
predecessor
ABL
Facility.
As
a
result
of
the
early
Balance Sheets, weretermination of the predecessor ABL Facility, the Company recorded a loss on
debt extinguishment of $
2.9
million and $
4.31.4
 
million at
in its unaudited
Condensed Consolidated
Statement of
Operations and
Comprehensive Income
for each
of the
three and nine months ended September 30, 2023.
The
 
2022 and December 31, 2021,foregoing
 
respectively.descriptions
of
the
Notes
and
the
New
ABL
Facility
are
subject
to
the
disclosure
in
Note
17.
“Related Party Transactions” incorporated
herein by reference.
 
9.
11.
 
Income Taxes
For the nine months ended
 
September 30, 20222023 and
 
2021,2022, 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
 
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 20222023 estimated annual effective tax rate is
24.818.5
%, which has been favorably impacted by
mine depletion deductions in
 
the United StatesStates.
The Company had an
 
and includes a
discreteincome tax expense of
 
$
0.637.8
 
million.million based
The Companyon
an
had an
income
 
before
tax
of
$
215.9
million
for
the
nine
months
ended
September
30,
2023,
which
includes
a
discrete benefit of $
2.1
million relating to the prior year for Australia.
Income tax expense of
 
$
235.4
 
million based on an
income before tax
of $
947.9
million for the
nine months
ended September 30, 2022.
Income tax
benefit of
$
1.8
million for
the nine
 
months ended September
 
September 30, 2022 was calculated
 
2021 was
calculated based
on an
an estimated annual effective tax rate of
11.324.8
% for the period.
The Company utilizes the
 
“more likely than not”
 
standard in recognizing
 
a tax benefit in
 
its financial statements.
For the nine months
 
ended September 30,
 
2022,2023, the Company
 
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
 
four years
 
from the
 
date of
assessment.
The Company assessed the need for valuation allowances by evaluating future taxable income, available for tax
strategies and the reversal of temporary tax differences.
At December 31,
2021, the Australian
Operations had
tax losses carried
forward of $
25.4
million (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)
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
1518
utilized in
2022 and
both the
Australian Operations
and U.S.
Operations would
be in
tax payable
positions. In
addition, a company, which is not part of the Australian tax consolidated group, had tax losses carried forward of
$
7.7
million (tax effected) for which a full valuation allowance
has been recognized.
10.12.
 
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.
Basic and diluted earnings per share was calculated as
 
follows (in thousands, except per share data):
Three months ended September 30,
Nine months ended September 30,
(in US$ thousands, except per share data)
2022
20212023
2022
20212023
2022
Numerator:
Net (loss) 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
 
$
(21,083)
$
150,575
$
81,988178,088
$
712,468
$
(14,067)
Denominator (in thousands):
 
Weighted-average shares of common stock
outstanding
167,645
167,645
167,645
153,078167,645
Effects of dilutive shares
—
342
171447
185
—
Weighted average diluted shares of common
common stock outstanding
167,645
167,987
167,816168,092
167,830
153,078
(Loss) Earnings (Loss) Per Share (US$):
Basic
(0.13)
0.90
0.491.06
4.25
(0.09)Dilutive
Dilutive(0.13)
0.90
0.491.06
4.25
(0.09)
11.
The Company’s common stock is publicly traded on the
ASX in the form of CDIs, convertible at the option of the
holders into shares of the Company’s common stock
on a
10-for-1 basis
.
13.
 
Fair Value Measurement
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
 
September
 
30,
 
2022,2023,
 
there
 
were
no
 
financial
 
instruments
 
required
 
to
 
be
 
measured
 
at
 
fair
 
value
 
on
 
a
recurring basis.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2023
19
Other Financial Instruments
The following methods
 
and assumptions
 
are used to
 
estimate the fair
 
value of other
 
financial instruments
 
as of
September 30, 20222023 and December 31, 2021:2022:
●
 
Cash
 
and
 
restricted
 
cash,
 
accounts
 
receivable,
 
short-term
deposits,
accounts
 
payable,
 
accrued
expenses,
 
lease
 
liabilities
and
 
other
 
current
 
financial
 
liabilities:
 
The
 
carrying
 
amounts
 
reported
 
in
 
the
unaudited Condensed Consolidated
 
unaudited
Condensed
Consolidated Balance Sheets approximate
fair value due to the
 
the short maturity of
these instruments.
●
 
Restricted
 
deposits,
 
lease
 
liabilities,
 
interest
 
bearing
 
liabilities
 
and
 
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 are carried at
 
amortized
cost.
As
of
September
30,
2022,
2023, there
were
no
 
borrowingsamounts drawn under the revolving credit sublimit of the
outstanding
under
the
New ABL
 
Facility.
 
The
estimated fair
 
fair value of
 
of the
 
Notes isas
 
approximatelyof September
 
30, 2023
was approximately
$
326.8249.6
 
million based upon quoted market prices in a market
 
upon observable
market data
(Levelthat is not considered active (Level 2).
12.
14.
 
Accumulated Other Comprehensive Losses
The Company’s Accumulated Other Comprehensive
Losses consists of foreign currency translation adjustment
of subsidiaries for which the functional currency is different
of the Group’s functional currency in U.S.
dollar.
Accumulated other comprehensive losses consisted of
 
the following at September 30, 2022:2023:
(in US$ thousands)
Foreign
currency
translation
adjustments
Balance at December 31, 20212022
$
(44,228)(91,423)
Net current-period other comprehensive income (loss):
Loss in other comprehensive income (loss) before reclassifications
 
(32,123)(11,939)
Loss on long-term intra-entity foreign currency transactions
(43,785)(18,608)
Total
 
net current-period other comprehensive gainloss
(75,908)(30,547)
Balance at September 30, 20222023
$
(120,136)(121,970)
13.
15.
 
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
 
as of September 30, 2023 are as follows:
(in US$ thousands)
Amount
Year ending
 
December 31,
20222023
$
3,487
2023
4,8682,115
2024
4,7715,448
2025
4,6435,342
2026
4,5815,213
2027
5,188
Thereafter
23,05626,099
Total
$
45,40649,405
Mineral leases are not in scope of Accounting Standards Codification,
or ASC, 842 and continue to be
be accounted for under the guidance in ASC 932, Extractive
Extractive Activities – Mining.
(b)
Other commitments
As of
September
30, 2023,
purchase
commitments
for
capital expenditures
were $
24.0
million,
all of
which
is
obligated within the next twelve months.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
17
(b)20
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
913 years
.
 
In
 
the
 
U.S.,
 
the
 
Company
 
typically
 
negotiates
 
its
 
rail
 
and
 
coal
 
terminal
 
access
 
on
 
an
 
annual
 
basis.
 
As
 
of
September
 
30,
 
2022,2023,
 
these
 
Australian
 
and
 
U.S.
 
commitments
 
under
 
take-or-pay
 
arrangements
 
totaled
$
1.00.8
 
billion, of which approximately $
101.692.0
 
million is obligated within the next twelve months.
14.
16.
 
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.
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 asAs required
 
by certain
agreements, entered into
by the
 
Company to
provide cash collateral.
The Company had
 
cash collateral in
 
in the form
 
form of
deposits in
 
the amount
of
of $
88.467.9
 
million and
$
81.089.1
 
million as of September 30, 2023 and
 
of SeptemberDecember 31, 2022, respectively, to provide back-
to-back support for bank guarantees, financial payments, other performance obligations, various other operating
agreements and
 
30, 2022
and December
31, 2021,
respectively,
to provide
back-to-back
support
for
bank
guarantees,
financial
payments,
other
performance
contractual obligations
 
variousunder workers
 
other
operating agreementscompensation insurance
 
and contractual.
 
obligations underThese deposits
 
workers compensation
insurance. These
deposits are restricted
restricted and classified as long-term assets in the unaudited Condensed
 
Condensed Consolidated Balance Sheets.
 
In accordance
 
with the
 
terms of
 
the ABLNew
 
ABL Facility,
 
the Company
 
may be
 
required to
 
to cash
collateralize
 
the
New 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,
2023,
no
 
letter of
credit was
outstanding after
the expiration
or termination
date
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, 2022,2023,
 
the Company had
 
outstanding surety
 
bonds of $
31.940.9
 
million and letters
of
credit
 
of
$
16.8
 
million
issued
 
from
our
 
available
bank
 
guarantees
under
the
New
ABL
Facility,
to
 
meet
contractual
obligations under
 
workers
compensation insurance
 
and to
 
secure other obligations
 
obligationsand commitments.
For the
Australian Operations,
the Company
had bank
guarantees outstanding
of $
24.1
million, including
$
4.9
million issued from
the New ABL
Facility,
as at September
30, 2023, primarily
in respect of
certain rail and
 
commitments. Futureport
arrangements.
 
As at September 30, 2023, the Company
in aggregate had total outstanding bank
guarantees provided of $
40.9
million to
secure obligations
and commitments,
including $
21.6
million issued
for the
New ABL
Facility.
Future
regulatory changes
 
relating to
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
 
$
53.553.1
 
million
 
(A$
82.2
 
million)
 
plus
 
unpaid
 
tax
 
interest
 
of
 
$
7.97.8
 
million
(A$
12.1
 
million). The
On
November
23,
2022,
the
 
Company intends
 
to lodgefiled
 
an
objection
 
to
the
 
assessment within
 
the requiredand
 
timeframeis
currently
and beforeawaiting the endoutcome of November 2022.this objection. The outcome of this
 
this objection isremains uncertain.
 
The Company continues to
 
has reviewedmaintain its position and
 
the assessment
received
and based
on legal
and valuation
advice it
has sought,
continues
to
maintain
its
position
and
the
estimated
accrual
of
 
$
28.027.8
 
million
(A$ (A$
43.0
 
million) stamp
duty
payable
on
the
Curragh
acquisition
based
on
legal
and
valuation
advice
obtained.
In
October
2022,
the
Company made a partial payment following filing of the objection reducing the estimated accrual to $
11.2
million
(A$
17.3
million),
which
is
included
 
within
 
“Accrued
Expenses
 
and
 
Other
 
Current
 
Liabilities”
 
in
 
its
 
unaudited
Condensed
Consolidated
Balance
sheet,
 
as
at
September 30, 2022.2023.
 
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.
 
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
 
of operations and/or liquidity of the Company.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
 
FINANCIAL STATEMENTS
 
(Continued)
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
1821
15.
17. Related
‑
Party Transactions
The Energy & Minerals Group
On September 25, 2023, Energy &
 
Subsequent Events
Minerals Group, the Company’s controlling stockholder through its ownership
On Octoberof Coronado Group
 
30, 2022,LLC, including through
 
the Company’scertain of its
 
Board ofaffiliates and managed
 
Directors declaredfunds (the Sellers),
advised the
Company
that
it
had
entered
into
 
a total
 
unfranked specialmembership
 
dividend ofinterest
 
$
225.0
million, or
13.4
cents per
CDI, comprising
$
23.5
million of
the unaccepted
portion of
the offer
to purchase
 
the
Notes madeagreement,
 
inor
 
connectionMIPA,
 
with the
 
ordinarySev.en
 
dividendsGlobal
Investments
 
declared ona.s.,
 
Augustor
 
8, 2022,SGI.
 
plusA
 
an additional
$
201.5
million. CDIs
will be
quoted as
“ex” dividend
on November
18, 2022,
Australia time.
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 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
%copy
 
of
 
the
 
principalMIPA
 
amounthas
not
been
made
available
to
the
Company
or
the
Special
Committee
referred
to
below
as
 
of
 
the
 
Notes,date
 
plusof
 
accruedthis
Quarterly
Report
on
Form
10-Q.
However,
the
Company
understands that, pursuant
to the terms of
the MIPA,
the Sellers agreed to
sell all of their
interests
in Coronado
Group LLC to
a wholly-owned
subsidiary of
SGI. We
refer to the
proposed transaction
as the SGI
Transaction.
The
Company
also
understands
that,
under
the
MIPA,
the
SGI
Transaction
is
subject
to
customary
closing
conditions including regulatory approvals in the U.S. and Australia.
The Board of
Directors has appointed
a special committee
of independent
directors, or the
Special Committee,
to, among other things, assess
the impact and consequences of the
SGI Transaction on the
Company and take
such actions as the Special Committee deems appropriate
in connection with the SGI Transaction.
The Energy and
Minerals Group
has reported that
following the
closing of
the SGI Transaction,
SGI will
be the
direct or indirect owner of
Coronado Group LLC. As of the
date of this Quarterly Report on
Form 10-Q, Coronado
Group LLC
is currently
the direct
owner of
845,061,399
CDIs (representing
a beneficial
interest in
84,506,140
shares
of common
stock,
or
50.4
% of
the Company’s
outstanding
total common
stock)
and the
one
Series
A
Share.
Based on information that the Company is currently aware of,
on completion of the SGI Transaction,
a change of
control as defined under the terms of Notes and New
ABL Facility may occur. Refer to Note 10. “Interest Bearing
Liabilities” for further information.
Under the
Company’s
2018
Equity
Incentive
Plan,
the
change
of control
provisions
may
also
be
triggered
on
completion
of
the
SGI
Transaction,
however
the
Compensation
 
and
 
unpaidNominating
 
interestCommittee
of
the
Board
of
Directors, at its
sole discretion, will determine
how the outstanding awards
under the plan
will be dealt
with, which
may include acceleration of the vesting conditions.
In
addition,
certain
contract
counterparties,
including
Stanwell,
customers,
suppliers
and
third-party
providers
may assert
contractual rights, such
as consent or
termination rights that
may be triggered
by the
change of control
resulting from the consummation of the SGI Transaction.
For a number of
customers and supplier agreements, including
contractor agreements, the completion of
the SGI
Transaction
may
trigger
a
financial
or
suitability
assessment
by
the
counterparty,
which
may
entitle
the
counterparty
 
to
 
butterminate
 
excluding,the
agreement,
request
further
security
or
seek
amendments
to
the
terms
of
 
the
settlement date, pursuant toagreement.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2023
22
18. Material Transactions
Curragh Housing Transaction
On May 8, 2023, the termsCompany entered into an
agreement, the Curragh Housing Agreement, for accommodation
services
and
to
sell
and
leaseback
housing
and
accommodation
assets
included
in
property,
plant
and
equipment.
The
transaction
did
not
satisfy
the
sale
criteria
under
ASC
606
–
Revenues
from
Contracts
with
Customers
and
was
deemed
a
financing
arrangement.
As
a
result,
the
Company
continued
to
recognize
the
underlying property,
plant and
equipment on
its condensed
consolidated balance
sheet. Upon
completion,
the
proceeds
of
$
22.3
million
(A$
34.6
million)
received
from
the
transaction
will
be
recorded
as
“Other
Financial
Liabilities” on the Company’s Condensed Consolidated Balance Sheet. The term of the
 
Indenture.financing arrangement is
ten years
with an effective interest rate of
12.8
%.
In connection
with this
transaction, the Company
will borrow an
additional amount of
$
26.1
million (A$
40.4
million)
which will
be recorded
in “Interest
Bearing Liabilities”
on completion
date. The payment
term of
the arrangement
is
ten
years
with an effective interest rate of
12.8
%.
The Curragh Housing Agreement is subject to conditions
precedent not completed as at September 30, 2023.
In line
with the
Company’s
capital management
strategy,
the above
transactions provide
additional liquidity.
In
addition, the accommodation
services component of the ordinary
 
dividends is not contingent
on acceptance of the offer to purchase the NotesCurragh Housing Agreement
 
by is anticipated to enhance
the Note holders.level of service for our employees at our Curragh
mine.
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
1923
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 Statements
We
 
have
 
reviewed
 
the
 
accompanying
 
condensed
 
consolidated
 
balance sheet
 
of
 
Coronado
 
Global
 
Resources
Inc. (the Company) as
 
of September 30, 2022,2023, the
 
related condensed consolidated statements of operations and
comprehensive
 
income
 
for
 
the
 
three
 
and
 
nine-month
 
periods
 
ended
 
September
 
30,
 
20222023
 
and
 
2021,2022,
 
the
condensed consolidated statements of stockholders’
 
statements of
stockholders’ equity
for the
three-month three-months periods
 
ended March
31,
 
June
30 and September 30, 20222023 and 2021,2022, the condensed consolidated statements of cash flows for the nine-month
periods ended September
 
30, 20222023 and 2021,2022,
 
and the related
 
notes (collectively referred
 
to as the “condensed
consolidated interim financial
 
statements”). Based on our
 
reviews, we are
 
not aware of
 
any material modifications
that should be made to the
 
condensed consolidated interim financial statements for them 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, 2021,2022, the
related consolidated statements
 
of operations
 
and comprehensive
 
income, stockholders'
 
equity and cash
 
flows
for the year then ended, and
 
the related notes (not presented herein), and
 
in our report dated February 22, 2022,21, 2023,
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, 2021,2022,
 
is
fairly stated, in all material
 
respects, in relation to the consolidated balance
 
sheet from which it has been
derived.
Basis for Review Results
 
These financial
 
statements
 
are the
 
responsibility
 
of the
 
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 standards of
 
the PCAOB. 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 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/ Ernst & Young
Brisbane, Australia
November 8, 2022.2023.
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
2024
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 includednotes
 
to those
statements
included elsewhere
in this
 
Quarterly
Report
on Form 10-Q. 10
-Q.
In addition,
 
this
Quarterly Report on Form 10-Q report
should
be read in conjunction
with the Consolidated
Financial Statements
for
year ended December 31,
 
20212022 included
in Coronado Global Resources
 
Resources Inc.’s Annual
Report on Form 10-K
for the year
ended December
 
31, 2021,2022, filed
with
 
with the
U.S.
 
Securities
and
 
Exchange
Commission,
 
or
SEC,
 
and
the
Australian
Securities
Exchange,
or
the
the Australian Securities Exchange, or the ASX, on February 22, 2022.
21, 2023.
Unless otherwise
 
noted,
 
references
 
in this
 
Quarterly
 
Report on
 
Form 10-Q
 
to “we,”
 
“us,”
 
“our,”
 
“Company,”
 
or
“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 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$”
 
are
 
references
 
to
 
Australian
 
dollars,
 
the
 
lawful
 
currency
 
of
 
the
 
Commonwealth
 
of
Australia. Some numerical figures included in this Quarterly Report on
 
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
 
-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, 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 governmentalother
 
and economic responsesindustries,
thereto, as well
 
as
our
plans,
objectives
 
and
expectations
for
our
 
business,
operations,
financial performance and
performance
and
condition.
Forward-looking
statements
may
be
 
identified
by
words
such
 
as “may,
“may,” “could,” “believes,” “estimates,
“could,”
“believes,”
“estimates,”
“expects,”
 
“intends,”
 
“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, or an investment in our securities include,
 
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 Russiaongoing
 
andcivil
Ukraine war, unrest and wars,
as well as
risks related to
government actions with
respect to trade
agreements, treaties or
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;tires, as the result
of inflationary pressures or otherwise;
●
 
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 implemented
 
by
the Queensland
Queensland
state
Government
in
 
Australia
in 2022 introducing
 
additional
higher
tiers
to
the
 
coal royalty rates
 
royalty
rates
applicable to our
Australian Operations;
●
 
severe financialconcerns about the environmental impacts of coal
 
hardship,
bankruptcy,
temporarycombustion and greenhouse gas, or
permanent shut
downs or
operational
challenges, GHG, emissions,
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
leadrelating
 
to
 
reducedmining
 
demandactivities,
 
including
possible
impacts
on global
climate
issues,
which
could
result
in
increased
regulation
of
coal
combustion
and
requirements
to
reduce
GHG
emissions
in
many
jurisdictions, including federal and state government initiatives to control GHG emissions could increase
costs associated with
coal production
and consumption, such
as costs for
additional controls to
reduce
carbon
dioxide
emissions
or
costs
to
purchase
emissions
reduction
credits
to
comply
with
future
emissions
trading
programs,
which
could
significantly
impact
 
our
 
coal,financial
 
increased
difficulty
collecting
receivablescondition
 
and
 
customers
and/or suppliers asserting force majeure or other reasons for notresults
 
performing their contractual obligationsof
operations, affect demand
for our products
or our
securities and reduced
access to us;capital
and insurance;
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
2125
●
the impact of the SGI Transaction, including the impact of the SGI Transaction
on change of control and
related provisions in material agreements;
●
severe financial
hardship,
bankruptcy,
temporary
or permanent
shut downs
or operational
challenges,
due
to
future
public
health
crisis
(such
as
the
COVID-19
pandemic),
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;
●
 
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;coal;
●
 
risks inherent to
 
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;
●
 
risks unique to 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
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 reduced access to capital
and 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;
●
 
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;
●
 
the risk that diversity in interpretation and application of accounting principles in the mining industry may
impact our reported financial results; and
Coronado Global Resources Inc.
Form 10-Q September 30, 2023
26
●
 
other
 
risks
 
and
 
uncertainties
 
detailed
 
herein,
 
including,
 
but
 
not
 
limited
 
to,
 
those
 
discussed
 
in
 
“Risk
Factors,” set forth in Part II, Item 1A of this Quarterly Report
 
on Form 10-Q.
 
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 Annual Report
 
on Form 10-K for
 
the year ended December
 
31, 2021,2022,
filed with the SEC
 
SEC and
ASX on February
 
22, 2022, and21, 2023,
 
and Part
II, Item 1A.
 
“Risk Factors” of
 
of our Quarterly Reports
Report
on Form 10-Q for
 
for the quarterly
periods period ended March
 
31, 2022 and
June 30, 2022,
2023, filed with the
 
SEC and ASX
on May 9, 2022 and
 
AugustMay 8, 2022, respectively,2023, for
 
for a more
complete
discussion
 
of
the
risks
and
uncertainties
mentioned
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
 
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
 
coal
 
products.
 
We
 
own
 
a
 
portfolio
 
of
operating mines and development
 
projects in Queensland, Australia,
 
and in the states of
 
Pennsylvania,Virginia, West Virginia
and West VirginiaPennsylvania in the United States.
 
Our Australian
 
Operations
 
comprise the
 
100%-owned
 
Curragh producing
 
mine complex.
 
Our U.S.
 
Operations
comprise
 
two
 
100%-owned
 
producing
 
mine
 
complexes
 
(Buchanan
 
and
 
Logan),
 
one
 
100%-owned
 
idled
 
mine
complex (Greenbrier) and two development properties (Mon Valley
 
and Russell County). In addition to Met coal,
our Australian
 
Operations sell
 
thermal coal
 
domestically,
 
which is
 
used to
 
generate electricity,
 
to 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
 
export markets and also produce and sell some
 
sell some thermal coal that is
extracted in the process of mining Met coal.
 
ForDuring the third quarter
 
nine monthsof 2023, Coronado navigated
 
ended Septemberthrough some operational headwinds
 
30, 2022,
we produced
11.6
MMt and
sold 12.4
MMtthat were out of
 
coal. Metour
control,
 
coalincluding
adverse
geological
conditions
at
our
U.S.
Operations
impacting
production
rates
yield
and
sales represented 78.4%unexpected downtime for
repairs and maintenance
following a mechanical
failure of one
 
of our totalthe draglines
 
volume of coalat our
Australian
 
sold and 96.2%Operations.
 
of total coalIn
 
revenues for the
nine months
ended September 30, 2022.
Cokingaddition,
 
coal
 
indexproduction
 
pricesrates
 
declinedat
 
duringour
Australian
Operations
were
lower
in
 
the
 
threethird
quarter of
 
months2023 primarily
 
due to
planned focus
on advancing
pre-strip waste
movement and
the completion
of
planned maintenance on the two coal preparation plants. Overall, these events contributed to the lower saleable
production of 0.8 MMt compared
to the three months ended
 
SeptemberJune 30, 2023. Despite the
 
30,lower production, sales
2022,volume
 
compared
 
to
record
quarter
price
and
revenues
for
 
the
 
three
 
months
 
ended
 
June
 
30,
 
2022,2023
increased
as
the
Company
drew
down
on
coal
inventory built in the previous quarter.
Coking
coal
index
prices
improved
in
the
third
quarter
of
2023
compared
to
the
previous
quarter
 
due
 
to
 
slowera
combination
 
globalof
 
growthtight
 
outlook
impactingsupply
 
demand,from
 
higherthe
 
inflation,Australian
coal
market,
which
was
impacted
negatively
by continued
rail
constraints
 
and
 
aplanned
 
continuationmaintenance
 
ofdisruptions
to
operations
and
at
Queensland
ports,
and
heightened
demand from Indian steel mills restocking raw material as
the monsoon season comes to an end. The Australian
Premium Low
Volatile
Hard Coking
Coal, or
AUS PLV
HCC, index
price averaged
$263.6 per
Mt for
the three
months ended September
30, 2023, $20.8
per Mt higher,
compared to the
three months
ended June 30,
2023.
The
AUS PLV
HCC
averaged
$283.5
per
Mt
for
 
the
 
COVID-19nine months
 
lockdownsended
 
in
China.
Prices
largely
stabilized in the
month of September
 
2022, supported by30,
 
supply constraints from2023,
 
key Met coal$109.0
 
markets caused
by wet weather and logistical issues.per
 
Mt
Coronado has
continuedlower, compared 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 September 30, 2022 benefited from higher 2022. The spot price of AUS PLV HCC reached $333
per Mt during the three months ended September 30, 2023.
Our
results
for
the
nine
months
ended
September
30,
2023,
were
adversely
impacted
by
(1)
lower
average
realized Met
 
price per
Mt sold
 
partially offsetcompared
 
by (1) significantto the
 
wet weather eventsnine
 
impacting production atmonths
 
our Australian Operatiended September
 
ons,
(2) inflationary30, 2022,
 
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)(2)
 
additional
 
fleets
mobilizeddeployed to
recover pre-strip
overburden removal,
(3) significant
wet weather
events during
the first
quarter of
2023
and
equipment
breakdown
 
at
 
our
 
Australian
 
Operations
 
toimpacting
 
improveproduction,
 
coal(4)
 
recoveryrail
constraints
 
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
$114.6disruption
 
to
 
$279.4.
Sales volumes were lower for the nine months ended September 30,port
 
2022 compared to the same period in 2021
primarilyoperations
 
dueimpacting
 
totiming
 
lowerof
 
production
caused
by
significant
wet
weather
eventssales
 
at
 
our
 
Australian
 
Operations,
 
and
adverse geological conditions at our U.S. Operations.(5)
 
Operating costs for the nine months ended September 30,adverse
geological
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2023
27
conditions at our U.S. Operations
resulting in slower production rates
and yield in the quarter
ended September
30, 2023, and (6) continued inflationary pressure on labor and
supply costs.
For the
nine months
ended September
30, 2023,
we produced
11.9
MMt and
sold 11.7
MMt of
coal. Met
coal
sales represented 75.8%
of our total
volume of coal
sold and 91.0%
of total coal
revenues for the
nine months
ended September 30, 2023, compared to 78.4% and 96.2%, respectively, for the nine months ended September
30, 2022.
Coal
revenues
of
$2,163.1
million
for
the
nine
months
ended
September
30,
2023,
decreased
by
23.3%
compared to the same period in 2022, driven by average realized Met price per Mt sold, which was $57.9 per Mt
lower than
the
average
realized
price
per
Mt sold
of
$279.4
for
the
nine
months
ended
September
30,
2022.
Additionally,
sales volumes were 0.7 Mt lower
for the nine months ended September
30, 2023, compared to the
same
period
in
2022,
 
23
2022 wereprimarily
 
$571.4 million,driven
 
or 48.3%,by
 
lower
production
as
well
as
required
coal
qualities
to
meet
sales
commitments during the nine months ended September 30,
2023.
Mining costs for the nine months ended September 30, 2023, were $1,210.4 million or $105.5 per Mt sold, $17.9
per Mt sold higher compared
 
to the corresponding period in
 
corresponding period2022, largely driven by elevated
 
in 2021inflation levels, the
impacts
 
primarily drivenof
 
by
inflationary pressures,lower
 
additional contractor fleetsproduction
 
deployedfollowing
significant
weather
events,
equipment
breakdown,
adverse
geological
conditions at
 
our AustralianU.S.
 
Operations to accelerate
 
overburden
removal to increaseand additional
 
coal availability,fleets
 
higher maintenancemobilized
 
cost and higherat our
 
sales related costs,Australian Operations
 
such as Stanwellduring the
nine
rebate, royalties, freight and demurrage costs.months ended September 30, 2023.
Dividends
OnIn September 20,
 
2022, Coronado2023, the
 
Company settled its
 
its previously declared
 
declared dividends totaling
 
$125.7 millionof $8.4
 
million, which
were paid
to
paid to stockholders from available cash.
Liquidity
As of September
 
September 30, 2023,
 
2022, theour net cash
 
Company’s netposition, comprising
 
cash position
was $385.7
million,
consisting of
cash (excluding
restricted cash) of $698.4$336.8
 
million and $312.7cash
(excluding restricted
cash)
less $242.3 million aggregate
principal amount of Notes outstanding.outstanding, was $94.5 million.
 
Coronado
has available
liquidity of $486.8
 
liquidity of
$798.4 million
as of
 
September 30, 2023,
 
2022, comprisingconsisting of cash
 
cash (excluding(excluding restricted cash),
 
restricted cash)unrestricted
short term deposits of $21.6 million and undrawn available borrowings$128.4 million
availability under our New ABL facility.
Safety
For
 
our
 
Australian
 
Operations,
 
the
 
twelve-month
 
rolling
 
average
 
Total
 
Reportable
 
Injury
 
Frequency
 
Rate,
 
or
TRIFR, at
 
September 30,
 
20222023 was
 
4.152.43,
compared to
 
a rate of
 
of 3.07
3.92 at the
 
end of
 
December 31,
 
2021.2022. At
 
outour
U.S. Operations,
 
the twelve
 
-month rolling
 
average Total
 
Reportable Incident
 
Rate, or
 
TRIR, at
 
September
 
30,
20222023 was 1.60, compared
2.06
compared to a rate of 2.51
2.42 at the end
of December 31, 2021.2022.
 
These strong results
year to date
reflect a
record
safety
rate
at our
U.S. Operations
and the
best safety
rate since
July
2018 for
our Australian
Operations. Reportable rates for
our Australian and
and U.S. Operations are
below the relevant industry
 
benchmarks.
 
Our
Logan
mining
complex
at
our
U.S.
Operations,
which
includes
multiple
underground
and
surface
mines,
achieved 1.5 million hours Lost Time
Injury, or
LTI, free during the
quarter.
The
health
and
safety
 
of
our
 
workforce
is
our
 
number
one
priority
 
and Coronado remains
 
focused on theCoronado
continues
implement
 
safety and wellbeing
of all employees and contracting parties.initiatives to improve our safety rates every quarter.
Segment Reporting
In accordance with
 
Accounting Standards Codification,
 
or ASC, 280,
 
Segment Reporting, we
 
have adopted the
following reporting
 
segments: Australia and
 
the United
 
States. In
 
addition, “Other and
 
Corporate” is
 
not a
 
reporting
segment but is disclosed for the purposes of reconciliation
 
to our consolidated financial statements.
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, on a quarterly 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
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
Coronado Global Resources Inc.
Form 10-Q September 30, 2023
28
volumes and average realized Met price per
 
Mt sold, which we define as Met coal
 
revenues divided by Met coal
sales volume; (v) average
 
segment mining costs
 
per Mt sold,
 
which we define
 
as mining costs
 
divided by sales
volumes (excluding non-produced coal) for the respective segment; (vi) average segment operating costs
 
non-produced coal)
for the
respective
segment; and
(vi) average
segment operating
costs
per Mt
sold, which we define as segment operating costs
divided by sales volumes for the respective segment.segment; and (vii)
net cash, which we define
as cash and cash equivalents
(excluding restricted cash)
less outstanding aggregate
principal amount of the Notes.
Coal
 
revenues
 
are
 
shown
 
on
 
our
 
statement
 
of
 
operations
 
and
 
comprehensive
 
income
 
exclusive
 
of
 
other
revenues.
 
Generally,
 
export
 
sale contracts
 
for our
 
Australian
 
Operations
 
require
 
us to
 
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
 
in evaluating our operating performance.
Non-GAAP Financial Measures; Other
Measures
The
 
following
 
discussion
 
of
 
our
 
results
 
includes
 
references
 
to
 
and
 
analysis
 
of
 
Adjusted
 
EBITDA,
 
Segment
Adjusted EBITDA and mining
 
costs, which are financial
 
measures not recognized in
 
accordance with 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.
Non-GAAP financial measures are intended to provide additional information only and do not have any standard
meaning prescribed by U.S. GAAP.
 
Coronado Global Resources Inc.
These measures should not be considered
 
Form 10-Q September 30, 2022in isolation or as a substitute for
measures of performance prepared in accordance with
 
24U.S. GAAP.
Adjusted EBITDA, a non-GAAP measure, is defined as earnings before interest, tax, depreciation, depletion and
amortization
 
and
 
other
 
foreign
 
exchange
 
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
 
to serve
as an
 
alternative to
U.S. GAAP measures
 
measures of performance
 
and may notincluding total
 
revenues, total
costs and expenses,
net income or
cash flows from
operating activities as
those terms are
defined by U.S.
GAAP.
Adjusted EBITDA may
therefore not be
comparable to
similarly titled measures presented
 
presented by other
companies.
A reconciliation of
 
of Adjusted EBITDA to its
 
its most
directly
comparable measure
under U.S. GAAP is
included below.
 
Segment
 
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 attributableattributabl
e
 
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.
Coronado Global Resources Inc.
Form 10-Q September 30, 2023
29
Three Months Ended September 30, 20222023 Compared
 
to Three Months Ended September 30, 20212022
Summary
The financial and operational highlights for the three months
 
ended September 30, 20222023 include:
●
 
Net income for
 
the three months endedloss
 
September 30, 2022 of
 
$150.6 million increased by
$68.6 million,
from a net
income of $82.021.1
 
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
 
factthree
 
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 September
30,
2023,
was
$171.7
million
lower
compared to $144.0
 
per Mt sold
for the same period in 2021.
●
net income
 
Sales volumeof $150.6
 
totaled 4.1
MMtmillion for
 
the three
 
months ended
 
September 30, 2022.
 
2022, comparedThis decrease
was
driven
by
lower
coal
revenues
due
 
to 4.6
 
MMtlower
average
realized
Met
coal
price
per
Mt
sold,
higher
for mining
and
operating
costs,
partially
offset
by
tax
benefit
of
$18.2
million
in
the
 
third
quarter
of
2023
compared to an income tax expense of $51.4 million for
the same period in 2022.
●
Average realized Met price
per Mt sold of $207.4 for
the three months
ended September
 
30, 2021.2023, was
$45.6 per Mt
 
The lower compared to
 
sales volumesaverage realized price of
 
were largely$253.0 per Mt
 
driven bysold for the
 
thesame period in
2022.
Although coking coal
index prices improved
during the third
quarter of
2023 due to
tight supply,
coking
coal prices were significantly lower than the same period in 2022 when supply in global
met coal market
was readjusting from the impact of unseasonal wet weather on production performancethe Russia and Ukraine
 
at our Australian Operations.war.
●
 
Adjusted EBITDA forDespite lower saleable production,
 
sales volume of 4.1 MMt
for the three months
 
ended September 30,
2023, increased 0.1 MMt as compared to
 
the same period in 2022, of $223.6as the Company
 
million, an increasedrew down on coal
inventory built in the second quarter of 2023.
 
of $75.9
million compared●
 
to $147.7Adjusted
 
million EBITDA
for
 
the
three
 
months
 
ended
September
 
30, 2021,
 
driven by2023,
 
higherof
$3.4
million,
a
decrease
of
$220.2
million,
compared to $223.6 million for the three months ended September 30, 2022, largely due
to lower coal sales revenues partially offset byand higher
operating costs.
●
 
As
 
of
 
September
 
30,
 
2022,2023,
 
the
 
Company
 
had
 
total
 
available
 
liquidity
 
of
 
$798.4486.8
 
million,
 
consisting
 
of
$698.4 336.8
million
cash
 
(excluding
restricted
 
cash) and $100.0,
 
$21.6
million
of
unrestricted
short-term
deposits
and
$128.4 million of availability
under the New 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, 20222023
 
2530
Three months ended September 30,
20222023
20212022
Change
%
(in US$ thousands)
Revenues:
Coal revenues
$
707,303
$
863,709
$
563,287(156,406)
$
300,422
53.3%(18.1%)
Other revenues
10,527
10,948
10,304(421)
644
6.3%(3.8%)
Total
 
revenues
717,830
874,657
573,591(156,827)
301,066
52.5%(17.9%)
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
501,471
385,504
309,513115,967
75,991
24.6%30.1%
Depreciation, depletion and amortization
34,749
37,508
38,461(2,759)
(953)
(2.5%(7.4%)
Freight expenses
71,746
63,026
58,0438,720
4,983
8.6%13.8%
Stanwell rebate
37,100
54,575
12,274(17,475)
42,301
344.6%(32.0%)
Other royalties
92,700
137,331
39,099(44,631)
98,232
251.2%(32.5%)
Selling, general, and administrative expenses
 
12,221
10,405
8,0441,816
2,361
29.4%17.5%
Total
 
costs and expenses
749,987
688,349
465,43461,638
222,915
47.9%9.0%
Other income (expenses):
Interest expense, net
(14,496)
(17,220)
(18,251)2,724
1,031
(5.6%(15.8%)
Loss on debt extinguishment
(1,385)
—
(1,385)
100.0%
Decrease (increase) in provision for
discounting and
credit losses
536
12
2,430524
(2,418)
(99.5%)4,366.7%
Other, net
8,189
32,898
(1,252)(24,709)
34,150
(2,727.6%(75.1%)
Total
 
other (expenses) income, (expenses), net
(7,156)
15,690
(17,073)(22,846)
32,763
(191.9%(145.6%)
Net (loss) income before tax
(39,313)
201,998
91,084(241,311)
110,914
121.8%(119.5%)
Income tax expensebenefit (expense)
18,230
(51,423)
(9,096)69,653
(42,327)
465.3%(135.5%)
Net (loss) income attributable to Coronado Global
Resources, Inc.
$
(21,083)
$
150,575
$
81,988(171,658)
$
68,587
83.7%(114.0%)
Coal Revenues
Coal
revenues
were
 
$863.7
707.3 million
for
 
the
three
months
 
ended
September
30,
 
2022,2023, a
 
andecrease of $156.4
 
increasemillion,
compared to $863.7 million
 
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 September 30, 2022, compared to 3.7 MMt in 2021,2022.
 
primarilyLower Met coal price
indices, due
to above average rainfall impacting production at our Australianvaried
 
Operations.market conditions
compared to
the third
quarter of
2022, saw
the average
realized Met
coal price
for
the three months
ended September 30,
2023,
reduced by $45.6
to $207.4 per
Mt sold compared
to $253.0 per
Mt sold for the same period in 2022.
 
Cost of Coal Revenues (Exclusive of Items Shown
 
Separately Below)
Cost of coal revenues comprise 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 $501.5 million for the
three months ended September
30, 2023, $116.0
million,
or 30.1% higher,
compared to $385.5 million
for the three months ended
 
ended September 30, 2022.
 
2022, an increase
Cost of coal
 
of
$76.0 million, or 24.6%, compared to $309.5 millionrevenues for our
 
U.S. Operations for the
three months ended September 30, 2021.
 
30, 2023, was $38.8
million
higher
compared
to
the
three
months
September
30,
2022,
largely
due
draw
down
of
coal
stocks
from
the
previous quarter,
as sales
volume exceeded
saleable production
in the
2023 period,
combined with
continued
impact of
inflation on
labor,
contractor and
other supply
costs. Our
 
Australian
Operations
 
contributed to
 
$50.477.2
million
 
toof
 
the
 
increase
 
in
total
 
cost
 
of
 
coal
 
revenues,
 
primarily
driven
 
by
additional
 
contractoradditional
 
fleets
 
mobilized
 
toduring
 
accelerate2023
to
advance
pre-strip
 
overburden
 
removal,
 
toimpact
 
increaseof
high
inflation
on
mining
costs
and
drawn
of
 
coal
 
availability,inventory,
resulting from
 
and
inflationarysales volume
 
pressure,exceeding saleable
 
includingproduction in
 
higherthe 2023
 
fuelperiod. Increase
 
and
labor
in costs
 
were partially
offset
by
a
favorable
 
average foreign exchange
 
foreign
exchange rate
on translation
 
of the
 
Australian Operations
for the
three months
ended September
30, 2022
of
A$/US$: 0.68
compared to
0.74 for
 
the samethree months
ended September 30, 2023, of A$/US$: 0.66 compared
 
to 0.68 for the same period in 2022.
 
2021. Cost
Depreciation, Depletion and Amortization
Depreciation, depletion
and amortization
was $34.7
million for
the three
months ended
September 30,
2023, a
decrease
 
of coal
 
revenues $2.8
million,
compared
to
$37.5
million
for
 
our U.Sthe
 
Operations for
the three
 
months
 
ended
September
 
30,
 
2022, 2022.
The
decrease
was
 
$25.6associated
 
millionwith
 
higherassets
 
comparedfully
 
to thedepreciated,
 
three monthslower
 
ended
September 30,depreciation
 
2021,rates
 
largely duefollowing
 
to theannual
 
impact ofuseful
 
inflation on
labor and
supply costs
and increased
purchased
coal transactions to meet sales commitments.
life
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
2631
review at
the
beginning
of
2023 and
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, 2022.
Freight Expenses
Freight expenses
relate to
costs associated
with rail
and port
providers, including
take-or-pay commitments
at
our
Australian
Operations,
and
demurrage
costs.
Freight
 
expenses
 
includetotaled
 
$71.7
million
for the
three
months
ended September
30, 2023,
an increase of
$8.7 million,
compared to
$63.0 million
for the three
months ended
September 30, 2022. Our
Australian Operations’ freight costs
 
associatedcontributed $11.8
 
withmillion to the increase
 
take-or-payprimarily
driven by penalties incurred due to underutilization
 
commitmentsof rail capacity.
 
forThis was partially offset by freight
 
railcost at our
U.S.
 
andOperations,
 
portwhich
 
providersdecreased
 
and
demurrage costs.by
 
Freight expenses$3.1
 
totaled $63.0million,
driven
by
lower
coal
sales
under
Free
on
Board,
or
FOB,
terms, compared to the three months ended September
30, 2022.
Stanwell Rebate
The Stanwell
rebate
was
$37.1
 
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 September 30, 2021 and
higher demurrage costs,
offset by a $2.1 million
decrease in freight cost for our
Australian
Operations
due
to
lower
sales
volume
and2023,
 
a
favorable
foreign
exchange
rate
on
translation
of
the
Australian Operations.
Stanwell Rebate
The Stanwell
rebate was
$54.6 million
for the
three months
ended September
30, 2022,
an increase decrease
 
of $42.3$17.5
million, compared
 
to $12.3$54.6
 
million for
 
the three
 
months ended
 
September 30,
 
2021.2022. The
 
increasedecrease was
 
largely
driven by lower
 
higher realized
export
reference coal
 
pricing
for the
 
prior twelvetwelve-month period applicable
 
-monthto three months
 
periodended
September 30, 2023,
 
used to
calculate
 
the
rebate partially offset by favorable average foreigncompared
 
to the same
period in 2022,
and favorable foreign
exchange rate on translation of theour Australian
Operations.
 
Other Royalties
Other royalties were $137.3
$92.7 million in the three months ended September 30, 2022, an
increase of $98.2 million,
as compared to
$39.1 million for
 
the three months
 
ended September 30,
 
2021. Higher royalties2023, a decrease
 
were a productof $44.6 million,
ofcompared to
 
higher$137.3 million
 
coalfor the
 
revenuesthree months
 
comparedended September
30, 2022.
The decrease
in Other
royalties
was
due
 
to
 
lower
coal revenues,
largely
driven
by
lower
average
realized
prices,
for the
three
months
ended
September 30, 2023,
compared to the
 
same
period
in
 
2021.2022, combined with
 
Effectivefavorable foreign exchange
 
Julyrate on
translation of our Australian Operations.
Interest Expense, net
Interest
 
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,expense,
 
net
 
was
 
$32.914.5
 
million
 
in
 
the
 
three
 
months
 
ended
 
September
 
30,
 
2022,2023,
 
ana
 
increasedecrease
 
of
 
$34.2
million2.7
million compared
 
to net
loss
of $1.3$17.2
 
million for
 
for the three
months
ended September
30, 2022.
The decrease
was due
to
lower
Notes
outstanding
during
the
 
three
 
months
 
ended
 
September
 
30,
 
2021. The2023,
 
increasefollowing
 
primarily
relatesredemptions
 
to
foreign
exchange
gains
recognized
in
the
translation
of
short-term
intra-entity
balances
in
certainsince
entities within the group that are denominated in currencies
other than their respective functional currencies.September 30, 2022.
 
Income Tax (Expense) BenefitOther, net
Income tax expense of $51.4 million for theOther,
 
three months ended September 30, 2022 increased by $42.3 million,
compared tonet
 
a tax
expense ofwas
 
$9.1 8.2
million
 
for
the
 
three
 
months
 
ended
September
30,
2023,
a
decrease
of
$24.7
million
compared to $32.9 million for the three months ended September
 
30, 2021,2022. The decrease was largely driven by
lower exchange
 
driven bylosses on translation
 
higher
income before tax in the 2022 period.
The incomeof short-term
 
inter-entity balances
in certain
entities within
the group
that
are denominated in currencies other than their respective
functional currencies.
Income Tax Benefit (Expense)
Income tax expense
benefit of
$18.2 million
 
for the
 
three months
 
ended September
 
30, 20222023,
 
is basedvariance of
 
on an$69.7 million,
compared to the income tax expense of $51.4 million for the three
 
annual effective
tax
rate of 24.8%.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
27
Nine months ended September 30, 2022, Compared
to Nine months ended September 30, 2021driven by
Summary
The financial and operational highlights for the nine months
ended September 30, 2022 include:
●
Net income of
$712.5 million for
the nine months
ended September 30,
2022 increased by
$726.6 million,
from a net loss of
$14.1 million forbefore tax in the nine months
ended September 30, 2021.
The increase was driven
by revenues, partially offset by higher costs and higher
income tax expense.
●
Supply
concerns
in
key
Met
coal
markets,
including
the
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 of
$279.4 for the
nine months
ended September
30, 2022,
143.8% higher
compared to
$114.6
per Mt
sold for
the nine
months ended September 30, 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 nine months
ended September
30, 2022 was
$1,072.9 million,
an increase of
$899.5 million, from Adjusted EBITDA of $173.4 million for the nine months ended September 30, 2021.
This increase was driven by higher coal revenues,
partially offset by higher operating costs.
●
Cash provided by
operating activities was $945.4
million for the nine
months ended September 30,
2022,
an increase of $774.3 million compared to $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.
2023 period.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
2832
Nine months ended September 30, 2023 compared to
Nine months ended September 30, 2022
Summary
The financial and operational highlights for the nine months ended
September 30, 2023 include:
●
Net
income
of
$178.1
million
for
the
nine
months
ended
September
30,
2023,
decreased
by
$534.4
million, from $712.5 million
for the nine months
ended September 30,
2022. The decrease
was a result
of lower revenues and higher operating costs partially
offset by lower income tax expense.
●
Sales volume totaled
11.7
MMt for the
nine months ended
September 30, 2023,
or 0.7 MMt
lower than
the nine
months ended
September 30,
2022. The
lower sales
volumes were
primarily driven
by the
impact
of wet
weather
and equipment
breakdowns
on production
performance,
coal availability,
and required
coal qualities to meet
sales commitments at our
Australian Operations combined with adverse
geological
conditions caused by a rock intrusion at our U.S. Operations
.
●
Average realized
Met price
of $221.5
per Mt
sold for
the nine
months ended
September 30,
2023 was
20.7% lower compared to $279.4
per Mt sold for
the nine months ended September
30, 2022, as the
Met
coal price index
rebalanced from record
highs achieved in
2022, particularly in
the first half
of 2022, as
steel demand
weakened.
During the third
quarter of 2023,
the Met coal
prices trended upwards,
however,
the Company was not able
to take full advantage of
this due to the three
-month lag in price
realizations
for certain sales contracts at our Australian Operation.
●
Adjusted EBITDA of
$355.7 million for the
nine months ended
September 30, 2023,
was $717.3 million
lower compared to $1,072.9 million for
the nine months ended September 30,
2022. This decrease was
a result of lower coal revenues and higher operating costs.
●
As
of
September
30,
2023,
the
Company
had
net
cash
of
$94.5
million,
consisting
of
a
closing
cash
balance
(excluding
restricted
cash)
of
$336.8
million
and
$242.3
million
aggregate
principal
amount
outstanding of the Notes.
Nine months ended September 30,
20222023
20212022
Change
%
(in US$ thousands)
Revenues:
Coal revenues
$
2,163,093
$
2,821,334
$
1,344,253(658,241)
$
1,477,081
109.9%(23.3%)
Other revenues
47,977
33,152
29,70514,825
3,447
11.6%44.7%
Total
 
revenues
2,211,070
2,854,486
1,373,958(643,416)
1,480,528
107.8%(22.5%)
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
1,262,907
1,140,467
889,771122,440
250,696
28.2%10.7%
Depreciation, depletion and amortization
113,052
126,901
132,754(13,849)
(5,853)
(4.4%(10.9%)
Freight expenses
192,542
189,316
166,0903,226
23,226
14.0%1.7%
Stanwell rebate
105,357
124,160
43,169(18,803)
80,991
187.6%(15.1%)
Other royalties
268,606
299,711
83,219(31,105)
216,492
260.1%(10.4%)
Selling, general, and administrative expenses
 
29,976
28,657
21,2501,319
7,407
34.9%
Restructuring costs
—
2,300
(2,300)
(100.0%)4.6%
Total
 
costs and expenses
1,972,440
1,909,212
1,338,55363,228
570,659
42.6%3.3%
Other income (expenses):
Interest expense, net
(43,341)
(52,034)
(49,982)8,693
(2,052)
4.1%(16.7%)
Loss on debt extinguishment
(1,385)
—
(5,744)(1,385)
5,744100.0%
(100.0%)
(Increase) decreaseDecrease (increase) in provision for discounting
and credit losses
4,255
(572)
8,0744,827
(8,646)
(107.1%(843.9%)
Other, net
17,704
55,191
(3,610)(37,487)
58,801
(1,628.8%(67.9%)
Total
 
other (expenses) income, (expenses), net
(22,767)
2,585
(51,262)(25,352)
53,847
(105.0%(980.7%)
Net income (loss) before tax
215,863
947,859
(15,857)(731,996)
963,716
(6,077.5%(77.2%)
Income tax (expense) benefitexpense
(37,775)
(235,391)
1,788197,616
(237,179)
(13,265.0%(84.0%)
Net income (loss)
178,088
712,468
(14,069)(534,380)
726,537
(5,164.1%)
Less: Net loss attributable to noncontrolling
—
(2)
2
(100.0%(75.0%)
Net income (loss) attributable to Coronado Global
Resources, Inc.
$
178,088
$
712,468
$
(14,067)(534,380)
$(75.0%)
726,535
(5,164.8%)
Coronado Global Resources Inc.
Form 10-Q September 30, 2023
33
Coal Revenues
Coal
revenues
 
were $2,821.3
$2,163.1
 
million
for
 
the
nine
 
months
ended
 
September
30,
 
2022, an2023,
 
increase a
decrease
of
 
$1,477.1658.2
million, compared to $1,344.3
$2,821.3 million for the nine
months ended September 30,
2021. This increase was
driven
by favorable market conditions and higher coal indices, which
resulted in a higher average realized Met price per
Mt sold for the nine months ended September 30, 2022. The decrease was largely
driven by
lower average
realized Met
price of
$221.5 per
Mt sold
compared to
$279.4 per
Mt sold
for the
nine
months ended September 30, 2022, of $279.4,combined with 0.7 MMt lower sales volume compared to $114.the
 
6same period in
2022.
 
per Mt sold
Other Revenues
Other revenues were $48.0 million for the samenine months ended September 30, 2023, an increase of $14.8 million,
period in 2021.compared to $33.2 million for the nine months ended September 30, 2022.
This increase was primarily driven by
a termination fee revenue from a coal sales contract cancelled
at our U.S. Operations.
Cost of Coal Revenues (Exclusive of Items Shown
 
Separately Below)
Total
 
cost of coal revenues was $1,140.5$1,262.9 million for the nine months
 
ended September 30, 2022,2023, an increase of
$250.7122.4 million,
or 28.2%,
compared to
$889.8 $1,140.5 million
for the
nine months
ended September
30, 2021.
Cost of
coal revenues for
our U.S. Operations
in the nine
 
months ended September 30, 2022.
Cost of coal revenues for
our Australian Operations in
the nine months ended September
 
30, 2022 increased
by $117.1 million,2023, were $85.6
asmillion higher compared
 
to the same
 
same period in 2022,
 
in 2021,primarily driven
 
driven by additional
fleets mobilized
during 2023
to advance pre-strip overburden removal,
 
the continued impact
of inflation
 
on labor,
 
contractor and other supply
costs, higher
 
costs, adverse
geologicalmaintenance
 
conditionsexpenses following
a dragline
propel failure,
partially offset
by a
significant
build in
coal
inventories
from
saleable
production
exceeding
sales
volume
 
in
 
certainperiod compared
 
minesto
a draw
down
in
the
same period
in 2022,
lower purchase
coal and favorable
foreign exchange
rate on
translation of
our Australian
Operations
for
the
nine
months
ended
September
30,
2023,
 
of
 
ourA$/US$:
 
U.S.0.67
 
Operationscompared
 
resultingto
0.71
for the
same
period
 
in
 
unplanned
maintenance
costs,
and
increased
purchased
coal
transactions
to
meet
sales
commitments.2022.
 
Cost
 
of
 
coal
 
revenues
 
for
 
our
 
Australian
Operations inU.S.
 
the nineOperations
 
months endedwere
 
September 30,
2022 increased
by $133.6$36.8
 
million
 
compared tohigher
for
 
the same
period in 2021, due to additional fleets mobilized to accelerate overburden removal, inflationary pressure
 
on fuelnine
months
pricingended
September
30,
2023,
compared
to the
same
period
in 2022,
also impacted
by
an elevated
inflationary
environment
 
and
 
laborhigher
consumables
and
maintenance
 
costs
 
andfollowing
 
increaseda
 
purchasedrock
 
coalintrusion
 
transactionsin
 
tothe
 
meetquarter
 
sales
commitments.
Higher
costsended
were partially offset by a 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 2021.2023.
Depreciation, Depletion and Amortization
Depreciation, depletion
 
and amortization
 
was $126.9$113.1
 
million for the
 
nine months
 
ended September 30,
 
2022,2023, a
decrease of
 
$5.913.8 million,
 
as compared
 
to $132.8$126.9
 
million for
 
the nine
 
months ended
 
September 30,
 
30, 2021.
2022. The
decrease
 
was
 
associated
 
with
 
assets
fully
depreciated,
lower
depreciation
rates
following
annual
useful
life
review at
the
beginning
of
2023 and
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
292022.
Freight Expenses
Freight
expenses
 
totaled $189.3
million for
the nine
months ended
September 30,
2022, an
increase of
 
$23.2
million,
compared
to
$166.1192.5
 
million
 
for
 
the
 
nine
 
months
 
ended
 
September
 
30,
 
2021.2023,
 
Ouran
 
U.S.increase
of
$3.2
million, compared
to $189.3 million
for the nine
months ended
September 30,
2022. Our Australian
 
Operations
contributed
 
to
$28.94.4
 
million
 
ofto
 
the
 
increase
 
due
 
to
 
certainhigher
 
contractsrail
 
forcosts
 
whichprimarily
 
wedriven
 
arrangeby
 
andpenalties
 
payincurred
 
for
transportation to port that
did not existdue
 
to the same
underutilization of
 
extent in the ninerail capacities
 
months ended September 30,in our
 
2021, partially
offset by the benefits of lower average foreignAustralian Operations,
 
exchange rate on translation of thepartially offset
by lower
sales volumes
reducing
freight costs at our Australian Operations.Operations and U.S. Operations
.
 
Stanwell Rebate
The Stanwell
 
rebate was
 
$124.2105.4 million
 
for the
 
nine months
 
ended September
 
30, 2022,2023,
 
an increasea decrease
 
of $81.0$18.8
million, as compared to
 
$43.2to $124.2 million
for the nine
 
nine months ended September
 
September 30, 2021.
2022. The increasedecrease
 
was largelydue
driven bylower
 
higher realized
 
exportreference
 
reference coal
 
pricing
 
for
the
 
prior twelve
 
-monthtwelve-month
 
period
 
used applicable
to
 
calculatethe
 
the
rebate, partially offset bynine
 
months
ended
September 30, 2023, used
to calculate the rebate
compared to the same
period in 2022 and
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 $268.6 million for the nine months ended September 30, 2021. Higher royalties were2023, a product of
higher average realized export
pricing and the adverse impactdecrease
 
of the new royalty regime$31.1 million,
as
 
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
$3.6299.7
 
million
 
for
 
the
 
nine
 
months
 
ended
 
September
 
30,
 
2021.2022.
 
TheOur
 
increaseAustralian
 
largelyOperations
relatescontributed
 
to
 
foreign$27.7
 
exchangemillion
 
gainsof the
 
recognizeddecrease
 
indue
to
lower
average
realized
export
pricing
for
 
the
 
nine
months
ended September 30, 2023,
compared to the same period in 2022 and favorable average foreign exchange rate
on translation
 
of the
 
short-termAustralian Operations,
 
inter-entitypartially offset
 
balancesby the
adverse
impact
that the
new royalty
regime,
which was
effective from
July 1,
2022, had
 
in the
 
certain
entities within the group that are denominated in currenciesfirst half
 
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 2023 compared
 
to athe
 
$1.8first half
of 2022
under the
old regime. The new royalty regime resulted in $58.7
 
million tax
benefit for
the nine
months ended
September
30, 2021,
primarily driven
by
higher income before taxadditional royalty costs in the 20222023 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, 2023
34
Interest Expense, net
Interest expense, net was
$43.3 million in
the nine months ended
September 30, 2023, a
decrease of $8.7
million
compared to $52.0 million
for the nine months
ended September 30, 2022.
The decrease was due
to lower Notes
outstanding following redemptions since September 30,
2022.
Decrease (increase) in Provision for Discounting and
Credit Losses
Decrease in provision for
discounting and credit
losses of $4.3 million
in the nine months
ended September 30,
2023, a favorable
movement of $4.8
million compared to
increase in provision
for discounting and
credit losses
of $0.6 million for
the nine months ended September
30, 2022. The lower
provision was primarily driven by
timely
collection of certain overdue trade receivables
at December 31, 2022 during the
nine months ended September
30, 2023.
Other, net
Other, net was
$17.7 million in
the nine
months ended September
30, 2023,
a decrease of
$37.5 million
compared
to the
net gain
of $55.2
million
for the
nine months
ended
September 30,
2022. The
decrease
was
driven
by
lower foreign exchange gains on 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
Income tax expense
of $37.8 million
for the nine
months ended September
30, 2023 decreased
by $197.6 million,
compared
to
$235.4
million
tax
expense
for
the
nine
months
ended
September
30,
2022,
 
primarily
driven
by
lower net income before tax in the 2023 period.
The income tax expense for the nine
months ended September 30, 2023 is based
on an annual effective tax rate
of 18.5%, which includes a discrete benefit of $2.1 million
relating to prior year for Australia.
Supplemental Segment Financial Data
Three months ended September 30, 20222023 compared to
 
three months ended September 30, 20212022
Australia
Three months ended September 30,
20222023
20212022
Change
%
(in US$ thousands)
Sales volume (MMt)
2.6
2.4
2.80.2
(0.4)
(12.9)%7.1%
Total
 
revenues ($)
455,774
546,485
342,372(90,711)
204,113
59.6%(16.6)%
Coal revenues ($)
446,815
537,256
332,558(90,441)
204,698
61.6%(16.8)%
Average realized price per Mt sold ($/Mt)
172.3
221.8
119.7(49.5)
102.1
85.3%(22.3)%
Met sales volume (MMt)
1.8
1.7
2.00.1
(0.3)
(16.2)%7.2%
Met coal revenues ($)
419,032
518,010
306,033(98,978)
211,977
69.3%(19.1)%
Average realized Met price per Mt sold ($/Mt)
236.2
313.0
154.9(76.8)
158.1
102.1%(24.5)%
Mining costs ($)
310,727
241,674
180,83769,053
60,837
33.6%28.6%
Mining cost per Mt sold ($/Mt)
121.7
99.8
67.421.9
32.4
48.1%21.9%
Operating costs ($)
487,864
458,405
275,78229,459
182,623
66.2%6.4%
Operating costs per Mt sold ($/Mt)
188.2
189.3
99.2(1.1)
90.1
90.8%(0.6)%
Segment Adjusted EBITDA ($)
 
(32,353)
88,035
67,383(120,388)
20,652
30.6%(136.8)%
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
MMtrevenues
 
for
 
theour
 
threeAustralian
 
months
ended
September
30,
2021, largely
due to
above average
rainfall
at the
Curragh mine
complex
impacting coal
mining
activities
and
production.
Operating
costs
increased
by
$182.6
million,
or
66.2%,Operations,
 
for
 
the
 
three
 
months
 
ended
 
September
 
30,
 
2022,2023,
were
$446.8
million, a decrease of
$90.4 million, or 16.8%, compared
to $537.3 million for
the three months ended September
30, 2022. This decrease was driven by lower average
realized Met coal price per Mt sold of $236.2 for the three
months ended September
30, 2023, compared to
$313.0 per Mt sold
for the same period
in 2022, when supply
in global
met coal
market was
readjusting from
the impact
of the
Russia and
Ukraine war.
The lower
realized
pricing was partially offset by higher sales volume of 0.2 MMt compared to the same
period in 2022. Production,
and sales,
performance in
 
the three
 
months ended
 
September 30,
 
30, 2021.
The increase
2022, was
 
largely
drivenimpacted by
 
higher miningunprecedented wet
weather events at our Australian Operations.
Operating costs Stanwell rebate (mainly due towere $487.9
 
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 weremillion, an increase of
 
$60.8
29.5 million or 48.1%
6.4%, higherfor the
three months ended September
30, 2023, compared to $458.4 million for the three
months ended September 30, 2022 compared to the same period in 2021,
primarily due
to inflationary
pressures
and additional
contractor
fleets mobilized
in the
first half
of 2022
at our
Australian
Operations,
partially
offset
by
favorable
average
foreign
exchange
on
translation
of
our
Australian
Operations to US$. Increased costs combined with lower sales volumes resulted in higher Mining and Operating
cost per Mt sold of $32.4 and $90.1, respectively,
compared to the same period in 2021.
Segment Adjusted EBITDA of $88.0 million for the three months ended September 30, 2022 increased by $20.6
million compared
to
Adjusted
EBITDA
of
$67.4 million
for the
three
months
ended
September
30,
2021. This
2022. The increase was primarily driven by higher coal revenues
partially offset by higher operating costs.largely
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
3135
United States
Three months ended September 30,
2022
2021
Change
%
(in US$ thousands)
Sales volume (MMt)
1.7
1.8
(0.1)
(5.7)%
Totaldriven
 
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 ($/Mt)
191.6
131.6
60.0
45.6%
Mining costs ($)
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 ($/Mt)
107.7
79.9
27.8
34.8%
Segment Adjusted EBITDA ($)by
 
145,890
88,441
57,449
65.0%
Coal revenues increased by $95.8 million,additional
 
or 41.5%, to $326.5 million forfleets
 
the three months ended September 30,mobilized
in
2022 compared
2023
 
to $230.7
 
million foradvance
 
the threepre-strip
 
monthsoverburden
 
ended Septemberremoval,
 
30, 2021.continued
 
Thisinflationary
pressures
 
increase wason contractor
 
largely
driven byand supply
 
acosts, higher
 
average realizedfreight expense
 
Met priceand
 
per Mtincreased
 
third-party
coal purchases
to
meet sales commitments. This was partially offset by favorable average foreign exchange rates on translation of
the Australian
Operations. Mining
cost per
Mt sold for
 
the three
 
months ended
 
September 30,
 
2022 of2023, increased
$191.6, by $21.9 to $121.7,
compared to $131.6the same
period in 2022, driven
by higher mining costs, partially
offset by higher
sales volumes.
Segment Adjusted EBITDA
decreased by $120.4
million, or 136.8%,
to an EBITDA
loss of $32.4
million for the
three months ended September 30, 2023, compared to $88.0 million
for the three months ended September 30,
2022, largely driven by lower coal revenues and higher
operating costs.
United States
Three months ended September 30,
2023
2022
Change
%
(in US$ thousands)
Sales volume (MMt)
1.5
1.7
(0.2)
(11.3)%
Total
revenues ($)
262,056
328,172
(66,116)
(20.1)%
Coal revenues ($)
260,488
326,453
(65,965)
(20.2)%
Average realized price per Mt sold ($/Mt)
172.6
193.1
(20.5)
(10.6)%
Met sales volume (MMt)
1.4
1.6
(0.2)
(15.9)%
Met coal revenues ($)
232,870
309,609
(76,739)
(24.8)%
Average realized Met price per Mt sold ($/Mt)
170.2
191.6
(21.4)
(11.2)%
Mining costs ($)
175,883
132,380
43,503
32.9%
Mining cost per Mt sold ($/Mt)
119.3
81.4
37.9
46.6%
Operating costs ($)
215,153
182,031
33,122
18.2%
Operating costs per Mt sold ($/Mt)
142.6
107.0
35.6
33.3%
Segment Adjusted EBITDA ($)
47,630
145,890
(98,260)
(67.4)%
Coal revenues
decreased by
$66.0 million,
or 20.2%,
to $260.5
million for
the three
months ended
September
30,
2023,
compared
to
$326.5
million
for
the
three
months
ended
September
30,
2022.
This
decrease
was
primarily
a result
of
lower
average
realized
Met
price
per
Mt sold
for
the
three
months
ended
September
30,
2023, which was
$20.5 per Mt
sold below for
the same
period in 2021,
2022, due to continued strong U.S.-sourced
 
lower coal
demand, particularly into China and Europe due to continuing impacts
 
on global supply dynamics causedprice indices
albeit at
the back of a less volatile coal market. Coal revenues were also impacted by thelower sales volume of 0.2 MMt due
Russia and Ukraine conflict. Additionally,to adverse geological conditions impacting production
 
coal fromat our U.S. Operations continued to experience strong demand
from China as import restrictions on Australian coal remain
in place.Buchanan mine complex.
Operating costs
 
increased by
 
$38.933.1 million,
 
or 27.2%18.2%,
 
to $182.0$215.2 million
 
for the three
 
months ended
 
September
30, 2022,2023, compared
 
to operating
 
costs of
 
$143.1182.0 million
 
for the
 
three months
 
ended September
 
30, 2021.2022.
 
The
increase
was due to higher purchased coal to meet sales commitments and largely
driven by
higher mining costs of $23.0 million,
as a result of higher production costs due
to the continued
impact
 
of inflation
on supplies
and
labor
costs
and
a
higher
drawdown
of
coal
inventories,
resulting
from
lower
sales
production
volumes
outweighing
lower sales
volume when
comparing the
third quarter
of supplies2023
to the
third quarter
of 2022.
Sales volume
exceeding
saleable production in the period. The increase in mining costs was partially offset by lower freight expense from
lower sales on FOB terms and labor costs.lower royalties as a result
of lower coal revenues.
Segment Adjusted EBITDA of
 
$145.9 million for the
three months ended September 30,
2022 increased by $57.5
million compared to
$88.447.6 million for
 
the three months ended
 
September 30, 2023, decreased
by $98.3
million compared
to $145.9
million for
the three
months ended
September 30,
 
2021,2022, primarily
 
primarily driven by
 
by a higherlower
average realized Met price per Mt sold and higher operating
 
partially offset by higher operating costs.
Corporate and Other Adjusted EBITDA
The following table presents a summary of the components
 
of Corporate and Other Adjusted EBITDA:
Three months ended September 30,
20222023
20212022
Change
%
(in US$ thousands)
Selling, general, and administrative expenses
$
12,221
$
10,405
$
8,0421,816
$
2,363
29.4%17.5%
Other, net
(322)
(56)
42
(98)(266)
n/m
Total
 
Corporate and Other Adjusted EBITDA
 
$
11,899
$
10,349
$
8,0841,550
$
2,265
28.0%15.0%
n/m – Not meaningful for comparison.
 
Corporate and
other costs
of $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 September
30, 2021. The increase in
selling, general, and
administrative
expenses
was
primarily
driven
by
corporate
activities
partially
resuming
to
pre-COVID-19
pandemic levels and timing of certain corporate costs.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2023
36
Corporate and
other costs
of $11.9
million for
the three
months ended
September 30,
2023, were
$1.6 million
higher
compared
to
$10.3
million
for
the
three
months
ended
September
30,
2022,
 
32due
to
timing
of
certain
corporate costs.
Mining
and
operating
 
costs
for
the
 
three
months
 
ended
September
 
30, 2022
2023
compared
 
to three
 
monthsthree
months ended September 30, 20212022
A reconciliation of
 
segment costs and
 
expenses, segment operating
 
costs, and segment
 
mining costs is
 
shown
below:
Three months ended September 30, 2023
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and
expenses
$
501,021
$
236,478
$
12,488
$
749,987
Less: Selling, general and administrative
expense
—
—
(12,221)
(12,221)
Less: Depreciation, depletion and amortization
(13,157)
(21,325)
(267)
(34,749)
Total operating costs
487,864
215,153
—
703,017
Less: Other royalties
(80,726)
(11,974)
—
(92,700)
Less: Stanwell rebate
(37,100)
—
—
(37,100)
Less: Freight expenses
(49,712)
(22,034)
—
(71,746)
Less: Other non-mining costs
(9,599)
(5,262)
—
(14,861)
Total mining costs
310,727
175,883
—
486,610
Sales Volume excluding non-produced
coal
(MMt)
2.6
1.5
—
4.0
Mining cost per Mt sold ($/Mt)
121.7
119.3
—
120.8
Three months ended September 30, 2022
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and
 
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
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
241,674
132,380
—
374,054
Sales Volume excluding non-produced
 
coal
(MMt)
2.4
1.6
—
4.0
Mining cost per Mt sold ($/Mt)
99.8
81.4
—
92.4
ThreeAverage realized Met price per
Mt sold for the three months
ended September 30, 2023
compared to
three months ended September 30, 2021
(in US$ 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
three months ended September
30, 2022 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,
20222023
20212022
Change
%
(in US$ thousands)
Met sales volume (MMt)
3.1
3.3
3.7(0.2)
(0.4)
(11.9)(4.3)%
Met coal revenues ($)
651,902
827,619
534,594(175,717)
293,025
54.8%(21.2)%
Average realized Met price per Mt sold ($/Mt)
207.4
253.0
144.0(45.6)
109.0(18.0)%
75.7%
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
3337
Nine months ended September 30, 20222023 compared to
 
Nine months ended September 30, 20212022
Australia
Nine months ended September 30,
20222023
20212022
Change
%
(in US$ thousands)
Sales volume (MMt)
7.2
7.5
8.5(0.3)
(1.0)
(11.6)(3.8)%
Total
 
revenues ($)
1,286,242
1,730,172
832,098(443,930)
898,074
107.9%(25.7)%
Coal revenues ($)
1,260,741
1,701,901
804,757(441,160)
897,144
111.5%(25.9)%
Average realized price per Mt sold ($/Mt)
174.0
225.9
94.5(51.9)
131.4
139.2%(23.0)%
Met sales volume (MMt)
5.0
6.35.0
(1.3)—
(20.5)%0.5%
Met coal revenues ($)
1,195,413
1,615,364
734,143(419,951)
881,221
120.0%(26.0)%
Average realized Met price per Mt sold ($/Mt)
238.5
323.9
117.0(85.4)
206.9
176.8%(26.4)%
Mining costs ($)
772,561
648,965
535,568123,596
113,397
21.2%19.0%
Mining cost per Mt sold ($/Mt)
107.8
89.3
65.718.5
23.6
36.0%20.7%
Operating costs ($)
1,249,490
1,206,022
801,83743,468
404,185
50.4%3.6%
Operating costs per Mt sold ($/Mt)
172.5
160.1
94.112.4
66.0
70.1%7.7%
Segment Adjusted EBITDA ($)
 
35,580
523,319
30,445(487,739)
492,874
1,618.9%(93.2)%
Coal
 
revenues
 
for
 
our
 
Australian
 
Operations
 
for
 
the
 
nine
 
months
 
ended
 
September
 
30,
 
20222023,
 
were
 
$1,701.91,260.7
million,
 
ana
 
increasedecrease
 
of
 
$897.1441.2
 
million,
 
or
 
111.5%25.9%,
 
compared
 
to
 
$804.81,701.9
 
million
 
for
 
the
 
nine
 
months
 
ended
September 30, 2022. This decrease was driven by lower average
 
2021. Thisrealized Met price per Mt sold of $238.5,
 
increase was$85.4
dueper Mt lower compared to
a higher
average realized
Met price
$323.9 per Mt
 
sold offor the nine months ended September
 
$323.9, an30, 2022, as Met coal price
increaseindex
rebalanced
from
record
highs
achieved
in
2022,
particularly
in
the
first
half
 
of
 
$206.92022,
 
per Mtas
 
sold, comparedsteel
 
demand
weakened. Coal
revenues were
further impacted
by significant
wet weather
events and
equipment breakdown
and their associated recovery time resulting in
sales volumes 0.3 MMt lower compared to
 
$117.0the nine months ended
September 30, 2022.
 
per Mt
Operating costs increased by $43.5 million, or 3.6%, for the nine
 
soldmonths ended September 30, 2023, compared
duringto
 
the
 
samenine
 
periodmonths
 
inended
 
2021. TheSeptember
 
higher
realized30,
 
price
during
the
period
was2022,
 
primarily
 
driven
 
by
 
disruptionhigher
mining
costs
and
freight
expense.
Mining costs were $123.6 million higher for the nine
months ended September 30, 2023, due to additional
fleets
mobilized in 2023
to advance
pre-strip overburden
removal, the
continued impact
of inflation on
contractor and
supply costs,
and costs
associated
with equipment
breakdown. This
increase was
partially offset
by favorable
average
foreign
exchange
on
translation
of
our
Australian
Operations
and
lower
Stanwell
rebate
and
other
royalties
expense.
Increase
 
in
 
supplycosts
 
dynamicsand
 
causedlower
 
bysales
 
thevolumes
 
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 MMtsaw
 
was 1.0 MMt lower compared to 8.5 MMt forMining
 
the nine
months ended September 30,and
 
2021, mainly driven
by significant wet
weather events experienced which
impacted
coal availability to during the 2022 period.
Operating
 
costs
 
increasedper
 
Mt
sold
increased by $18.5 and $12.4, respectively,
compared to the same period in 2022.
For the
nine months
ended September
30, 2023,
Adjusted EBITDA
of $35.6
million, were
$487.7 million
lower
compared to $523.3 million for the nine months ended September 30, 2022. This decrease was a result of lower
coal revenues
and higher mining and operating costs.
United States
Nine months ended September 30,
2023
2022
Change
%
(in US$ thousands)
Sales volume (MMt)
4.5
4.9
(0.4)
(8.1)%
Total
revenues ($)
924,828
1,124,314
(199,486)
(17.7)%
Coal revenues ($)
902,352
1,119,433
(217,081)
(19.4)%
Average realized price per Mt sold ($/Mt)
201.2
230.5
(29.3)
(12.6)%
Met sales volume (MMt)
3.9
4.7
(0.8)
(18.4)%
Met coal revenues ($)
773,184
1,098,186
(325,002)
(29.6)%
Average realized Met price per Mt sold ($/Mt)
199.5
232.4
(32.9)
(14.0)%
Mining costs ($)
437,860
396,562
41,298
10.4%
Mining cost per Mt sold ($/Mt)
101.6
85.0
16.6
19.8%
Operating costs ($)
579,922
547,632
32,290
5.9%
Operating costs per Mt sold ($/Mt)
129.3
112.8
16.5
14.8%
Segment Adjusted EBITDA ($)
349,160
578,183
(229,023)
(39.6)%
Coal revenues
decreased by
 
$404.2
217.1 million,
 
or 19.4%,
 
50.4%,to $902.4 million
for the nine
months ended
September
30,
2023,
compared
to
$1,119.4
million
 
for
 
the
 
nine
 
months
 
ended
 
September
 
30,
 
2022,
compared2022.
 
toThis
 
the
nine
months
ended
September
30,
2021.
The
increasedecrease
 
was
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
$113.4
million, or 48.1%, higher for
the nine months ended September
30, 2022 compared to the
same period in 2021,
primarily
due
to
inflationary
pressures
and
additional
contract
fleets
mobilized
during
first
half
of
2022
at
our
Australian
Operations,
partially
offset
by
favorable
average
foreign
exchange
on
translation
of
our
Australian
Operations to US$. Increased costs combined with lower sales volumes resulted in higher Mining and Operating
costs per Mt sold of $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,
compared
to
Adjusted EBITDA of
$30.4 million for the
nine 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, 20222023
 
3438
United States
Nine months ended September 30,
2022
2021
Change
%
(in US$ thousands)
Sales volume (MMt)
4.9
4.9
—
(1.8)%
Totalprimarily due to lower average realized
 
revenues ($)
1,124,314
541,860
582,454
107.5%
Coal revenues ($)
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 ($/Mt)
112.8
76.9
35.9
46.7%
Segment Adjusted EBITDA ($)for
 
578,183
164,404
413,779
251.7%
Coal revenues increased by $579.9 million, or 107.5%, to
$1,119.4 million for the nine months ended September
30, 2023 of
$199.5 compared to $232.4
per Mt sold for
the same period in
2022, product mix
skewed towards lower
quality
Met coal
and lower
sales volume
driven by
lower production
which was
impacted by
adverse geological
conditions
and wet weather events in the 2023 period.
Operating costs of
$580.0 million were
$32.3 million higher
compared to $547.6 million
for the nine
months ended
September
30,
2023.
Mining
costs
contributed
$41.3
million
of
the
increase
driven
by
continued
inflationary
impact on
labor and
supply
costs
and unplanned
maintenance
costs. Mining
and Operating
costs per
Mt sold
increased by $16.6
and $16.5, respectively, due to
lower sales volume
and higher costs
in the
nine months ended
September 30, 2023.
Adjusted EBITDA of $349.2
million decreased by $229.0
million, or 39.6%, for
the nine months ended
September
30,
 
2022,
as2023,
 
compared
 
to
 
$539.5578.2
 
million
 
for
 
the
 
nine
 
months
 
ended
 
September
 
30,
 
2021.2022.
 
This
 
increasedecrease
 
was
mainly driven by a higher average realized Met price per Mt sold for the nine
months ended September 30, 2022
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 increased
by $167.2 million,
or 44.0%, to
$547.6
million for the
nine months ended
September
30, 2022,
compared to
operating costs
of $380.4
million for
the nine
months ended
September 30,
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 Adjusted
EBITDA of $164.4
million for the
nine months ended
September 30, 2021. This
increase
was primarily driven by higher average realized Met pricelower coal revenues
 
per Mt sold,
partially offset byand higher mining and operating costs.
Corporate and Other Adjusted EBITDA
The following table presents a summary of the components
 
of Corporate and Other Adjusted EBITDA:
Nine months ended September 30,
20222023
20212022
Change
%
(in US$ thousands)
Selling, general, and administrative expenses
$
29,976
$
28,657
$
21,2441,319
$
7,413
34.9%4.6%
Other, net
(888)
(78)
164(810)
(242)
(147.6)%n/m
Total
 
Corporate and Other Adjusted EBITDA
 
$
29,088
$
28,579
$
21,408509
$1.8%
7,171
33.5%n/m – Not meaningful for comparison.
Corporate and
other costs
 
increased $7.2 million toof $29.1
 
$28.6 million for the
nine months ended September
30, 2022,
as compared to
$21.4 million for
 
the nine
months
 
ended September
 
30, 2021. The2023,
 
increase in selling,were $0.5
 
general,million
andhigher
 
administrative
expenses
was
primarily
driven
by
corporate
activities
partially
resumingcompared
 
to
 
pre-COVID-19$28.6
million
for
the
nine
months
ended
September
30,
2022,
due
to
timing
of
certain
pandemic levels and timing of certain corporate costs.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
3539
Mining and
operating costs
 
for the Nine
 
Nine months ended September 30,
 
ended September2023 compared to Nine
 
30, 2022
compared to
Nine months
ended September 30, 20212022
A reconciliation of
 
segment costs and
 
expenses, segment operating
 
costs, and segment
 
mining costs is
 
shown
below:
Nine months ended September 30, 2023
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and
expenses
$
1,297,492
$
644,168
$
30,780
$
1,972,440
Less: Selling, general and administrative
expense
—
—
(29,976)
(29,976)
Less: Depreciation, depletion and amortization
(48,002)
(64,246)
(804)
(113,052)
Total operating costs
1,249,490
579,922
—
1,829,412
Less: Other royalties
(231,443)
(37,163)
—
(268,606)
Less: Stanwell rebate
(105,357)
—
—
(105,357)
Less: Freight expenses
(120,747)
(71,795)
—
(192,542)
Less: Other non-mining costs
(19,382)
(33,104)
—
(52,486)
Total mining costs
772,561
437,860
—
1,210,421
Sales Volume excluding non-produced
coal
(MMt)
7.2
4.3
—
11.5
Mining cost per Mt sold ($/Mt)
107.8
101.6
—
105.5
Nine months ended September 30, 2022
(in US$ 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
expense
—
—
(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
(MMt)
7.3
4.7
—
11.9
Mining cost per Mt sold ($/Mt)
89.3
85.0
—
87.6
Average realized Met
price per Mt
sold for the
Nine months ended
September 30, 2021
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and2023
 
expensescompared to
$
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 the Company’s average realized
 
Met price per Mt sold is shown below:
Nine months ended September 30,
20222023
20212022
Change
%
(in US$ thousands)
Met sales volume (MMt)
8.9
9.7
11.1(0.8)
(1.4)
(12.2)(8.7)%
Met coal revenues ($)
1,968,597
2,713,550
1,268,160(744,953)
1,445,390
114.0%(27.5)%
Average realized Met price per Mt sold ($/Mt)
221.5
279.4
114.6(57.9)
164.8(20.7)%
143.8%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
3640
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA
Three months ended September
30,
Nine months ended September
30,
(in US$ thousands)
2022
20212023
2022
20212023
2022
Reconciliation to Adjusted EBITDA:
Net (loss) income (loss)
$
(21,083)
$
150,575
$
81,988178,088
$
712,468
$
(14,069)
Add: Depreciation, depletion and amortization
amortization34,749
37,508
38,461113,052
126,901
132,754
Add: Interest expense (net of interest income)
 
14,496
17,220
18,25143,341
52,034
49,982
Add: Other foreign exchange (gains) lossesgains
(7,859)
(31,917)
2,487(17,265)
(55,064)
4,376
Add: Loss on extinguishment of debt
—1,385
—
—1,385
5,744—
Add: Income tax expense (benefit)
(18,230)
51,423
9,09637,775
235,391
(1,788)
Add: Restructuring costs
—
—
—
2,300
Add: (Gains) lossesLosses on idled assets held for
sale456
(1,221)
(113)3,531
621
2,216
Add: (Decrease) increase in provision for
discounting and credit losses
(536)
(12)
(2,430)(4,255)
572
(8,074)
Adjusted EBITDA
 
$
3,378
$
223,576
$
147,740355,652
$
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 availability under the ABLour debt
 
Facility.facilities.
 
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
 
payment
 
of
dividends. Based
on our
 
outlook for
the next
 
twelve months,
which is
 
subject to
completion of
the SGI
Transaction,
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
customers,
volatility
in
coal
prices,
 
ongoing
 
interruptionscivil
unrest
 
and
 
uncertaintieswars,
 
surroundingwe
 
China’sbelieve
 
import
restrictions, such as tradeexpected
 
barriers imposed by Chinacash
 
on Australian sourced coalgenerated
from
operations together with available borrowing facilities
 
and the uncertainty of
impacts
from the
Russia and
Ukraine war
on the
global supply
chain, we
believe expected cash
generated from
operations
together with
available borrowing
facilities and
other strategic
and financial
 
initiatives, will be sufficient
to meet
 
be sufficientthe needs
 
to meet
the needs of our existing
 
existing operations,
capital expenditure,
 
service our
debt obligations
 
and, if
declared, payment
payment of dividends.
Under
the
Senior
Secured
Notes
Indenture,
upon
a
change
of
control,
we
are
required
to
make
an
offer
to
purchase the Notes from the holders at a
price of 101% of the principal amount thereof,
plus accrued and unpaid
interest.
Under the New ABL Facility,
a change of control constitutes a Review Event pursuant to which the Lenders may
request to meet
and consult with
us to agree
a strategy to
address the relevant
Review Event including
but not
limited to a restructure
of the terms of the
New ABL Facility to
the satisfaction of the
Lenders. Refer to Note
10.
“Interest Bearing Liabilities” for further information.
Our ability to generate sufficient cash
 
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,
 
document, and Part
I, Item 1A. “Risk
Factors” of our
 
Annual Report on
Form 10-K for the
 
for the year ended
ended December 31,
 
2021,2022, filed
 
with the SEC
 
SEC and
ASX on
 
February 22,21, 2023
 
2022,, and Part
 
Part II, Item
 
Item 1A.
“Risk “Risk Factors”
of
of our Quarterly
Reports Report
 
on Form
10-Q for
 
the quarterly period ended March
 
periods ended31, 2023, filed with
 
March 31,
2022 and
June 30,
2022,
filed
with the SEC and ASX
on May 9, 2022 and August 8,
2022, respectively.
Liquidity as of September 30, 2022 and December 31,
2021 was as follows:
(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
$
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. 2023.
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
3741
Liquidity as of September 30, 2023 and December 31,
2022 was as follows:
(in US$ thousands)
September 30,
2023
December 31,
2022
Cash, excluding restricted cash
$
336,845
$
334,378
Short term deposits
21,618
—
Availability under the Predecessor ABL Facility
—
100,000
Availability under the New ABL Facility
(1)
128,382
—
Total
$
486,845
$
434,378
(1)
The New ABL Facility
provides for up to
$150.0 million in borrowings,
including a $100.0 million
sublimit for the issuance
of letters of credit,
of which $21.6 million
has been issued, and
$70.0 million sublimit as
a revolving credit facility.
The letter
of credit sublimit contributes to our liquidity as the Company has the ability
to replace cash collateral, provided in the form of
restricted deposits, with letters of credit allowing the release of such restricted deposits to cash and cash equivalents.
Our total indebtedness as of September 30, 20222023 and
 
December 31, 20212022 consisted of the following:
(in US$ thousands)
September 30,
20222023
December 31,
20212022
Current installments of interest bearing liabilities
$
312,741242,326
$
315,000242,326
Current installments of other financial liabilities and finance
 
lease obligations
3,8904,040
8,6344,585
Other financial liabilities and finance lease obligations, excluding
current
installments
9,6395,748
14,0318,336
Total
 
$
326,270252,114
$
337,665255,247
Liquidity
As
 
of
 
September
 
30,
 
2022,2023,
 
available
 
liquidity
 
was
 
$798.4486.8 million,
 
comprisingcomprised
 
of
 
cash
 
and
 
cash
 
equivalents
(excluding restricted cash) of $698.4$336.8
million, unrestricted short term deposits
of $21.6 million and $128.4 million
of available borrowings under our New ABL Facility.
As
of
December
31,
2022,
available
liquidity
was
$434.4
million,
comprised
of
cash
and
cash
equivalents
(excluding restricted cash) of $334.4 million and $100.0
 
million of available borrowings under our ABL Facility.
As of
December 31,
2021, available liquidity
was $537.7 million,
comprising cash and
cash equivalents (excluding
restricted cash) of $437.7 million and $100.0 million of
available 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-
term interest-bearing deposit accounts or used to repay
 
interest bearing liabilities.
Senior Secured Notes
As of
 
September
 
30,
 
2022,2023, the
 
outstanding
 
principal
 
amount of
 
our Notes
 
was
 
$312.7242.3 million
 
.
 
Interest on
 
the
Notes is payable semi-annually in arrears on May 15 and November 15 of each year.
 
The Notes mature on May
15, 2026 and are senior secured obligations of the Company.
The Notes are guaranteed
 
on a senior secured
 
basis by the Company
 
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 first-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 ofsome or
 
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
all of the
 
Notes plusat the
 
accrued
redemption prices and
 
unpaidon the terms
 
interest, beginningspecified in the
Indenture. In addition, the Company may,
 
on
May 15,
2025. The
Company
may also
redeem
some or all of the Notes
at any time and from
time to time, priorseek to retire or purchase outstanding
 
May 15, 2023 at adebt through
open-market purchases,
 
price equal to 100%privately negotiated
 
of the
principal amount thereoftransactions or
 
plus a “make-whole”otherwise. Such
 
premium, plus accrued
and unpaid interest,repurchases,
 
if any, to, but
 
excluding,will be
upon
such terms and at such prices as the redemption date. The Company may also redeem a portiondetermine, and will depend on prevailing market conditions,
liquidity requirements, contractual restrictions and other
 
of the Notes under certain circumstances prior to
May 15, 2023.
For the
nine months ended
September 30, 2022,
in connection with
the dividends paid
in the
period, the Company
offered to purchase 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 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.factors.
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
3842
ABL Facility
The ABLBased on information that
 
Facility,
dated May
12, 2021,
is for
an aggregate
multi-currency
lender commitmentwe are currently aware
 
of, upon completion of
 
to $100.0
million, includingthe SGI Transaction, a $30.0 million
sublimit for the issuance“Change
 
of letters of credit andControl”
as defined under
 
$5.0 millionthe terms of
the Notes may
occur. Refer to Part
I, Item
I. Financial Statements,
Note 10. “Interest
Bearing Liabilities” for swingline
loans,
at any
time outstanding,
subject to
borrowing
base availability.
The ABL
Facility
will mature
on May
12, 2024.
Borrowings under the ABL
Facility bear interest at
a rate equal to
a BBSY rate plus
an applicable margin. As
at
September 30, 2022, no amounts were drawn and no letters
of credit were outstanding under the ABL Facility.further information.
 
As of September 30, 2022,2023, we were in compliance with
 
all applicable covenants under the Indenture.
New ABL Facility
On May 8, 2023, we entered into
a senior secured asset-based revolving credit agreement in
an initial aggregate
amount of $150.0 million, or the New ABL Facility.
On August 3, 2023, the Company
satisfied all conditions precedent
under the New ABL Facility,
at which time it
became effective and replaced the predecessor
ABL Facility.
The New
ABL Facility
matures in
August 2026
and provides
for up
to $150.0
million in
borrowings, including
a
$100.0 million sublimit for the issuance
of letters of credit and $70.0
million sublimit as a revolving
credit facility.
Availability under the New
ABL Facility is
limited to an
eligible borrowing base, determined
by applying customary
advance rates to eligible accounts receivable and inventory.
Borrowings under the New
ABL Facility bear interest
at a rate per
annum equal to applicable
rate of 2.80% and
BBSY,
for loans denominated in A$, or SOFR, for loans
denominated in US$, at the Borrower’s election.
Subject
to
customary
grace
periods
and
notice
requirements,
the
New
ABL
Facility
also
contains
customary
events of default.
Based on information
that we are
currently aware of,
on completion of
the SGI Transaction,
a “Change of
Control”
as defined under the terms of the
New ABL Facility may occur. Refer to Part I, Item I.
Financial Statements, Note
10. “Interest Bearing Liabilities” for further information.
As
at
September
30,
2023,
letter
of
credit
sublimit
had
been
partially
used
to
issue
$21.6
million
of
bank
guarantees
on
behalf
of
the
Company
and
no
amounts
were drawn
and
no
letters
of credit
were
outstanding
under
the
revolving
credit
sublimit
of
New
ABL
Facility.
As
at
September
30,
2023,
the
Company
was
in
compliance with all applicable covenants under the New
ABL Facility.
Predecessor ABL Facility
On August 3, 2023, the Company satisfied all conditions precedent under
the New ABL Facility at which time the
New ABL Facility replaced
the predecessor ABL Facility.
As a result of the
early termination of
the predecessor
ABL Facility,
the Company
recorded a
loss on
debt extinguishment
of $1.4
million in
its unaudited
Condensed
Consolidated Statement of Operations and Comprehensive Income for each of
the three and nine months ended
September 30, 2023.
Bank Guarantees 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. As
 
of September 30, 2022,
As required by certain agreements,
 
we had outstanding bank guaranteescash collateral in the form
of deposits in the amount of $67.9
million
ofand
 
$43.889.1
 
million
 
as
of
September
30,
2023,
and
December
31,
2022,
respectively,
to
 
secureprovide
back-to-back
support
for
bank
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 unaudited Condensed
Consolidated Balance Sheets.
In accordance with the terms of the ABL Facility, we 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,
2023,
no
letter
of
credit
was
outstanding
after
the
expiration
or
termination
date
 
and
 
commitments.
The
Company
providedno
 
cash
in
the
form
of
deposits, as collateral against these bank guarantees.was required.
For the U.S. Operations in
 
in order to
provide the required
 
financial assurance, we generally
 
generally use surety
bonds for
post-mining
 
reclamation.
 
We
 
can
 
also
 
use
 
bank
 
letters
 
of
 
credit
 
to
 
collateralize
 
certain
 
obligations.
 
As
 
of
September 30, 2022,2023,
 
we had outstanding
 
surety bonds of
 
$31.940.9 million and
 
letters of credit
 
of $16.8 million
 
issued
from our available
bank guarantees
under the New
ABL Facility,
 
to meet contractual
obligations under
workers
compensation insurance and
to secure other obligations
 
obligations and commitments.
 
Future regulatory changes relating
Coronado Global Resources Inc.
Form 10-Q September 30, 2023
43
For the Australian
Operations, we had bank
guarantees outstanding of $24.1
million,
including $4.9 million issued
from the New ABL
Facility,
as at September 30,
2023, primarily in respect
of certain rail and
port arrangements
of the Company.
As
at
September
30,
2023,
we
had
total
outstanding
bank
guarantees
provided
of
$40.9
million
 
to
secure
obligations and
commitments. Future
regulatory changes
relating to
these obligations could
 
could result
in increased
obligations, additional costs or additional
collateral requirements.
Dividend
On February 21,
 
February2023, our Board
 
24,of Directors declared
 
2022,a bi-annual fully
franked fixed ordinary
dividend of $8.4
million, or 0.5
cents per CDI.
On April
5, 2023, the
Company paid $8.3
million, net of
$0.1 million foreign
exchange
gain on payment of dividends to certain CDI holders
who elected to be paid in Australian dollars.
On
August
7,
2023,
 
our
 
Board
 
of
 
Directors
 
declared
 
ana
 
unfrankedbi-annual
fully
franked
fixed
 
ordinary
 
dividend
 
of
 
9.0
cents
per
CDI$8.4
(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 0.5 cents per
CDI, reflecting CDI. On September 19, 2023,
 
the unacceptedCompany paid $8.3 million, net of $0.1 million foreign
portionexchange loss on payment of
the offer
dividends 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
percertain CDI
 
comprising
$100.6 million
of the
unaccepted portion
of the
offer
holders who elected to purchase
the
Notes madebe paid 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 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 offer to purchase the Notes
by the Note holders.Australian dollars.
Capital Requirements
Our main uses of cash have historically been the
 
funding of our operations, working capital, capital expenditure,
the payment of
 
interest and dividends.
 
We intend
 
to use cash
 
to fund debt
 
service payments
 
on our Notes,
 
the
New ABL Facility and our
 
other indebtedness, to fund operating
 
operating activities, working capital,
capital expenditures, partial
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 threenine
 
months ended
 
September 30,
 
20222023 and
 
2021,2022, as
reported in the accompanying consolidated financial statements:
Cash Flow
Nine months ended September 30,
(in US$ thousands)
20222023
20212022
Net cash provided by operating activities
$
945,384223,681
$
171,115945,384
Net cash used in investing activities
(150,670)(183,028)
(145,782)(150,670)
Net cash (used in) provided byused in financing activities
(483,854)(23,005)
122,623(483,854)
Net change in cash and cash equivalents
 
310,86017,648
147,956310,860
Effect of exchange rate changes on cash and restricted
 
cash
 
(50,144)(15,180)
2,287(50,144)
Cash and restricted cash at beginning of period
 
437,931334,629
45,736437,931
Cash and restricted cash at end of period
 
$
698,647337,097
$
195,979698,647
Operating activities
Net cash
 
provided by
 
by operating
activities
 
was $223.7
 
$945.4 million for
 
for the nine
 
nine months
ended
 
September 30,
 
30, 2022
,2023,
compared to $171.1$945.4 million
 
for the nine months
 
months ended September 30, 2021.
 
2022. The increasedecrease in
cash from operating
activities was driven
 
by higherthe lower
coal revenues, duehigher
operating costs and
income tax paid
during the period,
including $107.6 million relating to increase in the average realized
Met coal pricing partially offset by higher operating
costs.2022 taxable income.
Investing activities
Net
 
cash
 
used
 
in
 
investing
 
activities
 
was
 
$150.7183.0
 
million
for
 
the
 
nine
 
months
 
ended
 
September
 
30,
 
2022,2023,
compared to $145.8$150.7 million for the nine months ended September 30, 2021.2022. Cash spent on capital expenditures
for the
 
nine months ended
 
ended September
30, 20222023
 
was $141.9$182.4
 
million, of
 
which $61.0$
44.3 million
 
was related
to the
Australian
Operations, $80.5 million
related to the
U.S. Operations and
the remaining $0.4
million for other
and corporate.
During the nine months ended September 30, 2022, a net of $6.3 million of additional deposits were provided as
collateral
for
our
U.S.
workers
compensation
obligations
and
$2.4
million
of
additional
security
deposit
was
provided by our Australian Operations to satisfy contractual requirementsand $ 138.1 million was related
 
into the normal course of business.U.S. Operations.
Financing activities
Net cash used
 
in financing activities was
$23.0 million
for the nine
months ended September 30,
2023, compared
to cash
used in
financing
activities
of $483.9
million for
the nine
months ended
September 30,
2022. The
net
cash
 
used
 
in
 
financing
 
activities
 
was
$483.9
million
for
 
the
 
nine
 
months
 
ended
 
September
 
30,
 
2022,2023
largely
compared
related
to
 
cash provideddividends
payment of $16.8
 
by financing
activitiesmillion, payment of
 
$122.6 milliondeferred debt issuance
 
costs for the
 
nine monthsNew ABL Facility
 
ended Septemberof $3.4 million
 
30,and
2021. Therepayment of borrowings and other financial liabilities
of $2.8 million.
Coronado Global Resources Inc.
Form 10-Q September 30, 2023
44
Included in net cash
used in financing activities
 
for the nine months ended September
 
ended September 30, 2022, included
dividendwere dividends
paymentspaid of $473.9 net of a $2.8 million foreign exchange gain on
settlement of dividends for shareholders who
elected to be paid in Australian dollars and the remainder
related to repayment of borrowings.borrowings and
 
Included in
the net
cash used
in financing
activities for
the nine
months ended
September 30,
2021, were
net
proceeds from
borrowingsother financial liabilities of
$396.4 million,
repayment of
borrowings of
$371.4 million
and net
proceeds from
the stock issuance of $97.7 $10.0 million.
Contractual Obligations
There were no
 
material changes
 
to our contractual
 
obligations from
 
the information
 
previously provided
 
in Item
7.
 
“Management’s
 
Discussion
 
and
 
Analysis
 
of
 
Financial
 
Conditions
 
and
 
Results
 
of
 
Operations”
 
of
 
our
 
Annual
Report on Form 10-K for the year ended December 31, 2021,2022, filed with the SEC and
 
ASX on February 22, 2022.21, 2023.
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 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” of our Annual
 
Report on Form 10-K for
 
the year ended December
 
31, 2021,2022,
filed with the SEC and ASX on February 22, 2022.21, 2023.
Newly Adopted Accounting Standards and Accounting
 
Standards Not Yet Implemented
See
 
Note
 
2.
 
(a)
 
“Newly
 
Adopted
 
Accounting
 
Standards”
 
to
 
our
 
unaudited
 
condensed
 
consolidated
 
financial
statements for
 
a discussion
 
of newly
 
adopted accounting
 
standards. As
 
of September
 
30, 2022,2023,
 
there were
 
no
accounting standards not yet implemented.
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
4145
ITEM 3.
 
QUANTITATIVE
 
AND QUALITATIVE
 
DISCLOSURES ABOUT MARKET RISK
Our activities
 
expose us
 
to
 
a variety
 
of financial
 
risks, such
 
as commodity
 
price risk,
 
interest rate
 
risk, foreign
currency risk, liquidity risk and credit
 
risk. The 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
 
for
 
speculative
 
purposes
 
is
strictly prohibited by the Treasury Risk Management 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 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.
The
expectation
of
future
prices
for
coal
depends
upon
many
factors
beyond
our
control.
Met
coal
has
been
volatile commodity over the past ten
years. In the second quarter of
2022, seaborne prices reached record levels
with
both
the
Australian
and
U.S.
Met
coal
price
indices
exceeding
$600
per
Mt,
largely
as
result
of
supply
concerns in key Met coal markets and continued trade flow disruptions caused by geopolitical tensions following
Russian invasion of Ukraine. The demand
and supply in the Met coal industry
changes from time to time. There
are
no
assurances
that
oversupply
will
not
occur,
that
demand
will
not
decrease
or
that
overcapacity
will
not
occur, which could
cause declines in
the prices
of coal,
which could
have a
material adverse effect
on our
financial
condition and results of operations.
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
may in 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
or may not be able to access alternate markets of our coal should additional interruptions andor trade barriers
occur
in the future. An
inability for
metallurgical coal
suppliers to access
international markets, including China,
would likely result in an oversupply
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
 
Factors—Risks
 
related
 
to
 
the
 
Supply
 
Deed
 
with
 
Stanwell
 
may
 
adversely
 
affect
 
our
 
financial
condition and results of operations” in our Annual Report on Form 10-K filed with the SEC and ASX on February
22, 2022.21, 2023.
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
 
sales are
those for which price finalization,
 
which price
finalization, referenced
to the relevant index,
 
index, is outstanding
at the reporting
date. The final
sales price is determined
 
is determined within 7 to
90 days after
 
delivery to the customer.
 
As of
September 30, 2022, we
 
30, 2023,
we had $53.2
$26.7
million
of
 
outstanding
provisionally
priced
receivables
 
subject
to
changes
in
the
relevant
price
index.
If
the relevant price index. If prices decreased 10%, these provisionally
priced receivables would decrease by $5.3
$2.7 million. See Item
1A. “Risk
Factors—Our profitability
depends upon
the prices
we receive
for our coal.
 
coal. Prices
for
coal
 
are
volatile
 
and can
can
fluctuate
widely
 
based
upon
 
a
number
 
of
factors
 
beyond
our
 
control”
in
 
our Annual
 
Annual
Report on
Form 10-K
filed
with the SEC and ASX on
February 22, 2022.21, 2023.
 
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
 
or diesel).
The expectation
of future
prices for
diesel depends
upon many
factors
beyond
our
control.
The
current
Israel-Palestine
conflict
could
create
significant
uncertainty
regarding
interruptions to global oil supply causing significant
volatility in prices of related commodities,
including the price
Coronado Global Resources Inc.
Form 10-Q September 30, 2023
46
of diesel fuel we
purchase. These commodities
may be hedged
through financial instruments
if the
 
exposure is
considered material
and where
if the exposure
 
is
considered material and where the exposure cannot be
 
mitigated through
fixed price
supply
agreements.
The fuel
 
required
 
for
 
our operations
 
for
 
the remainder
 
of fiscal
 
year
 
20222023
 
will
 
be
 
purchased
 
under
 
fixed-price
contracts or on a spot basis.
 
Coronado Global Resources Inc.
Form 10-Q September 30, 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
 
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
 
September
 
30,
 
2022,2023,
 
we
 
had
 
$326.3252.1
 
million
 
of
 
fixed
 
rate
 
borrowings
 
and
 
Notes
 
and
 
no
 
variable-rate
borrowings outstanding.
We currently do not hedge against interest rate
 
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 76.3%
60% of expenses incurred at our Australian
Operations are denominated in
in
A$.
Approximately
23.7% 40%
 
of
our
Australian
Operations’
purchases
are
 
made
with
reference
to
US$,
 
which provides
provides a natural hedge against foreign
 
foreign exchange movements on these
 
these purchases (including fuel, several
 
several port handling
handling charges, demurrage,
 
demurrage, purchased coal
 
coal and some
 
some insurance
premiums).
 
Appreciation of
 
the A$
 
against
US$ will increase our
Australian Operations’ US$
 
will
increase our Australian
Operations’ US$ reported
cost base and
 
reduce US$ reported net
 
net income. For
the portion
of US$ required
to purchase A$ to settle our
Australian Operations’ operating costs,
a 10% increase
in the A$ to
US$ exchange rate would increase reported total
 
total costs and expenses by approximately $37.5
 
$34.4 million and $86.1
and $98.5 million for the three and nine months ended September
 
September 30, 2022,2023, 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.
For our Australian
 
Operations, we
 
translate all
 
monetary assets
 
and liabilities
 
at the period-end
 
period-end exchange
rate,
all
 
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.
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
 
and
 
Board
 
of
Directors.
As of
September 30,
2023, we
had financial
assets of
$690.1 million,
comprising
of cash
and restricted
cash,
trade receivables and
restricted and other
deposits, which are
exposed to counterparty
credit risk. These
financial
assets
have
been
assessed
under
ASC
326,
Financial
Instruments
–
Credit
Losses
,
and
a
provision
for
discounting and credit losses of $0.8 million was recorded
as of September 30, 2023.
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
4347
ITEM 4.
 
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We
 
maintain
 
disclosure
 
controls
 
and
 
procedures
 
that
 
are
 
designed
 
to
 
ensure
 
that
 
information
 
required
 
to
 
be
disclosed in our Exchange Act reports is recorded, processed, summarized and
 
reported within the time periods
specified
 
in
 
the
 
SEC’s
 
rules
 
and
 
forms,
 
and
 
that
 
such
 
information
 
is
 
accumulated
 
and
 
communicated
 
to
 
our
management, including the
 
Chief Executive Officer
 
and the Group
 
Chief Financial Officer, as 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
 
our disclosure controls
 
and procedures.
Based on
 
the foregoing,
 
the
 
Chief Executive
 
Officer
 
and the
 
Group Chief
 
Financial
 
Officer
 
concluded
 
that our
disclosure controls and procedures were effective.
Changes to Internal Control over Financial Reporting
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
 
materially
 
affect,
 
the
 
Company’s
 
internal controls
 
over financial
reporting.
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
4448
PART II – OTHER
 
INFORMATION
ITEM 1.
 
LEGAL PROCEEDINGS
We are subject to various legal and
 
regulatory proceedings. For a description of our significant legal
 
proceedings
refer
 
to
 
Note 14.16. “Contingencies” to
 
the
 
unaudited
 
condensed
 
consolidated
 
financial
 
statements
 
included
 
in
Part I,
Item 1. “Financial
 
Statements”
of
 
this
Quarterly
 
Report on
Form 10-Q,
 
which
information
 
is
incorporated
by
reference
by reference herein.
ITEM 1A.
 
RISK FACTORS
Except as set forth below,
 
there were no material changes
 
to the risk factors previously
 
disclosed in Part I, Item
1A, “Risk Factors”, of
 
our Annual Report on
 
Form 10-K for the
 
year ended December 31,
 
2021,2022, filed with the
 
SEC
and ASX on
February 22, 2022,21, 2023
 
and Part II, Item 1A, “Risk Factors”, of
 
Item 1A. “Risk
Factors” of our
Quarterly Reports
Report on Form 10-Q for
 
forthe
the quarterly periods
period ended March 31, 2022 and June 30, 2022,2023, filed with the
 
with the SEC and ASX on May 9,8, 2023.
Consummation
 
2022 of the
proposed SGI
Transaction
may constitute
a change
of control
under our
Senior
Secured
Notes
Indenture
and
our
New
ABL
Facility,
which
could
materially
and
adversely
affect
our
business, financial condition and results of operations
.
On September
25, 2023,
the Sellers
advised the
Company that
the Sellers
had entered
into a
MIPA
with SGI.
The Company understands that, pursuant to the terms of the
MIPA, the Sellers agreed to sell all of their interests
in
Coronado
Group
LLC
to
a
wholly-owned
subsidiary
of
SGI
in
the
SGI
Transaction.
For
a
more
detailed
description of
the SGI
Transaction
refer to
Note 17.
“Related Party
Transactions”
to the
unaudited condensed
consolidated financial
statements included
in Part
I, Item
1. “Financial
Statements” of
this Quarterly
Report on
Form 10-Q, which information is incorporated by reference
herein.
Energy & Minerals Group has
reported that following the closing
of the SGI Transaction
,
the timing of which the
Company is not aware, SGI will be the direct or indirect owner of Coronado Group LLC. Coronado Group LLC
is
currently
the
direct
owner
of
845,061,399
CDIs
(representing
a
beneficial
interest
in
84,506,140
shares
of
common stock, or 50.4% of the Company’s
outstanding total common stock) and the one Series
A Share.
The consummation
of the
proposed SGI
Transaction
may constitute
a change
of control
under the
Company’s
Senior Secured
Notes
Indenture,
dated as
of May
12,
2021, pursuant
to which
the Company
has issued
and
August 8, 2022:
Weoutstanding approximately $242.3 million
 
areaggregate principal amount of
its 10.750% Senior Secured Notes
due
2026, or the Notes, as of September 30, 2023. Upon a change of control, Coronado
Finance Pty Ltd., the issuer
of the
Notes, is
required to
offer
to repurchase
all or
any part
of a
holder’s Notes
at a
purchase price
in cash
equal to
101% of
the principal
amount thereof,
plus accrued
and unpaid
interest, if
any,
to, but
excluding, the
date
of
repurchase,
 
subject
 
to
 
extensivethe
 
formsterms
and
conditions
 
of
 
taxation,the
indenture.
Failure
to
consummate
a
required
repurchase
offer,
whether
as a
result
of lack
of sufficient
funds
or otherwise
,
is an
event
of default
under
the
Senior Secured
Notes Indenture
that would
accelerate the
maturity of
the Notes
and permit
holders to
pursue
available remedies.
The consummation of the proposed
SGI Transaction may also constitute a change of
control under our New ABL
Facility.
A
change
of
control,
under
the
New
ABL
Facility
constitutes
a
Review
Event,
pursuant
to
 
which
 
imposesthe
Lenders
 
significantmay
 
costsrequest
 
onto
meet
and
consult
with
 
us
 
andto
 
future
regulationsagree
 
anda
 
developments
could
increase
those
costs
or
limit
our
abilitystrategy
 
to
 
produce
coal
competitively.
Federal,
state
or
local
governmental
authorities
in
nearly
all
countries
acrossaddress
 
the
 
globalrelevant
 
coalReview
 
miningEvent
including but not limited
 
industry
impose various
formsto, a restructure 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 sell coal, or which
adversely affect our
key customers, are adopted, or ifterms of 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 or results of
operations could be adversely
affected.
For example, on September
27, 2022, we received fromNew ABL Facility to
 
the QRO an assessment
satisfaction of the stamp duty payable
on
our 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). 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
 
assessmentLenders,
for
 
and,example
 
based
on
legal
and
valuation
advice
we
have
sought,
continue
to
maintain our position
and the estimated
accrual of $28.0
million (A$43.0 million)
within “Accrued Expenses
and
Other Current Liabilities”
in our unaudited
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 which case
the
amount
assessed
by
the
QRO
andany
 
unpaid
 
taxamounts
 
interest
on
the
amount
outstanding
willmay
 
become
 
due
 
and
payable
or
existing
undrawn
commitments
may
be
payable.cancelled. As of September 30,
2023, the Company had drawn
down $21.6 million of
borrowings and had $128.4
million of undrawn commitments under our New ABL
Facility.
 
ITEM 2.Should these potential
 
UNREGISTERED SALES OF EQUITY SECURITIESevents collectively occur,
 
AND USE OF PROCEEDSwe may need
to seek to
refinance the Notes,
replace the New
None.ABL Facility,
raise new
capital through
a public
offering or
modify existing
or future
capital expense
projects to
restore the Company’s liquidity.
Although we would expect to have numerous options available to us to address
our liquidity needs, there is no assurance that the Company will be able to refinance the Notes, replace the
New
ABL Facility,
raise
new
capital
through
a public
offering
or modify
existing
capital
expense
projects,
on terms
which are favorable to us, in which case
and taken as a whole, our liquidity profile
could deteriorate which could
materially and adversely affect our financial condition.
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
4549
Uncertainty
about
the
effects
of
the
SGI
Transaction
may
affect
our
potential
and
existing
financial
arrangements
and
customer
relationships,
including
contractual
rights
triggered
upon
a
change
of
control in
connection with
the SGI
Transaction,
and may
materially and
adversely affect
our business,
results of operations and financial condition.
Certain contract counterparties,
including customers, suppliers
and third-party providers
may assert contractual
rights, such as consent or termination rights that may be triggered by the consummation of the SGI Transaction.
In relation to the arrangements
with Stanwell, we are required
to request Stanwell’s
prior consent to the change
of control that is expected to occur on consummation of the SGI Transaction. Stanwell must either give or refuse
to give consent within a specified period following receipt
of the request, and may only refuse to consent
if in its’
reasonable opinion,
it determines,
that the
SGI Transaction
will have
a material
adverse effect
on the
financial
ability of Coronado Curragh
Pty Ltd to perform
its obligations under
the Stanwell agreements.
In circumstances
where consent is
not obtained, the
Company would
seek to
find mutually
agreeable alternative
terms on which
Stanwell would consent to the change in control.
The Company is also required to request Aurizon’s consent to the change of control that is expected to occur on
consummation
of
the
SGI
Transaction
under
the
Aurizon
UT5
Rail
Access
Agreement.
A
failure
to
obtain
Aurizon’s consent to the
consummation of the SGI
Transaction will constitute a breach of
the agreement, entitling
Aurizon to legal or equitable remedies which may include termination
of the agreement.
For a number of
customers and supplier agreements, including
contractor agreements, the completion of
the SGI
Transaction
may
trigger
a
financial
or
suitability
assessment
by
the
counterparty,
which
may
entitle
the
counterparty
to
terminate
the
agreement,
request
further
security
or
seek
amendments
to
the
terms
of
the
agreement. The
termination
of these
arrangements, or
the requirement
to provide
further security,
could harm
our
relationships
with
such
third
parties
and
could
have
a
material
adverse
effect
on
our
business,
financial
condition, and results of operations.
Consummation
of
the
SGI
Transaction
will
also
constitute
a
“changed
holder
event”
for
the
purposes
of
Queensland
financial
provisioning
legislation
relating
to
rehabilitation
obligations
for
the
Curragh
mining
tenements, which
may result
in the
Queensland
government reviewing
the “risk
category” to
which the
mining
tenements
are
allocated
(i.e.,
very
low,
low,
moderate
or
high),
which
may
require
us
to
provide
further
contribution or surety to the Queensland government.
Following the consummation
of the SGI
Transaction, we
expect that
SGI through
Coronado Group
LLC
will
have
significant
influence
over
corporate
matters,
including
control
over
certain
decisions
that
require the approval of stockholders.
The Special Committee is reviewing
the terms of the Certificate
of Incorporation regarding the Series A
Preferred
Stock and the terms
of the Stockholder’s Agreement
dated as of September 24,
2018 between the Company and
Coronado Group LLC
to evaluate whether
the rights ascribed
collectively to “EMG”
(as defined thereunder)
will
inure to
SGI as
the new
owner of
the Coronado
Group LLC.
Even apart
from those
rights, SGI
as the
indirect
owner of a majority of the Company’s common
stock will have significant influence over corporate
matters.
Further,
uncertainty
about
the
timing
of;
and
effects
of
the
SGI
Transaction
on
counterparties
to
contracts,
employees
and
other
parties
may
have
an
adverse
effect
on
us.
These
uncertainties
could
cause
contract
counterparties and
others who
deal with
us to
seek to
terminate or
amend their
existing business
relationships
with us, and may
impair our ability
to attract, retain
and motivate key
personnel for a
period of time
prior to and
following the consummation of the SGI
Transaction. As a result, uncertainties regarding the timing of;
and impact
of the
SGI Transaction on
our business
strategy may have
a material
and adverse
effect on our
business, financial
condition and results of operations.
ITEM
2.
UNREGISTERED
SALES
OF
EQUITY
SECURITIES,
USE
OF
PROCEEDS
AND
ISSUER
PURCHASES OF EQUITY SECURITIES
None.
ITEM 3.
 
DEFAULTS
 
UPON SENIOR SECURITIES
None.
Coronado Global Resources Inc.
Form 10-Q September 30, 2023
50
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 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
 
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.During the
 
quarter ended
September 30,
2023, no
director or
officer
(as defined
in Rule
16a-1(f) promulgated
under the Exchange
Act) of the
Company
adopted
or
terminated
a “Rule
10b5-1 trading arrangement”
or “
non-
Rule
10b5-1
trading arrangement” (as each term is defined in Item 408
of Regulation S-K).
Coronado Global Resources Inc.
Form 10-Q September 30, 2023
51
ITEM 6.
 
EXHIBITS
The following documents are filed as exhibits hereto:
Exhibit No.
Description of Document
3.1
3.2
10.1
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 TaxTaxonomy
 
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)
 
___________________________
* Certain schedules
and exhibits to
this agreement have
been omitted pursuant
to Item 601(a)(5)
of Regulation
S-K. A copy of any omitted
schedule and/or exhibit will be furnished to
the Securities and Exchange Commission
upon request.
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 20222023
 
4652
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.
By:
/s/ Gerhard Ziems
Gerhard Ziems
Group Chief Financial Officer (as duly authorized officer
and as principal financial officer of the registrant)
Date: November 8, 20222023