UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________
FORM
10-Q
___________________________________________________
(Mark One)
☒
ACT OF 1934
For the quarterly period ended
March 31, 2024
OR
☐
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
☒
☐
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
☒
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-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
☐
☒
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 $0.01 per share, outstanding on April 30, 2024, including shares of common stock underlying
CDIs, was
167,645,373
.
Steel starts
here.
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024.
TABLE OF CONTENTS
Page
4
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41
Coronado Global Resources Inc.
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
(In US$ thousands, except share data)
Assets
Note
(Unaudited)
December 31,
2023
Current assets:
Cash and cash equivalents
$
224,944
$
339,295
Trade receivables, net
301,475
263,951
Income tax receivable
35,947
44,906
Inventories
4
149,836
192,279
Other current assets
6
89,821
103,609
Total current assets
802,023
944,040
Non-current assets:
Property, plant and equipment, net
5
1,502,439
1,506,437
Right of use asset – operating leases, net
9
85,333
80,899
Goodwill
28,008
28,008
Intangible assets, net
3,058
3,108
Restricted deposits
16
68,884
68,660
Deferred income tax assets
40,637
27,230
Other non-current assets
21,439
19,656
Total assets
$
2,551,821
$
2,678,038
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
86,737
$
113,273
Accrued expenses and other current liabilities
7
267,826
312,705
Dividends payable
8
8,334
—
Asset retirement obligations
14,897
15,321
Contract obligations
38,926
40,722
Lease liabilities
9
23,783
22,879
Other current financial liabilities
2,751
2,825
Total current liabilities
443,254
507,725
Non-current liabilities:
Asset retirement obligations
147,374
148,608
Contract obligations
51,780
61,192
Deferred consideration liability
273,146
277,442
Interest bearing liabilities
10
235,987
235,343
Other financial liabilities
4,354
5,307
Lease liabilities
9
64,143
61,692
Deferred income tax liabilities
110,640
100,145
Other non-current liabilities
36,938
34,549
Total liabilities
$
1,367,616
$
1,432,003
Common stock $
0.01
1,000,000,000
authorized,
167,645,373
2024 and December 31, 2023
1,677
1,677
Series A Preferred stock $
0.01
100,000,000
authorized,
1
December 31, 2023
—
—
Additional paid-in capital
1,093,272
1,094,431
Accumulated other comprehensive losses
14
(113,215)
(89,927)
Retained earnings
202,471
239,854
Total stockholders’ equity
1,184,205
1,246,035
Total liabilities and stockholders’ equity
$
2,551,821
$
2,678,038
See accompanying notes to unaudited condensed consolidated financial statements.
Coronado Global Resources Inc.
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income
(In US$ thousands, except share data)
Three months ended
Note
2024
2023
Revenues:
Coal revenues
$
632,993
$
738,345
Other revenues
35,156
27,369
Total revenues
3
668,149
765,714
Costs and expenses:
Cost of coal revenues (exclusive of items shown separately below)
472,521
380,474
Depreciation, depletion and amortization
45,349
39,423
Freight expenses
56,822
63,353
Stanwell rebate
31,451
39,208
Other royalties
85,160
85,957
Selling, general, and administrative expenses
8,815
7,774
Total costs and expenses
700,118
616,189
Other (expense) income:
Interest expense, net
(13,329)
(14,665)
Decrease in provision for discounting and credit losses
173
3,988
Other, net
12,012
3,042
Total other expense, net
(1,144)
(7,635)
(Loss) income before tax
(33,113)
141,890
Income tax benefit (expense)
11
4,112
(34,030)
Net (loss) income attributable to Coronado Global Resources Inc.
$
(29,001)
$
107,860
Other comprehensive loss, net of income taxes:
Foreign currency translation adjustments
14
(23,288)
(4,503)
Total other comprehensive loss
(23,288)
(4,503)
Total comprehensive (loss) income attributable to Coronado Global
Resources Inc.
$
(52,289)
$
103,357
(Loss) earnings per share of common stock
Basic
12
(0.17)
0.64
Diluted
12
(0.17)
0.64
See accompanying notes to unaudited condensed consolidated financial statements.
Coronado Global Resources Inc.
Unaudited Condensed Consolidated Statements of Stockholders’ Equity
(In US$ thousands, except share data)
Common stock
Preferred stock
Additional
Accumulated other
Total
paid in
comprehensive
Retained
stockholders
Shares
Amount
Series A
Amount
capital
losses
earnings
equity
Balance December 31, 2023
167,645,373
$
1,677
1
$
—
$
1,094,431
$
(89,927)
$
239,854
$
1,246,035
Net loss
—
—
—
—
—
—
(29,001)
(29,001)
Other comprehensive loss
—
—
—
—
—
(23,288)
—
(23,288)
Total comprehensive loss
—
—
—
—
—
(23,288)
(29,001)
(52,289)
Share-based compensation for equity
classified awards
—
—
—
—
(1,159)
—
—
(1,159)
Dividends
—
—
—
—
—
—
(8,382)
(8,382)
Balance March 31, 2024
167,645,373
$
1,677
1
$
—
$
1,093,272
$
(113,215)
$
202,471
$
1,184,205
Common stock
Preferred stock
Additional
Accumulated other
Total
paid in
comprehensive
Retained
stockholders
Shares
Amount
Series A
Amount
capital
losses
earnings
equity
Balance December 31, 2022
167,645,373
$
1,677
1
$
—
$
1,092,282
$
(91,423)
$
100,554
$
1,103,090
Net income
—
—
—
—
—
—
107,860
107,860
Other comprehensive loss
—
—
—
—
—
(4,503)
—
(4,503)
Total comprehensive (loss) income
—
—
—
—
—
(4,503)
107,860
103,357
Share-based compensation for equity
classified awards
—
—
—
—
(308)
—
—
(308)
Dividends
—
—
—
—
—
—
(8,382)
(8,382)
Balance March 31, 2023
167,645,373
$
1,677
1
$
—
$
1,091,974
$
(95,926)
$
200,032
$
1,197,757
See accompanying notes to unaudited condensed consolidated financial statements.
Coronado Global Resources Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(In US$ thousands)
Three months ended
March 31,
2024
2023
Cash flows from operating activities:
Net (loss) income
$
(29,001)
$
107,860
Adjustments to reconcile net income to cash and restricted cash provided by
operating activities:
Depreciation, depletion and amortization
45,349
39,423
Amortization of right of use asset - operating leases
5,988
1,083
Amortization of deferred financing costs
257
483
Non-cash interest expense
8,906
8,086
Amortization of contract obligations
(7,597)
(7,201)
Loss on disposal of property, plant and equipment
130
121
Equity-based compensation expense
(1,159)
(308)
Deferred income taxes
(671)
8,141
Reclamation of asset retirement obligations
(992)
(737)
Decrease in provision for discounting and credit losses
(173)
(3,988)
Other non-cash adjustments
(10,064)
—
Changes in operating assets and liabilities:
Accounts receivable
(46,184)
105,270
Inventories
36,517
(28,039)
Other assets
6,670
5,362
Accounts payable
(23,969)
7,601
Accrued expenses and other current liabilities
(44,686)
(11,883)
Operating lease liabilities
(6,108)
(2,080)
Income tax payable
10,524
(8,510)
Change in other liabilities
2,487
2,942
Net cash (used in) provided by operating activities
(53,776)
223,626
Cash flows from investing activities:
Capital expenditures
(54,931)
(54,839)
Purchase of restricted and other deposits
(381)
(2,403)
Redemption of restricted and other deposits
—
3,095
Net cash used in investing activities
(55,312)
(54,147)
Cash flows from financing activities:
Principal payments on interest bearing liabilities and other financial liabilities
(822)
(920)
Principal payments on finance lease obligations
(35)
(31)
Net cash used in financing activities
(857)
(951)
Net (decrease) increase in cash and cash equivalents
(109,945)
168,528
Effect of exchange rate changes on cash and cash equivalents
(4,406)
(4,857)
Cash and cash equivalents at beginning of period
339,295
334,629
Cash and cash equivalents at end of period
$
224,944
$
498,300
Supplemental disclosure of cash flow information:
Cash payments for interest
$
722
$
575
Cash (refund) paid for taxes
$
(12,407)
$
34,000
Restricted cash
$
251
$
251
See accompanying notes to unaudited condensed consolidated financial statements.
Coronado Global Resources Inc.
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 20, 2024.
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
subsidiaries. References to “US$” or “USD” are references to U.S. dollars. References to “A$” or “AUD” are
references to Australian dollars, the lawful currency of the Commonwealth of Australia. The “Company” and
“Coronado” are used interchangeably to refer to Coronado Global Resources Inc. and its subsidiaries,
collectively, or to Coronado Global Resources Inc., as appropriate to the context. 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, 2023 has been derived from the Company’s audited consolidated balance sheet at that date.
The Company’s results of operations for the three months ended March 31, 2024 are not necessarily indicative
of the results that may be expected for the year ending December 31, 2024.
2. Summary of Significant Accounting Policies
Please see Note 2 “Summary of Significant Accounting Policies” contained in the audited consolidated financial
statements for the year ended December 31, 2023 included in Coronado Global Resources Inc.’s Annual Report
on Form 10-K filed with the SEC and ASX on February 20, 2024.
(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
one
owned idled mine complex (Greenbrier) and
two
The Company operates its business along
two
organization of the
two
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.
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 reportable segment but is discretely disclosed
for purposes of reconciliation to the Company’s unaudited Condensed Consolidated Financial Statements.
Reportable segment results as of and for the three months ended March 31, 2024 and 2023 are presented below:
(in US$ thousands)
Australia
United
States
Other and
Corporate
Total
Three months ended March 31, 2024
Total revenues
$
436,106
$
232,043
$
—
$
668,149
Adjusted EBITDA
(26,227)
49,228
(8,380)
14,621
Total assets
1,220,053
1,027,228
304,540
2,551,821
Capital expenditures
19,501
52,792
5
72,298
Three months ended March 31, 2023
Total revenues
$
398,661
$
367,053
$
—
$
765,714
Adjusted EBITDA
13,233
185,042
(7,526)
190,749
Total assets
1,146,508
951,237
539,722
2,637,467
Capital expenditures
7,235
34,163
55
41,453
The reconciliations of Adjusted EBITDA to net income attributable to the Company for the three months ended
March 31, 2024 and 2023 are as follows:
Three months ended
March 31,
(in US$ thousands)
2024
2023
Net (loss) income
$
(29,001)
$
107,860
Depreciation, depletion and amortization
45,349
39,423
Interest expense (net of interest income)
(1)
13,329
14,665
Income tax (benefit) expense
(4,112)
34,030
Other foreign exchange gains
(2)
(11,263)
(2,992)
Losses on idled assets
(3)
492
1,751
Decrease in provision for discounting and credit losses
(173)
(3,988)
Consolidated Adjusted EBITDA
$
14,621
$
190,749
(1)
3.0
1.0
(2)
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.
(3)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
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 three months ended
March 31, 2024 and 2023 are as follows:
Three months ended March 31,
(in US$ thousands)
2024
2023
Capital expenditures per unaudited Condensed Consolidated Statements of
Cash Flows
$
54,931
$
54,839
Accruals for capital expenditures
22,150
4,098
Payment for capital acquired in prior periods
(10,790)
(11,242)
Net movement in deposits to acquire long lead capital
6,007
(6,242)
Capital expenditures per segment detail
$
72,298
$
41,453
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 March 31, 2024
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
408,303
$
193,531
$
601,834
Thermal coal
19,294
11,865
31,159
Total coal revenue
427,597
205,396
632,993
Other
(1)(2)
8,509
26,647
35,156
Total
$
436,106
$
232,043
$
668,149
Three months ended March 31, 2023
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
372,519
$
283,023
$
655,542
Thermal coal
18,285
64,518
82,803
Total coal revenue
390,804
347,541
738,345
Other
(1)(2)
7,857
19,512
27,369
Total
$
398,661
$
367,053
$
765,714
(1) Other revenue for the Australian segment includes the amortization of the Stanwell non-market coal supply contract obligation liability.
(2) Other revenue for the U.S. segment includes $
25.0
17.5
2023, respectively, relating to termination fee revenue from a coal sales contracts cancelled at our U.S. operations.
4. Inventories
(in US$ thousands)
March 31,
2024
December 31,
2023
Raw coal
$
45,899
$
55,998
Saleable coal
50,150
81,314
Total coal inventories
96,049
137,312
Supplies and other inventory
53,787
54,967
Total inventories
$
149,836
$
192,279
Coal inventories measured at its net realizable value were $
3.1
2.4
December 31, 2023, respectively, and primarily relates to coal designated for deliveries under the Stanwell non-
market coal supply agreement.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
5. Property, Plant and Equipment
(in US$ thousands)
March 31,
2024
December 31,
2023
Land
$
28,471
$
28,282
Buildings and improvements
103,275
102,642
Plant, machinery, mining equipment and transportation vehicles
1,199,513
1,189,088
Mineral rights and reserves
389,868
389,868
Office and computer equipment
10,156
9,771
Mine development
560,488
579,717
Asset retirement obligation asset
85,288
88,384
Construction in process
158,314
143,041
Total cost of property, plant and equipment
2,535,373
2,530,793
Less accumulated depreciation, depletion and amortization
1,032,934
1,024,356
Property, plant and equipment, net
$
1,502,439
$
1,506,437
6. Other Assets
(in US$ thousands)
March 31,
2024
December 31,
2023
Other current assets
Prepayments
$
27,643
$
34,175
Long service leave receivable
7,889
8,438
Tax credits receivable
3,265
3,265
Deposits to acquire capital items
10,841
18,935
Short term deposits
21,674
21,906
Other
18,509
16,890
Total other current assets
$
89,821
$
103,609
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 held with financial institutions with maturity greater than ninety days and
less than twelve months and do not meet the cash and cash equivalents criteria.
7. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following:
(in US$ thousands)
March 31,
2024
December 31,
2023
Wages and employee benefits
$
43,926
$
42,348
Taxes other than income taxes
7,764
6,728
Accrued royalties
58,701
45,770
Accrued freight costs
35,875
47,549
Accrued mining fees
101,955
89,622
Acquisition related accruals
—
53,700
Other liabilities
19,605
26,988
Total accrued expenses and other current liabilities
$
267,826
$
312,705
Acquisition related accruals of $
53.7
79.0
estimated stamp duty payable on the Curragh acquisition. On March 6, 2024, the Company paid the outstanding
assessed stamp duty and tax interest to the Queensland Revenue Office, or QRO. Refer to Note 16
“Contingencies” for further details.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
8. Dividends payable
On February 19, 2024, the Company’s Board of Directors declared a bi-annual fully franked fixed ordinary
dividend of $
8.4
0.5
8.3
0.1
foreign exchange gain on payment of dividends to certain CDI holders who elected to be paid in Australian dollars.
9. Leases
During the three months ended March 31, 2024, the Company entered into a number of agreements to lease
mining equipment. Based on the Company’s assessment of terms within these agreements, the Company
classified these leases as operating leases. On mobilization of these leased mining equipment, the Company
recognized right-of-use assets and operating lease liabilities of $
13.3
Information related to the Company’s right-of-use assets and related lease liabilities are as follows:
Three months ended
(in US$ thousands)
March 31, 2024
March 31, 2023
Operating lease costs
$
7,568
$
1,083
Cash paid for operating lease liabilities
6,108
2,080
Finance lease costs:
Amortization of right of use assets
33
31
Interest on lease liabilities
1
4
Total finance lease costs
$
34
$
35
(in US$ thousands)
March 31,
2024
December 31,
2023
Operating leases:
Operating lease right-of-use assets
$
85,333
$
80,899
Finance leases:
Property and equipment
371
371
Accumulated depreciation
(342)
(309)
Property and equipment, net
29
62
Current operating lease obligations
23,750
22,811
Operating lease liabilities, less current portion
64,143
61,692
Total operating lease liabilities
87,893
84,503
Current finance lease obligations
33
68
Finance lease liabilities, less current portion
—
—
Total Finance lease liabilities
33
68
Current lease obligation
23,783
22,879
Non-current lease obligation
64,143
61,692
Total Lease liability
$
87,926
$
84,571
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
March 31,
2024
December 31,
2023
Weighted Average Remaining Lease Term (Years)
Weighted average remaining lease term – finance leases
0.3
0.5
Weighted average remaining lease term – operating leases
3.8
3.7
Weighted Average Discount Rate
Weighted discount rate – finance lease
7.6%
7.6%
Weighted discount rate – operating lease
8.8%
9.0%
The Company’s operating leases have remaining lease terms of
1
5
to extend the terms where the Company deems it is reasonably certain the options will be exercised. Maturities
of lease liabilities as at March 31, 2024, are as follows:
(in US$ thousands)
Operating
Lease
Finance
Lease
Year ending December 31,
2024
$
22,860
$
33
2025
30,505
—
2026
23,054
—
2027
14,852
—
2028
11,304
—
Thereafter
779
—
Total lease payments
103,354
33
Less imputed interest
(15,461)
—
Total lease liability
$
87,893
$
33
10. Interest Bearing Liabilities
The following is a summary of interest-bearing liabilities at March 31, 2024:
March 31, 2024
December 31, 2023
Weighted Average
Interest Rate at
March 31, 2024
Final
Maturity
10.75
% Senior Secured Notes
$
242,326
$
242,326
12.14
%
(2)
2026
ABL Facility
—
—
2026
Discount and debt issuance costs
(1)
(6,339)
(6,983)
Total interest bearing liabilities
$
235,987
$
235,343
(1)
Debt issuance costs incurred on the establishment of the ABL Facility has been included within "Other non-current assets" in the
unaudited Condensed Consolidated Balance Sheet.
(2)
Senior Secured Notes
As of March 31, 2024, the Company’s aggregate principal amount of the
10.750
% Senior Secured Notes due
2026, or the Notes, outstanding was $
242.3
May 15, 2026
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
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 March 31, 2024, the Company was in compliance with all applicable covenants under the
Indenture.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
Under the terms of the Indenture, upon the occurrence of a “Change of Control” (as defined in the Indenture), the
issuer is required to make an offer, or a Change of Control Offer, to repurchase the Notes at
101
% of the
aggregate principal amount thereof, plus accrued and unpaid interest, if any, 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
2024
104.03%
2025 and thereafter
100.00%
Asset Based Revolving Credit Facility
On May 8, 2023, the Company entered into a senior secured asset-based revolving credit agreement in an initial
aggregate amount of $
150.0
The ABL Facility matures in August 2026 and provides for up to $
150.0
100.0
million sublimit for the issuance of letters of credit and $
70.0
Availability under the ABL Facility is limited to an eligible borrowing base, determined by applying customary
advance rates to eligible accounts receivable and inventory.
Borrowings under the ABL Facility bear interest at a rate per annum equal to an applicable rate of
2.80
% plus
BBSY, for loans denominated in A$, or SOFR, for loans denominated in US$, at the Company’s election.
As at March 31, 2024, the letter of credit sublimit had been partially used to issue $
21.7
on behalf of the Company and
no
The 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
covenant regarding maintenance of interest coverage ratio to be more than
3.00
payment of dividends, or purchase or redemption of, with respect to any Equity Interests of Holdings or any of its
Subsidiaries, covenants relating 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.
As at March 31, 2024, the Company was in compliance with all applicable covenants under the ABL Facility.
Under the terms of ABL Facility, a Review Event (as defined in the ABL Facility) is triggered if, among other
matters, a “change of control” (as defined in the 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 ABL Facility to the satisfaction of the Lenders. If at the end of a
period of
20
of their discussion or meeting with the Borrowers or do not wish to continue to provide their commitments, the
Lenders may declare all amounts owing under the ABL Facility immediately due and payable, terminate such
Lenders’ commitments to make loans under the ABL Facility, require the Borrowers to cash collateralize any
letter of credit obligations and/or exercise any and all remedies and other rights under the ABL Facility.
Subject to customary grace periods and notice requirements, the ABL Facility also contains customary events of
default.
11. Income Taxes
For the three months ended March 31, 2024 and 2023, 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.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
The Company’s 2024 estimated annual effective tax rate is
12.0
%, which has been favorably impacted by mine
depletion deductions in the United States. The Company had an income tax benefit of $
4.1
loss before tax of $
33.1
$
0.1
Income tax expense of $
34.0
estimated annual effective tax rate of
24.0
% for the period.
The Company utilizes the “more likely than not” standard in recognizing a tax benefit in its financial statements.
For the three months ended March 31, 2024, the Company had
no
expense. 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 continues to carry an unrecognized tax benefit of $
20.8
with December 31, 2023.
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.
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 March 31,
(in US$ thousands, except per share data)
2024
2023
Numerator:
Net (loss) income attributable to Company stockholders
$
(29,001)
$
107,860
Denominator (in thousands):
Weighted-average shares of common stock outstanding
167,645
167,645
Effects of dilutive shares
—
307
Weighted average diluted shares of common stock outstanding
167,645
167,952
(Loss) Earnings Per Share (US$):
Basic
(0.17)
0.64
Dilutive
(0.17)
0.64
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:
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
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.
Financial Instruments Measured on a Recurring Basis
As of March 31, 2024, there were
no
basis.
Other Financial Instruments
The following methods and assumptions are used to estimate the fair value of other financial instruments as of
March 31, 2024 and December 31, 2023:
●
expenses, lease liabilities and other current financial liabilities: The carrying amounts reported in the
unaudited Condensed Consolidated Balance Sheets approximate fair value due to the short maturity of
these instruments.
●
values approximate the carrying values reported in the unaudited Condensed Consolidated Balance
Sheets.
●
cost. As of March 31, 2024, there were
no
Facility. The estimated fair value of the Notes as of March 31, 2024 was approximately $
250.5
based upon quoted market prices in a market that is not considered active (Level 2).
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 to the Company’s functional currency in U.S. dollar.
Accumulated other comprehensive losses consisted of the following at March 31, 2024:
(in US$ thousands)
Foreign
currency
translation
adjustments
Balance at December 31, 2023
$
(89,927)
Net current-period other comprehensive loss:
Loss in other comprehensive income before reclassifications
(5,265)
Loss on long-term intra-entity foreign currency transactions
(18,023)
Total net current-period other comprehensive loss
(23,288)
Balance at March 31, 2024
$
(113,215)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
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 March 31, 2024 are as follows:
(in US$ thousands)
Amount
Year ending December 31,
2024
$
4,228
2025
5,474
2026
5,338
2027
5,300
2028
5,243
Thereafter
25,397
Total
$
50,980
Mineral leases are not in scope of Accounting Standards Codification, or ASC, 842 and continue to be accounted
for under the guidance in ASC 932, Extractive Activities – Mining.
(b) Other commitments
As of March 31, 2024, purchase commitments for capital expenditures were $
68.6
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
13 years
.
In the U.S., the Company typically negotiates its rail and coal terminal access on an annual basis. As of March
31, 2024, these Australian and U.S. commitments under take-or-pay arrangements totaled $
723.0
which approximately $
90.0
16. Contingencies
Surety bond, letters of credit and bank guarantees
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
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.
For the U.S. Operations in order to provide the required financial assurance for post mining reclamation, the
Company generally uses surety bonds. The Company uses surety bonds and bank letters of credit to collateralize
certain other obligations including contractual obligations under workers’ compensation insurances. As of March
31, 2024, the Company had outstanding surety bonds of $
46.7
16.8
from our available bank guarantees under the ABL Facility.
For the Australian Operations as at March 31, 2024, the Company had bank guarantees outstanding of $
24.2
million, including $
4.9
arrangements of the Company.
As at March 31, 2024, the Company in aggregate had total outstanding bank guarantees provided of $
41.0
to secure its obligations and commitments, including $
21.7
Future regulatory changes relating to these obligations could result in increased obligations, additional costs or
additional collateral requirements.
Restricted deposits – cash collateral
As required by certain agreements, the Company had cash collateral in the form of deposits in the amount of
$
68.9
68.7
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.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
In accordance with the terms of the ABL Facility, the Company may be required to cash collateralize the ABL
Facility to the extent of outstanding letters of credit after the expiration or termination date of such letter of credit
after the expiration or termination date of such letter of credit. As of March 31, 2024,
no
outstanding after the expiration or termination date and
no
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 $
56.2
82.2
2022, the Company filed an objection to the assessment. The Company’s objection was based on legal and
valuation advice obtained, which supported an estimated stamp duty payable of $
29.4
43.0
the Curragh acquisition.
On January 9, 2024, the Company’s objection to the assessed stamp duty was disallowed by the QRO.
As per the Taxation Administration Act (Queensland) 2001, the Company could only appeal or apply for a review
of QRO’s decision if it has paid the total assessed stamp duty of $
56.2
82.2
interest of $
14.5
21.2
On March 6, 2024, the Company made an additional payment, and paid in full, the stamp duty assessed by the
QRO.
The Company disputes the additional amount of assessed stamp duty and, on March 11, 2024, filed its appeal
with the Supreme Court of Queensland.
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 operations and/or liquidity of the Company.
17. Related
‑
Party Transactions
SGI Transaction
On September 25, 2023, Energy & Minerals Group, the Company’s controlling stockholder through its ownership
of Coronado Group LLC, including through certain of its affiliates and managed funds (the Sellers), advised the
Company that it had entered into a membership interest purchase agreement, or MIPA, with Sev.en Global
Investments a.s., or SGI. A copy of the MIPA has not been made available to the Company or the Special
Committee referred to below as of the date of this 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
84,506,140
shares of common stock, or
50.4
% of the Company’s outstanding total common stock) and the
one
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 ABL Facility may occur. Refer to Note 10. “Interest Bearing
Liabilities” for further information.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
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 Nominating Committee 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 terminate the agreement, request further security or seek amendments to the terms of the
agreement.
Coronado Global Resources Inc.
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 March 31, 2024, the related condensed consolidated statements of operations and
comprehensive income, stockholders' equity and cash flows for the three months ended March 31, 2024 and
2023 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, 2023, 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 20, 2024,
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, 2023, 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
May 6, 2024.
Coronado Global Resources Inc.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following Management’s Discussion and Analysis of our Financial Condition and Results of Operations, or
MD&A, should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the
related notes to those statements included elsewhere in this Quarterly Report on Form 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, 2023 included in Coronado Global Resources Inc.’s Annual Report on Form 10-K
for the year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission, or SEC, and
the Australian Securities Exchange, or the ASX, on February 20, 2024.
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 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, as well as our plans, objectives and expectations for our business, operations, financial
performance and condition. Forward-looking statements may be identified by words such as “may,” “could,”
“believes,” “estimates,” “expects,” “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, but are not limited to:
●
●
unrest and wars, as well as risks related to government actions with respect to trade agreements, treaties
or policies;
●
as diesel fuel, steel, explosives and tires, as the result of inflationary pressures or otherwise;
●
developments. For example, the amendments to the coal royalty regime implemented in 2022 by the
Queensland State Government in Australia introducing higher tiers to the coal royalty rates applicable to
our Australian Operations;
●
relating to mining activities, 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 financial condition and results of
operations, affect demand for our products or our securities and reduced access to capital and insurance;
Coronado Global Resources Inc.
●
the SGI Transaction on change of control and related provisions in material agreements;
●
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;
●
●
governing such indebtedness;
●
performance or otherwise;
●
●
coal deliveries, or increase the cost of operating our business;
●
●
●
●
●
●
●
arrangements with rail and port operators;
●
●
●
●
any exposure to hazardous substances caused by our operations, as well as any environmental
contamination our properties may have or our operations may cause;
●
●
regulations;
●
●
proprietary or confidential information about us, our customers or other third parties;
●
require us to recognize impairment charges related to those assets;
●
●
impact our reported financial results; and
Coronado Global Resources Inc.
●
Factors,” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q.
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, 2023,
filed with the SEC and ASX on February 20, 2024 for a more complete discussion of the risks and uncertainties
mentioned above and for discussion of other risks and uncertainties we face that could cause actual results to
differ materially from those expressed or implied by these forward-looking statements.
All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary
statements, as well as others made in this Quarterly Report on Form 10-Q and hereafter in our other filings with
the SEC and public communications. You should evaluate all forward-looking statements made by us in the
context of these risks and uncertainties.
We caution you that the risks and uncertainties identified by us may not be all of the factors that are important to
you. You should not interpret the disclosure of any risk to imply that the risk has not already materialized.
Furthermore, the forward-looking statements included in this Quarterly Report on Form 10-Q are made only as
of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a
result of new information, future events, or otherwise, except as required by applicable law.
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
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 per Mt
sold, which we define as segment operating costs divided by sales volumes for the respective 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 the cost of coal
revenues to allow for consistency and comparability in evaluating our operating performance.
Non-GAAP Financial Measures; Other Measures
The following discussion of our results includes references to and analysis of 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. These measures should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with U.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
Coronado Global Resources Inc.
not intended to serve as an alternative to U.S. GAAP measures of performance including 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 by other companies.
A reconciliation of Adjusted EBITDA to 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 attributabl 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.
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 Virginia, West Virginia
and Pennsylvania 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 markets and also produce and sell some thermal coal that is
extracted in the process of mining Met coal.
During the three months ended March 31, 2024, Coronado faced some unforeseen operational challenges that
were beyond our control.
Our U.S. Operations suffered from mechanical issues, resulting in increased downtime and unplanned
maintenance, as well as geological issues adversely impacting production yield. Our Australian Operations were
once again compelled to adjust production schedule and implement contingency plans to mitigate inclement
weather that impacted mining operations in the Bowen Basin. Our Australian Operations demonstrated resilience
and adaptability, and were able to a maintain a steady level of overburden removal throughout the quarter,
surpassing historical first quarter performance in the operations history.
Overall, for the three months ended March 31, 2024, saleable production of 3.4 MMt was 0.3 MMt lower while
sales volume of 3.7 MMt remained consistent compared to the three months ended March 31, 2023.
Coking coal index prices declined in the first quarter of 2024 compared to the fourth quarter of December 2023
due to a combination of weak steel demand out of China, economic slowdown in India due to its upcoming general
elections and increased overall supply of coking coal globally.
The Australian Premium Low Volatile Hard Coking Coal, or AUS PLV HCC, index price averaged $308.38 per Mt
for the three months ended March 31, 2024, $25.5 per Mt lower, compared to the three months ended December
31, 2023, and $35.5 per Mt lower, compared to the three months ended March 31, 2023.
Coal revenues of $633.0 million for the three months ended March 31, 2024, were down $105.4 million compared
to the same period in 2023, driven by lower average realized price of $204.3 per Mt sold, compared to $239.7
per Mt sold for the three months ended March 31, 2023 .
Mining costs for the three months ended March 31, 2024, were $101.3 million, or $24.0 per Mt sold, higher
compared to the corresponding period in 2023, largely driven by unplanned maintenance costs, inflation impact
on labor and supply costs, significant inventory drawdown due to sales exceeding production in the 2024 period.
Our Australian Operations demobilized several mining equipment towards the end of the first quarter of 2024,
which is expected to reduce mining costs for the remainder of 2024.
Coronado Global Resources Inc.
Liquidity
Coronado had available liquidity of $374.7 million as of March 31, 2024, consisting of cash and cash equivalents
(excluding restricted cash), unrestricted short-term deposits of $21.7 million and $128.3 million of availability
under our ABL facility. As of March 31, 2024, our net debt position was $17.6 million comprising $242.3 million
aggregate principal amount of Notes outstanding less cash and cash equivalents (excluding restricted cash) of
$224.7 million.
Safety
For our Australian Operations, the twelve-month rolling average Total Reportable Injury Frequency Rate, or
TRIFR, at March 31, 2024 was 1.63,
compared to a rate of 1.83 at the end of December 31, 2023. At ou r U.S.
Operations, the twelve-month rolling average Total Reportable Incident Rate, or TRIR, at March 31, 2024 was
2.12, compared to a rate of 1.44 at the end of December 31, 2023. Reportable rates for our Australian and U.S.
Operations are below the relevant industry benchmarks.
The health and safety of our workforce is our number one priority and Coronado continues to implement safety
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.
Coronado Global Resources Inc.
Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023
Summary
The financial and operational highlights for the three months ended March 31, 2024 include:
●
million for the three months ended March 31, 2023. This result was driven by lower average realized Met
coal price per Mt sold, higher mining and operating costs, partially offset by tax benefit of $4.1 million in
the first quarter of 2024 compared to an income tax expense of $34.0 million for the same period in 2023.
●
per Mt lower compared to average realized price of $239.7 per Mt sold for the same period in 2023.
Coking coal index prices declined due to weak steel demand in China and economic slowdown in India
and increasing coal supply from Australia as weather conditions and logistical constraints improved in
the quarter.
●
volume of comparative period in 2023, despite saleable production being 0.3 MMt lower, as our
operations drew down on coal inventory built in the fourth quarter of 2023.
●
million
lower, compared to $190.7 million for the three months ended March 31, 2023, largely due to lower coal
sales revenues and higher mining and operating costs.
●
million cash and cash equivalents (excluding restricted cash), $21.7 million of unrestricted short-term
deposits and $128.3 million of availability under the ABL Facility.
Three months ended March 31,
2024
2023
Change
%
(in US$ thousands)
Revenues:
Coal revenues
$
632,993
$
738,345
$
(105,352)
(14.3%)
Other revenues
35,156
27,369
7,787
28.5%
Total revenues
668,149
765,714
(97,565)
(12.7%)
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
472,521
380,474
92,047
24.2%
Depreciation, depletion and amortization
45,349
39,423
5,926
15.0%
Freight expenses
56,822
63,353
(6,531)
(10.3%)
Stanwell rebate
31,451
39,208
(7,757)
(19.8%)
Other royalties
85,160
85,957
(797)
(0.9%)
Selling, general, and administrative expenses
8,815
7,774
1,041
13.4%
Total costs and expenses
700,118
616,189
83,929
13.6%
Other income (expenses):
Interest expense, net
(13,329)
(14,665)
1,336
(9.1%)
Decrease in provision for discounting and
credit losses
173
3,988
(3,815)
(95.7%)
Other, net
12,012
3,042
8,970
294.9%
Total other (expenses) income, net
(1,144)
(7,635)
6,491
(85.0%)
Net (loss) income before tax
(33,113)
141,890
(175,003)
(123.3%)
Income tax benefit (expense)
4,112
(34,030)
38,142
(112.1%)
Net (loss) income attributable to Coronado Global
Resources, Inc.
$
(29,001)
$
107,860
$
(136,861)
(126.9%)
Coal Revenues
Coal revenues were $633.0 million for the three months ended March 31, 2024, $105.4 million lower, compared
to $738.3 million for the three months ended March 31, 2023, mainly due to lower average realized price per Mt
sold. Lower Met coal price indices, due to unfavorable market conditions, saw the average realized Met coal price
Coronado Global Resources Inc.
for the three months ended March 31, 2024, to be $35.4 lower per Mt sold compared to $239.7 per Mt sold for
the same period in 2023.
Other revenues
Other revenues were $35.2 million the three months ended March 31, 2024, an increase of $7.8 million, compared
to $27.4 million for the same period in 2023. This increase was primarily driven by higher termination fee revenue
from coal sales contracts cancelled at our U.S. Operations compared to the three months ended March 31, 2023.
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 $472.5 million for the three months ended March 31, 2024, $92.0 million, or
24.2% higher, compared to $380.5 million for the three months ended March 31, 2023.
Our Australian Operations contributed to $82.6 million of the increase in cost of coal revenues, primarily driven
by higher draw down of coal inventory resulting from sales volume exceeding saleable production in the three
months ended March 31, 2024, impact of inflation on labor and supply costs, higher overburden removal and
unplanned equipment maintenance. Increase in costs were partially offset by favorable average foreign exchange
rate on translation of the Australian Operations for the three months ended March 31, 2024, of A$/US$: 0.66
compared to 0.68 for the same period in 2023.
Cost of coal revenues for our U.S. Operations for the three months ended March 31, 2024, was $9.4 million
higher compared to the three months March 31, 2023, largely due to lower sales volumes and increased
unplanned maintenance as a result of mechanical and geological issues which impacted production.
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization was $45.3 million for the three months ended March 31, 2024, an
increase of $5.9 million, compared to $39.4 million for the three months ended March 31, 2023. The increase
was due to additional equipment brought into service during the twelve months since March 31, 2023 partially
offset by favorable average foreign exchange rate on translation of the Australian Operations.
Coronado Global Resources Inc.
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 totaled $56.8 million for the three months
ended March 31, 2024, a decrease of $6.5 million, compared to $63.4 million for the three months ended March
31, 2023, primarily driven by lower coal sales under Free on Board, or FOB, terms at our U.S. Operations,
compared to the three months ended March 31, 2023.
Stanwell Rebate
The Stanwell rebate was $31.4 million for the three months ended March 31, 2024, a decrease of $7.8 million,
compared to $39.2 million for the three months ended March 31, 2023. The decrease was largely driven by lower
realized reference coal pricing for the prior twelve-month period applicable to three months ended March 31,
2024, used to calculate the rebate compared to the same period in 2023, and favorable foreign exchange rate
on translation of our Australian Operations.
Interest Expense, net
Interest expense, net was $13.3 million in the three months ended March 31, 2024, a decrease of $1.3 million
compared to $14.7 million for the three months ended March 31, 2023. The decrease was due to higher interest
income on term deposits, classified as cash equivalents , that did not exist in the same period in 2023.
Decrease in provision for discounting and credit losses
Decrease in provision for discounting and credit losses of $0.2 million in the three months ended March 31, 2024
was lower compared to the $4.0 million for the three months March 31, 2023, primarily driven by collection of
certain overdue trade receivables at December 31, 2022 during the three months ended March 31, 2023.
Other, net
Other, net was $12.0 million for the three months ended March 31, 2024, an increase of $9.0 million compared
to $3.0 million for the three months ended March 31, 2023. The increase was largely driven by higher exchange
losses 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 Benefit (Expense)
Income tax benefit of $4.1 million for the three months ended March 31, 2024, a difference of $38.1 million,
compared to the income tax expense of $34.0 million for the three months ended March 31, 2023, driven by net
loss before tax for the three months ended March 31, 2024, compared to a profit before tax for the corresponding
period in 2023.
Coronado Global Resources Inc.
Supplemental Segment Financial Data
Three months ended March 31, 2024 compared to three months ended March 31, 2023
Australia
Three months ended March 31,
2024
2023
Change
%
(in US$ thousands)
Sales volume (MMt)
2.5
2.2
0.3
15.3%
Total revenues ($)
436,106
398,661
37,445
9.4%
Coal revenues ($)
427,597
390,804
36,793
9.4%
Average realized price per Mt sold ($/Mt)
169.8
178.9
(9.1)
(5.1)%
Met sales volume (MMt)
1.8
1.5
0.3
17.7%
Met coal revenues ($)
408,303
372,519
35,784
9.6%
Average realized Met price per Mt sold ($/Mt)
225.2
241.9
(16.7)
(6.9)%
Mining costs ($)
317,864
236,056
81,808
34.7%
Mining cost per Mt sold ($/Mt)
126.9
108.5
18.4
17.0%
Operating costs ($)
462,733
385,226
77,507
20.1%
Operating costs per Mt sold ($/Mt)
183.7
176.4
7.3
4.1%
Segment Adjusted EBITDA ($)
(26,227)
13,233
(39,460)
(298.2)%
Coal revenues for our Australian Operations, for the three months ended March 31, 2024, were $427.6 million,
an increase of $36.8 million, or 9.4%, compared to $390.8 million for the three months ended March 31, 2023.
This increase was driven by higher sales volume partially offset by lower average realized Met coal price per Mt
sold compared to the three months ended March 31, 2023. Higher sales volumes were achieved by drawing port
inventories built at the end of 2023 due to port constraints. The lower average realized Met coal prices was driven
by weakening demand from China and economic slowdown from India combined with improved supply from
Australia and U.S.
Operating costs were $462.7 million, an increase of $77.5 million or 20.1%, for the three months ended March
31, 2024, compared to $385.2 million for the three months ended March 31, 2023. The increase was largely
driven by higher mining costs and partially offset by lower Stanwell rebates. Higher mining costs were due to
higher labor and supply costs as result of inflation impacts, and drawdown of coal inventories due to sales
exceeding production in the first quarter of 2024. 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 March 31,
2024, increased by $18.4 per Mt sold to $126.9 per Mt sold, compared to the same period in 2023.
Segment Adjusted EBITDA decreased by $39.5 million, or 298.2%, to a Segment Adjusted EBITDA loss of $26.2
million for the three months ended March 31, 2024, compared to $13.2 million for the three months ended March
31, 2023, largely driven by higher mining and operating costs.
United States
Three months ended March 31,
2024
2023
Change
%
(in US$ thousands)
Sales volume (MMt)
1.2
1.5
(0.3)
(17.2)%
Total revenues ($)
232,043
367,053
(135,010)
(36.8)%
Coal revenues ($)
205,396
347,541
(142,145)
(40.9)%
Average realized price per Mt sold ($/Mt)
167.8
235.1
(67.3)
(28.6)%
Met sales volume (MMt)
1.1
1.2
(0.1)
(5.2)%
Met coal revenues ($)
193,531
283,023
(89,492)
(31.6)%
Average realized Met price per Mt sold ($/Mt)
170.9
236.9
(66.0)
(27.9)%
Mining costs ($)
147,584
128,120
19,464
15.2%
Mining cost per Mt sold ($/Mt)
122.9
90.8
32.1
35.4%
Operating costs ($)
183,221
183,766
(545)
(0.3)%
Operating costs per Mt sold ($/Mt)
149.7
124.3
25.4
20.4%
Segment Adjusted EBITDA ($)
49,228
185,042
(135,814)
(73.4)%
Coal revenues decreased by $142.1 million, or 40.9%, to $205.4 million for the three months ended March 31,
2024, compared to $347.5 million for the three months ended March 31, 2023. This decrease was driven by lower
Coronado Global Resources Inc.
average realized Met price per Mt sold for the three months ended March 31, 2024, $66.0 per Mt sold lower than
2023 period, combined lower sales volume of 0.3 MMt. Lower sales volume were a result of lower production
caused by geological issues impacting production yield at our Buchanan mine and mechanical issues at our
Logan mine resulting in production downtime.
Operating costs remained consistent for the three months ended March 31, 2024, compared to the three months
ended March 31, 2023, while mining costs increased by $19.5 million, or 15.2%. The increase in mining costs
was primarily driven by higher costs due to lower inventory built during the three months ended March 31, 2024,
compared to the corresponding period in 2023, combined with higher unplanned maintenance costs due to
mechanical issues. The higher mining costs was partially offset by lower freight expense from lower sales on
FOB terms and lower royalties due to lower sales volumes.
Segment Adjusted EBITDA of $49.2 million for the three months ended March 31, 2024, decreased by $135.8
million compared to $185.0 million for the three months ended March 31, 2023, primarily driven by lower coal
revenues and higher mining costs.
Corporate and Other Adjusted EBITDA
The following table presents a summary of the components of Corporate and Other Adjusted EBITDA:
Three months ended March 31,
2024
2023
Change
%
(in US$ thousands)
Selling, general, and administrative expenses
$
8,815
$
7,774
$
1,041
13.4%
Other, net
(435)
(248)
(187)
n/m
Total Corporate and Other Adjusted EBITDA
$
8,380
$
7,526
$
854
11.3%
n/m – Not meaningful for comparison.
Corporate and other costs of $8.8 million for the three months ended March 31, 2024, were $1.0 million higher
compared to $7.8 million for the three months ended March 31, 2023, due to timing of certain corporate costs.
Coronado Global Resources Inc.
Mining and operating costs for the three months ended March 31, 2024 compared to three months
ended March 31, 2023
A reconciliation of segment costs and expenses, segment operating costs, and segment mining costs is shown
below:
Three months ended March 31, 2024
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and expenses
$
483,672
$
207,346
$
9,100
$
700,118
Less: Selling, general and administrative
expense
(11)
—
(8,804)
(8,815)
Less: Depreciation, depletion and amortization
(20,928)
(24,125)
(296)
(45,349)
Total operating costs
462,733
183,221
—
645,954
Less: Other royalties
(75,987)
(9,173)
—
(85,160)
Less: Stanwell rebate
(31,451)
—
—
(31,451)
Less: Freight expenses
(33,461)
(23,361)
—
(56,822)
Less: Other non-mining costs
(3,970)
(3,103)
—
(7,073)
Total mining costs
317,864
147,584
—
465,448
Sales Volume excluding non-produced coal
(MMt)
2.5
1.2
—
3.7
Mining cost per Mt sold ($/Mt)
126.9
122.9
—
125.6
Three months ended March 31, 2023
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and expenses
$
403,868
$
204,263
$
8,058
$
616,189
Less: Selling, general and administrative
expense
—
—
(7,774)
(7,774)
Less: Depreciation, depletion and amortization
(18,642)
(20,497)
(284)
(39,423)
Total operating costs
385,226
183,766
—
568,992
Less: Other royalties
(72,993)
(12,964)
—
(85,957)
Less: Stanwell rebate
(39,208)
—
—
(39,208)
Less: Freight expenses
(33,819)
(29,534)
—
(63,353)
Less: Other non-mining costs
(3,150)
(13,148)
—
(16,298)
Total mining costs
236,056
128,120
—
364,176
Sales Volume excluding non-produced coal
(MMt)
2.2
1.4
—
3.6
Mining cost per Mt sold ($/Mt)
108.5
90.8
—
101.6
Average realized Met price per Mt sold for the three months ended March 31, 2024 compared to three
months ended March 31, 2023
A reconciliation of the Company’s average realized Met price per Mt sold is shown below:
Three months ended March 31,
2024
2023
Change
%
(in US$ thousands)
Met sales volume (MMt)
2.9
2.7
0.2
7.7%
Met coal revenues ($)
601,834
655,542
(53,708)
(8.2)%
Average realized Met price per Mt sold ($/Mt)
204.3
239.7
(35.4)
(14.8)%
Coronado Global Resources Inc.
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA
Three months ended March 31,
(in US$ thousands)
2024
2023
Reconciliation to Adjusted EBITDA:
Net (loss) income
$
(29,001)
$
107,860
Add: Depreciation, depletion and amortization
45,349
39,423
Add: Interest expense (net of interest income)
13,329
14,665
Add: Other foreign exchange gains
(11,263)
(2,992)
Add: Income tax (benefit) expense
(4,112)
34,030
Add: Losses on idled assets
492
1,751
Add: Decrease in provision for discounting and credit losses
(173)
(3,988)
Adjusted EBITDA
$
14,621
$
190,749
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 our debt 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, current and future trade barriers and
the uncertainty of impacts from ongoing civil unrest and wars, we believe expected cash generated from
operations together with available borrowing facilities and other strategic and financial initiatives, will be sufficient
to meet the needs of our existing operations, capital expenditure, service our debt obligations and, if declared,
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 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 ABL Facility to the satisfaction of the Lenders. Refer to Note 10. “Interest
Bearing Liabilities” for further information.
Our ability to generate sufficient cash depends on our future performance, which may be subject to a number of
factors beyond our control, including general economic, financial and competitive conditions and other risks
described in this document, and Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year
ended December 31, 2023, filed with the SEC and ASX on February 20, 2024.
Liquidity as of March 31, 2024 and December 31, 2023 was as follows:
(in US$ thousands)
March 31,
2024
December 31,
2023
Cash and cash equivalents, excluding restricted cash
$
224,693
$
339,043
Short term deposits
21,674
21,906
Availability under the ABL Facility
(1)
128,326
128,094
Total
$
374,693
$
489,043
(1)
The 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 $21.7 million has been issued as of March 31, 2024, and a $70.0 million sublimit as a revolving credit
facility. The letter of credit sublimit contributes to our liquidity as the Company has the ability to replace cash collateral,
provided in the form of restricted deposits, with letters of credit allowing the release of such restricted deposits to cash and
cash equivalents.
Coronado Global Resources Inc.
Our total indebtedness as of March 31, 2024 and December 31, 2023 consisted of the following:
(in US$ thousands)
March 31,
2024
December 31,
2023
Current installments of interest bearing liabilities
$
242,326
$
242,326
Current installments of other financial liabilities and finance lease obligations
2,784
2,893
Other financial liabilities and finance lease obligations, excluding current
installments
4,354
5,307
Total
$
249,464
$
250,526
Liquidity
As of March 31, 2024, available liquidity was $374.7 million, comprised of cash and cash equivalents (excluding
restricted cash) of $224.7 million, unrestricted short-term deposits of $21.7 million and $128.3 million of available
borrowings under our ABL Facility.
As of December 31, 2023, available liquidity was $489.0 million, comprised of cash and cash equivalents
(excluding restricted cash) of $339.0 million and unrestricted short-term deposits of $21.9 million and $128.1
million of available borrowings under our ABL Facility.
Cash and cash equivalents
Cash and cash equivalents are 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 March 31, 2024, the outstanding principal amount of our Notes was $242.3 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 some or all of the Notes at the redemption prices and on the terms specified in the
Indenture. In addition, the Company may, from time to time, seek to retire or purchase outstanding debt through
open-market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will be upon
such terms and at such prices as the Company may determine, and will depend on prevailing market conditions,
liquidity requirements, contractual restrictions and other factors.
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 Notes may occur. Refer to Part I, Item I. Financial Statements, Note 10. “Interest
Bearing Liabilities” for further information.
As of March 31, 2024, we were in compliance with all applicable covenants under the Indenture.
ABL Facility
The 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 $70.0 million sublimit as a revolving credit facility.
Availability under the ABL Facility is limited to an eligible borrowing base, determined by applying customary
advance rates to eligible accounts receivable and inventory.
Coronado Global Resources Inc.
Borrowings under the ABL Facility bear interest at a rate per annum equal to applicable rate of 2.80% and BBSY,
for loans denominated in A$, or SOFR, for loans denominated in US$, at the Borrower’s election.
Subject to customary grace periods and notice requirements, the 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 ABL Facility may occur. Refer to Part I, Item I. Financial Statements, Note 10.
“Interest Bearing Liabilities” for further information.
As at March 31, 2024, letter of credit sublimit had been partially used to issue $21.7 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 ABL Facility. As at March 31, 2024, the Company was in compliance with all applicable
covenants under the ABL Facility.
Surety Bonds, letters of credit and bank guarantees
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.
For the U.S. Operations in order to provide the required financial assurance for post mining reclamation, we
generally use surety bonds. We use surety bonds and bank letters of credit to collateralize certain other
obligations including contractual obligations under workers’ compensation insurances. As of March 31, 2024, we
had outstanding surety bonds of $46.7 million and letters of credit of $16.8 million issued from our available bank
guarantees under the ABL Facility.
For the Australian Operations as at March 31, 2024, we have bank guarantees outstanding of $24.2 million,
including $4.9 million issued from the ABL Facility, primarily in respect of certain rail and port arrangements of
the Company.
As at March 31, 2024, we have in aggregate had total outstanding bank guarantees provided of $41.0 million to
secure its obligations and commitments, including $21.7 million issued for the ABL Facility.
Future regulatory changes relating to these obligations could result in increased obligations, additional costs or
additional collateral requirements.
Restricted deposits – cash collateral
As required by certain agreements, we have cash collateral in the form of deposits in the amount of $68.9 million
as of March 31, 2024 to provide 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 after the
expiration or termination date of such letter of credit. As of March 31, 2024, no letter of credit was outstanding
after the expiration or termination date and no cash collateral was required.
Dividend
On February 19, 2024, our Board of Directors declared a bi-annual fully franked fixed ordinary dividend of $8.4
million, or 0.5 cents per CDI. On April 4, 2024, the Company paid $8.3 million, net of $0.1 million foreign exchange
gain on payment of dividends to certain CDI holders who elected to be paid in Australian dollars.
Capital Requirements
Our main uses of cash have historically been the funding of our operations, working capital, capital expenditure,
the payment of interest and dividends. We intend to use cash to fund debt service payments on our Notes, the
ABL Facility and our other indebtedness, to fund operating activities, working capital, capital expenditures, partial
redemption of the Notes, business or assets acquisitions and, if declared, payment of dividends.
Coronado Global Resources Inc.
Historical Cash Flows
The following table summarizes our cash flows for the three months ended March 31, 2024 and 2023, as reported
in the accompanying consolidated financial statements:
Cash Flow
Three months ended March 31,
(in US$ thousands)
2024
2023
Net cash (used in) provided by operating activities
$
(53,776)
$
223,626
Net cash used in investing activities
(55,312)
(54,147)
Net cash used in financing activities
(857)
(951)
Net change in cash and cash equivalents
(109,945)
168,528
Effect of exchange rate changes on cash and restricted cash
(4,406)
(4,857)
Cash and cash equivalents at beginning of period
339,295
334,629
Cash and cash equivalents at end of period
$
224,944
$
498,300
Operating activities
Net cash used in operating activities was $53.8 million for the three months ended March 31, 2024, compared to
net cash provided by operating activities of $223.6 million for the three months ended March 31, 2023. The
decrease in cash from operating activities was driven by the lower coal revenues, higher operating costs and the
additional payment of $51.5 million, including tax interest, in relation to the stamp duty on Curragh’s acquisition.
Investing activities
Net cash used in investing activities was $55.3 million
for the three months ended March 31, 2024, compared to
$54.1 million for the three months ended March 31, 2023. Cash spent on capital expenditures for the three months
ended March 31, 2024 was $54.9 million, of which $10.1 million was related to the Australian Operations and
$44.9 million was related to the U.S. Operations.
Financing activities
Net cash used in financing activities was $0.8 million
for the three months ended March 31, 2024, compared to
cash used in financing activities of $1.0 million for the three months ended March 31, 2023. The net cash used
in financing activities for the three months ended March 31, 2024 largely related to repayment of other financial
liabilities.
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, 2023, filed with the SEC and ASX on February 20, 2024.
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.
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, 2023,
filed with the SEC and ASX on February 20, 2024.
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 March 31, 2024, there were no
accounting standards not yet implemented.
Coronado Global Resources Inc.
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 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. 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. We may or may not be able to access alternate markets of our coal should
interruptions or trade barriers occur in the future. An inability for metallurgical coal suppliers to access
international markets would likely result in an oversupply of Met coal and may result in a decrease in prices and
or the curtailment of production.
We manage our commodity price risk for our non-trading, thermal coal sales through the use of long-term coal
supply agreements in our U.S. Operations. In Australia, thermal coal is sold to Stanwell on a supply contract. See
Item 1A. “Risk 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
20, 2024.
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 are provisionally priced initially. Provisionally priced sales are
those for which price finalization, referenced to the relevant index, is outstanding at the reporting date. The final
sales price is determined within 7 to 90 days after delivery to the customer. As of March 31, 2024, we had $25.6
million of outstanding provisionally priced receivables subject to changes in the relevant price index. If prices
decreased 10%, these provisionally priced receivables would decrease by $2.6 million. See Item 1A. “Risk
Factors—Our profitability depends upon the prices we receive for our coal. Prices for coal are volatile and can
fluctuate widely based upon a number of factors beyond our control” in our Annual Report on Form 10-K filed
with the SEC and ASX on February 20, 2024.
Diesel Fuel
We may be exposed to price risk in relation to other commodities from time to time arising from raw materials
used in our operations (such as gas or diesel). 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
of diesel fuel we purchase. These commodities may be hedged through financial instruments if the exposure is
considered material and where the exposure cannot be mitigated through fixed price supply agreements.
The fuel required for our operations for the remainder of fiscal year 2024 will be purchased under fixed-price
contracts or on a spot basis.
Coronado Global Resources Inc.
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 March 31, 2024, we had $249.5 million of fixed rate borrowings and Notes and no variable-rate borrowings
outstanding.
We currently do not hedge against interest rate fluctuations.
Foreign Exchange Risk
A significant portion of our sales are denominated in US$. 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 70% of expenses incurred at our Australian Operations are denominated in
A$. Approximately 30% of our Australian Operations’ purchases are made with reference to US$, which provides
a natural hedge against foreign exchange movements on these purchases (including fuel, several port handling
charges, demurrage, purchased coal and some insurance premiums). Appreciation of the A$ against US$ will
increase our Australian Operations’ US$ reported cost base and reduce US$ reported 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 costs and expenses by approximately $33.7 million for the three
months ended March 31, 2024, respectively.
Under normal market conditions, we generally do not consider it necessary to hedge our exposure to this foreign
exchange risk. However, there may be specific commercial circumstances, such as the hedging of significant
capital expenditure, acquisitions, disposals and other financial transactions, where we may deem foreign
exchange hedging as appropriate and where a US$ 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 exchange rate,
all non-monetary 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 March 31, 2024, we had financial assets of $617.7 million, comprising of cash and cash equivalents, trade
receivables, short-term deposits and restricted 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 $0.7 million was recorded as of March 31, 2024.
Coronado Global Resources Inc.
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 control over financial
reporting.
Coronado Global Resources Inc.
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 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 herein.
ITEM 1A. RISK FACTORS
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, 2023, filed with the SEC and ASX on February
20, 2024.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Safety is the cornerstone of the Company’s values and is the number one priority for all employees at Coronado
Global Resources 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
During the quarter ended March 31, 2024, no director or officer (as defined in Rule 16a-1(f) promulgated under
the Exchange Act) of the Company
adopted
terminated
non-Rule
10b5-1
Coronado Global Resources Inc.
ITEM 6. EXHIBITS
The following documents are filed as exhibits hereto:
Exhibit No.
Description of Document
3.1
3.2
15.1
31.1
31.2
32.1
95.1
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
Coronado Global Resources Inc.
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: May 6, 2024