CODQL 10-Q
Coronado Global Resources Inc. (CODQL)
10-Q
2024-11-12
For: 2024-09-30
View Original
Added on
April 06, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________
FORM
___________________________________________________
(Mark One)
ACT OF 1934
For the quarterly period ended
OR
ACT OF 1934
For the transition period from to
Commission File Number:
___________________________________________________
(Exact name of registrant as specified in its charter)
___________________________________________________
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
,
,
(Address of principal executive offices)
(Zip Code)
(
)
(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.
☒
☐
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).
☒
☐
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.
☒
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 $0.01 per share, outstanding on October 31, 2024, including shares of common stock underlying
CDIs, was
.
Steel starts
here.
Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024.
TABLE OF CONTENTS
Page
4
5
6
8
9
23
24
45
47
48
48
48
48
48
48
49
50
Coronado Global Resources Inc.
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
(In US$ thousands, except share data)
Assets
Note
(Unaudited)
2024
December 31,
2023
Current assets:
Cash and cash equivalents
$
$
Trade receivables, net
Income tax receivable
Inventories
4
Other current assets
5
Total current assets
Non-current assets:
Property, plant and equipment, net
6
Right of use asset – operating leases, net
8
Goodwill
Intangible assets, net
Restricted deposits
16
Deferred income tax assets
Other non-current assets
Total assets
$
$
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
$
Accrued expenses and other current liabilities
7
Asset retirement obligations
Contract obligations
Lease liabilities
8
Interest bearing liabilities
9
Other current financial liabilities
10
Total current liabilities
Non-current liabilities:
Asset retirement obligations
Contract obligations
Deferred consideration liability
Interest bearing liabilities
9
Other financial liabilities
10
Lease liabilities
8
Deferred income tax liabilities
Other non-current liabilities
Total liabilities
$
$
Common stock $
and December 31, 2023
Series A Preferred stock $
authorized,
and December 31, 2023
Additional paid-in capital
Accumulated other comprehensive losses
14
(87,677 )
(89,927 )
Retained earnings
Total stockholders’ equity
$
$
Total liabilities and stockholders’ equity
$
$
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
Nine months ended
Note
2024
2023
2024
2023
Revenues:
Coal revenues
$
$
$
$
Other revenues
Total revenues
3
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
Depreciation, depletion and amortization
Freight expenses
Stanwell rebate
Other royalties
Selling, general, and administrative
expenses
Total costs and expenses
Other (expense) income:
Interest expense, net
(15,808 )
(14,496 )
(42,253 )
(43,341 )
Loss on debt extinguishment
(1,385 )
(1,385 )
(Increase) decrease in provision for
discounting and credit losses
(43 )
Other, net
(19,749 )
(8,643 )
Total other expense, net
(35,600 )
(7,156 )
(50,739 )
(22,767 )
(Loss) income before tax
(102,768 )
(39,313 )
(83,280 )
Income tax benefit (expense)
11
(37,775 )
Net (loss) income attributable to
Coronado Global Resources Inc.
$
(70,997 )
$
(21,083 )
$
(54,798 )
$
Other comprehensive loss, net of income
taxes:
Foreign currency translation adjustments
14
(18,247 )
(30,547 )
Total comprehensive income (loss)
(18,247 )
(30,547 )
Total comprehensive (loss) income
attributable to Coronado Global
Resources Inc.
$
(51,681 )
$
(39,330 )
$
(52,548 )
$
(Loss) earnings per share of common stock
Basic
12
(0.42 )
(0.13 )
(0.33 )
Diluted
12
(0.42 )
(0.13 )
(0.33 )
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
$
$
$
$
(89,927 )
$
$
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
$
$
$
$
(113,215 )
$
$
Net income
—
—
Other comprehensive income
—
—
Total comprehensive income
—
—
Share-based compensation for equity
classified awards
—
—
Balance June 30, 2024
$
$
$
$
(106,993 )
$
$
Net loss
—
—
(70,997 )
(70,997 )
Other comprehensive income
—
—
Total comprehensive income (loss)
—
—
(70,997 )
(51,681 )
Share-based compensation for equity
classified awards
—
—
Dividends
—
—
(8,382 )
(8,382 )
Balance September 30, 2024
$
$
$
$
(87,677 )
$
$
Coronado Global Resources Inc.
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
$
$
$
$
(91,423 )
$
$
Net income
—
—
Other comprehensive loss
—
—
(4,503 )
(4,503 )
Total comprehensive (loss) income
—
—
(4,503 )
Share-based compensation for equity
classified awards
—
—
(308 )
(308 )
Dividends
—
—
(8,382 )
(8,382 )
Balance March 31, 2023
$
$
$
$
(95,926 )
$
$
Net income
—
—
Other comprehensive loss
—
—
(7,797 )
(7,797 )
Total comprehensive (loss) income
—
—
(7,797 )
Share-based compensation for equity
classified awards
—
—
Balance June 30, 2023
$
$
$
$
(103,723 )
$
$
Net loss
—
—
(21,083 )
(21,083 )
Other comprehensive loss
—
—
(18,247 )
(18,247 )
Total comprehensive loss
—
—
(18,247 )
(21,083 )
(39,330 )
Share-based compensation for equity
classified awards
—
—
Dividends
—
—
(8,382 )
(8,382 )
Balance September 30, 2023
$
$
$
$
(121,970 )
$
$
See accompanying notes to unaudited condensed consolidated financial statements.
Coronado Global Resources Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(In US$ thousands)
Nine months ended
September 30,
2024
2023
Cash flows from operating activities:
Net (loss) income
$
(54,798 )
$
Adjustments to reconcile net income to cash and restricted cash provided by
operating activities:
Depreciation, depletion and amortization
Impairment of non-core assets
Amortization of right of use asset - operating leases
Amortization of deferred financing costs
Loss on debt extinguishment
Non-cash interest expense
Amortization of contract obligations
(22,163 )
(23,896 )
Loss on disposal of property, plant and equipment
Gain on derecognition of operating lease
(820 )
Equity-based compensation expense
(75 )
Deferred income taxes
(27,335 )
Reclamation of asset retirement obligations
(6,313 )
(3,168 )
Decrease in provision for discounting and credit losses
(157 )
(4,255 )
Other non-cash adjustments
Changes in operating assets and liabilities:
Accounts receivable
(13,621 )
Inventories
(54,704 )
Other assets
(5,947 )
(5,197 )
Accounts payable
(13,138 )
Accrued expenses and other current liabilities
(85,576 )
(69,303 )
Operating lease liabilities
(15,812 )
(9,311 )
Income tax payable
(128,418 )
Change in other liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Capital expenditures
(201,147 )
(182,442 )
Purchase of restricted and other deposits
(2,102 )
(26,836 )
Redemption of restricted and other deposits
Net cash used in investing activities
(200,887 )
(183,028 )
Cash flows from financing activities:
Proceeds from interest bearing liabilities and other financial liabilities
Debt issuance costs and other financing costs
(2,261 )
(3,420 )
Principal payments on interest bearing liabilities and other financial liabilities
(2,969 )
(2,732 )
Principal payments on finance lease obligations
(68 )
(98 )
Dividends paid
(16,679 )
(16,755 )
Net cash provided by (used in) financing activities
(23,005 )
Net (decrease) increase in cash and cash equivalents
(161,532 )
Effect of exchange rate changes on cash and cash equivalents
(1,414 )
(15,180 )
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
$
$
Supplemental disclosure of cash flow information:
Cash payments for interest
$
$
Cash (refund) paid for taxes
$
(21,285 )
$
Restricted cash
$
$
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 U.S. 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 and nine months ended September 30, 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, or ASU, issued by the Financial
Accounting Standards Board, or the FASB, that had a material impact on the Company’s consolidated financial
statements.
(b) Accounting Standards Not Yet Implemented
ASU No. 2023-07 “Segment Reporting” (Topic 280)
: In November 2023, the FASB issued ASU 2023-07, which
is intended to improve reportable segment disclosure requirements through enhanced disclosures of significant
segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim
periods within fiscal years beginning after December 31, 2024. Early adoption is permitted. The updated standard
is to be applied retrospectively to all prior periods presented in the financial statements. The Company expects
the updated standard to impact only the financial statement disclosures with no impact on the Company’s results
of operations, cash flows and financial position.
ASU No. 2023-09 “Income Taxes” (Topic 740)
: In December 2023, the FASB issued ASU 2023-09, which
modifies the rules on income tax disclosures to require companies to disclose specific categories in the rate
reconciliation, the income or loss from continuing operations before income tax expense or benefit (separated
between domestic and foreign) and income tax expense or benefit from continuing operations (separated by
federal, state, and foreign). The updated standard is effective for annual periods beginning after December 15,
2024. The Company is currently evaluating the impact that the updated standard will have in its financial
statement disclosures.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
There have been no other recent accounting pronouncements not yet effective that have significance, or potential
significance, to 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 U.S., or U.S.
Operations, comprise
idled mine complex (Greenbrier) and
The Company operates its business along
the
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.
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 and nine months ended September 30, 2024 and 2023 are
presented below:
(in US$ thousands)
Australia
United
States
Other and
Corporate
Total
Three months ended September 30, 2024
Total revenues
$
$
$
$
Adjusted EBITDA
(51,978 )
(8,773 )
(19,123 )
Total assets
Capital expenditures
Three months ended September 30, 2023
Total revenues
$
$
$
$
Adjusted EBITDA
(32,353 )
(11,899 )
Total assets
Capital expenditures
Nine months ended September 30, 2024
Total revenues
$
$
$
$
Adjusted EBITDA
(25,417 )
Total assets
Capital expenditures
Nine months ended September 30, 2023
Total revenues
$
$
$
$
Adjusted EBITDA
(29,088 )
Total assets
Capital expenditures
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
The reconciliations of Adjusted EBITDA to net (loss) income attributable to the Company for the three and nine
months ended September 30, 2024 and 2023 are as follows:
Three months ended
Nine months ended
September 30,
September 30,
(in US$ thousands)
2024
2023
2024
2023
Net (loss) income
$
(70,997 )
$
(21,083 )
$
(54,798 )
$
Depreciation, depletion and amortization
Interest expense (net of interest income)
(1)
Income tax (benefit) expense
(31,771 )
(18,230 )
(28,482 )
Other foreign exchange gains
(2)
(7,859 )
(17,265 )
Loss on extinguishment of debt
Impairment of non-core assets
(3)
Losses on idled assets
(4)
Increase (decrease) in provision for
discounting and credit losses
(536 )
(157 )
(4,255 )
Consolidated Adjusted EBITDA
$
(19,123 )
$
$
$
(1)
million and $
(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)
property, plant and equipment relating to a long-standing non-core idled asset within the U.S. Operations. This impairment charge was
recognized based on a conditional purchase offer received and accepted by the Company and is included in “Other, net” on the unaudited
Consolidated Statement of Operations and Comprehensive Income. Satisfaction of conditions precedent and completion of a sale remains
uncertain and as such this idled asset remains classified as held and used as of September 30, 2024.
(4)
The reconciliations of capital expenditures per the Company’s segment information to capital expenditures
disclosed on the unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended
September 30, 2024 and 2023 are as follows:
Nine months ended September 30,
(in US$ thousands)
2024
2023
Capital expenditures per unaudited Condensed Consolidated Statements of
Cash Flows
$
$
Accruals for capital expenditures
Payment for capital acquired in prior periods
(10,790 )
(11,241 )
Net movement in deposits to acquire long lead capital
(4,695 )
(21,577 )
Capital expenditures per segment detail
$
$
Disaggregation of Revenue
The Company disaggregates the revenue from contracts with customers by major product group for each of the
Company’s reportable segments, as the Company believes it best depicts the nature, amount, timing and
uncertainty of revenues and cash flows. All revenue is recognized at a point in time.
Three months ended September 30, 2024
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
$
$
Thermal coal
Total coal revenue
Other
(1)
Total
$
$
$
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
Three months ended September 30, 2023
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
$
$
Thermal coal
Total coal revenue
Other
(1)
Total
$
$
$
Nine months ended September 30, 2024
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
$
$
Thermal coal
Total coal revenue
Other
(1)(2)
Total
$
$
$
Nine months ended September 30, 2023
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
$
$
Thermal coal
Total coal revenue
Other
(1)(2)
Total
$
$
$
(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 $
respectively, relating to termination fee revenue from coal sales contracts cancelled at our U.S. operations.
4. Inventories
(in US$ thousands)
September 30,
2024
December 31,
2023
Raw coal
$
$
Saleable coal
Total coal inventories
Supplies and other inventory
Total inventories
$
$
Coal inventories measured at its net realizable value were $
and 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. Other Assets
(in US$ thousands)
September 30,
2024
December 31,
2023
Other current assets
Prepayments
$
$
Long service leave receivable
Tax credits receivable
Deposits to acquire capital items
Short-term deposits
Other
Total other current assets
$
$
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.
6. Property, Plant and Equipment
(in US$ thousands)
September 30,
2024
December 31,
2023
Land
$
$
Buildings and improvements
Plant, machinery, mining equipment and transportation vehicles
Mineral rights and reserves
Office and computer equipment
Mine development
Asset retirement obligation asset
Construction in process
Total cost of property, plant and equipment
Less accumulated depreciation, depletion and amortization
Property, plant and equipment, net
$
$
7. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following:
(in US$ thousands)
September 30,
2024
December 31,
2023
Wages and employee benefits
$
$
Taxes other than income taxes
Accrued royalties
Accrued freight costs
Accrued mining fees
Acquisition related accruals
Other liabilities
Total accrued expenses and other current liabilities
$
$
Acquisition related accruals of $
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 information.
8. Leases
During the nine months ended September 30, 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 $
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
On April 1, 2024, the Company extinguished
used to provide mining services. On extinguishment, right-of-use assets of $
liabilities of $
On September 1, 2024, the Company modified
term. Upon modification, the Company recognized additional right-of-use assets and operating lease liabilities of
$
Information related to the Company’s right-of-use assets and related lease liabilities are as follows:
Three months ended
Nine months ended
(in US$ thousands)
September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
Operating lease costs
$
$
$
$
Cash paid for operating lease
liabilities
Finance lease costs:
Amortization of right-of-use assets
Interest on lease liabilities
Total finance lease costs
$
$
$
$
(in US$ thousands)
September 30,
2024
December 31,
2023
Operating leases:
Operating lease right-of-use assets
$
$
Finance leases:
Property and equipment
Accumulated depreciation
(371 )
(309 )
Property and equipment, net
Current operating lease obligations
Operating lease liabilities, less current portion
Total operating lease liabilities
Current finance lease obligations
Finance lease liabilities, less current portion
Total Finance lease liabilities
Current lease obligation
Non-current lease obligation
Total Lease liability
$
$
September 30,
2024
December 31,
2023
Weighted Average Remaining Lease Term (Years)
Weighted average remaining lease term – finance leases
-
Weighted average remaining lease term – operating leases
Weighted Average Discount Rate
Weighted discount rate – finance lease
Weighted discount rate – operating lease
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
The Company’s operating leases have remaining lease terms of
, some of which include
options to extend the terms where the Company deems it is reasonably certain the options will be exercised.
Maturities of lease liabilities as at September 30, 2024, are as follows:
(in US$ thousands)
Operating
Lease
Year ending December 31,
2024
$
2025
2026
2027
2028
Thereafter
Total lease payments
Less imputed interest
(13,142 )
Total lease liability
$
9. Interest Bearing Liabilities
The following is a summary of interest-bearing liabilities at September 30, 2024:
September 30, 2024
December 31, 2023
Weighted Average
Interest Rate at
September 30, 2024
Final
Maturity
10.750% Senior Secured Notes
$
$
%
(2)
ABL Facility
Loan - Curragh Housing Transaction
%
(2)
Discount and debt issuance costs
(1)
(6,207 )
(6,983 )
Total interest bearing liabilities
Less: current portion
Non-current interest-bearing liabilities
$
$
(1)
Relates to discount and debt issuance costs in connection with the Existing Notes and Curragh Housing Transaction loan (as defined
below). Deferred debt issuance costs incurred in connection with the establishment of the ABL Facility have been included within "Other
non-current assets" in the unaudited Condensed Consolidated Balance Sheet.
(2)
10.750% Senior Secured Notes
As of September 30, 2024, the Company’s aggregate principal amount of the
% Senior Secured Notes
due 2026, or the Existing Notes, outstanding was $
were senior secured obligations of the Company.
As of September 30, 2024, the Company was in compliance with all applicable covenants under the Existing
Notes Indenture.
The carrying value of debt issuance costs, recorded as a direct deduction from the face amount of the Existing
Notes, were $
On October 2, 2024, the Company completed a refinancing initiative (as explained below) and redeemed in full
all of the outstanding Existing Notes. The redemption price for the Existing Notes was $
to
% of the aggregate principal amount thereof, plus accrued and unpaid interest, to, but excluding the
repurchase date. In connection with the extinguishment of the Existing Notes, the Company recognized in the
fourth quarter of 2024 a loss on early extinguishment of debt of $
Refinance update – 9.250% Senior Secured Notes due in 2029
On October 2, 2024, the Company, entered into an indenture, or the Indenture among Coronado Finance Pty
Ltd, an Australian proprietary company and a wholly-owned subsidiary of the Company, which is referred to as
the Issuer or the Australian Borrower, the Company, the other guarantors party thereto, which are referred to,
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
collectively with the Company, as the Guarantors, and Wilmington Trust, National Association, as trustee, or the
Trustee, and as priority lien collateral trustee, relating to the issuance by the Issuer of $
principal amount of
% Senior Secured Notes due 2029, or the New Notes.
The New Notes were issued at par and bear interest at a rate of
% per annum. Interest on the New Notes
is payable semi-annually in arrears on April 1 and October 1 of each year, commencing April 1, 2025. The New
Notes mature on October 1, 2029 and are senior secured obligations of the Issuer.
The New 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 assets of the Company and each Guarantor (other than accounts receivable and certain other
rights to payment, inventory, certain investment property, certain general intangibles and commercial tort claims,
deposit accounts, securities accounts and other related assets, chattel paper, letter of credit rights, certain
insurance proceeds, intercompany indebtedness and certain other assets related to the foregoing and proceeds
and products of each of the foregoing, collectively, the “ABL Priority Collateral”, and other rights to payment,
inventory, intercompany indebtedness, certain general intangibles and commercial tort claims, commodities
accounts, securities accounts and other related assets and products of each of the foregoing, or, collectively, the
ABL Collateral), and (ii) a second priority lien on the ABL Priority Collateral, which is junior to a first-priority lien
for the benefit of the lenders and other creditors under the Company’s asset-based revolving credit facility, dated
as of May 8, 2023, or the ABL Facility, in each case, subject to certain exceptions and permitted liens.
The Company used the net proceeds from the New Notes to redeem all of the Company’s Existing Notes and to
pay related fees and expenses in connection with the offering of the New Notes and the redemption of the Existing
Notes, and the Company intends to use the remaining net proceeds for general corporate purposes.
The terms of the New 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.
Upon the occurrence of a “Change of Control”, as defined in the Indenture, the Issuer is required to make an offer
to repurchase the New Notes at
% of the aggregate principal amount thereof, plus accrued and unpaid
interest, if any, to, but excluding, the repurchase date. The Issuer also has the right to redeem the New Notes at
% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the
repurchase date, following the occurrence of a Change of Control, provided that the Issuer redeems at least
%
of the New Notes outstanding prior to such Change of Control. Upon the occurrence of certain changes in tax
law (as described in the Indenture), the Issuer may redeem any of the New Notes at a redemption price equal to
% of the principal amount of the New Notes to be redeemed plus accrued and unpaid interest, if any, to, but
excluding, the redemption date.
The Issuer may redeem any of the New Notes beginning on October 1, 2026. The initial redemption price of the
New Notes is
% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding the
redemption date. The redemption price will decline each year after October 1, 2026, and will be
% of the
principal amount of the New Notes, plus accrued and unpaid interest, beginning on October 1, 2028. The Issuer
may also redeem up to
% of the aggregate principal amount the New Notes on one or more occasions prior to
October 1, 2026 at a price equal to
% of the principal amount thereof plus a “make-whole” premium, plus
accrued and unpaid interest, if any, to, but excluding, the redemption date.
At any time and from time to time on or prior to October 1, 2026, the Issuer may redeem in the aggregate up to
% of the original aggregate principal amount of the New Notes (calculated after giving effect to any issuance
of additional New Notes) with the net cash proceeds of certain equity offerings, at a redemption price of
%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, so long as at least
% of the aggregate principal amount of the New Notes (calculated after giving effect to any issuance of
additional New Notes) issued under the Indenture remains outstanding after each such redemption and each
such redemption occurs within
The Indenture contains customary events of default, including failure to make required payments, failure to
comply with certain agreements or covenants, failure to pay or acceleration of certain other indebtedness, certain
events of bankruptcy and insolvency, and failure to pay certain judgments. An event of default under the Indenture
will allow either the Trustee or the holders of at least
% in aggregate principal amount of the then-outstanding
New Notes to accelerate, or in certain cases, will automatically cause the acceleration of, the amounts due under
the New Notes.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
Asset Based Revolving Credit Facility
On May 8, 2023, the Company entered into the ABL Facility.
The ABL Facility matures in August 2026 and provides for up to $
million sublimit for the issuance of letters of credit and $
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
% plus
Bank Bill Swap Bid Rate, or BBSY, for loans denominated in A$, or the Secured Overnight Finance Rate, or
SOFR, for loans denominated in US$, at the Company’ s election.
As at September 30, 2024, the letter of credit sublimit had been partially used to issue $
guarantees on behalf of the Company and
Facility.
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
covenant regarding maintenance of interest coverage ratio to be more than
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 September 30, 2024, the Company was in compliance with all applicable covenants under the ABL Facility.
Under the terms of the 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
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.
Loan – Curragh Housing Transaction
On May 16, 2024, the Company completed an agreement for accommodation services and the sale and
leaseback of housing and accommodation assets with a regional infrastructure and accommodation service
provider, or collectively, the Curragh Housing Transaction. Refer to Note 10. “Other Financial Liabilities” for further
information.
In connection with the Curragh Housing Transaction, the Company borrowed $
the same regional infrastructure and accommodation service provider. This amount was recorded as “Interest
Bearing Liabilities” in the unaudited Condensed Consolidated Balance Sheet. The amount borrowed is payable
in equal monthly installments over a period of
, with an effective interest rate of
%. The Curragh
Housing Transaction loan is not subject to any financial covenants.
The carrying value of the loan, net of issuance costs of $
$
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
10. Other Financial Liabilities
The following is a summary of other financial liabilities as at September 30, 2024:
September 30,
2024
December 31,
2023
Collateralized financial liabilities payable to third-party financing companies
$
$
Collateralized financial liabilities - Curragh Housing Transaction
Debt issuance costs
(1,150 )
(170 )
Total other financial liabilities
Less: current portion
Non-current other financial liabilities
$
$
Collateralized financial liabilities – Curragh Housing Transaction
The Curragh Housing Transaction did not satisfy the sale criteria under Accounting Standards Codification, or
ASC, 606 – Revenues from Contracts with Customers and was deemed a financing arrangement. As a result,
proceeds of $
owned by the Company in connection with the Curragh Housing Transaction were recognized as “Other Financial
Liabilities” on the Company’s unaudited Condensed Consolidated Balance Sheet. The term of the financing
arrangement is
%. This liability will be settled in equal monthly
payments as part of the accommodation services arrangement.
In line with the Company’s capital management strategy, the Curragh Housing Transaction provides additional
liquidity. In addition, the accommodation services component of the Curragh Housing Transaction is anticipated
to enhance the level of service for our employees at our Curragh Mine.
In connection with the Curragh Housing Transaction, the Company granted the counterparty mortgages over
certain leasehold and freehold land. The counterparty’s rights are subject to a priority deed in favor of the
Company’s senior secured parties including, but not limited to, holders of the New Notes, lenders under the ABL
Facility and Stanwell.
The carrying value of this financial liability, net of issuance costs of $
30, 2024, $
11. Income Taxes
The Company has historically calculated the provision for income taxes during interim reporting periods by
applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax
income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. The Company
has used an actual discrete geographical effective tax rate method to calculate taxes for the fiscal year three-
and nine-month periods ended September 30, 2024. The Company determined that since small changes in
estimated “ordinary” income would result in significant changes in the estimated annual effective tax rate, the
historical method would not provide a reliable estimate for the fiscal three- and nine-month periods ended
September 30, 2024. The Company had an income tax benefit of $
$
For the nine months ended September 30, 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.
Income tax expense of $
an estimated annual effective tax rate of
% for the period.
The Company utilizes the “more likely than not” standard in recognizing a tax benefit in its financial statements.
For the nine months ended September 30, 2024, the Company had
in tax 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 $
consistent with December 31, 2023.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
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 were calculated as follows (in thousands, except per share data):
Three months ended
September 30,
Nine months ended
September 30,
(in US$ thousands, except per share data)
2024
2023
2024
2023
Numerator:
Net (loss) income attributable to Company
stockholders
$
(70,997 )
$
(21,083 )
$
(54,798 )
$
Denominator (in thousands):
Weighted average shares of common stock
outstanding
Effects of dilutive shares
Weighted average diluted shares of common stock
outstanding
(Loss) Earnings Per Share (US$):
Basic
(0.42 )
(0.13 )
(0.33 )
Dilutive
(0.42 )
(0.13 )
(0.33 )
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
-for-1 basis.
13. Fair Value Measurement
The fair value of a financial instrument is the amount that will be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. The fair values of financial
instruments involve uncertainty and cannot be determined with precision.
The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of
unobservable inputs to the extent possible. The Company determines fair value based on assumptions that
market participants would use in pricing an asset or liability in the market. When considering market participant
assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and
unobservable inputs, which are categorized in one of the following levels:
Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the
reporting entity at the measurement date.
Level 2 Inputs: Other than quoted prices that are observable for the asset or liability, either directly or indirectly,
for substantially the full term of the asset or liability.
Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that
observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity
for the asset or liability at measurement date.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
Financial Instruments Measured on a Recurring Basis
As of September 30, 2024, there were
recurring basis.
Other Financial Instruments
The following methods and assumptions are used to estimate the fair value of other financial instruments as of
September 30, 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 September 30, 2024, there were
ABL Facility. The estimated fair value of the Existing Notes as of September 30, 2024 was approximately
$
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 September 30, 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
(3,004 )
Gains on long-term intra-entity foreign currency transactions
Total net current-period other comprehensive income
Balance at September 30, 2024
$
(87,677 )
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 and lease rental payments under these leases as of September 30, 2024 are
as follows:
(in US$ thousands)
Amount
Year ending December 31,
2024
$
2025
2026
2027
2028
Thereafter
Total
$
Mineral leases are not in scope of ASC 842 and continue to be accounted for under the guidance in ASC 932,
Extractive Activities – Mining.
(b) Other commitments
As of September 30, 2024, purchase commitments for capital expenditures were $
obligated within the next twelve months.
In Australia, the Company has generally secured the ability to transport coal through rail contracts and coal export
terminal contracts that are primarily funded through take-or-pay arrangements with terms ranging up to
.
In the U.S., the Company typically negotiates its rail and coal terminal access on an annual basis. As of
September 30, 2024, these Australian and U.S. commitments under take-or-pay arrangements totaled
$
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.
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 also uses surety bonds and bank letters of credit to
collateralize certain other obligations including contractual obligations under workers’ compensation insurances.
As of September 30, 2024, the Company had outstanding surety bonds of $
of credit issued from the letter of credit sublimit available under the ABL Facility.
For the Australian Operations, as at September 30, 2024, the Company had bank guarantees outstanding of
$
primarily in respect of certain rail and port take-or-pay arrangements of the Company.
As at September 30, 2024, the Company in aggregate had total outstanding bank guarantees provided of $
million to secure its obligations and commitments, including $
available under 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, the Company had total cash collateral in the form of deposits of $
and $
support for bank guarantees, other performance obligations, various other operating agreements and contractual
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
obligations under workers compensation insurance. These deposits are restricted and classified as “Non-current
assets” in the unaudited Condensed Consolidated Balance Sheets.
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.
As of September 30, 2024,
required.
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 $
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 $
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 $
interest of $
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. The outcome of the appeal remains uncertain.
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.
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 September 30, 2024, the related condensed consolidated statements of operations and
comprehensive income for the three and nine-month periods ended September 30, 2024 and 2023, the
condensed consolidated statements of stockholders’ equity for the three-month periods ended March 31, June
30 and September 30, 2024 and 2023, the condensed consolidated statements of cash flows for the nine-month
periods ended September 30, 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
November 12, 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
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 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 SEC and 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;
●
commodities, such 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.
●
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;
●
●
produced, cause delay or suspend 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
●
Factors,” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q.
Coronado Global Resources Inc.
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, and Part II, Item 1A. “Risk Factors” of our Quarterly Report
on Form 10-Q for the quarterly period ended June 30, 2024 filed with SEC and ASX on August 5, 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 (or net debt), which we define as cash and cash equivalents (excluding restricted cash) less outstanding
aggregate principal amount of the Existing Notes and other interest-bearing loans.
Coal revenues are shown in 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
not intended to serve as an alternative to U.S. GAAP measures of performance including total revenues, total
Coronado Global Resources Inc.
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.
About Coronado Global Resources Inc.
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.
Overview
Coronado faced challenges in the third quarter of 2024 that led to a decrease in both production and sales volume
compared to the second quarter of 2024. This decrease was largely driven by our Australian Operations that
were impacted by equipment failures and elevated rainfall for the period and resulted in production losses in the
third quarter. At our U.S. Operations, saleable production and sales volume increased during the third quarter of
2024, primarily driven by improved production yield as we progress through the southern panels at the Buchanan
mine and higher skip count and efficiencies compared to the second quarter of 2024. This improved production
was achieved despite delays in the planned longwall move and equipment breakdowns at the Buchanan mine
and adverse mining conditions at the Logan mine. Towards the end of September 2024, our Buchanan mine
mobilized an additional longwall in the northern section of the mine, which is expected to further improve
production yield given a higher yielding section of the mine.
Although production for third quarter of 2024 of 3.8Mt was 0.3Mt lower than the prior quarter, it remained
consistent with the same quarter in 2023.
Saleable production of 11.3 MMt for the nine months ended September 30, 2024, compared to 11.9 MMt for the
nine months ended September 30, 2023, primarily due to the above operational and geological issues that
significantly impacted production yield at Buchanan mine in the first half of 2024.
The coking coal market faced multiple disruptions in the third quarter of 2024 due to weakened steel demand
from China and delays in infrastructure spending and longer than expected monsoon season, which more than
offset the supply constraints due to higher than usual wet weather conditions in Queensland and the suspension
of production at Anglo American’s Grosvenor mine. China's stimulus measures announced in late September
2024 had a mixed impact on the coking coal market. While the announcement created a short-term boost in
market activity, it is uncertain as to whether this stimulus will significantly improve the demand for coking coal in
the short to medium term.
The Australian Premium Low Volatile Hard Coking Coal, or AUS PLV HCC, index price averaged $210.7 per Mt
for the three months ended September 30, 2024, $31.6 per Mt lower, compared to the three months ended June
30, 2024. The AUS PLV HCC index averaged $253.2 per Mt for the nine months ended September 30, 2024,
$30.4 per Mt lower, compared to the nine months ended September 30, 2023.
Coronado Global Resources Inc.
Coal revenues of $1,898.1 million for the nine months ended September 30, 2024, were down $265.0 million
compared to the same period in 2023, primarily driven by average Met realized price per Mt sold of $192.6, $28.9
per Mt sold lower than the 2023 period. Although saleable production was 0.6 MMt lower for the nine months
ended September 30, 2024, compared to the nine months ended September 30, 2023, sales volume of 11.7 MMt
remained consistent in both periods as we drew on coal stock built at port at the end of December 2023 due to
port constraints in Queensland.
Mining costs for the nine months ended September 30, 2024, were $75.8 million, or $5.5 per Mt sold, higher
compared to the corresponding period in 2023, driven by unplanned maintenance costs, continued inflationary
impacts on labor and supply costs and significant inventory drawdown at our Australian Operations due to higher
sales volumes exceeding saleable production in the 2024 period, partially offset by cost savings from demobilizing
contractor fleets in late March 2024 at our Australian Operations .
Refinancing update
On October 2, 2024, we successfully completed a refinancing initiative and issued $400.0 million aggregate
principal amount of the New Notes. The transaction provides Coronado increased financial flexibility by extending
our debt maturity profile and improved terms that we believe are more sustainable for our business.
The net proceeds from the transaction were used to redeem all outstanding principal amount of the Company’s
Existing Notes and to pay related fees and expenses in connection with New Notes and the redemption of the
Existing Notes, and we expect to use the remaining net proceeds for general corporate purposes.
Refer to Part I, Item 1, Note 9. “Interest Bearing Liabilities” for further information.
Dividends
On September 17, 2024, the Company settled its previously declared dividends of $8.4 million, which were paid
to stockholders from available cash.
Liquidity
Coronado had available liquidity of $326.1 million as of September 30, 2024, consisting of cash and cash
equivalents (excluding restricted cash), unrestricted short-term deposits of $22.0 million and $128.0 million of
availability under our ABL Facility. As of September 30, 2024, our net debt position was $93.9 million comprising
$270.0 million aggregate principal amount of interest-bearing liabilities outstanding less cash and cash
equivalents (excluding restricted cash) of $176.1 million.
Safety
For our Australian Operations, the twelve-month rolling average Total Reportable Injury Frequency Rate at
September 30, 2024 was 1.54,
compared to a rate of 1.83 at the end of December 31, 2023. At our U.S.
Operations, the twelve-month rolling average Total Reportable Incident Rate at September 30, 2024 was 2.41,
compared to a rate of 1.44 at the end of December 31, 2023. Reportable rates for our Australian Operations 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 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 September 30, 2024 Compared to Three Months Ended September 30, 2023
Summary
The financial and operational highlights for the three months ended September 30, 2024 include:
●
compared to $21.1 million for the three months ended September 30, 2023, which was largely due to
lower coal revenues as a result of lower average realized Met price and lower sales volume , partially
offset by lower operating costs.
●
$27.8 per Mt sold lower compared to average Met realized price per Mt sold of $207.4 for the same
period in 2023. Coking coal index prices continued to decline due weakened demand from key Met coal
markets such as China and India.
●
to the same period in 2023, largely due to lower production caused by above average rainfall in August
at our Australian Operations, equipment failure impacting both our Australian Operations and U.S.
Operations and adverse geological issues combined with sales slippage into October 2024 at our U.S.
Operations.
●
Adjusted EBITDA of $3.4 million for the three months ended September 30, 2023, largely due to lower
coal sales revenues, partially offset by lower operating costs.
●
$176.1 million cash and cash equivalents (excluding restricted cash), $22.0 million of unrestricted short-
term deposits and $128.0 million of availability under the ABL Facility.
Coronado Global Resources Inc.
Three months ended
September 30,
2024
2023
Change
%
(in US$ thousands)
Revenues:
Coal revenues
$
600,703
$
707,303
$
(106,600)
(15.1%)
Other revenues
7,512
10,527
(3,015)
(28.6%)
Total revenues
608,215
717,830
(109,615)
(15.3%)
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
466,113
501,471
(35,358)
(7.1%)
Depreciation, depletion and amortization
45,559
34,749
10,810
31.1%
Freight expenses
66,126
71,746
(5,620)
(7.8%)
Stanwell rebate
25,391
37,100
(11,709)
(31.6%)
Other royalties
63,020
92,700
(29,680)
(32.0%)
Selling, general, and administrative expenses
9,174
12,221
(3,047)
(24.9%)
Total costs and expenses
675,383
749,987
(74,604)
(9.9%)
Other income (expenses):
Interest expense, net
(15,808)
(14,496)
(1,312)
9.1%
Loss on debt extinguishment
—
(1,385)
1,385
(100.0%)
(Increase) decrease in provision for
discounting and credit losses
(43)
536
(579)
(108.0%)
Other, net
(19,749)
8,189
(27,938)
(341.2%)
Total other expenses, net
(35,600)
(7,156)
(28,444)
397.5%
Net loss before tax
(102,768)
(39,313)
(63,455)
161.4%
Income tax benefit
31,771
18,230
13,541
74.3%
Net loss attributable to Coronado Global
Resources, Inc.
$
(70,997)
$
(21,083)
$
(49,914)
236.7%
Coal Revenues
Coal revenues were $600.7 million for the three months ended September 30, 2024, $106.6 million lower,
compared to $707.3 million for the three months ended September 30, 2023. The decrease was a result of lower
average Met realized price per Mt sold of $179.6 the three months ended September 30, 2024, compared to
$207.4 per Mt sold for the same period in 2023 and lower sales volume of 0.2 MMt for the three months ended
September 30, 2024.
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 $466.1 million for the three months ended September 30, 2024, $35.4 million, or
7.1% lower, compared to $501.5 million for the three months ended September 30, 2023.
Our Australian Operations contributed to $20.4 million of the decrease in cost of coal revenues, primarily driven
by cost savings from the demobilization of four fleets in late March 2024, and a further fleet in July 2024, following
completion of the historical pre-strip waste deficit works, partially offset by higher overburden removal,
demonstrating improved equipment productivity, significant inventory drawdown due to lower saleable
production, higher maintenance costs following equipment failures and unfavorable average foreign exchange
rates on translation of the Australian Operations for the three months ended September 30, 2024, of A$/US$:
0.67 compared to 0.66 for the same period in 2023.
Cost of coal revenues for our U.S. Operations for the three months ended September 30, 2024, was $15.0 million
lower compared to the three months ended September 30, 2023, largely due to lower sales volume, and lower
coal purchases for the three months ended September 30, 2024, compared to the same period of 2023.
Coronado Global Resources Inc.
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization was $45.6 million for the three months ended September 30, 2024, an
increase of $10.8 million, compared to $34.7 million for the three months ended September 30, 2023. The
increase was due to additional equipment brought into service during the twelve months since September 30,
2023, and unfavorable average foreign exchange rates on translation of the Australian Operations.
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 $66.1 million for the three months
ended September 30, 2024, a decrease of $5.6 million, compared to $71.7 million for the three months ended
September 30, 2023, primarily driven by lower sales volume.
Stanwell Rebate
The Stanwell rebate was $25.4 million for the three months ended September 30, 2024, a decrease of $11.7
million, compared to $37.1 million for the three months ended September 30, 2023. The decrease was largely
driven by lower realized reference coal pricing for the prior twelve-month period applicable to three months ended
September 30, 2024, used to calculate the rebate compared to the same period in 2023, partially offset by
unfavorable foreign exchange rate on translation of our Australian Operations.
Other Royalties
Other royalties were $63.0 million in the three months ended September 30, 2024, a decrease of $29.7 million
compared to $92.7 million for the three months ended September 30, 2023 due to lower coal revenues partially
offset by unfavorable foreign exchange rate on translation of our Australian Operations.
Other, net
Other, net was at a loss of $19.7 million for the three months ended September 30, 2024, a decrease of $27.9
million compared to an income of $8.2 million for the three months ended September 30, 2023. During the three
months ended September 30, 2024, the Company recognized an impairment charge of $10.6 million against
property, plant and equipment relating to a long-standing non-core idled asset within its U.S. Operations. This
impairment charge was recognized based on a conditional purchase offer received and accepted by the
Company. The remaining decrease is largely attributable to the higher foreign exchange losses on translation of
short-term inter-entity balances between certain entities within the group that are denominated in currencies other
than their respective functional currencies.
Income Tax Benefit
Income tax benefit was $31.8 million for the three months ended September 30, 2024, an increase of $13.5
million, compared to $18.2 million for the three months ended September 30, 2023, driven by a higher loss before
tax in the 2024 period.
We have historically calculated the provision for income taxes during interim reporting periods by applying an
estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss
excluding unusual or infrequently occurring discrete items) for the reporting period. We have used an actual
discrete geographical effective tax rate method to calculate taxes for the three-month period ended September
30, 2024. We determined that since small changes in estimated “ordinary” income would result in significant
changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate for
the three months ended September 30, 2024.
Coronado Global Resources Inc.
Nine months ended September 30, 2024 compared to Nine months ended September 30, 2023
Summary
The financial and operational highlights for the nine months ended September 30, 2024 include:
●
compared to a net income of $178.1 million for the nine months ended September 30, 2023. The
decrease was a result of lower coal revenues partially offset by lower operating costs and an income tax
benefit compared to an income tax expense in the comparative period.
●
$28.9 per Mt sold lower compared to $221.5 per Mt sold for the nine months ended September 30, 2023.
The AUS PLV HCC index averaged $253.2 per Mt for the nine months ended September 30, 2024, $30.4
per Mt lower compared to the nine months ended September 30, 2023. The downward trend was a result
of reduced supply from adverse weather conditions and operational disruptions out of Australia and
weaker demand from key markets like China and India .
●
nine months ended September 30, 2023 despite saleable production being 0.6 MMt lower, as our
operations drew on significant coal inventory built in December 2023, which was a result of shipping
delays caused by our port infrastructure provider in Australia.
●
lower compared to $355.7 million for the nine months ended September 30, 2023. This decrease was
primarily due to lower coal revenues.
●
cash equivalents (excluding restricted cash) of $176.1 million and $270.0 million aggregate principal
amount outstanding of interest-bearing liabilities.
Nine months ended
September 30,
2024
2023
Change
%
(in US$ thousands)
Revenues:
Coal revenues
$
1,898,075
$
2,163,093
$
(265,018)
(12.3%)
Other revenues
52,117
47,977
4,140
8.6%
Total revenues
1,950,192
2,211,070
(260,878)
(11.8%)
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
1,311,377
1,262,907
48,470
3.8%
Depreciation, depletion and amortization
142,171
113,052
29,119
25.8%
Freight expenses
183,652
192,542
(8,890)
(4.6%)
Stanwell rebate
83,293
105,357
(22,064)
(20.9%)
Other royalties
235,605
268,606
(33,001)
(12.3%)
Selling, general, and administrative expenses
26,635
29,976
(3,341)
(11.1%)
Total costs and expenses
1,982,733
1,972,440
10,293
0.5%
Other income (expenses):
Interest expense, net
(42,253)
(43,341)
1,088
(2.5%)
Loss on debt extinguishment
—
(1,385)
1,385
(100.0%)
Decrease in provision for discounting and
credit losses
157
4,255
(4,098)
(96.3%)
Other, net
(8,643)
17,704
(26,347)
(148.8%)
Total other expenses, net
(50,739)
(22,767)
(27,972)
122.9%
Net (loss) income before tax
(83,280)
215,863
(299,143)
(138.6%)
Income tax benefit (expense)
28,482
(37,775)
66,257
(175.4%)
Net (loss) income attributable to Coronado Global
Resources, Inc.
$
(54,798)
$
178,088
$
(232,886)
(130.8%)
Coronado Global Resources Inc.
Coal Revenues
Coal revenues were $1,898.1 million for the nine months ended September 30, 2024, a decrease of $265.0
million, compared to $2,163.1 million for the nine months ended September 30, 2023. The decrease was driven
by lower average Met realized per Mt sold price of $192.6 compared to $221.5 per Mt sold for the nine months
ended September 30, 2023, due to unfavorable market conditions causing decline in coking coal index prices.
Sales volume for the nine months ended September 30, 2024 was consistent to the same period in 2023.
Other Revenues
Other revenues were $52.1 million for the nine months ended September 30, 2024, an increase of $4.1 million
compared to $48.0 million for the nine months ended September 30, 2023. This increase was primarily driven by
higher termination fee revenue from a coal sales contract cancelled in the first quarter of 2024 at our U.S.
Operations.
Cost of Coal Revenues (Exclusive of Items Shown Separately Below)
Total cost of coal revenues was $1,311.4 million for the nine months ended September 30, 2024, an increase of
$48.5 million, compared to $1,262.9 million for the nine months ended September 30, 2023.
Cost of coal revenues for our Australian Operations in the nine months ended September 30, 2024, were $52.8
million higher compared to the same period in 2023. The increase was primarily driven by coal inventory draw
down from sales volume exceeding production in the nine months ended September 30, 2024, compared to coal
inventory built in the 2023 period, impact of inflation on supply costs and higher maintenance costs due to mining
equipment operating at higher capacity. This increase was partially offset by demobilization of four fleets in late
March 2024 following completion of the historical pre-strip waste deficit works, demobilization of an additional
fleet in the third quarter of 2024 and favorable foreign exchange rate on translation of our Australian Operations
for the nine months ended September 30, 2024, of A$/US$: 0.66 compared to 0.67 for the same period in 2023.
Cost of coal revenues for our U.S. Operations were $4.3 million lower for the nine months ended September 30,
2024, compared to the same period in 2023, largely due to lower coal purchases partially offset by unplanned
maintenance costs due to certain mechanical and equipment failures during the nine months ended September
30, 2024.
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization was $142.2 million for the nine months ended September 30, 2024, an
increase of $29.1 million, as compared to $113.1 million for the nine months ended September 30, 2023. The
increase was due to additional equipment brought into service during the twelve months since September 30,
2023, partially offset by favorable average foreign exchange rates on translation of the Australian Operations.
Freight Expenses
Freight expenses totaled $183.7 million for the nine months ended September 30, 2024, a decrease of $8.9
million compared to $192.5 million for the nine months ended September 30, 2023. Our Australian Operations
contributed $8.0 million to the decrease due to higher demurrage as a result of shipping delays during the nine
months ended September 30, 2023.
Stanwell Rebate
The Stanwell rebate was $83.3 million for the nine months ended September 30, 2024, a decrease of $22.1
million compared to $105.4 million for the nine months ended September 30, 2023. The decrease was due to
lower export sales volume and lower realized reference coal pricing for the prior twelve-month period applicable
to the nine months ended September 30, 2024, used to calculate the rebate compared to the same period in
2023 and favorable average foreign exchange rates on translation of the Australian Operations.
Other Royalties
Other royalties were $235.6 million for the nine months ended September 30, 2024, a decrease of $33.0 million,
as compared to $268.6 million for the nine months ended September 30, 2023 due to lower coal revenues
combined with favorable average exchange rates on translation of the Australian Operations.
Coronado Global Resources Inc.
Other, net
Other, net was at a loss of $8.6 million for the nine months ended September 30, 2024, a decrease of $26.3
million compared to an income of $17.7 million for the nine months ended September 30, 2023. During the nine
months ended September 30, 2024, the Company recognized an impairment charge of $10.6 million against
property, plant and equipment relating to a long-standing non-core idled asset within its U.S. Operations. This
impairment charge was recognized based on a conditional purchase offer received and accepted by the
Company. This was partially offset by lower exchange losses on translation of short-term inter-entity balances
between certain entities within the group that are denominated in currencies other than their respective functional
currencies.
Income Tax Benefit (Expense)
Income tax benefit of $28.5 million for the nine months ended September 30, 2024, decreased by $66.3 million,
compared to $37.8 million tax expense for the nine months ended September 30, 2023, primarily driven by net
loss position in the 2024 period.
We have historically calculated the provision for income taxes during interim reporting periods by applying an
estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss
excluding unusual or infrequently occurring discrete items) for the reporting period. We have used an actual
discrete geographical effective tax rate method to calculate taxes for the nine-month period ended September
30, 2024. We determined that since small changes in estimated “ordinary” income would result in significant
changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate for
the nine months ended September 30, 2024.
Supplemental Segment Financial Data
Three months ended September 30, 2024 compared to three months ended September 30, 2023
Australia
Three months ended
September 30,
2024
2023
Change
%
(in US$ thousands)
Sales volume (MMt)
2.4
2.6
(0.2)
(6.9)%
Total revenues ($)
365,953
455,774
(89,821)
(19.7)%
Coal revenues ($)
358,652
446,815
(88,163)
(19.7)%
Average realized price per Mt sold ($/Mt)
148.6
172.3
(23.7)
(13.8)%
Met coal sales volume (MMt)
1.7
1.8
(0.1)
(2.7)%
Met coal revenues ($)
334,594
419,032
(84,438)
(20.2)%
Average realized Met price per Mt sold ($/Mt)
193.8
236.2
(42.4)
(18.0)%
Mining costs ($)
290,121
310,727
(20,606)
(6.6)%
Mining cost per Mt sold ($/Mt)
122.8
121.7
1.1
0.9%
Operating costs ($)
418,335
487,864
(69,529)
(14.3)%
Operating costs per Mt sold ($/Mt)
173.3
188.2
(14.9)
(7.9)%
Segment Adjusted EBITDA ($)
(51,978)
(32,353)
(19,625)
60.7%
Coal revenues for our Australian Operations, for the three months ended September 30, 2024, were $358.7
million, a decrease of $88.2 million, or 19.7%, compared to $446.8 million for the three months ended September
30, 2023. This decrease was largely driven by lower average realized Met price per Mt sold of $23.7 driven by
unfavorable coal market conditions causing the decline in coal index prices and sales volume being 0.2 MMt
lower compared to the three months ended September 30, 2023, due to operational issues and elevated rainfall
conditions impacting production.
Operating costs of $418.3 million for the three months ended September 30, 2024, were $69.5 million lower
compared to $487.9 million for the three months ended September 30, 2023. The decrease was largely driven
by lower mining costs, freight expenses and the Stanwell rebate. Lower mining costs were primarily attributed to
demobilization of four fleets in late March 2024 and a further fleet in July 2024 following completion of historical
pre-strip waste deficit works partially offset by higher overburden removal, demonstrating improved equipment
productivity, significant inventory drawdown due to lower saleable production and unfavorable average foreign
exchange rates on translation of the Australian Operations. Operating costs per Mt sold for the three months
Coronado Global Resources Inc.
ended September 30, 2024, decreased by $14.9 to $173.3 per Mt sold compared to the three months ended
September 30, 2023.
Segment Adjusted EBITDA loss of $52.0 million for the three months ended September 30, 2024, was $19.6
million, or 60.7%, higher compared to $32.4 million for the three months ended September 30, 2023, largely
driven by lower coal revenues, partially offset by lower operating costs.
United States
Three months ended
September 30,
2024
2023
Change
%
(in US$ thousands)
Sales volume (MMt)
1.5
1.5
—
0.4%
Total revenues ($)
242,262
262,056
(19,794)
(7.6)%
Coal revenues ($)
242,051
260,488
(18,437)
(7.1)%
Average realized price per Mt sold ($/Mt)
159.8
172.6
(12.8)
(7.4)%
Met coal sales volume (MMt)
1.5
1.4
0.1
6.4%
Met coal revenues ($)
237,101
232,870
4,231
1.8%
Average realized Met price per Mt sold ($/Mt)
162.8
170.2
(7.4)
(4.3)%
Mining costs ($)
166,210
175,883
(9,673)
(5.5)%
Mining cost per Mt sold ($/Mt)
109.7
119.3
(9.6)
(8.0)%
Operating costs ($)
202,315
215,153
(12,838)
(6.0)%
Operating costs per Mt sold ($/Mt)
133.6
142.6
(9.0)
(6.3)%
Segment Adjusted EBITDA ($)
41,628
47,630
(6,002)
(12.6)%
Coal revenues decreased by $18.4 million, or 7.1%, to $242.1 million for the three months ended September 30,
2024, compared to $260.5 million for the three months ended September 30, 2023. This decrease was primarily
driven by lower average realized Met price per Mt sold of $162.8 for the three months ended September 30,
2024, $7.4 per Mt sold lower than the 2023 period. Lower average realized Met price per Mt sold was primarily
attributed to weakened demand from key export Met coal markets for our U.S. Operations such as China and
India.
Operating costs decreased by $12.8 million to $202.3 million for the three months ended September 30, 2024,
compared to the three months ended September 30, 2023, driven by lower mining costs. The decrease in mining
costs was primarily driven by higher coal inventory build in the quarter due to higher saleable production
compared to the same period of 2023, partially offset by unplanned maintenance costs. Mining and operating
costs per Mt sold for the three months ended September 30, 2024, decreased by $9.6 per Mt sold and $9.0 per
Mt sold, respectively, compared to the three months ended September 30, 2023.
Segment Adjusted EBITDA of $41.6 million for the three months ended September 30, 2024, decreased by $6.0
million compared to $47.6 million for the three months ended September 30, 2023, primarily driven by lower coal
revenues, partially offset by lower operating costs.
Corporate and Other Adjusted EBITDA
The following table presents a summary of the components of Corporate and Other Adjusted EBITDA:
Three months ended
September 30,
2024
2023
Change
%
(in US$ thousands)
Selling, general, and administrative expenses
$
9,174
$
12,221
$
(3,047)
(24.9)%
Other, net
(401)
(322)
(79)
24.5%
Total Corporate and Other Adjusted EBITDA
$
8,773
$
11,899
$
(3,126)
(26.3)%
Corporate and other costs of $8.8 million for the three months ended September 30, 2024, were $3.1 million
lower compared to $11.9 million for the three months ended September 30, 2023, due to certain corporate
activities incurred in the 2023 period.
Coronado Global Resources Inc.
Mining and operating costs for the three months ended September 30, 2024 compared to three
months ended September 30, 2023
A reconciliation of segment costs and expenses, segment operating costs, and segment mining costs is shown
below:
Three months ended September 30, 2024
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and expenses
$
438,184
$
227,466
$
9,733
$
675,383
Less: Selling, general and administrative
expense
(12)
—
(9,162)
(9,174)
Less: Depreciation, depletion and amortization
(19,837)
(25,151)
(571)
(45,559)
Total operating costs
418,335
202,315
—
620,650
Less: Other royalties
(51,567)
(11,453)
—
(63,020)
Less: Stanwell rebate
(25,391)
—
—
(25,391)
Less: Freight expenses
(41,474)
(24,652)
—
(66,126)
Less: Other non-mining costs
(9,782)
—
—
(9,782)
Total mining costs
290,121
166,210
—
456,331
Sales Volume excluding non-produced coal
(MMt)
2.4
1.5
—
3.9
Mining cost per Mt sold ($/Mt)
122.8
109.7
—
117.7
Three months ended September 30, 2023
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and expenses
$
501,021
$
236,478
$
12,488
$
749,987
Less: Selling, general and administrative
expense
—
—
(12,221)
(12,221)
Less: Depreciation, depletion and amortization
(13,157)
(21,325)
(267)
(34,749)
Total operating costs
487,864
215,153
—
703,017
Less: Other royalties
(80,726)
(11,974)
—
(92,700)
Less: Stanwell rebate
(37,100)
—
—
(37,100)
Less: Freight expenses
(49,712)
(22,034)
—
(71,746)
Less: Other non-mining costs
(9,599)
(5,262)
—
(14,861)
Total mining costs
310,727
175,883
—
486,610
Sales Volume excluding non-produced coal
(MMt)
2.6
1.5
—
4.0
Mining cost per Mt sold ($/Mt)
121.7
119.3
—
120.8
Average realized Met price per Mt sold for the three months ended September 30, 2024 compared to
three months ended September 30, 2023
A reconciliation of the Company’s average realized Met price per Mt sold is shown below:
Three months ended
September 30,
2024
2023
Change
%
(in US$ thousands)
Met coal sales volume (MMt)
3.2
3.1
0.1
1.3%
Met coal revenues ($)
571,695
651,902
(80,207)
(12.3)%
Average realized Met price per Mt sold ($/Mt)
179.6
207.4
(27.8)
(13.4)%
Coronado Global Resources Inc.
Nine months ended September 30, 2024 compared to Nine months ended September 30, 2023
Australia
Nine months ended
September 30,
2024
2023
Change
%
(in US$ thousands)
Sales volume (MMt)
7.6
7.2
0.4
5.3%
Total revenues ($)
1,260,549
1,286,242
(25,693)
(2.0)%
Coal revenues ($)
1,235,746
1,260,741
(24,995)
(2.0)%
Average realized price per Mt sold ($/Mt)
162.0
174.0
(12.0)
(6.9)%
Met coal sales volume (MMt)
5.5
5.0
0.5
10.2%
Met coal revenues ($)
1,172,404
1,195,413
(23,009)
(1.9)%
Average realized Met price per Mt sold ($/Mt)
212.2
238.5
(26.3)
(11.0)%
Mining costs ($)
826,880
772,561
54,319
7.0%
Mining cost per Mt sold ($/Mt)
109.6
107.8
1.8
1.6%
Operating costs ($)
1,245,737
1,249,490
(3,753)
(0.3)%
Operating costs per Mt sold ($/Mt)
163.3
172.5
(9.2)
(5.3)%
Segment Adjusted EBITDA ($)
16,377
35,580
(19,203)
(54.0)%
Coal revenues for our Australian Operations for the nine months ended September 30, 2024, were $1,235.7
million, a decrease of $25.0 million, or 2.0%, compared to $1,260.7 million for the nine months ended September
30, 2023. The decrease was driven by lower average realized Met price per Mt sold of $212.2, $26.3 per Mt lower
compared to $238.5 per Mt sold for the nine months ended September 30, 2023, partially offset by higher sales
volume for the nine months ended September 30, 2024, that, despite lower saleable production, were 0.4 MMt
higher than the same period in 2023, as the Company drew on port inventory built at the end of December 2023.
Mining costs were $54.3 million higher for the nine months ended September 30, 2024, primarily driven by coal
inventory draw down, as higher sales volume exceeded lower production when compared to the prior comparative
period, and higher maintenance and electricity costs, partially offset by cost savings from the demobilization of
four fleets in March 2024 and another fleet in July 2024 following completion of historical pre-strip deficit works
and favorable foreign exchange rate on translation of our Australian Operations for the nine months ended
September 30, 2024 compared to the same period in 2023. Operating costs decreased by $3.8 million driven by
lower Stanwell rebates, freight expenses and other royalties offset by higher mining costs for the nine months
ended September 30, 2024. Mining costs per Mt sold were $1.8 higher while operating costs per Mt sold were
$9.2 lower compared to the nine months ended September 30, 2023.
Adjusted EBITDA for the nine months ended September 30, 2024, of $16.4 million decreased by $19.2 million,
or 54.0%, for the nine months ended September 30, 2023, compared to $35.6 million for the nine months ended
September 30, 2023 due to lower coal revenues, partially offset by lower operating costs.
United States
Nine months ended
September 30,
2024
2023
Change
%
(in US$ thousands)
Sales volume (MMt)
4.1
4.5
(0.4)
(8.7)%
Total revenues ($)
689,643
924,828
(235,185)
(25.4)%
Coal revenues ($)
662,329
902,352
(240,023)
(26.6)%
Average realized price per Mt sold ($/Mt)
161.8
201.2
(39.4)
(19.9)%
Met coal sales volume (MMt)
3.9
3.9
—
0.3%
Met coal revenues ($)
640,488
773,184
(132,696)
(17.2)%
Average realized Met price per Mt sold ($/Mt)
164.8
199.5
(34.7)
(17.7)%
Mining costs ($)
459,316
437,860
21,456
4.9%
Mining cost per Mt sold ($/Mt)
113.7
101.6
12.1
11.7%
Operating costs ($)
568,190
579,922
(11,732)
(2.0)%
Operating costs per Mt sold ($/Mt)
138.8
129.3
9.5
6.9%
Segment Adjusted EBITDA ($)
125,322
349,160
(223,838)
(64.1)%
Coal revenues decreased by $240.0 million, or 26.6%, to $662.3 million for the nine months ended September
30, 2024, compared to $902.3 million for the nine months ended September 30, 2023. This decrease was driven
Coronado Global Resources Inc.
by lower average realized Met price per Mt sold of $164.8 for the nine months ended September 30, 2024
compared to $199.5 per Mt sold for the same period in 2023 exacerbated by sales volume 0.4 MMt lower due to
lower production which was caused by operational and geological issues resulting in production downtime and
lower production yield.
Operating costs of $568.2 million for the nine months ended September 30, 2024, were $11.7 million lower
compared to $579.9 million for the same period in 2023, driven by lower coal purchases, freight expenses and
other royalties, partially offset by higher mining costs. Mining costs were $21.5 million, or $12.1 per Mt sold,
higher for the nine months ended September 30, 2024, due to unplanned maintenance costs following equipment
failures, and impact of inflation on labor and supply costs. Operating costs increased by $9.5 per Mt sold despite
decrease of operating costs due to lower sales volume during the nine months ended September 30, 2024.
Adjusted EBITDA of $125.3 million decreased by $223.8 million, or 64.1%, for the nine months ended September
30, 2024, compared to $349.2 million for the nine months ended September 30, 2023. This decrease was
primarily driven by lower coal revenues.
Corporate and Other Adjusted EBITDA
The following table presents a summary of the components of Corporate and Other Adjusted EBITDA:
Nine months ended
September 30,
2024
2023
Change
%
(in US$ thousands)
Selling, general, and administrative expenses
$
26,635
$
29,976
$
(3,341)
(11.1)%
Other, net
(1,218)
(888)
(330)
37.2%
Total Corporate and Other Adjusted EBITDA
$
25,417
$
29,088
$
(3,671)
(12.6)%
Corporate and other costs of $25.4 million for the nine months ended September 30, 2024, were $3.7 million
lower compared to $29.1 million for the nine months ended September 30, 2023, due to certain corporate
activities incurred in the 2023 period.
Coronado Global Resources Inc.
Mining and operating costs for the Nine months ended September 30, 2024 compared to Nine months
ended September 30, 2023
A reconciliation of segment costs and expenses, segment operating costs, and segment mining costs is shown
below:
Nine months ended September 30, 2024
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and expenses
$
1,312,432
$
642,548
$
27,753
$
1,982,733
Less: Selling, general and administrative
expense
(47)
—
(26,588)
(26,635)
Less: Depreciation, depletion and amortization
(66,648)
(74,358)
(1,165)
(142,171)
Total operating costs
1,245,737
568,190
—
1,813,927
Less: Other royalties
(205,018)
(30,587)
—
(235,605)
Less: Stanwell rebate
(83,293)
—
—
(83,293)
Less: Freight expenses
(112,736)
(70,916)
—
(183,652)
Less: Other non-mining costs
(17,810)
(7,371)
—
(25,181)
Total mining costs
826,880
459,316
—
1,286,196
Sales Volume excluding non-produced coal
(MMt)
7.5
4.0
—
11.6
Mining cost per Mt sold ($/Mt)
109.6
113.7
—
111.0
Nine months ended September 30, 2023
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and expenses
$
1,297,492
$
644,168
$
30,780
$
1,972,440
Less: Selling, general and administrative
expense
—
—
(29,976)
(29,976)
Less: Depreciation, depletion and amortization
(48,002)
(64,246)
(804)
(113,052)
Total operating costs
1,249,490
579,922
—
1,829,412
Less: Other royalties
(231,443)
(37,163)
—
(268,606)
Less: Stanwell rebate
(105,357)
—
—
(105,357)
Less: Freight expenses
(120,747)
(71,795)
—
(192,542)
Less: Other non-mining costs
(19,382)
(33,104)
—
(52,486)
Total mining costs
772,561
437,860
—
1,210,421
Sales Volume excluding non-produced coal
(MMt)
7.2
4.3
—
11.5
Mining cost per Mt sold ($/Mt)
107.8
101.6
—
105.5
Average realized Met price per Mt sold for the Nine months ended September 30, 2024 compared to
Nine months ended September 30, 2023
A reconciliation of the Company’s average realized Met price per Mt sold is shown below:
Nine months ended
September 30,
2024
2023
Change
%
(in US$ thousands)
Met coal sales volume (MMt)
9.4
8.9
0.5
5.9%
Met coal revenues ($)
1,812,892
1,968,597
(155,705)
(7.9)%
Average realized Met price per Mt sold ($/Mt)
192.6
221.5
(28.9)
(13.0)%
Coronado Global Resources Inc.
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA
Three months ended
September 30,
Nine months ended
September 30,
(in US$ thousands)
2024
2023
2024
2023
Reconciliation to Adjusted EBITDA:
Net (loss) income
$
(70,997)
$
(21,083)
$
(54,798)
$
178,088
Add: Depreciation, depletion and amortization
45,559
34,749
142,171
113,052
Add: Interest expense (net of interest income)
15,808
14,496
42,253
43,341
Add: Other foreign exchange losses (gains)
10,190
(7,859)
1,086
(17,265)
Add: Loss on extinguishment of debt
—
1,385
—
1,385
Add: Income tax (benefit) expense
(31,771)
(18,230)
(28,482)
37,775
Add: Impairment of non-core assets
10,585
—
10,585
—
Add: Losses on idled assets
1,460
456
3,624
3,531
Add: Increase (decrease) in provision for
discounting and credit losses
43
(536)
(157)
(4,255)
Adjusted EBITDA
$
(19,123)
$
3,378
$
116,282
$
355,652
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 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.
Our ability to generate sufficient cash depends on our future performance, which may be subject to a number of
factors beyond our control, including general economic, financial and competitive conditions and other risks
described in this document, Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended
December 31, 2023, filed with the SEC and ASX on February 20, 2024 and Part II, Item 1A. “Risk Factors” of our
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2024 filed with SEC and ASX on August
5, 2024.
Liquidity as of September 30, 2024 and December 31, 2023 was as follows:
(in US$ thousands)
September 30,
2024
December 31,
2023
Cash and cash equivalents, excluding restricted cash
$
176,097
$
339,043
Short-term deposits
21,976
21,906
Availability under the ABL Facility
(1)
128,024
128,094
Total
$
326,097
$
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 $22.0 million has been issued as of September 30, 2024, and a $70.0 million sublimit as a revolving
credit facility. The letter of credit sublimit contributes to our liquidity as the Company has the ability to replace cash collateral,
provided in the form of restricted deposits, with letters of credit allowing the release of such restricted deposits to cash and
cash equivalents.
Coronado Global Resources Inc.
Our total indebtedness as of September 30, 2024 and December 31, 2023 consisted of the following:
(in US$ thousands)
September 30,
2024
December 31,
2023
Current installments of interest bearing liabilities
$
1,598
$
—
Interest bearing liabilities, excluding current installments
268,391
242,326
Current installments of other financial liabilities
4,495
2,893
Other financial liabilities, excluding current installments
25,416
5,307
Total
$
299,900
$
250,526
Liquidity
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 September 30, 2024, the outstanding principal amount of our Existing Notes was $242.3 million. As of
September 30, 2024, the Existing Notes were senior secured obligations of the Company.
As of September 30, 2024, we were in compliance with all applicable covenants under the Existing Notes
Indenture.
9.250% Senior Secured Notes - Refinance update
On October 2, 2024, we successfully completed a refinancing initiative and issued $400.0 million aggregate
principal amount of 9.250% Senior Secured Notes due 2029 issued at par. The transaction provides the Company
increased financial flexibility by extending our debt maturity profile and introducing terms that we believe are more
sustainable for our business.
The net proceeds from the transaction were used to redeem all outstanding principal amount of the Company’s
Existing Notes and pay related fees and expenses in connection with New Notes and the redemption of the or
the Existing Notes, and we expect to use the remaining net proceeds for general and corporate purposes.
The New 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) the ABL Collateral,
and (ii) a second priority lien on the ABL Priority Collateral, which is junior to a first-priority lien for the benefit of
the lenders and other creditors under the ABL Facility, in each case, subject to certain exceptions and permitted
liens.
The terms of the New 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.
Refer to Part I, Item 1, Note 9. “Interest Bearing Liabilities ” for further information.
We may redeem some or all of the New Notes at the redemption prices and on the terms specified in the
Indenture. In addition, we may, from time to time, seek to retire or repurchase outstanding debt through open-
market purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will be upon such
terms and at such prices we may determine, and will depend on prevailing market conditions, liquidity
requirements, contractual restrictions and other factors.
Loan – Curragh Housing Transaction
On May 16, 2024, the Company completed the Curragh Housing Transaction, an agreement for accommodation
services and the sale and leaseback of housing and accommodation assets with a regional infrastructure and
accommodation service provider.
Coronado Global Resources Inc.
The Curragh Housing Transaction did not satisfy the sale criteria under ASC 606, Revenues from Contracts with
Customers and was deemed a financing arrangement. As a result, the proceeds of $23.0 million (A$34.6 million)
received for the sale and leaseback of property, plant and equipment owned by the Company in connection with
the Curragh Housing Transaction were recognized as “Other Financial Liabilities” on the Company’s unaudited
Condensed Consolidated Balance Sheet. The term of the financing arrangement is ten years with an effective
interest rate of 14.14%. This liability will be settled in equal monthly payments as part of the accommodation
service arrangement.
In line with the Company’s capital management strategy, the Curragh Housing Transaction provides additional
liquidity. In addition, the accommodation services component of the Curragh Housing Transaction is anticipated
to enhance the level of service for our employees at our Curragh Mine.
In connection with the Curragh Housing Transaction, the Company borrowed $26.9 million (A$40.4 million) from
the same regional infrastructure and accommodation service provider. This amount was recorded as “Interest
Bearing Liabilities” in the unaudited Condensed Consolidated Balance Sheet. The amount borrowed is payable
in equal monthly installments over a period of ten years, with an effective interest rate of 14.14%.
Refer to Part I, Item I. Financial Statements, Note 9. “Interest Bearing Liabilities” and Note 10. “Other Financial
Liabilities” for further information.
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 $70.0 million sublimit as a revolving credit facility.
Availability under the ABL Facility is limited to an eligible borrowing base, determined by applying customary
advance rates to eligible accounts receivable and inventory.
Borrowings under the ABL Facility bear interest at a rate per annum equal to applicable rate of 2.80% and the
BBSY, for loans denominated in A$, 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.
As at September 30, 2024, letter of credit sublimit had been partially used to issue $22.0 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 the ABL Facility. As at September 30, 2024, the Company was in compliance
with all applicable covenants under the ABL Facility. Refer to Part I, Item I. Financial Statements, Note 9. “Interest
Bearing Liabilities” for further information.
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 also use surety bonds and bank letters of credit to collateralize certain other
obligations including contractual obligations under workers’ compensation insurances. As of September 30, 2024,
we had outstanding surety bonds of $48.9 million and $16.8 million of letters of credit issued from our letter of
credit sublimit available under the ABL Facility.
For the Australian Operations, as at September 30, 2024, we had bank guarantees outstanding of $24.5 million,
including $5.2 million issued from the letter of credit sublimit available under the ABL Facility, primarily in respect
of certain rail and port take-or-pay arrangements of the Company.
As at September 30, 2024, we have in aggregate had total outstanding bank guarantees provided of $41.3 million
to secure its obligations and commitments, including $22.0 million issued for the letter of credit sublimit available
under the ABL Facility.
Future regulatory changes relating to these obligations could result in increased obligations, additional costs or
additional collateral requirements.
Coronado Global Resources Inc.
Restricted deposits – cash collateral
As required by certain agreements, we have total cash collateral in the form of deposits of $68.6 million as of
September 30, 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 non-current assets in the unaudited Condensed
Consolidated Balance Sheets.
In accordance with the terms of the ABL Facility, we may be required to cash collateralize the ABL Facility to the
extent of outstanding letters of credit after the expiration or termination date of such letter of credit. As of
September 30, 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.
On August 5, 2024, the Company’s Board of Directors declared a bi-annual fully franked fixed ordinary dividend
of $8.4 million, or 0.5 cents per CDI. On September 17, 2024, the Company paid $8.3 million, net of $0.1 million
foreign exchange gain on payment of dividends to certain CDI holders who elected to be paid in Australian dollars.
Capital Requirements
Our main uses of cash have historically been the funding of our operations, working capital, capital expenditure,
and the payment of interest and dividends. We intend to use cash to fund debt service payments on our New
Notes, the ABL Facility and our other indebtedness, to fund operating activities, working capital, capital
expenditures, including organic growth projects, partial redemption of the New Notes, business or assets
acquisitions and, if declared, payment of dividends.
Historical Cash Flows
The following table summarizes our cash flows for the nine months ended September 30, 2024 and 2023, as
reported in the accompanying consolidated financial statements:
Cash Flow
Nine months ended
September 30,
(in US$ thousands)
2024
2023
Net cash provided by operating activities
$
11,472
$
223,681
Net cash used in investing activities
(200,887)
(183,028)
Net cash provided by (used in) financing activities
27,883
(23,005)
Net change in cash and cash equivalents
(161,532)
17,648
Effect of exchange rate changes on cash and cash equivalents
(1,414)
(15,180)
Cash and cash equivalents at beginning of period
339,295
334,629
Cash and cash equivalents at end of period
$
176,349
$
337,097
Operating activities
Net cash provided by operating activities was $11.5 million for the nine months ended September 30, 2024,
compared to $223.7 million for the nine months ended September 30, 2023. The decrease in cash from operating
activities was driven by the lower coal revenue s and the additional payment of $51.5 million in relation to the
stamp duty on Curragh’s acquisition, including tax interest, partially offset by income tax refund of $21.3 million
as compared to income tax payment of $148.8 million for the nine months ended September 30, 2023.
Investing activities
Net cash used in investing activities was $200.9 million
for the nine months ended September 30, 2024,
compared to $183.0 million for the nine months ended September 30, 2023. Cash spent on capital expenditures
for the nine months ended September 30, 2024, was $201.1 million, of which $62.0 million was related to the
Australian Operations and $139.1 million was related to the U.S. Operations. The increase in capital expenditures
was largely due to the investment in organic growth projects at both of our U.S. Operations and Australian
Operations.
Coronado Global Resources Inc.
Financing activities
Net cash provided by financing activities was $27.9 million
for the nine months ended September 30, 2024,
compared to net cash used in financing activities of $23.0 million for the nine months ended September 30, 2023.
Included in net cash provided by financing activities for the nine months ended September 30, 2024 were net
proceeds of $49.9 million in relation to the Curragh Housing Transaction, partially offset by dividend payment of
$16.7 million, repayment of interest bearing and other financial liabilities of $3.0 million and payment of debt
issuance and other financing costs of $2.3 million.
Contractual Obligations
There were no material changes to our contractual obligations from the information previously provided in Item
7. “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” of our Annual
Report on Form 10-K for the year ended December 31, 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 judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. All
critical 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” and Note 2. (b) “Accounting Standards Not Yet
Implemented” to our unaudited condensed consolidated financial statements for further information.
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 Met 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 September 30, 2024, we had
$44.8 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 $4.5 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 September 30, 2024, we had $299.9 million of fixed rate borrowings and Existing Notes and no variable-
rate borrowings outstanding.
We currently do not hedge against interest rate fluctuations.
Foreign Exchange Risk
A significant portion of our sales are denominated in US$. 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 $32.4 million and $92.5
million for the three and nine months ended September 30, 2024, respectively.
Under normal market conditions, we generally do not consider it necessary to hedge our exposure to this foreign
exchange risk. However, there may be specific commercial circumstances, such as the hedging of significant
capital expenditure, acquisitions, disposals and other financial transactions, where we may deem foreign
exchange hedging as appropriate and where a US$ 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 September 30, 2024, we had financial assets of $541.8 million, comprising of cash and cash equivalents,
trade receivables, short-term deposits and restricted deposits, all of which are exposed to varied levels of
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 September
30, 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, and Part II, Item 1A. “Risk Factors” of our Quarterly Report on Form 10-Q for the quarterly period ended
June 30, 2024 filed with SEC and ASX on August 5, 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 September 30, 2024, no director or officer (as defined in Rule 16a-1(f) promulgated
under the Exchange Act) of the Company
Coronado Global Resources Inc.
ITEM 6. EXHIBITS
The following documents are filed as exhibits hereto:
Exhibit No.
Description of Document
3.1
3.2
4.1
4.2
10.1*
15.1
31.1
31.2
32.1
95.1
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL 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)
* Certain schedules and exhibits to this agreement have been omitted pursuant to Item 601(a)(5) of Regulation
S-K. A copy of any omitted schedule and/or exhibit will be furnished to the Securities and Exchange Commission
upon request.
Coronado Global Resources Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
Coronado Global Resources Inc.
By:
/s/ Gerhard Ziems
Gerhard Ziems
Group Chief Financial Officer (as duly authorized officer
and as principal financial officer of the registrant)
Date: November 12, 2024