Coronado Global Resources Inc.
Coronado Global Resources Inc.
11/12/2024 | Press release | Distributed by Public on 11/12/2024 14:08
Quarterly Report for Quarter Ending September 30, 2024 (Form 10-Q)
Form10q2024q3
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________
FORM
10-Q
___________________________________________________
(Mark One)
☒
QUARTERLY
REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended
September 30, 2024
OR
☐
TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from
to
Commission File Number:
1-16247
___________________________________________________
Coronado Global Resources Inc.
(Exact name of registrant as specified in its charter)
___________________________________________________
Delaware
83-1780608
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
Level 33, Central Plaza One
,
345 Queen Street
Brisbane, Queensland
,
Australia
4000
(Address of principal executive offices)
(Zip Code)
(
61
)
7
3031 7777
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
___________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
None
None
None
Indicate by check
mark whether the
registrant (1) has filed
all reports required
to be filed
by Section 13 or
15(d) of the
Securities Exchange
Act of 1934 during
the preceding 12 months
(or for such shorter
period that the registrant
was required to file
such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes
☒
No
☐
Indicate by check mark whether
the registrant has submitted electronically
every Interactive Data File required to
be submitted pursuant
to Rule 405
of Regulation S-T
(§232.405 of this
chapter) during the
preceding 12 months
(or for such
shorter period that
the registrant
was required to submit such files).
Yes
☒
No
☐
Indicate by check mark whether the registrant
is a large accelerated filer,
an accelerated filer, a non-accelerated
filer, a smaller reporting
company,
or
an
emerging
growth
company.
See
the
definitions
of
"large
accelerated
filer,"
"accelerated
filer,"
"smaller
reporting
company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging
growth company, indicate by
check mark if
the registrant has
elected not to
use the extended
transition period for
complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
☐
No
☒
The registrant's
common stock is
publicly traded on
the Australian Securities
Exchange in the
form of CHESS
Depositary Interests, or
CDIs, convertible at the option of
the holders into shares of the
registrant's common stock on a 10-for-1 basis.
The total number of shares
of the
registrant's common
stock, par
value $0.01
per share,
outstanding on
October 31,
2024, including
shares of
common stock
underlying
CDIs, was
167,645,373
.
Steel starts
here.
Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 2024.
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 2024 and December
31, 2023
4
Unaudited Condensed Consolidated Statements of Operations and Comprehensive
Income for the three and nine months ended September 30, 2024 and 2023
5
Unaudited Condensed Consolidated Statements of Stockholders' Equity for the three
and nine months ended September 30, 2024 and 2023
6
Unaudited Condensed Consolidated Statements of Cash Flows for the nine months
ended September 30, 2024 and 2023
8
Notes to Unaudited Condensed Consolidated Financial Statements
9
Report of Independent Registered Public Accounting Firm
23
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations
24
Item 3. Quantitative and Qualitative Disclosures About Market Risk
45
Item 4. Controls and Procedures
47
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
48
Item 1A. Risk Factors
48
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
48
Item 3. Defaults Upon Senior Securities
48
Item 4. Mine Safety Disclosures
48
Item 5. Other Information
48
Item 6. Exhibits
49
SIGNATURES
50
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
4
PART I - FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
(In US$ thousands, except share data)
Assets
Note
(Unaudited)
September 30,
2024
December 31,
2023
Current assets:
Cash and cash equivalents
$
176,349
$
339,295
Trade receivables, net
274,245
263,951
Income tax receivable
23,592
44,906
Inventories
4
162,309
192,279
Other current assets
5
123,428
103,609
Total
current assets
759,923
944,040
Non-current assets:
Property, plant and equipment,
net
6
1,582,212
1,506,437
Right of use asset - operating leases, net
8
75,025
80,899
Goodwill
28,008
28,008
Intangible assets, net
2,956
3,108
Restricted deposits
16
68,551
68,660
Deferred income tax assets
62,966
27,230
Other non-current assets
12,117
19,656
Total
assets
$
2,591,758
$
2,678,038
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$
102,089
$
113,273
Accrued expenses and other current liabilities
7
234,036
312,705
Asset retirement obligations
15,448
15,321
Contract obligations
41,258
40,722
Lease liabilities
8
16,224
22,879
Interest bearing liabilities
9
1,471
-
Other current financial liabilities
10
4,301
2,825
Total
current liabilities
414,827
507,725
Non-current liabilities:
Asset retirement obligations
155,159
148,608
Contract obligations
38,585
61,192
Deferred consideration liability
308,191
277,442
Interest bearing liabilities
9
262,311
235,343
Other financial liabilities
10
24,460
5,307
Lease liabilities
8
62,745
61,692
Deferred income tax liabilities
106,906
100,145
Other non-current liabilities
41,926
34,549
Total
liabilities
$
1,415,110
$
1,432,003
Common stock $
0.01
par value;
1,000,000,000
shares authorized,
167,645,373
shares issued and outstanding as of September 30, 2024
and December 31, 2023
1,677
1,677
Series A Preferred stock $
0.01
par value;
100,000,000
shares
authorized,
1
Share issued and outstanding as of September 30, 2024
and December 31, 2023
-
-
Additional paid-in capital
1,094,356
1,094,431
Accumulated other comprehensive losses
14
(87,677)
(89,927)
Retained earnings
168,292
239,854
Total
stockholders' equity
$
1,176,648
$
1,246,035
Total
liabilities and stockholders' equity
$
2,591,758
$
2,678,038
See accompanying notes to unaudited condensed
consolidated financial statements.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
5
Unaudited Condensed Consolidated Statements of
Operations and Comprehensive Income
(In US$ thousands, except share data)
Three months ended
September 30,
Nine months ended
September 30,
Note
2024
2023
2024
2023
Revenues:
Coal revenues
$
600,703
$
707,303
$
1,898,075
$
2,163,093
Other revenues
7,512
10,527
52,117
47,977
Total
revenues
3
608,215
717,830
1,950,192
2,211,070
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
466,113
501,471
1,311,377
1,262,907
Depreciation, depletion and amortization
45,559
34,749
142,171
113,052
Freight expenses
66,126
71,746
183,652
192,542
Stanwell rebate
25,391
37,100
83,293
105,357
Other royalties
63,020
92,700
235,605
268,606
Selling, general, and administrative
expenses
9,174
12,221
26,635
29,976
Total
costs and expenses
675,383
749,987
1,982,733
1,972,440
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)
536
157
4,255
Other, net
(19,749)
8,189
(8,643)
17,704
Total
other expense, net
(35,600)
(7,156)
(50,739)
(22,767)
(Loss) income before tax
(102,768)
(39,313)
(83,280)
215,863
Income tax benefit (expense)
11
31,771
18,230
28,482
(37,775)
Net (loss) income attributable to
Coronado Global Resources Inc.
$
(70,997)
$
(21,083)
$
(54,798)
$
178,088
Other comprehensive loss, net of income
taxes:
Foreign currency translation adjustments
14
19,316
(18,247)
2,250
(30,547)
Total
comprehensive income (loss)
19,316
(18,247)
2,250
(30,547)
Total
comprehensive (loss) income
attributable to Coronado Global
Resources Inc.
$
(51,681)
$
(39,330)
$
(52,548)
$
147,541
(Loss) earnings per share of common stock
Basic
12
(0.42)
(0.13)
(0.33)
1.06
Diluted
12
(0.42)
(0.13)
(0.33)
1.06
See accompanying notes to unaudited condensed
consolidated financial statements.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
6
Unaudited Condensed Consolidated Statements of
Stockholders' Equity
(In US$ thousands, except share data)
Common stock
Preferred stock
Additional
Accumulated other
Total
paid in
comprehensive
Retained
stockholders
Shares
Amount
Series A
Amount
capital
losses
earnings
equity
Balance December 31, 2023
167,645,373
$
1,677
1
$
-
$
1,094,431
$
(89,927)
$
239,854
$
1,246,035
Net loss
-
-
-
-
-
-
(29,001)
(29,001)
Other comprehensive loss
-
-
-
-
-
(23,288)
-
(23,288)
Total
comprehensive loss
-
-
-
-
-
(23,288)
(29,001)
(52,289)
Share-based compensation for equity
classified awards
-
-
-
-
(1,159)
-
-
(1,159)
Dividends
-
-
-
-
-
-
(8,382)
(8,382)
Balance March 31, 2024
167,645,373
$
1,677
1
$
-
$
1,093,272
$
(113,215)
$
202,471
$
1,184,205
Net income
-
-
-
-
-
-
45,200
45,200
Other comprehensive income
-
-
-
-
-
6,222
-
6,222
Total
comprehensive income
-
-
-
-
-
6,222
45,200
51,422
Share-based compensation for equity
classified awards
-
-
-
-
382
-
-
382
Balance June 30, 2024
167,645,373
$
1,677
1
$
-
$
1,093,654
$
(106,993)
$
247,671
$
1,236,009
Net loss
-
-
-
-
-
-
(70,997)
(70,997)
Other comprehensive income
-
-
-
-
-
19,316
-
19,316
Total
comprehensive income (loss)
-
-
-
-
-
19,316
(70,997)
(51,681)
Share-based compensation for equity
classified awards
-
-
-
-
702
-
-
702
Dividends
-
-
-
-
-
-
(8,382)
(8,382)
Balance September 30, 2024
167,645,373
$
1,677
1
$
-
$
1,094,356
$
(87,677)
$
168,292
$
1,176,648
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
7
Common stock
Preferred stock
Additional
Accumulated other
Total
paid in
comprehensive
Retained
stockholders
Shares
Amount
Series A
Amount
capital
losses
earnings
equity
Balance December 31, 2022
167,645,373
$
1,677
1
$
-
$
1,092,282
$
(91,423)
$
100,554
$
1,103,090
Net income
-
-
-
-
-
-
107,860
107,860
Other comprehensive loss
-
-
-
-
-
(4,503)
-
(4,503)
Total
comprehensive (loss) income
-
-
-
-
-
(4,503)
107,860
103,357
Share-based compensation for equity
classified awards
-
-
-
-
(308)
-
-
(308)
Dividends
-
-
-
-
-
-
(8,382)
(8,382)
Balance March 31, 2023
167,645,373
$
1,677
1
$
-
$
1,091,974
$
(95,926)
$
200,032
$
1,197,757
Net income
-
-
-
-
-
-
91,311
91,311
Other comprehensive loss
-
-
-
-
-
(7,797)
-
(7,797)
Total
comprehensive (loss) income
-
-
-
-
-
(7,797)
91,311
83,514
Share-based compensation for equity
classified awards
-
-
-
-
1,289
-
-
1,289
Balance June 30, 2023
167,645,373
$
1,677
1
$
-
$
1,093,263
$
(103,723)
$
291,343
$
1,282,560
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
-
-
-
-
582
-
-
582
Dividends
-
-
-
-
-
-
(8,382)
(8,382)
Balance September 30, 2023
167,645,373
$
1,677
1
$
-
$
1,093,845
$
(121,970)
$
261,878
$
1,235,430
See accompanying notes to unaudited condensed
consolidated financial statements.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
8
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)
$
178,088
Adjustments to reconcile net income to cash and restricted cash
provided by
operating activities:
Depreciation, depletion and amortization
142,171
113,052
Impairment of non-core assets
10,585
-
Amortization of right of use asset - operating leases
16,795
6,894
Amortization of deferred financing costs
3,020
1,595
Loss on debt extinguishment
-
1,385
Non-cash interest expense
25,824
24,748
Amortization of contract obligations
(22,163)
(23,896)
Loss on disposal of property,
plant and equipment
165
393
Gain on derecognition of operating lease
(820)
-
Equity-based compensation expense
(75)
1,563
Deferred income taxes
(27,335)
13,140
Reclamation of asset retirement obligations
(6,313)
(3,168)
Decrease in provision for discounting and credit losses
(157)
(4,255)
Other non-cash adjustments
837
-
Changes in operating assets and liabilities:
Accounts receivable
(13,621)
147,956
Inventories
29,958
(54,704)
Other assets
(5,947)
(5,197)
Accounts payable
(13,138)
25,676
Accrued expenses and other current liabilities
(85,576)
(69,303)
Operating lease liabilities
(15,812)
(9,311)
Income tax payable
20,627
(128,418)
Change in other liabilities
7,245
7,443
Net cash provided by operating activities
11,472
223,681
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
2,362
26,250
Net cash used in investing activities
(200,887)
(183,028)
Cash flows from financing activities:
Proceeds from interest bearing liabilities and other financial
liabilities
49,860
-
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
27,883
(23,005)
Net (decrease) increase 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
Supplemental disclosure of cash flow information:
Cash payments for interest
$
17,610
$
14,598
Cash (refund) paid for taxes
$
(21,285)
$
148,775
Restricted cash
$
251
$
251
See accompanying notes to unaudited condensed
consolidated financial statements.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
9
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
1.
Description of Business, Basis of Presentation
(a)
Description of the Business
Coronado
Global
Resources
Inc.
is
a
global
producer,
marketer,
and
exporter
of
a
full
range
of
metallurgical
coals,
an
essential
element
in
the
production
of
steel.
The
Company
has
a
portfolio
of
operating
mines
and
development projects in
Queensland, Australia, and
in the states of
Pennsylvania, Virginia and
West Virginia
in
the United States, or U.S.
(b)
Basis of Presentation
The interim unaudited condensed consolidated financial statements
have been prepared in accordance with the
requirements of U.S. generally accepted
accounting principles, or U.S. GAAP,
and with the instructions to Form
10-Q
and
Article
10
of Regulation
S-X
related
to
interim
financial
reporting
issued
by
the
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.
Table of Contents
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
10
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
two
100%-owned
producing
mine complexes
(Buchanan
and Logan),
one
100%-owned
idled mine complex (Greenbrier) and
two
development properties (Mon Valley
and Russell County).
The Company operates its
business along
two
reportable segments: Australia
and the U.S. The
organization of
the
two
reportable segments
reflects how
the Company's
chief operating
decision maker,
or CODM,
manages
and allocates resources to the various components of the
Company's business.
The CODM
uses Adjusted
EBITDA as
the primary
metric to
measure each
segment's
operating performance.
Adjusted EBITDA is not a measure of financial performance in accordance with U.S. GAAP.
Investors should be
aware that
the Company's
presentation of
Adjusted EBITDA
may not
be comparable
to similarly
titled financial
measures used by other companies.
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
$
365,953
$
242,262
$
-
$
608,215
Adjusted EBITDA
(51,978)
41,628
(8,773)
(19,123)
Total
assets
1,257,617
1,091,966
242,175
2,591,758
Capital expenditures
32,190
35,267
2,084
69,541
Three months ended September 30, 2023
Total
revenues
$
455,774
$
262,056
$
-
$
717,830
Adjusted EBITDA
(32,353)
47,630
(11,899)
3,378
Total
assets
1,217,712
1,012,399
302,905
2,533,016
Capital expenditures
10,625
50,709
173
61,507
Nine months ended September 30, 2024
Total
revenues
$
1,260,549
$
689,643
$
-
$
1,950,192
Adjusted EBITDA
16,377
125,322
(25,417)
116,282
Total
assets
1,257,617
1,091,966
242,175
2,591,758
Capital expenditures
67,618
136,472
2,202
206,292
Nine months ended September 30, 2023
Total
revenues
$
1,286,242
$
924,828
$
-
$
2,211,070
Adjusted EBITDA
35,580
349,160
(29,088)
355,652
Total
assets
1,217,712
1,012,399
302,905
2,533,016
Capital expenditures
34,352
115,917
253
150,522
Table of Contents
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
11
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)
$
178,088
Depreciation, depletion and amortization
45,559
34,749
142,171
113,052
Interest expense (net of interest income)
(1)
15,808
14,496
42,253
43,341
Income tax (benefit) expense
(31,771)
(18,230)
(28,482)
37,775
Other foreign exchange gains
(2)
10,190
(7,859)
1,086
(17,265)
Loss on extinguishment of debt
-
1,385
-
1,385
Impairment of non-core assets
(3)
10,585
-
10,585
-
Losses on idled assets
(4)
1,460
456
3,624
3,531
Increase (decrease) in provision for
discounting and credit losses
43
(536)
(157)
(4,255)
Consolidated Adjusted EBITDA
$
(19,123)
$
3,378
$
116,282
$
355,652
(1)
Includes interest income
of $
3.1
million and $
2.0
million for the
three months ended
September 30, 2024
and 2023, respectively, and
$
10.6
million and $
4.7
million for the nine months ended September
30, 2024 and 2023, respectively.
(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)
During the three
and 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
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)
These losses relate to an idled non-core
asset.
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
$
201,147
$
182,442
Accruals for capital expenditures
20,630
898
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
$
206,292
$
150,522
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
$
334,594
$
237,101
$
571,695
Thermal coal
24,058
4,950
29,008
Total
coal revenue
358,652
242,051
600,703
Other
(1)
7,301
211
7,512
Total
$
365,953
$
242,262
$
608,215
Table of Contents
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
12
Three months ended September 30, 2023
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
419,032
$
232,870
$
651,902
Thermal coal
27,783
27,618
55,401
Total
coal revenue
446,815
260,488
707,303
Other
(1)
8,959
1,568
10,527
Total
$
455,774
$
262,056
$
717,830
Nine months ended September 30, 2024
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
1,172,404
$
640,488
$
1,812,892
Thermal coal
63,342
21,841
85,183
Total
coal revenue
1,235,746
662,329
1,898,075
Other
(1)(2)
24,803
27,314
52,117
Total
$
1,260,549
$
689,643
$
1,950,192
Nine months ended September 30, 2023
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
1,195,413
$
773,184
$
1,968,597
Thermal coal
65,328
129,168
194,496
Total
coal revenue
1,260,741
902,352
2,163,093
Other
(1)(2)
25,501
22,476
47,977
Total
$
1,286,242
$
924,828
$
2,211,070
(1) Other revenue for the Australian segment includes
the amortization of the Stanwell non-market coal
supply contract obligation liability.
(2) Other revenue for the U.S. segment
includes $
25.0
million and $
17.5
million for the nine months ended September 30,
2024 and 2023,
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
$
51,569
$
55,998
Saleable coal
52,496
81,314
Total
coal inventories
104,065
137,312
Supplies and other inventory
58,244
54,967
Total
inventories
$
162,309
$
192,279
Coal inventories measured at
its net realizable value
were $
2.0
million and $
2.4
million as at September
30, 2024
and December 31, 2023,
respectively,
and primarily relates
to coal designated for
deliveries under the Stanwell
non-market coal supply agreement.
Table of Contents
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
13
5. Other Assets
(in US$ thousands)
September 30,
2024
December 31,
2023
Other current assets
Prepayments
$
37,359
$
34,175
Long service leave receivable
8,235
8,438
Tax
credits receivable
3,265
3,265
Deposits to acquire capital items
30,449
18,935
Short-term deposits
21,976
21,906
Other
22,144
16,890
Total
other current assets
$
123,428
$
103,609
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
$
29,509
$
28,282
Buildings and improvements
119,189
102,642
Plant, machinery, mining
equipment and transportation vehicles
1,306,492
1,189,088
Mineral rights and reserves
389,868
389,868
Office and computer equipment
10,565
9,771
Mine development
600,645
579,717
Asset retirement obligation asset
89,309
88,384
Construction in process
197,105
143,041
Total
cost of property,
plant and equipment
2,742,682
2,530,793
Less accumulated depreciation, depletion and amortization
1,160,470
1,024,356
Property, plant and
equipment, net
$
1,582,212
$
1,506,437
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
$
49,011
$
42,348
Taxes
other than income taxes
8,451
6,728
Accrued royalties
23,585
45,770
Accrued freight costs
28,592
47,549
Accrued mining fees
111,160
89,622
Acquisition related accruals
-
53,700
Other liabilities
13,237
26,988
Total
accrued expenses and other current liabilities
$
234,036
$
312,705
Acquisition related accruals
of $
53.7
million (A$
79.0
million) as at December
31, 2023, related to
the remaining
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 $
14.5
million.
Table of Contents
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
14
On April 1,
2024, the Company
extinguished
one
of its mining
services contracts for
mining and equipment
assets
used
to
provide
mining
services.
On
extinguishment,
right-of-use
assets
of
$
11.3
million
and
operating
lease
liabilities of $
12.1
million were derecognized.
On September 1, 2024,
the Company modified
one
of its mining equipment
lease contracts to
extend the lease
term. Upon modification, the Company recognized additional right-of-use assets and operating lease liabilities of
$
6.4
million.
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
$
6,925
$
5,200
$
21,411
$
9,697
Cash paid for operating lease
liabilities
4,707
4,310
15,812
9,311
Finance lease costs:
Amortization of right-of-use assets
-
32
67
92
Interest on lease liabilities
-
2
2
8
Total
finance lease costs
$
-
$
34
$
69
$
100
(in US$ thousands)
September 30,
2024
December 31,
2023
Operating leases:
Operating lease right-of-use assets
$
75,025
$
80,899
Finance leases:
Property and equipment
371
371
Accumulated depreciation
(371)
(309)
Property and equipment, net
-
62
Current operating lease obligations
16,224
22,811
Operating lease liabilities, less current portion
62,745
61,692
Total
operating lease liabilities
78,969
84,503
Current finance lease obligations
-
68
Finance lease liabilities, less current portion
-
-
Total
Finance lease liabilities
-
68
Current lease obligation
16,224
22,879
Non-current lease obligation
62,745
61,692
Total
Lease liability
$
78,969
$
84,571
September 30,
2024
December 31,
2023
Weighted Average Remaining
Lease Term (Years)
Weighted average remaining lease term - finance
leases
-
0.5
Weighted average remaining lease term - operating
leases
4.3
3.7
Weighted Average Discount
Rate
Weighted discount rate - finance lease
-
7.6%
Weighted discount rate - operating lease
9.0%
9.0%
Table of Contents
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
15
The Company's
operating leases
have remaining
lease terms
of
one year
to
five years
, some of
which include
options to
extend
the terms
where the
Company
deems
it is
reasonably
certain
the options
will
be exercised.
Maturities of lease liabilities as at September 30, 2024, are as follows:
(in US$ thousands)
Operating
Lease
Year ending
December 31,
2024
$
5,463
2025
21,869
2026
21,679
2027
20,629
2028
17,785
Thereafter
4,686
Total
lease payments
92,111
Less imputed interest
(13,142)
Total
lease liability
$
78,969
9.
Interest Bearing Liabilities
The following is a summary of interest-bearing liabilities
at September 30, 2024:
(in US$ thousands)
September 30, 2024
December 31, 2023
Weighted Average
Interest Rate at
September 30, 2024
Final
Maturity
10.750% Senior Secured Notes
$
242,326
$
242,326
12.14
%
(2)
2026
ABL Facility
-
-
2026
Loan - Curragh Housing Transaction
27,663
-
14.14
%
(2)
2034
Discount and debt issuance costs
(1)
(6,207)
(6,983)
Total
interest bearing liabilities
263,782
235,343
Less: current portion
1,471
-
Non-current interest-bearing liabilities
$
262,311
$
235,343
(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)
Represents the effective interest rate.
10.750% Senior Secured Notes
As of
September 30,
2024, the
Company's
aggregate principal
amount of
the
10.750
% Senior
Secured Notes
due 2026, or the
Existing Notes, outstanding
was $
242.3
million. As of September
30, 2024, the Existing
Notes
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 $
5.0
million and $
7.0
million at September 30, 2024 and December 31,
2023, respectively.
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 $
252.1
million, equivalent
to
104.03
% 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 $
14.8
million.
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,
Table of Contents
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
16
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 $
400.0
million aggregate
principal amount of
9.250
% Senior Secured Notes due 2029, or the New Notes.
The New Notes were issued
at par and bear interest
at a rate of
9.250
% 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
101
%
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
101
% 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
90
%
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
100
% 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
104.625
% 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
100
% 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
40
% of the aggregate principal amount the New Notes on one or more occasions prior to
October 1, 2026 at a
price equal to
109.250
% 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
40
% 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
109.250
%, plus
accrued and
unpaid interest,
if any,
to, but
excluding, the
redemption date,
so long
as at
least
60
%
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
120
days after the date of the closing of such equity
offering.
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
25
% 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.
Table of Contents
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
17
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 $
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
an applicable
rate of
2.80
% 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
$
22.0
million
of
bank
guarantees on
behalf of
the Company
and
no
amounts were
drawn under
the revolving
credit sublimit
of ABL
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
3.00
times, a
covenant regarding maintenance of interest coverage ratio to be more than
3.00
times, covenants relating to the
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
20
business days after the occurrence of
the Review Event, the Lenders are
not satisfied with the result
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 $
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
%. The Curragh
Housing Transaction loan is not subject
to any financial covenants.
The carrying value of the loan,
net of issuance costs of $
1.2
million, was $
26.4
million as at September 30, 2024,
$
1.6
million of which is classified as a current liability.
Table of Contents
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
18
10. Other Financial Liabilities
The following is a summary of other financial liabilities
as at September 30, 2024:
(in US$ thousands)
September 30,
2024
December 31,
2023
Collateralized financial liabilities payable to third-party financing
companies
$
6,219
$
8,302
Collateralized financial liabilities - Curragh Housing Transaction
23,692
-
Debt issuance costs
(1,150)
(170)
Total
other financial liabilities
28,761
8,132
Less: current portion
4,301
2,825
Non-current other financial liabilities
$
24,460
$
5,307
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 $
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 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
$
1.0
million, was
$
22.6
million as
at September
30, 2024, $
1.3
million of which is classified as a current liability.
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
$
28.5
million
based on
a loss
before
tax of
$
83.3
million for the nine months ended September 30, 2024.
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
$
37.8
million for
the nine
months ended
September 30,
2023 was
calculated based
on
an estimated annual effective tax rate of
18.5
% 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
no
new unrecognized tax
benefits included
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 $
20.8
million
consistent with December 31, 2023.
Table of Contents
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
19
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)
$
178,088
Denominator (in thousands):
Weighted average shares of common stock
outstanding
167,645
167,645
167,645
167,645
Effects of dilutive shares
-
-
-
447
Weighted average diluted shares of common stock
outstanding
167,645
167,645
167,645
168,092
(Loss) Earnings Per Share (US$):
Basic
(0.42)
(0.13)
(0.33)
1.06
Dilutive
(0.42)
(0.13)
(0.33)
1.06
The Company's common stock is publicly traded on the
ASX in the form of CDIs, convertible at the option of the
holders into shares of the Company's common stock
on a
10
-for-1 basis.
13.
Fair Value Measurement
The fair
value of
a financial
instrument is
the amount
that will
be received
to sell
an asset
or paid
to transfer
a
liability in
an orderly transaction
between market participants
at the
measurement date. The
fair values
of financial
instruments involve uncertainty and cannot be determined with
precision.
The Company utilizes valuation
techniques that maximize
the use of observable inputs
and minimize the use of
unobservable
inputs
to
the
extent
possible.
The
Company
determines
fair
value
based
on
assumptions
that
market participants would use in
pricing an asset or liability
in the market.
When considering market participant
assumptions in fair
value measurements, the
following fair value
hierarchy distinguishes between observable
and
unobservable inputs, which are categorized in one of the following
levels:
Level
1 Inputs:
Unadjusted
quoted
prices
in
active
markets
for identical
assets
or liabilities
accessible
to
the
reporting entity at the measurement date.
Level 2 Inputs:
Other than quoted prices that are observable for the
asset or liability,
either directly or indirectly,
for substantially the full term of the asset or liability.
Level
3
Inputs:
Unobservable
inputs
for
the
asset
or
liability
used
to
measure
fair
value
to
the
extent
that
observable inputs
are not
available, thereby
allowing for
situations in
which there
is little, if
any,
market activity
for the asset or liability at measurement date.
Table of Contents
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
20
Financial Instruments Measured on a Recurring Basis
As
of
September
30,
2024,
there
were
no
financial
instruments
required
to
be
measured
at
fair
value
on
a
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:
●
Cash
and
cash
equivalents,
accounts
receivable,
short-term
deposits,
accounts
payable,
accrued
expenses,
lease
liabilities
and
other
current
financial
liabilities:
The
carrying
amounts
reported
in
the
unaudited Condensed Consolidated
Balance Sheets approximate
fair value due to
the short maturity of
these instruments.
●
Restricted
deposits,
lease
liabilities,
interest
bearing
liabilities
and
other
financial
liabilities:
The
fair
values
approximate
the
carrying
values
reported
in
the
unaudited
Condensed
Consolidated
Balance
Sheets.
●
Interest bearing liabilities: The
Company's outstanding interest-bearing liabilities are carried at
amortized
cost. As of September 30, 2024, there were
no
amounts drawn under the revolving credit sublimit of the
ABL Facility. The estimated fair value of
the Existing Notes as
of September 30, 2024 was
approximately
$
252.1
million based upon quoted market prices in a market
that is not considered active (Level 2).
14.
Accumulated Other Comprehensive Losses
The Company's Accumulated Other Comprehensive
Losses consists of foreign currency translation adjustment
of subsidiaries for which the functional currency is different
to the Company's functional currency in
U.S. dollar.
Accumulated other comprehensive losses consisted of
the following at 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
5,254
Total
net current-period other comprehensive income
2,250
Balance at September 30, 2024
$
(87,677)
Table of Contents
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
21
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
$
3,187
2025
5,529
2026
5,384
2027
5,344
2028
5,284
Thereafter
25,878
Total
$
50,606
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 $
157.3
million, all
of which
is
obligated within the next twelve months.
In Australia, the
Company has generally
secured the ability
to transport coal
through rail contracts
and coal export
terminal contracts that are primarily funded
through take-or-pay arrangements with terms ranging up to
13 years
.
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
$
696.0
million, of which approximately $
96.0
million is obligated within the next twelve months.
16.
Contingencies
Surety bond, letters of credit and bank guarantees
In the
normal course
of business,
the Company
is a
party to
certain guarantees
and financial
instruments with
off-balance sheet
risk, such
as letters
of credit
and performance
or surety
bonds.
No
liabilities related
to these
arrangements are reflected
in the Company's
unaudited Condensed Consolidated Balance Sheets.
Management
does not expect any material losses to result from these
guarantees or off-balance sheet financial instruments.
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 $
48.9
million and $
16.8
million letters
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
$
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, the Company in
aggregate had total outstanding bank
guarantees provided of $
41.3
million to secure its obligations and commitments,
including $
22.0
million issued from 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.
Restricted deposits - cash collateral
As required by certain agreements, the Company had total cash collateral in
the form of deposits of $
68.6
million
and
$
68.7
million
as
of
September
30,
2024
and
December
31,
2023,
respectively,
to
provide
back-to-back
support for bank guarantees, other
performance obligations, various other operating agreements
and contractual
Table of Contents
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
22
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,
no
letter of credit had expired
or was terminated and as
such
no
cash collateral was
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 $
56.2
million (A$
82.2
million) plus unpaid tax interest. On November 23,
2022,
the
Company
filed
an
objection
to
the
assessment.
The
Company's
objection
was
based
on
legal
and
valuation advice obtained, which supported an estimated stamp duty
payable of $
29.4
million (A$
43.0
million) on
the Curragh acquisition.
On January 9, 2024, the Company's objection to the
assessed stamp duty was disallowed by the QRO.
As per the Taxation Administration Act (Queensland) 2001, the Company could only appeal or apply for a review
of QRO's
decision if
it has
paid the
total assessed
stamp duty
of $
56.2
million (A$
82.2
million) plus
unpaid tax
interest of $
14.5
million (A$
21.2
million). The Company had until March 11,
2024, to file an appeal.
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.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
23
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.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
24
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:
●
the prices we receive for our coal;
●
uncertainty
in
global
economic
conditions,
including
the
extent,
duration
and
impact
of
ongoing
civil
unrest and wars,
as well as
risks related to
government actions with
respect to trade
agreements, treaties
or policies;
●
a
decrease
in
the
availability
or
increase
in
costs
of
labor,
key
supplies,
capital
equipment
or
commodities, such
as diesel
fuel, steel,
explosives
and tires,
as the
result of
inflationary
pressures
or
otherwise;
●
the extensive forms of taxation
that our mining operations
are subject to, and future
tax regulations and
developments.
For
example,
the
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;
●
concerns about the environmental impacts of coal combustion and greenhouse gas, or GHG emissions,
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;
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
25
●
severe financial hardship, bankruptcy,
temporary or permanent shut downs or operational
challenges of
one or more of our major
customers, including customers in the steel industry, key suppliers/contractors,
which
among
other
adverse
effects,
could
lead
to
reduced
demand
for
our
coal,
increased
difficulty
collecting receivables
and customers
and/or suppliers
asserting force
majeure or
other reasons
for not
performing their contractual obligations to us;
●
our ability to generate sufficient cash to service
our indebtedness and other obligations;
●
our indebtedness and ability to
comply with the covenants and other
undertakings under the agreements
governing such indebtedness;
●
our
ability
to
collect
payments
from
our
customers
depending
on
their
creditworthiness,
contractual
performance or otherwise;
●
the demand for steel products, which impacts the demand for
our metallurgical, or Met, coal;
●
risks inherent to
mining operations,
such as adverse
weather conditions, could impact the
amount of coal
produced, cause delay or suspend coal deliveries, or
increase the cost of operating our business;
●
the loss of, or significant reduction in, purchases by our
largest customers;
●
risks unique to international mining and trading operations,
including tariffs and other barriers to trade;
●
unfavorable economic and financial market conditions;
●
our ability to continue acquiring and developing coal reserves
that are economically recoverable;
●
uncertainties in estimating our economically recoverable coal
reserves;
●
transportation for our coal becoming unavailable or uneconomic
for our customers;
●
the risk
that we
may
be required
to pay
for unused
capacity
pursuant
to the
terms
of our
take-or-pay
arrangements with rail and port operators;
●
our ability to retain key personnel and attract qualified
personnel;
●
any failure to maintain satisfactory labor relations;
●
our ability to obtain, renew or maintain permits and consents
necessary for our operations;
●
potential costs or liability under applicable environmental
laws and regulations, including with respect
to
any
exposure
to
hazardous
substances
caused
by
our
operations,
as
well
as
any
environmental
contamination our properties may have or our operations
may cause;
●
extensive regulation of our mining operations and future
regulations and developments;
●
our
ability
to
provide
appropriate
financial
assurances
for
our
obligations
under
applicable
laws
and
regulations;
●
assumptions underlying our asset retirement obligations
for reclamation and mine closures;
●
any cyber-attacks or other security breaches that disrupt
our operations or result in the dissemination of
proprietary or confidential information about us, our customers
or other third parties;
●
the risk that we may not recover our investments in our mining, exploration and other assets, which may
require us to recognize impairment charges related to those assets;
●
risks related to divestitures and acquisitions;
●
the risk that diversity in interpretation and application of accounting principles in the mining industry may
impact our reported financial results; and
●
other
risks
and
uncertainties
detailed
herein,
including,
but
not
limited
to,
those
discussed
in
"Risk
Factors," set forth in Part II, Item 1A of this Quarterly Report
on Form 10-Q.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
26
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
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
27
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.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
28
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.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
29
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:
●
Net
loss
for
the
three
months
ended
September
30,
2024,
of
$71.0
million
was
$49.9
million
higher
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.
●
Average realized Met price
per Mt sold of $179.6 for
the three months ended September
30, 2024, was
$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.
●
Sales volume of 3.9 MMt for the three months ended September 30, 2024 was 0.2 MMt lower compared
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
loss for
the three
months ended
September
30, 2024,
of $19.1
million compared
to
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.
●
As
of
September
30,
2024,
the
Company
had
total
available
liquidity
of
$326.1
million,
consisting
of
$176.1 million cash and cash equivalents (excluding restricted cash), $22.0 million of unrestricted short-
term deposits and $128.0 million of availability under the
ABL Facility.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
30
Three months ended
September 30,
2024
2023
Change
%
(in US$ 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.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
31
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.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
32
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:
●
Net loss
of $54.8
million for
the nine
months ended
September 30,
2024, decreased
by $232.9
million
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.
●
Average realized
Met price
per Mt
sold of
$192.6 for
the nine
months ended
September 30,
2024 was
$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
.
●
Sales volume of
11.7
MMt for the
nine months
ended September
30, 2024,
remained consistent
to the
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.
●
Adjusted EBITDA of
$116.3
million for the
nine months ended
September 30, 2024,
was $239.4 million
lower compared
to $355.7
million for
the nine
months ended
September 30,
2023.
This decrease
was
primarily due to lower coal revenues.
●
As of
September 30,
2024, the
Company had
net debt
of $93.9
million, consisting
of closing
cash and
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%)
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
33
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.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
34
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
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
35
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
$11.9
million
for
the
three
months
ended
September
30,
2023,
due
to
certain
corporate
activities incurred in the 2023 period.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
36
Mining
and
operating
costs
for
the
three
months
ended
September
30,
2024
compared
to
three
months ended September 30, 2023
A reconciliation of
segment costs and
expenses, segment operating
costs, and segment
mining costs is
shown
below:
Three months ended September 30, 2024
(in US$ 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)%
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
37
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
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
38
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
$29.1
million
for
the
nine
months
ended
September
30,
2023,
due
to
certain
corporate
activities incurred in the 2023 period.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
39
Mining and operating costs
for the Nine
months ended September 30,
2024 compared to Nine
months
ended September 30, 2023
A reconciliation of
segment costs and
expenses, segment operating
costs, and segment
mining costs is
shown
below:
Nine months ended September 30, 2024
(in US$ 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)%
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
40
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 $70.0 million
sublimit as a revolving
credit facility. The letter of credit sublimit contributes to our liquidity as the Company has the ability to replace cash collateral,
provided in the
form of restricted
deposits, with letters
of credit allowing
the release of
such restricted deposits
to cash and
cash equivalents.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
41
Our total indebtedness as of September 30, 2024 and
December 31, 2023 consisted of the following:
(in US$ 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.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
42
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.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
43
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.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
44
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.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
45
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.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
46
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.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
47
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.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
48
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
adopted
or
terminated
a "Rule
10b5-1 trading arrangement"
or "
non-
Rule
10b5-1
trading arrangement" (as each term is defined in Item 408
of Regulation S-K).
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
49
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
Acknowledgement of Independent Registered Public Accounting Firm
31.1
Certification of the Chief Executive Officer pursuant to SEC Rules 13a-14(a) or 15d-14(a)
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2
Certification of the Group Chief Financial Officer pursuant to SEC Rules 13a-14(a) or 15d-14(a)
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1
Certifications pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
95.1
Mine Safety Disclosures
101.INS
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.
Table of Contents
Coronado Global Resources Inc.
Form 10-Q September 30, 2024
50
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