Form10q2023q1p1i0
 
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, 2022March 31, 2023
OR
☐
 
TRANSITION REPORT PURSUANT TO
 
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from
 
to
 
Commission File Number:
1-16247

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

Delaware
83-1780608
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
Level 33, Central Plaza One
,
345 Queen Street
Brisbane, Queensland
,
Australia
4000
(Address of principal executive offices)
(Zip Code)
(
61
)
7
3031 7777
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
None
None
None
Indicate by check
 
mark whether the
 
registrant (1) has filed
 
all reports required
 
to be filed
 
by Section 13 or
 
15(d) of the
 
Securities Exchange
Act of 1934 during
 
the preceding 12 months
 
(or for such shorter
 
period that the registrant
 
was required to file
 
such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes
 
☒
 
No
 
☐
Indicate by check mark whether
 
the registrant has submitted electronically
 
every Interactive Data File required to
 
be submitted pursuant
to Rule 405
 
of Regulation S-T
 
(§232.405 of this
 
chapter) during the
 
preceding 12 months
 
(or for such
 
shorter period that
 
the registrant
was required to submit such files).
 
Yes
 
☒
 
No
 
☐
Indicate by check mark whether the registrant
 
is a large accelerated filer,
 
an accelerated filer, a nonnon-accelerated
 
-accelerated filer, a smaller reporting
company,
 
or
 
an
 
emerging
 
growth
 
company.
 
See
 
the
 
definitions
 
of
 
“large
 
accelerated
 
filer,”
 
“accelerated
 
filer,”
 
“smaller
 
reporting
company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 
Large accelerated
filer
☐☒
Accelerated filer
☒☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
 
☐
If an emerging
 
growth company, indicate by
 
check mark if
 
the registrant has
 
elected not to
 
use the extended
 
transition period for
 
complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
Yes
 
☐
 
No
☒
The registrant’s
 
common stock is
 
publicly traded on
 
the Australian Securities
 
Exchange in the
 
form of CHESS
 
Depositary Interests, or
CDIs, convertible at the option of
 
the holders into shares of the
 
registrant’s common stock on a 10-for-1 basis.
 
The total number of shares
of the
registrant's common
stock, par
value $0.01
per share,
outstanding on
October 31,
2022, April 30, 2023, including
 
shares of
common stock
underlying
CDIs, was
167,645,373
.
Form10q2023q1p2i1 Form10q2022q3p2i0.jpgForm10q2023q1p2i0
Steel starts
here.
Quarterly Report on Form 10-Q for the quarterly period ended
 
September 30, 2022.March 31, 2023.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
4
PART I – FINANCIAL INFORMATION
ITEM 1.
 
FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
(In US$ thousands, except share data)
Assets
Note
(Unaudited)
 
September 30,
2022March 31, 2023
December 31,
20212022
Current assets:
Cash and restricted cash
 
$
698,647498,300
$
437,931334,629
Trade receivables, net
 
418,236311,980
271,923409,979
Inventories
5
 
106,971185,014
118,922158,018
Other current assets
 
59,35175,636
47,64760,188
Assets held for sale
26,1144
27,023—
26,214
Total
 
current assets
 
1,309,3191,070,930
903,446989,028
Non-current assets:
Property, plant and equipment,
 
net
6
 
1,334,1331,411,284
1,397,3631,389,548
Right of use asset – operating leases, net
 
7,89716,292
13,65617,385
Goodwill
 
28,008
28,008
Intangible assets, net
 
3,3623,260
3,5143,311
Restricted deposits
1415
 
88,43986,453
80,981
Deferred income tax assets
—
14,71689,062
Other non-current assets
 
33,25221,240
19,72833,585
Total
 
assets
 
$
2,804,4102,637,467
$
2,461,4122,549,927
Liabilities and Stockholders’ Equity
Current liabilities:
 
Accounts payable
 
$
85,35369,224
$
97,51461,780
Accrued expenses and other current liabilities
7
 
406,104324,655
270,942343,691
Dividends payable
8
8,311
—
Income tax payable
 
108,187110,541
25,612119,981
Asset retirement obligations
 
8,80315,737
9,41410,646
Contract obligations
 
38,75139,976
39,96140,343
Lease liabilities
 
8,7077,452
8,4527,720
Other current financial liabilities
 
3,7704,175
8,5084,458
Liabilities held for sale
11,6614
12,113—
12,241
Total
 
current liabilities
 
671,336580,071
472,516600,860
Non-current liabilities:
Asset retirement obligations
 
108,148135,241
110,863127,844
Contract obligations
 
101,03286,756
141,18894,525
Deferred consideration liability
 
226,311248,300
230,492243,191
Interest bearing liabilities
89
 
299,929233,523
300,169232,953
Other financial liabilities
 
9,5437,498
13,8228,268
Lease liabilities
 
6,01413,710
12,89415,573
Deferred income tax liabilities
 
109,360103,726
75,75095,671
Other non-current liabilities
 
33,22630,885
26,21627,952
Total
 
liabilities
 
$
1,564,8991,439,710
$
1,383,9101,446,837
Common stock $
0.01
 
par value;
1,000,000,000
 
shares
authorized,
167,645,373
 
shares issued and outstanding as of March 31,
September 30, 20222023 and December 31, 20212022
1,677
1,677
Series A Preferred stock $
0.01
 
par value;
100,000,000
 
shares
authorized,
1
 
Share issued and outstanding as of September 30, 2022March 31, 2023 and
and December 31, 20212022
—
—
Additional paid-in capital
 
1,091,6511,091,974
1,089,5471,092,282
Accumulated other comprehensive losses
1213
 
(120,136)(95,926)
(44,228)(91,423)
Retained earnings
 
266,319200,032
30,506100,554
Total
 
stockholders’ equity
 
1,239,5111,197,757
1,077,5021,103,090
Total
 
liabilities and stockholders’ equity
 
$
2,804,4102,637,467
$
2,461,4122,549,927
See accompanying notes to unaudited condensed
 
consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
5
Unaudited Condensed Consolidated Statements of
 
Operations and Comprehensive Income
(In US$ thousands, except share data)
Three months ended
 
 
September 30,
Nine months ended
September 30,March 31,
Note
2022
20212023
2022
2021
Revenues:
Coal revenues
$
863,709738,345
$
563,287
$
2,821,334
$
1,246,918
Coal revenues from related parties
—
—
—
97,335936,628
Other revenues
10,94827,369
10,304
33,152
29,70510,497
Total
 
revenues
3
874,657765,714
573,591
2,854,486
1,373,958947,125
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately
below)
385,504380,474
309,513
1,140,467
889,771357,500
Depreciation, depletion and amortization
37,50839,423
38,461
126,901
132,75438,009
Freight expenses
63,02663,353
58,043
189,316
166,09059,264
Stanwell rebate
54,57539,208
12,274
124,160
43,16929,053
Other royalties
137,33185,957
39,099
299,711
83,21983,032
Selling, general, and administrative expenses
10,4057,774
8,044
28,657
21,250
Restructuring costs
—
—
—
2,3007,876
Total
 
costs and expenses
688,349616,189
465,434
1,909,212
1,338,553574,734
Other (expense) income:
Interest expense, net
(17,220)(14,665)
(18,251)
(52,034)
(49,982)
Loss on debt extinguishment
—
—
—
(5,744)(17,332)
Decrease (increase) in provision for
discounting and credit
losses
123,988
2,430
(572)
8,074(428)
Other, net
32,8983,042
(1,252)
55,191
(3,610)(2,790)
Total
 
other income, (expense), net
15,690(7,635)
(17,073)
2,585
(51,262)(20,550)
Income (loss) before tax
201,998141,890
91,084
947,859
(15,857)351,841
Income tax (expense) benefitexpense
910
(51,423)(34,030)
(9,096)
(235,391)
1,788(81,943)
Net income (loss)
150,575
81,988
712,468
(14,069)
Less: Net loss attributable to
noncontrolling interest
—
—
—
(2)
Net income (loss) attributable to
Coronado Global Resources
Inc.
$
150,575107,860
$
81,988
$
712,468
$
(14,067)269,898
Other comprehensive income, net of income taxes:
Foreign currency translation adjustmentadjustments
1213
(41,998)(4,503)
(7,966)
(75,908)
(16,796)
Net gain on cash flow hedges, net of tax
—
(2,204)
—
4,04516,258
Total
 
other comprehensive loss(loss) income
(41,998)(4,503)
(10,170)
(75,908)
(12,751)16,258
Total
 
comprehensive income (loss)
108,577
71,818
636,560
(26,820)
Less: Net loss attributable to
noncontrolling interest
—
—
—
(2)
Total
comprehensive income (loss)
attributable to Coronado
Global
Resources Inc.
 
$
108,577103,357
$
71,818
$
636,560
$
(26,818)286,156
Earnings (loss) per share of common stock
Basic
1011
0.900.64
0.49
4.25
(0.09)1.61
Diluted
1011
0.900.64
0.49
4.25
(0.09)1.61
See accompanying notes to unaudited condensed
 
consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
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
Noncontrollingstockholders
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
Common stock
Preferred stock
Additional
Accumulated other
Total
paid in
comprehensive
Retained
stockholders
Shares
Amount
Series A
Amount
capital
losses
earnings
interest
equity
Balance December 31, 2021
167,645,373
$
1,677
1
$
—
$
1,089,547
$
(44,228)
$
30,506
$
—
$
1,077,502
Net income
—
—
—
—
—
—
269,898
—
269,898
Other comprehensive income
—
—
—
—
—
16,258
—
—
16,258
Total
 
comprehensive income
—
—
—
—
—
16,258
269,898
—
286,156
Share-based compensation for equity
classified awards
—
—
—
—
84
—
—
—
84
Dividends
4
—
—
—
—
—
—
(150,881)
—
(150,881)
Balance March 31, 2022
167,645,373
$
1,677
1
$
—
$
1,089,631
$
(27,970)
$
149,523
$
—
$
1,212,861
Net income
—
—
—
—
—
—
291,995
—
291,995
Other comprehensive loss
—
—
—
—
—
(50,168)
—
—
(50,168)
Total
comprehensive (loss) income
—
—
—
—
—
(50,168)
291,995
—
241,827
Share-based compensation for equity
classified awards
—
—
—
—
1,731
—
—
—
1,731
Dividends
4
—
—
—
—
—
—
(200,040)
—
(200,040)
Balance June 30, 2022
167,645,373
$
1,677
1
$
—
$
1,091,362
$
(78,138)
$
241,478
$
—
$
1,256,379
Net income
—
—
—
—
—
—
150,575
—
150,575
Other comprehensive loss
—
—
—
—
—
(41,998)
—
—
(41,998)
Total
comprehensive (loss) income
—
—
—
—
—
(41,998)
150,575
—
108,577
Share-based compensation for equity
classified awards
—
—
—
—
289
—
—
—
289
Dividends
4
—
—
—
—
—
—
(125,734)
—
(125,734)
Balance September 30, 2022
167,645,373
$
1,677
1
$
—
$
1,091,651
$
(120,136)
$
266,319
$
—
$
1,239,511
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
7
Common stock
Preferred stock
Additional
Accumulated other
Total
paid in
comprehensive
(Accumulated
Noncontrolling
stockholders
Shares
Amount
Series A
Amount
capital
losses
losses)
interest
equity
Balance December 31, 2020
138,387,890
$
1,384
1
$
—
$
993,052
$
(28,806)
$
(158,919)
$
152
$
806,863
Net loss
—
—
—
—
—
—
(40,970)
(2)
(40,972)
Other comprehensive income (net of
$
2,111
tax)
—
—
—
—
—
317
—
—
317
Total
comprehensive income (loss)
—
—
—
—
—
317
(40,970)
(2)
(40,655)
Share-based compensation for equity
classified awards
—
—
—
—
(538)
—
—
—
(538)
Acquisition of non-controlling interest
—
—
—
—
(703)
—
—
(150)
(853)
Balance March 31, 2021
138,387,890
$
1,384
1
$
—
$
991,811
$
(28,489)
$
(199,889)
$
—
$
764,817
Net loss
—
—
—
—
—
—
(55,085)
—
(55,085)
Other comprehensive loss (net of $
24
tax)
—
—
—
—
—
(2,898)
—
—
(2,898)
Total
comprehensive loss
—
—
—
—
—
(2,898)
(55,085)
—
(57,983)
Issuance of common stock, net
29,257,483
293
—
—
97,448
—
—
—
97,741
Share-based compensation for equity
classified awards
—
—
—
—
737
—
—
—
737
Balance June 30, 2021
167,645,373
$
1,677
1
$
—
$
1,089,996
$
(31,387)
$
(254,974)
$
—
$
805,312
Net income
—
—
—
—
—
—
81,988
—
81,988
Other comprehensive loss (net of tax)
—
—
—
—
—
(10,170)
—
—
(10,170)
Total
comprehensive (loss) income
—
—
—
—
—
(10,170)
81,988
—
71,818
Share-based compensation for equity
classified awards
—
—
—
—
139
—
—
—
139
Balance September 30, 2021
167,645,373
$
1,677
1
$
—
$
1,090,135
$
(41,557)
$
(172,986)
$
—
$
877,269
See accompanying notes to unaudited condensed
 
consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
87
Unaudited Condensed Consolidated Statements of
 
Cash Flows
(In US$ thousands)
NineThree months ended
September 30,March 31,
2023
2022
2021
Cash flows from operating activities:
Net income (loss)
$
712,468107,860
$
(14,069)269,898
Adjustments to reconcile net income to cash and restricted cash
 
provided by
operating activities:
Depreciation, depletion and amortization
126,90139,423
132,75438,009
Amortization of right of use asset - operating leases
5,5971,083
6,6943,401
Amortization of deferred financing costs
1,451483
2,649
Loss on debt extinguishment
—
5,744484
Non-cash interest expense
23,5448,086
21,4317,689
Amortization of contract obligations
(26,883)(7,201)
(25,612)(8,670)
Loss on disposal of property,
 
plant and equipment
433121
835228
Equity-based compensation expense
2,104(308)
33884
Deferred income taxes
49,9298,141
2,18919,027
Reclamation of asset retirement obligations
(3,961)(737)
(2,393)(1,156)
Increase (decrease)(Decrease) increase in provision for discounting and credit
losses
572(3,988)
(8,074)428
Changes in operating assets and liabilities:
Accounts receivable - including related party receivables
(170,094)105,270
9,783(226,983)
Inventories
6,094(28,039)
(12,889)(10,574)
Other assets
(30,109)5,362
12,1873,160
Accounts payable
(3,371)7,601
22,899(34,488)
Accrued expenses and other current liabilities
161,224(11,883)
16,36354,967
Operating lease liabilities
(6,202)(2,080)
(7,875)—
Income tax payable
88,614(8,510)
—(2,086)
Change in other liabilities
7,0732,942
8,16158,431
Net cash provided by operating activities
945,384223,626
171,115171,849
Cash flows from investing activities:
Capital expenditures
(141,928)(54,839)
(75,897)(37,768)
Purchase of restricted deposits
(9,558)(2,403)
(100,166)(3,548)
Redemption of restricted deposits
8163,095
30,281140
Net cash used in investing activities
(150,670)(54,147)
(145,782)(41,176)
Cash flows from financing activities:
Proceeds from interest bearing liabilities and other financial
liabilities
—
411,524
Debt issuance costs and other financing costs
—
(15,263)
Principal payments on interest bearing liabilities and other financial
 
liabilities
(9,773)(920)
(371,379)(4,773)
Principal payments on finance lease obligations
(91)(31)
—(21)
Premiums paid on early redemption of debt
(90)
—
Dividends paid
(473,900)
—
Proceeds from stock issuance, net
—
97,741(22)
Net cash (used in) provided byused in financing activities
(483,854)(951)
122,623(4,816)
Net increase in cash and restricted cash
310,860168,528
147,956125,857
Effect of exchange rate changes on cash and restricted
 
cash
(50,144)(4,857)
2,2877,679
Cash and restricted cash at beginning of period
437,931334,629
45,736437,931
Cash and restricted cash at end of period
$
698,647498,300
$
195,979571,467
Supplemental disclosure of cash flow information:
Cash payments for interest
$
19,035575
$
13,681677
Cash paid (refund) for taxes
$
90,88834,000
$
(16,130)—
Restricted cash
$
251
$
251
See accompanying notes to unaudited condensed
 
consolidated financial statements.
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
98
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
 
FINANCIAL STATEMENTS
1.
 
Description of Business, Basis of Presentation
(a)
Description of the Business
 
Coronado
 
Global
 
Resources
 
Inc.
 
is
 
a
 
global
 
producer,
 
marketer,
 
and
 
exporter
 
of
 
a
 
full
 
range
 
of
 
metallurgical
coals,
 
an
 
essential
 
element
 
in
 
the
 
production
 
of
 
steel.
 
The
 
Company
 
has
 
a
 
portfolio
 
of
 
operating
 
mines
 
and
development projects in
 
Queensland, Australia, and
 
in the states of
 
Pennsylvania, Virginia and
 
West Virginia
 
in
the United States, or U.S.
 
(b)
 
Basis of Presentation
 
The interim unaudited condensed consolidated financial statements
 
have been prepared in accordance with the
requirements of U.S. generally accepted
 
accounting principles, or U.S. GAAP,
 
and with the instructions to Form
10-Q and Article
 
10 of Regulation
 
S-X related to
 
interim financial reporting
 
issued by the
 
Securities and Exchange
Commission, or the
 
SEC. Accordingly,
 
they do not
 
include all of
 
the information
 
and footnotes required
 
by U.S.
GAAP for complete
 
financial statements and should
 
be read in
 
conjunction with the audited
 
consolidated financial
statements and notes thereto included in the
 
Company’s Annual Report on Form 10-K filed with the
 
SEC and the
Australian Securities Exchange, or the ASX, on February
 
22, 2022.21, 2023.
The
 
interim
 
unaudited
 
condensed
 
consolidated
 
financial
 
statements
 
are
 
presented
 
in
 
U.S.
 
dollars,
 
unless
otherwise
stated.
 
They
include
 
the
accounts
of
 
Coronado
Global
 
Resources
Inc.,
and
 
its wholly-owned
 
subsidiarieswholly-owned
and subsidiaries
in which
it has
a controlling interest.subsidiaries.
 
References
to
 
“US$”
or
 
“USD”
are
 
references
to
 
U.S.
dollars.
References
References
to
 
“A$”
or
 
“AUD” are
 
are
references
to
 
Australian
dollars,
 
the
lawful
 
currency
of
 
the
Commonwealth
 
of
Australia.
The
“Company”
and
Australia. The “Company” “Coronado”
are
used
interchangeably
to
refer
to
Coronado
Global
Resources
Inc.
and “Coronado” are used interchangeably to refer
its
subsidiaries,
collectively, or to Coronado Global Resources Inc.
and its subsidiaries, collectively,, as
 
or to Coronado Global Resources
Inc., as appropriate to the
context.
 
Interests
in subsidiaries
controlled by
the Company
are consolidated
with any
outside stockholder
interests reflected
as
noncontrolling interests. All intercompany balances and
transactions
have been eliminated upon consolidation.
 
In
 
the
 
opinion
 
of
 
management,
 
these
 
interim
 
financial
 
statements
 
reflect
 
all
 
normal,
 
recurring
 
adjustments
necessary
 
for
 
the
 
fair
 
presentation
 
of
 
the
 
Company’s
 
financial
 
position,
 
results
 
of
 
operations,
 
comprehensive
income, cash flows and changes in
 
equity for the periods presented. Balance sheet information
 
presented herein
as of December 31,
 
20212022 has been derived from
 
the Company’s audited consolidated balance sheet at
 
that date.
The
Company’s
results
 
of
operations
for
 
the
three
and
nine
months
 
ended March 31,
 
September2023 are not necessarily
 
30,
2022
are
notindicative
necessarily indicative of the results that may be expected for
the year ending
December 31, 2022.2023.
2.
 
Summary of Significant Accounting Policies
Please see Note 2 “Summary
 
of Significant Accounting Policies”
 
contained in the audited
 
audited consolidated financial
statements for the year ended December 31, 20212022 included in Coronado Global Resources Inc.’s Annual Report
on Form 10-K filed with the SEC and ASX on February
 
22, 2022.21, 2023.
 
(a) Newly Adopted Accounting Standards
During
 
the
 
period,
 
there
 
has
 
been
 
no
 
new
 
Accounting
 
Standards
 
Update
 
issued
 
by
 
the
 
Financial
 
Accounting
Standards Board that had a material impact on the Company’s
 
consolidated financial statements.
3.
 
Segment Information
The Company has a portfolio of operating
 
mines and development projects in
 
Queensland, Australia, and in the
states
 
of
 
Pennsylvania,
 
Virginia
 
and
 
West
 
Virginia
 
in
 
the
 
U.S.
 
The
 
operations
 
in
 
Australia,
 
or
 
Australian
Operations, comprise
 
the 100%-owned
 
Curragh producing
 
mine complex. The
 
operations in the
 
United States,
or U.S. Operations,
 
comprise
two
 
100%-owned producing
 
mine complexes (Buchanan
 
and Logan),
one
 
100%-
owned idled mine complex (Greenbrier) and
two
 
development properties (Mon Valley
 
and Russell County).
 
The
 
Company
 
operates
 
its
 
business
 
along
two
 
reportable
 
segments:
 
Australia
 
and
 
the
 
United
 
States.
 
The
organization
 
of
 
the
two
two
 
reportable
 
segments
 
reflects
 
how
 
the
 
Company’s
 
chief
 
operating
 
decision
 
maker,
 
or
CODM, manages
and allocates resources to the various components
 
components of the Company’s business.
The CODM
 
uses Adjusted
 
EBITDA as
 
the primary
 
metric to
 
measure each
 
segment’s
 
operating performance.
Adjusted EBITDA is not a measure of financial performance in accordance with U.S. GAAP.
 
Investors should be
aware that
 
the Company’s
 
presentation of
 
Adjusted EBITDA
 
may not
 
be comparable
 
to similarly
 
titled financial
measures used by other companies.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
 
FINANCIAL STATEMENTSSTATE
 
MENTS (Continued)
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
109
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 condensed
 
consolidated financial statements.unaudited Condensed Consolidated Financial Statements.
Reportable segment
results as
 
of and for
 
the three andmonths ended
 
nine months
ended September
30, 2022March 31, 2023
 
and 20212022 are
 
are
presented below:
(in US$ thousands)
Australia
United
States
Other and
Corporate
Total
Three months ended September 30,March 31, 2023
Total
revenues
$
398,661
$
367,053
$
—
$
765,714
Adjusted EBITDA
13,233
185,042
(7,526)
190,749
Total
assets
1,146,508
951,237
539,722
2,637,467
Capital expenditures
7,235
34,163
55
41,453
Three months ended March 31, 2022
Total
 
revenues
$
546,485605,298
$
328,172341,827
$
—
$
874,657947,125
Adjusted EBITDA
88,035238,968
145,890179,899
(10,349)(7,880)
223,576
Net income (loss)
59,529
95,610
(4,564)
150,575410,987
Total
 
assets
1,405,3331,371,294
988,728976,326
410,349504,735
2,804,4102,852,355
Capital expenditures
17,28915,962
31,17423,749
10392
48,566
Three months ended September 30, 2021
Total
revenues
$
342,372
$
231,219
$
—
$
573,591
Adjusted EBITDA
67,383
88,441
(8,084)
147,740
Net income (loss)
39,868
54,444
(12,324)
81,988
Total
assets
1,155,082
862,961
183,863
2,201,906
Capital expenditures
7,972
9,436
182
17,590
Nine months ended September 30, 2022
Total
revenues
$
1,730,172
$
1,124,314
$
—
$
2,854,486
Adjusted EBITDA
523,319
578,183
(28,579)
1,072,923
Net income (loss)
337,582
399,723
(24,837)
712,468
Total
assets
1,405,333
988,728
410,349
2,804,410
Capital expenditures
64,005
75,595
433
140,033
Nine months ended September 30, 2021
Total
revenues
$
832,098
$
541,860
$
—
$
1,373,958
Adjusted EBITDA
30,445
164,404
(21,408)
173,441
Net (loss) income
(65,970)
83,157
(31,256)
(14,069)
Total
assets
1,155,082
862,961
183,863
2,201,906
Capital expenditures
28,186
40,061
1,650
69,89739,803
The reconciliations
 
of Adjusted
EBITDA to
net income
attributable to the
 
Company for
the three months
ended
March 31, 2023 and nine months
ended September 30, 2022 and 2021 are as follows:
Three months ended
 
Nine months ended
September 30,
September 30,March 31,
(in US$ thousands)
2022
20212023
2022
2021
Net income (loss)
$
150,575107,860
$
81,988
$
712,468
$
(14,069)269,898
Depreciation, depletion and amortization
37,50839,423
38,461
126,901
132,75438,009
Interest expense (net of income)
17,22014,665
18,25117,332
52,034Income tax expense
49,98234,030
81,943
Other foreign exchange (gains) losses
(1)
(31,917)(2,992)
2,4871,991
(55,064)
4,376
Loss on extinguishment of debt
—
—
—
5,744
Income tax expense (benefit)
51,423
9,096
235,391
(1,788)
Restructuring costs
—
—
—
2,300
(Gains) lossesLosses on idled assets held for sale
(2)
(1,221)1,751
(113)
621
2,2161,386
(Decrease) increase in provision for discounting
and credit
losses
(12)(3,988)
(2,430)
572
(8,074)428
Consolidated Adjusted EBITDA
$
223,576190,749
$
147,740410,987
(1)
The balance
primarily relates
to foreign
exchange gains
and losses
recognized in
the translation
of short-term
inter-entity balances
in
certain entities within the group that
are denominated in currencies other than
their respective functional currencies. These
gains and losses
are included in “Other, net” on the unaudited Consolidated Statement
of Operations and Comprehensive Income.
(2)
These losses relate to idled non-core assets
that the Company has an active plan to sell.
The
reconciliations
of
capital
expenditures
per
the
Company’s
segment
information
to
capital
expenditures
disclosed
on
the
unaudited
Condensed
Consolidated
Statements
of
Cash
Flows
for
the
three
months
ended
March 31, 2023 and 2022 are as follows:
Three months ended March 31,
(in US$ thousands)
2023
2022
Capital expenditures per unaudited Condensed Consolidated
Statements of
Cash Flows
$
1,072,92354,839
$
173,44137,768
Accruals for capital expenditures
4,098
9,510
Payment for capital acquired in prior periods
(11,242)
(7,475)
Advance payment to acquire long lead capital items
(6,242)
—
Capital expenditures per segment detail
$
41,453
$
39,803
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
 
FINANCIAL STATEMENTSSTATE
 
MENTS (Continued)
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
11
(1)
The balance
primarily relates
to foreign
exchange gains
and losses
recognized in
the translation
of short-term
inter-entity balances
in
certain entities within the group that
are denominated in currencies other than
their respective functional currencies. These
gains and losses
are included in “Other, net” on the unaudited Consolidated Statement
of Operations and Comprehensive Income.
(2)
These losses relate to idled non-core assets
that the Company has classified as held
for sale with the view that
these will be sold within
the next twelve months.
The
reconciliations
of
capital
expenditures
per
the
Company’s
segment
information
to
capital
expenditures
disclosed
on
the
unaudited
Condensed
Consolidated
Statements
of
Cash
Flows
for
the
nine
months
ended
September 30, 2022 and 2021 are as follows:
Nine months ended September 30,
(in US$ thousands)
2022
2021
Capital expenditures per Condensed Consolidated Statements
of Cash
Flows
$
141,928
$
75,897
Accruals for capital expenditures
5,580
—
Payment for capital acquired in prior periods
(7,475)
(6,000)
Capital expenditures per segment detail
$
140,033
$
69,897
10
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,March 31, 2023
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
372,519
$
283,023
$
655,542
Thermal coal
18,285
64,518
82,803
Total
coal revenue
390,804
347,541
738,345
Other
(1)
7,857
19,512
27,369
Total
$
398,661
$
367,053
$
765,714
Three months ended March 31, 2022
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
518,010554,009
$
309,609337,720
$
827,619891,729
Thermal coal
19,24642,289
16,8442,610
36,09044,899
Total
 
coal revenue
537,256596,298
326,453340,330
863,709936,628
Other
(1)
9,2299,000
1,7191,497
10,94810,497
Total
$
546,485605,298
$
328,172341,827
$
874,657
Three months ended September 30, 2021
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
306,033
$
228,561
$
534,594
Thermal coal
26,525
2,168
28,693
Total
coal revenue
332,558
230,729
563,287
Other
(1)
9,814
490
10,304
Total
$
342,372
$
231,219
$
573,591
Nine months ended September 30, 2022
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
1,615,364
$
1,098,186
$
2,713,550
Thermal coal
86,537
21,247
107,784
Total
coal revenue
1,701,901
1,119,433
2,821,334
Other
(1)
28,271
4,881
33,152
Total
$
1,730,172
$
1,124,314
$
2,854,486
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
12
Nine months ended September 30, 2021
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
734,143
$
534,017
$
1,268,160
Thermal coal
70,614
5,479
76,093
Total
coal revenue
804,757
539,496
1,344,253
Other
(1)
27,341
2,364
29,705
Total
$
832,098
$
541,860
$
1,373,958947,125
(1) Other revenue for the Australian segment includes
 
the amortization of the Stanwell non-market coal
 
supply contract obligation liability.
4. Dividends
On February
 
24,Assets Held for Sale
During
 
2022, the
 
Company’sfourth
 
Boardquarter
 
of
 
Directors2020, the
 
declaredCompany
 
an unfrankedcommitted
 
ordinaryto
 
dividenda
 
ofplan
 
$
150.9
million, or
9.0
to
 
cents persell
 
CDI ($
0.90
the
 
per shareGreenbrier
mining
asset
and
determined that all
 
of commonthe criteria
 
stock).to classify assets
and liabilities as
held for sale
were met. The
 
dividend hadasset is part
 
a recordof
our U.S. segment, located
 
datein the State of
March 18,
2022
Virginia
 
and was paid onin the United States. The
Greenbrier asset does not
form part
of the Company’s core business strategy and
has been idled since April 8, 20221, 2020.
.The Company remains
committed to a
On May 9, 2022,plan to sell
 
the Company’s Board of Directors declared a specialGreenbrier
 
unfranked dividend of $
99.5
million, or
5.9
cents per CDI ($
0.59
per share of common stock), reflectingmining asset, however,
 
the unaccepted portion of the
offer to purchase the
Notes made in connection with the dividend declared on February 24, 2022, and a special unfranked dividend of
$
100.6
million, or
6.0
cents per CDI ($
0.6
per share of common
stock). The dividend had
a record date of
May
31, 2022
and was paid on
June 21, 2022
.
On August
8, 2022,
the Company’s
Board of
Directors
declared a
total unfranked
ordinary dividend
of $
125.7
million, or
7.5
cents per
CDI ($
0.75
per share
of common
stock), comprising
$
100.6
milliontiming of
 
the unacceptedsale
portion
of the
offer
to
purchasewithin
 
the
 
Notesnext
 
madetwelve
 
inmonths
 
connectionis
 
withuncertain.
As such,
Greenbrier
mining
asset
no
longer
meets
 
the
 
specialcriteria
 
dividendsfor
classification as held for sale and has
 
declared
on
May
9,
2022,
plus
an
additional
$
25.2
million.
The
dividend
had
a
record
datebeen reclassified as held for use as
 
of March 31, 2023, however it remains
August 30,idle.
The assets and
liabilities of Greenbrier met
the criteria for
classification as held for
sale as of
December 31, 2022,
therefore the Condensed Consolidated Balance Sheet continues to reflect these assets and
was
paid
on liabilities as held for
September 20, 2022
.sale as of that date.
During the nine months ended September 30, 2022, the Company paid
a total of $
473.9
million in relation to the
above
dividends
to
stockholders
and
CDI
holders
on
the
ASX,
net
of
$
2.8
million
foreign
exchange
gain
on
payment of dividends to certain CDI holders that elected to
be paid in Australian dollars.
5.
 
Inventories
(in US$ thousands)
September 30,March 31,
20222023
December 31,
20212022
Raw coal
$
12,99865,571
$
17,33450,604
Saleable coal
34,20062,375
42,00645,913
TotalTo
tal coal inventories
47,198127,946
59,34096,517
Supplies inventory
59,77357,068
59,58261,501
TotalTo
tal inventories
$
106,971185,014
$
118,922158,018
Coal inventories measured
at its net
 
realizable value
were $
2.1
million
and $
2.25.0
 
million as at SeptemberMarch 31, 2023
 
30, 2022and
and December 31,
 
31, 2021,2022, respectively,
 
respectively, and relates to
 
to coal designated
 
designated for
deliveries under
 
the Stanwell
 
non-market
coal supply agreement.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
 
FINANCIAL STATEMENTSSTATE
 
MENTS (Continued)
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
1311
6.
 
Property, Plant and
 
Equipment
(in US$ thousands)
September 30,March 31,
20222023
December 31,
20212022
Land
$
26,66127,686
$
27,85327,711
Buildings and improvements
87,92690,770
88,07991,336
Plant, machinery, mining
 
equipment and transportation vehicles
976,6331,055,106
963,2721,012,844
Mineral rights and reserves
374,326392,846
374,326373,309
Office and computer equipment
8,9539,493
8,7189,488
Mine development
547,445563,755
566,201565,106
Asset retirement obligation asset
67,37876,017
75,21587,877
Construction in process
59,03599,613
42,05582,713
2,148,357To
2,145,719tal cost of property,
plant and equipment
2,315,286
2,250,384
Less accumulated depreciation, depletion and amortization
814,224904,002
748,356860,836
Net property,Property, plant and
 
and equipment, net
$
1,334,1331,411,284
$
1,397,3631,389,548
7.
 
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the
 
following:
(in US$ thousands)
September 30,March 31,
20222023
December 31,
20212022
Wages and employee benefits
$
42,03842,149
$
41,18738,687
Taxes
 
other than income taxes
8,8256,991
6,2465,988
Accrued royalties
165,636102,383
70,237117,131
Accrued freight costs
36,96250,515
27,75444,496
Accrued mining fees
73,71289,520
65,835103,492
Acquisition related accruals
27,95911,612
31,20111,669
Other liabilities
50,97221,485
28,48222,228
Total
 
accrued expenses and other current liabilities
$
406,104324,655
$
270,942343,691
Acquisition
related
accruals
is
an
 
accrual
for
the
estimated
 
remaining
stamp
duty
payable
on
the
 
Curragh
acquisition of $
28.011.6
 
million (A$
(A$
43.017.0
 
million). Refer to Note 14. “Contingencies” for further details.
8. Dividends payable
On
February
21,
2023,
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 April 5,
2023, the Company paid $
8.3
million, net of $
0.1
million
foreign exchange
gain on
payment of
dividends to
certain CDI
holders who
elected to be
paid in
Australian dollars.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATE
MENTS (Continued)
Coronado Global Resources Inc.
Form 10-Q March 31, 2023
12
9.
 
Interest Bearing Liabilities
The following is a summary of interest-bearing liabilities
 
at September 30, 2022:March 31, 2023:
 
(in US$ thousands)
September 30, 2022March 31, 2023
December 31, 20212022
Weighted Average
Interest Rate at
September 30, 2022March 31, 2023
Final
Maturity
10.75
% Senior Secured Notes
$
312,741242,326
$
315,000242,326
12.1512.14
%
(2)
2026
ABL Facility
—
—
2024
Discount and debt issuance costs
(1)
(12,812)(8,803)
(14,831)(9,373)
Total
 
interest bearing liabilities
$
299,929233,523
$
300,169232,953
(1)
Debt issuance costs incurred on the establishment
 
of the ABL Facility has been included within
 
"Other non-current assets" on the
unaudited Condensed Consolidated Balance Sheet.
(2)
 
Represents the effective interest rate.
 
Senior Secured Notes
As of
 
September 30,March 31,
 
2022,2023, the
 
Company’s
 
aggregate principal
 
amount of
 
the
10.750
% Senior
 
Secured Notes
due
 
due
2026,
or
the
Notes,
outstanding
was
$
312.7242.3
 
million.
The
Notes
mature
on
May 15, 2026
 
and
are
senior secured
secured obligations of the Company.
The
 
terms
 
of
 
the
 
Notes
 
are
 
governed
 
by
 
an
 
indenture,
 
dated
 
as
 
of
 
May
 
12,
 
2021,
 
or
 
the
 
Indenture,
 
among
Coronado Finance
 
Pty Ltd,
 
an Australian
 
proprietary
 
company,
 
as issuer,
 
Coronado,
 
as parent
 
guarantor,
 
the
other guarantors
 
party thereto
 
and Wilmington
 
Trust,
 
National Association,
 
as trustee.
 
The Indenture
 
contains
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
14
customary
 
covenants
 
for
 
high
 
yield
 
bonds,
 
including,
 
but
 
not
 
limited
 
to,
 
limitations
 
on
 
investments,
 
liens,
indebtedness, asset
 
sales, transactions
 
with affiliates
 
and restricted
 
payments, including
 
payment of
 
dividends
on capital stock. As of
September 30, 2022, March 31, 2023, the Company was in compliance
 
compliance with all applicable covenants under the
the Indenture.
 
For the
nine months ended
September 30, 2022,
in connection with
the dividends paid
in the
period, the Company
offered to purchase up to a total of $
225.8
million aggregate principal amount of the Notes pursuant to the terms
of
the
Indenture.
For
the
nine
months
ended
September
30,
2022,
the
Company
purchased
an
aggregate
principal amount, for
accepted offers, of $
2.3
million at a
price equal to
104
% of the
principal amount of
the Notes,
plus accrued and unpaid interest on the Notes to, but not
including, the date of redemption.
The carrying
 
value of
 
debt issuance
 
costs, recorded
 
as a
 
direct deduction
 
from the
 
face amount
 
of the
 
Notes,
were $
12.88.8
 
million and $
14.89.4
 
million at September 30, 2022March 31, 2023 and December 31, 2021,2022, respectively.
ABL Facility
On May 12, 2021, the Company entered into a senior secured asset-based revolving credit agreement providing
for
 
a
 
multi-currency
 
asset-based-loan
 
facility,
 
or
 
ABL
 
Facility,
 
in
 
an
 
initial
 
principal
 
amount
 
of
 
$
100.0
 
million,
including a $
30.0
 
million sublimit for
 
the issuance of
 
letters of credit
 
and $
5.0
 
million for swingline
 
loans, at any
time outstanding, subject to borrowing base availability.
 
The ABL Facility matures on
May 12, 2024
.
 
Borrowings under
the ABL
Facility bear
interest at
a rate
equal to
a Bank
Bill Swap
Bid, or
BBSY,
rate plus
an
applicable
margin.
In
addition
to
paying
interest
on
the
outstanding
borrowings
 
under
 
the
 
ABL
 
Facility,
 
bearthe
Company is also
 
interestrequired to pay
 
at
a
rate equal
to
a
BBSY
rate
plus an
applicable
margin.
In
addition to paying
interest on the
outstanding borrowings
under the ABL
Facility,
the Company is
also required
to pay a fee in
respect of unutilized
commitments, on amounts
available to be
drawn
under outstanding letters of
credit and certain administrative
fees.
 
As at
September
30,
2022, March 31, 2023,
no
 
amounts
were
drawn
and
no
 
letters
of credit
were
outstanding
 
under the ABL Facility.
As at March 31, 2023, the Company was in compliance with all
 
the
ABL
Facility.
At September
30, 2022,
the Company
was in
compliance with
all applicable
covenants under
the ABL Facility.
Facility.
The carrying value of debt
 
issuance costs, recorded as “Other non-current assets” in
 
the unaudited Consolidated
Balance Sheets, were $
2.92.0
million and $
4.32.5
 
million at September 30,
2022March 31, 2023 and December 31, 2021,2022,
 
respectively.
 
9.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATE
MENTS (Continued)
Coronado Global Resources Inc.
Form 10-Q March 31, 2023
13
10.
 
Income Taxes
For the ninethree months ended March 31, 2023
 
September 30,and 2022, and
2021, the Company estimated its
 
its annual effective
tax rate and
and applied this effective tax rate to its
year-to-date pretax income at the end
of the interim reporting period. The tax
tax
effects
of
unusual
or
 
infrequently
occurring
items,
 
including
effects
of
changes
 
in
tax
laws
or
rates
 
and changes
changes in judgment about the
 
realizability of deferred
tax assets, are reported
 
reported in the interim period
 
period in which they
occur.
occur. The Company’s 20222023 estimated
annual effective tax rate
is
24.824.0
%, which has been favorably
impacted by mine
mine depletion deductions in
 
the United States
and includes a
discrete tax expense of
$
0.6
million.States.
The Company had
had an income tax expense
 
tax expense of
$
235.434.0
 
million based on
an
income before tax
of $
947.9141.9
 
million for the
nine three months
ended September 30, 2022.March 31, 2023.
Income tax
 
benefitexpense of
 
$
1.881.9
 
million for
 
the ninethree
 
months ended
 
September 30,March 31,
 
20212022 was
 
calculated based
 
on an
estimated annual effective tax rate of
11.323.3
% for the period.
The Company utilizes the
 
“more likely than not”
 
standard in recognizing
 
a tax benefit in
 
its financial statements.
For
the nine
three
months
 
ended September 30,
 
2022, March
31,
2023,
the
Company
 
had
no
 
unrecognized
tax
benefits.
 
If
accrual
for
interest
 
or
 
penalties
 
is
 
required,
 
it
 
is
 
the
 
Company’s
 
policy
 
to
 
include
 
these
 
as
 
a
 
component
 
of
 
income
 
tax
expense.
The Company is
 
subject to taxation
 
in the
 
U.S. and its
 
various states, as
 
well as Australia
 
and its
 
various localities.
In the
 
U.S.
 
and
 
Australia, the
 
first tax
 
return
 
was
 
lodged for
 
the
 
year
 
ended December
 
31,
 
2018. In
 
the U.S.,
companies are
 
subject to
 
open tax
 
audits for
 
a period
 
of seven
 
years at
 
the federal
 
level and
 
five years
 
at the
state level.
 
In Australia,
 
companies
 
are subject
 
to open
 
tax audits
 
for a
 
period of
 
four years
 
from the
 
date of
assessment.
The Company assessed the need for valuation allowances by evaluating future taxable income, available for tax
strategies and the reversal of temporary tax differences.
At December 31,
2021, the Australian
Operations had
tax losses carried
forward of $
25.4
million (tax effected),
which are
indefinite lived
and included
in deferred
tax assets.
It is anticipated
that these
tax losses
will be fully
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
15
utilized in
2022 and
both the
Australian Operations
and U.S.
Operations would
be in
tax payable
positions. In
addition, a company, which is not part of the Australian tax consolidated group, had tax losses carried forward of
$
7.7
million (tax effected) for which a full valuation allowance
has been recognized.
10.11.
 
Earnings per Share
Basic earnings per
 
share of common
 
stock is computed
 
by dividing net
 
income attributable
 
to the Company
 
for
the period,
 
by the
 
weighted-average
 
number of
 
shares
 
of common
 
stock outstanding
 
during the
 
same period.
 
Diluted earnings per share of common stock is computed
 
by dividing net income attributable to the Company
 
by
the weighted-average number
 
of shares
 
of common
 
stock outstanding adjusted
 
to give
 
effect to potentially
 
dilutive
securities.
Basic and diluted earnings per share was calculated as
 
follows (in thousands, except per share data):
Three months ended September 30,
Nine months ended September 30,March 31,
(in US$ thousands, except per share data)
2022
20212023
2022
2021
Numerator:
Net income (loss)
$
150,575
$
81,988
$
712,468
$
(14,069)
Less:
Net loss attributable to Non-
controlling interest
—
—
—
(2)
Net income (loss) attributable to Company
stockholders
 
$
150,575107,860
$
81,988
$
712,468
$
(14,067)269,898
Denominator (in thousands):
 
Weighted-average shares of common stock
outstanding
167,645
167,645
167,645
153,078
Effects of dilutive shares
342307
171
185
—88
Weighted average diluted shares of
common stock
outstanding
167,987167,952
167,816
167,830
153,078167,733
Earnings (Loss) Per Share (US$):
Basic
0.900.64
0.49
4.25
(0.09)1.61
Dilutive
0.900.64
0.49
4.25
(0.09)1.61
11.12.
 
Fair Value Measurement
The fair
 
value of
 
a financial
 
instrument is
 
the amount
 
that will
 
be received
 
to sell
 
an asset
 
or paid
 
to transfer
 
a
liability in
 
an orderly transaction
 
between market participants
 
at the
 
measurement date. The
 
fair values
 
of financial
instruments involve uncertainty and cannot be determined with
 
precision.
The Company utilizes valuation
 
techniques that maximize
 
the use of observable inputs
 
and minimize the use of
unobservable
 
inputs
 
to
 
the
 
extent
 
possible.
 
The
 
Company
 
determines
 
fair
 
value
 
based
 
on
 
assumptions
 
that
market participants would use in pricing
 
an asset or liability in the
 
market.
 
When considering market participant
assumptions in fair
 
value measurements, the
 
following fair value
 
hierarchy distinguishes between observable
 
and
unobservable inputs, which are categorized in one of the following
 
levels:
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATE
MENTS (Continued)
Coronado Global Resources Inc.
Form 10-Q March 31, 2023
14
Level
 
1 Inputs:
 
Unadjusted
 
quoted
 
prices
 
in
 
active
 
markets
 
for identical
 
assets
 
or liabilities
 
accessible
 
to
 
the
reporting entity at the measurement date.
Level 2 Inputs:
 
Other than quoted prices that are observable for the
 
asset or liability,
 
either directly or indirectly,
for substantially the full term of the asset or liability.
Level
 
3
 
Inputs:
 
Unobservable
 
inputs
 
for
 
the
 
asset
 
or
 
liability
 
used
 
to
 
measure
 
fair
 
value
 
to
 
the
 
extent
 
that
observable inputs
 
are not
 
available, thereby
 
allowing for
 
situations in
 
which there
 
is little, if
 
any,
 
market activity
for the asset or liability at measurement date.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
16
Financial Instruments Measured on a Recurring Basis
As of March
 
of
September
30,
2022,
31, 2023, there
 
were
no
 
financial
instruments
 
required
to
be
 
measured
at
fair
 
value on a
 
on
arecurring
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, 2022March 31, 2023 and December 31, 2021:2022:
●
 
Cash
 
and
 
restricted
 
cash,
 
accounts
 
receivable,
 
accounts
 
payable,
 
accrued
 
expenses,
 
lease
 
liabilities
and
 
other
 
current
 
financial
 
liabilities:
 
The
 
carrying
 
amounts
 
reported
 
in
 
the
 
unaudited
 
Condensed
Consolidated Balance Sheets approximate fair value due to the
 
short maturity of these instruments.
●
 
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 March 31,
 
As
of
September
30,
2022,
2023, there
were
no
 
borrowings
outstanding
under
the
ABL
Facility.
The estimated
estimated fair
value of
 
the Notes as
 
Notes isof March 31,
 
2023 was approximately
 
$
326.8253.3
 
million based upon
 
upon observablequoted market
prices in a market data
(Levelthat is not considered active (Level 2).
12.13.
 
Accumulated Other Comprehensive Losses
Accumulated other comprehensive losses consisted of
 
the following at September 30, 2022:March 31, 2023:
(in US$ thousands)
Foreign
currency
translation
adjustments
Balance at December 31, 20212022
$
(44,228)(91,423)
Net current-period other comprehensive income (loss):
Loss in other comprehensive income (loss) before reclassifications
 
(32,123)(807)
Loss on long-term intra-entity foreign currency transactions
(43,785)(3,696)
Total
 
net current-period other comprehensive gainloss
(75,908)(4,503)
Balance at September 30, 2022March 31, 2023
$
(120,136)(95,926)
13.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATE
MENTS (Continued)
Coronado Global Resources Inc.
Form 10-Q March 31, 2023
15
14.
 
Commitments
(a)
 
Mineral Leases
The
 
Company
 
leases
 
mineral
 
interests
 
and
 
surface
 
rights
 
from
 
land
 
owners
 
under
 
various
 
terms
 
and
 
royalty
rates. The future minimum royalties under these leases
 
as of March 31, 2023 are as follows:
(in US$ thousands)
Amount
Year ending
 
December 31,
20222023
$
3,487
2023
4,8684,043
2024
4,7714,736
2025
4,6434,629
2026
4,5814,500
2027
4,474
Thereafter
23,05623,711
Total
$
45,40646,093
Mineral leases are not in scope of ASC 842 and continue to
 
be accounted for under the guidance in ASC 932,
Extractive Activities – Mining.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED(b)
 
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
17
(b)
Other commitments
As of
 
September
30, 2022,March 31, 2023,
 
purchase
commitments
for
 
capital expenditures were
 
were $
33.626.6
 
million, all
 
all of which is
 
which
isobligated
obligated within the next twelve months.
In Australia, the
 
Company has generally
 
secured the ability
 
to transport coal
 
through rail contracts
 
and coal export
terminal contracts that are primarily funded
 
through take-or-pay arrangements with
terms ranging up to
913 years
.
 
In
the
U.S.,
the
Company
 
typically
negotiates
its
rail
 
and
coal
terminal
access
 
on
an
annual
basis.
 
As
of March
September
30,
2022,
31, 2023, these
Australian
and
U.S.
 
commitments
under
take-or-pay
 
arrangements
totaled
$
1.00.9
 
billion, of which
approximately $
101.696.0
 
million is obligated within the next twelve months.
14.15.
 
Contingencies
In the
 
normal course
 
of business,
 
the Company
 
is a
 
party to
 
certain guarantees
 
and financial
 
instruments with
off-balance sheet
 
risk, such
 
as letters
 
of credit
 
and performance
 
or surety
 
bonds.
No
 
liabilities related
 
to these
arrangements are reflected
 
in the Company’s
 
unaudited Condensed Consolidated Balance Sheets.
 
Management
does not expect any material losses to result from these
 
guarantees or off-balance sheet financial instruments.
At
September
30,
2022,
the
Company
had
outstanding
bank
guarantees
of
$
43.8
million
to
secure
various
obligations and commitments.
Restricted deposits represent cash deposits
held at third parties asAs required
 
by certain
agreements, entered into
by the
 
Company to
provide cash collateral.
The Company had
 
cash collateral in
 
in the form
 
form of
deposits in
 
the amount
of
of $
88.486.5
 
million and
$
81.089.1
 
million as of
 
of September
30, 2022March 31, 2023
 
and December 31,
 
31, 2021,
2022, respectively,
 
to provide back-to-
back-to-back
back support
 
for
bank
 
guarantees,
 
financial
 
payments,
 
other
performance
 
obligations,
various
 
other
operating agreements
 
operating
agreements and contractual
 
contractual obligations under
 
under workers compensation
 
compensation insurance. These
 
These deposits
are restricted
restricted and classified as long-term assets in the unaudited Condensed
 
Condensed Consolidated Balance Sheets.
 
In accordance
 
with the
 
terms of
 
the ABL
 
Facility,
 
the Company
 
may be
 
required
 
to cash
 
collateralize
 
the ABL
Facility to the extent of outstanding letters of credit after the expiration or termination date of such letter of credit.
As of September 30, 2022,March 31, 2023,
no
 
letter of credit was outstanding and
no
 
cash collateral was required.
For the U.S. Operations in order to provide the required financial assurance, the Company generally uses surety
bonds
 
for
 
post-mining
 
reclamation.
 
The
 
Company
 
can
 
also
 
use
 
bank
 
letters
 
of
 
credit
 
to
 
collateralize
 
certain
obligations.
As of
 
September 30, 2022,March
31, 2023,
 
the
Company
had
 
outstanding
surety
 
bonds
of $
31.937.6
 
million and letters
of credit
 
letters
of
credit of $
16.8
 
million issued from our available bank guarantees,
 
from our
available bank
guarantees, to
meet contractual
obligations under
workers
compensation insurance and to secure other obligations
 
and tocommitments.
 
secure other
For
 
the
Australian
Operations,
the
Company
had
bank
guarantees
outstanding
of
$
25.5
million
at
March
31,
2023, primarily in respect of certain rail and port arrangements
of the Company.
As at March
31, 2023, the
Company had total
outstanding bank guarantees
provided of $
42.3
million to secure
obligations and
 
commitments. Future
 
regulatory changes
 
relating to
to these obligations
could result
in increased
obligations, additional
costs or additional collateral requirements.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATE
MENTS (Continued)
Coronado Global Resources Inc.
Form 10-Q March 31, 2023
16
Stamp duty on Curragh acquisition
On September 27, 2022, the Company received from
 
the Queensland Revenue Office, or QRO,
 
an assessment
of the stamp duty
 
payable on its
 
acquisition of the Curragh
 
mine in March
 
2018. The QRO assessed
 
the stamp
duty
 
on
 
this
 
acquisition
 
at
 
an
 
amount
 
of
 
$
53.555.2
 
million
 
(A$
82.2
 
million)
 
plus
 
unpaid
 
tax
 
interest
 
of
 
$
7.98.1
 
million
(A$
12.1
 
million). The
On
November
23,
2022,
the
 
Company intends
 
to lodgefiled
 
an
objection
 
to
the
 
assessment within
 
the requiredand
 
timeframeis
currently
and beforeawaiting the endoutcome of November 2022.this objection. The outcome of this
 
this objection is uncertain.
 
The Company
has reviewed
the assessment
received
and based
on legal
and valuation
advice it
has sought,
continues
 
to
maintain
its
 
position
and
the
 
estimated
accrual
of
$
28.028.9
 
million
(A$ (A$
43.0
 
million) stamp
duty payable
on the
Curragh acquisition
based on
legal and
valuation advice
obtained. The
Company made
a
partial payment to date of the stamp duty reducing the estimated
accrual to $
11.6
million (A$
17.3
million), which
is included
 
within
 
“Accrued
Expenses
 
and
Other
 
Current
 
Liabilities”
 
in
 
its
unaudited
 
Condensed
 
Consolidated
Balance
sheet,
 
as
at
September 30, 2022. March 31, 2023.
 
From time to time, the
 
the Company becomes a
 
a party to other legal
 
legal proceedings in the
 
ordinary course of business
in Australia, the U.S. and other countries where the Company does business.
 
Based on current information, the
Company believes that such other pending
 
or threatened proceedings are likely to
 
be resolved without a material
adverse
 
effect
 
on
 
its
 
financial
 
condition,
 
results
 
of
 
operations
 
or
 
cash
 
flows.
 
In
 
management’s
 
opinion,
 
the
Company is not currently
 
involved in any legal
 
proceedings, which individually
 
or in the aggregate
 
could have a
material effect on the financial condition, results of
 
of operations and/or liquidity of the Company.
16.
Subsequent Events
New asset-based revolving credit facility
On May
8, 2023,
or the
Signing Date,
the Company,
Coronado Coal
Corporation, a
Delaware corporation
and
wholly owned subsidiary
of the Company,
Coronado Finance Pty
Ltd, an Australian
proprietary company
and a
wholly owned
subsidiary of
the Company,
or an
Australian Borrower,
Coronado Curragh
Pty Ltd,
an Australian
proprietary company and wholly owned subsidiary of the Company, or an Australian Borrower and, together with
the
other
Australian
Borrower,
the
Borrowers,
and
the
other
guarantors
party
thereto,
collectively
with
the
Company,
the
Guarantors
and,
together
with
the
Borrowers,
the
Loan
Parties,
entered
into
a
senior
secured
asset-based revolving credit agreement in an initial aggregate amount of
$
150.0
million, or the New ABL Facility,
with Global Loan Agency Services
Australia Pty Ltd, as the
Administrative Agent, Global Loan
Agency Services
Australia Nominees Pty Ltd, as
the Collateral Agent, the
Hongkong and Shanghai Banking
Corporation Limited,
Sydney Branch,
as the
Lender,
and DBS
Bank Limited,
Australia Branch,
as the
Lender and,
together with
the
other Lender, the Lenders.
Upon satisfaction of the stipulated conditions
precedent to closing under the New
ABL Facility,
which conditions
include,
among
other
things,
completion
of
a
field
examination
by
an
independent
third-party
assessor,
and
satisfactory right
of entry
arrangements being
entered into
in relation
to certain
Australian ports
utilized by
the
Company for
shipment of
coal, the
New ABL
Facility will
replace the
predecessor ABL
Facility.
The conditions
precedent under
the New
ABL Facility
need to
be satisfied,
or waived,
on or
before the
date that
falls 60
days
after the Signing Date, or such later date as agreed between the Company
and each lender under the New ABL
Facility.
The New ABL
Facility will
mature
three years
after the
Signing Date
and will provide
for up to
$
150.0
million in
borrowings, including a $
100.0
million sublimit for the issuance of letters of credit and
$
70.0
million sublimit as a
revolving credit facility. Availability under the
New ABL Facility
is limited to
an eligible borrowing
base, determined
by applying customary advance rates to eligible accounts
receivable and inventory.
The New
ABL Facility
is guaranteed
by the
Guarantors.
Amounts outstanding
under the
New ABL
Facility are
secured by
(i) first
priority lien
in the
accounts receivable
and other
rights to
payment, inventory,
intercompany
indebtedness, certain general
intangibles and commercial tort
claims, commodities accounts,
deposit accounts,
securities accounts
and other
related assets
and proceeds
and products
of each
of the
foregoing, collectively,
the New ABL
Collateral, and
(ii) a second-priority lien
on substantially all
of the Company’s assets
and the assets
of the
guarantors, other than
the New ABL
Collateral, and (iii)
solely in the
case of the
obligations of the
Australian
Borrower, a featherweight
floating security interest over certain
assets of the Australian Borrower,
in each case,
subject to certain customary exceptions
Borrowings under the New
ABL Facility bear interest
at a rate per
annum equal to applicable
rate of
2.80
% and
BBSY,
for loans denominated in A$, or SOFR, for loans
denominated in U$, at the Borrower’s election.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
 
FINANCIAL STATEMENTSSTATE
 
MENTS (Continued)
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
1817
15.The New
 
Subsequent EventsABL 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.
The
New
ABL
Facility
provides
for
customary
events
of
default,
including,
among
other
things,
the
event
of
nonpayment
of
principal,
interest,
fees,
or
other
amounts,
a
representation
or
warranty
proving
to
have
been
materially incorrect when made, failure to perform or observe certain covenants within a specified period of time,
a cross-default to certain material indebtedness,
the bankruptcy or insolvency of
the Company and certain of its
subsidiaries,
monetary
judgment
defaults
of
a
specified
amount,
invalidity
of
any
loan
documentation,
and
Employee Retirement
Income Security
Act, or
ERISA, defaults
resulting in
liability of
a material
amount. In
the
event of a
default by the Borrowers (beyond
any applicable grace or cure
period, if any), the
Administrative Agent
may and, at the direction
of the requisite number of Lenders, shall
declare all amounts owing under the
New ABL
Facility immediately due and payable, terminate such
Lenders’ commitments to make loans under the New
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
New ABL Facility. For certain
defaults related to
insolvency and receivership,
the commitments
of the Lenders
will be automatically
terminated, and
all outstanding
loans and other
amounts
will become
immediately due
and payable.
A review
event will
occur under
the New
ABL Facility
if any
one or
more of
the following
occurs: (a)
downgrade of
the credit
rating by
S&P or
Moody’s
in respect
of a
Loan Party
which applies as at
the Closing Date; (b)
change of control occurs;
or (c) delisting of
any listed Loan
Party from
the relevant stock
exchange on which
it was listed or
a trading halt in
respect of such
Loan Party for more
than
5 business days. 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.
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
New
ABL
Facility
immediately
due
and
payable, terminate such Lenders’
commitments to make loans
under the New 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 New ABL Facility.
Curragh Housing Transaction
On OctoberMay 8, 2023,
 
30, 2022,the Company entered into an
agreement for accommodation services and to
sell and leaseback
housing and
accommodation
assets included
in property,
plant and
equipment. The
transaction did
not satisfy
the
sale
criteria
under
ASC
606
–
Revenues
with
Contracts
with
Customers
and
was
deemed
a
financing
arrangement. As a result, the Company continued to recognize
the underlying property,
plant and equipment on
its
condensed
consolidated
balance
sheet.
The
proceeds
of
$
23.2
million
(A$
34.6
million)
received
from
the
transaction will
be recorded as
“Other Financial
Liabilities” on
 
the Company’s
 
Board ofcondensed consolidated
 
Directors declared
a total
unfranked special
dividend of
$balance
225.0sheet. The term of the financing arrangement is
million, or
13.4ten years
 
cents perwith an effective interest rate of
12.8
%.
 
CDI, comprising
In connection with this transaction, the
 
Company borrowed an additional amount of $
23.527.1
 
million of(A$
40.4
 
million)
which will be recorded in “Interest Bearing Liabilities”. The term of the unacceptedarrangement
 
portion ofis
ten years
 
the offer
to purchase
thewith an effective
Notes madeinterest rate of
12.8
in
%.
connection
In line
 
with the
 
ordinaryCompany’s
 
dividendscapital management
 
declared onstrategy,
 
Augustthe above
 
8, 2022,transactions provide
 
plusadditional liquidity.
 
an additionalIn
addition,
 
$
201.5
million. CDIs
will be
quoted as
“ex” dividend
on November
18, 2022,
Australia time.
The dividends
will have
a
record date of
November 21, 2022
, Australia
time, and
be payable
on
December 12, 2022
, Australia
time. The
total ordinary dividends of $
225.0
million will be funded from available cash.
In connection with the declared ordinary dividends, Coronado Finance Pty
Ltd, a wholly-owned subsidiary of the
Company, offered
to purchase up to $
200.0
million aggregate principal amount of the
 
Notes at a purchase price
equalaccommodation
 
toservices
104
%component
 
of
 
the
 
principalarrangement
 
amountis
 
ofanticipated
to
enhance
 
the
 
Notes,level
 
plus
accrued
and
unpaid
interest
to,
but
excluding,
theof
settlement date, pursuant to the terms of the
Indenture. The payment of the ordinary
dividends is not contingent
on acceptance of the offer to purchase the Notes
by the Note holders.service for our employees at our Curragh mine.
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
1918
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
(the
Company)
as
 
of September 30, 2022,
March
31,
2023,
the
 
related
condensed
consolidated
statements
of
operations
and
comprehensive
 
income
 
for
 
the
 
three
and
nine-monththree-month
 
periods
 
ended
 
September
30,
2022
and
2021,
the
condensed consolidated
statements of
stockholders’ equity
for the
three-month periods
ended March
 
31,
 
June2023
and
2022,
the
condensed
30 and September 30, 2022 and 2021, the condensed consolidated statements of cash flowsstockholders’ equity for the nine-monththree-month period ended March 31, 2023 and 2022, the
periods ended Septembercondensed consolidated statements
 
30, 2022 and 2021,of cash flows
 
andfor the three-month
period ended March
31, 2023 and
2022,
and
the
related
 
notes (collectively
(collectively
referred
 
to
as
the “condensed
“condensed
consolidated
interim
financial
 
statements”).
Based on our
 
our reviews,
we are
 
not aware of
 
of any
material modifications
that should
be made
to the
 
condensed
consolidated interim
financial statements
for them
to be
 
in conformity
with U.S.
U.S. generally accepted
accounting
principles.
 
We
 
have
 
previously
 
audited,
 
in
 
accordance
 
with
 
the
 
standards
 
of
 
the
 
Public
 
Company
 
Accounting
 
Oversight
Board (United States) (PCAOB), the
 
consolidated balance sheet of the Company
 
as of December 31, 2021,2022, the
related consolidated statements
 
of operations
 
and comprehensive
 
income, stockholders'
 
equity and cash
 
flows
for the year then ended, and
 
the related notes (not presented herein), and
 
in our report dated February 22, 2022,21, 2023,
we
 
expressed
 
an
 
unqualified
 
audit
 
opinion
 
on
 
those
 
consolidated
 
financial
 
statements.
 
In
 
our
 
opinion,
 
the
information set
 
forth in
 
the accompanying
 
condensed consolidated
 
balance sheet
 
as of December
 
31, 2021,2022,
 
is
fairly stated, in all material
 
respects, in relation to the consolidated balance
 
sheet from which it has been
derived.
Basis for Review Results
 
These financial
 
statements
 
are the
 
responsibility
 
of the
 
Company's
 
management.
 
We
 
are a
 
public accounting
firm registered with the PCAOB and are required
 
to be independent with respect to the Company
 
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
NovemberMay 8, 2022.2023.
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
2019
ITEM 2.
 
MANAGEMENT’S DISCUSSION
 
AND ANALYSIS
 
OF FINANCIAL
 
CONDITION AND
 
RESULTS
 
OF
OPERATIONS
The following
 
Management’s Discussion
 
and Analysis
 
of our Financial
 
Condition and
 
Results of
 
Operations, or
MD&A, should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the
related notes to
 
those statements included
 
elsewhere in this
 
Form 10-Q. In addition,
 
this Form 10-Q report
 
should
be read in conjunction
 
with the Consolidated
 
Financial Statements for
 
year ended December 31,
 
20212022 included
in Coronado Global Resources Inc.’s
 
Inc.’s Annual Report on Form 10-K for
 
for the year ended December 31, 2022,
 
31, 2021, filed
with
 
the
 
U.S.
 
Securities
 
and
 
Exchange
 
Commission,
 
or
 
SEC,
 
and
 
the
 
Australian
 
Securities
 
Exchange,
 
or
 
the
ASX, on February 22, 2022.21, 2023.
Unless otherwise
 
noted,
 
references
 
in this
 
Quarterly
 
Report on
 
Form 10-Q
 
to “we,”
 
“us,”
 
“our,”
 
“Company,”
 
or
“Coronado” refer
 
to Coronado
 
Global Resources
 
Inc. and
 
its consolidated
 
subsidiaries and
 
associates, unless
the context indicates otherwise.
All production and sales volumes contained in this Quarterly Report on Form 10-Q
 
are expressed in metric tons,
or Mt,
 
millions of
 
metric tons,
 
or MMt,
 
or millions
 
of metric
 
tons per
 
annum, or
 
MMtpa, except
 
where otherwise
stated. One Mt
 
(1,000 kilograms) is equal
 
to 2,204.62 pounds and
 
is equivalent to 1.10231
 
short tons. In addition,
all
 
dollar
 
amounts
 
contained
 
herein
 
are
 
expressed
 
in
 
United
 
States
 
dollars,
 
or
 
US$,
 
except
 
where
 
otherwise
stated.
 
References
 
to
 
“A$”
 
are
 
references
 
to
 
Australian
 
dollars,
 
the
 
lawful
 
currency
 
of
 
the
 
Commonwealth
 
of
Australia. Some numerical figures included in this Quarterly Report
 
on Form 10-Q have been subject to rounding
adjustments. Accordingly, numerical figures shown as
 
totals in certain
 
tables may not
 
equal the sum
 
of the figures
that precede them.
CAUTIONARY NOTICE REGARDING FORWARD
 
-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as
 
amended, and Section 21E of the Securities
 
Exchange Act of 1934, as amended,
or the Exchange
 
Act, concerning
 
our business,
 
operations, financial
 
performance and
 
condition, the
 
coal, steel
and other industries, the impact of the
 
COVID-19 pandemic and related governmentalother
 
and economic responsesindustries,
thereto, as well
 
as
our
plans,
objectives
 
and
expectations
for
our
 
business,
operations,
financial performance and
performance
and
condition.
Forward-looking
statements
may
be
 
identified
by
words
such
 
as “may,
“may,” “could,” “believes,” “estimates,
“could,”
“believes,”
“estimates,”
“expects,”
 
“intends,”
 
“plans,”
 
“anticipate,”
 
“forecast,”
 
“outlook,”
 
“target,”
 
“likely,”
“considers”
and
other
similar
words.
Any
 
forward-looking
 
statements
 
involve
 
known
 
and
 
unknown
 
risks,
 
uncertainties,
 
assumptions
 
and
 
other
important factors that
 
could cause actual
 
results, performance,
 
events or outcomes
 
to differ
 
materially from
 
the
results,
 
performance,
 
events
 
or
 
outcomes
 
expressed
 
or
 
anticipated
 
in
 
these
 
statements,
 
many
 
of
 
which
 
are
beyond
 
our
 
control.
 
Such
 
forward-looking
 
statements
 
are
 
based
 
on
 
an
 
assessment
 
of
 
present
 
economic
 
and
operating
 
conditions
 
on
 
a
 
number
 
of
 
best
 
estimate
 
assumptions
 
regarding
 
future
 
events
 
and
 
actions.
 
These
factors are difficult to accurately predict and may be beyond our control. Factors that could affect our results, our
announced plans, or an investment in our securities include,
 
plans,
including
our
plan
to
issue
dividends
and
distributions,
or
an
investment
in
our
securities
include, but are not limited to:
●
 
the prices we receive for our coal;
●
 
uncertainty in
 
global economic
 
conditions, including
 
the extent,
 
duration and
 
impact of
 
the Russia
 
and
Ukraine war, as well as risks related to government actions with respect to trade agreements, treaties or
policies;
●
 
a decrease in
 
the availability or increase
 
in costs of
 
key supplies, capital equipment
 
or commodities, such
as diesel fuel, steel, explosives and tires;tires, as the result
of inflationary pressures or otherwise;
●
 
the extensive forms of taxation
 
that our mining operations
 
are subject to, and future
 
tax regulations and
developments.
For
example,
 
the
recent
amendments
to
 
the
coal
 
royalty
regime
announced implemented
 
by
the Queensland
Queensland
state
Government
in
 
Australia
in 2022 introducing
 
additional
higher
tiers
to
the
 
coal royalty rates
 
royalty
rates
applicable to our
Australian Operations;
●
 
severe financial
 
hardship,
 
bankruptcy,
 
temporary or
 
permanent shut
 
downs or
 
operational
challenges,
due to
future public
health crisis
(such as
COVID-19) or otherwise,
of one
or more
of our
major customers,
including customers in the steel industry,
key suppliers/contractors, which among
other adverse effects,
could
lead
 
to
 
future
public
health
crisis
(such
as
the
COVID-19
pandemic),
of
one
or
more
of
our
major
customers,
including
customers
in
the
steel
industry,
key
suppliers/contractors,
which
among
other
adverse effects,
could lead
to reduced
 
demand for
our coal,
increased difficulty
collecting receivables
and
customers
and/or
suppliers
asserting
force
majeure
or
other
reasons
 
for
 
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;
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
21
●
our ability to generate sufficient cash to service
our indebtedness and other obligations;20
●
 
our indebtedness and ability to
 
comply with the covenants and other
 
undertakings under the agreements
governing such indebtedness;
●
 
our
 
ability
 
to
 
collect
 
payments
 
from
 
our
 
customers
 
depending
 
on
 
their
 
creditworthiness,
 
contractual
performance or otherwise;
●
 
the demand for steel products, which impacts the demand for
 
our metallurgical, or Met, coals;coal;
●
 
risks inherent to
 
mining operations could
 
impact the amount
 
of coal produced,
 
cause delay or
 
or suspend
coal deliveries, or increase the cost of operating our business;
●
 
the loss of, or significant reduction in, purchases by our
 
largest customers;
●
 
risks unique to international mining and trading operations,
 
including tariffs and other barriers to trade;
●
 
unfavorable economic and financial market conditions;
●
 
our ability to continue acquiring and developing coal reserves
 
that are economically recoverable;
●
 
uncertainties in estimating our economically recoverable coal
 
reserves;
●
 
transportation for our coal becoming unavailable or uneconomic
 
for our customers;
●
 
the risk
 
that we
 
may
 
be required
 
to pay
 
for unused
 
capacity
 
pursuant
 
to the
 
terms
 
of our
 
take-or-pay
arrangements with rail and port operators;
●
 
our ability to retain key personnel and attract qualified
 
personnel;
●
 
any failure to maintain satisfactory labor relations;
●
 
our ability to obtain, renew or maintain permits and consents
 
necessary for our operations;
●
 
potential costs or liability under applicable environmental
 
laws and regulations, including with respect
 
to
any
 
exposure
 
to
 
hazardous
 
substances
 
caused
 
by
 
our
 
operations,
 
as
 
well
 
as
 
any
 
environmental
contamination our properties may have or our operations
 
may cause;
●
 
extensive regulation of our mining operations and future
 
regulations and developments;
●
 
our
 
ability
 
to
 
provide
 
appropriate
 
financial
 
assurances
 
for
 
our
 
obligations
 
under
 
applicable
 
laws
 
and
regulations;
●
 
assumptions underlying our asset retirement obligations
 
for reclamation and mine closures;
●
 
concerns
 
about
 
the
 
environmental
 
impacts
 
of
 
coal
 
combustion,
 
including
 
possible
 
impacts
 
on
 
global
climate issues, which could result
 
in increased regulation of
 
coal combustion and requirements to
 
reduce
greenhouse gas,
 
or GHG,
 
emissions in
 
many jurisdictions,
 
which could
 
significantly affect
 
demand for
our products or our securities and reduced access to capital
 
and insurance;
●
 
any cyber-attacks or other security breaches that disrupt
 
our operations or result in the dissemination of
proprietary or confidential information about us, our customers
 
or other third parties;
●
 
the risk that we may not recover our investments in our mining, exploration and other assets, which may
require us to recognize impairment charges related to those assets;
●
 
risks related to divestitures and acquisitions;
●
 
the risk that diversity in interpretation and application of accounting principles in the mining industry may
impact our reported financial results; and
●
 
other
 
risks
 
and
 
uncertainties
 
detailed
 
herein,
 
including,
 
but
 
not
 
limited
 
to,
 
those
 
discussed
 
in
 
“Risk
Factors,” set forth in Part II, Item 1A of this Quarterly Report
 
on Form 10-Q.
 
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
22
We
 
make
 
many
 
of
 
our
 
forward-looking
 
statements
 
based
 
on
 
our
 
operating
 
budgets
 
and
 
forecasts,
 
which
 
are
based upon
 
detailed assumptions.
 
While we
 
believe that
 
our assumptions
 
are reasonable,
 
we caution
 
that it
 
is
Coronado Global Resources Inc.
Form 10-Q March 31, 2023
21
very difficult to
 
predict the impact
 
of known factors,
 
and it is
 
impossible for us
 
to anticipate all
 
factors that could
affect our actual results.
See Part I, Item
 
1A. “Risk Factors”
 
of our Annual Report
 
on Form 10-K for
 
the year ended December
 
31, 2021,2022,
filed with the SEC
and ASX on February
22, 2022, and
Part II, Item 1A.
“Risk Factors” of
our Quarterly Reports
on Form 10-Q
for the quarterly
periods ended March
31, 2022 and
June 30, 2022,
filed with the
SEC and ASX
on May 9, 2022 and
August 8, 2022, respectively,
21, 2023, for a more complete discussion
 
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
 
by these forward-looking statements.
 
All
 
forward-looking
 
statements
 
attributable
 
to
 
us
 
are
 
expressly
 
qualified
 
in
 
their
 
entirety
 
by
 
these
 
cautionary
statements, as well as others
 
made in this Quarterly Report on Form
 
10-Q and hereafter in our other
 
filings with
the
 
SEC
 
and
 
public
 
communications.
 
You
 
should
 
evaluate
 
all
 
forward-looking
 
statements
 
made
 
by
 
us
 
in
 
the
context of these risks and uncertainties.
We caution you that the risks and uncertainties identified by us may not be all of the factors that are important to
you.
 
You
 
should
 
not
 
interpret
 
the
 
disclosure
 
of
 
any
 
risk
 
to
 
imply
 
that
 
the
 
risk
 
has
 
not
 
already
 
materialized.
Furthermore, the
 
forward-looking statements
 
included in this
 
Quarterly Report
 
on Form 10-Q
 
are made only
 
as
of the date
 
hereof. We
 
undertake no
 
obligation to
 
publicly update
 
or revise
 
any forward-looking
 
statement as
 
a
result of new information, future events, or otherwise, except
 
as required by applicable law.
Overview
We
 
are
 
a
 
global
 
producer,
 
marketer
 
and
 
exporter
 
of
 
a
 
full
 
range
 
of
 
Met
 
coal
 
products.
 
We
 
own
 
a
 
portfolio
 
of
operating mines and development
 
projects in Queensland, Australia,
 
and in the states of
 
Pennsylvania,Virginia,
West Virginia
and West VirginiaPennsylvania in the United States.
 
Our Australian
 
Operations
 
comprise the
 
100%-owned
 
Curragh producing
 
mine complex.
 
Our U.S.
 
Operations
comprise
 
two
 
100%-owned
 
producing
 
mine
 
complexes
 
(Buchanan
 
and
 
Logan),
 
one
 
100%-owned
 
idled
 
mine
complex (Greenbrier) and two development properties (Mon Valley
 
and Russell County). In addition to Met coal,
our Australian
 
Operations sell
 
thermal coal
 
domestically,
 
which is
 
used to
 
generate electricity,
 
to Stanwell
 
and
some thermal
 
coal in
 
the export
 
market. Our
 
U.S. Operations
 
primarily focus
 
on the
 
production of
 
Met coal
 
for
the North American domestic and seaborne export
 
export markets and also produce and sell some
 
sell some thermal coal that is
extracted in the process of mining Met coal.
 
For the
nine months
ended September
30, 2022,
we produced
11.6
MMt and
sold 12.4
MMt of
coal. Met
coal
sales represented 78.4%
of our total
volume ofCoking coal
 
sold and 96.2%
of total coal
revenues for the
nine months
ended September 30, 2022.
Coking
coal
index
prices
 
declined
during
the
three
months
ended
September
30,
2022,
comparedhave continued
 
to increase
 
record
quarter
price
and
revenues
for
the
three
months
ended
June
30,
2022,
due
to
slower
global
growth
outlook
impacting
demand,
higher
inflation,
and
a
continuation
of
the
COVID-19
lockdowns
in
China.
Prices
largely
stabilized in the
 
month of Septemberfirst quarter
 
2022, supported byof 2023
 
compared to
fourth quarter
of
2022, primarily driven by supply constraints from
in key Met coal
 
markets caused
by wet weather amidst mild demand
recovery from
Indian and logistical issues.
Southeast Asian
steelmakers. The
Australian Premium
Low Volume
Index averaged
$335 per Mt during Q1 2023, $60 per Mt above Q4 2022, however,
$153 per Mt below Q1 2022.
 
Coronado has
 
continued to
 
take advantage
 
of its
 
unique geographical
 
diversification as
 
a Met
 
coal supplier
 
of
scale to meet the requirements of steel customers across the globe. Our U.S. Operations have taken advantage
of current unique market fundamentals created
 
by the trade restrictions on Russian coal
 
coal by switching coal sales
from
China
to
Europe
providing
higher
returns
for
our
 
products.
 
In
addition
to
geographical
diversification,
Coronado is well positioned
to take advantage of
the current price arbitrage
between the Thermal
and Met coal
markets to maximize price realizations.
Our results for the ninethree months ended September 30, 2022 benefited
March 31, 2023, were adversely impacted
by (1) significant wet weather
events impacting
production
at our
Australian Operations
,
(2) continued
inflationary
pressure (3)
reduced coal
availability from higher
equipment breakdown,
(4) a
train derailment
on the
Blackwater line
which impacted
our sales
volume, (5) lower
average realized Met
 
price per
Mt sold
 
partially offsetcompared to first
quarter of 2022
and (6) higher sales
related costs (royalties and freight costs).
For the three months ended March 31, 2023, we produced and sold 3.7 MMt of coal. Met coal sales represented
74.7% of our
total volume
of coal sold
and 88.8% of
total coal revenues
for the three
months ended
March 31,
2023.
Coal revenues of $738.3
million for the three
months ended March 31,
2023, decreased by 21.2%
compared to
the same
period in
2022, driven
 
by (1) significantdecreased
 
average realized
Met price
per Mt
sold from
$266.5 to
$239.7.
Sales volumes
were lower
for the
three months
ended March
31, 2023,
compared to
the same
period in
2022
due to lower production primarily driven by higher than anticipated wet weather events
impacting production at
our Australian Operati
ons,
(2) inflationary
pressure, including
higher cost
of fuel
and labor
costs, (3)
adverse geological
conditions at
our
U.S.
Operations
resulting
in
 
lower
production
and
higher
equipment
maintenance
costs,
(4)
additional
fleets coal availability
mobilized
at
 
our
 
Australian
 
Operations
 
tocombined
 
improvewith
 
coalshipping
 
recoverydelays
from
adverse
weather
at
our
U.S.
Operations.
Operating costs for
the three months
ended March 31,
2023, were $569.0
million, or 7.6%,
higher compared to
the corresponding period in
2022 primarily driven by
inflationary pressure on supply,
contractors and fuel costs,
additional
fleets
mobilized
since
March
31,
2022
 
and
 
(5)unplanned
 
higherequipment
 
sales
related
costs
(Stanwell
rebate, royalties and freight costs).
Coal revenues of $2.8 billion for the nine months
ended September 30, 2022 increased by 109.9% compared
to
the same
period
in
2021,
driven
by increased
average
realized
Met
price
per
Mt sold
from
$114.6
to
$279.4.
Sales volumes were lower for the nine months ended September 30,
2022 compared to the same period in 2021
primarily
due
to
lower
production
caused
by
significant
wet
weather
eventsbreakdown
 
at
 
our
 
Australian
Operations
and
adverse geological conditionsOperations and higher freight costs at our U.S. Operations.Operations
 
Operating costs for .
Liquidity
As of March 31, 2023,
the nine months ended September 30,Company’s net
cash position,
comprising of $498.0 million
cash (excluding restricted
cash) less
$242.3 million
aggregate principal
amount of Notes
outstanding,
was $255.7
million.
Coronado has
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
2322
2022 wereavailable
liquidity
of
 
$571.4 million,
or 48.3%,
higher compared
to the
corresponding period
in 2021
primarily driven
by
inflationary pressures,
additional contractor fleets
deployed at
our Australian
Operations to accelerate
overburden
removal to increase
coal availability,
higher maintenance
cost and higher
sales related costs,
such as Stanwell
rebate, royalties, freight and demurrage costs.
Dividends
On September 20,
2022, Coronado
settled its
previously declared
dividends totaling
$125.7 million
which were
paid to stockholders from available cash.
Liquidity
As of
September 30,
2022, the
Company’s net
cash position
was $385.7598.0
 
million
 
as
of
March
31,
2023,
consisting
of
 
cash (excluding
restricted cash) of $698.4
 
million and $312.7 million aggregate
principal amount of Notes outstanding.
Coronado
has available
liquidity of
$798.4 million
as of
September 30,
2022, comprising
cash (excluding(excluding
 
restricted
cash)
and
and undrawn available borrowings$100.0 million availability under our ABL facility.facility,
which remains fully undrawn.
Safety
For
 
our
 
Australian
 
Operations,
 
the
 
twelve-month
 
rolling
 
average
 
Total
 
Reportable
 
Injury
 
Frequency
 
Rate,
 
or
TRIFR, at
 
September 30,March 31,
 
20222023 was
 
4.153.18
compared to
 
a rate
 
of 3.073.92
 
at the
 
end of
 
December 31,
 
2021.2022. At
 
outour U.S.
U.S. Operations, the
 
the twelve
-monthtwelve-month rolling
 
average Total
 
Reportable Incident
 
Rate, or
 
TRIR, at
 
SeptemberMarch 31,
 
30,
20222023 was
2.062.43
compared to a rate of 2.51 2.42
at the end of December
31, 2021.2022.
 
Reportable rates for our Australian
and U.S.
Operations are below the relevant industry
benchmarks.
 
The safety
 
of our
 
workforce is our
 
number one priority
 
and Coronado remains
 
focused on the
 
safety and wellbeing
of all employees and contracting parties.
Segment Reporting
In accordance with
 
Accounting Standards Codification,
 
or ASC, 280,
 
Segment Reporting, we
 
have adopted the
following reporting
 
segments: Australia and
 
the United
 
States. In
 
addition, “Other and
 
Corporate” is
 
not a
 
reporting
segment but is disclosed for the purposes of reconciliation
 
to our consolidated financial statements.
Results of Operations
How We Evaluate Our Operations
We
 
evaluate
 
our
 
operations
 
based
 
on
 
the
 
volume
 
of
 
coal
 
we
 
can
 
safely
 
produce
 
and
 
sell
 
in
 
compliance
 
with
regulatory
 
standards,
 
and
 
the
 
prices
 
we
 
receive
 
for
 
our
 
coal.
 
Our
 
sales
 
volume
 
and
 
sales
 
prices
 
are
 
largely
dependent upon
 
the terms
 
of our
 
coal sales
 
contracts, for
 
which prices
 
generally are
 
set based
 
on daily
 
index
averages, on a quarterly basis or annual fixed price
contracts.
Our management
 
uses a
 
variety of
 
financial and
 
operating metrics
 
to analyze
 
our performance.
 
These metrics
are significant factors
 
in assessing our
 
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
 
non-produced coal)
for the
respective
segment; and
(vi) average
segment operating
costs
per Mt
sold, which we define as segment operating costs
divided by sales volumes for the respective segment.segment; and (vii)
net cash, which we define
as cash and cash equivalents
(excluding restricted cash) less
outstanding aggregate
principal amount of 10.750% senior secure notes due
2026.
Coal
 
revenues
 
are
 
shown
 
on
 
our
 
statement
 
of
 
operations
 
and
 
comprehensive
 
income
 
exclusive
 
of
 
other
revenues.
 
Generally,
 
export
 
sale contracts
 
for our
 
Australian
 
Operations
 
require
 
us to
 
bear the
 
cost
 
of freight
from our mines to the
 
the applicable outbound shipping
 
shipping port, while freight costs
 
costs from the port to the
 
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 coal
passes to
the customer
 
at the
 
mine load
 
out similar
 
to a
 
domestic sale.
 
For our
 
domestic
sales,
 
customers
 
typically
 
bear
 
the
 
cost
 
of
 
freight.
 
As
 
such,
 
freight
 
expenses
 
are
 
excluded
 
from
 
cost
 
of
 
coal
revenues to allow for consistency and comparability in
 
evaluating our operating performance.
Non-GAAP Financial Measures; Other
Measures
The
 
following
 
discussion
 
of
 
our
 
results
 
includes
 
references
 
to
 
and
 
analysis
 
of
 
Adjusted
 
EBITDA,
 
Segment
Adjusted EBITDA and mining
 
mining costs, which are financial
 
financial measures not recognized in
 
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.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
24
Adjusted EBITDA, a non-GAAP measure, is defined as earnings before interest, tax, depreciation, depletion and
amortization
 
and
 
other
 
foreign
 
exchange
 
losses.
 
Adjusted
 
EBITDA
 
is
 
also
 
adjusted
 
for
 
certain
 
discrete
 
non-
recurring items that we exclude in
 
analyzing each of our segments’
 
operating performance. Adjusted EBITDA
 
is
not intended to
 
serve as an
 
alternative to U.S. GAAP
 
measures of performance
 
and may not
 
be comparable to
similarly titled measures presented by
 
by other companies. A reconciliation
 
of Adjusted EBITDA to its
 
most directly
comparable measure under U.S. GAAP is included below.
 
Coronado Global Resources Inc.
Form 10-Q March 31, 2023
23
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
 
a non-GAAP measure, is
 
is based on
 
reported cost of
 
coal revenues, which
 
is shown
 
on our
 
statement
of
 
operations
 
and
 
comprehensive
 
income
 
exclusive
 
of
 
freight
 
expense,
 
Stanwell
 
rebate,
 
other
 
royalties,
depreciation,
 
depletion
 
and
 
amortization,
 
and selling,
 
general and
 
administrative
 
expenses,
 
adjusted for
 
other
items that do not relate directly to the costs incurred to produce coal at a mine. Mining costs excludes these cost
components as
 
our CODM
 
does not
 
view these
 
costs as
 
directly attributable
 
to the
 
production of
 
coal. Mining
costs
 
is
 
used
 
as
 
a
 
supplemental
 
financial
 
measure
 
by
 
management,
 
providing
 
an
 
accurate
 
view
 
of
 
the
 
costs
directly
 
attributable
 
to
 
the
 
production
 
of
 
coal
 
at
 
our
 
mining
 
segments,
 
and
 
by
 
external
 
users
 
of
 
our
 
financial
statements, such as
 
investors, industry analysts and
 
ratings agencies, to assess
 
our mine operating
 
performance
in comparison to the mine operating performance of other companies
 
companies in the coal industry.
Three Months Ended September 30, 2022March 31, 2023 Compared to
 
to Three Months Ended September 30, 2021March 31, 2022
Summary
The financial and operational highlights for the three months ended
 
ended September 30, 2022March 31, 2023 include:
●
 
Net
income
of
$107.9
million
for
 
the
three
months
ended
 
September 30, 2022 ofMarch
31,
2023,
was
 
$150.6 162.0
million increased by
lower
compared
to
 
$68.6 million,
from a net
income of $82.0269.9
 
million
for
the
 
three
months
 
ended September 30,
 
2021.March
31,
2022.
 
This increase
was
driven
by
lower
driven revenues due
to lower
average realized
Met coal
price per
Mt sold,
lower sales
volume and
by higher revenues partially offset by higher costs
and income tax expense.operating costs.
●
 
Coking coal index
prices declined during
Sales volume totaled 3.7 MMt for the three months ended March 31, 2023, compared
 
to 4.4 MMt for the
three months ended September 30,March 31,
 
2022, however prices
remained above historical2022. The lower sales volumes
 
averages andwere largely driven by the
average for the
three months
ended September
30, 2021.
Elevated
pricing,
combined
with
the
fact
that
a
large
portion impact
 
of wet
weather
 
ourand
 
Metequipment
breakdown
on
production
performance
and
 
coal
 
salesavailability
 
at
 
our
 
Australian
Operations, isand a train derailment on the Blackwater line resulting in coal not being railed for two weeks
while repairs were undertaken.
●
 
priced on
a three-month
lag basis,
resulted in
averageAverage realized
Met price
 
per Mt sold
 
sold of
$253.0 for the three months
ended September 30, 2022, 75.7%
higher compared to $144.0
per Mt sold
for the same period in 2021.
●
Sales volume
totaled 4.1
MMt $239.7 for
 
the three
months ended
 
September 30,March 31, 2023,
 
2022,was 10.1%
lower compared to $266.5 per
 
to 4.6Mt sold for the same
 
MMt
forperiod in 2022 as the
 
three months
ended September
30, 2021.
The lower
sales volumes
were largely
driven by
theMet coal supply has readjusted
following the impact of unseasonal wet weatherRussia and Ukraine war on production performancethe global coal supply chain
 
at our Australian Operations.and supply constraints in
key Met coal markets during the first half of 2022.
●
 
Adjusted EBITDA for
 
the three months
 
ended September 30,March
 
202231, 2023, of $223.6
 
$190.7 million, an increase
 
a decrease of $75.9
$220.2
million compared
to $147.7$411.0
 
million for
the three
 
months ended March
 
ended September31, 2022, due to
 
30, 2021,
driven by
higher
lower coal sales
revenues partially offset byand higher
operating costs.
●
 
As of March
 
of
September
30,
2022,31, 2023,
 
the
Company
 
had
total
 
available
liquidity
 
of
$798.4 $598.0
 
million,
consisting
 
of $498.0
$698.4 million cash
(excluding (excluding restricted
cash) and $100.0
million of availability
 
under the ABL
Facility.
The ABL
Facility
is subject
to a
springing
fixed
charge
coverage
ratio
test if
availability
is less
than
a
certain amount.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
2524
Three months ended September 30,March 31,
2023
2022
2021
Change
%
(in US$ thousands)
Revenues:
Coal revenues
$
863,709738,345
$
563,287936,628
$
300,422(198,283)
53.3%(21.2%)
Other revenues
10,94827,369
10,30410,497
64416,872
6.3%160.7%
Total
 
revenues
874,657765,714
573,591947,125
301,066(181,411)
52.5%(19.2%)
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
385,504380,474
309,513357,500
75,99122,974
24.6%6.4%
Depreciation, depletion and amortization
37,50839,423
38,46138,009
(953)1,414
(2.5%)3.7%
Freight expenses
63,02663,353
58,04359,264
4,9834,089
8.6%6.9%
Stanwell rebate
54,57539,208
12,27429,053
42,30110,155
344.6%35.0%
Other royalties
137,33185,957
39,09983,032
98,2322,925
251.2%3.5%
Selling, general, and administrative expenses
10,4057,774
8,0447,876
2,361(102)
29.4%(1.3%)
Total
 
costs and expenses
688,349616,189
465,434574,734
222,91541,455
47.9%7.2%
Other income (expenses):
Interest expense, net
(17,220)(14,665)
(18,251)(17,332)
1,0312,667
(5.6%(15.4%)
 
Decrease (increase) in provision for
discounting and credit losses
123,988
2,430(428)
(2,418)4,416
(99.5%(1,031.8%)
Other, net
32,8983,042
(1,252)(2,790)
34,1505,832
(2,727.6%(209.0%)
Total
 
other income (expenses),expenses, net
15,690(7,635)
(17,073)(20,550)
32,76312,915
(191.9%(62.8%)
Net income before tax
201,998141,890
91,084351,841
110,914(209,951)
121.8%(59.7%)
Income tax expense
(51,423)(34,030)
(9,096)(81,943)
(42,327)47,913
465.3%(58.5%)
Net income attributable to Coronado Global
Resources, Inc.
$
150,575107,860
$
81,988269,898
$
68,587(162,038)
83.7%(60.0%)
Coal Revenues
Coal
revenues
 
were $738.3
million for
the three
months ended
March 31,
2023, a
decrease of
 
$863.7198.3 million,
compared
to
$936.6
 
million
 
for
 
the
 
three
 
months
 
ended
 
SeptemberMarch
 
30,31,
 
2022.
The
decrease
was
driven
by
lower
average realized Met coal price of
$239.7 per Mt sold for the three
months ended March 31, 2023, compared
to
$266.5 per Mt sold for the
same period in 2022 and lower coal
sales volume. Coal sales volume at our
Australian
Operations
were
down
by
0.6
MMt
due
to
reduced
production
from
higher
than
anticipated
wet
weather
and
equipment breakdown,
while sales volume for our U.S. Operations were 0.1 MMt
higher.
Other revenues
Other
revenues
were
$27.4
million
for
the
three
months
ended
March
31,
2023,
 
an
 
increase
 
of
 
$300.4
million, compared16.9
 
million
compared to $563.3 million for the$10.5
 
three months ended September
30, 2021. Supply concerns
from key
Met coal markets supported high index prices through the September 2022 quarter which resulted in an average
realized Met price
per Mt
sold of $253.0
million for the
 
three months ended
 
September 30, 2022,
75.7% higher compared
to $144.0
per Mt
sold
for the
same
period
in 2021.March 31, 2022.
 
This
increase was
 
partiallyprimarily driven by
 
offseta
one-off termination fee revenue from a coal sales contract
 
by lower
Met coal
sales
volume of 3.3 MMt for the three months
ended September 30, 2022, compared to 3.7 MMt in 2021,
primarily due
to above average rainfall impacting productioncancelled at our Australian
U.S. Operations.
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 $385.5 millionwere $380.5
 
for the three months
ended September 30,
2022, an increase
of
$76.0 million, or 24.6%, compared to $309.5 million for
 
the three
months ended September 30, 2021.
 
March 31,
2023, $23.0
million, or
6.4% higher,
compared to $357.5 million for the three months ended
March 31, 2022.
Our
Australian
Operations
 
contributed
$50.4
$12.0 million
 
to the increase
 
thein total cost of
 
increasecoal revenues, largely
driven
by the impact of continued inflationary pressure on contractors’
costs, fuel, and other supply costs and additional
fleet
mobilized
 
in
 
totalFebruary
 
cost
of
coal
revenues,
driven
by
additional
contractor
fleets
mobilized
to
accelerate
overburden
removal
to
increase
coal
availability,
and
inflationary
pressure,
including
higher
fuel
and
labor
costs,2022,
 
partially
 
offset
 
by
 
alower
purchased
coal
cost
and
 
favorable
 
average
 
foreign
exchange rate on
 
on translation
of the
 
Australian Operations for
 
for the
three months
 
ended SeptemberMarch 31,
 
30, 2022
2023, of
A$/US$:
0.68
compared to
 
0.740.72 for the
 
the same
period in
 
2021.2022. Cost
 
of coal revenues
 
revenues for
our U.S
 
Operations for
the three
months
ended September
30,
2022, was
$25.6
million
higher
compared
to the
 
three
months ended March 31,
 
ended
September 30,2023, was $11.0
 
2021,million higher compared to
 
the three months ended
March 31, 2022,
largely due
to the
continued impact of
inflation on
labor and
supply costs
 
and increased
purchased
coal transactions to meet sales commitments.
supply costs.
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
2625
Freight Expenses
Freight
expenses
 
includerelate to
 
costs
associated
 
with
take-or-pay
commitments
for
rail
 
and
port
 
providers,
 
andincluding
take-or-pay commitments
at
our
Australian
Operations,
and
demurrage
costs.
 
Freight
expenses
 
totaled $63.0
$63.4
million
for the
three
months
ended March 31, 2023, an increase of $4.1 million, compared to $59.3 million for the three months ended March
31, 2022. Our U.S. Operations’ freight
cost contributed $10.0 million to
this increase, driven by coal sales
under
certain contracts
for which
we arrange
and pay
for transportation
to port
that did
not exist
to the
same extent
during the
three months
ended March
31, 2022,
partially offset
by lower
sales volume
and a
favorable foreign
exchange rate on translation
of our Australian Operations.
Stanwell Rebate
The Stanwell rebate was $39.2 million for the three months ended March
31, 2023,
an increase of $10.1 million,
compared to $29.1 million for
the three months ended March
31, 2022. The increase was
largely driven by higher
realized export reference coal pricing for the prior twelve
-month period used to calculate the rebate.
Other Royalties
Other royalties
were $86.0
million
in the
three months
ended
March
31, 2023,
an increase
of $2.9
million, as
compared to $83.0 million for the three months ended March 31,
2022. Royalties have increased compared to a
significant decline in
coal revenues due
to the adverse
impact of the
new Queensland Government
royalty regime
effective
from July
1, 2022
to our
Australian Operations,
partially offset
by lower
sales volumes
and favorable
foreign exchange rate on translation
of our Australian Operations. The new
royalty regime has resulted in
$29.0
million additional royalty costs for the three months ended
March 31, 2023.
Decrease (increase) in Provision for Discounting and
Credit Losses
Decrease in provision for
discounting and credit losses of
$3.9 million in the
three months ended March 31,
2023,
a favorable movement of $4.4 million compared to increase in provision for discounting and credit losses of $0.4
million for the three months ended March 31, 2022. The lower provision was
primarily driven by timely collection
of trade receivables during the three months ended March
31, 2023.
Interest Expense, net
Interest expense,
net was
$14.7 million
in the
three months
ended March
31, 2023,
a decrease
of $2.7
million
compared to
$17.3 million
for the
three months
ended March
31, 2022.
The decrease
was due
to lower
Notes
outstanding during the three months ended March 31,
2023, following redemptions since March 31, 2023.
Income Tax Expense
Income tax
expense of
$34.0
 
million for
 
the three
 
months ended
 
SeptemberMarch 31,
 
30, 2022,2023, decreased
 
an
increase of
$5.0 million,
compared to
$58.0 million
for the
three months
ended September
30, 2021.
Our U.S.
Operations’ freight cost contributed
$7.1 million to this increase,
driven by coal sales
under certain contracts for
which we arrange and pay for transportation to port that did not exist to the same extent during the three months
ended September 30, 2021 and
higher demurrage costs,
offset by a $2.1 million
decrease in freight cost for our
Australian
Operations
due
to
lower
sales
volume
and
a
favorable
foreign
exchange
rate
on
translation
of
the
Australian Operations.
Stanwell Rebate
The Stanwell
rebate was
$54.6 million
for the
three months
ended September
30, 2022,
an increase
of $42.3
million, compared
to $12.3$47.9
 
million,
compared to a tax expense of $81.9 million for
the three
months ended
September 30,
2021. The
increase was
largely
driven by
higher realized
export
reference coal
pricing
for the
prior twelve
-month
period
used to
calculate
the
rebate partially offset by favorable average foreign
exchange rate on translation of the Australian
Operations.
Other Royalties
Other royalties were $137.3 million in the three months ended September 30,
March 31, 2022, an
increase of $98.2 million,
as compared to
$39.1 million for
the three months
ended September 30,
2021. Higher royalties
were a product
of
higher
coal
revenues
compared
to
the
same
period
in
2021.
Effective
July
1,
2022,
the
Queensland
Government amended
Mineral Resources
Regulation 2013
(Qld) introducing
additional higher
tiers to
the coal
royalty
rates
which
resulted
in
additional
royalties
at
our
Australian
Operations
of
$58.7
million
for
the
three
months ended September 30, 2022.
Other, net
Other,
net
was
$32.9
million
in
the
three
months
ended
September
30,
2022,
an
increase
of
$34.2
million
compared
to net
loss
of $1.3
million
for the
three
months
ended
September
30,
2021. The
increase
primarily
relates
to
foreign
exchange
gains
recognized
in
the
translation
of
short-term
intra-entity
balances
in
certain
entities within the group that are denominated in currencies
other than their respective functional currencies.
Income Tax (Expense) Benefit
Income tax expense of $51.4 million for the
three months ended September 30, 2022 increased by $42.3 million,
compared to
a tax
expense of
$9.1 million
for the
three
months
ended September
30, 2021,
driven by
higher lower income
income before tax in the 20222023 period.
The income
tax expense
for the
three months
ended September
30, 2022
is based
on an
annual effective
tax
rate of 24.8%.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
27
Nine months ended September 30, 2022 Compared
to Nine months ended September 30, 2021
Summary
The financial and operational highlights for the nine months
ended September 30, 2022 include:
●
Net income of
$712.5 million for
the nine months
ended September 30,
2022 increased by
$726.6 million,
from a net loss of
$14.1 million for the nine months
ended September 30, 2021.
The increase was driven
by revenues, partially offset by higher costs and higher
income tax expense.
●
Supply
concerns
in
key
Met
coal
markets,
including
the
continued
impact
of
the
Russian
invasion
of
Ukraine
on
global
supply
dynamics,
and
Met
coal
crossover
trades
into
the
thermal
market
caused
considerable volatility in coal pricing, resulting in average
realized Met price per Mt sold of
$279.4 for the
nine months
ended September
30, 2022,
143.8% higher
compared to
$114.6
per Mt
sold for
the nine
months ended September 30, 2021.
●
Sales volume totaled
12.4 MMt for
the nine months
ended September 30,
2022, or 1.1
MMt lower than
the nine
months ended September
30, 2021.
The lower sales
volumes were primarily
driven by
significant
wet weather
events at
our Australian
Operations and
adverse geological
conditions at
one of our
mine
complexes at our U.S. Operations.
●
Adjusted EBITDA for
the nine months
ended September
30, 2022 was
$1,072.9 million,
an increase of
$899.5 million, from Adjusted EBITDA of $173.4 million for the nine months ended September 30, 2021.
This increase was driven by higher coal revenues,
partially offset by higher operating costs.
●
Cash provided by
operating activities was $945.4
million for the nine
months ended September 30,
2022,
an increase of $774.3 million compared to $171.1 million
for the same period in 2021.
●
As of
September 30,
2022, the
Company
had net
cash of
$385.7 million,
consisting
of a
closing cash
balance
(excluding
restricted
cash)
of
$698.4
million
and
$312.7
million
aggregate
principal
amount
outstanding of the Notes.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
28
Nine months ended September 30,
2022
2021
Change
%
(in US$ thousands)
Revenues:
Coal revenues
$
2,821,334
$
1,344,253
$
1,477,081
109.9%
Other revenues
33,152
29,705
3,447
11.6%
Total
revenues
2,854,486
1,373,958
1,480,528
107.8%
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
1,140,467
889,771
250,696
28.2%
Depreciation, depletion and amortization
126,901
132,754
(5,853)
(4.4%)
Freight expenses
189,316
166,090
23,226
14.0%
Stanwell rebate
124,160
43,169
80,991
187.6%
Other royalties
299,711
83,219
216,492
260.1%
Selling, general, and administrative expenses
28,657
21,250
7,407
34.9%
Restructuring costs
—
2,300
(2,300)
(100.0%)
Total
costs and expenses
1,909,212
1,338,553
570,659
42.6%
Other income (expenses):
Interest expense, net
(52,034)
(49,982)
(2,052)
4.1%
Loss on debt extinguishment
—
(5,744)
5,744
(100.0%)
(Increase) decrease in provision for discounting
and credit losses
(572)
8,074
(8,646)
(107.1%)
Other, net
55,191
(3,610)
58,801
(1,628.8%)
Total
other income (expenses), net
2,585
(51,262)
53,847
(105.0%)
Net income (loss) before tax
947,859
(15,857)
963,716
(6,077.5%)
Income tax (expense) benefit
(235,391)
1,788
(237,179)
(13,265.0%)
Net income (loss)
712,468
(14,069)
726,537
(5,164.1%)
Less: Net loss attributable to noncontrolling
—
(2)
2
(100.0%)
Net income (loss) attributable to Coronado Global
Resources, Inc.
$
712,468
$
(14,067)
$
726,535
(5,164.8%)
Coal Revenues
Coal revenues
were $2,821.3
million for
the nine
months ended
September 30,
2022, an
increase of
$1,477.1
million, compared to $1,344.3
million for the nine
months ended September 30,
2021. This increase was
driven
by favorable market conditions and higher coal indices, which
resulted in a higher average realized Met price per
Mt sold for the nine months ended September 30, 2022 of $279.4, compared to $114.
6
per Mt sold for the same
period in 2021.
Cost of Coal Revenues (Exclusive of Items Shown
Separately Below)
Total
cost of coal revenues was $1,140.5 million for the nine months
ended September 30, 2022, an increase of
$250.7 million,
or 28.2%,
compared to
$889.8 million
for the
nine months
ended September
30, 2021.
Cost of
coal revenues for
our U.S. Operations
in the nine
months ended September
30, 2022 increased
by $117.1 million,
as compared
to the
same period
in 2021,
driven by
the impact
of inflation
on labor
and supply
costs, adverse
geological
conditions
in
certain
mines
of
our
U.S.
Operations
resulting
in
unplanned
maintenance
costs,
and
increased
purchased
coal
transactions
to
meet
sales
commitments.
Cost
of
coal
revenues
for
our
Australian
Operations in
the nine
months ended
September 30,
2022 increased
by $133.6
million,
compared to
the same
period in 2021, due to additional fleets mobilized to accelerate overburden removal, inflationary pressure
on fuel
pricing
and
labor
costs
and
increased
purchased
coal
transactions
to
meet
sales
commitments.
Higher
costs
were partially offset by a favorable average foreign exchange rate on translation
of the Australian Operations for
the nine months ended September 30, 2022 of A$/US$:
0.71 compared to 0.76 for the same period in 2021.
Depreciation, Depletion and Amortization
Depreciation, depletion
and amortization
was $126.9
million for the
nine months
ended September 30,
2022, a
decrease of
$5.9 million,
as compared
to $132.8
million for
the nine
months ended
September
30, 2021.
The
decrease
was
associated
with
favorable
average
foreign
exchange
rate
on
translation
of
the
Australian
Operations,
partially
offset
by
additional
equipment
brought
into
service
during
the
twelve
months
since
September 30, 2021.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
29
Freight Expenses
Freight expenses
totaled $189.3
million for
the nine
months ended
September 30,
2022, an
increase of
$23.2
million,
compared
to
$166.1
million
for
the
nine
months
ended
September
30,
2021.
Our
U.S.
Operations
contributed
to
$28.9
million
of
the
increase
due
to
certain
contracts
for
which
we
arrange
and
pay
for
transportation to port that
did not exist
to the same
extent in the nine
months ended September 30,
2021, partially
offset by the benefits of lower average foreign
exchange rate on translation of the Australian Operations.
Stanwell Rebate
The Stanwell
rebate was
$124.2 million
for the
nine months
ended September
30, 2022,
an increase
of $81.0
million, as compared to
$43.2 million for the
nine months ended September
30, 2021. The increase
was largely
driven by
higher realized
export
reference coal
pricing
for the
prior twelve
-month
period
used to
calculate
the
rebate, partially offset by
the favorable average foreign
exchange rate on
translation of the
Australian
Operations.
Other Royalties
Other royalties were
$299.7 million for
the nine months
ended September 30,
2022, an increase
of $216.5 million,
as compared to $83.2 million for the nine months ended September 30, 2021. Higher royalties were a product of
higher average realized export
pricing and the adverse impact
of the new royalty regime
applicable from July 1,
2022 to our Australian Operations.
Other, net
Other,
net
was
$55.2
million
in
the
nine
months
ended
September
30,
2022,
an
increase
of
$58.8
million
compared
to
a
net
loss
of
$3.6
million
for
the
nine
months
ended
September
30,
2021.
The
increase
largely
relates
to
foreign
exchange
gains
recognized
in
the
translation
of
short-term
inter-entity
balances
in
certain
entities within the group that are denominated in currencies
other than their respective functional currencies.
Income Tax (Expense) Benefit
Income tax
expense of
$235.4 million for
the nine
months ended September
30, 2022
increased by
$237.2 million,
as compared
to a
$1.8
million tax
benefit for
the nine
months ended
September
30, 2021,
primarily driven
by
higher income before tax in the 2022 period.
The income tax expense for the nine
three months ended September 30, 2022March 31, 2023, is based
on an annual effective tax
rate of
of 24.8%24.0%.
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
3026
Supplemental Segment Financial Data
Three months ended September 30, 2022March 31, 2023 compared to three months
 
three months ended September 30, 2021March 31, 2022
Australia
Three months ended September 30,March 31,
2023
2022
2021
Change
%
(in US$ thousands)
Sales volume (MMt)
2.42.2
2.8
(0.4)(0.6)
(12.9)(21.6)%
Total
 
revenues ($)
546,485398,661
342,372605,298
204,113(206,637)
59.6%(34.1)%
Coal revenues ($)
537,256390,804
332,558596,298
204,698(205,494)
61.6%(34.5)%
Average realized price per Mt sold ($/Mt)
221.8178.9
119.7214.1
102.1(35.2)
85.3%(16.4)%
Met sales volume (MMt)
1.71.5
2.01.8
(0.3)
(16.2)(15.0)%
Met coal revenues ($)
518,010372,519
306,033554,009
211,977(181,490)
69.3%(32.8)%
Average realized Met price per Mt sold ($/Mt)
313.0241.9
154.9305.8
158.1(63.9)
102.1%(20.9)%
Mining costs ($)
241,674236,056
180,837202,018
60,83734,038
33.6%16.8%
Mining cost per Mt sold ($/Mt)
99.8108.5
67.476.1
32.4
48.1%42.6%
Operating costs ($)
458,405385,226
275,782365,707
182,62319,519
66.2%5.3%
Operating costs per Mt sold ($/Mt)
189.3176.4
99.2131.3
90.145.1
90.8%34.3%
Segment Adjusted EBITDA ($)
88,03513,233
67,383238,968
20,652(225,735)
30.6%(94.5)%
Coal revenues for
our Australian Operations,
for the three months ended March 31, 2023, were $390.8 million, a
decrease of
$205.5 million
or 34.5%,
compared to
$596.3 million
 
for the
 
three months ended
 
September 30,ended March
 
2022 were31, 2022.
This decrease
 
$537.3 million,was driven
by lower
an increase
average realized
Met coal price
per Mt
sold of
 
$204.7 million or241.9 for
 
61.6%, comparedthe three
 
to $332.6 millionmonths
ended March
31, 2023, $63.9
lower than the
$305.8 per
Mt sold
 
for the threesame
 
period in
2022 as Met
coal price
index
readjusts
from record
highs
achieved
in
the
first
half of
2022.
The
decrease
was
exacerbated
by lower
sales
volume
of
0.6
MMt
due
to
higher
than
planned
wet
weather
and
equipment
breakdown
and
co-shipper
delays.
Operating costs increased
by $19.5 million,
or 5.3%, for
the three months
ended March
31, 2023, compared
to
the three months ended September
 
30,
2021. This increaseMarch 31, 2022. The
 
increase was largely driven
 
by a higher mining costs,
 
average realized Methigher Stanwell
rebate and higher royalties as a result of the new
 
price per Mtroyalty regime introduced by the Queensland government from
July
 
sold for the1,
 
three months
ended September 30,2022.
 
2022 ofMining
costs
were
 
$313.0 compared to34.0
 
$154.9 per Mtmillion,
 
sold foror 16.8%,
 
the same period
in 2021
due to
elevated
prices resulting from the
impact of supply concerns
from key Met markets such
as Australia and Canada. Sales
volume
of
2.4
MMt
decreased
by
0.4
MMt,
compared
to
2.8
MMthigher
 
for
 
the
 
three
 
months
 
ended
 
SeptemberMarch
 
30,
2021, largely31,
 
due to
above average
rainfall
at the
Curragh mine
complex
impacting coal
mining
activities
and2023,
production.
Operating
costs
increased
by
$182.6
million,
or
66.2%,
for
the
three
months
ended
September
30,
2022,
compared to
the three
months ended
September
30, 2021.
The increase
was
largely
driven by
higher mining
costs, Stanwell rebate (mainly due to
higher realized coal pricing) and other
royalties due to higher revenues and
the new
royalty regime
introduced by
the Queensland
government from
July 1,
2022. Mining
costs were
$60.8
million, or 48.1%, higher for the three months ended September 30, 2022 compared to the same period in 2021,
2022, primarily due
to inflationary
pressures
additional fleet mobilized in February 2022 and additional
contractor
fleets mobilized
in the
first half
of 2022
at ourcontinued
Australian
Operations,
partially
offset
by
favorable
average
foreign
exchange
inflationary pressures on
translation
of
our
Australian
Operations to US$. Increased costs including contractor costs and fuel costs. This combined with lower sales volumes volu
me
resulted into
a higher
Mining and
Operating cost
cost per Mt
sold of $32.4
$32.4 and $90.1,
$45.1, respectively,
 
compared to
the
same period in 2021.2022.
 
Segment Adjusted EBITDA of $88.0 million for the three months ended September 30, 2022 increased by $20.6
million compared
to
Adjusted
 
EBITDA
of
 
$67.413.2 million
 
for the
 
three
months
 
ended March
 
September31, 2023,
 
30,decreased by
 
2021. This$225.7
increasemillion compared to Adjusted
EBITDA of $239.0 million
for the three months
ended March 31, 2022,
which was primarily
driven by higherlower coal revenues
partially offset by and higher operating costs.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
3127
United States
Three months ended September 30,March 31,
2023
2022
2021
Change
%
(in US$ thousands)
Sales volume (MMt)
1.71.5
1.81.6
(0.1)
(5.7)(5.8)%
Total
 
revenues ($)
328,172367,053
231,219341,827
96,95325,226
41.9%7.4%
Coal revenues ($)
326,453347,541
230,729340,330
95,7247,211
41.5%2.1%
Average realized price per Mt sold ($/Mt)
193.1235.1
128.7217.0
64.418.1
50.0%8.3%
Met sales volume (MMt)
1.61.2
1.71.5
(0.1)(0.3)
(7.0)(22.2)%
Met coal revenues ($)
309,609283,023
228,561337,720
81,048(54,697)
35.5%(16.2)%
Average realized Met price per Mt sold ($/Mt)
191.6236.9
131.6220.0
60.016.9
45.6%7.7%
Mining costs ($)
132,380128,120
109,385115,263
22,99512,857
21.0%11.2%
Mining cost per Mt sold ($/Mt)
81.490.8
62.776.7
18.714.1
29.8%18.4%
Operating costs ($)
182,031183,766
143,145163,142
38,88620,624
27.2%12.6%
Operating costs per Mt sold ($/Mt)
107.7124.3
79.9104.0
27.820.3
34.8%19.5%
Segment Adjusted EBITDA ($)
145,890185,042
88,441179,899
57,4495,143
65.0%2.9%
Coal revenues increased by $95.8 million,
or 41.5%, to $326.5 million for
the three months ended September 30,
2022 compared
to $230.7
million for
the three
months
ended September
30, 2021.
This
increase was
largely
driven by
a higher
average realized
Met price
per Mt
sold for
the three
months ended
September 30,
2022 of
$191.6, compared to $131.6 per Mt sold for the same period in 2021, due to continued strong U.S.-sourced
coal
demand, particularly into China and Europe due to continuing impacts
on global supply dynamics caused by the
Russia and Ukraine conflict. Additionally,
coal from our U.S. Operations continued to experience strong demand
from China as import restrictions on Australian coal remain
in place.
Operating costs
increased by
 
$38.97.2 million, or 2.1%, to
 
or 27.2%,
to $182.0$347.5 million
for the three
 
months ended
September March 31, 2023
30, 2022, compared
to operating
costs of
 
$143.1340.3 million
 
for the
 
three months
 
ended SeptemberMarch
 
30, 2021.31, 2022.
 
TheThis increase
was largely
driven by
a
higher average realized Met
price per Mt sold for
the three months ended
March 31, 2023 of $236.9,
compared
to $220.0 per Mt sold for the same period in 2022, primarily due to
higher prices achieved from annual domestic
fixed price contracts compared to 2022.
Operating costs
increased by
$20.6 million,
or 12.6%,
to $183.8
million for
the three
months ended
March 31,
2023, compared to
operating costs of
$163.1 million for
the three months
ended March 31,
2022. The increase
was due to higher purchased coal to meet sales commitments and higher mining costs of $23.0$12.8 million, primarily
as a result of higher production costs due to the continued impact
of inflation ofon supplies
and labor costs.
Segment
Adjusted
EBITDA
of
 
$145.9 185.0
million
for
the
 
three months ended September 30,
 
2022 months
ended
March
31,
2023,
increased
by $57.5
$5.1
million
compared
to
 
$88.4 179.9
million
for
 
the
three
months
 
ended September 30,
 
2021,March
31,
2022,
 
primarily
driven
 
by
a
higher
average realized Met price per Mt sold, partially offset
 
partially offset by higher operating costs.
Corporate and Other Adjusted EBITDA
The following table presents a summary of the components
 
of Corporate and Other Adjusted EBITDA:
Three months ended September 30,March 31,
2023
2022
2021
Change
%
(in US$ thousands)
Selling, general, and administrative expenses
$
10,4057,774
$
8,0427,876
$
2,363(102)
29.4%(1.3)%
Other, net
(56)(248)
424
(98)(252)
n/m
Total
 
Corporate and Other Adjusted EBITDA
$
10,3497,526
$
8,0847,880
$
2,265(354)
28.0%(4.5)%
n/m – Not meaningful for comparison.
Corporate and
other costs
 
of $10.4
million for
the three
months ended
September 30,
2022 increased
$2.3 million,
compared to $8.1$7.8 million for
 
the three months ended September
 
30, 2021. The increase inMarch 31, 2023 remained
 
selling, general, andlargely consistent
administrativecompared to $7.9 million for the three months ended
 
expenses
was
primarily
driven
by
corporate
activities
partially
resuming
to
pre-COVID-19
pandemic levels and timing of certain corporate costs.March 31, 2022.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
3228
Mining and operating
costs for the three
 
three months
ended September
30, 2022March 31, 2023 compared
to three
 
months ended
ended September 30, 2021March 31, 2022
A
reconciliation of
segment costs and
expenses, segment operating
 
costs and segmentexpenses,
 
segment operating costs,
and segment mining
costs is
shown
below:
Three months ended September 30,March 31, 2023
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and
expenses
$
403,868
$
204,263
$
8,058
$
616,189
Less: Selling, general and administrative
expense
—
—
(7,774)
(7,774)
Less: Depreciation, depletion and amortization
(18,642)
(20,497)
(284)
(39,423)
Total operating costs
385,226
183,766
—
568,992
Less: Other royalties
(72,993)
(12,964)
—
(85,957)
Less: Stanwell rebate
(39,208)
—
—
(39,208)
Less: Freight expenses
(33,819)
(29,534)
—
(63,353)
Less: Other non-mining costs
(3,150)
(13,148)
—
(16,298)
Total mining costs
236,056
128,120
—
364,176
Sales Volume excluding non-produced
coal
(MMt)
2.2
1.4
—
3.6
Mining cost per Mt sold ($/Mt)
108.5
90.8
—
101.6
Three months ended March 31, 2022
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and
 
expenses
$
475,496384,380
$
202,167182,183
$
10,6868,171
$
688,349574,734
Less: Selling, general and administrative
expense
—
—
(10,405)(7,876)
(10,405)(7,876)
Less: Depreciation, depletion and amortization
(17,091)(18,673)
(20,136)(19,041)
(281)(295)
(37,508)(38,009)
Total operating costs
458,405365,707
182,031163,142
—
640,436528,849
Less: Other royalties
(122,820)(69,692)
(14,511)(13,340)
—
(137,331)(83,032)
Less: Stanwell rebate
(54,575)(29,053)
—
—
(54,575)(29,053)
Less: Freight expenses
(37,885)(39,767)
(25,141)(19,497)
—
(63,026)(59,264)
Less: Other non-mining costs
(1,451)(25,177)
(9,999)(15,042)
—
(11,450)(40,219)
Total mining costs
241,674202,018
132,380115,263
—
374,054
Sales Volume excluding non-produced
coal
(MMt)
2.4
1.6
—
4.0
Mining cost per Mt sold ($/Mt)
99.8
81.4
—
92.4
Three months ended September 30, 2021
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and
expenses
$
294,219
$
162,866
$
8,349
$
465,434
Less: Selling, general and administrative
expense
—
—
(8,044)
(8,044)
Less: Depreciation, depletion and amortization
(18,435)
(19,721)
(305)
(38,461)
Total operating costs
275,784
143,145
—
418,929
Less: Other royalties
(30,835)
(8,264)
—
(39,099)
Less: Stanwell rebate
(12,274)
—
—
(12,274)
Less: Freight expenses
(39,974)
(18,069)
—
(58,043)
Less: Other non-mining costs
(11,864)
(7,427)
—
(19,291)
Total mining costs
180,837
109,385
—
290,222317,281
Sales Volume excluding non-produced
 
coal
(MMt)
2.7
1.71.5
—
4.44.2
Mining cost per Mt sold ($/Mt)
67.476.1
62.776.7
—
65.676.3
Average
realized Met
 
price per Mt
 
Mt sold
for the
 
three months ended September
 
30, 2022 ended
March
31, 2023
compared
 
to three
months ended September 30, 2021March 31, 2022
A reconciliation of the Company’s average realized
 
Met price per Mt sold is shown below:
Three months ended September 30,March 31,
2023
2022
2021
Change
%
(in US$ thousands)
Met sales volume (MMt)
2.7
3.3
3.7(0.6)
(0.4)
(11.9)(18.3)%
Met coal revenues ($)
827,619655,542
534,594891,729
293,025(236,187)
54.8%(26.5)%
Average realized Met price per Mt sold ($/Mt)
253.0239.7
144.0266.5
109.0(26.8)
75.7%
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
33
Nine months ended September 30, 2022 compared to
Nine months ended September 30, 2021
Australia
Nine months ended September 30,
2022
2021
Change
(10.1)%
(in US$ thousands)
Sales volume (MMt)
7.5
8.5
(1.0)
(11.6)%
Total
revenues ($)
1,730,172
832,098
898,074
107.9%
Coal revenues ($)
1,701,901
804,757
897,144
111.5%
Average realized price per Mt sold ($/Mt)
225.9
94.5
131.4
139.2%
Met sales volume (MMt)
5.0
6.3
(1.3)
(20.5)%
Met coal revenues ($)
1,615,364
734,143
881,221
120.0%
Average realized Met price per Mt sold ($/Mt)
323.9
117.0
206.9
176.8%
Mining costs ($)
648,965
535,568
113,397
21.2%
Mining cost per Mt sold ($/Mt)
89.3
65.7
23.6
36.0%
Operating costs ($)
1,206,022
801,837
404,185
50.4%
Operating costs per Mt sold ($/Mt)
160.1
94.1
66.0
70.1%
Segment Adjusted EBITDA ($)
523,319
30,445
492,874
1,618.9%
Coal
revenues
for
our
Australian
Operations
for
the
nine
months
ended
September
30,
2022
were
$1,701.9
million,
an
increase
of
$897.1
million,
or
111.5%,
compared
to
$804.8
million
for
the
nine
months
ended
September 30,
2021. This
increase was
due to
a higher
average realized
Met price
per Mt
sold of
$323.9, an
increase
of
$206.9
per Mt
sold, compared
to
$117.0
per Mt
sold
during
the
same
period
in
2021. The
higher
realized
price
during
the
period
was
primarily
driven
by
disruption
in
supply
dynamics
caused
by
the
conflict
between Russia and Ukraine, as well as recent supply constraints from key Met coal markets due to unseasonal
wet weather and logistical issues. Sales volume of 7.5 MMt
was 1.0 MMt lower compared to 8.5 MMt for
the nine
months ended September 30,
2021, mainly driven
by significant wet
weather events experienced which
impacted
coal availability to during the 2022 period.
Operating
costs
increased
by
$404.2
million,
or
50.4%,
for
the
nine
months
ended
September
30,
2022,
compared
to
the
nine
months
ended
September
30,
2021.
The
increase
was
driven
by
higher
mining
costs,
increased
purchase
of
coal
costs
to
meet
sales
commitments,
higher
Stanwell
rebate
(mainly
due
to
higher
realized coal
pricing) and
greater royalties
due to
higher revenues
and adverse
impact of
the amended
royalty
regime
introduced
by
the
Queensland
Government
applicable
from
July
1,
2022.
Mining
costs
were
$113.4
million, or 48.1%, higher for
the nine months ended September
30, 2022 compared to the
same period in 2021,
primarily
due
to
inflationary
pressures
and
additional
contract
fleets
mobilized
during
first
half
of
2022
at
our
Australian
Operations,
partially
offset
by
favorable
average
foreign
exchange
on
translation
of
our
Australian
Operations to US$. Increased costs combined with lower sales volumes resulted in higher Mining and Operating
costs per Mt sold of $23.6 and $66.0, respectively,
compared to the same period in 2021.
For the
nine months
ended September
30, 2022,
Adjusted EBITDA
increased by
$492.9 million,
compared
to
Adjusted EBITDA of
$30.4 million for the
nine months ended
September 30, 2021.
This increase was
primarily
driven by higher coal revenues partially offset
by higher operating costs.
 
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
34
United States
Nine months ended September 30,
2022
2021
Change
%
(in US$ thousands)
Sales volume (MMt)
4.9
4.9
—
(1.8)%
Total
revenues ($)
1,124,314
541,860
582,454
107.5%
Coal revenues ($)
1,119,433
539,496
579,937
107.5%
Average realized price per Mt sold ($/Mt)
230.5
109.0
121.5
111.4%
Met sales volume (MMt)
4.7
4.8
(0.1)
(1.4)%
Met coal revenues ($)
1,098,186
534,017
564,169
105.6%
Average realized Met price per Mt sold ($/Mt)
232.4
111.5
120.9
108.4%
Mining costs ($)
396,562
307,732
88,830
28.9%
Mining cost per Mt sold ($/Mt)
85.0
63.0
22.0
35.0%
Operating costs ($)
547,632
380,412
167,220
44.0%
Operating costs per Mt sold ($/Mt)
112.8
76.9
35.9
46.7%
Segment Adjusted EBITDA ($)
578,183
164,404
413,779
251.7%
Coal revenues increased by $579.9 million, or 107.5%, to
$1,119.4 million for the nine months ended September
30,
2022,
as
compared
to
$539.5
million
for
the
nine
months
ended
September
30,
2021.
This
increase
was
mainly driven by a higher average realized Met price per Mt sold for the nine
months ended September 30, 2022
of $232.4
compared
to $111.5
per Mt
sold for
the same
period
in 2021.
The increase
reflected a
strong price
environment and high demand of U.S.-sourced coal
into China and Europe.
Operating costs increased
by $167.2 million,
or 44.0%, to
$547.6
million for the
nine months ended
September
30, 2022,
compared to
operating costs
of $380.4
million for
the nine
months ended
September 30,
2021.
The
increase
was primarily
due
to
higher
mining
costs
of
$88.8
million,
increase
of
28.9%
compared
to
the
same
period in
2021, as
a result
of adverse
geological conditions
causing higher
maintenance costs,
an increase
in
purchase
coal
costs
to
meet
sales
commitments,
higher
subcontractor’s
cost
due
to
labor
shortages
and
inflationary pressure on labor,
materials and supplies.
Adjusted
EBITDA
increased
by
$413.8
million,
or
251.7%,
for
the
nine
months
ended
September
30,
2022
compared to Adjusted
EBITDA of $164.4
million for the
nine months ended
September 30, 2021. This
increase
was primarily driven by higher average realized Met price
per Mt sold,
partially offset by higher operating costs.
Corporate and Other Adjusted EBITDA
The following table presents a summary of the components
of Corporate and Other Adjusted EBITDA:
Nine months ended September 30,
2022
2021
Change
%
(in US$ thousands)
Selling, general, and administrative expenses
$
28,657
$
21,244
$
7,413
34.9%
Other, net
(78)
164
(242)
(147.6)%
Total
Corporate and Other Adjusted EBITDA
$
28,579
$
21,408
$
7,171
33.5%
Corporate and other costs
increased $7.2 million to
$28.6 million for the
nine months ended September
30, 2022,
as compared to
$21.4 million for
the nine months
ended September
30, 2021. The
increase in selling,
general,
and
administrative
expenses
was
primarily
driven
by
corporate
activities
partially
resuming
to
pre-COVID-19
pandemic levels and timing of certain corporate costs.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
35
Mining and
operating costs
for the
Nine months
ended September
30, 2022
compared to
Nine months
ended September 30, 2021
A reconciliation of
segment costs and
expenses, segment operating
costs, and segment
mining costs is
shown
below:
Nine months ended September 30, 2022
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and
expenses
$
1,270,397
$
609,291
$
29,524
$
1,909,212
Less: Selling, general and administrative
—
—
(28,657)
(28,657)
Less: Depreciation, depletion and amortization
(64,375)
(61,659)
(867)
(126,901)
Total operating costs
1,206,022
547,632
—
1,753,654
Less: Other royalties
(259,140)
(40,571)
—
(299,711)
Less: Stanwell rebate
(124,160)
—
—
(124,160)
Less: Freight expenses
(116,386)
(72,930)
—
(189,316)
Less: Other non-mining costs
(57,371)
(37,569)
—
(94,940)
Total mining costs
648,965
396,562
—
1,045,527
Sales Volume excluding non-produced
coal
7.3
4.7
—
11.9
Mining cost per Mt sold ($/Mt)
89.3
85.0
—
87.6
Nine months ended September 30, 2021
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and
expenses
$
872,875
$
443,696
$
21,982
$
1,338,553
Less: Selling, general and administrative
expense
—
—
(21,250)
(21,250)
Less: Restructuring costs
(2,300)
—
—
(2,300)
Less: Depreciation, depletion and amortization
(68,738)
(63,284)
(732)
(132,754)
Total operating costs
801,837
380,412
—
1,182,249
Less: Other royalties
(63,873)
(19,346)
—
(83,219)
Less: Stanwell rebate
(43,169)
—
—
(43,169)
Less: Freight expenses
(122,061)
(44,029)
—
(166,090)
Less: Other non-mining costs
(37,166)
(9,305)
—
(46,471)
Total mining costs
535,568
307,732
—
843,300
Sales Volume excluding non-produced
coal
8.2
4.9
—
13.1
Mining cost per Mt sold ($/Mt)
65.7
63.0
—
64.7
Average realized Met price per Mt sold for the Nine months ended September 30, 2022 compared to Nine
months ended September 30, 2021
A reconciliation of the Company’s average realized
Met price per Mt sold is shown below:
Nine months ended September 30,
2022
2021
Change
%
(in US$ thousands)
Met sales volume (MMt)
9.7
11.1
(1.4)
(12.2)%
Met coal revenues ($)
2,713,550
1,268,160
1,445,390
114.0%
Average realized Met price per Mt sold ($/Mt)
279.4
114.6
164.8
143.8%
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
3629
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA
Three months ended September 30,
Nine months ended September 30,March 31,
(in US$ thousands)
2022
20212023
2022
2021
Reconciliation to Adjusted EBITDA:
Net income (loss)
$
150,575107,860
$
81,988
$
712,468
$
(14,069)269,898
Add: Depreciation, depletion and
amortization
37,50839,423
38,461
126,901
132,75438,009
Add: Interest expense (net of income)
17,22014,665
18,251
52,034
49,98217,332
Add: Other foreign exchange (gains) losses
(31,917)(2,992)
2,487
(55,064)
4,376
Add: Loss on extinguishment of debt
—
—
—
5,7441,991
Add: Income tax expense (benefit)
51,42334,030
9,096
235,391
(1,788)81,943
Add: Restructuring costs
—
—
—
2,300
Add: (Gains) lossesLosses on idled assets held for
sale
(1,221)1,751
(113)
621
2,2161,386
Add: (Decrease) increase in provision for discounting
discounting and credit losses
(12)(3,988)
(2,430)
572
(8,074)428
Adjusted EBITDA
$
223,576190,749
$
147,740
$
1,072,923
$
173,441410,987
Liquidity and Capital Resources
Overview
Our objective is
 
to maintain a
 
prudent capital structure
 
and to ensure
 
that sufficient
 
liquid assets and
 
funding is
available to meet both anticipated and
 
unanticipated financial obligations, including unforeseen events that could
have an
 
adverse impact
 
on revenues
 
or costs.
 
Our principal
 
sources of
 
funds are
 
cash and
 
cash equivalents,
cash flow from operations and availability under the ABL
Facility.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,
 
ongoing
 
interruptions
 
and
 
uncertainties
 
surrounding
 
China’s
 
import
restrictions, such as trade
 
barriers imposed by China
 
on Australian sourced coal
 
and the uncertainty of
 
impacts
from the
 
Russia and Ukraine
 
Ukraine war on
 
on the global
 
global supply chain,
 
chain, we believe
 
believe expected cash generated
 
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
,
and Part I, Item
 
Item 1A. “Risk Factors”
of our Annual Report
 
Annual Report on Form 10-K
 
for the year ended
ended December 31,
2021, 2022, filed
with the
SEC and
ASX on
February 22,
2022, and
Part II,
Item 1A.
“Risk Factors”
of
our Quarterly
Reports
on Form
10-Q for
the quarterly
periods ended
March 31,
2022 and
June 30,
2022,
filed
with the SEC and ASX on May 9, 2022 and August 8,
 
2022, respectively.February 21, 2023.
Liquidity as of September 30, 2022March 31, 2023 and December 31, 2022
 
2021 was as follows:
(in US$ thousands)
September 30,March 31,
20222023
December 31,
20212022
Cash, excluding restricted cash
$
698,396498,048
$
437,679334,378
Availability under ABL Facility
(1)
100,000
100,000
Total
$
798,396598,048
$
537,679434,378
(1)
The ABL
 
Facility contains
 
a springing
 
fixed charge
 
coverage ratio
 
of not
 
less than
 
1.00 to
 
1.00, which
 
ratio is
 
tested if
availability under
 
the ABL facility
 
is less than
 
$17.5 million
 
for five consecutive
 
business days
 
or less than
 
than $15.0$15.0 million
on
any business day.
Our total indebtedness as of March 31, 2023 and December 31,
 
2022 consisted of the following:
(in US$ thousands)
March 31,
2023
December 31,
2022
Current instalments of interest bearing liabilities
$
242,326
$
242,326
Current instalments of other financial liabilities and finance
lease obligations
4,304
4,585
Other financial liabilities and finance lease obligations, excluding current
instalments
7,532
8,336
Total
$
254,162
$
255,247
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
37
Our total indebtedness as of September 30 2022 and
December 31, 2021 consisted of the following:
(in US$ thousands)
September 30,
2022
December 31,
2021
Current installments of interest bearing liabilities
$
312,741
$
315,000
Current installments of other financial liabilities and finance
lease obligations
3,890
8,634
Other financial liabilities and finance lease obligations, excluding current
installments
9,639
14,031
Total
$
326,270
$
337,665
Liquidity
As
of
September
30,
2022,
March 31, 2023, available
liquidity
was
$798.4 $598.0 million,
comprising
of
cash
and
cash
equivalents (excluding
(excluding restricted cash) of $698.4$498.0 million and $100.0 million of
 
million of available borrowings under our ABL Facility.
As of
 
December 31,
 
2021,2022, available liquidity
 
was $537.7$434.4 million,
 
comprising cash and
 
cash equivalents (excluding
(excluding
restricted cash) of $437.7$334.4 million and $100.0 million of
 
available borrowings under our ABL Facility.
Cash
Cash is held in
 
multicurrency interest bearing
 
bank accounts available to
 
be used to service
 
the working capital
needs of the Company. Cash
 
balances surplus to immediate working capital requirements are invested
 
in short-
term interest-bearing deposit accounts or used to repay
 
interest bearing liabilities.
Senior Secured Notes
As of
September
30,
2022, March 31, 2023, the
outstanding
principal
amount of
our Notes
was
$312.7 million
. $242.3 million.
 
Interest on
the
Notes is
payable semi-annually in arrears on May 15 and November 15 of each year.
 
year. The Notes mature on May
15, 2026
and are senior secured obligations of the Company.
The Notes are guaranteed
 
on a senior secured
 
basis by the Company
 
and its wholly-owned
 
subsidiaries (other
than
 
the
 
Issuer)
 
(subject
 
to
 
certain
 
exceptions
 
and
 
permitted
 
liens)
 
and
 
secured
 
by
 
(i)
 
a
 
first-priority
 
lien
 
on
substantially all of the Company’s assets and the assets of the other guarantors (other than accounts
 
accounts receivable
and other rights to payment,
 
inventory,
 
intercompany indebtedness, certain
 
general intangibles and commercial
tort claims, commodities accounts, deposit accounts, securities accounts and other related assets and proceeds
and
 
products
 
of
 
each
 
of
 
the
 
foregoing,
 
or,
 
collectively,
 
the
 
ABL
 
Collateral),
 
or
 
the
 
Notes
 
Collateral,
 
and
 
(ii)
 
a
second-priority lien on the ABL Collateral, which is
 
junior to a first-priority lien, for the
 
benefit of the lenders under
the ABL Facility.
The terms
 
of the
 
Notes are
 
governed
 
by the
 
Indenture.
 
The Indenture
 
contains
 
customary
covenants
 
for high
yield bonds, including,
 
but not limited
 
to, limitations on
 
investments, liens, indebtedness,
 
asset sales, transactions
with affiliates and restricted payments, including payment
 
payment of dividends on capital stock.
The Company may
 
redeem any ofsome or
 
the Notes beginning
on May 15,
2023. The initial
redemption price of
the Notes
is 108.063% of their principal amount, plus accrued and unpaid interest, if any, to,
but excluding, the redemption
date. The redemption
price will decline
each year after May
15, 2023, and will
be 100% of the
principal amount
all of the
 
Notes plusat the
 
accrued
redemption prices and
 
unpaidon the terms
 
interest, beginningspecified in the
Indenture. In addition, the Company may,
 
on
May 15,
2025. The
Company
may also
redeem
some or all of the Notes
at any time and from
time to time, priorseek to retire or purchase outstanding
 
May 15, 2023debt through
open-market purchases,
privately negotiated
transactions or
otherwise. Such
repurchases, if
any,
will be
upon
such terms and at a
price equal to 100%
ofsuch prices as the
principal amount thereof
plus a “make-whole”
premium, plus accrued
and unpaid interest,
if any, to, but
excluding,
the redemption date. The Company may also redeem a portiondetermine, and will depend on prevailing market conditions,
liquidity requirements, contractual restrictions and other
 
of the Notes under certain circumstances prior to
May 15, 2023.
For the
nine months ended
September 30, 2022,
in connection with
the dividends paid
in the
period, the Company
offered to purchase up to a total of $225.8 million aggregate principal amount of the Notes pursuant to the terms
of
the
Indenture.
For
the
nine
months
ended
September
30,
2022,
the
Company
purchased
an
aggregate
principal amount, for
accepted offers, of $2.3
million at a
price equal to
104% of the
principal amount of
the Notes,
plus accrued and unpaid interest on the Notes to, but not
including, the date of redemption.factors.
As of September 30, 2022,March 31, 2023, we were in compliance with
all applicable covenants
under the Indenture.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
38
ABL Facility
The ABL
 
Facility,
 
dated May
 
12, 2021,
 
is for
 
an aggregate
 
multi-currency
 
lender commitment
 
of up
 
to $100.0
million, including a $30.0 million
 
sublimit for the issuance
 
of letters of credit and
 
$5.0 million for swingline
 
loans,
at any
 
time outstanding,
 
subject to
 
borrowing
 
base availability.
 
The ABL
 
Facility
 
will mature
 
on May
 
12, 2024.
 
Borrowings under the ABL
 
Facility bear interest at
 
a rate equal to
 
a BBSY rate plus
 
an applicable margin. As
 
at
September 30, 2022,March 31, 2023, no amounts were drawn and no letters
 
of credit were outstanding under the ABL Facility.
As of September 30, 2022,March 31, 2023, we were in compliance with
all applicable covenants
under the ABL Facility.
Refinancing update
On April 28, 2023, we entered
into a Syndicated Facility
Agreement, or SFA,
which will provide 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 for revolving credit facility.
The SFA replaced
the ABL Facility.
Availability
under
the
SFA
is
limited
to
an
eligible
borrowing
base,
determined
by
applying
advance
rates
to
eligible accounts receivable and inventory.
Bank Guarantees and Surety Bonds
We
 
are
 
required
 
to
 
provide
 
financial
 
assurances
 
and
 
securities
 
to
 
satisfy
 
contractual
 
and
 
other
 
requirements
generated in the
 
normal course of
 
business. Some of
 
these assurances are provided
 
to comply with
 
state or other
government agencies’ statutes and regulations. As
 
Coronado Global Resources Inc.
Form 10-Q March 31, 2023
31
As required by certain agreements,
 
we had outstanding bank guarantees
of
$43.8
million
to
secure
various
obligations
and
commitments.
The
Company
provided
cash
collateral in
the
form
 
of deposits in the amount of $86.5
million
deposits, and $89.1 million
as of March
31, 2023, and
December 31, 2022,
respectively,
to provide back-to-back
support
for bank guarantees, financial
payments, other performance obligations, various
other operating agreements and
contractual obligations
under workers
compensation insurance.
These deposits
are restricted
and classified
as
long-term assets in the unaudited Condensed Consolidated
Balance Sheets.
In accordance with the terms of the ABL Facility, we may be required to cash collateralize the ABL Facility to the
extent of outstanding letters
of credit after the expiration
or termination date of
such letter of credit.
As of March
31, 2023, no letter of credit was outstanding and no
cash collateral against these bank guarantees.was required.
For the U.S. Operations in
 
in order to provide
the required financial
 
financial assurance, we generally
 
use surety bonds
for
post-mining
reclamation.
 
We
can
also
 
use
bank
letters
 
of
credit
to
 
collateralize
certain
 
obligations. As of
 
As
ofMarch
September 30, 2022,
31, 2023, we had outstanding
 
surety bonds of $37.6 million
 
$31.9 million and
letters of credit of
 
of $16.8$16.8 million
issued
from our
available bank guarantees, to
 
to meet contractual obligations under
workers compensation insurance and
to secure other
 
secure
other obligations and commitments.
For
 
the
Australian
Operations,
we
had
bank
guarantees
outstanding
of
$25.5
million
as
at
March
31,
2023,
primarily in respect of certain rail and port arrangements
of the Company.
As at March 31, 2023, we had
total outstanding bank guarantees provided
of $42.3 million to secure obligations
and commitments. Future
regulatory changes relating
 
to these obligations could
 
could result in
in increased obligations,
additional costs or additional
collateral requirements.
Dividend
On February 21,
 
February
24,
2022,
2023, our
Board
 
of
Directors
declared
an
unfranked
ordinary
dividend
of
9.0
cents
per
CDI
(USD). The dividend had a record date of March 18, 2022
and was paid on April 8, 2022.
On April 26,
2022, we amended
our dividend policy
with plans to
pay a fixed
cash dividend
of 0.5 cent
per CDI
biannually (1.0
cent per
CDI annually),
in accordance
with our
over-arching distribution
policy.
The payment
of
dividends remains at the discretion of our Board of Directors.
On May 9, 2022, our
Board of Directors declared
 
a special unfranked dividendbi-annual fully
 
franked fixed ordinary
dividend of $99.5 $8.4
million, or 0.5
 
5.9 cents per
CDI, reflecting
the unaccepted
portion of
the offer
to purchase
the Notes
made in
connection with
the dividend
declared on
February 24,
2022, and
a special
unfranked dividend
of $100.6
million, or
6.0 cents
per CDI.
 
The
dividend had a record date of May 31, 2022 and wasOn April
 
paid on June 21, 2022.5, 2023, the
 
Company paid $8.3
million, net of
$0.1 million foreign
exchange
gain on payment of dividends to certain CDI holders
who elected to be paid in Australian dollars.
On AugustApril 28,
 
8, 2022,2023, we announced
 
that the Company’sCompany
 
Boardwould not declare
any dividends to
stockholders for the
fiscal
quarter ended March
31, 2023.
Subject to the assessments and outcomes of
 
Directorspotential in-organic growth options
in the future,
 
declared aand on-going operational
 
total unfrankedperformance and market
 
ordinary dividendconditions, our Board
 
of $125.7
million, orDirectors may
 
7.5 centsdeclare
dividends in future
 
per CDI,
comprising
$100.6 million
of the
unaccepted portion
of the
offer
to purchase
the
Notes made in connection
with the special dividends
declared on May 9,
2022, plus an additional
$25.2 million.
The dividend had a record date of August 30, 2022 and was paid
on September 20, 2022.
On October
30, 2022,
the Company’s
Board of
Directors declared
a total
unfranked specialquarters. Coronado’s
 
dividend ofpolicy
 
$225.0
million, or
13.4 cents
per CDI,
comprising
$23.5 million
of the
unaccepted
portion of
the offer
to purchase
the
Notes made
in
connection
with the
ordinary
dividends
declared on
August
8, 2022,
plus
an additional
$201.5
million. The
dividends will have
a record
date of November
21, 2022, Australia
time, and
be payable on
December
12, 2022, Australia time. The total ordinary dividends of
$ 225.0 million will be funded from available cash.
In connection with the declared ordinary dividends, Coronado Finance Pty
Ltd, a wholly-owned subsidiary of the
Company, offered
to purchase up to $200.0 million aggregate
principal amount of the Notes at a purchase
price
equal
remains unchanged to
 
104%distribute between 60%
 
of
the
principal
amount
of
the
Notes,
plus
accrued
and
unpaid
interest
to,
but
excluding,
the- 100%
settlement date, pursuant to the terms of the
Indenture. The payment of the ordinary
dividends is not contingent
on acceptance of the offer to purchase the Notes
by the Note holders.Free Cashflow.
Capital Requirements
Our main uses of cash have historically been the funding
 
funding of our operations, working capital, capital expenditure,
the payment of
 
interest and dividends.
 
We intend
 
to use cash
 
to fund debt
 
service payments
 
on our Notes,
 
the
ABL Facility and our
 
other indebtedness, to fund operating
 
activities, working capital, capital expenditures, partial
redemption of the Notes, business or assets acquisitions and,
 
and, if declared, payment of dividends.
Historical Cash Flows
The following table
summarizes our cash
flows for the
three months ended
March 31, 2023
and 2022, as
reported
in the accompanying consolidated financial statements:
Cash Flow
Three months ended March 31,
(in US$ thousands)
2023
2022
Net cash provided by operating activities
$
223,626
$
171,849
Net cash used in investing activities
(54,147)
(41,176)
Net cash used in financing activities
(951)
(4,816)
Net change in cash and cash equivalents
168,528
125,857
Effect of exchange rate changes on cash and restricted
cash
(4,857)
7,679
Cash and restricted cash at beginning of period
334,629
437,931
Cash and restricted cash at end of period
$
498,300
$
571,467
Operating activities
Net
cash
provided
by
operating
activities
was
$223.6 million
for
the
three
months
ended
March
31,
2023,
compared to $171.8 million for
the three months ended March 31,
2022. Higher operating cash flows were
driven
by
the
favorable
movement
in
working
capital
due
to
higher
collection
of
trade
receivables
partially
offset
by
higher operating costs.
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
3932
Historical Cash Flows
The following
table summarizes
our cash
flows for
the three
months ended
September 30,
2022 and
2021, as
reported in the accompanying consolidated financial statements:
Cash Flow
Nine months ended September 30,
(in US$ thousands)
2022
2021
Net cash provided by operatingInvesting activities
$
945,384
$
171,115
Net cash used in investing activities was $54.1 million
(150,670)
(145,782)
Net cash (used in) provided by financing activities
(483,854)
122,623
Net change in cash and cash equivalents
310,860
147,956
Effect of exchange rate changes on cash and restricted
cash
(50,144)
2,287
Cash and restricted cash at beginning of period
437,931
45,736
Cash and restricted cash at end of period
for the three months ended March 31, 2023, compared to
$
698,647
$
195,979
Operating activities
Net cash
provided
by operating
activities
was
$945.441.2 million
 
for the
 
ninethree months
 
ended March
 
September31, 2022.
 
30, 2022Cash spent
 
,on capital
expenditures for
the three
months
compared ended March 31,
2023 was $54.8
million, of which
$14.6 million related
to $171.1the Australian
Operations and $40.2
million related
to the
U.S. Operations. During
the three months
ended March
31, 2023,
a net $0.7
million restricted
deposits was redeemed relating to our Australian Operations.
Financing activities
Net cash used
in financing activities
was $1.0 million
for the three
months ended March
31, 2023, compared
to
cash used in
financing activities
of $4.8 million
 
for the nine months
ended September 30, 2021.
The increase was driven
by higher
coal revenues due to increase in the average realized
Met coal pricing partially offset by higher operating
costs.
Investing activities
Net
cash
used
in
investing
activities
was
$150.7
million
for
the
ninethree
 
months ended March
 
ended31, 2022. The
 
September
30,
2022,net cash used
compared to $145.8 million for the nine months ended September 30, 2021. Cash spent on capital expenditures
for the
nine months ended
September 30, 2022
was $141.9
million, of
which $61.0 million
related to the
Australian
Operations, $80.5 million
related to the
U.S. Operations and
the remaining $0.4
million for other
and corporate.
During the nine months ended September 30, 2022, a net of $6.3 million of additional deposits were provided as
collateral
for
our
U.S.
workers
compensation
obligations
and
$2.4
million
of
additional
security
deposit
was
provided by our Australian Operations to satisfy contractual requirements
in the normal course of business.
Financing activities
Net
cash
used
in
 
financing
 
activities
 
was
$483.9
million
for
 
the
 
ninethree
 
months
 
ended
 
SeptemberMarch
 
30,31,
 
2022
compared to
 
cash providedand
 
by financingMarch
 
activities of31,
 
$122.6 million2023,
 
for the
nine months
ended September
30,
2021. The net cash
used in financing activities
for the nine months
ended September 30, 2022, included
dividend
payments of $473.9, net of a $2.8 million foreign exchange gain on
settlement of dividends for shareholders who
elected to be paid in Australian dollars and the remainderlargely
 
related
to
repayment of borrowings.
Included in
the net
cash used
in financing
activities for
the nine
months ended
September 30,
2021, were
net
proceeds from
borrowings of
$396.4 million,
repayment of
borrowings of
$371.4 million
and net
proceeds from
the stock issuance of $97.7 million.other financial liabilities.
Contractual Obligations
There were no
 
material changes
 
to our contractual
 
obligations from
 
the information
 
previously provided
 
in Item
7.
 
“Management’s
 
Discussion
 
and
 
Analysis
 
of
 
Financial
 
Conditions
 
and
 
Results
 
of
 
Operations”
 
of
 
our
 
Annual
Report on Form 10-K for the year ended December 31, 2021,2022, filed with the SEC and
 
ASX on February 22, 2022.21, 2023.
Critical Accounting Policies and Estimates
The preparation
 
of
 
our
 
financial
 
statements
 
in
 
conformity
 
with
 
U.S. GAAP
 
requires
 
us to
 
make
 
estimates
 
and
assumptions that affect the
 
reported amounts of assets and liabilities
 
at the date of the financial statements
 
and
the reported
 
amounts of
 
revenue and
 
expenses during
 
the reporting
 
period. On
 
an ongoing basis,
 
we evaluate
our estimates. Our estimates are
 
based on historical experience
 
and various other assumptions
 
that we believe
are appropriate,
 
the results
 
of which form
 
the basis
 
for making
 
judgements about
 
the carrying values
 
of assets
and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. All
of these accounting estimates and assumptions, as well as the resulting impact to
 
our financial statements, have
been discussed with the Audit Committee of our Board
 
of Directors.
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
40
Our
 
critical
 
accounting
 
policies
 
are discussed
 
in
 
Item
 
7. “Management’s
 
Discussion
 
and
 
Analysis
 
of Financial
Condition and Results of
 
Operations” of our Annual
 
Report on Form 10-K for
 
the year ended December
 
31, 2021,2022,
filed with the SEC and ASX on February 22, 2022.21, 2023.
Newly Adopted Accounting Standards and Accounting
 
Standards Not Yet Implemented
See
 
Note
 
2.
 
(a)
 
“Newly
 
Adopted
 
Accounting
 
Standards”
 
to
 
our
 
unaudited
 
condensed
 
consolidated
 
financial
statements
for
 
a
discussion
 
of
newly
 
adopted
accounting
 
standards.
As
 
of September
 
30, 2022,March
31,
2023,
 
there
were
 
no
accounting standards not yet implemented.
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
4133
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
 
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
 
our exposure to these financial risks and reports to
 
to management
and
 
the
 
Board
 
of
 
Directors
 
on
 
a
 
regular
 
basis.
 
Policies
 
are
 
reviewed
 
at
 
least
 
annually
 
and
 
amended
 
where
appropriate.
We may use
 
derivative financial instruments such
 
as forward fixed
 
price commodity contracts, interest
 
rate swaps
and
 
foreign
 
exchange
 
rate
 
contracts
 
to
 
hedge
 
certain
 
risk
 
exposures.
 
Derivatives
 
for
 
speculative
 
purposes
 
is
strictly prohibited by the Treasury Risk Management Policy approved by our Board of
 
Directors. We use different
methods
 
to
 
measure
 
the
 
extent
 
to
 
which
 
we
 
are
 
exposed
 
to
 
various
 
financial
 
risks.
 
These
 
methods
 
include
sensitivity analysis
 
in the
 
case of
 
interest rates,
 
foreign exchange
 
and other
 
price risks
 
and aging
 
analysis for
credit risk.
Commodity Price Risk
Coal Price Risk
We
 
are
 
exposed
 
to
 
domestic
 
and
 
global
 
coal
 
prices.
 
Our
 
principal
 
philosophy
 
is
 
that
 
our
 
investors
 
would
 
not
consider
 
hedging
 
of
 
coal
 
prices
 
to
 
be
 
in
 
the
 
long-term
 
interest
 
of
 
our
 
stockholders.
 
Therefore,
 
any
 
potential
hedging of coal prices through long-term fixed price contracts is subject to the approval of our Board of Directors
and would only be adopted in exceptional circumstances.
The
expectation
of
future
prices
for
coal
depends
upon
many
factors
beyond
our
control.
Met
coal
has
been
volatile commodity
over the
past ten
years. Recently,
in the
second quarter
of 2022,
seaborne prices
reached
record levels with both the Australian and U.S. Met coal price indices exceeding $600 per Mt, largely as result of
supply concerns
in key
Met coal
markets and
continued trade
flow disruptions
caused by
geopolitical tensions
following Russian
invasion
of Ukraine.
The demand
and supply
in the
Met coal
industry changes
from time
to
time. There are no assurances that oversupply will not occur, that demand will not decrease or that overcapacity
will not
occur,
which could
cause declines
in the
prices of
coal, which
could have
a material
adverse effect
on
our financial condition and results of operations.
Access to
 
international markets
 
may be
 
subject to
 
ongoing interruptions
 
and trade
 
barriers due
 
to policies
 
and
tariffs of individual countries. For example, the imposition of
 
tariffs and import quota restrictions by China on U.S.
and
Australian
coal
 
imports,
respectively,
 
including
may in the
ongoing
suspension
of
imports
of
Australian
coal
into
China,
may
in
the
future
 
have
a
negative
 
impact
on
our
 
profitability.
 
We
may
or
may
not
be
able
to
access
or may not be able to access alternate markets of our coal should additional interruptions and
or trade barriers occur
in the future. An
inability for
metallurgical coal
suppliers to access
international markets, including China,
would likely result in an oversupply
likely
result
in
an
oversupply
of
Met
coal
and
may
result
in
a
decrease
in
prices
and
 
or
the
curtailment
of
production.
We manage
 
our commodity
 
price risk
 
for our non-trading,
 
thermal coal
 
sales through
 
the use
 
of long-term
 
coal
supply agreements in our
 
U.S. Operations. In Australia, thermal
 
coal is sold
 
to Stanwell on a
 
supply contract. See
Item
 
1A.
 
“Risk
 
Factors—Risks
 
related
 
to
 
the
 
Supply
 
Deed
 
with
 
Stanwell
 
may
 
adversely
 
affect
 
our
 
financial
condition and results of operations” in our Annual Report on Form 10-K filed with the SEC and ASX on February
22, 2022.21, 2023.
Sales commitments in the
 
Met coal market are typically
 
not long-term in nature, and
 
and we are therefore subject
 
to
fluctuations
 
in
 
market
 
pricing.
 
Certain
 
coal
 
sales
 
in
 
our
 
Australian
 
Operations
 
are
 
provisionally
 
priced
 
initially.
Provisionally priced sales
 
are those for
 
which price
 
finalization, referenced
 
to the relevant
 
index, is outstanding
at the reporting date. The final sales price is
 
is determined within 7 to 90 days after delivery
 
delivery to the customer.
 
As of
September 30, 2022, weMarch 31, 2023,
 
we had $53.2 $57.8
million of
 
outstanding provisionally
priced receivables
 
subject to
changes in
the
the relevant
price
index.
If
prices
decreased
10%,
these
provisionally
priced
receivables
would
decrease
by $5.3
$5.8
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 22, 2022.21, 2023.
 
Coronado Global Resources Inc.
Form 10-Q March 31, 2023
34
Diesel Fuel
We may
 
be exposed
 
to price
 
risk in
 
relation to
 
other commodities
 
from time
 
to time
 
arising from
 
raw materials
used in our operations (such as gas or
 
diesel). These commodities may be hedged through financial instruments
if the
 
exposure is
 
considered material
 
and where
 
the exposure
 
cannot be
 
mitigated through
 
fixed price
 
supply
agreements.
The fuel
 
required
 
for
 
our operations
 
for
 
the remainder
 
of fiscal
 
year
 
20222023
 
will
 
be
 
purchased
 
under
 
fixed-price
contracts or on a spot basis.
 
Coronado Global Resources Inc.
Form 10-Q September 30, 2022
42
Interest Rate Risk
Interest rate risk is the
risk that a change in interest rates
on our borrowing
facilities will have an adverse impact
on
 
our
 
financial
 
performance,
 
investment
 
decisions
 
and
 
stockholder
 
return.
 
Our
 
objectives
 
in
 
managing
 
our
exposure
 
to
 
interest
 
rates
 
include
 
minimizing
 
interest
 
costs
 
in
 
the
 
long
 
term,
 
providing
 
a
 
reliable
 
estimate
 
of
interest costs for the
 
annual work program
 
and budget and ensuring
 
ensuring that changes
in interest rates will
 
rates will not have
a material impact on our financial performance.
As
of
September
30,
2022,
March 31, 2023, we
had
$326.3
$254.4 million
of
fixed
rate
borrowings
and
Notes
and
no
 
variable-rate borrowings
borrowings outstanding.
We currently do not hedge against interest rate
 
fluctuations.
 
Foreign Exchange Risk
A significant portion of our
 
sales are denominated in US$.
 
Foreign exchange risk is
 
the risk that our earnings
 
or
cash flows are adversely impacted by movements in exchange
 
rates of currencies that are not in US$.
Our main exposure
 
is to the
 
A$-US$ exchange rate
 
through our Australian
 
Operations, which have
 
predominantly
A$ denominated costs. Greater than 76.3%
60% of expenses incurred at our Australian
Operations are denominated in
in
A$.
Approximately
23.7% 40%
 
of
our
Australian
Operations’
purchases
are
 
made
with
reference
to
US$,
 
which provides
provides a natural hedge against foreign
 
foreign exchange movements on these
 
these purchases (including fuel, several
 
several port handling
handling charges, demurrage,
 
demurrage, purchased coal
 
coal and some
 
some insurance
 
premiums). Appreciation
 
Appreciation of the
 
the A$ against
 
against
US$ will
increase our Australian
 
Australian Operations’ US$ reported
 
reported cost base and
 
reduce US$ reported net
 
net income. For
the portion
of US$ required
to purchase A$ to settle our
Australian Operations’ operating costs,
a 10% increase
in the A$ to
US$ exchange rate
would increase reported total
 
total costs and
expenses by approximately $37.5
 
million
and $98.5$25.7 million for
the three and nine
months ended
September 30, 2022, March 31, 2023, respectively.
Under normal market conditions, we generally do not consider it necessary to hedge our exposure
 
exposure to this foreign
exchange risk.
 
However,
 
there
 
may be
 
specific commercial
 
circumstances,
 
such
 
as the
 
the hedging
 
of significant
capital
 
expenditure,
 
acquisitions,
 
disposals
 
and
 
other
 
financial
 
transactions,
 
where
 
we
 
may
 
deem
 
foreign
exchange hedging
 
as appropriate
 
and
 
where a
 
US$ contract
 
cannot
 
be negotiated
 
directly with
 
suppliers
 
and
other third parties.
For our Australian
 
Operations, we
 
translate all
 
monetary assets
 
and liabilities
 
at the period-end
 
period-end exchange
rate,
all
 
nonmonetary
 
assets
 
and
 
liabilities
 
at
 
historical
 
rates
 
and
 
revenue
 
and
 
expenses
 
at
 
the
 
average
 
exchange
rates in effect during
 
the periods. The net
 
effect of these
 
translation adjustments is
 
shown in the accompanying
consolidated financial statements within components of
 
net income.
We currently do not hedge our non-US$ exposures
 
against exchange rate fluctuations.
Credit Risk
Credit risk is the risk of
 
sustaining a financial loss
 
as a result of a counterparty
 
not meeting its obligations
 
under
a financial instrument or customer contract.
We are exposed
 
to credit risk
 
when we have financial
 
derivatives, cash deposits,
 
lines of credit, letters
 
of credit
or bank guarantees
 
in place with
 
financial institutions.
To
mitigate against credit risk
 
from financial counterparties,
we have minimum credit rating requirements with financial
 
institutions where we transact.
We
 
are
 
also
 
exposed
 
to
 
counterparty
 
credit
 
risk
 
arising
 
from
 
our
 
operating
 
activities,
 
primarily
 
from
 
trade
receivables. Customers who wish to trade on
 
on credit terms are subject to credit
 
verification procedures, including
an assessment of their independent credit rating, financial position, past experience and industry reputation.
We
monitor the financial performance
 
of counterparties on a routine
 
basis to ensure credit
 
thresholds are achieved.
Where required, we will request additional credit
 
support, such as letters of credit,
 
to mitigate against credit risk.
Credit
 
risk
 
is
 
monitored
 
regularly,
 
and
 
performance
 
reports
 
are
 
provided
 
to
 
our
 
management
 
and
 
Board
 
of
Directors.
As of
March 31,
2023, we
had financial
assets of
$896.7 million,
comprising of
cash and
restricted cash,
trade
receivables and
restricted deposits,
which are
exposed to
counterparty credit
risk. These
financial assets
have
been assessed under ASC
326, Financial Instruments – Credit
Losses, and a provision
for discounting and credit
losses of $1.1 million was recorded as of March 31, 2023
.
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
4335
ITEM 4.
 
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We
 
maintain
 
disclosure
 
controls
 
and
 
procedures
 
that
 
are
 
designed
 
to
 
ensure
 
that
 
information
 
required
 
to
 
be
disclosed in our Exchange Act reports is recorded, processed, summarized and
 
reported within the time periods
specified
 
in
 
the
 
SEC’s
 
rules
 
and
 
forms,
 
and
 
that
 
such
 
information
 
is
 
accumulated
 
and
 
communicated
 
to
 
our
management, including the
 
Chief Executive Officer
 
and the Group
 
Chief Financial Officer, as appropriate,
 
to allow
timely
 
decisions
 
regarding
 
required
 
disclosure
 
based
 
solely
 
on
 
the
 
definition
 
of
 
“disclosure
 
controls
 
and
procedures” in Rule 13a-15(e) promulgated under the
 
Exchange Act. In designing and evaluating the disclosure
controls
 
and
 
procedures,
 
management
 
recognized
 
that
 
any
 
controls
 
and
 
procedures,
 
no
 
matter
 
how
 
well
designed and operated, can provide only reasonable
 
assurance of achieving the desired control
 
objectives, and
management necessarily was
 
required to apply
 
its judgment in
 
evaluating the cost-benefit
 
relationship of possible
controls and procedures.
As of the end
 
of the period
 
covered by this Quarterly
 
Report on Form
 
10-Q, we carried
 
out an evaluation
 
under
the supervision and
 
with the participation
 
of our
 
management, including the
 
Chief Executive Officer
 
and the
 
Group
Chief Financial
 
Officer, of the effectiveness of
 
the design and
 
operation of
 
our disclosure controls
 
and procedures.
Based on
 
the foregoing,
 
the
 
Chief Executive
 
Officer
 
and the
 
Group Chief
 
Financial
 
Officer
 
concluded
 
that our
disclosure controls and procedures were effective.
Changes to Internal Control over Financial Reporting
During the
 
fiscal quarter covered
 
by this
 
Quarterly Report on
 
Form 10-Q,
 
there were
 
no changes
 
in the
 
Company's
internal
 
control
 
over
 
financial
 
reporting,
 
as
 
such
 
term
 
is
 
defined
 
in
 
Rule
 
13a-15(f)
 
of
 
the
 
Exchange
 
Act,
 
that
materially affected,
 
or are
 
reasonably
 
likely to
 
materially
 
affect,
 
the
 
Company’s
 
internal controls
 
over financial
reporting.
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
4436
PART II – OTHER
 
INFORMATION
ITEM 1.
 
LEGAL PROCEEDINGS
We are subject to various legal and
 
and regulatory proceedings. For a description of
our significant legal
proceedings
refer
 
to
 
Note 14. “Contingencies” to
 
the
 
unaudited
 
condensed
 
consolidated
 
financial
 
statements
 
included
 
in
Part I,
 
Item 1. “Financial
 
Statements”
 
of
 
this
 
Quarterly
 
Report,
 
which
 
information
 
is
 
incorporated
 
by
 
reference
herein.
ITEM 1A.
 
RISK FACTORS
Except as set forth below,
 
there were no material changes
 
to the risk factors previously
 
disclosed in Part I, Item
1A, “Risk Factors”, of
 
our Annual Report on
 
Form 10-K for the
 
year ended December 31,
 
2021,2022, filed with the
 
SEC
and ASX on February 21, 2023:
Concerns
 
February 22, 2022,about
the
environmental
impacts
of
coal
combustion,
including
possible
impacts
on
global
climate
issues,
are
resulting
in
increased
regulation
of
coal
combustion
 
and Part II,
 
Item 1A. “Riskcoal
 
Factors” of mining
in
many
jurisdictions,
which
could
significantly
affect
demand
for
our
 
Quarterly Reportsproducts
 
on Form 10-Qor
 
for
the quarterly periodsour
 
ended March 31, 2022securities
and
reduce
access to capital and June 30, 2022, filedinsurance.
 
with the SEC and ASX on May 9,
Global considerations
 
2022regarding climate
change continue
to attract
attention, particularly
in relation
to the
coal
industry. Greenhouse Gas, or GHG, emissions from coal consumption, both directly and
indirectly, and from coal
August 8, 2022:mining
Weitself
 
are
 
subject
 
to
 
extensiveexisting,
 
formspending
and
proposed
regulation
as
part
 
of
 
taxation,initiatives
to
address
global
climate change.
A number
of countries,
including Australia
and the
United States,
have already
introduced, or
are
contemplating
the
introduction
of,
regulatory
responses
to
GHG
emissions,
including
the
extraction
and
combustion of fossil fuels, to address the impacts of climate
change.
For example,
the Australian
Government is
reforming the
existing Safeguard
Mechanism that
was established
under
the
National
Greenhouse
and
Energy
Reporting
Act
2007,
or
NGER
Act,
to
incentivize
emissions
reductions,
through
declining
emissions
limits,
called
baselines,
predictably
and
gradually
on
a
trajectory
consistent with
achieving the
Government’s emissions
reduction target
of 43%
below 2005
levels by
2030 and
net
zero
by
2050.
On
March
31,
2023,
the
Australian
Federal
Parliament
passed
the
Safeguard
Mechanism
(Crediting) Amendment
Bill 2023
amending the
NGER Act
and other
legislation, to
establish the
framework
to
give effect to
key elements
of the reforms,
such as introducing
credits to the
scheme to provide
an incentive to
companies to go below their baselines.
The
Safeguard
Mechanism
applies
to
industrial
facilities
emitting
more
than
100,000
tons
of
carbon
dioxide
equivalent per
year,
including in
electricity,
mining, oil
and gas
production, manufacturing,
transport and
waste
facilities.
In accordance with
Safeguard Mechanism,
under this
reformed legislation
and once
the Federal Government’s
finalises the
National Greenhouse
and Energy
Reporting (Safeguard
Mechanism) Amendment
(Reforms) Rule
2023, Curragh must establish a
new baseline for covered emissions
(Scope 1). Curragh must take
action to keep
its net Scope
1 emissions at
or below the
baseline through emissions reduction,
purchasing emissions reductions
from
another
facility
to
 
which
 
imposesthe
 
significantSafeguard
 
costsMechanism
applies,
or
purchasing
and
surrendering
Australian
Carbon Credit Units, or ACCUs, or face enforcement
measures.
The
potential
direct
and
indirect
financial
impact
 
on
 
us
 
andfrom
 
futureexisting
laws,
regulations
policies,
including
the
Safeguard Mechanism,
and future laws,
regulations, policies,
and technology
developments may
depend upon
the degree
to which
any such
laws, regulations
 
and
developments
 
could
increase
those
costs
or
limit
our
ability
to
produce
coal
competitively.
Federal,
state
or
local
governmental
authorities
result in
 
nearly
all
countries
across
the
global
coal
mining
industry
impose various
forms of
taxationreduced reliance
 
on coal
 
producers,as a
 
including productionfuel
source. Such developments could result in adverse impacts
 
taxes,
sales-related
taxes,
royalties,
stamp duty, environmental
taxes and income taxes.
If new legislation or
regulations related to various forms
of coal taxation or
income or other taxes
generally, which
increaseon our costs or limit our ability to compete
in the areas in which we sell coal, or which
adversely affect our
key customers, are adopted, or if the
basis upon which such duties
or taxes are assessed or levied,
changes or
is different from that provided by us, our business, financial condition or results of
operations could be adversely
affected. operations.
For example,further information see Part I, Item
1A, “Risk Factors”, of our Annual Report on SeptemberForm
 
27,10-K for the year ended
December 31, 2022, we received fromfiled with the SEC and ASX on February
 
the QRO an assessment
of the stamp duty payable
on
our acquisition of the Curragh
mine in March 2018. The
QRO assessed the stamp
duty on this acquisition at
an
amount of
$53.5 million
(A$82.2 million)
plus unpaid
tax interest
of $7.9
million (A$12.1
million). We
intend to
lodge an objection to the assessment
within the required timeframe and
before the end of November
2022. The
outcome of this objection is uncertain.
We
have
reviewed
the
assessment
and,
based
on
legal
and
valuation
advice
we
have
sought,
continue
to
maintain our position
and the estimated
accrual of $28.0
million (A$43.0 million)
within “Accrued Expenses
and
Other Current Liabilities”
in our unaudited
Condensed Consolidated
Balance Sheet, as
at September 30,
2022.
We cannot guarantee that the
steps we take to
defend our position in
this matter will be
successful, in which case
the
amount
assessed
by
the
QRO
and
unpaid
tax
interest
on
the
amount
outstanding
will
become
due
and
payable.
21, 2023.
ITEM 2.
 
UNREGISTERED SALES OF EQUITY SECURITIES
 
AND USE OF PROCEEDS
None.
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
4537
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
None.
 
ITEM 6.
 
EXHIBITS
The following documents are filed as exhibits hereto:
Exhibit No.
Description of Document
3.1
3.2
15.1
31.1
31.2
32.1
95.1
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy
 
Extension Schema Document
101.CAL
Inline XBRL Taxonomy
 
Extension Calculation Linkbase Document
101.DEF
Inline XBRL TaxTaxonomy
 
onomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy
 
Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy
 
Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline
 
XBRL and contained in Exhibit 101)
 
___________________________
 
 
Coronado Global Resources Inc.
 
Form 10-Q September 30, 2022March 31, 2023
 
4638
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: NovemberMay 8, 20222023