Form10q2023q2p1i0
 
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
March 31,June 30, 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 non-acceleratednon
 
-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
$0.01 per share, outstanding on April 30, July 31,
2023, including
shares of common stock underlying
CDIs, was
167,645,373
.
Form10q2023q2p2i1 Form10q2023q1p2i0Form10q2023q2p2i0
Steel starts
here.
Quarterly Report on Form 10-Q for the quarterly period ended
 
March 31,June 30, 2023.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
4
PART I – FINANCIAL INFORMATION
ITEM 1.
 
FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
(In US$ thousands, except share data)
Assets
Note
(Unaudited)
 
March 31,June 30, 2023
December 31,
2022
Current assets:
Cash and restricted cash
 
$
498,300434,330
$
334,629
Trade receivables, net
 
311,980298,207
409,979
Income tax receivable
2,728
—
Inventories
5
 
185,014259,896
158,018
Other current assets
 
75,63691,292
60,188
Assets held for sale
4
 
—
26,214
Total
 
current assets
 
1,070,9301,086,453
989,028
Non-current assets:
Property, plant and equipment,
 
net
6
 
1,411,2841,413,493
1,389,548
Right of use asset – operating leases, net
8
 
16,29251,648
17,385
Goodwill
 
28,008
28,008
Intangible assets, net
 
3,2603,210
3,311
Restricted deposits
15
 
86,45389,482
89,062
Other non-current assets
 
21,24014,665
33,585
Total
 
assets
 
$
2,637,4672,686,959
$
2,549,927
Liabilities and Stockholders’ Equity
Current liabilities:
 
Accounts payable
 
$
69,22483,432
$
61,780
Accrued expenses and other current liabilities
7
 
324,655335,011
343,691
Dividends payable
8
8,311
—
Income tax payable
 
110,54115,834
119,981
Asset retirement obligations
 
15,73715,676
10,646
Contract obligations
 
39,97639,498
40,343
Lease liabilities
8
 
7,45217,004
7,720
Other current financial liabilities
 
4,1753,883
4,458
Liabilities held for sale
4
 
—
12,241
Total
 
current liabilities
 
580,071510,338
600,860
Non-current liabilities:
Asset retirement obligations
 
135,241135,845
127,844
Contract obligations
 
86,75677,609
94,525
Deferred consideration liability
 
248,300252,855
243,191
Interest bearing liabilities
9
 
233,523234,112
232,953
Other financial liabilities
 
7,4987,031
8,268
Lease liabilities
8
 
13,71038,329
15,573
Deferred income tax liabilities
 
103,726115,194
95,671
Other non-current liabilities
 
30,88533,086
27,952
Total
 
liabilities
 
$
1,439,7101,404,399
$
1,446,837
Common stock $
0.01
 
par value;
1,000,000,000
 
shares
authorized,
167,645,373
 
shares issued and outstanding as of March 31,June 30,
2023 and December 31, 2022
1,677
1,677
Series A Preferred stock $
0.01
 
par value;
100,000,000
 
shares
authorized,
1
 
Share issued and outstanding as of March 31,June 30, 2023 and
December 31, 2022
—
—
Additional paid-in capital
 
1,091,9741,093,263
1,092,282
Accumulated other comprehensive losses
13
 
(95,926)(103,723)
(91,423)
Retained earnings
 
200,032291,343
100,554
Total
 
stockholders’ equity
 
1,197,7571,282,560
1,103,090
Total
 
liabilities and stockholders’ equity
 
$
2,637,4672,686,959
$
2,549,927
See accompanying notes to unaudited condensed
 
consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
5
Unaudited Condensed Consolidated Statements of
 
Operations and Comprehensive Income
(In US$ thousands, except share data)
Three months ended
 
 
March 31,June 30,
Six months ended
June 30,
Note
2023
2022
2023
2022
Revenues:
Coal revenues
$
738,345717,445
$
936,6281,020,997
$
1,455,790
$
1,957,625
Other revenues
27,36910,081
10,49711,707
37,450
22,204
Total
 
revenues
3
765,714727,526
947,1251,032,704
1,493,240
1,979,829
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately
below)
380,474380,962
357,500397,463
761,436
754,963
Depreciation, depletion and amortization
39,42338,880
38,00951,384
78,303
89,393
Freight expenses
63,35357,443
59,26467,026
120,796
126,290
Stanwell rebate
39,20829,049
29,05340,532
68,257
69,585
Other royalties
85,95789,949
83,03279,348
175,906
162,380
Selling, general, and administrative
expenses
 
7,7749,981
7,87610,376
17,755
18,252
Total
 
costs and expenses
616,189606,264
574,734646,129
1,222,453
1,220,863
Other (expense) income:
Interest expense, net
(14,665)(14,180)
(17,332)(17,482)
Decrease (increase)(28,845)
(34,814)
(Increase) decrease in provision for
discounting and credit
losses
3,988(269)
(428)(156)
3,719
(584)
Other, net
3,0426,473
(2,790)25,083
9,515
22,293
Total
 
other (expense) income, net
(7,635)(7,976)
(20,550)7,445
(15,611)
(13,105)
Income before tax
141,890113,286
351,841394,020
255,176
745,861
Income tax expense
10
(34,030)(21,975)
(81,943)(102,025)
(56,005)
(183,968)
Net income attributable to Coronado
Global Resources
Inc.
$
107,86091,311
$
269,898291,995
$
199,171
$
561,893
Other comprehensive income, net of income
taxes:
Foreign currency translation adjustments
13
(4,503)(7,797)
16,258(50,168)
(12,300)
(33,910)
Total
 
other comprehensive (loss) incomeloss
(4,503)(7,797)
16,258(50,168)
(12,300)
(33,910)
Total
 
comprehensive income attributable
to Coronado
Global
Resources Inc.
 
$
103,35783,514
$
286,156241,827
$
186,871
$
527,983
Earnings per share of common stock
Basic
11
0.640.54
1.611.74
1.19
3.35
Diluted
11
0.640.54
1.611.74
1.18
3.35
See accompanying notes to unaudited condensed
 
consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 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
stockholders
Shares
Amount
Series A
Amount
capital
losses
earnings
equity
Balance December 31, 2022
167,645,373
$
1,677
1
$
—
$
1,092,282
$
(91,423)
$
100,554
$
1,103,090
Net income
—
—
—
—
—
—
107,860
107,860
Other comprehensive loss
—
—
—
—
—
(4,503)
—
(4,503)
Total
 
comprehensive (loss) income
—
—
—
—
—
(4,503)
107,860
103,357
Share-based compensation for equity
classified awards
—
—
—
—
(308)
—
—
(308)
Dividends
—
—
—
—
—
—
(8,382)
(8,382)
Balance March 31, 2023
167,645,373
$
1,677
1
$
—
$
1,091,974
$
(95,926)
$
200,032
$
1,197,757
Net income
—
—
—
—
—
—
91,311
91,311
Other comprehensive loss
—
—
—
—
—
(7,797)
—
(7,797)
Total
comprehensive (loss) income
—
—
—
—
—
(7,797)
91,311
83,514
Share-based compensation for equity
classified awards
—
—
—
—
1,289
—
—
1,289
Balance June 30, 2023
167,645,373
$
1,677
1
$
—
$
1,093,263
$
(103,723)
$
291,343
$
1,282,560
Common stock
Preferred stock
Additional
Accumulated other
Total
paid in
comprehensive
Retained
stockholders
Shares
Amount
Series A
Amount
capital
losses
earnings
equity
Balance December 31, 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
—
—
—
—
—
—
(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
—
—
—
—
—
—
(200,040)
(200,040)
Balance June 30, 2022
167,645,373
$
1,677
1
$
—
$
1,091,362
$
(78,138)
$
241,478
$
1,256,379
See accompanying notes to unaudited condensed
 
consolidated financial statements.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
7
Unaudited Condensed Consolidated Statements of
 
Cash Flows
(In US$ thousands)
ThreeSix months ended
March 31,June 30,
2023
2022
Cash flows from operating activities:
Net income
$
107,860199,171
$
269,898561,893
Adjustments to reconcile net income to cash and restricted cash
 
provided by
operating activities:
Depreciation, depletion and amortization
39,42378,303
38,00989,393
Amortization of right of use asset - operating leases
1,0832,861
3,4014,501
Amortization of deferred financing costs
483966
484968
Non-cash interest expense
8,08616,324
7,68915,622
Amortization of contract obligations
(7,201)(15,594)
(8,670)(21,947)
Loss on disposal of property,
 
plant and equipment
121359
228257
Equity-based compensation expense
(308)981
841,815
Deferred income taxes
8,14119,912
19,02742,061
Reclamation of asset retirement obligations
(737)(2,035)
(1,156)(3,601)
(Decrease) increase in provision for discounting and credit
 
losses
(3,988)(3,719)
428584
Changes in operating assets and liabilities:
Accounts receivable
105,270117,875
(226,983)(304,707)
Inventories
(28,039)(104,742)
(10,574)9,700
Other assets
5,362(2,313)
3,160(18,460)
Accounts payable
7,60123,335
(34,488)(5,160)
Accrued expenses and other current liabilities
(11,883)(2,393)
54,96771,595
Operating lease liabilities
(2,080)(5,001)
—(4,163)
Income tax payable
(8,510)(105,575)
(2,086)73,114
Change in other liabilities
2,9425,159
58,4314,827
Net cash provided by operating activities
223,626223,874
171,849518,292
Cash flows from investing activities:
Capital expenditures
(54,839)(104,853)
(37,768)(87,875)
Purchase of restricted deposits
(2,403)(5,001)
(3,548)(6,251)
Redemption of restricted deposits
3,0954,780
140606
Net cash used in investing activities
(54,147)(105,074)
(41,176)(93,520)
Cash flows from financing activities:
Principal payments on interest bearing liabilities and other financial
 
liabilities
(920)(1,498)
(4,773)(7,085)
Principal payments on finance lease obligations
(31)(64)
(21)(61)
Premiums paid on early redemption of debt
—
(22)
Dividends paid
(8,371)
(348,423)
Net cash used in financing activities
(951)(9,933)
(4,816)(355,591)
Net increase in cash and restricted cash
168,528108,867
125,85769,181
Effect of exchange rate changes on cash and restricted
 
cash
(4,857)(9,166)
7,679(21,228)
Cash and restricted cash at beginning of period
334,629
437,931
Cash and restricted cash at end of period
$
498,300434,330
$
571,467485,884
Supplemental disclosure of cash flow information:
Cash payments for interest
$
57514,087
$
67718,338
Cash paid for taxes
$
34,000138,525
$
—69,388
Restricted cash
$
251
$
251
See accompanying notes to unaudited condensed consolidated
 
consolidated financial statements.
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
8
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
 
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
subsidiaries.
 
References
 
to
 
“US$”
 
or
 
“USD”
 
are
 
references
 
to
 
U.S.
 
dollars.
 
References
 
to
 
“A$”
 
or
 
“AUD”
 
are
references
 
to
 
Australian
 
dollars,
 
the
 
lawful
 
currency
 
of
 
the
 
Commonwealth
 
of
 
Australia.
 
The
 
“Company”
 
and
“Coronado”
 
are
 
used
 
interchangeably
 
to
 
refer
 
to
 
Coronado
 
Global
 
Resources
 
Inc.
 
and
 
its
 
subsidiaries,
collectively, or to Coronado Global Resources Inc., as
 
appropriate to the context.
 
All intercompany balances and
transactions have been eliminated upon consolidation.
 
In
 
the
 
opinion
 
of
 
management,
 
these
 
interim
 
financial
 
statements
 
reflect
 
all
 
normal,
 
recurring
 
adjustments
necessary
 
for
 
the
 
fair
 
presentation
 
of
 
the
 
Company’s
 
financial
 
position,
 
results
 
of
 
operations,
 
comprehensive
income, cash flows and changes in
 
equity for the periods presented. Balance sheet information
 
presented herein
as of December 31,
 
2022 has been derived from
 
the Company’s audited consolidated balance sheet at
 
that date.
The
Company’s
results
 
of
operations
for
 
the
three
and
six
months
 
ended March 31,
June
30,
 
2023 are not necessarily
 
indicativeare
not
necessarily
indicative of the results that may be expected for the year ending
 
ending December 31, 2023.
2.
 
Summary of Significant Accounting Policies
Please see Note 2 “Summary
 
of Significant Accounting Policies”
 
contained in the audited
 
consolidated financial
statements for the year ended December 31, 2022 included in Coronado Global Resources Inc.’s Annual Report
on Form 10-K filed with the SEC and ASX on February
 
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
 
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 STATESTATEMENTS
 
MENTS (Continued)
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
9
Adjusted EBITDA is
 
defined as earnings
 
before interest, taxes,
 
depreciation, depletion and
 
amortization and other
foreign exchange losses. Adjusted EBITDA is
 
also adjusted for certain discrete items that
 
management exclude
in analyzing each
 
of the
 
Company’s segments’ operating performance.
 
“Other and corporate”
 
relates to additional
financial information for
 
the corporate function
 
such as accounting,
 
treasury, legal, human resources,
 
compliance,
and tax.
 
As such, the corporate function is not determined to be
 
a reportable segment but is discretely disclosed
for purposes of reconciliation to the Company’s
 
unaudited Condensed Consolidated Financial Statements.
Reportable segment results as of and
 
of and for
the three and six months ended
 
March 31,ended June 30, 2023 and
 
and 2022 are presented
below:
presented below:
(in US$ thousands)
Australia
United
States
Other and
Corporate
Total
Three months ended March 31,June 30, 2023
Total
 
revenues
$
398,661431,806
$
367,053295,720
$
—
$
765,714727,526
Adjusted EBITDA
13,23354,700
185,042116,487
(7,526)(9,661)
190,749161,526
Total
 
assets
1,146,5081,149,614
951,2371,018,177
539,722519,168
2,637,4672,686,959
Capital expenditures
7,23516,493
34,16331,044
5526
41,45347,563
Three months ended March 31,June 30, 2022
Total
 
revenues
$
605,298578,388
$
341,827454,316
$
—
$
947,1251,032,704
Adjusted EBITDA
238,968196,315
179,899252,394
(7,880)(10,349)
410,987438,360
Total
 
assets
1,371,2941,473,795
976,3261,044,753
504,735240,943
2,852,3552,759,491
Capital expenditures
15,96230,755
23,74920,673
92236
39,80351,664
Six months ended June 30, 2023
Total
revenues
$
830,467
$
662,773
$
—
$
1,493,240
Adjusted EBITDA
67,933
301,529
(17,186)
352,276
Total
assets
1,149,614
1,018,177
519,168
2,686,959
Capital expenditures
23,728
65,208
81
89,017
Six months ended June 30, 2022
Total
revenues
$
1,183,686
$
796,143
$
—
$
1,979,829
Adjusted EBITDA
435,284
432,294
(18,231)
849,347
Total
assets
1,473,795
1,044,753
240,943
2,759,491
Capital expenditures
46,716
44,422
329
91,467
The reconciliations
 
of Adjusted
EBITDA to
 
net income attributable to
 
attributable tothe Company for the
 
Company for
the three and six months
ended
March 31,ended June 30, 2023 and 2022 are as follows:
Three months ended
 
March 31,Six months ended
June 30,
June 30,
(in US$ thousands)
2023
2022
2023
2022
Net income
$
107,86091,311
$
269,898291,995
$
199,171
$
561,893
Depreciation, depletion and amortization
39,42338,880
38,00951,384
78,303
89,393
Interest expense (net of interest income)
14,66514,180
17,33217,482
28,845
34,814
Income tax expense
34,03021,975
81,943102,025
56,005
183,968
Other foreign exchange (gains) lossesgains
(1)
(2,992)(6,414)
1,991(25,138)
(9,405)
(23,147)
Losses on idled assets held for sale
(2)
1,7511,325
1,386456
(Decrease) increase3,076
1,842
Increase (decrease) in provision for
discounting and credit
losses
(3,988)269
428156
(3,719)
584
Consolidated Adjusted EBITDA
$
190,749161,526
$
410,987438,360
$
352,276
$
849,347
(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
sell. Prior to March 31, 2023, and 2022 arethe
Company had idled
assets that were classified as follows:held for sale. Refer
to Note 4 “Assets held for sale” for further details.
Three months ended March 31,
(in US$ thousands)
2023
2022
Capital expenditures per unaudited Condensed Consolidated
Statements of
Cash Flows
$
54,839
$
37,768
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 STATESTATEMENTS
 
MENTS (Continued)
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
10
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 six months ended
June
30, 2023 and 2022 are as follows:
Six months ended June 30,
(in US$ thousands)
2023
2022
Capital expenditures per unaudited Condensed Consolidated
Statements of
Cash Flows
$
104,853
$
87,875
Accruals for capital expenditures
6,755
11,067
Payment for capital acquired in prior periods
(11,241)
(7,475)
Advance payment to acquire long lead capital items
(11,350)
—
Capital expenditures per segment detail
$
89,017
$
91,467
Disaggregation of Revenue
The Company disaggregates the revenue
 
from contracts with customers by
 
major product group for each of
 
the
Company’s
 
reportable
 
segments,
 
as
 
the
 
Company
 
believes
 
it
 
best
 
depicts
 
the
 
nature,
 
amount,
 
timing
 
and
uncertainty of revenues and cash flows.
 
All revenue is recognized at a point in time.
Three months ended March 31,June 30, 2023
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
372,519403,861
$
283,023257,292
$
655,542661,153
Thermal coal
18,28519,260
64,51837,032
82,80356,292
Total
 
coal revenue
390,804423,121
347,541294,324
738,345717,445
Other
(1)
7,8578,685
19,5121,396
27,36910,081
Total
$
398,661431,806
$
367,053295,720
$
765,714727,526
Three months ended March 31,June 30, 2022
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
554,009543,345
$
337,720450,858
$
891,729994,203
Thermal coal
42,28925,001
2,6101,793
44,89926,794
Total
 
coal revenue
596,298568,346
340,330452,651
936,6281,020,997
Other
(1)
9,00010,042
1,4971,665
10,49711,707
Total
$
605,298578,388
$
341,827454,316
$
947,1251,032,704
Six months ended June 30, 2023
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
776,380
$
540,314
$
1,316,694
Thermal coal
37,545
101,551
139,096
Total
coal revenue
813,925
641,865
1,455,790
Other
(1)
16,542
20,908
37,450
Total
$
830,467
$
662,773
$
1,493,240
Six months ended June 30, 2022
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
1,097,353
$
788,579
$
1,885,932
Thermal coal
67,291
4,402
71,693
Total
coal revenue
1,164,644
792,981
1,957,625
Other
(1)
19,042
3,162
22,204
Total
$
1,183,686
$
796,143
$
1,979,829
(1) Other revenue for the Australian segment includes
 
the amortization of the Stanwell non-market coal
 
supply contract obligation liability.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q June 30, 2023
11
4.
 
Assets Held for Sale
During
 
the
 
fourth
 
quarter
 
of
 
2020, the
 
Company
 
committed
 
to
 
a
 
plan
 
to
 
sell
 
the
 
Greenbrier
 
mining
 
asset
 
and
determined that all
 
of the criteria
 
to classify assets
 
and liabilities as
 
held for sale
 
were met. The
 
asset is part
 
of
our U.S. segment, located
 
in the State of Virginia
 
in the United States. The
 
Greenbrier asset does not
 
form part
of the Company’s core business strategy and
 
has been idledidle since April 1, 2020.
The
Company
remains
 
committed
to
a
 
plan
to
sell
 
the Greenbrier
 
mining asset,
however,
 
on
March
31,
2023,
the
Company
concluded that the timing of
 
the sale
within
the
next
 
twelve
months
is
uncertain.
 
As such,
the Greenbrier
 
mining
asset
 
nohas
 
longerbeen
 
meetsreclassified
as
held
and
used
since
March
31,
2023,
as
it
does
not
meet
 
the
 
criteria
 
for
classification as held for sale and hassale.
The Greenbrier
 
been reclassified as held for use asmining asset
 
of March 31, 2023, however it remains idle
and the
Company does
not intend
to recommence
operations at
the
idle.mine.
 
The assets and
 
liabilities of Greenbrier met
 
the criteria for
 
classification as held for
 
sale as of
 
December 31, 2022,
therefore the Condensed Consolidated Balance Sheet continues to reflect these assets and liabilities as held for
sale as of that date.
 
5.
 
Inventories
(in US$ thousands)
March 31,June 30,
2023
December 31,
2022
Raw coal
$
65,571106,057
$
50,604
Saleable coal
62,37589,355
45,913
ToTotal
tal coal inventories
127,946195,412
96,517
Supplies inventory
57,06864,484
61,501
To
tal inventories
$
185,014259,896
$
158,018
Coal inventories measured at its net realizable value
 
realizable value were $
2.13.5
million
and $
5.0
 
million as at March 31,June 30, 2023
and
December 31,
 
2022, respectively,
 
and relates
 
to coal
 
designated for
 
deliveries under
 
the Stanwell
 
non-market
coal supply agreement.
6.
Property, Plant and
Equipment
 
 
 
 
 
 
 
(in US$ thousands)
June 30,
2023
December 31,
2022
Land
$
27,896
$
27,711
Buildings and improvements
89,989
91,336
Plant, machinery, mining
 
equipment and transportation vehicles
1,076,809
1,012,844
Mineral rights and reserves
390,394
373,309
Office and computer equipment
9,752
9,488
Mine development
559,010
565,106
Asset retirement obligation asset
75,338
87,877
Construction in process
119,425
82,713
To
tal cost of property,
 
plant and equipment
2,348,613
2,250,384
Less accumulated depreciation, depletion and amortization
935,120
860,836
Property, plant and
 
equipment, net
$
1,413,493
$
1,389,548
 
 
 
 
 
 
 
 
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
 
FINANCIAL STATESTATEMENTS
 
MENTS (Continued)
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
1112
6.
Property, Plant and
Equipment
(in US$ thousands)
March 31,
2023
December 31,
2022
Land
$
27,686
$
27,711
Buildings and improvements
90,770
91,336
Plant, machinery, mining
equipment and transportation vehicles
1,055,106
1,012,844
Mineral rights and reserves
392,846
373,309
Office and computer equipment
9,493
9,488
Mine development
563,755
565,106
Asset retirement obligation asset
76,017
87,877
Construction in process
99,613
82,713
To
tal cost of property,
plant and equipment
2,315,286
2,250,384
Less accumulated depreciation, depletion and amortization
904,002
860,836
Property, plant and
equipment, net
$
1,411,284
$
1,389,548
7.
 
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the
 
following:
(in US$ thousands)
March 31,June 30,
2023
December 31,
2022
Wages and employee benefits
$
42,14938,976
$
38,687
Taxes
 
other than income taxes
6,9917,901
5,988
Accrued royalties
102,383104,631
117,131
Accrued freight costs
50,51550,667
44,496
Accrued mining fees
89,52096,185
103,492
Acquisition related accruals
11,61211,470
11,669
Other liabilities
21,48525,181
22,228
Total
 
accrued expenses and other current liabilities
$
324,655335,011
$
343,691
Acquisition
 
related
 
accruals
 
is
 
an
 
accrual
 
for
 
the
 
estimated
 
remaining
 
stamp
 
duty
 
payable
 
on
 
the
 
Curragh
acquisition of $
11.611.5
 
million (A$
17.0
 
million). Refer to Note 14.15 “Contingencies” for further
details.
8. Dividends payable
Leases
On
From time to
 
Februarytime, the Company
 
21,enters into mining
 
services contracts,
which may include
embedded leases
of
mining equipment
and other
contractual agreements
to lease
mining equipment
and facilities.
Based upon
the
Company’s
assessment
of the
terms
of a
specific
lease agreement,
the Company
classifies a
lease
as either
finance or operating.
During the
three months
period ended
June
30, 2023,
 
the Company
 
Company’sentered
 
Boardinto
a number
 
of agreements
 
Directorsto
lease mining equipment.
 
declaredAt commencement of
 
athese agreements, the
 
bi-annualCompany recognized right-of
 
fully
franked
fixed
ordinary-use assets
dividendand operating lease liabilities of $
8.437.6
 
million, ormillion.
0.5Information related to the Company’s right-of
use assets and related lease liabilities are as follows:
 
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.
 
 
 
 
 
 
 
(US$ thousands)
June 30,
2023
December 31,
2022
Operating leases:
Operating lease right-of-use assets
$
51,648
$
17,385
Finance leases:
Property and equipment
360
371
Accumulated depreciation
(239)
(186)
Property and equipment, net
121
185
Current operating lease obligations
16,874
7,593
Operating lease liabilities, less current portion
38,329
15,505
Total
operating lease liabilities
55,203
23,098
Current finance lease obligations
130
127
Finance lease liabilities, less current portion
—
68
Total
Finance lease liabilities
130
195
Current lease obligation
17,004
7,720
Non-current lease obligation
38,329
15,573
Total
Lease liability
$
55,333
$
23,293
 
 
 
 
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
 
FINANCIAL STATESTATEMENTS
 
MENTS (Continued)
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
1213
June 30,
2023
December
31, 2022
Weighted Average Remaining
Lease Term (Years)
Weighted average remaining lease term – finance
leases
1.01
1.52
Weighted average remaining lease term – operating
leases
3.39
4.11
Weighted Average Discount
Rate
Weighted discount rate – finance lease
7.60%
7.60%
Weighted discount rate – operating lease
9.00%
8.94%
The Company’s operating leases have remaining lease
terms of
1
year to
5
years, some of which include
options
to extend the terms
where the Company deems
it is reasonably certain
the options will be
exercised. Maturities
of lease liabilities as at June 30, 2023, are as follows:
(US$ thousands)
Operating
Lease
Finance
Lease
Year ending
December 31,
2023
$
10,899
$
79
2024
19,295
68
2025
18,508
—
2026
11,597
—
2027
2,924
—
Thereafter
892
—
Total
lease payments
64,115
147
Less imputed interest
(8,912)
(17)
Total
lease liability
$
55,203
$
130
9.
 
Interest Bearing Liabilities
The following is a summary of interest-bearing liabilities
 
at March 31,June 30, 2023:
 
(in US$ thousands)
March 31,June 30, 2023
December 31, 2022
Weighted Average
Interest Rate at
March 31,June 30, 2023
Final
Maturity
10.75
% Senior Secured Notes
$
242,326
$
242,326
12.14
%
(2)
2026
ABL Facility
—
—
2024
Discount and debt issuance costs
(1)
(8,803)(8,214)
(9,373)
Total
 
interest bearing liabilities
$
233,523234,112
$
232,953
(1)
Debt issuance costs incurred on the establishment
 
of the ABL Facility has been included within
 
"Other non-current assets" onin the
unaudited Condensed Consolidated Balance Sheet.
(2)
 
Represents the effective interest rate.
 
Senior Secured Notes
As
of
 
March 31,June
30,
 
2023,
the
 
Company’s
 
aggregate
principal
 
amount
of
 
the
10.750
%
Senior
 
Secured
Notes
 
due
2026, or the Notes, outstanding was $
242.3
 
million. The Notes mature on
May 15, 2026
 
and are senior secured
obligations of the Company.
The
 
terms
 
of
 
the
 
Notes
 
are
 
governed
 
by
 
an
 
indenture,
 
dated
 
as
 
of
 
May
 
12,
 
2021,
 
or
 
the
 
Indenture,
 
among
Coronado Finance
 
Pty Ltd,
 
an Australian
 
proprietary
 
company,
 
as issuer,
 
Coronado,
 
as parent
 
guarantor,
 
the
other guarantors
 
party thereto
 
and Wilmington
 
Trust,
 
National Association,
 
as trustee.
 
The Indenture
 
contains
customary
 
covenants
 
for
 
high
 
yield
 
bonds,
 
including,
 
but
 
not
 
limited
 
to,
 
limitations
 
on
 
investments,
 
liens,
indebtedness, asset
 
sales, transactions
 
with affiliates
 
and restricted
 
payments, including
 
payment of
 
dividends
on capital stock.
As of March 31,June
30, 2023, the
Company was in compliance
 
compliance with all
applicable covenants under
the
Indenture.
 
The carrying
 
value of
 
debt issuance
 
costs, recorded
 
as a
 
direct deduction
 
from the
 
face amount
 
of the
 
Notes,
were $
8.88.2
 
million and $
9.4
 
million at March 31,June 30, 2023 and December 31, 2022, respectively.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q June 30, 2023
14
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,
 
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 March 31,June
30, 2023,
no
 
amounts were
drawn and
no
 
letters of credit
were outstanding
 
under the
ABL Facility.
As at March 31,June 30, 2023, the Company was in compliance
with all
applicable covenants under the ABL Facility.
The carrying value of debt
 
issuance costs, recorded as “Other non-current assets” in
 
the unaudited Consolidated
Balance Sheets, were $
2.01.5
million and $
2.5
 
million at March 31,June 30, 2023 and December 31, 2022, respectively.
Subsequent to June 30, 2023, the Company satisfied
 
respectively.all conditions precedent under a New ABL
Facility at which
time the New ABL Facility
replaced the existing
ABL Facility.
Refer to Note 16.
Material Transactions
for further
details.
 
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 three six
months
ended March 31,
June 30,
2023
 
and
2022,
the
Company
estimated
its
 
annual
effective
tax
rate
and
applied this effective tax rate to its
 
year-to-date pretax income at the end
 
of the interim reporting period. The tax
effects of unusual or
 
infrequently occurring items,
 
including effects of changes
 
in tax laws or rates
 
rates and changes
in judgment about the
 
realizability of deferred
 
tax assets, are reported
 
in the interim
 
period in which they
 
occur.
The Company’s 2023 estimated
 
annual effective tax rate
 
is
24.021.9
%, which has been favorably
 
impacted by mine
depletion deductions in
 
the United States.
The Company had
 
an income tax expense
 
of $
34.056.0
 
million based on
an income before tax of $
141.9255.2
 
million for the threesix months ended March 31,June 30, 2023.
Income
tax
 
expense
of
 
$
81.9184.0
 
million
for
 
the three
six
 
months
ended
 
March 31,June
30,
 
2022
was
 
calculated
based
 
on
an
estimated annual effective tax rate of
23.324.7
% for the period.
The Company utilizes the
 
“more likely than not”
 
standard in recognizing
 
a tax benefit in
 
its financial statements.
For
the
three
six months
ended
 
March
31,
June 30, 2023,
the
 
Company
had
no
 
unrecognized
tax
benefits.
 
If
accrual
for interest
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.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Continued)
Coronado Global Resources Inc.
Form 10-Q June 30, 2023
15
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 March 31,June 30,
Six months ended June 30,
(in US$ thousands, except per share data)
2023
2022
2023
2022
Numerator:
Net income attributable to Company
stockholders
 
$
107,86091,311
$
269,898291,995
$
199,171
$
561,893
Denominator (in thousands):
 
Weighted-average shares of common stock
outstanding
167,645
167,645
167,645
167,645
Effects of dilutive shares
307524
88168
458
192
Weighted average diluted shares of common
stock
outstanding
167,952168,169
167,733167,813
168,103
167,837
Earnings Per Share (US$):
Basic
0.640.54
1.611.74
1.19
3.35
Dilutive
0.640.54
1.611.74
1.18
3.35
The Company’s common stock is publicly traded on the
ASX in the form of CDIs, convertible at the option of the
holders into shares of the Company’s common stock
on a
10-for-1 basis
.
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 June 30, 2023
16
Financial Instruments Measured on a Recurring Basis
As of March
 
31, June 30,
2023, there
 
were
no
 
financial instruments
 
required to be
 
be measured
at fair
 
value on a
 
a recurring
basis.
Other Financial Instruments
The following methods
 
and assumptions
 
are used to
 
estimate the fair
 
value of other
 
financial instruments
 
as of
March 31,June 30, 2023 and December 31, 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,June 30, 2023,
 
2023, there were
no
 
borrowings outstanding under the
ABL Facility.
The estimated
fair value of
the Notes as
of March 31,
June 30, 2023 was approximately
$
253.3251.7
 
million based upon
quoted market
prices in a market that is not considered active (Level 2).
13.
 
Accumulated Other Comprehensive Losses
The Company’s Accumulated Other Comprehensive
Losses consists of foreign currency translation adjustment
of subsidiaries for which the functional currency is different
of the Group’s functional currency in U.S.
dollar.
Accumulated other comprehensive losses consisted of
 
the following at March 31,June 30, 2023:
(in US$ thousands)
Foreign
currency
translation
adjustments
Balance at December 31, 2022
$
(91,423)
Net current-period other comprehensive income (loss):
Loss in other comprehensive income before reclassifications
 
(807)(3,806)
Loss on long-term intra-entity foreign currency transactions
(3,696)(8,494)
Total
 
net current-period other comprehensive loss
(4,503)(12,300)
Balance at March 31,June 30, 2023
$
(95,926)(103,723)
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
 
FINANCIAL STATESTATEMENTS
 
MENTS (Continued)
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
1517
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,June 30, 2023 are as follows:
(in US$ thousands)
Amount
Year ending
 
December 31,
2023
$
4,0433,646
2024
4,7365,346
2025
4,6295,241
2026
4,5005,113
2027
4,4745,087
Thereafter
23,71125,834
Total
$
46,09350,267
Mineral leases are not in scope of Accounting Standards Codification,
or ASC, 842 and continue to be
be accounted for under the guidance in ASC 932, Extractive
Extractive Activities – Mining.
(b)
 
Other commitments
As of
March 31, June 30, 2023,
purchase commitments for
capital expenditures were
$
26.632.5
 
million, all
of which is
obligated
within the next twelve months.
In Australia, the
 
Company has generally
 
secured the ability
 
to transport coal
 
through rail contracts
 
and coal export
terminal contracts that are primarily funded
 
through take-or-pay arrangements with terms ranging up to
13 years
.
 
In the U.S.,
the Company
 
typically negotiates
its rail and
 
and coal terminal access
 
access on
an annual
basis.
 
As of March
June
31,30, 2023, these Australian and U.S.
 
commitments under take-or-pay
 
arrangements totaled $
0.9
 
billion, of which
approximately $
96.095.0
 
million is obligated within the next twelve months.
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.
 
Sheets. Management
does not expect any material losses to result from these
 
guarantees or off-balance sheet financial instruments.
As required
 
by certain
 
agreements, the
 
Company had
 
cash collateral
 
in the
 
form of
 
deposits in
 
the amount
 
of
$
86.589.5
 
million and
$
89.1
 
million as of
 
March 31,of June
30, 2023
 
and December 31,
 
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,
 
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 March 31,June 30, 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 June 30,
 
As of
March
31, 2023,
the
Company
had
outstanding
 
surety
bonds
of $
37.640.8
 
million and letters of
 
letterscredit
of
 
of
credit of $
16.8
 
million
issued
from
our
available
bank
guarantees,
 
to
meet
contractual
obligations
under
workers
compensation insurance and to secure other obligations
 
and commitments.
 
For
the
Australian
Operations,
the
Company
had
bank
guarantees
outstanding
of
 
$
25.524.2
 
million
at
March
31, June 30, 2023,
2023, primarily in respect of certain rail and port arrangements
 
of the Company.
 
As at March
 
31, June 30,
2023, the
 
Company had total
 
total outstanding
bank guarantees
 
provided of
$
42.341.0
 
million to
secure
obligations and
 
commitments. Future
 
regulatory changes
 
relating to
 
these obligations
 
could result
 
in increased
obligations, additional costs or additional collateral requirements.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
 
FINANCIAL STATESTATEMENTS
 
MENTS (Continued)
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
1618
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
 
$
55.254.5
 
million
 
(A$
82.2
 
million)
 
plus
 
unpaid
 
tax
 
interest
 
of
 
$
8.18.0
 
million
(A$
12.1
 
million).
 
On
 
November
 
23,
 
2022,
 
the
 
Company
 
filed
 
an
 
objection
 
to
 
the
 
assessment
 
and
 
is
 
currently
awaiting the outcome of this objection. The outcome of this
 
this objection isremains uncertain.
 
The Company continues to
 
to maintain its position and
 
position and the
estimated accrual of
$
28.928.5
 
million (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 datefollowing
filing of the stamp duty
objection reducing
the estimated accrual
 
accrual to $
11.611.5
 
million (A$
17.3
 
million), which
which
is
included
 
within
 
“Accrued
 
Expenses
 
and
Other
 
Current
 
Liabilities”
 
in
 
its
unaudited
 
Condensed
Consolidated
Consolidated Balance sheet,
 
as at March 31,June 30, 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
 
operations and/or liquidity of the Company.
16.
Subsequent Events Material Transactions
New asset-based revolving credit facility
On May
 
8, 2023,
 
or the
Signing Date,
the Company,
Coronado Coal
 
Corporation, a Delaware
 
Delaware corporation and wholly
 
and
wholly owned subsidiary
of the Company,
 
Coronado Finance Pty
 
Ltd, an Australian
 
proprietary company
 
and a
wholly owned
 
owned subsidiary
of
the Company,
 
or an Australian
 
Australian Borrower, Coronado
 
Coronado Curragh
Pty Ltd,
 
an Australian proprietary
proprietary company and wholly owned subsidiary of the Company, or an Australian Borrower and, together with
wholly
owned
subsidiary
of
the
 
otherCompany,
or
an
 
Australian
 
Borrower
the
Borrowers,
and
the
other
guarantors
party
thereto,
collectively
with
the
Company,
the
Guarantors
 
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
asset-based revolving credit
agreement in
an initial
aggregate amount of
 
of $
150.0
 
million, or
the New
ABL Facility,
with Global
Loan Agency
Services Australia
 
Australia Pty Ltd,
as the
 
Administrative Agent,
Global Loan
 
Agency Services
Australia Nominees
Pty
Ltd, as the
Collateral Agent,
 
the Collateral Agent, theHongkong and
 
Hongkong and Shanghai Banking
 
Corporation Limited,
Sydney Branch, as
 
as the
Lender, and DBS Bank
 
Lender,
and DBS
Bank Limited,
Australia Branch,
 
as the
 
Lender and, together
 
together with the other
 
the
other Lender, the Lenders.
 
Upon satisfaction of the stipulated conditionsOn August
 
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 by3, 2023,
 
the
Company for
 
shipment ofsatisfied all
 
coal,conditions precedent
under the
 
New ABL
 
Facility willagreement
 
replace the,
 
at
which time the New ABL Facility became effective
and replaced the predecessor ABL
Facility.
 
The conditions
precedent under
theThe New
 
ABL Facility
 
need tomatures in
 
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 CompanyAugust 2026
 
and each lender under the New ABL
Facility.
The New ABL
Facility will
mature
three years
after the
Signing Date
and will provideprovides
 
for up to
 
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
revolving credit facility.
Availability under the New
 
New ABL Facility is
 
is limited to an
 
an eligible borrowing base, determined
 
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 exceptionsexceptions.
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 STATESTATEMENTS
 
MENTS (Continued)
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
1719
The New
 
ABL Facility
 
contains customary representations
 
and warranties
 
and affirmative and
 
negative covenants
including, among
 
others, a
 
covenant regarding
 
the maintenance
 
of leverage
 
ratio to
 
be less
 
than
3.00
 
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.
TheSubject
 
New
ABL
Facility
provides
forto
 
customary
 
eventsgrace
 
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,periods
 
and
Employee Retirement
 
Income Securitynotice
 
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
underrequirements,
 
the
 
New
 
ABL
 
Facility
 
immediatelyalso
 
duecontains
 
andcustomary
payable, terminate such Lenders’
commitments to make loans
under the New ABL
Facility, require the Borrowers
to cash collateralize
any letterevents of
credit obligations and/or
exercise any and
all remedies and
other rights under
the New ABL Facility. default.
Curragh Housing Transaction
On May 8, 2023,
the Company entered into an
 
agreement, the Curragh Housing Agreement, for accommodation
services
and
to
 
sell
and
leaseback
housing
housing
and
 
accommodation
 
assets
included
 
in
property,
 
plant and
 
and
equipment.
The
 
transaction
did
 
not
satisfy
the
 
sale
 
criteria
 
under
 
ASC
 
606
 
–
Revenues
 
withfrom
 
Contracts
 
with
Customers
Customers
 
and
 
was
 
deemed
 
a
 
financing
arrangement.
arrangement.
As
a
result,
the
Company
continued
to
recognize
 
the
underlying property,
 
plant and
equipment on
its
 
its condensed
 
consolidated
balance
 
sheet. Upon
 
Thecompletion,
 
the
proceeds
 
of
 
$
23.222.9
 
million
 
(A$
34.6
 
million)
 
received
 
from
 
the
transaction
transaction
will
 
be
recorded
as
 
“Other Financial
 
Financial
Liabilities” on the
Company’s condensed
consolidated balance sheet.
The term of
 
the Company’sfinancing arrangement
 
condensed consolidated
balance
sheet. The term of the financing arrangement is
ten years
 
with an effective interest rate of
12.8
%.
 
In connection with this transaction, the
 
Company borrowed an additional amount of $
27.126.8
 
million (A$
40.4
 
million)
which will
be recorded
in “Interest
Bearing Liabilities”.
on completion
date. The
term of
the arrangement
 
is
ten years
years with an effective
interest rate of
12.8
%.
The Curragh Housing Agreement is subject to conditions
precedent not completed as at June 30, 2023.
In line
 
with the
 
Company’s
 
capital management
 
strategy,
 
the above
 
transactions provide
 
additional liquidity.
 
In
addition,
the
accommodation
 
services
component
of
the
 
arrangementCurragh Housing Agreement
 
is
anticipated
to
enhance
the
level
of
the level of service for our employees at our Curragh mine.
17.
Subsequent Events
Ordinary dividends
On August 7, 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. The
Company is
not required
to make
an offer
to purchase
Notes for
this
dividend
due
to
the
available
and
unaccepted
portion
of
the
offer
to
purchase
the
Notes
previously
made
in
connection with special dividends declared on October 30,
2022.
The dividend will have a record date of
August 29, 2023
, Australia time, and be payable on
September 19, 2023
,
Australia time. CDIs will be
quoted “ex” dividend on August
28, 2023, Australia time. The total
ordinary dividend
will be funded from available cash.
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
1820
REPORT OF INDEPENDENT REGISTERED PUBLIC
 
ACCOUNTING FIRM
To the Stockholders
 
and Board of Directors of Coronado Global Resources
 
Inc.
 
Results of Review of Interim Financial Statements
We
 
have
 
reviewed
 
the
 
accompanying
 
condensed
 
consolidated
 
balance sheet
 
of
 
Coronado
 
Global
 
Resources
Inc.
 
(the
 
Company)
 
as
 
of
 
MarchJune
 
31,30,
 
2023,
 
the
 
related
 
condensed
 
consolidated
 
statements
 
of
 
operations
 
and
comprehensive
 
income
 
for
 
the
 
three-monththree
and
six-month
 
periods
 
ended
 
MarchJune
 
31,30,
 
2023
 
and
 
2022,
 
the
 
condensed
consolidated statements of stockholders’ equity for the three-month period ended March 31, 2023 and 2022, the
condensed consolidated statements
of cash flows
 
for the three-monththree-months periods ended
 
periodMarch 31 and June
30, 2023
and 2022, the condensed consolidated statements of cash flows for
the six-month periods ended MarchJune 30, 2023
31, 2023 and
 
2022,
and
 
the
 
related
 
notes
 
(collectively
 
referred
 
to
 
as
 
the
 
“condensed
 
consolidated
 
interim
 
financial
statements”). Based on our
 
statements”).
Based on
our reviews,
we are
not aware
 
of any
material modifications
 
that should be made to
the
condensed consolidated
interim financial
statements for
them to
 
be madein
 
to theconformity with
 
condensed
consolidated interimU.S. generally
 
financial statements
for them
to be
in conformity
with U.S.
generally accepted
accounting
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, 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 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, 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
 
the PCAOB. A
review of interim
financial statements
consists principally
 
of applying
 
analytical procedures
 
and making
 
inquiries of
 
persons
 
responsible for
 
financial
and accounting matters.
 
It is substantially
 
less in scope
 
than an audit
 
conducted in accordance
 
with the standards
of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as
a whole. Accordingly,
 
we do not express such an opinion.
/s/ Ernst & Young
Brisbane, Australia
May 8,August 7, 2023.
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
1921
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,
 
2022 included
in Coronado Global Resources Inc.’s
 
Annual Report on Form 10-K for
 
the year ended December 31, 2022,
 
filed
with
 
the
 
U.S.
 
Securities
 
and
 
Exchange
 
Commission,
 
or
 
SEC,
 
and
 
the
 
Australian
 
Securities
 
Exchange,
 
or
 
the
ASX, on February 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,
 
as well
 
as
 
our
 
plans,
 
objectives
 
and
 
expectations
 
for
 
our
 
business,
 
operations,
 
financial
performance
 
and
 
condition.
 
Forward-looking
 
statements
 
may
 
be
 
identified
 
by
 
words
 
such
 
as
 
“may,”
 
“could,”
“believes,”
 
“estimates,”
 
“expects,”
 
“intends,”
 
“plans,”
 
“anticipate,”
 
“forecast,”
 
“outlook,”
 
“target,”
 
“likely,”
“considers” and other similar words.
Any
 
forward-looking
 
statements
 
involve
 
known
 
and
 
unknown
 
risks,
 
uncertainties,
 
assumptions
 
and
 
other
important factors that
 
could cause actual
 
results, performance,
 
events or outcomes
 
to differ
 
materially from
 
the
results,
 
performance,
 
events
 
or
 
outcomes
 
expressed
 
or
 
anticipated
 
in
 
these
 
statements,
 
many
 
of
 
which
 
are
beyond
 
our
 
control.
 
Such
 
forward-looking
 
statements
 
are
 
based
 
on
 
an
 
assessment
 
of
 
present
 
economic
 
and
operating
 
conditions
 
on
 
a
 
number
 
of
 
best
 
estimate
 
assumptions
 
regarding
 
future
 
events
 
and
 
actions.
 
These
factors are difficult to accurately predict and may be beyond our control. Factors that could affect our results, our
announced plans, or an investment in our securities include,
 
but are not limited to:
●
 
the prices we receive for our coal;
●
 
uncertainty in
 
global economic
 
conditions, including
 
the extent,
 
duration and
 
impact of
 
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, as the result
 
of inflationary pressures or otherwise;
●
 
the extensive forms of taxation
 
that our mining operations
 
are subject to, and future
 
tax regulations and
developments. For example,
 
the amendments to
 
the coal
 
royalty regime implemented
 
by the Queensland
state Government in
 
Australia in 2022 introducing
 
higher tiers to the
 
coal royalty rates
 
applicable to our
Australian Operations;
●
 
concerns about the environmental impacts of coal
combustion and greenhouse gas, or GHG, emissions,
relating
to
mining
activities,
including
possible
impacts
on global
climate
issues,
which
could
result
in
increased
regulation
of
coal
combustion
and
requirements
to
reduce
GHG
emissions
in
many
jurisdictions,
which
could
significantly
affect
demand
for
our
products
or
our
securities
and
reduced
access to capital and insurance;
Coronado Global Resources Inc.
Form 10-Q June 30, 2023
22
●
severe financial
 
hardship,
 
bankruptcy,
 
temporary or
 
permanent shut
 
downs or
 
operational challenges,
due
 
to
 
future
 
public
 
health
 
crisis
 
(such
 
as
 
the
 
COVID-19
 
pandemic),
 
of
 
one
 
or
 
more
 
of
 
our
 
major
customers,
 
including
 
customers
 
in
 
the
 
steel
 
industry,
 
key
 
suppliers/contractors,
 
which
 
among
 
other
adverse effects,
 
could lead
 
to reduced
 
demand for
 
our coal,
 
increased difficulty
 
collecting
receivables
and
 
customers
 
and/or
 
suppliers
 
asserting
 
force
 
majeure
 
or
 
other
 
reasons
 
for
 
not
 
performing
 
their
contractual obligations to us;
●
 
our ability to generate sufficient cash to service
 
our indebtedness and other obligations;
Coronado Global Resources Inc.
Form 10-Q March 31, 2023
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, 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 June 30, 2023
23
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, 2022,
filed with the
SEC and
ASX on February
21, 2023,
and Part
II, Item 1A.
“Risk Factors”
of our Quarterly
Report
on Form 10-Q for
the quarterly period ended March
31, 2023, filed with
SEC and ASX on February 21,
May 8, 2023, for
a more
complete
 
discussion
of
the
risks
and
uncertainties
mentioned
mentioned
above
 
and
for
 
discussion
of
 
other
risks
 
and
uncertainties
we face
that could
 
cause actual
results to
differ materially from
those expressed or implied by
 
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
 
10-Q and hereafter in our other filings
 
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
 
Virginia,
 
West Virginia
and Pennsylvania in the United States.
 
Our Australian
 
Operations
 
comprise the
 
100%-owned
 
Curragh producing
 
mine complex.
 
Our U.S.
 
Operations
comprise
 
two
 
100%-owned
 
producing
 
mine
 
complexes
 
(Buchanan
 
and
 
Logan),
 
one
 
100%-owned
 
idled
 
mine
complex (Greenbrier) and two development properties (Mon Valley
 
and Russell County). In addition to Met coal,
our Australian
 
Operations sell
 
thermal coal
 
domestically,
 
which is
 
used to
 
generate electricity,
 
to Stanwell
 
and
some thermal
 
coal in
 
the export
 
market. Our
 
U.S. Operations
 
primarily focus
 
on the
 
production of
 
Met coal
 
for
the North American domestic and seaborne export
 
markets and also produce and sell some
 
thermal coal that is
extracted in the process of mining Met coal.
 
Coking coal
index prices
have continued
to increase
Coronado performed strongly in the
 
firstsecond quarter of 2023 delivering on
a number of milestones that we
believe
have
placed
the
Company
well
for
the
remainder
of
2023.
The
business
delivered
quarter-on-quarter
higher
production,
overburden
and
sales
volumes,
and
continued
to
maintain
a
strong
balance
sheet
with
healthy
liquidity levels.
Coking coal index prices continued to
decline over the second quarter
 
of 2023. The downward price adjustment
was driven mostly by
weak end user demand
resulting in delayed
restocking of coal inventories,
combined with
higher supply from Australia
due to drier
operating conditions in the
second quarter of 2023.
The global economic
environment and weak steel demand
continues to put pressure
on steel margins with steelmakers
continuing to
lower steel prices and delay raw material procurement. The Australian
Premium Low Volatile Hard Coking
Coal,
or AUS PLV HCC, index price averaged $242.8 per Mt for the three months
ended June 30, 2023, $101.1 per Mt
lower, compared to the three months ended March 31, 2023. The
AUS PLV HCC averaged $293.8 per Mt for the
six months ended June 30, 2023, $173.0 per Mt lower,
 
compared to
fourth quarter
of
2022, primarily driven by supply constraints in key Met coal
markets caused by wet weather amidst mild demand
recovery from
Indian and
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 the six months ended June 30, 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
by switching coal sales
from China to Europe providing higher returns for our
products.
Our results for the threesix months ended
March 31, June 30, 2023, were adversely impacted
by (1) lower average realized Met
price per Mt sold compared to the
six months ended June 30, 2022, (2) significant wet weather
events impacting
 
productionweather events during the
first quarter
of 2023
 
at our
 
Australian Operations
 
,impacting production,
 
(2)(3) continued
 
inflationary
 
pressure, (3)
reduced coal
availability from
equipment breakdown,
 
(4) a
additional fleets deployed to recover pre-strip overburden removal, (5)
 
a train derailment in January 2023 on the
Blackwater line which impacted our sales volume.
For
 
on the
 
Blackwater linesix
 
which impactedmonths
 
our sales
volume, (5) lowerended
 
average realized June
30,
2023,
we
produced
8.2
MMt
and
sold
7.6
MMt
of
coal.
Met
 
price per Mt soldcoal
 
compared to firstsales
represented 75.3%
 
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
 
sold and 88.8%
90.0% of
 
total coal
revenues for
the six
months ended
June 30, 2023, compared to 77.8% and 96.3%, respectively,
 
for the three
six months ended
March 31,
2023. June 30, 2022.
Coal revenues of $738.3$1,455.8 million for
 
million for the three
six months ended March 31,June
 
30, 2023, decreased by 21.2%25.6% compared
 
compared to the
the same
period in
 
2022, driven
by decreased
 
average realized
 
Met price per
Mt sold,
which was $65.7
 
per Mt lower
 
sold fromthan the
$292.8 average realized
 
$266.5 toprice per Mt sold
 
$239.7.for the six months
ended June 30,
2022. Sales volumes
 
were 0.7 Mt
lower
for the
 
threesix months ended
 
ended March
31,June 30, 2023,
 
compared to the
 
the same
period in
2022
due to lower production primarily driven by higher than anticipated wet weather resulting in
lower coal availability
at
our
Australian
Operations
combined
with
shipping
delays
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 bylargely due
 
inflationary pressure on supply,to significant
wet
 
contractors and fuel costs,
additionalweather
 
fleets
mobilized
since
March
31,
2022events
 
and
 
unplanned
equipment
 
breakdownbreakdowns,
 
atimpacting
 
ourproduction
 
Australian
Operations and higher freight costs at our U.S. Operationsperformance
 
.
Liquidity
As of March 31, 2023,and
 
the Company’s netcoal
 
cash position,availability,
 
comprising of $498.0 million
cash (excluding restricted
cash) less
$242.3 million
aggregate principal
amount of Notes
outstanding,
was $255.7
million.
Coronado hasand
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
2224
availabledelays on
 
liquidityproduction of
required coal
qualities to
meet sales
commitments at
our Australian
Operations during
the second quarter of 2023.
Mining costs for the six months
ended June 30, 2023, were $723.8 million,
or $12.0 per Mt sold higher
compared
to
the
corresponding
period
in
2022,
primarily
driven
by
inflationary
pressures
and
the
impacts
from
lower
production in the first quarter of 2023 deferred
to subsequent quarters following the above
average wet weather
in January and train derailment on the Blackwater line.
Dividends
On
April
5,
2023,
the
Company
settled
its
previously
declared
dividends
 
of
 
$598.08.4
 
million,
 
aswhich
were
paid
to
stockholders from available cash.
Liquidity
As of
June 30,
2023, our
net cash
position, comprising
 
of $434.1
 
March
31,
2023,
consisting
of
million cash
 
(excluding
 
restricted cash)
 
less
$242.3 million
aggregate principal
amount of
Notes outstanding,
was
$191.8
million.
Coronado
has available
liquidity of $534.1
million as of
June 30, 2023,
consisting of cash
(excluding restricted cash)
 
and $100.0 million
$100.0 million availability under our ABL facility
which remains fully undrawn.
Safety
For
 
our
 
Australian
 
Operations,
 
the
 
twelve-month
 
rolling
 
average
 
Total
 
Reportable
 
Injury
 
Frequency
 
Rate,
 
or
TRIFR, at
 
March 31,June 30,
 
2023 was
 
3.182.52,
compared to
 
a rate
 
of 3.92
 
at the
 
end of
 
December 31,
 
2022. At
 
our
U.S.
Operations,
the
 
twelve-month
rolling
 
average
Total
 
Reportable
Incident
 
Rate,
or
 
TRIR, at
 
March 31,June
30,
 
2023
was
2.432.05,
compared to a rate of 2.42
at the end of December
31, 2022.
 
Reportable rates for our Australian
and U.S.
Operations are below the relevant industry benchmarks.
 
Our
Logan
mining
complex
at
our
U.S.
Operations,
which
includes
multiple
underground
and
surface
mines,
achieved one million hours Lost Time Injury,
or LTI, free during the
quarter.
The health
and safety
 
of our
 
workforce is our
 
our number
one priority
 
and Coronado remains
 
focused on thecontinues to
 
advance several
initiatives to improve our safety and wellbeing
of all employees and contracting parties.rates every quarter.
Segment Reporting
In accordance with
 
Accounting Standards Codification,
 
or ASC, 280,
 
Segment Reporting, we
 
have adopted the
following reporting
 
segments: Australia and
 
the United
 
States. In
 
addition, “Other and
 
Corporate” is
 
not a
 
reporting
segment but is disclosed for the purposes of reconciliation
 
to our consolidated financial statements.
Results of Operations
How We Evaluate Our Operations
We
 
evaluate
 
our
 
operations
 
based
 
on
 
the
 
volume
 
of
 
coal
 
we
 
can
 
safely
 
produce
 
and
 
sell
 
in
 
compliance
 
with
regulatory
 
standards,
 
and
 
the
 
prices
 
we
 
receive
 
for
 
our
 
coal.
 
Our
 
sales
 
volume
 
and
 
sales
 
prices
 
are
 
largely
dependent upon
 
the terms
 
of our
 
coal sales
 
contracts, for
 
which prices
 
generally are
 
set based
 
on daily
 
index
averages, on a quarterly basis or annual fixed price contracts.
Our management
 
uses a
 
variety of
 
financial and
 
operating metrics
 
to analyze
 
our performance.
 
These metrics
are significant factors
 
in assessing our
 
operating results
 
and profitability.
 
These financial
 
and operating metrics
include: (i) safety and environmental metrics; (ii) Adjusted EBITDA; (iii) total sales volumes and average realized
price
 
per
 
Mt
 
sold,
 
which
 
we
 
define
 
as
 
total
 
coal
 
revenues
 
divided
 
by
 
total
 
sales
 
volume;
 
(iv) Met
 
coal
 
sales
volumes and average realized Met price per
 
Mt sold, which we define as Met coal
 
revenues divided by Met coal
sales volume; (v) average
 
segment mining costs
 
per Mt sold,
 
which we define
 
as mining costs
 
divided by sales
volumes (excluding non-produced coal) for the respective segment; (vi) average segment operating costs
 
per Mt
sold, which we define as segment operating costs divided by sales volumes for the respective segment; and (vii)
net cash, which we define
 
as cash and cash equivalents
 
(excluding restricted cash) less
 
outstanding aggregate
principal amount of 10.750% senior securesecured 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
 
applicable outbound shipping
 
port, while freight costs
 
from the port to the
 
end destination
are typically
 
borne by the
 
customer. Sales to the
 
export market from
 
our U.S.
 
Operations are generally
 
recognized
when title to
 
the coal passes
 
to the customer
 
at the
 
mine load
 
out similar
 
to a
 
domestic sale.
 
For our
 
domestic
sales,
 
customers
 
typically
 
bear
 
the
 
cost
 
of
 
freight.
 
As
 
such,
 
freight
 
expenses
 
are
 
excluded
 
from
 
cost
 
of
 
coal
revenues to allow for consistency and comparability in
 
evaluating our operating performance.
Coronado Global Resources Inc.
Form 10-Q June 30, 2023
25
Non-GAAP Financial Measures; Other Measures
The
 
following
 
discussion
 
of
 
our
 
results
 
includes
 
references
 
to
 
and
 
analysis
 
of
 
Adjusted
 
EBITDA,
 
Segment
Adjusted EBITDA and
 
mining costs, which are
 
financial measures not recognized
 
in accordance with
 
U.S. GAAP.
Non-GAAP financial
 
measures, including
 
Adjusted EBITDA,
 
Segment Adjusted
 
EBITDA and
 
mining costs,
 
are
used by investors to measure our operating performance.
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
 
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 non-GAAP measure,
 
is based on
 
reported cost of
 
coal revenues, which
 
is shown
 
on our
 
statement
of
 
operations
 
and
 
comprehensive
 
income
 
exclusive
 
of
 
freight
 
expense,
 
Stanwell
 
rebate,
 
other
 
royalties,
depreciation,
 
depletion
 
and
 
amortization,
 
and selling,
 
general and
 
administrative
 
expenses,
 
adjusted for
 
other
items that do not relate directly to the costs incurred to produce coal at a mine. Mining costs excludes these cost
components as
 
our CODM
 
does not
 
view these
 
costs as
 
directly 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
 
in the coal industry.
Three Months Ended March 31,June 30, 2023 Compared to Three
 
Three Months Ended March 31,June 30, 2022
Summary
The financial and operational highlights for the three months ended
 
March 31,June 30, 2023 include:
●
 
Net
 
income
 
of
 
$107.991.3
 
million
 
for
 
the
 
three
 
months
 
ended
 
MarchJune
 
31,30,
 
2023,
 
was
 
$162.0200.7
 
million
 
lower
compared
 
to
 
$269.9292.0
 
million
 
for
 
the
 
three
 
months
 
ended
 
MarchJune
 
31,30,
 
2022. This
 
Thisdecrease
 
was
 
driven
 
by
lower
lower revenues due
to lower
average realized
Met coal
 
price per
Mt sold,
 
partially offset by lower salescosts.
 
volume and
by higher
operating costs.
●
 
Sales volume totaled 3.7
4.0 MMt for
the three months
ended March 31, June 30,
2023, compared to
 
to 4.43.9 MMt for the
three months ended March 31,June
 
30, 2022. The lower higher
sales volumes were mainly
 
were largely driven by the impacthigher production
due to weather conditions more favorable than 2022.
 
of wet
weather
and
equipment
breakdown
on
production
performance
and
coal
availability
at
our
Australian
Operations, and a train derailment on the Blackwater line resulting in coal not being railed for two weeks
while repairs were undertaken.
●
 
Average realized Met price
per Mt sold of $219.5 for the three months ended June 30, 2023, was 31.7%
lower compared to
record quarterly average
realized price of
$321.2 per Mt
sold for the
same period in
2022.
The
coking
coal
index
prices
remained
stable
during
the
second
quarter
of
2023,
however,
significantly, lower
than the same period in 2022.
●
Adjusted EBITDA
for the
three months
ended June
30, 2023,
 
of $239.7$161.5
million,
a decrease
of $276.8
million, compared to $438.4 million for
 
the three months ended June 30, 2022,
 
March 31, 2023,largely due to lower coal
sales revenues partially offset by lower operating costs
 
was 10.1%
lower compared to $266.5 per
Mt sold for the same
period in 2022 as the
Met coal supply has readjusted
following the impact of Russia and Ukraine war on the global coal supply chain
and supply constraints in
key Met coal markets during the first half of 2022.
●
Adjusted EBITDA for
the three months
ended March
31, 2023, of
$190.7 million,
a decrease of
$220.2
million compared to $411.0
million for the three
months ended March
31, 2022, due to
lower coal sales
revenues and higher operating costs..
●
 
As of March
 
31,June
30, 2023,
 
the Company
 
Company had total
 
total available liquidity
 
liquidity of $598.0
$534.1
 
million, consisting
 
of $498.0$434.1
million cash (excluding restricted cash) and $100.0 million of availability
 
under the ABL Facility.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
2426
Three months ended March 31,June 30,
2023
2022
Change
%
(in US$ thousands)
Revenues:
Coal revenues
$
738,345717,445
$
936,6281,020,997
$
(198,283)(303,552)
(21.2%(29.7%)
Other revenues
27,36910,081
10,49711,707
16,872(1,626)
160.7%(13.9%)
Total
 
revenues
765,714727,526
947,1251,032,704
(181,411)(305,178)
(19.2%(29.6%)
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
380,474380,962
357,500397,463
22,974(16,501)
6.4%(4.2%)
Depreciation, depletion and amortization
39,42338,880
38,00951,384
1,414(12,504)
3.7%(24.3%)
Freight expenses
63,35357,443
59,26467,026
4,089(9,583)
6.9%(14.3%)
Stanwell rebate
39,20829,049
29,05340,532
10,155(11,483)
35.0%(28.3%)
Other royalties
85,95789,949
83,03279,348
2,92510,601
3.5%13.4%
Selling, general, and administrative expenses
7,7749,981
7,87610,376
(102)(395)
(1.3%(3.8%)
Total
 
costs and expenses
616,189606,264
574,734646,129
41,455(39,865)
7.2%(6.2%)
Other income (expenses):
Interest expense, net
(14,665)(14,180)
(17,332)(17,482)
2,6673,302
(15.4%(18.9%)
Decrease (increase)Increase in provision for
discounting and credit
losses
3,988(269)
(428)(156)
4,416(113)
(1,031.8%)72.4%
Other, net
3,0426,473
(2,790)25,083
5,832(18,610)
(209.0%(74.2%)
Total
 
other expenses, net
(7,635)(7,976)
(20,550)7,445
12,915(15,421)
(62.8%(207.1%)
Net income before tax
141,890113,286
351,841394,020
(209,951)(280,734)
(59.7%(71.2%)
Income tax expense
(34,030)(21,975)
(81,943)(102,025)
47,91380,050
(58.5%(78.5%)
Net income attributable to Coronado Global
Resources, Inc.
$
107,86091,311
$
269,898291,995
$
(162,038)(200,684)
(60.0%(68.7%)
Coal Revenues
Coal revenues
 
were $738.3
million for
the three
months ended
March 31,
2023, a
decrease of
 
$198.3 million,
compared
to
$936.6717.4
 
million
 
for
 
the
 
three
 
months
 
ended
 
MarchJune
 
31,30,
 
2022.2023,
 
Thea
 
decrease
 
wasof
 
driven$303.6
 
bymillion,
compared to
 
lower$1,021.0 million
for the
three months
ended June
30, 2022.
The decrease
was largely
a result
of
lower average realized Met
coal price of
 
$239.7219.5 per Mt sold
for the three
 
months ended March 31, June 30,
2023, compared
to
$266.5to $321.2 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
$16.9
million
compared to $10.5
million for the
three months ended
March 31, 2022.
 
This increase was
primarily driven by
a
one-off termination fee revenue from a coal sales contract
cancelled at our 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 $381.0 million for the three months ended June 30, 2023, $16.5 million, or 4.2%
lower, compared to $397.5
million for the three months ended June 30, 2022.
Cost of coal revenues for our U.S Operations for
the three months ended June 30, 2023, was $12.9
million lower
compared to the three
months ended June 30,
2022, largely due to
lower sales volume of
0.1 MMt, partially offset
by
inflationary
impact
on
labor
and
supply
costs.
Our
Australian
Operations
contributed
$3.6
million
to
the
decrease in total
 
cost of
 
coal revenues
 
were $380.5primarily due to
 
million forfavorable average
 
the threeforeign exchange
 
months endedrate on translation
of the
 
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 $12.0 millionfor the
three months
ended June
30, 2023,
of A$/US$:
0.67 compared
 
to the increase0.72
 
in total cost offor
the
 
coal revenues, largelysame
 
driven
by the impact of continued inflationary pressure on contractors’
costs, fuel, and other supply costs and additional
fleet
mobilizedperiod
 
in
 
February2022,
 
2022,and
lower
third
party
purchased
coal,
 
partially
 
offset
 
by
 
lower
purchased
coal
cost
 
of
additional
fleets
to
advance pre-strip overburden removal.
Depreciation, Depletion and Amortization
Depreciation, depletion and
 
favorableamortization was $38.9
 
average
foreign
exchange rate on
translation of the
Australian Operations for
the three months
ended March 31,
2023, of A$/US$:
0.68 compared to
0.72million for the
 
same period in
2022. Cost
of coal revenues
for our U.S
Operations for the
three
months ended March 31,
2023, was $11.0
million higher compared to
the three months ended
 
March 31, 2022,
largely due to the continued impact of inflation on laborJune 30,
 
2023,
a decrease
of $12.5
million,
as compared
to $51.4
million
for the
three months
ended
June
30, 2022.
The decrease
was
associated with
assets fully
depreciated, lower depreciation
rates following annual
useful life
review and supply costs.
favorable
average foreign exchange
rate on translation
of the Australian
Operations, partially offset by
additional equipment
brought into service during the twelve months since June 30,
2022.
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
2527
Freight Expenses
Freight expenses
 
relate to
 
costs associated
 
with rail
 
and port
 
providers,
including
 
take-or-pay commitments
 
at
our
 
Australian
 
Operations,
 
and
 
demurrage
 
costs.
 
Freight
 
expenses
 
totaled
 
$63.457.4
 
million
 
for the
 
three
 
months
ended March 31,June 30, 2023, an increasea decrease of $4.1
$9.6 million, compared to $59.3$67.0 million for the three
months ended MarchJune 30,
31, 2022. Our U.S.
Operations’ freight
cost contributed $10.0$8.1 million to
this increase, driven by coal sales
under
certain contracts
for which
we arrange
and pay
for transportation
 
to portthis decrease, driven by
 
that didlower coal sales under
Free on
 
not existBoard, or
 
to theFOB, terms,
 
same extent
during thecompared to
 
the three months
 
months ended March
 
31, 2022,June 30,
 
partially offset2022, combined
 
by lower
sales volume
and a
with favorable foreign
foreign exchange rate on translation
of our Australian
Operations.
 
Stanwell Rebate
The Stanwell rebate
was $39.2$29.0
million for
the three months
ended June
30, 2023,
a decrease
of $11.5
million,
compared to $40.5 million for the three months ended March
 
31, 2023,June 30, 2022. The decrease was largely driven by lower
realized export
 
an increase of $10.1 million,reference coal
compared to $29.1 millionpricing for
 
the prior
twelve-month period
applicable to
three months ended March
 
31, 2022. The increase wasended June
30, 2023,
 
largely driven by higher
realized export reference coal pricing for the prior twelveused to
 
-month calculate
the rebate
compared to
the same
period used to calculate the rebate.in
2022, and
favorable foreign
exchange
rate on translation of our Australian Operations.
 
Other Royalties
Other
royalties
 
were $86.0$89.9
million in
the
three
months
ended June
30, 2023,
an
increase
of $10.6
 
million,
 
inas
compared to
$79.3 million
for the
 
three months
 
ended June
 
March30, 2022.
 
31, 2023,Despite the
 
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 declinedecrease in
 
coal revenues, due
Other Royalties
 
to the adversehave increased
 
impact ofdue to the
 
adverse impact
of the new
Queensland Government
 
royalty regime
effective
 
from July
 
1, 2022
 
to our
 
Australian Operations,
 
partially offset
 
by lowerfavorable
 
sales volumesforeign exchange
 
and favorable
foreign exchange rate on
translation of our
 
of our Australian Operations.
The new royalty
 
royalty regime has
resulted in
 
$29.0
29.4 million additional
royalty
costs for the three months ended June 30, 2023, compared
 
March 31, 2023.to the same period in 2022.
Interest Expense, net
Interest expense,
net was
$14.2 million
in the
three
months ended
June 30,
2023, a
decrease
of $3.3
million
compared
to $17.5
million
for the
three
months
ended
June 30,
2022.
The decrease
was
due to
lower
Notes
outstanding during the three months ended June 30, 2023,
following redemptions since June 30, 2022.
Income Tax Expense
Income
tax
expense
of
$22.0
million
for
the
three
months
ended
June
30,
2023,
decreased
by
$80.0
million,
compared to a tax expense of $102.0 million for the
three months ended June 30, 2022, driven by
lower income
before tax in the 2023 period.
The income tax expense
for the three months
ended June 30,
2023, is based on
an annual effective
tax rate of
21.9%.
Coronado Global Resources Inc.
Form 10-Q June 30, 2023
28
Six months ended June 30, 2023 compared to Six
months ended June 30, 2022
Summary
The financial and operational highlights for the six months
ended June 30, 2023 include:
●
Net income of $199.2 million for the six months ended June
30, 2023, a decrease of $362.7 million, from
$561.9 million
for the
six months
ended June
30, 2022.
The decrease
was a
result of
lower revenues,
higher operating costs partially offset by lower income
tax expense.
●
Sales volume
totaled 7.6
MMt for
the six
months ended
June 30,
2023, or
0.7 MMt
lower than
the six
months
ended
June
30,
2022.
The
lower
sales
volumes
were
primarily
driven
by
the
impact
of
wet
weather
and
equipment
breakdowns
on
production
performance
and
coal
availability,
delay
on
production of required coal
qualities to meet sales
commitments and sales
slippage into next quarter
at
our Australian Operations combined with change in timing
of shipments at our U.S. Operations.
●
Average realized
Met price
per Mt
sold of
$229.1 for
the six
months ended
June 30,
2023 was
21.8%
lower compared to
$292.8 per Mt
sold for the
six months ended
June 30, 2022,
as the Met
coal supply
has readjusted following the impact of the Russia and Ukraine war on the global coal supply chain in the
first half of 2022, combined
with improved supply from
Australia and weak demand from
steelmakers in
Asia and Europe.
●
Adjusted EBITDA
of $352.3
million for
the six
months ended
June 30,
2023, was
$497.1 million
lower
compared to $849.3 million for the six months ended
June 30, 2022. This decrease was a result of lower
coal revenues and higher operating costs.
●
As of June 30, 2023,
the Company had net cash
of $191.8 million, consisting
of a closing cash balance
(excluding restricted cash)
of $434.1 million and
$242.3 million aggregate
principal
amount outstanding
of the Notes.
Six months ended June 30,
2023
2022
Change
%
(in US$ thousands)
Revenues:
Coal revenues
$
1,455,790
$
1,957,625
$
(501,835)
(25.6%)
Other revenues
37,450
22,204
15,246
68.7%
Total
revenues
1,493,240
1,979,829
(486,589)
(24.6%)
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
761,436
754,963
6,473
0.9%
Depreciation, depletion and amortization
78,303
89,393
(11,090)
(12.4%)
Freight expenses
120,796
126,290
(5,494)
(4.4%)
Stanwell rebate
68,257
69,585
(1,328)
(1.9%)
Other royalties
175,906
162,380
13,526
8.3%
Selling, general, and administrative expenses
17,755
18,252
(497)
(2.7%)
Total
costs and expenses
1,222,453
1,220,863
1,590
0.1%
Other income (expenses):
Interest expense, net
(28,845)
(34,814)
5,969
(17.1%)
Decrease (increase) in provision for discounting
and credit losses
3,719
(584)
4,303
(736.8%)
Other, net
9,515
22,293
(12,778)
(57.3%)
Total
other income (expenses), net
(15,611)
(13,105)
(2,506)
19.1%
Net income (loss) before tax
255,176
745,861
(490,685)
(65.8%)
Income tax (expense) benefit
(56,005)
(183,968)
127,963
(69.6%)
Net income (loss)
199,171
561,893
(362,722)
(64.6%)
Net income (loss) attributable to Coronado Global
Resources, Inc.
$
199,171
$
561,893
$
(362,722)
(64.6%)
Coronado Global Resources Inc.
Form 10-Q June 30, 2023
29
Coal Revenues
Coal
revenues
were
$1,455.8
million
for
the
six
months
ended
June
30,
2023,
a
decrease
of
$501.8
million,
compared to $1,957.6 million for the six months
ended June 30, 2022. The
decrease was driven by unfavorable
market conditions and
lower coal
indices, which resulted
in lower
average realized Met
price per Mt
sold of
$229.1
compared
to
$292.8
per
Mt
sold
combined
with
lower
sales
volume
of
7.6
million,
a
decrease
of
0.7
million,
compared to the same period in 2022.
Other Revenues
Other
revenues
were
$37.5
million
for
the
six
months
ended
June
30,
2023,
an
increase
of
$15.3
million,
compared
to
$22.2
million
for
the
six
months
ended
June
30,
2022.
This
increase
was
primarily
driven
by
a
termination fee revenue from a coal sales contract cancelled
at our U.S. Operations.
Cost of Coal Revenues (Exclusive of Items Shown
Separately Below)
Total
cost
of
coal
revenues
was
$761.4
million
for
the
six
months
ended
June
30,
2023,
a
decrease
of
$6.5
million, compared to $755.0 million for the six months
ended June 30, 2022.
Cost of
coal revenues
for our
Australian Operations
in the
six months
ended June
30, 2023,
were $8.4
million
higher compared to the
same period in
2022, driven by the
continued impact of inflation
on labor, contractor costs
and
other
supply
costs.
Higher
costs
were
partially
offset
by
the
impact
of
building
inventory
resulting
from
saleable production exceeding sales volume in the 2023 period and favorable average foreign exchange rate on
translation of
the Australian
Operations for
the six months
ended June 30,
2023, of
A$/US$: 0.68
compared to
0.72 for the same
period in 2022.
Cost of coal
revenues for our
U.S. Operations were
$1.9 million lower
for the
six months ended June 30, 2023, compared to the same
period in 2022.
Depreciation, Depletion and Amortization
Depreciation, depletion and amortization was
$78.3 million for the six months
ended June 30, 2023, a decrease
of
$11.1
million,
as
compared
to
$89.4
million
for
the
six
months
ended
June
30,
2022.
The
decrease
was
associated with
assets fully
depreciated, lower depreciation
rates following annual
useful life
review and
favorable
average foreign exchange
rate on translation
of the Australian
Operations, partially offset by
additional equipment
brought into service during the twelve months since June 30,
2022.
Freight Expenses
Freight
expenses
totaled
$120.8
million
for
the
six
months
ended
June
30,
2023,
a
decrease
of
$5.5
million,
compared to $126.2 million for the six months ended June 30, 2022. Our Australian Operations contributed $7.5
million
to
this
decrease
due
to
lower
coal
sales
and
the
benefits
of
lower
average
foreign
exchange
rate
on
translation
of
the
Australian
Operations,
partially
offset
by
higher
freight
costs
at
our
U.S.
Operations
due
to
higher coal sales on FOB terms compared to the six
months ended June 30, 2022.
Stanwell Rebate
The Stanwell
rebate was
$68.3 million
for the
six months
ended June
30, 2023,
a decrease
of $1.3
million, as
compared to $69.6 million for the six months ended June 30, 2022. The decrease was due to lower
export sales
volume and favorable average
foreign exchange rate on
translation of the Australian
Operations,
partially offset
by higher
realized export
reference coal
pricing for
the prior
twelve-month
period applicable
to the
six months
ended June 30, 2023, used to calculate the rebate compared
to the same period in 2022.
Other Royalties
Other
royalties
were
$175.9
million
for
the six
months
ended
June
30,
2023,
an
increase
of
$13.5
million,
as
compared to
$162.4 million
for the
six months
ended June
30, 2022.
Royalties have
increased compared
to a
significant decline in coal revenues due to the adverse impact of the new
royalty regime effective since 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
resulted
in $58.7
million additional
royalty
costs for the six months ended June 30, 2023 compared
to the same period in 2022.
Decrease (increase) in Provision for Discounting and
 
Credit Losses
Decrease in provision for discounting and
 
discounting and credit losses of
$3.9 $3.7 million in the
 
threesix months ended March 31,June 30, 2023,
 
2023,a
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$4.3 million
 
in the
three months
ended March
31, 2023,
a decrease
of $2.7
million
compared to
 
$17.3 millionincrease in
 
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
millionprovision for
 
the threediscounting and
 
months endedcredit losses
 
March 31,
2023, decreased
by $47.9
million,
compared to a tax expense of $81.9 million for the three months ended
March 31, 2022, driven by lower income
before tax in the 2023 period.
The income tax expense for the three months ended March 31, 2023, is based on an annual effective tax rate of
24.0%.$0.5
 
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
2630
million for the
six months ended
June 30, 2022.
The lower provision
was primarily driven
by timely collection
of
certain overdue trade receivables at December 31, 2022 during
the six months ended June 30, 2023.
Other, net
Other, net was $9.5 million
in the six months ended June 30, 2023, a decrease
of $12.8 million compared to the
net gain
of
$22.3
million
for
the six
months
ended
June
30,
2022.
The
decrease
was
driven
by
lower
foreign
exchange
gains
on
translation
of
short-term
inter-entity
balances
in
certain
entities
within
the
group
that
are
denominated in currencies other than their respective
functional currencies.
Income Tax Expense
Income
tax
expense
of
$56.0
million
for
the
six
months
ended
June
30,
2023
decreased
by
$128.0
million,
compared to
$184.0 million
tax expense
for the
six months
ended June
30, 2022,
primarily driven
by lower
net
income before tax in the 2023 period.
The income
tax expense
for the
six
months
ended
June
30, 2023
is based
on
an annual
effective
tax rate
of
21.9%.
Supplemental Segment Financial Data
Three months ended March 31,June 30, 2023 compared to three months
 
ended March 31,June 30, 2022
Australia
Three months ended March 31,June 30,
2023
2022
Change
%
(in US$ thousands)
Sales volume (MMt)
2.22.5
2.82.3
(0.6)0.2
(21.6)%6.1%
Total
 
revenues ($)
398,661431,806
605,298578,388
(206,637)(146,582)
(34.1)(25.3)%
Coal revenues ($)
390,804423,121
596,298568,346
(205,494)(145,225)
(34.5)(25.6)%
Average realized price per Mt sold ($/Mt)
178.9171.5
214.1244.4
(35.2)(72.9)
(16.4)(29.8)%
Met sales volume (MMt)
1.7
1.5
1.80.2
(0.3)
(15.0)%11.8%
Met coal revenues ($)
372,519403,861
554,009543,345
(181,490)(139,484)
(32.8)(25.7)%
Average realized Met price per Mt sold ($/Mt)
241.9237.7
305.8357.4
(63.9)(119.7)
(20.9)(33.5)%
Mining costs ($)
236,056225,757
202,018205,272
34,03820,485
16.8%10.0%
Mining cost per Mt sold ($/Mt)
108.592.6
76.194.1
32.4(1.5)
42.6%(1.6)%
Operating costs ($)
385,226376,380
365,707381,907
19,519(5,527)
5.3%(1.4)%
Operating costs per Mt sold ($/Mt)
176.4152.6
131.3164.2
45.1(11.6)
34.3%(7.1)%
Segment Adjusted EBITDA ($)
13,23354,700
238,968196,315
(225,735)(141,615)
(94.5)(72.1)%
Coal revenues for our
Australian Operations,
 
for the three months
ended March 31,June 30, 2023,
were $390.8$423.1 million,
a
decrease of
 
$205.5145.2 million
 
,
or 34.5%25.6%,
 
compared to
 
$596.3568.3 million
 
for the
 
three months
 
ended MarchJune
 
31,30, 2022.
This decrease
 
was driven
 
by lower
 
average realized
 
Met coal price
 
per Mt
 
sold of
 
$241.9237.7 for
 
the three
 
months
ended March
 
31, 2023, $63.9June
 
lower than the30,
2023,
compared
to
 
$305.8 357.4
per
 
Mt
sold
 
for
the
same
 
period in
2022 as Met
coal price
index
readjusts
from record
highs
achieved
 
in
 
the2022
 
as
Met
coal
price
index
continues to
rebalance from
record highs
achieved in
the first
 
half of
 
2022 and
global supply
chain disruptions
stabilized readjusting coal
markets. The lower realized
pricing was partially offset
by higher sales volume
of 0.2
MMt due to improved production performance as a result of favorable weather conditions compared to the same
period in 2022.
 
Operating costs
were $376.4
million, a
decrease of
$5.5 million
or 1.4%,
for the
three months
ended June
30,
2023, compared to
$381.9 million
for the three
months ended June
30, 2022. The
 
decrease
was
 
exacerbatedlargely driven
by
 
by lower
sales
 
volumeStanwell
 
ofrebate,
 
0.6lower
 
MMtthird-party
coal
purchases
 
due
 
to
 
higher
 
than
planned
wet
weatherproduction,
 
and
 
equipmentfavorable
 
breakdown
and
co-shipperaverage
delays.
Operating costs increased
by $19.5 million,
or 5.3%, for
foreign exchange on translation of the three months
ended March
31, 2023, compared
to
the three months ended
March 31, 2022. The
increaseAustralian Operations. This decrease was largely driven
partially offset by higher mining costs,
higher Stanwell
rebatecosts and higher royalties as
a result of the new royalty
 
royalty regime introduced by the Queensland
government from
July
 
1,
 
2022.
 
Mining
 
costs
 
were
 
$34.020.5
 
million,
 
or 16.8%
10.0%,
 
higher
 
for
 
the
 
three
 
months
 
ended
 
MarchJune
 
31,30,
 
2023,
compared to the same period in 2022, primarily due to additional fleet mobilized in February 2022 and continued
inflationary pressures on costs including contractor costs and fuel costs. This combined with lower sales volu
 
me
resulted to
 
a higherthe
same
period
in
2022,
largely
driven
by
greater
pre-strip
activity
and
continued
inflationary
pressures
on contractor
and supply
costs.
 
Mining and
 
Operating cost
 
per Mt
 
sold of
$32.4 and
$45.1, respectively,
compared tofor
 
the
same period in 2022. three
 
months ended
Segment Adjusted
EBITDA of
$13.2 million
for the
three months
ended March
31,June 30, 2023
decreased by
 
$225.7
million compared1.5 and $11.6 to Adjusted$92.6 and $152.6 per Mt
 
EBITDA of $239.0 millionsold, respectively, which benefitted from
higher sales volume in the 2023 period.
 
for the three months
ended March 31, 2022,
which was
driven by lower coal revenues and higher operating costs.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
2731
Segment
Adjusted
EBITDA
of $54.7
million for
the three
months
ended June
30,
2023, decreased
by $141.6
million
compared
to
$196.3
million
for
the
three
months
ended
June
30,
2022,
largely
driven
by
lower
coal
revenues.
United States
Three months ended March 31,June 30,
2023
2022
Change
%
(in US$ thousands)
Sales volume (MMt)
1.5
1.6
(0.1)
(5.8)(6.9)%
Total
 
revenues ($)
367,053295,720
341,827454,316
25,226(158,596)
7.4%(34.9)%
Coal revenues ($)
347,541294,324
340,330452,651
7,211(158,327)
2.1%(35.0)%
Average realized price per Mt sold ($/Mt)
235.1196.4
217.0283.4
18.1(87.0)
8.3%(30.7)%
Met sales volume (MMt)
1.21.3
1.51.6
(0.3)
(22.2)(17.3)%
Met coal revenues ($)
283,023257,292
337,720450,858
(54,697)(193,566)
(16.2)(42.9)%
Average realized Met price per Mt sold ($/Mt)
236.9196.0
220.0286.2
16.9(90.2)
7.7%(31.5)%
Mining costs ($)
128,120133,878
115,263148,922
12,857(15,044)
11.2%(10.1)%
Mining cost per Mt sold ($/Mt)
90.893.9
76.796.9
14.1(3.0)
18.4%(3.1)%
Operating costs ($)
183,766181,023
163,142202,462
20,624(21,439)
12.6%(10.6)%
Operating costs per Mt sold ($/Mt)
124.3120.8
104.0126.7
20.3(5.9)
19.5%(4.7)%
Segment Adjusted EBITDA ($)
185,042116,487
179,899252,394
5,143(135,907)
2.9%(53.8)%
Coal revenues increaseddecreased by $158.3 million,
 
$7.2 million, or 2.1%35%, to
$347.5 million for the three
months ended March 31, 2023
compared to
$340.3 $294.3 million
 
for the
three months
ended March
31, 2022.
This increase
was largely
driven by
a
higher average realized Met
price per Mt sold for
the three months ended
 
March 31,June 30, 2023, of $236.9,
compared
 
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 $12.8 million, primarily
due to the continued impact of inflation on supplies
and labor costs.
Segment
Adjusted
EBITDA
of
$185.0452.7
 
million
 
for
 
the
 
three
 
months
 
ended
 
MarchJune
 
31,30,
 
2023,2022.
 
increasedThis
decrease
was
a
result
of
lower
average realized
Met price per
Mt sold
for the
three months
ended June
30, 2023, of
$196.0 per
Mt sold
compared
to $286.2 per Mt sold for the same period in 2022,
due to lower volatility in the coal market resulting in lower
but
stable
coal
price
indices.
Coal
revenues
were
also
impacted
 
by
 
$5.1
millionlower
 
comparedsales
volume
of
0.1
MMt
due
 
to
 
$179.9sales
deferred into the next quarter.
Operating costs
 
decreased
by $21.4
million, or
10.6%,
to $181.0
million for
the three
months ended
June 30,
2023, compared
to operating
costs of
$202.5 million
 
for
the
 
three
months
 
ended June
 
March30, 2022.
 
31,The decrease
was largely driven by lower mining
 
2022,costs, from building inventory as saleable production exceeded
 
sales volume,
and lower
freight expense
from lower
sales on
FOB terms.
This decrease
was partially
offset by
the continued
impact of inflation on supplies and labor costs.
Segment Adjusted
EBITDA of
$116.5
million for
the three
months ended
June 30,
2023, decreased
by $135.9
million compared to $252.4 million for the three
months ended June 30, 2022, primarily
 
driven
by
a
higher lower average
average realized Met price per Mt sold,
partially offset
by higherlower 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 March 31,June 30,
2023
2022
Change
%
(in US$ thousands)
Selling, general, and administrative expenses
$
7,7749,981
$
7,87610,376
$
(102)(395)
(1.3)(3.8)%
Other, net
(248)(320)
4(27)
(252)(293)
n/m
Total
 
Corporate and Other Adjusted EBITDA
$
7,5269,661
$
7,88010,349
$
(354)(688)
(4.5)(6.6)%
n/m – Not meaningful for comparison.
Corporate
and
other
costs
 
of $7.8 million for$9.6
 
the three months endedmillion
 
March 31, 2023 remainedfor the
 
largely consistentthree
months
ended June
30,
2023, were
$0.7
million
lower
compared to $7.9$10.3 million for the three months ended
 
March 31, 2022.June 30, 2022, due to timing of certain corporate costs.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
2832
Mining and operating costs for
the three
months ended March 31,June
30, 2023 compared to three
 
months ended
March 31,June 30, 2022
A
reconciliation of
segment costs and
expenses, segment operating
 
costs, and expenses,segment
 
segment operatingmining costs is
 
and segment mining
costs is shown
below:
Three months ended March 31,June 30, 2023
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and
 
expenses
$
403,868392,603
$
204,263203,426
$
8,05810,235
$
616,189606,264
Less: Selling, general and administrative
expense
—
—
(7,774)(9,981)
(7,774)(9,981)
Less: Depreciation, depletion and amortization
(18,642)(16,223)
(20,497)(22,403)
(284)(254)
(39,423)(38,880)
Total
operating costs
385,226376,380
183,766181,023
—
568,992557,403
Less: Other royalties
(72,993)(77,725)
(12,964)(12,224)
—
(85,957)(89,949)
Less: Stanwell rebate
(39,208)(29,049)
—
—
(39,208)(29,049)
Less: Freight expenses
(33,819)(37,216)
(29,534)(20,227)
—
(63,353)(57,443)
Less: Other non-mining costs
(3,150)(6,633)
(13,148)(14,694)
—
(16,298)(21,327)
Total mining costs
236,056225,757
128,120133,878
—
364,176359,635
Sales Volume excluding non-produced
 
coal
(MMt)
2.22.4
1.4
—
3.63.9
Mining cost per Mt sold ($/Mt)
108.592.6
90.893.9
—
101.693.1
Three months ended March 31,June 30, 2022
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and
 
expenses
$
384,380410,520
$
182,183224,942
$
8,17110,667
$
574,734646,129
Less: Selling, general and administrative
expense
—
—
(7,876)(10,376)
(7,876)(10,376)
Less: Depreciation, depletion and amortization
(18,673)(28,613)
(19,041)(22,480)
(295)(291)
(38,009)(51,384)
Total operating costs
365,707381,907
163,142202,462
—
528,849584,369
Less: Other royalties
(69,692)(66,628)
(13,340)(12,720)
—
(83,032)(79,348)
Less: Stanwell rebate
(29,053)(40,532)
—
—
(29,053)(40,532)
Less: Freight expenses
(39,767)(38,734)
(19,497)(28,292)
—
(59,264)(67,026)
Less: Other non-mining costs
(25,177)(30,741)
(15,042)(12,528)
—
(40,219)(43,269)
Total mining costs
202,018205,272
115,263148,922
—
317,281354,194
Sales Volume excluding non-produced
 
coal
(MMt)
2.72.2
1.5
—
4.23.7
Mining cost per Mt sold ($/Mt)
76.194.1
76.796.9
—
76.395.3
Average
 
realized
Met
 
price
per
 
Mt
sold
 
for
the
 
three
months
 
ended
 
MarchJune
 
31, 30,
2023
 
compared
 
to
three
months ended March 31,June 30, 2022
A reconciliation of the Company’s average realized
 
Met price per Mt sold is shown below:
Three months ended March 31,June 30,
2023
2022
Change
%
(in US$ thousands)
Met sales volume (MMt)
2.73.0
3.33.1
(0.6)(0.1)
(18.3)(3.1)%
Met coal revenues ($)
655,542661,153
891,729994,203
(236,187)(333,050)
(26.5)(33.5)%
Average realized Met price per Mt sold ($/Mt)
219.5
321.2
(101.7)
(31.7)%
Coronado Global Resources Inc.
Form 10-Q June 30, 2023
33
Six months ended June 30, 2023 compared to Six
months ended June 30, 2022
Australia
Six months ended June 30,
2023
2022
Change
%
(in US$ thousands)
Sales volume (MMt)
4.7
5.1
(0.4)
(9.0)%
Total
revenues ($)
830,467
1,183,686
(353,219)
(29.8)%
Coal revenues ($)
813,925
1,164,644
(350,719)
(30.1)%
Average realized price per Mt sold ($/Mt)
175.0
227.9
(52.9)
(23.2)%
Met sales volume (MMt)
3.2
3.3
(0.1)
(2.8)%
Met coal revenues ($)
776,380
1,097,353
(320,973)
(29.2)%
Average realized Met price per Mt sold ($/Mt)
239.7
266.5329.4
(26.8)(89.7)
(10.1)(27.2)%
Mining costs ($)
461,814
407,291
54,523
13.4%
Mining cost per Mt sold ($/Mt)
100.1
84.1
16.0
19.1%
Operating costs ($)
761,607
747,616
13,991
1.9%
Operating costs per Mt sold ($/Mt)
163.7
146.3
17.4
11.9%
Segment Adjusted EBITDA ($)
67,933
435,284
(367,351)
(84.4)%
Coal
revenues
for
our
Australian
Operations
for
the
six
months
ended
June
30,
2023
were
$813.9
million,
a
decrease of $350.7 million, or
30.1%, compared to $1,164.6 million
for the six months ended
June 30, 2022. This
decrease was driven by lower average realized
Met price per Mt sold of
$239.7, $89.7 lower compared to $329.4
per Mt
sold for
the six
months ended
June 30,
2022,
due to
decline in
coal indices
as supply
chain within
the
steel markets readjusted following
the Russia-Ukraine war as well
as overall weak demand from
steelmakers in
Asia and
Europe. Coal
revenues were
further impacted
by significant
wet weather
events and
their associated
recovery time
on production
performance resulting
in lower
sales volumes
of 4.7
MMt, 0.4
MMt lower
than the
six months ended June 30, 2022.
Operating costs increased
by $14.0 million,
or 1.9%, for
the six months
ended June 30,
2023, compared
to the
six months
ended June
30, 2022,
primarily driven
by higher
mining costs
and royalties
expense.
Mining costs
were $54.5
million higher
for the
six months
ended June
30, 2023,
due to
the continued
impact of
inflation on
contractor
and
supply
costs,
significant
overburden
removal
improving
coal
availability
for
the
second
half
of
2023.
Royalty
costs
were
higher
as
a
result
of
the
impact
of
the
amended
royalty
regime
introduced
by
the
Queensland
Government
applicable
from
July
1,
2022.
This
increase
was
partially
offset
by
lower
third-party
purchase coal
transactions,
favorable average
foreign exchange
on translation
of our
Australian Operations
to
U$ and lower Stanwell rebate and freight expenses. Increase costs combined with lower sales volumes resulted
in higher Mining and Operating costs per Mt sold of $16.0 and $17.4, respectively, compared to the same period
in 2022.
For the six months ended
June 30, 2023, Adjusted EBITDA of
$67.9 million, were $367.4 million lower compared
to $435.3 million for the six months
ended June 30, 2022.
This decrease was a result of lower
coal revenues
and
higher operating costs.
United States
Six months ended June 30,
2023
2022
Change
%
(in US$ thousands)
Sales volume (MMt)
3.0
3.2
(0.2)
(6.3)%
Total
revenues ($)
662,773
796,143
(133,370)
(16.8)%
Coal revenues ($)
641,865
792,981
(151,116)
(19.1)%
Average realized price per Mt sold ($/Mt)
215.6
250.5
(34.9)
(13.9)%
Met sales volume (MMt)
2.5
3.1
(0.6)
(19.7)%
Met coal revenues ($)
540,314
788,579
(248,265)
(31.5)%
Average realized Met price per Mt sold ($/Mt)
215.5
253.5
(38.0)
(15.0)%
Mining costs ($)
261,997
264,183
(2,186)
(0.8)%
Mining cost per Mt sold ($/Mt)
92.4
86.9
5.5
6.3%
Operating costs ($)
364,788
365,602
(814)
(0.2)%
Operating costs per Mt sold ($/Mt)
122.6
115.5
7.1
6.1%
Segment Adjusted EBITDA ($)
301,529
432,294
(130,765)
(30.2)%
Coronado Global Resources Inc.
Form 10-Q June 30, 2023
34
Coal revenues decreased by $151.1 million, or 19.1%, to $641.9 million for
the six months ended June 30, 2023,
as compared to $793.0
million for the six
months ended June 30,
2022. This decrease was
mainly due to lower
average realized
Met price
per Mt sold
for the six
months ended
June 30,
2023 of
$215.5 compared
to $253.5
per Mt sold for the same period in 2022, product mix and lower sales volume,
driven by adverse weather events
and unplanned maintenance which impacted production
in the 2023 period.
Operating costs of $364.8 million remained consistent compared to
$365.6 million for the six months ended
June
30,
2022.
Mining
costs
of
$262.0
million
for
the
six
months
ended
June
30,
2023
were
$2.2
million
lower
compared
to
the
2022
period,
driven
by
inventory
build
as
a
result
of
production
outweighing
sales
volume,
partially offset by continued
inflationary impact on labor
and supply costs. Mining
and Operating costs per
Mt sold
decreased by $5.5 and $7.1, respectively,
due to lower sales volume in the six months ended June
30, 2023.
Adjusted EBITDA
of $301.5
million decreased
by $130.8
million, or
30.2%, for
the six
months ended
June 30,
2023 compared to $432.3 million for the six months ended June 30, 2022. This
decrease was primarily driven by
lower coal revenues.
Corporate and Other Adjusted EBITDA
The following table presents a summary of the components
of Corporate and Other Adjusted EBITDA:
Six months ended June 30,
2023
2022
Change
%
(in US$ thousands)
Selling, general, and administrative expenses
$
17,755
$
18,252
$
(497)
(2.7)%
Other, net
(569)
(21)
(548)
n/m
Total
Corporate and Other Adjusted EBITDA
$
17,186
$
18,231
$
(1,045)
(5.7)%
n/m – Not meaningful for comparison.
Corporate
and
other
costs
of
$17.2
million
for
the
six
months
ended
June
30,
2023,
were
$1.0
million
lower
compared to $18.2 million for the six months ended June
30, 2022, due to timing of certain corporate costs.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
2935
Mining and operating costs for
the Six months ended June 30,
2023 compared to Six months ended
June
30, 2022
A reconciliation of
segment costs and
expenses, segment
operating costs, and
segment mining costs
is shown
below:
Six months ended June 30, 2023
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and
expenses
$
796,470
$
407,690
$
18,293
$
1,222,453
Less: Selling, general and administrative
expense
—
—
(17,755)
(17,755)
Less: Depreciation, depletion and amortization
(34,863)
(42,902)
(538)
(78,303)
Total operating costs
761,607
364,788
—
1,126,395
Less: Other royalties
(150,718)
(25,188)
—
(175,906)
Less: Stanwell rebate
(68,257)
—
—
(68,257)
Less: Freight expenses
(71,035)
(49,761)
—
(120,796)
Less: Other non-mining costs
(9,783)
(27,842)
—
(37,625)
Total mining costs
461,814
261,997
—
723,811
Sales Volume excluding non-produced
coal
(MMt)
4.6
2.8
—
7.4
Mining cost per Mt sold ($/Mt)
100.1
92.4
—
97.2
Six months ended June 30, 2022
(in US$ thousands)
Australia
United
States
Other /
Corporate
Total
Consolidated
Total costs and
expenses
$
794,901
$
407,125
$
18,837
$
1,220,863
Less: Selling, general and administrative
expense
—
—
(18,252)
(18,252)
Less: Depreciation, depletion and amortization
(47,285)
(41,523)
(585)
(89,393)
Total operating costs
747,616
365,602
—
1,113,218
Less: Other royalties
(136,320)
(26,060)
—
(162,380)
Less: Stanwell rebate
(69,585)
—
—
(69,585)
Less: Freight expenses
(78,501)
(47,789)
—
(126,290)
Less: Other non-mining costs
(55,919)
(27,570)
—
(83,489)
Total mining costs
407,291
264,183
—
671,474
Sales Volume excluding non-produced
coal
(MMt)
4.8
3.0
—
7.9
Mining cost per Mt sold ($/Mt)
84.1
86.9
—
85.2
Average realized Met price per Mt sold for
the Six months ended June 30,
2023 compared to Six months
ended June 30, 2022
A reconciliation of the Company’s average realized
Met price per Mt sold is shown below:
Six months ended June 30,
2023
2022
Change
%
(in US$ thousands)
Met sales volume (MMt)
5.7
6.4
(0.7)
(10.9)%
Met coal revenues ($)
1,316,694
1,885,932
(569,238)
(30.2)%
Average realized Met price per Mt sold ($/Mt)
229.1
292.8
(63.7)
(21.8)%
Coronado Global Resources Inc.
Form 10-Q June 30, 2023
36
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA
Three months ended March 31,June 30,
Six months ended June 30,
(in US$ thousands)
2023
2022
2023
2022
Reconciliation to Adjusted EBITDA:
Net income
$
107,86091,311
$
269,898291,995
$
199,171
$
561,893
Add: Depreciation, depletion and amortization
39,42338,880
38,00951,384
78,303
89,393
Add: Interest expense (net of interest income)
14,66514,180
17,33217,482
28,845
34,814
Add: Other foreign exchange (gains) lossesgains
(2,992)(6,414)
1,991(25,138)
(9,405)
(23,147)
Add: Income tax expense
34,03021,975
81,943102,025
56,005
183,968
Add: Losses on idled assets held for sale
1,7511,325
1,386456
3,076
1,842
Add: (Decrease) increaseIncrease (decrease) in provision for
discounting
and credit losses
(3,988)269
428156
(3,719)
584
Adjusted EBITDA
$
190,749161,526
$
410,987438,360
$
352,276
$
849,347
Liquidity and Capital Resources
Overview
Our objective is
 
to maintain a
 
prudent capital structure
 
and to ensure
 
that sufficient
 
liquid assets and
 
funding is
available to meet both anticipated and
 
unanticipated financial obligations, including unforeseen events that could
have an
 
adverse impact
 
on revenues
 
or costs.
 
Our principal
 
sources of
 
funds are
 
cash and
 
cash equivalents,
cash flow from operations and availability under our debt facilities.
 
Our main uses of cash have historically been, and are expected to continue to be, the funding of our operations,
working capital,
 
capital
 
expenditure,
 
debt
 
service
 
obligations,
 
business
 
or assets
 
acquisitions
 
and
 
payment
 
of
dividends. Based on our
 
outlook for the next
 
twelve months, which is subject
 
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
 
war on
 
the global
 
supply chain,
 
we believe
 
expected cash generated
 
from operations
together with
 
available borrowing
 
facilities and
 
other strategic
 
and financial
 
initiatives, will
 
be sufficient
 
to meet
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
 
1A. “Risk Factors”
 
of our Annual Report
 
Report on Form 10-K
 
10-K for the year
ended December 31,
2022, filed
with the SEC
and ASX on
 
February 21, 2023
, and Part
II, Item
1A. “Risk Factors”
of our Quarterly Report
on Form 10-Q for the
quarterly period ended March 31,
2023, filed with the
SEC and ASX
on May 8, 2023.
Liquidity as of March 31,June 30, 2023 and December 31, 2022
 
was as follows:
(in US$ thousands)
March 31,
June 30, 2023
December 31,
2022
Cash, excluding restricted cash
$
498,048434,078
$
334,378
Availability under ABL Facility
(1)
100,000
100,000
Total
$
598,048534,078
$
434,378
(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
 
$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 March 31,June 30, 2023
 
37
Our total indebtedness as of June 30, 2023 and December
31, 2022 consisted of the following:
(in US$ thousands)
June 30, 2023
December 31,
2022
Current installments of interest bearing liabilities
$
242,326
$
242,326
Current installments of other financial liabilities and finance
lease obligations
4,013
4,585
Other financial liabilities and finance lease obligations, excluding current
installments
7,031
8,336
Total
$
253,370
$
255,247
Liquidity
As of March 31,June
30, 2023, available
liquidity was $598.0
$534.1 million, comprising comprised
of cash
and cash
equivalents (excluding
restricted cash) of $498.0$434.1 million and $100.0 million of
 
available borrowings under our ABL Facility.
As
of
 
December
31,
 
2022,
available
liquidity
 
was $434.4
$434.4
million,
 
comprising comprised
of
cash
and
 
cash equivalents
 
equivalents
(excluding
restricted cash) of $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
 
be used to service
the working capital
needs of the Company. Cash
 
balances surplus to immediate working capital requirements are invested
 
in short-
term interest-bearing deposit accounts or used to repay
 
interest bearing liabilities.
Senior Secured Notes
As of March 31,June 30, 2023,
the outstanding principal amount
of our Notes was $242.3 million.
 
million. Interest on the
Notes is
payable semi-annually in arrears on May 15 and November 15 of each
 
year. The Notes mature on May 15, 2026
and are senior secured obligations of the Company.
The Notes are guaranteed
 
on a senior secured
 
basis by the Company
 
and its wholly-owned
 
subsidiaries (other
than
 
the
 
Issuer)
 
(subject
 
to
 
certain
 
exceptions
 
and
 
permitted
 
liens)
 
and
 
secured
 
by
 
(i)
 
a
 
first-priority
 
lien
 
on
substantially all of the Company’s assets and the assets of the other guarantors (other than accounts
 
receivable
and other rights to payment,
 
inventory,
 
intercompany indebtedness, certain
 
general intangibles and commercial
tort claims, commodities accounts, deposit accounts, securities accounts and other related assets and proceeds
and
 
products
 
of
 
each
 
of
 
the
 
foregoing,
 
or,
 
collectively,
 
the
 
ABL
 
Collateral),
 
or
 
the
 
Notes
 
Collateral,
 
and
 
(ii)
 
a
second-priority lien on the ABL Collateral, which is
 
junior to a first-priority lien, for the
 
benefit of the lenders under
the ABL Facility.
The terms
 
of the
 
Notes are
 
governed
 
by the
 
Indenture.
 
The Indenture
 
contains
 
customary covenants
 
for high
yield bonds, including,
 
but not limited
 
to, limitations on
 
investments, liens, indebtedness,
 
asset sales, transactions
with affiliates and restricted payments, including payment
 
of dividends on capital stock.
The Company may
 
redeem some or
 
all of the
 
Notes at the
 
redemption prices and
 
on the terms
 
specified in the
Indenture. In addition, the Company may,
 
from time to time, seek to retire or purchase outstanding
 
debt through
open-market purchases,
 
privately negotiated
 
transactions or
 
otherwise. Such
 
repurchases, if
 
any,
 
will be
 
upon
such terms and at such prices as the Company may determine, and will depend on prevailing market conditions,
liquidity requirements, contractual restrictions and other
 
factors.
As of March 31,June 30, 2023, we were in compliance with all applicable covenants
 
applicable
covenants under the Indenture.
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
 
$5.0and $5.0 million for swingline
loans, at
at any
 
time
outstanding,
 
subject
to
 
borrowing
 
base
availability.
 
The
ABL
 
Facility
 
will
mature
 
on
May
 
12, 2024.
 
2024.
Borrowings under the ABL
 
Facility bear interest at
 
a rate equal to
 
a BBSY rate plus
 
an applicable margin. As
 
atAs of
March 31,June 30, 2023, no amounts were drawn and no letters
 
of credit were outstanding under the ABL Facility.
As of March 31,June 30, 2023, we were in compliance with all applicable covenants
 
covenants under the ABL Facility.
Refinancing
Coronado Global Resources Inc.
Form 10-Q June 30, 2023
38
Refinance update
On April 28,May 8, 2023, we entered
 
entered into a Syndicated Facilitythe New
 
Agreement, or SFA,ABL Facility which will
 
which will provide for up
to $150.0
million
in
borrowings,
including a
$100.0
 
million in borrowings,
including a $100.0
 
million sublimit for
 
for the
issuance
of
 
letters
of credit
 
and $70.0 million
 
$70.0
million
sublimit for 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 SFA replacedNew
ABL Facility matures in 2026.
On August 3, 2023, all
the conditions precedent under
the New ABL Facility agreement
were satisfied, at which
time the New ABL Facility became effective and
 
the ABL Facility.
AvailabilityFacility was terminated in accordance with
 
underits terms.
 
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.
 
Coronado Global Resources Inc.
Form 10-Q March 31, 2023
31
As required by certain agreements,
 
we had cash collateral in the form
 
of deposits in the amount of $86.5$89.5
 
million
and $89.1 million
as of MarchJune
 
31,30, 2023, and
December 31, 2022,
respectively,
to provide back-to-back support for
bank guarantees,
 
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
 
expiration or
termination date
of such
letter of
 
such letter of credit. As
 
As of MarchJune
31,30, 2023, no letter of credit was outstanding and no cash
 
cash collateral was required.
For the U.S. Operations
 
in order to provide
 
the required financial
 
assurance, we generally
 
use surety bonds
 
for
post-mining reclamation.
We can also
use bank letters
 
of credit to collateralize certain obligations. As
 
collateralize certainof June 30,
2023,
 
obligations. As ofwe
 
Marchhad
31, 2023, we had outstanding
 
surety
bonds
of $37.6
$40.8
million
 
and
letters
of
credit
of
 
$16.8
million
issued
from
our
available bank guarantees, to
 
meet contractual obligations under
 
workers compensation insurance and to
 
secure
other obligations and commitments.
For
the
 
Australian
Operations,
we
 
had
bank
 
guarantees
outstanding
of
 
$25.5
24.2 million
as
 
at June
 
March30, 2023,
 
31,
2023,primarily
primarily in respect of certain rail and port arrangements
of the Company.
As at March 31,June
30, 2023,
we had total
 
total outstanding bank
guarantees provided
 
of $42.3 $41.0
million to
secure obligations
and commitments. Future
 
regulatory changes relating
 
to these obligations
 
could result in
 
increased obligations,
additional costs or additional collateral requirements.
Dividend
On February 21,
 
2023, our Board
 
of Directors declared
 
a bi-annual fully
 
franked fixed ordinary
 
dividend of $8.4
million, or 0.5
 
cents per CDI.
 
On April
 
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
 
who elected to be paid in Australian dollars.
On April August 7, 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.
The dividend will have a record date of August
29, 2023, Australia time, and be payable on September 19, 2023,
Australia
time.
CDIs
will
be
quoted
“ex”
dividend
on
September
28,
 
2023, we announced
 
that the CompanyAustralia
 
would not declaretime.
 
any dividends toThe
 
stockholders for thetotal
 
fiscalordinary
quarter ended March
31, 2023.
Subject to the assessments and outcomes of
potential in-organic growth options
in the future,
and on-going operational
performance and market
conditions, our Board
of Directors may
declare
dividends in future
quarters. Coronado’s
dividend policy
remains unchanged to
distribute between 60%
- 100%
of Free Cashflow.will be funded from available cash.
Capital Requirements
Our main uses of cash have historically been the funding
 
of our operations, working capital, capital expenditure,
the payment of
 
interest and dividends.
 
We intend
 
to use cash
 
to fund debt
 
service payments
 
on our Notes,
 
the
New ABL Facility and our
 
other indebtedness, to fund operating
 
operating activities, working capital,
capital expenditures, partial
partial redemption of the Notes, business or assets acquisitions and,
 
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 March 31,June 30, 2023
 
3239
InvestingHistorical Cash Flows
The following table summarizes our cash flows for the six months ended June 30, 2023 and
2022, as reported in
the accompanying consolidated financial statements:
Cash Flow
Six months ended June 30,
(in US$ thousands)
2023
2022
Net cash provided by operating activities
$
223,874
$
518,292
Net cash used in investing activities
(105,074)
(93,520)
Net cash used in financing activities
(9,933)
(355,591)
Net change in cash and cash equivalents
108,867
69,181
Effect of exchange rate changes on cash and restricted
cash
(9,166)
(21,228)
Cash and restricted cash at beginning of period
334,629
437,931
Cash and restricted cash at end of period
$
434,330
$
485,884
Operating activities
Net cash provided by operating activities was $54.1 $223.9 million
for the six months ended June 30, 2023, compared
to $518.3
million for
the six
months ended
June 30,
2022. The
decrease in
cash from
operating activities
was
driven by the lower revenue and higher operating costs.
Investing activities
Net cash
used in
investing activities
was $105.1
million
for the three
six months
ended March 31,June
30, 2023,
compared to
$41.293.5 million
 
for the
 
threesix months
 
ended MarchJune
 
31,30, 2022.
 
Cash spent
 
on capital
 
expenditures for
 
for the three
six
 
months
ended March 31,June 30,
 
2023 was $54.8
million, of which
 
$14.6104.8 million, relatedof
 
to the Australianwhich $27.4 million
 
Operations and $40.2
million related
to the
 
Australian Operations
and $77.4
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 $9.9
 
was $1.0 million
for the three
six months ended MarchJune 30, 2023, compared to cash
used
 
31, 2023, compared
to
cash used in
financing activities
of $4.8 million
for the three
months ended March
31, 2022. The
net cash used
in
 
financing
 
activities
 
of
$355.6
million
for
 
the
 
threesix
 
months
 
ended
 
MarchJune
 
31,30,
 
20222022.
 
andThe
 
Marchnet
 
31,cash
 
2023,used
 
in
financing activities
for the six
months ended June
30, 2023 largely
 
related to dividends
 
topayment of $8.4
million
and repayment of borrowings and other financial liabilities.liabilities
of $1.5 million.
Included in net cash used in
financing activities for the six
months ended June 30, 2022,
were dividends paid of
$348.4 million and repayment of borrowings and other
financial liabilities of $7.1 million.
Contractual Obligations
There were no
 
material changes
 
to our contractual
 
obligations from
 
the information
 
previously provided
 
in Item
7.
 
“Management’s
 
Discussion
 
and
 
Analysis
 
of
 
Financial
 
Conditions
 
and
 
Results
 
of
 
Operations”
 
of
 
our
 
Annual
Report on Form 10-K for the year ended December 31, 2022, filed with the SEC and
 
ASX on February 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.
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, 2022,
filed with the SEC and ASX on February 21, 2023.
Coronado Global Resources Inc.
Form 10-Q June 30, 2023
40
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
 
MarchJune
 
31,30,
 
2023,
 
there
 
were
 
no
accounting standards not yet implemented.
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
3341
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
 
risks which are not coal price related.
We manage
 
financial risk
 
through policies
 
and procedures
 
approved by
 
our Board
 
of Directors.
 
These specify
the responsibility
 
of the
 
Board
 
of Directors
 
and
 
management
 
with regard
 
to the
 
management
 
of financial
 
risk.
Financial risks are
 
managed centrally by
 
our finance
 
team under the
 
direction of the
 
Group Chief
 
Financial Officer.
The finance team manages risk exposures primarily through delegated authority limits approved by the Board of
Directors. The finance team regularly monitors our exposure
 
to these financial risks and reports to
management
and
 
the
 
Board
 
of
 
Directors
 
on
 
a
 
regular
 
basis.
 
Policies
 
are
 
reviewed
 
at
 
least
 
annually
 
and
 
amended
 
where
appropriate.
We may use
 
derivative financial instruments such
 
as forward fixed
 
price commodity contracts, interest
 
rate swaps
and
 
foreign
 
exchange
 
rate
 
contracts
 
to
 
hedge
 
certain
 
risk
 
exposures.
 
Derivatives
 
for
 
speculative
 
purposes
 
is
strictly prohibited by the Treasury Risk Management Policy approved by our Board of
 
Directors. We use different
methods
 
to
 
measure
 
the
 
extent
 
to
 
which
 
we
 
are
 
exposed
 
to
 
various
 
financial
 
risks.
 
These
 
methods
 
include
sensitivity analysis
 
in the
 
case of
 
interest rates,
 
foreign exchange
 
and other
 
price risks
 
and aging
 
analysis
for
credit risk.
Commodity Price Risk
Coal Price Risk
We
 
are
 
exposed
 
to
 
domestic
 
and
 
global
 
coal
 
prices.
 
Our
 
principal
 
philosophy
 
is
 
that
 
our
 
investors
 
would
 
not
consider
 
hedging
 
of
 
coal
 
prices
 
to
 
be
 
in
 
the
 
long-term
 
interest
 
of
 
our
 
stockholders.
 
Therefore,
 
any
 
potential
hedging of coal prices through long-term fixed price contracts is subject to the approval of our Board of Directors
and would only be adopted in exceptional circumstances.
The
 
expectation
 
of
 
future
 
prices
 
for
 
coal
 
depends
 
upon
 
many
 
factors
 
beyond
 
our
 
control.
 
Met
 
coal
 
has
 
been
volatile commodity
 
over the
 
past ten
 
years. 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,
 
may in the future
 
have a negative
 
impact on our
 
profitability.
 
We may
or may not be able to access alternate markets of our coal should additional interruptions
 
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
 
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
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
 
sales are
those for which price finalization,
 
which price
finalization, referenced
to the relevant index,
 
index, is outstanding
at the reporting
date. The final
sales price is determined
 
determined within 7 to 90
days after delivery
 
to the customer.
 
As of
March 31, 2023, June 30,
 
2023, we had $57.8$13
 
.7
million
of
 
outstanding
provisionally
 
priced receivables
 
subject to
 
to changes
in
 
the
relevant
 
price
 
index.
 
If
 
prices
decreased
 
10%,
 
these
 
provisionally
 
priced
 
receivables
 
would
 
decrease
 
by
 
$5.81.4
million.
See
Item
1A.
“Risk
million. See Item 1A. “Risk Factors—Our profitability
depends upon
the prices
we receive
for our coal.
 
coal. Prices
for
coal
 
are
volatile
 
and can
can
fluctuate
widely
 
based
upon
 
a
number
 
of
factors
 
beyond
our
 
control”
in
 
our Annual
 
Annual
Report on
Form 10-K
filed
with the SEC and ASX on
February 21, 2023.
 
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
3442
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
 
2023
 
will
 
be
 
purchased
 
under
 
fixed-price
contracts or on a spot basis.
 
Interest Rate Risk
Interest rate risk is the risk that a change in interest rates
 
on our borrowing facilities will have an adverse impact
on
 
our
 
financial
 
performance,
 
investment
 
decisions
 
and
 
stockholder
 
return.
 
Our
 
objectives
 
in
 
managing
 
our
exposure
 
to
 
interest
 
rates
 
include
 
minimizing
 
interest
 
costs
 
in
 
the
 
long
 
term,
 
providing
 
a
 
reliable
 
estimate
 
of
interest costs for the
 
annual work program
 
and budget and
 
ensuring that changes
 
in interest rates will
 
not have
a material impact on our financial performance.
As of March 31, June 30,
2023, we had $254.4 $253.4
million of fixed rate
borrowings and Notes and no
 
no variable-rate borrowings
outstanding.
We currently do not hedge against interest rate
 
fluctuations.
 
Foreign Exchange Risk
A significant portion of our
 
sales are denominated in US$.
 
Foreign exchange risk is
 
the risk that our earnings
 
or
cash flows are adversely impacted by movements in exchange
 
rates of currencies that are not in US$.
Our main exposure
 
is to the
 
A$-US$ exchange rate
 
through our Australian
 
Operations, which have
 
predominantly
A$ denominated costs. Greater than 60% of expenses incurred at our Australian Operations are denominated in
A$. Approximately 40% of our
 
of our Australian Operations’ purchases are made with
 
made with reference to US$,
which provides
a natural hedge against foreign
 
exchange movements on these
 
purchases (including fuel, several
 
port handling
charges, demurrage,
 
purchased coal
 
and some
 
insurance premiums).
 
premiums). Appreciation of
 
of the A$
 
A$ against US$
 
US$ will
increase our Australian
 
Operations’ US$ reported
 
cost base and
 
reduce US$ reported
 
net income. For
 
the portion
of US$ required to purchase A$ to settle our Australian Operations’ operating costs, a 10% increase in the A$ to
US$ exchange rate
would increase reported
 
total costs and
expenses by approximately
 
$25.726.0 million and $51.7
million for
the three
and six months ended March 31,June 30, 2023, respectively.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
 
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
 
letters of credit
or bank guarantees
 
in place with
 
financial institutions. To mitigate against credit risk
 
from financial counterparties,
we have minimum credit rating requirements with financial
 
institutions where we transact.
We
 
are
 
also
 
exposed
 
to
 
counterparty
 
credit
 
risk
 
arising
 
from
 
our
 
operating
 
activities,
 
primarily
 
from
 
trade
receivables. Customers who wish to trade on
 
credit terms are subject to credit
 
verification procedures, including
an assessment of their independent credit rating, financial position, past experience and industry reputation. We
monitor the financial performance
 
of counterparties on a routine
 
basis to ensure credit
 
thresholds are achieved.
Where required, we will request additional credit
 
support, such as letters of credit,
 
to mitigate against credit risk.
Credit
 
risk
 
is
 
monitored
 
regularly,
 
and
 
performance
 
reports
 
are
 
provided
 
to
 
our
 
management
 
and
 
Board
 
of
Directors.
As of
 
March 31,June 30,
 
2023, we
 
had financial
 
assets of
 
$896.7823.4 million,
 
comprising of
 
of cash and
 
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
Losses,, and a provision
 
for discounting and credit
losses of $1.1$1.4 million was recorded as of March 31,June 30, 2023
 
.
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
3543
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
 
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 March 31,June 30, 2023
 
3644
PART II – OTHER
 
INFORMATION
ITEM 1.
 
LEGAL PROCEEDINGS
We are subject to various legal
 
and regulatory proceedings. For a description of
 
our significant legal proceedings
refer
 
to
 
Note 14.15. “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,
thereThere 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,
2022, filed with
the SEC
and ASX on
February
21, 2023 and
Part II, Item
1A, “Risk Factors”, of
 
our AnnualQuarterly Report on
 
Form 10-K10-Q for the
year ended December 31,
2022, filed with the
SEC
and ASX on February 21, 2023:
Concerns
about
the
environmental
impacts
of
coal
combustion,
including
possible
impacts
on
global
climate
issues,
are
resulting
in
increased
regulation
of
coal
combustion
and
coal
mining
in
many
jurisdictions,
which
could
significantly
affect
demand
for
our
products
or
our
securities
and
reduce
access to capital and insurance.
Global considerations
regarding 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
mining
itself
are
subject
to
existing,
pending
and
proposed
regulation
as
part
of
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
the
Safeguard
Mechanism
applies,
or
purchasing
and
surrendering
Australian
Carbon Credit Units, or ACCUs, or face enforcement
measures.
The
potential
direct
and
indirect
financial
impact
on
us
from
existing
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
result in
reduced reliance
on coal
as a
fuel
source. Such developments could result in adverse impacts
on our financial condition or results of operations.
For further information see Part I, Item
1A, “Risk Factors”, of our Annual Report on Form
10-K for the yearquarterly period ended
DecemberMarch 31, 2022,2023, filed with the SEC and ASX on February
21,May 8, 2023.
ITEM 2.
 
UNREGISTERED SALES OF EQUITY SECURITIES
 
AND USE OF PROCEEDS
None.
Coronado Global Resources Inc.
Form 10-Q March 31, 2023
37
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
 
priority for all employees at Coronado
Global Resources Inc.
 
Our U.S. Operations
 
include multiple mining
 
complexes across
 
three states and
 
are regulated by
 
both the U.S.
Mine Safety
 
and Health
 
Administration, or
 
MSHA, and
 
state regulatory
 
agencies. Under
 
regulations mandated
by the Federal Mine Safety and Health Act of 1977, or the Mine Act, MSHA inspects our U.S. mines on a regular
basis and issues various citations and orders when it believes
 
a violation has occurred under the Mine Act.
In accordance
 
with
 
Section 1503(a) of
 
the
 
Dodd-Frank
 
Wall
 
Street
 
Reform
 
and
 
Consumer
 
Protection
 
Act
 
and
Item
 
104
 
of
 
Regulation
 
S-K
 
(17
 
CFR
 
229.104),
 
each
 
operator
 
of
 
a
 
coal
 
or
 
other
 
mine
in
 
the
 
United
 
States
 
is
required to report certain mine safety results in its periodic reports
 
filed with the SEC under the Exchange Act.
Information
 
pertaining
 
to
 
mine
 
safety
 
matters
 
is
 
included
 
in
 
Exhibit 95.1
 
attached
 
to
 
this
 
Quarterly
 
Report
 
on
Form 10-Q. The disclosures reflect the United
 
States mining operations only, as these requirements do not
 
apply
to our mines operated outside the United States.
ITEM 5.
 
OTHER INFORMATION
None.During the
 
quarter ended
June 30,
2023, no
director or
officer (as
defined in
Rule 16a-1(f)
promulgated under
the Exchange
Act)
of the
Company
adopted
or
terminated
a “Rule
10b5-1
trading arrangement”
or “
non-Rule
10b51
- trading
arrangement
” (as each term is defined in Item 408 of Regulation S-K).
Coronado Global Resources Inc.
Form 10-Q June 30, 2023
45
ITEM 6.
 
EXHIBITS
The following documents are filed as exhibits hereto:
Exhibit No.
Description of Document
3.1
3.2
10.1
10.2
10.3
10.4
10.5
10.6
10.7
15.1
31.1
31.2
32.1
95.1
101.INS
Inline XBRL Instance Document
101.SCH
Inline XBRL Taxonomy
 
Extension Schema Document
101.CAL
Inline XBRL Taxonomy
 
Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy
 
Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy
 
Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy
 
Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted as Inline
 
XBRL and contained in Exhibit 101)
 
Coronado Global Resources Inc.
Form 10-Q June 30, 2023
46
___________________________
* Certain schedules
and exhibits to
this agreement have
been omitted pursuant
to Item 601(a)(5)
of Regulation
S-K. A copy of any omitted
schedule and/or exhibit will be furnished to
the Securities and Exchange Commission
upon request.
 
 
Coronado Global Resources Inc.
 
Form 10-Q March 31,June 30, 2023
 
3847
SIGNATURES
Pursuant to the requirements
 
of the Securities Exchange
 
Act of 1934, the registrant
 
has duly caused this
 
report
to be signed on its behalf by the undersigned, thereunto
 
duly authorized.
Coronado Global Resources Inc.
By:
/s/ Gerhard Ziems
Gerhard Ziems
Group Chief Financial Officer (as duly authorized officer
and as principal financial officer of the registrant)
Date: May 8,August 7, 2023