UNITED STATES
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Washington, D.C. 20549
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Steel starts
here.
Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024.
TABLE OF CONTENTS
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Coronado Global Resources Inc.
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
(In US$ thousands, except share data)
Assets
Note
(Unaudited)
2024
December 31,
2023
Current assets:
Cash and cash equivalents
$
$
Trade receivables, net
Income tax receivable
Inventories
4
Other current assets
5
Total current assets
Non-current assets:
Property, plant and equipment, net
6
Right of use asset – operating leases, net
8
Goodwill
Intangible assets, net
Restricted deposits
16
Deferred income tax assets
Other non-current assets
Total assets
$
$
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$
$
Accrued expenses and other current liabilities
7
Asset retirement obligations
Contract obligations
Lease liabilities
8
Interest bearing liabilities
9
Other current financial liabilities
10
Total current liabilities
Non-current liabilities:
Asset retirement obligations
Contract obligations
Deferred consideration liability
Interest bearing liabilities
9
Other financial liabilities
10
Lease liabilities
8
Deferred income tax liabilities
Other non-current liabilities
Total liabilities
$
$
Common stock $
and December 31, 2023
Series A Preferred stock $
authorized,
and December 31, 2023
Additional paid-in capital
Accumulated other comprehensive losses
14
(87,677 )
(89,927 )
Retained earnings
Total stockholders’ equity
$
$
Total liabilities and stockholders’ equity
$
$
See accompanying notes to unaudited condensed consolidated financial statements.
Coronado Global Resources Inc.
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income
(In US$ thousands, except share data)
Three months ended
Nine months ended
Note
2024
2023
2024
2023
Revenues:
Coal revenues
$
$
$
$
Other revenues
Total revenues
3
Costs and expenses:
Cost of coal revenues (exclusive of items
shown separately below)
Depreciation, depletion and amortization
Freight expenses
Stanwell rebate
Other royalties
Selling, general, and administrative
expenses
Total costs and expenses
Other (expense) income:
Interest expense, net
(15,808 )
(14,496 )
(42,253 )
(43,341 )
Loss on debt extinguishment
(1,385 )
(1,385 )
(Increase) decrease in provision for
discounting and credit losses
(43 )
Other, net
(19,749 )
(8,643 )
Total other expense, net
(35,600 )
(7,156 )
(50,739 )
(22,767 )
(Loss) income before tax
(102,768 )
(39,313 )
(83,280 )
Income tax benefit (expense)
11
(37,775 )
Net (loss) income attributable to
Coronado Global Resources Inc.
$
(70,997 )
$
(21,083 )
$
(54,798 )
$
Other comprehensive loss, net of income
taxes:
Foreign currency translation adjustments
14
(18,247 )
(30,547 )
Total comprehensive income (loss)
(18,247 )
(30,547 )
Total comprehensive (loss) income
attributable to Coronado Global
Resources Inc.
$
(51,681 )
$
(39,330 )
$
(52,548 )
$
(Loss) earnings per share of common stock
Basic
12
(0.42 )
(0.13 )
(0.33 )
Diluted
12
(0.42 )
(0.13 )
(0.33 )
See accompanying notes to unaudited condensed consolidated financial statements.
Coronado Global Resources Inc.
Unaudited Condensed Consolidated Statements of Stockholders’ Equity
(In US$ thousands, except share data)
Common stock
Preferred stock
Additional
Accumulated other
Total
paid in
comprehensive
Retained
stockholders
Shares
Amount
Series A
Amount
capital
losses
earnings
equity
Balance December 31, 2023
$
$
$
$
(89,927 )
$
$
Net loss
—
—
(29,001 )
(29,001 )
Other comprehensive loss
—
—
(23,288 )
(23,288 )
Total comprehensive loss
—
—
(23,288 )
(29,001 )
(52,289 )
Share-based compensation for equity
classified awards
—
—
(1,159 )
(1,159 )
Dividends
—
—
(8,382 )
(8,382 )
Balance March 31, 2024
$
$
$
$
(113,215 )
$
$
Net income
—
—
Other comprehensive income
—
—
Total comprehensive income
—
—
Share-based compensation for equity
classified awards
—
—
Balance June 30, 2024
$
$
$
$
(106,993 )
$
$
Net loss
—
—
(70,997 )
(70,997 )
Other comprehensive income
—
—
Total comprehensive income (loss)
—
—
(70,997 )
(51,681 )
Share-based compensation for equity
classified awards
—
—
Dividends
—
—
(8,382 )
(8,382 )
Balance September 30, 2024
$
$
$
$
(87,677 )
$
$
Coronado Global Resources Inc.
Common stock
Preferred stock
Additional
Accumulated other
Total
paid in
comprehensive
Retained
stockholders
Shares
Amount
Series A
Amount
capital
losses
earnings
equity
Balance December 31, 2022
$
$
$
$
(91,423 )
$
$
Net income
—
—
Other comprehensive loss
—
—
(4,503 )
(4,503 )
Total comprehensive (loss) income
—
—
(4,503 )
Share-based compensation for equity
classified awards
—
—
(308 )
(308 )
Dividends
—
—
(8,382 )
(8,382 )
Balance March 31, 2023
$
$
$
$
(95,926 )
$
$
Net income
—
—
Other comprehensive loss
—
—
(7,797 )
(7,797 )
Total comprehensive (loss) income
—
—
(7,797 )
Share-based compensation for equity
classified awards
—
—
Balance June 30, 2023
$
$
$
$
(103,723 )
$
$
Net loss
—
—
(21,083 )
(21,083 )
Other comprehensive loss
—
—
(18,247 )
(18,247 )
Total comprehensive loss
—
—
(18,247 )
(21,083 )
(39,330 )
Share-based compensation for equity
classified awards
—
—
Dividends
—
—
(8,382 )
(8,382 )
Balance September 30, 2023
$
$
$
$
(121,970 )
$
$
See accompanying notes to unaudited condensed consolidated financial statements.
Coronado Global Resources Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(In US$ thousands)
Nine months ended
September 30,
2024
2023
Cash flows from operating activities:
Net (loss) income
$
(54,798 )
$
Adjustments to reconcile net income to cash and restricted cash provided by
operating activities:
Depreciation, depletion and amortization
Impairment of non-core assets
Amortization of right of use asset - operating leases
Amortization of deferred financing costs
Loss on debt extinguishment
Non-cash interest expense
Amortization of contract obligations
(22,163 )
(23,896 )
Loss on disposal of property, plant and equipment
Gain on derecognition of operating lease
(820 )
Equity-based compensation expense
(75 )
Deferred income taxes
(27,335 )
Reclamation of asset retirement obligations
(6,313 )
(3,168 )
Decrease in provision for discounting and credit losses
(157 )
(4,255 )
Other non-cash adjustments
Changes in operating assets and liabilities:
Accounts receivable
(13,621 )
Inventories
(54,704 )
Other assets
(5,947 )
(5,197 )
Accounts payable
(13,138 )
Accrued expenses and other current liabilities
(85,576 )
(69,303 )
Operating lease liabilities
(15,812 )
(9,311 )
Income tax payable
(128,418 )
Change in other liabilities
Net cash provided by operating activities
Cash flows from investing activities:
Capital expenditures
(201,147 )
(182,442 )
Purchase of restricted and other deposits
(2,102 )
(26,836 )
Redemption of restricted and other deposits
Net cash used in investing activities
(200,887 )
(183,028 )
Cash flows from financing activities:
Proceeds from interest bearing liabilities and other financial liabilities
Debt issuance costs and other financing costs
(2,261 )
(3,420 )
Principal payments on interest bearing liabilities and other financial liabilities
(2,969 )
(2,732 )
Principal payments on finance lease obligations
(68 )
(98 )
Dividends paid
(16,679 )
(16,755 )
Net cash provided by (used in) financing activities
(23,005 )
Net (decrease) increase in cash and cash equivalents
(161,532 )
Effect of exchange rate changes on cash and cash equivalents
(1,414 )
(15,180 )
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
$
$
Supplemental disclosure of cash flow information:
Cash payments for interest
$
$
Cash (refund) paid for taxes
$
(21,285 )
$
Restricted cash
$
$
See accompanying notes to unaudited condensed consolidated financial statements.
Coronado Global Resources Inc.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Business, Basis of Presentation
(a)
Description of the Business
Coronado Global Resources Inc. is a global producer, marketer, and exporter of a full range of metallurgical
coals, an essential element in the production of steel. The Company has a portfolio of operating mines and
development projects in Queensland, Australia, and in the states of Pennsylvania, Virginia and West Virginia in
the United States, or U.S.
(b)
Basis of Presentation
The interim unaudited condensed consolidated financial statements have been prepared in accordance with the
requirements of U.S. generally accepted accounting principles, or U.S. GAAP, and with the instructions to Form
10-Q and Article 10 of Regulation S-X related to interim financial reporting issued by the U.S. Securities and
Exchange Commission, or the SEC. Accordingly, they do not include all of the information and footnotes required
by U.S. GAAP for complete financial statements and should be read in conjunction with the audited consolidated
financial statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the
SEC and the Australian Securities Exchange, or the ASX, on February 20, 2024.
The interim unaudited condensed consolidated financial statements are presented in U.S. dollars, unless
otherwise stated. They include the accounts of Coronado Global Resources Inc. and its wholly-owned
subsidiaries. References to “US$” or “USD” are references to U.S. dollars. References to “A$” or “AUD” are
references to Australian dollars, the lawful currency of the Commonwealth of Australia. The “Company” and
“Coronado” are used interchangeably to refer to Coronado Global Resources Inc. and its subsidiaries,
collectively, or to Coronado Global Resources Inc., as appropriate to the context. All intercompany balances and
transactions have been eliminated upon consolidation.
In the opinion of management, these interim financial statements reflect all normal, recurring adjustments
necessary for the fair presentation of the Company’s financial position, results of operations, comprehensive
income, cash flows and changes in equity for the periods presented. Balance sheet information presented herein
as of December 31, 2023 has been derived from the Company’s audited consolidated balance sheet at that date.
The Company’s results of operations for the three and nine months ended September 30, 2024 are not
necessarily indicative of the results that may be expected for the year ending December 31, 2024.
2. Summary of Significant Accounting Policies
Please see Note 2 “Summary of Significant Accounting Policies” contained in the audited consolidated financial
statements for the year ended December 31, 2023 included in Coronado Global Resources Inc.’s Annual Report
on Form 10-K filed with the SEC and ASX on February 20, 2024.
(a) Newly Adopted Accounting Standards
During the period, there has been no new Accounting Standards Update, or ASU, issued by the Financial
Accounting Standards Board, or the FASB, that had a material impact on the Company’s consolidated financial
statements.
(b) Accounting Standards Not Yet Implemented
ASU No. 2023-07 “Segment Reporting” (Topic 280)
: In November 2023, the FASB issued ASU 2023-07, which
is intended to improve reportable segment disclosure requirements through enhanced disclosures of significant
segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim
periods within fiscal years beginning after December 31, 2024. Early adoption is permitted. The updated standard
is to be applied retrospectively to all prior periods presented in the financial statements. The Company expects
the updated standard to impact only the financial statement disclosures with no impact on the Company’s results
of operations, cash flows and financial position.
ASU No. 2023-09 “Income Taxes” (Topic 740)
: In December 2023, the FASB issued ASU 2023-09, which
modifies the rules on income tax disclosures to require companies to disclose specific categories in the rate
reconciliation, the income or loss from continuing operations before income tax expense or benefit (separated
between domestic and foreign) and income tax expense or benefit from continuing operations (separated by
federal, state, and foreign). The updated standard is effective for annual periods beginning after December 15,
2024. The Company is currently evaluating the impact that the updated standard will have in its financial
statement disclosures.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
There have been no other recent accounting pronouncements not yet effective that have significance, or potential
significance, to the Company’s consolidated financial statements.
3. Segment Information
The Company has a portfolio of operating mines and development projects in Queensland, Australia, and in the
states of Pennsylvania, Virginia and West Virginia in the U.S. The operations in Australia, or Australian
Operations, comprise the 100%-owned Curragh producing mine complex. The operations in the U.S., or U.S.
Operations, comprise
idled mine complex (Greenbrier) and
The Company operates its business along
the
and allocates resources to the various components of the Company’s business.
The CODM uses Adjusted EBITDA as the primary metric to measure each segment’s operating performance.
Adjusted EBITDA is not a measure of financial performance in accordance with U.S. GAAP. Investors should be
aware that the Company’s presentation of Adjusted EBITDA may not be comparable to similarly titled financial
measures used by other companies.
Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, depletion and amortization and other
foreign exchange losses. Adjusted EBITDA is also adjusted for certain discrete items that management exclude
in analyzing each of the Company’s segments’ operating performance. “Other and corporate” relates to additional
financial information for the corporate function such as accounting, treasury, legal, human resources, compliance,
and tax. As such, the corporate function is not determined to be a reportable segment but is discretely disclosed
for purposes of reconciliation to the Company’s unaudited Condensed Consolidated Financial Statements.
Reportable segment results as of and for the three and nine months ended September 30, 2024 and 2023 are
presented below:
(in US$ thousands)
Australia
United
States
Other and
Corporate
Total
Three months ended September 30, 2024
Total revenues
$
$
$
$
Adjusted EBITDA
(51,978 )
(8,773 )
(19,123 )
Total assets
Capital expenditures
Three months ended September 30, 2023
Total revenues
$
$
$
$
Adjusted EBITDA
(32,353 )
(11,899 )
Total assets
Capital expenditures
Nine months ended September 30, 2024
Total revenues
$
$
$
$
Adjusted EBITDA
(25,417 )
Total assets
Capital expenditures
Nine months ended September 30, 2023
Total revenues
$
$
$
$
Adjusted EBITDA
(29,088 )
Total assets
Capital expenditures
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
The reconciliations of Adjusted EBITDA to net (loss) income attributable to the Company for the three and nine
months ended September 30, 2024 and 2023 are as follows:
Three months ended
Nine months ended
September 30,
September 30,
(in US$ thousands)
2024
2023
2024
2023
Net (loss) income
$
(70,997 )
$
(21,083 )
$
(54,798 )
$
Depreciation, depletion and amortization
Interest expense (net of interest income)
(1)
Income tax (benefit) expense
(31,771 )
(18,230 )
(28,482 )
Other foreign exchange gains
(2)
(7,859 )
(17,265 )
Loss on extinguishment of debt
Impairment of non-core assets
(3)
Losses on idled assets
(4)
Increase (decrease) in provision for
discounting and credit losses
(536 )
(157 )
(4,255 )
Consolidated Adjusted EBITDA
$
(19,123 )
$
$
$
(1)
million and $
(2)
The balance primarily relates to foreign exchange gains and losses recognized in the translation of short-term inter-entity balances in
certain entities within the group that are denominated in currencies other than their respective functional currencies. These gains and losses
are included in “Other, net” on the unaudited Consolidated Statement of Operations and Comprehensive Income.
(3)
property, plant and equipment relating to a long-standing non-core idled asset within the U.S. Operations. This impairment charge was
recognized based on a conditional purchase offer received and accepted by the Company and is included in “Other, net” on the unaudited
Consolidated Statement of Operations and Comprehensive Income. Satisfaction of conditions precedent and completion of a sale remains
uncertain and as such this idled asset remains classified as held and used as of September 30, 2024.
(4)
The reconciliations of capital expenditures per the Company’s segment information to capital expenditures
disclosed on the unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended
September 30, 2024 and 2023 are as follows:
Nine months ended September 30,
(in US$ thousands)
2024
2023
Capital expenditures per unaudited Condensed Consolidated Statements of
Cash Flows
$
$
Accruals for capital expenditures
Payment for capital acquired in prior periods
(10,790 )
(11,241 )
Net movement in deposits to acquire long lead capital
(4,695 )
(21,577 )
Capital expenditures per segment detail
$
$
Disaggregation of Revenue
The Company disaggregates the revenue from contracts with customers by major product group for each of the
Company’s reportable segments, as the Company believes it best depicts the nature, amount, timing and
uncertainty of revenues and cash flows. All revenue is recognized at a point in time.
Three months ended September 30, 2024
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
$
$
Thermal coal
Total coal revenue
Other
(1)
Total
$
$
$
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
Three months ended September 30, 2023
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
$
$
Thermal coal
Total coal revenue
Other
(1)
Total
$
$
$
Nine months ended September 30, 2024
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
$
$
Thermal coal
Total coal revenue
Other
(1)(2)
Total
$
$
$
Nine months ended September 30, 2023
(in US$ thousands)
Australia
United States
Total
Product Groups:
Metallurgical coal
$
$
$
Thermal coal
Total coal revenue
Other
(1)(2)
Total
$
$
$
(1) Other revenue for the Australian segment includes the amortization of the Stanwell non-market coal supply contract obligation liability.
(2) Other revenue for the U.S. segment includes $
respectively, relating to termination fee revenue from coal sales contracts cancelled at our U.S. operations.
4. Inventories
(in US$ thousands)
September 30,
2024
December 31,
2023
Raw coal
$
$
Saleable coal
Total coal inventories
Supplies and other inventory
Total inventories
$
$
Coal inventories measured at its net realizable value were $
and December 31, 2023, respectively, and primarily relates to coal designated for deliveries under the Stanwell
non-market coal supply agreement.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
5. Other Assets
(in US$ thousands)
September 30,
2024
December 31,
2023
Other current assets
Prepayments
$
$
Long service leave receivable
Tax credits receivable
Deposits to acquire capital items
Short-term deposits
Other
Total other current assets
$
$
Short-term deposits are term deposits held with financial institutions with maturity greater than ninety days and
less than twelve months and do not meet the cash and cash equivalents criteria.
6. Property, Plant and Equipment
(in US$ thousands)
September 30,
2024
December 31,
2023
Land
$
$
Buildings and improvements
Plant, machinery, mining equipment and transportation vehicles
Mineral rights and reserves
Office and computer equipment
Mine development
Asset retirement obligation asset
Construction in process
Total cost of property, plant and equipment
Less accumulated depreciation, depletion and amortization
Property, plant and equipment, net
$
$
7. Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consist of the following:
(in US$ thousands)
September 30,
2024
December 31,
2023
Wages and employee benefits
$
$
Taxes other than income taxes
Accrued royalties
Accrued freight costs
Accrued mining fees
Acquisition related accruals
Other liabilities
Total accrued expenses and other current liabilities
$
$
Acquisition related accruals of $
estimated stamp duty payable on the Curragh acquisition. On March 6, 2024, the Company paid the outstanding
assessed stamp duty and tax interest to the Queensland Revenue Office, or QRO. Refer to Note 16.
“Contingencies” for further information.
8. Leases
During the nine months ended September 30, 2024, the Company entered into a number of agreements to lease
mining equipment. Based on the Company’s assessment of terms within these agreements, the Company
classified these leases as operating leases. On mobilization of these leased mining equipment, the Company
recognized right-of-use assets and operating lease liabilities of $
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
On April 1, 2024, the Company extinguished
used to provide mining services. On extinguishment, right-of-use assets of $
liabilities of $
On September 1, 2024, the Company modified
term. Upon modification, the Company recognized additional right-of-use assets and operating lease liabilities of
$
Information related to the Company’s right-of-use assets and related lease liabilities are as follows:
Three months ended
Nine months ended
(in US$ thousands)
September 30,
2024
September 30,
2023
September 30,
2024
September 30,
2023
Operating lease costs
$
$
$
$
Cash paid for operating lease
liabilities
Finance lease costs:
Amortization of right-of-use assets
Interest on lease liabilities
Total finance lease costs
$
$
$
$
(in US$ thousands)
September 30,
2024
December 31,
2023
Operating leases:
Operating lease right-of-use assets
$
$
Finance leases:
Property and equipment
Accumulated depreciation
(371 )
(309 )
Property and equipment, net
Current operating lease obligations
Operating lease liabilities, less current portion
Total operating lease liabilities
Current finance lease obligations
Finance lease liabilities, less current portion
Total Finance lease liabilities
Current lease obligation
Non-current lease obligation
Total Lease liability
$
$
September 30,
2024
December 31,
2023
Weighted Average Remaining Lease Term (Years)
Weighted average remaining lease term – finance leases
-
Weighted average remaining lease term – operating leases
Weighted Average Discount Rate
Weighted discount rate – finance lease
Weighted discount rate – operating lease
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
The Company’s operating leases have remaining lease terms of
, some of which include
options to extend the terms where the Company deems it is reasonably certain the options will be exercised.
Maturities of lease liabilities as at September 30, 2024, are as follows:
(in US$ thousands)
Operating
Lease
Year ending December 31,
2024
$
2025
2026
2027
2028
Thereafter
Total lease payments
Less imputed interest
(13,142 )
Total lease liability
$
9. Interest Bearing Liabilities
The following is a summary of interest-bearing liabilities at September 30, 2024:
September 30, 2024
December 31, 2023
Weighted Average
Interest Rate at
September 30, 2024
Final
Maturity
10.750% Senior Secured Notes
$
$
%
(2)
ABL Facility
Loan - Curragh Housing Transaction
%
(2)
Discount and debt issuance costs
(1)
(6,207 )
(6,983 )
Total interest bearing liabilities
Less: current portion
Non-current interest-bearing liabilities
$
$
(1)
Relates to discount and debt issuance costs in connection with the Existing Notes and Curragh Housing Transaction loan (as defined
below). Deferred debt issuance costs incurred in connection with the establishment of the ABL Facility have been included within "Other
non-current assets" in the unaudited Condensed Consolidated Balance Sheet.
(2)
10.750% Senior Secured Notes
As of September 30, 2024, the Company’s aggregate principal amount of the
% Senior Secured Notes
due 2026, or the Existing Notes, outstanding was $
were senior secured obligations of the Company.
As of September 30, 2024, the Company was in compliance with all applicable covenants under the Existing
Notes Indenture.
The carrying value of debt issuance costs, recorded as a direct deduction from the face amount of the Existing
Notes, were $
On October 2, 2024, the Company completed a refinancing initiative (as explained below) and redeemed in full
all of the outstanding Existing Notes. The redemption price for the Existing Notes was $
to
% of the aggregate principal amount thereof, plus accrued and unpaid interest, to, but excluding the
repurchase date. In connection with the extinguishment of the Existing Notes, the Company recognized in the
fourth quarter of 2024 a loss on early extinguishment of debt of $
Refinance update – 9.250% Senior Secured Notes due in 2029
On October 2, 2024, the Company, entered into an indenture, or the Indenture among Coronado Finance Pty
Ltd, an Australian proprietary company and a wholly-owned subsidiary of the Company, which is referred to as
the Issuer or the Australian Borrower, the Company, the other guarantors party thereto, which are referred to,
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
collectively with the Company, as the Guarantors, and Wilmington Trust, National Association, as trustee, or the
Trustee, and as priority lien collateral trustee, relating to the issuance by the Issuer of $
principal amount of
% Senior Secured Notes due 2029, or the New Notes.
The New Notes were issued at par and bear interest at a rate of
% per annum. Interest on the New Notes
is payable semi-annually in arrears on April 1 and October 1 of each year, commencing April 1, 2025. The New
Notes mature on October 1, 2029 and are senior secured obligations of the Issuer.
The New Notes are guaranteed on a senior secured basis by the Company and its wholly-owned subsidiaries
(other than the Issuer) (subject to certain exceptions and permitted liens) and secured by (i) a first-priority lien on
substantially all of assets of the Company and each Guarantor (other than accounts receivable and certain other
rights to payment, inventory, certain investment property, certain general intangibles and commercial tort claims,
deposit accounts, securities accounts and other related assets, chattel paper, letter of credit rights, certain
insurance proceeds, intercompany indebtedness and certain other assets related to the foregoing and proceeds
and products of each of the foregoing, collectively, the “ABL Priority Collateral”, and other rights to payment,
inventory, intercompany indebtedness, certain general intangibles and commercial tort claims, commodities
accounts, securities accounts and other related assets and products of each of the foregoing, or, collectively, the
ABL Collateral), and (ii) a second priority lien on the ABL Priority Collateral, which is junior to a first-priority lien
for the benefit of the lenders and other creditors under the Company’s asset-based revolving credit facility, dated
as of May 8, 2023, or the ABL Facility, in each case, subject to certain exceptions and permitted liens.
The Company used the net proceeds from the New Notes to redeem all of the Company’s Existing Notes and to
pay related fees and expenses in connection with the offering of the New Notes and the redemption of the Existing
Notes, and the Company intends to use the remaining net proceeds for general corporate purposes.
The terms of the New Notes are governed by the Indenture. The Indenture contains customary covenants for
high yield bonds, including, but not limited to, limitations on investments, liens, indebtedness, asset sales,
transactions with affiliates and restricted payments, including payment of dividends on capital stock.
Upon the occurrence of a “Change of Control”, as defined in the Indenture, the Issuer is required to make an offer
to repurchase the New Notes at
% of the aggregate principal amount thereof, plus accrued and unpaid
interest, if any, to, but excluding, the repurchase date. The Issuer also has the right to redeem the New Notes at
% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the
repurchase date, following the occurrence of a Change of Control, provided that the Issuer redeems at least
%
of the New Notes outstanding prior to such Change of Control. Upon the occurrence of certain changes in tax
law (as described in the Indenture), the Issuer may redeem any of the New Notes at a redemption price equal to
% of the principal amount of the New Notes to be redeemed plus accrued and unpaid interest, if any, to, but
excluding, the redemption date.
The Issuer may redeem any of the New Notes beginning on October 1, 2026. The initial redemption price of the
New Notes is
% of their principal amount, plus accrued and unpaid interest, if any, to, but excluding the
redemption date. The redemption price will decline each year after October 1, 2026, and will be
% of the
principal amount of the New Notes, plus accrued and unpaid interest, beginning on October 1, 2028. The Issuer
may also redeem up to
% of the aggregate principal amount the New Notes on one or more occasions prior to
October 1, 2026 at a price equal to
% of the principal amount thereof plus a “make-whole” premium, plus
accrued and unpaid interest, if any, to, but excluding, the redemption date.
At any time and from time to time on or prior to October 1, 2026, the Issuer may redeem in the aggregate up to
% of the original aggregate principal amount of the New Notes (calculated after giving effect to any issuance
of additional New Notes) with the net cash proceeds of certain equity offerings, at a redemption price of
%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, so long as at least
% of the aggregate principal amount of the New Notes (calculated after giving effect to any issuance of
additional New Notes) issued under the Indenture remains outstanding after each such redemption and each
such redemption occurs within
The Indenture contains customary events of default, including failure to make required payments, failure to
comply with certain agreements or covenants, failure to pay or acceleration of certain other indebtedness, certain
events of bankruptcy and insolvency, and failure to pay certain judgments. An event of default under the Indenture
will allow either the Trustee or the holders of at least
% in aggregate principal amount of the then-outstanding
New Notes to accelerate, or in certain cases, will automatically cause the acceleration of, the amounts due under
the New Notes.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
Asset Based Revolving Credit Facility
On May 8, 2023, the Company entered into the ABL Facility.
The ABL Facility matures in August 2026 and provides for up to $
million sublimit for the issuance of letters of credit and $
Availability under the ABL Facility is limited to an eligible borrowing base, determined by applying customary
advance rates to eligible accounts receivable and inventory.
Borrowings under the ABL Facility bear interest at a rate per annum equal to an applicable rate of
% plus
Bank Bill Swap Bid Rate, or BBSY, for loans denominated in A$, or the Secured Overnight Finance Rate, or
SOFR, for loans denominated in US$, at the Company’ s election.
As at September 30, 2024, the letter of credit sublimit had been partially used to issue $
guarantees on behalf of the Company and
Facility.
The ABL Facility contains customary representations and warranties and affirmative and negative covenants
including, among others, a covenant regarding the maintenance of leverage ratio to be less than
covenant regarding maintenance of interest coverage ratio to be more than
payment of dividends, or purchase or redemption of, with respect to any Equity Interests of Holdings or any of its
Subsidiaries, covenants relating to financial reporting, covenants relating to the incurrence of liens or
encumbrances, covenants relating to the incurrence or prepayment of certain debt, compliance with laws, use of
proceeds, maintenance of properties, maintenance of insurance, payment obligations, financial accommodation,
mergers and sales of all or substantially all of the Borrowers and Guarantors’, collectively the Loan Parties, assets
and limitations on changes in the nature of the Loan Parties’ business.
As at September 30, 2024, the Company was in compliance with all applicable covenants under the ABL Facility.
Under the terms of the ABL Facility, a Review Event (as defined in the ABL Facility) is triggered if, among other
matters, a “change of control” (as defined in the ABL Facility) occurs.
Following the occurrence of a Review Event, the Borrowers must promptly meet and consult in good faith with
the Administrative Agent and the Lenders to agree a strategy to address the relevant Review Event including but
not limited to a restructure of the terms of the ABL Facility to the satisfaction of the Lenders. If at the end of a
period of
of their discussion or meeting with the Borrowers or do not wish to continue to provide their commitments, the
Lenders may declare all amounts owing under the ABL Facility immediately due and payable, terminate such
Lenders’ commitments to make loans under the ABL Facility, require the Borrowers to cash collateralize any
letter of credit obligations and/or exercise any and all remedies and other rights under the ABL Facility.
Subject to customary grace periods and notice requirements, the ABL Facility also contains customary events of
default.
Loan – Curragh Housing Transaction
On May 16, 2024, the Company completed an agreement for accommodation services and the sale and
leaseback of housing and accommodation assets with a regional infrastructure and accommodation service
provider, or collectively, the Curragh Housing Transaction. Refer to Note 10. “Other Financial Liabilities” for further
information.
In connection with the Curragh Housing Transaction, the Company borrowed $
the same regional infrastructure and accommodation service provider. This amount was recorded as “Interest
Bearing Liabilities” in the unaudited Condensed Consolidated Balance Sheet. The amount borrowed is payable
in equal monthly installments over a period of
, with an effective interest rate of
%. The Curragh
Housing Transaction loan is not subject to any financial covenants.
The carrying value of the loan, net of issuance costs of $
$
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
10. Other Financial Liabilities
The following is a summary of other financial liabilities as at September 30, 2024:
September 30,
2024
December 31,
2023
Collateralized financial liabilities payable to third-party financing companies
$
$
Collateralized financial liabilities - Curragh Housing Transaction
Debt issuance costs
(1,150 )
(170 )
Total other financial liabilities
Less: current portion
Non-current other financial liabilities
$
$
Collateralized financial liabilities – Curragh Housing Transaction
The Curragh Housing Transaction did not satisfy the sale criteria under Accounting Standards Codification, or
ASC, 606 – Revenues from Contracts with Customers and was deemed a financing arrangement. As a result,
proceeds of $
owned by the Company in connection with the Curragh Housing Transaction were recognized as “Other Financial
Liabilities” on the Company’s unaudited Condensed Consolidated Balance Sheet. The term of the financing
arrangement is
%. This liability will be settled in equal monthly
payments as part of the accommodation services arrangement.
In line with the Company’s capital management strategy, the Curragh Housing Transaction provides additional
liquidity. In addition, the accommodation services component of the Curragh Housing Transaction is anticipated
to enhance the level of service for our employees at our Curragh Mine.
In connection with the Curragh Housing Transaction, the Company granted the counterparty mortgages over
certain leasehold and freehold land. The counterparty’s rights are subject to a priority deed in favor of the
Company’s senior secured parties including, but not limited to, holders of the New Notes, lenders under the ABL
Facility and Stanwell.
The carrying value of this financial liability, net of issuance costs of $
30, 2024, $
11. Income Taxes
The Company has historically calculated the provision for income taxes during interim reporting periods by
applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax
income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. The Company
has used an actual discrete geographical effective tax rate method to calculate taxes for the fiscal year three-
and nine-month periods ended September 30, 2024. The Company determined that since small changes in
estimated “ordinary” income would result in significant changes in the estimated annual effective tax rate, the
historical method would not provide a reliable estimate for the fiscal three- and nine-month periods ended
September 30, 2024. The Company had an income tax benefit of $
$
For the nine months ended September 30, 2023, the Company estimated its annual effective tax rate and applied
this effective tax rate to its year-to-date pretax income at the end of the interim reporting period. The tax effects
of unusual or infrequently occurring items, including effects of changes in tax laws or rates and changes in
judgment about the realizability of deferred tax assets, are reported in the interim period in which they occur.
Income tax expense of $
an estimated annual effective tax rate of
% for the period.
The Company utilizes the “more likely than not” standard in recognizing a tax benefit in its financial statements.
For the nine months ended September 30, 2024, the Company had
in tax expense. If accrual for interest or penalties is required, it is the Company’s policy to include these as a
component of income tax expense. The Company continues to carry an unrecognized tax benefit of $
consistent with December 31, 2023.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
The Company is subject to taxation in the U.S. and its various states, as well as Australia and its various localities.
In the U.S. and Australia, the first tax return was lodged for the year ended December 31, 2018. In the U.S.,
companies are subject to open tax audits for a period of seven years at the federal level and five years at the
state level. In Australia, companies are subject to open tax audits for a period of four years from the date of
assessment.
The Company assessed the need for valuation allowances by evaluating future taxable income, available for tax
strategies and the reversal of temporary tax differences.
12. Earnings per Share
Basic earnings per share of common stock is computed by dividing net income attributable to the Company for
the period by the weighted-average number of shares of common stock outstanding during the same period.
Diluted earnings per share of common stock is computed by dividing net income attributable to the Company by
the weighted-average number of shares of common stock outstanding adjusted to give effect to potentially dilutive
securities.
Basic and diluted earnings per share were calculated as follows (in thousands, except per share data):
Three months ended
September 30,
Nine months ended
September 30,
(in US$ thousands, except per share data)
2024
2023
2024
2023
Numerator:
Net (loss) income attributable to Company
stockholders
$
(70,997 )
$
(21,083 )
$
(54,798 )
$
Denominator (in thousands):
Weighted average shares of common stock
outstanding
Effects of dilutive shares
Weighted average diluted shares of common stock
outstanding
(Loss) Earnings Per Share (US$):
Basic
(0.42 )
(0.13 )
(0.33 )
Dilutive
(0.42 )
(0.13 )
(0.33 )
The Company’s common stock is publicly traded on the ASX in the form of CDIs, convertible at the option of the
holders into shares of the Company’s common stock on a
-for-1 basis.
13. Fair Value Measurement
The fair value of a financial instrument is the amount that will be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. The fair values of financial
instruments involve uncertainty and cannot be determined with precision.
The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of
unobservable inputs to the extent possible. The Company determines fair value based on assumptions that
market participants would use in pricing an asset or liability in the market. When considering market participant
assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and
unobservable inputs, which are categorized in one of the following levels:
Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the
reporting entity at the measurement date.
Level 2 Inputs: Other than quoted prices that are observable for the asset or liability, either directly or indirectly,
for substantially the full term of the asset or liability.
Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that
observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity
for the asset or liability at measurement date.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
Financial Instruments Measured on a Recurring Basis
As of September 30, 2024, there were
recurring basis.
Other Financial Instruments
The following methods and assumptions are used to estimate the fair value of other financial instruments as of
September 30, 2024 and December 31, 2023:
●
expenses, lease liabilities and other current financial liabilities: The carrying amounts reported in the
unaudited Condensed Consolidated Balance Sheets approximate fair value due to the short maturity of
these instruments.
●
values approximate the carrying values reported in the unaudited Condensed Consolidated Balance
Sheets.
●
cost. As of September 30, 2024, there were
ABL Facility. The estimated fair value of the Existing Notes as of September 30, 2024 was approximately
$
14. Accumulated Other Comprehensive Losses
The Company’s Accumulated Other Comprehensive Losses consists of foreign currency translation adjustment
of subsidiaries for which the functional currency is different to the Company’s functional currency in U.S. dollar.
Accumulated other comprehensive losses consisted of the following at September 30, 2024:
(in US$ thousands)
Foreign
currency
translation
adjustments
Balance at December 31, 2023
$
(89,927 )
Net current-period other comprehensive loss:
Loss in other comprehensive income before reclassifications
(3,004 )
Gains on long-term intra-entity foreign currency transactions
Total net current-period other comprehensive income
Balance at September 30, 2024
$
(87,677 )
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
15. Commitments
(a) Mineral Leases
The Company leases mineral interests and surface rights from land owners under various terms and royalty
rates. The future minimum royalties and lease rental payments under these leases as of September 30, 2024 are
as follows:
(in US$ thousands)
Amount
Year ending December 31,
2024
$
2025
2026
2027
2028
Thereafter
Total
$
Mineral leases are not in scope of ASC 842 and continue to be accounted for under the guidance in ASC 932,
Extractive Activities – Mining.
(b) Other commitments
As of September 30, 2024, purchase commitments for capital expenditures were $
obligated within the next twelve months.
In Australia, the Company has generally secured the ability to transport coal through rail contracts and coal export
terminal contracts that are primarily funded through take-or-pay arrangements with terms ranging up to
.
In the U.S., the Company typically negotiates its rail and coal terminal access on an annual basis. As of
September 30, 2024, these Australian and U.S. commitments under take-or-pay arrangements totaled
$
16. Contingencies
Surety bond, letters of credit and bank guarantees
In the normal course of business, the Company is a party to certain guarantees and financial instruments with
off-balance sheet risk, such as letters of credit and performance or surety bonds.
arrangements are reflected in the Company’s unaudited Condensed Consolidated Balance Sheets. Management
does not expect any material losses to result from these guarantees or off-balance sheet financial instruments.
For the U.S. Operations, in order to provide the required financial assurance for post mining reclamation, the
Company generally uses surety bonds. The Company also uses surety bonds and bank letters of credit to
collateralize certain other obligations including contractual obligations under workers’ compensation insurances.
As of September 30, 2024, the Company had outstanding surety bonds of $
of credit issued from the letter of credit sublimit available under the ABL Facility.
For the Australian Operations, as at September 30, 2024, the Company had bank guarantees outstanding of
$
primarily in respect of certain rail and port take-or-pay arrangements of the Company.
As at September 30, 2024, the Company in aggregate had total outstanding bank guarantees provided of $
million to secure its obligations and commitments, including $
available under the ABL Facility.
Future regulatory changes relating to these obligations could result in increased obligations, additional costs or
additional collateral requirements.
Restricted deposits – cash collateral
As required by certain agreements, the Company had total cash collateral in the form of deposits of $
and $
support for bank guarantees, other performance obligations, various other operating agreements and contractual
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Coronado Global Resources Inc.
obligations under workers compensation insurance. These deposits are restricted and classified as “Non-current
assets” in the unaudited Condensed Consolidated Balance Sheets.
In accordance with the terms of the ABL Facility, the Company may be required to cash collateralize the ABL
Facility to the extent of outstanding letters of credit after the expiration or termination date of such letter of credit.
As of September 30, 2024,
required.
Stamp duty on Curragh acquisition
On September 27, 2022, the Company received from the Queensland Revenue Office, or QRO, an assessment
of the stamp duty payable on its acquisition of the Curragh mine in March 2018. The QRO assessed the stamp
duty on this acquisition at an amount of $
2022, the Company filed an objection to the assessment. The Company’s objection was based on legal and
valuation advice obtained, which supported an estimated stamp duty payable of $
the Curragh acquisition.
On January 9, 2024, the Company’s objection to the assessed stamp duty was disallowed by the QRO.
As per the Taxation Administration Act (Queensland) 2001, the Company could only appeal or apply for a review
of QRO’s decision if it has paid the total assessed stamp duty of $
interest of $
On March 6, 2024, the Company made an additional payment, and paid in full, the stamp duty assessed by the
QRO.
The Company disputes the additional amount of assessed stamp duty and, on March 11, 2024, filed its appeal
with the Supreme Court of Queensland. The outcome of the appeal remains uncertain.
From time to time, the Company becomes a party to other legal proceedings in the ordinary course of business
in Australia, the U.S. and other countries where the Company does business. Based on current information, the
Company believes that such other pending or threatened proceedings are likely to be resolved without a material
adverse effect on its financial condition, results of operations or cash flows. In management’s opinion, the
Company is not currently involved in any legal proceedings, which individually or in the aggregate could have a
material effect on the financial condition, results of operations and/or liquidity of the Company.
Coronado Global Resources Inc.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors of Coronado Global Resources Inc.
Results of Review of Interim Financial Statements
We have reviewed the accompanying condensed consolidated balance sheet of Coronado Global Resources
Inc. (the Company) as of September 30, 2024, the related condensed consolidated statements of operations and
comprehensive income for the three and nine-month periods ended September 30, 2024 and 2023, the
condensed consolidated statements of stockholders’ equity for the three-month periods ended March 31, June
30 and September 30, 2024 and 2023, the condensed consolidated statements of cash flows for the nine-month
periods ended September 30, 2024 and 2023 and the related notes (collectively referred to as the “condensed
consolidated interim financial statements”). Based on our reviews, we are not aware of any material modifications
that should be made to the condensed consolidated interim financial statements for them to be in conformity with
U.S. generally accepted accounting principles.
We have previously audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2023, the
related consolidated statements of operations and comprehensive income, stockholders' equity and cash flows
for the year then ended, and the related notes (not presented herein), and in our report dated February 20, 2024,
we expressed an unqualified audit opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2023, is
fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
These financial statements are the responsibility of the Company's management. We are a public accounting
firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the SEC and the PCAOB. We
conducted our review in accordance with the standards of the PCAOB. A review of interim financial statements
consists principally of applying analytical procedures and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards
of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as
a whole. Accordingly, we do not express such an opinion.
/s/ Ernst & Young
Brisbane, Australia
November 12, 2024.
Coronado Global Resources Inc.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following Management’s Discussion and Analysis of our Financial Condition and Results of Operations
should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and the related
notes to those statements included elsewhere in this Quarterly Report on Form 10-Q. In addition, this Quarterly
Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements for year ended
December 31, 2023 included in Coronado Global Resources Inc.’s Annual Report on Form 10-K for the year
ended December 31, 2023, filed with the SEC and the ASX on February 20, 2024.
Unless otherwise noted, references in this Quarterly Report on Form 10-Q to “we,” “us,” “our,” “Company,” or
“Coronado” refer to Coronado Global Resources Inc. and its consolidated subsidiaries and associates, unless
the context indicates otherwise.
All production and sales volumes contained in this Quarterly Report on Form 10-Q are expressed in metric tons,
or Mt, millions of metric tons, or MMt, or millions of metric tons per annum, or MMtpa, except where otherwise
stated. One Mt (1,000 kilograms) is equal to 2,204.62 pounds and is equivalent to 1.10231 short tons. In addition,
all dollar amounts contained herein are expressed in United States dollars, or US$, except where otherwise
stated. References to “A$” are references to Australian dollars, the lawful currency of the Commonwealth of
Australia. Some numerical figures included in this Quarterly Report on Form 10-Q have been subject to rounding
adjustments. Accordingly, numerical figures shown as totals in certain tables may not equal the sum of the figures
that precede them.
CAUTIONARY NOTICE REGARDING FORWARD -LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended,
or the Exchange Act, concerning our business, operations, financial performance and condition, the coal, steel
and other industries, as well as our plans, objectives and expectations for our business, operations, financial
performance and condition. Forward-looking statements may be identified by words such as “may,” “could,”
“believes,” “estimates,” “expects,” “intends,” “plans,” “anticipate,” “forecast,” “outlook,” “target,” “likely,”
“considers” and other similar words.
Any forward-looking statements involve known and unknown risks, uncertainties, assumptions and other
important factors that could cause actual results, performance, events or outcomes to differ materially from the
results, performance, events or outcomes expressed or anticipated in these statements, many of which are
beyond our control. Such forward-looking statements are based on an assessment of present economic and
operating conditions on a number of best estimate assumptions regarding future events and actions. These
factors are difficult to accurately predict and may be beyond our control. Factors that could affect our results, our
announced plans, or an investment in our securities include, but are not limited to:
●
●
unrest and wars, as well as risks related to government actions with respect to trade agreements, treaties
or policies;
●