10-Q 1 cde-09301510q.htm 10-Q 10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
___________________________________________ 
FORM 10-Q
___________________________________________
þ
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2015
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 001-08641
____________________________________________ 
COEUR MINING, INC.
(Exact name of registrant as specified in its charter)
____________________________________________
Delaware
 
82-0109423
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
104 S. Michigan Ave., Suite 900 Chicago, Illinois
 
60603
(Address of principal executive offices)
 
(Zip Code)
(312) 489-5800
(Registrant’s telephone number, including area code)
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  þ    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files.)    Yes  þ    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
 
þ
Accelerated filer
 
¨
 
 
 
 
Non-accelerated filer
 
¨
Smaller reporting company
 
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  þ
The Company has 300,000,000 shares of common stock, par value of $0.01, authorized of which 136,957,701 shares were issued and outstanding as of October 30, 2015.


COEUR MINING, INC.
INDEX
 
 
Page
Part I.
 
 
 
 
 
 
 
 
 
 
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
 
 
 
 
Condensed Consolidated Statements of Cash Flows (Unaudited)
 
 
 
 
Condensed Consolidated Balance Sheets
 
 
 
 
Condensed Consolidated Statement of Changes in Stockholders' Equity
 
 
 
 
Notes to Condensed Consolidated Financial Statements (Unaudited)
 
 
 
 
 
 
 
 
Consolidated Financial Results
 
 
 
 
Results of Operations
 
 
 
 
Liquidity and Capital Resources
 
 
 
 
Non-GAAP Financial Performance Measures
 
 
 
 
 
 
 
 
 
 
 
Part II.
 
 
 
 
 
 
 
 
 
Item 1A. Risk Factors
 
 
 
 
 
 
 
 
Item 5. Other Information
 
 
 
 
Item 6. Exhibits
 
 
 
Signatures




2


PART I. Financial Information
Item 1. Financial Statements

COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
 
 
 
Three months ended September 30,
 
Nine months ended September 30,
 
 
2015
 
2014
 
2015
 
2014
 
Notes
In thousands, except share data
Revenue
3
$
162,552

 
$
170,938

 
$
481,770

 
$
495,133

COSTS AND EXPENSES
 
 
 
 
 
 
 
 
Costs applicable to sales(1)
3
120,237

 
125,910

 
354,397

 
351,492

Amortization
 
35,497

 
41,985

 
107,560

 
123,834

General and administrative
 
6,694

 
8,515

 
23,979

 
31,809

Exploration
 
2,112

 
6,587

 
9,957

 
15,957

Pre-development, reclamation, and other
 
4,938

 
4,244

 
13,968

 
20,019

Total costs and expenses
 
169,478

 
187,241

 
509,861

 
543,111

OTHER INCOME (EXPENSE), NET
 
 
 
 
 
 
 
 
Fair value adjustments, net
9
5,786

 
16,105

 
3,657

 
(3,611
)
Interest expense, net of capitalized interest
17
(12,446
)
 
(11,616
)
 
(33,945
)
 
(36,980
)
Other, net
 
(8,893
)
 
(1,303
)
 
(14,257
)
 
(6,927
)
Total other income (expense), net
 
(15,553
)
 
3,186

 
(44,545
)
 
(47,518
)
Income (loss) before income and mining taxes
 
(22,479
)
 
(13,117
)
 
(72,636
)
 
(95,496
)
Income and mining tax (expense) benefit
7
8,260

 
16,583

 
8,451

 
18,650

NET INCOME (LOSS)
 
$
(14,219
)
 
$
3,466

 
$
(64,185
)
 
$
(76,846
)
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
 
 
 
 
 
 
 
 
Unrealized gain (loss) on equity securities, net of tax of $686 and $939 for the three and nine months ended September 30, 2014, respectively
 
(931
)
 
(1,086
)
 
(3,744
)
 
(1,487
)
Reclassification adjustments for impairment of equity securities, net of tax of $(423) and $(1,768) for the three and nine months ended September 30, 2014, respectively
 
483

 
669

 
2,028

 
2,828

Reclassification adjustments for realized loss on sale of equity securities, net of tax of $(140) and $(150) for the three and nine months ended September 30, 2014, respectively
 
—

 
221

 
904

 
238

Other comprehensive income (loss)
 
(448
)
 
(196
)
 
(812
)
 
1,579

COMPREHENSIVE INCOME (LOSS)
 
$
(14,667
)
 
$
3,270

 
$
(64,997
)
 
$
(75,267
)
 
 
 
 
 
 
 
 
 
NET INCOME (LOSS) PER SHARE
8
 
 
 
 
 
 
 
Basic
 
$
(0.11
)
 
$
0.03

 
$
(0.52
)
 
$
(0.75
)
 
 
 
 
 
 
 
 
 
Diluted
 
$
(0.11
)
 
$
0.03

 
$
(0.52
)
 
$
(0.75
)
(1) Excludes amortization.
The accompanying notes are an integral part of these condensed consolidated financial statements.


3

COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
 
Three months ended September 30,
 
Nine months ended September 30,
 
 
2015
 
2014
 
2015
 
2014
 
Notes
In thousands
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
Net income (loss)
 
$
(14,219
)
 
$
3,466

 
$
(64,185
)
 
(76,846
)
Adjustments:
 
 
 
 
 
 
 
 
Amortization
 
35,497

 
41,985

 
107,560

 
123,834

Accretion
 
3,629

 
3,868

 
10,305

 
12,961

Deferred income taxes
 
(1,233
)
 
(23,437
)
 
(8,470
)
 
(39,142
)
Loss on termination of revolving credit facility
 
—

 
—

 
—

 
3,035

Fair value adjustments, net
9
(5,786
)
 
(16,105
)
 
(3,657
)
 
3,611

Stock-based compensation
5
1,639

 
2,505

 
6,393

 
7,455

Impairment of equity securities
12
483

 
1,092

 
2,028

 
4,614

Foreign exchange and other
 
8,541

 
1,683

 
13,845

 
815

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
 
Receivables
 
11,011

 
7,446

 
11,225

 
18,297

Prepaid expenses and other current assets
 
(2,055
)
 
3,871

 
(3,222
)
 
(687
)
Inventory and ore on leach pads
 
5,380

 
9,698

 
10,713

 
(5,821
)
Accounts payable and accrued liabilities
 
(6,650
)
 
(4,806
)
 
(13,407
)
 
311

CASH PROVIDED BY OPERATING ACTIVITIES
 
36,237

 
31,266

 
69,128

 
52,437

CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
 
 
 
 
 
 
Capital expenditures
 
(23,861
)
 
(16,784
)
 
(65,158
)
 
(44,076
)
Acquisitions, net of cash acquired
11
(122
)
 
(13,829
)
 
(111,290
)
 
(16,079
)
Other
 
340

 
74

 
(1,338
)
 
61

Purchase of short-term investments and equity securities
 
(3
)
 
(2,089
)
 
(1,876
)
 
(50,423
)
Sales and maturities of short-term investments
 
60

 
2,856

 
529

 
3,413

CASH USED IN INVESTING ACTIVITIES
 
(23,586
)
 
(29,772
)
 
(179,133
)
 
(107,104
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
Issuance of notes and bank borrowings
17
—

 
—

 
153,500

 
153,000

Payments on debt, capital leases, and associated costs
 
(2,618
)
 
(13,274
)
 
(77,838
)
 
(20,236
)
Gold production royalty payments
 
(10,159
)
 
(11,351
)
 
(30,281
)
 
(38,379
)
Other
 
(34
)
 
(77
)
 
(529
)
 
(483
)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
 
(12,811
)
 
(24,702
)
 
44,852

 
93,902

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
 
(160
)
 
(23,208
)
 
(65,153
)
 
39,235

Cash and cash equivalents at beginning of period
 
205,868

 
269,133

 
270,861

 
206,690

Cash and cash equivalents at end of period
 
$
205,708

 
$
245,925

 
$
205,708

 
$
245,925


The accompanying notes are an integral part of these condensed consolidated financial statements.

4

COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
 
September 30, 2015
(Unaudited)
 
December 31,
2014
ASSETS
Notes
 
In thousands, except share data
CURRENT ASSETS
 
 
 
 
 
Cash and cash equivalents
 
 
$
205,708

 
$
270,861

Receivables
13
 
93,599

 
116,921

Inventory
14
 
98,109

 
114,931

Ore on leach pads
14
 
68,695

 
48,204

Deferred tax assets

 
7,197

 
7,364

Prepaid expenses and other
 
 
18,431

 
15,523

 
 
 
491,739

 
573,804

NON-CURRENT ASSETS
 
 
 
 
 
Property, plant and equipment, net
15
 
261,043

 
227,911

Mining properties, net
16
 
851,590

 
501,192

Ore on leach pads
14
 
39,685

 
37,889

Restricted assets
 
 
8,003

 
7,037

Equity securities
12
 
3,213

 
5,982

Receivables
13
 
27,507

 
21,686

Deferred tax assets

 
64,359

 
60,151

Other
 
 
11,534

 
9,915

TOTAL ASSETS
 
 
$
1,758,673

 
$
1,445,567

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
 
Accounts payable
 
 
$
49,690

 
$
49,052

Accrued liabilities and other
 
 
38,329

 
51,513

Debt
17
 
11,775

 
17,498

Royalty obligations
9
 
33,440

 
43,678

Reclamation
4
 
3,310

 
3,871

Deferred tax liabilities

 
8,078

 
8,078

 
 
 
144,622

 
173,690

NON-CURRENT LIABILITIES
 
 
 
 
 
Debt
17
 
534,211

 
451,048

Royalty obligations
9
 
6,781

 
27,651

Reclamation
4
 
88,009

 
66,943

Deferred tax liabilities

 
222,809

 
111,006

Other long-term liabilities
 
 
47,856

 
29,911

 
 
 
899,666

 
686,559

STOCKHOLDERS’ EQUITY
 
 
 
 
 
Common stock, par value $0.01 per share; authorized 300,000,000 shares, issued and outstanding 136,962,174 at September 30, 2015 and authorized 150,000,000 shares, issued and outstanding 103,384,408 at December 31, 2014
 
 
1,370

 
1,034

Additional paid-in capital
 
 
2,983,423

 
2,789,695

Accumulated other comprehensive income (loss)
 
 
(3,620
)
 
(2,808
)
Accumulated deficit
 
 
(2,266,788
)
 
(2,202,603
)
 
 
 
714,385

 
585,318

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
$
1,758,673

 
$
1,445,567


The accompanying notes are an integral part of these condensed consolidated financial statements.


5

COEUR MINING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
In thousands
Common
Stock
Shares
 
Common
Stock Par
Value
 
Additional
Paid-In Capital
 
Accumulated
Deficit
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Total
Balances at December 31, 2014
103,384

 
$
1,034

 
$
2,789,695

 
$
(2,202,603
)
 
$
(2,808
)
 
$
585,318

Net income (loss)
—

 
—

 
—

 
(64,185
)
 
—

 
(64,185
)
Other comprehensive income (loss)
—

 
—

 
—

 
—

 
(812
)
 
(812
)
Common stock issued for the acquisition of Paramount Gold and Silver Corp.
32,667

 
327

 
188,490

 
—

 
—

 
188,817

Common stock issued under stock-based compensation plans, net
911

 
9

 
5,238

 
—

 
—

 
5,247

Balances at September 30, 2015 (Unaudited)
136,962

 
$
1,370

 
$
2,983,423

 
$
(2,266,788
)
 
$
(3,620
)
 
$
714,385

The accompanying notes are an integral part of these condensed consolidated financial statements.

6
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)


NOTE 1 -
BASIS OF PRESENTATION
The interim condensed consolidated financial statements of Coeur Mining, Inc. and its subsidiaries (collectively "Coeur" or "the Company") are unaudited. In the opinion of management, all adjustments and disclosures necessary for the fair presentation of these interim statements have been included. The results reported in these interim statements may not be indicative of the results which will be reported for the year ending December 31, 2015. The condensed consolidated December 31, 2014 balance sheet data was derived from audited consolidated financial statements. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Recent Accounting Standards
In September 2015, the FASB issued ASU 2015-16, "Simplifying the Accounting for Measurement-Period Adjustments," which eliminates the requirement for an acquirer to retrospectively adjust the financial statements for measurement-period adjustments that occur in periods after a business combination is consummated. These changes become effective for the Company's fiscal year beginning January 1, 2016. The Company is currently evaluating the potential impact of these changes on the Company's consolidated financial position, results of operations, and cash flows.
    
In August 2015, the FASB issued ASU 2015-14, "Deferral of the Effective Date", which defers the effective date of ASU 2014-09, "Revenue from Contracts with Customers" to January 1, 2018. The Company is currently evaluating the potential impact of the prescribed changes on the Company's consolidated financial position, results of operations, and cash flows.    

In July 2015, the FASB issued ASU 2015-11, "Simplifying the Measurement of Inventory," which provides a revised, simpler measurement for inventory to be measured at the lower of cost and net realizable value. These changes become effective for the Company's fiscal year beginning January 1, 2018. The Company is currently evaluating the potential impact of these changes on the Company's consolidated financial position, results of operations, and cash flows.

In April 2015, the FASB issued ASU 2015-03, "Simplifying the Presentation of Debt Issuance Costs," which requires that debt issuance costs related to a recognized debt liability be presented as a reduction to the carrying amount of that debt liability, not as an asset. The updated guidance became effective under early adoption for the Company's fiscal year beginning January 1, 2015, and resulted in a reclassification of amounts from Other Non-current Assets to Debt in the current and prior periods.

In February 2015, the FASB issued ASU 2015-02, "Amendments to the Consolidation Analysis," which amends the consolidation requirements in ASC 810. These changes become effective for the Company's fiscal year beginning January 1, 2016. The Company is currently evaluating the potential impact of these changes on the Company's consolidated financial position, results of operations, and cash flows.    

NOTE 3 – SEGMENT REPORTING
The Company’s operating segments include the Palmarejo, San Bartolomé, Rochester, Kensington, and Wharf mines, and Coeur Capital. All operating segments are engaged in the discovery and mining of gold and silver and generate the majority of their revenues from the sale of these precious metals with the exception of Coeur Capital, which holds the Endeavor silver stream and other precious metals royalties. Other includes the La Preciosa project, Joaquin project, Martha mine, corporate office, elimination of intersegment transactions, and other items necessary to reconcile to consolidated amounts.

7
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

Financial information relating to the Company’s segments is as follows (in thousands):
Three months ended September 30, 2015
Palmarejo
 
Rochester
 
Kensington
 
Wharf
 
San Bartolomé
 
Coeur Capital
 
Other
 
Total
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Metal sales
$
49,187

 
$
34,638

 
$
30,466

 
$
27,986

 
$
17,391

 
$
1,264

 
$
—

 
$
160,932

Royalties
—

 
—

 
—

 
—

 
—

 
1,620

 
—

 
1,620

 
49,187

 
34,638

 
30,466

 
27,986

 
17,391

 
2,884

 
—

 
162,552

Costs and Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales(1)
34,093

 
25,436

 
24,973

 
17,777

 
17,483

 
475

 
—

 
120,237

Amortization
8,617

 
6,731

 
8,499

 
5,642

 
3,526

 
1,983

 
499

 
35,497

Exploration
1,087

 
49

 
217

 
—

 
54

 
(362
)
 
1,067

 
2,112

Other operating expenses
303

 
742

 
254

 
517

 
1,059

 
(38
)
 
8,795

 
11,632

Other income (expense)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value adjustments, net
2,998

 
1,752

 
—

 
—

 
—

 
—

 
1,036

 
5,786

Interest expense, net
(928
)
 
(168
)
 
(51
)
 
—

 
(100
)
 
—

 
(11,199
)
 
(12,446
)
Other, net
(7,870
)
 
1

 
1

 
53

 
347

 
(455
)
 
(970
)
 
(8,893
)
Income and mining tax (expense) benefit
10,370

 
(1,053
)
 
406

 
(907
)
 
(1,029
)
 
291

 
182

 
8,260

Net income (loss)
$
9,657

 
$
2,212

 
$
(3,122
)
 
$
3,195

 
$
(5,513
)
 
$
662

 
$
(21,310
)
 
$
(14,219
)
Segment assets(2)
$
653,501

 
$
192,348

 
$
193,712

 
$
124,754

 
$
165,931

 
$
51,553

 
$
76,860

 
$
1,458,659

Capital expenditures
$
10,514

 
$
5,281

 
$
5,522

 
$
665

 
$
1,786

 
$
—

 
$
93

 
$
23,861

(1) Excludes amortization
(2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests
Three months ended September 30, 2014
Palmarejo
 
Rochester
 
Kensington
 
San Bartolomé
 
Coeur Capital
 
Other
 
Total
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
Metal sales
$
61,376

 
$
32,362

 
$
45,922

 
$
28,350

 
$
2,367

 
$
—

 
$
170,377

Royalties
—

 
—

 
—

 
—

 
561

 
—

 
561

 
61,376

 
32,362

 
45,922

 
28,350

 
2,928

 
—

 
170,938

Costs and Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales(1)
45,988

 
23,718

 
34,668

 
20,447

 
1,089

 
—

 
125,910

Amortization
16,493

 
5,359

 
12,887

 
5,117

 
1,563

 
566

 
41,985

Exploration
2,615

 
127

 
2,638

 
(19
)
 
150

 
1,076

 
6,587

Other operating expenses
340

 
(87
)
 
202

 
180

 
342

 
11,782

 
12,759

Other income (expense)
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value adjustments, net
8,771

 
4,345

 
—

 
—

 
—

 
2,989

 
16,105

Interest expense, net
(2,126
)
 
(250
)
 
(70
)
 
(10
)
 
—

 
(9,160
)
 
(11,616
)
Other, net
284

 
39

 
—

 
583

 
(1,480
)
 
(729
)
 
(1,303
)
Income and mining tax (expense) benefit
11,562

 
(210
)
 
—

 
(2,969
)
 
214

 
7,986

 
16,583

Net income (loss)
$
14,431

 
$
7,169

 
$
(4,543
)
 
$
229

 
$
(1,482
)
 
$
(12,338
)
 
$
3,466

Segment assets(2)
$
1,111,829

 
$
208,284

 
$
315,959

 
$
304,644

 
$
67,934

 
$
539,134

 
$
2,547,784

Capital expenditures
$
5,857

 
$
4,194

 
$
3,610

 
$
2,783

 
$
—

 
$
340

 
$
16,784

(1) Excludes amortization
(2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests

8
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)



Nine months ended September 30, 2015
Palmarejo
 
Rochester
 
Kensington
 
Wharf
 
San Bartolomé
 
Coeur Capital
 
Other
 
Total
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Metal sales
$
127,455

 
$
115,010

 
$
116,971

 
$
48,359

 
$
62,304

 
$
6,292

 
$
—

 
$
476,391

Royalties
—

 
—

 
—

 
—

 
—

 
5,379

 
—

 
5,379

 
127,455

 
115,010

 
116,971

 
48,359

 
62,304

 
11,671

 
—

 
481,770

Costs and Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales(1)
98,695

 
81,221

 
81,844

 
34,410

 
55,767

 
2,460

 
—

 
354,397

Amortization
24,997

 
18,962

 
32,738

 
9,133

 
13,487

 
6,753

 
1,490

 
107,560

Exploration
4,047

 
1,272

 
2,311

 
—

 
132

 
(212
)
 
2,407

 
9,957

Other operating expenses
940

 
2,190

 
1,015

 
1,188

 
1,544

 
(8
)
 
31,078

 
37,947

Other income (expense)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value adjustments, net
1,882

 
596

 
—

 
—

 
—

 
—

 
1,179

 
3,657

Interest expense, net
(3,112
)
 
(598
)
 
(172
)
 
—

 
(674
)
 
—

 
(29,389
)
 
(33,945
)
Other, net
(9,478
)
 
(38
)
 
(16
)
 
108

 
1,219

 
(2,904
)
 
(3,148
)
 
(14,257
)
Income and mining tax (expense) benefit
9,836

 
(1,753
)
 
(587
)
 
(495
)
 
(2,240
)
 
266

 
3,424

 
8,451

Net income (loss)
$
(2,096
)
 
$
9,573

 
$
(1,712
)
 
$
3,241

 
$
(10,322
)
 
$
40

 
$
(62,909
)
 
$
(64,185
)
Segment assets(2)
$
653,501

 
$
192,348

 
$
193,712

 
$
124,754

 
$
165,931

 
$
51,553

 
$
76,860

 
$
1,458,659

Capital expenditures
$
30,421

 
$
14,451

 
$
14,380

 
$
1,959

 
$
3,729

 
$
—

 
$
218

 
$
65,158

(1) Excludes amortization
(2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests
Nine months ended September 30, 2014
Palmarejo
 
Rochester
 
Kensington
 
San Bartolomé
 
Coeur Capital
 
Other
 
Total
Revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
Metal sales
$
201,809

 
$
87,710

 
$
111,000

 
$
84,983

 
$
7,227

 
$
—

 
$
492,729

Royalties
—

 
—

 
—

 
—

 
2,404

 
—

 
2,404

 
201,809

 
87,710

 
111,000

 
84,983

 
9,631

 
—

 
495,133

Costs and Expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales(1)
139,113

 
62,806

 
86,417

 
60,042

 
3,114

 
—

 
351,492

Amortization
53,196

 
14,835

 
35,162

 
14,430

 
4,685

 
1,526

 
123,834

Exploration
5,257

 
2,039

 
5,318

 
63

 
462

 
2,818

 
15,957

Other operating expenses
962

 
2,102

 
591

 
515

 
868

 
46,790

 
51,828

Other income (expense)
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value adjustments, net
(6,454
)
 
1,835

 
—

 
—

 
—

 
1,008

 
(3,611
)
Interest expense, net
(7,721
)
 
(515
)
 
(145
)
 
(42
)
 
—

 
(28,557
)
 
(36,980
)
Other, net
(2,489
)
 
90

 
4

 
1,957

 
(4,988
)
 
(1,501
)
 
(6,927
)
Income and mining tax (expense) benefit
16,734

 
(629
)
 
—

 
(7,937
)
 
(304
)
 
10,786

 
18,650

Net income (loss)
$
3,351

 
$
6,709

 
$
(16,629
)
 
$
3,911

 
$
(4,790
)
 
$
(69,398
)
 
$
(76,846
)
Segment assets(2)
$
1,111,829

 
$
208,284

 
$
315,959

 
$
304,644

 
$
67,934

 
$
539,134

 
$
2,547,784

Capital expenditures
$
15,188

 
$
9,110

 
$
12,310

 
$
5,935

 
$
—

 
$
1,533

 
$
44,076

(1) Excludes amortization
(2) Segment assets include receivables, prepaids, inventories, property, plant and equipment, and mineral interests

Assets
September 30, 2015

December 31, 2014
Total assets for reportable segments
$
1,458,659

 
$
1,084,257

Cash and cash equivalents
205,708

 
270,861

Other assets
94,306

 
90,449

Total consolidated assets
$
1,758,673

 
$
1,445,567



9
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

Geographic Information
Long-Lived Assets
September 30, 2015

December 31, 2014
United States
$
349,303

 
$
275,594

Mexico
621,960

 
298,101

Bolivia
98,966

 
107,960

Australia
17,099

 
21,362

Argentina
10,925

 
10,970

Other
14,380

 
15,116

Total
$
1,112,633

 
$
729,103

 

Revenue
Three months ended September 30,
 
Nine months ended September 30,
2015
 
2014
 
2015
 
2014
United States
$
93,091

 
$
78,284

 
$
280,340

 
$
198,710

Mexico
50,170

 
61,684

 
129,753

 
202,851

Bolivia
17,391

 
28,350

 
62,304

 
84,983

Australia
1,264

 
2,367

 
6,292

 
7,227

Other
636

 
253

 
$
3,081

 
$
1,362

Total
$
162,552

 
$
170,938

 
$
481,770

 
$
495,133


NOTE 4 – RECLAMATION
Reclamation and mine closure costs are based principally on legal and regulatory requirements. Management estimates costs associated with reclamation of mining properties. The Company uses assumptions about future costs, mineral prices, mineral processing recovery rates, production levels, capital costs, and reclamation costs. On an ongoing basis, management evaluates its estimates and assumptions, and future expenditures could differ from current estimates.
Changes to the Company’s asset retirement obligations for operating sites are as follows:
 
Three months ended September 30,
 
Nine months ended September 30,
In thousands
2015
 
2014
 
2015
 
2014
Asset retirement obligation - Beginning
$
87,601

 
$
59,795

 
$
67,214

 
$
57,454

Accretion
2,038

 
1,452

 
5,652

 
4,205

Additions and changes in estimates
—

 
—

 
18,270

 
—

Settlements
(2,363
)
 
(58
)
 
(3,860
)
 
(470
)
Asset retirement obligation - Ending
$
87,276

 
$
61,189

 
$
87,276

 
$
61,189

The increase in asset retirement obligations in the nine months ended September 30, 2015 is due to the acquisition of the Wharf gold mine. The Company has accrued $4.0 million and $3.6 million at September 30, 2015 and December 31, 2014, respectively, for reclamation liabilities related to former mining activities, which are included in Reclamation.

NOTE 5 – STOCK-BASED COMPENSATION
The Company has stock incentive plans for executives and eligible employees. Stock awards include stock options, restricted stock, and performance shares. Stock-based compensation expense was $1.6 million and $2.5 million for the three months ended and $6.4 million and $7.5 million for the nine months ended September 30, 2015 and 2014, respectively. At September 30, 2015, there was $9.8 million of unrecognized stock-based compensation cost expected to be recognized over a period of 1.5 years. During the nine months ended September 30, 2015, the supplemental incentive accrual increased $1.2 million to $1.8 million.

10
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table summarizes the grants awarded during the nine months ended September 30, 2015:
Grant date
 
Restricted
stock
 
Grant date fair
value of
restricted stock
 
Stock options
 
Grant date
fair value of
stock
options
 
Performance
shares
 
Grant date fair
value of
performance
shares
May 13, 2015
 
1,127,814

 
$
5.57

 
310,028

 
$
2.65

 
809,293

 
$
6.97

July 1, 2015
 
22,897

 
$
5.35

 
—

 
$
—

 
—

 
$
—


The following options and stock appreciation rights were exercisable during the nine months ended September 30, 2015:
Award Type
 
Number of 
Exercised Units
 
Weighted Average
Exercised Price
 
Number of Exercisable Units
 
Weighted Average
Exercisable Price
Stock options
 
—

 
$
—

 
322,117

 
$
19.96

Stock appreciation rights
 
—

 
$
—

 
46,572

 
$
14.06


NOTE 6 – RETIREMENT SAVINGS PLAN
The Company has a 401(k) retirement savings plan that covers all eligible U.S. employees. Eligible employees may elect to contribute up to 75% of base salary, subject to ERISA limitations. In addition, the Company has a deferred compensation plan for employees whose benefits under the 401(k) plan are limited by federal regulations. The Company generally makes matching contributions equal to 100% of the employee’s contribution up to 4% of the employee's salary. The Company may also provide a voluntary, noncontributory defined contribution based on an eligible employee's salary. Expenses (income) related to retirement savings plan contributions were $(0.7) million and $1.4 million for the three months ended and $2.8 million and $4.4 million for the nine months ended September 30, 2015 and 2014, respectively.

NOTE 7 – INCOME AND MINING TAXES
The following table summarizes the components of Income and mining tax (expense) benefit for the three and nine months ended September 30, 2015 and 2014 by significant jurisdiction:
 
Three months ended September 30,
 
Nine months ended September 30,
 
2015

2014
 
2015
 
2014
In thousands
Income (loss) before tax
Tax (expense) benefit
 
Income (loss) before tax
Tax (expense) benefit
 
Income (loss) before tax
Tax (expense) benefit
 
Income (loss) before tax
Tax (expense) benefit
United States
$
(16,168
)
$
(1,080
)

$
(14,954
)
$
739

 
$
(46,640
)
$
1,123

 
$
(75,168
)
$
447

Argentina
(731
)
(2
)

(935
)
1,539

 
(2,083
)
(3
)
 
(3,828
)
5,622

Mexico
(1,412
)
11,951


(283
)
17,003

 
(16,666
)
11,234

 
(28,999
)
20,831

Bolivia
(4,483
)
(1,029
)

3,199

(2,969
)
 
(8,081
)
(2,240
)
 
11,848

(7,937
)
Other jurisdictions
315

(1,580
)
 
(144
)
271

 
834

(1,663
)
 
651

(313
)

$
(22,479
)
$
8,260

 
$
(13,117
)
$
16,583

 
$
(72,636
)
$
8,451

 
$
(95,496
)
$
18,650


The Company’s effective tax rate is impacted by recurring items, such as foreign exchange rates on deferred tax balances, the full valuation allowance on the deferred tax assets relating to losses in the United States and certain foreign jurisdictions, mining tax expense and uncertain tax position accruals. In addition, the Company's consolidated effective income tax rate is a function of the combined effective tax rates and foreign exchange rates in the jurisdictions in which it operates. Variations in the jurisdictional mix of income and loss and foreign exchange rates result in significant fluctuations in our consolidated effective tax rate.

A valuation allowance is provided for deferred tax assets for which it is more likely than not that the related tax benefits will not be realized. Each quarter, the Company analyzes its deferred tax assets and, if it is determined that the Company will not realize all or a portion of its deferred tax assets, it will record or increase a valuation allowance. Conversely, if it is determined that the Company will ultimately be able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced. There are a number of risk factors that could impact the Company’s ability to realize its deferred tax assets. For additional information, see Part II, Item 1A of this Report.
    
The Company or one of its subsidiaries files income tax returns in the U.S. Federal jurisdiction, and various state and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. Federal income tax examination by tax

11
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

authorities for years before 2012 and is no longer subject to examination by certain foreign jurisdictions by tax authorities for years before 2005. As a result of statutes of limitation that will begin to expire within the next 12 months in various jurisdictions and possible settlements of audit-related issues with taxing authorities in various jurisdictions with respect to which none of the issues are individually significant, the Company believes that it is reasonably possible that the total amount of its net unrecognized income tax benefits will decrease between $0.8 million and $1.1 million in the next 12 months.

At September 30, 2015 and December 31, 2014, the Company had $17.4 million and $16.1 million of total gross unrecognized tax benefits, respectively. If recognized, these unrecognized tax benefits would positively impact the Company’s effective income tax rate. The Company’s continuing practice is to recognize potential interest and/or penalties related to unrecognized tax benefits as part of its income tax expense. At September 30, 2015 and December 31, 2014, the amount of accrued income-tax-related interest and penalties was $9.4 million and $6.9 million, respectively.
NOTE 8 – NET INCOME (LOSS) PER SHARE
Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock.
For the three and nine months ended September 30, 2015 and 2014, 3,302,701 and 1,387,957 shares and 3,251,347 and 2,008,749, respectively, of common stock equivalents related to equity-based awards were not included in the diluted per share calculation as the shares would be antidilutive.
The 3.25% Convertible Senior Notes were not included in the computation of diluted net income (loss) per share for the three and nine months ended September 30, 2015 and 2014 because there is no excess value upon conversion over the principal amount of the Notes.
 
Three months ended September 30,
 
Nine months ended September 30,
In thousands except per share amounts
2015
 
2014
 
2015
 
2014
Net income (loss) available to common stockholders
$
(14,219
)
 
$
3,466

 
$
(64,185
)
 
$
(76,846
)
Weighted average shares:
 
 
 
 
 
 
 
Basic
135,247

 
102,470

 
124,478

 
102,427

Effect of stock-based compensation plans
—

 
91

 
—

 
—

Diluted
135,247

 
102,561

 
124,478

 
102,427

Income (loss) per share:
 
 
 
 
 
 
 
Basic
$
(0.11
)
 
$
0.03

 
$
(0.52
)
 
$
(0.75
)
Diluted
$
(0.11
)
 
$
0.03

 
$
(0.52
)
 
$
(0.75
)

NOTE 9 – FAIR VALUE MEASUREMENTS
The following table presents the components of Fair value adjustments, net:
 
 
Three months ended September 30,
 
Nine months ended September 30,
In thousands
 
2015
 
2014
 
2015
 
2014
Palmarejo royalty obligation embedded derivative
 
$
2,983

 
$
8,736

 
$
1,823

 
$
(6,560
)
Rochester net smelter royalty (NSR) royalty obligation
 
1,752

 
4,345

 
596

 
1,835

Silver and gold options
 
1,051

 
3,081

 
1,238

 
213

Foreign exchange contracts
 
—

 
(57
)
 
—

 
901

Fair value adjustments, net
 
$
5,786

 
$
16,105

 
$
3,657

 
$
(3,611
)
Accounting standards establish a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1), secondary priority to quoted prices in inactive markets or observable inputs (Level 2), and the lowest priority to unobservable inputs (Level 3).

12
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis (at least annually) by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:
 
Fair Value at September 30, 2015
In thousands
Total
 
Level 1
 
Level 2
 
Level 3  
Assets:
 
 
 
 
 
 
 
Equity securities
$
3,213

 
$
3,124

 
$
—

 
$
89

Liabilities:
 
 
 
 
 
 
 
Palmarejo royalty obligation embedded derivative
$
9,024

 
$
—

 
$
—

 
$
9,024

Rochester NSR royalty obligation
10,940

 
—

 
—

 
10,940

Other derivative instruments, net
431

 
—

 
431

 
—

 
$
20,395

 
$
—

 
$
431

 
$
19,964

 
 
Fair Value at December 31, 2014
In thousands
Total
 
Level 1
 
Level 2
 
Level 3  
Assets:
 
 
 
 
 
 
 
Equity securities
$
5,982

 
$
4,603

 
$
—

 
$
1,379

Silver and gold options
3,882

 
—

 
3,882

 
—

 
$
9,864

 
$
4,603

 
$
3,882

 
$
1,379

Liabilities:
 
 
 
 
 
 
 
Palmarejo royalty obligation embedded derivative
$
21,912

 
$
—

 
$
—

 
$
21,912

Rochester NSR royalty obligation
15,370

 
—

 
—

 
15,370

Silver and gold options
1,039

 
—

 
1,039

 
—

Other derivative instruments, net
805

 
—

 
805

 
—

 
$
39,126

 
$
—

 
$
1,844

 
$
37,282

The Company’s investments in equity securities are recorded at fair market value in the financial statements based primarily on quoted market prices. Such instruments are classified within Level 1 of the fair value hierarchy. Quoted market prices are not available for certain equity securities; these securities are valued using pricing models, which require the use of observable and unobservable inputs, and are classified within Level 3 of the fair value hierarchy.
The Company’s silver and gold options and other derivative instruments, net, which relate to concentrate and certain doré sales contracts and foreign exchange contracts, are valued using pricing models, which require inputs that are derived from observable market data, including contractual terms, forward market prices, yield curves, credit spreads, and other unobservable inputs. The model inputs can generally be verified and do not involve significant management judgment. Such instruments are classified within Level 2 of the fair value hierarchy.
The fair values of the Palmarejo royalty obligation embedded derivative and Rochester NSR royalty obligation were estimated based on observable market data including contractual terms, forward silver and gold prices, yield curves, and credit spreads, as well as the Company’s current mine plan which is considered a significant unobservable input. Therefore, the Company has classified these obligations as Level 3 financial liabilities. Based on current mine plans, expected royalty durations of 1.0 years and 2.5 years were used to estimate the fair value of the Palmarejo royalty obligation embedded derivative and Rochester NSR royalty obligation, respectively, at September 30, 2015.

13
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

No assets or liabilities were transferred between fair value levels in the nine months ended September 30, 2015.
The following tables present the changes in the fair value of the Company's Level 3 financial assets and liabilities for the three and nine months ended September 30, 2015:
 
Three months ended September 30, 2015
In thousands
Balance at the beginning of the period
 
Revaluation
 
Settlements
 
Balance at the
end of the
period
Assets:
 
 
 
 
 
 
 
Equity securities
$
89

 
$
—

 
$
—

 
$
89

Liabilities:
 
 
 
 
 
 
 
Palmarejo royalty obligation embedded derivative
$
15,281

 
$
(2,983
)
 
$
(3,274
)
 
$
9,024

Rochester NSR royalty obligation
13,905

 
(1,752
)
 
(1,213
)
 
10,940

 
Nine months ended September 30, 2015
In thousands
Balance at the beginning of the period
 
Revaluation
 
Settlements
 
Balance at the
end of the
period
Assets:
 
 
 
 
 
 
 
Equity securities
$
1,379

 
$
(904
)
 
$
(386
)
 
$
89

Liabilities:
 
 
 
 
 
 
 
Palmarejo royalty obligation embedded derivative
$
21,912

 
$
(1,823
)
 
$
(11,065
)
 
$
9,024

Rochester NSR royalty obligation
15,370

 
(596
)
 
(3,834
)
 
10,940

The fair value of financial assets and liabilities carried at book value in the financial statements at September 30, 2015 and December 31, 2014 is presented in the following table:
 
September 30, 2015
In thousands
Book Value
 
Fair Value
 
Level 1
 
Level 2
 
Level 3  
Liabilities:
 
 

 
 
 
 
 
 
3.25% Convertible Senior Notes due 2028
$
712

 
$
696

 
$
—

 
$
696

 
$
—

7.875% Senior Notes due 2021(1)
426,533

 
260,016

 
—

 
260,016

 
—

Term Loan due 2020(2)
94,557

 
99,750

 
—

 
99,750

 
—

San Bartolomé Lines of Credit
9,142

 
9,142

 
—

 
9,142

 
—

Palmarejo gold production royalty obligation
20,258

 
20,991

 
—

 
—

 
20,991

(1) Net of unamortized debt issuance costs and premium received of $6.4 million.
(2) Net of unamortized debt issuance costs of $5.2 million.
 
December 31, 2014
In thousands
Book Value
 
Fair Value
 
Level 1
 
Level 2
 
Level 3  
Liabilities:
 
 
 
 
 
 
 
 
 
3.25% Convertible Senior Notes due 2028
$
5,334

 
$
4,979

 
$
—

 
$
4,979

 
$
—

7.875% Senior Notes due 2021(1)
427,603

 
343,305

 
—

 
343,305

 
—

San Bartolomé Lines of Credit
14,785

 
14,785

 
—

 
14,785

 
—

Palmarejo gold production royalty obligation
34,047

 
38,290

 
—

 
—

 
38,290

(1) Net of unamortized debt issuance costs and premium received of $7.3 million.
The fair values of the 3.25% Convertible Senior Notes due 2028 (the "Convertible Notes") and 7.875% Senior Notes due 2021 (the "Senior Notes") outstanding were estimated using quoted market prices. The Term Loan due 2020 (the "Term Loan") was originated by a third party at June 25, 2015 and, as a result, book value is assumed to approximate fair value. The fair value of the San Bartolomé line of credit approximates book value due to the short-term nature of the liability and absence of significant

14
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

interest rate or credit concerns. The fair value of the Palmarejo gold production royalty obligation is estimated based on observable market data including contractual terms, forward silver and gold prices, yield curves, and credit spreads, as well as the Company’s current mine plan which is considered a significant unobservable input.

NOTE 10 – DERIVATIVE FINANCIAL INSTRUMENTS
Palmarejo Gold Production Royalty
On January 21, 2009, the Company's subsidiary, Coeur Mexicana S.A. de C.V. ("Coeur Mexicana"), entered into a gold production royalty agreement with a subsidiary of Franco-Nevada Corporation. The royalty covers 50% of the life of mine production from the Palmarejo mine and legacy adjacent properties, excluding production from the recently acquired Paramount Gold and Silver Corp ("Paramount") properties. The royalty transaction includes a minimum obligation of 4,167 gold ounces per month and terminates when payments on 400,000 gold ounces have been made. At September 30, 2015, a total of 45,996 gold ounces remain outstanding under the obligation.
The price volatility associated with the minimum royalty obligation is considered an embedded derivative. The Company is required to recognize the change in fair value of the remaining minimum obligation due to changing gold prices. Unrealized gains are recognized in periods when the gold price has decreased from the previous period and unrealized losses are recognized in periods when the gold price increases. The fair value of the embedded derivative is reflected net of the Company's current credit adjusted risk free rate, which was 19.5% and 11.8% at September 30, 2015 and December 31, 2014, respectively. The fair value of the embedded derivative at September 30, 2015 and December 31, 2014 was a liability of $9.0 million and $21.9 million, respectively. The mark-to-market adjustments were gains of $3.0 million and $8.7 million for the three months ended and gains of $1.8 million and losses of $6.6 million for the nine months ended September 30, 2015 and 2014, respectively.
Payments on the royalty obligation decrease the carrying amount of the minimum obligation and the derivative liability. Each monthly payment is an amount equal to the greater of the minimum of 4,167 ounces of gold or 50% of actual gold production multiplied by the excess of the monthly average market price of gold above $412 per ounce, subject to a 1% annual inflation adjustment. Realized losses on settlement of the liabilities were $3.3 million and $5.0 million for the three months ended and $11.0 million and $16.6 million for the nine months ended September 30, 2015 and 2014, respectively. The mark-to-market adjustments and realized losses are included in Fair value adjustments, net.
Provisional Silver and Gold Sales
The Company enters into sales contracts with third-party smelters and refiners which, in most cases, provide for a provisional payment based upon preliminary assays and quoted metal prices. The provisionally priced sales contracts contain an embedded derivative that is required to be separated from the host contract for accounting purposes. The host contract is the receivable recorded at the forward price at the time of sale. The embedded derivatives do not qualify for hedge accounting and are marked to market through earnings each period until final settlement. Changes in silver and gold prices resulted in provisional pricing mark-to-market losses of $0.1 million and $0.7 million in the three months ended and gains of $0.4 million and $0.2 million in the nine months ended September 30, 2015 and 2014, respectively. At September 30, 2015, the Company had outstanding provisionally priced sales of 0.6 million ounces of silver and 39,069 ounces of gold at prices of $14.65 and $1,147, respectively.
Silver and Gold Options
At December 31, 2014, the Company had outstanding put spread contracts on 1.3 million ounces of silver and 24,000 ounces of gold, all of which settled in the nine months ended September 30, 2015. The weighted average high and low strike prices on the silver put spreads were $18.00 per ounce and $16.00 per ounce, respectively. The weighted average high and low strike prices on the gold put spreads were $1,200 and $1,050, respectively. During the three and nine months ended September 30, 2014, the Company recorded unrealized gains of $3.1 million and $0.2 million, respectively, related to outstanding options which were included in Fair value adjustments, net. The Company recognized realized gains of $1.1 million and realized losses of $0.9 million during the three months ended and realized gains of $2.7 million and realized losses of $1.3 million during the nine months ended September 30, 2015 and 2014, respectively, from settled contracts.

15
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

At September 30, 2015, the Company had the following derivative instruments that settle in each of the years indicated:
In thousands except average prices and notional ounces
2015
 
2016
 
Thereafter
Palmarejo gold production royalty
$
11,760

 
$
20,543

 
$
—

Average gold price in excess of minimum contractual deduction
$
706

 
$
700

 
$
—

Notional ounces
16,668

 
29,328

 
—

 
 
 
 
 
 
Provisional silver sales
$
8,234

 
$
—

 
$
—

Average silver price
$
14.65

 
$
—

 
$
—

Notional ounces
562,063

 
—

 
—

 
 
 
 
 
 
Provisional gold sales
$
44,812

 
$
—

 
$
—

Average gold price
$
1,147

 
$
—

 
$
—

Notional ounces
39,069

 
—

 
—


The following summarizes the classification of the fair value of the derivative instruments:
 
September 30, 2015
In thousands
Prepaid expenses and other
 
Accrued liabilities and other
 
Current portion of royalty obligation
 
Non-current portion of royalty obligation
Palmarejo gold production royalty
—

 
—

 
9,024

 
—

Concentrate sales contracts
120

 
551

 
—

 
—

 
$
120

 
$
551

 
$
9,024

 
$
—

 
December 31, 2014
 
Prepaid expenses and other
 
Accrued liabilities and other
 
Current portion of royalty obligation
 
Non-current portion of royalty obligation
Palmarejo gold production royalty
—

 
—

 
14,405

 
7,507

Silver and gold options
3,882

 
1,039

 
—

 
—

Concentrate sales contracts
43

 
848

 
—

 
—

 
$
3,925

 
$
1,887

 
$
14,405

 
$
7,507

The following represent mark-to-market gains (losses) on derivative instruments for the three and nine months ended September 30, 2015, and 2014 (in thousands):
 
 
 
Three months ended September 30,
 
Nine months ended September 30,
Financial statement line
Derivative
 
2015
 
2014
 
2015
 
2014
Revenue
Concentrate sales contracts
 
$
82

 
$
(684
)
 
$
373

 
$
188

Costs applicable to sales
Foreign exchange contracts
 
—

 
—

 
—

 
(924
)
Fair value adjustments, net
Foreign exchange contracts
 
—

 
(57
)
 
—

 
901

Fair value adjustments, net
Palmarejo gold royalty
 
2,983

 
8,736

 
1,823

 
(6,560
)
Fair value adjustments, net
Silver and gold options
 
1,051

 
3,081

 
2,662

 
213

 
 
 
$
4,116

 
$
11,076

 
$
4,858

 
$
(6,182
)
Credit Risk
The credit risk exposure related to any derivative instrument is limited to the unrealized gains, if any, on outstanding contracts based on current market prices. To reduce counter-party credit exposure, the Company enters into contracts with financial institutions management deems credit worthy and limits credit exposure to each institution. The Company does not anticipate non-performance by any of its counterparties. In addition, to allow for situations where derivative positions may need to be revised, the Company transacts only in markets that management considers highly liquid.

NOTE 11 – ACQUISITIONS
On April 17, 2015, the Company completed the acquisition of Paramount, which held mineral claims adjacent to the Company's Palmarejo mine, including a continuation of the Independencia mineral vein. Upon closing, Paramount became a wholly-owned subsidiary of the Company, and each issued and outstanding share of Paramount common stock was converted into

16
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

0.2016 shares of Coeur common stock, with cash paid in lieu of fractional shares. Immediately prior to completion of the acquisition, Paramount spun off to its existing stockholders a separate, publicly-traded company, Paramount Gold Nevada Corp. ("SpinCo"), which owns the Sleeper Gold Project and other assets in Nevada. SpinCo was capitalized with $8.5 million in cash contributed by Coeur, which amount has been included in the total consideration paid for the acquisition of Paramount. The Company also paid $1.5 million to acquire 4.9% of the newly issued and outstanding shares of SpinCo.
The transaction was accounted for as an asset acquisition, as Paramount is an exploration stage project, which requires that the total purchase price be allocated to the assets acquired and liabilities assumed based on their relative fair values. The purchase price and acquired assets and liabilities were as follows (in thousands except share data):
Common shares issued (32,667,327 at $5.78)
$
188,817

Cash
8,530

Transaction advisory fees and other acquisition costs
4,020

Total purchase price
201,367

Assets:
 
Cash
118

Receivables and other current assets
1,685

Property, plant, and equipment
215

Mining properties, net
305,175

 
307,193

Liabilities:
 
Accounts payable and accrued liabilities
2,737

Deferred income taxes
103,089

 
105,826

Net assets acquired
$
201,367

The assets acquired and liabilities assumed have been assigned to the Palmarejo reportable operating segment.
On February 20, 2015, the Company completed its acquisition of the Wharf gold mine located near Lead, South Dakota, from a subsidiary of Goldcorp in exchange for $99.8 million in cash. The transaction was accounted for as a business combination which requires that assets acquired and liabilities assumed be recognized at their respective fair values at the acquisition date. The Company incurred $2.1 million of acquisition costs, which are included in Pre-development, reclamation, and other on the Condensed Consolidated Statements of Comprehensive Income (Loss).

17
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

The purchase price allocation was based on the fair value of acquired assets and liabilities as follows (in thousands):
Assets:
 
Cash
$
982

Receivables
3,061

Inventory
2,147

Ore on leach pads
12,710

Other current assets
2,924

Property, plant, and equipment
30,055

Mining properties, net
81,189

Other non-current assets
3,966

 
137,034

Liabilities:
 
Accounts payable and accrued liabilities
5,494

Reclamation
18,270

Deferred income taxes
9,680

Other non-current liabilities
3,750

 
37,194

Net assets acquired
$
99,840

        
The following table presents the unaudited pro forma summary of the Company’s Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2015 and 2014, as if the acquisition had occurred on January 1, 2015. The following unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations as they would have been had the transaction occurred on the assumed date, nor is it necessarily an indication of trends in future results for a number of reasons, including, but not limited to, differences between the assumptions used to prepare the pro forma information, potential synergies, and cost savings from operating efficiencies.
 
 
Three months ended September 30,
 
Nine months ended September 30,
In thousands
 
2015
 
2014
 
2015
 
2014
Revenue
 
$
162,552

 
$
190,323

 
$
499,770

 
$
555,344

Income (loss) before income and mining taxes
 
(22,479
)
 
(9,125
)
 
(72,688
)
 
(79,190
)
Net income (loss)
 
(14,219
)
 
7,383

 
(64,237
)
 
(60,554
)

NOTE 12 – INVESTMENTS
The Company invests in equity securities of silver and gold exploration and development companies. These investments are classified as available-for-sale and are measured at fair value in the financial statements with unrealized gains and losses recorded in Other comprehensive income (loss).
 
At September 30, 2015
In thousands
Cost
 
Gross
Unrealized
Losses
 
Gross
Unrealized
Gains
 
Estimated
Fair Value
Equity securities
3,730

 
(1,196
)
 
679

 
3,213


 
At December 31, 2014
In thousands
Cost
 
Gross
Unrealized
Losses
 
Gross
Unrealized
Gains
 
Estimated
Fair Value
Equity securities
$
5,687

 
$
(8
)
 
$
303

 
$
5,982



18
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table summarizes the gross unrealized losses on equity securities for which other-than-temporary impairments have not been recognized and the fair values of those securities, aggregated by the length of time the individual securities have been in a continuous unrealized loss position, at September 30, 2015:
 
Less than twelve months
 
Twelve months or more
 
Total
In thousands
Unrealized Losses
Fair Value
 
Unrealized Losses
Fair Value
 
Unrealized Losses
Fair Value
Equity securities
$
(1,196
)
$
1,017

 
$
—

$
—

 
$
(1,196
)
$
1,017


The Company performs a quarterly assessment on each of its equity securities with unrealized losses to determine if the security is other than temporarily impaired. The Company recorded pre-tax other-than-temporary impairment losses of $0.5 million and $1.1 million in the three months ended and $2.0 million and $4.6 million in the nine months ended September 30, 2015 and 2014, respectively, in Other, net.

NOTE 13 – RECEIVABLES
Receivables consist of the following:
In thousands
September 30, 2015
 
December 31, 2014
Current receivables:
 
 
 
Trade receivables
$
14,884

 
$
20,448

Income tax receivable
27,397

 
30,045

Value added tax receivable
47,621

 
63,805

Other
3,697

 
2,623

 
$
93,599

 
$
116,921

Non-current receivables:
 
 
 
Value added tax receivable
$
27,507

 
$
21,686

Total receivables
$
121,106

 
$
138,607


NOTE 14 – INVENTORY AND ORE ON LEACH PADS
Inventory consists of the following: 
In thousands
September 30, 2015
 
December 31, 2014
Inventory:
 
 
 
Concentrate
$
12,621

 
$
23,563

Precious metals
36,871

 
40,870

Supplies
48,617

 
50,498

 
$
98,109

 
$
114,931

Ore on leach pads:
 
 
 
Current
$
68,695

 
$
48,204

Non-current
39,685

 
37,889

 
$
108,380

 
$
86,093

Total inventory and ore on leach pads
$
206,489

 
$
201,024


19
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)


NOTE 15 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consist of the following: 
In thousands
September 30, 2015
 
December 31, 2014
Land
$
8,287

 
$
1,752

Facilities and equipment
706,198

 
647,181

Capital leases
26,338

 
28,680

 
740,823

 
677,613

Accumulated amortization
(502,466
)
 
(464,852
)
 
238,357

 
212,761

Construction in progress
22,686

 
15,150

Property, plant and equipment, net
$
261,043

 
$
227,911

NOTE 16 – MINING PROPERTIES
Mining properties consist of the following (in thousands):
September 30, 2015
Palmarejo
 
Rochester
 
Kensington
 
Wharf
 
San
Bartolomé
 
La Preciosa
 
Joaquin
 
Coeur Capital
 
Total
Mine development
$
159,604

 
$
156,097

 
$
231,230

 
$
32,580

 
$
49,491

 
$
—

 
$
—

 
$
—

 
$
629,002

Accumulated amortization
(129,872
)
 
(123,085
)
 
(124,090
)
 
(3,676
)
 
(29,389
)
 
—

 
—

 


 
(410,112
)
 
29,732

 
33,012

 
107,140

 
28,904

 
20,102

 
—

 
—

 
—

 
218,890

Mineral interests
822,036

 
—

 
—

 
49,601

 
17,560

 
49,085

 
10,000

 
81,461

 
1,029,743

Accumulated amortization
(345,199
)
 
—

 
—

 
(8,240
)
 
(11,157
)
 
—

 
—

 
(32,447
)
 
(397,043
)
 
476,837

 
—

 
—

 
41,361

 
6,403

 
49,085

 
10,000

 
49,014

 
632,700

Mining properties, net
$
506,569

 
$
33,012

 
$
107,140

 
$
70,265

 
$
26,505

 
$
49,085

 
$
10,000

 
$
49,014

 
$
851,590

December 31, 2014
Palmarejo
 
Rochester
 
Kensington
 
San
Bartolomé
 
La Preciosa
 
Joaquin
 
Coeur Capital
 
Total
Mine development
$
137,821

 
$
153,535

 
$
217,138

 
$
49,305

 
$
—

 
$
—

 
$
—

 
$
557,799

Accumulated amortization
(121,906
)
 
(113,533
)
 
(106,865
)
 
(26,106
)
 
—

 
—

 
—

 
(368,410
)
 
15,915

 
40,002

 
110,273

 
23,199

 
—

 
—

 
—

 
189,389

Mineral interests
521,349

 
—

 
—

 
17,560

 
49,059

 
10,000

 
81,461

 
679,429

Accumulated amortization
(332,032
)
 
—

 
—

 
(10,143
)
 
—

 
—

 
(25,451
)
 
(367,626
)
 
189,317

 
—

 
—

 
7,417

 
49,059

 
10,000

 
56,010

 
311,803

Mining properties, net
$
205,232

 
$
40,002

 
$
110,273

 
$
30,616

 
$
49,059

 
$
10,000

 
$
56,010

 
$
501,192


20
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 17 – DEBT
Long-term debt and capital lease obligations at September 30, 2015 and December 31, 2014 are as follows:
 
September 30, 2015
 
December 31, 2014
In thousands
Current
 
Non-Current
 
Current
 
Non-Current
3.25% Convertible Senior Notes due 2028
$
—

 
$
712

 
$
5,334

 
$
—

7.875% Senior Notes due 2021, net(1)
—

 
426,533

 
—

 
427,603

Term Loan due 2020, net(2)
1,000

 
93,557

 
—

 
—

San Bartolomé Lines of Credit
1,723

 
7,419

 
4,481

 
10,304

Capital lease obligations
9,052

 
5,990

 
7,683

 
13,141

 
$
11,775

 
$
534,211

 
$
17,498

 
$
451,048

(1) Net of unamortized debt issuance costs and premium received of $6.4 million and $7.3 million at September 30, 2015 and December 31, 2014, respectively.
(2) Net of unamortized debt issuance costs of $5.2 million at September 30, 2015.
7.875% Senior Notes due 2021
During the first quarter of 2015, the Company repurchased $2.0 million in aggregate principal amount of the Senior Notes, resulting in an aggregate principal balance outstanding of $432.9 million at September 30, 2015.
At any time prior to February 1, 2016, the Company may use the proceeds of certain equity offerings to redeem up to 35% of the aggregate principal amount of the Notes, including any permitted additional Notes, at a redemption price equal to 107.875% of the principal amount. At any time prior to February 1, 2017, the Company may redeem all or part of the Senior Notes upon not less than 30 nor more than 60 days’ prior notice at a redemption price equal to the sum of 100% of the principal amount thereof, a make-whole premium as of the date of redemption, and accrued and unpaid interest and additional interest, if any, thereon, to the date of redemption. In addition, the Company may redeem some or all of the Senior Notes on or after February 1, 2017, at redemption prices set forth in the Indenture for the Senior Notes, together with accrued and unpaid interest.

3.25% Convertible Senior Notes due 2028
Per the indenture governing the Convertible Notes, the Company announced on February 12, 2015 that it was offering to repurchase all of the Convertible Notes. During the first quarter of 2015, the Company repurchased $4.6 million in aggregate principal amount, leaving a balance of $0.7 million at September 30, 2015. The Convertible Notes are classified as non-current liabilities at September 30, 2015 as a result of the expiration of the holders' option to require the Company to repurchase the notes on March 15, 2015.
Short-term Loan
On March 31, 2015, the Company entered into a credit agreement (the "Short-term Credit Agreement") with The Bank of Nova Scotia. The Short-term Credit Agreement provided for a $50.0 million loan (the "Short-term Loan") to the Company. The Short-term Loan generally bore interest at a rate equal to an adjusted Eurocurrency rate plus a margin of 2.50%. On June 25, 2015, the Short-term Loan was repaid in full, the security for the Short-term Loan was released, and the Short-term Credit Agreement was terminated.
Term Loan due 2020
    
On June 23, 2015, the Company and certain of its subsidiaries entered into a five year Credit Agreement for a senior secured term loan (the "Term Loan") with Barclays Bank PLC, as administrative agent (the “Term Loan Credit Agreement”). The Term Loan Credit Agreement provides for a five year $100.0 million term loan to the Company, of which a portion of the proceeds were used to repay the Short-term Loan, and the remaining proceeds are expected to be used for general corporate purposes. The Term Loan contains no financial maintenance covenants and currently bears interest at a rate equal to an adjusted Eurodollar rate plus a margin of 8.00% (at no time will the adjusted Eurodollar rate be deemed to be less than 1.00% per annum). Voluntary prepayments of the Term Loan under the Term Loan Credit Agreement are permitted, subject to the payment of a make-whole premium if such prepayment occurs prior to the first anniversary of the closing date, a premium of 105.0% of the principal amount between the first anniversary and the second anniversary of the closing date and a premium of 103.0% if such prepayment occurs on or after the second anniversary but prior to the third anniversary of the closing date. The Term Loan Credit Agreement requires amortization payments equal to 1.0% of the principal amount of the Term Loan per annum and also requires net cash proceeds of debt issuances, excess cash flow, asset sales and casualty insurance recoveries (in each case, subject to certain exceptions) to either be reinvested in long-term assets used in the Company’s business or be applied as a mandatory prepayment of the Term Loan. Amounts repaid on the Term Loan may not be re-borrowed. The obligations under the Term Loan are secured by substantially all of the assets of the Company and its domestic subsidiaries, including the land, mineral rights and infrastructure at the Kensington,

21
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

Rochester and Wharf mines, as well as a pledge of the shares of certain of the Company's subsidiaries. The Term Loan Credit Agreement contains customary representations and warranties, events of default, and affirmative and negative covenants.
Lines of Credit
At September 30, 2015, San Bartolomé had two outstanding lines of credit. The first line of credit is for $12.0 million bearing interest at 6.0% per annum, maturing June 30, 2018. The second line of credit is for $15.0 million bearing interest at 6.0% per annum, maturing December 29, 2016. Both lines of credit are secured with machinery and equipment. There was an outstanding balance of $9.1 million on the second line of credit at September 30, 2015.
Palmarejo Gold Production Royalty Obligation
On January 21, 2009, Coeur Mexicana entered into a gold production royalty transaction with a subsidiary of Franco-Nevada Corporation under which the subsidiary of Franco-Nevada Corporation purchased a royalty covering 50% of the life of mine gold to be produced from its Palmarejo silver and gold mine in Mexico (excluding production from the recently acquired Paramount properties).
The royalty agreement provides for a minimum obligation to be paid monthly on a total of 400,000 ounces of gold, or 4,167 ounces per month over an initial eight year period. Each monthly payment is an amount equal to the greater of 4,167 ounces of gold or 50% of actual gold production multiplied by the excess of the monthly average market price of gold above $412 per ounce, subject to a 1% annual inflation compounding adjustment. Payments under the royalty agreement are made in cash or gold bullion. The Company paid $10.2 million and $11.4 million in the three months ended and $30.3 million and $38.4 million during the nine months ended September 30, 2015 and 2014, respectively. At September 30, 2015, payments had been made on a total of 354,004 ounces of gold with further payments to be made on an additional 45,996 ounces of gold.     
The Company used an implicit interest rate of 30.5% to discount the original royalty obligation, based on the fair value of the consideration received projected over the expected future cash flows at inception of the obligation. The discounted obligation is accreted to its expected future value over the expected minimum payment period based on the implicit interest rate. The Company recognized accretion expense of $1.6 million and $2.5 million for the three months ended and $5.4 million and $8.6 million for the nine months ended September 30, 2015 and 2014, respectively. At September 30, 2015 and December 31, 2014, the remaining minimum obligation under the royalty agreement was $20.3 million and $34.0 million, respectively.
Interest Expense
Interest expense consists of the following:
 
Three months ended September 30,
 
Nine months ended September 30,
In thousands
2015
 
2014
 
2015
 
2014
3.25% Convertible Senior Notes due 2028
$
6

 
$
43

 
$
49

 
$
130

7.875% Senior Notes due 2021
8,523

 
8,809

 
25,608

 
24,132

Short-term Loan
—

 
—

 
326

 
—

Term Loan due 2020
2,277

 
—

 
2,425

 
—

San Bartolomé Lines of Credit
101

 
—

 
665

 
—

Revolving Credit Facility
—

 
—

 
—

 
179

Loss on Revolving Credit Facility
—

 
—

 
—

 
3,035

Capital lease obligations
229

 
334

 
799

 
726

Other debt obligations
8

 
—

 
8

 
—

Accretion of Palmarejo gold production royalty obligation
1,642

 
2,545

 
5,444

 
8,639

Amortization of debt issuance costs
690

 
415

 
1,604

 
1,333

Accretion of debt premium
(104
)
 
(107
)
 
(313
)
 
(252
)
Capitalized interest
(926
)
 
(423
)
 
(2,670
)
 
(942
)
Total interest expense, net of capitalized interest
$
12,446

 
$
11,616

 
$
33,945

 
$
36,980


22
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)


NOTE 18 - SUPPLEMENTAL GUARANTOR INFORMATION
The following Condensed Consolidating Financial Statements are presented to satisfy disclosure requirements of Rule 3-10 of Regulation S-X resulting from the guarantees by Coeur Alaska, Inc., Coeur Explorations, Inc., Coeur Rochester, Inc., Coeur South America Corp., Wharf Resources (U.S.A.) Inc. and subsidiaries, and Coeur Capital, Inc. (collectively, the “Subsidiary Guarantors”) of the Senior Notes. The following schedules present Condensed Consolidating Financial Statements of (a) Coeur, the parent company; (b) the Subsidiary Guarantors; and (c) certain wholly owned domestic and foreign subsidiaries of the Company (collectively, the “Non-Guarantor Subsidiaries”). Each of the Subsidiary Guarantors is 100% owned by Coeur and the guarantees are full and unconditional. There are no restrictions on the ability of Coeur to obtain funds from its subsidiaries by dividend or loan.







23
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)
THREE MONTHS ENDED SEPTEMBER 30, 2015
In thousands
 
Coeur Mining, Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
Revenue
 
$
—

 
$
93,417

 
$
69,135

 
$
—

 
$
162,552

COSTS AND EXPENSES
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales(1)
 
—

 
68,187

 
52,050

 
—

 
120,237

Amortization
 
495

 
21,083

 
13,919

 
—

 
35,497

General and administrative
 
6,563

 
11

 
120

 
—

 
6,694

Exploration
 
642

 
(96
)
 
1,566

 
—

 
2,112

Pre-development, reclamation, and other
 
887

 
1,476

 
2,575

 
—

 
4,938

Total costs and expenses
 
8,587

 
90,661

 
70,230

 
—

 
169,478

Fair value adjustments, net
 
1,036

 
1,751

 
2,999

 
—

 
5,786

Other, net
 
1,218

 
(436
)
 
(8,649
)
 
(1,026
)
 
(8,893
)
Interest expense, net of capitalized interest
 
(11,198
)
 
(220
)
 
(2,054
)
 
1,026

 
(12,446
)
Total other income (expense), net
 
(8,944
)
 
1,095

 
(7,704
)
 
—

 
(15,553
)
Loss before income and mining taxes
 
(17,531
)
 
3,851

 
(8,799
)
 
—

 
(22,479
)
Income and mining tax (expense) benefit
 
516

 
(1,554
)
 
9,298

 
—

 
8,260

Total loss after income and mining taxes
 
(17,015
)
 
2,297

 
499

 
—

 
(14,219
)
Equity income (loss) in consolidated subsidiaries
 
2,796

 
331

 
—

 
(3,127
)
 
—

NET INCOME (LOSS)
 
$
(14,219
)
 
$
2,628

 
$
499

 
$
(3,127
)
 
$
(14,219
)
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
 
 
 
 
 
 
 
 
 
 
Unrealized gain (loss) on marketable securities, net of tax
 
(931
)
 
(769
)
 
—

 
769

 
(931
)
Reclassification adjustments for impairment of marketable securities
 
483

 
483

 
—

 
(483
)
 
483

Other comprehensive income (loss)
 
(448
)
 
(286
)
 
—

 
286

 
(448
)
COMPREHENSIVE INCOME (LOSS)
 
$
(14,667
)
 
$
2,342

 
$
499

 
$
(2,841
)
 
$
(14,667
)
(1) Excludes amortization.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)
THREE MONTHS ENDED SEPTEMBER 30, 2014
In thousands
 
Coeur Mining, Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
Revenue
 
$
—

 
$
78,468

 
$
92,470

 
$
—

 
$
170,938

COSTS AND EXPENSES
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales(1)
 
—

 
58,386

 
67,524

 
—

 
125,910

Amortization
 
473

 
18,485

 
23,027

 
—

 
41,985

General and administrative
 
8,251

 
2

 
262

 
—

 
8,515

Exploration
 
1,056

 
2,915

 
2,616

 
—

 
6,587

Pre-development, reclamation, and other
 
180

 
115

 
3,949

 
—

 
4,244

Total costs and expenses
 
9,960

 
79,903

 
97,378

 
—

 
187,241

Fair value adjustments, net
 
2,990

 
4,345

 
8,770

 
—

 
16,105

Other, net
 
1,006

 
(1,417
)
 
(165
)
 
(727
)
 
(1,303
)
Interest expense, net of capitalized interest
 
(9,159
)
 
(320
)
 
(2,864
)
 
727

 
(11,616
)
Total other income (expense), net
 
(5,163
)
 
2,608

 
5,741

 
—

 
3,186

Loss before income and mining taxes
 
(15,123
)
 
1,173

 
833

 
—

 
(13,117
)
Income and mining tax (expense) benefit
 
950

 
(210
)
 
15,843

 
—

 
16,583

Total loss after income and mining taxes
 
(14,173
)
 
963

 
16,676

 
—

 
3,466

Equity income (loss) in consolidated subsidiaries
 
17,640

 
181

 
—

 
(17,821
)
 
—

NET INCOME (LOSS)
 
$
3,467

 
$
1,144

 
$
16,676

 
$
(17,821
)
 
$
3,466

OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
 
 
 
 
 
 
 
 
 
 
Unrealized gain (loss) on marketable securities, net of tax
 
(1,087
)
 
(1,071
)
 
—

 
1,072

 
(1,086
)
Reclassification adjustments for impairment of marketable securities
 
669

 
669

 
—

 
(669
)
 
669

Reclassification adjustments for realized loss on sale of marketable securities
 
221

 
221

 
—

 
(221
)
 
221

Other comprehensive income (loss)
 
(197
)
 
(181
)
 
—

 
182

 
(196
)
COMPREHENSIVE INCOME (LOSS)
 
$
3,270

 
$
963

 
$
16,676

 
$
(17,639
)
 
$
3,270

(1) Excludes amortization.


24
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
THREE MONTHS ENDED SEPTEMBER 30, 2015
In thousands
 
Coeur Mining, Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Cash provided by (used in) operating activities
 
$
(20,565
)
 
$
28,924

 
$
31,005

 
$
(3,127
)
 
36,237

CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
(94
)
 
(11,468
)
 
(12,299
)
 
—

 
(23,861
)
Purchase of short-term investments and equity securities
 
(3
)
 
—

 
—

 
—

 
(3
)
Sales and maturities of short-term investments
 
—

 
60

 
—

 
—

 
60

Acquisitions, net of cash acquired
 
(122
)
 
—

 
—

 
—

 
(122
)
Other
 
(1
)
 
44

 
297

 
—

 
340

Investments in consolidated subsidiaries
 
1,206

 
3,666

 
1

 
(4,873
)
 
—

CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
 
986

 
(7,698
)
 
(12,001
)
 
(4,873
)
 
(23,586
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Payments on debt, capital leases, and associated costs
 
(711
)
 
(1,889
)
 
(18
)
 
—

 
(2,618
)
Gold production royalty payments
 
—

 
—

 
(10,159
)
 
—

 
(10,159
)
Net intercompany financing activity
 
9,333

 
(24,940
)
 
7,607

 
8,000

 
—

Other
 
(34
)
 
—

 
—

 
—

 
(34
)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
 
8,588

 
(26,829
)
 
(2,570
)
 
8,000

 
(12,811
)
NET CHANGE IN CASH AND CASH EQUIVALENTS
 
(10,991
)
 
(5,603
)
 
16,434

 
—

 
(160
)
Cash and cash equivalents at beginning of period
 
124,695

 
27,259

 
53,914

 
—

 
205,868

Cash and cash equivalents at end of period
 
$
113,704

 
$
21,656

 
$
70,348

 
$
—

 
$
205,708


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
THREE MONTHS ENDED SEPTEMBER 30, 2014
In thousands
 
Coeur Mining, Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Cash provided by (used in) operating activities
 
$
(7,802
)
 
$
26,470

 
$
30,419

 
$
(17,821
)
 
$
31,266

CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
(278
)
 
(7,805
)
 
(8,701
)
 
—

 
(16,784
)
Purchase of short-term investments and equity securities
 
(2,089
)
 
—

 
—

 
—

 
(2,089
)
Sales and maturities of short-term investments
 
—

 
2,842

 
14

 
—

 
2,856

Acquisitions, net of cash acquired
 
(12,005
)
 
(1,824
)
 
—

 
—

 
(13,829
)
Other
 
—

 
—

 
74

 
—

 
74

Investments in consolidated subsidiaries
 
(11,641
)
 
(180
)
 
—

 
11,821

 
—

CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
 
(26,013
)
 
(6,967
)
 
(8,613
)
 
11,821

 
(29,772
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Payments on debt, capital leases, and associated costs
 
(12,398
)
 
(666
)
 
(210
)
 
—

 
(13,274
)
Gold production royalty payments
 
—

 
—

 
(11,351
)
 
—

 
(11,351
)
Net intercompany financing activity
 
12,012

 
(14,657
)
 
(3,355
)
 
6,000

 
—

Other
 
(77
)
 
—

 
—

 
—

 
(77
)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
 
(463
)
 
(15,323
)
 
(14,916
)
 
6,000

 
(24,702
)
NET CHANGE IN CASH AND CASH EQUIVALENTS
 
(34,278
)
 
4,180

 
6,890

 
—

 
(23,208
)
Cash and cash equivalents at beginning of period
 
211,664

 
899

 
56,570

 
—

 
269,133

Cash and cash equivalents at end of period
 
$
177,386

 
$
5,079

 
$
63,460

 
$
—

 
$
245,925


25
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)
NINE MONTHS ENDED SEPTEMBER 30, 2015
In thousands
 
Coeur Mining, Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
Revenue
 
$
—

 
$
281,724

 
$
200,046

 
$
—

 
$
481,770

COSTS AND EXPENSES
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales(1)
 
—

 
197,475

 
156,922

 
—

 
354,397

Amortization
 
1,493

 
61,422

 
44,645

 
—

 
107,560

General and administrative
 
23,690

 
25

 
264

 
—

 
23,979

Exploration
 
1,796

 
3,370

 
4,791

 
—

 
9,957

Pre-development, reclamation, and other
 
3,437

 
4,354

 
6,177

 
—

 
13,968

Total costs and expenses
 
30,416

 
266,646

 
212,799

 
—

 
509,861

Fair value adjustments, net
 
1,178

 
596

 
1,883

 
—

 
3,657

Other, net
 
3,108

 
(2,892
)
 
(11,681
)
 
(2,792
)
 
(14,257
)
Interest expense, net of capitalized interest
 
(29,389
)
 
(771
)
 
(6,577
)
 
2,792

 
(33,945
)
Total other income (expense), net
 
(25,103
)
 
(3,067
)
 
(16,375
)
 
—

 
(44,545
)
Loss before income and mining taxes
 
(55,519
)
 
12,011

 
(29,128
)
 
—

 
(72,636
)
Income and mining tax (expense) benefit
 
4,011

 
(2,836
)
 
7,276

 
—

 
8,451

Total loss after income and mining taxes
 
(51,508
)
 
9,175

 
(21,852
)
 
—

 
(64,185
)
Equity income (loss) in consolidated subsidiaries
 
(12,677
)
 
491

 
—

 
12,186

 
—

NET INCOME (LOSS)
 
$
(64,185
)
 
$
9,666

 
$
(21,852
)
 
$
12,186

 
$
(64,185
)
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
 
 
 
 
 
 
 
 
 
 
Unrealized gain (loss) on marketable securities, net of tax
 
(3,744
)
 
(2,751
)
 
—

 
2,751

 
(3,744
)
Reclassification adjustments for impairment of marketable securities
 
2,028

 
2,028

 
—

 
(2,028
)
 
2,028

Reclassification adjustments for realized loss on sale of marketable securities
 
904

 
904

 
—

 
(904
)
 
904

Other comprehensive income (loss)
 
(812
)
 
181

 
—

 
(181
)
 
(812
)
COMPREHENSIVE INCOME (LOSS)
 
$
(64,997
)
 
$
9,847

 
$
(21,852
)
 
$
12,005

 
$
(64,997
)
(1) Excludes amortization.

CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME (LOSS)
NINE MONTHS ENDED SEPTEMBER 30, 2014
In thousands
 
Coeur Mining, Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
Revenue
 
$
—

 
$
199,716

 
$
295,417

 
$
—

 
$
495,133

COSTS AND EXPENSES
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales(1)
 
—

 
149,223

 
202,269

 
—

 
351,492

Amortization
 
1,298

 
50,565

 
71,971

 
—

 
123,834

General and administrative
 
31,019

 
5

 
785

 
—

 
31,809

Exploration
 
2,592

 
7,819

 
5,546

 
—

 
15,957

Pre-development, reclamation, and other
 
532

 
2,958

 
16,529

 
—

 
20,019

Total costs and expenses
 
35,441

 
210,570

 
297,100

 
—

 
543,111

OTHER INCOME (EXPENSE), NET
 
 
 
 
 
.
 
 
 
 
Fair value adjustments, net
 
1,008

 
1,835

 
(6,454
)
 
—

 
(3,611
)
Other, net
 
2,921

 
(4,881
)
 
(2,886
)
 
(2,081
)
 
(6,927
)
Interest expense, net of capitalized interest
 
(28,557
)
 
(660
)
 
(9,844
)
 
2,081

 
(36,980
)
Total other income (expense), net
 
(24,628
)
 
(3,706
)
 
(19,184
)
 
—

 
(47,518
)
Loss before income and mining taxes
 
(60,069
)
 
(14,560
)
 
(20,867
)
 
—

 
(95,496
)
Income and mining tax (expense) benefit
 
1,076

 
(629
)
 
18,203

 
—

 
18,650

Total loss after income and mining taxes
 
(58,993
)
 
(15,189
)
 
(2,664
)
 
—

 
(76,846
)
Equity income (loss) in consolidated subsidiaries
 
(17,853
)
 
480

 
—

 
17,373

 
—

NET INCOME (LOSS)
 
$
(76,846
)
 
$
(14,709
)
 
$
(2,664
)
 
$
17,373

 
$
(76,846
)
OTHER COMPREHENSIVE INCOME (LOSS), net of tax:
 
 
 
 
 
 
 
 
 
 
Unrealized gain (loss) on marketable securities, net of tax
 
(1,487
)
 
(1,451
)
 
—

 
1,451

 
(1,487
)
Reclassification adjustments for impairment of marketable securities
 
2,828

 
2,828

 
—

 
(2,828
)
 
2,828

Reclassification adjustments for realized loss on sale of marketable securities
 
238

 
238

 
—

 
(238
)
 
238

Other comprehensive income (loss)
 
1,579

 
1,615

 
—

 
(1,615
)
 
1,579

COMPREHENSIVE INCOME (LOSS)
 
$
(75,267
)
 
$
(13,094
)
 
$
(2,664
)
 
$
15,758

 
$
(75,267
)
(1) Excludes amortization.

26
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2015
In thousands
 
Coeur Mining, Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Cash provided by (used in) operating activities
 
$
(73,276
)
 
$
80,313

 
$
49,905

 
$
12,186

 
69,128

CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
(181
)
 
(30,791
)
 
(34,186
)
 
—

 
(65,158
)
Purchase of short-term investments and equity securities
 
(1,876
)
 
—

 
—

 
—

 
(1,876
)
Sales and maturities of short-term investments
 
12

 
446

 
71

 
—

 
529

Acquisitions, net of cash acquired
 
(111,290
)
 
—

 
—

 
—

 
(111,290
)
Other
 
(1,767
)
 
212

 
217

 
—

 
(1,338
)
Investments in consolidated subsidiaries
 
(14,477
)
 
4,490

 
117

 
9,870

 
—

CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
 
(129,579
)
 
(25,643
)
 
(33,781
)
 
9,870

 
(179,133
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Issuance of notes and bank borrowings
 
150,000

 
—

 
3,500

 
—

 
153,500

Payments on debt, capital leases, and associated costs
 
(62,579
)
 
(5,592
)
 
(9,667
)
 
—

 
(77,838
)
Gold production royalty payments
 
—

 
—

 
(30,281
)
 
—

 
(30,281
)
Net intercompany financing activity
 
19,306

 
(33,203
)
 
35,953

 
(22,056
)
 
—

Other
 
(529
)
 
—

 
—

 
—

 
(529
)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
 
106,198

 
(38,795
)
 
(495
)
 
(22,056
)
 
44,852

NET CHANGE IN CASH AND CASH EQUIVALENTS
 
(96,657
)
 
15,875

 
15,629

 
—

 
(65,153
)
Cash and cash equivalents at beginning of period
 
210,361

 
5,781

 
54,719

 
—

 
270,861

Cash and cash equivalents at end of period
 
$
113,704

 
$
21,656

 
$
70,348

 
$
—

 
$
205,708


CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2014
In thousands
 
Coeur Mining, Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Cash provided by (used in) operating activities
 
$
(80,218
)
 
$
35,612

 
$
79,670

 
$
17,373

 
$
52,437

CASH FLOWS FROM INVESTING ACTIVITIES
 
 
 
 
 
 
 
 
 
 
Capital expenditures
 
(1,329
)
 
(21,420
)
 
(21,327
)
 
—

 
(44,076
)
Purchase of short-term investments and equity securities
 
(49,994
)
 
(429
)
 
—

 
—

 
(50,423
)
Sales and maturities of short-term investments
 
—

 
3,399

 
14

 
—

 
3,413

Acquisitions, net of cash acquired
 
(12,004
)
 
(4,075
)
 
—

 
—

 
(16,079
)
Other
 
—

 
4

 
57

 
—

 
61

Investments in consolidated subsidiaries
 
67,353

 
(480
)
 
—

 
(66,873
)
 
—

CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
 
4,026

 
(23,001
)
 
(21,256
)
 
(66,873
)
 
(107,104
)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
 
 
 
 
 
 
 
 
Issuance of notes and bank borrowings
 
153,000

 
—

 
—

 
—

 
153,000

Payments on debt, capital leases, and associated costs
 
(15,997
)
 
(3,209
)
 
(1,030
)
 
—

 
(20,236
)
Gold production royalty payments
 
—

 
—

 
(38,379
)
 
—

 
(38,379
)
Net intercompany financing activity
 
(20,018
)
 
(5,314
)
 
(24,168
)
 
49,500

 
—

Other
 
(483
)
 
—

 
—

 
—

 
(483
)
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
 
116,502

 
(8,523
)
 
(63,577
)
 
49,500

 
93,902

NET CHANGE IN CASH AND CASH EQUIVALENTS
 
40,310

 
4,088

 
(5,163
)
 
—

 
39,235

Cash and cash equivalents at beginning of period
 
137,076

 
991

 
68,623

 
—

 
206,690

Cash and cash equivalents at end of period
 
$
177,386

 
$
5,079

 
$
63,460

 
$
—

 
$
245,925



27
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

CONDENSED CONSOLIDATING BALANCE SHEET
SEPTEMBER 30, 2015
In thousands
 
Coeur Mining, Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
CURRENT ASSETS
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
113,704

 
$
21,656

 
$
70,348

 
$
—

 
$
205,708

Receivables
 
91

 
11,472

 
82,036

 
—

 
93,599

Ore on leach pads
 
—

 
68,695

 
—

 
—

 
68,695

Inventory
 
—

 
45,123

 
52,986

 
—

 
98,109

Deferred tax assets
 
393

 
—

 
6,804

 
—

 
7,197

Prepaid expenses and other
 
2,473

 
2,538

 
13,420

 
—

 
18,431

 
 
116,661

 
149,484

 
225,594

 
—

 
491,739

NON-CURRENT ASSETS
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net
 
4,844

 
133,967

 
122,232

 
—

 
261,043

Mining properties, net
 
—

 
218,676

 
632,914

 
—

 
851,590

Ore on leach pads
 
—

 
39,685

 
—

 
—

 
39,685

Restricted assets
 
2,669

 
381

 
4,953

 
—

 
8,003

Equity securities
 
476

 
2,737

 
—

 
—

 
3,213

Receivables
 
—

 
—

 
27,507

 
—

 
27,507

Deferred tax assets
 
33,807

 
—

 
30,552

 
—

 
64,359

Net investment in subsidiaries
 
455,689

 
42,106

 
—

 
(497,795
)
 
—

Other
 
53,600

 
9,412

 
2,124

 
(53,602
)
 
11,534

TOTAL ASSETS
 
$
667,746

 
$
596,448

 
$
1,045,876

 
$
(551,397
)
 
$
1,758,673

 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
1,359

 
$
21,793

 
$
26,538

 
$
—

 
$
49,690

Accrued liabilities and other
 
9,976

 
15,868

 
12,485

 
—

 
38,329

Debt
 
1,000

 
8,978

 
1,797

 
—

 
11,775

Royalty obligations
 
—

 
4,158

 
29,282

 
—

 
33,440

Reclamation
 
—

 
3,957

 
504

 
(1,151
)
 
3,310

Deferred tax liabilities
 
7,142

 
848

 
88

 
—

 
8,078

 
 
19,477

 
55,602

 
70,694

 
(1,151
)
 
144,622

NON-CURRENT LIABILITIES
 
 
 
 
 
 
 
 
 
 
Debt
 
520,801

 
5,712

 
61,300

 
(53,602
)
 
534,211

Royalty obligations
 
—

 
6,781

 
—

 
—

 
6,781

Reclamation
 
—

 
64,786

 
22,072

 
1,151

 
88,009

Deferred tax liabilities
 
53,324

 
12,643

 
156,842

 
—

 
222,809

Other long-term liabilities
 
3,247

 
3,752

 
40,857

 
—

 
47,856

Intercompany payable (receivable)
 
(643,488
)
 
397,419

 
246,069

 
—

 
—

 
 
(66,116
)
 
491,093

 
527,140

 
(52,451
)
 
899,666

STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
Common stock
 
1,370

 
250

 
129,991

 
(130,241
)
 
1,370

Additional paid-in capital
 
2,983,423

 
179,553

 
1,896,047

 
(2,075,600
)
 
2,983,423

Accumulated deficit
 
(2,266,788
)
 
(127,424
)
 
(1,577,996
)
 
1,705,420

 
(2,266,788
)
Accumulated other comprehensive income (loss)
 
(3,620
)
 
(2,626
)
 
—

 
2,626

 
(3,620
)
 
 
714,385

 
49,753

 
448,042

 
(497,795
)
 
714,385

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
667,746

 
$
596,448

 
$
1,045,876

 
$
(551,397
)
 
$
1,758,673



28
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2014

In thousands
 
Coeur Mining, Inc.
 
Guarantor Subsidiaries
 
Non-Guarantor Subsidiaries
 
Eliminations
 
Consolidated
ASSETS
 
 
 
 
 
 
 
 
CURRENT ASSETS
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
210,361

 
$
5,781

 
$
54,719

 
$
—

 
$
270,861

Receivables
 
87

 
11,151

 
105,683

 
—

 
116,921

Ore on leach pads
 
—

 
48,204

 
—

 
—

 
48,204

Inventory
 
—

 
54,983

 
59,948

 
—

 
114,931

Deferred tax assets
 
393

 
—

 
6,971

 
—

 
7,364

Prepaid expenses and other
 
6,349

 
4,557

 
4,617

 
—

 
15,523

 
 
217,190

 
124,676

 
231,938

 
—

 
573,804

NON-CURRENT ASSETS
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment, net
 
6,155

 
107,084

 
114,672

 
—

 
227,911

Mining properties, net
 
12,004

 
159,124

 
330,064

 
—

 
501,192

Ore on leach pads
 
—

 
37,889

 
—

 
—

 
37,889

Restricted assets
 
897

 
50

 
6,090

 
—

 
7,037

Equity securities
 
—

 
5,982

 
—

 
—

 
5,982

Receivables
 
—

 
—

 
21,686

 
—

 
21,686

Deferred tax assets
 
30,419

 
—

 
29,732

 
—

 
60,151

Net investment in subsidiaries
 
128,913

 
45,615

 
—

 
(174,528
)
 
—

Other
 
50,813

 
5,522

 
4,394

 
(50,814
)
 
9,915

TOTAL ASSETS
 
$
446,391

 
$
485,942

 
$
738,576

 
$
(225,342
)
 
$
1,445,567

 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
 
 
 
 
 
 
Accounts payable
 
$
3,414

 
$
13,391

 
$
32,247

 
$
—

 
$
49,052

Accrued liabilities and other
 
22,588

 
11,207

 
17,718

 
—

 
51,513

Debt
 
5,334

 
7,476

 
4,688

 
—

 
17,498

Royalty obligations
 
—

 
5,747

 
37,931

 
—

 
43,678

Reclamation
 
—

 
3,401

 
1,621

 
(1,151
)
 
3,871

Deferred tax liabilities
 
7,142

 
848

 
88

 
—

 
8,078

 
 
38,478

 
42,070

 
94,293

 
(1,151
)
 
173,690

NON-CURRENT LIABILITIES
 
 
 
 
 
 
 
 
 
 
Debt
 
427,604

 
12,806

 
61,452

 
(50,814
)
 
451,048

Royalty obligations
 
—

 
9,623

 
18,028

 
—

 
27,651

Reclamation
 
—

 
46,792

 
19,000

 
1,151

 
66,943

Deferred tax liabilities
 
53,201

 
2,963

 
54,842

 
—

 
111,006

Other long-term liabilities
 
2,582

 
469

 
26,860

 
—

 
29,911

Intercompany payable (receivable)
 
(660,792
)
 
427,156

 
233,636

 
—

 
—

 
 
(177,405
)
 
499,809

 
413,818

 
(49,663
)
 
686,559

STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
Common stock
 
1,034

 
250

 
128,299

 
(128,549
)
 
1,034

Additional paid-in capital
 
2,789,695

 
79,712

 
1,682,830

 
(1,762,542
)
 
2,789,695

Accumulated deficit
 
(2,202,603
)
 
(133,091
)
 
(1,580,664
)
 
1,713,755

 
(2,202,603
)
Accumulated other comprehensive income (loss)
 
(2,808
)
 
(2,808
)
 
—

 
2,808

 
(2,808
)
 
 
585,318

 
(55,937
)
 
230,465

 
(174,528
)
 
585,318

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
 
$
446,391

 
$
485,942

 
$
738,576

 
$
(225,342
)
 
$
1,445,567



29
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 19 – COMMITMENTS AND CONTINGENCIES
Labor Union Contracts
The Company maintains a labor agreement with Sindicato de Trabajadores Mineros de la Empresa Manquiri S.A. at the San Bartolomé mine in Bolivia. The San Bartolomé mine labor agreement, which became effective January 28, 2010, is currently active and does not have a fixed term. At September 30, 2015, approximately 11% of the Company’s global labor force was covered by this collective bargaining agreement. The Company cannot predict whether this agreement will be renewed on similar terms or at all, whether future labor disruptions will occur or, if disruptions do occur, how long they will last.
Rochester Production Royalties
The Company acquired the Rochester property from ASARCO, a subsidiary of Grupo Mexico S.A. de C.V., in 1983. The Company is obligated to pay a NSR royalty interest to ASARCO when the market price of silver equals or exceeds $24.50 per ounce up to a maximum rate of 5% with the condition that Rochester achieves positive cash flow for the applicable year. If cash flow at Rochester is negative in any calendar year, the maximum royalty payable is $250,000. Royalty expense was nil for the three and nine months ended September 30, 2015 and 2014, respectively.
Commencing January 1, 2014, Coeur Rochester is obligated to pay a 3.4% net smelter returns royalty on up to 39.4 million silver equivalent ounces produced and sold from a portion of the Rochester mine, payable on a quarterly basis. For each calendar quarter, the royalty will be payable on the actual sales prices received (exclusive of gains or losses associated with trading activities), less refining costs, of gold and silver produced and sold from the applicable portions of the Rochester mine. Changes in the Company's mine plan and silver and gold prices result in the recognition of mark-to-market gains or losses in Fair value adjustments, net. At September 30, 2015, a total of 26.2 million silver equivalent ounces remain outstanding under the obligation.
Palmarejo Gold Production Royalty and Gold Stream
On January 21, 2009, Coeur Mexicana entered into a gold production royalty agreement with a subsidiary of Franco-Nevada Corporation under which the subsidiary of Franco-Nevada Corporation purchased a royalty covering 50% of the life of mine gold to be produced from its Palmarejo silver and gold mine in Mexico (excluding production from the recently acquired Paramount properties). The royalty agreement provides for a minimum obligation of 4,167 ounces per month over an initial eight-year period for a total of 400,000 ounces of gold.
On October 2, 2014, Coeur Mexicana terminated the Palmarejo gold production royalty in exchange for a termination payment of $2.0 million, effective upon completion of the minimum ounce delivery requirement. Subsequently, Coeur Mexicana entered into a gold stream agreement with a subsidiary of Franco-Nevada Corporation whereby Coeur Mexicana will sell 50% of Palmarejo gold production (excluding production from the recently acquired Paramount properties) upon completion of the gold production royalty minimum ounce delivery requirement for the lesser of $800 or spot price per ounce.  Under the gold stream agreement, Coeur Mexicana will receive a $22.0 million deposit toward future deliveries under the gold stream agreement, payable in five quarterly payments. Payments of $4.0 million and $14.0 million were received in the three and nine months ended September 30, 2015, respectively.
Sites Related to Callahan Mining Corporation
In 1991, the Company acquired all of the outstanding common stock of Callahan Mining Corporation. The Company has received requests for information or notices of potential liability from state or federal agencies with regard to Callahan's operations at sites in Maine, Colorado and Washington. The Company did not make any decisions with respect to generation, transport or disposal of hazardous waste at these sites. Therefore, the Company believes that it is not liable for any potential cleanup costs either directly as an operator or indirectly as a parent. The Company anticipates that further agency interaction may occur with respect to these sites.

Callahan operated a mine and mill in Brooksville, Maine from 1968 until 1972 and subsequently disposed of the property. In 2000, the U.S. Environmental Protection Agency, or EPA, made a formal request to the Company for information regarding the site. The site was placed on the National Priorities List on September 5, 2002, and the Maine Department of Transportation, a partial owner of the property, signed a consent order in 2005. In January 2009, the EPA and the State of Maine made additional formal requests to the Company for information relating to the site, to which the Company responded. The first phase of cleanup at the site began in April 2011.
    
The Van Stone Mine in Stevens County, Washington consists of several parcels of land and was mined from 1926 until 1993 by multiple owners. Callahan sold its parcel in 1990. In February 2010, the State of Washington Department of Ecology notified Callahan that it, among others, is a potentially liable person (PLP) under Washington law.


30
Coeur Mining, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

Under lease and option agreements with several owners, Callahan was involved with the Akron Mine located in Gunnison County, Colorado from 1937-1960. The United States Forest Service (“USFS”) made formal requests for information to Callahan regarding the site in December 2003, February 2007, March 2013, and November 2013. Callahan timely responded to each request. In August 2014, Callahan received a notice of potential CERCLA liability from the USFS regarding environmental contamination at the Akron Mine. Callahan and the USFS are currently in discussions regarding this matter.
Bolivian Temporary Restriction on Mining above 4,400 Meters
On October 14, 2009, the Bolivian state-owned mining organization, COMIBOL, announced by resolution that it was temporarily suspending mining activities above the elevation of 4,400 meters above sea level while stability studies of Cerro Rico mountain are undertaken. The referenced studies have been completed and officially submitted to the Bolivian mining technical authorities. The Company holds rights to mine above this elevation under valid contracts with COMIBOL as well as under authorized contracts with local mining cooperatives. The Company temporarily adjusted its mine plan to confine mining activities to the ore deposits below 4,400 meters above sea level and timely notified COMIBOL of the need to lift the restriction. The Cooperative Reserva Fiscal, with which the Company has one of those contracts, subsequently interpreted the COMIBOL resolution and determined that the Huacajchi deposit was not covered by such resolution. In March 2010, the Cooperative Reserva Fiscal notified COMIBOL that, based on its interpretation, it was resuming mining of high grade material above the 4,400 meter level in the Huacajchi deposit. In December 2011, the Cooperative Reserva Fiscal sent a similar notification to COMIBOL with respect to a further area above the 4,400 meter level known as Huacajchi Sur. Based on these notifications and on the absence of any objection from COMIBOL, the Company resumed limited mining operations at the San Bartolomé mine on the Huacajchi deposit and Huacajchi Sur. Mining in other areas above the 4,400 meter level continues to be suspended.
The suspension may reduce production until the Company is able to resume mining above 4,400 meters. It is uncertain at this time how long the suspension will remain in place, although the COMIBOL resolution explicitly provides for the conclusion of the stability studies as the milestone for lifting the restriction and the Company has engaged with COMIBOL to find the appropriate time to resume mining activities. If COMIBOL decides to restrict access above the 4,400 meter level on a permanent basis, the Company may need to write down the carrying value of the asset. It is also uncertain if any new mining or investment policies or shifts in political attitude may affect mining in Bolivia.
Paramount Transaction Litigation
Since the announcement of the Company’s acquisition of Paramount, six lawsuits have been filed related to the merger agreement in the Court of Chancery of the State of Delaware.  The lawsuits assert a variety of causes of action concerning the transaction, including claims against Paramount’s directors for alleged breaches of fiduciary duty in connection with the proposed transaction, and claims against the Company for allegedly aiding and abetting such breaches of fiduciary duty.  On February 18, 2015, the court entered an order consolidating the lawsuits and providing that the consolidated case shall be captioned In re Paramount Gold and Silver Corp. Stockholders Litigation, Consolidated C.A. No. 10499-VCN. Although the Company completed the acquisition of Paramount on April 17, 2015, the consolidated lawsuits remain pending. The Company cannot predict the outcome of these lawsuits, nor can the Company predict the amount of time and expense that will be required to resolve these lawsuits. The Company intends to defend vigorously against these consolidated actions.
NOTE 20 – SUBSEQUENT EVENTS
On November 2, 2015, the Company and certain of the Term Loan lenders entered into a Consent under Credit Agreement.
On November 2, 2015, the Company entered into a privately-negotiated agreement to exchange approximately $54.0 million aggregate principal amount of its Senior Notes for an estimated 14.4 million shares, but no more than 14.7 million shares, of its common stock.

31

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion provides information that management believes is relevant to an assessment and understanding of the consolidated financial condition and results of operations of Coeur Mining, Inc. and its subsidiaries (collectively "the Company", "our", or "we"). We use certain non-GAAP financial performance measures in our MD&A such as costs applicable to sales, all-in sustaining costs, and adjusted net income (loss). For a detailed description of each of these non-GAAP measures, please see "Non-GAAP Financial Performance Measures" at the end of this item. We believe it is important to read this item in conjunction with our interim unaudited Condensed Consolidated Financial Statements and the notes thereto included in this quarterly report and our Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (the "2014 10-K"), as well as other information we file with the Securities and Exchange Commission.
Overview
We are a large silver producer with significant gold production from mines located in the United States, Mexico, and Bolivia; exploration projects in Mexico and Argentina; and streaming and royalty interests in Australia, Mexico, Ecuador, Chile, and New Zealand. The Palmarejo, San Bartolomé, Kensington, Rochester, and Wharf mines, each of which is operated by the Company, and Coeur Capital, primarily comprised of the Endeavor silver stream, constitute our principal sources of revenue. The Company also owns other precious metal royalties.
Our strategy is to discover, acquire, develop and operate low-cost silver and gold mines and acquire precious metal streams and royalty interests that together produce long-term cash flow, provide opportunities for growth through continued exploration, and generate superior and sustainable returns for stockholders. Management focuses on maximizing net cash flow through identifying and implementing revenue enhancement opportunities, reducing operating and non-operating costs, consistent capital discipline, and efficient management of working capital.
Third Quarter Highlights
•
Metal sales of $160.9 million and royalty revenue of $1.6 million
•
Production of 9.0 million silver equivalent ounces, consisting of 3.8 million silver ounces and 85,769 gold ounces
•
Costs applicable to sales were $12.22 per silver equivalent ounce ($11.14 per silver equivalent ounce using average realized price equivalency) and $808 per gold equivalent ounce (see "Non-GAAP Financial Performance Measures")
•
All-in sustaining costs were $15.41 per silver equivalent ounce ($13.35 per silver equivalent ounce using average realized price equivalency) (see "Non-GAAP Financial Performance Measures")
•
Raised 2015 production guidance and lowered 2015 cost guidance
•
General and administrative expenses reduced to $6.7 million
•
Adjusted net loss of $21.8 million or $0.16 per share (see "Non-GAAP Financial Performance Measures")
•
Capital expenditures of $23.9 million, including $4.1 million of development capital at Guadalupe and $5.3 million for tunnel development to the high-grade Independencia underground mine at Palmarejo
•
Cash and cash equivalents of $205.7 million
Consolidated Performance
Net loss was $14.2 million for the three months ended September 30, 2015 compared to Net income of $3.5 million for the three months ended September 30, 2014.  The Net loss in the three months ended September 30, 2015 is primarily due to lower silver ounces sold, lower average realized silver and gold prices and less favorable fair value adjustments, partially offset by lower costs applicable to sales per silver and gold ounce, higher gold ounces sold, and lower exploration costs.
The Company produced 3.8 million ounces of silver and 85,769 ounces of gold in the three months ended September 30, 2015, compared to 4.3 million ounces of silver and 64,989 ounces of gold in the three months ended September 30, 2014. Silver production decreased due to lower throughput at Palmarejo and San Bartolomé, partially offset by higher grade and tons placed at Rochester. Gold production increased in the three months ended September 30, 2015 due to the acquisition of Wharf and higher throughput at Kensington.
Costs applicable to sales were $12.22 per silver equivalent ounce and $808 per gold equivalent ounce in the three months ended September 30, 2015, compared to $14.71 per silver equivalent ounce and $937 per gold equivalent ounce in the three months ended September 30, 2014. Costs applicable to sales per silver equivalent ounce decreased in the three months ended September 30, 2015 due to lower unit costs at Palmarejo and Rochester. Costs applicable to sales per gold equivalent ounce decreased in the three months ended September 30, 2015 due to lower unit costs at Kensington and the addition of Wharf.

32

Net loss was $64.2 million for the nine months ended September 30, 2015 compared to Net loss of $76.8 million for the nine months ended September 30, 2014.  The lower Net loss in the nine months ended September 30, 2015 is primarily due to higher gold ounces sold, lower costs applicable to sales per silver and gold ounce, lower general and administrative expenses, lower pre-development expenses related to La Preciosa, and favorable fair value adjustments, partially offset by lower silver ounces sold and lower average realized silver and gold prices.
The Company produced 11.9 million ounces of silver and 236,358 ounces of gold in the nine months ended September 30, 2015, compared to 12.9 million ounces of silver and 184,850 ounces of gold in the nine months ended September 30, 2014. Silver production decreased due to lower throughput at Palmarejo and San Bartolomé, partially offset by higher grade and tons placed at Rochester. Gold production increased in the nine months ended September 30, 2015 due to the acquisition of Wharf and higher throughput at Kensington.
Costs applicable to sales were $13.11 per silver equivalent ounce and $810 per gold equivalent ounce in the nine months ended September 30, 2015, compared to $14.10 per silver equivalent ounce and $977 per gold ounce in the nine months ended September 30, 2014. Costs applicable to sales per silver equivalent ounce decreased in the nine months ended September 30, 2015 due to lower unit costs at Rochester and Palmarejo. Costs applicable to sales per gold equivalent ounce decreased in the nine months ended September 30, 2015 due to lower unit costs at Kensington and the addition of Wharf.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2015
 
2014
 
2015
 
2014
Silver ounces produced
3,826,439

 
4,338,484

 
11,928,961

 
12,876,643

Gold ounces produced
85,769

 
64,989

 
236,358

 
184,850

Silver equivalent ounces produced(1)
8,972,579

 
8,237,824

 
26,110,441

 
23,967,643

Silver ounces sold
4,045,357

 
4,251,904

 
12,142,892

 
12,716,919

Gold ounces sold
91,118

 
69,541

 
243,851

 
189,869

Silver equivalent ounces sold(1)
9,512,459

 
8,424,364

 
26,773,958

 
24,109,059

Average realized price per silver ounce
$
14.66

 
$
19.46

 
$
15.89

 
$
19.76

Average realized price per gold ounce
$
1,116

 
$
1,260

 
$
1,162

 
$
1,272

Costs applicable to sales per silver equivalent ounce(1)(3)
$
12.22

 
$
14.71

 
$
13.11

 
$
14.10

Costs applicable to sales per realized silver equivalent ounce(2)(3)
$
11.14

 
$
14.35

 
$
12.22

 
$
13.77

Costs applicable to sales per gold equivalent ounce(1)(3)
$
808

 
$
937

 
$
810

 
$
977

All-in sustaining costs per silver equivalent ounce(1)(3)
$
15.41

 
$
18.86

 
$
16.50

 
$
19.33

All-in sustaining costs per realized silver equivalent ounce(2)(3)
$
13.35

 
$
18.14

 
$
14.74

 
$
18.68

(1)
Equivalent ounces calculated using a 60:1 silver to gold ratio.
(2)
Equivalent ounces calculated using average realized prices.
(3)
See "Non-GAAP Financial Performance Measures."

2015 Outlook Update

For 2015, the Company raised its production expectation to 33.7 - 36.4 million silver equivalent ounces, consisting of 15.2 - 16.1 million silver ounces and 309,000 - 338,000 gold ounces, compared to 2015 original guidance of 31.8 - 34.8 million silver equivalent ounces or 14.8 -16.0 million ounces of silver and 284,000 - 313,000 ounces of gold.  We now expect lower 2015 all-in sustaining costs of $16.50 - $17.00 per silver equivalent ounce compared to original 2015 guidance of $17.50 - $18.50 per silver equivalent ounce.  Capital spending guidance is expected to be $95 - $105 million compared to original 2015 guidance of $90 - $105 million.  General and administrative expense guidance, including share-based compensation, is expected to be $33 - $35 million, compared to original 2015 guidance of $36 - $39 million.  Exploration expense is expected to be $13 - $16 million compared to original 2015 guidance of $10 - $12 million.
Consolidated Financial Results

Three Months Ended September 30, 2015 compared to Three Months Ended September 30, 2014
Revenue
Metal sales decreased $8.4 million, as lower average realized silver and gold prices and lower silver ounces sold were partially offset by higher gold ounces sold. The Company realized average silver and gold prices of $14.66 per ounce and $1,116

33

per ounce, respectively, compared with average realized prices of $19.46 per ounce and $1,260 per ounce, respectively. The Company sold 4.0 million silver ounces and 91,118 gold ounces, compared to sales of 4.3 million silver ounces and 69,541 gold ounces. Silver contributed 37% of sales and gold contributed 63%, compared to 49% of sales from silver and 51% from gold. Royalty revenue increased $1.0 million, primarily due to commencement of production at the Correnso mine in New Zealand.
Costs Applicable to Sales
Costs applicable to sales decreased $5.7 million, primarily due to lower unit costs at Palmarejo, partially offset by higher gold ounces sold. For a complete discussion of costs applicable to sales, see Results of Operations below.
Amortization
Amortization decreased by $6.5 million, or 15.5%, due to lower amortizable mineral interests and mining equipment, partially offset by the Wharf acquisition.
Expenses
General and administrative expenses decreased $1.8 million, or 21.4%, primarily due to lower compensation and professional services costs.
Exploration expense decreased $4.5 million, or 67.9%, due to lower spending at Kensington and Palmarejo.
Pre-development, reclamation, and other expenses increased $0.7 million, or 16.4%, primarily due to the Wharf acquisition.
Other Income and Expenses
Non-cash fair value adjustments, net, were a gain of $5.8 million compared to a gain of $16.1 million, primarily due to the impact of changes in future metal prices on the Palmarejo gold production royalty and the Rochester 3.4% NSR royalty obligation, as well as changes in current metal prices impacting silver put spreads in 2014.
Interest expense (net of capitalized interest of $0.9 million) increased 7.1% to $12.4 million primarily due to interest expense associated with additional borrowings.
Other, net was a loss of $8.9 million, compared to a loss of $1.3 million, primarily due to changes in foreign currency exchange rates.
Income and Mining Taxes
During the third quarter of 2015, the Company reported estimated income and mining tax benefit of $8.3 million, for an effective tax rate of 36.7%. Estimated income and mining tax benefit during the third quarter of 2014 was $16.6 million, for an effective tax rate of 126.0%. The following table summarizes the components of the Company’s income (loss) before tax and income and mining tax (expense) benefit by significant jurisdiction:
 
Three months ended September 30, 2015
 
Three months ended September 30, 2014
In thousands
Income (loss) before tax
Tax (expense) benefit
 
Income (loss) before tax
Tax (expense) benefit
United States
$
(16,168
)
$
(1,080
)
 
$
(14,954
)
$
739

Argentina
(731
)
(2
)
 
(935
)
1,539

Mexico
(1,412
)
11,951

 
(283
)
17,003

Bolivia
(4,483
)
(1,029
)
 
3,199

(2,969
)
Other jurisdictions
315

(1,580
)
 
(144
)
271

 
$
(22,479
)
$
8,260

 
$
(13,117
)
$
16,583


The Company’s effective tax rate is impacted by recurring items, such as foreign exchange rates on deferred tax balances, the full valuation allowance on the deferred tax assets relating to losses in the United States and certain foreign jurisdictions, mining tax expense and uncertain tax position accruals. In addition, the Company's consolidated effective income tax rate is a function of the combined effective tax rates and foreign exchange rates in the jurisdictions in which it operates. Variations in the jurisdictional mix of income and loss and foreign exchange rates result in significant fluctuations in our consolidated effective tax rate.


34

Nine Months Ended September 30, 2015 compared to Nine Months Ended September 30, 2014
Revenue
Metal sales decreased by $16.3 million, or 3.3%, to $476.4 million due to lower average realized silver and gold prices and lower silver ounces sold, partially offset by higher gold ounces sold. The Company realized average silver and gold prices of $15.89 per ounce and $1,162 per ounce, respectively, compared with average realized prices of $19.76 per ounce and $1,272 per ounce, respectively. The Company sold 12.1 million silver ounces and 243,851 gold ounces, compared to sales of 12.7 million silver ounces and 189,869 gold ounces. Silver contributed 40% of sales and gold contributed 60%, compared to 51% of sales from silver and 49% from gold. Royalty revenue increased $3.0 million due to commencement of production at the Correnso mine, as well as higher production from the Cerro Bayo and El Gallo mines.
Costs Applicable to Sales
Costs applicable to sales increased by $2.9 million, or 0.8%, to $354.4 million. The increase in costs applicable to sales is primarily due to higher gold ounces sold. For a complete discussion of costs applicable to sales, see Results of Operations below.
Amortization
Amortization decreased by $16.3 million, or 13.1%, primarily due to lower amortizable mineral interests and mining equipment, partially offset by higher silver equivalent production.
Expenses
General and administrative expenses decreased $7.8 million, or 24.6%, primarily due to lower compensation and professional services costs.
Exploration expense decreased $6.0 million, or 37.6%, due to lower spending at Kensington, Rochester, and Palmarejo.
Pre-development, reclamation, and other expenses decreased 30.2% to $14.0 million, primarily due to La Preciosa feasibility study costs in 2014.
Other Income and Expenses
Non-cash fair value adjustments, net, were a gain of $3.7 million compared to a loss of $3.6 million, primarily due to the impact of changes in future metal prices on the Palmarejo gold production royalty, the Rochester 3.4% NSR royalty obligation, and an other-than-temporary impairment of strategic equity investments in 2014.
Interest expense (net of capitalized interest of $2.7 million) decreased to $33.9 million from $37.0 million primarily due to the write-off of costs associated with the termination of a former revolving credit facility in 2014, lower accretion of the Palmarejo gold production royalty obligation, and higher capitalized interest, partially offset by interest expense associated with additional borrowings.
Other, net increased by $7.3 million to expense of $14.3 million, compared to expense of $6.9 million, primarily due to changes in foreign currency exchange rates.
Income and Mining Taxes
During the first nine months of 2015, the Company reported estimated income and mining tax benefit of approximately $8.5 million, for an effective tax rate of 11.6%. Estimated income and mining tax benefit during the first nine months of 2014 was $18.7 million, for an effective tax rate of 19.5%. The following table summarizes the components of the Company’s income (loss) before tax and income and mining tax (expense) benefit:
 
Nine months ended September 30, 2015
 
Nine months ended September 30, 2014
In thousands
Income (loss) before tax
Tax (expense) benefit
 
Income (loss) before tax
Tax (expense) benefit
United States
$
(46,640
)
$
1,123

 
$
(75,168
)
$
447

Argentina
(2,083
)
(3
)
 
(3,828
)
5,622

Mexico
(16,666
)
11,234

 
(28,999
)
20,831

Bolivia
(8,081
)
(2,240
)
 
11,848

(7,937
)
Other jurisdictions
834

(1,663
)
 
651

(313
)

$
(72,636
)
$
8,451

 
$
(95,496
)
$
18,650



35

The Company’s effective tax rate is impacted by recurring items, such as foreign exchange rates on deferred tax balances, the full valuation allowance on the deferred tax assets relating to losses in the United States and certain foreign jurisdictions, mining tax expense and uncertain tax position accruals. In addition, the Company's consolidated effective income tax rate is a function of the combined effective tax rates and foreign exchange rates in the jurisdictions in which it operates. Variations in the jurisdictional mix of income and loss and foreign exchange rates result in significant fluctuations in its consolidated effective tax rate.

A valuation allowance is provided for deferred tax assets for which it is more likely than not that the related benefits will not be realized. Each quarter, the Company analyzes its deferred tax assets and if it is determined that the Company will not realize all or a portion of its deferred tax assets, it will record or increase a valuation allowance. Conversely, if it is determined that the Company will ultimately be able to realize all or a portion of the related benefits for which a valuation allowance has been provided, all or a portion of the related valuation allowance will be reduced. There are a number of risk factors that could impact the Company’s ability to realize its deferred tax assets.

Likewise, there are a number of factors that can potentially impact the Company’s effective tax, including the geographic distribution of income, the non-recognition of tax assets, changes in tax laws, and the impact of specific transactions. For a complete discussion of the factors that influence our effective tax rate, see the MD&A included in the 2014 10-K.
Results of Operations
Palmarejo
 
Three months ended September 30,
 
Nine months ended September 30,
 
2015
 
2014
 
2015
 
2014
Tons milled
427,635

 
518,212

 
1,315,394

 
1,624,275

Silver ounces produced
1,422,066

 
1,532,607

 
4,023,077

 
5,114,237

Gold ounces produced
22,974

 
22,514

 
56,596

 
71,436

Silver equivalent ounces produced
2,800,506

 
2,883,447

 
7,418,837

 
9,400,397

Costs applicable to sales/oz(1)
$
11.66

 
$
15.22

 
$
13.61

 
$
14.18

Costs applicable to sales/oz(2)
$
10.25

 
$
14.67

 
$
12.38

 
$
13.72

(1)
Equivalent ounces calculated using a 60:1 silver to gold ratio. See Non-GAAP Financial Performance Measures.
(2)
Equivalent ounces calculated using average realized prices. See Non-GAAP Financial Performance Measures.

Three Months Ended September 30, 2015 compared to Three Months Ended September 30, 2014

Silver equivalent production decreased 3% due to lower mill throughput mostly offset by higher silver and gold grades. Metal sales were $49.2 million, or 31% of Coeur's metal sales, compared with $61.4 million, or 36% of Coeur's metal sales, due to lower production and the addition of Wharf. Costs applicable to sales per ounce decreased as a result of lower waste mining, diesel, backfill, and other consumables costs, as well as favorable U.S. dollar exchange rates. Amortization decreased to $8.6 million compared to $16.5 million due to lower amortizable mineral interests and mining equipment. Capital expenditures increased to $10.5 million compared to $5.9 million due to underground development of the Guadalupe and Independencia deposits.

Nine Months Ended September 30, 2015 compared to Nine Months Ended September 30, 2014

Silver equivalent production decreased 21% due to lower mill throughput as the mine continues its transition to a lower tonnage, high grade underground operation. Metal sales were $127.5 million, or 27% of Coeur's metal sales, compared with $201.8 million, or 41% of Coeur's metal sales due to lower production and the addition of Wharf. Costs applicable to sales per ounce decreased as a result of lower waste mining, diesel, backfill, and other consumables costs, as well as favorable U.S. dollar exchange rates. Amortization decreased to $25.0 million compared to $53.2 million due to lower production and amortizable mineral interests and mining equipment. Capital expenditures increased to $30.4 million compared to $15.2 million due to underground development of the Guadalupe and Independencia deposits.

36

Rochester
 
Three months ended September 30,
 
Nine months ended September 30,
 
2015
 
2014
 
2015
 
2014
Tons placed
4,128,868

 
3,892,421

 
12,002,712

 
10,862,864

Silver ounces produced
1,086,189

 
1,156,060

 
3,524,130

 
3,018,660

Gold ounces produced
10,892

 
11,702

 
41,024

 
29,124

Silver equivalent ounces produced
1,739,709

 
1,858,180

 
5,985,570

 
4,766,100

Costs applicable to sales/oz(1)
$
12.02

 
$
14.80

 
$
12.39

 
$
14.58

Costs applicable to sales/oz(2)
$
10.90

 
$
14.41

 
$
11.33

 
$
14.21

(1)
Equivalent ounces calculated using a 60:1 silver to gold ratio. See Non-GAAP Financial Performance Measures.
(2)
Equivalent ounces calculated using average realized prices. See Non-GAAP Financial Performance Measures.


Three Months Ended September 30, 2015 compared to Three Months Ended September 30, 2014

Silver equivalent production decreased 6% as a result of timing of recoveries and lower gold grades, partially offset by higher silver grades and higher tons placed. Metal sales were $34.6 million, or 22% of Coeur’s metal sales, compared with $32.4 million, or 19% of Coeur's metal sales. Costs applicable to sales per ounce decreased due to lower diesel and maintenance costs. Amortization was $6.7 million compared to $5.4 million. Capital expenditures were $5.3 million compared to $4.2 million.

Nine Months Ended September 30, 2015 compared to Nine Months Ended September 30, 2014

Silver equivalent production increased 26% as a result of higher tons placed, higher silver grades, and timing of recoveries. Metal sales were $115.0 million, or 24% of Coeur’s metal sales, compared with $87.7 million, or 18% of Coeur's metal sales. Costs applicable to sales per ounce decreased due to higher production, lower diesel costs, and lower consumption of other materials and supplies. Amortization was $19.0 million compared to $14.8 million due to higher production. Capital expenditures were $14.5 million compared to $9.1 million due to crusher expansion and Stage III buttress construction.

Kensington
 
Three months ended September 30,
 
Nine months ended September 30,
 
2015
 
2014
 
2015
 
2014
Tons milled
165,198

 
145,097

 
500,798

 
468,543

Gold ounces produced
28,799

 
30,773

 
92,553

 
84,290

Costs applicable to sales/oz(1)
$
889

 
$
937

 
$
806

 
$
977

(1) See Non-GAAP Financial Performance Measures

Three Months Ended September 30, 2015 compared to Three Months Ended September 30, 2014

Gold production decreased 6% due to lower grade, partially offset by higher mill throughput. Metal sales were $30.5 million, or 19% of Coeur's metal sales, compared to $45.9 million, or 27% of Coeur’s metal sales due to the addition of Wharf. Costs applicable to sales per ounce decreased due to lower diesel and processing costs. Amortization was $8.5 million compared to $12.9 million due to lower amortizable mineral interests and mining equipment and lower production. Capital expenditures were $5.5 million compared to $3.6 million.

Nine Months Ended September 30, 2015 compared to Nine Months Ended September 30, 2014

Gold production increased 10% due to higher grade and mill throughput. Metal sales were $117.0 million, or 25% of Coeur's metal sales, compared to $111.0 million, which represented 23% of Coeur’s metal sales. Costs applicable to sales per ounce decreased due to higher production and lower diesel and processing costs. Amortization was $32.7 million compared to $35.2 million due to lower amortizable mineral interests and mining equipment, partially offset by higher production. Capital expenditures were $14.4 million compared to $12.3 million.

Wharf

37

 
Three months ended September 30,
 
Nine months ended September 30,
 
2015
 
2014
 
2015
 
2014
Tons placed
1,149,744

 
—

 
2,453,149

 
—

Silver ounces produced
19,365

 
—

 
38,701

 
—

Gold ounces produced
23,104

 
—

 
46,185

 
—

Gold equivalent ounces produced
23,427

 
—

 
46,830

 
—

Costs applicable to sales/oz(1)
$
716

 
$
—

 
$
820

 
$
—

(1) See Non-GAAP Financial Performance Measures

Three Months Ended September 30, 2015 compared to Three Months Ended September 30, 2014

Gold equivalent production was 23,427 ounces at costs applicable to sales per gold equivalent ounce of $716. Metal sales were $28.0 million, or 17% of Coeur's metal sales.

Nine Months Ended September 30, 2015 compared to Nine Months Ended September 30, 2014

Gold equivalent production was 46,830 ounces in the post-acquisition period to September 30, 2015 at costs applicable to sales per gold equivalent ounce of $820. Metal sales were $48.4 million, or 10% of Coeur's metal sales.

San Bartolomé
 
Three months ended September 30,
 
Nine months ended September 30,
 
2015
 
2014
 
2015
 
2014
Tons milled
373,201

 
471,938

 
1,237,384

 
1,295,287

Silver ounces produced
1,177,986

 
1,509,007

 
3,885,789

 
4,345,436

Costs applicable to sales/oz(1)
$
14.55

 
$
14.22

 
$
14.19

 
$
14.00

(1) See Non-GAAP Financial Performance Measures

Three Months Ended September 30, 2015 compared to Three Months Ended September 30, 2014

Silver production decreased 22% due to a three-week shutdown in July as a result of political protests in Potosi, Bolivia. Silver sales were $17.4 million, or 11% of Coeur's metal sales, compared with $28.4 million, or 17% of Coeur's metal sales. Costs applicable to sales per ounce increased as a result of lower production and higher maintenance costs. The Company recently began purchasing high-grade supplemental ore from local sources to increase production and reduce costs per ounce. Amortization was $3.5 million compared to $5.1 million due to lower production. Capital expenditures were $1.8 million compared to $2.8 million.

Nine Months Ended September 30, 2015 compared to Nine Months Ended September 30, 2014

Silver production decreased 11% due to a three-week shutdown in July as a result of political protests and lower grade. Silver sales were $62.3 million, or 13% of Coeur's metal sales, compared with $85.0 million, or 17% of Coeur's metal sales. Costs applicable to sales per ounce were generally consistent. Amortization was $13.5 million compared to $14.4 million due to lower production. Capital expenditures were $3.7 million compared to $5.9 million.

Coeur Capital
 
Three months ended September 30,
 
Nine months ended September 30,
Endeavor Silver Stream
2015
 
2014
 
2015
 
2014
Tons milled
191,913

 
199,757

 
568,387

 
578,514

Silver ounces produced
120,833

 
140,810

 
457,264

 
398,310

Costs applicable to sales/oz(1)
$
4.99

 
$
7.71

 
$
5.83

 
$
7.90

(1) See Non-GAAP Financial Performance Measures

Three Months Ended September 30, 2015 compared to Three Months Ended September 30, 2014


38

Silver production decreased due to lower mill throughput and grade, resulting in metal sales of $1.3 million compared to $2.4 million. Costs applicable to sales per ounce decreased due to the impact of lower silver prices on the Company's silver price sharing agreement with the Endeavor mine operator. Royalty revenue was $1.6 million compared to $0.6 million primarily due to production from Correnso in 2015. Amortization was $2.0 million compared to $1.6 million.

Nine Months Ended September 30, 2015 compared to Nine Months Ended September 30, 2014

Silver production increased due to higher grade, partially offset by lower throughput, resulting in metal sales of $6.3 million compared to $7.2 million. Costs applicable to sales per ounce decreased due to the impact of lower silver prices on the Company's silver price sharing agreement with the Endeavor mine operator. Royalty revenue was $5.4 million compared to $2.4 million primarily due to commencement of production from Correnso, as well as higher production from the Cerro Bayo and El Gallo. Amortization was $6.8 million compared to $4.7 million due to higher production.
Liquidity and Capital Resources
Cash Provided by Operating Activities
Net cash provided by operating activities for the three and nine months ended September 30, 2015 was $36.2 million and $69.1 million, compared to $31.3 million and $52.4 million for the three and nine months ended September 30, 2014, and was impacted by the following key factors:
 
Three months ended September 30,
 
Nine months ended September 30,
 
2015
 
2014
 
2015
 
2014
Consolidated silver equivalent ounces sold
9,512,459


8,424,364

 
26,773,958

 
24,109,059

Average realized price per silver equivalent ounce(1)
$
17.09

 
$
20.29

 
$
17.99

 
$
20.54

Costs applicable to sales per consolidated silver equivalent ounce(1)
(12.64
)
 
(14.95
)
 
(13.24
)
 
(14.58
)
Operating margin per silver equivalent ounce
$
4.45

 
$
5.34

 
$
4.75

 
$
5.96

(1) Silver equivalent ounces calculated using a 60:1 silver to gold ratio. See Non-GAAP Financial Performance Measures.
 
Three months ended September 30,
 
Nine months ended September 30,
In thousands
2015
 
2014
 
2015
 
2014
Cash flow before changes in operating assets and liabilities
$
28,551

 
$
15,057

 
$
63,819

 
$
40,337

Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Receivables and other current assets
11,011

 
7,446

 
11,225

 
18,297

Prepaid expenses and other
(2,055
)
 
3,871

 
(3,222
)
 
(687
)
Inventories
5,380

 
9,698

 
10,713

 
(5,821
)
Accounts payable and accrued liabilities
(6,650
)
 
(4,806
)
 
(13,407
)
 
311

CASH PROVIDED BY OPERATING ACTIVITIES
$
36,237

 
$
31,266

 
$
69,128

 
$
52,437

Cash provided by operating activities increased $5.0 million in the three months ended September 30, 2015 compared to the three months ended September 30, 2014 due to higher silver equivalent ounces sold and lower costs applicable to sales per silver equivalent ounce, partially offset by lower average realized price per silver equivalent ounce. Metal sales for the three months ended September 30, 2015 compared to the three months ended September 30, 2014 were $30.4 million lower due to lower average realized prices, partially offset by a $21.0 million increase due to higher silver equivalent ounces sold. The $7.7 million working capital decrease for the three months ended September 30, 2015 was primarily due to collection of accounts receivable, compared to the $16.2 million working capital decrease for the three months ended September 30, 2014, which was primarily due to collection of accounts receivable and a reduction in inventory.

Cash provided by operating activities increased $16.7 million in the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014 due to higher silver equivalent ounces sold and lower costs applicable to sales per silver equivalent ounce, partially offset by lower average realized prices. Metal sales for the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014 were $70.1 million lower due to lower average realized price per silver equivalent ounce, partially offset by $53.6 million due to higher silver equivalent ounces sold. The $5.3 million working capital decrease for the nine months ended September 30, 2015 was primarily due to a reduction of inventory, compared to the $12.1 million working capital decrease for the nine months ended September 30, 2014, which was primarily due to collection of accounts receivable, partially offset by an increase in inventory.

39

Cash Used in Investing Activities
Net cash used in investing activities for the three months ended September 30, 2015 was $23.6 million compared to $29.8 million in the three months ended September 30, 2014, primarily due to the purchase of a pre-existing net smelter royalty on La Preciosa in 2014, partially offset by higher capital expenditures. The Company spent $23.9 million on capital expenditures in the three months ended September 30, 2015, compared with $16.8 million in the three months ended September 30, 2014. Capital expenditures in the three months ended September 30, 2015 were primarily related to underground development of the Guadalupe and Independencia deposits at Palmarejo as well as crusher expansion and Stage III buttress construction at Rochester, compared to underground development at Palmarejo and Kensington in the three months ended September 30, 2014.

Net cash used in investing activities for the nine months ended September 30, 2015 was $179.1 million compared to $107.1 million in the nine months ended September 30, 2014, primarily due to the acquisition of the Wharf gold mine and higher capital expenditures in 2015, partially offset by purchases of short-term investments in 2014. The Company spent $65.2 million on capital expenditures in the nine months ended September 30, 2015, compared with $44.1 million in the nine months ended September 30, 2014. Capital expenditures in the nine months ended September 30, 2015 were primarily related to underground development of the Guadalupe deposit at Palmarejo as well as crusher expansion and Stage III buttress construction at Rochester, compared to underground development at Palmarejo and Kensington in the nine months ended September 30, 2014.
Cash Used in (Provided by) Financing Activities
Net cash used in financing activities for the three months ended September 30, 2015 was $12.8 million compared to net cash used in financing activities of $24.7 million for the three months ended September 30, 2014. The decrease in cash used by financing activities in the three months ended September 30, 2015 is due to debt repurchases in 2014 and lower Palmarejo gold production royalty payments.
    
Net cash provided by financing activities for the nine months ended September 30, 2015 was $44.9 million compared to $93.9 million for the nine months ended September 30, 2014. During the nine months ended September 30, 2015, the Company entered into a $50 million Short-term Loan which was subsequently repaid upon entering into the $100 million Term Loan. In the nine months ended September 30, 2014, the Company completed the follow-on offering of $150 million of Senior Notes.
On March 31, 2015, the Company entered into the Short-term Credit Agreement with The Bank of Nova Scotia. The Short-term Credit Agreement provided for the $50.0 million loan to the Company. On June 25, 2015, the loan was repaid in full and terminated.
On June 23, 2015, the Company and certain of its subsidiaries entered into the Term Loan Credit Agreement for the Term Loan. The Term Loan Credit Agreement provides for a five year, $100 million term loan to the Company, of which a portion of the proceeds were used to repay the Short-term Loan, and the remaining proceeds are expected to be used for general corporate purposes. The Term Loan contains no financial maintenance covenants and currently bears interest at a rate equal to an adjusted Eurodollar rate plus a margin of 8.00% (at no time will the adjusted Eurodollar rate be deemed to be less than 1.00% per annum). Voluntary prepayments of the Term Loan under the Term Loan Credit Agreement are permitted, subject to the payment of a make-whole premium if such prepayment occurs prior to the first anniversary of the closing date, a premium of 105.0% of the principal amount between the first anniversary and the second anniversary of the closing date and a premium of 103.0% if such prepayment occurs on or after the second anniversary but prior to the third anniversary of the closing date. The Term Loan Credit Agreement requires amortization payments equal to 1.0% of the principal amount of the Term Loan per annum and also requires net cash proceeds of debt issuances, excess cash flow, asset sales and casualty insurance recoveries (in each case, subject to certain exceptions) to either be reinvested in long-term assets used in the Company’s business or be applied as a mandatory prepayment of the Term Loan. Amounts repaid on the Term Loan may not be re-borrowed. The obligations under the Term Loan are secured by substantially all of the assets of the Company and its domestic subsidiaries, including the land, mineral rights and infrastructure at the Kensington, Rochester and Wharf mines, as well as a pledge of the shares of certain of the Company's subsidiaries. The Term Loan Credit Agreement contains customary representations and warranties, events of default, and affirmative and negative covenants.

On November 2, 2015, the Company and certain of the Term Loan lenders entered into a Consent under Credit Agreement (the “Consent”). Additional information regarding the Consent is contained in Part II, Item 5 of this Report and is incorporated herein by reference. On November 2, 2015, the Company entered into a privately-negotiated agreement to exchange approximately $54.0 million aggregate principal amount of its Senior Notes for an estimated 14.4 million shares, but no more than 14.7 million shares, of its common stock (the "Exchange"). Additional information regarding the Exchange is contained in Part II, Item 5 of this Report and is incorporated herein by reference.

40

Other Liquidity Matters

The Company asserts that its earnings from the Mexican operations are indefinitely reinvested. Therefore, no provision has been made for United States federal and state income taxes on the Company's tax basis differences in Mexico, which primarily relate to accumulated foreign earnings that have been reinvested and are expected to be reinvested outside the United States indefinitely. The Company does not believe that the amounts reinvested will have a material impact on liquidity.

The Company may elect to defer some capital investment activities or to secure additional capital to ensure it maintains sufficient liquidity. In addition, if the Company decides to pursue the acquisition of additional mineral interests, new capital projects, or acquisitions of new properties, mines or companies, additional financing activities may be necessary. There can be no assurances that such financing will be available when or if needed upon acceptable terms, or at all.
Critical Accounting Policies and Accounting Developments
Please see Note 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES contained in the Company’s Form 10-K for the year ended December 31, 2014 for the Company's critical accounting policies and estimates.

Cautionary Statement Concerning Forward-Looking Statements

This report contains numerous forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) relating to the Company’s gold and silver mining business, including statements regarding strategies to produce long-term cash flow, provide opportunities for growth through continued exploration, and generate superior and sustainable returns for stockholders, maximizing net cash flow, reducing operating and non-operating costs, demonstrating consistent capital discipline, efficient management of working capital, liquidity maintenance efforts, identifying and implementing revenue enhancement opportunities, the transition to a lower tonnage, high grade underground operation at Palmarejo, tax positions, capital requirements, anticipated production, costs, and expenses, and estimated number of shares to be issued in the exchange transaction. Such forward-looking statements are identified by the use of words such as “believes,” “intends,” “expects,” “hopes,” “may,” “should,” “plan,” “projected,” “contemplates,” “anticipates” or similar words. Actual results could differ materially from those projected in the forward-looking statements. The factors that could cause actual results to differ materially from those projected in the forward-looking statements include (i) the risk factors set forth in the "Risk Factors" section of the 2014 10-K and the risks and uncertainties discussed in this MD&A, (ii) the risk that the anticipated benefits of recent acquisitions are not realized, (iii) the risks and hazards inherent in the mining business (including risks inherent in developing large-scale mining projects, environmental hazards, industrial accidents, weather or geologically related conditions), (iv) changes in the market prices of gold and silver and a sustained lower price environment, including the resulting impact on cash flows and debt covenant compliance, (v) the uncertainties inherent in the Company’s production, exploratory and developmental activities, including risks relating to permitting and regulatory delays, ground conditions and grade variability, (vi) any future labor disputes or work stoppages (involving the Company and its subsidiaries or third parties), (vii) the uncertainties inherent in the estimation of gold and silver reserves and mineralized material, (viii) changes that could result from the Company’s future acquisition of new mining properties or businesses, (ix)  the absence of control over and reliance on third parties to operate mines in which the Company or any of its subsidiaries holds royalty or streaming interests and risks related to these mining operations (including results of mining and exploration activities, environmental, economic and political risks, and changes in mine plans and project parameters); (x) the loss of access to any third-party smelter to which the Company markets silver and gold, (xi) the effects of environmental and other governmental regulations, (xii) the risks inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries, and (xiii) the Company’s ability to raise additional financing necessary to conduct its business, make payments or refinance its debt. Readers are cautioned not to put undue reliance on forward-looking statements. The Company disclaims any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise.

41

Non-GAAP Financial Performance Measures
Non-GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by generally accepted accounting principles ("GAAP"). These measures should not be considered in isolation or as a substitute for performance measures prepared in accordance with GAAP.
Adjusted Net Income (Loss)
Management uses Adjusted net income (loss) to evaluate the Company's operating performance, and to plan and forecast its operations. The Company believes the use of Adjusted net income (loss) reflects the underlying operating performance of our core mining business and allows investors and analysts to compare results of the Company to similar results of other mining companies. Management's determination of the components of Adjusted net income (loss) are evaluated periodically and are based, in part, on a review of non-GAAP financial measures used by mining industry analysts.
Net income (loss) is reconciled to Adjusted net income (loss) in the table below, with amounts presented after-tax:
 
Three months ended September 30,
 
Nine months ended September 30,
In thousands except per share amounts
2015
 
2014
 
2015
 
2014
Net income (loss)
$
(14,219
)
 
$
3,466

 
$
(64,185
)
 
$
(76,846
)
Fair value adjustments, net
(3,384
)
 
(13,026
)
 
(1,664
)
 
1,299

Stock-based compensation
1,541

 
2,417

 
6,004

 
7,175

Impairment of marketable securities
483

 
1,092

 
2,028

 
4,614

Accretion of royalty obligation
1,063

 
1,374

 
3,525

 
4,984

Loss on debt extinguishment
—

 
—

 
271

 
—

Inventory adjustments
2,280

 
4,993

 
7,770

 
5,770

Revolving Credit Facility termination
—

 
—

 
—

 
3,035

Corporate reorganization costs
514

 
—

 
514

 
—

Transaction-related costs
—

 
—

 
2,112

 
—

Deferred tax asset valuation allowance
—

 
—

 
2,013

 
—

Foreign exchange impact on deferred taxes
(10,092
)
 
(18,801
)
 
(12,326
)
 
(18,795
)
Adjusted net income (loss)
$
(21,814
)
 
$
(18,485
)
 
$
(53,938
)
 
$
(68,764
)
 
 
 
 
 
 
 
 
Adjusted net income (loss) per share
$
(0.16
)
 
$
(0.18
)
 
$
(0.43
)
 
$
(0.67
)
Costs Applicable to Sales and All-in Sustaining Costs

Management uses Costs applicable to sales ("CAS") and All-in sustaining costs ("AISC") to evaluate the Company’s current operating performance and life of mine performance from discovery through reclamation. We believe these measures assist analysts, investors and other stakeholders in understanding the costs associated with producing silver and gold and assessing our operating performance and ability to generate free cash flow from operations. These measures may not be indicative of operating profit or cash flow from operations as determined under GAAP. Management believes converting the benefit from selling gold into silver equivalent ounces best allows management, analysts, investors and other stakeholders to evaluate the operating performance of the Company. Other companies may calculate CAS and AISC differently as a result of reflecting the benefit from selling non-silver metals as a by-product credit rather than converting to silver equivalent ounces, differences in the determination of sustaining capital expenditures, and differences in underlying accounting principles and accounting frameworks such as in International Financial Reporting Standards.


42

Three Months Ended September 30, 2015
 
 
Silver
 
Gold
 
Total
In thousands except per ounce amounts
 
Palmarejo
 
Rochester
 
San Bartolomé
 
Endeavor
 
Total
 
Kensington
 
Wharf
 
Total
 
Costs applicable to sales, including amortization (U.S. GAAP)
 
$
42,710

 
$
33,935

 
$
20,665

 
$
1,384

 
$
99,038

 
$
33,472

 
$
23,419

 
$
56,891

 
$
155,929

Amortization
 
8,617

 
8,499

 
3,526

 
909

 
21,551

 
8,499

 
5,642

 
14,141

 
35,692

Costs applicable to sales
 
$
34,093

 
$
25,436

 
$
17,483

 
$
475

 
$
77,487

 
$
24,973

 
$
17,777

 
$
42,750

 
$
120,237

Silver equivalent ounces sold(1)
 
2,924,947

 
2,116,353

 
1,201,959

 
95,260

 
6,338,519

 
 
 
 
 
 
 
9,512,459

Gold equivalent ounces sold(1)
 
 
 
 
 
 
 
 
 
 
 
28,084

 
24,815

 
52,899

 
 
Costs applicable to sales per ounce(1)
 
$
11.66

 
$
12.02

 
$
14.55

 
$
4.99

 
$
12.22

 
$
889

 
$
716

 
$
808

 
$
12.64

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales per realized ounce(2)
 
$
10.25

 
$
10.90

 

 

 
$
11.14

 

 

 

 
$
10.95

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
120,237

Treatment and refining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
820

Sustaining capital
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8,565

General and administrative
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6,694

Exploration
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,112

Reclamation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,493

Project/pre-development costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,648

All-in sustaining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
146,569

Silver equivalent ounces sold(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6,338,519

Kensington and Wharf silver equivalent ounces sold(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
3,173,940

Consolidated silver equivalent ounces sold(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,512,459

All-in sustaining costs per silver equivalent ounce(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
$
15.41

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
All-in sustaining costs per realized silver equivalent ounce(2)
 
 
 
 
 
 
 
 
 
 
 
 
 
$
13.35

(1)
Equivalent ounces calculated using a 60:1 silver to gold ratio.
(2)
Equivalent ounces calculated using average realized prices.
Three Months Ended September 30, 2014
 
 
Silver
 
Gold
 
 
In thousands except per ounce amounts
 
Palmarejo
 
Rochester
 
San Bartolomé
 
Endeavor
 
Total
 
Kensington
 
Total
Costs applicable to sales, including amortization (U.S. GAAP)
 
$
62,481

 
$
29,077

 
$
25,564

 
$
1,998

 
$
119,120

 
$
47,555

 
$
166,675

Amortization
 
16,493

 
5,359

 
5,117

 
909

 
27,878

 
12,887

 
40,765

Costs applicable to sales
 
$
45,988

 
$
23,718

 
$
20,447

 
$
1,089

 
$
91,242

 
$
34,668

 
$
125,910

Silver equivalent ounces sold(1)
 
3,021,448

 
1,602,676

 
1,438,409

 
141,291

 
6,203,824

 
 
 
8,424,364

Gold equivalent ounces sold(1)
 
 
 
 
 
 
 
 
 
 
 
37,009

 
 
Costs applicable to sales per ounce(1)
 
$
15.22

 
$
14.80

 
$
14.22

 
$
7.71

 
$
14.71

 
$
937

 
$
14.95

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales per realized ounce(2)
 
$
14.67

 
$
14.41

 

 

 
$
14.35

 

 
$
14.38

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales
 
 
 
 
 
 
 
 
 
 
 
 
 
$
125,910

Treatment and refining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
1,425

Sustaining capital
 
 
 
 
 
 
 
 
 
 
 
 
 
12,239

General and administrative
 
 
 
 
 
 
 
 
 
 
 
 
 
8,515

Exploration
 
 
 
 
 
 
 
 
 
 
 
 
 
6,587

Reclamation
 
 
 
 
 
 
 
 
 
 
 
 
 
2,041

Project/pre-development costs
 
 
 
 
 
 
 
 
 
 
 
 
 
2,154

All-in sustaining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
$
158,871

Silver equivalent ounces sold(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
6,203,824

Kensington and Wharf silver equivalent ounces sold(1)
 
 
 
 
 
 
 
 
 
2,220,540

Consolidated silver equivalent ounces sold(1)
 
 
 
 
 
 
 
 
 
 
 
8,424,364

All-in sustaining costs per silver equivalent ounce(1)
 
 
 
 
 
 
 
 
 
$
18.86

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
All-in sustaining costs per realized silver equivalent ounce(2)
 
 
 
 
 
 
 
 
 
$
18.14

(1)
Equivalent ounces calculated using a 60:1 silver to gold ratio.
(2)
Equivalent ounces calculated using average realized prices.

43

Nine Months Ended September 30, 2015
 
 
Silver
 
Gold
 
Total
In thousands except per ounce amounts
 
Palmarejo
 
Rochester
 
San Bartolomé
 
Endeavor
 
Total
 
Kensington
 
Wharf
 
Total
 
Costs applicable to sales, including amortization (U.S. GAAP)
 
$
123,692

 
$
100,183

 
$
69,254

 
$
6,479

 
$
299,608

 
$
114,582

 
$
43,543

 
$
158,125

 
$
457,733

Amortization
 
24,997

 
18,962

 
13,487

 
4,019

 
61,465

 
32,738

 
9,133

 
41,871

 
103,336

Costs applicable to sales
 
$
98,695

 
$
81,221

 
$
55,767

 
$
2,460

 
$
238,143

 
$
81,844

 
$
34,410

 
$
116,254

 
$
354,397

Silver equivalent ounces sold(1)
 
7,252,519

 
6,557,312

 
3,931,214

 
422,253

 
18,163,298

 
 
 
 
 
 
 
26,773,958

Gold equivalent ounces sold(1)
 
 
 
 
 
 
 
 
 
 
 
101,565

 
41,946

 
143,511

 
 
Costs applicable to sales per ounce(1)
 
$
13.61

 
$
12.39

 
$
14.19

 
$
5.83

 
$
13.11

 
$
806

 
$
820

 
$
810

 
$
13.24

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales per realized ounce(2)
 
$
12.38

 
$
11.33

 

 

 
$
12.22

 

 

 

 
$
11.82

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
354,397

Treatment and refining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3,837

Sustaining capital
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
33,110

General and administrative
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
23,979

Exploration
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9,957

Reclamation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
11,806

Project/pre-development costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,769

All-in sustaining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
441,855

Silver equivalent ounces sold(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
18,163,298

Kensington and Wharf silver equivalent ounces sold(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
8,610,660

Consolidated silver equivalent ounces sold(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
26,773,958

All-in sustaining costs per silver equivalent ounce(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
$
16.50

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
All-in sustaining costs per realized silver equivalent ounce(2)
 
 
 
 
 
 
 
 
 
 
 
 
 
$
14.74

(1)
Equivalent ounces calculated using a 60:1 silver to gold ratio.
(2)
Equivalent ounces calculated using average realized prices.
Nine Months Ended September 30, 2014
 
 
Silver
 
Gold
 
 
In thousands except per ounce amounts
 
Palmarejo
 
Rochester
 
San Bartolomé
 
Endeavor
 
Total
 
Kensington
 
Total
Costs applicable to sales, including amortization (U.S. GAAP)
 
$
192,309

 
$
77,641

 
$
74,472

 
$
5,835

 
$
350,257

 
$
121,579

 
$
471,836

Amortization
 
53,196

 
14,835

 
14,430

 
2,721

 
85,182

 
35,162

 
120,344

Costs applicable to sales
 
$
139,113

 
$
62,806

 
$
60,042

 
$
3,114

 
$
265,075

 
$
86,417

 
$
351,492

Silver equivalent ounces sold(1)
 
9,811,669

 
4,307,934

 
4,289,817

 
394,259

 
18,803,679

 
 
 
24,109,059

Gold equivalent ounces sold(1)
 
 
 
 
 
 
 
 
 
 
 
88,423

 
 
Costs applicable to sales per ounce(1)
 
$
14.18

 
$
14.58

 
$
14.00

 
$
7.90

 
$
14.10

 
$
977

 
$
14.58

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales per realized ounce(2)
 
$
13.72

 
$
14.21

 

 

 
$
13.77

 
 
 
$
14.10

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs applicable to sales
 
 
 
 
 
 
 
 
 
 
 
 
 
$
351,492

Treatment and refining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
3,943

Sustaining capital
 
 
 
 
 
 
 
 
 
 
 
 
 
42,642

General and administrative
 
 
 
 
 
 
 
 
 
 
 
 
 
31,809

Exploration
 
 
 
 
 
 
 
 
 
 
 
 
 
15,957

Reclamation
 
 
 
 
 
 
 
 
 
 
 
 
 
5,918

Project/pre-development costs
 
 
 
 
 
 
 
 
 
 
 
 
 
14,153

All-in sustaining costs
 
 
 
 
 
 
 
 
 
 
 
 
 
$
465,914

Silver equivalent ounces sold(1)
 
 
 
 
 
 
 
 
 
 
 
 
 
18,803,679

Kensington and Wharf silver equivalent ounces sold(1)
 
 
 
 
 
 
 
 
 
5,305,380

Consolidated silver equivalent ounces sold(1)
 
 
 
 
 
 
 
 
 
 
 
24,109,059

All-in sustaining costs per silver equivalent ounce(1)
 
 
 
 
 
 
 
 
 
$
19.33

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
All-in sustaining costs per realized silver equivalent ounce(2)
 
 
 
 
 
 
 
 
 
$
18.68

(1)
Equivalent ounces calculated using a 60:1 silver to gold ratio.
(2)
Equivalent ounces calculated using average realized prices.


44

Item 3.     Quantitative and Qualitative Disclosure about Market Risk
The Company is exposed to various market risks as a part of its operations and engages in risk management strategies to mitigate these risks. The Company continually evaluates the potential benefits of engaging in these strategies based on current market conditions. The Company does not actively engage in the practice of trading derivative instruments for profit. This discussion of the Company's market risk assessments contains "forward looking statements" that contain risks and uncertainties. For additional information regarding forward-looking statements and risks and uncertainties that could impact the Company, please refer to Part I, Item 2 of this Report - Cautionary Statement Concerning Forward-Looking Statements. Actual results and actions could differ materially from those discussed below.
Gold and Silver Price
Gold and silver prices may fluctuate widely due to numerous factors such as U.S. dollar strength or weakness, demand, investor sentiment, inflation or deflation, and global mine production. The Company's profitability and cash flow may be significantly impacted by changes in the market price of gold and silver.
Gold and Silver Hedging
To mitigate the risks associated with gold and silver price fluctuations, the Company may enter into option contracts to hedge future production. At September 30, 2015, the Company had no outstanding option contracts.
Provisional Silver and Gold Sales
The Company enters into sales contracts with third-party smelters and refiners which, in most cases, provide for a provisional payment based upon preliminary assays and quoted metal prices. The provisionally priced sales contracts contain an embedded derivative that is required to be separated from the host contract. Depending on the difference between the price at the time of sale and the final settlement price, embedded derivatives are recorded as either a derivative asset or liability. The embedded derivatives do not qualify for hedge accounting and, as a result, are marked to the market gold and silver price at the end of each period from the provisional sale date to the date of final settlement. The mark-to-market gains and losses are recorded in earnings. Changes in silver and gold pricing resulted in provisional pricing mark-to-market gains of $0.4 million in the three months ended September 30, 2015.
At September 30, 2015, the Company had outstanding provisionally priced sales of 0.6 million ounces of silver and 39,069 ounces of gold at prices of $14.65 and $1,147, respectively. A 10% change in realized silver price would cause revenue to vary $0.8 million and a 10% change in realized gold price would cause revenue to vary $4.5 million.
Palmarejo Gold Production Royalty
On January 21, 2009, Coeur Mexicana entered into a gold production royalty transaction with a subsidiary of Franco-Nevada Corporation. The royalty covers 50% of the life of mine production from the Palmarejo mine and adjacent properties and includes a minimum obligation of 4,167 gold ounces per month which terminates when payments in respect of 400,000 gold ounces have been made. The minimum royalty obligation is considered an embedded derivative financial instrument due to the impact of fluctuating gold prices on the underlying gold ounces.
As of September 30, 2015, a total of 45,996 ounces of gold remain outstanding under the minimum royalty obligation. The fair value of the embedded derivative is reflected net of the Company's current credit adjusted risk free rate, which was 19.5% at September 30, 2015. The fair value of the embedded derivative at September 30, 2015 was a liability of $9.0 million. A 10% change in the price of gold would result in a change in the fair value of the net derivative liability at September 30, 2015 to vary by $4.7 million.
Foreign Currency
The Company operates, or has mineral interests, in several foreign countries including Australia, Bolivia, Chile, Mexico, Argentina, Ecuador, and New Zealand, which exposes it to foreign currency exchange rate risks. Foreign currency exchange rates are influenced by world market factors beyond the Company's control such as supply and demand for U.S. and foreign currencies. Fluctuations in local currency exchange rates in relation to the U.S. dollar may significantly impact profitability and cash flow.
Foreign Currency Hedging
To manage foreign currency risk, the Company may enter into forward foreign currency contracts and option contracts when the Company believes such contracts would be beneficial. The Company had no outstanding foreign exchange contracts at September 30, 2015.
Additional information about the Company’s derivative financial instruments may be found in Note 10 -- Derivative Financial Instruments in the notes to the consolidated financial statements.

45

Item 4. Controls and Procedures
(a)
Disclosure Controls and Procedures
As of the end of the period covered by this quarterly report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which by their nature, can provide only reasonable assurance regarding management’s control objectives. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events. Based upon the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective and operating to provide reasonable assurance that information required to be disclosed by it in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to provide reasonable assurance that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
(b)
Management’s Report on Internal Control Over Financial Reporting
Based on an evaluation by the Company’s Chief Executive Officer and Chief Financial Officer, such officers concluded that there was no change in the Company’s internal control over financial reporting during the three months ended September 30, 2015 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.


46

PART II. Other Information
Item 1.    Legal Proceedings
The information contained in Note 19 -- Commitments and Contingencies in the notes to the consolidated financial statements included in this quarterly report is incorporated herein by reference.
Item 1A. Risk Factors

Item 1A -- Risk Factors of the 2014 10-K sets forth information relating to important risks and uncertainties that could materially adversely affect the Company's business, financial condition or operating results. Additional risks and uncertainties that the Company does not presently know or that it currently deems immaterial also may impair our business operations.

Item 4. Mine Safety Disclosures

Information pertaining to mine safety matters is reported in accordance with Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act in Exhibit 95.1 attached to this Quarterly Report on Form 10-Q.

Item 5. Other Information

(a)    On November 2, 2015, the Company and certain lenders of the Term Loan entered into a Consent under Credit Agreement (the “Consent”), which granted a consent under the Term Loan Credit Agreement to permit the redemption, prepayment, acquisition and cancellation of Senior Notes, in one or more transactions from time to time, with the proceeds from, or directly in exchange (including exchanges pursuant to Section 3(a)(9) of the Securities Act) for, the issuance of up to $100 million of the Company’s common stock during a period of twelve (12) months commencing on November 2, 2015 (collectively, the “Transactions”). Pursuant to the Consent, the lenders agreed that no default or event of default in respect of a breach of the Term Loan Credit Agreement would occur as a result of the Transactions. A copy of the Consent is filed as Exhibit 10.1 to this Report and is incorporated herein by reference.

Pursuant to a privately-negotiated agreement dated November 2, 2015, the Company agreed to exchange approximately $54.0 million aggregate principal amount of its Senior Notes for no more than 14.7 million shares of its common stock, par value $0.01 the (“Shares”). The Company expects to issue the Shares in two tranches by the end of November 2015, and it will issue the Shares pursuant to the exemption from the registration requirements afforded by Section 3(a)(9) of the Securities Act.

In April 2013, the Company issued four-year warrants (the “Warrants”) to purchase approximately 1.6 million shares of the Company's common stock at an exercise price of $30 per share. At the time of issuance, the Company listed the Warrants on the New York Stock Exchange (“NYSE”). On October 28, 2015, the Company received a notice from NYSE indicating that the Warrants are not in compliance with the NYSE's continued listing standard requiring the security to maintain an aggregate market value of not less than $1.0 million. Consequently, NYSE notified the Company that it has determined to commence proceedings to delist the Warrants pursuant to Section 802.01D of the NYSE Listed Company Manual and has suspended trading in the Warrants. To effect the delisting, NYSE will apply to the SEC to delist the Warrants pending completion of applicable procedures. Based on recent trading prices, the Company estimates the aggregate market value of the Warrants to be approximately $0.3 million.

47

Item 6.    Exhibits
10.1
Consent under Credit Agreement dated November 2, 2015 (Filed herewith).
31.1
Certification of the CEO (Filed herewith).
31.2
Certification of the CFO (Filed herewith).
32.1
CEO Section 1350 Certification (Filed herewith).
32.2
CFO Section 1350 Certification (Filed herewith).
95.1
Mine Safety Disclosure (Filed herewith).
101.INS
XBRL Instance Document**
101.SCH
XBRL Taxonomy Extension Schema**
101.CAL
XBRL Taxonomy Extension Calculation Linkbase**
101.DEF
XBRL Taxonomy Extension Definition Linkbase**
101.LAB
XBRL Taxonomy Extension Label Linkbase**
101.PRE
XBRL Taxonomy Extension Presentation Linkbase**
*    Management contract or compensatory plan or arrangement.
**    The following financial information from Coeur Mining, Inc.'s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2015, formatted in XBRL (Extensible Business Reporting Language): Condensed Consolidated Statements of Comprehensive Income (Loss), Condensed Consolidated Statements of Cash Flows, Condensed Consolidated Balance Sheets, Condensed Consolidated Statement of Changes in Stockholders' Equity

48

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.
 
 
COEUR MINING, INC.
 
 
 
(Registrant)
 
 
 
 
 
Dated
November 2, 2015
/s/ Mitchell J. Krebs
 
 
 
MITCHELL J. KREBS
 
 
 
President and Chief Executive Officer (Principal Executive Officer)
 
 
 
 
Dated
November 2, 2015
/s/ Peter C. Mitchell
 
 
 
PETER C. MITCHELL
 
 
 
Senior Vice President and Chief Financial Officer (Principal Financial Officer)
 
 
 
 
Dated
November 2, 2015
/s/ Mark Spurbeck
 
 
 
MARK SPURBECK
 
 
 
Vice President, Finance (Principal Accounting Officer)




49