A YEAR
OF DELIVERY
WHITEHAVEN COAL
ANNUAL REPORT 2015
KEY HIGHLIGHTS
There were many highlights this year that bring us
closer towards achieving our goal of creating the
premier independent listed coal producer in Australia:
— Significantly improved safety performance with a 35%
reduction in the TRIFR to 9.2 at the end of the year
— Record ROM and saleable coal production exceeding targets
— Narrabri becoming one of the most productive longwall
underground mines in Australia establishing several new
production records
— First coal railed from Maules Creek three months ahead
of original schedule
— Maules Creek capex below budget
— Construction at Maules Creek almost complete at year
end with the mine declared commercial from 1 July 2015
— Sustainable cost reductions achieved at all operating
mines through operational initiatives and changes
— Refinancing our secured lending package
OUR COMMITMENT
This report demonstrates our commitment to be:
— A leading producer of some of the world’s
highest quality coal
— A company that has locally-based employees
wherever possible
— A proud member of and leading employer
in the north west NSW region
— A provider of stable and secure employment
opportunities for local Aboriginal people.
ABOUT THIS REPORT
Welcome to our 2015 Annual Report which
articulates our business, results and objectives
to our key audiences, focusing on important
issues and maintaining our commitment
to address and report on our responsibilities
and actions.
Environmental and social issues are important
to us and are an integral part of the way we do
business. In an effort to keep our Annual Report
relevant and succinct, further information on these
matters, not included in this report, can be found
on our website: www.whitehavencoal.com.au.
1. OVERVIEW
PAGE 2
2. STRATEGY
PAGE 14
3. OPERATIONS
PAGE 28
4. SUSTAINABILITY
PAGE 40
5. RESOURCES AND RESERVES
PAGE 66
6. LEADERSHIP AND MANAGEMENT
PAGE 70
7. FINANCIAL REPORT
PAGE 76
Whitehaven Coal Annual Report 2015 / 1
REVENUE21%INCREASE IN REVENUECOAL PRODUCTIONPEOPLESUSTAINABLE GROWTH25%INCREASE IN PRODUCTION655+PEOPLE EMPLOYED23MTPABY 2018KEY HIGHLIGHTSHIGHLIGHTSAc potenti parturient aenean mauris ultrices adipiscing vestibulum cras a leo maecenas litora justo potenti a mus lectus nullam. Conubia tristique class a ad fermentum parturient diam nibh adipiscing a massa cursus in. Ac potenti parturient aenean mauris ultrices adipiscing vestibulum cras a leo maecenas litora justo potenti a mus lectus nullam. Conubia tristique class a ad fermentum parturient diam nibh adipiscing a massa cursus in. About Us
Setting the Scene
FY2015 Year of Delivery
Chairman’s Statement
Managing Director and CEO Statement
4
7
8
10
12
KEY HIGHLIGHTS
COAL PRODUCTION
$763.3M
IN REVENUE
14.6Mt
OF SALEABLE COAL
779 (FTE)
WITH 77% LIVING IN AREA
OF OPERATIONS
SAFETY PERFORMANCE
9.2 TRIFR
A 35% YEAR-ON-YEAR
IMPROVEMENT
2 / A Year of Delivery
REVENUEPEOPLE1. OVERVIEW FINANCIAL
Revenue
Operating EBITDA before significant items
Net loss after tax
Net Debt
Gearing
Earnings per share
NTA/share
FY2015 ($M’S)
FY2014 ($M’S)
$763.3
$130.3
$342.7
$935.8
25%
(33.3c)
$2.77
$755.4
$90.4
$38.4
$685.2
18%
(3.9c)
$3.02
CONSOLIDATED EQUITY PRODUCTION AND SALES
000'S T
000'S T
ROM coal production
Saleable coal production
Sales of produced coal
Sales of purchased coal
Total coal sales
Note: Production and sales include pre-commercial production and sales from Maules Creek
12,205
11,255
10,859
–
10,859
9,177
8,161
8,215
511
8,726
OPERATIONAL DEVELOPMENT
CORPORATE DEVELOPMENT
1ST COAL
RAILED FROM MAULES CREEK
VICKERY
PROJECT APPROVED
ECONOMIC SPEND
ECONOMIC CONTRIBUTION TO NORTH WEST NSW AREA
693
LOCAL BUSINESSES
SUPPORTED DURING FY2015
$214.9M
SPENT WITH LOCAL
SUPPLIERS AND BUSINESS
Whitehaven Coal Annual Report 2015 / 3
1OVERVIEW5RESOURCES AND RESERVES4SUSTAINABILITY3OPERATIONS2STRATEGY6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT ABOUT US
14.6Mt
OF SALEABLE COAL
$214.9M
SPENT WITH LOCAL
SUPPLIERS IN NORTH WEST
NSW IN FY2015
$125.6M
IN WAGES AND
SUPERANNUATION
TO EMPLOYEES
Whitehaven Coal is
on a path to becoming
Australia’s largest
independent coal
producer, producing
23 million tonnes per
annum (Mtpa) by
FY2018. The company
produced 14.6 million
tonnes of saleable coal
in FY2015 (managed
basis) supplied
from the port of
Newcastle to premium
Asian markets.
Operating in the Gunnedah Basin,
Whitehaven’s production facilities
include two world-class mines
(Maules Creek open cut and
Narrabri underground), three
smaller open cut mines (Werris
Creek, Tarrawonga and Rocglen)
and a centralised washing plant
at Gunnedah.
The Company has licenses for the
exploration and development of
additional mines in NSW and QLD.
The company employed 779
full-time equivalents at 30 June 2015
across our various sites which include
corporate offices in Sydney and
Newcastle, with a sales office
in Tokyo, Japan. The proportion
of our employees living in the
area of our operations was 77%
at 30 June 2015.
Whitehaven generated $763.3m
of revenue with $130.3m EBITDA
for FY2015.
Whitehaven shares traded
on the Australian Stock Exchange
(ASX) with the code WHC.
KEY ECONOMIC
CONTRIBUTION
We contribute to the social
and economic development
of the communities in which
we operate. The Company’s
economic contribution was
$470.1m in 2015. This includes:
— $125.6m in payments including
wages and superannuation
to employees
— $214.9m in payments to
suppliers in the Gunnedah,
Narrabri, Tamworth and
Liverpool Plains shires
— $129.6m in taxes and royalties
to governments
The figures presented in this
report include the Company’s
share of joint ventures.
4 / A Year of Delivery
1. OVERVIEW “MINING PLAYS A POSITIVE ROLE IN OUR
STATE AND THE MAULES CREEK PROJECT
AND OTHERS LIKE IT CONTRIBUTE
SIGNIFICANTLY TO MAKING NSW THE
ECONOMIC LEADER IN OUR NATION”
Rt. Hon. Mike Baird MP, Premier of NSW (left) with Paul Flynn,
CEO, Whitehaven Coal (right) on visit to Maules Creek, January 2015.
Maules Creek Mine
Tarrawonga
AUSTRALIA
Sienna Project
Dingo Project
QLD
NSW
Monto
Project
Gunnedah
Basin
Ferndale
Project
Rocglen Mine
Oaklands North
Project
Narrabri
K
a
milaroi
Narrabri
Mine
H
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h
w
a
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Baan
Baa
Boggabri
Gunnedah CHPP
B
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V
a
l
e
R
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a
d
Vickery Project
O x l e y
Highway
Hig h w a y
O x l e y
Gunnedah
Curlewis
K
a
m
ila
r
oi
Tamworth
0
10
20
30
40
50
N
km
H
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h
w
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y
Werris Creek
Werris Creek
Mine
Quirindi
ASSET
INTEREST
ASSET
INTEREST
Maules Creek Mine
Narrabri Mine
Tarrawonga Mine
Rocglen Mine
Vickery Project
Gunnedah CHPP
75%
70%
70%
100%
100%
100%
Werris Creek Mine
Dingo Project
Sienna Project
Monto Project
Ferndale Project
Oaklands North Project
100%
70%
100%
100%
94%
100%
S
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Whitehaven Coal Annual Report 2015 / 5
1OVERVIEW4SUSTAINABILITY3OPERATIONS2STRATEGY
1. OVERVIEW
6 / A Year of Delivery
SETTING
THE SCENE
Becoming Australia’s
leading independent
coal producer.
We strive to be an efficient and
transparent company for all
our stakeholders. While we are
working hard to maintain our
cost leadership position in the
industry, our top priorities are:
zero accidents and incidents,
minimisation of environmental
impacts, increasing production
from our world-class mines
and the high quality of our
coal. At the same time, we
invest in our people and in
developing and promoting
high-performing employees.
OUR MISSION
CUSTOMERS
Whitehaven Coal’s customer base
comprises major steel producers
and electric power generation
companies located primarily in
Asia (Japan, Korea, Taiwan and
India). For more information
see page 23.
FUTURE GROWTH
The Company’s future growth
will see a doubling of 2014
production to achieve sales
of 23Mtpa by FY2018.
To grow total shareholder
value through:
— The operation of large,
long-life, low-cost assets
— Support of an efficient, agile
and dynamic workforce
— Forging long-term, mutually
rewarding relationships
with customers, suppliers,
regulators, employees, the
community and shareholders
OUR VALUES
Respect
Treat each other and the
communities in which we
operate, with fairness.
Discipline
Let’s be clear, concise, upfront
and uncomplicated.
Teamwork
Together we can show how
a nimble, fast-moving company
can deliver.
Integrity
Striving to deliver on our promises.
Commitment
Let’s take pride in our ability to
act quickly, with energy, enthusiasm
and passion.
Performance
Achieving superior business results
by stretching our capabilities.
Whitehaven Coal Annual Report 2015 / 7
1OVERVIEW5RESOURCES AND RESERVES4SUSTAINABILITY3OPERATIONS2STRATEGY6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT FY2015
YEAR OF DELIVERY
OPERATIONAL
DEVELOPMENTS
December 2014 – Maules Creek
Railed First Coal
Whitehaven railed first coal from
the project, less than a year after
construction began. Railings were
three months ahead of schedule
and the project was delivered under
the original $767m budget. Coal
from the project was sold out for the
first year. The project was declared
commercial from 1 July 2015.
June 2015 – Record
Annual Production
Whitehaven achieved record
production of coal from its
suite of assets, including the
world-class underground Narrabri
mine of 7.7Mt ROM on a 100%
basis and 5.4Mt ROM on an
equity basis.
June 2015 – Cost
Reduction Programme
Whitehaven’s fully absorbed
cost of coal sold fell from $69
per tonne in FY2014 to $61 per
tonne in FY2015. This was achieved
through a wide-ranging cost
reduction programme which
included the utilisation of more
port capacity, reduced rail haulage
charges, roster changes across
the workforce, the restructuring
of open-cut and CHPP operations,
procurement and the centralisation
of shared functions.
2014/15 – Recruitment
Our number of FTE employees
increased from 655 to 779 as
at 30 June 2015, with 77% of
our employees living in the
area of our operations.
2014/15 – Community Engagement
and Economic Development
During the year the Company spent
$214.9m with suppliers across the
Gunnedah, Narrabri, Tamworth
and Liverpool Plains council
areas. The Company provided
$182k in donations/sponsorships
to community organisations and
extended its commitment to
the Westpac Rescue Helicopter
Service by a further $100k through
a matched employee payroll
program. More than $26.7m has
been committed to local councils
in the form of Voluntary Planning
Agreements for the provision of
local infrastructure and services
in the region.
CORPORATE
DEVELOPMENTS
March 2015 – Refinancing
The Company achieved financial
close on a $1.4 billion Senior
Secured Bank Facility with a
syndicate of Australian and
international banks. The facility’s
A$1.2 billion drawable line of
credit is for general corporate
purposes and has a maturity
date of July 2019. The facility
will enable Whitehaven to fulfil
its ambition of becoming Australia’s
leading independent coal company
by providing funding flexibility for
the Company in future years.
September 2014 – Approval of
Vickery Project
Approval was received for the
Vickery project, a low capital
start-up, which will initially produce
4.5Mtpa ROM coal. Timing for
start-up is expected once the
company’s flagship Maules Creek
Project is fully ramped-up to its
approved 13Mtpa ROM rate.
2014/15 – Further Integration
into Premium Asian Markets
Increased sales into premium Asian
markets – largely Japan and Korea
– were secured for the high quality
Maules Creek product, aided
by the company’s Japan-based
Director of Marketing and the
marketing assistance of our joint
venture partners.
SHAREHOLDER STRUCTURE
The Company’s shareholder structure
as at 30 June 2015 is as below:
— Shares on issue: 1,026,045,885
— Number of shareholders: 6,829
More information on Corporate
Governance is elsewhere in
this report and available at
www.whitehavencoal.com.au.
8 / A Year of Delivery
1. OVERVIEW GROUP
HIGHLIGHTS
TRIFR
FTE EMPLOYEES
EQUITY SALEABLE PRODUCTION**
9.2 (Down 35%)
779 (19% Increase)
11.3Mt (38% Increase)
FY2015
FY2014
FY2013
9.2
14.06
FY2015
FY2014
20.11
FY2013
779
FY2015
11.3Mt
655
617
FY2014
FY2013
8.2Mt
6.6Mt
TOTAL COAL SALES (EQUITY SHARE)
REVENUE (NET OF ROYALTIES)
REVENUE
10.9Mt (24% Increase)
A$74/t
$763.3M (1% Increase)
FY2015
FY2014
FY2013
10.9Mt
FY2015
$74/t
FY2015
8.7Mt
7.4Mt
FY2014
FY2013
A$79/t
FY2014
A$79/t
FY2013
$622.2M
$763.3M
$755.4M
EBITDA BEFORE SIGNIFICANT ITEMS
COST OF SALES
ROYALTIES PAID TO NSW GOVERNMENT*
$130.3M (44% Increase)
$61/t (Down 12%)
$84.3M
FY2015
FY2014
FY2013
$17.1m
$130.3M
FY2015
$90.4M
FY2014
FY2013
$61
$69
FY2015
FY2014
$84.3M
$67M
$76
FY2013
$51.8M
PAID TO LOCAL SUPPLIERS
SHAREHOLDER STRUCTURE
$214.9M (17% Increase)
FY2015
FY2014
FY2013
$214.9M
$183.3M
$174.4M
INSTITUTIONS
41%
CORPORATES
48%
** FY2015 total includes pre-commercial production from Maules Creek
* On a 100% basis
PRIVATE INVESTORS
8%
RELATED PARTIES
2%
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Whitehaven Coal Annual Report 2015 / 9
1OVERVIEW5RESOURCES AND RESERVES4SUSTAINABILITY3OPERATIONS2STRATEGY
CHAIRMAN’S
STATEMENT
23Mtpa
TARGET BY FY2018
ON TRACK
$763.3M
OF REVENUE IN FY2015
Since our last Annual Report many targets have
been achieved at Whitehaven, many records have
been set and many commitments delivered upon.
Firstly, our two world class trophy assets are
clear of all regulatory hurdles, fully constructed
and producing the quality coal that we promised
the market.
In doing so, both Narrabri underground and Maules Creek open cut mines
have set some exciting company records. Narrabri achieved record ROM
production in FY2015 and Maules Creek was constructed three months
ahead of schedule and under budget.
Coupled with these achievements we have managed our transition to
a much more friendly debt facility which gives the Company clear air as
we ramp up production in the coming years. We have also set new records
with our safety performance, our policy on health, environment and
community and our outperformance in indigenous employment. More
details on these achievements can be found later in this Annual Report.
DELIVERING ON OUR TARGETS
A significant highlight this year has been delivering first coal from our new
world-class Maules Creek asset. What for many years was purely a pipeline
has become a reality. Capable of producing 12 Mtpa of coal over 30 years,
Maules Creek has been delivered ahead of schedule, with capex below
budget and declared commercial on 1 July 2015. This is not a common feat
in recent Australia construction history. At Narrabri, our underground mine
set several production records during the year and is quickly becoming
one of the most productive and efficient undergrounds mines in Australia.
Together, supported by our open-cut operations, we are well-placed
to achieve our longstanding target of 23Mtpa by FY2018.
Financially, the company also adapted well to the significant headwinds
in the industry. During the year the company reduced costs, returned
to profitability in the second half of the year and established a new debt
facility on more favourable terms to provide greater flexibility for the
company. The discipline with which management has reduced costs,
driven efficiencies and extracted the benefits of our enlarged scale
has been a particularly pleasing aspect of FY2015.
10 / A Year of Delivery
1. OVERVIEW In overall terms, these achievements,
and others which are outlined
elsewhere in this report, reflects
well on the high quality executive
and management team we
have assembled which, as the
last 12 months of delivery
indicates, is clearly capable
of establishing Whitehaven
as a global industry leader.
FINANCIAL PERFORMANCE
AFFECTED BY DIFFICULT
MARKET CONDITIONS
The operational achievements
detailed in this report take on added
importance in light of external
market conditions, which continue
to weigh on Whitehaven’s financial
performance. Amid continued
softness in coal pricing, a 17%
increase in production to 9.6Mt
(equity basis and excluding
pre-commercial production from
Maules Creek) translated to revenue
of $763.3m in FY2015, almost
the same as FY2014. The net loss
after tax increased to $342.7m,
which included $332.0m of
significant items. This included
the de-recognition of MRRT
related deferred tax balances
as a result of enactment of
legislation repealing the MRRT
and some write downs of
exploration tenements.
Pleasingly, operating EBITDA
before significant items increased
by 44% to $130.3m. The company
is conservatively geared at 25% as
at 30 June 2015 and is positioned
to deliver profits at the bottom of
the cycle as Maules Creek increases
production in the years ahead. No
dividend was declared in FY2015.
While the net loss after tax result is
difficult for shareholders to accept,
they reflect external conditions over
which we have little or no control.
From the Board’s perspective, the
management imperative in such an
environment is to tighten control
over costs and productivity and
extract the best price possible
for the quality coal we sell. Senior
management deserves credit
for executing so well against
this imperative.
POSITIONED FOR GROWTH
Despite the difficult conditions at
present, shareholders have reason
to be upbeat about Whitehaven’s
prospects over the short to medium
term. With Maules Creek now
declared commercial, increasing
production and cash flows in the
coming months and years will
make Whitehaven one of Australia’s
largest, and lowest-cost, producers
of high quality coal.
It is increasingly obvious from
the contact the Board and senior
management have had with our
Asian markets that the global
shift to cleaner, more efficient
coal is underway and irreversible.
Governments, including China, are
responding to the environmental
challenge and requiring their
industries to source higher-energy,
higher-quality coal. This plays to
the strengths of the Australian
industry generally, and to
Whitehaven disproportionately so.
Whitehaven already produces a
high-quality thermal product
with low levels of ash, sulphur,
phosphorous and other trace
elements. Maules Creek will
increase the proportion of
higher-value PCI coal and
semi-soft coking coal we sell,
giving us diversification in
product exposure and enhanced
flexibility in global markets.
As a 23Mtpa producer, with
approvals in place at Vickery
to expand to an additional
4.5Mtpa as required, Whitehaven
is ideally placed to participate
in this growth.
SUPPORTING OUR
LOCAL COMMUNITIES
Whitehaven takes great pride in
our long-standing links with the
local townships of Narrabri,
Gunnedah and Boggabri where
we operate. With the majority of
our expanding workforce living in
these communities, Whitehaven
brings jobs, services and investment
to the region in which we operate.
The company intends to open
a new office in Gunnedah this
year, further improving our
community link.
Pleasingly, the company increased
its total spend with suppliers and
businesses in the region of our
operations over the year to nearly
$215m. Our total spend with local
businesses over the past three
years across the Gunnedah, Narrabri,
Tamworth and Liverpool Plains
region is $572m. We are grateful
for the role local communities have
played in Whitehaven’s success to
date and do not take this support
for granted.
BOARD AND GOVERNANCE
Rick Gazzard announced his
intention to retire as a non-executive
director, effective 17 July 2015. The
Board would like to thank Rick for
his significant contribution to the
Company during the three years
he has served as a Director and
wish him well in his retirement.
During the time Rick served on the
Board, Whitehaven has achieved
significant milestones in which
Rick made a strong contribution
at Board level. From the increase
of production at our Narrabri
underground operation to the
development of our world-class
Maules Creek asset, Rick has
contributed to the success of
these projects.
Joining the Board as a new
independent non-executive
Director is Dr Julie Beeby. Julie
has enjoyed a strong career in
the coal industry and we believe
she will add significant skills and
insight as Whitehaven continues
on our path towards becoming
Australia’s leading independent
coal company. We welcome
Julie to the Board.
In closing, can I take this
opportunity on behalf of the
Board of Directors to thank
Paul Flynn, his management
team and in particular all of our
workforce who have made this
year’s achievements possible.
Mark Vaile
Chairman
Whitehaven Coal Annual Report 2015 / 11
1OVERVIEW5RESOURCES AND RESERVES4SUSTAINABILITY3OPERATIONS2STRATEGY6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT MANAGING DIRECTOR
AND CEO STATEMENT
359 DAYS
FIRST COAL RAILED FROM
MAULES CREEK FOLLOWING
CONSTRUCTION CLEARANCE
$130.3M
EBITDA
In last year’s Annual Report I described how
Whitehaven Coal was at an exciting juncture in
its evolution. Twelve months on, I am pleased to
report an exceptional year of delivery, one which
places the company in a strong position to reap
significant benefits from our investment and
hard work carried out in recent years.
There is little doubt that the year was another challenging one for the industry
as coal prices continued to decline. Whitehaven was not immune to these
challenges. Despite these headwinds, I am pleased to report a very positive
overall set of financial, strategic and operational outcomes as we continue our
pursuit of becoming Australia’s premier independent listed coal producer.
This strong year of delivery culminated in the declaration of commercial
production from our world-class Maules Creek mine on 1 July 2015.
Construction of Maules Creek was achieved ahead of schedule and under
budget, a significant achievement by all involved. The year also saw several
production records at the Narrabri mine, which itself is becoming one of
the most productive mines in Australia.
STRONG OPERATIONAL AND FINANCIAL PERFORMANCE
Despite continued subdued coal pricing, operating earnings before interest,
tax, depreciation and amortisation (EBITDA) increased in FY2015 by 44% to
$130.3m. The average fully absorbed costs of coal for the year was $61 per
tonne, down from $69 per tonne. Importantly, operating cash flows increased
by 96% to $213.4m because of substantial improvements in the elements
of the business that we can control.
Whitehaven continued to deliver strong production growth in FY2015
following the commencement of production from Maules Creek for the first
time and an outstanding year from the Narrabri underground mine. In overall
terms, production volumes for the year were strong with 11.3 million tonnes
of saleable coal production (up 38% on FY2014).
Narrabri’s long-wall operation was again exceptional with the mine achieving
new production records on a weekly, monthly, quarterly and annual basis in
FY2015. As mentioned in the Chairman’s report, independent benchmarks
place Narrabri among the most productive longwall mines in Australia.
12 / A Year of Delivery
1. OVERVIEW At our new world-class Maules
Creek mine, first coal was railed
off site some 359 days after the
final construction clearance was
received. Following an 18 month
construction period, the mine was
declared commercial on 1 July 2015.
Production at Maules Creek will
now increase to an annualised rate
of 8.5Mt by the end of calendar
year 2015, gradually increasing the
proportion of metallurgical coal in
line with market demand.
Elsewhere, 5.5Mt of ROM coal
production from the open cut
mines (Tarrawonga, Werris Creek
and Rocglen) was in line with
expectations and provided a strong
and stable base for the company.
On the safety front, extra tonnes
without a safe work environment
would be unacceptable. The
company’s total recordable injury
frequency rate (TRIFR) at year
end was 9.2, a 35% year-on-year
improvement. The TRIFR was
more than 40% better than the
NSW average of 16.81 and confirms
a declining trend at the company
since the end of FY2012. While
a pleasing outcome, supported by
our Safehaven program, more work
is required to achieve the goal
of zero injuries in the workplace.
COAL SALES AND PRICING
Whitehaven’s coal sales increased
by an impressive 32% to 10.9Mt
(equity basis) for FY2015 compared
to FY2014. The opening of
Whitehaven’s marketing office in
Tokyo in early 2014 has brought
immediate benefits by being able to
place the additional coal produced
by Narrabri and Maules Creek during
the year at favourable prices. The
company achieved an average price
of US$64.59/t for all of its thermal
coal sales in FY2015, a slight
premium to the average Global
Coal NEWC price for the year.
It is also noticeable that the pricing
outcome for the higher quality
coals like Whitehaven produces
has held up much better than
many of the lower CV coals
available in the Asian market.
COST DISCIPLINE
AND REFINANCING
In addition to the strong production,
it should be remembered that this
was also achieved with reduced
costs, and some difficult decisions
such as restructuring at some of our
smaller open-cut operations. This
tight discipline on costs helps to
underpin the future of the company
in this period of lower coal prices.
As earmarked last year, Whitehaven
successfully completed the
refinancing of our debt facility
by accepting a fully underwritten
offer for a new A$1.4 billion
Senior Secured Bank Facility from
a syndicate of Australian and
international banks. The new
facility has terms more favourable
than the facility it replaces, resulting
in a lower interest rate and increased
headroom for the company.
WHITEHAVEN’S
COMPETITIVE ADVANTAGE
As coal continues to attract attention
from those with a misplaced belief
that its days are numbered, it is
worth repeating the words I used
in last year’s report on the viability
of coal.
Coal remains the lowest-cost source
of energy to lift hundreds of millions
of people around the globe out of
poverty and it will have a central
role in the global energy mix for
the foreseeable future.
Whitehaven’s coal quality is vastly
different from the average coal
quality found elsewhere in the
seaborne trade. It is superior, with
high calorific value, low ash and low
sulphur. The majority of our thermal
product goes to Japan and Korea
where customers demand premium
quality. In summary, the demand for
the type of coal that Whitehaven
supplies will be strong for many
years to come.
OUR PEOPLE
AND COMMUNITIES
While the industry as a whole has
seen significant job losses over the
year, Whitehaven has increased our
FTE number to 779. We take pride
in our reliance on local employees
with over 75% living in the area of
our operations. This is good for
local towns and good for business.
Experience tells us that a permanent
local workforce is more stable and
more productive than any alternative.
As outlined in the Chairman’s report,
the company worked with nearly
700 local businesses during the
year, boosting the north west
NSW with significant investment.
With Maules Creek coming into
production, I am also pleased to
report that we have exceeded our
goal relating to local Aboriginal
employment. At year end 15.5% of
our workforce at Maules Creek and
8% across the company as a whole
self-identified as Aboriginal or
Torres Strait Islander. We will
continue to focus on this important
area in the year ahead.
PRIORITIES FOR
YEAR AHEAD
The focus for management
in the year ahead are around
the following priorities:
— Continuing the ramp up of
operations at Maules Creek
— Positioning the company
to commence the
deleveraging process
— Driving further cost efficiencies
across each of our operations
— Increasing contracted sales of
higher margin metallurgical coal
— Progressing our fully-approved
4.5Mtpa Vickery project.
Vickery has the potential to become
Whitehaven’s third major mine
in the Gunnedah Basin when it is
developed, expected following the
full ramp up of Maules Creek to its
13Mtpa capacity. We have begun
the necessary work needed to apply
to increase the approval rate from
4.5Mtpa to 8Mtpa and will look to
form a joint venture with partners.
A YEAR OF DELIVERY
This year has been challenging but
ultimately successful. With a new
world-class mine constructed and
operational and our existing assets
performing strongly, FY2015 was
a year of delivery for the company.
I want to thank my executive team
and all Whitehaven employees for
their commitment in helping us
deliver on our targets set out in
last year’s Annual Report.
Paul Flynn
Managing Director and CEO
Whitehaven Coal Annual Report 2015 / 13
1OVERVIEW5RESOURCES AND RESERVES4SUSTAINABILITY3OPERATIONS2STRATEGY6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT
2. STRATEGY
Strategic Framework
Strategy in Action
Whitehaven’s Premium Coal Quality
Cost Reduction
Capital Expenditure
Financial Strength
Premium Coal Markets: Coal Market Outlook
and Adapting to Market Changes
Whitehaven Coal Sales
Coal Demand Continues to Grow
Industry in Context
16
17
18
19
20
21
22
23
24
26
KEY OBJECTIVES
OBJECTIVE # 1
OBJECTIVE # 2
BECOME
DOMINANT COAL MINER
IN GUNNEDAH BASIN
OBJECTIVE # 3
OBJECTIVE # 4
REMAIN
A LOW COST PRODUCER
PRODUCE
HIGH QUALITY COAL
OPTIMISE
REVENUE INTO
PREMIUM MARKETS
OBJECTIVE # 5
GROW
THE COMPANY
14 / A Year of Delivery
“GLOBAL DEMAND FOR COAL CONTINUES TO BE STRONG.
IN ORDER TO OPTIMISE REVENUE, WHITEHAVEN CONCENTRATES
THE SALE OF OUR QUALITY THERMAL COAL INTO THE PREMIUM
ASIAN MARKETS.”
SCOTT KNIGHTS – EGM MARKETING
Whitehaven Coal Annual Report 2015 / 15
3OPERATIONS5RESOURCES AND RESERVES4SUSTAINABILITY6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT1OVERVIEW2STRATEGY STRATEGIC
FRAMEWORK
These important attributes are critical to delivering on our goal to be the leading
independent ASX listed coal company. We must be the coal supplier of choice,
the employer of choice and ultimately, the coal mining investment of choice
in our sector.
GOAL
OUR GOAL IS TO BE THE LEADING ASX LISTED INDEPENDENT COAL COMPANY IN AUSTRALIA
STRATEGIC POSITION
DOMINATE THE GUNNEDAH BASIN
As the historical suppliers of quality
coal into the premium Asian markets
mines age and move up the cost curve,
Whitehaven is uniquely positioned to
fulfil the needs of those markets with
premium quality coal. Whitehaven is
now the dominant player in the only
emerging high quality coal basin
in Australia.
SUPERIOR COAL QUALITY
The world supply of high energy,
low ash and low sulphur quality coal
is constrained. As markets return
to supply/demand balance, the
relative scarcity of this coal will
attract better pricing.
FOCUSED ON PREMIUM MARKETS
High quality coal ensures we are
aligned to the markets that pay a
premium price for a premium product.
All our markets are growing and as a
result, growing their coal consumption.
1ST QUARTILE COST CURVE
Whitehaven is positioned in the
1st quartile of the thermal coal cost
curve in Australia. This will ensure
that Whitehaven remains financially
robust through the cycle.
ALIGNED TO FUTURE REGULATION
AND TECHNOLOGICAL INNOVATION
The world wants more energy created
with lower emissions. Regulatory
change around the world encourages
the use of Whitehaven’s quality coal. It
is in turn driving technological change
to reduce emissions that requires our
quality coal to meet their needs.
CRITICAL MASS IN A
CONSOLIDATED MARKET
In a consolidated market, Whitehaven’s
recently achieved scale coupled
with our long life mines positions the
company as a credible, reliable and
importantly independent supplier to
our key customers for the long term.
SUSTAINABLE FOCUS ON COMMUNITY
The whole community must benefit from our presence. As the largest employer in our region and some 77% of our people living in
the local area, $215m spent with over 600 businesses in the region and more than $120m paid in local wages, these contributions
are fundamental to our deep local connection. Whitehaven now has 9% Aboriginal employment which reflects the Aboriginal
representation in our communities, Whitehaven truly benefits the WHOLE community.
16 / A Year of Delivery
16 / A Year of Delivery
2. STRATEGY STRATEGY
IN ACTION
The Company’s goal is
to double production
from our 2014 level to
achieve sales of 23Mtpa
by FY2018 on a 100%
basis. To achieve this,
Whitehaven will carry out
Operational Excellence
and Sustainable Growth.
OPERATIONAL EXCELLENCE
LOGISTICS
This will be achieved by managing
the Company’s assets in the most
effective and efficient way. This
will be done by:
— Continually improving safety
performance across all sites
— Selling high-quality coal to
premium markets – including
J-Power’s state of the art Isogo
power station (see page 25
‘Coal Demands Grow’)
— Respecting the environment
— Achieving production and
sales targets
— Focusing on and managing costs
— Attracting and retaining high
quality people
SUSTAINABLE GROWTH
This will be achieved by ensuring
the business has sufficient resources
to underpin growth. This will be
done by:
— Focusing on continued
exploration of the tenement
portfolio to increase reserves
— Assessing expansion
opportunities from
existing assets
— Assessing potential acquisitions
that support sustainable growth
— Increasing the customer base
and focusing on value adding
propositions for customers
— Investing in learning and
development to build talent
Our coal is transported from
the Gunnedah Basin to the port
at Newcastle. Whitehaven has
sufficient contracted rail capacity
with the Australian Rail Track
Corporation (ARTC) to deliver
both current production and
expected medium term production
levels. Longer term, additional
capacity will be needed. To
support production from Maules
Creek tracks have been upgraded
to allow for full 30 tonne axle
load operations – up to 8,000
tonne trains can now operate
along the line.
Whitehaven has two rail haulage
contracts in place to 2026 – Pacific
National for 9.5Mtpa and Aurizon
for up to 16Mtpa (as Maules Creek
increases production).
Whitehaven has 6Mtpa port
capacity at NCIG in Newcastle
through an equity share of the
terminal with a further 5.3Mtpa
(until FY2015) at the PWCS
terminal. After 2015 the
Company has entered into
a ten year rolling contract
at PWCS for 12.4Mtpa.
From 2017 Whitehaven will
require additional port capacity
as the Maules Creek project
increases to produce 13Mtpa.
For more information see where
we operate on page 5.
Whitehaven Coal Annual Report 2015 / 17
3OPERATIONS5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEW2STRATEGY6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT WHITEHAVEN’S
PREMIUM COAL QUALITY
Whitehaven produces
high quality, low cost
coals from our mines.
Our low ash, high
energy coal from our
new Maules Creek
mine is redefining
thermal coal quality.
As countries strive to reduce their
carbon and other emissions they
use higher quality coals.
Both Japan and more recently
Korea have introduced tax policies
that further encourage use of
higher quality coals.
PATHWAY TO LOWER CARBON EMISSIONS
With increasing use of higher quality thermal coal, the pathway to lower
carbon emissions will see more efficient use of coal fired power stations.
Thermal Coal – Ash vs Sulphur
Ash (%a.d.)
20.0
18.0
16.0
14.0
12.0
10.0
8.0
Premium Hunter
Valley (Japan)
High Quality Coal
Whitehaven
Korea
China
Lower Quality Coal
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
1.10
1.20
.
)
.
d
a
%
(
r
u
h
p
u
S
l
18 / A Year of Delivery
2. STRATEGY
COST
REDUCTION
COSTS
To deliver our strategy, Whitehaven
places a strong focus on delivering
cost reductions across the business
while maintaining margins. Average
unit costs in FY2015 declined by
12% to $61/t from $69/t in FY2014.
The Company has grown margins
over the past two years. This has
been achieved by reducing costs
across all mines.
This reduction in costs positions
Whitehaven in the lowest quartile
of the thermal coal cost curve.
PRODUCTIVITY
With a declining coal price,
increasing productivity across
Whitehaven’s mines have become
more important than ever.
Productivity at Whitehaven’s
mines – including our largest
operations at Maules Creek
and Narrabri – is higher than
average and will continue to
improve as Maules Creek
ramps up production.
ASP, COSTS AND MARGIN (A$/t)
$85.0
$80.0
$75.0
$70.0
$65.0
$60.0
$55.0
$50.0
H1 FY13
H2 FY13
H1 FY14
H2 FY14
H1 FY15
H2 FY15
(F’cast)
Sales Price ex Royalties
Costs ex Royalties
NSW AND WHITEHAVEN MINE PRODUCTIVITY
25.0
20.0
15.0
10.0
5.0
0.0
FY
04
FY
05
FY
06
FY
07
FY
08
FY
09
FY
10
FY
11
FY
12
FY
13
FY
14
FY
15
FY
16
FY
17
FY
18
NSW t/m/y
Whitehaven t/m/y
Source of charts: Whitehaven Coal and NSW Coal Services
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Whitehaven Coal Annual Report 2015 / 19
3OPERATIONS5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEW2STRATEGY
CAPITAL
EXPENDITURE
Total Capital Expenditure
for FY2015 amounted
to $290.2m with the
focus on construction
at Maules Creek.
SUSTAINING CAPITAL
EXPANSION CAPITAL
The spend on sustaining capital
at the operating mines was
reduced from $16.5m in FY2014
to $13.7m in FY2015.
Spending on exploration tenements
has been reduced to the amount
required to maintain the tenements
in good standing.
The strong cash flows generated
by the business combined with
the refinanced debt structure
provides flexibility for the
company in future years.
20 / A Year of Delivery
2. STRATEGY FINANCIAL
STRENGTH
To support the
Company’s strategic
objectives, Whitehaven
secured a new flexible
A$1.4 billion facility
from a group of
major Australian and
international banks
in March 2015.
The new facility underpins and
enhances Whitehaven’s financial
future, by lowering financing charges
and providing additional headroom
and repayment flexibility without
penalty during the life of the facility.
The new facility consists of a
$1.2 billion drawable line of credit that
can be used for general corporate
purposes and a $200 million bank
guarantee facility. The entire facility
matures in July 2019 providing
Whitehaven with financial certainty
for the years ahead.
The syndicate consists of
14 banks, all recognising the
quality of Whitehaven’s two
world class mines.
One of the syndicate members,
Bank of Tokyo, is a banker
to one of Whitehaven’s joint
venture partners – J-Power,
in turn one of Whitehaven’s
largest customers.
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Whitehaven Coal Annual Report 2015 / 21
3OPERATIONS4SUSTAINABILITY1OVERVIEW2STRATEGY
2. STRATEGY
PREMIUM COAL MARKETS:
COAL MARKET OUTLOOK AND
ADAPTING TO MARKET CHANGES
Global demand for
coal continues to grow.
In order to optimise
revenue, Whitehaven
concentrates the sale
of our high-quality
thermal and metallurgical
coal into the premium
end user markets.
The sales mix of our coal
will improve as higher margin
metallurgical coal product rises
from 16% to over 35% of total
sales as Maules Creek ramps
to full production.
Whitehaven has successfully
sold coal into new markets in
the Asian region in 2015 further
diversifying our sales exposure
and developing new term
contract relationships.
COUNTRY INSIGHTS
PRICING
Thermal coal prices for 2014/15
as measured by the Newcastle
GlobalCOAL index averaged
US$64.40/mt, down US$13.85
or 18% on 2013/14. In A$ terms
the 2014/15 average was
$77.40/mt which was down
$7.53 or 8.9% on 2013/14
reflecting the impact of the
devaluation of the AUD/USD.
The average Hard Coking
Coal benchmark for 2014/15
was US$116.40/mt, down by
US$24.10/mt or 17.2%
on 2013/14. In A$ terms
the 2014/15 average was
$137.43/mt down $11.77
or 7.9% on 2013/14.
KEY POINTS
There is strong demand
growth in Whitehaven’s
markets. Korea, Japan and
Taiwan are adding new coal
fired power thermal power
station capacity – estimates
are that over the next eight
years this will amount to
about 30.6GW. Each GW
of generation requires about
2.5Mt of coal a year.
We are focused on building
strong relationships with a
target of long term business
to match our quality and mine
life profile. Our strategy is to
maximise revenue with focus
on markets such as Japan, Korea,
Taiwan and India. Whitehaven
did not sell any coal into China
in the second half of the year
and does not expect to sell
coal to China in the future.
HIGHLIGHTS FOR
THE GLOBAL MARKET
The global coal industry underwent
significant change in 2014/15. Whilst
overall coal demand increased by
1% y.o.y the continued oversupply in
both thermal coal and metallurgical
coal markets resulted in falling
prices across all seaborne markets
(see detail on right). This pricing
weakness has driven supply
rationalisations in several producing
regions, particularly in the traditional
swing suppliers, in particular US
and Canadian thermal and met coal
suppliers. Indonesian thermal supply
has also fallen in the second half
of the year as predominantly US$
operating costs have seen around
7% of production or 30Mtpa
annualised closed. Demand in the
traditional markets for Australian
thermal and met coal is expected
to remain relatively robust, weaker
Chinese import demand means that
the supply rationalisation will need
to continue for prices to stabilise.
22 / A Year of Delivery
WHITEHAVEN
COAL SALES
CHINA
WHITEHAVEN
SALES (FY2015)
1%
DEMAND (2018)
37Mt
WHITEHAVEN
SALES (FY2015)
38%
DEMAND (2018)
128Mt
INDIA
TAIWAN
KOREA
REPUBLIC
JAPAN
WHITEHAVEN
SALES (FY2015)
39%
WHITEHAVEN
SALES (FY2015)
26%
DEMAND (2018)
57Mt
DEMAND (2018)
140Mt
WHITEHAVEN
SALES (FY2015)
13%
DEMAND (2018)
12Mt
WHITEHAVEN
SALES (FY2015)
5%
DEMAND (2018)
45Mt
WHITEHAVEN
SALES
(FY2015)
60%
DEMAND (2018)
65Mt
WHITEHAVEN MAJOR
SALES DESTINATION
KEY
Thermal Coal
Met Coal
FY2015 Whitehaven Sales
2018 Estimated Demand (Macquarie Bank)
Note – remaining thermal coal sales to a range of other countries.
WHITEHAVEN
COAL HQ
Whitehaven Coal Annual Report 2015 / 23
3OPERATIONS5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEW2STRATEGY6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT COAL DEMAND
CONTINUES TO GROW
GLOBAL COAL DEMAND (Mt)
7000
6000
5000
4000
3000
2000
1000
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
North America South America Europe & Eurasia Middle East Africa China Asia Pacific
CUMULATIVE GROWTH IN GENERATING CAPACITY IN WHITEHAVEN’S MARKETS (GW)
80
70
60
50
40
30
20
10
0
2015
2016
2017
2018
2019
2020
2021
2022
Source for charts: BP Statisitcal Review 2015, Investment Banks, Country Data, Whitehaven Coal.
24 / A Year of Delivery
2. STRATEGY CASE STUDY – ISOGO
Continued demand for high-quality coal – such as that produced by Whitehaven – is illustrated by J-Power’s
state of the art Isogo power station.
The station is at the forefront of Japan’s push to use “clean coal” technologies to contribute to international
climate change mitigation efforts.
J-Power – a joint venture partner of Whitehaven – uses “ultra-super critical” coal technology at Isogo.
The technology involves producing steam at high temperature and high pressure – steam in units reaches
600 to 620°C – to more forcefully drive the turbines that generate electricity. Isogo’s Unit 2 has a thermal
efficiency of 43 per cent, reducing carbon emissions and making it the most advanced coal power plant
in the world.
Isogo uses coal from Whitehaven’s Narrabri mine.
Image courtesy of J-Power.
Whitehaven Coal Annual Report 2015 / 25
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INDUSTRY
IN CONTEXT
The following is sourced
from the Minerals Council
of Australia.
1. DEMAND FOR COAL
IS STRONG
Over the last decade, coal use
has grown more strongly than any
other energy source. The demand
for both metallurgical and thermal
coal is increasing as highly populated
emerging economies urbanise and
industrialise. In 2019 the world will
use 1 billion tonnes more coal than
today – more than 9 billion tonnes
a year. By 2040, the global coal
trade will increase by 40 per cent.
2. INDIA IS NOT
SHUNNING COAL
India will overtake China as the
world’s largest importer of coal
in 2025, with exports more than
tripling by 2040. There is currently
113 GW of coal-fired generation
capacity requiring 250 Mt of coal
each year – an amount twice
Australia’s total capacity today.
3. WORLD ENERGY
DEMAND CAN’T BE
MET WITHOUT COAL
World primary energy demand
will increase by 37 per cent between
2012 and 2040. Under all climate
action scenarios, coal remains an
important part of the global energy
mix. There is no credible scenario
in which all coal reserves remain
in the ground.
4. COAL IS ESSENTIAL FOR
THE MANUFACTURE OF
STEEL AND CEMENT &
DEMAND IS GROWING
Energy and steel consumption in
emerging economies has grown
rapidly in the past decade but
many of these countries still use
much less energy and steel than
advanced economies. For example,
China’s rail network is still one-third
that of the United States and one-
sixth of the European Union despite
its larger land mass and population.
Moreover, it is not possible to build
a wind turbine without coal. There
is more than 220 tonnes of coal
in every wind turbine.
5. AUSTRALIA DOESN’T
HAVE TO CHOOSE
BETWEEN COAL
& A LOW-EMISSIONS
FUTURE
High efficiency, low emissions
(HELE) coal-fired generators emit
20-25 per cent less CO2 than the
average of existing power stations
and up to 40 per cent less than
the oldest technology in place.
With carbon capture and storage
(CCS), a 90 per cent reduction
in emissions can be achieved.
This technology is working now:
— CO2 emissions from modern
ultra supercritical coal plants
are comparable with those from
open cycle gas fired generation
— There are 13 large-scale CCS
projects in operation around
the world capturing 40 million
tonnes of CO2 a year
— Canada’s SaskPower launched
the world’s first commercial
scale, coal-fired power plant
with CCS in 2014. It injects
90 per cent of the CO2
emissions produced
“COAL IS AUSTRALIA’S SECOND LARGEST
EXPORT. IT CONTRIBUTED $40 BILLION
TO NATIONAL INCOME IN 2013-14 AND
WILL CONTRIBUTE $47 BILLION A YEAR
BY 2019-20.”
26 / A Year of Delivery
2. STRATEGY 10. COAL IS ALLEVIATING
GLOBAL POVERTY
Between 1990 and 2010, about
830 million people – the vast
majority in developing countries –
gained access to electricity due
to coal. Twice as many people
gained electricity from coal as
natural gas and for every person
who obtained electricity from
non-hydro renewable sources
such as wind and solar, about
13 gained access due to coal.
Affordable, reliable energy is
a precondition for economic
growth and an escape from
poverty. The cheapest, fastest
way to provide that electricity
is through cheap, modern, lower
emissions coal generation power.
6. LOW EMISSION COAL
8. COAL WILL CONTINUE
TECHNOLOGY IS BEING
DEPLOYED IN AUSTRALIA
Since 2007, the Australian coal
industry has committed more than
$300 million in a range of projects,
with tens of millions of dollars more.
Projects supported by the industry
have successfully captured CO2 at
a coal-fired power plant at Callide
in Queensland’s Bowen Basin,
sequestered 65,000 tonnes of CO2
in a depleted gas field in Victoria’s
Otway Basin and intensified the
search for storage sites for future
CCS projects with exploration work
underway or planned in Queensland,
New South Wales, Victoria and
Western Australia.
7. COAL WILL REMAIN
A SOUND INVESTMENT
Coal remains a sound investment,
with banks continuing to lend to
new and existing projects. Global
financing for coal mining rose to
US$66 billion in 2014, up from US
$55.28 billion in 2013 and a 360
per cent increase from 2005.
TO UNDERPIN
AUSTRALIA’S
PROSPERITY
Coal is Australia’s second largest
export. It contributed $40 billion
to national income in 2013-14 and
will contribute $47 billion a year
by 2019-20.
Coal mining employs 45,800
people directly and supports the
jobs of another 123,660. The
industry paid $3.1 billion in royalties
last financial year – $1.8 billion in
Queensland, $1.3 billion in New
South Wales. Over the four years,
black coal royalties will total $18.1
billion – $11.3 billion in Queensland,
$6.8 billion in New South Wales.
9. THE AUSTRALIAN COAL
INDUSTRY DOES NOT
RELY ON SUBSIDIES
The Productivity Commission’s
independent analysis of government
assistance found ‘The estimated
effective rate of assistance from
tariff and budgetary assistance
for mining has been negligible.’
At a global level, the International
Monetary Fund has found that just
1.25 per cent of so-called ‘fossil
fuel subsidies’ are directed to the
coal sector.
Whitehaven Coal Annual Report 2015 / 27
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3OPERATIONS4SUSTAINABILITY2STRATEGY
Operational Achievements
Maules Creek
Narrabri
Open Cuts
New Growth: Vickery
30
32
34
36
38
KEY HIGHLIGHTS
MAULES CREEK
NARRABRI
1ST COAL
SUCCESSFULLY RAILED
7.7Mt ROM
RECORD COAL PRODUCTION
28 / A Year of Delivery
3. OPERATIONS “ WHITEHAVEN HAS DELIVERED ANOTHER RECORD-BREAKING
YEAR OF PRODUCTION, WHILE ENSURING OUR SAFETY RECORD
ACROSS THE COMPANY HAS CONTINUED TO IMPROVE.”
Jamie Frankcombe – EGM Operations
EQUITY SALEABLE PRODUCTION
VICKERY
11.3Mt
SALEABLE PRODUCTION
PROJECT
RECEIVED APPROVAL
Whitehaven Coal Annual Report 2015 / 29
2STRATEGY5RESOURCES AND RESERVES4SUSTAINABILITY3OPERATIONS6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT1OVERVIEW OPERATIONAL
ACHIEVEMENTS
IMPROVED SAFETY RESULTS
FROM THE PREVIOUS YEAR
Both key safety statistics (TRIFR AND LTIFR) that measure the safety
outcome across the company improved in FY2014.
EARLY PRODUCTION
FROM MAULES CREEK & PROGRESSIVE RAMP UP OF PRODUCTION
Whitehaven employees began mining three months ahead of schedule
and have ramped up production faster than originally anticipated.
RECORD PRODUCTION
FROM NARRABRI AND STRONG PRODUCTION FROM THE OTHER MINES
All mines in the portfolio performed strongly despite tough market
conditions and changes to rosters.
PRODUCTION COSTS FELL
DURING THE YEAR CONTINUING THE TREND THAT COMMENCED IN 2013
Whitehaven has successfully maintained its average cash margin and
in the second half year increased its cash margin despite lower coal prices.
30 / A Year of Delivery
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Whitehaven Coal Annual Report 2015 / 31
3. OPERATIONS
MAULES CREEK ROM PRODUCTION (000’S t)
1600
1200
800
400
Dec 2014
Mar 2015
Jun 2015
32 / A Year of Delivery
MAULES
CREEK
Ownership: Whitehaven
75% and Operator;
ICRA MC Pty Ltd (an
entity associated with
Itochu Corporation)
15%; J-Power Australia
Pty Ltd 10%.
Whitehaven’s newest mine,
Maules Creek, commenced
railing coal in December 2014,
less than a year after construction
commenced. The mine, when
operating at its annualised design
capacity of 12mtpa saleable coal,
in 2018, will double Whitehaven’s
coal production to over 23Mtpa
making the company the largest
independent coal producer
in Australia.
Monthly production has gradually
been increasing with the addition
of management, mining equipment
and employees. Mine production
in the June half of FY2015 achieved
an annualised rate of 6Mt. Mine
production will increase in the
December half of FY2016 when
additional excavators and trucks
are commissioned, and staff are
recruited and trained. The additional
mining equipment commenced
arriving on site late in FY2015 and
once commissioned will increase
production to an annualised rate
of about 8.5Mt early in the second
half of FY2016.
Capital invested at the mine
during the construction phase
will be around $27 million less
than the original estimate of
$767 million. The savings were
due to a combination of good
construction contractor
performance and the strong
leadership of the Whitehaven
project management team.
Last year, as part of the employee
recruitment process at Maules
Creek, Whitehaven adopted
a policy to grow Aboriginal
participation in the workforce.
At 30 June 2015 there were
30 employees at Maules Creek
identifying as Aboriginal.
This represents 15% of the
Maules Creek workforce and
it exceeds the initial target
that was set last year of 10%
of employees within five years.
Demand for Maules Creek thermal
coal has been strong. Production
for the first year is completely sold
out. Feedback from customers has
been positive with the delivered
coal either meeting or exceeding
their expectations. Production
of metallurgical coal products
will commence in the first half
of FY2016 with trial cargoes to
several steelmakers. Interest
from Japan is high, following
a marketing campaign by the
Group’s marketing team.
CATEGORY
Ownership
Location
Tenements
Coal Types
Life of Mine
STATISTIC
Whitehaven 75%, ICRA MC Pty Ltd 15% (an entity associated with Itochu Corp)
and J-Power 10%
45 kilometres southeast of Narrabri and 17km northeast of Boggabri in the Gunnedah
Basin of New South Wales, Australia
CL375 and AUTH346
50% SSCC/PCI coal and 50% high energy, low sulphur, low ash thermal coal
30+ years
Coal Reserves
381Mt (Recoverable), 349Mt (Marketable)
Coal Resources
650Mt Open cut
Project Status
Mine declared commercial on 1 July 2015 and operating at an annualised rate of 6Mt
Employees
232 as at 30 June 2015, increasing to 450 when operating at full capacity
2015 Production Target
1.9Mt ROM coal
2015 Actual Production
2.6Mt ROM coal
2016 Production Target
7.1Mt – 7.3Mt ROM coal
Whitehaven Coal Annual Report 2015 / 33
2STRATEGY5RESOURCES AND RESERVES4SUSTAINABILITY3OPERATIONS 1OVERVIEW6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT NARRABRI
Ownership: Whitehaven
70% and Operator;
J-Power 7.5%; EDF
Trading 7.5%; Upper
Horn Investments
Limited 7.5%; Daewoo
International Corporation
and Korea Resources
Corporation 7.5%.
Narrabri had a very strong
production year. Narrabri set
new mine production and
roadway development records
of 7.7Mt ROM coal and 19,800
metres respectively. Production
in FY2015 was almost 30% above
the design capacity of 6Mtpa.
A number of factors combined
to deliver this strong production
performance including a motivated
and productive workforce, and
software upgrades to the longwall
which have increased longwall
automation and reduced down
time. As a direct consequence
of the higher production levels,
production costs have fallen with
Narrabri confirming its place as
Whitehaven’s lowest cost mine.
One longwall move was completed
during the first half of the year when
mining in the third panel (LW03) was
completed. Mining recommenced in
LW04 on schedule in late November
2014 after the six week changeout
was completed. Because of the
record production rates in FY2015
it is anticipated that two full longwall
changeouts will be necessary in
FY2016. Consequently, production
in FY2016 is forecast to be lower
than for FY2015.
Narrabri has further production
growth potential. A decision to
widen the longwall face to 400
metres, from the current 300 metres,
will be taken during the September
quarter 2015. This low risk option
will increase production and reduce
operating costs at the mine.
CATEGORY
Ownership
Location
Tenements
Coal Types
Life of Mine
STATISTIC
Whitehaven 70%, J-Power 7.5%, EDF Trading 7.5%, Upper Horn Investments 7.5%
and Daewoo International and Korea Resources Corporation 7.5%
17 kilometres southeast of Narrabri and 70km northwest of Gunnedah
ML1609 and EL6243
Approximately 80% high energy, low sulphur, low ash thermal coal and 20% PCI coal
22+ years
Coal Reserves
230Mt (Recoverable), 204Mt (Marketable)
Coal Resources
730Mt
Employees
367 (as at 30 June 2015)
2015 Production Target
6.5Mt ROM coal and 6.2Mt product coal
2015 Actual Production
7.7Mt ROM coal and 7.2Mt product coal
2016 Production Target
6.6Mt – 6.8Mt ROM coal and 7.0Mt – 7.2Mt product coal
34 / A Year of Delivery
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NARRABRI SALEABLE COAL PRODUCTION (000’S t)
8000
7000
6000
5000
4000
3000
2000
1000
2011
2012
2013
2014
2015
Whitehaven Coal Annual Report 2015 / 35
3. OPERATIONS
OPEN CUT SALEABLE COAL PRODUCTION (000’S t)
6000
5000
4000
3000
2000
1000
2011
2012
2013
2014
2015
36 / A Year of Delivery
OPEN CUTS
Ownership: Werris
Creek – Whitehaven
100%; Rocglen –
Whitehaven 100%;
Tarrawonga –
Whitehaven 70%
and operator
“THE FOCUS AT
EACH OF THE
MINES DURING
THE YEAR WAS
ON COST
REDUCTION TO
ENSURE THAT
EACH MINE
CONTRIBUTED
POSITIVE
CASH FLOW
TO WHITEHAVEN.”
Saleable coal production of 5.1Mt
from the three smaller open cut
mines met expectations for the
year. The focus at each of the
mines during the year was on cost
reduction to ensure that each mine
contributed positive cash flow to
Whitehaven. New rosters, full year
procurement benefits and operating
initiatives were introduced during
the year. The open cuts have been
able to maintain saleable coal
production levels following the
changes. The changes at both
Werris Creek and the Gunnedah
CHPP, regrettably, led to some
redundancies at each operation.
It is expected that production levels
from these open cut mines can be
maintained at current levels for the
next three years before Reserves at
Rocglen are exhausted in FY2019.
CATEGORY
Ownership
Location
Tenements
Coal Types
Life of Mine
STATISTIC
Tarrawonga: Whitehaven 70%, Idemitsu 30%. Rocglen and Werris Creek:
Whitehaven 100%
In the Gunnedah region
Tarrawonga: ML1579, EL5967 and CL368. Rocglen: ML1620. Werris Creek: ML1563
and ML1672
Various qualities of thermal coal, SSCC and PCI coal
Tarrawonga +15 years, Rocglen 3 years and Werris Creek approximately 8 years
Resources and Reserves
See full tables on pages 68 and 69
2015 Production Target
5.7Mt ROM coal and 5.3Mt product coal
2015 Actual Production
5.5Mt ROM coal and 5.1Mt product coal
2016 Production Target
5.0Mt – 5.2Mt ROM coal and 4.7Mt – 4.9Mt product coal
Whitehaven Coal Annual Report 2015 / 37
2STRATEGY5RESOURCES AND RESERVES4SUSTAINABILITY3OPERATIONS 1OVERVIEW6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT
3. OPERATIONS
GROWTH PROJECTS:
VICKERY
Ownership:
Whitehaven 100%
Vickery is a high quality metallurgical
and thermal coal project with
products that are expected to be
highly sought after by customers in
premium markets. While Whitehaven
has not yet commenced the process
to form a joint venture at Vickery,
the interest level displayed by
strategic investors is high.
Vickery has the potential to
become Whitehaven’s third major
mine in the Gunnedah Basin
when it is developed. Timing of
the development has not been
determined but it is likely to
occur following the full ramp
up of Maules Creek to its
13Mtpa ROM capacity.
The Vickery open cut project
was approved by the New South
Wales Department of Planning
and Infrastructure on September 19,
2014. The approval is for an
open cut project to produce
4.5Mtpa ROM coal, with the coal
to be transported along an
approved haulage route to
the Gunnedah CHPP.
Since 2012, when Whitehaven lodged
the application for the 4.5Mtpa
project with the NSW Government,
the Company has increased the
total Resources and Reserves in the
Vickery project area. These larger
Reserves are capable of supporting
a higher annual production rate
while maintaining a mine life longer
than 20 years. Project economics
improve significantly in the higher
production case.
Whitehaven has begun the process
of compiling the necessary work
and documentation needed to
apply to increase the approval rate
from 4.5Mtpa to 8Mtpa. When the
process has advanced sufficiently
Whitehaven will look to form a joint
venture with potential strategic
investors who are prepared to sign
off-take contracts for the products.
Up to 30% of the project would be
sold to the incoming party or parties.
The funds raised from the sale would
be used to fund Whitehaven’s share
of the project development costs.
CATEGORY
Ownership
Location
Tenements
Coal Types
Life of Mine
STATISTIC
Whitehaven 100%
About 23 kilometres north of Gunnedah in the Gunnedah Basin of
New South Wales, Australia
CL316, EL 4699, EL5831, EL 7407, EL8224, AUTH406
Over 55% SSCC/PCI coal and 40% high energy, low sulphur, low ash thermal coal
20+ years in the 8Mtpa case (212Mt ROM)
Coal Reserves
200Mt (Recoverable), 178Mt (Marketable)
Coal Resources
505Mt Open Cut
Project Status
New South Wales Government approval received September 2014 for an
open-cut mine project producing up to 4.5Mtpa ROM coal
Proposed Mining
Operation
The Vickery open-cut mine has a strip ratio of 10.4:1. Current approval is for
production of 4.5Mtpa ROM.
38 / A Year of Delivery
“ VICKERY HAS THE POTENTIAL TO BECOME WHITEHAVEN’S THIRD
MAJOR MINE IN THE GUNNEDAH BASIN WHEN IT IS DEVELOPED.
TIMING OF THE DEVELOPMENT HAS NOT BEEN DETERMINED AS
YET. HOWEVER, IT IS LIKELY TO OCCUR FOLLOWING THE FULL
RAMP UP OF MAULES CREEK TO ITS 13MTPA CAPACITY.”
Whitehaven Coal Annual Report 2015 / 39
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2STRATEGY5RESOURCES AND RESERVES4SUSTAINABILITY3OPERATIONS 1OVERVIEW6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT
Sustainable Development
Performance Data
Stakeholder Engagement
Health and Safety
Environment
People
Diversity
Community
Aboriginal Engagement
42
44
45
48
50
54
56
60
64
KEY HIGHLIGHTS
SAFETY
EMPLOYEE SATISFACTION
9.2 TRIFR
INJURIES PER MILLION HOURS
WORKED – COMPANY RECORD
77%
EMPLOYEES SATISFIED WITH
COMPANY AS PLACE TO WORK
ABORIGINAL WORK FORCE
EMPLOYEE SATISFACTION
8%
THROUGHOUT THE
COMPANY
40 / A Year of Delivery
95%
RESPONSE RATE FROM
EMPLOYEE SURVEYS
4. SUSTAINABILITY “THE HEALTH, SAFETY, ENVIRONMENT AND COMMUNITY COMMITTEE
ANALYSES ALL OF OUR MAJOR ACTIVITIES IN TERMS OF THE BROAD
RANGE OF SUSTAINABLE DEVELOPMENT CONSIDERATIONS AND
ENCOURAGES AND SUPPORTS STEPS TAKEN BY OUR MANAGEMENT
TO ENSURE WHITEHAVEN DELIVERS ON OUR PROMISES…”
Tony Haggarty – Chairman of the HSEC Committee, Independent Director
ENVIRONMENT
LOCAL COMMUNITY
550
HECTARES OF LAND
UNDER REHAB
DONATIONS/SPONSORSHIP
NSW ECONOMY
$182K
SUPPORT TO
DIFFERENT CAUSES
$214.9M
SPENT WITH LOCAL SUPPLIERS
& BUSINESSES
$84.3M
PAID ROYALTIES TO
NSW GOVERNMENT
Whitehaven Coal Annual Report 2015 / 41
4SUSTAINABILITY5RESOURCES AND RESERVES6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT1OVERVIEW2STRATEGY3OPERATIONS SUSTAINABLE
DEVELOPMENT
SAFEHAVEN
PROGRAM PROGRESSED
WITH IMPROVED RESULTS
Whitehaven Coal places an ongoing emphasis on
a strong operational culture and ensuring that the
company contributes to sustainable development
in the regions where we operate.
GREATER
DIVERSITY
IN THE WORK PLACE
$214.9M
SPENT WITH LOCAL
SUPPLIERS DURING
THE YEAR
Whitehaven Coal operates predominantly in the Gunnedah Basin. We have
a small corporate office in Sydney, a marketing and logistics team, a shared
services team in Newcastle and a marketing office in Tokyo, Japan.
In the Gunnedah Basin we are a large employer with over 75% of our 779 full
time equivalent employees living in the region surrounding our operations.
We source products and services from over 600 businesses in the local
government shires surrounding our mines. We support community projects
via donations to local charities and we make voluntary planning agreement
payments to local councils that help supply improved services to local
residents. We regularly report our activities to the Community Consultative
Committee that has been established for each mine we operate. We seek
to maintain our social licence by ensuring that we operate sustainably
in the Gunnedah Basin.
The Health, Safety, Environment and Community (HSEC) Committee analyses
each of our major activities through the lens of sustainable development
and encourages and supports steps taken by our management to ensure
Whitehaven delivers on our promise to be a ‘good corporate citizen’.
One of the main ways in which we can be a ‘good corporate citizen’ is to
have zero injuries and illnesses across our operations. We want our people
to return home to their family and friends at the end of a work day tired from
having given a hard day’s work but safely and in good health. To support this
objective in 2014 we introduced the seven “Safehaven Rules”. I am pleased
to report that since the Safehaven program began we have seen a significant
reduction in the number of injuries our people have sustained at work. The
past year has seen a 35% reduction in the rate of recordable injuries across
the company and we are operating well below the NSW coal mining average.
In an agricultural community good land management is important.
Whitehaven is a substantial landholder. In total, we own 63,000 hectares
of land, including 22,000 hectares that are managed as biodiversity offset
lands and 35,000 hectares that are used for agricultural activities. Only 2,000
hectares of land that we manage is either disturbed by mining activities or
under rehabilitation. We are committed to ensuring high standards are set
42 / A Year of Delivery
4. SUSTAINABILITY “WHITEHAVEN IS CONTINUALLY SEEKING TO
FIND SAFER, SMARTER, MORE SUSTAINABLE
WAYS TO RUN OUR BUSINESS. TO ACHIEVE
IMPROVED PERFORMANCE, WE WORK
HAND-IN-HAND WITH OUR PARTNERS
AND COMMUNITIES ON THE GROUND,
WHERE IT MATTERS MOST.”
and applied to manage biodiversity
offset properties and for the
rehabilitation of areas disturbed
by mining activities.
We are mindful of the impact
of our operations on the environment
and surrounding communities.
Given the nature of our business
we can generate dust, noise and
blasting impacts and we use
water in our operations. We have
comprehensive management plans
to minimise these impacts and
have a large monitoring network
in place that monitors noise,
dust and blasting levels. We also
monitor the quality of water that
is discharged from each of our
licenced discharge points. We
monitor activities so that we
minimise the impacts of our
operations on the environment
and our neighbours and the
local community. We report this
data on our website and to the
regular Community Consultation
Committees and we promptly
respond to concerns that are
raised from time to time.
We are pleased that our commitment
to employing a local workforce
wherever possible is ensuring that
the communities in which we operate
continue to thrive. More than three
quarters of our workforce live and
work in the region of our operations,
We strongly believe that the
presence of our employees and
their families is helping the region
grow, to be a more attractive place
to live and work and that our
presence is helping to bring
improved levels of services
to many towns and villages
in the Gunnedah Basin.
Our commitment extends to
the Aboriginal and Torres Strait
Islander communities which make
up about 10% of the population
in the Gunnedah Basin. It is our
strong belief that the best way we
can support the Aboriginal and
Torres Strait Islander communities
is to provide Aboriginal and Torres
Strait Islander people with the
opportunity to secure stable, long-
term employment. Last year we
made a commitment that after five
years at least 10% of our workforce
at Maules Creek would be Aboriginal
and/or Torres Strait Islander people.
We are pleased to report that we
are ahead of schedule. As at 30
June 2015 Aboriginal and/or Torres
Strait Islander employees at Maules
Creek totalled more than 15% of the
workforce. In a recent employee
survey where more than 700
employees responded, 8% of those
responding employees identified
themselves as being of Aboriginal
and/or Torres Strait Islander descent.
A community is made up of men
and women of different cultures and
ages. Overall female representation
across our workforce has remained
steady at about 9%, but we have
made progress to diversify our
gender base in a number of
important areas – leadership roles
comprise 15% female employees,
with 50% of our marketing and
logistics team and 46% of our
HSEC team being women.
We will continue to focus on growing
a greater number of women in our
workforce, so that the benefits of our
presence are more widely delivered
to the Gunnedah Basin community.
Whitehaven has an ongoing
partnership with regional educational
institutions to provide traineeships,
internships and early childhood
education. We are motivating
students to acquire relevant industry
knowledge with the potential to
work for the company or suppliers
to the company upon completion
of their education. This will enhance
our position as an employer of
choice in the local communities
in which we operate.
We aim to continue to make
strides in the area of sustainable
development and we will uphold
our commitments in this area.
I would like to thank everyone at
Whitehaven for their efforts and
hope that the coming year will
bring further notable progress.
Tony Haggarty
Chairman of the HSEC Committee
Whitehaven Coal Annual Report 2015 / 43
5RESOURCES AND RESERVES1OVERVIEW6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT4SUSTAINABILITY3OPERATIONS2STRATEGY PERFORMANCE
DATA
PERFORMANCE DATA 2014-2015
Health, Safety, People
Number of employees (FTE)
Fatalities
Total recordable injury frequency rate per million
hours worked (TRIFR)
Lost time injury frequency rate per million hours
worked (LTIFR)
Environment
Greenhouse gas emissions (tonnes CO2 equivalent)
Intensity – greenhouse gas emissions
(tonnes CO2-e per tonne ROM coal)
Total energy use (gigajoules)
Intensity – total energy use (gigajoules per tonne ROM coal)
Environment
Land footprint – owned (hectares)
Land footprint – disturbed (hectares)
Land footprint – rehabilitated (hectares)
Land footprint – leased for agriculture (hectares)
Land footprint – biodiversity offset (hectares)
Economic
Wages and salaries ($m)
Payments in taxes and royalties to governments ($m)
Payments to suppliers in northwest NSW ($m)
Voluntary planning agreement expenditure
* most recent reportable period
44 / A Year of Delivery
YEAR TO 30 JUNE 2015
YEAR TO 30 JUNE 2014
779
0
9.2
1.1
655
0
14.6
3.7
YEAR TO 30 JUNE 2014
YEAR TO 30 JUNE 2013
465,612
0.04
2,212,164
19.81
459,511
0.05
2,173,644
23.95
YEAR TO 30 JUNE 2015
YEAR TO 30 JUNE 2014
63,270
1,450
550
35,233
22,123
57,296
827
504
30,350
20,452
YEAR TO 30 JUNE 2015
YEAR TO 30 JUNE 2014
$125.6
$129.6
$214.9
$907,000
$110.2
N/A
$183.3
N/A
4. SUSTAINABILITY
STAKEHOLDER
ENGAGEMENT
PROACTIVE DIALOGUE
A proactive stakeholder engagement programme helps us to respond effectively to changes in the Company’s
operating environment. This table identifies our key stakeholder groups. It outlines why we engage with them,
reflects key focus areas for each and tracks our actions in each area. More information see our Corporate Governance
section on our website at www.whitehavencoal.com.au.
STAKEHOLDER GROUP
WHY WE ENGAGE
KEY FOCUS AREAS
WHAT WE ARE DOING
Customers and Joint
Venture Partners
Shareholders and
Financial Community
Customers and joint
venture partners:
— Matching product mix
to customer demand
— Reliability of supplies
— Compliance with
contract provisions
and legal requirements
Regional economic
development:
— Procurement standards
outlined in all tenders
— Rigorous due diligence
of all partners to
establish their integrity
Corporate governance:
— Financial results
— Coal market
developments
— Strategy
— Risks (Business
threats and
opportunities)
As a vital element of the
Company’s strategy, the
reliable and transparent
relationship with our
customers and joint
venture partners drives the
Company’s performance.
Whitehaven aims to sustain
these mutually beneficial
partnerships to ensure
progress and promote
growth of the company.
As a publicly listed
company we need to
provide open, timely and
transparent information to
help our investors make
informed decisions about
our financial and non-
financial performance.
We also work with funding
providers, banks and
insurers to ensure the
Company remains on
strong financial footing.
— Understanding customer
needs (including direct
meetings, customer
surveys, round tables,
workshops and industry
conferences)
— Standards and
information on the
Company’s tenders
and procurement plans
— Meetings with
(potential) suppliers
and business partners
— Monitoring performance
— Presentations, webcasts
and conference calls
between management
and financial community
— Publication of relevant
AGM/EGM documents
— Meetings between
management and
financial community,
including road
shows and industry
conferences
— Investor and analyst
days, including site visits
— General meetings
of shareholders
— Perception studies
among investor and
financial community
— ASX releases on
material issues and
key company events
Whitehaven Coal Annual Report 2015 / 45
5RESOURCES AND RESERVES1OVERVIEW6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT4SUSTAINABILITY3OPERATIONS2STRATEGY STAKEHOLDER ENGAGEMENT
STAKEHOLDER GROUP
WHY WE ENGAGE
KEY FOCUS AREAS
WHAT WE ARE DOING
Employees
Local Communities
Every aspect of our
strategy is based on
a commitment to our
people, for us to attract
and retain the best talent.
Their knowledge, their
willingness to work and
their satisfaction are the
keys to the Company’s
successful operations.
We put an emphasis on
creating the conditions
for professional and
career growth for our
people. It is essential
for us, and strengthens
loyalty to the business.
The growth and
development of the
Company needs to be
supported by the local
communities in which
we operate.
A better quality of life
for our people and local
communities through the
projects and programs
we support ensures
the sustainability of our
operations, helping us to
fulfil our commitments
as a leader in the industry.
Government and
Local Authorities,
Industry Bodies
The Company complies
with State and Federal
laws and regulations.
Whitehaven aims to
establish and maintain
stable and constructive
relations with local,
state and Federal
government authorities,
based on the principles
of accountability, good
faith and mutual benefit.
46 / A Year of Delivery
Establishing and ensuring
best practice HR standards
across the Company,
underpinned by:
— Financial and non-
financial incentives
— Learning and
development
opportunities
— Compliance with
health and safety
— Employing HR Policy
and Health and
Safety Policy
— Setting consistent
standards across
the Company
— Internal
communications,
newsletters
and feedback
— Meetings between
management
and employees
— Ensuring safety
in the workplace
— Employee satisfaction
and engagement
surveys
Ensuring environmental
compliance and mitigation
of environmental impact
wherever possible:
— Meetings with
representatives
of local communities
— Implementation
— Contributing to
local community
development
projects and
social projects
— Corporate
philanthropy
— Supporting
infrastructure
development and
modernisation
through voluntary
planning agreements
with local councils
— Supporting
educational, sporting
and cultural events
— Engagement with
Aboriginal and
Torres Strait Islander
communities within
the region
Establishing corporate
governance systems to
ensure compliance:
— Taxation and
Royalty payments
— Maintaining a dialogue
with government
authorities on current
legislative and
regulatory issues
and support of local
community development
programmes
— Projects and
partnerships to deliver
opportunities to local
Aboriginal and Torres
Strait Islander people
— Engagement with
local media
— Public consultation
— Information disclosure
and reporting
— Dialogue with
government authorities
on legislative and
regulatory issues
— Development of
partnership agreements
— Participation in
workshops and
expert panels
— Local community
development planning
4. SUSTAINABILITY “ AS A VITAL ELEMENT OF THE COMPANY’S STRATEGY, THE RELIABLE
AND TRANSPARENT RELATIONSHIP WITH OUR CUSTOMERS AND
PARTNERS DRIVES THE COMPANY’S PERFORMANCE. WHITEHAVEN
AIMS TO SUSTAIN THESE MUTUALLY BENEFICIAL PARTNERSHIPS TO
ENSURE PROGRESS AND PROMOTE GROWTH OF THE COMPANY”
Whitehaven Coal Annual Report 2015 / 47
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3OPERATIONS2STRATEGY
HEALTH
AND SAFETY
100
EMPLOYEES TOOK PART
IN ANNUAL SAFEHAVEN
CONFERENCE
35%
REDUCTION IN TRIFR
MAKING OPERATIONAL
SAFETY OUR PRIORITY
Why these issues are
important to us
Absence of fatalities, injuries
and occupational illness and
diseases is one of the key goals
of an efficient business. Each
employee expects to work in
a safe and healthy environment.
At the same time, the Company
expects its employees to follow
its safety rules. Jointly supporting
these principles, we will be able
to lift our business to a higher
level of performance and a
sustainable future.
Approach
Our commitment to health and
safety is the foundation of how
we work toward our goal of
everyone going home safe and
healthy after each work day.
For us to achieve this goal, every
person working at Whitehaven
must be fully engaged. To this
end we are building a positive
culture where each person
contributes to improving our
safety performance and has
the confidence to stop work
and ensure it is safe.
Key Priorities
— Achieve zero workplace injuries
— Achieve zero workplace illnesses
In 2014, Whitehaven adopted the
Seven Safehaven Rules which
demonstrated the Company’s
belief that safety and a safe
working environment are key
priorities that should be taken
into account in all actions and
decisions, regardless of the type
of work people are engaged in.
Safety – Performance Indicators
Our 2015 results confirm the
effectiveness of the Safehaven
Rules introduced by Whitehaven
in 2014. The Whitehaven group
registered no fatal accidents and
TRIFR decreased from 14.1 to 9.2.
This included 1.5 million hours
worked on the Maules Creek
construction project.
All high risk accidents were
investigated and necessary measures
taken to prevent similar incidents.
The Safehaven Rules were supported
by a company-wide annual safety
conference. A video featuring our
workforce was created to clearly
explain the rules. We continue
to collaborate industry-wide to
share and apply best practice
in helping us further improve
safety performance.
We have a good safety performance
record but we do strive to improve
on this every year. In 2015 we
updated our safety strategy to
strengthen our emphasis on injury
reduction through identifying
critical risks, verifying we have
controls in place and providing
appropriate leadership training.
2015 KEY FACTS
— No fatalities at Group operations
— A 35% reduction in TRIFR
— 72% reduction in lost time
injury frequency rate
— Over 100 employees involved
in annual Safehaven Conference
48 / A Year of Delivery
4. SUSTAINABILITY WHITEHAVEN AND NSW COAL INDUSTRY TRIFR
25.0
20.0
15.0
10.0
5.0
0.0
JUL 12
JAN 13
JUL 13
JAN 14
JUL 14
JAN 15
Whitehaven TRIFR
NSW Average
HEALTH
We believe that nothing is more
important than the health of our
people. The Company takes care
of its employees by preventing
and reducing their exposure to
occupational health hazards,
for example exposure to noise,
dust and whole of body vibration.
We also focus on promoting
the fundamentals of fitness
for work, particularly for
safety-critical roles.
The potential for fatigue to
contribute to safety incidents is
understood across the industry
and Whitehaven uses a range
of methods to reduce potential
for harm.
As part of our wellness programme,
specific campaigns have been
implemented on smoking, obesity,
mental health, stretching, hydration
and skin cancers.
TRAINING
Making employees aware of
our health and safety expectations
and developing an interdependent
safety culture plays a key role in
ensuring workplace safety. Before
starting work at Whitehaven’s sites,
employees take part in a rigorous
induction programme and receive
the relevant workplace training.
Everyone working at Whitehaven
is responsible for ensuring
workplace safety and they are
expected to stop work and
challenge their peers if they
observe unsafe practices.
HEALTH AND SAFETY
REQUIREMENTS FOR
CONTRACTORS
When it comes to health and safety,
Whitehaven makes no distinction
between its own employees and
contract personnel. The Company
checks all potential contractors
to ensure that they have all
necessary health and safety
systems and standards, and
that their employees receive
appropriate health and safety
training. Agreements with
contractors expressly specify
that their employees must
comply with Whitehaven’s
Safehaven Rules and our
safety standards. Contract
personnel receive health and
safety induction training and
take part in pre-start meetings
and toolbox talks with our
broader workforce where
appropriate. Whitehaven staff
carry out regular health and
safety inspections and checks
during contract periods.
Whitehaven Coal Annual Report 2015 / 49
5RESOURCES AND RESERVES1OVERVIEW6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT4SUSTAINABILITY3OPERATIONS2STRATEGY ENVIRONMENT
2.3%
OWNED LAND USED
FOR MINING ACTIVITIES
22,000
HECTARES OF LAND
UTILISED FOR
BIODIVERSITY OFFSETS
35,000
HECTARES OF LAND
LEASED TO LOCAL
FARMERS
MINIMISING OUR IMPACT
Sustainable development and
operations are important to us
because sustainable ecosystems,
biodiversity and a healthy
environment are vital conditions
for the Gunnedah Basin and the
wellbeing of generations of people
that currently live there and those
that will live there in the future.
For this reason, a responsible
approach to the environment
is core to our business. We
demonstrate this approach
by adopting best practices in
mine planning, operation, water
management and rehabilitation
activities and by minimising
energy consumption and CO2
equivalent emissions.
2015 KEY FACTS
— 63,270 hectares of land in total
are owned by Whitehaven.
— 22,000 hectares of land are
used for biodiversity offsets
— 35,000 hectares of land are
used for agricultural purposes
— 2,000 hectares or about 2% of
land are either used in current
mining operations or are being
rehabilitated following mining
Like all extractive industries, our
operations do impact on the
environment and on surrounding
communities. We aim to minimise
and eliminate negative impacts
because we aim to have zero
environmental incidents and also
capitalise on the many positive
benefits that we deliver.
We have developed a range
of practical environmental
programmes to:
— Manage and minimise impacts
generated by mining including
noise, dust and blasting
— Reduce our demand upon
regional water supplies
— Rehabilitate mining land and
return it to productive use
— Set aside and manage biodiversity
conservation areas responsibly
— Avoid, reduce, recycle and
dispose of waste; and
— Minimise energy consumption
and CO2 equivalent emissions.
We work in partnership with
stakeholders that include local
communities, environmental
protection organisations and
conservation advisors. This
collaborative approach helps
us best manage the challenges
and opportunities we face.
DUST
Our operations can generate dust and
we have developed and implemented
systems that allow us to monitor dust
levels so that we not only comply
with our licence conditions but also
respond pre-emptively by applying
appropriate controls. Our continuous
monitoring systems allow us to
manage our activities and to minimise
the impact of dust generation. Our
operations are the subject of strict
dust limits that are overseen by
several state government regulatory
bodies. The results of our dust
monitoring are made available on our
website and are distributed in each
meeting of the relevant Community
Consultative Committee.
50 / A Year of Delivery
4. SUSTAINABILITY CASE STUDY – LICENSING FARMLAND
Trent Hall is a local farmer from a respected farming family in the region. Trent currently licenses several
Whitehaven-owned properties. Trent has applied a number of pasture improvement initiatives in addition
to improving farm infrastructure such as provision of stock water and fences.
“Whitehaven Coal has provided an opportunity for my family and me to remain in the district through
farming additional land in conjunction with my existing family farms,” he says.
“Whitehaven recognises the importance of maintaining and improving farming land for future generations.
Without Whitehaven’s acquisition of one of my smaller properties my family was facing the reality of having
to sell this property simply to reduce the financial burden. The sale to Whitehaven has helped secure my
family’s future in this district.”
Although mining operations may extend for many years, mining is a temporary land use. We plan ahead for
the closure of our operations after the commercially recoverable coal is exhausted. We balance the needs
and expectations of the present with those of future generations.
Consultation with local communities, traditional landowners, governments and employees is fundamental to
our closure planning which is integrated into our operational activities. We aim to progressively rehabilitate
land during the mining years so that the rehabilitated land will sustain post-mining uses. In 2015, rehabilitation
had reached various stages of progress on approximately 550 hectares of our 2,000 hectares of disturbed
land. We also integrate other aspects into our closure planning, including socio-economic impacts and
identifying alternative uses for mine infrastructure.
WATER
We use water at every stage of our
business: for exploration, mining,
processing and rehabilitation, as
well as for potable consumption.
We own substantial water rights
that were generally either acquired
as part of our acquisition of farming
land or were purchased from
government bodies to support
our mining operations. Our
operations are committed to
using water responsibly given
that water is a key resource for
communities and industries
in the Gunnedah Basin.
We must manage water in a way that
minimises collection and use of clean
water runoff whilst containing and
maximising re-use of sediment laden
and mine impacted water on-site.
Water discharges are only permitted
from licenced, monitored discharge
points and any discharge must fall
within strict water quality guidelines.
For example, each year rainfall and
seepage into the mine provides
Werris Creek with approximately
750 megalitres of water, we use
about 50% of that in our mining
operation and have been evaporating
about 50% into the atmosphere.
Werris Creek mine is seeking state
government approval to provide
water that is excess to our mining
needs to local farmers for use
in irrigated farming rather than
evaporate it.
Our management of water is
the subject of strict monitoring
that is overseen by several state
government regulatory bodies.
Information on our management
of water is made available on
our website and in each meeting
of the relevant Community
Consultative Committee.
Whitehaven Coal Annual Report 2015 / 51
5RESOURCES AND RESERVES1OVERVIEW6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT4SUSTAINABILITY3OPERATIONS2STRATEGY 4. SUSTAINABILITY
ENVIRONMENT
AIR
CONTINUOUS
MONITORING SYSTEMS IN PLACE
AT OPERATING MINE SITES
BIODIVERSITY
22,000
HECTARES OF LAND
MANAGED AS BIODIVERSITY
OFFSETS
LAND
LAND
63,000
HECTARES OF OWNED LAND
SUSTAINABLY MANAGED
1450
HECTARES OF LAND
DISTURBED BY OPERATIONS
52 / A Year of Delivery
CASE STUDY – BIODIVERSITY MANAGEMENT
The vine Tylophora linearis, is listed as Endangered under the Commonwealth Environment Protection and
Biodiversity Conservation Act 1999 and Vulnerable under the NSW Threatened Species Conservation Act 1995.
The vine can be found on the Maules Creek coal mining lease. In accordance with the site Biodiversity Management
Plan, and as an Australian first, Whitehaven has successfully collected Tylophora linearis seed and germinated it.
In spring 2015 we expect that an initial 80 seedlings will be translocated to biodiversity offset areas and planted
out. We will be closely monitoring the outcomes of this programme.
affordable energy to fuel continued
economic growth clashes with the
scale of emission reductions being
sought by the developed world.
To assess how carbon policy and
regulation will impact our business
we closely monitor national and
international climate and energy
policy developments. We advocate
for policies that are environmentally
effective and economically efficient.
At an operational level we minimise
our energy use where possible.
Our energy intensity continues
to decrease as we become more
efficient and our greenhouse gas
emissions per saleable tonne of
coal produced have declined from
that reported in previous years.
We believe that the high energy,
low ash product that we produce
will become an increasingly
important source of the move to
using higher quality coal for power
generation. More information on
this can be found on page 18.
ENVIRONMENTAL
REGULATION
We are subject to various
environmental regulations
and are required to disclose
Group-level environmental
incidents, fines and complaints.
Further information is available
at www.whitehavencoal.com.au.
LAND
WASTE
Whitehaven seeks sustainable
stewardship of the land that we
manage. About 2%, or less than
2,000 hectares, of the 63,000
hectares of land that we own is
actively involved in mining or is
being rehabilitated. Rehabilitated
land is generally returned to either
native vegetation or pasture – like
our Canyon mine.
BIODIVERSITY
Biological diversity – or biodiversity –
is the term given to the variety of
life on Earth. It is the variety within
and between all species of plants,
animals and micro-organisms and
the ecosystems within which they
live and interact.
Whitehaven has 22,000 hectares
of land that are being managed
as biodiversity offset areas. That
is about the same size as 40,000
football fields’, about 200,000
housing lots of 1/4 acre or about
7 times the size of the greater city
of Tamworth. It is also more than
10 times the area of land currently
disturbed or under rehabilitation
by our operations. The offset areas
have been carefully selected, based
on guidance from independent
experts and regulatory authorities,
to ensure they represent like-for-like
or better biodiversity values than
the areas that will be impacted
by operations.
Whitehaven’s approach to
biodiversity aims to ensure
that the actions we take are
designed to outweigh the
inevitable disturbances at our
sites associated with mining.
To achieve this we work closely
with local communities,
conservation advisors and
environmental protection
organisations, including
various state and federal
government bodies.
During our mining operations
we generate waste. We work
on strategies that avoid, reduce,
recycle and dispose of waste.
Our strategy for mineral waste
management includes segregation
and placement of overburden, tailings
and reject materials in engineered
waste dumps which are designed
to be safe, stable and non-polluting.
We segregate top soils at the initial
clearing stages to ensure they are
available for rehabilitation activities
and we include water management
structures in the design.
Non-mineral waste from mining
operations is removed by registered
contractors who recycle or dispose
of the waste appropriately. Our
non-mineral waste management
activities this year included recycling
of cardboard, paper and printer
ink cartridges and engaging a
contractor at Werris Creek mine to
provide a total waste management
service for the site. This initiative
helped the site with its regulatory
compliance and reporting
requirements while also collecting
recycling rebates and delivering
decreases in waste disposal costs.
Whitehaven is investigating the
implementation of this initiative
across the Group.
ENERGY AND
CLIMATE CHANGE
Whitehaven is both a user and
producer of energy. We advocate
that increasing demand for energy
by global customers and the
challenge of addressing climate
change issues are best met by
companies, government and the
community working together.
Absent broad scale adoption of
ultra super critical energy generation
technology and the use of higher
quality coals, the developing
world’s increasing need for secure,
Whitehaven Coal Annual Report 2015 / 53
5RESOURCES AND RESERVES1OVERVIEW6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT4SUSTAINABILITY3OPERATIONS2STRATEGY PEOPLE
779
FULL-TIME EMPLOYEES
8%
OF WORKFORCE IDENTIFY
AS ABORIGINAL AND/OR
TORRES STRAIT ISLANDER
DESCENT
77%
OF EMPLOYEES ARE
SATISFIED WITH
WHITEHAVEN AS A
PLACE TO WORK
OUR PEOPLE
Why these Issues are
important to us
The successful realisation of
a business strategy is entirely
dependent on people: their
management skills, professional
knowledge and commitment
to the Company’s values and
corporate ethos. Whitehaven
aims to promote professional
growth and career progression
for our people and develop
ways to build and strengthen
company loyalty and
team efficiency.
Approach
We seek to hire and motivate
people who demonstrate our
values of respect, discipline,
teamwork, integrity, commitment
and performance. Our people
are passionate about making a
difference to our business and
the communities in which we
operate. As the leading employer
in the Gunnedah Basin, we seek
to maintain our position as one
of the most attractive employers
in the region.
We employ people on the basis
of job requirements and do not
discriminate on grounds of age,
ethnic or social origin, gender,
sexual orientation, politics, religion,
disability or any other status.
We recognise the right of all
employees to belong to a union
should they wish. We employ
people with disabilities and
make every effort to offer
suitable alternative employment
and retraining to employees
who become disabled.
We set clear performance
objectives for our employees
who are in turn paid a competitive
salary and a comprehensive
benefits package, as well as being
offered professional growth.
Key Priorities
— Increase workforce productivity
— Increase staff loyalty
and commitment
— Improve HR processes
54 / A Year of Delivery
4. SUSTAINABILITY “THE SUCCESSFUL REALISATION OF
A BUSINESS STRATEGY IS ENTIRELY
DEPENDENT ON PEOPLE: THEIR
MANAGEMENT SKILLS, PROFESSIONAL
KNOWLEDGE AND COMMITMENT
TO THE COMPANY’S VALUES AND
CORPORATE ETHOS.”
Good communication is critical if
we are to meet the expectations of
our people. Employee engagement
is supported by a number of
communications tools including
a newsletter dedicated to Group
updates and a new website
featuring news and announcements.
2015 KEY FACTS
— 779 employees as of 30 June 2015
— 77% of our people live and work
in region of our operations
— 15.5% of workforce at Maules
Creek are Aboriginal (year end)
OUR WORKFORCE
In a difficult year for the coal
industry more broadly, Whitehaven
increased its workforce from
approximately 655 to 779 employees
(FTE). Of these, 77% live and work
in the area of our operations. We
remain the largest private sector
employer in the northwest
NSW region.
Our workforce includes 63
Aboriginal and/or Torres Strait
Islander employees, representing
8% of our total workforce. As
Maules Creek is the site where
our workforce is growing the
most, we are committed to at
least 10% of the Maules Creek
workforce identifying as Aboriginal
or Torres Strait Islander within
the next five years. We are pleased
to report that at 30 June 2015
we were ahead of our target
with 15.5% of the Maules Creek
workforce identifying as
Aboriginal or Torres Strait
Islander descent.
Our local employment commitments
are often managed through directly-
negotiated agreements with
Traditional Owners.
Diversity in the workforce extends
to increasing the representation of
women throughout the company.
Overall female representation
in Whitehaven’s workforce has
remained relatively steady at
8.5% in 2015 compared with
8.3% in 2014.
Our 2015 employee survey was
completed by 720 employees and
revealed that almost 4 in 5 were
satisfied with Whitehaven as a
place to work. Overall satisfaction
with Whitehaven as an employer
has increased 29% over the last 12
months. Transparency, access to
training and a better roster were
the top mentioned areas in which
employees would like to see the
Company improve.
Whitehaven Coal Annual Report 2015 / 55
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1OVERVIEW4SUSTAINABILITY3OPERATIONS2STRATEGY
DIVERSITY
CONTINUAL
IMPROVEMENT IN MEETING
DIVERSITY OBJECTIVES
AND TARGETS
15%
OF LEADERSHIP ROLES
ARE HELD BY WOMEN
56 / A Year of Delivery
While Whitehaven has made strong
improvements in the past year in
representation and participation
of Aboriginal and Torres Strait
Islander people in the workforce,
more needs to be done in the area
of gender diversity.
Overall female representation
in Whitehaven’s workforce has
remained relatively steady at
8.5% in 2015 compared with 8.3%
in 2014. Currently 15% of leadership
roles in Whitehaven are held by
women. Two of the company’s
Board of Directors are women.
Priorities for the year
ahead include increasing this
number through initiatives such
as launching ‘Women of Whitehaven’
(WoW) which aims to provide the
organisation with feedback and
ideas on how to improve our
gender diversity.
Progress on our objectives is
monitored and assessed on an
annual basis. Solid progress has
been made and we continue to
support these objectives through
a number of new targets and
initiatives during 2016.
DIVERSITY TARGETS
FOR 2015
As part of our commitment to
continuous improvement, we have
set Group targets and initiatives
for a range of diversity objectives.
These help us deliver on our
commitment to diversity and
inclusion in the workplace.
Whitehaven aims for an inclusive
workplace that brings both men
and women from diverse
backgrounds and who reflect
diversity of gender, culture,
experience and skills. We believe
that a diverse and inclusive
workforce leads to a stronger
Company performance through
ideas and opinions of people
selected from the widest
available pool of talent.
Whitehaven’s most recent employee
engagement survey found that 77%
of our workforce were satisfied with
Whitehaven as a place to work. The
survey was responded to by 720
employees, representing a response
rate of 95%.
Whitehaven’s Diversity strategy
focuses on four main objectives
relating to:
— Representation and participation
— Leadership and culture
development
— Systems, processes and
performance metrics, and
— Community and industry
4. SUSTAINABILITY “ WHITEHAVEN’S MOST RECENT EMPLOYEE
ENGAGEMENT SURVEY FOUND THAT 77%
OF OUR WORKFORCE WERE SATISFIED
WITH WHITEHAVEN AS A PLACE TO WORK.
THE SURVEY WAS RESPONDED TO BY
720 EMPLOYEES, REPRESENTING A
RESPONSE RATE OF 95%.”
MEASURABLE
OBJECTIVE
2015 TARGETS
AND INITIATIVES
1. Representation
and Participation
Increase representation
of Aboriginal employees
and representation of
female employees in
non-traditional areas
such as mining operations,
trades and engineering
and leadership roles.
Employee turnover is
expected to remain low
at existing Whitehaven
operations. Opportunities
exist at the new Maules
Creek operation where
we will engage a single
recruitment provider to:
— Ensure advertisements
target Aboriginal and
female candidates in
addition to candidates
with previous mining
experience
— Establish an assessment
centre to identify the
best candidates with
the ability to learn
mining roles without
necessarily having
current industry
experience
— Ensure the interview
process is absent of
bias and that the
best candidates are
offered positions
TARGET ACHIEVED
2016 TARGET
Employee turnover in
2015 was 9%.
Prospect Group were
engaged as the recruitment
provider for Maules Creek.
Benchmark employee
perceptions on diversity/
inclusion and flexibility
as part of our annual
employee engagement
survey.
Prospect Group
developed assessment
methods that were
absent of bias to ensure
candidates from a diverse
range of backgrounds
and experience were
considered for roles.
Where practical,
advertisements include
photos of female
employees and
Aboriginal employees.
Enhance careers website
with the aim to attract a
broader pool of candidates.
Conduct unconscious
bias training for all
managers to incorporate
research and learning in
relation to the way bias
affects communication,
decision making and
cultural acceptance.
Whitehaven Coal Annual Report 2015 / 57
5RESOURCES AND RESERVES1OVERVIEW6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT4SUSTAINABILITY3OPERATIONS2STRATEGY DIVERSITY
MEASURABLE
OBJECTIVE
2015 TARGETS
AND INITIATIVES
TARGET ACHIEVED
2016 TARGET
2. Leadership and
Culture Development
Deliver development
solutions to remove
gender bias and create
an inclusive culture.
Communicate and
actively promote
Whitehaven’s diversity
and inclusion strategy
and its supporting policies
through onboarding
and annual training.
Formalise and
communicate the flexible
work arrangements
available to employees.
Develop tools and provide
training to managers on
managing flexible work
requests and flexible
work practices such
as ceremonial leave
in their teams.
Implement Aboriginal
cultural awareness training.
Hold an on-site event to
launch WoW to which
Board members and
Whitehaven employees
are invited to attend.
— Review all mine site
roles to determine
the roles that best
suit flexible work
arrangements for
working mothers
and primary care
givers, as a guide
to management
— Review of Leave
Policy to include
parental leave,
ceremonial leave
and flexible
work options
— Conduct diversity
education and
refresher training
in relation to:
> Anti-discrimination
and sexual harassment
linked to Whitehaven’s
Workplace
Behaviour Policy
> Aboriginal
cultural awareness
— Extend employee
consultation by
formalising an annual
on-site event to create
interaction between
board members and
interested employees
to discuss diversity-
related issues
A guide was developed
that identified both
corporate and mine
site roles that best
suited flexible work
arrangements for
working mothers and
primary care givers.
Such roles included
accounting and
purchasing positions
in the corporate offices,
along with site roles
such as crib relief
operators and some
site safety positions.
Policies are currently
under review to include
parental leave, ceremonial
leave and flexible
work options.
Diversity education
and refresher training
was conducted in
the Sydney and
Newcastle office.
A training package
promoting Aboriginal
cultural awareness is
under development.
In November 2014
Whitehaven sponsored
a White Ribbon
(ultramarathon) event
to raise awareness of
domestic violence
against women. Board
members and Whitehaven
employees in the Narrabri
region were invited
to attend.
The ‘Women of
Whitehaven’ (WoW)
network group was
established and held
its first meeting to
develop the scope and
purpose of the group.
58 / A Year of Delivery
4. SUSTAINABILITY MEASURABLE
OBJECTIVE
2015 TARGETS
AND INITIATIVES
TARGET ACHIEVED
2016 TARGET
Enhance internal and
external recruitment
processes including:
— Communicate with all
recruitment providers
that Whitehaven expects
at least one woman on
the shortlist for all
roles in FY16
— Ensure gender diversity
on interview panels
for senior leadership
positions (at least one
woman required for
interview panels)
Provide executive team
quarterly updates on
diversity performance
metrics for each site.
Monitor pay equity as
part of annual salary
review process.
Hold a community
event to acknowledge
the endorsement
of Whitehaven’s
Innovate RAP.
Continued involvement
in industry recognition of
women in the workplace
through submissions to
Women in Mining Awards.
Partner with local
community group White
Ribbon Day campaign.
3. Systems, Processes
and Performance
Metrics
Review practices to
identify and enhance
reporting to demonstrate
the achievement of
targets and initiatives.
SCOUT eRecruitment
system was implemented
which enhances our
ability to report on
number of vacancies
as well as track the
number of Aboriginal
and female applications,
interviews and
appointment rates.
Further enhance
recruitment and
reporting systems to:
— More readily track
turnover, vacancies
and number of
Aboriginal and female
applications, interviews,
appointment rates and
record exit interviews
— Capture employees
seeking flexible work
arrangements as well
as specific needs of
employees who are
carers
— Monitor performance
at a site level
4. Community
and Industry
Involvement in local
community and
industry initiatives
to promote diversity.
— Development of an
Aboriginal Engagement
Strategy, including
investigation of
partnerships with
Aboriginal groups to
provide a long-term
‘employment ready’
Aboriginal workforce
— Involvement in industry
recognition of women
in the workplace such
as the annual Women
in Mining Awards
— Continued sponsorship
of female apprentices
and promotion of
female cadet work
experience programs
— Assess what services
are available in the
community to assist
working mothers and
primary care givers,
including child care
and respite care
Reconciliation Australia
has endorsed Whitehaven’s
Innovate RAP 2015–2017.
Whitehaven has partnered
with labour hire providers
to develop an ‘employment
ready’ Aboriginal workforce
Gunnedah Family
Support in partnership
with the Gunnedah
Domestic and Family
Violence Interagency
Committee are asking
to partner with
Whitehaven to develop
a communication and
education strategy
around domestic
violence, to be delivered
in conjunction with the
national White Ribbon
Day campaign in
November 2015.
Whitehaven Coal Annual Report 2015 / 59
5RESOURCES AND RESERVES1OVERVIEW6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT4SUSTAINABILITY3OPERATIONS2STRATEGY COMMUNITY
$214.9M
SPENT WITH LOCAL
SUPPLIERS AND
BUSINESSES IN NW NSW
$26.7M
COMMITTED TO LOCAL
COUNCILS FOR REGIONAL
DEVELOPMENT
$84.3M
IN ROYALTIES PAID
TO NSW GOVERNMENT
— Support for educational
initiatives which develop
academic and other skills
— Support projects which assist
the broad local community and
for organisations which have
significant local, state, national
or international reach
KEY FACTS
Whitehaven is an important
contributor to the regional
economy in the area of our
operations. During the year we
spent $214.9m with suppliers
across the Gunnedah, Narrabri,
Tamworth and Liverpool Plains
council areas.
More than $26.7m has been
committed to local councils in
the form of Voluntary Planning
Agreements for the provision
of local infrastructure and
services in the region.
During the year $182k in
donations/sponsorship was
dispersed to organisations
throughout the region. The
Company also extended its
commitment to the Westpac
Rescue Helicopter Service –
matching funds through our
payroll dedication program
for a total $103k.
ENCOURAGING
SUSTAINABLE
DEVELOPMENT
Why these issues are
important to us
Whitehaven strives to build good
relationships with the communities
where we operate. We engage
with them to understand the social,
environmental and economic
implications of our activities and
seek to minimise the negative
impacts on the places where
we work.
Approach
Whitehaven takes great pride in our
long-standing links with the local
communities in which we operate
including the fact that the majority
of Whitehaven’s workforce live
in the area of our operations.
Whitehaven operates a sponsorship
and donations program with the
aim of:
— Developing strategic,
long-term partnerships with
community organisations
— Fostering support for Whitehaven
from communities impacted by
our activities
— Supporting a range of local
not-for-profit organisations to
increase community confidence
in Whitehaven as a fair and
responsible company
Key priorities
— Support for projects and
organisations that promote
healthy lifestyles
60 / A Year of Delivery
4. SUSTAINABILITY CASE STUDY – COMMUNITY SUPPORT
Whitehaven and our employees have donated more than $500,000 to the Westpac Rescue Helicopter over
the past five years.
The Company supports the service by matching staff payroll deductions. This year the total raised for the
service was more than $100,000.
Rescue Helicopter Service General Manager, Richard Jones, said that Whitehaven Coal was a valued supporter
having generously joined their employees and the wider community to raise funds and awareness of the Service
over a number of years. “The Service is most humbled by the generosity of the employees and Whitehaven Coal,’
Mr Jones said.
HEALTHY LIFESTYLES
During the year Whitehaven donated
$10k to the Gunnedah Rural Health
Centre for the purchase of much-
needed nursing and physiotherapy
equipment. The funding will
provide an ophthalmoscope (eyes
and ears), a carbon dematoscope
(skin), a rechargeable battery for
COAG check (blood) and vital
physiotherapy equipment.
Whitehaven made a $5k donation
to prostate cancer research and one
of the new fleet of trucks at Maules
Creek was painted blue to raise
awareness of prostate cancer
within the workforce.
EDUCATIONAL INITIATIVES
Schools throughout the region
have been supported this year
with donations worth $11k made to
St Marys College Gunnedah,
Boggabri Public School, Narrabri
Public School, Gunnedah Public
School, Gunnedah South School,
Sacred Heart School Boggabri,
Quirindi Public School, Narrabri
High School, Werris Creek Pre
School, St Xaviers School Gunnedah,
G S Kidd Memorial School and
Curlewis Public School.
Whitehaven continued its support
of the Country Education Fund with
a contribution of $10k and made
a $2k donation to the Gunnedah
Community Scholarship Fund. These
organisations provide support to
country children as they embark
on tertiary education, with the aim
that recipients return to the region
to take up positions that are often
difficult to fill in rural areas.
During 2015 a contribution of $20k
was made to Narrabri RSL to assist
in the construction of the memorial
in Narrabri. This monument is a daily
reminder of the sacrifices made
by the combined armed forces in
protecting our nation.
Whitehaven is also involved in
supporting numerous community
events such as Maules Creek
Campdraft Annual Shows in
Narrabri, Gunnedah and Quirindi,
Nosh on the Namoi in Narrabri
and Porchetta in Gunnedah.
ECONOMIC DEVELOPMENT
As a responsible corporate citizen,
Whitehaven contributes financially
to the economy at both state and
federal level and to the communities
in which we operate. Employees
and contractors also add a significant
economic contribution to the
Gunnedah, Narrabri, Boggabri
and Werris Creek townships
through their purchases from
local businesses.
In 2015 Whitehaven spent:
— $125.6m in salaries, wages, taxes
and superannuation to employees
(on a 100% joint venture basis)
— $84.3m in royalties to the New
South Wales Government (on
a 100% joint venture basis)
— Over $358.1m on mining,
washing and delivering coal
onto trains at our mine sites
— Over $202.2m in port and rail
charges for track access
haulage costs and port costs
— More than $182,000 towards
local education activities and
community groups
Under New South Wales
Government regulations, a
royalty of 8.2% (open cut) and
7.2% (underground) is payable
on all of Whitehaven’s revenue.
The royalty amount is based
on the Australian sales price less
allowable beneficiation costs
and levies.
Whitehaven Coal Annual Report 2015 / 61
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VOLUNTARY PLANNING AGREEMENTS
As part of the approval process, Whitehaven has entered into Voluntary Planning Agreements with local Government
to contribute towards the cost of local infrastructure and facilities. Whitehaven’s Voluntary Planning Agreements
are listed below:
SITE
TOTAL AMOUNT
CONTRIBUTED
PURPOSE
Maules Creek
$6m over two years
Funds to be utilised on the upgrade of infrastructure and road including
Therribri Road, Baan Baa water supply and Tarrioro Bridge.
$5m over five years
Funds to be utilised on the upgrade of the Narrabri Airport.
$1.2m over two years
Funds to be utilised on CBD upgrades in the Narrabri Shire.
$800k over three years
Funds to be utilised on various projects within the township of Boggabri
and its surrounds.
$275k over three years
Funds to be contributed to the Maules Creek Community.
$100k
To be allocated to an environmental fund.
Ongoing – approx
$800k p.a.
Payment to Narrabri Shire council of $0.075 per saleable tonne, to
be paid monthly. At full production this is expected to equate to
approximately $800k per annum.
Tarrawonga
$1.4m over
one year
Funds to be utilised for the construction of sealed roads around the
Tarrawonga mine site with an emphasis on sealing Manila Road for the
benefit of local residents. Unallocated funds to be spent at the discretion
of Narrabri Shire Council.
$100k
To be allocated to an environmental fund.
Ongoing – approx
$150k p.a.
Payment to Narrabri Shire Council of $0.075 per saleable tonne, to
be paid monthly. At full production this is expected to equate to
approximately $150k per annum.
Werris Creek
$300k
Narrabri
$3.2m
Spend over six years in consultation with Liverpool Plains Shire Council
and community with two thirds to be spent in Werris Creek township.
Commenced in 2010 with funds directed to Narrabri Shire council
for a range of requirements including the redevelopment of the Narrabri
Swimming Pool Complex, Gunnedah Urban Riverine Scheme and
Community Enhancement funds for Gunnedah and Narrabri over
a 5 year period and the upgrade and seal of Kurrajong Creek Road.
Rocglen
Vickery
$500k over five years
For local infrastructure matters.
$5.25m
Gunnedah Shire Council Trust Account for community
initiatives including:
— Gunnedah Memorial Pool Upgrade
— Urban Road Maintenance
— Rural Road Maintenance
— Cycleway and Recreational Facilities
— Support of Gunnedah Mens Shed
— Support of the Doreathea McKellar Society
$2.25m
Narrabri Shire Council Trust Account for community
initiatives including:
— Boggabri Community Hall
— Boggabri Swimming Pool
— Bus Shelter Kamileroi Highway, Boggabri
— Boggabri Sewerage Capacity Upgrade
— Boggabri Preschool
— Boggabri Childcare
— Narrabri Airport Upgrade
62 / A Year of Delivery
4. SUSTAINABILITY “WE STRIVE TO BUILD GOOD RELATIONSHIPS WITH THE
COMMUNITIES WHERE THE COMPANY OPERATES. WE ENGAGE
WITH THEM TO UNDERSTAND THE SOCIAL, ENVIRONMENTAL
AND ECONOMIC IMPLICATIONS OF OUR ACTIVITIES AND SEEK
TO MINIMISE THE NEGATIVE IMPACTS ON THE PLACES WHERE
WE WORK.”
CASE STUDY
Members of the Gunnedah
Chamber of Commerce supported
a motion stating the chamber
understood the importance of
Whitehaven Coal and the Maules
Creek mine project to the district.
Chamber president Ann Luke
handed the document outlining
its support to Paul Flynn at a site
visit of Maules Creek.
“Chamber members canvassed
have reported an estimated $20m
in district in direct income from
construction contracts and
sub-contracts already this year
which has been re-invested in
the Gunnedah economy, families
and community,” the chamber
letter said.
“We acknowledge and appreciate
the local procurement policies
implemented by Whitehaven Coal
during the construction phase.”
The Chamber said business
confidence and growth in the
region had increased, along with
new housing developments and
businesses like Aldi opening.
COMPLAINTS
We accept that we cannot
meet everybody’s concern and
expectations. However, wherever
we operate we seek to do so
with broad-based community
support. By listening carefully
to the concerns of our
stakeholders, we work to
create mutually beneficial
outcomes for all. Information
on Group-wide complaints are
available on our website at
www.whitehavencoal.com.au/
environment.cfm
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4. SUSTAINABILITY
64 / A Year of Delivery
ABORIGINAL
ENGAGEMENT
ABORIGINAL
COMMUNITY RELATIONS
Why these Issues are
Important to us
As a proudly Australian company
that calls the Gunnedah Basin
its home, Whitehaven values
local communities and is keen
to ensure benefits flowing from
our operations accrue locally –
including to Aboriginal and
Torres Strait Islander communities.
Approach
By listening, learning, understanding
and initiating actions that can
support Aboriginal and Torres Strait
Islander peoples, we now have a
number of projects and partnerships
including a Reconciliation Action
Plan that has been endorsed by
Reconciliation Australia that will
deliver opportunities and assistance
in areas of greatest need.
Our approach focuses meaningful
engagement and programs that
can address issues affecting
Aboriginal and Torres Strait
Islander people within the region.
We believe that the best way we
can assist to improve the lives
of local Aboriginal and Torres
Strait Islander people is by
offering the opportunity of stable,
long-term employment and by
supporting access to education
from kindergarten through to
university and mature age.
Key priorities
— Within five years of Maules
Creek commencing production,
10% of the 400 plus strong
workforce at the mine will be
local Aboriginal and Torres Strait
Islander peoples. Following our
recent employee engagement
survey, as at 30 June 2015 8% of
our total workforce self-identify
as Aboriginal or Torres Strait
Islander. At Maules Creek, this
is figure is 15.5%.
— As part of the company’s
Reconciliation Action Plan,
we are progressing programs
in a number of areas which can
broadly be categorised under:
> Employment
> Education and Training
> Health
> Cultural Awareness
and Understanding
> Economic Development
and Potential Partnerships
Initiatives and support
Whitehaven’s Aboriginal
Engagement Strategy seeks to
build on and develop relationships
with Aboriginal and Torres Strait
Islander communities within the
region. The Company employs a
dedicated Aboriginal Community
Relations Officer, has developed
a Reconciliation Action Plan and
has supported a range of cultural
and educational initiatives in
the past year. The Reconciliation
Action Plan is available on the
Whitehaven website.
“WHITEHAVEN VALUES LOCAL COMMUNITIES
AND IS KEEN TO ENSURE BENEFITS FLOWING
FROM OUR OPERATIONS ACCRUE LOCALLY
– INCLUDING TO ABORIGINAL AND TORRES
STRAIT ISLANDER COMMUNITIES.”
CASE STUDY – EMPLOYMENT
In addition to our employment
commitments, these initiatives
include:
EDUCATION
Whitehaven donated $40K to
the Winanga-Li Aboriginal Child
and Family Centre for the purchase
of the centre’s existing mini-bus,
which had previously been leased.
This enables families with no
adequate transport to get their
children to preschool, a vital logistic
component in the early education
of Aboriginal children in Gunnedah.
The centre brings together a range
of family, early childhood and health
services for the region, catering
for 35 children from birth to eight
years of age and their families.
Derek Talbott
Derek Talbott started work on the Maules Creek Project with Leighton
Contractors, flying in from Brisbane, where he was living with his wife and
children. Derek was born in Gunnedah and lived in the local area for most
of his life until the search for work took him further north. His new job
working with Whitehaven has given him the opportunity to come home.
“I’m enjoying it,” said Derek, “it gets me back home. Work has been scarce
around here, but I’m really pleased to be able to come back home and take
full advantage of the opportunity Whitehaven has given me. My whole
family including mum and nan are ecstatic about me securing a career
in the mining industry.”
Darrin Trindall
Darrin Trindall, a trainee plant operator at the Maules Creek operation,
is an example of the success the program is having. Employed late last
year as part of our Indigenous employment program, the role was the
fulfilment of a long-held dream of returning to live and work in his
traditional homeland of Narrabri.
“I have always wanted to be a plant operator,” said Darrin. “And when
the opportunity with Whitehaven came up, I went for it. I’d spent 12 years
working as a nurse in remote Aboriginal communities in the Northern
Territory, and then went into civil construction. Once I had children,
I wanted a career change, and I have always wanted to come home to
Narrabri, so for me the opportunity at Whitehaven is a dream come true.”
Elsewhere since 2007 Werris
Creek coal mine has stored ten
sandstone boulders with 43 axe
grinding groves in accordance
with the management plan.
The mine was subsequently
approached by the Nungaroo
Local Aboriginal Land Council
and the Liverpool Plains Shire
Council Aboriginal Advisory
Committee to relocate the
Narrawolga Axe Grinding
Groove Rocks from the site
to the Willow Tree Visitor
Information Centre for
public display.
The Narrawolga Axe Grinding
Groove Rocks were relocated
from the temporary storage
facility at Werris Creek to the
Willow Tree Visitor Information
Centre on 15 April 2015, following
13 months of planning.
LOCAL ABORIGINAL
WOMEN
Whitehaven hosted an Aboriginal
Women in Mining day at
Winanga-Li Centre, where
participants were offered career
insights into what the industry
has to offer. A group of 10 local
Aboriginal women attended with
activities including a training pit
and simulator, courtesy of training
partners Skilled and Tesa. Discussion
on the day included access to child
care and flexible working priorities.
CULTURAL AWARENESS
AND UNDERSTANDING
Whitehaven commissioned art
works from local Gomeroi artist
Ronny Long.
The art works completed in ink have
images that are iconic to Aboriginal
people in the area. The hand stencils,
the emu and kangaroo footprints
and lastly the Emu (Dhinawan) which
has an important story to tell on the
land and in the sky. The artworks
can be seen on the previous page
and also feature in our Reconciliation
Action Plan document which can be
found on the Whitehaven website.
Whitehaven Coal Annual Report 2015 / 65
5RESOURCES AND RESERVES1OVERVIEW6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT4SUSTAINABILITY3OPERATIONS2STRATEGY
5. RESOURCES
AND RESERVES
Resources and Reserves
68
66 / A Year of Delivery
Whitehaven Coal Annual Report 2015 / 67
5RESOURCES AND RESERVES6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT1OVERVIEW4SUSTAINABILITY2STRATEGY3OPERATIONS RESOURCES
AND RESERVES
COAL RESOURCES – AUGUST 2015
TENEMENT
Vickery
Opencut
Vickery
Underground
Rocglen
Opencut
Rocglen
Underground
Tarrawonga
Opencut*
Tarrawonga
Underground
Maules Creek
Opencut**
Werris Creek
Opencut
Narrabri
Underground***
Gunnedah
Opencut
Gunnedah
Underground
Bonshaw
Opencut
Ferndale
Opencut
Ferndale
Underground
Oaklands North
Opencut
Pearl Creek
Opencut****
TOTAL COAL
RESOURCES
CL316/EL4699/
EL7407
CL316/EL4699/
EL7407/EL8224/
EL5831
ML1620
ML1620
EL5967/ML1579
ML1685/ML1693
EL5967/ML1579
ML1685/ML1693
CL375/AUTH346/
EL8072
ML1563/ML1672
ML1609/EL6243
ML1624/EL5183/
CCL701
ML1624/EL5183/
CCL701
EL6450/EL6587
EL7430
EL7430
EL6861
EPC862
MEASURED
RESOURCE
INDICATED
RESOURCE
INFERRED
RESOURCE
TOTAL
RESOURCE
COMPETENT
PERSON
REPORT
DATE
230
165
–
7
–
48
10
330
18
160
7
2
–
103
–
110
–
95
4
3
18
15
270
4
390
47
138
4
135
–
260
14
110
135
–
1
13
14
50
–
180
89
24
7
134
73
580
38
505
230
11
4
79
39
650
22
730
143
164
11
372
73
950
52
1025
1564
1448
4037
1
1
2
2
3
3
3
2
6
3
3
3
4
4
3
5
Jun 15
Jun 15
Mar 15
Mar 15
Mar 15
Apr 14
Mar 15
Mar 15
Mar 15
Aug 14
Aug 14
Aug 14
Jan 13
Jan 13
Aug 14
Jan 13
1. John Rogis, 2. Ben Thompson, 3. Mark Dawson, 4. Greg Jones, 5. Phil Sides, 6. Rick Walker
* Whitehaven owns 70% share of opencut resources within ML1579, ML1685 and ML1693. The total combined resource for Tarrawonga Mining
Leases (ML1579, 1685 and 1693) and Exploration Licence (EL5967) is reported.
** Maules Creek Joint Venture – Whitehaven owns 75% share.
*** Narrabri Joint Venture – Whitehaven owns 70% share.
**** Dingo Joint Venture – Whitehaven owns 70% share.
# The Coal Resources for active mining areas are current to the pit surface as at the report date.
68 / A Year of Delivery
5. RESOURCES AND RESERVES COAL RESERVES – AUGUST 2015
TENEMENT
Vickery
Opencut
Rocglen
Opencut
Tarrawonga
Opencut *
Maules Creek
Opencut**
Werris Creek
Opencut
Narrabri North
Underground***
Narrabri South
Underground***
TOTAL COAL
RESOURCES
RECOVERABLE RESERVES
MARKETABLE RESERVES
PROVED
PROBABLE
TOTAL
PROVED
PROBABLE
TOTAL
COMPETENT
PERSON
REPORT
DATE
CL316/EL4699/
EL7407
–
200
200
–
178
178
ML1620
3.8
0.9
4.6
2.9
0.7
3.5
EL5967 / ML1579
ML1685 / ML1693
31
10
41
28
9
37
CL375/AUTH346
236
145
381
221
128
349
ML1563/ML1672
ML1609
EL6243
14
51
–
3
17
14
85
136
48
3
81
17
129
94
94
–
75
75
336
538
874
314
475
789
1
1
1
1
1
2
2
Mar 15
Mar 15
Mar 15
Mar 15
Mar 15
Mar 15
Mar 15
1. Doug Sillar, 2. Graeme Rigg
*
* Whitehaven owns 70% share of opencut reserves within ML1579, ML1685 and ML1693. The total combined reserve for Tarrawonga Mining Leases
(ML1579, 1685 and 1693) and Exploration Licence (EL5967) is reported.
** Maules Creek Joint Venture – Whitehaven owns 75% share.
***
Narrabri Joint Venture – Whitehaven owns 70% share.
# The Coal Reserves for active mining areas are current as at report date.
## Coal Reserves are quoted as a subset of Coal Resources.
### Marketable Reserves are based on geological modeling of the anticipated yield from Recoverable Reserves.
Coal Resources and Reserves for active mining areas are as at the 31st of March 2015. Production for the
quarter ended 30 June 2015 is detailed in the June 2015 Quarterly Report. Please see the Whitehaven Coal
website (www.whitehavencoal.com.au) for all the Coal Resource and Coal Reserve Table 1 details.
Information in this report that relates to Coal Resources and Coal Reserves is based on and accurately reflects
reports prepared by the Competent Person named beside the respective information. Mr Greg Jones is a principal
consultant with JB Mining Services. Mr Phillip Sides is a senior consultant with JB Mining Services. Mr Mark Dawson
is a Geologist with Whitehaven Coal Limited. Mr Ben Thompson is a Geologist with Whitehaven Coal. Mr John Rogis
is a Geologist with Whitehaven Coal. Mr Rick Walker is a Geologist with Whitehaven Coal. Mr Graeme Rigg is a full
time employee of RungePincockMinarco Ltd. Mr Doug Sillar is a full time employee of RungePincockMinarco Ltd.
Named Competent Persons consent to the inclusion of material in the form and context in which it appears. All
Competent Persons named are Members of the Australian Institute of Mining and Metallurgy and/or The Australian
Institute of Geoscientists and have the relevant experience in relation to the mineralisation being reported on
by them to qualify as Competent Persons as defined in the Australian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (The JORC Code, 2012 Edition).
T
N
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M
E
G
A
N
A
M
D
N
A
P
I
H
S
R
E
D
A
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L
6
L
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7
Whitehaven Coal Annual Report 2015 / 69
4SUSTAINABILITY1OVERVIEW5RESOURCES AND RESERVES3OPERATIONS2STRATEGY
Directors
Senior Executives
72
74
70 / A Year of Delivery
6. LEADERSHIP AND MANAGEMENT CORPORATE GOVERNANCE
Our Board is focused on high standards of governance, compliance, business conduct, safety and
environmental performance – all of which are vital to Whitehaven’s performance. It is our belief that high
quality corporate governance supports long-term value creation for shareholders and other stakeholders.
With this in mind, we have reviewed our corporate governance and reporting practices and our corporate
governance statement has been made available on our website this year, in the section titled Corporate
Governance: www.whitehavencoal.com.au/about_us/corporate_governance.cfm
Whitehaven Coal Annual Report 2015 / 71
6LEADERSHIP AND MANAGEMENT7FINANCIAL REPORT1OVERVIEW4SUSTAINABILITY5RESOURCES AND RESERVES2STRATEGY3OPERATIONS DIRECTORS
THE HON. MARK VAILE AO
Chairman and Independent
Non-executive Director
Appointed: 3 May 2012
As Deputy Prime Minister of Australia
and Leader of the National Party
from 2005 to 2007, Mark established
an extensive network of contacts
throughout Australia and East Asia.
His focus at home was with regional
Australia and particularly northern
NSW. As one of Australia’s longest
serving Trade Ministers from 1999
through until 2006, Mark led
negotiations which resulted in Free
Trade Agreements being concluded
with the United States of America,
Singapore and Thailand as well as
launching negotiations with China,
Japan and ASEAN.
Importantly, early in his Ministerial
career as the Minister for Transport
and Regional Services, Mark was
instrumental in the establishment
of the ARTC which operates the
Hunter Valley rail network.
Mark brings significant experience
as a company director, having
been Chairman of Aston Resources
and CBD Energy Limited, and is
currently an independent Director
on the boards of Virgin Australia
Limited and Servcorp Limited
which are both listed on the
ASX. Mark is also a Director of
Stamford Land Corp which is listed
on the Singapore Stock Exchange,
a Director Trustee of HostPlus
Superfund and Chairman of Palisade
Regional Infrastructure Fund.
JOHN C CONDE AO
BSc, BE (Electrical) (Hons),
MBA (Dist)
Deputy Chairman and Independent
Non-executive Director
Appointed: 3 May 2007
John has over 30 years of broad
based commercial experience across
a number of industries, including the
energy sector, and was chairman
of the company prior to the merger
with Aston Resources. John is
chairman of Bupa Australia and New
Zealand, Cooper Energy Limited
and The McGrath Foundation. He is
also president of the Commonwealth
Remuneration Tribunal and a
non-executive director of the Dexus
Property Group. He retired as
chairman of the Sydney Symphony
Orchestra in May 2015. He was
previously chairman of Ausgrid
(formerly Energy Australia) and
Destination NSW. He was formerly
chairman and managing director
of Broadcast Investment Holdings,
as well as a non-executive director
of BHP Billiton Limited and Excel
Coal Limited.
PAUL FLYNN
BComm, FCA
Managing Director
Appointed: 25 March 2013
Previously Non-executive Director
Appointed: 3 May 2012
Paul has extensive experience in the
mining, infrastructure, construction
and energy sectors gained through
20 years as a professional advisor
at Ernst & Young. Paul was formerly
Chief Executive Officer and
Managing Director of the Tinkler
Group. Prior to joining the Tinkler
Group, Paul was the managing
partner of Ernst & Young’s Sydney
office and a member of its Oceania
executive team. As a partner for over
eight years, Paul managed many of
the firm’s largest mining and energy
clients across Australia, Asia, South
and North America. Paul has also
fulfilled various leadership roles with
large corporations on secondment
including as the CFO of a top 50
listed company.
The Hon. Mark Vaile AO
John Conde AO
Paul Flynn
72 / A Year of Delivery
6. LEADERSHIP AND MANAGEMENT in investments throughout Asia
in various industries including
financial services, infrastructure,
manufacturing, energy and real
estate. Previously Raymond was in
the investment banking division of
Goldman, Sachs & Co. in Singapore,
New York and Los Angeles.
DR JULIE BEEBY
BSc (Hons I), PhD (Physical
Chemistry), MBA, FAICD
Independent
Non-executive Director
Appointed: 17 July 2015
Julie has more than 25 years’
experience in the minerals and
petroleum industries in Australia
including major Australian and
US resources companies and
as Chief Executive Officer of
WestSide Corporation, an ASX
listed, Queensland-based coal seam
gas company. Julie has technical,
operations and strategy expertise
and has held senior and executive
positions in coal mining, mining
services and coal seam gas after
commencing her career in coal
and mineral processing research.
Julie is currently the Chairman
of the Board of the Queensland
Electricity Transmission Corporation
Limited, Powerlink Queensland,
and has previously held non-
executive director positions on the
Boards of Gloucester Coal Limited,
Forge Group Limited, CRC Mining,
Queensland Resources Council
and Australian Coal Research.
RICK GAZZARD
BE (Mining) Honours
Independent
Non-executive Director
Appointed: 3 May 2012
Resigned: 16 July 2015
PHILIP CHRISTENSEN
BComm, LLB
Independent
Non-executive Director
Appointed: 3 May 2012
Resigned: 14 July 2014
TONY HAGGARTY
MComm, FAICD
Non-executive Director
from 25 March 2013
Previously Managing Director
to 24 March 2013
Appointed: 3 May 2007
Tony has over 30 years’ experience
in the development, management
and financing of mining companies,
and was co-founder and Managing
Director of Excel Coal Limited from
1993 to 2006. Prior to this, Tony
worked for BP Coal and BP Finance
in Sydney and London, and for
Agipcoal as the Managing Director
of its Australian subsidiary. Tony
was appointed to the Board of
Whitehaven on 3 May 2007 and
was appointed Managing Director
on 17 October 2008.
CHRISTINE MCLOUGHLIN
BA, LLB (Honours), FAICD
Independent
Non-executive Director
Appointed: 3 May 2012
Christine has more than 25 years’
experience working in diverse and
highly regulated sectors in Australia,
UK and South East Asian markets.
Christine has expertise in strategy,
risk, stakeholder engagement
and human resources in industries
including financial services,
telecommunications, health
and nuclear science. Christine is
currently a Director of Suncorp
Group Limited, nib Holdings Ltd
and Spark Infrastructure Group.
She was formerly Chairman of the
Australian Payments Council and
a former Director of the Australian
Nuclear Science & Technology
Organisation (ANSTO), the Victorian
Transport Accident Commission and
Westpac insurance companies in
Australia and New Zealand.
RAYMOND ZAGE
BSc Finance
Non-executive Director
Appointed: 27 August 2013
Raymond is the Managing Director
and Chief Executive Officer of
Farallon Capital Asia which is
responsible for investing capital in
Asia on behalf of Farallon Capital
Management, one of the largest
alternative asset managers in the
world. Raymond has been involved
Tony Haggarty
Christine McLoughlin
Raymond Zage
Dr Julie Beeby
Whitehaven Coal Annual Report 2015 / 73
6LEADERSHIP AND MANAGEMENT5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEW7FINANCIAL REPORT3OPERATIONS2STRATEGY SENIOR
EXECUTIVES
PAUL FLYNN
Managing Director
and Chief Executive Officer
Refer to details set out on
page 72.
TIMOTHY BURT
B.Ec, LLB (Hons) LLM
General Counsel
and Company Secretary
Timothy joined Whitehaven as
General Counsel and Company
Secretary in July 2009. He has
19 years’ ASX Listed company
legal, secretarial and governance
experience across a range
of industries. Prior to joining
Whitehaven, Timothy held senior
roles at ASX listed companies
Boral Limited, UGL Limited and
Australian National Industries
Limited. He holds a Master
of Laws from the University
of Sydney.
KEVIN BALL
BComm, CA
Chief Financial Officer
Appointed as Chief Financial
Officer of Whitehaven Coal in
December 2013, Kevin has over
25 years’ experience working
in the mineral and energy industry
across coal, oil and gas and in
complex consulting practices.
Kevin is a Chartered Accountant
having spent 11 years with Ernst
& Young, predominantly in the
natural resources group, and
has a graduate Diploma in
Geoscience (Mineral Economics)
from Macquarie University.
BRIAN COLE
BE (Civil-H1), M Eng Science,
MBA, Fellow IE Aust, C P Eng.,
M AIMM
Executive General Manager –
Project Delivery
Brian has more than 35 years of
experience in heavy engineering
projects and operations at an
executive level in the energy
related sector and has been
focused on the Maules Creek
project and other brownfields
capital projects within the
Whitehaven portfolio.
Most recently Brian managed the
construction of the three stages of
the third coal terminal in Newcastle
for NCIG with a combined capital
cost circa $2.8 billion.
Paul Flynn
Timothy Burt
Kevin Ball
74 / A Year of Delivery
6. LEADERSHIP AND MANAGEMENT JAMIE FRANKCOMBE
SCOTT KNIGHTS
BE (Mining), MBA (Technology)
BEcons (Hons)
Executive General Manager –
Operations
Executive General Manager –
Marketing
Scott was appointed Executive
General Manager – Marketing
in August 2014. Prior to joining
Whitehaven he was Vice President
Sales, Marketing and Logistics
for Peabody Energy Australia.
Scott has over 23 years of
experience in a wide range of
commercial roles including
marketing, sales, logistics,
management and business
strategy in the commodities
sector, working for Peabody
Energy, Rio Tinto, PwC and
Renison Goldfields Consolidated.
Jamie was appointed Executive
General Manager – Operations
in February 2013.
Jamie was previously Director
Operations at Fortescue Metals
Group Ltd. Prior to that he has
had extensive senior experience
in coal mine operations and
development including as the
Chief Operating Officer of PT
Adaro Indonesia, Executive
General Manager – Americas
for Xstrata Coal and General
Manager Operations for Xstrata
Coal’s Hunter Valley open
cut operations.
Jamie holds a Bachelor of
Engineering (Mining) from
Wollongong University and a
Master of Business Administration
(Technology) from APESMA
Deakin University. Additionally
he holds First Class Certificate
of Competency qualifications
for both the NSW and Queensland
coal industry.
Brian Cole
Jamie Frankcombe
Scott Knights
Whitehaven Coal Annual Report 2015 / 75
6LEADERSHIP AND MANAGEMENT5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEW7FINANCIAL REPORT3OPERATIONS2STRATEGY 7. FINANCIAL REPORT
Directors’ Report
Auditor’s Independence Declaration
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Auditor’s Report
ASX Additional Information
Glossary of Terms and Abbreviations
Corporate Directory
78
108
109
110
111
112
113
159
160
162
164
165
76 / A Year of Delivery
Whitehaven Coal Annual Report 2015 / 77
FINANCIAL REPORT71OVERVIEW4SUSTAINABILITY5RESOURCES AND RESERVES6LEADERSHIP AND MANAGEMENT2STRATEGY3OPERATIONS DIRECTORS’
REPORT
The Directors present their report together with the consolidated financial
report of Whitehaven Coal Limited (‘the Company’ or ‘Whitehaven’), being
the Company, its subsidiaries, and the consolidated entity’s interest in joint
ventures for the year ended 30 June 2015 and the auditor’s report thereon.
1. PRINCIPAL ACTIVITIES
The principal activity of the Group during the period was the development and operation of coal mines
in New South Wales. During the year ended 30 June 2015, Whitehaven Coal Limited and its controlled
entities (’the Group’) substantially completed construction of the Maules Creek open cut mine.
In the opinion of the directors, there were no significant changes in the state of affairs of the consolidated
entity that occurred during the financial year that have not been noted in the review of operations.
2. DIRECTORS AND EXECUTIVES
2(a) Directors
See pages 72 to 73.
2(b) Senior Executives
See pages 74 to 75.
2(c) Directors’ Interests
The relevant interest of each director in the shares and options issued by the Company, as notified by the directors
to the Australian Securities Exchange in accordance with section 205G(1) of the Corporations Act 2001, at the date
of this report is as follows:
ORDINARY SHARES
OPTIONS OVER
ORDINARY SHARES
GRANTED
2,567,767
378,605
265,792
20,060,787
55,000
–
–
189,000
1 May 2012
–
–
–
–
–
–
–
–
–
–
–
–
DIRECTOR
Mark Vaile
John Conde
Paul Flynn
Tony Haggarty
Christine McLoughlin
Ray Zage
Julie Beeby
78 / A Year of Delivery
7. FINANCIAL REPORT 2(d) Directors’ Meetings
The number of Directors’ meetings (including meetings of Committees of Directors) and number of meetings attended
by each of the Directors of the Company during the financial year are:
DIRECTORS’
MEETINGS
AUDIT & RISK
MANAGEMENT
COMMITTEE
MEETINGS
REMUNERATION
COMMITTEE
MEETINGS
HEALTH,
SAFETY,
ENVIRONMENT
& COMMUNITY
COMMITTEE
MEETINGS
GOVERNANCE
& NOMINATIONS
COMMITTEE
MEETINGS
A
14
14
14
14
14
14
14
B
14
14
14
14
11
14
14
A
6
6
–
6
–
–
–
B
6
6
–
6
–
–
–
A
5
5
–
–
–
5
–
B
5
5
–
–
–
5
–
A
–
–
–
4
4
4
–
B
–
–
–
4
4
4
–
A
2
2
–
–
–
2
–
B
2
2
–
–
–
2
–
DIRECTOR
Mark Vaile
John Conde
Paul Flynn
Rick Gazzard
Tony Haggarty
Christine
McLoughlin
Ray Zage
A – Number of meetings held during the time the Director held office during the year
B – Number of meetings attended
3. DIVIDENDS
3(a) Dividends
Paid During the Year
During the year the Company did not pay any dividends.
Declared After End of Year
Directors have resolved not to declare a dividend in respect of the 2015 financial year.
3(b) Share Options
Shares Issued on Exercise of Options
During the reporting period no options have been exercised.
Unissued Shares Under Options
At the date of this report there were 16,872,910 unissued ordinary shares of the Company under options
(16,872,910 at the reporting date). Refer to note 32 of the financial statements for further details of the
options outstanding.
3(c) Indemnification and Insurance of Officers
Indemnification
The Company has agreed to indemnify, to the fullest extent permitted by law, all current and former directors
of the Company against liabilities that may arise from their position as directors of the Company and its controlled
entities. The agreement stipulates that the Company will meet the full amount of any such liabilities, including
costs and expenses.
Insurance Premiums
During the financial year the Company has paid premiums in respect of directors’ and officers’ liability and
legal expenses insurance contracts. Such insurance contracts insure persons who are or have been directors
or officers of the Company or its controlled entities against certain liabilities (subject to certain exclusions).
The directors have not included details of the nature of the liabilities covered or the amount of the premium
paid in respect of the directors’ and officers’ liability and legal expenses insurance contracts as such disclosure
is prohibited under the terms of the contract.
3(d) Indemnification of Auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the
terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Ernst & Young during or since the financial year.
Whitehaven Coal Annual Report 2015 / 79
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY
DIRECTORS’ REPORT
3(e) Rounding
The Company is of a kind referred to in ASIC Class Order 98/100 and dated 10 July 1998 and, in accordance with
that Class Order, all financial information presented in Australian dollars has been rounded to the nearest thousand
unless otherwise stated.
4. OPERATING AND FINANCIAL REVIEW
Financial Headlines
— Operating EBITDA before significant items increased by 44% to $130.3m
— Operating cash flows increased by 97% to $213.4m
— Net debt of $935.8m at 30 June 2015
— Conservatively geared at 25% at 30 June 2015
— Statutory loss after tax increased by 792% to $342.7m. The statutory loss after tax was due predominantly
to three non-cash significant items:
> An impairment charge taken on early stage exploration assets. The impairment charge reflects the recently
changed coal market environment and prospects for early stage exploration assets, particularly assets that
are higher in ash and lower in energy and that would have been targeted towards customers based in China
> An impairment charge taken upon de-recognition of MRRT related deferred tax and goodwill balances as
a result of the enactment of legislation repealing the MRRT (as disclosed in the half year financial statements)
> The write-off of deferred initial establishment costs in relation to the Group’s previous financial facility which
was replaced by a new facility in March 2015 (as disclosed in the March Quarterly Production Report)
The following table summarises the key reconciling items between the Group’s operating EBITDA before significant
items and its statutory loss.
WHITEHAVEN COAL LIMITED – CONSOLIDATED
Revenue
Net loss before significant items
Significant items after tax (refer to note 7)
Net loss for the period
Operating EBITDA before significant items
Significant items before tax and financing (refer to note 7)
Net interest expense (refer to note 12)
Depreciation and amortisation
Loss on investments and asset disposals
Loss before tax
FY2015
$ MILLION
763.3
FY2014
$ MILLION
755.4
(10.7)
(332.0)
(342.7)
130.3
(447.3)
(67.8)
(97.6)
(0.9)
(483.3)
(28.4)
(10.0)
(38.4)
90.4
(14.3)
(52.8)
(79.5)
(0.1)
(56.3)
The 30 June 2015 statutory result includes the impact of the following significant items (refer to note 7):
— A $355.0m impairment charge in relation to early stage exploration assets
— De-recognition of MRRT related deferred tax liability ($25.8m) and MRRT goodwill ($90.7m) balances
as a result of the enactment of legislation repealing the MRRT, resulting in a net profit or loss charge
of $64.9m
— The write-off of $23.1m of deferred up-front costs in relation to the retired debt facility
— Redundancy costs following restructure of the Gunnedah Coal Preparation and Handling Plant
— Provisions established in relation to amounts receivable
80 / A Year of Delivery
7. FINANCIAL REPORT Review of Financial Performance
Group EBITDA before significant items of $130.3m has increased by 44% compared to $90.4m in FY2014.
The improved result was driven by the benefits of a substantial reduction in unit costs of production, increased
production and sales volumes and by eliminating coal purchases, however these improvements were partially
offset by a lower average selling price realised for coal sold.
The key factors that contributed to the improved EBITDA result in the year include:
— A safer workplace
— A strong production result. FOB costs per saleable tonne of $61 in FY2015 have decreased by 12% from
$69 reported in FY2014. The company’s FOB cost per saleable tonne has declined for 2.5 years in the period
since the commencement of the first half of FY2013. These savings have contributed to the Group being able
to defend and grow average EBITDA margins. The key drivers of the significant reduction in unit costs during
the year include:
> Productivity improvements – the underground operation at Narrabri and smaller open cut mines have contributed
to improvements in output with similar or less manning:
– Narrabri saleable coal production (equity) of 5.0Mt was 1.3Mt or 37% above production in FY2014. Production
during FY2015 exceeded nameplate capacity and reflects the operational and technical improvements of
the last two financial years. The increase in production, when combined with tight cost control, has led to
a reduction in unit costs in FY2015
– Production in FY2015 from smaller open cuts was slightly below FY2014, however overall unit costs decreased
largely as a result of improved productivity and a focus on containing costs
> Procurement related savings included a range of initiatives – the benefit of a full year from renegotiated explosives,
rail and road haulage contracts, and from renegotiated contracts for the supply of goods and services
> In addition, ARTC completed its Gunnedah Basin track upgrade from 25 tonne axle loads to 30 tonne axle loads
in January 2015. The upgrade allows larger 8,000 tonne capacity trains to operate from all Whitehaven load
points on the system
> Port costs have also been reducing, but the Hunter Valley flood event in April led to delays at the port of
Newcastle and as a consequence demurrage costs have increased this year
> Flat administration costs – production has grown by 33% in FY2015 yet administration costs have grown by
only 0.5%
> The fall in world crude oil prices in FY2015 has contributed to decreased unit costs of coal production. That fall
has similarly affected all coal producers and caused a decrease in the input costs of coal production which has
contributed to the falls in the US$ prices for coal that all seaborne coal producers have experienced in CY2015
> Despite a 9% increase in FY2015 sales of coal to 9.5mt from 8.7mt (includes 0.5mt of purchased coal), gross
revenues only increased by $7.9m (1%) to $763.3m in FY2015 from $755.4m in FY2014. The 9% increased sales
volume was largely offset by a 7% decrease in A$ average realised selling prices.
A$ prices fell to A$80 per tonne in FY2015 from A$86 per tonne in FY2014. Average US$ denominated coal
prices fell 16% while the A$:US$ exchange rate improved by 8%.
The mix of sales between thermal (82% of volume) and metallurgical coal products (18%) in the year ended
30 June 2015 is consistent with the previous financial year and so did not contribute to the fall in average
selling prices that was experienced.
> All coal sold in FY2015 was supplied from Whitehaven mines whereas in the prior financial year 0.5Mt of sales
were met using purchased coal.
> The Group’s ability to meet sales commitments exclusively with coal produced from Group owned mines reflects
the benefit of the expanded portfolio of mines. As production from Maules Creek Open Cut is ramped up in 2016
and beyond, this benefit will further improve. Maules Creek product is a high quality coal that is attractive to our
customers in Japan, Korea, Taiwan and India. Its presence in the Group’s portfolio will provide greater access to
these premium markets
The results of operations from Maules Creek have been treated as pre-commercial during the year ended 30 June 2015.
This means that the surplus of revenues received from the sale of coal over the costs of producing the coal have not
been reflected in the Statement of Comprehensive Income of the Group during the year, instead that net margin has
been offset against the costs of constructing the mine as reported in the Statement of Financial Position.
Maules Creek commenced commercial operations on 1 July 2015. The financial performance of the mine will be reflected
in the Group’s Statement of Comprehensive Income for the financial year ending 30 June 2016.
Whitehaven Coal Annual Report 2015 / 81
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY DIRECTORS’ REPORT
4. OPERATING AND FINANCIAL REVIEW (CONTINUED)
Cash Flows & Capital Management
CASH FLOWS
Operating cash flows ($ million)
Investing cash flows ($ million)
Senior facility drawings ($million)
FY2015
FY2014
213.4
(436.4)
275.0
108.6
(319.9)
180.0
CAPITAL MANAGEMENT & BALANCE SHEET
30 JUNE 2015
30 JUNE 2014
Cash on hand ($ million)
Undrawn syndicated facility ($ million)
Interest bearing liabilities ($ million)
Net debt ($ million)
Net assets ($ million)
Gearing ratio1
1 . Net Debt/(Net Debt plus Equity)
102.4
300.0
1,038.2
935.8
2,865.0
24.6%
103.2
375.0
788.4
685.2
3,206.5
17.6%
Cash Flow Commentary
Operating Cash Flows
Operating cash flows of $213.4m have increased by 97% from the prior year. The improvement reflects the
following factors:
— Increased EBITDA before significant items of $39.9m to $130.3m in FY2015 from $90.4m in FY2014, for the reasons
set out elsewhere in this report
— The refund of income taxes of $42m following the favourable resolution of a claim for accelerated deductions
at Maules Creek. Operating cash flows in the prior year benefited from a $25m refund in relation to a similar
deduction in respect of Narrabri
— A decrease in working capital in FY2015 (excluding working capital at Maules Creek which is treated as
pre-commercial and impacts investing cash flows)
Investing Cash Flows
Investing cash outflows of $436.4m in the year ended 30 June 2015 reflect an increase of $116.5m compared to FY2014.
The following factors have affected investing cash outflows:
— Maules Creek construction expenditures including capex working capital impacts
— Narrabri development expenditures for both mains and gate roads
— Narrabri longwall second shearer and BSL deposit payments
— Upgrades to rail loops at Werris Creek and Gunnedah to accommodate 30 tonne axle loads (“TAL”)
— Remaining capital spend across the group was tightly controlled and related to sustaining capital required
at each of the mines
— Exploration expenditures were lower in FY2015 than in FY2014
Almost 50% of investing cash flows were funded by cash generated by operations.
Financing Cash Flows
Drawings in FY2015 of $275m from the senior debt facility were used to:
— Meet investing cash flows
— Fund repayments in relation to asset leasing facilities
— Fund initial establishment costs of the new Senior Secured Bank Facility
82 / A Year of Delivery
7. FINANCIAL REPORT Capital Management and Balance Sheet Commentary
Cash on hand at 30 June 2015 of $102.4m is consistent with the cash balance at 30 June 2014.
The Group established a new A$1.4 billion Senior Secured Bank Facility in March 2015 provided by a syndicate
of Australian and international banks. The new facility is comprised of $1.2 billion drawable and a $0.2 billion
guarantee facility. The new facility’s A$1.2 billion drawable line of credit is for general corporate purposes and
has a maturity of July 2019.
The new facility is $0.2 billion larger, and has more favourable terms, than the facility that it replaced. In particular,
the margin and initial establishment fees have been reduced substantially from the previous facility – reflecting the
credit transformation of the company.
Net Debt at 30 June 2015 was $935.8m, an increase of $250.6m from 30 June 2014. The increase has primarily been
used to fund the Group’s share of Maules Creek development expenditure, repayments made of the Group’s asset
leasing facilities and to meet establishment costs associated with the new debt facility.
While the gearing ratio remains low, the increase above FY2014 is largely represented by construction expenditures
in relation to the Maules Creek mine. The gearing ratio has also been affected by the non-cash impairment charge
in relation to exploration expenditures recorded in FY2015 and by impairment charges related to the repeal of the
MRRT legislation.
Undrawn capacity of $300m remains at 30 June 2015.
Consolidated Equity Production, Sales and Coal Stocks
WHITEHAVEN TOTAL (000t)
FY2015
FY2014
MOVEMENT
ROM coal production
Saleable coal production
Sales of produced coal
Sales of purchased coal
Total coal sales
Coal stocks at year end
12,205
11,255
10,859
–
10,859
2,035
9,177
8,161
8,215
511
8,726
1,275
33%
38%
32%
–
24%
60%
The data set out in the above table is presented on an equity basis and includes the Group’s share of Maules Creek pre-commercial production, sales
and coal stock tonnages.
Significant highlights for FY2015 include:
— A 35% improvement in the TRIFR to 9.2
— Record ROM and Saleable coal production for the year
— Narrabri has become one of the most productive longwall underground mines in Australia establishing several
production records during the year
— First coal railed from Maules Creek three months ahead of the original schedule
— Pre-commercial ROM coal production from Maules Creek of 2.6Mt (managed) in FY2015
— Maules Creek capital expenditure initial savings declared for the project
— Construction at Maules Creek approaching completion with the mine declared commercial on 1 July 2015
— Sustainable cost reductions achieved at all operating mines through continuing operational improvements
Review of Operations – Safety
Providing a safe working environment for employees is critical at Whitehaven Coal and is key to the Group’s
improving financial performance. Whitehaven Coal provides training, equipment, resources and systems to
create the safest possible work environment at each site. Building a culture of safety awareness is the foundation
for continuous improvement to exceed targets and to exceed industry averages.
As part of the Company’s Health and Safety Policy, Whitehaven Coal aims to:
— Achieve zero workplace injuries and illnesses
— Achieve zero plant and equipment damage
— Achieve zero environmental incidents
Whitehaven Coal Annual Report 2015 / 83
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY DIRECTORS’ REPORT
4. OPERATING AND FINANCIAL REVIEW (CONTINUED)
2015 Performance
Whitehaven Coal achieved a significant safety milestone in FY2015 following the introduction of the seven
“Safehaven Rules” in late FY2014:
— Achieved lowest Whitehaven Coal Group TRIFR of 9.2, 35% lower than the rate at the end of the previous year
— The TRIFR is significantly below the NSW average coal mining rate of 16.81
Maules Creek Project
See page 33.
Pre-commercial Production and Sales for FY2015
MAULES CREEK 100% (000t)
FY2015
FY2014
MOVEMENT
ROM coal production
Saleable coal production
Sales of produced coal
Coal stocks at year end
Narrabri
See page 34.
Production and Sales for FY2015
2,614
2,231
1,769
779
Construction
Construction
Construction
Construction
–
–
–
–
NARRABRI MINE 100% (000t)
FY2015
FY2014
MOVEMENT
ROM coal production
Saleable coal production
Sales of produced coal
Coal stocks at year end
Open Cut Mines (Excluding Maules Creek)
See page 37.
Production and Sales for FY2015
OPEN CUTS 100% (000t)
ROM coal production
Saleable coal production
Sales of produced coal
Coal stocks at year end
Vickery
See page 38.
7,703
7,193
7,071
1,038
5,659
5,249
5,145
556
36%
37%
37%
87%
FY2015
FY2014
MOVEMENT
5,498
5,095
5,147
824
5,874
5,060
5,206
982
(6%)
1%
(1%)
(16%)
Exploration Projects
Whitehaven has several exploration and potential development projects in Queensland and New South Wales.
These are early stage exploration projects. A decision was taken to record an impairment charge for these
early stage projects in FY2015 because of the change in timeframe for their likely development, due to changes
in market prospects for certain coal types.
In the current market environment the Company is focused on maintaining the tenements in good standing
but is limiting its spending on those projects.
84 / A Year of Delivery
7. FINANCIAL REPORT Infrastructure
Rail Track
Whitehaven contracts below rail capacity with the Australian Rail Track Corporation (ARTC). Whitehaven has
contracted rail capacity that supports both current production volumes and immediate future growth in production.
ARTC is responsible for supplying track capacity to meet the track requirements of its customers. The ARTC provides
its customers with clear upgrade paths. One of the key projects that the ARTC has undertaken over the last few years
and one that was completed in January 2015 was an upgrade of the Gunnedah Basin rail system to support moving to
30 tonne axle loads (from 25 TAL) on coal wagons. This upgrade allowed 8,000 tonne capacity trains to operate from
all load points on the system in 2015.
Rail Haulage
Whitehaven has two rail haulage contracts, one with Pacific National and one with Aurizon. These contracts have a
common expiry date in 2026. The Pacific National contract provides for the haulage of up to 11.5Mtpa and the Aurizon
contract provides for up to 16Mtpa. The company is able to align planned increases in production with contract rail
haulage capacity by giving notice to the rail providers of the need for additional capacity. The contract structure
supports the planned increases in Whitehaven’s managed production levels.
Port Capacity
The company holds contracts for sufficient capacity at the port of Newcastle – either at NCIG or at PWCS – to support
planned shipments in CY2015 and CY2016, however by CY2017 Whitehaven will require additional port capacity for the
Maules Creek mine as it ramps up toward its approved 12Mtpa saleable coal production level. Discussions are in place
with a number of producers to secure this additional port capacity from existing infrastructure. Additional port capacity
will also need to be contracted to support development of Vickery.
Events Subsequent to Reporting Date
In the interval between the end of the financial year and the date of this report there has not arisen any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect
significantly the operations of the consolidated entity, the results of those operations, or the state of affairs of the
consolidated entity, in future financial years.
Outlook and Likely Developments
Whitehaven aims to become the premier independent coal company listed in Australia. This transformation
commenced with the successful development of the Narrabri underground coal mine and has further advanced
with the development of Maules Creek. The next major step toward achieving this goal will be when the Maules
Creek mine achieves its design capacity of 13Mtpa ROM coal in FY2018. Significant progress was made during
2015 when the mine was declared commercial on 1 July 2015.
In FY2015 Whitehaven’s Narrabri mine produced a record 7.7Mt of ROM Coal to become one of the most productive
and lowest cost underground mines in Australia. Production from the mine in FY2016 will be lower than in FY2015 as
two longwall changeouts will occur during the financial year. Maules Creek will continue to ramp up production and
is expected to produce about 7.3Mt of ROM coal. The other open cut mines will produce a similar amount of coal in
FY2016 as in FY2015 taking total production from all the mines to about 19.4Mt ROM coal.
Management remains focused on improving productivity and delivering further cost reductions across the operations.
Additional production growth, underlying cost reductions and improvements in productivity have successfully
positioned Whitehaven in the lowest cost quartile of the current coal industry cost curve. Further work will continue
in these areas in an effort to cement the past three years’ achievements in cost reductions.
In the higher quality segment of the seaborne thermal coal market where Whitehaven sells much of its coal, product
availability is restricted which is providing price support. Continued demand growth in the premium seaborne thermal
coal markets is likely to continue to support current pricing and lead to price increases once the market has progressed
through the current rebalancing phase.
Although Whitehaven is not selling to China, Chinese imports of both metallurgical and thermal seaborne coal during
the first half of calendar year 2015 have declined significantly following the introduction of new import policies.
The lower demand from the seaborne market has generally caused coal prices to fall. In response, producers have
cut metallurgical coal production and redirected their coal into other end markets, however, increases in metallurgical
coal production from Queensland’s Bowen Basin producers has largely left the seaborne metallurgical coal market
oversupplied. These factors have caused prices for metallurgical coal to fall. Further production cuts are required
to rebalance the market.
Several Australian and Indonesian thermal producers have announced production cuts in response to lower Chinese
demand and softer prices for high ash coal. These cuts are expected to reduce the oversupply particularly in the
lower quality segment of the thermal coal market.
Whitehaven Coal Annual Report 2015 / 85
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY DIRECTORS’ REPORT
4. OPERATING AND FINANCIAL REVIEW (CONTINUED)
Risks Relating To Whitehaven’s Future Prospects
Whitehaven operates in the coal sector. There are many factors, both specific to Whitehaven and to the coal industry
in general, which may, either individually or in combination, affect the future operating and financial performance
of the Group, its prospects and/or the value of Whitehaven shares. Many of the circumstances giving rise to these
risks are beyond the control of the Whitehaven Directors and its management. The major risks believed to be
associated with investment in Whitehaven are as follows:
Market Risks
The Company’s future financial performance will be impacted by future coal prices and foreign exchange rates.
The factors which affect coal prices and demand include the outcome of future sales contract negotiations, general
economic activity, industrial production levels, changes in foreign exchange rates, changes in energy demand and
demand for steel, changes in the supply of seaborne coal, changes in international freight rates or other transportation
infrastructure and costs, the cost of other commodities and substitutes for coal, market changes in coal quality
requirements and government regulation which restricts the use of coal, imposes taxation on the resources industry
or otherwise affects the likely volume of sales or pricing of coal.
Sales made under export contracts are denominated in US dollars. The Company uses forward exchange contracts
(FECs) to hedge some of its currency risk in line with its hedging policy.
Operating Risks
The Company’s coal mining operations are subject to operating risks that could result in decreased coal production
which could reduce its revenues. Operational difficulties may impact the amount of coal produced at its coal mines,
delay coal deliveries or increase the cost of mining for varying lengths of time. Such difficulties include (but are not
limited to) weather (including flooding) and natural disasters, unexpected maintenance or technical problems, failure
of key equipment, depletion of the Company’s Reserves, increased or unexpected reclamation costs and interruptions
due to transportation delays.
Geology Risks
Resource and Reserve estimates are stated to the JORC Code and are expressions of judgement based on knowledge,
experience and industry practice. There are risks associated with such estimates, including that coal mined may be
of a different quality, tonnage or strip ratio from those in the estimates.
Development Risks
There is a risk that circumstances (including unforeseen circumstances) may cause delays to project development,
exploration milestones or other operating factors, resulting in the receipt of revenue at a date later than expected.
Additionally, the construction of new projects/expansion by the Company may exceed the currently envisaged
timeframe or cost for a variety of reasons outside of the control of the Company.
5. AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
5(a) Auditor’s Independence Declaration
In accordance with section 324DAA Corporations Act 2001 and the recommendation of the Audit & Risk Management
Committee, the auditor’s rotation period as auditor was extended for 2 years to 30 June 2015, subject to an annual
performance assessment by the Chair of the Audit & Risk Management Committee.
The board is satisfied that the extension has maintained the quality of the audit and did not give rise to any conflicts
of interest for the reasons set out below:
i. A new engagement quality review partner was appointed for the 2014 year end
ii. Extending the time period of the Lead Partner allowed the preservation of knowledge on the engagement given
the changes in operations and the Board and Audit & Risk Management Committee composition
iii. The existing independence and service metrics in place are sufficient to ensure that auditor independence would
not be diminished by such an extension
The 2 year extension to the auditor’s rotation period has now expired and therefore there will be a new Lead Partner
for the financial year ending 30 June 2016.
The auditor’s independence declaration forms part of the Directors’ report for financial year ended 30 June 2015.
It is set out on page 108.
86 / A Year of Delivery
7. FINANCIAL REPORT 5(b) Non-audit Services
During the year Ernst & Young, the Company’s auditor, has performed certain other services in addition to their
statutory duties.
The Board has considered the non-audit services provided during the year by the auditor and, in accordance with
written advice provided by resolution of the Audit and Risk Management Committee, is satisfied that the provision
of those non-audit services during the year by the auditor is compatible with, and did not compromise, the auditor
independence requirements of the Corporations Act 2001 for the following reasons:
— All non-audit services were subject to the corporate governance procedures adopted by the Company and
have been reviewed by the Audit & Risk Management Committee to ensure they do not impact the integrity
and objectivity of the auditor; and
— The non-audit services provided do not undermine the general principles relating to auditor independence as
set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing
the auditor’s own work, acting in a management or decision making capacity for the Company, acting as an
advocate for the Company or jointly sharing risks and rewards.
Details of the amounts paid to the auditor of the Company, Ernst & Young, and their related practices for non-audit
services provided during the year are set out below.
IN AUD
Non-audit services
Ernst & Young
Taxation services
Other non-audit services
Review of National Greenhouse Energy Reporting Act
requirements
Assurance services for refinancing
Other assurance services
TOTAL
6. REMUNERATION REPORT (AUDITED)
6.1 Overview
CONSOLIDATED 2015 ($) CONSOLIDATED 2014 ($)
126,962
65,000
64,849
299,134
–
555,945
–
149,253
31,389
–
13,300
193,942
The Board is committed to applying a fair and responsible executive remuneration framework. The Board believes
that the current framework continues to serve shareholders well and has made the decision to leave the framework
unchanged in 2015.
Our Remuneration Report for the year ended 30 June 2015 (FY2015) is designed to explain to shareholders the
remuneration arrangements that exist within our framework as we strive to achieve our goal of creating the premier
independent listed coal producer in Australia.
The progress that has been achieved is demonstrated by a 44% increase in EBITDA before significant items (“EBITDA”)
in FY2015, but as referred to earlier in this report statutory results have been adversely impacted by several non-cash
charges. Despite the impact of these charges on the statutory result, the Board believes that Whitehaven has made
considerable progress towards achieving its goal in this last financial year.
Against a challenging environment of lower global coal prices and a high exchange rate, Whitehaven’s safety,
operational and cost performances have combined to counter the impact of the price environment to deliver
increased year-on-year operating EBITDA margins and a 44% increase in EBITDA to $130.3m in FY2015 from
$90.4m in FY2014.
Safety TRIFR of 9.2 improved by 35%
EBITDA of $130.3m improved by 44%
ROM Production of 15.8 Mt improved by 37%
Costs of Production $61/t improved 12%
Saleable Production of 14.6mt improved by 41%
Average Selling Price of $80/t decreased 7%
Coal Sales of 14.0mt improved by 29%
Net Loss* of $10.7m improved by 62%
* Before Significant Items
Whitehaven Coal Annual Report 2015 / 87
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY DIRECTORS’ REPORT
6. REMUNERATION REPORT (AUDITED) (CONTINUED)
There were many highlights in FY2015. Of particular note were:
— sustained improvement in the safety result across Whitehaven
— at Maules Creek – construction progress was accelerated, first coal was railed ahead of schedule, production
was ramped up to 6 million tonnes annualised run rate and savings in project construction costs were delivered
— at Narrabri annual ROM production, saleable coal production and sales tonnage records were set together with
lower per tonne production costs
— smaller operations at Tarrawonga, Rocglen and Werris Creek met their production targets and delivered lower
costs of production
— the Vickery project received government approval
— operating costs were lowered across Whitehaven’s coal supply chain
As a consequence of the Group’s operating outcomes, the refinancing of the upsized secured senior debt facility was
supported by major Australian and International banks on terms that reflected the Group’s improved credit position.
Managing Director, Paul Flynn, is supported by a strong executive leadership group. The Board believes that the
Company is well positioned to continue to improve its performance and deliver value for shareholders with an
experienced, balanced and capable leadership team and a sound funding platform.
Our fixed remuneration and our total target remuneration for executive KMP will typically be positioned around the
50th to 75th percentile of the relevant market skill. Our objective for this positioning is to meet the market so that we
attract and retain executive KMP while still ensuring restraint in respect of executive remuneration.
The Remuneration Committee remains committed to ensuring that the Company’s remuneration framework operates
effectively to appropriately incentivise and reward senior executives to execute our strategy while being aligned with
shareholder interests. With respect to the Long Term Incentive (LTI) component of remuneration, in 2014 the Board
introduced a second performance hurdle to apply to the LTI – a costs hurdle. This was done after consultation with
stakeholders who were supportive of a second performance hurdle being adopted. The two hurdles against which
the FY2015 grant will be tested are as follows:
i. 60% of the grant is subject to Relative Total Shareholder Return performance (TSR). The TSR performance rights
are split equally into two tranches; the first tranche has a 3 year performance period, ending 30 June 2017 and the
second tranche has a 4 year performance period, ending 30 June 2018
ii. 40% of the grant is subject to a cost target for the year ended 30 June 2017 that, if achieved, is expected to position
Whitehaven in the lowest cost quartile of the current coal industry cost curve
Given the poor shareholder returns experienced in the coal sector in FY2015, the Board has decided again not to
increase fees for Non-executive Directors for the coming year. Changes in total fixed remuneration (TFR) for executive
KMP will be capped at 2% with two exceptions – the Chief Financial Officer and the Executive General Manager
Marketing. To ensure that our Managing Director and our COO are rewarded in line with market conditions and that
elements of their ‘at risk’ reward continue to be aligned with shareholders, their respective LTI’s will be increased to
100% and 90% (from 80%) of total fixed remuneration.
The Company will be seeking approval from shareholders at the Annual General Meeting for the grant of performance
rights under the long term incentive plan to the Managing Director. Full details of this grant (including the applicable
performance hurdles and vesting schedule) will be set out in the Notice of Meeting.
6.2 Realised Remuneration
Details of the remuneration of KMP prepared in accordance with statutory obligations and accounting standards are
contained in section 6.8 of this Remuneration Report.
The table below is designed to give shareholders a better understanding of the remuneration executive KMP actually
received in FY2015 (including both cash STI and deferred STI, even though these amounts will be delivered after the
end of FY2015).The amounts disclosed in the table, while not in accordance with accounting standards, are considered
more helpful for shareholders to demonstrate the linkage between Company performance and remuneration outcomes
for executives for FY2015.
88 / A Year of Delivery
7. FINANCIAL REPORT FIXED1
STI2
LTI3 CESSATION4
OTHER5
TOTAL
NAME
Paul Flynn
Kevin Ball
Timothy Burt
Brian Cole
1,300,000
836,875
500,000
325,000
499,697
325,000
650,100
422,500
Jamie Frankcombe
875,000
590,625
Scott Knights*
393,552
244,264
1. Fixed remuneration comprises base salary and superannuation.
N/A
N/A
N/A
N/A
N/A
N/A
–
–
–
–
–
–
11,530
2,148,405
–
825,000
11,530
836,227
18,193
1,090,793
11,530
1,477,155
–
637,816
CONTINGENT
STI6
89,375
37,500
37,500
48,750
43,750
29,312
2. STI represents the total amount of the STI that each executive is able to earn based on FY2015 performance even though 30% of this amount has been
deferred into equity instruments in the form of rights to receive shares in the Company, where future receipt of shares is subject to meeting a number
of service based conditions and, in some instances, performance based conditions. Refer to section 6.5.3 for further details.
3. No LTI was available for vesting during FY2015. See section 6.5.5 for details of LTI.
4. There were no cessation payments during FY2015.
5. Other includes parking, motor vehicle benefits and other similar items.
6. Contingent STI refers to STI amounts for above Target EBITDA performance and above Target Maules Creek performance that are the subject
of further performance requirements refer Section 6.5.3 for further details.
*Commenced role as Executive General Manager Marketing on 18 August 2014.
6.3 Key Management Personnel for FY2015
This Report details the remuneration during FY2015 of the key management personnel (KMP) of the Company,
who are listed in the table below. For the remainder of this Remuneration Report, the KMP are referred to as either
executive KMP or Non-executive Directors.
NAME
Paul Flynn
Kevin Ball
Timothy Burt
Brian Cole
TITLE (AT YEAR END)
Managing Director and
Chief Executive Officer
Chief Financial Officer
General Counsel and Company Secretary
Executive General Manager – Project Delivery
Jamie Frankcombe
Executive General Manager – Operations
CHANGES DURING FY2015
Scott Knights
The Hon. Mark Vaile
John Conde
Rick Gazzard
Tony Haggarty
Executive General Manager – Marketing
Commenced 18 August 2014
Chairman and Independent
Non-executive Director
Chair of Governance & Nomination Committee
Deputy Chairman and Independent
Non-executive Director
Chair of Audit & Risk Management Committee
Independent Non-executive Director
Non-executive Director
Chair of Health, Safety, Environment
& Community Committee
Christine McLoughlin
Independent Non-executive Director
Ray Zage
Non-executive Director
Chair of Remuneration Committee
Philip Christensen
Independent Non-executive Director
Resigned 14 July 2014
* Mr Rick Gazzard retired as a Non-executive Director effective 16 July 2015
** Dr Julie Beeby was appointed as a Non-executive Director effective 17 July 2015
Whitehaven Coal Annual Report 2015 / 89
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY DIRECTORS’ REPORT
6. REMUNERATION REPORT (AUDITED) (CONTINUED)
6.4 Remuneration Governance
This section describes the role of the Board, Remuneration Committee and external advisers when making
remuneration decisions, and sets out an overview of the principles and policies that underpin the Company’s
remuneration framework.
6.4.1 Role of the Board and Remuneration Committee
The Board is responsible for ensuring that the Company’s remuneration structures are equitable and aligned
with the long-term interests of the Company and its shareholders. Consistent with this responsibility, the Board
has established a Remuneration Committee, whose role is to:
— Review and approve the remuneration of the senior executives
— Review and approve the remuneration policies and practices for the Group generally, including incentive plans
and other benefits; and
— Review and make recommendations to the Board regarding the remuneration of Non-executive Directors
The Remuneration Committee comprises three independent non-executive directors: Christine McLoughlin
(Committee Chair), John Conde, and Mark Vaile. The Remuneration Committee has a formal charter, which sets
out its roles and responsibilities, composition structure and membership requirements. A copy of this charter
can be viewed on Whitehaven’s website.
Further information regarding the Remuneration Committee’s role, responsibilities and membership will be set
out in the Company’s Corporate Governance Statement.
6.4.2 Use of External Advisors
From time to time, the Remuneration Committee seeks and considers advice from external advisors who are engaged
by and report directly to the Remuneration Committee. Such advice will typically cover Non-executive Director
remuneration, executive KMP remuneration and advice in relation to equity plans.
The Corporations Act requires companies to disclose specific details regarding the use of remuneration consultants.
The mandatory disclosure requirements only apply to those advisers that provide a ‘remuneration recommendation’
as defined in the Corporations Act. The Remuneration Committee has continued to engage the services of Egan
Associates as the Company’s remuneration adviser. In the current financial year the Committee did not receive any
remuneration recommendations, though were provided with information on market trends to assist the Company
in their annual review and continuing reward policy development.
6.4.3 Remuneration Principles and Framework
The Company’s remuneration policies are based on the following core principles:
— To ensure the Company’s remuneration structures are equitable and aligned with the long-term interests of the
Company and its shareholders and having regard to relevant Company policies
— To attract and retain skilled executives
— To structure short and long term incentives that are challenging and linked to the creation of sustainable
shareholder returns; and
— To ensure any termination benefits are justified and appropriate.
These principles are reflected in the Company’s remuneration framework, which comprises both fixed and ‘at risk’
remuneration components as indicated below. Details of each of these components and how they applied during
FY2015 are described in section 6.5.
90 / A Year of Delivery
7. FINANCIAL REPORT TOTAL FIXED
REMUNERATION (TFR)
SHORT TERM
INCENTIVES (STI)
LONG TERM
INCENTIVES (LTI)
— Reviewed annually
— Determined based on a mix of financial
— Provides the Remuneration
— Benchmarked against peer
companies in the materials,
industrial and energy sectors
— Influenced by individual
performance
and non-financial measures
— For KMP, 37% of STI is deferred into
equity instruments in the form of
rights to receive shares in the Company
subject to meeting service based
vesting conditions and, in some
instances, performance based
vesting conditions (with vesting
periods of either 12 or 24 months)
— Ability of the Remuneration
Committee to reduce the number
of deferred equity instruments that
vest if subsequent events show
such a reduction to be appropriate
(‘clawback’)
— For KMP, the STI opportunity
is set at 50% of TFR for target
performance and 75% of TFR
for stretch performance
Committee with the flexibility
to determine the nature, terms
and conditions of the grant
each year
— Operates as an award of
performance rights (i.e. a
right to receive a share in
the Company if specified
performance hurdles
are satisfied)
— For KMP, the face value of the
LTI opportunity is currently
set at between 80% and
100% of TFR
— Contains two performance
hurdles, one being a relative
TSR and the second being
a cost hurdle
6.4.4 Looking Ahead
In line with Company policy and executives’ service agreements, remuneration levels are reviewed annually based
on market benchmarking and individual performance. The Remuneration Committee considered that the executive
KMP performed strongly throughout the year, delivering key projects and initiatives that bring us closer towards
achieving our goal of creating the premier independent listed coal producer in Australia. However consistent with
industry wide wage and salary conditions, and in light of the performance of the Company’s share price and the
experience this year of many of our shareholders, the Board decided:
— not to increase Directors fees; and
— to limit increases in total fixed remuneration of executive KMP to 2% (reflecting the broader workforce) with
two exceptions – an increase in the fixed remuneration of Mr Ball (Chief Financial Officer) based on market
benchmarking, performance and on assuming responsibility for Human Resources and Mr Knights based
on market benchmarking, performance and on assuming responsibilities for Logistics.
The KPI’s adopted in our FY2016 STI program will continue to develop to match the needs of the business and
to drive the creation of shareholder value. Our EBITDA KPI for FY2016 has been changed to Net Profit After
Tax (excluding significant items) in anticipation of the Company returning to profitability. Other KPI’s for safety,
production and FOB unit costs will remain although target levels will be reviewed and hurdles will be increased.
To continue to ensure that our Managing Director and COO are rewarded in line with market conditions and that
their reward is aligned with shareholders, their respective LTI’s will be increased from 80% to 100% and 90%
of total fixed remuneration.
Whitehaven Coal Annual Report 2015 / 91
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY DIRECTORS’ REPORT
6. REMUNERATION REPORT (AUDITED) (CONTINUED)
6.5 Detail of Components of Executive KMP Remuneration
This section describes in greater detail the different components of executive KMP remuneration for FY2015.
6.5.1 Mix and Timing of Remuneration in FY2015
Executive remuneration is delivered as a mix of fixed and ‘at risk’ remuneration. At risk remuneration can
be earned through both STI and LTI and is delivered to executive KMP over multiyear timeframes to create
a layered retention effect and to encourage sustained performance.
The table below illustrates the remuneration mix for executive KMP for FY2015 (assuming target performance
for at risk components):
Executive KMP
FIXED
AT RISK
TOTAL FIXED REMUNERATION
43%
STI
22%
LTI
35%
The diagram below shows timing for determining and delivering executive remuneration for FY2015 and FY2016:
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
Total Fixed
Remuneration
Determined based on:
– Market benchmarking
– FY2014 performance
FY2015
Executive
KMP
Remuneration
Short Term Incentive*
At risk based on
financial and
non-financial KPI’s
Restriction period for
Tranche 1 of STI Deferred
Equity Instruments
Service Based Vesting
Period – Tranche 2
Long Term Incentive
At risk based on performance against
relative TSR measure & cost hurdle
Vesting period for Tranche 1
Service Based Vesting
Period – Tranche 2
Total Fixed
Remuneration
Determined based on:
– Market benchmarking
– FY2015 performance
Short Term Incentive
At risk based on
financial and
non-financial KPI’s
FY2016
Executive
KMP
Remuneration
Restriction period for
Tranche 1 of STI Deferred
Equity Instruments
Service Based Vesting
Period – Tranche 2
Long Term Incentive
At risk based on performance against
relative TSR measure & cost hurdle
Vesting period for Tranche 1
Service Based Vesting
Period – Tranche 2
* Short Term Incentive awards that are performance based (refer section 6.5.3) will be tested in the 24 months after the grant date. If performance targets
are met in the second year the relevant award(s) will vest 24 months after the grant date. If performance targets are met in FY2016, half the award(s) will
vest 12 months after the grant date. The other half will vest 24 months after the grant date.
6.5.2 Fixed Remuneration
Fixed remuneration received by executive KMP is subject to approval by the Remuneration Committee.
Fixed remuneration is comprised of base salary and superannuation.
Both fixed remuneration and total target remuneration will typically be positioned between the 50th and 75th
percentile of the relevant market skill. The objective of this positioning is to meet the market so as to attract
and retain executive KMP in a sector where demand for skilled executives is high and the talent pool is relatively
small, while still ensuring appropriate restraint in respect of executive remuneration. Actual market positioning
for each individual may deviate from the positioning policy (above or below) due to considerations such as
internal relativities, experience, tenure in role, individual performance and retention considerations.
6.5.3 Short Term Incentive for FY2015
The following table summarises the terms of the STI that applied during FY2015.
Who participated? All executive KMP.
92 / A Year of Delivery
7. FINANCIAL REPORT What was the
performance
period?
What was the
target
STI award?
What were the
performance
conditions and
how were they
assessed?
For all executive KMP the STI for FY2015 operated over a 12 month performance period
from 1 July 2014 to 30 June 2015.
Executive KMP’s target STI was 50% of fixed remuneration over the 12 month performance
period with up to 75% of fixed remuneration for stretch performance. The STI amount actually
awarded for FY2015 is shown in section 6.5.4.
The following KPI’s were adopted as performance conditions and applied to the
FY2015 STI:
— Safety (total recordable injury frequency rate (TRIFR))
— FOB cost per saleable tonne (equity basis)
— ROM production (managed basis)
— EBITDA (before significant items)
— Specific objectives in relation to Maules Creek
— Leadership and individual key performance indicators as agreed between the
Managing Director and the Board which included refinance of the senior debt facility
At the beginning of FY2015, the Board set KPI’s, the achievement of which was expected to
be critical to the success of the Group at this time in the coal cycle. All KPI’s were exceeded.
The KPI’s remain appropriate for the longer term interests of shareholders and the efforts and
achievements of management during the year were exceptional in difficult circumstances.
The Board designed these KPI’s to ensure that the balance sheet of the Group was positioned
to withstand the difficult circumstances that were anticipated.
The Group’s statutory loss was due predominantly to three non-cash significant items –
the impairment of exploration assets, the enactment of legislation to repeal the MRRT, and the
successful refinance of the Group’s debt facility. The Board was mindful that all KPI’s had been
met or exceeded, notwithstanding the statutory loss, and resolved that the STI awards should
therefore be approved as assessed.
The Remuneration Committee and the Board assessed and approved the STI award paid to the
Managing Director. The performance conditions for the senior executives were assessed by the
Managing Director and approved by the Board.
The weightings of each performance condition were tailored to reflect the executive KMP’s role.
The weightings are set out in the following table:
MANAGING
DIRECTOR
CFO
COMPANY
SECRETARY
/GROUP
COUNSEL
EGM
PROJECTS
EGM
OPERATIONS
EGM
MARKETING
20%
20%
20%
20%
20%
20%
15%
20%
15%
10%
15%
20%
15%
10%
20%
20%
15%
20%
20%
10%
10%
40%
20%
20%
10%
20%
10%
10%
30%
20%
15%
10%
10%
10%
10%
10%
Safety
(TRIFR)
FOB cost
per saleable
tonne
ROM
production
EBITDA
Maules Creek
Individual
Leadership
KPI’s
Why were these
performance
conditions
chosen?
These performance conditions were chosen as they were directly linked to the operational
priorities of the Company.
Whitehaven Coal Annual Report 2015 / 93
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY DIRECTORS’ REPORT
6. REMUNERATION REPORT (AUDITED) (CONTINUED)
What
performance
level was
achieved?
A snapshot of the performance levels achieved for FY2015 is set out below:*
Safety
FOB cost per
saleable tonne
ROM production
EBITDA
YOY1
35%
12%
37%
44%
ACTUAL
TARGET
STRETCH
OUTCOME
9.2
12.65
10.54
Exceeded Stretch
$61/t
15.8Mt
$130m
$64/t
14.3Mt
$105m
$62/t
Exceeded Stretch
14.8Mt
Exceeded Stretch
$115m Exceeded Stretch
1. Year on year improvement
* Excludes Maules Creek and Individual Leadership KPI’s.
Safety
The continued emphasis on a safe working environment has driven a significant and sustained 3 year
reduction in the TRIFR from 34.61 in FY2012, 20.11 in FY2013, 14.06 in FY2014 to 9.2 in FY2015. Against
tough market conditions the Whitehaven view that “tonnes cannot come at the expense of safety” has
been embedded well in the Company. Our producing mines and our construction site at Maules Creek
have performed very safely – our TRIFR of 9.2 is superior to the NSW coal industry average. The
progress of the Company over the last three years to improve its safety processes and standards now
positions the Company well above the average safety performance for the NSW coal industry.
FOB cost per saleable tonne
The concerted effort by management to lower operating costs continues. We have several
mines that are in or are approaching the lowest cost quartile of the current coal industry cost
curve. Costs for FY2015 were driven substantially lower than the previous year and well below
target. The actual outcome for the FY2015 cost target (equity basis) was $61/t FOB, which
exceeded the target of $64/t FOB.
ROM production (managed)
In FY2015, first production from Maules Creek and record production was achieved at Narrabri.
The other open cut mines met their respective production targets for the year. The combination
of higher production and lower unit costs improved the EBITDA outcome, that otherwise might
have been achieved, by more than $35m.
EBITDA (before significant items)
Excellent cost control, combined with record production enabled the Company to exceed its
EBITDA target of $105m for FY2015 despite a difficult coal price environment. The STI award in
excess of Target has been deferred into equity instruments and is subject to the vesting condition
that the Company return to profitability within two years (see below for further details).
Maules Creek
Maules Creek construction proceeded well ahead of schedule. First railings from Maules
Creek were brought forward by three months from the first week of March 2015 to the third
week of December 2014. Typically, when construction milestone dates in large projects, like
Maules Creek, are brought forward, the total project cost increases. However, at Maules Creek
management was able to bring the project into production earlier than scheduled and below
the project’s construction budget enabling it to be declared commercial on 1 July 2015. The STI
award in excess of Target for the Maules Creek KPI has been deferred into equity instruments
and is subject to a vesting condition in relation to project savings (see below for further details).
Individual leadership KPI’s
Managing Director KPI’s are cascaded into the Company to site management level. Below
site management level a mix of specific site based and Company-wide targets are adopted as
appropriate. The STI classification weightings that apply for the Managing Director are broadly
consistent when cascaded into the Company.
Refinancing
Aided by progress to achieve the operational and financial KPI’s, the Group established a new
A$1.4 billion Senior Secured Bank Facility in March 2015. The new facility is larger, and has
more favourable terms, than the facility that it replaced. In particular, the margin and initial
establishment fees have been reduced substantially from the previous facility – reflecting the
credit transformation of the company.
94 / A Year of Delivery
7. FINANCIAL REPORT How is the
STI delivered?
63% of the STI award will be paid to the executive KMP in cash in September 2015.
The remaining 37% of the STI award will be deferred into equity instruments (Deferred Equity),
delivered as rights to receive Whitehaven ordinary shares subject to meeting service based
vesting conditions and, in some instances, performance based vesting conditions. On vesting,
each right will entitle the recipient to one ordinary share in the Company. The Deferred Equity
portion of the executive KMP’s STI is split into two tranches:
— Tranche 1 consists of 27% of the total STI and is subject to serviced based vesting conditions
only. Half of this tranche will vest 12 months after the grant date. The other half will vest
24 months after the grant date.
— Tranche 2 consists of the remaining 10% up to the total STI and represents the portion
of stretch performance achieved in relation to the EBITDA and Maules Creek KPI’s.
Tranche 2 of the Deferred Equity is subject to the achievement of the following two
performance conditions:
i. Up to 6% of the total STI will vest if the final project savings amount for the Maules Creek
project is achieved; and
ii. 4% of the total STI will vest if the Company reports a full year Net Profit After Tax within
the next two years.
The relevant tranche 2 performance conditions will be tested in the 24 months after the
grant date.
Deferred Equity will not vest if the executive KMP resigns or is terminated for cause or the
Board applies its discretion to clawback some or all of the Deferred Equity. Dividends do not
accrue on Deferred Equity.
KMP are required to comply with the Company’s securities trading policy in respect of their
Deferred Equity, which includes a prohibition on hedging or otherwise protecting the value
of their unvested securities. In the event of a takeover or any proposed transaction that,
in the Board’s opinion, is likely to result in a change of control, the Deferred Equity will vest.
6.5.4 STI Award Outcomes for KMP
As noted in the table above, KMP outperformed most components of the FY2015 STI. The individual outcome for each
KMP is set out in the table below:
KMP
Paul Flynn
Kevin Ball
Timothy Burt
Brian Cole
Jamie Frankcombe
Scott Knights*
STI EARNED ($A)
PAID AS CASH ($)
DEFERRED INTO
EQUITY ($)
PERCENTAGE OF
MAXIMUM STI
CONTINGENT STI
585,813
227,500
227,500
295,750
413,438
170,985
251,062
97,500
97,500
126,750
177,187
73,279
86%
87%
87%
87%
90%
83%
89,375
37,500
37,500
48,750
43,750
29,312
* Commenced role as Executive General Manager Marketing on 18 August 2014
Whitehaven Coal Annual Report 2015 / 95
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY
DIRECTORS’ REPORT
6. REMUNERATION REPORT (AUDITED) (CONTINUED)
6.5.5 2014 Long Term Incentive Grant
As outlined in last year’s Remuneration Report, the Board has introduced a second performance hurdle for the LTI
granted in 2014 (2014 LTI grant) based on a cost per tonne target (cost hurdle). The cost hurdle was set at a level
which is aligned to the Company’s goal of being Australia’s leading independent coal producer. The hurdle rate chosen
was designed to position the Company in the lowest cost quartile of the current coal industry cost curve and was
introduced in response to feedback received from shareholders. The cost hurdle applies to 40% of the grant. To
ensure consistency with shareholder expectations, the Board retains the discretion to adjust the outcome of the
cost hurdle (upwards or downwards) to take account of mergers, acquisitions and divestments or other exceptional
circumstances. The remaining 60% of the grant continues to be tested against a relative TSR performance hurdle.
The following table describes the full terms of the 2014 LTI grant.
Who participated? All executive KMP.
What was
granted?
What are the
performance
conditions?
Why were these
performance
conditions
chosen?
What are the
performance
periods?
All executive KMP were granted performance rights with a face value equal to 80% of their TFR.
The number of rights granted was determined by reference to the volume weighted average
price of the Company’s shares over the 20 trading day period commencing 10 trading days
prior to 30 June 2014. Shareholder approval was obtained at the Annual General Meeting last
year for the grant of performance rights to Mr Flynn.
There is no exercise price payable on vesting of the performance rights.
The award was split into the following components:
— TSR rights: 60% of the award is subject to a relative total shareholder return (TSR)
performance hurdle, which compares the TSR performance of the Company with the TSR
performance of a peer group of companies operating in the Australian resources sectors;
and
— Costs target rights: 40% of the award is subject to the Company achieving a defined costs
per tonne target (Costs Hurdle) – see below.
A TSR performance hurdle has been chosen on the basis that it allows for an objective external
assessment of the shareholder value created by the Company over a sustained period and on
a basis that is familiar to shareholders.
As stated above, the Cost Hurdle was chosen and set at a level which is aligned to the Company’s
vision to be Australia’s leading independent coal producer and positioned in the lowest cost
quartile of Australian coal producers.
The TSR Rights are divided into two equal tranches capable of vesting after a 3 and 4 year
performance period (respectively), with each performance period commencing on 1 July 2014.
The Costs Target Rights are capable of vesting at the end of FY2017 based on the FOB cost per
saleable tonne achieved on a Company-wide basis over the 12 month period from 1 July 2016
to 30 June 2017.
96 / A Year of Delivery
7. FINANCIAL REPORT How will the
performance
condition be
calculated for
the TSR rights?
How will the
performance
condition be
calculated
for the cost
target rights?
The TSR of the Company for the 2014 LTI grant is measured as a percentile ranking compared
to the below comparator group of listed entities over the relevant performance period for
the tranche.
Alumina
Arrium
Aquila Resources
Beach Energy
BHP Billiton
BlueScope Steel
Caltex Australia
Fortescue Metals Group
Iluka Resources
Independence Group
New Hope Group
Newcrest Mining
Oil Search
Origin Energy
Oz Minerals
PanAust
Rio Tinto
Santos
Sims Metal Management
Sirius Resources
Western Areas
Whitehaven Coal
Woodside Petroleum
WorleyParsons
The constituents of the comparator group are determined each year at the time of grant.
The level of vesting will be determined based on the ranking against the comparator group
companies in accordance with the following schedule:
— In the 75th percentile (i.e. lowest cost quartile) or above – 100% of the TSR Rights vest;
— Between the 50th and 75th percentile – 35% of the TSR Rights vest at the 50th percentile,
and thereafter additional vesting will occur on a pro rata straight line basis up to the 75th
percentile; and
— Below the 50th percentile – no TSR Rights vest.
Unless the Remuneration Committee determines otherwise, the TSR of a company for a
performance period will be calculated adopting the following determination of the relevant
opening and closing share prices:
— The volume weighted average share price over the 20 trading day period commencing
10 trading days before 1 July 2014 (opening share price); and
— The volume weighted average share price over the corresponding 20 trading day period
at the conclusion of the relevant Performance Period (closing share price)
The Remuneration Committee has set the LTI Costs Hurdle having regard to the Company’s
budgeted cost forecasts and to the current coal industry cost curve as measured by a
recognised expert. The Board is satisfied that the LTI Costs Hurdle is challenging and rigorous
and, if the target is achieved, it would place the Company in the lowest cost quartile of the
current coal industry cost curve.
Testing will occur at the end of FY2017 based on the average costs achieved on a Company-wide
basis over the 12 month period from 1 July 2016 to 30 June 2017. Full vesting will only occur if the
Board is satisfied that performance meets or exceeds the Stretch Target as set out below. The
Board may, where it is appropriate to do so, revise the targets below to take account of mergers,
acquisitions and divestments or other exceptional circumstances.
Vesting will occur based on the following schedule:
— Stretch or above – 100% of Cost Target Rights vest;
— Between Target and Stretch – 35% of the TSR Rights vest at Target performance and thereafter
additional vesting will occur on a pro rata straight line basis up to stretch performance;
— Target – 35% of Cost Target Rights vest; and
— Below Target – no Cost Target Rights vest.
Due to the commercially sensitive nature of this hurdle, the exact target will not be disclosed at
this stage. However, retrospective disclosure of the outcomes against the target will be provided
in the Remuneration Report for the year of vesting. Notably, the Company also sets annual short
term cost hurdles in the KPI’s for executive KMP’s STI awards. Measured outcomes against that
hurdle are reported at the end of each financial year.
To the extent that the Costs Hurdle is satisfied at the end of FY2017:
— 50% of the Costs Target Rights that vest will be immediately delivered in shares; and
— The remaining 50% will continue on foot, subject to a further one year service condition prior
to being delivered in shares.
Notwithstanding the vesting schedule above, the Board retains a discretion to lapse any or all
Costs Target Rights if the Board considers that vesting would be inappropriate in light of the
intent and purpose of the target.
Whitehaven Coal Annual Report 2015 / 97
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY DIRECTORS’ REPORT
6. REMUNERATION REPORT (AUDITED) (CONTINUED)
Re-testing
Do the
performance
rights attract
dividend and
voting rights?
All performance rights that do not vest following testing will lapse immediately. There is no
re-testing of awards that do not vest.
Performance rights do not carry voting or dividend rights.
Shares allocated on vesting of performance rights rank equally with other ordinary shares on
issue, including in relation to dividend and voting rights. Participants are required to comply
with the Company’s securities trading policy in respect of their performance rights and any
shares they receive upon vesting. They are prohibited from hedging or otherwise protecting
the value of their performance rights.
What happens
in the event of a
change in control?
In the event of a takeover bid or other transaction, event or state of affairs that in the Board’s
opinion is likely to result in a change in control of the Company, the Board has a discretion to
determine that vesting of some or all of any unvested performance rights should be accelerated.
What happens
if an executive
ceases
employment
during the
performance
period?
In general, unless the Board determines otherwise, where an executive’s employment
is terminated:
— For cause: all unvested performance rights will lapse
— Due to resignation or by mutual agreement with the Company: unvested performance
rights will remain on foot and subject to the original performance hurdle. However, the
Board may at its discretion determine to lapse any or all of the unvested performance
rights and ordinarily, in the case of a resignation, would be expected to do so
— For any other reason: unvested performance rights will remain on foot and subject to
the original performance hurdle, with Board discretion to determine that some of the
performance rights (up to a pro rata portion based on how much of the performance
period remains) will lapse. The performance rights that remain on foot will be tested
in the normal course following the end of the relevant performance period
98 / A Year of Delivery
7. FINANCIAL REPORT 6.5.6 Equity Instruments Granted as Remuneration
Performance Rights Granted to KMP
Details of performance rights granted to KMP during FY2015 are set out in the table below. The grants to KMP
constituted their full LTI entitlement for FY2015 and were made on the terms summarised in section 6.5.5 above.
KMP
Paul Flynn
Kevin Ball
Timothy Burt
Brian Cole
Jamie
Frankcombe
Scott Knights
NUMBER OF
PERFORMANCE
RIGHTS
GRANTED
213,699
213,698
PERFORMANCE
HURDLE*
GRANT DATE
TSR
TSR
16 January 2015
16 January 2015
284,932
Costs Hurdle
16 January 2015
82,192
82,192
TSR
TSR
16 January 2015
16 January 2015
109,589
Costs Hurdle
16 January 2015
82,192
82,192
TSR
16 January 2015
TSR
16 January 2015
109,589
Costs Hurdle
16 January 2015
106,866
106,865
142,488
143,836
143,835
TSR
TSR
16 January 2015
16 January 2015
Costs Hurdle
16 January 2015
TSR
TSR
16 January 2015
16 January 2015
191,781
Costs Hurdle
16 January 2015
73,973
73,972
TSR
TSR
16 January 2015
16 January 2015
98,630
Costs Hurdle
16 January 2015
FAIR VALUE PER
PERFORMANCE
RIGHTS AT
GRANT DATE**
$0.71
$0.72
$1.17
$1.13
$0.71
$0.72
$1.17
$1.13
$0.71
$0.72
$1.17
$1.13
$0.71
$0.72
$1.17
$1.13
$0.71
$0.72
$1.17
$1.13
$0.71
$0.72
$1.17
$1.13
VESTING
DATE
30 June 2017
30 June 2018
30 June 2017
30 June 2018
30 June 2017
30 June 2018
30 June 2017
30 June 2018
30 June 2017
30 June 2018
30 June 2017
30 June 2018
30 June 2017
30 June 2018
30 June 2017
30 June 2018
30 June 2017
30 June 2018
30 June 2017
30 June 2018
30 June 2017
30 June 2018
30 June 2017
30 June 2018
* To the extent that the Costs Hurdle is satisfied at the end of FY2017, 50% of the rights will vest immediately and the remaining 50% will continue on foot,
subject to a further one year service condition.
** The fair value for performance rights granted to the KMP is based on the fair value at the grant date, measured using a Monte Carlo simulation model.
The factors and assumptions used in determining the fair value are set out in the note 32 to the financial statements.
Whitehaven Coal Annual Report 2015 / 99
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY DIRECTORS’ REPORT
6. REMUNERATION REPORT (AUDITED) (CONTINUED)
6.6 Company Performance
A snapshot of key Company performance measures for the past five years is set out below:
Revenue ($m’s)
EBITDA ($m’s)
2015
763.3
130.3
Profit/(loss) attributable to the group ($m’s)
(342.7)
Share price at year end (dollars per share)
Basic EPS (cents per share)
Diluted EPS (cents per share)
Dividends paid (cents per share)
Special dividends paid (cents per share)
TRIFR
Saleable production – Mt
* The opening share price for 2011 was $4.80.
6.7 Employment Contracts
$1.32
(33.3)
(33.3)
–
–
9.2
11.3
2014
755.4
90.4
(38.4)
$1.43
(3.9)
(3.9)
–
–
14.06
8.2
2013
622.2
17.1
(88.7)
$2.30
(9.0)
(9.0)
3.0
–
20.11
6.6
2012
618.1
149.2
62.5
$4.15
10.9
10.9
4.1
50.0
34.61
4.3
2011
(PRE-MERGER)
622.2
148.0
9.9
$5.83*
2.0
2.0
6.1
–
20.21
4.2
The following section sets out an overview of the remuneration and other key terms of employment for the executive
KMP, as provided in their service agreements.
6.7.1 Managing Director
Paul Flynn was appointed as Managing Director and CEO of the Company on 25 March 2013. This table outlines the key
terms of Mr Flynn’s contract of employment.
Fixed
remuneration
Short term
incentive
Long term
incentive
Mr Flynn’s TFR for FY2016 is $1,326,000 per annum, which includes salary, superannuation
contributions, any components under Whitehaven’s salary packaging guidelines and all
director’s fees. TFR is reviewed annually.
Mr Flynn is eligible to participate in the annual STI plan, as described in section 6.5 of this
Remuneration Report. At target level of performance, his STI opportunity is 50% of TFR,
with up to 75% of TFR for stretch performance.
Mr Flynn is eligible to participate in the LTI plan on terms similar to those applicable to grants
made to other senior executives of Whitehaven (as set out in section 6.5) and subject to
receiving any required or appropriate shareholder approval. The Board has increased
Mr Flynn’s LTI grant from 80% to 100% of his TFR for FY2016.
Other key terms
Other key terms of Mr Flynn’s service agreement include the following:
— His employment is ongoing, subject to twelve months’ notice of termination by Whitehaven
or six months’ notice of termination by Mr Flynn
— The Company may terminate without notice in certain circumstances, including serious
misconduct or negligence in the performance of duties. Mr Flynn may terminate immediately
in the case of fundamental change to his role (i.e. there is a substantial diminution to his
responsibilities), in which case his entitlements will be the same as if the Company terminated
him without cause
— The consequences for unvested incentive awards on termination of Mr Flynn’s employment
will be in accordance with the Company’s STI and LTI plans
— Mr Flynn will have post-employment restraints for a period of three months. No additional
amounts will be payable in respect of this restraint period
100 / A Year of Delivery
7. FINANCIAL REPORT 6.7.2 Senior Executive Contracts
A summary of the notice periods and key terms of the current executive KMP contracts are set out in the table below.
All of the contracts below are of ongoing duration.
NAME AND POSITION (AT YEAR-END)
NOTICE
Kevin Ball
Chief Financial Officer
Appointed 16 December 2013
Timothy Burt
General Counsel and Joint Company Secretary
Appointed 29 July 2009
Brian Cole
Executive General Manager – Project Delivery
Appointed 1 July 2012
Jamie Frankcombe
Executive General Manager – Operations
Appointed 4 February 2013
Scott Knights
Executive General Manager – Marketing
Appointed 18 August 2014
3 months by employee
6 months by the Company
3 months by employee
12 months by the Company
6 months by employee or the Company
3 months by employee
6 months by the Company
6 months by employee or the Company
The executive contracts give the Company discretion to make payment in lieu of notice. No notice is required
where termination is for cause. The contracts do not provide for any termination payments other than payment
in lieu of notice.
Treatment of unvested incentives is dealt with in accordance with the terms of grant. In general, under the STI and
LTI arrangements, unvested entitlements will be forfeited where an executive is terminated for cause or, subject to
the Board’s discretion, where they resign. In all other circumstances where the Board considers the executive to be
a ‘good leaver’, outgoing executives will generally retain their entitlements (subject to any applicable performance
conditions in the case of LTI arrangements).
Whitehaven Coal Annual Report 2015 / 101
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY DIRECTORS’ REPORT
6. REMUNERATION REPORT (AUDITED) (CONTINUED)
6.8 Statutory Senior Executive Remuneration Table
The following table sets out the statutory remuneration disclosures required under the Corporations Act 2001 (Cth)
and has been prepared in accordance with the appropriate accounting standards and has been audited.
IN AUD
FY
SALARY
& FEES
CASH
BONUS
NON-
MONETARY
BENEFITS
(A)
SUPER-
ANNUATION
BENEFITS
SHORT
TERM
INCENTIVE
(B)
TERMINATION
BENEFITS
SHARES
RIGHTS
AND
OPTIONS
(C)
TOTAL
REMUNERATION
SHARE-BASED
PAYMENTS
Directors
Paul Flynn*
2015
1,275,518
2014
1,275,000
Other
Executives
Kevin Ball**
2015
475,000
2014
249,956
Timothy Burt
2015
469,697
2014
450,000
Brian Cole
2015
615,100
Jamie
Frankcombe
Scott
Knights***
2014
615,100
2015
850,000
2014
850,000
2015
371,032
–
–
–
–
–
–
–
–
–
–
–
11,530
11,160
24,482
926,250
25,000
809,435
–
–
11,530
11,160
18,193
25,000
362,500
13,636
114,895
30,000
362,500
25,000
217,346
35,000
471,250
15,463
35,000
298,359
11,530
11,160
25,000
634,375
25,000
437,500
–
22,520
273,575
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
180,678
48,011
2,418,458
2,168,606
61,606
14,860
116,809
85,945
157,000
117,615
137,379
48,182
924,106
393,347
990,536
789,451
1,296,543
1,081,537
1,658,284
1,371,842
–
667,127
* Commenced role as Managing Director and CEO on 25 March 2013. Mr Flynn’s STI in FY14 operated over a 15 month period in recognition of the fact that
he did not participate in the FY2013 STI grant
** Commenced role as Chief Financial Officer on 16 December 2013
*** Commenced role as Executive General Manager Marketing on 18 August 2014
A. The amounts disclosed as non-monetary benefits relate to car spaces, motor vehicle benefits and other similar items.
B. Refer to section 6.5 of twhe remuneration report for details of the FY2015 STI – approximately 63% will be paid in September 2015 while 37% will be the
subject of further service based vesting conditions and in some instances performance based vesting conditions.
C. The fair value for Performance Rights granted to the KMP is based on the fair value at the grant date, measured using a Monte Carlo simulation model.
The factors and assumptions used in determining the fair value are set out in note 32 to the financial statements.
6.8.1 Movement of Equity Instruments
The movement during the reporting period, by number and value, of performance rights over ordinary shares and
deferred shares in the Company held by each senior executive is detailed below.
EXECUTIVE
INSTRUMENT
BALANCE
AS AT 1
JULY 2014
(NUMBER)
GRANTED
(NUMBER)
(A)
GRANTED
(VALUE)
(B)
VESTED
(NUMBER)
VESTED
(VALUE)
(C)
LAPSED
(NUMBER)
Paul Flynn
Performance Rights
590,909
712,329
$633,261
Deferred Shares (STI)
–
126,410
$242,707
Kevin Ball
Performance Rights
96,380
273,973
$243,562
Deferred Shares (STI)
–
19,150
$36,768
Timothy Burt
Performance Rights
262,100
273,973
$243,562
–
–
–
–
–
–
–
–
–
–
LAPSED
(YEAR OF
GRANT)
(D)
–
–
–
–
BALANCE
AS AT 30
JUNE 2015
(NUMBER)
1,303,238
126,410
370,353
19,150
–
–
–
–
30,819*
2012
505,254
Deferred Shares (STI)
10,292
33,937
$65,159
5,146
$10,395
–
–
39,083
Brian Cole
Performance Rights
358,700
356,219
$316,679
–
–
42,174*
2012
672,745
Deferred Shares (STI)
12,499
46,597
$89,467
6,250
$12,625
Jamie
Frankcombe
Performance Rights
312,500
479,452
$426,233
–
–
Deferred Shares (STI)
6,676
68,287
$131,111
3,338
$6,743
Scott Knights Performance Rights
–
246,575
$219,205
–
–
–
–
–
–
–
–
–
–
52,846
791,952
71,625
246,575
* The performance period for Tranche 1 of the 2012 LTI grant expired on 23 September 2014 and all of the rights lapsed as a result of the performance
condition not being met.
A. The number of deferred shares granted during FY2015 reflects the deferred component of the FY2014 STI award, calculated by reference to the volume weighted
average price of the Company’s shares for the 20 day trading period commencing 10 trading days prior to 27 August 2014. The grant date of the deferred shares was
16 January 2015. The deferred shares are subject to a further one and two year service based vesting condition, as disclosed in last year’s Remuneration Report.
102 / A Year of Delivery
7. FINANCIAL REPORT
B. The value of performance rights granted in the year is the fair value of the performance rights at grant date using the Monte Carlo simulation model.
The total value of the performance rights granted is included in the table above. The unvested performance rights and deferred shares have a minimum
value of zero if they do not meet the relevant performance or service conditions. The maximum value of unvested performance rights and deferred
shares is the sale price of the Company’s shares at the date of vesting.
C. No performance rights vested during the period. Tranche 1 of the FY2013 STI deferred shares vested during the period. The vested value has been
calculated using the volume weighted average price of the Company’s shares for the 20 day trading period commencing 10 trading days prior to the
effective grant date of 27 August 2013.
D. The year in which the performance rights which lapsed were granted.
6.9 Non-executive Director Remuneration
This section explains the remuneration for Non-executive Directors.
6.9.1 Setting Non-executive Director Remuneration
Remuneration for Non-executive Directors is designed to ensure that the Company can attract and retain suitably
qualified and experienced Directors.
Non-executive Directors do not receive shares, share options or any performance-related incentives as part of their
remuneration from the Company however Directors are strongly encouraged to hold shares.
Directors are also entitled to be remunerated for any travel and other expenses reasonably incurred when attending
meetings of the Board or in connection with the business of the Company.
The Remuneration Committee reviews and makes recommendations to the Board with respect to Non-executive
Directors’ fees and committee fees.
6.9.2 Current Fee Levels and Fee Pool
The table below sets out the Board and committee fees in Australian dollars as at 30 June 2015.
The Board determined that there would be no fee increases for Non-executive Directors in FY2016. Fees remain
unchanged since 2012.
Board
Audit & Risk Management Committee
Remuneration Committee
Governance & Nominations Committee
Health, Safety, Environment
& Community Committee
CHAIRMAN
$350,000*
$40,000
$25,000
No fee
$25,000
DEPUTY
CHAIRMAN
$262,500*
–
–
–
–
MEMBER
$140,000
$20,000
$12,500
No fee
$12,500
*This is a composite fee. The Chairman and Deputy Chairman of the Board receive no standing committee fees in addition to their Board fees.
The fees set out above are exclusive of mandatory statutory superannuation contributions made on behalf of the
Non-executive Directors.
In addition to the meetings that the Non-executive Directors attended (as shown on page 79), the Non-executive
Directors participated in site visits to underground and open cut mines.
Whitehaven Coal Annual Report 2015 / 103
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY DIRECTORS’ REPORT
6. REMUNERATION REPORT (AUDITED) (CONTINUED)
6.9.3 Statutory Disclosures
The statutory disclosures required under the Corporations Act 2001 (Cth) and in accordance with the Accounting
Standards are set out in the table below.
Details of remuneration received in their capacity as Executive Directors are disclosed in section 6.8.
SHORT-TERM BENEFITS
POST-EMPLOYMENT
BENEFITS
BOARD &
COMMITTEE
FEES
NON-
MONETARY
BENEFITS
OTHER
BENEFITS
(NON-
CASH)
SUPER-
ANNUATION
BENEFITS
TERMINATION
BENEFITS
TOTAL
REMUNERATION
FOR SERVICES
AS A NON-
EXECUTIVE
DIRECTOR
IN AUD
Non-executive Directors
The Hon.
Mark Vaile
(Chairman)
John Conde
(Deputy
Chairman)
Philip
Christensen*
Rick
Gazzard
Tony
Haggarty
Christine
McLoughlin
Ray Zage
TOTAL
2015
350,000
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
350,000
262,500
262,500
5,979
165,000
172,500
172,500
165,000
151,458
177,500
177,500
–1
–1
1,133,479
1,278,958
* Resigned 14 July 2014
1. Mr Zage elected not to receive any Board & Committee fees.
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
18,783
17,774
18,783
17,774
568
15,263
16,388
15,956
15,675
14,010
16,863
16,419
–
–
87,060
97,196
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
368,783
367,774
281,283
280,274
6,547
180,263
188,888
188,456
180,675
165,468
194,363
193,919
–
–
1,220,539
1,376,154
6.10 Loans From Key Management Personnel and Their Related Parties
There were no loans outstanding to key management personnel and their related parties, at any time in the current
or prior reporting periods.
6.11 Other Key Management Personnel Transactions
Apart from the details disclosed in this report, no Director has entered into a material contract with the consolidated
entity since the end of the previous financial year and there were no material contracts involving directors’ interests
existing at year-end.
6.12 Additional Disclosures Relating to Shares and Options and Rights Over Equity Instruments
The movement during the reporting period in the number of ordinary shares in the Company held, directly, indirectly
or beneficially, by each KMP, including their related parties is as follows:
104 / A Year of Delivery
7. FINANCIAL REPORT NO. OF SHARES
Directors
Mark Vaile
John Conde
Philip Christensen*
Paul Flynn
Rick Gazzard
Tony Haggarty
Christine McLoughlin
Ray Zage
Executives
Kevin Ball
Timothy Burt
Brian Cole
Jamie Frankcombe
Scott Knights
HELD AT
1 JULY 2014
RECEIVED
ON VESTING
OF LTI
RECEIVED AS
REMUNERATION
OTHER NET
CHANGE
HELD AT
30 JUNE
2015
2,787,767
378,605
1,566,575
39,382
200,000
20,049,787
21,000
–
–
190,192
12,499
184,363
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(220,000)
2,567,767
–
n/a1
378,605
n/a1
126,410**
100,000
265,792
–
–
–
–
–
200,000
11,000
20,060,787
34,000
55,000
–
–
19,150**
33,937**
46,597**
68,287**
–
25,000
44,150
–
–
224,129***
59,096***
75,000
327,650***
–
–
1. Philip Christensen resigned 14 July 2014.
*
Includes 762,902 shares issued subject to restrictions. Refer to note 26 for details.
** Shares granted as part of FY2014 STI and subject to restrictions.
*** Includes shares subject to restrictions granted as part of FY2013 and FY2014 STI.
The movement during the reporting period in the number of options and rights over ordinary shares in the Company
held, directly, indirectly or beneficially, by each key management person and director-related entities, including their
related parties, is as follows:
HELD AT
1 JULY
2014
GRANTED EXERCISED
LAPSED/
FORFEITED
HELD AT
30 JUNE
2015
VESTED
DURING
THE
YEAR
VESTED AND
EXERCISABLE
AT 30 JUNE
2015
Directors
Mark Vaile
Paul Flynn
Philip
Christensen
Executives
Kevin Ball
Timothy Burt
Brian Cole
Jamie
Frankcombe
189,000*
–
590,909
712,329
189,000*
–
96,380
262,100
358,700
273,973
273,973
356,219
312,500
479,452
Scott Knights
–
246,575
1. Philip Christensen resigned 14 July 2014.
–
–
–
–
–
–
–
–
–
–
–
–
189,000
1,303,238
n/a1
370,353
(30,819)
505,254
(42,174)
672,745
–
–
791,952
246,575
–
–
–
–
–
–
–
–
189,000
–
n/a1
–
–
–
–
–
* The Group issued fully vested options over the Company’s shares in consideration for fully vested options held in Aston Resources Limited as part of
the scheme of arrangement. Directors and director related entities received these options in their capacity as option holders in Aston Resources Limited
and as such they do not form part of their remuneration.
Signed in accordance with a resolution of the directors:
Mark Vaile
Chairman
Dated at Sydney this 13th day of August 2015
Whitehaven Coal Annual Report 2015 / 105
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY 7. FINANCIAL REPORT
106 / A Year of Delivery
W
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1
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A
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2
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4
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5
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6
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7
Whitehaven Coal Annual Report 2015 / 107
AUDITOR’S INDEPENDENCE DECLARATION
Ernst & Young
680 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Auditor’s Independence Declaration to the Directors of Whitehaven
Coal Limited
In relation to our audit of the financial report of Whitehaven Coal Limited for the financial year ended
30 June 2015 to the best of my knowledge and belief, there have been no contraventions of the
auditor independence requirements of the Corporations Act 2001 or any applicable code of
professional conduct.
Ernst & Young
Trent van Veen
Partner
13 August 2015
108 / A Year of Delivery
46
7. FINANCIAL REPORT
STATEMENT OF
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2015
IN THOUSANDS OF AUD ($’000)
Revenue
Other income
Operating expenses
Coal purchases
Selling and distribution expenses
Government royalties
Impairment of assets
Administrative expenses
Depreciation and amortisation
Other expenses
LOSS BEFORE NET FINANCIAL EXPENSE
Financial income
Financial expenses
NET FINANCIAL EXPENSE
Loss before tax
Income tax benefit
NET LOSS FOR THE YEAR
CONSOLIDATED
NOTE
2015
2014
8
9
763,290
755,406
10,713
8,497
(358,089)
(367,443)
–
(45,740)
(202,226)
(189,654)
(58,120)
(54,222)
7
(445,363)
(24,750)
(97,584)
(2,784)
(414,913)
4,756
(73,160)
(68,404)
10
12
12
12
(2,340)
(24,623)
(79,491)
(4,567)
(4,177)
5,857
(58,014)
(52,157)
(483,317)
(56,334)
13 a)
140,592
17,949
(342,725)
(38,385)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Net movement on cash flow hedges
Income tax effect
OTHER COMPREHENSIVE (LOSS)/INCOME FOR THE PERIOD, NET OF TAX
13 b)
(1,507)
452
(1,055)
4,351
(1,305)
3,046
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD, NET OF TAX
(343,780)
(35,339)
Net loss for the period attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive loss for the period, net of tax attributable to:
Owners of the parent
Non-controlling interests
Earnings per share
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
The statement of comprehensive income is to be read in conjunction with the notes to the financial statements.
(330,625)
(38,385)
(12,100)
–
(331,680)
(35,339)
(12,100)
–
35
35
(33.3)
(33.3)
(3.9)
(3.9)
Whitehaven Coal Annual Report 2015 / 109
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY
STATEMENT OF
FINANCIAL POSITION
AS AT 30 JUNE 2015
IN THOUSANDS OF AUD ($’000)
Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments
TOTAL CURRENT ASSETS
Trade and other receivables
Investments
Property, plant and equipment
Exploration and evaluation
Intangible assets
Deferred tax assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
Liabilities
Trade and other payables
Interest bearing loans and borrowings
Employee benefits
Current tax payable
Provisions
Derivative financial instruments
TOTAL CURRENT LIABILITIES
Non-current liabilities
Interest bearing loans and borrowings
Deferred tax liabilities
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
Equity
Issued capital
Share based payments reserve
Hedge reserve
Retained earnings
EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT
Non-controlling interest
TOTAL EQUITY
The statement of financial position is to be read in conjunction with the notes to the financial statements.
110 / A Year of Delivery
CONSOLIDATED
NOTE
2015
2014
14
15
16
17
15
18
19
20
21
13 c)
22
23
24
13 c)
25
17
23
13 c)
25
102,393
101,052
89,892
162
103,167
70,262
61,122
–
293,499
234,551
24,176
29,672
37
568
3,539,244
3,384,937
201,346
19,954
111,115
526,914
105,843
–
3,895,872
4,047,934
4,189,371
4,282,485
147,422
155,688
21,750
14,055
42,331
7,380
2,136
33,084
12,900
6,219
22,995
466
235,074
231,352
1,016,481
755,308
–
72,782
29,931
59,358
1,089,263
844,597
1,324,337
1,075,949
2,865,034
3,206,536
26 a)
3,146,147
3,146,300
36,543
35,206
(1,381)
(317,353)
(326)
12,178
2,863,956
3,193,358
1,078
13,178
2,865,034
3,206,536
7. FINANCIAL REPORT
STATEMENT OF
CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
CONSOLIDATED
IN THOUSANDS
OF AUD ($’000)
Opening balance
at 1 July 2013
(Loss) for the period
Other comprehensive
income
TOTAL
COMPREHENSIVE
INCOME FOR
THE YEAR
Transactions with
owners in their
capacity as owners:
Share based payments
32
26
Transfer on exercise/
lapse of share based
payments
Cost of shares issued,
net of tax
CLOSING BALANCE
AT 30 JUNE 2014
Opening balance
at 1 July 2014
(Loss) for the period
Other comprehensive
income
TOTAL
COMPREHENSIVE
INCOME FOR
THE YEAR
Transactions with
owners in their
capacity as owners:
Share based payments
32
Transfer on exercise/
lapse of share based
payments
Purchase of shares
through employee
share plan
Cost of shares issued,
net of tax
CLOSING BALANCE
AT 30 JUNE 2015
NOTE
ISSUED
CAPITAL
SHARE
BASED
PAYMENT
RESERVE
HEDGE
RESERVE
RETAINED
EARNINGS
TOTAL
NON-
CONTROLLING
INTEREST
TOTAL
EQUITY
3,146,301
34,152
(3,372)
50,363
3,227,444
13,178
3,240,622
–
–
–
–
–
(1)
–
–
–
(38,385)
(38,385)
3,046
–
3,046
–
3,046
(38,385)
(35,339)
1,254
(200)
–
–
–
–
–
1,254
200
–
–
(1)
–
–
–
–
–
–
(38,385)
3,046
(35,339)
1,254
–
(1)
3,146,300
35,206
(326)
12,178
3,193,358
13,178
3,206,536
3,146,300
35,206
(326)
12,178
3,193,358
13,178
3,206,536
–
–
–
–
–
–
–
–
(330,625)
(330,625)
(12,100)
(342,725)
(1,055)
–
(1,055)
–
(1,055)
–
(1,055)
(330,625)
(331,680)
(12,100)
(343,780)
2,431
(1,094)
–
–
–
–
–
–
–
2,431
1,094
–
–
–
(148)
(5)
–
–
–
–
2,431
–
(148)
(5)
26
26
(148)
(5)
3,146,147
36,543
(1,381)
(317,353)
2,863,956
1,078
2,865,034
The statement of changes in equity is to be read in conjunction with the notes to the financial statements.
Whitehaven Coal Annual Report 2015 / 111
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY
STATEMENT OF
CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2015
IN THOUSANDS OF AUD ($’000)
Cash flows from operating activities
Cash receipts from customers
Cash paid to suppliers and employees
Cash generated from operations
Interest paid
Interest received
Income taxes refunded
CONSOLIDATED
NOTE
2015
2014
740,162
773,612
(527,738)
(648,185)
212,424
125,427
(39,914)
(42,895)
4,752
36,111
5,054
21,020
NET CASH FROM OPERATING ACTIVITIES
30
213,373
108,606
Cash flows from investing activities
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Purchase of intangible assets
Exploration and evaluation expenditure
NET CASH USED IN INVESTING ACTIVITIES
Cash flows from financing activities
Net proceeds from issue / (repayment) of shares
Proceeds from borrowings
Repayment of borrowings
Payment of finance facility upfront costs
Payment of finance lease liabilities
NET CASH FROM FINANCING ACTIVITIES
Net change in cash and cash equivalents
Cash and cash equivalents at 1 July
CASH AND CASH EQUIVALENTS AT 30 JUNE
The statement of cash flows is to be read in conjunction with the notes to the financial statements.
–
31
(430,555)
(310,852)
(4,975)
(851)
(6,300)
(2,813)
(436,381)
(319,934)
(153)
(2)
23
23
1,125,000
236,784
(858,246)
(8,247)
(27,084)
(17,283)
–
(24,556)
222,234
203,979
(774)
103,167
(7,349)
110,516
14
102,393
103,167
112 / A Year of Delivery
7. FINANCIAL REPORT NOTES TO THE
FINANCIAL STATEMENTS
1. REPORTING ENTITY
The financial report of Whitehaven Coal Limited (‘Whitehaven’ or ‘Company’) for the year ended 30 June 2015 was
authorised for issue in accordance with a resolution of the directors on 13 August 2015. Whitehaven Coal Limited is a
company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian
Securities Exchange. The address of the Company’s registered office is Level 28, 259 George Street, Sydney NSW
2000. The Company is a for-profit entity, and the principal activity of the consolidated entity is the development
and operation of coal mines in New South Wales.
2. BASIS OF PREPARATION
The financial report is a general purpose financial report, which has been prepared in accordance with the requirements
of the Corporations Act 2001, Australian Accounting Standards (AAS) and other authoritative pronouncements of the
Australian Accounting Standards Board (AASB).
The financial report has been prepared on a historical cost basis, except for derivative financial instruments and
available for sale financial assets that have been measured at fair value (refer to notes 3g and 3h).
The Company is of a kind referred to in ASIC Class Order 98/100 and dated 10 July 1998 and in accordance with that
Class Order, all financial information presented in Australian dollars has been rounded to the nearest thousand dollars
unless otherwise stated.
a) Statement of Compliance
The financial report also complies with International Financial Reporting Standards (IFRS) issued by the International
Accounting Standards Board (IASB) and interpretations of the International Financial Reporting Interpretations
Committee (IFRIC).
b)
Functional and Presentation Currency
Both the functional and presentation currency of the Company and of all entities in the consolidated entity is Australian
dollars ($).
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these consolidated
financial statements and have been applied consistently by all subsidiaries in the consolidated entity.
New Accounting Standards and Interpretations
i.
Changes in Accounting Policy and Disclosures
The accounting policies adopted in the preparation of the consolidated financial statements are consistent
with those of the previous financial year, except for the adoption of new standards and interpretations effective
as of 1 July 2014. These are outlined in note 39.
ii.
Accounting Standards and Interpretations Issued but not yet Effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not
yet effective and have not been adopted by the Group for the annual reporting period ended 30 June 2015
are outlined in note 39.
a)
Basis of Consolidation
The consolidated financial report of the Company for the financial year ended 30 June 2015 comprises the Company
and its subsidiaries (together referred to as the ‘consolidated entity’) and the consolidated entity’s interest in jointly
controlled operations.
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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
i.
Subsidiaries
Subsidiaries are all those entities over which the consolidated entity has control. Control is achieved when the
Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to
affect those returns through its power over the investee. Specifically, the Group controls an investee if and only
if the Group has:
— Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities
of the investee)
— Exposure, or rights, to variable returns from its involvement with the investee, and
— The ability to use its power over the investee to affect its returns
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control
over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses
of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from
the date the Group gains control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of
the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests
having a deficit balance.
The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using
consistent accounting policies.
Investments in subsidiaries are carried at their cost of acquisition in the Company’s financial statements.
ii.
Jointly Controlled Operations
The consolidated entity recognises its interest in jointly controlled operations by recognising its interest in the
assets and liabilities of the joint venture. The consolidated entity also recognises the expenses it incurs and its
share of the income that it earns from the sale of goods or services by the joint venture.
iii.
Transactions Eliminated on Consolidation
Intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup
transactions, are eliminated in preparing the consolidated financial statements.
Business combinations
Business combinations are accounted for using the acquisition method. The consideration transferred in a
business combination shall be measured at fair value, which shall be calculated as the sum of the acquisition
date fair values of the assets transferred by the acquirer, the liabilities incurred by the acquirer to former owners
of the acquiree and the equity issued by the acquirer, and the amount of any non-controlling interest in the
acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree
either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related
costs are expensed as incurred.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition
date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or
liability will be recognised in accordance with AASB 139 either in profit or loss or in other comprehensive income.
If the contingent consideration is classified as equity, it shall not be remeasured.
b) Foreign Currency Translation
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling
at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the
rate of exchange ruling at the balance date. Foreign exchange differences arising on translation are recognised in the
statement of comprehensive income. Non-monetary assets and liabilities that are measured in terms of historical cost
in a foreign currency are translated using the exchange rate as at the date of the initial transaction.
c)
Segment Reporting
An operating segment is a component of an entity that engages in business activities from which it may earn revenues
and incur expenses (including revenues and expenses relating to transactions with other components of the same
entity), whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions
about resources to be allocated to the segment and assess its performance and for which discrete financial information
is available. Management will also consider other factors in determining operating segments such as the existence
of a line manager and the level of segment information presented to the board of directors.
114 / A Year of Delivery
7. FINANCIAL REPORT The group aggregates two or more operating segments when they have similar economic characteristics, and the
segments are similar in each of the following respects:
— Nature of the products and services
— Nature of the production processes
— Type or class of customer for the products and services
— Methods used to distribute the products or provide the services, and if applicable
— Nature of the regulatory environment
d) Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in hand and short term deposits. For the purpose of
the Statement of Cash Flows, bank overdrafts that are repayable on demand and form an integral part of the
consolidated entity’s cash management are included as a component of cash and cash equivalents.
e)
Trade and Other Receivables
Trade receivables, which generally have between 5 and 21 day terms, are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method, less an allowance for impairment.
Recoverability of trade receivables is reviewed on an ongoing basis.
Receivables due in more than one year are recognised initially at fair value, discounted back to net present value
based on appropriate discount rates for the consolidated entity.
f)
Inventories
Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling
price in the ordinary course of business, less the estimated costs of completion and selling expenses.
The cost of coal inventories is determined using a weighted average basis. Cost includes direct material, overburden
removal, mining, processing, labour, mine rehabilitation costs incurred in the extraction process and other fixed and
variable overhead costs directly related to mining activities.
Inventories are classified as follows:
— Run of mine: material extracted through the mining process
— Finished goods: products that have passed through all stages of the production process
— Consumables: goods or supplies to be either directly or indirectly consumed in the production process
g) Derivative Financial Instruments
The consolidated entity uses derivative financial instruments to hedge its risks associated with foreign currency
and interest rate fluctuations arising from operating activities.
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is
entered into, and are subsequently remeasured to fair value. Any gains and losses arising from changes in the fair
value of derivatives are accounted for as described below:
Cash Flow Hedges
Cash flow hedges are hedges of the consolidated entity’s exposure to variability in cash flows that is attributable to
a particular risk associated with forecast sales and purchases that could affect profit or loss. Changes in the fair value
of the hedging instrument designated as a cash flow hedge are recognised directly in equity to the extent that the
hedge is effective. To the extent that the hedge is ineffective, changes in fair value are recognised in profit or loss.
Amounts taken to equity are transferred out of equity and included in the measurement of the hedged transaction
(coal sales and asset purchases) when the forecast transaction occurs.
The consolidated entity tests each of the designated cash flow hedges for effectiveness at each balance date, both
retrospectively and prospectively, by using the dollar offset method. If the testing falls within the 80:125 range, the
hedge is considered to be highly effective and continues to be designated as a cash flow hedge.
If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if it no
longer meets the criteria for hedge accounting (due to it being ineffective), then hedge accounting is discontinued
prospectively. The cumulative gain or loss previously recognised in equity remains in equity until the forecast
transaction occurs.
Economic Hedges
Derivatives which do not qualify for hedge accounting are measured at fair value with changes in fair value recognised
in profit or loss.
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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
h)
Investments and Other Financial Assets
Financial assets in the scope of AASB 139 are categorised as either financial assets at fair value through profit or loss,
loans and receivables, held-to-maturity investments, or available-for-sale financial assets.
Financial assets are recognised initially at fair value, plus, for assets not at fair value through profit or loss, any directly
attributable transaction costs.
Recognition and Derecognition
Regular way purchases and sales of financial assets are accounted for at trade date, i.e., the date that the consolidated
entity commits itself to purchase or sell the asset. Financial assets are derecognised if the consolidated entity’s
contractual rights to the cash flows from the financial assets expire or if the consolidated entity transfers the financial
asset to another party without retaining control or substantially all risks and rewards of the asset.
i)
i.
Property, Plant and Equipment
Recognition and Measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-
constructed assets includes the cost of materials and direct labour, any other costs directly attributable to
bringing the asset to a working condition for its intended use, and the costs of dismantling and removing
the items and restoring the site on which they are located. Cost also may include transfers from equity
of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and
equipment. Purchased software that is integral to the functionality of the related equipment is capitalised
as part of that equipment. Borrowing costs related to the acquisition or construction of qualifying assets
(including new mines) are capitalised as part of the cost of the asset.
Mining property and development assets include costs transferred from exploration and evaluation assets
once technical feasibility and commercial viability of an area of interest are demonstrable and subsequent
costs to develop the mine to production phase.
When parts of an item of property, plant and equipment have different useful lives, they are accounted
for as separate items (major components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing
the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised
net within ’other income’.
Assets are deemed to be commissioned when they are capable of operating in the manner intended by
management, and amortisation starts from this date.
ii.
Subsequent Costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of
the item if it is probable that the future economic benefits embodied within the part will flow to the consolidated
entity and its cost can be measured reliably. The costs of the day-to-day servicing of property, plant and
equipment are recognised in the statement of comprehensive income as incurred.
iii. Depreciation
Depreciation is charged to the statement of comprehensive income on a straight-line or units of production basis
over the estimated useful lives of each part of an item of property, plant and equipment. Land is not depreciated.
Mining property and development assets are depreciated on a units of production basis over the life of the
economically recoverable reserves.
The depreciation rates used in the current and comparative periods are as follows:
— Plant and equipment
— Leased plant and equipment
2% – 50%
3% – 14%
— Mining property and development assets
units of production
The residual value, the useful life and the depreciation method applied to an asset are reassessed at least annually.
116 / A Year of Delivery
7. FINANCIAL REPORT
j)
Mine Development Costs
The cost of acquiring mineral reserves and mineral resources are capitalised on the statement of financial position as
incurred. Capitalised costs (development expenditure) include expenditure incurred to expand the capacity of a mine
and to maintain production. Mine development costs include acquired proved and probable mineral reserves at fair
value at acquisition date.
Mineral reserves and capitalised mine development expenditure are, upon commencement of commercial production,
depreciated over the remaining life of mine. The net carrying amounts of mineral reserves and resources and capitalised
mine development expenditure at each mine property are reviewed for impairment at the cash-generating unit level. To
the extent to which these values exceed their recoverable amounts, that excess is fully provided against in the financial
year in which this is determined.
k)
i.
Intangible Assets
Exploration and Evaluation Assets
Exploration and evaluation costs, including the costs of acquiring licences, are capitalised as exploration and
evaluation assets on an area of interest basis. Costs incurred before the consolidated entity has obtained the
legal rights to explore an area are recognised in the statement of comprehensive income.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:
1. The expenditures are expected to be recouped through successful development and exploitation of the area
of interest; or
2. Activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active and significant
operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if:
1. Sufficient data exists to determine technical feasibility and commercial viability, and
2. Facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purposes
of impairment testing, exploration and evaluation assets are not allocated to cash-generating units.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of
interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested
for impairment and then reclassified from intangible assets to mining property and development assets within
property, plant and equipment.
ii. Water Access Rights
The consolidated entity holds water access rights, which have been determined to have an indefinite life.
The water access rights have been recognised at cost and are assessed annually for impairment.
iii. Rail Access Rights
Rail access rights have a finite useful life and are carried at cost less, where applicable, any accumulated
amortisation and accumulated impairment losses. The carrying values of rail access rights are reviewed
to ensure they are not in excess of their recoverable amounts. Rail access rights are amortised over the life
of the mine or access agreement using a unit sold basis.
iv. Other Intangible Assets
Other intangible assets that are acquired by the consolidated entity, which have finite useful lives, are measured
at cost less accumulated amortisation and accumulated impairment losses. Amortisation is charged to the
statement of comprehensive income on a straight line basis over the estimated life of the mining property
to which the intangible relates.
v.
Subsequent Expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditure is recognised in the statement of comprehensive income
as incurred.
l)
Deferred Stripping Costs
Expenditure incurred to remove overburden or waste material during the production phase of a mining operation is
deferred to the extent it gives rise to future economic benefits and charged to operating costs on a units of production
basis using the estimated average stripping ratio for the area being mined. Changes in estimates of average stripping
ratios are accounted for prospectively.
For the purposes of assessing impairment, deferred stripping costs are grouped with other assets of the relevant cash
generating unit.
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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
m) Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement
and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset
and the arrangement conveys a right to use the asset.
Consolidated Entity as Lessee
Finance leases, which transfer to the consolidated entity substantially all the risks and benefits incidental to ownership
of the leased item, are capitalised at the inception of the lease at an amount equal to the lower of the fair value of the
leased asset and the present value of the minimum lease payments.
Lease payments are apportioned between the finance charges and the reduction of the lease liability so as to achieve
a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as an expense in
the statement of comprehensive income. Contingent lease payments are accounted for by revising the minimum lease
payments over the remaining term of the lease when the lease adjustment is confirmed.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating lease payments are recognised as an expense in the statement of comprehensive income on a straight-line
basis over the lease term. Operating lease incentives are recognised as a liability when received and subsequently
reduced by allocating lease payments between rental expense and a reduction of the liability.
n)
i.
Impairment
Financial Assets
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it
is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events
have had a negative effect on the estimated future cash flows of that asset.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference
between its carrying amount, and the present value of the estimated future cash flows discounted at the original
effective interest rate.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial
assets are assessed collectively in groups that share similar credit risk characteristics. All impairment losses are
recognised in profit or loss.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment
loss was recognised. For financial assets measured at amortised cost, the reversal is recognised in profit or loss.
ii.
Non-financial Assets
The carrying amounts of the consolidated entity’s non-financial assets, other than inventories and deferred tax
assets, are reviewed at each balance date to determine whether there is any indication of impairment. If any such
indication exists, the asset’s recoverable amount is estimated. For intangible assets that have indefinite lives or
that are not yet available for use, recoverable amount is estimated at each reporting date.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less
costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets
that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets
or groups of assets (the ‘cash-generating unit’).
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds
its recoverable amount. Impairment losses are recognised in the statement of comprehensive income, unless
an asset has previously been revalued, in which case the impairment loss is recognised as a reversal to the extent
of that previous revaluation with any excess recognised through profit or loss.
Impairment losses recognised in respect of cash-generating units are allocated to reduce the carrying amount
of the assets in the unit (group of units) on a pro rata basis.
o)
Trade and Other Payables
Trade and other payables are carried at amortised cost. Due to their short-term nature they are not discounted. They
represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year
that are unpaid and arise when the consolidated entity becomes obliged to make future payments in respect of the
purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.
118 / A Year of Delivery
7. FINANCIAL REPORT p)
Interest Bearing Loans and Borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable
transaction costs.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the
effective interest method.
q)
Employee Benefits
i. Wages, Salaries, Annual Leave and Sick Leave
Liabilities for wages, salaries, annual leave and sick leave are recognised in respect of employees’ services
up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled
i.e. at undiscounted amounts based on remuneration wage and salary rates including related on-costs, such as
workers compensation insurance and payroll tax. Non-accumulating non-monetary benefits, such as medical
care, housing, cars and free or subsidised goods and services, are expensed based on the net marginal cost
to the consolidated entity as the benefits are taken by the employees.
A provision is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing
plans if the consolidated entity has a present legal or constructive obligation to pay this amount as a result
of past service provided by the employee and the obligation can be estimated reliably.
ii.
Long-term Service Benefits
The consolidated entity’s net obligation in respect of long-term service benefits is the amount of future benefit
that employees have earned in return for their service in the current and prior periods. The obligation is calculated
using expected future increases in wage and salary rates including related on-costs and expected settlement
dates, and is discounted using the rates attached to the Commonwealth Government bonds at the balance date
which have maturity dates approximating to the terms of the consolidated entity’s obligations.
iii. Defined Contribution Superannuation Funds
Obligations for contributions to defined contribution superannuation funds are recognised as an expense in the
statement of comprehensive income as incurred.
iv.
Share-based Payment Transactions
The grant date fair value of options granted to employees is recognised as an expense, with a corresponding
increase in equity, over the period in which the employees become unconditionally entitled to the options.
The amount recognised is adjusted to reflect the actual number of share options that vest, except for those
that fail to vest due to market conditions not being met.
r)
Provisions
A provision is recognised in the statement of financial position when the consolidated entity has a present legal or
constructive obligation as a result of a past event, and it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, where appropriate, the risks specific to the liability.
i.
Mine Rehabilitation and Closure
Provisions are made for the estimated cost of rehabilitation relating to areas disturbed during the mine’s
operation up to reporting date but not yet rehabilitated. Provision has been made in full for all disturbed areas
at the reporting date based on current estimates of costs to rehabilitate such areas, discounted to their present
value based on expected future cashflows. The estimated cost of rehabilitation includes the current cost of
re-contouring, topsoiling and revegetation based on legislative requirements. Changes in estimates are dealt
with on a prospective basis as they arise.
Significant uncertainty exists as to the amount of rehabilitation obligations which will be incurred due to the
impact of changes in environmental legislation. The amount of the provision relating to rehabilitation of mine
infrastructure and dismantling obligations is recognised at the commencement of the mining project and/or
construction of the assets where a legal or constructive obligation exists at that time. The provision is recognised
as a non-current liability with a corresponding asset included in mining property and development assets.
At each reporting date the rehabilitation liability is re-measured in line with changes in discount rates, and timing
or amount of the costs to be incurred. Changes in the liability relating to rehabilitation of mine infrastructure and
dismantling obligations are added to or deducted from the related asset, other than the unwinding of the discount
which is recognised as a finance cost in the statement of comprehensive income as it occurs.
If the change in the liability results in a decrease in the liability that exceeds the carrying amount of the asset, the
asset is written-down to nil and the excess is recognised immediately in the statement of comprehensive income.
If the change in the liability results in an addition to the cost of the asset, the recoverability of the new carrying
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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
amount is considered. Where there is an indication that the new carrying amount is not fully recoverable,
an impairment test is performed with the write-down recognised in the statement of comprehensive income
in the period in which it occurs.
The amount of the provision relating to rehabilitation of environmental disturbance caused by on-going
production and extraction activities is recognised in the statement of comprehensive income as incurred.
s)
Contributed Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to issue of ordinary shares and
share options are recognised as a deduction from equity, net of any related income tax benefit.
t)
i.
ii.
Revenue and Other Income Recognition
Sale of Coal
Revenue from the sale of coal is recognised in the statement of comprehensive income when the significant
risks and rewards of ownership have been transferred to the buyer. Transfer of risk and rewards are considered
to have passed to the buyer under the terms of the individual contracts.
Revenue from the sale of Maules Creek development coal is being offset against development costs capitalised
on the statement of financial position until production reaches commercial levels.
Rental Income
Rental income is recognised in the statement of comprehensive income on a straight-line basis over the term of
the lease. Revenue received before it is earned is recorded as unearned lease income in the statement of financial
position at its net present value, determined by discounting the expected notional future cash flows at a pre-tax
rate that reflects current market assessments of the time value of money.
iii. Hire of Plant
The consolidated entity hires plant under operating leases to its subsidiaries and joint ventures. Revenue from
the plant hire is recognised in the statement of comprehensive income as earned.
u)
Finance Income and Expense
Finance income comprises interest income on funds invested, dividend income, changes in the fair value of financial
assets at fair value through profit or loss and foreign currency gains. Interest income is recognised as it accrues, using
the effective interest method. Dividend income is recognised on the date that the consolidated entity’s right to receive
payment is established.
Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, foreign currency
losses, changes in the fair value of financial assets at fair value through profit or loss, impairment losses recognised
on financial assets, and losses on hedging instruments that are recognised in profit or loss. All borrowing costs are
recognised in profit or loss using the effective interest method, except where capitalised as part of a qualifying asset.
Foreign currency gains and losses are reported on a net basis.
v)
Income Tax
Income tax on the profit or loss for the year comprises current and deferred tax. Income tax expense is recognised in
the statement of comprehensive income except to the extent that it relates to items recognised directly in equity, in
which case it is recognised in equity.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered
or paid to the taxation authorities based on the taxable income for the year, using tax rates enacted or substantively
enacted at the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax basis of assets and
liabilities and their carrying amounts for financial reporting purposes, other than for the following temporary differences:
— When the deferred income tax asset/liability arises from the initial recognition of goodwill or of an asset or liability
in a transaction that is not a business combination and that affects neither accounting nor taxable profit,
— When the taxable temporary difference is associated with investments in subsidiaries and joint operations to the
extent that it is probable that they will not reverse in the foreseeable future.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profits will be
available against which the deductible temporary differences can be utilised. The carrying amount of deferred income
tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
120 / A Year of Delivery
7. FINANCIAL REPORT Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply when the asset
is realised or the liability settled, based on tax rates and tax laws that have been enacted or substantively enacted
by the reporting date.
Deferred tax assets and liabilities are offset only if a legally enforceable right exists to offset current tax assets and
liabilities, and the deferred tax assets and liabilities relate to income taxes levied by the same tax authority on the
same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net
basis or their tax assets and liabilities will be realised simultaneously.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability
to pay the related dividend.
i.
Minerals Resource Rent Tax (MRRT)
On 19 March 2012, the Australian Government passed through the Senate the Minerals Resource Rent Tax Act
2012, with application to certain profits arising from the extraction of iron ore and coal in Australia. MRRT
was considered, for accounting purposes, to be a tax based on income. Accordingly, the current and deferred
MRRT expense was measured and disclosed on the same basis as income tax. The MRRT was effective from
1 July 2012 however as financial reporting considerations must be made from the date of Royal Assent, the
Group had recognised the impact of deferred tax originating from MRRT since 30 June 2012. On 5 September
2014 the MRRT Repeal and Other Measures Bill 2014 received Royal Assent. Following the enactment of this
legislation the MRRT balances were derecognised (see Note 7).
ii.
Tax Consolidation
The Company and its wholly-owned Australian resident controlled entities formed a tax-consolidated group
with effect from 29 May 2007 and are therefore taxed as a single entity from that date. The head entity within
the tax-consolidated group is Whitehaven Coal Limited.
Current tax expense/benefit, deferred tax liabilities and deferred tax assets arising from temporary differences
of the members of the tax-consolidated group are recognised in the separate financial statements of the
members of the tax-consolidated group using the ‘separate taxpayer within a consolidated group’ approach
by reference to the carrying amounts of assets and liabilities in the separate financial statements of each entity
and the tax values applying under tax consolidation.
Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the subsidiaries
is assumed by the head entity in the tax-consolidated group and are recognised as amounts payable (receivable)
to (from) other entities in the tax-consolidated group in conjunction with any tax funding arrangement amounts
(refer below). Any difference between these amounts is recognised by the Company as an equity contribution
or distribution.
The Company recognises deferred tax assets arising from unused tax losses of the tax-consolidated group
to the extent that it is probable that future taxable profits of the tax-consolidated group will be available
against which the asset can be utilised.
Any subsequent period adjustments to deferred tax assets arising from unused tax losses as a result of revised
assessments of the probability of recoverability is recognised by the head entity only.
iii. Nature of Tax Funding Arrangements and Tax Sharing Arrangements
The head entity, in conjunction with other members of the tax-consolidated group, has entered into a tax
funding arrangement which sets out the funding obligations of members of the tax-consolidated group in
respect of tax amounts. The tax funding arrangements require payments to/from the head entity equal to
the current tax liability/(asset) assumed by the head entity and any tax-loss deferred tax asset assumed by
the head entity, resulting in the head entity recognising an inter-entity receivable/(payable) equal in amount
to the tax liability/(asset) assumed. The inter-entity receivables / (payables) are at call.
Contributions to fund the current tax liabilities are payable as per the tax funding arrangement and reflect
the timing of the head entity’s obligation to make payments for tax liabilities to the relevant tax authorities.
The head entity, in conjunction with other members of the tax-consolidated group, has also entered into a tax
sharing agreement. The tax sharing agreement provides for the determination of the allocation of income tax
liabilities between the entities should the head entity default on its tax payment obligations. No amounts have
been recognised in the financial statements in respect of this agreement as payment of any amounts under
the tax sharing agreement is considered remote.
Whitehaven Coal Annual Report 2015 / 121
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY NOTES TO THE FINANCIAL STATEMENTS
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
w) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised
as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from,
or payable to, the ATO is included as a current asset or liability in the statement of financial position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST components of cash flows
arising from investing and financing activities which are recoverable from, or payable to, the ATO are classified
as operating cash flows.
4. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the consolidated financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually evaluates its
judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expense. Management
bases its judgements and estimates on historical experience and on other various factors it believes to be reasonable
under the circumstances, the result of which form the basis of the carrying values of assets and liabilities that are
not readily apparent from other sources.
Management has identified the following critical accounting policies for which significant judgements, estimates
and assumptions are made. Actual results may differ from these estimates under different assumptions and conditions
and may materially affect financial results or the financial position reported in future periods. Revisions to accounting
estimates are recognised in the period in which the estimate is revised and in any future periods affected.
A number of the consolidated entity’s accounting policies and disclosures require the determination of fair value,
for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or
disclosure purposes based on the following methods. Where applicable, further information about the assumptions
made in determining fair values is disclosed in the notes specific to that asset or liability.
Mine Rehabilitation
The consolidated entity assesses its mine rehabilitation provisions at each reporting date. Significant estimates and
assumptions are made in determining the provision for mine rehabilitation as there are numerous factors that will
affect the ultimate liability payable. These factors include estimates of the extent and costs of rehabilitation activities,
technological changes, regulatory changes, cost increases, and changes in discount rates. Those uncertainties may
result in future actual expenditure differing from the amounts currently provided. The provisions at balance date
represent management’s best estimate of the present value of the future rehabilitation costs required. Changes to
estimated future costs are recognised in the statement of financial position by adjusting the rehabilitation asset and
liability. If, for mature mines, the revised mine assets net of rehabilitation provisions exceeds the carrying value, that
portion of the increase is charged directly to expense. For closed mines, changes to estimated costs are recognised
immediately in the statement of comprehensive income.
Exploration and Evaluation Expenditure
The application of the consolidated entity’s accounting policy for exploration and evaluation expenditure requires
judgement in determining whether future economic benefits are likely, which may be based on assumptions about
future events or circumstances. Estimates and assumptions made may change if new information becomes available.
If, after expenditure is capitalised, information becomes available suggesting that the recovery of expenditure is
unlikely, the amount capitalised is written off in the statement of comprehensive income in the period when the
new information becomes available.
Carrying Value of Assets
All mining assets are amortised over the shorter of the estimated remaining useful life or remaining mine life.
For mobile and other equipment, the straight-line method is applied over the estimated useful life of the asset.
The recoverable amounts of cash-generating units and individual assets have been determined based on the higher
of value-in-use calculations and Fair Value less Costs of Disposal (“FVLCD”). These calculations require the use
of estimates and assumptions. It is reasonably possible that the coal price assumption may change which may then
impact our estimated life of mine determinant which could result in a material adjustment to the carrying value
of tangible assets.
The consolidated entity reviews and tests the carrying value of assets when events or changes in circumstances
suggest that the carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifiable
cash flows are largely independent of cash flows of other assets and liabilities. If there are indications that impairment
may have occurred, estimates are prepared of expected future cash flows for each group of assets. Expected future
122 / A Year of Delivery
7. FINANCIAL REPORT cash flows used to determine the value in use of goodwill and tangible assets are inherently uncertain and could
materially change over time. They are significantly affected by a number of factors including reserves and production
estimates, together with economic factors such as spot and future coal prices, discount rates, foreign currency
exchange rates, estimates of costs to produce reserves and future capital expenditure. The related carrying amounts
are disclosed in note 19.
Mineral Reserves and Resources
The estimated quantities of economically recoverable Reserves and Resources are based upon interpretations
of geological and geophysical models and require assumptions to be made requiring factors such as estimates
of future operating performance, future capital requirements and short and long term coal prices. The consolidated
entity is required to determine and report Reserves and Resources under the Australian Code for Reporting Mineral
Resources and Ore Reserves December 2004 (the JORC Code). The JORC Code requires the use of reasonable
investment assumptions to calculate reserves and resources. Changes in reported Reserves and Resources can
impact the carrying value of property, plant and equipment, provision for rehabilitation as well as the amount
charged for amortisation and depreciation.
Taxation
The consolidated entity’s accounting policy for taxation requires management’s judgement as to the types of
arrangements considered to be a tax on income in contrast to an operating cost. Judgement is also required
in assessing whether deferred tax assets and certain deferred tax liabilities are recognised on the statement
of financial position. Deferred tax assets, including those arising from unrecouped tax losses, capital losses and
temporary differences, are recognised only where it is considered more likely than not that they will be recovered,
which is dependent on the generation of sufficient future taxable profits. Deferred tax liabilities arising from
temporary differences in investments, caused principally by retained earnings held in foreign tax jurisdictions,
are recognised unless repatriation of retained earnings can be controlled and are not expected to occur in the
foreseeable future.
Assumptions about the generation of future taxable profits and repatriation of retained earnings depend on
management’s estimates of future cash flows. These depend on estimates of future production and sales volumes,
operating costs, restoration costs, capital expenditure, dividends and other capital management transactions.
Judgements are also required about the application of income tax legislation. These judgements and assumptions
are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations,
which may impact the amount of deferred tax assets and deferred tax liabilities recognised on the statement of
financial position and the amount of other tax losses and temporary differences not yet recognised. In such
circumstances, some or all of the carrying amounts of recognised deferred tax assets and liabilities may require
adjustment, resulting in a corresponding credit or charge to the statement of comprehensive income.
Deferred tax assets are recognised for deductible temporary differences as management considers that it is
probable that future taxable profits will be available to utilise those temporary differences.
5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
Overview
The consolidated entity has exposure to the following risks from their use of financial instruments:
— Market risk
— Credit risk
— Liquidity risk
This note presents information about the consolidated entity’s exposure to each of the above risks, its objectives,
policies and processes for measuring and managing risk, and the management of capital. Further quantitative
disclosures are included throughout this financial report.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. The Board has established the Audit and Risk Management Committee, which is responsible
for developing and monitoring risk management policies. The Committee reports regularly to the Board
on its activities.
Risk management policies are established to identify and analyse the risks faced by the consolidated entity, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and
systems are reviewed regularly to reflect changes in market conditions and the consolidated entity’s activities.
The consolidated entity, through its training and management standards and procedures, aims to develop a
disciplined and constructive control environment in which all employees understand their roles and obligations.
The Audit and Risk Management Committee oversees how management monitors compliance with the consolidated
entity’s risk management policies and procedures and reviews the adequacy of the risk management framework
in relation to the risks faced by the consolidated entity.
Whitehaven Coal Annual Report 2015 / 123
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY NOTES TO THE FINANCIAL STATEMENTS
5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Capital Management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. The consolidated entity defines capital as total shareholders’
equity and debt. The Board monitors the capital structure on a regular basis including the gearing ratio and level
of dividends paid to ordinary shareholders.
The Board seeks to maintain a balance between the higher returns that might be possible with higher levels
of borrowings and the advantages and security afforded by lower levels of borrowings.
There were no changes in the consolidated entity’s approach to capital management during the year.
The Group’s gearing ratio is calculated as net debt divided by total equity plus net debt.
IN THOUSANDS OF AUD ($’000)
Interest-bearing loans and borrowings
Less: cash and cash equivalents
NET DEBT
Equity
EQUITY AND NET DEBT
Gearing ratio
2015
2014
1,038,231
788,392
(102,393)
(103,167)
935,838
685,225
2,865,034
3,206,536
3,800,872
3,891,761
25%
18%
Risk Exposures and Responses
Foreign Currency Risk
The consolidated entity is exposed to currency risk on sales, purchases and demurrage that are denominated
in a currency other than the respective functional currency of the consolidated entity, the Australian dollar (AUD).
The currency in which these transactions primarily are denominated is US Dollars (USD).
The consolidated entity uses forward exchange contracts (FECs) to hedge its currency risk.
The Hedging Policy of the consolidated entity is to utilise forward exchange contracts to cover up to:
— 100% of contracted sales where both volume and US dollar price are fixed;
— 90% of contracted sales where volume is fixed but pricing is provisional;
— 80% of planned sales from existing operations over a 12 month period; and
— a maximum of 50% of planned sales from existing operations for between 12 and 24 months.
No cover is taken out beyond 24 months other than contracted sales where both volume and US dollar prices
are fixed.
In respect of other monetary assets and liabilities denominated in foreign currencies, the consolidated entity
ensures that its net exposure is kept to an acceptable level by buying and selling foreign currencies at spot rates
when necessary to address short-term imbalances.
The consolidated entity classifies its forward exchange contracts as cash flow hedges and measures them at fair value.
The fair value of forward exchange contracts used as hedges at 30 June 2015 was $0.1 million (2014: nil), comprising
assets and liabilities that were recognised as fair value derivatives.
At 30 June 2015, the consolidated entity had the following financial instruments that were not designated in cash flow
hedges that were exposed to foreign currency risk:
IN THOUSANDS OF USD ($’000)
Cash
Trade and other receivables
Trade and other payables
Finance lease liabilities
2015
11,613
42,486
(5,682)
–
2014
24,155
27,380
(5,646)
(2,370)
NET STATEMENT OF FINANCIAL POSITION EXPOSURE
48,417
43,519
Currency risk exposure arising from derivative financial instruments is disclosed in note 17.
124 / A Year of Delivery
7. FINANCIAL REPORT The following exchange rates applied during the year:
FIXED RATE INSTRUMENTS
USD
AVERAGE RATE
REPORTING DATE
SPOT RATE
2015
0.8382
2014
0.9187
2015
0.7649
2014
0.9420
Sensitivity Analysis
A 10 per cent strengthening of the Australian dollar against the following currencies at 30 June would have increased/
(decreased) equity and pre-tax profit or loss by the amounts shown below. The analysis assumes that all other
variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2014.
EFFECT IN THOUSANDS OF AUD ($’000)
30 June 2015
USD
30 June 2014
USD
CONSOLIDATED
EQUITY
PROFIT
OR (LOSS)
–
–
(5,755)
(4,200)
A 10 per cent weakening of the Australian dollar against the following currencies at 30 June would have increased/
(decreased) equity and pre-tax profit or loss by the amounts shown below. The analysis assumes that all other
variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2014.
EFFECT IN THOUSANDS OF AUD ($’000)
30 June 2015
USD
30 June 2014
USD
CONSOLIDATED
EQUITY
PROFIT
OR (LOSS)
–
–
7,033
4,260
Credit Risk
Credit risk arises from the financial assets of the consolidated entity, which comprise cash and cash equivalents, trade
receivables, available for sale financial assets, derivative financial instruments and the granting of financial guarantees.
The consolidated entity’s exposure to credit risk arises from potential default of the counter party, with a maximum
exposure equal to the carrying amount of the financial assets, as outlined below.
Exposure to Credit Risk
The consolidated entity’s maximum exposure to credit risk at the reporting date was:
IN THOUSANDS OF AUD ($’000)
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments
Investments
TOTAL
CARRYING AMOUNT
NOTE
2015
2014
14
15
17
18
102,393
103,167
56,686
32,688
162
–
37
568
159,278
136,423
Whitehaven Coal Annual Report 2015 / 125
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY
NOTES TO THE FINANCIAL STATEMENTS
5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
The consolidated entity’s maximum exposure to credit risk for trade receivables at the reporting date by geographic
region was:
IN THOUSANDS OF AUD ($’000)
Asia
Europe
Australia
TOTAL
2015
2014
45,964
27,572
8,132
1,494
2,590
3,622
56,686
32,688
Trade Receivables
The consolidated entity’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
The demographics of the consolidated entity’s customer base, including the default risk of the industry and country
in which customers operate, has less of an influence on credit risk. Approximately 36.1% of the consolidated entity’s
revenue is attributable to sales transactions with three customers (2014: 45.9% with three customers).
More than 88% (2014: 60%) of the consolidated entity’s current customers have been transacting with the consolidated
entity for over five years, and losses have occurred infrequently.
The consolidated entity generally does not require collateral in respect of trade receivables.
The consolidated entity trades only with recognised, creditworthy third parties.
Receivable balances are monitored on an ongoing basis with the result that the consolidated entity’s exposure to bad
debts is not significant.
The consolidated entity recognised an impairment loss for trade receivables of $1,305,000 during the year ended
30 June 2015 (2014: $2,892,000).
Impairment Losses
The aging of the consolidated entity’s trade receivables at the reporting date was:
IN THOUSANDS OF AUD ($’000)
Not past due
Past due 0-30 days
Past due 31-120 days
Past due 121 days to one year
More than one year
TOTAL
GROSS
2015
IMPAIRMENT
2015
55,619
168
–
–
536
–
–
4,024
60,347
–
(3,661)
(3,661)
GROSS
2014
33,328
1,127
1,010
104
11
IMPAIRMENT
2014
(1,634)
(1,053)
(205)
–
–
35,580
(2,892)
The Company was advised in July 2014 that a domestic customer had been placed into voluntary administration.
A provision was established to cover balances owed which are not expected to be recovered. Based on historic
default rates, the consolidated entity believes that no additional impairment allowance is necessary in respect
of trade receivables.
Guarantees
The policy of the consolidated entity is to provide financial guarantees for statutory bonding requirements associated
with the mining operations and for construction of the rail upgrade and other purposes such as security of leased
premises. Guarantees are provided under the A$1.4 billion Senior Secured Bank Facility. Details of outstanding
guarantees are provided in note 29.
Liquidity Risk
Liquidity risk is the risk that the consolidated entity will not be able to meet its financial obligations as they fall due.
The consolidated entity’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the consolidated entity’s reputation.
Typically, the consolidated entity ensures that it has sufficient cash on demand to meet all expected operational
expenses as and when due, including the servicing of financial obligations. This excludes the potential impact
of extreme circumstances that cannot reasonably be predicted, such as natural disasters.
126 / A Year of Delivery
7. FINANCIAL REPORT
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding
the impact of netting agreements:
IN THOUSANDS
OF AUD ($’000)
Financial liabilities
Finance lease liabilities
Interest bearing liabilities
Trade and other payables
Forward exchange contracts:
Outflow
Inflow
TOTAL
IN THOUSANDS
OF AUD ($’000)
Financial liabilities
Finance lease liabilities
Interest bearing liabilities
Trade and other payables
Forward exchange contracts:
Outflow
Inflow
TOTAL
CARRYING
AMOUNT
CONTRACTUAL
CASH FLOWS
6 MTHS
OR LESS
6-12 MTHS
1-2 YEARS
2-5 YEARS
5 YEARS
MORE THAN
CONSOLIDATED 30 JUNE 2015
96,997
941,234
147,422
113,685
947,016
147,422
10,203
5,176
147,422
25,166
(25,268)
103,788
103,788
(104,230)
(104,230)
10,203
20,405
72,874
5,071
9,822
926,947
–
–
–
–
–
–
–
–
–
1,185,551
1,207,681
162,359
15,274
30,227
999,821
–
–
–
–
–
–
CARRYING
AMOUNT
CONTRACTUAL
CASH FLOWS
6 MTHS
OR LESS
6-12 MTHS
1-2 YEARS
2-5 YEARS
5 YEARS
MORE THAN
CONSOLIDATED 30 JUNE 2014
113,911
674,481
155,688
–
–
138,057
682,678
14,436
5,387
155,688
155,688
–
–
–
–
18,519
5,275
17,544
10,247
87,558
653,206
–
8,563
–
–
–
–
–
–
–
–
–
–
–
–
944,080
976,423
175,511
23,794
27,791
740,764
8,563
Interest Rate Risk
The consolidated entity’s borrowings comprise both variable and fixed rate instruments. The variable rate borrowings
expose the consolidated entity to a risk of changes in cash flows due to the changes in interest rates.
Management analyses interest rate exposure on an ongoing basis. The consolidated entity uses interest rate swaps
to mitigate interest rate risk.
At the reporting date the interest rate profile of the consolidated entity’s interest-bearing financial instruments was:
IN THOUSANDS OF AUD ($’000)
Fixed rate instruments
Financial liabilities
Variable rate instruments
Financial assets
Financial liabilities
Net exposure
CONSOLIDATED
CARRYING AMOUNT
2015
2014
(96,997)
(113,911)
(96,997)
(113,911)
102,393
103,167
(941,234)
(674,481)
(838,841)
(571,314)
(935,838)
(685,225)
Whitehaven Coal Annual Report 2015 / 127
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY
NOTES TO THE FINANCIAL STATEMENTS
5. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Sensitivity Analysis for Variable Rate Instruments
A change of 100 basis points in interest rates at the reporting date would have increased/ (decreased) equity
and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign
currency rates, remain constant. The analysis is performed on the same basis for 2014.
EFFECT IN THOUSANDS OF AUD ($’000)
30 June 2015
Variable rate instruments
Effect on loss before tax
30 June 2014
Variable rate instruments
Effect on loss before tax
EFFECT IN THOUSANDS OF AUD ($’000)
30 June 2015
Variable rate instruments
Effect on equity before tax
30 June 2014
Variable rate instruments
Effect on equity before tax
PROFIT OR LOSS
100BP
INCREASE
100BP
DECREASE
(8,388)
8,388
(8,388)
8,388
(5,713)
(5,713)
5,713
5,713
EQUITY
100BP
INCREASE
100BP
DECREASE
877
877
(918)
(918)
1,235
1,235
(1,300)
(1,300)
Commodity Price Risk
The Group’s major commodity price exposure is to the price of coal. The consolidated entity has chosen not to hedge
against the movement in coal prices.
During the year the Group entered into commodity contracts to hedge fuel price risk.
Net Fair Values
The Group complies with AASB 7 Financial Instruments: Disclosures which requires disclosure of fair value
measurements by level of the following fair value measurement hierarchy:
— Level 1 – measurements based upon quoted prices (unadjusted) in active markets for identical assets or liabilities,
— Level 2 – measurements based upon inputs other than quoted prices included within level 1 that are observable
for the asset or liability, either directly (as prices) or indirectly (derived from prices), and
— Level 3 – measurements based on inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
The Group held the following financial instruments carried at fair value in the statement of financial position:
IN THOUSANDS OF AUD ($’000)
Assets measured at fair value
Equity shares
Forward exchange contracts – receivable
Liabilities measured at fair value
Forward exchange contracts – payable
Interest rate swaps – payable
Commodity swaps – payable
30 JUNE 2015
LEVEL 1
LEVEL 2
LEVEL 3
37
162
–
–
–
162
37
–
(60)
–
(60)
–
(1,005)
(1,071)
–
–
(1,005)
–
(1,071)
–
128 / A Year of Delivery
7. FINANCIAL REPORT
IN THOUSANDS OF AUD ($’000)
30 JUNE 2014
LEVEL 1
LEVEL 2
LEVEL 3
Assets measured at fair value
Equity shares
Liabilities measured at fair value
Interest rate swaps – payable
568
531
–
(466)
–
(466)
37
–
The fair value of derivative financial instruments is derived using valuation techniques based on observable market
inputs, such as forward currency rates, at the end of the reporting period. The amounts disclosed in the statement
of financial position are the fair values and are classified under level 2 in the fair value measurement hierarchy
(refer note 17).
The fair value of the Group’s investment in listed shares is classified under level 1 in the fair value measurement
hierarchy (refer note 18).
The fair value of the Group’s investment in unlisted shares is classified under level 3 in the fair value measurement
hierarchy (refer note 18). The Group’s holding in unlisted shares is minor and any reasonably possible change in
assumptions would not have a material impact on the Group’s financial statements.
The carrying values of financial assets and financial liabilities recorded in the financial statements materially
approximates their respective net fair values, determined in accordance with the accounting policies disclosed
in note 3 to the financial statements
Financial Assets and Liabilities by Categories
CONSOLIDATED ENTITY
Financial assets
Cash and cash equivalents
Trade and other receivables
Investments
Other financial assets2
TOTAL FINANCIAL ASSETS
Financial liabilities
Trade and other payables
Borrowings
Other financial liabilities2
TOTAL FINANCIAL LIABILITIES
NOTES
LOANS &
RECEIVABLES1
AVAILABLE
FOR SALE
OTHER
LOANS &
RECEIVABLES1
AVAILABLE
FOR SALE
OTHER
2015
2014
14
15
18
17
22
23
17
102,393
125,228
–
–
227,621
147,422
1,038,231
–
1,185,653
–
–
–
–
–
–
–
–
–
–
–
37
162
199
–
–
2,136
2,136
103,167
99,934
–
–
203,101
155,688
788,392
–
944,080
–
–
531
–
531
–
–
–
–
–
–
37
–
37
–
–
466
466
1. Loans and receivables are non-derivatives with fixed or determinable payments and are not quoted on an active market. Loans and receivables are valued
at amortised cost.
2. Other financial assets include $0.2 million (2014: nil) relating to derivatives that qualified as being in a hedging relationship. Similarly, other financial
liabilities include amounts of $2.1 million (2014: $0.5 million).
6. SEGMENT REPORTING
a)
Identification of Reportable Segments
The Group has identified its reportable segments based on the internal reports that are reviewed and used by the
executive management team (the chief operating decision makers) in assessing performance and in determining
the allocation of resources.
The Group has determined that it has two reportable segments: Open Cut Operations and Underground Operations.
Discrete financial information about each of these segments is reported to the executive management team on at
least a monthly basis.
Unallocated includes coal trading, corporate, marketing and infrastructure functions which are managed on a group
basis and are not allocated to reportable segments.
The following table represents revenue and profit information for reportable segments for the years ended 30 June
2015 and 30 June 2014. The Group’s financing (including finance costs and finance income), depreciation and income
taxes are managed on a group basis and are not allocated to reportable segments.
Whitehaven Coal Annual Report 2015 / 129
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY
NOTES TO THE FINANCIAL STATEMENTS
6. SEGMENT REPORTING (CONTINUED)
IN THOUSANDS OF AUD ($’000)
Revenue
Sales to external customers
Total segment revenue
TOTAL REVENUE PER STATEMENT
OF COMPREHENSIVE INCOME
IN THOUSANDS OF AUD ($’000)
Result
Segment result
Depreciation and amortisation
Income tax benefit
Significant items before income tax
and financing (see note 7)
Loss on investments and asset disposals
Net interest expense
NET LOSS AFTER TAX PER STATEMENT
OF COMPREHENSIVE INCOME
Capital expenditure
Segment expenditure2
IN THOUSANDS OF AUD ($’000)
Revenue
Sales to external customers
Total segment revenue
TOTAL REVENUE PER STATEMENT
OF COMPREHENSIVE INCOME
IN THOUSANDS OF AUD ($’000)
Result
Segment result
Depreciation and amortisation
Income tax benefit
Significant items before income tax
and financing (see note 7)
Loss on investments and asset disposals
Net interest expense
NET LOSS AFTER TAX PER STATEMENT
OF COMPREHENSIVE INCOME
Capital expenditure
Segment expenditure2
YEAR ENDED 30 JUN 2015
UNALLOCATED
OPERATIONS1
OPEN CUT
OPERATIONS
UNDERGROUND
OPERATIONS
TOTAL
(8,612)
(8,612)
365,809
365,809
406,093
406,093
763,290
763,290
763,290
YEAR ENDED 30 JUN 2015
UNALLOCATED
OPERATIONS
OPEN CUT
OPERATIONS
UNDERGROUND
OPERATIONS
TOTAL
(19,982)
36,694
113,538
130,250
(97,584)
140,592
(447,253)
(884)
(67,846)
(342,725)
6,689
239,630
43,861
290,180
YEAR ENDED 30 JUN 2014
UNALLOCATED
OPERATIONS
OPEN CUT
OPERATIONS
UNDERGROUND
OPERATIONS
TOTAL
29,940
29,940
402,144
402,144
323,322
323,322
755,406
755,406
YEAR ENDED 30 JUN 2014
UNALLOCATED
OPERATIONS1
OPEN CUT
OPERATIONS
UNDERGROUND
OPERATIONS
(30,605)
48,507
72,463
755,406
TOTAL
90,365
(79,491)
17,949
(14,259)
(84)
(52,865)
(38,385)
9,738
260,913
28,953
299,604
1. Primarily relates to coal trading, contract discounts and foreign exchange gains/losses not allocated to segments.
2. Open Cut operations includes Maules Creek expenditure.
130 / A Year of Delivery
7. FINANCIAL REPORT
Other Segment Information
Revenue from external customers by geographical locations is detailed below. Revenue is attributed to geographic
location based on final shipping destination.
IN THOUSANDS OF AUD ($’000)
Total segment revenue
Japan
Korea
India
Other
Taiwan
China
Domestic
TOTAL REVENUE
Total revenue by product
Thermal
Metallurgical
Domestic
TOTAL REVENUE
2015
2014
274,520
253,324
106,834
57,555
50,890
14,957
5,210
332,722
232,697
82,012
28,390
19,976
43,667
15,942
763,290
755,406
589,856
168,224
5,210
575,839
163,625
15,942
763,290
755,406
Major Customers
The Group has three major customers which account for 36.1% (2014: 45.9%) of external revenue.
Whitehaven Coal Annual Report 2015 / 131
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY NOTES TO THE FINANCIAL STATEMENTS
7. SIGNIFICANT ITEMS
The items below are significant to the understanding of the overall results of the consolidated group. The Company
believes the disclosure of these items provides readers of the financial statements with further meaningful insights
to understand the financial performance of the Group.
IN THOUSANDS OF AUD ($’000)
Included within the balances presented on the face of the
Consolidated Statement of Comprehensive Income:
Operating expenses:
Suspension of mining activities and office closures1
Restructuring costs2
Impairment of exploration and related assets5
Impairment of MRRT goodwill3
IMPAIRMENT OF ASSETS
Other expenses:
Contract cancellation cost4
Administrative expenses:
Separation costs2
Bad debt provisions6
CONSOLIDATED
NOTES
2015
2014
–
(585)
(585)
(5,473)
(522)
(5,995)
(354,652)
(2,340)
(90,711)
–
(445,363)
(2,340)
–
–
(1,305)
(1,305)
(2,521)
(511)
(2,892)
(3,403)
Financial expenses:
Write-off of finance facility upfront costs
23
(23,093)
–
SIGNIFICANT ITEMS BEFORE TAX
(470,346)
(14,259)
Applicable income tax (expense)/benefit
De-recognition of MRRT net deferred tax liability3
Tax benefit on refund of overpaid tax7
Franking deficit tax charge7
SIGNIFICANT ITEMS AFTER TAX
112,573
25,801
42,331
(42,331)
4,278
–
–
–
(331,972)
(9,981)
1. During the prior year work was undertaken to remediate a spontaneous combustion incident at the Sunnyside mine and an additional provision was raised
to cover ongoing care and maintenance costs.
2. During the year the Group incurred redundancy costs as a result of a restructure of its workforce (2014: $0.5m). In the prior year separation costs were
also incurred following the resignation of the former CFO ($0.5m).
3. De-recognition of MRRT related deferred tax balances as a result of the enactment of legislation repealing the MRRT. This includes the MRRT goodwill
that arose on the acquisition of Aston $53.2m (allocated to the open-cut segment), Boardwalk ($29.9m) and Coalworks ($7.6m) that were not allocated
during the year ended 30 June 2012 as a result of the recognition of deferred taxes on the implementation of the MRRT legislation as part of the purchase
price accounting. This MRRT goodwill, being an intangible asset was created upon the introduction of the MRRT. The carrying value of the MRRT goodwill
has been reviewed in the current year following the enactment of legislation repealing the MRRT, and as a result was fully reversed, together with the
associated deferred tax assets and liabilities initially recognised on introduction of the MRRT legislation.
4. During the prior year the Group incurred costs in relation to the cancellation of an infrastructure sharing agreement.
5. During the year ended 30 June 2015, an impairment charge of $355m was taken in respect of early stage exploration assets. The impairment charge
reflects the recently changed coal market environment and prospects for early stage exploration assets and particularly assets that are higher in ash
and lower in energy. This includes assets that would have been targeted towards customers in China. During the prior year the Group wrote off a number
of small amounts of exploration and related expenditure.
6. The Company was advised in July 2014 that a domestic customer had been placed into voluntary administration. A provision was established to cover
balances owed which are not expected to be recovered.
7. During the current year the company received a tax refund of $42.3m following conclusion of an outstanding tax matter resulting in a tax benefit being
recognised in the income statement. As a result of the tax refund the company was required to pay franking deficit tax of $42.3m to rebalance its franking
account, resulting in recognition of an income tax expense in the income statement. This amount was paid on 31 July 2015 and will remain as a credit
available to the company to offset future tax liabilities.
132 / A Year of Delivery
7. FINANCIAL REPORT
IN THOUSANDS OF AUD ($’000)
8. REVENUE
Sale of coal
9. OTHER INCOME
Equipment and other hire income
Rental income
Contract compensation income
Net foreign exchange gain
Sundry income
10. OTHER EXPENSES
Contract cancellation costs1
Share based compensation payments
Loss on sale of non-current assets
1. During the prior year the Group incurred costs in relation to the cancellation of an infrastructure sharing agreement.
CONSOLIDATED
2015
2014
763,290
755,406
5,863
1,365
–
3,311
174
5,992
1,473
924
–
108
10,713
8,497
–
2,431
353
2,784
2,521
1,254
792
4,567
Whitehaven Coal Annual Report 2015 / 133
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY NOTES TO THE FINANCIAL STATEMENTS
IN THOUSANDS OF AUD ($’000)
11. PERSONNEL EXPENSES
Wages and salaries
Contributions to superannuation plans
Other associated personnel expenses
Increase in liability for annual leave
Increase / (decrease) in liability for long service leave
Share based compensation payments1
1. Disclosed in “Other expenses” in the Statement of Comprehensive Income.
12. FINANCE INCOME AND EXPENSE
Recognised in profit or loss
Interest income1
Interest on tax refund1
Dividend income
Unrealised gain on investments
FINANCIAL INCOME
Interest expense on finance lease liabilities1
Interest on drawn debt facility1
Other interest charges1
Interest and financing costs
Write-off of finance facility upfront costs1
Unwinding of discounts on provisions1
Unrealised loss on investments
Amortisation of finance charges payable under debt facilities1
Net foreign exchange loss on finance leases
FINANCIAL EXPENSES
NET FINANCIAL EXPENSE
Recognised directly in equity
Net change in cash flow hedges
Income tax effect
FINANCIAL (EXPENSE)/INCOME RECOGNISED DIRECTLY IN EQUITY, NET OF TAX
1. Included within net interest expense of $67,846,000 (2014: $52,865,000).
CONSOLIDATED
2015
2014
91,892
6,662
3,248
802
405
2,431
87,720
6,352
3,620
1,170
(232)
1,254
105,440
99,884
1,025
3,727
4
–
4,756
1,114
3,940
95
708
5,857
(8,002)
(17,715)
(10,005)
(9,170)
(21,160)
(13,737)
(35,722)
(44,067)
(23,093)
(2,350)
(531)
–
(2,212)
–
(11,433)
(11,640)
(31)
(95)
(73,160)
(58,014)
(68,404)
(52,157)
(1,507)
452
(1,055)
4,351
(1,305)
3,046
134 / A Year of Delivery
7. FINANCIAL REPORT IN THOUSANDS OF AUD ($’000)
13.
INCOME TAX
a)
Income Tax (Expense)/Benefit
Current income tax – corporate tax
Current period
Adjustment for prior periods
Deferred income tax – corporate tax
Origination and reversal of temporary differences
De-recognition of MRRT net deferred tax liability
Income tax benefit reported in the statement of comprehensive income
CONSOLIDATED
2015
2014
60,401
68,204
(888)
59,513
(21)
68,183
55,278
25,801
140,592
(50,234)
–
17,949
Numerical reconciliation between tax expense recognised in the statement
of comprehensive income and profit before tax
Profit/(loss) before tax
(483,317)
(56,334)
Income tax benefit using the Company’s domestic tax rate of 30% (2014: 30%)
144,995
16,900
Non-deductible expenses:
Share based payments
Impairment of goodwill
Impairment of exploration assets
Other non-deductible expenses
De-recognition of MRRT net deferred tax liability
Recognition of tax losses
Tax benefit on refund of overpaid tax
Uplift on immediate deduction of exploration licence
Franking deficit tax liability
Over/(Underprovided) in prior periods
TOTAL INCOME TAX BENEFIT
b)
Income Tax Recognised Directly in Equity
Deferred income tax related to items charged/(credited) directly to equity
Derivatives
Transaction costs on issue of share capital
Income tax expense recorded in equity
(729)
(27,213)
(28,668)
(1,374)
25,801
28,668
42,331
–
(42,331)
(888)
(376)
–
–
(64)
–
–
–
7,729
(6,219)
(21)
140,592
17,949
452
1
453
(1,305)
1
(1,304)
Whitehaven Coal Annual Report 2015 / 135
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY
Recognition of deferred tax asset on current year losses
(59,513)
NOTES TO THE FINANCIAL STATEMENTS
13.
INCOME TAX (CONTINUED)
c)
Recognised Tax Assets and Liabilities
IN THOUSANDS OF AUD ($’000)
Opening balance
Charged to income – corporate tax
Charged to equity
De-recognition of MRRT net deferred tax liability
Franking deficit tax payable
Tax benefit on refund of overpaid tax
Transfer between current and deferred tax
Payments/(receipts)
CLOSING BALANCE
Tax expense in statement of comprehensive income:
Charged to income
Charged to equity
Amounts recognised in the statement of financial
position:
Deferred tax asset (net)
Deferred tax liability (net)
CONSOLIDATED
2015
CURRENT
INCOME
TAX
2015
DEFERRED
INCOME
TAX
2014
CURRENT
INCOME
TAX
2014
DEFERRED
INCOME
TAX
(6,219)
59,513
–
–
(42,331)
–
–
6,219
(29,931)
55,279
453
59,513
25,801
42,331
(42,331)
–
–
(42,331)
111,115
140,592
453
111,115
–
111,115
(13,935)
68,183
–
(66,673)
–
–
–
(17,841)
(50,234)
(1,304)
66,673
–
–
–
27,225
(21,019)
(6,219)
(27,225)
–
(29,931)
17,949
(1,304)
–
(29,931)
(29,931)
Deferred income tax assets and liabilities are attributable to the following:
CONSOLIDATED
ASSETS
LIABILITIES
2015
2014
2015
2014
–
16,435
–
–
358
–
–
25,384
329,396
–
11,022
382,595
–
–
–
140
257
–
1,352
27,803
222,804
11,057
11,781
(265,748)
(205,150)
–
(57,738)
(499)
(375)
–
–
(5,186)
(47)
–
–
–
–
–
–
(5,004)
–
–
–
–
–
275,194
(271,480)
(268,267)
(271,480)
(275,194)
271,480
111,115
–
–
275,194
6,927
IN THOUSANDS OF AUD ($’000)
Corporate tax
Property, plant and equipment
Exploration and evaluation
Receivables
Derivatives
Investments
Deferred stripping
Deferred foreign exchange gain
Provisions
Tax losses
On MRRT
Other items
Tax assets/(liabilities)
Set off of tax (liabilities)/assets
Net tax assets/(liabilities)
136 / A Year of Delivery
7. FINANCIAL REPORT IN THOUSANDS OF AUD ($’000)
2015
2014
2015
2014
CONSOLIDATED
ASSETS
LIABILITIES
MRRT
Property, plant and equipment
Exploration and evaluation
Losses and royalty credits
Other
Tax assets/(liabilities)
Set off of tax assets
Net tax assets/(liabilities)
–
–
–
–
–
–
–
TOTAL NET DEFERRED TAX ASSET/(LIABILITY)
111,115
–
–
85,380
4,050
89,430
(89,430)
–
–
–
–
–
–
–
–
–
–
(68,443)
(57,845)
–
–
(126,288)
89,430
(36,858)
(29,931)
d) Unrecognised Deferred Tax Assets
Deferred tax assets have not been recognised in respect of the cost base available on disposal of the following items:
IN THOUSANDS OF AUD ($’000)
Corporate tax
Tax losses
Tax credits
MRRT
MRRT assets not recognised
e)
Tax Consolidation
CONSOLIDATED
2015
2014
32,164
30,958
63,122
82,310
24,738
107,048
–
–
421,767
421,767
The Company and its 100% owned Australian subsidiaries formed a tax consolidated group with effect from 29 May
2007. The consolidated tax group has entered into both a tax funding arrangement and a tax sharing agreement.
Whitehaven Coal Annual Report 2015 / 137
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY NOTES TO THE FINANCIAL STATEMENTS
IN THOUSANDS OF AUD ($’000)
14. CASH AND CASH EQUIVALENTS
Cash and cash equivalents
Cash at bank earns interest at floating rates based on daily bank deposit rates.
15. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Other trade receivables and prepayments
Receivables due from related parties
Non-current
Other trade receivables and prepayments
16. INVENTORIES
Coal stocks at lower of cost and net realisable value1
Consumables and stores
1. Coal stocks include run of mine and product coal.
17. DERIVATIVE FINANCIAL INSTRUMENTS
Current assets
Forward exchange contracts – receivable
Current liabilities
Forward exchange contracts – payable
Interest rate swaps – payable
Commodity swaps – payable
CONSOLIDATED
2015
2014
102,393
103,167
56,686
35,875
8,491
101,052
32,688
25,972
11,602
70,262
24,176
29,672
67,563
22,329
89,892
43,226
17,896
61,122
162
–
60
1,005
1,071
2,136
–
466
–
466
Instruments Used by the Consolidated Entity
Derivative financial instruments are used by the consolidated entity in the normal course of business in order to hedge
exposure to fluctuations in foreign exchange and interest rates. During the year, the Group’s hedges were fully effective,
and therefore the ineffectiveness recognised in financial expenses in the income statement for the current year was
$nil (2014: $nil, see Note 12).
Interest Rate Swaps – Cash Flow Hedges
The Group has debt facilities subject to variable interest rates. In order to protect against interest rate movements
and reduce the interest rate related volatility of the consolidated entity’s financial expenses, the consolidated entity
enters into interest rate swaps.
The cumulative effective portion of $874,000 (2014: $993,000) is reflected in other comprehensive income. The
recycling of losses from the hedge reserve to the income statement for interest amounted to $335,000 (2014:
$407,000), which has been recognised in financial expenses.
Commodity Swaps – Cash Flow Hedges
In order to protect against fuel price movements the Group entered into fuel price swaps during the year.
The cumulative effective portion of $9,010,000 (2014: $nil) is reflected in other comprehensive income. The recycling
of losses from the hedge reserve to the income statement for fuel amounted to $7,939,000 (2014: $nil), which has been
recognised in operating expenses.
138 / A Year of Delivery
7. FINANCIAL REPORT Forward Currency Contracts – Cash Flow Hedges
The consolidated entity undertakes sales in US dollars. In order to protect against exchange rate movements
and reduce the foreign exchange rate related volatility of the consolidated entity’s revenue, the consolidated
entity enters into forward exchange contracts to sell US dollars in the future at stipulated exchange rates.
Forward exchange contracts are entered for future sales undertaken in US dollars.
The contracts are timed to mature when funds for coal sales are forecast to be received. At 30 June 2015,
the forward exchange contracts are designated as cash flow hedges and are expected to impact profit
or loss in the periods specified below.
Forward Exchange Contracts
IN THOUSANDS OF AUD (EXCEPT EXCHANGE RATES)
Sell US dollars
Less than 6 months
6 months to 1 year
FAIR
VALUE
2015
AVERAGE
EXCHANGE
RATES
2015
FAIR
VALUE
2014
AVERAGE
EXCHANGE
RATES
2014
102
–
102
0.7675
–
0.7675
–
–
–
–
–
–
The cumulative effective portion of $14,449,000 (2014: $2,432,000) is reflected in other comprehensive income.
The recycling of losses from the hedge reserve to the income statement for sales amounted to $14,552,000
(2014: $2,505,000), which has been recognised in revenue.
IN THOUSANDS OF AUD ($’000)
18. INVESTMENTS
Non-current investments
Investment in unlisted shares
Investment in listed shares
CONSOLIDATED
2015
2014
37
–
37
37
531
568
Whitehaven Coal Annual Report 2015 / 139
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY
NOTES TO THE FINANCIAL STATEMENTS
19. PROPERTY, PLANT AND EQUIPMENT
NOTES
FREEHOLD
LAND
PLANT AND
EQUIPMENT
CONSOLIDATED
LEASED
PLANT AND
EQUIPMENT
MINING
PROPERTY
AND
DEVELOPMENT
TOTAL
127,817
26,505
513,701
41,975
112,152
–
2,830,798
3,584,468
446,716
515,196
–
–
(10)
154,312
154,312
2,545
–
–
–
(27,978)
31,595
(3,617)
–
–
(1,549)
526,149
526,149
26,244
–
–
49,754
–
49,754
(1,559)
143,747
3,323,651
4,147,859
143,747
190
3,323,651
4,147,859
478,066
507,045
14,254
(14,254)
–
–
–
(498)
–
–
(28,581)
(28,581)
–
(498)
156,857
566,149
129,683
3,773,136
4,625,825
–
–
–
–
–
–
–
–
–
–
–
(118,362)
(40,766)
(293,718)
(452,846)
(33,617)
(12,079)
(265,122)
(310,818)
(20,069)
20,069
742
–
–
–
–
742
(171,306)
(32,776)
(558,840)
(762,922)
(171,306)
(32,776)
(558,840)
(762,922)
(40,451)
(10,683)
(272,517)
(323,651)
(8,237)
8,237
142
(136)
–
–
–
–
(14)
–
142
(150)
(219,988)
(35,222)
(831,371)
(1,086,581)
127,817
154,312
154,312
156,857
395,339
354,843
354,843
346,161
71,386
110,971
110,971
94,461
2,537,080
3,131,622
2,764,811
3,384,937
2,764,811
3,384,937
2,941,765
3,539,244
IN THOUSANDS
OF AUD ($’000)
Cost
Balance at 1 July 2013
Additions
Transfer to plant
and equipment
Transfer from exploration
and evaluation
20
Disposals
Balance at 30 June 2014
Balance at 1 July 2014
Additions
Transfer to plant
and equipment
Transfer to exploration
and evaluation
20
Disposals
BALANCE AT
30 JUNE 2015
Depreciation
and impairment
Balance at 1 July 2013
Depreciation charge
for the year
Transfer to plant
and equipment
Disposals
Balance at 30 June 2014
Balance at 1 July 2014
Depreciation charge
for the year
Transfer from plant
and equipment
Disposals
Impairment
BALANCE AT
30 JUNE 2015
Carrying amounts
At 1 July 2013
At 30 June 2014
At 1 July 2014
AT 30 JUNE 2015
140 / A Year of Delivery
7. FINANCIAL REPORT Leased Plant and Machinery
The consolidated entity leases mining equipment under a number of finance lease agreements. At 30 June 2015,
the consolidated entity’s net carrying amount of leased plant and machinery was $94,461,000 (2014: $110,971,000).
The leased equipment is pledged as security for the related finance lease liabilities. During the prior year the Group
entered into sale and leaseback transactions resulting in the reclassification of items of equipment between property,
plant and equipment and leased plant and equipment.
Impairment of Non-current Assets
The recoverable amount of the CGUs has been determined by the FVLCD method. The FVLCD for each CGU
is determined based on the net present value of the future estimated cash flows (expressed in real terms)
expected to be generated from the continued use of the CGUs, including any expansion projects, and their
eventual disposal. The cash flows have been estimated with reference to remaining reserves and resources
along with assumptions in respect of coal prices, foreign exchange rates, stripping ratios, production rates
and unit costs. These cash flows were discounted using a real pre-tax discount rate of 11%. The coal prices
and foreign exchange rates applied for the first three years of the cash flow estimates are based on detailed
financial budgets approved by senior management which included consideration of external sources such
as analyst forecasts. Long term estimates are based on a consideration of third party analyst forecasts and
management estimates in respect of long term incentive coal prices in the seaborne export coal market.
Costs of disposal are estimated based on the current market rate applied by advisors in respect of the
disposal of mining assets.
20. EXPLORATION AND EVALUATION
IN THOUSANDS OF AUD ($’000)
Balance at 1 July 2013
Exploration and evaluation expenditure
Transfer to property, plant and equipment
Impairment
Balance at 30 June 2014
Exploration and evaluation expenditure
Transfer from property, plant and equipment
Impairment
BALANCE AT 30 JUNE 2015
CONSOLIDATED
574,459
3,049
(49,754)
(840)
526,914
851
28,581
(355,000)
201,346
Exploration and Evaluation Assets
The recoverability of the carrying amount of exploration and evaluation assets is dependent on the successful
development and commercial exploitation or sale of the respective areas of interest. Exploration and evaluation
assets include tenements granted by the Queensland State Government which are subject to periodic relinquishment
requirements of up to 20% per year.
During the year ended 30 June 2015, an impairment charge of $355m was taken in respect of early stage exploration
assets, which is not allocated to a segment. Exploration and evaluation assets are carried at their fair value less costs
to dispose. This value represents the Group’s view of these assets. The impairment charge reflects the recently
changed coal market environment and prospects for early stage exploration assets.
Whitehaven Coal Annual Report 2015 / 141
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY NOTES TO THE FINANCIAL STATEMENTS
21.
INTANGIBLE ASSETS
IN THOUSANDS OF AUD ($’000)
Water access rights
Acquired haulage rights
Less: Accumulated amortisation
Rail access rights1
MRRT Goodwill2
CONSOLIDATED
2015
8,577
1,300
(1,160)
11,237
–
2014
8,577
1,300
(1,007)
6,262
90,711
19,954
105,843
1. As part of the agreement to cancel previously existing infrastructure sharing arrangements Whitehaven agreed to pay 10.1% of the construction cost
of the shared portion of the Boggabri – Maules Creek rail spur. In return, Whitehaven receives access to rail tonnes on the joint rail spur.
2. MRRT goodwill arose on the acquisition of Boardwalk, Aston and Coalworks during the year ended 30 June 2012 as a result of the recognition of
deferred taxes on the implementation of the MRRT legislation as part of the purchase price accounting. This MRRT goodwill, being an intangible asset
was created upon the introduction of the MRRT. The carrying value of the MRRT goodwill was reviewed in the current year following the enactment
of legislation repealing the MRRT and as a result was fully reversed, together with the associated deferred tax assets and liabilities initially recognised
on introduction of the MRRT legislation.
The carrying amounts of water access rights are reviewed at each balance date to determine whether there is any
indication of impairment. When reviewing for indicators of impairment, the Group considers mining plans, project
approvals and market values, among other factors.
Movement Intangibles
IN THOUSANDS OF AUD ($’000)
Balance at 1 July 2013
Additions during the year
Less: Amortisation charge
BALANCE AT 30 JUNE 2014
Balance at 1 July 2014
Additions during the year
Less: Amortisation charge
Less: MRRT goodwill impairment
WATER
ACCESS
RIGHTS
8,539
38
–
8,577
8,577
–
–
–
BALANCE AT 30 JUNE 2015
8,577
22. TRADE AND OTHER PAYABLES
IN THOUSANDS OF AUD ($’000)
Current
Trade payables
Other payables and accruals
CONSOLIDATED
CONTRACT
RELATED
INTANGIBLE
RAIL
ACCESS
RIGHTS
446
–
(153)
293
293
–
(153)
–
140
–
6,262
–
6,262
6,262
4,975
–
–
11,237
MRRT
GOODWILL
90,711
–
–
TOTAL
99,696
6,300
(153)
90,711
105,843
90,711
105,843
–
–
(90,711)
–
4,975
(153)
(90,711)
19,954
CONSOLIDATED
2015
2014
46,935
100,487
147,422
49,500
106,188
155,688
142 / A Year of Delivery
7. FINANCIAL REPORT 23. INTEREST-BEARING LOANS AND BORROWINGS
This note provides information about the contractual terms of the consolidated entity’s interest-bearing loans
and borrowings.
IN THOUSANDS OF AUD ($’000)
Current liabilities
Finance lease liabilities
Secured loans
Non-current liabilities
Finance lease liabilities
Secured loans
Financing facilities
Secured loans
Facilities utilised at reporting date
Secured loans
Facilities not utilised at reporting date
Secured loans
CONSOLIDATED
2015
2014
13,503
8,247
21,750
24,837
8,247
33,084
83,494
89,074
932,987
666,234
1,016,481
755,308
1,038,231
788,392
1,241,234
1,049,481
941,234
674,481
300,000
375,000
Financing Facilities
On 26 March 2015 the Company entered into a $1.4 billion Senior Secured Bank Facility. The facility has a maturity
date of July 2019 and provides Whitehaven with lines of credit up to A$1.4 billion comprising of A$1.2 billion revolving
and term facility, and $0.2 billion guarantee facilities. This facility was used to replace the Company’s $1.2 billion facility.
As a result the Company wrote off $23.1 million of finance upfront costs relating to the $1.2 billion facility. During the
current year an amount of $225 million was drawn down under the old facility. A further $900 million was drawn
down under the new facility, of which $850 million was used to repay debt drawn on the old facility. Other loans
of $8.3 million were repaid during the year. The security provided in relation to the facilities is a fixed and floating
charge over the assets of the Group.
Finance Lease Facility
At 30 June 2015, the consolidated entity’s lease liabilities are secured by the leased assets of $94,461,000
(2014: $110,971,000), as in the event of default, the leased assets revert to the lessor.
Finance Lease Liabilities
Finance lease liabilities of the consolidated entity are payable as follows:
IN THOUSANDS
OF AUD ($’000)
Less than one year
Between one and five years
CONSOLIDATED
MINIMUM
LEASE
PAYMENTS
2015
20,405
93,280
113,685
INTEREST
2015
PRINCIPAL
2015
6,902
9,786
16,688
13,503
83,494
96,997
MINIMUM
LEASE
PAYMENTS
2014
32,955
105,102
138,057
INTEREST
2014
PRINCIPAL
2014
8,118
16,028
24,146
24,837
89,074
113,911
Whitehaven Coal Annual Report 2015 / 143
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY NOTES TO THE FINANCIAL STATEMENTS
IN THOUSANDS OF AUD ($’000)
24. EMPLOYEE BENEFITS
Current
Salaries and wages accrued
Liability for long service leave
Liability for annual leave
25. PROVISIONS
Mine rehabilitation and closure
Take or pay
Other provisions
Current
Non-current
Movements in Provision
IN THOUSANDS OF AUD ($’000)
Balance at 1 July 2014
Provisions made during the period
Provisions used during the period
Provisions reversed during the period
Unwind of discount
BALANCE AT 30 JUNE 2015
CONSOLIDATED
2015
2014
4,073
274
9,708
14,055
4,125
(131)
8,906
12,900
76,458
62,900
–
3,704
80,162
7,380
72,782
80,162
9,776
9,677
82,353
22,995
59,358
82,353
MINE
REHABILITATION
AND CLOSURE
62,900
11,748
(540)
–
2,350
76,458
TAKE
OR PAY
9,776
–
(10,246)
–
470
–
OTHER
PROVISIONS
9,677
–
(1,040)
(4,933)
–
3,704
Increases in the provision for rehabilitation were made during the year as a result of additional disturbance at
several mines and a reassessment of the areas of disturbance and rehabilitation rates. Rehabilitation and mine
closure expenditure is expected to occur over the life of the mining operations which ranges from 5 to 30 years.
Refer to Note 3(r) for details on the nature of the obligation.
Other provisions include amounts recognised on acquisition of subsidiaries as part of the purchase price allocation
and amounts for costs expected to be incurred for maintaining Sunnyside in care and maintenance.
144 / A Year of Delivery
7. FINANCIAL REPORT 26. SHARE CAPITAL AND RESERVES
a)
Share Capital
IN THOUSANDS OF AUD ($’000)
Fully paid ordinary shares 1,026,045,885 (2014: 1,025,760,027)
CONSOLIDATED
2015
2014
3,146,147
3,146,300
b) Movements in Shares on Issue
Ordinary Shares
Beginning of the financial year
Share based payments
Shares purchased by share plan
Costs of shares issued, net of tax
CONSOLIDATED
2015
2014
NO. OF
SHARES
000’S
NO. OF
SHARES
000’S
$000
$000
1,025,760
3,146,300
1,025,693
3,146,301
286
–
–
–
(148)
(5)
67
–
–
–
–
(1)
1,026,046
3,146,147
1,025,760
3,146,300
c)
Terms and Conditions of Issued Capital
Fully paid ordinary shares carry one vote per share, either in person or by proxy, at a meeting of the Company
and carry the right to receive dividends as declared. In the event of a winding up of the Company, fully paid ordinary
shares carry the right to participate in the proceeds from the sale of all surplus assets in proportion to the number
of and amounts paid up on shares held. Under the terms of the acquisition of Boardwalk Resources Limited,
34,020,000 ordinary shares are subject to a restriction deed which removes their entitlement to vote, receive
dividends as declared or participate in the proceeds from the sale of all surplus assets. These restrictions will
be released on reaching certain milestones.
d) Hedge Reserve
The hedging reserve comprises the effective portion of the cumulative change in the fair value of cash flow hedging
instruments related to hedged transactions that have not yet occurred.
e)
Share-based Payment Reserve
The share-based payment reserve is used to record the value of share based payments provided to director related
entities and senior employees under share option and long term incentive plans. Refer to note 32 for further details
of these plans.
f)
Dividends
No dividends were paid during the year ended 30 June 2015 (2014: nil).
The directors resolved not to pay dividend for the year ended 30 June 2015.
Dividend Franking Account
There were no franking credits available to shareholders of Whitehaven Coal Limited for subsequent financial
years (2014: nil).
Whitehaven Coal Annual Report 2015 / 145
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY NOTES TO THE FINANCIAL STATEMENTS
27. OPERATING LEASES
Consolidated Entity as Lessee
The consolidated entity leases mining equipment, office equipment and office space under operating leases.
The leases typically run for one to five years on commercial terms. None of the leases includes contingent
rentals. The operating lease expenses recognised in profit or loss in the current year amounted to $1,378,000
(2014: $1,362,000).
Future minimum rentals payable under non-cancellable operating leases as at 30 June 2015 are as follows:
IN THOUSANDS OF AUD ($’000)
Less than one year
Between one and five years
28. CAPITAL EXPENDITURE COMMITMENTS
IN THOUSANDS OF AUD ($’000)
Plant and equipment and intangibles
Contracted for but not provided for and payable:
Within one year1
1. There were no commitments for capital expenditure beyond one year.
29. CONTINGENCIES
Bank Guarantees
IN THOUSANDS OF AUD ($’000)
The Group provided bank guarantees to:
i. Government departments as a condition of continuation
of mining and exploration licenses
ii. Rail capacity providers
iii. Port capacity providers
iv. Electricity network access supplier
v. Boggabri-Maules Creek Rail Spur
vi. Other
CONSOLIDATED
2015
23,254
76,541
99,795
2014
905
1,372
2,277
CONSOLIDATED
2015
2014
21,706
124,445
CONSOLIDATED
2015
2014
49,375
30,027
88,291
26,200
–
2,117
67,132
23,492
54,818
8,950
26,269
952
196,010
181,613
Litigation
There is a number of legal and potential claims against the Group which have arisen in the ordinary course of business.
As the Group believes that it has no liability for such matters, a provision has not been made for any potential adverse
outcome. The Group will defend these claims and believes that any adverse outcome would not be material based on
information currently available to the Group.
146 / A Year of Delivery
7. FINANCIAL REPORT 30. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
IN THOUSANDS OF AUD ($’000)
Loss for the period
Adjustments for:
Depreciation
Amortisation
Write-off of finance facility upfront costs
Finance costs
Foreign exchange (gains)/losses unrealised
Unrealised loss/(gain) on investment
Unwinding of discounts on provisions
Share-based compensation payments
Write-off of assets1
Loss on sale of non-current assets
OPERATING PROFIT BEFORE CHANGES IN WORKING CAPITAL
AND PROVISIONS
Change in trade and other receivables
Change in inventories and deferred stripping
Change in trade and other payables
Change in provisions and employee benefits
Change in tax payable
Change in deferred taxes
CONSOLIDATED
NOTES
2015
2014
(342,725)
(38,385)
32
10
97,431
75,510
23,093
7,387
(5,023)
531
2,427
2,431
444,668
353
79,338
66,913
–
12,723
847
(708)
2,212
1,254
4,803
792
306,083
129,789
(22,694)
(2,983)
36,510
938
36,111
(140,592)
9,503
876
(41,915)
7,285
(7,715)
10,783
CASH FLOWS FROM OPERATING ACTIVITIES
213,373
108,606
1. This balance includes the impairment of the MRRT goodwill of $90.7m and exploration and related assets of $354.7m and partially offset by other net
write-off and reversals totalling $0.7m.
31. SUBSEQUENT EVENTS
In the interval between the end of the financial year and the date of this report there has not arisen any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect
significantly the operations of the consolidated entity, the results of those operations, or the state of affairs of the
consolidated entity, in future financial years.
Whitehaven Coal Annual Report 2015 / 147
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY
NOTES TO THE FINANCIAL STATEMENTS
32. SHARE-BASED PAYMENTS
a)
Recognised Share-based Payment Expenses
Employee Expenses
IN THOUSANDS OF AUD ($’000)
Share options and performance rights – senior employees
CONSOLIDATED
2015
2,431
2,431
2014
1,254
1,254
b)
Types of Share-based Payment Plans
Performance Right Grant to CEO and Senior Employees (FY2014)
The Company issued 3,107,441 performance rights to the CEO and senior employees under the Company’s medium
and long term incentive programs in FY2014.The terms and conditions of the grant are as follows.
PERFORMANCE RIGHTS
EXERCISE
PRICE
NUMBER OF
INSTRUMENTS
VESTING
CONDITIONS
EXPIRATION
DATE
MTI
LTI tranche 1
LTI tranche 2
$0.00
$0.00
$0.00
633,717
30 June 2015
30 June 2015
1,236,868
1,236,856
3,107,441
30 June 2016
30 June 2016
30 June 2017
30 June 2017
The performance rights vest over the period 1 July 2013 to 30 June 2017 and are subject to a performance measure
linked to relative total shareholder return (TSR). The performance measure compares the TSR performance of the
Company with the TSR performance of each of the entities in a comparator group. The comparator group for the
FY2014 grant comprises those entities within the ASX 100 Resources Index as at 1 July 2013.
The performance rights vest subject to achieving a total shareholder return (‘TSR’) as follows:
— TSR over vesting period above 75th percentile – 100% vest
— TSR over vesting period between 50th and 75th percentile – sliding scale of vesting between 35% and 100%
— TSR over vesting period equal to the 50th percentile – 35% vest
— TSR over vesting period below the 50th percentile – 0% vest
Performance Right Grant to Senior Employees (FY2015)
The Company issued 4,800,501 performance rights to senior employees under the Company’s medium and long term
incentive programs in FY2015.The terms and conditions of the grant are as follows.
PERFORMANCE RIGHTS
EXERCISE
PRICE
NUMBER OF
INSTRUMENTS
VESTING
CONDITIONS
EXPIRATION
DATE
MTI
LTI tranche 1
LTI tranche 2
LTI tranche 3
$0.00
$0.00
$0.00
$0.00
1,225,363
1,072,548
1,072,533
1,430,057
4,800,501
30 June 2016
30 June 2016
30 June 2017
30 June 2017
30 June 2018
30 June 2018
30 June 2017
30 June 2018
The MTI, LTI tranche 1 and LTI tranche 2 performance rights vest over the period 1 July 2014 to 30 June 2018 and
are subject to a performance measure linked to relative total shareholder return (TSR). The performance measure
compares the TSR performance of the Company with the TSR performance of a peer group of companies operating
in the Australian resources sector.
The performance rights vest subject to achieving a total shareholder return (‘TSR’) as follows:
— TSR over vesting period above 75th percentile – 100% vest
— TSR over vesting period between 50th and 75th percentile – sliding scale of vesting between 35% and 100%
— TSR over vesting period equal to the 50th percentile – 35% vest
— TSR over vesting period below the 50th percentile – 0% vest
148 / A Year of Delivery
7. FINANCIAL REPORT The LTI tranche 3 performance rights vest at 30 June 2017 and are subject to the Company achieving a defined
cost per tonne target for FY2017. Due to the commercially sensitive nature of this hurdle, the exact target will
not be disclosed as this stage. However, retrospective disclosure of outcomes against the target will be provided
in the Remuneration Report for the year of vesting.
The performance rights vest subject to achieving a defined cost per tonne target as follows:
— Stretch cost achieved – 100% vest
— Cost between target and stretch achieved – sliding scale of vesting between 35% and 100%
— Target cost achieved – 35% vest
— Below target cost – 0% vest
To the extent that the cost target is achieved at 30 June 2017:
— 50% of the performance rights that vest will be immediately delivered in shares; and
— The remaining 50% will continue on foot, subject to a further one year service condition prior to being
delivered in shares.
c) Movement in Options and Performance Rights
The following table illustrates the number and weighted average exercise prices of, and movements in, options and
performance rights during the year:
Outstanding at
beginning of period
Exercised during
the period
Granted during
the period
Forfeited during
the period
Lapsed during the period
Outstanding at 30 June
Exercisable at 30 June
WEIGHTED
AVERAGE
EXERCISE
PRICE 2015
NUMBER OF
OPTIONS/RIGHTS
2015
WEIGHTED
AVERAGE
EXERCISE
PRICE 2014
NUMBER OF
OPTIONS/RIGHTS
2014
$3.13
21,146,767
$3.62
18,264,731
$0.00
–
$0.00
4,830,4681
$0.00
$0.00
$2.70
$3.92
(520,051)
(939,382)
24,517,802
16,872,910
$0.00
$0.00
$0.00
$0.00
$3.13
$3.92
–
3,107,441
(225,405)
–
21,146,767
16,872,910
1. Includes 29,967 performance rights granted during the year under the FY2014 program.
The outstanding balance as at 30 June 2015 is represented by:
i. 8,619,278 options over ordinary shares having an exercise price of $3.15, exercisable until 17 August 2015
ii. 12,354 options over ordinary shares having an exercise price of $3.33, exercisable until 10 November 2015
iii. 8,241,278 options over ordinary shares having an exercise price of $4.73, exercisable until 17 August 2016
iv. 759,253 performance rights over ordinary shares having an exercise price of nil, exercisable between
23 September 2014 and 23 September 2016
v. 2,085,138 performance rights over ordinary shares having an exercise price of nil, exercisable between
30 June 2015 and 30 June 2017
vi. 4,800,501 performance rights over ordinary shares having an exercise price of nil, exercisable between
30 June 2016 and 30 June 2018
No share options were exercised during the year ended 30 June 2015 (2014: nil).
The weighted average remaining contractual life of share options and performance rights outstanding
at 30 June 2015 is 0.96 years (2014: 1.69 years).
Whitehaven Coal Annual Report 2015 / 149
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY NOTES TO THE FINANCIAL STATEMENTS
32. SHARE-BASED PAYMENTS (CONTINUED)
d) Option Pricing Models
The fair value of options granted is measured using a Black Scholes model.
The fair value of performance rights granted under the LTI program is measured using a Monte Carlo Simulation
model incorporating the probability of the performance hurdles being met.
The following table lists the inputs to the models used for the years ended 30 June 2015 and 30 June 2014:
FY2015
Grant date
Vesting date
Fair value at grant date
Share price
Exercise price
Expected volatility
Performance Right life
Expected dividends
Risk-free interest rate
FY2014
Grant date
Vesting date
Fair value at grant date
Share price
Exercise price
Expected volatility
Performance Right life
Expected dividends
Risk-free interest rate
MTI
LTI
LTI
LTI
LTI
16 Jan 15
16 Jan 15
16 Jan 15
16 Jan 15
16 Jan 15
30 Jun 16
30 Jun 17
30 Jun 18
30 Jun 17
30 Jun 18
$0.68
$1.190
$0.00
40%
$0.71
$1.190
$0.00
40%
$0.72
$1.190
$0.00
40%
$1.17
$1.190
$0.00
40%
$1.13
$1.190
$0.00
40%
2 years
3 years
4 years
3 years
4 years
0%
2.2%
0.8%
2.1%
1.4%
2.1%
0.8%
2.1%
1.4%
2.1%
MTI
LTI
LTI
LTI
LTI
9 Oct 13
9 Oct 13
9 Oct 13
4 Nov 13
4 Nov 13
30 Jun 15
30 Jun 16
30 Jun 17
30 Jun 16
30 Jun 17
$0.46
$1.825
$0.00
35%
$0.61
$1.825
$0.00
35%
$0.71
$1.825
$0.00
35%
$0.33
$1.545
$0.00
35%
$0.44
$1.545
$0.00
35%
2 years
3 years
4 years
3 years
4 years
0.75%
2.7%
1%
2.9%
1.1%
3.2%
1%
2.9%
1.1%
3.2%
All shared-based payments are equity settled.
33. RELATED PARTIES
Compensation to Executive KMP and Non-executive Directors of the Group
IN THOUSANDS OF AUD ($’000)
Short term employee benefits
Contributions to superannuation plans
Termination benefits
Share-based compensation payments
TOTAL COMPENSATION
CONSOLIDATED
2015
8,273
249
–
653
9,175
2014
6,881
342
542
483
8,248
150 / A Year of Delivery
7. FINANCIAL REPORT 34. CONSOLIDATED ENTITY’S SUBSIDIARIES, ASSOCIATES AND INTERESTS
IN JOINT OPERATIONS
The consolidated financial statements include the financial statements of the Company and the subsidiaries
listed below.
COUNTRY OF
INCORPORATION OWNERSHIP INTEREST
2015
2014
Parent Entity
Whitehaven Coal Limited
Subsidiaries
Whitehaven Coal Mining Limited
Namoi Mining Pty Ltd
Namoi Agriculture & Mining Pty Ltd
Betalpha Pty Ltd
Betalpha Unit Trust
Tarrawonga Coal Pty Ltd
Whitehaven Coal Holdings Pty Ltd
Whitehaven Coal Infrastructure Pty Ltd
Narrabri Coal Pty Ltd
Narrabri Coal Operations Pty Ltd
Narrabri Coal Sales Pty Ltd
Creek Resources Pty Ltd
Werris Creek Coal Sales Pty Ltd
Werris Creek Coal Pty Ltd
WC Contract Hauling Pty Ltd
Whitehaven Blackjack Pty Ltd
Whitehaven Project Pty Ltd
Whitehaven Employee Share Plan Pty Ltd
Aston Resources Limited
Aston Coal 2 Pty Ltd
Aston Coal 3 Pty Ltd
Maules Creek Coal Pty Ltd
Boardwalk Resources Limited
Boardwalk Coal Management Pty Ltd
Boardwalk Coal Marketing Pty Ltd
Boardwalk Sienna Pty Ltd
Boardwalk Monto Pty Ltd
Boardwalk Dingo Pty Ltd
Boardwalk Ferndale Pty Ltd
Coalworks Limited
Yarrawa Coal Pty Ltd
Loyal Coal Pty Ltd
Ferndale Coal Pty Ltd
Coalworks (Oaklands North) Pty Ltd
CWK Nominees Pty Ltd
Oaklands Land Pty Ltd
Coalworks (Vickery South ) Pty Ltd
Coalworks Vickery South Operations Pty Ltd
Vickery South Marketing Pty Ltd
Vickery South Operations Pty Ltd
Vickery Pty Ltd
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
92.5%
92.5%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
92.5%
92.5%
100%
100%
100%
100%
100%
100%
100%
100%
Whitehaven Coal Annual Report 2015 / 151
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY NOTES TO THE FINANCIAL STATEMENTS
34. CONSOLIDATED ENTITY’S SUBSIDIARIES, ASSOCIATES AND INTERESTS
IN JOINT OPERATIONS (CONTINUED)
The consolidated financial statements include a share of the financial statements of the joint operations listed below.
Joint Operations
Tarrawonga Coal Project Joint Venture
Narrabri Coal Joint Venture
Maules Creek Joint Venture
Dingo Joint Venture
Ferndale Joint Venture
Boggabri-Maules Creek Rail Spur Joint Venture
Tarrawonga Coal Sales Pty Ltd1
Maules Creek Marketing Pty Ltd1
Boggabri-Maules Creek Rail Pty Ltd1
COUNTRY OF
INCORPORATION OWNERSHIP INTEREST
2015
2014
70%
70%
75%
70%
94%
39%
70%
75%
39%
70%
70%
75%
70%
94%
39%
70%
75%
39%
Australia
Australia
Australia
1. The joint operations above operate as the sales and marketing vehicles or manager of the related unincorporated joint operations and require joint consent
from all joint venture partners on all significant management and financial decisions. As such the group recognises its share of assets, liabilities, revenues
and expenses of the above entities as joint operations under AASB11.
The consolidated entity has included its share of the above unincorporated joint operations’ assets, liabilities, revenue
and expenses in the consolidated financial statements. The amounts set out below are included in the 30 June 2015
consolidated financial statements under their respective categories.
IN THOUSANDS OF AUD ($’000)
Statement of comprehensive income
Operating and administration expenses
Current assets
Cash and cash equivalents
Trade and other receivables
Inventory
TOTAL CURRENT ASSETS
Non-current assets
Property, plant and equipment
Exploration and evaluation
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
Current liabilities
Trade and other payables
Provisions current
TOTAL CURRENT LIABILITIES
Non-current liabilities
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
Guarantees
2015
2014
209,852
228,270
28,271
21,328
64,391
113,990
25,893
6,887
30,542
63,322
1,357,533
1,045,661
24,616
4,257
28,739
4,257
1,386,406
1,078,657
1,500,396
1,141,979
67,653
102,829
2,017
314
69,670
103,143
33,389
33,389
19,737
19,737
103,059
122,880
The Joint Ventures provided bank guarantees to various parties
35,660
74,601
Capital expenditure commitments – Plant and equipment and intangibles
Contracted but not provided for and payable:
Within one year
One year or later and no later than five years
152 / A Year of Delivery
21,483
123,651
–
–
21,483
123,651
7. FINANCIAL REPORT 35. EARNINGS/(LOSS) PER SHARE
Basic Earnings/(Loss) Per Share
The calculation of basic earnings/(loss) per share at 30 June 2015 is based on the profit/(loss) attributable to ordinary
shareholders and a weighted average number of ordinary shares outstanding during the year calculated as follows:
Profit/(loss) attributable to ordinary shareholders
Net loss attributable to ordinary shareholders
Weighted average number of ordinary shares
Issued ordinary shares at 1 July
Effect of shares issued during the year
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES AT 30 JUNE
CONSOLIDATED
2015
$’000
2014
$’000
(330,625)
(38,385)
000’S
000’S
991,740
991,673
129
5
991,869
991,678
BASIC LOSS PER SHARE ATTRIBUTABLE TO ORDINARY SHAREHOLDERS (CENTS)
(33.3)
(3.9)
Diluted Earnings/(Loss) Per Share
The calculation of diluted earnings/(loss) per share at 30 June 2015 is based on the profit/(loss) attributable to ordinary
shareholders and a weighted average number of ordinary shares outstanding adjusted for the diluting impact of
potential equity instruments calculated as follows:
Profit/(loss) attributable to ordinary shareholders (diluted)
Net loss attributable to ordinary shareholders (diluted)
Weighted average number of ordinary shares (diluted)
Weighted average number of ordinary shares (basic)
Effect of share options on issue
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES (DILUTED)
DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY
SHAREHOLDERS (CENTS)
36. AUDITORS’ REMUNERATION
IN AUD ($)
Audit services
Auditors of the Company – Ernst & Young
Audit and review of statutory financial statements current year
Audit of joint ventures
Non audit services
Auditors of the Company – Ernst & Young
Taxation services
Other non-audit services
Review of National Greenhouse Energy Reporting Act requirements
Assurance services for refinancing
Other assurance services
CONSOLIDATED
2015
$’000
2014
$’000
(330,625)
(38,385)
000’S
000’S
991,869
991,678
–
–
991,869
991,678
(33.3)
(3.9)
CONSOLIDATED
2015
2014
652,200
688,500
373,478
305,400
1,025,678
993,900
126,962
–
65,000
149,253
64,849
31,389
299,134
–
–
13,300
555,945
193,942
Whitehaven Coal Annual Report 2015 / 153
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY
NOTES TO THE FINANCIAL STATEMENTS
37. PARENT ENTITY INFORMATION
Information Relating to Whitehaven Coal Limited
IN THOUSANDS OF AUD ($’000)
Current assets
TOTAL ASSETS
Current liabilities
TOTAL LIABILITIES
Issued capital
Retained earnings
Share based payments reserve
TOTAL SHAREHOLDERS’ EQUITY
Profit / (loss) of the parent entity
Total comprehensive income of the parent entity
38. DEED OF CROSS GUARANTEE
COMPANY
2015
6,886
2014
140,979
2,790,877
3,383,387
42,331
42,331
6,219
6,219
3,275,296
3,275,299
(564,384)
(38,617)
37,634
72,625
2,748,546
3,309,307
(563,186)
(563,186)
2,988
2,988
Pursuant to ASIC Class Order 98/1418 (as amended) dated 13 August 1998, the wholly-owned subsidiaries listed below
are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports, and
directors’ reports.
It is a condition of the Class Order that the Company and each of the subsidiaries enter into a Deed of Cross Guarantee.
The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of
winding up of any of the subsidiaries under certain provisions of the Corporations Act 2001.If a winding up occurs under
other provisions of the Act, the Company will only be liable in the event that after six months any creditor has
not been paid in full. The subsidiaries have also given similar guarantees in the event that the Company is wound up.
The subsidiaries subject to the Deed are:
Whitehaven Coal Mining Limited
Namoi Mining Pty Ltd
Betalpha Pty Ltd
Tarrawonga Coal Pty Ltd
Whitehaven Coal Holdings Pty Ltd
Whitehaven Coal Infrastructure Pty Ltd
Narrabri Coal Pty Ltd
Narrabri Coal Operations Pty Ltd
Narrabri Coal Sales Pty Ltd
Creek Resources Pty Ltd
Werris Creek Coal Sales Pty Ltd
Werris Creek Coal Pty Ltd
WC Contract Hauling Pty Ltd
Whitehaven Blackjack Pty Ltd
Maules Creek Coal Pty Ltd
Boardwalk Resources Limited
Boardwalk Coal Management Pty Ltd
Boardwalk Coal Marketing Pty Ltd
Boardwalk Sienna Pty Ltd
Boardwalk Monto Pty Ltd
Boardwalk Dingo Pty Ltd
Boardwalk Ferndale Pty Ltd
Coalworks Limited
Yarrawa Coal Pty Ltd
Coalworks (Oaklands North) Pty Ltd
CWK Nominees Pty Ltd
Oaklands Land Pty Ltd
Coalworks (Vickery South) Pty Ltd
Whitehaven Employee Share Plan Pty Ltd
Coalworks Vickery South Operations Pty Ltd
Whitehaven Project Pty Ltd
Aston Resources Limited
Aston Coal 2 Pty Ltd
Aston Coal 3 Pty Ltd
Vickery South Marketing Pty Ltd
Vickery South Operations Pty Ltd
Vickery Pty Ltd
The Company and each of the relevant subsidiaries entered into the deed on 27 June 2008 with subsequent
assumption deeds entered into on 27 June 2012 and 25 June 2013.
The Deed of Cross Guarantee includes the Company and subsidiaries which are included within the statement
of comprehensive income and statement of financial position of the consolidated entity.
154 / A Year of Delivery
7. FINANCIAL REPORT
The consolidated statement of comprehensive income and statement of financial position of the entities that are
members of the Closed Group are as follows:
IN THOUSANDS OF AUD ($’000)
Statement of comprehensive income
(Loss)/profit before tax
Income tax benefit
(LOSS)/PROFIT BEFORE TAX
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Net movement on cash flow hedges
Income tax effect
OTHER COMPREHENSIVE (LOSS)/INCOME FOR THE PERIOD, NET OF TAX
CLOSED GROUP
2015
2014
(483,317)
(56,334)
140,592
17,949
(342,725)
(38,385)
(1,507)
452
(1,055)
4,351
(1,305)
3,046
TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE PERIOD, NET OF TAX
(343,780)
(35,339)
Statement of financial position
Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments
TOTAL CURRENT ASSETS
Trade and other receivables
Investments
Property, plant and equipment
Exploration and evaluation
Intangible assets
Deferred tax assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
Liabilities
Trade and other payables
Interest bearing loans and borrowings
Employee benefits
Current tax payable
Provisions
Derivative financial instruments
TOTAL CURRENT LIABILITIES
Non-current liabilities
Interest bearing loans and borrowings
Deferred tax liabilities
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
102,269
103,404
89,892
162
103,043
72,614
61,122
–
295,727
236,779
24,176
37
29,672
568
3,538,947
3,384,640
197,191
19,954
111,115
522,759
105,843
–
3,891,420
4,043,482
4,187,147
4,280,261
147,421
21,750
14,055
42,331
7,380
2,136
155,687
33,084
12,900
6,219
22,995
466
235,073
231,351
1,016,481
755,308
–
72,782
29,931
59,358
1,089,263
844,597
1,324,336
1,075,948
2,862,811
3,204,313
Whitehaven Coal Annual Report 2015 / 155
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY NOTES TO THE FINANCIAL STATEMENTS
39. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS
i.
Changes in Accounting Policy and Disclosures
The accounting policies adopted in the preparation of the consolidated financial statements are consistent with those
of the previous financial year, except for the adoption of new standards and interpretations effective as of 1 July 2014.
Several amendments apply for the first time in the current year. However, they do not impact the annual consolidated
financial statements of the Group or the interim condensed consolidated financial statements of the Group.
AASB 2012-3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities
AASB 2012-3 adds application guidance to AASB 132 Financial Instruments: Presentation to address inconsistencies
identified in applying some of the offsetting criteria of AASB 132, including clarifying the meaning of “currently has
a legally enforceable right of set-off” and that some gross settlement systems may be considered equivalent to net
settlement. The application of the standard did not have a material effect on the Group.
AASB 2013-4 Amendments to Australian Accounting Standards – Novation of Derivatives and Continuation
of Hedge Accounting
AASB 2013-4 amends AASB 139 to permit the continuation of hedge accounting in specified circumstances where
a derivative, which has been designated as a hedging instrument, is novated from one counterparty to a central
counterparty as a consequence of laws or regulations. The application of the standard did not have a material effect
on the Group.
AASB 2014-1 Part A – Annual Improvements 2010–2012 Cycle
This standard sets out amendments to Australian Accounting Standards arising from the issuance by the International
Accounting Standards Board (IASB) of International Financial Reporting Standards (IFRSs) Annual Improvements
to IFRSs 2010–2012 Cycle and Annual Improvements to IFRSs 2011–2013 Cycle.
Annual Improvements to IFRSs 2010–2012 Cycle addresses the following items:
— AASB 2 – Clarifies the definition of ‘vesting conditions’ and ‘market condition’ and introduces the definition
of ‘performance condition’ and ‘service condition’
— AASB 3 – Clarifies the classification requirements for contingent consideration in a business combination
by removing all references to AASB 137
— AASB 8 – Requires entities to disclose factors used to identify the entity’s reportable segments when operating
segments have been aggregated. An entity is also required to provide a reconciliation of total reportable segments’
asset to the entity’s total assets
— AASB 116 & AASB 138 – Clarifies that the determination of accumulated depreciation does not depend on the
selection of the valuation technique and that it is calculated as the difference between the gross and net
carrying amounts
— AASB 124 defines a management entity providing KMP services as a related party of the reporting entity. The
amendments added an exemption from the detailed disclosure requirements in paragraph 17 of AASB 124 for
KMP services provided by a management entity. Payments made to a management entity in respect of KMP
services should be separately disclosed.
AASB 2014-1 Part A – Annual Improvements 2011–2013 Cycle
These improvements address the following items:
— AASB13 – Clarifies that the portfolio exception in paragraph 52 of AASB 13 applies to all contracts within the scope
of AASB 139 or AASB 9, regardless of whether they meet the definitions of financial assets or financial liabilities as
defined in AASB 132.
ii.
Accounting Standards and Interpretations issued but not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not
yet effective and have not been adopted by the Group for the annual reporting period ended 30 June 2015 are
outlined below:
AASB 9 Financial Instruments
AASB 9 (December 2014) is a new Principal standard which replaces AASB 139. This new Principal version supersedes
AASB 9 issued in December 2009 (as amended) and AASB 9 (issued in December 2010) and includes a model for
classification and measurement, a single, forward-looking ‘expected loss’ impairment model and a substantially-
reformed approach to hedge accounting.
AASB 9 is effective for annual periods beginning on or after 1 January 2018. However, the Standard is available for
early application. The own credit changes can be early applied in isolation without otherwise changing the accounting
for financial instruments. The final version of AASB 9 introduces a new expected-loss impairment model that will
require more timely recognition of expected credit losses. Specifically, the new Standard requires entities to account
156 / A Year of Delivery
7. FINANCIAL REPORT for expected credit losses from when financial instruments are first recognised and to recognise full lifetime expected
losses on a more timely basis. Amendments to AASB 9 (December 2009 & 2010 editions and AASB 2013-9) issued in
December 2013 included the new hedge accounting requirements, including changes to hedge effectiveness testing,
treatment of hedging costs, risk components that can be hedged and disclosures. AASB 9 includes requirements for a
simpler approach for classification and measurement of financial assets compared with the requirements of AASB 139.
The main changes are described below:
— Financial assets that are debt instruments will be classified based on (1) the objective of the entity’s business
model for managing the financial assets; (2) the characteristics of the contractual cash flows
— Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments
that are not held for trading in other comprehensive income. Dividends in respect of these investments that are
a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal
of the instrument
— Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing
so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring
assets or liabilities, or recognising the gains and losses on them, on different bases
— Where the fair value option is used for financial liabilities the change in fair value is to be accounted for as follows:
> The change attributable to changes in credit risk are presented in other comprehensive income (OCI)
> The remaining change is presented in profit or loss
AASB 9 also removes the volatility in profit or loss that was caused by changes in the credit risk of liabilities elected
to be measured at fair value. This change in accounting means that gains caused by the deterioration of an entity’s
own credit risk on such liabilities are no longer recognised in profit or loss.
Consequential amendments were also made to other standards as a result of AASB 9, introduced by AASB 2009-11
and superseded by AASB 2010-7, AASB 2010-10 and AASB 2014-1 – Part E. AASB 2014-7 incorporates the
consequential amendments arising from the issuance of AASB 9 in Dec 2014. AASB 2014-8 limits the application
of the existing versions of AASB 9 (AASB 9 (December 2009) and AASB 9 (December 2010)) from 1 February 2015
and applies to annual reporting periods beginning on after 1 January 2015.
The Group has not yet determined the potential impact of the amendments on the consolidated entity’s financial report.
This standard applies to annual reporting periods beginning on or after 1 January 2018.
AASB 2013-9 Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and
Financial Instruments, Part C
Part C makes amendments to a number of Australian Accounting Standards, including incorporating Chapter 6 Hedge
Accounting into AASB 9 Financial Instruments. This standard applies to annual reporting periods beginning on or after
1 January 2015.
AASB 2014-4 Clarification of Acceptable Methods of Depreciation and Amortisation
AASB 116 and AASB 138 both establish the principle for the basis of depreciation and amortisation as being the
expected pattern of consumption of the future economic benefits of an asset. The IASB has clarified that the use of
revenue-based methods to calculate the depreciation of an asset is not appropriate because revenue generated by an
activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits
embodied in the asset. The amendment also clarified that revenue is generally presumed to be an inappropriate basis
for measuring the consumption of the economic benefits embodied in an intangible asset. This presumption, however,
can be rebutted in certain limited circumstances. This standard applies to annual reporting periods beginning on or
after 1 January 2016.
AASB 15 Revenue from Contracts with Customers
In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers, which replaces IAS 11 Construction
Contracts, IAS 18 Revenue and related Interpretations (IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements
for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers and SIC-31 Revenue—Barter
Transactions Involving Advertising Services).
The core principle of IFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those
goods or services. An entity recognises revenue in accordance with that core principle by applying the following steps:
— Step 1: Identify the contract(s) with a customer
— Step 2: Identify the performance obligations in the contract
— Step 3: Determine the transaction price
— Step 4: Allocate the transaction price to the performance obligations in the contract
— Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
Whitehaven Coal Annual Report 2015 / 157
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39. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)
This standard applies to annual reporting periods beginning on or after 1 January 2017 and early application
is permitted. The Group is currently evaluating the impact of the new standard.
AASB 2014-5 incorporates the consequential amendments to a number Australian Accounting Standards
(including Interpretations) arising from the issuance of AASB 15.
AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture
AASB 2014-10 amends AASB 10 Consolidated Financial Statements and AASB 128 to address an inconsistency
between the requirements in AASB 10 and those in AASB 128 (August 2011), in dealing with the sale or contribution
of assets between an investor and its associate or joint venture. The amendments require:
— a full gain or loss to be recognised when a transaction involves a business (whether it is housed in a subsidiary
or not); and
— a partial gain or loss to be recognised when a transaction involves assets that do not constitute a business,
even if these assets are housed in a subsidiary.
AASB 2014-10 also makes an editorial correction to AASB 10. AASB 2014-10 applies to annual reporting periods
beginning on or after 1 January 2016. Early adoption permitted.
AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvements to Australian Accounting
Standards 2012–2014 Cycle
The subjects of the principal amendments to the Standards are set out below:
AASB 7 Financial Instruments: Disclosures:
— Servicing contracts – clarifies how an entity should apply the guidance in paragraph 42C of AASB 7 to a servicing
contract to decide whether a servicing contract is ‘continuing involvement’ for the purposes of applying the
disclosure requirements in paragraphs 42E–42H of AASB 7.
— Applicability of the amendments to AASB 7 to condensed interim financial statements – clarify that the additional
disclosure required by the amendments to AASB 7 Disclosure–Offsetting Financial Assets and Financial Liabilities
is not specifically required for all interim periods. However, the additional disclosure is required to be given in
condensed interim financial statements that are prepared in accordance with AASB 134 Interim Financial Reporting
when its inclusion would be required by the requirements of AASB 134.
AASB 119 Employee Benefits:
— Discount rate: regional market issue – clarifies that the high quality corporate bonds used to estimate the discount
rate for post-employment benefit obligations should be denominated in the same currency as the liability. Further
it clarifies that the depth of the market for high quality corporate bonds should be assessed at the currency level.
AASB 134 Interim Financial Reporting:
— Disclosure of information ‘elsewhere in the interim financial report’ – amends AASB 134 to clarify the meaning of
disclosure of information ‘elsewhere in the interim financial report’ and to require the inclusion of a cross-reference
from the interim financial statements to the location of this information. This standard applies to annual reporting
periods beginning on or after 1 January 2016.
AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101
The Standard makes amendments to AASB 101 Presentation of Financial Statements arising from the IASB’s Disclosure
Initiative project. The amendments are designed to further encourage companies to apply professional judgment in
determining what information to disclose in the financial statements. For example, the amendments make clear that
materiality applies to the whole of financial statements and that the inclusion of immaterial information can inhibit the
usefulness of financial disclosures. The amendments also clarify that companies should use professional judgment
in determining where and in what order information is presented in the financial disclosures. This standard applies
to annual reporting periods beginning on or after 1 January 2016.
158 / A Year of Delivery
7. FINANCIAL REPORT DIRECTORS’
DECLARATION
In accordance with a resolution of the directors of Whitehaven Coal Limited, I state that:
In the opinion of the Directors:
a) The financial statements and notes of Whitehaven Coal Limited are in accordance with the Corporations
Act 2001, including:
i. Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and of its
performance for the year ended on that date; and
ii. Complying with Australian Accounting Standards (including the Australian Accounting Interpretations)
and the Corporations Regulations 2001;
b)
The financial statements and notes also comply with International Financial Reporting Standards as disclosed
in note 2; and
c) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
d)
This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ending 30 June 2015.
e) As at the date of this declaration, there are reasonable grounds to believe that the members of the Closed
Group identified in note 38 will be able to meet any obligations or liabilities to which they are or may
become subject, by virtue of the Deed of Cross Guarantee.
On behalf of the Board
Mark Vaile
Chairman
Sydney
13th August 2015
Whitehaven Coal Annual Report 2015 / 159
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY AUDITOR’S REPORT
Ernst & Young
680 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Independent auditor's report to the members of Whitehaven Coal
Limited
Report on the financial report
We have audited the accompanying financial report of Whitehaven Coal Limited, which comprises the
consolidated statement of financial position as at 30 June 2015, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, notes comprising a summary of significant accounting
policies and other explanatory information, and the directors' declaration of the consolidated entity
comprising the company and the entities it controlled at the year's end or from time to time during the
financial year.
Directors' responsibility for the financial report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal controls as the directors determine are necessary to enable the preparation of
the financial report that is free from material misstatement, whether due to fraud or error. In Note 2a),
the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial statements comply with International Financial Reporting Standards.
Auditor's responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal controls relevant to the entity's
preparation and fair presentation of the financial report in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by the directors, as well as
evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
160 / A Year of Delivery
107
7. FINANCIAL REPORT
Independence
In conducting our audit we have complied with the independence requirements of the Corporations Act
2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a
copy of which is included in the directors’ report. We confirm that the Auditor’s Independence
Declaration would be in the same terms if given to the directors as at the time of this auditor’s report.
Opinion
In our opinion:
a.
the financial report of Whitehaven Coal Limited is in accordance with the Corporations Act
2001, including:
i
ii
giving a true and fair view of the consolidated entity's financial position as at 30 June
2015 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations
2001; and
b.
the financial report also complies with International Financial Reporting Standards as
disclosed in Note 2a).
Report on the remuneration report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June
2015. The directors of the company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Whitehaven Coal Limited for the year ended 30 June
2015, complies with section 300A of the Corporations Act 2001.
Ernst & Young
Trent van Veen
Partner
Sydney
13 August 2015
108
Whitehaven Coal Annual Report 2015 / 161
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY
ASX ADDITIONAL
INFORMATION
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed
elsewhere in this report is set out below.
SHAREHOLDINGS
Substantial Shareholders
The number of shares recorded as owned by substantial shareholders and their associates in the most recent
substantial shareholder notices advised to the Company by these shareholders are set out below:
SHAREHOLDER
Farallon Capital
Management LLC
Fritz Kundrun*
Hans Mende*
AMCI Group*
Prudential PLC
Martua Sitorus
Manning & Napier
Advisors LLC
Kerry Group Limited
PERCENTAGE
OF CAPITAL HELD
NUMBER OF
ORDINARY
SHARES HELD
16.61%
12.09%
11.13%
8.40%
8.00%
5.82%
6.04%
5.00%
170,414,721
124,042,252
114,190,086
86,170,596
82,085,909
59,673,423
61,961,120
51,323,822
DATE OF
SUBSTANTIAL
SHAREHOLDER
NOTICE
19 June 2013
17 Oct 2014
17 Oct 2014
17 Oct 2014
22 Oct 2014
20 June 2013
23 Jan 2015
19 May 2014
* The holdings of Mr Kundrun and Mr Mende both include the 86,170,596 shares owned by AMCI Group.
Voting Rights
Ordinary Shares
Refer to note 26 in the financial statements
Options
There are no voting rights attached to the options.
Distribution of Equity Security Holders
CATEGORY
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
NUMBER OF EQUITY
SECURITY HOLDERS
1,773
2,581
1,118
1,233
124
6,829
There are 5 holders of options over ordinary shares. Refer to note 32 in the financial statements.
The number of shareholders holding less than a marketable parcel of ordinary shares is 791.
162 / A Year of Delivery
7. FINANCIAL REPORT Securities exchange
The Company is listed on the Australian Securities Exchange.
Other information
Whitehaven Coal Limited, incorporated and domiciled in Australia, is a publicly listed company limited by shares.
TWENTY LARGEST SHAREHOLDERS (LEGAL OWNERSHIP)
NAME
J P Morgan Nominees Australia Limited
Citicorp Nominees Pty Ltd
HSBC Custody Nominees (Australia) Limited – GSCO ECA
HSBC Custody Nominees (Australia) Limited
National Nominees Limited
AET SFS Pty Ltd – Boardwalk Res Inv P/C
Ranamok Pty Ltd – Plummer Family A/C
BNP Paribas Noms Pty Ltd – DRP
HFTT Pty Ltd – Haggarty Family A/C
HSBC Custody Nominees (Australia) Limited – A/C 2
Uob Kay Hian (Hong Kong) Limited – Clients A/C
Mr Michael Jack Quillen – Quillen Family A/C
Vesade Pty Ltd
Citicorp Nominees Pty Limited – Colonial First State Inv A/C
HSBC Custody Nominees (Australia) Limited GSCO ECA
HSBC Custody Nominees (Australia) Limited – A/C 3
Argo Investments Limited
Invia Custodian Pty Limited – AJ & LM Davies Family A/C
UBS Wealth Management Australia Nominees Pty Ltd
Wendmar Pty Limited – Mark Vaile Family A/C
This information is current as at 7 August 2015.
NUMBER OF
ORDINARY
SHARES HELD
PERCENTAGE
OF CAPITAL HELD
193,894,454
172,489,065
168,450,924
126,318,839
119,655,325
26,678,979
22,208,226
20,483,068
20,018,869
15,106,876
13,502,377
6,135,000
5,795,052
5,002,750
4,409,572
3,710,737
3,656,652
3,500,000
3,276,217
2,524,635
936,817,617
18.90
16.81
16.42
12.31
11.66
2.60
2.16
2.00
1.95
1.47
1.32
0.60
0.56
0.49
0.43
0.36
0.36
0.34
0.32
0.25
91.31
Whitehaven Coal Annual Report 2015 / 163
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY
GLOSSARY OF TERMS
AND ABBREVIATIONS
ARTC
Australian Rail Track Corporation
ASEAN
Association of Southeast Asian Nations
CHPP
Coal Handling Preparation Plant
EBITDA
Earnings Before Interest, Taxation, Depreciation and Amortisation
FEC
FOB
Forward Exchange Contract
Free-on-Board
FVLCD
Fair Value Less Costs of Disposal
JORC
Joint Ore Resources Committee
KMP
Key Management Personnel
LTI
LW
Long Term Incentive
Longwall
MRRT
Minerals Resource Rent Tax
Mt
MTI
Million tonnes
Medium Term Incentive
Mtpa
Million tonnes per annum
NCIG
Newcastle Coal Infrastructure Group
PWCS
Port Waratah Coal Services
ROM
Run of Mine
STI
t
TAL
TFR
Short Term Incentive
Tonne
Tonne Axle Loads
Total Fixed Remuneration
TRIFR
Total Recordable Injury Frequency Rate
TSR
Total Shareholder Return
164 / A Year of Delivery
7. FINANCIAL REPORT CORPORATE
DIRECTORY
DIRECTORS
The Hon. Mark Vaile
Chairman
John Conde
Deputy Chairman
Paul Flynn
Managing Director and CEO
Tony Haggarty
Non-executive Director
Christine McLoughlin
Independent
Non-executive Director
Raymond Zage
Non-executive Director
Dr Julie Beeby
Independent
Non-executive Director
COMPANY SECRETARY
Timothy Burt
REGISTERED
AND PRINCIPAL
ADMINISTRATIVE
OFFICE
Level 28, 259 George Street
Sydney NSW 2000
P +61 2 8507 9700
F +61 2 8507 9701
AUSTRALIAN
BUSINESS NUMBER
ABN 68 124 425 396
SHARE REGISTRY
Computershare Investor
Services Pty Ltd
GPO Box 523
Brisbane QLD 4001
P 1300 850 505
F +61 7 3237 2100
COUNTRY OF
INCORPORATION
Australia
WEB ADDRESS
STOCK EXCHANGE LISTING
www.whitehavencoal.com.au
Australian Securities Exchange Ltd
ASX Code: WHC
AUDITOR
Ernst & Young
Ernst & Young Centre
680 George Street
Sydney NSW 2000
P +61 2 9248 5555
F +61 2 9248 5199
Whitehaven Coal Annual Report 2015 / 165
Whitehaven Coal Annual Report 2015 / 165
5RESOURCES AND RESERVES4SUSTAINABILITY1OVERVIEWFINANCIAL REPORT6LEADERSHIP AND MANAGEMENT73OPERATIONS2STRATEGY NOTES
Whitehaven Coal
Level 28, 259 George Street
Sydney NSW 2000
P +61 2 8507 9700
whitehavencoal.com.au