I'm no expert but I'm a user of coinbase and noticed there's a mistake in ScripterRon's answer.
The first transaction moves the coins from an address controlled by
Coinbase to a new address controlled by you. The second transaction
then moves the coins from this address to the address you specified in
the send request.
This is not true from the usage that I've done. When I did the "send" in coinbase, a transaction ultimately went from a coinbase-controlled directly to the destination address and never went through an address controlled by me (e.g. visible under Tools > Addresses).
Some more details from what I saw tracing where the money I spent came from: coinbase had made a series of transactions starting from an account that was holding 0.5 BTC since 23 days. On the day of my transaction, a lot of transactions happened simultaneously coming from that 0.5 BTC master account and funneling through to multiple coinbase-controlled addresses to finally include the destination address I had specified with the right amount.
And their algorithm seems to have some losses because there was a small surplus at the end, and they ended up putting 0.00000866 BTC in an address. Not sure how it will make sense for them to re-use this amount later though, with the current transaction fee costs.