☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Western Australia, Australia
|
98-1026700
|
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification Number)
|
263 Tresser Boulevard, Suite 1100
|
Lot 22, Mason Road,
|
|
Stamford, Connecticut 06901
|
Kwinana Beach, WA, 6167
|
|
Australia
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐ (Do not check if a smaller reporting company)
|
Smaller reporting company
|
☐
|
Emerging growth company
|
☐
|
Page
|
||
PART I – FINANCIAL INFORMATION
|
||
Item 1.
|
3
|
|
Item 2.
|
23
|
|
Item 3.
|
33
|
|
Item 4.
|
34
|
|
PART II – OTHER INFORMATION
|
||
Item 1.
|
35
|
|
Item 1A.
|
35
|
|
Item 2.
|
35
|
|
Item 3.
|
35
|
|
Item 4.
|
35
|
|
Item 5.
|
35
|
|
Item 6.
|
36
|
|
37
|
Page
No.
|
|
4
|
|
5
|
|
6
|
|
7
|
|
8
|
Three Months
Ended March 31,
|
||||||||
2018
|
2017
|
|||||||
Net sales
|
$
|
442
|
$
|
378
|
||||
Cost of goods sold
|
327
|
315
|
||||||
Gross profit
|
115
|
63
|
||||||
Selling, general and administrative expenses
|
(76
|
)
|
(67
|
)
|
||||
Restructuring
|
—
|
1
|
||||||
Impairment loss
|
(25
|
)
|
—
|
|||||
Income (loss) from operations
|
14
|
(3
|
)
|
|||||
Interest expense
|
(49
|
)
|
(46
|
)
|
||||
Interest income
|
8
|
1
|
||||||
Other expense, net
|
(9
|
)
|
(8
|
)
|
||||
Loss from continuing operations before income taxes
|
(36
|
)
|
(56
|
)
|
||||
Income tax (provision) benefit
|
(5
|
)
|
3
|
|||||
Net loss from continuing operations
|
(41
|
)
|
(53
|
)
|
||||
Income from discontinued operations, net of tax
|
—
|
15
|
||||||
Net loss
|
(41
|
)
|
(38
|
)
|
||||
Net income attributable to noncontrolling interest
|
3
|
3
|
||||||
Net loss attributable to Tronox Limited
|
$
|
(44
|
)
|
$
|
(41
|
)
|
||
Net income (loss) per share, basic and diluted:
|
||||||||
Continuing operations
|
$
|
(0.36
|
)
|
$
|
(0.48
|
)
|
||
Discontinued operations
|
—
|
0.13
|
||||||
Net loss per share, basic and diluted
|
$
|
(0.36
|
)
|
$
|
(0.35
|
)
|
||
Weighted average shares outstanding, basic and diluted (in thousands)
|
122,327
|
116,815
|
||||||
Cash dividends per share, Class A and Class B
|
$
|
0.045
|
$
|
0.045
|
Three Months Ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
Net loss
|
$
|
(41
|
)
|
$
|
(38
|
)
|
||
Other comprehensive income:
|
||||||||
Foreign currency translation adjustments
|
59
|
24
|
||||||
Pension and postretirement plans:
|
||||||||
Amortization of unrecognized actuarial losses, net of taxes of less than $1 million in each of the three months ended March 31, 2018 and 2017
|
1
|
1
|
||||||
Unrealized losses on derivative financial instruments (no tax impact)
|
—
|
(2
|
)
|
|||||
Other comprehensive income
|
60
|
23
|
||||||
Total comprehensive income (loss)
|
19
|
(15
|
)
|
|||||
Comprehensive income attributable to noncontrolling interest:
|
||||||||
Net income
|
3
|
3
|
||||||
Foreign currency translation adjustments
|
15
|
6
|
||||||
Comprehensive income attributable to noncontrolling interest
|
18
|
9
|
||||||
Comprehensive income (loss) attributable to Tronox Limited
|
$
|
1
|
|
$
|
(24
|
)
|
March 31,
2018
|
December 31,
2017
|
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$
|
1,074
|
$
|
1,116
|
||||
Restricted cash
|
655
|
653
|
||||||
Accounts receivable, net of allowance for doubtful accounts
|
329
|
336
|
||||||
Inventories, net
|
470
|
473
|
||||||
Prepaid and other assets
|
55
|
53
|
||||||
Income taxes receivable
|
9
|
8
|
||||||
Assets held for sale
|
31
|
—
|
||||||
Total current assets
|
2,623
|
2,639
|
||||||
Noncurrent Assets
|
||||||||
Property, plant and equipment, net
|
1,120
|
1,115
|
||||||
Mineral leaseholds, net
|
896
|
885
|
||||||
Intangible assets, net
|
192
|
198
|
||||||
Inventories, net
|
—
|
3
|
||||||
Other long-term assets
|
27
|
24
|
||||||
Total assets
|
$
|
4,858
|
$
|
4,864
|
||||
LIABILITIES AND EQUITY
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$
|
146
|
$
|
165
|
||||
Accrued liabilities
|
143
|
163
|
||||||
Long-term debt due within one year
|
22
|
22
|
||||||
Income taxes payable
|
1
|
3
|
||||||
Liabilities held for sale
|
8
|
—
|
||||||
Total current liabilities
|
320
|
353
|
||||||
Noncurrent Liabilities
|
||||||||
Long-term debt, net
|
3,124
|
3,125
|
||||||
Pension and postretirement healthcare benefits
|
100
|
103
|
||||||
Asset retirement obligations
|
81
|
79
|
||||||
Long-term deferred tax liabilities
|
183
|
171
|
||||||
Other long-term liabilities
|
17
|
18
|
||||||
Total liabilities
|
3,825
|
3,849
|
||||||
Commitments and Contingencies
|
||||||||
Shareholders’ Equity
|
||||||||
Tronox Limited Class A ordinary shares, par value $0.01 — 93,838,329 shares issued and 93,756,873 shares outstanding at March 31, 2018 and 92,717,935 shares issued and 92,541,463 shares outstanding at December 31, 2017
|
1
|
1
|
||||||
Tronox Limited Class B ordinary shares, par value $0.01 — 28,729,280 issued and outstanding at March 31, 2018 and December 31, 2017
|
—
|
—
|
||||||
Capital in excess of par value
|
1,563
|
1,558
|
||||||
Accumulated deficit
|
(377
|
)
|
(327
|
)
|
||||
Accumulated other comprehensive loss
|
(358
|
)
|
(403
|
)
|
||||
Total Tronox Limited shareholders’ equity
|
829
|
829
|
||||||
Noncontrolling interest
|
204
|
186
|
||||||
Total equity
|
1,033
|
1,015
|
||||||
Total liabilities and equity
|
$
|
4,858
|
$
|
4,864
|
Three Months Ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net loss
|
$
|
(41
|
)
|
$
|
(38
|
)
|
||
Income from discontinued operations, net of tax
|
—
|
15
|
||||||
Net loss from continuing operations
|
$
|
(41
|
)
|
$
|
(53
|
)
|
||
Adjustments to reconcile net loss from continuing operations to net cash (used in) provided by operating activities, continuing operations:
|
||||||||
Depreciation, depletion and amortization
|
48
|
45
|
||||||
Deferred income taxes
|
3
|
(1
|
)
|
|||||
Share-based compensation expense
|
7
|
13
|
||||||
Amortization of deferred debt issuance costs and discount on debt
|
5
|
3
|
||||||
Pension and postretirement healthcare benefit expense
|
—
|
1
|
||||||
Impairment losses
|
25
|
—
|
||||||
Other, net
|
11
|
4
|
||||||
Contributions to employee pension and postretirement plans
|
(5
|
)
|
(4
|
)
|
||||
Changes in assets and liabilities:
|
||||||||
Decrease (increase) in accounts receivable, net
|
1
|
(10
|
)
|
|||||
(Increase) decrease in inventories, net
|
(9
|
)
|
26
|
|||||
(Increase) decrease in prepaid and other assets
|
(1
|
)
|
4
|
|||||
Decrease in accounts payable and accrued liabilities
|
(46
|
)
|
(23
|
)
|
||||
Decrease in taxes payable
|
(2
|
)
|
(3
|
)
|
||||
Cash (used in) provided by operating activities, continuing operations
|
(4
|
)
|
2
|
|||||
Cash Flows from Investing Activities:
|
||||||||
Capital expenditures
|
(28
|
)
|
(20
|
)
|
||||
Cash used in investing activities, continuing operations
|
(28
|
)
|
(20
|
)
|
||||
Cash Flows from Financing Activities:
|
||||||||
Repayments of long-term debt
|
(6
|
)
|
(4
|
)
|
||||
Debt issuance costs
|
(1
|
)
|
—
|
|||||
Proceeds from the exercise of warrants
|
2
|
—
|
||||||
Dividends paid
|
(6
|
)
|
(6
|
)
|
||||
Restricted stock and performance-based shares settled in cash for withholding taxes
|
(4
|
)
|
(2
|
)
|
||||
Cash used in financing activities, continuing operations
|
(15
|
)
|
(12
|
)
|
||||
Discontinued Operations:
|
||||||||
Cash provided by operating activities
|
—
|
57
|
||||||
Cash used in investing activities
|
—
|
(12
|
)
|
|||||
Net cash flows provided by discontinued operations
|
—
|
45
|
||||||
Effects of exchange rate changes on cash and cash equivalents and restricted cash
|
7
|
1
|
||||||
Net (decrease) increase in cash, cash equivalents and restricted cash
|
(40
|
)
|
16
|
|||||
Cash, cash equivalents and restricted cash at beginning of period
|
1,769
|
251
|
||||||
Cash, cash equivalents and restricted cash at end of period, continuing operations
|
$
|
1,729
|
$
|
267
|
1.
|
The Company
|
2. |
Revenue
|
Three Months Ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
North America
|
$
|
145
|
131
|
|||||
South and Central America
|
16
|
12
|
||||||
Europe, Middle-East and Africa
|
146
|
116
|
||||||
Asia Pacific
|
135
|
119
|
||||||
Total net sales
|
$
|
442
|
$
|
378
|
Three Months Ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
Pigment
|
$
|
333
|
272
|
|||||
Zircon | 61 | 50 | ||||||
Pig iron | 19 | 11 | ||||||
Feedstock and other products
|
17
|
31
|
||||||
Electrolytic
|
12
|
14
|
||||||
Total net sales
|
$
|
442
|
$
|
378
|
3. |
Discontinued Operations
|
Three Months Ended
March 31, 2017
|
||||
Net sales
|
$
|
191
|
||
Cost of goods sold
|
164
|
|||
Selling, general and administrative expenses
|
(6
|
)
|
||
Restructuring expense
|
(1
|
)
|
||
Income before income taxes
|
20
|
|||
Income tax provision
|
(5
|
)
|
||
Income from discontinued operations
|
$
|
15
|
4.
|
Assets and Liabilities Held for Sale
|
March 31,
2018
|
||||
Assets:
|
||||
Accounts receivable, net of allowance for doubtful accounts
|
$
|
9
|
||
Inventories, net
|
22
|
|||
Total assets held for sale
|
$
|
31
|
||
Liabilities:
|
||||
Accounts payable
|
$
|
3
|
||
Accrued liabilities
|
1
|
|||
Asset retirement obligations
|
4
|
|||
Total liabilities held for sale
|
$
|
8
|
5. |
Income Taxes
|
Three Months Ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
Income tax (provision) benefit
|
$
|
(5
|
)
|
$
|
3
|
|||
Loss from continuing operations before income taxes
|
$
|
(36
|
)
|
$
|
(56
|
)
|
||
Effective tax rate
|
(14
|
)%
|
5
|
%
|
6. |
Loss Per Share
|
Three Months Ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
Numerator – Basic and Diluted:
|
||||||||
Net loss from continuing operations
|
$
|
(41
|
)
|
$
|
(53
|
)
|
||
Less: Net income from continuing operations attributable to noncontrolling interest
|
3
|
3
|
||||||
Undistributed net loss from continuing operations attributable to Tronox Limited
|
(44
|
)
|
(56
|
)
|
||||
Percentage allocated to ordinary shares (1)
|
100
|
%
|
100
|
%
|
||||
Net loss from continuing operations available to ordinary shares
|
(44
|
)
|
(56
|
)
|
||||
Net income from discontinued operations available to ordinary shares
|
—
|
15
|
||||||
Net loss available to ordinary shares
|
$
|
(44
|
)
|
$
|
(41
|
)
|
||
Denominator – Basic and Diluted:
|
||||||||
Weighted-average ordinary shares (in thousands)
|
122,327
|
116,815
|
||||||
Net income (loss) per Ordinary Share (2):
|
||||||||
Basic and diluted net loss from continuing operations per ordinary share
|
$
|
(0.36
|
)
|
$
|
(0.48
|
)
|
||
Basic and diluted net income from discontinued operations per ordinary share
|
—
|
0.13
|
||||||
Basic and diluted net loss per ordinary share
|
$
|
(0.36
|
)
|
$
|
(0.35
|
)
|
(1)
|
Our participating securities do not have a contractual obligation to share in losses; therefore, when we have a net loss, none of the loss is allocated to participating securities. Consequently, for the three months ended March 31, 2018 and 2017, the two-class method did not have an effect on our net income (loss) per ordinary share calculation, and as such, dividends paid during the year did not impact this calculation.
|
(2) |
Net income (loss) loss per ordinary share amounts were calculated from exact, not rounded net loss and share information.
|
March 31, 2018
|
March 31, 2017
|
|||||||||||||||
Shares
|
Average
Exercise Price
|
Shares
|
Average
Exercise Price
|
|||||||||||||
Options
|
1,707,133
|
$
|
21.27
|
1,936,618
|
$
|
21.17
|
||||||||||
Series A Warrants (1)
|
—
|
$
|
—
|
1,432,622
|
$
|
8.51
|
||||||||||
Series B Warrants (1)
|
—
|
$
|
—
|
1,942,323
|
$
|
9.37
|
||||||||||
Restricted share units
|
5,388,754
|
$
|
12.66
|
6,965,668
|
$
|
10.69
|
(1) |
Series A Warrants were converted into Class A ordinary shares at March 31, 2017 using a rate of 6.02. Series B Warrants were converted into Class A ordinary shares at March 31, 2017 using a rate of 6.03.
|
7. |
Inventories, Net
|
March 31,
2018
|
December 31,
2017
|
|||||||
Raw materials
|
$
|
118
|
$
|
137
|
||||
Work-in-process
|
46
|
35
|
||||||
Finished goods, net
|
197
|
194
|
||||||
Materials and supplies, net (1)
|
109
|
110
|
||||||
Total
|
470
|
476
|
||||||
Less: Inventories, net – non-current
|
—
|
(3
|
)
|
|||||
Inventories, net – current
|
$
|
470
|
$
|
473
|
(1) |
Consists of processing chemicals, maintenance supplies, and spare parts, which will be consumed directly and indirectly in the production of our products.
|
8. |
Property, Plant and Equipment, Net
|
March 31,
2018
|
December 31,
2017
|
|||||||
Land and land improvements
|
$
|
100
|
$
|
95
|
||||
Buildings
|
275
|
267
|
||||||
Machinery and equipment
|
1,409
|
1,387
|
||||||
Construction-in-progress
|
102
|
103
|
||||||
Other
|
41
|
41
|
||||||
Subtotal
|
1,927
|
1,893
|
||||||
Less: accumulated depreciation
|
(807
|
)
|
(778
|
)
|
||||
Property, plant and equipment, net (1)
|
$
|
1,120
|
$
|
1,115
|
(1) |
Substantially all of these assets are pledged as collateral for our debt. See Note 12.
|
9. |
Mineral Leaseholds, Net
|
March 31, 2018
|
December 31,
2017
|
|||||||
Mineral leaseholds
|
$
|
1,325
|
$
|
1,303
|
||||
Less: accumulated depletion
|
(429
|
)
|
(418
|
)
|
||||
Mineral leaseholds, net
|
$
|
896
|
$
|
885
|
10. |
Intangible Assets, Net
|
March 31, 2018
|
December 31, 2017
|
|||||||||||||||||||||||
Gross Cost
|
Accumulated
Amortization
|
Net Carrying
Amount
|
Gross Cost
|
Accumulated
Amortization
|
Net Carrying
Amount
|
|||||||||||||||||||
Customer relationships
|
$
|
291
|
$
|
(139
|
)
|
$
|
152
|
$
|
291
|
$
|
(134
|
)
|
$
|
157
|
||||||||||
TiO2 technology
|
32
|
(11
|
)
|
21
|
32
|
(11
|
)
|
21
|
||||||||||||||||
Internal-use software
|
46
|
(27
|
)
|
19
|
45
|
(25
|
)
|
20
|
||||||||||||||||
Intangible assets, net
|
$
|
369
|
$
|
(177
|
)
|
$
|
192
|
$
|
368
|
$
|
(170
|
)
|
$
|
198
|
11. |
Accrued Liabilities
|
March 31,
2018
|
December 31,
2017
|
|||||||
Employee-related costs and benefits
|
$
|
48
|
$
|
72
|
||||
Interest
|
17
|
21
|
||||||
Sales rebates
|
21
|
19
|
||||||
Taxes other than income taxes
|
9
|
7
|
||||||
Expected loss on sale of Henderson Electrolytic Operations (see Note 4)
|
10
|
—
|
||||||
Professional fees and other
|
38
|
44
|
||||||
Accrued liabilities
|
$
|
143
|
$
|
163
|
12. |
Debt
|
Original
Principal
|
Annual
Interest Rate
|
Maturity
Date
|
March 31,
2018
|
December 31,
2017
|
|||||||||||||
New Term Loan Facility, net of unamortized discount (1) (2)
|
$
|
2,150
|
Variable
|
9/22/2024
|
$
|
2,133
|
$
|
2,138
|
|||||||||
Senior Notes due 2022 (3)
|
600
|
7.50
|
%
|
3/15/2022
|
584
|
584
|
|||||||||||
Senior Notes due 2025
|
450
|
5.75
|
%
|
9/22/2025
|
450
|
450
|
|||||||||||
Lease financing
|
20
|
19
|
|||||||||||||||
Long-term debt
|
3,187
|
3,191
|
|||||||||||||||
Less: Long-term debt due within one year
|
(22
|
)
|
(22
|
)
|
|||||||||||||
Debt issuance costs
|
(41
|
)
|
(44
|
)
|
|||||||||||||
Long-term debt, net
|
$
|
3,124
|
$
|
3,125
|
(1)
|
Average effective interest rate of 5.5% during the three months ended March 31, 2018.
|
(2) |
The New Term Loan Facility consists of (i) a U.S. dollar term facility in an aggregate principal amount of $1.5 billion (the “New Term Loans”) and (ii) a U.S. dollar term facility in an aggregate principal amount of $650.0 million (the “Blocked Term Loan”) to be used for the Cristal Transaction. If the Cristal Transaction is terminated, the Blocked Term Loan will be repaid to the lenders of such Blocked Term Loan, and as the termination would represent a Prepayment Event as defined in our Term Loan Facility, we will be required to prepay $800 million of outstanding borrowing under the New Term Loan Facility.
|
(3) |
The Senior Notes due 2022 were repaid with the proceeds from our bond offering completed on April 6, 2018. See Note 21 for additional information.
|
13.
|
Fair Value
|
14. |
Asset Retirement Obligations
|
Three Months Ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
Beginning balance
|
$
|
82
|
$
|
76
|
||||
Additions
|
4
|
—
|
||||||
Accretion expense
|
1
|
1
|
||||||
Remeasurement/translation
|
1
|
3
|
||||||
Settlements/payments
|
(1
|
)
|
(1
|
)
|
||||
Transfer to liabilities held for sale
|
(4
|
)
|
—
|
|||||
Balance, March 31,
|
$
|
83
|
$
|
79
|
15. |
Commitments and Contingencies
|
16. |
Accumulated Other Comprehensive Loss Attributable to Tronox Limited
|
Cumulative
Translation
Adjustment
|
Pension
Liability
Adjustment
|
Unrealized
Gains
(Losses) on
Derivatives
|
Total
|
|||||||||||||
Balance, January 1, 2018
|
$
|
(312
|
)
|
$
|
(90
|
)
|
$
|
(1
|
)
|
$
|
(403
|
)
|
||||
Other comprehensive income (loss)
|
44
|
—
|
—
|
44
|
||||||||||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
1
|
—
|
1
|
||||||||||||
Balance, March 31, 2018
|
$
|
(268
|
)
|
$
|
(89
|
)
|
$
|
(1
|
)
|
$
|
(358
|
)
|
Cumulative
Translation
Adjustment
|
Pension
Liability
Adjustment
|
Unrealized
Gains
(Losses) on
Derivatives
|
Total
|
|||||||||||||
Balance, January 1, 2017
|
$
|
(408
|
)
|
$
|
(92
|
)
|
$
|
3
|
$
|
(497
|
)
|
|||||
Other comprehensive income (loss)
|
18
|
—
|
(2
|
)
|
16
|
|||||||||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
1
|
—
|
1
|
||||||||||||
Balance, March 31, 2017
|
$
|
(390
|
)
|
$
|
(91
|
)
|
$
|
1
|
$
|
(480
|
)
|
17. |
Share-Based Compensation
|
18. |
Pension and Other Postretirement Healthcare Benefits
|
Three Months
Ended March 31,
|
||||||||
2018
|
2017
|
|||||||
Net periodic cost:
|
||||||||
Service cost
|
$
|
—
|
$
|
—
|
||||
Interest cost
|
3
|
4
|
||||||
Expected return on plan assets
|
(4
|
)
|
(4
|
)
|
||||
Net amortization of actuarial losses
|
1
|
1
|
||||||
Total net periodic cost
|
$
|
—
|
$
|
1
|
19. |
Related Parties
|
20.
|
Segment Information
|
Three Months Ended March 31,
|
||||||||
2018
|
2017
|
|||||||
Net sales (TiO2)
|
$
|
442
|
$
|
378
|
||||
TiO2 segment
|
$
|
52
|
$
|
32
|
||||
Corporate
|
(38
|
)
|
(35
|
)
|
||||
Income (loss) from operations
|
14
|
(3
|
)
|
|||||
Interest expense
|
(49
|
)
|
(46
|
)
|
||||
Interest income
|
8
|
1
|
||||||
Other expense, net
|
(9
|
)
|
(8
|
)
|
||||
Loss from continuing operations before income taxes
|
$
|
(36
|
)
|
$
|
(56
|
)
|
21. |
Subsequent Events
|
• |
Exploration, mining and beneficiation of mineral sands deposits;
|
• |
Production of titanium feedstock (including chloride slag, slag fines, rutile, synthetic rutile and leucoxene), and its co-products pig iron, and zircon; and
|
• |
Production and marketing of TiO2
|
Three Months Ended March 31,
|
||||||||||||
2018
|
2017
|
Variance
|
||||||||||
(Millions of U.S. Dollars)
|
||||||||||||
Net sales
|
$
|
442
|
$
|
378
|
$
|
64
|
||||||
Cost of goods sold
|
327
|
315
|
12
|
|||||||||
Gross profit
|
115
|
63
|
52
|
|||||||||
Gross Margin
|
26
|
%
|
17
|
%
|
9 pts
|
|||||||
Corporate related and SG&A expenses
|
(38
|
)
|
(36
|
)
|
(2
|
)
|
||||||
TiO2 related SG&A expenses
|
(38
|
)
|
(31
|
)
|
(7
|
)
|
||||||
Restructuring
|
—
|
1
|
(1
|
)
|
||||||||
Impairment loss
|
(25
|
)
|
—
|
(25
|
)
|
|||||||
Income (loss) from operations
|
14
|
(3
|
)
|
17
|
||||||||
Interest expense
|
(49
|
)
|
(46
|
)
|
(3
|
)
|
||||||
Interest income
|
8
|
1
|
7
|
|||||||||
Other expense, net
|
(9
|
)
|
(8
|
)
|
(1
|
)
|
||||||
Loss from continuing operations before income taxes
|
(36
|
)
|
(56
|
)
|
20
|
|||||||
Income tax (provision) expense
|
(5
|
)
|
3
|
(8
|
)
|
|||||||
Net loss from continuing operations
|
$
|
(41
|
)
|
$
|
(53
|
)
|
$
|
12
|
||||
Effective tax rate
|
(14
|
)%
|
5
|
%
|
(19) pts
|
|||||||
EBITDA (1)
|
$
|
53
|
$
|
34
|
$
|
19
|
||||||
Adjusted EBITDA (1)
|
$
|
113
|
$
|
63
|
$
|
50
|
||||||
TiO2 Adjusted EBITDA
|
$
|
138
|
$
|
85
|
$ | 53 | ||||||
Adjusted EBITDA as % of Net Sales
|
26
|
%
|
17
|
%
|
9 pts
|
|||||||
TiO2 Adjusted EBITDA as % of Net Sales
|
31
|
%
|
22
|
%
|
9 pts
|
(1)
|
EBITDA and Adjusted EBITDA are Non-U.S. GAAP measures. Please refer to the “Non-U.S. GAAP Financial Measures” section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations for a discussion of these measures and a reconciliation of these measures to Net loss.
|
March 31, 2018
|
December 31, 2017
|
|||||||
(Millions of U.S. dollars)
|
||||||||
Cash and cash equivalents
|
$
|
1,074
|
$
|
1,116
|
||||
Available under the Wells Fargo Revolver
|
242
|
232
|
||||||
Available under the New ABSA Revolver
|
63
|
61
|
||||||
Total
|
$
|
1,379
|
$
|
1,409
|
Three Months Ended March 31,
|
||||||||
2018
|
2017
|
|||||||
(Millions of U.S. dollars)
|
||||||||
Net cash provided by (used in) operating activities
|
$
|
(4
|
)
|
2
|
||||
Net cash used in investing activities
|
(28
|
)
|
(20
|
)
|
||||
Net cash used in financing activities
|
(15
|
)
|
(12
|
)
|
||||
Net cash provided by discontinued operations
|
—
|
45
|
||||||
Effect of exchange rate changes on cash
|
7
|
1
|
||||||
Net increase (decrease) in cash and cash equivalents
|
$
|
(40
|
)
|
16
|
Contractual Obligation
Payments Due by Year (3)(4)
|
||||||||||||||||||||
Total
|
Less than
1 year
|
1-3
years
|
3-5
years
|
More than
5 years
|
||||||||||||||||
(Millions of U.S. dollars)
|
||||||||||||||||||||
Long-term debt, net and lease financing (including interest) (1)
|
$
|
4,311
|
208
|
416
|
949
|
2,738
|
||||||||||||||
Purchase obligations (2)
|
397
|
143
|
100
|
58
|
96
|
|||||||||||||||
Operating leases
|
40
|
17
|
11
|
7
|
5
|
|||||||||||||||
Asset retirement obligations
|
83
|
2
|
13
|
9
|
59
|
|||||||||||||||
Total
|
$
|
4,831
|
370
|
540
|
1,023
|
2,898
|
(1) |
We calculated the Term Loan interest at a base rate of 2.3% plus a margin of 3.0%. See Note 12 of notes to our unaudited condensed consolidated financial statements.
|
(2) |
Includes obligations to purchase requirements of process chemicals, supplies, utilities and services. We have various purchase commitments for materials, supplies, and services entered into in the ordinary course of business. Included in the purchase commitments table above are contracts, which require minimum volume purchases that extend beyond one year or are renewable annually and have been renewed for 2018. Certain contracts allow for changes in minimum required purchase volumes in the event of a temporary or permanent shutdown of a facility. We believe that all of our purchase obligations will be utilized in our normal operations.
|
(3) |
The table excludes contingent obligations, as well as any possible payments for uncertain tax positions given the inability to estimate the possible amounts and timing of any such payments.
|
(4) |
The table excludes commitments pertaining to our pension and other postretirement obligations
|
• |
Reflect our ongoing business in a manner that allows for meaningful period-to-period comparison and analysis of trends in our business, as they exclude income and expense that are not reflective of ongoing operating results;
|
• |
Provide useful information in understanding and evaluating our operating results and comparing financial results across periods;
|
• |
Provide a normalized view of our operating performance by excluding items that are either noncash or infrequently occurring;
|
• |
Assist investors in assessing our compliance with financial covenants under our debt instruments; and
|
Three Months Ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
(Millions of U.S. Dollars)
|
||||||||
Net loss (U.S. GAAP)
|
$
|
(41
|
)
|
$
|
(38
|
)
|
||
Income from discontinued operations, net of tax (see Note 3) (U.S. GAAP)
|
—
|
15
|
||||||
Net loss from continuing operations (U.S. GAAP)
|
(41
|
)
|
(53
|
)
|
||||
Interest expense
|
49
|
46
|
||||||
Interest income
|
(8
|
)
|
(1
|
)
|
||||
Income tax provision (benefit)
|
5
|
(3
|
)
|
|||||
Depreciation, depletion and amortization expense
|
48
|
45
|
||||||
EBITDA (non-U.S. GAAP)
|
53
|
34
|
||||||
Impairment losses (a)
|
25
|
—
|
||||||
Share based compensation (b)
|
7
|
13
|
||||||
Transaction costs (c)
|
20
|
11
|
||||||
Restructuring (d)
|
—
|
(1
|
)
|
|||||
Foreign currency remeasurement (e)
|
6
|
3
|
||||||
Other items (f)
|
2
|
3
|
||||||
Adjusted EBITDA (non-U.S. GAAP) (g)
|
$
|
113
|
63
|
(a) |
Represents a pre-tax charge for the impairment and expected loss on sale of the assets of our Tronox Electrolytic Operations which was recorded in “Impairment loss” in the unaudited Condensed Consolidated Statements of Operations. See Note 4 of Notes to unaudited condensed consolidated financial statements.
|
(b) |
Represents non-cash share-based compensation. See Note 17 of notes to unaudited condensed consolidated financial statements.
|
(c) |
Represents transaction costs associated with the Cristal Transaction which were recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations.
|
(d) |
Represents the reversal of restructuring expense pursuant to the settlement of claims previously filed relating to a prior restructure which was recorded in “Restructuring” in the unaudited Condensed Consolidated Statements of Operations.
|
(e) |
Represents foreign currency remeasurement which is included in “Other expense, net” in the unaudited Condensed Consolidated Statements of Operations.
|
(f) |
Includes noncash pension and postretirement costs, severance expense, accretion expense and other items included in “Selling general and administrative expenses”, “Cost of goods sold” and “Other expense, net” in the unaudited Condensed Consolidated Statements of Operations.
|
(g) |
No income tax impact given full valuation allowance. See Note 5 to unaudited condensed consolidated financial statements.
|
Three Months Ended
March 31,
|
||||||||
2018
|
2017
|
|||||||
(Millions of U.S. Dollars)
|
||||||||
TiO2 segment
|
$
|
52
|
$
|
32
|
||||
Corporate
|
(38
|
)
|
(35
|
)
|
||||
Income (loss) from continuing operations (U.S. GAAP)
|
14
|
(3
|
)
|
|||||
TiO2 segment
|
47
|
44
|
||||||
Corporate
|
1
|
1
|
||||||
Depreciation, depletion and amortization expense
|
48
|
45
|
||||||
TiO2 segment
|
39
|
9
|
||||||
Corporate
|
12
|
12
|
||||||
Other
|
51
|
21
|
||||||
TiO2 segment
|
138
|
85
|
||||||
Corporate
|
(25
|
)
|
(22
|
)
|
||||
Adjusted EBITDA (non-U.S. GAAP)
|
$
|
113
|
$
|
63
|
Exhibit No.
|
|
Indenture, dated as of April 6, 2018, among Tronox Incorporated, the Company and the other guarantors named therein and Wilmington Trust, National Association, as trustee (incorporated by reference to Exhibit 4.1 of the Current Report on Form 8-K filed by Tronox Limited on April 6, 2018).
|
|
Rule 13a-14(a) Certification of Jeffry N. Quinn.
|
|
Rule 13a-14(a) Certification of Timothy Carlson.
|
|
Section 1350 Certification for Jeffry N. Quinn.
|
|
Section 1350 Certification for Timothy Carlson.
|
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
Date: May 10, 2018
|
||
TRONOX LIMITED (Registrant)
|
||
By:
|
/s/ Robert Loughran
|
|
Name:
|
Robert Loughran
|
|
Title:
|
Vice President, Corporate Controller
|
By:
|
/s/ Timothy Carlson
|
|
Name:
|
Timothy Carlson
|
|
Title:
|
Senior Vice President and Chief Financial Officer
|