STAMFORD, Conn., Nov. 2, 2016 /PRNewswire/ -- Tronox Limited
(NYSE:TROX) today reported third quarter 2016 revenue of
$533 million compared to $575 million in the third quarter 2015 and
$537 million in the second quarter
2016. Income from operations of $25
million improved from an operating loss of $21 million in the year-ago quarter and income
from operations of $8 million in the
prior quarter. Net loss attributable to Tronox Limited of
$40 million, or $0.35 per diluted share, which included
restructuring expense of $1 million,
or $0.01 per diluted share, improved
from a net loss attributable to Tronox Limited of $60 million, or $0.52 per diluted share in the year-ago quarter
and a net loss attributable to Tronox Limited of $50 million, or $0.42 per diluted share in the prior
quarter. Adjusted net loss attributable to Tronox Limited
(Non-GAAP) was $39 million, or
$0.34 per diluted share.
Adjusted EBITDA of $98 million
improved from $81 million in the
year-ago quarter and $71 million in
the prior quarter.
Tom Casey, chairman and CEO of
Tronox, said: "We delivered strong adjusted EBITDA and free cash
flow performance in the third quarter. Our TiO2
business generated additional momentum in the quarter to that
generated in the second quarter, driven by higher pigment sales
volumes and selling prices on both year-on-year and sequential
bases coupled with continued strong operating cost
performance. Our Alkali business returned to adjusted EBITDA
and free cash flow levels that overcame and exceeded the series of
one-off items that impacted results in the second quarter. In
TiO2, pigment selling prices increased by 6 percent
sequentially and were 1 percent above the prior-year quarter.
This increase marks the first time since the third quarter of 2012
that pigment prices were higher on a year-on-year basis. We
continue to match pigment production volumes to sales volumes and
keep inventory at or below normal levels. Moreover, we
believe pigment inventories, in the aggregate, are at or below
normal levels at both customer and producer locations across the
globe resulting in a continued tight supply-demand balance.
Our cash generation performance in the quarter further strengthened
our balance sheet, as we closed the quarter with $202 million of cash on hand and liquidity of
$470 million."
Third Quarter 2016
Tronox TiO2
TiO2 segment revenue of $339
million was 11 percent lower than $380 million in the year-ago quarter, primarily
the result of lower sales volumes for CP titanium slag and pig
iron. Pigment sales of $260
million increased 7 percent compared to $244 million in the year-ago quarter, as sales
volumes increased 6 percent and average selling prices increased 1
percent (1 percent on a local currency basis). Higher sales
volumes were realized in North
America and Asia-Pacific,
while sales volumes in EMEA and Latin
America were modestly lower than those in the year-ago
quarter. Selling prices were higher in Asia-Pacific and EMEA, level in Latin America and lower in North America compared to the year-ago
quarter. Titanium feedstock and co-products sales of
$64 million were 38 percent lower
than $103 million in the year-ago
quarter, driven by lower sales volumes for CP titanium slag and pig
iron and, to a lesser extent, lower zircon selling prices.
There were no sales of CP titanium slag to third parties in the
third quarter compared to significant sales in the year-ago
quarter. Sales volumes for natural rutile were 5 percent
lower and selling prices were 8 percent lower. Zircon sales
volumes were 1 percent lower and selling prices were 13 percent
lower than the year-ago quarter. Pig iron sales volumes declined 68
percent and selling prices were 13 percent lower. Lower pig
iron sales can be attributed to lower production as last year we
suspended the operation of two of our four furnaces in South Africa that produced titanium slag and
pig iron. We continued to operate at these reduced rates
during the third quarter. Pig iron is a by-product of making
titanium slag and its selling prices are correlated to market
pricing for iron ore.
Compared sequentially, TiO2 segment revenue of
$339 million increased 2 percent
versus $333 million in the second
quarter, driven by higher pigment selling prices. Pigment
sales of $260 million increased 7
percent compared to $244 million in
the second quarter, as sales volumes increased 1 percent and
selling prices increased 6 percent (6 percent on a local currency
basis). Sales volumes were higher in Europe and Latin
America, level in Asia-Pacific and lower in North America.
Selling prices were higher in all regions. Titanium feedstock
and co-products sales of $64 million
declined 12 percent compared to $73
million in the second quarter due to lower CP titanium slag
sales and lower pig iron sales volumes. There were no CP
titanium slag sales to third parties in the third quarter whereas
there were sales in the second quarter. Zircon sales volumes
and selling prices were level to the prior quarter. We expect
zircon sales volumes in 2016 to exceed those of 2015 as we continue
to ramp up production at our Fairbreeze mine to match market
demand. Natural rutile sales volumes increased 2 percent and
selling prices also increased 2 percent. Pig iron sales
volumes declined 51 percent due to the timing of sales and selling
prices increased 6 percent.
TiO2 segment income from operations of $18 million improved from an operating loss of
$26 million in the year-ago quarter
and income from operations of $6
million in the prior quarter. With cash provided by
operating activities of $117 million
and capital expenditures of $23
million, TiO2 delivered free cash flow of
$94 million in the third quarter.
TiO2 segment adjusted EBITDA of $75 million increased 29 percent from
$58 million in the year-ago quarter
driven by higher pigment sales volumes, significant cost reductions
resulting from its Operational Excellence program and the favorable
impact of foreign exchange on production costs, partially offset by
the impact of feedstock production curtailments. Compared
sequentially, adjusted EBITDA of $75
million improved by 27 percent from $59 million in the second quarter, driven by
pigment selling price increases, production cost reductions and the
benefit of higher pigment production efficiency and plant
utilization.
Tronox Alkali
Alkali segment revenue of $194
million compared to $195
million in the year-ago quarter as 3 percent higher sales
volumes were offset by 3 percent lower selling prices. In the
domestic market, sales volumes declined 3 percent due to the timing
of sales while selling prices increased 1 percent. In export
markets, sales volumes increased 9 percent driven by strong demand
in Asia-Pacific and Latin
America. Selling prices in export markets were 7 percent
lower, primarily due to lower Asia-Pacific selling prices. Chinese
soda ash producers lowered domestic and export prices in the fourth
quarter last year as raw material, shipping and energy cost
deflation and currency devaluation lowered their costs.
However, Chinese input costs, such as for coal, have now begun to
move upward and there are indications that domestic pricing has
also moved upward. As a result, we anticipate that the
pricing environment in Asia will
remain level through the rest of the year.
Compared sequentially, Alkali revenue of $194 million decreased 5 percent from
$204 million in the second quarter
due to the timing of sales in both domestic and export
markets. Sales volumes declined 5 percent and selling prices
were level to the second quarter. Domestic sales volumes
declined 6 percent while selling prices were level to the prior
quarter. Export sales volumes declined 4 percent and selling
prices were also level to the second quarter.
Alkali segment income from operations of $23 million improved from $21 million in the year-ago quarter and
$11 million in the prior
quarter. With cash provided by operating activities of
$45 million and capital expenditures
of $8 million, Alkali delivered free
cash flow of $37 million in the third
quarter.
Alkali segment adjusted EBITDA of $40
million compared to $41
million in the year-ago quarter as higher sales volumes,
lower production costs and higher production efficiencies
essentially offset lower export selling prices. Compared
sequentially, Alkali segment adjusted EBITDA of $40 million improved from $28 million in the second quarter. Second
quarter performance was impacted by items totaling approximately
$9 million that did not occur in the
third quarter.
Corporate
Corporate loss from operations was $16
million in the third quarter compared to a loss from
operations of $16 million in the
year-ago quarter and a loss from operations of $9 million in the second quarter.
Corporate adjusted EBITDA was ($17)
million compared to adjusted EBITDA of ($18) million in the year-ago quarter and
adjusted EBITDA of ($16) million in
the prior quarter. Corporate cash used in operations was
$108 million, which included a
semi-annual bond interest payment of $50
million. Capital expenditures were $1 million in the quarter.
Consolidated
Selling, general and administrative expenses were $54 million in the third quarter compared to
$55 million in the year-ago quarter
and $50 million in the prior
quarter. Interest and debt expense was $46 million in the third quarter compared to
$45 million in the year-ago quarter
and $46 million in the prior
quarter. On September 30, 2016,
gross consolidated debt was $3,055
million, and debt, net of cash and cash equivalents, was
$2,853 million. Liquidity was
$470 million including cash and cash
equivalents on the balance sheet of $202
million. Capital expenditures were $32 million and depreciation, depletion and
amortization expense was $60
million.
Third Quarter 2016 Webcast Conference Call
Webcast Conference Call: Thursday,
November 3, at 8:30 a.m. ET
(New York). The live call is
open to the public via Internet broadcast and telephone
Internet Broadcast:
http://www.tronox.com/
Dial-in telephone numbers:
U.S. / Canada: +1.877.831.3840
International: +1.253.237.1184
Conference ID: 95832661
Conference Call Presentation
Slides will be used during the conference call and are
available on our website at http://www.tronox.com/
Webcast Conference Call Replay: Available via the
Internet and telephone beginning on Thursday
November 3, 2016 at 11:30 a.m.
ET (New York) until
10:30 p.m. ET (New York) on Tuesday
November 8, 2016
Internet Replay:
www.tronox.com
Replay dial-in telephone numbers:
U.S. / Canada: +1.855.859.2056
International: +1.404.537.3406
Conference ID: : 95832661
Upcoming Conferences
During the fourth quarter 2016 a member of management is
scheduled to present at the following conferences:
- Morgan Stanley Leveraged Finance Conference, New Orleans, November
9-10, 2016
- Goldman Sachs Global Metals & Mining Conference,
New York, November 16, 2016
- Citi Basic Materials Conference, New
York, November 29, 2016
- Bank of America Merrill Lynch Leveraged Finance Conference,
Boca Raton, November 29-30, 2016
Accompanying conference materials will be available at
http://investor.tronox.com
About Tronox
Tronox Limited operates two vertically integrated mining and
inorganic chemical businesses. Tronox TiO2 mines and
processes titanium ore, zircon and other minerals, and manufactures
titanium dioxide pigments that add brightness and durability to
paints, plastics, paper, and other everyday products. Tronox Alkali
mines trona ore and manufactures natural soda ash, sodium
bicarbonate, caustic soda, and other compounds which are used in
the production of glass, detergents, baked goods, animal nutrition
supplements, pharmaceuticals, and other essential products.
For more information, visit www.tronox.com
Forward Looking Statements
Statements in this release that are not historical are
forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements, which are subject to known and unknown risks,
uncertainties and assumptions about us, may include projections of
our future financial performance based on our growth strategies and
anticipated trends in our business. These statements are only
predictions based on our current expectations and projections about
future events. There are important factors that could cause our
actual results, level of activity, performance or achievements to
differ materially from the results, level of activity, performance
or achievements expressed or implied by the forward-looking
statements. These and other risk factors are discussed in the
company's filings with the Securities and Exchange Commission
(SEC), including those under the heading entitled "Risk Factors" in
our Annual Report on Form 10-K for the year ended December 31, 2015 and our Quarterly Report on
Form 10-Q for the quarter ended June 30,
2016.
Moreover, we operate in a very competitive and rapidly changing
environment. New risks and uncertainties emerge from time to time,
and it is not possible for our management to predict all risks and
uncertainties, nor can management assess the impact of all factors
on our business or the extent to which any factor, or combination
of factors, may cause actual results to differ materially from
those contained in any forward-looking statements. Although we
believe the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results,
level of activity, performance or achievements. Neither we nor any
other person assumes responsibility for the accuracy or
completeness of any of these forward-looking statements. You should
not rely upon forward-looking statements as predictions of future
events. Unless otherwise required by applicable laws, we undertake
no obligation to update or revise any forward-looking statements,
whether as a result of new information or future developments.
Use of Non-U.S. GAAP Financial Information
To provide investors and others with additional information
regarding Tronox Limited's operating results, we have disclosed in
this press release certain non-U.S. GAAP financial measures,
including EBITDA, Adjusted EBITDA, free cash flow and adjusted net
loss attributable to Tronox. These non-U.S. GAAP financial
measures are a supplement to and not a substitute for or superior
to, the company's results presented in accordance with U.S.
GAAP. The non-U.S. GAAP financial measures presented by the
company may be different than non-U.S. GAAP financial measures
presented by other companies. The non-U.S. GAAP financial
measures are provided to enhance the user's overall understanding
of the company's operating performance. Specifically, the company
believes the non-U.S. GAAP information provides useful measures to
investors regarding the company's financial performance by
excluding certain costs and expenses that the company believes are
not indicative of its core operating results. The
presentation of these non-U.S. GAAP financial measures are not
meant to be considered in isolation or as a substitute for results
or guidance prepared and presented in accordance with U.S.
GAAP. A reconciliation of the non-U.S. GAAP financial
measures to U.S. GAAP results is included herein.
Management believes these non-U.S. GAAP financial measures:
- Reflect Tronox Limited's ongoing business in a manner that
allows for meaningful period-to-period comparison and analysis of
trends in its business, as they exclude income and expense that are
not reflective of ongoing operating results;
- Provide useful information to investors and others in
understanding and evaluating Tronox Limited's operating results and
future prospects in the same manner as management and in comparing
financial results across accounting periods;
- Provide additional view of the operating performance of the
company by adding interest expenses, taxes, depreciation, depletion
and amortization to the net income. Further adjustments due to
purchase accounting and stock-based compensation charges attempt to
exclude items that are either non-cash or unusual in nature;
- Assist investors to assess the company's compliance with
financial covenants under its debt instruments;
- Adjusted EBITDA is one of the primary measures management uses
for planning and budgeting processes and to monitor and evaluate
financial and operating results. Adjusted EBITDA is not a
recognized term under U.S. GAAP and does not purport to be an
alternative to measures of our financial performance as determined
in accordance with U.S. GAAP, such as net income (loss). Because
other companies may calculate EBITDA and Adjusted EBITDA
differently than Tronox, EBITDA may not be, and Adjusted EBITDA as
presented in this release is not, comparable to similarly titled
measures reported by other companies, and
- We believe that the non-U.S. GAAP financial measure "Adjusted
net loss attributable to Tronox Limited" and its presentation on a
per share basis provide useful information about our operating
results to investors and securities analysts. We also believe that
excluding the effects of these items from operating results allows
management and investors to compare more easily the financial
performance of our underlying businesses from period to
period.
Media Contact: Bud Grebey
Direct: +1.203.705.3721
Investor Contact: Brennen
Arndt
Direct: +1.203.705.3722
TRONOX
LIMITED
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (US GAAP)
|
(UNAUDITED)
|
(Millions of U.S.
dollars, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net
sales
|
|
$
533
|
|
$
575
|
|
$
1,545
|
|
$
1,577
|
|
|
Cost of goods
sold
|
|
453
|
|
536
|
|
1,388
|
|
1,479
|
|
Gross
profit
|
|
80
|
|
39
|
|
157
|
|
98
|
|
|
Selling, general, and
administrative expenses
|
|
(54)
|
|
(55)
|
|
(151)
|
|
(171)
|
|
|
Restructuring
expense
|
|
(1)
|
|
(5)
|
|
(2)
|
|
(7)
|
|
Income (loss) from
operations
|
|
25
|
|
(21)
|
|
4
|
|
(80)
|
|
|
Interest and debt
expense, net
|
|
(46)
|
|
(45)
|
|
(138)
|
|
(131)
|
|
|
Gain on
extinguishment of debt
|
|
-
|
|
-
|
|
4
|
|
-
|
|
|
Other income
(expense), net
|
|
(14)
|
|
23
|
|
(23)
|
|
22
|
|
Loss before income
taxes
|
|
(35)
|
|
(43)
|
|
(153)
|
|
(189)
|
|
|
Income tax
provision
|
|
(7)
|
|
(11)
|
|
(29)
|
|
(29)
|
|
Net
loss
|
|
(42)
|
|
(54)
|
|
(182)
|
|
(218)
|
|
|
Net income (loss)
attributable to noncontrolling interest
|
|
(2)
|
|
6
|
|
(1)
|
|
10
|
|
Net loss
attributable to Tronox Limited
|
|
$
(40)
|
|
$
(60)
|
|
$
(181)
|
|
$
(228)
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share,
basic and diluted
|
|
$
(0.35)
|
|
$
(0.52)
|
|
$
(1.56)
|
|
$
(1.97)
|
|
Weighted average
shares outstanding, basic and diluted (in thousands)
|
|
116,219
|
|
115,642
|
|
116,108
|
|
115,529
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Operating
Data:
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
32
|
|
$
48
|
|
$
87
|
|
$
141
|
|
|
Depreciation,
depletion and amortization expense
|
|
$
60
|
|
$
82
|
|
$
175
|
|
$
222
|
|
TRONOX
LIMITED
|
RECONCILIATION OF
NON-U.S. GAAP FINANCIAL MEASURES
|
(UNAUDITED)
|
(Millions of U.S.
dollars, except share and per share data)
|
|
RECONCILIATION OF
NET LOSS
|
ATTRIBUTABLE TO
TRONOX LIMITED (U.S. GAAP)
|
TO ADJUSTED NET
LOSS
|
ATTRIBUTABLE TO
TRONOX LIMITED (NON-U.S. GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to Tronox Limited (U.S. GAAP)
|
|
$
(40)
|
|
$
(60)
|
|
$
(181)
|
|
$
(228)
|
|
|
|
|
|
|
|
|
|
Acquisition related
matters (a)
|
|
-
|
|
2
|
|
-
|
|
36
|
Restructuring expense
(b)
|
|
1
|
|
5
|
|
2
|
|
7
|
Gain on
extinguishment of debt (c)
|
|
-
|
|
-
|
|
(4)
|
|
-
|
Adjusted net loss
attributable to Tronox Limited (non-U.S. GAAP)(d)
|
|
$
(39)
|
|
$
(53)
|
|
$
(183)
|
|
$
(185)
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss per share attributable to Tronox Limited (U.S.
GAAP)
|
|
$
(0.35)
|
|
$
(0.52)
|
|
$
(1.56)
|
|
$
(1.97)
|
|
|
|
|
|
|
|
|
|
Acquisition related
expense, per share
|
|
-
|
|
0.02
|
|
-
|
|
0.31
|
Restructuring
expense, per share
|
|
0.01
|
|
0.04
|
|
0.02
|
|
0.06
|
Gain on
extinguishment of debt, per share
|
|
-
|
|
-
|
|
(0.03)
|
|
-
|
Basic and diluted
adjusted income (loss) per share attributable to Tronox Limited
(non-U.S. GAAP)
|
|
$
(0.34)
|
|
$
(0.46)
|
|
$
(1.57)
|
|
$
(1.60)
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding, basic and diluted (in thousands)
|
|
116,219
|
|
115,642
|
|
116,108
|
|
115,529
|
|
|
|
(a) One-time
non-operating items and the effect of acquisition. During 2015,
transaction costs consist of costs associated with the acquisition
of the Alkali business, including banking, legal and professional
fees. During the three months ended September 30, 2015, $2 million
was recorded in "Selling, general and administrative expenses" in
the unaudited Condensed Consolidated Statements of Operations.
During the nine months ended September 30, 2015, $9 million, $19
million and $8 million was recorded in "Cost of goods sold",
"Selling, general and administrative expenses" and "Interest and
debt expense, net", respectively, in the unaudited Condensed
Consolidated Statements of Operations.
|
|
(b) Represents
severance costs associated with the shutdown of our sodium chlorate
plant and other global TiO2 restructuring efforts, which was
recorded in "Restructuring expense" in the unaudited Condensed
Consolidated Statements of Operations.
|
|
(c) Represents
the gain associated with the repurchase of $20 million face value
of the Senior Notes due 2020 and Senior Notes 2022, which was
recorded in "Gain on extinguishment of debt" in the unaudited
Condensed Consolidated Statements of Operations.
|
|
(d) No income
tax impact given full valuation allowance except for South Africa
restructuring related costs of less than $1
million.
|
TRONOX
LIMITED
|
SEGMENT
INFORMATION
|
(UNAUDITED)
|
(Millions of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
TiO2
segment
|
|
$ 339
|
|
$ 380
|
|
$
957
|
|
$ 1,174
|
Alkali
segment
|
|
194
|
|
195
|
|
588
|
|
403
|
Net
sales
|
|
$ 533
|
|
$ 575
|
|
$ 1,545
|
|
$ 1,577
|
|
|
|
|
|
|
|
|
|
TiO2
segment
|
|
$
18
|
|
$
(26)
|
|
$
(12)
|
|
$
(58)
|
Alkali
segment
|
|
23
|
|
21
|
|
54
|
|
46
|
Corporate
|
|
(16)
|
|
(16)
|
|
(38)
|
|
(68)
|
Income (loss) from
operations
|
|
25
|
|
(21)
|
|
4
|
|
(80)
|
Interest and debt
expense, net
|
|
(46)
|
|
(45)
|
|
(138)
|
|
(131)
|
Gain on
extinguishment of debt
|
|
-
|
|
-
|
|
4
|
|
-
|
Other income
(expense), net
|
|
(14)
|
|
23
|
|
(23)
|
|
22
|
Loss before income
taxes
|
|
(35)
|
|
(43)
|
|
(153)
|
|
(189)
|
Income tax
provision
|
|
(7)
|
|
(11)
|
|
(29)
|
|
(29)
|
Net
loss
|
|
(42)
|
|
(54)
|
|
(182)
|
|
(218)
|
Net income (loss)
attributable to noncontrolling interest
|
|
(2)
|
|
6
|
|
(1)
|
|
10
|
Net loss
attributable to Tronox Limited
|
|
$
(40)
|
|
$
(60)
|
|
$
(181)
|
|
$
(228)
|
TRONOX
LIMITED
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(UNAUDITED)
|
(Millions of U.S.
dollars, except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
December
31,
|
ASSETS
|
2016
|
|
2015
|
Current
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
202
|
|
$
229
|
|
Restricted
cash
|
|
3
|
|
5
|
|
Accounts receivable,
net of allowance for doubtful accounts
|
|
394
|
|
391
|
|
Inventories,
net
|
|
558
|
|
630
|
|
Prepaid and other
assets
|
|
45
|
|
46
|
|
|
Total current
assets
|
|
1,202
|
|
1,301
|
|
|
|
|
|
|
|
Noncurrent
Assets
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
1,850
|
|
1,843
|
|
Mineral leaseholds,
net
|
|
1,617
|
|
1,604
|
|
Intangible assets,
net
|
|
226
|
|
244
|
|
Inventories,
net
|
|
6
|
|
12
|
|
Other long-term
assets
|
|
24
|
|
23
|
|
|
Total
assets
|
|
$
4,925
|
|
$
5,027
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
Accounts
payable
|
|
$
162
|
|
$
159
|
|
Accrued
liabilities
|
|
148
|
|
180
|
|
Short-term
debt
|
|
150
|
|
150
|
|
Long-term debt due
within one year
|
|
16
|
|
16
|
|
Income taxes
payable
|
|
57
|
|
43
|
|
|
Total current
liabilities
|
|
533
|
|
548
|
|
|
|
|
|
|
|
Noncurrent
Liabilities
|
|
|
|
|
|
Long-term
debt
|
|
2,889
|
|
2,910
|
|
Pension and
postretirement healthcare benefits
|
|
151
|
|
141
|
|
Asset retirement
obligations
|
|
78
|
|
77
|
|
Long-term deferred
tax liabilities
|
|
156
|
|
143
|
|
Other long-term
liabilities
|
|
111
|
|
98
|
|
|
Total
liabilities
|
|
3,918
|
|
3,917
|
|
|
|
|
|
|
|
Contingencies and
Commitments
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
Tronox Limited Class
A ordinary shares, par value $0.01 — 65,982,604 shares issued and
65,149,970 shares outstanding at September 30, 2016 and
65,443,363 shares issued and 64,521,851 shares
outstanding at December 31, 2015
|
|
1
|
|
1
|
|
Tronox Limited Class
B ordinary shares, par value $0.01 — 51,154,280 shares issued and
outstanding at September 30, 2016 and December 31, 2015.
|
|
-
|
|
-
|
|
Capital in excess of
par value
|
|
1,518
|
|
1,500
|
|
Accumulated deficit /
retained earnings
|
|
(129)
|
|
93
|
|
Accumulated other
comprehensive loss
|
|
(525)
|
|
(596)
|
|
|
Total
shareholders' equity
|
|
865
|
|
998
|
|
Noncontrolling
interest
|
|
142
|
|
112
|
|
|
Total
equity
|
|
1,007
|
|
1,110
|
|
|
Total liabilities
and equity
|
|
$
4,925
|
|
$
5,027
|
TRONOX
LIMITED
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
(Millions of U.S.
dollars)
|
|
|
|
|
|
Nine Months
Ended
September 30,
|
|
2016
|
|
2015
|
Cash Flows from
Operating Activities:
|
|
|
|
Net loss
|
$(182)
|
|
$ (218)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
Depreciation,
depletion and amortization
|
175
|
|
222
|
Deferred income
taxes
|
(4)
|
|
(4)
|
Share-based
compensation expense
|
19
|
|
17
|
Amortization of
deferred debt issuance costs and discount on debt
|
8
|
|
8
|
Pension and
postretirement healthcare benefit expense
|
4
|
|
4
|
Gain on
extinguishment of debt
|
(4)
|
|
-
|
Other noncash items
affecting net loss
|
12
|
|
(4)
|
Contributions to
employee pension and postretirement plans
|
(20)
|
|
(16)
|
Changes in assets and
liabilities:
|
|
|
|
(Increase) decrease
in accounts receivable
|
1
|
|
(36)
|
(Increase) decrease
in inventories
|
98
|
|
90
|
(Increase) decrease
in prepaid and other assets
|
(5)
|
|
4
|
Increase (decrease)
in accounts payable and accrued liabilities
|
(28)
|
|
(35)
|
Increase (decrease)
in income taxes payable
|
28
|
|
12
|
Other, net
|
21
|
|
1
|
Cash provided by
operating activities
|
123
|
|
45
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital
expenditures
|
(87)
|
|
(141)
|
Proceeds from the
sale of assets
|
1
|
|
-
|
Acquisition of
business
|
-
|
|
(1,653)
|
Cash used in
investing activities
|
(86)
|
|
(1,794)
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Repayments of
debt
|
(27)
|
|
(13)
|
Proceeds from
debt
|
-
|
|
750
|
Debt issuance
costs
|
-
|
|
(15)
|
Dividends
paid
|
(40)
|
|
(88)
|
Proceeds from the
exercise of warrants and options
|
-
|
|
3
|
Cash provided by
(used in) financing activities
|
(67)
|
|
637
|
Effects of
exchange rate changes on cash and cash
equivalents
|
3
|
|
(19)
|
Net decrease in
cash and cash equivalents
|
(27)
|
|
(1,131)
|
Cash and cash
equivalents at beginning of period
|
229
|
|
1,276
|
Cash and cash
equivalents at end of period
|
$
202
|
|
$
145
|
TRONOX
LIMITED
|
CONDENSED
STATEMENT OF FREE CASH FLOWS (NON-U.S. GAAP)
|
(UNAUDITED)
|
(Millions of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30, 2016
|
|
Nine Months
Ended
September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TiO2
|
|
Alkali
|
|
Corporate
|
|
Consolidated
|
|
TiO2
|
|
Alkali
|
|
Corporate
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss) (U.S. GAAP)
|
$
18
|
|
$
23
|
|
$
(16)
|
|
$
25
|
|
$
(12)
|
|
$
54
|
|
$
(38)
|
|
$
4
|
Depreciation,
depletion and amortization expense
|
44
|
|
15
|
|
1
|
|
60
|
|
127
|
|
44
|
|
4
|
|
175
|
Other
|
13
|
|
2
|
|
(2)
|
|
13
|
|
41
|
|
5
|
|
(16)
|
|
30
|
Adjusted EBITDA
(non-U.S. GAAP)
|
$
75
|
|
$
40
|
|
$
(17)
|
|
$
98
|
|
$
156
|
|
$
103
|
|
$
(50)
|
|
$
209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(non-U.S. GAAP)
|
$
75
|
|
$
40
|
|
$
(17)
|
|
$
98
|
|
$
156
|
|
$
103
|
|
$
(50)
|
|
$
209
|
Interest paid, net of
capitalized interest and interest income
|
-
|
|
-
|
|
(68)
|
|
(68)
|
|
-
|
|
-
|
|
(154)
|
|
(154)
|
Income tax
provision
|
-
|
|
-
|
|
(7)
|
|
(7)
|
|
-
|
|
-
|
|
(29)
|
|
(29)
|
Contributions to
employee pension and postretirement plans
|
(7)
|
|
(4)
|
|
-
|
|
(11)
|
|
(15)
|
|
(5)
|
|
-
|
|
(20)
|
Deferred income
taxes
|
-
|
|
-
|
|
(1)
|
|
(1)
|
|
-
|
|
-
|
|
(4)
|
|
(4)
|
Other
|
6
|
|
2
|
|
5
|
|
13
|
|
(2)
|
|
-
|
|
8
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in assets and
liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease
in accounts receivable
|
3
|
|
10
|
|
-
|
|
13
|
|
(3)
|
|
4
|
|
-
|
|
1
|
(Increase) decrease
in inventories
|
10
|
|
2
|
|
-
|
|
12
|
|
94
|
|
4
|
|
-
|
|
98
|
(Increase) decrease
in prepaid and other assets
|
(2)
|
|
(3)
|
|
2
|
|
(3)
|
|
(5)
|
|
(3)
|
|
3
|
|
(5)
|
Increase (decrease)
in accounts payable and
accrued
liabilities
|
17
|
|
-
|
|
(25)
|
|
(8)
|
|
(2)
|
|
8
|
|
(34)
|
|
(28)
|
Increase (decrease)
in income taxes payable
|
-
|
|
-
|
|
8
|
|
8
|
|
-
|
|
-
|
|
28
|
|
28
|
Other, net
|
15
|
|
(2)
|
|
(5)
|
|
8
|
|
22
|
|
-
|
|
(1)
|
|
21
|
Subtotal
|
43
|
|
7
|
|
(20)
|
|
30
|
|
106
|
|
13
|
|
(4)
|
|
115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by
(used in) operating activities
|
117
|
|
45
|
|
(108)
|
|
54
|
|
245
|
|
111
|
|
(233)
|
|
123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
(23)
|
|
(8)
|
|
(1)
|
|
(32)
|
|
(58)
|
|
(28)
|
|
(1)
|
|
(87)
|
Free cash
flow (non-U.S. GAAP)
|
$
94
|
|
$
37
|
|
$
(109)
|
|
$
22
|
|
$
187
|
|
$
83
|
|
$
(234)
|
|
$
36
|
TRONOX
LIMITED
|
RECONCILIATION OF
NET LOSS TO EBITDA AND ADJUSTED EBITDA (NON-U.S.
GAAP)
|
(UNAUDITED)
|
(Millions of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Net loss (U.S.
GAAP)
|
$(42)
|
|
$(54)
|
|
$(182)
|
|
$(218)
|
|
Interest and debt
expense, net
|
46
|
|
45
|
|
138
|
|
131
|
|
Interest
income
|
-
|
|
(1)
|
|
(2)
|
|
(5)
|
|
Income tax
provision
|
7
|
|
11
|
|
29
|
|
29
|
|
Depreciation,
depletion and amortization expense
|
60
|
|
82
|
|
175
|
|
222
|
EBITDA (non-U.S.
GAAP)
|
71
|
|
83
|
|
158
|
|
159
|
|
Amortization of
inventory step-up from purchase accounting
(a)
|
-
|
|
-
|
|
-
|
|
9
|
|
Alkali transaction
costs (b)
|
-
|
|
2
|
|
-
|
|
29
|
|
Restructuring expense
(c)
|
1
|
|
5
|
|
2
|
|
7
|
|
Gain on
extinguishment of debt (d)
|
-
|
|
-
|
|
(4)
|
|
-
|
|
Foreign currency
remeasurement (e)
|
14
|
|
(20)
|
|
32
|
|
(16)
|
|
Other items
(f)
|
12
|
|
11
|
|
21
|
|
24
|
Adjusted EBITDA
(non-U.S. GAAP) (g)
|
$
98
|
|
$
81
|
|
$
209
|
|
$
212
|
|
|
|
|
|
|
|
|
|
|
(a) Amortization of
inventory step-up from purchase accounting related to the
acquisition of the Alkali business which is included in "Cost of
goods sold" in the unaudited Condensed Consolidated Statements of
Operations.
|
|
(b) One-time
non-operating items and the effect of acquisition which is included
in "Selling, general and administrative expenses" in the unaudited
Condensed Consolidated Statements of Operations.
|
|
(c) Represents
severance and other costs associated with the shutdown of our
sodium chlorate plant, and other global TiO2 restructuring efforts,
and the Alkali Transaction which was recorded in "Restructuring
expense" in the unaudited Condensed Consolidated Statements of
Operations.
|
|
(d) Represents the
gain associated with the repurchase of $20 million face value of
the our Senior Notes due 2020 and Senior Notes 2022, which was
recorded in "Gain on extinguishment of debt" in the unaudited
Condensed Consolidated Statements of Operations.
|
|
(e) Represents
foreign currency remeasurement which is included in "Other income
(expense), net" in the unaudited Condensed Consolidated Statements
of Operations.
|
|
(f) Includes noncash
pension and postretirement costs, share-based compensation,
severance expense, adjustment of transfer tax related to the Exxaro
Transaction, insurance settlement gain, and other items included in
"Selling general and administrative expenses" and "Cost of goods
sold" in the unaudited Condensed Consolidated Statements of
Operations.
|
|
(g) No income tax
impact given full valuation allowance except for South Africa
restructuring related costs of less than $1 million.
|
|
|
The following table
reconciles income (loss) from operations, the comparable measure
for segment reporting under U.S. GAAP, to Adjusted EBITDA by
segments for the periods presented:
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Tio2
segment
|
18
|
|
(26)
|
|
(12)
|
|
(58)
|
|
Alkali
segment
|
23
|
|
21
|
|
54
|
|
46
|
|
Corporate
|
(16)
|
|
(16)
|
|
(38)
|
|
(68)
|
Income (loss) from
operations (U.S. GAAP)
|
25
|
|
(21)
|
|
4
|
|
(80)
|
|
|
|
|
|
|
|
|
|
|
Tio2
segment
|
44
|
|
64
|
|
127
|
|
189
|
|
Alkali
segment
|
15
|
|
16
|
|
44
|
|
28
|
|
Corporate
|
1
|
|
2
|
|
4
|
|
5
|
Depreciation,
depletion and amortization expense
|
60
|
|
82
|
|
175
|
|
222
|
|
|
|
|
|
|
|
|
|
|
Tio2
segment
|
13
|
|
20
|
|
41
|
|
48
|
|
Alkali
segment
|
2
|
|
4
|
|
5
|
|
17
|
|
Corporate
|
(2)
|
|
(4)
|
|
(16)
|
|
5
|
Other
|
13
|
|
20
|
|
30
|
|
70
|
|
|
|
|
|
|
|
|
|
|
Tio2
segment
|
75
|
|
58
|
|
156
|
|
179
|
|
Alkali
segment
|
40
|
|
41
|
|
103
|
|
91
|
|
Corporate
|
(17)
|
|
(18)
|
|
(50)
|
|
(58)
|
Adjusted EBITDA
(non-U.S. GAAP)
|
$
98
|
|
$
81
|
|
$
209
|
|
$
212
|
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SOURCE Tronox Limited