Solid first quarter results despite ongoing
cost inflation and logistics challenges
Focused investments to further strengthen
business model durability and long-term profitability
STAMFORD, Conn.,
April 27, 2022 /PRNewswire/ -- Tronox
Holdings plc (NYSE:TROX) ("Tronox" or the "Company"), the world's
leading integrated manufacturer of titanium dioxide
("TiO2") pigment, today reported its financial results
for the quarter ending March 31, 2022, as follows:
First Quarter 2022 Financial Highlights:
- Produced revenue of $965 million,
an increase of 8% compared to the prior year, primarily driven by
higher revenue from TiO2 and pig iron
- Generated income from operations of $69
million and net income of $16
million, inclusive of a one-time fee regarding the
settlement agreement reached with Venator totaling $85 million including the break fee and related
negotiated interest
- Achieved GAAP diluted EPS of $0.10; adjusted diluted EPS of $0.60 (non-GAAP) primarily due to the
settlement
- Delivered Adjusted EBITDA of $240
million, within the guided range, and an Adjusted EBITDA
margin of 24.9%
- Invested $103 million in capital expenditures and
generated free cash flow of $86
million
- Reaffirming 2022 Adjusted EBITDA and adjusted diluted EPS
guidance; adjusting 2022 free cash flow lower largely to reflect
the settlement
This outlook is based on Tronox's current views on current
global economic activity and is subject to changes and impacts
associated with the ongoing pandemic, global supply chain, and
inflation-related challenges, among others.
------
|
Note: For the Company's
guidance with respect to second quarter 2022 Adjusted EBITDA, we
are not able to provide without unreasonable effort the most
directly comparable GAAP financial measure, or reconciliation to
such GAAP financial measure, because certain items that impact such
measures are uncertain, out of the Company's control or cannot be
reasonably predicted.
|
Summary Financial
Results
($M unless
otherwise noted)
|
Q1
2022
|
Q1
2021
|
Y-o-Y %
∆
|
Q4
2021
|
Q-o-Q %
∆
|
Revenue
|
$965
|
$891
|
8 %
|
$884
|
9 %
|
TiO2
|
$773
|
$696
|
11
%
|
$675
|
15
%
|
Zircon
|
$108
|
$123
|
(12)%
|
$119
|
(9)%
|
Feedstock and other
products
|
$84
|
$72
|
17
%
|
$91
|
(8)%
|
Income from
operations
|
$69
|
$125
|
(45)%
|
$134
|
(49)%
|
Net Income
|
$16
|
$26
|
(38)%
|
$87
|
(82)%
|
Net Income attributable
to Tronox
|
$16
|
$19
|
(16)%
|
$83
|
(81)%
|
GAAP diluted earnings
per share
|
$0.10
|
$0.12
|
(17)%
|
$0.52
|
(81)%
|
Adjusted diluted
earnings per share
|
$0.60
|
$0.43
|
40
%
|
$0.53
|
13
%
|
Adjusted
EBITDA
|
$240
|
$225
|
7 %
|
$233
|
3 %
|
Adjusted EBITDA
Margin %
|
24.9
%
|
25.3
%
|
(40)
bps
|
26.4
%
|
(150)
bps
|
Free cash
flow
|
$86
|
$77
|
12
%
|
$50
|
72
%
|
|
|
|
|
|
|
|
Y-o-Y %
∆
|
|
Q-o-Q %
∆
|
|
Volume
|
Price
|
|
Volume
|
Price
|
TiO2
|
(6)%
|
18 %
|
|
9 %
|
6 %
|
Local Currency
Basis
|
n/a
|
20 %
|
|
n/a
|
6 %
|
Zircon
|
(38)%
|
43 %
|
|
(20)%
|
14 %
|
Co-CEOs' Remarks
"Tronox delivered solid first quarter results and continued to
serve our customers against a backdrop of higher costs and
logistics constraints," commented John D.
Romano, co-chief executive officer. "It is a testament to
the dedication of our employees that we have continued to deliver
results in line with our expectations while overcoming these
ongoing challenges, so we thank the Tronox team for their
commitment."
Mr. Romano continued, "Market demand remains sound across all
products, though we continue to monitor Europe given the crisis in Ukraine. Our financial exposure is minimal,
with less than 1% of our total revenue from Russia and Ukraine combined in 2021. More importantly,
our hearts go out to those impacted by the conflict, and we offer
our support to those who are affected.
"Our demand outlook for the year remains strong as
TiO2 market tightness persists while inventories remain
below seasonally normal levels, and similarly positive trends
continue in the zircon and pig iron markets. While we experienced
external challenges this quarter, Tronox remains well-positioned to
continue to overcome adverse conditions. With our enterprise
optimization model, we are able to optimize our global footprint,
and we are investing to sustain our competitive advantage. We are
focused on executing against our strategy to deliver safe, quality,
low-cost, sustainable tons for our customers."
Jean-François Turgeon, co-chief executive officer, added, "We
are committed to driving continued value creation through our
capital allocation strategy. Our key capital projects, including
newTRON and the mining development projects in Australia and South
Africa, will unlock additional value from our vertically
integrated business model and ensure we remain competitive across
all economic scenarios while enabling improved return on capital.
In the first quarter, after announcing the refinancing transaction
that enabled the achievement of reaching our previous gross debt
target, we repurchased approximately 1.4 million shares for a total
of $25 million. We expect to continue
share repurchases under the remaining $275
million program through February
2024 as cash generation permits. Additional debt reduction
below our previous target of $2.5
billion will further strengthen our balance sheet and reduce
interest costs. We look forward to sharing more details on our
long-term strategy, outlook, and capital allocation priorities at
our Investor Day on June 16,
2022."
First Quarter 2022
Results
(Comparisons are to
prior year (Q1 2022 vs. Q1 2021) unless otherwise noted)
|
The Company recorded first quarter revenue of $965 million, an increase of 8%, largely driven
by higher revenue from TiO2 and pig iron. Revenue from
TiO2 sales was $773
million, an increase of 11% driven by a 20% increase in
average selling prices on a local currency basis, or an 18%
increase on a US dollar basis, partially offset by a 6% decrease in
volumes. Sequentially, TiO2 volumes increased 9%, in
line with previously communicated expectations, driven by higher
volumes across all regions, while average selling prices increased
6% on both a local currency and US dollar basis.
Zircon revenue decreased 12% to $108
million driven by a 38% decrease in volumes partially offset
by a 43% increase in average selling prices. Sequentially, zircon
volumes declined 20%, while average selling prices increased 14%.
The volume decline on both a year-over-year and sequential basis
are due to higher sales from inventory in previous quarters.
Revenue from other products was $84
million, representing a 17% increase, primarily due to
higher pig iron volumes and average selling prices. Revenue
declined 8% sequentially, primarily due to lower pig iron volume
and average selling prices.
Net income attributable to Tronox in the quarter of $16 million included non-recurring items such as
the settlement and a deferred tax benefit. Together, these totaled
$80 million or $0.51 per diluted share. Excluding these items,
adjusted net income attributable to Tronox (non-GAAP) was
$96 million, or $0.60 per diluted share, an increase of 45% and
40%, respectively.
Adjusted EBITDA of $240 million
represented an increase of 7% driven by higher pricing across all
products and favorable exchange rates, partially offset by higher
costs to serve our customers, increased commodity costs, impacts
from the extended downtime at the Company's Stallingborough, U.K.
TiO2 pigment plant, lower volumes and product mix.
Adjusted EBITDA margin was 24.9% for the quarter.
Sequentially, Adjusted EBITDA improved 3% due to higher average
selling prices and improved TiO2 volumes, partially
offset by higher costs to serve our customers, increased commodity
costs, impacts from the Stallingborough facility extended downtime,
lower zircon volumes, product mix and unfavorable exchange
rates.
The Company's selling, general and administrative expenses were
$78 million in the quarter. The
Company incurred an $85 million
one-time fee related to the settlement, inclusive of the break fee
and related interest. Tronox's first quarter net interest was
$30 million, a 39% decrease due to
lower debt levels and reduced interest rates compared to the prior
year. Depreciation, depletion and amortization expense was
$68 million.
Balance Sheet, Cash Flow and
Capital Allocation
Tronox ended the quarter with $2.6
billion of total debt and a net leverage ratio of 2.4x.
Available liquidity at the end of the quarter totaled $758 million, including $292 million in cash and cash equivalents and
$466 million available under
revolving credit agreements.
Free cash flow for the first quarter was $86 million after $103 million in capital
expenditures, including investments in key capital projects such as
newTRON, the Company's global business transformation project to
improve, automate, and digitize; and Atlas Campaspe, the mining
development project in Eastern
Australia that will sustain Tronox's internalization of
feedstocks and associated cost advantages and also provide
additional zircon supply. These investments are expected to
generate returns significantly above the Company's cost of capital
and sustain Tronox's position as a leading low-cost producer.
In the first quarter of 2022, the Company returned $25 million to shareholders through the
repurchase of approximately 1.4 million shares. Tronox expects free
cash flow generation to enable further debt reduction, annual
dividend increases, and share repurchases, taking into account the
significant capital expenditures forecasted this year.
Sustainability
In March, Tronox announced it had entered into a long-term power
purchase agreement with the South African independent power
producer, SOLA Group, to provide 200 MW of solar power to Tronox's
mines and smelters in the Republic of South Africa. This project is expected to
provide approximately 40% of Tronox's South African electricity
needs and lower its worldwide scope 1 and 2 emissions by
approximately 13%. The Company anticipates the project should be
fully implemented by the fourth quarter of 2023. This project is
only one example of numerous initiatives and investments being
pursued by Tronox to meet its publicly announced goal to align with
a global warming scenario below 2°C and achieve net zero greenhouse
gas emissions by 2050. More information about the Company's
sustainability initiatives will be available in the 2021
Sustainability Report, which is expected to be published mid-year
and will be expanded further upon at Tronox's 2022 Investor
Day.
Outlook
The 2022 outlook reflects continued solid demand as well as
persistent macro challenges including inflation and supply chain
disruptions.
- FY 2022:
-
- Reaffirming Adjusted EBITDA guided range at $1.025-$1.125
billion
- Reaffirming Adjusted diluted EPS guided range at $3.08 to $3.591
- Adjusting free cash flow expectation lower to at least
$265 million, reflecting the
settlement ($85 million), increased
2022 capital expenditures ($25
million) and increased working capital requirements
($25 million)
- Q2 2022: Adjusted EBITDA expected to be $265-280 million
|
1.
Assumes a corporate effective tax rate of approximately 20%,
which may vary depending on jurisdiction of earnings and tax
assets.
|
Mr. Romano concluded, "Based on what we see today, we remain
confident in our outlook for the year given the continued strong
demand trends we are seeing in the market. We are continuing to
monitor recent macro developments including the conflict in
Ukraine, which we anticipate will
have a muting effect on European growth, but given tight
inventories throughout the chain, we do not expect this to
materially impact our end market demand. We remain committed to
delivering on our commitments and driving value for our
stakeholders."
Webcast Conference Call
Tronox will conduct a webcast conference call on Thursday, April 28, 2022, at 8:00 a.m. ET (New
York). The live call is open to the public via
internet broadcast and telephone.
Internet Broadcast:
http://investor.tronox.com
Dial-in Telephone Numbers:
United States: 1-844-200-6205
International: 1- 929-526-1599
Access code: 603841
Conference Call Presentation Slides will be used during
the conference call and will be available on our website:
http://investor.tronox.com
Conference Call Replay: Available via the internet and
telephone beginning on April 28,
2022, 11:00 a.m. ET
(New York), until May 5, 2022, 5:00 p.m.
ET (New York)
Internet Replay:
http://investor.tronox.com
Replay Dial-in Telephone Numbers:
US Toll Free: 1-
866-813-9403
International: +44 204 525 0658
Replay Access Code: 329532
About Tronox
Tronox Holdings plc is one of the world's leading producers of
high-quality titanium products, including titanium dioxide pigment,
specialty-grade titanium dioxide products and high-purity titanium
chemicals; and zircon. We mine titanium-bearing mineral sands and
operate upgrading facilities that produce high-grade titanium
feedstock materials, pig iron and other minerals. With
approximately 6,500 employees across six continents, our rich
diversity, unmatched vertical integration model, and unparalleled
operational and technical expertise across the value chain,
position Tronox as the preeminent titanium dioxide producer in the
world. For more information about how our products add brightness
and durability to paints, plastics, paper and other everyday
products, visit tronox.com.
Cautionary Statement about
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 including anticipated synergies
based on our growth and other strategies, anticipated completion of
extensions and upgrades to our mining and operations, anticipated
trends in our business, anticipated costs and benefits of project
newTRON and Atlas Campaspe and the Company's anticipated capital
allocation strategy. 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, actual synergies, or achievements to differ
materially from the results, level of activity, performance,
anticipated synergies or achievements expressed or implied by the
forward-looking statements. Significant risks and uncertainties may
relate to, but are not limited to, macroeconomic conditions,
inflationary pressures, political instability, including the
ongoing Russia and Ukraine conflict and any expansion of such
conflict, supply chain disruptions, market conditions and price
volatility for titanium dioxide, zircon and other feedstock
materials, as well as global and regional economic downturns, that
adversely affect the demand for our end-use products; disruptions
in production at our mining and manufacturing facilities; and other
financial, economic, competitive, environmental, political, legal
and regulatory factors. These and other risk factors are discussed
in the Company's filings with the Securities and Exchange
Commission.
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, synergies 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 because of new information or future developments.
Use of Non-GAAP
Information
To provide investors and others with additional information
regarding the financial results of Tronox Holdings plc, we have
disclosed in this release certain non-U.S. GAAP operating
performance measures of EBITDA, Adjusted EBITDA, Adjusted EBITDA
margin and Adjusted net income attributable to Tronox, including
its presentation on a per share basis, and a non-U.S. GAAP
liquidity measure of Free Cash Flow. 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 from non-U.S. GAAP financial measures
presented by other companies. 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 is 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.
Media Contact: Melissa Zona
+1.636.751.4057
Investor Contact: Jennifer
Guenther
+1.646.960.6598
TRONOX HOLDINGS
PLC
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (U.S. GAAP)
|
(UNAUDITED)
|
(Millions of U.S.
dollars, except share and per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2022
|
|
2021
|
Net
sales
|
$
965
|
|
$
891
|
Cost of goods
sold
|
733
|
|
685
|
Gross
profit
|
232
|
|
206
|
Selling, general and
administrative expenses
|
78
|
|
81
|
Venator
settlement
|
85
|
|
-
|
Income from
operations
|
69
|
|
125
|
Interest
expense
|
(32)
|
|
(50)
|
Interest
income
|
2
|
|
1
|
Loss on extinguishment
of debt
|
(1)
|
|
(34)
|
Other expense,
net
|
(4)
|
|
(10)
|
Income before income
taxes
|
34
|
|
32
|
Income tax
provision
|
(18)
|
|
(6)
|
Net
income
|
16
|
|
26
|
Net income attributable
to noncontrolling interest
|
-
|
|
7
|
Net income
attributable to Tronox Holdings plc
|
$
16
|
|
$
19
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
Basic
|
$
0.10
|
|
$
0.13
|
Diluted
|
$
0.10
|
|
$
0.12
|
|
|
|
|
Weighted average
shares outstanding, basic (in thousands)
|
154,629
|
|
147,071
|
Weighted average
shares outstanding, diluted (in thousands)
|
159,577
|
|
153,928
|
|
|
|
|
Other Operating
Data:
|
|
|
|
Capital
expenditures
|
103
|
|
58
|
Depreciation, depletion
and amortization expense
|
68
|
|
84
|
TRONOX HOLDINGS
PLC
|
RECONCILIATION OF
NON-U.S. GAAP FINANCIAL MEASURES
|
(UNAUDITED)
|
(Millions of U.S.
dollars, except share and per share data)
|
|
|
|
|
RECONCILIATION OF
NET INCOME
|
ATTRIBUTABLE TO
TRONOX HOLDINGS PLC (U.S. GAAP)
|
TO ADJUSTED NET
INCOME
|
ATTRIBUTABLE TO
TRONOX HOLDINGS PLC (NON-U.S. GAAP)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2022
|
|
2021
|
|
|
|
|
Net income (loss)
attributable to Tronox Holdings plc (U.S. GAAP)
|
$
16
|
|
$
19
|
|
|
|
|
Venator settlement
(a)
|
85
|
|
-
|
Loss on extinguishment
of debt (b)
|
1
|
|
26
|
Severance charges
(c)
|
1
|
|
-
|
Transaction costs
(d)
|
-
|
|
18
|
Gain on asset sale
(e)
|
-
|
|
(2)
|
Costs associated with
former CEO retirement (f)
|
-
|
|
3
|
Costs associated with
Exxaro deal (g)
|
-
|
|
1
|
Income tax expense -
deferred tax assets (h)
|
(7)
|
|
-
|
Other (i)
|
-
|
|
1
|
Adjusted net income
attributable to Tronox Holdings plc (non-U.S. GAAP)
(1)
|
$
96
|
|
$
66
|
|
|
|
|
Diluted net income
(loss) per share (U.S. GAAP)
|
$
0.10
|
|
$
0.12
|
|
|
|
|
|
|
|
|
Venator settlement, per
share
|
0.53
|
|
-
|
Loss on extinguishment
of debt, per share
|
0.01
|
|
0.17
|
Severance charges, per
share
|
0.01
|
|
-
|
Transaction costs, per
share
|
-
|
|
0.12
|
Gain on asset sale, per
share
|
-
|
|
(0.01)
|
Costs associated with
former CEO retirement, per share
|
-
|
|
0.02
|
Costs associated with
Exxaro deal, per share
|
-
|
|
0.01
|
Income tax expense -
deferred tax assets, per share
|
(0.04)
|
|
-
|
Other, per
share
|
-
|
|
0.01
|
Diluted adjusted net
income per share attributable to Tronox Holdings plc (non-U.S.
GAAP) (2)
|
$
0.60
|
|
$
0.43
|
|
|
|
|
Weighted average shares
outstanding, diluted (in thousands)
|
159,577
|
|
153,928
|
|
|
|
|
(1) Only the loss on
extinguishment of debt in 2021 has been tax impacted. No income tax
impacts have been given to any other items as they were recorded in
jurisdictions with full valuation allowances.
|
(2) Diluted adjusted
net income per share attributable to Tronox Holdings plc was
calculated from exact, not rounded Adjusted net income attributable
to Tronox Holdings plc and share information.
|
|
(a) Represents breakage
fee including interest associated with the Venator settlement which
were recorded in "Venator settlement" in the unaudited Condensed
Consolidated Statements of Income.
|
(b) 2022 amount
represents the loss in connection with issuance of a new term loan
which closed in April 2022 but which expenses were incurred in the
current quarter. 2021 amount represents the loss in connection with
the following: 1) termination of its Wells Fargo Revolver, 2)
amendment and restatement of its term loan facility including the
new revolving credit facility, 3) termination of its Senior Notes
due 2026, and 4) issuance of its Senior Notes due 2029.
|
(c) Represents
severance charges for employees whose position was eliminated from
the Company which were recorded in "Selling, general and
administrative expenses" in the unaudited Condensed Consolidated
Statements of Income.
|
(d) Represents breakage
fee and other costs associated with the termination of the TTI
Transaction which were primarily recorded in "Other income
(expense)" in the unaudited Condensed Consolidated Statements of
Income.
|
(e) Represents the gain
on European Union carbon credits sold in March 2021 which were
recorded in "Cost of goods sold" in the unaudited Condensed
Consolidated Statement of Income.
|
(f) Represents costs
associated with the retirement agreement of the former CEO, which
includes $2 million for the acceleration of stock based
compensation, which were recorded in "Selling, general and
administrative expenses" in the unaudited Condensed Consolidated
Statements of Income.
|
(g) Represents costs
associated with the Exxaro flip-in transaction which were recorded
in "Selling, general and administrative expenses" in the unaudited
Condensed Consolidated Statements of Income.
|
(h) Represents a charge
to tax expense for the impact on deferred tax assets from a change
in tax rates in foreign tax jurisdictions.
|
(i) Represents other
activity not representative of ongoing operations of the
Company.
|
TRONOX HOLDINGS
PLC
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(UNAUDITED)
|
(Millions of U.S.
dollars, except share and per share data)
|
|
|
|
|
|
|
|
|
|
March 31,
2022
|
|
December 31,
2021
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
292
|
|
$
228
|
Restricted
cash
|
4
|
|
4
|
Accounts receivable
(net of allowance for credit losses of $4 million and $4
million
as of March 31, 2022 and December 31, 2021,
respectively)
|
651
|
|
631
|
Inventories,
net
|
1,050
|
|
1,048
|
Prepaid and other
assets
|
187
|
|
132
|
Income taxes
receivable
|
5
|
|
6
|
Total current
assets
|
2,189
|
|
2,049
|
|
|
|
|
Noncurrent
Assets
|
|
|
|
Property, plant and
equipment, net
|
1,770
|
|
1,710
|
Mineral leaseholds,
net
|
763
|
|
747
|
Intangible assets,
net
|
229
|
|
217
|
Lease right of use
assets, net
|
86
|
|
85
|
Deferred tax
assets
|
981
|
|
985
|
Other long-term
assets
|
197
|
|
194
|
Total
assets
|
$
6,215
|
|
$
5,987
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Accounts
payable
|
$
490
|
|
$
438
|
Accrued
liabilities
|
377
|
|
328
|
Short-term lease
liabilities
|
22
|
|
26
|
Long-term debt due
within one year
|
16
|
|
18
|
Income taxes
payable
|
18
|
|
12
|
Total current
liabilities
|
923
|
|
822
|
|
|
|
|
Noncurrent
Liabilities
|
|
|
|
Long-term debt,
net
|
2,567
|
|
2,558
|
Pension and
postretirement healthcare benefits
|
117
|
|
116
|
Asset retirement
obligations
|
146
|
|
139
|
Environmental
liabilities
|
66
|
|
66
|
Long-term lease
liabilities
|
61
|
|
55
|
Deferred tax
liabilities
|
176
|
|
157
|
Other long-term
liabilities
|
30
|
|
32
|
Total
liabilities
|
4,086
|
|
3,945
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
Shareholders'
Equity
|
|
|
|
Tronox Holdings plc
ordinary shares, par value $0.01 — 155,797,426 shares issued
and outstanding at March 31, 2022 and 153,934,677 shares issued
and
outstanding at December 31, 2021
|
2
|
|
2
|
Capital in excess of
par value
|
2,049
|
|
2,067
|
Retained
earnings
|
659
|
|
663
|
Accumulated other
comprehensive loss
|
(637)
|
|
(738)
|
Total Tronox
Holdings plc shareholders' equity
|
2,073
|
|
1,994
|
Noncontrolling
interest
|
56
|
|
48
|
Total
equity
|
2,129
|
|
2,042
|
Total liabilities
and equity
|
$
6,215
|
|
$
5,987
|
TRONOX HOLDINGS
PLC
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
(Millions of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2022
|
|
2021
|
Cash Flows from
Operating Activities:
|
|
|
|
Net income
|
$
16
|
|
$
26
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation, depletion
and amortization
|
68
|
|
84
|
Deferred income
taxes
|
4
|
|
(3)
|
Share-based
compensation expense
|
7
|
|
9
|
Amortization of
deferred debt issuance costs and discount on debt
|
2
|
|
3
|
Loss on extinguishment
of debt
|
1
|
|
34
|
Venator
settlement
|
85
|
|
-
|
Other non-cash items
affecting net income
|
2
|
|
14
|
Changes in assets and
liabilities:
|
|
|
|
Increase in accounts
receivable, net of allowance for credit losses
|
(11)
|
|
(120)
|
Decrease in
inventories, net
|
21
|
|
63
|
(Increase) decrease in
prepaid and other assets
|
(17)
|
|
32
|
Increase in accounts
payable and accrued liabilities
|
18
|
|
2
|
Net changes in income
tax payables and receivables
|
7
|
|
7
|
Changes in other
non-current assets and liabilities
|
(14)
|
|
(16)
|
Cash provided by
operating activities
|
189
|
|
135
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital
expenditures
|
(103)
|
|
(58)
|
Insurance
proceeds
|
-
|
|
1
|
Proceeds from sale of
assets
|
1
|
|
-
|
Cash used in investing
activities
|
(102)
|
|
(57)
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Repayments of long-term
debt
|
(3)
|
|
(2,260)
|
Proceeds from long-term
debt
|
-
|
|
2,375
|
Repurchase of common
stock
|
(25)
|
|
-
|
Call premiums
paid
|
-
|
|
(21)
|
Debt issuance
costs
|
-
|
|
(30)
|
Dividends
paid
|
(1)
|
|
(14)
|
Restricted stock and
performance-based shares settled in cash for withholding
taxes
|
-
|
|
(2)
|
Cash (used in) provided
by financing activities
|
(29)
|
|
48
|
|
|
|
|
Effects of exchange
rate changes on cash and cash equivalents and restricted
cash
|
6
|
|
(7)
|
|
|
|
|
Net increase in
cash, cash equivalents and restricted cash
|
64
|
|
119
|
Cash, cash
equivalents and restricted cash at beginning of
period
|
232
|
|
648
|
Cash, cash
equivalents and restricted cash at end of period
|
$
296
|
|
$
767
|
TRONOX HOLDINGS
PLC
|
RECONCILIATION OF
NET INCOME TO EBITDA AND ADJUSTED EBITDA (NON-U.S.
GAAP)
|
(UNAUDITED)
|
(Millions of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
2022
|
|
2021
|
|
|
|
|
Net income (U.S.
GAAP)
|
$
16
|
|
$
26
|
Interest
expense
|
32
|
|
50
|
Interest
income
|
(2)
|
|
(1)
|
Income tax
provision
|
18
|
|
6
|
Depreciation, depletion
and amortization expense
|
68
|
|
84
|
EBITDA (non-U.S.
GAAP)
|
132
|
|
165
|
Share-based
compensation (a)
|
7
|
|
9
|
Transaction costs
(b)
|
-
|
|
18
|
Venator settlement
(c)
|
85
|
|
-
|
Loss on extinguishment
of debt (d)
|
1
|
|
34
|
Costs associated with
former CEO retirement (e)
|
-
|
|
1
|
Gain on asset sale
(f)
|
-
|
|
(2)
|
Foreign currency
remeasurement (g)
|
8
|
|
(4)
|
Costs associated with
Exxaro deal (h)
|
-
|
|
1
|
Other items
(i)
|
7
|
|
3
|
Adjusted EBITDA
(non-U.S. GAAP)
|
$
240
|
|
$
225
|
|
(a) Represents non-cash
share-based compensation.
|
(b) Represents breakage
fee and other costs associated with the termination of
the TTI Transaction which were primarily recorded in
"Other expense, net" in the unaudited Condensed Consolidated
Statements of Income.
|
(c) Represents breakage
fee including interest associated with
the Venator settlement which were recorded in
"Venator settlement" in the unaudited Condensed Consolidated
Statements of Income.
|
(d) 2022 amount
represents the loss in connection with issuance of a new term loan
which closed in April 2022 but which expenses were incurred in the
current quarter. 2021 amount represents the loss in connection with
the following: 1) termination of its Wells Fargo Revolver, 2)
amendment and restatement of its term loan facility including the
new revolving credit facility, 3) termination of its Senior Notes
due 2026, and 4) issuance of its Senior Notes due 2029.
|
(e) Represents costs,
excluding share-based compensation, associated with the retirement
agreement of the former CEO which were recorded in "Selling,
general and administrative expenses" in the unaudited Condensed
Consolidated Statements of Income. The $2 million of share based
compensation expense associated with the former CEO is included in
the total share-based compensation amount of $9 million in the
table above.
|
(f) Represents the gain
on European Union carbon credits sold in March 2021 which were
recorded in "Cost of goods sold" in the unaudited Condensed
Consolidated Statement of Income.
|
(g) Represents realized
and unrealized gains and losses associated with foreign
currency remeasurement related to third-party and
intercompany receivables and liabilities denominated in a currency
other than the functional currency of the entity holding them,
which are included in "Other expense, net" in the unaudited
Condensed Consolidated Statements of Income.
|
(h) Represents costs
associated with the Exxaro flip-in transaction which are
included in "Selling, general and administrative expenses" in the
unaudited Condensed Consolidated Statements of Income.
|
(i) Includes noncash
pension and postretirement costs, asset write-offs,
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
Income.
|
TRONOX HOLDINGS
PLC
|
FREE CASH FLOW
(NON-U.S. GAAP)
|
(UNAUDITED)
|
(Millions of U.S.
dollars)
|
|
|
|
The following table
reconciles cash used in operating activities to free cash flow for
the three months ended March 31, 2022:
|
|
|
|
|
|
Consolidated
|
Cash provided by
operating activities
|
|
$
|
189
|
Capital
expenditures
|
|
(103)
|
Free
cash flow (non-U.S. GAAP)
|
|
$
|
86
|
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SOURCE Tronox Holdings plc