Delivered record earnings and strong margin
performance
Returned $91 million to
shareholders year-to-date
STAMFORD, Conn., July 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 June 30,
2022, as follows:
Second Quarter 2022 Financial Highlights:
- Produced revenue of $945 million,
an increase of 2% compared to the prior year, driven by higher
revenue from TiO2
- Generated income from operations of $190
million and net income of $375
million, inclusive of a reversal of a portion of the
valuation allowance in Australia
relating to deferred tax assets resulting in a non-cash benefit of
$262 million
- Achieved GAAP diluted EPS of $2.37; adjusted diluted EPS of $0.84 (non-GAAP) primarily due to the exclusion
of the Australian valuation allowance reversal of $1.65
- Delivered Adjusted EBITDA of $275
million, slightly above the midpoint of guidance, and an
Adjusted EBITDA margin of 29.1%, representing an improvement of 350
basis points year-over-year
- Invested $99 million in capital expenditures, primarily in
our newTRON and vertical integration initiatives
- Repurchased $25 million or
approximately 1.5 million shares during the second quarter; total
share repurchases of $50 million
year-to-date
Outlook
- Q3 2022 TiO2 volumes expected to be relatively flat
sequentially
- Q3 2022 Adjusted EBITDA expected to be $275-$295
million
This outlook is based on Tronox's views on current global
economic activity and is subject to changes and impacts associated
with the macroeconomic conditions, global supply chain, and
inflation-related challenges, among others.
Note: For the Company's guidance with respect to third
quarter 2022 and full year 2022 non-GAAP measures, we are not able
to provide without unreasonable effort the most directly comparable
GAAP financial measure, or reconciliation to such GAAP financial
measure, because certain items that impact such measures are
uncertain, out of the Company's control or cannot be reasonably
predicted.
Summary of Select Financial Results for the Quarter Ending
June 30, 2022
($M unless
otherwise noted)
|
Q2
2022
|
Q2
2021
|
Y-o-Y %
∆
|
Q1
2022
|
Q-o-Q %
∆
|
Revenue
|
$945
|
$927
|
2 %
|
$965
|
(2) %
|
TiO2
|
$769
|
$740
|
4 %
|
$773
|
(1) %
|
Zircon
|
$111
|
$121
|
(8) %
|
$108
|
3 %
|
Feedstock and other
products
|
$65
|
$66
|
(2) %
|
$84
|
(23) %
|
Income from
operations
|
$190
|
$150
|
27 %
|
$69
|
175 %
|
Net Income
|
$375
|
$77
|
387 %
|
$16
|
n/m
|
Net Income attributable
to Tronox
|
$375
|
$73
|
414 %
|
$16
|
n/m
|
GAAP diluted earnings
per share
|
$2.37
|
$0.46
|
415 %
|
$0.10
|
n/m
|
Adjusted diluted
earnings per share
|
$0.84
|
$0.61
|
38 %
|
$0.60
|
40 %
|
Adjusted
EBITDA
|
$275
|
$237
|
16 %
|
$240
|
15 %
|
Adjusted EBITDA
Margin %
|
29.1 %
|
25.6 %
|
350
bps
|
24.9 %
|
420
bps
|
Free cash
flow
|
($67)
|
$150
|
(145) %
|
$86
|
(178) %
|
|
|
|
|
|
|
|
Y-o-Y %
∆
|
|
Q-o-Q %
∆
|
|
Volume
|
Price
|
|
Volume
|
Price
|
TiO2
|
(9) %
|
15 %
|
|
(3) %
|
2 %
|
Local Currency
Basis
|
n/a
|
19 %
|
|
n/a
|
4 %
|
Zircon
|
(38) %
|
47 %
|
|
(5) %
|
8 %
|
Co-CEOs' Remarks
"We are pleased with Tronox's performance in the second quarter
and our employees' dedication to delivering on our commitments,"
commented John D. Romano, co-chief
executive officer. "The Company achieved a record Adjusted EBITDA
of $275 million, slightly above the
midpoint of our guided range, and an Adjusted EBITDA margin of
29.1%, exceeding expectations and improving 350 basis points
year-over-year, owing to improved pricing and favorable product
mix. This marks the twenty-first consecutive quarter in which
Tronox has delivered an Adjusted EBITDA margin above 20%, evidence
of the strength and resilience of our business. On a trailing
twelve-month basis, Tronox achieved an Adjusted EBITDA of
$1 billion, another demonstration of
our earnings potential and a testament to the benefits of our
vertically integrated business model."
Mr. Romano continued, "Pricing across all products continued its
upward trajectory in the second quarter, as a result of continued
execution of our commercial pricing strategy. Demand remained solid
in the quarter, though TiO2 volumes came in slightly
below our expectations due to ongoing supply chain challenges
across all regions. As we enter the second half of the year,
despite changing macroeconomic conditions and increasing inflation,
we continue to project solid financial performance through strong
execution and operating agility. At this stage we continue to see
steady demand across the majority of our end markets, though we
expect demand in Asia Pacific and
Europe to remain dynamic.
Notwithstanding, we are confident in Tronox's position and ability
to deliver for our customers given our integrated business model
and global footprint that allow us to quickly adapt to changing
market conditions."
Jean-François Turgeon, co-chief executive officer, added, "As we
emphasized at our Investor Day in June, we are committed to driving
continued value creation through our capital allocation strategy.
The investments we make today in key projects, including newTRON
and the mining development projects in Australia and South
Africa, support our future growth and profitability and are
critical to ensuring we remain competitive across all economic
scenarios while enabling improved return on capital. In addition,
we have returned $91 million to
shareholders year-to-date, through $50
million in share repurchases and $41
million in dividend payments. We expect to continue share
repurchases under the remaining ~$250
million program through February
2024 as cash generation permits."
Mr. Turgeon concluded, "We are proactively monitoring the
macroeconomic environment. We have ample levers available to ensure
sufficient liquidity under any conceivable scenario. We remain
focused on executing the strategy we detailed at Investor Day and
delivering on our commitments. Our business has never been
stronger, and we are confident we will continue to demonstrate the
value of our vertically integrated business model and deliver safe,
quality, low-cost, sustainable tons for our customers."
Second Quarter 2022 Results
(Comparisons are to prior year (Q2 2022 vs. Q2 2021) unless
otherwise noted)
The Company recorded second quarter revenue of $945 million, an increase of 2%, due to higher
TiO2 revenues. Revenue from TiO2 sales was
$769 million, an increase of 4%
driven by a 19% increase in average selling prices on a local
currency basis, or a 15% increase on a US dollar basis, partially
offset by a 9% decrease in volumes. Sequentially, TiO2
volumes decreased 3%, driven by lower volumes in Asia Pacific, partially offset by higher
volumes in all other regions, while average selling prices
increased 4% on a local currency basis, or 2% on a US dollar
basis.
Zircon revenue decreased 8% to $111
million driven by a 38% decrease in volumes, partially
offset by a 47% increase in average selling prices. Sequentially,
zircon revenue increased 3%, driven by an 8% increase in average
selling prices, partially offset by a 5% decline in volumes. The
volume decline year-over-year was due to higher sales from
inventory in 2021, while the volume decline sequentially was due to
logistics challenges and shipping delays.
Revenue from other products was $65
million, relatively in line with revenue in the year-ago
quarter. Lower pig iron volumes were partially offset by higher pig
iron average selling prices. Revenue declined 23% sequentially,
primarily due to lower pig iron volumes, partially offset by higher
pig iron average selling prices.
Net income attributable to Tronox in the quarter of $375 million included non-recurring items such as
the reversal of a tax valuation allowance of $262 million and a loss on extinguishment of debt
of $20 million. Together, these and
other adjustments totaled $241
million or $1.52 per diluted
share. Excluding these items, adjusted net income attributable to
Tronox (non-GAAP) was $134 million,
or $0.84 per diluted share, an
increase of 40% and 38%, respectively. The Australian tax valuation
allowance was reversed given the recent and anticipated earnings
generation of our Australian business.
Adjusted EBITDA of $275 million
represented an increase of 16% driven by higher pricing across all
products and favorable exchange rates, partially offset by higher
costs to serve our customers, including increased commodity costs
and higher freight costs, as well as lower volumes. Adjusted EBITDA
margin improved to 29.1% for the quarter.
Sequentially, Adjusted EBITDA increased 15% due to higher
average selling prices and improved manufacturing costs, partially
offset by lower volumes, higher freight costs and unfavorable
exchange rates.
The Company's selling, general and administrative expenses were
$73 million in the quarter. Tronox's
second quarter net interest expense was $26 million, a 24%
decrease due to lower debt levels and reduced interest rates
compared to the prior year. Depreciation, depletion and
amortization expense was $67 million.
Balance Sheet, Cash Flow and Capital Allocation
Tronox ended the quarter with $2.5
billion of total debt and a net leverage ratio of 2.5x.
Available liquidity at the end of the quarter totaled $508 million, including $112 million in cash and cash equivalents and
$396 million available under
revolving credit agreements. There are no significant debt
maturities until 2028 and no financial covenants on the Company's
term loans or bonds.
Free cash flow for the second quarter was a use of $67 million, due to the $85 million settlement payment in the quarter.
Second quarter capital expenditures were $99
million, 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 second quarter of 2022, the Company returned $25 million to shareholders through the
repurchase of approximately 1.5 million shares and paid
$41 million in dividends. On a
year-to-date basis, Tronox returned $91
million to shareholders across share repurchases and
dividend payments.
Sustainability
In June, Tronox published its 2021 sustainability report
detailing the significant steps taken over the last year to advance
its leadership role in sustainability and protecting the
environment. Melissa Zona, senior
vice president, chief sustainability and human resources officer,
commented, "The ESG targets we set in last year's report were our
first public targets and were done as steps toward achieving carbon
neutrality. Just one year later, we are updating and accelerating
these targets, enabled by successes across the organization."
Tronox remains committed to achieving carbon neutrality by 2050.
The Company's initial goal to reduce GHG emissions intensity
(compared to 2019 baseline) by 15% by 2025 has been increased to
35%. The initial goal of 35% by 2030 has been updated to 50%.
Tronox intends to reduce the amount of waste that it sends to
landfills by 15% in 2025 and 25% in 2030, with zero waste to
external dedicated landfills by 2050. The Company is targeting a
goal of zero injuries, zero incidents, and zero harm by building
capabilities in its people, plants, and processes. Tronox is also
striving to improve the gender balance and diversity of its
workforce, leadership and succession planning in order to build a
workplace that is even more representative of its local communities
and where all people feel valued, represented and respected. For
more details on these and other initiatives, download Tronox's 2021
Sustainability Report at
https://www.tronox.com/about-us/sustainability/sustainability-reports/.
Outlook
- Q3 2022 TiO2 volumes expected to be relatively flat
sequentially
- Q3 2022 Adjusted EBITDA expected to be $275-$295
million
- Reaffirm FY 2022 outlook from Investor Day:
-
- Adjusted EBITDA of $1.075 billion
to $1.125 billion
- Adjusted EPS of $3.15 to
$3.591
- Free cash flow greater than or equal to $300 million
- Assumes a corporate effective tax rate of approximately 20%,
which may vary depending on jurisdiction of earnings and tax
assets.
Mr. Romano concluded, "We remain confident in the mid- and
long-term fundamentals of our business, owing to the actions we
have taken over the last several years to create a stronger and
more resilient enterprise. While there have been recent shifts in
the broader macro-economic backdrop, and we are monitoring
developments given the dynamic market conditions, our business
remains sound. We are committed to executing against our strategy
and delivering value to our stakeholders."
Webcast Conference Call
Tronox will conduct a webcast conference call on Thursday, July 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 July 28, 2022,
by 11:00 a.m. ET (New York), until August
2, 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: 720357
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, the Company's anticipated capital
allocation strategy, and our sustainability goals, commitments and
programs. 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
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net
sales
|
$ 945
|
|
$ 927
|
|
$
1,910
|
|
$
1,818
|
Cost of goods
sold
|
682
|
|
700
|
|
1,415
|
|
1,385
|
Gross
profit
|
263
|
|
227
|
|
495
|
|
433
|
Selling, general and
administrative expenses
|
73
|
|
77
|
|
151
|
|
158
|
Venator
settlement
|
-
|
|
-
|
|
85
|
|
-
|
Income from
operations
|
190
|
|
150
|
|
259
|
|
275
|
Interest
expense
|
(28)
|
|
(36)
|
|
(60)
|
|
(86)
|
Interest
income
|
2
|
|
2
|
|
4
|
|
3
|
Loss on extinguishment
of debt
|
(20)
|
|
(23)
|
|
(21)
|
|
(57)
|
Other income (expense),
net
|
8
|
|
4
|
|
4
|
|
(6)
|
Income before income
taxes
|
152
|
|
97
|
|
186
|
|
129
|
Income tax benefit
(provision)
|
223
|
|
(20)
|
|
205
|
|
(26)
|
Net
income
|
375
|
|
77
|
|
391
|
|
103
|
Net income attributable
to noncontrolling interest
|
-
|
|
4
|
|
-
|
|
11
|
Net income
attributable to Tronox Holdings plc
|
$ 375
|
|
$ 73
|
|
$ 391
|
|
$ 92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
Basic
|
$
2.40
|
|
$
0.47
|
|
$
2.52
|
|
$
0.61
|
Diluted
|
$
2.37
|
|
$
0.46
|
|
$
2.46
|
|
$
0.59
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding, basic (in thousands)
|
155,867
|
|
153,557
|
|
155,252
|
|
150,361
|
Weighted average
shares outstanding, diluted (in thousands)
|
158,448
|
|
158,959
|
|
158,996
|
|
156,335
|
|
|
|
|
|
|
|
|
Other Operating
Data:
|
|
|
|
|
|
|
|
Capital
expenditures
|
99
|
|
60
|
|
202
|
|
118
|
Depreciation, depletion
and amortization expense
|
67
|
|
71
|
|
135
|
|
155
|
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
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Tronox Holdings plc (U.S. GAAP)
|
$ 375
|
|
$ 73
|
|
$ 391
|
|
$ 92
|
|
|
|
|
|
|
|
|
Venator settlement
(a)
|
-
|
|
-
|
|
85
|
|
-
|
Loss on extinguishment
of debt (b)
|
20
|
|
23
|
|
21
|
|
49
|
Severance charges and
related costs (c)
|
2
|
|
-
|
|
3
|
|
-
|
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)
|
(1)
|
|
-
|
|
(8)
|
|
-
|
Tax valuation allowance
(i)
|
(262)
|
|
-
|
|
(262)
|
|
-
|
Other (j)
|
-
|
|
-
|
|
-
|
|
1
|
Adjusted net income
attributable to Tronox Holdings plc (non-U.S. GAAP)
(1)
|
$ 134
|
|
$ 96
|
|
$ 230
|
|
$ 162
|
|
|
|
|
|
|
|
|
Diluted net income
(loss) per share (U.S. GAAP)
|
$
2.37
|
|
$
0.46
|
|
$
2.46
|
|
$
0.59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Venator settlement, per
share
|
-
|
|
-
|
|
0.53
|
|
-
|
Loss on extinguishment
of debt, per share
|
0.13
|
|
0.14
|
|
0.13
|
|
0.31
|
Severance charges and
related costs, per share
|
0.01
|
|
-
|
|
0.02
|
|
-
|
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
|
(0.01)
|
|
-
|
|
(0.05)
|
|
-
|
Tax valuation
allowance, per share
|
(1.65)
|
|
|
|
(1.65)
|
|
|
Other, per
share
|
-
|
|
-
|
|
-
|
|
0.01
|
Diluted adjusted net
income per share attributable to Tronox Holdings plc (non-U.S.
GAAP) (2)
|
$
0.84
|
|
$
0.61
|
|
$
1.44
|
|
$
1.04
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding, diluted (in thousands)
|
158,448
|
|
158,959
|
|
158,996
|
|
156,335
|
|
|
|
|
|
|
|
|
(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 the redemption of the 6.5%
Senior Secured Notes and issuance of a new term loan which closed
in April 2022. 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 its Senior Notes due 2025, 4) issuance of its Senior
Notes due 2029, and 5) voluntary prepayments made on the new Term
Loan Facility.
|
(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 the
reversal of the tax valuation allowance associated with unlimited
lived deferred tax assets within our Australian
jurisdiction.
|
(j) 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)
|
|
|
|
|
|
|
|
|
|
June 30,
2022
|
|
December 31,
2021
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
112
|
|
$
228
|
Restricted
cash
|
2
|
|
4
|
Accounts receivable
(net of allowance for credit losses of $4 million and $4 million as
of June 30, 2022 and December 31, 2021, respectively)
|
636
|
|
631
|
Inventories,
net
|
1,106
|
|
1,048
|
Prepaid and other
assets
|
143
|
|
132
|
Income taxes
receivable
|
5
|
|
6
|
Total current
assets
|
2,004
|
|
2,049
|
|
|
|
|
Noncurrent
Assets
|
|
|
|
Property, plant and
equipment, net
|
1,745
|
|
1,710
|
Mineral leaseholds,
net
|
726
|
|
747
|
Intangible assets,
net
|
242
|
|
217
|
Lease right of use
assets, net
|
84
|
|
85
|
Deferred tax
assets
|
1,221
|
|
985
|
Other long-term
assets
|
198
|
|
194
|
Total
assets
|
$ 6,220
|
|
$
5,987
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Accounts
payable
|
$
508
|
|
$
438
|
Accrued
liabilities
|
256
|
|
328
|
Short-term lease
liabilities
|
19
|
|
26
|
Short-term
debt
|
72
|
|
-
|
Long-term debt due
within one year
|
17
|
|
18
|
Income taxes
payable
|
13
|
|
12
|
Total current
liabilities
|
885
|
|
822
|
|
|
|
|
Noncurrent
Liabilities
|
|
|
|
Long-term debt,
net
|
2,449
|
|
2,558
|
Pension and
postretirement healthcare benefits
|
111
|
|
116
|
Asset retirement
obligations
|
140
|
|
139
|
Environmental
liabilities
|
65
|
|
66
|
Long-term lease
liabilities
|
58
|
|
55
|
Deferred tax
liabilities
|
156
|
|
157
|
Other long-term
liabilities
|
30
|
|
32
|
Total
liabilities
|
3,894
|
|
3,945
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
Shareholders'
Equity
|
|
|
|
Tronox Holdings plc
ordinary shares, par value $0.01 — 154,433,305 shares issued and
outstanding at June 30, 2022 and 153,934,677 shares issued and
outstanding at December 31, 2021
|
2
|
|
2
|
Capital in excess of
par value
|
2,031
|
|
2,067
|
Retained
earnings
|
1,014
|
|
663
|
Accumulated other
comprehensive loss
|
(772)
|
|
(738)
|
Total Tronox
Holdings plc shareholders' equity
|
2,275
|
|
1,994
|
Noncontrolling
interest
|
51
|
|
48
|
Total
equity
|
2,326
|
|
2,042
|
Total liabilities
and equity
|
$ 6,220
|
|
$
5,987
|
TRONOX HOLDINGS
PLC
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
(Millions of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
Cash Flows from
Operating Activities:
|
|
|
|
Net income
|
$391
|
|
$
103
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation, depletion
and amortization
|
135
|
|
155
|
Deferred income
taxes
|
(240)
|
|
2
|
Share-based
compensation expense
|
14
|
|
16
|
Amortization of
deferred debt issuance costs and discount on debt
|
4
|
|
5
|
Loss on extinguishment
of debt
|
21
|
|
57
|
Other non-cash items
affecting net income
|
22
|
|
24
|
Changes in assets and
liabilities:
|
|
|
|
Increase in accounts
receivable, net of allowance for credit losses
|
(21)
|
|
(140)
|
(Increase) decrease in
inventories, net
|
(80)
|
|
110
|
(Increase) decrease in
prepaid and other assets
|
(3)
|
|
28
|
Increase in accounts
payable and accrued liabilities
|
8
|
|
17
|
Net changes in income
tax payables and receivables
|
2
|
|
4
|
Changes in other
non-current assets and liabilities
|
(32)
|
|
(36)
|
Cash provided by
operating activities
|
221
|
|
345
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
Capital
expenditures
|
(202)
|
|
(118)
|
Insurance
proceeds
|
-
|
|
1
|
Loans
|
-
|
|
-
|
Proceeds from sale of
assets
|
1
|
|
1
|
Cash used in investing
activities
|
(201)
|
|
(116)
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
Repayments of
short-term debt
|
(15)
|
|
-
|
Repayments of long-term
debt
|
(507)
|
|
(2,846)
|
Proceeds from long-term
debt
|
396
|
|
2,375
|
Proceeds from
short-term debt
|
87
|
|
-
|
Repurchase of common
stock
|
(41)
|
|
-
|
Call premiums
paid
|
(18)
|
|
(40)
|
Debt issuance
costs
|
(4)
|
|
(34)
|
Proceeds from the
exercise of options
|
-
|
|
3
|
Dividends
paid
|
(41)
|
|
(28)
|
Restricted stock and
performance-based shares settled in cash for withholding
taxes
|
-
|
|
(3)
|
Cash used in financing
activities
|
(143)
|
|
(573)
|
|
|
|
|
Effects of exchange
rate changes on cash and cash equivalents and restricted
cash
|
5
|
|
3
|
|
|
|
|
Net decrease in
cash, cash equivalents and restricted cash
|
(118)
|
|
(341)
|
Cash, cash
equivalents and restricted cash at beginning of
period
|
232
|
|
648
|
Cash, cash
equivalents and restricted cash at end of period
|
$114
|
|
$
307
|
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
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
Net income (U.S.
GAAP)
|
$375
|
|
$
77
|
|
$391
|
|
$103
|
Interest
expense
|
28
|
|
36
|
|
60
|
|
86
|
Interest
income
|
(2)
|
|
(2)
|
|
(4)
|
|
(3)
|
Income tax
provision
|
(223)
|
|
20
|
|
(205)
|
|
26
|
Depreciation, depletion
and amortization expense
|
67
|
|
71
|
|
135
|
|
155
|
EBITDA (non-U.S.
GAAP)
|
245
|
|
202
|
|
377
|
|
367
|
Share-based
compensation (a)
|
7
|
|
7
|
|
14
|
|
16
|
Transaction costs
(b)
|
-
|
|
-
|
|
-
|
|
18
|
Venator settlement
(c)
|
-
|
|
-
|
|
85
|
|
-
|
Loss on extinguishment
of debt (d)
|
20
|
|
23
|
|
21
|
|
57
|
Costs associated with
former CEO retirement (e)
|
-
|
|
-
|
|
-
|
|
1
|
Gain on asset sale
(f)
|
-
|
|
-
|
|
-
|
|
(2)
|
Foreign currency
remeasurement (g)
|
(4)
|
|
-
|
|
4
|
|
(4)
|
Costs associated with
Exxaro deal (h)
|
-
|
|
-
|
|
-
|
|
1
|
Severance charges and
related costs (i)
|
2
|
|
-
|
|
3
|
|
-
|
Other items
(j)
|
5
|
|
5
|
|
11
|
|
8
|
Adjusted EBITDA
(non-U.S. GAAP)
|
$275
|
|
$237
|
|
$515
|
|
$462
|
|
|
|
|
|
|
|
|
(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 income
(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 the redemption of the 6.5%
Senior Secured Notes and the issuance of a new term loan which
closed in April 2022. 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 its Senior Notes due 2025, 4) issuance of its Senior
Notes due 2029 and 5) voluntary prepayments made on the new Term
Loan Facility.
|
(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 $16 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
income (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) 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.
|
(j) 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 income
(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 six months ended June 30, 2022:
|
|
|
|
|
|
Consolidated
|
Cash provided by
operating activities
|
|
$
221
|
Capital
expenditures
|
|
(202)
|
Free
cash flow (non-U.S. GAAP)
|
|
$
19
|
TRONOX HOLDINGS
PLC
|
RECONCILIATION OF
TRAILING TWELVE MONTH NET INCOME TO EBITDA AND ADJUSTED EBITDA
(NON-U.S. GAAP)
|
(UNAUDITED)
|
(Millions of U.S.
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Trailing Twelve
Month
Adjusted EBITDA
|
|
|
September 30,
2021
|
December 31,
2021
|
March 31,
2022
|
June 30,
2022
|
|
|
|
|
|
|
|
|
|
Net income (U.S.
GAAP)
|
|
$
113
|
$
87
|
$
16
|
$375
|
|
$
591
|
Interest
expense
|
|
37
|
34
|
32
|
28
|
|
131
|
Interest
income
|
|
(1)
|
(3)
|
(2)
|
(2)
|
|
(8)
|
Income tax
provision
|
|
28
|
17
|
18
|
(223)
|
|
(160)
|
Depreciation, depletion
and amortization expense
|
|
72
|
70
|
68
|
67
|
|
277
|
EBITDA (non-U.S.
GAAP)
|
|
249
|
205
|
132
|
245
|
|
831
|
Share-based
compensation (a)
|
|
7
|
8
|
7
|
7
|
|
29
|
Venator settlement
(b)
|
|
-
|
-
|
85
|
-
|
|
85
|
Loss on extinguishment
of debt (c)
|
|
3
|
5
|
1
|
20
|
|
29
|
Foreign currency
remeasurement (d)
|
|
(10)
|
(2)
|
8
|
(4)
|
|
(8)
|
Costs associated with
Exxaro deal (e)
|
|
-
|
5
|
-
|
-
|
|
5
|
Office closure costs
(f)
|
|
-
|
3
|
-
|
-
|
|
3
|
Severance charges and
related costs (g)
|
|
-
|
-
|
-
|
2
|
|
2
|
Other items
(h)
|
|
3
|
9
|
7
|
5
|
|
24
|
Adjusted EBITDA
(non-U.S. GAAP)
|
|
$
252
|
$
233
|
$ 240
|
$275
|
|
$
1,000
|
|
|
|
|
|
|
|
|
(a) Represents non-cash
share-based compensation.
|
(b) Represents breakage
fee including interest associated with the Venator settlement which
were recorded in "Venator settlement" in the unaudited Condensed
Consolidated Statements of Income.
|
(c) 2022 amount
represents the loss in connection with the redemption of the 6.5%
Senior Secured Notes and the issuance of a new term loan which
closed in April 2022. 2021 amount represents the loss in connection
with voluntary prepayments made on the Term Loan
Facility.
|
(d) 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
income (expense), net" in the unaudited Condensed Consolidated
Statements of Income.
|
(e) 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.
|
(f) Represents
impairments of our right-of-use assets associated with the early
termination of our leases and other costs related to the closure of
our Baltimore and New York City offices which are included in
"Selling, general and administrative expenses" in the unaudited
Condensed Consolidated Statements of Income.
|
(g) 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.
|
(h) 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 income
(expense), net" in the unaudited Condensed Consolidated Statements
of Income.
|
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SOURCE Tronox Holdings plc