UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM 8-K



CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) May 7, 2020 (May 6, 2020)



TRONOX HOLDINGS PLC
(Exact Name of Registrant as Specified in Its Charter)



England and Wales
001-35573
98-1467236
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)

263 Tresser Boulevard, Suite 1100
 
Laporte Road, Stallingborough
Stamford, Connecticut 06901
 
Grimsby, North East Lincolnshire, DN40 2PR, UK

 (Address of Principal Executive Offices) (Zip Code)

(203) 705-3800
(Registrant’s Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)



Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)
Name of exchange on which registered
Ordinary shares, par value $0.01 per share
TROX
NYSE

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐



Item 2.02.
Results of Operations and Financial Condition.

Attached as Exhibit 99.1 is a copy of a press release of Tronox Holdings plc (the “Company”), dated May 6, 2020, reporting the Company’s financial results for the first quarter ended March 31, 2020. Such information, including the Exhibit attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01.
Financial Statements and Exhibits.

(d) Exhibits.

Exhibit
No.
 
Description
 
Press Release, dated May 6, 2020 reporting Tronox Holdings plc’s financial results for the first quarter 2020.
104
 
Inline XBRL for the cover page of this Current Report on Form 8-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
TRONOX HOLDINGS PLC
     
Date: May 7, 2020
By:
/s/ Jeffrey Neuman
  Name:
Jeffrey Neuman
  Title: Senior Vice President, General Counsel and Secretary




Exhibit 99.1

Tronox Reports First Quarter 2020 Financial Results
 
Q1 2020 Revenue consistent with preliminary results
 
Q1 2020 Adjusted EBITDA and Adjusted EPS exceeded preliminary results

First Quarter 2020 Financial Highlights:

Revenue of $722 million

Income from operations of $79 million; Net income of $40 million

Adjusted EBITDA of $174 million; Adjusted EBITDA margin of 24 percent (Non-GAAP)

Total acquisition synergies of $45 million, with $38 million reflected within EBITDA (Non-GAAP) and $7 million within taxes and other synergies

GAAP diluted EPS of $0.22; Adjusted diluted EPS of $0.29 (Non-GAAP)

TiO2 sales volumes up 7 percent and selling prices level sequentially

Zircon sales volumes remained level sequentially, offset by 8 percent lower selling prices which were partially influenced by a continued shift to standard grade from premium grade

All sites remain operational and have been designated as essential given the applications of TiO2, Zircon, and other co-products in critical products

Strong Financial Position and Cash Flow:

Over $1 billion of available liquidity following our recent debt offering, including over $700 million in pro forma cash and cash equivalents as of March 31, 2020(1)

No near-term maturities on our term loan or notes until 2024

Reducing expected full year 2020 capital expenditures by at least $50 million to $225 million and working capital to $40-50 million from $75-100 million


(1) Pro forma impact on March 31, 2020 balance sheet after giving effect for the $500 million senior secured notes offering and repayment of the $200 million ABL / credit facility draw downs, completed May 1, 2020

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STAMFORD, Conn., May 6, 2020 – Tronox Holdings plc (NYSE:TROX) (“Tronox” or the “Company”), the world’s leading integrated manufacturer of titanium dioxide pigment, today reported its financial results for the quarter ending March 31, 2020, as follows:

Summary of Financial Results for the Quarter Ending March 31, 2020

Reported Basis

(Millions of dollars)
   
Q1 2020
     
Q1 2019
     
Y-o-Y
%∆
   
Q4 2019
     
Q-o-Q % ∆

Revenue
 
$
722
   
$
390
     
85
%
 
$
693
     
4
%
TiO2
   
580
     
277
     
109
%
   
544
     
7
%
Zircon
   
65
     
64
     
2
%
   
71
     
(8
%)
Feedstock and other products
   
77
     
49
     
57
%
   
78
     
(1
%)
Net Income (Loss)
 
$
40
   
$
(30
)
   
n/
m
 
$
(5
)
   
n/
m
Adjusted EBITDA
 
$
174
   
$
80
     
118
%
 
$
156
     
12
%
Adjusted EBITDA Margin %
   
24
%
   
21
%
 
3 pts
     
23
%
 
1 pt
 
                                         
   
Y-o-Y % ∆
   
Q-o-Q % ∆
 
   
Volume
   
Price
   
Volume
   
Price
 
TiO2
   
115
%
   
(2
%)
   
7
%
   
0
%
Local Currency Basis
   
-
     
(3
%)
   
-
     
0
%
Zircon
   
21
%
   
(16
%)
   
0
%
   
(8
%)

Pro Forma Basis

(Millions of dollars)
   
Q1 2020
     
Q1 2019
     
Y-o-Y
%∆
   
Q4 2019
     
Q-o-Q % ∆

Revenue
 
$
722
   
$
720
     
0
%
 
$
693
     
4
%
TiO2
   
580
     
570
     
2
%
   
544
     
7
%
Zircon
   
65
     
82
     
(21
%)
   
71
     
(8
%)
Feedstock and other products
   
77
     
68
     
13
%
   
78
     
(1
%)
Net Income (Loss)
 
$
40
   
$
(18
)
 
nm
   
$
1
   
nm
 
Adjusted EBITDA
 
$
174
   
$
141
     
23
%
 
$
156
     
12
%
Adjusted EBITDA Margin %
   
24
%
   
20
%
 
4 pts
     
23
%
 
1 pt
 
                                         
   
Y-o-Y % ∆
   
Q-o-Q % ∆
 
   
Volume
   
Price
   
Volume
   
Price
 
TiO2
   
6
%
   
(1
%)
   
7
%
   
0
%
Local Currency Basis
   
-
     
(3
%)
   
-
     
0
%
Zircon
   
(7
%)
   
(16
%)
   
0
%
   
(8
%)

CEO Commentary
Jeffry N. Quinn, chairman and chief executive officer commented, “Tronox’s first quarter results came in slightly above our previously announced preliminary results, as we delivered Adjusted EBITDA of $174 million, with an Adjusted EBITDA margin of 24 percent, and Adjusted EPS of $0.29.  These strong results were attributable to the benefits of our geographic diversity, vertically integrated global footprint, favorable end market exposure, and delivery of Cristal acquisition synergies.  I am grateful to our employees around the world who have continued to deliver safe, quality, low-cost tons for our customers, while adapting our operations to manage through the ongoing COVID-19 pandemic.

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“Our focus during the ongoing COVID-19 pandemic continues to be on protecting the health and safety of our employees.  To this end, we have implemented stringent and prudent protocols at all our worldwide locations.  Our operations have been designated as essential given the applications of TiO2, Zircon, and other co-products in critical products such as food and medical packaging, medical equipment, pharmaceuticals, and personal protective gear.  All our sites are operating, and we continue to work diligently to ensure business continuity to meet our customers’ needs.

“We continue to monitor the market conditions which are evolving each day.  Demand for TiO2 remains mixed across regions, with North America being the most resilient and China improving, offset by weaker demand in regions hit hardest by the virus, such as southern Europe, Brazil, and India.  Zircon demand also remains mixed with recovering volumes in China offset by weaker demand in southern Europe and India.

“Based upon the evolving status of social restrictions, the uncertain plans for the re-opening of economies around the world, and our most recent conversations with and public statements by our customers, our current expectation is for second quarter TiO2 volumes to decline in the high teens to low twenties percent range versus first quarter 2020.  Zircon volumes for the second quarter are anticipated to remain largely in line with the first quarter.

“Our liquidity remains strong.  Last week, we successfully completed the offering of our $500 million 6.5% 2025 senior secured notes, with the proceeds to be used for general corporate purposes, including the repayment of existing indebtedness, capital expenditures, strategic investments and transactions, working capital and other business opportunities.  We used a portion of the proceeds to pay down the $200 million drawn on our ABL and revolving credit facilities at the end of March.

Mr. Quinn concluded, “We are proactively managing our cash flow through cost reductions, harvesting of working capital, and reducing capital expenditures.  We have ample levers available to ensure sufficient liquidity under any conceivable scenario.  We remain focused on execution, operational excellence, delivering synergies, and enhancing our vertical integration strategy, which has created an enterprise with greater stability in financial performance and cash generation.”

3 | Page

On May 6, 2020, Tronox’s Board of Directors declared a quarterly dividend of $0.07 per share, payable on May 29, 2020 to shareholders of record as of the close of business on May 18, 2020.

Financial Summary for the Quarter Ending March 31, 2020(1)

Tronox reported revenue of $722 million for the first quarter 2020, in line with first quarter 2019 revenues of $720 million on a pro forma basis.  Income from operations of $79 million compared to $46 million in the year-ago quarter on a pro forma basis.  Net income attributable to Tronox was $32 million, or $0.22 per diluted share, compared to a net loss attributable to Tronox of $23 million, or $0.14 per diluted share, in the year-ago quarter on a pro forma basis.  Net income attributable to Tronox in the first quarter 2020 included restructuring and integration costs related to the Cristal acquisition that totaled $9 million or $0.07 per diluted share.  Excluding these items, adjusted net income attributable to Tronox (Non-GAAP) was $41 million, or $0.29 per diluted share.  Adjusted EBITDA of $174 million increased 23 percent compared to $141 million on a pro forma basis in the prior-year quarter.


(1) Net income, Adjusted EBITDA and Adjusted EPS increased from preliminary results due to purchase accounting related adjustments.
Note: Since Tronox and Cristal combined their respective businesses on April 10, 2019 and to assist in the following discussion of first quarter 2020 performance compared to the first quarter 2019, we have provided the results on both a pro forma basis and a reported basis.

First Quarter 2020 vs. First Quarter 2019

Reported Basis

Revenue of $722 million increased 85 percent compared to $390 million

TiO2 sales of $580 million, including revenue from the acquired Cristal operations, increased 109 percent compared to $277 million

Zircon sales of $65 million, including revenue from the acquired Cristal operations, increased 2 percent from $64 million

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Feedstock and other products sales of $77 million, including revenue from the acquired Cristal operations, increased 57 percent from $49 million

Adjusted EBITDA of $174 million increased 118 percent compared to $80 million

Pro Forma Basis

Revenue of $722 million was in line with revenue of $720 million in the year-ago quarter

TiO2 sales of $580 million were 2 percent higher compared to $570 million; sales volumes increased 6 percent; selling prices were 3 percent lower on a local currency basis and 1 percent lower on a U.S. dollar basis

Zircon sales of $65 million were 21 percent lower than $82 million in the year-ago quarter; sales volumes were 7 percent lower and selling prices were 16 percent lower

Feedstock and other products sales of $77 million increased 13 percent from $68 million

Adjusted EBITDA of $174 million was 23 percent higher than $141 million in the year-ago quarter, driven by synergies, favorable foreign exchange rates, the absence of deferred margin build and higher TiO2 and CP slag volumes, partially offset by increased production costs and lower ore grades at our Australian mine sites

First Quarter 2020 vs. Fourth Quarter 2019

Reported Basis

Revenue of $722 million increased 4 percent compared to $693 million

TiO2 sales of $580 million were 7 percent higher than $544 million; sales volumes increased 7 percent – driven by resiliency in North America, strong demand in EMEA and late in the quarter demand recovery in China, partially offset by slightly weaker demand in other Asia Pacific countries – and selling prices were level sequentially

Zircon sales of $65 million decreased 8 percent from $71 million, driven by an 8 percent decrease in selling prices which were partially influenced by a continued shift to standard grade from premium grade

Feedstock and other products sales of $77 million were relatively in line compared to $78 million

Adjusted EBITDA of $174 million increased 12 percent compared to $156 million, primarily due to increased TiO2 volumes, synergies, and favorable foreign exchange rates

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Other Financial Information

On a pro forma basis as of March 31, 2020, after giving effect to our $500 million debt offering and $200 million repayment of credit facilities, debt was $3.5 billion and debt, net of cash and cash equivalents was $2.8 billion, excluding restricted cash

Following our recent debt offering and credit facility repayments, our liquidity was over $1 billion on a pro forma basis as of March 31, 2020, comprised of pro forma cash and cash equivalents of approximately $720 million and $350 million available under revolving credit agreements

In the first quarter 2020, capital expenditures were $38 million and depreciation, depletion and amortization expense was $71 million

Free cash flow for the quarter was $(66) million, primarily due to strong sales in March which increased our accounts receivables above normal and a reduction in payables, which is expected to be reversed in the second quarter

Webcast Conference Call

Tronox will conduct a webcast conference call on Thursday, May 7, 2020 at 8:30 a.m. ET (New York).  The live call is open to the public via internet broadcast and telephone.

Internet Broadcast:  Tronox.com
Dial-in Telephone Numbers:
U.S. / Canada: +1.877.831.3840
International: +1.224.633.1393
Conference ID: 9961929

Conference Call Presentation Slides will be used during the conference call and will be available on our website: tronox.com

Conference Call Replay: Available via the internet and telephone beginning on May 7, 2020, 11:30 a.m. ET (New York), until May 14, 2020, 11:30 a.m. ET (New York)

Internet Replay: Tronox.com
Replay Dial-in Telephone Numbers:
U.S. / Canada: +1.855.859.2056
International: +1.404.537.3406
Conference ID: 9961929

6 | Page

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 nearly 7,000 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.

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 the effects of the COVID-19 pandemic and anticipated synergies based on our growth and other 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, 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, business and market disruptions related to the COVID-19 pandemic, market conditions and price volatility for titanium dioxide, zircon and other feedstock materials, as well as global and regional economic downturns, including as a result of the COVID-19 pandemic, 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 (SEC).

7 | Page

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-U.S. GAAP Financial Information

To provide investors and others with additional information regarding the financial results of Tronox Holdings plc, we have disclosed in this press release certain non-U.S. GAAP operating performance measures of EBITDA, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted net loss 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.

8 | Page

Management believes these non-U.S. GAAP financial measures:

Reflect the ongoing business of Tronox Holdings plc 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 the operating results and future prospects of Tronox Holdings plc;

Provide an additional view of the operating performance of the Company by adding interest expense & income, income taxes, depreciation, depletion and amortization to the net income.  Further adjustments due to gain (loss) on extinguishment of debt, stock-based compensation charges, transaction costs associated with acquisitions, integration costs, purchase accounting adjustments, foreign currency re-measurements, impairments, settlements of pension and postretirement plans, impacts of tax settlements on non-income related taxes, severance expense, and noncash pension and postretirement expense and accretion expense are made to exclude items that are either non-cash or unusual in nature;

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 income (loss) attributable to Tronox Holdings plc” 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.

9 | Page

Unaudited Pro Forma Financial Information

On April 10, 2019, we announced the completion of the acquisition of the TiO2 business of Cristal which impacts the comparability of the reported results for the first quarter of 2020 compared to the first quarter of 2019.  Since Tronox and Cristal have combined their respective businesses effective with the merger date of April 10, 2019, the three months ended March 31, 2020 reflect the results of the combined business from April 10, 2019, while the three months ended March 31, 2019 include only the results of the legacy Tronox business. To assist with a discussion of the first quarter of 2020 and the first quarter of 2019 results on a comparable basis, certain supplemental unaudited pro forma income statement and Adjusted EBITDA information is provided on a consolidated basis and is referred to as "pro forma information.”  The pro forma information has been prepared on a basis consistent with Article 11 of Regulation S-X, assuming the merger and merger-related divestitures of Cristal's North American TiO2 business and the 8120 paper laminate grade had been consummated on January 1, 2018. In preparing this pro forma information, the historical financial information has been adjusted to give effect to pro forma adjustments that are (i) directly attributable to the business combination and other transactions presented herein, such as the merger-related divestitures, (ii) factually supportable, and (iii) expected to have a continuing impact on the combined entity’s consolidated results. The pro forma information is based on management's assumptions and is presented for illustrative purposes and does not purport to represent what the results of operations would actually have been if the business combination and merger-related divestitures had occurred as of the dates indicated or what the results would be for any future periods. Also, the pro forma information does not include the impact of any revenue, cost or other operating synergies in the periods prior to the acquisition that may result from the business combination or any related restructuring costs.

Media Contact: Melissa Zona
+1.636.751.4057

Investor Contact: Jennifer Guenther
+1.646.960.6598

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TRONOX HOLDINGS PLC
CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. GAAP)
(UNAUDITED)
(Millions of U.S. dollars, except share and per share data)

   
Three Months Ended
March 31,
 
   
2020
   
2019
 
Net sales
 
$
722
   
$
390
 
Cost of goods sold
   
547
     
307
 
Gross profit
   
175
     
83
 
Selling, general and administrative expenses
   
94
     
67
 
Restructuring
   
2
     
-
 
Income from operations
   
79
     
16
 
Interest expense
   
(45
)
   
(49
)
Interest income
   
3
     
9
 
Loss on extinguishment of debt
   
-
     
(2
)
Other income (expense), net
   
10
     
(2
)
Income (loss) before income taxes
   
47
     
(28
)
Income tax provision
   
(7
)
   
(2
)
Net income (loss)
   
40
     
(30
)
Net income attributable to noncontrolling interest
   
8
     
4
 
Net income (loss) attributable to Tronox Holdings plc
 
$
32
   
$
(34
)
                 
Earnings (loss) per share:
               
Basic
 
$
0.23
   
$
(0.27
)
Diluted
 
$
0.22
   
$
(0.27
)
                 
Weighted average shares outstanding, basic (in thousands)
   
142,736
     
124,296
 
Weighted average shares outstanding, diluted (in thousands)
   
143,596
     
124,296
 
                 
Other Operating Data:
               
Capital expenditures
   
38
     
25
 
Depreciation, depletion and amortization expense
   
71
     
47
 

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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 (LOSS) INCOME
ATTRIBUTABLE TO TRONOX HOLDINGS PLC  (U.S. GAAP)
TO ADJUSTED NET INCOME (LOSS)
ATTRIBUTABLE TO TRONOX HOLDINGS PLC (NON-U.S. GAAP) 

 
 
Three Months Ended March 31,
 
 
 
2020
   
2019
 
 
           
Net (loss) income attributable to Tronox Holdings plc (U.S. GAAP)
 
$
32
   
$
(34
)
Transaction costs (a)
   
-
     
8
 
Restructuring (b)
   
2
     
-
 
Integration costs (c)
   
6
     
-
 
Separation costs related to divested business (d)
   
1
     
-
 
Loss on extinguishment of debt (e)
   
-
     
2
 
Charge for capital gains tax payment to Exxaro (f)
   
-
     
1
 
Adjusted net income (loss) attributable to Tronox Holdings plc (non-U.S. GAAP)  (1)
 
$
41
   
$
(23
)
 
               
Diluted net income (loss) per share (U.S. GAAP)
 
$
0.22
   
$
(0.27
)
 
               
Transaction costs, per share
   
-
     
0.06
 
Restructuring, per share
   
0.02
     
-
 
Integration costs, per share
   
0.04
     
-
 
Separation costs related to divested business
   
0.01
     
-
 
Loss on extinguishment of debt, per share
   
-
     
0.02
 
Charge for capital gains tax payment to Exxaro, per share
   
-
     
0.01
 
Diluted adjusted net (loss) income per share attributable to Tronox Holdings plc (non-U.S. GAAP)
 
$
0.29
   
$
(0.18
)
 
               
Weighted average shares outstanding, diluted (in thousands)
   
143,596
     
124,296
 

(1) Only the restructuring amounts for the three months of 2020 have been tax impacted.  No income tax impacts have been given to other items as they were recorded in jurisdictions with full valuation allowances.
(a) Represents transaction costs primarily associated with the Cristal Transaction which were recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations.
(b) Represents amounts for employee-related costs, including severance, net of tax .
(c) Represents Integration costs associated with the Cristal acquisition after the acquisition which were recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations.
(d) Represents separation costs associated with the divestiture of the Cristal North American TiO2 business which were recorded in "Selling, general and administrative expenses" in the unaudited Condensed Consolidated Statement of Operations.
(e) 2019 amounts represent the loss in connection with the modification of the Wells Fargo Revolver and termination of the ABSA Revolver and a voluntary prepayment made on the Term Loan Facility.
(f) Represents the expected payment to Exxaro for capital gains tax on the disposal of its ordinary shares in Tronox Holding plc included in "Other expense, net" in the unaudited Condensed Consolidated Statements of Operations.

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TRONOX HOLDINGS PLC
CONSOLIDATED BALANCE SHEETS
 (UNAUDITED)
(Millions of U.S. dollars, except share and per share data)

   
March 31, 2020
   
December 31, 2019
 
ASSETS
           
Current Assets
           
Cash and cash equivalents
 
$
420
   
$
302
 
Restricted cash
   
9
     
9
 
Accounts receivable (net of allowance for credit losses of $4 million and $5 million as of March 31, 2020 and December 31, 2019, respectively)
   
554
     
482
 
Inventories, net
   
1,054
     
1,131
 
Prepaid and other assets
   
115
     
143
 
Income taxes receivable
   
6
     
6
 
Total current assets
   
2,158
     
2,073
 
                 
Noncurrent Assets
               
Property, plant and equipment, net
   
1,630
     
1,762
 
Mineral leaseholds, net
   
783
     
852
 
Intangible assets, net
   
202
     
208
 
Lease right of use assets, net
   
92
     
101
 
Deferred tax assets
   
107
     
110
 
Other long-term assets
   
158
     
162
 
Total assets
 
$
5,130
   
$
5,268
 
                 
LIABILITIES AND EQUITY
               
Current Liabilities
               
Accounts payable
 
$
280
   
$
342
 
Accrued liabilities
   
346
     
283
 
Short-term lease liabilities
   
37
     
38
 
Short-term debt
   
212
     
-
 
Long-term debt due within one year
   
30
     
38
 
Income taxes payable
   
6
     
1
 
Total current liabilities
   
911
     
702
 
                 
Noncurrent Liabilities
               
Long-term debt, net
   
2,954
     
2,988
 
Pension and postretirement healthcare benefits
   
153
     
160
 
Asset retirement obligations
   
129
     
142
 
Environmental liabilities
   
70
     
65
 
Long-term lease liabilities
   
52
     
62
 
Deferred tax liabilities
   
139
     
184
 
Other long-term liabilities
   
43
     
49
 
Total liabilities
   
4,451
     
4,352
 
                 
Commitments and Contingencies
               
Shareholders’ Equity
               
Tronox Holdings plc ordinary shares, par value $0.01 — 143,366,438 shares issued and outstanding at March 31, 2020 and 141,900,459 shares issued and outstanding at December 31, 2019
   
1
     
1
 
Capital in excess of par value
   
1,852
     
1,846
 
Accumulated deficit
   
(471
)
   
(493
)
Accumulated other comprehensive loss
   
(829
)
   
(606
)
Total Tronox Holdings plc shareholders’ equity
   
553
     
748
 
Noncontrolling interest
   
126
     
168
 
Total equity
   
679
     
916
 
Total liabilities and equity
 
$
5,130
   
$
5,268
 

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TRONOX HOLDINGS PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
(Millions of U.S. dollars)

   
Three Months Ended March 31,
 
   
2020
   
2019
 
Cash Flows from Operating Activities:
           
Net income (loss)
 
$
40
   
$
(30
)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
               
Depreciation, depletion and amortization
   
71
     
47
 
Deferred income taxes
   
-
     
(3
)
Share-based compensation expense
   
9
     
8
 
Amortization of deferred debt issuance costs and discount on debt
   
2
     
2
 
Loss on extinguishment of debt
   
-
     
(2
)
Other non-cash items affecting net (loss) income
   
14
     
6
 
Changes in assets and liabilities:
               
(Increase) decrease in accounts receivable, net
   
(92
)
   
19
 
Increase in inventories, net
   
-
     
(10
)
Decrease (increase) in prepaid and other assets
   
(3
)
   
(1
)
(Decrease) increase  in accounts payable and accrued liabilities
   
(54
)
   
8
 
Net changes in income tax payables and receivables
   
2
     
(3
)
Changes in other non-current assets and liabilities
   
(17
)
   
(6
)
Cash (used in) provided by operating activities
   
(28
)
   
35
 
                 
Cash Flows from Investing Activities:
               
Capital expenditures
   
(38
)
   
(25
)
Loans
   
-
     
(25
)
Cash used in investing activities
   
(38
)
   
(50
)
                 
Cash Flows from Financing Activities:
               
Repayments of long-term debt
   
(7
)
   
(101
)
Proceeds from long-term debt
   
-
     
222
 
Proceeds from short-term debt
   
213
     
94
 
Acquisition of noncontrolling interest
   
-
     
(148
)
Debt issuance costs
   
-
     
(4
)
Dividends paid
   
(10
)
   
(7
)
Restricted stock and performance-based shares settled in cash for withholding taxes
   
(3
)
   
(6
)
Cash provided by financing activities
   
193
     
50
 
                 
Effects of exchange rate changes on cash and cash equivalents and restricted cash
   
(9
)
   
(1
)
                 
Net increase in cash, cash equivalents and restricted cash
   
118
     
34
 
Cash, cash equivalents and restricted cash at beginning of period
   
311
     
1,696
 
Cash, cash equivalents and restricted cash at end of period
 
$
429
   
$
1,730
 

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TRONOX HOLDINGS PLC
RECONCILIATION OF NET LOSS TO EBITDA AND ADJUSTED EBITDA (NON-U.S. GAAP)
(UNAUDITED)
(Millions of U.S. dollars)

   
Three Months Ended
March 31,
 
   
2020
   
2019
 
       
Net (loss) income (U.S. GAAP)
 
$
40
   
$
(30
)
Interest expense
   
45
     
49
 
Interest income
   
(3
)
   
(9
)
Income tax provision
   
7
     
2
 
Depreciation, depletion and amortization expense
   
71
     
47
 
EBITDA (non-U.S. GAAP)
   
160
     
59
 
Share-based compensation (a)
   
9
     
8
 
Transaction costs (b)
   
-
     
8
 
Restructuring (c)
   
2
     
-
 
Integration Costs (d)
   
6
     
-
 
Loss on extinguishment of debt (e)
   
-
     
2
 
Foreign currency remeasurement (f)
   
(10
)
   
(1
)
Other items (g)
   
7
     
4
 
Adjusted EBITDA (non-U.S. GAAP)
 
$
174
   
$
80
 

(a) Represents non-cash share-based compensation.
(b) 2019 amount represents transaction costs associated with the Cristal Transaction which were recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations.
(c) Represents amounts for employee-related costs, including severance.
(d) Represents integration costs associated with the Cristal acquisition after the acquisition which were recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations.
(e) 2019 amount represents the loss in connection with the modification of the Wells Fargo Revolver and termination of the ABSA Revolver.
(f) 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 Operations.
(g) 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 Operations.

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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, 2020:

   
Consolidated
 
Cash used in operating activities
 
$
(28
)
Capital expenditures
   
(38
)
Free cash flow (non-U.S. GAAP)
 
$
(66
)

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TRONOX HOLDINGS PLC
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. GAAP)
(UNAUDITED)
(Millions of U.S. dollars, except share and per share data)

   
Proforma amounts
 
   
March 31,
 
   
2020
   
2019
 
Net sales
 
$
722
   
$
720
 
Cost of goods sold
   
547
     
579
 
Gross profit
   
175
     
141
 
Selling, general and administrative expenses
   
94
     
95
 
Restructuring
   
2
     
-
 
Income from operations
   
79
     
46
 
Interest expense
   
(45
)
   
(55
)
Interest income
   
3
     
3
 
Other expense, net
   
10
     
(3
)
Income (loss) before income taxes
   
47
     
(11
)
Income tax provision
   
(7
)
   
(7
)
Net income (loss)
   
40
     
(18
)
Net income attributable to noncontrolling interest
   
8
     
5
 
Net income (loss) attributable to Tronox Holdings plc
 
$
32
   
$
(23
)
                 
Net (loss) income per share, diluted
 
$
0.22
   
$
(0.14
)
 
               
Weighted average shares outstanding, diluted (in thousands)
   
143,596
     
161,876
 

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TRONOX HOLDINGS PLC
PRO FORMA RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES
(UNAUDITED)
(Millions of U.S. dollars, except share and per share data)

RECONCILIATION OF PRO FORMA NET (LOSS) INCOME
ATTRIBUTABLE TO TRONOX HOLDINGS PLC  (U.S. GAAP)
TO ADJUSTED NET INCOME (LOSS)
ATTRIBUTABLE TO TRONOX HOLDINGS PLC (NON-U.S. GAAP)

   
Proforma amounts
 
   
Three Months Ended March 31,
 
   
2020
   
2019
 
Net (loss) income attributable to Tronox Holdings plc (U.S. GAAP)
 
$
32
   
$
(23
)
Restructuring
   
2
     
-
 
Integration costs
   
6
     
-
 
Separation costs related to divested business
   
1
     
-
 
Loss on extinguishment of debt
   
-
     
2
 
Charge for capital gains tax payment to Exxaro
   
-
     
1
 
Adjusted net income (loss) attributable to Tronox Holdings plc (non-U.S. GAAP)
 
$
41
   
$
(20
)
                 
Diluted net income (loss) per share from continuing operations (U.S. GAAP)
 
$
0.22
   
$
(0.14
)
                 
Restructuring, per share
   
0.02
     
-
 
Integration costs, per share
   
0.04
     
-
 
Separation costs related to divested business
   
0.01
     
-
 
Loss on extinguishment of debt, per share
   
-
     
0.01
 
Charge for capital gains tax payment to Exxaro, per share
   
-
     
0.01
 
Diluted adjusted net (loss) income per share attributable to Tronox Holdings plc (non-U.S. GAAP)
 
$
0.29
   
$
(0.12
)
                 
Weighted average shares outstanding, diluted (in thousands)
   
143,596
     
161,876
 

18 | Page

TRONOX HOLDINGS PLC
PRO FORMA RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA (NON-U.S. GAAP)
 (UNAUDITED)
(Millions of U.S. dollars)

   
Pro Forma
Three Months Ended March 31,
 
   
2020
   
2019
 
             
Net income (loss) (U.S. GAAP)
 
$
40
   
$
(18
)
Interest expense
   
45
     
55
 
Interest income
   
(3
)
   
(3
)
Income tax (benefit) provision
   
7
     
7
 
Depreciation, depletion and amortization expense
   
71
     
87
 
EBITDA (non-U.S. GAAP)
   
160
     
128
 
Share-based compensation
   
9
     
8
 
Restructuring
   
2
     
-
 
Integration Costs
   
6
     
-
 
Loss on extinguishment of debt
   
-
     
2
 
Foreign currency remeasurement
   
(10
)
   
(1
)
Other items
   
7
     
4
 
Adjusted EBITDA (non-U.S. GAAP)
 
$
174
   
$
141
 


19 | Page