Tronox Limited
Tronox Ltd (Form: 8-K, Received: 05/10/2018 08:40:52)

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 10, 2018 (May 9, 2018)
 

TRONOX LIMITED
(Exact name of registrant as specified in its charter)

 
Western Australia, Australia
 
001-35573
 
98-1026700
(State or Other Jurisdiction of Incorporation)
 
(Commission File Number)
 
(I.R.S. Employer Identification No.)

263 Tresser Boulevard, Suite 1100
 
Lot 22 Mason Road
Stamford, Connecticut 06901
 
Kwinana Beach, WA 6167 Australia

 (Address of principal executive offices, including 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 communication 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 communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
 
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 Limited (the “Company”), dated May 9, 2018, reporting the Company’s financial results for the first quarter ended March 31, 2018.  Such information, including the Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such filing.

Item 7.01
Regulation FD Disclosure.

On May 10, 2018, the Company made an investor presentation which is attached hereto as Exhibit 99.2 and is incorporated herein by reference.  Such information, including the Exhibit 99.2 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall it be deemed incorporated by reference in any filing under the Securities Act, 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 9, 2018, reporting Tronox Limited’s financial results for the first quarter ended March 31, 2018.
   
Investor Presentation, May 10, 2018.
 

SIGNATURE

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 LIMITED
     
 
By:
/s/ Jeffrey N. Neuman
Date: May 10, 2018
Name: 
Jeffrey N. Neuman
 
Title:
Senior Vice President, General Counsel and Secretary
 
 


Exhibit 99.1
 
Tronox Reports First Quarter 2018 Financial Results

Strategic Developments:
 
·
Obtaining European Commission’s conditional clearance of Cristal acquisition now only dependent on finalizing agreement on proposed remedy to address their remaining objection; negotiating with possible counterparties to execute the remedy
 
·
Motion filed with U.S. Federal Trade Commission (FTC) to stay Part 3 administrative process seeking to engage in direct settlement negotiations with Commissioners or commencement of expedited preliminary injunction suit
 
·
Technical Services Agreement and Option Agreement signed with regard to Jazan, Saudi Arabia titanium slag smelter to further optimize TiO 2 pigment and feedstock integration
 
First Quarter 2018 Highlights:
 
·
Strong top and bottom line performance reflects benefits of vertical integration and continued favorable market conditions across TiO 2 pigment, feedstock and co-products
 
·
Revenue of $442 million up 17 percent versus prior year
 
·
Income from operations of $14 million; adjusted EBITDA of $113 million up 79 percent versus prior year (Non-GAAP)
 
·
TiO 2 income from operations of $52 million; adjusted EBITDA of $138 million up 62 percent versus prior year (Non-GAAP)
 
·
TiO 2 adjusted EBITDA margin of 31 percent; free cash flow of $52 million (1)
 
·
GAAP diluted EPS of ($0.36); adjusted diluted EPS of $0.01 (Non-GAAP)
 

1)
Free cash flow equals cash flow provided by (used in) operating activities less capital expenditures (Non-GAAP)

 
STAMFORD, Conn., (May 9, 2018) – Tronox Limited (NYSE:TROX) reported revenue of $442 million for the first quarter 2018, up 17 percent from $378 million in the year-ago quarter and 5 percent lower than $464 million in the prior quarter.  Income from operations of $14 million improved from a loss from operations of $3 million in the year-ago quarter and compared to $60 million in the prior quarter.  Net loss from continuing operations attributable to Tronox Limited was $44 million, or ($0.36) per diluted share, compared to a net loss from continuing operations attributable to Tronox Limited of $56 million, or ($0.48) per diluted share, in the year-ago quarter and net income from continuing operations attributable to Tronox Limited of breakeven, or $0.00 per diluted share in the prior quarter.  Net income from continuing operations attributable to Tronox Limited in the first quarter of 2018 included an impairment loss related to the sale of the company’s Electrolytic operations and transaction costs related to the Cristal acquisition that, combined, totaled $45 million or $0.37 per diluted share.  Excluding these items, adjusted net income from continuing operations attributable to Tronox Limited (Non-GAAP) was $1 million, or $0.01 per diluted share.  Adjusted EBITDA of $113 million increased 79 percent from $63 million in the year-ago quarter and compared to $135 million in the prior quarter.
 
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The Board of Directors declared a quarterly dividend of $0.045 per share payable on June 1, 2018, to shareholders of record of the company’s Class A and Class B ordinary shares at the close of business on May 21, 2018.

Jeffry Quinn, president and chief executive officer of Tronox, said: “The last several weeks have seen significant progress toward closing the Cristal acquisition.  As a result of our discussions with the European Commission through the formal hearing process and the follow-on state-of-play meeting, we’ve narrowed the issues and the Commission’s conditional clearance is now only dependent on finalizing an agreement on a proposed remedy to address their remaining objection.  We are also negotiating with possible counterparties regarding execution of the proposed remedy.  In the United States, we filed a motion with the FTC seeking to stay the administrative proceeding scheduled to start on May 18.  If granted, the stay will allow direct discussions with the FTC Commissioners -- something not permitted while an administrative process is pending.  If settlement efforts are unsuccessful, we will ask the FTC Commissioners, in the alternative, to consider pursuing the FTC’s case through the typical Federal Court process, which is much more likely to result in a timely resolution.

“We also announced our entry into a Technical Services Agreement and an Option Agreement with AMIC, an entity equally owned by Cristal and Tasnee, regarding the titanium slag smelter facility located in Jazan, Saudi Arabia.  These agreements are another integral step to enable the combined company to further optimize the level of vertical integration between its production of TiO 2 pigment and feedstock over the long term.  By combining our slagger operations expertise with that of AMIC under the technical services agreement, we will work together to ensure the successful commissioning of this world-class smelter to become a low-cost source of feedstock for the 11 pigment plants that would comprise the combined company.  We continue to work hand in hand with our partners at Cristal and Tasnee with the shared goal of creating the premier company in the TiO 2 industry.”
 
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Quinn continued, “Our first quarter performance clearly reflected the benefits of our vertical integration, as our TiO 2 business delivered revenue growth of 17 percent, adjusted EBITDA growth of 62 percent, an adjusted EBITDA margin of 31 percent and free cash flow of $52 million.  Both our downstream TiO 2 pigment and upstream feedstock and co-products operations continued to benefit from favorable market conditions across the value chain.  Our strong top- and bottom-line results came despite the timing impact of several large feedstock and co-product shipments.  This is not a reflection of softening market conditions.  The opposite is true.  We see continued strengthening in feedstock and co-products markets, such as zircon and pig iron.  We expect favorable market trends to continue in pigment, feedstock and co-products across the year. Our strong first quarter results were delivered in the face of significant foreign exchange headwinds primarily related to the strengthening of the South African Rand relative to the U.S. Dollar.  Despite this short-term impact, the recent political changes in South Africa, which triggered the strengthening of the Rand, bode well for the future of our South African operations.”

First Quarter 2018

Tronox TiO 2

TiO 2 revenue of $442 million increased 17 percent compared to $378 million in the year-ago quarter, driven primarily by higher selling prices for pigment, zircon and pig iron.  Pigment sales of $333 million increased 22 percent compared to $272 million in the year-ago quarter driven by 25 percent higher selling prices (20 percent on a local currency basis).  Sales volumes were 2 percent lower due to inventory availability related to the timing of plant maintenance.  Selling prices were higher in all regions.  Titanium feedstock and co-products sales of $97 million increased 5 percent from $92 million in the year-ago quarter, as average selling prices increased 34 percent and sales volumes were 22 percent lower due to the timing of shipments for zircon and CP titanium slag.  Zircon sales of $61 million increased 22 percent driven by 52 percent higher selling prices which more than offset 20 percent lower sales volumes, as shipments originally scheduled for the first quarter occurred in the prior quarter.  Pig iron sales of $19 million increased 73 percent as selling prices increased 18 percent and sales volumes increased 41 percent.  Feedstock and Other products sales of $17 million were 45 percent lower driven by shipment timing.  There were no sales of CP titanium slag in the first quarter compared to $12 million of sales in the year-ago quarter.
 
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Compared sequentially, TiO 2 revenue of $442 million was 5 percent lower than $464 million in the prior quarter.  Higher selling prices for pigment and all major product lines in feedstock and co-products were offset by lower sales volumes for zircon, pig iron and CP titanium slag due to the timing of shipments.  Pigment sales of $333 million increased 5 percent from $316 million in the prior quarter, as selling prices increased 3 percent (2 percent on a local currency basis) and sales volumes increased 2 percent.  Though feedstock and co-products markets continued to strengthen in the quarter, Titanium feedstock and co-products sales of $97 million decreased 27 percent from $133 million in the prior quarter reflecting the lower zircon, pig iron and CP titanium slag sales volumes due to shipment timing.  Zircon sales of $61 million were 9 percent lower as selling prices increased 12 percent which were more than offset by 19 percent lower sales volumes due to shipment timing.  Pig iron sales of $19 million were 5 percent lower, as 12 percent higher selling prices were more than offset by 16 percent lower sales volumes, also due to shipment timing.  There were no sales of CP titanium slag in the quarter compared to $12 million of sales in the prior quarter.  In the second quarter, we are expecting sequential growth in pigment sales and double-digit sequential sales growth in zircon and pig iron given the timing of planned shipments.

TiO 2 adjusted EBITDA of $138 million increased 62 percent from $85 million in the year-ago quarter, driven primarily by higher selling prices for pigment and across all major product lines in feedstock and co-products.  Partially offsetting the gain were foreign exchange impacts on cost, primarily the South African Rand.  Compared sequentially, segment adjusted EBITDA of $138 million decreased by 12 percent from $156 million in the prior quarter.  Higher selling prices for pigment and across all major product lines in feedstock and co-products were more than offset by lower sales volumes due to the timing of shipments and unfavorable foreign exchange, primarily the South African Rand.  TiO 2 income from operations of $52 million improved from income from operations of $32 million in the year-ago quarter and compared to $93 million in the prior quarter.  TiO 2 delivered free cash flow of $52 million in the first quarter, as cash provided by operating activities was $79 million and capital expenditures were $27 million.

Consolidated

Selling, general and administrative expenses were $76 million, which included $20 million related to the Cristal acquisition, compared to $67 million in the year-ago quarter which included $11 million related to the Cristal acquisition, and $65 million in the prior quarter which included $15 million related to the Cristal acquisition.  Interest expense of $49 million compared to $46 million in the year-ago quarter and $48 million in the prior quarter.  On March 31, 2018, gross consolidated debt, net of debt issuance costs, was $3,146 million, and debt net of cash and cash equivalents was $1,419 million, including $653 million of cash restricted for the Cristal transaction.  Liquidity was $2,032 million comprised of cash and cash equivalents of $1,727 million, including $653 million of restricted cash, and $305 million available under revolving credit agreements.  Capital expenditures were $28 million and depreciation, depletion and amortization expense was $48 million.
 
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Webcast Conference Call

Tronox will conduct a conference call to review first quarter results on Thursday, May 10, 2018, at 8:30 a.m. ET (New York).  The live call is open to the public via internet broadcast and telephone.

Internet Broadcast:  http://www.tronox.com
Dial-in Telephone Numbers:
U.S. / Canada: +1.877.831.3840
International: +1.253.237.1184
Conference ID: 3380989

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

Webcast Conference Call Replay: Available via the internet and telephone beginning on Thursday, May 10, 2018 at 11:30 a.m. ET (New York), until 11:30 p.m. ET (New York) on Wednesday, May 16, 2018.

Internet Replay: http://www.tronox.com
Replay Dial-in Telephone Numbers:
U.S. / Canada: +1.855.859.2056
International: +1.404.537.3406
Conference ID: 3380989
 
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Upcoming Conferences

During the second and third quarters of 2018, a member of management is scheduled to present at the following conferences:

·
Vertical Research Materials Conference, Westbrook, CT, June 14, 2018
·
BMO Capital Markets Chemicals Conference, New York, June 26, 2018
·
UBS Chemicals Conference, New York, September 5, 2018
·
Credit Suisse Basic Materials Conference, New York, September 12, 2018

Accompanying conference materials will be available at http://investor.tronox.com

About Tronox

Tronox Limited is a vertically integrated mining and inorganic chemical business. The Company mines and processes titanium ore, zircon and other minerals, and manufactures titanium dioxide pigments that add brightness and durability to paints, plastics, paper, and other everyday products. For more information, 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 based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. These and other risk factors are discussed in the company's filings with the Securities and Exchange Commission (SEC), including those under the heading entitled “Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2017.
 
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Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can management assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Unless otherwise required by applicable laws, we undertake no obligation to update or revise any forward-looking statements, whether because of new information or future developments.
 
Use of Non-U.S. GAAP Financial Information

To provide investors and others with additional information regarding Tronox Limited's operating results, we have disclosed in this press release certain non-U.S. GAAP financial measures, including EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow and Adjusted net income (loss) attributable to Tronox.  These non-U.S. GAAP financial measures are a supplement to and not a substitute for or superior to, the company's results presented in accordance with U.S. GAAP.  The non-U.S. GAAP financial measures presented by the company may be different from non-U.S. GAAP financial measures presented by other companies.  The non-U.S. GAAP financial measures are provided to enhance the user's overall understanding of the company's operating performance. Specifically, the company believes the non-U.S. GAAP information provides useful measures to investors regarding the company's financial performance by excluding certain costs and expenses that the company believes are not indicative of its core operating results.  The presentation of these non-U.S. GAAP financial measures 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.
 
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Management believes these non-U.S. GAAP financial measures:

·
Reflect Tronox Limited's ongoing business in a manner that allows for meaningful period-to-period comparison and analysis of trends in its business, as they exclude income and expense that are not reflective of ongoing operating results;
·
Provide useful information to investors and others in understanding and evaluating Tronox Limited's operating results and future prospects;
·
Provide additional view of the operating performance of the company by adding interest expenses, taxes, depreciation, depletion and amortization to the net income.  Further adjustments due to gain (loss) on extinguishment of debt  and stock-based compensation charges are made to exclude items that are either non-cash or unusual in nature;
·
Assist investors to assess the company's compliance with financial covenants under its debt instruments;
·
Adjusted EBITDA is one of the primary measures management uses for planning and budgeting processes and to monitor and evaluate financial and operating results. Adjusted EBITDA is not a recognized term under U.S. GAAP and does not purport to be an alternative to measures of our financial performance as determined in accordance with U.S. GAAP, such as net income (loss). Because other companies may calculate EBITDA and Adjusted EBITDA differently than Tronox, EBITDA may not be, and Adjusted EBITDA as presented in this release is not, comparable to similarly titled measures reported by other companies, and
·
We believe that the non-U.S. GAAP financial measure “Adjusted net income (loss) attributable to Tronox Limited” and its presentation on a per share basis provide useful information about our operating results to investors and securities analysts. We also believe that excluding the effects of these items from operating results allows management and investors to compare more easily the financial performance of our underlying businesses from period to period.

Media Contact: Melissa Zona
+1.636.751.4057
 
Investor Contact: Brennen Arndt
+1.203.705.3730
 
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TRONOX LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. GAAP)
(UNAUDITED)
(Millions of U.S. dollars, except share and per share data)

   
Three Months
Ended March 31,
   
Three Months
Ended March 31,
 
   
2018
   
2017
 
Net sales
 
$
442
   
$
378
 
Cost of goods sold
   
327
     
315
 
Gross profit
   
115
     
63
 
Selling, general, and administrative expenses
   
(76
)
   
(67
)
Restructuring
   
-
     
1
 
Impairment loss
   
(25
)
   
-
 
Income (loss) from operations
   
14
     
(3
)
Interest expense
   
(49
)
   
(46
)
Interest income
   
8
     
1
 
Other expense, net
   
(9
)
   
(8
)
Loss from continuing operations before income taxes
   
(36
)
   
(56
)
Income tax (provision) benefit
   
(5
)
   
3
 
Net loss from continuing operations
   
(41
)
   
(53
)
Income from discontinued operations, net of tax
   
-
     
15
 
Net loss
   
(41
)
   
(38
)
Net income attributable to noncontrolling interest
   
3
     
3
 
Net loss attributable to Tronox Limited
 
$
(44
)
 
$
(41
)
                 
Net income (loss) per share, basic and diluted:
               
Continuing operations
 
$
(0.36
)
 
$
(0.48
)
Discontinued operations
 
$
-
   
$
0.13
 
Net loss per share, basic and diluted
 
$
(0.36
)
 
$
(0.35
)
                 
Weighted average shares outstanding, basic and diluted (in thousands)
   
122,327
     
116,815
 
                 
Other Operating Data:
               
Capital expenditures
 
$
28
   
$
20
 
Depreciation, depletion and amortization expense
 
$
48
   
$
45
 
 
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TRONOX LIMITED
RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES
(UNAUDITED)
(Millions of U.S. dollars, except share and per share data)

RECONCILIATION OF NET LOSS
ATTRIBUTABLE TO TRONOX LIMITED  (U.S. GAAP)
TO ADJUSTED NET LOSS FROM CONTINUING OPERATIONS
ATTRIBUTABLE TO TRONOX LIMITED (NON-U.S. GAAP)

   
Three Months
Ended March 31,
   
Three Months
Ended March 31,
 
   
2018
   
2017
 
             
Net loss attributable to Tronox Limited (U.S. GAAP)
 
$
(44
)
 
$
(41
)
Income from discontinued operations, net of tax (U.S. GAAP)
   
-
     
15
 
Net loss from continuing operations attributable to Tronox Limited (U.S. GAAP)
 
$
(44
)
 
$
(56
)
Impairment loss (a)
   
25
     
-
 
Acquisition related matters (b)
   
20
     
11
 
Restructuring (c)
   
-
     
(1
)
Adjusted net income (loss) from continuing operations attributable to Tronox Limited (non-U.S. GAAP) (d)
 
$
1
   
$
(46
)
                 
Basic and diluted net loss per share from continuing operations (U.S. GAAP)
 
$
(0.36
)
 
$
(0.48
)
                 
Impairment loss, per share
   
0.21
     
-
 
Acquisition related matters, per share
   
0.16
     
0.10
 
Restructuring, per share
   
-
     
(0.01
)
Diluted adjusted net income (loss) from continuing operations per share attributable to Tronox Limited (non-U.S. GAAP)
 
$
0.01
   
$
(0.39
)
                 
Weighted average shares outstanding, diluted (in thousands)
   
122,327
     
116,815
 
 
(a)  Represents a pre-tax charge for the impairment and expected loss on sale of the assets of our Tronox Electrolytic Operations which was recorded in “Impairment loss” in the unaudited Condensed Consolidated Statements of Operations.
(b)  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 the reversal of restructuring expense pursuant to the settlement of claims previously filed relating to a prior restructure which was recorded in “Restructuring” in the unaudited Condensed Consolidated Statements of Operations.
(d)  No income tax impact given full valuation allowance.
 
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TRONOX LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Millions of U.S. dollars, except share and per share data)

   
March 31,
2018
   
December 31
2017
 
ASSETS
           
Current Assets
           
Cash and cash equivalents
 
$
1,074
   
$
1,116
 
Restricted cash
   
655
     
653
 
Accounts receivable, net of allowance for doubtful accounts
   
329
     
336
 
Inventories, net
   
470
     
473
 
Prepaid and other assets
   
55
     
53
 
Income taxes receivable
   
9
     
8
 
Assets held for sale
   
31
     
-
 
Total current assets
   
2,623
     
2,639
 
                 
Noncurrent Assets
               
Property, plant and equipment, net
   
1,120
     
1,115
 
Mineral leaseholds, net
   
896
     
885
 
Intangible assets, net
   
192
     
198
 
Inventories, net
   
-
     
3
 
Other long-term assets
   
27
     
24
 
Total assets
 
$
4,858
   
$
4,864
 
                 
LIABILITIES AND EQUITY
               
Current Liabilities
               
Accounts payable
 
$
146
   
$
165
 
Accrued liabilities
   
143
     
163
 
Long-term debt due within one year
   
22
     
22
 
Income taxes payable
   
1
     
3
 
Liabilities held for sale
   
8
     
-
 
Total current liabilities
   
320
     
353
 
                 
Noncurrent Liabilities
               
Long-term debt, net
   
3,124
     
3,125
 
Pension and postretirement healthcare benefits
   
100
     
103
 
Asset retirement obligations
   
81
     
79
 
Long-term deferred tax liabilities
   
183
     
171
 
Other long-term liabilities
   
17
     
18
 
Total liabilities
   
3,825
     
3,849
 
                 
Commitments and Contingencies
               
Shareholders’ Equity
               
Tronox Limited Class A ordinary shares, par value $0.01 — 93,838,329 shares issued and 93,756,873 shares outstanding at March 31, 2018 and 92,717,935 shares issued and 92,541,463 shares outstanding at December 31, 2017
   
1
     
1
 
Tronox Limited Class B ordinary shares, par value $0.01 — 28,729,280 shares issued and outstanding at March 31, 2018 and December 31, 2017.
   
-
     
-
 
Capital in excess of par value
   
1,563
     
1,558
 
Accumulated deficit
   
(377
)
   
(327
)
Accumulated other comprehensive loss
   
(358
)
   
(403
)
Total Tronox Limited shareholders' equity
   
829
     
829
 
Noncontrolling interest
   
204
     
186
 
Total equity
   
1,033
     
1,015
 
Total liabilities and equity
 
$
4,858
   
$
4,864
 
 
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TRONOX LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Millions of U.S. dollars)

   
Three Months Ended March 31,
 
   
2018
   
2017
 
Cash Flows from Operating Activities:
           
Net loss
 
$
(41
)
 
$
(38
)
Income from discontinued operations, net of tax
   
-
     
15
 
Net loss from continuing operations
 
$
(41
)
 
$
(53
)
Adjustments to reconcile net loss from continuing operations to net cash (used in) provided by operating activities, continuing operations:
               
Depreciation, depletion and amortization
   
48
     
45
 
Deferred income taxes
   
3
     
(1
)
Share-based compensation expense
   
7
     
13
 
Amortization of deferred debt issuance costs and discount on debt
   
5
     
3
 
Pension and postretirement healthcare benefit expense
   
-
     
1
 
Impairment losses
   
25
     
-
 
Other, net
   
11
     
4
 
Contributions to employee pension and postretirement plans
   
(5
)
   
(4
)
Changes in assets and liabilities:
               
Decrease (increase) in accounts receivable, net
   
1
     
(10
)
(Increase) decrease in inventories, net
   
(9
)
   
26
 
(Increase) decrease in prepaid and other assets
   
(1
)
   
4
 
Decrease in accounts payable and accrued liabilities
   
(46
)
   
(23
)
Decrease in income taxes payable
   
(2
)
   
(3
)
Cash (used in) provided by operating activities, continuing operations
   
(4
)
   
2
 
                 
Cash Flows from Investing Activities:
               
Capital expenditures
   
(28
)
   
(20
)
Cash used in investing activities, continuing operations
   
(28
)
   
(20
)
                 
Cash Flows from Financing Activities:
               
Repayments of long-term debt
   
(6
)
   
(4
)
Debt issuance costs
   
(1
)
   
-
 
Proceeds from the exercise of warrants
   
2
     
-
 
Dividends paid
   
(6
)
   
(6
)
Restricted stock and performance-based shares settled in cash for withholding taxes
   
(4
)
   
(2
)
Cash used in financing activities, continuing operations
   
(15
)
   
(12
)
                 
Discontinued Operations:
               
Cash provided by operating activities
   
-
     
57
 
Cash used in investing activities
   
-
     
(12
)
Net cash flows provided by discontinued operations
   
-
     
45
 
                 
Effects of exchange rate changes on cash, cash equivalents and restricted cash
   
7
     
1
 
Net (decrease) increase in cash and cash equivalents
   
(40
)
   
16
 
Cash, cash equivalents and restricted cash at beginning of period
   
1,769
     
251
 
Cash, cash equivalents and restricted cash at end of period, continuing operations
 
$
1,729
   
$
267
 
 
12 | Page

TRONOX LIMITED
CONDENSED STATEMENT OF FREE CASH FLOWS (NON-U.S. GAAP)
(UNAUDITED)
(Millions of U.S. dollars)

   
Three Months Ended March 31, 2018
 
                   
   
TiO 2
   
Corporate
   
Consolidated
 
                   
Income (loss) from operations (U.S. GAAP)
 
$
52
   
$
(38
)
 
$
14
 
Depreciation, depletion and amortization expense
   
47
     
1
     
48
 
Other
   
39
     
12
     
51
 
Adjusted EBITDA (non-U.S. GAAP)
 
$
138
   
$
(25
)
 
$
113
 
                         
Adjusted EBITDA (non-U.S. GAAP)
 
$
138
   
$
(25
)
 
$
113
 
Interest paid, net of capitalized interest and interest income
   
-
     
(40
)
   
(40
)
Income tax provision
   
-
     
(5
)
   
(5
)
Transaction costs
   
-
     
(20
)
   
(20
)
Contributions to employee pension and postretirement plans
   
(5
)
   
-
     
(5
)
Deferred income taxes
   
-
     
3
     
3
 
Other
   
(10
)
   
17
     
7
 
                         
Changes in assets and liabilities
                       
Decrease in accounts receivable, net
   
1
     
-
     
1
 
Increase in inventories, net
   
(9
)
   
-
     
(9
)
Decrease (increase) in prepaid and other assets
   
4
     
(5
)
   
(1
)
Decrease in accounts payable and accrued liabilities
   
(40
)
   
(6
)
   
(46
)
Decrease in income taxes payable
   
-
     
(2
)
   
(2
)
Subtotal
   
(44
)
   
(13
)
   
(57
)
                         
Cash provided by (used in) operating activities, continuing operations
   
79
     
(83
)
   
(4
)
                         
Capital expenditures
   
(27
)
   
(1
)
   
(28
)
Free cash flow (non-U.S. GAAP)
 
$
52
   
$
(84
)
 
$
(32
)
 
13 | Page

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

   
Three Months
Ended March 31,
   
Three Months
Ended March 31,
 
   
2018
   
2017
 
             
Net loss (U.S. GAAP)
 
$
(41
)
 
$
(38
)
Income from discontinued operations, net of tax (U.S. GAAP)
   
-
     
15
 
Net loss from continuing operations (U.S. GAAP)
   
(41
)
   
(53
)
Interest expense
   
49
     
46
 
Interest income
   
(8
)
   
(1
)
Income tax provision (benefit)
   
5
     
(3
)
Depreciation, depletion and amortization expense
   
48
     
45
 
EBITDA (non-U.S. GAAP)
   
53
     
34
 
Impairment loss (a)
   
25
     
-
 
Share-based compensation (b)
   
7
     
13
 
Transaction costs (c)
   
20
     
11
 
Restructuring (d)
   
-
     
(1
)
Foreign currency remeasurement (e)
   
6
     
3
 
Other items (f)
   
2
     
3
 
Adjusted EBITDA (non-U.S. GAAP) (g)
 
$
113
   
$
63
 

(a)
Represents a pre-tax charge for the impairment and expected loss on sale of the assets of our Tronox Electrolytic Operations which was recorded in “Impairment loss” in the unaudited Condensed Consolidated Statements of Operations.
(b)
Represents non-cash share-based compensation.
(c)
Represents transaction costs associated with the Cristal Transaction which were recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations.
(d)
Represents the reversal of restructuring expense pursuant to the settlement of claims previously filed relating to a prior restructure which was recorded in “Restructuring” in the unaudited Condensed Consolidated Statements of Operations.
(e)
Represents foreign currency remeasurement which is included in “Other expense, net” in the unaudited Condensed Consolidated Statements of Operations.
(f)
Includes noncash pension and postretirement costs, severance expense, accretion expense and other items included in “Selling, general and administrative expenses”, “Cost of goods sold” and "Other expense, net" in the unaudited Condensed Consolidated Statements of Operations.
(g)
No income tax impact given full valuation allowance.
 
The following table reconciles income (loss) from operations, the comparable measure for segment reporting under U.S. GAAP, to Adjusted EBITDA by segment for the periods presented:

   
Three Months
Ended March 31,
   
Three Months
Ended March 31,
 
   
2018
   
2017
 
             
TiO 2 segment
 
$
52
   
$
32
 
Corporate
   
(38
)
   
(35
)
Income (loss) from operations (U.S. GAAP)
   
14
     
(3
)
                 
TiO 2 segment
   
47
     
44
 
Corporate
   
1
     
1
 
Depreciation, depletion and amortization expense
   
48
     
45
 
                 
TiO 2 segment
   
39
     
9
 
Corporate
   
12
     
12
 
Other
   
51
     
21
 
                 
TiO 2 segment
   
138
     
85
 
Corporate
   
(25
)
   
(22
)
Adjusted EBITDA (non-U.S. GAAP)
 
$
113
   
$
63
 
 
 
14 | Page

 

Exhibit 99.2
 
 First Quarter 2018 Conference CallMay 10, 2018   
 

 Safe Harbor Statement and Non-U.S. GAAP Financial Terms  Statements in this presentation that are not historical are forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. These and other risk factors are discussed in the company's filings with the Securities and Exchange Commission (SEC), including those under the heading entitled “Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2017. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can management assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Unless otherwise required by applicable laws, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information or future developments.This presentation contains certain non-U.S. GAAP financial terms that we use in the management of our business, including EBITDA, adjusted EBITDA, adjusted EBITDA margin, free cash flow and adjusted earnings per diluted share. Reconciliations to their nearest U.S. GAAP terms are provided in the Appendix of this presentation. 
 

 Significant progress toward closing Cristal acquisitionEuropean Commission conditional clearance now only dependent on reaching agreement on proposed remedy to address remaining objection; negotiating with potential counterparties regarding execution of proposed remedyMotion filed with U.S. FTC seeking to stay administrative proceeding scheduled to start on May 18; stay would allow settlement negotiations directly with FTC CommissionersIf settlement efforts unsuccessful, we will ask FTC Commissioners to consider pursuing the FTC’s case through the typical Federal Court processTechnical Services Agreement and Option Agreement for titanium slagger in Jazan, KSAFurther optimizes vertical integration between TiO2 pigment and feedstock operations post-closing of Cristal and across the cycle over the long termExxaro reaffirmed intention to monetize Tronox shares at a future time Strong top and bottom line first quarter performance in TiO2 Revenue growth of 17 percentAdjusted EBITDA growth of 62 percentAdjusted EBITDA margin of 31 percentFree cash flow of $52 million   First Quarter 2018 Highlights 
 

  USD millions  1Q18  1Q17  Change   TiO2 Revenue  442  378  17%   Pigment  333  272  22%   Feedstock & Co-products  97  92  5%   Zircon  61  50  22%   Pig Iron  19  11  73%   Feedstock & Other Products   17  31  (45%)  TiO2 Commercial Performance  First Quarter 2018 vs First Quarter 2017  Higher pigment, zircon and pig iron selling pricesPigment selling prices up 25%, higher in all regionsPigment volumes (2%) due to inventory availability related to plant maintenance timing Feedstock & co-products selling prices increased 34%Feedstock & co-products volumes (22%), shipment timing for zircon and CP slagZircon selling prices increased 52%Pig iron selling prices increased 18%   Price and Volume Changes  Price  Volume   Pigment  25%  (2%)   Feedstock and co-products  34%  (22%)   Zircon  52%  (20%)   Pig Iron  18%  41% 
 

  USD millions  1Q18  4Q17  Change   TiO2 Revenue  442  464  (5%)   Pigment  333  316  5%   Feedstock & Co-products  97  133  (27%)   Zircon  61  67  (9%)   Pig Iron  19  20  (5%)   Feedstock & Other Products   17  46  (63%)  TiO2 Commercial Performance  First Quarter 2018 vs Fourth Quarter 2017  Higher selling prices for pigment and all major products in feedstock and co-productsLower sales volumes for zircon, pig iron and CP slag due to shipment timingHigh level of shipments in 4Q17 generated ~$20m revenue and ~$7-8m EBITDAPigment selling prices increased 3% and sales volumes increased 2%Zircon selling prices increased 12%Pig iron selling prices increased 12%Second quarter - sequential growth in pigment sales and double-digit sales growth in zircon and pig iron expectedWorking with customers to stabilize margin volatility across the cycle    Price and Volumes Changes  Price  Volume   Pigment  3%  2%   Feedstock & Co-products  10%  (34%)   Zircon  12%  (19%)   Pig Iron  12%  (16%) 
 

  USD millions  1Q18  1Q17  Change   Adjusted EBITDA  138  85  62%  TiO2 Operations Performance  1Q 2018 vs 1Q 2017 and 4Q 2017  All mines and plants operating at full capacity; record pigment production in MarchAdjusted EBITDA margin of 31%; strong free cash flow of $52 million1Q18 vs 1Q17Adjusted EBITDA increased 62% driven largely by higher selling prices for pigment and across all major product lines in feedstock and co-productsStrong top line performance partially offset by FX impact on cost, principally the ZAR1Q18 vs 4Q17Higher selling prices for pigment and across feedstock and co-productsMore than offset by shipment timing and FX headwinds on cost – ZAR and AUD$70m pipeline of cost reduction projects to lower cost per tonOperational Excellence deployment planning underway to quickly deliver synergies after closing of Cristal acquisition    USD millions  1Q18  4Q17  Change   Adjusted EBITDA  138  156  (12%) 
 

  USD millions  March 31, 2018   Gross Consolidated Debt   3,146 (1)   Debt net of cash/cash equivalents    1,419 (2)   Blended cost of debt   5.82%   Cash and cash equivalents    1,727 (2)   Liquidity   2,032 (3)  (1) Net of debt issuance cost    (2) Includes $653 million restricted cash for Cristal acquisition and excludes $2 million of restricted cash in Australia    (3) Cash and cash equivalents of $1,727 and $305 million available under revolving credit agreements    Financial Position  Completed private placement offering of 6.5 percent senior notes due 2026 for an aggregate principal amount of $615 millionNet proceeds used to fund redemption of $584 million aggregate principal of 7.5% senior notes due 2022Cash used in Corporate operations was $83 million including $22 million semi-annual bond interest payment    USD millions  2018 Outlook   Cash interest, net  165   Capital expenditures  120-130   DD&A  180-200   Cash taxes  20   Note: all estimates on Tronox standalone basis     USD millions unless noted  1Q 2018   Capital expenditures  28   DD&A  48 
 

 Significant progress toward closing Cristal acquisitionEuropean Commission conditional clearance now only dependent on reaching agreement on proposed remedy to address remaining objectionNegotiating with potential counterparties regarding execution of proposed remedyMotion filed with U.S. FTC seeking to stay administrative proceeding scheduled to start on May 18; stay would allow settlement negotiations directly with FTC CommissionersIf settlement efforts unsuccessful, we will ask FTC Commissioners to consider pursuing the FTC’s case through the typical Federal Court process2018 another year of strong performanceSee momentum continuing in TiO2 with tight supply-demand balances globally across entire value chain of our businessWorking with customers with intent to stabilize margin volatility across the cycle2018 also a year of transformationCristal acquisition integration planning advanced to enable quick delivery of synergies Raising 2018 pro forma EBITDA estimate to $1.0-1.1 billion range before synergies   2018 Perspectives 
 

 www.tronox.com  Q&A Session 
 

 Appendix 
 

 Reconciliation of Non-U.S. GAAP Financial Measures 
 

 Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA (non-U.S. GAAP) 
 

 Reconciliation of Net Income (Loss) to Adjusted EBITDA (non-U.S. GAAP)