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) October 26, 2023 (October 25, 2023)
(Exact Name of Registrant as Specified in Its Charter)
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England and Wales
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001-35573
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98-1467236
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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263 Tresser Boulevard, Suite 1100
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Laporte Road, Stallingborough
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Stamford, Connecticut 06901
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Grimsby, North East Lincolnshire, DN40 2PR, UK
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(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:
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of exchange on which registered
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Ordinary shares, par value $0.01 per share
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TROX
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NYSE
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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. ☐
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Item 2.02.
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Results of Operations and Financial Condition.
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Attached as Exhibit 99.1 is a copy of a press release of Tronox Holdings plc (the “Company”), dated October 25, 2023, reporting the Company’s financial
results for the third quarter ended September 30, 2023. Such information, including the Exhibit 99.1 furnished 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”), or Exchange Act, except as shall be expressly set forth by specific reference in such filing.
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Item 5.02.
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
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On October 25, 2023, the Company announced that Jean-Francois Turgeon, the Company’s Co-Chief Executive Officer, will retire from the Company effective
on April 1, 2024. Subsequent to April 1, 2024, Mr. Turgeon will remain as a member of the Company’s Board of Directors (the “Board”) and the Board intends to nominate Mr. Turgeon for re-election to the Board at the Company’s 2024 annual general
meeting of shareholders. There are no changes to Mr. Turgeon’s compensatory arrangements with the Company in connection with such retirement.
In addition, the Company also announced in such press release that upon Mr. Turgeon’s retirement on April 1, 2024, Mr. John Romano, currently the
Company’s Co-CEO, will become the Company’s sole CEO. It is expected that the Company and Mr. Romano will enter into an amended employment agreement in connection with his role as the Company’s sole CEO. Once finalized, any such amended employment
agreement would be filed as an amendment to this Current Report on Form 8-K and incorporated therein by reference.
A summary of Mr. Romano’s biographical and business experience can be found in the Company’s Definitive Proxy Statement filed with Securities and Exchange
Commission on March 23, 2023 under the heading “Biographical Information on our Director Nominees,” which summary is incorporated by reference in this Item 5.02. There are no related party transactions between the Company and Mr. Romano that would be
required to be reported pursuant to Item 404(a) of Regulation S-K under the Securities Act.
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Item 9.01.
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Financial Statements and Exhibits.
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(d) Exhibits.
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Exhibit
No.
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Description
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Earnings Release, dated October 25, 2023, reporting Tronox Holdings plc’s financial results for the third quarter 2023.
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104
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Inline XBRL for the cover page of this Current Report on Form 8-K.
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Tronox Reports Third Quarter 2023 Financial Results
Delivered Adjusted EBITDA within the guided range despite softer market conditions
Proactively strengthened balance sheet with incremental term loan
STAMFORD, Conn., October 25, 2023/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 September 30, 2023, as follows:
Third Quarter 2023 Financial Highlights:
| • |
Produced revenue of $662 million, a 17% decrease compared to the prior quarter, or a 26% decrease compared to the prior year
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| • |
Generated income from operations of $32 million, and a net loss of $14 million; adjusted net loss was $12 million (non-GAAP)
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| • |
GAAP diluted EPS was $(0.09); adjusted diluted EPS was $(0.08) (non-GAAP)
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| • |
Delivered Adjusted EBITDA of $116 million and an Adjusted EBITDA margin of 17.5%, both within the guided range
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| • |
Invested $54 million in capital expenditures in the quarter
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| • |
Proactively reinforced balance sheet with $350 million incremental term loan raise in August, the proceeds of which were used to pay outstanding borrowings under existing revolving
credit facilities and enhance available liquidity
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Q4 2023 Outlook:
| • |
Adjusted EBITDA expected to be $105-125 million assuming TiO2 volumes will be relatively flat compared to Q3 2023 levels, with little to no seasonal decline, and zircon
volumes continue to improve substantially off trough levels
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This outlook is based on Tronox's views on current global economic activity and is subject to changes and impacts associated with the macroeconomic
conditions, global supply chain, and inflation-related challenges, among others.
------
Note: For the Company's guidance with respect to fourth quarter 2023 non-GAAP measures, we are not able to provide without unreasonable effort the
most directly comparable GAAP financial measure, or reconciliation to such GAAP financial measure, because certain items that impact such measures are uncertain, out of the Company's control or cannot be reasonably predicted.
Summary of Select Financial Results for the Quarter Ending September 30, 2023
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($M unless otherwise noted)
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Q3 2023
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|
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Q3 2022
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|
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Y-o-Y
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%∆
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Q2 2023
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Q-o-Q
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%∆
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Revenue
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$
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662
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$
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895
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(26
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)%
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$
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794
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(17
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)%
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TiO2
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$
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558
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$
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673
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(17
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)%
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$
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611
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(9
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)%
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Zircon
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$
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33
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$
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128
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(74
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)%
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$
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95
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|
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(65
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)%
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Other products
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$
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71
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$
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94
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(24
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)%
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$
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88
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|
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(19
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)%
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Income from operations
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$
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32
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$
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163
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(80
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)%
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$
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84
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(62
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)%
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Net (Loss) Income
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$
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(14
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)
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$
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123
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n/
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m
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$
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(269
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)
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n/
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m
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Net (Loss) Income attributable to Tronox
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$
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(14
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)
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$
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121
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n/
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m
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$
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(269
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)
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n/
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m
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GAAP diluted (loss) earnings per share
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$
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(0.09
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)
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$
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0.77
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n/
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m
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$
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(1.72
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)
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n/
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m
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Adjusted (loss) diluted earnings per share
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$
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(0.08
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)
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$
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0.69
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n/
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m
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$
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0.16
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n/
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m
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Adjusted EBITDA
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$
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116
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$
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247
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(53
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)%
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$
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168
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(31
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)%
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Adjusted EBITDA Margin %
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17.5
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%
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27.6
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%
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(1,010) bps
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21.2
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%
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(370) bps
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Free cash flow
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$
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(37
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)
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$
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25
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n/
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m
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$
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81
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|
|
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n/
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m
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| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Y-o-Y
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%∆
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|
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Q-o-Q
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%∆
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|
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| |
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Volume / Mix
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Price
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FX
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Volume / Mix
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Price
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FX
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TiO2
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(14
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)%
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|
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(5
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)%
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2
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%
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(5
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)%
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(4
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)%
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|
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—
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%
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Zircon
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(71
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)%
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(3
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)%
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|
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—
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%
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|
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(61
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)%
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(4
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)%
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—
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%
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Co-CEOs' Remarks and Outlook
“We delivered third quarter performance within the previously guided range despite softer market conditions by maintaining an unrelenting focus on managing what is
within our control,” commented John Romano, co-chief executive officer. Mr. Romano continued, “TiO2 volumes improved sequentially in the Americas, while volumes were sequentially weaker in other regions, most prominently in Europe, Middle
East and Africa. Zircon demand recovered in August and September from July trough levels, as anticipated. Our commercial strategy continues to prove its value, as both TiO2 and zircon average selling prices declined only slightly in the
quarter, despite continued end market demand softness. This is a direct result of Tronox’s differentiated offering to our customers. The Company achieved an Adjusted EBITDA of $116 million (previous guidance of $115 to $135 million) and an Adjusted
EBITDA margin of 17.5%. This is inclusive of approximately $5 million in charges to EBITDA in the quarter as a result of a supplier outage at our Botlek TiO2 facility that resulted in the plant being taken offline in September. We have
been working closely with our supplier and believe the plant will be restarted by November 11.”
Jean-François Turgeon, co-chief executive officer, added, “We are continuing to prudently manage operating rates at our pigment, mining and upgrading sites as a result
of lower customer demand levels to reduce inventory and generate cash. Overall finished goods inventories decreased in the quarter, driven by reduced pigment inventory levels, partially offset by higher zircon inventories as Atlas ramped up against a
backdrop of softer market demand. We bolstered the balance sheet by proactively raising $350 million of incremental term loan, the proceeds of which enhanced available liquidity and will enable us to prepare for critical vertical integration capital
expenditures in 2024. This is a demonstration of our commitment to balancing the medium- and long-term strategic needs of the business to position Tronox for future success while ensuring we are taking the right decisions to manage what is within our
control in the short-term against the current macroeconomic landscape. Our performance quarter after quarter is made possible by the Tronox team, to whom we extend our thanks for their dedication and commitment.”
Mr. Romano added, “Looking ahead to the fourth quarter, we expect pigment volumes to be relatively flat compared to the third quarter. We anticipate little to no
seasonality in the fourth quarter as we believe customers have largely completed destocking. This represents an approximate 20% increase compared to trough levels realized in fourth quarter 2022. We expect the more stable pricing trends over the last
year to continue. On zircon, we expect volumes to continue to recover substantially from third quarter 2023 levels. As a result of these current expected market dynamics, we anticipate Adjusted EBITDA for the fourth quarter 2023 to be $105-125
million.”
Mr. Turgeon concluded, “Our strategy of being vertically integrated and the value it provides to our customers continues to prove to be a significant differentiator for
Tronox. As a result of our unique portfolio, we are currently evaluating a range of options to leverage our expertise to further unlock the value of the rare earths generated from our operations. Our differentiated, integrated position sets us apart
as a global leader in sustainable mining and upgrading solutions.”
Third Quarter 2023 Results
(Comparisons are to prior year (Q3 2023 vs. Q3 2022) unless otherwise noted)
The Company recorded third quarter revenue of $662 million, a decrease of 26%, primarily driven by lower sales volumes and lower selling prices
of TiO2, zircon and pig iron.
Revenue from TiO2 sales was $558 million, a decline of 17% driven by a 14% decline in volumes and a 5% decrease in average selling prices, partially offset by a 2% favorable exchange rate impact.
Sequentially, TiO2 sales decreased 9%, driven by a 5% decrease in sales volumes, and a 4% decline in average selling prices.
Zircon revenue decreased 74% to $33 million driven by a 71% decline in volumes and a 3% decrease in average selling prices. Sequentially, zircon revenue decreased 65%, driven by a 61% decrease in volumes and a 4%
decrease in average selling prices.
Revenue from other products was $71 million, a decline of 24% year-over-year, primarily due to lower sales volumes and average selling prices of pig
iron. Rare earths elements sales increased 27% year-over-year.
Net loss attributable to Tronox in the quarter was $14 million, or a loss of $0.09 per diluted share, compared to net income attributable to Tronox of $121 million,
or earnings of $0.77 per diluted share in the year-ago period. Adjusted net loss attributable to Tronox (non-GAAP) was $12 million, or a loss of $0.08 per diluted share.
Adjusted EBITDA of $116 million represented a 53% decrease compared to the third quarter 2022, driven by lower sales volumes, lower product pricing and
unfavorable fixed cost absorption and lower of cost or market (“LCM”) and idle facility charges due to lower production rates, partially offset by favorable exchange rate tailwinds, lower freight costs and lower corporate costs. Adjusted EBITDA
margin was 17.5% for the quarter.
Sequentially, Adjusted EBITDA decreased 31% due to lower product sales volumes, lower average selling prices, and unfavorable fixed cost absorption and LCM and idle facility charges due to lower production rates, partially offset by lower
freight costs, favorable exchange rate tailwinds and lower corporate costs.
The Company's selling, general and administrative expenses were $62 million for
the quarter, a decrease of 10%. Tronox's net interest expense in the quarter was $38 million. Depreciation, depletion and amortization expense was $67 million.
Balance Sheet, Cash Flow and Capital Allocation
Tronox ended the quarter with $2.8 billion of total debt, $2.6 billion of net debt and a
net leverage ratio of 4.8x on a trailing twelve-month basis. Available
liquidity at the end of the quarter totaled $726 million, including $246 million in cash and cash equivalents and $480 million available under our revolving credit agreements. The liquidity increase sequentially was due to the raise of a $350
million incremental term loan in August, the proceeds of which were used to repay outstanding borrowings under the Company’s revolving credit agreements and proactively enhance available liquidity for upcoming capital expenditures in 2024. There
remain no significant debt maturities until 2028 and no financial covenants on the Company's term loans or bonds.
Free cash flow for the quarter was a use of $37 million. Capital expenditures were
$54 million. The Company returned $19 million to shareholders in the form of dividends in the quarter, which included payments for third quarter declared dividends.
Sustainability
As an update on the renewable solar project in South Africa, construction remains on-track. Expected completion for construction of the project is December 2023 and
expected delivery of first power remains the end of first quarter 2024. The project, when completed and running at full capacity, will provide 200MW of solar power to Tronox’s mines and smelters and is expected to reduce Tronox’s global carbon
emissions by 13% compared to the Company’s 2019 baseline. This project, and many others underway relating to the conversion of the Company’s power sources from traditional to renewable will continue to drive progress against the Company’s targets
toward reducing greenhouse gas emissions.
Webcast Conference Call
Tronox will conduct a webcast conference call on Thursday, October 26, 2023, at 8:00 AM 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 (888) 886-7786
International: +44 800 6522 435
Conference ID: 00738356
Conference Call Presentation Slides will be used during the conference call and made available on our website: http://investor.tronox.com
Conference Call Replay: Available via the internet and telephone beginning on October 26, 2023,
by 11:00 AM ET, until November 2, 2023, 8:00 AM ET.
Internet Replay: http://investor.tronox.com
Replay Dial-in Telephone Numbers:
United States: +1 (877) 674-7070
International: +44 20 3870 9958
Replay Access Code: 738356 #
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, including the rare earth-bearing mineral,
monazite. 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, anticipated completion of extensions and upgrades to our mining operations,
anticipated trends in our business and industry, anticipated costs, benefits and timing of capital projects including planned mining expansions, the Company's anticipated capital allocation strategy including future capital expenditures, 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 costs, benefits and timing of capital projects, or achievements to differ materially from the results, level of activity, performance, anticipated costs, benefits and timing of capital projects, 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 and energy costs; currency movements; political instability, including the ongoing
conflicts in Eastern Europe and the Middle East and any expansion of such conflicts, and other geopolitical events; 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
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. GAAP)
(UNAUDITED)
(Millions of U.S. dollars, except share and per share data)
| |
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
| |
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
Net sales
|
|
$
|
662
|
|
|
$
|
895
|
|
|
$
|
2,164
|
|
|
$
|
2,805
|
|
|
Cost of goods sold
|
|
|
568
|
|
|
|
663
|
|
|
|
1,780
|
|
|
|
2,078
|
|
|
Gross profit
|
|
|
94
|
|
|
|
232
|
|
|
|
384
|
|
|
|
727
|
|
|
Selling, general and administrative expenses
|
|
|
62
|
|
|
|
69
|
|
|
|
206
|
|
|
|
220
|
|
|
Venator settlement
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
85
|
|
|
Income from operations
|
|
|
32
|
|
|
|
163
|
|
|
|
178
|
|
|
|
422
|
|
|
Interest expense
|
|
|
(42
|
)
|
|
|
(32
|
)
|
|
|
(113
|
)
|
|
|
(92
|
)
|
|
Interest income
|
|
|
4
|
|
|
|
2
|
|
|
|
10
|
|
|
|
6
|
|
|
Loss on extinguishment of debt
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(21
|
)
|
|
Other income, net
|
|
|
—
|
|
|
|
8
|
|
|
|
6
|
|
|
|
12
|
|
|
(Loss) income before income taxes
|
|
|
(6
|
)
|
|
|
141
|
|
|
|
81
|
|
|
|
327
|
|
|
Income tax (provision) benefit
|
|
|
(8
|
)
|
|
|
(18
|
)
|
|
|
(339
|
)
|
|
|
187
|
|
|
Net (loss) income
|
|
|
(14
|
)
|
|
|
123
|
|
|
|
(258
|
)
|
|
|
514
|
|
|
Net income attributable to noncontrolling interest
|
|
|
—
|
|
|
|
2
|
|
|
|
2
|
|
|
|
2
|
|
|
Net (loss) income attributable to Tronox Holdings plc
|
|
$
|
(14
|
)
|
|
$
|
121
|
|
|
$
|
(260
|
)
|
|
$
|
512
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.09
|
)
|
|
$
|
0.78
|
|
|
$
|
(1.66
|
)
|
|
$
|
3.30
|
|
|
Diluted
|
|
$
|
(0.09
|
)
|
|
$
|
0.77
|
|
|
$
|
(1.66
|
)
|
|
$
|
3.23
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, basic (in thousands)
|
|
|
156,816
|
|
|
|
154,548
|
|
|
|
156,260
|
|
|
|
155,027
|
|
|
Weighted average shares outstanding, diluted (in thousands)
|
|
|
156,816
|
|
|
|
156,948
|
|
|
|
156,260
|
|
|
|
158,201
|
|
|
Other Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
54
|
|
|
|
112
|
|
|
|
202
|
|
|
|
314
|
|
|
Depreciation, depletion and amortization expense
|
|
|
67
|
|
|
|
66
|
|
|
|
206
|
|
|
|
201
|
|
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 ATTRIBUTABLE TO TRONOX HOLDINGS PLC (NON-U.S. GAAP)
|
|
Three Months Ended September 30,
|
|
|
Nine Months Ended September 30,
|
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable to Tronox Holdings plc (U.S. GAAP)
|
|
$
|
(14
|
)
|
|
$
|
121
|
|
|
$
|
(260
|
)
|
|
$
|
512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Venator settlement (a)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
85
|
|
|
Loss on extinguishment of debt (b)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21
|
|
|
Income tax expense - deferred tax assets (c)
|
|
|
—
|
|
|
|
1
|
|
|
|
—
|
|
|
|
(7
|
)
|
|
Tax valuation allowance (d)
|
|
|
—
|
|
|
|
(16
|
)
|
|
|
293
|
|
|
|
(278
|
)
|
|
Other (e)
|
|
|
2
|
|
|
|
2
|
|
|
|
3
|
|
|
|
5
|
|
|
Adjusted net income attributable to Tronox Holdings plc (non-U.S. GAAP) (1)
|
|
$
|
(12
|
)
|
|
$
|
108
|
|
|
$
|
36
|
|
|
$
|
338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) net income per share (U.S. GAAP)
|
|
$
|
(0.09
|
)
|
|
$
|
0.77
|
|
|
$
|
(1.66
|
)
|
|
$
|
3.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Venator settlement, per share
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.54
|
|
|
Loss on extinguishment of debt, per share
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.13
|
|
|
Income tax expense - deferred tax assets, per share
|
|
|
—
|
|
|
|
0.01
|
|
|
|
—
|
|
|
|
(0.04
|
)
|
|
Tax valuation allowance, per share
|
|
|
—
|
|
|
|
(0.10
|
)
|
|
|
1.87
|
|
|
|
(1.76
|
)
|
|
Other, per share
|
|
|
0.01
|
|
|
|
0.02
|
|
|
|
0.02
|
|
|
|
0.03
|
|
|
Diluted adjusted net income per share attributable to Tronox Holdings plc (non-U.S. GAAP) (2)
|
|
$
|
(0.08
|
)
|
|
$
|
0.69
|
|
|
$
|
0.23
|
|
|
$
|
2.13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding, diluted (in thousands)
|
|
|
156,816
|
|
|
|
156,948
|
|
|
|
157,053
|
|
|
|
158,201
|
|
(1) No income tax impacts have been given to any item 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 the breakage fee including interest associated with the Venator settlement which were recorded in "Venator settlement" in the Consolidated
Statements of Operations.
(b) 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.
(c) Represents a charge to tax expense for the impact on deferred tax assets from a change in tax rates in a foreign tax jurisdiction.
(d) Represents changes within the Company's Australian deferred tax assets' valuation allowance.
(e) Represents other activity not representative of the ongoing operations of the Company.
TRONOX HOLDINGS PLC
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Millions of U.S. dollars, except share and per share data)
|
|
|
September 30, 2023
|
|
|
December 31, 2022
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current Assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
246
|
|
|
$
|
164
|
|
|
Accounts receivable (net of allowance for credit losses of $3 million and $4 million as of September 30,
2023 and December 31, 2022, respectively)
|
|
|
286
|
|
|
|
377
|
|
|
Inventories, net
|
|
|
1,422
|
|
|
|
1,278
|
|
|
Prepaid and other assets
|
|
|
175
|
|
|
|
135
|
|
|
Income taxes receivable
|
|
|
3
|
|
|
|
6
|
|
|
Total current assets
|
|
|
2,132
|
|
|
|
1,960
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncurrent Assets
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
1,770
|
|
|
|
1,830
|
|
|
Mineral leaseholds, net
|
|
|
655
|
|
|
|
701
|
|
|
Intangible assets, net
|
|
|
245
|
|
|
|
250
|
|
|
Lease right of use assets, net
|
|
|
131
|
|
|
|
136
|
|
|
Deferred tax assets
|
|
|
923
|
|
|
|
1,233
|
|
|
Other long-term assets
|
|
|
184
|
|
|
|
196
|
|
|
Total assets
|
|
$
|
6,040
|
|
|
$
|
6,306
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
370
|
|
|
$
|
486
|
|
|
Accrued liabilities
|
|
|
199
|
|
|
|
252
|
|
|
Short-term lease liabilities
|
|
|
20
|
|
|
|
20
|
|
|
Short-term debt
|
|
|
17
|
|
|
|
50
|
|
|
Long-term debt due within one year
|
|
|
26
|
|
|
|
24
|
|
|
Income taxes payable
|
|
|
11
|
|
|
|
18
|
|
|
Total current liabilities
|
|
|
643
|
|
|
|
850
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncurrent Liabilities
|
|
|
|
|
|
|
|
|
|
Long-term debt, net
|
|
|
2,788
|
|
|
|
2,464
|
|
|
Pension and postretirement healthcare benefits
|
|
|
90
|
|
|
|
89
|
|
|
Asset retirement obligations
|
|
|
155
|
|
|
|
153
|
|
|
Environmental liabilities
|
|
|
47
|
|
|
|
51
|
|
|
Long-term lease liabilities
|
|
|
104
|
|
|
|
110
|
|
|
Deferred tax liabilities
|
|
|
143
|
|
|
|
153
|
|
|
Other long-term liabilities
|
|
|
34
|
|
|
|
33
|
|
|
Total liabilities
|
|
|
4,004
|
|
|
|
3,903
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
Shareholders’ Equity
|
|
|
|
|
|
|
|
|
|
Tronox Holdings plc ordinary shares, par value $0.01 — 156,793,755 shares issued and outstanding at
September 30, 2023 and 154,496,923 shares issued and outstanding at December 31, 2022
|
|
|
2
|
|
|
|
2
|
|
|
Capital in excess of par value
|
|
|
2,058
|
|
|
|
2,043
|
|
|
Retained earnings
|
|
|
760
|
|
|
|
1,080
|
|
|
Accumulated other comprehensive loss
|
|
|
(827
|
)
|
|
|
(768
|
)
|
|
Total Tronox Holdings plc shareholders’ equity
|
|
|
1,993
|
|
|
|
2,357
|
|
|
Noncontrolling interest
|
|
|
43
|
|
|
|
46
|
|
|
Total equity
|
|
|
2,036
|
|
|
|
2,403
|
|
|
Total liabilities and equity
|
|
$
|
6,040
|
|
|
$
|
6,306
|
|
TRONOX HOLDINGS PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Millions of U.S. dollars)
| |
|
Nine Months Ended September 30,
|
|
| |
|
2023
|
|
|
2022
|
|
|
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(258
|
)
|
|
$
|
514
|
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization
|
|
|
206
|
|
|
|
201
|
|
|
Deferred income taxes
|
|
|
314
|
|
|
|
(241
|
)
|
|
Share-based compensation expense
|
|
|
15
|
|
|
|
21
|
|
|
Amortization of deferred debt issuance costs and discount on debt
|
|
|
6
|
|
|
|
6
|
|
|
Loss on extinguishment of debt
|
|
|
-
|
|
|
|
21
|
|
|
Other non-cash items affecting net (loss) income
|
|
|
34
|
|
|
|
51
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Decrease in accounts receivable, net of allowance for credit losses
|
|
|
84
|
|
|
|
7
|
|
|
Increase in inventories, net
|
|
|
(141
|
)
|
|
|
(151
|
)
|
|
Decrease in prepaid and other assets
|
|
|
5
|
|
|
|
16
|
|
|
Decrease in accounts payable and accrued liabilities
|
|
|
(154
|
)
|
|
|
(55
|
)
|
|
Net changes in income tax payables and receivables
|
|
|
(5
|
)
|
|
|
17
|
|
|
Changes in other non-current assets and liabilities
|
|
|
(32
|
)
|
|
|
(49
|
)
|
|
Cash provided by operating activities
|
|
|
74
|
|
|
|
358
|
|
| |
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(202
|
)
|
|
|
(314
|
)
|
|
Proceeds from sale of assets
|
|
|
3
|
|
|
|
3
|
|
|
Cash used in investing activities
|
|
|
(199
|
)
|
|
|
(311
|
)
|
| |
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
Repayments of short-term debt
|
|
|
(136
|
)
|
|
|
(24
|
)
|
|
Repayments of long-term debt
|
|
|
(13
|
)
|
|
|
(511
|
)
|
|
Proceeds from long-term debt
|
|
|
347
|
|
|
|
396
|
|
|
Proceeds from short-term debt
|
|
|
81
|
|
|
|
87
|
|
|
Repurchase of common stock
|
|
|
-
|
|
|
|
(50
|
)
|
|
Call premiums paid
|
|
|
-
|
|
|
|
(18
|
)
|
|
Debt issuance costs
|
|
|
(3
|
)
|
|
|
(4
|
)
|
|
Dividends paid
|
|
|
(69
|
)
|
|
|
(60
|
)
|
|
Cash provided by (used in) financing activities
|
|
|
207
|
|
|
|
(184
|
)
|
| |
|
|
|
|
|
|
|
|
|
Effects of exchange rate changes on cash and cash equivalents
|
|
|
-
|
|
|
|
(4
|
)
|
| |
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
82
|
|
|
|
(141
|
)
|
|
Cash and cash equivalents at beginning of period
|
|
|
164
|
|
|
|
232
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
246
|
|
|
$
|
91
|
|
TRONOX HOLDINGS PLC
RECONCILIATION OF NET (LOSS) INCOME TO EBITDA AND ADJUSTED EBITDA (NON-U.S. GAAP)
(UNAUDITED)
(Millions of U.S. dollars)
|
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
|
|
|
2023
|
|
|
2022
|
|
|
2023
|
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income (U.S. GAAP)
|
|
$
|
(14
|
)
|
|
$
|
123
|
|
|
|
(258
|
)
|
|
|
514
|
|
|
Interest expense
|
|
|
42
|
|
|
|
32
|
|
|
|
113
|
|
|
|
92
|
|
|
Interest income
|
|
|
(4
|
)
|
|
|
(2
|
)
|
|
|
(10
|
)
|
|
|
(6
|
)
|
|
Income tax provision (benefit)
|
|
|
8
|
|
|
|
18
|
|
|
|
339
|
|
|
|
(187
|
)
|
|
Depreciation, depletion and amortization expense
|
|
|
67
|
|
|
|
66
|
|
|
|
206
|
|
|
|
201
|
|
|
EBITDA (non-U.S. GAAP)
|
|
|
99
|
|
|
|
237
|
|
|
|
390
|
|
|
|
614
|
|
|
Share-based compensation (a)
|
|
|
4
|
|
|
|
7
|
|
|
|
15
|
|
|
|
21
|
|
|
Venator settlement (b)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
85
|
|
|
Loss on extinguishment of debt (c)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
21
|
|
|
Foreign currency remeasurement (d)
|
|
|
(1
|
)
|
|
|
(5
|
)
|
|
|
(7
|
)
|
|
|
(1
|
)
|
|
Other items (e)
|
|
|
14
|
|
|
|
8
|
|
|
|
32
|
|
|
|
22
|
|
|
Adjusted EBITDA (non-U.S. GAAP)
|
|
$
|
116
|
|
|
$
|
247
|
|
|
$
|
430
|
|
|
$
|
762
|
|
(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 Operations.
(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.
(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, net” in the unaudited Condensed Consolidated Statements of Operations.
(e) Includes noncash pension and postretirement costs, asset retirement obligation remeasurements, asset write-offs, accretion expense and other items
included in “Selling general and administrative expenses”, “Cost of goods sold” and “Other income, net” in the unaudited Condensed Consolidated Statements of Operations.
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 and nine months ended September 30,
2023:
| |
|
Nine Months Ended
September 30, 2023
|
|
|
Six Months Ended
June 30, 2023
|
|
|
Three Months Ended
September 30, 2023
|
|
|
Cash provided by operating activities
|
|
$
|
74
|
|
|
$
|
57
|
|
|
$
|
17
|
|
|
Capital expenditures
|
|
|
(202
|
)
|
|
|
(148
|
)
|
|
|
(54
|
)
|
|
Free cash flow (non-U.S. GAAP)
|
|
$
|
(128
|
)
|
|
$
|
(91
|
)
|
|
$
|
(37
|
)
|