FMC CORPORATION STAMFORD, Conn., Feb. 25, 2015 /PRNewswire/ -- Tronox Limited (NYSE:TROX) today reported fourth quarter 2014 revenue of $400 million compared to $436 million in the fourth quarter 2013. Excluding external CP titanium slag sales of $24 million in the prior-year quarter to reflect withdrawal from the external CP titanium slag market in the second half 2014, revenue of $400 million compares to $412 million in the prior-year quarter, down 3 percent. Adjusted EBITDA was $81 million versus $96 million in the prior-year quarter. Adjusted net loss attributable to Tronox Limited was $23 million, or $0.20 per diluted share, versus an adjusted net loss of $48 million, or $0.42 per diluted share, in the year-ago quarter.
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Tom Casey, chairman and CEO of Tronox, said: "Our fourth quarter results came in essentially as expected, reflecting normal seasonally lighter demand and an industry where selling prices for pigment and mineral sands remain at trough conditions. Despite these trough conditions, in the fourth quarter we delivered $81 million of adjusted EBITDA on revenue of $400 million for a 20 percent adjusted EBITDA margin. For the full year 2014, we delivered $353 million of adjusted EBITDA on revenue of $1,737 million for a 20 percent adjusted EBITDA margin. This level of performance, we believe, continued to demonstrate the benefits of our operational improvement initiatives and vertical integration and our resulting ability to consistently deliver a higher level of adjusted EBITDA per metric ton of pigment sold than our non-integrated peers. This performance also comes before we receive the revenue and margin from the sale of 30,000 metric tons of natural rutile and 60,000 metric tons of zircon annually when our Fairbreeze mine begins production, which is expected by the end of this year. Lower feedstock selling prices contributed to greater margins in our Pigment business and will continue to do so as pigment made from that feedstock is sold. In Mineral Sands, despite essentially trough conditions in feedstock markets, segment adjusted EBITDA margin was 30 percent. We expect feedstock market conditions to gradually improve as pigment plant operating rates have returned to normal and as feedstock inventories continue to be worked down. With respect to overall global pigment and mineral sands markets as we begin the year, we expect to see normal seasonally lighter first quarter market conditions and look for positive pricing developments by the second half of 2015."
Casey continued: "Earlier this month, we took a significant step toward building a stronger, more stable and higher margin and free cash flow generating company with the signing of a definitive agreement to acquire the Alkali Chemicals business from FMC Corporation. The transaction is expected to close in the first quarter and be significantly accretive to our earnings and free cash flow upon closing. With its industry-leading position in markets complementary to ours, Alkali Chemicals brings strong operational and financial performance. Over the last five years, it has consistently delivered EBITDA margins in excess of 20 percent and converted approximately 75 percent of its EBITDA to free cash flow. It is a low cost, vertically integrated producer of a functionally irreplaceable chemical component of products that are used globally and growing at GDP-like rates - just like Tronox. Together, we will form a leading inorganic chemicals company with more stable revenue, cash flow and EBITDA streams and higher net income. We expect to generate approximately $2.6 billion in revenue with significantly greater scale, stability and financial strength."
Casey concluded: "And to further underscore our continued commitment to build value for our shareholders, for the eleventh straight quarter our Board declared a quarterly dividend of $0.25 per share, which constitutes a yield of more than 4 percent."
Alkali Chemicals Acquisition
On February 3, 2015, the company announced that it has signed a definitive agreement with FMC Corporation (NYSE:FMC) to acquire its Alkali Chemicals business for $1.64 billion. The acquisition is expected to be more than $0.50 accretive to EPS, generate approximately $130 million incremental operating cash flow and realize after-tax cash savings of more than $30 million - including utilization of Tronox's U.S. tax attributes - in its first full year following closing. By year three, the acquisition is expected to generate after-tax cash savings of more than $60 million annually. The transaction is expected to close in the first quarter and will be funded through approximately $1 billion of cash and approximately $600 million of new debt pursuant to signed commitments from multiple banks. Tronox places a high value on maintaining its existing credit ratings and believes that the attractive deleveraging profile of the combined entity will reduce the net leverage ratio to less than 4.0x in 12 to 15 months. Alkali Chemicals will operate as a separate business unit and reporting segment. Joining Tronox will be more than 1,000 new colleagues and a senior management team that averages 23 years' experience in the chemicals industry and 13 years' experience with Alkali Chemicals.
Fourth Quarter 2014 Results
Pigment
Pigment segment revenue of $264 million was 5 percent lower than $277 million in the prior-year quarter, as sales volumes declined 1 percent and selling prices declined 5 percent. Sales volumes gains were achieved in North America offset by declines in Europe, Asia and Latin America. Selling prices were lower in North America and in Europe on a local currency basis, modestly lower in Asia and higher in Latin America versus the year-ago quarter. Compared to the seasonally stronger third quarter, sales volumes declined 7 percent to normal seasonal levels and selling prices declined 4 percent. At the end of the fourth quarter, finished pigment inventory was at seasonally normal levels and the average plant utilization rate was more than 90 percent.
Pigment segment operating income of $19 million increased by $45 million versus an operating loss of $26 million in the year-ago quarter. Pigment adjusted EBITDA of $46 million increased by $37 million compared to adjusted EBITDA of $9 million in the year-ago quarter. The adjusted EBITDA margin was 17 percent. Average feedstock cost reflected in the Pigment segment in the fourth quarter was $796 per metric ton compared to $794 per metric ton in the third quarter. During the fourth quarter, 100 percent of feedstock purchases made by Pigment were from Mineral Sands at an average cost of $765 per metric ton. Going forward, the Pigment segment will continue to benefit from lower feedstock costs. The lag time between purchases of feedstock by Pigment to the time that feedstock is reflected in the Pigment segment income statement is typically in the range of 5 to 6 months.
Mineral Sands
Mineral Sands segment revenue of $183 million was 26 percent lower than $248 million in the year-ago quarter, reflecting our decision to withdraw from the external CP titanium slag market in the second half of 2014. Excluding external CP titanium slag sales of $24 million in the prior year, revenue declined 18 percent compared to the year-ago quarter. External sales volumes were up 15 percent excluding prior-year quarter CP titanium slag sales volumes. Selling prices for titanium feedstocks declined in the 10-20 percent range versus the prior-year quarter. Sales volumes for zircon were level to the year-ago quarter and selling prices declined 8 percent. Compared to the third quarter 2014, segment revenue declined 11 percent, driven primarily by a sales volume decline of 7 percent and lower selling prices for natural rutile. Sales volumes for zircon declined 3 percent and selling prices remained level to the prior quarter. Revenue from intercompany sales was $77 million in the quarter. Revenue from external sales was $106 million, including $81 million from zircon and pig iron. Mineral Sands continued to sell 100 percent of its synthetic rutile feedstock to Pigment on an intercompany basis.
Mineral Sands segment operating loss of $8 million compares to operating income of $33 million in the year-ago quarter and $8 million in the prior quarter. Adjusted EBITDA was $54 million versus $93 million in the year ago quarter and $71 million in the prior quarter. The adjusted EBITDA margin was 30 percent versus 38 percent in the prior year and 34 percent in the prior quarter. Mineral Sands segment adjusted EBITDA is calculated before the elimination of gross profit on sales to the Pigment segment that occurs in consolidation at the company level. In the fourth quarter, $6 million of Mineral Sands gross profit was eliminated in consolidation and $10 million of previously eliminated gross profit was reversed, for a net adjusted EBITDA increase in consolidation of $4 million.
Construction continues to progress on schedule at our KZN Sands Fairbreeze mine in South Africa. The Fairbreeze mine will supply feedstock to our slag furnaces at KZN and is expected to begin operations by the end of 2015 and be fully operational in 2016. Capital expenditures related to the Fairbreeze mine from commencement of the implementation phase through 2016 are estimated to be approximately $225 million, with $52 million spent during 2014 and $30 million spent through 2013.
Corporate and Other
Revenue in Corporate and Other, which includes our electrolytic operations, was $30 million compared to $31 million in the year-ago quarter. Corporate and Other loss from operations of $20 million in the quarter compares to a $15 million loss from operations in the prior-year quarter. Adjusted EBITDA in Corporate and Other was ($23) million, which is principally related to corporate operations.
Consolidated
Selling, general and administrative expenses for the company in the fourth quarter were $54 million versus $50 million in the prior-year quarter. Interest and debt expense, net, was $32 million versus $36 million in the year-ago quarter. On December 31, 2014, gross consolidated debt was $2,393 million, and debt, net of cash, was $1,114 million. For the quarter, capital expenditures were $81 million and depreciation, depletion and amortization was $70 million.
Full Year 2014 Results
Despite higher Pigment revenue in 2014 compared to 2013, for the full year 2014, revenue of $1,737 million was 10 percent lower than $1,922 million in 2013 as a result of lower Mineral Sands sales volumes and lower selling prices in Pigment and Mineral Sands. Adjusted EBITDA was $353 million compared to adjusted EBITDA of $362 million in the prior year. Adjusted net loss attributable to Tronox Limited was $75 million, or $0.66 per diluted share, compared to an adjusted net loss attributable to Tronox Limited of $169 million, or $1.49 per diluted share, in the prior year.
Pigment
Pigment segment revenue of $1,179 million was 1 percent higher than $1,169 million in the prior year, as higher sales volumes more than offset lower selling prices. Sales volume gains were realized in North America and were partially offset by lower sales volumes in Latin America and Asia. Selling prices were lower in all regions. Segment operating income of $49 million improved significantly from a segment operating loss of $179 million in the prior year as a result of the sales volume gains and lower feedstock costs. For the full year, Pigment adjusted EBITDA was $157 million and adjusted EBITDA margin was 13 percent.
Mineral Sands
Mineral Sands segment revenue of $794 million declined 28 percent from $1,103 million in the prior year, reflecting lower selling prices and our decision to withdraw from the external CP titanium slag market in the second half of 2014. Operating income of $1 million declined from $238 million in the prior year, driven primarily by lower selling prices and sales volumes. Mineral Sands' adjusted EBITDA was $243 million and adjusted EBITDA margin was 31 percent. Mineral Sands segment adjusted EBITDA is calculated before the elimination of gross profit on sales to the Pigment segment that occurs in consolidation at the company level. For the full year 2014, $41 million of Mineral Sands gross profit was eliminated in consolidation and $71 million of previously eliminated gross profit and $3 million related to Mineral Sands lower-of-cost or market activity was reversed, for a net adjusted EBITDA contribution in consolidation of $33 million.
Mineral Sands Production and Sales Volume Statistics
Production Volume (Thousands of Metric Tons)
-------------------------------------------
Full Year 2014 Full Year 2013 Second Half 2014 Second Half 2013
-------------- -------------- ---------------- ----------------
CP Titanium Slag 358 312 183 149
Synthetic Rutile 221 233 133 124
Rutile Prime 71 70 38 39
Zircon 183 183 92 105
Pig Iron 241 213 117 98
Sales Volume (Thousands of Metric Tons)
--------------------------------------
Full Year 2014 Full Year 2013 Second Half 2014 Second Half 2013
-------------- -------------- ---------------- ----------------
CP Titanium Slag 225 314 74 155
Synthetic Rutile 231 232 139 120
Rutile Prime 83 67 40 40
Zircon 195 236 97 91
Pig Iron 237 220 124 105
Corporate and Other
Revenue in Corporate and Other, which includes our electrolytic manufacturing business, of $113 million compares to $128 million realized in 2013. The electrolytic business generated adjusted EBITDA of $4 million, which was offset by adjusted EBITDA of ($84) million related to corporate operations for a net adjusted EBITDA in Corporate and Other of ($80) million. The Corporate and Other loss from operations of $83 million compares to a loss from operations of $70 million in the prior year, primarily due to lower performance in our electrolytic business and higher spending on growth initiatives.
Consolidated
Selling, general and administrative expenses for the company were $192 million compared to $187 million in the prior year. Interest and debt expense was $133 million versus $130 million in the prior year. On December 31, 2014, gross consolidated debt was $2,393 million, and debt, net of cash, was $1,114 million. For the year, capital expenditures were $187 million and depreciation, depletion and amortization was $295 million.
Fourth Quarter 2014 Conference Call and Webcast
Thursday, February 26, 2015, 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: 877.831.3840
International: +1.253.237.1184
Conference ID: 84481437
Conference Call Presentation Slides: will be used during the conference call and are available on our website at http://www.tronox.com/
Conference Call Replay: available via the Internet and telephone beginning on Thursday, February 26, 2015 at 11:30 a.m. ET (New York), until March 3, 2015
Internet Replay: www.tronox.com
Replay dial-in telephone numbers:
U.S. / Canada: 855.859.2056
International: +1.404.537.3406
Conference ID: 84481437
About Tronox
Tronox is a global leader in the production and marketing of titanium dioxide pigment, mineral sands and electrolytic products. Through the integration of its pigment and mineral sands businesses, the company provides its customers a dependable supply of brightening solutions for a variety of end uses. For more information, visit http://www.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, 2014.
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.
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 Adjusted EBITDA and adjusted net 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 than 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 are 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.
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 in
the same manner as management and in comparing financial results across
accounting periods;
-- 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 purchase
accounting and stock-based compensation charges attempt 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, and
-- In addition, 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.
We believe that the non-U.S. GAAP financial measure "Adjusted net loss attributable to Tronox Limited" and its presentation on a per share basis, provides 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.
Segment Information
The company has two reportable operating segments, Pigment and Mineral Sands. The Pigment segment primarily produces and markets TiO(2,) and has production facilities in the United States, Australia and the Netherlands. The Mineral Sands segment includes the exploration, mining and beneficiation of mineral sands deposits, as well as heavy mineral production. These operations produce titanium feedstock, including ilmenite, chloride slag, slag fines, synthetic rutile and natural rutile, as well as co-products pig iron and zircon. The company's Corporate and Other operations are comprised of corporate activities and electrolytic operations, which are located in the United States.
Segment performance is evaluated based on segment operating profit (loss), which represents the results of segment operations before unallocated costs, such as general corporate expenses not identified to a specific segment, interest expense, other income (expense), and income tax expense or benefit. Sales between segments are generally priced at market.
Media Contact: Bud Grebey
Direct: 203.705.3721
Investor Contact: Brennen Arndt
Direct: 203.705.3722
TRONOX LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. GAAP)
(Millions of U.S. dollars, except share and per share data)
(UNAUDITED)
Three Months Ended
December 31, Year Ended December 31,
------------------- -----------------------
2014 2013 2014 2013
---- ---- ---- ----
Net Sales $400 $436 $1,737 $1,922
Cost of goods
sold 346 382 1,530 1,732
Gross Profit 54 54 207 190
Selling,
general, and
administrative
expenses (54) (50) (192) (187)
Restructuring
expense (5) - (15) -
Income (Loss) from Operations (5) 4 - 3
Interest and
debt expense,
net (32) (36) (133) (130)
Net gain
(loss) on
liquidation
of non-
operating
subsidiaries - 34 (35) 24
Loss on
extinguishment
of debt - - (8) (4)
Other income,
net 15 14 27 46
Income (Loss) before Income Taxes (22) 16 (149) (61)
Income tax
provision (253) (19) (268) (29)
Net Loss (275) (3) (417) (90)
Net income
attributable
to
noncontrolling
interest 1 4 10 36
Net Loss attributable to Tronox Limited $(276) $(7) $(427) $(126)
===== === ===== =====
Loss per share, Basic and Diluted:
Basic $(2.40) $(0.06) $(3.74) $(1.11)
Diluted $(2.40) $(0.06) $(3.74) $(1.11)
Weighted Average Shares Outstanding (in
thousands):
Basic 115,036 113,497 114,281 113,416
Diluted 115,036 113,497 114,281 113,416
Other Operating Data:
---------------------
Capital
expenditures $81 $61 $187 $165
Depreciation,
depletion and
amortization
expense $70 $95 $295 $333
-------------- --- --- ---- ----
TRONOX LIMITED
SCHEDULE OF ADJUSTED EARNINGS (NON-U.S. GAAP)*
(UNAUDITED)
(Millions of U.S. dollars, except share and per share data)
Three Months Ended December 31, Year Ended December 31,
------------------------------- -----------------------
2014 2013 2014 2013
---- ---- ---- ----
Net Sales $400 $436 $1,737 $1,922
Cost of goods sold 346 396 1,530 1,764
Gross Profit 54 40 207 158
Selling, general, and
administrative
expenses (51) (50) (189) (187)
Adjusted Income (Loss) from Operations 3 (10) 18 (29)
Interest and debt
expense (32) (36) (133) (130)
Loss on extinguishment
of debt - - (8) (4)
Other income (expense) 6 14 18 46
Adjusted Loss before Income Taxes (23) (32) (105) (117)
Income tax benefit
(provision) 2 (15) 41 (20)
Adjusted Net Loss (21) (47) (64) (137)
Income attributable to
noncontrolling
interest 2 1 11 32
Adjusted Net Loss attributable to
Tronox Limited
Shareholders (Non-
U.S. GAAP)* $(23) $(48) $(75) $(169)
Diluted adjusted net loss per share,
attributable to Tronox
Limited Shareholders $(0.20) $(0.42) $(0.66) $(1.49)
Weighted average number of shares used in diluted adjusted
after-tax
Loss per share (in
thousands) 115,036 113,497 114,281 113,416
* We believe that the non-U.S.
GAAP financial measure
"Adjusted net loss attributable
to Tronox Limited" and its
presentation on a per share
basis, provides 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. Additionally,
the above schedule is presented
in a format which reflects the
manner in which we manage our
business, and is not in
accordance with U.S. GAAP.
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 SHAREHOLDERS (U.S. GAAP)
TO ADJUSTED LOSS
ATTRIBUTABLE TO TRONOX LIMITED SHAREHOLDERS (NON-U.S. GAAP)
Three Months Ended December 31, Year Ended December 31,
------------------------------- -----------------------
2014 2013 2014 2013
---- ---- ---- ----
Net loss attributable to Tronox Limited
Shareholders (U.S. GAAP) $(276) $(7) $(427) $(126)
Restructuring expense (a) 5 - 15 -
Contract settlements, net (b) 3 - 3 -
Pension and postretirement benefit
curtailment gains (c) (9) - (9) -
Net gain (loss) on liquidation of non-
operating subsidiaries (d) - (34) 35 (24)
Acquisition related expense (e) - (14) - (32)
Tax valuation allowances (f) 255 - 311 -
Tax and noncontrolling impact of
restructuring, liquidation of non-operating (1) 7 (3) 13
subsidiaries and acquisition related items
(g)
Adjusted net loss attributable to Tronox
Limited (Non-U.S. GAAP) $(23) $(48) $(75) $(169)
==== ==== ==== =====
Diluted net loss per share attributable to
Tronox Limited (U.S. GAAP) $(2.40) $(0.06) $(3.74) $(1.11)
Restructuring expense, per diluted share 0.04 - 0.13 -
Contract settlements, net, per diluted share 0.03 - 0.03 -
Pension and postretirement benefit
curtailment gains,per diluted share (0.08) - (0.08) -
Net gain (loss) on liquidation of non-
operating subsidiaries, per diluted share - (0.30) 0.31 (0.21)
Acquisition related expense, per diluted
share - (0.12) - (0.28)
Tax valuation allowances, per diluted share 2.22 - 2.72 -
Tax and noncontrolling impact of
restructuring, liquidation of non-operating
subsidiaries and acquisition related items,
per diluted share (0.01) 0.06 (0.03) 0.11
----- ---- ----- ----
Diluted adjusted loss per share attributable
to Tronox Limited (Non-U.S. $(0.20) $(0.42) $(0.66) $(1.49)
GAAP)
Weighted average shares outstanding, diluted
(in thousands) 115,036 113,497 114,281 113,416
======= ======= ======= =======
(a) Represents severance, outplacement services and other associated
costs and expenses associated with our cost reduction initiative,
which began in September 2014.
(b) Represents
various
contract
settlements,
net of
related
expenses.
(c) Represents a pension curtailment in the Netherlands and a
postretirement benefit curtailment in the United States.
(d) Represents the liquidation of non-operating subsidiaries, Tronox
Pigments International GmbH in 2014 and the Zurich branch of Tronox
Luxembourg S.a.r.l. in 2013.
(e) One-time non-operating items and the effects of the acquisition
of the mineral sands business.
(f) Represents an adjustment to account for full valuation allowances
for deferred tax assets in the Netherlands and Australia in 2014.
(g) Represents the tax and noncontrolling impact on items referenced
in notes (a), (d) and (e).
TRONOX LIMITED
SEGMENT INFORMATION
(Millions of U.S. dollars)
(UNAUDITED)
Three Months Ended December 31, Year Ended December 31,
------------------------------- -----------------------
2014 2013 2014 2013
---- ---- ---- ----
Sales
Mineral Sands Segment $183 $248 $794 $1,103
Pigment Segment 264 277 1,179 1,169
Corporate and Other 30 31 113 128
Eliminations (77) (120) (349) (478)
--- ---- ---- ----
Net Sales $400 $436 $1,737 $1,922
==== ==== ====== ======
Income (loss) from Operations
Mineral Sands Segment $(8) $33 $1 $238
Pigment Segment 19 (26) 49 (179)
Corporate and Other (20) (15) (83) (70)
Eliminations 4 12 33 14
--- --- --- ---
Income (Loss) from Operations (5) 4 - 3
Interest and debt expense, net (32) (36) (133) (130)
Net gain (loss) on liquidation of
non-operating subsidiaries - 34 (35) 24
Loss on extinguishment of debt - - (8) (4)
Other income, net 15 14 27 46
Income (Loss) before Income Taxes (22) 16 (149) (61)
Income tax provision (253) (19) (268) (29)
---- --- ---- ---
Net Loss (275) (3) (417) (90)
Income attributable to noncontrolling
interest 1 4 10 36
--- --- --- ---
Net Loss attributable to Tronox
Limited $(276) $(7) $(427) $(126)
===== === ===== =====
TRONOX LIMITED
CONSOLIDATED BALANCE SHEETS
(Millions of U.S. dollars, except share and per share data)
Year Ended December 31,
-----------------------
ASSETS 2014 2013
---- ----
Current Assets
Cash and cash
equivalents $1,279 $1,478
Accounts
receivable, net of
allowance for
doubtful accounts 277 308
Inventories, net 770 759
Prepaid and other
assets 42 61
Deferred tax assets 13 47
Total current
assets 2,381 2,653
Noncurrent Assets
Property, plant and
equipment, net 1,227 1,258
Mineral leaseholds,
net 1,058 1,216
Intangible assets,
net 272 300
Inventories, net 57 -
Long-term deferred
tax assets 9 192
Other long-term
assets 61 80
Total assets $5,065 $5,699
====== ======
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $160 $164
Accrued liabilities 147 146
Long-term debt due
within one year 18 18
Income taxes
payable 32 28
Deferred tax
liabilities 9 7
Total current
liabilities 366 363
Noncurrent Liabilities
Long-term debt 2,375 2,395
Pension and
postretirement
healthcare
benefits 172 148
Asset retirement
obligation 85 90
Long-term deferred
tax liabilities 204 204
Other long-term
liabilities 75 62
Total
liabilities 3,277 3,262
----- -----
Contingencies and Commitments
Shareholders' Equity
Tronox Limited
Class A ordinary
shares, par value
$0.01 -65,152,145
shares issued and 1 1
63,968,616 shares
outstanding at
December 31, 2014
and 64,046,647
shares issued and
62,349,618 shares
outstanding at
December 31, 2013
Tronox Limited
Class B ordinary
shares, par value
$0.01 -51,154,280
shares issued and - -
outstanding at
December 31, 2014
and 2013
Capital in excess
of par value 1,476 1,448
Retained earnings 529 1,073
Accumulated other
comprehensive loss (396) (284)
Total
shareholders'
equity 1,610 2,238
Noncontrolling
interest 178 199
Total equity 1,788 2,437
-----
Total
liabilities
and equity $5,065 $5,699
====== ======
TRONOX LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of U.S. dollars)
Year Ended December 31,
-----------------------
2014 2013
---- ----
Cash Flows from Operating Activities:
Net loss $(417) $(90)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation,
depletion and
amortization 295 333
Deferred
income taxes 237 33
Share-based
compensation
expense 22 17
Amortization
of deferred
debt issuance
costs and
discount on
debt 10 9
Pension and
postretirement
healthcare
benefit
(income)
expense (3) 9
Net (gain)
loss on
liquidation
of non-
operating
subsidiaries 35 (24)
Loss on
extinguishment
of debt 8 4
Amortization
of fair value
inventory
step-up and
unfavorable
ore contracts
liability - (32)
Other noncash
items
affecting net
loss 3 (15)
Contributions
to employee
pension and
postretirement
plans (18) (6)
Changes in assets and liabilities:
(Increase)
decrease in
accounts
receivable 23 58
(Increase)
decrease in
inventories (101) 75
(Increase)
decrease in
prepaid and
other assets 9 (15)
Increase
(decrease) in
accounts
payable and
accrued
liabilities 22 (16)
Increase
(decrease) in
income taxes
payable 20 (25)
Other, net (4) 15
---
Cash provided
by operating
activities 141 330
--- ---
Cash Flows from Investing Activities:
Capital
expenditures (187) (165)
Proceeds from
the sale of
assets - 1
Cash used in
investing
activities (187) (164)
---- ----
Cash Flows from Financing Activities:
Repayments of
debt (20) (189)
Proceeds from
debt - 945
Debt issuance
costs (2) (29)
Dividends paid (116) (115)
Proceeds from
the exercise
of warrants
and options 6 2
Cash provided
by (used in)
financing
activities (132) 614
---- ---
Effects of
exchange rate
changes on
cash and cash
equivalents (21) (18)
--- ---
Net increase
(decrease) in
cash and cash
equivalents (199) 762
Cash and cash
equivalents
at beginning
of period 1,478 716
Cash and cash
equivalents
at end of
period $1,279 $1,478
====== ======
Supplemental cash flow information:
Interest paid $126 $123
==== ====
Income taxes
paid $3 $25
=== ===
TRONOX LIMITED
RECONCILIATION OF NET LOSS TO EBITDA AND ADJUSTED EBITDA (NON-U.S. GAAP)
(UNAUDITED)
(Millions of U.S. dollars)
Three Months Ended December 31, Year Ended December 31,
------------------------------- -----------------------
2014 2013 2014 2013
---- ---- ---- ----
Net Loss $(275) $(3) $(417) $(90)
Interest and debt expense, net 32 36 133 130
Interest income (3) (3) (13) (8)
Income tax provision 253 19 268 29
Depreciation, depletion and
amortization expense 70 95 295 333
---
EBITDA 77 144 266 394
Share-based compensation 5 1 22 17
Restructuring expense 5 - 15 -
Net (gain) loss on liquidation of
non-operating subsidiaries - (34) 35 (24)
Loss on extinguishment of debt - - 8 4
Pension and postretirement benefit
curtailment gains (9) - (9) -
Amortization of inventory step-up
and unfavorable ore sales contracts
liability - (14) - (32)
Foreign currency remeasurement (4) (5) (4) (20)
Other items (a) 7 4 20 23
Adjusted EBITDA $81 $96 $353 $362
=== === ==== ====
Adjusted EBITDA by Segment
Mineral Sands Segment $54 $93 $243 $474
Pigment Segment 46 9 157 (57)
Corporate and Other (23) (17) (80) (69)
Eliminations 4 11 33 14
--- --- --- ---
$81 $96 $353 $362
=== === ==== ====
(a) Includes
noncash
pension and
postretirement
costs,
accretion
expense,
severance
expense, gain
(loss) on the
sale of
assets, and
other items.
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SOURCE Tronox Limited
