TRONOX LTD STAMFORD, Conn., Aug. 8, 2017 /PRNewswire/ -- Tronox Limited (NYSE:TROX) reported revenue of $622 million for the second quarter 2017, up 16 percent compared to $538 million in the second quarter 2016 and up 9 percent compared to $569 million in the first quarter 2017. Income from operations of $55 million in the quarter increased from $9 million in the year-ago quarter and $16 million in the prior quarter. Net income attributable to Tronox Limited of $3 million, or $0.02 per diluted share, which included acquisition related expenses of $9 million, or $0.07 per diluted share, improved from a net loss attributable to Tronox Limited of $52 million, or ($0.44) per diluted share in the year-ago quarter and a net loss attributable to Tronox Limited of $41 million, or ($0.35) per diluted share in the prior quarter. Excluding the acquisition related expenses, adjusted net income attributable to Tronox Limited (Non-GAAP) was $12 million, or $0.09 per diluted share. Adjusted EBITDA of $140 million was 97 percent higher than the $71 million reported in the year-ago quarter and 39 percent higher than the $101 million reported in the prior quarter.
Peter Johnston, chief executive officer of Tronox, said: "As we pre-released last week, our performance in the second quarter was strong with revenue up 16 percent over prior year, adjusted EBITDA of $140 million and adjusted EPS of $0.09. Our TiO(2) business led the way with revenue growth of 26 percent and adjusted EBITDA growth of 116 percent versus prior year. TiO(2 )achieved an adjusted EBITDA margin of 29 percent, a clear indication of the benefits of vertical integration with all our assets in full operation. Driving this performance in TiO(2) were higher pigment sales volumes and selling prices, up 7 percent sequentially and 18 percent versus prior year, higher selling prices for titanium feedstock and co-products, as well as higher production efficiency and strong cost performance. Alkali Chemicals delivered adjusted EBITDA of $41 million, up 41 percent versus prior year, benefiting from higher production volumes and lower operating costs. Our cash generation performance further strengthened our balance sheet, as we closed the quarter with $303 million of cash on hand and liquidity of $484 million.
"We are making great progress toward reaching our goal of positioning Tronox as the global leader in TiO(2). Last week, we signed a definitive agreement to sell Alkali Chemicals with closing expected in the second half of 2017. The proceeds will be used to fund the majority portion of the cash consideration for the Cristal TiO(2) acquisition, which is expected to close by the end of the first quarter of 2018. We also announced our intent to refinance a portion of our capital structure with the expectation of lowering our overall cost of debt, extending the portfolio's weighted average years to maturity, improving our mix of secured and unsecured debt and providing additional pay down flexibility. We expect to complete this refinancing by mid-October. Cristal TiO(2 )integration planning is proceeding on schedule so that we can from day one begin to realize the substantial value creation enabled by our combination. We are confident that 2017 will continue to be a year of strong performance and that 2018 will be a transformational one for Tronox."
Second Quarter 2017
Tronox TiO(2)
TiO(2 )segment revenue of $421 million increased 26 percent compared to $333 million in the year-ago quarter, driven by higher pigment selling prices and sales volumes coupled with higher titanium feedstock and co-products selling prices. Pigment sales of $306 million increased 25 percent compared to $244 million in the year-ago quarter, as average selling prices increased 18 percent (19 percent on a local currency basis) and sales volumes increased 6 percent. Pigment selling prices were higher in all regions. Titanium feedstock and co-products sales of $99 million increased 36 percent from $73 million in the year-ago quarter, driven by higher selling prices in all major products and higher feedstock volumes. CP titanium slag selling prices increased 4 percent and sales volumes increased 144 percent. llmenite selling prices increased 20 percent and sales volumes increased 201 percent. Zircon selling prices increased 4 percent while sales volumes were 11 percent lower due to timing as a shipment originally scheduled for the second quarter shipped in the third quarter. Natural rutile selling prices increased 8 percent and sales volumes increased 34 percent. Pig iron selling prices increased 38 percent while sales volumes were 14 percent lower as a shipment moved from the second quarter to the third quarter.
Compared sequentially, TiO(2) segment revenue of $421 million increased 11 percent versus $378 million in the first quarter, driven by higher pigment selling prices and sales volumes, higher feedstock and co-products selling prices, as well as higher CP titanium slag and ilmenite sales volumes. Pigment sales of $306 million were 12 percent higher than sales of $272 million in the prior quarter, as selling prices increased 7 percent (6 percent on a local currency basis) and sales volumes increased 6 percent. Selling prices were higher in all regions. Titanium feedstock and co-products sales of $99 million increased from $92 million in the first quarter. CP titanium slag sales were up 50 percent as selling prices increased 6 percent and sales volumes increased 47 percent. Ilmenite selling prices improved 9 percent and sales volumes increased 55 percent. Zircon selling prices increased 4 percent while sales volumes were 26 percent lower due to the timing of shipments. Natural rutile selling prices improved by 4 percent and sales volumes increased 36 percent. Pig iron selling prices were 10 percent higher and sales volumes increased 2 percent.
TiO(2 )segment adjusted EBITDA of $123 million was 116 percent, or $66 million, higher than $57 million in the year-ago quarter driven by higher selling prices and sales volumes for both pigment and feedstock and co-products coupled with the benefit of higher production efficiency and strong cost performance. Compared sequentially, segment adjusted EBITDA of $123 million improved by 45 percent from $85 million in the first quarter, driven by the same factors as the year-on-year performance. TiO(2) segment income from operations of $61 million improved from $7 million in the year-ago quarter and $32 million in the prior quarter. TiO(2) delivered free cash flow of $67 million in the second quarter, as cash provided by operating activities was $86 million and capital expenditures were $19 million.
Tronox Alkali
Alkali segment revenue of $201 million in the second quarter compared to $205 million in the year-ago quarter as sales volumes were level and selling prices were 1 percent lower. In the domestic market, selling prices were 1 percent higher than the prior-year quarter while sales volumes were 6 percent lower due to timing of shipments and lower demand in container glass and detergent markets. In export markets, sales volumes increased 5 percent driven by higher demand in Asia-Pacific and Latin America and selling prices were level to the year-ago quarter.
Compared sequentially, Alkali revenue of $201 million increased 5 percent from $191 million in the first quarter, as sales volumes increased 5 percent and selling prices increased 1 percent. Domestic sales volumes increased 5 percent while selling prices were 1 percent higher. Export sales volumes increased 4 percent with selling prices also 1 percent higher.
Alkali segment adjusted EBITDA of $41 million increased from $29 million in the year-ago quarter driven by higher production volumes and lower operating costs. The prior-year quarter included items totaling approximately $9 million that did not occur in the current quarter, which were the move of our longwall mining machine, the transition from a shared services agreement to a Tronox system and labor agreement supply reliability planning costs. Compared sequentially, Alkali segment adjusted EBITDA of $41 million increased from $38 million in the first quarter driven by higher sales volumes and selling prices. Alkali segment income from operations of $23 million compared to $12 million in the year-ago quarter and $19 million in the prior quarter. Alkali delivered free cash flow of $31 million in the second quarter, as cash provided by operating activities was $35 million and capital expenditures were $4 million.
Corporate
Corporate loss from operations was $29 million compared to a loss from operations of $10 million in the year-ago quarter and a loss from operations of $35 million in the first quarter. The loss from operations in the second quarter included professional fees of $11 million primarily related to the Cristal transaction and the process to market our Alkali business, as well as higher employee stock-based and other compensation costs of $5 million. Corporate adjusted EBITDA was ($24) million compared to adjusted EBITDA of ($15) million in the year-ago quarter and adjusted EBITDA of ($22) million in the prior quarter. Corporate cash used in operations was $44 million and capital expenditures were $1 million.
Consolidated
Selling, general and administrative expenses were $69 million in the second quarter compared to $51 million in the year-ago quarter and $74 million in the prior quarter. The selling, general and administrative expenses in the second quarter included professional fees of $11 million primarily related to the Cristal transaction and the process to market our Alkali business, as well as higher employee stock-based and other compensation costs of $7 million. Interest and debt expense of $46 million was level to the year-ago quarter and the prior quarter. On June 30, 2017, gross consolidated debt was $3,052 million, and debt, net of cash and cash equivalents, was $2,749 million. Liquidity was $484 million and cash and cash equivalents were $303 million. Capital expenditures were $24 million and depreciation, depletion and amortization expense was $62 million.
Webcast Conference Call
Tronox will conduct a conference call on Wednesday, August 9, 2017, 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: 54296385
Conference Call Presentation Slides will be used during the conference call and are available on our website at http://www.tronox.com/
Webcast Conference Call Replay: Available via the Internet and telephone beginning on Wednesday, August 9, 2017 at 10:30 a.m. ET (New York), until 1:00 p.m. ET (New York), on Monday, August 14, 2017.
Internet Replay: www.tronox.com
Replay dial-in telephone numbers:
U.S. / Canada: +1.855.859.2056
International: +1.404.537.3406
Conference ID: 54296385
Upcoming Conferences
During the third quarter 2017 a member of management is scheduled to present at the following conferences:
-- UBS Chemicals Conference, New York, September 6, 2017
-- Credit Suisse Basic Materials Conference, New York, September 13, 2017
-- RBC Global Industrials Conference, Las Vegas, September 14, 2017
Accompanying conference materials will be available at http://investor.tronox.com
About Tronox
Tronox Limited operates two vertically integrated mining and inorganic chemical businesses. Tronox TiO(2) 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. Tronox Alkali mines trona ore and manufactures natural soda ash, sodium bicarbonate, caustic soda, and other compounds which are used in the production of glass, detergents, baked goods, animal nutrition supplements, pharmaceuticals, and other essential products. For more information, visit 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, 2016.
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 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 EBITDA, Adjusted EBITDA, free cash flow 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;
-- 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 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: Bud Grebey
Direct: +1.203.705.3721
Investor Contact: Brennen Arndt
Direct: +1.203.705.3722
TRONOX LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (US GAAP)
(UNAUDITED)
(Millions of U.S. dollars, except share and per share data)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
Net sales $622 $538 $1,191 $1,014
Cost of goods sold 498 479 977 934
Gross profit 124 59 214 80
Selling, general, and
administrative expenses (69) (51) (143) (101)
Restructuring income (expense) - 1 - (1)
Income (loss) from operations 55 9 71 (22)
Interest and debt expense, net (46) (46) (92) (92)
Gain on extinguishment of debt - - - 4
Other expense, net (1) (3) (7) (12)
Income (loss) before income taxes 8 (40) (28) (122)
Income tax provision (3) (10) (5) (22)
Net income (loss) 5 (50) (33) (144)
Net income (loss) attributable to
noncontrolling interest 2 2 5 1
Net income (loss) attributable to
Tronox Limited $3 $(52) $(38) $(145)
=== ==== ==== =====
Net income (loss) per share, basic and
diluted $0.02 $(0.44) $(0.32) $(1.24)
===== ====== ====== ======
Weighted average shares outstanding
(in thousands):
Basic 119,188 116,184 118,804 116,052
Diluted 124,301 116,184 118,804 116,052
Other Operating Data:
---------------------
Capital expenditures $24 $22 $56 $55
Depreciation, depletion and
amortization expense $62 $60 $123 $115
---------------------------- --- --- ---- ----
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 INCOME (LOSS)
ATTRIBUTABLE TO TRONOX LIMITED (U.S. GAAP)
TO ADJUSTED NET INCOME (LOSS)
ATTRIBUTABLE TO TRONOX LIMITED (NON-U.S. GAAP)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
Net income (loss)
attributable to Tronox
Limited (U.S. GAAP) $3 $(52) $(38) $(145)
Acquisition related matters
(a) 9 - 20 -
Restructuring (income)
expense (b) - (1) - 1
Gain on extinguishment of
debt (c) - - - (4)
Adjusted net income (loss)
attributable to Tronox
Limited (non-U.S. GAAP) (d) $12 $(53) $(18) $(148)
=== ==== ==== =====
Diluted net income (loss) per
share attributable to Tronox
Limited (U.S. GAAP) $0.02 $(0.44) $(0.32) $(1.24)
Acquisition related expense,
per share 0.07 - 0.17 -
Restructuring (income)
expense, per share - (0.01) - 0.01
Gain on extinguishment of
debt, per share - - - (0.03)
Diluted adjusted income
(loss) per share
attributable to Tronox
Limited (non-U.S. GAAP) $0.09 $(0.45) $(0.15) $(1.26)
===== ====== ====== ======
Weighted average shares
outstanding, diluted (in
thousands) 124,301 116,184 118,804 116,052
======= ======= ======= =======
(a) 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 during
the three and six months ended
June 30, 2017.
(b) Represents severance costs
associated with the shutdown of
our sodium chlorate plant and
other global TiO2 restructuring
efforts, which was recorded in
"Restructuring expense" in the
unaudited Condensed Consolidated
Statements of Operations.
(c) Represents the gain associated with
the repurchase of $20 million face
value of the $900 million
aggregate principal amount of
senior notes ("Senior Notes due
2020") and $600 million aggregate
principal amount of senior notes
("Senior Notes 2022"), which was
recorded in "Gain on
extinguishment of debt" in the
unaudited Condensed Consolidated
Statements of Operations.
(d) No income tax impact given full
valuation allowance except for
South Africa restructuring related
costs of less than $1 million.
TRONOX LIMITED
SEGMENT INFORMATION
(UNAUDITED)
(Millions of U.S. dollars)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
TiO2 segment $421 $333 $799 $618
Alkali segment 201 205 392 396
--- --- --- ---
Net sales $622 $538 $1,191 $1,014
==== ==== ====== ======
TiO2 segment $61 $7 $93 $(29)
Alkali segment 23 12 42 33
Corporate (29) (10) (64) (26)
--- --- --- ---
Income (loss) from operations 55 9 71 (22)
Interest and debt expense, net (46) (46) (92) (92)
Gain on extinguishment of debt - - - 4
Other expense, net (1) (3) (7) (12)
Income (loss) before income taxes 8 (40) (28) (122)
Income tax provision (3) (10) (5) (22)
--- --- --- ---
Net income (loss) 5 (50) (33) (144)
Net income (loss) attributable to
noncontrolling interest 2 2 5 1
--- --- --- ---
Net income (loss) attributable to
Tronox Limited $3 $(52) $(38) $(145)
=== ==== ==== =====
TRONOX LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Millions of U.S. dollars, except share and per share data)
June 30, December 31,
ASSETS 2017 2016
---- ----
Current Assets
Cash and cash
equivalents $303 $248
Restricted cash 2 3
Accounts
receivable, net
of allowance for
doubtful accounts 457 424
Inventories, net 506 532
Prepaid and other
assets 54 49
Total current assets 1,322 1,256
Noncurrent Assets
Property, plant
and equipment,
net 1,816 1,831
Mineral
leaseholds, net 1,608 1,607
Intangible assets,
net 210 223
Inventories, net 15 14
Other long-term
assets 23 22
Total assets $4,994 $4,953
====== ======
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $201 $180
Accrued
liabilities 181 186
Short-term debt 150 150
Long-term debt
due within one
year 16 16
Income taxes
payable 2 1
Total current liabilities 550 533
Noncurrent Liabilities
Long-term debt,
net 2,886 2,888
Pension and
postretirement
healthcare
benefits 116 122
Asset retirement
obligations 76 73
Long-term
deferred tax
liabilities 161 152
Other long-term
liabilities 30 32
Total liabilities 3,819 3,800
----- -----
Commitments and Contingencies
Shareholders' Equity
Tronox Limited Class A
ordinary shares, par
value $0.01 -
67,903,699 shares
issued and 67,727,227
shares outstanding at
June 30, 2017 and
65,998,306 shares
issued and 65,165,672
shares outstanding
at December 31, 2016 1 1
Tronox Limited Class B
ordinary shares, par
value $0.01 -
51,154,280 shares
issued and
outstanding at June
30, 2017 and December
31, 2016. - -
Capital in excess
of par value 1,535 1,524
Accumulated
deficit (69) (19)
Accumulated other
comprehensive
loss (454) (497)
Total Tronox Limited shareholders'
equity 1,013 1,009
Noncontrolling
interest 162 144
Total equity 1,175 1,153
----- -----
Total liabilities and equity $4,994 $4,953
====== ======
TRONOX LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Millions of U.S. dollars)
Six Months Ended
June 30,
2017 2016
---- ----
Cash Flows from Operating Activities:
Net loss $(33) $(144)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation, depletion
and amortization 123 115
Deferred income taxes 2 (3)
Share-based compensation
expense 22 10
Amortization of deferred
debt issuance costs and
discount on debt 6 5
Pension and postretirement
healthcare benefit
expense 4 3
Gain on extinguishment of
debt - (4)
Other, net 9 20
Contributions to employee
pension and
postretirement plans (11) (9)
Changes in assets and liabilities:
(Increase) decrease in
accounts receivable, net (28) (13)
(Increase) decrease in
inventories, net 36 87
(Increase) decrease in
prepaid and other assets (6) (2)
Increase (decrease) in
accounts payable and
accrued liabilities 12 (16)
Increase (decrease) in
income taxes payable 1 20
Cash provided by operating
activities 137 69
--- ---
Cash Flows from Investing Activities:
Capital expenditures (56) (55)
Proceeds from the sale of
assets - 1
Cash used in investing
activities (56) (54)
--- ---
Cash Flows from Financing Activities:
Repayments of debt (8) (23)
Proceeds from debt - -
Dividends paid (12) (35)
Restricted stock and
performance-based shares
settled in cash for taxes (11) -
Cash used in financing
activities (31) (58)
--- ---
Effects of exchange rate
changes on cash and cash
equivalents 5 2
--- ---
Net increase (decrease) in
cash and cash equivalents 55 (41)
Cash and cash equivalents
at beginning of period 248 229
--- ---
Cash and cash equivalents
at end of period $303 $188
==== ====
TRONOX LIMITED
CONDENSED STATEMENT OF FREE CASH FLOWS (NON-U.S. GAAP)
(UNAUDITED)
(Millions of U.S. dollars)
Three Months Ended Six Months Ended
June 30, 2017 June 30, 2017
------------- -------------
TiO2 Alkali Corporate Consolidated TiO2 Alkali Corporate Consolidated
---- ------ --------- ------------ ---- ------ --------- ------------
Operating income
(loss) (U.S. GAAP) $61 $23 $(29) $55 $93 $42 $(64) $71
Depreciation,
depletion and
amortization expense 44 16 2 62 88 32 3 123
Other 18 2 3 23 27 5 15 47
--- --- --- --- --- --- --- ---
Adjusted EBITDA (non-
U.S. GAAP) $123 $41 $(24) $140 $208 $79 $(46) $241
==== === ==== ==== ==== === ==== ====
Adjusted EBITDA (non-
U.S. GAAP) $123 $41 $(24) $140 $208 $79 $(46) $241
Interest paid, net of
capitalized interest
and - - (16) (16) - - (84) (84)
interest income
Income tax provision - - (3) (3) - - (5) (5)
Transaction costs - - (9) (9) - - (20) (20)
Contributions to
employee pension and (5) (1) - (6) (9) (2) - (11)
postretirement plans
Deferred income taxes - - 3 3 - - 2 2
Other (3) (1) (26) (30) - (1) - (1)
Changes in assets and liabilities
(Increase) decrease
in accounts
receivable, net (25) - - (25) (35) 7 - (28)
(Increase) decrease
in inventories, net 10 - - 10 37 (1) - 36
(Increase) decrease
in prepaid and other
assets (15) (1) 1 (15) (10) 4 - (6)
Increase (decrease)
in accounts payable
and 1 (3) 31 29 6 2 4 12
accrued liabilities
Increase (decrease)
in income taxes
payable - - (1) (1) - - 1 1
Subtotal (29) (4) 31 (2) (2) 12 5 15
--- --- --- --- --- --- --- ---
Cash provided by
(used in) operating
activities 86 35 (44) 77 197 88 (148) 137
Capital expenditures (19) (4) (1) (24) (39) (16) (1) (56)
--- --- --- --- --- --- --- ---
Free cash flow (non-
U.S. GAAP) $67 $31 $(45) $53 $158 $72 $(149) $81
=== === ==== === ==== === ===== ===
TRONOX LIMITED
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA (NON-U.S. GAAP)
(UNAUDITED)
(Millions of U.S. dollars)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
Net income (loss) (U.S. GAAP) $5 $(50) $(33) $(144)
Interest and debt expense, net 46 46 92 92
Interest income (1) (1) (2) (2)
Income tax provision 3 10 5 22
Depreciation, depletion and
amortization expense 62 60 123 115
---
EBITDA (non-U.S. GAAP) 115 65 185 83
Share-based compensation (a) 8 5 22 10
Transaction costs (b) 9 - 20 -
Restructuring (income) expense (c) - (1) - 1
Gain on extinguishment of debt (d) - - - (4)
Foreign currency remeasurement (e) 3 4 6 18
Other items (f) 5 (2) 8 3
Adjusted EBITDA (non-U.S.
GAAP) (g) $140 $71 $241 $111
==== === ==== ====
(a) Represents
non-cash
share-based
compensation.
(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
severance and
other costs
associated
with the
shutdown of
our sodium
chlorate
plant, and
other global
restructuring
efforts which
was recorded
in
"Restructuring
income
(expense)" in
the unaudited
Condensed
Consolidated
Statements of
Operations.
(d) During 2016,
we recognized
$4 million of
gain
associated
with the
repurchase of
$20 million
face value of
our Senior
Notes due
2020 and
Senior Notes
due 2022,
which was
recorded in
"Gain on
extinguishment
of debt" 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,
insurance
settlement
gain and
other items
included in
"Selling,
general and
administrative
expenses" and
"Cost of
goods sold"
in the
unaudited
Condensed
Consolidated
Statements of
Operations.
(g) No income tax
impact given
full
valuation
allowance
except for
South Africa
related
restructuring
costs.
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 Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
TiO2 segment $61 $7 $93 $(29)
Alkali segment 23 12 42 33
Corporate (29) (10) (64) (26)
Income (loss) from
operations (U.S. GAAP) 55 9 71 (22)
TiO2 segment 44 43 88 83
Alkali segment 16 15 32 29
Corporate 2 2 3 3
Depreciation, depletion
and amortization
expense 62 60 123 115
TiO2 segment 18 7 27 25
Alkali segment 2 2 5 3
Corporate 3 (7) 15 (10)
Other 23 2 47 18
TiO2 segment 123 57 208 79
Alkali segment 41 29 79 65
Corporate (24) (15) (46) (33)
Adjusted EBITDA (non-
U.S. GAAP) $140 $71 $241 $111
==== === ==== ====
TRONOX LIMITED
REVISION OF PREVIOUSLY ISSUED INTERIM UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
(Millions of U.S. dollars)
Unaudited Condensed Consolidated Statement of Operations
Three Months Ended Six Months Ended
June 30, 2016 June 30, 2016
------------- -------------
As Reported Adjustment Revised As Reported Adjustment Revised
----------- ---------- ------- ----------- ---------- -------
Net sales $537 $1 $538 $1,012 $2 $1,014
Cost of goods sold 480 (1) 479 935 (1) 934
Gross profit 57 2 59 77 3 80
Selling, general and administrative
expenses (50) (1) (51) (97) (4) (101)
Income (loss) from operations 8 1 9 (21) (1) (22)
Other expense, net - (3) (3) (9) (3) (12)
Loss before income taxes (38) (2) (40) (118) (4) (122)
Net loss (48) (2) (50) (140) (4) (144)
Net loss attributable to Tronox
Limited (50) (2) (52) (141) (4) (145)
Loss per share, basic and diluted (0.42) (0.02) (0.44) (1.21) (0.03) (1.24)
Weighted average shares
outstanding, basic and diluted (in
thousands) 116,184 116,184 116,184 116,052 116,052 116,052
Unaudited Condensed Consolidated Balance Sheet
December 31, 2016
-----------------
As Reported Adjustment Revised
----------- ---------- -------
Accounts receivable, net of
allowance for $421 $3 $424
doubtful accounts
Total current assets 1,253 3 1,256
Total assets 4,950 3 4,953
Accrued liabilities 174 11 185
Total current liabilities 522 11 533
Total liabilities 3,789 11 3,800
Accumulated deficit (13) (6) (19)
Accumulated other comprehensive
loss (495) (2) (497)
Total Tronox Limited shareholders'
equity 1,017 (8) 1,009
Total equity 1,161 (8) 1,153
Total liabilities and equity 4,950 3 4,953
Unaudited Condensed Consolidated Statement of Cash Flows
The corresponding amounts have been
revised within the statement of cash
flows for the six months ended June 30,
2016 with no net impact to operating,
investing, and financing cash flows.
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SOURCE Tronox Limited
