TRONOX LTD STAMFORD, Conn., Nov. 8, 2017 /PRNewswire/ -- Tronox Limited (NYSE:TROX) reported revenue of $435 million for the third quarter 2017, up 28 percent from $339 million in the year-ago quarter and up 3 percent from $421 million in the prior quarter. Income from operations of $51 million compared to nil in the year-ago quarter and $31 million in the prior quarter. Net loss from continuing operations attributable to Tronox Limited was $31 million, or ($0.26) per diluted share, compared to a net loss from continuing operations attributable to Tronox Limited of $60 million, or ($0.53) per diluted share in the year-ago quarter and net loss from continuing operations attributable to Tronox Limited of $19 million, or ($0.16) per diluted share in the prior quarter. Loss from continuing operations attributable to Tronox Limited included Cristal acquisition-related expenses of $13 million and a loss on the extinguishment of debt of $28 million. Excluding acquisition expenses and the loss on the extinguishment of debt, adjusted net income from continuing operations attributable to Tronox Limited (Non-GAAP) was $10 million, or $0.08 per diluted share. Net loss from discontinued operations, net of tax, was $216 million or ($1.81) per diluted share, including a loss on the sale of Alkali Chemicals of $233 million. Adjusted EBITDA of $123 million was 112 percent higher than the $58 million reported in the year-ago quarter and 24 percent higher than the $99 million reported in the prior quarter.
The Board of Directors declared a quarterly dividend of $0.045 per share payable on December 1, 2017, to shareholders of record of the company's Class A and Class B ordinary shares at the close of business on November 20, 2017.
Peter Johnston, chief executive officer of Tronox, said: "The third quarter was a very successful one for us - strategically, financially and operationally. Our TiO(2) business continued to deliver strong results, posting revenue growth of 28 percent, adjusted EBITDA growth of 79 percent and free cash flow of $120 million. TiO(2) adjusted EBITDA margin was 31 percent. The last time a 31 percent adjusted EBITDA margin was achieved was the third quarter of 2012, when TiO(2 )pigment selling prices were 33 percent higher. This level of performance clearly reflects the benefits of our vertical integration with all our assets in full operation and the extraordinary work by our global TiO(2) team to reduce costs through the successful implementation of their Operational Excellence program.
"We also made great progress on our strategic developments", said Johnston. "We completed the sale of Alkali Chemicals for $1.325 billion. We refinanced a significant portion of our balance sheet that lowered our cost of debt, extended maturities, increased liquidity and provided additional pay-down flexibility. All funds are now assembled to complete the planned Cristal transaction. Shareholder approval was received to issue 37.58 million Class A Shares to Cristal in connection with the transaction. A secondary offering of 22.425 million of our Class A shares was successfully completed by Exxaro Resources Limited. Most importantly, our Cristal TiO(2) acquisition integration planning continues to proceed 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 be a year of strong performance and that 2018 will be a transformational one for Tronox."
Third Quarter 2017
Tronox TiO(2)
TiO(2 )segment revenue of $435 million increased 28 percent compared to $339 million in the year-ago quarter, driven primarily by higher selling prices for pigment, zircon and pig iron. Pigment sales of $317 million increased 22 percent compared to $260 million in the year-ago quarter, as sales volumes increased 1 percent and average selling prices increased 21 percent (20 percent on a local currency basis). Pigment selling prices were higher in all regions. Titanium feedstock and co-products sales of $108 million increased 69 percent from $64 million in the year-ago quarter, driven by higher selling prices for zircon, natural rutile and pig iron, as well as higher sales volumes for zircon, pig iron and CP titanium slag. Zircon sales volumes increased 10 percent and selling prices increased 19 percent. Natural rutile sales volumes were 3 percent lower while selling prices increased 5 percent. Pig iron sales volumes increased 148 percent and selling prices increased 33 percent. CP titanium slag sales occurred in the third quarter, whereas there were no sales in the prior-year quarter. Ilmenite sales volumes increased 77 percent while selling prices decreased 5 percent due to product mix.
Compared sequentially, TiO(2) segment revenue of $435 million increased 3 percent versus $421 million in the prior quarter, driven primarily by higher zircon and pig iron sales volumes and higher pigment and zircon selling prices. Pigment sales of $317 million were 4 percent higher than sales of $306 million in the prior quarter, as sales volumes were 5 percent lower, reflecting a normal seasonally lighter third quarter, while selling prices increased 9 percent (7 percent on a local currency basis). Selling prices were higher in all regions. Titanium feedstock and co-products sales of $108 million increased 9 percent from $99 million in the second quarter. Zircon sales volumes increased 23 percent, as a shipment made in the quarter moved from the second quarter, while selling prices increased 13 percent. Natural rutile sales volumes were 27 percent lower, while selling prices were level to the prior quarter. Pig iron sales volumes increased 39 percent and selling prices were 2 percent higher. Sales volumes for CP titanium slag were 33 percent lower than the second quarter, when a larger shipment was made and selling prices decreased 5 percent. Ilmenite sales volumes decreased 66 percent, also due to shipment timing, while selling prices improved 3 percent.
TiO(2 )segment adjusted EBITDA of $136 million was 79 percent higher than $76 million in the year-ago quarter, driven primarily by higher selling prices for pigment and zircon and the benefit of higher production efficiency across our integrated operations. Compared sequentially, segment adjusted EBITDA of $136 million improved by 11 percent, from $123 million in the prior quarter, driven by higher pigment selling prices, higher zircon sales volumes and selling prices, and the benefit of higher production efficiency across our integrated operations. TiO(2) segment income from operations of $75 million increased from $17 million in the year-ago quarter and $61 million in the prior quarter. TiO(2) delivered free cash flow of $120 million in the third quarter, as cash provided by operating activities was $142 million and capital expenditures were $22 million.
Corporate
Corporate loss from operations was $24 million, compared to a loss from operations of $17 million in the year-ago quarter and a loss from operations of $30 million in the prior quarter. The loss from operations in the third quarter included professional fees of $13 million related to the Cristal transaction, offset by $5 million of Alkali transactional expenses that were reclassified to discontinued operations. Corporate adjusted EBITDA of ($13) million compared to ($18) million in the year-ago quarter and ($24) million in the prior quarter. Corporate cash used in operations was $105 million and capital expenditures were $1 million. The $105 million of cash use includes $50 million related to semi-annual bond interest payments, made in the first and third quarters each year, $21 million of transaction costs related to the sale of Alkali Chemicals, and $13 million of transaction costs related to the Cristal acquisition.
Consolidated
Selling, general and administrative expenses were $55 million in the third quarter, compared to $47 million in the year-ago quarter and $63 million in the prior quarter. The selling, general and administrative expenses in the third quarter included the net $8 million of professional fees related to the Cristal and Alkali transactions described above. Interest and debt expense of $47 million compares to $46 million in the year-ago quarter and $47 million in the prior quarter. On September 30, 2017, gross consolidated debt was $3,140 million, and debt net of cash and cash equivalents was $2,082 million. Liquidity was $1,296 million, cash and cash equivalents were $1,058 million, and we had an additional $650 million of restricted cash for the planned Cristal acquisition. Capital expenditures were $23 million and depreciation, depletion and amortization expense was $45 million.
Webcast Conference Call
Tronox will conduct a conference call on Thursday, November 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: 98785994
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 Thursday, November 9, 2017 at 11:30 a.m. ET (New York), until 11:30 p.m. ET (New York), on Tuesday, November 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: 98785994
Upcoming Conferences
During the fourth quarter 2017, a member of management is scheduled to present at the following conferences:
-- Citi Basic Materials Conference, New York, November 28, 2017
-- Goldman Sachs Metals & Mining Conference, New York, November 29, 2017
Accompanying conference materials will be available at http://investor.tronox.com
About Tronox
Tronox Limited is a vertically integrated mining and inorganic chemical business. The Company mines and processes titanium ore, zircon and other minerals, and manufactures titanium dioxide pigments that add brightness and durability to paints, plastics, paper, and other everyday products. For more information, visit tronox.com.
Forward Looking Statements
Statements in this release that are not historical are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. These and other risk factors are discussed in the company's filings with the Securities and Exchange Commission (SEC), including those under the heading entitled "Risk Factors" in our Form 10-Q for the period ended June 30, 2017 and 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 because of new information or future developments.
Use of Non-U.S. GAAP Financial Information
To provide investors and others with additional information regarding Tronox Limited's operating results, we have disclosed in this press release certain non-U.S. GAAP financial measures, including EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow and Adjusted net loss attributable to Tronox. These non-U.S. GAAP financial measures are a supplement to and not a substitute for or superior to, the company's results presented in accordance with U.S. GAAP. The non-U.S. GAAP financial measures presented by the company may be different from non-U.S. GAAP financial measures presented by other companies. The non-U.S. GAAP financial measures are provided to enhance the user's overall understanding of the company's operating performance. Specifically, the company believes the non-U.S. GAAP information provides useful measures to investors regarding the company's financial performance by excluding certain costs and expenses that the company believes are not indicative of its core operating results. The presentation of these non-U.S. GAAP financial measures is not meant to be considered in isolation or as a substitute for results or guidance prepared and presented in accordance with U.S. GAAP. A reconciliation of the non-U.S. GAAP financial measures to U.S. GAAP results is included herein.
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 gain (loss)
on extinguishment of debt 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 (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,
-------------------------------- -------------------------------
2017 2016 2017 2016
---- ---- ---- ----
Net sales $435 $339 $1,234 $957
Cost of goods sold 329 291 971 877
--- --- --- ---
Gross profit 106 48 263 80
Selling, general, and administrative expenses (55) (47) (186) (135)
Restructuring income (expense) - (1) 1 (2)
--- --- --- ---
Income (loss) from operations 51 - 78 (57)
Interest and debt expense, net (47) (46) (140) (138)
Gain (loss) on extinguishment of debt (28) - (28) 4
Other income (expense), net 12 (10) 5 (22)
--- --- --- ---
Income (loss) from continuing operations before
income taxes (12) (56) (85) (213)
Income tax provision (13) (6) (10) (25)
--- --- --- ---
Net income (loss) from continuing operations (25) (62) (95) (238)
Income (loss) from discontinued operations, net
of tax (216) 23 (179) 55
Net income (loss) (241) (39) (274) (183)
Net income (loss) attributable to noncontrolling
interest 6 (2) 11 (1)
--- --- --- ---
Net income (loss) attributable to Tronox Limited $(247) $(37) $(285) $(182)
===== ==== ===== =====
Net income (loss) per share, basic and diluted:
Continuing operations $(0.26) $(0.53) $(0.89) $(2.04)
Discontinued operations $(1.81) $0.20 $(1.51) $0.47
Net income (loss) per share, basic and diluted $(2.07) $(0.33) $(2.40) $(1.57)
====== ====== ====== ======
Weighted average shares outstanding, basic and
diluted (in thousands) 119,405 116,219 118,908 116,108
======= ======= ======= =======
Other Operating Data:
---------------------
Capital
expenditures $23 $24 $63 $59
Depreciation,
depletion and
amortization
expense $45 $45 $136 $131
------------- --- --- ---- ----
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) FROM CONTINUING OPERATIONS
ATTRIBUTABLE TO TRONOX LIMITED (NON-U.S. GAAP)
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2017 2016 2017 2016
---- ---- ---- ----
Net income (loss) attributable
to Tronox Limited (U.S. GAAP) $(247) $(37) $(285) $(182)
Income (loss) from discontinued
operations, net of tax (U.S.
GAAP) (216) 23 (179) 55
Net income (loss) from
continuing operations
attributable to Tronox Limited
(U.S. GAAP) $(31) $(60) $(106) $(237)
Acquisition related matters (a) 13 - 33 -
Restructuring (income) expense
(b) - 1 (1) 2
(Gain) loss on extinguishment
of debt (c) 28 - 28 (4)
Adjusted net income (loss) from
continuing operations
attributable to Tronox Limited
(non-U.S. GAAP) (d) $10 $(59) $(46) $(239)
=== ==== ==== =====
Basic and diluted net income
(loss) per share from
continuing operations (U.S.
GAAP) $(0.26) $(0.53) $(0.89) $(2.04)
Acquisition related expense,
per share 0.11 - 0.28 -
Restructuring (income) expense,
per share - 0.02 (0.02) 0.02
(Gain) loss on extinguishment
of debt, per share 0.23 - 0.24 (0.04)
Diluted adjusted net income
(loss) from continuing
operations per share
attributable to Tronox Limited
(non-U.S. GAAP) $0.08 $(0.51) $(0.39) $(2.06)
===== ====== ====== ======
Weighted average shares
outstanding, diluted (in
thousands) 119,405 116,219 118,908 116,108
======= ======= ======= =======
(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 nine months ended September 30, 2017.
(b) Represents severance 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.
(c) Represents a $28 million loss which
includes a $22 million loss associated with the
redemption of the outstanding balance of the
Senior Notes due 2020, $1 million of unamortized
original debt issuance costs from the repayment
of the UBS Revolver, and $5 million of debt
issuance costs from the refinancing activities
associated with the term loans. During 2016, the
$4 million gain was associated with the
repurchase of $20 million face value of our
Senior Notes due 2020 and Senior Notes 2022.
These amounts were recorded in "Gain (loss) 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 September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2017 2016 2017 2016
---- ---- ---- ----
Net sales (TiO2) $435 $339 $1,234 $957
==== ==== ====== ====
TiO2 segment $75 $17 $168 $(12)
Corporate (24) (17) (90) (45)
--- --- --- ---
Income (loss) from operations 51 - 78 (57)
Interest and debt expense, net (47) (46) (140) (138)
Gain (loss) on extinguishment
of debt (28) - (28) 4
Other income (expense), net 12 (10) 5 (22)
Income (loss) from continuing
operations before income taxes (12) (56) (85) (213)
Income tax provision (13) (6) (10) (25)
--- --- --- ---
Net income (loss) from
continuing operations (25) (62) (95) (238)
Income (loss) from discontinued
operations, net of tax (216) 23 (179) 55
---- --- ---- ---
Net income (loss) (241) (39) (274) (183)
Net income (loss) attributable
to noncontrolling interest 6 (2) 11 (1)
--- --- --- ---
Net income (loss) attributable
to Tronox Limited $(247) $(37) $(285) $(182)
===== ==== ===== =====
TRONOX LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(Millions of U.S. dollars, except share and per share data)
September 30, December 31
2017 2016
---- ----
ASSETS
Current Assets
Cash and cash
equivalents $1,058 $248
Restricted cash 653 3
Accounts
receivable, net
of allowance for
doubtful accounts 309 278
Inventories, net 459 499
Prepaid and other
assets 44 28
Income taxes
receivable 1 11
Total assets of
discontinued
operations - 1,671
Total current assets 2,524 2,738
Noncurrent Assets
Property, plant
and equipment,
net 1,069 1,092
Mineral
leaseholds, net 859 877
Intangible assets,
net 203 223
Inventories, net 14 14
Other long-term
assets 22 20
Total assets $4,691 $4,964
====== ======
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $155 $136
Accrued
liabilities 131 150
Short-term debt - 150
Long-term debt
due within one
year 11 16
Income taxes
payable 2 1
Total liabilities
of discontinued
operations - 111
Total current liabilities 299 564
Noncurrent Liabilities
Long-term debt,
net 3,129 2,888
Pension and
postretirement
healthcare
benefits 100 114
Asset retirement
obligations 78 73
Long-term
deferred tax
liabilities 161 151
Other long-term
liabilities 18 21
---------------
Total liabilities 3,785 3,811
----- -----
Commitments and Contingencies
Shareholders' Equity
Tronox Limited
Class A ordinary
shares, par value
$0.01 -
68,767,566
shares issued and
68,591,094 shares
outstanding at
September 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
September 30,
2017 and December
31, 2016. - -
Capital in excess
of par value 1,542 1,524
Accumulated
deficit (321) (19)
Accumulated other
comprehensive
loss (474) (497)
Total Tronox Limited shareholders'
equity 748 1,009
Noncontrolling
interest 158 144
---------------
Total equity 906 1,153
--- -----
Total liabilities and equity $4,691 $4,964
====== ======
TRONOX LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(Millions of U.S. dollars)
Nine Months Ended September 30,
2017 2016
---- ----
Cash Flows from Operating Activities:
Net income (loss) $(274) $(183)
Income (loss) from
discontinued operations, net
of tax (179) 55
Net income (loss) from
continuing operations $(95) $(238)
Adjustments to reconcile net loss from continuing operations to net
cash provided by operating activities, continuing operations:
Depreciation, depletion and
amortization 136 131
Deferred income taxes 8 (5)
Share-based compensation
expense 26 18
Amortization of deferred debt
issuance costs and discount
on debt 9 8
Pension and postretirement
healthcare benefit expense 2 -
(Gain) loss on extinguishment
of debt 28 (4)
Other, net 22 35
Contributions to employee
pension and postretirement
plans (18) (15)
Changes in assets and liabilities:
(Increase) decrease in
accounts receivable, net (29) (3)
(Increase) decrease in
inventories, net 48 94
(Increase) decrease in
prepaid and other assets (16) (3)
Increase (decrease) in
accounts payable and accrued
liabilities (27) (33)
Increase (decrease) in income
taxes payable - 28
Cash provided by operating
activities, continuing
operations 94 13
--- ---
Cash Flows from Investing Activities:
Capital expenditures (63) (59)
Debt proceeds restricted for
Cristal acquisition (650) -
Proceeds from the sale of
business 1,325 -
Proceeds from the sale of
assets - 1
Cash provided by (used in)
investing activities,
continuing operations 612 (58)
--- ---
Cash Flows from Financing Activities:
Repayments of long-term debt (2,342) (27)
Repayments of short-term debt (150) -
Proceeds from long-term debt 2,589 -
Debt issuance costs (36) -
Call premium paid (14) -
Proceeds from options and
warrants 1 -
Dividends paid (17) (40)
Restricted stock and
performance-based shares
settled in cash for taxes (11) (1)
Cash provided by (used in)
financing activities,
continuing operations 20 (68)
--- ---
Discontinued Operations:
Cash provided by operating
activities 107 112
Cash used in investing
activities (25) (29)
Net cash flows provided by
discontinued operations 82 83
--- ---
Effects of exchange rate
changes on cash and cash
equivalents 2 3
--- ---
Net increase (decrease) in
cash and cash equivalents 810 (27)
Cash and cash equivalents at
beginning of period 248 229
--- ---
Cash and cash equivalents at
end of period, continuing
operations $1,058 $202
====== ====
TRONOX LIMITED
CONDENSED STATEMENT OF FREE CASH FLOWS (NON-U.S. GAAP)
(UNAUDITED)
(Millions of U.S. dollars)
Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017
------------------------------------- ------------------------------------
TiO2 Corporate Consolidated TiO2 Corporate Consolidated
---- --------- ------------ ---- --------- ------------
Income (loss) from
operations (U.S.
GAAP) $75 $(24) $51 $168 $(90) $78
Depreciation,
depletion and
amortization
expense 44 1 45 132 4 136
Other 17 10 27 44 27 71
--- --- --- --- --- ---
Adjusted EBITDA
(non-U.S. GAAP) $136 $(13) $123 $344 $(59) $285
==== ==== ==== ==== ==== ====
Adjusted EBITDA
(non-U.S. GAAP) $136 $(13) $123 $344 $(59) $285
Interest paid, net
of capitalized
interest and
interest income - (73) (73) - (157) (157)
Income tax provision - (13) (13) - (10) (10)
Transaction costs - (13) (13) - (33) (33)
Contributions to
employee pension
and postretirement
plans (9) - (9) (18) - (18)
Deferred income
taxes - 6 6 - 8 8
Other 3 40 43 3 40 43
Changes in assets and liabilities
(Increase) decrease
in accounts
receivable, net 6 - 6 (29) - (29)
(Increase) decrease
in inventories, net 11 - 11 48 - 48
(Increase) decrease
in prepaid and
other assets (2) (4) (6) (12) (4) (16)
Increase (decrease)
in accounts payable
and accrued
liabilities (3) (34) (37) 3 (30) (27)
Increase (decrease)
in income taxes
payable - (1) (1) - - -
Subtotal 12 (39) (27) 10 (34) (24)
--- --- --- --- --- ---
Cash provided by
(used in) operating
activities,
continuing
operations 142 (105) 37 339 (245) 94
Capital expenditures (22) (1) (23) (61) (2) (63)
--- --- --- --- --- ---
Free cash flow (non-
U.S. GAAP) $120 $(106) $14 $278 $(247) $31
==== ===== === ==== ===== ===
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 September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2017 2016 2017 2016
---- ---- ---- ----
Net income (loss) (U.S. GAAP) $(241) $(39) $(274) $(183)
Income (loss) from discontinued operations, net of tax (U.S. GAAP) (216) 23 (179) 55
Net income (loss) from continuing operations (U.S. GAAP) (25) (62) (95) (238)
Interest and debt expense, net 47 46 140 138
Interest income (3) - (5) (2)
Income tax provision 13 6 10 25
Depreciation, depletion and amortization expense 45 45 136 131
---
EBITDA (non-U.S. GAAP) 77 35 186 54
Share-based compensation (a) 5 8 26 18
Transaction costs (b) 13 - 33 -
Restructuring (income) expense (c) - 1 (1) 2
(Gain) loss on extinguishment of debt (d) 28 - 28 (4)
Foreign currency remeasurement (e) (5) 14 1 32
Other items (f) 5 - 12 4
Adjusted EBITDA (non-U.S. GAAP) (g) $123 $58 $285 $106
==== === ==== ====
(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) Represents a
$28 million
loss which
includes a $22
million loss
associated
with the
redemption of
the
outstanding
balance of the
Senior Notes
due 2020, $1
million of
unamortized
original debt
issuance costs
from the
repayment of
the UBS
Revolver, and
$5 million of
debt issuance
costs from the
refinancing
activities
associated
with the term
loans. During
2016, the $4
million gain
was associated
with the
repurchase of
$20 million
face value of
our Senior
Notes due 2020
and Senior
Notes 2022.
These amounts
were recorded
in "Gain
(loss) on
extinguishment
of debt" in
the unaudited
Condensed
Consolidated
Statements of
Operations.
(e) Represents
foreign
currency
remeasurement
which is
included in
"Other income
(expense),
net" in the
unaudited
Condensed
Consolidated
Statements of
Operations.
(f) Includes
noncash
pension and
postretirement
costs,
severance
expense,
accretion
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 September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
2017 2016 2017 2016
---- ---- ---- ----
TiO2 segment $75 $17 $168 $(12)
Corporate (24) (17) (90) (45)
Income (loss) from
operations (U.S.
GAAP) 51 - 78 (57)
TiO2 segment 44 44 132 127
Corporate 1 1 4 4
Depreciation,
depletion and
amortization expense 45 45 136 131
TiO2 segment 17 15 44 41
Corporate 10 (2) 27 (9)
Other 27 13 71 32
TiO2 segment 136 76 344 156
Corporate (13) (18) (59) (50)
Adjusted EBITDA (non-
U.S. GAAP) $123 $58 $285 $106
==== === ==== ====
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 September 30, 2016 Nine Months Ended September 30, 2016
------------------------------------- ------------------------------------
As Adjustment Revised As Adjustment Revised
Reported (1) Reported (1)
----------- -----------
Net sales $339 $ - $339 $957 $ - $957
Cost of goods sold 290 1 291 877 - 877
Gross profit 49 (1) 48 80 - 80
Selling, general and administrative
expenses (47) - (47) (131) (4) (135)
Income (loss) from operations 1 (1) - (53) (4) (57)
Other income (expense), net (13) 3 (10) (22) - (22)
Income (loss) from continuing
operations before income taxes (58) 2 (56) (209) (4) (213)
Net income (loss) from continuing
operations (64) 2 (62) (235) (3) (238)
Income (loss) from discontinued
operations, net of tax 22 1 23 53 2 55
Net income (loss) attributable to
Tronox Limited (40) 3 (37) (181) (1) (182)
Net income (loss) per share from
continuing operations, basic and
diluted (0.54) 0.01 (0.53) (2.02) (0.02) (2.04)
Net income (loss) per share from
discontinued operations, basic and
diluted 0.19 0.01 0.20 0.46 0.01 0.47
Weighted average shares
outstanding, basic and diluted (in
thousands) 116,219 116,219 116,219 116,108 116,108 116,108
Unaudited Condensed Consolidated Balance Sheet
December 31, 2016
-----------------
As Adjustment Revised
Reported (1)
-----------
Current assets of continuing operations $1,067 $ - $1,067
Total assets of discontinued operations 1,668 3 1,671
Total current assets 2,735 3 2,738
Total assets 4,961 3 4,964
Accrued liabilities 138 11 149
Current liabilities of continuing operations 443 10 453
Total liabilities of discontinued operations 110 1 111
Total current liabilities 553 11 564
Total liabilities 3,800 11 3,811
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 4,961 3 4,964
(1)Amounts reflect the results
of Alkali as discontinued
operations.
Unaudited Condensed Consolidated
Statement of Cash Flows
There was no net impact to
operating, investing and
financing cash flows from the
revisions for continuing
operations for the nine months
ended September 30, 2016.
View original content:http://www.prnewswire.com/news-releases/tronox-reports-third-quarter-2017-financial-results-300552451.html
SOURCE Tronox Limited
