England and Wales
|
001-35573
|
98-1467236
|
(State or Other Jurisdiction of Incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
263 Tresser Boulevard, Suite 1100
|
25 Bury Street, 3rd Floor
|
|
Stamford, Connecticut 06901
|
London SW1Y 2AL, England
|
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
Trading Symbol(s)
|
Name of exchange on which registered
|
Ordinary shares, par value $0.01 per share
|
TROX
|
NYSE
|
Item 2.02. |
Results of Operations and Financial Condition.
|
Exhibit
No.
|
Description
|
|
Press Release, dated August 6, 2019 reporting Tronox Holdings plc’s financial results for the second quarter
2019.
|
TRONOX HOLDINGS PLC
|
|||
Date: August 7, 2019
|
By:
|
/s/ Jeffrey N. Neuman
|
|
Name: Jeffrey N. Neuman
|
|||
Title: Senior Vice President, General Counsel and Secretary
|
• |
Revenue of $791 million
|
• |
Net loss from continuing operations of ($55) million including purchase accounting and transaction-related closing costs
|
• |
Adjusted EBITDA of $195 million (Non-GAAP)
|
• |
GAAP diluted EPS from continuing operations of ($0.41)
|
• |
Adjusted diluted EPS of $0.26 (Non-GAAP)
|
• |
Revenue of $827 million up 15 percent
|
• |
TiO2 sales volumes up 17 percent and selling prices level on local currency basis
|
• |
Zircon sales volumes up 8 percent and selling prices 1 percent lower due to customer and product mix
|
• |
Net income from continuing operations of $42 million
|
• |
Adjusted EBITDA of $200 million up 42 percent reflecting sales volume growth, realized synergies and margin benefits from shift to fully integrated operations (Non-GAAP)
|
• |
Returned approximately $294 million to shareholders from start of second quarter 2019 to August 6, 2019, through repurchase of approximately 21.5 million shares and dividends
|
• |
Maintaining outlook for full year 2019 within previously provided ranges and narrowing guidance on a reported basis to:
|
• |
Lower half of previously provided range for Revenue of $2,830-2,980 million
|
• |
Lower half of previously provided range for Adjusted EBITDA of $635-740 million (Non-GAAP)
|
• |
High end of previously provided range for Adjusted diluted EPS of ($0.17)-0.43 (Non-GAAP)
|
• |
Within previously provided range for Free Cash Flow of $130-160 million (Non-GAAP)
|
(Millions of dollars)
|
Q2 2019
|
Q2 2018
|
Y-o-Y % ∆
|
|
Q1 2019
|
Q-o-Q % ∆
|
|
|||||||||||||
Revenue
|
$
|
791
|
$
|
492
|
61
|
%
|
$ |
390
|
103
|
%
|
||||||||||
TiO2
|
625
|
346
|
81
|
%
|
277
|
126
|
%
|
|||||||||||||
Zircon
|
88
|
78
|
13
|
%
|
64
|
38
|
%
|
|||||||||||||
Feedstock and other products
|
78
|
53
|
47
|
%
|
49
|
59
|
%
|
|||||||||||||
Electrolytic
|
0
|
15
|
(100
|
%)
|
0
|
|
NM | |||||||||||||
Net (Loss) Income from Continuing Ops
|
$
|
(55
|
)
|
$
|
50
|
|
NM | $ |
(30
|
)
|
|
NM | ||||||||
Adjusted EBITDA
|
$
|
195
|
$
|
148
|
32
|
%
|
$ |
80
|
144
|
%
|
||||||||||
Adjusted EBITDA Margin %
|
|
25 | % | 30 | % | 21 | % | |||||||||||||
Y-o-Y % ∆ | Q-o-Q % ∆ | |||||||||||||||||||
Volume |
Price |
Volume |
Price |
|||||||||||||||||
TiO2 | 90 |
% | (5 |
%) | 126 |
% |
(1
|
%) | ||||||||||||
Local Currency Basis
|
- |
(4 |
%) | - |
(1 |
%) | ||||||||||||||
Zircon | (2 | %) | 15 |
% | 39 |
% | (1 |
%) |
(Millions of dollars)
|
Q2 2019
|
Q2 2018
|
Y-o-Y % ∆
|
|
Q1 2019
|
Q-o-Q % ∆
|
|
|||||||||||||
Revenue
|
$
|
827
|
$
|
903
|
(8
|
%)
|
$
|
720
|
15
|
%
|
||||||||||
TiO2
|
657
|
703
|
(7
|
%)
|
570
|
15
|
%
|
|||||||||||||
Zircon
|
89
|
108
|
(18
|
%)
|
83
|
7
|
%
|
|||||||||||||
Feedstock and other products
|
81
|
77
|
5
|
%
|
68
|
19
|
%
|
|||||||||||||
Electrolytic
|
0
|
15
|
(100
|
%)
|
0
|
|
NM | |||||||||||||
Net (Loss) Income from Continuing Ops
|
$
|
42
|
$
|
120
|
65
|
%
|
$
|
(37
|
)
|
|
NM | |||||||||
Adjusted EBITDA
|
$
|
200
|
$
|
257
|
(22
|
%)
|
$
|
141
|
42
|
%
|
||||||||||
Adjusted EBITDA Margin %
|
24 | % | 28 | % | 20 | % | ||||||||||||||
Y-o-Y % ∆ | Q-o-Q % ∆ | |||||||||||||||||||
Volume |
Price |
Volume |
Price |
|||||||||||||||||
TiO2 | 3 |
% | (8 |
%) |
17 |
% | (1 |
%) | ||||||||||||
Local Currency Basis
|
- |
(6 |
%) | - |
0 | % | ||||||||||||||
Zircon | (27 | %) | 12 |
% | 8 |
% | (1 | %) |
• |
Lower half of previously provided range for Revenue of $2,830-2,980 million
|
• |
Lower half of previously provided range for Adjusted EBITDA of $635-740 million (Non-GAAP)
|
• |
High end of previously provided range for Adjusted diluted EPS of ($0.17)-0.43 (Non-GAAP)
|
• |
Within previously provided range for Free Cash Flow of $130-160 million (Non-GAAP)
|
• |
Revenue of $791 million, including $353 million of revenue related to the acquired operations of Cristal, increased 61 percent from $492 million; excluding $15 million of revenue in the year-ago quarter from the Electrolytic business
sold in September 2018, revenue increased 66 percent
|
• |
TiO2 pigment sales of $625 million increased 81 percent compared to $346 million; sales volumes were 90 percent higher; selling prices were 4 percent lower on a local currency basis and 5 percent lower on a U.S. dollar
basis, as translation of the Euro was a $5 million headwind
|
• |
Zircon sales of $88 million increased 13 percent from $78 million, as 15 percent higher selling prices were partially offset by 2 percent lower sales volumes
|
• |
Feedstock and other products sales of $78 million increased 47 percent from $53 million; higher ilmenite sales were partially offset by lower CP slag and pig iron sales
|
• |
Adjusted EBITDA of $195 million increased 32 percent compared to $148 million, driven primarily by incremental Cristal adjusted EBITDA of $61 million and favorable foreign exchange on costs of $23 million; partially offsetting the
increase were lower sales volumes of $14 million, unfavorable foreign exchange on revenue of $5 million and higher production costs of $18 million, primarily for direct materials and utilities
|
• |
Selling, general and administrative expenses (“SG&A”) were $103 million compared to $79 million; SG&A costs from the acquired Cristal business accounted for $22 million of the increase; higher employee-related costs and
integration costs of $9 million were partially offset by $6 million of lower professional fees
|
• |
Interest expense of $54 million compared to $48 million primarily due to higher average interest rates related to borrowings in South Africa
|
• |
Revenue of $827 million was 8 percent lower than $903 million; excluding revenue of $15 million in the year-ago quarter from the Electrolytic business sold in September 2018, revenue was 7 percent lower
|
• |
TiO2 pigment sales of $657 million were 7 percent lower compared to $703 million; sales volumes increased 3 percent; selling prices were 6 percent lower on a local currency basis and 8 percent lower on a U.S. dollar basis,
as translation of the Euro was a $16 million headwind
|
• |
Zircon sales of $89 million decreased 18 percent from $108 million, as 12 percent higher selling prices were more than offset by 27 percent lower sales volumes due to shipment timing and lower year-on-year sales and production volumes
at legacy Cristal mining operations in Australia
|
• |
Feedstock and other products sales of $81 million compared to $77 million; higher CP slag sales volumes were partially offset by lower ilmenite sales as we are not actively selling ilmenite in the
market due to our expanded internal requirements following the closing of the Cristal acquisition
|
• |
Adjusted EBITDA of $200 million was 22 percent lower than $257 million, driven by lower TiO2 selling prices, higher external feedstock costs in legacy Cristal operations and lower zircon sales volumes resulting from lower
production volumes at legacy Cristal mining operations in Australia
|
• |
Selling, general and administrative expenses were $85 million compared to $60 million primarily due to higher employee-related costs, R&D expenses and integration costs
|
• |
Interest expense of $54 million compared to $53 million in the year-ago quarter due to higher average interest rates related to borrowings in South Africa
|
• |
Revenue of $791 million, including $353 million of revenue related to the acquired operations of Cristal, increased 103 percent compared to $390 million
|
• |
TiO2 pigment sales of $625 million increased 126 percent compared to $277 million; sales volumes up 126 percent; selling prices were 1 percent lower on a local currency basis and on a U.S. dollar basis
|
• |
Zircon sales of $88 million increased 38 percent from $64 million, driven by a 39 percent increase in sales volumes; selling prices were 1 percent lower
|
• |
Feedstock and other products sales of $78 million increased from $49 million due to higher sales volumes from the acquired Cristal business
|
• |
Adjusted EBITDA of $195 million increased 144 percent compared to $80 million, driven primarily by incremental Cristal adjusted EBITDA of $61 million, $28 million of deferred margin benefits reflecting the shift to fully integrated
operations, and higher TiO2, zircon and CP slag sales volumes that, combined, contributed $16 million to the increase
|
• |
Selling, general and administrative expenses were $103 million compared to $67 million; SG&A costs from the acquired Cristal business of $22 million and transaction and integration costs related to the acquisition of $15 million
accounted for the increase
|
• |
Interest expense of $54 million compared to $49 million in the prior quarter primarily due to higher average interest rates related to borrowings in South Africa
|
• |
Revenue of $827 million increased 15 percent from $720 million
|
• |
TiO2 pigment sales of $657 million were 15 percent higher compared to $570 million; sales volumes increased 17 percent; selling prices were level to the prior quarter and 1 percent lower on a U.S. dollar basis
|
• |
Zircon sales of $89 million increased 7 percent from $83 million driven by 8 percent higher sales volumes; selling prices were 1 percent lower
|
• |
Feedstock and other products sales of $81 million increased from $68 million; higher CP slag sales volumes were more than offset by lower ilmenite sales as we are not actively selling ilmenite in the market due to our expanded internal
requirements following the closing of the Cristal acquisition
|
• |
Adjusted EBITDA of $200 million increased 42 percent from $141 million, driven primarily by higher TiO2, zircon and feedstock and co-products sales volumes that, combined, contributed $34 million, deferred margin benefits of
$28 million reflecting the shift to fully integrated operations and realized synergies of $11 million
|
• |
Selling, general and administrative expenses were $85 million compared to $93 million, primarily due to lower employee benefit and professional service expenses
|
• |
Interest expense of $54 million compared to $55 million due to lower average debt balances
|
• |
On June 30, 2019, debt was $3,194 million and debt, net of cash and cash equivalents, including $9 million of restricted cash, was $2,788 million
|
• |
As of June 30, 2019, liquidity was $798 million comprised of cash and cash equivalents of $397 million and $401 million available under revolving credit agreements
|
• |
In the second quarter 2019, capital expenditures were $56 million and depreciation, depletion and amortization expense was $84 million
|
• |
Tronox returned approximately $294 million to shareholders from the start of the second quarter 2019 to August 6, 2019, through the repurchase of approximately 21.5 million shares and
dividends
|
• |
On May 9, 2019, we repurchased 14 million Tronox shares from Exxaro Resources for an aggregate purchase price of approximately $200 million or $14.3185 per share. The share price was based upon a 5 percent discount to the 10-day
volume weighted average price as of the day that Exxaro exercised their sale notice to the company
|
• |
On June 3, 2019, the company’s Board of Directors authorized the repurchase of up to $100 million of the company’s stock
|
• |
During the second quarter 2019, we purchased 4,957,098 shares of common stock under the stock repurchase program at an average price of $11.26 per share and at a cost of approximately $56 million
|
• |
As of August 6, 2019, we had purchased a total of 7,453,391 shares under the authorization at an average price of $11.59 per share and at a cost of approximately $86 million
|
• |
Credit Suisse Basic Materials Conference, New York, September 10, 2019
|
• |
Deutsche Bank Leveraged Finance Conference, Phoenix, September 24-25, 2019
|
• |
Reflect the ongoing business of Tronox Holdings plc 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 the operating results and future prospects of Tronox Holdings plc;
|
• |
Provide an additional view of the operating performance of the company by adding interest expense & income, income taxes, depreciation, depletion and amortization to the net income. Further adjustments due to gain (loss) on
extinguishment of debt, stock-based compensation charges, transaction costs associated with acquisitions, integration costs, purchase accounting adjustments, foreign currency re-measurements, impairments, settlements of pension and
postretirement plans, impacts of tax settlements on non-income related taxes, severance expense, and noncash pension and postretirement expense and accretion expense are made to exclude items that are either non-cash or unusual in nature;
|
• |
Adjusted EBITDA is one of the primary measures management uses for planning and budgeting processes and to monitor and evaluate financial and operating results. Adjusted EBITDA is not a recognized term under U.S. GAAP and does not
purport to be an alternative to measures of our financial performance as determined in accordance with U.S. GAAP, such as net income (loss). Because other companies may calculate EBITDA and Adjusted EBITDA differently than Tronox, EBITDA
may not be, and Adjusted EBITDA as presented in this release is not, comparable to similarly titled measures reported by other companies, and
|
• |
We believe that the non-U.S. GAAP financial measure “Adjusted net income (loss) attributable to Tronox Holdings plc” 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.
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Net sales
|
$
|
791
|
$
|
492
|
$
|
1,181
|
$
|
934
|
||||||||
Cost of goods sold
|
672
|
348
|
979
|
675
|
||||||||||||
Contract loss
|
19
|
-
|
19
|
-
|
||||||||||||
Gross profit
|
100
|
144
|
183
|
259
|
||||||||||||
Selling, general, and administrative expenses
|
103
|
79
|
170
|
155
|
||||||||||||
Restructuring
|
10
|
-
|
10
|
-
|
||||||||||||
Impairment loss
|
-
|
-
|
-
|
25
|
||||||||||||
Income from operations
|
(13
|
)
|
65
|
3
|
79
|
|||||||||||
Interest expense
|
(54
|
)
|
(48
|
)
|
(103
|
)
|
(97
|
)
|
||||||||
Interest income
|
3
|
7
|
12
|
15
|
||||||||||||
Loss on extinguishment of debt
|
-
|
(30
|
)
|
(2
|
)
|
(30
|
)
|
|||||||||
Other income (expense), net
|
5
|
29
|
3
|
20
|
||||||||||||
(Loss) income from continuing operations before income taxes
|
(59
|
)
|
23
|
(87
|
)
|
(13
|
)
|
|||||||||
Income tax benefit
|
4
|
27
|
2
|
22
|
||||||||||||
Net (loss) income from continuing operations
|
(55
|
)
|
50
|
(85
|
)
|
9
|
||||||||||
Net loss from discontinued operations, net of tax
|
(1
|
)
|
-
|
(1
|
)
|
-
|
||||||||||
Net (loss) income
|
(56
|
)
|
50
|
(86
|
)
|
9
|
||||||||||
Net income attributable to noncontrolling interest
|
6
|
14
|
10
|
17
|
||||||||||||
Net (loss) income attributable to Tronox Holdings plc
|
$
|
(62
|
)
|
$
|
36
|
$
|
(96
|
)
|
$
|
(8
|
)
|
|||||
Net (loss) income per share, basic:
|
||||||||||||||||
Continuing operations
|
$
|
(0.41
|
)
|
$
|
0.30
|
$
|
(0.69
|
)
|
$
|
(0.07
|
)
|
|||||
Discontinued operations
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Net (loss) income per share, basic
|
$
|
(0.41
|
)
|
$
|
0.30
|
$
|
(0.69
|
)
|
$
|
(0.07
|
)
|
|||||
Net (loss) income per share, diluted:
|
||||||||||||||||
Continuing operations
|
$
|
(0.41
|
)
|
$
|
0.29
|
$
|
(0.69
|
)
|
$
|
(0.07
|
)
|
|||||
Discontinued operations
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||
Net (loss) income per share, diluted:
|
$
|
(0.41
|
)
|
$
|
0.29
|
$
|
(0.69
|
)
|
$
|
(0.07
|
)
|
|||||
Weighted average shares outstanding, basic (in thousands)
|
150,686
|
123,063
|
137,569
|
122,699
|
||||||||||||
Weighted average shares outstanding, diluted (in thousands)
|
150,686
|
126,716
|
137,569
|
122,699
|
||||||||||||
Other Operating Data:
|
||||||||||||||||
Capital expenditures
|
$
|
56
|
$
|
27
|
$
|
81
|
$
|
55
|
||||||||
Depreciation, depletion and amortization expense
|
$
|
84
|
$
|
49
|
$
|
131
|
$
|
97
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Net (loss) income attributable to Tronox Holdings plc (U.S. GAAP)
|
$
|
(62
|
)
|
$
|
36
|
$
|
(96
|
)
|
$
|
(8
|
)
|
|||||
Net loss from discontinued operations, net of tax (U.S. GAAP)
|
(1
|
)
|
-
|
(1
|
)
|
-
|
||||||||||
Net (loss) income from continuing operations attributable to Tronox Limited (U.S. GAAP)
|
$
|
(61
|
)
|
$
|
36
|
$
|
(95
|
)
|
$
|
(8
|
)
|
|||||
Inventory step-up (a)
|
$
|
50
|
$
|
-
|
$
|
50
|
$
|
-
|
||||||||
Impairment loss (b)
|
-
|
-
|
-
|
25
|
||||||||||||
Contract loss (c)
|
14
|
14
|
||||||||||||||
Transaction costs (d)
|
21
|
27
|
29
|
47
|
||||||||||||
Restructuring (e)
|
10
|
-
|
10
|
-
|
||||||||||||
Integration costs (f)
|
4
|
4
|
||||||||||||||
Tax valuation allowance reversal (g)
|
-
|
(48
|
)
|
-
|
(48
|
)
|
||||||||||
Loss on extinguishment of debt (h)
|
-
|
30
|
2
|
30
|
||||||||||||
Share-based compensation modification (i)
|
-
|
(6
|
)
|
-
|
(6
|
)
|
||||||||||
Charge for potential capital gains tax payment to Exxaro (j)
|
1
|
-
|
2
|
-
|
||||||||||||
Adjusted net (loss) income attributable to Tronox Holdings plc (non-U.S. GAAP) (1)
|
$
|
39
|
$
|
39
|
$
|
16
|
$
|
40
|
||||||||
Diluted net income (loss) per share from continuing operations (U.S. GAAP)
|
$
|
(0.41
|
)
|
$
|
0.29
|
$
|
(0.69
|
)
|
$
|
(0.07
|
)
|
|||||
Inventory step-up, per share
|
0.33
|
-
|
0.36
|
-
|
||||||||||||
Impairment loss, per share
|
-
|
-
|
-
|
0.20
|
||||||||||||
Contract loss, per share
|
0.09
|
-
|
0.10
|
-
|
||||||||||||
Transaction costs, per share
|
0.14
|
0.21
|
0.21
|
0.38
|
||||||||||||
Restructuring, per share
|
0.07
|
-
|
0.07
|
-
|
||||||||||||
Integration costs, per share
|
0.03
|
-
|
0.03
|
-
|
||||||||||||
Tax valuation allowance reversal, per share
|
-
|
(0.38
|
)
|
-
|
(0.38
|
)
|
||||||||||
Loss on extinguishment of debt, per share
|
-
|
0.24
|
0.02
|
0.24
|
||||||||||||
Share-based compensation modification, per share
|
-
|
(0.05
|
)
|
-
|
(0.05
|
)
|
||||||||||
Charge for potential capital gains tax payment to Exxaro, per share
|
0.01
|
-
|
0.02
|
-
|
||||||||||||
Diluted adjusted net (loss) income per share attributable to Tronox Holdings plc (non-U.S. GAAP)
|
$
|
0.26
|
$
|
0.31
|
$
|
0.12
|
$
|
0.32
|
||||||||
Weighted average shares outstanding, diluted (in thousands)
|
151,538
|
126,716
|
138,915
|
126,583
|
June 30,
2019
|
December 31,
2018
|
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$
|
397
|
$
|
1,034
|
||||
Restricted cash
|
9
|
662
|
||||||
Accounts receivable, net of allowance for doubtful accounts
|
599
|
317
|
||||||
Inventories, net
|
1,097
|
479
|
||||||
Prepaid and other assets
|
156
|
50
|
||||||
Income taxes receivable
|
4
|
2
|
||||||
Total current assets
|
2,262
|
2,544
|
||||||
Noncurrent Assets
|
||||||||
Property, plant and equipment, net
|
1,635
|
1,004
|
||||||
Mineral leaseholds, net
|
834
|
796
|
||||||
Intangible assets, net
|
231
|
176
|
||||||
Goodwill
|
68
|
-
|
||||||
Lease right of use assets, net
|
93
|
-
|
||||||
Deferred tax assets
|
123
|
37
|
||||||
Other long-term assets
|
170
|
85
|
||||||
Total assets
|
$
|
5,416
|
$
|
4,642
|
||||
LIABILITIES AND EQUITY
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$
|
297
|
$
|
133
|
||||
Accrued liabilities
|
330
|
140
|
||||||
Short-term lease liabilities
|
30
|
-
|
||||||
Long-term debt due within one year
|
58
|
22
|
||||||
Income taxes payable
|
3
|
5
|
||||||
Total current liabilities
|
718
|
300
|
||||||
Noncurrent Liabilities
|
||||||||
Long-term debt, net
|
3,136
|
3,139
|
||||||
Pension and postretirement healthcare benefits
|
146
|
93
|
||||||
Asset retirement obligations
|
163
|
68
|
||||||
Environmental Liabilities
|
36
|
1
|
||||||
Long-term lease liabilities
|
59
|
-
|
||||||
Long-term deferred tax liabilities
|
175
|
163
|
||||||
Other long-term liabilities
|
54 |
16
|
||||||
Total liabilities
|
4,487
|
3,780
|
||||||
Commitments and Contingencies
|
||||||||
Shareholders’ Equity
|
||||||||
Tronox Holdings plc ordinary shares, par value $0.01 — 144,377,289 shares issued and outstanding at June 30, 2019 and 123,015,301 shares issued and 122,933,845 shares outstanding at December
31, 2018
|
1
|
1
|
||||||
Capital in excess of par value
|
1,860
|
1,579
|
||||||
Accumulated deficit
|
(466
|
)
|
(357
|
)
|
||||
Accumulated other comprehensive loss
|
(616
|
)
|
(540
|
)
|
||||
Total Tronox Holdings plc shareholders’ equity
|
779
|
683
|
||||||
Noncontrolling interest
|
150
|
179
|
||||||
Total equity
|
929
|
862
|
||||||
Total liabilities and equity
|
$
|
5,416
|
$
|
4,642
|
Six Months Ended June 30,
|
||||||||
2019
|
2018
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net (loss) income
|
$
|
(86
|
)
|
$
|
9
|
|||
Net loss from discontinued operations, net of tax
|
(1
|
)
|
-
|
|||||
Net (loss) income from continuing operations
|
$
|
(85
|
)
|
$
|
9
|
|||
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities, continuing operations:
|
||||||||
Depreciation, depletion and amortization
|
131
|
97
|
||||||
Deferred income taxes
|
(13 |
) |
(30
|
)
|
||||
Share-based compensation expense
|
15
|
9
|
||||||
Amortization of deferred debt issuance costs and discount on debt
|
4
|
7
|
||||||
Contract loss
|
19
|
|
||||||
Impairment loss
|
-
|
25
|
||||||
Acquired inventory step up recognized in earnings
|
55
|
-
|
||||||
Loss on extinguishment of debt
|
2
|
30
|
||||||
Other non-cash affecting net loss
|
17
|
(3
|
)
|
|||||
Changes in assets and liabilities:
|
||||||||
Increase in accounts receivable, net
|
(43
|
)
|
(33
|
)
|
||||
Decrease (increase) in inventories, net
|
31
|
(14
|
)
|
|||||
Increase in prepaid and other assets
|
(8
|
)
|
(27
|
)
|
||||
Increase (decrease) in accounts payable and accrued liabilities
|
32
|
(36
|
)
|
|||||
Net changes in income tax payables and receivables
|
(18
|
)
|
6
|
|||||
Changes in other non-current assets and liabilities
|
(16
|
)
|
(9
|
)
|
||||
Cash provided by operating activities- continuing operations
|
133
|
31
|
||||||
Cash Flows from Investing Activities:
|
||||||||
Capital expenditures
|
(81
|
)
|
(55
|
)
|
||||
Cristal Acquisition
|
(1,603
|
)
|
-
|
|||||
Proceeds from sale of Ashtabula
|
707
|
-
|
||||||
Insurance proceeds
|
10
|
-
|
||||||
Loans
|
(25
|
)
|
(14
|
)
|
||||
Proceeds from sale of assets
|
1
|
-
|
||||||
Cash used in investing activities-continuing operations
|
(991
|
)
|
(69
|
)
|
||||
Cash Flows from Financing Activities:
|
||||||||
Repayments of long-term debt
|
(215
|
)
|
(595
|
)
|
||||
Proceeds from short-term debt
|
-
|
-
|
||||||
Proceeds from long-term debt
|
222
|
615
|
||||||
Repurchase of common stock
|
(252
|
)
|
-
|
|||||
Acquisition of noncontrolling interest
|
(148
|
)
|
-
|
|||||
Call premium paid
|
-
|
(22
|
)
|
|||||
Debt issuance costs
|
(4
|
)
|
(10
|
)
|
||||
Proceeds from the exercise of options and warrants
|
-
|
6
|
||||||
Dividends paid
|
(14
|
)
|
(12
|
)
|
||||
Restricted stock and performance-based shares settled in cash for withholding taxes
|
(6
|
)
|
(6
|
)
|
||||
Cash used in financing activities-continuing operations
|
(417
|
)
|
(24
|
)
|
||||
Discontinued Operations:
|
||||||||
Cash used in operating activities
|
(15
|
)
|
-
|
|||||
Cash used in investing activities
|
(1
|
)
|
-
|
|||||
Net cash flows used by discontinued operations
|
(16
|
)
|
-
|
|||||
Effects of exchange rate changes on cash, cash equivalents and restricted cash
|
1
|
(15
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
(1,290
|
)
|
(77
|
)
|
||||
Cash, cash equivalents and restricted cash at beginning of period
|
1,696
|
1,769
|
||||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
406
|
$
|
1,692
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Net income (loss) (U.S. GAAP)
|
$
|
(56
|
)
|
$
|
50
|
$
|
(86
|
)
|
$
|
9
|
||||||
Income from discontinued operations, net of tax (see Note 2) (U.S. GAAP)
|
(1
|
)
|
-
|
(1
|
)
|
-
|
||||||||||
Net income (loss) from continuing operations (U.S. GAAP)
|
$
|
(55
|
)
|
$
|
50
|
$
|
(85
|
)
|
$
|
9
|
||||||
Interest expense
|
54
|
48
|
103
|
97
|
||||||||||||
Interest income
|
(3
|
)
|
(7
|
)
|
(12
|
)
|
(15
|
)
|
||||||||
Income tax benefit
|
(4
|
)
|
(27
|
)
|
(2
|
)
|
(22
|
)
|
||||||||
Depreciation, depletion and amortization expense
|
84
|
49
|
131
|
97
|
||||||||||||
EBITDA (non-U.S. GAAP)
|
76
|
113
|
135
|
166
|
||||||||||||
Inventory step-up (a)
|
55
|
55
|
||||||||||||||
Impairment loss (b)
|
-
|
-
|
-
|
25
|
||||||||||||
Contract Loss (c)
|
19
|
-
|
19
|
-
|
||||||||||||
Share based compensation (d)
|
7
|
2
|
15
|
9
|
||||||||||||
Transaction costs (e)
|
21
|
27
|
29
|
47
|
||||||||||||
Restructuring (f)
|
10
|
-
|
10
|
-
|
||||||||||||
Integration costs (g)
|
4
|
-
|
4
|
-
|
||||||||||||
Loss on extinguishment of debt (h)
|
-
|
30
|
2
|
30
|
||||||||||||
Foreign currency remeasurement (i)
|
(3
|
)
|
(28
|
)
|
(4
|
)
|
(18
|
)
|
||||||||
Other items (j)
|
6
|
4
|
10
|
6
|
||||||||||||
Adjusted EBITDA (non-U.S. GAAP)
|
$
|
195
|
$
|
148
|
$
|
275
|
$
|
265
|
(a)
|
Represents a pre-tax charge related to the recognition of a step-up in value of inventories as a result of purchase accounting.
|
(b)
|
Represents a pre-tax charge for the impairment and loss on sale of the assets of our Tronox Electrolytic Operations which was recorded in “Impairment loss” in the unaudited
Condensed Consolidated Statements of Operations.
|
(c)
|
Represents a pre-tax charge for the estimated losses we expect to incur under the supply agreement with Venator which was recorded in “Contract loss” in our unaudited Condensed
Consolidated Statements of Operations.
|
(d)
|
Represents non-cash share-based compensation.
|
(e)
|
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.
|
(f)
|
Represents amounts for employee-related costs.
|
(g)
|
Represents integration costs associated with the Cristal Integration after the acquisition which were recorded in “Selling, general and administrative expenses” in the
unaudited Condensed Consolidated Statements of Operations.
|
(h)
|
2019 amounts represent the loss in connection with the modification of the Wells Fargo Revolver and termination of the ABSA Revolver. 2018 amounts represent debt extinguishment
costs associated with the issuance of our 2026 Senior Notes and redemption of our Senior Notes due 2022.
|
(i)
|
Represents realized and unrealized gains and losses associated with foreign currency remeasurement related to third-party and intercompany receivables and liabilities
denominated in a currency other than the functional currency of the entity holding them, which are included in “Other income (expense), net” in the unaudited Condensed Consolidated Statements of Operations. Prior to the first quarter of
2019, realized gains and losses associated with third party receivables and liabilities had been included in Adjusted EBITDA. Commencing with 2019, we are now excluding these amounts from Adjusted EBITDA and prior period amounts have been
revised for comparability purposes. The exclusion of all of the realized and unrealized gains and losses is consistent with the reporting of Adjusted EBITDA we make to our lenders.
|
(j)
|
Includes noncash pension and postretirement costs, accretion expense and other items included in “Selling general and administrative expenses”, “Cost of goods sold” and “Other
income (expense), net” in the unaudited Condensed Consolidated Statements of Operations. Amounts for 2019 also include the potential payment to Exxaro for capital gains tax on the disposal of its ordinary shares in Tronox Holding plc
included in “Other income (expense), net” in the unaudited Condensed Consolidated Statements of Operations.
|
Three Months Ended June 30,
|
||||||||||||
2019
|
2018
|
% variance
|
||||||||||
Net sales
|
$
|
791
|
$
|
492
|
61
|
%
|
||||||
Electrolytic sales
|
-
|
(15
|
)
|
-100
|
%
|
|||||||
Net sales, excluding Electrolytic sales
|
$
|
791
|
$
|
477
|
66
|
%
|
Three Months Ended June 30,
|
||||||||||||
2019
|
2018
|
% variance
|
||||||||||
Net sales
|
$
|
827
|
$
|
903
|
-8
|
%
|
||||||
Electrolytic sales
|
-
|
(15
|
)
|
-100
|
%
|
|||||||
Net sales, excluding Electrolytic sales
|
$
|
827
|
$
|
888
|
-7
|
%
|
Consolidated
|
||||
Cash provided by operating activities, continuing operations
|
$
|
138
|
||
Capital expenditures
|
(81
|
)
|
||
Free cash flow (non-U.S. GAAP)
|
$
|
57
|
Pro forma amounts
|
Pro forma amounts
|
|||||||||||||||
Three months Ended June 30,
|
Six months Ended June 30,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Net sales
|
$
|
827
|
$
|
903
|
$
|
1,547
|
$
|
1,779
|
||||||||
Cost of goods sold
|
648
|
685
|
1,238
|
1,409
|
||||||||||||
Contract loss
|
-
|
-
|
-
|
-
|
||||||||||||
Gross profit
|
179
|
218
|
309
|
370
|
||||||||||||
Selling, general, and administrative expenses
|
85
|
60
|
178
|
134
|
||||||||||||
Restructuring
|
10
|
-
|
10
|
-
|
||||||||||||
Impairment loss
|
-
|
-
|
-
|
25
|
||||||||||||
Income from operations
|
84
|
158
|
121
|
211
|
||||||||||||
Interest expense
|
(54
|
)
|
(53
|
)
|
(109
|
)
|
(104
|
)
|
||||||||
Interest income
|
3
|
2
|
6
|
6
|
||||||||||||
Loss on extinguishment of debt
|
-
|
(30
|
)
|
(2
|
)
|
(30
|
)
|
|||||||||
Other income (expense), net
|
5
|
19
|
(9
|
)
|
11
|
|||||||||||
Income from continuing operations before income taxes
|
38
|
96
|
7
|
94
|
||||||||||||
Income tax benefit (provision)
|
4
|
24
|
(2
|
)
|
15
|
|||||||||||
Net income from continuing operations
|
42
|
120
|
5
|
109
|
||||||||||||
Net income attributable to noncontrolling interest
|
6
|
15
|
11
|
20
|
||||||||||||
Net income (loss) from continuing operations attributable to Tronox Holdings plc
|
$
|
36
|
$
|
105
|
$
|
(6
|
)
|
$
|
89
|
|||||||
Net (loss) income from continuing operations per share, diluted
|
$
|
0.23
|
$
|
0.64
|
$
|
(0.04
|
)
|
$
|
0.54
|
|||||||
Weighted average shares outstanding, diluted (in thousands)
|
155,254
|
164,296
|
158,124
|
164,163
|
Pro forma amounts
|
Pro forma amounts
|
|||||||||||||||
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Net income (loss) from continuing operations attributable to Tronox Limited
(U.S. GAAP) |
$
|
36
|
$
|
105
|
$
|
(6
|
)
|
$
|
89
|
|||||||
Inventory step-up
|
$
|
-
|
$
|
5
|
$
|
-
|
$
|
50
|
||||||||
Impairment loss
|
-
|
-
|
-
|
25
|
||||||||||||
Restructuring
|
10
|
-
|
10
|
-
|
||||||||||||
Integration costs
|
4
|
4
|
||||||||||||||
Tax valuation allowance reversal
|
-
|
(48
|
)
|
-
|
(48
|
)
|
||||||||||
Loss on extinguishment of debt
|
-
|
30
|
2
|
30
|
||||||||||||
Share-based compensation modification
|
-
|
(6
|
)
|
-
|
(6
|
)
|
||||||||||
Charge for potential capital gains tax payment to Exxaro
|
1
|
-
|
2
|
-
|
||||||||||||
Adjusted net income attributable to Tronox Holdings plc (non-U.S. GAAP) (1)
|
$
|
51
|
$
|
86
|
$
|
12
|
$
|
140
|
||||||||
Diluted net income (loss) per share from continuing operations (U.S. GAAP)
|
$
|
0.23
|
$
|
0.64
|
$
|
(0.04
|
)
|
$
|
0.54
|
|||||||
Inventory step-up, per share
|
-
|
0.03
|
-
|
0.30
|
||||||||||||
Impairment loss, per share
|
-
|
-
|
-
|
0.16
|
||||||||||||
Restructuring, per share
|
0.06
|
-
|
0.06
|
-
|
||||||||||||
Integration costs, per share
|
0.03
|
-
|
0.03
|
-
|
||||||||||||
Tax valuation allowance reversal, per share
|
-
|
(0.29
|
)
|
-
|
(0.29
|
)
|
||||||||||
Loss on extinguishment of debt, per share
|
-
|
0.18
|
0.01
|
0.18
|
||||||||||||
Share-based compensation modification, per share
|
-
|
(0.04
|
)
|
-
|
(0.04
|
)
|
||||||||||
Charge for potential capital gains tax payment to Exxaro, per share
|
0.01
|
-
|
0.01
|
-
|
||||||||||||
Diluted adjusted net (loss) income per share attributable to Tronox Holdings plc (non-U.S. GAAP)
|
$
|
0.33
|
$
|
0.52
|
$
|
0.07
|
$
|
0.85
|
||||||||
Weighted average shares outstanding, diluted (in thousands)
|
155,254
|
164,296
|
159,470
|
164,163
|
Pro forma amounts
|
Pro forma amounts
|
|||||||||||||||
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Net income from continuing operations (U.S. GAAP)
|
$
|
42
|
$
|
120
|
$
|
5
|
$
|
109
|
||||||||
Interest expense
|
54
|
53
|
109
|
104
|
||||||||||||
Interest income
|
(3
|
)
|
(2
|
)
|
(6
|
)
|
(6
|
)
|
||||||||
Income tax benefit
|
(4
|
)
|
(24
|
)
|
2
|
(15
|
)
|
|||||||||
Depreciation, depletion and amortization expense
|
87
|
93
|
183
|
184
|
||||||||||||
EBITDA (non-U.S. GAAP)
|
176
|
240
|
293
|
376
|
||||||||||||
Inventory step-up
|
-
|
6
|
-
|
61
|
||||||||||||
Impairment loss
|
-
|
-
|
-
|
25
|
||||||||||||
Share based compensation
|
7
|
2
|
15
|
9
|
||||||||||||
Restructuring
|
10
|
-
|
10
|
-
|
||||||||||||
Integration costs
|
4
|
-
|
4
|
-
|
||||||||||||
Loss on extinguishment of debt
|
-
|
30
|
2
|
30
|
||||||||||||
Foreign currency remeasurement
|
(3
|
)
|
(26
|
)
|
(4
|
)
|
(16
|
)
|
||||||||
Other items
|
6
|
5
|
21
|
6
|
||||||||||||
Adjusted EBITDA (non-U.S. GAAP)
|
$
|
200
|
$
|
257
|
$
|
341
|
$
|
491
|
Pro forma amounts
|
||||
Three months Ended
June 30,
|
||||
2019
|
||||
Net sales
|
$
|
720
|
||
Cost of goods sold
|
590
|
|||
Gross profit
|
130
|
|||
Selling, general, and administrative expenses
|
93
|
|||
Income from operations
|
37
|
|||
Interest expense
|
(55
|
)
|
||
Interest income
|
3
|
|||
Loss on extinguishment of debt
|
(2
|
)
|
||
Other income (expense), net
|
(14
|
)
|
||
Loss from continuing operations before income taxes
|
(31
|
)
|
||
Income tax provision
|
(6
|
)
|
||
Net loss from continuing operations
|
(37
|
)
|
||
Net loss attributable to noncontrolling interest
|
5
|
|||
Net loss from continuing operations attributable to Tronox Holdings plc
|
$
|
(42
|
)
|
|
Net loss from continuing operations per share, diluted
|
$
|
(0.26
|
)
|
|
Weighted average shares outstanding, diluted (in thousands)
|
161,876
|
Pro forma amounts
|
||||
Three Months Ended June 30,
|
||||
2019
|
||||
Net loss from continuing operations (U.S. GAAP)
|
$
|
(37
|
)
|
|
Interest expense
|
55
|
|||
Interest income
|
(3
|
)
|
||
Income tax benefit
|
6
|
|||
Depreciation, depletion and amortization expense
|
96
|
|||
EBITDA (non-U.S. GAAP)
|
117
|
|||
Inventory step-up
|
-
|
|||
Impairment loss
|
-
|
|||
Share based compensation
|
8
|
|||
Loss on extinguishment of debt
|
2
|
|||
Foreign currency remeasurement
|
(1
|
)
|
||
Other items
|
15
|
|||
Adjusted EBITDA (non-U.S. GAAP)
|
$
|
141
|