28. Guarantor Condensed Consolidating Financial Statements

Our obligations under the Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis, jointly and severally, by each current and future U.S. restricted subsidiary, other than excluded subsidiaries that guarantee any indebtedness of Tronox Limited or our restricted subsidiaries. Our subsidiaries that do not guarantee the Senior Notes are referred to as the “Non-Guarantor Subsidiaries.” The Guarantor Condensed Consolidating Financial Data presented below presents the statements of operations, statements of comprehensive income, balance sheets and statements of cash flow data for: (i) Tronox Limited (the “Parent Company”), the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries on a consolidated basis (which is derived from Tronox historical reported financial information); (ii) the Parent Company, alone (accounting for our Guarantor Subsidiaries and the Non-Guarantor Subsidiaries on an equity basis under which the investments are recorded by each entity owning a portion of another entity at cost, adjusted for the applicable share of the subsidiary’s cumulative results of operations, capital contributions and distributions, and other equity changes); (iii) the Guarantor Subsidiaries alone; and, (iv) the Non-Guarantor Subsidiaries alone.

The guarantor condensed consolidating financial statements are presented on a legal entity basis, not on a business segment basis.

GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Year Ended December 31, 2013

(Millions of U.S. dollars)


	Consolidated			Eliminations			Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
Net Sales	$	1,922		$	(330	)	$	—		$	1,297		$	955
Cost of goods sold		1,732			(337	)		—			1,242			827

Gross Profit		190			7			—			55			128
Selling, general and administrative expenses		(187	)		4			(34	)		(113	)		(44	)

Income (Loss) from Operations		3			11			(34	)		(58	)		84
Interest and debt expense		(130	)		—			547			(644	)		(33	)
Other income (expense)		66			(43	)		1			(14	)		122
Equity in earnings of subsidiary		—			473			(473	)		—			—

Income (Loss) before Income Taxes		(61	)		441			41			(716	)		173
Income tax benefit (provision)		(29	)		—			(166	)		168			(31	)

Net Income (Loss)		(90	)		441			(125	)		(548	)		142
Income attributable to noncontrolling interest		36			—			—			36			—

Net Income (Loss) attributable to Tronox Limited	$	(126	)	$	441		$	(125	)	$	(584	)	$	142

GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Year Ended December 31, 2012

(Millions of U.S. dollars)


	Consolidated			Eliminations			Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
Net Sales	$	1,832		$	(153	)	$	—		$	1,340		$	645
Cost of goods sold		1,568			(104	)		—			1,057			615

Gross Profit		264			(49	)		—			283			30
Selling, general and administrative expenses		(239	)		4			(98	)		(115	)		(30	)

Income (Loss) from Operations		25			(45	)		(98	)		168			—
Interest and debt expense		(65	)		—			297			(356	)		(6	)
Other income (expense)		(7	)		432			(95	)		(337	)		(7	)
Gain on bargain purchase		1,055			—			1,055			—			—
Equity in earnings of subsidiary		—			1,142			(1,144	)		2			—

Income (Loss) before Income Taxes		1,008			1,529			15			(523	)		(13	)
Income tax benefit (provision)		125			—			(60	)		139			46

Net Income (Loss)		1,133			1,529			(45	)		(384	)		33
Loss attributable to noncontrolling interest		(1	)		—			—			(1	)		—

Net Income (Loss) attributable to Tronox Limited	$	1,134		$	1,529		$	(45	)	$	(383	)	$	33

GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

Eleven Months Ended December 31, 2011

(Millions of U.S. dollars)


	Consolidated			Eliminations			Parent Company		Guarantor Subsidiaries			Non-Guarantor Subsidiaries
Net Sales	$	1,543		$	9		$	—	$	1,207		$	327
Cost of goods sold		1,104			22			—		856			226

Gross Profit		439			(13	)		—		351			101
Selling, general and administrative expenses		(152	)		3			—		(142	)		(13	)
Litigation/arbitration settlement		10			—			—		10			—
Environmental remediation and restoration reimbursements, net		5			—			—		5			—

Income (Loss) from Operations		302			(10	)		—		224			88
Interest and debt expense		(30	)		—			—		(20	)		(10	)
Other income (expense)		(10	)		31			—		(35	)		(6	)
Equity in earnings of subsidiary		—			(72	)		—		72			—

Income (Loss) before Income Taxes		262			(51	)		—		241			72
Income tax benefit (provision)		(20	)		—			—		6			(26	)

Net Income (Loss)	$	242		$	(51	)	$	—	$	247		$	46

GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

One Month Ended January 31, 2011

(Millions of U.S. dollars)


	Consolidated			Eliminations			Parent Company		Guarantor Subsidiaries			Non-Guarantor Subsidiaries
Net Sales	$	108		$	(23	)	$	—	$	111		$	20
Cost of goods sold		83			(22	)		—		89			16

Gross Profit		25			(1	)		—		22			4
Selling, general and administrative expenses		(5	)		1			—		(5	)		(1	)

Income from Operations		20			—			—		17			3
Interest and debt expense		(3	)		—			—		(3	)		—
Other income		615			2			—		550			63
Equity in earnings of subsidiary		—			(63	)		—		63			—

Income (Loss) before Income Taxes		632			(61	)		—		627			66
Income tax benefit (provision)		(1	)		—			—		(1	)		—

Net Income (Loss)	$	631		$	(61	)	$	—	$	626		$	66

GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

Year Ended December 31, 2013

(Millions of U.S. dollars)


	Consolidated			Eliminations		Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
Net Income (Loss):
Net Income (Loss)	$	(90	)	$	441	$	(125	)	$	(548	)	$	142
Other Comprehensive Income (Loss):
Foreign currency translation adjustments		(289	)		—		—			23			(312	)
Pension and postretirement plans		30			—		—			26			4

Other comprehensive income (loss)		(259	)		—		—			49			(308	)

Total Comprehensive Income (Loss)		(349	)		441		(125	)		(499	)		(166	)

Comprehensive Income (Loss) Attributable to Noncontrolling Interest:
Net income		36			—		—			36			—
Foreign currency translation adjustments		(70	)		—		—			(70	)		—

Comprehensive income (loss) attributable to noncontrolling interest		(34	)		—		—			(34	)		—

Comprehensive Income (Loss) Attributable to Tronox Limited	$	(315	)	$	441	$	(125	)	$	(465	)	$	(166	)

GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

Year Ended December 31, 2012

(Millions of U.S. dollars)


	Consolidated			Eliminations		Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
Net Income (Loss):
Net Income (Loss)	$	1,133		$	1,529	$	(45	)	$	(384	)	$	33
Other Comprehensive Income (Loss):
Foreign currency translation adjustments		11			19		—			(2	)		(6	)
Pension and postretirement plans		(48	)		—		—			(47	)		(1	)

Other comprehensive income (loss)		(37	)		19		—			(49	)		(7	)

Total Comprehensive Income (Loss)		1,096			1,548		(45	)		(433	)		26

Comprehensive Income (Loss) Attributable to Noncontrolling Interest:
Net loss		(1	)		—		—			(1	)		—
Foreign currency translation adjustments		1			—		—			1			—

Comprehensive income (loss) attributable to noncontrolling interest		—			—		—			—			—

Comprehensive Income (Loss) Attributable to Tronox Limited	$	1,096		$	1,548	$	(45	)	$	(433	)	$	26

GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

Eleven Months Ended December 31, 2011

(Millions of U.S. dollars)


	Consolidated			Eliminations			Parent Company		Guarantor Subsidiaries			Non-Guarantor Subsidiaries
Net Income (Loss):
Net Income (Loss)	$	242		$	(51	)	$	—	$	247		$	46
Other Comprehensive Income (Loss):
Foreign currency translation adjustments		(6	)		—			—		(130	)		124
Pension and postretirement plans		(51	)		—			—		(37	)		(14	)

Other comprehensive income (loss)		(57	)		—			—		(167	)		110

Total Comprehensive Income (Loss)	$	185		$	(51	)	$	—	$	80		$	156

GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME

One Month Ended January 31, 2011

(Millions of U.S. dollars)


	Consolidated			Eliminations			Parent Company		Guarantor Subsidiaries		Non-Guarantor Subsidiaries
Net Income (Loss):
Net Income (Loss)	$	631		$	(61	)	$	—	$	626	$	66
Other Comprehensive Income (Loss):
Foreign currency translation adjustments		1			—			—		—		1
Pension and postretirement plans		(1	)		—			—		—		(1	)

Other comprehensive income (loss)		—			—			—		—		—

Total Comprehensive Income (Loss)	$	631		$	(61	)	$	—	$	626	$	66

GUARANTOR CONDENSED CONSOLIDATING BALANCE SHEETS

As of December 31, 2013

(Millions of U.S. dollars)


	Consolidated		Eliminations			Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
ASSETS
Cash and cash equivalents	$	1,478	$	—		$	179		$	1,094		$	205
Investment in subsidiaries		—		(952	)		(1,095	)		1,590			457
Other current assets		1,175		(9,645	)		6,599			2,125			2,096
Property, plant and equipment, net		1,258		—			—			710			548
Mineral leaseholds, net		1,216		—			—			701			515
Other long-term assets		572		—			88			376			108

Total Assets	$	5,699	$	(10,597	)	$	5,771		$	6,596		$	3,929

LIABILITIES AND EQUITY
Current liabilities	$	363	$	(2,333	)	$	658		$	1,801		$	237
Long-term debt		2,395		(7,268	)		825			7,272			1,566
Other long-term liabilities		504		—			—			236			268

Total Liabilities		3,262		(9,601	)		1,483			9,309			2,071
Total Equity		2,437		(996	)		4,288			(2,713	)		1,858

Total Liabilities and Equity	$	5,699	$	(10,597	)	$	5,771		$	6,596		$	3,929

GUARANTOR CONDENSED CONSOLIDATING BALANCE SHEETS

As of December 31, 2012

(Millions of U.S. dollars)


	Consolidated		Eliminations			Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
ASSETS
Cash and cash equivalents	$	716	$	—		$	533		$	85		$	98
Investment in subsidiaries		—		(1,595	)		(622	)		1,760			457
Other current assets		1,457		(8,298	)		6,047			2,178			1,530
Property, plant and equipment, net		1,423		—			—			748			675
Mineral leaseholds, net		1,439		—			—			796			643
Other long-term assets		476		—			(3	)		398			81

Total Assets	$	5,511	$	(9,893	)	$	5,955		$	5,965		$	3,484

LIABILITIES AND EQUITY
Current liabilities	$	467	$	(1,023	)	$	560		$	574		$	356
Long-term debt		1,605		(7,223	)		882			7,188			758
Other long-term liabilities		557		—			—			249			308

Total Liabilities		2,629		(8,246	)		1,442			8,011			1,422
Total Equity		2,882		(1,647	)		4,513			(2,046	)		2,062

Total Liabilities and Equity	$	5,511	$	(9,893	)	$	5,955		$	5,965		$	3,484

GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Year Ended December 31, 2013

(Millions of U.S. dollars)


	Consolidated			Eliminations			Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
Cash Flows from Operating Activities
Net income (loss)	$	(90	)	$	441		$	(125	)	$	(548	)	$	142
Other		427			(441	)		(116	)		1,628			(644	)

Cash provided by (used in) operating activities		337			—			(241	)		1,080			(502	)

Cash Flows from Investing Activities:
Capital expenditures		(172	)		—			—			(71	)		(101	)
Proceeds from the sale of assets		1			—			—			—			1

Cash used in investing activities		(171	)		—			—			(71	)		(100	)

Cash Flows from Financing Activities
Repayments of debt		(189	)		—			—			—			(189	)
Proceeds from borrowings		945			—			—			—			945
Debt issuance costs		(29	)		—			—			—			(29	)
Dividends paid		(115	)		—			(115	)		—			—
Proceeds from the conversion of warrants		2			—			2			—			—

Cash provided by (used in) financing activities		614			—			(113	)		—			727

Effects of Exchange Rate Changes on Cash and Cash Equivalents		(18	)		—			—			—			(18	)

Net Increase (Decrease) in Cash and Cash Equivalents		762			—			(354	)		1,009			107
Cash and Cash Equivalents at Beginning of Period		716			—			533			85			98

Cash and Cash Equivalents at End of Period	$	1,478		$	—		$	179		$	1,094		$	205

GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Year Ended December 31, 2012

(Millions of U.S. dollars)


	Consolidated			Eliminations			Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries
Cash Flows from Operating Activities
Net income (loss)	$	1,133		$	1,529		$	(45	)	$	(384	)	$	33
Gain on bargain purchase		(1,055	)		—			(1,055	)		—			—
Other		40			(1,529	)		2,098			(14	)		(515	)

Cash provided by (used in) operating activities		118			—			998			(398	)		(482	)

Cash Flows from Investing Activities:
Capital expenditures		(166	)		—			—			(89	)		(77	)
Net cash received in acquisition of mineral sands business		114			—			114			—			—

Cash provided by (used in) investing activities		(52	)		—			114			(89	)		(77	)

Cash Flows from Financing Activities
Repayments of debt		(585	)		—			—			(481	)		(104	)
Proceeds from borrowings		1,707			—			—			960			747
Debt issuance costs		(38	)		—			—			(19	)		(19	)
Dividends paid		(61	)		—			(61	)		—			—
Proceeds from the exercise of warrants		1			—			1			—			—
Merger consideration		(193	)		—			(193	)		—			—
Class A ordinary shares repurchased		(326	)		—			(326	)		—			—
Shares purchased for the Employee Participation Plan		(15	)		—			—			—			(15	)

Cash provided by (used in) financing activities		490			—			(579	)		460			609

Effects of Exchange Rate Changes on Cash and Cash Equivalents		6			—			—			8			(2	)

Net Increase (Decrease) in Cash and Cash Equivalents		562			—			533			(19	)		48
Cash and Cash Equivalents at Beginning of Period		154			—			—			104			50

Cash and Cash Equivalents at End of Period	$	716		$	—		$	533		$	85		$	98

GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

Eleven Months Ended December 31, 2011

(Millions of U.S. dollars)


	Consolidated			Eliminations			Parent Company		Guarantor Subsidiaries			Non-Guarantor Subsidiaries
Cash Flows from Operating Activities
Net income (loss)	$	242		$	(51	)	$	—	$	247		$	46
Other		21			51			—		(36	)		6

Cash provided by operating activities		263			—			—		211			52

Cash Flows from Investing Activities:
Capital expenditures		(133	)		—			—		(125	)		(8	)
Proceeds from the sale of assets		1			—			—		1			—

Cash used in investing activities		(132	)		—			—		(124	)		(8	)

Cash Flows from Financing Activities
Repayments of debt		(45	)		—			—		(45	)		—
Proceeds from borrowings		14			—			—		14			—
Debt issuance costs and commitment fees		(5	)		—			—		(5	)		—
Proceeds from the exercise of warrants		1			—			—		1			—

Cash used in financing activities		(35	)		—			—		(35	)		—

Effects of Exchange Rate Changes on Cash and Cash Equivalents		(3	)		—			—		—			(3	)

Net Increase in Cash and Cash Equivalents		93			—			—		52			41
Cash and Cash Equivalents at Beginning of Period		61			—			—		52			9

Cash and Cash Equivalents at End of Period	$	154		$	—		$	—	$	104		$	50

GUARANTOR CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

One Months Ended January 1, 2011

(Millions of U.S. dollars)


	Consolidated			Eliminations			Parent Company		Guarantor Subsidiaries			Non-Guarantor Subsidiaries
Cash Flows from Operating Activities
Net income (loss)	$	631		$	(61	)	$	—	$	626		$	66
Reorganization items		(954	)		—			—		(954	)		—
Other		40			61			—		61			(82	)

Cash used in operating activities		(283	)		—			—		(267	)		(16	)

Cash Flows from Investing Activities:
Capital expenditures		(6	)		—			—		(6	)		—

Cash used in investing activities		(6	)		—			—		(6	)		—

Cash Flows from Financing Activities
Proceeds from borrowings		25			—			—		25			—
Debt issuance costs		(2	)		—			—		(2	)		—
Proceeds from the rights offering		185			—			—		185			—

Cash provided by financing activities		208			—			—		208			—

Effects of Exchange Rate Changes on Cash and Cash Equivalents		—			—			—		—			—

Net Decrease in Cash and Cash Equivalents		(81	)		—			—		(65	)		(16	)
Cash and Cash Equivalents at Beginning of Period		142			—			—		117			25

Cash and Cash Equivalents at End of Period	$	61		$	—		$	—	$	52		$	9