QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Laporte Road, Stallingborough Grimsby, North East Lincolnshire, DN40 2PR United Kingdom |
Title of each class | Name of each exchange on which registered | |||||||
☒ | Accelerated filer | ☐ | |||||||||
Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Page | ||||||||
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Item 3. | ||||||||
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Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
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Item 6. | ||||||||
Page No. | |||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of goods sold | |||||||||||||||||||||||
Contract loss | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Restructuring | |||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Interest income | |||||||||||||||||||||||
Loss on extinguishment of debt | ( | ||||||||||||||||||||||
Other income (expense), net | ( | ||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | ( | ||||||||||||||||||||||
Income tax benefit (provision) | ( | ( | |||||||||||||||||||||
Net income (loss) from continuing operations | ( | ( | |||||||||||||||||||||
Net income from discontinued operations, net of tax | |||||||||||||||||||||||
Net income (loss) | ( | ( | |||||||||||||||||||||
Net income attributable to noncontrolling interest | |||||||||||||||||||||||
Net income (loss) attributable to Tronox Holdings plc | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Net income (loss) per share, basic: | |||||||||||||||||||||||
Continuing operations | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Discontinued operations | $ | $ | $ | $ | |||||||||||||||||||
Net income (loss) per share, basic | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Net income (loss) per share, diluted: | |||||||||||||||||||||||
Continuing operations | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Discontinued operations | $ | $ | $ | ||||||||||||||||||||
Net income (loss) per share, diluted | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Weighted average shares outstanding, basic (in thousands) | |||||||||||||||||||||||
Weighted average shares outstanding, diluted (in thousands) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net income (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Other comprehensive income (loss): | |||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ( | ||||||||||||||||||||
Pension and postretirement plans: | |||||||||||||||||||||||
Actuarial losses, (net of taxes of less than $ | ( | ||||||||||||||||||||||
Amortization of unrecognized actuarial losses, (net of taxes of less than $ | |||||||||||||||||||||||
Total pension and postretirement gains (losses) | |||||||||||||||||||||||
Realized (gains) losses on derivatives reclassified from accumulated other comprehensive loss to the Condensed Consolidated Statement of Operations | ( | ||||||||||||||||||||||
Unrealized (losses) gains on derivative financial instruments, (net of tax expense of $ | ( | ( | ( | ||||||||||||||||||||
Other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
Total comprehensive income (loss) | ( | ( | |||||||||||||||||||||
Comprehensive income (loss) attributable to noncontrolling interest: | |||||||||||||||||||||||
Net income | |||||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | |||||||||||||||||||||
Comprehensive income (loss) attributable to noncontrolling interest | ( | ( | |||||||||||||||||||||
Comprehensive income (loss) attributable to Tronox Holdings plc | $ | $ | ( | $ | $ | ( |
September 30, 2020 | December 31, 2019 | ||||||||||
ASSETS | |||||||||||
Current Assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable (net of allowance for credit losses of $ | |||||||||||
Inventories, net | |||||||||||
Prepaid and other assets | |||||||||||
Income taxes receivable | |||||||||||
Total current assets | |||||||||||
Noncurrent Assets | |||||||||||
Property, plant and equipment, net | |||||||||||
Mineral leaseholds, net | |||||||||||
Intangible assets, net | |||||||||||
Lease right of use assets, net | |||||||||||
Deferred tax assets | |||||||||||
Other long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Current Liabilities | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Short-term lease liabilities | |||||||||||
Short-term debt | |||||||||||
Long-term debt due within one year | |||||||||||
Income taxes payable | |||||||||||
Total current liabilities | |||||||||||
Noncurrent Liabilities | |||||||||||
Long-term debt, net | |||||||||||
Pension and postretirement healthcare benefits | |||||||||||
Asset retirement obligations | |||||||||||
Environmental liabilities | |||||||||||
Long-term lease liabilities | |||||||||||
Deferred tax liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and Contingencies - Note 17 | |||||||||||
Shareholders’ Equity | |||||||||||
Tronox Holdings plc ordinary shares, par value $ | |||||||||||
Capital in excess of par value | |||||||||||
Retained earnings (accumulated deficit) | ( | ||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total Tronox Holdings plc shareholders’ equity | |||||||||||
Noncontrolling interest | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Cash Flows from Operating Activities: | |||||||||||
Net income (loss) | $ | $ | ( | ||||||||
Net income from discontinued operations, net of tax | |||||||||||
Net income (loss) from continuing operations | $ | $ | ( | ||||||||
Adjustments to reconcile net income (loss) from continuing operations to net cash provided by operating activities, continuing operations: | |||||||||||
Depreciation, depletion and amortization | |||||||||||
Reversal of U.S. valuation allowance | ( | ||||||||||
Deferred income taxes - other | ( | ||||||||||
Share-based compensation expense | |||||||||||
Amortization of deferred debt issuance costs and discount on debt | |||||||||||
Loss on extinguishment of debt | |||||||||||
Contract loss | |||||||||||
Acquired inventory step-up recognized in earnings | |||||||||||
Other non-cash items affecting net (loss) income from continuing operations | |||||||||||
Changes in assets and liabilities: | |||||||||||
(Increase) decrease in accounts receivable, net of allowance for credit losses | ( | ( | |||||||||
(Increase) decrease in inventories, net | ( | ||||||||||
(Increase) decrease in prepaid and other assets | ( | ||||||||||
Increase in accounts payable and accrued liabilities | |||||||||||
Net changes in income tax payables and receivables | ( | ||||||||||
Changes in other non-current assets and liabilities | ( | ( | |||||||||
Cash provided by operating activities - continuing operations | |||||||||||
Cash Flows from Investing Activities: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Cristal Acquisition | ( | ||||||||||
Proceeds from sale of Ashtabula | |||||||||||
Insurance proceeds | |||||||||||
Loans | ( | ( | |||||||||
Proceeds from sale of assets | |||||||||||
Cash used in investing activities - continuing operations | ( | ( | |||||||||
Cash Flows from Financing Activities: | |||||||||||
Repayments of short-term debt | ( | ||||||||||
Repayments of long-term debt | ( | ( | |||||||||
Proceeds from long-term debt | |||||||||||
Repurchase of common stock | ( | ||||||||||
Proceeds from short-term debt | |||||||||||
Acquisition of noncontrolling interest | ( | ||||||||||
Debt issuance costs | ( | ( | |||||||||
Dividends paid | ( | ( | |||||||||
Restricted stock and performance-based shares settled in cash for withholding taxes | ( | ( | |||||||||
Cash provided by (used in) financing activities - continuing operations | ( | ||||||||||
Discontinued Operations: | |||||||||||
Cash used in operating activities | |||||||||||
Cash used in investing activities | ( | ||||||||||
Net cash flows used by discontinued operations | |||||||||||
Effects of exchange rate changes on cash and cash equivalents and restricted cash | ( | ( | |||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ||||||||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
Supplemental cash flow information: | |||||||||||
Interest paid, net | $ | $ | |||||||||
Income taxes paid | $ | $ |
Tronox Holdings plc Ordinary Shares (in thousands) | Tronox Holdings plc Ordinary Shares (Amount) | Capital in Excess of par Value | (Accumulated Deficit) / Retained Earnings | Accumulated Other Comprehensive Loss | Total Tronox Holdings plc Shareholders’ Equity | Non- controlling Interest | Total Equity | ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) income | — | — | — | — | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Shares cancelled | ( | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Measurement period adjustment related to Cristal acquisition | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Ordinary share dividends ($ | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Shares cancelled | ( | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Ordinary share dividends ($ | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Net (loss) income | — | — | — | 896 | — | ||||||||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Shares cancelled | ( | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Ordinary share dividends ($ | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ | ( | $ | $ | $ |
Tronox Holdings plc Ordinary Shares (in thousands) | Tronox Holdings plc Ordinary Shares | Capital in Excess of par Value | (Accumulated Deficit) | Accumulated Other Comprehensive Loss | Total Tronox Holdings plc Shareholders’ Equity | Non- controlling Interest | Total Equity | ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Net (loss) income | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Shares cancelled | ( | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Acquisition of noncontrolling interest | — | — | — | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Ordinary share dividends ($ | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Net (loss) income | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Shares cancelled | ( | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Shares issued for acquisition | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Shares repurchased and cancelled | ( | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Cristal acquisition | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Ordinary share dividends ($ | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||
Net (loss) income | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Shares cancelled | ( | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Shares repurchased and cancelled | ( | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Cristal acquisition | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Ordinary share dividends ($ | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | ( | $ | ( | $ | $ | $ |
Fair Value | |||||
Purchase Price Consideration: | |||||
Tronox Holdings plc shares issued | |||||
Tronox Holdings plc closing price per share on April 10, 2019 | $ | ||||
Total fair value of Tronox Holdings plc shares issued at acquisition date | $ | ||||
Cash consideration paid | $ | ||||
Total purchase price | $ |
Fair Value | |||||
Fair Value of Assets Acquired: | |||||
Accounts receivable | $ | ||||
Inventory | |||||
Deferred tax assets | |||||
Prepaid and other assets | |||||
Property, plant and equipment | |||||
Mineral leaseholds | |||||
Intangible assets | |||||
Lease right of use assets | |||||
Other long-term assets | |||||
Assets held for sale | |||||
Total assets acquired | $ | ||||
Less: Liabilities Assumed | |||||
Accounts payable | $ | ||||
Accrued liabilities | |||||
Short-term lease liabilities | |||||
Deferred tax liabilities | |||||
Pension and postretirement healthcare benefits | |||||
Environmental liabilities | |||||
Asset retirement obligations | |||||
Long-term debt | |||||
Long-term lease liabilities | |||||
Other long-term liabilities | |||||
Liabilities held for sale | |||||
Total liabilities assumed | $ | ||||
Less noncontrolling interest | |||||
Purchase price | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
2019 | |||||||||||
Net sales | $ | $ | |||||||||
Net income from continuing operations attributable to Tronox Holdings plc | $ | $ |
Employee- Related Costs | |||||
Balance, December 31, 2019 | $ | ||||
First Quarter 2020 charges | |||||
Cash payments | ( | ||||
Foreign exchange and other | |||||
Balance, March 31, 2020 | $ | ||||
Second Quarter 2020 charges | |||||
Cash payments | ( | ||||
Foreign exchange and other | |||||
Balance, June 30, 2020 | $ | ||||
Third Quarter 2020 charges | $ | ||||
Cash payments | $ | ( | |||
Foreign exchange and other | $ | ||||
Balance, September 30, 2020 | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
North America | $ | $ | $ | $ | |||||||||||||||||||
South and Central America | |||||||||||||||||||||||
Europe, Middle-East and Africa | |||||||||||||||||||||||
Asia Pacific | |||||||||||||||||||||||
Total net sales | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
TiO2 | $ | $ | $ | $ | |||||||||||||||||||
Zircon | |||||||||||||||||||||||
Feedstock and other products | |||||||||||||||||||||||
Total net sales | $ | $ | $ | $ |
Three Months Ended September 30, 2019 | Nine Months Ended September 30, 2019 | ||||||||||
Net sales | $ | $ | |||||||||
Cost of goods sold | |||||||||||
Gross profit | |||||||||||
Selling, general and administrative expense | ( | ( | |||||||||
Income (loss) before income taxes | ( | ||||||||||
Income tax benefit (provision) | ( | ||||||||||
Net loss from discontinued operations, net of tax | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Income tax (provision) benefit | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | $ | $ | $ | ( | ||||||||||||||||||
Effective tax rate | ( | % | N/A | ( | % | ( | % |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Numerator - Basic and Diluted: | |||||||||||||||||||||||
Net income (loss) from continuing operations | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Less: Net income attributable to noncontrolling interest | |||||||||||||||||||||||
Undistributed net income (loss) from continuing operations attributable to Tronox Holdings plc | ( | ( | |||||||||||||||||||||
Net loss from discontinued operations | |||||||||||||||||||||||
Net income (loss) available to ordinary shares | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Denominator - Basic and Diluted: | |||||||||||||||||||||||
Weighted-average ordinary shares, basic (in thousands) | |||||||||||||||||||||||
Weighted-average ordinary shares, diluted (in thousands) | |||||||||||||||||||||||
Basic net income (loss) from continuing operations per ordinary share | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Basic net income from discontinued operations per ordinary share | |||||||||||||||||||||||
Basic net income (loss) operations per ordinary share | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Diluted net income (loss) from continuing operations per ordinary share | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Diluted net income from discontinued operations per ordinary share | |||||||||||||||||||||||
Diluted net income (loss) operations per ordinary share | $ | $ | ( | $ | $ | ( |
Shares | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Options | |||||||||||||||||||||||
Restricted share units |
September 30, 2020 | December 31, 2019 | ||||||||||
Raw materials | $ | $ | |||||||||
Work-in-process | |||||||||||
Finished goods, net | |||||||||||
Materials and supplies, net | |||||||||||
Inventories, net – current | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Land and land improvements | $ | $ | |||||||||
Buildings | |||||||||||
Machinery and equipment | |||||||||||
Construction-in-progress | |||||||||||
Other | |||||||||||
Subtotal | |||||||||||
Less: accumulated depreciation | ( | ( | |||||||||
Property, plant and equipment, net | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Cost of goods sold | $ | $ | $ | $ | |||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Mineral leaseholds | $ | $ | |||||||||
Less: accumulated depletion | ( | ( | |||||||||
Mineral leaseholds, net | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||||||
Gross Cost | Accumulated Amortization | Net Carrying Amount | Gross Cost | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
TiO2 technology | ( | ( | |||||||||||||||||||||||||||||||||
Internal-use software | ( | ( | |||||||||||||||||||||||||||||||||
Intangible assets, net | $ | $ | ( | $ | $ | $ | ( | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Cost of goods sold | $ | $ | $ | $ | |||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Employee-related costs and benefits | $ | $ | |||||||||
Related party payables | |||||||||||
Interest | |||||||||||
Sales rebates | |||||||||||
Restructuring | |||||||||||
Taxes other than income taxes | |||||||||||
Asset retirement obligations | |||||||||||
Interest rate swaps | |||||||||||
Currency contracts | |||||||||||
Professional fees and other | |||||||||||
Liabilities held for sale | |||||||||||
Accrued liabilities | $ | $ |
Nine Months Ended September 30, | |||||||||||
Supplemental non cash information: | 2020 | 2019 | |||||||||
Investing activities- shares issued in the Cristal acquisition | $ | $ | |||||||||
Financing activities- debt assumed in the Cristal acquisition | $ | $ | |||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
Capital expenditures acquired but not yet paid | $ | $ |
Original Principal | Annual Interest Rate | Maturity Date | September 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||
Term Loan Facility, net of unamortized discount (1)(4) | $ | Variable | 9/22/2024 | $ | $ | ||||||||||||||||||||||||
Senior Notes due 2025 | % | 10/1/2025 | |||||||||||||||||||||||||||
Senior Notes due 2026 | % | 4/15/2026 | |||||||||||||||||||||||||||
% | 5/1/2025 | ||||||||||||||||||||||||||||
Standard Bank Term Loan Facility (1)(2) | Variable | 3/25/2024 | |||||||||||||||||||||||||||
Tikon Loan | N/A | Variable | 5/23/2021 | ||||||||||||||||||||||||||
Australian Government Loan, net of unamortized discount | N/A | N/A | 12/31/2036 | ||||||||||||||||||||||||||
Finance leases | |||||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||||
Less: Long-term debt due within one year | ( | ( | |||||||||||||||||||||||||||
Debt issuance costs | ( | ( | |||||||||||||||||||||||||||
Long-term debt, net | $ | $ |
Annual Interest Rate | Maturity Date | September 30, 2020 | December 31, 2019 | ||||||||||||||||||||
Wells Fargo Revolver(1) | Variable | 9/22/2022 | $ | $ | |||||||||||||||||||
Standard Bank Revolver(2) | Variable | 3/25/2022 | |||||||||||||||||||||
Emirates Revolver(3) | Variable | 3/31/2021 | |||||||||||||||||||||
SABB Credit Facility(3) | Variable | 12/13/2020 | |||||||||||||||||||||
Short-term debt(4) | $ | $ |
Fair Value | |||||||||||||||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Assets(a) | Accrued Liabilities | Assets(a) | Accrued Liabilities | ||||||||||||||||||||
Derivatives Designated as Cash Flow Hedges | |||||||||||||||||||||||
Currency Contracts | $ | $ | $ | $ | |||||||||||||||||||
Interest Rate Swaps | $ | $ | $ | $ | |||||||||||||||||||
Total Hedges | $ | $ | $ | $ | |||||||||||||||||||
Derivatives Not Designated as Cash Flow Hedges | |||||||||||||||||||||||
Currency Contracts | $ | $ | $ | $ | |||||||||||||||||||
Total Derivatives | $ | $ | $ | $ |
Amount of Pre-Tax Gain (Loss) Recognized in Earnings | Amount of Pre-Tax Gain (Loss) Recognized in Earnings | ||||||||||||||||||||||||||||||||||
Revenue | Cost of Goods Sold | Other Income (Expense), net | Revenue | Cost of Goods Sold | Other Income (Expense), net | ||||||||||||||||||||||||||||||
Three Months Ended September 30, 2020 | Three Months Ended September 30, 2019 | ||||||||||||||||||||||||||||||||||
Derivatives Not Designated as Hedging Instruments | |||||||||||||||||||||||||||||||||||
Currency Contracts | $ | $ | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||
Derivatives Designated as Hedging Instruments | |||||||||||||||||||||||||||||||||||
Currency Contracts | $ | ( | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||
Total Derivatives | $ | ( | $ | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
Amount of Pre-Tax Gain (Loss) Recognized in Earnings | Amount of Pre-Tax Gain (Loss) Recognized in Earnings | ||||||||||||||||||||||||||||||||||
Revenue | Cost of Goods Sold | Other Income (Expense), net | Revenue | Cost of Goods Sold | Other Income (Expense), net | ||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2020 | Nine Months Ended September 30, 2019 | ||||||||||||||||||||||||||||||||||
Derivatives Not Designated as Hedging Instruments | |||||||||||||||||||||||||||||||||||
Currency Contracts | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||
Derivatives Designated as Hedging Instruments | |||||||||||||||||||||||||||||||||||
Currency Contracts | $ | ( | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||
Total Derivatives | $ | ( | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
Term Loan Facility | $ | $ | |||||||||
Standard Bank Term Loan Facility | |||||||||||
Senior Notes due 2025 | |||||||||||
Senior Notes due 2026 | |||||||||||
6.5% Senior Secured Notes due 2025 | |||||||||||
Tikon Loan | |||||||||||
Australian Government Loan | |||||||||||
Interest rate swaps | |||||||||||
Foreign currency contracts, net |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | |||||||||||||||||||
Additions | |||||||||||||||||||||||
Accretion expense | |||||||||||||||||||||||
Remeasurement/translation | ( | ( | ( | ||||||||||||||||||||
Other, including change in estimates | ( | ||||||||||||||||||||||
Settlements/payments | ( | ( | ( | ( | |||||||||||||||||||
Transferred with the divestiture of Ashtabula | ( | ||||||||||||||||||||||
Transferred in with the acquisition of Cristal | ( | ||||||||||||||||||||||
Other acquisition and divestiture related | |||||||||||||||||||||||
Balance, September 30, | $ | $ | $ | $ |
September 30, 2020 | December 31, 2019 | ||||||||||
Current portion included in “Accrued liabilities” | $ | $ | |||||||||
Noncurrent portion included in “Asset retirement obligations” | |||||||||||
Asset retirement obligations | $ | $ |
Cumulative Translation Adjustment | Pension Liability Adjustment | Unrealized Gains (Losses) on Hedges | Total | ||||||||||||||||||||
Balance, June 30, 2020 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) | |||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | ( | ||||||||||||||||||||||
Balance, September 30, 2020 | $ | ( | $ | ( | $ | ( | $ | ( |
Cumulative Translation Adjustment | Pension Liability Adjustment | Unrealized Gains (Losses) on Hedges | Total | ||||||||||||||||||||
Balance, June 30, 2019 | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | |||||||||||||||||||||||
Balance, September 30, 2019 | $ | ( | $ | ( | $ | ( | $ | ( |
Cumulative Translation Adjustment | Pension Liability Adjustment | Unrealized Gains (Losses) on Hedges | Total | ||||||||||||||||||||
Balance, January 1, 2020 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Other comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | |||||||||||||||||||||||
Balance, September 30, 2020 | $ | ( | $ | ( | $ | ( | $ | ( |
Cumulative Translation Adjustment | Pension Liability Adjustment | Unrealized Gains (Losses) on Hedges | Total | ||||||||||||||||||||
Balance, January 1, 2019 | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
Other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | |||||||||||||||||||||||
Acquisition of noncontrolling interest | ( | ( | |||||||||||||||||||||
Balance, September 30, 2019 | $ | ( | $ | ( | $ | ( | $ | ( |
2020 | |||||
Dividend yield | % | ||||
Expected historical volatility | % | ||||
Risk free interest rate | % | ||||
Expected life (in years) |
Pensions | Pensions | ||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net periodic cost: | |||||||||||||||||||||||
Service cost | $ | $ | $ | $ | |||||||||||||||||||
Interest cost | |||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ( | |||||||||||||||||||
Net amortization of actuarial loss and prior service credit | |||||||||||||||||||||||
Total net periodic cost | $ | $ | $ | $ |
Reported Amounts | Pro Forma Amounts (1) | ||||||||||||||||||||||||||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | Variance | 2020 | 2019 | Variance | ||||||||||||||||||||||||||||||
Net sales | $ | 675 | $ | 768 | $ | (93) | $ | 675 | $ | 768 | $ | (93) | |||||||||||||||||||||||
Cost of goods sold | 536 | 635 | (99) | 536 | 595 | (59) | |||||||||||||||||||||||||||||
Contract loss | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Gross profit | 139 | 133 | 6 | 139 | 173 | (34) | |||||||||||||||||||||||||||||
Gross Margin | 21 | % | 17 | % | 4 pts | 21 | % | 23 | % | (2) pts | |||||||||||||||||||||||||
Selling, general and administrative expenses | 89 | 82 | 7 | 89 | 82 | 7 | |||||||||||||||||||||||||||||
Restructuring | 1 | 3 | (2) | 1 | 3 | (2) | |||||||||||||||||||||||||||||
Income from operations | 49 | 48 | 1 | 49 | 88 | (39) | |||||||||||||||||||||||||||||
Interest expense | (48) | (51) | (3) | (48) | (51) | (3) | |||||||||||||||||||||||||||||
Interest income | 1 | 4 | (3) | 1 | 4 | (3) | |||||||||||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | — | — | — | |||||||||||||||||||||||||||||
Other income (expense), net | 7 | (1) | 8 | 7 | (1) | 8 | |||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 9 | — | 9 | 9 | 40 | (31) | |||||||||||||||||||||||||||||
Income tax benefit (provision) | 893 | (12) | (905) | 893 | (14) | (907) | |||||||||||||||||||||||||||||
Net income (loss) from continuing operations | $ | 902 | $ | (12) | $ | 914 | $ | 902 | $ | 26 | $ | 876 | |||||||||||||||||||||||
Effective tax rate | (9,922) | % | N/A | (9,922) | % | 35 | % | ||||||||||||||||||||||||||||
EBITDA (2) | $ | 132 | $ | 121 | $ | 11 | $ | 132 | $ | 161 | $ | (29) | |||||||||||||||||||||||
Adjusted EBITDA (2) | $ | 148 | $ | 184 | $ | (36) | $ | 148 | $ | 184 | $ | (36) | |||||||||||||||||||||||
Adjusted EBITDA as% of Net Sales | 22 | % | 24 | % | (2) pts | 22 | % | 24 | % | (2) pts |
Three Months Ended September 30, | |||||||||||||||||||||||
2020 | 2019 | Variance | Percentage | ||||||||||||||||||||
TiO2 | $ | 543 | $ | 603 | $ | (60) | (10) | % | |||||||||||||||
Zircon | 56 | 68 | (12) | (18) | % | ||||||||||||||||||
Feedstock and other products | 76 | 97 | (21) | (22) | % | ||||||||||||||||||
Total net sales | $ | 675 | $ | 768 | $ | (93) | (12) | % |
Reported Amounts | Pro Forma Amounts (1) | ||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
2020 | 2019 | Variance | 2020 | 2019 | Variance | ||||||||||||||||||||||||||||||
Net sales | $ | 1,975 | $ | 1,949 | $ | 26 | $ | 1,975 | $ | 2,315 | $ | (340) | |||||||||||||||||||||||
Cost of goods sold | 1,532 | 1,614 | (82) | 1,532 | 1,822 | (290) | |||||||||||||||||||||||||||||
Contract loss | — | 19 | (19) | — | — | — | |||||||||||||||||||||||||||||
Gross profit | 443 | 316 | 127 | 443 | 493 | (50) | |||||||||||||||||||||||||||||
Gross Margin | 22 | % | 16 | % | 6 pts | 22 | % | 21 | % | 1 pts | |||||||||||||||||||||||||
Selling, general and administrative expenses | 263 | 252 | 11 | 263 | 262 | 1 | |||||||||||||||||||||||||||||
Restructuring | 3 | 13 | (10) | 3 | 13 | (10) | |||||||||||||||||||||||||||||
Income from operations | 177 | 51 | 126 | 177 | 218 | (41) | |||||||||||||||||||||||||||||
Interest expense | (140) | (154) | (14) | (140) | (160) | (20) | |||||||||||||||||||||||||||||
Interest income | 6 | 16 | (10) | 6 | 10 | (4) | |||||||||||||||||||||||||||||
Loss on extinguishment of debt | — | (2) | (2) | — | (2) | (2) | |||||||||||||||||||||||||||||
Other income, net | 19 | 2 | 17 | 19 | 1 | 18 | |||||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | 62 | (87) | 149 | 62 | 67 | (5) | |||||||||||||||||||||||||||||
Income tax (provision) benefit | 876 | (10) | (886) | 876 | (27) | (903) | |||||||||||||||||||||||||||||
Net (loss) income from continuing operations | $ | 938 | $ | (97) | $ | 1,035 | $ | 938 | $ | 40 | $ | 898 | |||||||||||||||||||||||
Effective tax rate | (1,413) | % | 11 | % | (1,413) | % | 40 | % | |||||||||||||||||||||||||||
EBITDA (2) | $ | 415 | $ | 256 | $ | 159 | $ | 415 | $ | 465 | $ | (50) | |||||||||||||||||||||||
Adjusted EBITDA (2) | $ | 464 | $ | 459 | $ | 5 | $ | 464 | $ | 525 | $ | (61) | |||||||||||||||||||||||
Adjusted EBITDA as% of Net Sales | 23 | % | 24 | % | (1) pts | 23 | % | 23 | % | 0 pts |
Nine Months Ended September 30, | |||||||||||||||||||||||
2020 | 2019 | Variance | Percentage | ||||||||||||||||||||
TiO2 | $ | 1,589 | $ | 1,505 | $ | 84 | 6 | % | |||||||||||||||
Zircon | 189 | 220 | (31) | (14) | % | ||||||||||||||||||
Feedstock and other products | 197 | 224 | (27) | (12) | % | ||||||||||||||||||
Total net sales | $ | 1,975 | $ | 1,949 | $ | 26 | 1 | % |
Nine Months Ended September 30, | |||||||||||||||||||||||
(Millions of dollars) | 2020 | 2019 | Variance | Percentage | |||||||||||||||||||
TiO2 | $ | 1,589 | $ | 1,830 | $ | (241) | (13) | % | |||||||||||||||
Zircon | 189 | 239 | (50) | (21) | % | ||||||||||||||||||
Feedstock and other products | 197 | 246 | (49) | (20) | % | ||||||||||||||||||
Total net sales | $ | 1,975 | $ | 2,315 | $ | (340) | (15) | % |
September 30, 2020 | December 31, 2019 | ||||||||||
(Millions of U.S. dollars) | |||||||||||
Cash and cash equivalents | $ | 722 | $ | 302 | |||||||
Available under the Wells Fargo Revolver | 253 | 209 | |||||||||
Available under the Standard Credit Facility | 60 | 72 | |||||||||
Available under the Emirates Revolver | 50 | 46 | |||||||||
Available under the SABB Facility | 13 | 19 | |||||||||
Total | $ | 1,098 | $ | 648 |
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
(Millions of U.S. dollars) | |||||||||||
Cash provided by operating activities - continuing operations | $ | 156 | $ | 237 | |||||||
Cash used in investing activities - continuing operations | (151) | (1,120) | |||||||||
Cash provided by (used in) financing activities - continuing operations | 440 | (517) | |||||||||
Net cash provided by discontinued operations | — | 28 | |||||||||
Effects of exchange rate changes on cash and cash equivalents and restricted cash | (7) | (8) | |||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 438 | $ | (1,380) |
Nine Months Ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
(Millions of U.S. dollars) | |||||||||||
Net income (loss) from continuing operations | $ | 938 | $ | (97) | |||||||
Adjustments for non-cash items | (597) | 364 | |||||||||
Income related cash generation | 341 | 267 | |||||||||
Net change in assets and liabilities | (185) | (30) | |||||||||
Cash provided by operating activities - continuing operations | $ | 156 | $ | 237 |
Contractual Obligation Payments Due by Year (3)(4) | |||||||||||||||||||||||||||||
Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||||||||||||
(Millions of U.S. dollars) | |||||||||||||||||||||||||||||
Long-term debt, net and lease financing (including interest) (1) | $ | 4,347 | 236 | 419 | 2,590 | 1,102 | |||||||||||||||||||||||
Purchase obligations (2) | 532 | 147 | 140 | 97 | 148 | ||||||||||||||||||||||||
Operating leases | 207 | 43 | 47 | 24 | 93 | ||||||||||||||||||||||||
Asset retirement obligations and environmental liabilities(5) | 414 | 8 | 32 | 29 | 345 | ||||||||||||||||||||||||
Total | $ | 5,500 | 434 | 638 | 2,740 | 1,688 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Millions of U.S. dollars) | |||||||||||||||||||||||
Net income (loss) (U.S. GAAP) | $ | 902 | $ | (6) | $ | 938 | $ | (92) | |||||||||||||||
Loss from discontinued operations, net of tax (see Note 2) (U.S. GAAP) | — | 6 | — | 5 | |||||||||||||||||||
Net income (loss) from continuing operations (U.S. GAAP) | 902 | (12) | 938 | (97) | |||||||||||||||||||
Interest expense | 48 | 51 | 140 | 154 | |||||||||||||||||||
Interest income | (1) | (4) | (6) | (16) | |||||||||||||||||||
Income tax provision (benefit) | (893) | 12 | (876) | 10 | |||||||||||||||||||
Depreciation, depletion and amortization expense | 76 | 74 | 219 | 205 | |||||||||||||||||||
EBITDA (non-U.S. GAAP) | 132 | 121 | 415 | 256 | |||||||||||||||||||
Inventory step-up (a) | — | 40 | — | 95 | |||||||||||||||||||
Contract loss (b) | — | — | — | 19 | |||||||||||||||||||
Share-based compensation (c) | 8 | 9 | 19 | 24 | |||||||||||||||||||
Transaction costs (d) | 6 | — | 10 | 29 | |||||||||||||||||||
Restructuring (e) | 1 | 3 | 3 | 13 | |||||||||||||||||||
Integration costs (f) | 1 | 4 | 10 | 8 | |||||||||||||||||||
Loss on extinguishment of debt (g) | — | — | — | 2 | |||||||||||||||||||
Foreign currency remeasurement (h) | (2) | (1) | (10) | (5) | |||||||||||||||||||
Charge for capital gains tax payment to Exxaro (i) | — | 4 | — | 6 | |||||||||||||||||||
Other items (j) | 2 | 4 | 17 | 12 | |||||||||||||||||||
Adjusted EBITDA (non-U.S. GAAP) | $ | 148 | $ | 184 | $ | 464 | $ | 459 | |||||||||||||||
(a) 2019 amount represents a pre-tax charge related to the recognition of a step-up in value of inventories as a result of purchase accounting. | |||||||||||||||||||||||
(b) 2019 amount represents a pre-tax charge for the estimated losses we expect to incur under the supply agreement with Venator. See Note 2 of notes to unaudited condensed consolidated financial statements. | |||||||||||||||||||||||
(c) Represents non-cash share-based compensation. See Note 19 of notes to unaudited condensed consolidated financial statements. | |||||||||||||||||||||||
(d) 2020 and 2019 amounts represent transaction costs associated with the TTI Transaction and Cristal Transaction, respectively, which were recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations. | |||||||||||||||||||||||
(e) Represents amounts for employee-related costs, including severance. See Note 3 of notes to unaudited condensed consolidated financial statements. | |||||||||||||||||||||||
(f) Represents integration costs associated with the Cristal acquisition after the acquisition which were recorded in “Selling, general and administrative expenses” in the unaudited Condensed Consolidated Statements of Operations. | |||||||||||||||||||||||
(g) 2019 amount represents the loss in connection with the modification of the Wells Fargo Revolver and termination of the ABSA Revolver. | |||||||||||||||||||||||
(h) 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. | |||||||||||||||||||||||
(i) Represents the payment owed to Exxaro for capital gains tax on the disposal of its ordinary shares in Tronox Holdings plc included in and “Other income (expense), net” in the unaudited Condensed Consolidated Statements of Operations. | |||||||||||||||||||||||
(j) Includes noncash pension and postretirement costs, asset write-offs, 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. |
Pro Forma Three Months Ended September 30, | Pro Forma Nine Months Ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(Millions of U.S. dollars) | |||||||||||||||||||||||
Net income from continuing operations (U.S. GAAP) | $ | 902 | $ | 26 | $ | 938 | $ | 40 | |||||||||||||||
Interest expense | 48 | 51 | 140 | 160 | |||||||||||||||||||
Interest income | (1) | (4) | (6) | (10) | |||||||||||||||||||
Income tax provision (benefit) | (893) | 14 | (876) | 27 | |||||||||||||||||||
Depreciation, depletion and amortization expense | 76 | 74 | 219 | 248 | |||||||||||||||||||
EBITDA (non-U.S. GAAP) | 132 | 161 | 415 | 465 | |||||||||||||||||||
Share-based compensation | 8 | 9 | 19 | 24 | |||||||||||||||||||
Transaction costs | 6 | — | 10 | — | |||||||||||||||||||
Restructuring | 1 | 3 | 3 | 13 | |||||||||||||||||||
Integration costs | 1 | 4 | 10 | 8 | |||||||||||||||||||
Loss on extinguishment of debt | — | — | — | 2 | |||||||||||||||||||
Foreign currency remeasurement | (2) | (1) | (10) | (5) | |||||||||||||||||||
Charge for capital gains tax payment to Exxaro | — | 4 | — | 6 | |||||||||||||||||||
Other items | 2 | 4 | 17 | 12 | |||||||||||||||||||
Adjusted EBITDA (non-U.S. GAAP) | $ | 148 | $ | 184 | $ | 464 | $ | 525 |
Pro Forma Adjustments | |||||||||||||||||||||||||||||
Tronox Holdings plc | Cristal | Other | Total | Pro Forma | |||||||||||||||||||||||||
Net sales | $ | 768 | $ | — | $ | — | $ | — | $ | 768 | |||||||||||||||||||
Cost of goods sold | 635 | — | (40) | (a) | (40) | 595 | |||||||||||||||||||||||
Contract loss | — | — | — | — | — | ||||||||||||||||||||||||
Gross profit | 133 | — | 40 | 40 | 173 | ||||||||||||||||||||||||
Selling, general and administrative expenses | 82 | — | — | — | 82 | ||||||||||||||||||||||||
Restructuring | 3 | — | — | — | 3 | ||||||||||||||||||||||||
Income from operations | 48 | — | 40 | 40 | 88 | ||||||||||||||||||||||||
Interest expense | (51) | — | — | — | (51) | ||||||||||||||||||||||||
Interest income | 4 | — | — | — | 4 | ||||||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | — | — | ||||||||||||||||||||||||
Other income (expense), net | (1) | — | — | — | (1) | ||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | — | — | 40 | 40 | 40 | ||||||||||||||||||||||||
Income tax (provision) benefit | (12) | — | (2) | (2) | (14) | ||||||||||||||||||||||||
Net income (loss) from continuing operations | (12) | — | 38 | 38 | 26 | ||||||||||||||||||||||||
Net income attributable to noncontrolling interest | 7 | — | — | — | 7 | ||||||||||||||||||||||||
Net income (loss) from continuing operations attributable to Tronox Holdings plc | $ | (19) | $ | — | $ | 38 | $ | 38 | $ | 19 | |||||||||||||||||||
Net income (loss) from continuing operations per share, basic | $ | (0.13) | $ | 0.13 | |||||||||||||||||||||||||
Net income (loss) from continuing operations per share, diluted | $ | (0.13) | $ | 0.13 | |||||||||||||||||||||||||
Weighted average shares outstanding, basic (in thousands) | 142,278 | 142,278 | |||||||||||||||||||||||||||
Weighted average shares outstanding, diluted (in thousands) | 142,278 | 142,984 | |||||||||||||||||||||||||||
Pro Forma Adjustments | |||||||||||||||||||||||||||||
(a) The adjustment to cost of goods sold is for the reversal of $40 million related to the amortizing of the step-up in value of inventory. For pro forma purposes this item is pushed back to the first quarter of 2018. | |||||||||||||||||||||||||||||
Pro Forma Adjustments | |||||||||||||||||||||||||||||
Tronox Holdings plc | Cristal (a) | Other | Total | Pro Forma | |||||||||||||||||||||||||
Net sales | $ | 1,949 | $ | 379 | $ | (13) | (b) | $ | 366 | $ | 2,315 | ||||||||||||||||||
Cost of goods sold | 1,614 | 294 | (86) | (c) | 208 | 1,822 | |||||||||||||||||||||||
Contract loss | 19 | — | (19) | (d) | (19) | — | |||||||||||||||||||||||
Gross profit | 316 | 85 | 92 | 177 | 493 | ||||||||||||||||||||||||
Selling, general and administrative expenses | 252 | 59 | (49) | (e) | 10 | 262 | |||||||||||||||||||||||
Restructuring | 13 | — | — | — | 13 | ||||||||||||||||||||||||
Income from operations | 51 | 26 | 141 | 167 | 218 | ||||||||||||||||||||||||
Interest expense | (154) | (5) | (1) | (f) | (6) | (160) | |||||||||||||||||||||||
Interest income | 16 | — | (6) | (g) | (6) | 10 | |||||||||||||||||||||||
Loss on extinguishment of debt | (2) | — | — | — | (2) | ||||||||||||||||||||||||
Other income (expense), net | 2 | (1) | — | (1) | 1 | ||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | (87) | 20 | 134 | 154 | 67 | ||||||||||||||||||||||||
Income tax (provision) benefit | (10) | (4) | (13) | (17) | (27) | ||||||||||||||||||||||||
Net income (loss) from continuing operations | (97) | 16 | 121 | 137 | 40 | ||||||||||||||||||||||||
Net income attributable to noncontrolling interest | 17 | 1 | — | 1 | 18 | ||||||||||||||||||||||||
Net income (loss) from continuing operations attributable to Tronox Holdings plc | $ | (114) | $ | 15 | $ | 121 | $ | 136 | $ | 22 | |||||||||||||||||||
Net income (loss) from continuing operations per share, basic | $ | (0.82) | $ | 0.14 | |||||||||||||||||||||||||
Net income (loss) from continuing operations per share, diluted | $ | (0.82) | $ | 0.14 | |||||||||||||||||||||||||
Weighted average shares outstanding, basic (in thousands) | 139,158 | 152,786 | |||||||||||||||||||||||||||
Weighted average shares outstanding, diluted (in thousands) | 139,158 | 153,916 | |||||||||||||||||||||||||||
Pro Forma Adjustments | |||||||||||||||||||||||||||||
(a) Includes results from continuing operations for Cristal for period of January 1, 2019 through April 9, 2019. The Cristal Transaction closed on April 10, 2019. | |||||||||||||||||||||||||||||
(b) The adjustment to net sales includes $11 million to eliminate sales between Tronox and Cristal and $2 million to eliminate revenue associated with the divestiture of the 8120 paper laminate product grade. | |||||||||||||||||||||||||||||
(c) The adjustment to cost of goods sold includes (i) a credit of $11 million for the elimination of sales between Tronox and Cristal, (ii) a decrease of $1 million for the decrease in DD&A expense as a result of fair value adjustments to property, plant and equipment and mineral leases, (iii) a credit of $95 million related to the amortizing of the step-up in value of inventory. For pro forma purposes, this item was pushed back to the first quarter of 2018. Cost of goods sold also includes a reclassification of expenses of $21 million from SG&A to cost of goods sold for distribution costs as part of our accounting policy alignment. | |||||||||||||||||||||||||||||
(d) The adjustment is for the elimination of $19 million in non-recurring contract losses incurred on the 8120 supply agreement with Venator. |
(e) The adjustment to SG&A includes (i) the elimination of $30 million in non-recurring acquisition-related transaction costs incurred, (2) the reclassification of $21 million in expenses from SG&A to cost of goods sold, and (3) a $2 million increase in amortization expense as a result of fair value adjustments to intangible assets. | |||||||||||||||||||||||||||||
(f) The adjustment to interest expense of $1 million reflects interest incurred on incremental borrowings under the Wells Fargo Revolver used to close the Cristal acquisition. | |||||||||||||||||||||||||||||
(g) The adjustment to interest income of $6 million reflects the elimination of interest earned on cash balances that were used to acquire Cristal. |
Pro Forma Adjustments | |||||||||||||||||||||||||||||
Tronox Holdings plc | Cristal | Other | Total | Pro Forma | |||||||||||||||||||||||||
Net income (loss) from continuing operations (U.S. GAAP) | $ | (12) | $ | — | $ | 38 | $ | 38 | $ | 26 | |||||||||||||||||||
Interest expense | 51 | — | — | — | 51 | ||||||||||||||||||||||||
Interest income | (4) | — | — | — | (4) | ||||||||||||||||||||||||
Income tax provision (benefit) | 12 | — | 2 | 2 | 14 | ||||||||||||||||||||||||
Depreciation, depletion and amortization expense | 74 | — | — | — | 74 | ||||||||||||||||||||||||
EBITDA (non-U.S. GAAP) | 121 | — | 40 | 40 | 161 | ||||||||||||||||||||||||
Inventory step-up | 40 | — | (40) | (40) | — | ||||||||||||||||||||||||
Contract loss | — | — | — | — | — | ||||||||||||||||||||||||
Share-based compensation | 9 | — | — | — | 9 | ||||||||||||||||||||||||
Transaction costs | — | — | — | — | — | ||||||||||||||||||||||||
Restructuring | 3 | — | — | — | 3 | ||||||||||||||||||||||||
Integration costs | 4 | — | — | — | 4 | ||||||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | — | — | ||||||||||||||||||||||||
Foreign currency remeasurement | (1) | — | — | — | (1) | ||||||||||||||||||||||||
Charge for potential capital gains tax payment to Exxaro | 4 | — | — | — | 4 | ||||||||||||||||||||||||
Other items | 4 | — | — | — | 4 | ||||||||||||||||||||||||
Adjusted EBITDA (non-U.S. GAAP) | $ | 184 | $ | — | $ | — | $ | — | $ | 184 | |||||||||||||||||||
Pro Forma Adjustments | |||||||||||||||||||||||||||||
Tronox Holdings plc | Cristal (1) | Other | Total | Pro Forma | |||||||||||||||||||||||||
Net income (loss) from continuing operations (U.S. GAAP) | $ | (97) | $ | 18 | $ | 119 | $ | 137 | $ | 40 | |||||||||||||||||||
Interest expense | 154 | 5 | 1 | 6 | 160 | ||||||||||||||||||||||||
Interest income | (16) | — | 6 | 6 | (10) | ||||||||||||||||||||||||
Income tax provision (benefit) | 10 | 4 | 13 | 17 | 27 | ||||||||||||||||||||||||
Depreciation, depletion and amortization expense | 205 | 42 | 1 | 43 | 248 | ||||||||||||||||||||||||
EBITDA (non-U.S. GAAP) | 256 | 69 | 140 | 209 | 465 | ||||||||||||||||||||||||
Inventory step-up | 95 | — | (95) | (95) | — | ||||||||||||||||||||||||
Contract loss | 19 | — | (19) | (19) | — | ||||||||||||||||||||||||
Share-based compensation | 24 | — | — | — | 24 | ||||||||||||||||||||||||
Transaction costs | 29 | 1 | (30) | (29) | — | ||||||||||||||||||||||||
Restructuring | 13 | — | — | — | 13 | ||||||||||||||||||||||||
Integration costs | 8 | — | — | — | 8 | ||||||||||||||||||||||||
Loss on extinguishment of debt | 2 | — | — | — | 2 | ||||||||||||||||||||||||
Foreign currency remeasurement | (5) | — | — | — | (5) | ||||||||||||||||||||||||
Charge for potential capital gains tax payment to Exxaro | 6 | — | — | — | 6 | ||||||||||||||||||||||||
Other items | 12 | — | — | — | 12 | ||||||||||||||||||||||||
Adjusted EBITDA (non-U.S. GAAP) | $ | 459 | $ | 70 | $ | (4) | $ | 66 | $ | 525 | |||||||||||||||||||
(1) Includes results from continuing operations for Cristal for the period of January 1, 2019 through April 9, 2019. The Cristal Transaction closed on April 10, 2019. |
Exhibit No. | |||||
31.1 | |||||
31.2 | |||||
32.1 | |||||
32.2 | |||||
101 | The following financial statements from Tronox Holdings plc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations, (ii) Condensed Consolidated Balance Sheets, (iii) Condensed Consolidated Statements of Comprehensive Loss, (iv) Condensed Consolidated Statements of Changes in Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to Condensed Consolidated Financial Statements. | ||||
101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. (furnished herewith) | ||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. (furnished herewith) | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. (furnished herewith) | ||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. (furnished herewith) | ||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. (furnished herewith) | ||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. (furnished herewith) | ||||
104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2020, which has been formatted in Inline XBRL and contained in Exhibit 101. |
TRONOX HOLDINGS PLC (Registrant) | |||||
By: | /s/ Timothy Carlson | ||||
Name: | Timothy Carlson | ||||
Title: | Senior Vice President, Chief Financial Officer and Principal Accounting Officer |
Date: October 29, 2020 | ||
/s/ Jeffry N. Quinn | ||
Jeffry N. Quinn | ||
Chairman and Chief Executive Officer |
Date: October 29, 2020 | ||
/s/ Timothy Carlson | ||
Timothy Carlson | ||
Senior Vice President and Chief Financial Officer |
/s/ Jeffry N. Quinn | ||
Jeffry N. Quinn | ||
Chairman and Chief Executive Officer |
/s/ Timothy Carlson | ||
Timothy Carlson | ||
Senior Vice President and Chief Financial Officer |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) (Parenthetical) - USD ($) |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Statement of Comprehensive Income [Abstract] | ||||
Actuarial losses, tax benefit | $ 1,000,000 | $ 0 | $ 1,000,000 | $ 0 |
Amortization of unrecognized actuarial losses, tax benefit | 1,000,000 | 1,000,000 | 1,000,000 | 1,000,000 |
Unrealized gains (losses) on derivative instruments, tax expense (benefit) | $ 2,000,000 | $ 1,000,000 | $ (5,000,000) | $ 1,000,000 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
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Current Assets | ||
Accounts receivable, allowance for credit loss | $ 4 | $ 5 |
Shareholders’ Equity | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 143,530,571 | 141,900,459 |
Common stock, shares outstanding (in shares) | 143,530,571 | 141,900,459 |
The Company |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | The Company Tronox Holdings plc (referred to herein as "Tronox", "we", "us", or "our") operates titanium-bearing mineral sand mines and smelter operations in Australia, South Africa and Brazil to produce feedstock materials that can be processed into TiO2 for pigment, high purity titanium chemicals, including titanium tetrachloride, and Ultrafine© titanium dioxide used in certain specialty applications. It is our long-term strategic goal to be vertically integrated and consume all of our feedstock materials in our own nine TiO2 pigment facilities which we operate in the United States, Australia, Brazil, UK, France, the Netherlands, China and the Kingdom of Saudi Arabia (“KSA”). We believe that vertical integration is the best way to achieve our ultimate goal of delivering low cost, high-quality pigment to our coatings and other TiO2 customers throughout the world. The mining, beneficiation and smelting of titanium bearing mineral sands creates meaningful quantities of zircon, which we also supply to customers around the world. We are a public limited company registered under the laws of England and Wales. Tronox was formerly listed on the New York Stock Exchange as Tronox Limited, a company registered under the laws of Western Australia. However, in March 2019, we re-domiciled to the United Kingdom, and as a result of the re-domiciling, Tronox Limited became a wholly-owned subsidiary of Tronox Holdings plc. Another significant corporate milestone occurred on April 10, 2019 when we completed the acquisition from National Industrialization Company ("Tasnee") of the TiO2 business of The National Titanium Dioxide Company Limited (“Cristal”) (the “Cristal Transaction”). The Cristal Transaction doubled our size and expanded the number of TiO2 pigment facilities we operate from three to nine and gave us control of several new mines, particularly in Australia. In order to obtain regulatory approval for the Cristal Transaction, we were required to divest Cristal's North American TiO2 business, which was sold in May 2019. See Note 2 for further details on the Cristal Transaction. Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission regarding interim financial reporting. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. The acquisition of Cristal has impacted the comparability of our financial statements. As the Cristal Transaction was completed on April 10, 2019, in accordance with ASC 805, the nine month period ended September 30, 2019 includes the results of the Cristal business since the date of the acquisition, while both the three month periods ended September 30, 2020 and September 30, 2019 and the nine month period ended September 30, 2020 include the results of the combined business. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, considered necessary for a fair statement of its financial position as of September 30, 2020, and its results of operations for the three and nine months ended September 30, 2020 and 2019. Our unaudited condensed consolidated financial statements include the accounts of all majority-owned subsidiary companies. All intercompany balances and transactions have been eliminated in consolidation. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. It is at least reasonably possible that the effect on the financial statements of a change in estimate due to one or more future confirming events could have a material effect on the financial statements, including any potential impacts on the economy as a result of the Covid-19 pandemic which could impact revenue growth and collectibility of trade receivables. Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (“Topic 820”): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The standard modifies the disclosure requirements in Topic 820, Fair Value Measurement, by: removing certain disclosure requirements related to the fair value hierarchy; modifying existing disclosure requirements related to measurement uncertainty; and adding new disclosure requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019, with early adoption permitted. We adopted this standard on January 1, 2020 and it did not have a material impact on the Company's consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), as amended. The standard introduces a new accounting model for expected credit losses on financial instruments, including trade receivables, based on estimates of current expected credit losses (CECL). This standard became effective on January 1, 2020, and had an immaterial impact on the Company's consolidated financial statements as our historical bad debt expense has not been material. Recently Issued Accounting Pronouncements During the quarter ended March 31, 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform Financial Reporting.” This amendment is elective in nature. Amongst other aspects, this standard provides for practical expedients and exceptions to current accounting standards that reference a rate which is expected to be dissolved (e.g. London Interbank Offered Rate “LIBOR”) as it relates to hedge accounting, contract modifications and other transactions that reference this rate, subject to meeting certain criteria. The standard is effective for all entities as of March 12, 2020 through December 31, 2022. The company is currently evaluating the impact of the standard.
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Acquisitions and Related Divestitures |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Related Divestitures | Acquisitions and Related Divestitures TTI Acquisition In May 2020, the Company announced that it had signed a definitive agreement to acquire the Tizir Titanium and Iron ("TTI") business from Eramet S.A. for approximately $300 million in cash, plus 3% per annum which accrues for the period from January 1, 2020 until the transaction closes. TTI is a titanium smelter located in Tyssedal, Norway which upgrades ilmenite to produce high-grade titanium slag and high-purity pig iron with an annual capacity of approximately 230,000 tons and 90,000 tons, respectively. Pursuant to the definitive agreement, we are required to pay to Eramet S.A. a termination fee of $18 million if the agreement is terminated as a result of a failure to satisfy certain regulatory approvals prior to May 13, 2021 (the “Initial Long Stop Date”) or if all conditions to closing have been satisfied by such date, but we fail to comply with our completion obligations. The definitive agreement further provides that the Initial Long Stop Date may be extended by us until August 13, 2021 and then November 13, 2021 (each a “Long Stop Date Extension”), and that the termination payment shall be increased by $1 million following each Long Stop Date Extension, provided that the amount of such termination payment shall not exceed $20 million. During the second quarter of 2020, upon signing of the definitive agreement to acquire TTI, we placed $18 million into an escrow account with a third-party financial institution. At September 30, 2020, the amount is reflected within “Restricted cash” on the unaudited Condensed Consolidated Balance Sheet. The closing of the transaction, which we anticipate to occur before the Initial Long Stop Date, is subject to certain consents and customary closing conditions, including regulatory approvals. Cristal Acquisition and related divestitures On April 10, 2019, we completed the acquisition of the TiO2 business of Cristal for $1.675 billion of cash, plus 37,580,000 ordinary shares. The total acquisition price, including the value of the ordinary shares at $14 per share on the closing date of the Cristal Transaction, was approximately $2.2 billion. With the acquisition of our shares, an affiliate of Cristal became our largest shareholder. At September 30, 2020, Cristal International Holdings B.V. (formerly known as Cristal Inorganic Chemical Netherlands Cooperatief W.A.), a wholly-owned subsidiary of The National Titanium Dioxide Company Limited, continues to own 37,580,000 shares of Tronox, or a 26% ownership interest. The National Titanium Dioxide Company Limited is 79% owned by Tasnee. In order to obtain regulatory approval for the Cristal Transaction, the FTC required us to divest Cristal's North American TiO2 business, which we sold to INEOS on May 1, 2019, for cash proceeds, net of transaction costs, of $701 million, inclusive of an amount for a working capital adjustment. In conjunction with the Cristal Transaction, we entered into a transition services agreement with Tasnee and certain of its affiliates under which we and the Tasnee entities will provide certain transition services to one another. See Note 21 for further details of the transition services agreement. In conjunction with the divestiture of Cristal's North American TiO2 business to INEOS, we entered into a two-year transition services agreement with INEOS. Under the terms of the transition services agreement, INEOS agreed to provide services to Tronox for manufacturing, technology and innovation, information technology, finance, warehousing and human resources. Similarly, Tronox agreed to provide services to INEOS for information technology, finance, product stewardship, warehousing and human resources. In addition, in order to obtain regulatory approval by the European Commission, we divested the 8120 paper laminate grade, supplied from our Botlek facility in the Netherlands, to Venator Materials PLC (“Venator”). The divestiture was completed on April 26, 2019. Under the terms of the divestiture, we will supply the 8120 grade product to Venator under a supply agreement for an initial term of 2 years, and extendable up to 3 years, to allow for the transfer of the manufacturing of the 8120 grade to Venator. Total cash consideration is 8 million Euros, of which 1 million Euros was paid at the closing and 3.5 million Euros (or approximately $3.9 million) was received during the second quarter of 2020. The remaining 3.5 million Euros (or approximately $4.1 million at September 30, 2020 exchange rate) will be paid in the second quarter of 2021. We recorded a charge of $19 million during the second quarter of 2019, in “Contract loss” in the Consolidated Statements of Operations, reflecting both the proceeds on sale and the estimated losses we expect to incur under the supply agreement with Venator. We funded the cash portion of the Cristal Transaction through existing cash, borrowings from our Wells Fargo Revolver, and restricted cash which had been borrowed under the Blocked Term Loan (as defined elsewhere herein) and which became available to us for the purpose of consummating the Cristal Transaction. Allocation of the Purchase Price For the Cristal Transaction, we have applied the acquisition method of accounting in accordance with ASC 805, "Business Combinations", with respect to the identifiable assets and liabilities of Cristal, which have been measured at estimated fair value as of the date of the business combination. The aggregate purchase price noted above was allocated to the identifiable assets acquired and liabilities assumed based upon their estimated fair values at the acquisition date, primarily using Level 2 and Level 3 inputs (see Note 15 for an explanation of Level 2 and Level 3 inputs). These fair value estimates represent management’s best estimate of future cash flows (including sales, cost of sales, income taxes, etc.), discount rates, competitive trends, market comparables and other factors. Inputs used were generally determined from historical data supplemented by current and anticipated market conditions and growth rates. During the first quarter of 2020, we finalized the purchase price allocation which resulted in increasing environmental liabilities by $8 million, increasing property, plant and equipment by $13 million, decreasing noncontrolling interest by $3 million, decreasing deferred taxes by $6 million, increasing liabilities held for sale by $5 million and decreasing inventory by $4 million, as well as other minor adjustments. The adjustments to the unaudited Condensed Consolidated Statement of Operations that would have been recognized in the second quarter of 2019 if the measurement period adjustments had been completed as of the acquisition date would have increased the net loss by approximately $1 million. The final purchase price consideration and estimated fair value of Cristal's net assets acquired on April 10, 2019 are shown below. The assets and liabilities of Cristal's North American TiO2 business, that was subsequently divested on May 1, 2019, are shown as held for sale in the fair value of assets acquired and liabilities assumed.
Summary of Significant Fair Value Methods The methods used to determine the fair value of significant identifiable assets and liabilities included in the allocation of purchase price are included in Note 3 to the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. Supplemental Pro forma financial information The following unaudited pro forma information gives effect to the Cristal Transaction as if it had occurred on January 1, 2018. The unaudited pro forma financial information reflects certain adjustments related to the acquisition, such as: (1)conforming the accounting policies of Cristal to those applied by Tronox; (2)conversion to U.S. GAAP from IFRS for Cristal; (3)the elimination of transactions between Tronox and Cristal; (4)recording certain incremental expenses resulting from purchase accounting adjustments, such as inventory step-up amortization, depreciation, depletion and amortization expense in connection with fair value adjustments to property, plant and equipment, mineral leases and intangible assets; (5)recording the contract loss on the sale of the 8120 product line as a charge in the first quarter of 2018; (6)recording all transaction costs incurred in the first quarter of 2018; (7)recording the effect on interest expense related to borrowings in connection with the Cristal Transaction; and (8)recording the related tax effects and the impacts to EPS for the shares issued in conjunction with the transaction. The unaudited pro forma financial information should not be relied upon as being indicative of the historical results that would have been obtained if the Cristal Transaction had actually occurred on that date, nor the results of operations in the future. In accordance with ASC 805, the supplemental pro forma results of operations for the three and nine months ended September 30, 2019, which were updated subsequently to reflect final purchase price allocation adjustments, are as follows:
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Restructuring Initiatives |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Initiatives | Restructuring Initiatives In April 2019, we announced the completion of the Cristal Transaction. During the second quarter of 2019, as a result of the acquisition, we outlined a broad based synergy savings program that is expected to reduce costs, simplify processes and focus the organization’s structure and resources on key growth initiatives. During the three and nine months ended September 30, 2020, we recorded costs of $1 million and $3 million, respectively, in our unaudited Condensed Consolidated Statement of Operations. For both the three and nine months ended September 30, 2019, we recorded costs of $3 million and $13 million, respectively, in our unaudited Condensed Consolidated Statement of Operations. The costs consisted primarily of charges for employee related costs, including severance. The liability balance for restructuring as of September 30, 2020, is as follows:
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Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue We recognize revenue at a point in time when the customer obtains control of the promised products. For most transactions this occurs when products are shipped from our manufacturing facilities or at a later point when control of the products transfers to the customer at a specified destination or time. Contract assets represent our rights to consideration in exchange for products that have transferred to a customer when the right is conditional on situations other than the passage of time. For products that we have transferred to our customers, our rights to the consideration are typically unconditional and only the passage of time is required before payments become due. These unconditional rights are recorded as accounts receivable. As of September 30, 2020, and December 31, 2019, we did not have material contract asset balances. Contract liabilities represent our obligations to transfer products to a customer for which we have received consideration from the customer. Infrequently we may receive advance payment from our customers that is accounted for as deferred revenue. Deferred revenue is earned when control of the product transfers to the customer, which is typically within a short period of time from when we received the advanced payment. Contract liability balances as of September 30, 2020 and December 31, 2019 were approximately $3 million and $1 million, respectively. Contract liability balances were reported as “Accounts payable” in the unaudited Condensed Consolidated Balance Sheets. All contract liabilities as of December 31, 2019 were recognized as revenue in “Net sales” in the unaudited Condensed Consolidated Statements of Operations during the first quarter of 2020. Disaggregation of Revenue We operate under one operating and reportable segment, TiO2. We disaggregate our revenue from contracts with customers by product type and geographic area. We believe this level of disaggregation appropriately depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors and reflects how our business is managed. Net sales to external customers by geographic areas where our customers are located were as follows:
Net sales from external customers for each similar type of product were as follows:
Feedstock and other products mainly include rutile prime, ilmenite, chloride (“CP”) slag, pig iron and other mining products. During the nine months ended September 30, 2020 and 2019, our ten largest third-party TiO2 customers represented 33% and 32%, respectively, of our consolidated net sales. During the nine months ended September 30, 2020 and 2019, no single customer accounted for 10% of our consolidated net sales.
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Discontinued Operations |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | Discontinued Operations As discussed in Note 2, the Company divested Cristal's North American TiO2 business to INEOS on May 1, 2019, for cash proceeds, net of transaction costs, of $701 million, inclusive of an amount for a working capital adjustment. The operating results of Cristal’s North American TiO2 business from the acquisition date to the date of divestiture are included in a single caption entitled “Net income (loss) from discontinued operations, net of tax” in our unaudited Condensed Consolidated Statements of Operations. The following table presents a summary of operations of Cristal’s North American TiO2 business and Cristal Metals line items constituting the "Income from discontinued operations, net of tax" in our unaudited Condensed Consolidated Statements of Operations:
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Our operations are conducted through various subsidiaries in a number of countries throughout the world. We have provided for income taxes based upon the tax laws and rates in the countries in which operations are conducted and income is earned. Income (loss) from continuing operations before income taxes is comprised of the following:
Tronox Holdings plc, a U.K. public limited company, became the public parent during the three months ended March 31, 2019. Prior to the three months ended March 31, 2019, Tronox Limited was the public parent, registered under the laws of the State of Western Australia but managed and controlled in the U.K. The statutory tax rate in the U.K. at both September 30, 2020 and 2019 was 19%. The large negative effective tax rates for both the three and nine months ended September 30, 2020 are caused by the release of a $895 million valuation allowance in the U.S. All periods in 2020 and 2019 are additionally influenced by a variety of factors, primarily income and losses in jurisdictions with full valuation allowances, disallowable expenditures, restructuring impacts, and our jurisdictional mix of income at tax rates different than the U.K. statutory rate. At each reporting date, we perform an analysis to determine the likelihood of realizing our deferred tax assets and whether a valuation allowance is required or sufficient evidence exists to support the reversal of all or a portion of a valuation allowance. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income (including the reversals of deferred tax liabilities) during the periods in which those deferred tax assets will become deductible. Our analysis takes into consideration all available positive and negative evidence, including prior operating results, the nature and reason for any losses, our forecast of future taxable income, utilization of tax planning strategies, and the dates on which any deferred tax assets are expected to expire. These assumptions and estimates require a significant amount of judgment and are made based on current and projected circumstances and conditions. During the three months ended September 30, 2020, we determined sufficient positive evidence existed to reverse a portion of the valuation allowance attributable to the deferred tax assets associated with our operations in the U.S. This reversal resulted in a non-cash deferred tax benefit of $895 million. Our analysis considered all positive and negative evidence, including (i) three years of cumulative income for our U.S. subsidiaries, (ii) our continuing and improved profitability over the last twelve months in this jurisdiction, (iii) estimates of continued profitability based on updates to our latest forecasts, (iv) changes in the factors that drove losses in the past, primarily interest expenses incurred in the U.S, and (v) risk that certain deferred tax assets may be subject to limitation under IRC Section 382. Based on this analysis, we concluded that it was more likely than not that our U.S. subsidiaries will be able to utilize all of their deferred tax assets with an indefinite life. A portion of the U.S. deferred tax assets are attributable to net operating losses (NOLs) incurred in prior years which are subject to expiration in future years. Our analysis did not support that these limited-life NOLs would be utilized before their expiration, and it is against these deferred tax assets in the U.S. that the Company continues to carry a valuation allowance with a current estimated value of $1,067 million. We continue to maintain full valuation allowances related to the total net deferred tax assets in Australia, Belgium, Brazil, and Switzerland, as we cannot objectively assert that these deferred tax assets are more likely than not to be realized. It is reasonably possible that a portion of these valuation allowances could be reversed within the next year due to increased profitability levels. Until these valuation allowances are eliminated, future provisions for income taxes for these jurisdictions will include no tax benefits with respect to losses incurred and tax expense only to the extent of current tax payments. Additionally, we have valuation allowances against specific tax assets in the Netherlands, South Africa, the U.K., and the U.S. We currently have no uncertain tax positions recorded; however, we continue to evaluate the companies acquired in the Cristal Transaction, and it is reasonably possible that this could change in the next 12 months. The Company was advised that the Australian Taxation Office has commenced a tax audit for certain fiscal periods prior to the closing of the Cristal Transaction and extending through 2019. The ultimate outcome of such an audit is not presently known. Cristal is obligated to indemnify us for pre-closing tax liabilities on any assessment associated with this audit. We believe that we have made adequate provision for income taxes that may be payable with respect to years open for examination; however, the ultimate outcome is not presently known and, accordingly, adjustments to our provisions may be necessary and/or reclassifications of noncurrent tax liabilities to current may occur in the future.
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Income (Loss) Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income (Loss) Per Share | Income (Loss) Per Share The computation of basic and diluted loss per share for the periods indicated is as follows:
Net income (loss) per ordinary share amounts were calculated from exact, not rounded net income (loss) and share information. Anti-dilutive shares not recognized in the diluted net income (loss) per share calculation for the three and nine months ended September 30, 2020 and 2019 were as follows:
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Inventories, Net |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories, Net | Inventories, Net Inventories, net consisted of the following:
Materials and supplies, net consists of processing chemicals, maintenance supplies and spare parts, which will be consumed directly and indirectly in the production of our products. At September 30, 2020 and December 31, 2019, inventory obsolescence reserves primarily for materials and supplies were $42 million and $39 million, respectively. Reserves for lower of cost or market and net realizable value were $34 million and $25 million at September 30, 2020 and December 31, 2019, respectively.
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Property, Plant and Equipment, Net |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, plant and equipment, net of accumulated depreciation, consisted of the following:
Substantially all of the property, plant and equipment, net is pledged as collateral for our debt. See Note 13. The table below summarizes depreciation expense related to property, plant and equipment for the periods presented, recorded in the specific line items in our unaudited Condensed Consolidated Statements of Operations:
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Mineral Leaseholds, Net |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Extractive Industries [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mineral Leaseholds, Net | Mineral Leaseholds, Net Mineral leaseholds, net of accumulated depletion, consisted of the following:
The decline in mineral leaseholds, net from December 31, 2019 to September 30, 2020 is primarily a result of the impact of foreign currency translation due to the devaluation of the South African Rand. Depletion expense relating to mineral leaseholds recorded in “Cost of goods sold” in the unaudited Condensed Consolidated Statements of Operations was $11 million and $21 million during the three months ended September 30, 2020 and 2019, respectively. Depletion expense relating to mineral leaseholds recorded in "Cost of goods sold" in the unaudited Condensed Consolidated Statements of Operations was $25 million and $46 million during the nine months ended September 30, 2020 and 2019, respectively.
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Intangible Assets, Net |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets, Net | Intangible Assets, Net Intangible assets, net of accumulated amortization, consisted of the following:
As of September 30, 2020, internal-use software included approximately $14 million of capitalized software costs which are not being amortized as the software is not ready for its intended use. The table below summarizes amortization expense related to intangible assets for the periods presented, recorded in the specific line items in our unaudited Condensed Consolidated Statements of Operations:
Estimated future amortization expense related to intangible assets is $8 million for the remainder of 2020, $32 million for 2021, $30 million for 2022, $28 million for 2023, $27 million for 2024 and $78 million thereafter.
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Balance Sheet and Cash Flow Supplemental Information |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet and Cash Flow Supplemental Information | Balance Sheet and Cash Flow Supplemental Information Accrued liabilities consisted of the following:
Additional supplemental cash flow information for the nine months ended September 30, 2020 and 2019 and as of September 30, 2020 and December 31, 2019 is as follows:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Long-Term Debt Long-term debt, net of an unamortized discount and debt issuance costs, consisted of the following:
_______________ (1)Average effective interest rate on the Term Loan Facility of 4.5% and 5.6% during the nine months ended September 30, 2020 and 2019, respectively. Average effective interest rate on the Standard Bank Term Loan Facility of 8.2% and 10.0% during the nine months ended September 30, 2020 and 2019, respectively. (2)The Standard Bank Term Loan Facility contains financial covenants relating to certain ratio tests. (3)On May 1, 2020, Tronox Incorporated, a wholly-owned indirect subsidiary of the Company, issued 6.5% senior secured notes due 2025 for an aggregate principal amount of $500 million (the "6.5% Senior Secured Notes due 2025"), which were issued under an indenture dated May 1, 2020. A portion of the proceeds of this debt offering was utilized to repay the $200 million of the Company's outstanding borrowings under its Wells Fargo, Standard Bank, and Emirates revolvers which was originally borrowed during the first quarter of 2020. (4)The Term Loan Facility consists of (i) a U.S. dollar term facility in an aggregate principal amount of $1.5 billion (the “Term Loans”) with our subsidiary, Tronox Finance LLC (“Tronox Finance”) as the borrower and (ii) a U.S. dollar term facility in an aggregate principal amount of $650 million (the “Blocked Term Loan”) with our unrestricted subsidiary, Tronox Blocked Borrower LLC (the “Blocked Borrower”) as the borrower, which Blocked Term Loan was funded into a blocked account. Upon consummation of the Cristal Transaction on April 10, 2019, the Blocked Borrower merged with and into Tronox Finance, and the Blocked Term Loan became available to Tronox Finance. Short-Term Debt Short-term debt and available facilities consisted of the following:
_______________ (1) In March 2019, the Wells Fargo Revolver was amended, which amongst other things, modified certain components of the borrowing base in order to increase the potential availability of credit. We also voluntarily reduced the revolving credit lines under the Wells Fargo Revolver from $550 million to $350 million. As a result of this modification, we accelerated the recognition of a portion of the deferred financing costs related to the Wells Fargo Revolver and during the nine months ended September 30, 2019, recorded a charge of $2 million in “Loss on extinguishment of debt” within the unaudited Condensed Consolidated Statement of Operations. No charges were recorded during the three months ended September 30, 2019. At September 30, 2020, there were $30 million of issued and undrawn letters of credit under the Wells Fargo Revolver. The Wells Fargo Revolver contains a springing financial covenant that requires the Company and its restricted subsidiaries to maintain a consolidated fixed charge coverage ratio of at least 1.0:1.0 during certain test periods based on borrowing availability under the Wells Fargo Revolver or following the occurrence of specified events of default. (2) In connection with the Standard Bank Credit Facility ("Standard Bank Revolver") entered into on March 25, 2019, the ABSA Revolving Credit Facility ("ABSA Revolver") was terminated on March 26, 2019. As a result of the termination, we accelerated the recognition of the remaining deferred financing costs related to the ABSA Revolver during the nine months ended September 30, 2019 and recorded less than $1 million in “Loss on extinguishment of debt” within the unaudited Condensed Consolidated Statement of Operations. No charges were recorded during the three months ended September 30, 2019. (3) In March 2020, the Company entered into an amendment to, amongst other things, extend the maturity date of the Emirates Revolver from March 31, 2020 to March 31, 2021. In October 2020, the Company extended the maturity date of the SABB Credit Facility from November 30, 2020 to December 13, 2020. (4) In March 2020, under an abundance of caution given the uncertainty associated with the Covid-19 pandemic, the Company drew down $200 million of borrowings under its Wells Fargo, Standard Bank, and Emirates revolvers in order to increase liquidity and preserve financial flexibility which was repaid in May 2020 with a portion of the proceeds of the 6.5% Senior Secured Notes due 2025. Additionally, during the nine months ended September 30, 2020, our KSA subsidiary drew down $13 million on its SABB Credit Facility for local working capital purposes. During the three months ended September 30, 2020, the Company repaid $7 million on the SABB Credit Facility. As a result, at September 30, 2020, the short-term debt balance was $6 million based on the September 30, 2020 exchange rate. There were no comparable amounts outstanding as of December 31, 2019. Debt Covenants At September 30, 2020, we are in compliance with all financial covenants in our debt facilities.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial InstrumentsDerivatives recorded on the Condensed Consolidated Balance Sheet: The following table is a summary of the fair value of derivatives outstanding at September 30, 2020 and December 31, 2019:
(a) At September 30, 2020, current assets of $36 million are recorded in prepaid and other current assets and long-term assets of $10 million are recorded in other long-term assets. At December 31, 2019, current assets of $34 million were recorded in prepaid and other current assets and long-term assets of $3 million are recorded in other long-term assets. Derivatives' Impact on the Condensed Consolidated Statement of Operations: The following table summarizes the impact of the Company's derivatives on the unaudited Condensed Consolidated Statement of Operations:
Interest Rate Risk During the second quarter of 2019, we entered into interest-rate swap agreements with an aggregate notional value of $750 million, representing a portion of our Term Loan Facility, which effectively converts the variable rate to a fixed rate for that portion of the loan. The agreements expire in September 2024. The Company’s objectives in using the interest-rate swap agreements are to add stability to interest expense and to manage its exposure to interest rate movements. These interest rate swaps have been designated as cash flow hedges and involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Fair value gains or losses on these cash flow hedges are recorded in other comprehensive (loss) income and are subsequently reclassified into interest expense in the same periods during which the hedged transactions affect earnings. At September 30, 2020 and December 31, 2019, the net unrealized loss of $61 million and $22 million, respectively, was recorded in "Accumulated other comprehensive loss" on the unaudited Condensed Consolidated Balance Sheet. For the three and nine months ended September 30, 2020, the amounts recorded in interest expense related to the interest-rate swap agreements were $4 million and $6 million, respectively. For the three and nine months ended September 30, 2019, the net amounts recorded in interest expense related to the interest-rate swap agreements were both less than $1 million of interest income and interest expense, respectively. Foreign Currency Risk During the third quarter of 2019 and the first quarter of 2020, we entered into foreign currency contracts used to hedge forecasted third party non-functional currency sales for our South African subsidiaries and forecasted non-functional currency cost of goods sold for our Australian subsidiaries. These foreign currency contracts are designated as cash flow hedges. Changes to the fair value of these foreign currency contracts are recorded as a component of other comprehensive (loss) income, if these contracts remain highly effective, and are recognized in net sales or costs of goods sold in the period in which the forecasted transaction affects earnings or are recognized in other income (expense) when the transactions are no longer probable of occurring. As of September 30, 2020, we had notional amounts of (i) 635 million South African Rand (or approximately $38 million at September 30, 2020 exchange rate) that expire between December 30, 2020 and February 25, 2021 to reduce the exposure of our South African subsidiaries’ third party sales to fluctuations in currency rates, and (ii) $410 million Australian dollars (or approximately $294 million at September 30, 2020 exchange rate) that expire between December 30, 2020 and December 30, 2021 to reduce the exposure of our Australian subsidiaries’ cost of sales to fluctuations in currency rates. At September 30, 2020 and December 31, 2019, there was an unrealized net gain of $42 million and an unrealized net gain of $30 million, respectively, recorded in "Accumulated other comprehensive loss" on the unaudited Condensed Consolidated Balance Sheet, of which $32 million is expected to be recognized in earnings over the next twelve months. We enter into foreign currency contracts for the South African Rand and Australian Dollar to reduce exposure of our subsidiaries’ balance sheet accounts not denominated in our subsidiaries’ functional currency to fluctuations in foreign currency exchange rates. Historically, we have used a combination of zero-cost collars or forward contracts to reduce the exposure. For accounting purposes, these foreign currency contracts are not considered hedges. The change in fair value associated with these contracts is recorded in “Other expense, net” within the unaudited Condensed Consolidated Statement of Operations and partially offsets the change in value of third party and intercompany-related receivables not denominated in the functional currency of the subsidiary. At September 30, 2020, there was (i) 546 million South African Rand (or approximately $33 million at September 30, 2020 exchange rate) and (ii) $67 million Australian dollars (or approximately $48 million at September 30, 2020) of notional amount outstanding foreign currency contracts. At December 31, 2019, there was (i) 712 million South African Rand (or approximately $43 million at September 30, 2020 exchange rate) and (ii) $89 million Australian dollars (or approximately $64 million at September 30, 2020 exchange rate) of notional amounts outstanding foreign currency contracts.
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Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The accounting standards also have established a fair value hierarchy, which prioritizes the inputs to valuation techniques used in measuring fair value into three broad levels as follows: Level 1 -Quoted prices in active markets for identical assets or liabilities Level 2 -Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly Level 3 -Unobservable inputs based on the Company’s own assumptions Our debt is recorded at historical amounts. The following table presents the fair value of our debt and derivative contracts at both September 30, 2020 and December 31, 2019:
We determined the fair value of the Term Loan Facility, the Senior Notes due 2025, the Senior Notes due 2026 and 6.5% Senior Secured Notes due 2025 using quoted market prices, which under the fair value hierarchy is a Level 1 input. We determined the fair value of the Standard Bank Term Loan Facility and Tikon Loan utilizing transactions in the listed markets for identical or similar liabilities, which under the fair value hierarchy is a Level 2 input. The fair value of the Australian Government Loan is based on the contracted amount which is a Level 2 input. We determined the fair value of the foreign currency contracts and the interest rate swaps using inputs other than quoted prices in active markets that are observable either directly or indirectly. The fair value hierarchy for the foreign currency contracts and interest rate swaps is a Level 2 input. The carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities and short-term debt approximate fair value due to the short-term nature of these items.See Note 2, “Acquisitions and Related Divestitures”, for the assets and liabilities measured on a non-recurring basis at fair value associated with our acquisition.
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Asset Retirement Obligations |
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Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligations | Asset Retirement Obligations Asset retirement obligations consist primarily of rehabilitation and restoration costs, landfill capping costs, decommissioning costs, and closure and post-closure costs. Activities related to asset retirement obligations were as follows:
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase and Capital Commitments — Includes obligations for purchase requirements of process chemicals, supplies, utilities and services entered into in the ordinary course of business. At September 30, 2020, purchase commitments were $73 million for 2020, $98 million for 2021, $73 million for 2022, $57 million for 2023, $52 million for 2024, and $179 million thereafter. Letters of Credit—At September 30, 2020, we had outstanding letters of credit and bank guarantees of $73 million, of which $32 million were letters of credit and $41 million were bank guarantees. Amounts for performance bonds were not material. Environmental Matters— It is our policy to record appropriate liabilities for environmental matters when remedial efforts are probable and the costs can be reasonably estimated. Such liabilities are based on our best estimate of the undiscounted future costs required to complete the remedial work. The recorded liabilities are adjusted periodically as remediation efforts progress or as additional technical, regulatory or legal information becomes available. Given the uncertainties regarding the status of laws, regulations, enforcement policies, the impact of other potentially responsible parties, technology and information related to individual sites, we do not believe it is possible to develop an estimate of the range of reasonably possible environmental loss in excess of our recorded liabilities. We expect to fund expenditures for these matters from operating cash flows. The timing of cash expenditures depends principally on the timing of remedial investigations and feasibility studies, regulatory approval of cleanup projects, remedial techniques to be utilized and agreements with other parties. Included in these environmental matters are the following: Hawkins Point Plant. Residual waste mud, known as Batch Attack Mud, and a spent sulfuric waste stream were deposited in an onsite repository (the “Batch Attack Lagoon”) at a former TiO2 manufacturing site, Hawkins Point Plant in Baltimore, Maryland, operated by Cristal USA, Inc. from 1954 until 2011. We assumed responsibility for remediation of the Hawkins Point Plant when we acquired the TiO2 business of Cristal in April 2019. In 1984, a predecessor of Cristal and the Maryland Department of the Environment (“MDE”) entered into a consent decree (the “Consent Decree”) to address the Batch Attack Lagoon. The Consent Decree required that Cristal close the Batch Attack Lagoon when the Hawkins Point Plant ceased operations. In addition, we are investigating whether hazardous substances are migrating from the Batch Attack Lagoon. A provision of $60 million has been made in our financial statements for the Hawkins Point Plant consistent with the accounting policy described above. We are in discussions with the MDE regarding a new consent decree to address both the Batch Attack Lagoon as well as other environmental contamination issues associated with the Hawkins Point Plant. Other Matters— We are subject to a number of other lawsuits, investigations and disputes (some of which involve substantial amounts claimed) arising out of the conduct of our business, including matters relating to commercial transactions, prior acquisitions and divestitures, including our acquisition of Cristal, employee benefit plans, intellectual property, and environmental, health and safety matters. We recognize a liability for any contingency that is probable of occurrence and reasonably estimable. We continually assess the likelihood of adverse judgments of outcomes in these matters, as well as potential ranges of possible losses (taking into consideration any insurance recoveries), based on a careful analysis of each matter with the assistance of outside legal counsel and, if applicable, other experts. Included in these other matters is the following: Venator Materials plc v. Tronox Limited. In May 2019, Venator Materials plc (“Venator”) filed an action in the Superior Court of the State of Delaware alleging among other things that we owed Venator a $75 million “Break Fee” pursuant to the terms of a preliminary agreement dated July 14, 2018 (the “Exclusivity Agreement”). The Exclusivity Agreement required, among other things, Tronox and Venator to use their respective best efforts to negotiate a definitive agreement to sell the entirety of the National Titanium Dioxide Company Limited’s (“Cristal’s”) North American operations to Venator if a divestiture of all or a substantial part of these operations were required to secure the approval of the Federal Trade Commission for us to complete our acquisition of Cristal’s TiO2 business. In June 2019, we denied Ventaor's claims and counterclaimed against Venator seeking to recover $400 million in damages from Venator that we suffered as a result of Venator’s breaches of the Exclusivity Agreement. Specifically, we alleged, among other things, that Venator’s failure to use best efforts constituted a material breach of the Exclusivity Agreement and directly resulted in and caused us to sell Cristal’s North American operations to an alternative buyer for $701 million, $400 million less than the price Venator had agreed to in the Exclusivity Agreement. Though we believe that our interpretation of the Exclusivity Agreement is correct, there can be no assurance that we will prevail in litigation.
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Accumulated Other Comprehensive Loss Attributable to Tronox Holdings plc |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss Attributable to Tronox Holdings plc | Accumulated Other Comprehensive Loss Attributable to Tronox Holdings plc The tables below present changes in accumulated other comprehensive loss by component for the three months ended September 30, 2020 and 2019.
The tables below present changes in accumulated other comprehensive income (loss) by component for the nine months ended September 30, 2020 and 2019.
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Share-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||
Share-Based Compensation | Share-Based Compensation Tronox Holdings plc Amended and Restated Management Equity Incentive Plan On March 27, 2019, in connection with the re-domicile transaction, Tronox Holdings plc assumed the management equity incentive plan previously adopted by Tronox Limited, which plan was renamed the Tronox Holdings plc Amended and Restated Management Equity Incentive Plan ("MEIP"). The amendments to the plan were made to provide, among other things, for the appropriate substitution of Tronox Holdings in place of Tronox Limited and to ensure the compliance with the laws of England and Wales law in place of Australian law. The MEIP permits the grant of awards that are comprised of incentive options, nonqualified options, share appreciation rights, restricted shares, restricted share units, performance awards, and other share-based awards, cash payments, and other forms as the compensation committee of the Board of Directors (the “Board”) in its discretion deems appropriate, including any combination of the above. Subject to further adjustment, as of December 31, 2019, the maximum number of shares which may be subject to awards (inclusive of incentive options) is 20,781,225 ordinary shares. The maximum number of shares which may be subject to awards under our MEIP was increased by 8,000,000 on the affirmative vote of our shareholders on June 24, 2020. Restricted Share Units (“RSUs”) 2020 Grant - During the nine months ended September 30, 2020, the Company granted both time-based and performance-based awards to certain members of management and to members of the Board. A total of 1,603,208 of time-based awards were granted to management which will vest ratably over a three-year period ending March 5, 2023. A total of 183,374 of time-based awards were granted to members of the Board of which 21,654 vested in June 2020 and 161,720 will vest in May 2021. A total of 1,512,788 of performance-based awards were granted, of which 756,394 of the awards vest based on a relative Total Shareholder Return ("TSR") calculation and 756,394 of the awards vest based on certain performance metrics of the Company. The non-TSR performance-based awards vest on March 5, 2023 based on the achievement against the target average company performance of three separate performance periods, commencing on January 1 of each 2020, 2021, and 2022 and ending on December 31 of each 2020, 2021 and 2022, for which, for each performance period, the performance metric is an average annual operating return on net assets (ORONA). Similar to the Company's historical TSR awards granted in prior years, the TSR awards vest based on the Company's three-year TSR versus the peer group performance levels. Given these terms, the TSR metric is considered a market condition for which we used a Monte Carlo simulation to determine the weighted average grant date fair value of $10.01. The following weighted average assumptions were utilized to value the TSR grants:
The unrecognized compensation cost associated with all unvested awards at September 30, 2020 was $39 million, adjusted for estimated forfeitures, which is expected to be recognized over a weighted-average period of approximately 1.8 years. During the three and nine months ended September 30, 2020, we recorded $8 million and $19 million of stock compensation expense, respectively. The stock compensation expense for the nine months ended September 30, 2020 is inclusive of a $6 million credit for the reversal of expense due to the 2018 performance grants. During the three and nine months ended September 30, 2019, we recorded $9 million and $24 million of stock compensation expense respectively. There were no options exercised during the three and nine month periods ended September 30, 2020.
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Pension and Other Postretirement Healthcare Benefits |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Postretirement Healthcare Benefits | Pension and Other Postretirement Healthcare Benefits The components of net periodic cost associated with our U.S. and foreign pension plans recognized in the unaudited Condensed Consolidated Statements of Operations were as follows:
The components of net periodic cost associated with our other postretirement healthcare plans were less than $1 million for each of the three months ended September 30, 2020 and 2019. The components of net periodic cost associated with our post retirement healthcare plans were $1 million for each of the nine months ended September 30, 2020 and 2019. During the nine months ended September 30, 2020, the Company made contributions to its pension plans of approximately $22 million. The Company expects to make an additional $3 million to $5 million of pension contributions for the remainder of 2020. During the three months ended September 30, 2020, we received approximately $5 million as a final settlement of our Australian defined benefit plan which was recorded against the pension plan asset within "Other long-term assets" on the Condensed Consolidated Balance Sheet. For the both the three months and nine months ended September 30, 2020 and 2019, we contributed $1 million and $3 million, respectively, to the Netherlands Multiemployer Plan, which was primarily recognized in “Cost of goods sold” in the unaudited Condensed Consolidated Statement of Operations.
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Related Parties |
9 Months Ended |
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Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Parties | Related Parties Exxaro On November 26, 2018, we, certain of our subsidiaries and Exxaro entered into the Completion Agreement. The Completion Agreement provides for the orderly sale of Exxaro’s remaining ownership interest in us, subject to market conditions, helped to facilitate the re-domicile transaction, as well as addressed several legacy issues related to our 2012 acquisition of Exxaro’s mineral sands business. Pursuant to the terms of the Completion Agreement, on May 9, 2019, Exxaro exercised their right under the agreement to sell 14 million shares to us for an aggregate purchase price of approximately $200 million or $14.319 per share, plus fees of approximately $1 million. The share price was based upon a 5% discount to the 10 day volume weighted average price as of the day that Exxaro exercised their sale notice to us. Upon repurchase of the shares by the Company, the shares were cancelled. As a result of the sale of the 14 million shares on May 9, 2019, we recorded a liability of $4 million which was included in “Accrued liabilities” in our Consolidated Balance Sheets as of December 31, 2019 and was subsequently paid in January 2020. Futhermore, pursuant to the Completion Agreement, the parties agreed to accelerate our purchase of Exxaro's 26% membership interest in Tronox Sands LLP, a U.K. limited liability partnership ("Tronox Sands"). On February 15, 2019, we completed the redemption of Exxaro's ownership interest in Tronox Sands for consideration of approximately ZAR 2.06 billion (or approximately $148 million in cash), which represented Exxaro's indirect share of the loan accounts in our South African subsidiaries. At September 30, 2020, Exxaro continues to own approximately 14.7 million shares of Tronox, or a 10.3% ownership interest, as well as their 26% ownership interest in our South African operating subsidiaries. At the present time, we are unable to reasonably determine when and if Exxaro will sell its remaining shares in the foreseeable future. Tasnee/Cristal On April 10, 2019, we announced the completion of the acquisition of the TiO2 business of Cristal for $1.675 billion of cash, subject to a working capital and noncurrent liability adjustment, plus 37,580,000 ordinary shares. At September 30, 2020, Cristal International Holdings B.V. (formerly known as Cristal Inorganic Chemical Netherlands Cooperatief W.A.), a wholly-owned subsidiary of Tasnee, continues to own 37,580,000 shares of Tronox, or a 26% ownership interest. In February 2020, Tronox and Cristal resolved the working capital and noncurrent liability adjustment by agreeing that no payment was required by either party. On May 9, 2018, we entered into an Option Agreement with AMIC which is owned equally by Tasnee and Cristal. Under the terms of the Option Agreement, AMIC granted us an option (the “Option”) to acquire 90% of a special purpose vehicle (the “SPV”), to which AMIC’s ownership in a titanium slag smelter facility (the “Slagger”) in The Jazan City for Primary and Downstream Industries in KSA will be contributed together with $322 million of AMIC indebtedness (the “AMIC Debt”). The Option may be exercised if the Slagger achieves certain production criteria related to sustained quality and tonnage of slag produced (the “Option Criteria”). Likewise, AMIC may require us to acquire the Slagger on the same terms if the Option Criteria are satisfied. Furthermore, pursuant to the Option Agreement and during its term, we agreed to lend AMIC and, upon the creation of the SPV, the SPV up to $125 million for capital expenditures and operational expenses intended to facilitate the start-up of the Slagger (the “Tronox Loans”). Such funds may be drawn down by AMIC and the SPV, as the case may be, on a quarterly basis as needed based on a budget reflecting the anticipated needs of the Slagger start-up. For the three and nine months ended September 30, 2020, we have loaned an additional $12 million and $24 million respectively for capital expenditures and operational expenses to facilitate the startup of the Slagger. We have recorded $113 million of total principal loan payments and related interest of $5 million within “Other long-term assets” on the unaudited Condensed Consolidated Balance Sheet at September 30, 2020. The Option did not have a significant impact on the financial statements as of or for the periods ended September 30, 2020. Subsequent to the period ended September 30, 2020, on October 8, 2020, we loaned AMIC an additional amount of approximately $12 million which brought the total amount that we have lent under the Tronox Loans equal to the $125 million maximum amount that we agreed to lend. On May 13, 2020, we amended the Option Agreement (the "First Amendment") with AMIC to address circumstances in which the Option Criteria cannot be satisfied. Pursuant to the First Amendment, Tronox has the right to acquire the SPV in exchange for its forgiveness of the Tronox Loan, up to $125 million of principal amount and any interest accrued thereon of the Tronox Loans plus or minus 90% of the SPV’s net working capital. The First Amendment did not have a significant impact on our financial statements as of or for the period ended September 30, 2020. Additionally, on May 13, 2020, we amended a Technical Services Agreement that we had entered with AMIC on March 15, 2018, to add project management support services. Under this arrangement, AMIC and its consultants are still responsible for engineering and construction of the Slagger while we provide technical advice and project management services including supervision and management of third party consultants intended to satisfy the Option Criteria. As compensation for these services, Tronox receives a monthly management fee of approximately $1 million, which is recorded in “Other income (expense), net” within the unaudited Condensed Consolidated Statement of Operations and in “Prepaid and other assets” on the unaudited Condensed Consolidated Balance Sheet. The monthly management fee is subject to certain success incentives if and when the Slagger achieves the Option Criteria. Tronox recorded approximately $2 million and $3 million in "Other Income" for both the three and nine months ended September 30, 2020, respectively, in the unaudited Condensed Consolidated Statement of Operations. At September 30, 2020, Tronox had a receivable due from AMIC related to management fee of $1 million that is recorded within “Prepaid and other assets”. In conjunction with closing of the Cristal Transaction on April 10, 2019, we entered into a transition services agreement with Tasnee, Cristal and AMIC. Under the terms of the transition services agreement, Tasnee and its affiliates will provide services to Tronox related to information technology support and infrastructure, logistics, safety, health and environmental, treasury and tax. Similarly, Tronox will provide services to Tasnee and its affiliates for information technology support and infrastructure, finance and accounting, tax, treasury, human resources, logistics, research and development and business development. As part of the transition services agreement, Tronox recorded a net reduction of $1 million in “Selling, general and administrative expenses” for both the three and nine months ended September 30, 2020, respectively, in the unaudited Condensed Consolidated Statement of Operations. The net reduction of selling, general and administrative expenses associated with the transition services agreement generally represents a recovery of the related costs. At September 30, 2020, Tronox had a receivable due from Tasnee of $13 million and a payable due to Tasnee of $3 million that are recorded within “Prepaid and other assets” and “Accrued liabilities”, respectively, on the unaudited Condensed Consolidated Balance Sheet. The balance in prepaid and other assets relate primarily to amounts arising from transition service agreements, stamp duty taxes paid on behalf of Tasnee and pre-acquisition activities. Balances in accrued liabilities relate to pre-acquisition activity and those balances are expected to be settled in the near term. On December 29, 2019, we entered into an agreement with Cristal to acquire certain assets co-located at our Yanbu facility which produces metal grade TiCl4 ("MGT"). Consideration for the acquisition is the assumption by Tronox of a $36 million note payable to Cristal. The MGT is used at a titanium "sponge" plant facility, 65% of the ownership interests of which are held by Advanced Metal Industries Cluster and Toho Titanium Metal Co. Ltd ("ATTM"), a joint venture between AMIC and Toho Titanium Company Ltd. ATTM uses the TiCl4, which we supply by pipeline, for the production of titanium sponge, a precursor material used in the production of titanium metal. We currently operate the MGT asset for AMIC under an interim arrangement and expect this transaction to close in 2020. As a result of the transactions we have entered into related to the MGT assets, during the three and nine months ended September 30, 2020, Tronox recorded $1 million and $4 million for purchase of chlorine gas from ATTM and such amounts are recorded in "Cost of goods sold" on the unaudited Condensed Consolidated Statement of Operations. The amount due to ATTM as of September 30, 2020 for the purchase of chlorine gas was $6 million and is recorded within “Accrued liabilities” on the unaudited Condensed Consolidated Balance Sheet. In addition, during the three and nine months ended September 30, 2020, Tronox recorded $7 million and $19 million, respectively, for MGT sales made to AMIC and such amounts were recorded in “Net sales” on the unaudited Condensed Consolidated Statement of Operations. At September 30, 2020, Tronox had a receivable from AMIC of $6 million from MGT sales that is recorded within “Prepaid and other assets” on the unaudited Condensed Consolidated Balance Sheet.
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The Company (Policies) |
9 Months Ended |
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Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission regarding interim financial reporting. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019. The acquisition of Cristal has impacted the comparability of our financial statements. As the Cristal Transaction was completed on April 10, 2019, in accordance with ASC 805, the nine month period ended September 30, 2019 includes the results of the Cristal business since the date of the acquisition, while both the three month periods ended September 30, 2020 and September 30, 2019 and the nine month period ended September 30, 2020 include the results of the combined business. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, considered necessary for a fair statement of its financial position as of September 30, 2020, and its results of operations for the three and nine months ended September 30, 2020 and 2019. Our unaudited condensed consolidated financial statements include the accounts of all majority-owned subsidiary companies. All intercompany balances and transactions have been eliminated in consolidation. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. It is at least reasonably possible that the effect on the financial statements of a change in estimate due to one or more future confirming events could have a material effect on the financial statements, including any potential impacts on the economy as a result of the Covid-19 pandemic which could impact revenue growth and collectibility of trade receivables.
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Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (“Topic 820”): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The standard modifies the disclosure requirements in Topic 820, Fair Value Measurement, by: removing certain disclosure requirements related to the fair value hierarchy; modifying existing disclosure requirements related to measurement uncertainty; and adding new disclosure requirements, such as disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and disclosing the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2019, with early adoption permitted. We adopted this standard on January 1, 2020 and it did not have a material impact on the Company's consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), as amended. The standard introduces a new accounting model for expected credit losses on financial instruments, including trade receivables, based on estimates of current expected credit losses (CECL). This standard became effective on January 1, 2020, and had an immaterial impact on the Company's consolidated financial statements as our historical bad debt expense has not been material. Recently Issued Accounting Pronouncements During the quarter ended March 31, 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform Financial Reporting.” This amendment is elective in nature. Amongst other aspects, this standard provides for practical expedients and exceptions to current accounting standards that reference a rate which is expected to be dissolved (e.g. London Interbank Offered Rate “LIBOR”) as it relates to hedge accounting, contract modifications and other transactions that reference this rate, subject to meeting certain criteria. The standard is effective for all entities as of March 12, 2020 through December 31, 2022. The company is currently evaluating the impact of the standard.
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Fair Value | Fair Value Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The accounting standards also have established a fair value hierarchy, which prioritizes the inputs to valuation techniques used in measuring fair value into three broad levels as follows: Level 1 -Quoted prices in active markets for identical assets or liabilities Level 2 -Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly Level 3 -Unobservable inputs based on the Company’s own assumptions
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Acquisitions and Related Divestitures (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Final Purchase Price Recognized and Estimated Fair Value of Net Assets Acquired | The final purchase price consideration and estimated fair value of Cristal's net assets acquired on April 10, 2019 are shown below. The assets and liabilities of Cristal's North American TiO2 business, that was subsequently divested on May 1, 2019, are shown as held for sale in the fair value of assets acquired and liabilities assumed.
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Pro Forma Information | In accordance with ASC 805, the supplemental pro forma results of operations for the three and nine months ended September 30, 2019, which were updated subsequently to reflect final purchase price allocation adjustments, are as follows:
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Restructuring Initiatives (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liability Balance for Restructuring Plan | The liability balance for restructuring as of September 30, 2020, is as follows:
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Revenue (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Net sales to external customers by geographic areas where our customers are located were as follows:
Net sales from external customers for each similar type of product were as follows:
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Discontinued Operations (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Operations of Discontinued Operation | The following table presents a summary of operations of Cristal’s North American TiO2 business and Cristal Metals line items constituting the "Income from discontinued operations, net of tax" in our unaudited Condensed Consolidated Statements of Operations:
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Income Taxes (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income (loss) from continuing operations before income taxes is comprised of the following:
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Income (Loss) Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Income (Loss) per Share | The computation of basic and diluted loss per share for the periods indicated is as follows:
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Anti-Dilutive Shares Not Recognized in Diluted Net Income (Loss) per Share Calculation | Anti-dilutive shares not recognized in the diluted net income (loss) per share calculation for the three and nine months ended September 30, 2020 and 2019 were as follows:
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Inventories, Net (Tables) |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories, Net | Inventories, net consisted of the following:
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Property, Plant and Equipment, Net (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment, Net of Accumulated Depreciation | Property, plant and equipment, net of accumulated depreciation, consisted of the following:
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Depreciation Expense Related to Property Plant and Equipment | The table below summarizes depreciation expense related to property, plant and equipment for the periods presented, recorded in the specific line items in our unaudited Condensed Consolidated Statements of Operations:
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Mineral Leaseholds, Net (Tables) |
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Extractive Industries [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mineral Leaseholds, Net of Accumulated Depletion | Mineral leaseholds, net of accumulated depletion, consisted of the following:
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Intangible Assets, Net (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets, Net of Accumulated Amortization | Intangible assets, net of accumulated amortization, consisted of the following:
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Finite-lived Intangible Assets Amortization Expense | The table below summarizes amortization expense related to intangible assets for the periods presented, recorded in the specific line items in our unaudited Condensed Consolidated Statements of Operations:
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Balance Sheet and Cash Flow Supplemental Information (Tables) |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities | Accrued liabilities consisted of the following:
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Schedule of Cash Flow, Supplemental Disclosures | Additional supplemental cash flow information for the nine months ended September 30, 2020 and 2019 and as of September 30, 2020 and December 31, 2019 is as follows:
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Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt, Net of Unamortized Discount and Debt Issuance Costs | Long-term debt, net of an unamortized discount and debt issuance costs, consisted of the following:
_______________ (1)Average effective interest rate on the Term Loan Facility of 4.5% and 5.6% during the nine months ended September 30, 2020 and 2019, respectively. Average effective interest rate on the Standard Bank Term Loan Facility of 8.2% and 10.0% during the nine months ended September 30, 2020 and 2019, respectively. (2)The Standard Bank Term Loan Facility contains financial covenants relating to certain ratio tests. (3)On May 1, 2020, Tronox Incorporated, a wholly-owned indirect subsidiary of the Company, issued 6.5% senior secured notes due 2025 for an aggregate principal amount of $500 million (the "6.5% Senior Secured Notes due 2025"), which were issued under an indenture dated May 1, 2020. A portion of the proceeds of this debt offering was utilized to repay the $200 million of the Company's outstanding borrowings under its Wells Fargo, Standard Bank, and Emirates revolvers which was originally borrowed during the first quarter of 2020. (4)The Term Loan Facility consists of (i) a U.S. dollar term facility in an aggregate principal amount of $1.5 billion (the “Term Loans”) with our subsidiary, Tronox Finance LLC (“Tronox Finance”) as the borrower and (ii) a U.S. dollar term facility in an aggregate principal amount of $650 million (the “Blocked Term Loan”) with our unrestricted subsidiary, Tronox Blocked Borrower LLC (the “Blocked Borrower”) as the borrower, which Blocked Term Loan was funded into a blocked account. Upon consummation of the Cristal Transaction on April 10, 2019, the Blocked Borrower merged with and into Tronox Finance, and the Blocked Term Loan became available to Tronox Finance.
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Schedule of Short-term Debt and Available Facilities | Short-term debt and available facilities consisted of the following:
_______________ (1) In March 2019, the Wells Fargo Revolver was amended, which amongst other things, modified certain components of the borrowing base in order to increase the potential availability of credit. We also voluntarily reduced the revolving credit lines under the Wells Fargo Revolver from $550 million to $350 million. As a result of this modification, we accelerated the recognition of a portion of the deferred financing costs related to the Wells Fargo Revolver and during the nine months ended September 30, 2019, recorded a charge of $2 million in “Loss on extinguishment of debt” within the unaudited Condensed Consolidated Statement of Operations. No charges were recorded during the three months ended September 30, 2019. At September 30, 2020, there were $30 million of issued and undrawn letters of credit under the Wells Fargo Revolver. The Wells Fargo Revolver contains a springing financial covenant that requires the Company and its restricted subsidiaries to maintain a consolidated fixed charge coverage ratio of at least 1.0:1.0 during certain test periods based on borrowing availability under the Wells Fargo Revolver or following the occurrence of specified events of default. (2) In connection with the Standard Bank Credit Facility ("Standard Bank Revolver") entered into on March 25, 2019, the ABSA Revolving Credit Facility ("ABSA Revolver") was terminated on March 26, 2019. As a result of the termination, we accelerated the recognition of the remaining deferred financing costs related to the ABSA Revolver during the nine months ended September 30, 2019 and recorded less than $1 million in “Loss on extinguishment of debt” within the unaudited Condensed Consolidated Statement of Operations. No charges were recorded during the three months ended September 30, 2019. (3) In March 2020, the Company entered into an amendment to, amongst other things, extend the maturity date of the Emirates Revolver from March 31, 2020 to March 31, 2021. In October 2020, the Company extended the maturity date of the SABB Credit Facility from November 30, 2020 to December 13, 2020. (4) In March 2020, under an abundance of caution given the uncertainty associated with the Covid-19 pandemic, the Company drew down $200 million of borrowings under its Wells Fargo, Standard Bank, and Emirates revolvers in order to increase liquidity and preserve financial flexibility which was repaid in May 2020 with a portion of the proceeds of the 6.5% Senior Secured Notes due 2025. Additionally, during the nine months ended September 30, 2020, our KSA subsidiary drew down $13 million on its SABB Credit Facility for local working capital purposes. During the three months ended September 30, 2020, the Company repaid $7 million on the SABB Credit Facility. As a result, at September 30, 2020, the short-term debt balance was $6 million based on the September 30, 2020 exchange rate. There were no comparable amounts outstanding as of December 31, 2019.
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Derivative Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Derivatives Outstanding | The following table is a summary of the fair value of derivatives outstanding at September 30, 2020 and December 31, 2019:
(a) At September 30, 2020, current assets of $36 million are recorded in prepaid and other current assets and long-term assets of $10 million are recorded in other long-term assets. At December 31, 2019, current assets of $34 million were recorded in prepaid and other current assets and long-term assets of $3 million are recorded in other long-term assets.
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Schedule of Derivatives Instruments Impact on Statement of Operation | The following table summarizes the impact of the Company's derivatives on the unaudited Condensed Consolidated Statement of Operations:
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Fair Value (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Debt and Derivative Contracts | The following table presents the fair value of our debt and derivative contracts at both September 30, 2020 and December 31, 2019:
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Asset Retirement Obligations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Retirement Obligations | Asset retirement obligations consist primarily of rehabilitation and restoration costs, landfill capping costs, decommissioning costs, and closure and post-closure costs. Activities related to asset retirement obligations were as follows:
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Accumulated Other Comprehensive Loss Attributable to Tronox Holdings plc (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Accumulated Other Comprehensive Loss by Component | The tables below present changes in accumulated other comprehensive loss by component for the three months ended September 30, 2020 and 2019.
The tables below present changes in accumulated other comprehensive income (loss) by component for the nine months ended September 30, 2020 and 2019.
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Share-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||
Weighted-Average Assumptions Utilized to Value Performance-Based Awards Based on Total Shareholder Return | The following weighted average assumptions were utilized to value the TSR grants:
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Pension and Other Postretirement Healthcare Benefits (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Periodic Cost Associated with the U.S. and Foreign Pension Plans | The components of net periodic cost associated with our U.S. and foreign pension plans recognized in the unaudited Condensed Consolidated Statements of Operations were as follows:
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The Company (Details) - facility |
Apr. 10, 2019 |
Apr. 09, 2019 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of titanium dioxide pigment facilities in which entity operates | 9 | 3 |
Acquisitions and Related Divestitures - Pro Forma Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2019 |
Sep. 30, 2019 |
|
Business Combination, Description [Abstract] | ||
Net sales | $ 768 | |
Net income from continuing operations attributable to Tronox Holdings plc | $ 19 | |
Cristal's Titanium Dioxide Business | ||
Business Combination, Description [Abstract] | ||
Net sales | $ 2,315 | |
Net income from continuing operations attributable to Tronox Holdings plc | $ 22 |
Restructuring Initiatives (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Restructuring Costs [Abstract] | ||||||
Restructuring charges | $ 1 | $ 3 | $ 3 | $ 13 | ||
Restructuring Reserve [Roll Forward] | ||||||
Balance at beginning of period | $ 10 | 10 | ||||
Balance at end of period | 3 | 3 | ||||
Employee-Related Costs | ||||||
Restructuring Reserve [Roll Forward] | ||||||
Balance at beginning of period | 4 | $ 9 | 10 | 10 | ||
First Quarter 2020 charges | 1 | 0 | 2 | 3 | ||
Cash payments | (2) | (5) | (4) | |||
Foreign exchange and other | 0 | 0 | 1 | |||
Balance at end of period | $ 3 | $ 4 | $ 9 | $ 3 |
Revenue - Narrative (Details) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2020
USD ($)
customer
segment
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Sep. 30, 2019
customer
|
Dec. 31, 2019
USD ($)
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Concentration Risk [Line Items] | |||
Contract liability balance | $ | $ 3 | $ 1 | |
Number of operating segments | 1 | ||
Number of reportable segments | 1 | ||
Ten Largest Third-party TiO2 Customers | Revenue Benchmark | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Number of largest customers representing specified percentage of net sales | customer | 10 | 10 | |
Concentration percentage | 33.00% | 32.00% |
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 675 | $ 768 | $ 1,975 | $ 1,949 |
TiO2 | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 543 | 603 | 1,589 | 1,505 |
Zircon | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 56 | 68 | 189 | 220 |
Feedstock and other products | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 76 | 97 | 197 | 224 |
North America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 189 | 203 | 521 | 521 |
South and Central America | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 51 | 52 | 113 | 113 |
Europe, Middle-East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 244 | 266 | 736 | 712 |
Asia Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 191 | $ 247 | $ 605 | $ 603 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Income Tax Disclosure [Abstract] | ||||
Income tax benefit (provision) | $ 893 | $ (12) | $ 876 | $ (10) |
Income (loss) from continuing operations before income taxes | $ 9 | $ 0 | $ 62 | $ (87) |
Effective tax rate | (9922.00%) | (1413.00%) | (11.00%) |
Income Taxes - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Income Taxes [Abstract] | |||
Reversal of U.S. valuation allowance | $ 895,000,000 | $ 895,000,000 | $ 0 |
Deferred tax assets, valuation allowance | 1,067,000,000 | 1,067,000,000 | |
Unrecognized tax benefits | $ 0 | $ 0 | |
U.K. | |||
Income Taxes [Abstract] | |||
Statutory tax rate | 19.00% | 19.00% |
Income (Loss) Per Share - Anti-Dilutive Shares Not Recognized in Diluted Net Income (Loss) per Share Calculation (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares | 1,205,020 | 1,263,682 | 1,205,020 | 1,263,682 |
Restricted share units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive shares | 5,653,136 | 5,603,055 | 6,419,593 | 5,603,055 |
Inventories, Net (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Inventory, Net [Abstract] | ||
Raw materials | $ 188 | $ 205 |
Work-in-process | 106 | 129 |
Finished goods, net | 672 | 573 |
Materials and supplies, net | 210 | 224 |
Inventories, net – current | 1,176 | 1,131 |
Inventory obsolescence reserves | 42 | 39 |
Reserves for lower of cost or market and net realizable value | $ 34 | $ 25 |
Mineral Leaseholds, Net (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
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Summary of minerals leaseholds, net of accumulated depletion [Abstract] | |||||
Mineral leaseholds | $ 1,314 | $ 1,314 | $ 1,352 | ||
Less: accumulated depletion | (538) | (538) | (500) | ||
Mineral leaseholds, net | 776 | 776 | $ 852 | ||
Depletion expense | $ 11 | $ 21 | $ 25 | $ 46 |
Balance Sheet and Cash Flow Supplemental Information - Accrued Liabilities (Details) - USD ($) $ in Millions |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Accrued Liabilities, Current [Abstract] | ||
Employee-related costs and benefits | $ 122 | $ 103 |
Related party payables | 9 | 7 |
Interest | 46 | 16 |
Sales rebates | 38 | 39 |
Restructuring | 3 | 10 |
Taxes other than income taxes | 19 | 6 |
Asset retirement obligations | 7 | 16 |
Interest rate swaps | 61 | 22 |
Currency contracts | 3 | 0 |
Professional fees and other | 56 | 60 |
Liabilities held for sale | 0 | 4 |
Accrued liabilities | $ 364 | $ 283 |
Balance Sheet and Cash Flows Supplemental Information - Additional Supplemental Cash Flow Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Mar. 31, 2020 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Supplemental non cash information: | |||
Investing activities- shares issued in the Cristal acquisition | $ 0 | $ 526 | |
Financing activities- debt assumed in the Cristal acquisition | 0 | $ 22 | |
Capital expenditures acquired but not yet paid | $ 23 | $ 26 |
Asset Retirement Obligations (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | ||||||
Beginning balance | $ 155 | $ 174 | $ 158 | $ 74 | ||
Additions | 1 | 0 | 1 | 3 | ||
Accretion expense | 4 | 3 | 9 | 7 | ||
Remeasurement/translation | 4 | (7) | (5) | (7) | ||
Other, including change in estimates | 0 | (1) | 0 | 2 | ||
Settlements/payments | (5) | (1) | (8) | (2) | ||
Transferred with the divestiture of Ashtabula | 0 | 0 | 0 | (3) | ||
Transferred in with the acquisition of Cristal | 0 | (6) | 0 | 88 | ||
Other acquisition and divestiture related | 0 | 0 | 4 | 0 | ||
Ending balance | 159 | 162 | 159 | 162 | ||
Asset retirement obligations [Abstract] | ||||||
Current portion included in “Accrued liabilities” | $ 7 | $ 16 | ||||
Noncurrent portion included in “Asset retirement obligations” | 152 | 142 | ||||
Asset retirement obligations | $ 159 | $ 162 | $ 158 | $ 162 | $ 159 | $ 158 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
1 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
May 01, 2019 |
Jun. 30, 2019 |
May 31, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Unrecorded Unconditional Purchase Obligation, Fiscal Year Maturity [Abstract] | |||||
Remainder of 2020 | $ 73 | ||||
2021 | 98 | ||||
2022 | 73 | ||||
2023 | 57 | ||||
2024 | 52 | ||||
Thereafter | 179 | ||||
Commitments and Contingencies [Abstract] | |||||
Loss contingency | 73 | ||||
Provision for Hawkins Point Plant | 60 | ||||
Proceeds from sale of Ashtabula | 0 | $ 708 | |||
Venator Materials PLC VS. Tronox Limited | |||||
Commitments and Contingencies [Abstract] | |||||
Damages sought | $ 400 | ||||
Cristal, North America TiO2 Business | Discontinued Operations, Disposed of by Sale | |||||
Commitments and Contingencies [Abstract] | |||||
Proceeds from sale of Ashtabula | $ 701 | ||||
Venator Materials PLC | Venator Materials PLC VS. Tronox Limited | |||||
Commitments and Contingencies [Abstract] | |||||
Damages sought | $ 75 | ||||
Letters of Credit | |||||
Commitments and Contingencies [Abstract] | |||||
Loss contingency | 32 | ||||
Bank Guarantees | |||||
Commitments and Contingencies [Abstract] | |||||
Loss contingency | $ 41 |
Share-Based Compensation - Weighted-Average Assumptions Utilized to Value Performance-Based Awards Based on Total Shareholder Return (Details) - Restricted Share Units (RSUs), Performance-Based Awards - Share-based Payment Arrangement, Tranche One |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 2.13% |
Expected historical volatility | 58.30% |
Risk free interest rate | 1.42% |
Expected life (in years) | 3 years |
Pension and Other Postretirement Healthcare Benefits (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Pensions | ||||
Net periodic cost: | ||||
Service cost | $ 1 | $ 1 | $ 4 | $ 2 |
Interest cost | 4 | 6 | 13 | 15 |
Expected return on plan assets | (5) | (6) | (17) | (16) |
Net amortization of actuarial loss and prior service credit | 1 | 0 | 3 | 1 |
Total net periodic cost | 1 | 1 | 3 | 2 |
Other Postretirement Benefit Plans | ||||
Net periodic cost: | ||||
Total net periodic cost | $ 1 | $ 1 | $ 1 | $ 1 |
Pension and Other Postretirement Healthcare Benefits - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Multiemployer Plans, Pension | Netherlands | Cost of goods sold | ||||
Multiemployer Plans [Abstract] | ||||
Multiemployer contribution amount | $ 1 | $ 3 | $ 1 | $ 3 |
Other Postretirement Benefit Plans | ||||
Multiemployer Plans [Abstract] | ||||
Net periodic benefit cost | 1 | 1 | 1 | 1 |
Pensions | ||||
Multiemployer Plans [Abstract] | ||||
Net periodic benefit cost | 1 | $ 1 | 3 | $ 2 |
Employer contributions | 22 | |||
Pensions | Minimum | ||||
Multiemployer Plans [Abstract] | ||||
Expected future employer contributions, current fiscal year | 3 | 3 | ||
Pensions | Maximum | ||||
Multiemployer Plans [Abstract] | ||||
Expected future employer contributions, current fiscal year | 5 | $ 5 | ||
Pensions | Australia | ||||
Multiemployer Plans [Abstract] | ||||
Contributions by plan participant | $ 5 |
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