PR Newswire | Jul 29, 2020 05:12PM EDT

07/29 16:11 CDT

Tronox Reports Second Quarter 2020 Financial ResultsTiO2 Sales Volumes Consistent with Previously Issued Q2 OutlookTiO2 Prices Level and Zircon Prices Up 2 Percent SequentiallyMaintained Strong Margins STAMFORD, Conn., July 29, 2020

STAMFORD, Conn., July 29, 2020 /PRNewswire/ --

Second Quarter 2020 Financial Highlights:



?Revenue of $578 million

?Income from operations of $49 million; Net loss of $4 million

?Adjusted EBITDA of $142 million; Adjusted EBITDA margin of 25 percent (Non-GAAP)

Total Cristal acquisition synergies year-to-date of $107 million, with $84 ?million reflected in Adjusted EBITDA (Non-GAAP) and $23 million in taxes and other synergies; maintaining FY2020 total synergy target of $190 million, $140 million within EBITDA

?GAAP diluted loss per share of $0.03; Adjusted diluted EPS of $0.03 (Non-GAAP)

Due to the impacts of COVID-19, TiO[2] sales volumes declined 19 percent, ?consistent with previously issued Q2 outlook, and selling prices were level sequentially

Zircon sales volumes increased 2 percent sequentially as a result of ?shipment timing, and selling prices increased 2 percent driven by favorable product mix

Feedstock and other products sales decreased 43 percent sequentially, ?primarily due to the lack of mandated shipments of CP slag in the quarter and lower sales volumes of pig iron



Balance Sheet and Cash Flow:



Over $1.1 billion of available liquidity including $722 million in cash and?cash equivalents, excluding restricted cash of $27 million that includes $18 million held in escrow related to the TTI acquisition

?$56 million in Free Cash Flow for the second quarter driven by reductions in working capital

?Debt was $3.5 billion and debt, net of cash and cash equivalents was $2.8 billion

?No maturities on our term loan or notes until 2024



Strategic Developments:



Signed a definitive agreement to acquire the TiZir Titanium and Iron ?("TTI") business from Eramet S.A. for approximately $300 million or a synergy-adjusted multiple of ~5.2x FY 2019 Adjusted EBITDA

-Expected to achieve $15-20 million in run-rate synergies by year three

-Remains subject to certain customary closing conditions including regulatory approvals

Entered into an amended Jazan Technical Services Agreement ("TSA") under ?which Tronox will provide more comprehensive consulting and advisory services on the project

Tronox Holdings plc (NYSE:TROX) ("Tronox" or the "Company"), the world's leading integrated manufacturer of titanium dioxide pigment, today reported its financial results for the quarter ending June 30, 2020, as follows:

Summary of Financial Results for the Quarter Ending June 30, 2020

Reported Basis

(Millionsof Q2 2020 Q2 2019 Y-o-Y % ? Q1 2020 Q-o-Q % ? dollars)

Revenue $ 578 $ 791 (27%) $ 722 (20%)

TiO[2] 466 625 (25%) 580 (20%)

Zircon 68 88 (23%) 65 5%

Feedstockand other 44 78 (44%) 77 (43%)products

Net Income(Loss)from $ (4) $ (55) n/m $ 40 n/m ContinuingOps

Adjusted $ 142 $ 195 (27%) $ 174 (18%)EBITDA

AdjustedEBITDA 25% 25% - 24% 1 pt Margin %

Y-o-Y % ? Q-o-Q % ?

Volume Price Volume Price

TiO[2] (23%) (3%) (19%) 0%

LocalCurrency - (2%) - 0%Basis

Zircon (11%) (13%) 2% 2%

Pro Forma Basis

(Millionsof Q2 2020 Q2 2019 Y-o-Y % ? Q1 2020 Q-o-Q % ? dollars)

Revenue $ 578 $ 827 (30%) $ 722 (20%)

TiO[2] 466 657 (29%) 580 (20%)

Zircon 68 89 (24%) 65 5%

Feedstockand other 44 81 (46%) 77 (43%)products

Net Income(Loss) from $ (4) $ 32 n/m $ 40 n/m ContinuingOps

Adjusted $ 142 $ 200 (29%) $ 174 (18%)EBITDA

AdjustedEBITDA 25% 24% 1 pt 24% 1 pt Margin %

Y-o-Y % ? Q-o-Q % ?

Volume Price Volume Price

TiO[2] (27%) (3%) (19%) 0%

LocalCurrency - (2%) - 0%Basis

Zircon (12%) (13%) 2% 2%

CEO Commentary

Jeffry N. Quinn, chairman and chief executive officer, commented, "Tronox delivered solid financial results in the quarter despite the significant reduction in demand and other challenges associated with the COVID-19 pandemic. Our results were consistent with the outlook provided at the time of our first quarter earnings release. TiO2 volumes declined 19 percent quarter over quarter, and TiO2 pricing was sequentially flat. Zircon sales volumes and price were both up by 2 percent sequentially owing to shipment timing and favorable product mix. We delivered Adjusted EBITDA of $142 million and an Adjusted EBITDA margin of 25 percent, once again benefitting from the resiliency of our vertically integrated business model and synergies from the Cristal acquisition, as well as focused cost reduction actions that we implemented at the outset of the pandemic. I am pleased with our delivery of these results given the ongoing macroeconomic environment and the challenges the men and women of Tronox overcame in the quarter. As an organization, we have remained relentlessly focused on the health and safety of our employees, managing our ongoing operations, and preparing for the future. The efforts of our people to proactively implement stringent and prudent access protocols and other safeguards at all our worldwide locations preserved our ability to operate and continue to meet our customers' needs.

"During the quarter, we also signed a definitive agreement with Eramet S.A. to purchase TiZir's TTI facility. This highly strategic acquisition will further our vertical integration strategy by increasing our titanium feedstock production capacity, thereby enabling our ability to meet our internal feedstock requirements and better serve our pigment customers. The addition of the facility to our portfolio will reduce our costs by reducing our reliance on third party feedstock suppliers and presenting an opportunity for cost and operating synergies. We continue to work through customary closing conditions and regulatory approvals. As for Jazan, the amendment of the Jazan TSA will allow Tronox to increase technical and managerial resources devoted to the project as it continues to advance towards sustainable operations late in 2021.

"As we look to the third quarter, we are encouraged by the momentum carried forward from June, the strongest month of the second quarter. While the timing of re-opening of economies across the globe remains uncertain and subject to week-by-week developments, as of today, we anticipate TiO2 volumes to continue to improve in the third quarter relative to the second quarter and for the zircon market to remain relatively stable as compared to the last several quarters.

"We are utilizing our integrated business planning capabilities to ensure we continue to satisfy our customers' needs, providing the same high level of service our customers have grown to expect from Tronox, while prudently managing working capital. As a result of the successful implementation of cost savings and disciplined management of our capital expenditures, we are confident in our ability to generate strong free cash flow for the year. Available liquidity of over $1.1 billion is more than sufficient to fund the TTI acquisition and support our business."

Mr. Quinn concluded, "I am very pleased that we have continued to deliver on our commitments, especially considering the challenges presented by the continued global macroeconomic uncertainty due to COVID-19. Our ability to confront these challenges and protect our people and our business, all while delivering reliable, high-quality product for our customers is a demonstration of our capabilities as a leading TiO2 producer and the value of our vertically integrated business model."

Financial Summary for the Quarter Ending June 30, 2020

Tronox reported revenue of $578 million for the second quarter 2020, a decrease of 30 percent compared to second quarter 2019 revenues of $827 million on a pro forma basis. Income from operations of $49 million compared to $84 million in the year-ago quarter on a pro forma basis. Net loss attributable to Tronox was $4 million, or $0.03 per diluted share, compared to a net income from continuing operations attributable to Tronox of $26 million, or $0.17 per diluted share, in the year-ago quarter on a pro forma basis. Net loss attributable to Tronox in the second quarter 2020 included transaction costs related to the acquisition of TTI, integration costs related to the Cristal acquisition, and a tax valuation allowance that totaled $9 million or $0.06 per diluted share. Excluding these items, adjusted net income attributable to Tronox (Non-GAAP) was $5 million, or $0.03 per diluted share. Adjusted EBITDA of $142 million decreased 29 percent compared to $200 million on a pro forma basis in the prior-year quarter.

Note: Since Tronox and Cristal combined their respective businesses on April 10, 2019 and to assist in the following discussion of second quarter 2020 performance compared to the second quarter 2019, we have provided the results on both a pro forma basis and a reported basis.

Second Quarter 2020vs. Second Quarter 2019

Reported Basis

* Revenue of $578 million decreased 27 percent compared to $791 million * TiO2 sales of $466 million, including revenue from the acquired Cristal operations, decreased 25 percent compared to $625 million * Zircon sales of $68 million, including revenue from the acquired Cristal operations, decreased 23 percent from $88 million * Feedstock and other products sales of $44 million, including revenue from the acquired Cristal operations, decreased 44 percent from $78 million * Adjusted EBITDA of $142 million decreased 27 percent compared to $195 million * Selling, general and administrative ("SG&A") expenses were $80 million compared to $103 million * Interest expense of $47 million decreased from $54 million in the year-ago quarter

Pro Forma Basis

* Revenue of $578 million decreased 30 percent compared to $827 million in the year-ago quarter, driven by impacts to sales volumes due to COVID-19 * TiO2 sales of $466 million were 29 percent lower compared to $657 million; sales volumes decreased 27 percent; selling prices were 2 percent lower on a local currency basis and 3 percent lower on a U.S. dollar basis * Zircon sales of $68 million were 24 percent lower than $89 million in the year-ago quarter; sales volumes were 12 percent lower and selling prices were 13 percent lower * Feedstock and other products sales of $44 million decreased 46 percent from $81 million * Adjusted EBITDA of $142 million was 29 percent lower than $200 million in the year-ago quarter, driven primarily by lower sales volumes due to COVID-19, absence of deferred margin benefit, increased costs, and one-time costs related to our South African mining and beneficiation operations during the countrywide lockdown; this was partially offset by synergies, favorable foreign exchange rates, and improved ore grades at our Australian mine sites * SG&A expenses were $80 million compared to $85 million * Interest expense of $47 million decreased from $54 million in the year-ago quarter

Second Quarter 2020vs. First Quarter 2020

Reported Basis

* Revenue of $578 million decreased 20 percent compared to $722 million * TiO2 sales of $466 million were 20 percent lower than $580 million; sales volumes decreased 19 percent - driven by impacts from regional lockdowns due to COVID-19 - and selling prices were level sequentially * Zircon sales of $68 million increased 5 percent from $65 million, driven by a 2 percent increase in sales volumes that was a result of a benefit from shipment timing and a 2 percent increase in selling prices due to favorable product mix * Feedstock and other products sales of $44 million decreased 43 percent compared to $77 million, due to a lack of mandated shipments of CP slag, lower sales volumes of pig iron, and an opportunistic sale of excess ilmenite in Q1 that did not repeat in Q2 * Adjusted EBITDA of $142 million decreased 18 percent compared to $174 million, driven primarily by lower TiO2 sales volumes due to COVID-19, lower feedstock and other product volumes, increased costs, and one-time costs related to our South African mining and beneficiation operations during the countrywide lockdown; this was partially offset by synergies, favorable foreign exchange rates, and improved ore grades at our Australian mine sites * SG&A expenses were $80 million compared to $94 million, due to cost reductions * Interest expense of $47 million increased from $45 million in the previous quarter, due to new debt issuance

Other Financial Information

* As of June 30, 2020, debt was $3.5 billion and debt, net of cash and cash equivalents was $2.8 billion * Liquidity was over $1.1 billion as of June 30, 2020, comprised of cash and cash equivalents of $722 million and $401 million available under revolving credit agreements * Restricted cash of $27 million includes $18 million held in escrow related to the TTI acquisition * In the second quarter 2020, capital expenditures were $44 million and depreciation, depletion and amortization expense was $72 million * Free Cash Flow for the quarter was $56 million, primarily due to working capital improvements

Webcast Conference Call

Tronox will conduct a webcast conference call on Thursday, July 30, 2020 at 8:30 a.m. ET (New York). The live call is open to the public via internet broadcast and telephone.

Internet Broadcast: https://investor.tronox.comDial-in Telephone Numbers:United States: +1.866.270.1533 International: +1.412.317.0797

Conference Call Presentation Slideswill be used during the conference call and will be available on our investor relations website: https://investor.tronox.com

Conference Call Replay: Available via the internet and telephone beginning on July 30, 2020, 1:00 p.m. ET (New York), until August 4, 2020, 1:00 p.m. ET (New York)Internet Replay https://investor.tronox.comReplay Dial-in Telephone Numbers:United States: +1.877.344.7529International: +1.412.317.0088Replay Access Code: 10145759

Upcoming Conferences

During the third quarter 2020, a member of management is scheduled to present at the following conferences:

* Jefferies Virtual Industrials Conference, August 5, 2020 * Credit Suisse 33rd Annual Virtual Basic Materials Conference, September 16 - 17, 2020

Accompanying conference and meeting materials will be available at http://investor.tronox.com

About Tronox

Tronox Holdings plc is one of the world's leading producers of high-quality titanium products, including titanium dioxide pigment, specialty-grade titanium dioxide products and high-purity titanium chemicals; and zircon. We mine titanium-bearing mineral sands and operate upgrading facilities that produce high-grade titanium feedstock materials, pig iron and other minerals. With nearly 7,000 employees across six continents, our rich diversity, unmatched vertical integration model, and unparalleled operational and technical expertise across the value chain, position Tronox as the preeminent titanium dioxide producer in the world. For more information about how our products add brightness and durability to paints, plastics, paper and other everyday products, visit tronox.com.

Forward Looking Statements

Statements in this release that are not historical are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance including the effects of the COVID-19 pandemic and anticipated synergies based on our growth and other strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance, actual synergies, or achievements to differ materially from the results, level of activity, performance, anticipated synergies or achievements expressed or implied by the forward-looking statements. Significant risks and uncertainties may relate to, but are not limited to, the risk that a regulatory approval that may be required for the TTI transaction is delayed, is not obtained or is obtained subject to conditions that are not anticipated; the risk that the TTI transaction does not close or that the related transaction agreement is terminated; the risk that expected synergies, operating efficiencies and other benefits expected from the TTI transaction will not be realized or will not be realized within the expected time period; business and market disruptions related to the COVID-19 pandemic, market conditions and price volatility for titanium dioxide, zircon and other feedstock materials, as well as global and regional economic downturns, including as a result of the COVID-19 pandemic, that adversely affect the demand for our end-use products; disruptions in production at our mining and manufacturing facilities; and other financial, economic, competitive, environmental, political, legal and regulatory factors. These and other risk factors are discussed in the Company's filings with the Securities and Exchange Commission (SEC).

Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for our management to predict all risks and uncertainties, nor can management assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance, synergies or achievements. Neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Unless otherwise required by applicable laws, we undertake no obligation to update or revise any forward-looking statements, whether because of new information or future developments.

Use of Non-U.S. GAAP Financial Information

To provide investors and others with additional information regarding the financial results of Tronox Holdings plc, we have disclosed in this press release certain non-U.S. GAAP operating performance measures of EBITDA, Adjusted EBITDA, Adjusted EBITDA margin and Adjusted net loss attributable to Tronox, including its presentation on a per share basis, and a non-U.S. GAAP liquidity measure of Free Cash Flow. These non-U.S. GAAP financial measures are a supplement to and not a substitute for or superior to, the Company's results presented in accordance with U.S. GAAP. The non-U.S. GAAP financial measures presented by the Company may be different from non-U.S. GAAP financial measures presented by other companies. Specifically, the Company believes the non-U.S. GAAP information provides useful measures to investors regarding the Company's financial performance by excluding certain costs and expenses that the Company believes are not indicative of its core operating results. The presentation of these non-U.S. GAAP financial measures is not meant to be considered in isolation or as a substitute for results or guidance prepared and presented in accordance with U.S. GAAP. A reconciliation of the non-U.S. GAAP financial measures to U.S. GAAP results is included herein.

Management believes these non-U.S. GAAP financial measures:

* Reflect the ongoing business of Tronox Holdings plc in a manner that allows for meaningful period-to-period comparison and analysis of trends in its business, as they exclude income and expense that are not reflective of ongoing operating results; * Provide useful information to investors and others in understanding and evaluating the operating results and future prospects of Tronox Holdings plc; * Provide an additional view of the operating performance of the Company by adding interest expense & income, income taxes, depreciation, depletion and amortization to the net income. Further adjustments due to gain (loss) on extinguishment of debt, stock-based compensation charges, transaction costs associated with acquisitions, integration costs, purchase accounting adjustments, foreign currency re-measurements, impairments, settlements of pension and postretirement plans, impacts of tax settlements on non-income related taxes, severance expense, and noncash pension and postretirement expense and accretion expense are made to exclude items that are either non-cash or unusual in nature; * Adjusted EBITDA is one of the primary measures management uses for planning and budgeting processes and to monitor and evaluate financial and operating results. Adjusted EBITDA is not a recognized term under U.S. GAAP and does not purport to be an alternative to measures of our financial performance as determined in accordance with U.S. GAAP, such as net income (loss). Because other companies may calculate EBITDA and Adjusted EBITDA differently than Tronox, EBITDA may not be, and Adjusted EBITDA as presented in this release is not, comparable to similarly titled measures reported by other companies; and * We believe that the non-U.S. GAAP financial measure "Adjusted net income (loss) attributable to Tronox Holdings plc" and its presentation on a per share basis provide useful information about our operating results to investors and securities analysts. We also believe that excluding the effects of these items from operating results allows management and investors to compare more easily the financial performance of our underlying businesses from period to period.

Unaudited Pro Forma Financial Information

On April 10, 2019, we announced the completion of the acquisition of the TiO2 business of Cristal which impacts the comparability of the reported results for the second quarter of 2020 compared to the second quarter of 2019. Since Tronox and Cristal have combined their respective businesses effective with the merger date of April 10, 2019, the three and six months ended June 30, 2020 reflect the results of the combined business, while the three and six months ended June 30, 2019 reflect the results of the combined business from April 10, 2019. To assist with a discussion of the second quarter of 2020 and the second quarter of 2019 results on a comparable basis, certain supplemental unaudited pro forma income statement and Adjusted EBITDA information is provided on a consolidated basis and is referred to as "pro forma information." The pro forma information has been prepared on a basis consistent with Article 11 of Regulation S-X, assuming the merger and merger-related divestitures of Cristal's North American TiO2 business and the 8120 paper laminate grade had been consummated on January 1, 2018. In preparing this pro forma information, the historical financial information has been adjusted to give effect to pro forma adjustments that are (i) directly attributable to the business combination and other transactions presented herein, such as the merger-related divestitures, (ii) factually supportable, and (iii) expected to have a continuing impact on the combined entity's consolidated results. The pro forma information is based on management's assumptions and is presented for illustrative purposes and does not purport to represent what the results of operations would actually have been if the business combination and merger-related divestitures had occurred as of the dates indicated or what the results would be for any future periods. Also, the pro forma information does not include the impact of any revenue, cost or other operating synergies in the periods prior to the acquisition that may result from the business combination or any related restructuring costs.

Media Contact: Melissa Zona+1.636.751.4057

Investor Contact: Jennifer Guenther+1.646.960.6598

TRONOX HOLDINGS PLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. GAAP)

(UNAUDITED)

(Millions of U.S. dollars, except share and per share data)

Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Net sales $ 578 $ 791 $ 1,300 $ 1,181

Cost of goods sold 449 672 996 979

Contract loss - 19 - 19

Gross profit 129 100 304 183

Selling, general and 80 103 174 170administrative expenses

Restructuring - 10 2 10

Income (loss) from operations 49 (13) 128 3

Interest expense (47) (54) (92) (103)

Interest income 2 3 5 12

Loss on extinguishment of - - - (2)debt

Other income, net 2 5 11 3

Income (loss) from continuingoperations before income 6 (59) 52 (87)taxes

Income tax (provision) (10) 4 (16) 2benefit

Net (loss) income from (4) (55) 36 (85)continuing operations

Net loss from discontinued - (1) - (1)operations, net of tax

Net (loss) income (4) (56) 36 (86)

Net income attributable to - 6 8 10noncontrolling interest

Net (loss) incomeattributable to Tronox $ (4) $ (62) $ 28 $ (96)Holdings plc

Net (loss) income per share,basic:

Continuing operations $ (0.03) $ (0.41) $ 0.19 $ (0.69)

Discontinued operations $ - $ - $ - $ -

Net (loss) income per share, $ (0.03) $ (0.41) $ 0.19 $ (0.69)basic

Net (loss) income per share,diluted:

Continuing operations $ (0.03) $ (0.41) $ 0.19 $ (0.69)

Discontinued operations $ - $ - $ - $ -

Net (loss) income per share, $ (0.03) $ (0.41) $ 0.19 $ (0.69)diluted

Weighted average sharesoutstanding, basic (in 143,465 150,686 143,080 137,569thousands)

Weighted average sharesoutstanding, diluted (in 143,465 150,686 143,644 137,569thousands)

Other Operating Data:

Capital expenditures 44 56 82 81

Depreciation, depletion and 72 84 143 131amortization expense

TRONOX HOLDINGS PLC

RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES

(UNAUDITED)

(Millions of U.S. dollars, except share and per share data)

RECONCILIATION OF NET (LOSS) INCOME FROM CONTINUING OPERATIONS

ATTRIBUTABLE TO TRONOX HOLDINGS PLC (U.S. GAAP)

TO ADJUSTED NET INCOME (LOSS) FROM CONTINUING OPERATIONS

ATTRIBUTABLE TO TRONOX HOLDINGS PLC (NON-U.S. GAAP)

Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Net (loss) incomeattributable to Tronox $ (4) $ (62) $ 28 $ (96)Holdings plc (U.S. GAAP)

Net income from discontinuedoperations, net of tax (U.S. - (1) - (1)GAAP)

Net (loss) income fromcontinuing operationsattributable to Tronox $ (4) $ (61) $ 28 $ (95)Holdings plc (U.S. GAAP)

Inventory step-up (a) - 50 - 50

Contract loss (b) - 14 - 14

Transaction costs (c) 4 21 4 29

Restructuring (d) - 10 2 10

Integration costs (e) 3 4 10 4

Loss on extinguishment of - - - 2debt (f)

Tax valuation allowance (g) 2 - 2 -

Charge for capital gains tax - 1 - 2payment to Exxaro (h)

Adjusted net income fromcontinuing operationsattributable to Tronox $ 5 $ 39 $ 46 $ 16Holdings plc (non-U.S. GAAP) (1)

Diluted net (loss) incomeper share from continuing $ (0.03) $ (0.41) $ 0.19 $ (0.69)operations (U.S. GAAP)

Inventory step-up, per - 0.33 - 0.36share

Contract loss, per share - 0.09 - 0.10

Transaction costs, per share 0.03 0.14 0.03 0.21

Restructuring, per share - 0.07 0.01 0.07

Integration costs, per share 0.02 0.03 0.07 0.03

Loss on extinguishment of - - - 0.02debt, per share

Tax valuation allowance, per 0.01 - 0.01 -share

Charge for capital gains tax - 0.01 - 0.02payment to Exxaro, per share

Diluted adjusted net incomeper share from continuingoperations attributable to $ 0.03 $ 0.26 $ 0.31 $ 0.12Tronox Holdings plc(non-U.S. GAAP)

Weighted average sharesoutstanding, diluted (in 143,754 151,538 143,644 138,915thousands)

(1) Only the restructuring, inventory step-up and contract loss amounts havebeen tax impacted. No income tax impacts have been given to other items asthey were recorded in jurisdictions with full valuation allowances.

(a) Represents a net-of-tax charge related to the recognition of a step-up invalue of inventories as a result of purchase accounting.

(b) Represents a net-of-tax charge for the estimated losses we expect to incurunder the supply agreement with Venator which was recorded in "Contract loss"in our Consolidated Statements of Operations.

(c) Represents transaction costs primarily associated with the CristalTransaction in 2019 and TTI Transaction in 2020 which were recorded in"Selling, general and administrative expenses" in the unaudited CondensedConsolidated Statements of Operations.

(d) Represents amounts for employee-related costs, including severance, net oftax.

(e) Represents Integration costs associated with the Cristal acquisition afterthe acquisition which were recorded in "Selling, general and administrativeexpenses" in the unaudited Condensed Consolidated Statements of Operations.

(f) 2019 amounts represent the loss in connection with the modification of theWells Fargo Revolver and termination of the ABSA Revolver and a voluntaryprepayment made on the Term Loan Facility.

(g) Represents the valuation allowance established against the deferred taxassets within our Saudi Arabia jurisdiction.

(h) Represents the expected payment to Exxaro for capital gains tax on thedisposal of its ordinary shares in Tronox Holding plc included in "Otherexpense, net" in the unaudited Condensed Consolidated Statements ofOperations.

TRONOX HOLDINGS PLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(Millions of U.S. dollars, except share and per share data)

June 30, 2020 December 31, 2019

ASSETS

Current Assets

Cash and cash equivalents $ 722 $ 302

Restricted cash 27 9

Accounts receivable (netof allowance for creditlosses of $4 million and 439 482$5 million as of June 30,2020 and December 31,2019, respectively)

Inventories, net 1,174 1,131

Prepaid and other assets 135 143

Income taxes receivable 10 6

Total current assets 2,507 2,073

Noncurrent Assets

Property, plant and 1,642 1,762equipment, net

Mineral leaseholds, net 778 852

Intangible assets, net 195 208

Lease right of use assets, 86 101net

Deferred tax assets 103 110

Other long-term assets 171 162

Total assets $ 5,482 $ 5,268

LIABILITIES AND EQUITY

Current Liabilities

Accounts payable $ 322 $ 342

Accrued liabilities 305 283

Short-term lease 37 38liabilities

Short-term debt 13 -

Long-term debt due within 46 38one year

Income taxes payable 4 1

Total current liabilities 727 702

Noncurrent Liabilities

Long-term debt, net 3,427 2,988

Pension and postretirement 151 160healthcare benefits

Asset retirement 145 142obligations

Environmental liabilities 70 65

Long-term lease 48 62liabilities

Deferred tax liabilities 145 184

Other long-term 41 49liabilities

Total liabilities 4,754 4,352

Commitments and - -Contingencies

Shareholders' Equity

Tronox Holdings plcordinary shares, par value$0.01 - 143,523,476 sharesissued and outstanding at 1 1June 30, 2020 and141,900,459 shares issuedand outstanding atDecember 31, 2019

Capital in excess of par 1,854 1,846value

Accumulated deficit (485) (493)

Accumulated other (768) (606)comprehensive loss

Total Tronox Holdings plc 602 748shareholders' equity

Noncontrolling interest 126 168

Total equity 728 916

Total liabilities and $ 5,482 $ 5,268equity

TRONOX HOLDINGS PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(Millions of U.S. dollars)

Six Months Ended June 30,

2020 2019

Cash Flows from Operating Activities:

Net income (loss) $ 36 $ (86)

Net income from discontinued operations, net of tax - $ (1)

Net income (loss) from continuing operations $ 36 $ (85)

Adjustments to reconcile net income (loss) from continuingoperations to net cash provided by operating activities,continuing operations:

Depreciation, depletion and amortization 143 131

Deferred income taxes 6 (13)

Share-based compensation expense 11 15

Amortization of deferred debt issuance costs and discount 5 4on debt

Loss on extinguishment of debt - 2

Contract loss - 19

Acquired inventory step-up recognized in earnings - 55

Other non-cash items affecting net (loss) income from 31 17continuing operations

Changes in assets and liabilities:

(Increase) decrease in accounts receivable, net of 25 (43)allowance for credit losses

(Increase) decrease in inventories, net (117) 31

Increase in prepaid and other assets (18) (8)

(Decrease) increase in accounts payable and accrued (16) 32liabilities

Net changes in income tax payables and receivables (3) (8)

Changes in other non-current assets and liabilities (31) (16)

Cash provided by operating activities - continuing 72 133operations

Cash Flows from Investing Activities:

Capital expenditures (82) (81)

Cristal Acquisition - (1,603)

Proceeds from sale of Ashtabula - 707

Insurance proceeds 1 10

Loans (12) (25)

Proceeds from sale of assets 1 1

Cash used in investing activities - continuing operations (92) (991)

Cash Flows from Financing Activities:

Repayments of long-term debt (15) (215)

Proceeds from long-term debt 500 222

Proceeds from short-term debt 13 -

Repurchase of common stock - (252)

Acquisition of noncontrolling interest - (148)

Call premium paid - -

Debt issuance costs (9) (4)

Proceeds from the exercise of options and warrants - -

Dividends paid (20) (14)

Restricted stock and performance-based shares settled in (3) (6)cash for withholding taxes

Cash provided by (used in) financing activities - 466 (417)continuing operations

Discontinued Operations:

Cash used in operating activities - (15)

Cash used in investing activities - (1)

Net cash flows used by discontinued operations - (16)

Effects of exchange rate changes on cash and cash (8) 1equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and 438 (1,290)restricted cash

Cash, cash equivalents and restricted cash at beginning of 311 1,696period

Cash, cash equivalents and restricted cash at end of period $ 749 $ 406

TRONOX HOLDINGS PLC

RECONCILIATION OF NET LOSS TO EBITDA AND ADJUSTED EBITDA (NON-U.S. GAAP)

(UNAUDITED)

(Millions of U.S. dollars)

Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Net (loss) income (U.S. GAAP) $ (4) $ (56) $ 36 $ (86)

Income from discontinued operations, net - (1) - (1)of tax (U.S. GAAP)

Net (loss) income from continuing (4) (55) 36 (85)operations (U.S. GAAP)

Interest expense 47 54 92 103

Interest income (2) (3) (5) (12)

Income tax provision (benefit) 10 (4) 16 (2)

Depreciation, depletion and amortization 72 84 143 131expense

EBITDA (non-U.S. GAAP) 123 76 282 135

Inventory step-up (a) - 55 - 55

Contract loss (b) - 19 - 19

Share-based compensation (c) 2 7 11 15

Transaction costs (d) 4 21 4 29

Restructuring (e) - 10 2 10

Integration costs (f) 3 4 10 4

Loss on extinguishment of debt (g) - - - 2

Foreign currency remeasurement (h) 2 (3) (8) (4)

Charge for capital gains tax payment to - 1 - 2Exxaro (i)

Other items (j) 8 5 14 8

Adjusted EBITDA (non-U.S. GAAP) $142 $195 $315 $275

(a) 2019 amount represents a pre-tax charge related to the recognition of astep-up in value of inventories as a result of purchase accounting.

(b) 2019 amount represents a pre-tax charge for the estimated losses weexpect to incur under the supply agreement with Venator.

(c) Represents non-cash share-based compensation.

(d) 2020 and 2019 amounts represent transaction costs associated with theTTI Transaction and Cristal Transaction, respectively, which were recorded in"Selling, general and administrative expenses" in the unaudited CondensedConsolidated Statements of Operations.

(e) Represents amounts for employee-related costs, including severance.

(f) Represents integration costs associated with the Cristal acquisitionafter the acquisition which were recorded in "Selling, general andadministrative expenses" in the unaudited Condensed Consolidated Statementsof Operations.

(g) 2019 amount represents the loss in connection with the modification ofthe Wells Fargo Revolver and termination of the ABSA Revolver.

(h) Represents realized and unrealized gains and losses associated withforeign currency remeasurement related to third-party and intercompanyreceivables and liabilities denominated in a currency other than thefunctional currency of the entity holding them, which are included in "Otherincome (expense), net" in the unaudited Condensed Consolidated Statements ofOperations.

(i) Represents the payment owed to Exxaro for capital gains tax on thedisposal of its ordinary shares in Tronox Holdings plc included in and "Otherincome (expense), net" in the unaudited Condensed Consolidated Statements ofOperations.

(j) Includes noncash pension and postretirement costs, asset write-offs,accretion expense and other items included in "Selling general andadministrative expenses", "Cost of goods sold" and "Other income (expense),net" in the unaudited Condensed Consolidated Statements of Operations.

TRONOX HOLDINGS PLC

FREE CASH FLOW (NON-U.S. GAAP)

(UNAUDITED)

(Millions of U.S. dollars)

The following table reconciles cash used in operating activities to free cashflow for the six months ended June 30, 2020:

Consolidated

Cash provided by operating activities - continuing $ 72operations

Capital expenditures (82)

Free cash flow (non-U.S. GAAP) $ (10)

TRONOX HOLDINGS PLC

PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (U.S. GAAP)

(UNAUDITED)

(Millions of U.S. dollars, except share and per share data)

Proforma amounts Proforma amounts

Six Months Ended June 30, June 30,

2020 2019 2020 2019

Net sales $ 578 $ 827 $ 1,300 $ 1,547

Cost of goods sold 449 648 996 1,227

Gross profit 129 179 304 320

Selling, general and administrative 80 85 174 180expenses

Restructuring - 10 2 10

Income from operations 49 84 128 130

Interest expense (47) (54) (92) (109)

Interest income 2 3 5 6

Loss on extinguishment of debt - - - (2)

Other expense, net 2 5 11 2

Income from continuing operations 6 38 52 27before income taxes

Income tax (provision) benefit (10) (6) (16) (13)

Net (loss) income from continuing (4) 32 36 14operations

Net income attributable to - 6 8 11noncontrolling interest

Net (loss) income from continuingoperations attributable to Tronox $ (4) $ 26 $ 28 $ 3Holdings plc

Net (loss) income from continuing $ (0.03) $ 0.17 $ 0.19 $ 0.02operations per share, diluted

Weighted average shares outstanding, 143,465 155,254 143,644 159,470diluted (in thousands)

TRONOX HOLDINGS PLC

PRO FORMA RECONCILIATION OF NON-U.S. GAAP FINANCIAL MEASURES

(UNAUDITED)

(Millions of U.S. dollars, except share and per share data)

RECONCILIATION OF PRO FORMA NET (LOSS) INCOME FROM CONTINUING OPERATIONS

ATTRIBUTABLE TO TRONOX HOLDINGS PLC (U.S. GAAP)

TO ADJUSTED NET INCOME (LOSS) FROM CONTINUING OPERATIONS

ATTRIBUTABLE TO TRONOX HOLDINGS PLC (NON-U.S. GAAP)

Proforma amounts Proforma amounts

Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Net (loss) income fromcontinuing operations $ (4) $ 26 $ 28 $ 3attributable to TronoxHoldings plc (U.S. GAAP)

Transaction costs 4 - 4 -

Restructuring - 10 2 10

Integration costs 3 4 10 4

Separation costs related to - - - -divested business

Loss on extinguishment of - - - 2debt

Tax valuation allowance 2 - 2 -

Charge for capital gains tax - 1 - 2payment to Exxaro

Adjusted net incomeattributable to Tronox $ 5 $ 41 $ 46 $ 21Holdings plc (non-U.S. GAAP)

Diluted net (loss) incomeper share from continuing $ (0.03) $ 0.17 $ 0.19 $ 0.02operations (U.S. GAAP)

Transaction costs, per share 0.03 - 0.03 -

Restructuring, per share - 0.06 0.01 0.06

Integration costs, per share 0.02 0.03 0.07 0.03

Loss on extinguishment of - - - 0.01debt, per share

Tax valuation allowance, per 0.01 - 0.01 -share

Charge for capital gains tax - 0.01 - 0.01payment to Exxaro, per share

Diluted adjusted net incomeper share attributable to $ 0.03 $ 0.27 $ 0.31 $ 0.13Tronox Holdings plc(non-U.S. GAAP)

Weighted average sharesoutstanding, diluted (in 143,754 155,254 143,644 159,470thousands)

TRONOX HOLDINGS PLC

PRO FORMA RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA(NON-U.S. GAAP)

(UNAUDITED)

(Millions of U.S. dollars)

Pro Forma Pro Forma Three Months Ended Six Months Ended June 30, June 30,

2020 2019 2020 2019

Net (loss) income from continuing $ (4) $ 32 $ 36 $ 14operations (U.S. GAAP)

Interest expense 47 54 92 109

Interest income (2) (3) (5) (6)

Income tax provision 10 6 16 13

Depreciation, depletion and amortization 72 87 143 174expense

EBITDA (non-U.S. GAAP) 123 176 282 304

Share-based compensation 2 7 11 15

Transaction costs 4 - 4 -

Restructuring - 10 2 10

Integration costs 3 4 10 4

Loss on extinguishment of debt - - - 2

Foreign currency remeasurement 2 (3) (8) (4)

Charge for capital gains tax payment to - 1 - 2Exxaro

Other items 8 5 14 8

Adjusted EBITDA (non-U.S. GAAP) $142 $200 $315 $341

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SOURCE Tronox Holdings plc