T R O N O X H O L D I N G S P L C 2 0 2 2 A N N U A L R E P O R T
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Clearly differentiated.
2 0 2 2 H I G H L I G H T S
FINANCIAL HIGHLIGHTS
(Millions of U.S. dollars, except share and per share amounts)(1)
Sales
Net income
Diluted income per share
Dividend paid per share
Total assets
Shares outstanding (at December 31)
$ 3.454 billion IN REVENUE
$ 170 million
FREE CASH FLOW GENERATED
25.3 %
EBITDA MARGIN
9 TiO22 PIGMENT FACILITIES
6 MINES
5 UPGRADING FACILITIES
≈ 6,600 EMPLOYEES WORLDWIDE
≈ 1,200 CUSTOMERS IN 120 COUNTRIES
$ 1.9+ million
INVESTED IN OUR COMMUNITIES
2022
2021
2020
$3,454
$ 500
$ 3.16
$ 0.50
$6,306
154,496,923
$3,572
$ 303
$ 1.81
$ 0.36
$5,987
153,934,677
$2,758
$ 995
$ 6.69
$ 0.28
$6,568
143,557,479
(1) The following information is from our Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on February 22, 2023.
L E T T E R T O S H A R E H O L D E R S
Dear Fellow Shareholders,
2022 was a tale of two halves. It started strong with high
demand for titanium dioxide products carrying over from
the post-Covid rebound of 2021. However, as the world
continued to face challenges related to disrupted supply
chains, increased prices for raw materials and geopolitical
impacts, the second half of the year saw a rapid decline
in demand from downstream users as well as inflationary
pressures. While this has cast a cloud of uncertainty over
the economic prospects for businesses around the world
in 2023, Tronox is well positioned to respond to these
challenges and deliver on our commitments.
Clearly Differentiated
In June, we held our second Investor Day as a transformed
company since the acquisition of Cristal in 2019. It was a
privilege to share Tronox’s opportunities, competitive
advantages, operations, ESG achievements, goals and
long-term strategy with our investors and analysts. Our
message endures – our clearly differentiated, vertical
integration strategy has proven to be a significant competitive
advantage, particularly in the current market environment.
Our vertically integrated business model ensures consistent
and secure supply for our customers. Our broad geographic
footprint and strong balance sheet enable us to weather
the economic downturn and emerge from it in a position
of strength.
We remain committed to purposeful and responsible
investments in our people, operations and product portfolio
to deliver on our sustainability and business commitments.
Safety and Sustainability
We are proud to report on the great strides made in our
safety and sustainability performance. We continue to
implement our SHEQ strategy across our operations. We
believe good safety performance is no accident and can
be steadily improved by unrelenting focus and hard work.
When teams collaboratively plan and take precautions to
avoid hazards, we ensure that, even in the event of failure,
our teams fail safely. To embed this philosophy, we launched
the Leading Safety Indicator program in 2022 to reward sites
for reducing the risk of accidents by thinking proactively and
making the work environment safer before accidents happen.
As a result, more than 2,500 safety-related improvements
were implemented at our work sites around the world in 2022,
reducing frontline risk. We also placed special attention on
contractor safety in 2022 and are experiencing improvements
as a result. As we continue on this journey of improvement,
working to engage the hearts and minds of our people and
their “why” to work safely, we seek a decrease in the total
number of injuries. In September, we experienced a global,
injury-free month. This milestone is a testament to our
approximately 6,600 employees around the world and a
reminder that, with a relentless focus on safety, zero harm
is possible.
Along with safety, sustainability is at the heart of
everything we do. Tronox has always operated with
sustainability integrated into our strategy, operations
and culture. We strive to be responsible stewards of the
environment, a safe and inclusive employer, a respectful
neighbor to our host communities, and a manufacturer of
products that contribute to a cleaner, more sustainable
planet. To this end, we improved our sustainability ratings
in 2022, and announced a significant renewable energy
TOTAL SHAREHOLDER RETURN*
12/31/17
12/31/18
12/31/19
12/31/20
12/31/21
12/31/22
$74.88
S&P 500**
S&P 400 Materials
S&P Midcap 400
Chemicals
Tronox
(*) $100 investment in stock or index.
Assumes reinvestment of dividends.
(**) Index is utilized in the Company’s
annual report.
Copyright© 2022 Standard & Poor’s, a
division of S&P Global. All rights reserved.
200
150
100
50
200
150
100
50
0
L E T T E R T O S H A R E H O L D E R S
project in South Africa that will use solar power to provide
approximately 40% of our South African electricity needs
and lower our worldwide scope 1 and 2 emissions by
approximately 13% compared to our 2019 baseline.
Our GHG emissions teams around the world have
developed a path to achieving our 2025 and 2030 carbon
reduction goals and are currently building regional GHG
emission reduction roadmaps that will be integral to meeting
our 2050 net zero goal.
Additionally, teams at multiple plant sites have achieved
production efficiency that drove emissions and waste
reductions, the best practices of which will be shared
across the Tronox network.
Giving back to the communities in which we operate is a
mainstay of our operations. We build meaningful relationships
through STEM education and improved learning experiences,
by promoting equal rights and diversity, and by supporting
the health, sustainability and environment of our regions.
Our employees actively engage with our local communities
through volunteerism and dialogue.
Our tangible progress demonstrates our commitment
to being a leader when it comes to corporate sustainability
and protection of the environment.
Strategic Initiatives Continue
While we have taken steps to manage costs, prioritize
capital expenditures, align mine expansion projects with
forecasted demand and manage our working capital, we
remain committed to the transformational journey that is
critical to our long-term success. Project newTRON, our
digital and business transformation program, reached
important milestones in 2022, including design completion
and deployment of the first release to a portion of our
Australian operations. We are revising the schedule for
this multi-year program in response to current economic
conditions; however, we will remain committed to the
program and delivering on the value newTRON brings
to the organization in the coming years.
We continue to strengthen our vertical integration
model with the development of the Atlas Campaspe mine
in Eastern Australia. Atlas, expected to replace feedstock
supply from our existing Snapper/Ginkgo mines as their
end nears, finished construction in 2022 and completed
commissioning in January 2023. While we encountered
delays due to the historic flooding in New South Wales,
the mine is currently producing valuable feedstock and
will be an important source of zircon, rutile and high grade
ilmenite in 2023.
As we have highlighted previously, vertical integration
investments and newTRON are key projects to support
our medium- and long-term profitable growth initiatives.
We are also realizing increasing value from higher
value co-products streams, including monazite, a mineral
which contains many of the most sought after rare earth
elements. While we have traditionally sold our monazite
as a waste product in a relatively unconcentrated form,
we are now looking at ways to upgrade the rare earth
content of what we sell to extract more value from our
mineral resources. The demand for the types of rare earth
elements found in our monazite reserves is increasing
dramatically given their use in many facets of the emerging
green economy, including permanent magnets for electric
vehicle motors and wind turbines. This provides an attractive
growth opportunity for Tronox to not only generate incremental
earnings, but also support growth in the renewable
energy space.
REVENUE FROM PRODUCT SALES
TiO2 SALES VOLUME DISTRIBUTION BY END USE
78% TiO2
13% Zircon
9% Other Products
$3.45 BILLION
77% Paints and Coatings
16% Plastics
7% Paper and Specialty
1.1 MILLION TONS* (*) Nameplate capacity
driving operational excellence, and realizing value from our key
capital projects to enhance our vertically integrated portfolio.
We employ a robust process as a part of our forecasting
reviews that enable us to plan for a variety of economic
scenarios. Combined with our enterprise optimization model,
we are able to react swiftly, and optimize our portfolio. We
continue to see the benefits of our vertical integration and
margin stability initiatives in our financial results. Our
consistent margin performance versus our competitors
demonstrates Tronox is the equity of choice in this space.
One of our Tronox values is: We honor our responsibility
to create value for our stakeholders. We would like to thank
the 6,600 employees of Tronox who live all of our values,
demonstrate commitment and resilience, and enable us to
deliver on our promises.
Sincerely,
John Romano
Co-Chief Executive Officer
Jean-François Turgeon
Co-Chief Executive Officer
Investing in Our People
There is no question that our people are our best asset.
Building a culture where our employees thrive has always
been a priority to Tronox. We are proud that our global
workforce brings varying backgrounds and perspectives,
and we encourage an environment where all people feel
valued and respected. Through our Tronox Diversity &
Inclusion Network (TDIN), we now have D&I committees in
all regions who are focused on building a workforce that is
reflective of our communities, fostering an inclusive culture
and developing diverse talent.
We also have made great strides in employee wellness
with a number of regional initiatives to help employees with
both physical and mental health challenges on the heels of
the COVID pandemic. From health screenings and fitness
promotions to mental health seminars and resources, we’re
supporting our people in achieving their wellness goals.
Financial Strength and Flexibility
At the beginning of 2022, we completed a significant
refinancing that strengthened our balance sheet
considerably resulting in lower debt and annual cash
interest payments, increased prepayable debt, and the
extension of any significant principal repayment until
2028. The timing of the refinancing proved particularly
fortuitous given the increased interest rate environment
and rapid decline in demand which occurred in the
second half of the year.
As a result of the uncertain macroeconomic backdrop,
we took aggressive action to adjust production, working
capital and capex to the new reality. We remain focused on
the levers within our control: aligning production to market
demand, prudently managing cash, lowering operating costs,
SALES REVENUE DISTRIBUTION BY GEOGRAPHY
FULL-TIME EMPLOYEES BY REGION
38% Europe, Middle East and Africa
31% Asia-Pacific
23% North America
8% South and Central America
$3.45 BILLION
32% South Africa
19% Australia
14% Europe
11% Asia-Pacific
6,600 EMPLOYEES
10% North America
9% KSA
5% South America
C O R P O R A T E I N F O R M A T I O N
Board of Directors
ILAN KAUFTHAL(3*)
Chair of the Board,
Tronox Holdings plc,
Eastwind Advisors
PETER B. JOHNSTON(1,2)
Former Interim Chief
Executive Officer, Tronox
Limited; Former Global
Head of Nickel Assets,
Glencore
GINGER M. JONES(1*,2)
Former Senior Vice
President and Chief
Financial Officer, Cooper
Tire & Rubber Company
SIPHO NKOSI(2,3)
Former Chief Executive
Officer, Exxaro Resources
VANESSA GUTHRIE(1,3)
Former Managing Director
and Chief Executive Officer,
Toro Energy Limited
STEPHEN JONES(1,2*)
Former President and Chief
Executive Officer, Covanta
Holding Corporation
MUTLAQ AL-MORISHED
Chief Executive Officer,
TASNEE
MOAZZAM KHAN
Managing Director,
Cristal International
Holdings B.V.
DR. TALAL AL-SHAIR
Director Emeritus
JOHN D. ROMANO
Co-Chief Executive
Officer, Tronox
JEAN-FRANÇOIS
TURGEON
Co-Chief Executive
Officer, Tronox
Our Board of Directors includes six
independent directors who participate on
three committees:
(1) Audit
(2) Human Resources and Compensation
(3) Corporate Governance and Sustainability
(* ) Committee Chair
Executive Management Team
JOHN D. ROMANO
Co-Chief Executive Officer
JEAN-FRANÇOIS
TURGEON
Co-Chief Executive Officer
TIMOTHY C. CARLSON*
Senior Vice President,
Chief Financial Officer
RUSSELL AUSTIN
Senior Vice President,
Operations
JEFF ENGLE
Senior Vice President,
Commercial and Strategy
JEFFREY NEUMAN
Senior Vice President,
General Counsel and
Corporate Secretary
JOHN SRIVISAL
Senior Vice President,
Business Development
and Finance
MELISSA H. ZONA
Senior Vice President,
Chief Sustainability and
Human Resources Officer
EMAD ALJUNAIDI
Chief Procurement Officer
JONATHAN FLOOD
Vice President, Controller
and Principal Accounting
Officer
JENNIFER GUENTHER
Vice President, Investor
Relations
ROSE MEI
Vice President, Integrated
Business Planning
MICHAEL MILLER
Chief Information Officer
(* ) As previously announced, Mr. Carlson
will be retiring effective April 1, 2023.
Mr. Srivisal has been named Chief
Financial Officer also effective
April 1, 2023.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Year ended December 31, 2022
OR
□ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
1-35573
(Commission file number)
TRONOX HOLDINGS PLC
(Exact name of registrant as specified in its charter)
England and Wales
(State or other jurisdiction of incorporation or organization)
98-1467236
(I.R.S. Employer Identification No.)
263 Tresser Boulevard, Suite 1100
Stamford, Connecticut 06901
Laporte Road, Stallingborough
Grimsby, North East Lincolnshire, DN40 2PR
United Kingdom
Registrant’s telephone number, including area code: (203) 705-3800
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Ordinary Shares, par value $0.01 per share
Name of each exchange on which registered
New York Stock Exchange
Trading Symbol: TROX
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No □
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes □ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes ☒ No □
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit such files). Yes ☒ No □
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of ‘‘large accelerated filer,’’ ‘‘accelerated filer,’’ ‘‘smaller reporting company’’ and
‘‘emerging growth company’’ in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
Emerging growth company
☒
□
□
Accelerated filer
Smaller reporting company
□
□
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting
firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant
included in the filing reflect the correction of an error to previously issued financial statements. □
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). □
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes □ No ☒
The aggregate market value of the ordinary shares held by non-affiliates of the registrant as of June 30, 2022 was approximately
$1,963,135,524.
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No □
As of January 31, 2023, the registrant had 154,496,923 ordinary shares outstanding.
Portions of the registrant’s proxy statement for its 2022 annual general meeting of shareholders are incorporated by reference in this
Form 10-K in response to Part III Items 10, 11, 12, 13 and 14.
DOCUMENTS INCORPORATED BY REFERENCE
TRONOX HOLDINGS PLC
ANNUAL REPORT ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2022
INDEX
Form 10-K Item Number
PART I
Item 1.
Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1A. Risk Factors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 2.
Item 3.
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART II
Item 5.
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases
of Equity Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 6.
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . .
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
Item 9.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . . . . . . . . . . .
PART III
Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11. Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Shareholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . . . . . . . . . . .
Item 14. Principal Accounting Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
PART IV
Item 15. Exhibits, Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16. Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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i
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
We have made statements under the captions ‘‘Business,’’ ‘‘Risk Factors,’’ ‘‘Management’s Discussion and
Analysis of Financial Condition and Results of Operations’’, and in other sections of this Form 10-K that are
forward-looking statements. Forward-looking statements also can be identified by words such as ‘‘future,’’
‘‘anticipates,’’ ‘‘believes,’’ ‘‘estimates,’’ ‘‘expects,’’ ‘‘intends,’’ ‘‘plans,’’ ‘‘predicts,’’ ‘‘will,’’ ‘‘would,’’ ‘‘could,’’
‘‘can,’’ ‘‘may,’’ and similar terms. These forward-looking statements, which are subject to known and unknown
risks, uncertainties and assumptions about us, may include projections of our future financial performance based
on our growth strategies and anticipated trends in our business. These statements are only predictions based on
our current expectations and projections about future events. There are important factors that could cause our
actual results, level of activity, performance or achievements to differ materially from the results, level of
activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you
should consider the numerous risks and uncertainties outlined in ‘‘Risk Factors.’’
These risks and uncertainties are not exhaustive. Other sections of this Form 10-K may include additional
factors, which could adversely impact our business and financial performance. Moreover, we operate in a very
competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is
not possible for our management to predict all risks and uncertainties, nor can management assess the impact of
all factors on our business or the extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking statements.
Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot
guarantee future results, level of activity, performance or achievements. Moreover, 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 law, we
are under no duty to update any of these forward- looking statements after the date of this Form 10-K to conform our
prior statements to actual results or revised expectations and we do not intend to do so.
When considering forward-looking statements, you should keep in mind the risks, uncertainties and other
cautionary statements made in this Form 10-K and the documents incorporated by reference, including, in
particular, the factors discussed below. These factors may be revised or supplemented in subsequent reports on
Forms 10-Q and 8-K.
Factors that may affect future results include, but are not limited to:
•
the risk that our customers might reduce demand for our products;
• market conditions and price volatility for titanium dioxide (‘‘TiO2’’), zircon and other feedstock
products, as well as global and regional economic downturns, that adversely affect the demand for our
end-use products;
•
•
•
•
•
•
•
•
•
the possibility that Chinese production of chloride technology, improvements in product quality and
expansion of their TiO2 production capacity, including via chloride technology, may occur more quickly
than anticipated;
changes in prices or supply availability of energy or other raw materials;
liability, production delays and additional expenses from environmental and industrial accidents;
production curtailments, shutdowns or additional expenditures resulting from equipment upgrades,
industrial accidents, equipment failures and deterioration of assets;
the possibility that cybersecurity incidents or other security breaches may seriously impact our results
of operations and financial condition;
risks of operating a global business;
political and social instability, and unrest, in the regions in which we operate, including the European
Union, South Africa and the Middle East region;
fluctuations in currency exchange rates;
the risk that the agreements governing our debt may restrict our ability to operate our business in
certain ways, as well as impact our liquidity;
ii
•
•
•
•
•
•
•
•
•
•
our inability to obtain additional capital on favorable terms;
the risk that we may not realize expected returns or there may be a delay in realizing expected returns
on our capital projects, including Project newTRON and our Atlas Campaspe mining investment;
an unpredictable regulatory environment in South Africa where we have significant mining and
beneficiation operations, including amendments by the South African Department of Mineral Resources
and Energy to the Mining Charter (as defined elsewhere herein);
the risk that our TiO2 products are subject to increased regulatory scrutiny that may impede or inhibit
widespread usage of TiO2 and/or diminish the Company’s ability to sustain or grow its business or may
add significant costs of doing business;
ESG issues, including those related to climate change and sustainability, may subject us to additional
costs and restrictions;
extreme weather conditions could pose physical risks to our facilities and disrupt the operations of our
supply chain and increase operational costs;
the risk that our ability to use our tax attributes to offset future income may be limited;
concentrated share ownership in the hands of Cristal may result in conflicts of interest and/or prevent
minority shareholders from influencing the Company;
the risk that we are dependent on, and compete with other mining and chemical businesses for, key
human resources in the countries in which we operate; and
impact of English law and our articles of association on our ability to manage our capital structure
flexibly and the anti- takeover protections incorporated into our articles of association.
We are committed to providing timely and accurate information to the investing public, consistent with our
legal and regulatory obligations. To that end, we use our website to convey information about our businesses,
including the anticipated release of quarterly financial results, quarterly financial and statistical and
business-related information. Investors can access announcements about the Company through our website
available at http://www.tronox.com. Our website is included as an inactive textual reference only and the
information contained therein or connected thereto shall not be deemed to be incorporated into this Form 10-K.
iii
PART I
For the purposes of this discussion, references to ‘‘we,’’ ‘‘us,’’ and, ‘‘our’’ refer to Tronox Holdings plc,
together with its consolidated subsidiaries (collectively referred to as ‘‘Tronox’’ or the ‘‘Company’’). We are a
public limited company formed under the laws of England and Wales. We are considered a domestic company in
the United Kingdom and, as such, are required to comply with filing requirements in the United Kingdom.
Additionally, we are not considered a ‘‘foreign private issuer’’ in the U.S.; therefore, we are required to comply
with the reporting and other requirements imposed by the U.S. securities law on U.S. domestic issuers, which,
among other things, requires reporting under accounting principles generally accepted in the United States of
America (‘‘U.S. GAAP’’).
Item 1.
Business
Overview
Tronox is the world’s leading vertically integrated manufacturer of TiO2 pigment. We operate
titanium-bearing mineral sand mines and beneficiation and smelting operations in Australia and South Africa to
produce feedstock materials that can be processed into TiO2 for pigment, high purity titanium chemicals,
including titanium tetrachloride, and ultrafine TiO2 used in certain specialty applications. Our strategy is to be
vertically integrated and produce enough feedstock materials to be as self- sufficient as possible in the production
of TiO2 at our 9 pigment facilities located 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 approximately 1,200 TiO2 customers
throughout the world. The mining, beneficiation and smelting of titanium bearing mineral sands also creates
meaningful quantities of co-products including zircon, pig iron and the rare-earth bearing mineral, monazite,
which we also supply to customers around the world.
The following chart highlights the TiO2 value chain we participate in.
1
The following sets forth the percentage of our revenue derived from sales of our products by geographic
region for the year ended December 31, 2022.
31%
23%
8%
North America
South and Central America
Europe Middle East and Africa
Asia Pacific
The below sets forth the percentage of our revenue derived from sales of our products for the year ended
December 31, 2022.
38%
9%
13%
TiO2
Zircon
Other Products
For further financial information regarding our products and geographic regions, see the section entitled
‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’, as well as Notes 3
and 23 of notes to our consolidated financial statements, each included elsewhere in this Form 10-K.
78%
2022 Key Strategic Initiatives
The following sets forth the key strategic initiatives underway in 2022:
Become the Low Cost TiO2 Producer by Investing in our Business Processes and Strengthening Vertical
Integration
Our ability to compete effectively in the TiO2 industry is determined by many factors, including innovation,
reliability, product quality, customer service and price. The business processes that allow us to maximize the
benefit of our vertical integration and global footprint — the so-called ‘‘hidden factory’’ — needs to be
optimized if we are to successfully meet the pricing and other competitive pressures that characterize our
industry. One of the largest investment projects that we continued to pursue in 2022 to improve our global
business processes is what we call ‘‘Project newTRON’’, a multi-year IT-enabled transformation program that
includes both operational and business transformation.
In terms of strengthening vertical integration, in 2022, we have progressed the construction of a new
significant mine in Eastern Australia called Atlas Campaspe. Atlas Campaspe is intended to replace feedstock
supply from our Snapper / Ginkgo mines in Eastern Australia which are largely depleted. Our pre-mining
feasibility work indicates that Atlas Campaspe is abundant in natural rutile and high-value zircon, and will be a
significant source of high grade ilmenite suitable for direct use, synthetic rutile production, or slag processing. In
addition, in 2022, we invested in expanding our Fairbreeze and Namakwa mines in South Africa. Like Atlas
Campaspe, we believe these expansions are extremely attractive mine development projects, rich in ilmenite,
2
rutile and zircon that are expected to replace existing mines which would otherwise deplete in early 2024. We
have numerous other mine development projects in earlier stages of development in Western Australia and on the
Eastern and Western Capes of South Africa, all of which are intended to maintain or expand our level of
feedstock vertical integration.
Our vertical integration strategy may also benefit from the titanium slag smelter facility (the ‘‘Slagger’’)
located in The Jazan City for Primary and Downstream Industries in KSA currently owned and operated by
Advanced Smelting Industries Co. Ltd. (‘‘ASIC’’), an indirect, wholly-owned subsidiary of Tasnee and Cristal.
Under the terms of a May 2018 Option Agreement between Tronox and Advanced Metals Industries Cluster
Company Limited (‘‘AMIC’’), the direct shareholder of ASIC, we are required to purchase 100% of the
feedstock material produced at the Slagger, a significant portion of which we consume at our TiO2 pigment
facility in Yanbu, Saudi Arabia. In addition, pursuant to the Option Agreement, AMIC granted us an option (the
‘‘Option’’) to acquire 90% of ASIC. The Option may be exercised if the Slagger achieves certain production
criteria related to sustained quality and tonnage of slag produced. The Option Agreement expires in May 2023.
Capital Allocation
In 2022, we continued to generate sufficient cash to return cash to shareholders in the form of dividends and
share repurchases. During 2022, we paid a total of $87 million to shareholders in the form of dividends and
repurchased approximately $50 million in shares. We also continued to strengthen our balance sheet. From the
end of 2021 to the end of 2022, our annual interest expense decreased from $157 million to $125 million, and
our outstanding indebtedness decreased from $2.6 billion to $2.5 billion.
Develop Our Position as a Significant Supplier of Rare Earth Oxides
Tronox’s existing mining operations and tailing piles in South Africa and Australia contain significant
quantities of monazite, a mineral containing rare earth elements (REEs) widely recognized as a critical mineral
for the energy transformation underway to decarbonize the world’s economy. For these applications, REE must
first be processed into an oxide form — rare earth oxides or ‘‘REO’’ — that can then be metallized for the
production of permanent magnets. Every step of the REE supply chain today is dominated by China. China’s
dominance of the processing of REO and production of permanent magnets is widely recognized as a serious
strategic challenge by democratic governments around the world.
The separation, beneficiation and processing technologies that Tronox uses to turn titanium-bearing ores into
TiO2 are applicable for turning monazite into REO. In the past, we sold our monazite in unconcentrated form as
a waste product but given the increased value associated with REE, we are now seeking to maximize the value
of our existing geologic resources and deploy our substantial technical know how and human capital to become a
significant supplier of REO to non-Chinese producers of metals and permanent magnets.
Our Principal Products
TiO2
TiO2 Pigment
TiO2 pigment is used in a wide range of products due to its ability to impart whiteness, brightness, and
opacity. TiO2 pigment is used extensively in the manufacture of paint and other coatings, plastics and paper, and
in a wide range of other applications. Moreover, it is a critical component of everyday consumer applications due
to its superior ability to cover or mask other materials effectively and efficiently relative to alternative white
pigments and extenders. TiO2 pigment is considered to be a quality of life product. At present, it is our belief
that there is no effective substitute for TiO2 pigment because no other white pigment has the physical properties
for achieving comparable opacity and brightness or can be incorporated as cost effectively.
Ultrafine Specialty TiO2
We produce ultrafine TiO2 at our manufacturing facility in Thann, France. We market ultrafine TiO2
products under the CristalActiv® trademark. Ultrafine TiO2 has highly catalytic properties due to the relatively
high surface area of each TiO2 molecule. The principal use of ultrafine TiO2 products is in NOx emission control
products utilized in stationary, mobile and marine applications.
In 2022, we generated $2.7 billion in revenue from sales of TiO2.
3
Zircon
Zircon (ZrSiO4) is a co-product of mining mineral sands deposits for titanium feedstock. Zircon is used as
an additive in ceramic glazes, which makes the ceramic glaze more water, chemical and abrasion resistant. It is
also used for the production of zirconium metal and zirconium chemicals, in refractories, as molding sand in
foundries, and for TV screen glass, where it adds its structural stability at high temperatures and resistance to
abrasive and corrosive conditions. Zircon typically represents a relatively low proportion of the in-situ heavy
mineral sands deposits we mine, but has a relatively high value compared to other heavy mineral products.
Refractories containing zircon are expensive and are only used in demanding, high-wear and corrosive
applications in the glass, steel and cement industries. Foundry applications use zircon when casting articles of
high quality and value where accurate sizing is crucial, such as aerospace, automotive, medical, and other
high-end applications.
In 2022, we generated $438 million in revenue from sales of zircon.
Other Products
High Purity Pig Iron
During the process of smelting ilmenite at our smelters to increase the concentration of titanium and
produce titanium slag, high purity pig iron is produced as a co-product. High purity pig iron is used as a raw
material in foundries for the production of high-quality ductile iron castings. Ductile iron is used extensively
throughout the world for the production of safety critical automotive parts, such as engine blocks, brake calipers
and steering knuckles in cars and trucks.
Monazite
Like zircon, monazite is a co-product of mining mineral sands deposits for titanium feedstock. Monazite is
concentrated and processed to remove contaminants, such as uranium and thorium, before being separated into
specific rare earth oxides (REOs) such as neodymium (Nd), praseodymium (Pr), terbium (Tb), and dysprosium
(Dy). These REOs can then be metallized and formed into permanent magnets, particularly NdFeB magnets, that
are needed to manufacture electric vehicle motors, wind turbines and other green economy applications.
Feedstock
Most TiO2 products are derived from three naturally occurring minerals which are commonly referred to as
heavy minerals or mineral sands: ilmenite, leucoxene and rutile. Ilmenite, rutile, leucoxene, as well as titanium
slag and synthetic rutile which are processed from ilmenite, are the primary feedstock materials that we use for
the production of TiO2 pigment. Titanium slag is produced by smelting ilmenite in an electric arc furnace to
separate titanium-oxide from the iron and other impurities. Synthetic rutile is produced by reducing ilmenite in a
rotary kiln, followed by leaching under various conditions to remove the metallic iron from the reduced ilmenite
grains. The purpose of both processes is to increase the titanium concentration of the ilmenite. There is
substantial overlap amongst each of the aforementioned with the primary differentiating factor being the level of
titanium content. For instance, rutile has the highest titanium dioxide content of approximately 94% to 96%,
while ilmenite has the lowest of approximately 45% to 65%. As a result of our continued pursuit of our vertical
integration strategy, we currently do not expect to actively sell feedstock going forward.
Titanium Tetrachloride
We sell titanium tetrachloride (‘‘TiCl4’’) from our facilities in Thann, France and Yanbu, KSA. At our Thann
facility in France, we produce TiCl4 dedicated for sale to customers for use mainly in the production of various
types of pigments and catalyst products. At our Yanbu facility, we produce excess TiCl4 which we sell directly to
a joint venture between Advanced Metal Industries Cluster and Toho Titanium Metal Co. Ltd. (‘‘ATTM’’) for use
at a titanium sponge plant facility that is adjacent to our Yanbu facility.
In 2022, we generated $323 million in revenue from the sale of high purity pig iron, monazite, titanium
tetrachloride and other products. This amount also includes revenue generated from the 8120 paper laminate
grade to Venator Materials plc (‘‘Venator’’). In 2019, as part of the Cristal transaction and in order to obtain
approval by regulators in the European Union, we sold the 8120 paper laminate grade to Venator and entered
into a three-year transitional supply agreement which terminated in April 2022. Revenue from 8120 paper
laminate grade sales to Venator are included within Other products until the expiration date of the supply
agreement with Venator.
4
The demand for certain of our products during a given year is subject to seasonal fluctuations. See ‘‘Risk
Factors — Risks Relating to our Business — The markets for many of our products have seasonally affected sales
patterns’’.
Mining and Beneficiation of Mineral Sands Deposits
Our current operational mining and beneficiation of mineral sands deposits are comprised of the following:
•
•
•
•
•
•
KwaZulu-Natal (‘‘KZN’’) Sands operations located on the eastern coast of South Africa consisting of
the Fairbreeze mine, a concentration plant, a mineral separation plant and two smelting furnaces that
produce titanium slag;
Our Namakwa Sands operations located on the western coast of South Africa consisting of the
Namakwa mine, two concentration plants, a mineral separation plant, as well as two smelting furnaces
that produce titanium slag;
Our Northern Operations complex in Western Australia consisting of the Cooljarloo dredge mine and
floating heavy mineral concentration plant and the Chandala metallurgical site which includes a mineral
separation plant and a synthetic rutile plant that produces synthetic rutile;
Eastern Australia operations consisting of the Ginkgo mine, a floating heavy mineral concentration
plant located there, the Atlas mine and a heavy mineral concentration plant located there and a mineral
separation plant located at Broken Hill, New South Wales;
Perth Basin operations in Western Australia consisting of the Wonnerup mine and a mineral separation
plant; and
Our Paraiba, Brazil mining operations ceased during 2020 in line with our life of mine plan; however,
we believe there is enough feedstock to supply the Brazil pigment plant through 2023.
Zircon and monazite are often, but not always, found in mineral sands deposits containing ilmenite. They
are extracted, alongside ilmenite and rutile, as part of the initial mineral sands separation process.
The mining of mineral sands deposits is conducted either ‘‘wet,’’ by dredging or hydraulic water jets, or
‘‘dry,’’ by using earth- moving equipment to excavate and transport the sands. The type of mining operation we
deploy is dependent upon the characteristics of the ore body. Dredge mining is generally the favored method of
mining mineral sands, provided that the ground conditions are suitable, water is readily available and the deposit
is low in slime content. Dry mining techniques are generally preferred in situations involving hard ground,
discontinuous ore bodies, small tonnage, high slimes contents and/or very high grades.
Regardless of the type of mining technique, the first step in the beneficiation process after the mineral sands have
been mined is to utilize wet concentrator plants to produce a high grade of heavy mineral concentrate (typically
approximately 90% to 98% heavy mineral content). Screened ore is first de-slimed, a process by which slimes are
separated from larger particles of minerals, and then processed through a series of spiral separators that use gravity to
separate the heavy mineral sands from lighter materials, such as quartz. Residue from the concentration process is
pumped back into either the open pits or slimes dams for rehabilitation and water recovery.
After producing heavy mineral concentrate in our wet concentrator plants, we separate the non-magnetic
(rutile, zircon and monazite) and magnetic (ilmenite) fractions utilizing a variety of techniques. Through the
separation process, we produce zircon which is sold directly to customers, rutile and leucoxene which can
immediately be used as feedstock material to make TiO2 pigment, and monazite which we currently sell in a
relatively unconcentrated form but which we plan on further processing before sale to extract greater value.
Ilmenite is generally further refined for use in our TiO2 pigment manufacturing processes. Depending on the
characteristics of the ilmenite we use two fundamental processes to refine ilmenite. Both processes involve the
removal of iron and other non- titanium material.
•
Titanium slag is made by smelting ilmenite in an electric arc furnace to separate titanium-oxide from
the iron and other impurities. The result is two products: ‘‘slag’’ which contains 86% to 89% titanium
dioxide and is considered a TiO2 feedstock material, and high purity pig iron which is ready for sale to
end-use customers.
5
•
Synthetic rutile is made by reducing ilmenite in a rotary kiln, followed by leaching under various
conditions to remove the iron from the reduced ilmenite grains. Activated carbon is a byproduct of this
process. Our synthetic rutile has a titanium dioxide content of approximately 89% to 92% and is also
considered a TiO2 feedstock material.
Our current mining and beneficiation operations have an annual production capacity of approximately
832,000 metric tons (‘‘MT’’) of titanium feedstock, which is comprised of 182,000 MT of rutile and leucoxene,
240,000 MT of synthetic rutile and 410,000 MT of titanium slag. We currently have the capability to produce
approximately 297,000 MT of zircon and 250,000 MT of pig iron per year.
Competitive Conditions of Mining and Feedstock Production
Globally, there are a large number of mining companies that mine mineral sand deposits containing ilmenite,
as well as zircon. However, there is a smaller number of mining companies that are also involved in upgrading
the underlying ilmenite to produce feedstock typically utilized by TiO2 producers.
Pigment producers procure a range of types of feedstocks from multiple feedstock producers to create varying
blends of feedstock materials that maximize the efficiency and economic returns of their unique production technique
under conditions applicable at the time of production. Pigment producers frequently switch the relative amount of each
feedstock they procure based on a number of factors including: the relative cost of feedstocks, feedstock logistics
costs, the cost of, and availability of, chemicals used to process feedstocks, as well as waste management costs. Hence,
there is a high degree of substitutability between and among titanium feedstocks.
Production of TiO2 Pigment
TiO2 pigment is produced using a combination of processes involving the manufacture of base pigment
particles through either the chloride or sulfate process followed by surface treatment, drying and milling
(collectively known as finishing). Currently, approximately 87% of our TiO2 pigment production capacity is
produced using the chloride process and approximately 13% of our TiO2 production capacity is produced using
the sulfate process.
We use the sulfate process at our manufacturing facility in Thann, France to produce ultrafine TiO2 products.
In the chloride process, feedstock (slag, synthetic rutile, natural rutile or ilmenite ores) are reacted with
chlorine (the chlorination step) and carbon to form TiCl4 in a continuous fluid bed reactor. Purification of TiCl4
to remove impurities is accomplished using selective condensation and distillation processes. The purified TiCl4
is then oxidized in a vapor phase form to produce raw pigment particles and chlorine gas. The latter is recycled
back to the chlorination step for reuse. Raw pigment is then typically slurried with water and dispersants prior to
entering the finishing step. Due to the nature of the production process, the final pigment product is not sensitive
to the feedstocks used to create it, as substantially all substances other than TiO2 are removed during the process.
The chloride process currently accounts for substantially all of the industry-wide TiO2 production capacity in
North America, and approximately 44% of industry-wide capacity globally.
In the sulfate process, ilmenite and/or slag are dissolved in concentrated sulfuric acid. After removing
impurities, dissolved titanium is hydrolyzed and separated from the remaining sulfuric acid. The titanium
hydrolysate is subsequently calcined in a rotary kiln to produce a raw TiO2. The product is then further finished
in a similar way to TiO2 produced through the chloride process.
Commercial production of TiO2 pigment results in one of two different crystal forms: rutile, which is
manufactured using either the chloride process or the sulfate process, or anatase, which is only produced using
the sulfate process. Rutile TiO2 is preferred over anatase TiO2 for many of the largest end-use applications, such
as coatings and plastics, because its higher refractive index imparts better hiding power at lower quantities than
the anatase crystal form and it is more suitable for outdoor use because it is more durable.
The primary raw materials used in the production of chloride TiO2 pigment include titanium feedstock,
chlorine and coke. As discussed above, we believe we are unique in the degree to which we produce our own
high-grade titanium feedstock. Other chemicals used in the production of TiO2 are purchased from various
companies under short and long-term supply contracts. In the past, we have been, and we expect that we will
continue to be, successful in obtaining extensions to these and other existing supply contracts prior to their
expiration. We expect the raw materials purchased under these contracts, and contracts that we enter into the near
term, to meet our requirements over the next several years.
6
Marketing of TiO2
We supply and market TiO2 under the brand name TIONA® and CristalActiv® to approximately
1,200 customers in approximately 120 countries, including market leaders in each of the key end-use markets for
TiO2, and we have supplied each of our top ten customers with TiO2 for more than 10 years. We have
implemented a margin stabilization program which we believe provides relative certainty over availability of
product and price stability to customers who choose to participate, and have also initiated a long-term partnership
strategy that we believe will strengthen the commitments from our customers across all regions and products.
The long-term partnership strategy and margin stabilization programs are key parts of our TiO2 marketing and
sales strategy, enabling us to focus on predictability and reliability of TiO2 delivery across the supply and
demand cycle.
The following sets forth the percentage of our TiO2 sales volume by end-use market for the year ended
December 31, 2022:
16%
7%
Paints and Coatings
Paper and Specialty
Plastic
77%
In addition to price and product quality, we compete on the basis of technical support and customer service.
We sell our products through both a direct sales force and third-party agents and distributors. Our direct sales,
marketing and technical service organizations execute our sales and marketing strategy on a global basis. Due to
the technical requirements of TiO2 applications, our technical service organization and direct sales offices are
supported by a regional customer service staff located in each of our major geographic markets.
Our sales and marketing strategy focuses on aligning ourselves with customers growing faster than the
market and effective customer management through the development and maintenance of strong relationships.
We develop customer relationships and manage customer contact across multiple contact points within the
organization including our sales, technical service and marketing, research and development, and customer
service teams. These primary points of contact are supplemented by direct contact with plant operations
personnel, supply chain specialists, and senior management. We believe that multiple points of customer contact
facilitate efficient problem solving, supply chain support, formula optimization and co-development of products.
Competitive Conditions of TiO2 Pigment
The global market in which our TiO2 pigment business operates is highly competitive. Competition is based
on a number of factors such as price, product quality and service. We face competition from both chloride
process pigment producers and sulfate process pigment producers. Moreover, because transportation costs are
minor relative to the cost of our product, there is also competition between products produced in one region
versus products produced in another region.
We face competition from global competitors with headquarters in Europe, the United States and China,
including Chemours, LB Group, Kronos Worldwide Inc., INEOS, and Venator. In addition, we compete with
numerous regional producers particularly in Eastern Europe and China.
Research and Development
We have research and development facilities that aim to develop new products, service our products, and
focus on applied research and development of both new and existing processes. The majority of scientists
supporting our TiO2 pigment product development and testing are located in Oklahoma City, Oklahoma, USA
and Stallingborough, UK, while the majority of scientists supporting our TiO2 ultrafine specialty business are
7
located in Thann, France. In addition, the research and development personnel relating to our mineral sands
operations are located in Australia and South Africa. Our research and development initiatives for concentration
and separation of REOs is centered in Perth, Australia.
New process developments are focused on increased throughput, efficiency gains and general
processing-related improvements for our customers. Ongoing development of process technology contributes to
cost reduction, enhanced production flexibility, increased capacity, and improved consistency of product quality.
Process technology research also pertains to concentration and separation of monazite into neodymium (Nd),
praseodymium (Pr), terbium (Tb), and dysprosium (Dy), the types of REOs that are most in demand for EV and
wind turbine applications.
Product development activities in paints and coatings were focused on product stewardship and sustainability
improvements of the product line. In order to enhance production flexibility, technology transfer activities were
focused on the décor paper segment in Europe, upgrading our sulfate offering from our Fuzhou facility, and further
harmonizing the product line at Yanbu TiO2 production facility with other sites. Specialty product development in
plastics is expected to drive further growth in this segment in the coming years. In line with Tronox’s sustainability
goals, the process and product development teams are collaborating on more sustainable, lower carbon footprint
technologies for all end use segments. With regard to our TiO2 ultrafine specialty business, research and development
activities are focused on a broad array of areas including direct lithium extraction, carbon direct air capture and
developing more effective catalysts for use in selective catalytic reduction.
Patents, Trademarks, Trade Secrets and Other Intellectual Property Rights
Protection of our proprietary intellectual property is important to our business. At December 31, 2022, we
held 99 patents and 5 patent applications in the U.S., and approximately 625 in foreign counterparts, including
both issued patents and pending patent applications. Our U.S. patents have expiration dates ranging through
2039. Additionally, we have 11 trademark registrations in the U.S., as well as 280 trademark counterpart
registrations and applications in foreign jurisdictions.
We also rely upon our unpatented proprietary technology, know-how and other trade secrets. The substantial
majority of our patents and trade secrets relate to our chloride products, surface treatments, chlorination
expertise, and oxidation process technology, and this proprietary chloride production technology is an important
part of our overall technology position. However, much of the fundamental intellectual property associated with
both chloride and sulfate pigment production is no longer subject to patent protection. At Namakwa Sands, we
rely on intellectual property for our smelting technology, which was granted to us in perpetuity by Anglo
American South Africa Limited for use on a worldwide basis, pursuant to a non-exclusive license.
While certain of our patents relating to our products and production processes are important to our
long-term success, more important is the operational knowledge we possess. We also use and rely upon
unpatented proprietary knowledge, continuing technological innovation and other trade secrets to develop and
maintain our competitive position. We conduct research activities and protect the confidentiality of our trade
secrets through reasonable measures, including confidentiality agreements and security procedures. We protect the
trademarks that we use in connection with the products we manufacture and sell, and have developed value in
connection with our long-term use of our trademarks. See ‘‘Risk Factors — If our intellectual property were
compromised or copied by competitors, or if competitors were to develop similar intellectual property, our results
of operations could be negatively affected. Further, third parties may claim that we infringe on their intellectual
property rights which could result in costly litigation.’’
Human Capital
Tronox employs approximately 6,500 people across six continents, and we believe it is our rich diversity
and exceptional operational and technical expertise that, combined with our vertical integration model, position
Tronox as the world’s leading vertically integrated manufacturer of titanium dioxide pigment. Recognizing the
importance of our human capital, we have made People, Culture and Capabilities one of our five strategic pillars,
and placed a priority around developing leaders who will help us effectively (i) acquire, develop and nurture our
talent, and (ii) foster a culture that embodies the values that are important to us, starting with safety and
operating our business responsibly.
8
People
Because we operate both titanium ore mines and titanium dioxide pigment plants, and because our
operations span the world, we require specialty skills in mining and TiO2 pigment manufacturing. We also need
people who are willing to learn skills across both mining and chemicals operations and who can help us extract
value from our integrated model. The below map sets forth the approximate number of employees as of
December 31, 2022, in each of the global regions in which we operate.
647
EMPLOYEES
953
EMPLOYEES
354
EMPLOYEES
729
EMPLOYEES
564
EMPLOYEES
2,105
EMPLOYEES
1,259
EMPLOYEES
Accordingly, we place a high priority on knowledge transfer (including by relocating skilled leaders across
countries and between mining and TiO2 pigment operations, by staffing high-potential employees in regions on
global projects, and by enabling collaboration in global centers of excellence), and we place a high priority on
fostering diversity, equity and inclusion. We are committed to creating an organization where leaders encourage a
diverse workforce, where people feel valued and respected, have access to opportunities, and in which a variety
of different voices are encouraged and heard. For instance, during 2022, we created and launched an educational
series dedicated to Diversity and Inclusion (D&I). This educational series utilized by our employees discussing
topics such as bias, micro-inequities, and Tronox’s role in supporting D&I. In addition, in 2022, our D&I
regional chapters implemented initiatives that reflected our focus on D&I. For instance, we believe a significant
achievement was the uniform initiative which provided means by which employees have access to work uniforms
that are more inclusive.
We also place an uncompromising focus on operating safe, reliable, and responsible facilities, and we
measure our progress with both safety metrics and leading indicators. We believe every employee and contractor
has a responsibility for safety, and we proactively identify and manage risk, conduct ourselves responsibly,
exercise good judgement, and take accountability for our actions. In 2022, our employees worked more than
12 million hours with 22 recordable injuries and no fatalities from our operations, and our contractors worked
more than 9 million hours with 20 recordable injuries and no fatalities from our operations.
Culture
We aim to create an organizational culture where employees unleash their full value through living our
values, and fostering a high-performance culture. We apply an ‘‘outward mindset’’ by which we mean that each
employee should be highly aware of the organization’s goals and how his or her individual actions affect the
entire organization.
Nearly all of our employees have been through training and development courses which instill the principles
of working with an outward mindset. The consistent training and reinforcement of the importance of acting with
an outward mindset has enabled us to transform our culture. We believe this cultural transformation is reflected
in our results, starting with safety: our people truly care for one another, and not only other employees, but also
our contractors, visitors and communities. Shaped by an outward mindset, our people have embraced our global
diversity and are naturally inclusive.
9
Today, we are a collaborative group of people who naturally want to be helpful to others, and we adjust our
own efforts to make our colleagues’ work easier, however we can.
Building on the foundation of applying an outward mindset, we have adopted a set of core values that
describes our expectations of one another, starting with safety. Every performance review starts with a
self-assessment and manager’s assessment of our consistency in living our values. Employees are encouraged —
and provided a toolkit — to develop in the values where they are weak, and to help coach others in the values
where they are strong.
Tronox Core Values
• We have an uncompromising focus on operating safe, reliable and responsible facilities.
• We honor our responsibility to create value for stakeholders.
• We treat others with respect, and act with personal and organizational integrity.
• We build our organization with diverse, talented people who make a positive difference and we invest
in their success.
• We are adaptable, decisive and effective.
• We are trustworthy and reliable, and we build mutually rewarding relationships.
• We share accountability, and have high expectations for ourselves and one another.
• We do the right work the right way in every aspect of our business.
• We celebrate the joy of working together to accomplish great things.
Capabilities
At Tronox we lead with safety. To ensure we live this value with impact, a key focus of our strategy is to
enhance the leadership capabilities of our workforce. In 2021, we launched a program in which approximately
100 of our leaders were trained in contemporary safety leadership practices. Further in 2022, an additional
350 supervisors and managers across all of our operating regions completed this hands-on leadership training. In
2023, we intend to provide such training to more of our regional leaders as well as continuing to educate the
broader workforce.
In addition, our employees are further guided by our code of conduct and business ethics and we conduct
annual global training to help them fully understand and comply with our code of conduct.
We also have a rigorous succession planning process with respect to key positions throughout the
organization. We believe such process allows us to proactively develop the talent of the future and allows us to
move with speed and agility when leadership changes are required. As part of the succession planning process,
high potential leaders are identified and development plans are completed for each candidate.
Sustainability
Our business requires an unwavering focus on sustainable operating practices, and our commitment to
sustainability supports our overall vision and strategy to be the world’s leading vertically integrated TiO2 producer. As
such, we integrate sustainability into every aspect of our business — from our culture and our strategy to our operating
practices. We believe sustainable operations enable us to better control costs and manage our environmental footprint.
Sustainability also encompasses providing our employees with a safe, diverse workplace and offering them
opportunities to grow and develop. Ultimately, safe, environmentally sustainable operations demonstrates our respect
for our communities and supports our continued privilege to operate.
Our sustainability efforts are also focused on reducing Tronox’s carbon footprint. In 2022 we updated our
carbon reduction roadmap first disclosed in 2021 that details our plans for reducing carbon emissions in the
short-, medium- and long-term. Our roadmap covers 100% of our operations and is based on a detailed analysis
of our carbon footprint and ways to reduce it. The roadmap is supported by well-resourced projects and
initiatives. The majority of our GHG emissions are generated from our TiO2 slag furnaces in South Africa,
synthetic rutile kiln in Western Australia, and TiO2 pigment plants in the United States, United Kingdom, France,
Brazil, China, Netherlands, Australia, and Saudi Arabia.
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Based on actions taken in 2021 and 2022, we are now targeting a 35% reduction in emissions intensity by
2025 and a 50% reduction in emissions intensity by 2030. It is our long-term goal to achieve ‘‘net zero’’ carbon
emissions by 2050.
In 2023, we received a Gold Rating by EcoVadis in recognition of our sustainability efforts. This Gold
Rating places Tronox in the Top 5% of the 85,000 companies evaluated around the world by EcoVadis on their
sustainability performance. The EcoVadis assessment focuses on four themes: the environment, labor and human
rights, ethics, and sustainable procurement.
EcoVadis is a leading third-party independent assessment organization that evaluates companies’
sustainability performance.
Their methodology is based on international sustainability standards including the Global Reporting
Initiative (GRI), United Nations Global Compact (UNGC) and ISO 26000.
Environmental, Health and Safety Authorizations
Mining
Our facilities and operations are subject to extensive general and industry-specific environmental, health and
safety regulations in jurisdictions where we operate, but particularly South Africa and Australia. These regulations
include those relating to mine rehabilitation, liability provision, water management, the handling and disposal of
hazardous and non-hazardous materials, and occupational health and safety. The various legislation and regulations are
subject to a number of internal and external audits. We believe our mineral sands operations are in compliance, in all
material respects, with existing health, safety and environmental legislation and regulations.
Regulation of the Mining Industry in South Africa
The South African mining regulatory regime is comprehensive and requires regular reporting to applicable
government departments. A failure to, among other things, comply with any such reporting requirements or the
conditions of any mining license could result in extended mandatory shutdown periods, license and/or mining
right suspensions or revocations all of which could impact our business.
In South Africa, the primary legislative enactments with which our mines are required to comply are the Mineral
and Petroleum Resources Development Act (‘‘MPRDA’’) which governs the acquisition and retention of prospecting
and mining rights. In addition, the Mine Health and Safety Act governs the manner in which mining must be
conducted from a health and safety perspective, while the National Environmental Management Act (and its subsidiary
legislation) provides the underlying framework with respect to environmental rules and regulation for which our
operations must comply. For additional details regarding other South African legislative enactments that govern our
mining licenses please see the section entitled ‘‘Risk Factors’’ set forth elsewhere in this Form 10-K.
Regulation of the Mining Industry in Australia
Each Australian state and territory has its own legislation regulating the exploration for and mining of
minerals. Our key exploration and mining operations are regulated by the Mining Act 1978 (WA), the Mining
Act 1992 (NSW) and their related regulations.
In Western Australia, State Agreements are contracts between the State and the proponents of major
resources projects within Western Australia, and are intended to foster resource development and related
infrastructure investments. These agreements are approved and ratified by the Parliament of Western Australia.
The State Agreement relevant to the development of certain of our Western Australian operations is the
agreement authorized by the Mineral Sands (Cooljarloo) Mining and Processing Agreement Act 1988 (WA). This
agreement concluded in March 2020 and Tronox’s rights and obligations are now covered by the Western
Australian Mining Act.
Regulation of Finished Product Manufacturing
Our business is subject to extensive regulation by federal, state, local and foreign governments.
Governmental authorities regulate the generation and treatment of waste and air emissions at our operations and
facilities. At many of our operations, we also comply with worldwide, voluntary standards developed by the
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International Organization for Standardization (‘‘ISO’’), a nongovernmental organization that promotes the
development of standards and serves as a bridging organization for quality and environmental standards, such as
ISO 9002 for quality management and ISO 14001 for environmental management.
Chemical Registration
As a chemical manufacturer with global operations, we are subject to a wide array of regulations regarding
the import, export, labelling, use, storage and disposal of our products. We are obliged to comply with the
regulation of chemical substances and inventories under the Toxic Substances Control Act in the United States
and the Registration, Evaluation and Authorization of Chemicals (‘‘REACH’’) regulation in Europe, as well as a
growing list of analogous regimes in other parts of the world, including China, South Korea and Taiwan.
Manufacturers and importers of chemical substances must register information regarding the properties of their
existing chemical substances with the European Chemicals Agency (‘‘ECHA’’). REACH regulations require
chemical substances which are newly imported or manufactured in the EU to be registered before being placed
on the market, assessed for human health or environmental risk and for registrations to be updated periodically
such as when new information emerges relevant to human health or environmental risks associated with the
production or use of the substance. For additional information on this topic, see section entitled ‘‘Risk Factors —
Risks Relating to our Legal and Regulatory Environment — Our TiO2 products are subject to increased
regulatory scrutiny that may impede or inhibit widespread usage of TiO2 and / or diminish the Company’s ability
to sustain or grow its business or may add significant costs of doing business.’’
Greenhouse Gas Regulation
Globally, our operations are subject to regulations that seek to reduce emissions of ‘‘greenhouse gases’’
(‘‘GHGs’’). We currently report and manage GHG emissions as required by law for sites located in jurisdictions
requiring such managing and reporting of GHGs, primarily the European Union and Australia. For additional
information on this topic, see section entitled ‘‘Risk Factors — Risks Relating to our Legal and Regulatory
Environment - ESG issues, including those related to climate change and sustainability, may subject us to
additional costs and restrictions, including increased energy and raw material costs, which could have an adverse
effect on our business, financial condition and results of operations, as well as damage our reputation.’’
Available Information
Our public internet site is http://www.tronox.com. The content of our internet site is available for
information purposes only and is included as an inactive textual reference. It should not be relied upon for
investment purposes, nor is it incorporated by reference into this annual report on Form 10-K unless expressly
noted. We make available, free of charge, on or through the investor relations section of our internet site, our
annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements
and Forms 3, 4 and 5 filed on behalf of directors and executive officers, as well as any amendments to those
reports filed or furnished pursuant to the U.S. Securities and Exchange Act of 1934, as amended (the ‘‘Exchange
Act’’) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the
U.S. Securities and Exchange Commission (the ‘‘SEC’’).
We file current, annual and quarterly reports, proxy statements and other information required by the
Exchange Act with the SEC. Our SEC filings are also available to the public from the SEC’s internet site at
http://www.sec.gov. The content of the SEC’s internet site is available for informational purposes only and is
included as an inactive textual reference. It should not be relied upon for investment purposes, nor is it
incorporated by reference into this annual report on Form 10-K unless expressly noted.
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Item 1A. Risk Factors
Item 1A. Risk Factors
You should carefully consider the risk factors set forth below, as well as the other information contained in
this Form 10-K, including our consolidated financial statements and related notes. This Form 10-K contains
forward-looking statements that involve risks and uncertainties. Any of the following risks could materially and
adversely affect our business, financial condition and results of operations. Additional risks and uncertainties not
currently known to us or those we currently view to be immaterial may also materially and adversely affect our
business, financial condition and results of operations. The following risk factors are not necessarily presented in
order of relative importance and should not be considered to represent a complete set of all potential risks that
could affect our business, financial condition and results of operations.
RISKS RELATING TO OUR BUSINESS
Market conditions, as well as global and regional economic downturns that adversely affect the demand for
our end-use products, could adversely affect the results of our operations and the prices at which we can sell
our products, thus, negatively impacting our financial results.
Our revenue and results of operations are significantly dependent on sales of TiO2 products and zircon.
Demand for these products historically have been linked to global, regional and local GDP and discretionary
spending, which can be negatively impacted by regional and world events or economic and market conditions.
Such events can cause a decrease in demand for our products and market prices to fall, which may have an
adverse effect on our results of operations and financial condition. A substantial portion of our products and raw
materials are commodities that reprice as market supply and demand fundamentals change. Accordingly, product
margins and the results of operations tend to vary with changes in the business cycle.
A significant portion of the demand for our TiO2 products comes from manufacturers of paint and plastics.
A significant portion of the demand for zircon comes from the construction and other industrial end markets. Our
customers may experience significant fluctuations in demand for their own end products because of economic
conditions, changes in consumer demand, or increases in raw material and energy costs. In addition, with respect
to the zircon market, we believe that China currently accounts for approximately 50% of the world’s demand for
zircon. As such, any prolonged downturn in China could have a material adverse effect on our business and
financial results.
The price of our products, in particular, TiO2, zircon, and pig iron, have been, and in the future may be,
volatile. Price declines for our products will negatively affect our financial position and results of operations.
Historically, the global market for TiO2, zircon and pig iron have been volatile, and those markets are likely
to remain volatile in the future. Prices for TiO2, zircon and pig iron may fluctuate in response to relatively minor
changes in the supply of, and demand for, these products, market uncertainty and other factors beyond our
control. Factors that affect the price of our products include, among other things:
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•
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•
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•
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overall economic conditions;
the level of customer demand particularly in the paint, plastics and construction industries;
the level of production and exports of our products globally, including the impact of competitors
increasing their capacity and exports;
the level of production and cost of materials, such as chlorine, sulfuric acid and anthracite, used to
produce our products, including rising prices of raw materials due to inflation;
the cost of energy consumed in the production of TiO2 and zircon, including the price of natural gas,
electricity and pet coke;
domestic and foreign governmental relations, tariffs or other trade disputes, regulations and taxes;
political conditions or hostilities and unrest in regions where we manufacture and/or export our TiO2,
zircon and feedstock/other products; and
• major public health issues, such as COVID-19, which could cause, among other things, macroeconomic
disruptions.
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Pricing pressure with respect to our TiO2 products, zircon and pig iron can make it difficult to predict the
cash we may have on hand at any given time, and a prolonged period of price declines may materially and
adversely affect our financial position, liquidity, ability to finance planned capital expenditures and results of
operations.
Our industry and the end-use markets in which we compete are highly competitive. This competition may
adversely affect our results of operations and operating cash flows.
Each of our markets is highly competitive. Competition in the TiO2 industry is based on a number of factors
such as price, product quality, and service. We face significant competition from major international and smaller
regional competitors, especially producers in China. Chinese producers have significantly expanded their
production capacity in recent years and have also commenced the commercial production of TiO2 via chloride
technology. In addition, Chinese producers have publicly announced their intention to continue to expand their
TiO2 production capacity, including via chloride technology. The risk of substitution from these Chinese
producers by our customers could increase as these Chinese producers expand their use of chloride technology,
improve the quality of their chloride technology, and continue to improve the quality of their sulfate products.
Moreover, we compete with a large number of mining companies with respect to zircon. Zircon producers
generally compete on the basis of price, quality, logistics, delivery, payment terms and consistency of supply.
Within the end-use markets in which we compete, competition between products is intense. We face
substantial risk that our customers could switch to our competitors’ products in response to any number of
developments including lower price offerings by our competitors for substantially the same products, new
product development by competitors, increased commercial production of TiO2 via chloride technology by
Chinese producers, greater acceptance of TiO2 produced via sulfate technology in end-market applications
previously characterized by TiO2 produced via chloride technology, or with respect to zircon customers,
switching to lower priced substitute products. Our inability to develop, produce or market our products to
compete effectively against our competitors could have a material adverse effect on our business, financial
condition, results of operations and cash flow.
An increase in the price of energy or other raw materials, or an interruption in our energy or other raw
material supply, could have a material adverse effect on our business, financial condition and results of
operations.
Our mining, beneficiation, smelting and production processes consume significant amounts of energy and
raw materials, the costs of which can be subject to worldwide, as well as, local supply and demand, as well as
other factors beyond our control. Fuel and energy linked to commodities, such as diesel, natural gas, heavy fuel
oil and pet coke, and other consumables, such as chlorine, sulfuric acid, illuminating paraffin, electrodes, sulfur
and anthracite, consumed in our TiO2 manufacturing and mining operations form an important part of our TiO2
operating costs. We have no control over the costs of these consumables, many of which are linked to some
degree to the price of oil, and the costs of many of these raw materials may fluctuate widely for a variety of
reasons, including changes in availability, major capacity additions or reductions, or significant facility operating
problems. Moreover, the ongoing Russia and Ukraine conflict has resulted in, and may continue to result in,
increased uncertainty with respect to the supply of energy and other energy-dependent commodities for our TiO2
production facilities located in the European Union and the United Kingdom, as well as other raw materials, such
as anthracite, for our slag furnaces located in South Africa. Increased costs of electricity and disruptions in the
supply of electricity due to long-standing operational issues at the sole, state-owned energy supplier in the
Republic of South Africa, Eskom, could increase the costs of production, or disrupt operations, at our mines and
beneficiation operations in that country. Availability of such consumables could also be impacted by
transportation capacity constraints or other interruptions. These fluctuations could negatively affect our operating
margins, our results of operations or planned capital expenditures. As the costs of raw materials, utilities,
transportation and similar costs rise, our operating expenses will increase and could adversely affect our business,
especially if we are unable to pass price increases relating to raw materials, utilities, transportation and similar
costs through to our customers.
The markets for many of our products have seasonally affected sales patterns.
Historically, the demand for our products is subject to seasonal fluctuations. TiO2 is widely used in paint and
other coatings where demand increases prior to the painting season in the Northern Hemisphere (spring and summer).
Additionally, although zircon is generally a non-seasonal product, it is negatively impacted by the winter and Chinese
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New Year celebrations due to reduced zircon demand from China. We may be adversely affected by existing or future
cyclical changes, and such conditions may be sustained or further aggravated by anticipated or unanticipated changes
in regional weather conditions. For example, poor weather conditions in a region can lead to an abbreviated painting
season, which can depress consumer sales of paint products that use TiO2.
We are dependent on, and compete with other mining and chemical businesses for, key human resources in
the countries in which we operate, and our business will suffer if we are unable to hire or deploy highly
skilled employees.
We compete with other chemical and mining companies, and other companies generally, in the countries in
which we operate to attract and retain key human resources at all levels with the appropriate technical skills and
operating and managerial experience necessary to continue operating and expanding our businesses. These
operations use modern techniques and equipment and accordingly require various types of skilled workers. The
success of our business will be materially dependent upon the skills, experience and efforts of our key officers
and skilled employees. Competition for skilled employees may cost us in terms of higher labor costs or reduced
productivity. In addition, certain of our production facilities and mining operations are situated in remote
locations which may make it more difficult to attract and retain the skilled workers required. As a result, we may
not be able to attract, retain and deploy skilled and experienced employees. Should we lose any of our key
personnel or fail to attract, retain and deploy key qualified personnel or other skilled employees, our business
may be harmed and our operational results and financial condition could be affected.
Given the nature of our chemical, mining and smelting operations, we face a material risk of liability,
production delays and additional expenditures from industrial accidents.
Our business is exposed to, among other things, industrial accidents the occurrence of which could delay
production, suspend operations, increase repair, maintenance or medical costs and, due to the vertical integration
of our operations, could have an adverse effect on the productivity and results of operations of a particular
manufacturing facility or on our business as a whole. Furthermore, during operational breakdowns resulting from
any such industrial accident, the relevant facility may not be restored to full operations within the anticipated
timeframe, which could result in further business losses. Over our operating history, we have incurred incidents
of this nature. For instance, in 2022, we experienced a fire at the mineral separation facility at our KZN
operations in South Africa which impacted our financial results. If any of the equipment on which we depend
were severely damaged or were destroyed by fire or otherwise, we may be unable to replace or repair it in a
timely manner or at a reasonable cost, which would impact our ability to produce and ship our products, which
would have a material adverse effect on our business, financial condition and results of operations.
Equipment failures and deterioration of assets may lead to production curtailments, shutdowns or additional
expenditures.
Our operations depend upon critical equipment that must be periodically maintained and upgraded in order
to avoid suffering unanticipated breakdowns or failures. The occurrence of equipment failures or deterioration of
assets could delay production, suspend operations, increase repair, maintenance or medical costs and, due to the
vertical integration of our operations, could have an adverse effect on the productivity and results of operations
of a particular manufacturing facility or on our business as a whole. In addition, assets critical to our mining and
chemical processing operations may deteriorate due to wear and tear or otherwise sooner than we currently
estimate. Such deterioration may result in additional maintenance spending and additional capital expenditures. If
these assets do not generate the amount of future cash flows that we expect, and we are not able to refurbish
them or procure replacement assets in an economically feasible manner, our future results of operations may be
materially and adversely affected.
Our results of operations and financial condition could be seriously impacted by security breaches, including
cybersecurity incidents.
We rely on information technology systems across our operations to manage our business including, but not
limited to, our accounting, finance, and supply chain functions. Our information technology is provided by a
combination of internal and external services and service providers. Further, our business involves the use,
processing, storage and transmission of information about customers, suppliers and employees using such
information technology systems. Our ability to effectively operate our business depends on the security, reliability
and capacity of these systems.
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Like most major corporations, during the normal course of business, we have been the target of
cyberattacks, including phishing or ransomware attacks, from time to time, and we expect to be the target of
such cyberattacks in the future. For instance, the Cristal business we acquired in April 2019 was subject to a
significant cybersecurity attack in 2017. Failure to effectively prevent, detect and recover from security breaches,
including attacks on information technology and infrastructure by hackers; viruses; breaches due to employee
error or actions; or other disruptions could seriously harm our operations as well as the operations of our
customers and suppliers. Such serious harm can involve, among other things, misuse of our assets, business
disruptions, loss of data, unauthorized access to trade secrets and confidential business information, unauthorized
access to personal information, legal claims or proceedings, reporting errors, processing inefficiencies, negative
media attention, reputational harm, loss of sales, remediation and increased insurance costs, and interference with
regulatory compliance. We have experienced, and expect to continue to experience, these types of cybersecurity
threats and incidents, which may be material.
We have put in place training and security measures designed to protect against cyberattacks, phishing,
security breaches and misappropriation or corruption of our systems, intentional or unintentional disclosure of
confidential information, or disruption of our operations. As these threats continue to evolve, particularly around
cybersecurity, we may be required to expend significant resources to enhance our control environment, processes,
practices and other protective measures. Despite these efforts, we may not be able to prevent cyberattacks and
other security breaches and such events could materially adversely affect our business, financial condition and
results of operations.
Our ore resources and reserve estimates are based on a number of assumptions, including mining and
recovery factors, future cash costs of production and ore demand and pricing. As a result, ore resources and
reserve quantities actually produced may differ from current estimates.
The mineral resource and reserve estimates are estimates of the quantity and ore grades in our mines based
on the interpretation of geological data obtained from drill holes and other sampling techniques, as well as from
feasibility studies. The accuracy of these estimates is dependent on the assumptions and judgments made in
interpreting the geological data in accordance with established guidelines and standards. Our mineral reserves
represent the amount of ore that we believe can be economically mined and processed, and are estimated based
on a number of factors.
There is significant uncertainty in any mineral reserve or mineral resource estimate. Factors that are beyond
our control, such as the ability to secure mineral rights, the sufficiency of mineralization to support mining and
beneficiation practices and the suitability of the market may significantly impact mineral resource and reserve
estimates. The actual deposits encountered and the economic viability of mining a deposit may differ materially
from our estimates. Since these mineral resources and reserves are estimates based on assumptions, we may
revise these estimates in the future as we become aware of new developments. To maintain TiO2 feedstock and
zircon production beyond the expected lives of our existing mines or to increase production materially above
projected levels, we will need to access additional reserves through exploration or discovery.
If we are unable to innovate and successfully introduce new products, or new technologies or processes
reduce the demand for our products or the price at which we can sell products, our results of operations could
be adversely affected.
Our industries and the end-use markets into which we sell our products experience periodic technological
change and product improvement. Our financial condition and results of operations could be adversely affected if
we are unable to gauge the direction of commercial and technological progress in key end-use markets or if we
fail to fund and successfully develop, manufacture and market products in such changing end-use markets.
In addition, new technologies or processes have the potential to replace or provide lower-cost alternatives to
our products, such as new processes that reduce the amount of TiO2 or zircon content in consumer products
which in turn could depress the demand and pricing for TiO2 or zircon, respectively. We cannot predict whether
technological innovations will, in the future, result in a lower demand for our products or affect the
competitiveness of our business. We may be required to invest significant resources to adapt to changing
technologies, markets and competitive environments.
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RISKS RELATING TO THE GLOBAL NATURE OF OUR BUSINESS
We are exposed to the risks of operating a global business.
We have operations in jurisdictions around the globe which subjects us to a number of risks, including:
•
•
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adapting to unfamiliar regional and geopolitical conditions and demands, including political instability,
civil unrest, expropriation, nationalization of properties by a government, imposition of sanctions,
changes to import or export regulations and fees, renegotiation or nullification of existing agreements,
mining leases and permits;
increased difficulties with regard to political and social attitudes, laws, rules, regulations and policies
within countries that favor domestic companies over non-domestic companies, including customer- or
government-supported efforts to promote the development and growth of local competitors;
economic and commercial instability risks, including those caused by sovereign and private debt
default, corruption, and new and unfamiliar laws and regulations at national, regional and local levels,
including taxation regimes, tariffs and trade barriers, exchange controls, repatriation of earnings, and
labor and environmental and health and safety laws and regulations;
•
implementation of additional technological and cybersecurity measures and cost reduction efforts,
including restructuring activities, which may adversely affect our ability to capitalize on opportunities;
• major public health issues, such as COVID-19, which could cause, and have caused, disruptions in our
operations or workforce;
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war, political conditions, hostilities, including, but not limited to, the ongoing Russia and Ukraine
conflict, or terrorist activities;
difficulties enforcing intellectual property and contractual rights in certain jurisdictions; and
unexpected events, including fires or explosions at facilities, and natural disasters, including as a result
of climate-related events.
South Africa, where we have large mining assets and derive a significant portion of our revenue and profit,
poses distinct operational risks which could affect our business, financial condition and results of operations.
In South Africa, we currently operate two significant mining assets, as well as accompanying separation
plants and smelting operations, and derive a significant portion of our profit from the sale of zircon. Our mining
and smelting operations depend on electrical power generated by Eskom, the sole, state-owned energy supplier.
Eskom has not been able to reliably provide electrical power and as a result ‘‘load-shedding’’ (planned and
unplanned rolling power outages) is expected for the foreseeable future. In addition, in 2021, Eskom received a
governmental order to reduce by one-third its operating capacity to limit its greenhouse gas emissions. Although
Eskom is currently appealing the government order, there is no assurance that Eskom will be successful in its
appeal. We have also experienced increased electricity prices and future price increases are expected to occur.
Capacity reductions, load shedding, and/or electricity price increases could have a material adverse effect on our
business, financial conditions and results of operations.
Our operations in South Africa are reliant on services provided by the State-owned, sole provider of rail
transport, Transnet Freight Rail and ocean transport, Transnet National Port Authority (collectively ‘‘Transnet’’).
Furthermore, Transnet provides extensive dockside services at both the ports of Richards Bay and Saldanha Bay
from where we export bulk quantities of TiO2 feedstock to our pigment plants worldwide and pig iron. Like
Eskom, Transnet faces chronic operational and financial challenges. In 2021, Port of Richards Bay, which is
owned and operated by Transnet, was impacted by two separate events, including a significant fire, which
damaged part of the Port’s infrastructure, causing increased shipment delays. Such shipment delays at the port of
Richards Bay continued in 2022, and we believe such delays may continue in 2023 and beyond. Delays or
interruptions at either the rail service or the ports in which we receive and/or export material could have a
negative impact on our business, financial condition and results of operations.
In addition, our KZN Sands operations currently use approximately 340,000 gigajoules of Sasol gas, which
is available only from Sasol Limited. As such, an interruption in the supply of Sasol gas could have a material
adverse effect on our business, financial conditions and results of operations.
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In addition, under South African law, our South African mining operations are subject to water-use licenses
that govern each operation. These licenses require, among other conditions, that mining operations achieve and
maintain certain water quality limits for all water discharges, where applicable. Changes to water-use licenses
could increase our costs of operations thereby affecting our operational results and financial condition.
The aforementioned operational risks, as well as any other foreseen or unforeseen operational risks primarily
related to doing business in South Africa, could have a material adverse effect on our business, financial
condition and results of operations.
As an emerging market, South Africa poses a challenging array of long-term political, social and economic risks.
South Africa continues to undergo political, social and economic challenges. For example, in 2021,
unprecedented and politically motivated civil unrest in South Africa resulted in significant damage to the national
supply chains and logistics. The primary area of unrest was near to our KZN operations. Changes to, or
instability in, the economic, social or political environment in South Africa which cause civil unrest, shortages of
production materials, interruptions to transportation networks, or labor unrest could result in production delays
and production shortfalls, and materially impact our production and results of operations.
The South African government has recently embarked on a process of identifying and securing land for
persons who were previously dispossessed of such land as a result of Apartheid policies. In December 2019, the
South African government released a draft land expropriation bill for public comment. The land expropriation bill
contemplates that, where it is in the ‘‘public interest’’, land may be expropriated by the South African
government, without compensation being payable to the current owners. While the South African government has
indicated that such measures will be applied initially to state-owned land, it is possible that such measures may
extend to agricultural and mining areas. In the event that the land on which the Namakwa Sands and KZN Sands
operations are situated areas become the subject of a land claim under any such proposed or future land
expropriation bill, it may have a material adverse effect on our business, financial condition and results of
operations.
The South African government’s exchange control regulations require resident companies to obtain the prior
approval of the South African Reserve Bank to raise capital in any currency other than the Rand, and restrict the
export of capital from South Africa. While the South African government has relaxed exchange controls in recent
years, it is difficult to predict whether or how it will further change or abolish exchange control measures in the future.
These exchange control restrictions could hinder our financial and strategic flexibility, particularly our ability to use
South African capital to fund acquisitions, capital expenditures, and new projects outside of South Africa.
Our South African operations have been affected by inflation in South Africa in recent years. Employment
costs and wages in South Africa have increased in recent years, resulting in significant cost pressures for the
mining industry. Prolonged or heightened inflation and associated cost pressures could have a material adverse
effect on our business, financial condition and results of operations.
Our South African operations have entered into various collective agreements with organized labor regulating
wages and working conditions at our mines and smelter operations. There have been periods when various
stakeholders have been unable to agree on dispute resolution processes, leading to threats of disruptive industrial action
disputes. Due to the high level of employee union membership, our South African operations are at risk of production
stoppages for indefinite periods due to strikes and other labor disputes. Although we believe that we have good labor
relations with our South African employees, we may experience labor disputes in the future.
In addition, although we believe that our relationships with our various local communities are good, the
areas in which our South African operations are situated are the traditional homelands of various tribal groupings
that are historically politically volatile. This volatility persists today and frequently results in violent, destructive
behaviors. Increased volatility and any consequential civil unrest may result in production stoppages and/or the
destruction of assets which comprise our South African operations, any of which could have a material adverse
effect on our business, financial condition and results of operations.
Political and social instability, and unrest, and actual, or potential, armed conflicts in the Middle East region
may affect the Company’s results of operations and financial position.
Our operations in KSA have been affected in the past, and may be affected in the future, by political, social
and economic conditions from time to time prevailing in, or affecting, KSA or the wider Middle East region,
including by rocket attacks from armed rebel groups. For example, since 2011, a number of countries in the
18
Middle East region have witnessed significant social unrest, including widespread public demonstrations, and, in
certain cases, armed conflict, terrorist attacks, diplomatic disputes, foreign military intervention and a change of
government. In addition, KSA faces a number of challenges arising mainly from the relatively high levels of
unemployment among the Saudi youth population, requests for political and social changes, and the security
threat posed by certain groups. Should KSA experience similar political and social unrest as found in other
countries in the Middle East, the Saudi Arabian economy could be adversely affected, our TiO2 plant located in
Yanbu could be temporarily disrupted or materially adversely affected and our business and operating results
could be materially adversely affected.
In addition, the Slagger, that is subject to the Option or Put (as defined elsewhere herein), is located in
Jazan, KSA near the border between KSA and Yemen which has been subject to rocket attacks from armed rebel
groups fighting the KSA military in Yemen. Further attacks could materially adversely affect our business and
operating results.
Our results of operations may be adversely affected by fluctuations in currency exchange rates.
The financial condition and results of operations of our operating entities outside the U.S. are reported in
various foreign currencies, primarily the South African Rand, Australian Dollars, Euros, Pound Sterling and
Brazilian Real and then converted into U.S. dollars at the applicable exchange rate for inclusion in the financial
statements. A significant portion of our costs are denominated in currencies other than the U.S. dollar. As a
result, any volatility of the U.S. dollar against these foreign currencies creates uncertainty for, and may have a
negative impact on, reported sales and operating margin. In addition, our operating entities often need to convert
currencies they receive for their products into currencies in which they purchase raw materials or pay for
services, which could result in a gain or loss depending on fluctuations in exchange rates. In order to manage
this risk, we have, from time to time, entered into forward contracts to buy and sell foreign currencies.
RISKS RELATING TO OUR DEBT AND CAPITAL STRUCTURE
We are a holding company that is dependent on cash flows from our operating subsidiaries to fund our debt
obligations, capital expenditures and ongoing operations.
All of our operations are conducted, and all of our assets are owned, by our operating companies, which are
our subsidiaries. We intend to continue to conduct our operations at the operating company level. Consequently,
our cash flow and our ability to meet our obligations or make cash distributions depends upon the cash flow of
our operating companies, and the payment of funds by our operating companies in the form of dividends or
otherwise. The ability of our operating companies to make any payments to us depends on their earnings, the
terms of their indebtedness, including the terms of any credit facilities, or indentures, and legal restrictions
regarding the transfer of funds.
Our ability to service our debt and fund our planned capital expenditures and ongoing operations will
depend on our ability to generate and increase cash flow, and our access to additional liquidity sources. Our
ability to generate and increase cash flow is dependent on many factors, including many of other risks described
in this section entitled ‘‘Risk Factors’’.
The agreements and instruments governing our debt contain restrictions and limitations that could affect our
ability to operate our business, as well as impact our liquidity.
As of December 31, 2022, our total principal amount of debt was approximately $2.5 billion. Our credit
facilities contain covenants that could adversely affect our ability to operate our business, our liquidity, and our
results of operations. These covenants may restrict, among other things, our and our subsidiaries’ ability to:
•
•
incur or guarantee additional indebtedness;
complete asset sales, acquisitions or mergers;
• make investments and capital expenditures;
•
prepay other indebtedness;
•
•
enter into transactions with affiliates; and
fund additional dividends or repurchase shares.
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Certain of our indebtedness facilities and senior notes include requirements relating to the ratio of adjusted
EBITDA to indebtedness or certain fixed charges. The breach of any covenants or obligations in our credit
facilities, not otherwise waived or amended, could result in a default under the applicable debt obligations (and
cross-defaults to certain other debt obligations) and could trigger acceleration of those obligations, which in turn
could trigger other cross defaults under other existing or future agreements governing our long-term
indebtedness. In addition, the secured lenders under the credit facilities could foreclose on their collateral, which
includes equity interests in our subsidiaries, and exercise other rights of secured creditors. Any default under
those credit facilities could adversely affect our growth, our financial condition, our results of operations and our
ability to make payments on our credit facilities, and could force us to seek the protection of bankruptcy laws.
We may need additional capital in the future and may not be able to obtain it on favorable terms, and such
capital expenditure projects may not realize expected investment returns.
Our business is capital intensive, and our success depends to a significant degree on our ability to maintain
our manufacturing operations and invest in those operations to expand capacity and remain competitive from a
cost perspective. We may require additional capital in the future to finance capital investments, for a variety of
purposes, including (i) replacement of mines that are end of life, (ii) expansion or optimization of existing
production facilities or mining operations, (iii) ongoing research and development activities, (iv) business
development opportunities in rare earth or other critical minerals, and (v) general working capital needs. For
instance, in 2020 we began the implementation of a multi-year global digital transformation, known as Project
newTRON, that includes the acquisition and implementation of new operational and financial systems,
technology and processes, including a global ERP system. The implementation of our digital transformation
involves numerous risks, including (i) new information and operational technologies and systems not being
properly designed, integrated, managed and implemented or a delay in such implementation, (ii) diversion of
management’s attention away from normal daily business operations, (iii) significant or material weaknesses in
our financial controls or delays in timely reporting our results of operations, and (iv) initial dependence on
unfamiliar systems while training personnel to use new systems. Such risks could significantly increase the
program’s costs, cause us to fail to achieve the anticipated benefits from the program, and negatively impact our
operations, including, our plant’s system safety, functionality and effectiveness. Although we have taken, and will
continue to take, significant steps to mitigate the potential negative impact of the implementation of such new
digital systems, there can be no assurance that these procedures will be completely successful.
Additionally, we entered into the Option Agreement with AMIC pursuant to which AMIC granted us an
option to acquire 90% of a SPV, to which AMIC’s ownership in the Slagger will be contributed together with
$322 million of indebtedness currently held by AMIC. Upon exercise of the Option or Put, there can be no
assurance that we may assume this indebtedness and may need to obtain funding to repay it at maturity. In the
event we require any additional financing, such financing may not be available when needed on terms favorable
to us, or at all. If we are unable to obtain adequate funds on acceptable terms, we may be unable to maintain,
expand or lower the operating costs of our facilities or take advantage of future opportunities or respond to
competitive pressures, which could harm our results of operations, financial condition and business prospects.
Additionally, if we undertake these projects, they may not be completed on schedule, at the budgeted cost,
or at all. Moreover, our revenue may not increase immediately upon the expenditure of funds on a particular
project. As a result, we may not be able to realize our expected investment return, which could adversely affect
our results of operations and financial condition.
RISKS RELATING TO OUR LEGAL AND REGULATORY ENVIRONMENT
Our South African mining rights are subject to onerous regulatory requirements imposed by legislation and
the Department of Mineral Resources and Energy (the ‘‘DMRE’’), the compliance with which could have a
material adverse effect on our business, financial condition and results of operations.
Black economic empowerment (‘‘BEE’’) legislation was introduced into South Africa as a means to seek to
redress the inequalities of the previous Apartheid system by requiring the inclusion of historically disadvantaged
South Africans in the mainstream economy. Under BEE legislation, certain of our operations are required to be
partially owned by historically disadvantaged South Africans — known as ‘‘empowerment’’ — and comply with
other provisions of applicable BEE legislation that relate to matters such as mandatory procurement and
employment opportunities for the communities in which we operate. On March 1, 2019, a new set of BEE rules
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and regulations relevant to our operation came into effect known as ‘‘Mining Charter III’’. Under the
‘‘empowerment’’ rules of Mining Charter III, certain of our operations require a 30% BEE shareholding that must
be structured through a special purpose vehicle comprised of black entrepreneurs, the local community
surrounding the relevant mining area and eligible employees. In addition, Mining Charter III sets forth more
stringent requirements applicable to all of our South African operations, including: the procurement of goods and
services from BEE compliant entities; race, age and gender based employment quotas; and, workers’ housing and
living conditions. Uncertainty over the status of Mining Charter III arose when in September 2021, the
South African High Court ruled that certain provisions of Mining Charter III were unconstitutional and that
Mining Charter III cannot be considered binding legislation. Although the DMRE determined not to appeal such
ruling, there is no assurance that all the provisions of Mining Charter III will take effect or that the DMRE as
result of such ruling will not attempt to enforce the same or more onerous provisions through legislative
amendments.
Prior to Mining Charter III, BEE in the South African mining sector was governed by Mining Charter II.
Under Mining Charter II, our South African operations were ‘‘empowered’’ by a 26% ownership interest in two
of our South African subsidiaries by Exxaro Resources Limited (‘‘Exxaro’’) which prior to 2017 was greater than
50% owned by historically disadvantaged South Africans. We believe that under Mining Charter III the two
South African subsidiaries in which Exxaro previously held 26% became permanently ‘‘empowered’’ —
so-called, ‘‘once empowered always empowered’’.
‘‘Once empowered always empowered’’ means that a South African company that has had the requisite
shareholding base consisting of historically disadvantaged South Africans as at December 31, 2014 will always
qualify as an ‘‘empowered’’ entity for purposes of the retention of an existing mining right for the duration of
that right. The question of whether the ‘‘once empowered always empowered’’ principle applies in the mining
industry in South Africa has been subject to litigation between the Minerals Council of South Africa (the
‘‘Minerals Council’’) (formerly the Chamber of Mines, an industry body that represents approximately 90% of
the South African Mining Industry) and the DMRE. The South African High Court decided in the affirmative for
the Minerals Council and such decision was subsequently confirmed on appeal. Thus, based on the High Court’s
ruling, the ‘‘once empowered always empowered’’ principle applies to our existing mining rights. In addition, the
South African High Court in connection with its September 2021 decision with respect to the unconstitutionality
of Mining Charter III also confirmed that ‘‘once empowered always empowered’’ applies to the renewal and
transfer of mining rights. However, there is no assurance that DMRE may not enact new legislation that would
undermine the court’s ruling regarding the applicability of ‘‘once empowered always empowered’’ to the renewal
and transfer of mining rights. In the event that ‘‘once empowered always empowered’’ does not ultimately apply
to the renewal or transfer of mining rights it could have a material adverse effect on our business, financial
condition and results of operations.
Our failure to comply with the anti-corruption laws of the U.S. and various international jurisdictions could
negatively impact our reputation and results of operations.
Doing business on a global basis requires us to comply with the laws and regulations of the U.S.
government and those of various international jurisdictions, and our failure to successfully comply with these
rules and regulations may expose us to liabilities. In particular, our operations are subject to U.S. and foreign
anti-corruption laws and regulations, such as the U.S. Foreign Corrupt Practices Act (‘‘FCPA’’), the U.K. Bribery
Act 2010 (‘‘U.K. Bribery Act’’), as well as anti-corruption laws of the various jurisdictions in which we operate.
Our global operations may expose us to the risk of violating, or being accused of violating, the foregoing or
other anti-corruption laws. Such violations could be punishable by criminal fines, imprisonment, civil penalties,
disgorgement of profits, injunctions, and exclusion from government contracts, as well as other remedial
measures. Investigations of alleged violations can be very expensive, disruptive, and damaging to our reputation.
Although we have implemented anti-corruption policies and procedures, there can be no guarantee that these
policies, procedures, and training will effectively prevent violations by our employees or representatives in the
future. Additionally, we face a risk that our distributors and other business partners may violate the FCPA, the
U.K. Bribery Act, or similar laws or regulations. Such violations could expose us to FCPA and U.K. Bribery Act
liability and/or our reputation may potentially be harmed by their violations and resulting sanctions and fines.
We are subject to many environmental, health and safety regulations.
Our operations and production facilities are subject to extensive environmental and health and safety laws
and regulations at national, international and local levels in numerous jurisdictions relating to use of natural
21
resources, pollution, protection of the environment, mine site remediation, transporting and storing raw materials
and finished products, and storing and disposing of hazardous wastes among other materials. Moreover, certain
environmental laws impose joint and several and/or strict liability for costs to clean up and restore sites where
pollutants have been disposed or otherwise spilled or released. We cannot be certain that we will not incur
significant costs and liabilities for remediation or damage to property, natural resources or persons as a result of
spills or releases from our operations or those of a third party.
The costs of compliance with the extensive environmental, health and safety laws and regulations or the
inability to obtain, update or renew permits required for operation or expansion of our business could negatively
impact our results of operations or otherwise adversely affect our business. If we fail to comply with the
conditions of our permits governing the production and management of regulated materials, mineral sands mining
licenses or leases or the provisions of the relevant jurisdictional laws in which we operate, these permits, mining
licenses or leases and mining rights could be canceled or suspended, and we could be prevented from obtaining
new mining and prospecting rights, which could materially and adversely affect our business, operating results
and financial condition. Additionally, we could incur substantial costs, including fines, damages, criminal or civil
sanctions and remediation costs, or experience interruptions in our operations, for violations arising under these
laws and regulations, including operating without the required permits, mining licenses or leases and/or mining
rights. In the event of a catastrophic incident involving any of the raw materials we use, or chemicals or mineral
products we produce, we could incur material costs as a result of addressing the consequences of such event.
Changes to existing laws governing operations, especially changes in laws relating to transportation of
mineral resources, the treatment of land and infrastructure, contaminated land, the remediation of mines, tax
royalties, waste handling and management, exchange control restrictions, environmental remediation, mineral
rights, ownership of mining assets, or the rights to prospect and mine may have a material adverse effect on our
future business operations and financial performance. There is risk that onerous conditions may be attached to
authorizations in the form of mining rights, water-use licenses, miscellaneous licenses and environmental
approvals, or that the grant of these approvals may be delayed or not granted.
Our TiO2 products are subject to increased regulatory scrutiny, that may impede or inhibit widespread usage
of TiO2 and / or diminish the Company’s ability to sustain or grow its business or may add significant costs of
doing business.
Current regulatory and societal demands for increased protection against products which may cause cancer,
genetic mutations or other long-term health problems are resulting in increased pressure for more stringent
regulation of our TiO2 products. We expect these trends to continue and the ultimate cost of compliance could be
material. In particular, changes to product safety regulations could limit the use of, and demand for, our TiO2
products, require investment in new product development or the way we manufacture our existing products, and
increase regulatory compliance expenditures for us and our suppliers.
For instance, in 2020, the European Commission adopted a regulation classifying certain forms of TiO2 with
a particular aerodynamic diameter as a Category 2 carcinogen by inhalation. However, in November 2022, the
European Court of Justice annulled the European Commission’s classification of TiO2 as a carcinogen primarily
on the basis that there was no evidence that TiO2 may cause cancer when inhaled. As of the date hereof, the
European Commission has not appealed such decision. In the event that the European Commission appeals the
ruling and its ultimately successful, the classification of TiO2 as a Category 2 Carcinogen could impact our
business by inhibiting the marketing of products containing TiO2 to consumers, and subject our manufacturing
operations to new regulations that could increase costs. In addition, notwithstanding the European Court of
Justice decision, the proposed Category 2 classification and labelling requirements could have additional effects
under other EU laws (e.g., those affecting medical and pharmaceutical applications, cosmetics, food packaging
and food additives) and/or trigger heightened regulatory scrutiny in countries and local jurisdictions outside the
EU based on health and safety grounds. For instance, the Health and Safety Executive in the U.K. has published
the U.K.’s mandatory classification and labelling list, which includes the classification of TiO2 as a suspected
carcinogen (in a powder form containing 1% or more of particles with aerodynamic diameter ≤ 10 µm). The
classification became mandatory in the U.K. in October 2021.
In May 2021, the European Food Safety Authority (EFSA) announced new guidelines which concluded that
a certain digestible form of TiO2 known as E171 is no longer considered safe as a food additive due to
uncertainty for genotoxicity. Though we do not manufacture E171, the EFSA guidelines indicate additional
regulatory review of our TiO2 products is likely which could result in more stringent qualifications and
22
use-restriction being applied or to the introduction of further classifications. It is also possible that heightened
regulatory scrutiny could lead to claims by consumers or those involved in the production of such products
alleging adverse health impacts. In addition, there is no assurance that other materials which we add to our TiO2
products could also be subject to increased regulation which could impact the cost of labelling or the sales of our
products. For instance, certain of our plastic grades are used in food contact materials and in October 2022, the
European Commission launched a public consultation aiming to revise the European Union regulations on food
contact materials. While the outcome of such consultation remains uncertain, any additional regulatory
requirements on the use of food contact materials ultimately imposed by the European Commission could have a
material adverse effect on our business, financial condition and results of operations.
ESG issues, including those related to climate change and sustainability, may subject us to additional costs
and restrictions, including increased energy and raw material costs, which could have an adverse effect on
our business, financial condition and results of operations, as well as damage our reputation.
Climate change resulting from increased concentrations of carbon dioxide and other greenhouse gases in the
atmosphere could present risks to our present and future operations from natural disasters and extreme weather
conditions, such as flooding, hurricanes, earthquakes and wildfires. Such extreme weather conditions could pose
physical risks to our facilities and disrupt the operation of our supply chain, increase operational costs and have a
material adverse effect on our business and results of operations. In addition, if any of the equipment on which
we depend were severely damaged or were destroyed by environmental hazards or otherwise, we may be unable
to replace or repair it in a timely manner or at a reasonable cost, which would impact our ability to produce and
ship our products, which would have a material adverse effect on our business, financial condition or results of
operations. For instance, in the fourth quarter of 2022, the region of New South Wales, Australia where our
Ginkgo and Atlas Campaspe mining operations are located experienced historic flooding which has resulted in,
among other things, a delay in the commissioning of our new Atlas Campaspe mine as well as prevented
feedstock mined at such sites from being transported to our Australian pigment plants in a timely manner. Such
flooding had an adverse effect on our business, financial condition and results of operations in 2022 and we
believe will also have an impact to our 2023 financial results. Moreover, the impacts of climate change on global
water resources may result in water scarcity, which could impact our ability to access sufficient quantities of
water in certain locations and result in increased costs. For instance, we use significant amounts of water in our
South Africa operations. Certain regions of South Africa have experienced in the past, and are prone to, drought
conditions resulting in water restrictions being imposed in such areas. A prolonged drought in a region of South
Africa where our operations are located may lead to water use restrictions which could have a material adverse
effect on our business, financial condition and results of operations.
The majority of our greenhouse gas emissions are generated from our TiO2 slag furnaces in South Africa,
synthetic rutile kiln in Australia, and TiO2 pigment plants in the United States, United Kingdom, France, Brazil,
China, Netherlands, Australia, and Saudi Arabia. Concerns about the relationship between greenhouse gases and
global climate change, and an increased focus on carbon neutrality, may result in new or increased legal and
regulatory requirements on both national and supranational levels, to monitor, regulate, control and tax emissions
of carbon dioxide and other greenhouse gases. A number of governmental bodies have already introduced, or are
contemplating, regulatory changes in response to climate change, including regulating greenhouse gas emissions.
Any laws or regulations that are adopted to reduce emissions of greenhouse gases could, among other things,
(i) cause an increase to our raw material costs, (ii) increase our costs to operate and maintain our facilities
including potentially causing the operation or maintenance of certain sites to be uneconomical, and (iii) increase
costs to administer and manage emissions programs.
In addition, companies across all industries are facing increasing scrutiny relating to their ESG policies.
Increased focus and activism related to ESG may hinder the Company’s access to capital, as investors may
reconsider their capital investment as a result of their assessment of the Company’s ESG practices. In particular,
customers, investors and other stakeholders are increasingly focusing on environmental issues, including climate
change, water use, and other sustainability concerns. Moreover, increased regulatory requirements, including in
relation to various aspects of ESG including disclosure requirements, may result in increased compliance or input
costs of energy, raw materials or compliance with emissions standards, which may cause disruptions in the
manufacture of our products or an increase in operating costs. Any failure to achieve our ESG goals or a
perception of our failure to act responsibly with respect to the environment or to effectively respond to new, or
23
changes in, legal or regulatory requirements concerning environmental or other ESG matters, or increased
operating or manufacturing costs due to increased regulation, could adversely affect our business, financial
condition and results of operations, as well as our reputation.
If our intellectual property were compromised or copied by competitors, or if competitors were to develop
similar intellectual property independently, our results of operations could be negatively affected. Further,
third parties may claim that we infringe on their intellectual property rights which could result in costly
litigation.
Our success depends to a significant degree upon our ability to protect and preserve our patents and
unpatented proprietary technology, operational knowledge and other trade secrets (collectively ‘‘intellectual
property rights’’). The undetected or unremedied unauthorized use of our intellectual property rights or the
legitimate development or acquisition of intellectual property related to our industry by third parties could reduce
or eliminate any competitive advantage we have as a result of our intellectual property rights. If we must take
legal action to protect, defend or enforce our intellectual property rights, any suits or proceedings could result in
significant costs and diversion of our resources and our management’s attention, and we may not prevail in any
such suits or proceedings. A failure to protect, defend or enforce our intellectual property rights could have an
adverse effect on our financial condition and results of operations.
Although there are currently no pending or threatened proceedings or claims known to us that are material
relating to alleged infringement, misappropriation or violation of the intellectual property rights of others, we
may be subject to legal proceedings and claims in the future in which third parties allege that their patents or
other intellectual property rights are infringed, misappropriated or otherwise violated by us or our products or
processes. In the event that any such infringement, misappropriation or violation of the intellectual property
rights of others is found, we may need to obtain licenses from those parties or substantially re-engineer our
products or processes to avoid such infringement, misappropriation or violation. We might not be able to obtain
the necessary licenses on acceptable terms or be able to re-engineer our products or processes successfully.
Moreover, if we are found by a court of law to infringe, misappropriate or otherwise violate the intellectual
property rights of others, we could be required to pay substantial damages or be enjoined from making, using or
selling the infringing products or technology. We also could be enjoined from making, using or selling the
allegedly infringing products or technology pending the final outcome of the suit. Any of the foregoing could
adversely affect our financial condition and results of operations.
We may be subject to litigation, the disposition of which could have a material adverse effect on our results of
operations.
The nature of our operations exposes us to possible litigation claims, including disputes with competitors,
customers, equipment vendors, environmental groups and other non-governmental organizations, and providers of
shipping services. Some of the lawsuits may seek fines or penalties and damages in large amounts, or seek to
restrict our business activities. Because of the uncertain nature of any litigation and coverage decisions, we
cannot predict the outcome of these matters or whether insurance claims may mitigate any damages to us.
Litigation is very costly, and the costs associated with prosecuting and defending litigation matters could have a
material adverse effect on our results of operations and financial condition. See Note 18 of notes to our
consolidated financial statements, included elsewhere in this Form 10-K for further information regarding our
commitments and contingencies.
Our flexibility in managing our labor force may be adversely affected by labor and employment laws in the
jurisdictions in which we operate, many of which are more onerous than those of the U.S.; and some of our
labor force has substantial workers’ council or trade union participation, which creates a risk of disruption
from labor disputes and new laws affecting employment policies.
The vast majority of our employees are located outside the U.S. In most of those countries, labor and
employment laws are more onerous than in the U.S. and, in many cases, grant significant job protection to
employees, including rights on termination of employment. Moreover, many of our workforce outside the U.S.
belong to unions and/or are represented by a collective bargaining agreement. As such, in such jurisdictions we
are required to consult with, and seek the consent or advice of, various employee groups or works’ councils that
represent our employees for any changes to our activities or employee benefits. This requirement could have a
significant impact on our flexibility in managing costs and responding to market changes.
24
RISKS RELATING TO ACCOUNTING AND TAXATION
If our intangible assets or other long-lived assets become impaired, we may be required to record a significant
noncash charge to earnings.
We have a significant amount of intangible assets and other long-lived assets on our consolidated balance
sheets. Under U.S. GAAP, we review our intangible assets and other long-lived assets for impairment when
events or changes in circumstances indicate the carrying value may not be recoverable. Factors that may be
considered a change in circumstances, indicating that the carrying value of our intangible assets and other
long-lived assets may not be recoverable, include, but are not limited to, a significant decline in share price and
market capitalization, changes in the industries in which we operate, particularly the impact of a downturn in the
global economy, as well as competition or other factors leading to reduction in expected long-term sales or
results of operations. We may be required to record a significant noncash charge in our financial statements
during the period in which any impairment of our intangible assets and other long-lived assets is determined,
negatively impacting our results of operations.
Our ability to use our tax attributes to offset future income may be limited.
Our ability to use net operating losses (‘‘NOLs’’) and Section 163(j) interest expense carryforwards
generated by us could be substantially limited if we were to experience an ‘‘ownership change’’ as defined under
Section 382 of the U.S. Internal Revenue Code of 1986, as amended (‘‘the Code’’). In general, an ownership
change would occur if our ‘‘5-percent shareholders,’’ as defined under Section 382 of the Code and including
certain groups of persons treated as ‘‘5-percent shareholders,’’ collectively increased their ownership in us by
more than 50 percentage points over a rolling three-year period. Although we believe we have sufficient
protection of our approximately $4.3 billion of NOLs and/or approximately $769 million of Section 163(j)
interest expense carryforwards, there can be no assurance that an ownership change for U.S. federal and
applicable state income tax purposes will not occur in the future. A corporation that experiences an ownership
change will generally be subject to an annual limitation on the use of certain pre-ownership change losses and/or
credits. Such a limitation could, for any given year, have the effect of increasing the amount of our U.S. federal
and/or state income tax liability, which would negatively impact our financial condition and the amount of
after-tax cash available for distribution to holders of our ordinary shares if declared by our board of directors.
We could be subject to changes in tax rates, adoption of new tax laws or additional tax liabilities.
We are subject to taxation in all of the jurisdictions in which we operate. Our future effective tax rate could
be affected by changes in statutory rates and other legislative changes, or changes in determinations regarding the
jurisdictions in which we are subject to tax. From time to time, the U.S. federal, state and local and foreign
governments make substantive changes to tax rules and their application, which could result in higher corporate
taxes than would be incurred under existing tax law and could have an adverse effect on our results of operations
or financial condition. From time to time, we are also subject to tax audits by various taxing authorities.
Although we believe our tax positions are appropriate, the final determination of any future tax audits could be
materially different from our income tax provisions, accruals and reserves and any such unfavorable outcome
from a future tax audit could have a material adverse effect on our results of operations or financial condition.
Failure to meet some or all of our key financial and non-financial targets could negatively impact the value
of our business and adversely affect our stock price.
From time to time, we may announce certain key financial and non-financial targets that are expected to
serve as benchmarks for our performance for a given time period, such as, projections for our future revenue
growth, Adjusted EBITDA, Adjusted diluted earnings per share and free cash flow. Our failure to meet one or
more of these key financial targets may negatively impact our results of operations, stock price, and shareholder
returns. The factors influencing our ability to meet these key financial targets include, but are not limited to,
changes in the global economic environment relating to our TiO2 products and zircon, changes in our competitive
landscape, including our relationships with new or existing customers, our ability to introduce new products,
applications, or technologies, our inability to complete strategic projects on budget or on schedule, our
undertaking an acquisition, joint venture, or other strategic arrangement, and other factors described within this
Item 1A – Risk Factors, many of which are beyond our control.
25
RISKS RELATING TO INVESTING IN OUR ORDINARY SHARES
Concentrated ownership of our ordinary shares by Cristal may prevent minority shareholders from influencing
significant corporate decisions and may result in conflicts of interest.
As of December 31, 2022, Cristal Inorganic, an affiliate of Cristal owned approximately 24% of our
outstanding ordinary shares. As such, Cristal Inorganic may be able to influence fundamental corporate matters
and transactions. This concentration of ownership, may delay, deter or prevent acts that would be favored by our
other shareholders. The interests of Cristal Inorganic may not always coincide with our interests or the interests
of our other shareholders. Also, Cristal Inorganic may seek to cause us to take courses of action that, in their
judgment, could enhance their investment in us, but which might involve risks to our other shareholders or
adversely affect us or our other shareholders.
In addition, under the shareholders agreement (the ‘‘Cristal Shareholders Agreement’’) we entered into at the
closing of the Cristal transaction with Cristal, as long as Cristal Inorganic and the three shareholders of Cristal
(collectively, the ‘‘Cristal Shareholders’’) collectively beneficially own at least 24,900,000 or more of our
ordinary shares, they have the right to designate for nomination two directors of our board of directors (the
‘‘Board’’). As long as the Cristal Shareholders collectively beneficially own at least 12,450,000 ordinary shares
but less than 24,900,000 ordinary shares, they have the right to designate for nomination one director of the
Board. The Cristal Shareholders Agreement also provides that as long as the Cristal Shareholders collectively
beneficially own at least 12,450,000 ordinary shares they have certain preemptive rights. Also, pursuant to the
Cristal Shareholders Agreement, we have filed a universal shelf registration statement which is currently effective
and which would cover shares owned by Cristal.
As a result of these or other factors, including as a result of any offering of shares by Cristal, or the
perception that such sales may occur, the market price of our ordinary shares could decline. In addition, this
concentration of share ownership may adversely affect the trading price of our ordinary shares because investors
may perceive disadvantages in owning shares in a company with significant shareholders or with significant
outstanding shares with registration rights.
English law and provisions in our articles of association may have anti-takeover effects that could discourage
an acquisition of us by others, even if an acquisition would be beneficial to our shareholders, and may
prevent attempts by our shareholders to replace or remove our current management.
Certain provisions of the U.K. Companies Act 2006 (the ‘‘Companies Act’’) and our articles of association
may have the effect of delaying or preventing a change in control of us or changes in our management. For
example, our articles of association include provisions that:
• maintain an advance notice procedure for proposed nominations of persons for election to our board of
directors;
•
•
provide certain mandatory offer provisions, including, among other provisions, that a shareholder,
together with persons acting in concert, that acquires 30 percent or more of our issued shares without
making an offer to all of our other shareholders that is in cash or accompanied by a cash alternative
would be at risk of certain sanctions from our board of directors unless they acted with the prior
consent of our board of directors or the prior approval of the shareholders; and
provide that vacancies on our board of directors may be filled by a vote of the directors or by an
ordinary resolution of the shareholders.
In addition, public limited companies are prohibited under the Companies Act from taking shareholder
action by written resolution. These provisions, alone or together, could delay or prevent hostile takeovers and
changes in control or changes in our management.
Although we do not anticipate being subject to the U.K. City Code on Takeovers and Mergers, such Takeover
Code may still have anti-takeover effects in the event the Takeover Panel determines that such Code is
applicable to us.
The U.K. City Code on Takeovers and Mergers (the ‘‘Takeover Code’’) applies, among other things, to an
offer for a public company whose registered office is in the U.K. (or the Channel Islands or the Isle of Man) and
whose securities are not admitted to trading on a regulated market in the U.K. (or on any stock exchange in the
26
Channel Islands or the Isle of Man) if the company is considered by the Panel on Takeovers and Mergers (the
‘‘Takeover Panel’’) to have its place of central management and control in the U.K. (or the Channel Islands or
the Isle of Man). This is known as the ‘‘residency test.’’ The test for central management and control under the
Takeover Code is different from that used by the U.K. tax authorities. Under the Takeover Code, the Takeover
Panel will determine whether we have our place of central management and control in the U.K. by looking at
various factors, including the structure of our board of directors, the functions of the directors and where they are
resident.
Given that currently all of the members of our Board of Directors reside outside the United Kingdom, we
do not anticipate that we will be subject to the Takeover Code. However, if at the time of a takeover offer, the
Takeover Panel determines that we have our place of central management and control in the U.K., we would be
subject to a number of rules and restrictions, including but not limited to the following: (1) our ability to enter
into deal protection arrangements with a bidder would be extremely limited; (2) we might not, without the
approval of our shareholders, be able to perform certain actions that could have the effect of frustrating an offer,
such as issuing shares or carrying out acquisitions or disposals; and (3) we would be obliged to provide equality
of information to all bona fide competing bidders.
As a public limited company incorporated in England and Wales, certain capital structure decisions requires
approval of our shareholders, which may limit our flexibility to manage our capital structure.
The Companies Act generally provides that a board of directors of a public limited company may only allot
shares (or grant rights to subscribe for or convertible into shares) with the prior authorization of shareholders,
such authorization stating the maximum amount of shares that may be allotted under such authorization and
specifying the date on which such authorization will expire, being not more than five years, each as specified in
the articles of association or relevant shareholder resolution. We obtained previous shareholder authority to allot
additional shares for a period of five years from February 25, 2019, which authorization will need to be renewed
at least upon expiration (five years from February 25, 2019) but may be sought more frequently for additional
five-year terms (or any shorter period).
The Companies Act generally provides that existing shareholders of a company have statutory pre-emption
rights when new shares in such company are allotted and issued for cash. However, it is possible for such
statutory pre-emption right to be disapplied by either shareholders passing a special resolution at a general
meeting, being a resolution passed by at least 75% of the votes cast, or by inclusion of relevant provisions in the
articles of association of the company. Such a disapplication of statutory pre-emption rights may not be for more
than five years. We obtained previous shareholder authority to disapply statutory pre-emption rights for a period
of five years from February 25, 2019, which disapplication will need to be renewed upon expiration (i.e., at least
every five years) to remain effective, but may be sought more frequently for additional five-year terms (or any
shorter period).
The Companies Act generally prohibits a public limited company from repurchasing its own shares without
the prior approval of its shareholders by ordinary resolution, being a resolution passed by a simple majority of
votes cast, and subject to compliance with other statutory formalities. Such authorization may not be for more
than five years from the date on which such ordinary resolution is passed. We obtained previous shareholder
authority to repurchase shares for a period of five years from February 25, 2019, which authorization will need
to be renewed at least upon expiration (i.e., five years from February 25, 2019) but may be sought more
frequently for additional five-year terms (or any shorter period).
Transfers of our ordinary shares outside The Depository Trust may be subject to stamp duty or stamp duty
reserve tax in the U.K., which would increase the cost of dealing in our shares.
Except for ordinary shares received by a holder deemed to be an affiliate of us for purposes of U.S.
securities laws, our ordinary shares have been issued to a nominee for The Depository Trust Company (‘‘DTC’’)
and corresponding book-entry interests credited in the facilities of DTC. On the basis of current law and HM
Revenue and Customs (‘‘HMRC’’) practice, no charges to U.K. stamp duty or stamp duty reserve tax (‘‘SDRT’’)
are expected to arise on the issue of the ordinary shares into DTC’s facilities or on transfers of book-entry
interests in ordinary shares within DTC’s facilities.
Shareholders are strongly encouraged to hold their ordinary shares in book entry form through DTC.
Transfers of shares held in book entry form through DTC currently do not attract a charge to stamp duty or
27
SDRT in the U.K. A transfer of title in the shares from within the DTC system out of DTC, including to
certificate shares, and any subsequent transfers that occur entirely outside the DTC system will attract a charge to
stamp duty at a rate of 0.5% of any consideration, which is payable by the transferee of the shares. Any such
duty must be paid (and the relevant transfer document, if any, stamped by HMRC) before the transfer can be
registered in our books. However, if those shares are redeposited into DTC, the redeposit will attract stamp duty
or SDRT at the rate of 1.5% to be paid by the transferor.
We have put arrangements in place such that directly held ordinary shares cannot be transferred into the
DTC system until the transferor of the ordinary shares has first delivered the ordinary shares to a depositary
specified by us so that SDRT may be collected in connection with the initial delivery to the depositary. Any such
ordinary shares will be evidenced by a receipt issued by the depositary. Before the transfer can be registered in
our books, the transferor will also be required to put the depositary in funds to settle the resultant liability to
SDRT, which will be charged at a rate of 1.5% of the value of the shares.
Our articles of association provide that the courts of England and Wales have exclusive jurisdiction to
determine any dispute brought by a shareholder in that shareholder’s capacity as such and certain other
matters.
Our articles of association provide that the courts of England and Wales have exclusive jurisdiction to
determine any dispute brought by a shareholder in that shareholder’s capacity as such, or related to or connected
with any derivative claim in respect of a cause of action vested in us or seeking relief on our behalf, against us
and/or the board and/or any of the directors, former directors, officers, employees or shareholders individually,
arising out of or in connection with our articles of association or (to the maximum extent permitted by applicable
law) otherwise. This choice of forum provision may limit a shareholder’s ability to bring a claim in a judicial
forum that the shareholder believes is favorable for disputes with us or our directors, former directors, officers,
employees or shareholders which may discourage lawsuits against us and our directors, former directors, officers,
employees or shareholders.
There may be difficulty in effecting service of legal process and enforcing judgments against us and our
directors and management.
We are incorporated under the laws of England and Wales and a substantial portion of our assets are located
outside of the U.S. The U.S. and the U.K. do not currently have a treaty providing for the recognition and
enforcement of judgments, other than arbitration awards, in civil and commercial matters. The enforceability of
any judgment of a U.S. federal or state court in the U.K. will depend on the laws and any treaties in effect at the
time, including conflicts of laws principles (such as those bearing on the question of whether a U.K. court would
recognize the basis on which a U.S. court had purported to exercise jurisdiction over a defendant). In this
context, there is doubt as to the enforceability in the U.K. of civil liabilities based solely on the federal securities
laws of the U.S. In addition, awards for punitive damages in actions brought in the U.S. or elsewhere may be
unenforceable in the U.K.. An award for monetary damages under U.S. securities laws would likely be
considered punitive if it did not seek to compensate the claimant for loss or damage suffered and was intended to
punish the defendant.
Item 1B. Unresolved Staff Comments
None.
28
Item 2.
Properties
Below are our primary offices and facilities at December 31, 2022. We believe our properties are in good
operating condition, and are well maintained. Pursuant to separate financing agreements, substantially all our
material U.S., European and Australian properties are pledged or encumbered to support or otherwise provide
security for our indebtedness.
Our primary office locations consisted of the following:
Location
Owned/Leased
Offices
Stamford, Connecticut
Stallingborough, United Kingdom
Oklahoma City, Oklahoma
Leased
Owned
Owned
263 Tresser Boulevard, Suite 1100
Laporte Road
3301 NW 150 Street
Overview of Our Vertical Integration
Tronox is the world’s leading vertically integrated manufacturer of TiO2 pigment. We produce the majority
of our internal TiO2 pigment feedstock requirements internally at our mine and mineral processing facilities. Our
supply chain consists of mining operations in South Africa and Australia, separation and upgrading facilities
located near our mines where we separate and process raw ore and then ‘‘upgrade’’ the titanium content of the
raw ore to produce specialized chloride TiO2 feedstock materials (titanium slag and synthetic rutile) and nine
TiO2 pigment production facilities located on six continents. The internal TiO2 feedstocks we produce include
titanium slag, synthetic rutile, natural rutile, leucoxene, chloride ilmenite and sulfate ilmenite.
As part of our TiO2 value chain, we explore, acquire, mine and process heavy mineral sands to produce
Heavy Mineral Concentrate (‘‘HMC’’) from which the Valuable Heavy Mineral (VHM) titanium and zircon
products are made. HMC is produced from heavy mineral sands primarily through spiral gravity concentration at
our mines. Mined material is transported to our nearby integrated mineral separation plants (MSP) to separate
and concentrate VHMs by gravity, magnetic and electrostatic techniques. Multiple grades of titanium minerals
and zircon may be produced from each MSP. The three titanium feedstocks which result from the MSP process
(natural rutile, leucoxene and ilmenite) are each handled differently. Natural rutile and leucoxene are ordinarily
shipped from the MSP to one of our TiO2 pigment production facilities. Depending on the TiO2 content of mined
ilmenite, we either use it directly to produce TiO2 pigment or we upgrade it to produce titanium slag at our two
South African smelter operations and synthetic rutile (SR) at our Chandala metallurgical complex in Western
Australia. Our internally sourced titanium mineral products provide a secure, long-term low-cost supply of
high-grade feedstock for our TiO2 pigment manufacturing facilities.
There is a high degree of substitutability among natural rutile, synthetic rutile, titanium slag, leucoxene and
chloride ilmenite as titanium feedstocks for chloride pigment production. The commercial value of titanium
feedstock is a function not only of TiO2 content and supply and demand balances, but also particle size, trace
element geochemistry, logistics and other factors. The global TiO2 industry is a value-added supply chain, with
final product prices for TiO2 pigment, typically significantly higher than that of chloride or sulfate ilmenite, the
backbone of the global titanium mineral supply. The revenue assumptions for titanium feedstocks we applied to
determine our reserve estimates, as described below, are based on market intelligence gathered from internal and
external experts, sales contracts and historic pricing. The economic assessment is done on a minerals only basis
and no value of downstream upgrading is attributed to the minerals units.
In 2022, we produced concentrates of ilmenite, rutile, leucoxene, and zircon from five operations:
— Namakwa Sands, Western Cape, South Africa;
— KwaZulu-Natal (‘‘KZN’’) Sands, KwaZulu-Natal, South Africa;
— Northern Operations, Western Australia;
— Southern Operations, Western Australia; and
— Eastern Operations, Murray Basin, New South Wales, Australia.
29
Ilmenite from our Namakwa and KZN Sands mines in South Africa is converted to titanium slag at our
smelters at Saldanha Bay, Western Cape and Empangeni, KwaZulu-Natal, respectively. Ilmenite from our
Cooljarloo mine in Western Australia is converted to SR at our Chandala metallurgical complex which is most
commonly used as feedstock to our TiO2 pigment plants at Kwinana and Kemerton, both of which are south of
Perth in Western Australia.
Mining Operations
Tronox owns and operates six mining and mineral processing operations, each including one or more heavy
mineral sand (‘‘HMS’’) mines producing HMC which is separated into valuable co-products, primarily zircon,
and TiO2 feedstocks — ilmenite, natural rutile or leucoxene — in a dedicated mineral separation plant.
In South Africa, the Namakwa Sands operations include two open-pit mines at Brand-se-Baai, each with a
dedicated primary gravity concentration plant and a secondary concentration plant (SCP) that processes the HMC
from both primary plants. Products from the SCP are further processed to finished mineral products at a nearby
mineral separation plant (MSP) in Koekenaap. Ilmenite product is further processed into titanium slag and pig
iron at a two-furnace smelter at Saldanha, Western Cape, South Africa which is two hundred kilometers south of
Koekenaap. The KZN operations have an open pit hydraulic mine at Fairbreeze with a primary gravity
concentration plant, a mineral separation plant at nearby Empangeni alongside a two-furnace smelter complex,
and export facilities at the port of Richards Bay.
In Australia, the Northern Operations consist of the Cooljarloo dredge mine and floating primary gravity
concentration plant, and the Chandala metallurgical complex, consisting of a mineral separation plant and SR
plant. The Southern Operations consist of a dry open pit mine and primary concentration at Wonnerup and a
mineral separation plant at Bunbury.
The Eastern Operations in the Murray Basin of Australia includes one operating dredge mine at Ginkgo
which is supplemented by a dry open pit mine at Crayfish, a dry open pit mine at Atlas Campaspe and a mineral
separation plant at Broken Hill, NSW. The Snapper mine ceased production in April 2022 after 12 years of
production. The Gingko and Crayfish mines are expected to be mined until early 2024. During 2022,
commissioning of the Atlas Campaspe mine continued and we expect will ramp up to full production in early
2023. The Atlas Campaspe mine is abundant in natural rutile and high value zircon and will be a significant
source of high-grade ilmenite suitable for direct use or upgraded feedstock production.
Botlek
the Netherlands
90 kMT
Stallingborough
UK
R&D
165 kMT
Stamford
USA
Thann
France
R&D
32 kMT
Hamilton
USA
225 kMT
Paraíba
Brazil
Salvador, Bahia
Brazil
60 kMT
Yanbu
Saudi Arabia
200 kMT
Jeddah
Saudi Arabia
Fuzhou
China
46 kMT
Hyderabad
India
Seoul
Korea
Shanghai
China
Singapore
Singapore City
São Paulo
Brazil
Namakwa
South Africa
KZN Sands
South Africa
Centurion
South Africa
Cooljarloo
Australia
Chandala
Australia
Broken Hill
Australia
Ginkgo/Snapper
Australia
Atlast/Campaspe
Australia
Kwinana
Australia
150 kMT
Wonnerup/Northshore
Australia
Australind/Kemerton
Australia
110 kMT
Oklahoma City
USA
R&D
Tronox Corporate
Chloride Pigment
Sulfate Pigment
Mineral Sands
Operational Offices
Figure 1 Showing global site and offices including locations with resources and reserves.
30
Pigment Operations
Our pigment production facilities utilize the titanium mineral feedstock from our mining and processing
operations to produce TiO2 pigment products. The following table lists our TiO2 pigment production facilities
and capacity (in metric tonnes per year), by location:
Facility
Hamilton, Mississippi, USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yanbu, Saudi Arabia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Stallingborough, England, United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kwinana, Western Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Kemerton, Western Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Botlek, the Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Salvador, Bahia, Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fuzhou, Jiangxi Province, China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thann, Alsace, France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Production
TiO2
TiO2
TiO2
TiO2
TiO2
TiO2
TiO2
TiO2
TiO2
TiO2
Capacity
225,000
200,000
165,000
150,000
110,000
90,000
60,000
46,000
32,000
Process
Chloride
Chloride
Chloride
Chloride
Chloride
Chloride
Sulphate
Sulphate
Sulphate
Mineral Properties
Reporting of Reserves and Resources
U.S. registrants are required to report resources and reserves in accordance with the amendments finalized in
February 2019 to Item 102 of Regulation S-K(Subpart 1300). These amendments were intended to modernize the
disclosure requirements for properties owned or operated by mining companies to provide investors with a more
comprehensive understanding of a registrant’s mining properties.
Our mineral resource and reserve estimates are based on extensive geological resource models modified by
various mining and processing factors and assessed in a techno-economic model for commercial viability. This
constitutes a Life-of-Mine-Plan (LOMP) for each operation. Our LOMP and reserve estimates are optimized with
respect to anticipated revenues and costs. Assumptions are developed from our extensive experience and include
mining parameters, processing recoveries, operating costs, foreign exchange, and rehabilitation. Each of our
operations reconcile predicted mining and processing metrics with actual production and recovery data on a
monthly basis. Our models are updated as necessary and used to determine ore boundaries based on economic
assumptions. To satisfy the disclosure rules the nominal cut-off grades used to define resources are, generally:
0.3% zircon at Namakwa Sands; 1.5% ilmenite at KZN Sands; 1.0% Total Heavy Minerals (‘‘THM’’) at our
Northern Operations, Western Australia, 3% THM at our Southern Operations, Western Australia, and 1% THM
at our Eastern Operations, Murray Basin, Australia. Actual cut-off grades applied in estimates can vary according
to numerous factors, such as mining method, overburden: ore ratios, and heavy mineral (‘‘HM’’) assemblage
quality. For reserves where there is substantial asset investment post the minerals production stage, parameters
that best utilize the whole value chain may take precedence over maximizing value from the minerals business
unit, therefore impacting the optimal mining shell and effective cut-off grade.
Not all HMS deposits are alike. Our reserves, as set forth in the table below, have a higher confidence level
because we have undertaken sufficient drilling density and validation. Resources present unconfirmed continuity
and variability in grade, HM assemblage, or other characteristics, as well as the indeterminate impact of
modifying factors, and hence are not classified as reserves.
Within the broad category of resources, inferred resources have a lower level of geological confidence than
do indicated resources with measured resources being the highest confidence level from a geological perspective.
Only indicated resources and measured resources can be converted to reserves with proven reserves having a
higher level of economically exploitable confidence than probable reserves. The summary table of our reserves
below have been determined to be economically- exploitable by individuals competent and qualified to act under
the new disclosure requirements as ‘‘Qualified Persons’’.
Mining and Mineral Tenure
S-K Subpart 1300 requires us to describe our rights to access and mine the minerals we report as reserves
and to disclose any change in mineral tenure of material significance. Our heavy mineral exploration and mining
activities in South Africa and Australia are regulated by the South African Department of Mineral Resources, the
31
Western Australia Department of Mines, Industry Regulation and Safety and the New South Wales Department of
Planning, Industry and Environment. All exploration and mining activities are subject to multiple levels of
environmental regulatory review, including approvals of environmental plans and public comment periods as
pre-conditions to granting of mineral tenure.
Mineral Tenure - South Africa
Our two South African mineral sand mining processing chains are operated by Namakwa Sands and KZN
Sands, both indirect, wholly-owned subsidiaries of Tronox Holdings plc. The South African Department of
Mineral Resources and Energy (‘‘DMRE’’) is the regulatory administrator of mineral rights in South Africa,
subject to the provisions of the Mineral and Petroleum Resources Development Act (‘‘MPRDA’’), No. 28 of
2004, as amended in 2016. The MPRDA vests all mineral rights in South Africa in the national government and
establishes conditions for the acquisition and maintenance of prospecting and mining rights. Prospecting rights
and mining rights may only be granted by the DMRE. Prospecting rights are granted for a maximum period of
five years and can be renewed once for an extension of up to three years. Prospecting rights may be revoked for
non-compliance with the terms of the prospecting right.
Mining right applications require additional approvals by the Department of Environmental Affairs (‘‘DEA’’)
of an Environmental Management Program (‘‘EMP’’) and an Integrated Water and Land Use License.
Mining rights are valid for up to 30 years and may be extended by 30-year renewals, subject to compliance
with conditions established in the EMP and by the MPRDA. Environmental permitting and compliance are
co-administered by the regional offices of DEA and Development Planning. All rights, licenses and permits for
Namakwa Sands and KZN Sands are in good standing.
On the Western Cape of South Africa, Tronox holds mining rights over an area of 19,205 hectares
(47,457 acres) and surface rights totaling 17,111 hectares (43,542 acres) at the active mining site near
Brand-se-Baai, commonly referred to as our Namakwa Sands operation. On the Eastern coast of South Africa,
Tronox controls mining and prospecting rights covering approximately 4,041 hectares (9,986 acres) at KZN,
where surface access rights are either owned directly by KZN Sands or secured by agreements with Mondi Ltd.
A further 4,790 hectares (11,836 acres) of prospecting rights are held by a direct, wholly-owned subsidiary of
KZN Sands at the nearby Port Durnford and Waterloo project areas which we are currently in the process of
converting into a mining right.
Mineral Tenure - Australia
Our Australian mineral properties are divided into the Northern and Southern Operations on the Swan
Coastal Plain of Western Australia and the Eastern Operations in the Murray Basin of New South Wales and
Victoria. Mining tenements in Australia are managed at the State or Territorial level. In Western Australia,
Mining Leases, Exploration Licenses and Retention Licenses are granted and administered by the Western
Australian Department of Mines, Industry Regulation and Safety, and in New South Wales by the NSW
Department of Planning, Industry and Environment, under the authority of the Western Australian Mining
Act 1978 and the New South Wales Mining Act 1992, respectively. Principal environmental authorities are the
Western Australian Department of Water and Environmental Regulation and the NSW Environment Protection
Authority.
At the Northern Operations in Western Australia, Tronox controls mining leases, exploration and other
licenses and rights covering a total 50,838 hectares (125,623 acres). Mining and Public Environmental Review
plans are approved for the Cooljarloo mine and approval to extend the environmental plans for Dongara were
recently approved. Environmental Protection Agency approval of Cooljarloo West has also been approved. The
main Cooljarloo deposit covers 9,744 hectares (24,078 acres). We hold 14 mining leases at the Dongara project.
Three older mining leases are held at our Jurien property, the site of a former heavy minerals open pit mine
operated by another party in the 1970’s.
Tronox holds mining and exploration licenses totaling 533,500 hectares (1,318,307 acres) in the South Perth
Basin and Murray Basin heavy mineral provinces of Australia.
The Southern Operations in the southwest of Western Australia comprises 29 mining leases, 3 exploration
licenses, 3 retention licenses, 2 general purpose leases and 2 miscellaneous licenses totaling 9,100 hectares.
32
Tronox holds 5 mining leases, 16 exploration licenses and 2 retention licenses in our Eastern Operations in
the Murray Basin of New South Wales, Victoria and South Australia. The tenements cover approximately
524,400 hectares (2,025 sq miles). Three mining leases west of Pooncarie, NSW cover approximately
6,720 hectares (16,605 acres) surrounding our active mines at Ginkgo, Crayfish and rehabilitation site at Snapper.
One mining lease of 2,330 hectares is at the Atlas Campaspe mining project in NSW.
Mineral Sands - South Africa and Australia
HMS deposits are natural concentrations of granular minerals of high density (conventionally above about
2.85 gm/cm3). Titanium-rich HMS deposit source rocks are typically granitic and/or high-grade metamorphic
crystalline rocks. The heavy mineral assemblage of a particular HMS deposit generally reflects the ilmenite,
leucoxene, natural rutile and zircon contained in local and regional source rocks. Factors that influence the
formation of HMS deposits include erosion of crystalline source rocks, fluvial transport to the coastline,
longshore drift, coastal geomorphology, deposition of heavy minerals, and prolonged natural sorting of heavy
minerals by water and wind, according to the density, size and shape of HM grains. Post-depositional geological
processes that can affect the economic viability of a HMS deposit include in situ weathering, induration of the
host sands, and natural preservation or destruction of the HMS deposit.
Not all heavy minerals have commercial value, and a distinction is made between the Total Heavy Minerals
(‘‘THM’’) and Valuable Heavy Minerals (‘‘VHM’’). Typical VHM assemblages include the titanium-iron oxide
mineral, ilmenite (FeTiO3); rutile, a premium TiO2 feedstock mineral; leucoxene, a natural alteration product of
weathered ilmenite; and zircon, a zirconium silicate (ZrSiO4) valuable for its use in a diverse range of industrial
and construction applications. Other HM of commercial value, such as garnet, staurolite, kyanite and monazite,
may be recovered as by-products.
Of interest recently is the potential use of monazite, both in contained ore bodies and in stockpiled sources
located near the mineral separation processes at Namakwa Sands. Monazite has increasing commercial value due
to a high concentration of rare earth metals which can be separated by well-established methods. Rare earths are
expected to remain in high demand as demand grows for electric vehicles, wind turbines, and consumer goods
that require rare earth-containing permanent magnets. We currently do not know the metallurgical recovery
potential for the monazite as our processes have historically focused on traditional value minerals. Given the
increasing importance of monazite, we are evaluating new processes to better understand the grade and
recoverability of monazite in our mining tenements.
TRONOX MINERAL SAND - 2022 AGGREGATE MINERAL PRODUCTION
FOR THE PAST THREE YEARS
(metric tonnes per year)
Product
Rutile(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ilmenite(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Zircon(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022
2021
2020
159,124
1,156,099
199,733
141,594
1,190,981
219,825
168,258
1,188,051
245,471
(1)
(2)
(3)
includes natural rutile + leucoxene
includes multiple grades of TiO2 grades of ilmenite
includes multiple grades of zircon
Namakwa Sands, Western Cape, South Africa
Our heavy mineral sand operations in South Africa include similar material flows from integrated
mine-mineral separation- smelter value chains on the west and east coasts of South Africa. Both Namakwa,
Western Cape and KZN Sands, KwaZulu-Natal produce smelter products of titanium slag and pig iron from
ilmenite, plus commercial grades of zircon and high-grade rutile + leucoxene concentrates.
Ore is excavated from two open-pit dry mines and delivered by trucks and conveyors to two primary wet
concentration plants. Heavy Mineral Concentrate is separated into magnetic and non-magnetic fractions at a
secondary concentration plant at the mine. The two fractions are further processed at a mineral separation plant
33
52 km south at Koekenaap. Ilmenite, rutile and zircon are transported by rail from Koekenaap to Saldanha Bay,
where ilmenite is smelted in a two-furnace complex into titanium slag and pig iron. Chloride-grade slag, slag
fines, pig iron, rutile and zircon are exported from our dedicated facilities at the Saldanha Bay deep-water port,
approximately 150 km north of Cape Town.
The Namakwa Sands HM deposit occupies an ellipsoidal area of 15 kilometers northeasterly by 4 km wide
and is interpreted to be an ancient dune complex shaped by prevailing winds at the time of its formation.
Repetitive cycles of erosion from crystalline source rock, fluvial transport and prolonged reworking by water and
wind formed the deposit. The Namakwa Sands heavy mineral assemblage is heterogeneous, creating challenges
to efficient recovery of valuable heavy minerals.
KZN Sands, KwaZulu-Natal, South Africa
KZN Sands operates the open-cut Fairbreeze mine, just south of the coastal town of Mtunzini, the Central
Processing Complex, 30 km west of Richards Bay, and bulk export facilities at the port of Richards Bay.
The Fairbreeze deposit is hosted by deeply weathered ‘‘Berea-type’’ sands which are mined using a
hydraulic mining technique supported by track dozing. The hydraulic mining technique was pioneered for HMS
mining at our nearby Hillendale mine, where rehabilitation is now complete. High-pressure water jets
disaggregate the fine-grained sand into a slurry that flows by gravity to a central collection caisson and is
pumped to a primary wet plant to produce HMC. This HMC is hauled by truck 45 km to the Empangeni CPC
for separation into commercial zircon and rutile concentrates, and ilmenite feed for the adjacent two- furnace
smelter. Except for local consumption of some pig iron, all saleable products are exported from Richards Bay,
including high-grade titanium feedstocks for our TiO2 pigment plants.
The Fairbreeze deposit is hosted by a complex of strandline/paleo-dune couplets, approximately two
kilometers inland from the modern coastline, forming an elongate ridge extending 12 km south-southwesterly
from the town of Mtunzini with a maximum width of approximately two kilometers. No overburden is present.
Modern erosion has dissected the deposit into five discrete ore bodies As with all heavy mineral sand deposits,
iron-titanium oxides, rutile, zircon and other minerals in the HM assemblage at Fairbreeze are inherited from
their source rock provenance and modified by selective sorting during deposition. Probable source rocks for the
HM are the Natal Metamorphic Province and younger rift-related basalts.
Northern Operations, Western Australia
Our mineral properties of the coastal plain of Western Australia are located within two historically important
heavy mineral provinces. Our combined Cooljarloo dredge mine and planned Cooljarloo West dredge mine,
170 km north of Perth, contain proven and probable reserves shown in the tables below.
Two dredges in a single pond feed an ore slurry to a floating gravity concentrator to produce HMC, which
is hauled by trucks 110 km south to our Chandala metallurgical complex near Muchea, 60 km north of Perth, for
the recovery of ilmenite, rutile, leucoxene and zircon. Ilmenite is upgraded at Chandala to SR, a high-TiO2
feedstock for our Kwinana and other TiO2 pigment plants
The mining of low-grade ore at Cooljarloo is supported by economies of scale, low-cost dredging, a
high-quality VHM suite that constitutes nearly 80% of THM, and good processing characteristics of the ilmenite
in its conversion to SR. Upon exhaustion of Cooljarloo ore, the dredge mine will relocate to nearby Cooljarloo
West, where reserves from three-ore bodies contain an estimated 2.6 million tonnes of in-place heavy minerals.
At Dongara, multiple studies, drilling, and dry-mining optimization over the past 15 years identified reserves
of 68 million tonnes of ore at an average grade of 5.1% THM in five deposits, for which mining and
environmental approvals have been secured. Tronox has chosen not to upgrade the studies to a current feasibility
level and consequently has reported only resources for the Dongara project.
Heavy mineral deposits of our Northern Operations generally occur as stacked, elongate, NNW-trending
bodies parallel to the modern coastline, bounded to the east by the Gingin Scarp. A swarm of HM deposits in the
Cooljarloo district span an area of 40 km NNW by a width of over 5 km. Heavy minerals derived from the
crystalline ‘‘basement’’ of the Yilgarn craton east of the scarp and Mesozoic sediments of the North Perth Basin
west of the scarp are associated with marine still-stands on a wave-cut platform, as HM sands accumulated in
shoreline, dunal and other coastal environments of a westward-regressing seacoast.
34
Southern Operations, Western Australia
We extract heavy minerals from the Wonnerup North open-cut HMS mine, 10 km east of Busselton, from
which HMC is trucked to our MSP at Bunbury, adjacent to the Bunbury port. The Bunbury MSP also processes
streams of non-magnetic zircon and rutile rich HM concentrates from our Broken Hill MSP in New South Wales.
Ilmenite-dominant heavy mineral deposits of the South Perth Basin occur as multiple, arcuate bands, parallel
to the J-shaped Geographe Bay modern shoreline.
The Wonnerup North deposit is a shallow (~3m deep) windblown dunal deposit on the Capel
paleo-shoreline, one of two strandlines, along with the Yoganup paleo shoreline, located 7 km and 15 km inland,
respectively, from the modern Indian Ocean coast associated with most of the economic HMS deposits of the
region.
Eastern Operations, Murray Basin, New South Wales, Australia
Our Eastern Operations are located in the Murray Basin, a 300,000-square-kilometer intra-cratonic
sedimentary basin covering parts of Victoria, New South Wales, and South Australia. Our operating mines at
Ginkgo and Crayfish are approximately 40 km west of Pooncarie, New South Wales. Overburden at our Ginkgo
and Crayfish mines is removed by conventional mining methods, followed by dredge mining of ore. Dry mining
at Crayfish, a small deposit adjacent to Ginkgo, started in September 2019, from which ore is hauled to the
Ginkgo dredge pond. Mining at Snapper was completed in April 2022 following 12 years of continuous
production The Snapper site is currently undergoing mine closure and rehabilitation.
HMC from Ginkgo-Crayfish is hauled by trucks approximately 240 km to our MSP in Broken Hill, NSW.
At current production rates, mining is expected to continue at Ginkgo and Crayfish until early 2024.
Construction at our two new open-cut dry mines at Atlas/Campaspe, 150km east of the current operations
and 90 km north of Balranald, NSW and approximately 270 km southeast of Broken Hill was completed in early
2023. Starting with Atlas, which is expected to ramp up to full production by the third quarter of 2023, the new
production will replace the production from the Snapper, Ginkgo and Crayfish mines. HMC produced on-site at
Atlas and Campaspe by wet gravity separation will be delivered to the Broken Hill MSP via a combination of
road and rail transport. Active exploration programs are ongoing in the Murray Basin heavy minerals province,
where our exploration licenses cover nearly 5,100 square kilometers.
The Broken Hill MSP utilizes magnetic separation techniques to produce commercial concentrates of
ilmenite and leucoxene, and a non-magnetic HM concentrate. The products are either railed approximately
430 km to the port of Adelaide, South Australia or railed directly from Broken Hill to Western Australia using
the Trans Australian Railway. The non-magnetic concentrates are then shipped to the Bunbury MSP for further
processing into final products.
Further description of each of our mining projects described above are included in our exhibit filings.
Heavy Mineral Reserves
All of our reserves are reported on the basis of our 100% ownership of in-place, economically extractable
ore, determined from comprehensive geological, mining, processing and economic models. Reserve
classifications of proven or probable are based on the level of confidence in the appropriate resource estimates.
Our residual resources are those areas of mineralized ground which have either had insufficient drilling to
confidently define the shape, grade and recoverability of the valuable minerals as well as not yet having been
subjected to a detailed assessment of the impact of validated ‘‘modifying factors’’ on the revenue generating
potential of a deposit.
For clarity, in the tables below, our reserves have been excised from the resources as they can be proven to
be profitably mined and processed. The remaining deposit that exceeds cut-off grade, but have not yet been
demonstrated to be profitable by virtue of either recoverable grade, operating cost or capital required to develop,
are separately defined as resources.
35
The following tables summarize our reserves and resources as well as their contained in situ THM and HM
assemblages as of December 31, 2022.
TRONOX MINERAL SANDS - 2022 RESERVES
MINE / DEPOSIT
Namakwa Sands Dry Mine -
Western Cape RSA. . . . . . . . .
KZN Sands Hydraulic Mine
KwaZulu-Natal RSA . . . . . . .
Cooljarloo – Dredge Mine -
Western Australia . . . . . . . . . .
Atlas-Campaspe Dry Mine -
New South Wales Australia . .
Wonnerup Dry Mine -
Western Australia . . . . . . . . . .
Ginkgo-Crayfish Dredge/Dry
Mines - New South
Wales Australia. . . . . . . . . . . .
Total Reserves . . . . . . . . . . . . . .
Reserve
Category
Material
(million
tonnes)
HM% Ilmenite
Rutile and
Leucoxene
Zircon
Change
(+/-) from
2021 (%)(1)
Mineral Assemblage (% of THM)
Proven
Probable
Total Reserves
Proven
Probable
Total Reserves
Proven
Probable
Total Reserves
Proven
Probable
Total Reserves
Proven
Probable
Total Reserves
Proven
Probable
Total Reserves
136
551
687
198
11
209
210
130
340
110
—
110
9
4
13
26
—
26
7.4% 37.6
5.4% 53.8
5.8% 49.7
5.6% 61.7
3.7% 51.8
5.5% 61.3
1.6% 61.5
2.0% 60.5
1.8% 61.1
6.3% 60.7
—
—%
6.3% 60.7
5.3% 70.1
5.7% 77.5
5.4% 72.6
1.9% 51.5
—
—
1.9% 51.5
Proven
Probable
689
696
4.7% 54.0
4.7% 54.4
Total Reserves
1,385
4.7% 54.2
8.7
11.2
10.6
7.4
5.0
7.3
7.7
8.3
8.0
11.8
—
11.8
19.1
11.4
16.5
16.3
—
16.3
9.1
10.9
10.0
9.0
11.4
10.8
7.6
7.0
7.6
10.7
12.3
11.4
12.5
—
12.5
9.6
8.8
9.4
12.7
—
12.7
9.5
11.4
10.5
(2.3)
(4.1)
(5.8)
2.6
(15.0)
(28.8)
(3.9)
(1)
Changes are predominantly due to depletion as a result of mining offset by an increase related to our Atlas Campaspe mine and other
reclassifications.
36
TRONOX MINERAL SANDS - 2022 RESOURCES
MINE / DEPOSIT
Namakwa Sands Dry Mine -
Western Cape RSA. . . . . . . . .
KZN Sands Hydraulic Mine -
KwaZulu-Natal RSA . . . . . . .
Cooljarloo – Dredge Mine -
Western Australia . . . . . . . . . .
Dongara Planned Dry Mine -
Western Australia . . . . . . . . . .
Atlas-Campaspe Dry Mine -
New South Wales Australia . .
Port Durnford - KwaZulu-Natal
RSA. . . . . . . . . . . . . . . . . . . . .
Reserve
Category
Material
(million
tonnes) HM% Ilmenite
Rutile and
Leucoxene
Zircon
Change
(+/-) from
2021 (%)(1)
Mineral Assemblage (% of THM
Measured
Indicated
Measured + Indicated
Inferred
Total
Measured
Indicated
Measured + Indicated
Inferred
104
86
190
110
300
48
1
49
56
8.0% 30.2
6.5% 28.3
7.3% 29.3
5.5% 35.1
6.7% 31.4
4.2% 64.3
2.0% 53.5
4.1% 64.1
3.4% 54.6
Total
105
3.7% 59.1
Measured
Indicated
Measured + Indicated
Inferred
Total
Measured
Indicated
Measured + Indicated
Inferred
Total
Measured
Indicated
Measured + Indicated
Inferred
10
282
292
12
304
109
31
140
46
186
27
—
27
83
1.6% 59.3
1.5% 61.4
1.5% 61.3
2.9% 58.0
1.6% 61.1
4.1% 50.2
3.5% 53.7
3.9% 52.0
3.7% 56.1
3.9% 52.1
2.5% 58.8
—% —
2.5% 58.8
3.1% 60.1
Total
110
3.0% 59.8
Measured
Indicated
Measured + Indicated
Inferred
Total
143
340
483
466
949
4.5% 67.6
4.1% 67.4
4.2% 67.5
3.5% 71.8
3.9% 69.4
37
5.9
5.6
5.8
8.1
6.6
8.1
7.0
8.1
6.9
7.4
7.7
6.7
6.8
7.3
6.8
9.0
9.1
9.1
8.9
9.0
10.9
—
10.9
5.8
6.9
6.0
6.1
6.1
6.3
6.2
6.9
6.9
6.9
6.6
6.7
7.7
7.5
7.6
7.1
7.3
9.8
10.5
10.4
9.0
10.4
10.8
12.4
11.6
9.2
10.7
11.7
—
11.7
13.1
12.8
9.3
9.3
9.3
10.0
9.6
(1.9)
(2.0)
3.9
4.2
(3.2)
0.0
MINE / DEPOSIT
Wonnerup Dry Mine - Western
Australia . . . . . . . . . . . . . . . . .
Ginkgo-Crayfish Dredge/ Dry
Mines - New South Wales
Australia . . . . . . . . . . . . . . . . .
Kara/Cylinder - New South
Wales Australia. . . . . . . . . . . .
Total Resources . . . . . . . . . . . . .
Reserve
Category
Material
(million
tonnes) HM% Ilmenite
Rutile and
Leucoxene
Zircon
Change
(+/-) from
2021 (%)(1)
Mineral Assemblage (% of THM
Measured
Indicated
Measured + Indicated
Inferred
Total
13
6
19
3
22
4.6% 77.5
4.8% 86.9
4.6% 80.5
4.4% 84.0
4.6% 81.0
Measured
Indicated
Measured + Indicated
Inferred
Total
1.3% 47.9
78
— —% —
78
59
1.3% 47.9
1.1% 47.9
137
1.2% 47.9
Measured
Indicated
— —% —
4.4% 49.4
165
Measured + Indicated
Inferred
Total
Measured
Indicated
Measured + Indicated
Inferred
Total
165
26
191
532
911
1,443
861
2,304
4.4% 49.4
2.8% 54.4
4.1% 49.8
4.4% 49.9
3.6% 55.6
3.9% 53.2
3.5% 60.6
3.8% 55.8
12.0
3.3
9.2
4.0
8.5
18.2
—
18.2
17.9
18.1
—
12.9
12.9
24.4
13.9
7.5
7.7
7.6
7.5
7.6
8.8
7.6
8.4
8.3
8.4
12.4
—
12.4
13.0
12.6
—
12.0
12.0
14.2
12.2
8.8
9.7
9.3
9.5
9.4
(6.4)
(1.0)
(4.7)
(0.2)
(1)
Changes are predominantly due to depletion as a result of mining offset by increases at Cooljarloo and Dongara due to re- estimation.
Abbreviations, Definitions, and Notations
One metric tonne = 1.10231 short tons
Reserves — mineralized material inclusive of dilution, determined to be economically and legally exploitable as
of December 31, 2022, classified as either Probable Reserves or Proven Reserves, based on level of confidence.
Resources — mineralized ground which has either had insufficient drilling to confidently define the shape, grade
and recoverability of the valuable minerals as well as not yet having been subjected to a detailed assessment of
the impact of validated modifying factors on the revenue generating potential of a deposit.
LOMP — Life-of-Mine-Plans (LOMPs) have been developed for each mine site by teams of Tronox
professionals based on the mineral reserves and resources, realistic assumptions of geological, mining,
metallurgical, economic, marketing, legal, environmental, social, governmental, engineering, operational and all
other modifying factors in sufficient detail to demonstrate at the time of reporting that extraction is reasonably
justified.
THM — total heavy minerals, densities >2.85 g/cm3 regardless of commercial value.
38
VHM — valuable heavy minerals, including Ilmenite, Rutile, Leucoxene & zircon, reported as percentage of THM.
Minor computational discrepancies may be due to rounding.
Cooljarloo Dredge Mine reserves include Cooljarloo and Cooljarloo West
Key Assumptions — economic viability is determined by techno-economic modeling that integrates geological,
analytical and geotechnical databases, mining parameters, metallurgical recoveries, known or forecast operating
costs, cost of capital, and product sales prices at time of production. Historical sales prices by themselves are
unreliable predictors of future prices, and our forecasts are based on our private contracts, internal and external
market research.
Disclosures of mineral reserves traditionally include a cut-off grade, the grade in a mineral deposit below
which material cannot be profitably mined and processed. However, economic exploitability is determined by
many modifying factors other than grade, and most modern mining operations, including ours, use detailed
computer models utilized by employees who possess the experience and technical expertise to identify what parts
of a deposit are economically exploitable. As cut-off grades remain entrenched in the mining industry, the
following nominal cut-off grades apply, with qualifications, to our five operations: 0.3% zircon at Namakwa
Sands; 1.5% ilmenite at KZN Sands; 1.3% THM (approximately 1% VHM) at our Northern Operations, WA,
3% THM at our Southern Operations, WA, and 1% THM at our Eastern Operations, NSW.
Production forecasts of commercial-quality titanium mineral and zircon concentrates from reserves are taken
from our Life-of-Mine Plans. Mining recoveries are typically close to 100%, but metallurgical recoveries in each
concentration step can vary widely, as a function of ore and mineral characteristics. We apply recovery factors
based on actual operating data.
Mineral reserve estimates, life-of mine projections, and revenue assumptions are inherently forward-looking
and subject to market conditions, uncertainties, and unanticipated events beyond our control.
Item 3.
Legal Proceedings
Information required by this item is incorporated herein by reference to the section captioned ‘‘Notes to
Consolidated Financial Statements, Note 18 — Commitments and Contingencies’’ of this Form 10-K.
SEC regulations require us to disclose certain information about administrative or judicial proceedings to
which a governmental authority is party arising under federal, state or local environmental provisions if we
reasonably believe that such proceedings may result in monetary sanctions above a stated threshold. Pursuant to
the SEC regulations, the Company uses a threshold of $1 million or more for purposes of determining whether
disclosure of any such proceedings is required.
Item 4. Mine Safety Disclosures
None.
39
PART II
Item 5.
Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of
Equity Securities
Market for our Ordinary Shares
Our ordinary shares trade on the New York Stock Exchange under the symbol ‘‘TROX.’’
Holders of Record
As of January 31, 2023, there were approximately 56 holders of record of ordinary shares. This does not
include the shareholders that held shares of our ordinary shares in a nominee or ‘‘street-name’’ accounts through
banks or broker-dealers. See Item 12, Security Ownership of Certain Beneficial Owners and Management and
Related Shareholder Matters.
Issuer Purchases of Equity Securities
2022
Total
Number of
Shares
Purchased
Weighted
Average Price
Paid per
Share
October 1 - October 31 . . . . . . . . . . . . . . . . .
November 1 - November 30 . . . . . . . . . . . . .
December 1 - December 31 . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
—
$—
—
—
$—
Total
Number of
Shares
Purchased as
Part of
Publicly
Announced Plan(1)
—
—
—
—
Maximum
Approximate
Dollar
Value that
May Yet be
Purchased
Under the
Plan(1)
$250,536,235
250,536,235
250,536,235
$250,536,235
(1) On November 9, 2021, the Company announced that the Company’s Board of Directors has authorized the repurchase of up to
$300 million of the Company’s ordinary shares, par value $0.01 per share (the ‘‘ordinary shares’’), through February 2024. For details
on share repurchases made during the year ended December 31, 2022, see ‘‘Note 19’’ of notes to consolidated financial statements.
Under the authorization from our Board of Directors, we have approximately $251 million available for additional repurchases through
February 2024.
Stock Performance Graph
The following graph presents the five-year cumulative total stockholder returns for our ordinary shares compared
with the Standard & Poor’s (‘‘S&P’’) 500, the S&P MidCap 400 Chemicals and the S&P 400 Materials indices.
Total Stockholder Returns
$200.00
$150.00
$100.00
$50.00
$—
12/31/17
12/31/18
12/31/19
12/31/20
12/31/21
12/31/22
S&P 500
S&P Midcap 400 Chemicals
S&P 400 Materials
Tronox
40
The graph assumes that the values of our ordinary shares, the S&P 500, the S&P MidCap 400 Chemicals index,
and the S&P 400 Materials index were each $100 on December 31, 2017, and that all dividends were reinvested.
Item 6.
Selected Financial Data
Not applicable.
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with Tronox Holdings plc’s consolidated financial
statements and the related notes included elsewhere in this Annual Report on Form 10-K. This discussion and
other sections in this Annual Report on Form 10-K contain forward-looking statements, within the meaning of
the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties, and actual results
could differ materially from those discussed in the forward-looking statements as a result of numerous factors.
Forward-looking statements provide current expectations of future events based on certain assumptions and
include any statement that does not directly relate to any historical or current fact. Forward-looking statements
also can be identified by words such as ‘‘future,’’ ‘‘anticipates,’’ ‘‘believes,’’ ‘‘estimates,’’ ‘‘expects,’’ ‘‘intends,’’
‘‘plans,’’ ‘‘predicts,’’ ‘‘will,’’ ‘‘would,’’ ‘‘could,’’ ‘‘can,’’ ‘‘may,’’ and similar terms. There are important factors that
could cause our actual results, level of activity, performance or achievements to differ materially from the results,
level of activity, performance or achievements expressed or implied by the forward-looking statements. In
particular, you should consider the numerous risks and uncertainties outlined in Item 1A. ‘‘Risk Factors.’’
This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains
certain financial measures, in particular the presentation of earnings before interest, taxes, depreciation and
amortization (‘‘EBITDA’’) and Adjusted EBITDA, which are not presented in accordance with accounting
principles generally accepted in the United States (‘‘U.S. GAAP’’). We are presenting these non-U.S. GAAP
financial measures because we believe they provide us and readers of this Form 10-K with additional insight into
our operational performance relative to earlier periods and relative to our competitors. We do not intend for
these non-U.S. GAAP financial measures to be a substitute for any U.S. GAAP financial information. Readers of
these statements should use these non-U.S. GAAP financial measures only in conjunction with the comparable
U.S. GAAP financial measures. A reconciliation of net income (loss) to EBITDA and Adjusted EBITDA is also
provided herein.
Executive Overview
Tronox Holdings plc (referred to herein as ‘‘Tronox’’, ‘‘we’’, ‘‘us’’, or ‘‘our’’) operates titanium-bearing
mineral sand mines and beneficiation operations in Australia and South Africa 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. Our strategy is to be vertically integrated and
produce enough feedstock materials to be as self-sufficient as possible in the production of TiO2 at our 9 pigment
facilities located 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, pig
iron and the rare-earth bearing mineral, monazite, which we also supply to customers around the world.
We are a public limited company listed on the New York Stock Exchange and are registered under the laws of
England and Wales.
Business Environment
The following discussion includes trends and factors that may affect future operating results:
The first half of 2022 began with considerable momentum while the second half was characterized by a
significant market pullback starting in China, followed by the rest of Asia Pacific, EMEA and the Americas. As a
result of the swift market decline, fourth quarter revenue decreased 27% compared to the prior year, driven by
lower TiO2, zircon and pig iron sales volumes. For the fourth quarter of 2022 as compared to the fourth quarter
of 2021, TiO2 volumes decreased 34% partially offset by a 7% increase in average selling prices and an
unfavorable 2% impact from exchange rates. Zircon sales volumes decreased 44% partially offset by a 20%
41
increase in average selling prices. Revenue from other products decreased 12% from the fourth quarter 2021 to
the fourth quarter of 2022 primarily due to lower pig iron volumes. Gross profit decreased for the fourth quarter
of 2022 as compared to the fourth quarter of 2021 due to the unfavorable impact of sales volumes and product
mix as well as higher production costs, commodity costs and increased freight rates. These unfavorable impacts
were partially offset by an increase in average selling prices of TiO2, zircon and pig iron, favorable impacts of
foreign currency and favorable overhead absorption and cost savings.
Sequentially, revenue decreased 27% in the fourth quarter of 2022 compared to the third quarter of 2022
primarily as a result of volume declines of TiO2 and zircon. TiO2 volumes were impacted by continued global
economic uncertainty and inventory destocking across the supply chain that resulted in a 28% sequential decline from
the third quarter of 2022 to the fourth quarter of 2022. TiO2 average selling prices also declined 1% in the fourth
quarter of 2022 compared to the third quarter of 2022. Revenue from zircon sales decreased 29% sequentially from
the third quarter of 2022 to the fourth quarter of 2022, as a 30% decrease in sales volumes was partially offset by 1%
increase in average selling prices. Other products revenues decreased 15% sequentially from the third quarter of 2022
to the fourth quarter of 2022 mainly due to lower average selling prices and sales volumes of pig iron and other
products. Gross profit decreased sequentially from the third quarter of 2022 to the fourth quarter of 2022 due to lower
sales volumes of TiO2, zircon and pig iron as well as higher production costs due to inflationary cost pressures,
increased freight rates, the unfavorable impacts of average selling prices and costs associated with a fire at our mineral
separation facility in South Africa and the ongoing historic flooding in Australia impacting the Ginkgo and Atlas
Campaspe mining operations, partially offset by favorable exchange rates.
As of December 31, 2022, our total available liquidity was $608 million, including $164 million in cash and
cash equivalents and $444 million available under revolving credit agreements. As of December 31, 2022, our
total debt was $2.5 billion and net debt to trailing-twelve month Adjusted EBITDA was 2.8x. The Company also
has no financial covenants on its term loans or bonds and only one springing financial covenant on its Cash
Flow revolver facility, which we do not expect to be triggered based on our current scenario planning. Refer to
Note 13 of notes to consolidated financial statements for further details.
Consolidated Results of Operations
Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . .
Venator settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (expense) income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax (provision) benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effective tax rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EBITDA(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBITDA(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBITDA as % of Net Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended December 31,
2021
(Millions of U.S. Dollars)
$3,572
2,677
$ 895
2022
$3,454
2,622
$ 832
24.1%
25.1%
289
85
458
(125)
9
(21)
(13)
308
192
$ 500
318
—
577
(157)
7
(65)
12
374
(71)
$ 303
(62)%
19%
$ 693
$ 875
$ 821
$ 947
Variance
$(118)
(55)
$ (63)
(1.0) pts
(29)
85
(119)
32
2
44
(25)
(66)
263
$ 197
(81) pts
$(128)
$ (72)
25.3%
26.5%
(1.2) pts
(1)
EBITDA and Adjusted EBITDA are Non-U.S. GAAP financials measures. Please refer to the ‘‘Non-U.S. GAAP Financial Measures’’
section of this Management’s Discussion and Analysis of Financial Condition and Results of Operations for a discussion of these
measures and a reconciliation of these measures to Net income (loss) from continuing operations.
42
Net sales of $3,454 million for the year ended December 31, 2022 decreased by 3% compared to
$3,572 million for the same period in 2021. Revenue decreased primarily due to lower TiO2, zircon and pig iron
sales volumes. Net sales by type of product for the years ended December 31, 2022 and 2021 were as follows:
The table below presents reported revenue by product:
Year Ended
December 31,
(Millions of dollars, except percentages)
2022
2021
Variance
Percentage
TiO2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Zircon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,693
438
323
$2,793
478
301
Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,454
$3,572
$(100)
(40)
22
$(118)
(4)%
(8)%
7%
(3)%
For the year ended December 31, 2022, TiO2 revenue decreased $100 million, or 4%, compared to the prior
year due to a $404 million decrease in sales volumes partially offset by an increase of $391 million in average
selling prices. Foreign currency negatively impacted TiO2 revenue by $86 million due primarily to the weakening
of the Euro. Zircon revenues decreased $40 million primarily due to a 36% decrease in sales volumes partially
offset by a 28% increase in average selling prices. Other products revenue increased $22 million primarily due to
an increase in average selling prices of pig iron and other products partially offset by a decrease in sales volumes
of pig iron.
Gross profit of $832 million for the year ended December 31, 2022 was 24.1% of net sales compared to
25.1% of net sales for the same period in 2021. The decrease in gross margin is primarily due to:
•
•
•
the unfavorable impact of 17 points due to product mix and higher production and commodity costs
and increased freight rates which were offset by favorable overhead absorption and cost savings,
partially offset by
the favorable impact of approximately 13 points due to an increase in TiO2, zircon and pig iron selling
prices, and
the net favorable impact of approximately 3 points due to changes in foreign exchange rates. This is
primarily due to the South African Rand and Australian dollar given costs in these regions are primarily
incurred in local currencies while revenues are tied to the U.S. dollar whereas within our European
region both revenues and costs of goods sold are denominated in Euros and as such did not have a
significant impact to gross margin.
Selling, general and administrative (‘‘SG&A’’) expenses decreased $29 million when comparing the year
ended December 31, 2022 to the prior year. The SG&A expenses decrease was primarily driven by a $30 million
decrease in employee costs primarily due to lower incentive compensation and $3 million of lower professional
fees, partially offset by higher travel and entertainment expenses of $6 million. The remaining net decrease was
driven by individually immaterial amounts.
The outcome of the Venator settlement resulted in a $85 million payment to Venator which includes
$10 million of interest accrued since May 13, 2019 (refer to Note 18 in notes to consolidated financial statements
for further details).
Income from operations for the year ended December 31, 2022 of $458 million, decreased by $119 million
or 21% compared to the same period in 2021 which is primarily attributable to the Venator settlement of
$85 million (discussed above) and the lower gross margin partially offset by the lower selling, general and
administrative expenses.
Adjusted EBITDA as a percentage of net sales was 25.3% for the year ended December 31, 2022, a
decrease of 1.2 points from 26.5% in the prior year. The lower gross profit partially offset by the lower SG&A
expenses as discussed above were the primary drivers of the year-over-year decrease in Adjusted EBITDA
percentage.
Interest expense for the year ended December 31, 2022 decreased $32 million compared to the same period
in 2021. The decrease is primarily due to the lower average debt outstanding balances and lower average interest
43
rates on the 2022 Term Loan Facility as compared to the 6.5% Senior Secured Notes due 2025 given the
refinancing transaction in April 2022 (refer to Note 13 of notes to consolidated financial statements for further
details) and lower average debt outstanding balance on the Standard Bank Term Loan Facility.
Interest income for the year ended December 31, 2022 increased $2 million compared to the same period in
2021 primarily due to an overall increase in interest rates on our cash investments period over period.
Loss on extinguishment of debt of $21 million for the year ended December 31, 2022 is primarily
comprised of an $18 million call premium paid in relation to the redemption of the 6.5% Senior Secured Notes
and related write-off of certain debt issuance costs associated with the issuance of a new term loan which closed
in April 2022.
Other (expense) income, net for the year ended December 31, 2022 primarily consisted of an $20 million
pension settlement loss related to our U.S. Qualified Plan (refer to Note 21 in notes to consolidated financial
statements) and $3 million of net realized and unrealized foreign currency losses partially offset by the
$8 million associated with the monthly technical service fee relating to the Jazan slagger we receive from AMIC,
and $4 million of pension income primarily due to the expected return on plan assets offset by pension related
interest costs and amortization of actuarial gain/losses.
We maintain full valuation allowances related to the total net deferred tax assets in Switzerland and the
United Kingdom. The provisions for income taxes associated with these jurisdictions 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 other specific tax assets.
The effective tax rate was (62)% and 19% for the years ended December 31, 2022 and 2021, respectively.
The large negative effective tax rate for the year ended December 31, 2022 is significantly influenced by the
release of valuation allowances for deferred tax assets in Australia. The net impact is a $300 million benefit to
the income tax provision. Refer to Note 5 of notes to consolidated financial statements for further information.
Additionally, the effective tax rates for the years ended December 31, 2022 and 2021 are influenced by a variety
of factors, primarily income and losses in jurisdictions with valuation allowances, disallowable expenditures,
prior year accruals, and our jurisdictional mix of income at tax rates different than the U.K. statutory rate.
Year Ended December 31, 2021 Compared to the Year Ended December 31, 2020
A discussion of our results of operations for the year ended December 31, 2021 versus December 31, 2020
is included in Part II, Item 7, ‘‘Management’s Discussion and Analysis of Financial Condition and Results of
Operations - Results of Operation’’, included in our Annual Report on Form 10-K for the year ended
December 31, 2021.
Other Comprehensive Income (Loss)
There was an other comprehensive loss of $27 million for the year ended December 31, 2022 compared to
other comprehensive loss of $104 million for the year ended December 31, 2021. This decrease in
comprehensive loss was primarily driven by unfavorable movements of foreign currency translation adjustments
of $79 million for the year ended December 31, 2022 as compared to unfavorable foreign currency translation
adjustments of $113 million in the prior year. In addition, we recognized net gains on derivative instruments of
$30 million in the year ended December 31, 2022 as compared to net losses on derivative instruments of
$11 million in the prior year. We also recognized $22 million of pension and postretirement gains for the year
ended December 31, 2022 as compared to $20 million of pension and postretirement gains for the prior year.
A discussion of our comprehensive (loss) income for the year ended December 31, 2021 versus
December 31, 2020 is included in Part II, Item 7, ‘‘Management’s Discussion and Analysis of Financial
Condition and Results of Operations — Other Comprehensive (Loss) Income’’, included in our Annual Report on
Form 10-K for the year ended December 31, 2021.
Liquidity and Capital Resources
During 2022, our liquidity decreased by $69 million to $608 million.
44
The table below presents our liquidity, including amounts available under our credit facilities, as of the
following dates:
December 31,
2022
December 31,
2021
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Available under the Cash Flow Revolver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Available under the Standard Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Available under the Emirates Revolver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Available under the SABB Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Available under the Bank Itau Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$164
300
59
60
19
6
$608
$228
329
63
38
19
—
$677
Historically, we have funded our operations and met our commitments through cash generated by
operations, issuance of unsecured notes, bank financings and borrowings under lines of credit. In the next twelve
months, we expect that our operations will provide sufficient cash for our operating expenses, capital
expenditures, interest payments and debt repayments, however, if necessary, we have the ability to borrow under
our debt and revolving credit agreements (see Note 13 of notes to consolidated financial statements). This is
predicated on our achieving our forecast which could be negatively impacted by items outside of our control,
including, among other things, macroeconomic conditions, inflationary pressures, political instability including
the ongoing Russia and Ukraine conflict and any expansion of such conflict, and supply chain disruptions. If
negative events occur in the future, we may need to reduce our capital spend, cut back on operating costs, and
other items within our control to maintain appropriate liquidity.
In January and February 2023, we drew down an aggregate amount of approximately $118 million on
several of our short- term facilities.
Working capital (calculated as current assets less current liabilities) was $1.1 billion at December 31, 2022,
compared to $1.2 billion at December 31, 2021.
As of and for the year ended December 31, 2022, the non-guarantor subsidiaries of our Senior Notes due
2029 represented approximately 19% of our total consolidated liabilities, approximately 37% of our total
consolidated assets, approximately 44% of our total consolidated net sales and approximately 48% of our
Consolidated EBITDA (as such term is defined in the 2029 Indenture). In addition, as of December 31, 2022, our
non-guarantor subsidiaries had $744 million of total consolidated liabilities (including trade payables but
excluding intercompany liabilities), all of which would have been structurally senior to the 2029 Notes. See
Note 13 of notes to consolidated financial statements for additional information.
At December 31, 2022, we had outstanding letters of credit and bank guarantees of $109 million. See
Note 13 of notes to consolidated financial statements.
Principal factors that could affect our ability to obtain cash from external sources include (i) debt covenants that
limit our total borrowing capacity; (ii) increasing interest rates applicable to our floating rate debt; (iii) increasing
demands from third parties for financial assurance or credit enhancement; (iv) credit rating downgrades, which could
limit our access to additional debt; (v) a decrease in the market price of our common stock and debt obligations; and
(vi) volatility in public debt and equity markets.
As of December 31, 2022, our credit rating with Moody’s was Ba3 stable outlook, positively upgraded
starting in the first quarter of 2022 from B1 stable outlook at December 31, 2021. As of December 31, 2022, our
credit rating with Standard & Poor’s was B positive outlook, positively upgraded starting in the first quarter of
2022 from B stable outlook at December 31, 2021. See Note 13 of notes to consolidated financial statements.
Cash and Cash Equivalents
We consider all investments with original maturities of three months or less to be cash equivalents. As of
December 31, 2022, our cash and cash equivalents were invested in money market funds and we also receive
earnings credits for some balances left in our bank operating accounts. We maintain cash and cash equivalents in
bank deposit and money market accounts that may exceed federally insured limits. The financial institutions
where our cash and cash equivalents are held are highly rated and geographically dispersed, and we have a
45
policy to limit the amount of credit exposure with any one institution. We have not experienced any losses in
such accounts and believe we are not exposed to significant credit risk.
The use of our cash includes payment of our operating expenses, capital expenditures, servicing our interest
and debt repayment obligations, cash taxes, making pension contributions and making quarterly dividend
payments. Going forward, we expect to continue to invest in our businesses through cost reduction initiatives, as
well as growth and vertical integration-related capital expenditures including projects such as newTRON and
various mine development projects, continued reductions in our debt, continued dividends and share repurchases.
Repatriation of Cash
At December 31, 2022, we held $164 million in cash and cash equivalents in these respective jurisdictions:
$18 million in South Africa, $40 million in Australia, $39 million in Brazil, $16 million in Saudi Arabia,
$29 million in China, and $22 million in Europe. Our credit facilities limit transfers of funds from subsidiaries in
the United States to certain foreign subsidiaries. In addition, at December 31, 2022, we held less than $1 million
of restricted cash which is in Australia related to performance bonds.
At December 31, 2022, Tronox Holdings plc had foreign subsidiaries with undistributed earnings. Although
we would not be subject to income tax on these earnings, we have asserted that amounts in specific jurisdictions
are indefinitely reinvested outside of the parent’s taxing jurisdictions. These amounts could be subject to
withholding tax if distributed, but the Company has made no provision for tax related to these undistributed
earnings. The Company has removed its assertion that earnings in China are indefinitely reinvested, and the
withholding tax accruals for potential repatriations from that jurisdiction are now reflected in the effective tax
rate reconciliation in Note 5 to the consolidated financial statements.
Stock Repurchases
As previously announced, on November 9, 2021, the Company’s Board of Directors authorized the
repurchase of up to $300 million of the Company’s stock through February 2024. During the year ended
December 31, 2022, we purchased a total of 2,843,789 shares on the open market at an average price of
$17.38 per share and at an aggregate cost of approximately $50 million, including sales commissions, transfer
taxes and fees. Upon repurchase of the shares by the Company, the shares were cancelled. Under the
authorization from our Board of Directors, we have approximately $251 million available for additional
repurchases through February 2024.
Cash Dividends on Ordinary Shares
On February 22, 2023, the Board declared a quarterly dividend of $0.125 per share to holders of our
ordinary shares at the close of business on March 6, 2023, which will be paid on April 6, 2023.
Debt Obligations
2022 Term Loan Facility
On April 4, 2022, Tronox Finance LLC (the ‘‘Borrower’’), the Borrower’s indirect parent company, Tronox
Holdings plc (the ‘‘Company’’), certain of the Company’s subsidiaries, the incremental term lender party thereto,
and HSBC Bank USA National Association, as Administrative Agent and Collateral Agent, entered into
Amendment No. 1 to the Amended and Restated First Lien Credit Agreement (the ‘‘Amendment’’). The
Amendment provides the Borrower with a new seven-year incremental term loan facility (the ‘‘2022 Term Loan
Facility’’ and, the loans thereunder, the ‘‘2022 Incremental Term Loans’’) under its credit agreement in an
aggregate initial principal amount of $400 million.
The proceeds of the 2022 Incremental Term Loan were used on April 4, 2022, along with cash on hand, to
redeem all of the outstanding 6.5% Senior Secured Notes due 2025 issued by Tronox Incorporated under the
Indenture dated as of May 1, 2020 with Wilmington Trust, National Association, as Trustee and Collateral Agent
and to pay transaction related costs and expenses. In connection with such redemption, all security interest and
liens granted to Wilmington Trust, National Association, were automatically terminated and discharged.
As a result of this transaction, we recognized approximately $21 million, including a call premium of
$18 million, in ‘‘Loss on Extinguishment of Debt’’ on the Consolidated Statement of Income for the year ended
December 31, 2022.
46
Itaù Unibanco S.A. Credit Facility
On November 1, 2022, our Brazilian subsidiary entered into a working capital facility with Itaù Unibanco
S.A. in Brazil for an amount up to 30 million BRL (approximately $6 million at the December 31, 2022
exchange rate). There is no maturity date under this facility until written notice is given. The facility bears
interest at the Bolsa do Basil reference rate on outstanding balances. There is no borrowings outstanding under
this facility at December 31, 2022.
At December 31, 2022 and 2021, our long-term debt, net of unamortized discount and debt issuance costs
was $2.5 billion and $2.6 billion, respectively.
At December 31, 2022 and 2021, our net debt (the excess of our debt over cash and cash equivalents) was
$2.4 billion and $2.3 billion, respectively. See Note 13 of notes to consolidated financial statements.
Off-Balance Sheet Arrangements
On March 15, 2022, the Company entered into an accounts receivable securitization program
(‘‘Securitization Facility’’) with a financial institution, through our wholly-owned special purpose
bankruptcy-remote subsidiary, Tronox Securitization LLC (‘‘SPE’’). The Securitization Facility permitted the SPE
to sell accounts receivable up to $75 million.
In November 2022, the Company amended the receivable purchase agreement to expand the program to
include receivables generated by its wholly-owned Australian operating subsidiaries, Tronox Pigment Pty Ltd.,
Tronox Pigment Bunbury Ltd. and Tronox Mining Australia Ltd. which increased the facility limit to
$200 million and to extend the program term to November 2025.
See ‘‘Note 7 — Accounts Receivable Securitization Program’’ in notes to consolidated financial statements
for further details regarding this off-balance sheet program.
Cash Flows
Years Ended December 31, 2022 and 2021
The following table presents cash flow for the periods indicated:
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effect of exchange rate changes on cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net decrease in cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended December 31,
2022
2021
(Millions of U.S. dollars)
$ 598
(415)
(250)
(1)
$ (68)
$ 740
(269)
(877)
(10)
$(416)
Cash Flows provided by Operating Activities — Cash provided by our operating activities is driven by net
income adjusted for non-cash items and changes in working capital items. The following table summarizes our
net cash provided by operating activities for 2022 and 2021:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net adjustments to reconcile net income to net cash provided by operating activities . . .
Income related cash generation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net change in assets and liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$500
113
613
(15)
Net cash provided by our operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$598
$303
455
758
(18)
$740
Year Ended December 31,
2022
2021
(Millions of U.S. dollars)
47
Net cash provided by operating activities was $598 million in 2022 as compared to $740 million in 2021.
The decrease of $142 million period over period is primarily due to a $145 million reduction in net income net
of non-cash adjustments and a decrease of $3 million use of cash for net assets and liabilities. The lower use of
cash for working capital was primarily driven by a decrease in accounts receivable of $233 million as a result of
the Securitization Facility (see Note 7 in notes to consolidated financial statements) and a decrease in prepaids
and other current assets of $47 million in the current year, partially offset by increases in inventories of
$255 million and a use of cash for long-term other assets and liabilities of $40 million.
Cash Flows used in Investing Activities — Net cash used in investing activities for the year ended
December 31, 2022 was $415 million as compared to $269 million for the year ended December 31, 2021. The
$146 million increase in use of cash year over year is primarily driven by higher capital expenditures of
$428 million partially offset by $13 million of proceeds from the sale of assets in the current year.
Cash Flows (used in) provided by Financing Activities — Net cash used in financing activities during the
year ended December 31, 2022 was $250 million as compared to cash used in financing activities of
$877 million for the year ended December 31, 2021. The current year is primarily comprised of repayments of
long-term and short-term debt of $629 million partially offset by proceeds from long-term debt and short-term
debt of $538 million. The current year was primarily comprised of the early redemption of the 6.5% Senior
Secured Notes due 2025 of $500 million and a related call premium paid of $18 million, repayments of
$103 million on our Cash Flow Revolver and total mandatory repayments of approximately $12 million on both
our 2022 Term Loan Facility and South Africa Term Loan Facility. These repayments were offset by net proceeds
from the new 2022 Term Loan Facility of $396 million and proceeds from our Cash Flow Revolver of
$133 million. Additionally, during the current year, $50 million of cash was used in the repurchase of the
Company’s stock as part of our previously announced share repurchase program as well as $87 million of cash
used to pay dividends during the year ended December 31, 2022 as compared to $65 million in the same period
of 2021.
Years Ended December 31, 2021 and 2020
A discussion of our cash flows for the year ended December 31, 2021 versus 2020 is included in Part II,
Item 7, ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations — Cash
Flows’’, included in our Annual Report on Form 10-K for the year ended December 31, 2021.
Contractual Obligations
The following table sets forth information relating to our contractual obligations as of December 31, 2022:
Contractual Obligation Payments Due by Period(3)
3-5
1-3
years
years
(Millions of U.S. dollars)
Less than
1 year
More than
5 years
Total
Long-term debt and lease financing (including interest)(1) . . .
Purchase obligations(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension and other post-retirement benefit obligations(4) . . . . .
Asset retirement obligations(5) . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,298
2,566
234
233
448
$6,779
$206
348
32
31
16
$633
$292
317
46
49
33
$737
$331
307
30
47
49
$764
$2,469
1,594
126
106
350
$4,645
(1) We calculated the Term Loan Facility interest at a LIBOR plus a margin of 2.25%. See Note 13 of notes to our consolidated financial
statements.
(2)
Includes obligations to purchase requirements of process chemicals, supplies, utilities and services. We have various purchase
commitments for materials, supplies, and services entered into in the ordinary course of business. Included in the purchase
commitments table above are contracts, which require minimum volume purchases that extend beyond one year or are renewable
annually and have been renewed for 2023. Certain contracts allow for changes in minimum required purchase volumes in the event of a
temporary or permanent shutdown of a facility. We believe that all of our purchase obligations will be utilized in our normal
operations.
(3)
The table excludes contingent obligations, as well as any possible payments for uncertain tax positions given the inability to estimate
the possible amounts and timing of any such payments.
48
(4)
Pension and other post-retirement benefit (‘‘OPEB’’) obligations of $233 million include estimates of pension plan contributions and
expected future benefit payments for unfunded pension and OPEB plans. Pension plan contributions are forecasted for 2023 only.
Expected future unfunded pension and OPEB benefit payments are forecasted only through 2032. Contribution and unfunded benefit
payment estimates are based upon current valuation assumptions. Estimates of pension contributions after 2023 and unfunded benefit
payments after 2032 are not included in the table because the timing of their resolution cannot be estimated. Refer to Note 21 in notes
to consolidated financial statements for further discussion on our pension and OPEB plans.
(5) Asset retirement obligations are shown at the undiscounted and uninflated values.
Non-U.S. GAAP Financial Measures
EBITDA, Adjusted EBITDA, Adjusted net income attributable to Tronox and Diluted adjusted net income
per share attributable to Tronox, which are used by management to measure performance, are not presented in
accordance with U.S. GAAP. We define EBITDA as net income (loss) excluding the impact of income taxes,
interest expense, interest income and depreciation, depletion and amortization. We define Adjusted EBITDA as
EBITDA excluding the impact of nonrecurring items such as restructuring charges, gain or loss on debt
extinguishments, impairment charges, gains or losses on sale of assets, acquisition- related transaction costs and
pension settlements and curtailment gains or losses. Adjusted EBITDA also excludes non-cash items such as
share-based compensation costs, pension and postretirement costs, and realized and unrealized foreign currency
remeasurement gains and losses. We define Adjusted net income attributable to Tronox as net income attributable
to Tronox excluding the impact of nonrecurring items which are the Company believes are not indicative of its
core operating results such as restructuring charges, gain or loss on debt extinguishments, impairment charges,
gains or losses on sale of assets, acquisition- related transaction costs and pension settlements and curtailment
gains or losses. We define Diluted adjusted net income per share attributable to Tronox as Diluted net income per
share excluding the impact of nonrecurring items which are the Company believes are not indicative of its core
operating results such as restructuring charges, gain or loss on debt extinguishments, impairment charges, gains
or losses on sale of assets, acquisition-related transaction costs and pension settlements and curtailment gains or
losses.
Management believes that EBITDA, Adjusted EBITDA, Adjusted net income attributable to Tronox and
Diluted adjusted net income per share attributable to Tronox are useful to investors, as it is commonly used in
the industry as a means of evaluating operating performance. We do not intend for these non-U.S. GAAP
financial measures to be a substitute for any U.S. GAAP financial information. Readers of these statements
should use these non-U.S. GAAP financial measures only in conjunction with the comparable U.S. GAAP
financial measures. Since other companies may calculate EBITDA, Adjusted EBITDA, Adjusted net income
attributable to Tronox and Diluted adjusted net income per share attributable to Tronox differently than we do,
EBITDA, Adjusted EBITDA, Adjusted net income attributable to Tronox and Diluted adjusted net income per
share attributable to Tronox, as presented herein, may not be comparable to similarly titled measures reported by
other companies. Management believes these non-U.S. GAAP financial measures:
•
•
•
reflect our ongoing business in a manner that allows for meaningful period-to-period comparison and
analysis of trends in our business, as they exclude income and expense that are not reflective of
ongoing operating results;
provide useful information in understanding and evaluating our operating results and comparing
financial results across periods; and
provide a normalized view of our operating performance by excluding items that are either noncash or
infrequently occurring.
These non-U.S. GAAP measures are the primary measures management uses for planning and budgeting
processes, and to monitor and evaluate financial and operating results. In addition, Adjusted EBITDA is a factor
in evaluating management’s performance when determining incentive compensation.
49
The following table reconciles net income to EBITDA and Adjusted EBITDA for the periods presented:
Net income (U.S. GAAP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Depreciation, depletion and amortization expense . . . . . . . . . . . . . . . . . . . . . . . . . . .
EBITDA (non-U.S. GAAP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transaction costs(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Venator settlement(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Integration costs(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on extinguishment of debt(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency remeasurement(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension settlement and curtailment losses (gains)(h). . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance proceeds(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other items(j). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBITDA (non-U.S. GAAP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended December 31,
2020
2021
2022
500
125
(9)
(192)
269
693
26
—
—
85
—
21
3
20
—
27
303
157
(7)
71
297
821
31
18
—
—
—
65
(16)
—
—
28
995
189
(8)
(881)
304
599
30
14
3
—
10
2
(4)
(2)
(11)
27
$ 875
$947
$ 668
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
Represents non-cash share-based compensation. See Note 20 of notes to consolidated financial statements.
2021 amount represents the breakage fee and other costs associated with the termination of the TTI transaction which were primarily
recorded in ‘‘Other (expense) income, net’’ in the Consolidated Statements of Income. 2020 amount represents transaction costs
associated with the TTI acquisition which were recorded in ‘‘Selling, general and administrative expenses’’ in the Consolidated
Statements of Income.
2020 amount represents amounts for employee-related costs, including severance, which was recorded in ‘‘Restructuring’’ in the
Consolidated Statements of Income.
Represents the breakage fee including interest associated with the Venator settlement which were recorded in ‘‘Venator settlement’’ in
the Consolidated Statements of Income.
2020 amount represents integration costs associated with the Cristal transaction after the acquisition which were recorded in ‘‘Selling,
general and administrative expenses’’ in the Consolidated Statements of Income.
2022 amount represents the loss in connection with the redemption of the 6.5% Senior Secured Notes and the issuance of a new loan
which closed in April 2022. 2021 amount represents the loss in connection with the following: 1) termination of its Wells Fargo
Revolver, 2) amendment and restatement of its term loan facility including the new revolving credit facility, 3) termination of its Senior
Notes due 2026 and its Senior Notes due 2025, 4) issuance of its Senior Notes due 2029 and 5) several voluntary prepayments made
on the Term Loan Facility. See Note 13 of notes to consolidated financial statements. 2020 amount represents the loss in connection
with a voluntary prepayment on the prior term loan facility in the US.
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 (expense) income, net’’ in the Consolidated Statements of Income.
2022 amount represents a non-cash pension settlement loss due to the settling of low-dollar valued amounts in our U.S. Qualified Plan.
2020 amount represents a curtailment gain due to the freezing of plan benefits partially offset by pension settlements.
2020 amount represents reimbursement from claims related to the Ginkgo concentrator failure we inherited as a part of the Cristal
transaction.
Includes noncash pension and postretirement costs, accretion expense, severance expense, and other items included in ‘‘Selling general
and administrative expenses’’ and ‘‘Cost of goods sold’’ in the Consolidated Statements of Income.
50
The following table reconciles Net income attributable to Tronox to Adjusted net income attributable to
Tronox for the periods presented:
Year Ended December 31,
2021
2020
2022
Net income attributable to Tronox Holdings plc (U.S. GAAP) . . . . . . . . . . . .
Transaction costs(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Venator settlement(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Integration costs(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on extinguishment of debt(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension settlement and curtailment losses (gains)(f). . . . . . . . . . . . . . . . . . .
Insurance proceeds(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other(h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Withholding tax accrued(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax valuation allowance(j) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Brazilian tax credits(k) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense - deferred tax assets(l). . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted net income attributable to Tronox Holdings plc (non-U.S.
GAAP)(1)(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted net income per share (U.S. GAAP) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transaction costs, per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Venator settlement, per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring, per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Integration costs, per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on extinguishment of debt, per share . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension settlement and curtailment losses (gains), per share. . . . . . . . . . . .
Insurance proceeds, per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Withholding tax accrued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax valuation allowance, per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Brazilian tax credits, per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense - deferred tax assets, per share . . . . . . . . . . . . . . . . . .
Diluted adjusted net income per share attributable to Tronox Holdings plc
$
$
$
$
$
$
497
—
85
—
—
21
15
—
(3)
4
(301)
—
(7)
311
3.16
—
0.54
—
—
0.13
0.09
—
(0.02)
0.03
(1.92)
—
(0.04)
$
$
286
18
—
—
—
57
—
—
12
—
(8)
(3)
—
362
1.81
0.11
—
—
—
0.36
—
—
0.08
—
(0.05)
(0.02)
—
969
14
—
3
10
2
(2)
(11)
4
—
(903)
—
(5)
81
6.69
0.10
—
0.02
0.07
0.01
(0.01)
(0.08)
0.03
—
(6.24)
—
(0.03)
(non- U.S. GAAP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
1.98
$
2.29
$
0.56
Weighted average shares outstanding, diluted (in thousands) . . . . . . . . . . . . .
157,110
157,945
144,906
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Represents breakage fee and other costs associated with termination of TTI Transaction which were primarily recorded in ‘‘Other
income (expense)’’ in the Consolidated Statements of Income.
Represents the breakage fee including interest associated with the Venator settlement which were recorded in ‘‘Venator settlement’’ in
the Consolidated Statements of Income.
Represents amounts for employee-related costs, including severance, net of tax which was recorded in ‘‘Restructuring’’ in the
Consolidated Statements of Income.
Represents integration costs associated with the Cristal acquisition after the acquisition which were recorded in ‘‘Selling, general and
administrative expenses’’ in the Consolidated Statements of Income, net of tax.
2022 amount represents the loss in connection with the redemption of the 6.5% Senior Secured Notes and the issuance of a new term
loan which closed in April 2022. 2021 amount represents the loss in connection with the following: 1) termination of its Wells Fargo
Revolver, 2) amendment and restatement of its term loan facility including the new revolving credit facility, 3) termination of its
Senior Notes due 2026 and its Senior Notes due 2025, 4) issuance of its Senior Notes due 2029, and 5) certain discretionary
prepayments made primarily on our term loan in the US. 2020 amount represents a voluntary prepayment made on the prior term loan
facility in the US.
2022 amount represents a non-cash pension settlement loss due to the settling of low-dollar valued amounts in our U.S. Qualified Plan.
2020 amount represents a curtailment gain due to the freezing of plan benefits partially offset by pension settlements.
Represents reimbursement from claims related to the Ginkgo concentration failure we inherited as a part of the Cristal Transaction.
Represents other activity not representative of the ongoing operations of the Company.
51
(i)
(j)
(k)
(l)
Represents potential withholding tax due to the Chinese government for historic distributable income generated.
2022 amount represents the reversal of the tax valuation allowance associated with unlimited lived deferred tax assets primarily within
our Australian jurisdictions. 2021 amount represents the reversal of the tax valuation allowance associated with unlimited live deferred
tax assets within our Saudi Arabia jurisdiction. 2020 amount represents the reversal of tax valuation allowances associated with
unlimited lived deferred tax assets within our US and Brazilian jurisdictions, partially offset by the establishment of full tax valuation
allowances against the deferred tax assets within our Saudi Arabia and UK jurisdictions.
Represents a portion of Brazilian tax credits realized during 2021 generated from operations prior to the Cristal acquisition.
Represents a charge to tax expense for the impact on deferred tax assets from a change in tax rates in a foreign tax jurisdiction.
(1) Only the loss on extinguishment of debt and pension settlement loss amounts and certain other items have been tax impacted. No
income tax impacts have been given to other items as they were recorded in jurisdictions with full valuation allowances.
(2) Diluted adjusted net income per share attributable to Tronox Holdings plc was calculated from exact, not rounded Adjusted net income
attributable to Tronox Holdings plc and share information.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make certain
estimates and assumptions regarding matters that are inherently uncertain and that ultimately affect the reported
amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. The
estimates and assumptions are based on management’s experience and understanding of current facts and
circumstances. These estimates may differ from actual results. Certain of our accounting policies are considered
critical, as they are both important to reflect our financial position and results of operations and require
significant or complex judgment on the part of management. The following is a summary of certain accounting
policies considered critical by management.
Asset Retirement Obligations
To the extent a legal obligation exists, an asset retirement obligation (‘‘ARO’’) is recorded at its estimated
fair value and accretion expense is recognized over time as the discounted liability is accreted to its expected
settlement value. Because AROs represent financial obligations to be settled in the future, uncertainties exist in
estimating the timing and amount of the associated costs to be incurred. Fair value is measured using expected
future cash outflows, adjusted for expected inflation and discounted at our credit-adjusted risk-free interest rate.
No market-risk premium has been included in our calculation of ARO balances since we can make no reliable
estimate. Management believes these estimates and assumptions are reasonable; however, they are inherently
uncertain. Refer to Notes 17 to the consolidated financial statements for a summary of the estimates and
assumptions utilized. At December 31, 2022, AROs were $161 million of which the long-term portion of
$153 million is recorded in ‘‘Asset retirement obligations’’ and the short-term portion of $8 million is recorded in
‘‘Accrued liabilities’’ in the Consolidated Balance Sheet.
Environmental Matters
Liabilities for environmental matters are recognized 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 or
reasonably possible environmental loss in excess of our recorded liabilities. At December 31, 2022,
environmental liabilities (both short term and long term) were $54 million.
For further discussion, see Environmental Matters included elsewhere in this section entitled,
‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ and Notes 2 and 18
to the consolidated financial statements.
Income Taxes
We have operations in several countries around the world and are subject to income and similar taxes in
these countries. The estimation of the amounts of income tax involves the interpretation of complex tax laws and
regulations and how foreign taxes affect domestic taxes, as well as the analysis of the realizability of deferred tax
assets, tax audit findings and uncertain tax positions. Although we believe our tax accruals are adequate,
differences may occur in the future, depending on the resolution of pending and new tax matters.
52
Deferred tax assets and liabilities are determined based on temporary differences between the financial
reporting and tax bases of assets and liabilities using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or settled. A valuation allowance is
provided against a deferred tax asset when it is more likely than not that all or some portion of the deferred tax
asset will not be realized. We periodically assess the likelihood that we will be able to recover our deferred tax
assets and reflect any changes in our estimates in the valuation allowance with a corresponding adjustment to
earnings or other comprehensive income (loss) as appropriate. ASC 740, Income Taxes, requires that all available
positive and negative evidence be weighted to determine whether a valuation allowance should be recorded.
The amount of income taxes we pay are subject to ongoing audits by federal, state and foreign tax
authorities, which may result in proposed assessments. Our estimate of the potential outcome for any uncertain
tax issue is highly judgmental. We assess our income tax positions, and record tax benefits for all years subject
to examination based upon our evaluation of the facts, circumstances and information available at the reporting
date. For those tax positions for which it is more likely than not that a tax benefit will be sustained, we record
the amount that has a greater than 50% likelihood of being realized upon settlement with a taxing authority that
has full knowledge of all relevant information. Interest and penalties are accrued as part of tax expense, where
applicable. If we do not believe that it is more likely than not that a tax benefit will be sustained, no tax benefit
is recognized.
See Notes 2 and 5 to the consolidated financial statements for additional information.
Contingencies
From time to time, we may be subject to 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 or 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. Such contingencies are significant and the accounting requires considerable
management judgments in analyzing each matter to assess the likely outcome and the need for establishing
appropriate liabilities and providing adequate disclosures.
Refer to Notes 2 and 18 to the consolidated financial statements for additional information.
Long-Lived Assets
Key estimates related to long-lived assets (property, plant and equipment, mineral leaseholds, and intangible
assets) include useful lives, recoverability of carrying values, and the existence of any asset retirement
obligations. As a result of future decisions, such estimates could be significantly modified. The estimated useful
lives of property, plant and equipment range from three to forty years, and depreciation is recognized on a
straight-line basis. Useful lives are estimated based upon our historical experience, engineering estimates, and
industry information. These estimates include an assumption regarding periodic maintenance. Mineral leaseholds
are depreciated over their useful lives as determined under the units of production method. Intangible assets with
finite useful lives are amortized on the straight-line basis over their estimated useful lives. The amortization
methods and remaining useful lives are reviewed quarterly.
We evaluate the recoverability of the carrying value of long-lived assets that are held and used whenever
events or changes in circumstances indicate that the carrying value may not be recoverable. Under such
circumstances, we assess whether the projected undiscounted cash flows of our long-lived assets are sufficient to
recover the carrying amount of the asset group being assessed. If the undiscounted projected cash flows are not
sufficient, we calculate the impairment amount by discounting the projected cash flows using our
weighted-average cost of capital. For assets that satisfy the criteria to be classified as held for sale, an
impairment loss, if any, is recognized to the extent the carrying amount exceeds fair value, less cost to sell. The
amount of the impairment of long-lived assets is written off against earnings in the period in which the
impairment is determined.
53
Pension and Postretirement Benefits
We provide pension benefits for qualifying employees in the United States and internationally, with the
largest in the United Kingdom. Because pension benefits represent financial obligations that will ultimately be
settled in the future with employees who meet eligibility requirements, uncertainties exist in estimating the
timing and amount of future payments, and significant estimates are required to calculate pension expense and
liabilities relating to these plans. The company utilizes the services of independent actuaries, whose models are
used to help facilitate these calculations. Several key assumptions are used in actuarial models to calculate
pension expense and liability amounts recorded in the financial statements; the most significant variables in the
models are the expected rate of return on plan assets, the discount rate, and the expected rate of compensation
increase.
Management believes the assumptions used in the actuarial calculations are reasonable, reflect the
company’s experience and expectations for the future and are within accepted practices in each of the respective
geographic locations in which it operates. However, actual results in any given year often differ from actuarial
assumptions due to economic events and different rates of retirement, mortality, and turnover. Refer to Notes 2
and 21 to the consolidated financial statements for a summary of the plan assumptions and additional information
on our pension arrangements.
Expected Return on Plan Assets — In forming the assumption of the long-term rate of return on plan assets,
we consider the expected earnings on funds already invested, earnings on contributions expected to be made in
the current year, and earnings on reinvested returns. The long-term rate of return estimation methodology for the
plans is based on a capital asset pricing model using historical data and a forecasted earnings model. An
expected return on plan assets analysis is performed which incorporates the current portfolio allocation, historical
asset-class returns, and an assessment of expected future performance using asset-class risk factors. A 100 basis
point change in these expected long-term rates of return, with all other variables held constant, would change our
pension expense by approximately $3 million.
Discount Rate — The discount rates selected for estimation of the actuarial present value of the benefit
obligations are determined based on the prevailing market rate for high-quality, fixed-income debt instruments
with maturities corresponding to the expected timing of benefit payments as of the annual measurement date for
each of the various plans. These rates change from year to year based on market conditions that affect corporate
bond yields. A 100 basis points change in discount rates, with all other variables held constant, would have a less
than $1 million impact to our pension expense. A 100 basis points reduction in discount rates would increase the
PBO by approximately $29 million whereas a 100 basis point increase in discount rates would have a favorable
impact to the PBO of approximately $33 million.
Rates of Compensation Increase - We determine these rates based on review of the underlying long-term
salary increase trend characteristic of the local labor markets and historical experience, as well as comparison to
peer companies. A 100 basis points change in the expected rate of compensation increase, with all other variables
held constant, would change our pension expense by approximately $1 million. A 100 basis points reduction in
rate of compensation would have a favorable impact of $4 million whereas a 100 basis point increase in rate of
compensation would have an unfavorable impact of approximately $5 million.
Recent Accounting Pronouncements
See Note 2 of notes to Consolidated Financial Statements for recently issued accounting pronouncements.
Environmental Matters
We are subject to a broad array of international, federal, state, and local laws and regulations relating to
safety, pollution, protection of the environment, and the generation, storage, handling, transportation, treatment,
disposal, and remediation of hazardous substances and waste materials. In the ordinary course of business, we are
subject to frequent environmental inspections and monitoring, and occasional investigations by governmental
enforcement authorities. Under these laws, we are or may be required to obtain or maintain permits or licenses in
connection with our operations. In addition, under these laws, we are or may be required to remove or mitigate
the effects on the environment of the disposal or release of chemical, petroleum, low- level radioactive and other
substances at our facilities. We may incur future costs for capital improvements and general compliance under
environmental, health, and safety laws, including costs to acquire, maintain, and repair pollution control
54
equipment. Environmental laws and regulations are becoming increasingly stringent, and compliance costs are
significant and will continue to be significant in the foreseeable future. There can be no assurance that such laws
and regulations or any environmental law or regulation enacted in the future is not likely to have a material
effect on our business. We believe we are in compliance with applicable environmental rules and regulations in
all material respects.
Refer to Item 3. Legal Proceedings for further information.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to various market, credit, operational, and liquidity risks in the normal course of business,
which are discussed below. We manage these risks through normal operating and financing activities and, when
appropriate, with derivative instruments. We do not invest in derivative instruments for speculative purposes, but
historically have entered into, and may enter into, derivative instruments for hedging purposes in order to reduce
the exposure to fluctuations in interest rates, natural gas prices and exchange rates.
Market Risk
A substantial portion of our products and raw materials are commodities that reprice as market supply and
demand fundamentals change. Accordingly, product margins and the level of our profitability tend to vary with
changes in the business cycle. Our TiO2 prices may do so in the near term as ore prices and pigment prices are
expected to fluctuate over the next few years. We try to protect against such instability through various business
strategies. These include provisions in sales contracts allowing us to pass on higher raw material costs through
timely price increases and formula price contracts to transfer or share commodity price risk, as well as using
varying contract term lengths and selling to a diverse mix of customers by geography and industry to reap the
benefits of a diverse portfolio.
Credit Risk
Credit risk is the risk that a borrower or a counterparty will fail to meet their obligations. A significant
portion of our liquidity is concentrated in trade accounts receivable that arise from sales of our products to
customers. In the case of TiO2, the high level of industry concentration has the potential to impact our overall
exposure to credit risk, either positively or negatively, in that our customers may be similarly affected by changes
in economic, industry or other conditions. We have significant exposure to credit risk in industries that are
affected by cyclical economic fluctuations. We perform ongoing credit evaluations of our customers from time to
time, as deemed appropriate, to mitigate credit risk but generally do not require collateral. Our contracts typically
enable us to tighten credit terms if we perceive additional credit risk; however, historic losses due to write offs of
bad debt have been relatively low. In addition, due to our international operations, we are subject to potential
trade restrictions and sovereign risk in certain countries in which we operate. We maintain allowances for
potential credit losses based on specific customer review and current financial conditions. During 2022, 2021 and
2020 our ten largest third-party customers represented 30%, 28%, and 32%, respectively, of our consolidated net
sales. During 2022, 2021, and 2020, no single customer accounted for 10% of our consolidated net sales.
Interest Rate Risk
Interest rate risk arises from the possibility that changes in interest rates will impact our financial results.
We are exposed to interest rate risk on our floating rate debt, the Term Loan Facility, 2022 Term Loan Facility,
Standard Bank Term Loan Facility, Cash Flow Revolver, Standard Bank Revolver, Emirates Revolver and SABB
Credit Facility balances. Using a sensitivity analysis as of December 31, 2022, a hypothetical 1% increase in
interest rates would result in a net decrease to pre-tax income of approximately $6 million on an annualized
basis. This is due to the fact that earnings on our interest earning financial assets of $38 million at December 31,
2022 would increase by the full 1%, offsetting the impact of a 1% increase in interest expense on our floating
rate debt of $696 million.
During 2019, we entered into interest-rate swap agreements for a portion of our Prior Term Loan Facility,
which effectively convert the variable rate to a fixed rate for a 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. There was no impact associated with the
Term Loan Facility as the hedge remained highly effective.
55
Currency Risk
Currency risk arises from the possibility that fluctuations in foreign exchange rates will impact our balance
sheets due to the translation of our assets and liabilities denominated in foreign currencies, as well as our
earnings due to the translation of certain of our subsidiaries’ Statements of Income from local currencies to U.S.
dollars, as well as due to remeasurement of assets and liabilities denominated in currencies other than a
subsidiary’s functional currency. A significant portion of our Adjusted EBITDA is derived from jurisdictions that
are subject to currency risk with Australia, Europe and South Africa representing the largest contributors. We
manufacture and market our products in a number of countries throughout the world and, as a result, are exposed
to changes in foreign currency exchange rates, particularly in Australia, Brazil, China, South Africa, the
Netherlands, France and the United Kingdom. The exposure is more prevalent in South Africa and Australia as
the majority of revenues are earned in U.S. dollars while expenses are primarily incurred in local currencies.
Since we are exposed to movements in the South African rand, the Australian Dollar, the Euro and the Pound
Sterling versus the U.S. dollar, we may enter into forward contracts to buy and sell foreign currencies as
‘‘economic hedges’’ for these foreign currency transactions.
We periodically enter into foreign currency contracts used to hedge 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 income (loss) to the extent
such contracts are effective, and are recognized in net sales or costs of goods sold in the period in which the
forecasted transaction affects earnings or the transactions are no longer probable of occurring.
As of December 31, 2022, we had no outstanding amounts to reduce the exposure of our Australian
subsidiaries’ cost of sales to fluctuations in currency rates or to reduce the exposure of our South African
subsidiaries’ third party sales to fluctuations in currency rates. At December 31, 2022, there was an unrealized
net loss of $4 million recorded in ‘‘Accumulated other comprehensive loss’’ on the Consolidated Balance Sheet,
which is expected to be recognized in earnings over the next twelve months. At December 31, 2021, there was
an unrealized net gain of $15 million recorded in ‘‘Accumulated other comprehensive loss’’ on the Consolidated
Balance Sheet.
We enter into foreign currency contracts to reduce exposure of our subsidiaries’ balance sheet accounts not
denominated in our subsidiaries’ functional currency to fluctuations in foreign currency exchange rates. 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) income, net’’ within the Consolidated Statement
of Income and partially offsets the change in value of third party and intercompany-related receivables not
denominated in the functional currency of the subsidiary. At December 31, 2022, there was (i) 1.2 billion South
African Rand (or approximately $68 million at the December 31, 2022 exchange rate), (ii) 197 million Australian
dollars (or approximately $135 million at the December 31, 2022 exchange rate), (iii) 20 million Pound Sterling
(or approximately $24 million at the December 31, 2022 exchange rate and (iv) 44 million Euro (or
approximately $48 million at the December 31, 2022 exchange rate) of notional amount of outstanding foreign
currency contracts.
56
Item 8.
Financial Statements and Supplementary Data
Tronox Holdings Audited Annual Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID 238) . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Income for the Years Ended December 31, 2022, 2021, and 2020. . . . . . . . . .
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2022, 2021, and
2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Balance Sheets at December 31, 2022 and 2021. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows for the Years Ended December 31, 2022, 2021, and 2020 . . . . . .
Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 2022,
2021, and 2020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58
60
61
62
63
64
65
Page No.
57
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Tronox Holdings plc
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Tronox Holdings plc and its subsidiaries
(the ‘‘Company’’) as of December 31, 2022 and 2021, and the related consolidated statements of income, of
comprehensive income, of shareholders’ equity and of cash flows for each of the three years in the period ended
December 31, 2022, including the related notes (collectively referred to as the ‘‘consolidated financial
statements’’). We also have audited the Company’s internal control over financial reporting as of December 31,
2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects,
the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and
its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting
principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in
all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria
established in Internal Control — Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining
effective internal control over financial reporting, and for its assessment of the effectiveness of internal control
over financial reporting, included in Management’s Report on Internal Control over Financial Reporting
appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial
statements and on the Company’s internal control over financial reporting based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement, whether due to error or fraud, and whether effective internal control over
financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of
material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. Our audit of internal control over financial reporting
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.
58
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the
consolidated financial statements that was communicated or required to be communicated to the audit committee
and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and
(ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit
matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we
are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit
matter or on the accounts or disclosures to which it relates.
Accounts Receivable Securitization Program
As described in Note 7 to the consolidated financial statements, in March 2022, the Company entered into
an accounts receivable securitization program with a financial institution to sell accounts receivables generated
by its wholly owned U.S. operating subsidiary. In November 2022, the Company amended the receivable
purchase agreement to expand the program to include receivables generated by its wholly owned Australian
operating subsidiaries. For the year ended December 31, 2022, the Company sold to the purchaser accounts
receivable in exchange for a total aggregated amount of $147 million of cash proceeds, and recorded $24 million
within accounts payable as of December 31, 2022 for the amount that is still due to the purchaser as a result of a
periodic decrease in accounts receivable sold to the purchaser, which was paid in January 2023. Additionally, as
of December 31, 2022, the Company retained approximately $69 million of unsold receivables which were
pledged as collateral for the sold receivables. As these transactions represent a true sale, the Company
derecognized the sold receivables as of December 31, 2022 and classified the cash proceeds as a source of cash
provided by operating activities.
The principal considerations for our determination that performing procedures relating to the accounts
receivable securitization program is a critical audit matter are (i) the significant judgment by management when
evaluating whether the sold receivables met the definition of a true sale in accordance with U.S. GAAP; (ii) a
high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating the audit
evidence obtained relating to the evaluation of the appropriateness of the true sale conclusion and classification
of the true sale within the financial statements; and (iii) the audit effort involved the use of professionals with
specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with
forming our overall opinion on the consolidated financial statements. These procedures included testing the
effectiveness of controls relating to management’s evaluation as to whether the sold receivables met the
definition of a true sale. These procedures also included, among others (i) obtaining and reviewing the third-party
true sale opinions and securitization agreements; (ii) confirming, on a sample basis, the outstanding sold
receivable as of December 31, 2022 with the third-party customer of the Company to validate that a bona fide
receivable existed upon the sale of the receivable to the purchaser; (iii) confirming the outstanding principal
balance as of December 31, 2022 with the purchaser; (iv) evaluating the appropriateness of the classification of
the sold and unsold receivables in the financial statements; and (v) testing the completeness and accuracy of data
provided by management. Professionals with specialized skill and knowledge were used to assist in evaluating
whether the sold receivables met the definition of a true sale under U.S. GAAP and evaluating the
appropriateness of the classification of the true sale in the financial statements.
/s/ PricewaterhouseCoopers LLP
Stamford, Connecticut
February 22, 2023
We have served as the Company’s auditor since 2014.
59
TRONOX HOLDINGS PLC
CONSOLIDATED STATEMENTS OF INCOME
(Millions of U.S. dollars, except share and per share data)
Year Ended December 31,
2021
2020
2022
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
3,454
2,622
$
3,572
2,677
$
2,758
2,137
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Venator settlement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loss on extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other (expense) income, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income tax benefit (provision) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to Tronox Holdings plc . . . . . . . . . . . . . . . . . . . . . . .
$
832
289
85
—
458
(125)
9
(21)
(13)
308
192
500
3
497
Earnings per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
3.21
3.16
895
318
—
—
577
(157)
7
(65)
12
374
(71)
303
17
286
1.88
1.81
$
$
$
621
347
—
3
271
(189)
8
(2)
26
114
881
995
26
969
6.76
6.69
$
$
$
Weighted average shares outstanding, basic (in thousands) . . . . . . . . . . . . . .
154,867
152,056
143,355
Weighted average shares outstanding, diluted (in thousands) . . . . . . . . . . . .
157,110
157,945
144,906
See notes to consolidated financial statements.
60
TRONOX HOLDINGS PLC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Millions of U.S. dollars)
Year Ended December 31,
2021
2020
2022
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss):
Foreign currency translation adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension and postretirement plans (See Note 21):
Actuarial gains (losses), net of tax expense of $4, tax expense of $6 and
tax benefit of $5 in 2022, 2021 and 2020, respectively . . . . . . . . . . . . . .
Amortization of unrecognized actuarial losses, net of tax benefit of $2 in
2022, $2 in 2021 and less than $1 in 2020 . . . . . . . . . . . . . . . . . . . . . . . .
Settlement loss reclassified from accumulated other comprehensive loss
to the Consolidated Statements of Income, net of tax benefit of $5 in
2022 and nil for both 2021 and 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total pension and postretirement gains (losses) . . . . . . . . . . . . . . . . . . . . . . . .
Realized (gains) losses on derivative instruments reclassified from
accumulated other comprehensive loss to the Consolidated Statements of
Income (net of tax expense of $1 and $1 in 2022 and 2021, respectively
and net of tax benefit of $2 in 2020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized gains (losses) on derivative financial instruments, (net of tax
expense of $5, tax expense of $1 and tax benefit of $5 in 2022, 2021, 2020,
respectively; See Note 14) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$500
$ 303
$995
(79)
(113)
(4)
5
2
15
22
16
4
—
20
(23)
(32)
53
21
(20)
4
—
(16)
4
(4)
Other comprehensive loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(27)
(104)
(20)
Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$473
$ 199
$975
Comprehensive income (loss) attributable to noncontrolling interest:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Comprehensive income attributable to noncontrolling interest . . . . . . . . . . . . . . .
3
3
6
17
(10)
7
26
(16)
10
Comprehensive income attributable to Tronox Holdings plc . . . . . . . . . . . . .
$467
$ 192
$965
See notes to consolidated financial statements.
61
TRONOX HOLDINGS PLC
CONSOLIDATED BALANCE SHEETS
(Millions of U.S. dollars, except share and per share data)
ASSETS
Current Assets
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts receivable (net of allowance of $4 in 2022 and $4 in 2021) . . . . . . . . . . . . . . .
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 18
Shareholders’ Equity
Tronox Holdings plc ordinary shares, par value $0.01 — 154,496,923 shares issued
and outstanding at December 31, 2022 and 153,934,677 shares issued and
outstanding at December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital in excess of par value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Tronox Holdings plc shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
See notes to consolidated financial statements.
62
December 31,
2022
2021
$ 164
—
377
1,278
135
6
1,960
1,830
701
250
136
1,233
196
$6,306
$ 486
252
20
50
24
18
850
2,464
89
153
51
110
153
33
3,903
$ 228
4
631
1,048
132
6
2,049
1,710
747
217
85
985
194
$5,987
$ 438
328
26
—
18
12
822
2,558
116
139
66
55
157
32
3,945
2
2,043
1,080
(768)
2,357
46
2,403
$6,306
2
2,067
663
(738)
1,994
48
2,042
$5,987
TRONOX HOLDINGS PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of U.S. dollars)
Year Ended December 31,
2021
2020
2022
Cash Flows from Operating Activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash provided by operating
500
303
995
activities:
Depreciation, depletion and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Share-based compensation expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of deferred debt issuance costs and discount on debt . . . . . . . . . . .
Loss on extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other non-cash affecting net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in assets and liabilities:
Decrease (increase) in accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Increase) decrease in inventories, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Decrease (increase) in prepaid and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . .
(Decrease) 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash Flows from Investing Activities:
Capital expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insurance proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from the sale of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash Flows from Financing Activities:
Repayments of short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repayments of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from short-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Proceeds from long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Repurchase of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Debt issuance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call premium paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted stock and performance-based shares settled in cash for taxes . . . . . . . . .
Proceeds from the exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Effects of exchange rate changes on cash and cash equivalents and restricted
cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net (decrease) increase in cash and cash equivalents and restricted cash. . . . .
Cash and cash equivalents and restricted cash at beginning of period . . . . . . .
269
(261)
26
8
21
50
233
(255)
47
(5)
5
(40)
598
(428)
—
—
13
(415)
(113)
(516)
142
396
(50)
(4)
(18)
(87)
—
—
(250)
(1)
(68)
232
Cash and cash equivalents and restricted cash at end of period . . . . . . . . . . . .
$ 164
Supplemental cash flow information:
Interest paid, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 114
$ 60
297
15
31
11
65
36
(108)
53
53
53
9
(78)
740
(272)
1
—
2
(269)
—
(3,212)
—
2,472
—
(37)
(40)
(65)
(3)
8
(877)
304
(899)
30
10
2
65
(49)
(21)
(29)
17
(2)
(68)
355
(195)
1
(36)
1
(229)
(13)
(233)
13
500
—
(10)
—
(40)
(3)
—
214
(10)
(416)
648
232
(3)
337
311
$ 648
138
47
$ 159
$ 17
$
$
$
See notes to consolidated financial statements.
63
TRONOX HOLDINGS PC
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Millions of U.S. dollars)
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
Limited
Shareholders’
Equity
Non-
controlling
Interest
Balance at January 1, 2020 . . .
Net income. . . . . . . . . . . . . . . .
Other comprehensive loss . . . . .
Shares-based compensation . . . .
Shares cancelled . . . . . . . . . . . .
Measurement period adjustment
related to Cristal acquisition .
Minority interest dividend . . . . .
Ordinary share dividends ($0.28
per share) . . . . . . . . . . . . . . .
Balance at December 31, 2020 .
Net income . . . . . . . . . . . . . . . .
Other comprehensive loss . . . . . .
Shares-based compensation . . . . .
Shares cancelled . . . . . . . . . . . .
Options exercised. . . . . . . . . . . .
Acquisition of noncontrolling
interest . . . . . . . . . . . . . . . . .
Ordinary share dividends ($0.36
per share) . . . . . . . . . . . . . . .
Balance at December 31, 2021 .
Net income . . . . . . . . . . . . . . . .
Other comprehensive loss . . . . . .
Shares-based compensation . . . . .
Shares cancelled . . . . . . . . . . . .
Options exercised. . . . . . . . . . . .
Shares repurchased and
cancelled . . . . . . . . . . . . . . . .
Noncontrolling interest dividend .
Ordinary share dividends ($0.50
per share) . . . . . . . . . . . . . . .
141,900
—
—
2,032
(375)
—
—
—
143,557
—
—
2,844
(137)
425
7,246
—
153,935
—
—
3,420
(28)
14
(2,844)
—
—
$ 1
—
—
—
—
—
—
—
$ 1
—
—
—
—
—
1
—
$ 2
—
—
—
—
—
—
—
—
$1,846
—
—
30
(3)
—
—
—
$1,873
—
—
31
(3)
8
158
—
$2,067
—
—
26
—
—
(50)
—
—
$ (493)
969
—
—
—
—
—
(42)
$ 434
286
—
—
—
—
—
(57)
$ 663
497
—
—
—
—
—
—
(80)
$(606)
—
(4)
—
—
—
—
—
$(610)
—
(94)
—
—
—
(34)
—
$(738)
—
(30)
—
—
—
—
—
—
$ 748
969
(4)
30
(3)
—
—
(42)
$1,698
286
(94)
31
(3)
8
125
(57)
$1,994
497
(30)
26
—
—
(50)
—
(80)
Total
Equity
$ 916
995
(20)
30
(3)
(3)
(2)
(42)
$1,871
303
(104)
31
(3)
8
$ 168
26
(16)
—
—
(3)
(2)
—
$ 173
17
(10)
—
—
—
(125)
—
(7)
(64)
$ 48
3
3
—
—
—
—
(8)
—
$2,042
500
(27)
26
—
—
(50)
(8)
(80)
Balance at December 31, 2022 .
154,497
$ 2
$2,043
$1,080
$(768)
$2,357
$ 46
$2,403
See notes to consolidated financial statements.
64
TRONOX HOLDINGS PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Millions of U.S. dollars, except share, per share and metric tons data or unless otherwise noted)
1. The Company
Tronox Holdings plc (referred to herein as ‘‘Tronox’’, the ‘‘Company’’, ‘‘we’’, ‘‘us’’, or ‘‘our’’) operates
titanium-bearing mineral sand mines and beneficiation operations in Australia and South Africa 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. Our strategy is to
be vertically integrated and produce enough feedstock materials to be as self- sufficient as possible in the
production of TiO2 at our 9 pigment facilities located 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, pig iron and the rare-earth bearing mineral, monazite, which we also
supply to customers around the world.
We are a public limited company listed on the New York Stock Exchange and are registered under the laws
of England and Wales.
Basis of Presentation
We are considered a domestic company in the United Kingdom and, as such, are required to comply with
filing requirements in the United Kingdom. Additionally, we are not considered a ‘‘foreign private issuer’’ in the
U.S.; therefore, we are required to comply with the reporting and other requirements imposed by the
U.S. securities law on U.S. domestic issuers, which, among other things, requires reporting under accounting
principles generally accepted in the United States of America (‘‘U.S. GAAP’’). The consolidated financial
statements included in this Form 10-K are prepared in conformity with U.S. GAAP.
Our consolidated financial statements include the accounts of all majority-owned subsidiary companies. All
intercompany balances and transactions have been eliminated in consolidation. Certain prior period amounts have
been reclassified to conform to the manner and presentation in the current period.
Use of Estimates
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.
2.
Significant Accounting Policies
Foreign Currency
The U.S. dollar is our reporting currency for our consolidated financial statements in U.S. GAAP. We
determine the functional currency of each subsidiary based on a number of factors, including the predominant
currency for revenues, expenditures and borrowings. Adjustments from the remeasurement of non-functional
currency monetary assets and liabilities are recorded in ‘‘Other (expense) income, net’’ in the Consolidated
Statements of Income. When a subsidiary’s functional currency is not the U.S. dollar, translation adjustments
resulting from translating the functional currency financial statements into U.S. dollar equivalents are recorded in
‘‘Accumulated other comprehensive loss’’ in the Consolidated Balance Sheets.
Translation adjustments on intercompany foreign currency receivables and payables that are not expected to
be settled in the foreseeable future are reported in the same manner as translation adjustments.
Revenue Recognition
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. All amounts billed to a
65
customer in a sales transaction related to shipping and handling represent revenues earned and are reported as
‘‘Net sales’’ in the Consolidated Statements of Income. Accruals are made for sales returns, rebates and other
allowances, which are recorded in ‘‘Net sales’’ in the Consolidated Statements of Income and are based on our
historical experience and current business conditions. Additionally, we have elected the practical expedient to
exclude sales taxes and similar taxes that we collect from customers on behalf of government authorities from
the revenue transaction price. See Note 3.
Cost of Goods Sold
Cost of goods sold includes costs for purchasing, receiving, manufacturing, and distributing products,
including raw materials, energy, labor, depreciation, depletion, shipping and handling, freight, warehousing, and
other production costs.
Research and Development
Research and development costs, included in ‘‘Selling, general and administrative expenses’’ in the
Consolidated Statements of Income comprised of salaries, building costs, utilities, administrative expenses,
third party research, and allocations of corporate costs, were $12 million, $13 million, and $12 million during
2022, 2021, and 2020, respectively, and were expensed as incurred.
Selling, General and Administrative Expenses
Selling, general and administrative expenses include costs related to marketing, research and development,
agent commissions, and legal and administrative functions such as corporate management, human resources,
information technology, investor relations, accounting, treasury, and tax compliance.
Income Taxes
We use the asset and liability method of accounting for income taxes. The estimation of the amounts of
income taxes involves the interpretation of complex tax laws and regulations and how foreign taxes affect
domestic taxes, as well as the analysis of the realizability of deferred tax assets, tax audit findings, and uncertain
tax positions.
Deferred tax assets and liabilities are determined based on temporary differences between the financial
reporting and tax bases of assets and liabilities using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or settled. A valuation allowance is
provided against a deferred tax asset when it is more likely than not that all or some portion of the deferred tax
asset will not be realized. We periodically assess the likelihood that we will be able to recover our deferred tax
assets and reflect any changes in our estimates in the valuation allowance, with a corresponding adjustment to
earnings or other comprehensive income (loss), as appropriate. All available positive and negative evidence is
weighted to determine whether a valuation allowance should be recorded.
The amount of income taxes we pay is subject to ongoing audits by federal, state, and foreign tax
authorities, which may result in proposed assessments. Our estimate of the potential outcome for any uncertain
tax issue is highly judgmental. We assess our income tax positions, and record tax benefits for all years subject
to examination based upon our evaluation of the facts, circumstances, and information available at the reporting
date. For those tax positions for which it is more likely than not that a tax benefit will be sustained, we record
the amount that has a greater than 50% likelihood of being realized upon settlement with a taxing authority that
has full knowledge of all relevant information. Interest and penalties are accrued as part of tax expense, where
applicable. If we do not believe that it is more likely than not that a tax benefit will be sustained, no tax benefit
is recognized. See Note 5.
Earnings per Share
Basic and diluted earnings per share are calculated using the two-class method. Under the two-class method,
earnings used to determine basic earnings per share are reduced by an amount allocated to participating
securities. Participating securities include restricted shares issued under the Tronox Management Equity Incentive
Plan (the ‘‘MEIP’’) (see Note 20), which contains non- forfeitable dividend rights. Our unexercised options and
unvested restricted share units do not contain non-forfeitable rights to dividends and, as such, are not considered
66
in the calculation of basic earnings per share. Our unvested restricted shares do not have a contractual obligation
to share in losses; therefore, when we record a net loss, none of the loss is allocated to participating securities.
Consequently, in periods of net loss, the two-class method does not have an effect on basic loss per share.
Diluted earnings per share is calculated by dividing net earnings allocable to ordinary shares by the
weighted-average number of ordinary shares outstanding for the period, as adjusted for the potential dilutive
effect of non-participating restricted share units and options. The options are included in the calculation of
diluted earnings per ordinary share utilizing the treasury stock method. See Note 6.
Fair Value Measurement
We measure fair value on a recurring basis utilizing valuation techniques that maximize the use of
observable inputs and minimize the use of unobservable inputs, to the extent possible, and consider counterparty
credit risk in our assessment of fair value. The fair value hierarchy is as follows:
•
•
•
Level 1 – Quoted prices in active markets for identical assets and liabilities;
Level 2 – Quoted prices for similar assets and liabilities in active markets, quoted prices for identical
or similar assets and liabilities in markets that are not active or other inputs that are observable or can
be corroborated by observable market data; and,
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant
to the fair value of the assets and liabilities See Note 15.
Cash and Cash Equivalents
We consider all investments with original maturities of three months or less to be cash equivalents. We
maintain cash and cash equivalents in bank deposit and money market accounts that may exceed federally
insured limits. The financial institutions where our cash and cash equivalents are held are generally highly rated
and geographically dispersed, and we have a policy to limit the amount of credit exposure with any one
institution. We have not experienced any losses in such accounts and believe we are not exposed to significant
credit risk.
At December 31, 2022, we had restricted cash of less than $1 million which was in Australia related to
outstanding performance bonds. At December 31, 2021, we had restricted cash of $4 million comprised of
$3 million in Australia related to outstanding performance bonds and $1 million in Saudi Arabia related to
vendor supply agreement guarantees.
Accounts Receivable, net of allowance for credit losses
We perform credit evaluations of our customers, and take actions deemed appropriate to mitigate credit risk.
Only in certain specific occasions do we require collateral in the form of bank or parent company guarantees or
guarantee payments. We maintain allowances for potential credit losses based on specific customer review and
current financial conditions.
Inventories, net
Pigment inventories are stated at the lower of actual cost and net realizable value, net of allowances for
obsolete and slow- moving inventory. The cost of inventories is determined using the first-in, first-out method.
Carrying values include material costs, labor, and associated indirect manufacturing expenses. Costs for materials
and supplies, excluding titanium ore, are determined by average cost to acquire. Feedstock and co-products
inventories including titanium ore are stated at the lower of the weighted-average cost of production or market.
Inventory costs include those costs directly attributable to products, including all manufacturing overhead but
excluding distribution costs. Raw materials are carried at actual cost.
We review the cost of our inventory in comparison to its net realizable value. We also periodically review
our inventory for obsolescence. In either case, we record any write-down equal to the difference between the cost
of inventory and its estimated net realizable value based on assumptions about alternative uses, market conditions
and other factors. Inventories expected to be sold or consumed within twelve months after the balance sheet date
are classified as current assets and all other inventories are classified as non-current assets. See Note 8.
67
Long Lived Assets
Property, plant and equipment, net is stated at cost less accumulated depreciation, and is depreciated over its
estimated useful life using the straight-line method as follows:
Land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10 — 20 years
10 — 40 years
3 — 25 years
10 years
Maintenance and repairs are expensed as incurred, except for costs of replacements or renewals that improve
or extend the lives of existing properties, which are capitalized. Upon retirement or sale, the cost and related
accumulated depreciation are removed from the respective account, and any resulting gain or loss is included in
‘‘Cost of goods sold’’ or ‘‘Selling, general, and administrative expenses’’ in the Consolidated Statements of
Income. See Note 9.
We capitalize costs associated with our asset retirement obligations which are generally included in
machinery and equipment. See Note 17.
We capitalize interest costs on major projects that require an extended period of time to complete. See Note 13.
Mineral property acquisition costs are capitalized as tangible assets when management determines that
probable future benefits consisting of a contribution to future cash inflows have been identified and adequate
financial resources are available or are expected to be available as required to meet the terms of property
acquisition and anticipated exploration and development expenditures. Mineral leaseholds are depleted over their
useful lives as determined under the units of production method. Mineral property exploration costs are expensed
as incurred. When it has been determined that a mineral property can be economically developed as a result of
establishing proven and probable reserves, the costs incurred to develop such property through the
commencement of production are capitalized. See Note 10.
Intangible assets are stated at cost less accumulated amortization and are amortized on a straight-line basis
over their estimated useful lives, which generally range from 3 to 20 years. See Note 11.
We evaluate the recoverability of the carrying value of long-lived assets that are held and used whenever
events or changes in circumstances indicate that the carrying value may not be recoverable. Under such
circumstances, we assess whether the projected undiscounted cash flows of our long-lived assets are sufficient to
recover the carrying amount of the asset group being assessed. If the undiscounted projected cash flows are not
sufficient, we calculate the impairment amount by discounting the projected cash flows using our
weighted-average cost of capital. For assets that satisfy the criteria to be classified as held for sale, an
impairment loss, if any, is recognized to the extent the carrying amount exceeds fair value, less cost to sell. The
amount of the impairment of long-lived assets is written off against earnings in the period in which the
impairment is determined.
Leases
We determine if a contract is or contains a lease at inception of the contract. Our leases are primarily
operating leases. Leased assets primarily include office buildings, rail cars and motor vehicles, forklifts, and other
machinery and equipment. Our leases primarily have fixed lease payments, with real estate leases typically
requiring additional payments for real estate taxes and occupancy-related costs. Certain of our leases also have
variable lease payments. Variable lease payments that depend on an index or a rate (such as the Consumer Price
Index) are included in our initial measurement of the lease right of use assets and lease liabilities. Variable lease
payments that are not index or rate based (such as variable payments based on our performance or use of the
leased assets) are recorded as expenses when incurred and excluded from the measurement of right of use assets
and lease liabilities. Our leases typically have initial lease terms ranging from 1 to 25 years. Some of our lease
agreements include options to renew, extend or early terminate the leases. Lease term is the non-cancellable
period of a lease, adjusted by the period covered by an option to extend or terminate the lease if we are
reasonably certain to exercise (or not exercise) that option. Our operating leases typically do not contain purchase
options we expect to exercise, residual value guarantees or other material covenants.
68
Operating leases are recorded under ‘‘Lease right of use assets’’, ‘‘Short-term lease liabilities’’, and
‘‘Long-term lease liabilities’’ on the Consolidated Balance Sheets. Finance leases are recorded under ‘‘Property,
plant and equipment net’’, ‘‘Long- term debt due within one year’’, and ‘‘Long-term debt’’ on the Consolidated
Balance Sheets. Operating lease right of use (‘‘ROU’’) assets and lease liabilities are initially recorded at the
present value of the future minimum lease payments over the lease term at the commencement date. As most of
our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information
available at the lease commencement date in determining the present value of future payments. Lease payments
for the initial measurement of lease ROU assets and lease liabilities include fixed payments and variable
payments that depend on an index or a rate. Variable lease payments that are not index or rate based are recorded
as expenses when incurred. Operating lease ROU assets are amortized on a straight-line basis over the period of
the lease. Finance lease ROU assets are amortized on a straight-line basis over the shorter of their estimated
useful lives of leased asset and the lease terms. See Note 16.
Long-term Debt
Long-term debt is stated net of unamortized original issue premium or discount. Premiums or discounts are
amortized using the effective interest method with amortization expense recorded in ‘‘Interest and debt expense,
net’’ in the Consolidated Statements of Income. Deferred debt issuance costs related to a recognized debt liability
are presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of that debt
liability, consistent with debt discounts and are amortized using the effective interest method with amortization
expense recorded in ‘‘Interest and debt expense, net’’ in the Consolidated Statements of Income. See Note 13.
Asset Retirement Obligations
Asset retirement obligations are recorded at their estimated fair value, and accretion expense is recognized
over time as the discounted liability is accreted to its expected settlement value. Fair value is measured using
expected future cash outflows discounted at our credit-adjusted risk-free interest rate, which are considered
Level 3 inputs. We classify accretion expense related to asset retirement obligations as a production cost, which
is included in ‘‘Cost of goods sold’’ in the Consolidated Statements of Income. See Note 17.
Environmental Remediation and Other Contingencies
We record an undiscounted liability when any of the following occur: 1) a claim or assessment has been
asserted, 2) a litigation has commenced, or 3) based on available information, it is probable that a claim or an
assessment will be asserted or a litigation will commence; and in addition, the outcome is expected to be
unfavorable to us and the associated costs can be reasonably estimated. See Note 18.
Self-Insurance
We are self-insured for certain levels of general and vehicle liability, property, workers’ compensation and
health care coverage. The cost of these self-insurance programs is accrued based upon estimated fully developed
settlements for known and anticipated claims. Any resulting adjustments to previously recorded reserves are
reflected in current operating results. We do not accrue for general or unspecific business risks.
Share-based Compensation
Equity Restricted Share and Restricted Share Unit Awards — The fair value of equity instruments is
measured based on the share price on the grant date and is recognized over the vesting period. These awards
contain service, market, and/or performance conditions. For awards containing only a service or a market
condition, we have elected to recognize compensation costs using the straight-line method over the requisite
service period for the entire award. For awards containing a market condition, the fair value of the award is
measured using the Monte Carlo simulation under a lattice model approach. For awards containing a performance
condition, the fair value is the grant date close price and compensation expense is not recognized until we
conclude that it is probable that the performance condition will be met. We reassess the probability at least
quarterly. See Note 20.
Defined Benefit Pension and Postretirement Benefit Plans
We recognize the funded status of our defined benefit pension plans and postretirement benefit plans in the
Consolidated Balance Sheets. The funded status is measured as the difference between the fair value of plan
assets and the benefit obligation at the measurement date. The benefit obligation for the defined benefit plans is
69
the projected benefit obligation (PBO), which represents the actuarial present value of benefits expected to be
paid upon retirement based on employee services already rendered and estimated future compensation levels. The
benefit obligation for our postretirement benefit plans is the accumulated postretirement benefit obligation
(APBO), which represents the actuarial present value of postretirement benefits attributed to employee services
already rendered. The fair value of plan assets related to our defined benefit plan represents the current market
value of assets held in a trust fund, which is established for the sole benefit of plan participants.
If the fair value of plan assets exceeds the benefit obligation, the plan is overfunded, and the excess is
recorded as a prepaid pension asset. On the other hand, if the benefit obligation exceeds the fair value of plan
assets, the plan is underfunded, and the deficit is recorded as pension and postretirement healthcare benefits
obligation in the Consolidated Balance Sheet. The portion of the pension and postretirement healthcare
obligations payable within the next 12 months is recorded in accrued liabilities in the Consolidated Balance
Sheet.
Net periodic pension and postretirement benefit cost represents the aggregation of service cost, interest cost,
expected return on plan assets, amortization of prior service costs or credits and actuarial gains or losses
previously recognized as a component of OCI and it is recorded in the Consolidated Statement of Income. Net
periodic cost is recorded in cost of goods sold and selling, general and administrative expenses in the
Consolidated Statement of Income based on the employees’ respective functions.
Actuarial gains or losses represents the effect of remeasurement on the benefit obligation principally driven
by changes in the plan actuarial assumptions. Prior service costs or credits arise from plan amendments. The
actuarial gains or losses and prior service costs or credits are initially recognized as a component of Other
comprehensive income (loss) in the Consolidated Statement of Comprehensive Income. Those gains or losses and
prior service costs or credits are subsequently recognized as a component of net periodic cost.
The measurement of benefit obligations and net periodic cost is based on estimates and assumptions
approved by management. These valuations reflect the terms of the plans and use participant-specific information
such as compensation, age and years of service, as well as certain assumptions, including estimates of discount
rates, expected return on plan assets, rate of compensation increases and mortality rates.
Defined Contribution Plans — We recognize our contribution as expense when they are due. The expense is
recorded in cost of goods sold or selling, general and administrative expenses the Consolidated Statement of
Income based on the employees’ respective functions.
Multiemployer Plan — We treat our multiemployer plan like a defined contribution plan. A pension plan to
which two or more unrelated employers contribute is generally considered to be a multiemployer plan. As a
defined contribution plan, we recognize the contribution for the period as a net benefit cost and any contributions
due and unpaid as a liability.
Recently Issued Accounting Pronouncements
In March 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. In
December 2022, the FASB issued ASU 2022-06, which defers the sunset date of ASC 848, Reference Rate
Reform, from December 31, 2022 to December 31, 2024. ASU 2022-06 is effective immediately for all entities.
We have conducted an internal assessment to identify items that would be impacted as a result of the
dissolution of LIBOR. Based upon this assessment, we have determined that this change will be most impactful
to our intercompany debt agreements and interest rate swap agreements. Upon conversion of these benchmark
rates, we intend to elect the practical expedients allowed under this standard which is expected to result in an
immaterial impact to the financial statements.
70
3. Revenue
Nature of Contracts and Performance Obligations
We primarily generate revenue from selling TiO2 pigment products and related co-products, primarily zircon
and pig iron, to our customers. These products are used for the manufacture of paints, coatings, plastics, paper,
and a wide range of other applications. We account for a contract with our customer when it has approval and
commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract
has commercial substance, and collectability of consideration is probable.
Our promise in a contract typically relates to the transferring of a product or multiple distinct products that
are substantially the same and that have the same pattern of transfer, representing a single performance obligation
within a contract. We have elected to account for shipping and handling activities that occur after control of the
products has transferred to the customer as contract fulfillment activities, rather than a separate performance
obligation. Amounts billed to a customer in a sales transaction related to shipping and handling activities
continue to be reported as ‘‘Net sales’’ and related costs as ‘‘Cost of goods sold’’ in the Consolidated Statements
of Income.
The duration of our contract period is one year or less. As such, we have elected to recognize incremental
costs incurred to obtain contracts, which primarily consist of commissions paid to third-party sales agents, as
‘‘Selling, general and administrative expenses’’ in the Consolidated Statements of Income. Furthermore, we have
elected not to disclose the value of unsatisfied performance obligations at each period end, given the original
expected duration of our contracts are one year or less.
Transaction Price
Revenue is measured as the amount of consideration that we expect to be entitled in exchange for
transferring products to the customer. The transaction price typically consists of fixed cash consideration. We also
offer various incentive programs to our customers, such as rebates, discounts, and other price adjustments that
represent variable consideration. We estimate variable consideration and include such consideration amounts in
the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will
not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable
consideration and determination of whether to include estimated amounts in the transaction price are based
largely on an assessment of our anticipated performance and all information (historical, current and forecasted)
that is reasonably available to us. We adjust our estimate of revenue at the earlier of when the amount of
consideration we expect to receive changes or when the consideration becomes fixed. Sales returns rarely happen
in our business; therefore, it is unlikely that a significant reversal of revenue will occur.
Sales and similar taxes we collect on behalf of governmental authorities are excluded from the transaction
price for the determination of revenue. The expected costs associated with product warranties continue to be
recognized as expense when the products are sold. Customer payment terms and conditions vary by contract and
customer, although the timing of revenue recognition typically does not differ from the timing of invoicing.
Additionally, as we generally do not grant extended payment terms, we have determined that our contracts
generally do not include a significant financing component.
Revenue Recognition
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 Balances
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 December 31, 2022, and December 31, 2021, 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. When a customer has poor credit worthiness, we may receive advance payment
71
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 December 31, 2022 and December 31, 2021 were less than $1 million and
$2 million, respectively. Contract liability balances were reported as ‘‘Accrued liabilities’’ in the Consolidated
Balance Sheets. All material contract liabilities as of December 31, 2021 and 2020 were recognized as revenue in
‘‘Net sales’’ in the Consolidated Statements of Income during the first quarter of 2022 and first quarter of 2021,
respectively.
Disaggregation of Revenue
We operate under one operating and reportable segment, Tronox. See Note 23 for details. 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:
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
South and Central America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Europe, Middle-East and Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asia Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended December 31,
2021
$ 743
252
1,398
1,179
$3,572
2020
$ 716
181
1,013
848
$2,758
2022
$ 790
264
1,335
1,065
$3,454
The 2020 amounts by geographic area in table above have been corrected for an increase and decrease of
$78 million to Asia Pacific and North America, respectively, as well as an increase and decrease of $134 million
to Europe, Middle-East and Africa and South and Central America, respectively.
Net sales from external customers for each similar type of product were as follows:
TiO2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Zircon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended December 31,
2021
$2,793
478
301
$3,572
2020
$2,176
283
299
$2,758
2022
$2,693
438
323
$3,454
Other products mainly include pig iron, TiCl4 and other mining products. The nature, amount, timing and
uncertainty of revenue and cash flows typically do not differ significantly among different products.
4. Other (Expense) Income, Net
Other (expense) income, net is comprised of the following:
Net realized and unrealized foreign currency gains (losses) . . . . . . . . . . . . . . . . . . .
Pension and postretirement benefit interest cost, expected return on assets and
amortization of actuarial losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pension and postretirement benefit settlement and curtailment (losses) gains(1) . . .
Insurance proceeds(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Breakage fee(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
AMIC technical service support fee (Note 22) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended December 31,
2021
$ 16
2022
$ (3)
2020
$ 4
4
(20)
—
—
8
(2)
$(13)
5
—
—
(18)
8
1
$ 12
1
2
11
—
5
3
$26
(1)
2022 amount is a settlement loss related to our U.S. Qualified Plan. 2020 amount is a curtailment gain related to our former U.S.
Pension Plan (acquired as part of the Cristal transaction). See Note 21.
72
(2)
2020 amount represents reimbursement from claims related to the Ginkgo concentrator failure we inherited as a part of the Cristal
Transaction.
(3)
2021 amount represents the breakage fee associated with the termination of the TTI acquisition.
5.
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) before income taxes is comprised of the following:
Year Ended December 31,
2020
2021
2022
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(130)
438
$ (16)
390
$ (12)
126
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 308
$374
$114
The income tax (provision) benefit is summarized below:
Year Ended December 31,
2020
2021
2022
United Kingdom:
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ — $ (1)
—
—
$ (1)
(10)
International:
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(69)
261
(55)
(15)
(17)
909
Income tax benefit (provision) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$192
$(71)
$881
The following table reconciles the applicable statutory income tax rates to our effective income tax rates for
‘‘Income tax (provision) benefit’’ as reflected in the Consolidated Statements of Income.
Statutory tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Increases (decreases) resulting from:
Year Ended December 31,
2020
2021
2022
19% 19%
19%
Tax rate differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Disallowable expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate reorganization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax rate changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State and local taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prior year accruals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Branch taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Withholding taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expiration of net operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
8
(100)
—
(3)
1
—
—
2
—
2
—
7
2
(27)
17
2
1
(2)
—
2
(2)
—
—
10
17
(849)
(96)
(8)
5
131
—
—
(2)
—
—
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(62)% 19% (773)%
Tronox Holdings plc is a U.K. public limited company and the parent company for the business group. The
statutory tax rate in the U.K. at December 31, 2022, 2021 and 2020 was 19%.
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The effective tax rates in 2022, 2021 and 2020 are all influenced by a variety of factors, primarily income
and losses in jurisdictions with valuation allowances, changes in tax rates, disallowable expenditures, prior year
accruals, and rates different than the United Kingdom statutory rate. The valuation allowances in each year were
impacted by items other than income and losses as follows: 2022 was impacted by the significant release of
valuation allowances in Australia, 2021 was impacted by the release of a valuation allowance in Saudi Arabia
and the liquidation of an inactive Dutch subsidiary with a valuation allowance against its worthless net operating
losses, and 2020 was impacted by the release of valuation allowances in Brazil and the U.S. and the recording of
valuation allowances in Saudi Arabia and the U.K. Additional factors of significance in the above table are as
follows: 1) the disallowance expenditures amount for 2022 includes the Venator settlement, 2) the Corporate
reorganization amount for 2021 includes the liquidation of the inactive Dutch subsidiary and the write-off of its
net operating losses, 3) the Corporate reorganization amounts for 2021 and 2020 include the restructuring of our
Australian entities, and 4) the Prior year accrual amount for 2020 includes the amendment of prior year
Australian tax returns in resolution of a tax audit. Each of these additional factors were fully offset by valuation
allowances.
The Company reached an agreement with the Australian Tax Office (‘‘ATO’’) during the year ended
December 31, 2020 for the tax years 2016 through 2019 related to the companies operating in Australia acquired
in the Cristal transaction, which were under examination by the ATO. Cash tax payments to be made pursuant to
this agreement are not reflected in the above table due to the indemnification clause of the Cristal Transaction
purchase contract. As part of the agreement, $79 million in deferred tax assets related to Australian NOLs were
lost. The change to deferred taxes was fully offset by a valuation allowance and results in no impact to the
consolidated provision. The NOL adjustment from the ATO agreement is reflected in the ‘‘Prior year accruals’’
line of the effective tax rate table.
Changes in our state apportionment factors and state statutory rate changes caused our overall effective state
tax rates to change. Due to the large deferred tax asset created by the Anadarko litigation settlement in 2014,
these state rate changes have a material impact on deferred taxes for 2020. During 2020, tax law changes fully
repealed the future Netherlands rate reduction, and this benefit is also reflected in the ‘‘Tax rate changes’’ line.
Net deferred tax assets (liabilities) at December 31, 2022 and 2021 were comprised of the following:
Deferred tax assets:
Net operating loss and other carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserves for environmental remediation and restoration. . . . . . . . . . . . . . . . . . . . . . . . . . .
Obligations for pension and other employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Grantor trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Valuation allowance associated with deferred tax assets. . . . . . . . . . . . . . . . . . . . . . . . . . .
Net deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2022
2021
$ 1,739
200
47
46
4
621
6
190
48
2
1
5
2,909
(1,527)
1,382
$ 1,720
220
43
58
4
636
8
214
23
3
9
7
2,945
(1,841)
1,104
Deferred tax liabilities:
Inventories, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Lease assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3)
(228)
(15)
(38)
(5)
(216)
(22)
(24)
74
December 31,
2022
2021
Foreign exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4)
(14)
(302)
Net deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,080
Balance sheet classifications:
Deferred tax assets — long-term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax liabilities — long-term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$1,233
$ (153)
$1,080
(1)
(8)
(276)
$ 828
$ 985
$(157)
$ 828
The net deferred tax assets reflected in the above table include deferred tax assets related to grantor trusts,
which were established as Tronox Incorporated emerged from bankruptcy during 2011. The balances relate to the
assets contributed to such grantor trusts by Tronox Incorporated and the proceeds from the resolution of previous
litigation of $5.2 billion during 2014, which resulted in additional deferred tax assets of $2.0 billion. As the
grantor trusts continue to spend funds received from the litigation and earn income from the investment of those
funds, the U.S. net operating loss will increase or decrease.
The 2021 amounts included within the Property, plant and equipment, net and Valuation allowance
associated with deferred tax asset captions in the table above have each been corrected for an increase of
$113 million to gross up historical amounts.
There was a decrease to our valuation allowance of $314 million during 2022 and a decrease of $98 million
in 2021. The table below sets forth the changes, by jurisdiction:
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Netherlands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Saudi Arabia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Switzerland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Belgium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total (decrease) increase in valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2022
$ 13
(5)
(314)
—
—
—
(8)
—
$(314)
2021
$ (1)
(19)
(43)
(24)
(11)
—
—
—
$(98)
During the year ended December 31, 2022, we determined that sufficient positive evidence existed to
reverse a portion of the valuation allowance attributable to the Australian deferred tax assets which we now
believe the Company will be able to utilize in future years. This reversal resulted in a non-cash deferred tax
benefit of $300 million. Our analysis considered all positive and negative evidence, including (i) three years of
cumulative income of our Australian subsidiaries, (ii) our continuing and improved profitability over the last
twelve months, (iii) estimates of continued profitability based on updated to our latest forecasts, (iv) changes in
the factors that drove losses in the past, and (v) an evaluation of specific deferred tax assets for limitations under
certain Australian tax provisions. Based on this analysis, we concluded that it is more likely than not that our
Australian subsidiaries will be able to utilize all of their deferred tax assets except for those which are classified
as Capital Gains Tax (CGT) assets. These CGT assets represent losses which can only be utilized against CGT
gains, and because the Company has no foreseeable source of CGT gains, we will continue to carry an Australian
valuation allowance with a current estimated value of $471 million.
75
During the year ended December 31, 2021, the Company liquidated an inactive Dutch subsidiary with a
valuation allowance against its worthless net operating losses, and because of improved operations, the Company
reversed the valuation allowance in Saudi Arabia which had been established during the year December 31,
2020.
During the year ended December 31, 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 $909 million. Our analysis considered all positive and negative
evidence and 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 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 $1,021 million.
During the year ended December 31, 2020, we also determined sufficient positive evidence existed to reverse the
valuation allowance attributable to the deferred tax assets associated with our operations in Brazil. This reversal
resulted in a non-cash deferred tax benefit of $8 million. Our analysis considered all positive and negative evidence,
the most significant of which was the continuing and improved profitability of the Brazilian company subsequent to its
acquisition in 2019 and estimates of continued profitability based on updates to our latest forecasts. Based on this
analysis, we concluded that it is more likely than not that our Brazilian subsidiary will be able to utilize all of its
deferred tax assets.
During the year ended December 31, 2020, we established a valuation allowance against the net deferred tax
assets in the United Kingdom. The addition of this valuation allowance resulted in a non-cash deferred tax
provision of $10 million. Forecasted changes to intercompany interest is recent negative evidence now impacting
our analysis.
At December 31, 2022, the table above reflects full valuation allowances related to the total net deferred tax
assets in Switzerland and the United Kingdom, as we cannot objectively assert that these deferred tax assets are more
likely than not to be realized. Future provisions for income taxes will include no tax benefits with respect to losses
incurred and tax expense only to the extent of current tax payments until the valuation allowances are eliminated.
Additionally, we have valuation allowances against specific tax assets in Australia, South Africa and the U.S.
These conclusions were reached by the application of ASC 740, Income Taxes, and require that all available
positive and negative evidence be weighted to determine whether a valuation allowance should be recorded. The
more significant evidential matter in Switzerland and the United Kingdom relates to cumulative book losses. The
most significant evidential matter for Australia and South Africa relates to capital losses and assets that cannot be
depleted or depreciated for tax purposes.
The deferred tax assets generated by tax loss carryforwards in Switzerland and the United Kingdom have
been fully offset by valuation allowances. In the United States, the deferred tax assets generated by tax loss
carryforwards are partially offset by a valuation allowance to the extent they are subject to expiration. The
expiration of these carryforwards at December 31, 2022 is shown below. The Australian, Saudi Arabian, French,
Brazilian and United Kingdom tax loss carryforwards do not expire.
2026
2027
2025
2024
2023
$ — $ — $ — $ — $ — $ — $
United Kingdom . . . . . . . . . . . . . . . . . . . .
—
Australia . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —
—
The Netherlands . . . . . . . . . . . . . . . . . . . . — — — — —
—
France . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —
—
Saudi Arabia . . . . . . . . . . . . . . . . . . . . . . . — — — — —
—
(80) — — — —
Switzerland . . . . . . . . . . . . . . . . . . . . . . . .
—
China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — —
(5)
Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —
—
U.S. Federal . . . . . . . . . . . . . . . . . . . . . . . — — — — — (3,959)
(4,060)
U.S. State . . . . . . . . . . . . . . . . . . . . . . . . .
$(8,019)
Total tax loss carryforwards . . . . . . . . . . .
(27)
(40)
$(94) $(12) $(40) $(75) $(32)
2028 - 2040 Unlimited
(97)
(436)
(83)
(180)
(6)
—
—
(10)
(334)
(19)
$(1,165)
(12)
(14)
(75)
Total Tax Loss
Carryforwards
$
(97)
(436)
(83)
(180)
(6)
(80)
(5)
(10)
(4,293)
(4,247)
$(9,437)
76
At December 31, 2022, Tronox Holdings plc had foreign subsidiaries with undistributed earnings. Although
we would not be subject to income tax on these earnings, amounts totaling $454 million are in specific
jurisdictions which we assert are indefinitely reinvested outside of the parents’ taxing jurisdictions. These
amounts could be subject to withholding tax if distributed, but the Company has made no provision for tax
related to these undistributed earnings. The Company has removed its assertion that earnings in China are
indefinitely reinvested, and the withholding tax accruals for potential repatriations from that jurisdiction are now
reflected in the effective tax rate reconciliation above.
The noncurrent liabilities section of our Consolidated Balance Sheet does not reflect any reserves for
uncertain tax positions for either 2022 or 2021.
Our Chinese returns are closed through 2018. Our U.K. and Brazilian returns are closed through 2016. Our
Australian, South African, and U.S. returns are closed through 2018. Our Netherlands and French returns are
closed through 2019.
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, additional
provisions may be necessary and/or reclassifications of noncurrent tax liabilities to current may occur in the
future.
6.
Income Per Share
The computation of basic and diluted income per share for the periods indicated is as follows:
Year Ended December 31,
2021
2020
2022
Numerator – Basic and Diluted:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Net income attributable to noncontrolling interest . . . . . . . . . . . . . . .
Net income available to ordinary shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
500
3
497
$
$
303
17
286
$
$
995
26
969
Denominator – Basic and Diluted:
Weighted-average ordinary shares, basic (in thousands) . . . . . . . . . . . . . . . . .
154,867
152,056
143,355
Weighted-average ordinary shares, diluted (in thousands) . . . . . . . . . . . . . . . .
157,110
157,945
144,906
Net income per Ordinary Share:
Basic net income per ordinary share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Diluted net income per ordinary share . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$
$
3.21
3.16
$
$
1.88
1.81
$
$
6.76
6.69
Net income per ordinary share amounts were calculated from exact, unrounded net income and share
information. Anti- dilutive shares not recognized in the diluted net income per share calculation for the years
ended December 31, 2022, 2021 and 2020 were as follows:
2022
Shares
2021
2020
Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Restricted share units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
515,092
1,590,086
414,296
1,201,891
— 1,054,994
7. Accounts Receivable Securitization Program
On March 15, 2022, the Company entered into an accounts receivable securitization program
(‘‘Securitization Facility’’) with a financial institution (‘‘Purchaser’’), through our wholly-owned special purpose
bankruptcy-remote subsidiary Tronox Securitization LLC (‘‘ SPE’’). The purpose of this program is to enhance
the Company’s financial flexibility by providing additional liquidity. The Securitization Facility permitted the
SPE to sell accounts receivable up to $75 million (the ‘‘Facility Limit’’). Under the Securitization Facility, our
wholly-owned U.S. operating subsidiary, Tronox LLC (‘‘Originator’’), sells its entire accounts receivable on a
77
periodic basis to the SPE. The SPE in turn sells undivided interests in the receivables that meet certain eligibility
criteria, pursuant to the terms of a receivable purchase agreement, to the Purchaser in exchange for cash, not to
exceed the Facility Limit. The SPE retains the remaining receivables as unsold receivables which are pledged as
a collateral for the sold receivables to which the purchaser is granted a first priority security interest.
Following the sale of the receivables by the Originator to the SPE, the receivables are legally isolated from
Tronox and its affiliated entities, and upon the subsequent sale and transfer of the receivables from the SPE to
the administrative agent, effective control of the receivables is passed to the purchaser, which has all rights,
including the right to pledge or sell the receivables. Any new receivables that are not sold to the purchaser by the
SPE are added to the unsold receivables held as collateral.
During March 2022, the Company sold accounts receivable having an aggregate face value of $75 million to
the Purchaser in exchange for cash proceeds of $75 million.
In November 2022, the Company amended the receivable purchase agreement to expand the program to
include receivables generated by its wholly-owned Australian operating subsidiaries, Tronox Pigment Pty Ltd.,
Tronox Pigment Bunbury Ltd. and Tronox Mining Australia Ltd. which increased the Facility Limit to
$200 million and extended the program term to November 2025. Following this amendment, we sold additional
accounts receivable in exchange for net cash proceeds of $72 million, for a total aggregate amount of
$147 million for the combined program.
For the year ended December 31, 2022, the Company sold to the Purchaser accounts receivable a total of
$123 million which resulted in the Company recording $24 million within ‘‘Accounts Payable’’ on the
Consolidated Balance Sheet at December 31, 2022 as this amount is due to the Purchaser as a result of a
periodic decrease in accounts receivable sold to the Purchaser, which was paid in January 2023.
At December 31, 2022, we retained approximately $69 million of unsold receivables which we pledged as
collateral for the sold receivables. As this transaction represents a true sale, we derecognized the sold receivables
from our Consolidated Balance Sheet as of December 31, 2022 and classified the cash proceeds as source of
cash provided by operating activities in our Consolidated Statement of Cash Flows.
8.
Inventories, net
Inventories, net consisted of the following:
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Work-in-process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finished goods, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Materials and supplies, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Inventories, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2022
$ 261
125
641
251
$1,278
2021
$ 265
117
461
205
$1,048
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 December 31, 2022 and 2021, inventory obsolescence reserves were $42 million and $43 million,
respectively. At December 31, 2022 and December 31, 2021, reserves for lower of cost and net realizable value
were $27 million and $11 million, respectively.
9.
Property, Plant and Equipment
Property, plant and equipment, net of accumulated depreciation, consisted of the following:
Land and land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Machinery and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Construction-in-progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2022
$ 226
390
2,330
370
2021
$ 188
365
2,234
263
78
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2022
2021
62
3,378
(1,548)
$ 1,830
73
3,123
(1,413)
$ 1,710
Substantially all 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 Consolidated Statements of Income:
Year Ended December 31,
2021
2020
2022
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$205
4
$209
$222
5
$227
$233
5
$238
10. Mineral Leaseholds, net
Mineral leaseholds, net of accumulated depletion, consisted of the following:
Mineral leaseholds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less accumulated depletion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mineral leaseholds, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2022
$1,282
(581)
$ 701
2021
$1,306
(559)
$ 747
Depletion expense related to mineral leaseholds during 2022, 2021, and 2020 was $29 million, $37 million,
and $33 million, respectively, and was recorded in ‘‘Cost of goods sold’’ in the Consolidated Statements of
Income.
11.
Intangible Assets, net
Intangible Assets, net of accumulated amortization, consisted of the following:
December 31, 2022
December 31, 2021
Gross Cost
Accumulated
Amortization
Net Carrying
Amount
Gross Cost
Accumulated
Amortization
Net Carrying
Amount
Customer relationships . . . . . . . . . . . . . . .
TiO2 technology . . . . . . . . . . . . . . . . . . . .
Internal-use software and other . . . . . . . .
Intangible assets, net. . . . . . . . . . . . . . .
$291
93
179
$563
$(231)
(37)
(45)
$(313)
$ 60
56
134
$250
$291
93
120
$504
$(211)
(31)
(45)
$(287)
$ 80
62
75
$217
As of December 31, 2022 and 2021, internal-use software included approximately $106 million and
$68 million, respectively, 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 Consolidated Statements of Income:
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
79
Year Ended December 31,
2021
$ 2
31
$33
2020
$ 2
31
$33
2022
$ 2
29
$31
Estimated future amortization expense related to intangible assets is $28 million for 2023, $36 million for
2024, $39 million for 2025, $21 million for 2026, $19 million for 2027 and $107 million thereafter.
12. Balance Sheet and Cash Flows Supplemental Information
Accrued liabilities consisted of the following:
Employee-related costs and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Related party payables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sales rebates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Taxes other than income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset retirement obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate swaps. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2022
$107
15
15
37
13
8
—
57
$252
2021
$155
1
20
36
18
10
25
63
$328
Additional supplemental cash flow information for the year ended and as of December 31, 2022, 2021 and
2020 is as follows:
Supplemental non cash information:
Operating activities - reduction of Hawkins Point environmental obligation .
Operating activities - MGT sales made to AMIC. . . . . . . . . . . . . . . . . . . . . . .
Operating activities - Interest expense on MGT loan. . . . . . . . . . . . . . . . . . . .
Investing activities - sale of Hawkins Point land . . . . . . . . . . . . . . . . . . . . . . .
Investing activities - Acquisition of MGT assets . . . . . . . . . . . . . . . . . . . . . . .
Financing activities - debt assumed in the acquisition of MGT assets . . . . . .
Financing activities - Acquisition of noncontrolling interest . . . . . . . . . . . . . .
Financing activities - Repayment of MGT loan . . . . . . . . . . . . . . . . . . . . . . . .
Financing activities - Initial commercial insurance premium financing
agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capital expenditures acquired but not yet paid. . . . . . . . . . . . . . . . . . . . . . . . .
13. Debt
Long-term Debt
Year Ended December 31,
2021
2020
2022
$12
$ 3
$ 1
$12
$—
$—
$—
$ 3
$21
$ —
$
$
4
1
$ —
$ —
$ —
$125
$
3
$ —
$—
$—
$—
$—
$36
$36
$—
$—
$—
2022
$72
December 31,
2021
$75
2020
$37
Long-term debt, net of an unamortized discount and debt issuance costs, consisted of the following:
Original
Principal
Annual
Interest Rate
Maturity
Date
December 31,
2022
December 31,
2021
Term Loan Facility, net of unamortized
discount(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 Term Loan Facility, net of unamortized
discount(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Senior Notes due 2029. . . . . . . . . . . . . . . . . . . .
$1,300
Variable
3/11/2028
$ 898
$ 897
400
1,075
Variable
4/4/2029
4.63% 3/15/2029
393
1,075
—
1,075
80
Original
Principal
Annual
Interest Rate
Maturity
Date
December 31,
2022
December 31,
2021
6.5% Senior Secured Notes due 2025. . . . . . . .
Standard Bank Term Loan Facility(1) . . . . . . . .
Australian Government Loan, net of
unamortized discount . . . . . . . . . . . . . . . . . . .
MGT Loan(2) . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases. . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: Long-term debt due within one year . . . .
Debt issuance costs . . . . . . . . . . . . . . . . . . . . . .
Long-term debt, net . . . . . . . . . . . . . . . . . . . . . .
500
98
6.50%
Variable
5/1/2025
11/11/2026
N/A
36
N/A
Variable
12/31/2036
Variable
—
77
1
30
47
2,521
(24)
(33)
500
92
1
33
14
2,612
(18)
(36)
$2,464
$2,558
(1)
The average effective interest rate, including impacts of our interest rate swap, for the Term Loan Facility was 4.8% and 5.1% for the
year ended December 31, 2022 and 2021, respectively. The average effective interest rate on the Standard Bank Term Loan Facility
was 7.2% and 7.3% for the year ended December 31, 2022 and 2021, respectively. The average effective interest rate on the 2022 Term
Loan Facility was 5.8% for the year ended December 31, 2022.
(2)
The MGT loan is a related party debt facility. Average effective interest rate on the MGT loan was 4.4% and 3.1% during the year
ended December 31, 2022 and 2021, respectively. Refer below for further details.
At December 31, 2022, the scheduled maturities of our long-term debt were as follows:
2023. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remaining accretion associated with the Term Loan Facility and the 2022 Term Loan Facility. . . . .
Total borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total
Borrowings
20
21
22
63
6
2,397
2,529
(8)
2,521
Long-term Debt
Prior Term Loan Facility, Term Loan Facility, Cash Flow Revolver and 2022 Term Loan Facility
On September 22, 2017, we entered into a senior secured first lien term loan facility (the ‘‘Prior Term Loan
Facility’’) with the lenders party thereto and Bank of America, N.A., as administrative agent, with a maturity
date of September 22, 2024. The Prior Term Loan Facility consisted of a U.S. dollar term facility in an aggregate
principal amount of $2.15 billion (the ‘‘Term Loans’’) with our subsidiary, Tronox Finance LLC (‘‘Tronox
Finance’’) as the borrower. The Prior Term Loan Facility bore interest at the ‘‘Applicable Rate’’ defined by
reference to a grid-pricing matrix that relates to our First Lien Net Leverage Ratio and was issued net of an
original issue discount of $11 million.
On September 22, 2017, we entered into a global senior secured asset-based syndicated revolving credit
facility with Wells Fargo Bank, N.A. (the ‘‘Wells Fargo Revolver’’). The Wells Fargo Revolver which initially
provided us with up to $550 million of revolving credit lines, with an $85 million sublimit for letters of credit,
and had a maturity date of September 22, 2022. Our availability of revolving credit loans and letters of credit
was subject to a borrowing base. Borrowings bore interest at our option, at either an adjusted London Interbank
Offered Rate (‘‘LIBOR’’) plus an applicable margin that ranges from 1.25% to 1.75%, or a base rate, which was
defined to mean the greatest of (a) the administrative agent’s prime rate, (b) the Federal funds effective rate plus
0.50% and (c) the adjusted LIBOR for a one month period plus 1.00% plus a margin that ranges from 0.25% to
0.75%, in each case, based on the average daily borrowing availability.
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The Wells Fargo Revolver was terminated during the year ended December 31, 2021 as a result of the Cash
Flow Revolver (defined below).
In December 2020, the Company made a voluntary prepayment of $200 million on the Prior Term Loan
Facility. As a result of the voluntary prepayment, we recorded $2 million in ‘‘Loss on extinguishment of debt’’
within the Consolidated Statement of Income for the year ended December 31, 2020. No prepayment penalties
were required as a result of this principal prepayment.
On March 11, 2021, Tronox Finance LLC entered into an amendment and restatement of its Prior Term
Loan Facility pursuant to which, among other thing, we amended and restated the Prior Term Loan Facility with
a new amended and restated first lien credit agreement dated as of September 22, 2017 (as amended through and
including March 11, 2021) with a syndicate of lenders and HSBC Bank USA, National Association, as
administrative agent and collateral agent. The new amended and restated first lien credit agreement provides the
Company with (a) a new seven-year term loan facility (‘‘Term Loan Facility’’) in an aggregate principal amount
of $1.3 billion and (b) new five-year cash flow revolving facility (the ‘‘Cash Flow Revolver’’) providing initial
revolving commitments of $350 million and a sublimit of $125 million for letters of credit. The maturity date on
the Term Loan Facility and the Cash Flow Revolver is March 11, 2028 and March 11, 2026, respectively.
The Term Loan Facility shall bear interest at either the base rate or an adjusted LIBOR rate, in each case
plus an applicable margin. The applicable margin in respect of the Term Loan Facility is either 1.50% or 1.25%,
for base rate loans, or 2.50% or 2.25%, for adjusted LIBOR rate loans, in each case determined based on,
initially the passage of time, and thereafter upon the Company’s first lien net leverage ratio at the applicable
time. Interest is payable on the Term Loan Facility on the last business of each March, June, September and
December. Based on our first lien net leverage ratio, the applicable margin under the Term Loan Facility as of
December 31, 2022 was LIBOR plus a margin of 2.25%. The Cash Flow Revolver shall bear interest at either
the base rate or adjusted LIBOR rate, in each case plus an applicable margin. The applicable margin in respect of
the Cash Flow Revolver is either 1.25%, 1.00% or 0.75% for base rate loans, or 2.25%, 2.00% or 1.75%, for
adjusted LIBOR Rate Loans, in each case determined based on, initially the passage of time, and thereafter upon
the Company’s first lien net leverage ratio at the applicable time. The Term Loan Facility requires the Borrower
to pay customary agency fees.
In connection with entering into the Term Loan Facility, the Company terminated all remaining
commitments and repaid all obligations under its Prior Term Loan Facility and Wells Fargo Revolver.
Additionally, we repaid $313 million of the principal under the Prior Term Loan Facility with cash on hand.
Commencing June 30, 2021, the Cash Flow Revolver contains a springing financial covenant when a loan
amount is drawn exceeding 35% of the Cash Flow Revolver. In this instance, the first lien net leverage ratio
shall not exceed 4.75x at quarter end testing period.
As a result of this transaction in accordance with ASC 470, we recognized approximately $4 million in
‘‘Loss on Extinguishment of Debt’’ recorded in the Consolidated Statement of Income for the year ended
December 31, 2021.
Additionally, during the year ended December 31, 2021, the Company made several voluntary prepayments
totaling $398 million on the Term Loan Facility. As a result, we recognized approximately $9 million in ‘‘Loss
on Extinguishment of Debt’’ recorded in the Consolidated Statement of Income for the year ended December 31,
2021.
During the year ended December 31, 2022, we drew down $133 million on our Cash Flow Revolver and
repaid $103 million as of December 31, 2022. As of December 31, 2022, there was $30 million outstanding
revolving credit loans (recorded within ‘‘Short-term debt’’ on the Consolidated Balance Sheet) under the Cash
Flow Revolver and $20 million of issued and undrawn letters of credit under the Cash Flow Revolver.
Additionally, in connection with the sale of the Hawkins Point Plant (refer to Note 18 - Commitments &
Contingencies for further details), in December 2022, a $50 million undrawn letter of credit was issued as a
bi-lateral, stand-alone arrangement. Debt issuance costs associated with the Cash Flow Revolver of $2 million
were included in ‘‘Other long-term assets’’ in the Consolidated Balance Sheets at December 31, 2022 and are
being amortized over the life of the Cash Flow Revolver. The average effective interest rate on the Cash Flow
Revolver was 5.1% for the year ended December 31, 2022.
82
On April 4, 2022, Tronox Finance LLC (the ‘‘Borrower’’), the Borrower’s indirect parent company, Tronox
Holdings plc (the ‘‘Company’’), certain of the Company’s subsidiaries, the incremental term lender party thereto,
and HSBC Bank USA. National Association, as Administrative Agent and Collateral Agent, entered into
Amendment No. 1 to the Amended and Restated First Lien Credit Agreement (the ‘‘Amendment’’). The
Amendment provides the Borrower with a new seven-year incremental term loan facility (the ‘‘2022 Term Loan
Facility’’ and, the loans thereunder, the ‘‘2022 Incremental Term Loans’’) under its credit agreement in an
aggregate initial principal amount of $400 million.
The obligations of the Borrower under the 2022 Term Loan Facility are guaranteed and secured by the same
guarantees and liens under the existing credit agreement of the Term Loan Facility (as discussed above). The
2022 Incremental Term Loans are a separate class of loans under the credit agreement, and if the Borrower elects
to make an optional prepayment under the credit agreement or is required to make a mandatory prepayment
under the credit agreement, the Borrower, may, in each case, select which class or classes of loans to prepay.
The 2022 Incremental Term Loans will amortize in equal quarterly installments in an aggregate annual
amount equal to 1.0% of the original principal amount of the 2022 Incremental Term Loans commencing with
the second full fiscal quarter after the effective date of the 2022 Incremental Term Loan Facility. The final
maturity of the 2022 Incremental Term Loans will occur on the seventh anniversary of the effective date of the
2022 Incremental Term Loan Facility. The 2022 Incremental Term Loan Facility permits amendments thereto
whereby individual lenders may extend the maturity date of their outstanding loans upon the Borrower’s request
without the consent of any other lender, so long as certain conditions are met.
The 2022 Incremental Term Loans shall bear interest, at the Borrower’s option, at either the base or the
SOFR rate, in each case plus an applicable margin. The applicable margin in respect of the 2022 Incremental
Loans is 2.25% per annum, for base rate loans, or 3.25% per annum, for SOFR rate loans. The 2022 Incremental
Term Loans have an interest rate floor of 0.50%. As of December 31, 2022, the applicable margin under the
2022 Term Loan Facility was 3.25%.
The 2022 Incremental Term Loan Facility contains the same negative covenants applicable to the term loans
outstanding under the Existing Credit Agreement immediately prior to the effectiveness of the Amendment,
which covenants, subject to certain limitations, thresholds and exceptions, limit the Company and its restricted
subsidiaries to (among other restrictions): incur indebtedness; grant liens; pay dividends and make subsidiary and
certain other distributions; sell assets; make investments; enter into transactions with affiliates; and make certain
modifications to material documents (including organizational documents).
The proceeds of the 2022 Incremental Term Loans were used on April 4, 2022, along with cash on hand, to
redeem all outstanding 6.5% Senior Secured Notes due 2025 issued by Tronox Incorporated under the Indenture
dated as of May 1, 2020 with Wilmington Trust, National Association, as Trustee and Collateral Agent and to
pay transaction related costs and expenses.
As a result of this transaction, we recognized approximately $21 million, including a call premium of
$18 million, in ‘‘Loss on extinguishment of debt’’ on the Consolidated Statement of Income for the year ended
December 31, 2022.
As of December 31, 2022, the total outstanding principal balance is $397 million, of which $4 million is
recorded within ‘‘Current portion of long-term debt’’ on the Consolidated Balance Sheet.
Senior Notes due 2025
On September 22, 2017, Tronox Finance plc, issued 5.75% senior notes due 2025 for an aggregate principal
amount of $450 million (the ‘‘Senior Notes due 2025’’), which notes were issued under an indenture dated
September 22, 2017 (the ‘‘2025 Indenture’’). The 2025 Indenture and the Senior Notes due 2025 provided among
other things, that the Senior Notes due 2025 were senior unsecured obligations of Tronox Finance plc and were
guaranteed on a senior and unsecured basis by us and certain of our other subsidiaries. The Senior Notes due
2025 were not registered under the Securities Act, and were not offered or sold in the U.S. absent registration or
an applicable exemption from registration requirements. Interest was payable on April 1 and October 1 of each
year beginning on April 1, 2018 until their maturity date of October 1, 2025. The terms of the 2025 Indenture,
among other things, limited, in certain circumstances, the ability of us and certain of our subsidiaries to: incur
secured indebtedness, engage in certain sale-leaseback transactions and merge, consolidate or sell substantially all
of our assets. The terms of the 2025 Indenture also included certain limitations on our non-guarantor subsidiaries
83
incurring indebtedness. During the year ended December 31, 2021, we paid the outstanding balance of
$450 million on the Senior Notes due 2025 as a result of the issuance of the Senior Notes due 2029 as defined
and discussed below.
Senior Notes due 2026
On April 6, 2018, Tronox Incorporated issued 6.5% Senior Notes due 2026 for an aggregate principal
amount of $615 million (‘‘Senior Notes due 2026’’). The 2026 Indenture and the Senior Notes due 2026
provided, among other things, that the Senior Notes due 2026 were senior unsecured obligations of Tronox
Incorporated and were guaranteed on a senior and unsecured basis by us and certain of our other subsidiaries.
The Senior Notes due 2026 were not registered under the Securities Act and were not offered or sold in the U.S.
absent registration or an applicable exemption from registration requirements. Interest was payable on April 15
and October 15 of each year beginning on October 15, 2018 until their maturity date of April 15, 2026. The
terms of the 2026 Indenture, among other things, limited, in certain circumstances, our and certain of our
subsidiaries ability to: incur secured indebtedness; engage in certain sale-leaseback transactions; and merge,
consolidate or sell substantially all of our assets. The terms of the 2026 Indenture also included certain
limitations on our non-guarantor subsidiaries incurring indebtedness. The proceeds of the offering were used to
fund the redemption of our Senior Notes due 2022. During the year ended December 31, 2021, we paid the
outstanding balance of $615 million on the Senior Notes due 2026 as a result of the issuance of the Senior Notes
due 2029 as defined and discussed below.
Senior Notes due 2029
On March 15, 2021, Tronox Incorporated closed an offering of $1,075 million aggregate principal amount of
its 4.625% senior notes due 2029 (the ‘‘Senior Notes due 2029’’). The notes were offered at par and issued under
an indenture dated as of March 15, 2021 among the Company and certain of the Company’s restricted
subsidiaries as guarantors and Wilmington Trust, National Association. The Senior Notes due 2029 provide,
among other thing, that the Senior Notes due 2029 are guaranteed by the Company and certain of the Company’s
restricted subsidiaries, subject to certain exceptions. The Senior Notes due 2029 and related guarantees are the
senior obligations of the Company and the guarantors. The Senior Notes due 2029 have not been registered
under the Securities Act, or any state securities laws, and may not be offered or sold in the United States absent
registration requirements. The terms of the indenture, among other things, limit, in certain circumstances, the
ability of the Company and its restricted subsidiaries to: incur secured indebtedness, incur indebtedness at a
non-guarantor subsidiary, engage in certain sale-leaseback transactions and merge, consolidate or sell
substantially all of their assets. Interest is payable on the Senior Notes due 2029 on March 15 and September 15
of each year beginning on September 15, 2021 until their maturity date of March 15, 2029.
During the year ended December 31, 2021, the Company repaid the outstanding principal balance of
$615 million and $450 million on its Senior Notes due 2026 and its Senior Notes due 2025, respectively. As a
result of this transaction, we recorded $52 million of debt extinguishment costs, including call premiums of
$21 million and $19 million on the Senior Notes due 2026 and Senior Notes due 2025, respectively, in ‘‘Loss on
Extinguishment of Debt’’ on the Consolidated Statement of Income for the year ended December 31, 2021.
6.5% Senior Secured Notes due 2025
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 were originally borrowed during the first quarter of 2020.
During the year ended December 31, 2022, we paid the outstanding balance of $500 million on the 6.5% Senior
Secured Notes due 2025 utilizing the proceeds of the 2022 Term Loan Facility (discussed above), along with
cash on hand. In connection with such redemption, all security interests and liens granted to Wilmington Trust,
National Association, as Trustee and Collateral Agent, were automatically terminated and discharged.
Prior Standard Bank Term Loan Facility
On March 25, 2019, our South African subsidiaries, Tronox KZN Sands Proprietary Limited and Tronox
Mineral Sands Proprietary Limited, entered into the Prior Standard Bank Term Loan Facility with a maturity date
of March 25, 2024. The Term Loan Facility consisted of (i) an aggregate principal amount of R2.6 billion
84
(‘‘Amortizing Loan’’, approximately $153 million at the December 31, 2022 exchange rate), the principal of
which was to be paid back at 5 percent per quarter over the five year term of the loan, and (ii) an aggregate
principal amount of R600 million (‘‘Bullet Loan’’), the principal of which was to be paid back at the maturity
date of the Prior Standard Bank Term Loan Facility. During the third quarter of 2019, we repaid the outstanding
balance on the Bullet Loan.
The Amortizing Loan bore interest at JIBAR plus 260 basis points when net leverage of the South African
subsidiaries was less than 1.5 and JIBAR plus 285 points when net leverage was greater than 1.5.
During the year ended December 31, 2021, we made several voluntary prepayments totaling R1,040 million
(approximately $69 million) on the Prior Standard Bank Term Loan Facility. No prepayment penalties were
required as a result of this principal prepayment. Additionally, during the year ended December 31, 2021, we
repaid the remaining outstanding balance of R390 million (approximately $26 million) of the Prior Standard
Bank Term Loan Facility and entered into an amendment and restatement with Standard Bank as is discussed
below.
Standard Bank Term Loan Facility and Revolving Credit Facility
On October 1, 2021, Tronox Minerals Sands Proprietary Limited, a wholly-owned subsidiary of the
Company, entered into an amendment and restatement of a new credit facility with Standard Bank. The new
credit facility provides the Company with (a) a new five-year term loan facility in an aggregate principal amount
of R1.5 billion (approximately $98 million) (the ‘‘Standard Bank Term Loan Facility’’) and (b) a new three-year
revolving credit facility (the ‘‘Standard Bank Revolving Credit Facility’’) providing initial revolving
commitments of R1.0 billion (approximately $59 million at the December 31, 2022 exchange rate). The maturity
date on the Standard Bank Term Loan Facility and the Standard Bank Revolving Credit Facility is November 11,
2026 and October 1, 2024, respectively. The Standard Bank Term Loan Facility has a delayed draw feature up to
thirty business days from the effective date of the executed credit agreement. Mandatory capital repayments of
R37.5 million (approximately $2 million at the December 31, 2022 exchange rate) are scheduled quarterly with
the first mandatory repayment starting in December 2021.
Both the Standard Bank Term Loan Facility and the Standard Bank Revolving Credit Facility shall bear
interest at an adjusted JIBAR rate plus an applicable margin. The applicable margin on the Standard Bank Term
Loan Facility is 2.35%. The applicable margin on the Standard Bank Revolving Credit Facility is based upon
average credit utilization during any interest period. If the revolving credit facility utilization is less than 33%,
less than 66% but greater than 33%, or greater than 66%, the applicable margin is 2.10%, 2.25%, and 2.40%,
respectively. The Standard Bank Revolving Credit Facility requires the borrower to pay customary agency fees.
Interest is payable on the Standard Bank Term Loan Facility on each of March 31, June 30, September 30 and
December 31, and the final maturity date pursuant to the agreement. Interest is payable on the Standard Bank
Revolving Credit Facility on the last day of the applicable interest period pursuant to the agreement.
Pursuant to the credit agreement, on November 11, 2021, the Company drew down the total outstanding
principal balance of R1.5 billion (approximately $98 million) on the Standard Bank Term Loan Facility. As of
December 31, 2022, the total outstanding principal balance is R1.3 billion (approximately $77 million at the
December 31, 2022 exchange rate), of which R150 million (approximately $9 million at the December 31, 2022
exchange rate) is recorded within ‘‘Current portion of long- term debt’’ on the Consolidated Balance Sheet.
Tikon Loan
We maintained a working capital debt agreement in China (‘‘Tikon Loan’’) that matured in May of 2021.
The Tikon Loan bore interest based on an official lending basis rate per annum as announced and published by
the People’s Bank of China plus a 7% premium. During the year ended December 31, 2021, we repaid the
remaining outstanding principal balance of CNY 111 million (approximately $17 million). No prepayment
penalties were required as a result of these principal prepayments.
Australian Government Loan
We maintain an interest-free loan with the Australian government (‘‘Australian Government Loan’’) that is
subject to renewal every 5 years and is contingent on renewal of our Australind site leases with final maturity in
December 2036. The loan balance due upon maturity is AUD 6 million (approximately $4 million at the
December 31, 2022 exchange rate). At December 31, 2022, the discounted value on the Australian Government
Loan was approximately AUD 2 million (approximately $1 million at the December 31, 2022 exchange rate).
85
MGT Loan
On December 17, 2020, we completed our agreement with Cristal to acquire certain assets co-located at our
Yanbu facility which produce metal grade TiCl4 (‘‘MGT’’) in exchange for a $36 million note payable.
Repayment of the note payable is based on a fixed U.S. dollar per metric ton quantity of MGT delivered by us to
Advanced Metal Industries Cluster and Toho Titanium Metal Co. Ltd (ATTM) over time and therefore the
ultimate maturity date is variable in nature. If ATTM fails to purchase MGT from us under certain contractually
agreed upon conditions, then at our election we may terminate the MGT supply agreement with ATTM and will
no longer owe any amount under the loan agreement with Cristal. We currently estimate the ultimate maturity to
be between approximately five to six years, subject to actual future MGT production levels. The interest rate is
based on the Saudi Arabian Interbank Offered Rate (‘‘SAIBOR’’) plus a premium. As of December 31, 2022, the
outstanding balance of the note payable was $30 million, of which $7 million is expected to be paid within the
next twelve months (recorded within ‘‘Long-term debt due within one year’’ on our Consolidated Balance Sheet).
Refer to Note 22 for further information on the MGT transaction.
Short-term Debt
Cash Flow Revolver
For a description of the Cash Flow Revolver, see details above under ‘‘Prior Term Loan Facility, Term Loan
Facility, Cash Flow Revolver and 2022 Term Loan Facility’’.
Standard Bank Revolving Credit Facility
For a description of the Standard Bank Revolving Credit Facility, see details above under ‘‘Standard Bank
Term Loan Facility and Revolving Credit Facility’’.
Emirates Revolver
We maintain a revolving credit facility with Emirates NBD PJSC. In March 2022, the Company entered into
an amendment to extend the maturity date of the Emirates Revolver from March 31, 2022 to March 31, 2023.
Under the Emirates Revolver, we have the ability to borrow up to approximately $60 million. The revolver is
secured by inventory and trade receivables of Tronox Pigment UK Ltd. Under the terms of the revolver, for U.S.
dollar borrowings the interest rate is LIBOR plus 2.25% while the interest rate for Euro borrowings is Euribor
plus 2.25%. There were no borrowings outstanding under this revolver at December 31, 2022.
SABB Credit Facility
On October 16, 2019, our KSA subsidiary entered into a short-term working capital facility with the Saudi
British Bank (‘‘SABB Facility’’) for an amount up to SAR 70 million (approximately $19 million). The SABB
Facility bears interest at the Saudi Inter Bank Offered Rate plus 180 basis points on outstanding balances. In
March 2020, the Company borrowed SAR 50 million (or approximately $13 million) under the SABB Facility
and subsequently repaid the outstanding balances. There is no borrowing outstanding under this facility at
December 31, 2022. In December 2022, the Company extended the maturity date of the SABB Credit Facility
from November 30, 2022 to November 30, 2023.
Itaù Unibanco S.A. Credit Facility
On November 1, 2022, our Brazilian subsidiary entered into a working capital facility with Itaù Unibanco
S.A. in Brazil for an amount up to 30 million BRL (approximately $6 million at the December 31, 2022
exchange rate). There is no maturity date under this facility until written notice is given. The facility bears
interest at the Bolsa do Basil reference rate on outstanding balances. There is no borrowings outstanding under
this facility at December 31, 2022.
In January and February 2023, we drew down an aggregate amount of approximately $118 million on
several of our short- term facilities.
Insurance premium financing
In August 2022, the Company entered into a $21 million insurance premium financing agreement with a
third-party financing company. The balance will be repaid in monthly installments over 10 months at a 5% fixed
annual interest rate. As of December 31, 2022, the financing balance was $10 million and is recorded in
‘‘Short-term debt’’ in the Consolidated Balance Sheet.
86
Debt Covenants
At December 31, 2022, we are in compliance with all financial covenants in our debt facilities.
Interest and Debt Expense, Net
Interest and debt expense, net in the Consolidated Statements of Income consisted of the following:
Year Ended December 31,
2021
2020
2022
Interest on debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization of deferred debt issuance costs and discounts on debt . . . . . . . . . . . .
Capitalized interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest on capital leases and letters of credit and commitments . . . . . . . . . . . . . . .
Total interest and debt expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$132
8
(17)
2
$125
$148
11
(7)
5
$157
$174
10
(2)
7
$189
In connection with obtaining debt, we incurred debt issuance costs, which are being amortized through the
respective maturity dates using the effective interest method for our long-term debt and on a straight-line basis
for our Cash Flow Revolver. At December 31, 2022 and December 31, 2021, we had deferred debt issuance
costs of $2 million and $2 million, respectively, related to the Cash Flow Revolver, which is recorded in ‘‘Other
long-term assets’’ in the Consolidated Balance Sheets. At December 31, 2022 and December 31, 2021, we had
debt discount of $8 million and $5 million, respectively, and debt issuance costs of $33 million and $36 million,
respectively, primarily related to our term loans and senior notes, which were recorded as a direct reduction of
the carrying value of the long-term debt in the Consolidated Balance Sheets.
14. Derivative Financial Instruments
Derivatives recorded on the Consolidated Balance Sheet:
The following table is a summary of the fair value of derivatives outstanding at December 31, 2022 and
2021:
Fair Value
December 31, 2022
December 31, 2021
Assets(a)
Accrued
Liabilities
Assets(a)
Accrued
Liabilities
Derivatives Designated as Cash Flow Hedges
Currency Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest Rate Swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Natural Gas Hedges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Derivatives Not Designated as Cash Flow Hedges
Currency Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$—
$30
$ 1
$31
$ 1
$32
$—
$—
$ 2
$ 2
$—
$ 2
$ 3
$—
$ 1
$ 4
$—
$ 4
$ 1
$25
$—
$26
$—
$26
(a) At December 31, 2022 and 2021, current assets of $32 million and $4 million, respectively, are recorded in prepaid and other current
assets on the Consolidated Balance Sheet.
87
Derivatives’ Impact on the Consolidated Statement of Income
The following table summarizes the impact of the Company’s derivatives on the Consolidated Statement of
Income:
Amount of Pre-Tax Gain (Loss) Recognized in Earnings
Cost of
Goods
Revenue
Sold
Year Ended December 31, 2022 Year Ended December 31, 2021 Year Ended December 31, 2020
Cost of
Goods
Sold
Cost of
Goods
Sold
Revenue
Revenue
Other
(Expense)
Income,
net
Other
(Expense)
Income,
net
Other
(Expense)
Income,
net
Derivatives Not Designated as Hedging Instruments
$ 1
Currency Contracts . . . . . . . .
Derivatives Designated as Hedging Instruments
Currency Contracts . . . . . . . .
Natural Gas . . . . . . . . . . . . . .
$13
$ 5
$—
$—
$ 4
$—
$—
$—
Total Derivatives . . . . . . . . .
$ 4
$18
$ 1
Interest Rate Risk
$—
$—
$ (3)
$—
$ (3)
$35
$ 3
$38
$ 1
$—
$—
$ 1
$—
$—
$ (7)
$—
$ (7)
$ 3
$ (1)
$ 2
$ 4
$—
$—
$ 4
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. There was no
impact associated with the New Term Loan Facility as the hedge remained highly effective.
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. For the year ended December 31, 2022, 2021 and 2020, the amounts recorded in interest expense
related to the interest-rate swap agreements were $4 million, $16 million and $10 million, respectively. At
December 31, 2022 and December 31, 2021, the net unrealized gain was $30 million and the unrealized loss was
$25 million, respectively, and was recorded in ‘‘Accumulated other comprehensive loss’’ on the Consolidated
Balance Sheet.
Foreign Currency Risk
From time to time, we enter 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 (expense) income, net when the transactions are
no longer probable of occurring.
As of December 31, 2022, we had no outstanding amounts to reduce the exposure of our Australian
subsidiaries’ cost of sales to fluctuations in currency rates or to reduce the exposure of our South African
subsidiaries’ third party sales to fluctuations in currency rates. At December 31, 2022, there was an unrealized
net loss of $4 million recorded in ‘‘Accumulated other comprehensive loss’’ on the Consolidated Balance Sheet,
which is expected to be recognized in earnings over the next twelve months. At December 31, 2021, there was
an unrealized net gain of $15 million recorded in ‘‘Accumulated other comprehensive loss’’ on the Consolidated
Balance Sheet.
We enter into foreign currency contracts to reduce exposure of our subsidiaries’ balance sheet accounts not
denominated in our subsidiaries’ functional currency to fluctuations in foreign currency exchange rates. For
88
accounting purposes, these foreign currency contracts are not considered hedges. The change in fair value
associated with these contracts is recorded in ‘‘Other (expense) income, net’’ within the Consolidated Statement
of Income and partially offsets the change in value of third party and intercompany-related receivables not
denominated in the functional currency of the subsidiary. At December 31, 2022, there was (i) 1.2 billion South
African Rand (or approximately $68 million at the December 31, 2022 exchange rate), (ii) 197 million Australian
dollars (or approximately $135 million at the December 31, 2022 exchange rate), (iii) 20 million Pound Sterling
(or approximately $24 million at the December 31, 2022 exchange rate and (iv) 44 million Euro (or
approximately $48 million at the December 31, 2022 exchange rate) of notional amount of outstanding foreign
currency contracts.
15. Fair Value Measurement
For financial instruments that are subsequently measured at fair value, the fair value measurement is
grouped into levels. See Note 2.
Our debt is recorded at historical amounts. The following table presents the fair value of our debt and
derivative contracts at both December 31, 2022 and December 31, 2021:
Term Loan Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2022 Term Loan Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Standard Bank Term Loan Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Senior Notes due 2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.5% Senior Secured Notes due 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australian Government Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MGT Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest rate swaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Natural gas hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2022
December 31,
2021
Asset
$—
—
—
—
—
—
—
30
1
1
Liability
$876
388
77
893
—
1
30
—
2
—
Asset
$—
—
—
—
—
—
—
—
1
3
Liability
$ 895
—
92
1,071
526
1
33
25
—
1
We determined the fair value of the Term Loan Facility, the 2022 Term Loan Facility, the Senior Notes due
2029, and the 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 utilizing
transactions in the listed markets for similar liabilities, which under the fair value hierarchy is a Level 2 input.
The fair value of the Australian Government Loan and MGT Loan is based on the contracted amount which is a
Level 2 input.
We determined the fair value of the foreign currency contracts and 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 and accounts payable
approximate fair value due to the short-term nature of these items.
16. Leases
Lease expense for the year ended December 31, 2022, 2021 and 2020 was comprised of the following:
Operating lease expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended December 31,
2021
$ 47
2020
$48
2022
$39
Finance lease expense:
Amortization of right-of-use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest on lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Short term lease expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Variable lease expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total lease expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
4
35
14
$96
1
2
30
23
$103
$ 1
$ 2
$26
$22
$99
89
The table below summarizes lease expense for the year ended December 31, 2022, 2021 and 2020 recorded
in the specific line items in our Consolidated Statements of Income:
Year Ended December 31,
2021
2020
2022
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$92
4
$96
$ 98
5
$103
$91
8
$99
The weighted-average remaining lease term in years and weighted-average discount rates at December 31,
2022 and 2021 were as follows:
December 31,
2022
December 31,
2021
Weighted-average remaining lease term:
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11.6
8.8
8.7
8.8
Weighted-average discount rate:
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.8%
12.2%
7.4%
14.1%
The maturity analysis for operating leases and finance leases at December 31, 2022 were as follows:
Operating
Leases
Finance
Leases
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: imputed interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Present value of lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
32
27
19
16
14
126
234
(103)
$ 131
10
9
8
8
8
33
76
(29)
$ 47
Additional information relating to cash flows and ROU assets for the year ended December 31, 2022, 2021
and 2020 is as follows:
December 31,
2022
December 31,
2021
December 31,
2020
Cash paid for amounts included in the measurement of lease
liabilities:
Operating cash flows used for operating leases . . . . . . . . . . . . . . . . . . .
Operating cash flows used for finance leases . . . . . . . . . . . . . . . . . . . . .
Financing cash flows used for finance leases . . . . . . . . . . . . . . . . . . . . .
$39
$ 4
$ 3
$51
$ 2
$ 1
$55
$ 2
$ 1
Additional information relating to ROU assets for the year ended December 31, 2022 and 2021 is as
follows:
ROU assets obtained in exchange for lease obligations:
Operating leases obtained in the normal course of business. . . . . . . . . . . . . . . . . . . . . . . .
Finance leases obtained in the normal course of business . . . . . . . . . . . . . . . . . . . . . . . . .
$83
$37
$49
$ 2
Year Ended December 31,
2022
2021
90
17. Asset Retirement Obligations
Asset retirement obligations consist primarily of rehabilitation and restoration costs, landfill capping costs,
decommissioning costs, and closure and post-closure costs. Activity related to asset retirement obligations was as
follows:
Balance, January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accretion expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Remeasurement/translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Changes in estimates, including cost and timing of cash flows . . . . . . . . . . . . . . . .
Settlements/payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other acquisition and divestiture related . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset retirement obligations were classified as follows:
Current portion included in ‘‘Accrued liabilities’’ . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncurrent portion included in ‘‘Asset retirement obligations’’ . . . . . . . . . . . . . . . .
Asset retirement obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Year Ended December 31,
2022
$149
3
12
(7)
7
(3)
—
$161
2021
$166
5
12
(9)
(15)
(10)
—
$149
December 31,
2022
2021
$
8
153
$161
$ 10
139
$149
We used the following assumptions in determining asset retirement obligations at December 31, 2022:
inflation rates between 1.5% − 4.3% per year; credit adjusted risk-free interest rates between 5.8% − 20.6%; the
life of mines between 1−24 years and the useful life of assets between 6-31 years.
Environmental Rehabilitation Trust
In accordance with applicable regulations, we have established an environmental rehabilitation trust for the
prospecting and mining operations in South Africa, which receives, holds, and invests funds for the rehabilitation
or management of asset retirement obligations. The trustees of the fund are appointed by us and consist of
sufficiently qualified employees capable of fulfilling their fiduciary duties. At December 31, 2022 and 2021, the
environmental rehabilitation trust assets were $12 million and $12 million, respectively, which were recorded in
‘‘Other long-term assets’’ in the Consolidated Balance Sheets.
18. Commitments and Contingencies
Purchase and Capital Commitments — At December 31, 2022, purchase commitments were $348 million
for 2023, $168 million for 2024, $149 million for 2025, $152 million for 2026, $155 million for 2027, and
$1,594 million thereafter.
Letters of Credit — At December 31, 2022, we had outstanding letters of credit and bank guarantees of
$109 million, of which $70 million were letters of credit and $39 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:
91
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. On December 21, 2022, we sold the Hawkins Point Plant to the Maryland Port Administration (‘‘MPA’’), a
state agency controlled by the Maryland Department of Transportation. Pursuant to the terms of the transaction,
MPA became the lead party in developing and implementing appropriate measures to address, treat, control, and
mitigate the environmental conditions at the property under the regulatory oversight of the Maryland Department
of the Environment (‘‘MPE’’). Under MPA ownership, the Hawkins Point Plant will be utilized for storage and
beneficial reuse of dredged material from the Port of Baltimore. In exchange for transferring ownership of the
site to MPA, Tronox has agreed to make scheduled, annual payments to MPA which together with scheduled,
annual contributions from MPA will be used to remediate the property. The sale of the property to MPA did not
have a material impact to the Consolidated Statement of Income. As of December 31, 2022, we have a provision
of $42 million included in ‘‘Environmental liabilities’’ in our Consolidated Balance Sheet for the Hawkins Point
Plant consistent with the accounting policy described above.
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 Venator’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. On April 6, 2022, the Judge presiding over the case in the
Superior Court of the State of Delaware delivered a directed verdict in favor of Venator without allowing the jury
to deliberate. The Company determined not to appeal the Judge’s verdict, and as such, on April 18, 2022, the
Company and Venator entered into a settlement agreement whereby the Company paid $85 million, inclusive of
interest, on April 25, 2022. As a result, we recorded the charge within ‘‘Venator settlement’’ on the Consolidated
Statement of Income for the year ended December 31, 2022.
Western Australia Stamp Duty Matter. In May 2018, we lodged a pre-transaction determination request for a
stamp duty exemption with the Western Australia Office of State Revenue (the ‘‘WA OSR’’) in connection with
our re-domicile transaction (the ‘‘Re-Domicile Transaction’’) which was subsequently granted by the WA OSR in
June 2018 on a preliminary basis.
Immediately following the consummation of the Re-Domicile Transaction, we filed a confirmation request
for the stamp duty exemption with the WA OSR. Following this confirmation request, we exchanged numerous
communications with the WA OSR addressing questions raised and stating our position. In July 2021, the WA
OSR informed us that they have reviewed their technical position on the applicability of the stamp duty
exemption and have determined that such an exemption is disallowed. On April 8, 2022, the Company lodged an
appeal of the WA OSR’s decision with the Western Australia State Administrative Tribunal. The Tribunal hearing
is currently expected to take place in the second half of 2023. While the Company believes it complied with the
92
rules relevant to obtaining an exemption from stamp duties in connection with the Re-Domicile Transaction, if an
unfavorable ruling is received from the Western Australia State Administrative Tribunal and Tronox is not able to
successfully appeal such ruling, the stamp duty payable on the Re-Domicile Transaction could result in a material
change to our financial statement.
19. Accumulated Other Comprehensive Loss Attributable to Tronox Holdings plc and Other Equity Items
The tables below present changes in accumulated other comprehensive loss by component for 2022, 2021
and 2020.
Cumulative
Translation
Adjustment
Pension
Liability
Adjustment
Unrealized
Gains (losses)
on Derivatives
$(503)
12
$(104)
(20)
$ 1
(4)
Balance, January 1, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified from accumulated other comprehensive
loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive (loss) income . . . . . . . . . . . . . . . . . . . . . . . .
Acquisition of noncontrolling interest . . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified from accumulated other comprehensive
loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other comprehensive (loss) income . . . . . . . . . . . . . . . . . . . . . . . .
Amounts reclassified from accumulated other comprehensive
—
(491)
(103)
(34)
—
$(628)
(82)
4
(120)
16
—
4
$(100)
5
loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
17
Balance, December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$(710)
$ (78)
Total
$(606)
(12)
8
(610)
(66)
(34)
(28)
$(738)
(24)
(6)
$(768)
4
1
21
—
(32)
$(10)
53
(23)
$ 20
Repurchase of Common Stock
On November 9, 2021, the Company’s Board of Directors authorized the repurchase of up to $300 million
of the Company’s stock through February 2024. During the year ended December 31, 2022, we purchased a total
of 2,843,789 shares on the open market at an average price of $17.38 per share and at an aggregate cost of
approximately $50 million, including sales commissions, transfer taxes and fees. Upon repurchase of the shares
by the Company, the shares were cancelled. Under the authorization from our Board of Directors, we have
approximately $251 million available for additional repurchases through February 2024.
20. Share-based Compensation
Share-based compensation expense consisted of the following:
Year Ended December 31,
2021
2020
2022
Total share-based compensation expense from restricted share units . . . . . . . . . . . .
$26
$31
$30
The stock compensation expense for the year ended December 31, 2021 is inclusive of a $3 million true up
of expense due to the 2020 and 2021 performance grants as well as the acceleration of $2 million of stock
compensation expense associated with the retirement agreement entered into with the former CEO on March 18,
2021.
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. 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
93
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. The maximum number of shares which were initially
subjected to awards (inclusive of incentive options) was 20,781,225 ordinary shares and was increased by
8,000,000 on the affirmative vote of our shareholders on June 24, 2020.
Restricted Share Units (‘‘RSUs’’)
On an annual basis, the Company grants RSUs which have time and/or performance conditions. Both the
time-based awards and the performance-based awards are classified as equity awards.
2022 Grants - The Company granted both time-based and performance-based awards to certain members of
management and to members of the Board. A total of 582,136 of time-based awards were granted to management
which will vest ratably over a three-year period ending March 5, 2025. A total of 68,296 of time-based awards
were granted to members of the Board of which will vest in May 2023. A total of 533,416 of performance-based
awards were granted, of which 266,708 of the awards vest based on a relative Total Shareholder Return (‘‘TSR’’)
calculation and 266,708 of the awards vest based on certain performance metrics of the Company. The non-TSR
performance-based awards vest on March 5, 2025 based on the achievement against the target average company
performance of three separate performance periods, commencing on January 1 of each 2022, 2023, and 2024 and
ending on December 31 of each 2022, 2023 and 2024, for which, for each performance period, the performance
metric is an average annual return on invested capital (ROIC) improvement versus 2021 ROIC. 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 $34.41.
Similar TSR awards were granted during 2021 and 2020 with grant date fair values of $29.07 and $10.00,
respectively, which were calculated utilizing a Monte Carlo simulation. The following weighted-average
assumptions were utilized to value the grants in 2022, 2021 and 2020:
Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected historical volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk free interest rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expected life (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The following table presents a summary of activity for RSUs for 2022:
2022
2021
2020
2.13%
1.56%
3.22%
68.00% 71.10% 58.30%
1.42%
0.17%
3.06%
3
3
3
Outstanding, January 1, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number
of Shares
5,114,945
2,313,346
(3,428,058)
(209,829)
Outstanding, December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,790,404
Expected to vest, December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,005,712
Weighted
Average
Grant Date
Fair Value
$13.12
19.47
12.92
18.72
$17.01
$14.26
The 2019 performance-based RSUs vested above target in 2022 and resulted in 1,115,249 additional RSU
shares being granted and vested immediately. At December 31, 2022, there was $27 million of unrecognized
compensation expense related to nonvested RSUs, adjusted for estimated forfeitures, which is expected to be
recognized over a weighted-average period of 1.6 years. The weighted-average grant-date fair value of RSUs
granted during 2022, 2021 and 2020 was $19.47 per unit, $20.91 per unit, and $8.89 per unit, respectively. The
total fair value of RSUs that vested during 2022, 2021 and 2020 was $44 million, $41 million and $30 million,
respectively.
94
Options
We did not issue any options during 2022, 2021 and 2020 and all our options outstanding are fully vested at
December 31, 2022. The following table presents a summary of option activity for 2022:
Weighted
Outstanding, January 1, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Number of
Options
756,327
(13,881)
(3,842)
(223,512)
Outstanding and Exercisable, December 31, 2022 . . . . . . . . . . . .
515,092
Weighted
Average
Exercise Price
Average
Contractual
Life (years)
Intrinsic
Value
$22.13
19.59
20.30
25.95
$20.55
1.3
$ 2
0.62
$—
The aggregate intrinsic values in the table represent the total pre-tax intrinsic value (the difference between
our share price at the indicated dates and the options’ exercise price, multiplied by the number of in-the-money
options) that would have been received by the option holders had all option holders exercised their in-the-money
options at the end of the year. The amount will change based on the fair market value of our stock. During 2022
and 2021, there were 13,881 and 424,832 options exercised, respectively, with a total intrinsic value of less than
$1 million and $2 million, respectively. We issue new shares upon the exercise of options. During 2022 and
2021, we received less than $1 million and $8 million, respectively, in cash for the exercise of stock options.
There were no options exercised during 2020 and consequently there was no related intrinsic value. At
December 31, 2022, 2021 and 2020, there was no unrecognized compensation expense related to options.
21. Pension and Other Postretirement Healthcare Benefits
The following provides information regarding our U.S. and foreign plans:
U.S. Plans
Pension and Postretirement Healthcare Plans — Tronox has one main U.S. defined benefit plan: the U.S.
Qualified Plan. Prior to December 2020, the Company also had the U.S. Pension Plan (which was acquired as
part of the Cristal acquisition). In December 2020, the U.S. Pension Plan was frozen and merged into the U.S.
Qualified Plan. The U.S. Qualified Plan is a funded noncontributory qualified benefit plan which is in accordance
with the Employee Retirement Income Security Act of 1974 (‘‘ERISA’’) and the Internal Revenue Code. We
made contributions into funds managed by a third party, and those funds are held exclusively for the benefit of
the plan participants. Benefits under the U.S. Qualified Plan were generally calculated based on years of service
and final average pay. The U.S. Qualified Plan was frozen and closed to new participants on June 1, 2009. In
October 2022, the Company entered into an irrevocable arrangement with an insurance provider to settle certain
lower dollar valued accounts within its frozen U.S Qualified Plan to reduce PBGC premiums. As a result of this
arrangement, the Company recorded a non-cash pension settlement charge of approximately $20 million during
the fourth quarter of 2022. We also maintain one postretirement healthcare plan - the U.S. retiree welfare plan.
International Plans
Pension Plans — Tronox has international defined benefit commitments primarily in the United Kingdom
(‘‘U.K. DB Scheme’’) and Saudi Arabia. The U.K. DB Scheme is a funded qualified defined benefit plan in the
United Kingdom, which is frozen with no additional benefits accruing to the participants. Benefits under the
U.K. DB Scheme are generally calculated based on years of credit service and final compensation when benefits
ceased to accrue as defined under the plan provisions. We also maintain a Saudi Arabia Cristal End of Service
Benefit plan which provides end of service benefits to qualifying participants. End of service benefits are based
on years of service and the reasons for which a participant’s services to the Company are terminated.
Multiemployer Pension Plan — In prior periods, we maintained a defined benefit plan in the Netherlands
(the ‘‘Netherlands Plan’’) to provide defined pension benefits to qualifying employees of Tronox Pigments
(Holland) B.V. and its related companies. During 2014, the Netherlands Plan was replaced with a multiemployer
95
plan, the Netherlands Contribution Plan (the ‘‘CDC Plan’’) effective January 1, 2015. Under the CDC Plan,
employees earn benefits based on their pensionable salaries each year determined using a career average benefit
formula. The collective bargaining agreement between us and the participants require us to contribute 20.4% of
the participants’ pensionable salaries into a pooled fund administered by the industry-wide PGB. The pensionable
salary is the annual income of employees subject to a cap, which is adjusted each year to reflect the current
requirements of the Netherlands’ Wages and Salaries Tax Act of 1964. Our obligation under this plan is limited
to the fixed percentage contribution we make each year. The employees are entitled to any returns generated
from the investment activities of the fund.
The following table outlines the details of our participation in the CDC Plan for the year ended
December 31, 2022. The CDC disclosures provided herein are based on the fund’s 2021 annual report, which is
the most recently available public information.
Based on the total plan assets and accumulated benefit obligation information in the plan’s annual report, the
zone status was green as of December 31, 2021. A green zone status indicates that the plan was at least
80 percent funded. The ‘‘FIP/RP Status Pending/Implemented’’ column indicates whether a financial
improvement plan (FIP) or a rehabilitation plan (RP) is either pending or has been implemented. As of
December 31, 2022, we are not aware of any financial improvement or rehabilitation plan being implemented or
pending. The last column lists the expiration date of the collective-bargaining agreement to which the plan is
subject.
Pension Protection Act Zone Status
Tronox Contributions
Pension
Fund
EIN/Pension
Plan
Number
PGB . . . . . . . .
NA
2022
N/A
2021
Green
FIP/RP
Pending/
Implemented
No
2022
$5
2021
$5
Expiration
date of
Collective-
Bargaining
Agreement
Surcharge
Imposed
No
12/31/2024
On the basis of the information available in the CDC Plan 2021 annual report, our contribution does not
constitute more than 5 percent of the total contribution to the plan by all participants. During 2022, the fund did
not impose any surcharge on us.
Postretirement Healthcare Plans — We also maintain postretirement healthcare plans in South Africa (the
‘‘South African Plan’’) and Brazil (the ‘‘Brazil Medical Plan’’). The South African Plan provides medical and
dental benefits to certain South African employees, retired employees and their registered dependents. The South
African Plan provides benefits as follows: (i) members employed before March 1, 1994 receive 100%
post-retirement and death-in-service benefits; (ii) members employed on or after March 1, 1994 but before
January 1, 2002 receive 2% per year of completed service subject to a maximum of 50% post- retirement and
death-in-service benefits; and, (iii) members employed on or after January 1, 2002 receive no post-retirement and
death-in-service benefits. The Brazil Medical Plan provides post-employment medical benefits to employees who
contributed to the medical plan while employed. Retirees receiving a benefit under the plan are required to pay a
contribution that varies based on the coverage level elected.
96
Pension and Postretirement Benefit Costs / Obligations
Benefit Obligations and Funded Status — The following provides a reconciliation of beginning and ending
benefit obligations, beginning and ending plan assets, funded status, and balance sheet classification of our U.S.
and international pension plans and other post-retirement benefit plans (‘‘OPEB’’) as of and for the years ended
December 31, 2022 and 2021. The benefit obligations and plan assets associated with our principal benefit plans
are measured on December 31.
Pensions
December 31
Other Post Retirement Benefit Plans
December 31
2022
International US
US
2021
International US International US International
2022
2021
Change in benefit obligations:
Benefit obligation, beginning of year . . . $369
Service cost . . . . . . . . . . . . . . . . . . . . . . —
10
Interest cost . . . . . . . . . . . . . . . . . . . . . .
(77)
Net actuarial (gains) losses. . . . . . . . . .
Curtailments . . . . . . . . . . . . . . . . . . . . . —
Settlements . . . . . . . . . . . . . . . . . . . . . .
(81)
Plan amendments(1). . . . . . . . . . . . . . . . —
Foreign currency rate changes . . . . . . . —
(22)
Benefits paid . . . . . . . . . . . . . . . . . . . . .
Benefit obligation, end of year(2). . . . . . .
199
Change in plan assets:
Fair value of plan assets, beginning . . . .
337
of year . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . .
(63)
Employer contributions . . . . . . . . . . . . —
Benefits paid . . . . . . . . . . . . . . . . . . . . .
(22)
Foreign currency rate changes . . . . . . . —
(72)
Settlements . . . . . . . . . . . . . . . . . . . . . .
Fair value of plan assets, end of year . . .
180
Net underfunded status of plans. . . . . . . . $ (19)
Classification of amounts recognized in
the Consolidated Balance Sheets:
$234
4
4
(61)
—
—
—
(17)
(10)
154
183
(53)
4
(10)
(18)
—
106
$ (48)
$399
—
10
(10)
—
—
—
—
(30)
369
344
23
—
(30)
—
—
337
$ (32)
$252
4
4
(10)
—
—
—
(2)
(14)
234
195
(3)
6
(14)
(1)
—
183
$ (51)
$ 2
—
—
(1)
—
—
—
—
—
1
—
—
—
—
—
—
—
$ (1)
$ 16
1
2
(1)
—
—
—
—
(1)
17
—
—
1
(1)
—
—
—
$(17)
$ 2
—
—
—
—
—
—
—
—
2
—
—
—
—
—
—
—
$ (2)
$ 23
1
2
(3)
—
—
(4)
(2)
(1)
16
—
—
1
(1)
—
—
—
$(16)
Other long-term assets . . . . . . . . . . . . . . . $ — $ 10
Accrued liabilities . . . . . . . . . . . . . . . . . . . —
(6)
Pension and postretirement healthcare
$ — $ 20
(4)
—
$— $ — $— $ —
—
(1)
—
—
benefits . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . .
(19)
(19)
(52)
(58)
(32)
(32)
(67)
(71)
(1)
(1)
(17)
(17)
(1)
(2)
(16)
(16)
Accumulated other comprehensive
55
(income) loss. . . . . . . . . . . . . . . . . . . . .
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 36
4
$ (44)
81
$ 49
10
$ (41)
—
$ (1)
2
$(15)
—
$ (2)
3
$(13)
(1)
(2)
Relates to a plan amendment entered into during 2021 related to the Brazil Medical Plan.
Since the benefits under the U.S Qualified Plan and the U.K. DB Scheme are frozen, the projected benefit obligation and accumulated
benefit obligation are the same.
Contributions
At a minimum, Tronox contributes to its pension plans to comply with local regulatory requirements (e.g.,
ERISA in the United States). Discretionary contributions in excess of the local minimum requirements are made
based on many factors, including long-term projections of the plans’ funded status, the economic environment,
potential risk of overfunding, pension insurance costs and alternative uses of the cash. Changes to these factors
can impact the timing of discretionary contributions from year to year. Pension contributions for its US and
international plans were approximately $6 million in 2022 and are currently expected to be approximately
$8 million in 2023.
97
The following table provides information for pension plans where the accumulated benefit obligation
exceeds the fair value of the plan assets:
Projected benefit obligation (PBO). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated benefit obligation (ABO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pensions
2022
International
$58
$39
$—
US
$199
$199
$180
Expected Benefit Payments — The following table shows the expected cash benefit payments for the next
five years and in the aggregate for the years 2028 through 2032:
2023
2024
2025
2026
2027
2028-2032
Pensions - US . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Pensions - International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Post Retirement Benefit Plans - US . . . . . . . . . . . . . . . . . . . . . . .
Other Post Retirement Benefit Plans - International. . . . . . . . . . . . . . . .
$21
$10
$18
$19
$25
$10
$10
$12
$— $— $— $— $—
$ 1
$— $— $ 1
$19
$10
$ 1
$80
$49
$ 1
$ 7
Retirement and Postretirement Healthcare Expense — The table below presents the components of net
periodic cost associated with the U.S. and foreign plans recognized in the Consolidated Statements of Income for
2022, 2021, and 2020:
Pensions
Year Ended December 31,
2021
2022
2020
Other Postretirement Benefit Plans
Year Ended December 31,
2021
2020
2022
Net periodic cost:
$ 5
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest cost(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
Expected return on plan assets(1) . . . . . . . . . . . . . . . . . . .
(24)
Net amortization of actuarial loss(1) . . . . . . . . . . . . . . . . .
4
Settlement losses (gains)(1) . . . . . . . . . . . . . . . . . . . . . . . .
20
Curtailment (gains)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
$ 19
Total net periodic cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 4
14
(26)
5
—
—
$ 5
17
(22)
4
—
(2)
$ (3)
$ 2
$—
2
—
—
—
—
$ 2
$ 1
2
—
1
—
—
$ 4
$—
1
—
—
—
—
$ 1
(1)
Recorded in Other (expense) income, net in the Consolidated Statement of Income.
Assumptions —
The following weighted average assumptions were used to determine net periodic cost:
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . .
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . .
Expected return on plan assets . . . . . . . . . . .
2022
International
1.91%
2.50%
US
2.97%
6.80%
2022
International
10.29%
N/A
US
2.83%
N/A
Pension
2021
International
1.47%
2.50%
US
2.60%
6.70%
OPEB
2021
International
10.19%
N/A
US
2.59%
N/A
2020
International
1.98%
2.50%
US
3.39%
6.03%
2020
International
8.72%
N/A
US
3.36%
N/A
98
The following weighted average assumptions were used in estimating the actuarial present value of benefit
obligations:
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . . . . . . . .
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . .
Rate of compensation increase . . . . . . . . . . .
2022
International
US
Pensions
2021
International
4.70%
4.72%
2.97%
N/A
1.87%
4.68%
US
5.70%
N/A
2020
International
1.45%
4.65%
US
2.60%
3.00%
2022
International
11.10%
N/A
US
5.62%
N/A
OPEB
2021
International
10.33%
N/A
US
2.83%
N/A
2020
International
9.51%
N/A
US
2.59%
N/A
For the U.S. Qualified Plan, at both December 31, 2022 and December 31, 2021, the mortality assumption
was determined using the Society of Actuaries’ the generational projection scale (i.e. MP-2021) and base table
(i.e. Pri-2012).
Expected Return on Plan Assets — In forming the assumption of the U.S. and international long-term rate
of return on plan assets, we considered the expected earnings on funds already invested, earnings on
contributions expected to be received in the current year, and earnings on reinvested returns. The long-term rate
of return estimation methodology for the Company’s pension plans is based on a capital asset pricing model
using historical data and a forecasted earnings model. An expected return on plan assets analysis is performed
which incorporates the current portfolio allocation, historical asset-class returns, and an assessment of expected
future performance using asset-class risk factors.
Discount Rate — The 2022 and 2021 rates were selected based on the results of a cash flow matching
analysis, which projected the expected cash flows of the plans using a yield curves model developed from a
universe of Aa-graded U.S. currency corporate bonds (obtained from Bloomberg) with BVAL scores of 6 or
greater.
Plan Assets — The investments of the U.S. and International pension plans are managed to meet the future
expected benefit liabilities of the plan over the long term by investing in diversified portfolios consistent with
prudent diversification and historical and expected capital market returns. Tronox’s U.S. and international pension
plans’ weighted-average asset allocations at December 31, 2022 and 2021, and the target asset allocation ranges,
by major asset category, are as follows:
December 31,
2022
2021
US
International
US
International
Actual
Target
Actual
Target
Actual
Target
Actual
Target
Equity securities . . . . . . . . . . . . . . . . . . . . . .
Debt securities . . . . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49%
46
1
4
46% —% —%
37
46
—
—
63
8
37
—
63
49%
46
1
4
49% —% —%
43
48
—
—
57
3
43
—
57
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100% 100% 100% 100% 100% 100% 100% 100%
99
The fair values of pension investments as of December 31, 2022 are summarized below:
Fair Value Measurement at December 31, 2022 Using:
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Asset category:
Equities securities:
Global equity securities. . . . . . . . . . . . . . . . . . . . . . . . . . .
Global commingled equity funds . . . . . . . . . . . . . . . . . . .
Debt securities:
US government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government bonds . . . . . . . . . . . . . . . . . . . . . . . .
US corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . .
Real Estate:
$ 53(1)
35(2)
48(3)
19(3)
—
—
Property/ real estate fund . . . . . . . . . . . . . . . . . . . . . . . . .
—
Other:
Insurance contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash & cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . .
—
11(6)
Total at fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$166
$—
—
—
—
34(4)
22(4)
1(5)
—
—
$57
Total
$ 53
35
48
19
34
22
1
63
11
$—
—
—
—
—
—
—
63(7)
—
$63
$286
(1)
For global equity securities, this category is comprised of shares of common stock in both U.S. and international companies from a
diverse set of industries and size. Common stock is valuated at the closing market price reported on a U.S. or international exchange
where the security is actively traded. Equity securities are classified within level 1 of the fair value hierarchy.
(2) Global commingled equity funds are comprised of managed funds that invest in common stock of both U.S. and international
companies shares from a diverse set of industries and size. Common stock are valued at the closing market price reported on a U.S. or
international exchange where the security is actively traded. These funds are classified within level 1 of the fair value hierarchy.
(3)
(4)
(5)
(6)
(7)
For US and foreign government bonds, this category includes U.S. treasuries, U.S. federal agency obligations and international
government debt. The fair value of these investments are based on observable quoted prices on active exchanges, which are level 1
inputs.
For US corporate bonds and foreign corporate bonds, this category is comprised of corporate bonds of U.S. and foreign companies
from a diverse set of industries and size. The fair values for the U.S. and foreign corporate bonds are determined using quoted prices of
similar securities in active markets and observable data or broker or dealer quotations. The fair values for these investments are
classified as level 2 within the valuation hierarchy.
For property / real estate funds, this category includes real estate properties, partnership equities and investments in operating
companies. The fair value of the assets is determined using discounted cash flows by estimating an income stream for the property plus
a reversion into a present value at a risk adjusted rate. Yield rates and growth assumptions utilized are derived from market transactions
as well as other financial and industry data. The fair value of these investments are classified as level 2 in the valuation hierarchy.
Cash and cash equivalents include cash and short-interest bearing investments with maturities of three months or less. Investments are
valued at cost plus accrued interest. Cash and cash equivalents are classified within level 1 of the valuation hierarchy.
For insurance contracts, the fair value is estimated as the cost of purchasing equivalent annuities on terms consistent with those
currently available in the market. The contracts are with highly rated insurance companies and are classified within level 3 of the
valuation hierarchy. The following table summarizes changes in fair value of the pension plan assets classified as level 3 for the year
ended December 31, 2022:
Balance, December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases, sales, settlements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfers in/out of Level 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 98
(20)
(5)
—
(10)
$ 63
Insurance Contracts
100
The fair values of pension investments as of December 31, 2021 are summarized below:
Fair Value Measurement at December 31, 2021, Using:
Asset category:
Equities securities:
Global equity securities. . . . . . . . . . . . . . . . . . . . . . . . . . .
Global commingled equity funds . . . . . . . . . . . . . . . . . . .
Debt securities:
US government bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign government bonds . . . . . . . . . . . . . . . . . . . . . . . .
US corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . .
Real Estate:
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
$ 93(1)
73(2)
81(3)
39(3)
—
—
Property/ real estate fund . . . . . . . . . . . . . . . . . . . . . . . . .
—
Other:
Insurance contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash & cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . .
—
19(6)
Total at fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$305
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
$ —
—
73(4)
42(4)
1(5)
—
—
$116
$—
—
—
—
—
—
—
98(7)
—
93
73
81
39
73
42
1
98
19
$98
$519
(1)
For global equity securities, this category is comprised of shares of common stock in both U.S. and international companies from a
diverse set of industries and size. Common stock is valuated at the closing market price reported on a U.S. or international exchange
where the security is actively traded. Equity securities are classified within level 1 of the fair value hierarchy.
(2) Global commingled equity funds are comprised of managed funds that invest in common stock of both U.S. and international
companies shares from a diverse set of industries and size. Common stock are valued at the closing market price reported on a U.S. or
international exchange where the security is actively traded. These funds are classified within level 1 of the fair value hierarchy.
(3)
(4)
(5)
(6)
(7)
For US and foreign government bonds, this category includes U.S. treasuries, U.S. federal agency obligations and international
government debt. The fair value of these investments are based on observable quoted prices on active exchanges, which are level 1
inputs.
For US corporate bonds and foreign corporate bonds, this category is comprised of corporate bonds of U.S. and foreign companies
from a diverse set of industries and size. The fair values for the U.S. and foreign corporate bonds are determined using quoted prices of
similar securities in active markets and observable data or broker or dealer quotations. The fair values for these investments are
classified as level 2 within the valuation hierarchy.
For property / real estate funds, this category includes real estate properties, partnership equities and investments in operating
companies. The fair value of the assets is determined using discounted cash flows by estimating an income stream for the property plus
a reversion into a present value at a risk adjusted rate. Yield rates and growth assumptions utilized are derived from market transactions
as well as other financial and industry data. The fair value of these investments are classified as level 2 in the valuation hierarchy.
Cash and cash equivalents include cash and short-interest bearing investments with maturities of three months or less. Investments are
valued at cost plus accrued interest. Cash and cash equivalents are classified within level 1 of the valuation hierarchy.
For insurance contracts, the fair value is estimated as the cost of purchasing equivalent annuities on terms consistent with those
currently available in the market. The contracts are with highly rated insurance companies and are classified within level 3 of the
valuation hierarchy. The following table summarizes changes in fair value of the pension plan assets classified as level 3 for the year
ended December 31, 2021:
Balance, December 31, 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchases, sales, settlements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Transfers in/out of Level 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Balance, December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$111
(6)
(6)
—
(1)
$ 98
Insurance Contracts
101
Defined Contribution Plans
U.S. Savings Investment Plan
In 2006, we established the U.S. Savings Investment Plan (the ‘‘SIP’’), a qualified defined contribution plan
under Section 401(k) of the Internal Revenue Code. Under the SIP, our regular full-time and part-time employees
contribute a portion of their earnings, and we match these contributions up to a predefined threshold. Our
matching contribution is 100% of the first 6% of employee contributions. Effective January 1, 2013, we
established a profit sharing contribution at 6% of employees’ pay (‘‘discretionary contribution’’). A discretionary
contribution of 6% was made for 2022, 2021 and 2020. Our matching contribution to the SIP vests immediately;
however, our discretionary contribution is subject to vesting conditions that must be satisfied over a three-year
vesting period. Contributions under the SIP, including our match, are invested in accordance with the investment
options elected by plan participants. Compensation expenses associated with our matching contribution to the SIP
was $5 million, $5 million and $4 million during 2022, 2021 and 2020, respectively, which was included in
‘‘Selling, general and administrative expenses’’ in the Consolidated Statements of Income. Compensation expense
associated with our discretionary contribution was $5 million in 2022, $5 million in 2021 and $4 million in
2020, which was included in ‘‘Selling, general and administrative expenses’’ in the Consolidated Statements of
Income.
U.S. Benefit Restoration Plan
In 2006, we established the U.S. Benefit Restoration Plan (the ‘‘BRP’’), a nonqualified defined contribution
plan, for employees whose eligible compensation is expected to exceed the IRS compensation limits for qualified
plans. Under the BRP, participants can contribute up to 20% of their annual compensation and incentive. Our
matching contribution under the BRP is the same as the SIP. Our matching contribution under this plan vests
immediately to plan participants. Contributions under the BRP, including our match, are invested in accordance
with the investment options elected by plan participants. Compensation expense associated with our matching
contribution to the BRP was $1 million, $1 million and $1 million during 2022, 2021 and 2020, respectively,
which was included in ‘‘Selling, general and administrative expenses’’ in the Consolidated Statements of Income.
South Africa Defined Contribution Plans
Tronox Mineral Sands Proprietary Limited, a wholly owned subsidiary of the Company, participates in
several defined contribution plans which are registered in the Republic of South Africa and are governed by the
South African Pension Funds Act of 1956. These plans provide retirement and other benefits to all permanent
employees, and where applicable, retired employees and their dependents. The Company contributes a range of
10% to 15% (depending on the plan) of the employees’ predefined pre-tax pensionable earnings. Compensation
expense associated with these plans was $7 million, $5 million, and $4 million during 2022, 2021 and 2020,
respectively, which was included in both ‘‘Costs of goods sold’’ and ‘‘Selling, general and administrative
expenses’’ in the Consolidated Statements of Income.
22. Related Party Transactions
Tasnee / Cristal
At December 31, 2022 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 24% ownership interest.
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 AMIC Debt would remain outstanding debt of the
SPV upon exercise of the Option. 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
102
Slagger (the ‘‘Tronox Loans’’). At both December 31, 2022 and 2021, we have lent AMIC the Tronox Loans
maximum amount of $125 million, which, together with the related accrued interest of $13 million and
$9 million, respectively, is recorded within ‘‘Other long-term assets’’ on the Consolidated Balance Sheet. The
Option did not have a significant impact on the financial statements as of or for the periods ended December 31,
2022 and 2021. For the years ended December 31, 2022 and 2021, Tronox recorded $60 million and nil ,
respectively, for purchases of feedstock material produced by the Slagger. Such sales are recorded in ‘‘Cost of
goods sold’’ on the Consolidated Statement of Income. At December 31, 2022 and 2021, amounts due related to
Slagger feedstock purchases were $14 million and nil, respectively, which are recorded within ‘‘Accrued
liabilities’’ on the Consolidated Balance Sheet.
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 (i) our forgiveness of the Tronox Loans principal and accrued interest
thereon, and (ii) the SPV’s assumption of $36 million of indebtedness plus accrued interest thereon lent by
AMIC to the SPV. Under the First Amendment, the SPV would not assume any of the AMIC Debt.
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 management fee,
which is subject to certain success incentives if and when the Slagger achieves the Option Criteria. For both of
the years ended December 31, 2022 and 2021, Tronox recorded management fees of $8 million, in ‘‘Other
(expense) income, net’’ within the Consolidated Statement of Income. For the years ended December 31, 2022
and 2021, Tronox recorded other technical support fees received under the Technical Services Agreement of
$2 million and nil , respectively, in ‘‘Selling, general and administrative expenses’’ on the Consolidated
Statement of Income. At December 31, 2022 and 2021, Tronox had a receivable due from AMIC related to
management fee and technical support fees of $2 million and $1 million, respectively, that is recorded within
‘‘Prepaid and other assets’’ on the Consolidated Balance Sheet.
At December 31, 2022, Tronox had a receivable due from Tasnee of $2 million related primarily to
pre-acquisition period tax matters in process with certain tax authorities which are reimbursable from Tasnee. At
December 31, 2021, Tronox had a receivable due from Tasnee of $8 million related primarily to $4 million of
stamp duty taxes reimbursable from Tasnee and $3 million for pre-acquisition period tax matters. These
receivables are recorded within ‘‘Prepaid and other assets’’ on the Consolidated Balance Sheet.
On December 29, 2019, we entered into an agreement with Cristal to acquire certain assets co-located at our
Yanbu facility which produce metal grade TiCl4 (‘‘MGT’’). Consideration for the acquisition was the assumption
by Tronox of a $36 million note payable to Cristal (the ‘‘MGT Loan’’). 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.
On December 17, 2020 we completed the MGT transaction. Repayment of the $36 million note payable is
based on a fixed U.S. dollar per metric ton quantity of MGT delivered by us to ATTM over time and therefore
the ultimate maturity date is variable in nature. If ATTM fails to purchase MGT from us under certain
contractually agreed upon conditions, then at our election we may terminate the MGT supply agreement with
ATTM and will no longer owe any amount under the loan agreement with Cristal. We currently estimate the
ultimate maturity to be between approximately five and six years, subject to actual future MGT production
levels. The interest rate on the note payable is based on the SAIBOR plus a premium. At December 31, 2022
and 2021 the outstanding balance of the note payable was $30 million and $33 million, respectively, of which
$7 million and $7 million, respectively, was expected to be paid within the next twelve months. The note payable
is recorded within ‘‘Long-term debt, net’’ and ‘‘Long-term debt due within one year’’ on the Consolidated
Balance Sheet. For both years ended December 31, 2022 and 2021, Tronox recorded interest expense of
103
$1 million related to the MGT Loan, which is recorded in ‘‘Interest expense’’ on the Consolidated Statement of
Income. During the years ended December 31, 2022 and 2021, Tronox recorded $3 million and $4 million,
respectively, for MGT Loan repayments to Cristal that is recorded within ‘‘Net sales’’ on the Consolidated
Statement of Income.
As a result of these transactions we have entered into related to the MGT assets, Tronox recorded $4 million
and $8 million for purchase of chlorine gas for the years ended December 31, 2022 and 2021, respectively, from
ATTM and such amounts are recorded in ‘‘Cost of goods sold’’ on the Consolidated Statement of Income. The
amount due to ATTM as of December 31, 2022 and 2021, for the purchase of chlorine gas was $1 million and
$1 million, respectively, and is recorded within ‘‘Accrued liabilities’’ on the Consolidated Balance Sheet.
During the years ended December 31, 2022 and 2021, Tronox recorded $29 million and $31 million,
respectively, for MGT sales made to AMIC. The MGT sales are recorded in ‘‘Net sales’’ on the Consolidated
Statement of Income. At December 31, 2022 and December 31, 2021, Tronox had a receivable from AMIC of
$6 million and $6 million, respectively, from MGT sales that is recorded within ‘‘Prepaid and other assets’’ on
the Consolidated Balance Sheet.
23. Segment Information
We operate our business under one operating segment, Tronox, which is also our reportable segment. The
Company’s chief operating decision maker, who are its Co-CEOs, reviews financial information presented at the
consolidated level for purposes of allocating resources and evaluating financial performance. Since we operate
our business under one segment, there is no difference between our consolidated results and segment results.
We disaggregate revenue from contracts with customers by product type and geographic area as well as
sales based on country of production. 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.
During 2022, 2021 and 2020 our ten largest third-party customers represented 30%, 28%, and 32%,
respectively, of our consolidated net sales. During 2022, 2021, and 2020, no single customer accounted for 10 %
of our consolidated net sales.
Net sales to external customers based on country of production, were as follows:
Year Ended December 31,
2021
2020
2022
U.S. operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International operations:
United Kingdom. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
South Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Saudi Arabia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other - international. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 733
$ 716
$ 653
331
822
484
419
665
396
873
441
420
726
301
637
330
269
568
Total net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$3,454
$3,572
$2,758
See Note 3 for further information on revenues.
104
There is no difference between the total consolidated assets and our segment assets. Property, plant and
equipment, net, mineral leaseholds, net, and lease right of use assets, net by geographic region, were as follows:
U.S. operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
International operations:
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Saudi Arabia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
South Africa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other - international . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 31,
2022
$ 308
2021
$ 251
93
226
705
1,093
242
97
241
705
1,000
248
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$2,667
$2,542
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision of and with the participation of Tronox’s management, including our Co-CEOs and
CFO, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as
such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended)
(the ‘‘Exchange Act’’), as of December 31, 2022, the end of the period covered by this report. Based on that
evaluation, our co-CEOs and CFO have concluded that the Company’s disclosure controls and procedures were
effective as of that date. Tronox’s disclosure controls and procedures are designed to ensure that information
required to be disclosed by Tronox in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and
that such information is accumulated and communicated to Tronox’s management, including Tronox’s co-CEOs
and CFO, or other person performing similar functions, as appropriate to allow timely decisions regarding
required disclosure.
Management’s Report on Internal Control Over Financial Reporting
Management of Tronox Holdings plc and its subsidiaries is responsible for establishing and maintaining
adequate internal control over financial reporting. Internal controls over financial reporting is a process designed
under the supervision of our interim principal co-executive officers and principal financial officer to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s
financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
Our internal controls over financial reporting include those policies and procedures that:
•
•
•
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company;
provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with U.S. generally accepted accounting principles, and that our
receipts and expenditures are being made only in accordance with authorizations of the Company’s
management and directors; and
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use
or disposition of our assets that could have a material effect on the financial statements.
Management assessed the effectiveness of our internal controls over financial reporting as of December 31,
2022. In making this assessment, management used the criteria in Internal Control-Integrated Framework (2013)
set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our
assessment using those criteria, management concluded that our internal control over financial reporting as of
December 31, 2022 was effective.
105
Because of its inherent limitations, internal controls over financial reporting may not prevent or detect
misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 has
been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their
report, which appears in Item 8 of this Form 10-K.
Changes in Internal Control Over Financial Reporting
We are currently undergoing a multi-year IT-enabled transformation program that includes increased
automation of both operational and financial systems, including the global enterprise risk management program,
during third quarter of 2022, we implemented upgrades to our financial systems and platforms in certain regions.
The full implementation is expected to occur in phases over a number of years. As the phased implementation of
this system occurs, we expect certain changes to our processes and procedures which, in turn, will result in
changes to our internal control over financial reporting.
While we expect this transformation program to strengthen our internal financial controls, management will
continue to evaluate and monitor our internal controls as processes and procedures in each of the affected areas
evolve.
Other than as discussed above, there have been no changes to our internal control over financial reporting
during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
106
Item 10. Directors, Executive Officers and Corporate Governance
Information about our executive officers as of February 22, 2023:
PART III
NAME
POSITION
John D. Romano
Jean-Francois Turgeon
Timothy Carlson
Jeff Engle
Russell Austin
Jeffrey Neuman
D. John Srivisal
Melissa Zona
Jennifer Guenther
Jonathan P. Flood
Co-Chief Executive Officer
Co-Chief Executive Officer
Senior Vice President, Chief Financial Officer
Senior Vice President, Commercial and Strategy
Senior Vice President, Operations
Senior Vice President, General Counsel and Secretary
Senior Vice President, Business Development and Finance
Senior Vice President, Chief Sustainability and Human Resources Officer
Vice President, Head of Investor Relations
Vice President, Controller and Principal Accounting Officer
Information about members of our Board of Directors as of February 22, 2023:
NAME
CURRENT OCCUPATION
Ilan Kaufthal
Mutlaq Al-Morished
Vanessa Guthrie
Peter B. Johnston
Ginger M. Jones
Stephen Jones
Moazzam Khan
Sipho Nkosi
John Romano
Jean-Francois Turgeon
Chairman of the Board, Tronox Holdings plc; Eastwind Advisors
CEO, TASNEE
Former Managing Director and Chief Executive Officer, Toro Energy Limited
Former Interim CEO, Tronox Limited; Former Global Head of Nickel Assets, Glencore
Former Senior Vice President and CFO, Cooper Tire & Rubber Company
Former President and CEO, Covanta Holding Corporation
Managing Director, Cristal International Holdings BV
Former CEO, Exxaro Resources Limited
Co-Chief Executive Officer, Tronox
Co-Chief Executive Officer, Tronox
Other information regarding our executive officers, members of the Board of Directors, including its audit
committee and audit committee financial experts, as well as information regarding our Code of Ethics and
Business Conduct that applies to our co-Chief Executive Officers and senior financial officers, will be presented
in Tronox Holding plc’s definitive proxy statement for its 2023 annual general meeting of shareholders, which
will be filed not later than 120 days after the end of the fiscal year covered by this Annual Report on
Form 10-K, under the headings ‘‘Proposal 1 — Election of Directors’’ and ‘‘Code of Ethics and Business
Conduct’’ and is incorporated herein by reference.
Item 11.
Executive Compensation
Information regarding executive officer and director compensation will be presented in Tronox Holdings
plc’s definitive proxy statement for its 2023 annual general meeting of shareholders, filed not later than 120 days
after the end of the fiscal year covered by this Annual Report on Form 10-K, under the headings ‘‘Human
Resources and Compensation Committee Interlocks and Insider Participation’’, ‘‘2022 Non-Employee Director
Compensation’’ and ‘‘Compensation Discussion and Analysis’’ and is incorporated herein by reference, except as
to information required pursuant to Item 402(v) of Regulation S-K relating to pay versus performance.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Shareholder
Matters
Information regarding security ownership of certain beneficial owners and management and related
shareholder matters will be presented in Tronox Holdings plc’s definitive proxy statement for its 2023 annual
general meeting of shareholders, filed not later than 120 days after the end of the fiscal year covered by this
Annual Report on Form 10-K, under the heading ‘‘Security Ownership of Certain Beneficial Owners’’ and is
incorporated herein by reference.
107
Equity Compensation Plan Information
The following table provides information as of December 31, 2022 regarding securities issued under the
Tronox Holdings plc Amended and Restated Management Equity Incentive Plan (the ‘‘Tronox Holdings plc
MEIP’’).
Number of securities
to be issued upon
exercise of
outstanding
restricted share
units and options
Weighted-average
exercise price of
outstanding
options(1)
Number of securities
remaining available
for future
issuance under
equity compensation
plans (excluding
securities reflected in
the second column)(2)
Equity compensation plans approved by security
holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity compensation plans not approved by security
holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,305,496
—
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,305,496
$20.55
—
$20.55
6,257,303
—
6,257,303
(1)
(2)
Because there is no exercise price for restricted share units, such awards are not included in the weighted-average exercise price.
Each restricted share unit awarded under the Tronox Holdings plc MEIP was granted at no cost to the persons receiving them and
represents the contingent right to receive the equivalent number of ordinary shares.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Information regarding certain relationships and related transactions and director independence will be
presented in Tronox Holdings plc’s definitive proxy statement for its 2023 annual general meeting of
shareholders, filed not later than 120 days after the end of the fiscal year covered by this Annual Report on
Form 10-K, under the heading ‘‘Certain Relationships and Related Transactions’’ and is incorporated herein by
reference.
Item 14.
Principal Accounting Fees and Services.
Information regarding principal accounting fees and services will be presented in Tronox Holdings plc’s
definitive proxy statement for its 2023 annual general meeting of shareholders, filed not later than 120 days after
the end of the fiscal year covered by this Annual Report on Form 10-K, under the heading ‘‘Fees Paid to
Independent Registered Public Accounting Firm’’ and is incorporated herein by reference.
108
PART IV
Item 15.
Exhibits, Financial Statement Schedules.
(a) The following documents are filed as part of this Annual Report on Form 10-K:
1. Consolidated Financial Statements
Reference is made to the Index to Consolidated Financial Statements and Consolidated Financial Statement
Schedules appearing at ‘‘Item 8. Financial Statements and Supplementary Data’’ in this report.
2. Consolidated Financial Statement Schedules
All financial statement schedules are omitted as they are inapplicable, or the required information has been
included in the consolidated financial statements or notes thereto.
3.
Exhibits
(b) The exhibits listed in the following table have been filed with, or incorporated by reference into, this Annual
Report on Form 10-K.
2.1
2.2
2.3
3.1
4.1
4.2
4.3
4.4
4.5
10.1*
10.2*
10.3*
10.4*
Transaction Agreement, dated as of February 21, 2017, by and between Cristal, Tronox Limited and
Cristal Inorganic Chemicals Netherlands Coöperatief W.A. (incorporated by reference to Exhibit 2.1 of
the Current Report on Form 8-K filed on February 21, 2017).
Amendment No. 1 to Transaction Agreement, dated as of March 1, 2018, by and among The National
Titanium Dioxide Company Limited, Tronox Limited and Cristal Inorganic Chemicals Netherlands
Coöperatief W.A. (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K filed on
March 1, 2018).
Amendment No. 2 to Transaction Agreement dated March 28, 2019, by and among The National
Titanium Dioxide Company Limited, Tronox Limited, and, solely for certain purposes, Cristal
Inorganic Chemicals Netherlands Coöperatief W.A. (incorporated by reference to Exhibit 2.1 of the
Current Report on Form 8-K filed on April 2, 2019).
Articles of Association of Tronox Holdings plc (incorporated by reference to Exhibit 3.1 of the Current
Report on Form 8- K filed on March 27, 2019).
Specimen ordinary share certificate of Tronox Holdings plc (incorporated by reference to Exhibit 4.1
of the Current Report on Form 8-K filed on March 27, 2019).
Shareholders Agreement, dated April 10, 2019, by and between Tronox Holdings plc, Cristal Inorganic
Chemicals Netherlands Coöperatief W.A., The National Titanium Dioxide Company Limited, Gulf
Investment Corporation and Dr. Talal Al-Shair (incorporated by reference to Exhibit 4.1 of the Current
Report on Form 8-K filed on April 11, 2019).
Description of Securities of the Registrant (filed herewith).
Indenture, dated as of March 15, 2021, among Tronox Incorporated, Tronox Holdings plc and the
guarantors named therein and Wilmington Trust, National Association, as trustee (incorporated by
reference to Exhibit 4.1 of the Current Report on Form 8-K filed on March 15, 2021).
Form of 4.625 % Senior Notes due 2029 (incorporated by reference to Exhibit 4.1 of the Current
Report on Form 8-K filed on March 15, 2021).
Tronox Holdings plc Amended and Restated Management Equity Incentive Plan (incorporated by
reference to Exhibit 10.2 of the Current Report on Form 8-K filed on March 27, 2019).
Tronox Holdings plc Amended and Restated Annual Bonus Incentive Plan (incorporated by reference
to Exhibit 10.3 of the Current Report on Form 8-K filed on March 27, 2019).
Offer letter, dated November 7, 2019 by and between Tronox Holdings plc and Timothy Carlson
(incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed on
November 12, 2019).
General form of executive officer Time-Based Restricted Share Unit Agreement (incorporated by
reference to Exhibit 10.4 of the Annual Report on Form 10-K filed on February 22, 2022).
109
10.5*
10.6*
10.7*
10.8
10.9
10.10
10.11
10.12*
10.13*
10.14*
14.1
21.1
23.1
24.0
31.1
31.2
31.3
32.1
32.2
32.3
96.1
96.2
96.3
96.4
General form of executive officer TSR Performance-Based Restricted Share Unit Agreement
(incorporated by reference to Exhibit 10.5 of the Annual Report on Form 10-K filed on February 22,
2022).
General form of executive officer ROIC Performance-Based Restricted Share Unit Agreement
(incorporated by reference to Exhibit 10.6 of the Annual Report on Form 10-K filed on February 22,
2022).
General form of Director Grant Restricted Share Unit Agreement (incorporated by reference to
Exhibit 10.3 to the Quarterly Report on Form 10-Q filed on May 4, 2017).
Form of Director Deed of Indemnification (incorporated by reference to Exhibit 10.4 of the Current
Report on Form 8-K filed on March 27, 2019).
Agreement for the Provision of Depositary Services and Custody Services, dated as of April 10, 2019,
in respect of Tronox Holdings plc Depositary Receipts among Computershare Trust Company, N.A.,
Tronox Holdings plc, Cristal Inorganic Chemicals Netherlands Coöperatief W.A. and all other holders
from time to time of depositary receipts issued in accordance herewith (incorporated by reference to
Exhibit 10.1 of the Current Report on Form 8-K filed on April 15, 2019).
Amended and Restated First Lien Credit Agreement dated as of September 22, 2017 (as amended
through and including Mach 11, 2021) with a syndicate of lenders and HSBC Bank USA, National
Association, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 of
the Current Report on Form 8-K filed on March 11, 2021).
Amendment No. 1 to Amended and Restated First Lien Credit Agreement, dated as of April 4, 2022,
with the incremental term lender party thereto, and HSBC Bank USA, National Association, as
administrative agent and collateral agent (incorporated by reference to Exhibit 10.1 of the Current
Report on Form 8-K filed on April 4, 2022).
Retirement Agreement dated as of March 18, 2021 by and between the Company and
Mr. Jeffry N. Quinn (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K
filed on March 18, 2021).
Employment Agreement dated as of March 18, 2021 by and between the Company and
Mr. John D. Romano (incorporated by reference to Exhibit 10.2 of the Current Report on Form 8-K
filed on March 18, 2021).
Employment Agreement dated as of March 18, 2021 by and between the Company and
Mr. Jean-Francois Turgeon (incorporated by reference to Exhibit 10.3 of the Current Report on
Form 8-K filed on March 18, 2021).
Tronox Code of Ethics and Business Conduct, effective March 27, 2019 (incorporated by reference to
Exhibit 14.1 of the Annual Report on Form 10-K filed on March 16, 2020).
Subsidiaries of Tronox Holdings plc. (filed herewith)
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm for Tronox
Holdings plc. (furnished herewith)
Power of Attorney (filed herewith)
Rule 13a-14(a) Certification of John Romano. (furnished herewith)
Rule 13a-14(a) Certification of Jean-Francois Turgeon. (furnished herewith)
Rule 13a-14(a) Certification of Timothy Carlson. (furnished herewith)
Section 1350 Certification for John Romano. (furnished herewith)
Section 1350 Certification for Jean-Francois Turgeon. (furnished herewith)
Section 1350 Certification for Timothy Carlson. (furnished herewith)
Technical Report Summary on the Cooljarloo Australia operations (incorporated by reference to
Exhibit 96.1 of the Annual Report on Form 10-K filed on February 22, 2022).
Technical Report Summary on the Atlas and Campaspe Australia operations (incorporated by reference
to Exhibit 96.2 of the Annual Report on Form 10-K filed on February 22, 2022).
Technical Report Summary on the Namakwa Sands South Africa operations (incorporated by reference
to Exhibit 96.3 of the Annual Report on Form 10-K filed on February 22, 2022).
Technical Report Summary on the KZN Mineral Sands South Africa operations (incorporated by
reference to Exhibit 96.4 of the Annual Report on Form 10-K filed on February 22, 2022).
101.INS Inline XBRL Instance Document (filed herewith)
110
101.SCH Inline XBRL Taxonomy Extension Schema Document (filed herewith)
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith)
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document (filed herewith)
101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith)
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith)
104
The cover page from the Company’s Annual Report on Form 10-K for the year ended December 31,
2022, which has been formatted in Inline XBRL, and included with Exhibit 101.
*
Indicates management contract or compensatory plan or arrangement.
Item 16.
Form 10-K Summary.
None.
111
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this
22nd day of February 2023.
SIGNATURES
TRONOX HOLDINGS PLC
(Registrant)
By:
Name:
Title:
/s/ Jonathan P. Flood
Jonathan P. Flood
Vice President, Controller and Principal Accounting
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
/s/ John Romano
John Romano
Title
Co-Chief Executive Officer, Director
(Principal Executive Officer)
/s/ Jean-Francois Turgeon
Jean-Francois Turgeon
Co-Chief Executive Officer, Director
(Principal Executive Officer)
Date
February 22, 2023
February 22, 2023
Senior Vice President and Chief Financial Officer
(Principal Financial Officer)
February 22, 2023
Vice President and Controller
(Principal Accounting Officer)
February 22, 2023
Chairman of the Board of Directors
February 22, 2023
Director
Director
Director
Director
Director
Director
Director
February 22, 2023
February 22, 2023
February 22, 2023
February 22, 2023
February 22, 2023
February 22, 2023
February 22, 2023
February 22, 2023
*By: /s/ Jeffrey Neuman
Jeffrey Neuman, Attorney-in-fact
Senior Vice President, General Counsel
and Secretary
112
/s/ Timothy Carlson
Timothy Carlson
/s/ Jonathan P. Flood
Jonathan P. Flood
*
Ilan Kaufthal
*
Mutlaq Al-Morished
*
Vanessa Guthrie
*
Stephen Jones
*
Moazzam Khan
*
Peter B. Johnston
*
Sipho Nkosi
*
Ginger M. Jones
S H A R E H O L D E R I N F O R M A T I O N
Tronox Holdings plc is a public
limited company incorporated
under the laws of England and
Wales. We have global operations
in North America, South America,
Europe, the Middle East, Africa,
Asia and Australia.
CORPORATE OFFICES
United Kingdom:
Laporte Road, Stallingborough
Grimsby, North East Lincolnshire
DN40 2PR
United Kingdom
United States:
263 Tresser Boulevard,
Suite 1100
Stamford, CT 06901
USA
+1 203.705.3800
This report is made available to
shareholders in advance of the
annual meeting of shareholders
to be held at 10 a.m. GMT, May 3,
2023. The proxy will be made
available to shareholders on or
about March 23, 2023, at which
time proxies for the meeting will
be requested.
Information about Tronox,
including financial information,
can be found on our website:
www.tronox.com.
STOCK LISTING
New York Stock Exchange
TICKER SYMBOL
TROX
TRANSFER AGENT
AND REGISTRAR
Computershare Trust Company, N.A.
SHAREHOLDER
SERVICES TELEPHONE
Toll-free: +1 800.736.3001
International: +1 781. 575.3100
SHAREHOLDER
CORRESPONDENCE
REGULAR MAIL
Computershare
Investor Services
P.O. Box 505000
Louisville, KY, 40233-5000
OVERNIGHT MAIL
Computershare Investor Services
462 South 4th Street, Suite 1600
Louisville, KY, 40202
SHAREHOLDER
EMAIL INQUIRIES
web.queries@computershare.com
ELECTRONIC ACCESS
www.proxyvote.com
Copies of the Tronox 2022
Annual Report and proxy
statement are available at
www.proxyvote.com
A copy of the company’s Form
10-K and other filings with the
U.S. Securities and Exchange
Commission are available at
investor.tronox.com.
CERTIFICATIONS
Tronox has included as Exhibits 31.1,
31.2, 31.3, 32.1, 32.2, and 32.3 to its
Annual Report on Form 10-K for fiscal
year 2022 filed with the Securities and
Exchange Commission certificates of its
Co-Chief Executive Officers and Chief
Financial Officer certifying, among
other things, the information contained
in the Form 10-K.
Annually, Tronox submits to the
New York Stock Exchange (NYSE)
a certificate of Tronox’s Co-Chief
Executive Officers certifying that they
were not aware of any violation by
Tronox of NYSE corporate governance
listing standards as of the date of the
certification.
SHAREHOLDER INFORMATION
Our website www.tronox.com
provides shareholders easy access
to Tronox’s financial results.
Shareholders may also contact
Jennifer Guenther, Vice President,
Investor Relations, at +1 646.960.6598.
Tronox and its operating unit
names, logos, and product service
designators are either the registered
or unregistered trademarks or trade
names of Tronox Holdings plc and
its subsidiaries.
This paper has been certified
to meet the environmental and
social standards of the Forest
Stewardship Council® (FSC®)
and from well-managed forests
and other responsible sources.
Our global operations are positioned
to meet our customers’ needs around
the world.
Tronox Corporate
Chloride Pigment
Sulfate Pigment
Mineral Sands
Operational Offices
Europe: 953
North America: 647
South America: 354
KSA: 564
Asia-Pacific: 729
Australia: 1,259
South Africa: 2,105
Tronox Holdings plc at a Glance
Tronox Holdings plc is a public limited company incorporated under the laws of England and Wales. We are the world’s
leading integrated manufacturer of titanium dioxide pigment, sold under the TiONA® brand. We operate titanium-bearing
mineral sand mines and beneficiation and smelting operations in Australia and South Africa to produce feedstock materials
that can be processed into titanium dioxide for pigment, as well as high-purity titanium chemicals, including titanium
tetrachloride and CristalACTiV™ ultrafine titanium dioxide. We consume our feedstock materials in our own pigment facilities
in the United States, Australia, Brazil, United Kingdom, France, the Netherlands, China and Saudi Arabia. The mining,
beneficiation and smelting of titanium bearing mineral sands also creates meaningful quantities of co-products including
zircon, pig iron and the rare-earth bearing mineral, monazite, which we also supply to customers around the world.
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United Kingdom:
Laporte Road, Stallingborough
Grimsby, North East Lincolnshire
DN40 2PR
United States:
263 Tresser Boulevard, Suite 1100
Stamford, CT 06901
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